Autobacs Seven Co., Ltd. · TSE:9832
Autobacs Seven — H1 FY2011 Earnings Presentation
36 slides from Autobacs Seven's earnings presentation, Nov 5, 2010
Slide 1: Results for the Six Months Ended September 30, 2010
Translation ANALYST MEETING Results for the Six Months Ended September 30, 2010 November 5, 2010 Setsuo Wakuda Representative Director and CEO AUTOBACS SEVEN CO., LTD.
Slide 2: What We Want to Tell You Today
WHAT WE WANT TO TELL YOU TODAY 1. RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2010: Net Sales in line with estimate, but operating income below expectation due to decreased gross margin ratio 2. FINANCIAL FORECAST FOR THE LATTER SIX MONTHS OF FY 2011 (from Oct 1, 2010 to Mar 31, 2011): Achiev
Slide 3: 1. Results for the Six Months Ended September 30, 2010
1. RESULTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2010: 2
Slide 4: Financial Results: First six months of FY 2011
FINANCIAL RESULTS: First six months of FY 2011 SALES GAIN BUT PROFIT DECLINE: Net sales increased due to higher than expected sales of automotive goods that offset the sales drop of ETC devices. Profit declined due to gross margin drop. (Billion Yen) Six months ended September 30, 2010 Six months en
Slide 5: Financial Results: Summary
FINANCIAL RESULTS: Summary • Drop in demand for ETC devices • Influence of eco-car tax reduction and subsidy program Good for: Sales of new cars, car navigation devices(with audio systems), wheels, interior, etc. Not good for: Sales related to statutory safety inspection, oil, etc. • Influence o
Slide 6: Sales Ups and Downs by Merchandise
SALES UPS AND DOWNS BY MERCHANDISE Retail sales ups and downs by merchandise category (Million Yen) (for the six months ended Sep 30 2010, YoY change in amount, total store basis) 2,000 Car Electronics (excl. Inspections/ +3.8％ in quantity +19.0％ in quantity Motor Sports +1.2％ in revenue Car Leisure
Slide 7: Retail Sales Including Franchisees
RETAIL SALES INCLUDING FRANCHISEES RETAIL SALES INCLUDING FCs*: 140.1 billion yen (Billion Yen) (-2.1% YoY) 143.1 140.1 150 6.4 6.9 Statutory safety inspection sales**:6.9 billion yen 5.8 7.1 (+8.4% YoY) 120 Number of cars inspected：230,000 cars (+11.3% YoY) Number of fully certified & designated st
Slide 8: Major Drivers of Variance
MAJOR DRIVERS OF VARIANCE (Billion Yen) Six months ended September 30, 2010 Six months ended Results YoY September Major drivers of variance % of Sales change 30, 2009 Net sales 115.0 +0.4％ Non-consolidated: Flat (See appendix) 114.5 Domestic store subsidiaries: +0.5 BY Overseas store subsidiaries:
Slide 9: Reasons for the Gross Margin Drop
REASONS FOR THE GROSS MARGIN DROP CONSOLIDATED GROSS PROFIT MARGIN Goal: 32.7% ⇒ Result: 31.1% (-0.5 billion yen) Positive factors • Strengthened margin control • Margin improvement by purchase reform Negative factors • Change in merchandise sales mix; High margin items failing to achieve sales goal
Slide 10: Segment Information
SEGMENT INFORMATION (Billion Yen) Six months ended Six months ended YoY Initial September 30, September 30, % to Plan change Forecast 2010 2009 Net sales 94.12 94.18 -0.1% 90.9 +3.5% Non- consolidated Operating income 4.49 5.34 -15.8% 4.7 -4.4% Domestic store Net sales 39.22 38.69 +1.4% 39.0 +0.6% s
Slide 11: Decrease in Consolidation Adjustments
DECREASE IN CONSOLIDATION ADJUSTMENTS Consolidation Adjustments (Million Yen) Six months ended Six months ended September 30, September 30, 2010 2009 Operating Income for segment total 4,164 5,522 Inventories (Unearned income of subsidiary inventories, etc.) (201) (185) Depreciation of Goodwill (134
Slide 12: Geographical Segments: Overseas
GEOGRAPHICAL SEGMENTS: Overseas Results of overseas subsidiaries by country France China Singapore Thailand Number of Stores at September 30, 2010 11 4 2 3 -include FC stores- Comparable store sales YoY change for the six months ended +6.0% +6.1% +12.2% -0.2% September 30, 2010 -include FC stores- s
Slide 13: 2. Financial Forecast for the Latter Six Months of FY 2011
2. FINANCIAL FORECAST FOR THE LATTER SIX MONTHS OF FY 2011 (from October 1, 2010 to March 31, 2011): 12
Slide 14: Forecasts for FY 2011
FORECASTS FOR FY 2011 (Billion Yen) Fiscal Fiscal year ending March 31, 2011 year Forecast for Results for Forecast for Revised forecast ended the 12 months the six the latter six for the 12 months Revised Mar 31, ending Mar 31, months ended months of FY ending amount 2010 2011 ① Sep 30, 2010 2011 M
Slide 15: Sales Measures: Latter Six Months of FY 2011
SALES MEASURES: Latter Six Months of FY 2011 Business environment: Consumer spending remains weak in the sluggish economy; new car sales decline due to end of eco-car subsidy program; demand grows for snow tires and terrestrial digital tuners Retail Sales measures to be emphasized: (1) To improve pr
Slide 16: Gross Margin Improvement Initiatives
GROSS MARGIN IMPROVEMENT INITIATIVES Gross margin is planned to improve in the latter six months of FY 2011 due to environmental factors and sales improvement measures Changing Business Environment • Sales of car navigation devices and automobiles, which margins are rather low, are supposed to scale
Slide 17: Sales Improvement Measures: Sample
SALES IMPROVEMENT MEASURES: Sample Enhance sales corner of terrestrial Display car navigation models digital tuners, which is scheduled for depending on type of vehicles complete implementation in July 2011 16
Slide 18: 3. Measures and Progress of AUTOBACS 2010 Medium-Term Business Plan
3. MEASURES AND PROGRESS OF “AUTOBACS 2010 MEDIUM-TERM BUSINESS PLAN”: 17
Slide 19: Measures of the AUTOBACS 2010 Plan
MEASURES OF THE AUTOBACS 2010 PLAN Measures Progress of individual measure 1. Improving store profitability Began implementation in July 2010. Aiming to complete 1)Store reform ○ reforms at 145 stores by the end of March 2011. 2)Merchandise/ Evaluating and selecting suppliers for strategic ○ purchas
Slide 20: Store Reform: Implementation Scheme
1-(1) STORE REFORM: Implementation Scheme To make stores “easier to shop with improved efficiency” Level 1 ・ Upgrading main shelves (Multi-faced displays and clear merchandise information to Level 1 to 2 make it easier for customers to select items by themselves) Implemented at 32 AUTOBACS ･ Establi
Slide 21: Store Reform: Proceeding on Schedule
1-(1) STORE REFORM: Proceeding on Schedule The goal of 100 store reforms in the fiscal year ending March 31, 2011 has been lifted up to 145 stores due to faster-than-planned implementation (Stores) Store Reforms (By regional division: number of stores) 40 計画店舗 Reforms planned for the latter six mont
Slide 22: Store Reform: Successful Results
1-(1) STORE REFORM: Successful Results September Results (AB stores average vs. after-reform stores average) Average growth Average growth rate of after- rate of AB format Difference reform stores stores (YoY) (YoY) Retail sales 101.3% 108.4% +7.1% Number of customers 98.9% 103.1% +4.2% Number of it
Slide 23: Store Reform: Pilot Store Opening
1-(1) STORE REFORM: Pilot Store Opening AUTOBACS Yamato Koriyama Store ← Store focused on “easy shopping” ・Expanded aisles and improved visibility ・Glass entrance for an open and inviting atmosphere “Easy to find and choose” → ・Wide aisles, improved visibility ・Appropriate signage & advertisement ←
Slide 24: Merchandise/Purchase Reform
1-(2) MERCHANDISE/ PURCHASE REFORM Current Effect: Cost reduction of approximately 0.3 billion yen. The goal of gross profit improvement through this reform is 0.65 billion yen for the FY ending March 31, 2011. Merchandise Reduced cost Actual steps taken to reduce cost Tires Approx. Strategic tie-up
Slide 25: Human Resources/Operation Reform
1-(3) HUMAN RESOURCES/ OPERATION REFORM Prioritize employee training to carry out “Comfortable customer services and appropriate proposals.” Trainings applied Training planned for the as of Sep 30, 2010 latter six months of FY 2011 Customer Treatment Training Training offered Trainings planned be -T
Slide 26: Measures to Increase Market Share
2. MEASURES TO INCREASE MARKET SHARE Measures are continued to be implemented for the latter six months of the FY ending March 31, 2011. (1) New store openings (development of small, low-cost stores) • Establish project team aiming for the development of low-cost operation stores • Accelerate prepar
Slide 27: Overseas Business
3. OVERSEAS BUSINESS Business turning into the black in the currently operating overseas countries (except China.) Especially, business performance is improving in France. Continuing research and preparation for expansion in China as it is deemed as one of our future growth pillars. Plan to open
Slide 28: What We Want to Tell You Today: Review
WHAT WE WANT TO TELL YOU TODAY: Review 1. We plan to improve our gross margin through several sales enhancement measures and also through favorable environmental factors 2. “AUTOBACS 2010 MEDIUM-TERM BUSINESS PLAN” is progressing in line with our plan. Focusing on the improvement of store profitabil
Slide 29: Appendix
Jevnvca tat age) AUTOBACS APPENDIX 28
Slide 30: Performance Breakdown
PERFORMANCE BREAKDOWN Six months ended Sep 30, 2010 Non-consolidated (Billion Yen) Net Sales Wholesale +0.7 BY ↑Tires & wheels, internal items, new & used cars +0.8% ↓Car electronics devices motorsports goods 94.1 BY -0.7 BY ↑Services YoY: -0.06 BY Retail -13.2% ↓car electronics devices, motorcycle
Slide 31: Balance Sheet: Assets
BALANCE SHEET: Assets (Billion Yen) Total Assets 210.7 BY 199.5 BY Cash and deposits Major items changed Trade notes 43.8 and account receivables 38.8 Cash and deposits: -5.0 BY Lease investment Marketable securities：-0.9 BY 23.3 assets 22.5 -decrease in company bond 14.6 Securities 13.8 14 .0 Tangi
Slide 32: Balance Sheet: Liabilities and Equity
BALANCE SHEET: Liabilities and Equity (Billion Yen) Total Liabilities and Equity 210.7 BY 199.5 BY Accounts payable Major items-1.0 ST borrowings: changed BY 15.8 ST borrowings and corporate 5.0 bond 14.3 20.7 4.0 ST borrowings: -1.0 BY Other ST 16.8 8.3 liabilities 8.9 8.3 Other ST liabilities Bond
Slide 33: Dividend Plan
DIVIDEND PLAN Dividend per share and Dividend on Equity Yen 140 130 4% 300% 125 260.6% 120 3.0% 3.0% 250% 100 100 3% 100 2.3% 2.4% 200% 80 2% 150% 58 1.4% 60 100% 76.4% 75.2% 1% 40 50% 24.3% 20 0% 0% 0 March 07 March 08 March 09 March 10 March 11(E) March 07 March 08 March 09 March 10 March 11 Divid
Slide 34: Store Openings and Closings
STORE OPENINGS AND CLOSINGS Domestic Store Fiscal year ending March 31, 2011 As of As of From Apr 1, 2010 From Oct 1, 2010 March As of March to Sep 30, 2010 (Result) to Mar 31, 2011 (Forecast) 31, Sep 30, 31, 2010 New S/B R/L Close 2010 New S/B R/L Close 2011 AUTOBACS 395 +1 +3 399 +1 ▲1 399 Super A
Slide 35: Performance Results of Franchisees
PERFORMANCE RESULTS OF FRANCHISEES Ordinary Income of Franchise Companies (Million Yen) 4,000 Total of profit-making FCs Total of loss-making FCs Ordinary income(Gross) 2,000 1,394 308 0 -334 -1,204 -2,000 -2,389 -4,000 6 months ended 6 months ended 6 months ended 6 months ended 6 months ended Sep 3
Slide 36: Forward-Looking Statements
Forward-Looking Statements These materials include forecasts regarding the Company’s future plans, strategies, and performance. This information is based on judgments and estimates made in accordance with information currently available. Actual results may differ materially from forecasts due to suc