Watami Co., Ltd. · TSE:7522
Watami — H1 FY2009 Earnings Presentation
55 slides from Watami's earnings presentation, November 2009
Slide 1: Results Briefing for 1st Half of Fiscal Year Ending March 2010
Results Briefing for 1st Half of Fiscal Year Ending March 2010 Watami Co., Ltd. 1
Slide 2: Overview of Results for 1st Half of Fiscal Year Ending March 2010
Overview of Results for 1st Half of Fiscal Year Ending March 2010 Toshiharu Kimura, Director, Senior Corporate Officer & CFO 2
Slide 3: Overview of Results for 1st Half of Fiscal Year Ending March 2010
Overview of Results for 1st Half of Fiscal Year Ending March 2010 Results in 1st half Results in 1st half Year on year of fiscal year of fiscal year (vs. 1st half of fiscal year (Billion yen) ending March 2010 ended March 2009 ended March 2009) Sales 56.4 53.1 106% Operating income 2.05 2.51 81% Ord
Slide 4: Overview of Results for 1st Half vs Plan
Overview of Results for 1st Half of Fiscal Year Ending March 2010 Results in 1st Plan for 1st half half of fiscal of fiscal year Comparison ending March year ending 2010 Annual plan (announced in with plan (Billion yen) March 2010 May 2009) Sales 56.4 55.7 101% 120.8 Operating income 2.05 1.9 103% 7
Slide 5: Results by Segment: Restaurant business (Japan)
Overview of Results by Segment in 1st Half of Fiscal Year Ending March 2010 Restaurant business (Japan)*1 (Million yen) Results in Same period a 1st half of fiscal year ago Year on year Plan (announced Comparison - Year-on-year same-restaurant year ending (1st half of year with plan March 2010 ended
Slide 6: Results by Segment: Restaurant business (overseas)
Overview of Results by Segment in 1st Half of Fiscal Year Ending March 2010 Restaurant business (overseas)*1 (Million yen) Results in Same period a 1st half of fiscal year ago Plan Comparison year ending Year on year (announced (year ended March in May 2009) with plan March 2010*2 2009) - Year-on-ye
Slide 7: Results by Segment: Nursing care business
Overview of Results by Segment in 1st Half of Fiscal Year Ending March 2010 Nursing care business*1 (Million yen) Results in Same period a 1st half of fiscal year ago Plan Comparison year ending Year on year (announced (year ended March in May 2009) with plan - Number of facilities (year on March 20
Slide 8: Results by Segment: Home-delivered box lunches for the elderly
Overview of Results by Segment in 1st Half of Fiscal Year Ending March 2010 Home-delivered box lunches for the elderly*1 (Million yen) Results in Comparison 1st half of fiscal year Plan ending March 2010 (announced in May 2009) with plan +193 Sales 4,793 4,600 (104.2%) - Number of facilities: 114 -
Slide 9: Results by Segment: Agriculture business
Overview of Results by Segment in 1st Half of Fiscal Year Ending March 2010 Agriculture business (Million yen) Results in Same period Plan Comparison Factors of year-on-year difference 1st half of fiscal a year ago year ending (year ended March Year on year (announced with plan Sales March 2010 2009
Slide 10: Relations between Financial Statement Segments and Internal Management Segments
Relations between Financial Statement Segments and Internal Management Segments (Million yen) Financial Statement Segments Internal Management Segments Corresponding internal Operating Corresponding companies Sales management income segments Watami Co., Ltd., Wawtami Food Service Co., Ltd., Restaura
Slide 11: Number of Restaurants in 1st Half of FY2009
Number of Restaurants in 1st Half of FY2009 New Number at Number a Restaurant category Closure Conversion Difference restaurant end of H1 year ago Watami, Za Watami, Nagomitei 1 27 1 408 437 -29 Gohan 1 0 0 7 7 0 9 1 26 180 140 40 Japan Watamin-chi (including DFC) T.G.I. Friday' s 0 0 0 10 9 1 Zenno
Slide 12: Free Cash Flow (Consolidated)
Free Cash Flow (Consolidated) Results (1st half) Full-year forecast Investments 2,277 6,000 Capital investments 2,277 6,000 Share acquisition, etc. – – Net income 994 3,000 Depreciation 2,082 3,620 Free cash flow 799 620 Amortization of goodwill 359 730 Guarantee deposits -425 1,500 Free cash flow i
Slide 13: Plan for 2nd Half of FY2009
Plan for 2nd Half of FY2009 Results in Plan for (Previous 1st half of fiscal 2nd half of fiscal Full-year plan (Billion yen) fiscal year) year ending year ending for FY2009 Full-year results March 2010 March 2010 Sales 56.4 65 120.8 111.2 Ordinary income 2.1 4.5 6.7 6.1 Net income 0.9 2.1 3.0 2.5 13
Slide 14: Summary of Results in 1st Half of FY2009 and Policies for Future
Summary of Results in 1st Half of FY2009 and Policies for Future Yutaka Kuwabara President & COO, Watami Co., Ltd. 14
Slide 15: Restaurant (Japan)
Restaurant (Japan) Restaurant (overseas) Nursing care Home-delivered box lunches for the elderly Agriculture Maintenance and environmental 15
Slide 16: Summary of Results in First Half of FY2009: Same-Restaurant Sales
Summary of Results in First Half of FY2009: Same-Restaurant Sales With economic weakness, same-restaurant sales were down 6.0% year on year. However, this number is 0.3 to 3.4 percentage points above major listed competitors. Same-restaurant sales Changes in year-on-year changes in the in 1st half o
Slide 17: Summary of Results in 1st Half of FY2009: Topics
Summary of Results in 1st Half of FY2009: Topics Major policies in FY2009 Progress in 1st half 1. - Opening of and conversion to advanced Watami restaurants: 1.Change Change the the nature nature of of Watami’s Watami’s - One new restaurant (Shibuya Dogenzaka) and one converted operation operation r
Slide 18: Major Policies in 2nd Half of FY2009
Major Policies in 2nd Half of FY2009 Increasing sales 10% from the plan in the December selling season Cash back (in the form of meal vouchers) campaign for early reservations for year-end dinner parties - Limiting the use of vouchers to 1,000 yen per person Improving the discount rate significantly
Slide 19: Major Policies in 2nd Half of FY2009
Major Policies in 2nd Half of FY2009 Increasing sales 10% from the plan in the December selling season Cash back (in the form of meal vouchers) campaign for early reservations for year-end dinner parties - Limiting the use of vouchers to 1,000 yen per person Improving the discount rate significantly
Slide 20: Changes in Customer Satisfaction and Complaint Rate
Changes in Customer Satisfaction and Complaint Rate Customer Satisfaction Complaint Rate 90.0% 10.0% 8.2 7.9 8.0% 80.0% Target for the current 77.7 77.7 6.9 77.7 fiscal year = 75% 7.0 74.9 74.2 6.0% 71.2 73.5 Target for the current 68.9 fiscal year = 5% 70.0% 69.9 5.0 4.9 4.0% 65.4 3.7 4.0 3.8 3.7 6
Slide 21: T.G.I. FRiDAY'S Kyoto Kiyacho Sanjo Restaurant
T.G.I. FRiDAY’S Kyoto Kiyacho Sanjo Restaurant Small investment amount-type T.G.I. FRiDAY’S Scheduled to open on December 10 Features of the new restaurant Figures in parentheses show a comparison with the conventional new restaurant model. Monthly sales: 15 million yen Total investment amount per t
Slide 22: Major Policies in 2nd Half of FY2009: Developing a New Business Category
Major Policies in 2nd Half of FY2009 Increasing sales 10% from the plan in the December selling season Cash back (in the form of meal vouchers) campaign for early reservations for year-end dinner parties - Limiting the use of vouchers to 1,000 yen per person Improving the discount rate significantly
Slide 23: Purpose of Development of New Category
Purpose of Development of New Category Position of business categories Position of business categories (average customer spend and purpose) (locations) (Yen) In front of Suburban, 3,000 Sumishun Large a station roadside Casual dining T.G.I. Average customer spend (dinner) (meals + drinks) FRiDAY’S 2
Slide 24: Kyo-no-ya: Concept and Logo
Kyo-no-ya: Concept and Logo Concept of the business category “I would like to eat a big meal including a variety of delicious Japanese dishes with my three-generation family.” Logo 24
Slide 25: Kyo-no-ya: Exterior Appearance
Kyo-no-ya: Exterior Appearance 25
Slide 26: Kyo-no-ya: Interior (Modern Japanese)
Kyo-no-ya: Interior (Modern Japanese) 26
Slide 27: Kyo-no-ya: Menu (1) Feast
Kyo-no-ya: Menu (1) Feast 27
Slide 28: Kyo-no-ya: Menu (2) Meat, Seafood, Western Dishes
Kyo-no-ya: Menu (2) Meat, Seafood, Western Dishes 28
Slide 29: Kyo-no-ya: Earnings Structure and Development Plan
Kyo-no-ya: Earnings Structure and Development Plan Earnings structure Monthly sales: 10 million yen Average customer spend: 1,000 yen for lunch, 2,100 yen for dinner FL: Cost rate + Ratio of personnel expenses = 58% Operating income margin: 18% Investments in a new restaurant: 54 million yen ROI: 40
Slide 30: Development of Operations in Future
Development of Operations in Future (Number of restaurants) Watami, Za Watami, Nagomitei Kyo-no-ya 1,000 Wataminchi Sumishun*2 925 Gohan, T.G.I. FRiDAY' S/red*1 74(8%) 834 800 54(6%) 55(6%) 748 35 65(7%) 677 34(5%) 20 53(6%) (4%) 595 620 15 41(5%) (3%) 600 (2%) 323 362 145 193 240 279 (39%) (24%) (3
Slide 31: Restaurant (overseas)
Restaurant (Japan) Restaurant (overseas) Restaurant (overseas) Nursing care Home-delivered box lunches for the elderly Agriculture Maintenance and environmental 31
Slide 32: Status of Overseas Operations and Major Policies in the Second Half
Status of Overseas Operations and Major Policies in the Second Half Performance recovered. – Progress was made in reviving underperforming restaurants. – There were signs that the market environment would recover quickly, especially in Hong Kong. – Watei restaurants in Hong Kong made a good start. –
Slide 33: Overview of Overseas Operations: Comparison of Sales
Overview of Overseas Operations: Comparison of Sales (at All Restaurants) with Sales for Same Period a Year Ago Sales rose in Hong Kong and Taiwan in terms of local currencies. Hong Kong Shenzhen Taiwan (Million HK dollars) (Million RMB) (Million NTD) 140 12 11 11 250 124 119 209 120 10 189 % 200 10
Slide 34: Progress of Action for Underperforming Restaurants
Progress of Action for Underperforming Restaurants Both sales and income are increasing in underperforming restaurants thanks to initiatives including bolstered sales promotions and changes in signs. (Thousand HK dollars) MK Watami restaurant in Hong Kong DC Watei restaurant in Hong Kong 1,200 100 1
Slide 35: Overseas Operations: Status of Restaurants in November 2009
Overseas Operations: Status of Restaurants in November 2009 Will open new restaurants in new areas every year, aiming to have 100 restaurants overseas by 2012 Present Present 31 31 restaurants restaurants Shenzhen in in three three countries countries Taiwan Shanghai Hong Kong 2012 100 restaurants S
Slide 36: Making Inroads in Singapore (First Restaurant)
Making Inroads in Singapore (First Restaurant) INTERNATIONAL The restaurant opened in one of the world’s largest shopping malls (ION) on July 21. 36
Slide 37: Making Inroads in Singapore (Second Restaurant)
Making Inroads in Singapore (Second Restaurant) INTERNATIONAL The second restaurant opened in Clarke Quay Central on September 15. 37
Slide 38: Nursing care
Restaurant (Japan) Restaurant (overseas) Nursing care Nursing care Home-delivered box lunches for the elderly Agriculture Maintenance and environmental 38
Slide 39: Number of Facilities
Number of Facilities New facilities have been opened steadily. The number of facilities in the first half of FY2009 increased by seven from a year ago, to 42. Changes in number of facilities +7 38 42 32 35 FY2008/2 FY2008/8 FY2009/2 FY2009/8 39
Slide 40: Occupancy
Occupancy With the occupancy rate increasing, the average number of residents for the first half under review rose to about 2,500, up from 2,000 a year ago. Changes in occupancy rate Average number of residents 100% in existing facilities* 95% August 2009 90% Occupancy rate: 94.4% Number of rooms: 3
Slide 41: Factors in Year-on-Year Difference in Number of New Residents
Factors in Year-on-Year Difference in Number of New Residents Since the opening of new facilities was less than a year ago, the total number of operating months of new facilities was small. As a result, the number of new residents declined. Opening of new facilities Number of new residents in first
Slide 42: Major Policies
Major Policies Develop a system for nationwide operations. Opening (Underway) strategy Consider introducing low-priced facilities. (Underway) Deepen the four major zeros policy. Enhancing (Underway) the brand Improve the handling of dementia. (Underway) 42
Slide 43: Home-delivered box lunches for the elderly
Restaurant (Japan) Restaurant (overseas) Nursing care Home-delivered box lunches for the elderly Agriculture Maintenance and environmental 43
Slide 44: Overview of the Business
Overview of the Business Has expanded sales steadily, while curbing costs for acquiring customers, in the Kanto area Comparison of costs for Changes in sales by area* acquiring customers in each area (March through September 2009) (Billion yen) (Kyushu = 1) 6 1.0 Sales have been 1.0 increasing stead
Slide 45: Major Initiatives
Major Initiatives Targets at the end of March 2010 Merchandise Use the strengths of the Group (including collaboration with Watami Farm) to obtain foodstuffs and enhance recipes. Number of sales bases: Clarify the concepts of merchandise; 114 116 consider action to bolster the brand. * As of August
Slide 46: Agriculture
Restaurant (Japan) Restaurant (overseas) Nursing care Home-delivered box lunches for the elderly Agriculture Agriculture Maintenance and environmental 46
Slide 47: Factors of Poor Performance of Watami Farm in the First Half
Factors of Poor Performance of Watami Farm in the First Half Although the upland farming business moved into the black in the previous fiscal year, results of the Watami Farm department were poor in the first half. Factors Factors -- Although Although the the Group Group invested invested in in prod
Slide 48: Major Policies of Watami Farm
Major Policies of Watami Farm Initiatives in the second half - Increase the shipment ratio in upland farming (to over 50%) A good autumn crop is expected. - Expand use within the Group (Takushoku and other companies). Direction that Watami Farm should take - Develop and produce brand agricultural cr
Slide 49: The Situation at Kurabuchi Farm Today
The Situation at Kurabuchi Farm Today Building a system that will be able to supply stable amounts of produce throughout the year 49
Slide 50: Maintenance and environmental
Restaurant (Japan) Restaurant (overseas) Nursing care Home-delivered box lunches for the elderly Agriculture Maintenance Maintenance and environmental and environmental 50
Slide 51: Business Domains of Watami Ecology
Business Domains of Watami Ecology Watami Ecology defines its business domains as eco-friendly maintenance services and the building of a recycling loop. Watami Ecology will provide environmentally efficient services for customers. Pillars of the business of Watami Ecology Environmentally friendly m
Slide 52: Recycling Loop
Recycling Loop Promote recycling within the Group by changing garbage into compost and use it at the Group’s farms. Watami Ecology Coordinates (WE) Coordinates Garbage Collection and External companies transportation businesses Garbage - Watami Food Service Intermediate disposal businesses Compost V
Slide 53: Comparing the Present Situation with a Recycling Loop
Comparing the Present Situation with a Recycling Loop When certified, the Group will make wide-area garbage collection possible beyond municipal borders. Image Three restaurants in Hachioji Three restaurants in Chiba Eighteen restaurants in Yokohama 53
Slide 54: Bolstering Eco-Friendly Maintenance
Bolstering Eco-Friendly Maintenance Provide a regular, eco-friendly maintenance service and thereby differentiate ourselves from competitors by developing products jointly with manufacturers and the introduction of WE products to subcontractors. Customers (primarily existing customers) - Introduce e
Slide 55: Medium-Term Plan of Watami Ecology
Medium-Term Plan of Watami Ecology Boost external sales by bolstering packages of regular maintenance services and aim to raise the ratio of external sales to 40% in 2013 Changes in internal and external sales Million yen 6,000 5.0 5,000 4.3 billion External sales Figures (40%) in parentheses show a