Brief Report of Financial Results（Unaudited）

(For the Three Months Ended May 31, 2023)

July 11，2023

Company name AEON Financial Service Co., Ltd.

Listings

Tokyo Stock Exchange, Prime Market

Security code

8570

URL

https://www.aeonfinancial.co.jp/en/

Representative

Kenji Fujita, President and CEO

Contact:

Tomoyuki Mitsufuji, Director, Managing Executive Officer

1. Business performance (For the Three Months ended May 31, 2023 and for the Three Months ended May 31, 2022)

(1) Consolidated Operating Results

(Millions of yen truncated to the nearest million, %, yen)

Profit

Operating

Percentage

Operating

Percentage

Ordinary

Percentage

attributable

Percentage

income

Change

profit

Change

profit

Change

to owners

Change

of parent

Three Months ended

May 31, 2023

116,600

9.0

9,191

△39.9

9,588

△41.5

3,596

△54.6

Three Months ended

May 31, 2022

106,965

-

15,283

△26.2

16,382

△24.2

7,917

△32.1

(Note) Comprehensive income; The 1st Quarter of Fiscal 2023; 15,712 million ( △17.1%),

The 1st Quarter of Fiscal 2022; 18,960 million ( △9.2%)

(yen)

Net Income per Share

Fully Diluted Net

Income per Share

Three Months ended

16.66

16.66

May 31, 2023

Three Months ended

36.68

36.68

May 31, 2022

(Note) "Accounting Standards for Revenue Recognition" (Corporate Accounting Standards No. 29, March 31, 2020) have been applied since the beginning of the first quarter of the current consolidated accounting period, and each figure for the first quarter of the fiscal year ending February 28, 2023 is the value after the application of the accounting standard, etc., and the rate of change in operating revenue from the same quarter of the previous year is not shown.

(2) Financial Position

(Millions of yen truncated to the nearest million, %, yen)

Total Assets

Net Assets

Total equity ratio

Net Assets per Share

Three Months ended

May 31, 2023

6,782,695

549,301

6.5

2,031.26

Fiscal 2022 ended

February 28, 2023

6,659,468

541,133

6.5

2,014.29

(Note) Amendments from the most recently published dividend forecast : No

2. Cash Dividends

(yen)

Dividend per share

(Base date)

First quarter

Interim

Third quarter

Term end

Annual

period

period

period

February 2023 term

－

20.00

－

33.00

53.00

February 2024 term

－

February 2023 term (Estimated)

25.00

－

28.00

53.00

(Note) Amendments from the most recently published dividend forecast : No

3. Projections (For the fiscal year ending February 28, 2024)

(Millions of yen, %) (% is the percentage of change to the previous year)

Profit

Operating

YoY

Operating

YoY

Ordinary

YoY

attributable

YoY

Net income

income

profit

profit

to owners

per share

of parent

Full term

480,000

1.5

61,000

3.6

61,000

△0.9

27,000

△12.0

125.08

(Note) Amendments from the most recently published projections forecast : No Interim projections forecast are not disclosed

※Notes

(1) Change in significant subsidiary during the term

(Change in specified subsidiary that caused a change in the scope of consolidation): No

  1. Application of accounting treatment specific to the preparation of quarterly consolidated financial statements: No
  2. Change in accounting principle, procedure, disclosure, etc. concerning preparation of consolidated financial statements ① Change due to a newly issued accounting requirement: Yes
    ②Change other than ① : No
    ③Change accounting quotation: No
    ④Restatement: No
  3. Number of shares issued (Common stock)
  1. Number of shares issued at end of period (treasury stock included): May 31, 2023; 216,010,128 shares, Fiscal 2022; 216,010,128 shares
  2. Number of shares held in treasury at end of period:

May 31, 2023; 152,541 shares; Fiscal 2022; 152,460 shares

    1. Average number of shares outstanding during the period: Three Months ended May 31, 2023: 215,857,641 shares Three Months ended May 31, 2022: 215,839,120 shares
  • This Brief Report of Financial Results (Unaudited) is not required for submission for quarterly audit review.
  • Projections above are based on management's assumptions using information available at the time of publication. Owing to various factors, actual results may differ from these projections.
  • The Company provides FACT BOOK on its business and performance on its website.

Accompanying Materials

Contents

1.

Review of Operating Results and Financial Statements

2

(1) Analysis of Operating Results

2

(2)

Consolidated Financial Condition

6

(3)

Consolidated Earnings Forecast

6

2.

Consolidated Financial Statements and Main Notes

7

(1)

Consolidated Balance Sheet

7

(2)

Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

9

(3)

Notes on the Consolidated Financial Statements

11

(Notes on the Going-concern Assumption)

11

(Notes on Significant Changes in the Amount of Shareholders' Equity)

11

(Change in significant subsidiary during the term)

11

(Changes in Accounting Policy)

11

(Segment Information)

11

(Material Subsequent Events)

13

3.

Overview of the Companies Involved in the Merger

13

4.

Overview of accounting procedures to be carried out

13

1. Review of Operating Results and Financial Statements

(1) Analysis of Operating Results

During the first quarter of the current fiscal year under review, the business environment of the Company saw economic activities on a recovery trend in and outside Japan, due to the decreasing effects of COVI-19. At the same time, there remained uncertainties such as downside risks of overseas economies due to continued tight monetary policies in various countries except Japan, and suppressed consumer spending caused by rising prices. Under such circumstances, the Company endeavored to increase the volume of credit card purchase transactions and the outstanding receivables balance by offering financial services in response to the consumption trends of customers and their financial needs, and implementing timely and appropriate sales promotions. The Company increased the outstanding receivables of both personal loans and installment finance in countries where the Company operates, and the consolidated operating revenue amounted to ¥116,600 million (109.0% of the same period last year). Consolidated operating profit amounted to ¥9,191 million (60.1% of the same period last year). This was caused by an increase in provision for allowance for loan losses due to increased operating receivables balance and increases in expenses for sales promotion enhancement aimed at expanding its customer base and transaction volumes. Consolidated ordinary profit was ¥9,588 million (58.5% of the same period last year) and profit attributable to owners of parent was ¥3,596 million (45.4% of the same period last year).

As of June 1, 2023, the Company merged with its subsidiary AEON Credit Services Co., Ltd. and launched a new management system. The Company set "Second Founding: Value Chain Transformation and New Network Creation" as the basic policy of the Medium-Term Management Plan (FY2021-2025), and has been driving reform toward the Group's growth. Through this business integration, the Company will accelerate strategic utilization of management resources across the Group; further speed up decision-making; and by connecting AEON Group companies and external partners through mainly payment services, expand and improve financial instruments and services of the Group as well as its customer bases With these efforts, the Company aims to become an intimate financial group to its customers.

Operating results for the third quarter of the fiscal year ended May 31, 2023 are as follows:

(Unit : Millions of yen)

Previous 1Q

1Q

Changes

Ratio

Operating revenue

106,965

116,000

9,634

9.0%

Operating profit

15,283

9,191

△6,091

△39.9%

Ordinary profit

16,382

9,588

△6,794

△41.5%

Profit (loss) attributable to owners

7,917

3,956

△4,320

△54.6%

of parent (△)

- 1 -

Segment results for the third quarter of the fiscal year ended May 31, 2023 were as follows:

(Unit : Millions of yen)

Operating revenue

Operating profit (loss) (△)

Previous 1Q

1Q

Ratio

Previous 1Q

1Q

Ratio

Retail

41,015

42,808

4.4%

307

75

△75.4%

Domestic

Solution

42,039

44,786

6.5%

2,543

1,758

△30.9%

Domestic

68,203

71,331

4.6%

2,749

1,396

△49.2％

Total*

China

4,621

6,746

46.0％

1,523

2,154

41.5％

Global

Mekong

20,277

21,694

7.0％

5,213

2,707

△48.1％

Malay

14,043

16,911

20.4％

6,111

3,290

△46.2％

Global

38,942

45,352

16.5%

12,848

8,152

△36.5％

Total*

Total

121,997

132,947

9.0％

15,698

9,986

△36.4％

Adjustments

△15,031

△16,346

―

△415

△794

―

Consolidated

statements

106,965

116,600

9.0％

15,283

9,191

△39.9％

appropriation

* Figures in domestic total and global total are those after offsetting inter-segment transactions that are included in each business.

[Business Segment Information]

In the domestic retail business, AEON Bank Ltd. took advantage of its brick-and-mortar office where customers can drop by when they shop at the AEON stores and continued to take measures to meet their needs for consultation. The bank has also been building an online environment that allows customers to receive consultation equivalent to its brick-and-mortar office. New offices are established as OMO model stores, which are hybrid of online and offline features. They have an online support desk for various applications, and an "Online Consultation Service," in which customers can consult online from home, or anywhere convenient for them, with the same staff member they see at the office by screen-sharing. The bank can now offer consultation and answer inquiries at a consistent quality anywhere that is convenient for customers.

In the housing loan business, the bank revised the terms of the "AEON Select Club" in March 2023, which is a limited membership program for borrowers of the bank's housing loans and allows club members to have a 5% discount on purchases at AEON Group stores. In addition to removing the purchase limit which is subject to the 5% discount, the effective period given to the borrowers of the bank's housing loan was extended from five years to the completion of repayment of the qualified housing loans. The number of housing loan consultations and preliminary applications have been steadily increasing through active promotion of the said program at offices and online. The bank will endeavor to further meet needs of customers toward future housing loan closures. The Company will continue implementing cross-selling that give new values to customers, continuously making suggestions on financial services suitable for the life stage of the customers by having them use the Group's services for a long period of time with its housing loan as their starting point. As a result of these efforts, the outstanding housing loans of the bank before securitization rose to ¥2,704,364 million, up ¥43,447 million from the beginning of the fiscal year. The number of deposit accounts of the bank was 8,400,000 at the end of the first quarter of the current fiscal year, up 110,000 from the beginning of the fiscal year, thanks to the increase in the number of members of the AEON Card Select (AEON card integrated with bank cash card function) and winning young people's need for debit cards. The amount of deposits was ¥4,430,353 million at the end of the first quarter, up ¥30,638 million from the beginning of the fiscal year.

In revolving credit card purchases and installment finance, the bank improved customer usability by adding a simulation function that allows customers to check their payment schedules online or on the smartphone app, in

- 2 -

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

AEON Financial Service Co. Ltd. published this content on 21 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 July 2023 04:45:09 UTC.