Toridoll Corporation FY2014 Financial Result · Measures for staff sufficiency Measures for staff...

Toridoll Corporation

FY2014 Financial Result May 15, 2015

1

Financial Settlement Digest for the year ended March 2015

2

Highlights

(Consolidated) ・Both Revenue and Profit have been performing well.

・2.16 Billion yen for impairment loss was calculated.

(Non-consolidated) ・Performance of Existing Stores remarkably increased (+5.5% vs. previous period).

･COGS ratio to Net sales and advertising cost increased along with sales of high-value-added products.

・Cost ratio to Net sales decreased because of Net sales increase.

Profit & Loss Outline

3

Consolidated PL (IFRS) (unit: Million yen)

ActualRatio to

RevenuePlanned

Ratio to

Revenue

Ratio to

PlanAmount

Ratio to

Revenue

Ratio to

Prev. period

Revenue 87,294 - 84,803 - 102.9% 78,318 - 111.5%

Operating profit 4,175 4.8% 3,900 4.6% 107.1% 2,643 3.4% 157.9%

Profit before tax 3,614 4.1% 3,628 4.3% 99.6% 2,374 3.0% 152.2%

Profit for the year 2,011 2.3% 1,762 2.1% 114.1% 978 1.2% 205.7%

Profit for the year

attributable to owners of

the parents 1,982 2.3% 1,732 2.0% 114.4% 975 1.2% 203.3%

Non-consolidated PL (J-GAAP)

ActualRatio to

Net salesPlanned

Ratio to

Net sales

Ratio to

PlanAmount

Ratio to

Net sales

Ratio to

Prev. period

Net sales 83,479 - 80,583 - 103.6% 76,750 - 108.8%

Gross profit 62,249 74.6% - - - 58,291 75.9% 106.8%

Operating profit 8,144 9.8% 7,773 9.6% 104.8% 5,769 7.5% 141.2%

Ordinary profit 8,096 9.7% 7,597 9.4% 106.6% 5,622 7.3% 144.0%

Profit for the year 2,467 3.0% 2,627 3.3% 93.9% 1,647 2.1% 149.8%

Previous period

Previous periodThis period

This period

Number of stores by brands/countries

Note 1) Name of “DREAM DINING CORPORATION “ was changed to “TORIDOLL DINING CORPORATION” （”TDC”）. This subsidiary

company is operating/managing “Tokyo Table” and “Tokyo Bento” brands in north America.

Note 2) GEORGE’S CORPORATION (”GEORGE’S”) was operating/managing “Blue Marlin” brand.

Open/Close stores Outline

Net +1 store for Non-consolidated; Net +41 stores in subsidiary companies, JVs, FCs

To keep aggressive opening in overseas for 100 store-operation system

4

Non-consolidated

Open Close

774 16 (11) 779

Road Side 621 9 (8) 622

Shopping Center 153 7 (3) 157

Toridoll (Yakitori) 21 1 (3) 19

Marushoya (Ramen) 15 (1) 14

Nagatahonjoken (Yakisoba) 16 (2) 14

Others 21 5 (4) 22

847 22 (21) 848

March

2015

Total

Marugame Seimen (Udon)

March

2014

During period

Subsidiaries, JVs, FCs

Open Close

Overseas 61 50 (9) 102

USA 2 2

Russia 7 1 (3) 5

South Korea 5 5 10

Taiwan (ROC) 4 6 10

Australia 2 1 3

TDC (*1) 1 4 5

GEORGE’S (*2) 0 3 (2) 1

Kenya 1 1

China (PRC)<JV> 23 6 (2) 27

Thailand <JV> 10 9 (2) 17

Indonesia <FC> 6 10 16

Vietnam <FC> 1 4 5

Domestic 0 2 (2) 0

61 52 (11) 102

March

2015

Total

March

2014

During period

March2014

Increase ofCOGS ratio

Decrease oflabor cost

ratio

Decrease ofutitily cost

ratio

Decrease ofother cost

ratio

March2015

5

Non-consolidated year-on-year analysis of Ordinary profit

7.3% -1.4pt +1.2pt

+0.4pt

+1.2pt 9.7% Main factors of fluctuation

Increase of COGS ratio

Sales of high-value-added

products

Increase of food cost

Decrease of labor cost ratio

Increase of Net sales

(denominator)

Decrease of utility cost ratio


(denominator)

Decrease of other cost ratio

(Positive factors)

Effect of Depreciation method

change (approx. +1.2pt）


(denominator)

(Negative factor)

Increase of advertisement cost

Domestic business achieved 9.7% of Ordinary profit ratio (to Net sales) at Non-

consolidated basis.

Approx. 1.2pt. improvement of Ordinary profit ratio without effect of Depreciation

method change.

Consolidated subsidiary companies (all Overseas) （J-GAAP） (unit: Million yen)

ActualRatio to

RevenueAmount

Ratio to

Revenue

Ratio to

PlanActual

Ratio to

Revenue

Ratio to

Prev. period

Net sales 3,881 - 4,220 - 92.0% 1,609 - 241.2%

Gross profit 2,797 72.1% - - - 1,160 72.1% 241.1%

Operating profit (552) - (573) - - (718) - -

Ordinary profit (970) - (669) - - (659) - -

This period Planned Previous period

6

Overseas Consolidated subsidiary companies’ PL Outline

Overseas business maintained as planned (except some regions)

Tried to improve performance by closing unprofitable stores, but still running in red.

Opened 51 stores vs. 56 planned

Net sales not achieved because of fewer of Open/Close stores than planned

Ordinary profit be almost as planned

Operating loss decrease but still can’t cover overhead cost and store opening cost

Enough profit at store level

To build profitable structure for next period

Note 1) Numbers are simply calculated by subtracting non-consolidated amount from consolidated amount.

(1

7

Main factors of

fluctuation

Increase of assets

Increase of cash

equivalents by

Public Offering

Decrease of liabilities

Influence by no

borrowing money in

the second half of

the year

Equity attributable to owner of parent company for this period: 42.9%

Interest-bearing liabilities dependence: 36.4%

Interest-bearing liabilities dependence decrease because of capital increase and others

BS Outline

*Residual value of fixed assets increased by change of depreciation methods to follow IFRS.

Consolidated BS (IFRS) (unit: Million yen)

Amount Ratio Amount Ratio Difference

Total assets 59,019 100.0% 52,885 100.0% 6,134

Current assets 17,997 30.5% 10,454 19.8% 7,543

Non-current assets 41,022 69.5% 42,430 80.2% (1,408)

Total liabilities and equity 59,019 100.0% 52,885 100.0% 6,134

Liabilities 33,659 57.0% 34,790 65.8% (1,131)

(included interest-bearing liabilities) 21,489 36.4% 24,984 47.2% (3,495)

Current liabilities 18,329 31.1% 16,402 31.0% 1,927

Non-current liabilities 15,330 26.0% 18,389 34.8% (3,059)

Total equity 25,359 43.0% 18,094 34.2% 7,265(Equity attributable to

owners of the parent) 25,302 42.9% 18,074 34.2% 7,228

End of this year End of previous year

8

Cash & equivalents at end of period increased by restraint of new store opening

CF Outline

Main factors of fluctuation

Net cash provided by (used

in) operating activities

Income increase with

extension of existing

stores


in) investing activities

Decrease in branch

investment by restraint

of new store opening

■ Net cash provided by

(used in) financing

activities

■ Decrease of borrowing

money/Cash-in

by the Public Offering

Consolidated CF (IFRS) (unit: Million yen)

End of

this year

End of

last yearDifference


in) operating activities9,497 6,539 2,958


in) investing activities(3,468) (8,170) 4,702


in) financing activities977 2,494 (1,517)

Cash and cash equivalents

at end of period14,992 7,635 7,357

Domestic business

・Good performances of Existing Stores

・Success example of brand switch

・Measures for staff sufficiency

Overseas business

・Overseas business outline

9

Summary of management measures for the year ended March 2015

10

High spending per customer by selling high-value-added products such as “Nikumori UDON”

Approaches to new customers by broadcasting TV CMs nationwide ⇒ more visitors

Good performances of Existing stores

last year

Good business result of Existing Stores by selling high-value-added

products and broadcasting TV CM nationwide

Product mix ratio of

Nikumori UDON maintained more

than 11% even

before TV CM

launch

First product

CM Effect

9.0%

Second product

CM Effect

8.4%

Note1) CM Effect is estimated by the increase of visitors for Existing Stores against last year

(1

Year-over-year result in domestic Existing Stores(1 of Marugame Seimen brand

(against corresponding day of week of last year)

Third product

CM Effect

5.3%

Fourth product

CM Effect

5.6%

Fifth product

CM Effect

8.9%

11

Success example of brand switch

(Other examples)

● Neyagawa (Marugame Seimen⇒Kona’s Coffee)

Transfer effect： 8% of old brand sales transferred to remainder 2 stores

Sales increase effect ： 3.5 times of sales by brand switch

●Ritsurinkoen (Marugame Seimen⇒Clover Coffee), (Kamagaya Marugame Seimen⇒Toridoll)

Before After

2.4 times of sales by brand switch

22% of old brand

sales transferred

to remainder 3

stores

Brand switch brings sales increase and transfer effect

Fujimino

store

Ooi AEON

store

1.7km

Soyoka

Fujimino

store

2.9km

Fujimi store

5.0km

* km shows the distance of each store from Fujimino store.

12

Measures for staff sufficiency

Measures for staff care lead 20% drop of staffs’ quitting rate (i.e., turn-over)

⇒ Approx. 1,300 people decrease of quitting saved recruiting cost of 1 million yen

Education for trainers to improve working condition at stores

Improvement of introduction training & follow-up training

Centralize recruiting at head office and accumulate data for two years

⇒ ･Effective recruiting based on the data analysis of each store

･Identify seasonal characteristics of recruitment market and target best timing to hire

Measures for staff sufficiency

（Last year end） 16,700 staffs ⇒ （This year end） 17,750 staffs

Approx. +1,000 staffs （* Head count of part-time workers）

Sales increase effect of 320 million yen

= Sales per staff 4,000(yen/person・hour) X 80(hour/month) X 1,000(person)

High performance of Existing Store by sales increase effect

（Main measures）

13

Overseas business outline

Achieve profits in monthly basis; improve operating profit

Keeping enough operating profits

Increase of profit, Scrap of unprofitable stores

Intensive store development in highly profitable countries such as Taiwan

Quick close of unprofitable stores in such as Russia

Start franchising in Russia and Korea.

• Non-consolidated companies included

• Some stores of George’s/TDC excluded

Continue opening stores

Improve profit ability and achieve profit in monthly basis

achieved profits in August and March

*Foreign exchange loss/gain of Russia

impacted overseas PL between

December and February

14

Financial forecast for FY2015 Domestic business

Overseas business

15

Financial forecast for FY2015

Domestic business： Strengthening business base

Aggressive development of new brands

Overseas business： Aggressively continue developing new stores for full-year profit

New stores opened: Domestic: 25 stores, Overseas: 60 stores.

2,300 million yen calculated for impairment loss

Consolidated PL (IFRS) (unit: Million yen)Ratio to

Prev. period

Revenue 92,197 - 87,294 - 105.6%

Operating profit 5,255 5.7% 4,175 - 125.9%

Profit before tax 5,173 5.6% 3,614 4.1% 143.1%

Profit for the year 2,975 3.2% 2,011 2.3% 147.9%Profit for the year attributable

to owners of the parent 2,908 3.2% 1,982 2.3% 146.7%

Non-consolidated PL (J-GAAP)Ratio to

Prev. period

Net sales 86,860 - 83,479 - 104.1%

Operating profit 8,168 9.4% 8,144 9.8% 100.3%

Ordinary profit 8,108 9.3% 8,096 9.7% 100.1%

Profit for the year 3,600 4.1% 2,467 3.0% 145.9%

FY 2016

FY 2016

Previous period

Previous period

16

Main measures (new brands) of domestic business(1)

Aggressive development of new brands (1)

Launch “Clover Coffee” brand for rapidly growing suburb café market

Café market in suburb area is rapidly growing with strong demands

（c.f., Other companies) Komeda Coffee (620), Hoshino Coffee (130),

Miyama Coffee (4), CAFE de PERAGORO (4), Musashino-mori Coffee (1)

Reproduction of success model

Strength of “Marugame Seimen” brand is highly-value-adding process inside

each store using inexpensive ingredients, which brought rapid growth with

high profits.

⇒ Aiming the similar business model in café business by roasting raw coffee

beans inside each store for both competitiveness and rapid growth.

17

Main measures (new brands) of domestic business(2)

Unlike station area, family dinning stores in suburbs have fewer competitors with big market

where wide range of segments can be covered.

Adding new resources/ideas to our business origin’s know-hows, explore new areas in

Kanto.

Sales become 1.6 times (from 7 million to 11 million yen) by brand change.

Aggressive development of new brands (2)

Open “Toridoll” brand in Kanto (eastern Japan) area

Modern interior decor Many bar menus in addition to regular items

18

Main measures (Existing Stores) in domestic business

Measures of Existing Stores

Sell high-value-added products and continue TV CM nationwide

Shift to strategic PR to raise brand value

Create fans

Store development

Open “Marugame Seimen” in shopping-malls where fewer competitions

Accelerate development of Café brand

Open “Toridoll“ brand in Kanto area

Measures for staff sufficiency and QSC improvement

Further improvement to lower staff quitting rate and strong recruitment

Shift to localize store-management for community-based stores

Continue some measures of this year and aim further innovation


Ratio to

Prev. period

5,469 - 3,881 - 140.9%

(218) - (1,690) - 12.9%

(259) - (2,109) - 12.3%

(406) - (2,162) - 18.8%

Impairment loss (500) (467)

Store close loss - (130)

Appraisal loss of

affiliated companies - (519)

282 (574)

FY 2016 Previous period

Operating income except

extraordinary expense

Extraordinary

expenses

Profit for the year

Profit before tax

Operating profit

Revenue

19

Financial forecast for FY2015（Overseas business）

To continue aggressive store development for full-year profit

60 new stores (direct management: 11, JV/FC: 49)

*500 million yen of Impairment loss is calculated; Without this Impairment loss,

Operating income is expected to turn into black (+282 million yen).

*Internal transactions are not adjusted. J-GAAP numbers are simply re-categorized into IFRS.

20

Overseas business Prospect (direct management) by area

Taiwan

Russia

TDC

Past actions and

current status Forecast for FY2015

Keeping good performances

from the very beginning.

OP margin is over 30%.

To aggressively open new stores.

Profit of approx. +400 million yen vs.

previous year is expected.

The first store is brisk, others

are running in red.

3 stores changed into FCs.

Joint management with local company is

planned. Deficit of approx. 400 million

yen to be reduced vs. previous year.

GEORGE’S

Korea

Australia

Continuing opening new stores

until 10 stores (incl. 1 FC).

Problems in profit structure.

Implement scrap & build for structure

improvement.

3 stores: Problems of high

labor cost & rent cost.

FC model to be considered for profit

improvement.

“Tokyo table” is still brisk.

Unprofitable stores to be

scraped.

Switch into new brand.

To switch into new brands: 110 million

yen in profit basis to be improved vs.

previous year.

To start "CRACKIN’ KITCHEN“

Approx. +130 million yen in profit basis

to be improved than last year.

21

Overseas business Prospect (FC/JV) by area

China (JV)

Thailand (JV)

Continue opening new stores

to 27 stores. Scrap & build for

stable profitability.

To maintain profit and aggressively

continue opening new stores.

Indonesia

(FC)

Vietnam

(FC)

Open 4 new stores last year to

currently 5 stores. Challenge

new brand (other than

“Marugame Seimen”): now

being observed/evaluated.

To continue opening new Marugame

Seimen stores and to continue

observing/evaluating new brand. FC

model to be considered into JV.

Past actions and

current status Forecast for FY2015

Continue opening new stores

to 17 stores.

Switched into the black.

Keeping good performances.

Open new stores to 16 stores.





22

Overseas business: Changes of sales, administrative expenses and operating income

Profit improve by continuing opening new stores and closing unprofitable stores

Big progress for a full-year profitability

Increase of sales

by more stores

(Unit: million yen)

Decrease of administrative

expenses by scrap of

unprofitable stores

Improvement of

operating income

(1

1) Numbers are calculated as Operating income (IFRS) - Impairment loss + Other operating income - Other operating expenses

23

3 Year Mid-Term Plan FY2015-FY2017 3 Year Mid-Term Plan

•Measures of Mid-Term

•Development of overseas business

•Financing strategy

Future business portfolio plan

24

3 Year Mid-Term Plan

1,000 store system worldwide for FY2016

To continue growth and achieve sales of 100 billion for FY2018


PlanRatio to

Revune

Ratio to

Prev.

period

PlanRatio to

Revune

Ratio to

Prev.

period

PlanRatio to

Revune

Ratio to

Prev.

period

Revenue 92,197 - 105.6% 96,004 - 104% 104,114 - 108%

Operating profit 5,255 5.7% 125.4% 6,715 7.0% 128% 7,688 7.4% 114%

Profit before tax 5,173 5.6% 143.1% 6,707 7.0% 130% 7,829 7.5% 117%

Profit for the year 2,975 3.2% 147.9% 4,294 4.5% 144% 5,168 5.0% 120%

Profit for the year attributable

to owners of the parent 2,908 3.2% 146.7% 4,200 4.4% 144.4% 5,035 4.8% 119.9%

New opening stores

(Overseas) - - -

Total number of

stores

(Overseas) - - -

FY2018FY2017FY2016

85 (60)

1,020 (157)

133 (83)

1,138 (235)

205 (135)

1,328 (365)

25

Mid-Term Strategy of domestic business and new brands

Domestic business： To build sound system for future growth

Opening stores and switching brand

To continue opening stores with stable profits

Strategic brand change and renewal

Product and marketing measures

To shift into branding promotion

To adopt new resources for developing/selling attractive products

Customer acquisition by staff sufficiency and QSC improvement

To reduce human turnover rates and to strengthen recruiting force

To revise evaluation system for improvement of both working motivation &

QSC

To localize store management for community-based stores

To accelerate opening “Clover Coffee” brand stores

To develop “Toridoll” brand stores

To develop new other brands

Existing

business

New brands

Overseas business: Mid-Term Strategy

Asia

Kenya

Russia

U.S. Mainland

TORIDOLL DINING

CORPORATION

Hawaii

GEORGE’S

CORPORATION

26

Asia/Hawaii To develop mainly “Marugame Seimen” brand

North & South

America, Europe

To develop global brands by M&A

To develop locally acceptable brands for each country/area

Kenya/others To maximize preemptive merits as a pioneer, and to make our

business model de-fact standard

Australia

Overseas business: To keep aggressive store open.

To develop locally acceptable brands for each country/area.

27

Mid-Term Strategy of M&A

■To discover next main axes for future

business portfolio not only for domestic

but for global restaurant market

■Establishment of TD investment enables

speedy investment decisions and handling

of variety of investment needs.

(e.g., minority investment and/or Pre-IPO)

■Toridoll corporation itself also to boost

large-scale projects.

To aggressively acquire new resources by M&A

for promotion of “Group Federation Management” with each business’s originality

Image of growth acceleration by M&A

To accelerate growth speed by M&A

R&D Test Business Model

Packaging

Expand Invest

Future investment policy

Long period was unavoidable from R&D to Packaging

Quick investment by M&A for short-cut into Expansion

Expand

28

Financing strategy (1)

To maintain both reliable & healthy management with aggressive investment

Equity attributable to

owners of the parent

EBITDA

1) EBITDA: Operating profit (IFRS) + Impairment loss + depreciation and/or amortization expenses

(1

（unit: Million yen）

29

Financing strategy (2)

ROE (Profit margin attributable to owners of the parent)

to be 15% or higher in the long term

30

Future Business Portfolio

Through the step of being a global company from Japan,

to be the World Leading Company in restaurant business with several growing axes

World leading company from Japan in

restaurant business market

Multi-brands in the world

Global company with growth axes

Existing

Domestic

Business

Overseas Business

New

Domestic

Business

Revenue JPY87.3 bil. JPY150.0 bil. JPY300.0 bil.

# of stores 950 stores 1,700 stores 3,300 stores

31

Mid-term prospects

World top 10 restaurant company ranking (listed company only)

To achieve 500 billion yen of group sales and

be ranked in ten years

To be ranked in ten years

（unit: Million USD）

Supplement about optional application of IFRS

32

33

Difference of accounting standard structure

Difference of accounting standard structure

Operating profit

Ordinary income

Finance income

Finance costs

J-GAAP IFRS

－ Interest income, foreign exchange profit, etc.

－ Interest expenses, foreign exchange loss, etc.

Gross profit

- Selling, general and administrative expenses

Gross profit

- Selling, general and administrative expenses

- Impairment loss

+ Other operating income

- Other operating expenses

Operating profit

+ Non-Operating income

- Non-Operatin expense

Neither ordinary income nor extraordinary loss are

applicable. All account items below Operating profit in

J-GAAP other than Finance income, Finance costs and

investing income (or loss) are calculated in Operatiing

profit.

Difference between IFRS and J-GAAP

*1 Depreciation (869) Retroactive change to linear method

Taxes and dues (344) Per capita based tax was included

Other 30

Total (1,183)

*2 Impairment loss (251)Book value increase of tangible fixed

assets

Impairment loss (goodwill) (55)Non-depreciated accounts are

calculated

Total (306)

*3 Interest income 95Deposits are included to depreciation-

applicable assets

Total 95

*4

Share of profit (loss) of

investments accounted for using

the equity method

(86)All joint-control companies are applied

with equity method



the equity method

33Goodwill on equity method is not

depreciated

Total (53)

*5 Income tax expense 345 Per capital based tax was excluded

Income tax expense 132 Correction by the tax rate change

Income tax expense 349Tax effect adjustment by change to

IFRS

Total 826

34

Difference details

Differences between IFRS and J-GAAP

（Unit: million yen）

⇒ ⇒ IFRS・・②Difference

②－①

Net Sales 87,294 Total trading transactions 87,294 87,294 0

COGS (22,309) COGS (22,309) (22,309) 0

Gross Profit 64,986 Gross Profit 64,986 64,986 0

Selling, general and

administrative expenses(57,421)

Selling, general and

administrative expenses(57,421) (58,605) (1,183) *1

Operating profit 7,564 Impairment loss (1,849) (2,155) (306) *2

Non-Operating income 277 Non-Operating income 338 324 (14)

Non-Operating expense (848) Non-Operating expense (342) (374) (32)

Ordinary income 6,994 Operating profit 5,711 4,175 (1,536)

extraordinary income 172 Finance income 111 206 95 *3

extraordinary loss (2,068) Finance costs (646) (637) 9

Net income before tax 5,098



the equity method

(77) (130) (53) *4

Corporate Tax (2,429) Profit before tax 5,098 3,614 (1,484)

Income (loss) before

minority interests2,669 Income tax expense (2,429) (1,603) 826 *5

Minority interests in income

of consolidated subsidiaries(29) Profit for the year 2,669 2,011 (658)

Net income 2,640 Owners of the parent 2,640 1,982 (658)

Non controlling interest 29 29 0

J-GAAP J-GAAP (re-categorized)・・①

Re-categorizing

35

Disclaimer

This document is provided for informational purposes only. No investment opinion or advice is provided, intended, or solicited.

Toridoll. corporation (the “Toridoll”) offers no warranty, either expressed or implied, regarding the veracity of data or

interpretations of data included in this report. Toridoll shall not be held responsible for any damage caused by the use of this

report.

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