Rizap Group, Inc. · SAPSE:2928
Rizap — FY2019 Earnings Presentation
122 slides from Rizap's earnings presentation, May 15, 2019
Slide 1: Earnings Presentation Fiscal Year Ended March 2019
Earnings Presentation Fiscal Year Ended March 2019 May 15, 2019 RIZAP GROUP, Inc. (Sapporo Securities Exchange’s Ambitious 2928) Copyright © 2018 RIZAP GROUP, Inc. All rights reserved.
Slide 2: Disclaimer
Disclaimer RIZAP GROUP, Inc. (hereinafter referred to as the “Company”) has produced this document for the provision of corporate information on the Company and the Company’s group companies (hereinafter referred to collectively as the “Company Group”) and it does not constitute an inducement toward
Slide 3: Review of Restructuring Policies
Review of Restructuring Policies (p. 20, Earnings Presentation for Second Quarter of the Fiscal Year Ending March 2019, issued November 14, 2018) Future Policy Change some of the Group’s strategies, formulate new policies and concentrate on early management reorganization Restructuring policies 1. F
Slide 4: Overview of Restructuring
Overview of Restructuring H2 FY2019/3 FY2020/3 FY2021/3 and beyond (October 2018 – March 2019) (April 2019 –) (April 2020 –) Phase I Phase II Phase III (Period for eliminating (Building the foundations for (Toward a growth track) negative factors) growth) Freeze on new M&A activities in principle
Slide 5: Trends in Consolidated Operating Income
Trends in Consolidated Operating Income Phase I Phase II (Period for eliminating negative factors) (Building the foundations for growth) (¥bn) +1.3 +1.3 -1.8 3.2 +2.4 +9.3 -3.3 Plans call for shifting -4.7 into the black in -9.3 FY2020/3 -3.8 +2.5 FY2019/3 Additional Failure to Exclusion of FY2019/3
Slide 6: Returning to a growth track
Finalizing losses in the short term Returning to a growth track 6
Slide 7: Index
Index Highlights P8 Overview of the Consolidated Results for FY 2019/3 P23 Review of Restructuring P36 1. Enhancing Group Business Administration P37 2. Management reorganization of Group Companies P47 Forecast for FY2020/3 P70 Updates on the RIZAP businesses P79 Appendix P118 7
Slide 8: Highlights
Highlights 1. Revenue was 222.5bn yen Record high for 7 consecutive periods 2. Recording operating loss of 9.3bn yen with progress of restructuring * Operating losses from continuing businesses 3. Toward shifting into the black in FY2020/3 8
Slide 9: Additional Operating Losses
Additional Operating Losses (¥bn) 23.0 -6.0bn yen YoY -3.3 -9.3 Initial Revised Actual result forecast forecast of FY2019/3 (announced May 2018) (announced Nov. 2018) (operating income from continuing businesses) 9
Slide 10: Summary of Restructuring Expenses
Summary of Restructuring Expenses Strategic store Devaluation of product Impairment of closures, etc. inventories goodwill, other 4.0bn yen 4.0bn yen 1.3bn yen Total 9.3bn yen 10
Slide 11: Proceeding Resolutely with Restructuring
Proceeding Resolutely with Restructuring 3. Devaluation of product 1. Policy changes 2. Decisions on large- inventories accompanying strategic scale store closures accompanying store review closures Example: Shift in business model from merchandise sales to experience provision Holding events in s
Slide 12: Proceeding Resolutely with Restructuring: Numbers of stores
Proceeding Resolutely with Restructuring 3. Devaluation of product 1. Policy changes 2. Decisions on large- inventories accompanying strategic scale store closures accompanying store review closures Already Reserves Implementing strategic Total closed allocated store closures for Numbers of 219 stor
Slide 13: Moving ahead with inventory devaluation
Proceeding Resolutely with Restructuring 3. Devaluation of product 1. Policy changes 2. Decisions on large- inventories accompanying strategic scale store closures accompanying store review closures Amount of Type of inventory devaluation CDs, DVDs 1.84bn yen Moving ahead with Sports 0.48bn yen Ente
Slide 14: Impact of Restructuring Expenses
(Ref.) Impact of Restructuring Expenses Impairment of stores, products, etc. Impairment of unprofitable stores, Impact on profits, cash dead stock, etc. <BS> <PL> Other ( ) Impairment expenses Operating ( ) income Most aspects of <CF> restructuring involve scrutinizing assets. No impact Because no o
Slide 15: Details of Restructuring Expenses
Details of Restructuring Expenses Impact for Asset Restructuring Total Asset 200.9 202.3 201.7 (¥bn) 180.3 174.4 118.1 127.0 Compressed asset 83.6 82.6 95.6 101.2 with progress of 69.6 restructuring Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 201
Slide 16: IFRS differs from Japanese standards
The RIZAP Group applies International Financial Reporting Standards (IFRS), which differ from Japanese standards 16
Slide 17: J-GAAP vs IFRS
< J-GAAP > < IFRS > Liabilities Costs Sales Assets Increase in net assets Comprehensive income Profits Net assets Stressing the PL Statement, differences Stressing the Balance Sheet, the between revenues and costs are increase in net assets is recognized recognized as profits as “comprehensive incom
Slide 18: J-GAAP vs IFRS income statement
< J-GAAP > < IFRS > Revenue Revenue Cost of sales Income and Cost of sales Gross profit expenses from the core business Gross profit Income from all SG&A SG&A the businesses Operating income (excl. financial Other income/expenses revenue/expenses) Income and Non-operating income/expenses expenses fr
Slide 19: As a Result...
As a Result... (¥bn) < J-GAAP > < IFRS > Adjusted Operating Income Operating Income (IFRS) 11.7 10.2 6.1 4.2 0.4 -9.3 FY2017/3 FY2018/3 FY2019/3 FY2017/3 FY2018/3 FY2019/3 *Adjusted operating income = revenue (under IFRS) – cost of sales – SG&A 19
Slide 20: Discontinued Business (1)
Discontinued Business (1) Japan Gateway Inc. Transferred Japan Gateway, where short-term revenue improvement will be difficult, as part of the selection and concentration of business (Date of transfer: Jan. 25, 2019) Manrakuan Inc. ・Entered the Group in December 2017 ・Developed large-scale promotion
Slide 21: Discontinued Business (2)
Discontinued Business (2) Tatsumi Planning Sale of detached housing and remodeling businesses as part of business selection and concentration efforts (Planned date of sale: End of May 2019) Tatsumi Planning Co., Ltd. Takamatsu Construction Group Detached housing business (Takamatsu Construction Co.,
Slide 22: Partial Transfer of SD Entertainment Inc.
(Ref.) Partial Transfer of SD Entertainment Inc. Transfer the entertainment business which is only loosely involved with the self-investment industry Announced a basic agreement with regard to a transfer to Hokkaido SO Capital, Co., Ltd. (Date of transfer: Dec. 20, 2018) SD Entertainment Inc. Sugai
Slide 23: Consolidated Results for FY2019/3
Consolidated Results for FY2019/3 23
Slide 24: Consolidated Results Summary (IFRS)
Consolidated Results Summary (IFRS) (¥bn) FY 18/3 FY19/3 Change Change % (Apr. – Mar.) (Apr. – Mar.) Revenue 122.0 222.5 +100.4 182.3% Cost of sales 59.6 124.2 +64.5 208.3% SG&A 57.9 97.8 +39.8 168.7% Other income and expenses 7.4 -9.8 -17.1 - Operating income or loss 11.7 -9.3 -21.1 - Income before
Slide 25: Operating Loss from Continuing Businesses
Operating Loss from Continuing Businesses (¥bn) 11.7 -21.1bn yen 10.2 YoY Restructuring related ▲33 expenses -9.3 -9.3bn yen FY2017/3 FY2018/3 FY2019/3 25
Slide 26: Operating Loss from Continuing Businesses (1)
Operating Loss from Continuing Businesses (1) The Unlisted Subsidiaries (excluding the RIZAP businesses) Surpluses of the unlisted subsidiaries Deficits of the unlisted subsidiaries (¥bn) -1.33bn yen 2.98 2.97 YoY -1.01 0.31 Main deficits of the unlisted subsidiaries 2.67 SANKEI LIVING -0.92bn yen K
Slide 27: Operating Loss from Continuing Businesses (2)
Operating Loss from Continuing Businesses (2) The Listed Subsidiaries (IFRS) Surpluses of the listed subsidiaries Deficits of the listed subsidiaries (¥bn) 9.26 -13.21bn yen 8.64 15.7 YoY -4.57 -0.61 Main deficits of the listed subsidiaries ＊ WonderCorporation -4.82bn yen -6.14 PADO -0.50bn yen Tota
Slide 28: Operating Income of Listed Subsidiaries
(Ref.) Operating Income of Listed Subsidiaries *Dream Vision adopts IFRS JEANS Mate (J-GAAP) Wonder Corporation (J-GAAP) Idea International (J-GAAP) MRK (J-GAAP) HAPiNS (J-GAAP) (¥mil) 91 (¥mil) (¥mil) (¥mil) (¥mil) 900 481 620 453 415 381 151 133 -609 FY18/3 FY19/3 FY18/2 FY19/3 FY18/6 FY19/6 FY18/
Slide 29: Advance Investments
(Ref.) Advance Investments (¥bn) FY2019/3 Q1 Q2 Q3 Q4 Total （Apr. – Jun.) （Jul. – Sep.） （Oct. – Dec.） （Jan. – Mar.） (1) Increased marketing expenses Total amount of advertising expenses and sales promotion expenses +1.9 +1.6 -0.7 +0.8 +3.6 (2) Increased expenses associated with new store openings an
Slide 30: The RIZAP Businesses Revenue
The RIZAP Businesses Revenue (¥bn) 41.3 32.9 138% YoY 23.2 *The RIZAP businesses: FY2017/3 FY2018/3 FY2019/3 In addition to the RIZAP Body Making business, this also includes the RIZAP-related (Apr. – Mar.) (Apr. – Mar.) (Apr. – Mar.) products and services, and the subsidiaries acquired during FY201
Slide 31: The RIZAP Body Making Business Operating Income
The RIZAP Body Making Business Operating Income Body Making business (¥bn) operating income grew 3.5x in the past 3 years FY2017/3 FY2018/3 FY2019/3 (Apr. – Mar.) (Apr. – Mar.) (Apr. – Mar.) 31
Slide 32: Consolidated Financial Position (IFRS)
Consolidated Financial Position (IFRS) Streamline the balance sheet by selling non-operating assets As of March 31, 2018 As of March 31, 2019 (Total assets 174.3 billion yen) (Total assets 180.3 billion yen) (¥bn) Current liabilities Current liabilities Current assets 80.5 Current assets 82.5 116.6
Slide 33: Financial Soundness (1)
Financial Soundness (1) Cash and Cash Equivalent Current Net DE Ratio Ratio (¥bn) (%) 43.6 42.2 160 151.5% 150 144.7% 24.6 142.3% 140 130 *Current ratio = current asset / current liability*100 120 Mar. 31 Mar. 31 Mar. 31 Mar. 31 Mar. 31 Mar. 31 2017 2018 2019 2017 2018 2019
Slide 34: Financial Soundness (2)
Financial Soundness (2) Interest-bearing Debt DE Ratio (¥bn) (times) 76.8 2.0 62.7 1.8 1.6 1.9x 1.8x 1.4 41.2 1.2 1.0 1.2x 0.8 0.6 0.4 0.2 *DE ratio = interest-bearing debt / equity attributable to owners of the parent 0.0 Mar. 31 Mar. 31 Mar. 31 Mar. 31 Mar. 31 Mar. 31 2017 2018 2019 2017 2018 2019
Slide 35: Financial Soundness (3)
Financial Soundness (3) Total Equity Equity Ratio (¥bn) 54.7 35.0% 30.4% 30.0% 42.8 25.0% 20.0% 24.6% 22.4% 21.4 15.0% 10.0% 5.0% *Equity ratio = total equity (net assets) / total liabilities and equity *As of Dec. 31, 2018, equity attributable to owners of the parent was 26.6% 0.0% Mar. 31 Mar. 31
Slide 36: Review of Restructuring
Review of Restructuring 36
Slide 37: 1. Enhancing Group Business Administration
Review of Restructuring 1. Enhancing Group Business Administration 37
Slide 38: Issues Identified in Group Business Administration and Countermeasures
Issues Identified in Group Business Administration and Countermeasures Countermeasures for Issues identified improvements Delays in building a governance Board of Directors reforms structure Inviting new outside Directors Implementing innovations in the Growing complexity of Group Group organization
Slide 39: Improvements in Governance
Issue (1) Delays in Building a Governance Structure Improvements in Governance Before After Chairperson of the Board ① ② ① Representative Representative Director Director ② ③ Representative Outside Outside ③ ④ ⑤ ⑥ ⑦ Director ④ ⑤ ⑥ ⑧ ⑨ ⑩ ⑪ ⑫ Outside Outside Outside Outside Outside Outside 12 director
Slide 40: New Outside Director Candidate
Issue (1) Delays in Building a Governance Structure New Outside Director Candidate Former vice president and Director, Nippon Avionics Co., Ltd. representative director of Partner/Managing Director, Industrial Sumitomo Corporation Growth Platform, Inc. Former president and Representative Director/CE
Slide 41: Implementing Innovations in the Group Organizational Structure
Issue (2) Growing Complexity of Group Company Management Implementing Innovations in the Group Organizational Structure RIZAP Group (Pure holding company) Consolidating all Group member companies under 10 core subsidiaries RIZAP Trading company/logistics Trading subsidiary companies 10 core Wonder I
Slide 42: Establishment of RIZAP Investment
Issue (2) Growing Complexity of Group Company Management Establishment of RIZAP Investment A new intermediate holding company coordinating businesses in new domains Businesses in areas other than beauty, 1 Maximizing profits in businesses in new healthcare, and lifestyle consolidated as domains busi
Slide 43: Establishment of RIZAP Trading
Issue (2) Growing Complexity of Group Company Management Establishment of RIZAP Trading Improving quality and efficiency through spinoff of logistics and purchasing functions Logistics operations of Group companies Spinning off purchasing and logistics Until now supported by the RIZAP Group (holding
Slide 44: Adopting business administration KPIs
Issue (2) Growing Complexity of Group Company Management Adopting business administration KPIs グループガバナンス強化及び企業価値の最大化を図る 項目 単位 target 評価 2019/3期 2018/3期 2017/3期 2016/3期 総資本営業利益率 ％ 10%以上 × ▲9.42 7.74 10.66 9.22 営業利益率 ％ 10%以上 × ▲7.35 9.91 10.71 9.14 自己資本当期利益率 ％ 10%以上 × ▲39.67 21.40 35.50 19.20 総資産回転率 回
Slide 45: Cross-Group Cost-Cutting Project (R50)
Issue (3) Growing Inefficiencies Including Duplicate Costs Cross-Group Cost-Cutting Project (R50) Selling and administrative expenses targeted for reduction (Group consolidated) Targeting reductions of ¥11.5 B ¥10.5 B ¥8.4 B ¥57.8 B HR costs, etc. Advertising and Rents Sales 5.0bn yen a year promoti
Slide 46: Improving Cash Flow Project
Issue (3) Growing Inefficiencies Including Duplicate Costs Improving Cash Flow Project Measures Target 1 Promoting cross-Group cost-cutting and streamlining measures Operating CF Normalizing inventories centered on the apparel 2 and retail businesses Operating CF Normalizing accounts receivable by r
Slide 47: 2. Management reorganization of Group Companies
Progress of Restructuring 2. Management reorganization of Group Companies 47
Slide 48: PADO
PADO <Added to the Group in March 2017> Achieving enhancements in management foundations and profitability （百万円） improvements as主な修正要因 restructuring advances Revenue Operating income (¥ million) 228 (¥ million) Joined RIZAP Group 4,877 135 53 3,878 3,780 6 3,661 3,582 3,415 3,418 3,119 -137 -174 Joi
Slide 49: PADO
PADO Strengthening profitability by improving management efficiency and （百万円） increasing media value 主な修正要因 Sales from publication of Sales from media targeting household media (¥ million) affluent consumers (¥ million) 1.40 1.38 1.36 1.37 1.34 1.32 1.30 1.28 Sales/issue per 507 AFFLUENT: media targ
Slide 50: PADO
PADO Reducing selling and administrative expenses by making Living Proseed a （百万円） subsidiary 主な修正要因 Selling and administrative expenses (¥ million) Transfer of HR outsourcing businesses Consolidated (temporary staffing, recruitment) to the 49.1% 1,437 RIZAP Group Ratio of selling and 225 Living
Slide 51: Sankei Living
Sankei Living <Added to the Group in March 2018> Achieving profitability in the second period since joining the Group through progress on （百万円） restructuring; advancing to the phase of growing profits 主な修正要因 Revenue (¥ million) Operating income (¥ million) 39 11,233 11,011 10,480 Joined RIZAP Group
Slide 52: Sankei Living
Sankei Living Moving ahead with the digital shift and joint efforts with PADO while continuing （百万円） 主な修正要因 to reduce selling and administrative expenses Selling and administrative expenses Optimizing staffing (¥ million) Closing regional bases scattered across the 5,194 Approx. ¥900 million cou
Slide 53: PADO and Sankei Living joint efforts
PADO Sankei Living Enhancing joint efforts as media businesses and making progress on bringing advertising and promotions in house FY2020/3 media business policies Digitalization of existing Launching community Growing media value and businesses logistics business promoting streamlining Promoting
Slide 54: WonderCorporation
WonderCorporation <Added to the Group in March 2018> Recording large-scale extraordinary losses to return to a growth track; improving profitability during the next period FY2018/2 FY2019/3 FY2020/3 forecasts (March – February) (March – March) (April – March) * Irregular 13-month settlement of accou
Slide 55: WonderCorporation
WonderCorporation Operating income is declining at GOO stores, which account for a significant share. Operating income by segment (¥ million) * Percentages in parentheses are YoY changes. 90 stores 98 Operating TSUTAYA franchises and other outlets 89 stores （-46.1%) Poor rental sales Retail sales of
Slide 56: WonderCorporation: Strategic store closures
WonderCorporation Breaking away from traditional retail sales based on purchased merchandise to provide services based on consumer experiences Strategic store closures Implemented in FY2019/3 22 stores (Reserves have also been allocated for planned closures in FY2020/3.) 56
Slide 57: WonderCorporation
WonderCorporation Improving profitability by shifting to services based on consumer experiences CD/books sales Music festivals Trading card floor venues 57
Slide 58: Conditions of Other Listed Subsidiaries
Conditions of Other Listed Subsidiaries 58
Slide 59: MRK HOLDINGS
MRK HOLDINGS <Added to the Group in July 2016> Trade name changed from Maruko Corporation on October 1, 2018 Achieving record-high operating income in H2 thanks to effects of investments in H1* * Compared to operating income levels since change in fiscal years (FY2013/3) Revenue Operating income (¥
Slide 60: MRK HOLDINGS
MRK HOLDINGS Continuing to open new stores and relocate/remodel other (32 stores in total during period) Before After MARUKO Shibuya opened in August 2018 after relocation and remodeling. 60
Slide 61: MRK HOLDINGS
MRK HOLDINGS Large-scale gains in customer numbers due to new products, store remodeling, and enhanced advertising and promotions Trends in numbers of active customers Curvaceous, a new main product line (people) Joined RIZAP Group 68,798 TV commercials: Signed Shohei Miura 61,643 61,505 (Broadcast
Slide 62: JEANS Mate
JEANS Mate <Added to the Group in February 2017> Achieving final profitability for the first time in 11 periods, thanks to restructuring, advanced since the company joined the Group Revenue Operating income (¥ million) Joined RIZAP Group Joined RIZAP Group (¥ million) 9,924 9,818 9,308 9,727 175 Num
Slide 63: JEANS Mate
JEANS Mate Existing store sales increased YoY thanks to advancement of store strategies and merchandising reforms 110 YoY changes in existing store sales 106.0 (％) 102.8 99.3 100 98.5 97.5 Private brand products Remodeled JEM Shibuya opened in Joined RIZAP Group (BLUE STANDARD) October 2018 90.9 90
Slide 64: JEANS Mate
JEANS Mate Large-scale store reforms implemented since joining the Group Before After 64
Slide 65: HAPiNS
ＨＡＰｉＮＳ <Joined the Group in May 2016> * Trade name changed from Passport Co., Ltd. on August 1, 2018 Achieved profitable operating income for two successive periods thanks to successful proactive store openings Revenue Operating income (¥ million) (¥ million) Joined RIZAP Group Joined RIZAP Group 12
Slide 66: HAPiNS
ＨＡＰｉＮＳ Revising existing store concept and continuing to implement store reforms (Before joining the Group) HAPiNS Kinshicho Parco (Opened March 2019) Former Passport Shimizu Clarifying the brand concept, with a focus on pursuing a relaxed home lifestyle 66
Slide 67: HAPiNS
ＨＡＰｉＮＳ Reformed product strategies led to 17 consecutive months of revenue growth. YoY change in monthly revenue Narrowing the average number of products handled (SKUs) per store (％) Reduced by approx. 80% in FY2020/3 140 Strengthening sales promotions for strategic products Improving efficiency
Slide 68: Idea International
Idea International <Added to the Group in September 2013> Record high 3Q cumulative figures thanks to strategic product deployment under the BRUNO brand Operating income (July – March) BRUNO hot plate (¥ million) 386 Cumulative sales: more than 1.4 million units (end of Joined RIZAP Group March)
Slide 69: Trends in Operating Income After M&A
Trends in Operating Income After M&A ＊Operating income announced by each subsidiary 3 years 2 years 1 year Year of (¥mil) before before before 1st year 2nd year ３rd year ４th year ５th year ６th year M&A M&A M&A M&A Idea International Sep. 2013 23 84 -526 45 249 182 401 415 620* SD Entertainment Jan. 2
Slide 70: Forecast for FY2020/3
Forecast for FY2020/3 70
Slide 71: FY2020/3 Forecast
FY2020/3 Forecast (¥bn) FY2019/3 2020/3 Change Change % [actual] [forecast] Revenue 222.5 225.0 +2.5 +1.1% Operating income or loss -9.3 3.2 +12.5 - Net income attributable to owners of the parent -19.3 0.5 +19.8 - 71
Slide 72: Trends in Consolidated Operating Income
Trends in Consolidated Operating Income (¥bn) +1.3 +1.3 -1.8 3.2 +2.4 +9.3 Plans call for shifting into the black in FY2020/3 -9.3 FY2019/3 Restructuring Improving Increased HQ cost Other growth FY2020/3 operating loss expenses revenues in revenues in reductions investments, etc. operating (actual)
Slide 73: Benefits for Shareholders
Benefits for Shareholders Expanding the shareholder benefits system to encourage long-term shareholding (1) Awarding points that can be (2) Increasing number of e-commerce accumulated for up to three years sites where points can be used Points awarded in accordance with numbers of Start providing co
Slide 74: Shareholder benefits index
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Slide 75: Shareholder benefit products
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Slide 76: Shareholder benefit products
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Slide 77: Shareholder benefit products
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Slide 78: Shareholder benefit products
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Slide 79: The RIZAP Businesses
The RIZAP Businesses 79
Slide 80: Equation Governing Growth in Business Scales
Equation Governing Growth in Business Scales Lifetime value (LTV) to customers Customer base Business scale Duration
Slide 81: Body Making
Body Making 1:1 81
Slide 82: Keys to Increasing Numbers of Customers
Keys to Increasing Numbers of Customers Based on the expertise we’ve built up since our founding Investing proactively to Brand power strengthen brand improvement cycle power Improving brand RIZAP brand strategy Intermittently expanding high-value-added products power and services Strengthening bran
Slide 83: Trend in Numbers of Inquiries
Trend in Numbers of Inquiries Inquiries recovering Also strong in April and May November December January February March 2018 2019 83
Slide 84: Cumulative Number of Members (Body Making)
Cumulative Number of Members (Body Making) (10k people) 13.0 Expanding 10.6 Steadily 7.9 5.8 3.3 1.3 Mar. 31 Mar. 31 Mar. 31 Mar. 31 Mar. 31 Mar. 31 2014 2015 2016 2017 2018 2019 84
Slide 85: The RIZAP Body Making Business Operating Income
The RIZAP Body Making Business Operating Income Body Making business (¥bn) operating income grew 3.5x in the past 3 years FY2017/3 FY2018/3 FY2019/3 (Apr. – Mar.) (Apr. – Mar.) (Apr. – Mar.) 85
Slide 86: Age Distribution of Members (Body Making)
Age Distribution of Members (Body Making) Other 3% 60s or older 5% Teens 2% Supported by younger generations Will also focus on capturing the senior segment, which promises massive growth in the future 40s, 50s 20s, 30s 39% 51% 86
Slide 87: Continuity Rate (Six Months After Joining)
Continuity Rate (Six Months After Joining) 44.6% 45.6% About one-half of 38.1% members continue for 31.2% six months or longer Joined in Joined in Joined in Joined in Apr. 2015 Apr. 2016 Apr. 2017 Apr. 2018 87
Slide 88: Number of Studios
Number of Studios 189 (No. of studios) RIZAP Body Making 149 Expanding the number Overseas RIZAP GOLF 130 of studios mainly in RIZAP ENGLISH Others* 129 new businesses 83 120 115 6 42 76 29 25 4 40 9 10 24 3 3 14 6 4 16 10 1 2 2 2 4 6 2 *Others: EXPA, LIPTY, RIZAP COOK, RIZAP KIDS, and Sougym Mar. 3
Slide 89: New Diet Series Introduced
New 5 Diet Series Introduced Sales performance ranking No. 2* RIZAP Wellness Search https://rizapwellness.jp/5diet/ Some items in this well-received line have sold out. We will further improve product appeal and introduce new products this summer and later. * No. 1 in sales of diet support bars (cho
Slide 90: First Collaborative Product from Yoshinoya and RIZAP
First Collaborative Product from Yoshinoya and RIZAP Introduced Making the RIZAP method more accessible at Yoshinoya restaurants across Japan Number of dishes sold exceed plans Introduced May 9, 2019 RIZAP beef salad Search RIZAP beef salad (540 yen, tax incl.) 90
Slide 91: Group Studio 1:N
Group Studio 1:N 91
Slide 92: One-to-Many Service Enhancement
One-to-Many Service Enhancement Session One-to-one One-to-twenty One-to-twenty One-to-eight capacity (maximum) (maximum) (maximum) Subjects Men and women Woman Woman Men and women (middle age) Details Personal Fitness in Diet hot yoga Circuit training the dark training About 300,000 yen About 15,000
Slide 93: Cumulative Membership (EXPA・LIPTY)
Cumulative Membership (EXPA・LIPTY) (people) EXPA In one year: LIPTY 11 times End of End of June End of December March 2019 March 2018 2018 September 2018 2018 93
Slide 94: Nine EXPA Stores Open
Nine EXPA Stores Open (Since April 2019) 新宿南店 2018年6月 Existing stores through March 2019 6 stores New stores since April 2019 9 stores 15 stores in the Tokyo and Kansai regions 2 stores opened in April 2019 2 stores opened in May 2019 94
Slide 95: RIZAP Wellness Seminar – Number of Attendees
RIZAP Wellness Seminar – Number of Attendees 60,000 Advanced companies aiming to promote the health of employees 6x Broke through 730 companies and 60,000 people Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY18/3 FY19/3 95
Slide 96: RIZAP’s Evolution
RIZAP’s Evolution 96
Slide 97: RIZAP’s goal
RIZAP’s goal Enriching the lives of people around the world through self-realization 97
Slide 98: RIZAP’s Goal
RIZAP’s Goal Unleashing personal potential and value to the maximum to build a world where as many people as possible Self- become their best selves actualization Outside Esteem needs scope of business Belongingness and love needs Safety needs Physiological needs 98 98
Slide 99: RIZAP’s Evolution
RIZAP’s Evolution From this point To date forward Diets that Extending generate results healthy lifespans 99
Slide 100: Healthy, happy living
Healthy, happy living Diverse services and products to support self- realization Achieving Healthcare Diets that programs self-actualization while generate aging by extending results healthy lifespans 100
Slide 101: RIZAP is evolving into a life partner
RIZAP is evolving into a life partner who supports healthy living and self-realization of customers throughout their lifetime 101
Slide 102: Business Portfolio for the lifetime support RIZAP
Business Portfolio for the lifetime support RIZAP Economy Comprehensive support RIZAP for self-actualization Common wearable devices For local government LIFE among all services Comprehensive support for healthy living - Manage meals and sleep - Exercise and mind Acquire health and sleep data Group
Slide 103: RIZAP R&D: Promoting Open Innovation
RIZAP R&D Promoting Open Innovation Promoting research and Consolidating knowledge demonstration experiments Universities, across industries Lifestyle-related research Major firms institutes Health data diseases platform Sarcopenia VR/AR, image analysis Startups Overseas IoT devices Putting advanced
Slide 104: Joint Research with the Institute for Adult Diseases
Joint Research with the Institute for Adult RIZAP R&D Diseases of the Asahi Life Foundation (an Authority on Diabetes) Applying the results of research to advance RIZAP’s diet methods (Making it possible to configure sugar intake in ways better suited to individual guests) Contributing to research o
Slide 105: Training Medical Trainers and Introducing Their Services
RIZAP Training Medical Trainers and Academy Introducing Their Services Enhancing services for healthcare guests by assigning specialized trainers to all stores <Comparison of trainer training contents> Training contents Regular trainers Medical trainers Special training of ○ ○ Functional anatomy, bi
Slide 106: Establishing a Model for Attracting Healthcare Customers
Establishing a Model for Attracting Healthcare Customers By targeting senior concerns <Potential guest attributes and advertising appeal points> Seeking to increase numbers of guests whose objective is to Concerns Health- improve health Slimming about health objectives improvement RIZAP January leaf
Slide 107: Enhancing Support for Corporate Health Management
Enhancing Support for Corporate Health Management B2B <Past> <Present> Charts <Future> Targets, Charts of past Future outlook if Service genre requiring results analyzing current status nothing changes goals continual coaching in (Customer needs) Stroke the process through Studios, corporate achieve
Slide 108: Overview of RIZAP’s Global Strategies
Overview of RIZAP’s Global Strategies Exporting RIZAP method services Utilizing overseas stores (RIZAP Labs) Expanding overseas stores Importing advanced worldwide technologies 108
Slide 109: RIZAP’s Overseas Stores
RIZAP’s Overseas Stores Centered on Asia 8 stores overseas Further expansion planned Shanghai Hawaii Hong Kong Taiwan Singapore 109
Slide 110: RIZAP Labs
RIZAP Labs Expanding RIZAP Labs to 3 locations worldwide Shonan RIZAP Athlete Lab RIZAP Athlete Lab (Shonan) Collecting and analyzing data for athletes Taiwan RIZAP Digital Lab RIZAP Digital Lab (Taiwan) Data gathering and queries based on advanced technologies Singapore RIZAP Medical Lab (Sin
Slide 111: RIZAP Digital Lab (Taiwan)
RIZAP Labs Overseas RIZAP Digital Lab (Taiwan) Launched demonstration experiments using training bikes to allow training in virtual spaces Shonan RIZAP Athlete Lab Taiwan RIZAP Digital Lab Participants compete with other racers Singapore online. RIZAP Medical Lab 111
Slide 112: RIZAP Medical Lab (Singapore)
RIZAP Labs Overseas RIZAP Medical Lab (Singapore) Moving ahead with studies to identify solutions to issues related to diabetes in Asia Shonan <Diabetic population in Asia (%)> RIZAP Athlete Lab Taiwan 16.7 RIZAP Digital Lab 10.4 11.0 10.4 9.7 8.5 7.0 6.3 Singapore China Malaysia Indonesia India Jap
Slide 113: Enabling everyone to live lives in which they can appreciate their own value
Enabling everyone to live lives in which they can appreciate their own value 113
Slide 114: Conclusions
Conclusions 1. Urgently needed restructuring measures are complete. Returning to a growth track after finalizing losses in the short term 2. Achieving positive operating income in FY2020/3 (Forecast consolidated operating income: 3.2 billion yen) 3. Toward further growth and the evolution of RIZAP’s
Slide 115: Overview of Restructuring
Overview of Restructuring H2 FY2019/3 FY2020/3 FY2021/3 and beyond (October 2018 – March 2019) (April 2019 –) (April 2020 –) Phase I Phase II Phase III (Period for eliminating (Building the foundations for (Toward a growth track) negative factors) growth) Freeze on new M&A activities in principle
Slide 116: Returning to a growth track
Returning to a growth track 116
Slide 117: Appendix
Appendix. 117
Slide 118: Company Overview (as of the end of September 2018)
Company Overview (as of the end of September 2018) Company name RIZAP GROUP, Inc. Stock code 2928 (Sapporo Securities Exchange’s Ambitious Market) Establishment April 2003 Representative Takeshi Seto, Representative Director, President Capital 19,200,440,000 yen Number of shares outstanding 556,218,
Slide 119: Results of Listed Group Companies (1)
Results of Listed Group Companies (1) * Based on summary reports of financial results for each company (all but Dream Vision employ J-GAAP) (¥ million) FY2018/3 FY2019/3 Change Overview *1 Revenue 14,916 18,540 +3,624 The supply system for Curvaceous, the new core product, is stable. MRK Relocation
Slide 120: Results of Listed Group Companies (2)
Results of Listed Group Companies (2) * Based on summary reports of financial results for each company (all but Dream Vision employ J-GAAP) (¥ million) FY2018/3 FY2019/3 Change Overview Revenue 73,139 72,117 - Extraordinary losses of 4.8 billion yen were recorded as *1 restructuring expenses. Record
Slide 121: Additional Restructuring Expenses
Additional Restructuring Expenses (¥100 million) Additional Item H1 H2 planned Total Details costs Impairment of store fixed assets, losses on Strategic store closures, etc. -4.5 -5.4 -30.5 -40.4 sale and removal, other costs related to store closures, etc. Devaluation of product Inventory devaluati
Slide 122: IR Information of Listed Group companies
IR Information of Listed Group companies Concentrated the IR websites of listed Group companies RIZAP GROUP, Inc. IR information of listed Group companies www.rizapgroup.com/ir/group/ 122