As One Corporation · TSE:7476
As One — Investor Presentation (2017)
33 slides from As One's investor presentation, 2017
Slide 1: AS ONE Corporation Materials for the medium-term management plan
AS ONE Corporation Materials for the medium-term management plan These materials are an English translation of the original document in Japanese. The Company‘s performance forecasts and other information are based on the Company’s understanding as of the time the earnings presentation materials were
Slide 2: Forward-looking statements
The forward-looking statements made in this document, including the aforementioned forecasts, are based on all information available to the management at the time of this document’s release and certain assumptions considered rational. Actual results may differ materially from the forecasts due to va
Slide 3: Project NANA 2.0: The New Medium-Term Management Plan
– The New Medium-Term Management Plan Advancing from NANA 1.0 to NANA 2.0 Project NANA 2.0 New Action, Next AS ONE ＊Project NANA 1.0 :https://www.as-1.co.jp/en/ir/assets/pdf/medium_term1.pdf
Slide 4: The Positioning of NANA 2.0
The Positioning of NANA 2.0 The NANA 1.0 plan that was announced in 2015 has been reviewed and revised to create the new NANA 2.0 “Unleash!” Use the power of to raise sales to FY3/17 Results Meeting 4
Slide 5: Medium/Long Term Vision – Targets for 2020
Medium/Long Term Vision – Targets for 2020 The three targets of Project NANA for 2020 FY3/2015 FY3/2020 Re‐acceleration Net Sales ¥ 52 billion ¥70 billion towards growth Maintaining high Operating profitability margin 11.5% 13.0% Maximization of shareholder value ROE 8.8% 11.0% FY3/17 Results Meetin
Slide 6: New Strategic Fields Reflecting Shifts in Business Opportunities
New Strategic Fields Reflecting Shifts in Business Opportunities When NANA 1.0 started Current business opportunities Increasing speed of e-commerce business growth Expansion of overseas business areas Increasing use of e-commerce Rapid expansion of business Growing customer needs in China Add produ
Slide 7: The NANA 2.0 Target
The NANA 2.0 Target The goal is sales of ¥70 billion by speeding up growth over the next three years 750 ¥70 billion 700 -NANA 2.0- 650 -NANA 1.0- 600 550 Results Results 500 450 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 FY3/17 Results Meeting 7
Slide 8: The NANA 2.0 Theme – Unleash!
The NANA 2.0 Theme – Unleash! 1 Sales 2 Profits 3 People 4 Finance FY3/17 Results Meeting 8
Slide 9: Initiatives for Growth – (1) e-commerce
1 Initiatives for Growth – (1) e-commerce Advance from building to using new IT systems へ～Before After 1. Passive sales activities 1. Aggressive sales activities • Company R&D facilities, universities and public sector • Internet sales companies in other industries 2. Targeting only research 2. Use
Slide 10: e-commerce: Advance from Building to Using New IT Systems
e-commerce: Advance from Building to Using New IT Systems Aggressive sales activities targeting Sell products in many industries and market sectors large companies Integrated Internet AS ONE catalog sales Internet purchasing companies sales Big data analysis FY3/17 Results Meeting 10
Slide 11: Initiatives for Growth – (2) Overseas: China
1 Initiatives for Growth – (2) Overseas: China Shift focus from Japanese to Chinese companies Before After 1. Insufficient in-store 1. Increase the in-store share share • Issue a new catalog 150,000 copies (+30,000 copies) 1,246 pages (+30%) • Start using e-commerce 2. Products sold only in 2. More
Slide 12: The AS ONE Business Sites in China
The AS ONE Business Sites in China Sixth Chinese-language catalog Beijing Branch Shenyang Branch May 2014 Tianjin Branch April 2017 November 2009 Dalian Branch December 2014 Beijing Logistics Center October 2016 Planning on adding a logistics base to serve inland China Shanghai Head Office Suzhou Br
Slide 13: Initiatives for Growth – (2) Overseas: New Areas
1 Initiatives for Growth – (2) Overseas: New Areas Expand overseas operations to other areas of the world Before After 1. Southeast Asia • English-language catalog and website for Overseas operations searches centered on China • Sales activities targeting local sales agents and users Inadequate meas
Slide 14: Use _Global to Form Ties with Overseas Dealer Bases
Use _Global to Form Ties with Overseas Dealer Bases English-language listings and local-currency prices for more than 400,000 scientific instruments Strong support for e-commerce sites by forming ties with overseas bases of dealers Japan Overseas _Global Overseas bases of Local dealers Orders custom
Slide 15: Initiatives for Growth – (3) New Products
1 Initiatives for Growth – (3) New Products Combine products and services (Established the Service Sales Department) Before After 1. Make inspection and calibration services a business • Raise sales of services to about 8% of instrument sales (more than ¥1.0 billion) 2. Rental service Sales activiti
Slide 16: New Products: Products plus Services
New Products Sale of products ＋ Services Services that match customers’ needs Calibration service Outsourced laboratory for measuring agency services for instruments analysis and testing A calibration service capable of Agency services for a variety of analysis handling large numbers of and inspecti
Slide 17: Initiatives for Growth – (4) Existing Businesses
1 Initiatives for Growth – (4) Existing Businesses Make strengths even stronger Before After 1. Catalogs 1. Big increase in items in catalogs No clear difference vs. • Overwhelming superiority in volume: Increase competitors’ catalogs from 2,400 to 3,600 pages 2. Inventory information 2. Establish a
Slide 18: Initiatives for Growth – Overall Sales Targets
1 Initiatives for Growth – Overall Sales Targets FY3/17 FY3/20 (Billions of yen) 800 Total ¥55.9 billion ¥70.0 billion 7.9% 70.0 700 E-commerce 63.7 ¥6.2 billion ¥11.0 billion 3.7% 59.0 600 55.9 52.0 53.6 Overseas ¥2.5 billion ¥5.3 billion 500 400 New products ¥0.8 billion ¥4.6 billion 300 Existing
Slide 19: Profitability – Maintaining High Profitability
2 Profitability 3 2 1 – Maintaining High Profitability 1) Raise share of original products by 5 points to 45% 2) Increase procurement of products in Europe through alliances 3) Use the U.S. subsidiary to strengthen procurement capabilities in North More earnings America 4) Cut the cost of transporti
Slide 20: Profitability – Operating Margin
2 Profitability 3 2 1 – Operating Margin Target 13.0% 10.9% 10.9% FY3/16 FY3/17 ・ FY3/18 ・ ・ ・ ・ ・ ・ FY3/19 ・ ・ ・ ・ ・ FY3/20 (Results) (Results) Unleash! to raise the operating margin to 13% FY3/17 Results Meeting 20
Slide 21: the Spirit of Taking on New Challenges (1)
3 the Spirit of Taking on New Challenges (1) Build a framework for growth and new challenges! Before After 1. Organization 1. An organization designed for accomplishing Inadequate organizational growth targets structure for executing • Creation of units for growth strategy growth strategies initiati
Slide 22: the Spirit of Taking on New Challenges (2)
3 the Spirit of Taking on New Challenges (2) Align the mindset and motivation of employees with value creation Before After 1. Key performance 1. Establish proper key performance indicators indicators • Create separate KPI for each role No clear KPI for individual • Periodically manage progress towa
Slide 23: Allocation of Financial Resources
4 Financial Resources Allocation of Financial Resources Operating cash flows ¥15.0 billion Invest in pre-defined priority areas + Surplus financial assets 1. Breakthrough 2. Game Changer 3. Value Maximization Shareholder returns IT/logistics Dividend payout ratio 50% investments Earnings distribu
Slide 24: 1. Breakthrough – Become a Source of Total Solutions
4 1. Breakthrough – Become a Source of Total Solutions The working environment for research scientists and AS ONE’s contributions Purchase People Locate of Products positions for replacement Selection people supplies of Sectors where AS ONE is currently active (overseas equipment study, etc.) Sector
Slide 25: 2. Game Changer – Use M&A for Non-continuous Business Expansion
4 2. Game Changer – Use M&A for Non-continuous Business Expansion M&Aによる事業拡大・展開イメージ 消耗品/MRO 専門機器・新商材 サービス 製造 有望メーカー買収 専門商社買収 専門機器卸と 卸 Core business (販売力/顧客確保) の連携販売 販売 代理店買収/出資 （販売網強化） Also aiming for new directions that go beyond current business domains FY3/17 Results Meeting 25
Slide 26: 3. Value Maximization – Shareholder Returns
4 3. Value Maximization – Shareholder Returns Maintain a 50% dividend payout ratio and repurchase stock with flexibility to be a company that constantly creates value Dividend per share (Yen) / Dividend payout ratio (%) Interim Interim Year-end Year-end dividend commemorative dividend commemorative
Slide 27: Financial Resources – Overall Progress and Outlook
4 Financial Resources – Overall Progress and Outlook Medium‐term management plan -NANA 2.0- Progress and outlook Basic strategic financial goals Remaining 3 years (FY3/18-FY3/20) FCF of ¥8.2 billion during past 2 years Free cash Consistent operating cash flows from Expect ¥10.0 billion during next 3
Slide 28: Projection for Components of Growth at AS ONE
Projection for Components of Growth at AS ONE Post NANA ¥100.0 billion Game New fields -NANA 2.0- Changer ¥ 70.0 billion Three pillars E-commerce -NANA 1.0- Unleash! Overseas operations New products ¥ 55.9 billion ¥21.0 billion 3.5x ¥ 52.0 billion ¥6.0 billion Existing Sales of current products usin
Slide 29: Reference Data
Reference Data FY3/17 Results Meeting 29
Slide 30: Aiming for a Higher ROE
Aiming for a Higher ROE ROE and profit margin (actual to FY3/17, goals to FY3/20) ROE 11.0% 9.8% 8.7% 8.8% 8.5% 8.7% 8.4% 8.2% 8.0% 9.0% 7.3% 8.2% 7.4% 7.2% 7.5% 7.4% 6.7% 7.0% 6.0% 5.5% Profit margin FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 Use capital more efficiently
Slide 31: Sales Plan – Sales Plan Adjustments NANA 2.0
Sales Plan – Sales Plan Adjustments -NANA 2.0- FY3/17 Remaining growth FY3/20 FY3/20 (Billions of yen) Results goal of initial plan Previous Adjustments New plan plan E-commerce 6.2 +3.8 10.0 11.0 China 1.8 +3.2 5.0 -1.8 3.2 Overseas 2.5 +2.5 5.0 5.3 Others 0.7 -0.7 0 +2.1 2.1 New products 0.8 +5.2
Slide 32: Medium-Term Management Plan (FY3/18-FY3/20) Target Value
Medium‐Term Management Plan (FY3/18‐FY3/20) Target Value Growth ratio FY3/17 FY3/18 FY3/19 FY3/20 FY3/17 vs CAGR FY3/20 Initial Initial Revised Initial Revised Initial Revised Results (Billions of yen) plan plan plan plan plan plan plan Net sales 57.4 55.9 61.0 59.0 65.5 63.7 70.3 70.3 +25.7% +7.9%
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