Last updated: January 12, 2017 Business model & Business summary IDOM Inc. (7599)
Ratio of new cars and used cars in Japan and the U.S. Japan s ratio of used cars is less than that of the U.S./Europe, and there is room for expansion in the Japanese used car market. New cars : Used cars Japan 2 3 U.S.A. 1 2 2
Car max, example for leading company in US used car market (unit : car) Earnings before income taxes Wholesale Retail (unit : million dollars) 1,000,000 800,000 1,000 800 Earnings before income taxes 1,000 million dollars (115 600,000000 600 Number of wholesale 390 thousand cars 400,000 400 200,000 200 Number of retail car sales 620 thousand cars 0 11/2 12/2 13/2 14/2 15/2 16/2 0 Source:Car Max Annual Report 3
Generationally Differentiated Research Increase in interest among younger generation in buying used cars Ratio of respondents who bought a used car for their first car Ratio of respondents who would consider buying a used car for their next car Ratio of respondents who would consider buying a used car more seriously than before (unit : %) (unit : %) (unit : %) 40 38% 70 50 35% 62% 60 51% 40 30 50 25% 42% 40 30 26% 20 30 20 33% 42% 10 20 10 10 0 40s 30s 20s People in their 20s People in their 20s 20 years ago 10 years ago 0 40s 30s 20s 0 40s 30s 20s * Result from an Internet survey conducted in August 2014 (target: 1000 persons) 4
Gulliver s brand power 1 Over 70 bn in total accumulative advertising fees since establishment 2 Approx. 500 stores nationwide, primarily directly managed stores (unit: million yen) 70,000 60,000 50,000 40,000 30,000 1997 Naoto Takenaka commercials 1996 Yuri Mitsui commercials 2003 Hideki Matsui commercials 2002 Norika Fujiwara commercials Aug. 2003 Listed on the first section of the TSE Dec. 2000 Listed on the second section of the TSE 2007 Title sponsor of the pro baseball all-star game Approx. 500 stores 20,000 Dec. 1998 IPO (now JASDAQ) 10,000 0 97/2 98/2 99/2 00/2 01/2 02/2 03/2 04/2 05/2 06/2 07/2 08/2 09/2 10/2 11/2 12/2 13/2 14/2 15/2 Brand awareness 96% 2008 survey of 12,800 people 5
IDOM trajectory achieved through enhancement of purchasing business 1994 Establishment of Gulliver International Co., Ltd. 1998 1999 2000 2003 2004 2006 Establishment of listing on OTC market in 2nd fastest time ever Launch of Dolphinet System operations Achieving 500th Gulliver store opening Listed on TSE Second Section in fastest time ever from founding Moved head office to Marunouchi, Tokyo Designated for TSE First Section Becoming Japan s only Hyper Growth Company * Received Porter Prize *Words of praise in America for being a company that achieved net sales of $1 billion within 10 years of the company s founding 6
Number of cars purchased by major car purchasing companies (unit: car) 250,000 200,000 150,000 100,000 No.1 A commanding lead as in Directly managed store car purchases A regular inventory of 6,000 cars Franchise store car purchases Directly managed store car purchases 50,000 0 IDOM Rabbit T-U P Apple Carchs U-POHS CARSEVEN Source: Above figures and breakdown of directly managed and franchise stores compiled by Gulliver based on Yano Research Institute, 2014results of Used Car Distribution Industry 2015 (includes estimates) 7
Dolphinet System Purchased vehicles are registered on Dolphinet and can be viewed at stores nationwide Registered information Detailed vehicle information Vehicle exterior / interior images Model / Make / Year / Distance driven Main equipment (options, features) Past repair history Exterior condition (small dents and scratches) Interior cleanliness rank (5 levels: A - E) Valuation score (out of 100) Schedule leading up to wholesales 8
Car Distribution Flow at IDOM s Directly Managed (past) General Consumers Luxury foreign cars Foreign cars People movers Eco-cars Light cars Older model cars Appraisal Purchase(Stock) Pool Center Inventory time: limited to two weeks (hard-and-fast rule) Auction Sites Approx. 120 sites USS JU JAA Bought by Used-car dealers Aucnet Wholesale B to B 9
Car Distribution Flow at IDOM s Directly Managed (present) General Consumers Luxury foreign cars Foreign cars People movers Eco-cars Light cars Older model cars Appraisal Purchase(Stock) Retail Sales B to C Low price cars Light car specialist Original Gulliver Mid-sized car show space Large-sized car show space Shopping mall Foreign car specialist Luxury foreign car specialist Auction Sites Approx. 120 sites USS JU JAA Aucnet Inventory time: limited to two weeks (hard-and-fast rule) Bought by Used-car dealers Wholesale B to B 10
Overseas business Thailand Export USA U.S.A Australia New Zealand 11
Top U.S. Companies New car sales AutoNation(http://www.autonation.com) Used car sales CarMax(http://www.carmax.com/) Net sales (Approx. 2,400.7 20,862 million USD Net sales 15,149 million USD (Approx. 1,743.3 Net income 442 million USD (Approx. 50.8 Net income (Approx. 71.6 623 million USD Market capitalization 4.83 billion USD (Approx. 489.4 Market capitalization 11.28 billion USD (Approx. 1,143.1 Internet TrueCar(https://www.truecar.com/) Internet / Infrastructure CoxAutomotive (http://www.coxautoinc.com/) t /) Net sales Net income Market capitalization ti 259 million USD -64 million USD 816 million USD (Approx. 29.8 (Approx. -7.3 (Approx. 82.6 Manheim(Auctions) Autotrader(Internet media) Kelly Blue Book(Internet media) V Auto(Software) and others are included as subsidiaries. Group employees number approximately 33,000. *Net sales and net income converted at 1 USD = 115.08yen *Market capitalization based on closing price on August 31, 2016. Converted at 1 USD = 101.34yen 12
IDOM Group IDOM Inc. Direct 414 Franchise 89 100% 100% 100% 100% 100% 100% 100% 100% 49% G-One Fi nancial Serv vices Co., Lt td Gulliver In surance Co., Ltd. Gulliver In surance Co., Ltd. Motoren Global Co., Ltd. Direct 2 Motoren Glanz Co., Ltd. Direct 12 Tokyo My Car Sales Co., Ltd. Direct 3 Gulliver Australia Holdings Buick Holdings Direct 25 Australia Direct 3 100% Direct 1 Gulliver U.S.A. Gulliver EAST USA Gulliver New Zealand V-Gulliver Direct Franchise 1 8 New Zealand Thailand Car loans (Business Activities terminated) Insurance agency Advertising agency BMW/Mini Dealer Overseas Business *As of February 29, 2016 13
Directors, Auditors and Advisers (As of June 1, 2016) President Yusuke Hatori President Takao Hatori Internal Internal Born in 1971. Joined Gulliver in 1995, one year after its foundation. Set up several stores, starting with the Sapporo store. After serving as director, executive director, and senior executive director, appointed representative president and director in 2008 with the transition to a dual president structure. Currently responsible for corporate strategy, and supervises overseas business, franchise operations, and administration division, among others. Born in 1972. Joined Gulliver in 1995, one year after its foundation and established the first Kanto store. After serving as director, executive director, and senior executive director, appointed representative president and director in 2008 with the transition to a dual president structure. Currently responsible for corporate strategy and supervises directly managed businesses in general. Director Masaru Ohta Internal Born in 1964 and joined the Company in 1997. Appointed executive officer in 2009. Appointed director in 2016. Currently supervises Gulliver business as the Gulliver Company Leader. Director Go Kawada Outside Independent Director Born in 1942. Joined the National Tax Agency and worked as chief of the Sendai National Tax Agency Bureau among other important posts. Registered as a tax accountant in 1996. Taught as a practicum teacher, including as a Professor at Meiji University Graduate Schools. Appointed director of Gulliver in 2015. Currently serves as Audit & Supervisory Board member of Nippon Kasei Chemical Co., Ltd., outside Audit & Supervisory Board member of HONMA Corporation, outside Audit & Supervisory Board member of DAIREI CO.,LTD., and outside Audit & Supervisory Board member of Nihon Unisys, Ltd. Auditor (Full-time) Kunie Yanagawa Internal Served at Itochu Corporation before joining Union Optical Co., LTD., where he served as representative director and president and representative director and chairman. Subsequently held several board member positions at companies including a subsidiary of Gulliver. Appointed Audit & Supervisory Board member of Gulliver in 2016. Auditor Masakatsu Endo Outside Independent Director Tax accountant. Representative director of Wakaba Kaikei Center. Appointed Audit & Supervisory Board member of Gulliver in 2000. Honorary Chairman Kenichi Hatori Founded Gulliver in 1994. Appointed representative director and chairman of Gulliver in 2008. Appointed honorary chairman of Gulliver in 2016. Auditor Hiroto Nakamura Outside Independent Director Certified public accountant. Head of Nakamura Accounting Office. Appointed Audit & Supervisory Board member of Gulliver in 2008. Currently serves as outside Audit & Supevisory Board member of MANDARAKE INC. Adviser Hideo Yamada 12th Commissioner General of the National Police Agency. Appointed advisory of Gulliver in 2016. 14