Okuwa Co., Ltd. · TSE:8217
Okuwa — H1 FY2024 Earnings Presentation
40 slides from Okuwa's earnings presentation, Oct 4, 2023
Slide 1: First Half Financial Results Presentation Material
First half of the fiscal year ending February 20, 2024 Financial Results Presentation Material OKUWA Co., Ltd. (8217) October 4, 2023 Copyright © OKUWA Co., Ltd. All Rights Reserved. -1-
Slide 2: Financial Summary
Financial Summary First half of the fiscal year ending February 20, 2024 [Consolidated] ➢ An increase in sales and a decrease in profits Operating income: (forecast: 102.8% year on year) 100.7% year on year Ordinary profit: (forecast: 900 million yen) 810 million yen [Non- ➢ An increase in sales and
Slide 3: Consolidated Sales Results
Consolidated Sales Results (Million yen, %) Six months Six months Year-on- Comparison ended ended Forecast year against August 20, August 20, change forecast 2022 2023 Operating income 120,653 121,520 124,000 100.7 98.0 Operating profit 1,026 706 800 68.8 88.3 Ordinary profit 1,179 819 900 69.5 91.0
Slide 4: Consolidated Operating Income by Company
Consolidated Operating Income by Company (Million yen, %) Six months Six months Year-on-year ended ended change August 20, 2022 August 20, 2023 OKUWA 117,107 120,801 103.2 Hiramatsu 2,907 － － OAK FOODS 658 656 99.7 Retail Backoffice Support 176 152 86.5 SUNRISE 2,321 2,337 100.7 Consolidation adjust
Slide 5: Consolidated Ordinary Profit by Company
Consolidated Ordinary Profit by Company (Million yen, %) Six months Six months Year-on-year ended ended change August 20, 2022 August 20, 2023 OKUWA 1,309 711 54.4 Hiramatsu (31) － － OAK FOODS 40 32 80.7 Retail Backoffice Support 48 31 64.9 SUNRISE 10 37 342.5 Consolidation adjustment (209) (37) － S
Slide 6: Consolidated Management Indicators
Consolidated Management Indicators Six months ended Six months ended Six months ended August 20, 2021 August 20, 2022 August 20, 2023 Operating profit/Operating income (%) 1.86 0.85 0.58 Ordinary profit/Operating income (%) 1.96 0.98 0.67 Return on equity (ROE, %) 1.86 0.81 0.51 Return on assets (RO
Slide 7: Consolidated Cash Flows
Consolidated Cash Flows (Million yen) Six months ended Six months ended Year-on-year August 20, 2022 August 20, 2023 change Cash and cash equivalents at beginning of period 16,668 15,386 (1,282) Operating CF 4,127 7,011 2,883 Investing CF (3,911) (5,084) (1,173) Financing CF (3,534) 268 3,803 Cash a
Slide 8: Non-consolidated Sales Results
Non-consolidated Sales Results (Million yen, %) Six months ended Six months ended Year-on-year Comparison Forecast against August 20, 2022 August 20, 2023 change forecast Operating income 117,107 120,801 123,500 103.2 97.8 Net sales from direct 113,965 117,721 － 103.3 － operation Gross profit 32,026
Slide 9: Non-consolidated Net Sales from Existing Stores
Non-consolidated Net Sales from Existing Stores Year-on-year change Number of Average sales Net sales Number of for existing stores (%) customers per customer Unit price products per product purchased 1Q 100.7 98.7 102.0 97.1 105.1 2Q 101.5 98.2 103.4 98.0 105.5 2Q cumulative 101.1 98.4 102.7 97.6 1
Slide 10: Non-consolidated Net Sales by Region
Non-consolidated Net Sales by Region (Million yen, %) Year-on-year Six months ended Six months ended Year-on-year change for August 20, 2022 August 20, 2023 change existing stores Wakayama 34,681 37,573 108.3 100.5 Nara 23,210 23,209 100.0 101.1 Osaka 16,464 17,215 104.6 101.4 Hyogo 390 316 81.0 93.
Slide 11: Non-consolidated Net Sales by Business Type
Non-consolidated Net Sales by Business Type (Million yen, %) Year-on-year Six months ended Six months ended Year-on-year change for August 20, 2022 August 20, 2023 change existing stores SC 4,607 4,742 102.9 102.9 SSM 54,182 55,518 102.5 101.0 SM 4,088 4,340 106.2 103.0 Regular 62,878 64,601 102.7 1
Slide 12: Non-consolidated Net Sales by Department
Non-consolidated Net Sales by Department (Million yen, %) Year-on-year Six months ended Six months ended Year-on-year change for August 20, 2022 August 20, 2023 change existing stores Fresh foods 47,820 49,554 103.6 100.8 Processed foods 49,668 51,478 103.6 101.8 Foods 97,488 101,033 103.6 101.3 Hou
Slide 13: Non-consolidated Gross Profit Margin by Department
Non-consolidated Gross Profit Margin by Department (Million yen, %) Six months ended Six months ended Year-on-year August 20, 2022 August 20, 2023 change Fresh foods 32.5 32.1 (0.4) Processed foods 23.4 22.8 (0.6) Foods 27.8 27.4 (0.5) Household supplies 28.1 28.2 +0.1 Clothing 36.0 35.1 (0.9) Total
Slide 14: Non-consolidated SG&A Expenses
Non-consolidated SG&A Expenses (Million yen, %) Ratio to net sales Six months ended Six months ended Year-on-year Ratio to net (Six months ended August 20, 2022 August 20, 2023 change sales August 20, 2022) Net sales 111,062 114,808 103.4 100.0 100.0 Selling expenses 966 1,030 +64 0.9 0.9 Personnel
Slide 15: Non-consolidated Net Sales by Region and Business Type
Non-consolidated Net Sales by Region and Business Type Shizuoka 1,569 Hyogo 316 (Million yen) -15- Copyright © OKUWA Co., Ltd. All Rights Reserved.
Slide 16: Non-consolidated Store Distribution
Non-consolidated Store Distribution (As of Aug. 20, 2023) Total by region Wakayama 30 7 9 3 49 Nara 21 5 5 1 32 Osaka 17 2 1 － 20 Hyogo － － 1 1 (Kinki area) 68 14 16 4 102 Mie 14 3 5 － 22 Gifu 4 (PM: 1) 10 － 1 (PM: 1) 15 Aichi 9 (PM: 3) 1 － 2 (PM: 2) 12 Shizuoka 1 (PM: 1) 1 － － 2 (Tokai area) 28 15
Slide 17: New Store Openings
New Store Openings Business type Date of opening Store name Prefecture (directly-operated sales floor area） April 12 Kasugai Store Aichi SSM 3,224 m2 April 28 Yao Korigawa Store Osaka SSM 1,671 m2 (Yao Korigawa Store) Opened in the Forest Mall Yao as a tenant. This is the first time in nine years to
Slide 18: Major Renovations
Major Renovations Business type Date of opening Store name Prefecture (directly-operated sales floor area） June 9 Oyodo-nishi Nara SSM 1,767 m2 Oyodo-nishi Store has marked its 26th anniversary. We aim to secure profits by increasing sales through renewal of refrigerated showcases, change of sales f
Slide 19: Minor renovations
Minor renovations (Concept of minor renovations) • A greater lineup of products through the adoption of reach-in showcases and restructuring of clothing sales floors Make the renovation effects even higher return on investment through partial renovations, such as adopting scratch bakeries to attract
Slide 20: Initiatives for minor renovations (1)
Minor renovations Initiatives for minor renovations (1) <Reach-in showcases> Promoted the introduction of reach-in showcases amid increasing demand for ready-to-eat meals. Introduced at 52 stores as of August 20, 2023. With the introduction, SKUs increased by approximately three times. Frozen food s
Slide 21: Initiatives for minor renovations (2)
Minor renovations Initiatives for minor renovations (2) <Clothing> Conducted minor renovations of clothing areas alone, mainly for “increasing appeal through layout changes” and “introducing new categories,” at 18 stores in fiscal 2021 and onward. Sales in Clothing Department Up approx. 12% The comp
Slide 22: Non-consolidated Capital Expenditures
Non-consolidated Capital Expenditures (Million yen, %) Six months ended Six months ended Year-on-year Full-year August 20, 2022 August 20, 2023 change plan New stores 762 1,502 197.0 2,100 Existing stores, etc. 2,199 1,980 90.0 5,200 Systems 401 372 92.8 1,750 Construction basis 3,363 3,855 114.6 9,
Slide 23: Reorganization of Store Formats
Reorganization of Store Formats <Restructuring of SuC business formats> As a part of initiatives for the reorganization of store formats, Kani Mitake Interchange Store was renovated and reopened on June 14. <Concept of renovations> (1) “Price” in customer attraction + “attractiveness” in differentia
Slide 24: Enhancement of OKUWA brand products
Product Measures: New Product Development Enhancement of OKUWA brand products Developed the first foods with function claims under our private brand Aim to contribute to local communities through health -24- Copyright © OKUWA Co., Ltd. All Rights Reserved.
Slide 25: Policies and Financial Results Forecast for 2H
Policies and Financial Results Forecast for 2H Copyright © OKUWA Co., Ltd. All Rights Reserved. -25-
Slide 26: Reorganization of Store Formats
Reorganization of Store Formats <Restructuring of Price Cut/SL stores> September 22: Price Cut Tanabe Shimomaro Store was renovated and reopened. -26- Copyright © OKUWA Co., Ltd. All Rights Reserved.
Slide 27: Sales results of OKUWA brand products
Product Measures: OKUWA Brand Sales results of OKUWA brand products This year marks the fourth anniversary of the brand, launched in 2020, and sales have been steadily growing. Fiscal 2023 sales target 25.0 billion yen (114% year on year） (Composition ratio in foods) 1H Net Sales (billion yen) 2023
Slide 28: Fish delicatessen foods
Product Measures: Differentiation by Specialty Products Fish delicatessen foods (fish and seasonable vegetables) Introduced for the first time by the Company at MESA Iwade Store in May and MESA Takamatsu Store in July <Composition ratio in marine products> MESA Iwade Store: Approx. 13%, MESA Takamat
Slide 29: Addressing logistics 2024 issues
Logistics Department Measures Addressing logistics 2024 issues (1) Mihama Center: Reduce the number of truck trips Expected Fiscal 2023 Fiscal 2024 (Mihama area) annual forecast target reduction 30% Mileage 552,241 km 384,596 km 167,654 km reduction Light oil 122,760 ℓ 85,494 ℓ 37,267 ℓ CO2 316,219
Slide 30: Food Manufacturing Department Measures
Food Manufacturing Department Measures Develop a heat recovery device Develop a special device to use waste hot water to heat water for boilers. Plan to introduce the device to all factories and centers within fiscal 2023. Expected reduction in fuel cost: 13,000 thousand yen per year Initiatives to
Slide 31: DX: AI Prediction of the Number of Customers
DX: AI Prediction of the Number of Customers Prediction of assignment of staff to cash registers Implement a trial at 130 stores to calculate the number of cash registers that need to be in operation and assign staff to the cash registers, based on the number of customers predicted by AI. Reduce tot
Slide 32: Sustainability (1): TCFD recommendations
Sustainability (1) Response to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations We disclosed information on “Response to the TCFD recommendations” on July 31. In particular, we will work to build a decarbonized society by expanding the procurement of renewable energy. -
Slide 33: Sustainability (2): Off-site PPA services
Sustainability (2) Off-site PPA services ( × ) In August 2023, we started off-site PPA services at six stores in the Tokai area, utilizing electricity from a dedicated solar power plant. We expect to procure approx. 2.1 million kWh of electricity annually, and reduce CO2 emissions by approx. 830 ton
Slide 34: Sustainability (3): Kuwanomi-chan Charity
Sustainability (3) Kuwanomi-chan Charity From June 21 to July 20, all of our stores conducted a charity event in which a portion of sales of OKUWA brand products were donated to children’s cafeterias in the area where the stores are located. The amount raised was enough to provide 2,319 children wit
Slide 35: Human capital management (1) — Personnel framework
Personnel Policy Human capital management (1) —Personnel framework— (1) Laying the foundation by the Personnel Strategy Department (2) Sustainable growth by strengthening human resource development (3) Promoting human capital management, with active work of diverse human resources through diversity
Slide 36: Human capital management (2) — Human resource development
Personnel Policy Human capital management (2) —Strengthening human resource development— We believe that active work of diverse human resources is essential for sustainable growth. In fiscal 2023, we have significantly increased the number of training programs, participants, etc. to focus more on hu
Slide 37: Mobile Supermarket
Mobile Supermarket Start a trial of the mobile supermarket OKUWA, TOYOTA COROLLA WAKAYAMA, and TOYOTA CONIQ Pro will start a trial of the mobile supermarket from October 12. We will continue our activities to contribute to local communities. -37- Copyright © OKUWA Co., Ltd. All Rights Reserved.
Slide 38: 65th Anniversary
Initiatives for the Next Fiscal Year 65th Anniversary In collaboration with our business partners, we will implement anniversary plans, such as campaigns and sales of commemorative products. -38- Copyright © OKUWA Co., Ltd. All Rights Reserved.
Slide 39: Financial Results Forecast
Financial Results Forecast Fiscal year ended Fiscal year ending Year-on-year Consolidated (Million yen) February 20, 2023 February 20, 2024 change (%) Operating income 246,877 253,000 102.5 Operating profit 2,927 3,400 116.1 Ordinary profit 3,148 3,600 114.3 Profit* 928 1,200 129.2 *Profit represent
Slide 40: Toward Achieving Management Conscious of Capital Cost and Stock Price
Toward Achieving Management Conscious of Capital Cost and Stock Price With regard to the request from the Tokyo Stock Exchange dated March 31, 2023, the Company is preparing to formulate countermeasures through continuing discussions at the Board of Directors, in light of the current situation where