Autobacs Seven Co., Ltd. · TSE:9832
Autobacs Seven — H1 FY March 2017 Earnings Presentation
48 slides from Autobacs Seven's earnings presentation, Nov 1, 2016
Slide 1: Results for the Six Months Ended September 30, 2016
【Reference】 Translation ANALYST MEETING Results for the Six Months Ended September 30, 2016 November 1, 2016 Kiomi Kobayashi, CEO, President AUTOBACS SEVEN CO., LTD.
Slide 2: 1. Results for the First Six Months Ended September 30, 2016
１．Results for the First Six Months Ended September 30, 2016 2
Slide 3: Financial Results (the First Half of FY March 2017)
Financial Results (the First Half of FY March 2017) (Billion Yen) Six months ended September 30, 2016 Six months ended Actual YoY change Change from September 30, Initial Forecast results ratio forecast 2015 Net sales 100.6 94.8 -3.9% -5.7 98.6 Gross margin 32.9 30.6 -4.5% -2.2 32.1 Gross margin rat
Slide 4: Review of the First Half
Review of the First Half of FY March 2016 1. Continued weak demand for automotive goods and services due to the impact of poor sales of light motor vehicles 2. Statutory safety inspection and maintenance affected by the decrease in the number of automobiles to undergo statutory safety inspections 3.
Slide 5: Consolidated Sales by Merchandize
Consolidated Sales by Merchandize (Billion Yen) Consolidated Sales by Merchandize 120 98.6 94.8 100 7.2 6.7 7 Others 3.5 6.9 80 3.7 Car Purchase & 60 Sales Statutory Inspection Sevices 40 80.8 77.2 Car Parts & Accessories 20 0 1H FY March 2016 1H FY March 2017 5
Slide 6: Segment Information
Segment Information (Million Yen) Six months Six months YoY Initial % to ended Sep 30, ended Sep 30, Change Forecast Forecast 2016 2015 Net sales 70,868 75,144 -5.7% 76,100 -6.9% Non-consolidated Operating income 1,678 3,515 -52.3% 3,200 -47.6% Net sales 31,263 32,315 -3.3% 33,300 -6.1% Domestic sto
Slide 7: Segment Analysis for Operating Income
Analysis for Operating Income Domestic Retail sales Total store basis: -2.6% Same store basis: -4.2% Operating income (Billion yen) Amount Major drivers of variance (yoy) Non-consolidated 1.67 -1.83BY Net sales: -4.27BY (-5.7%) Gross Profit: -1.40BY (20.3% (1H of last year 21.0%)) ・Wholesale sales a
Slide 8: Performance by Overseas Subsidiaries
Performance by Overseas Subsidiaries FRANCE THAILAND SINGAPORE CHINA MALAYSIA Number of stores at Sep. 30, 2015 -including FC 11 8 2 0 5 stores- 1st Half 1st Half 1st Half 1st Half 1st Half 1st Half 1st Half 1st Half 1st Half 1st Half FY FY FY FY FY FY FY FY FY FY Period March March March March Marc
Slide 9: Domestic Retail Sales
Domestic Retail Sales Retail sales including FCs*: 119.1 billion Yen (-2.6% YoY) (Billion Yen) 150 Fuel & second-hand goods: 122.3 119.1 2.1 billion Yen (+1.0% YoY） 2.1 Statutory safety inspection : 8.5 2.1 8.6 8.6 billion Yen (+1.4% YoY) 12.6 100 13.6 296 thousand cars (+0.1% YoY) Number of fully c
Slide 10: Sales Trend: Retail, Wholesale and Store Inventory
Sales Trend: Retail, Wholesale and Store Inventory YoY change for the last 12 months （%） 30.0 Wholesale Retail Increase in demand for 20.0 merchandise for winter due to snow 11.5 10.0 5.5 1.4 1.4 -0.8 0.2 -0.4 0.0 -4.1 -4.4 -5.0 -3.9 -0.6 -5.5 -2.3 -2.9 -5.5 -6.1 -8.3 -10.0 -8.8 -10.0 -9.8 -10.1 -16
Slide 11: Sales Ups & Downs by Merchandise (1st Half)
Sales Ups & Downs by Merchandise (1st Half) 【Same Store Basis】 Sales: -4.2% YoY, Number of customers: -5.6% YoY Retail sales ups and downs by merchandise category (First half of March 2016, YoY change in amount, total store basis) (Million Yen) 200 78 14 0 Car Leisure -5 (excl. Inspections/ Services
Slide 12: Measures Implemented in the First Half
Measures Implemented in the First Half Automotive goods and services ・Expansion of line-up of private brand "AQ" Introduction category: floor mat, cushion, seat cover, sun visor In the second half, expansion of accessories, maintenance goods and others ・Sales expansion of car video cameras Amount (Y
Slide 13: Initiatives for Customer Voice Program
Initiatives for Customer Voice Program Program for gathering frank opinions from customers visiting stores by using a questionnaire for the improvement of operations, merchandise, marketing, facilities, etc. Link on purchase receipt to the Report on collected opinions (example) site for the question
Slide 14: Expanding Product Category of PB AQ. (AUTOBACS Quality)
Expanding Product Category of PB AQ. (AUTOBACS Quality) Interior mat of three dimensional shape Smoked sun visor does not （Launched in May 2016） hinder visibility （Launched in August 2016） Fake leather cushion Waterproof seat cover （Launched in April 2016） （Launched in July 2016） 14
Slide 15: E-commerce
E-commerce Sales via internet site (1st half FY March 2017) 1.09 billion Yen (YoY -22.0%） [Sales by distribution channel] [Sales by contact point] Delivered at stores（Store sales) Company website : 71% ：0.73 billion Yen（YoY -11.1%） Internet shopping mall: 29% Direct delivery to customers ：0.36 billi
Slide 16: Oil Change / Statutory Safety Inspections: Appointments
Oil Change / Statutory Safety Inspections: Initiatives implemented for appointments made via website/telephone Results of Oil change appointments (Number) The number of Oil change for appointments (H1 March FY2017) 200,000 made via website/telephone 150,000 Approximately 160,000 (YoY +55%) 100,000 P
Slide 17: Automobile purchase and sales (1)
Automobile purchase and sales (1) Commercial flow of car purchase and B2B sales (No. of cars denotes cumulative units for the six months ended Sep. 30, 2016) FC Headquarters Sales by auction Appraisal and consigned to FC purchase Headquarters Used car dealers 1,030 cars Auto auctions Customers 6,570
Slide 18: Automobile purchase and sales (2)
Automobile purchase and sales (2) Commercial flow of retail sales (No. of cars denotes cumulative units for the six months ended Sep. 30, 2016) New car dealers New car dealers Auto auctions Used car dealers Auto auctions Procurement Procurement FC Headquarters Customers Purchase & Wholesale Inventor
Slide 19: CAPEX and Depreciation
CAPEX and Depreciation CAPEX Depreciation （Billion Yen） （Billion Yen） 9 7 8 7.69 6 7 49.2 62.5 6.12 58.9 5 6 4.50 4.42 4.57 4.30 4.60 38.4 5 4.81 4 4 3 3 2 2 2.74 2.05 （H1） （H1） 1 1 0 0 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3 2012/3 2013/3 2014/3 2015/3 2016/3 2017/3 （E） （予） 19
Slide 20: Progress of New Store Openings
Progress of New Store Openings Location Owner Store name (Prefecture) of store Opening date 1 AUTOBACS OSAWANO Store Toyama FC April 23, 2016 2 AUTOBACS Used Car Purchase Store MATSUBARA Tokyo RC May 26, 2016 3 AUTOBACS SATOSHO Store Okayama FC June 24, 2016 4 AUTOBACS Used Car Purchase Store KOGANE
Slide 21: Overseas Business
Overseas Business New store openings AUTOBACS CHARAN Store AUTOBACS LAT PHRAO 101 Store in Thailand in Thailand (Opened on May 27) （Opened on July 22） Capital alliance/business partnership Wholesale of tires and manufacturing/distribution of appliances for maintenance of automobiles in Malaysia Star
Slide 22: Shareholders Return
Shareholders Return Dividends per share Dividends and share buyback (Yen) (Billion Yen) 12 80 10 60 8 5.05 5.25 30 30 30 6 40 １０ 0.00 4 20 5.19 5.04 4.95 30 30 30 2 0 0 March 2015 March 2016 March 2017 (E) March 2015 March 2016 March 2017 (E) 1st Half 2nd Half Amount of share buyback Dividend paid A
Slide 23: 2. Forecast of FY March 2017 and Measures for the Second Half
２．Forecast of FY March 2017 and Measures for the Second Half of FY March 2017 23
Slide 24: Expectations for the business environment in the 2nd Half
Expectations for the business environment in the 2nd Half Business Environment Positive factors ・Increase in the number of automobiles subject to statutory safety inspections and recovery of demand for statutory safety inspections ・Reaction to a decrease in demand for winter goods due to warm weathe
Slide 25: Financial Forecasts of FY March 2017
Financial Forecasts of FY March 2017 Revision of sales and profits for the second half due to a last-minute surge in demand upon the postponement of the consumption tax hike expected at the beginning of the period Aiming to increase store sales by investing in costs to achieve stronger sales (Billio
Slide 26: Initiatives of AUTOBACS Business for Second Half
Initiatives of AUTOBACS Business for Second Half Major initiatives Car parts and ・Focus on tires to secure sales in the demand season accessories ⇒Inventory, store and sales system in accordance with changes in demand, including the weather ・Increase in points of contact with customers through aggre
Slide 27: 3. Next Mid-term Business Plan
３．Next Mid-term Business Plan 27
Slide 28: Activities After New President Took Office
Activities After New President Took Office Ceremony for launch of new system with participation Meeting for dialogue with employees at all bases of franchisee corporations (July 6) 24-Hour Marathon Race in Maishima, Osaka (July 16-17) 28
Slide 29: Next Mid-Term Business Plan (draft)
Next Mid-Term Business Plan (draft) Period April 2017 to March 2020 (3 years) Management targets To be determined Ideal direction of "Offering customers a more enjoyable and abundant the Company life with automobiles" (tentative) Domestic AUTOBACS Business "Development of new markets and business mo
Slide 30: Recognition of Domestic Environment for Sales of Automotive Goods and Services
Recognition of Domestic Environment for Sales of Automotive Goods and Services Sales in domestic stores (by merchandise) Comparison with sales 10 years ago （Million Yen) Total -18.5％ 300,000 282,912 Others -4.2％ 230,557 Motor sports goods -45.9％ 200,000 Accessories, Maintenance - 24.5％ Oil, Battery
Slide 31: Recognition of Domestic Environment: Major Changes and Issues
Recognition of Domestic Environment for Sales of Automotive Goods and Services Major changes in the past 10 years ・ Aging of customers and alienation of young people in terms of automotive goods and services; less attractive automotive goods and services ・ Relatively stable demand for tires/wheels a
Slide 32: Domestic AUTOBACS Business: Creation of New Markets
Domestic AUTOBACS Business: Creation of New Markets Comprehensive service for automobiles Proposal for fun in Existing life with AUTOBACS New merchandise / automobiles (⇒strengthening of service revenue) Automotive goods and Goods for safety Merchandise that services support, increases fun in Mercha
Slide 33: Development of New Markets for Automotive Goods and Services
Development of New Markets for Automotive Goods and Services Support for safe driving Merchandise related to IoT Merchandise that responds to increased interest in safety technologies Monitor for dozing off "Hitomi-chan" (Examples) ・ Equipment to prevent dozing off/looking aside while driving ・ Equi
Slide 34: Offering Added Value through Comprehensive Automobile Services
Offering Added Value through Comprehensive Automobile Services Automobile Oil Sales/installation Tires Body work Statutory purchases and of car navigation & paint safety sales devices/audio inspections/m systems aintenance Omni channel strategy of AUTOBACS Group Acceptance of statutory Store safety
Slide 35: Issues in Statutory Safety Inspections, Car Purchases and Sales
Issues in Statutory Safety Inspections, Car Purchases and Sales 1. Promotion of prompt statutory safety inspections ・ Introduction of AUTOBACS statutory safety Statutory inspections safety inspections ・ Change of store operations 2. Development and retention of mechanics 1. Securing of good-quality
Slide 36: Strengthening of Existing Revenue Base (New Initiatives)
Strengthening of Existing Revenue Base (New Initiatives) Marketing 1. Restructure of the membership system from a 2. Analysis of driver information and utilization for marketing customer (through the joint venture with Culture Convenience Club Co., Ltd.) perspective Business model offering value to
Slide 37: Strengthening of Existing Revenue Base: Restructure of Stores
Strengthening of Existing Revenue Base (New Initiatives) Restructure of 1. Closure of unprofitable stores stores/ 2. Consolidation of the area management system channels 1. Review and standardization of operations and business 2. Change to maintenance-based profit structure Restoration of existing s
Slide 38: Overseas Business and New Business
Overseas Business and New Business Overseas Business 1. Increase in profitability in France 2. Strengthening of business expansion in the Thailand ASEAN region SIAM Group Philippines Motech Group ・ Strengthening of relationships with local companies Malaysia Kit Loong Group ・ Increase of store openi
Slide 39: Today's Message
Today’s Message • Decrease in both net sales and income in the first half due to a drop in demand for automotive goods and services arising from poor sales of light motor vehicles despite efforts to improve gross profit and cut selling, general and administrative expenses • Aim to grow profits in th
Slide 40: APPENDIX
APPENDIX 40
Slide 41: Quarterly P/L (1st Half of FY March 2017)
Quarterly P/L (1st Half of FY March 2017) (Million Yen) 1st Quarter of FY 2017 2nd Quarter of FY 2017 1st Half of FY 2017 Result YoY Result YoY Result YoY Net sales 47,549 -3.1% 47,271 -4.7% 94,820 -3.9% Gross margin 14,858 -5.4% 15,794 -3.7% 30,653 -4.5% % of Sales 31.2% － 33.4% － 32.3% － SG&A 14,6
Slide 42: Consolidation Adjustments
Consolidation Adjustments Consolidation Adjustments (Million Yen) Six months ended Six months ended September 30, 2016 September 30, 2015 Operating Income for segment total 691 2,596 Elimination of Intersegment transaction (Income of subsidiaries for supporting functions, -202 -355 etc.) Inventories
Slide 43: Analysis of Income statements (1st Half of FY 2017)
Analysis of Income statements (1st Half of FY 2017) Non-consolidated -3.99 BY ↑ Fuel, inspection services, overseas, etc. Net sales Wholesale -5.7% ↓ Tires and wheels, accessories, maintenance parts, etc. 70.8 BY -0.14 BY ↑ Car sales YoY: -4.27 BY Retail -5.2% ↓ E-commerce, statutory inspection serv
Slide 44: Balance Sheet: Assets
Balance Sheet: Assets Total Assets Total Assets 180.4 BY 173.1 BY (Billion Yen) Major items changed 37.0 Cash and deposits 34.3 Trade notes & Dividends 19.6 account receivables 20.7 9.7 Inventories 8.9 17.2 Accounts dues 17.1 24.0 Other 19.8 current assets Increase in machinery and equipment and veh
Slide 45: Balance Sheets: Liabilities and Equity
Balance Sheets: Liabilities and Equity Total Liabilities & Equity 180.4BY 173.1BY Accounts payables (Billion Yen) 13.8 Short-term 2.4 borrowings 13.3 Major items changed 19.2 Other short-term 3.0 2.3 liabilities 15.3 10.8 Long-tem 1.5 10.6 borrowings Other long-term liabilities Retained earnings: -7
Slide 46: Store Openings and Closings (Plan)
Store Openings and Closings (Plan) Fiscal year ending March 31, 2017 Domestic 1st Half (result) No. of stores 2nd Half (Plan) (Plan) No. of stores as of No. of stores stores as of March S/B・ September S/B・ as of March New Close New Close 31, 2016 R/L 30, 2016 R/L 31, 2017 AUTOBACS 498 +2 +1/-1 -7 49
Slide 47: Performance Results of Franchisees
Performance Results of Franchisees Ordinary Income of Franchise Companies (Preliminary) (Billion Yen) 2.0 0.0 -2.0 -1.88 -2.72 -2.74 -4.0 -3.13 Total of profit-making FCs Total of profit-making subsidiaries -6.0 Total of loss-making FCs -5.89 Total of loss-making subsidiaries Orginary income(net) -8
Slide 48: 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
Autobacs Seven — H1 FY March 2017 Earnings Presentation on 6ix