Slide 1: Consolidated Results of Operations, Fiscal Year Ended March 31, 2021
Consolidated Results of Operations Fiscal Year Ended March 31, 2021 USS Co., Ltd. May 2021 1
Slide 2: Results of Operations Fiscal Year Ended March 2021
Results of Operations Fiscal Year Ended March 2021 2
Slide 3: Highlights of FY3/2021
Highlights of FY3/2021 ◼ Net sales ¥74.8 billion (down 4.2% YoY) Operating profit ¥36.2 billion (up 0.6% YoY) • The downturn in auto auctions ended in 1Q and performance started recovering in 2Q. • The number of used car exports decreased due to COVID-19. • Supported by high auction prices, the used
Slide 4: FY3/2021 – Summary of Consolidated Results of Operations
FY3/2021 – Summary of Consolidated Results of Operations ◼ Sales was down 4.2% YoY to ¥74.87 billion, operating profit was up 0.6% to ¥36.22 billion, and profit attributable to owners of parent decreased 80.5% to ¥4.0 billion. ◼ Extraordinary loss of ¥21.7 billion involving JAA and HAA Kobe ◼ Althou
Slide 5: 4Q FY3/2021 – Summary of Consolidated Results of Operations
4Q FY3/2021 – Summary of Consolidated Results of Operations ◼ Record-high operating profit and ordinary profit in the 4Q (Jan.- Mar.) (Million yen) 4Q FY3/19 4Q FY3/20 4Q FY3/21 Year on year Net sales 21,569 19,958 20,910 104.8% Cost of sales 8,573 7,817 7,774 (Per sales) 99.4% (39.7%) (39.2%) (37.2
Slide 6: FY3/2021 – Reasons for Change in Operating Profit (Actual)
FY3/2021 – Reasons for Change in Operating Profit (Actual) Net sales Cost of sales SG&A expenses Increase in fee rates 1.73bn Decrease in cost of goods sold 1.62bn Decrease in goodwill amortization 0.24bn Decrease in vehicles consigned ▲4.61bn Decrease in rent 0.26bn Decrease in employee salaries an
Slide 7: 4Q FY3/2021 – Reasons for Change in Operating Profit (Actual)
4Q FY3/2021 – Reasons for Change in Operating Profit (Actual) Net sales Cost of sales SG&A expenses Increase in contract completion rate 0.71bn Decrease in purchases 0.18bn Decrease in goodwill amortization 0.07bn Increase in fee rates 0.40bn Increase in cost of materials purchased ▲0.15bn Decrease
Slide 8: FY3/2021 – Business Segment Quarterly Performance
FY3/2021 – Business Segment Quarterly Performance (Year-on-year change) Consolidated Performance Auto Auction Segment Sales Operating profit Sales Operating profit (Million yen) (Million yen) 19,861 19,391 19,686 19,958 20,910 18,931 18,221 16,056 16,358 15,415 14,944 15,359 15,864 16,217 16,937 13,
Slide 9: Consolidated Balance Sheets and Statements of Cash Flows
Consolidated Balance Sheets and Statements of Cash Flows ◼ Net cash used in investing activities increased mainly because of payments for constructing a multi-level parking structure at the R-Nagoya Auction Site and for purchasing leasehold at the HAA Kobe Auction Site. ◼ The primary use of cash in
Slide 10: Automobile Market
Automobile Market New Car Registrations and YoY Changes Used Car Registrations and YoY Changes (Thousand vehicles) (Thousand vehicles) 3,000 40% 3,000 30% 20% 20% 8.1% 1,963 1,967 1,908 1,948 4.2% 10% 1,540 1.0% 1,673 1,609 1,704 1,672 1,720 1,627 1,705 1,694 -0.8% 1,429 1,557 1,500 1,396 1,371 0% 6
Slide 11: Auto Auction Segment (1)
Auto Auction Segment (1) ◼ Vehicles consigned decreased 9.0% YoY to 2,661 thousand; contract completions decreased 5.2% YoY to 1,680 thousand (contract completion rate: 63.2% against 60.6% in the previous fiscal year) ◼ Although auction fees decreased because of the smaller number of vehicles consig
Slide 12: Auto Auction Segment (2) Monthly Data
Auto Auction Segment (2) Monthly Data Vehicles consigned Vehicles contracted Contract completion rate (Thousand vehicles) 400 80% 71.0% 69.4% 69.6% 327 65.7% 66.7% 65.0% 293 64.5% 63.6% 63.7% 64.6% 60.8% 61.5% 61.6% 62.6% 61.9% 61.8% 62.8% 61.4% 60.5% 59.5% 59.2% 58.7% 58.7% 55.9% 288 60% 262 60.4%
Slide 13: Auto Auction Segment (3)
Auto Auction Segment (3) No. of Vehicles Consigned and Contract Completion Rate Vehicles Contracted Vehicles consigned Vehicles contracted USS Industry's average (excl. USS) (Thousand vehicles) 1,000 80% 784 752 814 771 756 738 72.0% 664 699 689 706 685 68.4% 68.9%69.7% 631 605 70% 67.0% 66.3%65.9%6
Slide 14: Auto Auction Segment (4)
Auto Auction Segment (4) Total Consignment Fees and Total Contract Completion Fees and Consignment Fee per Vehicle Contract Completion Fee per Vehicle Total consignment fees Fee per vehicle Total contract completion fees Fee per vehicle (Million yen) (yen) (Million yen) 8,503 (yen) 5,000 5,413 6,000
Slide 15: Auto Auction Segment (5)
Auto Auction Segment (5) From April 1, 2020 to March 31, 2021 (Number of auctions held, Vehicles) Number of auctions Number of consigned vehicles Number of contract completions Contract completion rate FY3/21 FY3/20 FY3/21 FY3/20 YoY change FY3/21 FY3/20 YoY change FY3/21 FY3/20 Tokyo 49 49 617,968
Slide 16: Auto Auction Segment (6)
Auto Auction Segment (6) (Vehicles, %) Apr. May Jun. Jul. Aug. Sep. First Half Oct. Nov. Dec. Jan. Feb. Mar. Second Half Fiscal Year FY3/19 266,046 232,114 254,075 224,212 206,245 234,019 1,416,711 234,741 257,451 207,046 224,051 262,464 327,663 1,513,416 2,930,127 YoY 13.5 26.4 16.1 14.4 21.6 11.5
Slide 17: Used Vehicle Purchasing and Selling Segment
Used Vehicle Purchasing and Selling Segment ◼ At Rabbit, which purchases used vehicles, the sales volume decreased, but after the declaration of a state of emergency was lifted in May 2020, gross profit per vehicle improved due to higher auction prices, resulted lower sales but higher profits.(Net s
Slide 18: Other Segment
Other Segment ◼ In the recycle business, the combination of a smaller recycling volume but an increase in the price of ferrous scrap resulted in lower sales but higher earnings. (Net sales decreased 6.4% YoY to ¥4,829 million, Operating profit increased 21.6% to ¥376 million) ◼ Operating loss in the
Slide 19: Consolidated Forecast for FY3/2022
Consolidated Forecast for FY3/2022 19
Slide 20: FY3/2022 – Consolidated Forecast
FY3/2022 – Consolidated Forecast ◼ Although the outlook is still unclear because of the COVID-19 crisis, the forecast is based on the expectation that the recovery of the automobile auction market will continue. (Million yen) FY3/20 (Actual) FY3/21 (Actual) FY3/22 (Forecast) VS. previous year Net sa
Slide 21: FY3/2022 – Reasons for Change in Operating Profit (Forecast)
FY3/2022 – Reasons for Change in Operating Profit (Forecast) Net sales Cost of sales SG&A expenses Increase in vehicles consigned 2.60bn Increase in purchases ▲0.79bn Decrease in goodwill amortization 1.20bn Increase in recycling 0.94bn Increase in cost of goods sold ▲0.74bn Used vehicle sales/purch
Slide 22: FY3/2022 – Forecast by Business Segment
FY3/2022 – Forecast by Business Segment (Million yen) FY3/20 FY3/21 FY3/22 VS. previous (Actual) (Actual) (Forecast) year Net sales Auto auction 63,350 61,048 62,695 102.7% Used vehicle purchasing and selling 9,099 8,646 9,051 104.7% Other 5,692 5,180 5,853 113.0% Total 78,143 74,874 77,600 103.6% O
Slide 23: Market Overview, Strategy for Creating Value Over the Medium Term
Market Overview Strategy for Creating Value Over the Medium Term 23
Slide 24: Used Car Auction Market and USS Market Share
Used Car Auction Market and USS Market Share ◼ Maintained higher market shares and profit in the period of sluggish markets following the financial crisis of 2008-2009. ◼ The JAA acquisition significantly raised the USS Group’s market share 1990(CY) market share 2000(CY) market share 2020(CY) market
Slide 25: Basic Policy on Finance and Shareholder Distributions
Basic Policy on Finance and Shareholder Distributions Increase shareholder distributions while continuing investment for growth ◼Consolidated dividend payout ratio: Over 55% from FY3/2020 Consolidated dividend payout ratio 344.5% Policy Actual 300% 90% 70% 67.0% 51.5% 50.1% 50.1% 44.3% 45.1% 45.1% 4
Slide 26: Earnings Distributions – Dividend Policy
Earnings Distributions – Dividend Policy ◼Plan to pay 55.5 yen dividend per share for FY3/2021 (up 0.1 yen) ◼Plan to pay 58.4 yen dividend per share for FY3/2022 (up 2.9 yen) ◼Forecasting 22 consecutive years of dividend growth since listing (Yen) DPS Consolidated payout ratio 344.5% 80 160% 300% 60
Slide 27: Earnings Distributions – Total Payout Ratio
Earnings Distributions – Total Payout Ratio ◼Flexible stock repurchases while maintaining stable dividend. Dividend Paid Stock Repurchased Total Payout Ratio (Million yen) 344.5% 30,000 224.5% 300% 200% 160% 20,000 111.4% 120% 117.6% 103.5% 104.0% 84.2% 80% 10,000 76.8% 59.3% 53.8% 50.1% 45.1% 52.1%
Slide 28: Earnings Distributions – Return on Equity (ROE)
Earnings Distributions – Return on Equity (ROE) ◼No change in the medium-term ROE target of at least 15%. ROE 19.5% 20% 18.2% 16.5% 15.5% 15.9% 15.8% 15.3% 15.1% 14.7% 14.8% 14.9% 14.5% 14.2% 14.1% 14.5% 16.0% 13.7% 15.0% 10.9% 11.7% 11.3% 10% 10.4% 2.3% 0% FY3/00 FY3/01 FY3/02 FY3/03 FY3/04 FY3/05
Slide 29: Cycle of Rising Corporate Value Driven by Business Growth and Shareholder Distributions
Cycle of Rising Corporate Value Driven by Business Growth and Shareholder Distributions ◼Aim at increasing shareholder value by a two-pronged strategy of solid investments in growth and active shareholder distributions Leveraged Internet Increase in number of and IT members – users Rise in contract
Slide 30: Auto Auction Segment – DX initiatives (1)
Auto Auction Segment – DX initiatives (1) ◼ Started using new systems for vehicle inspections in order to find defects that are not readily visible Underbody imaging system Inspections using on-board This system is used to inspect underneath diagnostic system scans vehicles, including tires and whee
Slide 31: Auto Auction Segment – DX initiatives (2)
Auto Auction Segment – DX initiatives (2) ◼ Started work on the digitalization of the auction sheet (entry form). Commenced test operations at the Nagoya and other sites with the aim of launching full-scale operations by the close of the fiscal year ending in March 2022. Digitization will lead to mo
Slide 32: Contact Information
Contact Information Notes General Affairs Department, • This document has been translated from the Supervisory Office, original Japanese as a guide for non-Japanese USS Co., Ltd. investors. • Forward-looking statements in this material are based on information available to management at TEL : +81-52
Slide 33: Reference
Reference 33
Slide 34: History of USS Long-term Growth
History of USS Long-term Growth Before 2000 1982: Held the first auction with only 255 vehicles consigned 1988: Expanded the Nagoya Auction Site. The number of POS seats was 570 (the largest in Japan). Early nineties: Opened Kyushu and Tokyo Auction Sites 2017: Late nineties: Opened Okayama, Shizuok
Slide 35: Business Models for USS
Business Models for USS Used Ferrous vehicles Rabbit scrap End (Used vehicle ARBIZ Steel users purchases) makers Payment for Payments vehicles Payment Payments for vehicles Used Used vehicles vehicles Members Members submitting consigning vehicles Auto Auction successful bids (buyer) (seller） • • Us
Slide 36: Automobile Market and USS Revenue
Automobile Market and USS Revenue ◼ The number of vehicles consigned is correlated through trade-ins to (1) New car registrations and (2) Used car registrations ◼ Total demand comprises domestic demand (2) and overseas demand (3). In recent years, total demand has been driven mainly by overseas dema
Slide 37: New/Used Car Registrations and Auto Auction Market
New/Used Car Registrations and Auto Auction Market ◼ The auction market continued to expand till 2000 as the share of used vehicles sold through the auction market increased as a share of the total used vehicle market. Starting in the mid-2000s, older vehicles and vehicles with high mileage which wo