Duskin Co., Ltd. · TSE:4665
Duskin — H1 FY2019 Earnings Presentation
52 slides from Duskin's earnings presentation, Nov 20, 2019
Slide 1: Six-month Period Ended Sept. 30, 2019 Financial Report
Six-month Period Ended Sept. 30, 2019 Financial Report Duskin Co., Ltd. November 20, 2019
Slide 2: Cautionary Statements
Cautionary Statements ■ These materials contain forward-looking statements concerning forecasts, goals, strategies, and other matters related to the Company, including its consolidated subsidiaries. ■ These forward-looking statements are based on projections and assumptions made by Duskin Group in l
Slide 3: Table of Contents
Table of Contents ■ Financial Summary Consolidated Financial Results ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 6 Sales ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 7 Operating Income ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 9 Ordinary Income ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 11 Net Income ・・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
Slide 4: Table of Contents
Table of Contents ■ Returns to Shareholders Dividends ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 34 Share Repurchase ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 35 ■ Medium-Term Management Policy 2018 Medium-Term Management Policy 2018 (Basic Policy and Financial Goals) ・・・・・・・・・・・・ 37 Medium-Term Management Po
Slide 5: Financial Summary
Six-month Period Ended Sept. 30, 2019 Financial Summary
Slide 6: Consolidated Financial Results
Financial Summary Consolidated Financial Results Consolidated Results (millions of yen) FY2018 FY2019 Change Reference 1st half ended 1st half ended FY2018 ended Sept. 30, 2018 Sept. 30, 2019 % Mar. 31, 2019 Sales 78,351 79,157 +805 +1.0 158,699 Operating income 4,378 3,698 -679 -15.5 7,954 (Operati
Slide 7: Sales (1): Consolidated Sales
Financial Summary Sales (1) Consolidated Sales 2nd half 1st half (millions of yen) 200,000 165,203 161,880 162,000 161,031 158,699 [Forecast] 150,000 82,673 80,789 80,764 80,347 82,842 [Forecast] 100,000 50,000 82,530 81,091 80,266 78,351 79,157 0 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020 7
Slide 8: Sales (2): Consolidated Sales 79,157 million yen
Financial Summary Sales (2) Consolidated Sales 79,157 million yen +805 million yen (+1.0%) FY2018 1st half FY2019 1st half Change (millions of yen) ended Sept. 30, ended Sept. 30, 2018 2019 % Sales to outside customers 55,120 55,644 +523 +0.9 Direct Selling Group Intersegment sales and transfers 361
Slide 9: Operating Income (1)
Financial Summary Operating Income (1) Operating margin Consolidated Operating Income 2nd half (millions of yen) 1st half 12,000 4.1% 5.0% [Forecast] 10,000 3.7% 4.7% 3.3% 7,954 7,557 6,700 8,000 [Forecast] 6,069 5,372 6,000 3,211 3,576 3,001 (4.0) (4.5) (3.6) 3,555 [Forecast] 4,000 2,690 (4.4) (3.3
Slide 10: Operating Income (2)
Financial Summary Operating Income (2) Consolidated Operating Income 3,698 million yen -679 million yen (-15.5%) Major factors Direct Selling Group : Higher cost ratio, increase in personnel costs attributable to personnel transfers from other segments Food Group : Higher gross profit due to increas
Slide 11: Ordinary Income (1)
Financial Summary Ordinary Income (1) Ordinary income margin Consolidated Ordinary Income 2nd half 1st half (millions of yen) 12,000 5.6% 6.3% 5.0% 10,011 [Forecast] 4.7% 10,000 8,978 4.1% 8,100 [Forecast] 7,554 8,000 6,707 3,737 4,739 (4.6) (5.9) 3,984 6,000 (4.8) 3,275 4,148 (4.0) [Forecast] (5.1)
Slide 12: Ordinary Income (2)
Financial Summary Ordinary Income (2) Consolidated Ordinary Income 4,115 million yen -1,157 million yen (-21.9%) Major factors 1) Operating income -700 million yen 2) Non-operating income -500 million yen ➢Share of loss of entities accounted -200 million yen for using equity method (NAC, Duskin Sout
Slide 13: Net Income (1)
Financial Summary Net Income (1) Net income margin Consolidated Net Income 2nd half (millions of yen) 1st half 8,000 3.8% 3.5% 3.3% [Forecast] 2.7% 1.8% 5,700 5,984 [Forecast] 6,000 5,324 4,318 2,916 1,753 2,590 (3.2) (3.5) (2.2) 4,000 [Forecast] 2,983 2,212 1,020 (2.7) (1.2) 3,570 (4.4) 3,394 2,000
Slide 14: Net Income (2)
Financial Summary Net Income (2) Consolidated Net Income 2,783 million yen -610 million yen (-18.0%) Major factors 1) Ordinary income -1,200 million yen 2) Extraordinary income +200 million yen ➢ Increase in gain on sales of +200 million yen investment securities ➢Increase in loss on valuation of -1
Slide 15: Consolidated Balance Sheet
Financial Summary Consolidated Balance Sheet Consolidated Balance Sheet (millions of yen) As of Mar. 31, 2019 As of Sept. 30, 2019 Change Major factors Cash and deposits -1,100 Notes and accounts receivable - trade +2,100 Current assets 63,948 62,120 -1,827 Securities -4,400 Merchandise and finished
Slide 16: Summary by Business Segment
DUSKIN BUODSREECS Summary by Business Segment
Slide 17: Highlights by Business Segment
Segment Information Highlights by Business Segment (millions of yen) FY2018 1st half FY2019 1st half FY2018 Change ended Sept. 30, 2018 ended Sept. 30, 2019 Operating Operating Operating margin margin margin % Sales 111,476 － 55,481 － 55,947 － +465 +0.8% Direct Selling Group Operating -11.4% 13,406
Slide 18: Direct Selling Group (1)
Summary of Core Businesses (1) Direct Selling Group (1) Sales Operating Income Operating margin 2nd half 2nd half (millions of yen) 1st half (millions of yen) 24,000 1st half 140,000 114,900 111,476 [Forecast] 10.9% 120,000 20,000 [Forecast] 12.0% 100,000 16,000 13,406 58,952 12,500 [Forecast] 80,00
Slide 19: Direct Selling Group (2): Residential market
Summary of Core Businesses (1) Direct Selling Group (2) Change (millions of yen) FY2018 2Q FY2019 2Q % Sales Sales to outside customers 55,120 55,644 +523 +0.9 Intersegment sales 361 303 -57 -15.9 Total 55,481 55,947 +465 +0.8 ● Sales of dust control products slightly declined. ➢ Dust control produc
Slide 20: Direct Selling Group (3): Commercial market
Summary of Core Businesses (1) Direct Selling Group (3) Change (millions of yen) FY2018 2Q FY2019 2Q % Sales Sales to outside customers 55,120 55,644 +523 +0.9 Intersegment sales 361 303 -57 -15.9 Total 55,481 55,947 +465 +0.8 ● Sales of dust control products slightly declined. ➢ Dust control produc
Slide 21: Direct Selling Group (4)
Summary of Core Businesses (1) Direct Selling Group (4) Change Operating Income (millions of yen) FY2018 2Q FY2019 2Q % Operating income 7,203 6,383 -820 -11.4 ➢ Gross profit growth due to increased sales +200 million yen ➢ Decline in gross profit resulting from higher cost ratio -300 million yen ●
Slide 22: Food Group (1)
Summary of Core Businesses (2) Food Group (1) Sales Operating Income Operating margin 2nd half 2nd half (millions of yen) 1st half (millions of yen) 1st half 50,000 700 35,300 600 35,426 0.9% 0.8% [Forecast] 40,000 [Forecast] 500 300 [Forecast] 400 320 30,000 18,063 18,423 300 411 [Forecast] 4 (2.4)
Slide 23: Food Group (2) Sales
Summary of Core Businesses (2) Food Group (2) Change (millions of yen) FY2018 2Q FY2019 2Q % Sales Sales to outside customers 16,998 17,231 +232 +1.4 Intersegment sales 4 5 +0 +11.5 Total 17,003 17,236 +233 +1.4 ● Mister Donut ➢ Total customer-level sales +4.4% (1Q: +3.4%, 2Q: +5.5%) ➢ Customer-leve
Slide 24: Food Group (3)
Summary of Core Businesses (2) Food Group (3) Change Operating Income (millions of yen) FY2018 2Q FY2019 2Q % Operating income 4 411 +406 +8,782.8 ➢ Gross profit growth due to increased sales +100 million yen ➢ Gross profit growth resulting from improved cost ratio +150 million yen ➢ Higher profit a
Slide 25: Other Businesses & Corporate
Summary of Core Businesses (3) Other Businesses & Corporate Change (millions of yen) FY2018 2Q FY2019 2Q % Other Businesses Sales to outside customers Intersegment sales 6,232 1,181 6,281 997 +49 -184 +0.8 -15.6 Total 7,414 7,278 -135 -1.8 Operating income 261 239 -22 -8.5 ● Duskin Kyoeki operating
Slide 26: Other Businesses (Overseas Businesses)
Summary of Core Businesses (3) Other Businesses (Overseas Businesses) Overseas Businesses ➢ Customer-level sales Jan. - June Jan. - June Change 2018 2019 % Taiwan 593 632 +39 +6.6％ (millions of NTD) Dust Control Shanghai 13 18 +4 +32.8％ Care Services (millions of CNY) South Korea 648 784 +136 +21.0％
Slide 27: Forecasts and Actual Results
Forecasts and Actual Results
Slide 28: FY2019 First Half Forecasts and Actual Results
Forecast & Actual FY2019 First Half Forecasts and Actual Results Note: Change from the forecast announced on May 15, 2019 Consolidated (millions of yen) Sales Operating income Ordinary income Net income Forecast (May 15) 79,700 3,500 3,900 2,500 Actual 79,157 3,698 4,115 2,783 Difference (%) -542 (-
Slide 29: FY2019 Forecasts
DUSKIN BUO FY 2019 Forecasts
Slide 30: FY2019 Forecasts (1)
Forecasts FY2019 Forecasts (1) Consolidated Note: No change is made to the FY2019 forecasts announced on May 15, 2019. (millions of yen) Sales Operating income Ordinary income Net income FY2018 actual 158,699 7,954 10,011 5,984 FY2019 forecast 162,000 6,700 8,100 5,700 Difference from FY2018 actual
Slide 31: FY2019 Forecasts (2)
Forecasts FY2019 Forecasts (2) By Business Segment - 2nd Half Comparison with the same period of the previous year (millions of yen) FY2019 FY2018 - 2nd half FY2019 - 2nd half forecast actual forecast Change (Full-year forecast - 1st half actual) Operating Operating Operating % margin margin margin
Slide 32: FY2019 Forecasts (3)
Forecasts FY2019 Forecasts (3) By Business Segment - 2nd Half Comparison with the business plan (millions of yen) FY2019 FY2019 - 2nd half FY2019 - 2nd half forecast plan forecast Change (Full-year forecast - 1st half actual) Operating Operating Operating % margin margin margin Direct Selling Sales
Slide 33: Returns to Shareholders
DUSKIN BUODSREECS Returns to Shareholders
Slide 34: Dividends
Returns to Shareholders Dividends Dividends per share (Actual & Forecasts) FY2019 FY2017 FY2018 (Yen) (forecast) End of 2nd quarter 20 30 24 Year end 20 20 32 Total (annual) 40 50 56 Total dividend (millions of yen) 2,137 2,643 2,858 Consolidated dividend ratio (%) 40.1 44.5 50.2 Consolidated divide
Slide 35: Share Repurchase
Returns to Shareholders Share Repurchase Announced on February 12, 2019 Period: February 14, 2019 to July 31, 2019 Maximum number of shares to purchase: 1,500,000 Maximum amount of shares to purchase: 4,000 million yen No. of shares purchased Amount FY2018 493,700 1,324 million yen FY2019 (1st half)
Slide 36: Medium-Term Management Policy 2018
Medium-Term Management Policy 2018
Slide 37: Medium-Term Management Policy 2018: Basic Policy and Goals
Medium-Term Management Policy 2018 New Overseas Basic Policy businesses business M&A development New growth Direct Develop existing Food Selling Group businesses Group Strengthen the corporate structure Structural Corporate reform governance Goals (FY2020) (millions of yen) Consolidated sales 165,00
Slide 38: Develop Existing Businesses: Residential Market
Medium-Term Management Policy 2018 Develop existing businesses Residential market (Direct Selling Group) From a household service provider to a lifestyle partner DDuet Foster closer cooperation between customer touchpoints and channels and establish a structure to serve customers throughout every st
Slide 39: Develop Existing Businesses: Commercial Market
Medium-Term Management Policy 2018 Develop existing businesses Commercial market (Direct Selling Group) From a supporter to a business partner in sanitation management Area of focus: the sanitation management market Train and increase Hygiene Masters 1,406 as of March 31, 2019 1,588 as of September
Slide 40: Duskin Laboratory Center for Co-creation
Medium-Term Management Policy 2018 Develop existing businesses Center for co-creation (Direct Selling Group) Duskin Laboratory (opened in May 2019) A place to create Daily Life Fine-Tuning experiences beyond the boundaries of consumers, franchisees, and employees 40
Slide 41: Mister Donut Shop Opening and Renovation
Medium-Term Management Policy 2018 Develop existing businesses (Food Group) Mister Donut Shop opening and renovation 1) Existing markets (existing shops) Renovated and relocated existing shops in response to changing environments 2) Untapped markets (new shop openings) Accelerated shop openings with
Slide 42: Mister Donut Product Strategies
Medium-Term Management Policy 2018 Develop existing businesses Mister Donut (Food Group) Product strategies: MISDO Meets and MISDO GOHAN MISDO Meets, products developed with companies Enhance meal sets for with leading techniques customer convenience and high-quality materials Gion Tsujiri Product c
Slide 43: New Growth: Duskin Wash
Medium-Term Management Policy 2018 New growth New business Duskin Wash (laundry service) ・ Full service Washing, drying, and folding ・ Self service Flat-rate use (membership system) (laundry machines) or one-time use ・ Self service (DIY equipment rental) and workshops A space where users can clean a
Slide 44: Corporate Governance
Medium-Term Management Policy 2018 Strengthen the Corporate governance corporate structure ■ Improve corporate governance ➢Directors Evaluation Committee was established as an advisory body for the Board of Directors to consider the appointment and remuneration of directors. The Committee consists o
Slide 45: Capital Policy
Medium-Term Management Policy 2018 Strengthen the Capital policy corporate structure ◼ Achieve sustainable growth and medium- to long- term improvement in corporate value, balancing three elements: higher capital efficiency, maintenance of a solid financial foundation, and consistent returns to shar
Slide 46: Creating Shared Value (CSV) Initiatives
Creating Shared Value (CSV) Initiatives Our society faces many complex issues, for example, those caused by an aging Sustainable population and global warming. To Development of Society tackle these issues, Duskin aims to Eco-Friendliness Duskin’s create shared value (CSV) and achieve a society in w
Slide 47: Contribution to SDGs
Contribution to SDGs Focused CSV areas and policy Social value and contribution to SDGs Franchise network ■ Ease the burden of household chores Provide solutions to contribute to sustainable and home cleaning development of local communities while ■ Support seniors living at home and meeting diversi
Slide 48: Reference
DUSKIN BUODSREECS Reference
Slide 49: Financial Summary – Non-consolidated Results
Reference 1 Financial Summary – Non-consolidated Results Non-consolidated (millions of yen) FY2018 1st half FY2019 1st half Change Reference ended Sept. 30, ended Sept. 30, FY2018 ended % Mar. 31, 2019 2018 2019 Sales 63,829 63,298 -530 -0.8 129,592 Operating income 2,987 2,252 -734 -24.6 5,254 (Ope
Slide 50: Business Summary by Segment
Reference 2 Business Summary by Segment Sales include rental sales, sales of goods and services, royalty (no royalty Direct Selling Group charged for periodic rental businesses), and sales at company-owned units. Direct selling Home Service (Residential Market) Business Service (Commercial Market) R
Slide 51: Customer-Level Sales (CLS)
Reference 3 Customer-Level Sales (CLS) *1 Sales of overseas businesses are the total sales from January to June. CLS by Business (millions of yen) Increase/Decrease FY2018 2Q FY2019 2Q Change % Direct Selling Group 135,446 137,423 +1,976 +1.5% Dust Control (Domestic) Home Service (Residential) 44,41
Slide 52: Recycle-Oriented Business Model at Dust Control Business
Reference 4 Recycle-Oriented Business Model at Dust Control Business Based on the idea to fully recycle the products Rental of mops and mats through repeated use until the end of their useable life Rental Franchisees pay deposit. (Franchisees record the sales.) (Delivery = Rental) Production & Logis