Senshukai Co., Ltd.
Second Quarter of Fiscal 2013 Earnings Presentation
July 25, 2013

Contents

1.

Results of Consolidated Operations for 2Q Fiscal 20132.

Overview by Segment

3.

2Q Fiscal 2013 Results Relative to Initial Plan

4.

Consolidated Earnings Outlook for Fiscal 2013

21.

Results of Consolidated Operationsfor 2Q Fiscal 20133

Consolidated Results of Operations for 2Q Fiscal 2013 (YoY Comparison)(Millions of yen)

2Q Fiscal 2012

2Q Fiscal 2013

% to netsales

YoY change% to netsales

Difference(amount)

Difference(%)

Change in %to net sales

Net sales

74,031-72,736--1,295-1.7%-

Cost of sales

38,99952.7%

37,22251.2%-1,777

-4.6%

-1.5%

Gross profit

35,031

47.3%

35,513

48.8%

482

1.4%

1.5%

SG&A expenses

34,26946.3%

33,887

46.6%

-382

-1.1%

0.3%

Operating income

762

1.0%

1,626

2.2%

864

113.3%

1.2%

Ordinary income

1,180

1.6%

1,995

2.7%

815

69.1%

1.1%

914

1.2%

1,241

1.7%

327

35.8%

0.5%

Net income

Net sales declined due to weak sales in the hanpukai and catalog businesses, as well as in otherbusinesses resulting from withdrawal from pet business
Operating income rose significantly due to an improvement in the gross profit margin and the cutting of
SG&A expenses
4Consolidated Balance Sheet for 2Q Fiscal 2013 (YoY Comparison)(Millions of yen)

AssetsDec. 31,2012

Jun. 30,
2013

Difference

Current assets

46,24844,496-1,751

Noncurrent assets

46,63946,799160

Total assets

92,887

91,296-1,591

Current liabilities

37,06233,567-3,494

Noncurrent liabilities

10,892

10,468-424

Total liabilities

47,95544,035-3,919

Shareholders’ equity

52,203

52,689486

Accumulated othercomprehensive income-7,271-5,429

1,841

Total net assets

44,93247,2602,328

Total liabilities
and net assets

92,887

91,296-1,591

Remarks
Accounts receivable-other decreased
Land decreased
Investment securities increased

Liabilities
Notes and accounts payable-trade decreased
Short-term loans payable decreased
Long-term loans payable decreased

Net assets
Retained earnings increased
Valuation difference on available-for-salesecurities increased
Deferred gains or losses on hedges increased

5Net Sales by Consolidated Business Segment (YoY Comparison)(Millions of yen)

98.6%

2Q Fiscal 2012

2Q Fiscal 2013

66,832 65,900

99.4%
4,738 4,708
100.3%
1,881 1,887

41.4%
579

Mail-orderbusiness

BridalbusinessCorporatesbusiness

239

OthersMail-order business: Weak sales in the catalog business in April, and sales in the hanpukai businessdeclined
Bridal business:
Number of weddings declined
Others:Sales declined due to withdrawal from pet business

6Consolidated Sales by Product Category (YoY Comparison)(Millions of yen)
97.8%

2Q Fiscal 2012

2Q Fiscal 2013

29,719 29,075

102.8%
16,620 17,081
94.0%

100.3%
94.5%
9,674 9,705

8,004 7,527

87.9%

8,257 7,804

1,755 1,542

ApparelFashionaccessories

Interiorgoods

Householdgoods

Foods

OthersApparel and fashion accessories: Sales were weak overall due to unfavorable weather and other factors
Interior goods:

Strong sales of fabrics, furniture and storage products

7

Trend in Monthly Consolidated Sales for Fiscal 2013 (YoY Comparison)Monthly Consolidated Sales

101.9%

102.5%

102.3%

YoY
100%
99.0%
96.7%

89.0%

Jan.

Feb.

Mar.

Apr.

MayJun.

April: Weak sales of spring and summer apparel resulting from lower temperatures8Differences in Consolidated Cost-of-sales Ratio and SG&A Expenses(YoY Comparison)
Consolidated Cost-of-sales Ratio

Consolidated SG&A Expenses(Millions of yen)

-382

-1.5%
52.7%

51.2%

2Q Fiscal 2012

2Q Fiscal 2013

Decrease in valuation losses on goods thanks
to the early implementation of bargain andclearance sales
Cut procurement costs by consolidating suppliers
and shifting procurement from domestic to direct
imports

34,26933,887

2Q Fiscal 2012

2Q Fiscal 2013

Selling expenses: Decrease in distribution-related costs
thanks to more efficient logistics
Cuts made to printing costs from
review in the paper used in printing
catalogs9

2. Overview by Segment

Sales and Earnings by Segment in 2Q Fiscal 2013 (YoY Comparison)(Millions of yen)

2Q Fiscal 2012

2Q Fiscal 2013

66,832

65,900-932

-1.4%

389

1,344

955

245.6%

4,738

4,708

-30

-0.6%

239

65

-174

-72.5%

1,881

1,887

60.3%

177

212

35

19.7%

Net sales579

239-340-58.7%

Operating income-43

447-Mail-order businessNet sales
Operating income

Difference

YoY change

Bridal businessNet sales
Operating income
Corporates businessNet sales
Operating income
Others11

Overview of the Mail-order Business (Catalogs + Internet) (YoY Comparison)
2Q Fiscal 2012

2Q Fiscal 2013

Difference

Number of orders(10,000 orders)

621.3

612.2

-9.1

Semi-annual number of active
customers (10,000 members)

291.0

292.3

1.3

Semi-annual number of newmembers (10,000 members)

45.5

48.1

2.6

Average sales per customer (Yen)

10,522

10,461-61

Semi-annual order frequency percustomer (Times)

2.13

2.09-0.04

Catalog circulation(10,000 volume)

3,627

3,536

-91

Number of orders decreased despite an increase in the number of active customers, due toa decline in order frequency per customer

12

Internet-related Indicators
Internet Sales(including mobile sales)

41,27536,5689,315
Sales via
catalog(Millions of yen)

(Millions of yen)Amount of Smartphone-only Orders

43,066

Increased
threefold !

7,430

226

9,526

2Q Fiscal
2011

27,042

31,960

5,524

1,839
2Q Fiscal
2012

2Q Fiscal
2013

35,636
Ratio of Internet-based Orders

Internet-onlysales

Rising !

2Q Fiscal
2011

2Q Fiscal
2012

2Q Fiscal
2013

Sales via catalog: Customer reads a catalog then purchases by Internet,
entering catalog number

63.6%
2Q Fiscal
2011

67.4%
2Q Fiscal
2012

70.5%

2Q Fiscal
2013

Internet-only sales: Customer makes purchase through the Internet byputting products into online shopping cart

March: Began distribution of free shopping app for smartphones"Belle Maison Catalog Plus“ : Added “Kazashite” check (augmented reality (AR)) function"Belle Maison Product Search” : Enabled product searches by popularity ranking

13Overview of the Bridal Business (YoY Comparison)

2Q Fiscal
2012
Net sales (Millions of yen)

Guesthouses

Weddings (Couples)
Average sales per wedding(10,000 yen)

2Q Fiscal
2013

Difference

4,738

4,708-30

14

16

2

1,220

1,155-65

378

398

20

Net sales decreased despite an increase in average sales per wedding, due to fewer
weddings

14

Overview of the Corporates Business (YoY Comparison)(Millions of yen)

2Q Fiscal 2012

2Q Fiscal 2013

1,881

1,887

6

1,274

1,256-18

Sampling

393499106Others

214

132-82

Net salesContracting services

Difference

Sampling: Concluded large contracts for direct merchandising (DM) and catalog inserts

153. 2Q Fiscal 2013 Results Relative to Initial Plan

Consolidated Results Compared to Initial Plan for 2Q Fiscal 2013
(Millions of yen)

2Q Fiscal 2013
(Initial plan)

2Q Fiscal 2013
(Results)% to netsales

Relative to initial plan

% to net
sales

Difference(amount)

Difference(%)

Change in %to net sales

Net sales

77,200-72,736--4,464-5.8%-

Cost of sales

40,04651.9%

37,22251.2%-2,824

-7.1%

-0.7%

Gross profit

37,15348.1%

35,51348.8%-1,640

-4.4%

0.7%

SG&A expenses

35,15345.5%

33,88746.6%-1,266

-3.6%

1.1%

Operating income

2,000

2.6%

1,626

2.2%

-374

-18.7%-0.4%

Ordinary income

2,200

2.8%

1,995

2.7%

-205

-9.3%

-0.1%

Net income

1,400

1.8%

1,241

1.7%

-159

-11.4%-0.1%

Net sales:
Operating income:Sales of spring and summer apparel in the mail-order business declined sharply, and sales
in the bridal business also decreased
The gross profit margin improved, but profits declined and the SG&A-to-sales ratio
increased due to lower sales
174. Consolidated Earnings Outlook for Fiscal 201318

Consolidated Earnings Outlook for Fiscal 2013 (YoY Comparison)(Millions of yen)

Fiscal 2012
(Results)

Fiscal 2013
(Forecasts)% to netsales

YoY change% to netsales

Difference(amount)

Difference(%)

Change in % tonet sales

Net sales

145,750-

144,500--1,250-0.9%-

Cost of sales

76,392

52.4%

74,28151.4%-2,111

-2.8%

-1.0%

Gross profit

69,35747.6%

70,218

48.6%

861

1.2%

1.0%

SG&A expenses

67,24846.2%

66,21845.8%-1,030

-1.5%

-0.4%

Operating income

2,109

1.4%

4,000

2.8%

1,891

89.6%

1.4%

Ordinary income

2,765

1.9%

4,400

3.0%

1,635

59.1%

1.1%

Net income

2,029

1.4%

3,500

2.4%

1,471

72.5%

1.0%

Net sales:

We forecast a modest decline, despite a slight increase in the bridal and corporates
businesses, due to declines in the mail-order and other businesses

Operating income:We forecast a sharp increase due to ongoing improvement in the gross profit margin
from 1H, and further declines in the SG&A-to-sales ratio
19Net Sales Outlook by Business Segment for Fiscal 2013 (YoY Comparison)(Millions of yen)

99.2%
130,456 129,433

Fiscal 2012 results
Fiscal 2013 forecasts

103.8%
10,197 10,582

105.6%
3,833 4,048

34.5%
1,262

Mail-orderbusiness

BridalbusinessCorporates
business

435

OthersMail-order business: We forecast a steady increase in Internet sales. However, we forecast an ongoing
decline in the hanpukai business
Bridal business:
We forecast the opening of two new facilities in November 2012 and in March 2013
will contribute to higher sales in the second half
Others:We forecast lower sales due to withdrawal from pet business20

Senshukai's CSR Activities in 2Q Fiscal 2013
Post-quake
reconstruction support“Mother's Day Smile Carnation” in Ofunato
On May 8-10 before Mother’s Day, following the idea of subsidiary Senshukai
Iihana as in previous year, Senshukai and Saito Seika, a treats supplier that
incurred damage from the earthquake, delivered carnation plants and treats(Kamome no tamago) to all 1,800 temporary homes in Ofunato CityThe effort was broadcast byfour local television stations,and reported by three
newspapers“Smile support festival!” in Ishinomaki

Collaboration with customers
Launched "Smile Forest Project" inMarch
We initiated CSR communications,centered on collecting donations, basedon the slogan "Together with ourcustomers, making everyone smile."

On May 25, sponsored an event via J'espere,
together with local foundations, to support mothers
and children in Ishinomaki. 66 mothers enjoyedmaking photo frames at the event

Environmental PR activities
In June, "environment month," we conductedenvironmental PR activities using delivery
boxes

Donations exceeded 12million yen in the first halfalone thanks to strong
interest by customers

We used delivery boxes, which customers areworried about wasting, to promote awareness of
the importance of natural resources, andintroduced our efforts to reduce waste

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Dividends and Results Announcements Scheduled in Fiscal 2013
Our basic policy is to continuously return profits to shareholders targeting a
consolidated payout ratio of 30%.
We plan a dividend of 12 yen per share in cumulative 2Q.
This, together with our divided forecast of 12 yen per share for the year-end, gives anannual dividend of 24 yen per share (annual dividend of 20 yen per share in Fiscal2012).
Earnings for the Third quarter of Fiscal 2013

October 25 (Friday)

Earnings for the Fiscal 2013

February 6, 2014 (Thursday)

Earnings Presentation for the Fiscal 2013

February 7, 2014 (Friday)

The forward-looking statements contained in this earnings presentation are based on
information that was available at the time of release of this presentation. Actual results
could differ significantly from these projections due to a variety of factors.

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