Slide 1: Earnings Results Briefing for the Fiscal Year Ended March 31, 2018
Earnings Results Briefing for the Fiscal Year Ended March 31, 2018 May15, 2018 KOMEHYO Co., Ltd. Securities code: 2780 (Second Section, Tokyo and Nagoya Stock Exchanges) Corporate Planning Department IR strategy group TEL:+81-52-249-5366
Slide 2: INDEX
INDEX １．Overview of Financial Results for the Fiscal Year Ended March 31, 2018 P.02 ２．Business status P.11 ３．Plan for the Fiscal Year Ending March 31, 2019 P.27 ４．Medium-term Management Plan P.32 ５．Reference Information (Company Profile, etc.) P.36 Note: This document is an English translation of a
Slide 3: Overview of Income Statement
Overview of Income Statement Consolidated FY2016 FY2017 FY2018 Change YoY (Millions of yen) (‘15.4-’16.3) (‘16.4-’17.3) (‘17.4-’18.3) Net sales 45,903 40,134 45,497 ＋5,363 113.4％ Gross profit 13,061 11,144 12,968 ＋1,824 116.4％ Gross profit 28.5％ 27.8％ 28.5％ ＋0.7pt － margin SG&A 10,271 10,312 11,342
Slide 4: Overview of Income Statement (Non-consolidated)
Overview of Income Statement Non- FY2016 FY2017 FY2018 consolidated Change YoY (‘15.4-’16.3) (‘16.4-’17.3) (‘17.4-’18.3) (Millions of yen) Net sales 40,554 34,891 39,682 ＋4,790 113.7％ Gross profit 11,090 9,339 10,869 ＋1,530 116.4％ Gross profit 27.3％ 26.8％ 27.4％ ＋0.6pt － margin SG&A 8,664 8,836 9,716
Slide 5: Business results for the past decade
Business results for the past decade Consolidated net sales Consolidated operating (100 millions of yen) income(100 millions of yen) 500 Consolidated net sales 50 450 Consolidated operating income 45 459 454 400 431 40 402 401 350 35 343 300 30 31.2 289 289 29.9 250 27.8 25 247 238 200 20 Lehman Bro
Slide 6: Operating income increase and decrease factor (Consolidated)
Operating income increase and decrease factor（ Consolidated ） Operating income increased due to an increase in net sales and a 0.7 point increase in gross profit margin (Millions of yen) S,G&A Expenses increase △1,030 Sales amount 2,500 increase +1,489 Gross profit margin 2,000 increase +334 1,500 1
Slide 7: Profit Margin Trend
Profit Margin Trend Operating margin rises due to an increase in net sales and an increase in gross profit margin （％） Consolidated （％） Non-consolidated Gross profit margin Gross profit margin 35 SG&A expenses to sales ratio 35 SG&A expenses to sales ratio 31.4 Operating income margin Operating incom
Slide 8: Overview of Balance Sheet
Overview of Balance Sheet Increase in products owing to new opening of large stores and favorable conditions concerning purchases of used goods from customers (Millions of yen) (Millions of yen) Consolidated Liabilities Non-consolidated Assets Assets Liabilities and Net and Net Assets Assets Assets
Slide 9: Statement of Cash Flows
Statement of Cash Flows Operating CF recovery as a result of significant profit increases Consolidated (Millions of yen) Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents 4,257 3,886 4,769 3,322 2,848 2,855 1,715
Slide 10: By Segment
By Segment Mainstay brand fashion business: significant increases in income and profit (Millions of yen) FY2016 FY2017 FY2018 Change YoY Net sales 41,175 35,396 40,618 ＋5,221 114.8％ Fashion Brand Operating income 2,611 692 1,476 ＋784 213.2％ Operating margin 6.3％ 2.0％ 3.6％ ＋1.6pt － Net sales 4,640 4,
Slide 11: Business status
１．Overview of Financial Results for the Fiscal Year Ended March 31, 2018 P.02 ２．Business status P.11 ３．Plan for the Fiscal Year Ending March 31, 2019 P.27 ４．Medium-term Management Plan P.32 ５．Reference Information (Company Profile, etc.) P.36 10
Slide 12: 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） 140 KOMEHYO net sales(non-consolidated) 24,000 Nikkei Stock Average(monthly closing price) 23,000 130 22,000 120 21,000 20,000 110 19,00
Slide 13: Reuse market growth rate
Reuse market growth rate The reuse market continues to grow each year (100 millions of yen) Reuse market size & Reuse market growth rate 18,000 (The Reuse Business Journal estimation) 12% 16,000 10.0% 9.7% 10% 14,000 8.0% 12,000 7.4% 8% 7.0% 10,000 17,743 6% 8,000 15,966 16,517 14,916 13,594 6,000 1
Slide 14: Reuse market size
Reuse market size C-to-C internet sales driving market growth Reuse market size(‘16) 1.7 trillion yen (The Reuse Business Journal estimation) ( 100 millions of yen) Store-based sales Online sales Ｃ to Ｃ 5,093 Ｂ to Ｃ （YoY126.1％） 9,315 （YoY98.5％） Ｂ to Ｃ 2,862 （YoY114.4％） Others 473 Source: The Reuse B
Slide 15: Reuse market according to the product
Reuse market according to the product Scale of market for clothing and fashion goods is expanding owing to flea market apps etc. Market ratio(%) Domestic retailreuse market size(FY2016) (100 millions of yen) 18 ’16 Brand-name products 16 2,401 ’14 Brand-name products 14 ’16 Clothing/accessories ’15
Slide 16: Ranking in the Secondhand industry
Ranking in the Secondhand industry Secondhand sales amount :No.3､ Brand-name products sales amount:No.1､Clothing/accessories sales amount:No.7 Secondhand sales amount(FY2016) Brand-name products sales amount(FY2016) G B KOMEHYO 12.2% KOMEHYO S D H S Others Market size D 2.0％ 240 billion yen (The Reu
Slide 17: Initiative(1) Successful opening of large stores
Initiative(1) Successful opening of large stores Opening of 3 large stores:business performance seeing solid shift Shinjyuku store Umeda store Meieki store ANNEX Opening time ‘17.2 ‘17.5 ‘17.5 Meieki4-8-24 Shibata2-2-1, Shinjyuku3-19-7 Nakamura-ku Location Kita-ku,Osaka city Shinjyuku-ku Nagoya city
Slide 18: Initiative(2) Enhancement of E-commerce-induced sales
Initiative(2) Enhancement of 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 FY2016 FY2017 FY2018 Net sales No. of products (Millions of yen) (‘15.4-’16.3) (‘16.4-’17.3) (‘17.4-’18.3) YoY sold YoY E-commerce-
Slide 19: Initiative(3) Enhancement of purchases from individual customers
Initiative(3) Enhancement of purchases from individual customers Amounts in terms of purchases of used goods from individuals are highest ever owing to new store openings and various measures Amount of purchase from FY2016 FY2017 FY2018 Change YoY individual (‘15.4-’16.3) (‘16.4-’17.3) (‘17.4-’18.3)
Slide 20: Initiative(4) Enhancement of customer management
Initiative(4) Enhancement of customer management Integrated management of customer information, covering physical and online stores Card members(FY2018) No. YoY Total members 792,000 112.0% 【 Customer management 】 Management of visit history of card-holding Sales Online members, including store visi
Slide 21: Initiative(5) Talent Development
Initiative(5) Talent Development Systematically implemented by original curriculums by a dedicated division Total No. of VMD masters（Internal (in operation) Total No. of buyers qualification）and VMD instructors （National qualification） FY ended March 2018 329persons 90persons YoY Change +11persons +
Slide 22: Initiative(6) Challenge to The C-to-C Business
Initiative(6) 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 April 2018 Free market app specializing in brand- name Acquisition of the Sharing Economy products Trust Mark (first acquisition of the Providing pur
Slide 23: Subsidiary(1) KOMEHYO Auction
Subsidiary(1) KOMEHYO Auction Expand sales channels of used products, reinforce procurement and collect industry information Established Business activities Location Capital Planning, operation, management, etc. of June 2012 Naka ward, auction for secondhand dealers JPY20million Nagoya city Trade vo
Slide 24: Subsidiary(2) KOMEHYO HONG KONG
Subsidiary(2) KOMEHYO HONG KONG Aiming for the development of sales channels overseas and the expansion of business in China Business Established Company name Location activities Capital KOMEHYO HONG KONG June 2013 HONG LIMITED Buying and selling HK＄18million KONG products including BEIJING HUA XIA
Slide 25: Subsidiary(3) Craft, Auto Parts Japan
Subsidiary(3) Craft、Auto Parts Japan Sale of tires, wheels, and vehicle parts Established Company name Business activities Location Capital Sale of passenger-car tires, April 1980 CRAFT Co., Ltd. aluminum wheels, auto accessories, JPY72million and parts Nakagawa Import, sale, and purchase of auto wa
Slide 26: Subsidiary(4) Eve Corporation, Ark marketing japan
Subsidiary(4) Eve Corporation、Ark marketing japan We converted e-commerce apparel and shoe-care stores into subsidiaries in December 2017 Established Head Company name Business activities Capital Office Wholesale and retail of imported apparel,bags,and accessories; Operation of mail-order sites “Mik
Slide 27: Plan for the Fiscal Year Ending March 31, 2019
１．Overview of Financial Results for the Fiscal Year Ended March 31, 2018 P.02 ２．Business status P.11 ３．Plan for the Fiscal Year Ending March 31, 2019 P.27 ４．Medium-term Management Plan P.32 ５．Reference Information (Company Profile, etc.) P.36 26
Slide 28: FY2019 plan
FY2019 plan Increased profit and revenue are forecasted on both consolidated and non-consolidated bases Consolidated FY2019 YoY FY2019 plan YoY (Millions of yen) 1H plan Net sales 22,900 110.3% 50,000 109.9% Operating income 475 102.9％ 1,900 116.9% Ordinary income 475 100.4％ 1,900 117.9% Net income
Slide 29: Brand･Fashion
Brand･Fashion KOMEHYO １．Enhancement of purchases from individual customers ・Increase in purchases of used goods from customers at existing stores (mainly at 3 large stores) ・Store open for purchases ・Expansion of services entailing staff visits to customer locations for the purchase of used goods fr
Slide 30: Overseas, Tire and Wheel
Overseas , Tire and Wheel KOMEHYO HONG KONG LIMITED Overseas business management Expansion of B-to-B business in Hong Kong （Auction , Jewelry show） BEIJING HUAXIA KOMEHYO JIMITED Expansion of B-to-C business with a focus on Beijing （Aiming to shift from the opening of new stores to deployment at man
Slide 31: Shareholder return
Shareholder return Dividend changes Dividend(yen) Payout ratio(％) 40 100 Fiscal year-end dividend 92.4 Forecast Interim dividend 90 35 Payout ratio 80 30 16 15 70 (Forecast) 25 60 20 50 40 15 30 10 30.6 20 5 19.4 10 15 16 0 0 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY20
Slide 32: Medium-term Management Plan
１．Overview of Financial Results for the Fiscal Year Ended March 31, 2018 P.02 ２．Business status P.11 ３．Plan for the Fiscal Year Ending March 31, 2019 P.27 ４．Medium-term Management Plan P.32 ５．Reference Information (Company Profile, etc.) P.36 31
Slide 33: Medium-term Basic Targets (Consolidated)
Medium-term Basic Targets (Consolidated) Solid recovery of business performance by increasing profitability Consolidated FY2019 FY2020 FY2020 (‘18.4-’19.3) (‘19.4-’20.3) (’20.4-’21.3) Net sales JPY50.0B JPY52.3B JPY54.8B Operating income JPY1.90B JPY2.26B JPY2.57B Operating margin 3.8％ 4.3％ 4.7％ Sto
Slide 34: Net Sales Plan
Net Sales Plan Generate JPY54 billion and JPY46 billion on a consolidated and non-consolidated basis respectively in the fiscal year ending March 31, 2021 Consolidated Non-Consolidated Net sales 54,800 Net sales (Millions of yen) 52,300 50,000 (Millions of yen) 45,497 46,500 44,600 43,000 40,134 39,
Slide 35: Profit Plan
Profit Plan Achieve sustainable profit growth by increasing net sales and improving profit margin Operating income Ordinary income Net income attributable to owners of parent 2,570 2,500 (Millions of yen) 2,260 2,200 Consolidated 1,900 1,900 1,625 1,610 1,600 1,400 1,200 1,073 831 820 347 FY2017 res
Slide 36: Reference Information (Company Profile, etc.)
１．Overview of Financial Results for the Fiscal Year Ended March 31, 2018 P.02 ２．Business status P.11 ３．Plan for the Fiscal Year Ending March 31, 2019 P.27 ４．Medium-term Management Plan P.32 ５．Reference Information (Company Profile, etc.) P.36 35
Slide 37: Company Profile
Company Profile Company KOMEHYO Co., Ltd. name Established May 1979 Head Office 3-25-31 Osu, Naka-ku, Nagoya Representative President, Representative Director: Takuji Ishihara Capital 1,803 million yen No. of Consolidated: 634, Non-consolidated:520 (As of March 2018) employees Buying and selling use
Slide 38: Management philosophy
Management philosophy Founding spirit: Buy high and products gather. Sell low and people gather. Management philosophy: We help customers build affluent lives. We create a fair, positive, and rewarding workplace. We develop human resources who respond to changes and continue to challenge themselves.
Slide 39: Corporate History
Corporate History ●Opened Purchasing Center Yurakucho､ Ikebukuro-nishiguchi、tachikawaｰkitaguchi ●Opened Jiyugaoka store ●Established Auto Parts KOMEHYO KK (currently AUTO PARTS JAPAN) ●Established KOMEHYO HONG KONG LIMITED ●Acquired CRAFT Co., Ltd. ●Established Product Center ●Established KOMEHYO Au
Slide 40: KOMEHYO Business Model
KOMEHYO Business Model Main functions of Product Center １．Thorough confirmation of product authenticity/quality ２．Market price management ３．Maintenance ４．Product development speed/cost management ５．Stable/appropriate supply of products to stores Quality Purchase/procurement market price Sale distrib
Slide 41: Store Type
Store Type 26 stores ５stores Large-scale Nagoya Store，Meieki Store, Shinjuku Store/ANNEX， Ginza Store，Umeda Store Sales/Purchase ※ Sales/Purchase Ladies casual Jewelry, precious metals, clothing, bags, watches,bags,clothing,etc. 6 stores accessories Mid-scale Opening stores in large major cities 3 s
Slide 42: Talented person fixation degree
Talented person fixation degree Staff turnover remained low,improving the stability of the work force Turnover The No. of The No. of employees（Brand-Fashion) rate（％） employees Turnover rate 30 General regular workers(except part-time workers)(Ministry of Health,Laver and Welfare) 500 25 400 20 300 1