Decollte Holdings Corporation · TSE:7372
Decollte — FY2022 Earnings Presentation
60 slides from Decollte's earnings presentation, Nov 4, 2022
Slide 1: Presentation Material of Results for Fiscal Year Ended September 2022 and Medium-Term Management Plan
Presentation Material of Results for Fiscal Year Ended September 2022 and Medium-Term Management Plan November 4, 2022 Decollte Holdings Corporation
Slide 2: Table of Contents
Table of Contents 1 Results for Fiscal Year Ended P3 September 2022 2 Growth Strategy and Medium-Term P18 Management Plan 3 Company Highlights P34 4 Structural Changes in the Wedding P44 Industry 5 Risk Information P50 6 Appendix P52 © Decollte Holdings Corporation 2
Slide 3: Results for Fiscal Year Ended September 2022
Results for Fiscal Year Ended September 2022 © Decollte Holdings Corporation 3
Slide 4: Performance Summary (Fiscal year ended September 2022)
Performance Summary (Fiscal year ended September 2022) Achieved record-high revenue (+15.9% YoY) and operating profit (+58.0% YoY) despite surge in COVID-19 cases in the second and fourth quarters. Full-year Full-year Full-year YoY forecasts Comparison (Millions of yen) results of results of change
Slide 5: Change in Revenue from Previous Fiscal Year
Change in Revenue from Previous Fiscal Year Revenue for the current fiscal year totaled 5.32 billion yen (+15.9% YoY). Growth of new photo wedding studios and existing studios (+7.0% YoY) contributed significantly to revenue growth. (Millions of yen) 6,000 43 149 286 5,000 549 5,322 4,000 4,592 3,00
Slide 6: Change in Operating Profit from Previous Fiscal Year
Change in Operating Profit from Previous Fiscal Year Operating Profit for the current fiscal year totaled 1.37 billion yen (+58.0% YoY). Largely increased with gain on sales of fixed asset in addition to the revenue increase centering on the studio business. (Millions of yen) 2,000 168 437 145 1,500
Slide 7: Analysis of Key Cost Variables
Analysis of Key Cost Variables Personnel expenses increased due to increased hiring and training to match studio increase and accelerated pace of openings. Increased advertising expenses but maintained flexible control in light of the COVID-19 infection status. (Millions of yen) 3,000 [Advertising E
Slide 8: Profit from Continuing operations
Profit from Continuing operations Profit of 1,010 million yen includes 720 million yen profit from continuing operations. Absorbed increased cost while affected by COVID-19 infections resulting in profit increase of 200 million yen and 39.9% YoY. (Millions of yen) Gain on sale of fixed assets [Break
Slide 9: Performance Summary (4Q FYE Sep. 2022 [Consolidated])
Performance Summary (4Q FYE Sep. 2022 [Consolidated]) The number of photo shootings at existing studios decreased year-on-year with the impact of the seventh waves of COVID-19 infections, but record-high revenue was posted as the fourth quarter with increased average customer spend and contribution
Slide 10: Change in Quarterly Results (Adjusted Operating Profit)
Change in Quarterly Results (Adjusted Operating Profit) Record-high 4Q revenue despite the impact of the seventh wave of infections. Adjusted operating profit also recovered to the pre-pandemic level despite being affected by cost of studio openings. Revenue Adjusted Operating Profit (Millions of ye
Slide 11: Change in Performance KPIs: YoY Comparison of Existing Studios
Change in Performance KPIs: YoY Comparison of Existing Studios Average spend largely increased partially due to introduction of Live Retouch and increased number of costume used. Average spend in cumulative total largely increased by 10.9% year-on-year Net sales of existing studios increased by 7.0%
Slide 12: Consolidated Cash Flow (CF)
Consolidated Cash Flow (CF) Operating CF increased 1,150 million yen due to revenue growth during the busy seasons. Balance of cash and deposits increased despite negative financial CF due to 600 million yen of purchase of treasury shares, etc. (Millions of yen) 3,000 198 2,000 1,288 1,152 1,288 1,3
Slide 13: Summary of Consolidated Financial Position Statement
Summary of Consolidated Financial Position Statement (vs. Previous Fiscal Year-End) Right-of-use assets and lease liabilities equivalent to studio rents increased due to new studio openings. Despite the increase in profit, purchase of treasury shares limited increase in equity. (Millions of yen) End
Slide 14: Forecasts for FYE Sep. 2023 (Comparison with Previous Fiscal Year)
Forecasts for FYE Sep. 2022 Part 1 (Comparison with Previous Fiscal Year) Revenue of 6.92 billion yen (+30.2% YoY) and operating profit of 1.23 billion yen (practically +25.2% YoY) with opening of multiple HAPISTA studios in addition to growth of the photo wedding business. Forecasts for Results of
Slide 15: Forecasts for FYE Sep. 2023 (Major Initiatives)
Forecasts for FYE Sep. 2022 Part 2 (Major Initiatives in FYE Sep. 2023) Continue openings of photo wedding studios in metropolitan areas. Full-fledged multiple studio openings by accelerating openings of HAPISTA for anniversary photo services. [Photo Wedding Services] With full-year operation of s
Slide 16: Status of Growth Measures: mixi Capital and Business Alliance
Status of Growth Measures Concluded capital and business alliance contract with mixi, Inc. as of September 28, 2022. Proceed specific initiatives towards resolution of capital and business issues as well as further growth. [Overview of Alliance] mixi, Inc. acquired 1,532,400 shares of our common s
Slide 17: Status of Growth Measures: New Studio Openings
Status of Growth Measures One photo wedding studio and one anniversary studio opened in the fourth quarter. The Nagoya area will have a structure based on two studios and proceed with expansion of trade area. Studio 8 Nagoya Ekimae studio opened Opening of HAPISTA Hirakata T-SITE studio Second studi
Slide 18: Growth Strategy and Medium-Term Management Plan
Growth Strategy and Medium-Term Management Plan © Decollte Holdings Corporation 18
Slide 19: Growth Strategy Summary
Growth Strategy Summary In addition to steady growth of the photo wedding business, we will capture digital photo needs in the life event field and enhance life-time- value of customers for growth. 1 Growth of photo wedding business Continuous new studio openings Our target market (increase in numbe
Slide 20: Medium-Term Management Plan: Summary
Medium-Term Management Plan: Summary Accelerate growth of anniversary photo business “HAPISTA” alongside further growth of mainstay photo wedding service, creating the foundation of a life photo company. Medium-term management plan (FYE Sep. 2023 to FYE Sep. 2025) term management plan From a leading
Slide 21: Medium-Term Management Plan: P&L Summary
Medium-Term Management Plan: P&L Summary Revenue growth rate of 22-30% per year due to accelerated studio openings. operating profit growth rate*4 of 25% to 35% in spite of investments accompanying new studio openings. FYE FYE FYE FYE (Millions of yen) Sep. 2022 Sep. 2023 Sep. 2024 Sep. 2025 (Actual
Slide 22: Medium-Term Management Plan: Photo Wedding Service
Medium-Term Management Plan: Photo Wedding Service For the time being, we will step up studio openings in major metropolitan areas to capture growing demand in key markets. We will maintain an operating margin above 19% and a high growth rate ranging from 20-26%. FYE FYE FYE FYE (Millions of yen) Se
Slide 23: Capturing Photo Wedding Needs by Expanding Nationwide (1/3)
1 Growth of photo wedding business Capturing Photo Wedding Needs by Expanding Nationwide (1/3) Increasing both terminal studios and satellite studios in metropolitan areas based on dominant strategy. Dominant strategy in metropolitan areas Terminal studio In metropolitan areas (capital area, Kinki
Slide 24: Capturing Photo Wedding Needs by Expanding Nationwide (2/3)
1 Growth of Photo Wedding Business Capturing Photo Wedding Needs by Expanding Nationwide (2/3) Promote opening studios in regional cities by lowering studio opening costs through the use of centralized operation. (FYE Sep. 2025 onward) Studios in Regional Cities As the number of studios increases,
Slide 25: Capturing Photo Wedding Needs by Expanding Nationwide (3/3)
1 Growth of Photo Wedding Business Capturing Photo Wedding Needs by Expanding Nationwide (3/3) Developing attractive photography plans and opening studios in tourist locations across Japan that attract many visitors to capture demand during the off-season, and respond to growing domestic resort dema
Slide 26: Capturing Diversifying Wedding Needs by Focusing on Photos (1/4)
1 Growth of Photo Wedding Business Capturing Diversifying Wedding Needs by Focusing on Photos (1/4) Perceptions of marriage are changing faster amidst the pandemic. The proportion of couples who choose not to have ceremony and reception is increasing, with these couples continuing to account for ove
Slide 27: Capturing Diversifying Wedding Needs by Focusing on Photos (2/4)
1 Growth of Photo Wedding Business Capturing Diversifying Wedding Needs by Focusing on Photos (2/4) Aiming to further expand the photo wedding market and acquire more clients by capturing demands from couples who use photography service of wedding ceremony/reception service providers and couples who
Slide 28: Capturing Diversifying Wedding Needs by Focusing on Photos (3/4)
1 Growth of Photo Wedding Business Capturing Diversifying Wedding Needs by Focusing on Photos (3/4) Increasing prices and capturing needs by providing a wide range of services, including activities (= experiences), with a focus on photos that cover all wedding-related content. Formats that continue
Slide 29: Capturing Diversifying Wedding Needs by Focusing on Photos (4/4)
1 Growth of Photo Wedding Business Capturing Diversifying Wedding Needs by Focusing on Photos (4/4) Identifying changes in consumer demand for photography ahead of others, developing services in response to these, and ensuring we don’t miss out on capturing new needs (examples of new options). Photo
Slide 30: Accelerating Expansion into the Life Event Field (1/3)
2 Accelerating Expansion into the Life Event Field Capturing New Consumer Needs by Developing Services According to Recent Trends (1/3) Accelerating business development of HAPISTA and enhancing life event field other than weddings. Increase the pace of new studio openings from FYE Sep. 2023 for ful
Slide 31: Accelerating Expansion into the Life Event Field (2/3)
2 Accelerating Expansion into the Life Event Field Capturing New Consumer Needs by Developing Services According to Recent Trends (2/3) Leveraging technology and expertise cultivated in the photo wedding business to open studios and expand our high-quality anniversary photo business (HAPISTA), which
Slide 32: Accelerating Expansion into the Life Event Field (3/3)
2 Accelerating Expansion into the Life Event Field Capturing New Consumer Needs by Developing Services According to Recent Trends (3/3) Launched NALU photo service for coming-of-age ceremonies and began commercialization. Beginning preparations to resume services for foreign tourists once restrictio
Slide 33: Future Outlook: Life Photo Company
Future Outlook Having sophisticated photo techniques at the core, we aim to be a “Life Photo Company” that provides people with photos they will want to keep forever and emotional experiences that Life Photo Company will stay with them through services delivering real value and that offers a place f
Slide 34: Company Highlights
Company Highlights © Decollte Holdings Corporation 34
Slide 35: Features and Strengths of Our Photo Weddings
Features and Strengths of Our Photo Weddings Decollte has built an encompassing business model and operation dedicated to photo weddings. The result is being capable to achieve both reliable, high-quality services and high profit margins. 1 Customer 2 Contract 3 Costume 4 Hair and 5 Shooting attract
Slide 36: Company Highlights: Summary
Company Highlights: Summary In-housing of online customer acquisition, professional staff, dedicated facilities and items, the sources of our photo wedding service’s competitive edge. Scaling up through growth will solidify our competitive edge. External environment of photo Our growth Sources of De
Slide 37: In-House Development of Professionals
1 In-House Development of Professionals In-House Development of Professionals Decollte has a competitive number of professionals as permanent employees based on our unique education program. Secure many professionals Our strength in hiring and retaining human resources Number of professionals and pl
Slide 38: Unique Professional Development System
1 In-House Development of Professionals Unique Professional Development System We have built a unique educational curriculum that allows those who want to be professionals to acquire many skills in a short period of time, instead of the traditional teacher-apprentice system. It is directly linked to
Slide 39: In-House Development of Facilities/Items (e.g., Costumes)
2 In-House Development of Photo Shoot Facilities/Items (e.g., Costumes) In-House Development of Facilities/Items (e.g., Costumes) Taking advantage of our size (photo shooting for 24,000+ couples per year), we produce our own costumes, indoor gardens, etc. We generate cost competitiveness and increas
Slide 40: Our Ability to Attract Customers Through Online Search/Social Media
3 In-Housing of Online Marketing Function Our Ability to Attract Customers Through Online Search/Social Media Attracting customers is key for photo weddings, which are special experiences. We are strong in service websites and social media, the main media customers use for selection. Media used to s
Slide 41: High Level of Customer Satisfaction for Our Services
3 In-Housing of Online Marketing Function 2 High Level of Customer Satisfaction for Our Services Our services are rated highly by users. The sharing of positive experiences through websites 1and social media by users directly results in better recognition. 0 Strong customer satisfaction for our serv
Slide 42: Efficient Staffing to Cater for Busy Seasons and Off-Seasons
Our Competitive Edge Efficient Staffing to Cater for Busy Seasons and Off-Seasons While there is a great gap between the busy seasons and off-seasons for weddings, there is little difference between days of the week. Efficient staffing also enables us to capture demand during busy seasons. Percentag
Slide 43: Change in Operation Status/Productivity
Our Competitive Edge Change in Operation Status/Productivity Sales per photographer grew 15.4% YoY despite increasing headcount. We increased the number of photo planners (customer service) and operational efficiency through online customer service. Sales per photographer and number of photography c
Slide 44: Structural Changes in the Wedding Industry
Structural Changes in the Wedding Industry © Decollte Holdings Corporation 44
Slide 45: Proportion of Newly Married Couples Having Photo Weddings
Proportion of Newly Married Couples Having Photo Weddings The percentage of couples having photo weddings is high at 52.8%. The percentage who have photos taken by specialized companies like us is 25.1%, so there is considerable room for growth in the future. Number of couples who used specialized c
Slide 46: Changes in Number of Marriages and Photo Wedding Market
Changes in Number of Marriages and Photo Wedding Market The number of marriages is declining each year. However, the current size of the photo wedding market is around 52.1 billion yen, and it is expected to keep growing steadily. Changes in number of marriages in Japan Size of photo wedding market*
Slide 47: Wedding Industry Trends
Wedding Industry Trends Interest in having wedding ceremonies/receptions with the attendance of guests is trending downward. Interest in non-traditional formats of wedding such as photo weddings, wedding photo shoots on a separate day, and online weddings is growing. Google search trends for traditi
Slide 48: Increasing Percentage of Couples with Separate Photo Shoot
Increasing Percentage of Couples with Separate Photo Shoot by Wedding Hall or Reception Vendor The proportion of couples who have photo shoots on a separate day is rising every year. The emergence of services meeting customer needs and couples’ desire to have photos that cannot be taken on the day o
Slide 49: Existence of Photo Wedding Needs among Couples Not Having a Ceremony
Existence of Photo Wedding Needs among Couples Who Choose Not to Have a Wedding Ceremony/Reception Photo weddings provide the experience of being a bride at a lower cost than a wedding ceremony. They are also attracting interest as a new wedding format since the experience can be preserved in photos
Slide 50: Risk Information
Risk Information © Decollte Holdings Corporation 50
Slide 51: Risk Information
Risk Information The main risks recognized as having the potential to materially impact achieving the company’s growth or executing its business plan, along with the countermeasures addressing them, are as shown below. For other risks, please refer to “Other Business Risks, Etc.” in the annual secur
Slide 52: Appendix
Appendix © Decollte Holdings Corporation 52
Slide 53: Cost Breakdown
Cost Breakdown Cost Breakdown (Photo Wedding Business) Advertising expenses Purchases 8.0% 11.0% Commissions expenses 2.0% Costume repair costs 1.4% Other expenses 販売 8.9% 管理費 メイク 売上原価 Rent expenses 8.8% Total labor costs 25.1% Note: The studio cost breakdown (cost of sales + SG&A expenses) for the
Slide 54: Changes in Annual Studio Openings and Total Number of Studios
Changes in Annual Studio Openings and Total Number of Studios (Unit: studios) 30 Total number 26 of studios 25 1 Pet*4 22 5 19 19 20 1 Anniversary*5 20 17 18 1 3 15 2 2 2 2 2 15 11 12 2 9 1 1 Wedding 10 20 7 1 17 17 17 18 15 16 5 13 5 10 11 2 2 7 8 5 2 2 0 2008 2009 2010 2011 2012 2013 2014 2015 201
Slide 55: Approximate Calculation Methods for Couples Ratio and Photo Wedding Market Size
Approximate Calculation Methods for the Ratio of Couples Using Specialized Companies, Wedding Halls, Etc. and the Size of the Photo Wedding Market Breakdown of the number of newly married couples Breakdown of the number of couples having a photo in 2018*1 wedding in 2018*1 380,000 couples 244,000 co
Slide 56: Markets to Be Approached (TAM: Total Addressable Market)
Markets to Be Approached (TAM: Total Addressable Market) Life Photo Company Childbirth/childrearing Adolescence Wedding Family life Senior life Entrance/ Maternity Wedding End of life graduation photos anniversaries photos ceremonies Photo weddings Approx. Approx. Photogenic Journey Approx. Approx.
Slide 57: Assumptions for Calculating Approximate Value of Each TAM (1/3)
Assumptions for Calculating Approximate Value of Each TAM (1/3) Number of people Total amount Event Category Unit price Total (100 millions of Calculation assumptions / source Age Gender (thousands of yen） people) The number of pregnant women is assumed to be equal to the number of 0-year-olds. Mate
Slide 58: Assumptions for Calculating Approximate Value of Each TAM (2/3)
Assumptions for Calculating Approximate Value of Each TAM (2/3) Number of people Total amount Event Category Unit price Total (100 millions of Calculation assumptions / source Age Gender (Thousands of yen） Couples) Photo weddings 168,500 yen 586 988 Source for price per photo wedding: “Zexy Kekkon T
Slide 59: Assumptions for Calculating Approximate Value of Each TAM (3/3)
Assumptions for Calculating Approximate Value of Each TAM (3/3) Number of people Total amount Event Category Unit price Total (100 millions of Calculation assumptions / source Age MF (thousands of yen） people) Dog 15,000 yen 7,152 1,073 The number of people indicates the number of households keeping
Slide 60: Disclaimer and Contact Us
Disclaimer This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Contact Us Contact information for Inquiries about This Presentation and Other