FY3/2025
Second Quarter (Interim Period)
Financial Results Briefing
AOYAMA TRADING Co., Ltd.
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To Our Stakeholders
We would like to appreciate all of our stakeholder's support of the Aoyama Trading Group.
As described in this document, the first year of the New Medium-Term Management Plan was tough start. However, we will try to achieve our plan by new initiatives starting in the second half of the year.
From now on, we will start innovation for achievement of the Mid-Term Management Plan and improvement of under 1x P/B with greater determination.
We are looking forward to more support of our stakeholders.
President
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- Measures to Realize Management Conscious of Cost of Capital and Stock Price
- The First Half of FY3/2025 Results and Revised Plan
- The First Half of FY3/2025 Results and Initiatives for the Second Half by Segment
- Initiatives of Sustainability
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© Aoyama Trading Co., Ltd. All Rights Reserved.
- Measures to Realize Management Conscious of Cost of Capital and Stock Price
- The First Half of FY3/2025 Results and Revised Plan
- The First Half of FY3/2025 Results and Initiatives for the Second Half by Segment
- Initiatives of Sustainability
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Summary
Recognized P/B of 0.4x as a critical level in the board of directors
P / B of 1 x cannot be achieved through only shareholder returns,
growth of our business performance is essential.
We have determination to advance Business Wear Business's transformation
and challenges at an unprecedented speed.
Following decisions were made for Mid-Term Management Plan
■ Growth Strategy
- Aim to grow through Business Wear Business's transformation. Challenge five basic strategies in the Mid-Term Management Plan.
- The progress of the following strategies of Business Wear Business is slow.
Maintain and improve profitability of existing stores Expanding market share through new store openings
■ Shareholder Return
- We discussed that a DPS range of 110 yen to 130 yen is
necessary to maintain a dividend yield of 3% to 3.5% at a P/B of 1x.
(The current share price corresponds to a dividend yield of about 8%)
- Need to improve asset and capital efficiency
- Formulate new growth strategies
- Proceed fundamental organizational reform
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- Adopt the higher of the consolidated payout ratio 70% or DOE 3%
- Flexible share repurchases (Maximum of 10 billion yen)
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- Re-analysisof the Current Situation and Sort Out Perceptions
- Initiatives to Increase Corporate Value
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Measures to Realize Management Conscious of
Cost of Capital and Stock Price
A part of materials of "FY3/2025 to FY3/2027 Mid-Term Management Plan"
released on May 14, 2024
Based on the above, we aim to increase our corporate value through increase in net income and improving asset efficiencies by implementing five "Basic Strategies".
Need to re-analyze the current situation and sort out perceptions
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Re-analysis of the Current Situation (Changes in PBR)
PBR was on a recovery trend after the pandemic, but it has been
on a declining trend since the beginning of this fiscal year.
■ Trend of change at the end of the fiscal year (FY3/2018 to FY3/2024)
1 | 0.92 | ||||||
0.8 | |||||||
0.6 | 0.56 | 0.49 | |||||
0.4 | 0.23 | 0.25 | 0.20 | 0.28 | |||
0.2 | |||||||
0 | |||||||
2018/3 | 2019/3 | 2020/3 | 2021/3 | 2022/3 | 2023/3 | 2024/3 |
- Net assets per share (actual) and share price (closing price) are as of the end of each fiscal year.
- Trend of change at the end of the month (April 2024 to September 2024)
0.50.49
0.45 | |||
0.45 | 0.43 | 0.42 | 0.43 |
0.41 | |||
0.4 | 0.38 |
0.35
0.3
2024/3 | 2024/4 | 2024/5 | 2024/6 | 2024/7 | 2024/8 | 2024/9 |
* Net assets per share: Figures for March to July are as of the end of March 2024 (actual)
Figures for August and September are as of the end of June 2024 (actual) Stock prices (closing prices) : as of the end of each business month.
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Re-analysis of Current Status (Analysis of ROE)
ROE
(%)
Improvement of asset efficiency index, but low level
in the three indicators of ROE breakdown
2018/3 | 2019/3 | 2020/3 | 2021/3 | 2022/3 | 2023/3 | 2024/3 |
5.0 | 2.6 | - 8.1 | - 21.8 | 0.8 | 2.6 | 5.9 |
Net sales
4.5
5.0
0.0
2.3
0.8
5.2
2.3
Despite the
Net income
rate (%)
Turnover of total assets (times)
Financial leverage
(×)
2018/3
▲5.0
▲10.0
- 0.65
0.4
2018/3
2.1
2
1.9
1.8 1.72
1.7
1.6
2018/3
2019/3 2020/3 2021/3
▲7.8
0.64
0.57
0.46
2019/3 2020/3 2021/3
1.98
1.84
1.76
2019/3 2020/3 2021/3
2022/3 2023/3 2024/3
0.56 0.58
0.51
2022/3 | 2023/3 | 2024/3 |
2.03 | 2.01 | 1.96 |
2022/3 2023/3 2024/3
improvement, more
raise needed
↓
Implement in Mid- Term Management Plan
Despite the
improvement, still at a low level. More improvement needed.
↓
Improve asset
efficiency
↓
Review balance
sheet
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Clarification of Current Status
Growth strategy,
performance and issues
Shareholder Return
Basic Strategy of Mid- Term Management Plan (Growth Strategy) gave no impact to the market.
Delayed Business Wear
Business strategy
(Order, stores, inventory,
etc.)
We judged that shareholder
return was insufficient by recent
market trends and industry
First half results couldn't achieve
+
Delayed system replacement /
Response to new lease accounting
growth potential
consideration of the company's
financial balance, etc.
P / B was down to around 0.4 x
Need to update the content of promotion for conscious of cost of capital and stock price
To increase corporate value
Formulate new growth strategies | Change in dividend policy |
Proceed fundamental organizational | |
Flexible share repurchases | |
reform | |
Smooth communication with investors | Review of capital allocation and set |
appropriate balance sheet | |
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