Q2 FY1/2021
Financial Results
August 28, 2020

TAKASHO CO.,LTD.

Stock Code: 7590

1

Table of Contents
1． Financial Results for Q2
2． Business Development
3． Medium-to Long-term Plan
4． SDGs Initiatives
5.

Appendix (Business Overview)21． Q2 FY1/21
Financial Results3

1-(1) Revision to Business Forecasts for Q2 FY1/21 [Consolidated]

Upward revision to Q2 forecasts (announced on August 25, 2020)
Million yen
Q2 FY1/21
Initial Forecasts

Ratio tosales

Q2 FY1/21
Revised
Forecasts

Ratio tosales

Net sales

10,191100.0%

9,706

100.0%

95.2%

Gross profit

4,324

42.4%

4,345

44.8%

100.5%

SG&A

3,920

38.5%

3,528

36.4%

90.0%

Operatingincome

403

4.0%

818

8.4%

202.2%

Ordinary
income

345

3.4%

754

7.8%

218.7%Net income

176

1.7%

535

5.5%

303.5%EPS (yen)

12.07 yen

36.74 yen

Vs. Plan[Change][▲489][21][▲392]

[415]

[409]

[359]

YoY

103.2%

108.3%
97.3%
210.5%
232.6%
337.6%

24.67 yen4

1-(2) Summary of Consolidated Statements of Income
Amid the worldwide COVID-19 pandemic,≫ In Japan and abroad, demand for vegetable gardening and other home
Consolidat
gardening significantly increased driven by the “stay-at-home” trend.
ed Results≫ Profitability improved thanks to an increase in the proportion of in-housemanufactured products and D2C sales on own web shop.
≫ Operating expenses decreased reflecting changes in sales method, and SG&A
expenses also decreased due to revisions to sales promotion activities.
Performan■ Net sales: ¥9,706 million
ce Trends

103.2% YoY■ Operating income: ¥816 million

210.5% YoY■ Ordinary income: ¥754 million

232.6% YoY■ Net income: ¥535 million

337.6% YoY* Quarterly net income reached a record high5

1-(3) Consolidated Statements of Income[Million yen]
Q2 FY1/20
Results

Item

Consolidat
Net sales
ed Results
Gross profit

9,406

4,012

Q2 FY1/21
Results

9,706

4,345

YoY
(%)

Major factor

103.2

Up by ¥299 million
・ PRO use business: Down by ¥150 million
・ HOME use business: Up by ¥388 million・ International Business: Up by ¥43 million

108.3

Up by ¥332 million
Gross profit margin: 44.8%, improved by 2.1 ppt.
・ Increase in sales mix of in-house manufactured
products, etc.

Operatingincome

387

816

210.5

Performan
Ordinary
incomece
TrendsUp by ¥428 million
SG&A ratio: 36.4%, down by 2.1 ppt.
・ Reduction in operating expenses and sales
promotion expenses

324

754

232.6

Up by ¥430 million
・ YoY decrease in foreign exchange losses

337.6

Up by ¥376 million
・ Decrease in income taxes-deferred due to tax
effect accounting

Net income

158

535

■ Ordinary income (million yen)

■ Net sales (million yen)
9,800

9,706
9,608

754

800
600

9,600

400

9,406
9,400

308

324

2019年1月期2Q
Q2 FY1/19

Q2 FY1/20
2020年1月期2Q

200
0

9,200
2019年1月期2Q
Q2 FY1/19

Q2 FY1/20
2020年1月期2Q

Q2 FY1/21
2021年１月期2Q

Q2 FY1/21
2021年１月期2Q6

1-(4) Performance by Sales Segment ①
Global gardening boom sparked by stay-at-home trend● Domestic and overseas sales grew in the Home Use Segment≫ Increased demand for products to stay comfortably in home gardens≫ e-commerce sales increased● Improvement in performance of overseas sales subsidiaries/Reducing the risk of recording allowancesand losses

Home Use Segment (Domestic)● Home Use Segment only
・ Sales: 113.4% YoY● Aoyama Garden
・ Sales: 210.4% YoYMillion yen
3,000● Strong sales improved overall performance・ VegTrug Sales: 134.4% YoY
・ Recovery in performance reduced the risk ofrecording allowances and losses
800

Home CentersEC

EC: 200% YoY

163

2,000

218

716

358

1,500

Million yen

742

100

Others

2,500

1,000

Overseas sales subsidiary

600

Net
sales
+190

552

400

80

Profit
+114

200
1,633

1,696

500

60
40
20
0

0

2019 Q2
2019年2Q

0802020 Q2
2020年2Q

(20)

(200)
2019 Q2

2020 Q2

(34)

(40)

1-(4) Performance by Sales Segment ② [Consolidated][Million yen]Item

Net sales

Ratio tosales (%)

5,732

PRO use businessYoY (%)

59.1

Factors

97.5

New housing starts declined due to a reactionary fall indemand against the consumption tax hike and delays inthe supply of materials reflecting the impact of COVID19.

HOME use business

3,028

31.2

114.7

The stay-at-home trend accelerated demand for living
gardens, and e-commerce-related sales increased
significantly.

International Business

940

9.7

104.8

Sharp increase in sales mainly in e-commerce-related
as gardening demand is also rising overseas.

Others

5

0.0

-

Total

9,706

100

103.2

Advertising revenue from website operation■ Net sales (million yen)
6,000

5,483

5,882

5,732

3,500
3,000

5,000

1,200

1,200

3,052

1,079

3,028
2,640

1,100

1,000

2,500
2,000

4,000
2019 Q2
2019年2Q

2020 Q2
2020年2Q

2021
2021Q2
Q2
2021年2Q

プロユース事業PRO
use business

896

800
2020 Q2 2021年2Q
2021 Q2
2019年2Q
2019 Q2 2020年2Q

HOME
use business
ホームユース事業

2019 Q2
Q2
20192019年2Q

2020
2020Q2
Q2
2020年2Q

940
2021 Q2
2021年2Q

International
Business
国際事業■ Timely switching distributor to VegTrug EU, a German distributor

1-(5) SG&A Analysis [Consolidated]
SG&A ratio: 38.5% ▶ 36.4%, down by 2.1 percentage points[Million yen]

Major SG&A
expenses

Q2 FY1/20
Results

Q2 FY1/21
Results

AmountRatio tosales

AmountRatio tosales

Personnel
expenses

1,399

14.8%

1,437

14.8%

Shipping cost

627

6.6%

609

6.3%

Sales promotion
and advertisingexpenses

365

3.9%

314

3.2%

Commissions paid

301

3.2%

292

3.0%

Travel expenses

111

1.2%

52

0.5%

Total

3,624

38.5%

3,528

36.4%
9

1-(6) Key Financial Indicators [Consolidated]
Item

Q2 FY1/20
Results

Q2 FY1/21
Results

ChangeGross profit ratio (%)

42.7

44.8

+2.1 ppt.

Operating income margin (%)

4.1

8.4

+4.3 ppt.

Ordinary income margin (%)

3.4

7.8

+4.4 ppt.

Net income (%)

1.7

5.5

+3.8 ppt.

ROA(%)

2.0

4.0+2.0 ppt.

ROE（％）

1.9

6.1+4.2 ppt.

* Gross margin, operating margin, ordinary margin, and quarterly net margin indicates the composition of sales.

● TAKASHO's price-earnings ratio

Q2 FY1/20

Q2 FY1/21

Stock Priceon August 26, 2020

Stock Price

455 yen

492 yen

685 yenPrice-earnings
ratio

41.82 times

13.39 times

18.64 times10

1-(7) Balance Sheet [Consolidated][Million yen]

Item

Current assets

Fixed assets

Total assets

Q2 FY1/20
Results

12,502Q2 FY1/21
Results

12,705

ChangeMain change factors

202

Increase in cash and deposits: ¥581
millionDecrease in inventories: ¥365 million

Increase due to plant expansion: ¥107
million Increase in deferred tax assets:¥128 million

7,224

7,472

247

19,727

20,177449

10,460

9,595

▲864

Decrease in payables: ¥390 million
Decrease in short-term borrowings:¥495 million

688

1,561

872

Increase in long-term debt: ¥823
million

Net assets

8,578

9,020

441

Increase in retained earnings: ¥434
millionTotal liabilities andnet assets

19,727

20,177449

Current liabilities
Long-term liabilities111-(8) Analysis of Interest-Bearing Debt [Consolidated]
Establish a financial base in preparation for a temporary deterioration inbusiness performance due to COVID-19① Securing commitment line vacancies② Expansion of exclusive overdraft limit: 1.2 billion

Real outstanding borrowing: ¥4.751 billion
Down by ¥615 million YoY③ Securing working capital through long-term debt: ¥1 billion[Million yen]

By useQ2 FY1/20
Results

Q2 FY1/21
Results

FY1/21Year-end forecast

Working capital

5,117

5,574(4,574)

5,348

Equipment fund

107

104

199

Investments andacquisitions

121

72

49

Loans receivable

20

ー

ー

Total

5,366

5,751
(4,751)

5,596* Figures in parentheses are real balances excluding COVID-19 Countermeasure Funds.

12

1-(9) Overview of Cash Flows [Consolidated] ①[Million yen]

Item

Cash flows from operating
activities

Cash flows from investing
activities

Cash flows from financing
activities

Cash and cash equivalents
Balance at the end of thequarter

Q2 FY1/20
Results

821

▲308
▲300

Q2 FY1/21
Results

1,021

▲213
411

Major changes
Up by ¥199 million
・ Increase in quarterly net
income・ Decrease in inventories
・ Increase in trade receivables

Down by ¥95 million
・ Decrease in purchase ofproperty, plant and equipment
Up by ¥711 million
・ Decrease in short-termborrowings (repayment)
・ Increase in long-term debt
(proceeds)

Up by ¥581 million

3,390

3,971

13

1-(9) Overview of Cash Flows [Consolidated] ②● Increase in free cash flow: Up by 295 million yen YoY

・ Decrease due to sales of inventories: 330 million yen
・ Increase in quarterly net income: 760 million yen● Financing C/F・ Revenue of 9,237 million yen, Expenditure of 9,546 million yen

Focus on debt reduction[Million yen]

Q2 FY1/20
Results

Q2 FY1/21
Results

288

821

1,021

Cash flows frominvestingactivities
Focus
on debt
reduction

▲310

▲308

▲213

Free cash flow

▲22

513

808

Cash flows fromfinancing activities

1,118
[92]

▲300

411
[▲639]Cash and cash equivalents
Balance at the end of thequarter

3,656[2,630]

3,390

3,971
[2,921]Item

Q2 FY1/19
Results

Cash flows
Expenditureof from
9,546 million yen
operating activities* Revenue from issuing new shares for Q2 FY1/19: ¥1,026 million; additional borrowing for measures against COVID-19 for Q2 FY1/20: ¥1,050 million Figures in parenthesis deduct these figures.

14

1-(10) Financial Overview [Consolidated][Million yen]

Q2 FY1/20
Results

Q2 FY1/21
Results

ChangeTotal assets

19,727

20,177+449

Net assets

8,578

9,020

+441

Shareholders’ equity ratio

43.1%

44.3%

+1.2 ppt.

Net assets per share

582.66 yen

612.82 yen+30.16 yen

Net income per share

10.88 yen

36.74 yen

+25.86 yen

Item

15

1-(11) Revised Busines Forecasts for FY1/21 [Consolidated] ②

Full-year earnings revised upward and dividend revised up
Million yen
Ratio to sales

FY1/21
Revised
Forecasts

Ratio to sales

YoY

19,145100.0%

18,400100.0%

106.0%

Gross profit

8,207

42.9%

8,110

44.1％

107.5%

SG&A

7,507

39.2%

7,100

38.6%

101.2%

Operatingincome

700

3.7%

1,010

5.5%

190.0%

Ordinary
income

578

3.0%

910

4.9%

194.0%Net income

300

1.6%

640

3.5%

315.1%EPS (yen)

20.58 yen43.90 yen

Dividend pershare (yen)

10.00

13.00

FY1/21
Initial Plan

Net sales

Target dividend payout ratio: 30%

16

2. Business Development172-(1) Business Segments

PRO useTotal supplier for custom order and package sales※ The market size is examined by Takasho

Non-residential and commercial
facilities fields
General housing and exterior
fieldsMarket size: ¥13.7 trillion

HOME use
Home style and DIY fields

Market size: ¥700 billion

PRO and HOME use
overseas markets
Market size: ¥16.5 trillion182-(2) Characteristics of PRO Use Business* The market size is researched by TAKASHO.

GardenExterior

Commercial facilities

Market size: 233 billion yen

Market size: 470 billion yen

Market size: 13 trillion yen

Proposals for total lifestyles
5th ROOM
FacadeSpecial order
Quotation system

Proposals by style

Package deal proposal

Showrooms
Web showroom

Experience the package planwith VR

General Catalogue

Interactive showrooms

Production system

Online exhibitions
TAKASHO Garden &Exterior Fair 202019

2-(3) Establishment of Web Showroom -Available via physical and online

VR showroom from anywhere at anytime

Experience the real showrooms202-(4) Enhanced Web Platform

Try it into the actual spaceon your smartphone21

2-(5) GEMS (Garden Energy Management System)22

2-(6) Proposal for “5th ROOM”
Enhancing Proposals for 5th ROOM, a comfortable space that connects home and garden

Room between the house and the garden232-(7) Proposal for Total Packages
Propose total packages tailored to various age, values, regions, and tastes
Up to 500 thousand yen

From 1 million yen

Up to 500 thousand yen

Up to 1.5 million yen

From 2 million yen

Up to 500 thousand yen

Up to 1.5 million yen

From 3 million yen

Up to 150 thousand yen

Gate
Package

Entrance
Package

GardenPackage24

2-(8) Characteristics of HOME use business
Development ofown brand

PBs of leading home centers in Japanand overseas

Style BusinessDirectly deployed from China's own plants
Own plants in China [Home Use Garden & Exterior specialized factory] site area: 82,645㎡

Previous plant: 66,116㎡

Extended plant: 16,529㎡

STEEL

WOOD

ALUMINIUM

PLASTICLED SOLAR LIGHT

SEWING*1 tsubo: roughly 3.3 m2

25

2-(10) Home Use Initiatives

Domestic market

Demand for home gardens grew due to the impact of stay-at-home trend.
Changes in the value of living with flowers and greenery, and enjoying gardening.

26

2-(11) Impact of Stay-at-home Trend

Overseas market◆ Growth in sales via TV home shopping and e-commerce
500.0%
400.0%

Comparison
the previous year for UK
YoY Changewith
in UK
YoY Change in USA
YoY Change in AU

300.0%
200.0%
100.0%
0.0%
January February March

E-commerce on our site

April

May

June

TV home shopping27

2-(12) Global Development
Global development of high value-added, universal products
in each field and style

U.K./Germany
Market size
Approx. 4 trillion yen/
Approx. 2.3 trillion yen

Home Use
Garden & ExteriorSpecialized factory

East Asia
India

United States
Market size: Approx. 5 trillion yen

Market size: Approx. 700 billion yen

Market size: Approx. 4.7 trillion yen

Australia
Market size: Approx. 700 billion yen* The market size is researched by TAKASHO28

2-(13) Expansion of Web Platform

Unique users

3,280,000/month
Up by 774% from the previous
year

Page view

7,520,000/month
Up by 638% from the previous
year* Results for May 202029

3. Medium-to long-term Plan30

3-(1) Future Business Strategies
Industry leader in the growing exterior and garden sector
From the “one and only” to the “number one” general G&EX manufacturer

Manufacturing: Further increase in capacity utilization

Software: Establishment of a special team for production of AR andVR virtual space designs● Interactive Showroom newly established in Nagoya
Located in Tokai, Nagoya, Osaka, Tohoku, and Hiroshima● Development of GEMS
Garden's IoT, linking low-volt lights, camera and sound to the app● Garden Service Network● Garden Story
Approximately 2,600 articles, exceeding 37 million page views31

3-(2) Plan for FY1/21 and Medium-to Long-Term Plan
30,0002,500
Net sales

Operating income

Ordinary income

Net income

2,000

25,0001,500
20,0001,000
15,000500

10,000Million yen

0

FY1/21ResultFY1/21

FY1/22

FY1/23

FY1/24

FY1/25

Plan

Plan

Plan

Plan

Plan

Net sales

17,357

18,40020,48022,20024,30027,000Operatingincome

531

1,010

1,400

1,630

1,870

2,050

Ordinary income

469

910

1,300

1,530

1,770

1,950

Net income

203

640

810

950

1,100

1,210

EPS

13.93 yen43.90 yen

55.56 yen

65.16 yen

75.45 yen

83.00 yen

ROE

2.4%

6.1%

PER

35.32 times

13.39 times

10.00 yen

13.00 yen

Cash dividends* In calculating EPS for FY1/21 and beyond, it isassumed that the number of outstanding shares does notfluctuate.

4. SDGs Initiatives

33

SDGs Initiatives
TAKASHO contributes to society with our sustainable development goals under the philosophyof "always anticipating change, creating new value, and contributing to the creation of urban
environmental and garden culture".

Apr. 2016
Established the Japan Garden Therapy Association
Nobuo Takaoka, Chairman

Garden Therapy
Extend healthy life
Prevention of disease enhancing
self-healing capabilities

Stimulates the five senses
and activates the brain

34

To become the Global No. 1
Garden Category Company
CultureHorticultural therapy

Open garden

35

5. Appendix (Business Overview)36

History of TAKASHO■ 1980: Established TAKASHO CO., LTD.

■ 1998: Listed on JASDAQ Market (listing for 22 years)■ 2012: First capital increase■ 2013: Second capital increase■ 2017: Listed on the Tokyo Stock Exchange 2nd Section■ 2018: Transferred to the Tokyo Stock Exchange 1st Section

On August 21, 2020,
TAKASHO celebrating our 40th anniversary37

1-(1) Corporate Profile As of January 2020, 2020

TAKASHO CO., LTD.
Established

August 1980 (1980)

Fiscal Year-End

January 2020

Common stock

1,820,860 thousand yen

Net sales

17,357,940 thousand yen (FY1/20)

Number of sharesissued14,578,329 shares (101,485 treasury shares)

Domestic consolidated
subsidiary

5 companies

Foreign consolidated
subsidiary

10 companies (U.K., U.S., Germany, Australia, India, China, Hong Kong)

Number of employees

760

Characteristics

As a comprehensive garden lifestyle provider, it engages in design,development, manufacture and sales of gardening and exterior
products, as well as development of AR and VR software for garden
spacesPro-use is a domestic standard and customized factory
Home use is a global strategy large plant in China
38[Securities code: 7590]

1-(2) Basic Philosophy and Mission

We aim to be a global, one-of-a-kind company that
constantly creates new value, and contributes to theculture of urban environments and gardens.

We create comfortable and pleasant family
lifestyles with healthy garden spaces

We are a company that provides a better garden life
globally.

Industrialization and modernization of gardens and exteriors.
Creating a pleasant and healthy life in mentally and physically.

39

1-(3) Business Segments Total supplier for custom order and package sales
PRO use business

HOME use business

International Business

Non-residential and commercial facilities fields
General housing and exterior productsHome style and DIY fields

Professional field and overseas markets

Market size: 13.7 trillion yen

Market size: 700 billion yen

Market size: 16.5 trillion yen40

1-(4) Business Segments total supplier of custom made and style-oriented products
PRO use business

HOME use business

Non-residential and commercial
facilities fields
General housing and exterior products

Homestyle and DIY fields
Consolidated net sales

Consolidated net sales

11,409 million yen● Target
GardenNewly built

Exterior

Renovation

4,061 million yen
66%

23%

Consolidated net sales

Home Centers

17,357

Garden Center

million yen* FY1/20

Contract● Target11%

Renovation

Mail order ande-commerce
International
Business* Non-residential sector

Overseas Markets● Target
Professional
Use

Consolidated net sales
Home Use

Mail order ande-commerce* Consolidated net sales of 17,357 million yen include -12 million yen in other.

1,899 million yen
41

1-(5) Business Segments total supplier of custom made and style-oriented products
Manufacturing

Sales

Professional use

Non-residential andcommercial
facilities fields[Domestic factory]
Garden Create Co.,Ltd.

General contractors, design firms, etc.

(Tochigi, Mie, Wakayama, Tokushima)
TAKASHO DiGiTEC Co.,Ltd.

Market (Target)

Planning,
development, and sale

TAKASHO

General housing andexterior productsHouse manufacturers, engineering contractors,
landscaping contractors, etc.

Home use[Overseas factory]

DIY field
Aoyama Garden
Jiujiang Takasho
Gardening Product Co.,Ltd.

Home centers and garden centers
Mail order, e-commerce sales

International

Jiangxi Takasho
Import-Export Trade Co.,Ltd.
Hongkong Takasho
Holdings Co., Ltd.

VegTrug UK
VegTrug USA
VegTrug EU
Takasho Australasia Pty.Ltd
TAKASHO GARDEN LIVING INDIA
PRIVATE LIMITED

Overseas market
United Kingdom, EU countries,
the United States,
Australia, India, etc.

42

The purpose of this report is to provide information on the Company's financial results for the
fiscal year ending January 2021, and not to solicit investments in the Company’s shares.
This material has been prepared based on data as of July 20, 2020.
Opinions, forecasts and other statements contained in this material are based on our judgment
at the time of preparation of the materials. We do not guarantee or promise the accuracy orcompleteness of the information, and they may be changed without notice in the future.
"Net income" in this document represents "Net income attributable to owners of parent."

https://takasho.co.jp[IR Contact]
Atsushi Inoue, Corporate Officer,Corporate Management
Headquarters Vice Director
E-mail:soumubu@takasho.co.jp
TEL:073-486-2540

43