Okuwa Co., Ltd. · TSE:8217

Okuwa — FY2023 Earnings Presentation

48 slides from Okuwa's earnings presentation, Apr 3, 2024

  1. Slide 1: Financial Results Presentation Material

    Fiscal year ended February 20, 2024 Financial Results Presentation Material OKUWA Co., Ltd. (8217) April 3, 2024 Copyright © OKUWA Co., Ltd. All Rights Reserved. -1-

  2. Slide 2: Consolidated Sales Results

    Consolidated Sales Results (Million yen, %) Fiscal year Fiscal year Comparison ended ended Year-on-year Forecast against February 20, February 20, change forecast 2023 2024 Operating income 246,877 247,378 253,000 100.2 97.8 Operating profit 2,927 2,888 3,400 98.7 85.0 Ordinary profit 3,148 3,098 3,

  3. Slide 3: Consolidated Operating Income by Company

    Consolidated Operating Income by Company (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year February 20, 2023 February 20, 2024 change OKUWA 241,174 245,933 102.0 Hiramatsu 4,337 － － OAK FOODS 1,339 1,305 97.4 Retail Backoffice Support 314 287 91.4 SUNRISE 5,076 5,120 100.9 Consolidat

  4. Slide 4: Consolidated Ordinary Profit by Company

    Consolidated Ordinary Profit by Company (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year February 20, 2023 February 20, 2024 change OKUWA 3,222 2,990 92.8 Hiramatsu (66) － － OAK FOODS 86 76 88.4 Retail Backoffice Support 50 45 90.3 SUNRISE 66 67 101.4 Consolidation adjustment (207)

  5. Slide 5: Consolidated Management Indicators

    Consolidated Management Indicators Fiscal year ended Fiscal year ended Fiscal year ended February 20, 2022 February 20, 2023 February 20, 2024 Operating profit/Operating income (%) 1.96 1.19 1.17 Ordinary profit/Operating income (%) 2.05 1.28 1.25 Return on equity (ROE, %) 1.96 1.19 1.28 Return on a

  6. Slide 6: Consolidated Cash Flows

    Consolidated Cash Flows (Million yen) Fiscal year ended Fiscal year ended Year-on-year February 20, 2023 February 20, 2024 change Cash and cash equivalents at beginning of period 16,668 15,386 (1,282) Operating CF 5,931 9,692 +3,761 Investing CF (6,678) (7,942) (1,263) Financing CF (535) (954) (418)

  7. Slide 7: Non-consolidated Sales Results

    Non-consolidated Sales Results Comparison (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year Forecast against February 20, 2023 February 20, 2024 change forecast Operating income 241,174 245,933 252,000 102.0 97.6 Net sales from direct operation 234,820 239,439 － 102.0 － Gross profit

  8. Slide 8: Non-consolidated Net Sales from Existing Stores

    Non-consolidated Net Sales from Existing Stores Year-on-year change for Number of Average sales Number of existing stores (%) Net sales customers per customer Unit price products per product purchased 1H 101.1 98.4 102.7 97.6 105.3 2H 100.0 98.7 101.3 96.8 104.7 Full year 100.5 98.5 102.0 97.2 105.0

  9. Slide 9: Non-consolidated Net Sales by Region

    Non-consolidated Net Sales by Region (Million yen, %) Year-on-year Fiscal year ended Fiscal year ended Year-on-year change for February 20, 2023 February 20, 2024 change existing stores Wakayama 72,583 76,383 105.2 100.1 Nara 47,699 47,072 98.7 99.7 Osaka 33,823 35,236 104.2 100.7 Hyogo 720 619 86.0

  10. Slide 10: Non-consolidated Net Sales by Business Type

    Non-consolidated Net Sales by Business Type (Million yen, %) Year-on-year Fiscal year ended Fiscal year ended Year-on-year change for February 20, 2023 February 20, 2024 change existing stores SC 9,568 9,746 101.9 101.9 SSM 110,296 113,286 102.4 100.2 SM 8,567 8,703 101.6 101.4 Regular 128,432 131,7

  11. Slide 11: Non-consolidated Net Sales by Department

    Non-consolidated Net Sales by Department (Million yen, %) Year-on-year Fiscal year ended Fiscal year ended Year-on-year change for February 20, 2023 February 20, 2024 change existing stores Fresh foods 99,106 101,813 102.7 100.3 Processed foods 101,910 103,871 101.9 101.3 Foods 201,017 205,685 102.3

  12. Slide 12: Non-consolidated Gross Profit Margin by Department

    Non-consolidated Gross Profit Margin by Department (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year February 20, 2023 February 20, 2024 change Fresh foods 32.6 32.1 (0.4) Processed foods 23.8 23.3 (0.5) Foods 28.1 27.7 (0.4) Household supplies 28.4 28.4 +0.0 Clothing 35.4 35.1 (0.3)

  13. Slide 13: Non-consolidated SG&A Expenses

    Non-consolidated SG&A Expenses (Million yen, %) Ratio to net sales Fiscal year ended Fiscal year ended Year-on-year Ratio to net (fiscal year ended February 20, 2023 February 20, 2024 change sales February 20, 2023) Net sales 229,087 233,694 +4,606 100.0 100.0 Selling expenses 2,000 2,087 +87 0.9 0.

  14. Slide 14: Non-consolidated Capital Expenditures

    Non-consolidated Capital Expenditures (Million yen, %) Fiscal year ended Fiscal year ended Year-on-year February 20, 2023 February 20, 2024 change New stores 2,078 1,846 88.8 Existing stores, etc. 4,457 4,026 90.3 Systems 963 1,210 125.6 Construction basis 7,500 7,083 94.4 Key descriptions New store

  15. Slide 15: Non-consolidated Store Distribution

    Non-consolidated Store Distribution (As of Feb. 20, 2024) Total by region Wakayama 31 7 8 3 49 Nara 21 5 5 1 32 Osaka 17 2 1 － 20 Hyogo － － 1 － 1 (Kinki area) 69 14 15 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 1

  16. Slide 16: Priority Measures (1) Store Strategy

    Priority Measures (1) Store Strategy New store openings: 2 April 12 Kasugai Store (Aichi) April 28 Yao Korigawa Store (Osaka) Major renovation: 1 June 9 Oyodo-nishi Store (Nara) Business type change: 1 December 8 Kozaki Store (Wakayama) Closed store: 1 February 20 Okazaki Inter Store (Aichi) ➢ Opene

  17. Slide 17: Priority Measures (2) Product Strategy

    Priority Measures (2) Product Strategy OKUWA Brand Four years have passed since the brand launch, and sales have been Fiscal 2023 steadily growing sales results 24.7 billion yen Kurashi More Offer highly satisfactory Fiscal 2023 products at affordable sales results prices 27.3 billion yen Accounted

  18. Slide 18: Priority Measures (3) Labor Strategy

    Priority Measures (3) Labor Strategy ◼ Laying the foundation for human capital management by establishing Labor the Personnel Strategy Department strategy ◼ Effective use of senior employees ◼ Promotion of active participation by women (three-year plan) Personnel Offered a training program for 180 f

  19. Slide 19: Priority Measures (4) Promotion of Digitalization

    Priority Measures (4) Promotion of Digitalization Prediction of assignment of staff to cash registers Increased the number of AI-supported stores to 139, where AI is used to calculate the number of cash registers that need to be in operation and assign staff to the cash registers. Reduced total work

  20. Slide 20: Priority Measures (5) Climate Change Response

    Priority Measures (5) Climate Change Response Measures to reduce GHG emissions from business activities ・Expanded the installation and operation of solar power generation facilities Achieved approx. 30% reduction from ・Disclosed “Response to the TCFD recommendations.” the fiscal 2017 level <July 202

  21. Slide 21: Management Policy for Fiscal Year Ending February 20, 2025

    Management Policy for Fiscal Year Ending February 20, 2025 Copyright © OKUWA Co., Ltd. All Rights Reserved. -21-

  22. Slide 22: Priority Measures (1) Store Strategy (New Store Openings)

    Priority Measures (1) Store Strategy (New Store Openings) Business type (directly-operated Date of opening Store name Prefecture sales floor area) Mid-July SuC Chita Store Aichi SuC 4,298 m2 Late July Nishiyamato Store Nara SSM 1,967 m2 (SuC Chita Store) ➢The second Super Center type store in Aichi

  23. Slide 23: Priority Measures (1) Store Strategy (Minor Renovations)

    Priority Measures (1) Store Strategy (Minor Renovations) Carrying out minor renovations Plan to carry out minor renovations at approx. 20 stores a year according to the annual schedule. In addition to the conventional measures of adopting reach-in showcases, fishmonger’s sushi, and new scratch baker

  24. Slide 24: Consolidated Financial Results Forecast

    Consolidated Financial Results Forecast Fiscal year ended Fiscal year ending Growth rate Full year (Million yen) February 20, 2024 February 20, 2025 (%) Operating income 247,378 259,000 104.7 Operating profit 2,888 3,500 121.2 Ordinary profit 3,098 3,550 114.6 Profit* 1,000 1,200 120.0 *Profit repre

  25. Slide 25: Non-consolidated Financial Results Forecast

    Non-consolidated Financial Results Forecast Fiscal year ended Fiscal year ending Full year (Million yen) February 20, 2024 February 20, 2025 Growth (%) Operating income 245,933 258,000 104.9 Operating profit 2,723 3,400 124.9 Ordinary profit 2,990 3,500 117.0 Profit 991 1,200 121.0 Fiscal year ended

  26. Slide 26: Non-consolidated Financial Results Forecast

    Non-consolidated Financial Results Forecast Key points in financial results forecast Operating income: 258.0 billion yen ・Net sales from existing stores: 103.9% year on year ・Net sales from direct operation: 105.0% year on year ・Three stores to newly open ・Small- or medium-scale renovation planned f

  27. Slide 27: Medium-Term Management Plan

    Medium-Term Management Plan Copyright © OKUWA Co., Ltd. All Rights Reserved. -27-

  28. Slide 28: Formulation of a new Medium-Term Management Plan

    Formulation of a new Medium-Term Management Plan Target for the fiscal year ending February 20, 2025 (Consolidated) Medium-Term Management Plan Plan for the fiscal year ending (announced in April 2022) February 20, 2025 Operating income 270.0 billion yen 259.0 billion yen Ordinary profit 6.5 billion

  29. Slide 29: Main reasons for revising the Medium-Term Management Plan

    Main reasons for revising the Medium-Term Management Plan (April 2022) ➢ Failure to achieve sales plans for existing stores ➢ Decrease in gross profit margin due to soaring raw material prices ➢ Revision of new store opening plans ➢ Postponement of major renovations due to soaring construction mater

  30. Slide 30: OKUWA's New Medium-Term Management Plan

    OKUWA’s New Medium-Term Management Plan March 2024–February 2027 (Three Years) 1. Policies and Numerical Targets in the New Medium-Term Management Plan 2. Capital Policy and Financial Strategy 3. Key Issues and Measures in the New Medium-Term Management Plan 4. Store Strategy 5. Product Strategy 6.

  31. Slide 31: Numerical Targets in the New Medium-Term Management Plan

    1 Numerical Targets in the New Medium-Term Management Plan Financial results targets for the fiscal year ending February 20, 2027 (consolidated) Operating income 290.0 billion yen Operating profit 7.0 billion yen ROE 5％ New Medium-Term Management Plan Target for Medium- to March 2024– February 2027

  32. Slide 32: Capital Policy and Financial Strategy: Treasury Shares

    2 Capital Policy and Financial Strategy Plan to acquire treasury shares worth 4.0 billion yen in three years Target profit and capital structure (Billion yen) Operating profit Acquisition of treasury shares 10.0 By the final fiscal year of 7.0 this Medium-Term 2.8 Management Plan Fiscal year ended F

  33. Slide 33: Capital Policy and Financial Strategy: Dividends

    2 Capital Policy and Financial Strategy Strive to enhance profitability and aim to increase dividends in the medium- to long-term Transition of annual dividends per share 26 26 Fiscal year Fiscal year 23/2 24/2 ended ended February 20, February 20, 27/2 中長期 2023 2024 Copyright © OKUWA Co., Ltd. All

  34. Slide 34: Key Issues and Measures in the New Medium-Term Management Plan

    3 Key Issues and Measures in the New Medium-Term Management Plan Key issues ・Weakness in attracting younger generations, with 80% of sales dependent on customers in their 50s or older ・Insufficient utilization of purchase history and other data that have been accumulated ・Large room for productivity

  35. Slide 35: Store Strategy (1): Optimal Rollout of Business Types

    Store Strategy (1): Optimal Rollout of Business Types According to Increase 4 or Decrease in Population and Income ・Accelerate the opening of new stores in optimal business types, mainly in urban areas (Aim for 10 stores) ・Restructure business types, and strive to improve profitability through domin

  36. Slide 36: Store Strategy (2): Initiatives for Regular Business Type

    4 Store Strategy (2): Initiatives for Regular Business Type (1) Reach out to younger generations Price cut for 1,000 items (updated every quarter) Arrangements and shelf space allocation for customers in their 20s–40s (2) Increase the share of Revitalization (3) Establish a model for small- fresh fo

  37. Slide 37: Store Strategy (4): Store Productivity Improvement

    4 Store Strategy (4): Store Productivity Improvement ・Promote digitalization of stores ・Improve customer convenience through online sales and the online supermarket ・Improve labor productivity through business process reengineering ・Reduce store management costs through facility management Centraliz

  38. Slide 38: Product Strategy (1): Provision of Unique Products and Specialty Products

    5 Product Strategy (1): Provision of Unique Products and Specialty Products ・Increase the share of OKUWA brand and other PB products that have high added value and high gross profit ・Maximize the strengths as a manufacturing retailer (delicatessen food factories, daily food factories, process center

  39. Slide 39: Product Strategy (2): Spot Strategy

    5 Product Strategy (2): Spot Strategy ・Extensive price cuts on the occasion of the 65th anniversary ・Products in collaboration with Arakawa no Momo (Hakki Farm) Copyright © OKUWA Co., Ltd. All Rights Reserved. -39-

  40. Slide 40: Product Strategy (3): Younger Generation and Family Oriented Pricing

    Product Strategy (3): Younger Generation and Family Oriented Pricing 5 Policies and EC Product Discovery ・Combine “EDLP” with “High & Low” for a hybrid pricing strategy ・Lower the gross profit margin for the agricultural product and daily food categories, and increase the number of customers by draw

  41. Slide 41: Sales Promotion Measures: Renewal of OKUWA App

    6 Sales Promotion Measures: Renewal of OKUWA App ・Increase the number of active members from 0.88 million to 1 million by improving app convenience ・Increase store visit frequencies and spendings by offering app coupons, extra points, and other benefits ・Accelerate new member registration by acquiri

  42. Slide 42: Marketing Strategy: From Customers to Each Customer

    7 Marketing Strategy: From “Customers” to “Each Customer” Flow of customer-originated marketing activities Collect Apply to sales Understand customer floors and Communicate to customers customers information products POS data App coupons to prevent ID-POS data analysis customer attrition tool Custom

  43. Slide 43: Organizational Reform: Improvement of Organizational Structure

    8 Organizational Reform: Improvement of Organizational Structure M&A Promotion Collect information, and seek deals that are expected to produce Office synergy effects, in both the same and different industries Achieve productivity improvement and cost reduction through Business Process improvement,

  44. Slide 44: Promotion of IT Strategy (DX)

    9 Promotion of IT Strategy (DX) In the medium- to long-term 30% reduction in total working hours ・Reduce working time by bringing the manufacturing planning system into operation ・Track the minimum volume on display by using the automatic ordering system ・Respond to rapid changes in demand, with the

  45. Slide 45: Maximization of the Value of Human Capital

    10 Maximization of the Value of Human Capital ・Promote workstyle reform ・Create a positive cycle of recruiting, developing, and facilitating active participation of human resources <Documentation> Prepare standardized <Executive candidate <Optimal personnel manuals for OKUWA and training> allocation

  46. Slide 46: Sustainability Management (1): Contribution to Local Communities

    Sustainability Management (1): Contribution to Local Communities and 11 Reduction of Environmental Impact Target for the end of fiscal 2030 GHG emissions from business activities 50% reduction from fiscal 2017 (Scope 1 and Scope 2) ・Expand the installation and operation of solar power generation fac

  47. Slide 47: Corporate Governance

    12 Corporate Governance ・Return profits to stakeholders ・Improve medium- to long-term corporate value (Corporate governance) (Management team) (Stakeholders) Company with an Audit & Supervisory Committee Nomination and Compensation Committee Delegated executive officer system Collaborate Sustainabil

  48. Slide 48: A supermarket that continues to transform, with a timeless spirit

    “A supermarket that continues to transform, with a timeless spirit” Copyright © OKUWA Co., Ltd. All Rights Reserved. -48-

OKUWA — FY2023 Earnings Presentation on 6ix