COMPANY RESEARCH AND ANALYSIS REPORT

MonotaRO Co., Ltd.
3064
Tokyo Stock Exchange First Section

8-Apr.-2019
FISCO Ltd. Analyst

Hideo Kakuta

FISCO Ltd.
http://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.
3064 Tokyo Stock Exchange First Section

8-Apr.-2019https://www.monotaro.com/main/ir/english/■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. FY12/18 non-consolidated results ..............................................................................................................

01

2. Consolidated outlook for FY12/19 ........ ......................................................................................................

02

3. Kasama DC shipping capacity being doubled to cope with business expansion.........................................

02■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 03• Review of FY12/19 results (non-consolidated). ............................................................................................

03■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 05• Consolidated outlook for FY12/19......... ......................................................................................................

05■Topics------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 06
1. Kasama DC shipping capacity being doubled to cope with business expansion.
Utilization of projection mapping in picking stations ...................................................................................

06

2. Expand the number of items handled to 18 million. Expand long-tail products. ..........................................

07

3. Opening offices in Osaka and Tokyo and promoting reinforcement of organization using data.. .................

08■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 09

We encourage readers to review our complete legal statement on “Disclaimer” page.

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.
3064 Tokyo Stock Exchange First Section

8-Apr.-2019https://www.monotaro.com/main/ir/english/██Summary
FY12/18 sales reached ¥100bn
FY12/19 sales and earnings both expected to grow approx. 20%
Progress on construction to double shipping capacity of the Kasama
DC
MonotaRO Co., Ltd. <3064> (hereafter, also “the Company”) is headquartered in Amagasaki, Hyogo Prefecture. The
Company conducts online direct marketing of maintenance, repair, and operating (MRO) products* for production
plants and construction work and automobile upkeep through the Internet.
*	Maintenance, repair and operating (MRO) products refer to products used in the manufacturing process such as abrasives,
drills, and work gloves, which are for internal use by companies and not for resale. The nature of such materials is highly
individual for each industry.

A key characteristic of the Company’s business model is that it sells MRO products at a single price. This policy has
won the Company strong support from small to mid-size customers, who are usually forced to accept unfair prices
from sellers in a conventional market. In this way the Company has established a solid position as a unique online
direct marketing operator in a niche market.. The Company handles more than 17 million items for a customer baseof 3,363,000 accounts (as of December 31, 2018) and sells about 524,000 items with same-day shipment (including
roughly 411,000 items for which the Company has its own inventories).
1. FY12/18 non-consolidated results
The Company sustained robust growth in non-consolidated sales and earnings through FY12/18 with ¥105,331mn
in sales (up 24.4% YoY), breaking through ¥100,000mn for the first time, and ¥14,278mn in operating income (up17.3%), ¥14,250mn in ordinary income (up 17.0%), and ¥9,825mn in net income (up 12.9%). Both sales and profits
sustained growth momentum. Sales rose substantially YoY due to healthy trends in new customer acquisitions andrising sales at existing customers. The Company boosted new customer acquisitions on successes with various
measures, such as reinforcement of listing advertisements, search engine optimization (SEO), airing a new-version
TV commercial, and broadening product scope (to over 17 million items). Sales to existing customers grew at ahealthy pace as the effect from measures to enhance usage frequency expanded and continued. Furthermore, thepurchase management system (business with large corporations) also performed favorable (up 54% YoY). Grossmargin dropped 1.4 pp YoY. The main components of this were an increase in delivery cost rate due to priceincreases, changes in the product mix, an increase in business with large corporations, and a decrease in the grossmargin due to a fall in overseas royalties. Meanwhile, the SG&A expense ratio decreased by 0.6 pp YoY, mainlyreflecting the effect of increased sales and a decrease in costs associated with the start of operations at the Kasama
Distribution Center (“DC”) recorded in the previous year. As a result, operating income increased 17.3% YoY andthe operating margin dropped by 0.8 pp.

We encourage readers to review our complete legal statement on “Disclaimer” page.

01 09

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.
3064 Tokyo Stock Exchange First Section

8-Apr.-2019https://www.monotaro.com/main/ir/english/

Summary

2. Consolidated outlook for FY12/19
The Company’s FY12/19 consolidated targets are ¥136,258mn in net sales (up 24.4% YoY), ¥16,536mn in operating
income (up19.9%), ¥16,530mn in ordinary income (up19.9%), and ¥11,715mn in net income attributable to ownersof the parent (up 23.1%). This outlook expects continuation of strong growth in sales and profits with approximately
20% increase. If it can achieve these targets, the Company will realize 18 consecutive periods of sales growth and
10 of earnings growth. The Company’s core strategies for increasing sales are to expand new customer acquisitions,
expand sales to existing customers, and promote the purchase management system business (business with large
corporations). Net sales growth of 24.4% is in line with the level of growth in the previous year. For new customer
acquisitions, the Company will make further use of marketing data with the aim of acquiring 721,000 new accounts(625,000 new accounts in the previous year). The purchase management system business (business with large
corporations) is also expected to achieve a high rate of growth in FY12/19. The Company will increase its corporate
sales members and strengthen its organization and systems, including the opening of a sales office in the Chubu
region. The gross profit margin is forecasted at 28.7% (down 0.5 pp YoY). On the other hand, the SG&A expenses
ratio is expected to decline by 0.1 pp YoY. As a result, operating income is forecasted to increase 19.9% YoY, withthe ratio to sales at 12.1% (down 0.5 pp). Both sales and earnings have been growing at around 20%, indicating
an extremely strong business model. Ceaseless refinement of distribution, systems, and marketing to evolve thebusiness model further also enhances the reliability of the earnings forecast.
3. Kasama DC shipping capacity being doubled to cope with business expansion
Under the Company’s business model, “quick, timely” delivery of various products is of key importance. On theother hand, if inventories are increased or labor is used excessively, distribution-related costs will increase. The
distribution-related cost ratio to sales is on a broad declining trend and under control. In 1H FY12/19, the rateis expected to remain at 6.1% due to the lingering impact of increases in personnel expenses and outsourcing
costs, but in 2H it is expected to drop to 5.8% as shipments increase in April following the completion of the highly
productive Kasama DC expansion. The Company is carrying out construction (second phase construction) to double
the shipping capacity of the Kasama DC, and operations are expected to begin in April following construction
completion in March 2019. Specifically, the number of auto-guided vehicle robots will increase by 114 units fromthe current 154 units, and conveyors and shipping equipment will also be increased. A further 28 picking stations
will be added to the current 16. Projection mapping technology will be applied to the picking stations to relieve theburden on workers and increase work accuracy. After the expansion is complete, the scale of sales that can behandled at the east and west DCs will be around ¥160bn.
Key Points
Double digit growth in sales and earnings continued in FY12/18. Sales reached ¥100bn. Brisk performance in
new customer acquisitions, existing customer orders, and business with large corporations• Sales and earnings expected to grow rapidly at around 20% in FY12/19. Further refinement of a strong businessmodel expected to yield an 18th consecutive year of sales growth and a 10th consecutive year of earnings
growth• Construction work to double the shipping capacity of the Kasama DC is progressing. Strengthen marketing
capability based on data science•

We encourage readers to review our complete legal statement on “Disclaimer” page.

02 09

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.
3064 Tokyo Stock Exchange First Section

8-Apr.-2019https://www.monotaro.com/main/ir/english/

Summary㼀㼞㼑㼚㼐㼟㻌㼕㼚㻌㼟㼍㼘㼑㼟㻌 㼍 㼚㼐㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑（¥㼙㼚㻕㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕（¥㼙㼚㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼞㼕㼓㼔㼠㻕㻝㻡㻜㻘㻜㻜㻜

㻝㻢㻘㻡㻟㻢

㻝㻤㻘㻜㻜㻜

㻝㻟㻘㻣㻥㻜
㻝㻝㻘㻤㻟㻣
㻝㻜㻜㻘㻜㻜㻜

㻝㻞㻘㻜㻜㻜㻥㻘㻠㻥㻟㻣㻘㻜㻤㻣㻡㻜㻘㻜㻜㻜

㻝㻟㻢㻘㻞㻡㻤
㻝㻜㻥㻘㻡㻡㻟

㻠㻘㻟㻞㻟㻠㻠㻘㻥㻟㻣

㻢㻘㻜㻜㻜㻤㻤㻘㻟㻠㻣
㻡㻣㻘㻡㻢㻟

㻢㻥㻘㻢㻠㻣

㻜㻜㻲㼅㻝㻞㻛㻝㻠

㻲㼅㻝㻞㻛㻝㻡

㻲㼅㻝㻞㻛㻝㻢

㻲㼅㻝㻞㻛㻝㻣

㻲㼅㻝㻞㻛㻝㻤

㻲㼅㻝㻞㻛㻝㻥㻌㻱

Source: Prepared by FISCO from the Company’s financial results██Results trends
Double digit growth in sales and earnings continued in FY12/18.
Sales reached ¥100bn.
Brisk performance in new customer acquisitions, existing customer
orders, and business with large corporations• Review of FY12/19 results (non-consolidated)
The Company sustained robust growth in non-consolidated sales and earnings through FY12/18 with ¥105,331mn
in sales (up 24.4% YoY), breaking through ¥100,000mn for the first time, and ¥14,278mn in operating income (up17.3%), ¥14,250mn in ordinary income (up 17.0%), and ¥9,825mn in net income (up 12.9%). Both sales and profits
sustained growth momentum.
Sales rose substantially YoY, with steady performance in both new customer acquisitions and sales to existingcustomers. The Company boosted new customer acquisitions on successes with various measures such as
reinforcement of listing advertisements, search engine optimization (SEO), airing a new-version TV commercial,
and broadening the product scope to over 17 million items. It acquired 625,000 new accounts through FY12/18,
a new record, giving it a total of 3,363,000 accounts. Sales to existing customers grew at a healthy pace having
expanded and continued the effect of measures to increase the usage frequency implemented since March 2017.*
In addition, the purchase management system business (business with large corporations) also performed well. The
total number of partners rose to 604 companies, up 175 YoY, and the sales ratio from this business grew to 12.9%.
*	Free delivery for the month on additional orders regardless of the amount after making a single order worth ¥7,000 (taxexclusive) or more (only applies to Web-based orders).

We encourage readers to review our complete legal statement on “Disclaimer” page.

03 09

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.
3064 Tokyo Stock Exchange First Section

8-Apr.-2019https://www.monotaro.com/main/ir/english/

Results trends

Gross margin dropped 1.4 pp YoY. The main components of this were a 0.6 pp increase in the delivery cost ratio due
to a price hike, and a 0.3 pp decrease in the gross profit margin due to changes in the product mix (decline in the
gross profit margin due to expansion of new products, increase in the sales ratio of national brand products) and anincrease in business with large corporations. An additional impact was felt due to a decline in overseas royalties. The
US ZORO Business itself grew steadily, but recorded a decline in earnings as investments for system development
for continued growth took priority, resulting in lower-than-expected royalties. The SG&A expense ratio declined by
0.6 pp YoY. Despite an increase in the outsourcing cost ratio to secure staff for the Amagasaki DC and Amagasaki
Call Center, the overall cost ratio declined due to the effect of higher sales and a decline this year in costs related
to the start of operations at the Kasama DC in the previous year.
As a result of these factors, operating income increased 17.3% YoY while the operating margin declined by 0.8 pp.
Net income only expanded 12.9% YoY owing to resumption of a normal tax rate after the previous fiscal year’s tax
incentive (coverage of Kasama DC investments under the tax program promoting capital investments in productivity
improvements).
Non-consolidated income summary for FY12/18(¥mn)
FY12/17
Results

Sales

Gross profit

84,656

26,204vs. sales

100.0%

31.0%

FY12/18
Results

105,331

31,147vs. sales

YoY

100.0%

29.6%

Change factors

24.4%• Expansion of new customers (adding 625,000 accounts) withsupport from strengthened listing advertisements, improved
SEO, new TV commercials, and increase in the number ofhandled items• Measures to increase usage frequency (campaign for freedelivery fees) etc., led to increase in existing customer sales• Purchase management system business (business with large
corporations) grew, driving up sales (up 54% YoY)

18.9%

• Gross margin dropped 1.4 pp YoY• Delivery cost ratio increased 0.6 pp due to price increase, etc.
• Gross profit market declined 0.3 pp due to changes in the
product mix (decline in gross profit margin due to expansion in
new products, increase in sales ratio of national brand products)
and increase in business with large corporations.
• Impact of a decrease in overseas royalties, etc.

SG&A expenses

14,035

16.6%

16,868

16.0%

20.2%

• SG&A expense ratio declined 0.6 pp YoY• Despite an increase in the outsourcing cost ratio at the
Amagasaki DC, overall expenses ratio declined due to theimpact of higher sales and a decline this year in costs related tothe start of operations at the Kasama DC in the previous year.

Operating income

12,16814.4%

14,278

13.6%

17.3%

• Net sales ratio dropped 0.8 pp YoY

Ordinary income

12,17714.4%

14,250

13.5%

17.0%

• Net sales ratio dropped 0.9 pp YoY

Net income

8,699

10.3%

9,825

9.3%

12.9%

• Net sales ratio dropped 1.0 pp YoY due to higher tax rate

Source: Prepared by FISCO from the Company’s results briefing materials

Looking at monthly results in 2018, the Company sustained around 20% sales growth in all months, even withsevere weather changes such as heavy snow in January and typhoons, torrential rains and heat wave conditions
in July to September.

We encourage readers to review our complete legal statement on “Disclaimer” page.

04 09

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.

8-Apr.-2019

3064 Tokyo Stock Exchange First Section

https://www.monotaro.com/main/ir/english/

Results trends㻹㼛㼚㼠㼔㼘㼥㻌㼟㼍㼘㼑㼟㻲㼅㻝㻞㻛㻝㻣㻌㻔㼘㼑㼒㼠㻕㻔¥㼙㼚㻕㻲㼅㻝㻞㻛㻝㻤㻌㻔㼘㼑㼒㼠㻕㼅㼛㼅㻌㼏㼔㼍㼚㼓㼑㻌㻔㼞㼕㼓㼔㼠㻕㻝㻝㻘㻜㻜㻜

㻝㻜㻘㻞㻥㻣

㻝㻜㻘㻜㻜㻜

㻞㻝㻜㻚㻜㻑

㻥㻘㻣㻥㻢㻥㻘㻞㻠㻥 㻞㻜㻜㻚㻜㻑㻤㻘㻠㻡㻞 㻤㻘㻢㻜㻡㻝㻥㻜㻚㻜㻑㻣㻘㻤㻝㻟㻣㻘㻢㻥㻤㻣㻘㻠㻣㻤 㻣㻘㻣㻢㻝 㻣㻘㻢㻥㻟㻤㻘㻜㻜㻜㻝㻤㻜㻚㻜㻑㻣㻘㻝㻥㻤㻣㻘㻠㻤㻠㻣㻘㻟㻜㻜 㻣㻘㻝㻜㻢 㻢㻘㻣㻠㻡㻢㻘㻡㻣㻠 㻢㻘㻠㻡㻥
㻢㻘㻟㻟㻠
㻣㻘㻜㻜㻜
㻝㻣㻜㻚㻜㻑㻡㻘㻥㻜㻡㻢㻘㻜㻜㻜㻝㻢㻜㻚㻜㻑
㻥㻘㻝㻡㻝

㻥㻘㻜㻜㻜

㻤㻘㻞㻡㻝 㻤㻘㻠㻠㻝㻤㻘㻥㻢㻡 㻥㻘㻞㻞㻝㻡㻘㻜㻜㻜㻝㻡㻜㻚㻜㻑
㻝㻟㻜㻚㻣㻑

㻠㻘㻜㻜㻜
㻟㻘㻜㻜㻜

㻝㻞㻝㻚㻥㻑㻝㻞㻝㻚㻡㻑㻝㻞㻞㻚㻟㻑㻝㻞㻡㻚㻡㻑㻝㻞㻥㻚㻤㻑
㻝㻞㻞㻚㻤㻑

㻝㻟㻞㻚㻣㻑

㻝㻞㻡㻚㻟㻑

㻝㻞㻣㻚㻟㻑

㻝㻝㻡㻚㻝㻑

㻞㻘㻜㻜㻜㻝㻠㻜㻚㻜㻑
㻝㻝㻤㻚㻠㻑 㻝㻟㻜㻚㻜㻑㻝㻞㻜㻚㻜㻑

㻝㻘㻜㻜㻜㻝㻝㻜㻚㻜㻑

㻜㻝㻜㻜㻚㻜㻑
㻶㼍㼚

㻲㼑㼎

㻹㼍㼞

㻭㼜㼞

㻹㼍㼥

㻶㼡㼚

㻶㼡㼘

㻭㼡㼓

㻿㼑㼜

㻻㼏㼠

㻺㼛㼢

㻰㼑㼏

Source: Prepared by FISCO from the Company’s IR news██Business outlook
Sales and earnings expected to grow rapidly at around 20% in
FY12/19. Further refinement of a strong business model expected
to yield an 18th consecutive year of sales growth and a 10thconsecutive year of earnings growth• Consolidated outlook for FY12/19
The Company’s FY12/19 consolidated targets are ¥136,258mn in net sales (up 24.4% YoY), ¥16,536mn in operating income (up19.9%), ¥16,530mn in ordinary income (up19.9%), and ¥11,715mn in net income attributable toowners of the parent (up 23.1%). This outlook expects continuation of strong growth in sales and earnings withapproximately 20% increase. If it can achieve these targets, the Company will realize 18 consecutive periods ofsales growth and 10 of earnings growth.
The Company’s core strategies for increasing sales are to expand new customer acquisitions, expand sales toexisting customers, and promote the purchase management system business (business with large corporations).
Expected sales growth of 24.4% is in line with the level of growth in the previous year. For new customer acquisitions,the Company will make further use of marketing data with the aim of acquiring 721,000 new accounts (625,000
new accounts in the previous year). For expansion of sales to existing customers, the Company will work to further
shorten lead times by optimizing distribution and conducting timely promotions. The purchase management systembusiness (business with large corporations) is also expected to achieve a high rate of growth in FY12/19 with salesof ¥19.5bn (up 44% YoY). The Company will increase its corporate sales members and strengthen its organizationand systems, including the opening of a sales office in the Chubu region and carving out the organization responsible
for the purchasing management system inside the IT division to make it independent.

We encourage readers to review our complete legal statement on “Disclaimer” page.

05 09

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.
3064 Tokyo Stock Exchange First Section

8-Apr.-2019https://www.monotaro.com/main/ir/english/

Business outlook

The gross profit margin is forecasted at 28.7% (down 0.5 pp YoY). Changes in the product mix and an increase in
the ratio of business with large corporations, an increase in delivery prices, a decline in overseas royalties, and otherfactors, are expected to continue along the same trajectory as the previous fiscal year. On the other hand, the SG&A
expenses ratio is expected to decline by 0.1 pp YoY, reflecting the streamlining and scale effects despite an increasein system-related expenses such as expansion of data marketing. As a result, operating income is forecasted toincrease 19.9% YoY, with the ratio to sales at 12.1% (down 0.5 pp). Both sales and earnings have been growing
at around 20%, indicating an extremely strong business model. Ceaseless refinement of distribution, systems, andmarketing to evolve the business model further also enhances the reliability of the earnings forecast.
Consolidated targets(¥mn)
FY12/18

FY12/192Q FY12/19

Results

vs. net sales

Forecast

vs. net sales

YoY

Forecast

YoY

Sales

109,553

100.0%

136,258

100.0%

24.4%

63,78023.4%

Gross profit

32,02729.2%

39,065

28.7%

22.0%

18,284

18.8%

SG&A expenses

18,23616.6%

22,529

16.5%

23.5%

10,816

24.7%

Operating income

13,79012.6%

16,536

12.1%

19.9%

7,468

11.3%

Ordinary income

13,788

12.6%

16,530

12.1%

19.9%

7,462

11.6%

Net income attributableto owners of the parent

9,515

8.7%

11,715

8.6%

23.1%

5,191

12.7%

Source: Prepared by FISCO from the Company’s results briefing materials██Topics
Construction work to double the shipping capacity of the Kasama
DC is progressing.
Strengthen marketing capability based on data science
1. Kasama DC shipping capacity being doubled to cope with business expansion. Utilization of projection
mapping in picking stations
Under the Company’s business model, “quick, timely” delivery of various products is of key importance. On theother hand, if inventories are increased or labor is used excessively, distribution-related costs will increase. The
distribution-related cost ratio to sales is on a broad declining trend and under control. With the full-scale start ofoperations at the Kasama DC in 1H FY12/17, one-time costs were incurred during the transition period and the
distribution-related cost ratio to sales for 1H FY12/17 was 6.5%. In 1H FY12/17, however, the ratio declined to
5.8%. In 1H FY12/18, the impact of adverse weather (heat waves, torrential rain, typhoons) caused a decline inproductivity, mainly at the Amagasaki DC. This caused the distribution-related cost ratio to climb to 6.1% as theratios of personnel and outsourcing expenses increased. In 1H FY12/19, the ratio is forecast to remain at 6.1% dueto the lingering impact of the increase in personnel and outsourcing expenses. The ratio is projected to fall backto 5.8% in 2H FY12/19 as shipping increases following the completion of the expansion of the highly productive
Kasama DC in April.

We encourage readers to review our complete legal statement on “Disclaimer” page.

06 09

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.
3064 Tokyo Stock Exchange First Section

8-Apr.-2019https://www.monotaro.com/main/ir/english/

TopicsThe Company is carrying out construction work (second phase construction) to double the capacity of the Kasama
DC to cope with the rapid expansion of its business. The construction is scheduled for completion in March 2019,with operations to start in April. Specifically, the number of auto-guided vehicle robots will increase by 114 units fromthe current 154 units, and conveyors and shipping equipment will also be increased. A further 28 picking stations
will be added to expand to 44 stations. Projection mapping technology will be applied to the picking stations torelieve the burden on workers and increase work accuracy. After the expansion is complete, the scale of sales thatcan be handled at the east and west DCs will be around ¥160bn.

㻰 㼕 㼟㼠㼞㼕㼎㼡㼠㼕㼛㼚㻙㼞㼑㼘㼍㼠㼑㼐㻌㼏㼛㼟㼠㻌㼞㼍㼠㼕㼛
（㻑）
㻣㻚㻜
㻢㻚㻜

㻡㻚㻜

㻰㼑㼜㼞㼑㼏㼕㼍㼠㼕㼛㼚㻢㻚㻡㻌（㻷㼍㼟㼍㼙㼍㻌㻰㻯㻌㼑㼟㼠㼍㼎㼘㼕㼟㼔㼙㼑㼚㼠）㻝㻚㻜㻸㼍㼎㼛㼞㻌㼍㼚㼐㻌㼛㼡㼠㼟㼛㼡㼞㼏㼕㼚㼓㻌㼑㼤㼜㼑㼚㼟㼑㼟
㻢㻚㻝㻌
㻢㻚㻜㻌
㻜㻚㻤

㻡㻚㻤㻌

㻻㼠㼔㼑㼞㼟

㻢㻚㻝㻌（㻷㼍㼟㼍㼙㼍㻌㻰㻯㻌㼑㼤㼜㼍㼚㼟㼕㼛㼚）

㻡㻚㻤㻌

㻜㻚㻥

㻜㻚㻥

㻜㻚㻤

㻝㻚㻝

㻝㻚㻞

㻝㻚㻝

（㻭㼐㼢㼑㼞㼟㼑㻌㼣㼑㼍㼠㼔㼑㼞㻘
etc）

㻜㻚㻥

㻲㼍㼏㼕㼘㼕㼠㼥㻌㼞㼑㼚㼠

㻝㻚㻠

㻝㻚㻞

㻝㻚㻝

㻟㻚㻡

㻟㻚㻞

㻟㻚㻞

㻟㻚㻠

㻟㻚㻟

㻟㻚㻝

㻜㻚㻢

㻜㻚㻤

㻜㻚㻣

㻜㻚㻢

㻜㻚㻣

㻜㻚㻤

㻝㻴㻌㻲㼅㻝㻞㻛㻝㻣㻾㼑㼟㼡㼘㼠㼟

㻞㻴㻌㻲㼅㻝㻞㻛㻝㻣㻾㼑㼟㼡㼘㼠㼟

㻝㻴㻌㻲㼅㻝㻞㻛㻝㻤㻾㼑㼟㼡㼘㼠㼟

㻞㻴㻌㻲㼅㻝㻞㻛㻝㻤㻾㼑㼟㼡㼘㼠㼟

㻝㻴㻌㻲㼅㻝㻞㻛㻝㻥㻲㼛㼞㼑㼏㼍㼟㼠

㻞㻴㻌㻲㼅㻝㻞㻛㻝㻥㻲㼛㼞㼑㼏㼍㼟㼠

㻠㻚㻜
㻟㻚㻜
㻞㻚㻜
㻝㻚㻜
㻜㻚㻜

Source: Prepared by FISCO from the Company’s results briefing materials

2. Expand the number of items handled to 18 million. Expand long-tail products
Since the Company’s foundation, it has worked to expand the coverage of items handled with a focus on low-volume, high-mix long-tail products.* The number of items handled passed 10 million at the end of 2016, and by theend of January 2019 it had reached 18 million. The number of long-tail products expanded, including mainly air
compressors, control equipment, and paint, as well as electrical materials, working apparel, cutting tools, store
fixtures and furniture, experimental equipment and R&D products. Inventory items also expanded in parallel. At theend of 2016, inventory items stood at 298,000 items, expanding to 411,000 items by the end of 2018. A major factor
in this expansion was the establishment of an east-west double DC structure with the Amagasaki and Kasama DCs.
The increase in inventory items means an increase in same-day and next-day shipments, increasing the service
level as well as the repeat ratio.
*	Long-tail (products): A method of selling goods using the Internet. This approach seeks to boost overall net sales by
preparing a wide range of items including niche products that have few selling opportunities and increasing customer
numbers. Such product lines are referred to as long-tail products.

We encourage readers to review our complete legal statement on “Disclaimer” page.

07 09

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.

8-Apr.-2019

3064 Tokyo Stock Exchange First Section

https://www.monotaro.com/main/ir/english/

Topics㻺 㼡㼙㼎㼑㼞㻌㼛㼒㻌㻼㼞㼐㼡㼏㼠㼟㻺㼡㼙㼎㼑㼞㻌㼛㼒㻌㼕㼠㼑㼙㼟㻌㼔㼍㼚㼐㼘㼑㼐㻌㻔㻸㼑㼒㼠㻌㼍㼤㼕㼟㻕（㻝㻜㻘㻜㻜㻜㻌㼕㼠㼑㼙㼟）㻔㻝㻜㻘㻜㻜㻜㻌㼕㼠㼑㼙㼟 㻕㻺㼡㼙㼎㼑㼞㻌㼛㼒㻌㼕㼚㼢㼑㼚㼠㼛㼞㼥㻌㼕㼠㼑㼙㼟㻌㻔㻾㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕

㻞㻘㻜㻜㻜

㻡㻜㻚㻜

㻠㻝㻚㻝
㻝㻘㻢㻜㻜

㻠㻜㻚㻜
㻟㻜㻚㻞

㻞㻥㻚㻤
㻝㻘㻞㻜㻜

㻟㻜㻚㻜

㻞㻡㻚㻢
㻞㻜㻚㻜
㻝㻘㻣㻜㻜

㻤㻜㻜
㻝㻞㻚㻢
㻠㻜㻜

㻝㻘㻤㻜㻜

㻞㻜㻚㻜

㻝㻘㻟㻜㻜
㻤㻜㻜

㻥㻜㻜

㻝㻘㻜㻜㻜

㻲㼅㻝㻞㻛㻝㻠

㻲㼅㻝㻞㻛㻝㻡

㻲㼅㻝㻞㻛㻝㻢

㻝㻜㻚㻜

㻡㻜㻜
㻜

㻜㻚㻜
㻲㼅㻝㻞㻛㻝㻟

㻲㼅㻝㻞㻛㻝㻣

㻲㼅㻝㻞㻛㻝㻤

㻭㼟㻌㼛㼒㻌㻶㼍㼚㻚㻟㻝㻘㻌㻞㻜㻝㻥

Source: Prepared by FISCO from the Company’s results briefing materials

3. Opening offices in Osaka and Tokyo and promoting reinforcement of organization using data
In 2018, the Company opened sites in Umeda (Osaka) and Akasaka (Tokyo) with the main purpose of developing
sophisticated marketing systems based on data science. The Company has already been one of the first to introduce
machine learning for use in attracting customers and continuous purchasing. Now, it will step up its activities to ahigher level. As an example, the Company presents an optimized selection of recommended items to customer, andhas earned a reputation for its accuracy in this. Looking ahead, it will strive to produce optimal recommendations
with even finer detail. This will lead to greater convenience as customers can obtain items that they really need allfrom a single supplier.
The Company plans to employ around 30 data scientists and IT engineers over the next two to three years. Data
scientists are in high demand, mainly among major Internet corporations, and human resources with high levels of
expertise are difficult to source. Recruitment is continuing as before.

We encourage readers to review our complete legal statement on “Disclaimer” page.

08 09

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

MonotaRO Co., Ltd.
3064 Tokyo Stock Exchange First Section

8-Apr.-2019https://www.monotaro.com/main/ir/english/██Shareholder return policy
Stable dividend increase for a fifth consecutive year in December
2018
Forecasting a ¥15 dividend in FY12/19 (up ¥2 YoY), 31.8% dividend
payout ratio
The Company adheres to a policy of paying a stable dividend in line with earnings. It has delivered five consecutive
years of dividend increases since FY12/13 (dividend ¥3) and maintained a dividend payout ratio of 30% or higher.
The dividend for FY12/18 was ¥13 (up ¥2 YoY) and the dividend payout ratio was 33.9%. For FY12/19, the forecast
is for an interim dividend of ¥7.5 and a year-end dividend of ¥7.5, (both dividend increases) for an annual dividendof ¥15 (up ¥2 YoY) and a dividend payout ratio of 31.8%. The dividend increases are expected to continue at a fastpace, matching the high growth rate of the Company’s profits.
The Company offers shareholder benefits in the form of private-brand product gifts for each shareholder holding
100 or more shares for at least six months at the end of the fiscal year (December 31) (worth ¥3,000 for six months
or longer, ¥5,000 for three years or longer, and ¥7,000 for five years or longer *).
*	Amounts do not include tax

㻰 㼕 㼢㼕㼐㼑㼚㼐㼟㻌㼍 㼚㼐㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛（¥）

㻭㼚㼚㼡㼍㼘㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㻔㼘㼑㼒㼠㻕

㻞㻜㻚㻜㻜
㻟㻟㻚㻣㻑

㻟㻟㻚㻟㻑

㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻌㻔㼞㼕㼓㼔㼠㻕

㻟㻡㻚㻜㻑

㻠㻜㻚㻜㻑

㻟㻟㻚㻥㻑
㻟㻞㻚㻟㻑

㻟㻝㻚㻟㻑

㻝㻢㻚㻜㻜

㻟㻞㻚㻜㻑

㻝㻞㻚㻜㻜

㻞㻠㻚㻜㻑

㻤㻚㻜㻜

㻝㻝㻚㻜㻜㻌

㻥㻚㻜㻜㻌

㻠㻚㻜㻜

㻝㻟㻚㻜㻜㻌

㻝㻡㻚㻜㻜㻌

㻝㻢㻚㻜㻑

㻤㻚㻜㻑

㻢㻚㻜㻜㻌

㻟㻚㻡㻜㻌
㻜㻚㻜㻜

㻜㻚㻜㻑
㻲㼅㻝㻞㻛㻝㻠㻌㻱㻲㼅㻝㻞㻛㻝㻡

㻲㼅㻝㻞㻛㻝㻢

㻲㼅㻝㻞㻛㻝㻣

㻲㼅㻝㻞㻛㻝㻤

㻲㼅㻝㻞㻛㻝㻥㻌㻱Note: The Company conducted 2-for-1 stock splits in FY12/15. It also decided at its Board of Directors’ meeting on July 27,
2018 to conduct a 2-for-1 stock split that took effect on October 1, 2018. We retroactively adjusted dividend values forthe share split.
Source: Prepared by FISCO from the Company’s financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

09 09

Disclaimer
FISCO Ltd. (the terms “FISCO”, “we”, mean FISCO Ltd.) has legal agreements with theTokyo Stock Exchange, the Osaka Exchange,and Nikkei Inc. as to the usage of stock priceand index information. The trademark and value of the “JASDAQ INDEX” are the intellectual
properties of the Tokyo Stock Exchange, and therefore all rights to them belong to the Tokyo
Stock Exchange.
This report is based on information that we believe to be reliable, but we do not confirm or
guarantee its accuracy, timeliness,or completeness, or the value of the securities issued bycompanies cited in this report. Regardless of purpose,investors should decide how to use
this report and take full responsibility for such use. We shall not be liable for any result of its
use. We provide this report solely for the purpose of information, not to induce investment or
any other action.
This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of the report, including suppositions andconclusions, is the result of our analysis. The content of this report is based on informationthat was current at the time the report was produced, but this information and the content of
this report are subject to change without prior notice.
All intellectual property rights to this report, including copyrights to its text and data, areheld exclusively by FISCO. Any alteration or processing of the report or duplications of thereport, without the express written consent of FISCO, is strictly prohibited. Any transmission,
reproduction, distribution or transfer of the report or its duplications is also strictly prohibited.
The final selection of investments and determination of appropriate prices for investment
transactions are decisions for the recipients of this report.
FISCO Ltd.