Okuwa Co., Ltd. · TSE:8217
Okuwa — H1 FY2025 Earnings Presentation
47 slides from Okuwa's earnings presentation, Oct 2, 2024
Slide 1: Financial Results Presentation Material
First half of the fiscal year ending February 20, 2025 Financial Results Presentation Material OKUWA Co., Ltd. (8217) October 2, 2024 Copyright © OKUWA Co., Ltd. All Rights Reserved. -1-
Slide 2: Consolidated Sales Results
Consolidated Sales Results Six months Six months Beginning-of- Year-on- Comparison (Million yen, %) ended August ended the-year year against 20, 2023 August 20, forecast change forecast 2024 Operating income 121,520 122,558 126,500 100.9 96.9 Operating profit 706 246 1,050 34.9 23.5 Ordinary profit
Slide 3: Consolidated Operating Income by Company
Consolidated Operating Income by Company (Million yen, %) Six months ended Six months ended Year-on-year August 20, 2023 August 20, 2024 change OKUWA 120,801 121,803 100.8 OAK FOODS 656 688 104.9 Retail Backoffice Support 152 157 103.0 SUNRISE 2,337 2,452 104.9 Consolidation adjustment (2,427) (2,54
Slide 4: Consolidated Ordinary Profit by Company
Consolidated Ordinary Profit by Company (Million yen, %) Six months ended Six months ended Year-on-year August 20, 2023 August 20, 2024 change OKUWA 711 259 36.5 OAK FOODS 32 46 143.6 Retail Back 31 24 77.4 office Support SUNRISE 37 11 30.8 Consolidation adjustment (37) (32) － Share of loss (profit)
Slide 5: Consolidated Management Indicators
Consolidated Management Indicators Six months ended Six months ended Six months ended August 20, 2022 August 20, 2023 August 20, 2024 Operating profit/Operating income (%) 0.85 0.58 0.20 Ordinary profit/Operating income (%) 0.98 0.67 0.26 Return on equity (ROE, %) 0.81 0.51 0.11 Return on assets (RO
Slide 6: Consolidated Cash Flows
Consolidated Cash Flows (Million yen) Six months Six months Year-on-year ended August ended August change 20, 2023 20, 2024 Cash and cash equivalents at beginning of period 15,386 16,182 796 Operating CF 7,011 4,372 (2,638) Investing CF (5,084) (3,997) 1,087 Financing CF 268 (4,396) (4,665) Cash and
Slide 7: Non-consolidated Sales Results
Non-consolidated Sales Results Comparison (Million yen, %) Six months ended Six months ended Beginning-of-the- Year-on-year against August 20, 2023 August 20, 2024 year forecast change forecast Operating income 120,801 121,803 126,000 100.8 96.7 Net sales from direct 117,721 118,452 － 100.6 － operat
Slide 8: Non-consolidated Net Sales from Existing Stores
Non-consolidated Net Sales from Existing Stores Year-on-year change for Number of Average sales Net sales Number of existing stores (%) customers per customer Unit price products per product purchased 1Q 100.4 99.2 101.2 98.6 102.6 2Q 100.1 100.1 100.0 98.1 101.9 2Q cumulative 100.2 99.7 100.6 98.4
Slide 9: Non-consolidated Net Sales by Region
Non-consolidated Net Sales by Region (Million yen, %) Year-on-year Six months ended Six months ended Year-on-year change for August 20, 2023 August 20, 2024 change existing stores Wakayama 37,573 37,815 100.6 100.6 Nara 23,209 23,060 99.4 98.4 Osaka 17,215 17,307 100.5 99.6 Hyogo 316 308 97.4 97.4 (
Slide 10: Non-consolidated Net Sales by Business Type
Non-consolidated Net Sales by Business Type (Million yen, %) Year-on-year Six months ended Six months ended Year-on-year change for August 20, 2023 August 20, 2024 change existing stores SC 4,742 4,810 101.4 101.4 SSM 55,518 56,068 99.8 99.8 SM 4,340 4,390 101.2 101.2 Regular 64,601 65,269 100.0 100
Slide 11: Non-consolidated Net Sales by Department
Non-consolidated Net Sales by Department (Million yen, %) Year-on-year Six months ended Six months ended Year-on-year change for August 20, 2023 August 20, 2024 change existing stores Fresh foods 49,554 49,694 100.3 99.8 Processed foods 51,478 51,933 100.9 100.6 Foods 101,033 101,627 100.6 100.2 Hou
Slide 12: Non-consolidated Gross Profit Margin by Department
Non-consolidated Gross Profit Margin by Department (Million yen, %) Six months Six months Year-on-year ended August 20, ended August 20, change 2023 2024 Fresh foods 32.1 31.6 (0.5) Processed foods 22.8 22.7 (0.1) Foods 27.4 27.0 (0.4) Household supplies 28.2 28.0 (0.2) Clothing 35.1 35.6 +0.5 Total
Slide 13: Non-consolidated SG&A Expenses
Non-consolidated SG&A Expenses (Million yen, %) Ratio to net sales Six months ended Six months ended Year-on-year Ratio to net (Six months ended August 20, 2023 August 20, 2024 change sales August 20, 2024) Net sales 114,808 115,566 100.7 100.0 100.0 Selling expenses 1,030 991 96.2 0.9 0.9 Personnel
Slide 14: Non-consolidated Capital Expenditures
Non-consolidated Capital Expenditures (Million yen, %) Six months Six months Year-on-year ended August ended August change 20, 2023 20, 2024 New stores 1,502 3,265 217.3 Existing stores, etc. 1,980 2,034 102.7 Systems 372 768 206.5 Construction basis 3,855 6,068 157.4 Key descriptions New stores Inv
Slide 15: Non-consolidated Store Distribution
Non-consolidated Store Distribution (As of Aug. 20, 2024) Total by region Wakayama 31 7 8 3 49 Nara 22 5 5 1 33 Osaka 17 2 1 － 20 Hyogo － － 1 － 1 (Kinki area) 70 14 15 4 103 Mie 14 3 5 － 22 Gifu 4 (PM: 1) 10 － 1 (PM: 1) 15 Aichi 8 (PM: 3) 2 － 2 (PM: 2) 12 Shizuoka 1 (PM: 1) 1 － － 2 (Tokai area) 27 1
Slide 16: Initiatives in 1H
Initiatives in 1H Copyright © OKUWA Co., Ltd. All Rights Reserved. -16-
Slide 17: Capital Policy and Financial Strategy
Capital Policy and Financial Strategy Acquisition of treasury shares (results between April 3 and August 20, 2024) Total number of shares acquired: 1,533,300 shares Total acquisition cost of shares: 1,426,336,500 yen ➢ Plan to acquire a total of 2.2 million shares in a year from April 2024, with a t
Slide 18: Store Strategy (1)
Store Strategy (1) New store openings: 2 stores July 4 SuC Chita Store (Aichi) ➢ The 12th store in Aichi. The 30th SuC type store. July 26 Nishiyamato Store (Nara) ➢ The 33rd store in Nara. The 82nd SSM type store. ⇒Both stores recorded higher sales than planned due to the success of product measure
Slide 19: Store Strategy (2)
Store Strategy (2) Store renovations Kiinagashima Store (Mie) on April 19 Sales remained solid after the adjustment of fresh fish lineup in July last year. Judging that there is a prospect of further sales increase, we made changes to each sales floor, in addition to introducing reach-in showcases.
Slide 20: Product Strategy
Product Strategy OKUWA Brand This year marks the fifth anniversary of the brand Composition ratio in foods: 13% (+1.1%) (1H results) Composition ratio in foods: 27.5% Target in the Medium-Term Management Plan: 40% Kurashi More The brand concept is “Be next to customers all the time and in the future
Slide 21: Promotion of IT Strategy (DX)
Promotion of IT Strategy (DX) Optimization of staff assignment to cash registers By continuing to work on the optimization of staff assignment to cash registers based on projections of the numbers of customers and products they purchase, we reduced the number of hours of cash registers in operation
Slide 22: Maximization of the Value of Human Capital
Maximization of the Value of Human Capital Implementation of Human Resources Vision and Personnel Strategy Human resources A company where every employee can fulfill their aspirations through work and vision fully demonstrate their abilities ・Secure human resources and promote diversity Self-directe
Slide 23: Initiatives to Reduce GHG Emissions
Initiatives to Reduce GHG Emissions New introduction of on-site and off-site PPAs Fiscal 2024 Plan for fiscal 2025 Location Annual procurement Location Annual procurement O Delica Factory Anpachi 720,000 kWh SuC Chita Store 492,000 kWh On-site PPA Tondabayashi Asahigaoka Tokai Food Center 1,550,000
Slide 24: Corporate Governance
Corporate Governance Restructuring of the officer structure Elect independent Outside Director who has corporate management experience Increase the number of Executive Officer who does not Increase the number of serve concurrently as female Director by one Director by one ⇒Improve the quality of dec
Slide 25: 1H Summary
1H Summary Sales indicators for existing stores (Beginning-of-the-year plan) *Image of achievement Number of customers Net sales from Unit price 102.0% per product existing stores 103.9% Average sales 102.0% per customer Number of products 102.0% purchased 100.0% (1H results) Number of customers Net
Slide 26: Management Policy for 2H
Management Policy for 2H Copyright © OKUWA Co., Ltd. All Rights Reserved. -26-
Slide 27: Consolidated Financial Results Forecast
Consolidated Financial Results Forecast (Million yen, %) Beginning-of-the-year forecast Revised on Sept. 26 Fiscal year Fiscal year Year-on-year Year-on-year Consolidated ending February ending February change change 20, 2025 20, 2025 Operating income 259,000 104.7 254,000 102.7 Operating profit 3,5
Slide 28: Outlook for 2H
Outlook for 2H Sales indicators for existing stores (2H plan) *Image of achievement Number of customers Net sales from Unit price per 101.0% product existing stores 103.0% Average sales per 102.0% customer Number of products 102.0% purchased 100.0% ⇒1H results were 99.7% for the number of customers
Slide 29: Store Strategy (1) (Reorganization of Store Formats)
Store Strategy (1) (Reorganization of Store Formats) Reorganization of the SuC store format (Initiatives in 1H) Lower the gross profit margin for the agricultural product and daily food categories, and increase the number of customers by drawing attention to low prices ⇒Implemented at nine stores in
Slide 30: Store Strategy (2) (Reorganization of Store Formats)
Store Strategy (2) (Reorganization of Store Formats) Reorganization of the PRC store format (PRC Tanabe Shimomaro Store) Renovated and reopened on September 22, 2023 Results for Feb. 21–Aug. 20 108.9% year on year (PRC Miyama Store) Renovated and reopened on November 23, 2023 Results for Feb. 21–Aug
Slide 31: Store Strategy (3)
Store Strategy (3) Enhancement of time merchandising (review of evening sales floor merchandising) Manufac- Other turing Customer Ordering clusters Other Manufacturing Product plan Ordering Work plan Review of evening sales floor merchandising Copyright © OKUWA Co., Ltd. All Rights Reserved. -31-
Slide 32: Store Strategy (4) (MUJI)
Store Strategy (4) (MUJI) Start of the handling of MUJI products <Purpose> (1) Vitalize promotional sections next to cash registers (2) Create sales by introducing a new category (3) Motivate new customers to visit our stores Target sales share: 1.0% or higher <Store name> <Opening date> Kishiwada H
Slide 33: Product Strategy (1)
Product Strategy (1) Life support prices on the occasion of the 65th anniversary Lower prices of food items and household supplies on the occasion our 65th anniversary. (1H sales results) Number of products: Approx. 3,000 items Sales results: Approx. 7,000 million yen Continue the sale in 2H while r
Slide 34: Product Strategy (2)
Product Strategy (2) Use of processing centers Since August 21, we have been working to make the marine product departments of five stores in the Kinan area into centers. This is intended to improve man-hour efficiency, aiming to improve annual profitability by approx. 3,800 thousand yen per store.
Slide 35: Product Strategy (3)
Product Strategy (3) OKUWA Sweets Club Sweets for a Cup of Tea Copyright © OKUWA Co., Ltd. All Rights Reserved. -35-
Slide 36: Product Strategy (4)
Product Strategy (4) Acquisition of the JFS-B standard certification Wakayama Food Factory (noodle department) became certified under JFS-B, an international food safety standard. (Date of certification) August 22, 2024 We will take advantage of our strengths as a manufacturing retailer in future in
Slide 37: Sales Promotion Measures (1)
Sales Promotion Measures (1) Release of the new OKUWA app The new OKUWA app was released on July 1, exceeding 150 thousand members (as of August 25). A widespread use of the app is expected to boost the effect of one-to-one marketing. For iPhone For Android Copyright © OKUWA Co., Ltd. All Rights Res
Slide 38: Sales Promotion Measures (2)
Sales Promotion Measures (2) Expansion of the new OKUWA app’s features Register as a member Make electronic payments Check purchase history Next Sept. Oct. Nov. Dec. Jan. Feb. fiscal year Smartphone checkout (Shopimo Checkout) O-CARD Plus credit card payment Smartphone checkout function was released
Slide 39: Sales Promotion Measures (3)
Sales Promotion Measures (3) Utilization of the new OKUWA app to increase the number of customers ・Expected to achieve the target number of registered app members by the end of 2024 ・More than 90% of new app members have visited stores (1H results) ・Promote the use by exiting members and strengthen
Slide 40: Marketing Strategy (1)
Marketing Strategy (1) Flow of customer-originated marketing activities Initiatives for 1H Initiatives for 2H Collect Apply to customer Understand customers sales floors Communicate to customers information and products POS data App coupons to prevent ID-POS customer attrition data analysis tool Cus
Slide 41: Marketing Strategy (2)
Marketing Strategy (2) Initiatives in 2H ・Allocate product shelf space in line with potential needs in the area ・Utilize information for products on flyers ・Nurture personalities for “taking the offense” and “polishing” 2H target 1.0% increase in sales Copyright © OKUWA Co., Ltd. All Rights Reserved
Slide 42: Promotion of IT Strategy (DX) (1)
Promotion of IT Strategy (DX) (1) Initiatives for productivity improvement (1) Redefine standard working time Calculate Set Identify Manage Move away Set necessary based on standard necessary personnel from year-on- time for work plan and working man- expenses year time each task hours manufacturing
Slide 43: Promotion of IT Strategy (DX) (2)
Promotion of IT Strategy (DX) (2) Initiatives for productivity improvement (2) Share the purpose and image of implementation Maximize efficiency through division of labor between humans and machines Elimination of Elimination Gap inof More Shift to tasks gaps in overlaps sophisticated that add abili
Slide 44: New Store Openings (1)
New Store Openings (1) Business type Scheduled date of opening Store name Prefecture (directly-operated sales floor area) December Tondabayashi Asahigaoka Store Osaka SSM 2,486m2 (Tondabayashi Asahigaoka Store) ➢The 21st store in Osaka. The 83rd SSM type store. ➢Aim to enhance dominance in southeast
Slide 45: New Store Openings (2) (New Business Type)
New Store Openings (2) (New Business Type) Opening of ANDDELICA Tanimachi Store On September 18, ANDDELICA Tanimachi Store, a store dedicated to delicatessen and bakery products, opened in Chuo-ku, Osaka City. The store mainly aims to meet demand for lunch in business districts and ready-to-eat food
Slide 46: Sustainability Management
Sustainability Management Publication of an integrated report We created our first integrated report and disclosed it on September 25. The report includes information on non-financial initiatives, in addition to financial information. https://www.okuwa.net/eco/report.html (in Japanese) Copyright © O
Slide 47: A supermarket that continues to transform, with a timeless spirit
A supermarket that continues to transform, with a timeless spirit Copyright © OKUWA Co., Ltd. All Rights Reserved. -47-