Japan Elevator Service Holdings Co., Ltd. · TSE:6544

Japan Elevator Service — FY2024 Earnings Presentation

40 slides from Japan Elevator Service's earnings presentation, May 24, 2024

Slide 1: Financial Results Briefing for the FY Mar 2024
< Caution > This document is a translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail. Financial Results Briefing for the FY Mar 2024 May 24 2024 J
Slide 3: Results Overview: Robust Growth, Record Sales and Profit
Results Overview 3 Robust Growth, Record Sales and Profit • Strong modernization sales • Beat revised forecast of 6.6B • On top of growth in sales and and recovery in repair sales • Up 36.1% YoY to break record OP, tax refund on wage • Beat revised forecast of 41B • OP margin improved to increases b
Slide 4: Dividend Forecasts
Dividend Forecasts 4  Our shareholder return policy is based on a dividend payout ratio of at least 40% and aims for stable increases in EPS and DPS  Dividend for the fiscal year will be 25 yen (payout ratio 50%), an increase of 8 yen from the previous fiscal year, and an upward revision of the in
Slide 5: Domestic Maintenance Contracts Surpass 100,000 Mark
Domestic Maintenance Contracts Surpass 100,000 Mark 5  Net increase of 11,600 units, including organic increase of 10,000  Emic Co., Ltd. and Eledoc Okinawa Co., Ltd. became subsidiaries and added 650 in Sep 2023 and 890 in Feb 2024  Market share increased by 1 percentage point to 9% 15% CAGR 100
Slide 6: Expanding network and workforce to increase market share
Expanding network and workforce to increase market share 6  The number of offices increased from 132 at March 2023 to 141 as of May 2024. New offices were established in Kagoshima, Fukushima and Niigata, and we entered Okinawa through the acquisition of Eledoc Okinawa  Workforce increased, mainly
Slide 7: Ensuring Sustainable Business
Ensuring Sustainable Business 7 Strengthening efforts to maintain Promotion of Good Working E S the environment Environment  Aggregate greenhouse gas emissions throughout the  Expansion of allowances due to revision of the supply chain personnel system (e.g. housing allowance)  Examine long-term
Slide 9: Competitiveness underpinned by tangible and intangible assets
Competitiveness is underpinned by an unrivalled accumulation of 9 tangible and intangible assets The only company that combines the ‘quality’ of OEM with the ‘reasonable price’ of independents New Hire from Graduates R&D as % of (person) Qualified net sales: 154 Inspectors: 1.5% (Average since Mar 2
Slide 10: Initiatives to increase the number of maintenance contracts
Initiatives to increase the number of maintenance contracts 10  Strengthen sales to building management companies, mainly through the HD Sales Department  Increase maintenance sales staff at each operating company  Improve efficiency of sales activities through IT system  Continue 20,000 to cons
Slide 11: More Service Options: Escalators
More Service Options: Escalators 11  Escalators account for 5% of maintenance contracts and are expected to increase along with the increase in maintenance contracts  Established organization to train technical staff specialized in escalators to improve service quality  Commence renewal support f
Slide 12: JES Innovation Center Kansai (JIK)
JES Innovation Center Kansai (JIK) 12  JES Innovation Center Kansai (JIK) should add 100 per months capacity  Logistics in western Japan region expedited with lower costs  Highly evaluated as an energy-efficient building  Strong BCP system including redundant control center (CRC) 3,000 Moderniza
Slide 14: Summary of Financial Results for the FY March 2024
Summary of Financial Results for the FY March 2024 14 Both sales and profits exceeded revised forecasts, marking consecutive increases in sales and profits and a new record high  In addition to an increase in maintenance sales due to an increase in the number of maintenance contracts, repairs and r
Slide 15: Factors for Change in Operating Profit
Factors for Change in Operating Profit 15 (Millions of yen) Increase Decrease 14,000 12,000 -2,243 10,000 -1,094 7,310 -1,037 8,000 -194 -931 6,000 4,000 6,821 5,011 2,000 0 Mar 2023 Net sales Material cost Labor cost Outsourcing Depreciation Others Mar 2024 cost Copyright © japan elevator service h
Slide 16: FY2025 Financial Forecasts (Summary)
FY2025 Financial Forecasts (Summary) 16 Expect record sales and profits on the back of stable growth in maintenance and repair, and a strong modernization business  Stable growth in maintenance services due to strong net increase in contracts, and maintenance services also on track for stable growt
Slide 17: Capital Expenditures and Depreciation Forecasts
Capital Expenditures and Depreciation Forecasts 17 (Billions of yen) FY2024 (Actual) FY2025 (Forecast) Items C a p i t a l Investments related to PRIME, a Expenditure 2.39 2.06 remote inspection service, etc. Depreciation 1.40 1.70 Capital Expenditures and Depreciation (Billions of yen) 4.00 3.65 3.
Slide 19: Medium-term Management Plan: VISION2027
Medium-term Management Plan: VISION2027 19  Basic Strategy  Key Indicators Raise corporate value through growth, • As a company qualified for the TSE Prime Market, we aim to achieve sustainable growth and increase corporate value, prosper together with all stakeholders adapting to changes in the s
Slide 20: Elevator Maintenance Market in Japan
Elevator Maintenance Market in Japan 20 Elevator maintenance market in Japan:  There are an estimated 1.1 million elevators Year ended March 2024 VISION2027 installed & maintained  1-2% annual growth to 1.2 million in Mar 2027  Five OEMs* and affiliated companies handle Independent, Independent,
Slide 21: Growing Demand for Modernization
Growing Demand for Modernization 21 Number of New Elevators Installed in Japan (units) 50,000 45,000  New elevator construction was high 40,000  These elevators are over 20 years old in operation 35,000  Parts supply by OEMs is also being phased out 30,000 25,000 20,000 15,000 10,000 5,000 0 1970
Slide 22: Profitability Scenario to Achieve the Mid-term Plan
Profitability Scenario to Achieve the Mid-term Plan 22 Reconciliation of 60 billion yen in Net Sales and Operating Margin of 20% with Growing Maintenance Contracts 1. Achieve net sales of 60 billion yen by expanding the market and increasing share in Japan  As of March 31, 2024, our domestic mainte
Slide 23: Balance Sheet Management
Balance Sheet Management 23 Capital Expenditures Peaking and Positive FCF Trend Expected The Company Aims for a Strong Balance Sheet Trends in EBITDA, free cash flow, and growth investment  Capital expenditures peaked in FY2023, and 15 (billions of yen) after the completion of the JIK in FY2024, EB
Slide 25: Corporate Data
Corporate Data 25 Company Name Japan Elevator Service Holdings Co., Ltd. Established October 3, 1994 Listed Market TSE Prime Market (6544) since April 4, 2022 Tokyo Tatemono Nihonbashi Bldg. 5F, 1-3-13 Nihonbashi, Headquarters Chuo-ku, Tokyo 103-0027 CEO Katsushi Ishida (Born on March 25, 1966) Numb
Slide 26: Corporate Philosophy
Corporate Philosophy 26 Safety Above Anything Else Safety is our lifeblood above anything else We are committed to monitoring 24 hours a day, 365 days a year No Cutting Corners We do not cut corners because people don’t see, and we work for safe operation Building on Trust Building relationships of
Slide 27: Our Business: (1) Maintenance & Repair
Our Business: (1) Maintenance & Repair 27 Maintenance 1 Legal inspection stipulated in the Building Standards Act Services 2 Periodic inspection (cleaning, oiling, adjustment, replacement of consumables, etc.) 3 Monitoring services (including examination, remote monitoring, and remote inspection for
Slide 28: Our Business: (2) Modernization
Our Business: (2) Modernization 28 Modernization  The legal depreciable life of a lift is 17 years. The Life Cycle Cost Assessment Index Services planned service life proposed by the Building Maintenance and Preservation Association is 25 years  For some models, the OEM may stop supplying parts, s
Slide 29: Features of JES Innovation Center
Features of JES Innovation Center 29  Only independent system capable of operating 10 elevators in a high- JES Innovation Center Lab (JIL) rise test tower  Research and development facilities that create our unique services Wako City, Location such as PRIME and Quick Renewal Saitama  Over 200,000
Slide 30: Quick Renewal
Quick Renewal 30 Quick Renewal enables flexible modernization reflecting customer needs Major components are One time modernization replaced in stages, significantly reducing construction time and 1 costs 2 Replace control panel only Phase 1 (Compatible with 16 models) Construction period: 1 day Pha
Slide 31: LiftSPOT
LiftSPOT 31  LiftSPOT is a service that combines digital signage with security cameras, helping prevent crime in elevators while providing a display for advertising and other content (patent acquired for security camera with ad display function)  Audio-enabled digital signage media for elevators,
Slide 32: Promotion of Refurbished Parts
Promotion of Refurbished Parts 32 Refurbished parts are products collected during parts replacement, then repaired and refurbished Components that pass our QA testing are certified as JES Authorized Refurbished Parts JES Group is focusing on obtaining recycled parts and promoting growth in the refur
Slide 33: Making Entry in Southeast Asia Market
Making Entry in Southeast Asia Market 33 Japan Elevator Service Hong Kong Company Japan Elevator Service India Private Limited Limited Established in Feb 2016 In Jul 2014 the Company established vehicle for research and investment in SE Asia Acquired 51% interest in Unieco of Vietnam in Nov 2021 Acq
Slide 34: Overseas Business Update
Overseas Business Update 34 Business Conditions at ASEAN Subsidiaries Remained Strong Since Becoming a JES Group  Dispatched Japanese technical personnel to subsidiaries in Indonesia and Vietnam, which engage in the elevator business, to improve quality  Promote training system conducted in Japan
Slide 36: Growth in Net Sales
Growth in Net Sales 36 Net sales of 42.2B 17% CAGR (annualized) for the FY Mar 2024 47.0 3.4% 42.2 33.8% 34.9 29.7 62.8% 24.5 21.3 Maintenance & repair Modernization Other 17.9 15.3 13.5 11.8 10.4 Sep Sep Sep Sep Sep Sep Sep Sep Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar 2006 2007 2008 2009 201
Slide 37: Social Data
Social Data 37 March 2019 March 2020 March 2021 March 2022 March 2023 Employee Data Number of employees Male 955 1,053 1,182 1,351 1,498 by gender Female 138 181 216 267 268 (number of persons) (percentage of female) 12.6% 14.7% 15.5% 16.5% 15.2% Total 1,093 1,234 1,398 1,618 1,766 Diversity Data Fe
Slide 38: Financial Highlights (1/2)
Financial Highlights (1/2) 38 Net sales Operating profit (Millions of yen) (Millions of yen) 6,821 42,216 34,907 5,010 29,751 4,113 24,521 3,612 21,339 17,900 2,717 15,326 13,544 2,034 1,351 611 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024 Mar 2017 Mar 2018 Mar 2019 Mar 20
Slide 39: Financial Highlights (2/2)
Financial Highlights (2/2) 39 Net assets / Total assets (Millions of yen) Net assets Total assets 32,539 29,002 25,338 20,473 16,789 14,297 11,484 13,678 10,624 11,756 10,505 7,848 3,937 5,177 2,072 2,870 Mar 2017 Mar 2018 Mar 2019 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2024 Net assets per share Ea
Slide 40: Disclaimer and Caution Concerning Forward-looking Statements
Disclaimer and Caution Concerning Forward-looking Statements 40 Disclaimer  Japan Elevator Service Holdings (the “Company”) has prepared these materials for your reference, so that you may understand the current status of the Company.  While these materials have been prepared based on generally-kn

Japan Elevator Service Holdings — FY2024 Earnings Presentation on 6ix

Japan Elevator Service — FY2024 Earnings Presentation

Slide 1: Financial Results Briefing for the FY Mar 2024

Slide 2: Management Review of FY 2024

Slide 3: Results Overview: Robust Growth, Record Sales and Profit

Slide 4: Dividend Forecasts

Slide 5: Domestic Maintenance Contracts Surpass 100,000 Mark

Slide 6: Expanding network and workforce to increase market share

Slide 7: Ensuring Sustainable Business

Slide 8: Initiatives for FY Mar 2025

Slide 9: Competitiveness underpinned by tangible and intangible assets

Slide 10: Initiatives to increase the number of maintenance contracts

Slide 11: More Service Options: Escalators

Slide 12: JES Innovation Center Kansai (JIK)

Slide 13: FY2024 Results Overview and FY2025 Earnings Forecast

Slide 14: Summary of Financial Results for the FY March 2024

Slide 15: Factors for Change in Operating Profit

Slide 16: FY2025 Financial Forecasts (Summary)

Slide 17: Capital Expenditures and Depreciation Forecasts

Slide 18: Medium-term Management Plan VISION 2027

Slide 19: Medium-term Management Plan: VISION2027

Slide 20: Elevator Maintenance Market in Japan

Slide 21: Growing Demand for Modernization

Slide 22: Profitability Scenario to Achieve the Mid-term Plan

Slide 23: Balance Sheet Management

Slide 24: About Us

Slide 25: Corporate Data

Slide 26: Corporate Philosophy

Slide 27: Our Business: (1) Maintenance & Repair

Slide 28: Our Business: (2) Modernization

Slide 29: Features of JES Innovation Center

Slide 30: Quick Renewal

Slide 31: LiftSPOT

Slide 32: Promotion of Refurbished Parts

Slide 33: Making Entry in Southeast Asia Market

Slide 34: Overseas Business Update

Slide 35: References

Slide 36: Growth in Net Sales

Slide 37: Social Data

Slide 38: Financial Highlights (1/2)

Slide 39: Financial Highlights (2/2)

Slide 40: Disclaimer and Caution Concerning Forward-looking Statements