H2O Retailing Corporation · TSE:8242
H2O Retailing — Q2 FY2024 Earnings Presentation
26 slides from H2O Retailing's earnings presentation, Nov 2, 2023
Slide 1: 2Q of FY2024 Presentation Materials
2Q of FY2024 Presentation Materials Nov. 2, 2023 H2O RETAILING CORPORATION
Slide 2: Digest of Financial Results
Digest of Financial Results ■ 1H (Apr.-Sep.) Results < Consolidated > • Sales progressed as planned in Aug, Department Store Business results exceeded forecast. Both operating profit and ordinary profit reached record highs in 1H. • 2Q as well as 1Q, all segments, including Department Store business
Slide 3: Topics
Topics I . Consolidated Financial Results II . Forecast of FY2024 III . For Mid and Long-Term Growth Copyright © H2O Retailing Corp. All Rights Reserved. 3
Slide 4: I. Consolidated Financial Results
I. Consolidated Financial Results 1 . Consolidated Financial Results 2 . Results by Segment 3 . Department Store Business 4 . Supermarket Business 5 . Shopping Center Business 6 . Extraordinary income and losses 7 . Capital Investment Copyright © H2O Retailing Corp. All Rights Reserved. 4
Slide 5: I-1. Consolidated Financial Results
I-1. Consolidated Financial Results ▶ Gross sales exceeded forecast, driven by strong Department Store sales. ▶ Operating profit in Department Store and Shopping Center Business exceeded the forecast, and consolidated operating profit reached a record high in 1H. Vs. Forecast 1H YoY 1Q 2Q in Aug. (U
Slide 6: I-2. Results by Segment
I-2. Results by Segment ▶ Department Store Both domestic and inbound sales were driven by high-end items, and sales exceeded as planned. Operating profit reached a record high in 1H due to strong sales and ongoing efforts to control costs. ▶ Supermarket Sales recovery strengthened in Jul.-Sep, and s
Slide 7: I-2. Results by Segment
I-2. Results by Segment ■ Factors of Increase / Decrease in operating profit (YoY, Vs. Forecast) (100 millions of yen) 1H of 1H of Forecast YoY Vs. Forecast FY2023 +88 FY2024 +29 11 99 70 Other and Other and Adjustments Adjustments Shopping Supermarket +0 ▲3 Center ▲4 Shopping Department +7 Center s
Slide 8: I-3. Department Store Business
I-3. Department Store Business ▶ Strong domestic sales and rapid increase in inbound sales at urban stores drove sales. ▶ Increase in expenses, such as personnel expenses and sales related expenses, were kept down compared to the plan. Operating profit exceeded forecast in Aug, and both sales and op
Slide 9: I-3. Department Store Business - Factors of Increase / Decrease in operating profit
I-3. Department Store Business - Factors of Increase / Decrease in operating profit ■ Hankyu Hanshin Department Store Factors of Increase / Decrease in operating profit (YoY, Vs. Forecast) (100 millions of yen) 1H of 1H of Forecast FY2023 YoY FY2024 Vs. Forecast +54 +28 16 70 42 Decline in gross mar
Slide 10: I-3. Department Store Business - Sales by Product
I-3. Department Store Business - Sales by Product ▶ Sales of all categories increased from the previous year in Jul.- Sep. also. ▶ Strong domestic sales and rapidly growing inbound sales contributed to increased sales of accessories and general merchandise, including jewelry, watches, and bags. Sale
Slide 11: I-3. Department Store Business - Existing Store Sales (Vs. FY2019)
I-3. Department Store Business - Existing Store Sales (Vs. FY2019) ▶ As in 1Q, both domestic and inbound sales exceeded FY2019 results in 2Q period. Domestic sales recovered in all categories, including strong sales of high-end items and clothing. ▶ Inbound sales have continued to record monthly hig
Slide 12: I-3. Department Store Business - Inbound Sales
I-3. Department Store Business - Inbound Sales ▶ Inbound sales continued to be strong in Jul.-Sep, double the level in FY2019, driven by high-end items, partly due to foreign exchange effects. In addition to the recovery in sales in China, sales in South Korea, Taiwan, and Hong Kong grew significant
Slide 13: I-4. Supermarket Business
I-4. Supermarket Business ▶ Existing-store sales of supermarkets have been recovering at a faster pace since 1Q, with a rise in average spend per customer and number of customers exceeding those of the previous year, and price hikes since last October have been gradually becoming widespread. From 3Q
Slide 14: I-4. Supermarket Business - Results of Izumiya and Hankyu Oasis
I-4. Supermarket Business - Results of Izumiya and Hankyu Oasis ▶ Significant increase in profit due to gross profit improvement and reduction of SG&A expenses by reforming chain operations despite cost push factors ▶ In 2H, we will continue to reduce SG&A expenses and increase sales by effectively
Slide 15: I-5. Shopping Center Business
I-5. Shopping Center Business ▶ Occupancy rates of business hotels operated by Oi Development continued to exceed 90% in Jul.-Sep. Increase average room rate while maintaining high occupancy through dynamic pricing Record profit pace due to the renewal of the company's website and reservation system
Slide 16: I-6. Extraordinary income and losses
I-6. Extraordinary income and losses ▶ Recorded gain on sale of fixed assets of store closing in the previous year Major items Amount Major contents (Unit: 100 million yen) Extraordinary H2OSC Development Gain on sale of non-current assets 10 income (Former Izumiya Okubo Store) Hankyu Hanshin Depart
Slide 17: I-7. Capital Investment
I-7. Capital Investment ▶ Implement upfront investments for IT infrastructure building and growth using cash generated through earnings recovery and asset sales ▶ Stores and major facilities... Remodel of Kobe Hankyu, Hankyu Main Store renovation, supermarket store renovation ▶ IT・DX investment… Gro
Slide 18: II. Forecast of FY2024
II. Forecast of FY2024 ▶ Forecast of 2H is not based on the positive impact of the external environment in 2Q, and is expected to be in line with the initial plan in May. ▶ All segments, centered on the department store business, are expected to improve their business results and significantly excee
Slide 19: II. Forecast of FY2024
II. Forecast of FY2024 ▶ Operating profit is expected to exceed Mid-term Plan target for all segments. ▶ Department Store Business expects operating profit on par with FY2019. Gross sales Operating profit Vs. Mid-term Forecast YoY Forecast YoY Plan (Unit: 100 million yen) Department Store 5,553 112.
Slide 20: II. Forecast of FY2024 - Capital Investment
II. Forecast of FY2024 - Capital Investment ▶ Aggressive investment in high priority projects, in accordance with the mid-term management plan Total investment from FY2022 to FY2024: ¥91.3 bn. [the mid-term management plan: ¥95.0 bn.] Amount Major items (Unit: 100 million yen) Remodel of Kobe Hankyu
Slide 21: III. For Mid and Long-Term Growth
III. For Mid and Long-Term Growth 1 . Review of refining existing business 2 . Focus on Next Mid-Term Management Plan Copyright © H2O Retailing Corp. All Rights Reserved. 21
Slide 22: III-1. Factors behind the strong performance of Hankyu Main Store
Ⅲ-1. Review of refining existing business - Factors behind the strong performance of Hankyu Main Store ▶ Hankyu Main Store sales significantly grew, and forecast of FY2024 is also expected to exceed the previous year's level to record high sales. ▶ Continuous renovation for high grade and high sensi
Slide 23: III-1. Factors behind the strong performance of Hankyu Main Store
Ⅲ-1. Review of refining existing business - Factors behind the strong performance of Hankyu Main Store Since its grand opening in 2012, the Hankyu Main Store has continued to update itself through floor renovations, becoming the dominant No. 1 store in Kansai area. ① Strengthen jewelry & watch and l
Slide 24: III-1. Large-scale investment project
Ⅲ-1. Review of refining existing business-Large-scale investment project ▶ Renovation of Kobe and Takatsuki Hankyu was completed in Oct. 2023, and large-scale store investment, including Hanshin Umeda Main Store, has done. Kobe Hankyu Takatsuki Hankyu Square Hanshin Umeda Main Store Enhance attracti
Slide 25: III-2. Focus on Next Mid-Term Management Plan
Ⅲ-2. Focus on Next Mid-Term Management Plan Responding to expected future market downsizing and accelerating workforce shortages ▶ Enhance profitability by deepening and strengthening existing businesses and improving efficiency • Concretization of measures for the domestic • To minimize operational
Slide 26: H2O RETAILING CORPORATION
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