Slide 1: Consolidated Results of Operations, Fiscal Year Ended March 31, 2020
Consolidated Results of Operations Fiscal Year Ended March 31, 2020 USS Co., Ltd. May 2020 1
Slide 2: Results of Operations Fiscal Year Ended March 2020
Results of Operations Fiscal Year Ended March 2020 2
Slide 3: Highlights of FY3/2020
Highlights of FY3/2020 ◼ Consolidated results of operations • Sales: Down 3% and 2% below the plan • Operating profit: Down 3% and 3% below the plan ◼ Impact of the COVID-19 • Continued business operations accompanied by rigorous measures to protect members and employees • Consigned and contracted v
Slide 4: FY3/2020 – Summary of Consolidated Results of Operations
FY3/2020 – Summary of Consolidated Results of Operations ◼ Sales decreased 2.2% YoY to ¥78.14 billion, operating profit was down 3.0% to ¥36.00 billion, and profit attributable to owners of parent decreased 19.2% to ¥20.63 billion. ◼ JAA goodwill impairment of ¥3.86 billion (Million yen) FY3/2019 FY
Slide 5: FY3/2020 – Reasons for Change in Operating Profit (Actual)
FY3/2020 – Reasons for Change in Operating Profit (Actual) Net sales Cost of sales SG&A expenses Increase in recycling 0.25bn Decrease in cost of goods sold 0.65bn Decrease in sales commission 0.12bn Decrease in contract completion rate ▲1.01bn Decrease in depreciation 0.23bn Decrease in advertising
Slide 6: Net Sales and Operating Profit by Business Segment
Net Sales and Operating Profit by Business Segment (Million yen) Net sales FY3/2018 FY3/2019 FY3/2020 Year on year Auto auction 59,521 64,684 63,350 97.9% Used vehicle purchasing and selling 9,827 9,701 9,099 93.8% Other 5,805 5,522 5,692 103.1% Total 75,153 79,908 78,143 97.8% Operating profit (ope
Slide 7: Consolidated Balance Sheets and Statements of Cash Flows
Consolidated Balance Sheets and Statements of Cash Flows ◼ Cash used in investing activities increased for the rebuilding of the JAA auction site and other projects. ◼ In financing activities, dividend payments and the purchase of treasury stock were major uses of cash. ◼ Equity ratio: 83.0% Consoli
Slide 8: Automobile Market
Automobile Market New Car Registrations and YoY Changes Used Car Registrations and YoY Changes (Thousand vehicles) (Thousand vehicles) 3,000 30% 3,000 30% 20% 20% 7.3% 8.1% 2,008 1,963 1,967 10% 1,908 10% 4.0% 1,577 1,540 1.0% 1,670 1,609 1,648 1,673 1,609 1,704 1,672 1,720 1,627 1,528 1,500 1,396 1
Slide 9: Auto Auction Segment (1)
Auto Auction Segment (1) ◼ Vehicles consigned decreased 0.2% YoY to 2,924 thousand; contract completions decreased 2.9% YoY to 1,772 thousand (contract completion rate: 60.6% against 62.3% in the previous fiscal year) ◼ Auction fees decreased primarily because of decreases in vehicles consigned and
Slide 10: Auto Auction Segment (2)
Auto Auction Segment (2) No. of Vehicles Consigned and Contract Completion Rate Vehicles Contracted Vehicles consigned Vehicles contracted USS Industry's average (excl. USS) (Thousand vehicles) 1,000 80% 784 752 814 771 756 671 636 703 664 699 689 706 68.4% 70% 66.3%65.9%66.4% 67.0% 575 65.9%65.2% 6
Slide 11: Auto Auction Segment (3)
Auto Auction Segment (3) Total Consignment Fees and Total Contract Completion Fees and Consignment Fee per Vehicle Contract Completion Fee per Vehicle Total consignment fees Fee per vehicle Total contract completion fees Fee per vehicle (Million yen) (yen) (Million yen) (yen) 5,000 5,317 5,357 6,000
Slide 12: Auto Auction Segment (4)
Auto Auction Segment (4) From April 1, 2019 to March 31, 2020 (Number of auctions held, Vehicles) Number of auctions Number of consigned vehicles Number of contract completions Contract completion rate FY3/20 FY3/19 FY3/20 FY3/19 YoY change FY3/20 FY3/19 YoY change FY3/20 FY3/19 Tokyo 49 49 662,972
Slide 13: Auto Auction Segment (5)
Auto Auction Segment (5) (Vehicles, %) Apr. May Jun. Jul. Aug. Sep. First Half Oct. Nov. Dec. Jan. Feb. Mar. Second Half Fiscal Year FY3/18 234,454 183,593 218,888 195,997 169,623 209,872 1,212,427 238,322 250,552 214,426 201,672 244,650 337,961 1,487,583 2,700,010 YoY 0.5 11.0 12.1 4.9 20.1 4.3 7.9
Slide 14: Used Vehicle Purchasing and Selling Segment
Used Vehicle Purchasing and Selling Segment ◼ At used vehicle purchasing subsidiary Rabbit, gross profit per vehicle increased but sales and earnings were down because of the smaller number of vehicles sold. (Net sales decreased 11.3% YoY to ¥5,059 million, Operating profit decreased 0.9% to ¥64 mil
Slide 15: Other Segment
Other Segment ◼ The recycle business posted higher sales but lower earnings as the volume of plant demolition work increased but declining metal scrap prices from April weighed on earnings.(Net sales increased 5.1% YoY to ¥5,161 million, Operating profit decreased 35.6% to ¥309 million) ◼ In the use
Slide 16: Market Overview, Strategy for Creating Value Over the Medium Term
Market Overview Strategy for Creating Value Over the Medium Term 16
Slide 17: Used Car Auction Market and USS Market Share
Used Car Auction Market and USS Market Share ◼ Maintained higher market shares and profit in the period of sluggish markets following the financial crisis of 2008-2009. ◼ The JAA acquisition significantly raised the USS Group’s market share 1990(CY) market share 2000(CY) market share 2019(CY) market
Slide 18: Basic Policy on Finance and Shareholder Distributions
Basic Policy on Finance and Shareholder Distributions Increase shareholder distributions while continuing investment for growth ◼Consolidated dividend payout ratio: Over 55% from FY3/2020 Consolidated dividend payout ratio 67.0% 70% Policy Actual 60% 51.5% 50.1% 50.1% 45.1% 45.1% 47.0% 50% 43.1% 44.
Slide 19: Earnings Distributions – Dividend Policy
Earnings Distributions – Dividend Policy ◼Increase the consolidated payout ratio (50% to 55%) from FY3/2020 ◼Plan to pay 55.4 yen dividend per share for FY3/20 (up 5.0 yen) ◼ 20 consecutive years of dividend growth since listing DPS Consolidated payout ratio (Yen) 60 80% 55.4 50.4 50 47.8 46.4 67.0%
Slide 20: Earnings Distributions – Total Payout Ratio
Earnings Distributions – Total Payout Ratio ◼Flexible stock repurchases while maintaining stable dividend. Dividend Paid Stock Repurchased Total Payout Ratio (Million yen) 30,000 120% 117.6% 111.4% 103.5% 104.0% 84.2% 20,000 80% 76.8% 59.3% 53.8% 50.1% 45.1% 52.1% 10,000 45.1% 40% 33.0% 16.7% 11.9%
Slide 21: Earnings Distributions – Return on Equity (ROE)
Earnings Distributions – Return on Equity (ROE) ◼No change in the medium-term ROE target of at least 15%. ROE 25% 19.5% 18.2% 16.5% 15.9% 15.8% 15.5% 15.3% 15.1% 14.5% 14.2% 14.7% 14.8% 14.5% 15% 16.0% 14.1% 13.7% 15.0% 10.9% 11.7% 11.3% 10.4% 5% FY3/00 FY3/01 FY3/02 FY3/03 FY3/04 FY3/05 FY3/06 FY3/
Slide 22: Cycle of Rising Corporate Value Driven by Business Growth and Shareholder Distributions
Cycle of Rising Corporate Value Driven by Business Growth and Shareholder Distributions ◼Aim at increasing shareholder value by a two-pronged strategy of solid investments in growth and active shareholder distributions Leveraged Internet Increase in number of and IT members – users Rise in contract
Slide 23: How USS Creates Social and Economic Value
How USS Creates Social and Economic Value ◼USS creates social and economic value by functioning as a platform for a used vehicle ecosystem. The used vehicle ecosystem The reuse cycle The new vehicle value chain Production Purchase of Used vehicle Steel Vehicle auctions Used vehicle and sale of used
Slide 24: Contact Information
Contact Information Notes General Affairs Department, • This document has been translated from the Supervisory Office, original Japanese as a guide for non-Japanese USS Co., Ltd. investors. • Forward-looking statements in this material are based on information available to management at TEL : +81-52
Slide 25: Reference
Reference 25
Slide 26: History of USS Long-term Growth
History of USS Long-term Growth Before 2000 1982: Held the first auction with only 255 vehicles consigned 1988: Expanded the Nagoya Auction Site. The number of POS seats was 570 (the largest in Japan). Early nineties: Opened Kyushu and Tokyo Auction Sites 2017: Late nineties: Opened Okayama, Shizuok
Slide 27: Business Models for USS
Business Models for USS Used Ferrous vehicles Rabbit scrap End (Used vehicle ARBIZ Steel users purchases) makers Payment for Payments vehicles Payment Payments for vehicles Used Used vehicles vehicles Members Members submitting consigning vehicles Auto Auction successful bids (buyer) (seller） • • Us
Slide 28: Automobile Market and USS Revenue
Automobile Market and USS Revenue ◼ The number of vehicles consigned is correlated through trade-ins to (1) New car registrations and (2) Used car registrations ◼ Total demand comprises domestic demand (2) and overseas demand (3). In recent years, total demand has been driven mainly by overseas dema
Slide 29: New/Used Car Registrations and Auto Auction Market
New/Used Car Registrations and Auto Auction Market ◼ The auction market continued to expand till 2000 as the share of used vehicles sold through the auction market increased as a share of the total used vehicle market. Starting in the mid-2000s, older vehicles and vehicles with high mileage which wo
Slide 30: Corporate Governance
Corporate Governance ◼ The company’s governance organization has been improved in order to work toward the goal of increasing corporate value through continuing business growth ◼ Adopted the outside director system in FY3/2007 ◼ Strengthened the executive officer system in FY3/2013 ◼ Established vol