OMC Card, Inc.

　　　　 October 12, 2006October 12, 2006OMC Card, Inc.OMC Card, Inc.

OMC Card, Inc.

OMC Card, Inc.

P／L (Consolidated)Unit: billions of Yen

Mar-Aug, 2006Change vs.Mar-Aug, 2005(base:100%)

Change vs.Mar-Aug, 2005(amount)

Transaction volume 848.6 29.8 103.6%

Operating revenues

Operating expenses(excl. provision of

credit losses)

77.8 5.4 107.4%

60.0 3.9 107.0%42.6 2.2 105.4%

Operating income17.8 1.4 108.7%

Ordinary income 18.0 1.4 108.3%

Net income 10.9 1.4 115.3%

OMC Card, Inc.

Transaction volume (Consolidated)Unit: billions of Yen

Mar-Aug, 2006 % oftotal

Change vs.Mar-Aug, 2005(base:100%)

Change vs.Mar-Aug, 2005(amount)

Credit card contracts 463.1 54.6% 24.4 105.6%

Cash advances 255.6 30.1% 15.3 106.4%

Other 29.9 3.4% -4.9 86.0%

Loan agency 33.6 4.0% -13.1 72.0%

Acquiring service 60.0 7.1% 7.7 114.7%

TOTAL 848.6 100.0% 29.8 103.6%

Merchandise sales 6.3 0.8% 0.4 106.3%

OMC Card, Inc.

Operating revenues (Consolidated)Unit: billions of Yen

※　(　　) = amounts before securitization

※ ※

Mar-Aug, 2006 % oftotal

Change Vs Mar-Aug, 2005 (base:100%)

Change Vs Mar-Aug, 2005 (amount)

Credit card contracts※

13.0 (13.0) 16.7% 0.7 (0.5) 106.1% (103.8%)

※※Cash advances

※

57.4 (58.6) 73.7% 5.8 (6.0) 111.2% (111.4%)

TOTAL 77.8 100.0% 5.4 107.4%

Other 6.0 7.7% -1.0 85.5%

Loan agency 0.4 0.5% -0.2 71.2%

Insurance 1.0 1.3% 0.1 105.3%

Financial transactions0 0.0% -0 51.0%

OMC Card, Inc.

Operating expenses (Consolidated)Unit: billions of Yen

Selling expenses 12.9 1.0 108.2%Salaries and fringebenefits

General andadministrative expenses

8.6 0.7 109.2%

14.7 2.1 116.9%

Equipment expenses 1.0 ▲0.7 58.0%Provision of credit losses

Financial expenses

17.4 1.8 111.3%

5.3 ▲0.9 85.3%

TOTAL 60.0 3.9 107.0%42.6 2.2 105.4%(excl. provision for credit losses) )

Mar-Aug, 2006Change vs.Mar-Aug, 2005(base:100%)

Change vs.Mar-Aug, 2005(amount)

OMC Card, Inc.

4.1

0.1Extraordinary income

Provision for operating receivables （1.7）

（0.8）Losses on sales of fixed assets

（0.6）One-time payment on change of retirement system

（1.0）Other

Extraordinary losses

Extraordinary income & losses (Consolidated)Unit: billions of Yen

Aug, 2006

OMC Card, Inc.

Main indicators

Card user rate 65.0% ▲0.2% -

Affiliated stores 358 +5 101.5%

Applications 951 126 115.3%

Issuances 773 86 112.5%

Cardholder 8,463 683 108.8%

CD & ATM machines 132 ▲1 98.9%

Mar-Aug, 2006Change vs.Mar-Aug, 2005(base: 100%)

Change vs.Mar-Aug, 2005(amount)

Unit: in thousand

＊The calculation logic has been adjusted to the method most commonly used by the retail credit card companies.

◆◆ Achieved allAchieved all--time record high number of solicitationstime record high number of solicitations　　 through aggressive expansion of MSPthrough aggressive expansion of MSP--type solicitations type solicitations

OMC Card, Inc.

24%

19%

29%

0

100

200

300

400

500

Aug, 04 Aug, 05 Aug, 06

1.7%

2.2%

2.7%

0

20

40

60

80

100

Aug, 04 Aug, 05 Aug, 06

21%26%

38%

0

200

400

600

800

1,000

Aug, 04 Aug, 05 Aug, 06

YoY（99.3%） （127.8%） （123.0%）

YoY（92.7%）

（73.8%）

（93.5%）

（89.7%）

（84.7%）（86.5%）

（110.7%） （111.4%） （112.1%）

（112.5%） （104.2%） （108.0%）

（94.7%）（84.6%）

（83.4%）

Card Application

Transaction Volume of Credit Card Contract

Operating Revenues

Steady Expansion of Non-Daiei Channels

Steady Expansion of Steady Expansion of NonNon--Daiei ChannelsDaiei Channels

▲

Daiei channel

Daiei Share

Non-Daiei channel

Unit: in thousand Unit: ¥bn

Unit: ¥bn

Daiei channel

OMC Card, Inc.

4.5% 4.5%

3.7%3.2% 3.1%

3.9%

5.2%5.8%

6.7%

0.0%

2.0%

4.0%

6.0%

8.0%

Feb, 05 Feb, 06 Aug, 06

◆◆ Risk asset volume stable, continued conservative provisioningRisk asset volume stable, continued conservative provisioning

Credit Situation

Write-off rate

Reserve rate

Delinquency rate

OMC Card, Inc.

Unit: billions of Yen

Long-term debt 347.2 85.0% 336.5 80.2% ▲10.7

Short-termborrowings 61.1 15.0% 83.0 19.8% +21.9

TOTAL 408.3 100.0% 419.5 100.0% +11.2

Feb. 2006 % oftotal Aug. 2006 % of

totalVariation(amount)

Interest-bearing debt (Consolidated)

◆◆ Continued shift towards stable longContinued shift towards stable long--term funding term funding

OMC Card, Inc.

Main financial indicators

※ incl. Securitization

Feb. 2006 Aug. 2006 Change vs.Feb, 2006

Direct financing ratio 25.4% 23.8% ▲1.6%

Fixed-interestdebt ratio

60.8% 62.1% +1.3%

Long-termfinancing ratio

88.8% 84.9% ▲3.9%

OMC Card, Inc.

9.2%

12.2%13.2%

0.0%

5.0%

10.0%

15.0%

Feb, 2005 Feb, 2006 Aug, 20060

20

40

60

80

100

Stockholders’ Equity

Equity Ratio

Unit: ¥bnTrend of equity ratio

Financial position

◆◆ StockholdersStockholders’’ Equity Ratio steadily increased Equity Ratio steadily increased

OMC Card, Inc.

OMC Card, Inc.

Perception of the environment

【【Downside RiskDownside Risk】】

・Revision of industry laws

Platform

Solicitation capability

Processing

Marketing 【【Turn UpTurn Up】】

◆◆Using our strengths to turn change to our advantage Using our strengths to turn change to our advantage

・Demands for excess interest repayments

・End of zero interest rates

Marketing capability

Risk management capability

Processing capability

OMC Card, Inc.

【New office】

・Efficient allocation of management resources ・Enhanced execution capability

Enhanced productivity and brand power

Reformed corporate cultureReformed corporate culture

【New operational structure】

－Reform of management structure －

－Revitalised spirit, slimmer organization －

・Decisions on management strategy ・Supervision and Direction of Executive Officers

♦♦Rapid and flexible management structure put in placeRapid and flexible management structure put in place

Corporate governance strengthened to deal with changes in environment, intensified competition

- Clear division between management and execution

Shareholders

Chairman & CEO

President & COO

Corporate &Financial

Planning Div.

AdministrativeManagement

Div.

Business & SalesDiv.

CustomerServices &

Operations Div.

Business ProcessOutsourcing

Promotion Div.

OMC Card, Inc.

Market risks　・Lower profitability　・Market shrinkage

Going ConcernGoing Concern

◆Increase business volumes

◆ Strategies to encourage card usage

◆ Third-party card processing business

AGENDAAGENDA

Maximise efficiencies

Higher volumes

♦♦Business model to maintain growth at 20% interest ratesBusiness model to maintain growth at 20% interest rates

[Adapting to changes in environment]

Maintain / expand profit levels

OMC Card, Inc.

Increase business volumes

OMC Card, Inc.

Strategies to increase cardholder numbers

Customers

Affiliated stores

Overwhelming solicitation capability

DM (analysis) capability

Promotions capability

CRM alliances achieve Win-win-win results

(1) Launch co-branded cards

♦♦““MSP alliance modelMSP alliance model”” rooted in CVC conceptrooted in CVC concept

・Gain stable high-quality customers・Expand sales・Propose and implement ideal sales strategies

・Wants and needs satisfied・ Enhanced convenience

Offering of CRM cycleTools for communicating with customers

・Acquire new cardholders・Increase transaction volume

OMC Card, Inc.

2.5

9.2

2.4

12.2

1

3

5

7

9

11

13

15

1Q_05 2Q_05 3Q_05 4Q_05 1Q_06 2Q_06

HIMARAYA Card

MrMax Card

[Main MSP co-branded card results]

※ Indexed to 1 at Q1 05

◆◆Making OMC a widelyMaking OMC a widely--used used ““Main CardMain Card””

Increased cardholder nos. x increased usage = steady growth in transaction volumes

No. of solicitations this term: 123,000 (+57% yoy)No. of cardholders at term-end: 314,000 (+107,000 yoy)First day usage rate: 65.4%First 90-day usage rate: 71.3%

No. of solicitations this term: 128,000 (+46% yoy)No. of cardholders at term-end: 303,000 (+110,000 yoy)First day usage rate: 81.3%First 90-day usage rate: 86.2%

Growth in cardholder usage by channel (HIMARAYA, MrMax)

Blue line: HIMARAYA,Orange line: MrMax(Dotted lines: use at alliance partners / Solid lines: other usage)

OMC Card, Inc.

◆◆Developing strategies to maintain/expand cardholder nos., Developing strategies to maintain/expand cardholder nos., starting in regions withdrawn from by Daieistarting in regions withdrawn from by Daiei

(2) Regional strategy

「「egaoegao CardCard」」 from Jul, 06「「MARUHON MARUHON 　　COWBOY CardCOWBOY Card」」 from Jul, 06

Steadily forging new alliancesSteadily forging new alliancesRegions withdrawn from by Daiei

New releases planned

「「Sun Plaza CardSun Plaza Card」」 from Sept, 06

「「FRESTA FRESTA Smile Credit CardSmile Credit Card 」」 from Oct, 06

Alliances under negotiation

Region No. of stores

Hokkaido & Tohoku 7Kanto 9Chubu 6Kinki 12Chugoku & Shikoku 9Kyushu 10Total 53

FY05 Daiei store closures

FY05Share of solicitations, card shopping :c. 2%

「「JOWJOW--PLA CardPLA Card」」 from May,06

OMC Card, Inc.

♦Increase in new customers♦Expansion in profits from

new business♦Move into credit business

♦Increase in new customers♦Expansion of finance business♦Improved services to

cardholders etc.

Functions offeredExpansion in finance business

Development of new products & servicesIncrease in new customers

Development of new products & servicesExpansion in business profits

Credit / loan guarantee functions New types of loans, Co-branded cards

Enhancing Web-site, Mobile application Cards business

Debit cards

Account-holder confirmation, instant payments

24-hour fund transfers

Internet financial institutions

Building out financial businesses

◆◆Forming alliances with internet financial institutionsForming alliances with internet financial institutions

Functions offered

OMC Card, Inc.

Strategies to encourage card usage

OMC Card, Inc.

CS CC Insurance CVC Daiei MSP Postal savings

Products Customer affiliations

Customer

Customer

Customer

【Total Marketing 】【Products Marketing】

【Dグループ】【Cグループ】

【Bグループ】【Aグループ】

Aiming to produce a new approach to card-holders

Portfolio ManagementPortfolio Management

Building model which maximizes cardholder value

◆◆ Strategic systematization of customer management methodsStrategic systematization of customer management methods

OMC Card, Inc.

[ETC Card] Highly rated for overwhelming solicitation power

[Utility payments] Working steadily to make it customers’ “main card”

On-site issuance

One-stop service

Core competence

On-site card issuance

Simultaneous card-reader installation

Card solicitation

＋

Unique

Expansion in registered bill payments

◆◆Increasing volumes by locking in regular usageIncreasing volumes by locking in regular usage

0

10

20

30

40

50

1H_05 2H_05 1H_06

OtherUtility bills

Telecoms

Registered payment transaction volumes

Developed proactive approach Developed proactive approach aimed at growth marketsaimed at growth markets

Unit: ¥bn

◆Metropolitan Expressway AssociationIssued co-branded “SHUTOKO Card”“

◆West Nippon Expressway Co. Ltd.Selected us as partner to promote spread of ETC

◆Central Nippon Expressway Co. Ltd.Acquired right to offer one-stop solicitations

No. of cardholders at end-Aug 06570,000 (*including SHUTOKO Card)

% registered for utility payments:

　　　　 　 11%Spend per shopping transactionof registered vs. non-registered

cardholders:

（Cardholder performance ）（Areas covered ）

•5 electric power companies•3 gas companies•NHK•Telecom companies

3X

OMC Card, Inc.

Card-based Membership Business(1) Steady growth

◆◆ Aiming to be a partner to cardholders throughout their livesAiming to be a partner to cardholders throughout their lives

AllianceAlliancePartnersPartners

＜Products & Services CVC ＞

＜Financial CVC ＞

OMCCard

Member

OMCCard

Member

CVCビジネスモデル

Life stage

Partner cos. at end-Aug 06234 cos.

CVC business model

Student

Findingjob

MarriageFamily

Matureyears

Silver

Offer “lifetime value” in responseto cardmember needs

・Car-related　　　　　　 ・Education　 ・Health-related・Fashion/beauty　　 ・Housing・Shopping/dining　 ・Telecoms

Expanded to 4 partner companies

5 shops now open

・Securities brokerage business・Insurance agency

Develop walk-in insurance shops

（¥bn）

6.9

10.010.9

23.4

0

5

10

15

20

25

8/03 8/04 8/05 8/06

CVC transaction volume

+114.5% yoy

OMC Card, Inc.

(2) Developing new areas◆◆ Steady growth in financial CVCSteady growth in financial CVC

2.3

1

2

3

4

5

6

7

8

Feb, 06 Aug, 06 Feb, 07（target）

Up 7x

※ Indexed to 1 at end-Feb 06

Growth in assets in custody

Started business partnership with Daiwa Securities Co. Ltd.

05/88/05

06/77/06

10/06～

[Securities brokerage (started Aug 05)]

Now 4 partner companies

Nikko Cordial Securities Inc.

NETWING Securities Co., Ltd.

ACE Securities Co., Ltd.

Daiwa Securities Co. Ltd.

OMC Card, Inc.

-4.4%

+5.0%

+0.7%

-10.0%

-5.0%

0.0%

+5.0%

+10.0%

1Q/05 2Q/05 3Q/05 4Q/05 1Q/06 2Q/06

Credit card for revolving payments only

Announcement “It’s easy with everything revolving”

Enhanced menu NewNew

Aiming for large increase in revolving credit balances

Select payment method by transaction

Fix payment amount after receiving bill

＋＋

＋＋

※Both services introduced in pilot version in Aug 06 ⇒ full introduction Mar 07

　　

・Enhanced customer convenience•Reduced resistance to revolving credit etc…

Step.1 　　Specify payment method

Step.3 　　Change after use

Step.2 　　Use pre-registration

It’s easy with revolving

Strengthening product & service capabilities(1) Expansion in shopping-related revolving credit balance

◆◆ Pursuing potential business by offering more payment methods Pursuing potential business by offering more payment methods

Yoy growth in average CSRV balance

“Decide later” plan

OMC Card, Inc.

0

50

100

150

Feb,05 Aug,05 Feb,06 Aug,06

[Thousands]

Concept: Stylish and leadingConcept: Stylish and leading--edgeedge

End-Aug 06

120,000

＜Function ＞

Minimum payment

＜Associated image ＞

Making it our new flagship card

Collaboration with 10 popular artists

Profitability

First limited-edition artist card

(2) Strengthening strategic branded card “Jiyu!da!”◆◆ Aiming to create new corporate image Aiming to create new corporate image

No. of Jiyu!da! cardholders Share of shopping-related revolving credit: c. 3%

OMC Card, Inc.

[Thousands]

Concept: Stylish and leadingConcept: Stylish and leading--edgeedge

＜Function ＞Minimum payment

＜Associated image ＞

Making it our new flagship card

Collaboration with Collaboration with the artist & novelist,the artist & novelist,

Mr. Lily Mr. Lily FrankyFranky

Profitability

Second limited-edition artist card

(2) Strengthening strategic branded card “Jiyu!da!”◆◆ Aiming to create new corporate image Aiming to create new corporate image

No. of Jiyu!da! cardholdersShare of shopping-related revolving credit: c. 3%

Jiyu!da!カード会員数推移

0

60

120

180

Feb,05 Aug,05 Feb,06 Aug,06 Feb,07

+

・Real-time remittances and withdrawals

・Point usability・Interest rate flexibility

End-Feb 07

140,000

Strengthening functions this term

No. of Jiyu!da! cardholders

OMC Card, Inc.

UsabilityUsabilityConvenience of repayments

Flexible PricingFlexible PricingPricing precisely matched to customer riskPricing precisely matched to customer risk

AgilityAgilityImmediate credit check On-site issuanceImmediate transfers

(3) Timely approach focused on speed

♦♦All interest rate needs met by one cardAll interest rate needs met by one card

FY06 New accounts with balances

150,000

OMC Card, Inc.

(4) Moving into new types of loan product

◆◆ Aiming to develop new customer bases by moving into new productsAiming to develop new customer bases by moving into new products

Release: Sept 06Interest rate range: 8%-25%Credit limits: ¥200,000-¥3mnTarget: Low-medium risk bracket

[“For Life DX” Card]

Targets for this termAccounts gained: 10,000End-term balance: ¥3bn

Market potential

Potential customers

Sleepers

Accounts with

balances

OMC Card, Inc.

Third-party card processing business

OMC Card, Inc.

ABPS 2+ABPS 2+

Primary servicer rating 　

Processing quality

◆◆ High processing qualityHigh processing quality

OMC Card, Inc.

Marketing Solutions

Marketing Solutions

Business platform

Business platform

Risk management infrastructure

Risk management infrastructure

◆◆ Using our highly flexible processing infrastructureUsing our highly flexible processing infrastructure

“DEAR”Core credit system

Initial credit checking・Minimum 5 minutes,

maximum of 20,000/day

Credit monitoring & control・Credit extended to maximize customer

profits・Management of card / store fraud

Collection・Automated legal recovery process

Automatic verification & 　evaluation system・Built test marketing system

Marketing tools・Achieved “one-to-one” marketing　-Personal messages–

Campaigns system・Advanced initiatives

(joint development with JSIP)

Leading 　company Leading

　company

Processing quality

Processing quality

OMC Card, Inc.

MCS Loan Management

and Recovery‘

途上与信管理Credit

monitoring債権回収Collection

In-sourcing of on-site issuance function

‘

from Nov 03

会員管理Cardholder

administration

Major shoppingcenters

Major department stores

審査Assessment

♦♦Aiming to inAiming to in--source processing businesssource processing business

from Oct 06

from Sept 03 IY Card Service

from Mar ‘06

Call centre function

Credit monitoringfunction

Back-up servicing functions

OMC’s platform

124 companies outsourcing to us as at end-Aug 2006

MARUI

OMC Card, Inc.

Aiming to build third force

♦♦Need for an alliance of retailNeed for an alliance of retail--related cardsrelated cards

Assembling a third forceAssembling a third force

International brands

Bank-affiliated

Customer-first philosophy・Concept grounded in retail・Lifetime partner・One-to-one approach

Sanyo ShinpanFinance

OMC Card, Inc.

OMC Card, Inc.

Main operating indicators

8,600,000 Cardholders

1,800,000 New Applications

Year-end Target:

Annual Target:

OMC Card, Inc.

Unit: billions of Yen

Feb. 2007forecast

Change vs.Feb. 2006(base:100%)

Change vs.Feb. 2006(amount)

1,664.0 33.2 102.0%

156.5 10.5 107.2%

40.0 4.4 112.4%

21.0 2.6 114.4%

Transaction volume

Operating revenues

Ordinary income

Net income

P/L target for February 2007

OMC Card, Inc.

12.2％

30.0％

24.4％

3.2％

14.2％

28.2％

25.6％

3.7％ROA

ROE

Stockholders’equity ratio

Ordinary income per operating revenue

Feb. 2006results

Feb. 2007forecast

Main indicators for February 2007