United Arrows Ltd. · TSE:7606
United Arrows — Q3 FY2023 Earnings Presentation
35 slides from United Arrows's earnings presentation, Feb 6, 2023
Slide 1: Financial Results Briefing for the Third Quarter of Fiscal Year Ending March 2023
Financial Results Briefing For the Third Quarter of Fiscal Year Ending March 2023 2023.02.06 UNITED ARROWS LTD ¥ UNITED ARROWS LTD.
Slide 2: Table of Contents
Table of Contents pos -p2e | QO] OverviewofFY23 3Q Business Results p27- p32 | Q2 Message from Yoshinori Matsuzaki, Representative Director, President and CEO pss-p3ss | 03 ReferenceMaterials
Slide 3: Cautionary Statement
Cautionary Statement Earnings forecasts and descriptions other than objective facts contained in this document are based on decisions made by UNITED ARROWS LTD. in light of information obtainable as of the date of this report and, therefore, include risks and uncertainties. Actual earnings may diffe
Slide 4: Overview of FY23 3Q Business Results
Overview of FY23 3Q Business Results UNITED ARROWS LTO. PAGE |4
Slide 5: Overview of FY23 Business Results: Summary
01 Overview of FY23 30 Business Results Summary Consolidated Non- Consolidated Sales ¥96,093 mittion vs. FY2020/9M 91.49%" vs. FY2022/9M 110.6% Operating Income ¥6, 387 million (6.6% vs. sales) vs. FY2020/9M 71.9%, - 0.8pt vs. FY2022/9M 347.7%, +4.5pt Sales ¥87,816 mitiion vs. FY2020/9M 91.7% “2 vs.
Slide 6: Overview of FY23 Business Results: Non-consolidated sales
01 Overview of FY23 30 Business Results Non-consolidated sales By Channel vs. FY2020/9M vs. FY2022/9M Business unit ¥72,980 million 88.2%? 109.6%, - 0.6pt (82.3% vs. sales) Retail ¥49,901 million 78.8%, -8.0pt 113.6%, +1.6pt (56.3% vs. sales) Online ¥21,783 million 105.7%, +3.6pt 100.4%, -2.5pt (24.
Slide 7: Overview of FY23 Business Results
01 Overview of FY23 30 Business Results BS Balance of short- and Inventory long-term loans payable ¥23,416 mitiion ¥5,380 mitiion vs. FY2022 9M-End 100.2% vs. FY2022-End 69.0% COEN CO., LTD. Sales ¥7.65 billion vs. FY2020/9M 82.9%"? vs. FY2022/9M 108.0% Calculated excluding the impact of changes in
Slide 8: Consolidated sales and profit for the period
Sales: ¥96,093 million, 110.6% YoY, 80.7% compared to the same period three years ago, and 91.4% compared to the same period three years ago, excluding changes in consolidation structure and revenue recognition standards. Gross profit was ¥50,635 million, 114.0% YoY, 80.8% compared to three years ag
Slide 9: Consolidated PL 3Q (3 months)
Consolidated PL 3Q (3 months) is as shown on the slide. 9
Slide 10: Consolidated gross margin
Consolidated gross margin was 52.7%, up 1.6 percentage points YoY, up 0.1 percentage points from three years ago, and 53.0% excluding the impact of changes in revenue recognition standards, up 0.4 percentage points from three years ago. The gross margin of UNITED ARROWS LTD. was 52.4%, up 1.6 percen
Slide 11: Consolidated gross margin for 3Q (3 months)
Consolidated gross margin for 3Q (3 months) was 53.8%, the same level YoY, and down 0.4 percentage points from the same period three years ago. Down 0.1 percentage points excluding the impact of changes in revenue recognition standards. Although being affected by rising costs and currency fluctuatio
Slide 12: SGA expenses
The amount and rate of SGA expenses are as explained earlier. Excluding the impact of changes in revenue recognition standards, SGA expenses were ¥46,003 million, 85.5% compared to three years ago, and sales ratio was 46.5%, up 1.4 percentage points from three years ago. Advertising expenses were ¥2
Slide 13: Consolidated SGA expenses 3Q (3 months)
Consolidated SGA expenses 3Q (3 months) are as shown on the slide. 13
Slide 14: Non-consolidated sales
Non-consolidated sales were ¥87,816 million, 110.3% YoY and 89.1% compared to three years ago and 91.7% compared to three years ago when excluding the impact of changes in revenue recognition standards. Total business unit sales were ¥72,980 million, 109.6% YoY and 86.3% compared to three years ago,
Slide 15: Sales by business: Trend-conscious Market and Basic Trend-conscious Market
Regarding Trend-conscious Market centered on UA and BY, sales were ¥48,447 million, 109.0% YoY and 88.0% compared to three years ago, and 90.4% compared to three years ago when excluding the impact of changes in revenue recognition standards. Regarding Basic Trend-conscious Market centered on GLR, s
Slide 16: Regular price and discount price sales trends
Looking at trends in non-consolidated business unit, sales at regular price sales over the three months of the third quarter were 107.2% compared to the previous year. Discount price sales were brought down to 81.9% of the previous year, and the composition ratio of regular price sales also rose to
Slide 17: Regular price sales, cumulative period vs three years ago
Comparing the cumulative period up to the third quarter with the same period of three years ago, when the COVID-19 pandemic hit, regular price sales were 99.2%. Given the number of store closings over the past three years, we believe that regular price sales were higher than those of three years ago
Slide 18: Regular price sales, 3 months vs three years ago
Comparing the three months of the third quarter, the regular price sales of business unit is 105% of three years ago, exceeding the pre-pandemic level. Discount price sales halved, and the composition ratio of regular price sales was 90.5%, an improvement of 9.8 percentage points. In January as well
Slide 19: Total assets and liabilities
Total assets were ¥63,072 million, 105.6% of the end of the previous fiscal year. Current assets were ¥43,898 million, 114.1% of the end of the previous fiscal year, attributable mainly to an increase in merchandise, supplies and account receivables, and a decrease in cash and deposits. Noncurrent a
Slide 20: Cash flows
Cash provided by operating activities totaled ¥3,827 million, cash used in investing activities totaled ¥1,792 million, cash used in financing activities totaled ¥3,075 million, and cash and cash equivalents were ¥4,420 million. The main breakdown of each item is as shown in the slide. 20
Slide 21: COEN and Taiwan subsidiary results
COEN increased sales and profits. Sales were ¥7.65 billion, 108.0% YoY, 80.5% compared to three years ago and 82.9% when excluding the impact of changes in revenue recognition standards. Gross margin improved by curtailing discount price sales, resulting in profits exceeding the plan. Hit products f
Slide 22: Store openings and closings
Six stores opened and seven closed over the 9-month period. The number of stores totaled 309 at the end of 3Q. The Company expects to open six stores and close 20 stores for the full year, and the number of stores at the end of the period will be 296, a decrease of 17.5% from 359 stores at the end o
Slide 23: UNITED ARROWS LTD. Retail Stores Opened/Closed
01 Overview of FY23 30 Business Results UNITED ARROWS LTD. Retail Stores Opened/Closed 9M Results Full-year forecast . No. or No. of . No. “ StoresaSO! Opened Closed storesasof Opened Closed ~ > *° period-end period-end 9M-end of previous (Forecast) UNITED ARROWS LTD. Total 216 3 1 218 3 6 213 Trend
Slide 24: Revision of the consolidated business results forecast
Revision of the consolidated business results forecast for the current fiscal year announced on February 6. Sales have remained unchanged at ¥130,000 million. Gross margin will be 51.2%, up 0.7 percentage points from the plan at the beginning of the period. Although being affected by currency fluctu
Slide 25: Comparison of revised plan with previous year and three years ago
Comparison of revised plan with the previous year and three years ago. Sales will be 109.8% and 82.6% compared to the previous year and three years ago, respectively. Approximately 92% compared to three years ago when excluding the effects of changes in consolidation structure and revenue recognitio
Slide 26: Efforts over 4Q and the next fiscal year
Efforts over 4Q and the next fiscal year Amid cost pressure rising, we revised prices in line with quality improvements over the fall and winter. At this point, we have not felt any significant negative impact. However, there are subtle variances of the impact depending on business and sales channel
Slide 27: Message from Yoshinori Matsuzaki, Representative Director, President and CEO
UNITED ARROWS LTD. 02 Message from Yoshinori Matsuzaki Representative Director, President and CEO PAGE | 27 27
Slide 28: CEO message: introduction
I am Matsuzaki, Representative Director, President and CEO. I would like to take this opportunity to express my gratitude to you for your continuous support. We have two months to go before closing the current medium-term plan. Today, I would like to talk about the new medium-term management plan th
Slide 29: Review of the current medium-term plan
Starting with the current medium-term plan, the unpredictable pandemic has put us in a situation which has resulted in a significant difference in results to our initial forecasts, and I apologize for any concern this has caused. Over the two years since I took up office, we have implemented efforts
Slide 30: Direction of the new medium-term management plan
From the current medium-term plan that focuses on solidifying our foothold through these efforts over two years, we will finally embark on offensive-strategy management in the new medium-term plan. Details, specific initiatives and targets will be outlined in an upcoming announcement. Today, I would
Slide 31: Aiming for high added value and high gross margin
Secondly, we will aim for high added value, in other words, a high gross margin. In the midst of an uncertain environment, we will pave the way for the future with various scenarios, and these changes are both a threat and an opportunity for growth. In order to continue to operate sustainably in suc
Slide 32: Closing remarks
The briefing today has been provided as a brief outline. I would like to reiterate that the strength of United Arrows lies in its products and customer service, which provide added value, and we believe that we need to reestablish our brand by refining these strengths. Today, we have announced an up
Slide 33: Reference Materials
B unireo annows tro Reference Materials PAGE 33 33
Slide 34: Management policy for fiscal year ending March 2023
As our management policy for the fiscal year ending March 31, 2023, we have set “providing inspiration, wonderful customer services, attractive products, great service, great products”. As indicated by the “Creating Five Values: Value for Customers, Value for Employees, Value for Business Partners,
Slide 35: Key initiatives to realize Providing Inspiration
As a key initiative to realize “Providing inspiration”, we will promote the recovery of existing stores, and will proceed with three initiatives: Impressive customer service, Creation of thrills, and the Challenge for new UA. Impressive customer service will increase engagement with customers throug