Slides
Page 1
GLORY Investor Presentation Manufacturing is evolving to the next stage No manual handling of currency for trouble - free operation GLORY products in a variety of settings for services that can be used with peace of mind Listing Tokyo ( Prime ) Securities code 6457 GLORY
Page 2
Contents p. 3 - 10 2 1. Who We Are 2. 2023 Medium-Term Management Plan 3. Financial Results and Forecast/Shareholders Return 4. Sustainability Reference Notes 1. Amounts are rounded down to the nearest million yen for calculating percentages of year-on-year changes and composition ratios. 2. The company has changed the classifications for main products in the reportable segments beginning in the year ending March 2017. Financial figures of 2015 result and 2016 forecast are based on the segment classifications after the change. 3. Revenue and expense accounts of foreign subsidiaries were previously translated into Japanese yen at the prevailing current exchange rate as of the respective balance sheet date. However, from the first quarter ended June 30, 2015, the company has opted to use the average exchange rate for the respective period. This change in accounting policy is retrospectively applied and the figures of the financial results for 2014 in this material reflects the retrospective application. 4. The forward-looking statements, such as the operational forecasts contained in this document, are based on the information currently available to the company, as well as certain assumptions the company regards as legitimate and are not considered promises regarding the achievement of forecasts. Actual performance may vary greatly from these forecasts due to changing market conditions. p. 11 - 32 p. 33 - 40 p. 41 - 45 p. 46 - 49
Page 3
■ Overview of GLORY ■ Core Strengths ■ Products and Services ■ Sales Trend ■ Market Share ■ Business Outlook and Environment p. 4 1. Who We Are p. 5 p. 6 p. 7 p. 8 p. 10
Page 4
1. Who We Are (as of March 2023) Overview of GLORY Founded Capital Head Office Employees FY2022* Consolidated Results Core Business Global Network 4 March 1918 ¥12,892 million Himeji, Hyogo, JAPAN 10,792 (Consolidated) Net sales ¥ 255.8 billion Operating income ¥ 0.5 billion *Fiscal year: April 1st - March 31st ➢ Development, manufacturing, sales, and maintenance of cash handling machines and self-service equipment ➢ Provision of electronic payment services, biometric authentication and robot solutions Manufacturing (6) Sales (8) Domestic (14) Overseas (79) 93 subsidiaries (as of March 2023) (America, Europe, China, and others)
Page 5
R&D facilities 16 in 9 countries 1Core Technologies 2 3 4 ●Recognition/ identification ●Mechatronics which distinguishes counterfeit from genuine and identifies dirty and/or damaged banknotes which handles money with accuracy & speed ●Innovation based on core technologies ●DX solutions ●Global customer base ✓ Financial institutions ✓ Retail stores ✓ Medical institutions ●Customers’ confidence For efficient and rigorous operations of our customers ●Cash-generating capability ●Strategic fund allocation 5 Core Strengths 1. Who We Are Problem-Solving Capabilities Customer Base Financial Base R&D personnel Approx. 1,400 Business in more than 100 countries Rating and Investment Information, Inc. A rating which supports investment for growth and stable shareholder return which supports medium- to long-term value creation which combine products and new digital services
Page 6
B-LINK Financial Retail and Transportation Overseas Amusement Others ✓ Biometric/image recognition ✓ Robots 6 1. Who We Are Products and Services Contact-free and self-service applications Next-generation store technologies Store DX support Electronic payment Cash management Digital services Biometrics/image recognition Robot technologies Shared services Ticket vending machines Self-service kiosks Lobby self-service terminals Products Digital Transformation (DX) Artificial Intelligence (A)) Internet of Things (IoT) Data Management Platform (DMP) Data analytics Online cash payment platformBiometric/image recognition Automation / Labor-Saving Solutions × ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ▶ ■ Products and Services by Segment Digital services Shared services Product management system Monitoring services ➢ Facial-recognition system ➢ Fall detection system ➢ Facial-recognition-driven system Open teller systems Coin and banknote recyclers for tellers ▶ Coin and banknote recyclers for cashiers Data utilization service Online-to-offline member service ▶ ▶
Page 7
7 Financial Amusement Retail and Transportation Overseas Financial institutions Supermarkets, specialty stores, hospitals, cash- in-transit companies, railroad companies Amusement halls (pachinko parlors) Financial institutions, retail stores, QSR, cash-in-transit companies Others Manufacturers of housing equipment and building materials, laboratories Sales ratio ▶FY2021 Overseas sales exceeded the domestic sales for the first time. Domestic 39% Overseas 61% (billion) 1. Who We Are Sales Trend 39 Domestic 70 Products & goods 103 104.2 105.5 103.7 106.7 103.2 103.6 104.7 127.8 155.9 45.6 48.1 51.8 53.3 53.9 56.6 42.2 49.8 36 36.231 29.8 45.5 42.6 43.2 51.9 52.4 49 47.8 45.5 24.8 25.4 21.5 20.4 20.5 20.5 20.7 11 12.1 15.1 14.1 14.6 2.5 2.4 2.8 3.3 5 2.6 2.6 2.9 0 100 200 300 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Others Amusement Retail & Transportation Financial Overseas 218.6 222.3 226.9 222.5 227.3 235.7 224.1 217.4 226.5 255.8
Page 8
Banknote recycler for tellers ▶ Competitors ARCA (U.S.) Diebold Nixdorf (U.S.) ▶ MIF 150,000 Supermarkets ✓ Automated banknote deposit & withdrawal machine ✓ Enhances security for teller operations ▶ Competitors Diebold Nixdorf (U.S.) Zivelo (U.S.) ▶ MIF 255,000 ▶ Competitors Diebold Nixdorf (U.S.) ▶ MIF 35,000 ▶ Competitors Strongpoint (Norway) Gunnebo (Sweden) ▶ MIF 120,000 Banks ✓ Self-checkout system for customers ✓ Removes the need for staff to handle cash at the point of sale Self-service kiosk ✓ Self-service system installed in QSRs ✓ Supports customers’ orders and non-cash payments Glory ✓ Automated banknote deposits and withdrawal machine ✓ Reduces the burden and risk of back-office cash processes ✓ Accelerates start and end of day processes 8 1. Who We Are Market Share - Overseas Coin and banknote recycler for back offices Coin and banknote recycler for cashiers *Based on GLORY’s research as of March 31, 2022
Page 9
Open teller system Sales proceeds deposit machine ▶ Competitors Laurel Bank Machines Oki Electric Industry ▶ MIF 29,500 Banks Supermarkets ✓ Quickly counts, sorts, and bundles cash and checks ✓ Supports back-office operations ▶ Competitors Laurel Bank Machines ▶ MIF 65,000 ▶ Competitors Fuji Electric Toshiba TEC ▶ MIF 500,000 ▶ Competitors Hitachi Channel Solutions ▶ MIF 50,000 9 1. Who We Are Market Share - Japan *Based on GLORY’s research as of March 31, 2022 Coin and banknote recycler for cashiers Banknote recycler for tellers ✓ Automated banknote deposit and withdrawal machine for financial institutions ✓ Enhances security in teller operations Glory ✓ Automated banknote deposits and withdrawal machine ✓ Reduces the burden and risk of back-office cash processes ✓ Accelerates start and end of day processes ✓ Self-checkout system for customers ✓ Removes the need for staff to handle cash at the point of sale
Page 10
103 227 112 255 335 0 100 200 300 400 1H Full year 1H Full year Full year （¥ billion） Sales 5.7 10.2 -4.7 0.5 35.0 -10 0 10 20 30 40 1H Full year 1H Full year Full year Financial Outlook Business Environment Operating income 2021 (Result) 2022 (Forecast) 2023 (Target) Financial Outlook and Business Environment 10 1. Who We Are - High parts prices is easing. - Parts procurement eased gradually from Q3. - On a recovery trend as production impacts eased in Japan and overseas from Q3. - Remained steady in Japan and overseas. - Remained high order backlog in the Americas and EMEA. - Tight shipping conditions and logistics costs gradually ease. Demand Procurement Logistics Sales Initiatives Procurement Price - Ongoing procurement of alternative parts/materials. - Ongoing optimization of our supply chain - Ongoing negotiation with customers for price increase. (To be reflected in the earnings actually in FY2023 onwards) （¥ billion）
Page 11
■ Concept ■ Growth strategy ■ Basic Policy / Performance Targets ■ Key Initiatives ■ Performance Target by Business Segment ■ New Business Domain Targets ■ Overseas Business Strategy ■ Domestic Business Strategy ■ Capital and Financial Strategies / Investment Plan ■ Overseas M&As ■ FY2023 Initiatives p. 12 p. 13 p. 14 p. 15 p. 16 p. 17 p. 18 p. 21 p. 24 p. 25 p. 26 2. 2023 Medium-Term Management Plan
Page 12
12 2. 2023 Medium-Term Management Plan Concept Core and New businesses powering growth together Digital services DMP business Kiosk business Self-service products Products for overseas market New business domain Core business domain
Page 13
Growth Strategy 13 2. 2023 Medium-Term Management Plan Aim at continuous growth and business expansion by core and new businesses powering growth together
Page 14
14 2. 2023 Medium-Term Management Plan Basic Policy / Performance Targets Accelerate business growth to develop “next generation” Maximize core business profits by innovation Business Strategy Management Base Concept Basic Policy Performance Targets FY2023 Sustainability Policy Core and New businesses powering growth together 12.0％ or more ¥300billion Operating income ¥35billion 9.5％ or more¥30billion ROE New business domain Net sales After amortization of goodwill Before amortization of goodwill After amortization of goodwill Before amortization of goodwill ¥40billion Contribute to the sustainable growth of society and promote measures to improve corporate value Establish management base to support sustainable growth
Page 15
⚫ Reduce CO2 emissions by 15% (vs. FY2013) to contribute to carbon-neutrality ⚫ Respect human rights and diversity ⚫ Strengthen corporate governance Key Initiatives 15 2. 2023 Medium-Term Management Plan Key Initiatives Ⅰ Basic Policy ⚫ Expand new business domain which has a high affinity with core business domain (kiosk services, data management platform <DMP*>, electronic settlement, etc.) ⚫ Improve profits in biometric/image recognition and robot business through domestic sales channels Ⅱ Maximize core business profits by innovation Ⅲ Establish management base to support sustainable growth Sustainability Policy Coin and banknote recyclers for cashiers Open teller systems CI-series KIOK GLR-series Business Strategy Management Base Main Products/Services ⚫ Enhance cash-generating ability to support growth investment and fulfilling shareholder returns ⚫ Promote Digital Transformation (DX) for speedy management decisions such as by introducing a new ERP system ⚫ Improve employee engagement Contribute to the sustainable growth of society and promote measures to improve corporate value ⚫ Provide the product/service lines that cater to the need for contact-free, self-services devices ⚫ Release the latest-model products, including teller cash recyclers (TCRs) and coin and banknote recyclers for cashiers ⚫ Leverage the replacement demand coinciding with new banknotes issue in Japan Accelerate Next Generation business growth *DMP (Data Management Platform): A platform to gather, store and manage data from internal and external sources, using the ‘AIBeacon’ technology of AdInte, with whom we have a capital and business alliance
Page 16
98.7 99.9 170.0 150.0 127.8 155.9 165.0 150.0 +33.1% +43.3% +3.5 pt. (¥billion) 300.0 226.5 FY2021 (Result) FY2023 (Target) Performance Target by Business Segment 255.8 FY2023 (Forecast) 16 2. 2023 Medium-Term Management Plan Operating margin (vs FY2020) Domestic business (vs FY2020) Overseas business (vs FY2020) Net sales Operating margin FY2022 (Result) 335.0 4.5% 0.2% 10.4% 10.0%
Page 17
Performance Target – New Business Domain 17 2. 2023 Medium-Term Management Plan ■ Kiosk business (Acrelec) ■ Increase access to cash in place of ATMs ■ Expand sales of new digital service solution using cloud service (UBIQULARTM) ■ Biometric/image recognition businesses ■ Electronic settlement business Performance Targets ¥40.0 billion ■ Robot business ■ DMP business Extension from core business domain New business Overseas Core business domain ¥260 billion New business domain ¥40 billion Domestic Extension from core business domain
Page 18
EUR Retail Expanding Beyond Cash! Overseas Business Strategy - Overview 18 2. 2023 Medium-Term Management Plan Sales by geographical segment Financial - Expand sales of coin and banknote recyclers for cashiers, capturing the needs for self-services machines - Enhance global expansion of back- office products - Boost CI Series sales through integration with kiosks and digital services (UBIQULAR) - Expand sales of the latest model of TCRs - Strengthen sales of self- service products/services (GLR Series, TellerConcierge, etc.) - Realize swift synergy with Acrelec - Increase access to cash in place of ATMs (Joint project with OneBanks) - Expand sales of new digital service solution using cloud service (UBIQULAR) 42 66 75 51 49 52 55 50 12 15 12 18 20 23 24 32 New bisines Asia EMEA Americas FY2021 (Result) FY2022 (Result) FY2023 (Target) FY2023 (Forecast) New business domain Core business domain USD ¥112 ¥130 ¥135 ¥141 ¥130 ¥135 ¥110 ¥120 *OEM sales included in regional sales. (¥billion) Core business domain New business domain 165.0 127.8 155.8 150.0
Page 19
Overseas Financial Institutions 19G-200 series RBG series For efficient teller operations For self-service operations GLR series (New TCR model) Expand sales of TCR and self-service products Remote Management Device Monitoring Remote Updates Scheduled Actions Device Health Cash Reports Remote Management Device Monitoring Remote Updates Scheduled Actions Device Health Cash Reports Remote Management Device Monitoring Remote Updates Scheduled Actions Device Health Cash Reports Transaction Analytics Cash Utilization Analytics Cash Reports Device Effectiveness Teller / Cashier Activity Transaction Analytics Cash Utilisation Analytics Cash Reports Device Effectiveness Teller / Cashier Activity Change Ordering / Forecasting CIT Management Provisional Credit Cash Reconciliation Cashier/Device Accounting Centralized Period Reports Connecting intelligence across your world Delivering high impact actions from insight Optimizing your Total Cash Chain Asset Optimization Process Optimization Treasury Optimization Core business domain New business domain Expand sales of UBIQULAR™, our new digital service solution Cloud service to provide the following functions in connection with GLORY products Cloud service 2. 2023 Medium-Term Management Plan - Overseas Business Strategy Bridge (Remote monitoring) Inform (Business analysis) Manage (Cash managed services) TellerConcierge
Page 20
(9 months) コア事業 1. Develop the US market 2. Strength drive-thru sales 3. Promote set sales of KIOSK and CI 0 10 20 30 FY2020 FY2021 FY2022 FY2023 (¥billion) Sales Trend Self-checkout system combining Kiosks and CIs Acquisition Date：February 2020 Amount：¥24.2 billion Office France Forecast 20 Core business domain New business domain Overseas Retail Industry Front-office solutions Back-office solutions Coin and banknote recycler for cashiers Meet the growing needs for contact-free & self-service solutions Realize swift synergies with Acrelec 2. 2023 Medium-Term Management Plan - Overseas Business Strategy Coin and banknote recycler for back offices Kiosks installed in a major QSR in Europe
Page 21
Common Key InitiativesSegment ➢ Response to the issuance of new banknotes - Fulfill the corporate mission of supporting social infrastructure - Seize replacement demand from the issuance of new banknotes Financial ➢ Strengthen solutions to self-service machines for next-generation stores ➢ Create added value by introducing IoT technology to the existing products Retail / Transportati on ➢ Expand sales of self-service machines catering to the market needs for contact-free, self-service operations ➢ Expand the product line and make inroads into untapped markets by introducing new business models Amusement ➢ Strengthen sales of products that support amusement machines with less gambling elements ◼ DMP* business By combining IoT products and DMP , support promotion of DX at financial institutions, retailers, restaurants, etc. ◼ Electronic settlement business Expand sales of the settlement fee business and automatic post-care medical payment processing ◼ Biometric/image recognition business Expand to new domains (healthcare, long-term care, railway, logistics, etc.) that utilizes biometric/image recognition technology ◼ Robot business Provide total solutions by tapping into the customer base gained through the core business 21 2. 2023 Medium-Term Management Plan Domestic Business Strategy - Overview Create added values and expand business domain centering on current customers New business domain Core business domain Sales by business segment *DMP (Data Management Platform): A platform to gather, store and manage data from internal and external sources, using the ‘AIBeacon’ technology of AdInte, with whom we have a capital and business alliance 36 36 70 63 12 15 26 18 48 46 70 57 3 3 5 4 8 New businesses Others Retail & transportation Amusement Financial Core business domain New business domain FY2021 (Result) FY2022 (Result) FY2023 (Target) FY2023 (Forecast) (¥billion) 170.0 98.7 99.89 150.0 *FY2021 & FY2022 new business domain sales are included in “Retail and Transportation Market" and "Others." * * * * * *
Page 22
22 ●B-LINK (Product management system) Tax and official payment deposit station <FKR series> Self deposit machines <SDM series> Electronic data entry tablet Open teller systems <WAVE series> ●Respond strategically to new banknotes issuance scheduled for 2024 Provide solutions in response to changes in the market Create added value with IoT Promote efficient operations of financial institutions by visualizing the trend of; ➢ Cash handling (e.g open teller system) ➢ Staff operational history (e.g. key/security storage system) ➢ Customer visiting hours (e.g reception system) ● Extend the lineup of self-service products installed at branch lobbies ● Provide next-generation store solutions Propose next-generation store solutions for financial institutions Domestic Financial Market Core business domain New business domain 2. 2023 Medium-Term Management Plan - Domestic Business Strategy
Page 23
Automatic settlement kiosk <FGH series> ●Promote Digital Transformation (DX) for retailers and restaurants with data utilization service ‘BUYZO’ AIBeacon GLORY OMO/BOPIS O:der Platform Entering into the retail media business Using consumer purchase/behavior data obtained from BUYZO, advertisers can deliver retail advertisements that match consumer attributes and preferences via smartphone apps and in-store signage. NEW! Joint development with Acrelec 23 Domestic Retail Market Core business domain New business domain Meet the needs for contact-free & self-service operations ● Provide products and services to meet the need for contact-free and self-services solutions ● Expand the product line and make inroads into untapped markets by introducing new business models Coin and banknote recycler for cashers <RT/RAD series> Touch-screen ticket vending machine <VT-T series> Data utilization service Expand our DMP business A collective term for Glory’s DMP businesses that offers one-stop solutions based on the analysis of data gathered from Glory’s products and other services. Data from Glory’s products Future business partners Self-order kiosk <FGK-T series> Medical payment kiosks <FFH series> 2. 2023 Medium-Term Management Plan - Domestic Business Strategy
Page 24
Capital and Financial Strategies / Investment Plan 24 2. 2023 Medium-Term Management Plan Capital expendituresShareholder return 41.9 45.0 ¥45.0 billion ●Strategic investment (incl. M&A for core and new business domains) ●R&D investment ●Capital expenditure 28.7 30.0 ¥28.7 billion (2020 MTP) ¥45.5 billion (2020 MTP) ¥41.9 billion (2020 MTP) ■2023 MTP Investment Plan (3-year total)■Capital and Financial Strategies ✓ Upcoming adoption of IFRS ✓ Cash-generating capability to support investment for growth and stable shareholder returns • Best shareholder return based on the cash flow in consideration of balance with growth investment 01 Financial soundness 02 Growth investment 03 Shareholder return Maintain right balance Credit rating of A (by R&I) • Equity ratio : 50% or more • D/E ratio : 0.6 or less • Upper limit of procurement : 50 billion yen Measure (1) Investment for growth • Strategic investment based on the performance of the 2020 Medium- Term Plan Measure (4) Measure (5) Dividend policy • Continue stable dividends • 30% or more for the payout ratio before goodwill amortization (3-year average) Measure (2) Measure (3) ¥30.0 billion ¥45.0 billion 2020 MTP 2023 MTP 2020 MTP 2023 MTP 2020 MTP 2023 MTP 45.5 45.0 • CAPEX based on the performance of the 2020 Medium-Term Plan
Page 25
25 2. 2023 Medium-Term Management Plan Overseas M&As (after 2010) Expanding direct sales & maintenance networks 2010 Sitrade Italia S.p.A. (Italy) 2012 Talaris Topco Limited (U.K.) 2015 Advanced Transaction Systems Ltd. (New Zealand) 2016 In-Tech, LLC (Russia) 2018 Semeci Limited (Ireland) 2019 CTS Solutions S.r.l. (Italy) 2019 Grupo Sortek, S.A. de C.V. (Mexico) 2021 Revolution Retail Systems, LLC (U.S.) Cash4.0* 2019 SOCASH PTE. LTD. (Singapore) 2020 viafintech GmbH (Germany) 2021 Unified Financial Limited (OneBanks) (U.K.) - 2020 Acrelec Group S.A.S. (France) Business domains Acquisitions and Alliance Acquisition price Software (Retail & Financial institutions) 2016 REV Ventures LLC (U.S.) - Approx. ¥80 billion Strengthening retail market New business Core business *Cash4.0 – GLORY’s vision of future “cash society” and seeks to provide cash access technology to customers at retail stores around the world. Approx. ¥24 billion All shares of viafintech have been transferred to paysafecard.com in 2021 Approx. ¥21 billion
Page 26
Overview 2. 2023 Medium-Term Management Plan 26 ▶ Further expand our business in the U.S. and Europe ▶ Increase synergies with Acrelec and Revolution ✓ Address our customers’ need for machine replacement and/or software modification associated with the banknote issuance scheduled for 2024, thus fulfill our mission as a company that supports the infrastructure of money circulation. Completing the work associated with the new banknote issuance Expanding our business for overseas retailers ✓ Expand the sales to leading global retailers and food & beverage companies
Page 27
Opportunity with New Banknote Issuance Number of installed base in the domestic market / Number of Glory’s products (thousand) Total number of units 7,320 Number of Glory’s products (including OEM) For financial institutions 330 75 Coin and Banknote recycler for tellers 74 53 Teller machine 21 17 Money changer 10 5 Others 227 - Change machine 550 270 Vending machine 2,440 62 Gaming peripherals 4,000 563 FY2023 FY2024 ･･･Monthly sales forecast･･･ New banknote issuance 1.5billion notes will be issued in FY2024 2 H1 H 2 H1 H Amusement Market Retail and Transportation Market Financial Market Schedules of update service by business segment 2. 2023 Medium-Term Management (Plan FY2023 Initiatives) 27 35 billion yen (90％) FY2023 5 billion yen (10％) FY2024 Total 40 billion yen
Page 28
Sales associated with New Banknote Issuance 2. 2023 Medium-Term Management (Plan FY2023 Initiatives) 28 Sales associated with banknote issuance 35,000 300,000 22,000 12,000 1,000 335,000 Financial Market Retail and Transportation Market Amusement Market FY23 Sales excl. sales associated with banknote issuance Products: 21,000 Maintenance service: 14,000 Sales forecast by business segment FY23 Sales incl. sales associated with banknote issuance (Millions of Yen)
Page 29
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Expanding our business for overseas retailers 4% 26% 26% 29% 43% 58% 8% 14% 1,900 4,400 8,100 14,700 14,600 14,300 15,600 22,400 40,800 Percentage of retail business (vs overseas product sales) Acrelec joined the Group Revolution joined the Group 47,500 60% Rapid growth in retail business! 61% 56,000 Forecast (Millions of Yen) 2. 2023 Medium-Term Management (Plan FY2023 Initiatives) 29
Page 30
World’s Top 20 Retailers Expanding our business for overseas retailers 2. 2023 Medium-Term Management (Plan FY2023 Initiatives) 30Source: Deloitte Touche Tohmatsu Limited. Global Powers of Retailing 2022 and official website of each company 10 Target Corporation 92,400 1,950 20 Best Buy Co., Inc. 47,262 1,150 9 JD.com, Inc. 94,423 Mainly E-commerce 19 Seven & I Holdings Co., Ltd 52,317 80,000 8 Aldi Einkauf GmbH & Co. oHG 117,047 10,500 18 REWE Combine 61,853 16,000 7 Walgreens Boots Alliance, Inc. 117,705 13,000 17 Edeka Group 68,268 11,000 6 The Kroger Co. 131,620 2,800 16 Albertsons Companies, Inc. 69,690 2,200 5 The Home Depot, Inc. 132,110 2,300 15 Tesco PLC 73,888 4,800 4 Schwarz Group 144,254 13,300 14 Aeon Co., Ltd 81,204 3 Costco Wholesale Corporation 166,761 850 13 Ahold Delhaize 85,177 7,450 2 Amazon.com, Inc 213,573 Mainly E-commerce 12 Lowe's Companies, Inc. 89,597 2,200 1 Walmart 559,151 10,585 11 CVS Health Corporation 91,198 9,900 Retailer Retail Revenue (US$M) Number of Outlet Retailer Retail Revenue (US$M) Number of Outlet 20,000
Page 31
Food & Beverage Companies F&B Revenue (US$M) Number of Outlet Food & Beverage Companies F&B Revenue (US$M) Number of Outlet McDonald's 85,657 39,000 11 DineEquity 6,155 3,700 Yum! Brands 47,400 51,000 12 Chipotle Mexican Grill 5,985 2,800 Restaurant Brands International 25,674 25,000 13 Panera Bread 5,591 2,500 Starbucks 21,959 33,000 14 Jollibee 5,324 5,600 Domino's Pizza 14,788 18,000 15 Little Caesar's 4,872 5,800 Chick-fil-A 13,700 2,600 16 Papa John's 4,582 5,500 Subway 13,400 40,500 17 Dairy Queen 4,382 7,200 Dunkin' Brands 10,530 22,000 18 Hello Fresh 4,287 Mainly E-commerce Wendy's 9,148 6,900 19 CKE Restaurants 4,272 4,300 Darden 6,772 1,800 20 Sonic 4,020 3,500 2. 2023 Medium-Term Management (Plan FY2023 Initiatives) 31 World’s Top 20 Food & Beverage Companies Expanding our business for overseas retailers
Page 32
FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Further growth of the U.S. market Trend of U.S. sales (includes maintenance service sales) Sales of financial institutions and other market 27% 8% 11% 10% 20% 28% 45% 60% 58% 31,900 2,400 34,100 9,200 32,500 3,700 30,400 2,900 31,100 6,100 29,100 8,100 39,200 17,700 63,000 37,800 74,500 43,000 Revolution GLORY Acrelec Sales of retail business Forecast (Millions of Yen) 2. 2023 Medium-Term Management (Plan FY2023 Initiatives) Trend of U.S. sales ▶ Sales of retail business▶ 32 Expanding our business for overseas retailers
Page 33
■2022 Financial Results ■2023 Financial Forecast ■Shareholders Return p. 34 p. 37 p. 40 3. Financial Results and Forecast/ Shareholders Return
Page 34
FY2022 Financial Results * *EBITDA = Operating income (Loss) + Depreciation & Amortization + Goodwill amortization FX Impact: +18.2billion yen (Sales) / -1.4 billion yen (Operating Income) 3. Financial Results and Forecast 34 Sales Operating Income Ordinary Income Net Income Attributable to Owners of Parent Decreased due to ongoing production delays caused by procurement problems (e.g. semiconductors) despite an increase as a result of M&A and the depreciation of the yen. Decreased significantly due to sales delays and cost increases caused by high parts prices. Deficit due to recording of extraordinary loss caused by partial cancellation of ERP system implementation and the impairment of goodwill on Acrelec. Deficit due to recording of share of loss of entities accounted for using equity method on valuation of associates Full year FY2020 FY2021 FY2022 \ \ \ \ \ \ Ordinary Income (Millions of yen) Maintenance Sevices 2.8% 27,505 12.1% 4.5% 6,410 Exchange rate US$ EBITDA Euro Operating Income 135 141 -9,673 -94.9% -13,124 - Y-on-Y Ratio 12.9% +16,899 20.1% - +29,295 83,894 37.0% 10,195 106 29,410 124 112 131 5,705 14,137 36.2% 6.5% 6.5% 2.6% 13.5% 217,423 226,562 100.0% Ratio 100.0% Ratio Net Sales -15,948 - -8,517 -31.0% - 7.4% 255,857 100,793 522 Net Income Attributable to Owners of Parent -2,720 -9,538 18,988 78,675 14,201 10,404 4.6% 100.0% 39.4% 0.2%
Page 35
FY2022 Sales & Operating Income by Business Segment 3. Financial Results and Forecast 35 Sales Operating Income % % % % % % % % % % % % (Millions of yen) Y-on-Y 104,765 127,803 +28,099 3,417 4,781 -4,345 +22.0 -90.9 FY2020 Full year -96.7 Y-on-Y Overseas Market Amusement Market Financial Market Retail & Transportation Market Others -9,673 +12.9 -94.9Total 217,423 226,562 +29,295 14,201 522255,857 -3,114 -4.7 - 152 -571 +1,990 - 2,680 2,688 -4,492 +0.5 +290 +10.5 - 11,020 12,131 -290 1,624 -1,118 36,248 2,54345,595 15,139 +24.8 2,971 +169 -2,264 1,670 FY2021 Full year FY2020 Full year FY2021 Full year 155,902 FY2022 Full year +3,008 FY2022 Full year 9,861 49,078 47,859 49,877 36,079 +283 -456 -1,408 10,195 -366 4,644 436
Page 36
FY2022 Sales by Geographical Segment 3. Financial Results and Forecast 36 Americas EMEA Asia All regions: Overall sales increased supported by strong sales from maintenance services and depreciation of the yen Delayed in production The Americas: Sales to the retail industry (CI-series) increased, meeting the demand for contact-free and self-service solutions ➢ Financial institutions – TCR sales increased ➢ Retail industry – CI -series sales increased ➢ Revolution – As per the forecast ➢ Financial institutions – TCR sales remained moderate ➢ Retail industry – CI-series sales remained moderate ➢ Acrelec – Sales increased ➢ Financial institutions – TCR sales increased ➢ Retail industry – CI-series sales decreased ➢ Acrelec – Sales remained moderate *Acrelec P&L included in the scope of consolidation since Q2 FY2020. *Revolution P&L included in the scope of consolidation (the Americas) since Q3 FY2021. *Sales of OEM included in regional sales since FY2022. (FY2020 and FY2021 also adjusted) *China included in Asia since FY2022. Full year % % % % (Millions of yen) Y-on-Y Local Americas 35,524 44,684 69,336 +24,652 +28.7%+55.2 Acrelec 1,125 2,716 3,050 +334 - Revolution - 3,774 17,758 +13,984 - EMEA 52,981 68,967 70,758 +1,791 -5.0%+2.6 Acrelec 7,297 16,479 18,663 +2,184 - Asia 16,259 14,151 15,806 +1655 -+11.7 Acrelec 450 614 751 +137 - Total overseas sales 104,765 127,803 155,902 +28,099 - Acrelec 8,873 19,809 22,464 +2,655 - Revolution - 3,774 17,758 +13,984 - FY2020 FY2021 FY2022 +22.0
Page 37
FY2023 Financial Forecast 3. Financial Results and Forecast 37 * *EBITDA = Operating income (Loss) + Depreciation & Amortization + Goodwill amortization Sales Income Expected to increase with the work associated with the new banknote issuance and growth in overseas retail industry Expected to deliver stably by improving drastically in the overall situation despite unsteady on some parts Expected to improve significantly as a result of increased sales, easing of high material prices, product price revisions etc. 1st Harf 2nd Harf Full Year FY2021 FY2022 FY2023 (Forecast) FY2021 FY2022 FY2023 (Forecast) FY2021 FY2022 FY2023 (Forecast) Y-on-Y \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ -5 -6 110 131 134 139 130 135 115 130 137 143 130 135 112 131 135 141 130 135 +79,143 30.9% +11,207 11.1% +34,478 6,605.0% +35,720 - +29,538 - +34,512 181.8% Exchange rate US$ Euro 335,000 39,100 48,809 50,000 44,794 51,984 62,000 83,894 100,793 112,000 13,785 4,477 15,200 13,720 14,511 38,300 27,505 18,988 53,500 29,0005,735 20,000 226,562 255,857193,000 10,195 522 35,000 5,725 -5,359 5,000 4,679 28,000 10,404 -2,720 33,000 EBITDA 6,410 -9,53818,0002,443 -6,195 2,000 3,967 -3,343 Net Income Attributable to Owners of Parent 6,000 4,460 5,233 Ordinary Income Operating Income 2,639 (Millions of yen) Maintenance Sevices 103,154 112,142Net Sales 142,000 123,408 143,715 -4,711
Page 38
FY2023 Sales & Operating Income by Business Segment 3. Financial Results and Forecast 38 Upper row: Sales Lower row: Operating income Overseas Market Financial Market Retail and Transportation Market Amusement Market • Expand the sales of self-service solutions addressing the demand for machine replacement • Expand the sales of self-service products addressing the ongoing need for self-service solutions • Expand the sales of card systems with ongoing need for newly introduced amusement machines Complete the work associated with banknote issuance Expected to increase, opportunities with leading retailers and F&Bs in the U.S. and Europe which have high interest in capital investment AND First Half Second Half Full Year FY2021 FY2022 FY2023 (Forecast) FY2021 FY2022 FY2023 (Forecast) FY2021 FY2022 FY2023 (Forecast) Y-on-Y +9,098 +7,064 +33,752 +15,348 +24,405 +6,571 +10,361 +5,376 +1,529 +118 +79,143 +34,478Total 103,154 112,142 142,000 123,408 143,715 193,000 5,735 -4,711 Others 1,138 1,274 2,000 1,550 1,697 -720 5,754 -106 6,000 4,460 5,233 29,000 1,624 7,000 -1,000 226,562 255,857 335,000 -260 1,516 5,000 Amusement Market Financial Market 45,000 2,010 -584 500 533 13 5,500 14,000 Retail & Transportation Market 23,558 20,764 30,000 24,301 24,831 40,000 3,196 -1,215 1,500 1,448 1,367 17,852 15,362 25,000 18,227 20,886 Overseas Market 54,850 69,511 75,000 72,953 86,391 90,000 (Millions of yen) 36,079 4,644 47,859 127,803 2,500 2,688 5,228 10,000 6,377 9,911 15,500 10,195 1,354 -2,431 2,500 3,427 2,867 5,000 7,500 70,000 15,500 70,000 2,543 -571 6,000 12,131 15,139 25,500 -366 436 36,248 152 45,595 155,902 165,000 2,971 4,500 522 35,000 -589 -500 -688 -529 -500 -1,408 -1,118 4,781 108 2,000
Page 39
FY2023 Sales by Geographical Segment of Overseas Market 3. Financial Results and Forecast 39 *Revolution P&L included in the scope of consolidation (the Americas) since Q3 FY2021. *Sales of OEM included in regional sales since FY2022. (FY2020 and FY2021 also adjusted) *China included in Asia since FY2022. First Half Second Half Full Year FY2021 FY2022 FY2023 (Forecast) FY2021 FY2022 FY2023 (Forecast) FY2021 FY2022 FY2023 (Forecast) Y-on-Y 8,576 3,774 17,758 9,924 3,774 17,758 18,500 +742 398 354 353 1,802 614 751 2,200 +1,449 69,511 72,953 86,391 95,489 127,803 155,902 165,000 +9,098 9,843 11,339 12,621 13,857 19,809 22,464 23,700 +1,236 68,967 70,758 71,000 +242 8,393 9,447 10,270 8,107 16,479 18,663 16,500 -2,163 7,455 7,940 8,351 6,545 14,151 15,806 14,000 -1,806 50,504 44,684 69,336 80,000 +10,664 1,052 1,537 1,998 3,948 2,716 3,050 5,000 +1,950 8,576 3,774 17,758 9,924 3,774 17,758 18,500 +742 Revolution - 8,576 Total overseas sales 54,850 69,511 Acrelec 8,470 9,843 Asia 6,211 7,455 Acrelec 260 398 EMEA 31,569 32,559 Acrelec 7,032 8,393 32,559 37,398 38,199 38,441 Acrelec 1,179 1,052 Revolution - 8,576 29,496 27,615 39,840 (Millions of yen) Americas 17,069 29,496
Page 40
30 33 37 42 44 49 54 56 60 62 64 66 66 68 (68) (72) FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 40 3. Shareholders Return Shareholder Returns 100th Anniversary Commemorative Dividend Planned Trend of annual dividend and payout ratio 20 36.5 43.4 39.0 44.2 42.0 32.4 27.5 41.7 37.4 52.6 32.2 44.5 69.9 63.2 Annual dividend per share (yen) Dividend payout ratio (%) 145.5% ・1.7 million shares ・5.9 billion yen 95.1% 113.1% 81.2% ・1.4 million shares ・5.9 billion yen ・2.1 million shares ・6.0 billion yen ・2.6 million shares ・5.2 billion yen Acquisition of own shares Total reduction tendency ・4.7 million shares ・9.9 billion yen Change in Shareholder Return Policy 30% or higher for the payout ratio before goodwill amortization (Three-year average during the 2023MTP period*) *Total dividends paid over the three fiscal years divided by three-year total of "Net income attributable to owners of parent + Goodwill amortization"
Page 41
■ Corporate Governance Framework ■ Sustainability Policy / Material Issues ■ Measures Against Climate Change ■ United Nations Global Compact and ESG indices p. 42 p. 43 p. 44 p. 45 4. Sustainability
Page 42
Corporate Governance Framework Glory has adopted a “Company with Audit & Supervisory Committee” as a form of corporate organization to further strengthen the supervisory function of the Board of Directors and increase the efficiency of management decision-making. Decisions on important business execution are flexibly delegated to Directors and an executive officer system is introduced for swift, flexible and efficient business management. Furthermore, we have established committees such as the Nomination Advisory Committee and the Compensation Advisory Committee as consultative bodies for the determination of appointment and remuneration. Glory remains committed to improving the transparency and objectivity of management decision-making by enhancing the supervisory functions of the Board, as well as audit and supervisory functions of the Audit & Supervisory Committee. 42 4. Sustainability
Page 43
Sustainability Policy / Material Issues 43 4. Sustainability Contribute to the sustainable growth of society and promote measures to improve corporate value The Glory Group aims to realize a sustainable society by working to solve social issues with advanced technologies under Long-Term Vision 2028 which states “We enable a confident world”. Level of impact on Glory Level of impact on stakeholders Low High High ■ Promote expansion of our core business domain ■ Build and expand new business models ■ Promote businesses which contributes to carbon-neutrality ■ Develop and promote environmentally friendly products which contributes to carbon-neutrality ■ Respect human rights and diversity ■ Maintain a healthy and safe work environment ■ Ensure safety and quality of our products and services ■ Further promote global CSR procurement ■ Further strengthen corporate governance ■ Further contribute to the preservation of biological diversity ■ Enhance stakeholder engagement ■ Identify & manage risks from a global perspective ■ Implement measures for corporate ethics, legal compliance, and anti-corruption Issues of mid-to high materiality SDGs ■ New value creation ■ Environment (E) ■ Society (S) ■ Governance (G) 2023 Sustainability policy
Page 44
■ Initiatives for carbon neutrality ■ Reduction and control of CO2 emissions CO2排出量の推移 Measures against Climate Change 44 4. Sustainability 1) Reduce Scope 1 and 2 emissions (Domestic & Overseas) ✓ Install electricity usage monitoring system, LED lighting, and human detection sensors to control CO2 emissions ✓ Install solar power systems at Himeji Head Office for the use of renewable energy 2) Control Scope 3 emissions (Domestic) Focus on the CO2 reduction in ✓ Category 1 (Purchased products and services) ✓ Category 11 (Use of our products) as they account for 85% of our Scope 3 emissions.
Page 45
◼ MSCI Japan ESG Select Leaders Index AA United Nations Global Compact Glory signed the United Nations Global Compact in March 2014, agreeing to the Ten Principles in the areas of human rights, labor, environment, and anti-corruption which share common values with Glory Group’s Corporate Action Guidelines. ◼ FTSE Blossom Japan Index Inclusion in ESG Indices ◼ S&P/JPX Carbon Efficient Index ◼ FTSE Blossom Japan Sector Relative Index 45 4. Sustainability United Nations Global Compact / ESG indices
Page 46
■ History of Overseas Business Expansion ■ Sales Growth Trend ■ History of Sales and Operating Income p. 47 p. 48 p. 49 Reference
Page 47
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 JPY million Company newly established Company acquired ■ Overseas market sales 47 Reference 1982 GLORY (U.S.A.) Inc. 1992 GLORY GmbH 1994 GLORY (PHILIPPINES), INC. 1996 GLORY MONEY HANDLING MACHINES PTE LTD 2003 GLORY Denshi Kogyo (Suzhou) Ltd. GLORY International Trading (Shanghai) Co., Ltd. 2004 Reis Eurosystems AG 2008 GLORY IPO Asia Ltd. GLORY France 2010 Sitrade Italia S.p.A. 2011 GLORY Currency Automation India Pvt. Ltd. 2012 Talaris Topco Limited 2015 Glory Global Solutions (Netherlands) BV 2016 Glory Global Solutions (Cyprus) Ltd Glory Global Solutions RUS, LLC 2019 SOCASH PTE. LTD.(Singapore) CTS Solutions S.r.l.(Italy) Glory Global Solutions Mexico S.A. de C.V. 2018 Glory Global Solutions (Ireland) Ltd. 2020 Acrelec Group S.A.S.(France) Cash Payment Solutions GmbH(Germany) Glory Global Solutions (Austria) GmbH 2021 Revolution Retail systems, LLC (U.S.) Glory Global Solutions Poland Sp. Z o.o. History of Overseas Business Expansion
Page 48
Issuance of new banknotes: ・10000-yen ・5000-yen ・1000-yen 255.8 300.0 0 35.02.0 48 Reference Sales Growth Trend 210.6 2003 176.7 168.9 47.0 Issuance of new banknotes: ・10000-yen ・5000-yen ・1000-yen 129.7 138.9 2004 188.8 42.5 146.3 2005 141.2 0.5 140.7 2006 164.5 165.1 22.0 ・Privatization of postal service ・ Cigarette vending machines w/ age confirmation function 142.5 146.6 2007 185.1 33.5 1516 2008 145.9 0 － 1459 2009 135.1 140.3 0 135.1 2010 138.9 138.9 2011 146.9 146.9 140.3 190.9 190.9 2012 210.6 218.6 218.6 2013 2014 222.3 0 0 222.3 0 0 0 － 2015 2016 2017 226.9 222.5 2273 225.5 0 0 0 －－ －－ －－ －－ 226.9 222.5 227.3 225.5 2018 2019 2020 235.7 224.1 217.4 225.7 0 0 5.5 － Issuance of new 500-yen coin－ 235.7 224.1 211.9 223.9 0 50 100 150 200 250 300 350 (Net sales)-(Sales due to special demand) Sales of special demand Fiscal Year Sales (A) Average Sales by special demand (B) Factors of special demand (A) – (B) Average Three-year average of (Net sales) – (Sales by special demand) (¥billion) 2021 226.5 224.4 272.4 260.0 (¥ billion) 2022 2023 Forcast 255.8 335.0 －
Page 49
49 Reference History of Sales and Operating Income by Business Segment 12 13 19 28 32 33 29 29 35 76 103 104 106 104 107 103 104 105 128 156 165 92 58 25 52 68 46 43 47 44 45 46 48 52 53 54 57 42 50 36 36 70 22 34 28 27 27 28 25 27 29 30 31 30 46 43 43 52 52 49 48 46 70 28 49 36 26 22 26 28 24 25 26 25 25 22 20 21 21 21 11 12 15 26 23 35 34 31 37 13 11 12 14 15 14 15 3 2 3 3 5 3 3 3 5 0 100 200 300 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Overseas Financial Retail and transportation Amusement Others 30.9 32.5 5.4 12.9 22.8 9.4 7.6 10.3 11.2 14.4 16.7 18.6 20.5 20.3 19.6 20.5 17.9 14.2 10.2 0.05 35 0.0 10.0 20.0 30.0 40.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 176.7 188.8 141.2 164.5 185.1 145.9 135.1 138.9 146.9 190.9 218.6 222.3 226.9 222.5 17.5% 17.2% 3.9% 7.9% 12.3% 9.2% 5.7% 7.40% 7.7% 7.6% 7.6% 8.4% 9.1% 9.1% 8.6% 8.7% 8.0% 6.5% 4.5% 0.2% 10.4% 227.3 (¥billion) (¥billion) Operating income Sales by business segment 235.7 224.1 217.4 226.5 255.8 335.0 Forcast Forcast