BOOKOFF GROUP HOLDINGS LIMITED (TSE First Section: 9278) Financial Results Presentation Materials for the Fiscal Year Ended March 2020 (FY3/2020) June 18, 2020
Contents ・・・ Topics 2 FY3/2020 Overview of ・・・ 7 Consolidated Financial Results ・・・ Highlights of FY3/2020 15 Progress of the Medium-term Management ・・・ 29 Policies ・・・ Impact of the COVID-19 Crisis 47 ・・・ Appendix 56 *Financial data up to and including 1H FY3/2019 in these materials are consolidated figures for BOOKOFF CORPORATION. 1
Topics
Topics Consolidated Sales Ordinary Profit Profit ¥84. 3 billion ¥1. 89 billion ¥0. 24 billion 104 % 89 % 11 % Vs. FY3/2019 Vs. FY3/2019 Vs. FY3/2019 Higher sales but lower profit Big decrease in profit mainly because of one-time items in FY3/2019 3
Topics One-stop purchasing consultation desk 3 stores 5 stores opened opened 97 directly 2 stores operated existing opened in stores in Japan Malaysia renovated Restarted growth of the store network in FY3/2020 and renovations of existing stores are continuing 4
Topics Sell store inventory merchandise App members 1.55 million Store pick-up service More than 1.55 million smartphone app members Progress continues with creating a store/EC omni-channel structure 5
Topics Acquired Jewelry Asset Managers Inc., making the company a wholly owned subsidiary 6
FY3/2020 Overview of Consolidated Financial Results
Statement of Income YoY change YoY change FY3/2020 (Million yen) FY3/2019 (Amount) (Ratio) 84,389 Net sales 80,796 +3,593 104.4% 51,077 48,235 +2,841 105.9% Gross profit 49,648 46,684 +2,963 106.3% SG&A expenses 1,428 1,550 -121 92.2% Operating profit 1,898 2,120 -222 89.5% Ordinary profit Profit attributable to 240 2,172 -1,932 11.1% owners of parent ✓ Sales increased at directly operated existing stores in Japan and the conversion of franchised stores in Kyushu to direct operation and new store openings also contributed to sales growth. ✓ Small decreases in operating and ordinary profit mainly because of lower apparel sales, the result of the consumption tax hike and warm winter weather, and temporary store closings caused by typhoons. ✓ The big decline in profit attributable to owners of parent was partially the result of the reduction in income taxes in FY3/2019 because of group reorganization activities. 8
YoY Change in Net Sales Net effect of new/closed stores in FY3/2020 Up 2.3% YoY, including FY3/2019 and about ¥0.9 billion FY3/2020 ¥84.3 billion M&A increase in EC sales +1.40 Others Opening and closing of directly operated (0.13) Directly operated stores in Japan existing stores in Japan +0.74 +1.25 HUGALL ➢ 9 Kyushu stores (0.41) +0.75 converted from FY3/2019 E-commerce franchised to direct ¥80.7 billion center operation ➢ Acquired Jewelry Effect of links between Asset Managers Inc. store/e-commerce Resumed activities in inventories FY3/2020 for growth ～ ～ of this business 9
YoY Change in Ordinary Profit ➢ No loss as in FY3/2019 Slow apparel sales caused by the consumption tax hike and warm winter + weather reduced the gross profit margin Start of profitability ➢ Temporary closings caused by typhoons impacted earnings HUGALL +0.64 FY3/2020 Directly operated FY3/2019 ¥1. 89 billion existing stores in ¥2. 12 billion Japan Corporate Opening and (0.50) +0.01 operated stores +0.18 closing of directly Strategic Others investments (0.50) (0.06) Cost reductions IT investments, TV and other benefits commercials/PR activities, Store start-up of group M&A and other expenses expenses due to reorganization involving the “One resumption of new measures BOOKOFF” concept store openings 10
Effect of Unification of Classification Method for Purchasing Expenses (Million yen) FY3/2020 % to sales FY3/2020 % to sales 84,389 84,389 100.0% 100.0% Net sales Using the previous classification method 33,312 34,535 39.5% 40.9% Cost of sales 51,077 49,853 60.5% 59.1% Gross profit SG&A 49,648 48,245 58.8% 57.4% An adjusted 0.6 point expenses decrease from Operating 1,428 1,428 1.7% 1.7% 59.7% in FY3/2019 profit The new classification The entire BOOKOFF Group is using a single method for the classification of purchasing method reduced gross (merchandise procurement) expenses. This change is the result of mergers and other reorganization activities based on the “One BOOKOFF” concept and progress with profit by ¥ 1,223 million store/EC omni-channel measures. Due to this change, which started in 4Q FY3/2019, some expenses that were included in the cost of sales are now classified as SG&A 1.4 % of net sales expenses. This change has no effect on the operating profit margin. 11
Reasons for the Big Decrease in Profit Decrease in Increase in extraordinary losses ordinary profit ¥(0. 51 ) billion ¥(0 .22 ) billion Decrease in Impairment loss increased ¥0.31 billion from one year extraordinary income ¥(0 .14 ) billion earlier due to COVID-19 and other factors Loss on retirement of non-current assets increased ¥0.1 billion from one year earlier due to the consolidation and closing of distribution centers Increase in income taxes ¥(1. 03 ) billion In FY3/2019, there was a one-time reduction about ¥1 billion in income taxes associated with group reorganization activities Other ¥(0.02) billion Profit ¥0. 24 billion ✓ Extraordinary losses of ¥1.015 billion, including impairment loss and loss on FY3/2019 retirement of non-current assets (up ¥0.512 billion from FY3/2019) Profit ✓ Big decrease in profit attributable to owners of parent due to a reduction in ¥2. 17 billion taxes associated with group reorganization measures in FY3/2019 12
Balance Sheet (Million yen) Current assets Liabilities 30,762 23,704 23,765 34,574 28,687 27,640 Non-current assets Net 17,120 assets 17,830 12,848 16,882 13,006 13,307 As of Mar. 31, 2018 As of Mar. 31, 2019 As of Mar. 31, 2020 Ordinary profit 1,092 2,120 1,898 1,255 2,343 2,343 Treasury shares Equity ratio 27.5% 31.6% 30.7% ROA 2.2% 4.8% 4.6% (Ratio of ordinary profit to total assets) ✓ Non-current assets and liabilities increased primarily because of expenditures for new stores and IT systems, and M&A activity for the acquisition of franchised stores. 13
Statement of Cash Flows (Million yen) 3,543 2,751 2,668 (559) (940) (2,744) (3,394) (832) Cash flows from operating activities Cash flows from (9,895) investing activities Cash flows from financing activities FY3/2018 FY3/2019 FY3/2020 1,895 1,645 1,711 Depreciation* 24,480 17,535 17,920 Interest-bearing debt Interest-bearing debt-to- 9.2 6.4 5.1 operating cash flow multiple ✓ Operating cash flows increased mainly due to decline in income taxes *Including amortization of goodwill ✓ Big increase in cash used in investing activities because of substantial expenditures for new stores and IT systems ✓ Big improvement in cash flows used in financing activities because of cash used one year earlier for the redemption of bonds with share acquisition rights 14
Highlights of FY3/2020
FY3/2020 Policy End the group’s recovery phase and advance to consistent earnings growth. Make substantial investments to build a base for growth in the future. Business operations ➢ Continue to operate stores focused on their local markets (upgrade individual stores) ➢ Continue progress with “One BOOKOFF” to advance and grow ➢ Make HUGALL profitable in FY3/2020 and take on new challenges Organization and people ➢ Use the regional headquarters structure for unified operations of directly operated and franchised stores ➢ Increase training budgets and programs to enable employees to realize their full potential 16
More Authority Shifted to the Regional Level with Reorganization Directly-Managed Business Franchise Business Regional business units Branch offices Franchisee Franchisee Before operated operated operated Directly Directly Directly store store store Franchised Franchised Franchised Franchised store store store store Sendai office Omiya office Osaka office Fukuoka office Tokyo sales Regional Headquarters Nagoya department office Franchisee Franchisee Now operated Franchised Franchised operated operated Franchised Franchised Directly Directly Directly store store store store store store store In the new organization, directly operated and franchised stores are no longer separate. Furthermore, regions have more authority in order to allow making decisions at a level that is closest to customers. With this organization, stores can take actions faster and directly operated and franchised stores can more easily share their know-how and people. 17
Recommend
More recommend
