Hikari Tsushin, Inc. · TSE:9435

Hikari Tsushin — Q1 FY2017 Earnings Presentation

18 slides from Hikari Tsushin's earnings presentation, Aug 15, 2016

  1. Slide 1: Financial Results for the three month period ended June 30, 2016

    Financial Results for the three month period ended June 30, 2016 August 15, 2016 ©2016 HIKARI TSUSHIN,INC. All Rights Reserved

  2. Slide 2: Consolidated Results

    FY 2016 Comparative Analysis J-GAAP to IFRS （¥ billion） FY2016 FY2017 (E) YoY J-GAAP IFRS IFRS Net Sales 574.5 447.6 390.0 (12％) Almost no change Operating Profit 37.4 37.6 42.0 +11％ Ordinary Income 38.3 Net Income 25.0 22.5 30.0 +33％ attributable to owners of the parent 1 ©2016 HIKARI TSUSHIN,INC.

  3. Slide 3: Profit Increase All Segments

    Profit Increase All Segments （¥ billion） FY2016 FY2017 FY2016 FY2017 YoY YoY 1Q 1Q 1Q 1Q IFRS IFRS IFRS IFRS Corporate 64.0 63.3 (1％) Corporate 7.3 7.4 +0％ Shop 35.9 31.7 (11％) Shop 2.3 3.4 +43％ Insurance 7.0 6.8 (3％) Insurance 0.4 0.5 +44％ Consolidated Consolidated Net Sales 106.2 101.2 (4％) Operat

  4. Slide 4: Recurring Profit Increase Corporate segment; Acquisition Cost Reduction Shop segment

    Recurring Profit Increase Corporate segment （¥ billion） Average annual growth rate FY2015 FY2016 FY2017 １２％ 17.9 1Q 1Q 1Q 16.6 14.2 Corporate 8.7 10.4 11.6 Shop 5.0 5.0 4.9 Insurance 0.3 1.1 1.2 Total 14.2 16.6 17.9 FY2015 1Q FY2016 1Q FY2017 1Q 5 ©2016 HIKARI TSUSHIN,INC. All Rights Reserved Acquis

  5. Slide 5: Sales Units of In-house Products

    Sales Units of In-house Products （million） Launch sales of Hikari Collaboration 0.25 0.20 0.16 FY2015 FY2015 FY2015 FY2015 FY2016 FY2016 FY2016 FY2016 FY2017 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Main Product ・In-house Products = ISP, Mobile Wi-Fi Routers, Mobile Phones (Reselling), Industry Specific IT Soluti

  6. Slide 6: Water Coolers

    Water Coolers Sales units share No.1 Subscribers share No.3 Sales Units Promote greater selling efficiency 1Q 2Q 3Q 4Q 1Q FY2016 FY2017 9 ©2016 HIKARI TSUSHIN,INC. All Rights Reserved Strong Earnings from Contents through External Outlet ※ ※Security service etc. Internal Outlet External Outlet (incl

  7. Slide 7: Main In-house Products

    Main In-house Products Ｎｏ.１ Ｎｏ.１ Over 12 million sales units sales units members per month per month Internet Water In-house Mobile Wi-Fi In-house Coolers Contents Routers SIM Service EPARK (In-house) Improved Increase in Increase in Increase in Increase in Upfront quality of sales units sales units

  8. Slide 8: Non-Operating Profit

    Non-Operating Profit （¥ billion） Corporate income tax expenses Financial Expense Equity in Earnings of affiliates Others Financial Income Gain on step acquisitions etc. 13 ©2016 HIKARI TSUSHIN,INC. All Rights Reserved Cash + Listed Securities – Interest bearing Liabilities （¥ billion） Decrease due t

  9. Slide 9: Consolidated Cash Flow; Return to Shareholders

    Consolidated Cash Flow （¥ billion） FY2016 1Q FY2017 1Q Notes Cash Flows from Income tax paid and refunded Operating Activities (6.1) +2.0 (14.7)→(12.6) Purchase of investment securities Cash Flows from （3.2)→(7.5) Investing Activities +2.4 (2.8) Proceeds from sales of investment securities 8.1→3.8 F

  10. Slide 10: References

    References 17 ©2016 HIKARI TSUSHIN,INC. All Rights Reserved Segments Business Products/Service Target Sales network Model FTTH ISP Individual TMS Web VNO(ISP) Mobile Wi-Fi Router Individual TMS Web MVNO SMEs In-house Water Cooler Individual TMS Web Products Mobile Phone Corporate (Corporate) Individ

  11. Slide 11: Main Products Extensive Sales Network

    Main Products In-house Products ①Water Coolers ②Mobile Wi-Fi Routers ③Internet Service ④Industry Specific IT Solutions Ｎｏ.１ Ｎｏ.１ Ｎｏ.１ sales units per month sales units per month among independent companies Over 12 million members ⑤MVNO ⑥Contents ⑥LED Lights for Corporate clients ⑦Photocopy Machines

  12. Slide 12: Corporate Segment; Shop Segment

    Corporate Segment （¥ billion） Net Sales Products Sales Channels In-house ISP 64.0 63.3 Mobile Wi-Fi Routers Mobile Phones (Corporate) Mobile Phones (Reselling) FY2016 1Q FY2017 1Q IFRS IFRS In-house Internet Service 103 Sales Branches Industry Specific IT Solutions 19 Call Centers Operating Profit W

  13. Slide 13: Insurance Segment

    Insurance Segment （¥ billion） Net Sales Products Sales Channels Insurance Plans 7.0 6.8 FY2016 1Q FY2017 1Q IFRS IFRS 10 Operating Profit Call Centers 327 0.4 0.5 Stores FY2016 1Q FY2017 1Q IFRS IFRS 23 ©2016 HIKARI TSUSHIN,INC. All Rights Reserved Become the Largest SME Targeted Company in Japan Ex

  14. Slide 14: Standard Earnings Model; Business Models

    Standard Earnings Model Figure of earnings model per unit （¥ billion） Recurring profits IN ・ ・ ・ Time OUT Month 1 Month 2 Month 3 Month 4 Month 5 ・ ・ ・ - Payroll cost for sales people - Commission for independent sales agents - Cost for store operation Contract (Sales) Period of use Cancel Time 25 ©

  15. Slide 15: Breakdown of Operating Profit

    Breakdown of Operating Profit （¥ billion） Total ※FY2016 IFRS ①Recurring ②Lump-sum Predictable and stable sales paid monthly by end users, Lump-sum Sales etc. Net Sales 447.6 158.0 289.6 Lump sum cost, personal Cost of customer retention expenses, sales commission such as billing Cost of sales, and f

  16. Slide 16: Consolidated Profit and Loss Statement; Consolidated Balance Sheet

    Consolidated Profit and Loss Statement （¥ billion） 12/3 13/3 14/3 FY2015 FY2016 J-GAAP J-GAAP J-GAAP J-GAAP J-GAAP Net Sales 499.3 500.3 565.1 562.5 574.5 Operating Profit 18.3 24.5 31.7 32.0 37.4 Ordinary Income 17.6 27.1 39.7 36.5 38.3 Net Income Pre-tax 16.5 27.4 49.6 45.8 51.1 Net Income attribu

  17. Slide 17: Hikari Tsushin's Strengths; Hikari Tsushin's CSR

    Hikari Tsushin’s Strengths ① Strength from the beginning ② Sales Channels Low Customer Corporate philosophy Expand Expansion in Sales Cost Data Base Market Share and culture have Market Share: enhanced earnings Sales channel is Merit Flexibility since the time of Increase More extending by acquiring

  18. Slide 18: Disclaimer

    Disclaimer This material contains “forward-looking” information, including the company’s plans, strategies, forecasts and beliefs. Hikari Tsushin cautions readers that forward-looking statements are based on Hikari Tsushin’s current expectations, which have been derived from information that is curr

Hikari Tsushin — Q1 FY2017 Earnings Presentation on 6ix