Financial Results Presentation Materials - Book Off · PDF fileFinancial Results Presentation...
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0 Financial Results Presentation Materials for the Fiscal Year Ended March 2016 (FY3/2016) May 10, 2016 BOOKOFF CORPORATION LIMITED TSE First Section: 3313
Transcript of Financial Results Presentation Materials - Book Off · PDF fileFinancial Results Presentation...
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Financial Results Presentation Materials for the Fiscal Year Ended March 2016 (FY3/2016)
May 10, 2016
BOOKOFF CORPORATION LIMITEDTSE First Section: 3313
1. FY3/2016 Financial Results Overview P2
2. Progress with Renovation P12
3. Policies for FY3/2017 P39
4. APPENDIX P61
1
Contents
The plans, strategies, and financial forecasts presented in these materials contain forward-looking statements not based on historical fact. Forward-looking statements are based on management judgments using information available at the time. Actual results may vary significantly from forecasts due to changes in the business environment and other factors.
Note Concerning Forward-Looking Statements
(Contact) Corporate Planning Department, BOOKOFF CORPORATION LIMITED
2
1. FY3/2016 Financial Results Overview
3
Net sales ¥75.6 billion (+3.0% YoY)
Operating income -¥530 million (-)
Ordinary income ¥5 million (-99.7% YoY)
Profit attributable to owners of parent -¥520 million (-)
Financial Overview
BOOKOFF Reinvention Story
4
Store gross profits on existing products
Expenses
Before the initiative
Store gross profits on existing products
Expenses
After the initiative
Higher personnel expenses and advertising
expenditures
YAHUOKU! gross profits on existing
products
Gross profits on home appliances
Purchasing used home appliances
↓Incremental sales of home
appliances
Submitting store merchandise to YAHUOKU!
↓Faster turnover rate
↓Incremental sales of existing
products
• Building a structure to secure inventory, net sales, and gross profits in excess of the cost of investment by supplying merchandise to YAHUOKU! and starting to deal in reuse home appliances
Profits
Profits
Thinking on FY3/2016 Action
5
• Purchasing is the source of the reuse business profits. For FY3/2016 we plan to work on staffing and systems, based on which we will actively invest in promotions to increase our purchasing base and so drive up profit levels.
More staff, better systems will boost purchasing
Aggressive promotions
Purchases growth
Net sales growth
Operating income growthProfit pyramid*
Staffing
Training
QSC (Quality, Service, Cleanliness) motto
Promotions and advertising
Purchases
Net sales
Profits
Profits
* Internal BOOKOFF diagram illustrating steps to securing store profitability
Current Situation
6
• Progress with reinvention, effects of benefits from supplying merchandise to YAHUOKU! emerging. Home appliances on the way to growth.[Averages for small to medium-sized BOOKOFF existing stores]
Insufficient expansion in sales and gross profits due to lack of growth in purchasing home appliances.
6
(Thousand yen) Mar. 2015 Mar. 2016
Net sales 8,300 9,000
Purchase amount 3,500 3,700
Gross profit 5,200 5,500
Store costs
Variable expenses 150 250
Part-time staff cost 1,600 1,800
Fixed expenses 2,750 2,800
Store profits 700 650
Headquarters sales support costs
100 300
Operating income 600 350
Significant increase in personnel and systems expenses and other store costs to promote progress with strategy
Emerging contributions to net sales of and gross profits on existing products from supplying merchandise to YAHUOKU!
Large increase in head office costs from creation and development of operating structure and investment in advertising and sales promotion activities, etc.
Unable to cover increase in costs,operating income decreased
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
Operating Income vs. Plan
7
Initial plan
500 -470
-1,030
Reuse Store Business
-530
90 -70
-160
-230
-120
-180
170 -210
-30
Store-YAHUOKU!
sales system
Cost for reuse home appliances
Effect of warm winter on apparel
merchandise
Lower income in the FC business
-¥20 millionDiscrepancies in cost estimates
-¥100 million
Effect of supplying books to BOOKOFF ONLINE
(180)
Increase in workforceAggressive investments for reuse home appliances, store-YAHUOKU! sales system and other new measures
March 2016Key causes of difference
on single month basis
Online sales (including YAHUOKU!) from supplying books that have been on display in stores for more than a certain period to BOOKOFF Online
BOOKOFFOnline
Business
HUGALLBusiness
Others
Results
Monthly sales plan shortfall
(Million yen)
8
Reuse Store Business
• Existing-store sales vs. FY3/2015: Up 4.2%
• New storesBOOKOFF SUPER BAZAAR, BOOKOFF PLUS: 4
Repackaging from BOOKOFF to BOOKOFF PLUS: 1
• Supplying store inventory to YAHUOKU! (directly operated stores and some franchised stores)
• Introducing reuse home appliances (directly operated stores and some franchised stores (with some exceptions))
• Increasing staff numbers to further introduction of new measures
• Positively implementing promotions to support home appliances and mobile phone purchases
Financial Overview by Segment
9
• Expanded stores (21,000 m2 to 35,000 m2) to accommodate more merchandise
• Commencing program of consolidating store book inventory
• Initiating joint sales of BOOKOFF Online merchandise with YAHUOKU!
・Opened “One-Stop Purchasing Consultation Desk” at Nihombashi Mitsukoshi
Department Store
・Greatly increasing inventory stocking purchases by centering on affluent
customers as our main target
・Big decrease in sales following the sale of the TSUTAYA business in the previous
fiscal year
BOOKOFF Online Business
HUGALL Business
Packaged Media Business
Financial Overview by Segment
10
74,347
1,516
-830
New stores
Closing of stores
BOOKOFFOnline
Business
HUGALLBusiness
(Million yen)Others
FY3/15 FY3/16
+2,217
2,092
2,348
733
32513
-4,188
76,564
Existing stores
Conversion of FC stores to directly operated stores
Sale of TSUTAYABusiness
YoY Change in Net Sales
YoY Change in Operating Income
11
520
(Million yen)
FY3/16
FY3/15
1,127
-1,289
-234
-61
451
-38 100-224
-32
-530
-850
Higher existing-
store sales
Increase in workforce
Costs for new
measures
Provision for card points
New stores
BOOKOFFOnline
Business
HUGALLBusiness
Sale of TSUTAYABusiness
Corporate expenses
Others
Start-up costs -255Promotion costs -398Effect of supplying inventoryto BOOKOFF Online -197
-1,657
12
2. Progress with Reinvention (Progress with the Group’s Medium-Term Business Plan)
Environment Recognition
13
¥1.6 trillion
¥2 trillion
2009 2014 2025Source: The Reuse Business Journal "Second-Hand Business Data Book 2016"
Annual growth4% to 5%
• The reuse market has grown for five consecutive years; ¥1.6 trillion currently. Forecast to reach ¥2 trillion.
Our Vision
14
• People with experience of having utilized reuse still only account for around 40% of the population
• To accomplish our mission of becoming BOOKOFF for people who don't let things go to waste, we are dedicated to creating a world where everyone has easy access to reuse items in order to achieve 100% reuse utilization
40%
100%
Source: Used Article and other Reuse Promotion Business Research Council 2012 Report
Reuse utilization
Current Target population
15
Maximum purchasing– Leveraging the comprehensive power of the
BOOKOFF Group –
Maximum sales– Maximizing sales efficiency in stores and
over the Internet –
Medium-Term Business Plan – Two Basic Policies
Maximum Purchasing
16
Maximizing purchasing options so that customers can sell when and where they want to sell
On the go
Comprehensive reuse stores BOOKOFF SUPER
BAZAAR BOOKOFF PLUS
HUGALL In-store purchasing consultation desk
HUGALL “ReUse Smart at
anytime” shop type
At home
Takuhonbin, home pick-up purchasing service
HUGALLHome pick-up purchases
BOOKOFF Dispatch purchasing
service
HUGALL “ReUse Smart at
anytime” condominium type
If selling books BOOKOFF
Maximum Sales
17
Integrated Group store network and online to optimize range of products and customer convenience offered, with service tailored to suit our customers’ varied lifestyles
Online
BOOKOFF Online E-commerce website
All group companies opening stores on YAHUOKU! auction website
×
Store
BOOKOFF SUPER BAZAAR33 stores
BOOKOFF PLUS43 stores
BOOKOFF758 stores
*Number of stores as of March 31, 2016.
YAHUOKU!
Auction Store
Power to Drive towards the Realization of the World We are Aiming for
18
Number one in real reuse Number one in online reuse
Group’s abundant inventory supplied to YAHUOKU!
Developing services that link together store services renewal and online operations
Expanding inventory and boosting purchasing by growing the range of items covered
Coordination in IT technology to promote supplying items to YAHUOKU! and the development of new services
Promotions to exploit existing member base
Referring customers who have used Yahoo services
YAHUOKU!
Toward the Future
19
Consolidated operating income
By FY3/2020 ¥4 billion
Future target ¥10 billion
20
Reinvent BOOKOFF – From BOOKOFF for books to BOOKOFF for all reuse items –
Expand our comprehensive reuse stores– Create large and multi-format reuse stores for an overwhelming
competitive advantage –
Grow our BOOKOFF Online Business– Offer the largest possible book selection and expand into other product categories –
Increase the scope of operations and revenues in the HUGALL Business
– Advance from the business model launch to growth and profitability –
Medium-Term Business Plan – Four Key Strategies
Reinvent BOOKOFF –Renewal cycle–
21
Higher store sales and gross
profits (reducedlosses)
More customers (store visits, purchases)
Inventory turnover(empty shelves restocked)
More purchases
Staff motivation(employment,
raises)
Room for new
merchandise categories
Higher quality for
existingproducts
(Wider channel for purchases)
Sell merchandise via online
listings
Start off by handling reuse home appliances
YAHUOKU!
Net sale
s
Net sale
s
Net sale
s
Reinvent BOOKOFF –Sales composition–
22
• Renewal of both sales areas and product categories to diversify BOOKOFF’s sources of income
BooksSoftware
Only at stores
BooksSoftware
Home appliances
New products
Stores
Product categoriesSales areas
Pre-renewal Post renewal
YAHUOKU!
Reinvent BOOKOFF –Freshening up of sales areas–
23
• Introduction into directly operated stores and some franchised stores of developed store-YAHUOKU! sales system
• Construction of environments in which BOOKOFF products can be bought anytime anywhere nationwide - with a particular concentration on soft media
YAHUOKU!
Reinvent BOOKOFF –Freshening up of sales areas–
24
• Supplying 900,000 store goods items, mainly soft media, by end April 2016
* Currently also supplying 950,000 books via BOOKOFF Online (described later)
Trend in number of items supplied to YAHUOKU!
Company V
Company P
Company D
0
20
40
60
80
1001,000,000
800,000
600,000
400,000
200,000
900,000 items
April 2015 April 2016
Auction Store
Reinvent BOOKOFF –Rethinking product categories–
25
• Introducing reuse home appliances to directly operated reuse stores
• In addition to building price database reflecting market values, we have also created a dealing manual for use in assessment and processing
On-site training conducted by specialist team membersRemote assessments using web cameras
Head office’s specialist staff monitor price movements, selling environments and markets nationwide and set purchasing prices accordingly.
Staff at stores use the home appliances specialized purchasing system to assess suitable prices.
Head office Individual stores
26
Reinvent BOOKOFF –Rethinking product categories–
• BOOKOFF’s strengths are its number of stores and their locations
• Having a neighborhood BOOKOFF in which customers can sell anything they want represents a huge step forward for home appliances
BOOKOFF246 Kawasaki Kajigaya Store
BOOKOFFFukuoka Hakata Exit Store
Starting off by handling reuse home appliances
Expand Our Comprehensive Reuse Stores –Store opening plan–
27
• Opening of nine new stores that will become comprehensive reuse stores at the heart of each of the areas located
• Also undertaking some renewal of existing BSB and BOP stores
■New store openings (directly operated)
BSB: 1BOP: 3
■Repackaging stores(from BOOKOFF to BOP)
Directly operated store: 1Franchise store: 4
35 43
32 3367
76
210BOP BSB
Comprehensive Reuse Stores Store-opening Plan(Directly operated stores + Franchise stores)
Mar. 31, 2015 Mar. 31, 2020Plan
BSB: BOOKOFF SUPER BAZAARBOP: BOOKOFF PLUS
Mar. 31, 2016
(Number of stores)
Expand Our Comprehensive Reuse Stores –FY3/2016 openings–
28
BSB Route 14 Chiba Makuhari Floor space: 2,500 m2
BOP Nagoya Shin-Nakashima Frante Floor space: 1,700 m2
BOP Don Quijote AkitaFloor space: 1,400 m2
BOP Tatomi Showa Street StoreFloor space: 1,500 m2
Manuals for each product category
Expand Our Comprehensive Reuse Stores –Purchasing operations –
29
• Preparing manuals for each product category, and on-site training for shop floor staff
• Deploying members of staff with specialist skills to undertake assessments using web cameras, and thereby constructing a purchasing operation that means we can provide a reassuring and credible purchasing service
Expand Our Comprehensive Reuse Stores
30
• In addition to providing a combination of large store selling power from outlets that function as core facilities in their regions with the convenience offered by a small neighborhood shop, we also aim to become the number one in reuse option in every area by making the best use of our soft skills resources in terms of specialization and customer interaction
Number one in reuse in the region
Grow Our BOOKOFF Online Business
31
• Undertaking the expansion of the floor space of our logistics warehouses so as to be able to greatly expand the number of inventory items
• In addition to our existing Takuhonbin dispatch service, we are commencing book inventory shipments from our reuse stores
Expanded warehouse space from 21,000 m2 to 35,000 m2
Customers
Stores
As of end-March 2015
About 1.6 million copies
As of end-March 2016
About 4.0 million copies→
Inventory transfer
Takuhonbin
→As of end-March
2017 (plan)7.5 million copies
Book Inventory
32
• In addition to sales on our BOOKOFF Online proprietary e-commerce website, we began supplying books to YAHUOKU! from January 2016 and we currently provide more than 950,000 titles.
950,000 titles
supplied
Customers
Grow Our BOOKOFF Online Business
YAHUOKU!
33
Largest and best range of reuse items stocked
• We aim to realize the largest range of used book inventory in the sector and have built a site that makes it easy for our customers to search for and find the items they want.
• We are also examining the prospect of dealing in new product categories both to meet our customers’ needs and to make best use of the Group’s existing store services and an affinity with books and software.
Website improvement
New servicesNew product
categories
Upgraded search functions Enhanced product
information
Storefront reception and store orders
Coordinated membership services
High affinity products Responsiveness to user needs
Grow Our BOOKOFF Online Business
34
• With our stock of used book inventory as our starting point we aim to achieve sustainable growth by accepting the challenge of expanding into new product categories
0
2
4
6
8
10
12
FY3/16 FY3/20FY3/17
Expanding into new product categories by enhancing opportunities to use our website and by capturing new sales
Maximizing the number of used book inventory carried and boosting our sales
efficiency through cooperation with YAHUOKU!
Net sales
¥10 billion
(Billion yen)The challenge of
expanding into new product categories
Growth in sales centering on used
books and software
Grow Our BOOKOFF Online Business
35
Increase the Scope of Operations and Revenues in the HUGALL Business
Launched HUGALL in April 2013 as a reuse business that purchases items through all types of channels (not just in-store); sells items via the best channel
Purchases Sales
Optimize channelsAdd value to merchandise
Parcel delivery service
At customers’ homes
Purchasing agent stores
B-to-B
A variety of channels for purchasing“ALL BUY”
Sell at the highest prices
Internet
BOOKOFF Group stores
B-to-B
Overseas
Increase the Scope of Operations and Revenues in the HUGALL Business
36
• Expanding our purchasing services by using various different channels
Opened One-Stop Purchasing Consultation Desk at Nihombashi Mitsukoshi Department Store in June 2015
Opened the shop-type “ReUse Smart at anytime” automated lockers mainly at commercial facilities in Tokyo Metro area
• Purchasing amounts growing strongly particularly in our main target zone of affluent customers
Exceeded ¥90 million
Sep. 2015
Approx. ¥20 million
Apr. 2015
Approx. ¥50 million
Mar. 2016
Monthly Purchases
37
FY3/15 FY3/17FY3/14 FY3/16 FY3/18 FY3/19
Sales
Purchases
Business expansionMoving into the black
contributing to earnings
Concentrate on establishing a business model
Move to 16,000 ㎡warehouse
Increase the Scope of Operations and Revenues in the HUGALL Business
Earnings
38
Purchases
• In response to continued expansion in purchasing, the aim now is to achieve conversion into sales, rightsize our cost base, and achieve profitability
Sales
Expenses
Increase the Scope of Operations and Revenues in the HUGALL Business
39
3. Policies for FY3/2017
Policies for FY3/2017 – Positioning
40
By implementing the following measures, we aim to certainly achieve our aims of returning to the black at the operating level and making progress towards recording ¥4 billion of operating income
Realization of contributions from investments in reinvent (new measures) made in the previous fiscal year
Strict implementation of cost control
Continued action to be taken in accordance with medium-term business plan
Policies for FY3/2017 –Key points for individual businesses
41
Reinvent BOOKOFF
Expand our comprehensive reuse stores
Grow our BOOKOFF Online Business
Increase the scope of operations and revenues in the HUGALL Business
Making reinvent actions well established; turning profitable Expansion in purchasing reuse home appliances; growth in sales Improvement in earnings by means of cost control
New store openings; acceleration of comprehensive repackaging program Eight new BSB, BOP stores to be opened Ten BOOKOFF stores to be repackaged
Increasing earnings by maximizing the number of used book inventory items carried Enhancing internal operational efficiency of warehouses by use
of materials handling techniques Website improvements and implementation of book log review
Achieving return to the black by means of expansion in scale of business operations Doubling in purchases through expansion in procurement
channels Enhancement of sales efficiency by means of the use of
multiple sales channels
Reinvent BOOKOFF –Targets we have being aiming at this year
42
Amount of purchases
Existing product
categories
Existing product
categoriesExisting product
categories
Home appliances
Existing product
categories
Home appliances
Up 20% YoY
April 2015 results 2016年4月
Workforce growth
YAHUOKU! listings
Reuse home appliances
Strengthened promotions
As well as adding 20% on our existing store purchases with newly introduced reuse home appliances, we have also realized incremental sales and gross profit by supplying items to YAHUOKU!
April 2016 initial plan
Amount of sales Amount of purchases Amount of sales
Key to the Success of the Renewal
43
(Thousand yen) Mar. 2016 Target
Net sales 9,000 10,000
Purchase amount 3,700 4,200
Gross profit 5,500 6,000
Store costs
Variable expenses 250 300
Part-time staff cost 1,800 1,800
Fixed expenses 2,800 2,800
Store profits 650 1,100
Depends on whether, and to what extent, it will be possible to create target model stores
[Averages for small to medium-sized BOOKOFF existing stores]
44
Situation as of April 2016 (Implementation action)
• The plan adopted in the previous fiscal year (the initial plan) was to secure a 20% year-on-year increase in the amount of purchase, and to maintain our policy of raising recognition of our dealing in home appliances from the fourth quarter of the previous fiscal year.
• This was achieved not just by advertising and publicity but by rolling out a store campaign incorporating higher purchase prices and granting additional points, etc.
Recognition enhancements on corporate website
April 2016 inventory value plan and product category breakdown
(20% higher YoY for existing stores)
Home appliances
Existing product
categories
Higher purchase prices for home appliances campaign
TV commercial
45
Situation as of April 2016 (Purchase) –By package–
Existing product
categories
Existing product
categories
Home appliances
Existing product
categories
Home appliances
April 2015Results
April 2016
Initial planApril 2016
Results
Up 20% YoY
Up 13% YoY
Existing product
categories
Existing product
categories
Home appliances
Existing product
categories
Home appliances
Up 23% YoYUp 25% YoY
• We took various actions, but purchases of reuse home appliances fell far short of plan. Purchases related to BOOKOFF failed to achieve 20% year-on-year growth.
BOOKOFF BSB/BOP
Amount of purchases by product category
April 2015Results
April 2016
Initial planApril 2016
Results
Situation as of April 2016 (Sales) –BOOKOFF–
46
Existing product
categories
Home appliances
Existing product
categories
Home appliances
• In contrast to a year-on-year growth of 13% in purchases, sales by 6% year-on-year. It will take time for the increased purchase to translate into sales.
Initial plan Results
Existing product
categories
Home appliances Existing
product categories
Home appliances
Initial plan Results
Up 13% YoY
Up 6% YoY
Amount of sales
BOOKOFF
Amount of purchases
Situation as of April 2016 (Sales) –BSB/BOP–
47
Existing product
categories
Home appliances Existing
product categories
Home appliances
• Although BSB and BOP achieved their planned aim for growth in purchases year-on-year, as was the case for BOOKOFF, it will take time for the increased purchase to translate into sales.
Initial plan Results
Existing product
categories
Home appliances
Existing product
categories
Home appliances
Up 25% YoY
Up 3% YoY
Amount of purchases Amount of sales
BSB/BOP
Initial plan Results
48
Situation as of April 2016 (Trends)
• Differences were apparent between BOOKOFF, BSB, and BOP
• Although there were some stores in which the increase in purchases translated into sales growth, such cases remain rare as yet
Pu
rchase
s vs. FY3
/15
Sales vs. FY3/15
BOOKOFF BSB/BOP
Purchases upSales remain flat
33%
Purchases upSales up
24%
Purchases remain flat
Sales remain flat
33%
Purchases remain flat
Sales up
10%
Purchases upSales remain flat
59%
Purchases upSales up
15%
Purchases remain flat
Sales remain flat
24%
Purchases remain flat
Sales up
2%
Distribution of numbers of stores by purchases/actual sales results
Pu
rchase
s vs. FY3
/15
Sales vs. FY3/15
Summary of Current Situation and Outlook for the Reuse Store Business in FY3/2017
49
Purchases of reuse home appliances fell far short of plan but there are stores where the increase in purchase was linked to growth in sales and so although we are not making any change to our strategic policy direction on growth in purchase and sales, given the current situation and prospects, we acknowledge that the process will take a certain amount of time
Having considered the situation as of April 2016 in making our forecasts for the current fiscal year we have extensively revised our assumptions for the year and will be implementing cost controls in response
Since there is a wide degree of disparity between individual stores in terms of purchase and sales, we are adopting a change of direction in our policy so as to further the implementation of actions tailored to the circumstances of individual stores and plan to improve profitability by achieving the aims of our medium-term business plan as a result
50
FY3/2017 Measures for Strengthening Reuse Home Appliances (Store actions)
• Current state of purchase and sales by individual store and development of individual actions tailored to the levels established in the revised forecasts for annual purchases and sales
Pu
rchase
s vs. FY3
/15
Sales vs. FY3/15
[Satisfactory progress]
Maintaining purchase levelsand
maintaining sales levels
[Issues outstanding]
Maintaining purchase levels and
measures to bolster sales
[Issues outstanding]
Cost control
[Issues outstanding]
Bolstering purchase levelsor
cost control
[Sales] Polishing up the sales area Assiduously updating prices Strengthening YAHUOKU! sales
[Purchases] Enhancing home appliance
offers to existing product customers
Improving customer service (converting them into regular customers)
Taking particular care with in-store notices
[Cost control] Revising content of range of
product categories handled Right-sizing allocation of
personnel
51
Implementation of area marketingSelecting areas of concentration from consideration of current state of purchases, and planning to maximize the sales efficiency achievable by concentrating costs in these areas
Launching promotions synchronized with peak timings for specific product categoriesStaging timely promotions that are synchronized with the timing of replacement purchase periods and new product launches, etc.
Taking every care with in-store promotionsReinforcing the effectiveness of in-store promotions with POP, in-store broadcasting and other techniques to ensure 100% levels of recognition among existing customers of the fact that the store now handles home appliance items. Planning for utilization switching.
Strengthening online ability to attract customers• Boosting exposure of home appliances featured on corporate website and freshening up
contents regularly
• Taking measures to increase the recognition and visibility of the range of home appliances carried from pages on YAHUOKU! website and BOOKOFF auction store
FY3/2017 Measures for Strengthening Reuse Home Appliances (Promotions)
FY3/2017 Full-year Forecasts
52
• In light of the April results, we have significantly revised our consolidated operating income target of ¥3 billion, and set full-year forecasts for our business results which we believe are highly likely to be achieved
Net sales ¥85,000 million (+¥84,300 million YoY)
Operating income ¥800 million (+¥1,330 million YoY)
Ordinary income ¥1,300 million (+¥1,290 million YoY)
Profit attributable to owners of parent ¥350 million (+¥870 million YoY)
FY3/2017 Assumptions for Reuse Store Business Results Forecast
53
Existing-store purchase growth Up 5％ YoY
Existing-store sales growth Up 5％ YoY
Cost control
We would revise our cost forecasts for personnel expenses, advertising and promotional expenses, and other measures etc.
FY3/2017 Sales Plan by Product Category in the Reuse Store Business
54
Product category FY3/16 results FY3/17 planFY3/17
sales composition
Books 100.7% 100% 35%
Software (music, videos, games) 103.6% 100% 29%
Fashion goods 100.5% 104% 14%
Trading cards, hobby goods 122.3% 114% 4%
High-end brand items, other 106.8% 112% 11%
Home appliances/mobile phones -Significant
increase7%
YoY sales by product category (Reuse Store Business existing store sales)
• Sales results for existing products saw all areas, including apparel which was heavily affected by the warm winter, maintaining levels of turnover above those recorded in the previous year
• The plan for the current fiscal year has been created at levels which appear highly achievable in consideration of the most recent business results and trends
Initial planCurrent revision
Differences Main factors
Reuse Store Business 5,150 3,000 -2,150
• ¥1 billion for 200 small to medium-sized BOOKOFF stores
• ¥1 billion for 100 BSB and BOP stores requiring remodeling so as to be able to achieve the increase in earnings planned
BOOKOFF Online Business
200 500 +300 Business results better than at the time the initial forecast was made
HUGALL Business 0 -100 -100 Issues remain in achieving profitability
Packaged Media Business, Other
-100 -100 0 -
Corporate expenses and adjustments
-2,250 -2,500 -250 Effect of dual corporate tax system (liability)
Total 3,000 800 -2,200
(Million yen)
Gap Between Initial Plan (operating income ¥3 billion plan) and Current Revision
55
FY3/2017 Net Sales Forecast (vs. FY3/2016)
56
76,564
2,963
2,429
FY3/17FY3/16
+8,436
39
1,407
85,000
Closing of stores (FY3/16, FY3/17) 2,584
-988
Existing Stores
New stores / stores acquired (FY3/16, FY3/17)
Reuse Store Business
+4,560
BOOKOFF Online
Business
HUGALL Business
Other
(Million yen)
FY3/2017 Operating Income Forecast (vs. FY3/2016)
57
-530
800
-90
1,200
-70200
370 -240
-40
Existing stores
BOOKOFF Online
Business
HUGALL Business
Corporate expenses
Other
+1,330
FY3/16 FY3/17
Reuse Store Business
+1,040
Effect of dual corporate tax system, etc.
Significant increase due to introduction of reuse home appliances and store-YAHUOKU! sales system, etc.
Closing of stores (FY3/16/FY3/17)
New stores / stores acquired
(FY3/16, FY3/17)
(Million yen)
58
・Existing-store sales vs. FY3/2016: Up 5%
・New storesBOOKOFF SUPER BAZAAR, BOOKOFF PLUS: 6 storesRepackaging from BOOKOFF to BOOKOFF PLUS: 9 stores
・Completion of introduction of reuse home appliances and supply of
products to YAHUOKU! at directly operated stores
・Enhanced efficiency in purchasing and transfer of inventory due to
integration of logistics structure
Reuse Store Business
FY3/2017 Assumptions for Results Forecast
・Net sales vs. FY3/2016: Up 250%・Expansion in scale and promotion of new developments in existing purchasing
channels・Bolstering of special events sales at commercial facilities in addition to EC sales, and
B-to-B sales
59
BOOKOFF Online Business・Net sales vs. FY3/2016: Up 25%・Increase in EC inventory due to the expansion of warehouse floor space to
accommodate a larger inventory・Website improvements resulting from strengthening in recruitment of engineers
and more effective exploitation of customer data・Enhanced operational efficiency in warehouses due to investments in fully
automated packaging machinery, etc.・Prevention of opportunity losses as a result of expansion in new book inventory
carried
HUGALL Business
FY3/2017 Assumptions for Results Forecast
Goals for Completion of the Medium-term Plan
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FY3/20
Operating income
¥0.8 billion
FY3/2X
Operating income
¥10 billion
Operating income
¥4 billion
FY3/17
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Appendix
About BOOKOFF
Name BOOKOFF CORPORATION LIMITED
Representative Nobuyuki Matsushita, President and CEO
Established August 1991
Head office2-14-20 Kobuchi, Minami-ku, Sagamihara, Kanagawa, Japan
Capital ¥3,652 million
Business activities
Operation of BOOKOFF used book stores, development and operation of new reuse merchandise stores, support for franchised stores
Group companies
12 subsidiaries, 1 affiliated company
Stores 869 (including 480 FC stores)
Employees 1,156
Stock listingFirst Section, Tokyo Stock Exchange(Securities code: 3313)
Trading unit 100 shares
Corporate Profile Corporate Philosophy
Mission
As of the end of March 2016
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“BOOKOFF is for people who don’t let things go to waste”
A company with an infrastructure for people who refuse to discard items that can be reused
Key Performance Indicators/Dividend Policy
Key performance indicators
Operating income of ¥10 billion (long-term target) and operating income of ¥4 billion for FY3/2020 (medium-term target)
Dividend policy
Target 25% payout ratio based on consolidated net income
Contributions to society through our business activities
Pursuit of employees’ material and spiritual wellbeing
About the BOOKOFF Group
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The BOOKOFF Group is a company with an infrastructure for people who refuse to discard items that can be reused
In the hope that our customers and that everyone in the local area will feel that “it's great that we've got this store here,” and so that every employee in our company can take pride in feeling that “I'm glad I work in this and that I
work for this company,” the BOOKOFF Group has adopted the following two corporate philosophies.
Contributing to society through our business activities
Pursuit of employees’ material and spiritual wellbeing
Corporate philosophy
Strengths of the BOOKOFF Group
Approximately 900 real stores nationwide
It's been 25 years now since our foundation.
The group as a whole has grown into a store chain of approximately 900 stores
both in Japan and overseas.
High level of recognition among consumers
Recognition of the BOOKOFF Group among consumers is approximately
100%.
We are widely known as being “the place where you can sell things.”
Reassuring brand power
By providing a purchasing service in which we put ourselves in our
customers’ shoes, and fully observe and respect all laws and regulations
governing our business, we aim to create stores where our customers can sell things with complete peace of mind.
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From BOOKOFF for Books to BOOKOFF for All Reuse Items: 1
Store package of the BOOKOFF Group
BOOKOFF handles books, CDs, DVDs, game software, home
appliances, mobile phones, and other items.
BOOKOFF has approximately 750 stores nationwide.
BOOKOFF PLUS is a composite store/store complex chain that offers an extra ‘plus factor’ and
deals in apparel, brand goods, and similar items.
It has now developed into a chain with 43 stores across Japan.
BOOKOFF SUPER BAZAAR is a comprehensive large-format store chain that deals in broad range of
reuse items. It has now developed into a chain
with 33 stores nationwide.
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Providing a place to experience “the fun of reusing.”
From BOOKOFF for Books to BOOKOFF for All Reuse Items: 2
Home appliances, mobile phones
Books
Apparel
Luxury-brand bags, kitchenware
Sporting goods, musical instrument
Children’s apparel, baby goods
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Understand “the fun of reusing” and you can enjoy life even more!
A chance to find a new interest or hobby!
Try choosing a writer you've never read before!
Read the whole of a comic book series in one go!
Be bold and take the challenge of wearing a new color or style you never worn before!
The fun of coordinating!
The fun of being able to buy without worrying about the price!
You can see all the things you can't see anywhere else all gathered together here in one place!
Choose brand goods for everyday use!
The fun of collecting brands!
Go on, this is your chance to pursue nostalgic sports or to grab a musical instrument you've always wanted!
The blossoming of your children's talents
The surfing and golf goods, the guitar you’ve wanted for so long… perhaps you can't afford it new but you can get it for reuse at a very reasonable price, and you can make a start right now without worrying if you just remember that “if I don't keep it up I can always sell it.”
You've seen snowboarding, tennis, and golf genius boys and girls on TV, haven't you? It might be tough to buy a full set all in one go, but if it's reuse you can give your child the support to pursue the challenge of a new talent without having to worry about the cost.
Baby goods - they soon grow out of them which is all the more reason to get them for reuse!
Children grow so quickly, and the baby carriage you bought for them so lovingly soon falls out of use. At times like these, please buy your items reuse and carefree, and then just sell them again when you’ve finished with them.
Nowadays, for home appliance items, the functionality of reuse is completely satisfactory!
If you set out to buy all of your important home appliances in one go, it's going to amount to a very expensive bill for you to pay. These days however, you can easily buy great quality reuse products with high-level functions and excellent reliability so cheaply!
Unused brand tableware at very affordable prices!
The prices are so reasonable so why not get the whole set?!
From BOOKOFF for Books to BOOKOFF for All Reuse Items: 3
Q1. Did you know that BOOKOFF has started dealing in home appliances?
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Thanks to the impact of TV commercials and other promotional activities, the level of recognition for this new range of products among consumers has risen and we are receiving a strongly positive response from our customers in the main.
Degrees of Recognition and Satisfaction for the New Home Appliance Product Category
Level of recognition
Have actually bought somethingHave actually sold somethingKnow that they are dealing in these itemsDidn't know that they are dealing in these items
Level of recognition 60% +
Q2. Please say how satisfied you feel about BOOKOFF dealing in home appliances?
Level of satisfaction
Very satisfiedSatisfiedCan't really say one way or the otherDissatisfied
Just under 60% of customers
surveyed expressed
satisfaction. 0% were totally
dissatisfied.
Customer survey conducted in February 2016 at stores Q1: N=604 people
BOOKOFF Group’s CSR Activities
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We are continuing to provide “it's BOOKOFF so it can be done” support.
2016 Kumamoto Earthquake Reconstruction Assistance
If you sell books, CDs, DVDs, game software, and other items that you don't need at home on the Takuhonbin home pick-up purchase service provided by BOOKOFF Online, then the amounts of those purchases can be useful in providing support for disaster relief thanks to the “selling support program” that we are operating.
Furthermore, the BOOKOFF Group will add an extra 10% on top of the purchase amount which will be donated to the Japanese Red Cross Society.
Great East Japan Earthquake Reconstruction Assistance
Please apply on the BOOKOFF Online homepage.
