Edion Corporation · TSE:2730
Edion — FY2019 Earnings Presentation
29 slides from Edion's earnings presentation, May 14, 2020
Slide 1: EDION Corporation Analyst Meeting FY03/20
EDION Corporation Analyst Meeting FY03/20 May 14, 2020 © EDION Corporation
Slide 2: Combating COVID-19: EDION's Mission
Company activities Combating COVID-19 EDION’s Mission We respectfully offer our sympathies to all those suffering from the novel coronavirus disease (COVID-19). • We will support the lives of everyone by providing exceptional services and products to our customers. • We hold the safety of our employ
Slide 3: Measures Against COVID-19
Company activities Measures Against COVID-19 Giving first priority to preventing spread of COVID-19 for the safety of our customers, partners, employees, and their families. [As of April 30] [Situation in April] ●Temporary closure of 54 stores, shortened business hours at 376 stores Same-store sales
Slide 4: Consolidated Statements of Income
Results Consolidated Statements of Income FY03/19 FY03/20 Million Yen, % Forecast % of Sales Results % of FY03/17 % of Sales Results % of FY03/18 % of Forecast (Revised in 2H) Net Sales 100.0 718,638 104.7 100.0 733,575 102.1 750,000 97.8 Gross Profit 29.2 209,820 105.9 28.7 210,605 100.4 219,295 96
Slide 5: FY03/20 Net Sales
Results FY03/20 Net Sales ●Q1 Loyalty point promotions and contributions from the Namba Main Store and Hiroshima Main Store secured sales growth of 13.5 billion YoY. ●Q2 Despite cool weather in July, rush demand before the consumption tax hike boosted sales by 30.7bn YoY. ●Q3 Reciprocal decline foll
Slide 6: Net Sales at Edion-Owned Chains (POS Basis)
Results Net Sales at Edion-Owned Chains (POS Basis) Same-Store POS Sales for Edion-Owned Chains (% of Year-Earlier Level) 99.9% of full-year FY03/19 108.5% of Q1 FY03/19 112.6% of Q2 FY03/19 85.6% of Q3 FY03/19 92.9% of Q4 FY03/19 Rush Demand COVID-19 Warm Winter Cool Reciprocal Summer Decline Apr.
Slide 7: YoY Comparisons of Sales for Five Major Products
YoY Comparisons of Sales for Five Major Products Results Pre- and Post-Tax Hike Previous tax hike Most recent tax hike (2014) (2019) TVs, Air Conditioners, Refrigerators, Washing Machines, PCs Impact of COVID-19 6 mo. 5 mo. 4 mo. 3 mo. 2 mo. 1 mo. 1 mo. 2 mo. 3 mo. 4 mo. 5 mo. 6 mo. before before be
Slide 8: Net Sales by Product
Results Net Sales by Product POS Sales for Edion-Owned Chains (% of Year-Earlier Level) (%) Q2 Q4 Product April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. March Total Total TVs 103.3 105.8 127.2 126.4 140.9 196.2 135.9 86.4 86.4 87.9 99.5 116.6 99.4 113.3 Cool Warm summer winter Air 109.0 123
Slide 9: Factors Affecting Net Sales by Product
Results Factors Affecting Net Sales by Product (YoY Comparisons) (100 Million Yen) +31 7,335 PCs +101 +57 Mobile Phones -68 +149 +26 +41 -6 7,186 TVs +57 +34 Refrigerators Video appliances/ Cameras -18 Washing Machines/ +35 Vacuum Cleaners Air Conditioners -50 FY03/19 Audio-Visual Home Information H
Slide 10: Gross Profit Margin
Results Gross Profit Margin Gross Profit Margin by Quarter Sales Composition FY03/19 FY03/20 FY03/19 FY03/20 FY03/21 (plan) Audio-Visual Equipment 12.1% 12.5% Home Appliances (Air 10.9% 10.0% Conditioners) Home Appliances (Other) 32.9% 32.8% Information Appliances 14.1% 15.1% (PCs, etc.) Information
Slide 11: SG&A Expenses (Cumulative)
Results SG&A Expenses (Cumulative) FY03/19 FY03/20 Million Yen Results Results YoY Change Plan Change vs. Plan Total SG&A Expenses 191,977 198,321 6,343 200,995 -2,674 Advertising Expenses & Selling 55,159 56,466 1,307 58,918 -2,451 Expenses (Of which, Loyalty Point Promotion (9,618) (12,875) (3,256
Slide 12: SG&A Expenses (Q4 alone)
Results SG&A Expenses (Q4 alone) FY03/19 FY03/20 Million Yen Results Results YoY change Plan Change vs. Plan Total SG&A Expenses 47,720 44,257 -3,463 46,637 -2,379 Advertising Expenses & Selling 13,402 9,266 -4,136 11,331 -2,064 Expenses (Of which, Loyalty Point Promotion (2,762) (1,145) (-1,617) (1
Slide 13: SG&A Expenses
Results SG&A Expenses (100 Million Yen) SG&A SG&A SG&A-to- plan actual sales ratio YoY comparisons of Q3 and Q4 (excl. increase at Namba and Hiroshima stores) (100 Million Yen) FY03/19 FY03/20 Q3 Q4 FY03/16 FY03/17 FY03/18 FY03/19 FY03/20 ● In FY03/20, SG&A expenses were reduced by JPY2.6bn in 2H ●
Slide 14: Factors in YoY Change in Ordinary Profit
Results Factors in YoY Change in Ordinary Profit (100 Million Yen) +7 -63 +0.4 Increase in Gross Profit +7 ・Rise in Net Sales +43 ・Fall in GPM -35 188 133 Increase in SG&A Expenses +63 ・Advertising and Selling +13 ・Personnel +10 ・Equipment & Administrative +26 ・Depreciation +12 FY03/19 Gross Profit
Slide 15: Unexpected factors in 2H
Results Unexpected factors in 2H YoY Orders for Air Conditioners and Heaters YoY Orders at All Stores and Existing Stores ACs Heaters All Existing Oct. Nov. Dec. Jan. Feb. Mar. Jan. Feb. Mar. 161億円 ●Impact of the spread of COVID-19 188億円 ●Impact of the warm winter ・Orders recovered to over 100% YoY
Slide 16: Consolidated Balance Sheet (Assets)
Results Consolidated Balance Sheet (Assets) Million Yen March 31, 2019 March 31, 2020 Change Current Assets 152,436 153,296 +860 Cash & Cash Equivalents 9,035 15,974 +6,938 Accounts Receivable - Trade 36,339 33,666 -2,672 Inventories 96,686 91,286 -5,400 Non-Current Assets 203,511 196,727 -6,783 Pro
Slide 17: Consolidated Balance Sheet (Liabilities & Net Assets)
Results Consolidated Balance Sheet (Liabilities & Net Assets) Million Yen March 31, 2019 March 31, 2020 Change Liabilities 177,775 169,623 -8,152 Notes and Accounts Payable - Trade 31,139 34,434 +3,294 Short-Term Borrowings 1,040 70 -970 Long-Term Borrowings & Bonds Payable 59,594 56,924 -2,670 Leas
Slide 18: Total Asset Turnover & Inventory Turnover
Results Total Asset Turnover & Inventory Turnover Total Asset Turnover Inventory Turnover FY03/15 FY03/16 FY03/17 FY03/18 FY03/19 FY03/20 FY03/15 FY03/16 FY03/17 FY03/18 FY03/19 FY03/20 ● Total Asset Turnover ・Steadily recovered from FY2017 to surpass 2% ● Inventory Turnover ・Greatly improved YoY as
Slide 19: Impairment loss
Results Impairment loss (100 Million Yen) Impairment loss 7.3 from the sale of land FY03/16 FY03/17 FY03/18 FY03/19 FY03/20 ● Showing a downward trend due to improvement in earnings ● In FY03/20, the impairment loss associated with a decision to sell land was JPY730mn, but otherwise impairment loss
Slide 20: Profit Levels & ROE
Results Profit Levels & ROE (100 Million Yen) Ordinary profit Profit ROE ROIC (%) FY03/16 FY03/17 FY03/18 FY03/19 FY03/20 *Excluding the impact of deferred tax assets: -JPY900mn in FY03/16, +JPY5.8bn in FY03/17 **Calculation formula: ROE = Profit ÷ Average Shareholders’ Equity ROIC = Operating Profi
Slide 21: Overview of Store Openings
Results Overview of Store Openings Change in the Number of Stores (April 2019 through March 2020) Relocated/ FY03/19 Newly Opened Closed Change FY03/20 Remodeled Home Electrical 395 6 3 -5 +1 396 Appliance Stores Non-Home Electrical 41 1 0 -5 -4 37 Appliance Stores Total Edion-Owned 436 7 3 -10 -3 4
Slide 22: Points of Consideration in the FY03/21 Plan
Plan Points of Consideration in the FY03/21 Plan 1. Gross Profit Margin 2. Impact of COVID-19 • 28.8% (+0.1% YoY) • Expected to be under control by the end of June • Policy of giving importance to seasonal and lifestyle products (air conditioners, refrigerators, • Net sales for April fell 15% YoY du
Slide 23: Points of Consideration in the FY03/21 Plan (Reference)
Plan Points of Consideration in the FY03/21 Plan (Reference) Estimated Industry Demand (YoY) GfK: 98.6% Kaden Biz: 97.7% *Industry estimates based on demand estimates COVID-19 (before postponement of the Olympics) Kaden Biz Forecast Standard Industry Estimates (Pre-COVID-19) ● New Demand Post-COVID-
Slide 24: Stepping Up Systems Investment
Plan Stepping Up Systems Investment ● Double systems investment from JPY1.7bn in FY03/20 to JPY3.4bn in FY03/21. [Main projects] ・Transferring of core system to the cloud (completion scheduled for around FY03/22) ・Moving toward discontinuing the storing of credit card information ・Replacing Windows
Slide 25: Consolidated Statements of Income (FY03/21 Plan)
Plan Consolidated Statements of Income (FY03/21 Plan) FY03/20 FY03/21 Million Yen, % % of Sales Results % of FY03/19 % of Sales Plan % of FY03/20 Net Sales 100.0% 733,575 102.1% 100.0% 743,000 101.3% Gross Profit 28.7% 210,605 100.4% 28.7% 213,600 101.4% SG&A Expenses 27.0% 198,321 103.3% 27.0% 200,
Slide 26: SG&A Expenses (FY03/21 Plan)
Plan SG&A Expenses (FY03/21 Plan) FY03/20 FY03/21 Million Yen, % % of Sales Results YoY % of Sales Plan YoY Total SG&A Expenses 27.0% 198,321 103.3% 27.0% 200,600 101.1% Advertising Expenses & Selling Expenses 7.7% 56,466 102.4% 7.3% 54,248 96.1% (Of which, Loyalty Point Promotion Expenses) (1.8%) (
Slide 27: Plan for business development centered on four pillars
Company activities Plan for business development centered on four pillars Home Home Electronics Improvement ・Capture demand for video ・Achieve stable growth in the home electronics and TVs improvement market ・Strengthen air conditioner sales ・Strengthen personnel ・Handle new products such as ・Enhanc
Slide 28: FY03/21 Store Openings Plan
Company activities FY03/21 Store Openings Plan Relocation/ End-of-Period Edion-Owned Chains New Openings Closures YoY Change Renovations Store Count FY03/20 Results 6 3 -5 +1 396 FY03/21 Plan 8 1 0 7 403 © EDION Corporation 27
Slide 29: ESG Management
ESG ESG Management Environment ●Reduction, reuse, and recycling of waste ●Sales of solar systems and energy efficient ●Installation of solar power systems on company buildings ・ E.R. Japan Corporation home appliances ・Installed at 71 locations Recycles metals and reuses PCs ・Contributes to reduction