Results of Operations for the First Half of 2015 · 2019-06-13 · 1H 2014 1H 2015 YoY change（8月8日発表） Non-consolidated Subsidiary (Afteradjustment) Net sales 41,525 42,317

http://www.bellpark.co.jp Copyright Bell-Park Co., Ltd

Results of Operations for the First Half of 2015

(Six months ended June 30, 2015)

August 12, 2015Bell-Park Co., Ltd.

(Stock code: 9441)

http://www.bellpark.co.jp/

http://www.bellpark.co.jp Copyright Bell-Park Co., Ltd2

I. Financial Highlights

II. 2015 Revised Plan

III. Market Outlook and Bell-Park Goals

Appendix: Profile of Bell-ParkIR Information

Contents


I. Financial Highlights

Results of Operations and Financial Position


（8月8日発表）1H 2014 1H 2015 YoY changeNon-consolidated Subsidiary

(After adjustment)

Net sales 41,525 42,317 791 -36 828(100.0%) (100.0%) +1.9% -0.1% +67.1%

Operating income 1,564 1,685 121 0 120

(3.8%) (4.0%) +7.8% +0.0% +7,334.5%

Ordinary income 1,536 1,732 195 100 95

(3.7%) (4.1%) +12.7% +6.5% +4,803.6%

Net income 772 977 204 145 58(1.9%) (2.3%) +26.5% +18.9% +6,880.6%

Subsidiary Bell-Park Next (formerly OC mobile), which was acquired in February 2014, contributed to the growth in sales and earningsAs announced on August 5, sales were below the initial plan and earnings were higher

（Comp.)

Consolidated 1H 2015 Financial Highlights

(million yen)

（Comp.)

（Comp.)

（Comp.)


•Non-consolidated sales down slightly (excessive MNP competition in 1Q 2014) as new-subscriber sales volume decreased and replacement sales volume increased

•Subsidiary Bell-Park Next was consolidated starting in 2Q 2014

•Sales promotion expenses down because of the declines in new-subscriber sales volume and MNP commissions

•Personnel expenses and rent increased due to the growth in the number of shops

5

Non-consolidated gross profit down; profit benefited from higher support payments received for shops with strong performance and fees associated with fiber-optic services and trade-ins; negative impact of big declines in handset new-subscriber sales volume and MNPcommissions (excessive MNP competition in 1Q 2014)

Net sales: +791 million yen

Gross profit: -591 million yen

SG&A expenses: -712 million yen

Ordinary income: +195 million yen

•Gain on sales of investment securities: 40 million yen•Increase in income taxes due to higher income

before income taxes: 31 million yen

Net income: +204 million yen

•Gain on investments in partnership: 30 million yen•Foreign exchange loss of 39 million yen in 1H 2014

1H 2014 1H 2015 YoY change

Net sales 41,525 42,317 791(Comp.) (100.0%) (100.0%) +1.9%

Gross profit 9,686 9,095 -591(Comp.) (23.3%) (21.5%) -6.1%

SG&A expenses 8,122 7,409 -712

(Comp.) (19.6%) (17.5%) -8.8%

Operating income 1,564 1,685 121

(Comp.) (3.8%) (4.0%) +7.8%

Ordinary income 1,536 1,732 195

(Comp.) (3.7%) (4.1%) +12.7%

Net income 772 977 204(Comp.) (1.9%) (2.3%) +26.5%

1H 2015 Comparison of Financial ResultsConsolidated

(million yen)

Components of YoY changes


II. 2015 Revised Plan


Revised outlook

7

Commissions- No change in the post-April 2014 level of MNP

commissions- Carriers will establish commission structures that

reward the high-performing sales agents

- To avoid the excessive sales competition like that of 1Q 2014, sales commissions will be steady with some ups and downs for some individual commissions

- Foresee a continuation of placing priority on performance

SG&A expenses- Continuing investments in human resources- Reexamining all expense items, such as

performing more employee training internally, cutting overtime, and reviewing rent and company event expenses

-Revised the workforce plan and increasing recruiting activities to upgrade direct customer interaction involving fiber-optic services and other items Higher recruiting and personnel expenses

-Progress as planned with internalizing training and reducing overtime

-Lower sales promotion expenses to reflect the reduced sales plan

No. of units sold- Sales of handsets to new subscribers expected to fall

more than 10% from 2014- Replacement sales also expected to fall compared

with 2014- SoftBank’s goals are expected to place more

emphasis on sales of normal ARPUSoftBank Mobile new-subscriber (normal ARPU) sales volume plan2014 results: 309,000 handsets2015 outlook: 285,000 handsetsInitial plan with stretch goal: 330,000 handsets

The sales volume plan is lower but fiber-optic service sales, which were not included in the initial plan, are expected to offset this decline

Revised plan for SoftBank Mobile new-subscriber (normal ARPU) sales volume:

280,000 handsets

The new-subscriber (normal ARPU) sales volume forecast has been reduced because of 2015 first half sales at SoftBank Mobile and Bell-Park shops

Revised outlook

Revised outlook

Revisions to 2015 OutlookConsolidated


2015 Revised Plan

（15.2.13発表）（15.8.5発表）

Initial plan Revised planChange 2014 Results Change

Net sales 95,900 87,873 -8,026 91,485 -3,612(100.0%) (100.0%) -8.4% (100.0%) -3.9%

Operating income 2,540 2,593 53 2,369 223

(2.6%) (3.0%) +2.1% (2.6%) +9.4%Ordinary income 2,540 2,639 99 2,492 147

(2.6%) (3.0%) +3.9% (2.7%) +5.9%

Net income 1,410 1,482 72 1,332 149(1.5%) (1.7%) +5.1% (1.5%) +11.2%

(As of Feb. 13, 2015)

(As of Aug. 5, 2015)

Planned sales are lower because of the sales plan reduction, but planning on higher earnings backed by fiber-optic service sales, the effective use of each marketing campaign and the performance of subsidiary Bell-Park Next

Consolidated

(million yen)

（Comp.)

（Comp.)

（Comp.)

（Comp.)


III. Market Outlook and Bell-Park Goals


Market Outlook – Initial Forecast and Actual Conditions

×? Emergence of many Mobile Virtual Network Operators (MVNO)More MVNO cause a further drop in ARPU The impact of MVNO on our industry is not significant at this time

◎◎ Mobile Network Operators (MNO) are selecting sales agents more carefullyCreates an opportunity for strong sales agents to open more shops Mainly the replacement of weak sales agents because of the limited opportunities for opening completely new shops

？？ Requirement for unlocked SIM phonesThe effect of an early removal of the SIM lock is difficult to predict. Installment sales payments for phones will remain, and there are also negative effects like the inability to offer discounted phone use rates. Currently monitoring the situation because the effects will start appearing from the winter of 2015

？？ Start of repair businesses by new entrants in the mobile phone sector

○△ Start of sales of phones and fiber-optic lines as a single package A trade-off because of the larger volume of work for shops along with the decline in new-subscriber sales volume in 2015

*The current situation is shown in red letters(Each symbol indicates effect on Bell-Park)◎ significantly positive effect; O positive effect; △ slightly positive effect; X negative effect; and ? unclear


2H 2015 Outlook for Market Conditions

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(1) The start of the war to build multi-faceted customer relationships

With few differences among mobile phone services, competition among MNOs is now focusing on the start of the war to build multi-faceted customer relationships.

For families Bundle with fiber-optic services Use affiliation points and credit cards to target

customers’ wallets Bundle with electricity sales

High probability that more customers will be establishing long-term relationships with a single carrier



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(2) Effects of more long-term customer relationships (MNO)

MNO priority has been “defend and attack” (limit MNP subscriber losses and target MNP subscriber inflows), but increasing MNO customer loyalty will slow down MNP subscriber migration= Fewer new-subscriber sales, more handset replacement

sales

MNO business climate may soon make it difficult to be a big winner or a big loser

However, repeatedly being a small loser will alter the market position of an MNO. As a result, MNOs face the dilemma of needing to avoid losing



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(2) Effects of more long-term customer relationships (Sales agents)

As new-subscriber sales decrease and replacement sales increase, earning profits will become more difficult for sales agents if there are no changes to the conventional system of fees proportional to sales volume and fees that prioritize new subscribers and MNP

MNO recognize this problem and are revising the fee structure as needed

= Changes will probably cause a shift in emphasis on the increasing the quality instead of the quantity of sales



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(3) Raise sale per customer not only by serving more customers but also by selling products and services of companies in other industries

Use smartphones, the key element for the Internet of things, to speed up growth in sales per customer by selling a diverse array of products and services Carrier shops are quality sales channels and strategic

bases for establishing relationships with customers who have strong brand loyalty. Also, carrier shops are channels for selling the products and services of companies in other industries.

Sales of these products and services are an enormous growth opportunity for the mobile phones sales agent industry



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(4) Recruiting and training activities will be even more critical to success

Compared with employees at conventional retailers and service companies, to succeed in the age of the Internet of things, staff at carrier shops will have to acquire new knowledge much more frequently, pay more attention to details to avoid mistakes, have superior consulting skills needed to address customers’ concerns about the new environment created by the Internet of things, and have more powerful initiative to create innovative proposals for customers.

Sales agents must have the resources to recruit and train skilled employees, the earnings to support compensation that matches their performance and the corporate culture to provide employees with mental healthcare


Human Resource Investments and Results

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This is why we established a training center, raised salaries in 2015, increased standards for hiring new workers, created training programs for ages and specific job positions, examine actual working time (including overtime), hold internal events to boost motivation, and offer many other activities for our employees

Example of a result of these investments25th SoftBank Mobile Qualifications Exam Results464 of 554 Bell-Park employees (84%) who took this exam passed (large number of people taking and passing this exam)

Bell-Park employees account for about 25% of all people who have earned the highest SoftBank Mobile qualification

Bell-Park believes that people are the biggest source of differentiation in the mobile phone sales agent industry


(1) Invest in people, who are the most important factor for differentiating Bell-Park from competitors.

(2) Do our best to avoid downturn in earnings for a second consecutive year.Improve customer satisfaction and take many actions for raising efficiency and productivity.

(3) Maximize the performance of each marketing campaign, such as selling packages that include a fiber-optic line (target every opportunity to earn profits).

(4) Promote to upgrade shops.(5) Reexamine all expense items to build a more powerful

framework for operations.(6) Use the strong balance sheet to seek M&A opportunities

Bell-Park Goals for 2H 2015


Record date 2Q-end Year-end Total Dividend yield

Fiscal year 2015 15 yen 15 yen 30 yen 1.10%*

2015 Shareholder Returns

Dividends

Basic policy: Return earnings to shareholders in a stable and consistent manner

Consistently increase retained earnings and target big opportunities for growth

* Based on the closing price on August 11, 2015

Special benefit plan for shareholders

Shareholders who own at least one trading unit (100 shares) will receive a QUO card worth 1,000 yen at the end of the first half of each year and the end of each year

Dividend yield including dividend and QUO card is 1.84%* (Dividend yield when one trading unit is owned)

* Based on the closing price on August 11, 2015


“Our goal is to provide mobile-related services to bring more happiness to our customers’ lives while using mobile-related services to create new markets.”


Appendix


Profile of Bell-ParkName: Bell-Park Co., Ltd.Business: Information and communication device sales and service business Founded: February 2, 1993, 23rd Fiscal yearHeadquarters: Sanshin Hirakawa-cho Building, 1-4-12 Hirakawa-cho, Chiyoda-ku, Tokyo Capital: 1,148 million yenStock listing: May 25, 2000, Tokyo Stock Exchange JASDAQ Standard (Stock code: 9441)Market cap: 18,332 million yen (closing price on August 11, 2015)

Bell-Park group employees: 1,817 (full time: 1,115; temporary: 702) Average age: 28.9 (parent basis)

Bell-Park group stores: 238 SoftBank Shops8 Docomo Shops8 au Shops9 Y!mobile Shops3 Apple related stores1 Bell-Park Brand Shop(Total : 267 stores)

Shop network: http://www.bellpark.co.jp/shop/

Investment IndicesStock price (closing price of August 11, 2015): 2,723 yen * Minimum investment unit: 100 shares

Year high: 3,000 yen (May 11, 2015)Year low: 2,400 yen (January 13, 2015)10 years high: 3,650 yen (April 18, 2013)

2015 PER forecast: (consolidated) 11.78(non-consolidated) 12.55

2014 PER results: (consolidated) 13.13(non-consolidated) 13.21

2014 PBR results: (consolidated) 1.19(non-consolidated) 1.19


IR Information

Information for understanding and analyzing Bell-Park is available through many channels.

As a rule an official announcement is made by every ten business days.http://www.bellpark.co.jp/ir/news/salesdata.html

Macquarie Capital Securities, Tachibana Securities, Shared Research, Investment Bridge

Shared Research (Live report of our company by a former fund manager)http://www.sharedresearch.jpInvestment Bridge (Report targeting individual investors)http://www.bridge-salon.jp/database/code_9441.html

Announcements of the volume of monthly sales

Analyst coverage: four companies

Analyst report


National Association of Mobile-phone Distributors

Bell-Park president Takeru Nishikawa is a vice president of the National Association of Mobile-phone Distributors. We play an important role in activities for reducing the number of customer complaints and improving the quality of services at mobile phone agent shops.

◆Website URL: http://www.keitai.or.jp/


Forward-Looking Statements

All plans, strategies and financial forecasts that are not based on historical facts are forward-looking statements. Such statements are based on the judgment of management in accordance with information available when these materials were prepared. Actual results may differ significantly from these statements due to changes in the operating environment and many other factors.

Documents

Results of Operations for the First Half of 2015 · 2019-06-13 · 1H 2014 1H 2015 YoY change（8月8日発表） Non-consolidated Subsidiary (Afteradjustment) Net sales 41,525 42,317