Watami Co., Ltd. · TSE:7522
Watami — FY2008 Earnings Presentation
69 slides from Watami's earnings presentation, May 2009
Slide 1: Results Briefing for the Fiscal Year Ended March 2009
Watami Co., Ltd. Results Briefing for the Fiscal Year Ended March 2009 (23rd term) To be the group to collect the most “Thank you” on the planet. 1
Slide 2: Summary of Results for FY2008 and Strategies of the Watami Group
Summary of Results for FY2008 and Strategies of the Watami Group Miki Watanabe Representative Director and President, and CEO 2
Slide 3: Consolidated Results of the Watami Group
Consolidated Results of the Watami Group (Million yen) (Million yen) 140,000 8,000 Total sales Ordinary income 120,800 120,000 7,000 111,288 104,231 98,441 6,000 100,000 82,671 5,000 80,000 65,817 4,000 58,550 60,000 3,000 40,000 2,000 20,000 1,000 0 0 04 05 06 08 09 10 05 20 20 20 20 20 20 19 (Fore
Slide 4: The Share Price Outperformed the Market Almost Entirely Throughout the Year
The Share Price Outperformed the Market Almost Entirely Throughout the Year Relative stock prices (comparison with TOPIX) for the past year WATAMI TOPIX 4
Slide 5: Summary
Summary Achieved record consolidated sales of ¥111.2 billion (up 7% year on year) and record ordinary income of ¥6.1 billion (up 18% year on year) - The strong performance of the nursing care business and the acquisition of shares in Takushoku contributed to results. - The domestic restaurant busine
Slide 6: Progress in the Business Portfolio
Progress in the Business Portfolio Processing Restaurants, Restaurants, Production Processing facilities, Production (Distribution) facilities, (Distribution) home homedelivery delivery (i) Expansion through the business category of Watami, a Japanese- style pub, from the earliest days of (ii) Devel
Slide 7: Introducing the New President
Introducing the New President Yutaka Kuwabara Birth date: February 4, 1958 (Age: 51) May 1978 Joined Skylark Co., Ltd. October 1998 Joined Watami Co., Ltd. December 1998 General Manager of Sales Division, Watami Co., Ltd. June 1999 Managing Director, General Manager of Sales Division, Watami Co., Lt
Slide 8: New Directors (from June 2009—Plan)
New Directors (from June 2009—Plan) Name Title Responsibilities Miki Watanabe Chairman & CEO Overall management of the Group Yutaka Kuwabara President & COO Operation of the Group, domestic President & COO, Watami Food Service restaurants, and the environment Co., Ltd. Minoru Moji Director, and Pres
Slide 9: Results by Segment for FY2008 and Plan for FY2009
Results by Segment for FY2008 and Plan for FY2009 Toshiharu Kimura Senior Corporate Officer & CFO 9
Slide 10: Consolidated Results for the Fiscal Year 2008
Consolidated Results for the Fiscal Year 2008 I. Consolidated Results for the Fiscal Year Ended March 2009 Reference (Unit: Billion yen) Fiscal Year Fiscal Year Fiscal Year Ended March Ended March Ended March Year on year Difference Consolidated 2009 2008 2009 changes from forecasts Factors for diff
Slide 11: Consolidated Results by Business Segment for FY2008 (1/2)
Consolidated Results by Business Segment for FY2008 (1/2) I. Consolidated Results for the Fiscal Year Ended March 2009 Reference (Unit: Million yen) Fiscal Year Fiscal Year Fiscal Year Ended March Ended March Ended March Difference 2009 2008 2009 Year on year from Results Results Forecasts changes f
Slide 12: Consolidated Results by Business Segment for FY2008 (2/2)
Consolidated Results by Business Segment for FY2008 (2/2) I. Consolidated Results for the Fiscal Year Ended March 2009 Reference (Unit: Million yen) Fiscal Year Fiscal Year Fiscal Year Ended March Ended March Ended March Difference 2009 2008 2009 Year on year from Factors for differences Results Res
Slide 13: Consolidated Forecasts for FY2009
Consolidated Forecasts for FY2009 II. Consolidated forecasts for the fiscal year ending March 2010 (Unit: Billion yen) Fiscal Year Fiscal Year Year on Ended March Ended March year 2010 2009 Major assumptions changes Forecasts Results (%) We expect sales to rise 9% as a result of growth in the nursin
Slide 14: Forecasts by Business Segment for FY2009 (1/2)
Forecasts by Business Segment for FY2009 (1/2) II. Consolidated forecasts for the fiscal year ending March 2010 (Unit: Million yen) Fiscal Year Fiscal Year Year on Ended March Ended March year 2010 2009 Major assumptions changes Forecasts Results (%) *1 <Japan> 1. Sales are expected to rise 1% year
Slide 15: Forecasts by Business Segment for FY2009 (2/2)
Forecasts by Business Segment for FY2009 (2/2) II. Consolidated forecasts for the fiscal year ending March 2010 (Unit: Million yen) Fiscal Year Fiscal Year Ended March Ended March Year on year 2010 2009 changes Forecasts Results Major assumptions (%) *2 <Nursing care business> Sales 18,100 14,680 12
Slide 16: Reorganization of Business Portfolio
Reorganization of Business Portfolio Entering the box lunch home-delivery business for the elderly (a business in which close relationships with customers through food are a major factor in differentiation.) Renting an entire building, focusing on environmental conservation, and withdrawing from the
Slide 17: Reorganization of Business Portfolio (Conceptual Diagram)
Reorganization of Business Portfolio (Conceptual Diagram) Current Engines of growth sales High Agriculture Restaurant Nursing care business business Expanding business (overseas) the scale and improving earnings Takushoku Growth potential Ca sh of market Restaurant business (Japan) Low Low Rate of r
Slide 18: Free Cash Flow Performance by Business (2008)
Free Cash Flow Performance by Business (2008) Acquired shares in Takushoku. Restricted the opening of new restaurants and aggressively invested in the nursing care business. (Million yen) Net income Depreciation and Change in Capital Free cash (A) amortization, guarantee expenditure flow (A)+(B)+ am
Slide 19: Consolidated Cash Flows
Consolidated Cash Flows Free cash flow is expected to remain positive in FY2009 (Million yen) Results for the fiscal year Forecasts for the fiscal year ended March 2009 ending March 2010 Investments 6,759 6,000 Capital investments 4,302 6,000 Share acquisition, etc. 2,457 Net income 2,561 3,000 Depr
Slide 20: Changes in interest-bearing debt and net debt equity ratio
Changes in interest-bearing debt and net debt equity ratio Changes in interest-bearing debt and net debt equity ratio (March 2006 to March 2010) (Billion yen) - Interest-bearing debt will 30.0 fall in the current fiscal year after a round of 25.0 M&A and the acquisition of treasury stock. 20.0 Inter
Slide 21: Changes in the payout ratio (2004.3 – 2009.3)
Changes in the payout ratio (2004.3 – 2009.3) (%) 50.0 Payout ratio 40.0 37.7 38.6 31.4 30.0 25.8 25.9 21.2 20.0 10.0 0.0 FY2003 03 FY2004 04 FY2005 05 FY2006 06 FY2007 07 FY2008 08 (Forecast) Dividends per share 10 yen 10 yen 10 yen 10 yen 20 yen 20 yen 21
Slide 22: Strategies for the Restaurant Business
Strategies for the Restaurant Business Yutaka Kuwabara President & COO, Watami Food Service Co., Ltd. 22
Slide 23: Summary of Restaurant Business—Results for Term Ended March 2009
Summary of Restaurant Business —Results for Term Ended March 2009 Both sales and income declined in difficult market circumstances Sales: ¥85,490 million (down ¥1,421 million year on year) Ordinary income: ¥3,887 million (down ¥35 million year on year) • Watami, Za Watami, and Nagomitei Although res
Slide 24: Summary of Restaurant Business—Existing Restaurants
Summary of Restaurant Business —Existing Restaurants Watami outperformed its competitors in a difficult business environment. In particular, Watamin-chi and Gohan produced remarkable results, exceeding the industry average 5% or more. Same-restaurant sales (year on year) Changes in monthly year-on-y
Slide 25: Changes in Number of Restaurants by Category
Changes in Number of Restaurants by Category (from March 2007 to March 2009) (Restaurants) Watami Za Watami Watamin-chi Others*1 700 *Numbers in parentheses show year-on-year changes. Changes in number of restaurants 609 598 (-11) 595 (-3) 600 2007 2008 (YoY) 75*1 53 (-22)*1 33 (-20)*1 New: 12 16 (+
Slide 26: Priority Initiatives for FY2009
Priority Initiatives for FY2009 1. Change the type of operation of Watami. Expand certain customer groups (young customers and women customers). Lower the break-even point. * Opened the Shibuya Dogenzaka restaurant, which is a test restaurant for the advanced Watami, on April 28 Perform a range of t
Slide 27: Aims in Changing Watami
Aims in Changing Watami 1. Expand certain customer groups. (1) Increase the ratio of women customers. (Currently) 56 (men) : 44 (women) 50:50 (2) Increase the ratio of young customers. (Currently) 41% (20s) 23% (30s) 36% (40s and over) 50% 25% 25% 2. Lower the break-even point . (1) Reduce the initi
Slide 28: Aims in Developing the Watami Shibuya Dogenzaka Restaurant
Aims in Developing the Watami Shibuya Dogenzaka Restaurant 1. Improve products. – Improve products in terms of the following: (1) originality, (2) prices (including reductions in beer prices), (3) overall enhancement, and (4) menu presentation. Starting from the menu revised on February 9 and perfor
Slide 29: Profile of Watami Shibuya Dogenzaka Restaurant (1)
Profile of Watami Shibuya Dogenzaka Restaurant (1) • New logo • Ground menu of the Shibuya Dogenzaka restaurant 29
Slide 30: Profile of Watami Shibuya Dogenzaka Restaurant (2)
Profile of Watami Shibuya Dogenzaka Restaurant (2) • Providing four types of seats in accordance with customer needs (1) Hall (37 seats) (2) Booth (51 seats) 30
Slide 31: Profile of Watami Shibuya Dogenzaka Restaurant (3)
Profile of Watami Shibuya Dogenzaka Restaurant (3) (3) Private dining room (53 seats) (4) Party room (64 seats) 31
Slide 32: Profile of Watami Shibuya Dogenzaka Restaurant (4)
Profile of Watami Shibuya Dogenzaka Restaurant (4) • Has introduced LED to all lamps in the restaurant and in the kitchen Indirect lighting (party room) Lighting equipment (with a cover) Developed an original LED lamp jointly with three manufacturers Introduced LED in the kitchen for the first time
Slide 33: Expanding the Direct Franchise System (DFC)
Expanding the Direct Franchise System (DFC) Introduce the DFC system, which has been applied to Watamin-chi, to Watami and Za Watami in April 2009 and to Nagomitei and Gohan thereafter Accelerate the development of DFC so that there will be 114 DFC restaurants and 97 owners on April 1, 2010 (slightl
Slide 34: Adding Business Objectives
Adding Business Objectives Business objectives – Provide places for every type of meeting, contact, and comfort for as many customers as possible. Added – Provide opportunities and support for as many employees as possible, to realize their dreams of becoming independent. – Contribute to the prosper
Slide 35: Conversions, and Continuous New Restaurant Opening and Growth
Conversions, and Continuous New Restaurant Opening and Growth Accelerate conversion from Watami to Watamin-chi, which performs well. Convert underperforming restaurants and restaurants that are making a profit but which are obviously aging (more than ten years old). Convert advanced Watami restauran
Slide 36: Topics
Topics New American Bistro & Bar Char-grilled and fresh food restaurant FRiDAY’S red in Shibuya Ishokuya Kitsunai Concept: Concept: Concept: Concept: Entirely Entirely new, new, healthy healthy and and light light American American Another Another domestic domestic dining dining table table for for
Slide 37: Target Results in FY2009
Target Results in FY2009 Target results in the domestic restaurant business for FY2009 - Sales: ¥86,700 million (up 1%/¥1,210 million year on year) - Ordinary income: ¥4,534 million (up 17%/¥647 million year on year) Major assumptions - Same-restaurant sales: Down 1% year on year (WFS+TGI) - 18 new
Slide 38: Strategies for Overseas Restaurant Business
Strategies for Overseas Restaurant Business Minoru Moji President & COO, Watami Tezukuri Merchandising Co., Ltd. 38
Slide 39: Summary of Results of Overseas Restaurant Business
Summary of Results of Overseas Restaurant Business Results Sales for FY2008 were 4.23 billion yen (down 7.4% year on year). Ordinary income was 0.12 billion yen (down 39.6% year on year). (In terms of local currencies, sales were up 13.8%, and ordinary income was down 20.3%.) New restaurants: 2 Wata
Slide 40: Affected by the Business Downturn in Each Country but Recovering
Affected by the Business Downturn in Each Country but Recovering Same-restaurant sales (year on year, in terms of local currencies) 150% Hong Kong Shenzhen Taiwan 140% 130% 120% 110% 100% 90% 80% 70% 60% 07 08 7 8 7 8 07 08 09 07 08 09 06 07 08 00 00 00 00 20 20 20 20 20 20 20 20 20 20 20 .2 .2 2 2
Slide 41: Selectively Open Restaurants in Highly-Profitable Areas
Selectively Open Restaurants in Highly-Profitable Areas Profitability by location type (Hong Kong) Average operating income margin by location type * Busy Satellite City-center Suburban residential residential streets city area area Through experience, we have identified locations suitable for resta
Slide 42: Preparing to Open a Restaurant in Singapore
Preparing to Open a Restaurant in Singapore Plan to open a restaurant in one of the world’s largest shopping malls (ION) in July. 42
Slide 43: Continue to Aim for Early Growth in Overseas Operations
Continue to Aim for Early Growth in Overseas Operations Target sales and number of restaurants in the overseas restaurant business from FY2009 through FY2011 Sales (billion yen) (Restaurants) 15.0 150 13.9 10.0 100 8.4 5.2 Sales 5.0 50 Num ber of res taurants 0.0 0 2009 2010 2011 43
Slide 44: Agriculture and Production Business
Agriculture and Production Business Minoru Moji President & COO, Watami Tezukuri Merchandising Co., Ltd. 44
Slide 45: Summary of Agriculture Business
Summary of Agriculture Business • The farm department (upland farming) moved into the black. Results • Businesses other than upland farming, including livestock, remained in the red. • Expand the area of farms (upland farming) and continue to improve productivity. FY2009 • Bolster sales (of processe
Slide 46: Self-Operated Farms Expanded Geographically and in Terms of Area
Self-Operated Farms Expanded Geographically and in Terms of Area Farm area (ha) Moved into the black 60 60 50 50 40 40 30 30 20 20 10 10 0 0 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 (plan) Acquired an Usuki Farm, (plan) the first self-operated farm Underperforming farms were sold.
Slide 47: Tezukuri Chubo Saitama Hidaka Center Opened
Tezukuri Chubo Saitama Hidaka Center Opened Hidaka Center way Saitama xpress In ter -City E olitan Koshigaya Opened on Metrop Ibaraki Center Tohoku ay Expres March 29, 2002 y Tsurugashima jct. s wa Ka es pr ne sw Ex tsu io d n ct ne ba n Oume exit Jo Ex se pe Tokyo Gaikaku pr O Expressway Hinode exi
Slide 48: Strategies for the Nursing Care Business
Strategies for the Nursing Care Business Kuniaki Shimizu President & COO, Watami no Kaigo Co., Ltd. 48
Slide 49: Summary of nursing care business strategies
Summary of nursing care business strategies Results Sales totaled 14.7 billion yen and ordinary income reached 1.6 billion yen (up 45% year on year) in fiscal 2008. Steady sales and income growth was achieved with the opening of six new facilities and an improvement in the occupancy rate for existin
Slide 50: Sustained sales and income growth is forecast for the next fiscal year
Sustained sales and income growth is forecast for the next fiscal year. Changes in sales and ordinary income for the nursing care business from fiscal 2007 to fiscal 2009 * (Million yen) Sales Ordinary income Ordinary income Sales (Million yen) FY2009 Annual growth rate FY2007 FY2008 08-09 (forecast
Slide 51: The occupancy rate remained steady
The occupancy rate remained steady. Changes in the occupancy rate at existing facilities (*) 100.0 90.0 94.0% as of April 30, 2009 80.0 70.0 60.0 Mar. 2006 Jun. Sep. Dec. Mar. 2007 Jun. Sep. Dec. Mar. 2008 Jun. Sep. Dec. Mar. 2009 * Existing facilities: facilities opened one year ago or earlier/occu
Slide 52: The occupancy rate remained high for all types of homes
The occupancy rate remained high for all types of homes. Occupancy rate at existing facilities* The Theoccupancy occupancyraterateimproved improvedwith withthe the successful successfuloperation operationofofhomes homesinherited inherited through throughbusiness businesstransfers transfers(an (anocc
Slide 53: Opening of new facilities
Opening of new facilities Occupancy was strong for facilities opened since January 2009. Coming Comingsoon! soon! Second facility in the Isehara (50 beds) Kitakamakura (98 beds) Kansai area Scheduled to open in Opened January 5 Opened April 1 the first half Occupancy rate of 82% More than 65 occupan
Slide 54: New facility opening and sales plan for fiscal 2009 to fiscal 2011
New facility opening and sales plan for fiscal 2009 to fiscal 2011 - Plan to increase the number of facilities by 11 and capacity by 850 persons (up 31% year on year) in fiscal 2009 - Plan to open at least 20 new facilities a year in fiscal 2010 and fiscal 2011 (rate of annual increase at 30%) Numbe
Slide 55: Forecast total volume control in the Tokyo metropolitan area
Forecast total volume control in the Tokyo metropolitan area Capacity results and plan for mixed-type specified - Severe conditions continued for the facilities in the Tokyo metropolitan area* establishment of specified facilities in the Tokyo metropolitan area from Approximately 26,000 fiscal 2006
Slide 56: Aiming to increase the popularity of homes through better services
Aiming to increase the popularity of homes through better services Meals Providing safe, reliable and high-quality meals by mobilizing the Future improvements collective strength of the Watami Group Focusing on resident satisfaction Comprehensive Promoting the enforcement of four major zeros service
Slide 57: Aiming to deepen nursing care expertise while promoting the four major zeros
Aiming to deepen nursing care expertise while promoting the four major zeros Results for fiscal 2008 (Figures in brackets are results for fiscal 2007.) Total 189 residents 17 residents 25 residents 82 residents 313 (63 residents) (1 resident) (44 residents) (25 residents) residents (133 residents) S
Slide 58: Continuing to hold diverse events
Continuing to hold diverse events - Seek genuine resident satisfaction by combining Company- wide programs with programs based on the needs at individual homes. Doll Festival Festival for enjoying cool of the summer evening Dumpling store Matsutake mushroom festival 58
Slide 59: Promoting the brand
Promoting the brand Seek to establish and promote the Watami no Kaigo brand with regular public promotions throughout the year 59
Slide 60: Strategies for the Box Lunch Home-Delivery Business
Strategies for the Box Lunch Home-Delivery Business Mitsuhiro Yoshida President & COO, Watami Takushoku Co., Ltd. 60
Slide 61: Summary of fiscal 2008 results for the box lunch home-delivery business
Summary of fiscal 2008 results for the box lunch home-delivery business Results Sales totaled 8.5 billion yen and ordinary income amounted to 0.58 billion yen in fiscal 2008. (Internal management figures for March 2008 to February 2009; before amortization of goodwill) Number of customers: approx. 5
Slide 62: Main products: home-delivered box lunches and prepared side dishes
Main products: home-delivered box lunches and prepared side dishes for the elderly Home-delivered box lunches with standard total calories of 500 kilocalories and salt content of three grams or less Prepared side dishes for persons who cook their own rice 62
Slide 63: Corporate identity and company name change in March 2009
Corporate identity and company name change in March 2009 (Previous logo) (New logo) Change to the “Watami Takushoku” logo Mass advertisements implemented in Kyushu and Kanto areas to coincide with the brand change (total circulation of 9 million copies). 63
Slide 64: Issues for the growth of the boxed lunch home-delivery business
Issues for the growth of the boxed lunch home-delivery business - Diversify cooking ingredients suppliers with safety, reliability and quality as premises. (Pursue both cost and quality through the elimination of an excessive adherence to Improvement in Japanese products.) product salability - Pursu
Slide 65: Focus on ensuring competitiveness with improvements in fiscal 2009
Focus on ensuring competitiveness with improvements in fiscal 2009 Boxed lunch home-delivery business Results and targets for sales and ordinary income (*) (Million yen) Sales Ordinary income 12000 800 Sales: ¥9,000 million Sales: ¥8,500 million Ordinary income:¥620 million Ordinary income:¥580 mill
Slide 66: Questions and Answers
Questions and Answers 66
Slide 67: Topics
Topics 67
Slide 68: 23rd Ordinary General Meeting of Shareholders
Topics 23rd Ordinary General Meeting of Shareholders - Saturday, June 20 at the Ryogoku Kokugikan (Schedule) Approximately 7,000 participants are expected to attend, making it the largest in Japan. A number of programs, including a panel discussion on the environment, will be arranged, in addition t
Slide 69: To be the group to collect the most Thank you on the planet
To be the group to collect the most “Thank you” on the planet. 69