Slide 1: Results of Operations for the Fiscal Year Ended February 28, 2021
Results of Operations for the Fiscal Year Ended February 28, 2021 KANTSU CO., LTD. (Securities code: 9326) April 27, 2021
Slide 2: Contents
Contents I. Company Profile ………… 3 II. Our Services ………… 7 III. KANTSU’s Strengths ………… 16 IV. FY2/21 Financial Summary ………… 22 V. FY2/22 Earnings Forecasts ………… 34 VI. Medium-term Business Plan ………… 39 2
Slide 3: I. Company Profile
I. Company Profile 3
Slide 4: 1. Company Profile
1. Company Profile A logistics services company centered on EC and catalog logistics Company name KANTSU CO., LTD. Office Head office: 1-8-13 Nagata Higashi Osaka city, Osaka Osaka Branch Office: LINKS UMEDA 8F WeWork LINKS UMEDA 1-1 Ofukacho, Kita-ku, Osaka city, Osaka Tokyo System Development Divi
Slide 5: 2. History
2. History KANTSU has grown rapidly since 2010 along with the expansion of the e-commerce market. KANTSU formed a capital and business alliance with Rakuten Inc. in February 2019 and was listed on the Tokyo Stock Net sales Exchange Mothers Market in March 2020. (Millions of yen) Founding and early y
Slide 6: 3. Overview of KANTSU's Services
3. Overview of KANTSU’s Services Always using successful activities in EC/catalog logistics services to add new services Rakuten Super Logistics services Software sales and use services Efficient software created Reputation for thorough logistics services from ideas in front-line operations EC/catal
Slide 7: II. Our Services
II. Our Services 7
Slide 8: 1. EC/Catalog Logistics Support Services
1. EC/Catalog Logistics Support Services The core business at the center of growth of KANTSU’s performance EC/catalog logistics support services KANTSU operates distribution centers for other companies by handling incoming/outgoing shipments, inventories and other operations for EC, catalog and othe
Slide 9: 1. EC/Catalog Logistics Support Services
1. EC/Catalog Logistics Support Services Strengthen cold chain logistics services Rakuten Super Logistics services We plan to strengthen logistics for frozen and refrigerated food products, which is expected to be a KANTSU and Rakuten established a capital and growing component of the EC/catalog log
Slide 10: 2. Software Sales and Use Services
2. Software Sales and Use Services The software sales business is based on advances originating from our own logistics operations. Major products include the Cloud Thomas warehouse management system for high-quality logistics and the Annie check list system that also started from ideas in our front-
Slide 11: 2. Software Sales and Use Services
2. Software Sales and Use Services The software sales business is based on advances originating from our own logistics operations. Major products include the Cloud Thomas warehouse management system for high-quality logistics and the Annie check list system that also started from ideas in our front-
Slide 12: 2. Software Sales and Use Services
2. Software Sales and Use Services Transforming successful activities at KANTSU into services to sell to other companies has the benefits of improving satisfaction for current customers and attracting new customers. During FY2/21, we used this process to launch the e.can and ippo! services. ippo! –
Slide 13: 3. Logistics-related Services
3. Logistics-related Services Outsourced order processing services Logistics consulting services These upstream support services for EC/catalog By using knowledge gained from providing EC/catalog logistics enable companies to use KANTSU for logistics support services, KANTSU has a consulting confirm
Slide 14: 4. Other Services
4. Other Services Education services for people with a developmental disability ◼ After-school daytime classes for children with a developmental disability Operating after-school day classes for children with a developmental disability helps these children develop skills and become more independent.
Slide 15: 5. Recent Topics
5. Recent Topics Completion of a distribution center in Amagasaki specializing in EC/catalog operations This new distribution center in Amagasaki, Hyogo prefecture, which has a floor area of about 18,500 m2, enables KANTSU to meet the recent growing demand for EC/catalog logistics services. This is
Slide 16: III. KANTSU's Strengths
III. KANTSU’s Strengths 16
Slide 17: 1. A Large and Growing Number of Customers
1. A Large and Growing Number of Customers Growth backed by new customers as well as sound relationships with current customers Net sales (Area) (Millions of yen) (100 tsubo*) 12,000 Net sales 600 売上高（百万円） 物流拠点坪数（百坪） Floor area of distribution centers (Millions of yen) (100 tsubo) 533 10,756 10,000
Slide 18: 1. A Large and Growing Number of Customers
1. A Large and Growing Number of Customers Support for Logistics in Many Sectors Long-term Logistics Support Relationships Sales Composition by Market Sector (FY2/21 results) Length of Customer Relationships (FY2/21 results) 1% 9 3% 9% companies 3% 27% 10年超than 10 years 27 13 More companies companie
Slide 19: 1. A Large and Growing Number of Customers
1. A Large and Growing Number of Customers New Customers Contribute to Steady Growth of Sales from Outsourced KANTSU’s Growth Every Year Logistics Operations Net sales Sales Growth from New Customers (Thousands Average Monthly Sales Per Client Company of yen) 7,000 6,063 6,000 5,000 4,000 3,378 3,00
Slide 20: 2. Ability to Attract New Customers
2. Ability to Attract New Customers We use study tours of warehouses, web marketing and other activities to establish relationships with new customers. Warehouse Study Tours (Seminars) Web marketing Warehouse Study Tours have hosted more than 200 people We started using the internet more than 10 yea
Slide 21: 3. Recruiting, Training and Productivity
3. Recruiting, Training and Productivity To maintain a well-trained and motivated workforce, we have a recruiting activities as well as measures to strengthen training programs, improve evaluation systems and make other improvements. ■Recruiting ■Training and Productivity ・Started using foreign tech
Slide 22: IV. FY2/21 Financial Summary
IV. FY2/21 Financial Summary 22
Slide 23: 1. FY2/21 Financial Highlights
1. FY2/21 Financial Highlights Sales of the core EC/catalog logistics support services increased 34.3% YoY and sales of software sales and use services increased 46.9% YoY due to strengthened sales activities. Operating profit was up 43.5% YoY despite up-front investments for growth, including a new
Slide 24: 2. FY2/21 Results Summary
2. FY2/21 Results Summary Sales and earnings increased due to strong growth of sales in the logistics services business. (Millions of yen, %) FY2/20 FY2/21 YoY change % to net % to net Results Results Amount % sales sales Net sales 7,301 100.0 9,530 100.0 2,228 30.5 Gross profit 974 13.3 1,126 11.8
Slide 25: 3. Quarterly Results Summary
3. Quarterly Results Summary Sales continue to increase from quarter to quarter. Up-front expenses in the third quarter contributed to fourth quarter earnings. Net sales exceeded the plan and operating profit was about the same as the plan. (Millions of yen, %) FY2/20 FY2/21 Fiscal 1Q 2Q 3Q 4Q 1Q 2Q
Slide 26: 4. Analysis of Change in Net Sales
4. Analysis of Change in Net Sales (2) (3) (1) (1) Higher sales of EC/catalog logistics support (4) services New customers, full FY contribution of prior-year new customers, higher volume for Rakuten Super Logistics +2,288 million yen YoY Up 2,228 million (2) Higher sales of software sales and use s
Slide 27: 5. Analysis of Change in Operating Profit
5.Analysis of Change in Operating Profit (1) (2) (3) (1) Higher gross profit in the logistics services business Up Net sales growth offset a higher cargo transport expense 126 million yen ratio and up-front expenses for distribution center YoY expansion and other activities +146 million yen YoY FY2/
Slide 28: 6. Business Segments (1) Logistics Services Business
6. Business Segments (1) Logistics Services Business • EC/catalog logistics support services increased 34.3% to 2,288 million yen because of the growth of services provided to new and existing customers. • Software sales and use services increased 46.9% to 94 million yen because of progress with sig
Slide 29: 6. Business Segments (1) Other Businesses
6. Business Segments (1) Other Businesses • Sales of technology education services for foreign trainees were down because school operations were suspended due to COVID-19. But segment sales increased 0.2% because of sales of the corporate nursery school business that was started in FY2/20. • The emp
Slide 30: 7. Condensed Balance Sheet
7. Condensed Balance Sheet As of Feb. 29, 2020 As of Feb. 28, 2021 (Millions of yen, %) YoY change Amount Composition Amount Composition Current assets 3,526 54.9 4,142 55.0 615 Cash and deposits 2,450 38.2 2,592 34.4 141 Increase due to higher sales Accounts receivable 850 13.2 1,256 16.7 405 Incre
Slide 31: 8. Cash Flows and Other Information
8. Cash Flows and Other Information Cash Flow Summary (Millions of yen) FY2/20 FY2/21 Increase in trade receivables (416) First half Fiscal year First half Fiscal year Profit before income taxes 392 Depreciation 239 Operating cash flows 190 398 39 187 Purchase of property, plant and equipment (539)
Slide 32: 9. Capital Expenditures (1)
9. Capital Expenditures (1) Plan and Actual Expenditures (As of February 28, 2021) (Millions of yen) Payment Payments made (completed) Project Purpose Plan Start/Finish made inVia 100 million yen Syrius 76 million yen Mar. 2020 to Feb. Logistics robots Efficient picking, packaging, etc. 180 176 2021
Slide 33: 9. Capital Expenditures (2)
9. Capital Expenditures (2) Plan and Actual Expenditures (As of February 28, 2021) (Millions of yen) Payment Project Purpose Plan Start/Finish made Increased use of robots after trial Use of robots at distribution centers use produced an improvement in 400 － Mar. 2021 to Feb. 2022 productivity Reinf
Slide 34: V. FY2/22 Earnings Forecasts
V. FY2/22 Earnings Forecasts 34
Slide 35: 1. FY2/22 Earnings Forecasts
1. FY2/22 Earnings Forecasts • Forecast net sales to increase 12.9% YoY and higher earnings at all levels (Millions of yen, %) FY2/21 Results FY2/22 Forecasts YoY change % to net % to net Results Forecasts Amount % sales sales Net sales 9,530 100.0 10,756 100.0 1,226 12.9 Gross profit 1,126 11.8 1,6
Slide 36: 2. Business Segments (1) Logistics Services Business
2. Business Segments (1) Logistics Services Business • Two new distribution centers in Amagasaki, Hyogo prefecture (total of about 35,700 m ) due to 2 the continuing growth of the EC/catalog logistics support services market. • Forecast a reduction of about 800 million yen in projected cargo transpo
Slide 37: 2. Business Segments (2) IT Automation Business
2. Business Segments (2) IT Automation Business • In addition to the Cloud Thomas warehouse management system, we are adding Cloud Thomas Pro, which can be customized to match each customer’s requirements and scale of operations, to serve a broader range of customers. • Cloud Thomas sales are foreca
Slide 38: 2. Business Segments (3) Other Businesses
2. Business Segments (3) Other Businesses • Sales of technology education services for foreign trainees are expected to decrease because of COVID-19 and political instability in Myanmar. But segment sales are forecast to increase 33.1% to 28 million yen because of the expected sales of the employmen
Slide 39: VI. Medium-term Business Plan
VI. Medium-term Business Plan －2024－ 39
Slide 40: 1. Medium-term Business Plan Overview
1. Medium-term Business Plan Overview • The goal is net sales of 15.3 billion yen and operating profit of 1.0 billion yen in FY2/24 by achieving growth that outpaces the e-commerce market’s expansion. (Millions of yen, %) FY2/22 FY2/23 FY2/24 YoY YoY YoY % to net % to net % to net Plan change Plan c
Slide 41: 2. Medium-term Plan for Business Segments
2. Medium-term Plan for Business Segments • In the logistics services business, the goal is to use capital expenditures for distribution center expansion and robots and other automated logistics equipment in order to grow faster than the e- commerce market. • In the IT automation business, the goal
Slide 42: 2. Business Segment Sales Plan
2. Business Segment Sales Plan • KANTSU aims for net sales of 14.2 billion yen in the logistics services business and of 1.0 billion yen in the IT automation business in FY2/24. (Millions of yen) 16,000 155 15,000 1,000 14,000 13,000 126 800 12,000 11,000 14,215 115 10,000 349 12,178 86 9,000 297 10
Slide 43: 3. Market Conditions
3. Market Conditions Expect the e-commerce market to continue growing strongly Market size EC ratio (100 millions of yen) (%) 250,000 8.00% 6.76% 7.00% 6.22% 200,000 5.79% 6.00% 5.43% 193,609 179,845 4.75% 5.00% 150,000 165,054 4.37% 151,358 3.85% 137,746 4.00% 3.40% 127,970 3.17% 100,000 2.84% 111,
Slide 44: 3. Market Conditions
3. Market Conditions Growth is continuing in the merchandise sales category, the largest component of KANTSU’s customer base B-to-C EC Sector – Market Category Size and Composition Ratio B-to-C EC Sector Merchandise Sales for Product Categories Growth 2018 2019 2018 2019 ratio Market size Classifica
Slide 45: 4. Growth Strategy
4. Growth Strategy １ New large refrigerated and frozen warehouses • Strengthen logistics sales services for refrigerated/frozen food EC, a category expected to continue growing ２ Grow rapidly as an IT vendor • Supply an upgraded version of the Cloud Thomas warehouse management system to strengthen i
Slide 46: 5. Internal Strategy that Supports the Growth Strategy
5. Internal Strategy that Supports the Growth Strategy １ Strengthen activities using the internet to attract new customers • Use SEO, an internet advertising strategy and remote sales meetings for effective activities to establish relationships with new customers Use automated logistics equipment an
Slide 47: 6. Projected Growth
6. Projected Growth We are working on the advancement of logistics technology by acquiring knowledge concerning AI, automation and robots as distribution center operations move close to the age of robotics. Our goal is to grow rapidly by launching more new services while expanding operations involvi
Slide 48: Disclaimer
Disclaimer Disclaimer and Precautions Concerning Forward-looking Statements ■ Information in this presentation and associated materials contains forward-looking statements. These statements are based on the current outlook and forecasts as well as on assumptions that incorporate risk. All forward-lo