H2O Retailing Corporation · TSE:8242
H2O Retailing — Investor Presentation (2021)
33 slides from H2O Retailing's investor presentation, 2021
Slide 1: Mid-term Management Plan FY2022-FY2024
Mid-term Management Plan FY2022-FY2024 H2O RETAILING CORPORATION
Slide 2: Contents
Contents Ⅰ. Background of the mid-term Ⅶ. Sustainability Management management plan Ⅷ. Group head office functions Ⅱ. Realization of the Group’s Vision (1) IT/HR/Panning Management Ⅲ. Long-term business plan for 2030 (2) BPR Ⅳ. Position of mid-term management plan for 2030 (3) Head office relocation
Slide 3: Background of the mid-term management plan
Ⅰ. Background of the mid-term management plan - Awareness of changes accelerated by COVID-19 - ● Rapid digitalization New lifestyles among a wide range of generations and situation ⇒ Build a business style that integrates offline and online (OMO style) ● Transition to a networked society - direct co
Slide 4: Realization of the Group's Vision
Ⅱ. Realization of the Group’s Vision the Group’s Vision Strength of the Group To be a customer’s lifestyle partner to Trust, network and connection with enrich their hearts through offering customers and local communities “fun, happy and tasty" experiences, × contributing to the future of the local
Slide 5: Long-term business plan for 2030
Ⅲ. Long-term business plan for 2030 ▶ to become a ”Communication Retailer” Develop direct communication with customers and deepen relationship 〈 Approach Strategies〉 ●Target ●KPI in 2030 Market Active customer ① Rebuild existing businesses ・the rich 10 millions of people EC related ・small mass ・Rebu
Slide 6: Position of mid-term management plan for 2030
Ⅳ. Position of mid-term management plan for 2030 Recovery to Beyond profit before corona （bn. of yen） Before profit level before corona Multi revenue sources 25 COVID-19 FY2025-2027 20 16.0 17.0 15 11.2 10 5 (1.0) (4.4) (5) (10) Forecast Result Result Forecast Forecast Forecast of of of of of of FY2
Slide 7: Challenges for new business model
Ⅳ-(1) Challenges for new business model Strong ties and trust with customers and local communities that we have built up over the years Integrate and utilize IT/digital and existing real stores/services Start development of service business to acquire 10 million active customers in the Kansai region
Slide 8: Challenges for new business model: customer service business
Ⅳ-(1) Challenges for new business model ～ Overview of customer service business ～ Citizens in Kansai region (20 million people) Provide original service developed by clients Provide service Daily communication Use service via online with 10 million citizens Alliance partners another “food” field fie
Slide 9: Promotion IT / Digitization
Ⅳ-(2) Promotion IT / Digitization Build new IT/DX infrastructure and address present risks and issues Capital investment ¥26 bn.(FY2022-2024) ➤ Build infrastructure to become communication retailer ● Build group’s customer database infrastructure ● Build group’s EC/OMO infrastructure ● Trials for OM
Slide 10: Alliance partners
Ⅳ-(3) Alliance partners ➤ Comprehensive business alliance with Lawson, Inc. Promote new service and business development in the Kansai region through integrating management resources and service between two companies ● Start Transforming asnas into Lawson franchise store (all 98 convenience stores)
Slide 11: Challenges for new market – the rich in Zhejiang, China
Ⅳ-(4) Challenges for new market – the rich in Zhejiang, China Success of Ningbo Hankyu business Expand business for the rich and the upper with high purchase motivation and power in Ningbo and Zhejiang prefecture Ningbo Hankyu Opened in April,2021 “Department-mall” hybrid of Department store and SC
Slide 12: Business strategies – Department store
Ⅵ-(1) Business strategies – Department store ・Continuous decline in sales, non-recovery in inbound sales. - Environment - ・Change of consumer lifestyle, “New normal” lifestyle under COVID-19. ➤ Established of OMO (Online Merges with Offline) business style ● Development of new OMO shopping process T
Slide 13: Business strategies – Department store
Ⅵ-(1) Business strategies – Department store ➤ Hanshin main store reconstruction ● Grand opening in fall 2021 “Department store that brings happiness to daily life” ・brushed and powered up food contents ・sympathetic contents toward small-mass market ・OMO business style store Making fan communities w
Slide 14: Business strategies – Department store
Ⅵ-(1) Business strategies – Department store ➤ Cost reorganization ● Improve efficiency and reconstruct organization by digitization and BPR. (Business Process Reengineering) ● Reduce cost by redesign operation and decrease outsourcing Redefine action plan to reduce advertising cost, business trip e
Slide 15: Business strategies – Supermarket
Ⅵ-(2) Business strategies – Supermarket ・Purchase of processed and prepared food is increasing - Environment - under population aging and increasing in dual-earner households ・High demand for eating at home due to COVID-19 outbreak ➤ To make supermarket business as a second core, promoting company-w
Slide 16: Business strategies – Supermarket
Ⅵ-(2) Business strategies – Supermarket ➤ Optimize store format suitable for each area Delica Fish market Sweets of Dept. store Hankyu Oasis in Minamisenri Izumiya in Neyagawa Dairy Qanat Izumiya in Hankyu Rakuhoku Square (Jun 2021) (Dec 2020) (Jun 2021) Investment ¥3 bn. (Remodeling 70 stores, FY20
Slide 17: Business strategies – Shopping center
Ⅵ-(3) Business strategies – Shopping center ・Profitability decline due to lack of convenience and facility deterioration －Environment－ ・Minimal impact on business performance due to Suburban location and tenant composition centered on daily necessities ➤ Complete conversion of Izumiya from GMS to SC
Slide 18: Business strategies – Others
Ⅵ-(4) Business strategies – Others ・Transactions between group companies declined due to COVID-19 outbreak －Environment－ ・Market has changed. ・Low profitability mainly affected by personnel expenses ➤ Strengthen tie-up with department store and food business ● Business innovation by catching small m
Slide 19: Business strategies – Forecast by segment
Ⅵ-(5) Business strategies – Forecast by segment －Assumption－ ● Expecting no closure of stores even if another declaration of a state of emergency occur. Seesawing sales situation will continue until Oct., 2021. ● Department store: domestic demand will gradually recover after Nov., 2021. ● Department
Slide 20: Sustainability Management
Ⅶ. Sustainability Management ➤ Progress for sustainability management ● Established Sustainability Management Promotion Committee Establish company-wide initiatives, chaired by the President and Representative Director ● Sustainability Management Policy Set policies for sustainable growth of the Gro
Slide 21: Sustainability Management
Ⅶ. Sustainability Management ➤ Comprehensive cooperation agreement with Osaka Prefecture (July, 2021) ● Joint efforts in the fields of children and education, community revitalization, and the environment Children Contribute to a rich humanity and sound mind. Education Special program held at the HA
Slide 22: Group head office functions – IT/HR/Planning Management
Ⅷ–(1) Group head office functions – IT/HR/Panning Management H2O ➤ IT Retailing Plan and execute the next generation of IT Corporate Planning Recruit specialists to operate IT/DX infrastructure Planning BPR・・ Develop in-house digital talent IT Strengthen security and compliance HR ・・ ➤ HR Hankyu Han
Slide 23: Group head office functions – BPR
Ⅷ–(2) Group head office functions - BPR Create value based on group vision - Reform organizational culture and realize results-driven organization ＜Ideal organization＞ BPR Awareness Current Reform organization Change organizational culture lively culture “Awareness reform” “Working environment refor
Slide 24: Group head office functions – Head office relocation
Ⅷ–(2) Group head office functions -Head office relocation Transformation to a value-creating work style as a “communication retailer” ➤ Head office relocation in summer 2022 Flexible work style by free address and remote work (telework) ● Collaboration spaces and meeting spots ● Functions and mechan
Slide 25: Human Resources Strategy
Ⅸ. Human Resources Strategy Maximize individual and organizational performance Revitalize group human resources ➤ Create highly productive organization ● Set staffing portfolio ● Redesign job, improve efficiency, internalize tasks and relocate personnel ● Develop management skilled human resources R
Slide 26: Investment plan
Ⅹ. Investment plan ➤ Improve investment efficiency - clarify investment priorities and rules. ① Stores and major facilities ・・Rebuilding of Hanshin Umeda main store, Concentrate on priority stores, Integrate distribution centers, Renovate existing SM stores (stop new SM store openings) ② IT/DX inves
Slide 27: Financial and Capital Planning – Asset Efficiency
Ⅺ-(1) Financial and Capital Planning ーAsset Efficiency Improve and stabilize financial position - balance sheet streamlining and capitalization ➤ Real Estate Sales ● Selling properties with low utilization efficiency, including head office buildings except stores. Approx. 15 properties sold, gain on
Slide 28: Financial and Capital Planning – Debt reduction
Ⅺ-(2) Financial and Capital Planning – Debt reduction ➤ Interest Bearing Debt ・Borrowings increase due to recent large project and unfavorable business condition ・No additional borrowings, in spite of large-scale investment projects, such as reconstruction of Hanshin Umeda main store, remodel of Kob
Slide 29: Operating profit
Ⅻ-(1) Operating profit ➤ Recovery to operating profit level before COVID-19 in FY2024. ➤ Aiming for 30 to 35 billion yen in operating profit in FY2031. （bn. of yen） 40.0 Customer Service 35.0 35.0 NingboHankyu 30.0 Before 25.0 COVID-19 Other 20.0 15.0 16.0 17.0 Shopping 10.0 11.2 Center 5.0 Food 0.0
Slide 30: ROE/ROIC
Ⅻ-(2) ROE/ROIC Improve efficiency by streamlining the balance sheet and profit recovery. Aim for ROE recovery to 2% level in FY2024 and 6-7% in FY2031. 10.0% 8.0% 6.0% 4.0% 3.0% 2.0% 2.6% ROE 0 ROIC (2.0)% (4.0)% (6.0)% (8.0)% (10.0)% (12.0)% Copyright © H2O Retailing Corp. All Rights Reserved. 29
Slide 31: Shareholder Returns and Dividend Policy
Ⅻ-(3) Shareholder Returns and Dividend Policy Basic Policy The company's basic policy is to implement stable profit distribution with considering cash flow which is necessary for establishing an appropriate financial base for mid-, long-term, and investment for growth, based on the performance of ea
Slide 32: Targets and KPI
Ⅻ-(4) Targets and KPI （billion yen） FY2019 FY2020 FY2021 FY2022 FY2024 amount amount amount Forecast Operating 20.4 11.2 (4.4) (1.0) 17.0 Profit Ordinary 21.4 11.8 (2.9) (2.0) 14.0 Profit ROE 0.8％ (5.0)％ (10.5)％ 2.2％ 2.6％ ROIC 3.6％ 2.0％ (0.8)％ (0.2)％ 3.0％ Copyright © H2O Retailing Corp. All Rights R
Slide 33: The information contained in this material reflects judgments made by H2O Retailing at the
The information contained in this material reflects judgments made by H2O Retailing at the time of preparing this material, and no guarantees are provided concerning the accuracy of the information. The information is also subject to change without prior notice. H2O and the information providers ass