AEON Financial Service (8570): FY2025 Results Summary — Operating Profit Flat at ¥60.6 bn as Net Income Rises to ¥21.0 bn

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

AEON Financial Service Co., Ltd. published its FY2025 IR Presentation Material on April 8, 2026. Consolidated operating revenue was ¥569.3 bn (YoY 107%), operating profit was ¥60.6 bn (YoY 99%), ordinary profit was ¥60.6 bn (YoY 97%) and profit attributable to owners of parent was ¥21.0 bn. The company explains that operating profit remained at the same level as the previous year due to the absence of securitization gains and increased procurement costs, but that net profit increased due to a reduction in one-time expenses. The same presentation also set out a new Medium-Term Management Plan for FY2026–FY2030.

Consolidated Results (Full-Year Actual)

Against the FY2025 forecast of ¥570.0 bn in operating revenue and ¥57.0 bn in operating profit, the rates of achievement were 100% and 106% respectively, while profit attributable to owners of parent matched the ¥21.0 bn forecast at a 100% rate of achievement. By region, domestic operating revenue was ¥331.6 bn (YoY 106%) with operating profit of ¥18.5 bn (YoY 83%), and overseas operating revenue was ¥240.4 bn (YoY 108%) with operating profit of ¥41.8 bn (YoY 108%). ROE was 4.5% (YoY +1.1pt).

Item	FY2025 (Consolidated)	YoY	FY2025 Forecast	Rate of achievement
Operating revenue	¥569.3 bn	107%	¥570.0 bn	100%
Operating profit	¥60.6 bn	99%	¥57.0 bn	106%
Ordinary profit	¥60.6 bn	97%	¥57.0 bn	106%
Profit attributable to owners of parent	¥21.0 bn	135%	¥21.0 bn	100%

The bridge from the previous year’s operating profit of ¥61.4 bn to ¥60.6 bn shows installment finance revenue (comprehensive/individual) +11.8, financing revenue +10.4 and financial revenue +22.0 on the revenue side against other revenue ▲8.2, and financial expenses +22.2, bad debt related expenses +3.5 and other expenses +11.1 on the expense side (unit: bn JPY). Operating revenue rose YoY 107% (+¥36.1 bn) and operating expenses rose YoY 107% (+¥36.9 bn). The number of valid IDs reached 59.51 million, an increase of 3.79 million from the beginning of the term. The high-yield receivables balance was ¥788.1 bn (YoY 109%) domestically and ¥1,210.4 bn (YoY 118%) overseas; on a consolidated basis the high-yield receivables balance was 1,998.4bn (+248.8bn) and credit card transaction volume was 8,354.2bn (+4.5%). The consolidated operating profit margin was 10.7% (▲0.9pt), with domestic 5.6% (▲1.5pt) and overseas 17.4% (+0.0pt).

Segment Results

Domestic and overseas figures are stated after elimination of intersegment transactions in each business segment, and the consolidated figures include headquarters, functional companies and consolidated eliminations. As a reference, the presentation notes the impact on revenue due to securitization at ¥13.5bn (▲10.0bn compared to the same period of the previous FY).

Segment	Operating Revenue (Bn JPY)	YoY	Operating Profit (Bn JPY)	YoY	Operating Profit Ratio	Change
Domestic Total	331.6	106%	18.5	83%	5.6%	▲1.5pt
Retail	242.9	126%	5.1	49%	2.1%	▲3.3pt
Solutions	189.8	99%	13.5	138%	7.1%	+2.0pt
Overseas Total	240.4	108%	41.8	108%	17.4%	+0.0pt
China Area	35.9	101%	10.8	116%	30.1%	+4.0pt
Mekong Area	102.8	107%	16.0	100%	15.6%	▲1.1pt
Malay Area	101.7	112%	14.9	111%	14.7%	+0.0pt
Consolidated Total	569.3	107%	60.6	99%	10.7%	▲0.9pt

For the overseas business the company states that operating revenue reached record highs across all regions for the cumulative term, while in the fourth quarter profits increased in the Malay area but decreased in the China and Mekong areas due to increased bad debt-related expenses. Full-year bad debt-related expenses for the overseas business were 75.1 bn (YoY 109%), split into 8.1 bn (93%) in the China area, 35.5 bn (112%) in the Mekong area and 31.5 bn (110%) in the Malay area. Average exchange rates were HKD ¥19.25 (1.6% stronger yen), THB ¥4.62 (6.0% weaker yen) and MYR ¥35.88 (6.3% weaker yen). Domestically, the number of valid IDs was 39.25 million (YoY 109%, an increase of 3.09 million from the beginning of the term) and in-house payment transaction volume was 9,870.7 billion (YoY 103%).

FY2025 Domestic KPIs

The company reports that, excluding locations available to use AEON Pay, results fell short of the KPIs.

Domestic KPI	Goal for FY2025	Result	Rate
AEON Pay locations available for use	+1.00 million locations	+1.11 million locations	112%
In-house payment transaction volume	10tr (+0.5tr); Credit card: 8.0tr, E-money: 2.0tr	9.87tr; Credit card: 7.8tr, E-money: 2.0tr	99%
High-yield receivables balance	+55.0bn	+42.0bn	76%
Bank deposit balance	+500.0bn	+262.5bn	53%

FY2026 Forecast

For FY2026 the company forecasts revenue growth with a profit decline because of the renovation of the credit card system. Figures below are in bn yen unless stated.

Item	FY2025 Results (Consolidated)	FY2026 Forecast (Consolidated)	YoY	FY2026 Domestic	FY2026 Overseas	2030 Target
Operating Revenue	569.3	600.0	+30.7	355.0	245.0	780.0
Operating income	60.6	45.0	▲15.6	5.0	40.0	100.0
Operating Profit Margin	10.7%	7.5%	▲2.7pt	1.4%	16.3%	12.8%
Ordinary income	60.6	45.0	▲15.6	—	—	100.0
Net income	21.0	15.0	▲6.0	—	—	58.0
Dividend per share (Annual, yen)	53	53	±0	—	—	—
ROE	4.5%	3.2%	▲1.3pt	—	—	10.0%

Shareholder Returns

The company aims to maintain a dividend payout ratio of 30–40% and to balance investments for sustainable growth with shareholder returns, and anticipates cumulative shareholder returns of approximately 70 bn yen over the five-year period from 2026 to 2030. Dividend per share was 53 yen for FY2025 and the FY2026 forecast is also 53 yen (±0). The shareholder return slide shows five-year cumulative shareholder return amounts of 68.6 bn yen and 55.4 bn yen for the two preceding periods, against the estimate of approximately 70.0 bn yen for the coming period. The company notes that the return policy and dividend amounts are subject to change in the future depending on future business performance, financial conditions, investment plans, and changes in economic conditions.

Medium-Term Management Plan (FY2026–FY2030)

Reviewing the previous plan (FY2021–FY2025), the company states that operating revenue of 569.3 bn yen and operating profit of 60.6 bn yen both fell significantly short of targets, with an approximately 190.7 bn yen shortfall against the planned 760.0 bn yen of operating revenue and an approximately 39.4 bn yen shortfall against the planned 100.0 bn yen of operating profit. Cited reasons are insufficient response to customer needs and an entrenched high-cost structure in Japan, plus the limitations of the conventional growth model overseas. The company also recognises deficiencies in risk management and governance systems across the entire group following major incidents during the plan period.

The new plan sets out a vision for 2030 of “A Community-based global company that brings ‘Finance Closer to Everyone'”, built on three basic policies — Safety and Security First, Demonstrating Profitability, and Transition to High-Efficiency Management — and five key strategies: expansion of the customer base centered on AEON Pay; strengthening lending services by utilizing data and AI; establishment of a “Retail x Finance x Digital” business model in key Asian countries; domestic cost structure reform; and realization of robust corporate governance. FY2030 targets are operating revenue of 780.0 bn yen, operating profit of 100.0 bn yen, ROE of 10.0% and PBR of 1.0 times or more.

The five-year investment plan totals 250.0 bn yen of digital investment, comprising 110.0 bn yen domestic, 80.0 bn yen overseas and 60.0 bn yen of safety and security investment, with Malaysia, Vietnam and Cambodia designated as priority investment countries. Within this, aggressive investments totaling 45.0 bn yen over the next five years are planned for the AEON Pay customer base, which targets 60 million members by 2030 against 12 million existing members. Domestic cost structure reform targets cost savings of 6 bn yen per year in 2027 and 11 bn yen per year in 2030, with the personnel cost ratio moving from 16.9% to 14.5% and then 12.0%, and cumulative five-year cost structure reform of ▲36 bn yen. Selected KPIs for 2030 include AEON Pay active IDs of 6,000 (10,000 persons), outstanding balance of current deposits of 5.6 trillion yen, cashless transaction volume of 19.0 trillion yen, and high-yield individual receivables of 1,260.0 bn yen.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.