earnings presentation for the third quarter of the fiscal ... · third quarter of the fiscal year...
TRANSCRIPT
Earnings Presentation for the Third Quarter of the Fiscal Year
Ending March 31, 2017
RIZAP GROUP, Inc.
Takeshi Seto, President & CEO
(Stock Code: 2928 on the Sapporo Securities Exchange Ambitious)
March 3, 2017
Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
2Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Today’s Contents
1. Highlights of Consolidated Financial Results for 9 Months Ended December 31, 2016
2. Growth Strategy
① Grow businesses in existing segments② Launch new businesses③ Pursue business partnerships with other
companies④ Step up M&A activities and enhance group
synergy
3Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Highlights of Consolidated Financial Results for 9 Months Ended December 31, 2016
1. Achieved substantial revenue and profit
growth for 4 consecutive fiscal years: Revenues
and operating income were up 70% and 173%, respectively,
from the same period of the year before
2. Made profits in every segment: Apparel and
entertainment businesses turned to profitability
3. Accelerated M&A activities while maintaining
financial soundness
4Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Record-breaking financial performance
Consolidated P/L
(in millions of yen)
9 months ended
12/31/2015
9 months ended
12/31/2016
Year-on-year
changes
(Amount)
Year-on-year
changes (%)
Revenues 38,676 65,726 +27,050 169.9%
Operating income 2,929 8,001 +5,072 273.1%
Pretax income 2,694 7,557 +4,863 280.4%
Net income 1,614 5,199 +3,585 322.0%
Net income attributable
to owners of parent
company1,659 5,081 +3,422 306.2%
5Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Achieved continuous revenue and profit
growth for 4 consecutive fiscal years
Consolidated Revenues and Operating Income
38,676
2014
28,365
2013
15,448
2012
13,435
2016
65,726
2015
Consolidated Revenues Consolidated Operating Income
229
-21
1,402
20132012 2016
8,001
2015
2,929
2014
Up 69.9%
YoY
Up 173.1%
YoY
(in millions of yen)
(For 9 months ended Dec. 31 of each fiscal year)
6Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Revenues by Segment
21,23127,164
6,908
8,9414,734
21,306
6,320
8,929
For 9 months ended Dec. 2015
-518
38,676
-615
65,726
For 9 months ended Dec. 2016
Apparel
Housing-related lifestyle
Beauty and health
Adjustment
Entertainment
(in millions of yen)
Revenues surged
in every segment
7Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Operating Income by Segment
5,808
4,300
979
1,853
-861-647
-362
220
-431
70
For 9 months ended Dec. 2016
8,001
For 9 months ended Dec. 2015
2,929
Adjustment
Apparel
Beauty and health
Housing-related lifestyle
Entertainment
(in millions of yen)
Made profits in
every segment
Apparel and entertainment
businesses turned to
profitability
8Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Operating Income of Group Companies by Business Segment
Apparel business
Loss of67 million yen
Turn to profitability(45 million yen)
Profitable Profit increased
Profitable Profit
Loss Turn to profitability
Profitable Profit increased
Beauty and health business
ProfitableProfit increased
substantially
Profitable Profit increased
Profitable Profit increased
Profitable Profitable
Housing-related lifestyle business
Profit of60 million yen
Profit increased
to 107 million yen
Profit of171 million yen
Profit of35 million yen
Profitable Profitable
Entertainment business
Profitable Profit increased
October-December
Quarter of FY2015
Loss of161 million yen
Loss of375 million yen
Loss of11 million yen
Loss of15 million yen
October-December
Quarter of FY2016
October-December
Quarter of FY2015
October-December
Quarter of FY2016
October-December
Quarter of FY2015
October-December
Quarter of FY2016
October-December
Quarter of FY2015
October-December
Quarter of FY2016
9Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Breakdown of Operating Income
(in millions of yen)
3,192
5,515
-1,650
4,136
9 months ended
December 31, 2015
2,929
-263
9 months ending
December 31, 20179 months ended
December 31, 2016
8,001
Upfront investment and loss from
unprofitable businesses
Profit resulting from discounted
acquisitions through M&A
Operating income from core businesses
Operating income jumped 72% year
on year even with the extraordinary
income from M&A taken out of the
equation
We aim to achieve a
substantial increase in
operating income excluding
extraordinary factors in
FY2017
(Target)
-263
10Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Accelerated M&A activities while maintaining financial soundness
Consolidated Balance Sheets
As of December 31, 2016
(Total assets: 82,574 million yen)
As of March 31, 2016
(Total assets: 53,777 million yen)
Equity
Non-current
liabilities
Current
Liabilities
Non-
current
assets
Current
assets
11,137(20%)
15,344(28%)
27,296(50%)
21,255(40%)
32,522(60%)
(Ratio of equity attributable
to owners of parent
company: 19.0%)
Equity
Non-current
liabilities
Current
Liabilities
Non-
current
Assets
Current
assets
17,501(21%)
26,615(32%)
38,458(46%)
29,283(35%)
53,291(64%)
(Ratio of equity attributable to
owners of parent company:
17.4%)
(in millions of yen)
No significant change in the
ratio of equity attributable to
owners of parent company
11Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Cash flow from operating activities temporarily suffered due
to a strategic decision to build up inventory and aggressive
M&A activities. It is forecasted to return to a normal level by
the end of FY2016.
Cash Flow from Operating Activities
9 months ended
December 31, 2015
9 months ended
December 31, 2016
Year-on-year
changes
Consolidated cash
flow from operating
activities +863 ▲3,896 ▲4,759
① Increase in inventory
(based on a strategic
decision)▲310 ▲2,055 ▲1,745
② Income taxes ▲733 ▲2,572 ▲1,839
Main extraordinary factors
(in millions of yen)
12Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Everything is on track
Business Forecasts for Fiscal Year Ending March 31, 2017
657 343Revenues 100
80 21Operating
income10.1
75 20Pretax
income9.5
66% achieved9 months total
9 months total
9 months total 79% achieved
79% achieved
Full-year forecasts
Note: Rate of achievement = Results in 9 months
divided by full year forecast
(in billions of yen)
65.7
8.0
7.5
34.3
2.1
2.0
13Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Fastest-Growing Companies
Fastest-Growing Companies in Japan
(April to December 2016)
*Source: Nihon Keizai Shimbun (morning
edition of February 23, 2017)
*Excludes financial institutions and companies
listed in TSE JASDAQ or Mothers.
Companies that made 30 billion yen or more
in revenues for April to December 2015 were
tabulated.
CompanyYoY revenue
growth (%)
Revenues
(in billions
of yen)
1Chilled & Frozen Logistics
Holdings Co., Ltd.170.9% 79.2
2 RIZAP Group 169.9% 65.7
3Ono Pharmaceutical Co.,
Ltd.168.0% 188.8
4 Takara Leben CO., LTD. 155.9% 53.7
5 Start Today Co., Ltd. 142.2% 53.6
6 Yahoo Japan Corporation 141.7% 630.9
7Toyo Engineering
Corporation138.9% 304
8 FJ Next Co., Ltd. 138.1% 45.6
9 Daiichi Jitsugyo Co., Ltd. 137.5% 116.1
10 Nissei Build Kogyo Co., Ltd. 134.8% 53.7
RIZAP ranked as
the second-fastest
growing company
in Japan
14Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Today’s Contents
1. Highlights of Consolidated Financial Results for 9 Months Ended December 31, 2016
2. Growth strategy
① Grow businesses in existing segments② Launch new businesses③ Pursue business partnerships with other
companies④ Step up M&A activities and enhance group
synergy
15Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
We prove that “People can
change.”
RIZAP Group Management Philosophy
15Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
16Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
“Become the No. 1 global brand in the
self-investment industry”
Business Domain
Maslow’s hierarchy of needs
Self-
actualization
Esteem
Love/Belonging
Safety
Physiological
“Self-investment industry”
= Business domain of the
RIZAP Group
Focus of our
group
“Necessities industry”
= Outside our business domain
17Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Infinite potential in the self-investment industry
RIZAP’s Target Markets
Healthcare and
beauty care
market
2 trillion yen+Golf
1.4 trillion yen
Sporting goods
and apparel
1.9 trillion yen
Other
lesson market
950 billion yen
English
education
310 billion yen
Business-skill
training
490 billion yen
Sports classes
651 billion yen
Self-investment
industry market
7 trillion yen+
18Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
On track toward achieving our targets
Progress toward Achieving the Targets Established in the
Medium-term Plan “COMMIT 2020”
Consolidated Operating IncomeConsolidated Revenues
(in billions of yen)
554391
FY2020
Target
FY2015
Results
FY2016
Target
FY2014
Results
5021
FY2015
Results
FY2016
Target
FY2014
Results
FY2020
Target
1,000
300 35
100
39.155.4
100
2.1
10
5.0
19Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Four Key Initiatives to Achieve COMMIT 2020
③
Create a new revenue base by
working with other leading
companies
Grow businesses in
Accelerate growth centered on
RIZAP・ Shift to “stack-up management”
・ Expand customer base
Upgrade M&A processes and
pursue greater synergy among
group companies so as to
achieve greater profitability in
every segment
Step up M&A activities and
enhance group synergy① Launch new businesses
Aggressively invest in new
businesses to grow them into
another “RIZAP”
2
3
4
1existing segments
Pursue business partnerships
with other companies
20Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Achieved record quarterly revenues in 3Q of FY2016,even though historically revenues dipped in 3Qs of previous fiscal years
Revenues of the Core RIZAP Business
(億円)
Note: Revenues from RIZAP body-making business and RIZAP-related products and services
58
5148
51
42
33
2528
22
5955
4QFY2014
1Q
3Q 4Q2QFY2015
1Q
2Q 3Q FY2016
1Q2Q 3Q
5.9(in billions of yen)
2.2
2.82.5
3.3
4.2
5.14.8
5.1
5.8
5.5
21Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Cumulative memberships exceeded 70,000
RIZAP Memberships
FY2015 FY2016
(memberships)
65,000
60,000
55,000
50,000
40,000
0
75,000
45,000
70,000
AugJul Jun JanDecNovOctApr May JulMarFeb AugJanDec SepNovOctSep
22Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Reached the 100th store mark,
meeting ever-growing customer needs
New and Existing RIZAP Stores
: Existing
stores
: New stores
Kyodo
120
81
42
10
FY2016
Target
FY2016
Present
FY2015FY2014
110
FY2013FY2012
25
Yoyogi Uehara
Ikebukuro
Higashiguchi
Kasukabe
Nerima
Urawa
*As of March 3, 2017
*Total number of stores inside and
outside Japan
Number of Stores
Odawara
Kitasenju
Ueno
Sasebo
23Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
New Stores
Kitasenju store
Opened Sun. 2/19/2017
Yoyogi Uehara store
Opened Sat. 12/17/2016
Ueno store
Opened Sat. 2/25/2017
Nishinomiya Kitaguchi store
Opened Sun. 11/27/2016
24Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Improved membership renewal and retention rates due
to high customer satisfaction
Membership Renewal Rate and Retention Rate
The retention rate after
12 months of enrollment is up 60%High customer satisfaction
resulted in a higher membership renewal rate
Up 30%
FY2016
As of January 2017
Average
FY2015
2H
Average
FY2015
1H
Average
Membership Renewal Rate (%) Retention Rate after 12 months of Enrollment (%)
Up 60%
January 2017April 2015
25Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Enrollments in Life Support
Program grew substantially,
resulting from improved
membership renewal and
retention rates
Enrollments in Life Support Program
January
2016
April
2016
Up 630%
July
2016
October
2016
January
2017
The Number of Customers Enrolled
in the Life Support Program
26Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
New members acquired through customerreferrals continued to increase
Member Acquisition through Customer Referrals
Percentage of New Members Acquired through Customer Referrals
50
0
Dec
2016
40.8%
Nov
2016
35.3%
Oct
2016
29.3%
Sep
2016
32.6%
Aug
2016
32.0%
Jul
2016
28.0%
Jun
2016
27.0%
May
2016
24.0%
Apr
2016
24.0%
(%)
27Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Enhance relationship
with customers through
a campaign focused on
increasing family
member referrals
Family Member Referral Campaign
28Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
The percentage of sales to
subscribers doubled thanks to
improved customer satisfaction
Product Sales to Subscribers
FY2016
As of Jan 2017 Average
FY2015
Average
16%
32%
Percentage of Products Sold
to Subscribers
29Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
The RIZAP business enters a new growth stage
29Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
30Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Let’s watch a video
“All about RIZAP”
(120-second infomercial for the elderly)
30Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
31Copyright © 2017 RIZAP GROUP Inc. All rights reserved. 31
32Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Elderly market
continues to grow
Aging of Japan
Percentage of Population
Aged 65 and Older
現状
2015 2020
40%
2040
27%
201020001990
12%
2060 *Source: The Aging Society White Paper 2016,
published by the Cabinet Office
Present
33Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
We have been receiving
an increasing number of
inquiries from the elderly
Increased Inquiries from the Elderly
January
2017
January
2016
13%
February 2017
(preliminary)
21%
26%
Percentage of Inquiries
from the Elderly
34Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Increased enrollments of the elderly contributed to revenue growth as they spent more on average than younger members
Enrollments of the Elderly on the Rise
Percentage of New Members
Aged 50 and Older
14%
February 2017
(preliminary)
January
2017
19%
January
2016
22%
35Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Encouragingly
positive feedback
from the elderly
New Program Tailored to the Elderly
93%
Do you think RIZAP is right for
people aged 50 and older?
Yes
Note: Results of a questionnaire survey on 190 male and female customers
aged 50 and older who completed a beginner’s course from April to
September 2016.
“Yes” includes those who answered “Agree” and “Somewhat agree”
36Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
90% of RIZAP beginners aged
50 and older said they felt
healthier
Encouragingly Positive Feedback from Members Aged 50 and Older
89%
Did your health data show
signs of improvement
after joining RIZAP?
Yes
88%
Yes
88%
Yes
90%
Yes
Do you feel you are
healthier after joining
RIZAP?
Would you recommend RIZAP
to your friends and relatives
who have health concerns?
青木 英子さん(67歳)
Do you have a healthier
lifestyle after joining
RIZAP?
Note: Results of a questionnaire survey on 190 male and female customers aged 50 and
older who completed a beginner’s course from April to September 2016.
37Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Rolled Out Aggressive Marketing Programs Targeted at the Elderly
Infomercial for the elderly
Free newspaper for the elderly
(Example of synergy with PADO
Corporation)
TV and print advertising
38Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Increased elderly
customers will result in
greater utilization of
trainers and stores
Effect of Increased Elderly Customers on the RIZAP Business
7:00 am 11:00 pm12:00 pm
Correlation between Trainers’
Availability and Sessions Engaged by
Customers
Number of
available trainers
Number of
sessions engaged
by customers
Room for improvement
by taking advantage of
a growing number of
elderly customers
Further profit-
improvement
opportunity(better utilization of staffers,
properties, and equipment)
39Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Developing food products with functional
claims that meet the needs of the elderly
RIZAP-Branded Food Products with Functional Claims
Note: Regulatory documents regarding these products were
submitted to and accepted by the Consumer Affairs Agency
(as of March 3, 2017).
・・・
ASSIST EYE JUST VITAL FLORA
Supports flexibility
and mobility of knee
joints
Improves the eye’s
focusing function
and relieves eye
strain from PC use
Improves intestinal
environment and
promotes
gastrointestinal condition
March 2017
Product name:
Efficacy:
To be
available in:March 2017 June 2017
40Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Four Key Initiatives to Achieve the COMMIT 2020
③
Create a new revenue base by
working with other leading
companies
Grow businesses in
Accelerate growth centered on
RIZAP・ Shift to “stack-up management”
・ Expand customer base
Upgrade M&A processes and
pursue greater synergy among
group companies so as to
achieve greater profitability in
every segment
Step up M&A activities and
enhance group synergy① Launch new businesses
Aggressively invest in new
businesses to grow them into
another “RIZAP”
2
3
4
1existing segments
Pursue business partnerships
with other companies
41Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Establishing a “RIZAP Ecosystem” focused on the
self-investment market
Overall Picture of New Business Strategy
② Maximize effectiveness of marketing①Attract customers through new channels
③ Offer supporting products
RIZAP ONLINERIZAP books and
magazines
RIZAP Food
GolfEnglish conversation
classes
Cooking schoolsProduct development
Partnerships with
convenience storesRIZAP Apparel
42Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
RIZAP x RIZAP GOLF
The first co-branded store opened at Ikebukuro
Higashiguchi
RIZAP x RIZAP GOLF Co-branded Store Opened on January 18, 2017
43Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Excellent customer satisfaction generated in
RIZAP GOLF has proven the effectiveness
of the RIZAP Method
RIZAP GOLF: Customer Satisfaction
Do you feel like your golf skills
improve every time you take
lessons at RIZAP GOLF?
Are you happy with the lessons
provided at RIZAP GOLF?
Yes
93%
Yes
90%
Note: Results of a questionnaire survey on 189 customers
after taking RIZAP GOLF lessons from November 2016 through January 2017
44Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
The number of active members has been on a
sharp rise
RIZAP GOLF: The Number of Active Customers
Feb Nov JanDecJan OctSepAugMar Apr May JulJun
The Number of Active
Customers
45Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
RIZAP GOLF: Prospective Customers
The Number of Inquiries
from Prospective
Customers
Feb MarJan JanDecNovOctSepAugJulJunMayApr
Generated a keen interest among
prospective customers
We will expand the RIZAP
GOLF business
significantly in FY2017
Advertising was temporarily cut
back due to increase in waitlisted
customers. (switched to test
marketing)
46Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Four Key Initiatives to Achieve the COMMIT 2020
③
Create a new revenue base by
working with other leading
companies
Grow businesses in
Accelerate growth centered on
RIZAP・ Shift to “stack-up management”
・ Expand customer base
Upgrade M&A processes and
pursue greater synergy among
group companies so as to
achieve greater profitability in
every segment
Step up M&A activities and
enhance group synergy① Launch new businesses
Aggressively invest in new
businesses to grow them into
another “RIZAP”
2
3
4
1existing segments
Pursue business partnerships
with other companies
47Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Aggressively pursue partnerships with other
companies to create a new revenue base and to
establish RIZAP as a “cutting-edge healthcare
brand”
Pursue Business Partnerships with Other Companies
1. Work with other leading companies
2. Conduct joint research with universities and hospitals
3. Work with local governments
4. Partner with companies working with
cutting-edge technologies
Key strategies to enhance business
partnerships
48Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
RIZAP x Family Mart co-branded products
sold more than 9 million units*
Partnership with Family Mart Convenience Stores
NO. 1 NO. 2 NO. 3
NO. 4 NO. 5 NO. 6 The 3rd series of
items are in the
pipeline
RIZAP
Spicy Miso Ramen
RIZAP
Soft Chocolate
Chip Cake
RIZAP
Chocolate
Chip Scone
RIZAP
Custard Pudding
RIZAP
Cheese Cake
RIZAP
Caramel Latte
LaunchedJanuary 2017
* 11 items are in the market as of February 19, 2017
x
49Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
RIZAP x Pizza HutThe number of stores
carrying co-brand products is on the rise to meet growing customer
demand
Partnership with Pizza Hut
Aug. 2016 Oct. 2016 Jan. 2017
x
Expected
to grow
The Number of Pizza Hut
Stores Carrying Co-branded
Products
149
32
6
50Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Kirin Beverage and RIZAP have been working on
developing a new product that addresses people’s
health concerns
Partnership with Kirin Beverage
x
We will jointly announce a new product on March 14, 2017
51Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Launched health-promotion program for the elderly:An initiative to extend healthy-life expectancy of the elderly in
collaboration with a local government and hospitals
Partnership with the City of Makinohara, Shizuoka
x
Makinohara, Shizuoka
This is the first time in Japan that a local
government has worked with a service
provider to establish a sustainable,
result-oriented business model
(We are talking to other local governments
about partnerships)
Feature
Commission paid to RIZAP is variable,
depending on the degree of improvements
in participants’ health data, which is in line
with the RIZAP philosophy “Committed to
results”
Period March 2017 onward
Intended
forThe elderly living in Makinohara, Shizuoka
Program
• Duration: 3 months
• Weekly health seminar
• Monitoring progress of regular exercise
and healthy diet
Evaluation
criteria
• Changes in health data such as blood
pressure
• Changes in the degree of happiness,
using a happiness life check sheet
• Changes in anatomic age, using
RIZAP’s proprietary method
Outline of the Initiative
52Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Four Key Initiatives to Achieve the COMMIT 2020
③
Create a new revenue base by
working with other leading
companies
Grow businesses in
Accelerate growth centered on
RIZAP・ Shift to “stack-up management”
・ Expand customer base
Upgrade M&A processes and
pursue greater synergy among
group companies so as to
achieve greater profitability in
every segment
Step up M&A activities and
enhance group synergy① Launch new businesses
Aggressively invest in new
businesses to grow them into
another “RIZAP”
2
3
4
1existing segments
Pursue business partnerships
with other companies
53Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Group Company Topic
20162015201420132012
9.01 millionRanked 1st for
4 straight years*1
Ranked 1st
in the skincare division*2
*1: As of March 2017
*2: Based on yen-based sales from FY2011 to FY2014 in the mud
face wash market, excluding OEM. Mud face wash is face
cleanser that uses mud as an active ingredient. Source: Yano
Research Institute Ltd. (March 2016)
*3: Amazon annual ranking 2016(FY)
DOROwa Series
broke the 9 millionth
shipment mark in sales
Dec. 28, 2016
Limited offer
Cumulative Quantity of
DOROwa Series Shipped
54Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Group Company Topic
2,925
3,315
20162015
3,052
2014
Revenues of IDEA
International
Revenues on an upward
trend with key brands
doing well
BRUNO(Interior products)
MILESTO(Travelling items)
(in millions of yen)
(for July through December in each fiscal year)
55Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Group Company Topic
Won
The Good Design Award
2 years in a row
Minatomirai Show HouseMariscal House
(Hiranumabashi Show House)
56Copyright © 2017 RIZAP GROUP Inc. All rights reserved. 56Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
57Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Concepts and Logic
57Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Futuristic
gyms using
digital signage
Customer Benefits
RIZ
AP
Eco
syste
m
Exte
rnal fa
cto
rsIn
tern
al fa
cto
rs
Gym
Stylish design
representing
what the RIZAP
brand stands for
Machine
Body make
line extended
to apparel and
sundries
Body Make
Collection
Golf
CollectionGoods
Golf apparel
and
accessories
Healthcare
products
Machine
training
room
Comfortable
living space
A comfort zone nearest to you is what it takes to make you
feel uplifted and happy
Always stay healthy and fit
Body care &
Recovery from
exhaustion
58Copyright © 2017 RIZAP GROUP Inc. All rights reserved. 58Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
RIZAP at home
Trainer app
session
An app that recommends training and dietary menus,
and can be safely used at home
Tra
inin
g m
en
uD
ieta
ry m
en
u
Digital
dietary
management
Self-
management
app
Application
59Copyright © 2017 RIZAP GROUP Inc. All rights reserved. 59Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
FACE yourself.
Body-make space that blends into
a living space
60Copyright © 2017 RIZAP GROUP Inc. All rights reserved. 60Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Body-make space that blends into
a living space
FACE yourself.
61Copyright © 2017 RIZAP GROUP Inc. All rights reserved. 61Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Body-make space that blends into
a living space
FACE yourself.
62Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
An Example of Synergy between Group Companies
RIZAP x Nihonbungeisha
ranked 1st and 2nd on
Amazon’s best-selling book list*
*Amazon Ranking:
Best-selling book ranking in the other beauty and diet category
(as of January 17, 2017)
x
63Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Strategic M&A to Accelerate
Growth
64Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Past M&A Activities
FY2013 and earlier
FY2014 FY2015 FY2016
Angeliebe
IDEA International(Stock code: 3140 on TSE JASDAQ )
SD Entertainment(Stock code: 4650 on TSE JASDAQ )
Dream Vision Co., Ltd.(Stock code: 3185 on TSE
Mothers)
Auntie RosaJapan Gals
JapangalsSC (formerly, ASTY)
Marimura
Tatsumi Planning
Nihonbungeisha Co., Ltd.Hokuto Printing
Passport(Stock code: 7577 on TSE JASDAQ)
Maruko(Stock code: 9980 on TSE 2nd)
Misuzu
Jeans Mate(Stock code: 7448 on TSE 1st)
PADO Corporation
(Stock code: 4833 on TSE JASDAQ)
65Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Achieved outstanding
ROI
Past M&A: Return on Investment
84
267
Returns
(Total value + unrealized gain)Investment amount
3.2 X
(in billions of yen)
• TVPI: 3.2
• Gains: 18.3 billion yen(including unrealized gain)
8.4
26.7
66Copyright © 2017 RIZAP GROUP Inc. All rights reserved. 66
67Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Achieve a V-Shaped Business Turnaround Fast
Category Key initiatives
① Rebranding• Redesign the brand definition
• Focus on profitable brands
② Enhance
competitiveness of
products
• Recruit experienced technical creators
• Increase special orders to suppliers and incorporate the
latest fashion trends into products
③ Enhance effectiveness
of sales
• Transform sales and channel strategies and practices
(Improve in-store customer service and sales
associates’ upsell skills; consider opening flagship
stores)
④ Restructure business
processes
• Overhaul business processes from end to end
(including business management, merchandising, store
planning, and logistics)
Achieve a V-shaped business turnaround fast by
injecting the RIZAP Group’s wealth of know-how and
resources
68Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
JEANS MATE: Rebranding
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JEANS MATE: Store Renovation
69
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JEANS MATE: Store Renovation
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JEANS MATE: Transformation of Business Management
x
Launched a business-management transformation project that
focuses on pursuing the best interests of the company, working with
Goldratt Consulting, which sold more than 10 million copies of The
Goal around the world
The first workshop session with
Goldratt Consulting held on
February 18, 2017
72Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
in partnership with PADO Corporation,
publisher of the most widely circulated free
paper in Japan
RIZAP Group launched a media business
Announced on February 13, 201772
73Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Most Widely Circulated Free Paper in Japan
Top 10 Free Papers by Circulation
Source: Statistics published on publishers’ websites and the Japan Free Newspaper Guide 2016
Free paper PublisherCirculation* (in millions of
copies)
1 PADO PADO Corporation 9.62
2 Living ShimbunSankei Living
Shimbunsha Inc.7.90
3 Hot Pepper Recruit 5.86
4 Woman LifeWoman Life Shimbunsha,
K.K.3.98
5 Town Work Recruit 3.00
6 Teinen Jidai Shimbun Hensyu Center 2.50
7 High Carat Ardent-Wish Inc. 2.44
8 Town News Townnews-sha Co., Ltd. 2.34
9 Chiiki Shimbun Chiiki Shimbunsha 2.12
10 Yomiuri FamilyYomiuri Jyoho Kaihatsu
Osaka1.59
The most widely
circulated free
paper in Japan
74Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
PADO Readership
80% of PADO readers
are in their 20s, 30s
and 40s
*Based on PADO selected reader questionnaire
Readership Comparison by Age Group
Communicate to this
demographic as
potential customers of
RIZAP programs
7.1%
15.1%
14.4%
40.1%
24.1%
23.4%
31.1%
10.9%
23.3%
10.5%
0% 20% 40% 60% 80% 100%
新聞
ぱど
20s and
younger 30s 40s 60s and
older50s
Newspapers30s 40s 50s
20s and
younger
60s and
older
75Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Creating Group Synergy Using New Media Vehicles
Examples of synergy created by the use of new media vehicles
New media
vehicle for the
elderly
RIZAP for the
elderly
New media vehicle
for health and
beauty products
Key products
offered by Group
companies
Maximize the synergy among Group
companies
76Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Enhance the effectiveness of the media marketing
platform to maximize group synergy
Maximizing Group Synergy
Media
business
group
・・・
Publication Printing Community mediaRIZAP media
marketing department
Housing-related
lifestyle business
group
Entertainment
business
group
Beauty and health
business group
Apparel business
group
77Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Building a more robust management platform as a
basis for substantially growing the RIZAP Group
Upgrading the Management Platform
Media marketing
Strategic areas to be enhanced in the group-
wide platform
Purchasing IT and SCM Logistics
・・・
Implementing initiatives to dramatically upgrade each
area of operations(by recruiting senior executives from outside, partnering with other
companies, and pursing M&A opportunities)
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Maximize
RIZAP Group’s Corporate
Value
79Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Highlights of 3Q Results
1. Achieved revenue and profit growth for 4 consecutive fiscal years and made profits in every segment
2. RIZAP’s core business has entered a new growth phase, fueled by the increasing revenues from the elderly
3. Ready to expand the RIZAP GOLF business significantly in FY2017
4. Ready to maximize the Group’s corporate value by achieving greater synergy among Group companies
80Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Business forecasts for FY2016 remains
unchanged, on track of significant
growth
Consolidated Business Forecasts for Fiscal Year Ending March 31, 2017
Results of
Fiscal Year
Ended March
2016
Forecast for
Fiscal Year
Ending March
2017
Year-on-year
Changes
(Amount)
Year-on-year
Changes
(%)
Revenues 55,448 100,000 +44,552 180.3%
Operating income 5,066 10,150 +5,084 200.3%
Income attributable to
owners of parent
company2,466 6,000 +3,534 243.3%
(in millions of yen)
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The number of complimentary items of
merchandise offered to our shareholders doubled
Upgraded the Shareholder Benefits Program
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Maximize RIZAP Group’s Corporate Value
Committed to
achieving revenues
of 300 billion yen in
FY2020
0908072006 10 1711 12 13 14 15 16
55.4
100
(in billions of yen))
(Forecast)
Consolidated Revenues
(Stock listed)
83Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
Committed to achieving operating income of 35 billion
yen in FY2020
0908072006 10 1711 12 13 14 15 16
5.0
10.1
Maximize RIZAP Group’s Corporate Value
(in billions of yen)
(Forecast)
Consolidated Operating Income
(Stock listed)
84Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
To realize a world
in which everyone shines
with a smile and confidence
84
85Copyright © 2017 RIZAP GROUP Inc. All rights reserved.
This material is provided for the sole purpose of sharing information about RIZAP
and the RIZAP Group and not intended to solicit investment in our stock.
The opinions and forecasts presented in this material represent our views at the
time of the preparation of the material, and we make no guarantees or warranties
as to the accuracy or completeness of the information, which may be subject to
change at any time without notice.
RIZAP Group, Inc.
https://www.rizapgroup.com/
We appreciate your continued support.