Financial Results for Fiscal 2013, the Year Ending December 31, 2013
February 21, 2014
Contents ・・・・・・・・・・・・・・・・・・・・・・
P2
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KNT-CT Holdings’ Scope of Consolidation ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
P5
Organizational Structure of the Management Integration Integrating Operations to Realize Synergies Business Structure
Overview of FY2013 ・・・・・・・・・・・・・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
P6–8
Results for FY2013 ・・・・・・・・・・・・・ ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・
P9
Sales by Segment for FY2013 ・・・・・・・・・・・・・・・・・・・ ・・・・・・・・・・ ・・・・・・・・・・・・・・・・・
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P11
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P12
Full-Year Forecasts of Consolidated Financial Results for FY2014
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P13
Medium-Term Management Plan (2013 – 2015) Priority Initiatives
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P14
Review of KNT-CT Holdings Organizational Structure ・・・・・・・・・・・・・・・・・・・・・・・・・
P15
Consolidated Balance Sheets at the End of the FY2013 Consolidated Cash Flow Statement for the FY2013
IR Inquiries
—1—
Organizational Structure of the Management Integration
KNT-CT Holdings Co., Ltd.
Absorption-type split (Group Tour Business)
Absorption-type split (Individual Travel Business)
Transfer of shares (Media-based Travel Business)
Kinki Nippon Tourist Co., Ltd.
Kinki Nippon Tourist Individual Tour Co., Ltd.
Club Tourism International Inc.
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Integrating Operations to Realize Synergies
Reorganization to a holding company framework under KNT-CT Holdings Co., Ltd., on January 1, 2013
On January 1, 2013, the KNT Group shifted to a holding company framework, and in February 2013, established a medium-term management plan spanning through the fiscal year ending December 31, 2015. Based on this plan, KNT-CT Holdings Co., Ltd., is promoting independent management of group companies and stronger links between them, while working to maximize synergies by leveraging the strengths of the Kinki Nippon Tourist and Club Tourism International brands.
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Business Structure Club Tourism International Inc.
Two subsidiaries
Kinki Nippon Tourist Individual Tour Co., Ltd.
Kinki Nippon Tourist Individual Tour Sales Co., Ltd.
Kinki Nippon Tourist Co., Ltd. Kinki Nippon Tourist Hokkaido Co., Ltd.
KNT-CT Holdings Co., Ltd.
Kinki Nippon Tourist Tohoku Co., Ltd. Kinki Nippon Tourist Chugoku-Shikoku Co., Ltd. Kinki Nippon Tourist Kyushu Co., Ltd. Twelve domestic consolidated subsidiaries of KNT-CT Holdings Co., Ltd. Fifteen overseas consolidated subsidiaries of KNT-CT Holdings Co., Ltd.
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KNT-CT Holdings’ Scope of Consolidation 37 consolidated subsidiaries 14 travel companies in Japan
Kinki Nippon Tourist Co., Ltd., Kinki Nippon Tourist Individual Tour Co., Ltd., Club Tourism International Inc., Kinki Nippon Tourist Individual Tour Sales Co., Ltd., Kinki Nippon Tourist Hokkaido Co., Ltd., Kinki Nippon Tourist Tohoku Co., Ltd., Kinki Nippon Tourist Kanagawa Co., Ltd., Kinki Nippon Tourist Chugoku-Shikoku Co., Ltd., Kinki Nippon Tourist Kyushu Co., Ltd., Kinki Nippon Tourist Okinawa Co., Ltd., United Tours Co., Ltd., T-Gate, Inc., Showa Travelers Club Co., Ltd., Sanki Travel Service Co., Ltd.
13 travel companies outside Japan
KIE (USA), KIE (CND), KIE (EUR), KIE (OCE), PDI, KNT KOREA, others
10 other affiliated companies
Temporary staff services
Tourist Experts Co., Ltd
Merchandising and insurance
Kinki Nippon Tourist Shoji Co., Ltd.
Business consignment and others
Tourist Service Hokkaido Co., Ltd., KNT Business Create Co., Ltd., Club Tourism Marketing Co., Ltd.
Travel assistance services
Tourist International Assistance Service, Inc.
Event and convention planning
Event & Convention House, Inc.
Care-giving services
Club Tourism Life Care Service., Ltd.
2 reinsurance underwriting businesses
H&M INSURANCE HAWAII, GRIFFIN INSURANCE
Three companies affiliated by the equity method Japan Outside Japan
NTT Data Teranos Corporation KNT Travel (Thailand) Co., Ltd., KNT Taiwan Co., Ltd.
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KNT-CT Holdings building
Overview of FY2013—Part 1 Principal companies operating under KNT-CT Holdings Co., Ltd. ■Individual Travel Business Kinki Nippon Tourist Individual Tour offers dedicated website packages while Club Tourism International promotes bus tour packages. Through cross-selling of each company’s respective products, joint marketing of charter flights, and other strategies, KNT-CT Holdings is working to generate greater synergies.
Kinki Nippon Tourist Individual Tour Co., Ltd., and Kinki Nippon Tourist Individual Tour Sales Co., Ltd. Improving quality and adding higher value to tour packages including theme-style travel while boosting sales through faceto-face consulting ■Created travel products that address specific tastes and objectives including trips to secluded areas and Word Heritage Sites, cruises, and overseas weddings ■Kinki Nippon Tourist Individual Tour Sales opened the Yurakucho Theme Travel Salon as a flagship outlet in Tokyo on March 30 ■Kinki Nippon Tourist Individual Tour Sales opened the Grand Front Osaka Sales Agent in Osaka’s Umeda district as its flagship outlet in the Kansai region on April 26 ■Kinki Nippon Tourist Individual Tour Sales opened the Shibuya Koen-Dori Overseas Travel Salon as a second flagship outlet on November 1
A theme travel brochure
The Grand Front Osaka Sales Agent —6—
The Shibuya KoenDori Overseas Travel Salon
Overview of FY2013—Part 2 Principal companies operating under KNT-CT Holdings Co., Ltd. Club Tourism International Inc. Taking successful steps to enhance customer satisfaction while further distinguishing itself from competitors by drawing on its creative planning capabilities, an area of particular strength, to deliver packages with a high theme-based flavor and considerable added value ■ Conducted a special charter cruise of the Voyager of the Seas, one of the largest cruise ships in Asia ・ Planned and created a travel package completely different from those offered by competitors ■Put forward a lineup of such theme-based packages as a walking tour that covers 23 sites of inscribed property around the outskirts of Mt. Fuji, a site registered on the World Heritage List, group package tours made up of solo passengers, and tours with grandchildren ■Upgraded and expanded packages to the Ise-Shima area that use the Shimakaze Premium Express operated by Kintetsu Railways and the special Kagirohi club tourism train to coincide with Shikinen Sengu, a religious festival at the Ise Grand Shrine ■Opened the Kintetsu Abeno Harukas Outlet in the Kintetsu Department Store Abeno Harukas Wing Building on October 10 → Tour packages to the Ise-Shima area that use the Kagihiro train
→
Pamphlet cover for a walking tour around the outskirts of Mt. Fuji
← Overseas travel pamphlet cover for tour packages made up of solo passengers
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Overview of FY2013—Part 3 Principal companies operating under KNT-CT Holdings Co., Ltd. ■ Group Tour Business Kinki Nippon Tourist Co., Ltd Expanding proposal-based marketing of individual and group tours in major cities Proactively stepped up sales activities for the meetings, incentives, conferences and exhibitions (MICE) market in growing industries ・Organized travel related to corporate conventions and incentives
Shikinen Sengu at the Ise Grand Shrine: Naiku, or the inner sanctuary, and Shinku, or the new sanctuary
Attended to the needs of numerous groups visiting the Ise Grand Shrine to worship during the Oshiraishi-mochi-gyoji, a ceremony that forms part of Shikinen Sengu
Aggressively expanded sales activities to meet demand related to major sporting events ・Handled travel related to the Tokyo Marathon 2013 ・Supported bidding activities as an official partner of the Tokyo 2020 Olympics and Paralympics Bid Committee ・Used sports as a means to attract tourists to various region and promote the consulting business Cultivated demand for travel in the education market ・Improved the handling of school trips ・Stimulated demand for travel related to sports and cultural events besides school trips
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Tokyo Marathon 2013 Friendship Run
Japan Festival in Vietnam 2013
Results for FY2013 (Millions of yen)
FY2013
Increase/decrease
FY2012
% change
Sales
448,273
310,982
137,291
44.1
Gross income
77,163
59,031
18,132
30.7
Operating income
3,885
2,344
1,541
65.7
Ordinary income
3,539
2,644
895
33.9
Extraordinary income
284
306
(22)
(7.2)
Extraordinary loss
678
1,690
(1,012)
(59.9)
1,863
1,788
75
4.2
Net income
[Disclosing sales as gross sales] Given the nature of sales transactions for travel packages such as memberorganized tours and special order tours, KNT-CT Holdings has changed its method for calculating sales from the previously used net sales method, in which sales figures are minus the cost of sales, to a gross sales method, in which sales figures includes cost of sales ■Sales increased 137,291 million yen compared to the previous year owing to the inclusion of Club Tourism International Inc. in the scope of consolidation ■Operating income increased 1,541 million yen ■ Ordinary income increased 895 million yen (Non-operating expenses such as foreign exchange losses amounted to 854 million yen)
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Sales by Segment for FY2013 (Millions of yen)
Individual Travel Business Sales to external customers Inter-segment sales and transfers
Total sales
Income and loss by segment
Group Tour Business
Other
Total
Amount recorded in consolidated Adjustment financial statements
268,979
100,418
78,874
448,273
―
448,273
100
2,198
11,901
14,200
(14,200)
―
269,080
102,616
90,776
462,473
(14,200)
448,273
2,091
2,002
533
4,627
(741)
3,885
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Consolidated Balance Sheets at the End of FY2013 (Millions of yen)
December 31, 2013
December 31, 2012
Current assets
103,092
67,142
35,950
Cash and deposits Fixed assets
57,369
28,541
28,828
26,216
20,617
5,599
Total assets
129,308
87,760
41,548
Current liabilities Trade accounts payable and unsettled travel tickets
98,797
77,162
21,635
43,666
41,540
2,125
Fixed liabilities
6,556
4,879
1,677
Total liabilities
105,354
82,041
23,312
Total net assets
23,954
5,718
18,236
Retained earnings
7,131
(7,203)
14,334
129,308
87,760
41,548
Total liabilities and net assets
Increase/decrease
—11—
December December 31, 2013 31, 2012
Capital adequacy ratio
18.5%
6.4%
December December 31, 2013 31, 2012
Net assets per share 88.85円
59.45円
Consolidated Cash Flow Statement for FY2013 (Millions of yen)
FY2013
FY2012
Cash flows used in operating activities
7,105
(1,776)
Cash flows from investment activities
2,545
(198)
Cash flows from financing activities
440
(3,032)
Cash and cash equivalents at the end of the interim period
54,698
26,509
■ Cash flows used in operating activities Cash flows used in operating activities amounted to 7,105 million yen, mainly owing to income before income taxes of 3,145 million yen and to the increase in advanced order for group tours amounting to 3,984 million yen. ■ Cash flows from investing activities Cash flows from investing activities was 2,545 million yen, mainly owing to proceeds from the redemption of deposited money totaling 2,577 million yen ■ Cash flows from financing activities Cash flows from financing activities totaled 440 million yen, mainly owing to proceeds from the issuance of shares of 492 million yen
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Full-Year Forecasts of Consolidated Financial Results for FY2014
Full-Year Forecasts for FY2014
Sales
464,000 million yen
Operating income
4,300 million yen
Ordinary income
4,500 million yen
Net Income
1,900 million yen
Net income per share
7.17 yen
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Medium-Term Management Plan (2013 – 2015) Priority Initiatives
1. Maximize synergies in operations 2. Cut down on costs by making the management of divisions more efficient 3. Develop and motivate human resources 4. Improve management’s ability to carry out strategies 5. Develop global business focusing on Asia
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Review of KNT-CT Holdings Organizational Structure As of January 1, 2014
KNT-CT Holdings Organizational Structure
Chairman of the Board Chief Executive Officer Reorganized
As of October 1, 2013
Corporate Strategy Headquarters General Affairs & Public Relations Department
Chairman of the Board
Personnel Department
Chief Executive Officer Corporate Planning Department
Accounting Department Business Strategy Headquarters
General Affairs Department
Domestic Travel Department
Accounting Department
Overseas Travel Department
Management Supervising Department
Inbound Travel Department Travel Related Product Department Sports Marketing Department Regional Promotion Department Management Supervising Department —15—
IR Inquiries
Higashi-Kanda Fukoku Seimei Building 1-7-8 Higashi Kanda, Chiyoda-ku, Tokyo, Japan 101-8641 Public Relations, General Affairs Department, TEL:03-6891-6839 FAX:03-6891-6890 URL:http://www.kntcthd.co.jp/
These materials are not intended to solicit investment, but are provided for reference only. Please refer to the company’s financial statements and securities reports for accurate earnings figures. The financial targets provided in this material are based on information available at the time of writing, however, actual results may differ from the forecasts as a result of changes in a range of factors.