Duskin Co., Ltd. · TSE:4665
Duskin — H1 FY2018 Earnings Presentation
54 slides from Duskin's earnings presentation, Nov 14, 2018
Slide 1: Six-month Period Ended Sept. 30, 2018 Financial Report
Six-month Period Ended Sept. 30, 2018 Financial Report Duskin Co., Ltd. November 14, 2018
Slide 2: Cautionary Statements
Cautionary Statements ■ These materials contain forward-looking statements concerning forecasts, goals, strategies, and other matters related to the Company, including its consolidated subsidiaries. ■ These forward-looking statements are based on projections and assumptions made by Duskin Group in l
Slide 3: Table of Contents
Table of Contents ■ Financial Summary Consolidated Financial Results ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6 Sales ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 7 Operating Income ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 9 Ordinary Income ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 11 Net Income ・・・・・・・・・ ・・・・・・・・・・・・・・・・・・
Slide 4: Table of Contents
Table of Contents ■ Returns to Shareholders Dividends ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 35 ■ Medium-Term Management Policy 2018 Medium-Term Management Policy 2018 Development of existing businesses (Direct Selling Group) ・・・・・・・・・・・・・・・・・・ 37 (Food Group) ・・・・・・・・・・・・・・・・・・・・・・ 42 New growth (N
Slide 5: Financial Summary
Six-month Period Ended Sept. 30, 2018 Financial Summary
Slide 6: Consolidated Financial Results
Financial Summary Consolidated Financial Results Consolidated Results (millions of yen) FY2017 1st half FY2018 1st half Change Reference ended ended FY2017 ended Sept. 30, 2017 Sept. 30, 2018 % Mar. 31, 2018 Sales 80,266 78,351 -1,915 -2.4 161,031 Operating Income 4,346 4,378 +31 +0.7 7,557 Operatin
Slide 7: Sales (1)
Financial Summary Sales (1) Consolidated Sales Sales - 2nd half Sales - 1st half (millions of yen) 200,000 167,987 165,203 161,880 163,000 161,031 [Forecast] 150,000 84,355 82,673 80,789 80,764 84,648 [Forecast] 100,000 50,000 83,631 82,530 81,091 80,266 78,351 0 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2
Slide 8: Sales (2)
Financial Summary Sales (2) Consolidated Sales 78,351 million yen -1,915 million yen (-2.4％) FY2017 1st half FY2018 1st half Change (millions of yen) ended ended Sept. 30, 2017 Sept. 30, 2018 % Sales to outside customers 55,899 55,120 -778 -1.4 Direct Selling 379 361 -18 -4.9 Inter-segment sales and
Slide 9: Operating Income (1)
Financial Summary Operating Income (1) Consolidated Operating Income Operating Margin 2nd half (millions of yen) 12,000 1st half 4.8% 3.7% 4.7% [Forecast] 10,000 3.3% 7,900 3.0% 7,557 [Forecast] 8,000 6,069 5,372 3,521 6,000 5,067 3,211 (4.2) (4.0) [Forecast] 3,555 3,209 2,690 (4.4) 4,000 (3.8) (3.3
Slide 10: Operating Income (2)
Financial Summary Operating Income (2) Consolidated Operating Income 4,378 million yen +31 million yen (+0.7%) Major factors Direct Selling Group : Decrease in gross profit due to lower sales, increase in personnel expenses attributable to personnel transfers from other segments Food Group : Decreas
Slide 11: Ordinary Income (1)
Financial Summary Ordinary Income (1) Consolidated Ordinary Income Ordinary Income Margin 2nd half (millions of yen) 1st half 12,000 5.5% 4.7% 5.6% [Forecast] 10,000 4.2% 4.1% 9,000 [Forecast] 8,978 7,554 8,000 7,083 6,707 3,727 3,737 (4.4) (4.6) [Forecast] 6,000 4,148 4,268 3,275 (5.1) (5.1) (4.0)
Slide 12: Ordinary Income (2)
Financial Summary Ordinary Income (2) Consolidated Ordinary Income 5,272 million yen +31 million yen (+0.6%) Major factors 1) Operating income +000 million yen 2) Non-operating income +000 million yen ➢Decrease in share of profit of entities -40 million yen accounted for using equity method ➢Financi
Slide 13: Net Income (1)
Financial Summary Net Income (1) Consolidated Net Income Net Income Margin 2nd half (millions of yen) 1st half 8,000 3.3% 3.3% [Forecast] 2.7% 2.0% 1.8% 6,000 5,324 5,400 [Forecast] 4,318 1,753 2,005 3,441 (2.2) (2.4) 4,000 2,983 [Forecast] 2,212 1,971 (2.7) 1,020 (2.3) (1.2) 2,000 3,570 3,394 1,962
Slide 14: Net Income (2)
Financial Summary Net Income (2) Consolidated Net Income 3,394 million yen -176 million yen (-4.9%) Major factors 1) Ordinary income +000 million yen 2) Extraordinary income +000 million yen ➢Decreased loss on sales of non-current +90 million yen assets ➢Increase in impairment loss -40 million yen ➢
Slide 15: Consolidated Balance Sheet
Financial Summary Consolidated Balance Sheet Consolidated Balance Sheet (millions of yen) As of Mar. 31, 2018 As of Sept. 30, 2018 Change Major factors Cash and deposits +100 Current asset Securities -3,700 67,611 64,347 -3,264 Merchandise and finished goods +200 Machinery, equipment and vehicles, n
Slide 16: Summary by Business Segment
DUSKIN BUODSREECS Summary by Business Segment
Slide 17: Highlights by Business Segment
Segment Information Highlights by Business Segment (millions of yen) FY2017 1st half FY2018 1st half FY2017 ended Sept. 30, 2017 ended Sept. 30, 2018 Change Operating Operating Operating Margin Margin Margin (%) Sales 111,941 - 56,278 - 55,481 - -796 -1.4% Direct Selling Group Operating -3.2% 14,201
Slide 18: Direct Selling Group (1)
Summary of Core Businesses (1) Direct Selling Group (1) Sales Operating Income Operating Margin 2nd half 2nd half (millions of yen) 1st half (millions of yen) 24,000 1st half 140,000 113,300 111,941 [Forecast] 120,000 20,000 12.7% 12.7% [Forecast] 14,400 100,000 14,201 [Forecast] 16,000 57,818 80,00
Slide 19: Direct Selling Group (2): Residential Market
Summary of Core Businesses (1) Direct Selling Group (2) Change (millions of yen) FY2017 2Q FY2018 2Q % Sales Sales to outside customers Inter-segment sales 55,899 379 55,120 361 -778 -18 -1.4 -4.9 Total 56,278 55,481 -796 -1.4 ●Sales of dust control products declined. ➢ Dust control products sales -
Slide 20: Direct Selling Group (3): Commercial Market
Summary of Core Businesses (1) Direct Selling Group (3) Change (millions of yen) FY2017 2Q FY2018 2Q % Sales Sales to outside customers Inter-segment sales 55,899 379 55,120 361 -778 -18 -1.4 -4.9 Total 56,278 55,481 -796 -1.4 ●Sales of dust control products declined slightly. ➢ Dust control product
Slide 21: Direct Selling Group (4) Operating Income
Summary of Core Businesses (1) Direct Selling Group (4) Change (millions of yen) Operating Income FY2017 2Q FY2018 2Q % Operating income 7,439 7,203 -236 -3.2 Lower gross profit resulting from lower sales despite improved cost ratio ➢ Decrease in gross profit due to lower sales -400 million yen ➢ In
Slide 22: Food Group (1)
Summary of Core Businesses (2) Food Group (1) Sales Operating Income Operating Margin 2nd half (millions of yen) (millions of yen) 2nd half 1st half 1st half 50,000 700 38,000 1.1% [Forecast] 37,624 [Forecast] 0.9% 600 40,000 500 400 211 [Forecast] （1.2） 30,000 19,284 20,996 356 [Forecast] 400 300 1
Slide 23: Food Group (2) Sales
Summary of Core Businesses (2) Food Group (2) Change (millions of yen) FY2017 2Q FY2018 2Q % Sales Sales to outside customers 18,335 16,998 -1,337 -7.3 Inter-segment sales 5 4 -0 -9.3 Total 18,340 17,003 -1,337 -7.3 ●Mister Donut ➢ Total customer-level sales -5.8% (1Q: -5.0%, 2Q: -6.6%) ➢ Customer-l
Slide 24: Food Group (3)
Summary of Core Businesses (2) Food Group (3) Mister Donut Initiatives for FY2018 ➢ MISDO Meets Continue to introduce products co-developed with companies with leading techniques and high-quality materials ・1st quarter: Matcha Sweets Premium with Gion Tsujiri, a Kyoto green tea specialty brand (cont
Slide 25: Food Group (4) Operating Income
Summary of Core Businesses (2) Food Group (4) Change (millions of yen) Operating Income FY2017 2Q FY2018 2Q % Operating income 211 4 -207 -97.8 Lower gross profit resulting from lower sales despite improved cost ratio and lower expenses ➢ Decrease in gross profit due to lower sales -500 million yen
Slide 26: Other Businesses & Corporate
Summary of Core Businesses (3) Other Businesses & Corporate Change (millions of yen) FY2017 2Q FY2018 2Q % Other Businesses Sales to outside customers 6,032 6,232 +200 +3.3 Inter-segment sales 1,106 1,181 +74 +6.8 Total 7,138 7,414 +275 +3.9 Operating income 164 261 +97 +59.1 ●Duskin Kyoeki operatin
Slide 27: Other Businesses (Overseas Businesses)
Summary of Core Businesses (3) Other Businesses (Overseas Businesses) Overseas Businesses ➢ Customer-level sales Change Jan.-June 2017 Jan.-June 2018 % Taiwan 566 593 +26 +4.7% (millions of NTD) Dust Control and Shanghai 11 13 +2 +18.0% Care Services (millions of CNY) South Korea (millions of KRW) 4
Slide 28: Forecasts and Actual Results
Forecasts and Actual Results
Slide 29: FY2018 First Half Forecasts and Actual Results
Forecast & Actual FY2018 First Half Forecasts and Actual Results Note: Change from forecast announced on May 15, 2018 Consolidated (millions of yen) Sales Operating income Ordinary income Net income Forecast (May 15) 81,100 4,200 4,800 2,900 Actual 78,351 4,378 5,272 3,394 Difference (%) -2,748 (-3.
Slide 30: FY2018 Forecasts
DUSKIN BUO FY2018 Forecasts
Slide 31: FY2018 Forecasts (1)
Forecasts FY2018 Forecasts (1) Consolidated Note: No change is made to the FY2018 forecasts announced on May 15, 2018. (millions of yen) Sales Operating income Ordinary income Net income FY2017 actual 161,031 7,557 8,978 5,324 FY2018 forecast 163,000 7,900 9,000 5,400 Difference from FY2017 actual (
Slide 32: FY2018 Forecasts (2)
Forecasts FY2018 Forecasts (2) By Business Segment - 2nd Half Comparison with the same period of the previous year (millions of yen) FY2018 FY2017 - 2nd half FY2018 - 2nd half Forecast Actual Forecast Change (Full-year forecast - 1st half actual) Operating Operating Operating Margin Margin Margin %
Slide 33: FY2018 Forecasts (3)
Forecasts FY2018 Forecasts (3) By Business Segment - 2nd Half Comparison with the business plan (millions of yen) FY2018 FY2018 - 2nd half FY2018 - 2nd half Forecast Plan Forecast Change (Full-year forecast - 1st half actual) Operating Operating Operating Margin Margin Margin % Sales 113,300 - 56,50
Slide 34: Returns to Shareholders
DUSKIN BUODSREECS Returns to Shareholders
Slide 35: Dividends
Returns to Shareholders Dividends Plans to pay a 55th anniversary commemorative dividend of 10 yen with the interim dividend for FY2018 Dividends per share (Actual & Forecasts) (millions of yen) FY2016 FY2017 FY2018 (forecast) (ordinary dividend 20 yen + End of 2nd quarter 20 20 30 commemorative div
Slide 36: Medium-Term Management Policy 2018
Medium-Term Management Policy 2018
Slide 37: Development of Existing Businesses (Direct Selling Group)
Medium-Term Management Policy 2018 Development of existing businesses (Direct Selling Group) Key Franchise initiatives Customer base Focused areas Organization development Life Care Retain & increase Services Secure human convenience customers resources Enhance Health Rent Home for seniors Service C
Slide 38: Retain and Increase Customers
Medium-Term Management Policy 2018 Development of existing businesses (Direct Selling Group) Customer Retain and increase customers base Improve the contents of our membership website, DDuet Introduced DDuet COIN for purchasing products and making payment for rental items (Sales promotion and cancel
Slide 39: Care Services and Senior-Related Franchisees
Medium-Term Management Policy 2018 Development of existing businesses (Direct Selling Group) Focused Strengthen organizations for areas services for seniors and Care Services New franchisees: New Franchisees: Care Services Senior-related businesses 17 5 (1,078) (150) 9 (553) 3 (95) 14 Top: Number of
Slide 40: Sanitary Maintenance
Medium-Term Management Policy 2018 Development of existing businesses (Direct Selling Group) Focused areas Sanitary maintenance Train professional kitchen sanitary management specialists to provide our products and sanitary management know-how. Expand the service areas from professional kitchen to r
Slide 41: Secure Human Resources
Medium-Term Management Policy 2018 Development of existing businesses (Direct Selling Group) Organization Secure human resources Duskin Group staff recruitment site opened on our membership website DDuet Applicants: 2,643 Hired: 605 (total in the period of Apr. - Sept. 2018) Increase non-Japanese na
Slide 42: Food Group: Always Enjoyable Mister Donut
Medium-Term Management Policy 2018 Development of existing businesses (Food Group) Mister Donut 1. Always enjoyable Mister Donut Goals Initiatives Promote “Donut Time” ・Develop high-value added, “first of its kind” donut → Increase value perception items (Differentiation from competitors) → MISDO Me
Slide 43: Food Group: Closer and More Familiar Mister Donut
Medium-Term Management Policy 2018 Development of existing businesses (Food Group) Mister Donut 2. Closer and more familiar Mister Donut Shop renovation Number of shops renovated as planned → Improved shop ambience contributed to an increase in “Eat-in” sales Renovation effect (Five months sales (Ap
Slide 44: Food Group: Measures for Labor Shortage
Medium-Term Management Policy 2018 Development of existing businesses (Food Group) Mister Donut 3. Measures for labor shortage Reviewing current conditions and challenges to be addressed with a goal of opening a shop with 50% of current labor hours in FY2020. Developing plans suitable for Mister Don
Slide 45: Food Group: Other Food Businesses
Medium-Term Management Policy 2018 Development of existing businesses (Food Group) Other food businesses ・Maintain profitability of existing restaurants ・Accelerate franchise development after reviewing feasibility of each business Pie Face Katsu & Katsu Bakery Factory The Chiffon & Spoon Spin-off o
Slide 46: New Business Development Strategies
Medium-Term Management Policy 2018 New growth New business development strategies Business alliances and new business development 1) M&A and capital alliances 2) Business alliances with venture companies, educational institutions and public sectors Capital alliance with Nac Co., Ltd. and share subsc
Slide 47: Overseas Business Strategies
Medium-Term Management Policy 2018 New growth Overseas business strategies Establish brands in response to the needs of growing Asian markets. Mister Donut Improve profitability in existing markets Dust Control ■Mister Donut in Indonesia ・Increased convenience store locations ⇒ 1,821 (Sept. 2018) ・O
Slide 48: ESG Initiatives: ESG Management
ESG Initiatives ESG Management E: Environment S: Society G: Governance Measures for Work style Corporate global warming reform (KPI by 2030) governance (KPI by 2020) Annual labor hours/person Enhanced effectiveness CO2 emission under 1,850 of Board of Directors Compared with FY2013 Directors Evaluat
Slide 49: ESG Initiatives: Recognition
ESG Initiatives ESG investment Recognition by society MSCI Japan Investable Market Index (IMI) Duskin Merry Maids Division Duskin was rated as AAA in ESG Ratings 2018. The 2nd Nihon Service Award Minister of Health, Labour and Welfare Award S&P/JPX Carbon Efficient Index Environment stock index newl
Slide 50: Reference
DUSKIN BUODSREECS Reference
Slide 51: Financial Summary - Non-Consolidated Results
Reference 1 Financial Summary - Non-Consolidated Results Non-consolidated (millions of yen) FY2017 1st half FY2018 1st half Change Reference ended ended FY 2017 ended Sept. 30, 2017 Sept. 30, 2018 % Mar. 31, 2018 Sales 65,889 63,829 -2,059 -3.1 132,537 Operating Income 2,974 2,987 +12 +0.4 4,915 (Op
Slide 52: Business Summary by Segment
Reference 2 Business Summary by Segment Direct Selling Group Direct Selling Home Service (Residential Market) Business Service (Commercial Market) Rental service through periodic visits Rental service through periodic visits Dust Control ・・・ Mops and mats Dust Control ・・・ Mops and mats Air Clean ・・・
Slide 53: Customer-Level Sales (CLS)
Reference 3 Customer-Level Sales (CLS) CLS by Business Sales of overseas businesses indicated here are the total sales from January to June. (millions of yen) Increase/Decrease FY2017 2Q FY2018 2Q Change % Direct Selling Group 136,357 135,446 -911 -0.7% Dust Control (Domestic) Home Service (Resident
Slide 54: Recycle-Oriented Business Model at Dust Control Business
Reference 4 Recycle-Oriented Business Model at Dust Control Business Based on the idea to fully recycle the products through Rental of mops and mats repeated use until the end of their useable life Franchisees pay deposit. Rental (Delivery=Rental) (Franchisees record the sales.) Production & Logisti