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August 2020 Version Investors Guide ASKUL Corporation Tokyo Stock Exchange, First Section (Securities Code: 2678)
August 2020 Version
Investors Guide
ASKUL CorporationTokyo Stock Exchange, First Section
(Securities Code: 2678)
Note:
This material contains the ASKUL Group’s current plans and performance outlook. These plans, forecasts, and other forward-looking statements represent ASKUL’s plans and forecasts based on information that is currently available. Actual performance may differ from these plans and forecasts due to a variety of conditions and factors that could occur in the future. This material does not represent promises or guarantees regarding the achievement of these plans. This material has not been audited by certified public accountants or auditing firms.
For the purpose of this material, LOHACO refers to the online mail-order business for general consumers launched in October 2012 in alliance with Yahoo Japan Corporation.B-to-B refers to business-to-business transactions. B-to-C refers to business-to-consumer transactions.MRO refers to Maintenance, Repair and Operation, and in this material primarily refers to indirect materials consumed at work sites by companies.
Since the presentation of the overview of consolidated financial statements for the fiscal year ended May 20, 2016, ASKUL has been reporting its operating performances by dividing its organization into the segments of the E-commerce business, Logistics business, and Other. The E-commerce business deals with sales of OA and PC supplies, stationery, office living supplies, office furniture, foods, alcoholic beverages, pharmaceuticals, cosmetics, etc. The logistics businessrefers to logistics and package transport services that target corporations.
As abbreviation of ASKUL Logi PARK and ASKUL Value Center, the words of “ALP” and “AVC” are used, respectively, in this material.
Reproduction or reprinting in any form of all or part of this material (including trademarks and images) without the permission of ASKUL is prohibited.
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1. What is ASKUL?
2. B-to-B Business—B-to-B Mail-Order No.1
3. B-to-C Business—Aim for No.1 in Daily Goods EC
4. Return to Shareholders and Dividends
5. ESG
2
1. What is ASKUL?
3
Company Name ASKUL Corporation
Securities Code 2678 (First Section of Tokyo Stock Exchange)
Representative Akira Yoshioka, President and CEO
Head OfficeToyosu Cubic Garden,3-2-3 Toyosu, Koto-ku, Tokyo
EstablishmentMarch 1993Started office supplies mail-order serviceas ASKUL Business Division within PLUS Corporation
Capital Stock 21,189 million yen (As of May 20, 2020)
Net Sales 400.3 billion yen (Consolidated: FY5/2020)
Number of Employees 3,493 (As of May 20, 2020 on a consolidated basis)
Corporate Profile
4
Name Major Business Description
ASKUL LOGIST CorporationManagement in distribution centers and small deliveries
AlphaPurchase Co., Ltd. Selling MRO commodities and facility management
SOLOEL Corporation Agent marketing “SOLOEL Enterprise”
Charm Co., Ltd. Mail order service for pet goods and living animals
Tsumagoimeisui Corporation Manufacture and sale of natural mineral water
Businessmart Corporation ASKUL agent
Major Group Companies
5
Innovate for Customers
Corporate Philosophy
6
E-commerce business Logistics business
OtherbusinessB-to-B business B-to-C business
Net sales for FY5/2020
329.0 billion yen 63.3 billion yen 7.1 billion yen 0.7 billion yen
CustomersFrom SMEs to mid-
level to large enterprises
Individual consumers
— —
Sales channels/services, etc.
ASKULSOLOEL ARENA
APMRO and others
LOHACOCharm
Logistics and delivery services
Drinking watermanufacture
and sale
Sales toolsCatalogs and
websitesWebsites — —
Year ofbusiness start
1993 2012 2009 2015
Business Segments of ASKUL (based on disclosed information)
7
Two Major Businesses of ASKUL(FY5/2020: Net sales of E-commerce business: 392.4 billion yen)
Catalogs for office suppliesSpring/Summer 2020 Catalog
B-to-B business
LOHACO, online mail-order business for individuals
(Net sales for FY5/2020:
63.3 billion yen)
B-to-C business
Mail-order business for corporate customers
(Net sales for FY5/2020:
329 billion yen) 8
Net Sales Composition by Category
OA and PC supplies28%
Office supplies13%
Daily goods34%
Furniture6%
MRO10%
Medical goods, etc.9%
Non-consolidated net sales
349.1 billion yen(FY5/2020)
9
10
Trend in Consolidated Net Sales
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500(100 million yen)
(Note) Data up to the year ended May 1997 refers to the performance of the ASKUL Division of PLUS Corp., and neither certified public accountants nor auditing firms were involved in the preparation. FY5/2020
400.3 billion yen
Plan for FY5/2021403.0 billion yen
B-to-B business
Logistics business and other
B-to-C businessE-commerce
business
Office DEPOT(May 1996)OfficeMax(November 1997)
Major foreign companies entered
Japanese market
KOKUYO Co., Ltd. (October 2000)
Largest stationery manufacturer
entered market
Amazon(November 2000)
World's largest online bookstore entered Japanese market
OTSUKA CORPORATION(2001)
Full-scale entry by a leading office
equipment supplier
Global financial crisis(September 2008)
Great East Japan Earthquake(March 2011)
(Note) Data up to FY5/1997 refers to the performance of the ASKUL Business Division of PLUS Corporation, and neither certified public accountants nor auditing firms were involved in the preparation.
(Plan)
2. B-to-B Business
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Mission of B-to-B Business (At the time of establishment)
Providing SMEs with better services than the ones large
enterprises are normally receiving
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Less than 10 employees
Market size1.5 trillion yen
Go to stores to purchase stationery
5%
95%
Number of private business establishments: 6.6 million
(1991)
SMEs
Large corporations
Mid-level corporations
Less than 30 employees
Full service Direct sales
30 or more employees
ASKUL’s customers
Individuals
Stationery market
Corporations
History of ASKUL
There was major business opportunity in mail-order sales of office supplies for mid-level enterprises and SMEs.
13
Mission of B-to-B Business (Current)
Provide Reliable Services to All Workplaces as a Lifeline for People Working There
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Search engineRecommend on a 1-to-1 basis
Strengthen search on a 1-to-1 basis
Expand lineup of original productsExpand lineup of long-tail productsRe-expansion of in-stock products
Big data accumulated in one of the largest B-to-B customer bases in Japan
Minimize sold-out productsImprove delivery quality
LogisticsMarketingProducts
Increase the number of purchasing customers Increase the number of products purchased
Improve customer satisfaction
Cumulative purchase amount
More than ¥3 trillion*
Cumulative number of orders
More than 500 million cases*
DX (Digital Transformation) x AI
* Big data on purchases in the B-to-B business, accumulated from May 21, 2006 to May 20, 2020
Annual page views
More than 1.2 billion PVs*
Growth Strategy for B-to-B Business
Optimal growth cycle by pushing DX strongly
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Highly efficient
logistics and delivery
Partnerships with suppliersEC deploying technologies
Partnerships with agentsASKUL Group logistics
Partnerships with other carriers
Merchandise assortment and
pricingSales places
Agent model
Strengths of B-to-B Business
16
Merchandise assortment and
pricingSales places
Partnerships with suppliersEC deploying technologies
Strengths of B-to-B Business (1)
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Merchandise assortment and
pricingSales places
Head products
Nu
mb
er
of
goo
ds
sold
Number of items
Fierce price competition
Increase gross margin by putting ASKUL original products on the market.
Long-tail products
Professional products that differ by industry or job description
(Direct delivery from suppliers)
Moderate price competition
High growth x High operating profit margin
B-to-B Product Strategy: Head and Long-Tail Products
Shift in the core of merchandise assortment from head products to long-tail products in growth fields
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Realize differentiation and profitability reinforcement simultaneously.
Double branding with major manufacturers
Medical suppliesSupplies for factories and
frontlines
*ASKUL original products include those for limited offers by ASKUL.
Strengthen ASKUL Original Products* through Cooperation with Suppliers
Make ASKUL original products that are daily necessities at the workplace.
Hygiene and nursing care products
Merchandise assortment and
pricingSales places
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Sales history
Web log
Customer information
Inquiry history
Big data
AIMachine learning
Segment mail
Recommended products
Catalogs and direct mail
Attractive content
＋
SEO and SEM
Separate out contents
Deploy Technology and Evolve into the Best Choice in E-Commerce
Utilize big data and AI to maximize the number of active customers and the number of products purchased.
Merchandise assortment and
pricingSales places
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Agent model
Partnerships with agents
Strengths of B-to-B Business (2)
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Agent model
AgentsCustomers ASKUL
Customers
Customers
Charge(Price of goods)
Product delivery, catalog shipping out, billing, etc.
Order placing and inquiries
Charge(1) Price of goods
(2) Outsourcing fees
Payment
Payment (price of goods)
Payment (outsourcing fees)
<Roles of Agents>
(1) Cultivate new customers
(2) Manage credit to customers and collect accounts receivable
(3) Promote adoption of “SOLOEL ARENA” services for mid-level and large corporations
(4) Provide fine-tunedresponses to individual customers
Take Advantage of Each Other’s Strengths between ASKUL and Agents
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Highly efficient
logistics and delivery
ASKUL Group logisticsPartnerships with other carriers
Strengths of B-to-B Business (3)
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Highly efficient
logistics and delivery
Automation makes it possible to pack multiple
commodities in one box, and ship them out as quickly as possible.
Ideal for handling standard items and daily necessities for workplaces in E-commerce
Product characteristicsStandard and daily necessities indispensable to business
Customer needs“I want goods to be delivered ASAP”
“We need the goods for tomorrow's work.”
Features of ASKUL Logistics
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(1) Logistics foundations that realize nationwide same-day or next-day deliveries
(3) Advanced logistics systems, facility design, and utilization capability
(2) In-house operation of center management and distribution
(4) Partnership to handle Japan's largest volumes in cooperation
Others
Delivery 60%
Logistics centers 100%
Other carriers
Strengths of ASKUL LogisticsHighly
efficient logistics
and delivery
ASKULLOGIST
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Sendai DMC
Nagoya Center ASKUL Logi PARK Yokohama
DCM Center
Shinsuna CenterOsaka DMC
ASKUL Logi PARK Fukuoka
AVC HidakaAVC Kansai
Only for B-to-B business:
For B-to-B business plus B-to-C business:
Only for B-to-C business:
Logistics Centers throughout Japan
Main nine logistics centers that realize nationwide same-day and next-day deliveries
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Highly efficient logistics
and delivery
B-to-B(Eight places)
LOHACO(Two places)
Same-day delivery area
Next-day delivery area
■ Same-day delivery areaOrders received by 11 o'clock:
To be delivered same dayOrders received by 18 o'clock: To be delivered the next day
■ Next-day delivery areaOrders received by 18 o'clock: To be delivered the next day
■ Next-day delivery areaOrders received by 15 o'clock: To be delivered the next day
Time-zone designated delivery
Logistics centers
Next-day delivery area
Logistics centers
Ratio of sales in same-day delivery area and next-day delivery area
Same-day and next-day delivery areas
In B-to-B, same-day delivery service is offered in urban areas in which a great number of customers are located.
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Same-day delivery
area
Next-day delivery
area
Highly efficient logistics
and delivery
* including partners’ vehicles* Based on the number of
deliveries
Othercarriers ASKUL
Group*
(1) Delivery to corporate customersAbsence rate is low
(2) Customers concentrate in urban areasDelivery density is high
In in-house delivery areas (urban areas)
High delivery efficiency
Net sales: 300 billion yen
Characteristics of B-to-B delivery
B-to-B Delivery by ASKUL Group
Deliveries in urban areas in which efficient delivery is possible will be handled by our group with deliveries in other areas to be conducted in cooperation with other carriers.
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Highly efficient logistics and
delivery
3. B-to-C Business
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B-to-C Background of Entering E-Commerce Market
October 2012
LOHACO StartWith the spread of smartphones and a shiftto E-commerce, the distribution market is
changing dramatically, and the barriers between B-to-B and B-to-C will disappear.
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B-to-B B-to-C
Leverage merchandise
assortment and the strength of
logistics
Apply the merchandise assortment and logistics that can deliver heavy and bulky products speedily, which we have learned through B-to-B, to B-to-C.
Necessities in workplaces Daily necessities
Significance of LOHACO in Society
“I hope to ease as much of the burden on women who are extremely busy with work, child-rearing, housework and nursing-care as
possible.” (from a message from the president on a corporate website)
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Priority put on scale
Expand products handled,centered on commodities
Realize unique value EC
Toward growth that comes together with profitability
improvement
From LOHACO Start From December 2018
LOHACO Strategic Shift Switch to Unique Value EC
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ProductsAttract
customersDevelop products with unique
value in cooperation with suppliers.
Logistics
Customers shop around and repeat purchase.
Attract customers efficiently through PayPay Mall Store.
Differentiate and reduce costs through ASKUL Group logistics.
Strengths of LOHACO
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Products
Develop products with unique values in cooperation with
suppliers.
Strengths of LOHACO (1)
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Products
Improve gross profit margin.
B-to-B original productsProducts specially designed for
E-commerceLOHACO original products
Expand Products with Unique Values
Expand merchandise assortment of high added value productsunique to LOHACO.
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Logistics
Differentiate and reduce costs through ASKUL Group logistics.
Strengths of LOHACO (2)
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Logistics
B-to-B in-house delivery area
LOHACO in-house delivery area
Load LOHACO’s cargo in in-house delivery vehicles for B-to-B
LOHACO in-house delivery areas are mostly the same as those in B-to-B
Workings of LOHACO In-House Delivery
Build LOHACO in-house delivery based on our B-to-B delivery network.
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Designate delivery times between 6:00 a.m. and 0:00 a.m.
Collect cardboard boxes
Expand applicable areas to 20 wards in Tokyo and 16 wards in Osaka.
Pick up atdesignated places
Designate times in units of two hours
LogisticsUnique Delivery Service “Happy On Time”
Pursue differentiated services that can be possible only with in-house delivery.
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The number of deliveries can be decreased by raising sales unit price per box.
Deliver cost per box
Deliver cost per box
Deliver cost per box
Sales unit price per box at 1,500 yen
Sales unit price per box4,000 yen
Sales unit price per box at 5,500 yen
Create a website that facilitates bulk buying
Pack all in one box
LogisticsReduce Delivery Costs by Raising Sales Unit Price per Box
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Product policy Logistics centers Delivery
PricingIncentive
Unbundle and pack with
other goodsReduce costs
One-box eco
Planning, manufacturing
and pricing
Pack at the bottom of boxes with
other goods
Reduce costs
LOHACO Water
Supplement
The effort to reduce delivery costs by containing a case of drinks in one cardboard boxDevelop special PET bottles and cardboard boxes and install a dedicated production line whereby five two-liter PET bottles can fit at the bottom of a cardboard box.
The effort to reduce delivery costs by reducing sales of drinks contained in casesSet the price of unbundled drinks low and charge drink delivery fees for purchases that weigh 18 kilograms or more.
To be placed at the bottom of a cardboard box
Pack unbundled drinks in a cardboard boxwith other goods
LogisticsValue Chain from Operation of Logistics Centers to Delivery
Promote differentiation and reduce logistics costs through coordination from product policy to delivery.
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Attract customers
Attract customers efficiently through PayPay Mall Store.
Strengths of LOHACO (3)
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Attract customers
Pu
rch
ase
am
ou
nt
Number of orders
PayPay Mall Store
Acquire new customers
LOHACO Main Store
Frequentcustomers
Incr
eas
e u
nit
p
rice
s
Expand products with unique values
The repeat rate rises
Turn first-time customers into repeat customers
Purchases of daily goods are made
mainly in LOHACO
Promote bulk buying
Purchase mainly commodities piece by piece
Prefer ASKUL original products and products designed unique to E-commerce and shop
around for daily goods
LOHACO Future Customer Strategy
Deepen engagement with new customers acquired through the PayPay Mall.
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4. Return to Shareholders and Dividends
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期末配当
中間配当
期末配当
中間配当
0
5
10
15
20
25
30
35
40
FY5/2016 FY5/2017 FY5/2018 FY5/2019 FY5/2020 FY5/2021
Forecast
(Yen)
Year
-en
d d
ivid
en
dIn
teri
m d
ivid
en
dReturn to Shareholders and Dividends
FY5/2021 dividend (forecast) Annual dividend per share: ¥38
(Interim dividend: ¥19, Year-end dividend: ¥19)
Plan to pay dividends stably
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5. ESG
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Environment Social Governance
Response to climate change issues
Plastic-free operations
Resources recycling
Responsible procurement
Creation of a framework to support workers
Promotion of diversity and the advancement of women
Labor situations throughout the supply chain
Support for reconstruction after the Great East Japan Earthquake and education
Full practice of management in compliance with laws and regulations
Impartiality between major shareholders and general shareholders
Appropriate appointments of independent outside directors
Aim to solve social issues through business activities.
Continue to innovate for our customers and realize a sustainable society.
Commitment to ESG
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● 2003 Formulated ASKUL Environmental Policy
● 2013 Formulated Medium-Term Environmental Targets
● 2016 Announced "2030 CO2 Zero Challenge" and signed “United Nations Global Compact”
●2018 Obtained "Eco-First company" and "SBT" Certification
●2019 Announced support for “TCFD
recommendations”
●2020 Selected as a “Climate Change A list“
company
“RE100” is an international business initiative, participated by companies that publicly aim to operate their business with 100% renewable energy
“EV100” is an international business initiative, participated by companies that publicly aim to replace all of their business-purpose vehicles with electric vehicles
The "Eco-First Company" is a company chosen by the Minister of the Environment as a company that engages in "advanced, unique and industry-leading business activities" in environmental conservation activities, such as global warming countermeasures and waste and recycling measures
"SBT: Science Based Targets" are corporate targets to reduce global warming gas. The “Science Based Targets” organization, an international initiative, will approve them as targets that aim at scientifically based levels to achieve the "2ºC target (Efforts to keep the temperature well below 2ºC and bring it below 1.5ºC)" set out in the Paris Climate Accord
"TCFD recommendations" are international propositions, compiled by the "Task Force on Climate-related Financial Disclosures (“TCFD"), concerning how corporations should voluntarily disclose information for the purpose of identifying and disclosing the financial impacts of risks and opportunities caused by climate change
Companies included in "Climate Change A list" are ones selected as the highest-rated by the international non-profit environmental organization Carbon Disclosure Project, CDP. If companies are taking excellent actions in response to climate change and disclosure of their information, they will be included in the list
● 2017 Joined RE100 and EV100
United Nations Global Compact (UNGC) is a voluntary initiative by which companies and organizations act as good members of society and participate in the creation of a global framework that realizes sustainable growth by demonstrating responsible and creative leadership
Environmental Initiatives
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期末配当
期末配当
Decarbonization Resource recyclingDevelopment and procurement
of environmentally-friendly products
Environmental communication with stakeholders
Reduce disposal of returned products✓ Reduce returned products that lead
to their disposal
✓ Remake returned products into salable products
✓ Sell returned products as “imperfect ones” at a discount
Environmental response by original productsDevelopment of original products by paying attention not only to quality and design but also to the environment
Prepare a lineup of plastic-free products
Environmental activity report
“EV100”Replace delivery vehicles owned and used by ASKUL LOGIST 100% with electric vehicles by 2030
Sustainability handbook
Collect catalogs, cardboard boxes, and paper bags
Collect and recycle toner cartridges
Environmental Initiatives
ASKUL Environmental PolicyFollowing our corporate philosophy of “Innovate for Customers,” we will build
an eco-platform that is “optimum” and “low-cost” to our customers, society, and the earth environment in order to realize a sustainable society.
“2030 CO2 Zero Challenge”Reduce CO2 that is emitted by business sites and distribution down to zero by 2030
“1 box for 2 trees”Confirm planting of two eucalyptus, double the amount of raw materials, by purchasing one box of original copy paper
“RE100”Raise a group-wide renewable energy utilization ratio to 34% by FY5/2021 toward realizing 100% by 2030
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Paper cups for social contributionA portion of sales is used as donations to support activities for assisting disaster victims, support for “Pink Ribbon Activities (Raising Awareness of Breast Cancer Screening)” and support for “Kids Earth Funds.”
Together with colleagues Together with customersInitiatives with business
partnersSocial contribution
activities
Social Initiatives
Diversity-oriented management“ASKUL's Declaration of Diversity” (2015)
Utilization of diverse human resourcesPromotion of active female participation and enhancement of the ratio of female managers
Promotion of diverse work stylesSystems for leave and shorter working hours for family care
Telework system, flextime system, etc.
Free lunches offered at ASKUL LOGIST distribution centerIt is important that peopleworking at ASKUL are healthyboth physically and mentally.
ASKUL LOGIST ALP Fukuoka's efforts to employ persons with disabilities in cooperation with local communitiesThe ratio of employees with disabilities to all employees is 17.2% as opposed to the legal employment ratio of 2.2%.
(As of January 30, 2020)
Improvement activities starting with customer voices Sharing customer voices and
responses to them on a real-time basis.
Operation of the “Customer Satisfaction Improvement Committee”Promotion of the PDCA activities that start from customer voices, and chaired by CEO
Activities of ASKUL CS WeekInitiatives to enhance the motivation of concierge service communicators (CSC) engaged in customer relations and to promote their mutual communication.Conduct commendation ceremonies for CSCs who have received words of appreciation from customers on many occasions, and certificate award ceremonies for “super communicators” as role models to aspire and give awards for long service for CSCs.
Supply Chain CSR SurveyInvestigate the status of suppliers’ corporate efforts in areas such as “consumer problems,” “efforts toward the environment,” and “labor practices” and actively communicate with suppliers.
Declaration of support and voluntary action for the “White (employee-friendly) Logistics” promotion campaignA movement to resolve the shortage of truck drivers and efforts to realize a more employee-friendly working environment in which productivity in truck transportation is improved, efficiency in logistics is raised, and some kinds of drivers, such as women and people over the age of 60, can find it easy to work.
Support for education related to reconstruction after the Great East Japan EarthquakeJointly with makers, ASKUL makes contributions to reconstruction by donating equipment and education-related supplies, worth 1% of the sales of applicable ASKUL original design products, to educational facilities in three Tohoku prefectures.
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Governance Structure
Committee of Independent Outside Officers
Nomination and Compensation Committee
Consults the Board of Directors with the aim of establishing a corporate governance system,and enhancing corporate value.
With the aim of contributing to the establishment of appropriate corporate governance and ensuring management transparency, Makes its own examinations, and provides advice and recommendations to the Board of
Directors. Expresses opinions at general meetings of shareholders.
Ensure impartiality between major shareholders and general shareholders
Yumiko Ichige Partner at Nozomi Sogo Attorneys at Law (present position); Outside Director and Audit & Supervisory Committee Member of Sushiro Global Holdings Ltd. (present position); and Director (Outside) of ITOHAM YONEKYU HOLDINGS INC. (present position)Ms. Ichige has served as an outside director and outside audit and supervisory board member at several companies including listed subsidiaries.
Genri GotoFounder and former representative director of Kenko.com Inc. (current Rakuten, Inc.), an online retailer of health-related products; and a serial entrepreneur
Kazuo Tsukahara Former Executive Vice President of Ishikawajima-Harima Heavy Industries Co., Ltd. (current IHI); Outside Director of DIC Corporation (present position); and former outside director at several companiesMr. Tsukahara has abundant experience, achievements, and high levels of insight and ethics in corporate management.
Independent Outside Director
Iwao Taka Professor of Faculty of Economics and Business Administration and School of Economics and Business Administration at Reitaku University (present position); Outside Director and Audit Committee Member of Mitsubishi Estate Co., Ltd. (present position); and External Director of Shoko Chukin Bank, Ltd. (present position).Mr. Taka has highly specialized knowledge, achievements, and experience in the fields of compliance, corporate governance, etc.
Organization Chart of Committees
Board of Directors
Committee of Independent Outside Officers
Nomination and Compensation Committee
CSR Committee
Risk and Compliance Committee
Occupational Safety and Health Committee
Quality Management Committee
Information Disclosure Committee
Internal Control Promotion System
Environmental Management System (EMS) Promotion System
Information Security Management (ISMS) Promotion System
Customer Satisfaction Improvement Committee
Governance Initiatives
Strive to achieve sustainable growth and improve medium to long-term corporate value by practicing management in compliance with laws and regulations more completely, and using transparent, fair,
prompt and decisive decision-making, thereby working to improve corporate governance.
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