Saizeriya Co., Ltd. Financial Results Briefing Session for the Second Quarter of the Fiscal Year Ended August 31, 2014 (42th term: from September 1, 2013 to February 28, 2014) Code No. 7581 Thursday, April 10, 2014
Table of Contents 1. Financial Results for the Second Quarter 2. Major Factors Lifting Business Performance 3. Trends in Major Financial Indicators (Semiannual) 4. Trends in Number of New Outlet Openings and Closures of Outlets, t Outlets t Outstanding t (Semiannual) 5. Number of Outlets in Japan by Region 6. Trends in Financial Results (Semiannual) 7. Financial i Results for Subsidiaries i 8. Trends in Capital Expenditure and Cash Flow 9. Second Quarter Compared to Budget 10. Projected Consolidated Business Performance P 2 P 4 P 10 P 11 P 12 P 13 P 14 P 17 P 18 P 19 Figures in this document are all calculated based on the consolidated accounting system, unless specified otherwise. 1
1. Financial Results for the Second Quarter (1) Financial Highlights Increased Net Sales and Decreased Earnings Consolidated Results Sale (millions of yen) Year-on-Year Net Sales 59,243 100.0% 114.7% Operating Income 1,453 2.5% 42.5% Ordinary Income 1,672 2.8% 41.3% Net Income for the Quarter 131 0.2% 6.9% 2
(2) Second Quarter Financial Results (millions of yen) Classification Q2 of Year Ended d August 31, 2014 Amount Net Sales Q2 of Year Ended d August 31, 2013 Amount Net Sales Percentage difference Net Sales 59,243 100.0% 51,669 100.0% - Gross Net Sales 37,383383 63.1% 34,333333 66.4% -3.3% 3% Operating Income 1,453 2.5% 3,422 6.6% -4.2% Ordinary Income 1,672 2.8% 4,044 7.8% -5.0% Net Income for the Quarter 131 0.2% 1,909 3.7% -3.5% 3
2. Major Factors Lifting Business Performance (1) Net Sales Year-on-Year : 114.7% I. Number of outlets (For Shanghai, Guangzhou, Beijing, Hong Kong and Taiwan, data for the period between July 2013 and December 2013 are used.) (For Singapore, data for the period between September 2013 and February 2014 are used.) No. of New Outlet Openings No. of Closures of Outlets No. of Outlets Outstanding 2013/2Q 2014/2Q 2013/2Q 2014/2Q 2013/2Q 2014/2Q Japan 40 44 16 16 953 1,010 Shanghai 7 15 6 2 52 71 Guangzhou 8 12 0 1 46 66 Beijing 2 6 0 1 24 34 Hong Kong 2 3 0 0 9 13 Taiwan 2 3 2 1 4 6 Singapore 1 0 0 0 5 6 Total 62 83 24 21 1,093 1,206 II. New outlet openings 83, Outlet closures 21, Net increase 62, No. of outlets outstanding 1,206 4
III. Trends in Net Sales, Number of Customers, Average Customer Spending for All Outlets 110% Net Sales No. of Customers Average Customer Spending 105% 100% 95% 90% Net Sales No. of Customers Average Customer Spending September 2012 105.7% 106.3% 99.4% October 99.3% 100.4% 98.9% November 103.8% 104.1% 1% 99.7% December 104.1% 104.3% 99.8% January 2013 102.6% 102.6% 99.9% February 105.3% 105.5% 99.8% March 106.3% 107.0% 99.3% April 100.8% 103.4% 97.4% May 104.8% 106.6% 98.3% June 106.1% 108.0% 98.3% July 103.3% 105.2% 98.2% August 104.4% 105.2% 99.2% Consolidated results for last term 103.9% 104.9% 99.0% September 2013 101.6% 102.2% 99.4% October 102.9% 103.5% 99.4% November 107.3% 108.4% 99.0% December 105.7% 106.3% 99.4% January 2014 105.3% 106.1% 1% 99.3% February 98.9% 99.5% 99.3% Consolidated results for first half of 103.6% 104.4% 99.3% this term March 102.6% 103.0% 99.6% * The graph above reflects only data on Saizeriya's restaurant business, and excludes other businesses of the company. 5
IV. Trends in Net Sales, Number of Customers, Average Customer Spending for Existing Outlets Net Sales No. of Customers Average Customer Spending September 2012 99.5% 99.7% 99.8% October 93.9% 94.6% 99.2% November 98.6% 98.5% 100.0% December 98.6% 98.5% 100.1% January 2013 97.5% 97.3% 100.2% February 100.3% 100.2% 100.1% March 101.1% 101.4% 99.7% April 95.5% 5% 97.4% 98.0% May 98.9% 100.2% 98.7% June 100.5% 101.8% 98.8% July 97.1% 98.4% 98.6% August 98.3% 98.6% 99.7% Consolidated results for last term 98.3% 98.9% 99.4% September 2013 95.3% 95.5% 99.8% October 95.8% 96.0% 99.8% November 99.4% 100.0% 99.4% December 98.4% 98.5% 99.9% January 2014 98.5% 98.7% 99.7% February 92.5% 92.8% 99.7% Consolidated results for first half of 96.7% 96.9% 99.7% this term March 96.7% 96.7% 100.0% * The graph above reflects only data on Saizeriya's restaurant business, and excludes other businesses of the company. 6
V. Trends in Net Sales, Number of Customers, Average Customer Spending (Semiannual) FY 2010/2Q 2011/2Q 2012/2Q 2013/2Q 2014/2Q Net Sales (millions of yen) 46,421 45,513 46,604 48,198 49,956 No. of Customers (thousands of people) 62,348 62,382 63,919 66,398 69,324 Average Customer Spending (yen) 745 730 729 726 721 *The above figure indicates numerical value for each unit. Net Sales No. of Customers Average Customer Spending (Net Sales / No. of Customers) (Average Customer Spending) 80,000 750 70,000 60,000 50,000 40,000 30,000 20,000000 10,000 0 2010/2Q 2011/2Q 2012/2Q 2013/2Q 2014/2Q 745 740 735 730 725 720 715 710 705 7
(2) Gross Income Percentage for Net Sales: 63.1% Decreased by 3.3 points on a Year-on-Year Basis 1. Increase in unit prices of supplied materials due to the effect of the currency exchange rate 2. Increased raw material prices (shrimp, chicken, cheese, etc.) 3. Rise in cost rate due to introduction of value lunch specials 8
(3) of SGA to Net Sales: 60.6% Decreased by 0.8 points on a Year-on-Year Basis 1. Labor costs Increased pay and benefits due to increase in the number of employees poyees and temporary staff Decrease in productivity (Impact of heavy snowfall in February, etc.) Increase in training costs due to enhanced employee education 2. Facilities and related costs Increased depreciation costs for lunch equipment and register systems for outlets 3. Utility costs (heating, electricity, water) Increase in unit prices of electricity and gas 9
3.Trends in Major Financial Indicators (Semiannual) Classification 2012/2Q 2013/2Q 2014/2Q Return on Assets for Quarter (ROA) % 6.0 5.0 1.9 Total Assets Turnover (No. of times) 07 0.7 06 0.6 07 0.7 Earnings Per Share for Quarter (EPS) (yen) 45.0 37.8 2.6 Book-value Per Share (BPS) (yen) 1,191.3 1,294.5 1,332.7 Capital Adequacy % 82.7 80.5 79.5 Return on Equity for Quarter (ROE) % 3.8 3.0 0.2 10 8 6 4 2 0 Return on Assets for Quarter (ROA) Return on Equity for Quarter (ROE) 2012/2Q 2013/2Q 2014/2Q 50 45 40 35 30 25 20 15 10 5 0 Earnings Per Share for Quarter (EPS) 2012/2Q 2013/2Q 2014/2Q 10
4. Trends in Number of New Outlet Openings and Closures of Outlets, Outlets Outstanding (Semiannual) FY 2012/1H 2012/2H 2013/1H 2013/2H 2014/1H 2014/2H (projected) No. of New Outlet Openings 48 31 40 40 44 28 No. of Closures of Outlets 13 19 16 11 16 9 No. of Outlets Outstanding 917 929 953 982 1,010 1,029 * The figures above indicates only the number of outlets in Japan. * A net increase of 47 outlets is projected for this term. (No. of Outlets Outstanding) 1,050 No. of New Outlet Openings/Closures and Outlets Outstanding (No. of New Outlet Openings) (No. of Closures of Outlets) 60 1,000 950 900 850 50 40 30 20 10 800 2012/1H 2012/2H 2013/1H 2013/2H 2014/1H 2014/2H (projected) No. of Outlets Outstanding No. of New Outlet Openings No. of Closures of Outlets 0 11
5. Number of Outlets in Japan by Region Kyushu, 2.2% Chugoku, 1.4% Tohoku/ Hokkaido, 4.8% Region Subtotal to total Prefecture No. of outlets Tohoku/Hokkaido 48 4.8% Hokkaido 9 Miyagi 21 Fukushima 13 Yamagata 5 Kanto 580 57.4% Tokyo 208 Kinki, 18.8% Tohoku/Hokkaido Kanto Kanagawa 113 Chiba 111 Saitama 91 Ibaraki 30 Tochigi 17 Gunma 10 Chubu, 15.4% Kanto, 57.4% Chubu Kinki Chugoku Kyushu Chubu 156 15.4% Aichi 70 Shizuoka 27 Niigata 12 Gifu 11 Nagano 12 Ishikawa 10 Yamanashi 7 Toyama 4 Fukui 3 Kinki 190 18.8% Osaka 87 Hyogo 45 Kyoto 20 Mie 18 Shiga 9 Nara 9 Wakayama 2 Chugoku 14 1.4% Okayama 4 Hiroshima 9 Yamaguchi 1 Kyushu 22 2.2% Fukuoka 22 Total 1,010 100.0% 1,010 12
6. Trends in Financial Results (Semiannual) (millions of yen) Fiscal Year 2012/2Q 2013/2Q 2014/2Q 2014/8(projected) Year-on-Year Year-on-Year Year-on-Year Year-on-Year Results Results Results Plan Classification Net Sales 49,226 103.6% 51,669 105.0% 59,243 114.7% 126,200 114.3% Selling, General and Administrative Expenses (SG&A) 29,035 106.8% 30,910 106.5% 35,929 116.2% 73,600 113.9% Operating Income 3,955 78.4% 3,422 86.5% 1,453 42.5% 5,900 78.2% Ordinary Income 4,420 83.8% 4,044 91.5% 1,672 41.3% 6,200 73.4% Net Income for the Quarter 2,268 99.1% 1,909 84.2% 131 6.9% 2,600 66.0% Total assets amount 72,672 100.6% 81,123 111.6% 84,616 104.3% 89,100 101.9% Net assets amount 60,185 108.0% 65,436 108.7% 67,418 103.0% 69,000 102.5% * Totals may not tally as figures are rounded down to nearest million yen. * Figures for 2014/8 (projected) are estimated values. (millions of yen) (millions of yen) 13
7. Financial Results for Subsidiaries (1) Financial Results for Consolidated Subsidiaries (by Segment) (millions of yen) Net Sales Operating Income 2013/2Q 2014/2Q % 2013/2Q 2014/2Q % Corporation Previous term Current term Year-on-Year Previous term Current term Year-on-Year Saizeriya 48,198 49,956 103.6% 3,163 818 25.9% Saizeriya Australia 2,068 2,099 101.5% 122 55 45.2% Overseas outlets (Asia) 5,177 9,209 177.9% 150 599 398.8% Consolidation Elimination -1,960-2,020-7 -19 - Total 53,484 59,243 110.8% 3,444 1,453 42.2% 2% * Totals may not tally as figures are rounded down to nearest million yen. * 2013/2Q totals for Overseas Outlets (Asia) include current 2013/2Q totals for non-consolidated subsidiaries and therefore do not match those in our quarterly report. 41st term 2Q report: Overseas Outlets (Asia) Net Sales (3,363363 million yen) Overseas Outlets (Asia) Operating Income (128 million yen) 14
(2) Financial Results for Consolidated Subsidiaries Overseas Outlets (Asia) Breakdown (millions of yen) Net Sales Operating Income 2013/2Q 2014/2Q % 2013/2Q 2014/2Q % Corporation Previous term Current term Year-on-Year Previous term Current term Year-on-Year Saizeriya Shanghai 1,719 2,867 166.7% 43 155 357.4% Saizeriya Guangzhou 1643 1,643 3056 3,056 186.0% 85 241 283.7% Saizeriya Beijing 736 1,295 176.0% 24 78 324.3% Saizeriya Taiwan 124 219 175.5% -53-55 - Saizeriya Hong Kong 716 1,397 194.9% 69 192 276.1% Saizeriya Singapore 236 373 157.8% -19-14 - Overseas outlets (Asia) Total 5,177 9,209 177.9% 150 599 398.8% 15
(3) Development of Overseas Outlets Region 2013/8 New Outlet Opening 2014/1H 2014/2H Closure of Outlets 2014/2 New Outlet Opening (projected) Closure of Outlets (projected) 2014/8 (projected) Shanghai 58 15 2 71 10 0 81 Guangzhou 55 12 1 66 18 1 83 Beijing 29 6 1 34 9 0 43 Hong Kong 10 3 0 13 4 0 17 Taiwan 4 3 1 6 4 1 9 Singapore 6 0 0 6 4 0 10 Overseas Total 162 39 5 196 49 2 243 * For Shanghai, h Guangzhou, Beijing, Hong Kong, and Taiwan Figures for 2014/1H are for July 2013 - December 2013 and figures for 2014/2H are for January 2014 - June 2014 * For Singapore Figures for 2014/1H are for September 2013 - February 2014 and figures for 2014/2H are for March 2014- August 2014 * Net increases for full year: 81 outlets 16
8. Trends in Capital Expenditure and Cash Flow (millions of yen) 2012/2Q 2012/8 2013/2Q 2013/8 2014/2Q 2014/8 (projected) New outlet openings 2,935 4,857 2,409 4,966 2,878 4,200 Renovation of existing outlets 92 164 421 2,038 159 700 Yoshikawa Plant 9 19 27 33 1 1 Kanagawa Plant 113 132 94 105 606 610 Fukushima Plant 120 123 0 2 0 16 Hyogo Plant 7 13 39 122 3 23 Chiba Plant 1,301 1,301 4,416 4,569 12 40 Head Office and Others 285 318 900 962 104 180 Subsidiaries 338 1,273 420 903 1,378 3,172 Capital Expenditure (=A) 5,200 8,200 8,726 13,700 5,142 8,941 Cash Flow (=B) 3,228 8,538 3,126 8,003 2,143 7,531 Depreciation 1,868 3,975 2,125 4,974 2,920 5,839 Balance (=B-A) -1,972 338-5,600-5,697-2,999-1,410 * Totals may not tally as figures are rounded down to nearest million yen. Figures for 2014/8 (projected) are estimated values. * The figures above in the Cash Flow row are approximately calculated and therefore do not match those in our cash flow statement. 17
9. Second Quarter Compared to Budget Classification 2014/2Q Results 2014/2Q Budget Amount Sales Amount Sales (millions of yen) Budget Net Sales 59,243 100.0% 55,800 100.0% 106.2% Gross Operating Income Operating Income 37,383 63.1% 35,909 64.4% 104.1% 1,453 2.5% 3,100 5.6% 46.9% Ordinary Income 1,672 2.8% 3,200 5.7% 52.3% Net Income for the Quarter 131 0.2% 1,750 3.1% 7.5% 18
10. Projected Consolidated Business Performance (1) Revision of Projected Consolidated Business Performance (millions of yen) 2014/8 Revised Projection 2014/8 Initial Projection Amount Sales Amount Sales Changes Percentage change Net Sales Operating Income 126,200 100.0% 118,800 100.0% 7,400 6.2% 5,900 4.7% 8,700 7.3% -2,800-32.2% Ordinary Income 6,200 4.9% 8,970 7.6% -2,770-30.9% Net Income for the Quarter 2600 2,600 21% 2.1% 5100 5,100 43% 4.3% -2,500 2500-49.0% * We have revised the projected business performance for the fiscal year ending August 31, because some changes occurred as a result of projecting based on recent performance trends. 19
(2) Projected Consolidated Business Performance First Half (Results) Full Year (Projected) Rate of Progress Net Sales 592 1,262 46.9% Operating Income 14 59 24.6% Net Income 13 1.3 26 50% 5.0% * Figures are rounded down to nearest 100 million yen. Classification 2014/8(projected) Return on Assets for Term (ROA) % 7.0 Total Assets Turnover (No. of times) 1.4 Earnings Per Share for Term (EPS) (yen) 51.5 Book-value Per Share (BPS) (yen) 1,367.8 Capital Adequacy % 77.2 Return on Equity for Term (ROE) % 3.8 20
Agenda for Second Half 1. From April, change menus for consumption tax increase (defer tax-inclusive price listings for main menu) 2. Revise strategy for opening outlets in Japan 3. Restructure domestic plants 4. Continue employee education 5. Improve production techniques, enhance research department 6. Continue opening overseas outlets 21
Thank you. 22