Premium Group Co., Ltd. · TSE:7199
Premium — 1H FY2024 Earnings Presentation
38 slides from Premium's earnings presentation, Oct 27, 2023
Slide 1: Financial Results Presentation for 1H of FY Ending March 31, 2024
TSE Prime Section: 7199 Premium Group Co., Ltd. Financial Results Presentation for 1H of FY Ending March 31, 2024 October 27, 2023
Slide 2: Agenda
1. Financial Highlights 2. Summary of Financial Results 3. Car Premium 4. Finance Segment 5. Automobile Warranty Segment 6. Auto Mobility Segment 7. Sustainability 8. Appendix Access videos of our financial results presentations on our IR website at https://ir.premium-group.co.jp/en/library/movie.ht
Slide 3: 1. Financial Highlights
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Slide 4: Highlights from 1H of FY Ending March 31, 2024 (1)
Highlights from 1H of FY Ending March 31, 2024 (1) ◼ Used vehicle prices remain elevated despite signs of normalization Used vehicle market (vehicles registered) recovered slightly ◼ Steady results in credit finance and automobile warranty Double digit topline (volume) growth ◼ In terms of rising in
Slide 5: Highlights from 1H of FY Ending March 31, 2024 (2)
Highlights from 1H of FY Ending March 31, 2024 (2) ◼ Each business segment is growing steadily, with both operating revenue and operating profit posting double-digit growth ◼ Future expected earnings also grew steadily. Stable earnings in the next FY and beyond to be stocked on BS (¥49.5 billion) ◼
Slide 6: Highlights from 1H of FY Ending March 31, 2024 (3)
Highlights from 1H of FY Ending March 31, 2024 (3) Progress of Medium-Term Management Plan, ONE & ONLY 2026 Car Premium Club Memberships Car Premium Dealer Progress: 46.3% Promoting initiatives to establish the Car Premium business model FY2026 target 2,317 5,000 ◼ Expanding services for Car Premium
Slide 7: 2. Summary of Financial Results
2. Summary of Financial Results 7
Slide 8: Consolidated Performance
Consolidated Performance (Millions of yen) ◼ Operating revenue rose 25.7% YoY to ¥15,056 million owing to the strong growth of each segment ◼ Operating profit was up 16.4% YoY to ¥2,763 million and profit before tax was up 19.2% YoY when excluding one-off losses FY2023 1H FY2024 1H YoY change Operat
Slide 9: Operating Expenses (Breakdown)
Operating Expenses (Breakdown) (Millions of yen) ◼ Despite expenses such as personnel expenses increased associated with sales expansion, total operating expenses roughly the same as the growth rate of operating revenues. ◼ The mass advertising carried out in Q4 FY2023 will be carried out throughout
Slide 10: Full-Year Performance Outlook
Full-Year Performance Outlook (Millions of yen) ◼ Operating revenue, profit before tax, and progress rate are according to full-year forecast ◼ Quarterly performance set to increase gradually from the further accumulation of loan receivables/automobile warranties Operating revenue Profit before tax
Slide 11: 3. Car Premium
4 n-SL=P 33. Car Premium
Slide 12: Car Premium Club Memberships
Car Premium Car Premium Club Memberships (Graph unit: Companies, Stores) ◼ Steady progress in building Car Premium Club, a paid membership organization for car dealers and maintenance facilities ◼ Aim to upsell to paid memberships, increase membership growth and boost membership fee revenue ◼ Planni
Slide 13: Initiatives for ethical practices in the used car industry
Initiatives for ethical practices in the used car industry ◼ Distrust and anxiety toward the used car industry due to fraudulent insurance claims by major used car dealers →Restore trust from customers and create an environment where customers can purchase used cars with peace of mind Current state
Slide 14: 4. Finance Segment
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Slide 15: Total Volume of New Loans
Finance segment Total Volume of New Loans (Graph unit: billions of yen, %) ◼ Used car market recovered only slightly, but our Car Premium strategy has been a success →Volume was up 31.2% and Auto PH maintained ¥200 million level will continue to promote Car Premium strategy * Please see page 31 for
Slide 16: Loan Receivables
Finance segment Loan Receivables (Graph unit: billions of yen, %) ◼ Loan receivables also grew, up 24.6% YoY ◼ Delinquency rate will remain stable at a low level ◼ Bolster headcount, DX measures (auto calling), collaborate with servicer subsidiary, and increase collection of delinquent receivables 5
Slide 17: Other Indicators
Finance segment Other Indicators ◼ Prioritized Car Premium Club* membership fee revisions → Refocusing on acquiring new members from the Q3 onward ◼ Not planning to increase sales staff significantly but rising PH (establishing mechanisms and making sales activities more efficient) Car Premium Deale
Slide 18: Segment Performance
Finance segment Segment Performance (Graph unit: billions of yen, %) ◼ Steady growth in sales and profit in the core credit business ◼ Interest rates have been on an upward trend since the previous fiscal year, but the Company flexibly passed the upward trend on to interest rates and other charges.
Slide 19: 5. Automobile Warranty Segment
5. Automobile Warranty Segment 19
Slide 20: Total Volume of New Warranties
Automobile warranty segment Total Volume of New Warranties (Graph unit: millions of yen) ◼ Automobile warranty volume up 19.3% YoY despite the used vehicle market recovering only slightly ◼ Volume of products developed in-house continued to grow, up 33.5% YoY ◼ Began offering Car Premium warranties,
Slide 21: Segment Performance
Automobile warranty segment Segment Performance (Millions of yen) ◼ Proactive sales and cost reduction activities in each business paid off, and performance grew steadily ◼ Continuous cost reduction activities were successful, and the cost of sales ratio gradually decreased (= gross profit margin in
Slide 22: 6. Auto Mobility Segment
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Slide 23: Performance
Auto mobility segment Performance (Graph unit: millions of yen) ◼ Focused on developing services for Car Premium Club* and creating new businesses. Increased largely in unison with each service FY23 1H FY24 1H YoY change Car Premium Club* Operating revenue 1,437 2,888 ＋101.0％ (Of which, Car Premium)
Slide 24: 7. Sustainability
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Slide 25: Initiatives for Sustainable Growth
Initiatives for Sustainable Growth Publication of Integrated Report 2023 ◼ First integrated report published (September 2023) after the start of the new medium-term management plan ◼ Promotion of ethical practices in the used car industry (Message from the President) ◼ About strengthening governance
Slide 26: 8. Appendix
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Slide 27: Company Profile
Company Profile Name Premium Group Co., Ltd. Securities Code / Exchange 7199 / Prime Market of Tokyo Stock Exchange May 25, 2015 Established Note: 2007: Established Premium Co., Ltd. (Former name: G-ONE Credit Services Co., Ltd.) Head Office The Okura Prestige Tower, 2-10-4 Toranomon, Minato-ku, Tok
Slide 28: Description of Business
Description of Business ◼ Premium Group is an auto mobility company offering customers a vibrant car life alongside our network of car dealers and garages. Business Segment Portfolio by Segment Auto Mobility 25% Finance Automobile Warranty Finance 50% Auto Mobility (FY2026) ▷Main business ▷Main busi
Slide 29: Our DX Strategy
Our DX Strategy ◼ In approximately one year from formulating our DX strategy, we built our DX initiative platform internally and externally and were recognized as Noteworthy DX Company two straight years in 2022 and 2023 and became a DX Certified Business Operator in 2022 ◼ Seeking to realize our co
Slide 30: Summary of New Medium-Term Management Plan ONE & ONLY 2026
(Q4 FY23) Summary of New Medium-Term Management Plan ONE & ONLY 2026 Medium-Term Vision Establishing the Car Premium business model, seeking to become the ONE & ONLY auto mobility company Numerical Targets Profit attributable to Operating revenue Profit before tax owners of parent ROE Market cap ¥ 4
Slide 31: Segments in FY2024
(Q4 FY23) Segments in FY2024 Segments will be reorganized to establish the Car Premium business model Auto mobility and Car Premium segments will be merged to create further Group synergies Car Premium Finance Automobile Warranty Auto Mobility Premium Co., Ltd. Premium Warranty Services Co., Ltd. Pr
Slide 32: Our Actions to Address Changes in the External Environment
(Q3 FY23) Our Actions to Address Changes in the External Environment ◼ Exchange rates: Very small number of transactions in foreign currency Little to no impact ◼ Agilely responding to rising interest rates and inflation on earnings (1) FX fluctuations (3) Rising interest rates Interest rates for fu
Slide 33: BS (Millions of yen)
Note: Since it is a preliminary value, we will promptly notify you on our website when any corrections or changes occur. BS (Millions of yen) Compared to FY2023 FY2024.Q1 FY2024.Q2 previous QoQ (As of March 31, 2023) (As of June 30, 2023) (As of September 30, 2023) quarter Assets Cash and cash equiv
Slide 34: P/L (Consolidated cumulative period)
Note: Since it is a preliminary value, we will promptly notify you on our website when any corrections or changes occur. P/L (Consolidated cumulative period) (Millions of yen) FY2023.Q1-Q2 FY2024.Q1-Q2 (April 1 - September 30) YoY (April 1, 2022 - September 30, 2022) (April 1, 2022 - September 30, 2
Slide 35: P/L (Operating income/Operating expenses)
Note: Since it is a preliminary value, we will promptly notify you on our website when any corrections or changes occur. P/L (Operating income/Operating expenses) (Millions of yen) FY2023.Q1-Q2 FY2024.Q1-Q2 (April 1 - September 30) YoY (April 1, 2022 - September 30, 2022) (April 1, 2022 - September
Slide 36: P/L (Consolidated accounting period)
Note: Since it is a preliminary value, we will promptly notify you on our website when any corrections or changes occur. P/L (Consolidated accounting period ) (Millions of yen) FY2023.Q2 FY2024.Q1 FY2024.Q2 (July 1 - September 30) YoY QoQ (July 1, 2022 - September 30, 2022) (April 1, 2023 - July 30,
Slide 37: P/L (Operating income/Operating expenses)
Note: Since it is a preliminary value, we will promptly notify you on our website when any corrections or changes occur. P/L (Operating income/Operating expenses) (Millions of yen) FY2023.Q2 FY2024.Q1 FY2024.Q2 (July 1 - September 30) YoY QoQ (July 1, 2022 - September 30, 2022) (April 1, 2023 - July
Slide 38: Forward looking statements
IR information in this material is for providing financial data and economic condition of Premium Group Co., Ltd. (Hereinafter “Company”). However, this information should not announce and guarantee its contents. Statements contained herein that relate to the future operating performance and strateg