Japan Elevator Service Holdings Co., Ltd. · TSE:6544
Japan Elevator Service — H1 FY Mar 2025 Earnings Presentation
40 slides from Japan Elevator Service's earnings presentation, Nov 18, 2024
Slide 1: Financial Results Briefing for the Six Months of the FY Mar 2025
< Caution > This document is a translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail. Financial Results Briefing for the Six Months of the FY Mar
Slide 2: Management Review of the Six Months of the FY Mar 2025
2 Management Review of the Six Months of the FY Mar 2025 Copyright © japan elevator service holdings all rights reserved
Slide 3: Summary of the Six Months Results for the FY Mar 2025
Summary of the Six Months Results for the FY Mar 2025 3 Confirming Steady Progress in both Sales and Profit • Repair & Modernization • OP up 30% YoY, way above • Net profit increased as a continue to be strong sales growth result of growth in sales and • Continued growing as high • OP margin improve
Slide 4: Shareholder Return: Dividend Forecasts
Shareholder Return: Dividend Forecasts 4 Our shareholder return policy is based on a dividend payout ratio of at least 40% and aims for stable increases in EPS and DPS Dividend for the fiscal year is set at 30 yen (payout ratio 52.4%), an increase of 5 yen from the previous fiscal year due to fa
Slide 5: Domestic Maintenance Contracts
Domestic Maintenance Contracts 5 Elevators under maintenance contracts at the end of September 2024 was 107,710 units Net increase was record-breaking 7,480 units 107,710 The number of offices was 146 as of November 2024. New sales offices were established as we enter Yamaguchi and Saga. Showa
Slide 6: Progress of the Medium-term Management Plan
6 Progress of the Medium-term Management Plan Copyright © japan elevator service holdings all rights reserved
Slide 7: Medium-term Management Plan: VISION2027
Medium-term Management Plan: VISION2027 7 Basic Strategy Key Indicators Raise corporate value through growth, • As a company qualified for the TSE Prime Market, we aim to achieve sustainable growth and increase corporate value, prosper together with all stakeholders adapting to changes in the so
Slide 8: Progress of the Medium-term Management Plan: Business Growth
Progress of the Medium-term Management Plan: Business Growth 8 Establishing a business base to sustain net growth of more than 10,000 units per year by expanding coverage and increasing density Expand into new areas , increase market share in existing areas Improve quality, expand network of o
Slide 9: Progress of the Medium-term Management Plan: Profitability
Progress of the Medium-term Management Plan: Profitability 9 Mar Mar Mar Mar 2022 2023 2024 2025 1H Operating profit margin Average number of contracts (A) 73,230 83,820 94,430 103,970 20% in FY Mar 2027 （ before amortization of goodwill） Average number of technical personnel (B) ※ 942 1,050 1,128 1
Slide 10: Financial Review of the Six Months Results and FY2025 Earnings Forecasts
10 Financial Review of the Six Months Results for the FY Mar 2025 and FY 2025 Earnings Forecasts Copyright © japan elevator service holdings all rights reserved
Slide 11: Summary of the Six Months Results for the FY Mar 2025
Summary of the Six Months Results for the FY Mar 2025 11 Steady progress in both sales and profits, with a 17% increase in sales and a 30% increase in profits YoY The increase of net sales was due to higher maintenance sales resulting from an increase in the number of maintenance contracts, as wel
Slide 12: Factors for Change in Operating Profit
Factors for Change in Operating Profit 12 (Millions of yen) Increase Decrease 7,000 6,000 -924 -571 5,000 3,377 -415 -79 -465 4,000 -194 3,000 2,000 3,926 3,005 1,000 0 2Q Mar 2024 Net sales Material cost Labor cost Outsourcing Depreciation Others 2Q Mar 2025 cost Copyright © japan elevator service
Slide 13: FY2025 Financial Forecasts (Summary)
FY2025 Financial Forecasts (Summary) 13 Earnings forecast unchanged as steady progress confirmed, full-year dividend forecast is now set 30 yen per share Stable growth in Maintenance & repair services due to strong net increase in contracts and Modernization services is also expected to grow in te
Slide 14: Capital Expenditures and Depreciation Forecasts
Capital Expenditures and Depreciation Forecasts 14 (Billions of yen) FY2024 (Actual) FY2025 (Forecast) Items C a p i t a l Investments related to PRIME, a Expenditure 2.39 2.06 remote inspection service, etc. Depreciation 1.40 1.70 Capital Expenditures and Depreciation (Billions of yen) 4.00 3.65 3.
Slide 15: Cash Flow Management
Cash Flow Management 15 Sharing free cash flow with stakeholders for sustainable growth Capital investment peaked in FY 2023 and then begin to decline Free cash flow should be on an upward trend due to business expansion as number of maintenance contracts increases and improve profitability EBIT
Slide 16: Medium-term Management Plan VISION 2027
16 Medium-term Management Plan “VISION 2027” Copyright © japan elevator service holdings all rights reserved
Slide 17: Medium-term Management Plan: VISION2027
Medium-term Management Plan: VISION2027 17 Basic Strategy Key Indicators Raise corporate value through growth, • As a company qualified for the TSE Prime Market, we aim to achieve sustainable growth and increase corporate value, prosper together with all stakeholders adapting to changes in the s
Slide 18: Elevator Maintenance Market in Japan
Elevator Maintenance Market in Japan 18 Elevator maintenance market in Japan: There are an estimated 1.1 million elevators Year ended March 2024 VISION2027 installed & maintained 1-2% annual growth to 1.2 million in Mar 2027 Five OEMs* and affiliated companies handle Independent, Independent,
Slide 19: Growing Demand for Modernization
Growing Demand for Modernization 19 Number of New Elevators Installed in Japan (units) 50,000 45,000 New elevator construction was high 40,000 These elevators are over 20 years old in operation 35,000 Parts supply by OEMs is also being phased out 30,000 25,000 20,000 15,000 10,000 5,000 0 1970
Slide 20: VISION2027: Profitability Scenario
VISION2027: Profitability Scenario 20 Reconciliation of 60 billion yen in Net Sales and Operating Margin of 20% with Growing Maintenance Contracts 1. Achieve net sales of 60 billion yen by expanding the market and increasing share in Japan As of March 31, 2024, our domestic maintenance market shar
Slide 21: VISION2027: Balance Sheet Management
VISION2027: Balance Sheet Management 21 Capital Expenditures Peaking and Positive FCF Trend Expected The Company Aims for a Strong Balance Sheet Trends in EBITDA, free cash flow, and growth investment Capital expenditures peaked in FY2023, and 15 (billions of yen) after the completion of the JIK i
Slide 22: About Us
22 About Us Copyright © japan elevator service holdings all rights reserved
Slide 23: Corporate Data
Corporate Data 23 Company Name Japan Elevator Service Holdings Co., Ltd. Established October 3, 1994 Listed Market TSE Prime Market (6544) since April 4, 2022 Tokyo Tatemono Nihonbashi Bldg. 5F, 1-3-13 Nihonbashi, Headquarters Chuo-ku, Tokyo 103-0027 CEO Katsushi Ishida (Born on March 25, 1966) Numb
Slide 24: Corporate Philosophy
Corporate Philosophy 24 Safety Above Anything Else Safety is our lifeblood above anything else We are committed to monitoring 24 hours a day, 365 days a year No Cutting Corners We do not cut corners because people don’t see, and we work for safe operation Building on Trust Building relationships of
Slide 25: Our Business: (1) Maintenance & Repair
Our Business: (1) Maintenance & Repair 25 Maintenance 1 Legal inspection stipulated in the Building Standards Act Services 2 Periodic inspection (cleaning, oiling, adjustment, replacement of consumables, etc.) 3 Monitoring services (including examination, remote monitoring, and remote inspection for
Slide 26: Our Business: (2) Modernization
Our Business: (2) Modernization 26 Modernization The legal depreciable life of a lift is 17 years. The Life Cycle Cost Assessment Index Services planned service life proposed by the Building Maintenance and Preservation Association is 25 years For some models, the OEM may stop supplying parts, s
Slide 27: Quick Renewal
Quick Renewal 27 Quick Renewal enables flexible modernization reflecting customer needs Major components are One time modernization replaced in stages, significantly reducing construction time and 1 costs 2 Replace control panel only Phase 1 (Compatible with 16 models) Construction period: 1 day Pha
Slide 28: More Service Options: Escalators
More Service Options: Escalators 28 Escalators account for 5% of maintenance contracts and are expected to increase along with the increase in maintenance contracts Established organization to train technical staff specialized in escalators to improve service quality Commence renewal support f
Slide 29: LiftSPOT
LiftSPOT 29 LiftSPOT is a service that combines digital signage with security cameras, helping prevent crime in elevators while providing a display for advertising and other content (patent acquired for security camera with ad display function) Audio-enabled digital signage media for elevators,
Slide 30: Promotion of Refurbished Parts
Promotion of Refurbished Parts 30 Refurbished parts are products collected during parts replacement, then repaired and refurbished Components that pass our QA testing are certified as JES Authorized Refurbished Parts JES Group is focusing on obtaining recycled parts and promoting growth in the refur
Slide 31: JES Innovation Center Kansai (JIK)
JES Innovation Center Kansai (JIK) 31 JES Innovation Center Kansai (JIK) should add 100 per months capacity Logistics in western Japan region expedited with lower costs Highly evaluated as an energy-efficient building Strong BCP system including redundant control center (CRC) 3,000 Moderniza
Slide 32: Making Entry in Southeast Asia Market
Making Entry in Southeast Asia Market 32 Japan Elevator Service Hong Kong Company Japan Elevator Service India Private Limited Limited Established in Feb 2016 In Jul 2014 the Company established vehicle for research and investment in SE Asia Acquired 51% interest in Unieco of Vietnam in Nov 2021 Acq
Slide 33: Overseas Business Update
Overseas Business Update 33 Business Conditions at ASEAN Subsidiaries Remained Strong Since Becoming a JES Group Dispatched Japanese technical personnel to subsidiaries in Indonesia and Vietnam, which engage in the elevator business, to improve quality Promote training system conducted in Japan
Slide 34: References
34 References Copyright © japan elevator service holdings all rights reserved
Slide 35: Growth in Net Sales
Growth in Net Sales 35 Net sales of 42.2B 17% CAGR (annualized) for the FY Mar 2024 47.0 3.4% 42.2 33.8% 34.9 29.7 62.8% 24.5 21.3 Maintenance & repair Modernization Other 17.9 15.3 13.5 11.8 10.4 Sep Sep Sep Sep Sep Sep Sep Sep Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar 2006 2007 2008 2009 201
Slide 36: Growth in Domestic Maintenance Contracts
Growth in Domestic Maintenance Contracts 36 15% CAGR 107,710 107,710 100,230 elevators under maintenance contracts at the end of September 2024 88,630 Listed 79,000 Listed TSE Mothers TSE 1st section 67,500 54,800 48,800 43,400 38,800 35,800 Release of “PRIME” 32,200 remote inspection system 28,700
Slide 37: Ensuring Sustainable Business
Ensuring Sustainable Business 37 Strengthening efforts to maintain Promotion of Good Working E S the environment Environment Aggregate greenhouse gas emissions throughout the Expansion of allowances due to revision of the supply chain personnel system (e.g. housing allowance) Examine long-term
Slide 38: Financial Highlights (1/2)
Financial Highlights (1/2) 38 Net sales Operating profit (Millions of yen) (Millions of yen) 6,821 42,216 34,907 5,010 29,751 4,113 24,521 3,612 21,339 17,900 2,717 15,326 13,544 2,034 1,351 611 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024 Mar 2017 Mar 2018 Mar 2019 Mar 20
Slide 39: Financial Highlights (2/2)
Financial Highlights (2/2) 39 Net assets / Total assets (Millions of yen) Net assets Total assets 32,539 29,002 25,338 20,473 16,789 14,297 11,484 13,678 10,624 11,756 10,505 7,848 3,937 5,177 2,072 2,870 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024 Net assets per share Ea
Slide 40: Disclaimer and Caution Concerning Forward-looking Statements
Disclaimer and Caution Concerning Forward-looking Statements 40 Disclaimer Japan Elevator Service Holdings (the “Company”) has prepared these materials for your reference, so that you may understand the current status of the Company. While these materials have been prepared based on generally-kn
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