Komehyo Holdings Co., Ltd. · TSE:2780
Komehyo — FY2024 Earnings Presentation
82 slides from Komehyo's earnings presentation, May 2024
Slide 1: Earnings Results Briefing for the Fiscal Year Ended March 31, 2024
Earnings Results Briefing for the Fiscal Year Ended March 31, 2024 May 2024 (Delay) Komehyo Holdings Co., Ltd. Securities code: 2780 (Tokyo and Nagoya Stock Exchanges) IR・PR Department TEL:+81-52-249-5366 ©Komehyo Holdings Co .,Ltd. 1
Slide 2: Contents
Contents P.3 1. Company introduction P.10 2. Earnings Results for the Fiscal Year Ended March 31, 2024 P.21 3. Segment overview for the fiscal year ending March 2024 P.32 4. Medium-term management plan “Beyond the 80th year milestone” P.59 5. Initiatives for the fiscal year ending March 2025 P.69 6.
Slide 3: 1. Company introduction
1. Company introduction ©Komehyo Holdings Co .,Ltd. 3
Slide 4: Vision Mission Value
From reuse to relay use We will inherit that "value". Vision Mission Value We develop a concept of We respect people for making We listen and empathize with environmentally and products, thank people for what others say. socially conscious providing products for use We value the importance of recycl
Slide 5: Business list
Business list We operate three businesses: Brand Fashion, Tire and Wheel, and real estate leasing. We support "Relay Use," the handing down of goods from person to person and their effective utilization, both in Japan and other countries. Consolidated sales for the fiscal year ending March 2024 119,
Slide 6: Company Highlights (Consolidated)
Company Highlights (Consolidated) A leading player in the reuse industry, which operates KOMEHYO, BRAND OFF, and other brands in Japan and other countries Founding Net sales *1 Individual purchase amount * 1 1947 年 119,459 millions of yen （ Growth achieved in three consecutive terms ） 61,205 million
Slide 7: Business Domains of Komehyo Holdings Group
Business Domains of Komehyo Holdings Group Brand Fashion Business (General): Aim to be No. 1 in sales volume. Primary Secondary distribution distribution Purchase Product evaluation/commercialization sale General customers Real store Real store General customers Home delivery purchase Product center
Slide 8: Business Domains of Komehyo Holdings Group
Business Domains of Komehyo Holdings Group Brand Fashion Business (Specialized): Aim to be one-of-a-kind with core fans. Primary Secondary distribution distribution sale Purchase Product evaluation/commercialization sale Real store Product Real Store General General Home delivery purchase customer c
Slide 9: Business Domains: Tire and Wheel Business
Business Domains of Komehyo Holdings Group Tire and Wheel Business Primary Secondary distribution distribution production sale Purchase sale General customers Planning and development General customers commercialization Product production Reuse business Domestic mass retailer Maker Overseas ©Komehyo
Slide 10: 2. Earnings Results for the Fiscal Year Ended March 31, 2024
2. Earnings Resultsfor the Fiscal Year Ended March 31, 2024 ©Komehyo Holdings Co .,Ltd. 10
Slide 11: Summary of Consolidated Earnings Results for the Fiscal Year Ended March 31, 2024
Summary of Consolidated Earnings Results for the Fiscal Year Ended March 31, 2024 Retail sales including sales to inbound tourists remained strong, capitalizing on ample inventory from strong purchases from individuals. Strengthening of corporate sales aimed for inventory control, which was made in
Slide 12: FY 2024 Performance
FY 2024 Performance In the full year, both net sales and profits were at record highs. Sales and profit increased for three consecutive fiscal years. (Millions of yen) FY2022 FY2023 FY2024 Changes YoY Plan ratio* Net sales 71,148 86,113 119,459 33,346 138.7% 112.7% Gross profit 18,415 22,542 29,590
Slide 13: Analysis of consolidated operating income
Analysis of consolidated operating income Purchasing remained strong, and sales increased significantly in both retail and corporate sales. Due to sales growth, profit increased by absorbing the decline in gross profit margin and increase in SG&A expenses. Net Sales • Purchasing is going well （Milli
Slide 14: Trends in Consolidated Net Sales and Gross Profit Margin
Trends in Consolidated Net Sales and Gross Profit Margin Sales increased significantly for both retail and corporate customers due to strong individual purchases. Market prices for watches and bags will decline in the third quarter of 2023, and gross profit margins will decline for both retail and c
Slide 15: Breakdown of consolidated Net sales
Breakdown of consolidated Net sales (Retail / Overseas/Domestic tax-free sales) 【Retail】Strengthening of retailing has increased the retail ratio, maintaining an ideal composition ratio (Retail: Corporate = 50:50). 【Overseas】Overseas sales are strong due to relocation and store openings in Hong Kong
Slide 16: Purchase from individual customers (Group total)
Purchase from individual customers (Group total) Factors including the continued opening of purchase centers and growth at existing stores produced a solid trend in the numbe r of customers and in the purchase amount per customer, resulting in a record purchase amount for the full year at 140.1% com
Slide 17: Changes in selling, general and administrative expenses
Changes in selling, general and administrative expenses Factors including the continued opening of purchase centers and growth at existing stores produced a solid trend in the numbe r of customers and in the purchase amount per customer, resulting in a record purchase amount for the full year at 140
Slide 18: Balance sheet overview
Balance sheet overview In addition to strong individual purchases, we have strengthened corporate purchasing and secured ample inventory in preparat ion for business expansion and new store openings. Inventory assets, which are the source of increased sales and directly linked to growth, have increa
Slide 19: Inventory Turnover
Inventory Turnover BF Business In order to respond to the decline in market prices for watches and other items starting in November 2023, we have prioritized risky inventory with low profit margins for corporate sales. As a result, although the gross profit margin decreased, risk inventor y could be
Slide 20: Consolidated cash flow
Consolidated cash flow Cash was used in operating activities, mainly reflecting an increase in inventories in preparation for business scale expansi on and new store openings, as well as an increase in income taxes. There were significant cash inflows from financing activities due in part to strong
Slide 21: 3. Segment overview for the fiscal year ending March 2024
3. Summary of Consolidated Earnings Results for the Fiscal Year Ended March 31, 2024 ©Komehyo Holdings Co .,Ltd. 21
Slide 22: Summary of financial results by segment for the fiscal year ending March 2024
Summary of financial results by segment for the fiscal year ending March 2024 Brand fashion business（BF） Tire and wheel business（TW） Individual purchase Net sales Operating income Net sales Operating income amount 61,076 114,339 6,891 5,073 267 Millions of yen Millions of yen Millions of yen Million
Slide 23: Overview by segment
Overview by segment Achieved increases in sales and profits in each business FY2024 ‘24.3-1Q YoY ’24.3-2Q YoY ’24.3-3Q YoY ’24.3-4Q YoY YoY （Millions of yen） * Net sales 24,075 135.3% 26,724 136.9% 29,314 136.1% 34,224 152.9% 114,339 140.8% Fashion Brand Operating 1,683 230.5% 1,442 143.8% 1,545 94.
Slide 24: Stores: 234 stores in total for the Group
Stores | 234 stores in total for the Group (as of March 2024) KOMEHYO opened 101 new purchase centers in the three years (41 stores in the fiscal year under review) and achieved the goal of opening 100 stores in three years. BRAND OFF opened 14 franchised purchase centers and 5 overseas stores*2 in
Slide 25: Brand and fashion business overview
Brand and fashion business overview In the fourth quarter, both purchases and sales remained strong, unchanged from the third quarter. Gross profit margin is neg ative compared to the same period last year Initial Plan 3Q 4Q ・Personal purchase: YoY comparison: 141.7% ・Purchase (individual ・Individua
Slide 26: Purchasing and sales status by route
| Purchasing and sales status by route *1 BF business Domestic retail gold prices remain high in terms of the composition of products purchased by individuals. As a result, jewelr y and precious metals account for about 40%. We actively engaged in corporate purchasing in preparation for store openin
Slide 27: E-commerce-induced sales rate
| E-commerce-induced sales rate BF business Due to the increase in the number of customers, EC -related sales*1 reached a record high of 129% compared to the previous period. The EC involvement rate*2 remains at just under 40% due to an increase in the sales ratio of foreign visitors to Japan at ret
Slide 28: Improving Profitability starting with Franchised Purchase Centers
sale Improving Profitability starting BF business with Franchised Purchase Centers Increase purchase volume by opening more franchised purchase centers and strengthen the flow of items to be sold on the compa ny- operated Japan Brand Auction (JBA). Increase JBA's GMV (trading volume) and improve pro
Slide 29: Status of retail sector
| Status of retail sector BF business Strong performance has continued at the existing BRAND OFF Ginza Main Store flagship and at overseas stores in Hong Kong and Taiwan.We have continued to enhance points of contact with new customers by renovating retail stores, opening new stores and making activ
Slide 30: Corporate auction GMV growth
| Corporate auction GMV（volume）growth BF business Due to an increase in the number of member companies, JBA's real auction at Kanazawa venue was particularly successful. Total GMV of the two companies (KOMEHYO Auction and JBA) for the full year was 123.6% compared to the previous quarter, a record h
Slide 31: Overview of tire and wheel business
| Overview of tire and wheel business TW business Due to the warm winter, sales of high-margin winter tires have been difficult. However, new and used online sales, as well as sales of in-house designed wheels both in Japan and overseas, remained strong. Sales increased by achieving sales of 5 billi
Slide 32: 4. Medium-term management plan "Beyond the 80th year milestone"
3. Medium-term management plan “Beyond the 80th year milestone” ©Komehyo Holdings Co .,Ltd. 32
Slide 33: Position of the Medium-term Management Plan
Position of the Medium-term Management Plan We aim to achieve sales of 250 billion yen by the 80th anniversary of the company's founding, which is the final year of the Medium-term Management Plan, with a view to becoming the world's No. 1 the world'sNo. 1 company company in sales of brand goods for
Slide 34: Quantitative Targets (FY2025 to FY2028)
Quantitative Targets (FY2025 to FY2028) During the period for the current Medium-term Management Plan, we will achieve business growth *that exceeds market growth through aggressive investment, aiming to achieve net sales of 250 billion yen and operating profit of 15 billion yen in the f iscal year
Slide 35: Operating the Plan Based on Competitive Advantages
Operating the Medium-term Management Plan Based on Competitive Advantages Since its founding, the Group has been consistently engaged in reuse and has established competitive advantages based on its human resources, channels, and market share. The Medium -term Management Plan will be based on the bu
Slide 36: Outlook of the Reuse Market
Outlook of the Reuse Market The reuse market is on an expansion trend in both Japan and other countries. The growth is expected to continue, coupled with growing interest in sustainable/recycling -oriented society. ▍Domestic reuse market size *1 ▍Overseas reuse market size *3 China 95 America （億円） 4
Slide 37: Expansion of the Target Market
Expansion of the Target Market We have already built a foundation in Japan by facing multiple markets, including the market of purchases from individuals, auction market, and retail and wholesale market. If the CtoC market is also considered, business opportunities exist in a vas t market 66.6 trill
Slide 38: Concept for business growth
Concept for business growth Based on market trends and competitive advantages, we will set key investment items, supporting management platforms, and tactical options. For the mainstay Brand Fashion business, we aim to expand sales and GMV globally by defining three businesses: (1) trading business,
Slide 39: Approach by Target Group
Approach to Business Growth Approach by Target Group Our expertise in the reuse market enable a detailed approach to each target group. Promoting interactions with the group, Groups to approach continuously which involve both sales and purchases of goods Purchase Sales Existing customers Users who b
Slide 40: Basic Policies for the Medium-term Management Plan
Basic Policies for the Medium-term Management Plan "Beyond the 80th year milestone" Strive to achieve business growth and higher social value under a policy based on the business environment and competitive advantages. 1 Achieving business growth A d van ci ng m a na g e ment 3 w i t h a n a w a r e
Slide 41: Achieving business growth: Trading business (Japan)
Basic Policy 1⃣ Achieving business growth BF business: (1) Trading business (Japan) Maintain No. 1 market share in the growing brand reuse market. Strengthen investments in store openings, e- commerce, and other areas to improve competitiveness and achieve sustainable growth. ▍Main initiatives ▍KPI
Slide 42: Achieving business growth: Trading business (Global)
Basic Policy 1⃣ Achieving business growth BF business: (1) Trading business (Global) Open stores in regions with large growth potential and build new channels. ▍Main initiatives ▍KPI • Opening new stores in a wider area (North America, ASEAN, • Overseas sales: 15% and East Asia) • Number of new stor
Slide 43: Businesses that contribute to distribution
BF business Basic Policy 1⃣ Achieving business growth (2) Businesses that contribute to distribution Increase GMV (trading volume) through activation of auctions and in -store purchases. Strengthen intra-group cooperation and franchise (FC) network. ▍Main initiatives ▍KPI • Expand the number of over
Slide 44: Businesses that contribute to market growth
BF business Basic Policy 1⃣ Achieving business growth (3) Businesses that contribute to market growth Achieve business growth beyond conventional frameworks by providing inspection services to the domain of CtoC reuse of brand goods and building a reuse platform that leverages data and technologies.
Slide 45: Strengthen market responsiveness
BF business Basic Policy 1⃣ Achieving business growth Strengthen market responsiveness Based on our extensive track record of transactions at in -house auctions, etc., we identify changes in market prices at an early stage and take appropriate countermeasures in a timely manner. We ensure profit acc
Slide 46: M&A Strategy
Basic Policy 1⃣ Achieving business growth BF business M&A Strategy Consider M&A in overseas markets with excellent growth potential and areas that will lead to higher customer value, aiming to strengthen the business portfolio in addition to achieving organic growth. ▍Approach to alliances Expand th
Slide 47: TW Business Growth leveraging group strength
Basic Policy 1⃣ Achieving business growth TW Business Growth leveraging group strength Demonstrate presence and competitiveness by involving three Group companies in main processes of the supply chain, each achieving growth. Achieve stable increases in sales and profit. Primary distribution Secondar
Slide 48: TW business Area strategy
Basic Policy 1⃣ Achieving business growth TW business Area strategy Demonstrate presence and competitiveness by involving three Group companies in main processes of the supply chain, each achieving growth. Achieve stable increases in sales and profit. ▍Main initiatives ▍KPI Domestic • Stepping up st
Slide 49: Deepening sustainable management
Basic Policy ２⃣ Deepening sustainable management Set the Basic Sustainability Policy to accelerate the expansion of our reuse businesses and the penetration of relay use, bas ed on the understanding that our businesses themselves represent sustainability. Help to build a truly affluent society by el
Slide 50: Contribution to SDGs
Basic Policy ２⃣ Deepening sustainable management Contribution to SDGs Contribute to the realization of a truly affluent society based on a circular economy by building a relay -use value chain. Aim to achieve "Responsible Consumption and Production," which is one of the SDGs, with our businesses the
Slide 51: Materiality
Basic Policy ２⃣ Deepening sustainable management Materiality Set priority social issues that the Group should address as material issues, from the perspective of ESG. Expand businesses and increase the number of people who are sympathetic to relay use by advancing related measures, thus helping real
Slide 52: Basic approach to human resource management
Improving individual performance through human Basic Policy ２⃣ Deepening sustainable management resource development and organizational development At the Company, where human resources are the growth driver, both human resource development and organizational development, which support our businesse
Slide 53: Contribution to a carbon-neutral society
Basic Policy ２⃣ Deepening sustainable management Contribution to a carbon -neutral society Set and visualize quantitative targets for GHG emissions/reduced contributions. In addition, we will deepen our contribution to a carbon-neutral society by expanding our reuse business. ▍Quantitative target Ch
Slide 54: Strengthening Group Governance
Basic Policy ２⃣ Deepening sustainable management Strengthening Group Governance Promote the creation of a strong governance structure that is in line with the Group's sustainable growth, including business expansion and global development, as well as changes in the business environment. ▍Policy ▍Pri
Slide 55: Advancing management with an awareness of capital cost
Basic Policy 3⃣ Advancing management with an awareness of capital cost Analysi s and evaluat ion of cur r ent sit uat ion Fresh inventory is essential for building up profits in the reuse business. In the most recent period, purchases from individ uals remained strong due in part to the store openin
Slide 56: Capital cost policy/plan
Basic Policy 3⃣ Advancing management with an awareness of capital cost Policy/Plan We will continue to strive to maintain ROE, etc. that exceeds the cost of capital. Furthermore, by implementing growth investments and stable shareholder returns while ensuring financial soundness, we will maintain a
Slide 57: Initiatives to Improve ROE
Basic Policy 3⃣ Advancing management with an awareness of capital cost Initiatives Make exhaustive efforts to increase margins, improve capital efficiency, and use financial leverage in order to achieve an RO E of 18% or higher, based on the premise that business growth exceeding market growth will
Slide 58: Shareholder return
Basic Policy 3⃣ Advancing management with an awareness of capital cost shareholder return Enhance shareholder returns to maintain an appropriate capital adequacy ratio and enhance corporate value. Continue to focus efforts on ensuring stable dividends and increasing dividends based on higher sales a
Slide 59: 5. Initiatives for the fiscal year ending March 2025
5. Initiatives for the fiscal year ending March 2025 ©Komehyo Holdings Co .,Ltd. 59
Slide 60: Consolidated and business segment plans for FY ending March 2025
Consolidated and business segment plans for the fiscal year ending March 2025 Plans for increased sales and profits in both the BF business and the TW business Consolidated earnings forecast for the FY 2025 Earnings forecast by segment for the FY 2025 （million of yen) FY2024 FY2025 Change （million o
Slide 61: Forecast of Consolidated Earnings Results by Quarter
Forecast of Consolidated Earnings Results by Quarter Market conditions are expected to remain flat in the first quarter of this fiscal year, and personnel expenses are expected t o increase. As a result, although sales are expected to remain at the same level as last year or slightly increase, profi
Slide 62: Analysis of consolidated operating income (forecast)
Analysis of consolidated operating income (forecast) Sales are expected to increase 116.5% compared to the previous fiscal year due to increased purchasing. The company aims to improve gross profit margin by 1 to 1.5 points for the full year. SG&A expenses increased by 30% due to active investment i
Slide 63: Matters that will affect this fiscal year's performance
Rearrangement of given matters that will affect this fiscal year's performance The brand reuse market is in an expansion phase both domestically and internationally. A business environment that allows business growth by leveraging competitive advantages, provided that store opening properties and hu
Slide 64: Market price forecast for main products
Market price forecast for main products for the fiscal year ending March 2025 The market trends for each product, which are the premise of this fiscal year's plan, are currently expected to be as follows , and unless there are sudden changes in the external environment such as exchange rates, each p
Slide 65: Initiatives of each brand 1
Initiatives for the fiscal Initiatives of each brand 1⃣ year ending March 2025 Continue to strengthen purchases mainly through new store openings, while bolstering retail through new store openings and e-commerce, in Japan and other countries. Opening a purchase Strengthening existing Strengthen glo
Slide 66: Initiatives of each brand 2
Initiatives for the fiscal Initiatives of each brand ２⃣ year ending March 2025 BRAND OFF will strengthen domestic and overseas e -commerce sales by linking inventory with RECLO and MIKE MUSEUM. Aggressive new store openings will be continued overseas, mainly in Hong Kong and Taiwan. Cooperation with
Slide 67: Initiatives of each brand 3
Initiatives for the fiscal Initiatives of each brand 3⃣ Auction/Brands aiming to be the Only One year ending March 2025 Leverage the strengths of each of the two auctions to expand the number of members and trading volume by capturing a wide range of needs Continue to refine the appeal of the brand
Slide 68: Initiatives of each brand 4: Tire and wheel business
Initiatives for the fiscal Initiatives of each brand 4⃣⃣⃣⃣ Tire and wheel business year ending March 2025 Aim for record sales of 10 billion yen by leveraging the characteristics of the three companies. Product development and expansion Expand sales and strengthen used Product management and online
Slide 69: 6. Appendix
6. Appendix ©Komehyo Holdings Co .,Ltd. 69
Slide 70: Corporate Profile
Corporate Profile Company name Komehyo Holdings Co., Ltd. Established May 1979 ※Transition to holding company system in October 2020 Head Office 3-25-31 Osu, Naka-ku, Nagoya Representative President, Representative Director: Takuji Ishihara Capital 1,803 million yen No. of employees Consolidated: 1,
Slide 71: Human Capital Data
Human Capital Data In the relay use business model, the roles played by people are wide -ranging (knowledge, skills, expertise, speed, connections with customers, etc.), and promoting the development and retention of human resources leads to improvements in business performance and corporate value.
Slide 72: Corporate governance system
Corporate governance system To ensure that management respects the interests of not only shareholders but also employees, customers, business partners, creditors, local communities and others who have a significant impact on or interest in the Komehyo Group, the Komehyo Group is tackling the strengt
Slide 73: Officer system
Officer system We defined key areas where directors are expected to demonstrate their capabilities in a skills matrix, with the aim of continuously improving the audit function that is to fulfilled by the Company's directors. Leveraging their diverse backgroun ds, we strive to achieve medium- to lon
Slide 74: Business/service introduction: KOMEHYO
Business/service introduction || The main brand of Komehyo Holdings, which mainly sells and buys used brand products. Aiming to improve market standards by creating "curiosity" among customers and society toward a seamless purchasing experience between online and offline ▍Store development ▍Customer
Slide 75: Trends in purchase price per customer by product
Trends in purchase price per customer by product| As we strengthened our purchasing activities in response to the market decline, the average purchase price per customer for s ome products fell below the previous year in the fourth quarter, but overall sales remained stable for all products. By hand
Slide 76: Business/service introduction: BRAND OFF
Business/service introduction || Mainly sells, purchases, and quality used branded products. The tax -free ratio of sales is high, and the company has a particular strength in selling bags. Operates the corporate auction “JBA” and contributes to improving profitability ▍Store development ▍Strengthen
Slide 77: Business/service introduction: Auctions
Business/service introduction || Operate corporate auctions “KOMEHYO Auction” and “Japan Brand Auction (JBA)” Increase GMV (volume) and improve profitability through auction fees*1 ▍KOMEHYO Auction Operated by KOMEHYO Auction Co., Ltd. ▍Japan Brand Auction (JBA) Operated by K-Brand Off Co., Ltd. ・Tr
Slide 78: Business/service introduction: WORM, Shellman, SELBY
Business/service introduction | A brand specializing in products. Aim to be one -of-a-kind with core fans. ▍WORM ▍Shellman ▍SELBY ・Consignment and sale of antique watches ・Purchasing and selling jewelry ・Purchasing and selling premium sneakers and jewelry, current watches made by independent watchma
Slide 79: Business/service introduction: Tire and wheel
Business/service introduction| A brand that handles new and used tires, wheels, etc. Integrated supply chain among three group companies ▍Craft ▍U-ICHIBAN/Auto Parts Japan ▍4×4 engineering service ・Purchasing and selling new tires and ・U-ICHIBAN ・ Comprehensive manufacturer of wheels wheels Purchase
Slide 80: Breakdown of domestic duty-free sales
Breakdown of domestic duty-free sales More than half of the customers are from China (including Hong Kong), Taiwan, and Thailand, where KOMEHYO and BRAND OFF have stores. They are younger than the domestic customer base, with the volume zone being customers in their 30s to 40s. Composition ratio by
Slide 81: Changes in gross merchandise value
Changes in gross merchandise value GMV*, which indicates the scale of our business, is an indicator for the promotion of relay use. Growth in GMV leads to business growth and higher profitability. ▍Changes in gross merchandise value ・Consolidated sales increased significantly ・Expansion of auction G
Slide 82: Disclaimer / IR contact
Disclaimer This document is an English translation of a document prepared in Japanese. Statements in this document that are not historical facts; statements concerning current plans, forecasts, strategies, and op inions of KOMEHYO Co., Ltd. are forward-looking statements subject to various risks and