Nagaileben Co., Ltd. · TSE:7447

Nagaileben — H1 FY2019 Earnings Presentation

50 slides from Nagaileben's earnings presentation, April 2019

  1. Slide 1: Analyst Guide First-half FY2019

    ANALYST GUIDE First-half FY2019 April 2019 (Listed on the 1st Section of the Tokyo Stock Exchange; Code 7447) <Contact for information on this material: Mr. Tokue, Administration Headquarters (+81-3-5289-8200)>

  2. Slide 2: Overview of First-half FY2019

    Overview of First-half FY2019 1 Sales & Income -Net Sales: ¥7,233 m -Operating Income: ¥1,797 m 2 The Change of Business Environment -Market Condition: Stable state continued. -Production Condition (Overseas) The processing costs increased. (In Japan) The logistics costs increased. 3 Unusual Events

  3. Slide 3: Agenda

    Agenda I About “NAGAILEBEN” II Market Environment III Financial Review of First-half FY2019 and Forecast for FY2019 IV Management Goals V Rewarding shareholder-focused policies Copyrights Nagaileben Co.,Ltd. All rights reserved. 2

  4. Slide 4: I About Nagaileben

    I About “NAGAILEBEN” és @ NAGAILEBEN

  5. Slide 5: Outline

    Outline Over 100 years in business (Established in 1915) 1 Competitive position in medical clothing market -Approximately 60% market share -Integrated Production System in domestic medical clothing Planning, Manufacturing and Marketing - The number of shipments is -Competitive product such as extens

  6. Slide 6: Outline

    Outline Highly profitability 47.0% 3 Change of Gross Profit to Sales (2018) Strong balance sheet 50 (%) 45 33.1% - Realization of high profitability 45.3% with radical pursuit of efficiency 40 28.6% (1990) -Gross profit to sales 47.0% (as of FY2018) (2010) 35 (1980) 39.7% -Capital-to-asset ratio 89.

  7. Slide 7: CSR/ESG

    CSR/ESG What’s NEW Respect for Customers Regional Contribution Beauty Lecture for Nurse Rental of Historic Nurse Wear Practical course in makeup and manner for nurses in Archiving historic nurse wear. medical fields. Collaboration with Shiseido. Free rental to medical institutions. Social Responsibi

  8. Slide 8: II Market Environment

    II Market Environment és @ NAGAILEBEN

  9. Slide 9: Market Environment Topics

    Market Environment Topics Market condition is unstable -Drug Price will be decreased (effective Oct. 2019). -Consumption tax rate will be raised (effective Oct. 2019). -The number of Nursing Staff and Care workers is increasing gently. Rising manufacturing cost -Distribution cost are increasing, due

  10. Slide 10: Changes and prospects for medical and care service systems

    Changes and prospects for medical and care service systems Medical System Care Service System Medical Service Law, Health and Medical Medical treatment fees Care Service Law, Nursing Care Insurance, etc. Nursing care fees Service Law for the Aged, Medical Insurance, etc Total market: +3.0% Enforceme

  11. Slide 11: Revisions to medical treatment and care Service fees

    Revisions to medical treatment and care Service fees （％） 5 +5.0 +4.8 Medical(Service) Medical(Drug) Care 4 +3.4 +3.0 3 2 +1.9 +1.5 +1.6 +1.4 +1.2 +0.7 1 +0.4 +0.6 +0.5 +0.6+0.5 ▲1.3 +0.0 ▲1.3 0 -1 ▲0.5 ▲ 0.6 ▲ 1.0 ▲ 1.2 ▲ 1.4 ▲ 1.4 ▲ 1.4 ▲ 1.3 ▲ 1.5 -2 ▲ 1.7 ▲ 1.8 ▲ 2.0 ▲1.9 ▲ 2.4 ▲2.3 ▲2.3 -3 ▲ 2.6

  12. Slide 12: The number of Nursing Staff and Care workers

    The number of Nursing Staff and Care workers (10,000 persons) 250 Nursing Staff Care Workers 200 150 183 100 183 166 171177 160 163 154 147 163 151 140 157 141 129 133 150 123 137 143 114 123 143 117 131 109 120 50 119 127 96 85 72 64 55 0 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14

  13. Slide 13: Supply and Estimated Future Need

    Supply and Estimated Future Need (10,000 persons) 300 Nursing Staff Care Workers 253 250 forecast(maximum) forecast(minimum) 206 200 Actual 150 253 100 196 166 171 50 0 2016 2025 2016 2025 Actual record: Japanese Nursing Associations’ statistical data Actual record: Research of Long-Term Care Servic

  14. Slide 14: III Financial Review of First-half FY2019 and Forecast for FY2019

    II Financial Review of First-half FY2019 and Forecast for FY2019 13

  15. Slide 15: Management Tasks and Status

    Management Tasks and Status • Capture clusters of needs Marketing strategy to in the healthcare wear market increase sales • Increase peripheral business in products for patients and surgery • Cultivate overseas markets - Introduce our business model into East Asia from Japan • Scrap 2 old factories

  16. Slide 16: Financial Review of First-half FY2019 and Forecast for FY2019

    Financial Review of First-half FY2019 and Forecast for FY2019 First-half FY2019 FY2019 (millions of yen,%) (Results) % Change (Forecast) % Change Net sales 7,233 -2.5 17,600 +2.7 Gross profit 3,373 -2.8 8,210 +2.0 Sales, general, and administrative expenses 1,576 +7.7 2,968 +6.5 Operating income 1,7

  17. Slide 17: Financial Review: Gross Profit

    Financial Review of First-half FY2019 and Forecast for FY2019 First-half FY2019 FY2019 (millions of yen,%) (Results) % Change (Forecast) % Change Net sales 7,233 -2.5 17,600 +2.7 Gross profit 3,373 -2.8 8,210 +2.0 Sales, general, and administrative expenses 1,576 +7.7 2,968 +6.5 Operating income 1,7

  18. Slide 18: Financial Review: SG&A and Capital Expenditure

    Financial Review of First-half FY2019 and Forecast for FY2019 First-half FY2019 FY2019 (millions of yen,%) (Results) % Change (Forecast) % Change Net sales 7,233 -2.5 17,600 +2.7 Gross profit 3,373 -2.8 8,210 +2.0 Sales, general, and administrative expenses 1,576 +7.7 2,968 +6.5 Operating income 1,7

  19. Slide 19: The Impact of Unusual Events in this term

    The Impact of Unusual Events in this term 1 Establishing New Sewing Factory Impact on Gross Profit -Increase of depreciation(¥30m) *First-half:¥15m -Occurrence of real estate acquisition tax(¥14m) *Occurred in Feb. 2019. Only once in this term. 2 Abolishing Directors' retirement allowances Introduci

  20. Slide 20: Financial Highlights <Balance Sheet>

    Financial Highlights <Balance Sheet> Major assets (¥ million %) Title Result Change Result Change% [Major changes from the previous fiscal year] Cash on hand at banks 21,759 +1,180 +5.7 Notes and accounts receivable 5,008 -173 -3.4 Cash and cash equivalents up ¥ 1,180 million (including electronical

  21. Slide 21: Segments by Item

    Segments by Item Healthcare wear Patient wear Shoes Doctors' wear Utility wear Surgery wear Copyrights Nagaileben Co.,Ltd. All rights reserved. 20

  22. Slide 22: Sales by Item

    Sales by Item FY2018 FY2019 Doctors' 15.5% Utility Year-on-year change First-half Full First-half Full(E) 2.6% Total sales +3.8% +0.7% -2.5% +2.7% Patient 12.3% Healthcare wear +3.8% +0.3% -3.5% +2.1% Doctors' wear +1.6% -0.4% -0.8% +2.2% Surgery Utility wear -6.1% -10.5% -10.9% -9.8% 9.7% Patient w

  23. Slide 23: Sales by Region

    Sales by Region Central Japan FY2018 FY2019 9.8% West Japan Year-on-year change First-half Full First-half Full(E) 36.9% Total sales +3.8% +0.7% -2.5% +2.7% East Japan +5.6% +0.6% -1.7% +2.3% Central Japan +7.1% +2.2% -13.0% +0.3% West Japan -0.5% +0.0% +0.3% +3.8% 1.3% Overseas +26.8% +16.4% -20.4%

  24. Slide 24: Product Strategy

    Product Strategy Sales by Product Year-on-year change FY2018 FY2019E (¥ million) 20,000 Total sales +0.7% +2.7% 18,000 High-End products +6.5% +7.9% 16,000 High-End High Value-Added 14,000 +1.7% +4.7% products 12,000 High Value- Added Value-Added 10,000 ▲1.4% +0.1% 8,000 Value-Added products 6,000 M

  25. Slide 25: Production Strategy

    Production Strategy Production(Non-Consolidated) (¥ million) (%) 10,000 50 Composition FY2018 FY2019E Purchased products Domestic production 49.6% 49.1% 7,500 45 Overseas production Overseas production 49.0% 49.5% Purchased products 1.4% 1.4% 5,000 40 Domestic production 2,500 35 Ratio of overseas p

  26. Slide 26: IV Management Goals

    IV Management Goals @ NAGAILEBEN 25

  27. Slide 27: Business Direction

    Business Direction Sales Strategy -Increase peripheral business in products for Patients and Surgery. -Gain share in West Japan. -Develop and Sale of High-End and High Value-Added products. -Cultivate Overseas Markets. Profit Strategy -Driving the strategy of Higher Quality and Value-Added products.

  28. Slide 28: Sales Strategy

    Sales Strategy FY2015 FY2018 FY2021E (3 terms ago) (Previous term) (3 terms later) net sales ¥16,150 million ¥17,144 million ¥18,600 million Healthcare 15% Doctors' 58% 56% 58% 16% 16% 2% Utility 4% 3% Item Patient Patient 9% 11% 14% Surgery 10% Surgery 3% 10% Others 2% 12% 11% 1% Central Japan 11%

  29. Slide 29: Trend of Business Records

    Trend of Business Records (¥ million) (%) 17,500 Net sales (left) 55 15,000 Gross profit to sales (right) 12,500 45 10,000 7,500 5,000 35 2,500 0 25 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19E20E21E (FY) Note: Consolidated

  30. Slide 30: V Rewarding shareholder-focused policies

    V Rewarding shareholder -focused policies 日本ではじめてのナースのための心のコミュニケーションスペース「いとなギャラリー」 29

  31. Slide 31: Reimbursement Policy

    Reimbursement Policy Shareholder-focused policies - Improvement of transparency by proactive disclosure - Interactive communication with investors - Profit reimbursement by high dividends Dividend policy - Basic policy is to continue stable dividend payment with payout ratio of 50% Share buyback - A

  32. Slide 32: The History of Stock Value

    The History of Stock Value BPS EPS DPS （Yen） （Yen） （yen） （yen） （yen） 1,200 ※1 FY2009: Accrued pension fund withdrawal 125 FY2001 532.5 50.8 12.5 payment loss ¥1.04b. A dotted line is when there was not outbreak. FY2002 568.3 48.0 12.5 FY2003 604.0 52.4 15.0 1,100 FY2004 663.0 60.5 30.0 100 FY2005 70

  33. Slide 33: Actual Dividends Paid

    Actual Dividends Paid Total dividend Share buyback Payout ratio Total return ratio （Million yen） （Million yen） （non-c, ％） （non-c, ％） FY2001 475 0 27.6 27.6 FY2002 475 0 29.3 29.3 FY2003 530 1,697 29.7 124.6 FY2004 744 0 36.5 36.5 2004/2/24 Stock split 2-for-1 FY2005 1,117 0 56.9 56.9 FY2006 1,117 0

  34. Slide 34: Management Philosophy

    Management Philosophy Our management philosophy are “Let us help the human life” and “Harmony”. We think that well-balanced growth with human, profit and philanthropy become the responsible corporate. Furthermore, we have our company spirit, “Nagaism”. We continue to specialize in medical / nurse /

  35. Slide 35: Notes on this material

    Notes on this material This material includes forecasts for the future. These forecasts are based on the judgment of the Company's management concerning currently available information. These future projections include assumptions or views based on assumptions, and therefore may be different from th

  36. Slide 36: Data File

    Data File First-half FY2019 (Listed on the 1st Section of the Tokyo Stock Exchange;Code 7447) <Contact for information on this material: Mr. Tokue, Administration Headquarters (+81-3-5289-8200)>

  37. Slide 37: Index

    Index 1 … Sales by Item 2 … Sales by Product 3 … Sales by Region 4 … Rationalization of the Production System and Our Purchasing Strategy (Non-Consolidated) 5 … Statements of Income (Consolidated) 6 … Statements of Income (Non-Consolidated) 7 … Indices (Consolidated) 8 … Indices (Non-Consolidated) 9

  38. Slide 38: 1. Sales by Item

    1. Sales by Item (¥ million) First-half First-half FY 15/8 16/8 17/8 18/8 19/8E 18/8 19/8 Sales 16,150 16,537 17,017 17,144 17,600 7,419 7,233 (¥ million) Healthcare wear 9,429 9,674 9,940 9,974 10,180 4,265 4,116 20,000 Doctors' wear 2,604 2,654 2,681 2,671 2,730 1,092 1,084 Utility wear 670 601 55

  39. Slide 39: 2. Sales by Product

    2. Sales by Product (¥ million) First-half First-half (¥ million) FY 15/8 16/8 17/8 18/8 19/8E 18/8 19/8 20,000 Sales 16,150 16,537 17,017 17,144 17,600 7,419 7,233 High-End products 1,095 1,104 1,191 1,269 1,370 523 540 18,000 High Value-Added products 7,841 8,336 8,612 8,759 9,170 3,864 3,859 Valu

  40. Slide 40: 3. Sales by Region

    3. Sales by Region (¥ million) First-half First-half FY 15/8 16/8 17/8 18/8 19/8E 18/8 19/8 (¥ million) Sales 16,150 16,537 17,017 17,144 17,600 7,419 7,233 20,000 East Japan 8,357 8,539 9,007 9,065 9,270 3,829 3,764 18,000 Central Japan 1,774 1,717 1,756 1,795 1,800 811 705 West Japan 5,842 6,080 6

  41. Slide 41: 4. Rationalization of the Production System and Our Purchasing Strategy

    4. Rationalization of the Production System and Our Purchasing Strategy(Non-Consolidated) (¥ million) First-half First-half (¥ million) (％) FY 15/8 16/8 17/8 18/8 19/8E 10,000 55 18/8 19/8 Domestic production 4,901 4,771 4,676 4,678 4,703 2,356 2,333 Overseas production 4,215 4,419 4,447 4,625 4,737

  42. Slide 42: 5. Statements of Income (Consolidated)

    5. Statements of Income (Consolidated) (¥ million) First-half First-half FY 15/8 16/8 17/8 18/8 19/8E 18/8 19/8 Net Sales 16,150 16,537 17,017 17,144 17,600 7,419 7,233 Gross profit 7,532 7,735 8,086 8,050 8,210 3,469 3,373 Sales, general, and administrative expenses 2,719 2,784 2,843 2,786 2,968 1,

  43. Slide 43: 6. Statements of Income (Non-Consolidated)

    6. Statements of Income (Non-Consolidated) (¥ million) First-half First-half FY 15/8 16/8 17/8 18/8 19/8E 18/8 19/8 Net Sales 16,141 16,535 17,013 17,140 17,600 7,413 7,230 Gross profit 7,218 7,416 7,826 7,835 8,012 3,377 3,299 Sales, general, and administrative expenses 2,718 2,775 2,831 2,779 2,95

  44. Slide 44: 7. Indices (Consolidated)

    7. Indices (Consolidated) First-half First-half (Unit) 14/8 15/8 16/8 17/8 18/8 18/8 19/8 Profitability ROE (%) 9.5 9.3 9.4 10.3 9.8 - - ROA (%) 13.5 13.0 12.7 13.4 12.8 - - Return on sales Net income (%) 19.9 20.0 19.7 21.6 21.4 - - ROE resolution Total Assets Turnover (Times) 0.4 0.4 0.4 0.4 0.4 -

  45. Slide 45: 8. Indices (Non-Consolidated)

    8. Indices (Non-Consolidated) First-half First-half (Unit) 14/8 15/8 16/8 17/8 18/8 18/8 19/8 Profitability ROE (%) 10.1 9.8 10.0 11.0 10.5 - - ROA (%) 14.2 13.7 13.4 14.2 13.6 - - Return on sales Net income (%) 19.4 19.4 19.2 21.2 21.1 - - ROE resolution Total AssetsTurnover (Times) 0.5 0.5 0.5 0.5

  46. Slide 46: 9. Statements of Income (Consolidated)

    9. Statements of Income (Consolidated) (¥ million,%) (¥ million,%) FY 17/8 18/8 Change(the previous year) First-half 18/8 First-half 19/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Net Sales 17,017 100.0 17,14

  47. Slide 47: 10. Statements of Income (Non-Consolidated)

    10. Statements of Income (Non-Consolidated) (¥ million,%) (¥ million,%) FY 17/8 18/8 Change(the previous year) First-half 18/8 First-half 19/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Net Sales 17,013 100.0

  48. Slide 48: 11. Balance Sheet (Consolidated)

    11. Balance Sheet (Consolidated) (¥ million,%) (¥ million,%) FY 17/8 18/8 Change(the previous year) First-half 18/8 First-half 19/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Current assets 32,205 78.6 33,220

  49. Slide 49: 12. Balance Sheet (Non-Consolidated)

    12. Balance Sheet(Non-Consolidated) (¥ million,%) (¥ million,%) FY 17/8 18/8 Change(the previous year) First-half 18/8 First-half 19/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Current assets 29,088 77.5 30,0

  50. Slide 50: 13. The Forecasts/Results of Net Sales (Consolidated)

    13.The Forecasts/Results of Net Sales (Consolidated) (¥ million) (％) [Forecast] (¥ million) 20,000 50 FY 14/8 15/8 16/8 17/8 18/8 19/8E Full Year 16,000 16,700 16,500 17,000 17,500 17,600 First-half 6,530 6,950 6,850 7,140 7,350 7,463 Second-half 9,470 9,750 9,650 9,860 10,150 10,137 15,000 25 [Resu

Nagaileben — H1 FY2019 Earnings Presentation on 6ix