BicCamera, corporate business in growth areas and sales increase of EC also struggled mainly in urban areas. Sales and profits decreased on a non-consolidated basis.

Summary of non-consolidated financial results

Kazuyoshi Kimura: This is Kimura from Bic Camera. Thank you very much for visiting the briefing session at such a time. In addition, I would like to thank you again for your continued support and support in various ways.

Now, based on Kojima's financial results, I would like to explain from Bic Camera's second quarter financial results for the fiscal year ending August 2021.

First, I will explain from the summary of financial results of BicCamera alone. Contrary to Kojima, sales and profit items were lower than the previous year and forecasts.

Non-consolidated sales ①

Looking at the actual sales by sales channel, sales decreased by 24 billion yen from the same period of the previous year, but the corporate business, which Bic Camera positions as a growth area, increased by 1.6 billion yen, and EC increased by 14.5 billion yen. Is increasing.

On the other hand, the number of physical stores decreased by 40.1 billion yen, but although half of them are inbound, domestic sales also struggled mainly in urban areas due to the impact of the recurrence of the state of emergency. did.

Non-consolidated gross profit / SG & A expenses

Although sales fell sharply, I believe that we have achieved some success in improving the gross profit margin and reducing SG & A expenses, which I have emphasized since I took office, and in reducing the break-even point. ..

The gross profit margin on a base excluding the consideration for wholesale and services provided by Kojima and Sofmap improved by 0.4 points from the same period of the previous year due to increased sales of PB products and high value-added products.

Regarding SG & A expenses, as a result of efforts to reduce fixed costs, curb points and distribution costs, and carefully select capital investment, the break-even point was 13.6 billion yen lower than in the same period of the previous year.

Performance by company

Next is the achievements of major companies other than Bic Camera and Kojima. Sales of Sofmap decreased year-on-year, but the operating deficit has turned into the black.

While reviewing the sales strategy of EC, which had low profitability, we strengthened sales of Esports-related products and focused on support and second-hand businesses. As a result, the gross profit margin has improved by 3.6 points compared to the same period of the previous year.

Sales of Nippon BS Broadcasting were expected to decrease year-on-year due to steady sales, a decrease in cost of sales due to delays in production of some programs and utilization of re-edited programs, and efficient use of program advertising costs. Profit turned around and increased.

Sales of the consolidated subsidiary Lanett decreased year-on-year, but operating income was expected to decrease year-on-year due to improvements in the gross profit margin due to an increase in sales support and other factors, and the reduction of SG & A expenses. Was landed with an increase in profits.

Summary of consolidated financial statements

As a result of the above, while net sales in the first half of the year were lower than in the same period of the previous year, operating income, ordinary income and net income attributable to owners of the parent company all exceeded the same period of the previous year and doubled from the initial forecast for the first half. have become.

In addition, WILBY and three other companies are newly consolidated or subject to the equity method from the viewpoint of materiality.

Consolidated balance sheet

Next is the consolidated balance sheet. Regarding products and products, so-called inventories, we have been making various efforts to optimize inventories since the previous fiscal year, resulting in a decrease of 18.3 billion yen compared to the same period of the previous year. We will continue to make efforts to optimize inventory.

Consolidated cash flow statement

This is a cash flow statement. The difference in operating cash flow from the same period of the previous year is mainly due to the significant inventory reduction in the previous fiscal year, which I mentioned earlier.

The acquisition of investment cash flow subsidiary shares is related to Arrow Japan, where Lanett acquired 100% of the shares in the second quarter. Financial cash flow is mainly due to an increase in borrowings.

Sales by consolidated item

Sales by item. Even in Bic Camera, where sales were difficult, products that met the needs of consumers, such as nesting, telework, and online lessons, continued to sell steadily.

Sales in the domestic home appliance retail industry for the same period as our financial results exceeded the same period of the previous year by about 2%, and there is a nationwide demand for home appliances.

By product, as with the Group, sales of TVs, humidifiers, seasonal home appliances driven by air purifiers, as well as PC peripherals and games are increasing.

Changes in monthly sales (based on POS compared to the same month of the previous year)

Regarding monthly sales trends, as I explained so far, Bic Camera and Kojima continue to move in contrast.

Consolidated earnings forecast

Next, I would like to explain the business forecast for the current fiscal year ending August 2021. This is a consolidated earnings forecast. Based on the first half and the current situation, we have revised the full-year earnings forecast. Looking only at the second half, both sales and profits have been revised downward, but this is due to the downward revision of Bic Camera alone.

Non-consolidated earnings forecast

This is a non-consolidated earnings forecast. As for the non-consolidated revision forecast, sales have been revised downward by 35 billion yen and profits have been revised downward compared to the initial forecast. In addition to the weakness of the feet, the convergence of the new coronavirus infection during this term is still not expected to be large. Therefore, it is due to the fact that we anticipate the harshness of the city center.

Non-consolidated sales ②

Sales increase / decrease by sales channel in the quarter. In the second half of the year, sales are expected to increase, centered on the recovery of physical stores. Sales are expected to grow significantly, especially in the third quarter of the previous year, when the impact of store closures was significant due to the state of emergency. However, we do not believe that it will exceed the level before Corona two years ago.

Store development (opening in the second half)

It is a store development. On March 5, the BicCamera Amu Plaza Kumamoto store was opened in front of Kumamoto Station, which has become more crowded since the opening of the Shinkansen. The store, which is close to the community, has expanded the lineup of home appliances with high needs by narrowing down the lineup of non-home appliances while being compact, and we believe that it has become a store that is easy for customers to use.

Consolidated capital investment and depreciation

Regarding capital investment, we have revised the plan to 17 billion yen, which is 2.5 billion yen less than the beginning of the term, due to the cancellation or postponement of unnecessary and urgent and dilute investment, after assessing the return on investment. increase. In addition, depreciation expenses are expected to decrease from the initial plan.

Dividend

It is a dividend. Our basic policy for profit distribution is to pay appropriate profit dividends according to business performance. We have decided to pay an interim dividend of 5 yen per share for the fiscal year ending August 2021. The year-end dividend is expected to be 10 yen per share.

Sales power: Strengthening store power

Next is the growth strategy. We believe that the source of the competitiveness of the retail industry is the product power to provide products from the customer's perspective and the sales power to appeal the value to the customer.

Today, I would like to explain about EC and corporations, which are positioned as stores and growth areas, as a sales force initiative, and about PB products and recurring services as a product strength initiative.

First, as part of strengthening our sales capabilities, we are working to strengthen our store capabilities. Currently, at BicCamera stores, as a customer's purchasing agent, we are working to create a sales floor that is easy to understand and buy from the customer's perspective, and to strengthen customer service from the standpoint of using products and services.

In creating sales floors, we are reviewing product classifications and grouping based on current customer needs, and are making changes to product development that allows us to find the products we want in a short amount of time. At the same time, we are working to create an environment that facilitates shopping by ensuring appropriate flow lines, and to change the product mix of sales floors based on demand.

In order to strengthen our store capabilities, we are actively expanding the opportunities for women to make proposals. The "B-Life Design Room" will be opened this year to further promote the active participation of women in stores, such as creating sales floors from a female perspective, planning sales promotion plans, and training sales staff so that they can be useful in their daily lives as purchasing agents for customers. It was newly established in March and has started activities.

Sales force: EC

Next is EC. The Group's EC sales in the first half of this year continued to grow significantly, reaching 124.7% year-on-year. In addition, regarding the EC of Bic Camera alone, we are making full-scale efforts to strengthen the profit structure, which was a problem.

We are working to improve the gross profit margin, control expenses, and carefully select investments to visualize accurate profits, and the effects of improving profitability are beginning to appear.

Currently, we are pursuing an easier-to-use EC site, which is the starting point, by enhancing product information, improving searchability, and improving purchasing flow lines. In addition, we plan to take advantage of the home appliance specialty stores that have actual stores, expand the upper limit of installation and construction work that requires speed and security, and further increase sales of white goods.

Sales force: Corporate business

Next is the corporate business. The corporate business, which is positioned as a growth area, continues to grow by double digits every year, and we expect sales for the Group to approach 30 billion yen in the current fiscal year.

BicCamera's corporate business has been promoted through corporate offices and corporate-only ECs established in major cities, but we have decided to start community-based corporate business at stores in all areas. rice field.

A full-time person who understands the needs of corporations in the vicinity of the store will jump out of the store and make aggressive visit proposals, and will respond to the problems of local corporations.

Product power: PB products

Next, I would like to talk about product power, which is another source of competitiveness in the retail industry. The Group still focuses on national brand products, and having products that can compete on the basis of product strength, that is, the development of PB products and unique products from the customer's perspective is an urgent issue. , This term, we launched the Product Development Department as a dedicated organization for PB. The Product Development Department is currently strongly promoting the development of highly original brand products among the PB products of the Group.

In the future, we will accelerate the development of competitive products that capture consumer needs, while keeping an eye on SPA, which handles everything from manufacturing to retailing. The ratio of original brand products to PB sales is expected to be about 10% in this term, but we would like to reach a level of over 30% in four years.

Product power: Recurring service

Next is the recurring service. Growth in the domestic consumer electronics retail market has peaked, and we believe that we cannot be optimistic about the population decline in the long run.

Under such circumstances, in order to continue to increase profits, we think that it is necessary to establish a business model that can connect with customers even after sales, not the end of sales, so we are focusing on developing recurring services. I will come.

As a recurring service, we have already provided service support for digital products at Sofmap, repair and purchase services, etc., but next year we will start a home delivery business for natural water.

We plan to operate a water sampling plant in Fujiyoshida City, Yamanashi Prefecture, and promote contract acceptance and logistics utilizing the Group's sales channels, aiming to return to profitability within five years of the start of operation. We plan to operate this project in collaboration with the local community, where we want to help our customers' lives by providing delicious and safe water.

Accelerating sustainability management

Lastly, we established the Sustainability Promotion Office on April 1st, and established the Purpose of Bic Camera, "Being a living support company that is useful for our lives as a purchasing agent for our customers."

Purpose / Corporate Philosophy / Corporate Mission / Corporate Commitment / Action Philosophy

We have already established our corporate philosophy, corporate mission, commitment and action philosophy as the basis of our management strategy, but in recent years, as represented by ESG and SDGs, companies have become a public institution of society. In addition to growth, that is, economic value, we believe that sustainable growth by pursuing solutions to social issues and social value on the same axis is becoming an irreversible trend.

At the same time, we must respond swiftly and innovatively to changes in the business environment surrounding our company and changes in the axes and scales by which companies are evaluated.

Therefore, in an era of drastic changes that are difficult to predict, we have established the purpose of existence of Bic Camera, which is needed by society at any time, and established Purpose and why it exists, and continue to evolve along Purpose without any era. I believe that is the heart of governance.

With the above, I would like to conclude my explanation. thank you for your attention.