Slide 1: Earnings Results Briefing for the Fiscal Year Ending March 31, 2017
Earnings Results Briefing for the Fiscal Year Ending March 31, 2017 May，2017 KOMEHYO Co., Ltd. Securities code: 2780 (Second Section, Tokyo and Nagoya Stock Exchanges) Corporate Planning Department IR strategy group Phone +81-52-249-5366
Slide 2: INDEX
INDEX １．Overview of Financial Results for the Fiscal Year Ending March 31, 2017 P.02 ２．Business status P.09 ３．Plan for the Fiscal Year Ending March 31, 2018 P.29 ４．Medium-term Management Plan P.39 ５．Reference Information (Company Profile, etc.) P.43 Note: This document is an English translation of a
Slide 3: Overview of Income Statement (Consolidated)
Overview of Income Statement Consolidated FY2015 FY2016 FY2017 Change YoY (Millions of yen) (‘14.4-’15.3） (‘15.4-’16.3) (‘16.4-’17.3) Net sales 43,199 45,903 40,134 △5,769 87.4％ Gross profit 13,168 13,061 11,144 △1,916 85.3％ Gross profit margin 30.5％ 28.5％ 27.8％ △0.7pt － SG&A expenses 10,038 10,271
Slide 4: Overview of Income Statement (Non-consolidated)
Overview of Income Statement Non-consolidated FY2015 FY2016 FY2017 Change YoY (Millions of yen) (‘14.4-’15.3） (‘15.4-’16.3) (‘16.4-’17.3) Net sales 38,507 40,554 34,891 △5,662 86.0％ Gross profit 11,363 11,090 9,339 △1,750 84.2％ Gross profit margin 29.5％ 27.3％ 26.8％ △0.5pt － SG&A expenses 8,590 8,664
Slide 5: Operating income increase and decrease factor (Consolidated)
Operating income increase and decrease factor（ Consolidated ） Operating income declined due to a decline in net sales and a 0.7 point drop in gross profit margin (Millions of yen) 3,000 Administrative expenses+170 2,789 Selling expenses △95 2,500 Personal expenses △34 2,000 Gross profit margin drop
Slide 6: Profit Margin Trend
Profit Margin Trend SG&A expenses increased due to declines in net sales and gross profit margin （％） Consolidated （％） Non-consolidated 35 35 30.9 31.4 30.5 30.2 30.5 29.5 30 28.5 27.8 30 27.3 26.8 25 25 25.7 25.3 24.8 24.1 23.9 23.2 20 22.4 20 22.9 22.3 21.4 Gross profit margin Gross profit margin 1
Slide 7: Overview of Balance Sheet
Overview of Balance Sheet Products decreased due to enhanced inventory controls Consolidated (Millions of yen) Non-consolidated (Millions of yen) Liabilities and Net Liabilities and Net Assets Assets Assets Assets 25,415 25,415 24,659 24,659 22,694 22,694 Cash and 22,114 22,114 2,926 Current 4,316 C
Slide 8: Statement of Cash Flows
Statement of Cash Flows Cash flow from investing activities resulted in a large net outflow due to the opening of a large store (Millions of yen) Consolidated Non-consolidated (Millions of yen) FY2015 FY2016 FY2017 FY2015 FY2016 FY2017 4,257 4,500 4,500 3,886 3,322 3,500 3,500 2,854 2,855 2,704 2,69
Slide 9: By Segment
By Segment Tire and Wheel segment increased income and fall in profits (百万円) FY2015 FY2016 FY2017 Change YoY Net sales 38,874 41,175 35,396 △5,778 86.0％ Fashion Brand Operating income 2,979 2,611 692 △1,919 26.5％ Operating margin 7.7％ 6.3％ 2.0％ △4.3pt － Net sales 4,232 4,640 4,645 +5 100.1％ Tire and
Slide 10: Index: Business status
１．Overview of Financial Results for the Fiscal Year Ending March 31, 2017 P.02 ２．Business status P.09 ３．Plan for the Fiscal Year Ending March 31, 2018 P.29 ４．Medium-term Management Plan P.39 ５．Reference Information (Company Profile, etc.) P.43 9
Slide 11: External Environment(1) Domestic Economy and Nikkei Stock Average
External Environment(1) Domestic Economy, and Business Sentiment： The Nikkei Stock Average Consumption was weak due to major changes in the economic environment Net sales Stock Price Department store net sales(nationwide) KOMEHYO net sales(non-consolidated) YoY (%) (yen) 130 Nikkei Stock Average(mon
Slide 12: External Environment(2) U.S. dollar exchange
External Environment(2) Domestic Economy, and Business Sentiment： U.S. dollar exchange Exchange Net sales Department store net sales(nationwide) KOMEHYO net sales(non-consolidated) （yen） YoY (%) U.S. dollar exchange 130 140 135 120 130 Weak yen 110 125 120 100 100 115 90 110 80 105 Yen’s appreciatio
Slide 13: External Environment(3) Reuse market size
External Environment(3) Reuse market size Online sales increased sharply, while store sales declined Reuse market size of the wide sense2,059 billion yen Reuse market size 1.6 trillion yen Supplier business・Export Store-based sales Online sales Ｃ to Ｃ 4,039 （YoY114.8％） Ｂ to Ｂ Ｂ to Ｃ 4,079 9,460 （YoY
Slide 14: External Environment(4) Reuse market growth rate
External Environment(4) Reuse market growth rate The market growth rate, which was on the rise, has been declining in recent years Reuse market size(100 millions of yen)&Reuse market growth rate 18,000 12% 16,000 10.0% 9.7% 10% 14,000 8.0% 12,000 8% 7.0% 10,000 6% 8,000 15,966 16,517 14,916 13,594 3
Slide 15: External Environment(5) Reuse market according to the product
External Environment(5) Reuse market according to the product The size of the clothing market expanded due primarily to free market apps Market ratio(%) Domestic retailreuse market size(FY2015) (100 million yen) 18 16 ’15 Brand-name products 2,397 ’14 Brand-name products 14 12 ’15 Clothing/accessori
Slide 16: External Environment(5) Ranking in the Secondhand industry
External Environment(5) Ranking in the Secondhand industry Secondhand sales amount :No.3､ Brand-name products sales amount:No.1､Clothing/accessories sales amount:No.7 Secondhand sales amount(FY2015) Brand-name products sales amount(FY2015) G B KOMEHYO B S Others 11.1% KOMEHYO D 2.2％ B Market size Ot
Slide 17: Revision of corporate strategies: Increasing profitability
Revision of corporate strategies ： Increasing profitability Revision of strategies in line with changes in the external environment Extended Increasing growth profitability 16
Slide 18: Store strategy
Store strategy Concentration of functions into new and existing stores ‘17.1～7 Withdrawal ’17.2~5 Opening of New Stores (Large-scale) Medium-sized store KOMEHYO KOMEHYO Shinjyuku ：shibuya-koendori store Umeda store store ANNEX February16,2017 May19,2017 Small-sized store ：sakae central park store Na
Slide 19: Increasing profitability(1) Change of the Gross profit margin
Increasing profitability(1) Change of the Gross profit margin Gross profit margin (4Q)： Achieved a significant year-on-year improvement Consolidated Non-consolidated （％） （％） 16.3 Gross profit margin 16.3 Gross profit margin 17.3 Gross profit margin 17.3 Gross profit margin 32 32 30.7 29.7 30 30 28.6
Slide 20: Increasing profitability(2) Products compression
Increasing profitability(2) Products compression Products: reduced drastically, mainly potentially problematic inventory such as slow-moving inventory Consolidated Non-consolidated (Millions of yen) 16.3 products 17.3 products (Millions of yen) 16.3 products 17.3 products 12,500 12,374 12,374 12,383
Slide 21: Increasing profitability(3) Change of SG&A expenses
Increasing profitability(3) Change of SG&A expenses 2H：Reduced the overall SG&A expenses including advertising expenses and personnel expenses Consolidated Non-consolidated (Millions of yen) (Millions of yen) 16.3 SG&A expenses （％） 17.3 SG&A expenses 16.3 SG&A expenses 17.3 SG&A expenses（％） 2,728 10
Slide 22: Initiative(1) Purchase from Individual Customers
Initiative(1) Purchase from Individual Customers Strengthened purchases through LINE De Satei and “Purchase Promotion Campaign” Amount of purchase from FY2015 FY2016 FY2017 Change YoY individual (‘14.4-’15.3) (‘15.4-’16.3) (‘16.4-’17.3) customers Purchasing Center 16,596 17,537 15,927 △1,609 90.8％ H
Slide 23: Initiative(2) Online Sales
Initiative(2) Online Sales Leveraging omni channel retailing, leading customers from online stores to physical stores and vice versa FY2017 Net sales Net sales No. of products (Millions of yen) YoY sold YoY All online stores 6,147 97.4％ 103.3％ 【Percentage of online sales by channel】 【Roles of smartp
Slide 24: Initiative(3) Member's Card
Initiative(3) Member’s Card Integrated management of customer information, covering physical and online stores Card members(FY2017) No. YoY Total members 689,000 114.5% KOMEHYO apps App that can be used as a member card of KOMEHYO Co., Ltd. Outstanding points, purchasing history, selling history, KO
Slide 25: Initiative(4) Talent Development
Initiative(4) Talent Development Buyer development through original curriculums by a dedicated division Single-item Multiple-item Total No. of buyers buyers buyers Able to evaluate Able to evaluate 2 (in operation) 1 item items or more FY ended 180 138 318 March 2017 persons persons Persons ＋4 ＋28 ＋
Slide 26: Initiative(3) Talented person fixation degree
Initiative(3) Talented person fixation degree Staff turnover remained low,improving the stability of the work force Turnover The No. of rate（％） employees 30 The No. of employees（Brand-Fashion) Turnover rate 500 25 400 20 300 15 8.8 200 10 6.8 5.8 5.2 5.0 4.5 3.6 3.2 3.9 100 5 0 0 09.3 10.3 11.3 12.3
Slide 27: Subsidiary(1) KOMEHYO Auction
Subsidiary(1)KOMEHYO Auction Sales to secondhand dealers in Japan Trade No. of Frequency volume YoY member companies (FY2017) Jewelry, JPY Monthly Watches, 3 days 15,200 84.6％ Bags million 740 JPY Monthly Clothing 1 day 310 93.4% million State of the auction 26
Slide 28: Subsidiary(2) KOMEHYO HONG KONG
Subsidiary(2)KOMEHYO HONG KONG Sales to secondhand dealers abroad FY2016 Net sales KOMEHYO approx. HONG KONG JPY 900 million LIMITED ＮＪＫＰ auctions ・ Onsite staff for overseas contacts ・Participation in NJKP auctions ・ Jewelry show ・ Expansion of B2B business Jewelry show 27
Slide 29: Subsidiary(3) Tire and Wheel
Subsidiary(3) Tire and Wheel Sale of tires, wheels, and vehicle parts Net sales FY2017 (Millions of Composition YoY yen) Tires/wheels 3,954 85.1％ 97.3％ Parts (incl. labor 691 14.9％ 120.4％ charge) 【Original wheel 】 Segment total 4,645 100.0％ 100.1％ ↑AXEL VERSU ↓AXEL GRELL 【Original wheel wearing exam
Slide 30: Index: Plan for the Fiscal Year Ending March 31, 2018
１．Overview of Financial Results for the Fiscal Year Ending March 31, 2017 P.02 ２．Business status P.09 ３．Plan for the Fiscal Year Ending March 31, 2018 P.29 ４．Medium-term Management Plan P.39 ５．Reference Information (Company Profile, etc.) P.43 29
Slide 31: FY2018 plan: 70th anniversary
FY2018 plan KOMEHYO Co., Ltd. will celebrate its 70th anniversary in FY2018 【 70th Anniversary Bear】 Produced in commemoration of the 70th anniversary with the aim of continuing to be a company that is trusted by customers Will appear in various media and at sales floors as a guide during the annive
Slide 32: FY2018 plan
FY2018 plan Increased profit and revenue are forecasted on both consolidated and non-consolidated bases Consolidated FY2018 YoY FY2018 plan YoY (Millions of yen) 1H plan Net sales 19,400 102.3% 42,800 106.6% Operating income 80 － 1,230 147.8% Ordinary income 80 － 1,230 150.8% Net income attributable
Slide 33: Growth Scenario
Growth Scenario Take the challenge into C2C channels and other areas, while solidifying core businesses Reuse market size of the wide sense2,059 billion yen Reuse market size 1.6 trillion yen Supplier business・Export Store-based sales Online sales Ｃ to Ｃ Ｂ to Ｂ Ｂ to Ｃ ・Challenge to CtoC chanel The a
Slide 34: Issues in Core Businesses
Issues in Core Businesses ① Successful opening of large stores ・Enhancement of customer management －Acquisition of new customers －Expansion of existing customers ・Introduction of new products ・Enhancement of online backorders ② Increasing profitability ・Improvement of gross margin ・Enhancement of in
Slide 35: New store(1) KOMEHYO Umeda store
New store(1)KOMEHYO Umeda store 34
Slide 36: New store(2) KOMEHYO Shinjyuku store ANNEX
New store(2) KOMEHYO Shinjyuku store ANNEX 35
Slide 37: New store(3) KOMEHYO Meieki store
New store(3)KOMEHYO Meieki store 36
Slide 38: Renewal store UM Inazawa store
Renewal store UM Inazawa store 17.4 Establishment of Purchasing Center —Enhancement of purchases from individual customers 37
Slide 39: Shareholder return
Shareholder return Dividend changes Dividend(yen) Payout ratio(％) 40 Fiscal year-end dividend Interim dividend Payout ratio 100 92.4 Forecast 35 90 30 80 30 70 25 60 20 50 15 36.2 40 43.8 29.3 10 23.0 30 19.4 5 16.0 16.6 15.5 15.0 13.2 24.8 20 0 10 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY
Slide 40: Index: Medium-term Management Plan
１．Overview of Financial Results for the Fiscal Year Ending March 31, 2017 P.02 ２．Business status P.09 ３．Plan for the Fiscal Year Ending March 31, 2018 P.29 ４．Medium-term Management Plan P.39 ５．Reference Information (Company Profile, etc.) P.43 39
Slide 41: Medium-term Basic Targets (Consolidated)
Medium-term Basic Targets (Consolidated) Solid recovery of business performance by increasing profitability Consolidated FY2018 FY2019 FY2020 (‘17.4-’18.3) (‘18.4-’19.3) (‘19.4-’20.3) Net sales JPY42.8B JPY43.9B JPY45.1B Operating income JPY1.23B JPY1.58B JPY1.91B Operating margin 2.9％ 3.6％ 4.2％ Sto
Slide 42: Net Sales Plan
Net Sales Plan Generate JPY45 billion and JPY39 billion on a consolidated and non- consolidated basis respectively in the fiscal year ending March 31, 2020 Consolidated Non-Consolidated Net sales (Millions of yen) Purchases by individual costomers 45,903 45,100 43,900 Net sales (Millions of yen) 42,
Slide 43: Profit Plan
Profit Plan Achieve sustainable profit growth by increasing net sales 2,789 2,742 (Millions of yen) Operating income Ordinary income Net income attributable to owners of parent Consolidated 1,910 1,890 1,696 1,580 1,560 1,230 1,230 1,170 970 831 820 750 347 FY2016 results FY2017 results FY2018 plan
Slide 44: Index: Reference Information
１．Overview of Financial Results for the Fiscal Year Ending March 31, 2017 P.02 ２．Business status P.09 ３．Plan for the Fiscal Year Ending March 31, 2018 P.29 ４．Medium-term Management Plan P.39 ５．Reference Information (Company Profile, etc.) P.43 43
Slide 45: Company Profile
Company Profile Company name KOMEHYO Co., Ltd. Established May 1979 Head Office 3-25-31 Osu, Naka-ku, Nagoya Representative President, Representative Director: Takuji Ishihara Capital 1,803 million yen No. of employees Consolidated: 614, Non-consolidated:509(As of March 2017) Buying and selling used
Slide 46: Corporate History
Corporate History ●Opened KOMEHYO Shibuya Koendori Store, Abeno Store ●Opened USED MARKET Osu Store ●Joined Keidanren ●Established Auto Parts KOMEHYO KK (currently AUTO PARTS JAPAN) ●Established KOMEHYO HONG KONG LIMITED ●Acquired CRAFT Co., Ltd. 2017 ●Established Product Center ●Established KOMEHYO
Slide 47: KOMEHYO Business Model
KOMEHYO Business Model Main functions of Product Center ① Thorough confirmation of product authenticity/quality ② Market price management ③ Maintenance ④ Product development speed/cost management ⑤ Stable/appropriate supply of products to stores Quality, market Purchase/procurement Sale price, distr
Slide 48: Business results for the past decade
Business results for the past decade Consolidated Consolidated net sales KOMEHYO,etc. operating Consolidated net sales Opened 5 KOMEHYO stores,2 Craft stores income (100 (100 millions Opened of yen) Consolidated operating income Auto Parts KOMEHYO(currently AUTO PARTS JAPAN) 9 stores millions of yen
Slide 49: Group Status
Group Status 【Sales composition (cumulative FY2017 results)】 Brand Fashion segment Tire and Wheel segment Buying and selling products including jewelry, Buying and selling tires and wheels as well as precious metals, watches, bags, and clothing provision of services Group net sales KOMEHYO (nonｰ con
Slide 50: Store Type (1)
Store Type (1) Stores focusing on sale and purchase of jewelry, precious metals, watches, and bags 27 Stores (as of March 2017) Large-scale Mid-scale Small-scale Purchasing Center Nagoya Store、 Opening stores in large Opening stores in major Opening stores in major Shinjuku Store、 major cities citie
Slide 51: Store Type (2)
Store Type (2) Stores focusing on sales and purchase of ladies casual clothing ※ 5 Stores (as of March 2017) Main products (sales/purchase): Ladies casual clothing, bags, accessories Operating 5 stores in Aichi （※Some stores only as for the sale） 50
Slide 52: Store Type (3)
Store Type (3) Stores focusing on sales and purchase of clothing in the low price range※ 3 stores (as of March 2017) Main products (sale/purchase): Clothing, bags, accessories Red tags are attached to products and prices are lowered every two weeks （※Some stores only as for the sale） 51