Japan Elevator Service Holdings Co., Ltd. · TSE:6544

Japan Elevator Service — FY2022 Earnings Presentation

47 slides from Japan Elevator Service's earnings presentation, May 18, 2022

  1. Slide 1: FY2022/3 Financial Results

    FY2022/3 Financial Results Japan Elevator Service Holdings (TSE Prime Market: 6544) May 18, 2022 Copyright © japan elevator service holdings all rights reserved

  2. Slide 2: Contents

    Contents 2 １ Summary ２ FY2022/3 Financial Highlights 3 FY2023/3 Financial Forecasts ４ Key Topics ５ Medium-Term Plan “VISION 2027” ６ ESG Initiatives Copyright © japan elevator service holdings all rights reserved

  3. Slide 3: Summary

    3 Summary Copyright © japan elevator service holdings all rights reserved

  4. Slide 4: Summary

    Summary 4 【Overview of FY2022/3】  Japanese economy still weighed down by COVID-19, but achieved record net sales of ¥29.75bn (+121.3% YoY), OP of ¥4.11bn (+113.9%) by providing support services for social infrastructure  Net increase in elevators under contract in Japan of approx. 11,500 to approx

  5. Slide 5: Summary: Overview of FY2022/3

    Summary: Overview of FY2022/3 5 Overview Maintenance ・End-March 2022 elevators under maintenance contracts (Japan): around 79,000 and Preservation ・Full-year net increase: around 11,500 (non-consolidated : around 7,400; M&A: around 4,100) Services: ・Contribution from M&A with Toyota Facility Service

  6. Slide 6: FY2022/3 Financial Highlights

    6 FY2022/3 Financial Highlights Copyright © japan elevator service holdings all rights reserved

  7. Slide 7: FY2022/3 Financial Results (Performance)

    FY2022/3 Financial Results (Performance) 7 (million yen) FY2021/3 FY2022/3 Change Forecast YoY Ratio Ratio （YoY） (as of Comments (%) to to （%） Nov 8, Actual Actual sales sales 2021) (%) (%) Maintenance & Preservation Services net sales up Net sales 24,521 100.0 29,751 100.0 121.3 104.4 28,500 ¥3,661

  8. Slide 8: FY2022/3 Financial Results (Sales by Business)

    FY2022/3 Financial Results (Sales by Business) 8 (million yen) FY2021/3 FY2022/3 Forecast YoY (as of Comments (%) Nov 8, Ratio Ratio 2021) Actual Actual (%) (%) Growth in net sales accompanying Maintenance and 17,476 71.3 21,137 71.0 120.9 20,410 increase in elevators under Preservation Services mai

  9. Slide 9: FY2022/3 Financial Results (B/S)

    FY2022/3 Financial Results (B/S) 9 (million yen) FY2021/3 FY2022/3 YoY (%) Comments Actual Ratio (%) Actual Ratio (%) Current assets 8,168 39.9 9,822 38.8 120.3 Cash and 1,674 8.2 2,179 8.6 130.2 deposits Notes and accounts 3,606 17.6 4,154 16.4 115.2 receivable Property, plant and Mainly an increas

  10. Slide 10: FY2022/3 Financial Results (Cash Flows)

    FY2022/3 Financial Results (Cash Flows) 10 (million yen) FY2021/3 FY2022/3 Change from Comments Actual Actual previous period Cash and cash equivalents 1,145 1,660 514 at beginning of period Cash flows from operating activities 3,018 3,005 △12 Decline in expenditure on Cash flows from investing acti

  11. Slide 11: FY2022/3 Dividends

    FY2022/3 Dividends 11 FY2021/3 FY2022/3 Change from Actual Actual Previous period Annual dividend amount ¥12 ¥14 +¥2 2nd quarter-end dividend - - - Year-end dividend ¥12 ¥14 +¥2 Commemorative dividend - - - Total dividend amount ¥1,062million ¥1,242million +180million Payout ratio (consolidated) 43.

  12. Slide 12: FY2023/3 Financial Forecasts

    12 FY2023/3 Financial Forecasts Copyright © japan elevator service holdings all rights reserved

  13. Slide 13: FY2023/3 Financial Forecasts

    FY2023/3 Financial Forecasts 13 1H 2H Full year Unit: million FY FY2023/3 FY FY2023/3 FY FY2023/3 yen; % 2022/3 Forecast 2022/3 Forecast 2022/3 Forecast Amount Amount YoY Amount Amount YoY Amount Amount YoY Net sales 13,906 15,500 111.5 15,844 16,500 104.1 29,751 32,000 107.6 Operating profit 1,828

  14. Slide 14: FY2023/3 Financial Forecasts (Sales by Business)

    FY2023/3 Financial Forecasts (Sales by Business) 14 1H 2H Full year FY FY2023/3 FY FY2023/3 FY FY2023/3 Unit: million yen; % 2022/3 Forecast 2022/3 Forecast 2022/3 Forecast Amount Amount YoY Amount Amount YoY Amount Amount YoY Maintenance and 10,112 11,100 109.8 11,024 11,500 104.3 21,137 22,600 106

  15. Slide 15: FY2023/3 Financial Forecasts (Depreciation, Capex)

    FY2023/3 Financial Forecasts (Depreciation, Capex) 15 (100 million yen) FY2022/3 FY2023/3（Forecast） Comments Depreciation 9.2 12.2 Investment in Capex 28.4 33.8 remote inspection service PRIME Trends in depreciation and capex (100 million yen) 40 33.8 30.0 30 28.4 25.8 23.8 Depreciation Capex 20 12.

  16. Slide 16: Key Topics

    16 Key Topics Copyright © japan elevator service holdings all rights reserved

  17. Slide 17: FY2022/3 Financial Highlights: Domestic Market

    FY2022/3 Financial Highlights: Domestic Market 17 Elevators under maintenance Net increase in maintenance contracts contracts in Japan Non-consolidated M&A Approx. 79,000 (As of March 31, 2022) 8,000 （unit） 7,000 6,800 Net increase in maintenance 7,000 contracts in Japan 5,900 6,000 2,400 Approx. 11

  18. Slide 18: FY2022/3 Financial Highlights: Expanded Share in New Regions

    FY2022/3 Financial Highlights: Expanded Share in New Regions 18 Recruitment aimed at expanding share of maintenance market in new regions Biggest ever recruitment drive in FY2022/3, Maintenance market share in legacy regions centered on Tohoku, West Japan, aimed at bolstering operations in new regio

  19. Slide 19: FY2023/3 Topics: Completion of New Facilities

    FY2023/3 Topics: Completion of New Facilities 19 The Kansai JIC (tentative name) is slated for completion in March 2024, aimed at raising margins in the West Japan area 【Purpose】 ・ Respond to need for Modernization Services in Western Japan region, where we expect major increase in elevators under c

  20. Slide 20: FY2023/3 Topics: New Business Initiatives

    FY2023/3 Topics: New Business Initiatives 20 Multi-front expansion of elevator-related business LiftSPOT Overseas rollout  Multi-front expansion of elevator-related business  Independent service providers said to account for  Helps prevent crimes within the elevator, and 50% share of overseas mai

  21. Slide 21: FY2023/3 Topics: Expansion into Malaysia

    FY2023/3 Topics: Expansion into Malaysia 21 Acquired 80% stake in COFRETH, a facility management business in Malaysia, converting into consolidated subsidiary 【Background】 We position expansion into ASEAN as one of our growth strategies, and have continued to grow overseas operations. • March 2020:

  22. Slide 22: Medium-Term Plan VISION 2027

    22 Medium-Term Plan VISION 2027 Copyright © japan elevator service holdings all rights reserved

  23. Slide 23: VISION2027

    VISION2027 23 【Basic Strategy】 Over the 28 years since its founding in 1994 through 2022, Japan Elevator Service has grown to become the leading independent elevator service company in Japan, with over 75,000 elevators under maintenance contracts. We aim to build upon the experience cultivated to da

  24. Slide 24: VISION2027

    VISION2027 24 Raise corporate value through growth, prosper together with all stakeholders Double the number of elevators under maintenance contracts in Japan Over 150,000 Operating profit margin Net Sales Over 60 billion yen 20% Operational Profitability growth Shareholder ESG returns Dividend payo

  25. Slide 25: VISION2027: Growth Targets: Elevators under Contract, Sales

    VISION2027：Growth Targets: Elevators under Contract, Sales 25 Raise elevators under contract to over 150,000 by 2027 Trends in elevators under contract, sales Maintenance Contracts Sales(100million) Over 60 billion yen After Listing CAGR 15%+ Over 150,000 320 297 245 213 179 135 153 104 118 150,000

  26. Slide 26: VISION2027: Growth Targets: Elevators under Contract, Sales

    VISION2027：Growth Targets: Elevators under Contract, Sales 26  Carried out upfront investment, focused especially on recruitment, to acquire share in West Japan and other new regions  Kansai JIC (tentative name) completion slated for March 2024, should drive growth in sales, margins, service capac

  27. Slide 27: VISION2027: Growth Targets: Share of Independent Service Providers

    VISION2027：Growth Targets: 27 Our Share of Market Served by Independent Service Providers Establish overwhelming lead among independent service providers through organic share capture plus M&A-driven operational expansion VISION Current Situation JES Group share amongst independent Maintenance Ratio

  28. Slide 28: VISION2027: Profitability Targets Operating Profit Margin

    VISION2027：Profitability Targets Operating Profit Margin 28 Productivity-driven profitability improvements through increase in elevators under contract, staff training, digitalization 1. Sales growth through increase in elevators under OPM (%) trends contract - Win contracts on 100,000 elevators, ch

  29. Slide 29: VISION2027: Shareholder Return Targets

    VISION2027： Shareholder Return Targets 29 Stable increase in EPS and DPS; dividend payout ratio of 40% or more Adjusted EPS (¥) Dividend payout ratio (%) 30.7 45.6 27.5 43.6 42.8 21.0 41.3 15.8 10.6 4.2 33.1 17/3 18/3 19/3 20/3 21/3 22/3 23.6 Adjusted DPS (¥) Keep dividend payout ratio above 40% 14.

  30. Slide 30: ESG Initiatives

    30 ESG Initiatives Copyright © japan elevator service holdings all rights reserved

  31. Slide 31: ESG Initiatives

    ESG Initiatives 31 ESG investment has been gaining recognition in Europe in particular and is now taking root within Japan. We believe the disclosure of ESG information is crucial, and indeed it is becoming a requirement. One of the reasons we have been able to achieve such rapid growth is that the

  32. Slide 32: E: Environmental Initiatives (1): Recycling/Refurbishing

    E：Environmental Initiatives (1): Recycling/Refurbishing 32 Promoting parts recycling and refurbishment Environment We prioritize the acquisition of recycled parts and maintain them in optimal condition We promote parts refurbishment, contributing to environmental efficiency E Use of recycled product

  33. Slide 33: E: Environmental Initiatives (2): Adoption of LED Lighting

    E：Environmental Initiatives (2): Adoption of LED Lighting 33 Adoption of LED Lighting Environment Promoting replacement of fluorescent lighting in elevators with LED lighting E We are working hard to promote the switchover to LED lighting, which is showing rapid growth. In this way, we help our cust

  34. Slide 34: E: Our Reduction in Greenhouse Gases

    E：Our Reduction in Greenhouse Gases 34 Contribution to environmental preservation from our Environment business activities The Japanese government aims for carbon neutrality by 2050. E We view initiatives to implement green supply-chain platforms as crucial. We have contributed to reducing GHG emiss

  35. Slide 35: E: Environmental Initiatives (3): JIC/JIL Environmental Initiatives

    E：Environmental Initiatives (3): JIC/JIL Environmental Initiatives 35 JIC/JIL environmental initiatives; coexistence with Environment local area; greenery development E  Solar power  Solar panels installed on roof, use of renewable energy  Improved HVAC efficiency through use of conveying fan  I

  36. Slide 36: S: Social Initiatives (1): Facilitating Female Participation

    S：Social Initiatives (1): Facilitating Female Participation 36 Facilitating Female Participation Social Create a working environment where women and men can work together and fulfill their potential S Based on the spirit of the Equal Employment Opportunity Act, and the concept of gender equaltiy in

  37. Slide 37: S: Social Initiatives (2): Working practices, Employee Benefits

    S：Social Initiatives (2): Working practices, Employee Benefits 37 Flexible working (direct-to-client travel; Social remote working) Based on government's working practice S reform, promote teleworking, travel to/from client site without need to check in at office Promote teleworking among head-offic

  38. Slide 38: S: Social Initiatives (3): Staff Training Initiatives

    S：Social Initiatives (3): Staff Training Initiatives 38 Staff Training Initiatives Social Enhance competence of maintenance engineers through proprietary training systems, develop diverse HR through tiered training S STEP24 (internal qualifications system) Improved technical competence, expanded car

  39. Slide 39: G: Governance Initiatives (1): Established Sustainability Committee

    G：Governance Initiatives (1): Established Sustainability Committee 39 Governance Established Sustainability Committee In May 2022, we established a Sustainability Committee sitting under the board of directors G Incorporates ESG concepts in management alongside former focus on remaining a going conc

  40. Slide 40: Corporate Governance Framework

    S：Social Initiatives (2): Corporate Governance Framework 40 Ratio of external directors Governance  Number of external directors increased by one since listing, ratio now at 33% ＜At the time of listing＞ G Adoption of incentive plans (have employees to become shareholders) February 2022 May 2018 Dir

  41. Slide 41: Financial Supplement

    41 Financial Supplement Copyright © japan elevator service holdings all rights reserved

  42. Slide 42: Reference: Our Growth

    Reference: Our Growth 42 Net sales ¥29.7bn Elevators under maintenance contracts Approx. 79,000 Net sales ¥24.5bn Elevators under maintenance contracts Approx. 67,500 Net sales ¥21.3bn Elevators under maintenance contracts Approx. 54,800 Net sales ¥13.5bn Elevators under maintenance contracts Approx

  43. Slide 43: Reference: Coverage 128 offices

    Reference: Coverage 43 JES HD ：3 offices JES Hokkaido ：9 offices JES Jyonan ：17 offices (+1) As April 1, 2022 JES Jyosai ：25 offices (+2) 128 offices JES Kanagawa ：20 offices (+1) JES Tokai ：9 offices JES Kansai ：7 offices (－2) JES Chushikoku ：5 offices (+5) JES Kyusyu ：2 office (+1) Japan Elevator

  44. Slide 44: Reference: Future Business Development

    Reference: Future Business Development 44 (Aiming to Build Up Global Standard Business) Domestic Overseas (mainly Southeast Asia) Bu sine ss Now Onwards Now and Onwards Steady increase in Aiming to reach a Maintenance number of Conduct research for local needs and market business scale on par mainte

  45. Slide 45: Reference: Financial Highlights (1)

    Reference: Financial Highlights (1) 45 Net sales Operating profit (Million yen) (Million yen) 29,751 4,113 3,612 24,521 21,339 2,717 17,900 15,326 2,034 1,351 FY18/3 FY19/3 FY20/3 FY21/3 FY22/3 FY18/3 FY19/3 FY20/3 FY21/3 FY22/3 Ordinary profit Profit attributable to owners of parent (Million yen) (

  46. Slide 46: Reference: Financial Highlights (2)

    Reference: Financial Highlights (2) 46 Net assets / total assets (Million yen) Net assets Total assets 25,338 20,473 14,297 10,624 11,484 10,505 11,756 5,177 2,870 3,937 FY18/3 FY19/3 FY20/3 FY21/3 FY22/3 Net assets per share Net income per share (Yen) 131.42 (Yen) 30.73 115.97 27.51 21.03 15.75 63.

  47. Slide 47: Disclaimer and Caution Concerning Forward-looking statements

    Disclaimer and Caution Concerning Forward-looking statements 47 Disclaimer  Japan Elevator Service Holdings (the “Company”) has prepared these materials for your reference, so that you may understand the current status of the Company  While these materials have been prepared based on generally-kno

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