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1 May 29, 2015
FY2015/3
Relo Group
Investor Presentation
2
Items Page◆ Financial Results & Overview
(Consolidated) 3
◆ Results & Overview by Segment 9Domestic Business 9Global Business 20
◆ Projection for FY2016/3 28◆ Appendix 31
Agenda
3
Financial Results & Overview
4
① 15 revenue growth
② 6 record profit
Overview
consecutive year of
consecutive year of
th
th
5
(Millions of yen)rounded down to the nearest million yen
FY2015/3 FY2014/3 YoYchange
FY2015/3projection
Change from
projection
Operating revenue 160,050 125,332 + 27.7% 142,000 + 12.7%
Operating profit 8,746 7,212 + 21.3% 8,250 + 6.0%
Recurring profit 9,863 8,252 + 19.5% 9,100 + 8.4%
Net income 6,085 4,819 + 26.3% 5,650 + 7.7%
EPS(yen) 413.15 329.61 + 25.3% 384.54 + 7.4%
Overview
6
FY2009/3 FY2010/3 FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3
Past Results
FY2015/3
¥9.86bil.
FY2011/3
¥5.23bil.
Recurring profit
“The First Olympic Plan”
7
FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3
ROE
FY2015/3ROE of Relo
21.2%
21.2%
Average of companies on TSE 1st section
ROE
8
FY2003/3 FY2005/3 FY2007/3 FY2009/3 FY2011/3 FY2013/3 FY2015/3
(¥ per share)
Dividend
Dividend
¥124
12th dividend increase
Payout Ratio30%
¥7.5
Consecutiveyear of
9
Results & Overview by Segment
Domestic Business
10
FY2012/3 FY2013/3 FY2014/3 FY2015/3
Operating profit Operating revenue
¥131.2 bil.
YoY change 31.6%
Operating profit
¥8,563 mil.
YoY change21.6%
Results of Domestic Business
11
Domestic Business
ResidentialProperty
Management
ResidentialProperty
Management
Corporate Housing
Management
Corporate Housing
Management
Corporate Fringe Benefit
Corporate Fringe Benefit
12
FY2012/3 FY2013/3 FY2014/3 FY2015/3
Operating revenue
¥113.7 bil.
YoY Change 29.4%
Operating profit
¥4,611 mil.
YoY Change21.2%
Operating profit
※Former “Domestic Relocation Business” Segment
Results of Corporate Housing ManagementResidential Property Management
13
FY2005/3 FY2007/3 FY2009/3 FY2011/3 FY2013/3 FY2015/3
Number of units under management
102,559units
23.4%
Corporate Housing Management
No deposit feesRelo Deposit
Insurance
Undertake every burdensome procedureSub-leasing
Strengths of Relo
+Change from
previous FY end
14
FY2009 FY2010 FY2011 FY2012 FY2013 FY2014
Number of units under management
31,027units
10.5%FY2015/3 Operating profit
About ¥1,300mil.
Residential Property Management
Residential Property Management
FY2011/3 Operating profit
About ¥400mil.
Change from previous FY end
15
Residential Property Management
Stable income from current customer baseManagement
feeContract renewal
fee
Additional income
Leasing agency Real estate brokerage
Renovation and repair
16
FY2012/3 FY2013/3 FY2014/3 FY2015/3
Operating revenue
¥17.5 bil.
YoY change 47.8%
Operating profit
¥3,952 mil.
YoY change22.1%
Operating profit
※Former “Corporate Fringe Benefit Business” Segment
Results of Corporate Fringe Benefit
17
FY2012/3 FY2013/3 FY2014/3 FY2015/3
Number of fringe benefit program members
Corporate Fringe Benefit Program
Number of members
4.67 mil.
0.3 mil.
Corporate Fringe Benefit: Statistics
New entry and increase in current client companies led the membership growth.
Change from previous FY end
18
The Second Growth Curve
New products with
lower price
Improve usability
Investment in IT system
Increase in service use
Growthin income from use
Expand the membership
base
19
FY2013/3 FY2014/3 FY2015/3 FY2016/3
(p)
Operating revenue
¥143.9 bil.
YoY Change 9.6%
Operating profit
¥9,700 mil.
YoY change 13.3%
Operating profit
Domestic Business FY2016/3 Projection
20
Results & Overview by Segment
Global Business
21
FY2012/3 FY2013/3 FY2014/3 FY2015/3
Operating revenue
¥25.7 bil.
YoY change 13.0%
Operating profit
¥1,458 mil.
YoY change 2.3%
Operating profit
※1 The revenue generated by the sales of properties was excluded from operating profit for FY2012/3
※1
Results of Global Business
22
FY2012/3 FY2013/3 FY2014/3 FY2015/3
Global Relocation Support
Number of global relocation support cases
2,924 households
6.2%
(Number of households)
Change from previous FY end
23
• Global HR function forPanasonic Group
• Know-how for launchingglobal businesses
• Wide variety of trainingmaterials
Large market share of global relocation support in Japan
Global Relocation Support
Panasonic ExcelInternational
24
Chicago
Boston
Global Destination Support
NYLA
DetroitSJ
NJServiced apartments
Housing brokerage for transferee
Number of corporate housing under management
2,158units YoY change26.1%
Multi-lingual 24-hour emergency call support
Number of housing brokerage
1,610units YoY change8.6%
25
Global Destination Support
26
Global Destination Support
Corporate Housing - Brokerage- Management
Serviced apartmentsServiced offices, etc.
MexicoMexico
27
FY2013/3 FY2014/3 FY2015/3 FY2016/3
(p)
Operating revenue
¥30.0 bil.
YoY change 16.6%
Operating profit
¥1,900 mil.
YoY change 30.3%
Operating profit
Global Business FY2016/3 Projection
28
Projection for FY2016/3
29
(Millions of yen)Rounded down to the nearest million yen
FY2015/3 FY2016/3(p) YoY change
Operating revenue 160,050 177,000 +10.6%
Operating profit 8,746 10,500 +20.1%
Recurring profit 9,863 11,300 +14.6%
Net profit 6,085 7,000 +15.0%
EPS(yen) 413.15 469.23 +13.6%Dividend per share(yen) 124 141 +17 yen
Consolidated Financial Projection for FY2016/3
30
(Millions of yen)Rounded down to the nearest million yen
O p e r a t i n gr e v e n u e O p e r a t i n g p r o f i t
FY2016/3(p) FY2015/3 YoY
changeFY2016/3
(p) FY2015/3 YoYchange
Domestic business 143,950 131,292 +9.6% 9,700 8,563 +13.3%
Global business 30,000 25,736 +16.6% 1,900 1,458 +30.3%
Other 3,050 3,021 +0.9% 400 352 +13.6%
Elimination of intra-company transactions
- - - (1,500) (1,628) -
Consolidated 177,000 160,050 +10.6% 10,500 8,746 +20.1%
Financial Projection for FY2016/3 by Segment
31
Appendix
32
FY2015/3 Consolidated BS
(Millions of yen) (Millions of yen)Assets Rounded down to nearest million yen Total liabilities and net assets Rounded down to nearest million yen
FY2015/3 FY2014/3 Change FY2015/3 FY2014/3 ChangeCurrent assets 36,419 29,227 +7,192 Current liabilities 28,740 21,828 +6,912
Cash and deposits 11,001 9,276 +1,725 Notes and accounts payable-trade 3,256 2,604 +652Notes and accounts receivable-trade 9,388 7,602 +1,786 Short-term loans payable 4,583 1,924 +2,659Short-term investment securities 223 44 +179 Current portion of long-term loans payable 1,123 1,420 ( 297)Real estate for sale 1,860 1,471 +389 Income taxes payable 1,905 1,001 +904Supplies 331 278 +53 Advances received 11,479 10,616 +863Advance payments 8,532 7,373 +1,159 Allowance for bonuses 609 379 +230Deferred tax assets 645 470 +175 Deferred tax liabilities 19 14 +5Other 4,459 2,722 +1,737 Other 5,763 3,866 +1,897Allowance for doubtful accounts (23) (11) ( 12) Noncurrent liabilities 10,424 8,233 +2,191
Noncurrent assets 34,100 27,495 +6,605 Long-term loans payable 4,623 3,127 +1,496Property, buildings and equipment 6,158 3,983 +2,175 Long-term lease deposits 5,222 4,549 +673
Buildings and structures 5,613 4,320 +1,293 Liabilities for retirement benefits 255 221 +34Accumulated depreciation (2,180) (1,888) ( 292) Allowance for loss on guarantees 66 67 ( 1)Buildings and structures, net 3,433 2,431 +1,002 Negative goodwill 3 4 ( 1)
Tools, furniture and fixtures 1,293 1,077 +216 Deferred tax liabilities 91 0 +91Accumulated depreciation (945) (815) ( 130) Other 160 262 ( 102)Tools, furniture and fixtures, net 348 262 +86 Liabilities 39,164 30,061 +9,103
Land 2,170 1,193 +977 Net assets 31,355 26,661 +4,694Other 492 383 +109 Shareholders’ equity 30,437 26,430 +4,007
Accumulated depreciation (285) (286) +1 Capital stock 2,667 2,667 +0Other, net 206 97 +109 Capital surplus 2,859 2,883 ( 24)
Intangible assets 7,063 4,673 +2,390 Retained earnings 27,108 22,515 +4,593Software 1,284 1,275 +9 Treasury stock (2,197) (1,636) ( 561)Goodwill 5,720 3,344 +2,376 Total accumulated other comprehensive income 495 91 +404Other 58 53 +5 Valuation difference on available-for-sale securities 273 103 +170
Investments and other assets 20,878 18,837 +2,041 Foreign currency translation adjustment 235 39 +196Investment securities 8,946 7,946 +1,000 Adjustment for retirement benefits (13) (51) +38Lease and guarantee deposits 9,760 8,732 +1,028 Subscription rights to shares 127 93 +34Deferred tax assets 360 452 ( 92) Non controlling interests 294 46 +248Other 2,047 1,749 +298 Total liabilities and net assets 70,520 56,723 +13,797Allowance for doubtful accounts (236) (42) ( 194)
Total assets 70,520 56,723 +13,797
33
FY2015/3 Consolidated CF(Millions of yen)
Statements of Cash Flow Rounded down to nearest million yen
FY2015/3 FY2014/3 ChangeNet cash provided by (used in) operating activities 6,576 3,923 +2,653
Income before income taxes and minority interests 9,338 7,542 +1,796Depreciation and amortization 742 667 +74Amortization of goodwill 356 226 +130Equity in (earnings) losses of affiliates (927) (785) ( 141)Decrease (increase) in notes and accounts receivable-trade (104) 1,046 ( 1,150)Increase (decrease) in notes and accounts payable-trade (740) (1,198) +458Decrease (increase) in rental deposits and guarantees (657) (1,501) +843Increase (decrease) in tenants 450 249 +201Interest and dividends income received 420 331 +88Income tax paid (2,576) (2,791) +214Other, net 274 137 +136
Net cash provided by (used in) investing activities (4,650) (912) ( 3,738)Purchase of property, plant and equipment (1,488) (844) ( 644)Proceeds from property, plant and equipment 14 415 ( 401)Purchase of intangible assets (318) (554) +235Proceeds from sales of investment securities 137 237 ( 100)Collection of loans receivable 63 0 +0Purchase of investments in subsidiaries resulting in changein scope of consolidation (2,759) (14) ( 2,745)
Other, net (299) (152) ( 147)Net cash provided by (used in) financing activities (178) (466) +288
Proceeds from long-term loans payable 4,300 3,127 +1,172Net increase (decrease) in short-term loans payable 2,271 684 +1,586Repayment of long-term loans payable (4,499) (1,976) ( 2,522)Purchase of treasury stock (873) (1,440) +567Proceeds from sales of treasury stock 143 298 ( 155)Cash dividend paid (1,500) (1,137) ( 363)Other, net (20) (23) +3
Cash and cash equivalents at the end of the period 11,041 9,160 +1,880
May 29, 2015
FY2015/3
Relo Group
Investor Presentation
2FY2011/3 FY2013/3 FY2015/3 FY2019/3
~2015/3期 ~2019/3期
Recurring Profit
Operating Revenue
The Second Olympic Plan : Target
Recurring Profit:
¥20 bil.
Operating Revenue:
¥270 bil.
The Second “Start‐Up” Stage : First 12 Years
3
(Millions of yen)Rounded down to the nearest million yen
FY2015/3 FY2019/3Target
Change from FY2015/3
Operating revenue 160,050 270,000 +68.7%
Recurring profit 9,863 20,000 +102.8%
EPS(yen) 413.15 800.00 +93.6%Dividend per share(yen) 124 240 +116
19th consecutive year of revenue growth 10th consecutive year of record profit16th consecutive year of dividend hike
The Second Olympic Plan : Target
4
OurMission
◆Support non-core operation of Japanese companies
◆Support global expansion of Japanese companies
The Second “Start-Up” Stage
◆Cornerstone for the paradigm shift of the Japanese economy
World-Class Relocation Company
5
・Corporate Housing Management
・Relocation House Rental Management
・Corporate Fringe Benefit
Achieved renewed growth by visualizing procedures
Achieved the target of 100 thousand units undermanagement
Drove profits with “the second growth curve”
Results of the First Olympic Plan
・Global Relocation SupportSuccessfully launched the business
6
・Contents of Corporate Fringe Benefit
・Residential Property Management
・Global Destination Support
Profit tripled at TOHTO, one of the mainsubsidiaries
Smoothly launched new businesses, such as the hotel business
Profit quadrupled at Relo Redac
Results of the First Olympic Plan
Favorable for our core business fields7
Transition of Market Environment
Decrease in population
Weaker domestic demands
Toughercompetition with
global companies
Inefficient business systems will have to be abandoned
Increase in the outsourcing of fringe benefits
Accelerate the demerging of non-core businesses
8
Transition of Market Environment
Increased debt in national treasury
Fiscal deterioration
Paradigm shift in the Japanese
economy
Globalization of companies
Domestic relocation
Inbound from outside of
Japan
Need to attract people/goods/capital from all over the world
Decrease inPopulation
Weaker DomesticDemands
Harder Competition with Global Companies
Decrease in population
Weaker domestic demands
Tougher competition with
global companies
9
100 Units ⇒ 200 Units
Corporate Housing Management: Target
Number of units under management
FY2019/3
60 thousand
FY2019/3Target
200thousand
Number of units under management
FY2015/3
100 thousand
thousand thousand
FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3 FY2019/3
10
Corporate Housing Management
Our Strength:Sub-Leasing
Companies• Contract
management• Temporary
advance ofdeposit
• Clearingsettlements, etc.
Landlords
• Minimize the workload of client companies• High entry barrier because a certain amount of
capital is required11
Corporate Housing Management
Price &
Service Variety
High-end
Middle priced
Entry
Acquire customers in large company market with middle priced services
During the First Olympic Plan (FY2012/3-2015/3)
Add new services, such as mid-range services, in addition to the original
high-end services.
12
Corporate Housing Management: Market
Cooperate with our
corporate fringe benefit business to
cultivate new market
Acquire new customers
in large company
market with middle priced
service
Corporate Housing Managementabout 1 million units
Already Outsourced
Not Outsourced
Yet
13
Promote middle Range
priced service
Improve usability
Invest in IT System
Increase use of
“Relo Net”
Boostrevenues
from “ReloNet”
Raise the number of units under
management
“The Second Growth Curve“to be expanded
14
FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3 FY2019/3 FY2023/3
Corporate Housing Management: Target
200,000 units under management andNo.1 in the Market
Number of units under management
FY2023/3Target
400thousand
The Second Olympic Plan target
FY2015/3100
thousand
FY2019/3200
thousand
15
FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3
Number of units under Management by TOHTO
The number of units under Management
Compared to FY2011/3:
About1.5 times
FY2011/3About 400mil.
FY2015/3About 1,300mil.
TOHTO
Residential Property Management
Operating profit
Operating profit
16
• Utilize the needs of companies for leased corporatehousing
• Know-how for improving occupancy rate acquiredthrough successful practices
◆ Growth Factors of TOHTO
Residential Property Management
Expand our “TOHTO Model” nationwide to seven blocks, and reach
100,000 units under management
• Offer renovation/repair through an installment plansupported by a sufficient amount of capital
17
Residential Property Management: Market
• Scattered into smaller service providers
Residential property management companies
Less than 500 units under management
M&A Investment ¥40bil.
“Seven Block Expansion Nationwide”
• Business succession issues due toaging owners
18
Leased Corporate Housing
Residential Property Management
Special economic zones
for local revitalization
Corporate relocation/Inbound
Transfer of people
Seven block expansion nationwide ofresidential property management
Seven block expansion nationwide ofresidential property management
Provide comprehensive support related to the transfer of people
19
FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3 FY2019/3 FY2023/3
Residential Property Management: Target
“Seven Block Expansion Nationwide” and100,000 units under management
Number of units under management
The Second Olympic Plan target
FY2015/330
thousand
FY2019/3100
thousand
FY2023/3Target
300thousand
20FY2001/3 FY2003/3 FY2005/3 FY2007/3 FY2009/3 FY2011/3 FY2013/3 FY2015/3
Corporate Fringe Benefit
Operating profit
“The Second Growth Curve”
The First Olympic PlanAverage annual growth rate
16.6%
21
Transition of Market Environment
Improve economicenvironment
Decrease in working Population
The demands for outsourcing corporate fringe benefits are expected to remain stable
Increased inquiries from small and midsize
enterprises
Stronger need to convert part-time Workers to full-
time workers
22
Corporate Fringe Benefit
Small and Midsize Enterprises Large Companies
• Reinforce promotion at local branches• Expand the variety of local contents
menus
• New products for large companies• Offer menu for reducing expenses for
mandatory employee fringe benefitprogram
The leading provider of support forhealthcare insurance societies
Use IT system to offer “healthmanagement service”
23
Our core businesses
Attract more customers to core business fields
Reduce expenses through saving on
insurance premiums, etc.
Monetize company owned recreation
facilities for employees
Cooperation with Related Businesses
24
FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3
Number of global relocation support cases
Global Relocation Support
FY2011/31,529households
FY2015/32,924households
FY2015/3About 400 mil.
Global relocation support and
Global destination service
Operating profit
(Number of households)
25
Lay the foundation for our global expansion
Panasonic Excel International
• Expand the service menu Utilize the reputation and know-how of Relo Panasonic Excel
Language lessons
Orientation before transfer
26
Lay the foundation for our global expansion
Utilize the reputation and know-how of ReloPanasonic Excel
Target of the Second Olympic PlanNumber of households supported :
FY2019/3 10,000 households
Strengthen the Inbound Relocation Business
Panasonic Excel International
27
North America
Global Destination Service
FY2011/3About 40 mil.
FY2015/3About 180 mil.
RELO REDAC, INC.
Operating profit
Operating profit
28
Global Destination Service
・ Send customers from JapanCooperate with Japan
・ Develop serviced apartments business on the West Coast
・ Utilize “JAN”, the 24hour-multi lingual interpretation service
・ Build up the number of units under management of overseas corporate housing of Japanese companies
North America
◆ Growth Factors
29
Global Destination Service
Take advantage of global destination services from
Relo Panasonic Excel
Global Expansion of “Relo Redac Model”
30
0
2,000
4,000
6,000
8,000
10,000
Share Price
Share Price of Relo Feburuary 23, 2015Highest price since IPO
The First Olympic Plan
31
The Third Olympic Plan
Explore the way to become a world-class relocation company
The Second Olympic PlanEstablish
No.1 Position in core businesses
The Second “Start-UP” Stage
32
Contact
Planning and IR Group, Relo Holdings, Inc.
TEL: +81-3-5312-8704E-Mail: [email protected]
URL : http://www.relo.jp/
The information in this document is provided for informational purposes and should not be construed as a solicitation of an investment in our securities.This document was made based on currently available information as of May, 2015, and contains forward-looking statements that reflect Relo' s plans and expectations at that time. Relo shall bear no responsibility or liability for the accuracy of the information, or any actions arising from the use of the information in this document.In addition, the content of this document is subject to change without any notice.