Uss Co., Ltd. · TSE:4732
Uss — Q1 FY3/2021 Earnings Presentation
34 slides from Uss's earnings presentation, August 2020
Slide 1: Consolidated Results of Operations, First Quarter FY Ending March 31, 2021
Consolidated Results of Operations The First Quarter, Fiscal Year Ending March 31, 2021 USS Co., Ltd. August 2020 1
Slide 2: Results of Operations First Quarter Fiscal Year Ending March 2021
Results of Operations First Quarter Fiscal Year Ending March 2021 2
Slide 3: Highlights of 1Q FY3/2021
Highlights of 1Q FY3/2021 ◼ Consolidated results of operations • Sales: Down 19% / Operating profit: Down 26% ◼ Impact of the COVID-19 • Although new and used car registrations are declining, the current domestic demand for used cars is recovering. (In Jun. 2020, used car registrations increased 4%
Slide 4: 1Q FY3/2021 – Summary of Consolidated Results of Operations
1Q FY3/2021 – Summary of Consolidated Results of Operations ◼ Sales decreased 19.2% YoY to ¥ 16.05 billion, operating profit was down 26.7% to ¥ 6.73 billion, and profit attributable to owners of parent decreased 26.2% to ¥ 4.61 billion. ◼ The number of vehicles consigned and contract completions de
Slide 5: 1Q FY3/2021 – Reasons for Change in Operating Profit (Actual)
1Q FY3/2021 – Reasons for Change in Operating Profit (Actual) Net sales Cost of sales SG&A expenses Decrease in vehicles consigned ▲2.37bn Decrease in cost of goods sold 0.89bn Decrease in sales promotion expenses 0.07bn Decrease in contract completion rate ▲0.70bn Decrease in outsourcing expense 0.
Slide 6: Net Sales and Operating Profit by Business Segment
Net Sales and Operating Profit by Business Segment (Million yen) Net sales 1Q FY3/2019 1Q FY3/2020 1Q FY3/2021 Year on year Auto auction 16,356 16,358 13,302 81.3% Used vehicle purchasing and selling 2,254 2,067 1,486 71.9% Other 1,377 1,434 1,267 88.3% Total 19,987 19,861 16,056 80.8% Operating pro
Slide 7: Consolidated Balance Sheets and Statements of Cash Flows
Consolidated Balance Sheets and Statements of Cash Flows ◼ Cash used in investing activities increased due to the construction of a multi-level parking structure at the R-Nagoya auction site and other projects. ◼ In financing activities, dividend payments was major uses of cash. ◼ Equity ratio: 83.2
Slide 8: Automobile Market
Automobile Market New Car Registrations and YoY Changes Used Car Registrations and YoY Changes (Thousand vehicles) (Thousand vehicles) 3,000 40% 3,000 30% 20% 11.8% 20% 1,963 1,967 1,908 6.4% 10% 2.8% 1,670 1,609 1,648 1,673 1,609 1,704 1,672 1,720 1,627 -1.7%1,540-1.1% 1,557 1,500 1,278 1,371 0% 1,
Slide 9: Auto Auction Segment (1)
Auto Auction Segment (1) ◼ Vehicles consigned decreased 18.1% YoY to 631 thousand; contract completions decreased 25.7% YoY to 342 thousand (contract completion rate: 54.2% against 59.7% in the previous fiscal year) ◼ Auction fees decreased primarily because of decreases in vehicles consigned and th
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% 784 752 814 771 756 703 664 699 689 706 68.4% 636 631 70% 67.0% 575 65.9%65.2% 66.3%65.9%66.4% 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 5,362 5,394 5,333
Slide 12: Auto Auction Segment (4)
Auto Auction Segment (4) From April 1, 2020 to June 30, 2020 (Number of auctions held, Vehicles) Number of auctions Number of consigned vehicles Number of contract completions Contract completion rate 1Q FY3/21 1Q FY3/20 1Q FY3/21 1Q FY3/20 YoY change 1Q FY3/21 1Q FY3/20 YoY change 1Q FY3/21 1Q FY3/
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 FY3/19 266,046 232,114 254,075 224,212 206,245 234,019 1,416,711 234,741 257,451 207,046 224,051 262,464 327,663 1,513,416 2,930,127 YoY 13.5 26.4 16.1 14.4 21.6 11.5
Slide 14: Used Vehicle Purchasing and Selling Segment
Used Vehicle Purchasing and Selling Segment ◼ Operating loss at Rabbit, which buys and sells used vehicles, because of a decline in the number of vehicles sold as fewer people visited stores following the April 7 declaration of a state of emergency. (Net sales decreased 39.9% YoY to ¥771 million, Op
Slide 15: Other Segment
Other Segment ◼ Operating loss in the recycle business because of low prices of metal scrap. (Net sales decreased 8.7% YoY to ¥1,179 million, Operating loss ¥43 million (operating profit of ¥133 million in 1Q FY3/20)) ◼ Operating loss in the used vehicle export clearing service business because of a
Slide 16: Consolidated Forecast for FY3/2021
Consolidated Forecast for FY3/2021 16
Slide 17: FY3/2021 – Consolidated Forecast
FY3/2021 – Consolidated Forecast ◼ New car registrations and used vehicle exports remain uncertain because of the COVID-19. (Million yen) FY3/19 (Actual) FY3/20 (Actual) FY3/21 (Forecast) VS. previous year Net sales 79,908 78,143 67,300 86.1% Gross profit 48,516 47,188 37,870 80.3% (Per sales) (60.7
Slide 18: FY3/2021 – Reasons for Change in Operating Profit (Forecast)
FY3/2021 – Reasons for Change in Operating Profit (Forecast) Net sales Cost of sales SG&A expenses Decrease in vehicles consigned ▲10.24bn Decrease in cost of goods sold 1.34bn Decrease in goodwill amortization 0.24bn Used vehicle sales/purchases ▲1.27bn Decrease in outsourcing expense 0.42bn Decrea
Slide 19: FY3/2021 – Forecast by Business Segment
FY3/2021 – Forecast by Business Segment (Million yen) FY3/19 FY3/20 FY3/21 VS. previous (Actual) (Actual) (Forecast) year Net sales Auto auction 64,684 63,350 54,020 85.3% Used vehicle purchasing and selling 9,701 9,099 7,821 86.0% Other 5,522 5,692 5,457 95.9% Total 79,908 78,143 67,300 86.1% Opera
Slide 20: Market Overview, Strategy for Creating Value Over the Medium Term
Market Overview Strategy for Creating Value Over the Medium Term 20
Slide 21: 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 22: 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 23: Earnings Distributions – Dividend Policy
Earnings Distributions – Dividend Policy ◼Increased the consolidated payout ratio (50% to 55%) from FY3/2020 ◼Plan to pay 55.5 yen dividend per share for FY3/21 (up 0.1 yen) ◼ 21 consecutive years of dividend growth since listing DPS Consolidated payout ratio (Yen) 60 80% 55.4 55.5 50.4 75.3% 50 47.
Slide 24: 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 25: 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% 10.0% 5% FY3/00 FY3/01 FY3/02 FY3/03 FY3/04 FY3/05 FY3/0
Slide 26: 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 27: 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 28: 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 29: Reference
Reference 29
Slide 30: 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 31: 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 32: 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 33: 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 34: 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