Autobacs Seven Co., Ltd. · TSE:9832
Autobacs Seven — FY2018 Earnings Presentation
53 slides from Autobacs Seven's earnings presentation, May 2, 2018
Slide 1: FY March 2018 Analyst Meeting
FY March 2018 Analyst Meeting AUTOBACS SEVEN CO., LTD. May 2, 2018
Slide 2: Consolidated Results of FY March 2018 and Forecasts for FY March 2019
Ⅰ. Consolidated Results of FY March 2018 and Forecasts for FY March 2019
Slide 3: Consolidated P/L (FY March 2018)
Consolidated P/L (FY March 2018) Increase in net sales and income: Net sales and gross profit increased, while selling, general, and administrative expenses were reduced. In addition to an increase in tire prices and greater demand for studless tires due to snowfall, sales of dashcams remained stron
Slide 4: Points for FY March 2018
Points for FY March 2018 Increase in demand for automotive goods and services due primarily to an increase in tire prices, demand for snow tires caused by cold weather, and public interest in dashcams Brisk sales of stores due to measures for the reduction of the wholesale price applicable to fr
Slide 5: FY March 2018 Review of Business Environment
FY March 2018 Review of Business Environment 【Same store basis】 Sales: +1.3% YoY, Number of customers: -1.5% YoY Same store sales and number of customers at domestic AUTOBACS-chain stores including FCs (YoY) 12% 10.4% Sales Number of customers 10% 8% 5.8% 5.5% 6% 4% 4.0% 1.9% 2% 2.5% 0.4% 0.3% 1.2%
Slide 6: Sales Ups & Downs by Merchandise (FY March 2018)
Sales Ups & Downs by Merchandise (FY March 2018) Retail sales ups and downs by merchandise category (Million Yen） (FY March 2018, YoY change in amount, total store basis) 4,000 3,760 All-season tires: +860 MY Snow tires: +2,770 MY 3,000 Tire & wheel installation 2,000 services: :+980 MY Car electron
Slide 7: Sales and profits of Reporting Segments
Sales and profits of Reporting Segments (Million Yen) Sales (Million Yen) Profits 200,000 179,554 20,000 178,608 16,546 180,000 14,472 160,000 15,000 140,000 10,000 FY March 120,000 2017 100,000 5,000 80,000 43 61 FY March 60,000 0 23,583 30,867 -589 2018 40,000 1,653 -674 -537 -1,612 9,503 -5,000 2
Slide 8: Segment Information
Segment Information (Million Yen) FY March FY March YoY Summary 2018 result 2017 result Sales 178,608 179,554 -0.5% The results of both wholesale and retail were strong. Reduced wholesale prices were Gross provided to franchisees to help promote their Domestic margin 56,666 57,429 -1.3% business. Ov
Slide 9: Retail Sales in Total AUTOBACS Group Stores
Retail Sales in Total AUTOBACS Group Stores Retail sales including FCs*: 262.1 billion Yen (+0.8% YoY) (Billion Yen) 260.0 262.1 300 Second hand goods & Fuel: 4.9BY (+7.4% YoY） 4.6 4.9 250 18.3 18.7 Statutory safety inspection: 18.7BY (+2.4% YoY) 27.2 24.2 Number of cars inspected： 633,000cars (-1.9
Slide 10: Non-Consolidated and Domestic Store Subsidiaries
Non-Consolidated and Domestic Store Subsidiaries (Million Yen) Non-consolidated Domestic Store Subsidiaries Results YoY Vs. Plans Results YoY Vs. Plans Net Sales 156,313 +3,258 +2,413 58,040 -8,403 -959 Gross 32,302 +952 +374 24,806 -1,720 +649 Margin(%) (20.7%) (+0.2pt) (42.7%) (+2.8pt) SG&A 26,714
Slide 11: To Improve Volume of Wholesale
To Improve Volume of Wholesale Discounted wholesale prices from Autobacs Seven for one year for fully certified/designated stores to use for their merchandise Non-consolidated Net Wholesale Sales purchase, sales promotion, human resource development, etc. (Million Yen） 180,000 171,323 160,000 146,38
Slide 12: Performance Results of Franchisees
Performance Results of Franchisees Ordinary Income of Franchise Companies (Preliminary) (Billion Yen) 6.0 5.62 4.0 3.81 2.0 1.63 0.0 -0.3 Total of profit-making FCs -2.0 Total of profit-making subsidiaries -2.5 Total of loss-making FCs Total of loss-making subsidiaries Orginary income(net) -4.0 FY M
Slide 13: Profit Improvement of Store Subsidiaries
Profit Improvement of Store Subsidiaries (Million Yen) Operating income of store subsidiaries 2,000 1,475 1,000 270 0 -1,000 -974 -2,000 -1,924 -3,000 FY March 2015 FY March 2016 FY March 2017 FY March 2018 Key index of store subsidiaries (times) 45% 8.0 42.7% 5.8 5.9 6.0 40.6% 4.5 39.9% 40% 40.2% 4
Slide 14: Domestic Store Subsidiaries: Management Restructuring
Domestic Store Subsidiaries: Management Restructuring Store transfer of store subsidiaries in North east area in Japan • Transfer of 2 stores in the Iwate area to a franchisee (February 17, 2018) • Transfer of 11 stores in the Miyagi area and 4 stores in the Akita area to a franchisee (March 1, 2018
Slide 15: Performance by Overseas Subsidiaries
Performance by Overseas Subsidiaries Performance of Consolidated Subsidiaries (Million Yen) France Thailand Singapore China Malaysia Number of stores at Mar. 31, 2018-including 11 9 3 0 5 FC stores- FY FY FY FY FY FY FY FY FY FY Period March March March March March March March March March March 2018
Slide 16: Expectations for the Business Environment (FY March 2019)
Expectations for the Business Environment (FY March 2019) Business Environment [Positive Factors] - Public interest in dashcams will continue to grow. - Demand for statutory safety inspections is expected to recover in the second half of FY March 2019 as a result of an increase in the number of vehi
Slide 17: Financial Forecasts (FY March 2019)
Financial Forecasts (FY March 2019) (Billion Yen) FY March 2018 FY March 2019 (Forecast) Result 1st-half 2nd-half Full year YoY change (% to Net sales) (% to Net sales) (% to Net sales) (% to Net sales) (amount & rate) Net sales 211.6 102.0 113.0 215.0 +1.6% Gross profit 67.3 32.7 36.1 68.8 +2.1% 31
Slide 18: Forecasts at Parent & Subsidiary Level (FY March 2019)
Forecasts at Parent & Subsidiary Level (FY March 2019) (Million Yen) FY March 2019 (Forecasts) YoY change 1st-half 2nd-half Full Year (amount) Domestic Net sales 82,440 93,500 175,940 -2.4% AUTOBACS Operating Business * income 6,480 9,320 15,800 -0.3% Net sales 6,680 6,610 13,290 +45.2% Overseas Bus
Slide 19: Capital Expenditures & Depreciation
Capital Expenditures & Depreciation Capital Expenditures Depreciation (Billion Yen) (Billion Yen) 7.0 7.0 6.12 5.89 6.0 6.0 4.81 4.84 5.0 5.0 4.57 4.42 4.16 4.03 4.00 3.84 4.0 4.0 3.58 3.03 3.0 3.0 2.0 2.0 1.0 1.0 0.0 0.0 FY FY FY FY FY FY FY FY FY FY FY FY March March March March March March March
Slide 20: Financial Strategy (Cash Flows and Shareholders Returns)
Financial Strategy (Cash Flows and Shareholders Returns) Model plan toward FY 2020 Operating CF Investing CF (Billion Yen) Shareholder Increase or returns Cash and Increase or decrease deposits 250億円 decrease Cash and Increase or deposits decrease Shareholder returns = 30 Portion exceeding cash and
Slide 21: Shareholders Return
Shareholders Return Dividends per share Dividends and share buyback (Yen) (Billion Yen) Amount of share buyback 80 1st Half 2nd Half 12 Dividend paid 70 10 60 8 50 Share 30 30 30 2.71 buyback is 6 40 0.00 uncertain. 30 4 20 30 30 30 2 4.95 4.95 5.00 10 0 0 FY March 2017 FY March 2018 FY March 2019 F
Slide 22: Progress of 2014 Mid-term Business Plan and Initiatives of FY March 2019
Ⅱ. Progress of 2014 Mid-term Business Plan and Initiatives of FY March 2019
Slide 23: Management Targets (FY March 2020)
Management Targets (FY March 2020) Consolidated Operating Income 12 Billion Yen Consolidated ROE 7％ ROE Image of Consolidated (Billion Yen) Operating Income and ROE Operating 20 7% 8.0% Income 6.0% 4.3% 10 12 BY 4.0% 2.3% 9 BY 7.2 BY 2.0% 5.8 BY 0 0.0% FY March FY March FY March FY March 2017 2018 2
Slide 24: 2017 Medium-term Business Plan: Review of the First Year
2017 Medium-term Business Plan: Review of the First Year Category Self-evaluation • Revitalization of franchisees and revenue growth Excellent at store subsidiaries • Improvement of merchandise development Good • Business model development Not sufficient • Development of mechanics and promotion of G
Slide 25: Value (Merchandise) Provided to Customers by AUTOBACS
Value (Merchandise) Provided to Customers by AUTOBACS “Self-expression” Motor sports goods, garage goods, ARTA-related products, etc. Demand for greater enjoyment of “Safety and driving “Value of Security” Experience” Tires, statutory Lifestyle-related inspections, Demand for Demand for goods, dashc
Slide 26: Domestic AUTOBACS Business: Images of Merchandise
Domestic AUTOBACS Business: Images of Merchandise Demand for comfortable use of a car “Safety and Security” Dashcams to warn of Tire Oil Battery Pedal Watcher driving in the wrong direction Demand for enjoyment using a car “Value of Experience” JKM glafit bike Campers Demand for greater enjoyment of
Slide 27: Domestic AUTOBACS Business: Effort on Lifestyle-related Products
Domestic AUTOBACS Business: Effort on Lifestyle-related Products Brand to develop Lifestyle market related to cars Sales since June 2017 About 76 Million Yen （Only Online store sales） March 2018 Real store Open 2019 ended March 31 Expand the number of JACK & MARIE Products JACK ＆ MARIE Yokohama BAY
Slide 28: Value (Store style) Provided to Customers
Domestic AUTOBACS Business: Value(Store style) Provided to Customers “Self-expression” SUPER AUTOBACS Demand for greater enjoyment of “Safety and driving “Value of Security” Experience” - AUTOBACS - AUTOBACS Demand for Demand for GARAGE - Smart+1 comfortable enjoyment - AUTOBACS - AUTOBACS Mini use
Slide 29: Development of Mechanics and Promotion of Store Employee Activities
Domestic AUTOBACS Business: Development of Mechanics and Promotion of Store Employee Activities 1. Launch of mechanic development program of Chain Growth Co., Ltd. 2. Promotion of acceptance of overseas technical trainees 3. Commendation of store attendants praised by customers (AUTOBACS Awards) 4.
Slide 30: Overseas Business: Examples of Activities in the ASEAN Region
Overseas Business: Examples of Activities in the ASEAN Region Thailand Started opening stores at gas stations operated by the PTG Group through an alliance with the PTG Group. Thailand- Samut Prakan 4 Store （January 19, 2018 opened） Singapore • Opened in-store shops at gas stations • Receive contrac
Slide 31: Used Car Buying, Car Dealership and BtoB Business
Used Car Buying, Car Dealership and BtoB Business Car purchase stores (independent stores) Underperformed because the number of cars assessed failed to reach the planned level at some stores. BtoB Business Focused on developing new corporate customers in the fiscal year ended March 31, 2018 in addit
Slide 32: Used Car Buying, Car Dealership and BtoB Business: Imported Car Dealer
Used Car Buying, Car Dealership and BtoB Business Imported Car Dealer Business Increase the number of store toward an efficient management as a AUTOBACS Group Transition of Operating income （Million Yen） for two Imported Car Dealers Subsidiaries 300.0 250.0 240 Tochigi BMW Utsunomiya Head Store 200.
Slide 33: Initiatives for FY March 2019: Domestic AUTOBACS Business
Initiatives for FY March 2019: Domestic AUTOBACS Business １．Stores Concentrate on sales of Tire and Statutory inspection, and Store Renovation ２．Head Office - Development of Merchandise - Optimization of the store in each area - Improvement of the profitability of the store subsidiaries 33
Slide 34: Initiatives for FY March 2019: Tire
Initiatives for FY March 2019: Domestic AUTOBACS Business Tire 1. Improve online sales 2. Increase product lines such as low-price products and all-season tires 3. Commenced the installation of snow tires in automatic lines - Reduce the burden of store workers and improve operation in the stores 34
Slide 35: Initiatives for FY March 2019: Statutory inspection
Initiatives for FY March 2019: Domestic AUTOBACS Business Statutory inspection Transition of number of cars Forecast of Statutory inspection market finished Statutory inspection 2019 ended March 31:＋1.6％ (Thousands cars) 700 680 1) Effort at stores 646 650 633 - 15-minute acceptance inspection 604 -
Slide 36: Initiatives for FY March 2019: Store renovations
Initiatives for FY March 2019: Domestic AUTOBACS Business Store renovations Demand for (goal: approx. 200 stores) greater enjoyment of driving Demand for Demand for comfortable enjoyment use of a car using a car People Aspect Physical Aspect Store renovations Improvement of store operation • Change
Slide 37: Initiatives for FY March 2019: Automobile Purchases and Sales Business
Initiatives for FY March 2019: Domestic AUTOBACS Business Automobile Purchases and Sales Business - Transfer to Domestic AUTOBACS Business in FY March 2019 - Close some unprofitable independent stores - Revise franchise agreement with FCs - Continue used car purchase business by renting spaces in fr
Slide 38: Initiatives for FY March 2019: Overseas Business
Initiatives for FY March 2019: Overseas Business Strengths of Autobacs Seven Overseas Demand in Overseas Markets - Carrying a Japanese brand - Reliable brands - Capable of purchasing - Reliable parts that are more merchandise in the local areas affordable than parts sold by - Strong sales capabiliti
Slide 39: Initiatives: Car Dealership, BtoB and Internet Business
Initiatives for FY March 2019: Car Dealership, BtoB and Internet Business Imported Car Dealer Business - Increase locations - Increase revenue at existing stores BtoB Business - Change organizations - Withdraw from unprofitable business alliances - Restructure logistics systems - Develop products by
Slide 40: Platform to connect customers with AUTOBACS stores
Initiatives for FY March 2019: Car Dealership, BtoB and Internet Business Platform to connect customers with AUTOBACS stores BtoC BtoB New Corporate customers customers Maintenance companies, etc. Orders and installation in stores Website Installation and maintenance in stores Existing customers 40
Slide 41: Profit Drivers of FY March 2019
Profit Drivers of 2019 ended March 31 0. Demand of tire switchback caused by snow＋Reaction of Consolidated (Million Yen) increased tire price operating profit 10,000 9,000 1. Domestic AUTOBACS Business - Increase sales of tires and statutory 8,000 7,284 inspection - Improve profitability of the stor
Slide 42: Create Future Together 2050 Professional and Friendly
AUTOBACS SEVEN VISON Create Future Together 2050 Professional and Friendly 42
Slide 43: APPENDIX
APPENDIX
Slide 44: Sales Trend: Retail & Wholesale
Sales Trend: Retail & Wholesale 【YoY change for the last 12 months】 40.0% 35.5% Strong tire sales due to a last- Sales Wholesale minute surge in demand ahead 30.0% of price hikes Increase in tires delivered 20.0% to stores due to price hike Strong sales of of winter tires winter products due to cold
Slide 45: Automobile purchase and sales (1)
Automobile purchase and sales (1) Commercial flow of car purchase and B2B sales (No. of cars denotes cumulative units for the nine months ended Dec. 31, 2018) FC Headquarters Appraisal and purchase Sales by auction consigned to FC Used car dealers Headquarters Auto auctions 2,693 cars Customers 17,2
Slide 46: Automobile purchase and sales (2)
Automobile purchase and sales (2) Commercial flow of retail sales (No. of cars denotes cumulative units for FY ended Mar 31, 2018) New car dealers New car dealers Auto auctions Used car dealers Auto auctions Procurement Procurement FC Headquarters Customers Purchase & Wholesale Vehicles Inventories
Slide 47: Results of Statutory Safety Inspection and Car Purchase & Sales Business
Results of Statutory Safety Inspection and Car Purchase & Sales Business Statutory safety inspection Car purchase and sales (total stores) (total stores) (Thousands cars) (Thousands cars) 40 700 680 646 35 34.0 650 633 604 29.8 29.6 589 30 27.1 600 25 23.9 550 500 20 450 15 400 10 350 5 300 0 FY Mar
Slide 48: Progress of New Store Openings (FY March 2018)
Progress of New Store Openings (FY March 2018) Location Owner of Domestic Store name Opening date (Prefecture) store 1 AUTOBACS CARS URAWAMISONO Store Saitama RC July 31, 2017 AUTOBACS Mini AEON MAll TAMADAIRA NO MORI 2 Tokyo RC August 3, 2017 Store 3 AUTOBACS Mini AEON MALL TAKAMATSU Store Kagawa R
Slide 49: Quarterly P/L (FY March 2018)
Quarterly P/L (FY March 2018) (Billion Yen) FY March 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2018 Net sales 49.9 48.1 66.5 47.0 211.6 YoY +5.1% +1.8% +1.0% +8.5% +3.7% Gross profit 15.3 16.3 20.5 15.1 67.3 （% of Sales） (30.7%) (34.0%) (30.9%) (32.2%) (31.8%) YoY +3.2% +3.6% -1.1% +2.7% +1.8%
Slide 50: Balance Sheet: Assets
Balance Sheet: Assets Total Assets Total Assets 176.7 BY 187.4 BY (Billion Yen) Major items changed Cash and 39.0 31.5 deposits Trade notes 20.0 and accounts receivable 23.6 Increase due to holiday of banks 15.3 Merchandise 16.4 Accounts 20.8 receivable 21.9 14.4 Other current assets 13.6 Tangible 4
Slide 51: Balance Sheets: Liabilities and Equity
Balance Sheets: Liabilities and Equity Total Liabilities & Equity 176.7 BY 187.4 BY (Billion Yen) Accounts payables Major items changed 12.8 Short-term 20.7 borrowings 5.9 3.2 11.4 Other short-term liabilities 12.6 0.6 2.1 11.3 Long-tem 11.4 borrowings Other long-term liabilities Total Dividends Pai
Slide 52: Store Openings and Closings (FY March 2018)
Store Openings and Closings (FY March 2018) No. of FY March 2018 No. of stores stores Domestic 1st Half 2nd Half at at March March stores 31, New S/B・ Close New S/B・ Close 31, R/L R/L 2017 2018 AUTOBACS 495 +2 -2 +4 -2 497 Super AUTOBACS 74 74 AUTOBACS Secohan Ichiba 9 -1 8 AUTOBACS EXPRESS 11 11 AU
Slide 53: Forward-Looking Statements
Forward-Looking Statements These materials include forecasts regarding the Company’s future plans, strategies, and performance. This information is based on judgments and forecasts made in accordance with information currently available. Actual results may differ materially from forecasts due to suc