Slide 1: Analyst Guide FY2016
ANALYST GUIDE FY2016 October 2016 (Listed on the 1st Section of the Tokyo Stock Exchange; Code 7447) <Contact for information on this material: Mr. Ohno, Administration Headquarters (03-5289-8200)>
Slide 2: I About NAGAILEBEN
I About “NAGAILEBEN” 1
Slide 3: Outline
Outline 100th year in business 1 Establish competitive position in medical clothing market -Approximately 60% market share -Wide field, planning, manufacturing and in domestic medical clothing marketing - The number of shipments is over 6 -Competitive product such as extensive products, million clot
Slide 4: Profitability, shareholder policies, social responsibility
Highly profitability and strong balance sheet 3 - Realization of high profitability with radical pursuit of efficiency (%) 50 45 Change of Gross profit to sales 33.1% 46.8% (2016) -Gross profit to sales 46.8% (as of FY2016) 40 (1990) 45.3% 20.8% (2010) -Capital-to-asset ratio 88.8% 35 (1980) 39.7% -
Slide 5: Agenda
Agenda I About “NAGAILEBEN” II Financial Review FY2016 III Market Environment IV Forecast for FY2017 V Management Goals VI Rewarding shareholder-focused policies 4
Slide 6: Overview FY2016
Overview FY2016 Sales & Income 1 Net Sales and Operating income recorded highest. Sales: ¥16.5 b Operating income: ¥4.9 b The Change of Business Environment 2 - Market Condition: The impact of Medical treatment fees revision was negligible - Production Condition: Escalating material prices, rising s
Slide 7: II Financial Review FY2016
II Financial Review FY2016 6
Slide 8: Financial Highlights <Statements of Income>
Financial Highlights <Statements of Income> (millions of yen,%) FY2016 % Change To Forecast % Composition % Composition % Change Net sales 16,537 +2.4 +0.2 100.0 - Gross profit 7,735 +2.7 +1.9 46.8 +0.2 Sales, general, and 2,784 +2.4 +0.3 16.8 +0.0 administrative expenses Operating income 4,950 +2.9
Slide 9: 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 19,504 +830 +4.4 Cash and cash equivalents up ¥830million Notes and accounts receivable 4,866 +177 +3.8 -Cash flows from operating a
Slide 10: Segments by item
Segments by item Healthcare wear Patient wear Shoes Doctors' wear Utility wear Surgery wear 9
Slide 11: Sales by Item
Sales by Item Doctors' 16.1% 3.6% Utility [Healthcare wear] Patient -Though y/y change of sales in first-half was +0.2%, that 9.8% of second-half was +4.3%. New products and new contracts contributed to the sales. Surgery 9.5% [Doctors' wear] Healthcare Shoes -Sales of high functional products was s
Slide 12: Sales by Region
Sales by Region Central Japan 10.4% [East Japan] West Japan - Sales reached highest record. Though sales in first- 36.8% half FY2016 declined slightly, y/y change of sales in second-half FY2016 was +4.2%. Sales in 3Q, which is demand season, contributed to growth. [Central Japan] -Market size was no
Slide 13: III Business Environment
III Business Environment 12
Slide 14: Business Environment Topics
Business Environment Topics Stable market condition continues -The impact of revising medical treatment fees is negligible. - The number of Nursing Staff and Care workers is increasing gently. Rising sewing costs Overseas: The cost of labor charge around China and Southeast Asia is rising. In Japan:
Slide 15: Market Environment
Market Environment 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 Proposed d
Slide 16: Market Environment
Market Environment Revisions to medical treatment and care Service fees （％） 5 Service: +0.49% 4 Drug price: -1.33% +2.8 +3.0 Consumption 3 +2.6 tax increase 2 +1.0 +1.2 1 +0.8 +0.6 +0.4 +0.2 +0.2 +0.0 +0.1 0 -1 ▲0.3 ▲0.1 ▲0.8 ▲0.8 -2 ▲1.3 ▲2.3 ▲2.4 ▲2.3 -3 Medical Care Service ▲3.2 Home-1.42%, -4 Fa
Slide 17: Market Environment: Supply and Demand of Nursing Staff
Market Environment Supply and Demand of Nursing Staff (Source: the Ministry of Health, Labor and Welfare (December 2010)) (10,000 persons) Actual(2014) Change to actual number as 175 1.6 m Demand from the 7th Outlook. persons Forecast Actual Decreased number of nursing staff on both supply 150 and d
Slide 18: Market Environment: Care workers
Market Environment (10,000 persons) 300 Supply and estimated future need for care workers Forecast 253 250 Actual 200 150 253 100 169 177 156 141 148 124 128 113 119 50 100 89 66 76 55 0 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '25 Since the number of track records are subject to the
Slide 19: Market Environment: Supply and estimated future need
Market Environment Supply and estimated future need (10,000 persons) 300 Nursing Staff care workers 253 250 forecast(maximum) forecast(minimum) 206 200 Actual 150 253 100 196 177 157 50 0 2013 2025 2013 2025 Actual record: Japanese Nursing Associations’ statistical data Actual record: Ministry of He
Slide 20: IV Forecast for FY2017
IV Forecast for FY2017 19
Slide 21: Management Tasks and Status
Management Tasks and Status •Capture clusters of needs Marketing strategy in the healthcare wear market to boost sales •Increase peripheral business in products for patients and surgery •Develop new markets •Strengthen domestic production (wage increase) Production strategy to •Strengthen ties with
Slide 22: Forecast Statements of Income
Forecast Statements of Income (millions of yen,%) FY2017E % Change (FY2015) Composition % Change Net sales 17,000 +2.8 － Gross profit 7,945 +2.7 -0.1 Sales, general, and administrative expenses 2,839 +2.0 -0.1 Operating income 5,106 +3.1 +0.1 Recurring income 5,150 +4.3 +0.4 Net income 3,528 +8.2 +1
Slide 23: Forecast of Sales by Item
Forecast of Sales by Item Sales by Item (¥ million) Year-on-year change FY2016 FY2017E 18,000 Sales +2.4% +2.8% 16,000 Shoes/Others 14,000 Healthcare wear +2.6% +2.8% Surgery wear 12,000 Doctors' wear +2.0% +2.1% Patient wear 10,000 Utility wear -10.3% -8.6% 8,000 Utility wear Patient wear +11.1% +7
Slide 24: Forecast of Sales by Region
Forecast of Sales by Region Sales by Region (¥ million) Year-on-year change FY2016 FY2017E 18,000 Total sales +2.4% +2.8% 16,000 14,000 Overseas East Japan +2.2% +1.7% 12,000 Central Japan -3.2% +4.8% West Japan 10,000 West Japan +4.1% +3.6% 8,000 Central Japan Overseas +14.1% +9.5% 6,000 4,000 East
Slide 25: Product Strategy
Product Strategy Sales by Product (¥ million) Year-on-year change FY2016 FY2017E 18,000 Sales 2.4% +2.8% 16,000 DC brand products -14.8% -5.7% DC brand 14,000 products High Functional products +7.8% +6.2% 12,000 High Functional Standard Functional -0.9% 0.0% 10,000 products products 8,000 Standard M
Slide 26: Production Strategy
Production Strategy Production(Non-Consolidated) (¥ million) (%) 10,000 50 Composition FY2016 FY2017E Purchased products Domestic production 51.2% 50.5% 7,500 45 Overseas production 47.4% 48.1% Overseas production Purchased products 1.4% 1.4% 5,000 40 Domestic production 2,500 35 Ratio of overseas p
Slide 27: V Management Goals
V Management Goals 26
Slide 28: 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 functional products. Profit Strategy -Driving the strategy of higher quality and value-added products. -The shift to overseas production. -The mi
Slide 29: Sales by Products
Sales Strategy FY2013 FY2016 FY2019E (3 terms ago) (Previous term) (3 terms later) net sales ¥15,625 million ¥16,537 million ¥18,000 million Healthcare Doctors' 58% 57% 16% 58% 16% 16% Sales by Item Utility 2% 5% 4% Patient 8% 10% Patient 12% 10% Surgery 3% Surgery 10% Others 2% 2% 11% Central Japan
Slide 30: Net Sales and Gross Profit to Sales Ratio
Net Sales and Gross Profit to Sales Ratio (¥ 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 17E18E19E (FY) Note: Con
Slide 31: VI Rewarding shareholder-focused policies
ⅤI Rewarding shareholder-focused policies 30
Slide 32: Profit Reimbursement to Shareholders
Profit Reimbursement to Shareholders 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% S
Slide 33: The History of Stock Value
The History of Stock Value BPS EPS DPS （Yen） （円） （yen） （yen） （yen） 1,100 100 FY2001 532.5 50.8 12.5 FY2002 568.3 48.0 12.5 1,000 FY2003 604.0 52.4 15.0 FY2004 663.0 60.5 30.0 FY2005 700.0 56.7 30.0 900 75 FY2006 732.4 61.0 30.0 ※1 FY2007 764.3 61.9 30.0 800 FY2008 783.9 57.1 30.0 FY2009 791.0 42.9 3
Slide 34: 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 FY2005 1,117 0 56.9 56.9 FY2006 1,117 0 53.4 53.4 FY2007 1,117 0 53.1
Slide 35: 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 /
Slide 36: 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
Slide 37: Data File
Data File FY2016 (Listed on the 1st Section of the Tokyo Stock Exchange;Code 7447) <Contact for information on this material: Mr. Ohno, Administration Headquarters (03-5289-8200)>
Slide 38: 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
Slide 39: 1. Sales by Item
1. Sales by Item (¥ million) First-half First-half FY 13/8 14/8 15/8 16/8 17/8E 15/8 16/8 Sales 15,625 16,214 16,150 16,537 17,000 6,840 6,938 (¥ million) Healthcare wear 9,039 9,440 9,429 9,674 9,950 4,011 4,021 18,000 Doctors' wear 2,566 2,674 2,604 2,654 2,710 1,046 1,067 Utility wear 796 743 670
Slide 40: 2. Sales by Product
2. Sales by Product (¥ million) First-half First-half (¥ million) FY 13/8 14/8 15/8 16/8 17/8E 15/8 16/8 18,000 Sales 15,625 16,214 16,150 16,537 17,000 6,840 6,938 DC brand products 933 938 846 720 680 366 305 16,000 High Functional products 7,212 7,795 8,090 8,720 9,260 3,457 3,716 Standard Functi
Slide 41: 3. Sales by Region
3. Sales by Region (¥ million) First-half First-half FY 13/8 14/8 15/8 16/8 17/8E 15/8 16/8 (¥ million) Sales 15,625 16,214 16,150 16,537 17,000 6,840 6,938 18,000 East Japan 8,390 8,461 8,357 8,539 8,680 3,430 3,406 Central Japan 1,591 1,745 1,774 1,717 1,800 787 717 16,000 West Japan 5,508 5,839 5
Slide 42: 4. Rationalization of the Production System and Purchasing Strategy
4. Rationalization of the Production System and Our Purchasing Strategy(Non-Consolidated) (¥ million) First-half First-half (¥ million) (％) FY 13/8 14/8 15/8 16/8 17/8E 10,000 50 15/8 16/8 Domestic production 4,951 5,061 4,901 4,771 4,770 2,495 2,430 Overseas production 3,550 4,017 4,215 4,419 4,537
Slide 43: 5. Statements of Income (Consolidated)
5. Statements of Income (Consolidated) (¥ million) First-half First-half FY 13/8 14/8 15/8 16/8 17/8E 15/8 16/8 Net Sales 15,625 16,214 16,150 16,537 17,000 6,840 6,938 Gross profit 7,346 7,585 7,532 7,735 7,945 3,187 3,174 Sales, general, and administrative expense 2,473 2,662 2,719 2,784 2,839 1,3
Slide 44: 6. Statements of Income (Non-Consolidated)
6. Statements of Income (Non-Consolidated) (¥ million) First-half First-half FY 13/8 14/8 15/8 16/8 17/8E 15/8 16/8 Net Sales 15,616 16,199 16,141 16,535 17,000 6,831 6,937 Gross profit 7,031 7,270 7,218 7,416 7,615 3,053 3,034 Sales, general, and administrative expenses 2,482 2,662 2,718 2,775 2,82
Slide 45: 7. Indices (Consolidated)
7. Indices (Consolidated) First-half First-half (Unit) 12/8 13/8 14/8 15/8 16/8 15/8 16/8 Profitability ROE (%) 7.8 9.7 9.5 9.3 9.4 - - ROA (%) 14.3 15.0 13.5 13.0 12.7 - - Return on sales Net income (%) 15.6 20.0 19.9 20.0 19.7 - - ROE resolution Total Assets Turnover (Times) 0.4 0.4 0.4 0.4 0.4 -
Slide 46: 8. Indices (Non-Consolidated)
8. Indices (Non-Consolidated) First-half First-half (Unit) 12/8 13/8 14/8 15/8 16/8 15/8 16/8 Profitability ROE (%) 7.8 10.3 10.1 9.8 10.0 - - ROA (%) 14.1 15.7 14.2 13.7 13.4 - - Return on sales Net income (%) 14.4 19.3 19.4 19.4 19.2 - - ROE resolution Total AssetsTurnover (Times) 0.5 0.5 0.5 0.5
Slide 47: 9. Statements of Income (Consolidated)
9. Statements of Income (Consolidated) (¥ million,%) (¥ million,%) FY 15/8 16/8 Change(the previous year) First-half 15/8 First-half 16/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Net Sales 16,150 100.0 16,53
Slide 48: 10. Statements of Income (Non-Consolidated)
10. Statements of Income (Non-Consolidated) (¥ million,%) (¥ million,%) FY 15/8 16/8 Change(the previous year) First-half 15/8 First-half 16/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Net Sales 16,141 100.0
Slide 49: 11. Balance Sheet (Consolidated)
11. Balance Sheet (Consolidated) (¥ million,%) (¥ million,%) FY 15/8 16/8 Change(the previous year) First-half 15/8 First-half 16/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Current assets 29,711 76.2 29,083
Slide 50: 12. Balance Sheet (Non-Consolidated)
12. Balance Sheet(Non-Consolidated) (¥ million,%) (¥ million,%) FY 15/8 16/8 Change(the previous year) First-half 15/8 First-half 16/8 Change(the previous year) Result Composition Result Composition Result Change % Result Composition Result Composition Result Change % Current assets 26,494 74.6 25,8