interim financial results for fiscal 2012, the year ending ...interim financial results for fiscal...
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August 14, 2012
Interim Financial Results for Fiscal 2012, the Year Ending December 31, 2012
Kinki Nippon Tourist Co., Ltd.
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Overview of the FY2012 Interim Period (January to June) 3
Consolidated Results for the Interim Period of FY2012 5
Non-Consolidated Sales and Operating Revenue by Type of Travel
for the FY2012 Interim Period 7
Consolidated Balance Sheets at the End of the FY2012 Interim Period 8
Consolidated Cash Flow Statement for the FY2012 Interim Period 9
Initiatives for the Second Half of FY2012 and Beyond—Part 1 10
Full-Year Forecasts of Consolidated Financial Results for FY2012 12
Full-Year Forecasts of Non-Consolidated Financial Results for FY2012 13
Forecasts of Full-Year Non-Consolidated Sales and Operating Revenue
by Type of Travel for FY2012 14
Reference: Non-consolidated Sales by Type of Travel 15
IR Inquiries 16
Contents
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Education and MICE toursGeneral and corporate group
tours Sports businessRegional promotion business
Mate and Holiday package planning
Web-based package planning and sales
Partnership sales
Businesses concentrated into two operational divisions
The nuclear power plant accident in Japan and the debt crisis in Europe were causes of concern in Japan’s travelindustry; however, there are signs of a rebound in tourism demand as the country recovers from the impact of the GreatEast Japan Earthquake that occurred last year.
Corporate restructuring undertaken starting in January
Build an organization tailored to each region’s characteristics and business conditions
Internal restructuring of KNT’s organization
Group Tour Business Company
Individual Travel Business Company
Specialized merchandising company
KNT MerchandisingKNT Hokkaido
KNT Tohoku
KNTKNT Kyushu
KNT Chugoku Shikoku
Operations began at split-off companies, Kinki Nippon Tourist Tohoku, Kinki Nippon Tourist Chugoku Shikoku, and Kinki Nippon Tourist Shoji. Operations of the Individual Travel business were transferred to Kinki Nippon Tourist Hokkaido and Kinki Nippon Tourist Kyushu in their respective regionsThe Sports Marketing Department and Regional Promotion Department were integrated in the Group Tour Business Division, and the Group Tour Business Company was established.The Partnership Sales Department was integrated in the Individual Travel Business Company.
Overview of the FY2012 Interim Period (January to June)—Part 1
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Overview of the FY2012 Interim Period (January to June)—Part 2
KNT was a main sponsor of the International Friendship Run
KNT’s train station advertisement for a tour bus trip in Honolulu
Reforming the Sales Structure
Group Tour Business
Bolstered regional promotion and consulting businesses through sport events: major marathon events in Kumamoto, Tokyo, Kyoto, and NagoyaCapitalized on demand in the MICE market: orders for large-scale conventions
Global Business Established Kinki Nippon Tourist Taiwan Co., Ltd., as a local Taiwanese subsidiary in May
Individual Travel Business
Improved Web-based salesExpanded Web-based domestic travel packages using a new sales systemCommenced sales of overseas tours via smart phones
Developed high-value-added Holiday travel packages for overseas
Operated a double-decker tour bus in Honolulu, HawaiiOffered chartered flights and reserved trains for trips to see theannular eclipse
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KNT Travel (Thailand) Co., Ltd.; KNT Taiwan Co., Ltd.
NTT Data Teranos Corporation
Hakone Kogen Hotel; Okunikko Kogen Hotel
Consolidated Results for the FY2012 Interim Period—Part 1
The KNT Group’s Scope of Consolidation34 consolidated companies (31 in the previous fiscal year)
KNT Tourist Co., Ltd.; United Tours Co., Ltd.; Kinki Nippon Tourist Hokkaido Co., Ltd.; Kinki Nippon Tourist Tohoku Co., Ltd.; Kinki Nippon Tourist Chugoku-Shikoku Co., Ltd.; Kinki Nippon Tourist Kyushu Co., Ltd.; T-Gate, Inc.; Sanki Travel Service Co., Ltd.; KNT Asia Co., Ltd.; others
H&M Insurance Hawaii, Inc.; Griffin Insurance Co., Ltd.
Kintetsu International Express companies in the U.S., Canada, Europe, and Oceania; Pacific DevelopmentInc.: KNT Korea, Inc.; KNT (Hong Kong) Ltd.; others
KNT Tourist outlet
Tourist Experts Co., Ltd.
Kinki Nippon Tourist Shoji Co., Ltd.
Tourist Service Hokkaido Co., Ltd.; KNT Business Create Co., Ltd.
Tourist International Assistance Service, Inc.
Event & Convention House, Inc.
Five companies affiliated by the equity methodTravel
Information processingHotels
13 travel companies in Japan
2 reinsurance underwriting businesses
13 travel companies outside Japan
6 travel-related operations companies
Temporary staff servicesMerchandising and insuranceBusiness consignmentTravel assistance servicesEvent and convention planning
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Consolidated Results for the FY2012 Interim Period—Part 2
FY2012 first half FY2011 first half Increase / decrease % change
Operating revenue 26,862 24,666 2,196 8.9
Operating expenses 27,808 26,480 1,328 5.0
Operating income (946) (1,814) 868 -
Ordinary income (948) (1,633) 685 -
Extraordinary income 135 8 127 -
Extraordinary loss 334 173 161 93.1
Net income (1,392) (1,990) 598 -
(Millions of yen)
Operating revenue increased 2,196 million yen, reflecting travel demand related to the Great East Japan EarthquakeOperating expenses increased 1,328 billion yen, mainly due to reduced personnel and advertising expenses in theprevious fiscal year for earthquake disaster countermeasuresOperating income improved by 868 million yenOrdinary income comprised about 200 million yen in non-operating income from interest income and other items,and about 200 million yen in non-operating expenses owing to interest expenses and other factorsExtraordinary income consisted of about 100 million yen in compensation received, and an extraordinary loss ofabout 200 million yen for compensation payments
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Non-Consolidated Sales and Operating Revenue by Type of Travel for the FY2012 Interim Period
Sales YoY change (%)
Adjusted YoY change* (%)
Operating revenue
YoY change (%)
Adjusted YoY change* (%
Rate of return (%)
Travel in Japan 76,492 (1.2) 10.4 11,610 (2.2) 11.1 15.2
Group tours 31,852 (1.8) 10.8 5,310 (5.6) 5.5 16.7
Package tours 28,251 (3.9) 9.9 5,189 (0.4) 16.6 18.4
Individual travel 16,389 5.1 10.2 1,111 7.3 14.8 6.8Outbound
Travel 61,273 9.4 11.6 6,460 10.2 13.8 10.5
Group tours 14,969 32.5 41.5 2,211 20.6 28.2 14.8
Package tours 22,686 1.2 2.6 3,724 4.2 6.1 16.4
Individual travel 23,618 6.0 6.4 525 15.4 18.2 2.2
Inbound travel 3,472 83.9 85.9 448 52.4 54.0 12.9
Other 507 (77.4) 1.6 478 (42.8) (5.0) 94.3
Total 141,744 3.0 12.0 18,996 0.7 12.2 13.4
(Millions of yen)
* Adjusted YoY change compares the year-on-year change excluding financial results in the previous fiscal year of Kinki Nippon Tourist Tohoku, Kinki Nippon Tourist Chugoku Shikoku, and Kinki Nippon Tourist Merchandising, and excluding financial results of the Individual Travel businesses of Kinki Nippon Tourist Hokkaido, and Kinki Nippon Tourist Kyushu, all of which where split off in January 2012.
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Consolidated Balance Sheets at the End of the FY2012 Interim Period
June 30, 2012 December 31, 2011 Increase/decreaseCurrent assets 69,039 66,394 2,645
Cash and deposits 29,727 32,630 (2,903)
Fixed assets 25,040 26,369 (1,329)Total assets 94,080 92,763 1,317
Current liabilities 87,084 84,322 2,762Trade accounts payable
and unsettled travel tickets
43,743 43,836 (93)
Fixed liabilities 4,985 5,512 (527)Total liabilities 92,069 89,835 2,234
Total net assets 2,010 2,927 (917)Retained earnings (10,384) (8,991) (1,393)Total liabilities and
net assets 94,080 92,763 1,317
Main factors for increases and decreases
(Millions of yen)
Cash and deposits (3,403)Advanced payments for group tours 3,671Software (746)
Assets
Sales and trade accounts payable (875)Trade accounts payable (951)(Lump sum retirement payments)Deposits payable 3,996Accrued retirement benefits for employees (472)
Liabilities
June 30, 2012 December 31, 2011Capital adequacy
ratio (%) 2.1% 3.1%
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Consolidated Cash Flow Statement for the FY2012 Interim Period
Cash flows from operating activities increased 1,591 million yen, mainly as a result of increases indeposits payable and advanced payments received for group toursCash flows from investment activities rose 2,453 million yen owing to an increase of about 2.4billion yen resulting from the reduction of expenses for acquiring fixed assets such as softwaredevelopment equipmentCash flows used in financing activities increased 3,003 million yen as a result of an increase in short-term debt of 3.0 billion yen borrowed from Kintetsu Corporation in the previous fiscal year.
FY2012 first half FY2011 first half Increase / decrease
Cash flows from operating activities (3,432) (5,023) 1,591
Cash flows from investment activities (739) (3,192) 2,453
Cash flows from financing activities (13) 2,990 (3,003)
Cash and cash equivalents at the end of
the interim period27,509 28,328 (819)
(Millions of yen)
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Initiatives for the Second Half of FY2012 and Beyond—Part 1
Group Tour Business
London Olympic Games (official travel agent for theJapanese Olympic Committee)Official sponsor of the committee bidding for the 2020Olympics and Paralympics in TokyoMarathons in Japan including the Hokkaido, Osaka, and Kobe marathons
Expand business in the MICE market, and proposal-style
sales targeting companies and organizations
Travel package for fans of EXILE in HawaiiNational winter athletic meet in Gifu PrefectureCapitalize on demand for trips related to Shikinen Sengu Ceremony in IseKids Project of the Japanese Red Cross Society
Capitalize on demand related to sports
Stimulate demand for travel to sports and cultural events in the
educational sphere
National inter-high-school athletic tournament in Japan’s Hokushinetsu region
FY2011 results FY2012 targetsGroup Tour Business
sales 113.0 125.9
Combined results from KNT and regional subsidiaries (Millions of yen)
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Initiatives for the Second Half of FY2012 and Beyond—Part 2
2011 results 2012 targetsCombined sales from outlets 2.2 3.6Amount from outlets in China 1.1 1.3
Individual Travel Business Introduce the KNT Members’ Club in July, a new membership system using both over-the-counter andWeb-based salesEnhance customer consulting services at outlets to improve sales of high-value-added travel packagesDesign and plan more Web-based travel packages to increase the proportion of Web-based sales
Global Business
(Billions of yen)Strengthen business in China and AsiaOrganize travel to Japan with local subsidiaries in China and AsiaImprove collaboration with tour operator KNT Asia Co., Ltd.
Sales from all outlets in China and Asia
2011 results 2012 targetsMate and Holiday business sales 134.8 137.0Amount of Web sales from above 16.0 25.0
(Billions of yen)Web-based sales from the Mate and Holiday businesses
2011 results 2012 targetsWeb sales 20.5 30.0
(Billions of yen)Sales and targets for Web-based sales
020406080
100120140160
2011 2012
12% 18%
Proportion of Web-based sales from the Mate and Holiday businesses
The KNT Members’Club Card
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Full-Year Forecasts of Consolidated Financial Results for FY2012
FY2012 forecast FY2011 results Increase (%) Previous forecast announced Feb. 17, 2012
Operating revenue 62,600 56,556 10.7 64,000
Operating income 2,600 1,132 129.7 2,000
Ordinary income 2,700 1,270 112.6 2,000
Net income 1,400 711 96.9 1,600
(Millions of yen)
010,00020,00030,00040,00050,00060,00070,000
FY2011 FY2012 forecast0
200400600800
1,0001,2001,4001,600
FY2011 FY2012 forecast
Operating revenue Net income
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FY2012 forecast FY2011 results Increase (%) Previous forecast announced Feb. 17, 2012
Operating revenue 46,300 45,425 1.9 47,900Ordinary income 1,700 736 131.0 1,600
Net income 1,100 559 96.8 1,400
(Millions of yen)
0500
1,0001,5002,000
FY2011 FY2012forecast
Consolidated Non-consolidatedFY2012 forecast YoY change Increase (%) YoY change
Business investment 1,264 (4,906) 1,100 (4,872)Depreciation 2,840 811 2,500 699
Operating revenue Net income
010,00020,00030,00040,00050,000
FY2011 FY2012 forecast
Full-Year Forecasts of Non-Consolidated Financial Results for FY2012
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Forecasts of Full-Year Non-Consolidated Sales and Operating Revenue by Type of Travel for FY2012
Sales YoY change (%)
Adjusted YoY change* (%
Operating revenue
YoY change (%)
Adjusted YoY change* (%)
Rate of return (%)
Group tours 102,500 0.2 14.8 16,400 (0.1) 13.3 16.0
Travel in Japan 66,000 (8.8) 6.9 10,900 (9.4) 4.8 16.5
Outbound Travel 36,500 21.8 32.3 5,500 25.5 34.9 15.1Package tours 137,000 1.6 9.8 23,800 3.9 13.6 17.4Travel in Japan 79,000 (1.2) 11.9 14,500 0.2 14.7 18.4
Outbound Travel 58,000 5.8 7.1 9,300 10.2 12.0 16.0Individual travel 84,200 (1.0) 1.2 3,800 3.5 9.3 4.5Travel in Japan 36,100 (0.4) 4.5 2,700 3.3 10.6 7.5
Outbound Travel 48,100 (1.5) (1.1) 1,100 4.0 6.3 2.3Inbound Travel 9,300 79.9 82.4 1,300 64.8 67.7 14.0
Other 1,000 (81.4) (23.4) 1,000 (39.3) 13.4 100.0Total 334,000 0.4 10.0 46,300 1.9 14.2 13.9
(Millions of yen)
* Adjusted YoY change compares the year-on-year change excluding financial results in the previous fiscal year of Kinki Nippon Tourist Tohoku, Kinki Nippon Tourist Chugoku Shikoku, and Kinki Nippon Tourist Merchandising, and excluding financial results of the Individual Travel businesses of Kinki Nippon Tourist Hokkaido, and Kinki Nippon Tourist Kyushu, all of which where split off in January 2012.
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Inbound travel3%
Group tours31%
Individual travel25%
Package tours41%
Reference: Non-consolidated Sales by Type of Travel
SalesGroup tours 102,500Package tours 137,000Individual travel 84,200Inbound travel 9,300Other 1,000Total 334,000
(Millions of yen)
Holiday42% Mate
58%
General ECC57%
Education43%
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IR Inquiries
These materials are not intended to solicit investment. These materials are provided asreference; please refer to the financial statements and securities reports for accurate earningsfigures. The earnings forecasts provided in these materials are based on information availableat the time of writing, but actual results may differ from the forecasts as a result of changes in arange of factors.
Kinki Nippon Tourist Co., Ltd.
Brand Strategy Office, Public Relations Department Higashi-Kanda Fukoku Seimei Building, 1-7-8 Higashi Kanda, Chiyoda-ku, Tokyo, Japan 101-8641Telephone: +81-3-6891-6824Fax: +81-3-6891-6890URL: http://www.knt.co.jp/kouhou/