Consolidated Financial Results for the Year Ended … · Consolidated Financial Results for the...
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Consolidated Financial Results for the Year Ended December 31, 2014 February 10, 2015 (Tokyo Stock Exchange First Section, Stock code 7825)
Transcript of Consolidated Financial Results for the Year Ended … · Consolidated Financial Results for the...
Consolidated Financial Results
for the Year Ended December 31, 2014
February 10, 2015
(Tokyo Stock Exchange First Section, Stock code 7825)
2014 Earnings Results
2015 Business Policy
Topics
President and Representative Director Yasushi Nojiri
Q&A
2014 Earnings Results
<4>
2014 Full year results (key points, y-o-y)
Golf clubs increased slightly
golf balls fell, golf accessories rose
Revenue rose, profit declined
Profit fell due to currency exchange
Japan up, Asia up, Europe up, North America down
Tennis rose, wellness increased
Service
Golf course subsidiaries
3 * Sold all shares of
Bambi Kogen Kaihatsu
Overseas sales
Subsidiaries 9
Manufacturing
Subsidiaries 2
Domestic sales
subsidiaries 2 Merged Dunlop Sports Chubu Co.
with Dunlop Sports Marketing Co.
Group Overview
-1
-1
+3
2014 (17 consolidated
subsidiaries）
-1
-1
2013 (16 consolidated
subsidiaries）
2012 (18 consolidated
subsidiaries）
Service
Golf course subsidiary 1
Overseas sales
Subsidiaries 9
Manufacturing
Subsidiaries 2
Domestic sales
subsidiary 1 Merged Dunlop Sports Okinawa
Co. with Dunlop Sports
Marketing Co.
Service
Golf course subsidiaries
4 *Sold all shares of the
Oaklet Golf Club
Overseas sales
Subsidiaries 9
Manufacturing
Subsidiaries 2
Domestic sales
subsidiaries 3 Merged Dunlop Sports
Hokkaido Co. with Dunlop Sports Marketing Co.
Changes in
the number of
subsidiaries
<5>
Wellness subsidiaries 4 *Added Dunlop Tennis School
into consolidated scope
*Turned Dunlop Sports
Wellness and Dunlop Sports
Plaza into subsidiaries
Changes in
the number of
subsidiaries
50
55
60
65
70
75
2009 2010 2011 2012 2013 2014
Sales (billion yen)
Summary of Consolidated Financial Results
<6>
Sales rose for the third year in a row
Profit declined due to the weaker yen
Equipment markets vs 2013
Golf, Japan -1%
Tennis, Japan -1%
Golf, North America -3%
(Billion yen) 2014 *Rounded to the
nearest 100 million yen Jan.-Dec.
＋ 4.3
(+6%)
2.1 -0.7 3.2 (2.9%) ( -25%) (4.7%)
3.1 -0.1 3.5 (4.3%) ( -2%) (5.2%)
1.1 -0.4 1.5 (1.5%) ( -26%) (2.2%)
-1.1
vs 2013
+3.4
-0.4
70.9
Net Income (%)
Ordinary Income
(%)
Sales
Operating Income
(%)
-0.4
Forecast
2014 vs
forecast
67.5
Sales and profit
Profit has declined since 2013 due to currency (JPY fell vs USD) .
Challenge is to become invulnerable to currency fluctuation.
<7>
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0
10
20
30
40
50
60
70
80
90
2011 2012 2013 2014 2015 forecast
Sales（billion yen） Profit (billion yen)
JPY/USD 2011 2012 2013 2014 2015 estimate
Exchange rate
80 80 98 106 120
Golf clubs -0.9 +1.0
Golf balls +0.0 -0.5
Golf others +0.5 -0.1
Total -0.4 +0.4
Overseas
(ex. currency) Japan
Sales by Product Category
Sports equipment in total basically flat, service revenue rose
*Rounded to the nearest 100 million yen, amounts less than ±50 million yen shown as zero
<8>
Overall, major revenue rise with addition of Wellness business
2014 Excluding
Jan.-Dec. Amount
Rate of change
currency effect
Golf clubs 34.5 +1.4 +4% +0.0
Golf balls 14.5 +0.1 +1% -0.5
Golf others 7.9 +0.5 +7% +0.4
56.9 +2.0 +4% -0.0
6.3 +0.1 +1% +0.1
0.4 +0.0 +11% +0.0
63.7 +2.1 +3% +0.1
4.5 +0.4 +9% +0.4
2.7 +1.8 +195% +1.8
70.9 +4.3 +6% +2.3
Wellness
(Billion yen) vs 2013
Golf equipment
Services
Total
Tennis equipment
Licensing revenue
Sports equipment
Geographical Distribution of Sales
Revenue increased in Japan, Europe and Asia, decreased in North America
■Japan Golf equipment market -1%/our Company -1%
Total golf equipment revenue decreased. Although revenues
from golf shoes and golf wears were higher, the drop in golf
club revenue had a bigger impact. Overall, revenue increased
significantly with the addition of the wellness business into the
scope of consolidation.
■North America Golf equipment market -3%/our Company -8%
Revenue from golf balls and Cleveland Golf clubs fell.
Meanwhile, revenue from XXIO and SRIXON golf clubs
increased.
■Europe Golf equipment market -2%/our Company +2%
While the market shrank from the previous year, our revenue
increased with expanded sales mainly of golf balls and XXIO
golf clubs.
■Asia
The market conditions were not favorable in general including
that of South Korea and China, however, our revenue
increased with expanded sales mainly of XXIO golf clubs.
* Overseas revenue increased even without the currency effect.
<9>
(yen) changes ２０１４ ２０１３
$ +8.1 105.8 97.7
[Exchange rate]
２０１４
Jan. – Dec.
Japan 45.3 +1.7 +1.7
North America 8.3 -0.0 -0.6
Europe 4.8 +0.6 +0.1
Asia 9.8 +1.9 +1.0
Australia &
South Africa 2.6 +0.1 +0.0
Overseas
sales 25.6 +2.6 +0.5
Ratio of Overseas sales 36.1% +1.5P -0.4P
Consolidated
sales 70.9 +4.3 +2.3
*Rounded to the nearest 100 million yen, amounts less than ±50 million yen shown as zero
vs 2013 Excluding Currency
effect (Billion yen)
Operating Income Analysis
Profit fell due to domestic golf club sales drop and weaker yen
<10>
-0.7
+0.2 Jan.-Dec.
Currency
exchange
-0.6
2.8
0.0
2.1
２０１３
Sales vol.
Product mix
-0.4
4.0
(Billion yen)
2.0
２０１４ Jan.-Dec. +0.3 -0.2
Other
expenses
Cost
reduction
Material
costs
Golf clubs -0.1
Golf balls -0.04
Tennis balls -0.02
(yen) changes ２０１４ ２０１３
$ +8.1 105.8 97.7
[Exchange rate]
Borrowings grew with M&A, Interest-bearing debt ended at 9.1 billion yen
Status of Balance Sheet
<11>
Fixed Assets
20.6 27.6
37.6
* Rounded to the nearest 100 million yen End of Dec. 2013 End of Dec. 2014 Billion yen
16.2 26.1
Liabilities
Net Assets
39.1 Fixed Assets
Current Assets
Net Assets
Current Assets
33.6
Liabilities
38.0
+4.0
+7.0
+9.9
+1.1
Total Assets 54.2
Capital to Asset Ratio 68.4%
2.1 Interest-bearing debt
Total Assets 65.2
Capital to Asset Ratio 58.2% Interest-bearing debt 9.1
50
55
60
65
70
75
2009 2010 2011 2012 2013 2014
Sales (billion yen)
Summary of Consolidated Financial Results
<12>
Sales rose for the third year in a row
Profit declined due to the weaker yen
Equipment markets vs 2013
Golf, Japan -1%
Tennis, Japan -1%
Golf, North America -3%
(Billion yen) 2014 *Rounded to the
nearest 100 million yen Jan.-Dec.
＋ 4.3
(+6%)
2.1 -0.7 3.2 (2.9%) ( -25%) (4.7%)
3.1 -0.1 3.5 (4.3%) ( -2%) (5.2%)
1.1 -0.4 1.5 (1.5%) ( -26%) (2.2%)
-1.1
vs 2013
+3.4
-0.4
70.9
Net Income (%)
Ordinary Income
(%)
Sales
Operating Income
(%)
-0.4
Forecast
2014 vs
forecast
67.5
Interim 20 yen
Year-end 10 yen
Total dividend
Year ended
Dec. 2014 million yen
870
Dividend per share
2015 Business Policy
2015 Business Policy (Key points)
Increase revenue from golf equipment
and wellness businesses
Strengthen overseas sales of XXIO and
SRIXON golf clubs
Enhance profitability and increase sales in
North America, Europe
<14>
Expect to achieve record sales
50
55
60
65
70
75
80
85
2009 2010 2011 2012 2013 2014 2015
Sales (billion yen)
<15>
( Billion yen ） ２０１５
*Rounded to the nearest 100 million yen
Jan. –Dec. forecast
＋ 8.1
(+11%)
2.0 -0.1
(2.5%) ( -4 % )
2.5 -0.6
(3.2%) ( -18 % )
0.7 -0.4
(0.9%) ( -35 % )
Net Income
( % )
vs 2014
Sales
Operating
Income ( % )
79.0
Ordinary
Income ( % )
Equipment markets vs 2014
Golf, Japan Slight decrease
Tennis, Japan Slight decrease
Golf, North America Slightly increase
Sales by Product Category (forecast)
Golf clubs +0.7 -0.3
Golf balls -0.0 +0.8
Golf others -0.0 +0.2
Total +0.6 +0.7
Overseas (ex. currency) Japan
Sales by Product Category (forecast)
Plan to increase revenue of golf clubs in Japan, golf balls overseas
*Rounded to the nearest 100 million yen, amounts less than ±50 million yen shown as zero
<16>
２０１５ Excluding
currency
effect Jan. – Dec. Amount Rate of
change
Golf clubs 36.0 +1.5 +4% +0.4
Golf balls 15.8 +1.3 +9% +0.7
Golf others 8.1 +0.3 +3% +0.2
59.9 +3.1 +5% +1.3
6.5 +0.2 +3% +0.1
0.5 +0.0 +7% +0.0
66.9 +3.3 +5% +1.4
4.0 -0.5 -10 % -0.5
8.0 +5.3 +196% +5.3
79.0 +8.1 +11% +6.2
(Billion yen) vs 2014
Total
Tennis equipment
Licensing revenue
Sports equipment
Service
Wellness
Golf equipment
Geographical Distribution of Sales (forecast)
Expect revenue increase in all regions
■Japan
Expect revenue to increase for the wellness
business and from expanded sales mainly of
golf clubs.
■North America
Expect revenue to increase with golf balls as
well as XXIO and SRIXON golf clubs.
■Europe
Expect revenue to increase with XXIO and
SRIXON golf clubs mainly in the mainland.
■Asia
Expect revenue to increase from continuing to
focus on sales expansion in South Korea and
China, as well as from starting direct sales in
Malaysia.
<17>
[exchange rate]
(yen) Change ２０１５ ２０１４
$ +14.2 120.0 105.8
２０１５
Jan. – Dec.
Japan 50.6 +5.3 +5.3
North America 9.2 +0.9 +0.2
Europe 5.4 +0.6 +0.2
Asia 11.1 +1.2 +0.5
Australia &
South Africa 2.7 +0.1 -0.1
Overseas sales 28.4 +2.8 +0.8
Overseas sales
ratio 35.9% -0.2P -1.8P
Consolidated
sales 79.0 +8.1 +6.2
*Rounded to the nearest 100 million yen, amounts less than ±50 million yen shown as zero
Excluding
currency
effect (Billion yen)
Changes
vs 2014
Changes in Operating Income (forecast)
Offset impact of weaker yen with increased sales, cost reduction
<18>
Other
expenses
Sales vol.
Product mix
+0.5 ２０１５
Jan. – Dec.
Cost
reduction
Material
costs
Currency
exchange
+0.3
2.1
(Billion yen)
2.0
2.5
3.0
3.5
２０１４
1.5
Jan. – Dec.
2.0
-0.1 -0.9 +0.1
-0.1
Golf clubs -0.08
Golf balls +0.02
Tennis balls +0.01 [exchange rate]
(yen) changes ２０１５ ２０１４
$ +14.2 120.0 105.8
Expect to achieve record sales
50
55
60
65
70
75
80
85
2009 2010 2011 2012 2013 2014 2015
Sales (billion yen)
<19>
( Billion yen ） ２０１５
*Rounded to the nearest 100 million yen
Jan. –Dec. forecast
＋ 8.1
(+11%)
2.0 -0.1
(2.5%) ( -4 % )
2.5 -0.6
(3.2%) ( -18 % )
0.7 -0.4
(0.9%) ( -35 % )
Net Income
( % )
vs 2014
Sales
Operating
Income ( % )
79.0
Ordinary
Income ( % )
Equipment markets vs 2014
Golf, Japan Slight decrease
Tennis, Japan Slight decrease
Golf, North America Slightly increase
Consolidated Earnings (forecast)
*The dividend forecast for the year ending December 2015 is undetermined.
Efforts to offset currency fluctuation
<20>
Increase sales and profit overseas
Price pass-through in Japan
(under consideration)
Lower cost of procured goods
Reduce expenses
Key points of our Growth Strategy
[Golf]
・Maintain the top position in Japan
・Expand sales of XXIO and SRIXON golf clubs
overseas
[Tennis]
・Maintain the top position in Japan
・Expand sales of soft tennis
[Wellness business]
・Develop the fitness business and golf and tennis
school business collectively into a third pillar
<21>
Solidify our No.1 position
Golf (Japan)
• Accommodate a broad range of needs with the 3 brands of XXIO, SRIXON
and Cleveland Golf
• Strive to revitalize the golf market
• Fortify our relationship with customers taking advantage of our company
group’s strength including school business and tournament operations
<22>
*Source: Yano Research Institute, actual retail store sales survey “YPS Golf Data”
Golf club sales (by value) Golf ball sales (by value)
Our
Company
Our
Company
Company
A
Company
B
Company
C
Company
A
Company
B
Company
C
Company
D
Golf (North America, Europe, Asia)
North America
Europe
Asia
[Market outlook] Slight rise from 2014 when revenue dipped due to weather factors.
[Countermeasures]
・Measures to strengthen business structure are basically in place.
Will continue to improve profitability and put more focus on sales expansion as
well in 2015.
・Will not participate in price wars.
・Expand sales of SRIXON and XXIO golf clubs.
・Increase exposure of balls at tours and expand sales mainly with new products.
[Market outlook] U.K. stagnant, mainland Europe basically flat
[Countermeasures]
・Revenue to rise overall by enhancing profitability in U.K. and expanding sales in
mainland Europe.
・Expand sales of SRIXON and XXIO golf clubs.
[Market outlook] Basically flat except for China where the market is stagnant.
[Countermeasures]
・Expand XXIO golf club sales mainly in South Korea and China.
<23>
Improve profitability in North America, Europe
<24>
Sales and profit
in North America
Sales and profit
in Europe
*利益は社内管理ベース
2011 2012 2013 2014 (2015)
利益
↑
売上
↑
売上
利益
2011 2012 2013 2014 (2015)
利益
↑
売上
↑売上
利益
Sales
Sales Profit Profit Sales
Sales
Profit
Profit
* Profit on internally managed basis
25
Brand devoted to lavish all golfers with
excellent, proprietary technology
Brand devoted to lavish all golfers with
excellent, proprietary technology for the
short game
A reliable, distinctive brand that will elevate
your golf to higher levels
WHERE SCORING MATTERS
YOUR PRESTIGE PARTNER
DEDICATED TO IMPROVING YOUR GAME
5 <25>
Golf: Brand strategy (1)
Golf: Brand strategy (2)
<26>
Wood/Iron Wedge
Japan
North
America
Europe,
Australia,
South
Africa
Asia
Wood/Iron Wedge
Japan
North
America
Europe,
Australia,
South Africa
Asia
Unify exposure with contract players to
until 2013 from 2014
XXIO sales overseas
Continues to sell well in Asia
Made full introduction in North America, Europe. Off to a good start.
XXIO 8 expected sales
overseas (vs XXIO7)
<27>
2009 2010 2011 2012 2013 2014 2015
North America
Europe
Oceania
South Africa
South East Asia
China
South Korea
Taiwan
Japan
Estimate
Overseas sales ratio
2014: 42%
2015: 43% (estimate) North America 32.7 times
France 2.9 times
Australia 2.3 times
China 1.3 times
South Korea 1.2 times
South East Asia
1.4 times
Taiwan 1.2 times
2013 2014 2015
North America
Europe
Oceania
South Africa
South East Asia
China
South Korea
Taiwan
Japan
Estimate
Overseas sales ratio
2014: 14%
2015: 36% (estimate)
SRIXON golf clubs overseas sales
Overseas sales plan for
SRIXON golf clubs
（2015/2014）
2014: Introduced model for advanced players. Sales exceeded forecast. 2015: Plan to introduce model for the average golfer Increase overseas ratio of SRIXON golf club sales.
<28>
3.1 times
4.6 times
2.4 times
2.8 times
2.6 times
1.6 times
5.2 times
North America
Europe
Australia
China
South Korea
South East Asia
South Africa
Z945 (Indigo)
Z745 (Blue)
Z545 (Blue)
In planning
Ease o
f captu
ring b
all
Shaft KP rates
[Brand policy]
“Game Improvement” for all golfers
SRIXON golf clubs plans for the future
Z945
Z745
Z545
In planning
Sta
bility
at a
dd
ress
Crown projected area
Z945
Z745
Z545
In planning
CG Depth E
ase
of liftin
g b
all
[Drivers]
Z945
Z745
Z545
In planning
MOI Toe-Heel
Ad
va
nta
ge
ag
ain
st s
ca
tterin
g
hittin
g p
oin
t be
twe
en
toe
-heel
<29>
For advanced players For the average golfers
Z545 Z745
Z945
In planning
Most used in
Japan LPGA
Tour
Cleveland Golf
<Source> Japan: Yano Research Institute,
U.S.A. & U.K.: Golf Datatech,
France: Sports Marketing Survey (Jan.-Nov.),
South Korea: Estimate by our company
2nd most used
in PGA Tour
<30>
Wedge volume share in major markets (2014)
Japan 21.1% No. 2
U.S.A. 24.2% No. 2
U.K. 26.9% No. 1
South
Korea 23.6% No. 2
SRIXON Z-STAR 78 wins around the world
PGA Tour(+WGC & Majors)
Web.com Tour
Champions Tour
LPGA Tour
European Tour
European Challenge Tour
Ladies European Tour
Sunshine Tour
Asian Tour
OneAsia
KPGA
KLPGA
JGTO Tour
JLPGA Tour
JPGA Senior Tour
JGTO Challenge Tour
5 wins
80
19 wins
60
8 wins
20
11 wins
129
33 wins
87
2014: 20％ winning rate (78 out of 390 matches)
PGA of Australia Tour 2 wins
14
<31>
Top winning rate
in Japan (37.9%)
Tennis (1) Domestic market share
Maintain top position in Japan
<32>
*Source: [Rackets] Yano Research Institute’s Retail Store Actual Sales [YPS Tennis Data]
[Balls] for 2008-2013 Yano Research Institute “White paper on the Sports Industry” (2011 edition, 2012
edition, 2014 edition)” (2013 figures are estimates) / 2014 figures are estimates by our Company
Rackets domestic market share (by value) Balls domestic market share (by value)
our
Company Company
A
Company
B
Company
C
our
Company Company
A
Company
B
Tennis (2) Ball use rate / Babolat
<33>
* Men’s: International tournaments with total prize money of 40K dollars or more
Women’s: International tournaments with total prize money of 75K dollars or more
70% plus use rate in
major tournaments in Japan*
The world’s first racket with sensors in
the handle for communicating functions
Babolat Play
First model introduced in September.
This January, the 3rd edition “AeroPro Drive
Play” (model used by Nadal) to be introduced
First racket with
communicating
functions to
acquire official
approval of the
International
Tennis Federation
Used in 15 of the 18 official tournaments
organized by the Japan Soft Tennis
Association (Tournaments in which only SRIXON balls are used: 5,
in which SRIXON balls are among those that can be
selected: 10)
Turned fitness companies into subsidiaries
Achieve sales of 10 billion yen within 5 years
Develop into 3rd pillar after golf and tennis equipment businesses
as soft business including existing golf schools and tennis schools.
<34>
General fitness clubs: 17 facilities in total
Golf schools: total 113 sites
Tennis schools: total 19 sites
This document was prepared in order to provide reference material to investors for the
purpose of promoting understanding of the current stuation of Dunlop Sports Co.
The contents described in this document are based on generally recognized economic
and social situations and certain premises determined rationally by the Company at the
time of preparation of the document. However, it may be changed without advance notice
due to reasons such as changes in the business environment.
We kindly ask that investments be made at investors’ own discretion.
Contact
DUNLOP SPORTS CO. LTD.
Public Relations
TEL： +81-78-265-3139
FAX： +81-78-265-3135
E-mail：[email protected]
URL：http://www.dunlopsports.co.jp/en/
This document was prepared for the benefit of investors to contribute to their
understanding of the current situation of DUNLOP SPORTS CO. LTD. .
The contents described in this document are prepared and based on generally
acknowledged economic/social conditions as well as certain assumptions determined
reasonable by the company at the time of preparation of the material and is subject to
change without advance notice due to factors including changes in the management
environment.
We kindly ask investors to make investments at their discretion.
