(en)【開示用 表紙なし】32期4qプレゼン資料 190524(mvno, in-house internet service...
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Financial Resultsfor the fiscal year ended March 2019
May 17, 2019
©2019 HIKARI SUSHIN,INC. All Rights Reserved
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
FY2017 FY2018 FY2019
YoY [Reference]FY2019Forecast
Announced on February 13,
2019
Notes%
Change
Net Sales 428.9 427.5 484.3 +13% 450.0 -
Operating Profit 41.5 51.0 64.2 +25% 59.0
Increase in Recurring Profit, Productivity Gains, etc.
Net Income Attributable to Shareholders
39.0 42.9 49.5 +15% 40.0
Increase in Financial Revenue and a decrease in Investment Returns from Affiliate Companies Accounted by Equity Method.
1
Consolidated ResultsIncrease in Net Sales by 13%, record high results
(Billions JPY)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Net Sales and Operating ProfitIncrease in Sales and Profits in the Corporate Segment
2
FY2017 FY2018 FY2019 % Change
Corporate 269.5 306.0 369.2 +20%
SHOP 131.9 94.5 87.3 (7%)
Insurance 29.4 28.6 29.4 +2%
Total(Including company wide expenses)
428.9 427.5 484.3 +13%
FY2017 FY2018 FY2019 % Change
Corporate 26.6 34.2 50.6 +48%
SHOP 14.1 13.1 10.5 (19%)
Insurance 5.5 5.6 5.2 (7%)
Total(Including company wide expenses)
41.5 51.0 64.2 +25%
Net Sales Operating Profit(Billions JPY)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Recurring Profit Increase in Profits mainly in the Corporate Segment
3
(Billions JPY)
FY2017 FY2018 FY2019%
Change
Corporate 50.3 60.0 73.5 +22%
SHOP 18.2 15.2 12.2 (19%)
Insurance 5.4 5.9 6.3 +5%
Total(Including company wide expenses)
74.1 81.1 92.0 +13%
74.181.1
92.0
FY2017 FY2018 FY2019
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Recurring Profit In-house Products led growth
60.4
68.674.1
81.1
92.0
15/3 16/3 17/3 18/3 19/3
■ External Products
■ In-house Products
⇒ External Products
(5)% CAGR
⇒ In-house Products
+26% CAGR
4
(Billions JPY)
(Compound Average Growth Rate)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
(32.5) (30.1)(27.8)
FY2017 FY2018 FY2019
5
Acquisition CostOperating profits grew due to increased productivity and cost reduction, etc.
■ In-House Products ■ Other
988
1,169 1,148
FY2017 FY2018 FY2019
Sales Units of In-House Products(Billions JPY) (Thousand Units)
We had a decrease in low profitability products, Whilst a increase in high profitability products
©2019 HIKARI TSUSHIN,INC. All Rights Reserved6
FY2017 FY2018 FY2019 Notes
Operating Profit 41.5 51.0 64.2 -
Financial Income and Financial Expense 8.1 (7.5) 1.1 Increase in dividend income
Share of profit ofInvestments accounted for using the equity method
4.9 1.6 2.3 -
Others 7.6 8.6 3.8Decrease in profits from re-calculation of Equity Method Application
Net Income Pre-tax 62.7 53.7 71.5 -
Corporate incometax expenses (21.3) (8.0) (18.6) -
Non-controllinginterests (2.3) (2.7) (3.3) -
Net Income 39.0 42.9 49.5 -
(Billions JPY)
Non-Operating Profit
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
FY2017 FY2018 FY2019 Notes
Cash Flow fromOperating Activities +17.1 +27.8 +63.2 Decrease in trade liability
and other liabilities
Cash Flow fromInvesting Activities (9.0) (44.9) (89.0)
Acquisition of Tangible and Non-Tangible Fixed Assets.Acquisition of Investment Securities
Free Cash Flow +8.0 (17.1) (25.7) -
Cash Flow fromFinancial Activities +56.5 +86.2 +21.2 Increase in Interest
Bearing Debt
7
(Billions JPY)
Consolidated Cash Flow
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
5062
77 74 8094
117 115124
139
111
139
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2017 FY2018 FY2019
Net Cash Assets(Cash + Listed Securities) – Interest Bearing Liabilities
8
(Billions JPY)
(Not including listed subsidiaries)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Business Divisions
9
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Business Divisions
From the collection of Natural Water to the sales of Water Coolers
Sales of MVNO business, Sales of optical fiber line, etc.
Sales of photocopy machines, etc. Sales of contents, IT Solutions, Electricity, etc.
Sales of mobile phones, etc.
Sales of insurance products etc.
Insurance
SHOP SHOP Corporate
New Business
OfficeEquipment
Communication
Water
Inner Ring: SegmentsOuter Ring: Business Divisions
10
Insurance
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Communication Business(MVNO, In-House Internet Service etc.)
11
2) Net Sales(Billions JPY)
3) Operating Profit (Billions JPY)
74.6
92.999.7
FY2017 FY2018 FY2019
1) Figure
14.3
17.9
26.6
FY2017 FY2018 FY2019
Description: Sales of optical fiber line etc.Main Products: Mobile Wi-Fi Router, SIM card, etc.Classification: In-House Products, External Products
Carrier User
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
20.4
23.1
28.0
FY2017 FY2018 FY2019
12
4) Recurring Profit(Billions JPY)
The numbers acquired of MVNO fell compared to the last fiscal year. However, due to the increase in the total number of users, which leads to stable long-term earnings, there was a increase in profits.
478
579
505
FY2017 FY2018 FY2019
5) Sales Units(Thousand Units)
※In-house Products
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Water Business
13
21.9
27.7
37.7
FY2017 FY2018 FY2019
(0.3)
(1.0)
0.8
FY2017 FY2018 FY2019
2) Net Sales(Billions JPY)
3) Operating Profit (Billions JPY)
Description: From product development to Sales of Water Coolers etc.Main Products: Water CoolerClassification: In-House Products
1) FigureProduct development, manufacturing, quality control, sales, and after-sales services
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
4) Sales Units (Thousand Units)
※Water Coolers
14
212
291 287
FY2017 FY2018 FY2019
5) Cumulative Subscribers
(Thousand Units)※Water Coolers
472
650
810
FY2017 FY2018 FY2019
Increase in sales and profits as a result of a steady increase in both the number of subscribers and profits per contract.
1st in Market
1st inMarket
©2019 HIKARI TSUSHIN,INC. All Rights Reserved15
Description: IT Solutions, etc.Main Products: Contents, IT Solutions, Electricity, etc.Classification: In-House Products, Retail ProductsNew Business
ElectricityContents Industry-Specific IT Solutions
1) Figure
Electricity Retailer Division
Electricity ServiceSupply of Electricity
CustomerPower Generation
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Continue to maintain stable revenue and earnings
52.1
83.2
139.1
FY2017 FY2018 FY2019
(2.4)
2.3
8.2
2) Net Sales(Billions JPY)
3) Operating Profit(Billions JPY)
10.5
16.3
23.6
FY2017 FY2018 FY2019
4) Recurring Profit(Billions JPY)
FY2017 FY2018 FY2019
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Office Equipment Business
17
15.1 15.0 14.9
FY2017 FY2018 FY2019
2) Net Sales(Billions JPY)
3) Operating Profit(Billions JPY)
Description: Sales of Office Automation EquipmentMain Products: Photocopy Machine, Mobile Phone, LED Light etc.Classification: External Products
1) Figure
120.7
102.1
92.5
FY2017 FY2018 FY2019
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
13.312.6
11.1
FY2017 FY2018 FY2019
18
4) Recurring Profit(Billions JPY)
Recurring Profits have declined sharply.However, Operating Profit grew due to Cost Reduction and Increased Sales Productivity.
©2019 HIKARI TSUSHIN,INC. All Rights Reserved19
SHOP Business
131.9
94.587.3
FY2017 FY2018 FY2019
14.113.1
10.5
FY2017 FY2018 FY2019
2) Net Sales(Billions JPY)
3) Operating Profit (Billions JPY)
Outline : Sales of Mobile Phones through telecom shopsProducts : Mobile Phone, MVNO etc.Model : External Products
1) Figure
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2,006 1,954
1,758
FY2017 FY2018 FY2019
5) Total Stores(Number of Stores)
20
18.2
15.2
12.2
FY2017 FY2018 FY2019
Profits decreased as the mobile communication market has matured. We have been focusing on increasing productivity and improving customer service at the telecom shops.
4) Recurring Profit(Billions JPY)
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29.4 28.6 29.4
FY2017 FY2018 FY2019
5.5 5.65.2
FY2017 FY2018 FY2019
Insurance Business
1) Figure 2) Net Sales(Billions JPY)
3)Operating Profit (Billions JPY)
Description: Insurance products distribution through shopsMain Products: Life, medical, property insurance, etc. Classification: Retail Products
©2019 HIKARI TSUSHIN,INC. All Rights Reserved22
5.45.9
6.3
FY2017 FY2018 FY2019
266 285 278
FY2017 FY2018 FY2019
Increase in revenue due to expansion of call centers and strengthened collaboration among different sales networks, which consist of shops, online, and door-to-door.
4) Recurring Profit(Billions JPY)
5) Directly Managed Stores(Number of Stores)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved23
Forecast for FY2020
©2019 HIKARI TSUSHIN,INC. All Rights Reserved24
Appointment Change of President and Chief Operating Officer
Name Current position New position
Takeshi Tamamura President and Chief Operating Officer
Vice Chairperson and Head of IT Solutions Business Division
Hideaki Wada Executive Vice President President and Chief Operating Officer
The following executive appointments have been appointed as a management structure to further promote the realization of sustainable growth of the Group business and to further improve our corporate value. (Planned appointment date: June 21, 2019)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved25
Stock Options and Treasury Stock
Performance Based
Condition Paid Stock
Option
Main Performance Conditions
Treasury Stock
Purchase through the
MarketRetirement
FY2018 0.08%Operating income, 5 years, 10%
Annual Growth41.5 Billions JPY (FY2017)→ 66.9 Billions JPY (FY2022)
0.42% -
FY2019 0.23%Operating income, 5 years, 8% Annual
Growth55.0 Billions JPY(FY2019E)→ 74.8 Billions JPY(FY2023)
0.64% 2.51%
FY2020 0.50%Operating income, 5 years, 10%
Annual Growth70.0 Billions JPY(FY2020E)→ 102.5 Billions JPY(FY2024)
Not implemented as of May 17, 2019
Total 0.81% - 1.06% 2.51%
On May 2019, we resolved to issue Performance Based Conditional Paid Stock Options. We also took into consideration the decline in the shareholder value per share, so we retired and repurchased our own shares.
©2019 HIKARI TSUSHIN,INC. All Rights Reserved26
Recurring Profit
68.674.1
81.1
92.0
104.5
FY2016 FY2017 FY2018 FY2019 FY2020(E)
Over 100.0 Billions JPY
(Billions JPY)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved27
FY2019
FY2020(E)
Forecast % Change
Net Sales 484.3 530.0 +109%
OperatingProfit 64.2 70.0 +108%
Net ProfitAttributable to Shareholders
49.5 46.0 92%
Forecast of Consolidated Results (Billions JPY)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
FY2018 FY2019 FY2020(E)
Return on Equity ※1 21.2% 20.5% 17.9%
Return on Assets ※2 8.5% 8.6% 8.7%
Operating Profit Margin 11.9% 13.3% 13.2%
Earnings per Share (JPY) 927 1,075 1,002
28
Capital Efficiency
※1 The capital and total assets of FY 2020 are not the average forecast for the period, but are actual results at the end of FY 2019.※2 Operating Profit ÷ Total Assets
©2019 HIKARI TSUSHIN,INC. All Rights Reserved29
40 45 51 69 81 9340 45
6075
8793
4045
60
75
9093
4051
69
81
9393
160186
240
300
351372
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020(E)
Q1
Q2
Q3
Q4
Quarterly increase of ¥3 from the
expected ¥90
Steady Increase in Dividends(JPY)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
5.2
10.2 12.6
28.5
8.6 11.1
14.3 16.3
21.5
16.9
30
(Billions JPY)
Returns over 10 years
52%
StockRepurchase
DividendPaid
Return to Shareholders
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020(E) Total
Dividend Paid 3.2 4.7 5.1 6.6 7.3 8.1 10.0 13.3 15.5 16.9 91.1
Stock Repurchase 2.0 5.6 7.6 22.0 1.3 3.0 4.3 3.0 6.0 - 54.9
Return Ratio - 132% 75% 98% 42% 44% 36% 38% 43% 36% 52%
©2019 HIKARI TSUSHIN,INC. All Rights Reserved31
Company Overview
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Overview of the Business
32
Sales network
Agencies approx. 1,000Sales staff(Incl.agencies)
approx. 30,000
Locations approx. 90Call Centers 22
Mobile Phone Stores
1,758Insurancestores 320
Customers(Corporates) 1.0M Customers
(Individuals) 1.4M
Needs
- Expand market share- Acquire sales staff
Solutions
Provide sales and marketing capabilities
SMEs
Individual Customers
Needs
- Optimize business efficiency
- Select the best plan
Solutions
Provide products and services
Agency contractWholesale contract Sales
Cons.Subsidiaries 175
Equity-Method Affiliates
137
Telecom Carriers
Manufacturers
Insurance Companies
Planning and development of in-house productsCarriers Customers
©2019 HIKARI TSUSHIN,INC. All Rights Reserved33
Business Division Product/Service Image Classification Target Main Sales
Network
Corporate
CommunicationLine
Mobile Wi-Fi Router
In-house Products
SMEIndividual
WebTMSFixed-Line
InternetIn-house ProductsThird-party Products
Water Water Cooler In-house ProductsSME
IndividualBoothTMS
New Business
IT Solutions
In-house Products SMEDoor-to-door sales
TMSContents
Electricity
Office Equipment
Mobile Phone (Corporate)
Third-party ProductsSME
IndividualDoor-to-door sales
OA Equipment
SHOP SHOP
Mobile Phone (Shop)
Third-party Products
Individual ShopMobile Wi-Fi
RouterIn-house ProductsThird-party Products
Insurance Insurance Insurance Third-party Products Individual ShopTMS
Segments
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Expansion of In-House Product Line
34
※Excluding Test Periods
2010 2015 2017
Electricity
2018~
SIM
Water Coolers
Water Coolers
Water Coolers
SIM
Internet Service
Internet Service
Internet Service
ContentsContentsContentsContents
IT Solutions
IT Solutions
IT Solutions
IT Solutions
IT Solutions
Mobile Wi-Fi
Routers
Mobile Wi-Fi
Routers
Mobile Wi-Fi
Routers
Mobile Wi-Fi
Routers
Mobile Wi-Fi
Routers
Mobile Wi-Fi
Routers
Mobile Wi-Fi
Routers
Mobile Wi-Fi
Routers
ISPISPISPISPISPISPISPISPISP
2016
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Conceptual Diagram Of Our Typical Recurring Income Earnings Model
IN ・ ・ ・
Recurring Profit
OUT
CancellationContract (Sales)
Month 1 Month 2 Month 3 Month 4 Month 5
Period of use
・ ・ ・
(Time)
(Time)
- Personnel expense
- Agency commission
- Rent and other store costs
35
©2019 HIKARI TSUSHIN,INC. All Rights Reserved36
・・・
・・・
・・・
・・・
Business Models
① In-house ProductsMobile Wi-Fi router, Water Cooler, Electricity…
② Third-party productsFTTH, Office equipment, LED lighting, Mobile phone, Insurance…
E/UHikari
Tsushin Carrier
Usage FeeCost ofService
time0 month
1st
month2nd
month
Lump-sum Profit Recurring Profit
Small or None Large
E/UHikari
Tsushin Carrier
CommissionCommodityFee
MerchandiseCost
0 month
1st
month2nd
monthtime
Lump-sum Profit Recurring Profit
Substantially Large / Large
Extremely Small / Small
Usage Fee
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Recurring Profits
0
Acquisition StopStability in Acquisition
Time
Profit&
Loss
Decrease in Profits as per
the cancellation rate.
Various Products
37
Operating Profit Model for In-House Products
AcquisitionCost
Electricity
Decrease in Acquisition
Increase in Acquisition
Increase Acquisition Cost As per the efficiency, improvements in acquisition cost price
Decrease in Acquisition Cost, Increase in Profit
OperatingIncome
EPARKWater
ServerSIM
Hikari
CollaborationContents
Mobile
Wi-Fi
Router
ISPMobile
Phone
Reselling
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Recurring Profit and Acquisition Cost
38
VolumeRecurring Lump-sum
Net Sales 484.3
Data usage revenue from subscribers, commission from service providers, and insurance companies.
267.1Upfront commission,Sales of hardware, etc.
217.2
Cost of Goods Sold +Selling, General and Administrative Expenses
(420.1)
Cost of the service provided, Cost of customer retention such as billing, etc.
(175.0)
Lump sum cost, personnel expenses, sales commission for distributors, etc.
(245.0)
Operating Profit 64.2 Recurring
Profit 92.0 Acquisition Cost (27.8)
(Billions JPY)
©2019 HIKARI TSUSHIN,INC. All Rights Reserved39
FY2016 FY2017 FY2018 FY2019
J-GAAP IFRS IFRS IFRS IFRS
Net Sales 574.5 447.6 428.9 427.5 484.3
Operating Profit 37.4 37.6 41.5 51.0 64.2
Ordinary Income 38.3 - - - -
Net Income Pre-tax 51.1 47.9 62.7 53.7 71.5
Net IncomeAttributable to Shareholders
25.0 22.5 39.0 42.9 49.5
Earnings Per Share (JPY) 538 485 840 927 1,075
Operating Profit Margin 6.5% 8.4% 9.7% 11.9% 13.3%
Consolidated Statements of Profit or Loss (Billions JPY)
※The results of FY2018 is after incorporating IFRS 15.
©2019 HIKARI TSUSHIN,INC. All Rights Reserved40
Consolidated Statement of Financial Position
FY2018 FY2019
Cash and Cash Equivalents 185.8 186.3
Accounts Receivables and Other Receivables 166.1 178.1
Total Current Assets 374.5 388.2
Investments Accounted for using Equity Method 50.1 65.7
Other Financial Assets 173.8 244.7
Total Non-Current Assets 311.1 415.9
Total Assets 685.6 804.2
FY2018 FY2019
Own Capital 225.2 257.2
Capital Adequacy Ratio 32.9% 32.0%
40
FY2018 FY2019
Accounts Payables and Other Payables 124.4 153.5
Short-term Interest-bearing Debt 36.7 59.9
Total Current Liabilities 175.9 228.2
Long-term Interest-bearing Debt 233.2 260.1
Total Non-Current Liabilities 268.1 302.4
Total Liabilities 444.1 530.6
Total Hikari Tsushin’s Shareholder’s Equity 179.3 257.4
Accumulated other comprehensive income 45.9 (0.1)
Total Equity 241.5 273.5
Total Liabilities and Equity 685.6 804.2
(Billions JPY)
※The results of FY2018 is after incorporating IFRS 15.
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
Strengths
1) Corporate Philosophy 2) Sales Channels
3) Recurring Profit Business Model 4) Our Customers
Stable income each month, enables us to invest in expanding our business.
We are rapidly expanding our market share by strengthening our network of sales agencies.
Our diversified costumer base allows us to increase our profits by virtue of extensive cross selling.
ExpandMarket Share
MoreCommission
IncreaseAgencies
RecurringProfit
OperatingIncome
AcquisitionCost
92.027.8
64.2
Corporate1,000,000
41
Our unique corporate philosophy and work culture have enhanced our earnings since our establishment.
LowCost
MeritSystem
CustomerData Base
Flexibility
Individual1,420,000
(March, 2019)
(Billions JPY)
※After incorporating IFRS 15
©2019 HIKARI TSUSHIN,INC. All Rights Reserved
4) Bottle Cap Collection for vaccine donations
We collect and donate plastic bottle caps toJapan Committee Vaccines (NPO), whichprovides vaccines for children around theworld. More than 4 million Bottle caps weredonated by March 2019, resulting inprovision of 4,256 vaccines.
We were recently acknowledged by the JapaneseLabor Bureau as a business focused onpromoting the next generation of workers. Wereceived the “Kurumin” certification mark, andwe continue to work and take pride in ouryounger generation of employees.
Hikari Tsushin’s CSR
42
42
5) Used Stamp Donation
6) Toshima ward Cleaning Drive
Improving our Work Environment
3) Acquisition of “Kurumin” Certificate
2) Compliance with the Toshima Ikuboss Declaration
The Ikuboss Declaration is intended to alterJapan’s work culture to encourage and fosterindividual happiness along with work productivity.We are proud supporters of this movement.
※ The Toshima Ikuboss Declaration (commonlyknown as “The Ikuboss Declaration”) wascreated in September, 2016 by a team ofbusiness leaders, politicians, and academics.
1) Promoting Diversity
In line with our rapidly diversifying businesssociety, we are committed to promotingdiversity within the Hikari Tsushin Group. Weare also active in our support of childcare andreinstatement.
Corporate Social Responsibility
We have been donating used stamps toToshima Ward Residents Council of SocialWelfare. Collected stamps are convertedinto cash for donation. A total of 7,963grams of stamps were donated by March2019.
We have declared the 9th of every monthas “Clean Day”, when we conduct acleaning drive around Ikebukuro Station.In FY 2016 we were awarded the “Letter ofAppreciation” from the Toshima WardOffice, commending us as an organizationthat promotes Environmental Activities.
©2019 HIKARI TSUSHIN,INC. All Rights Reserved43
DisclaimerThis material contains “forward-looking” information,including the company’s plans, strategies, forecasts,and beliefs. Hikari Tsushin cautions readers that saidforward-looking statements are based on HikariTsushin’s current expectations, which have beenderived from information that is currently available andinvolve a number of risks and uncertainties. Actualresults may differ significantly from the informationshown here.
Disclaimer Regarding Insider Trading
In accordance with Article 166 of the FinancialInstruments and Exchange Act (FIEA), No CorporateInsider of a Listed Company, etc. who has obtained,under the specified circumstances, knowledge ofnonpublic Material Facts shall Trade SpecifiedSecurities, etc. of the Listed Company, etc., until andunless such Material Facts have been made Public.