Fast Retailing Co., Ltd. · TSE:9983
Fast Retailing — Q3 FY2021 Earnings Presentation
29 slides from Fast Retailing's earnings presentation, Jul 15, 2021
Slide 1: Fast Retailing FY2021 Q3 results presentation
I am Takeshi Okazaki, Group Senior Executive Officer and CFO at Fast Retailing. Today, I would like to run through our consolidated business performance for the third quarter of FY2021 and our estimates for the full business year through to the end of August 2021.
Slide 2: Contents
\ ST RETAILING Contents I. FY2021 3Q Business Results P3~P21 ll. Estimates for FY2021 P22~ P26 lll. Reference P27~P29 Disclosure of Corporate Performance Following the Group’s adoption of International Financial Reporting Standards (IFRS) from the year ending August 31, 2014, all data in this docume
Slide 3: Third quarter FY2021 consolidated results overview
In the third quarter of FY2021, or the three months from March to May 2021, Fast Retailing Group revenue increased 47.2% year on year to ¥495.2 billion. Business profit, which is a good indicator of fundamental business profitability, increased by a significant ¥5.2 billion year on year to ¥63.4 bil
Slide 4: Consolidated results for the nine months through May 2021
I would first like to explain the key points on our consolidated balance sheet for the nine months through May 2021. Consolidated revenue increased by ¥153.1 billion to ¥1.6980 trillion in the first nine months of FY2021 after revenue rose by ¥76.2 billion at UNIQLO Japan, ¥66.0 billion at UNIQLO In
Slide 5: Finance income/costs and profit
Moving on to finance income/costs, we reported a net finance income of ¥17.7 billion in the first nine months of FY2021. This consisted primarily of a ¥19.5 billion foreign-exchange gain on the value of our foreign-currency denominated assets in yen terms. As a result, profit before income taxes inc
Slide 6: Third-quarter performance by Group operation
Slide 6 displays the breakdown of performance over the third quarter by Group operation.
Slide 7: UNIQLO Japan third-quarter performance
To give you more detail, I would like to start by explaining UNIQLO Japan’s third-quarter performance. That segment reported large increases in both revenue and profit over the three-month period, with revenue rising 35.0% year on year to ¥182.5 billion and operating profit expanding by 187.3% to ¥2
Slide 8: UNIQLO Japan same-store and e-commerce sales
UNIQLO Japan third-quarter same-stores sales rose by a considerable 31.1% year on year. On the product front, Uniqlo U T-shirts, KANDO pants, and other Summer items as well as loungewear, ultra stretch active pants and other clothing designed to be worn inside and outside the home all sold well, con
Slide 9: UNIQLO Japan gross profit margin
Next, UNIQLO Japan gross profit margin contracted by 0.5 point year on year to 51.7% in the third quarter from March to May 2021 but that result was better than we had expected. The reason why the gross profit margin came in above plan was because of improved discounting rates following our decision
Slide 10: UNIQLO Japan SG&A ratio
UNIQLO Japan’s third-quarter SG&A ratio improved by 6.1 points year on year to 38.4% with personnel, depreciation, distribution, and other expense ratios improving greatly on the back of the large third-quarter rise in revenue. When compared to our latest plan, we were able to reduce SG&A expenses m
Slide 11: UNIQLO International third-quarter performance
Let me now move on to talk about UNIQLO International performance in the third quarter of FY2021. UNIQLO International revenue increased by 64.6% to ¥217.7 billion, and the segment moved back into the black following last year’s operating loss by reporting an operating profit of ¥30.7 billion. Perfo
Slide 12: Greater China region performance
The Greater China region reported considerable rises in both third-quarter revenue and profit. However, the performance from the Mainland China market fell short of our most recent plan, resulting in a lower-than- anticipated performance from the Greater China region as a whole. Looking in more deta
Slide 13: UNIQLO South Korea
Moving on to UNIQLO South Korea, where operating profit moved back into the black in the third quarter. South Korea suffered a heavy Covid impact and a consequent significant worsening in business performance last year but, this year, operating profit moved back into the black as Covid restrictions
Slide 14: S/SE Asia & Oceania performance
UNIQLO South Asia, Southeast Asia & Oceania (Southeast Asia, Australia, and India) reported a sharp increase in revenue and a return to the black in the third quarter thanks to fewer temporary store closures compared to the previous year. E-commerce sales rose by approximately 20% year on year, cont
Slide 15: UNIQLO North America
Next, let’s look at North America, which reported a large increase in revenue and much smaller losses in the third quarter. This performance was stronger than expected. While performance worsened dramatically last year as nearly all stores were temporarily closed due to COVID-19, this year, stores c
Slide 16: UNIQLO Europe
Turning finally to Europe, which reported a sharp rise in revenue and a lower- than-expected operating loss in the third quarter. This performance was being compared to a weak period in the previous year. In addition, e-commerce sales proved strong, doubling yet again even compared to the considerab
Slide 17: GU third-quarter performance
I would now like to move on to discuss third-quarter performance at our GU operation. GU reported large increases in both revenue and profit in the third quarter with revenue climbing 23.5% year on year to ¥68.1 billion and operating profit expanding by 81.5% to ¥8.4 billion. Same-store sales rose 1
Slide 18: Global Brands performance
Let me turn now to our fourth and final business segment, Global Brands, which reported a 96.4% rise in third-quarter revenue to ¥26.0 billion and a large contraction in operating losses from ¥6.7 billion in the third-quarter of FY2020 to ¥0.7 billion in the third quarter of FY2021. While Global Bra
Slide 19: Balance sheet at end of May 2021
Next, I would like to take you through our balance sheet as it stood at the end of May 2021. Compared to the end of May 2020, total assets increased by ¥154.5 billion to ¥2.4922 trillion. Total liabilities increased by ¥4.5 billion to ¥1.3326 trillion, and total equity increased by ¥150.0 billion to
Slide 20: Current assets: cash and inventories
Let me first explain the main factors underlying the ¥94.5 billion increase in current assets. Cash and cash equivalents increased by ¥131.4 billion year on year to ¥1.1771 trillion at the end of May 2021 on the back of higher operating cash flow primarily from UNIQLO operations. In terms of invento
Slide 21: Cash flow for the first nine months
Looking at our cash flow position for the first nine months of FY2021. Over that period, we reported a net cash inflow of ¥367.2 billion from operating activities, while cash used in investing activities totaled ¥65.7 billion, and cash used in financing activities totaled ¥262.7 billion. As a result
Slide 22: Full-year FY2021 business forecasts
I would now like to explain our business forecasts for the full year to August 31, 2021. We predict full-year consolidated revenue of ¥2.1500 trillion (+7.0%), consolidated operating profit of ¥245.0 billion (+64.0%), and profit attributable to owners of the parent of ¥165.0 billion (+82.6%). Those
Slide 23: FY2021 estimates: UNIQLO International
I will now break down our FY2021 estimates by Group operation. Looking first at UNIQLO International, we expect this segment will report large rises in both full-year revenue and profit. While operating profit came in roughly in line with our latest plan in the third quarter, we decided to revise do
Slide 24: FY2021 estimates: S/SE Asia, Oceania and North America
Moving onto S/SE Asia & Oceania, we forecast large rises in both revenue and profit for the full business year through August 2021. However, given the more recent rise in Covid infections in nearly all SE Asian markets and consequent slowdown in sales, we are now expecting fourth-quarter revenue and
Slide 25: FY2021 estimates: UNIQLO Japan and GU
Let me now give you some more detailed forecasts for UNIQLO Japan, where we expect to see higher revenue and a large increase in profit in FY2021. That said, we have revised down our full-year forecasts for this segment in view of the lower-than-anticipated third-quarter performance. We are predicti
Slide 26: FY2021 estimates: Global Brands
Finally, we expect Global Brands will generate a slight rise in revenue and a smaller operating loss in FY2021. In terms of individual labels, we expect revenue from our Theory operation to rise and operating profit to move back into the black in FY2021. As for our Comptoir des Cotonniers operation,
Slide 27: Reference: Group Company Store Numbers
=Reference: Group Company Store Numbers [Unis: Stores} UNIQLO Operations Franchise stores UNIQLO International UNIQLO Japan [love stores Mainland China 12) Hong Kong Taiwan Korea is Singapore Malaysia Thailand Indonesia Austraia Vietnam india USA Canada UK France Russia ‘Germany © lololololololololo
Slide 28: Reference: Foreign Exchange Rates
= Reference: Foreign Exchange Rates FAST RETAILING Exchange Rates Used in Consolidated Accounts Yen 1USD | 1EUR | 1GBP | 1RMB |100KRW FY20203Q 9-month average to May. 2020 108.5 119.6 137.6 15.4 9.1 FY20213Q 9-month average to May. 2021 106.0 126.7 142.9 16.1 9.4 FY2020 12-month average to Aug. 2020
Slide 29: Reference: Capex, Depreciation
= Reference: Capex, Depreciation FAST RETAILING Capex and Depreciation Billions of Yen Capex “te [me | | Sma Mae | to FY2020 3Q 9 months 12.2 17.4 8.1 1.7 24.0 63.7 131.1 FY2021 3Q9 months 11.9 27.5 3.2 1.3 34.9 79.0 132.5 FY2020 Full-year 12 months 17.8 23.5 8.5 2.4 30.4 82.7 177.8 FY2021(E) Full-y