Daiwabo Holdings Co., Ltd. · TSE:3107
Daiwabo — FY2020 Earnings Presentation
59 slides from Daiwabo's earnings presentation, May 22, 2020
Slide 1: Fiscal Year Ended March 2020 Materials for Financial Results Briefing
Fiscal Year Ended March 2020 Materials for Financial Results Briefing May 22, 2020 (Stock code: 3107) https://www.daiwabo-holdings.com/
Slide 2: Flow of Explanation
Flow of Explanation This document is for the financial results briefing that was scheduled to be held on May 22, 2020. Owing to the spread of COVID-19 infections and the state of emergency declared by the government, we decided to cancel the financial results briefing in consideration of the health
Slide 3: Settlement of Accounts for the Fiscal Year Ended March 2020
Settlement of Accounts for the Fiscal Year Ended March 2020 ©2020 Daiwabo Holdings Co., Ltd. 2
Slide 4: Consolidated Results Highlights
Consolidated Results Highlights Fiscal year ended March 2020 (April 1, 2019 - March 31, 2020) The sales and profits of IT Infrastructure Distribution Business increased greatly and we achieved record-high consolidated results We are reaching the peak of PC replacement demand in association with the
Slide 5: Sales Trend
Sales Trend First half 944,053 Second half Sales growth 785,554 20.2% Record high results for 669,596 17.3% three consecutive terms 472,032 + 20.2% compared to the 8.4% 432,880 356,778 previous term 1st half + 33.8% / 2nd half + 9.0% 472,021 312,817 352,674 (Million yen) 2018/3 2019/3 2020/3 ©2020 D
Slide 6: Operating Profit Trend
Operating Profit Trend First half 32,841 Second half 3.5% Record high results for 22,709 four consecutive terms + 44.6% compared to the 17,022 2.9% 14,305 previous term 14,362 2.1% 1st half + 89.5% / 2nd half + 18.5% 8,974 15,818 Improvement of 0.6% in 8,347 operating profit margin 5,330 (Million ye
Slide 7: Consolidated Operating Results for the Fiscal Year Ended March 2020
Consolidated Operating Results for the Fiscal Year Ended March 2020 Compared Full-term plan Compared 2019/3 2020/3 Change to previous (Adjusted to plan (Million yen) term February 7) Net sales 785,554 944,053 +158,499 +20.2% 943,700 +0.0% Operating profit 22,709 32,841 +10,131 +44.6% 31,300 +4.9% Or
Slide 8: Consolidated Financial Position and Cash Flow for the Year Ended March 2020
Consolidated Financial Position and Cash Flow for the Year Ended March 2020 (Million yen) 2019/3 2020/3 Change Major reasons for change Total assets 335,888 328,813 (7,075) Decrease in trade receivables, etc. Net assets 87,191 104,741 +17,549 Increase in retained earnings Capital adequacy 25.7% 31.6
Slide 9: Operating Results by Segment for the Fiscal Year Ended March 2020
Operating Results by Segment for the Fiscal Year Ended March 2020 Compared to 2019/3 2020/3 Change (Million yen) previous term IT Infrastructure Distribution 693,957 857,008 +163,051 +23.5% Fibers 75,088 71,670 (3,417) (4.6%) Net sales Industrial Machinery 13,900 12,988 (911) (6.6%) Others 2,608 2,3
Slide 10: Segment Mix
Segment Mix Industrial Machinery Industrial Machinery 1.4% 2.3% Fibers 7.6% Fibers 11.4% Net sales Operating Percentage profit Percentage IT Infrastructure Distribution IT Infrastructure Distribution 90.8% 85.7% 2019/3 2020/3 2019/3 2020/3 IT Infrastructure IT Infrastructure Distribution 88.3% 90.8%
Slide 11: IT Infrastructure Distribution Business
IT Infrastructure Distribution Business (Million yen) Net sales 857,008 million yen (+23.5% compared to previous term) Operating profit 28,161 million yen (+61.7% compared to previous term) 857,008 Number of PCs shipped 3.995 million units (+53.4% compared to previous term) 693,957 Number of servers
Slide 12: Trend in Domestic PC Market Share
Trend in Domestic PC Market Share One in three PCs used by corporations has ties to us 3,995 Market share expansion for 5 consecutive terms +53.4% 2020/1/14 End of 2,928 Windows 7 +30.1% support (29.1%) 2,604 2014/4/8 +31.1% 2,251 End of Windows 33.6% 2,020 2,076 XP support 1,986 1,889 1,789 28.3% 2
Slide 13: Fiber Business
Fiber Business (Million yen) Net sales 71,670 million yen (-4.6% compared to previous term) Operating profit 3,737 million yen (-7.0% compared to previous term) 75,088 71,670 In a difficult market environment affected by a decline in overall demand, although orders for sterilization-related products
Slide 14: Industrial Machinery Business
Industrial Machinery Business (Million yen) Net sales 12,988 million yen (-6.6% compared to previous term) Operating profit 753 million yen (-29.4% compared to previous term) 13,900 12,988 Customers tend to make prudent decisions on capital investment with the impact of trade friction between the Un
Slide 15: Consolidated Balance Sheet for the Fiscal Year Ended March 2020 (Assets)
Consolidated Balance Sheet for the Fiscal Year Ended March 2020 (Summary of Accounts P5) Major reasons for 2019/3 2020/3 Change (Million yen) change < Assets > Current assets 280,347 276,285 (4,061) Cash and deposits 24,246 31,600 +7,353 Decrease in association with lower 4Q Notes and accounts recei
Slide 16: Consolidated Balance Sheet for the Fiscal Year Ended March 2020 (Liabilities)
Consolidated Balance Sheet for the Fiscal Year Ended March 2020 (Summary of Accounts P6) Major reasons for 2019/3 2020/3 Change (Million yen) change < Liabilities and net assets > Current liabilities 217,720 192,514 (25,206) Decrease due to a difference in Notes payable and accounts settlement under
Slide 17: Consolidated Income Statement for the Fiscal Year Ended March 2020
Consolidated Income Statement for the Fiscal Year Ended March 2020 (Summary of Accounts P7) Compared 2019/3 2020/3 Change to previous (Million yen) term Results Percentage Results Percentage Net sales 785,554 944,053 +158,499 +20.2% Gross profit 67,811 8.6% 81,476 8.6% Selling, general and administr
Slide 18: Business Outlook for the Fiscal Year Ending March 2021
Business Outlook for the Fiscal Year Ending March 2021 ©2020 Daiwabo Holdings Co., Ltd. 17
Slide 19: Business Outlook for the Fiscal Year Ending March 2021
Business Outlook for the Fiscal Year Ending March 2021 Because it is difficult to estimate the impacts due to COVID-19 infections rationally, our results forecast for the fiscal year ending March 2021 remains undetermined as of the present time. From now on, we will ascertain the impacts on resu
Slide 20: Approach to Income Distribution Based on the External Environment
Approach to Income Distribution Based on the External Environment Based on the uncertain external environment, we recognize the need to secure internal reserves from the following perspectives ➤ Retained earnings will be used for investments in new growth strategies such as strengthening systems t
Slide 21: Phase III of the Medium-Term Management Plan, Innovation 21
Phase III of the Medium-Term Management Plan, “Innovation 21” • A wide range of social contribution management centered on IT infrastructure distribution • Active business development that uses a revenue basis • A period to challenge new business creation FY ended March 2019 - FY ending March 2021 P
Slide 22: Progress on the Medium-Term Management Plan
Progress on the Medium-Term Management Plan (Million yen) Innovation 21 Phase II (Results) Innovation 21 Phase III ■Net sales ■Operating profit 944,053 785,554 (Original plan) 686,700 (Original plan) (Original plan) 720,000 730,000 669,596 617,811 578,506 32,841 22,709 14,305 12,626 9,912 (Original
Slide 23: Priority Measures for the Fiscal Year Ending March 2021
Priority Measures for the Fiscal Year Ending March 2021 ©2020 Daiwabo Holdings Co., Ltd. 22
Slide 24: Priority Measures by Segment
Priority Measures by Segment Expansion of sales of PCs, tablets, smartphones, etc., as priority products, promote the renewal of existing old OS devices and capture ICT demand including mobile environments in association with the expansion of telework demand Corporate Market Contributions to the
Slide 25: Priority Measures by Segment
Priority Measures by Segment Increased production of raw cotton and nonwoven fabrics in the sterilization and sanitary materials sectors and increased operating rates at our plants in response to demand related to measures against infectious diseases Synthetic Fibers and New proposals and expans
Slide 26: Efforts Towards Acceleration of the GIGA School Concept
Efforts Towards Acceleration of the GIGA School Concept • One terminal per student and the establishment of high-speed, large-capacity communications The GIGA School networks concept • Sustainable realization of fair and individually-optimized learning at schools nationwide National 1. Establishment
Slide 27: Efforts Towards Acceleration of the GIGA School Concept
Efforts Towards Acceleration of the GIGA School Concept Promotion of new learning based on use of ICT Wireless LAN Programming installation in education schools (Mandatory at elementary schools from FY2020) Improvement Provision of one Installation of of all teachers’ Use of digital electronic textb
Slide 28: Efforts Towards Acceleration of the GIGA School Concept
Efforts Towards Acceleration of the GIGA School Concept School Innovation seminars DIS School Innovation Project • Holding of simulated seminars in all areas nationwide enabling experience of learning styles FY2013-2014 using ICT in ordinary classrooms Implementation of empirical research on the use
Slide 29: Efforts Aimed at the Diffusion and Expansion of Telework
Efforts Aimed at the Diffusion and Expansion of Telework Promotion of the introduction of telework through subsidies is active 19.0% Introduction of telework is essential The rate of introduction at companies with less than 300 workers is 14.5% 2018 → Expand subsidized projects aimed at small to Sta
Slide 30: Efforts Aimed at the Diffusion and Expansion of Telework
Efforts Aimed at the Diffusion and Expansion of Telework The 3 points for realizing telework 3 issues for the establishment of a telework ICT environment • Culture that recognizes Employee diversity awareness • Culture of mutual respect and acceptance Secure and simple network System that can System
Slide 31: Efforts Aimed at the Diffusion and Expansion of Telework
Efforts Aimed at the Diffusion and Expansion of Telework Smart telework package A package combining a set of the mobile PC and systems required to trial telework Provided preconfigured for immediate use PC Video conference Attendance Telework insurance system management system Select a model Select
Slide 32: Diffusion and Expansion of Subscriptions Based on iKAZUCHI
Diffusion and Expansion of Subscriptions Based on iKAZUCHI iKAZUCHI is a subscription management portal for sales partners By managing and operating Diversification of services on a subscription basis Subscription-oriented approach that Evolution by combination (continuous billing system), balances
Slide 33: Diffusion and Expansion of Subscriptions Based on iKAZUCHI
Diffusion and Expansion of Subscriptions Based on iKAZUCHI Connecting the iKAZUCHI API to each manufacturer’s system Reduction of operational load and accurate management/operation API API Vendors Dealers Customers < As of April 2020 > About 40 companies Apply Latest information on services provided
Slide 34: Diffusion and Expansion of Subscriptions Based on iKAZUCHI
Diffusion and Expansion of Subscriptions Based on iKAZUCHI iKAZUCHI continues evolving 2019.6 Started a new payment collection service iKAZUCHI Payment Collection Expansion of the subscription business → Improvement of dealers’ operation rates → Strengthening of proposals to meet the needs FY2020 co
Slide 35: IT Infrastructure Distribution Business Growth Strategy
IT Infrastructure Distribution Business Growth Strategy 1,000,000 Recover quickly from a downturn in demand and draw a sustainable growth curve 900,000 End of Windows 7 New area [Positive factors] support ■ GIGA School concept ■ Telework, work style reform, DX 800,000 [Negative factors] IT services
Slide 36: [References] Corporate profile
[References] Corporate profile ©2020 Daiwabo Holdings Co., Ltd. 35
Slide 37: Daiwabo Group
Daiwabo Group Formulation of group strategy, optimal allocation of group management resources Daiwabo Holdings Co., Ltd. and supervision of group business execution IT Infrastructure DAIWABO INFORMATION SYSTEM CO., LTD. Distribution Business DIS Service & Support Co., Ltd. DIS Solution Co., Ltd. Fib
Slide 38: History of the Group
History of the Group 1941. 4 Daiwabo was formed by the merger of four companies: Daiwabo Kinka Boseki, Hinode Boshoku, Izumo Seishoku, and Wakayama Boshoku. 1949. 5 ▶ Daiwabo got listed on the first section of the Tokyo Stock Exchange Fiber Business 1949. 7 Daiwabo spun off its Shinji Plant and esta
Slide 39: Daiwabo Holdings Co., Ltd.
Daiwabo Holdings Co., Ltd. Head Office 6-8, Kyutaromachi 3-chome, Chuo-ku, Osaka, 541-0056 Established April 1, 1941 Consolidated 5,654 (As of March 31, 2020) employees Capital ¥21,696,744,900 Stock Listed on the First Section of the Tokyo Stock Exchange Securities Code 3107 / exchange listing Busin
Slide 40: Overview of Major Business Segments
Overview of Major Business Segments Percentage of Percentage of Sales Operating Profit IT Japan's largest distributor of IT-related products It has a large network of business partners through sales activities at 93 locations Infrastructure nationwide with strong ties to local communities 90.8% 85.7
Slide 41: Fiber Business - Product Examples
Fiber Business - Product Examples - Synthetic fibers Spun lace non- woven fabrics Synthetic fibers used in hygiene products such as paper diapers and feminine hygiene items and rayon Non-woven fabrics (a sheet of intertwined fibers made by special methods such as water or needles without weaving
Slide 42: Industrial Machinery Business - Product Examples
Industrial Machinery Business - Product Examples - Vertical lathes/ No. 1 share in Japan for both medium- and large-sized lathes (Cumulative shipments exceeded 7,000 units) Turning centers Highly evaluated as "OM for vertical lathes" in Japan and overseas A machine that is used to cut a workpi
Slide 43: [References] Introduction to IT Infrastructure Distribution Business
[References] Introduction to IT Infrastructure Distribution Business ©2020 Daiwabo Holdings Co., Ltd. 42
Slide 44: IT Infrastructure Distribution Business - Business Structure
IT Infrastructure Distribution Business - Business Structure - Vendors Dealers Customers Sales management system 1,200 vendors 19,000 dealers 2.1 million product Corporations A network of sales with 93 offices nationwide items handled Trading companies Partner support capabilities Government Service
Slide 45: IT Infrastructure Distribution Business - Three Strengths
IT Infrastructure Distribution Business - Three Strengths - Multi-vendor Dealers A sales organization They can have products, services and information of various that has built strong 1,200 vendors vendors and offer them in the best mix ties to local 2.1 million product From an extensive invento
Slide 46: IT Infrastructure Distribution Business - Origin and History
IT Infrastructure Distribution Business - Origin and History - 1998 Started the operation of DIS-NET 1982 Founded DIS • It started full-scale operation of the sales management 2020/3 • DIS started with only 10 staff by leveraging the knowhow system, "DIS-NET", to further strengthen the instant Excee
Slide 47: IT Infrastructure Distribution Business - Streamlining of Distribution Center
IT Infrastructure Distribution Business - Streamlining of Distribution Center - Kanto Central Center Kansai Center (Kobe City) (Yoshimi-machi, Saitama Prefecture) Full-scale operation in May 2020 Full-scale operation in June 2016 Robot storage system → Optimization of work efficiency and space [Numb
Slide 48: IT Infrastructure Distribution Business - DIS-NET = Engine for Growth
IT Infrastructure Distribution Business - DIS-NET = Engine for Growth - (Results of the IT Infrastructure Distribution Business) Thorough implementation of low- cost operation through active 7.5% 7.6% investment in internal systems Operating 7.3% income margin 7.0% 0.7% Core system, "DIS-NET" 6.8% 1
Slide 49: IT Infrastructure Distribution Business - Web Order Placement System
IT Infrastructure Distribution Business - Web Order Placement System - Vendors Dealers Customers Products/Service packages, etc. Subscription Products/Service packages One of the largest B2B comprehensive sales support sites in the IT industry iDATEN It offers product search, quotation, order placem
Slide 50: IT Infrastructure Distribution Business - Topics
IT Infrastructure Distribution Business - Topics - Concluded a distributor agreement for Mist Systems products and started supplying AI-driven wireless LAN systems through a 2020.05.12 nationwide sales network Provided an HYCU backup service free of charge until June 30 and supported Japanese compan
Slide 51: [References] Charts for Performance Trend
[References] Charts for Performance Trend ©2020 Daiwabo Holdings Co., Ltd. 50
Slide 52: Consolidated net sales
Consolidated net sales (Million yen) Innovation 21 Phase I Innovation 21 Phase II Innovation 21 Phase III 944,053 12,988 71,670 785,554 13,900 669,596 75,088 634,687 617,811 12,826 566,194 578,506 11,972 71,021 11,708 513,469 61,361 14,136 12,788 67,438 20.2% 61,993 66,016 10,879 17.3% 55,272 23.6%
Slide 53: Consolidated operating profit
Consolidated operating profit (Million yen) Innovation 21 Phase I Innovation 21 Phase II Innovation 21 Phase III 3.5% 2.9% 2.1% 2.0% 1.7% 1.7% 32,841 1.5% 1.2% 22,709 12,626 14,305 10,960 9,912 8,246 5,906 2013/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 Operating profit Operating profit marg
Slide 54: Consolidated Ordinary Profit and Consolidated Current Net Income
Consolidated Ordinary Profit and Consolidated Current Net Income (Million yen) Innovation 21 Phase I Innovation 21 Phase II Innovation 21 Phase III 22.3% 21.1% 15.5% 33,195 12.5% 10.0% 9.8% 9.5% 9.5% 22,840 7.3% 5.7% 5.0% 5.2% 4.3% 4.0% 3.2% 14,291 2.2% 21,178 12,572 16,775 10,571 9,679 7,968 10,531
Slide 55: Quarterly Results
Quarterly Results (Million yen) Consolidated net sales 266,553 243,623 238,585 233,446 188,798 196,562 194,200 189,256 205,467 155,535 145,540 170,961 160,216 158,473 127,937 141,856 2017/3 2017/3 2017/3 2017/3 2018/3 2018/3 2018/3 2018/3 2019/3 2019/3 2019/3 2019/3 2020/3 2020/3 2020/3 2020/3 1Q 2Q
Slide 56: Consolidated Total Assets, Consolidated Net Assets and Capital Adequacy Ratio
Consolidated Total Assets, Consolidated Net Assets and Capital Adequacy Ratio (Million yen) Innovation 21 Phase I Innovation 21 Phase II Innovation 21 Phase III 31.6% 25.3% 25.7% 24.4% 23.1% 23.0% 18.9% 19.0% 335,888 328,813 286,029 255,718 245,747 259,531 232,077 235,359 104,741 73,148 87,191 48,93
Slide 57: Interest-bearing debt and D/E ratio
Interest-bearing debt and D/E ratio (Million yen) Innovation 21 Phase I Innovation 21 Phase II Innovation 21 Phase III 1.2 1.1 0.9 0.8 0.6 0.5 0.4 44,277 0.3 48,938 54,834 104,741 57,031 63,903 73,148 87,191 53,525 53,993 47,517 43,378 39,452 37,198 34,384 31,635 2013/3 2014/3 2015/3 2016/3 2017/3 2
Slide 58: Capital Investment, Depreciation and R&D Expenses
Capital Investment, Depreciation and R&D Expenses (Million yen) 4,361 4,001 3,898 3,353 3,274 3,177 2,906 3,112 2,809 2,816 1,016 1,056 1,020 1,033 1,001 2016/3 2017/3 2018/3 2019/3 2020/3 Capital investment Depreciation R&D expenses ©2020 Daiwabo Holdings Co., Ltd. 57
Slide 59: [Disclaimer]
https://www.daiwabo-holdings.com/ [Disclaimer] The statements contained in this document regarding the future, such as business performance forecasts, have been prepared based on certain assumptions that the Company has judged to be reasonable at the present time using the information currently avai