FY 2012 Financial Results Presentation Materials May 14, 2013 BOOKOFF Corporation Ltd. （ TSE First Section: 3313 ） 0
Contents 1. Prior Period (FY 2012) Financial Report ・・・・ P3 ～ 11 Overview 2. Current Fiscal Year (FY 2013) Plan ・・・・ P12 ～ 16 Overview ・・・・ 3. Business Strategy P17 ～ 40 ・・・・ 4. Prior Period (FY 2012) Financial Data P41 ～ 47 ・・・・ 5. Additional Information P48 ～ 55 Note Concerning Forward-Looking Statements: The plans, strategies, and financial forecasts presented in these materials contain forward-looking statements not based on historical fact. Forward-looking statements are based on management judgments using information available at the time. Actual results may vary significantly from forecasts due to changes in the business environment and other factors. (Contact) BOOKOFF Corporation Ltd. Corporate Planning Department 1
Overview Despite prior-year (FY 2012) profit gains in Reuse Business and Online, lower customer traffic at existing BOOKOFF stores led to lower profits for the fiscal year Net Sales ¥76.67 billion (1.3% year-on-year gain), Operating Income ¥2.366 billion (37.8% decrease), Net Income ¥1.058 billion (43.3% decrease) Current-period (FY 2013) forecast: Operating income ¥2.3 billion, nearly in line with prior-period results Higher profit in Existing Stores, New-Store growth, and Online; advance investment in New Businesses expected to grow over the medium and long term. Strategies to rebuild customer traffic at BOOKOFF stores, the Group's main revenue driver Result of integrated chain-wide campaigns during year-end holidays: Correction in Seller numbers; future scheduled campaigns (two this period) should lead to recovery in Buyers Continued roll-out of BOOKOFF SUPER BAZAAR (BSB), comprehensive large- format stores leading Group growth; five new BSB planned for FY 2013 comprehensive medium-format BOOKOFF PLUS repackaging in progress; strategies combining large-format and medium-format planned to drive share growth in the reuse market 2
1. Prior Period (FY2012) Financial Report Overview
Prior Period (FY2012) Financial Report 1. Prior Period (FY2012) Financial Report Overview Overview Vs. Initial Vs. 2/8 Ｖ FY 2011 FY 2012 Change Ratio Ratio YoY Unit: million yen Plan Forecast 75,716 76,670 +953 -3,329 +670 Net sales 101.3% － － 52,027 52,484 +456 100.9% BOOKOFF 11,117 12,548 112.9% +1,430 Reuse 92.6% 12,572 11,638 -933 Packaged Media ・Other 3,432 1,914 -1,518 -1,285 -85 Operating income 4.5% 2.5% 55.8% 5,197 3,395 -1,802 BOOKOFF 200 465 +265 Reuse -31 -127 -96 Packaged Media ・Other Corporate -1,934 -1,819 +115 3,803 2,366 -1,133 +16 -1,436 Ordinary income 5.0% 3.1% 62.2% 1,867 1,058 -641 +58 -809 Net income 2.5% 1.4% 56.7% Net sales roughly ¥900 million higher; ordinary income about ¥1.4 billion lower year-on-year. Ordinary income underperformed initial plan by ¥1.1 billion (as announced in revised earnings statement published February 8). 4
Initial Plan Assumptions, Actual, 1. Prior Period (FY2012) Financial Report Overview Assessments Assess Plan Assumptions Progress ment ・ Existing store net sales YoY ： 95.0% ・ Existing store net sales YoY ： 98.0% ・ Gross margin ratio ： +0.1% ・ Gross margin ratio ： +1.0% Limited use of coupons expected to add +1.0% BOOKOFF Sales promo revisions: to Gross Profit Ratio; however, 2H stronger Limited use of sales, coupons purchase policies resulted in increased purchase unit costs, Gross Profit level with PY. Existing ・ YoY net sales ： 103.0% ・ YoY net sales ： 102.0% Reuse ・ Gross margin ratio ： +3.4% ・ Gross margin ratio ： +1.0% Limit use of coupons Higher utilities costs (higher usage in Other year following March 11 disaster; rate In line with plan hikes) ・ 7 BSB ・ 7 BSB （ +2 YoY ） New Stores ・ 3 BO urban large-format stores ・ 2 BO urban large-format stores But, delays in sales run up ・ Limited use of sales, coupons → Stronger sales promos In line with plan ・ Rolled out mobile phone business to Other Change in TV commercial strategy all stores, stronger sales promos (Branding → Sales Promotion) ・ POS changeover in FC (three-year rollout complete) 5
1. Prior Period (FY2012) YoY net sales Financial Report Overview TSUTAYA New Issues, Other Unit: million yen Online +747 Other -86 +953 Reuse Store Closing -238 Reuse PY New Stores ＋ 430 Resue CY New Stores ＋ 1,238 76,670 75,716 BOOKOFF existing stores -2,894 BOOKOFF PY New Stores ＋ 828 BOOKOFF CY New Stores ＋ 1,862 Packaged Media, Reuse BOOKOFF other +456 +1,430 -933 FY 2011 FY 2012 Growth in PY New Stores, CY New Stores and expanded Online offerings contribute to higher revenues. But, slight overall gain due to BOOKOFF existing store revenue declines. 6
1. Prior Period (FY2012) YoY Ordinary Income Financial Report Overview BOOKOFF existing stores Unit: million yen Lower Revenues -1,043 -1,436 BOOKOFF PY New Stores ＋ 150 Existing Reuse stores +378 BOOKOFF CY New Stores -367 Reuse PY New Stores +227 Foreign Exchange Reuse CY New Stores -298 Gain+77 Other +45 In line 3,803 with plan Stronger sales promo (TV) TSUTAYA -202 Investment (sales promo) in New Issues +87 new products (mobile phones) Online ＋ 180 Negative Goodwill -64 electricity costs, 2,366 Other -43 Other +37 POS rollout -600 Packaged BOOKOFF Reuse Company Media, other -1,723 +307 +122 -142 FY 2011 FY 2012 Ordinary income ¥1.4 billion lower vs. prior year; ¥1.1 billion lower vs. initial plan (next page). PY new store growth, existing Reuse stores, and Online report higher profits; however, BOOKOFF existing stores, sales run-up in new stores, TSUTAYA profit declines have large impact. 7
1. Prior Period (FY2012) Ordinary Profit vs. Plan Financial Report Overview BOOKOFF Unit: million yen existing stores Lower Revenues -1,000 Foreign Exchange -1,133 Existing Gain, other Reuse stores +37 +300 3,500 Online +100 Sales runup of New Stores 2,366 -400 TSUTAYA Lower Revenues -170 FY 2012 FY 2012 Initial Plan Result 8
1. Prior Period (FY2012) PY (FY 2012) Review Financial Report Overview 3Q Briefing Materials Sales, Coupons Issued in FY 2011 and Republished Existing Store Existing Store Buyers vs. PY Buyers vs. PY Coupon Redemption Rate (vs. Total Net Sales/Right Axis) Year Avg. 2.7% Time s Sales Promos per Store (left axis)* Annual total 12,000 times Annual total 12,000 times Per-store 3.2x/month Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar *Excluding corporate-wide campaigns FY2011 FY 2011 existing store net sales almost level with PY; however, store stand- alone sales discounts and overuse of coupons led management to identify issues in poor store operations. 9
1. Prior Period (FY2012) PY (FY 2012) Review Financial Report Overview 3Q Briefing Materials FY 2012 Initial Management Policies Republished and Progress Initial Plan Assumptions Review selling prices, sales promotions for medium- and long-term progress Fundamental rethinking of sales discounts and coupons. Existing Store Buyers vs. PY Limit use of sales discounts and coupons; shift approach to 95.0% call-to-action TV commercials. (shift away from discounts toward promotions) Unexpected decrease in Sellers led to greater decrease 1H Progress in Buyers than projected While policy measures resulted in fewer customers during 1Q within Existing Store Buyers vs. PY projected scope, Fewer Buyers stemming from an unexpected decrease in 92.6% Sellers; Fewer purchases → reduced sales capacity leading to greater decrease in Buyers than projected. 2H Recovery Measures More effective promotions, roll-out campaign to generate activity Management determined that promotions to drive non-discounted sales Year-End Holiday was insufficient. Corporate-Wide Campaign Year-end holiday corporate-wide buying/selling campaign; linked to TV commercials maximizing effect and recovery for customer traffic. 10
1. Prior Period (FY2012) PY (FY 2012) Review Financial Report Overview 3Q Briefing Materials Republished FY 2012 BOOKOFF Existing Stores Sellers Customer Traffic vs. PY Dec 22-31 Sellers vs. PY 108.5% Buyers Jan 1-3 Buyers vs. PY 110.6% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Campaigns timed with peak activity and linked to TV commercials led to improved results. Sellers increased after end of campaign; however, Buyer recovery was not sufficient. The Company will continue activity-generating campaigns on regular basis to bring back Buyer numbers. 11
2. Current Fiscal Year (FY 2013) Plan Overview
Current Fiscal Year (FY 2013) Plan 2. Current Fiscal Year (FY 2013) Plan Overview Overview FY 2012 FY 2013 Ratio Ratio YoY Change Unit: million yen result plan 76,670 80,000 ＋ 3,329 － － 104.3 ％ Net sales 1,914 1,900 -14 2.5 ％ 2.4 ％ 99.2 ％ Operating income 2,366 2,300 -66 3.1 ％ 2.9 ％ 97.2 ％ Ordinary income 1,058 1,000 -58 1.4 ％ 1.3 ％ 94.5 ％ Net income 57.30 yen 53.81 yen -3.49 yen EPS 25 yen 25 yen － Dividend （ plan ） Capital 3,497 3,300 -197 Investment Depreciation & 2,391 2,400 Level with PY amortization Projecting increased revenues with new store sales and growing Online business; however, profits nearly level with prior year due to advance investment in new businesses. 13
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