Komehyo Holdings Co., Ltd. · TSE:2780
Komehyo — 1H FY2018 Earnings Presentation
26 slides from Komehyo's earnings presentation, Nov 15, 2017
Slide 1: Earnings Results Briefing for the First Six Months of the Fiscal Year Ending March 31, 2018
Earnings Results Briefing for the First Six Months of the Fiscal Year Ending March 31, 2018 November15 2017 KOMEHYO Co., Ltd. Securities code: 2780 (Second Section, Tokyo and Nagoya Stock Exchanges) Corporate Planning Department IR strategy group TEL:+81-52-249-5366 Note: This document is an English
Slide 2: Overview of Income Statement (Consolidated)
Overview of Income Statement （ Consolidated ） Consolidated FY2018 YoY FY2018 YoY FY2018 YoY (Millions of yen) 1Q 2Q 1H Net sales 9,849 107.6％ 10,913 111.2％ 20,763 109.5％ Gross profit 2,940 115.8％ 2,988 116.5％ 5,928 116.1％ Gross profit 29.9% +2.2Pt 27.4％ +1.3Pt 28.6％ +1.7pt margin SG&A expenses 2,767
Slide 3: Overview of Income Statement (Non-consolidated)
Overview of Income Statement （ Non-consolidated ） Non-consolidated FY2018 FY2018 FY2018 YoY YoY YoY (Millions of yen) 1Q 2Q 1H Net sales 8,673 107.7％ 9,858 111.6％ 18,532 109.7％ Gross profit 2,499 116.0％ 2,579 115.6％ 5,078 115.8％ Gross profit 28.8% +2.0Pt 26.2％ +1.0pt 27.4% +1.4pt margin SG&A expense
Slide 4: Operating income decrease factor (Consolidated)
Operating income decrease factor （ Consolidated ） General and Operating Personal Gross profit administrative income expenses Margin increase expenses (Millions of yen) decrease increase ＋341 ＋1 △264 1.7Pt Marketing cost increase △31 Sales amount increase +461 ＋482 An increase in rents of land and bu
Slide 5: Gross Profit Margin Trend
Gross Profit Margin Trend A year-on-year improvement resulting from adjustment of inventory Consolidated Non-consolidated （％） '17.3 Gross profit margin （％） '17.3 Gross profit margin '18.3 Gross profit margin '18.3 Gross profit margin 32 32 29.9 30 30 28.8 28 27.4 28 28.5 28.5 27.7 26.2 27.5 27.5 26
Slide 6: Profit Margin Trend
Profit Margin Trend Gross profit margin increase, SG&A expenses to sales ratio decrease Gross profit Gross profit margin Consolidated Operating margin Non-consolidated Operating SG&A expenses margin SG&A expenses margin Ratio (%) Gross profit margin (%) Ratio (%) Gross profit margin (%) 35 SG&A expe
Slide 7: Overview of Balance Sheet
Overview of Balance Sheet An increase in fixed assets (year on year) due to the opening of new large stores Consolidated (Millions of yen) Non-consolidated (Millions of yen) Assets Liabilities and Net Assets Assets Liabilities and Net Assets 27,435 27,435 26,209 26,209 Cash and 23,314 24,400 24,400
Slide 8: Statement of Cash Flows
Statement of Cash Flows Cash flows from operating activities were negative due mainly to an increase in inventories Consolidated (Millions of yen) FY2016 FY2017 1H FY2017 FY2018 1H 4,000 4,257 4,271 4,327 3,886 3,000 2,855 2,048 2,000 1,533 1,000 536 505 0 △ 248 △ 1,000 △ 777 △ 572 △ 845 △ 1,091 △ 1
Slide 9: By Segment
By Segment The Brand Fashion Business: An improvement in earnings FY2018 FY2018 FY2018 YoY 2Q YoY YoY （百万円） 1Q 1H Net sales 8,827 107.9％ 10,027 112.1％ 18,854 110.1％ Fashion Brand Operating income 157 － 315 1,631.7% 472 － Operating margin 1.8％ +2.3pt 3.1% +2.9pt 2.5％ +2.6pt Net sales 997 105.2％ 862 1
Slide 10: FY2018 plan
FY2018 plan Non- Consolidated FY2018 consolidated FY2018 (Millions YoY YoY of yen) plan (Millions plan of yen) Net sales 43,300 107.9% Net sales 37,900 108.6% Operating Operating income 1,330 159.8% income 900 179.0% Ordinary Operating income 1,330 163.1% income 1,000 204.1% Net income attributable
Slide 11: Economic Trend
Economic Trend The economic environment remains on a moderate recovery path Net sales Stock Price Department store(fine arts/jewelry/precious metals) YoY (%) (yen) 130 KOMEHYO net sales(non-consolidated) 22,000 Nikkei Stock Average(monthly closing price) 21,000 120 20,000 110 19,000 100 100 18,000 1
Slide 12: Issues in Core Businesses
Issues in Core Businesses ① Successful opening of large stores ・Enhancement of customer management －Acquisition of new customers －Expansion of existing customers ・Introduction of new products ・Enhancement of online backorders ② Increasing profitability ・Improvement of gross margin ・Enhancement of in
Slide 13: Response to issues ① Umeda store ('17.2)
Response to issues① Umeda store (‘17.2) Projected an upscale image and won favor of women in their 40s and 50s who are looking for high-priced items 【KOMEHYO card members(‘17.9)】 10's 20's 30's 40's Male Female 50's 60's 70's～ 3.5% 0.3% 9.8% 14.7% 33.7 % 19.9% 26.3% 66.3 % 25.5% 12
Slide 14: Response to issues ① Shinjyuku store ANNEX ('17.5)
Response to issues ① Shinjyuku store ANNEX (‘17.5) Men’s Store handles men’s clothing items ranging from casual clothes to business suits and accessories 【KOMEHYO card members(‘17.9)】 10's 20's 30's 40's Male Female 50's 60's 70's～ 2.8% 0.6% 11.6% 12.4 11.5% % 22.5% 25.3% 87.6 % 25.7% 13
Slide 15: Response to issues ① Meieki store ('17.5)
Response to issues ① Meieki store(‘17.5) Visited by many customers who are doing shopping around Nagoya Station 【KOMEHYO card members(‘17.9)】 10's 20's 30's 40's Male Female 50's 60's 70's～ 5.3% 0.4% 8.2% 27.4 18.0% % 15.7% 72.6 27.8% 24.6% % 14
Slide 16: Response to issues ① E-commerce-induced sales
Response to issues ① E-commerce-induced sales “Buy Online and Pick up in Store,” connecting brick-and-mortar stores with e-commerce sites, is on an upward trend FY2018 FY2018 FY2018 (Millions of yen) YoY YoY YoY 1Q 2Q 1H E-commerce- induced sales 1,453 109.6％ 1,914 128.4% 3,367 119.6％ E-commerce- in
Slide 17: Response to issues ② Purchase from Individual Customers
Response to issues ② Purchase from Individual Customers Has won the No.1 position in customer satisfaction surveys. Purchases from individual customers posted a double-digit increase. Amount of purchase from FY2018 FY2018 FY2018 individual YoY 2Q YoY YoY 1Q 1H customers Purchasing Center 4,359 107.2
Slide 18: Response to issues ② Establishment of Purchasing Center
Response to issues ② UM Inazawa store・LS Uedayama store Establishment of Purchasing Center —Enhancement of purchases from individual customers 【USED MARKET Inazawa store】(‘17.4.1～) 【LINK SMILE Uedayama store】(‘17.7.1～) 17
Slide 19: Response to issues ③ Guarantee for trade-ins and buy-backs
Response to issues ③ Guarantee for trade-ins and buy-backs Offering the full scale of guarantee for trade-ins and buy-backs in physical stores and e-commerce sites Up to 30,000yen improves Up to 10,000yen improves With article which we did not use to the nearest store Three years guarantee of relief
Slide 20: Subsidiary (1) KOMEHYO Auction
Subsidiary(1)KOMEHYO Auction Expand sales channels of used products, reinforce procurement and collect industry information FY2018 1H Trade volume YoY No. of member (Millions of yen) companies Jewelry Watches 8,800 104.6％ Bags 786 Clothing 160 116.1% 19
Slide 21: Subsidiary (2) KOMEHYO HONG KONG
Subsidiary(2)KOMEHYO HONG KONG Strengthen purchases of used products in Japan for exploring overseas sales channels Net sales YoY (Millions of yen) FY2018 1H 527 135.9％ 【Hong Kong Jewelry show】 20
Slide 22: Subsidiary (3) Craft, Auto Parts Japan
Subsidiary(3) Craft、Auto Parts Japan Sale of tires, wheels, and vehicle parts [EURO STYLE Craft] FY2018 1H Net sales YoY Opened in Craft Nagoya Dome West store 2F (Millions of yen) in September 2017 Support customization focusing on euro Tires/wheels 1,532 109.2％ compact car Parts 280 82.6％ Others 4
Slide 23: Challenge to The C-to-C Business
Challenge to The C-to-C Business The C-to-C Business: Free market app “KANTE” Free market app “KANTE” Service started in November 2017 Free market app specializing in brand- name products Providing purchasers with a sense of assurance through judgment of authenticity Nurturing a healthy culture of r
Slide 24: 70th anniversary event
70 th anniversary event Held a special event to mark the 70th anniversary to show our appreciation to the local community in Osu, Nagoya [Exercise courses given by leading athletes]（‘17.7.27） [Acrobat Musical “AMAZING Hakkenden”]（‘17.8.30） 23
Slide 25: Reference Information (1) Store Type
Reference Information(1) Store Type 26 stores (‘17.9) 5 stores (‘17.9) Large-scale Nagoya Store，Meieki Store, Sales/Purchase ※ Shinjuku Store/ANNEX， Ladies casual Ginza Store，Umeda Store clothing, Sales/Purchase bags, Jewelry, precious metals, 6stores accessories watches, bags, clothing , etc. Mid-s
Slide 26: Reference Information (2) Shareholder return
Reference Information(2) Shareholder return Dividend changes Dividend(yen) Payout ratio(％) 40 Fiscal year-end dividend Interim dividend Payout ratio 100 92.4 Forecast 35 90 30 80 30 70 25 60 20 50 15 36.2 40 29.3 10 23.0 30 19.4 5 16.0 16.6 15.5 15.0 13.2 24.8 20 0 10 FY2007 FY2008 FY2009 FY2010 FY2