TKP Corporation. Result meeting material for the year ended Feb April 17, 2018 TKP Corporation. TSE Mothers:3479

Transcription

1 TKP Corporation Result meeting material for the year ended Feb April 17, 2018 TKP Corporation TSE Mothers:3479

2 AGENDA Characteristics of the TKP Business Main topics for the year ended Feb Highlights of the year ended Feb Future Business Strategy...P 3...P 6...P 8...P 17 APPENDIX...P 30 2

3 TKP Corporation Characteristics of the TKP Business

4 TKP business model TKP acquires underutilized assets from the real estate owners, and operates a sharing business centered on B-to-B. Our business is not simply small-lot sales, and we add a variety of services to the properties when they are rented for use. MessageAcquisition Real estate owner Provision of added value Sharing of underutilized assets for B-to-B Sale Users (corporations) Needs Wants to do something with non-operating assets which currently do not have tenants. A. B. Inexpensive acquisition of non-operating assets TKP brand Multipurpose uses Rental conference rooms Training facilities Small-lot sales provided at inexpensive prices Factors influencing user selection of conference rooms Range of quality and prices Meals =Underutilized real estate assets Rental income Services BPO Equipment lease/rental Lunch boxes and catering Restaurant, café Accommodation facilities Call center Banquet facilities Accommodation and transportation arrangements Video, sound, lighting Event operations Seminars Provision of one-stop services Usage fees Logistics packages covering venue and accommodation site, reducing the burden on company staff. 4

5 TKP business model We are working to expand our business areas by operating catering, lunch boxes, and other food and beverage services, simultaneous interpreting systems, and other optional services, as well as accommodation services, transportation arrangement services, and other services to meet user needs. Food and beverage Catering Boxed lunches Options Simultaneous Video conferencing interpretation system system Training coordinationvideo, audio, lighting Cafe Restaurant Rental services for recruiting Office furniture/ equipment Setting up partitions High-spec projector Accommodation Others Training trip packs Employee trip Affiliated hotels Accommodation arrangements Transportation arrangements Event production Event management system Medical conference system Resort seminar hotels High grade resort seminar ryokan (Japanese style inn) Business hotels City hotels Compact hotels 5

6 TKP Corporation Main topics for the year ended Feb. 2018

7 Main topics from FY 2018 Results were revised upward during the year, ending with sales that were 106.9% of the initial plan, and operating income that was 105.4%. 1 Active openings of high-grade facilities (Garden City PREMIUM, Garden City) We are actively proceeding with openings in highly convenient and functional office buildings, landmark buildings, and hotels, and are further expanding the Japan network in order to acquire high added-value properties. We are searching for ways to achieve multi-purpose use of office buildings, including the TKP first Rental conference room and banquet facility Co-working space. 2 Expansion of directly-operated accommodation-type training facilities A strategy of capturing both LecTore corporate customers and individual resort customers, combined with facility renewals, is contributing to income growth. We are acquiring large-size accommodation-type training facilities (LecTore Yugawara: May 2017, LecTore Hayama: April 2018). Operating rates at our urban business hotels are strong. 3 Further expansion of business areas while incorporating peripheral services: Towards development of new synergy 7 We entered into the event production business with the acquisition of subsidiary Majors, Inc. We are developing new possibilities for space use not limited to office buildings, starting from an alliance with Otsuka Kagu, Ltd.

8 TKP Corporation Highlights of the year ended Feb. 2018

9 Highlights of year ended Feb (cumulative, consolidated) (Millions yen) 35,000 30,000 Sales Year-on-year 130.5% 28,689 (Millions yen) 4,000 3,500 Operating income Year-on-year 128.0% 3,449 25,000 20,000 21,978 3,000 2,500 2,694 2,000 15,000 1,500 10,000 1,000 5, Feb Feb Feb Feb

10 Overview of FY 2018 (cumulative, consolidated) All categories were up approximately 30% from the previous fiscal year. There was a large income growth in hotels and other peripheral businesses, as well as in our core business of rental conference rooms and banquet facilities, contributing to an improved gross profit margin. (Millions Yen) Year ended Feb Year ended Feb % to % to Amount Amount sales sales YoY Sales 21, % 28, % 130.5% Gross profit 8, % 10, % 132.4% SG&A 5, % 7, % 134.5% Operating income 2, % 3, % 128.0% Ordinary income 2, % 3, % 125.4% Net income 1, % 2, % 153.2% 10

11 Overview of FY 2018 (December 2017 February 2018, consolidated) Partial leveling of the expenses which were concentrated at the year-end in previous years resulted in a large increase in each income category. The cost structure is changing towards a system that can ensure stable income throughout the year. (Millions Yen) Year ended Feb Year ended Feb % to % to Amount Amount sales sales YoY Sales 5, % 7, % 135.2% Gross profit 1, % 2, % 142.1% SG&A 1, % 2, % 126.6% Operating income % % 429.5% Ordinary income % % 745.1% Net income 8 0.1% % % 11

12 Trends in consolidated sales (for each grade) New programs contributed to an overall increase in sales. (Millions yen) 30,000 1,858 (Rooms) 2,000 25,000 20,000 15,000 1,536 1, ,657 1,752 1,819 1, ,782 (1) (2) 3,712 2,355 1,898 9,566 1,800 1, ,400 1,200 1,000 (1) Including Azur Takeshiba and Majors (2) Including Apa Hotel (Nippori, Sapporo Kitaguchi, Nishikasai) Others 10,000 6,846 8, Accomodation STAR rental conference rooms Business Center(BC) 5,000 7,523 8, Conference Center(CC) Garden City(GC) 6, Garden City PREMIUM 0 2, ,355 Feb Feb Feb (GCP) 12

13 Trends in consolidated sales (total and for each service) There was significant growth in accommodation sales due to the opening of hotels, and also in food and beverage sales at both existing facilities and new facilities. The share of room rates in overall sales declined to 51.8%. (it was 57.6% in the year ended February 28, 2017.) (Millions yen) 30,000 2,224 25,000 2,632 20,000 1,093 1,433 6,294 Others 15, ,356 4,004 4,657 2,135 2,672 Accomodations 10,000 1,682 F&B 5,000 10,304 12, % 14, % Options 0 Feb Feb Feb Room rent 13

14 Main openings in FY 2018 We continued investment on higher grades facilities where full service catering can be added. Period Open Name of facilities Object Area March TKP Osaka Sakaisuji Honmachi Conference Center Hotel banquet hall, meeting room Osaka 1Q (March-May 2017) 2Q (June-Aug 2017) 3Q (Sep-Nov 2017) 4Q (Dec 2017-Feb 2018) April TKP Sapporo Convention Hall Hotel banquet hall, meeting room Hokkaido April TKP Gardencity Hamamatsucho Hotel banquet hall, meeting room Tokyo April Bayside Hotel Azur Takeshiba City Hotel Tokyo May LecTore Yugawara Resort training hotel Kanagawa Aug LecTore Atami Momoyama (renewal) Resort training hotel Shizuoka Aug LecTore Hakone Gora (renewal) Resort training hotel Kanagawa Aug Kizuna Susukino S4 Restaurant Hokkaido Sep First Cabin TKP Nagoya Ekimae Compact Hotel Aichi Oct Apa Hotel <TKP Sapporo Kitaguchi>EXCELLENT (increasing room) Budget Hotel Hokkaido Oct TKP Garden City Hiroshima Ekimae Oohashi Hotel banquet hall, meeting room Hiroshima Nov LecTore Atami Koarashi (renewal) Resort training hotel Shizuoka Dec TKP Akihabara Conference Center Hotel banquet hall, meeting room Tokyo Dec Apa Hotel <TKP Tokyo Nishi Kasai> Budget Hotel Tokyo Jan TKP Garden City Premium Nagoya Lucent Tower Hotel banquet hall, meeting room Aichi Jan TKP Garden City Sakae Ekimae Hotel banquet hall, meeting room Aichi Feb TKP Hamamatsu Hall Hotel banquet hall, meeting room Shizuoka Feb Kyoto Shijo Ekimae Conference Center Hotel banquet hall, meeting room Kyoto 14

15 Numbers of facilities and conference rooms by grade High-price grades that include beverage sales 写真 写真 写真 Total Garden City PREMIUM (GCP) Garden City (GC) Conference Center (CC) Feb Feb Feb Feb Locations Rooms 1,410 1,536 1,752 1,858 Locations Rooms Locations Rooms Locations Rooms Reasonableprice grades Sub total Rooms 1,008(71%) 1,111(72%) 1,281(73%) 1,435(77%) 写真 写真 Business Center (BC) Star Rental Conference Room Locations Rooms Locations Rooms Sub total Rooms 382(27%) 405(26%) 442(25%) 401(22%) Training Center LecTore, Ishinoya Rooms

16 Summary of consolidated balance sheet and statement of cash flows (Millions Yen) Feb. end Feb. end (2-1) Amount Amount YoY Current asset 8,489 9,715 1,226 (Cash and savings) 5,494 5, (Receivable) 2,165 2, Fixed asset 15,650 24,815 ( ) 9,165 (tangible fixed asset) 10,822 17,021 6,199 Total assets 24,140 34,530 10,390 Current liabilities 5,284 7,971 2,687 Fixed liabilities 14,385 17,904 3,519 Total liabilities debt) Total net assets Total liabilities and net assets 19,669 25,875 6,206 16,607 21,359 4,752 4,470 8,655 4,185 24,140 34,530 10,390 (Million yen) FY ended Feb CF from operating activities 1,995 CF from investment activities -8,515 CF from financing activities 6,735 ( )Increased by under construction at Sendai and Kawasaki Hotel, land at two Fukuoka and Sotokanda, and invested securities for Otsuka kagu 16

17 TKP Corporation Future Business Strategy

18 TKP business policy Changing the world s unutilized capacity into valuable solution which demanded by society. Platform Underutilized assets Matching Users As a platformer, TKP adds value to idle capacity, and delivers them to the users who require them. Aiming to be a company that is essential to society. 18

19 Nationwide operation of conference rooms and banquet facilities As of April 2018, we are operating a total of 1,965 conference rooms in Japan and overseas. (The number at the end of February 2018 was 1,858.) Centering on major metropolitan areas, we are continuing to open facilities in high added-value grades. There has been significant growth in use of our facilities for training purposes. Hokkaido Japan 1,919rooms Overseas 46rooms 93rooms 札幌 帯広 Hokuriku Koshinetsu 八戸 Kyushu Okinawa 139rooms 博多 天神山口小倉 大分熊本 Kansa 412rooms 広島 鳥取 岡山神戸松山 京都 滋賀大阪 39rooms 金沢長野軽井沢松本大宮川崎名古屋横浜豊橋箱根 浜松 熱海 伊豆 郡山 宇都宮 東京千葉 秋田盛岡 仙台 Kanto Tohoku 143rooms 877rooms ミャンマー 台湾マレーシア香港シンガポール overseas ニューヨークニュージャージー 那覇 鹿児島 Chugoku Shikoku 74rooms Tokai 142rooms 46rooms As of April

20 TKP growth strategy (1): Expansion of the rental conference room and banquet facility business Plan to be +14.3% by the end of year(266 rooms) Confirmed rooms are already 220 rooms(+11.8%) Timing Area m2 Grade Miyagi 932 Coference Center Tokyo 5,663 Event Hall in Otsuka kagu Tokyo 425 STAR rental conference rooms Ishikawa 99 Business Center Osaka 3,040 Garden City Kyoto 2,273 Coference Center Miyagi 3,954 Garden City PREMIUM in Otsuka Kagu Kanagawa 2,731 Garden City PREMIUM Kanagawa 4,466 Garden City PREMIUM Tokyo 167 STAR rental conference rooms Tokyo 411 Business Center Tokyo 1,954 Coference Center Toyama 66 STAR rental conference rooms Tokyo 495 Coference Center Osaka 1,637 Garden City Saitama 700 Garden City PREMIUM Osaka 1,637 Garden City Okayama 1,515 Garden City Tokyo 791 Business Center Miyagi 1,297 Garden City TOkyo 1,217 Garden City PREMIUM Hokkaido 9,743 Garden City Tokyo 1,320 Coference Center Shizuoka 475 Coference Center Grade Locations m2 Garden City PREMIUM (including event hall) 6 5,676 Garden City 6 5,718 Conference Center 6 2,257 Business Center STAR rentarl conference Feb. end 2017 rooms Total 24 14,245 Feb. end 2018 April 2018, as of today 1,752 room 1,858 room 1,965 room YoY +6.0% +5.7% from Feb. Feb ,124 room(plan) +14.3% 20

21 TKP growth strategy (2): Strengthening sales by expanding contents and establishing a sales system Hotels & resorts Event operation and production Expansion of sales contents Rental conference rooms and banquet facilities Corporate sales Food & beverage catering Call center BPO Companies doing business with TKP Sufficient room for expansion centering on - Results of marketing following our listing on the TSE - Transitioning to a 6 sales division system * Average annual usage by of companies with top 500 sales increased 13% from FY 2017 to FY 2018, and the customer unit price is continuing to rise. listed companies We are establishing a system for breaking away from passive order-based sales to aggressive sales. We are also creating a customer database to identify potential customer needs. 21

22 TKP growth strategy (3): Approach to new space regeneration - 1 We are developing new possibilities for space use, starting from an alliance with Otsuka Kagu, Ltd. (1) 8F at the Otsuka Kagu Shinjuku showroom Opened March 14, 2018 as CIRQ Shinjuku. (2) 7F/8F at the Otsuka Kagu Sendai showroom Opened April 2, 2018 as TKP Garden City PREMIUM Sendai Nishiguchi. TKP is opening facilities in unused shop spaces, optimizing the building as a whole. This makes it possible for us to open at commercial facilities in good locations close to the station. Energizing both businesses through space regeneration 22

23 TKP growth strategy (3): Approach to new space regeneration - 2 [Weekdays] TKP (office building) Because use centers on companies, weekday operating rates are high. Commercial building Number of visitors is smaller than on holidays. Shower effect Use by corporate customers as an event facility increases the number of visitors to the building, and the shower effect can be expected to bring customers to tenant shops. Flow of people TKP shops Flow of people [Holidays] TKP (office building) Operating rates are lower than on weekdays Commercial building Can be used for purposes involving retail sales. Busy with shoppers on holidays. Making it possible to hold events for B-to-C It will be possible for TKP facilities to capture demand for exhibitions, retail sales events, and other events targeting individual customers, as well as other new uses. 23

24 TKP growth strategy (3): Approach to new space regeneration - 3 Making it possible to apply the shop space regeneration model to commercial buildings Commercial building Electronics retail stores Department stores Large bookstores Shop space regeneration model Improve space value by making effective use of excess space. Create showrooms that are optimized for the minimum necessary space. Changing shops from places where people buy things to places where people have experiences. Event space Rental conference rooms Co-working space Etc. Creation of modernized showrooms (balanced contraction) Shop regeneration Taking shape as a new type of space regeneration 24

25 TKP growth strategy (3): Approach to new space regeneration - 4 Difference between urban buildings in Japan and US Office building Otemachi weekday daytime NYC 5 th avenue all time Separation Shinjuku weekend, night Co-existing Commercial facilities Office building Commercial facilities 25

26 Mid-term plan (Millions yen) FY Feb (result) Mid-term plan till Feb. 2021(released Jan ) FY Feb. 2018YoY (YoY) FY Feb (plan) FY Feb (YoY) FY Feb (plan) FY Feb (YoY) FY Feb (plan) FY Feb (YoY) Sales 28, % 34, % 42, % 45, % 26 Operating income Ordinary income Net income 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 (Millions yen) 3, % 4, % 6, % 6, % 3, % 3, % 5, % 6, % 2, % 2, % 3, % 3, % Consolidated sales trend Year end was changed from May to Feb. in 2011 (plan)(plan)(plan) year

27 Hotel expansion plan 期 期 期 Name of facilities Total Resort type seminar hotel 写真 LecTore Number of location Upper class resort type seminar Ryokan 写真 Ishinoya Number of location Urban hotel 写真 Azur Takehiba Number of location Budget hotel 写真 Apa Hotel Number of location Compact hotel 写真 First Cabin Number of location Total sales 3.4 bil. Yen 5.2 bil. yen 8 bil. yen 27

28 Expansion strategy going forward 1 Provide higher added value to customers and aim to capture the training market. Value-added Training hotel brand LecTore 28

29 Expansion strategy going forward 2 With the rental conference room and banquet facility business as the core, we will expand in all directions into peripheral business areas. Accomdation 29

30 TKP Corporation APPENDIX

31 Corporate philosophy T K P otal ukan ー roduce Our logo symbolizes the flag waved by Liberty, in the famous painting Liberty Leading the People by Eugene Delacroix, and expresses our revolution to lead customers, society and employees in a better direction. TKP aspires to be a Space Regeneration & Distribution Company through the rental conference room business for companies, and create quality places, spaces and time, by making use of and adding value to underutilized properties and land and regenerating space TKP Corporation All rights reserved. 31

32 5 different grades to suit each purposes Operates 5 types of spaces including Garden City PREMIUM, Garden City, Conference Center, Business Center, Star Rental Conference rooms Garden City PREMIUM State-of-the-art luxury office banquet / conference rooms Suitable for diverse purposes, from conferences to banquets, with high-end interiors and unique atmosphere Garden City Hotel banquets, and office banquets with large multi-purpose halls Rental conference rooms in large hotels, with a strong focus on quality and suitable for various types of events Conference Center Suitable for office banquets (banquets that mainly consist of conferences) Covers a diverse range of business purposes, mainly conferences and seminars No. of locations: 14 No. of rooms: 160 Brand new / relatively new facilities No. of locations: 40 No. of rooms: 427 Mainly renovated facilities No. of locations: 83 No. of rooms: 915 Mainly renovated facilities Business Center Conference facilities with a focus on conferences (rather than banquets) Suitable for internal meetings, large and small Star Rental Conference Rooms Local community-based conference rooms Suitable for small-scale meetings/assemblies, by companies as well as individuals No. of locations: 51 No. of rooms: 330 Mainly renovated facilities No. of locations: 36 No. of rooms: 86 Mainly renovated facilities As of April

33 Stable client base Number of users per year has reached 24,000 companies. More than half of listed companies in Japan are TKP users. Repeat ratio is approximately 85%. Number of corporate users per year 24,000 High repeat user ratio New and repeat user ratio Number of users of listed companies per year 2,000 New Users 15% Average usage of rooms for top 500 clients 100 facilities per customer Repeat users 85% Repeat client means the client used our facilities FY 2018/2. 33

34 Optimizing the approach to each customer class Our current customer group structure has an extremely long tail. sales ~500 companies ~2500 companies 2500 companies~ Lead Lead Heavy users Potential heavy users One-off users, light users User classification Active proposals and care by VIP sales staff Digging up of user needs by designated sales staff, leading to higher revenues, building a relationship of trust, and turning users into repeat customers Efficient operations using call center and Cloudspace (no assigning of sales staff) 34

35 Market environment The training service market is expanding, while the number of MICE events is also steadily increasing. The market for corporate banquets in hotels is large. Strong potential for ancillary services such as dining & restaurants. Market size of corporate training services(2016) Advertising market(2016) (100 million yen) 5,200 5,080 4,970 5,000 4,860 4,790 4,800 4,670 4,600 4,400 4,250 4,200 4,000 3, Source: Yano Research Institute Corporate Training Service Market 2016 Size of hotel market(2016) Newspaper 6% Others 26% Internet 11% Overseas 1% SP/Event 14% Magazine 1% Leaflet 11% TV 25% Outdoor 1% Radio 1% Transportation 3% Size of dining/restaurant market(2015) Dining 21% Others 12% 1.93 trillion yen Weddings/Banquets 28% Accommodat ion 39% Source: Yano Research Institute 2016 Hotel Industry Ready-made food industry 21% restaurant 32.9 trilion yen 外食産業 76% Source: Fuji Economic Research Institute Restaurant Marketing Data 2016 No.3 35

36 Shareholders as of Sep. end 2018 Outstanding shares Shares out 33,110,000 shares # of shareholders:2,952 Major shareholders Shareholding ratio # of holding (shares) Rate of holding (%) 1 River Filed Co. Ltd. 13,468, Takateru Kawano(CEO of TKP) 10,040, Imon Corporation 2,543, Japan Trustee service 1,271, Japan Master Trust bank 725, TKP corporation 504, BNP Paribas Securities Services (Luxembourg) 367, Asset management service trust bank 298, State Street Trust bank 260, Nomura Trust bank 224, % Indivisual&Others Japanese corporations Brokerage firms 0.7% 1.5% 5.4% Shareholders Breakdown 35.7% 8.0% Financial companies Foreign companies Treasury stock 36

37 Corporate Overview TKP Corporation Name TKP Corporation K.K. Convenistation Rental conference room service Headquarter 2F, TKP Ichigaya Building 8 Ichigaya-Hachimancho Shinjuku-ku, Tokyo K.K. TKP Properties K.K. TKP Telemarketing Building management service Telemarketing service Established August 15, 2005 Representative Director Takateru Kawano Capital JPY 287,795,000 No. of employees Business 1,104 (as of Feb. 2018) excluding part-timers Space Regeneration & Distribution Company Hotel banquet hall and rental conference room business Dining & catering business Hotel & resort business Event operation & production business Call center & BPO business K.K. Tokiwaken foods K.K. TKP Medicalink 3L entrance K.K. Majors K.K.. TKP MEETING AND CONFERENCE (M) SDN. BHD. TKP International Limited TKP New York, Inc. TKP SINGAPORE IN PTE.LTD. TKP New Jersey LLC K.K. TKP SPV No.1~6 Dining service Operation & support service for medical academic conferences Rental office / co-working service Event produce/ Event management system Rental conference room / dining / optional services Rental conference room / dining / optional services Rental conference room / dining / optional services Rental conference room / dining / optional services Rental conference room / dining / optional services Accommodation services 37

38 [Disclaimer] This is English translation only for the purpose of reference. Please be sure to refer to the original version. This material has been prepared to improve understanding towards our group, and no information contained herein shall be construed as solicitation for purchase or sale of our shares. This material has not been prepared for investment advisory purposes. Forecasts etc. contained in this material are estimates, based on information available to the TKP group at the time of preparing the material, and will be impacted by uncertainties including market conditions and future business progress. Please be informed that the actual results etc. could differ significantly from what is stated in this material. 38