Duskin Announces Medium-Term Management Policy.
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March 8, 2018
Duskin Co., Ltd.
Teruji Yamamura, President & CEO
(Securities code: 4665)
Tokyo Stock Exchange (First section)
Inquiries: Hideyuki Naito, Director
Phone: 06-6821-5071
Duskin Announces Medium-Term Management Policy.
As part of ONE DUSKIN, the nine-year, long-term strategy launched in FY2015, Duskin is pleased
to announce that we are about to embark on Phase II, the Medium-Term Management Policy 2018
(FY2018-FY2020.) The first phase, the Medium-Term Management Policy 2015 will conclude at the
end of FY2017.
1. Our Long-Term Strategy, ONE DUSKIN
Against the backdrop of a decreasing population, a declining birth rate and an aging society, all of
which are factors driving the structural economic slowdown in Japan’s society, the Duskin Group
developed its long-term strategy, ONE DUSKIN. The plan was created with three goals: ONLY
ONE, NUMBER ONE, and ALL FOR ONE, leveraging the network of our franchisees that are
deeply rooted in their communities. ONLY ONE means to be a unique group of companies that
creates communities where people are connected, feel safe, and live happily. NUMBER ONE
means to be the most trusted franchise business in the community by proactively anticipating
customer needs and accordingly providing solutions. With ALL FOR ONE, all business units and
services collaborate to respond to the needs of our customers. The Duskin Group has applied this
strategy to set out initiatives for developing new systems and mechanisms. These new systems and
mechanisms will be used to create products and services that satisfy customer needs.
Now as ONE DUSKIN enters its second phase as our corporate group's key instrument for
continuing to build trust with our customers, we expect to achieve sustainable growth through
implementing the strategy's three goals.
2. Summary of the Medium-Term Management Policy 2015 (FY2015-FY2017)
The end of the first phase is a three-year milestone along the path to restoring the health of our
business results and setting us back on a growth track toward ONE DUSKIN.
(1) Clean & Care Group
With the aim of evolving our direct-selling business model and strengthening our customer
contacts, we expanded the range of benefits for our DDuet website members. These new benefits
have attracted new members to DDuet. Also being developed is a concierge system centered on
1home-visit sales representatives. For commercial customers, the group enhanced its service
structure to provide a sanitary management service by training Hygiene Masters specializing in
sanitary management. These activities are laying the foundations for the next phase, in which
we will further expand the customer base to achieve yet more growth.
(2) Food Group
Mister Donut has accelerated its initiative for shop renovation with new design formats.
However, overall sales have not recovered due to the decreased number of shops resulting from
closures of underperforming locations. Mister Donut discontinued discount pricing sales and
instead implemented price revisions so that our customers can enjoy our products at more
attractive prices, any time. We have also developed new styles of shops for the brand, adapting
shop designs to better match different locations and the diverse needs of customers, and have
introduced new product categories such as light-meal menu items. These improvements have
driven higher sales per shop compared to the previous fiscal year, demonstrating that we are on
course to invigorate the Mister Donut brand. We continue to focus on execution of these
initiatives during the next fiscal year.
(3) Structural Reforms
Profitability has improved due to cost reductions in procurement, production and logistics, and
the cost ratio (consolidated basis) for the third quarter of FY2018 was 3.6 percentage points
lower than the full year results of FY2014.
(4) Business Model Development
Regarding the Clean & Care Group, we have established and implemented a system for sharing
customer information between the company and our franchisees. In the future, we will use this
system as the basis for exchanging marketing data within the Duskin Group.
(5) Strengthening Corporate Governance
Aiming for a corporate structure that promotes sustainable growth, we have worked to
strengthen corporate governance. These strengthening activities include increasing the number
of Outside Directors, creating the Outside Directors and Audit & Supervisory Board Members
Council, delegating authorities of the Board of Directors to Operating Officers to facilitate
discussion and deliberation at the Board meetings, and establishing the new Directors
Evaluation and Nomination System.
3. Medium-Term Management Policy 2018 (FY2018-FY2020)
(1) Our Three-Year Goals
We are working toward the goals of our ONE DUSKIN long-term strategy, building on the
business models of both the Direct Selling Group and the Food Group developed during the first
phase, to achieve recovery in our business performance. At the same time, we are reinforcing
2our corporate organizational structure through comprehensive reforms, to attain sustainable
growth.
(2) Financial Goals
Consolidated net sales for the fiscal year ending March 2021: ¥169 billion
Consolidated operating profit for the fiscal year ending March 2021: ¥8.2 billion
(3) Key Initiatives
1) Direct Selling Group (name changed from Clean & Care Group)
Lifestyles and workstyles are changing in Japan due both to progress involving the Internet
and to the country’s aging population. By leveraging the strengths of direct selling and home
visiting/ onsite services to interact with customers with the aim of discovering their wants
and needs, the Direct Selling Group will evolve its businesses into what we call Daily Life
Fine-Tuning Services. These services will help customers to stay organized and fine-tune the
rhythm of their daily activities at home and in their workplaces. To achieve this goal, the
Direct Selling Group was established to operate rentals of dust control products, professional
cleaning and technical services, senior-care services, rentals of assisted-living equipment,
cosmetics and health food sales, uniform rental and cleaning, and event-support services.
With this new group, we aim to reinforce closer cooperation across all business lines. The
new group will accelerate the development of products and services to meet the needs of
seniors and the child-rearing generation. For commercial customers, the group will be
targeting enhanced service capabilities to better meet the sanitary management needs. We
plan to use these initiatives to elevate customer convenience and operational efficiency.
・ Residential Market
For residential customers, the group is working on improving its service structure and the
capabilities of sales representatives who visit customers in their homes. We train our sales
representatives as concierges to take advantage of our mobile devices, making it easy for them
to proactively provide solutions tailored to each customer’s needs on site. Furthermore, our
Call Center has been transformed into a Contact Center. This change means we can both serve
our customers better by identifying their needs and creating solutions, and support our sales
representatives in the field. We will continue our endeavors to fortify our customer contacts
through the membership website, DDuet, and plan to expand its membership from the current
550,000 users.
The market for professional cleaning and technical services has been expanding, and to meet
the growing demand for these services, we are recruiting franchisees with a new franchise
package. Plans also include continuing to strengthen our service structure by developing a
web quote and payment system, and introducing new chemicals and equipment to raise work
efficiency.
3・ Commercial Market
For commercial customers, we will work alongside customers as their business partner to
provide sanitary management solutions and help them fine-tune their daily-to-day activities.
Responding to the revision of the Food Sanitation Act and other related laws, our Hygiene
Master specialists help customers implement their general sanitary management programs
and provide facility management know-how, including professional kitchen sanitation. In
addition to these services, the Direct Selling Group will provide a comprehensive range of
solutions, including a uniform service and event-support services, to help customers run
their businesses smoothly.
2) Food Group
Mister Donut
Aligning with the policy established in the first phase of the long-term strategy ONE
DUSKIN, Mister Donut will continue shop renovations to provide a comfortable ambience,
and open and relocate shops in line with customer traffic flow. To motivate customers to
visit shops more frequently, Mister Donut continues to develop “MISDO Meets” products
jointly with companies and a pastry chef that use leading techniques and high-quality
ingredients. Mister Donut is also pursuing greater customer convenience to attain higher
shop sales. One tactic is increasing the appeal of MISDO GOHAN menu items to enjoy at
different times of the day, including breakfast and lunch. Another is focusing on the
development of new donuts that can generate steady sales and on the improvement of
existing products to enhance brand value. Our goal is to make our brand slogan "Something
good’s gonna happen. Mister Donut." a reality by creating a “Mister Donut” experience
that customers of all ages can enjoy at any time of day and truly delight in “happy times.”
Food Business Development
With the goal of establishing the next generation of core businesses, the Food Group is
examining the potential of our existing businesses (Katsu & Katsu, Bakery Factory, The
Chiffon & Spoon, Pie Face) for franchise development.
3) New Business Strategy
As well as forging conventional business alliances and M&A deals, we will stimulate new
business development by promoting collaboration with venture companies, educational
research institutes, and the public sector.
4) Overseas Business Strategy
In the growing Asian markets where we operate our donut shops and dust control businesses,
we are tailoring our franchise business package to meet the needs of each region.
5) Structural Reform
As Japan's working population shrinks, we are responding by offering employees more
4options to pursue satisfying career paths and adapting to individual work styles at each stage
of life. For greater diversity in our workforce, we continue with initiatives to hire non-
Japanese nationals, people with disabilities and retirees. Other activities underway are
improving the program that helps our employees become franchise owners, and boosting the
operational efficiency of our corporate departments through adoption of AI (Artificial
Intelligence) to reduce administrative expenses. Taking these actions will upgrade our
corporate functions and reallocate human resources to the Duskin Group's growing businesses.
To smoothly implement Medium-Term Management Policy 2018 from FY2018, Duskin will
introduce the Operating Officer System with the goal of further enhancing the Board of Directors'
decision-making and oversight functions, and delegating authority to speed up business operations.
For media inquiries regarding these matters, please contact:
Public Relations, Duskin Co., Ltd. Tel. 06-6821-5006
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