TOSHO

Medium-term Management Plan

Wellness Life TOSHO(FY3/2011 ～ FY3/2015)

October 14, 2010

Code: 8920

President Toshihiro Kutsuna
P1

TOSHO

Medium-term Management Plan Overview Wellness Life TOSHO
Become a company to respond to changing times

1. Market situation
population
・Aging society withTotala fallingbirthrate
2000(pct.)
2010
change (pct.)
2015
change (pct.)0～14years old

15～64years old

Over 65 years old

126.93 million people

18.51 million people（14.6%）

86.38 million people（68.0%)

22.04 million people（17.4%）

127.43 million people

16.94 million people

81.23 million people

29.26 million people+500 thousand people-1.57 million people (13.3%) -5.15 million people (63.7%) +7.22 million people (23.0%)

126.27 million people

16.22 million people+1.16 million people-720 thousand people(12.8%)

77.28 million people-3.95 million people (61.2%) +3.51 million people (26.0%)

・Demand will grow even more even if the age composition changes
・Holiday Sports Club will operate with more than 100 thousand people

2. Japan’s economic trends
・Worsening economic environment will remain severe for a while
・Easier to obtain land information

3. Rapidly changing times
・Create new products and stimulate potential demand・Company that can adapt to changing times can growP2

32.77 million people

Citation data: Population Census, MIC
Elderly Population Estimates, MIC

Management Plan Highlights

TOSHO

Wellness Life TOSHOBusiness Strategy
Concentrate
Concentrate management
management resources
resourcesonon thethe Holiday
Holiday Sports
Sports ClubClub businessbusiness
Accelerate
Accelerate thethe opening
opening ofof Holiday
Holiday Sports
Sports Clubs
Clubs
Business Plan
◆ Final Fiscal Year (FY3/15) Target
・ Sales¥17.5bn

Up 65%(vs.FY3/2010)

・ Ordinary income¥4.4bnUp 110%(vs.FY3/2010)

・ Ordinary income margin

25%

Up 5 pts.

(vs.FY3/2010)

・ EPS

¥140

Up 114%(vs.FY3/2010)

・ ROE

20%

Same

(vs.FY3/2010)

・ Dividend payout ratio

20%

Up 4.7 pts.

(vs.FY3/2010)

P3

Business Plan （Sales）

TOSHO

Wellness Life TOSHOSales (Million yen)
20,000

Leasing businessCorporate
17,500mn

Hotel businessSports club businessCorporate
15,650mn

Corporate
10,815mn

Corporate
10,596mn

690
74clubs+8clubs
66 clubs+8clubs+8clubs+5clubs+8clubs

692

700

736

1,395

1,395

1,400

1,560

1,400
730

Corporate
12,159mn

10,000780

Corporate
13,900mn

15,0001,420

58clubs

50clubs

15,30042clubs

13,52037clubs

11,815
10,072

5,000

8,300

8,715

FY3/10FY3/11

0
FY3/12

FY3/13

P4

FY3/14

FY3/15

Business Plan (Ordinary Income)

TOSHO
Ordinary income (Million yen)

Ordinary income margin ・ ROE （％）

5 ,0 0 0

Ordinary income

Wellness Life TOSHO

Ordinary income margin

25.1％

ROE

2 5 .0

4,400

4 ,5 0 0

Ordinary
incomemargin22.9％

4 ,0 0 0

3,590

21.6％
3 ,5 0 0

20.6％
20.3％

3,000

3 ,0 0 0

2 0 .0

20.0％

2,500
2 ,5 0 0

2,200

18.8％
18.2％

2 ,0 0 0

17.5％

17.5％
ＲＯＥ

1 ,5 0 0

1 ,0 0 0

1 5 .0FY3 / 1 1

FY3 / 1 2

FY3 / 1 3P5

FY3 / 1 4

FY3 / 1 5

Ordinary Income Margin by Business

TOSHO

Wellness Life TOSHO Hotel business、Leasing business・ Improve efficiency by maintaining the current scale of operations
・ Profit margin improves every year as a result of reduced depreciation
 Sports Club business・ Increase in the number of sports clubs raises development costs but maintains high profits
・ The pct. of new business model sports clubs will rise leading to a more profitable structure
Ordinary income margin （％）

Sports Club
50.0

Hotel
46.1

Leasing

48.9

47.9

50.4

52.2

25.5

27.3

Leasing business

41.3
40.0

Sports Club business

30.0

25.4

24.7

24.8

24.3

25.0
20.0

16.8

15.3

21.0

12.7
10.0

Hotel business

7.4

0.0
FY3/10FY3/11

FY3/12

FY3/13
P6

FY3/14

FY3/15

Balance of Loans by Business

TOSHO

Wellness Life TOSHO Sports club business・・・Demand for funds for capital investments will increase Hotel business, leasing business・・・Balance of loans will be reduced every year

Company-wide balance of loans will be reduced every year

Balance of loans(billion)

2 0 .0Sports Club business

Hotel businessLeasing business

Head office

Corporate
14.8 billion

1 5 .0
Corporate
13 billion

2.4
Leasing

1 0 .0

4.4

Hotel

1.5
3.6
1.2

1.6

Corporate
12.3 billion

Corporate
11.8 billion

1.3

1.2

2.8

2.1
0.5

0.8

Corporate
11.4 billion

1.2

Corporate
10.9 billion

1.5
0.1

1.0
1.1
0.0

8.6

8.8

FY3 / 1 4

FY3 / 1 5

Sports Club

5 .0

6.4

6.7

FY3 / 1 0

FY3 / 1 1

7.4

8.0

FY3 / 1 2

FY3 / 1 3

0 .0

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Cash Flow

TOSHO

Wellness Life TOSHO FY3/15 free cash flow 4.7 billion yen
 “Cash-creating company”, a business model that earns cash
9 Accelerate the opening of sports clubs from FY3/10 to FY3/12; free cash flow will temporarily decrease
9 “Depreciation ≒ Capital investment”

Cash management plan

(Million yen) 5,000

4,709
Ordinary income

Free Cash flow

4,035

4,000

Free Cash flow

3,210

3,053
3,000

2,318

2,292

2,335

2,415

2,714

3,207

3,774

4,580

FY3/10FY3/11

FY3/12

FY3/13

FY3/14

FY3/15

FY3/10FY3/11

FY3/12

FY3/13

FY3/14

FY3/15

Estimated depreciation

1,316（mn）

1270

1429

1671

1781

1864

Capital investment (est.)

512（mn）

1,500

2,000

2,000

2,000

2,000

New sports clubs (plan)(Partly use leasingfrom FY3/11)

2 clubs

5 clubs

8 clubs

8 clubs

8 clubs

8 clubs

2,000

1,000

0

＜ Reference ＞

P8

Shareholder Return Earnings Per Share and Dividend Payout Ratio

TOSHO

Wellness Life TOSHO Linked to profit growth
Earnings per share Dividend payout ratio of 20%
Dividend payout ratio

(Yen)

（％）
FY3/1520% over180.00

20.0%

Dividend payout ratio
150.00140.00yen
FY3/10 Result
14.9%

115.00yen

120.00EPS(earnings per share)
90.00

15.0%

96.00yen

80.00yen
65.39yen

10.0%

68.00yen

60.00
5.0%
30.00

0.0%

0.00
FY3/10FY3/11

FY3/12

FY3/13P9

FY3/14

FY3/15TOSHO

Fundamental Management Policies

Wellness Life TOSHO

BecomeBecome aa company
company thatthat can
can achieve
achieve consistentconsistent growth
growth

１．A
１．A reputation
reputation asas aa partner
partner inin leading
leading aa healthy
healthy lifelife
２．A
２．A company
company thatthat develops
develops new
new products
products
３．A
３．A provider
provider ofof services
services forfor facilities
facilities
４．Customers
４．Customers who
who areare endend users
users
５．Able５．Able toto grow
grow with
with nono procurement
procurement activities
activities oror salessales team
team
６．A
６．A highly
highly profitableprofitable company
company (ordinary(ordinary income
income ratio
ratio ofof 30%)
30%)
７．Business７．Business activities
activities based
based onon cashcash
８．A
８．A smallsmall workforce
workforce mademade up
up ofof highly
highly talented
talented individuals
individuals
９．Nationwide
９．Nationwide coveragecoverage
１０．Goal１０．Goal isis ordinary
ordinary income
income ofof 10
10 billion
billion yenyen (long-term(long-term vision)
vision)P10

Holiday Sports Club Business ModelTOSHOCity size More than 150 thousand people“298 regions”

Business
Businessmodel
modelforfor2,500
2,500members
members

Item

Per year

Total investment¥400 million

Sales¥210,000,000

Expenses¥136,500,000

Ordinary income¥ 73,500,000

Ordinary income
marginPct.

Wellness Life TOSHOMonthly

Description¥17,500,000

2,500 members×¥7,000 per month65％¥11,375,000

Personnel expenses, utilities cost, land lease, leases, depreciation,
selling expenses, maintenance, etc.

35％

¥6,125,000

35％

35％

City size More than 100 thousand people“421 regions”

elmooddel BusinessBusinessmodel
modelforfor2,000
2,000members
members
NNeeww m

First business model for 2,000 members in 2012
◆ Tomakomai-shi, Hokkaido ◆ Izumo-shi, Shimane
Item

Per year

Pct.

Monthly

Description¥14,000,000

2,000 members×¥7,000 per month
Personnel expenses, utilities cost, land lease, leases, depreciation,
selling expenses, maintenance, etc.

Total investment¥350 million

Sales¥168,000,000

Expenses¥117,600,00070％¥ 9,800,000

Ordinary income¥50,400,00030％¥4,200,000

Ordinary income
margin

30％

30％
P11

Holiday Sports ClubTOSHO※Position in the industry

Unique Business Model Wellness Life TOSHO
Middle-aged

Holiday Sports Club(Competitors)

City
center/in
front of thestationCountryside/roadsideChildrenBusiness model highlights

Holiday Sports Club(Competitors)

Competitive situation

Blue ocean

Red ocean

Location

Countryside/roadside

City center/in front of the station

Target age group

At least 16 years old: adults onlyChildren to adults: all age groups

Low-cost operation

Possible

Difficult

Method of opening centers

Mainly company-owned

Mainly leased buildings

Personnel expenses

Low

High

Promotion cost

Low

High

Merchandise sales

None

Yes

Swimming school for children

None

Yes

P12

TOSHO

Holiday Sports Club Business Strategy
Open
Open inin local
local cities
citiesWellness Life TOSHO・Hakodate・Asahikawa
・Sapporo-Kiyota(to be opened in Nov. 2010)

・Sapporo-Higashi

No. of clubs at the endof March 2010

Target locations: More than 100 thousand people(to be opened in 2012)

・Tomakomai (to be opened in 2012)

・Niigata-Bentenbashi
・Niigata-Akamichi・Nagaoka (to be“421 regions”

37 clubs

opened in Feb. 2011)

・Toyama・Takaoka・Hirosaki・Kanazawa・Oita

Akita (to be opened in Dec. 2010)

・FukuiNo. of clubs at the endof March 2015

Target: 74 clubs

・Yahata-Nishi
・FukuokaUmebayashi
・Onojyo・Omuta・Utsunomiya
・Izumo(to be opened in 2012)

・Maebashi・Isezaki・Takasaki・Ota (to be opened in

・

・Saga

Fukuyama(final year of the mid-term plan)
・Kumamoto-kita
・KumamotoNagamine

Mar. 2011)

・Nagano・Matsumoto
Kofu

・Yokkaichi・Suzuka

No. of clubs at the endof March 2018

・Nara
・Matsuyama

Target: 100 clubs

・Izumi-Otsu

P13・Mikawa-Anjo
・Numazu・Kariya-Chiryu
・Hamamatsu・Ichinomiya
・Toyohashi
・Toyoda・Nagoya-Narumi (to be opened inJan. 2011)

TOSHO

Targets of Holiday Sports Club

Wellness Life TOSHOVery much

Target of general sports clubs

Athletic
competition
Peoplewho enjoy
sportsEnjoymentof sports

People interested in
sports (and in getting
healthy)
People with little interest in
sports (high risk of lifestylediseases)

Target untappedsources of demand

People with no interest in
sports (or in getting healthy)
Not at all
70% to 80% of members had neverjoined a sports club before.
P14

TOSHO

Holiday Sports Club Business Strategy

Wellness Life TOSHOA
A new
new type
type ofof sports
sports club
club centeredcentered onon thethe theme
theme ofof“healthy“healthy living
living forfor adults”
adults”

Comprehensive
Comprehensive sports
sports club
club

Membership
Membership only
only forfor adults
adults◆ Gymnasium, exercise studio, swimming pool

◆ At least 16 years old

For beginners◆ Welcome people starting an
exercise program for the first timeFree-parking
Free-parking

Enhanced
Enhanced relaxation
relaxation services
services◆ Open-air bath, large indoor tub, sauna,◆ Large parking area with spacemassage equipment

for 200 vehicles
P15

TOSHO

Holiday Sports Club Business Strategy

Wellness Life TOSHONewNew productproduct development
development
Beauty Queen
Tahitian Style

Beauty Queen

Boxing King
Autumn Menu

Boxing King

autumnautumnTarget ABS3
ExtremeTarget ABS3

autumn

New program for 2010

For women

Simple movement

Charged programs
Swimming Lesson

Abdominal
musclestrengthening
Crawl stroke･Breast stroke

P16

Dedicated
staff

My Training

Holiday Sports Club Business Strategy

TOSHO

Wellness Life TOSHO“Easy-to-use training machines” and “easy-to-participate studio programs” for “beginners”

One of the best sports clubs within the prefecture with varied
selection of machines
Machines are easy to use”

You can enjoy various programs in a spacious studio that
can hold over 120 people.
Examples of programs

J-Pop Dance★★

Step 30★★

Rakuraku Aero★★

Beauty Queen★★

Shape The Boxing

★★★

Zumba

★★★★

Target ABS★★★★

Boxing King

★★★★★

30

Rakuraku Aero

★

Step

P17

Slow Yoga

Slow Yoga

Machine with TV★

Shape The Boxing

Joba

Bikes

Balance Ball

J-Pop Dance

Running machines

ExercisevolumeBalance Ball

Name of programs

Holiday Sports Club Business Strategy

TOSHO

Wellness Life TOSHO“Relaxation facilities that will relieve the weariness” and “a swimming pool to swim
at a slow pace” for “adults”

In the swimming pool, you can enjoy aqua dance and aquawalking to the music as well as swimming!

Walking

Provides sauna and cold-water bath which are good for health”
It is worthwhile to just have a bath.

Sauna with TV

Locker room

Powder room

Washing place with a partition

Jacuzzi

Reflexology tiles

Massage
Introduced the very best massage
equipment that will reduce stiffness
and relieve the weariness!

Handrai

Swimming lesson

P18

Holiday Sports Club Business Strategy

TOSHO

Wellness Life TOSHO

Admission and fees
Please note that the type of member, etc. may differ from other Holiday Sports Clubs.
Type of member

Upper part: Admissionfee (tax excluded)
Lower part: 〃(tax included)¥ 8,000（¥8,400）¥10,000（¥10,500）

Mon.～Thurs.･Sat.10am～12pm
Sun.･Holiday 10am～7pm

Members can use all facilities
and programs for free any
time during opening hours.

¥ 7,000（¥7,350）¥ 5,700

Daytime member

Mon.～Thurs.･Sat.10am～5pm(Sun.･Holiday excluded)（¥5,985）¥ 4,700

Night timememberMon.～Thurs.･Sat. 9pm～12pm(Sun.･Holiday excluded)（¥4,935）¥ 4,700

WeekendmemberCorporate member

Description（¥8,925）

Pair member(a group of 2)

Type of member

Utility time

¥ 8,500

Master memberGroup member(a group of 3 to 5)

Upper part: Monthly
fee (tax excluded)
Lower part: 〃 (taxincluded)

Sat.10am～12pm
Sun.･Holiday 10am～7pm（¥4,935）

Upper part:
Admission fee(tax excluded)
Lower part: 〃(tax included)

Upper part: Monthly
fee (tax excluded)
Lower part: 〃 (taxincluded)¥10,000¥10,000（¥10,500）（¥10,500）

Members can use all facilities
and programs for free within
the utility period.

Utility time

Description

Members can use all facilities
and programs for free any
time
during opening hours.
キャンペーン期間中は料金に変更がある場合があります。

Mon.～Thurs.･Sat.10am～12pm
Sun.･Holiday 10am～7pm*Corporate member is a company or an organization with corporate status. At least one person can join the club.
*A membership card will be issued to each corporate member. Or, members can choose to receive 10 tickets every month.

P19

Company Profile

TOSHO

Trade name

Wellness Life TOSHOTOSHO Co., Ltd.
◆ Sports Club business
Holiday Sport Club
◆ Hotel business
ＡＢ Hotel◆ Leasing business“A City” Apartments

Representative

Toshihiro Kutsuna

Head office

1-16-5 Mikawa-anjomachi, Anjo-shi, Aichi Pref.

Stock code
Listing
Business category

８９２０
JASDAQ Stock Exchange
Service sector

EstablishedMarch 1979 （fiscal year ends March 31）

Capital497,914 thousand yen

Employees

163 （ as of September 30, 2010）

Shares outstanding

17,592,351 shares

Shareholders

3,925 （as of March 2010）

１unit

100 shares
P20

HistoryTOSHOMarch 1979
December 1986
August 1989

December 1989

Wellness Life TOSHO

Towa Construction Co., Ltd. established as a civil engineering construction company
Established Shofuku Real Estate Co., Ltd. to conduct a condominium sales and leasing apartments(predecessor of “A･City”)
Started with management of condominium businessStarted with operations of golf driving ranges
Opened the first “Holiday Golf Garden”

March 1995

Consigned construction for leasing apartment house

May 1996

Started the sports club operation
Opened the first club: Holiday Sports Club Mikawa-Anjo

May 1997

Started taking orders for the construction of 2x4 houses(Terminated this business in March 2002)

April 1999

Changed company name to “Tosho Co., Ltd.”
Constructed “Tosho Building” near Mikawa-Anjo Station to serve as the company’s head officeNovember 1999

Started the hotel operation
Opened the first hotel, the current “AB Hotel Mikawa-Anjo Honkan”

January 2003

Planned and sold the first ultra-high-rise condominium in the Mikawa region with a seismic isolation forprotection against earthquakes

February 2004

Listed on the JASDAQ market

April 2004

Full-scale launch of the A City series of company-owned leasing condominiums

October 2006

Reclassified the company’s industry for business activities from “real estate” to “services”

March 2010(present)“Holiday Sports Clubs” – 37 clubs“Holiday Golf Gardens” – 2 clubs“AB Hotels” – 5 clubs“A City apartments” – 48 buildings, 1,988 units
P21

TOSHO

Precaution concerning forward-looking statements

Wellness Life TOSHOThis presentation contains plans, outlooks, strategies and other information associated with expectations for future
results of operations. This information is based on the judgments of management in accordance with information thatis currently available.
Actual results of operations may differ from these forward-looking statements for a number of reasons.

＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊For more information
1-16-5 Mikawaanjo-cho, Anjo-shi, Aichi Prefecture, 446-0056
Investor Relations Department, Tosho Co., Ltd. (Kariyazono)
ＴＥＬ ０５６６－７９－３１１１
ＦＡＸ ０５６６－７９－３１１０
Ｍａｉｌ： y-kari@to-sho.net
Website： http://www.to-sho.net/

Thank you for your interest in Tosho.
Everyone at our organization has a strong commitment to achieving our goals.

P22