Kantsu Hd Co. Ltd. · TSE:9326
Kantsu Hd — Kantsu — 1H FY2/22 Earnings Presentation
54 slides from Kantsu Hd's earnings presentation, Oct 14, 2021
Slide 1: Results of Operations for the First Half of the Fiscal Year Ending February 28, 2022
Results of Operations for the First Half of the Fiscal Year Ending February 28, 2022 KANTSU CO., LTD. (Securities code: 9326) October 14, 2021
Slide 2: Contents
Contents I. Company Profile ………… 3 II. Our Services ………… 7 III. KANTSU’s Strengths ………… 16 IV. 1H FY2/22 Financial Summary ………… 22 V. FY2/22 Earnings Forecasts ………… 36 VI. Medium-term Business Plan ………… 41 Reference: Activities for the Sustainable ………… 51 Development Goals 2
Slide 3: I. Company Profile
I. Company Profile 3
Slide 4: 1. Company Profile
1. Company Profile KANTSU provides logistics services centered on the EC and catalog logistics sectors and IT automation services centered on the Cloud Thomas warehouse management system. Company name KANTSU CO., LTD. Offices Head office: 1-8-13 Nagata, Higashi Osaka city, Osaka Osaka Branch Office:
Slide 5: 2. History
2. History KANTSU has grown rapidly since 2010 along with the expansion of the e-commerce market. KANTSU formed a capital and business alliance with Rakuten Inc. in February 2019 and was listed on the Tokyo Net sales Stock Exchange Mothers Market in March 2020. (Millions of yen) Founding and early y
Slide 6: 3. Overview of KANTSU's Services
3. Overview of KANTSU’s Services Always using successful activities in EC/catalog logistics services to add new services IT automation business Rakuten Super Logistics services (Cloud Thomas, Annie and other systems) Efficient software created Reputation for thorough logistics services from ideas in
Slide 7: II. Our Services
II. Our Services 7
Slide 8: 1. Logistics Services Business
1. Logistics Services Business EC/catalog logistics support services The core business at the center of growth of KANTSU’s performance KANTSU operates distribution centers for other companies by handling incoming/outgoing shipments, inventories and other operations for EC, catalog and other customer
Slide 9: 1. Logistics Services Business
1. Logistics Services Business Strengthen cold chain logistics services Rakuten Super Logistics services We plan to strengthen logistics for frozen and refrigerated food products, which is expected to be a KANTSU and Rakuten established a capital and growing component of the EC/catalog logistics sup
Slide 10: 1. Logistics Services Business
1. Logistics Services Business Outsourced order processing services Logistics consulting services These upstream support services for EC/catalog By using knowledge gained from providing EC/catalog logistics enable companies to use KANTSU for logistics support services, KANTSU has a consulting confir
Slide 11: 2. IT Automation Business
2. IT Automation Business The software sales business is based on advances originating from our own logistics operations. Major products include the Cloud Thomas warehouse management system for high-quality logistics and the Annie check list system that also started from ideas in our front-line oper
Slide 12: 2. IT Automation Business
2. IT Automation Business The software sales business is based on advances originating from our own logistics operations. Major products include the Cloud Thomas warehouse management system for high-quality logistics and the Annie check list system that also started from ideas in our front-line oper
Slide 13: 2. IT Automation Business
2. IT Automation Business Transforming successful activities at KANTSU into services to sell to other companies has the benefits of improving satisfaction for current customers and attracting new customers. During FY2/21, we used this process to launch the e.can and ippo! services. ippo! – A robotic
Slide 14: 3. Other Businesses
3. Other Businesses Education services for people with a developmental disability ◼ After-school daytime classes for children with a developmental disability Operating after-school day classes for children with a developmental disability helps these children develop skills and become more independen
Slide 15: 4. Recent Topics
4. Recent Topics Tokyo Primary Center, a refrigerated/frozen 3-temperature zone warehouse, to be constructed in the city of Niiza in Saitama prefecture KANTSU plans to begin operating in February 2022 the Tokyo Primary Center, which will have a total floor area of about 27,400m2. Located in the Niiz
Slide 16: III. KANTSU's Strengths
III. KANTSU’s Strengths 16
Slide 17: 1. A Large and Growing Number of Customers
1. A Large and Growing Number of Customers Growth backed by new customers as well as sound relationships with current customers Net sales (Area) (Millions of yen) (100 tsubo*) 12,000 700 売上高（百万円） Net sales (Millions of yen) 物流拠点坪数（百坪） Floor area of distribution centers (100 tsubo) 10,756 600 10,000
Slide 18: 1. A Large and Growing Number of Customers
1. A Large and Growing Number of Customers Support for logistics in many sectors Steady growth of sales from outsourced logistics operations Sales Composition by Market Sector (1H FY2/22 results) 4% Net sales 8% (Thousands Average Monthly Sales Per Client Company 社 of yen) 6% 33% 8,000 社 社 7,075 8%
Slide 19: 1. A Large and Growing Number of Customers
1. A Large and Growing Number of Customers New customers contribute to The number of new customers is increasing KANTSU’s growth every year but relationships of at least four years are still about half of all customers Cumulative Sales from New Customers (Millions of yen) We maintain logistics suppo
Slide 20: 2. Ability to Attract New Customers
2. Ability to Attract New Customers We use study tours of warehouses, web marketing and other activities to establish relationships with new customers. Warehouse Study Tours (Seminars) Web Marketing Warehouse Study Tours have hosted more than 200 people We started using the internet more than 10 yea
Slide 21: 3. Recruiting, Training and Productivity
3. Recruiting, Training and Productivity To maintain a well-trained and motivated workforce, we have recruiting activities as well as measures to strengthen training programs, improve evaluation systems and make other improvements. ■Recruiting ■Training and Productivity ・Started using foreign techni
Slide 22: IV. 1H FY2/22 Financial Summary
IV. 1H FY2/22 Financial Summary 22
Slide 23: 1. 1H FY2/22 Financial Highlights
1. 1H FY2/22 Financial Highlights ・Operating profit was 175% higher than one year earlier. In April 2021, the new EC/Catalog Distribution Center (about 15,900m2) reached full capacity. In June 2021, the utilization rate of the new D-to-C Distribution Center (about 17,200m2) was about 70%. Net sales
Slide 24: 2. 1H FY2/22 Results Summary
2. 1H FY2/22 Results Summary Sales and earnings increased due to strong growth of sales in the logistics services business and IT automation business. (Millions of yen, %) 1H FY2/21 1H FY2/22 YoY change % to net % to net Results Results Amount % sales sales Net sales 4,356 100.0 5,111 100.0 754 17.3
Slide 25: 3. Quarterly Results Summary
3. Quarterly Results Summary First half performance was in line with the fiscal year plan. Sales were 47.5% of the plan and operating profit was 53.1% of the plan. (Millions of yen, %) FY2/21 FY2/22 1Q 2Q 3Q 4Q 1Q 2Q 1H Vs. 1H plan Vs. FY plan FY plan Net sales 2,179 2,177 2,422 2,751 2,727 2,384 5,
Slide 26: 3. Quarterly Results Summary
3. Quarterly Results Summary Steady year-on-year growth of quarterly sales (Millions of yen) Quarterly Sales 3,500 3,000 2,751 2,727 2,384 2,500 2,177 2,422 2,179 1,723 1,981 2,000 1,845 1,750 1,500 1,000 500 0 2020/2期 1Q 2020/2期 2Q 2020/2期 3Q 2020/2期 4Q 2021/2期 1Q 2021/2期 2Q 2021/2期 3Q 2021/2期 4Q 2
Slide 27: 4. Analysis of Change in Net Sales
4. Analysis of Change in Net Sales (3) (1) Higher sales of EC/catalog logistics (2) (4) support services Switch of cargo transport rate contracts for some customers (1) reduced sales but sales were higher because of sales from new customers in FY2/21 and 1Q FY2/22 +651 million yen YoY Up 754 million
Slide 28: 5. Analysis of Change in Operating Profit
5. Analysis of Change in Operating Profit (1) Higher gross profit in the logistics services (3) business Mainly due to higher sales in the EC/catalog logistics support services (1) category (2) +261 million yen YoY (2) Higher gross profit in the IT automation (4) business Higher earnings as the cont
Slide 29: 6. Business Segments (1) Overall
6. Business Segments (1) Overall • Sales were higher in the logistics services business and IT automation business as the contribution to consolidated sales and earnings of the IT automation business continued to increase. (Millions of yen) Composition of net sales by segment (Millions of yen) Compo
Slide 30: 6. Business Segments (2) Logistics Services Business
6. Business Segments (2) Logistics Services Business • Switch of cargo transport rate contracts for some customers reduced sales but sales were up 643 million yen (15.4%) from one year earlier because of sales from new customers in FY2/21 and 1Q FY2/22. • A small increase in the profit margin becaus
Slide 31: 6. Business Segments (3) IT Automation Business
6. Business Segments (3) IT Automation Business • Segment sales increased 112 million yen (96.2%) primarily because of the increasing number of Cloud Thomas contracts and higher sales of logistics automation hardware as the number of Cloud Thomas users increased in 1Q. • Segment profit increased 9 m
Slide 32: 6. Business Segments (4) Other Businesses
6. Business Segments (4) Other Businesses • Technology education services for foreign trainees sales were down because of the inability to provide services to new classes of trainees due to the pandemic and other reasons. However, there was only a small decrease in sales because of a big increase in
Slide 33: 7. Condensed Balance Sheet
7. Condensed Balance Sheet As of Feb. 28, 2021 As of August 31, 2021 (Millions of yen, %) YoY change Amount Composition Amount Composition Increase mainly due to Current assets 4,142 55.0 4,456 54.4 314 exercise of share acquisition rights Cash and deposits 2,592 34.4 2,984 36.4 391 Accounts receiva
Slide 34: 8. Cash Flows and Other Information
8. Cash Flows and Other Information Cash Flow Summary (Millions of yen) FY2/21 FY2/22 First half Fiscal year First half Main factors Operating cash flows 39 187 420 Profit before income taxes Installation of equipment and payment of leasehold deposits Investing cash flows (292) (650) (627) associate
Slide 35: 9. Capital Expenditures
9. Capital Expenditures Plan and Actual Expenditures (As of August 31, 2021) (Millions of yen) Payment Project Purpose Plan Start/Finish made Payments made Lease deposits 133 million yen Construction of Tokyo More space for current Others 12 million yen Dec. 2019 Primary Center customers and space f
Slide 36: V. FY2/22 Earnings Forecasts
V. FY2/22 Earnings Forecasts 36
Slide 37: 1. FY2/22 Earnings Forecasts
1. FY2/22 Earnings Forecasts • Forecast net sales to increase 12.9% YoY and operating profit to increase 60.4% YoY. (Millions of yen, %) FY2/21 Results FY2/22 Forecasts YoY change % to net % to net Results Forecasts Amount % sales sales Net sales 9,530 100.0 10,756 100.0 1,226 12.9 Gross profit 1,12
Slide 38: 2. Business Segments (1) Logistics Services Business
2. Business Segments (1) Logistics Services Business • Two new distribution centers in Amagasaki, Hyogo prefecture (total of about 35,700m ) due to 2 the continuing growth of the EC/catalog logistics support services market. • Forecast a reduction of about 800 million yen in projected cargo transpor
Slide 39: 2. Business Segments (2) IT Automation Business
2. Business Segments (2) IT Automation Business • In addition to the Cloud Thomas warehouse management system, we are adding Cloud Thomas Pro, which can be customized to match each customer’s requirements and scale of operations, to serve a broader range of customers. • Cloud Thomas sales are foreca
Slide 40: 2. Business Segments (3) Other Businesses
2. Business Segments (3) Other Businesses • Sales of technology education services for foreign trainees are expected to decrease because of COVID-19 and political instability in Myanmar. But segment sales are forecast to increase 28 million yen, or 33.1%, because of the expected sales of the employm
Slide 41: VI. Medium-term Business Plan
VI. Medium-term Business Plan －2024－ 41
Slide 42: 1. Medium-term Business Plan Overview
1. Medium-term Business Plan Overview • The goal is net sales of 15.3 billion yen and operating profit of 1.0 billion yen in FY2/24 by achieving growth that outpaces the e-commerce market’s expansion. (Millions of yen, %) FY2/22 FY2/23 FY2/24 YoY YoY YoY % to net % to net % to net Plan change Plan c
Slide 43: 2. Medium-term Plan for Business Segments
2. Medium-term Plan for Business Segments • In the logistics services business, the goal is to use capital expenditures for distribution center expansion and robots and other automated logistics equipment in order to grow faster than the e- commerce market. • In the IT automation business, the goal
Slide 44: 2. Business Segment Sales Plan
2. Business Segment Sales Plan • KANTSU aims for net sales of 14.2 billion yen in the logistics services business and of 1.0 billion yen in the IT automation business in FY2/24. (Millions of yen) 16,000 155 15,000 1,000 14,000 13,000 126 800 12,000 11,000 14,215 115 10,000 349 12,178 86 9,000 297 10
Slide 45: 3. Market Conditions
3. Market Conditions Rapid growth of the EC market size of the merchandise sales category is expected to continue Market size EC ratio (100 millions of yen) (%) 140,000 9.00% 8.08% 8.00% 120,000 122,333 6.76% 7.00% 6.22% 100,000 5.79% 100,515 6.00% 5.43% 92,992 80,000 4.75% 86,008 5.00% 4.37% 80,043
Slide 46: 3. Market Conditions
3. Market Conditions Growth is continuing in the merchandise sales category, the largest component of KANTSU’s customer base B-to-C EC Sector – Market Category Size and Composition Ratio B-to-C EC Sector Merchandise Sales for Product Categories Growth 2019 2020 2019 2020 ratio Market size Market siz
Slide 47: 4. Growth Strategy
4. Growth Strategy 1 New large refrigerated and frozen warehouses • Strengthen logistics sales services for refrigerated/frozen food EC, a category expected to continue growing January 2022 (planned) Automated warehouse with 1,050 pallets for frozen merchandise (1,323 ambient temperature pallets) EC
Slide 48: 5. Internal Strategy that Supports the Growth Strategy
5. Internal Strategy that Supports the Growth Strategy １ Strengthen activities using the internet to attract new customers • Use SEO, an internet advertising strategy and remote sales meetings for effective activities to establish relationships with new customers Use automated logistics equipment an
Slide 49: 6. KPI Number of New Customers
6. KPI Number of New Customers Net sales (Plan) Contracts at End of Fiscal Year (Millions of yen) (Plan) Sales from New Customers Cloud Thomas EC/catalog logistics support services 15,000 Companies 900 830 13,000 1,165 800 1,821 910 700 11,000 817 600 590 408 9,000 642 500 321 400 7,000 2,740 300 23
Slide 50: 6. KPI Scale of Operations and Efficiency
6. KPI Scale of Operations and Efficiency • Plan to complete a 27,400m2 distribution • Sales per tsubo and the utilization rate are expected center in Niiza (Saitama prefecture) at the end to temporarily decrease in FY2/22 because of the of FY2/22 (earlier than originally planned) new Niiza distribu
Slide 51: Reference: Activities for the Sustainable Development Goals
Reference: Activities for the Sustainable Development Goals 51
Slide 52: Reference: Activities for the Sustainable Development Goals
Reference: Activities for the Sustainable Development Goals Category Activities Examples Associated SDGs Hire young people in Japan and other countries ⚫ Use of logistics robots and robotic with a desire to learn ICT skills for logistics to process automation become software developers or engineers
Slide 53: Reference: Activities for the Sustainable Development Goals
Reference: Activities for the Sustainable Development Goals Category Activities Examples Associated SDGs Operate after-school and other classes for the education of children with developmental disabilities and use after- school daytime care services for these children to help ⚫ Operation of after-sc
Slide 54: Disclaimer
Disclaimer Disclaimer and Precautions Concerning Forward-looking Statements ■ Information in this presentation and associated materials contains forward-looking statements. These statements are based on the current outlook and forecasts as well as on assumptions that incorporate risk. All forward-lo