ミズノ株式会社. MIZUNO Corporation. The 97th Period (Year ended March 31, 2010)

Transcription

1 ミズノ株式会社 MIZUNO Corporation 2nd Quarter Financial Report The 97th Period (Year ended March 31, 2010) This report includes forecasts based on our assumptions, outlook and plans for the future as of November 12, 2009, which may substantially differ from the actual results due to risks and uncertainties relating to the global economy, competitors' situations, changes in exchange rates, etc. 1/22

2 Contents Q2 FY09 Business Results Progress of Current Business Tasks Business Status for the Period Regional Highlights FY09 FY11 Medium-Term Plan 2/22

3 Income Statement decreased due to shrinkage in golf product sales and also had a negative impact from exchange rate fluctuation. Net income declined despite reduction of fixed costs (ad expenses, etc.) FY08-2Q (6 months) FY09-2Q (6 months) Versus % Gross margin % Gross margin ratio 41.9% 40.7% -1.2P SG&A expenses % SG&A expenses ratio 37.8% 37.9% -0.1P Salaries and bonus % A&P expenses % Operating profit % Operating profit ratio 4.1% 3.0% -1.1P Ordinary profit % Ordinary profit ratio 3.5% 3.2% -0.3P Net income (Loss) % JPY/1 USD JPY/1 GBP JPY/1 EUR /22

4 Balance Sheet Inventory reduction progressed in major consolidated companies. This, along with the debt reduction, contributed to higher asset efficiency. September 30, 2008 September 30, / - Total assets Cash and cash equivalents Accounts receivable Inventories Fixed assets Investment in securities Deferred tax assets Total liabilities Short-term debt Long-term debt Other liabilities Net assets /22

5 Q2 Accumulated Total Outline of Business Results Summary of financial results Versus previous year JPY 76.2 billion 8.5 billion ( 10.1%) Impact of exchange rate fluctuations Increase/decrease excl. impact of exchange rate fluctuations 3.3 billion ( 4.0%) 5.2 billion ( 6.1%) Sales of golf items ceased falling in Europe, though the decrease continued in the Americas and Japan. Growth in footwear sales slowed due to a decline in average unit prices. Substantial sales decrease in China also had a negative impact. Operating profit JPY 2.2 billion 1.4 billion ( 34.0%) Due to the impact of decreased unit prices resulting from reduced inventory, etc., gross margin ratio fell 1.2% from the previous year. Due to the effect of cutbacks on fixed assets (advertising expenses, etc.), sales, general and administrative expenses maintained the previous year s level. Ordinary profit JPY 2.4 billion 0.5 billion ( 17.2%) Exchange rate losses from yen translation of European branch assets, etc. (Current term end: JPY/GBP, JPY/EUR; Previous term end: JPY/GBP, JPY/EUR) Net profit JPY 0.9 billion 0.4 billion ( 31.8%) Loss from write-downs of securities, etc. (0.17 billion yen) as extraordinary loss 5/22

6 Revenue Increase/Decrease Analysis by Region by region without impact of exchange rates, and the impact of exchange rates 84.7 of FY08-2Q (6 months) Japan Incl.export -2.2 billion (96.2%) FY2009-2Q FY2008-2Q +0.4 billion (106.5%) Europe billion (86.7%) -1.7 billion (73.8%) Japan: Affected by decreased sales of golf items, decline of average unit prices of footwear, etc. Europe: decreased due to impact of exchange rate despite growth in golf items, footwear and apparel Americas: Affected by decreased sales of golf and baseball items and decline in footwear unit prices Asia/Aus:Sales decreased substantially partly due to receipt of distributed stock resulting from elimination/consolidation of China stores* (* Franchise stores switching to direct-control stores, etc.) Japan Incl.export Americas Asia/Aus Impact of Exchange rate -3.3 billion 4.4 Europe Americas 12.6 Europe: -1.6 Americas: -1.2 Asia: -0.5 Asia/Aus of FY09-2Q (6 months) FY08-2Q (Unit: JPY billion) FY09-2Q 6/22

7 Revenue Increase/Decrease Analysis by Product Increase/decrease in consolidated revenues by product, including impact of exchange rate 84.7 of FY08-2Q (6 months) Baseball goods incl. shoes, wear -0.9 billion (95.8%) -2.3 billion (86.3%) billion (89.3%) Apparel, footwear Europe: Marked a decrease due to impact of exchange rates despite increase on a local currency basis. Japan: Average unit prices fell. China:Sales decreased greatly. FY2009-2Q billion (78.7%) Baseball Sporting apparel Sporting footwear Golf Others FY2008-2Q Sporting Apparel Sporting Footwear Golf goods incl. shoes, wear 15.0 Golf items Europe: Others -0.4 billion (97.5%) 14.9 Marked a decrease due to impact of exchange rates though a steady level was maintained on a local currency basis. Japan, Americas: Sales decreased, average unit prices declined of FY09-2Q (6 months) FY08-2Q (Unit: JPY billion) FY09-2Q 7/22

8 Major Financial Indexes Efforts to improve efficiency (Defense) in the shrinking phase including asset reduction have achieved specific results. Tasks now include setting up growth strategies (Attack) to create high added value (explained in later pages). FY08-2Q FY09-2Q + / - Return on Asset (ROA) 2.6% 1.9% -0.7P Return on equity (ROE) 1.7% 1.2% -0.5P Shareholder s equity ratio 60.4% 60.4% - Earnings per share (EPS) Book-value per share (BPS) Price book-value ratio (PBR) Price at the end of this period Dividend payout ratio 45.7% 66.8% +21.1P 8/22

9 Current Business Tasks 1/3 Progress in golf business reforms Market trends Player population leveling off Unit sales prices declining Replacement cycles getting longer Continue efforts to improve functionality. Procure high-performance products at low prices. Review costs in design stage. Strengthen sales of irons. Enhance Custom Fitting. Increase business efficiency. Cut costs. Reduce inventory. Reduce SKUs. Establish Global Golf Planning & Development Center (July 2009). Integrate all processes from development to just before mass production. Focus on development of global models. Strengthen Custom Fitting worldwide. Europe & US: Introduce new fitting systems. Japan: Launch Custom Fitting approach in cooperation with large-scale golf retailers. Status of cost-cutting/inventory reductions (based on internal management data) Expenses (consolidated): 82%, year-on-year Inventory amount (consolidated): 80%, year-onyear Golf will be an Olympic event in Expectation is rising toward invigorating golf as a competitive sport. 9/22

10 Current Business Tasks 2/3 Tasks in Chinese market development and future actions Market trends Chinese domestic brands' share is expanding. Market continues with excess inventory. Uncertain whether player population will increase. 10/22 For the time being, put more emphasis on securing profits by improving gross margin ratio and cost cuts, rather than expanding sales. Implement thorough inventory control. Improve operational efficiency of existing stores. Reduce sales, general and administrative expenses. Seek higher functionality. Differentiate from local brands. Establish a brand image as the "brand loved by players." Responses to excess inventory Disposal of accumulated inventory from previous period is completed. Compared year-on-year. Scrap & Build stores End of December 2008: 903 stores End of June 2009: 731 stores (Stores: New: 34, Closed: 206) Marketing activities Start trial sale of "BIO GEAR," highfunctional underwear series. Hold trial hitting events in various locations mainly for forged irons. Hold badminton competitions in major cities.

11 Return to proper inventory levels. Current Business Tasks 3/3 Inventory Early disposal of accumulated stock Enhancement of purchasing control /9E 08/3E 08/9E 09/3E 09/9E Ending Balance Inventory turns Inventory Turns Cut JPY 4.5 billion from year-on-year total. Improvement of gross margin ratio is expected from Q3 FY09. FY08-Sep Delta FY09-Sep Japan Europe Americas Asia/Aus Adj Total Inventory Turns: Net Sales / Ave.(Beginning balance + Ending Balance of Inventory) 11/22

12 Business Status for the Period Technology/Product Development To become a brand that continues creating added value, backed by high product development capacity [Design] Soccer shoes: Dual functions available for both spinning and non-spinning kicks. "Wave Ignitus MD - Improved control realized by a unique material, Bio control panel. Golf clubs: 45 trajectory patterns realized. "MP movable weights combined to enable easy setting of the best trajectory. [Materials] Artificial shuttlecock: aerodynamic structure + durability "NS300" - Shuttlecock made with artificial feathers to increase durability [Technology] Soft iron forging technology: realized incomparable hitting feeling "MP Series Iron - researched relation between hitting feeling and sound at hitting 12/22

13 Business Status for the Period Technology/Product Development To become a brand that continues creating added value, backed by high product development capacity [Evolution] Mizuno MP Series golf balls: quality performance for professional use "MP 801" & "MP 801X" - long distance and improved control by Mizuno s original cross core technology and new outside coating material [Comfort] 30% higher heat retention: heat generating material + heat reflecting material "Mizuno BREATH THERMO DOWN x REFLECTION GEAR Lightweight Jacket" [Health] New products that take advantage of our R&D capacity "Bio Gear Shisei Navi" - well-balanced standing position "PuShutto - Pelvic exercise cushion [Environment] Environment-conscious products: Mister Donut Shop uniform "Semi-permanently recyclable - Teijin's polyester recycle system "Mizuno's original DF cutting structure - Cutting technique enabling smooth moves 13/22

14 Business Status for the Period Marketing Mizuno Victory Clinic, a grassroots sales promotion strategy Training workshops with instruction by major players for junior/amateur players - For various sports Soccer, walking, track-and-field, baseball, softball, etc. - Development of fans through enhancement of gatherings with users Use of advisory staff and corporate players' networks "Promotion of sports," Mizuno's strength and origin workshops were held between April and September 2009 (164 workshops in the same period of the previous year) Plans to hold 470 workshops annually Running Marketing Offer test ride opportunities to allow customers to actually feel the performance and comfort - US: Run With US Campaign - Europe: Measure Up Campaign - Japan: Running Comfort Provision Base 14/22

15 Regional Highlights Global Business Unit (global strategic decision-making unit) Q2 FY09 Sales outline (growth rate year-on-year) based on local currency without currency translation influence Increasing more than 5% -5% through 5% Japan Europe Americas Asia/Australia Decreasing more than 5% Baseball products Racket Sports, Judo and others Diamond Business Sports apparel Sports footwear Others Footwear & Apparel Business Golf products Others Golf Business Wellness, Walking Swimming Others Wellness Business 15/22

16 Regional Highlights Japan Summary of results FY09-Q2 (6 months) Results by business vs FY08 Total % Operating profit Footwear & Apparel % (Unit: JPY billion) Diamond % Golf % (incl. Export to Asia) Wellness % (For the wellness business, due to internal organizational changes, figures obtained were derived by adjusting sales figures for the same period of the previous year.) Operating Profit Others FY09-Q2 Results Footwear & apparel business: Despite increased footwear sales, greatly affected by decline in unit sales price Golf business: Responded to shrinking market through cost cutting and inventory reduction Wellness business: Sales of walking shoes leveled off Exports: Exports to Korea were stagnant Future actions/outlook Diamond sports business: Full-scale launch of new brand (Global Elite) Golf business: Continue enhancement of iron sales through cooperation with largescale golf retailers on Custom Fitting. Exports: Exports to Korea are likely to recover. 0 FY05 FY06 FY07 FY08 FY09 0 Note: Results by business are based on in-house controlled data. 16/22

17 Regional Highlights Europe Summary of results FY09-Q2 (6 months) Results by business 17/22 vs FY08 Currency neutral basis Operating profit Total % 107% Footwear & Apparel % 109% Golf % 100% FY05 FY06 FY07 FY08 FY09 (Unit: JPY billion) Operating Profit FY09-Q2 Results Overall: Sales without currency translation influence exceeded those of previous year. Purchasing costs increased due to strong USD and weak GBP. Footwear & apparel business: Recognition of high-function running shoes stabilized in the market, resulting in sales increase. Golf business: Marked good results in British and Scandinavian markets thanks to fine reputation for new products. Future actions/outlook Footwear & apparel business: Make effective use of Mizuno Running Series and introduce equipment for trial rides, with the aim of further sales expansion. Golf business: Introduce new fitting system to strengthen sales of irons. Note: Results by business are based on in-house controlled data.

18 Regional Highlights Americas Summary of results FY09-Q2 (6 months) Results by business vs FY08 Currency neutral basis 18/ Total % 87% Operating profit Footwear & Apparel % 97% 13.5 Diamond % 90% (Unit: JPY billion) 9.7 Golf % 71% Operating Profit FY05 FY06 FY07 FY08 FY FY09-Q2 Results Footwear & apparel business: decreased slightly from previous year due to impact of decline in unit sales price, etc. Diamond sports business: were lower than previous year because purchasing was limited by the supplier side. Golf business: Shrinking trend in the iron market continued, causing stagnant sales. Gross margin ratio declined due to disposal of accumulated inventory. Other: Costs for starting new distribution warehouse increased. Future actions/outlook Footwear & apparel business: Continue grassroots sales promotion activities such as Run With US campaign, to increase recognition for our brands. Promotion event for Breath Thermo products in Vancouver is planned. Golf business: Return inventory levels to normal. Aim to improve sales/gross margin ratio by launching new products and introducing new fitting system. Note: Results by business are based on in-house controlled data.

19 Regional Highlights Asia, Australia (excl. exports from Japan) Summary of results FY09-Q2 (6 months) Results by business vs FY08 Currency neutral basis Total % 74% Operating profit 5.0 Footwear & Apparel % 73% Diamond % 106% (Unit: JPY billion) 4.4 Golf % 95% Operating Profit FY09-Q2 Results China: Sales unit price and gross margin ratio dropped due to early inventory reduction. Taiwan: Both sales and profits exceeded those of previous year. Production: Production management fees decreased along with inventory reduction at sales companies. Future actions/outlook China: Promote inventory reduction as planned. From next fiscal year, focus on improving gross margin ratio instead of expanding scale, to recover performance. Australia: From FY10, start sales of various sports items including mainly running shoes, in addition to golf items. Production: Implement China + One production base policy, to reduce manufacturing costs and diversify risks FY05 FY06 FY07 FY08 FY09 19/ Note: Results by business are based on in-house controlled data.

20 FY09 FY11 FY11 Medium-Term Plan /Ordinary profits Medium-term plan released in May 2009 Ordinary profits Ordinary Profit FY07 FY08 FY09 Forecast FY10 Plan FY10 Plan 0 JPY-1USD Planned Rate for FY09 JPY-1GBP (using the same rate for FY10-FY11) JPY-1EUR /22

21 FY09 FY11 FY11 Medium-Term Plan Revenue breakdown Medium-term plan released in May By By business business % Non-Japan Non-Japan revenues revenues (ratio (ratio of of non-japan non-japan revenues) revenues) 31.1% % % % FY07 FY08 FY09 Forecast FY10 Plan FY11 Plan 0 FY07 FY08 FY09 Forecast FY10 Plan FY11 Plan Wellness Golf Diamond Footwear&Apparel Americas Europe Asia/AUS Asia(Export) Note: in Europe include some exports from Japan to Europe. 21/22

22 Closing Attack & Defend Under our business slogan for fiscal 2009, "Attack & Defend," we devoted all our efforts to defensive actions in the first half of this year. For the latter half of the year, though the market is still in a sluggish trend, we will take aggressive actions for growth (attack) by launching attractive products and implementing Mizuno's characteristic marketing activities. Company Policies for Fiscal 2009 Be Flexible and Push Through Be Creative and Unique Take Action with Guts 22/22