Autobacs Seven Co., Ltd. · TSE:9832
Autobacs Seven — FY2014 Earnings Presentation
62 slides from Autobacs Seven's earnings presentation, May 9, 2014
Slide 1: Results for FY March 2014 and Forecasts for FY March 2015
Translation ANALYST MEETING Results for FY March 2014 and Forecasts for FY March 2015 May 9, 2014 Setsuo Wakuda Representative Director and CEO AUTOBACS SEVEN CO., LTD.
Slide 2: Contents
Contents Ⅰ FY March 2014 Consolidated Results Ⅱ FY March 2015 Consolidated Forecasts Ⅲ 2014 Medium-Term Business Plan 1
Slide 3: FY March 2014 Consolidated Results
Ⅰ FY March 2014 Consolidated Results 2
Slide 4: Financial Results (FY March 2014)
Financial Results (FY March 2014) Both net sales and income increased. First half: Sales declined in reaction to the strong sales of new cars in the previous fiscal year, but the effect of the decline in sales was minimized through an improvement in the gross margin and the curbing of SG&A. Second h
Slide 5: (For Reference) Overview of FY2014 2H Results
(For Reference) Overview of FY2014 2H Results Results exceeded the plan and the year-ago level. Net sales exceeded the plan mainly due to last-minute demand before the consumption tax hike. Gross margin fell below the plan chiefly due to lowered gross margin of tires and wheels. SG&A was roughly on
Slide 6: Retail Sales Trend in FY March 2014
Retail Sales Trend in FY March 2014 Same store sales and number of customers at domestic AUTOBACS-chain stores including FCs(YoY) 30% Sales Customer numbers 25% 20% 24.9% 15% 17.7% 10% 5.8% 5% 2.9% 7.2% 0.2% 0% -3.4% -4.9% -4.4% -3.0% -5.8% -4.7% -5.8% -5% -6.9% -1.1% -9.1% -3.4% -2.4% -10% -6.9% -8
Slide 7: Domestic Retail Sales (FY March 2014)
Domestic Retail Sales (FY March 2014) (Billion Yen) Sales at domestic AUTOBACS-chain stores including FCs*: 350 295.4 billion Yen (+ 1.2% YoY) Car related goods and services: 291.8 295.4 251.0 billion Yen (-1.3% YoY) 300 Car purchase & sale: 250 23.1 billion Yen (+33.4% YoY) 23,142 cars (+25.5% YoY)
Slide 8: Sales Variance by Merchandise
Sales Variance by Merchandise 【Same store basis】 Sales: -0.6% YoY, Number of customers: -3.3% YoY Sales* changes by merchandise category （Million Yen） (for 12 months ended March 31, 2014; YoY change in amount; total store basis) 4,000 Motorcycle Goods All-season tires: +9,200 MY 2,770 Car Electronic
Slide 9: ASP of Car Navigation Devices at Stores
ASP of Car Navigation Devices at Stores Sales* and ASP of navigation devices (YoY) PND Built-in PND ASP Built-in ASP Billion Yen （前年比） 45 0% 40 PND, 11 10 -5% 35 -5.8% -9.7% 30 -10.0% 7 -10% 25 -9.7% 6 20 -16.0% -16.0% -15% 15 -16.3% 10 -18.9% -20% Built-in, 31 31 24 21 5 0 -25% FY Mar 2011 FY Mar 2
Slide 10: Last-Minute Demand before Consumption Tax Hike
Last-Minute Demand before Consumption Tax Hike Weekly YoY Changes in Sales at All Chain Stores* from Feb. 4 to Mar. 31, 2014 Increase in sales mainly due to （Million Yen） snowfalls in the Last-minute demand before the 4500 Kanto area consumption tax hike 70% 59.2% 4000 60% 3500 50% 3000 40.7% 3,870
Slide 11: Flow of Car Sales and Purchase
Flow of Car Sales and Purchase Customers Car dealers Used car dealers Auto auction Purchase Sales to FC headquarters Purchase 7,761 cars 7,686 cars B2B sales 3,055 cars Wholesale B2B sales Used car dealers Used car dealers B2C sales FC Headquarters Auto auction and auto auction (AUTOBACS SEVEN) 12,4
Slide 12: Major Drivers Of Variance (FY March 2014)
Major Drivers Of Variance (FY March 2014) (Billion Yen) FY March 2014 FY Mar Results YoY 2013 Major drivers of variance % of Sales % of Sales change Net sales 231.7 +0.7% Non-consolidated -3.54 BY 230.2 Domestic store subsidiaries +3.33 BY Figures before Overseas subsidiaries +1.59BY consolidation C
Slide 13: Operating Income Components (FY March 2014)
Operating Income Components (FY March 2014) Domestic AUTOBACS-chain store sales Total store basis: +1.2%／ same store basis: -0.6% Operating income (Million yen) Amount Major drivers of variance (yoy) Non-consolidated 13,330 -400 MY • Net sales-3,540MY (-1.9%) ・Gross Profit -1,930MY (21.2% (last year
Slide 14: Segment Information
Segment Information (Billion Yen) FY March FY March YoY Latest % to 2014 results 2013 results Change Forecast Forecast Net sales 183.8 187.3 -1.9% 182.7 +0.6% Non-consolidated Operating income 13.3 13.7 -2.9% 13.3 +4.1% Net sales 81.4 78.1 +4.3% 80.8 +0.7% Domestic store subsidiaries Operating incom
Slide 15: Performance By Country (FY March 2014)
Performance By Country (FY March 2014) FRANCE CHINA SINGAPORE THAILAND Number of stores at March 31, 2014 11 1 3 4 -including FC stores- Same store sales +36.3% +2.1% -6.0% -14.4% -including FC stores- (all stores) FY March FY March FY March FY March FY March FY March FY March FY March Period 2014 2
Slide 16: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan Measures Progress of individual measure Strengthening domestic business 1. Improving stores’ Operating margin at existing stores: 6.2% earnings power - Improved operations at stores (reviewed operational efficiency and (i) Reform at stores introduced tablet PCs)
Slide 17: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan Measures Progress of individual measure Overseas operations (i) Moving into the black - Total operating income at overseas subsidiaries moved into positive territory. - Established a joint venture engaging in the wholesale of automotive goods and services. (Indo
Slide 18: Internet Sales Results
Internet Sales Results AUTOBACS Yahoo! store Net sales for the FY Mar 31, 2014 : 1,360 million yen (up 59.0% year on year) Direct delivery to customers: 590 million yen Store sales: 770 million yen ・Most selling categories - Car electronics: about 50% of total - Tires and wheels: about 20% of total
Slide 19: Store Openings And Closings (FY March 2014)
Store Openings And Closings (FY March 2014) Domestic stores No. of FY March 2014 No. of stores at stores at Store Type March 31, 1st-half 2nd-half March 31, 2013 New S/B・R/L Close New S/B・R/L Close 2014 AUTOBACS 455 ＋14 ＋2/-1 -1 ＋9 ＋3/-3 478 Super AUTOBACS 76 -1 75 AUTOBACS Secohan Ichiba 14 -2 -2 1
Slide 20: Progress of New Store Openings
Progress of New Store Openings Opening Store name date 1 AUTOBACS KAMATA Store 2013/4/18 2 AUTOBACS KUMAMOTO HITOYOSHI Store 2013/4/18 3 AUTOBACS YANAI MINAMIMACHI Store 2013/6/21 4 AUTOBACS AIZUMI Store 2013/6/27 5 AUTOBACS FUKUROI IC Store 2013/7/11 6 AUTOBACS Tire Shop NAGAREYAMA Store 2013/7/17
Slide 21: Engagement in the Tires Business
Engagement in the Tires Business Opening low-cost stores specializing in tires Low-cost operation: Management system mainly dealing in tires and wheels, with fewer staff (Average number of employees: 4~5) Low-cost store openings: Reducing total investment by purchasing property including furniture,
Slide 22: Reorganization of Store Subsidiaries
Reorganization of Store Subsidiaries Reorganization of Domestic Store Subsidiaries (including changes that comes into force by June 1, 2014) Measures Contents Transfer of store - Transfer of three stores in Nara area to a franchisee ownership - Transfer of a store in southern Mie area to a franchise
Slide 23: FY March 2015 Consolidated Forecasts
Ⅱ FY March 2015 Consolidated Forecasts 22
Slide 24: Financial Forecasts (FY March 2015)
Financial Forecasts (FY March 2015) (Billion Yen) FY March FY March 2015 (Forecasts) 2014 YoY change Results 1st-half 2nd-half Full year (amount & rate) Net sales 231.7 104.7 123.7 228.4 -3.3 Gross profit 76.9 34.4 40.9 75.3 -1.6 % to Net sales 33.2% 32.9% 33.1% 33.0% -2.1% SG&A 63.0 30.5 31.3 61.8
Slide 25: Premises of Sales Forecast; Factors Affecting Earnings
Premises of Sales Forecast Business Environment • Reaction to last-minute demand before the consumption tax hike (a decline in demand for new cars) • Snowfall expected to be as usual • Consumer sentiment expected to decline in the first half and improve in the second half Factors Expected to Affect
Slide 26: Premises of Sales Forecast
Premises of Sales Forecast (Billion Yen) Forecast of Domestic Sales for FY March 2015 Existing Car sales 300 store sales New store Safety (new member 295.4 inspection stores) -7.2 sales Others 294.1 295 +3.6 +1.4 +6.0 +3.0 290 285 Car related goods &service -9.6 Car sales +2.4 280 275 270 265 260 FY
Slide 27: Forecast at Parent & Subsidiary Level (FY March 2015)
Forecast at Parent & Subsidiary Level (FY March 2015) (Billion Yen) FY March FY March 2015(Forecasts) 2014 YoY change results 1st-half 2nd-half Full Year (amount) Non-consolidated Net sales 183.75 83.10 100.80 183.90 +0.1 Ordinary 13.33 4.70 8.10 12.80 -4.0 income Domestic store Net sales 81.39 34.9
Slide 28: Management Policy for the FY ending March 2015
Management Policy for the FY ending March 2015 Management policy: Strengthening earning power and enhancing the ability to get things done AUTOBACS business Policy: Establishing a base for growth and increasing market share at individual stores - Strengthening of relations with customers - Human res
Slide 29: Initiatives for Domestic AUTOBACS Business
Initiatives for Domestic AUTOBACS Business Car goods and services ・Strengthening tire sales (private brand, exclusive tires) Reform at stores ・Promoting private brand merchandise ・Enhancing collaboration between the ・Sales promotion for the 40th anniversary of three existing business: car goods the
Slide 30: New Private Brand and Exclusive Tires
New Private Brand and Exclusive Tires Exclusive tire: ESPORTE AB01 PB tire: Maxrun EVERROAD Position: moderate-price, made in Japan Position: made in Japan, fuel-efficient Target: compact cars and K-cars Target: compact cars and K-cars, minivans 29
Slide 31: Statutory Safety Inspection and Car Sales Business
Statutory Safety Inspection and Car Sales Business Statutory safety inspection Car sales (total stores) (Thousands cars) (total stores) (Thousands cars) 700 30 26.5 580 600 600 573 25 535 23.1 498 500 447 20 17.9 18.4 400 16.2 14.6 15 300 10 200 100 5 0 0 March March March March March March March Ma
Slide 32: New Store Openings
New Store Openings Number of stores New Store Openings in Domestic Market 650 600 591 571 20 552 25 550 530 30 513 23 500 6 450 400 350 300 Mar 2011 Mar 2012 Mar 2013 Mar 2014 Mar 2015（E） New Stores Total number of stores 31
Slide 33: Capital Expenditures & Depreciation
Capital Expenditures & Depreciation Capital Expenditures Depreciation (Billion Yen) (Billion Yen) 9.0 7.0 8.0 7.69 6.0 Full year 7.0 4.92 6.25 4.90 estimate 5.0 4.60 4.60 4.50 4.42 6.0 Full year estimate 4.81 4.0 5.0 4.15 4.0 3.0 3.19 3.06 3.0 2.0 2.0 1.0 1.0 0.0 0.0 March March March March March Ma
Slide 34: Financial Strategies – Shareholder Return Policy
Financial Strategies – Shareholder Return Policy FY March 2014 Dividends: Interim 27 Yen/share, Year-end 27 Yen/share, 40th anniversary commemorative 10 Yen/share, Annual total 64 Yen/share Share buyback: 4.60 billion Yen, 3,000,000 shares FY March 2015 (Forecast) Dividends: Interim 30 Yen/share, Ye
Slide 35: 2014 Medium-Term Business Plan
Ⅲ 2014 Medium-Term Business Plan 34
Slide 36: Summary of the 2010 Medium-Term Business Plan (1)
Summary of 2010 the Medium-Term Business Plan (1) AUTOBACS 2010 FY March 2014 Business Plan Management targets Operating income 16.0 billion Yen 13.9 billion Yen ROE 7.0% 6.8% Dividend-on-equity (DOE) 3.0% 4.1% Business targets Operating income at AUTOBACS stores 6.9% 6.2% Market share 18.0% 14.9% T
Slide 37: Summary of the 2010 Medium-Term Business Plan (2)
Summary of the 2010 Medium-Term Business Plan (2) (Billion Yen) Trends in managerial indicators in the Medium-Term Business Plan 20 8% 6.8% 7.0% 7% 16.0 13.7 5.7% 12.7 15 13.9 6% 12.0 5.3% 5% 10.2 10 4.1% 4.1% 4% 3.8% 3.2% 3.3% 3.4% 3.0% 3.0% 3% 5 Target 2% 1% 0 0% FY Mar 2010 FY Mar 2011 FY Mar 201
Slide 38: Summary of the 2010 Medium-Term Business Plan (3)
Summary of the 2010 Medium-Term Business Plan (3) Size of domestic auto aftermarket OP margin at AB-format stores and share of AUTOBACS (Trillion Yen) 2 20% 7% Target 6.9% Target 18% 1.9 1.86 18% 1.83 1.84 1.81 1.8 1.8 16% 6.2% 6.2% 6% 15.1% 5.9% 1.7 14.8% 14.9% 14.9% 14% 15.0% 1.6 12% 5.4% 5.2% 1.5
Slide 39: Summary of the 2010 Medium-Term Business Plan (4)
Summary of the 2010 Medium-Term Business Plan (4) Operating Income Performance Results by Segment (Billion Yen) Failed to 20 achieve Plan 18 -2.1 Achieved 16.0 +0.2 Results 16 13.9 14 13.1 13.3 12 10 Failed to 8 achieve Failed to Achieved Failed to -1.8 achieve 6 achieve ±0.0 -0.4 4 -0.2 2.3 2 0.5 0
Slide 40: Summary of the 2010 Medium-Term Business Plan (5)
Summary of the 2010 Medium-Term Business Plan (5) Assessment Measures Stronger Domestic business ・Restructuring of existing stores ・Training of store staff for better customer service ・Improvements in store profitability ・Opening of 82 new stores (Plan 120 stores) －Existing store operating margin in
Slide 41: Position of the 2014 Medium-Term Business Plan
Position of the 2014 Medium-Term Business Plan Profitability + Governance Profitability + Profit Growth Profit Growth + Improving cost efficiency • Focusing on domestic FC New Growth Strategy and strengthening business Improving profit at AB stores governance system • Improving capital efficiency an
Slide 42: Basic Policy and Management Targets
Basic Policy and Management Targets Improving Profitability of AUTOBACS Business and Creating New Business for Growth Basic Policy 1. Domestic AUTOBACS Business 2. New Business 3. Overseas Business FY March 2018 Management Consolidated Operating Income: 18 billion Yen Targets Consolidated ROE: 8.0%
Slide 43: Perception of the Business Environment
Perception of the Business Environment Average age of cars continuing to grow. Increasing number of hybrid cars and K-cars. Electric vehicles Cars becoming more practical. Enhanced road safety through technology innovations such as automated driving system. Increasing popularity of small and high-pe
Slide 44: Domestic AUTOBACS Business Policy
Domestic AUTOBACS Business Business Policy Creating Higher Value for Customers and Establishing Competitive Advantage Enhancing Customers’ Convenience and Security Business Strategy 1. Upgrading to “One-stop car goods and service” Business Providing customer with “Car” “Maintenance service” and “Fun
Slide 45: Major Initiatives of Domestic AUTOBACS Business
Major Initiatives of Domestic AUTOBACS Business Business Fields Major Initiatives • Bolstering tire sales by expanding sales bases and using e-commerce Car Goods and Tire sales target: 8.0million tires (+1.23million tires vs FY Mar 2014) Services • Developing quality and competitive-priced private b
Slide 46: New Business & Overseas Business
New Business & Overseas Business New Business 1. Developing new business focusing on fields related to automobile, where the Group can take advantage of its strengths 2. Developing new business emphasizing on speed, through M&A and alliances 3. Allocating management resources to new business in orde
Slide 47: Toward the Goal of 18.5BY in Operating Income
<Reference> Toward the Goal of 18.5BY in Operating Income Billion Yen 20 Subsidiaries for car goods Overseas supply and subsidiaries Subsidiaries 18 for supporting other(including + functions New business) 1.4 Store subsidiaries ± 0.0 +1.2 16 Non- consolidated + 1.2 + 0.1 Segment total 14 Segment to
Slide 48: Financial Strategy
Financial Strategy Consolidated Cash Flow and Liquidity (four year simulation) Billion Yen 50 38.3 40 38 35.8 Cash 34.1 30 About 35 billion Yen 19.9 20 18.3 Operating CF 15.9 14 Investment CF 10 Finance CF Cash + Securities 0 -2.2 -5.2 -5.3 -10 -6 Total investment -12.7 -14 -13 About 50 billion Yen
Slide 49: CSR / Risk Management
CSR / Risk Management Business Policy Continuing to take action on compliance, integrated risk management, and environmental load reduction among other initiatives, in communication with stakeholders, especially communities, through the AUTOBACS business. Major Initiatives 1. Conducting compliance t
Slide 50: Summary
Summary • In the fiscal year ended March 31, 2014, income exceeded the plan, reflecting initiatives that the headquarters and stores executed together, snowfalls, and last-minute demand before the consumption tax hike. • The business environment will be challenging in the fiscal year ending March 31
Slide 51: Appendix
Appendix 50
Slide 52: Quarterly P/L (FY March 2014)
Quarterly P/L (FY March 2014) (Billion Yen) Full Year Q1(Results) Q2(Results) Q3(Results) Q4(Results) (Results) Net sales 52.4 51.3 74.6 53.4 231.7 YoY -9.7% -2.7% +3.4% +12.9% +0.7% Gross profit 17.0 17.6 24.0 18.3 76.9 (% of Sales) (32.5%) (34.3%) (32.2%) (34.2%) （33.2%) YoY -3.9% -0.0% +1.8% +8.5
Slide 53: Sales Trend: Retail & Wholesale (Apr 2013 – Mar 2014)
Sales Trend: Retail & Wholesale (Apr 2013 – Mar 2014) （％） 【YoY change for the last 12 months】 30.0 26.8 Sales Wholesale Strong sales of tires, 25.0 wheels, and tire chains due to snowfalls 21.0 20.0 Rebound from last year’s decrease in wholesale Increase in merchandise assortment for the year- 19.2
Slide 54: Performance Breakdown (FY Mar 31, 2014)
Performance Breakdown (FY Mar 31, 2014) Non-consolidated Net sales -0.15BY ↑ tires & wheels, car sales, services, external items Wholesale -0.1% ↓ car electronics devices, motor sports goods 183.7 BY -3.36BY ↑ on-line store, fuel, Retail YoY: -3.54BY -38.4% ↓ car electronics devices, services, tires
Slide 55: Decrease in Consolidation Adjustments
Decrease in Consolidation Adjustments Consolidation Adjustments (Million Yen) FY Mar 31, 2014 FY Mar 31, 2013 Operating income for segment total 14,585 13,453 Inventories (Unearned income of subsidiary inventories, etc.) (253) (297) Depreciation of goodwill (105) (263) Allowance for point card (17)
Slide 56: Domestic Automobile Market Predictions
<Reference> Domestic Automobile Market Predictions (million cars) Domestic demand for (million tires) Commercial tires for passenger cars passenger cars 6 55 5.46 52.1 - 3％ -15％ 50.4 50.1 50.6 5 4.75 50 4.44 4.01 4 45 3 40 2 35 1 30 2011 2012 2013 2014 2011 2012 2013 2014 Source：Japan Automobile Sou
Slide 57: Financial Strategies – Shareholder Return Policy
Financial Strategies – Shareholder Return Policy (Billion Yen) 14.0 12.01 12.0 9.85 10.22 9.45 10.00 10.0 Share 8.0 7.20 buyback 5.23 5.46 4.59 5.00 6.0 Dividend 4.0 2.0 4.62 4.76 4.81 4.86 5.00 0.0 FY March 2011 FY March 2012 FY March 2013 FY March 2014 FY March 2015 (Plan) Dividend per share (Afte
Slide 58: Balance Sheet: Assets
Balance Sheet: Assets (Billion Yen) Total Assets 205.5 BY 201.5 BY Major items changed Cash and deposits 48.2 45.7 Cash and deposits：-2.5BY Trade notes and account receivables Trade notes and account 24.7 Lease 22.5 receivables ：-2.3BY investment assets 12 12.4 1 Securities 0.8 Inventories： -0.4BY 1
Slide 59: Balance Sheets: Liabilities & Equity
Balance Sheets: Liabilities & Equity (Billion Yen) Total Liabilities & Equity 205.5BY 201.5 BY ST borrowings: Major -1.0 BY items changed Accounts payable 21.6 ST borrowings and 17.6 2.2 corporate bond 4.4 accounts payable-trade: -4.0 BY 21.2 Other ST 22 liabilities Short-term borrowings : +2.3 BY 6
Slide 60: Performance Results Of Franchisees
Performance Results Of Franchisees Ordinary Income of Franchise Companies (Preliminary) (Billion Yen) 10.0 Total of profit-making FCs Total of profit-making subsidiaries Total of loss-making FCs Total of loss-making subsidiaries Orginary income(net) 8.0 8.5 7.89 7.93 6.0 6.21 5.49 4.0 2.0 0.0 -2.0 F
Slide 61: Segment Information (as of April 1, 2014)
Segment Information (as of April1, 2014) End customers in Japan Retail Domestic store Franchisees subsidiaries Other 21 Companies 87 Companies Customers Retail from Wholesale direct operation Others stores Subsidiaries for Subsidiaries for car AUTOBACS SEVEN supporting function goods supply and othe
Slide 62: Forward-Looking Statements
Forward-Looking Statements These materials include forecasts regarding the Company’s future plans, strategies, and performance. This information is based on judgments and estimates made in accordance with information currently available. Actual results may differ materially from forecasts due to suc