FY2020/3 2Q Relo Group Investor Presentation · Relocation Support Business 6,900 1,400 + 21.0%...
Transcript of FY2020/3 2Q Relo Group Investor Presentation · Relocation Support Business 6,900 1,400 + 21.0%...
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2012
Overview
SalesGrowth
consecutive year of th
consecutive year of th
Record-breaking First-half Profit
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Continuous decline of working population in Japan
Strong demand for corporate fringe benefits
Sustainable Growth in both
Sales and Profits
6,648 6,404
6,149 5,880
5,587 5,268
4,942 4,640
4,382 4,157
3,946
2016 20 25 30 35 40 45 50 55 60 65
Business EnvironmentForecast of trends in the working population
(Source) Mizuho Research Institute Ltd. Report
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FY2020/3 2Q FY2019/3 2Q YoYChange
Sales 148,568 122,642 + 21.1%
Operating profit 8,878 8,687 + 2.2%Profit before income taxes 10,167 9,320 + 9.1%
Net income 6,312 6,225 + 1.4%
EPS (Yen) 42.09 41.75 + 0.8%
Covered BGRS acquisition cost incurred in the first quarter
Consolidated Results(Millions of yen)
Rounded down to the nearest million yen
411/3期 12/3期 13/3期 14/3期 15/3期 16/3期 17/3期 18/3期 19/3期 20/3期 21/3期 22/3期 23/3期
The First Olympic Plan The Second Olympic Plan The Third Olympic Plan
Recurring profit5.2 bn
Recurring profit9.8 bn
Recurringprofit
20.1 bn
Profit before income taxes
35.5 bn
Start of the Third Olympic Plan2 Integrate large-scale companies
overseas into Relo Group
Trends in Consolidated Results
FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2016/3 FY2017/3 FY2018/3 FY2021/3FY2019/3 FY2020/3FY2015/3 FY2022/3 FY2023/3
2 Systematize each business
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
Sales
¥107.5 bnYoY Change +11.5%
Domestic Relocation BusinessSales
Operating Profit
Operating Profit
¥3.7 bnYoY Change +1.0%
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Corporate Housing Management
Residential Property Management
Vacant House Property Management down year on year due to many properties still being under revival
Costs borne for new Corporate Housing Management system
Reactionary decrease after huge real estate sale in FY2019/3
Domestic Relocation Business
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Corporate Housing Management
Residential Property Management
Good progress in building up stock and expanding the size of the business
Domestic Relocation Business
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
181,995 units
YoY Change+12.5%
Corporate Housing Management based on a sub-leasing system
Rental corporate housing with furniture “R+”
Forms a business foundation with
high level of stock
Corporate Housing Management
Units under management
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
66,169units
YoY Change+8.6%
Residential Property Management
Units under management Growth of existinggroup companies
Profit Base Expands
7 block extension throughout Japan
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Anticipating units under management to exceed 90,000
M&A Status
FY2020/3 Acquire three big companies that aremanaging several thousand residential units
FY2019/3
Residential Property Management
HOT HOUSE Co., Ltd.
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Domestic Relocation Business
TokyoHanazawa
April 2019
Promote improvement of operational efficiency and governance
TokyoMyrealty
October 2019
OsakaRecrea
OsakaKENT
TokyoTokyo
Mildcity
TokyoTOHTO
TokyoTOHTO
Merge Merge
Relocation Japan
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Sales Operating profit YoYChange
国内リロ事業 226,000 10,400Corporate Fringe Benefits 20,500 8,000 + 20.7%Relocation Support Business 6,900 1,400 + 21.0%
Global Business 17,000 900 + 1.3%
Tourism Business 9,000 2,400 - 20.8%
Domestic Relocation BusinessFY2020/3 Plan
Domestic Relocation Business 226,000 10,400 + 19.6%
Complete closings and expand stock before large-scale M&A projects enter busy season
FY2020/3 Plan
(Millions of yen)Rounded down to the nearest million yen
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
Sales
¥10.4 bnYoY Change +19.1%
Corporate Fringe BenefitsSales
Operating Profit
Operating Profit
¥3.4 bnYoY Change +22.4%
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
Strong new acquisitions
10,000co.exceeds
No. of contracted companies
FY2019/3 Industry first
Corporate Fringe Benefits
Fringe benefit members
7.09 million peopleYoY change
+0.68million people
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Corporate Fringe Benefits
Sapporo Office
Fukuri Kousei Club Chubu Co., Ltd.[Nagoya]
Fukuri Kousei Club Chugoku Co., Ltd.[Okayama]
The first office in the industryKumamoto Office open
Tohoku Office
Relo ClubHeadquarters
Expanding membership bases for both large companies and SMEs
Fukuri Kousei ClubChugoku Co., Ltd.[Matsue]
The first office in the industryUtsunomiya Office open
Fukuri Kousei Club Chugoku Co., Ltd.[Hiroshima]
Fukuri kosei Club Kyushu Co., Ltd.[Okinawa]
Fukuri kosei Club Kyushu Co., Ltd.[Fukuoka]
Osaka Branch
Actively developing new business nationwide
Niigata Office
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Fringe benefit members at large companies grew 20% year on year
Hokkaido Area
Tohoku Area
Tokyo Metropolitan AreaChubu Area
Niigata AreaChugoku Area
Kansai AreaKyushu Area
Okinawa AreaShikoku Area
Published the industry’s first Shikoku-focused members’ magazine
Corporate Fringe Benefits
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FY2016/9 FY2017/9 FY2018/9 FY2019/9 FY2016/9 FY2017/9 FY2018/9 FY2019/9
Corporate Fringe Benefits
0.61million people
YoY Change +50.0%
2.64 million people
YoY Change +21.6%
Usage-related indicators show strong performance. Contributing to expand foundation going forward.
Number of App DLE-magazine subscribers
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Corporate Fringe Benefits
+32.2% YoY growth in commission revenue
Accommodation GourmetOverriding commission Commission for transportation
of customers
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Insurance seminar for membersSupport for future life design
Added 3,000 customers in the first half. Profit doubled year on year.
Corporate Fringe Benefits
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Sales Operating profit YoYChange
Domestic Relocation Business 226,000 10,400 + 19.6%
福利厚生事業 20,500 8,000 +20.7%Relocation Support Business 6,900 1,400 + 21.0%
Global Business 17,000 900 + 1.3%
Tourism Business 9,000 2,400 - 20.8%
Corporate Fringe BenefitsFY2020/3 Plan
Corporate Fringe Benefits 20,500 8,000 + 20.7%
Fringe benefit members and other stock growing according to plan
FY2020/3 Plan
(Millions of yen)Rounded down to the nearest million yen
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
Sales
¥3.0 bnYoY Change +1.1%
Relocation Support BusinessSales
Operating Profit
Operating Profit
¥0.6 bnYoY Change +12.3%
Changed Accounting Standards
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Relocation Support Business
Overseas Relocation Support
HR Staff Assignee
• Work visa• Physical exam• Immunization• Moving• Local housing• Flight
• Expat insurance• Language
schooling• Business training• Expense
reimbursement
Business Travel Management
HR StaffBusiness Traveler
Providesarrangements
Requestsarrangements
Confirm arrangements,
provide information on traveler and destination, and analyze costs
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Relocation Support Business
Profit for the second quarter up 23.1%, accelerating growth
Relatively no change due to major customer’s delay in completing employee relocation
Number of Global Relocation Support: YoY Change +10.4%
■ First quarter
■ Second quarter
Growth in profit related to relocation services, such as air ticket arrangement, insurance to expats, etc.
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
Relocation Support Business
Number of RELO-AIRINC indices sold
+31.8%
Number of RELO-AIRINC indices sold
Continually increased share each year since starting the business 7 years ago
YoY change
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Sales Operating profit YoYChange
Domestic Relocation Business 226,000 10,400 + 19.6%Corporate Fringe Benefits 20,500 8,000 + 20.7%
赴任支援事業 6,900 1,400 +21.0%
Global Business 17,000 900 + 1.3%
Tourism Business 9,000 2,400 - 20.8%
Relocation Support BusinessFY2020/3 Plan
Relocation Support Business 6,900 1,400 + 21.0%
Steadily growing number of households receiving overseas relocation support
FY2020/3 Plan
(Millions of yen)Rounded down to the nearest million yen
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
Sales
¥19.3 bnYoY Change +248.0%
Global BusinessSales
Operating Profit
Operating Profit
¥1.0 bnYoY Change +121.5%
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Global Business
No earnings contribution in FY2020/3 due to impact of acquisition cost
Implementing PMI: Aiming to create synergy with Relo Group companies as soon as possible
• Customer base made up of government agencies in North America and large companies
• Supports 60,000 relocation cases annually• Busy 2Q Slow 4Q
BGRS Limited
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Global Business
Service packages, such as home management + 24-hour simultaneous interpreting service
Mobility Management Service
Number of users: YoY change +60%
Related auto lease/insurance to expats business doing well
Local services for relocated Japanese are performing well
Business targeting Japanese expats
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Global Business
However, the business is impacted by delays in visa issuance under the Trump administration
Number of leasing brokerages Same level YoY
Number of sales and purchase brokerages
Asset Model Business Sluggish
Same level YoY
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Global Business
India
Thailand
London
Established local subsidiary in Singapore
Services targeting Japanese expats
Lateral expansion of REDAC’s North America business model
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Sales Operating profit YoYChange
Domestic Relocation Business 226,000 10,400 + 19.6%Corporate Fringe Benefits 20,500 8,000 + 20.7%Relocation Support Business 6,900 1,400 + 21.0%
Global Business 17,000 900 +1.3%
Tourism Business 9,000 2,400 - 20.8%
Global Business PlanFY2020/3 Plan
Global Business 17,000 900 + 1.3%
Taking into consideration PMI expenses, REDAC’s expansion into Asia, and other upfront investment
FY2020/3 Plan
(Millions of yen)Rounded down to the nearest million yen
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16/9期 17/9期 18/9期 19/9期
Global Business
Greatly exceededinitial forecast
Sales
FY2016/9 FY2017/9 FY2018/9 FY2019/9
Due to gross accounting of residential housing
purchase/sale business
Sales
¥19.3 bnYoY Change +248.0%
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Tourism Business
Hotel Management Business
Timeshare Business
Operation of hotels and corporate recreation facilities
Solutions for revitalizing hotels and corporate recreation facilitiesConsultant services for bringing in customers to hotels and corporate recreation facilities
Managing point system-based timeshare resorts
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Reactionary decrease from sale of large-scale
facilities in FY2018/9
FY2016/9 FY2017/9 FY2018/9 FY2019/9
Sales
¥7.9 bnYoY Change -6.7%
Tourism BusinessSales
Operating Profit
Operating Profit
¥1.6 bnYoY Change -22.3%
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FY2016/9 FY2017/9 FY2018/9 FY2019/9
Tourism Business
+16.2%YoY change
Profit from sale of facilities
Profit from operations
Operating Profit
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Tourism Business
Before & After Capital Improvements Renovation of corporate recreation facilities, etc.
with professional know-how
Stable contribution to consolidated
performance
Smoothvalue-up cycle
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Sales Operating profit YoYChange
Domestic Relocation Business 226,000 10,400 + 19.6%Corporate Fringe Benefits 20,500 8,000 + 20.7%Relocation Support Business 6,900 1,400 + 21.0%
Global Business 17,000 900 + 1.3%
観光事業 9,000 2,400 ▲ 20.8%
Tourism Business PlanFY2020/3 Plan
Plan anticipates reduced profit, incorporating reduced profit from sale of facilities
FY2020/3 Plan
(Millions of yen)Rounded down to the nearest million yen
Tourism Business 9,000 2,400 - 20.8%
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Sales Operating profit YoYChange
Domestic Relocation Business 226,000 10,400 + 19.6%Corporate Fringe Benefits 20,500 8,000 + 20.7%Relocation Support Business 6,900 1,400 + 21.0%
Global Business 17,000 900 + 1.3%
観光事業 9,000 2,400 ▲20.8%Tourism Business(Excluding profit from sale of facilities) 9,000 2,400 + 32.8%
FY2020/3 Plan
施設売却益の減少を織り込み減益の計画Expect a 32.8% rise purely in profit from management (Excluding profit from sale of facilities)
(Millions of yen)Rounded down to the nearest million yen
Tourism Business PlanFY2020/3 Plan
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Overview of FY2020/3 Plan(Millions of yen)
Rounded down to the nearest million yen
ActualFY2019/3 FY2020/3 Plan YoY
Sales 250,864 280,000 + 11.6%
Operating profit 17,867 20,200 + 13.1%Profit before income taxes 19,076 22,500 + 17.9%
Net income 13,005 14,100 + 8.4%
Annual Dividend per Share (¥) 26.00 29.00 + ¥3.00
Aiming for the 20th consecutive year of sales growth and the 11th consecutive year of record profit for FY2020/3
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FY2003/3 FY2004/3 FY2005/3 FY2006/3 FY2007/3 FY2008/3 FY2009/3 FY2010/3 FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3 FY2016/3 FY2017/3 FY2018/3 FY2019/3 FY2020/3
Dividend increases are expected
for 17 consecutive years
Dividends amount
Dividends
¥29
¥0.75
Plan
( Yen/Share )
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◆Be No.1 for Domestic Core Business
◆Build a footing for reaching the Global Market
- The Third Olympic Plan priority challenges -
The Third Olympic Plan
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The Third Olympic Plan
FY2019/3
20.0 bnRecurring
profit
Target for FY2023/3
35.5 bnProfit before income taxes
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The Second Start-Up Period
Mission◆
Support the non-core businesses
◆Support the global expansion of Japanese companies
<Japanese Companies>Concentrating on main business due to decline in
the Japanese MarketAccelerating global expansion
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<Japanese Companies>
growth growthgrowth
The Second Start-Up Period
Impacted by “Work style reform”Correspondence to “Equal pay for equal work”
Growing into a position to become No.1
Domestic Relocation Business
Corporate Fringe Benefits
Relocation Support Business
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Strategy
Assign managing officers who can unify core businesses
Appoint a CIO(a chief executive for information systems)
Strengthen collaboration and cross-selling between each business
Spread the “The Second Growth Curve”
The Third Olympic Plan
Domestic Relocation Business
Corporate Fringe Benefits
Relocation Support Business
This Medium-Term Management Plan representsthe final stage for Relo to become No. 1
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The Third Olympic Plan
System investment Improve operation efficiency
Strengthen sales capabilityIncrease ProfitsRaise customer
satisfaction
Reduce cost percentage
Spread “The Second Growth Curve”
Expand system investment for each core business
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The Third Olympic Plan
April 2019~
The Global “Start-Up” Stage
The Third Olympic Plan
The FirstOlympic Plan
The SecondOlympic Plan
The Second “Start-Up” Stage (First 12 years)
The Second “Start-Up” Stage(Latter 12 years)
April 2023~ ~FY2035/3
This Medium-Term Management Plan is an important stage in gearing up for the Global “Start-Up” Stage
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The Third Olympic Plan
Decline in the Japanese market due to declining population
Accelerating global expansion
The business climate in Japan following the Tokyo Olympics
Increase in global M&A
Global Relocation CompanyGrouping of BGRS
Supporting mobility for people at global companies and Japanese employees relocated overseas
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BGRS DAY 100
Take on challenges to become the No.1 Global Relocation Company
* From the Day 100 event in Toronto
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BGRS DAY 100
BGRS VisionFor leaders at BGRS
Take on challenges targeting high level of growthParticipate in partnership management
Prior to acquisition
1.3 bnTarget for FY2023/3
4.1 bnProfit
The full-scale start of Relo Group’s global expansion
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BGRS DAY 100
• Born from the M&A of a Canadian relocation company• Number of relocations: Third in the world• Received contracts from the governments of North
America for its high-quality service• Over 90% returning customers• High level of stock vs. flow• Targets upper echelon companies in the Fortune 500• Management policy focused on increasing efficiency
through system integration
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BGRS DAY 100
1 High level of stock vs. flow
2 Promote digitalization
Manage to create ¥1.8 bn by focusing on efficiencyand cutting costs
Measures to increase profit by ¥2.8 bn (1)
Customer service, Office administration, Supply chainsIncrease work efficiency by introducing automation to these three segments
Prior to acquisition
1.3 bnTarget for FY2023/3
4.1 bnProfit
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BGRS DAY 100
IT systems investment
Improve operationefficiency
Reduce cost percentage
Improve price flexibility
Strengthen sales capabilityIncrease profit
Create ¥1.0 bn through new business development and other aggressive sales activities
Measures to increase profit by ¥2.8 bn (2)
Prior to acquisition
1.3 bnTarget for FY2023/3
4.1 bnProfit
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BGRS DAY 100
What we confirmed at BGRS
1 Improved profit margin via system integration
2 Governance structure for current management team
3 Room to expand market share/profit scale
4 Room to expand into European markets
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BGRS DAY 100
The situation at Relo prior to the Second “Start-Up” Stage was similar to BGRS
Corporate Housing Management Corporate Fringe Benefits
There were many competitors, and internally, there was an air of stagnation and no momentum
Declared to become No.1Clarified Relo’s mission and vision
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BGRS DAY 100
In a position to become No.1 for each core business
Clarified Policy
Strengthen sales capability and marketing
Construct strong service and follow-up frameworkImprove operation efficiency through system investment
Declared to become No.1
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BGRS DAY 100
Reaching the stage where it can shift to an aggressive sales policy
Going forward As a member of Relo Group
Continue work on operations efficiency projects
Take up a mission that inspires staffShare a huge vision among members
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FY2019/3 FY2020/3 FY2021/3 FY2022/3 FY2023/3
BGRS DAY 100
Impact of BGRS on the consolidated business performanceThe Third Olympic PlanFY2020/3
Acquisitioncost ー0.5 bn
Expect BGRS to contribute to achieving the goals of the Third Olympic Plan and create upswing
BGRS is not incorporated into the Medium-Term
Management Plan
Profit before income taxes
35.5 bn
BGRS
FY2019/3 FY2020/3 FY2021/3 FY2022/3 FY2023/3
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FY2010/9 FY2011/9 FY2012/9 FY2013/9 FY2014/9 FY2015/9 FY2016/9 FY2017/9 FY2018/9 FY2019/9
Corporate Housing Management
Centralizing all residential housing-relatedoperations in one business
The First Olympic Plan The Second Olympic Plan
Units under management showed huge growth during the
Second Olympic Plan
Units under management
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Corporate Housing Management
1 From FY2021/3, system enters full operation Improvement of operational efficiency/increase of ancillary revenue
2 Integrate Vacant House Property Management Support residence-related work for companies and employees
3 Strengthen rental housing service with furniture “R+” Respond to the needs of foreign workers
The Third Olympic Plan
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Corporate Housing Management
Become No.1 through overwhelming profit scale and differentiation
FY2019/3
5.6 bnTarget for FY2023/3
10.5 bnOperating profit
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FY2000/3 FY2001/3 FY2002/3 FY2003/3 FY2004/3 FY2005/3 FY2006/3 FY2007/3 FY2008/3 FY2009/3 FY2010/3 FY2011/3 FY2012/3 FY2013/3 FY2014/3 FY2015/3 FY2016/3 FY2017/3 FY2018/3 FY2019/3
Corporate Fringe Benefits
Fill in the gap in fringe benefits between companies in the Tokyo metropolitan
area and local companies
“The Second Growth Curve” by system investment
- Corporate Fringe Benefits mission -
Operating profit
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Corporate Fringe Benefits
1 Become No.1 in profit scale/market share
2Strengthen “Club Off” business (CRM business)Strengthen to Japanese companies monopolizing of the customer
base
3“Club Off” + 24-hour on-site support + Call centers Strengthen monopolizing of the customer base/support declining
working population
The Third Olympic Plan
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Relocation Support Business
The Second Olympic Plan
• Completed integration with Relo Panasonic Excel’sexternal sales unit
• Raising businesses’ level of stock vs. flow
Entering an important stage for meeting growth curve trajectory
The Third Olympic Plan
Over 8,000• Number of households receiving services
• Promote digitalization of work processes
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Relocation Support Business
How global companies handle mobilityHow Global Relocation Companies respond
Strategy Utilize BGRS’s infrastructure
1 Absorb BGRS’s know-how
2 Promote systemization and digitalizationof work processes
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Relocation Support Business
3 Strengthen inbound support, as a high-demand area
4 Bring in new Japan-relocating customersfrom BGRS
1 Absorb BGRS’s know-how
2 Promote systemization and digitalizationof work processes
The Third Olympic Plan
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Relocation Support Business+ Global Business
FY2019/3
2.0 bnTarget for FY2023/3
3.5 bnOperating profit
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Relocation Support Business+ Global Business
Existing Bases
BGRS Bases
• Provide strong support for Japanese companies’ global operations
• Support global companies’ mobility
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Residential Property ManagementTourism Business
~FY2019/3
The Global “Start-Up” Stage
The Second “Start-Up” Stage (Latter 12 years)
The ThirdOlympic Plan
The FirstOlympic Plan
The SecondOlympic Plan
The Second “Start-Up” Stage (First 12 years)April 2011~
Related business that differs from the BtoB business in which Relo Group specializes
Residential Property Management and Tourism Business Succeeded in establishing
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Residential Property ManagementTourism Business
New companies joining the Group achieve high level of growth
Leased housing management companies
Small-to medium-sized hotels
Utilizing our ability to attract customers from our core businesses
Relo NetMembership
Call center
Consultant on attracting
new customers
Operations contractor
+ Activities to mitigate the successor problems facing some businesses
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Residential Property ManagementTourism Business
The First and Second Olympic Plans
1 Assimilated 16 leased housing management companies into the Group
2 TOHTO + Bestus : Increased profit by 6 times, doubled the margin percentage, and improved productivity
3Tourism Business: Total 47 facilities(34 owned by Relo)¥1.8 bn in profit from facility operation, and improvedproductivity
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Residential Property ManagementTourism Business
・ Bring in people, goods, and capital from across theworld
Will accelerate during the 4 years of the Third Olympic Plan
Business Environment
Declining population
Trends in Japan
・ Successor problem manifests at small-to mid-sizedcompanies outside of major metropolitan areas
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Residential Property ManagementTourism Business
Many small- to mid-sized companies are pressured to change
Adds to the successor problem
“Equal pay for equal work”
Raise minimum wageGovernment
policy
Business Environment
Declining population
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1 Over 40 shops mainly in Northern Kyushu
1 Top Real Estate Broker in Kyushu -- # of deals
EKIMAE REAL ESTATE merged into our group
Total 4 of Real Estate Companies including that engaged in leasing & property management on 7,800 units all over Japan
during 2nd half of FY2020/3 to be merged into our group
M&A Deal Trends: Increase in deal volume & deal size
Residential Property Management
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Residential Property ManagementTourism Business
Restructure and consolidate operating companies joining Relo Group
Conduct a certain level of investment
Improve profit margin by streamlining operations Raise the top line
Further growth bolstered by business successand market backwind
The First and Second Olympic Plans
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Tourism Business
FY2019/3
1.8 bnTarget for FY2023/3
3.5 bnOperating profit
* Excluding profit from sale of facilities
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The Third Olympic Plan
Be No. 1 for Domestic Core Business
Expand into BtoC business based on ability to attract new customers
Build a footing for reaching the Global Market
Round 2 of the Second “Start-Up” Stage:Jump to the Global “Start-Up” Stage
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The Third Olympic Plan
Understand the importance of mission and vision
Experience how effective shares can be in financial planning
We will prove that we still have so much potential.
Laying out a huge vision and inspiring mission
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Planning and IR Group, Relo Group, Inc.
E-Mail: [email protected]: http://www.relo.jp/
Contact
The information contained in this presentation is provided for information purposes only and should not be construed as a solicitation to invest in our securities.This material has been prepared based on currently available information as of September 2019 and contains forward-lookingstatements that reflect Relo’s plans and expectations at the abovementioned time. Relo shall bear no responsibility or liabilityfor the accuracy of the information, or for any actions arising from the use of information in this presentation.Moreover, the contents of this material are subject to change without notice.