H2O Retailing Corporation · TSE:8242
H2O Retailing — FY2021 Earnings Presentation
20 slides from H2O Retailing's earnings presentation, May 2021
Slide 1: FY2021 Presentation Materials
FY2021 Presentation Materials H2O RETAILING CORPORATION
Slide 2: Topics
Topics Ⅰ. Results of FY2021 Ⅱ. Actions in progress Ⅲ. FY2022 - Current situation with COVID-19 Copyright © H2O Retailing Corp. All Rights Reserved. 2
Slide 3: I. Results of 2021
I. Results of 2021 １．Consolidated Financial Results ２．Results by segment ３．Department store business ４．Supermarket business ５．Extraordinary income and losses Copyright © H2O Retailing Corp. All Rights Reserved. 3
Slide 4: Consolidated Financial Results
Ⅰ－1. Consolidated Financial Results ▶ Sales and profit decreased under COVID-19 outbreak, but results better than expected thanks primarily to cost reduction. ▶ Recorded loss related to COVID-19 of ￥5.4 billion, impairment losses of ￥14.8 billion as extraordinary losses. Versus Amount YOY （billions
Slide 5: Consolidated Financial Results – Factors affecting OP
Ⅰ－1. Consolidated Financial Results –Factors affecting OP ▶ Mitigating the impact of a decrease in gross profit of department store by sales increase in supermarkets and reducing SG&A Billions of Yen FY2020 FY2021 (15.6) 11.2 (4.4) 5.4 2.8 21.2 Transferred to extraordinary losses ＜１・２Q＞ SM related t
Slide 6: Results by segment
Ⅰ－2. Results by segment ▶ Large decline in department store sales caused operating losses. ▶ “Eating-at-home” demand increased the sales in supermarket. (Actual YOY 0.6%) ※ Influences on supermarket segment by splitting up Izumiya Sales (74.8), OP ＋5.2 Sales OP （billions of Yen） Amount YOY Amount YO
Slide 7: Department store business
Ⅰ－3. Department store business ▶ Declaration of a state of emergency in Jan. decreased the number of customers, but results better than expected thanks primarily to sales in luxury brands. ▶ Reduced costs due to less promotion and the revision of each spending. （cost transferred to loss related to C
Slide 8: Department store business
Ⅰ－3. Department store business ▶ Sales trend of domestic customers were beyond forecast from Oct. to Mar. (Forecast: 20% decrease from the same period of FY2019) ▶ Another wave of infections decrease sales and the number of customers, resulting in the difficulties in forecasting sales ▶ Inbound sale
Slide 9: Supermarket business
Ⅰ－4. Supermarket business ▶ OP in supermarket companies significantly rose by the high demand for eating at home, and the effect of Izumiya restructuring. ▶ Low demand of instant meal decrease OP in food manufacturing and processing. （billions of Yen） Sales OP YOY [existing stores] Inc./Dec. Izumiya
Slide 10: Extraordinary income and losses
Ⅰ－５. Extraordinary income and losses ▶ Recorded extraordinary losses of ￥5.4 billion due to COVID-19 outbreak (complementary subsidy income of ￥2.7 billion） ▶ Impairment losses of ￥14.8 billion including Kobe Hankyu, Takatsuki Hankyu, Izumiya GMS and SC ⇒ Major impairment in each business completed
Slide 11: II. Actions in progress
Ⅱ. Actions in progress １．Business reform ２．Capital efficiency ３．Restructuring of business and group organization ４．New challenges Copyright © H2O Retailing Corp. All Rights Reserved. 11
Slide 12: Business reform
Ⅱ－１. Business reform Driving drastic actions to tasks in each business ➤ Whole group：Reorganization and withdrawal from unprofitable store and business ⇒ Recording impairment losses in FY2021, reducing cost in FY 2022 ● Recording impairment losses of Kobe Hankyu, Takatsuki Hankyu, GMS, and SC togeth
Slide 13: Business reform
Ⅱ－１. Business reform Driving drastic actions to tasks in each business ➤ Supermarket：integrating operation ● integrating operation of 3 SM companies in order to reduce cost and strengthen profitability ● establishing strong SM business model ● uniting manufacturing and sales functions to strengthen
Slide 14: Capital efficiency
Ⅱ－２. Capital efficiency Improving and stabilizing financial condition by the sales of idle assets ➤ Sales of real estate ● promoting sale of inefficient real estate focusing on non-store property ・announced in Mar. 2021, Nakatsu-Osaka, land for lease, ￥4.7 billion profit ・announced in Apr. 2021, Oyo
Slide 15: Restructuring of business and group organization
Ⅱ－３. Restructuring of business and group organization Reorganizing the group to create value for innovation ➤ Department store：value creation focusing on customer and promoting new business system ● unifying IT/DX division and BPR division with H2O retailing ● integrating merchandising division with
Slide 16: New challenges – existing stores
Ⅱ－４. New challenges –existing stores- New challenges and trials in each segment ➤ Department store ● Promoting OMO (Online Merges with Offline) model ・development of new OMO shopping process for customers ✔ Add more items to EC site and increase members –sales of ￥8.4 bil. [YOY 86%] ✔ ”Remo Order”（W
Slide 17: New challenges – new store
Ⅱ－４. New challenges –new store- Apr. 2021 Opened Ningbo Hankyu in China approach to middle- to upper-income groups in Zhejiang prefecture Ningbo Hankyu “Department-mall” hybrid of Department store and SC 4 strength ①high-end/edged fashion ②high-quality/enjoyable SM, Izumiya ③experience and entertain
Slide 18: FY2022 - Current situation with COVID-19
Ⅲ. FY2022 - Current situation with COVID-19 ➤ Transition of COVID-19 infected patients and Sales ● Line graph: Sales of Hankyu Umeda flagship store (versus FY2019, moving average in 5 days) Bar graph: number of COVID-19 infected patients each day in Osaka 4/25- 1/13-2/28 Declaration of a state 150%
Slide 19: FY2022 - Current situation with COVID-19
Ⅲ. FY2022 - Current situation with COVID-19 ➤ Current operation following the declaration of state of emergency ● Department Store business: Closed (except for food hall and Hakata) Sales (existing stores, versus FY2020) Apr.1~24 (26)％, Apr.25~30 (74)％ ⇒urgent cost reduction to cope with large sales
Slide 20: Disclaimer
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