Results Briefing for the Fiscal Year Ended March 31, 2015

Transcription

1 Results Briefing for the Fiscal Year Ended March 31, 2015 May 14, 2015 (Thu.) Representative Executive Officer, President: Akira Yamaguchi Corporate Executive Vice President: Yasuhiko Kumojima Executive Officer: Konosuke Miyakawa

2 Disclaimer regarding this Document This document was prepared in English for convenience purposes only. The original Japanese document shall take precedence in the event of any discrepancies arising from the translations or interpretations contained in this document. The current plans, outlook, strategies, etc., of the Company contained in this document that are not historical facts are forward-looking statements regarding future performance, and are based on the judgment of the Company derived from the information currently available to the Company. Accordingly, we ask that readers do not place undue reliance on these forwardlooking statements only. Please be aware that actual performance may differ materially from these forward-looking statements due to various important factors arising from changes in the external environment and internal environment. Factors that could cause results which differ from these forward-looking statements are contained in the Risk Factors section of the Annual Securities Report the Company submits to the Director of the Kanto Local Finance Bureau, but they are not limited to only these factors. Furthermore, the only purpose of this document is to provide information; it does not have the purpose of soliciting or recruiting investment in the securities issued by the Company. 1

3 Overview of Fiscal 2014 Results 2

4 Overview of Fiscal 2014 Results Increases in operating income and ordinary income In new condominium sales, despite a decrease in revenues largely due to sales activities that placed the highest priority on securing appropriate profits, operating income and ordinary income both increased as a result of an improvement in the gross profit margin for condominium sales mainly due to a positive contribution to earnings from Anabuki Construction Inc. Net income decreased due to such factors as a gain on negative goodwill in the previous fiscal year. (Billions of yen) Fiscal 2014 result Fiscal 2013 result Comparison to previous year Fiscal 2014 target Net sales (16.6) Operating income Ordinary income Net income (8.6) 13.5 Dividends Fiscal 2014 result 3 yen Note: Changes made to accounting policies effective from the fiscal year under review have been retrospectively applied to figures for the previous fiscal year. 3

5 Overview of Fiscal 2014 Results by Segment Real estate development and sales (Billions of yen) Fiscal 2014 result Fiscal 2013 result Comparison to previous year Fiscal 2014 target Net sales (22.0) Operating income Real estate management Real estate brokerage Eliminations or corporate assets/expenses Consolidated Net sales (0.1) Operating income (1.3) 9.2 Net sales Operating income Net sales (3.4) (3.8) +0.3 (3.5) Operating income (3.1) (3.0) (0.1) (3.1) Net sales (16.6) Operating income Note: Changes made to accounting policies effective from the fiscal year under review have been retrospectively applied to figures for the previous fiscal year. 4

6 Real Estate Development and Sales Overview of Fiscal 2014 Condominium business The number of units sold decreased due to sales activities that placed the highest priority on securing appropriate profits, however income increased substantially year on year due to Anabuki Construction s positive contribution to earnings that had been limited in the previous fiscal year, and also due to an improvement in the gross profit margin for condominium sales Maintained ongoing stance of tightening profitability criteria applied to land acquisitions Condominium units delivered and gross profit margin (Units) Condominium units delivered Gross profit margin Operating income and operating margin (Billions of yen) Operating income Operating income ratio 21.3% 24.7% 8.4% 5.5% 3,790 3, Fiscal 2013 Fiscal 2014 Fiscal 2013 Fiscal 2014 Note: Changes made to accounting policies effective from the fiscal year under review have been retrospectively applied to figures for the previous fiscal year. 5

7 Property Management : Real Estate Management Segment Overview of Fiscal 2014 Steadily increased condominium management supply and annual contracted sales of buildings and facilities Number of condominium units under management (Units) Annual contracted sales of buildings and facilities (Billions of yen) 516, , Increase by 9,473 units Increase by 0.7 billion As of Mar 31, 2014 As of Mar 31, 2015 As of Mar 31, 2014 As of Mar 31,

8 Contract Work : Real Estate Management Segment Overview of Fiscal 2014 Sales for building and facility-related work increased, but sales for condominium repair, maintenance, remodeling work and other services decreased An increase in the balance of building and facility-related work greatly contributed to the volume of contract work orders Sales of contract work (Billions of yen) Breakdown in volume of contract work orders (Billions of yen) Planned renovation and large-scale repair and maintenance work Small-scale repair and maintenance work Remodeling Building and facility-related work 67.9 billion 66.2 billion 31.4 billion billion Increase by billion Fiscal 2013 Fiscal 2014 As of Mar 31, 2014 As of Mar 31,

9 Real Estate Brokerage Overview of Fiscal 2014 Real estate brokerage and existing real estate sales Real estate transactions (trading and brokerage) decreased in number, but condominium units delivered increased substantially to over 1,000 units Number of trading and brokerage transactions (retail) and commission rate (Cases) Number of trading and brokerage transactions Commission rate 5.0% 5.0% Number of existing condominium units delivered and gross profit margin (Units) Number of units delivered Gross profit margin 20.3% 20.3% 6,432 6, ,056 Increase by 229 units Fiscal 2013 Fiscal 2014 Fiscal 2013 Fiscal

10 Operational Policies 9

11 Daikyo Thus Far (1) Fundamental strategy Double-pillar stock and flow businesses style of management Expansion of the stock business Stock business net sales billion (fiscal 2009) Approx billion (fiscal 2014) Ratio of stock to flow of 4:6 (fiscal 2009) 6:4 (fiscal 2014) Note: Calculations based on simple sum of segment revenues In the flow business, promoted business ventures that conserve funds and enable high turnover, with emphasis on profitability Emphasis on volume Emphasis on profitability on a per-project basis Concentrated business resources on the 3 major metropolitan areas Consequently, achieved 24.7% gross profit margin for condominium sales for fiscal 2014 Average over the last 3 years exceeding 21% Stable cash flows Average operating income over the last 3 years of 19.0 billion Strengthened the financial base Shareholders equity ratio of 26.4% (fiscal 2009) 48.2% (fiscal 2014) 10

12 Daikyo Thus Far (2) Reinforcement of the stock base along with acquisition & reorganization of resources Took steps to expand the real estate management business through aggressive acquisitions and integrated business to streamline operations In the construction business, made acquisitions with the aim of gaining resources (capabilities and human resources), and pursued reorganization geared toward sharing expertise and enhancing purchasing strengths In the real estate brokerage business, through reorganization efforts, built a network to provide coverage of major cities nationwide 再編前 <Before> Anabuki 穴吹コミュニティ Inc. Most recent key reorganization initiatives Building マンション管理 management/construction ビル管理 工事 Construction 建築 工事 work 流通 Condominium management Community グランド Grand アメニティ Ltd. amenity, オリックス ORIX Daikyo ファシリティーズアペックス和光 APEX Anabuki Facilities construction 大京建設穴吹建設大京リアルド Corporation Construction WAKO incorporated DAIKYO REALDO INCORPORATED Brokerage business 穴吹不動産 Anabuki Real Estate Center センター Inc. アセットウエーブ ASSET WAVE 再編後 穴吹コミュニティオリックス ファシリティーズ大京穴吹建設大京穴吹不動産 <After> Anabuki Community Inc. ORIX Facilities Corporation Daikyo Anabuki Corporation DAIKYO ANABUKI REAL ESTATE INCORPORATED Concluded resource reorganization initiatives leveraging consistent profitability and the financial base Wrapped up preparations geared toward a new stage of growth 11

13 Steps Being Taken to Achieve Growth by Leveraging Group Strengths Network of major cities nationwide Prefectures covered: 47 Population of target cities: 300,000 Business locations: 240+ Overseas expansion: 3 countries Ample funds on the basis of stable cash flows + Extensive customer base Condominium associations: Approx. 9,500 Condominiums managed: 520,000+ households Facilities managed (Buildings & commercial facilities, etc.) : Approx. 5,900 Construction capabilities tailored to customer needs Engineers: 1,300+ Construction and contracting results New condominiums: Approx. 1,400 units cumulative total (Anabuki Construction) Large repair and maintenance work: 5,000 units cumulative total Fundamental strategy going forward Investment of ample funds resulting in concurrent growth of "flow" and "stock" businesses I. Diversify investment targets by drawing on real estate information II. Tap revenue opportunities by expanding customer touch-points III. Leverage construction capabilities and enter external markets 12

14 I 1. Diversify Investment Targets by Drawing on Real Estate Information Effective use of information on land and buildings With new condominiums, secure a constant volume of business while diversifying investment in all types of real estate Flexibly expand businesses in areas offering a favorable supply-demand balance, considering the business environment and other factors Land for condominiums 1,000 Information on land & buildings 10,000 Untapped information Approx 38,000 Sales inquiries 40,000 Acquisitions for real estate brokerage 10,000 Acquisitions for renovation and sales 1,200 Diversification of investment targets and methods Examples Serviced housing for senior citizens Rental condominiums and apartments Shared residences Income properties Possibilities for future sale to REITs Uses in solutions businesses Examples Propose land brokerage + construction solutions Commercial buildings and retail store brokerage Leasing management and leasing brokerage Customer matching business 13

15 I 2. Examples of Leveraging Information (Japan) Employee housing of large corporations restored as shared residences Make proposals for increasing value of idle real estate Combine group resources and expertise Development + Brokerage & leasing management Social Residence Kichijoji Launch sales of multipledwelling urban housing Make effective use of small, irregularlyshaped parcels of land in urban locations Make proposals to owners of idle land Inheritance tax measures + Lease management support Faubourg Square Series Entrance Kitchen Conceptual image of exterior 14

16 I 3. Further Expansion of the Real Estate Brokerage Network Continue opening new brokerage branches with the aim of expanding earnings Develop a new sales network, acquire all types of real estate information, and use it effectively branches (28 prefectures) Expansion of retail network & increased customer responses More than branches thousand customer responses /3 期末 14/3 期末 15/3 期末 20/3 期末 As of Mar 31, 2013 As of Mar 31, 2014 As of Mar 31, 2015 As of Mar 31, 2020 DAIKYO 大京リアルド REALDO 穴吹不動産センター合計 Total INCORPORATED Anabuki Real Estate Center Inc. 15

17 I 4. Expansion of Renovated Condominium Sales Focused business expansion away from areas where there is a large supply of Lions Mansion and Surpass Mansion Slightly less than 20% of business captured within annual brokerage volume as estimated from stock managed by the Daikyo Group Rapidly establish a framework of 2,000 units by drawing on the retail store network s coverage of major cities nationwide Fortify capacity for sales nationwide with launch of Daikyo Anabuki Real Estate Over 2,000 units Set up Renoα 24/7 telephone support Begin expansion of Renoα ,056 Fiscal 2010 Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal /3 期 12/3 期 13/3 期 14/3 期 15/3 期 20/3 期 16

18 I 5. Expansion of the Renovation Business Embark on opportunities with home renovation, using brokerage and existing customer touch-points in the real estate sales business Size of the renovation market Expand target for renovation work 7.2 trillion trillion Real estate brokerage Existing real estate sales Renovations Condominiums Houses 2015 年 年 戸建 Houses マンション Condominiums 17

19 I 6. Examples of Leveraging Information (Overseas) More aggressively pursue overseas business expansion Alliance with ORIX Condominium development: Australia & Taiwan Judgment criteria for commercialization same as that used in Japan 1. Stringent revenue benchmarks 2. Duration business venture around 2 to 3 years 3. Size of development around 100 to 200 units Accommodating demand from overseas investors: Hong Kong & Taiwan Offer one-stop total services within the Daikyo Group 1. Real estate brokerage + leasing management 2. Sales of renovated condominiums + leasing management 3. Sales of rental condominiums + leasing management Australia Hong Kong Taiwan 18

20 II 1. Quantitative Expansion of Customer Touch-points (condominium management) Address needs in the market involving switch-overs from self-management by making proposals involving arrangements for partial management Number of condominium units managed: 520,000 units 650,000 units (2020) (Breakdown of condominium management market) ストック戸数 Cumulative number of condominiums supplied 2014 in Japan 年 (2014) 6,000,000 units 600 万戸 Of which, new supply of 120,000 units 93.7% 管理会社の Market for real estate management 受託市場 company services 5,622,000 units 万戸 うち新規供給 6.3% 12 万戸自主管理 Self-management market 市場 3,780,000 units 37.8 万戸 Introduction of emergency services Orders received for Large-scale repair and maintenance work Orders received for remodeling (Reference) Partial and full management Leased units under management Handled by real estate brokerage Maintenance, inspection & security services Source: Condominium Management Companies Association, Survey of Trends in Condominiums Under Management for Fiscal

21 II 2. Quantitative Expansion of Customer Touch-points (building management) Build up order receipts in areas where Daikyo can leverage its expertise and strengths Medical & social welfare facilities, government facilities, solar power facility O&M, hotels and other lodging facilities, etc. Sunny Solar Fukushima Central Plant (26.2 MW) Annual building and facilities management contracts ( billion) 35.0 billion Kansai-kan of the National Diet Library (Kyoto Prefecture) As of Mar 31, 2012 As of Mar 31, 2013 As of Mar 31, 2014 As of Mar 31, 2015 As of Mar 31,

22 II 3. Tap Revenue Opportunities by Improving Quality of Customer Touch-points Develop infrastructure for enabling Daikyo to hear about customer needs and wants Raise quality of customer touch-points for use in pursuing business opportunities 2.5 million entries in Daikyo Group shared customer database Feedback Accumulate customer data No. of households targeted for visits by customer representatives In-person contact Approx 200,000 households Customer touch-points + No. of customer center inquiries Telephone Approx. 240,000 calls + No. of portal website members (Kurashi Square & Surpass Net) Online Approx. 150,000 households Equipment replacement Residents Service Remodeling Sales of interior products Real estate brokerage Leasing management 21

23 III 1. Leverage construction capabilities Making the most of the integrated production-sales business model Business model makes it possible to build condominiums, despite a shortage of construction workers and rising materials costs Key points regarding the Lions Mansion and Surpass brands Create synergies that combine Daikyo s brands and purchasing strengths with Anabuki Construction s construction capabilities and cost competitiveness Combine Lions Mansion and Surpass to deliver both luxury and convenience Provide condominiums that are outstanding in terms of premium quality, low cost and maintenance Examples of joint ventures and contracted construction of condominiums Number Completion Properties Area Type of units schedule Lions Ohorikoen Grand Gate Lions Kashiwa Asahi-cho Surpass Residence Lions Kashiwa Chiyoda Surpass Residence Kyusyu Contracted construction 52 Completed Greater Tokyo Area JV 42 Fiscal 2015 Greater Tokyo Area JV 43 Fiscal 2015 Lions Hijiyamahonmachi Chugoku JV 78 Fiscal 2015 Lions Kamoi Lions Kokutaiji Grand Axis Lions Sasaoka Surpass Residence Lions Shinfunabashi Surpass Residence Greater Tokyo Area Chugoku Contracted construction 99 Fiscal 2016 Contracted construction 82 Fiscal 2016 Kyusyu JV 108 Fiscal 2016 Greater Tokyo Area JV 37 Fiscal 2016 Lions Sasaoka Surpass Residence (first joint project in Kyushu) Developers: Daikyo Incorporated and Anabuki Construction Inc. Design, Construction, Management: Anabuki Construction Inc. 22

24 III 2. Enter External Markets Strengthen the portfolio of work orders for condominiums, buildings and other structures from existing customers, and take a more active approach to serving construction contractors for public facilities and other external markets Net sales from contract work ( billion) Note: Condominium, building and general construction work Over 90.0 billion External market Construction of public facilities Takamatsu City s Municipal Takamatsu Daiichi Elementary School and Takamatsu Daiichi Junior High School Takamatsu City, Kagawa Prefecture Note: Three-company JV for construction Fiscal Fiscal Fiscal Fiscal 12/3 期 13/3 期 14/3 期 15/3 期 Fiscal 20/3 Fiscal 期

25 Investment Policy and Results Forecast 24

26 M&A Results Steady Progress with M&A Centered on the Stock Business Acquired Business Company Sales Building management Condominium management Condominium management Building management ORIX Facilities 32.9 billion (Fiscal 2007) J COMS 4.8 billion (Fiscal 2007) 2012 Condominium management Grand amenity, Ltd. 3.4 billion (Fiscal 2011) Electrical equipment and instrumentation work Developer Condominium management Construction work Real estate brokerage & leasing APEX WAKO 5.2 billion (Fiscal 2011) Anabuki Construction Inc. Non-consolidated: 31.8 billion (FYE Sep, 2012) Five companies: 57.9 billion (FYE Sep, 2012) 2015 Repair work Shuken 1.0 billion (Fiscal 2013) Continue expanding stock business involving management of condominiums, buildings, etc. Increase/fortify construction work resources, expand business involving renovations and resident services, and otherwise actively pursue M&A deals that contribute to higher revenues 25

27 Investment Policy Actively leverage ample funds and stable cash flows Cash and Deposits As of Mar 31, billion Operating cash flow FY2015 FY2019 Aprox. 100 billion Increase revenues in the flow business Effective use of untapped information Accelerated growth of stock business Expand areas of business through M&As Diversification of target investment 26

28 Performance Outlook for Fiscal 2015 (Billions of yen) Fiscal 2015 forecast Fiscal 2014 result Change Real estate development and sales Net sales Operating income (1.2) Real estate management Net sales Operating income Real estate brokerage Net sales Operating income Eliminations or corporate assets/expenses Net sales (5.0) (3.4) (1.5) Operating income (3.3) (3.1) (0.1) Net sales Consolidated Dividends Operating income (0.1) Ordinary income Net income attributable to parent company shareholders yen 27

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