Hikari Tsushin, Inc. · TSE:9435

Hikari Tsushin — Q1 FY2009 Earnings Presentation

27 slides from Hikari Tsushin's earnings presentation, Aug 13, 2008

  1. Slide 1: Financial Results for the First Quarter (1Q/FY2009)

    Financial Results for the First Quarter (1Q/FY2009) April 1, 2008～June 30, 2008 Aug 13, 2008 HIKARI TSUSHIN, INC.

  2. Slide 2: 1Q/FY2009 Summary of Consolidated Earnings Results

    1Q/FY2009 Summary of Consolidated Earnings Results <¥ Billions> Quarterly 1Q/FY2009 1Q/FY2008 Year on Year Apr/08 - Jun/08 Apr/07 - Jun/07 Net sales 73.2 68.3 107% Gross profit 34.4 35.6 97% Operating income 2.8 4.3 65% Ordinary income 3.7 4.9 76% Net income 1.6 2.9 55% 2

  3. Slide 3: Consolidated Results by Segment

    Consolidated Results by Segment ※Venture fund Business and Inter-segment elimination are unconsolidated Insurance SHOP Corporate <¥ Billions> 【Net Sales】 <¥ Billions> 【Operating Income】 100 5 4.3 80 73.9 68.8 3.4 4 0.6 5.3 3.3 3.1 60 0.3 3 1.4 45.1 38.0 1.2 0.6 36.8 4.4 40 2 22.1 0.7 2.3 2.4 20 1 32

  4. Slide 4: Sales Network (As of June 2008)

    Sales Network （As of June 2008） Dalian 55 Call Centers 75 Direct Sales Branches Shanghai New 54 Sales Subsidiaries (79 bases) open 1,639 Outlets （※ Includes outlets operated by the secondary agents) 492 Sales Agencies 15 Affiliated Listed Companies Call center Direct sales branch Sales subsidiary 4

  5. Slide 5: The Engagement by Segments

    The Engagement by Segments „ Corporate Business ・ Customer retention and expansion of our sales network ・ Development of new business models „ SHOP Business ・ Expanding of a sales network especially in our secondary agencies ・ Readjustment of unprofitable outlets „ Insurance Business ・ Maintain the

  6. Slide 6: SHOP Business: Net Sales & Operating Income

    SHOP Business: Net Sales & Operating Income <¥ Billions> 【Net Sales】 <¥ Billions> 【Operating Income】 40 2.0 36.8 38.0 30 1.5 1.4 1.3 22.1 20 17.9 1.0 16.7 0.7 0.7 0.6 10 0.5 0 0.0 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q FY2005 FY2006 FY2007 FY2008 FY2009 FY2005 FY2006 FY2007 FY2008 FY2009 6

  7. Slide 7: SHOP Business: Number of Handsets that Generate Recurring Commission

    SHOP Business: Number of Handsets that Generate Recurring Commission <Ten thousand handsets> 300 238 240 214 197 200 185 182 2.14 million 100 Holding Handsets （As of June, 2008） 0 1Q 1Q 1Q 1Q 1Q 4Q FY2005 FY2006 FY2007 FY2008 FY2009 FY2009 (Forecast) 7

  8. Slide 8: SHOP Business: Sales Network

    SHOP Business：Sales Network （As of June, 2008) ＜Outlets＞ 2000 1,639 1500 1,270 1000 500 457 435 467 0 1Q 1Q 1Q 1Q 1Q FY2005 FY2006 FY2007 FY2008 FY2009 Further expansion of our sales network especially in our secondary agencies 8

  9. Slide 9: Corporate Business: Net Sales & Operating Income

    Corporate Business: Net Sales & Operating Income <¥ Billions> 【Net Sales】 <¥ Billions> 【Operating Income】 40 3.0 32.6 2.5 2.4 2.3 30 26.7 2.0 21.9 20 18.6 1.5 17.4 1.2 1.0 10 0 0.0 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q FY2005 FY2006 FY2007 FY2008 FY2009 FY2005 FY2006 FY2007 FY2008 FY2009 9

  10. Slide 10: Corporate Business: Copiers

    Corporate Business: Copiers Sales Volume Holding Volume/ Ratio of Color Copiers <Unit> <Unit> （％） 101,775 10,000 100,000 40 95,998 8,358 8,225 8,000 35.7 30 90,000 6,000 28.5 20 4,000 80,000 10 2,000 0 70,000 0 1Q 1Q 1Q 1Q FY2008 FY2009 FY2008 FY2009 Color copiers ratio Black&white Color is increase

  11. Slide 11: Corporate Business: Five Strategies

    Corporate business：Five Strategies ①Main products ②Customer support ③Specialties in certain genres INET Website Advertisement Telecommunication Call center Support by media services WEB mail-order visiting Lease Security Contents Finance Office automation Improvement of equipments customer satisfact

  12. Slide 12: Corporate Business: Call Centers in China

    Corporate Business: Call centers in China Business 2006 Outbound call business Dalian call center Inbound call business Other contract business, agency business Scale of operation NEW Employees (As of June, 2008) 2008 Dalian 100 Shanghai 70 Shanghai call center (Including part-time) As our first for

  13. Slide 13: Corporate Business: e-machitown Co, Ltd.

    Corporate Business: e-machitown Co, Ltd. No.1 mobile internet advertisement media(monthly sales and number of clients) (As of June, 2008) Focused on mobile phone contents, and became No.1 mobile internet company Way-out originality, Ad effectiveness, high customer satisfaction Finance Insurance Inte

  14. Slide 14: Insurance Business: Net Sales/Operating Income

    Insurance Business: Net Sales/Operating Income <¥ Billions> 【Net Sales】 <¥ Billions> 【Operating Income】 2.0 8 1.5 6 5.3 1.2 4.4 1.0 4 3.4 2.5 0.6 2 0.5 0.4 0.4 1.5 0.3 0 0.0 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q FY2005 FY2006 FY2007 FY2008 FY2009 FY2005 FY2006 FY2007 FY2008 FY2009 14

  15. Slide 15: Insurance Business: Number of Operators

    Insurance Business: Number of Operators <Operators> 4,400 4,000 4,000 3,600 3,600 3,600 3,300 3,300 3,300 3,000 3,000 Increased by hiring 2,000 new graduates 1,000 0 Jun Sep Dec Mar Jun Sep Dec Mar Jun FY2007 FY2008 FY 2009 15

  16. Slide 16: Insurance Business: Number of Subscribers

    Insurance Business: Number of Subscribers <Cases> <Cases> 【Stock Volume】 【Contracts in Direct Sales】 312,609 300,000 50,000 47,919 256,857 40,000 34,737 35,430 193,292 200,000 30,000 25,724 110,806 20,000 16,203 100,000 63,647 10,000 0 0 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q FY2005 FY2006 FY2007 FY2008 FY20

  17. Slide 17: Venture Fund Business: Outline

    Venture Fund Business: Outline Number of Funds：6 ※1 Total Balance of Funds External Investments: 68％ Total Balance：13.3bn JPY※2 13.3bn JPY 9.0bn JPY （As of June, 08） Investments Made：8.1 bn JPY Investments made by Hikari Tsushin: 32％ Net Assets：11.4 bn JPY※2 4.3bn JPY ※1 Excludes liquidating funds ※

  18. Slide 18: FY2009 Earning Forecast

    FY2009 Earning Forecast <¥ Billions> FY2009 Half-year Full-year Progress 1Q result Net sales 150 335.0 73.2 48.8% Operating income 8.5 25.5 2.8 32.9% Ordinary income 8.5 25.5 3.7 43.5% Net income 5.0 16.0 1.6 32.0% ① Sales and income from the venture fund business are not reflected in this forecast.

  19. Slide 19: 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 deprived from information that is cur

  20. Slide 20: Appendix

    © HIKARI TSUSHIN, INC. Appendix 20

  21. Slide 21: Employees Data

    Employees Data Number of full-time and part-time employees <Employees> Part-time Full-time 14,000 Part-time Full-time 47％ 53％ 12,000 10,000 8,000 （As of June, 2008) 6,000 4,000 2,000 0 June, 2007 June, 2008 21

  22. Slide 22: CSR

    CSR Environmental Activities Hikari Tsushin is a member of Team Minus 6%, a project run by the Ministry of the Environment. Hikari Tsushin is committed to action on global warming. <Bottle Cap collection for Vaccine Donations> Hikari Tsushin collects PET bottle caps in Hikari Center Building (The Hi

  23. Slide 23: CSR

    CSR Security Employees Education z Entrance control system z Conduct Information control seminar z Recording calls at call centers z Online test for all employees to prevent compromise z E-mail censorship z Internal audit by the Information control committee z Authorization control to personal infor

  24. Slide 24: Engagements of Hikari Tsushin Group

    Engagements of Hikari Tsushin Group 1950～1980 ～1990 2000～2008 2009～ Earth Earthconscious conscious technologies technologies IPIPvideo video phone phone Advanced Advancedtelework telework E-commerce E-commerce 2010 2010 4th 4thgeneration generationcell cellphone Ubiquitous phone Ubiquitoussociety so

  25. Slide 25: Hikari Tsushin Group Overview

    Hikari Tsushin Group Overview Business Segments Basic Business Model Building core businesses on “Stock Model” for stable and long-term growth. Busin ess Maj or Products Sales Chan n els Target Users Segmen ts Direct Sales Cellular phones Branches Copiers OA Equipments Insurance etc Corporate 6 mill

  26. Slide 26: Consolidated Cash Flows

    Consolidated Cash Flows <¥ Billions> Q1/FY2007 Q1/FY2008 Q1/FY2009 Cash flow from operating activities △ 0.1 △ 0.9 4.9 Cash flow from investing activites △ 0.7 △ 5.0 △ 3.0 Cash flow from financial activities 2.0 5.3 1.0 Cash and cash equivalents at the end of the term 16.1 21.1 18.6 26

  27. Slide 27: The best leading distributor in Japan

    The strength of the Hikari Tsushin Group is sales and marketing capabilities. Leveraging these capabilities, we will respond to diverse customers’ needs on our quest to become the leader in our industries and specified areas, on the path to our ultimate goal of becoming the best leading distributor

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