Fast Retailing Co., Ltd. · TSE:9983
Fast Retailing — H1 FY2015 Earnings Presentation
29 slides from Fast Retailing's earnings presentation, Apr 9, 2015
Slide 1: Introduction by Tadashi Yanai, Chairman, President and CEO
I am Tadashi Yanai, Chairman, President and CEO of Fast Retailing. Today, I would like to talk you through our business performance for the first six months of fiscal 2015, or the six months from September 2014 through February 2015, and also give you an idea of our future business outlook and strat
Slide 2: First half fiscal 2015 review
First, looking back on the first half of fiscal 2015, Fast Retailing generated large gains in revenue and profit, both of which outstripped our expectations.
Slide 3: Full-year forecasts to August 31, 2015
Moving on to our forecasts for the full business year to August 31, 2015, we estimate Group revenue will expand to ¥1.65 trillion yen (+19.3% year on year), operating profit will expand to ¥200.0 billion (+53.4%) and profit attributable to owners of the parent will expand to ¥120.0 billion (+61.0%).
Slide 4: First-half performance by segment
Looking back on the first-half performance, UNIQLO International stands out for its continued buoyant pace of growth. Operations in Greater China and South Korea are still expanding strongly. UNIQLO Japan achieved a strong increase in profit in the first half, thanks to buoyant sales of core items.
Slide 5: Targets: ¥5 trillion revenue and ¥1 trillion operating profit
Fast Retailing has set itself a target to achieve revenue of ¥5 trillion and operating profit of ¥1 trillion, and a broader ultimate goal to build UNIQLO into the number one apparel brand in the world. As a step on the way to that journey, our aim is to expand revenue to ¥2.5 trillion within the nex
Slide 6: Five key points of future growth strategy
Looking ahead at our future growth strategy, there are five key points that I would like to mention to you today. First, our Japan-based global headquarters needs to direct global operations firmly, in order to ensure full implementation of our Global One and Zenin Keiei management principles. We mu
Slide 7: Strategy 1: Japan-based global HQ directing worldwide operations
Let’s talk now in more detail about the first strategy I mentioned: Enabling the Japan- based global HQ to direct operations worldwide, and ensuring full implementation of the Global One and Zenin Keiei management principles.
Slide 8: Reaffirming Japan as the global headquarters
What does this mean exactly, and how can it be achieved in practice? Well, first, we need to reaffirm Japan’s position as the global headquarters, and then enable it to apply proven successful UNIQLO models and practices from the Japanese, Greater China, and South Korean markets to all UNIQLO and ot
Slide 9: Strategy 2: Growth at UNIQLO International
Our second strategic focus is to promote continued strong growth at UNIQLO International, as part of our drive to build UNIQLO into the No.1 apparel brand in the world.
Slide 10: UNIQLO No.1 in Japan, Greater China and South Korea
Already today, UNIQLO has achieved No.1 status in Japan, Greater China, and South Korea in terms of sales, profit, and brand power. UNIQLO is also carving a firm position and building its brand in Southeast Asia, U.S., Europe, and Australia. Our ultimate aim is to make UNIQLO the No.1 apparel brand
Slide 11: International stores to overtake Japan stores in fall 2015
As this slide shows, we expect the number of UNIQLO International stores will overtake the number of UNIQLO Japan stores in fall 2015.
Slide 12: Recent UNIQLO brand rankings
I’d now like to mention some of the recent rankings announced for the UNIQLO brand. Interbrand ranked UNIQLO seventh overall in Japan’s Best Global/Domestic Brands 2015. In China, UNIQLO won the Gold Award for Digital Advertising at the Innovative Marketing Summit, held in December 2014. Then in Apr
Slide 13: Greater China and South Korea as key growth drivers
At UNIQLO International, Greater China and South Korea are the key growth drivers. Going forward, we aim to boost sales close to ¥300 billion in Greater China in fiscal 2015, and we want to expand our network to 1,000 stores in the near future. We are also working to boost sales in South Korea to cl
Slide 14: Southeast Asia and Oceania expansion
In Southeast Asia and Oceania, we are looking to promote further growth by opening over 50 stores each year across the region. In particular, we will expand the pace of new store openings in the Australian market. We are also expanding our competitive product ranges to suit countries with differing
Slide 15: Accelerating store openings in North America
Moving on to North America, we plan to accelerate the pace of new store openings. In terms of UNIQLO’s development in the U.S. market, we are currently at the stage of entering new areas, while further concentrating our presence in regions where we already have stores. As part of that process, we pl
Slide 16: Expansion in Europe
In Europe, our strategy is to open UNIQLO stores in all of the continent’s major cities as soon as possible. Our next step will be to open our first store in Belgium, in Antwerp, in Fall 2015. We also intend to greatly expand and refurbish our 311 Oxford Street Global Flagship Store in London.
Slide 17: Strategy 3: Locally managed store network
Another important pillar of our future growth strategy is to develop a locally managed store network, directed by store staff. This doesn’t necessarily mean transforming our network from a centrally directed chain of retail stores into a locally managed store network. Rather it means developing and
Slide 18: Empowering local store staff and management
Considering the current economic conditions in Japan and other parts of the world, and the underlying conditions in the retail industry, it would be impossible to expand our business without extending more power to local store staff, and enhancing local management resources. Empowering locally manag
Slide 19: Sapporo Esta store as community retailing
Our Sapporo Esta store, opened in March 2015, is a great example of community retailing. It offers our largest single-level sales floor in the world, situated just in front of Sapporo railway station. Knowledgeable local store managers and staff determine the layout, product mix, and inventory to pe
Slide 20: Community-focused marketing in Sapporo
The new Sapporo Esta store also illustrates our fresh approach to community-focused marketing, which strives to empower local customers and enhance the local community. As part of this community-focused approach, we distributed leaflets before opening day in Sapporo introducing nearby stores and res
Slide 21: Strategy 4: World-class supply chain
The fourth pillar of our future strategy is to build a world-class supply chain.
Slide 22: Improving planning, production, marketing and distribution
We are already working to improve different areas within our supply chain, from planning to production, marketing, and distribution and retail. This involves the creation of new research and design centers in Paris, London, and Los Angeles, which will work alongside existing centers in Tokyo, New Yo
Slide 23: Creating an entirely new industry through supply chain
The reason I want us to form a superior supply chain is so that we can break free from the current limitations of the apparel, fashion, and retail industries, and create an entirely new industry.
Slide 24: Strategy 5: Strengthening GU and Global Brands
The fifth and final pillar of our future growth strategy is our drive to revolutionize and strengthen GU and other operations in our Global Brands segment.
Slide 25: GU medium-term targets and global expansion
As for GU, we are targeting sales of ¥300bln and operating profit of ¥30bln over the medium term. I believe that GU has carved itself a firm position in the Japanese apparel market as a brand offering fashion fun at low prices. We are also promoting GU’s expansion worldwide, from an initial focus in
Slide 26: Growing affordable luxury brands into $1 billion businesses
In terms of our affordable luxury brands, such as Theory, our U.S.-based J Brand denim label, and our France-based Comptoir des Cotonniers and Princesse tam.tam brands, we are looking to nurture the unique DNA that makes each individual brand special. It is also important to capitalize on establishe
Slide 27: CSR activities and TSURUMI Children's Hospice
Finally, I would like to talk to you about our corporate social responsibility activities. CSR is as important to me as our main business, and we commit to pursue our main business and our CSR in tandem, like the two wheels on a bicycle. Recently, UNIQLO has been helping to build Japan’s first commu
Slide 28: Partner factory monitoring and working conditions
FR works tirelessly to build solid long-term relationships with our partner factories, based on trust, and we are always looking to promote good working conditions and environmental policies. Part of this drive involves working to uphold and improve human rights, appropriate working conditions, and
Slide 29: Corporate mission and thank you
Finally, I would like to take this opportunity, as always, to remind you of Fast Retailing’s corporate mission. Changing Clothes. Changing Conventional Wisdom. Change the World. To create truly great clothing with new and unique value, and to enable people all over the world to experience the joy, h