Komehyo Holdings Co., Ltd. · TSE:2780
Komehyo — Q2 FY2025 Earnings Presentation
69 slides from Komehyo's earnings presentation, Nov 13, 2024
Slide 1: Earnings Results Briefing for the Second Quarter of FY Ending March 2025
Earnings Results Briefing for the Second Quarter of the Fiscal Year Ending March 31, 2025 November 13, 2024 Komehyo Holdings Co., Ltd. Securities code: 2780 (Tokyo and Nagoya Stock Exchanges) IR・PR Department TEL:+81-52-249-5366 ©Komehyo Holdings Co .,Ltd. 1
Slide 2: Summary of financial results for the second quarter
Summary of financial results for the second quarter of the fiscal year ending March 31, 2025 Sales increased and profits decreased compared to the same period last year. Full-year target remains unchanged ・Since the rapid exchange rate fluctuations in August 2024, the market environment for transact
Slide 3: Contents
Contents 1. Our business model and P.4 Medium-term management plan 2. Consolidated results for the Second Quarter P.12 of the Fiscal Year Ending March 31, 2025 3. Segment overview for the Second Quarter P.26 of the Fiscal Year Ending March 31, 2025 4. Future outlook and initiatives to achieve the P.
Slide 4: Our business model and Medium-term management plan
1. Our business model and Medium-term management plan ©Komehyo Holdings Co .,Ltd. 4
Slide 5: Vision Mission Value
From reuse to relay use We will inherit that "value". Vision Mission Value We develop a concept of We respect people for making We listen and empathize with environmentally and products, thank people for what others say. socially conscious providing products for use We value the importance of recycl
Slide 6: Company Highlights (Consolidated)
Company Highlights (Consolidated) A leading player in the reuse industry, which operates KOMEHYO, BRAND OFF, and other brands in Japan and other countries Founding Net sales *1 Individual purchase amount * 1 1947 年 119,459 millions of yen （ Growth achieved in three consecutive terms ） 61,205 million
Slide 7: Business Domains of Komehyo Holdings Group
Business Domains of Komehyo Holdings Group Brand Fashion Business (General): Aim to be No. 1 in sales volume. Primary Secondary distribution distribution Purchase Product evaluation/commercialization sale General customers Real store Real store General customers Home delivery purchase Product center
Slide 8: Business Domains of Komehyo Holdings Group: Specialized
Business Domains of Komehyo Holdings Group Brand Fashion Business (Specialized): Aim to be one-of-a-kind with core fans. Primary Secondary distribution distribution sale Purchase Product evaluation/commercialization sale Real store Product Real Store General General Home delivery purchase customer c
Slide 9: Business Domains: Tire and Wheel Business
Business Domains of Komehyo Holdings Group Tire and Wheel Business Primary Secondary distribution distribution production sale Purchase sale General customers Planning and development General customers commercialization Product production Reuse business Domestic mass retailer Maker Overseas ©Komehyo
Slide 10: Position of the Medium-term Management Plan
Position of the Medium-term Management Plan We aim to achieve sales of 250 billion yen by the 80th anniversary of the company's founding, which is the final year of the Medium-term Management Plan, with a view to becoming the world's No. 1 the world'sNo. 1 company company in sales of brand goods for
Slide 11: Basic Policies for the Medium-term Management Plan
Basic Policies for the Medium-term Management Plan "Beyond the 80th year milestone" Strive to achieve business growth and higher social value under a policy based on the business environment and competitive advantages. 1 Achieving business growth A d van ci ng m a na g e ment 3 w i t h a n a w a r e
Slide 12: Consolidated results for the Second Quarter
2. Consolidated results for the Second Quarter of the Fiscal Year Ending March 31, 2025 ©Komehyo Holdings Co .,Ltd. 12
Slide 13: Highlights of cumulative 2nd quarter financial results
Highlights of cumulative 2nd quarter financial results for the fiscal year ending March 31, 2025 Consolidated financial results for the second quarter of the fiscal year ending March 2025 Interim net income Individual purchase Consolidated Consolidated Consolidated sales attributable to parent amoun
Slide 14: Second quarter results Main factors
Second quarter results for the fiscal year ending March 2025 Main factors Due to rapid exchange rate fluctuations, prices of some items, especially high -priced items such as watches and bags, have conti nued to decline. Increased inventory fluidity and covers the decline in unit prices in corporate
Slide 15: FY 2025 2Q Performance
FY 2025 2Q Performance Net sales and gross profit were record highs on a cumulative period basis, although each profit level under operating profit decreased due to the decline of the gross profit margin. (Millions of yen) FY2025 1Q YoY FY2025 2Q YoY FY2025 1H YoY vs FY plan* Net sales 33,499 133.5%
Slide 16: FY 2025 2Q Performance: sales and gross margin trend
FY 2025 2Q Performance In addition to individual purchases remaining strong, we strengthened corporate purchases to seize sales opportunities with customers in Japan and overseas. The gross profit margin declined 2.6 points year on year in Q2. However, the enhanced product lineup at stores contribut
Slide 17: Analysis of consolidated operating income
Analysis of consolidated operating income Purchases remained strong, which resulted in sufficient in -store inventories. Regarding net sales, both retail sales and corporate sales increased significantly. Profit decreased 2.6% year on year, reflecting higher SG&A expenses linked to growth investment
Slide 18: Breakdown of consolidated Net sales
Breakdown of consolidated Net sales (Retail / Overseas/Domestic tax -free sales) 【Retail】 The retail ratio increased due to the opening of sales stores and the increase in customers, and the ideal composition ratio (retail: corporate = 50:50) was maintained. 【Overseas】 Overseas sales remained strong
Slide 19: Breakdown of domestic duty-free sales
Breakdown of domestic duty-free sales Just under 60% of the customers are from China (including Hong Kong), Taiwan, and Thailand, where KOMEHYO and BRAND OFF have stores. They are younger than the domestic customer base, with the volume zone being customers in their 30s to 40s. Percentage of purchas
Slide 20: Purchase from individual customers (Group total)
Purchase from individual customers (Group total) Factors including the continued opening of purchase centers and the growth of existing stores resulted in a solid trend in th e purchase amount per customer, resulting in the purchase amount for the three months of the second quarter under review bein
Slide 21: Changes in selling, general and administrative expenses
Changes in selling, general and administrative expenses In order to secure the human resources necessary for opening new stores, labor costs increased due to the strengthening of recruitment and training. With the increase in sales, SG&A expenses were suppressed as planned, and the SG&A ratio decrea
Slide 22: Balance sheet overview
Balance sheet overview In addition to strong individual purchases, we strengthened corporate purchases to expand the size of business and strengthen retail trade, which resulted in the securing of sufficient inventories. Inventory assets, which are the source of sales growth and are directly linked
Slide 23: Inventory Turnover
Inventory Turnover BF business In response to the fluctuation of product market prices, we increased inventory liquidity. This resulted in a 1.7 point decline in the gross profit margin, but we maintained the inventory turnover rate. Inventories 30,950 (Millions of yen) FY2023 1H FY2024 1H FY2025 1H
Slide 24: Consolidated cash flow
Consolidated cash flow Cash was used in operating activities, mainly reflecting an increase in inventories in preparation for business scale expansi on and new store openings, as well as an increase in income taxes. There were significant cash inflows from financing activities due in part to strong
Slide 25: Changes in gross merchandise value
compared to the plan. Changes in gross merchandise value GMV*, which indicates the scale of our business, is an indicator for the promotion of relay use. 131.1% compared to the same period last year, the highest ever. The growth of GMV leads to the growth of the business and the improvement of profi
Slide 26: Segment overview for the Second Quarter
3. Segment overview for the Second Quarter of the Fiscal Year Ending March 31, 2025 ©Komehyo Holdings Co .,Ltd. 26
Slide 27: Summary by segment for the second quarter
Summary by segment for the second quarter of the fiscal year ending March 31, 2025 *1 Brand Fashion business（BF） Tire and wheel business（TW） Individual purchase Net sales Operating profit Net Sales Operating profit amount 35,992 67,229 2,962 2,194 29 millions of yen millions of yen millions of yen m
Slide 28: Overview by segment
Overview by segment In the brand and fashion business, individual purchases and retail/corporate sales were strong. In the tire and wheel business, sales of tire and wheel sets were strong. Used sales increased and profit margin improved （Millions of yen） ‘25.3-1Q YoY ’25.3-2Q YoY ’25.3-1H YoY Net s
Slide 29: Stores: total for the Group
Stores | 267 stores in total for the Group (as of September 2024) In 1H, the Group opened 34 stores, mainly specializing in purchasing. ( 17 stores in the second quarter) Brand Fashion Tire and wheel flagship store 6 3 1 Sales Stores 2（ 2 ） 6 3 Stores annexed with sales facilities 19 3 2 10 2 Purcha
Slide 30: Purchasing and sales status by route
| Purchasing and sales status by route *1 BF business Domestic retail gold prices remain high in terms of the composition of products purchased by individuals. As a result, jewelr y and precious metals account for about 40%. The composition ratio of corporate purchases, which was strengthened to sei
Slide 31: Status of sales reinforcement
| Status of sales reinforcement BF business In Japan, we tried new store operation formats, experimenting with a range of factors including their sizes, location, and the items they offer. Established a company in America and started developing new local corporations ▍Domestic ▍Abroad KOMEHYO La Lap
Slide 32: E-commerce-induced sales rate
| E-commerce-induced sales rate BF business Due to an increase in the number of customers and the unit price per person, EC sales increased by 117.6% compared to the sam e period of the previous year in the 3 months of the second quarter. E -commerce inventory has increased due to strong purchasing
Slide 33: Improving Profitability with Franchised Purchase Centers
Improving Profitability starting BF business with Franchised Purchase Centers Increase purchase volume by opening more franchised purchase centers and strengthen the flow of items to be sold on the compa ny- operated Japan Brand Auction (JBA). Increase JBA's GMV (trading volume) and improve profitab
Slide 34: Status of retail sector
| Status of retail sector BF business Tax-free sales, mainly at BRAND OFF Ginza Main Store, increased significantly by 184% year -on-year in the first three months of the second quarter.We actively opened new stores with purchasing facilities and strengthened e-commerce, creating points of contact w
Slide 35: Corporate auction GMV growth
| Corporate auction GMV（volume）growth BF business The number of member companies and the number of listings have increased due to an increase in the need for sales between corporations due to market fluctuations. Total GMV of the two companies was 125.2% compared to the same period of the previous y
Slide 36: Overview of tire and wheel business
| Overview of tire and wheel business TW事業 Ample inventories were secured mainly due to strong individual purchases. Net sales grew, reflecting strong results in terms of the number of tires and wheels sold as a set, the number of customizations, and domestic and overseas sales of wheels planned in
Slide 37: Future outlook and initiatives for the medium-term plan
4． Future outlook and initiatives to achieve the medium-term management plan ©Komehyo Holdings Co .,Ltd. 37
Slide 38: Outlook for the reuse market
Outlook for the reuse market The domestic reuse market is steadily expanding, with an average annual growth rate of 4.2% expected from 2025 onwards. ▍Domestic reuse market size * 40,000 • As long as there is primary distribution, （billion of yen） 31,227 32,500 resources for the reuse market will exp
Slide 39: Brand Fashion Business Second Half Assumptions
Brand Fashion Business Second Half Assumptions BF business Although the gross profit margin is lower than expected, we aim to secure gross profit by increasing sales based on market trend forecasts for our main products. Forecasting market trends for main products Outlook for second half • Prices pe
Slide 40: Continuing to open new stores aggressively
Continuing to open new stores aggressively BF business Amid intensifying competition in store openings, steady progress is being made in the opening of purchase centers at both KOMEHYO and BRAND OFF. Going forward, we will continue to open stores in Japan and overseas by adopting new concepts in ter
Slide 41: Investments and measures for sustainable growth
Investments and measures for sustainable growth BF business We will implement initiatives and investments in line with our basic policy to achieve sales of 250 billion yen and operating income of 15 billion yen in the fiscal year ending March 2028. Enhance competitive advantage, improve business mom
Slide 42: Image of expansion of brand fashion business area
Increase of the Company's share of the re-use market through the promotion of the three businesses M&A and J. Investments such as establishing a joint venture with Front Retailing will lead to expansion of the company's growth areas in line with the expansion of the brand reuse market. ▍Image of exp
Slide 43: Promoting management with an awareness of capital costs
Promoting management with an awareness of capital costs The M&A of the two companies, the establishment of a joint venture, and the expansion of inspection services are necessary fo r achieving an ROE of 18% or higher, including "increasing gross profit margin," "controlling inventory," and "utilizi
Slide 44: M&A: RK Enterprises
Specific initiatives １⃣ M&A: RK Enterprises BF business We acquired on October 23, 2024 all shares of RK Enterprise Co., Ltd., a company with a long history and a strong track record that has been operating branded product re-use and pawn businesses in the reuse industry, and Rodeo Drive Japan Co.,
Slide 45: M&A: Rs-JAPAN/KOMEHYO reorganization
Specific initiatives ２⃣ M&A: Rs-JAPAN/KOMEHYO reorganization BF business Komehyo Co., Ltd., our consolidated subsidiary, acquired on November 1, 2024, all of the shares of Rs-JAPAN Co., Ltd., which engages in purchases and sales of used branded products mainly for companies and operates Rs-Auction,
Slide 46: Establishment of joint venture with J. Front Retailing
Specific initiatives 3⃣ Establishment of joint venture with J. Front Retailing Komehyo, who is well versed in the brand reuse market, is promoting approaches to new target groups by providing assets. BF business ▍Image of target group （ From the medium-term management plan “Beyond the 80th year mile
Slide 47: Expansion of the inspection service
Specific initiatives 4⃣ Expansion of the inspection service × BF business The scope of inspection services provided to Rakuten Rakuma will be expanded from October 2024. Contributing to the growth of the reuse market through market growth related businesses KOMEHYO Kantei, a goods Refers to a servic
Slide 48: Appendix
5. Appendix ©Komehyo Holdings Co .,Ltd. 48
Slide 49: Appendix
Appendix 1. Company Profile P.50 2. Dividend forecast P.61 3. Quantitative targets of the medium-term P.62 management plan and outlook for the initial plan 4. Initiatives of each brand P.65 ©Komehyo Holdings Co .,Ltd. 49
Slide 50: Corporate Profile
Corporate Profile Company name Komehyo Holdings Co., Ltd. Established May 1979 ※Transition to holding company system in October 2020 Head Office 3-25-31 Osu, Naka-ku, Nagoya Representative President, Representative Director: Takuji Ishihara Capital 1,803 million yen No. of employees Consolidated: 1,
Slide 51: Business list
Business list We operate three businesses: Brand Fashion, Tire and Wheel, and real estate leasing. We support "Relay Use," the handing down of goods from person to person and their effective utilization, both in Japan and other countries. Consolidated sales for the fiscal year ending March 2024 119,
Slide 52: History
RECLO Inc . bec om es a gr oup c om pany. Establishment of KOMEHYO BRAND OFF ASIA LIMITED, AN IMPORTANT BASE IN ASIA. Corporate Profile History Established KOMEHYO MALAYSIA SDN.BHD.KOMEHYO USA inc. RK Enterprise Co., Ltd. becomes a group company. 2024 Rs-JAPAN Co., Ltd. becomes a group company. Tran
Slide 53: Human Capital Data
Corporate Profile Human Capital Data In the relay use business model, the roles played by people are wide -ranging (knowledge, skills, expertise, speed, connections w ith customers, etc.), and promoting the development and retention of human resources leads to improvements in business performanc e a
Slide 54: Business/service introduction: KOMEHYO
Corporate Profile Business/service introduction | The main brand of Komehyo Holdings, which mainly sells and buys used brand products. Aiming to improve market standards by creating "curiosity" among customers and society toward a seamless purchasing experience between online and offline ▍Store deve
Slide 55: Trends in purchase price per customer by product
Corporate Profile Trends in purchase price per customer by product | In light of the market fluctuations since August, we carried out purchases at well -balanced pricing, so the average purchase pri ce per customer for watches and bags in September was lower than the previous year. Although jewelry
Slide 56: Business/service introduction: BRAND OFF
Corporate Profile Business/service introduction || Mainly sells, purchases, and quality used branded products. The tax -free ratio of sales is high, and the company has a particular strength in selling bags. Operates the corporate auction “JBA” and contributes to improving profitability ▍Store devel
Slide 57: Business/service introduction: Auctions
Corporate Profile Business/service introduction || Operate corporate auctions “KOMEHYO Auction” and “Japan Brand Auction (JBA)” Increase GMV (volume) and improve profitability through auction fees*1 ▍KOMEHYO Auction Operated by KOMEHYO Auction Co., Ltd. ▍Japan Brand Auction (JBA) Operated by K-Brand
Slide 58: Business/service introduction: Specialized brands
Corporate Profile Business/service introduction | A brand specializing in products. Aim to be one-of-a-kind with core fans. ▍WORM ▍Shellman ▍SELBY ・Consignment and sale of antique watches and ・Purchasing and selling jewelry ・Purchasing and selling premium sneakers jewelry, current watches made by in
Slide 59: Business/service introduction: Tire and wheel
Corporate Profile Business/service introduction| A brand that handles new and used tires, wheels, etc. Integrated supply chain among three group companies ▍Craft ▍U-ICHIBAN/Auto Parts Japan ▍4×4 engineering service ・Purchasing and selling new tires and ・U-ICHIBAN ・ Comprehensive manufacturer of whee
Slide 60: Global expansion
Corporate Profile Global expansion| 21stores in total for the Group (as of September 2024) Expanding into 7 overseas locations*2 with two brands, “KOMEHYO” and “BRAND OFF” Establish a system for local production for local consumption in each country/region and grasp the characteristics of the mar ke
Slide 61: Dividend forecast revision
Dividend forecast revision Based on the dividend policy, the annual dividend forecast has been revised to 104 yen, an increase of 4 yen. We will continue to focus on stable dividends and increasing dividends based on increased sales and profits. New M edium - term M an ag emen t Plan （yen） interim d
Slide 62: Quantitative Targets (FY2025 to FY2028)
Quantitative Targets (FY2025 to FY2028) During the period for the current Medium-term Management Plan, we will achieve business growth *that exceeds market growth through aggressive investment, aiming to achieve net sales of 250 billion yen and operating profit of 15 billion yen in the f iscal year
Slide 63: Matters that will affect this fiscal year's performance
Rearrangement of given matters that will affect this fiscal year's performance The brand reuse market is in an expansion phase both domestically and internationally. A business environment that allows business growth by leveraging competitive advantages, provided that store opening properties and hu
Slide 64: Market price forecast for main products
Market price forecast for main products for the fiscal year ending March 2025 The market trends for each product, which are the premise of this fiscal year's plan, are currently expected to be as follows , and unless there are sudden changes in the external environment such as exchange rates, each p
Slide 65: Initiatives of each brand 1
Initiatives for the fiscal Initiatives of each brand 1⃣ year ending March 2025 Continue to strengthen purchases mainly through new store openings, while bolstering retail through new store openings and e-commerce, in Japan and other countries. Opening a purchase Strengthening existing Strengthen glo
Slide 66: Initiatives of each brand 2
Initiatives for the fiscal Initiatives of each brand ２⃣ year ending March 2025 BRAND OFF will strengthen domestic and overseas e -commerce sales by linking inventory with RECLO and MIKE MUSEUM. Aggressive new store openings will be continued overseas, mainly in Hong Kong and Taiwan. Cooperation with
Slide 67: Initiatives of each brand 3
Initiatives for the fiscal Initiatives of each brand 3⃣ Auction/Brands aiming to be the Only One year ending March 2025 Leverage the strengths of each of the two auctions to expand the number of members and trading volume by capturing a wide range of needs Continue to refine the appeal of the brand
Slide 68: Initiatives of each brand 4: Tire and wheel business
Initiatives for the fiscal Initiatives of each brand 4⃣⃣ Tire and wheel business year ending March 2025 Aim for record sales of 10 billion yen by leveraging the characteristics of the three companies. Product development and expansion Expand sales and strengthen used Product management and online of
Slide 69: Disclaimer / IR contact
Disclaimer This document is an English translation of a document prepared in Japanese. Statements in this document that are not historical facts; statements concerning current plans, forecasts, strategies, and op inions of KOMEHYO Co., Ltd. are forward-looking statements subject to various risks and