Pan Pacific International Holdings Corporation Results for FY 2020 Earnings Results July 1, 2019 – June 30, 2020 August 12, 2020
FY2020 results at a glance PPIH delivered the highest sales and profits ! Increase in Double-digit growth Dividend Increase sales and profits 31 consecutive years 3 consecutive years 17 consecutive years Since 1989 (first store opened), Proper allocation of Sales, OP, recurring profit sales and profits are earnings recorded double-digit growth continuing to increase Consolidated growth Operating profit Forecast 26.6 ％ Increase Continuing increase 76 billion yen in sales and profits Front line staff members Successful portfolio Aiming for sales and OP growth are motivated as an management even in an for 32 consecutive years essential retailer unprecedented environment 1
Annual performance trends (JPY bn) (JPY bn) OP / # of stores Sales 800 18000 Sales 4Q 16000 700 3Q 2Q 14000 600 1Q 12000 OP 500 # of stores 10000 400 8000 300 6000 200 4000 100 2000 0 0 1989 1995 2000 2005 2010 2015 2020 *PPIH has been renewing sales and operating profit growth record over the past 31 consecutive years since FY1989, when the very first DQ store started its business in March 1989. (Consecutive growth record continued 24 years on a consolidated basis, since the start of consolidated accounting in FY1996.) 2
Earnings summary *1 12 months to June 2020 12 months to June 2019 Consolidated (Millions of yen) Actual Share YoY Actual Share 1,681,947 100.0% 126.6% 1,328,874 100.0% Net sales 481,689 28.6% 130.0% 370,527 27.9% Gross profit 405,692 24.1% 132.0% 307,417 23.1% SG&A 144,791 8.6% 129.9% 111,485 8.4% Salary allowance 53,895 3.2% 127.9% 42,131 3.2% Rent 61,240 3.6% 139.9% 43,772 3.3% Commission paid Depreciation and 24,595 1.5% 122.9% 20,012 1.5% amortization 121,171 7.2% 134.6% 90,017 6.8% Others 75,997 4.5% 120.4% 63,110 4.7% Operating profit 75,173 4.5% 110.2% 68,240 5.1% Recurring profit Profit attributable to 50,303 3.0% 106.9% 47,066 3.5% owners of parent － － *2 79.39 106.8% 74.36 EPS (Yen) *1. With regard to UNY consolidation as of January 4, 2019, the provisional accounting conducted in the previous fiscal year was finalized in 2Q FY2020, and the figures has been updated to the confirmed data. 3 *2. The stock split (1:4) conducted on September 1, 2019 was calculated assuming that it took place at the beginning of the previous fiscal year.
Earnings summary (comment) In the drastically changing external environment such as a series of unusual weather, the consumption tax hike and the outbreak of Covid-19, PPIH is committed to “Customer matters the most” principle to execute business strategies. PPIH achieved sales and operating profit increase for 31 consecutive fiscal years since the first store opened in March 1989. Renewing highest net profit for the 11 consecutive years. Net profit continued to update its highest from FY 2010. Sales, operating profit and recurring profit made double digit growth for 3 consecutive years. Growth rate progress: Sales 13.6% ⇒ 41.1% ⇒ 26.6%, operating profit 11.7% ⇒ 22.4% ⇒ 20.4%, recurring profit 25.7% ⇒ 19.3% ⇒ 10.2% (cf. Net profit: 10.0% ⇒ 29.3% ⇒ 6.9%) Annual dividend increased for 17 consecutive years, and total dividends increased for 23 consecutive years. In summary, PPIH recorded sales of 1,682 bil yen(up 26.6% YOY), operating profit of 76 bil yen (up 20.4% YOY), recurring profit of 75.2 bil yen (up 10.2% YOY) and net profit attributable to owners of the parent of 50.3 bil yen (up 6.9% YOY). Full-year guidance for FY 2021; expecting 32 consecutive years of growth in sales and OP. Sales of 1.7 trillion yen (up 1.1% YoY), operating profit of 77 billion yen (up 1.3% YoY), recurring profit of 76 billion yen (up 1.1% YoY) and net profit attributable to owners of the parent of 51 billion yen (up 1.4% YoY). 4
Sales breakdown by product category 12 months to June 2020 12 months to June 2019 Consolidated (Millions of yen) Actual Share YoY Actual Share 86,114 5.1% 107.5% Home electrical appliances 80,125 6.0% 241,846 14.4% 104.3% 231,835 17.5% Miscellaneous household goods 421,152 25.0% 120.0% 350,897 26.4% Foods 154,419 9.2% 95.1% Watches & fashion merchandise 162,397 12.2% 59,404 3.5% 106.3% 55,889 4.2% Sporting goods & leisure goods *1 8,611 0.5% 55.7% 15,448 1.2% DIY goods 114,514 6.8% 118.1% Overseas 96,996 7.3% 31,447 1.9% 140.8% 22,337 1.7% Other products Total discount store business 1,117,507 66.4% 110.0% 1,015,924 76.5% (Former Don Quijote HD stores) 61,863 3.7% 173.2% Clothings 35,719 2.7% 75,698 4.5% 233.8% 32,378 2.4% Household goods 340,595 20.3% 183.6% 185,532 14.0% Foods 13,465 0.8% 108.3% Other products 12,429 0.9% Total GMS business 491,621 29.2% 184.8% 266,058 20.0% (Former UNY group stores) 58,229 3.5% 148.8% 39,132 2.9% Tenant leasing business 14,590 0.9% 188.0% 7,760 0.6% Other business 1,681,947 100.0% 126.6% 1,328,874 100.0% Total sales 5 *1. PPIH divested Doit which handles DIY goods on February 1, 2020.
Sales breakdown by product category Home electrical appliances While beauty appliances were sluggish, home appliances such as air purifiers and cooking appliances were good. Miscellaneous household goods Needs for daily consumables such as detergents and paper products increased. H y gienic products suc h as masks and sterilization products recorded h igh growt h rates. Foods Preserved groceries such as instant noodles and canned food towed the sales. Eggs, dairies, rice, and alcoholic beverages contributed considerably. Watches & fashion merchandise Items for going out, such as clothing and shoes struggled mainly due to stay-at-home movement. Luxury goods for indoor use contributed. Sporting goods & leisure goods Indoor fitness equipment such as yoga mats and dumbbells grew. Popular animation goods and puzzles were strong. DIY goods Needs for disaster prevention supplies increased in the event of natural disasters. Exterior products such as construction parts slumped. Overseas Fresh foods, processed and prepared foods were strong. Sanitary products and daily consumables recorded high growth. Total discount store business With demonstrating the adapting ability to the rapidly changing external environment, (Former Don Quijote HD stores) domestic sales took the lead while outdoor and inbound demands struggled. Clothing Unusual weather and cancellation of graduation events had a negative impact on outer clothing. Underwear and dressing gowns were good. Household goods Daily consumables such as shampoos and seasonal appliances were positive. With swift supply of hygienic products, customer loyalty increased. Foods Processed foods such as frozen and instant foods grew. Bread and dairies were popular. Total GMS business While clothing struggled, housing-related products performed well due to growth in (Former UNY group stores) home appliances and hygienic products. In food, preserved foods were strong. 6
Balance sheet (Millions of yen) (Millions of yen) As of June 30, Change from As of June 30, Change from 2020 June 30, 2019 Consolidated 2020 June 30, 2019 Consolidated 312,227 (29,547) 496,760 355 Total current liabilities Total current assets 148,226 (10,838) 179,785 7,112 Accounts payable Cash and deposits 25,117 (17,543) 68,293 876 Short-term liabilities* Installment account receivable 596,005 7,979 190,397 1,887 Total noncurrent liabilities Merchandise 226,542 (11,916) 802,188 16,493 Long-term bonds Total non-current assets 276,191 19,414 264,035 1,080 Long-term borrowings Buildings Long-term payables under fluidity 191 (4,512) 325,499 6,919 Land lease receivables 908,232 (21,568) 36,883 (719) Total liabilities Intangible assets 390,716 38,416 78,624 (1,819) Net assets Lease and guarantee deposits 1,298,948 16,848 1,298,948 16,848 Liabilities and net assets Total assets * Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds Assets : Major reasons for increase in assets were cash and deposits (+7.1 bil yen), merchandise (+1.9 billion yen), non-current asset (+16.5 bil yen). Liabilities : Decreased items; Accounts payables – trade (-13.4 bil yen), deposits received (-2.6 bil yen), interest bearing debt (-10 bil yen) and payables under fluidity lease receivables (-7.3 bil yen). Interest bearing debt stood at 527.9 billion yen with 40.6% dependency rate. Net D/E ratio: 0.93 times. Net asset was 390.7 bil yen. 7
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