Autobacs Seven Co., Ltd. · TSE:9832
Autobacs Seven — FY March 2013 Earnings Presentation
46 slides from Autobacs Seven's earnings presentation, May 10, 2013
Slide 1: Results for FY March 2013 and Forecasts for FY March 2014
Translation ANALYST MEETING Results for FY March 2013 and Forecasts for FY March 2014 May 10, 2013 Setsuo Wakuda Representative Director and CEO AUTOBACS SEVEN CO., LTD.
Slide 2: Contents
Contents I. FY March 2013 Consolidated Results and Progress vs. Medium-term Business Plan • Missed plan from beginning of year due to inability to fully respond to significant market changes • Achieved revised plan • Diligently implemented strategic measures and began reforming domestic store subsid
Slide 3: I. FY March 2013 Consolidated Results and Progress of the Medium-term Business Plan
I. FY March 2013 Consolidated Results and Progress of the Medium-term Business Plan 2
Slide 4: Financial Results (FY March 2013)
Financial Results (FY March 2013) Revenues and profits down: Missed our plan from the beginning of the year due to an inability to keep pace with rapid changes in the car navigation market. However, we did hit our revised plan for profits, thanks to more stringent control of expenses and improvement
Slide 5: Retail Sales Trend in FY March 2013
Retail Sales Trend in FY March 2013 Same Store Sales and Number of Customer at Domestic AUTOBACS-chain stores (YoY) 10% 6.2% Sales Customers count 4.2% 3.9% 5% 2.4% 2.2% -0.2% -0.9% -0.5% 0% 1.4% -1.8% -1.8% -0.7% -4.3% -1.1% -1.4% -4.4% -1.6% -2.0% -5% -5.8% -6.3% -10% -7.5% -8.5% -9.3% -12.1% -15%
Slide 6: Sales Variance by Merchandise
Sales Variance by Merchandise 【Same store basis】 Sales: -4.5% YoY, Number of customers: +0.5% YoY Retail sales ups and downs by merchandise category （Million Yen） (for 12 months ended March 31, 2013; YoY change in amount; total store basis) Car Electronics Motor Sports 4,000 Car Leisure Batteries 2,
Slide 7: Domestic Retail Sales (FY March 2013)
Domestic Retail Sales (FY March 2013) (Billion Yen) Retail sales including FCs*: 291.8 billion Yen (- 2.0% YoY) 350 Car related goods and services sales: 297.5 291.8 254.5 billion Yen (-3.0% YoY) 300 Car purchase & sales: 250 17.3 billion Yen (+4.5% YoY) 18,400 cars (+2.9% YoY) 200 Safety inspection
Slide 8: Reasons for Falling Car Navigation Prices
Reasons for Falling Car Navigation Prices • Shift toward lower-end navigation units driven by rise in sales of mini and compact vehicles • Significant increase in navigation unit shipments following recovery from Thai flooding • Dealers rolled out aggressive sales campaigns • Price competition inten
Slide 9: ASP of Car Navigation System at Stores
ASP of Car Navigation System at Stores Sales of Navigation System and ASP(YoY) インダッシュ単価 Built-in PND ポータブル単価 ナビ全体単価 Total YoY Billion Yen 45 0% 43.9 42.6 40 -4.2% 10.2 -5% 35 PND 11.2 -7.5% 32.6 30 -10% 7.4 25 -15% 20 -16.1% -16.0% -14.9% -16.8% 15 -18.3% -20% -18.8% 10 Built-in -25% 5 31.2 31.4 -24
Slide 10: Change of Sales Mix
Change of Sales Mix Sales Mix (Consolidated-base) 100% Others 9.6% Others 10.0% 90% Services 7.8% Services 8.4% 80% Motor Sports Goods 5.7% Motor Sports Goods 6.1% Car Interior Goods 9.1% 70% Car Interior Goods 10.2% Car Exterior Goods 9.7% 60% Car Exterior Goods 10.4% Oil & Batteries 10.3% 50% Oil
Slide 11: Operating Income Components (FY March 2013)
Operating Income Components (FY March 2013) Domestic Retail sales Total store basis: -2.0%／ same store basis: -4.5% Operating income (Million yen) Amount Major drivers of variance (yoy) Non-consolidated 13,740 +150 MY • Net sales -8,300 MY (-4.2%) • Gross Profit -820 MY (21.9% (last year 21.3%)) - d
Slide 12: Performance By Country (FY March 2013)
Performance By Country (FY March 2013) FRANCE CHINA SINGAPORE THAILAND Number of stores at March 31, 2013 11 2 3 4 -including FC stores- Same store sales -38.3% -4.4% +0.6% +8.6% -including FC stores- (all stores) FY March FY March FY March FY March FY March FY March FY March FY March Period 2013 20
Slide 13: Major Drivers Of Variance (FY March 2013)
Major Drivers Of Variance (FY March 2013) (Billion Yen) FY March 2013 FY Mar Results YoY 2012 Major drivers of variance % of Sales % of Sales change Net sales 230.2 -3.0% Non-consolidated -8.3 BY 237.3 Domestic store subsidiaries -3.7 BY Figures of Car goods supply subsidiaries ＋1.7 BY each segments
Slide 14: Factors for Second Half Recovery
Factors for Second Half Recovery In response to market changes, implemented more stringent cost controls, particularly after Q1 Gross profit: Improved gross profit mix, sold more tire chains SG&A: Saw performance-based remuneration decline, reined in non-essential spending (Billion Yen) 1st-half 2nd
Slide 15: Progress of Medium-term Business Plan
Progress of Medium-term Business Plan Measures Progress of individual measure 1. Improving store profitability Operating Profit of AUTOBACS format: 5.3％ • Store refurbishments have helped drive gradual improvements in sales at Central shelves and Comprehensive Maintenance & Service Counters 1)Store
Slide 16: Effect of Store Reform Experiment
Effect of Store Reform Experiment Key Metrics for Store Reform in FY March 2013 (YoY) 6.0% 4.8% 4.0% 2.0% 0.8% 0.5% 0.0% -2.0% -4.0% -4.6% -6.0% Total car goods Number of Sales at central Maintenance sales customers shelves related goods and services sales 15
Slide 17: Store Openings And Closings (FY March 2013)
Store Openings And Closings (FY March 2013) Domestic stores No. of FY March 2013 No. of stores at stores at Store Type March 31, 1st-half 2nd-half March 31, 2012 New S/B・R/L Close New S/B・R/L Close 2013 AUTOBACS 430 +11 +1/-1 -1 +16 +4/-3 -2 455 Super AUTOBACS 76 76 AUTO HELLOES 1 -1 0 AUTOBACS Seco
Slide 18: Progress of New Store Openings
Progress of New Store Openings New Store Opening in FY March 2013 STORE NAME Opening date STORE NAME Opening date 1 AUTOBACS Sagae Store April 13, 2012 16 AUTOBACS Akita Yurihonjo Store October 12, 2012 AUTOBACS EXPRESS Shioya-Kita 2 April 29, 2012 17 AUTOBACS Nara Daianji Store October 18, 2012 Sto
Slide 19: Financial Strategy
Financial Strategy Invested in growth (new store openings) and continued to return profits to shareholders Controlled cash levels to strike appropriate balance between efficiency and safety Billion Yen Consolidated Cash Flow and Liquidity 80 70 57.1 59.8 60 Operating CF 50 54.3 56.6 49.1 Investment
Slide 20: Resolution of Damages Lawsuits through Settlement in US
Resolution of Damages Lawsuits through Settlement in US Settlement agreement with plaintiffs executed on March 29, 2013 and approved by US courts. Plaintiffs：AUTOBACS STRAUSS INC. 1945 Route 23 Associates, Inc. R&S Parts and Service, Inc. • Contents of the Settlement 1. The Company shall pay to the
Slide 21: New Investment
New Investment • Introduction of solar power generation system Launch the solar power business utilizing unused areas and some building rooftops at its Western Japan Logistics Center Generating power: Approximately 1 megawatt - Electricity generated: Approximately 120 million kWh per year - Initial
Slide 22: II. FY March 2014 Consolidated Forecasts and Priority Initiatives
II FY March 2014 Consolidated Forecasts and Priority Initiatives 21
Slide 23: Financial Forecasts (FY March 2014)
Financial Forecasts (FY March 2014) (Billion Yen) FY March 2014 (Forecasts) FY March 2013 Results YoY change 1st-half 2nd-half Full year (amount & rate) Net sales 230.2 111.6 125.4 237.0 +6.9 Gross margin 75.7 36.4 41.5 77.9 +2.2 % to Net sales 32.9% 32.6% 33.1% 32.9% +2.9% SG&A 63.0 31.8 32.6 64.4
Slide 24: Premises for Sales Forecast
Premises for Sales Forecast Business Environment Return to lower levels following rise in new car sales driven by eco-car subsidies Improvement in consumer sentiment fueled by recovery in stock market among other things Spike in demand prior to hike in consumption tax rate Factors affect Compa
Slide 25: Forecasts At Parent & Subsidiary Level (FY March 2014)
Forecasts At Parent & Subsidiary Level (FY March 2014) (Billion Yen) FY March FY March 2014（Forecasts） 2013 YoY change results 1st-half 2nd-half Full Year (amount) Non-consolidated Net sales 187.2 87.7 101.1 188.8 +0.8% Ordinary 13.7 5.2 8.1 13.3 -3.2% income Domestic store Net sales 78.0 40.5 44.9
Slide 26: Priority Issues: Strengthen AUTOBACS' domestic business
Priority Issues in FY March 2013 1. Strengthen AUTOBACS’ domestic business • Strengthen efforts to encourage existing customers to visit stores again • Increase market share in neighboring areas • Strengthen sales of tires • Expand vehicle inspection and maintenance services as well as car sales • E
Slide 27: Toward The Goal Of 16BY In Operating Income
Toward The Goal Of 16BY In Operating Income Billion yen 17.0 FY March 2013 Top priority Non-consolidated +2.8 BY 15.0 Surpassed plan by Domestic store subsidiaries +0.8 BY Below plan by 0.6 -3.2 Overseas store subsidiaries +0.6 BY 13.5 13.0 （Consolidation adjustment +3.4 BY） Below plan by Below plan
Slide 28: To Improve the Earnings of Store Subsidiaries
To Improve the Earnings of Store Subsidiaries 1. Compared productivity vs. franchise stores (done) ・ Recognized need to improve staff efficiency domestic store subsidiaries more efficiently ・ Moved personnel from domestic store subsidiaries to HQ (done) ・ Moved these personnel into new-store opening
Slide 29: Reorganization of Store Subsidiaries
Reorganization of Store Subsidiaries Measures Contents Transfer of Store 1. Transfer three stores in Hachioji area (Tokyo) to the Ownership Group’s franchisee 2. Transfer one store in Awaji island (Hyogo) to the Group’s franchisee 3. Transfer four direct operation stores around Osaka to the subsidia
Slide 30: New Store Opening
New Store Opening 1. New stores planned: 30 stores - Small format store for small retail trade area in the countryside - 80 percent of new stores opened by franchisees - Develop new format such as tire specialized stores 2. Reducing costs for buildings and facilities Changes from Efforts for reducti
Slide 31: Store Openings And Closings (FY March 2014)
Store Openings And Closings (FY March 2014 ) Domestic stores No. of FY March 2014(Forecasts) No. of Store Type stores at 1st-half 2nd-half stores at Mar 31, Mar 31, 2013 New S/B・R/L Close New S/B・R/L Close 2014 AUTOBACS 455 ＋14 ＋2/-1 ＋15 ＋2/-2 485 Super AUTOBACS 76 76 AUTOBACS Secohan Ichiba 14 -1 1
Slide 32: Implementation of e-commerce
Implementation of e-commerce - Increasing of number of items September 2012: 40,000 items March 2013: 60,000 items March 2014 (plan): 100,000 items - Opened on-line store on Rakuten ichiba - Launched application for smart phone (October 2012) (M Yen) Sales through on-line store 2,000 1,800 1,500 1,0
Slide 33: Financial Strategies – Shareholder Return Policy
Financial Strategies – Shareholder Return Policy （Billion Yen） 14.0 12.01 12.0 9.85 9.85 10.22 9.86 10.0 Share 8.0 7.20 buyback 5.37 5.23 5.46 5.00 6.0 Dividend 4.0 2.0 4.48 4.62 4.76 4.81 4.86 0.0 FY March 2010 FY March 2011 FY March 2012 FY March 2013 FY March 2014 (Forecast) Dividend per share （A
Slide 34: Today's Message
Today’s Message Although it will be difficult to achieve all of the numerical targets set forth under the AUTOBACS 2010 Medium-term Business Plan, this fiscal year we will fully execute the strategic measures described in this presentation. We will place particularly strong focus on improving pr
Slide 35: Appendix
Appendix onting aan" aN AUTOBACS 34
Slide 36: Quarterly P/L (FY March 2013)
Quarterly P/L (FY March 2013) (Billion Yen) Full Year Q1(Results) Q2(Results) Q3(Results) Q4(Results) (Results) Net Sales 58.0 52.8 72.1 47.3 230.2 YoY -2.2 % - 4.8 % - 1.2 % - 4.8 % - 3.0 % Gross margin 17.7 17.6 23.6 16.8 75.7 (% of Sales) (30.6%) (33.3%) (32.7%) (35.6%) （32.9%) YoY -4.5 % - 4.1 %
Slide 37: Performance By Company Segments
Performance By Company Segments (Billion Yen) FY March FY March YoY Latest Actual vs. 2013 2012 （％） forecast forecast (%) Net Sales 187.3 195.6 -4.2 191.2 -2.0 Non-consolidated Operating Income 13.7 13.6 +1.1 13.2 +4.1 Net Sales 78.1 81.7 -4.5 79.9 -2.3 Domestic store subsidiaries Operating Income -
Slide 38: Sales Trend: Retail & Wholesale (FY March 2013)
Sales Trend : Retail & Wholesale (FY March 2013) Retail sales* & Wholesale sales (%) (YoY change) 15.0 Reaction from Rush demand of tires last month Retail sales Wholesale sales before raise in price Reaction from LY’s 10.0 8.8 strong demand for digital terrestrial Strong sales of snow broadcasting
Slide 39: Performance Breakdown (FY 2013 vs FY 2012)
Performance Breakdown (FY 2013 vs FY 2012) Parental company (Non-consolidated) (Billion Yen) -8.23BY ↑Car interior items, Tires & wheels, external items, motor sports goods Net Sales Wholesale -4.5% ↓Car electronics devices 187.2BY YoY -8.30BY -0.14BY ↑used car, On-line store, fuel, Car interior ite
Slide 40: Decrease In Consolidation Adjustments
Decrease In Consolidation Adjustments Consolidation Adjustments (Million Yen) FY March 2013 FY March 2012 Operating Income for segment total 13,453 14,654 Inventories -297 -325 (Unearned income of subsidiary inventories, etc.) Depreciation of Goodwill -263 -76 Allowance for point card -35 -83 Elimin
Slide 41: Statutory Inspection and Car Sales Business
Statutory Inspection and Car Sales Business Statutory car inspection Car sales (Thousands cars) (total stores) (total stores) (Thousands cars) 700 Full year 25 estimate Full year estimate 610 21.2 21.0 600 573 535 20 18.4 498 17.9 500 16.2 447 14.6 389 15 400 300 10 200 5 100 0 0 March March March M
Slide 42: Balance Sheet: Assets
Balance Sheet: Assets (Billion Yen) Total Assets 217.9 BY 205.5 BY Cash and 51 deposits Cash and deposit: -2.7 BY Trade notes 48.2 and account Trade notes receivables and account receivables: -2.0 BY 26.8 Lease investment 24.7 13.4 Securities: -7.9 BY assets 8.9 Securities 12.4 Redemption of CP 1.0
Slide 43: Balance Sheet: Liabilities and Equity
Balance Sheet: Liabilities and Equity (Billion Yen) Total Liabilities and Equity 217.9 BY 205.5 BY ST borrowings: Major -1.0 BY items changed Accounts payable 24.3 5.2 ST borrowings and 21.6 Accounts payable: -2.7 BY corporate bond 2.2 26.1 Other ST 21.2 liabilities 5.3 Other LT liabilities：-3.0 BY
Slide 44: Performance Results Of Franchisees
Performance Results Of Franchisees Ordinary Income of Franchise Companies (Preliminary) (Billion Yen) 10.0 Total of profit-making FCs Total of loss-making FCs 7.9 7.9 8.0 Orginary income(net) 6.2 6.0 5.5 4.0 2.1 2.0 0.0 -2.0 FY March 2009 FY March 2010 FY March 2011 FY March 2012 FY March 2013 43
Slide 45: Segment Information (as of April 1, 2013)
Segment Information (as of April1, 2013) End customers in Japan Retail Domestic store Franchisees subsidiaries Other 22 Companies 90 Companies Customers Retail from Wholesale direct operation Others stores Subsidiaries for Subsidiaries for car AUTOBACS SEVEN supporting function goods supply and othe
Slide 46: Forward-Looking Statements
Forward-Looking Statements These materials include forecasts regarding the Company’s future plans, strategies, and performance. This information is based on judgments and estimates made in accordance with information currently available. Actual results may differ materially from forecasts due to suc