Management Integration between Doutor Coffee and Nippon Restaurant System. April 26, 2007

Transcription

1 Management Integration between Cfee Nippon Restaurant System April 26, 2007 Cfee Co., Ltd. Nippon Restaurant System Inc.

2 Contents 1. Background Management Integration 2. Purpose Management Integration 3. Basic Management Policies for Integration 4. Company Descriptions 5. Positioning in Restaurant Industry after Integration 6. Management Objectives 7. Strategies for Holding Company 8. Synergies anticipated from Management Integration 9. Schedule for Stock-Transfer 10. Structure Management Integration 11. Outline Holding Company 12. Directors Auditors 13. Time Schedule for Integration

3 Background Management Integration Changing environments surrounding two companies Situation restaurant industry Declining Declining size size domestic domestic market market Companies Companies from from or or sectors sectors foreign foreign companies companies entering entering market market Reorganization Reorganization industry industry increased increased number number mergers mergers acquisitions acquisitions Consumer trends Increased Increased awareness awareness for for safety safety health health Consumers Consumers becoming becoming more more more more selective selective Increased Increased preference preference for for convenience convenience Social economic situations Aging Aging declining declining population population Changes Changes in in population population structure structure Widening Widening gap gap between between social social classes classes Only a small number companies with high competitiveness can survives New values to be created by integration Cfee Nippon Restaurant System, two strong companies in areas drinking eating

4 2. Purpose Management Integration

5 3. Basic Management Policies for Integration

6 4. Company Descriptions (1/2) Cfee Cfee Nippon Nippon Restaurant Restaurant System System Fiscal Fiscal Term Term March March May May Sales Sales Ordinary Ordinary Income Income Ratio Ratio Ordinary Ordinary Income Income to to Sales Sales Total Total Assets Assets billion billion yen yen billion billion yen yen billion billion yen yen Number Number Employees Employees Number Number Stores Stores 1,470 1,470 Number Number Store Store Formats Formats 6 Main Main Format Format Cfee Shop Shop billion billion yen yen billion billion yen yen billion billion yen yen Youmenya Goemon Figures Figures after after integration integration (Simply (Simply added added results results two two companies) companies) billion billion yen yen billion billion yen yen 11.0% 11.0% billion billion yen yen 1,745 1,745 1,788 1,788 Drinking Drinking & Eating Eating 40 40

7 4. Company Descriptions (2/2) Cfee Sharing management resources know-how Nippon Restaurant System A leading company in in café caféindustry Store Store capability capability using using franchise franchise system system Accumulated Accumulated know-how know-how to to manage manage franchise franchise Self-contained Self-contained business business model model Maintains Maintains quality quality products products by by completing completing procurement procurement roasting roasting process process on on its its own own Strong Strong br br recognition recognition in in Japan Japan Cfee Cfee has has sales sales network network throughout throughout Japan, Japan, number number people people who who use use Cfee Cfee Shop Shop has has reached reached as as many many as as million million per per year year Highly Highly pritable pritable management management by by accumulated accumulated know-how know-how restaurant restaurant business business Br Br capability capability Multiple Multiple br br having having Youmenya Youmenya Goemon Goemon as as core core br br Self-contained Self-contained system system Has Has self-contained self-contained system system where where it it carries carries out out procurement, procurement, processing processing distribution distribution food, food, designing designing maintenance maintenance on on its its own own Selective Selective locations locations The The are are located located in in large large cities cities with with population population higher higher than than 1 1 million, million, near near train train stations stations

8 5. Positioning in Restaurant Industry after Integration Source Financial reports (FY2005) listed companies classified as Restaurants by NOMURA Sector Classification System

9 6. Management Objectives Aiming to become an Excellent Leading Company in Japanese restaurant industry Expected Mid-Term Goals (FYE Feb 2011) Sales 110 billion yen 120 billion yen Ordinary Income 14 billion yen 15 billion yen The three-year business plan after integration is expected to be completed before March Creation active investment opportunities for furr growth Establishment restaurant industry as a system industry Aiming for overseas opportunities as a Japanese Br

10 7. Strategies for Holding Company Multi-Br Strategies Enhance pritability (fense) avoid risk (defense) in order to realize stable business operations Store taking advantage synergies brought about by combination business capability franchise know-how Development a new business model by combination drinking eating Restructuring existing brs by sharing two companies know-how

11 (Reference) Multi-Br Strategies Lifecycles brs <Growing phase> <Establishment phase> Innovative Shop Development Restructuring brs New Format New Model <Developmental phase> <Transition phase>

12 8. Synergies anticipated from Management Integration Growth Synergies New New Business Business Development Development Store Store Development Development Store Store Operation Operation New New format format New New business business model model Suburban Suburban model, model, Complex Complex model model Expansion Expansion store store locations locations (1 st (1 st floor, floor, 2 nd 2 nd floor, floor, basement, basement, road road surface) surface) Sharing Sharing information information regarding regarding properties properties Restructuring Restructuring underperforming underperforming Develop Develop franchisees franchisees to to open open formats formats which which used used to to operate operate only only in in directly-operatedshops directly-operatedshops Sharing Sharing operational operational know-how know-how Expected Synergy Effect as FYE February 2011 Ordinary Income 2-4 billion yen Cost Synergies Product Product Related Related Control Control Functions Functions Cooperative Cooperative products products Cooperative Cooperative procurement procurement ingredients ingredients Sharing Sharing logistics logistics centers centers Sharing Sharing indirect indirect functions functions Enhancement Enhancement human human resources resources (recruiting (recruiting as as a a new new group, group, sharing sharing training training programs) programs) Centralization Centralization management management through through system system integration integration

13 9. Schedule for Stock-Transfer April 26, 2007 Execution Basic Agreement (both companies). Late May, 2007 (planned) Board Directors meetings to approve Definitive Agreement Stock-Transfer Plan (both companies). June 28, 2007 (planned) Shareholders meetings to approve Stock-Transfer Plan (both companies). October 1, 2007 (planned) Effective date Stock-Transfer (Date registration incorporation Holding Company) October 1, 2007 (planned) Date listing Holding Company

14 10. Structure Management Integration Jointly incorporate a Holding Company on October 1, 2007 by means stock-transfer Stock-Transfer Ratio; Cfee 1 : Nippon Restaurant System Current Situation 2. Stock-Transfer 3. After Stock- Transfer Shareholders NRS Shareholders Shareholders NRS Shareholders Shareholders NRS Shareholders NRS Shares Holding Company Shares Holding Company Shares Holding Company NRS Shares Holding Company NRS NRS

15 11. Outline Holding Company Name Name Location head head fice fice Expected date date incorporation Account Settlement Stock Stock Exchange Chairman Nichires Holdings Inc. Tentative name, name, TBD NRS NRS Bldg., Bldg., 10-11, 10-11, Sarugaku-cho, Shibuya-ku, Tokyo Tokyo October 1, 1, (planned) End End February Tokyo Tokyo Stock Stock Exchange Hirumi Ohbayashi Chairman, Nippon Restaurant System Inc. President Yutaka Toriba President, Cfee Co., Co., Ltd.

16 12. Directors Auditors Board Directors (Current Positions) Chairman Hirumi Ohbayashi Chairman, Nippon Restaurant System Inc. President Yutaka Toriba President, Cfee Co., Ltd. Director Minoru Yamauchi President, Nippon Restaurant System Inc. Director Masanori Hoshino Vice President, Cfee Co., Ltd. Director Rokuro Inamori Managing Director, Cfee Co., Ltd. Director Takafumi Kidaka Director, Nippon Restaurant System Inc. Auditors 2 full time auditors will be appointed upon consultation both companies 2 external auditors will be appointed upon consultation both companies Mr. Hiromichi Toriba, current Honorary Chairman Cfee is expected to be appointed Honorary Chairman Holding Company.

17 13. Time Schedule for Integration Basic Agreement Approval shareholders meeting A preparation committee to be set up Incorporation Holding Company Promotion Group s 3-year business plan Early realization synergy effects integration Promotion integration led led by by study study groups Consolidation basis basis for for growth Accelerated growth

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