International Card. Ed Gilligan, Group President, Global Corporate Services and International Payments. August 4, 2004

Transcription

1 International Card Ed Gilligan, Group President, Global Corporate Services and International Payments August 4, 2004

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4 Key Characteristics of our International Business Significant Scale and Flexibility Platform for Innovation Strong Opportunity for Continued Growth

5 International Card 4 Questions to Be Answered Today What is the scope of our International Business? Who is our competition? What is our card strategy? What are our growth prospects?

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8 2003 Facts Total International 36K Employees 24.1MM CIF $90.1B Billings $16.2B AEB AUM* $84.7B Threadneedle AUM** * Managed and administered ** Threadneedle Assets as of 9/30/03.

9 June YTD International Growth Cards in Force Billed Business Loans 10% 25% 6% Note: YTD June Reported rates

10 International Card 4 Questions to Be Answered Today What is the scope of our International Business? Who is our competition? What is our card strategy? What are our growth prospects?

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14 International Card 4 Questions to Be Answered Today What is the scope of our International Business? Who is our competition? What is our card strategy? What are our growth prospects?

15 International Facts Top 25% Cardmembers average US$18K / year in spending Largest Consumer account: US$5MM* Largest Corporate account: US$800MM* 337MM transactions = 77K per hour or 21 per second** 6.6 customer interactions per second** *12 months spend. ** Year to date June 04.

16 AXP Spend Model Investments in Premium Value Premium Economics Attractive Customer Base High Average Spending Customer Experience

17 Average Spend by Market Germany 2003 Japan 2002 Mexico 2003 VISA / MC AXP Note: Includes consumer and commercial. Source: SOURCE Informationsdienst for Germany, Japan Consumer Credit for Japan, Euromonitor for Mexico.

18 Average Spend by Competitor 2003 UK Brazil Lloyds Barclays RBS AXP Bradesco Itau Credicard AXP Note: Includes consumer and commercial. Source: Euromonitor for UK, Austin Asis and Company reports for Brazil.

19 Unique Business Model Customer Focused Approach Closed Loop Global Approach

20 Customer Focused Approach Acquire Customers Deepen Relationships Broaden Relationships Areas of Focus Premium product development Segmented acquisition Channel expansion Segmented servicing & loyalty satisfaction Membership rewards Travel Insurance Personal lending Retail financial services Deliver Superior Customer Experience

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23 Importance of Partners Acquire New Cards Acquired Partnerships 32% Air 37% Non-Air 63% Note: May YTD 2004.

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27 Bank Distribution Partnerships Acquire Consumer Société Général France Banco Santander Spain Shinsei Bank Japan Carta Si Italy Capitalia Italy AMP Australia Bank Boston Argentina Commercial Toronto Dominion Bank Canada Swedbank Sweden Deutsche Bank Germany

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29 Results Australia Acquire CAGR Cards in Force Billed Business Loans Revenue 14% 12% 40% 16% Note: At local currency.

30 Spend-Based Incentives High Spending Customers Deepen % of Accounts % Billed Business Other 13% Other 10% Co-Brand Partnerships 24% Membership Rewards 63% Co-Brand Partnerships 20% Membership Rewards 70% Note: Percentage of accounts as of June 30, Billed business 12 months ending June 30, 2004.

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33 International Membership Rewards Metrics International Membership Rewards Enrollees,, Deepen Spend per Account Voluntary Attrition Collection Attrition 4X 40% lower 20% lower Operating Margin / Card 3.4X 1 Based on accounts with Membership Rewards compared to non-mr, non Co-Brand in top 7 AXP consumer card markets.

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35 Unique Business Model Customer Focused Approach Closed Loop Global Approach

36 Closed Loop Increase Amex share of spending Generate more insistence Merchant Acceptance Create better value propositions Cardmember Demand Acquire more high spend customers Capture more of their spending Get more merchants, higher discount rate Earn more profit per customer Sell them more goods and services Capture more revolving balances

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39 Unique Business Model Customer Focused Approach Closed Loop Global Approach

40 Unique Business Model Customer Focused Approach Closed Loop Global Approach

41 Global Approach Flexibility Risk Management Servicing Platforms Global Marketing

42 Flexibility Investment Optimization Bankruptcy Rates 2002 Investment Decisions 2002 NI Impact Hong Kong Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Europe Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

43 Risk Management Net Loss Provision as % Billed Business 1.1% 0.9% 0.7% 0.5% Q1 Q2 Q3 Q Note: International Consumer & SBS business

44 Customer Service International Stockholm Toronto Brighton Paris Madrid Wilhelmshaven Amsterdam Rome Tokyo Mexico City Uberlandia India Kuala Lumpur Taiwan Hong Kong Bangkok Manila Jakarta Singapore Buenos Aires Sydney

45 Marketing Product Development Partnerships Membership Rewards/Loyalty Capabilities to: Innovate Roll-out out rapidly Tailor locally Exploit scale Information Management

46 International Card 4 Questions to Be Answered Today What is the scope of our International Business? Who is our competition? What is our card strategy? What are our growth prospects?

47 Consumer Spend Growth $9.4T 12% 88% $12.6T 18% 82% $15.3T 25% 75% E 2007E General Purpose Plastic Cash, Check & Other Note: Based on 19 international markets. Source: Global Insights.

48 Share of Affluent Households 30% 25% 20% 15% 10% 5% 0% UK Italy Germany Canada Australia F Note: Annual Household Income >US$ 75K. Source: Economist Intelligence Unit, 2004.

49 Recent Performance Commercial Card Global Billed Business Revenue 18% 17% International Billed Business Revenue 26% 21% Note: June YTD 2004 vs. June YTD 2003 at reported rates.

50 Recent Performance International Consumer Card Cards in Force 5% New Cards Acquired Billed Business Attrition Revenue 12% 24% (54bp) 16% Note: June YTD 2004 vs. June YTD 2003 at reported rates.

51 Growth Opportunities Penetrate Plastic Spending Grow Share Coverage Channels Rewards Expand Plastic Spending Grow Market New Segments New Industries

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