(Translation)
Consolidated Financial Results for the Three Months Ended March 31, 2023
May 12, 2023
McDonald's Holdings Company (Japan), Ltd.
Company code number: | 2702 (URL https://www.mcd-holdings.co.jp/en/) |
Stock market: | Tokyo Securities Exchange, Standard |
Representative: | Tamotsu Hiiro |
CEO and President, Representative Director | |
Contact: | Shuko Yoshida |
McDonald's Company (Japan), Ltd. | |
Director, Chief Financial Officer | |
Phone: +81-3-6911-6000 | |
Schedule of dividends payment: | - |
Schedule of quarterly securities report submission: | May 15, 2023 |
Preparation of supplementary materials for quarterly financial results: Yes
Quarterly results briefing: None
1. Consolidated operating results (From January 1, 2023 to March 31, 2023)
- Consolidated financial results
(In millions of yen, with fractional amounts discarded) (Negative figures are shown in parenthesis)
Net income | ||||||||||||||
Net sales | Operating income | Ordinary income | attributable to owners | |||||||||||
of parent | ||||||||||||||
(Millions of yen) | % | (Millions of yen) | % | (Millions of yen) | % | (Millions of yen) | % | |||||||
March 31, 2023 | 92,059 | 9.2 | 8,378 | (13.1) | 8,660 | (9.5) | 5,284 | (13.6) | ||||||
March 31, 2022 | 84,289 | 11.1 | 9,643 | 4.5 | 9,568 | 4.1 | 6,116 | 5.2 | ||||||
(Note) Comprehensive income: | ||||||||||||||
Three months ended March 31, 2023: 5,277 million yen <(13.6)%> | ||||||||||||||
Three months ended March 31, 2022: 6,111 million yen < 5.2%> | ||||||||||||||
Net income | Net income per share, | |||||||||||||
per share | fully diluted | |||||||||||||
(Yen) | (Yen) | |||||||||||||
March 31, 2023 | 39.74 | - | ||||||||||||
March 31, 2022 | 46.00 | - | ||||||||||||
(2) Consolidated financial position | ||||||||||||||
(In millions of yen, with fractional amounts discarded) | ||||||||||||||
Total assets | Total net assets | Equity ratio | ||||||||||||
(Millions of yen) | (Millions of yen) | % | ||||||||||||
As of March 31, 2023 | 265,871 | 206,817 | 77.8 | |||||||||||
As of December 31, 2022 | 277,365 | 206,724 | 74.5 | |||||||||||
(Note) Owner's equity: As of March 31, 2023: 206,817 million yen. As of December 31, 2022: 206,724 million yen
2. Dividends
Dividends per share | ||||||||||||
End of 1st quarter | End of 2nd quarter | End of 3rd quarter | End of year | Total | ||||||||
(Yen) | (Yen) | (Yen) | (Yen) | (Yen) | ||||||||
December 31, 2022 | ― | 0.00 | ― | 39.00 | 39.00 | |||||||
December 31, 2023 | ― | ― | ― | ― | ― | |||||||
December 31, 2023 | ― | 0.00 | ― | 39.00 | 39.00 | |||||||
(Forecast) | ||||||||||||
(Note) Changes to the dividend forecast from the most recently announced figures: None |
3. Consolidated earnings forecasts for the year ending December 31, 2023 (From January 1, 2023 to December 31, 2023)
Net sales | Operating income | Ordinary income | Net income attributable | Net income per | |||||
to owners of parent | share | ||||||||
(Millions of yen) | % | (Millions of yen) | % | (Millions of yen) | % | (Millions of yen) | % | (Yen) | |
Annual | 374,000 | 6.2 | 35,000 | 3.5 | 33,500 | 2.1 | 21,000 | 5.3 | 157.94 |
(Note) Change to the earnings forecast from the most recently announced figures: None | |||||||||
4. Others | |||||||||
(1) Changes in significant subsidiaries (Changes in scope of consolidation): None | |||||||||
Newly consolidated: | - | Excluded: | - |
- Application of accounting procedures specific to preparation of quarterly consolidated financial statements: Yes
- Changes in accounting policies and accounting estimates
1. | Changes caused by revision of accounting standards: | None |
2. | Changes other than (3) - 1. above: | None |
3. | Changes in accounting estimates: | None |
4. | Restatements: | None |
- Number of shares outstanding (common stock)
1. Number of shares outstanding (including treasury stock)
As of March 31, 2023: 132,960,000 shares As of December 31, 2022: 132,960,000 shares
2. Number of treasury stock
As of March 31, 2023: | 1,094 shares | As of December 31, 2022: 1,094 shares |
3. Average number of common shares outstanding | ||
As of March 31, 2023: | 132,958,906 shares | As of March 31, 2022: 132,958,906 shares |
(Indication of quarterly review procedure implementation status)
This quarterly earnings report is not subject to quarterly review procedures based upon the Financial Instruments and Exchange Act.
(Forward - looking statements)
The financial forecasts and estimates in this release are based on information available at the time of disclosure and certain assumptions judged to be reasonable by the Company. Actual results may differ materially from expectations due to various factors.
The governing language of this quarterly earnings report is Japanese. An English translation hereof is provided for reference purpose only.
Contents
1. Qualitative information on financial results for the first quarter ended March 31, 2023
(1) | Qualitative information on consolidated operating results---------------------------------------- | 2 |
(2) | Qualitative information on consolidated financial position--------------------------------------- | 4 |
(3) | Qualitative information on consolidated earnings forecasts-------------------------------------- | 5 |
2. Quarterly consolidated financial statements
(1) | Quarterly consolidated balance sheets--------------------------------------------------------------- | 6 |
(2) | Quarterly consolidated statements of income and comprehensive income--------------------- | 8 |
(3) | Notes to quarterly consolidated financial statements ---------------------------------------------- | 10 |
(Notes for assumption of going concern)------------------------------------------------------------ | 10 | |
(Notes for significant changes in the amount of shareholders' equity)-------------------------- | 10 | |
(Application of accounting procedures specific to preparation of quarterly consolidated | ||
financial statements) ----------------------------------------------------------------------------------- | 10 | |
(Segment information) --------------------------------------------------------------------------------- | 10 |
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1. Qualitative Information on Financial Results for the first Quarter Ended March 31, 2023
(1) Qualitative information on consolidated operating results
In February 2022, McDonald's Holdings Company (Japan) Ltd. and its subsidiary (the "Group" or "we") announced its medium-term management plan (from 2022 to 2024) with the aim of sustainable growth, stronger profitability, and further enhancement of the corporate value of the Group. We will strengthen the foundation of the McDonald's business and actively invest in areas for the future to realize steady growth and meet the increasingly diverse and growing expectations of our customers. We will focus on the three pillars for future growth in the areas of "Brand," "Menu & Value," and "Restaurant, Digital, and People," aiming for an average annual growth rate of around 5% for all store sales, 3-5% for operating income, and 10% or more for operating income ratio and RОE over the next three years.
In the consolidated cumulative first quarter, we continued to listen to the voices of our customers and made efforts to enhance their restaurant experience through store hygiene management and improving QSC and convenience. In March, the supply of eggs was unstable due to the avian influenza epidemic in Japan, but we were able to minimize the impact as a result of our utmost efforts to procure eggs, as well as the launch of new limited-time products that do not use eggs. As a result of various menu strategies, marketing activities, and increased investment in hiring and training personnel, an increase in same-store sales was gained for 30 consecutive quarters from 2015 Q4 to 2023 Q1.
On the other hand, the business environment remained challenging due to the weak yen, soaring raw material prices, and rising energy, labor, and logistics costs. We have revised the over-the-counter prices and made utmost corporate efforts in cost management, such as procuring raw materials on a global scale and establishing a more efficient logistics network, strengthening marketing activities, currency hedging, and reducing expenses. As a result, profit decreased from the previous year, but remained roughly in line with the full-year plan.
Medium-term Management Plan>
(1) Brand
As a member of the local community, we have positioned sustainability as an essential issue to be addressed proactively and have designated "Food Quality & Sourcing," "Our Planet," "Community Connection," and "Jobs, Inclusion & Empowerment" as the four areas to be focused on. In March 2023, we published McDonald's concept and initiatives as Sustainability Report 2022 on our website.
"Food Quality & Sourcing": As a company that provides food, we prioritize ensuring "food safety" and are committed to the accurate operation of its food management system so that customers can enjoy safe meals. In addition to complying with relevant laws and regulations, we have established a strict quality control system that is compliant with the Global Food Safety Initiative (GFSI) and consists of McDonald's own standards. In addition, to enhance customer trust in our products, we are building and strengthening a thorough quality control system by disclosing information on the country of final processing and the main country of origin of major raw materials, as well as conducting audits of targeted suppliers.
"Our Planet": We use materials certified as sustainable, such as MSC (Marine Stewardship Council) and FSC (Forest Stewardship Council), recycle Happy Set toys, reduce the use of plastic materials by introducing paper straws and wooden cutlery, and reduce greenhouse gas emissions by introducing energy-saving equipment in our restaurants and electric three-wheeled bikes for delivery.
"Community Connection": We will strive to contribute to the local community through support to the Ronald McDonald House Charities Japan, sports support, education support, and the provision of safety whistles.
"Jobs, Inclusion & Empowerment": As an employer of 190,000 crew members nationwide, we are going to create a work environment in which a diverse range of people with different personalities and backgrounds, including gender, age, and nationality, can leverage their strengths and feel
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motivated to work.
In the consolidated cumulative first quarter, in addition to continued brand communication through TV commercials, websites, and social media, we have further enhanced the store experience through QSC improvements, which has further increased customers' favorable impression of the trust in our brand. We will continue to strengthen our ties with customers by continuing and reinforcing our current efforts.
(2) "Menu and Value"
To meet our customers' expectations, we have strengthened our menu lineup for each time zone and implemented various initiatives to provide customers with a sense of value for their money which is in line with the "value-for-money" strategy. As for limited-time products, we launched "Teritama," a popular springtime tradition, as well as "Asian Burgers" and "Spicy Chicken McNuggets Black Pepper Garlic," which were well received by many customers. In addition, we have renewed the name of our weekday lunchtime special set menus, the more familiar "Hiru-Mac," while maintaining the best price. We continue to offer the "Choi-Mac" series, in which customers can easily choose from a variety of products to provide products that let customers experience McDonald's value through "Deliciousness," "Value," and "Convenience."
(3) "Restaurant, Digital and People"
Restaurant development: For future growth, we will actively invest in new restaurant openings, including relocations, reimages, and rebuilds to evolve our store portfolio to better meet the needs of our customers and local communities. We will provide a more convenient and comfortable environment for our customers by increasing the manufacturing capacity of our kitchens, adding drive-through lanes, and optimizing our delivery services.
In the cumulative first quarter of the current consolidated accounting period, we opened 7 and closed 14 restaurants, and the total number of restaurants at the end of this fiscal year is 2,960. With regards to capacity expansion, we are gradually introducing kitchen systems with enhanced manufacturing capacity and stores with increased product delivery outlets. In order to effectively utilize management resources, we will continue to invest in improving customer satisfaction and business performance by flexibly allocating investments to new store openings, reimages and rebuilds.
Previous | Newly | Classification change | Current | |||
Classification | Closed | reporting | ||||
year-end | opened | Increase | Decrease | |||
period | ||||||
Company-operated | 859 | 4 | (4) | 2 | - | 861 |
Franchised | 2,108 | 3 | (10) | - | (2) | 2,099 |
Total | 2,967 | 7 | (14) | 2 | (2) | 2,960 |
Digital: We have introduced "Mobile Order & Pay" as one of our "Experience of the future" to provide better services through the fusion of digital and people. By integrating our mobile ordering and delivery apps into our official app, we aim to provide our customers with seamless service and further convenience to continue to meet their needs and increase the number of users.
Delivery is a marketable area with great potential for growth moving forward. We offer delivery services through McDelivery Service (MDS) by McDonald's crew and external delivery partners such as UberEats, Demaecan, and others. As of March 2023, MDS is available in 970 restaurants, UberEats in 1,915, Demaecan in 1,933, making the total number of restaurants that offer delivery service to 2,198. We will continue to expand the number of stores that can offer delivery services to improve customer convenience.
With drive-thru, we are increasing its capacity and introducing "Park & Go" to even more restaurants, allowing customers to receive items at their parking spot using "Mobile Order & Pay," which is available at 1,115 restaurants as of March 2023. In addition, the "Drive-Thru Mobile Order" function, which enables drive-thru pickup, has been added to the mobile ordering function of the official McDonald's app, and is now available at drive-thru restaurants nationwide (excluding
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McDonald's Holdings Co (Japan) Ltd. published this content on 12 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2023 06:12:12 UTC.