Nitori Holdings Co., Ltd.
Financial Results Presentation
for the Second Q
Quarter of FY2017

27 September 2017
【DISCLAIMER】
IN-HOUSE TRANSLATION

TSE1st.&Sapporo Code : 9843

Overview of Consolidated Financial Results（Billions of Yen）

1H FY2017

1H FY201621 Feb-20 Aug 2017
(to sales)

21 Feb-20 Aug 2016
(to sales)

Net sales

283.9－254.7

GGrossprofitfi

152 8
152.8

53.8%

139.5
1395 54.8% 13
13.3
3 109.6％ 151.0
151 0

SG&A expenses

104 7
104.7

36 9%
36.9%

35 5% 14
115 9％ 102.5
90.3
903 35.5%
14.44 115.9％
102 5Operating income

48 1
48.1

17 0%
17.0%

19 3% (1.0)
49.1
49
1 19.3%
(1 0)

97 9％
97.9％

48 5
48.5

Ordinary income

48 6
48.6

17.1%

49.8
498 19.6% (1.2)
(1 2)

97.6％

49 0
49.0

Profitattributable toowners of parent

35 0
35.0

12 3%
12.3%

12 9%
32.8
328 12.9%

106 7％
2.2
22 106.7％

33 0
33.0

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布－ChangegPlan(YOY)29.2 111.5％ 282.02

Consolidated Balance Sheets（Billions of Yen）
20 Aug2017Current assets

20 Feb2017

Major factors
on changes

Change

153.6

170.1

(16.5)(Cash and deposits)

58.3

70.5

(12.2)(Inventory)

42.0

48.9

(6.9)

357.8

317.6

40.2

(Property plant and equipment)(Property,264 5
264.5

248 0
248.0

16 5
16.5

La d ＋16.0
Land＋16 0(Investments and other assets)

79.1

55.8

23.3

Investment securities +23.3

511 4
511.4

487 8
487.8

23 6
23.6

72.5

75.7

(3.2)

(Accounts payable - trade)

15.6

16.0

(0.4)

(Short-term loans payable)

-0.6

(0.6)

Non-Current liabilities

17.2

17.3

(0.1)

((Long-termlloanspayable)
bl )

---

Total liabilities

89.7

93.0

(3.3)

Total net assets

421.6
6

394.7
39

26.9
69

Total liabilities and net assets

511.4

487.8

23.6

Non-Current assets

Total assets
Current liabilities

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

Accounts payable - other (4.4)

Repayment

Net income +35.0

3

Consolidated Cash Flows（Billions of Yen）

1H
FY2017
Operatingactivities
Investingactivities
Financing
activities

1H
FY2016

ChangeMajor factors
on changes

49.4 ((10.8))

・Income before
income taxes
・Income
Income tataxes
es paid(44.1) (21.9) (22.2)

・Purchase ofproperty,plant andequipment
・Purchase ofinvestment
securities

38.6

(4.8)

(4.9)

Net increase in cash &cash equivalents(10.6)

21.5 (32.1)

CashC
h & cashh equivalents
i lat end of the year

55.3

58.3

0.1 ・Cash dividends paid

+51.6
(15 0)(15.0)(24 4)(24.4)(23.3)
(5.1)

(3.0)

.

Free cash flow

(5.5)

Copyright 2017 Nitori Holdings All Rights Reserved27.5 (33.0)■不許複製印刷配布（CF from Operating activities（+CF from Investing activities）

4

Trend in YOY changes
in comparable stores 【1H】（％）

【Sales , YOY】

※Sales = Sales based on orders

115

105

108 2
108.2

106.0

110

102.8

99.6

100

102.3

9590（％）【No. of Customers・Average Spend per Customer , YOY】
No. of Customers

115
110
105
10095

Average spent per customer

107.7

105.5
101.5

102.3
100 5
100.5

100 5
100.5

98.1

100 5
100.5

104.3
98.1

90

1H FY2013

1H FY2014

1H FY2015

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

1H FY2016

1H FY20175Spring & Summer seasonal products

N-CoolExceeded last yearʼs
volume byy adjustingjg
the product stocklevel depending
pg on
the temperature

SeasonallS
coordination
Achieved strong
sales
lththroughhcoordination thatmeett theth fashionf hi
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6

DAY Value

Expanding thej yof
enjoyment
color coordination
through thedevelopment ofstackable colorfulstackable,tablewares andstorage
tsuppliesli

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

7Multifunctional sofa
Couch sofa bed
Multifunctional
sofa such as couchsofa bed with highstorage capacity
and living sofa bed
with N-Sleep
mattress thatprovidecomfortable sleep
and seating haverecorded strongsales

Living sofa bed

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

8

Consolidated Sales
Net sales（Billions of Yen）

283.9 (111.5%）
254 7
254.7

【Net sales】

AmountStore sales(Global)¥258.3bil. 110.4%

E-commerce

YOY¥14.4bil. 130.1%

B to B¥1.8bil. 114.4%

Renovation sales¥2.7¥2 7bil.
bil 100.8
100 8%Rent income¥3.4bil. 113.5%

Others

¥3.0bil. 139.1%

Total¥283.9bil. 111.5%

Sales comp. by region

1H FY2016

1H FY2017

Copyright 2017 Nitori Holdings All Rights Reserved

Hokkaido

4.8％ △0.2pt Kinki

Tohoku5.6％ △0.5pt &Shikoku

Chugoku

7.5％ △0.4pt

Kanto

31.2％ +1.3pt Okinawa

Kyusyu&8.8％ △0.5pt

Hokuriku&Koshin
etsu

5.4％ △0.3pt EC

5.1％ +0.8pt

Chubu&
Tokai

10.2％ △0.3pt Others

6.2％ +0.4pt

Eastern

47.2% +0.3pt Western

41.5% △1.5pt■不許複製印刷配布

15.2％ △0.3pt

9Gross profit ・ SG&A expenses（Billions of Yen）

【Gross profit】

152.8（109.6%）

139.5

1H FY2016

1H FY2017【Gross profit margin】
54.8%【SG&A】

Amount

YOY

Ratio toChange
sales

Personnel¥30.8bil. 110.2%

10.9% △0.1pt

Rents¥16.3bil. 120.8%

5.8% +0.4pt

Deliverycharge¥13.5bil. 112.2%

4.8% ＋0.0pt

Advertising¥7.4bil. 114.4%

2.6% +0.1Pt

Outsourcing¥6.6bil. 128.8%

2.4% +0.3Pt

Depreciation¥5.3bil.

Capitalinvestment¥24.8bil.

COGSreduction+1.0pt

53.8% （△1.0pt）△1.1pt
FX impact
applied to thepurchase△0.9pt09
FX impact
appliedppto theinventory

1H FY2016
Copyright 2017 Nitori Holdings All Rights Reserved

1H FY2017■不許複製印刷配布

10

FX impact applied to the purchase【Trend in average exchange rate】(by quarter)

FY2017
0FY2016
0 6（yen/dollars）

114.79109.68108 21108.21GPM△1.7ptGPM+2.4pt( l )(plan)

105.31102 69102.69103.93GPM△0.4pt

Q1GPM+4.7pt(plan)

101.90101 90(Contract Rate)

Q2

Q399.53(Contract Rate)

Q4

Q1

1H

Q1 – Q3

Fiscal year

FY2017¥108.21/$¥106.88/$

Lower 105yen range

Higher 103yen range

FY2016¥102.69/$¥103.26/$¥105.59/$¥108.12/$

FX impact on GPM△1.7pt△1.1pt+0.1pt+1.4ptCopyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

11No. of stores as of 20 Aug 2017

４９４Stores(+２３)

３８５(+12)７（+3）

DECO HOME

５６(+５)(Taiwan)２７（±０）(USA)

５(China)

１４（+３）

Prefecture

No. ofstores

Prefecture

No. ofstores

Prefecture

No. ofstores

Hokkaido

20 (±0)

Yamanashi

3

Shimane2

H kk id
Hokkaido

20 (±0)

I hik
Ishikawa

5HiHiroshimahi

12Aomori

6 (±0)

Toyama4

Yamaguchi

5Akita

4

Fukui

2

Kagawa4Iwate3

Hokuriku & Koshinetsu

31Tokushima

2

Yamagata

4

Shizuoka

12 (+1)

Kochi

3

y g
Miyagi

7Aichi

24Ehime6

Fukushima

5Mie

7

Chugoku & Shikoku

42Tohoku

29 (±0)Gifu

8 (+1)

Fukuoka

TTokyok45 (+7)

ChChubu
b &T
Tokai
k i

51 (+2)

OitOita5

Kanagawa

24 (+1)Osaka

30 (+2)Miyazaki

3

Saitama

28 (+4)

Kyoto

11SagaChiba

21Nara5

Nagasaki

3Gunma6Hyogo23 (+1)

Kumamoto

6 (+1)

gTochigi

７ (-1)( )Shigag7Kagoshimag

7 (+1)()

Ibaraki13

Wakayama

5Okinawa

4

Kanto

144(+11) Kinki

81 (+3)

Niigataii

8Tottorii

2Nagano9Okayama

6

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

19 (+1)

3 (+1)

Kyushu & Okinawa

50 (+4)Japan

448(+20)12

Opening store at central Tokyo
Shibuya Koen-Dori store opened 30 th June

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

13

Opening store at central Tokyo
Creating a sales floor that takes
advantage of having a “real store”.

Copyright 2017 Nitori Holdings All Rights Reserved

Usage of advanced IT■不許複製印刷配布

14

Opening store in China
Shanghai 3 rd store
Opening on July 11th
Spreading through SNS
SNS, the store
exceeded the number of customers
recorded at Nitori ShinjukuTakashimaya Times Square store
during its opening sales

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

15

Major indicators of management efficiency（1）Sco Numpe ber︵Group︶
Six monthsIndicator

unitTarget1

Return on assets％

Over 7.5％

○9.7

11.6

9.1

11.5

10.5

2

Total asset turnover

Times

Over 1.0×0.57

0.59

0.54

0.64

0.64

3

Ordinary
Odiincomeimargin％

Over 10％

○17.1

19.6

17.0

18.1

16.5

4

Earnings per share¥Over ¥50

○313.7 296.4 207.5 201.0 162.5

5

Return on equity％

Over 7.5%

○8.6

9.8

7.1

8.6

8.2

6

E it ratio
Equityti％

OOver60％

○82 3
82.3

76 876.8

78 978.9

78 678.6

74 974.9

7Interest coverage

TimesOver 20○1,982 1,4769458184498

Sales growth rate％

Over 10％

○11.5

14.7

5.4

12.9

9.8

9

Ordinary income
growthth ratet％Over 10％×(2 4)(2.4)

32.0(1.1)

24.0

0.1

Ratio of gross profit to％Over 48％

○53.8

54.8

52.6

51.9

52.8

R ti off break-even
Ratio
bk％

Under 80％

○64.4

60.2

63.7

61.0

64.9

10 sales

11 point to sales

2017.8

Copyright 2017 Nitori Holdings All Rights Reserved

2016.8 2015.8 2014.8 2013.8■不許複製印刷配布

16

Major indicators of management efficiency (2)Sco Numpe berIndicatorunitTarget

2017.82016.8 2015.8 2014.8 2013.8

Sale of furniture and home furnishing

12 Sales per tsubo

K Over ¥950K○1,025

998

926
96940
90886

13 Stock turnoverTi
mesOver 9×6.4

6.3

6.1

6.8

6.8

Ti
mes

Over 2.9

○44
4.4

45
4.5

44
4.4

48
4.8

49
4.9

Ratio of profit％

Over 20％

○

31.7

35.7

31.1

33.9

31.7

Ratio of real estate cost％

Under 25％

○21.3

20.3

22.1

21.5

22.1

17 cost to gross profit

Ratio of sales promotion％

Under ６％

○

5.5

5.3

5.95.96.2

18 Labor productivity

MOver ¥10M

○19 Sales floor per labor

TsuboOver 60

×34 1
34.1

37 1
37.1

38 2
38.2

39 8
39.8

42 8
42.8

20 tsubo

KOver 150K

○159

177

135149133

21 Stock per tsubo

KUnder 90K

○75

72

7367

6130〜35

○

32.9

32.9

32.4

32.3

32.2

14

Operating assets
turnover15 distribution

16 to gross profit

Operating income perg age
g of labor
22 Average

Results （○won/×lost）
Copyright 2017 Nitori Holdings All Rights Reserved

18.28 19.70 17.98 18.90 19.31○18×4 ○19×3 ○14×8 ○17×5 ○14×8■不許複製印刷配布

17

TOPICS

Product development

Vintage and“Vintage”“Feminine” styleseries are expected
to debut in Fall2017.
2017
These styles offer
new lifestyleg realthroughtexture, highquality,qy, and highg
designCopyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

19

Product development
2017 Winter/Fall coordination series『A special space surroundedby the items you love』『A cottage-like space

The theme of “trip” wasrepresented through the usage oftrending
dimotifs
if suchh as maps anddbicycles

The theme of “nature” wasrepresented through the usage oftrending
dimotifs
if suchh as ethnicalh i lkilim patterns and animals

Copyright 2017 Nitori Holdings All Rights Reserved

surrounded by nature』■不許複製印刷配布

20

Product development
N-Warmnow on salel
By using heatabsorption materials
not just in thebatting but also on
surfacesuace materials,a e a s,this yearʼs model
provides improved
ppwarmth. In addition,
patterned stylemattress pads arebeing release thisyear
Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

21

Nitori business(B to B)
Taking advantage of its high coordinating abilities,
Nitori produced to commercial facilities such as a cafe

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

22

Omni-channel
Recepient of 3 rd Retail Promotion Award
Nitori App “Hand-free Shopping”
Providing a new style of shoppingg a seamless connection ofthroughreal stores and EC sites
zReduction of customerʼspurchased carrying
py g goods
gzWorkload reduction ofrearranging
igoodsd to sales
l floorflzSave store inventory
Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

23

Logistic measuresRecipient of “Logistics rationalization
effort award” at the 2017 National
Logistics Improvement Awardceremony

Satte Distribution
CenterNitori was awarded for the innovative
introduction of the “Swap body container”,
which allowed the loading platforms to bedesorbed from the truck head. This system
realize efficient high rotation which lead tothe cost reduction of transportation
pandprovided positive impact in labor
environment

Expected to start its operation in 2022

Copyright 2017 Nitori Holdings All Rights Reserved

Site area : approx.
approx 105,600㎡
105 600㎡
More than doubling the warehouseproduction efficiencypy level byymechanization and automation.
■不許複製印刷配布

24

33rd Corporate Public Relations Award
Akio NITORI received
the “Corporate Public Relations Manager Award”【Reason for award】
Akio NITORI
contributed
significantly to therecognition of thecompany by directly
explaining hisbusinessperspectives,products, and history
Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

25

CSROtaru Art Village September 1st grand opening
Former Mitsui Bank Otaru Branch
open to public on August 1stNitori Art Museum Open to publicon September 1stA historic building made from steel
concrete that contributed to the guidanceof earthquake resistant construction afterqin 1923
the Great Kanto Earthquake(Former Hokkaido Takushoku Bank Ltd.
Otaru Branch)h)

Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

26

Store roll-out plan in FY 2017
StoreTaiwan

USAEnd of
Q2

３９２５６

２７Q3~Q4Net
increase＋１２＋９＋１

End ofFY2017

４０４６５２８５

１４ ４９４＋１ ＋１２ ＋３５６

ChiChina＋12USA＋1

Taiwan＋11Japan＋21

Copyright 2017 Nitori Holdings All Rights Reserved

ChinaTotal■不許複製印刷配布

２６ ５２９27

Plan in FY 2017
（Billions of Yen）

ChangeFY2017 Plan

FY2016

Net sales

568.0

512.9

Gross profit

309.0 54.4% 278.2

54.2% 30.8 111.0%

SG&A expenses

210.0 37.0% 192.5

37.5% 17.5 109.1%(to sales)－(to sales)－(YOY)

55.1 110.7%

Operatingpg
income

17 4%
99.0
99
0 17.4%85 785.7

16 7% 13.3
16.7%
115 4%
13 3 115.4%

Ordinary
income17 6%
100.01000 17.6%

87 5
87.5

17 1% 12.5
17.1%
114 2%
12 5 114.2%

12 1%
68
5 12.1%68.5

59959.9

117%
11.7%

Profit attributabletto owners off
parent2%
114.2%
86 1148.6

No change of plan
Copyright 2017 Nitori Holdings All Rights Reserved■不許複製印刷配布

28

【DISCLAIMER】
Th forecasts
Thefandd projected
jd operating
iresults
l containedi d iin thishi report are b
based
d on iinformationfi
available at the time of preparation, and thus involve inherent risks and uncertainties.
Accordingly, readers are cautioned that actual results may differ materially from thoseprojected as a result of a variety of factors.