Okuwa Co., Ltd. · TSE:8217

Okuwa — H1 FY2022 Earnings Presentation

40 slides from Okuwa's earnings presentation, Oct 4, 2022

  1. Slide 1: Financial Results Presentation Material

    First half of the fiscal year ending February 20, 2023 Financial Results Presentation Material OKUWA Co., Ltd. (8217) October 4, 2022 Copyright © OKUWA Co., Ltd. All Rights Reserved. -1-

  2. Slide 2: Consolidated P/L Statement

    Consolidated P/L Statement (Million yen, %) Six months ended Six months ended August 20, 2022 August 20, 2021 Year-on-year Year-on-year Results Results change change (%) Operating income 133,002 120,653 － － Operating profit 2,470 1,026 (1,443) 41.6% Ordinary profit 2,610 1,179 (1,431) 45.2% Profit a

  3. Slide 3: Consolidated Operating Income by Company

    Consolidated Operating Income by Company (Million yen, %) Six months ended Six months ended August 20, 2022 August 20, 2021 (Ref.) Before application of Year-on-year Results Results the Accounting Standard for change (%) Revenue Recognition OKUWA 131,138 117,107 － 125,966 Hiramatsu 3,106 2,907 － 2,9

  4. Slide 4: Consolidated Ordinary Profit by Company

    Consolidated Ordinary Profit by Company (Million yen, %) Six months ended Six months ended August 20, 2022 August 20, 2021 Year-on-year Year-on-year Results Results change change (%) OKUWA 2,586 1,309 (1,276) 50.6% Hiramatsu (56) (31) 25 － OAK FOODS 35 40 4 113.7% Retail Backoffice 48 48 0 100.7% Su

  5. Slide 5: Consolidated Management Indicators

    Consolidated Management Indicators Six months ended Six months ended Six months ended August 20, 2020 August 20, 2021 August 20, 2022 Results Results Results Operating profit/Operating income (%) 3.01% 1.86% 0.85% Ordinary profit/Operating income (%) 3.10% 1.96% 0.98% Return on equity (ROE, %) 3.16%

  6. Slide 6: Consolidated Cash Flows

    Consolidated Cash Flows (Million yen) Six months ended Six months ended August 20, 2022 August 20, 2021 Results Results Year-on-year change Cash and cash equivalents at beginning 18,239 16,668 (1,570) of period Operating CF 4,883 4,127 (755) Investing CF (3,123) (3,911) (787) Financing CF (3,436) (3

  7. Slide 7: Non-consolidated P/L Statement

    Non-consolidated P/L Statement (Million yen, %) Six months ended Six months ended August 20, 2022 August 20, 2021 Year-on-year Year-on-year Results Results change change (%) Operating income 131,138 117,107 － － Net sales from direct 118,869 113,965 (4,905) 95.9% operation Gross profit 33,002 32,026

  8. Slide 8: Non-consolidated Net Sales from Existing Stores

    Non-consolidated Net Sales from Existing Stores (%) Net sales Number of Average sales Number of customers per customer Unit price per products product purchased Year-on-year change 97.5 96.6 101.0 97.8 103.2 (Fiscal year ended February 20, 2020*) 103.0 93.2 110.4 102.1 108.1 * Comparison among 141 s

  9. Slide 9: Non-consolidated Net Sales by Region

    Non-consolidated Net Sales by Region Six months ended (Million yen, %) August 20, 2021 Six months ended August 20, 2022 Year-on-year Year-on-year Results Results change for existing change (%) stores (%) Wakayama 35,397 34,681 98.0% 99.3% Nara 24,570 23,210 94.5% 96.3% Osaka 17,201 16,464 95.7% 95.7

  10. Slide 10: Non-consolidated Net Sales by Business Type

    Non-consolidated Net Sales by Business Type Six months ended (Million yen, %) Six months ended August 20, 2022 August 20, 2021 Year-on-year Year-on-year change Results Results change (%) for existing stores (%) SC 6,493 4,607 71.0% 100.1% SSM 55,426 54,182 97.8% 97.3% SM 4,648 4,088 88.0% 99.9% Regu

  11. Slide 11: Non-consolidated Net Sales by Department

    Non-consolidated Net Sales by Department (Million yen, %) Six months ended Six months ended August 20, 2022 August 20, 2021 Year-on-year Year-on-year change Results Results change (%) for existing stores (%) Fresh foods 49,888 47,820 95.9% 97.9% Processed 51,917 49,668 95.7% 96.7% foods Foods 101,80

  12. Slide 12: Non-consolidated Product Gross Profit Margin

    Non-consolidated Product Gross Profit Margin (%, % pt) Six months ended Six months ended August 20, 2022 August 20, 2021 Year-on-year change Results Results (% points) Fresh foods 32.5% 32.5% +0.0%pt Processed foods 22.7% 23.4% +0.7%pt Foods 27.5% 27.8% +0.4%pt Household supplies 28.2% 28.1% (0.1)%p

  13. Slide 13: Non-consolidated SG&A Expenses

    Non-consolidated SG&A Expenses Six months ended (Million yen, %) August 20, 2021 Six months ended August 20, 2022 Ratio to Year-on-year Year-on-year Ratio to Results Results net sales change change (%) net sales Net sales 126,418 100.0 111,062 － － 100.0% Selling expenses 1,929 1.5 966 － － 0.9% Perso

  14. Slide 14: Non-consolidated Capital Expenditures

    Non-consolidated Capital Expenditures (Million yen, %) Six months ended Six months ended August 20, 2022 August 20, 2021 Year-on-year Results Results Full-year plan change (%) New stores 1,010 762 75.5% 3,000 Existing stores, 2,712 2,199 81.1% 4,900 etc. Systems 330 401 121.3% 1,600 Construction 4,0

  15. Slide 15: Main Points of the Non-consolidated Operating Results

    Main Points of the Non-consolidated Operating Results (Main factors for sluggish performance) 1. Lower gross profit due to sluggish net sales Six months ended August 20, 2021: 33,002 million yen Six months ended August 20, 2022: 32,026 million yen Down 975 million yen 2. Higher utilities expenses du

  16. Slide 16: New Stores, Renovated Stores, and Closed Stores

    New Stores, Renovated Stores, and Closed Stores ■ New store: 1 Nakatsugawa Nakamura Store (Gifu, March 24, 2,459 m2) ■ Stores that underwent major renovation: 4 (Izumisano Shofudai Store) Kishiwada Hatsuta Store (Osaka, March 3) Pare Marche Nishikani Store (Gifu, April 9) Price Cut Matsusaka Oishi S

  17. Slide 17: Store Distribution

    Store Distribution (Number of stores as of August 20, 2022) Total by region Wakayama 29 7 3 2 41 Nara 22 5 5 1 33 Osaka 16 2 1 ー 19 Hyogo ー ー 1 ー 1 Kinki area 67 14 10 3 94 Mie 14 3 6 ー 23 Gifu 4 (PM: 1) 10 ー 1 (PM: 1) 15 Aichi 9 (PM: 4) 1 ー 2 (PM: 2) 12 Shizuoka 1 (PM: 1) 1 ー ー 2 Tokai area 28 15 6

  18. Slide 18: Revitalization of Existing Stores

    Revitalization of Existing Stores ● Key points of existing store renovation 1. More appealing products • Fishmonger's sushi • Scratch bakeries • A greater lineup of OKUWA brand products 2. Brand-new display fixtures • Reach-in showcases • A broader assortment of regular items with new gondola shelve

  19. Slide 19: OKUWA Brands (1) (1H Results)

    OKUWA Brands (1) (1H Results) ● Enhancement of OKUWA brand products Both the number of items and sales amount grew. Aim to further increase market share. Sales amount Year-on-year Number of Composition Brand (Million yen) change (%) items ratio (%) OKUWA Premium 3,640 117.4 169 3.2 OKUWA Marche 2,56

  20. Slide 20: OKUWA Brands (2) (Scratch Bakery)

    OKUWA Brands (2) (Scratch Bakery) ● Bolstering scratch bakeries’ competitiveness Differentiate from other stores by focusing on bread making methods, taste, and quality. Aim to attract new customers. ● Apple and Custard Baguette ● Setouchi Lemon-flavored Tartar Fish Burger ● The Serious Classic Burg

  21. Slide 21: OKUWA Brands (3) (SDGs-related Products)

    OKUWA Brands (3) (SDGs-related Products) ● Unta Fresh Shiitake Mushrooms ● A Gift Set of Unta Fresh Shiitake Mushrooms and Nita Rice Copyright © OKUWA Co., Ltd. All Rights Reserved. -21-

  22. Slide 22: OKUWA Brands (4) (SDGs-related Products)

    OKUWA Brands (4) (SDGs-related Products) ● AGARA Craft Beer Copyright © OKUWA Co., Ltd. All Rights Reserved. -22-

  23. Slide 23: Initiatives for Digital Transformation (DX) (1)

    Initiatives for Digital Transformation (DX) (1) ● Acquired a DX certification Under the DX certification initiative by the Ministry of Economy, Trade and Industry, OKUWA became a certified operator on May 1, 2022. In fiscal 2019, an internal project team (IT Strategy Promotion Project) was set up to

  24. Slide 24: Initiatives for DX (2)

    Initiatives for DX (2) ● Use of artificial intelligence (AI) Using forecast data for product ordering Prepare automated ordering data based on the predicted number of customers over the next 60 days Forecasting sales amount The system learns past sales results to forecast daily sales amount for each

  25. Slide 25: Initiatives for DX (3)

    Initiatives for DX (3) ● Cashless self-service cash registers Introduced cashless self-service cash registers to the Honsha Nakajima Store on a trial basis on February 17, 2022. (Benefits of introduction) • Greater convenience for consumers, faster check-out • Reduced workload for cash collection, a

  26. Slide 26: Sustainability Policy

    Sustainability Policy ● Revisions to the sustainability priority issues (materiality) Priority items Challenges Reduction of burdens to protect the environment • Respond to climate change (reduce GHG emissions) • Reduce food losses • Reduce environmental burdens Creation of appealing workplace where

  27. Slide 27: Environmental Initiatives (1) (UMIGOMI Zero WEEK)

    Environmental Initiatives (1) (UMIGOMI Zero WEEK) Copyright © OKUWA Co., Ltd. All Rights Reserved. -27-

  28. Slide 28: Environmental Initiatives (2)

    Environmental Initiatives (2) ● “Bottle-to-bottle” horizontal recycling Started “bottle-to-bottle” horizontal recycling at all of our 19 stores in Osaka Prefecture to collect and recycle used plastic bottles to make new plastic bottles. Copyright © OKUWA Co., Ltd. All Rights Reserved. -28-

  29. Slide 29: Environmental Initiatives (3)

    Environmental Initiatives (3) ● Plastic bottle volume reduction and collection system We installed the system at 20 stores to increase in-store collection efficiency of waste plastic bottles and promote resource circulation. Bottles collected in 1H (Mar. 1 – Aug. 31, 2022) 271,592 bottles 7,612 kg F

  30. Slide 30: Policies and Financial Results Forecast for 2H

    Policies and Financial Results Forecast for 2H Copyright © OKUWA Co., Ltd. All Rights Reserved. -30-

  31. Slide 31: New Initiatives for DX (1)

    New Initiatives for DX (1) ● Renewal of the online supermarket system After over 15 years since we began the online supermarket business in 2006, we will renew the system for greater customer convenience and sales expansion. New system to debut in November 2022 ■ Smartphone app Faster transaction sp

  32. Slide 32: New Initiatives for DX (2)

    New Initiatives for DX (2) ● Introduction of a facial recognition camera system A visitor detection system equipped with an AI-driven facial recognition engine has been introduced on a trial basis. In addition to crime/shoplifting prevention, we will consider using the system for sales promotion by,

  33. Slide 33: Initiatives for DX (Further Promotion)

    Initiatives for ＤＸ (Further Promotion) ● Smartphone cash registers (Shopimo Regi) First introduced to the Honsha Nakajima Store on April 1, 2022. Plan to introduce them to neighboring stores in 2H. By enhancing its recognition and utilization, we aim to increase customer convenience and efficiency o

  34. Slide 34: Contributions to Local Communities

    Contributions to Local Communities Copyright © OKUWA Co., Ltd. All Rights Reserved. -34-

  35. Slide 35: Initiatives for Environmental Conservation

    Initiatives for Environmental Conservation ● Eco-katsu (eco-friendly purchase) support points Special O-CARD points are given to customers who purchase eco-friendly products. OKUWA will remain committed to pursuing both “environmental friendliness” and “sales promotion.” Copyright © OKUWA Co., Ltd.

  36. Slide 36: Sustainability Policy

    Sustainability Policy ● Response to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations Set up an internal project with a target disclosure date of May 2023. We will contribute to the realization of a sustainable society by developing scenarios to combat risks associated w

  37. Slide 37: New Store / Renovated Store

    New Store / Renovated Store ● New store Date of Business type (directly- Store name Location opening operated sales floor area) MESA Iwade Store October 28 Iwade-shi, Wakayama MESA (2,989 m2) A core tenant of Forest Mall Iwade. The seventh opening of MESA, a high quality supermarket. Our goal is to

  38. Slide 38: Absorption-type Merger of a Consolidated Subsidiary

    Absorption-type Merger of a Consolidated Subsidiary ● Hiramatsu Co., Ltd. will be merged into OKUWA Co., Ltd. Merger agreement signed on: July 5, 2022 Merger to become effective on: November 21, 2022 (subject to change) (Hiramatsu Co., Ltd.) Operates 10 supermarkets mainly in Wakayama-shi. Regular s

  39. Slide 39: Financial Results Forecast

    Financial Results Forecast (Million yen, %) Initial plan (April 4) Revised forecast (September 28) Consolidated Forecast for Year-on-year Actual for Forecast for fiscal Year-on-year fiscal year ending fiscal year ended year ending change (%) change (%) February 20, 2023 February 20, 2022 February 20

  40. Slide 40: MESA Iwade Store (to open on October 28)

    ● MESA Iwade Store (to open on October 28) ■ Notes regarding handling of this material The plans, strategies, predictions of future business performance and business outlook of the Company described in this material rest on assumptions and beliefs determined based on information available to the Com

OKUWA — H1 FY2022 Earnings Presentation on 6ix