Slide 1: FY2014 Consolidated Financial Results
February 17, 2015 FY2014 Consolidated Financial Results Part 1: Description of FY2014 Results Part 2: EPCO’s Medium-Term Vision: Second Start 25 Years after Foundation EPCO CO., LTD. EPCO.CONFIDENTIAL.INFORMATION
Slide 2: Part 1: Description of FY2014 Results
1 Part 1 Description of FY2014 Results EPCO.CONFIDENTIAL.INFORMATION
Slide 3: Consolidated Results for Fiscal Year 2014
Consolidated Results for Fiscal Year 2014 1 Determined to make prior investments in the Smart Energy Business (Millions of yen) Consolidated FY2013 FY2014 Vs. FY2014 Vs. Financial Results result 1H 2H result FY2013 forecast forecast Net Sales 3,299 1,524 1,526 3,050 -7.5% 3,093 -1.4% Operating Inc
Slide 4: Comparison Between Forecasts and Results in FY2014
Comparison Between Forecasts and Results in FY2014 2 Effects on earnings of selection as a member of the Large-Scale HEMS Information Infrastructure Project (Millions of yen) FY2014 Main factor of difference Consolidated FY2014 Vs. FY2014 result (Design Consulting: D, Smart Financial Results Subsi
Slide 5: Change in Sales by Segment for Fiscal Year 2014
Change in Sales by Segment for Fiscal Year 2014 3 (Millions of yen) Vs. Vs. FY2013 FY2014 FY2014 Segment FY2013 forecast result 1H 2H result forecast (%) (%) Design Consulting 2,168 1,008 982 1,991 -8.2 2,008 -0.9 Waterworks Equipment Design 1,715 753 769 1,523 -11.2 1,501 +1.5 Electrical Equipment
Slide 6: Changes in New Home Construction and Design Commissions
Changes in New Home Construction and Design Commissions 4 Changes in New Low-Rise Home Changes in New Low-Rise Home Construction (*1) Construction By Quarter (Unit: Homes) (Unit: Homes) Jan 2013-Dec 2013 13年1月～13年12月 Jan 2014-Dec 2014 14年1月～14年12月 By Period Jan 2013- Jan 2014- 80,000 Change The reac
Slide 7: Year-on-Year Changes in Ordinary Income by Segment in FY2014
Year-on-Year Changes in Ordinary Income by Segment in FY2014 5 Prior investments were made in the Smart Energy Business. Breakdown of prior investments in the Energy Business FY2013 FY2013 FY2014 FY2014 Item (Millions of yen) Change result result Net Sales 199 255 +56 (Millions of yen) Break
Slide 8: Forecast for fiscal year 2015
Forecast for fiscal year 2015 6 Sales will rise, reflecting growth in the Smart Energy Business, while prior investments will continue to be made. Consolidated Financial Results FY2014 FY2015 Change (Millions of yen, %) 1H 2H result 1H 2H forecast Net Sales 1,524 1,526 3,050 1,482 1,841 3,324 +9.0
Slide 9: Sales Forecast by Segment in FY2015
Sales Forecast by Segment in FY2015 7 The existing businesses (Design Consulting and Customer Support) will remain flat, and the Smart Energy Business will grow sharply. Segment FY2014 FY2015 Change (Millions of yen) 1H 2H result 1H 2H forecast Design Consulting 1,008 982 1,991 917 1,094 2,011 +1.
Slide 10: Growth in Sales in Smart Energy Business
Growth in Sales in Smart Energy Business 8 Contracts for services are on an upward trend in anticipation of the liberalization of electric power for home in 2016 (Millions of yen) 250 Sales growth fields this fiscal year (1) Contracts for storage battery design and construction supervision (2) Con
Slide 11: Year-on-Year Changes in Ordinary Income by Segment in FY2015
Year-on-Year Changes in Ordinary Income by Segment in FY2015 9 Prior investment in the Energy Business will continue. Ordinary income is expected to remain flat from the previous fiscal year. Breakdown of prior investments in the Energy Business FY2014 FY2015 Item (Millions of yen) Change result f
Slide 12: Basic Policy on Dividends
Basic Policy on Dividends 10 The Company will distribute stable dividends. The target payout ratio is around 50%. The Company considers that it has sufficient internal reserves and will continue to pay a dividend per share of ¥55 although given the results in FY2014, the payout ratio will exceed 1
Slide 13: Part 2: EPCO's Medium-Term Vision: Second Start 25 Years after Foundation
12 11 Part 2 EPCO’s Medium-Term Vision: Second Start 25 Years after Foundation EPCO.CONFIDENTIAL.INFORMATION
Slide 14: Size of Low-Voltage Power Retail Market to Be Liberalized in April 2016
Size of Low-Voltage Power Retail Market to Be liberalized in April 2016 12 The power retail market for the residential sector will be liberalized in 2016, and a ¥7.5 trillion power retail market will be opened up. Regulated segment (contract power: 50kW or less) Power market to be liberalized Market
Slide 15: Change in Market Environment in Residential Sector
Change in Market Environment in Residential Sector 13 The existing business associated with new homes is declining, but a new market is being created in association with the liberalization of power retail to the residential sector. Ten thousand units 1.67 New homes 200 million 0.88 100 million 0 199
Slide 16: Renewed Awareness of EPCO's Strengths in Residential Sector
Renewed Awareness of EPCO’s Strengths in Residential Sector 14 Expertise that EPCO has developed in the residential sector Maintenance and customer management capabilities Trust of housing Expertise that Achievements in companies Design EPCO has expertise, residential sector Sales developed in Custo
Slide 17: EPCO's Strengths = Platform x Smart Energy
EPCO’s Strengths = Platform x Smart Energy 15 Creating synergies between businesses where EPCO is strong EPCO’s business domain focuses on the residential sector. Platform company Smart energy company Customer management Energy-saving proposals, services associated with capabilities (maintenance) da
Slide 18: Developing Energy Services around Its Core Business in Residential Sector
Developing Energy Services around Its Core Business 16 in Residential Sector Expanding services, especially in the residential sector, to become an infrastructure company that will give support to homes EPCO’s business structure 1. Design service (i) Equipment design (ii) Architectural design (iii)
Slide 19: Providing ENESAP for Companies and Local Governments to Enter the Power Retail Market
Providing ENESAP for Companies and Local Governments 17 to Enter the Power Retail Market Supply-side services (for power retail companies) Support for the planning Strength- Electricity trading Power business and operation of power ening Strength retail businesses system back-office tasks Demand-sid
Slide 20: Constructing a Power Service Model Through Alliances
Constructing a Power Service Model Enabling a Variety 18 of Combinations Through Alliances Electric power liberalization is giving an opportunity for growth on a different dimension. Day-to-day life infrastructure and services add value to power service. EPCO is forming alliances with other compa
Slide 21: EPCO's Roadmap in Power Retail Business
Aiming for a 20% Share in Power Retail Market in 2020 19 EPCO’s Roadmap in Power Retail Business - Setting targets each fiscal year in accordance with business operations and progress in business - 2020 targets: (for local governments) giving power retail support to 5 million households in 150 citie
Slide 22: Strategy for Electric Power Service
Strategy for Electric Power Service 20 Business strategy Aiming to achieve growth in the electric power business with local governments in collaboration with other companies Gas Joint ventures Co-op Electricity Promoting the operations of Large cities ONE Energy Providing part Bank and P&E of ENESAP
Slide 23: Services Included in ENESAP and Expected Customers
Services Included in ENESAP and Expected Customers 21 Supply-side services: for suppliers Demand-side services: for households White-label electricity sales support Energy-saving renovation support Using EPCO’s connections with housing companies Using EPCO’s connections with housing Local co
Slide 24: An Example of a White-Label Electricity Sales Model
An Example of a White-Label Electricity Sales Model 22 In this model, EPCO cooperates with an electricity-related player and provides back-office functions and services and electric power procurement support for a home builder that is associated with EPCO and sells electricity to a customer. Back-of
Slide 25: An Example of Solar Power Aggregation Service
An Example of Solar Power Aggregation Service 23 In this model, EPCO provides both supply-side and demand-side services for communications companies, among other companies, which engages in electricity retailing and purchases solar energy from homes. Supply-side service Demand-side service Providing
Slide 26: An Example of an Electricity Rate Plan Comparison Service Model
An Example of an Electricity Rate Plan Comparison Service Model 24 Through an electricity rate plan comparison website, EPCO receives referral fees from power companies that concludes contracts through the website. EPCO will promote the use of the website by developing collaboration with other websi
Slide 27: An Example of a Local Government PPS Model
An Example of a Local Government PPS Model (PPS: Power Producer and Supplier) 25 The power retail business strengthens the local government’s finances. The local government creates local jobs, enhances services for its citizens, and builds a business model for local revitalization. (i) (ii) (iii) (i
Slide 28: An Example of an Energy-Saving Equipment Rental Model
An Example of an Energy-Saving Equipment Rental Model 26 Taking Advantage of EPCO’s Strength The energy-saving equipment rental business is a good example of a business model taking advantage of EPCO’s strength: (Housing sales channel and design expertise) X (Energy service and business partners). E
Slide 29: Intensive Investment in Energy Business Before Liberalization in 2016
Intensive Investment in Energy Business Before Liberalization in 2016 27 Determined to make prior investment; accelerating the consolidation of a foothold for power liberalization Investing in human resources Investing in systems and offices Investing in businesses in alliance with other companies,
Slide 30: Initiative in the China Business
Initiative in the China Business 28 Lesso EPCO is making preparations for maintenance services Lesso EPCO plans to commence a maintenance business for apartment residents in China in June in cooperation with Lesso, its partner in the joint venture and a leading pipe material manufacturer in China. R
Slide 31: Thank you.
Thank you. EPCO.CONFIDENTIAL.INFORMATION