KOSAIDO Holdings Co.Ltd. · TSE:7868
KOSAIDO Holdings Co.Ltd — Q1 FY03/24 Earnings Presentation
48 slides from KOSAIDO Holdings Co.Ltd's earnings presentation, Aug 9, 2023
Slide 1: Q1 Financial Results Presentation
FY03/24 Q1 Financial Results Presentation Securities code: 7868 August 9, 2023
Slide 2: Contents
0 Contents 1 Q1 FY03/24 Highlights P.2 - Q1 FY03/24 Consolidated Financial Results - Segment Performance - New Business 2 Consolidated Financial Forecast for FY03/24 P.10 - Revisions to Consolidated Financial Forecast for FY03/24 - Additional Funeral Halls 3 FY03/24 Shareholder Return P.17 - Consoli
Slide 3: Q1 FY03/24 Highlights
Q1 FY03/24 1 Highlights 2
Slide 4: Q1 FY03/24 Consolidated Financial Results
1-01 Q1 FY03/24 Consolidated Financial Results • In the Information Segment, income decreased due to changes in COVID-19-related special demand from the previous fiscal year and large BPO projects that were shifted to Q4. However, profits were booked by curbing outsourcing costs and reducing fixed c
Slide 5: Q1 FY03/24 Financial Results Summary by Business Segment
1-02 Q1 FY03/24 Financial Results Summary by Business Segment (Millions of yen) Net sales YoY change Compared to forecast Operating profit YoY change Compared to forecast Q1 Q1 Rate of FY03/24 Rate of Rate of FY03/24 Rate of Q1 Q1 Change Forecast Change Q1 Q1 Change Financial Results Change Change C
Slide 6: Q1 FY03/24 Funeral Services Segment
1-03 Q1 FY03/24 Funeral Services Segment (Millions of yen) Net sales YoY change Q1 Compared to forecast Operating profit YoY change Q1 Compared to forecast FY03/24 FY03/24 Rate of Financial Rate of Rate of Financial Rate of Q1 Q1 Change Results Change Q1 Q1 Change Results Change Change Change Differ
Slide 7: Q1 FY03/24 Asset Consulting Segment
1-04 Q1 FY03/24 Asset Consulting Segment (Millions of yen) Net sales YoY change Q1 Compared to forecast Operating profit YoY change Q1 Compared to forecast FY03/24 FY03/24 Rate of Financial Rate of Rate of Financial Rate of Q1 Q1 Change Results Change Q1 Q1 Change Results Change Change Change Differ
Slide 8: Q1 FY03/24 Information Segment
1-05 Q1 FY03/24 Information Segment (Millions of yen) Net sales YoY change Q1 Compared to forecast Operating profit YoY change Q1 Compared to forecast FY03/24 FY03/24 Rate of Financial Rate of Rate of Financial Rate of Q1 Q1 Change Results Change Q1 Q1 Change Results Change Change Change Difference
Slide 9: Q1 FY03/24 HR Segment
1-06 Q1 FY03/24 HR Segment (Millions of yen) Net sales YoY change Q1 Compared to forecast Operating profit YoY change Q1 Compared to forecast FY03/24 FY03/24 Rate of Financial Rate of Rate of Financial Rate of Q1 Q1 Change Results Change Q1 Q1 Change Results Change Change Change Difference Change FY
Slide 10: New Business
1-07 New Business Funeral business * … 2 companies: Kosaido Lifewel, Gran Ceremo Tokyo - FY03/24 Performance (2 companies* combined) (Millions of yen) Primary cause Q1 (Difference from plan) Diff. from Diff. from - Profitability improved due to more attendees. Actual Plan Prior year plan prior year
Slide 11: Consolidated Financial Forecast for FY03/24
Consolidated 2 Financial Forecast for FY03/24 10
Slide 12: Revisions to Consolidated Financial Forecast for FY03/24
2-01 Revisions to Consolidated Financial Forecast for FY03/24 Difference between the forecast and actual Q1 performance In the Information Segment, income increased compared to the forecast, with support from orders for large printing projects and steady growth in the BPO business. As a result of st
Slide 13: Revisions to Consolidated Financial Forecast for FY03/24
2-02 Revisions to Consolidated Financial Forecast for FY03/24 (Millions of yen) Q1 Q2 H1 (cumulative) Compared Compared Compared to initial YoY to initial YoY to initial YoY Initial forecast Prior FY Initial forecast Prior FY Initial forecast Prior FY Actual Forecast Forecast forecast Rate of result
Slide 14: Additional Funeral Halls: Result of Advance Sales
Additional Funeral Halls | New Funeral Halls 2-03 Result of Advance Sales The “new funeral hall specifications”: The specifications have been changed from the luxury 16-person (funeral hall with waiting room) type for family funerals to the 40-person (funeral hall with separate waiting room) type (w
Slide 15: Number of Funeral Halls in FY03/24
2-04 Number of Funeral Halls in FY03/24 2023 2024 Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Composition of the number of attendees to a funeral service Existing funeral halls held in 40-person funeral halls Initial concept 35 halls Max 16 ppl Sept-Mar 36 funeral halls added 44.1% 55.9% Apr-Au
Slide 16: Impact on Performance From Modified Funeral Hall Plan
2-05 Impact on Performance From Modified Funeral Hall Plan FY03/24 Estimated Impact on Performance Minimize negative impact from modified funeral hall plan (utilized funeral halls), etc., by implementing other measures. (Millions of yen) Q1 Q2 Q3 Q4 Full-year Results Forecast Forecast Forecast Forec
Slide 17: Past Profit Gains FY03/23 FY03/24
2-06 Past Profit Gains | FY03/23 FY03/24 (Millions of yen) To be achieved 263M Projects also Trending in combination +51Ｍ on track On track Above plan 214% with other as expected planned above-target +307 6,360 results +250 +286 Other Started asset FY03/24 +150 HR Segment changes operating profit +9
Slide 18: FY03/24 Shareholder Return
FY03/24 3 Shareholder Return 17
Slide 19: Revision to Dividend Forecast
3-01 Revision to Dividend Forecast Dividend Forecast for FY03/24 ✓ The year-end dividend has been revised (payout ratio 30%) due to revisions to the full- year consolidated financial forecast. Dividend per share Record date End of Q2 End of FY Total FY03/23 results 7.75 yen 13.50 yen 21.25 yen FY03/
Slide 20: Shareholder Return
3-02 Shareholder Return Changes involving largest shareholder (as of June 23, 2023) Shareholding ratio of the largest shareholder (PA Ace IV (HK) Limited) 15.06% → 9.98% Carried out stock buyback to mitigate market impact at time of disposition (Estimated ratio of shares in circulation: 36.50% to 49
Slide 21: Long-Term Outlook
4 Long-Term Outlook 20
Slide 22: State of the Population | Estimated Deaths
4-01 State of the Population | Estimated Deaths Nationwide Tokyo Unit: 10,000 ppl Unit: 10,000 ppl 200 50 Nationwide Actual Estimated 180 45 Tokyo 160 166 165 160 156 156 40 152 141 143 140 35 130 123 119 120 113 30 108 100 97 25 93 82 20 20 80 74 19 20 71 72 71 72 17 16 16 16 15 60 14 15 12 11 10 9
Slide 23: Tokyo Funeral Homes | Furnace Operation
4-02 Tokyo Funeral Homes｜Furnace Operation In 40 years, deaths in Tokyo will increase by about 70%. 2022: 120,000 ppl 2060: 200,000 ppl Major Tokyo Funeral Homes｜Furnace Operation Rinkai Funeral Mizue Funeral Toda Funeral Yatsuka Funeral Nikka Funeral Fuchu no Mori Name Tokyo Hakuzen Hall Home Home
Slide 24: Room for Expansion at Tokyo Hakuzen | Social Responsibility
4-03 Room for Expansion at Tokyo Hakuzen | Social Responsibility As a company that provides cremation services in the public interest, we will fulfill our social responsibility in response to the increase in deaths. *Company estimates based on statistical data from the Office of the Governor for Pol
Slide 25: Business Growth Beyond Medium-Term Business Plan 3.0
4-04 Business Growth Beyond Medium-Term Business Plan 3.0 Consolidated Operating Profit Growth Toward discontinuous growth to explore M&A deals, new businesses, etc. Limit of growth by utilizing room for expansion ～ ～ Limit of growth from adding funeral halls within existing facilities FY03/23 FY03/
Slide 26: Appendix
Appendix 1. Details of FY03/24 Performance A 2. Medium-Term Business Plan Performance Targets 3. ESG Activities Report 4. Company Introduction 25
Slide 27: Quarterly Trend (Net Sales)
A1-01 Quarterly Trend (Net Sales) • Despite higher sales in the Funeral Services Segment, Q1 net sales declined 2.4% year on year due to the reactionary decrease in COVID-19-related BPO projects in the Information and HR segments. (Millions of yen) 12,000 10,469 10,000 9,711 1,692 8,656 1,764 7,832
Slide 28: Quarterly Trend (Cost of Sales)
A1-02 Quarterly Trend (Cost of Sales) • Q1 cost of sales decreased year on year (-346 million yen, -2.8 pt cost of sales ratio). • Containing subcontract expenses and reducing fixed costs in the Information Segment contributed to cost cuts. (Millions of yen / %: Cost of sales ratio) 8,000 6,796 7,00
Slide 29: Quarterly Trend (SG&A Expenses)
A1-03 Quarterly Trend (SG&A Expenses) • Q1 SG&A expenses decreased year on year (-121 million yen, -1.0 pt SG&A expenses ratio). • Reduced fixed costs by implementing cost optimization at operating company. (Millions of yen / %: SG&A expense ratio) 2,500 2,086 2,097 2,005 (24.1%) (21.6%) （25.6%） 1,8
Slide 30: Quarterly Trend (Number of Employees)
A1-04 Quarterly Trend (Number of Employees) • Reassigned personnel as an organization to implement Medium-Term Business Plan 3.0. • There were changes in individual businesses, but no major fluctuation overall. (Number of employees / %: Composition ratio) *Numbers inside parentheses indicate YoY cha
Slide 31: Quarterly Trend (Operating Profit by Segment)
Quarterly Trend The method for booking management guidance fees for Group companies has been changed effective from the first quarter of the current fiscal year. These fees, which were included in corporate expenses as an adjustment, are now booked as A1-05 (Operating Profit by Segment) operating ex
Slide 32: Q1 FY03/24 Analysis of Change in Operating Profit
A1-06 Q1 FY03/24 Analysis of Change in Operating Profit (Major Items) • Year on year, Information and HR segment income decreased, but Profit Generating Funeral Services income increased. Containing costs and reducing fixed costs, especially in the Information Segment, resulted in higher profit. +54
Slide 33: Consolidated Balance Sheet
A1-07 Consolidated Balance Sheet (Millions of yen) Difference as of March 2023 June 2023 quarter end Current assets 27,998 26,161 -1,837 Cash and deposits 18,699 10,386 -8,313 Notes and accounts receivable–trade 5,810 3,675 -2,315 Non-current assets 43,134 43,591 457 Property, plant and equipment 35
Slide 34: Public Funeral Services Business Income & Expenditures
Public Funeral Services Business A1-08 Income & Expenditures | Q1 FY03/24 The Public Funeral Services Business is a business that has a significant amount of public interest and requires permanence and non-profitability. Increase in transparency Increase in business stability ■The Company’s responsi
Slide 35: Medium-Term Business Plan 3.0 Performance Targets
A2-01 Medium-Term Business Plan 3.0 Performance Targets Medium-Term Business Plan 3.0 (announced May 12, 2023) (Millions of yen) Medium-Term Business Plan 3.0 FY03/22 FY03/23 Results Results FY03/24 FY03/25 FY03/26 Forecast Plan Plan Net sales 35,361 36,668 40,000 42,100 43,800 Operating profit 3,72
Slide 36: ESG Activities Report
A3-01 ESG Activities Report The purpose of the Kosaido Holdings ESG Activity Report is to provide shareholders, investors, business partners, and a wide range of other stakeholders with an understanding of the Company’s approach and concrete action to further sustainability. The Kosaido Group SDGs D
Slide 37: Social Responsibility of the Cremation Business
ESG Activity Report [Society] A3-02 - Social Responsibility of the Cremation Business Basic Concept Machiya Funeral Hall Yotsugi Funeral Hall Ochiai Funeral Hall The Company conducts our business based on the spirit of Horinouchi Funeral Hall “Kosai,” which means “contributing to society at large.”
Slide 38: Social Responsibility of the Cremation Business
ESG Activity Report [Society] A3-03 - Social Responsibility of the Cremation Business Social Responsibility of the Cremation Business in a High-Death Society Both local communities and Japanese society as a whole are facing a high number of deaths, and that figure increases by the year. As shown in
Slide 39: State of the Population | Estimated Deaths
ESG Activity Report [Society] A3-04 - Social Responsibility of the Cremation Business *Excerpt/reprint from this document: Q1 FY03/24 Highlights) State of the Population | Estimated Deaths Nationwide Tokyo Unit: 10,000 ppl Unit: 10,000 ppl Nationwide Actual Estimated Tokyo Nationwide: Statistics Bur
Slide 40: Tokyo Hakuzen's Actions
ESG Activity Report [Society] A3-05 - Social Responsibility of the Cremation Business Tokyo Hakuzen's Actions ■Cremation technology for smooth funeral services While many crematoriums use furnaces with carts, Tokyo Hakuzen uses grates that enable quick cremations so we can handle the increasing numb
Slide 41: ESG Activity Report [Environment]
A3-06 ESG Activity Report [Environment] Disclosure Based on the Task Force on Climate-related Financial Disclosures (TCFD) Recommendations In addition to endorsing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), in 2022, in response to increasing greenhouse gas
Slide 42: ESG Activity Report [Governance]
A3-07 ESG Activity Report [Governance] Basic Concept Aiming to maximize shareholder value, sustainably increase enterprise value, and earn society's trust, we not only boost profitability, but also emphasize shareholder rights, implement efficient, fair, and transparent management practices, and ens
Slide 43: Company Overview
A4-01 Company Overview Company Establish- name KOSAIDO Holdings Co., Ltd. ment January 1949 36,668 69,753 38,452 Net sales million yen Total assets million yen Net assets million yen (as of June 30, (as of June 30, (FY03/22) 2023) 2023) Represent- ative Hiroshi Kurosawa, President & CEO Number of em
Slide 44: History
A4-02 History Kosaido Group 2021 Transitioned to a holding 1984 company structure Tokyohakuzen joined the Group (Started ending-related business) 1970 Founded Japan’s first 2022 computer typesetting company Launched Funeral Planning Services 2013 (Kosaido Lifewell, Gran Ceremo Tokyo) Established Vie
Slide 45: Mission, Vision, and Value
A4-03 Mission, Vision, and Value MISSION Further enrich 100-year lives VISION A Company that creates myriad “thank yous” Provide innovative services overflowing with VALUE gratitude through individual challenges and strong organizational connections. Based on our management philosophy of “Kosai,” wh
Slide 46: KOSAIDO Group
[Main businesses] A4-04 KOSAIDO Group Crematory operation and provision of funeral halls Ending-related Business Funeral planning services Ending-related business Further enrich 100-year lives. Information Solution Business [Main businesses] Offset printing (publishing, commercial) Newspaper printin
Slide 47: KOSAIDO Group's SDGs Declaration
A4-05 KOSAIDO Group’s SDGs Declaration Economy Society Providing wide-ranging support Live in harmony with others Value creation for Developing equitable and diverse communities To put our corporate philosophy of sustainable economic activities In the coming era where people live for 100 years, “con
Slide 48: Contact
A4-06 Contact If you have any comments or questions about this presentation or other IR-related topics, please use the inquiry form at the following URL to contact us. In addition, Facilities Tour for Institutional Investors and Analysts are held accordingly (funeral home tours operated by Tokyo Hak