Nagaileben Co., Ltd. · TSE:7447

Nagaileben — H1 FY2018 Earnings Presentation

52 slides from Nagaileben's earnings presentation, April 2018

  1. Slide 1: Analyst Guide First-half FY2018

    ANALYST GUIDE First-half FY2018 (Listed on the 1st Section of the Tokyo Stock Exchange; Code 7447) April 2018 <Contact for information on this material: Mr. Tokue, Administration Headquarters (+81-3-5289-8200)>

  2. Slide 2: Overview First-half of FY2018

    Overview First-half of FY2018 1 Sales & Income -Net Sales and Operating Income recorded highest. Net Sales: ¥7,419 m Operating Income: ¥2,006 m 2 The Change of Business Environment - Market Condition Simultaneous revision of medical treatment fees and nursing care fees (effective Apr. 2018) The impa

  3. Slide 3: Agenda

    Agenda I About “NAGAILEBEN” II Financial Review First-half of FY2018 III Market Environment IV Forecast for FY2018 V Management Goals VI Rewarding shareholder-focused policies Copyrights Nagaileben Co.,Ltd. All rights reserved. 2

  4. Slide 4: I About Nagaileben

    I About “NAGAILEBEN” @ NAGAILEBEN

  5. Slide 5: Outline

    Outline 100th year in business 1 Establish competitive position in medical clothing market -Approximately 60% market share -Wide field, planning, manufacturing and in domestic medical clothing marketing - The number of shipments is over 6 -Competitive product such as extensive products, million clot

  6. Slide 6: Outline: profitability, balance sheet, shareholder policies

    Outline Highly profitability 47.5% 3 Change of Gross Profit to Sales 50 (2017) Strong balance sheet (%) 45 33.1% - Realization of high profitability 45.3% with radical pursuit of efficiency 40 28.6% (1990) (2010) -Gross profit to sales 47.5% (as of FY2017) 35 (1980) 39.7% -Capital-to-asset ratio 89.

  7. Slide 7: CSR/ESG

    CSR/ESG Support for Women Regional Contribution Women principal domains: Medical and Sewing Medical Kids Project Products of Nagaileben are mainly for women, who work as a nursing staff Miffy’s Visits to Hospitals or a care worker. At production sites of For interchange between hospitals and local N

  8. Slide 8: II Financial Review First-half of FY2018

    II Financial Review First-half of FY2018 7

  9. Slide 9: Financial Highlights <Statements of Income>

    Financial Highlights <Statements of Income> Composition % (millions of yen,%) First-half of FY2018 % Change To Forecast % Composition % Change Net sales 7,419 +3.8 +0.9 100.0 － Gross profit 3,469 +1.9 +0.0 46.8 -0.9 Sales, general, and administrative expenses 1,463 -0.6 -1.1 19.8 -0.9 Operating inco

  10. Slide 10: Financial Highlights <Balance Sheet>

    Financial Highlights <Balance Sheet> Major assets (¥ million %) Title Result Change Result Change% [Major changes from the previous fiscal year] Cash on hand at banks 20,578 +1,709 +9.1 Notes and accounts receivable Cash and cash equivalents up ¥ 1,709 million 5,181 +241 +4.9 (including electronical

  11. Slide 11: Segments by Item

    Segments by Item Healthcare wear Patient wear Shoes Doctors' wear Utility wear Surgery wear Copyrights Nagaileben Co.,Ltd. All rights reserved. 10

  12. Slide 12: Sales by Item

    Sales by Item Doctors' 14.7% Utility 3.1% Patient [Healthcare wear] 13.1% -Sales grew steadily sequentially last year, by satisfactory contracts of High Value-Added new products. Surgery [Doctors' wear] 9.4% -High-End products contributed to growth of the sale. Healthcare 0.9% Shoes 57.5% [Utility w

  13. Slide 13: Sales by Region

    Sales by Region Central Japan 10.9% [East Japan] West Japan - Prosperous growth continued, by catching renewal 35.8% contracts steadily with model changes, and result of sales promotion of patient wear. [Central Japan] -Market size was not large and there was the influence by the size of contracts.

  14. Slide 14: III Market Environment

    IIT Market Environment @ NAGAILEBEN 13

  15. Slide 15: Market Environment Topics

    Market Environment Topics Simultaneous revision of medical treatment fees and nursing care fees.(effective Apr. 2018) -Medical treatment fees revised:-0.90%(Service:+0.55%, Drug price:-1.45%) The reform of the drug price system: -1.19% -Nursing care fees revised:+0.54%. Rising manufacturing cost -La

  16. Slide 16: Changes and prospects for medical and care service systems

    Changes and prospects for medical and care service systems Medical System Care Service System Medical Service Law, Health and Medical Medical treatment fees Care Service Law, Nursing Care Insurance, etc. Nursing care fees Service Law for the Aged, Medical Insurance, etc Medical program for very elde

  17. Slide 17: Revisions to medical treatment and care Service fees

    Revisions to medical treatment and care Service fees （％） 5 +5.0 +4.8 Medical(Service) Medical(Drug) Care 4 +3.4 +3.0 3 2 +1.9 +1.5 +1.6 +1.4 +1.2 +0.7 1 +0.4 +0.6 +0.5 +0.6+0.5 ▲1.3 +0.0 ▲1.3 0 -1 ▲0.5 ▲ 0.6 ▲ 1.0 ▲ 1.2 ▲ 1.4 ▲ 1.4 ▲ 1.4 ▲ 1.3 ▲ 1.5 -2 ▲ 1.7 ▲ 1.8 ▲ 2.0 ▲1.9 ▲ 2.4 ▲2.3 ▲2.3 -3 ▲ 2.6

  18. Slide 18: Supply and Demand of Nursing Staff

    Supply and Demand of Nursing Staff (Source: the Ministry of Health, Labour and Welfare (December 2010)) (10,000 persons) Actual(2015) Change to actual number as 175 1,634 k Demand from the 7th Outlook. persons Forecast Actual Decreased number of nursing staff on both supply 150 and demand sides for

  19. Slide 19: Supply and Estimated Future Need for Care Workers

    Supply and Estimated Future Need for Care Workers (10,000 persons) 300 Forecast 253 250 Actual 200 150 253 100 177 183 163 171 141 143 151 120 123 109 114 50 96 85 64 72 55 0 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '25 Since the number of track records are subject to the infl

  20. Slide 20: Supply and Estimated Future Need

    Supply and Estimated Future Need (10,000 persons) 300 Nursing Staff Care Workers 253 250 forecast(maximum) forecast(minimum) 206 200 Actual 150 253 100 196 163 171 50 0 2015 2025 2013 2025 Actual record: Japanese Nursing Associations’ statistical data Actual record: Research of Long-Term Care Servic

  21. Slide 21: IV Forecast for FY2018

    IV Forecast for FY2018 ait @ NAGAILEBEN 20

  22. Slide 22: Management Tasks and Status

    Management Tasks and Status • Capture clusters of needs Marketing strategy to in the healthcare wear market increase sales • Increase peripheral business in products for patients and surgery • Cultivate overseas markets • Scrap 2 old factories and build New Sewing Production strategy to Factory in J

  23. Slide 23: Forecast Statements of Income

    Forecast Statements of Income (millions of yen,%) FY2018E % Change (FY2017) Composition % Change Net sales 17,500 +2.8 － Gross profit 8,260 +2.2 -0.3 Sales, general, and administrative expenses 2,886 +1.5 -0.2 Operating income 5,373 +2.5 -0.1 Recurring income 5,448 +2.0 -0.3 Net income 3,739 +1.8 -0

  24. Slide 24: Forecast of Sales by Item

    Forecast of Sales by Item Sales by Item (¥ million) Year-on-year change FY2017 FY2018E 20,000 18,000 Sales +2.9% +2.8% Shoes/Others 16,000 Healthcare wear +2.8% +2.8% 14,000 Surgery wear Doctors' wear +1.0% +2.2% 12,000 Patient wear 10,000 Utility wear -7.4% -8.5% Utility wear 8,000 Patient wear +10

  25. Slide 25: Forecast of Sales by Region

    Forecast of Sales by Region Sales by Region (¥ million) Year-on-year change FY2017 FY2018E 20,000 18,000 Total sales +2.9% +2.8% 16,000 Overseas East Japan +5.5% +2.0% 14,000 12,000 West Japan Central Japan +2.3% +3.0% 10,000 West Japan -0.2% +3.8% 8,000 Central Japan 6,000 Overseas -8.2% +8.4% 4,00

  26. Slide 26: Product Strategy

    Product Strategy Sales by Product Year-on-year change FY2017 FY2018E (¥ million) 20,000 Total sales +2.9% +2.8% 18,000 High-End products +7.9% +7.4% 16,000 High-End High Value-Added 14,000 +3.3% +4.3% products 12,000 High Value- Added Value-Added 10,000 +2.3% +0.9% 8,000 Value-Added products 6,000 M

  27. Slide 27: Production Strategy

    Production Strategy Production(Non-Consolidated) (¥ million) (%) 10,000 50 Composition FY2017 FY2018E Purchased products Domestic production 50.6% 50.0% 7,500 45 Overseas production Overseas production 48.1% 48.8% Purchased products 1.3% 1.2% 5,000 40 Domestic production 2,500 35 Ratio of overseas p

  28. Slide 28: V Management Goals

    V Management Goals as @ NAGAILEBEN 27

  29. Slide 29: Business Direction: Sales Strategy, Profit Strategy

    Business Direction Sales Strategy -Increase peripheral business in products for Patients and Surgery. -Gain share In West Japan. -Develop and Sale of High-End and High Value-Added products. -Cultivate Overseas Markets. Profit Strategy -Driving the strategy of Higher Quality and Value-Added products.

  30. Slide 30: Products: Sales Strategy to FY2020E

    Sales Strategy FY2014 FY2017 FY2020E (3 terms ago) (Previous term) (3 terms later) net sales ¥16,214 million ¥17,017 million ¥18,500 million Healthcare 58% Doctors' 58% 57% 15% 17% 16% 2% Utility Item 5% 3% Patient 8% Patient 13% 11% 9% Surgery Surgery 3% 10% Others 2% 12% 11% 1% 10% East Japan 10%

  31. Slide 31: Trend of Business Records

    Trend of Business Records (¥ million) (%) 17,500 Net sales (left) 55 15,000 Gross profit to sales (right) 12,500 45 10,000 7,500 5,000 35 2,500 0 25 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18E19E20E (FY) Note: Consolidated dat

  32. Slide 32: VI Rewarding shareholder-focused policies

    VI Rewarding shareholder -focused policies 日本ではじめてのナースのための心のコミュニケーションスペース「いとなギャラリー」 31

  33. Slide 33: Reimbursement Policy, Shareholder-focused policies

    Reimbursement Policy Shareholder-focused policies - Improvement of transparency by proactive disclosure - Interactive communication with investors - Profit reimbursement by high dividends Dividend policy - Basic policy is to continue stable dividend payment with payout ratio of 50% Share buyback - A

  34. Slide 34: The History of Stock Value

    The History of Stock Value BPS EPS DPS （Yen） （Yen） （yen） （yen） （yen） 1,200 125 ※1 FY2009: Accrued pension fund withdrawal FY2001 532.5 50.8 12.5 payment loss ¥1.04b. A dotted line is when there was not outbreak. FY2002 568.3 48.0 12.5 1,100 FY2003 604.0 52.4 15.0 FY2004 663.0 60.5 30.0 100 1,000 FY2

  35. Slide 35: Actual Dividends Paid

    Actual Dividends Paid Total dividend Share buyback Payout ratio Total return ratio （Million yen） （Million yen） （non-c, ％） （non-c, ％） FY2001 475 0 27.6 27.6 FY2002 475 0 29.3 29.3 FY2003 530 1,697 29.7 124.6 FY2004 744 0 36.5 36.5 FY2005 1,117 0 56.9 56.9 FY2006 1,117 0 53.4 53.4 FY2007 1,117 0 53.1

  36. Slide 36: Management Philosophy

    Management Philosophy Our management philosophy are “Let us help the human life” and “Harmony”. We think that well-balanced growth with human, profit and philanthropy become the responsible corporate. Furthermore, we have our company spirit, “Nagaism”. We continue to specialize in medical / nurse /

  37. Slide 37: Notes on this material

    Notes on this material This material includes forecasts for the future. These forecasts are based on the judgment of the Company's management concerning currently available information. These future projections include assumptions or views based on assumptions, and therefore may be different from th

  38. Slide 38: Data File

    Data File First-half FY2018 (Listed on the 1st Section of the Tokyo Stock Exchange;Code 7447) <Contact for information on this material: Mr. Tokue, Administration Headquarters (+81-3-5289-8200)>

  39. Slide 39: Index

    Index 1 … Sales by Item 2 … Sales by Product 3 … Sales by Region 4 … Rationalization of the Production System and Our Purchasing Strategy (Non-Consolidated) 5 … Statements of Income (Consolidated) 6 … Statements of Income (Non-Consolidated) 7 … Indices (Consolidated) 8 … Indices (Non-Consolidated) 9

  40. Slide 40: 1. Sales by Item

    1. Sales by Item (¥ million) First-half First-half FY 14/8 15/8 16/8 17/8 18/8E 17/8 18/8 Sales 16,214 16,150 16,537 17,017 17,500 7,149 7,419 (¥ million) Healthcare wear 9,440 9,429 9,674 9,940 10,220 4,110 4,265 20,000 Doctors' wear 2,674 2,604 2,654 2,681 2,740 1,075 1,092 Utility wear 743 670 60

  41. Slide 41: 2. Sales by Product

    2. Sales by Product (¥ million) First-half First-half (¥ million) FY 14/8 15/8 16/8 17/8E 18/8E 17/8 18/8 20,000 Sales 16,214 16,150 16,537 17,017 17,500 7,149 7,419 High-End products 1,107 1,095 1,104 1,191 1,280 264 523 18,000 High Value-Added products 7,627 7,841 8,336 8,612 8,980 3,831 3,864 Val

  42. Slide 42: 3. Sales by Region

    3. Sales by Region (¥ million) First-half First-half FY 14/8 15/8 16/8 17/8 18/8E 17/8 18/8 (¥ million) Sales 16,214 16,150 16,537 17,017 17,500 7,149 7,419 20,000 East Japan 8,461 8,357 8,539 9,007 9,190 3,625 3,829 18,000 Central Japan 1,745 1,774 1,717 1,756 1,810 757 811 West Japan 5,839 5,842 6

  43. Slide 43: 4. Rationalization of the Production System and Purchasing Strategy

    4. Rationalization of the Production System and Our Purchasing Strategy(Non-Consolidated) (¥ million) First-half First-half (¥ million) (％) FY 14/8 15/8 16/8 17/8 18/8E 10,000 55 17/8 18/8 Domestic production 5,061 4,901 4,771 4,676 4,734 2,380 2,356 Overseas production 4,017 4,215 4,419 4,447 4,616

  44. Slide 44: 5. Statements of Income (Consolidated)

    5. Statements of Income (Consolidated) (¥ million) First-half First-half FY 14/8 15/8 16/8 17/8 18/8E 17/8 18/8 Net Sales 16,214 16,150 16,537 17,017 17,500 7,149 7,419 Gross profit 7,585 7,532 7,735 8,086 8,260 3,405 3,469 Sales, general, and administrative expenses 2,662 2,719 2,784 2,843 2,886 1,

  45. Slide 45: 6. Statements of Income (Non-Consolidated)

    6. Statements of Income (Non-Consolidated) (¥ million) First-half First-half FY 14/8 15/8 16/8 17/8 18/8E 17/8 18/8 Net Sales 16,199 16,141 16,535 17,013 17,500 7,148 7,413 Gross profit 7,270 7,218 7,416 7,826 7,972 3,272 3,377 Sales, general, and administrative expenses 2,662 2,718 2,775 2,831 2,86

  46. Slide 46: 7. Indices (Consolidated)

    7. Indices (Consolidated) First-half First-half (Unit) 13/8 14/8 15/8 16/8 17/8 17/8 18/8 Profitability ROE (%) 9.7 9.5 9.3 9.4 10.3 - - ROA (%) 15.0 13.5 13.0 12.7 13.4 - - Return on sales Net income (%) 20.0 19.9 20.0 19.7 21.6 - - ROE resolution Total Assets Turnover (Times) 0.4 0.4 0.4 0.4 0.4 -

  47. Slide 47: 8. Indices (Non-Consolidated)

    8. Indices (Non-Consolidated) First-half First-half (Unit) 13/8 14/8 15/8 16/8 17/8 17/8 18/8 Profitability ROE (%) 10.3 10.1 9.8 10.0 11.0 - - ROA (%) 15.7 14.2 13.7 13.4 14.2 - - Return on sales Net income (%) 19.3 19.4 19.4 19.2 21.2 - - ROE resolution Total AssetsTurnover (Times) 0.5 0.5 0.5 0.5

  48. Slide 48: 9. Statements of Income (Consolidated)

    9. Statements of Income (Consolidated) (¥ million,%) (¥ million,%) FY 16/8 17/8 Change(the previous year) First-half 17/8 First-half 18/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Net Sales 16,537 100.0 17,01

  49. Slide 49: 10. Statements of Income (Non-Consolidated)

    10. Statements of Income (Non-Consolidated) (¥ million,%) (¥ million,%) FY 16/8 17/8 Change(the previous year) First-half 17/8 First-half 18/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Net Sales 16,535 100.0

  50. Slide 50: 11. Balance Sheet (Consolidated)

    11. Balance Sheet (Consolidated) (¥ million,%) (¥ million,%) FY 16/8 17/8 Change(the previous year) First-half 17/8 First-half 18/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Current assets 29,083 74.8 32,325

  51. Slide 51: 12. Balance Sheet (Non-Consolidated)

    12. Balance Sheet(Non-Consolidated) (¥ million,%) (¥ million,%) FY 16/8 17/8 Change(the previous year) First-half 17/8 First-half 18/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Current assets 25,875 73.1 29,1

  52. Slide 52: 13. Forecasts/Results of Net Sales (Consolidated)

    13.Forecasts/Results of Net Sales (Consolidated) (¥ million) (％) [Forecast] (¥ million) 20,000 50 FY 13/8 14/8 15/8 16/8 17/8 18/8E Full Year 15,450 16,000 16,700 16,500 17,000 17,500 First-half 6,412 6,530 6,950 6,850 7,140 7,350 Second-half 9,038 9,470 9,750 9,650 9,860 10,150 15,000 25 [Result] (

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