Slide 1: Financial Results Presentation Material
Fiscal year ended February 20, 2023 Financial Results Presentation Material OKUWA Co., Ltd. (8217) April 4, 2023 Copyright © OKUWA Co., Ltd. All Rights Reserved. -1-
Slide 2: Consolidated Sales Results
Consolidated Sales Results (Million yen, %) Fiscal year Fiscal year Year-on- Comparison ended ended Forecast year against February 20, February 20, change forecast 2022 2023 Operating income 266,532 246,877 245,500 － 100.6 Operating profit 5,233 2,927 3,700 55.9 79.1 Ordinary profit 5,463 3,148 3,90
Slide 3: Consolidated Operating Income by Company
Consolidated Operating Income by Company (Reference: Before application of the Accounting Standard for Revenue Recognition) (Million yen, %) Fiscal year Fiscal year ended ended Year-on- Results February 20, February 20, year change 2022 2023 OKUWA 262,734 241,174 257,609 98.0 Hiramatsu 6,229 4,337 4
Slide 4: Consolidated Ordinary Profit by Company
Consolidated Ordinary Profit by Company (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year February 20, 2022 February 20, 2023 change OKUWA 5,303 3,222 60.8 Hiramatsu (62) (66) － OAK FOODS 72 86 118.2 Retail Backoffice Support 92 50 55.1 SUNRISE 102 66 65.5 Consolidation adjustment (1
Slide 5: Consolidated Management Indicators
Consolidated Management Indicators Fiscal year ended Fiscal year ended Fiscal year ended February 20, 2021 February 20, 2022 February 20, 2023 Operating profit/Operating income (%) 2.81 1.96 1.19 Ordinary profit/Operating income (%) 2.87 2.05 1.28 Return on equity (ROE, %) 4.97 1.96 1.19 Return on a
Slide 6: Consolidated Cash Flows
Consolidated Cash Flows (Million yen) Fiscal year ended Fiscal year ended Year-on-year February 20, 2022 February 20, 2023 change Cash and cash equivalents at 18,239 16,668 (1,570) beginning of period Operating CF 8,590 5,931 (2,659) Investing CF (7,016) (6,678) 337 Financing CF (3,144) (535) 2,609
Slide 7: Non-consolidated Sales Results
Non-consolidated Sales Results (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year Comparison Forecast against February 20, 2022 February 20, 2023 change forecast Operating income 262,734 241,174 240,000 － 100.5 Net sales from direct 238,660 234,820 － 98.4 － operation Gross profit 67,0
Slide 8: Non-consolidated Net Sales from Existing Stores
Non-consolidated Net Sales from Existing Stores Year-on-year change Number of Average sales Net sales Number of for existing stores (%) customers per customer Unit price products per product purchased 1H 97.5 96.6 101.0 97.8 103.2 2H 99.9 98.0 101.9 97.8 104.3 Full year 98.7 97.3 101.5 97.8 103.8 (V
Slide 9: Non-consolidated Net Sales by Region
Non-consolidated Net Sales by Region (Million yen, %) Year-on-year Fiscal year ended Fiscal year ended Year-on-year change for February 20, 2022 February 20, 2023 change existing stores Wakayama 71,801 72,583 101.1 99.4 Nara 48,907 47,699 97.5 98.6 Osaka 34,523 33,823 98.0 98.0 Hyogo 1,527 720 47.1
Slide 10: Non-consolidated Net Sales by Business Type
Non-consolidated Net Sales by Business Type (Million yen, %) Year-on-year Fiscal year ended Fiscal year ended Year-on-year change for February 20, 2022 February 20, 2023 change existing stores SC 12,421 9,568 77.0 100.4 SSM 111,543 110,296 98.9 98.9 SM 9,025 8,567 94.9 101.1 Regular 132,990 128,432
Slide 11: Non-consolidated Net Sales by Department
Non-consolidated Net Sales by Department (Million yen, %) Year-on-year Fiscal year ended Fiscal year ended Year-on-year change for February 20, 2022 February 20, 2023 change existing stores Fresh foods 101,251 99,106 97.9 98.9 Processed foods 103,046 101,910 98.9 98.2 Foods 204,298 201,017 98.4 98.5
Slide 12: Non-consolidated Gross Profit Margin by Department
Non-consolidated Gross Profit Margin by Department (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year February 20, 2022 February 20, 2023 change Fresh foods 32.5 32.6 +0.0 Processed foods 23.2 23.8 +0.6 Foods 27.8 28.1 +0.3 Household supplies 28.5 28.4 (0.1) Clothing 35.2 35.4 +0.2 To
Slide 13: Non-consolidated SG&A Expenses
Non-consolidated SG&A Expenses (Million yen, %) Ratio to net sales Fiscal year ended Fiscal year ended Year-on-year Ratio to net (fiscal year ended February 20, 2022 February 20, 2023 change sales February 20, 2022) Net sales 253,233 229,087 － 100.0 100.0 Selling expenses 3,836 2,000 － 0.9 1.5 Perso
Slide 14: Non-consolidated Capital Expenditures
Non-consolidated Capital Expenditures (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year February 20, 2022 February 20, 2023 change New stores 1,652 2,078 125.8 Existing stores, etc. 6,005 4,457 74.2 Systems 975 963 98.8 Construction basis 8,633 7,500 86.9 Key descriptions New stores
Slide 15: Review of the Non-consolidated Operating Results
Review of the Non-consolidated Operating Results Main factors for decreased profit 1. Lower gross profit due to sluggish net sales Fiscal year ended February 20, 2022: 67,063 million yen Fiscal year ended February 20, 2023: 66,602 million yen Down 461 million yen 2. Higher utilities expenses due to
Slide 16: New Stores, Major Renovations, and Closed Stores
New Stores, Major Renovations, and Closed Stores Open/ Business type (directly- Store name Prefecture Closed operated sales floor area) <New stores> Mar. 24 Nakatsugawa Nakamura Store Gifu SSM 2,459㎡ 2 Oct. 28 MESA Iwade Store Wakayama MESA 2,989㎡ <Major renovations> Mar. 3 Kishiwada Hatsuta Store O
Slide 17: New Store: MESA Iwade Store
New Store: MESA Iwade Store October 28, 2022 MESA Iwade Store (Iwade-shi, Wakayama) MESA Iwade Store is the seventh MESA-type store. Under the basic concept of “attention to high quality and an added sense of satisfaction,” the store aims to attract customers from a wide area with a selection of sop
Slide 18: Major Renovation: Iga Shindo Store
Major Renovation: Iga Shindo Store November 10, 2022 Iga Shindo Store (Iga-shi, Mie) Iga Shindo Store has marked its 18th anniversary. For greater convenience, the store has changed the layout, extended the range of OKUWA brand products, adopted reach-in showcases, and taken other measures. -18- Cop
Slide 19: Non-consolidated Store Distribution
Non-consolidated Store Distribution (As of Feb. 20, 2023) Total by region Wakayama 31 7 11 3 52 Nara 22 5 5 1 33 Osaka 16 2 1 － 19 Hyogo － － 1 1 (Kinki area) 69 14 18 4 105 Mie 14 3 6 － 23 Gifu 4 (PM: 1) 10 － 1 (PM: 1) 15 Aichi 8 (PM: 3) 1 － 2 (PM: 2) 11 Shizuoka 1 (PM: 1) 1 － － 2 (Tokai area) 27 15
Slide 20: Non-consolidated Net Sales by Region and Business Type
Non-consolidated Net Sales by Region and Business Type (As of Feb. 20, 2023) Total by region Wakayama 38,378 25,122 3,805 5,276 72,583 Nara 28,036 13,455 4,660 1,557 47,699 Osaka 27,459 5,376 986 － 33,823 Hyogo 52 － 667 － 720 (Kinki area) 93,928 43,944 10,120 6,833 154,826 Mie 17,965 8,116 3,748 － 2
Slide 21: Product Measures: OKUWA Brand (1)
Product Measures: OKUWA Brand (1) OKUWA Premium Extra Bananas • Cultivated in the Philippine highlands, only at designated farms where high quality bananas grow • Need longer time than usual bananas for cultivation and extremely rich in sweetness (Fiscal 2022 sales) Approx. 100 million yen -21- Copy
Slide 22: Product Measures: OKUWA Brand (2)
Product Measures: OKUWA Brand (2) OKUWA-Deli Warm, Japanese-style delicatessen foods prepared in stores First introduced at Nakatsugawa Nakamura Store opened in 2022 and now available at 50 stores (Fiscal 2022 sales) Approx. 270 million yen -22- Copyright © OKUWA Co., Ltd. All Rights Reserved.
Slide 23: Product Measures: OKUWA Brand (3)
Product Measures: OKUWA Brand (3) Chef products Aiming for differentiating from competitors by expanding the range of products supervised by renowned chefs under exclusivity contracts Thick-sliced silver salmon bento (Renovated Iga Shindo Store opened on Nov.10) (Single item sales) Display at a gond
Slide 24: Product Measures: OKUWA Brand (4)
Product Measures: OKUWA Brand (4) Sustainable product development Organic & Fair Trade series -24- Copyright © OKUWA Co., Ltd. All Rights Reserved.
Slide 25: Management Policy for Fiscal Year Ending February 20, 2024
Management Policy for Fiscal Year Ending February 20, 2024 Copyright © OKUWA Co., Ltd. All Rights Reserved. -25-
Slide 26: Consolidated Financial Results Forecast
Consolidated Financial Results Forecast Full year (Million yen) Fiscal year ended February 20, 2023 Fiscal year ending February 20, 2024 Year-on-year change (%) Operating income 246,877 253,000 102.5 Operating profit 2,927 3,400 116.1 Ordinary profit 3,148 3,600 114.3 Profit* 928 1,200 129.2 *Profit
Slide 27: Non-consolidated Financial Results Forecast
Non-consolidated Financial Results Forecast Fiscal year ended Fiscal year ending Year-on-year Full year (Million yen) February 20, 2023 February 20, 2024 change (%) Operating income 241,174 252,000 104.5 Operating profit 2,824 3,300 116.8 Ordinary profit 3,223 3,500 108.6 Profit 1,031 1,200 116.4 Fi
Slide 28: Non-consolidated Financial Results Forecast
Non-consolidated Financial Results Forecast Key points in financial results forecast Operating income: 252.0 billion yen • Net sales from existing stores: 102.9% year on year • Net sales from direct operation: 104.6% year on year • Two stores to newly open, one store to undergo major renovation • Sm
Slide 29: Non-consolidated Gross Profit Target
Non-consolidated Gross Profit Target Priority issues for fiscal 2023 (1) Waste reduction in the management process Reduction target: 300 million yen annually Waste reduction of 100 million yen, Waste rate of 0.28% Discount reduction of 200 million yen, Discounted product rate of 5.20% (2) Share incr
Slide 30: Product Measures: OKUWA Brand
Product Measures: OKUWA Brand Sales results of OKUWA brand products Three years have passed since the brand launch, and sales have been steadily growing. SKU Sales (million yen) 771 2022 21,830 604 2021 18,740 442 2020 13,500 • Total sales of foods (excluding household supplies and clothing). -30- C
Slide 31: Product Measures: OKUWA Brand
Product Measures: OKUWA Brand Fiscal 2023 initiatives for OKUWA brand Take advantage of products unique to OKUWA to differentiate from other companies, motivate customers to visit our stores, and improve net sales and gross profit, thereby creating a virtuous cycle. (Fiscal 2022 results) (Fiscal 202
Slide 32: Product Policy: Bakery
Product Policy: Bakery Bolstering scratch bakeries’ competitiveness Shift from frozen dough to scratch dough to attract more customers (Kishiwada Hatsuta Store, renovated Mar. 3, 2022) Bakery results (compared with fiscal 2021) Sales composition ratio Roughly doubled in foods (1) Introduce scratch d
Slide 33: Product Measures: Clothing
Product Measures: Clothing Clothing department’s initiatives to revitalize existing stores (1) Renovation of sales floors Renovated sales floors in 12 stores, mainly of which are Super Centers (approx. 10% growth in department sales) (2) Introduction of priority categories Set priority categories, s
Slide 34: DX: Electronic Shelf Labels
DX: Electronic Shelf Labels Promoting the introduction of electronic shelf labels • Trials at two stores demonstrated that we can expect cost reduction in relation to (1) Price label errors, (2) POP installation, etc. (Cost reduction per store) 4,124 thousand yen/year • In fiscal 2023, we will revie
Slide 35: DX: AI Prediction of the Number of Customers
DX: AI Prediction of the Number of Customers (1) Improving accuracy of product ordering AI predicts the number of customers two days in advance. Stable operation with relative errors of Relative error from the actual numbers 0.5% or lower Contributing to Fiscal 2022 0.4% ・ Improved accuracy of order
Slide 36: DX: Online Supermarket
DX: Online Supermarket Current state of the online supermarket system This year marks the 18th anniversary of the online supermarket, launched in 2006 and now available for 20 stores. The system renewal was completed in fiscal 2022. We intend to leap forward in fiscal 2023. 1000 900 926 917 911 800
Slide 37: DX: Online Supermarket
DX: Online Supermarket Initiatives to expand online supermarket sales System renewal completed in February 2023 (for all 20 stores) Achieved greater convenience by allowing customers to • Use the smartphone app, and collect O-CARD points Plan to open three new online supermarket stores in fiscal 202
Slide 38: Sustainability (1)
Sustainability (1) Plastic bottle volume reduction and collection system Installed at 38 stores in fiscal 2022 (41 stores in total) Collected 931,833 bottles (26,669 kg) Aim to install at around 100 stores in total by the end of fiscal 2023 Donation of polished rice Donated to children’s cafeterias,
Slide 39: Sustainability (2)
Sustainability (2) Self-consumption type solar power plants Fiscal 2022: Introduced at seven sites Fiscal 2023: Plan to commence operation (Planned annual power generation) at two additional sites Approx. 7 million kWh ⇒ Currently in operation at thirteen sites Solar power plant in operation at Supe
Slide 40: Sustainability (3)
Sustainability (3) Environmental education for elementary school children Our employees visited elementary schools to and give an seminar on the environment and sustainability. Then the children were invited to our sales floor and back office of a nearby store to deepen their understanding. We will
Slide 41: Sustainability (4)
Sustainability (4) Response to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations We are advancing a company-wide analysis for two scenarios, led by the Sustainability Promotion Office. 1.5℃ scenario Progress in measures against climate change (high financial impact) Insu
Slide 42: Personnel Policy
Personnel Policy Human capital management (1) Promotion of active participation by women (three-year plan) In fiscal 2022, we offered a training program for 180 female employees to motivate them to assume management positions In fiscal 2023, we will offer such training for selected members We will a
Slide 43: Sales Measures: Reorganization of Store Formats
Sales Measures : Reorganization of Store Formats Restructuring of SuC and PRC (small store) business formats ◆Fiscal 2023 slogan “Reorganize the store formats” Reorganize the SuC Business Division and the PRC ◆Reorganization of sales divisions Business Division ◆Establishment of Food Division Establ
Slide 44: Collaboration with Other Industries
Collaboration with Other Industries Investment in SPACE ONE CO., LTD. On December 16, we invested in SPACE ONE CO., LTD., which has set up Space Port Kii, Japan’s first private sector small rocket launch pad, in Kushimoto, Wakayama. By investing in other industries, we will continue to engage in act
Slide 45: New Store Openings
New Store Openings (1) OKUWA Kasugai Store (2) OKUWA Yao Korigawa Store Date of opening April 12 Date of opening April 28 Location Kasugai-shi, Aichi Location Yao-shi, Osaka Business type SSM Business type SSM Directly-operated Directly-operated 3,224 m2 1,723 m2 sales floor area sales floor area Ka