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Financial Results Briefing Material
for the Fiscal Year Ended March 31, 2022
May 2, 2022
NAFCO Corporation(Securities Code: 2790)

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Summary of Financial Results for
the Fiscal Year Ended March 31, 2022

■ Net sales decreased due to repercussions from thedemand created by “countermeasure against COVID-19
infection” and “special cash payments” in the previousyear, in addition to sluggish sales of winter products.
■ The composition of materials, DIY and gardening
merchandises, which is our main sector, furtherincreased.
■ Private brand ratio exceeded 40%, and gross profit
margin rose to a record high of 34.8%.
■ Operating profit, ordinary profit, and profit decreased, but
increased significantly compared to 2 years earlier.

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HOME CENTER and HOME FASHION STOREStatements of Income for the Fiscal Year Ended March 31, 2022
*The Company has applied “Accounting Standard for Revenue Recognition” and others since the beginning of the fiscal year ended March 31, 2022.
The figures before the application of such Standard and others are presented based on the disclosed figures before the application.

Fiscal Year
Ended March31, 2021

% of sales

Fiscal Year
Ended March 31,2022(Millions of yen)

% of sales

YoY Change(reference)

Compared to thesame period 2years earlier(reference)

Net Sales

234,578

100.0%

206,549

100.0%

88.1%

94.9%

Gross profit

80,72634.4%

71,809

34.8%

89.0%

100.1%

Operating grossprofit80,72634.4%

72,138

34.9%

89.4%

100.6%

Selling, general andadministrative
expenses

62,504

26.6%60,136

29.1%

96.2%

94.9%

Operating profit

18,221

7.8%

12,002

5.8%

65.9%

144.3%

Ordinary profit

18,918

8.1%

12,572

6.1%

66.5%

140.3%

Profit11,688

5.0%

7,961

3.9%

68.1%

161.1%【Amount Impacted by the Adoption of Accounting Standard for Revenue Recognition, etc.】
Net sales decreased by ¥7,176 million, gross profit decreased by ¥2,590 million, and operating revenue increased by ¥328 million. In addition, selling, general and administrative expenses decreasedby ¥2,215 million, and operating profit, ordinary profit and profit each decreased by ¥46 million.

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HOME CENTER and HOME FASHION STORE

Balance Sheets(Millions of yen)
Fiscal Year
Ended
March 31, 2020

Fiscal Year
Ended
March 31, 2021

Fiscal Year
Ended
March 31, 2022

Total assets

221,037

236,164

233,075(3,088)Current assets

85,738102,419

100,744(1,675)24,19040,984

34,111(6,872)

135,298

133,744

132,331(1,413)

121,301

119,942

118,557(1,384)78,713

83,34275,312(8,029)Interest-bearing liabilities

24,19422,03820,293(1,744)

Of which, short-term borrowings

20,905

20,245

19,585(660)

Of which, current portion of long-term borrowings

1,496

1,084599(484)

Of which, long-term borrowings

1,793

708

108(599)

142,324

152,821

157,763＋4,941

Cash and deposit ratio (%)

10.9

17.4

14.6

Ratio of interest-bearing liabilities (％)

10.9

9.3

8.7

Equity ratio (%)

64.4

64.7

67.7

Of which, cash and deposits

Non-current assets
Of which, property, plant and equipment

Liabilities

Net assets

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HOME CENTER and HOME FASHION STOREStatements of Cash Flows(Millions of yen)Free cash flow

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at theend of the term

Fiscal Year Ended
March 31, 2018

5,103

12,696(7,593)(2,539)24,226

Fiscal Year Ended
March 31, 2019

3,508

7,115

(3,607)(7,537)

20,196

Fiscal Year Ended
March 31, 2020

6,470

11,885(5,415)(5,368)21,297

Fiscal Year EndedMarch 31, 2021

21,28524,781(3,495)(4,492)

38,091

Fiscal Year Ended
March 31, 2022

(2,315)

1,180(3,496)(4,556)

31,218

Income taxes paid : (¥8,870 million)
Increase / decrease amount of Accrued consumption taxes : (¥2,014 million)

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HOME CENTER and HOME FASHION STORE

Trends in Sales Composition by ProductMaterials, DIY andgardening goods

Householdgoods

Furniture and homefashion goods

OthersDemand accelerated
Fiscal year
endedMar. 2015

Fiscal year
endedMar. 2016

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Fiscal year
ended
Mar. 2017

Fiscal year
ended
Mar. 2018

Fiscal year
ended
Mar. 2019

Fiscal year
ended
Mar. 2020

Fiscal year
ended
Mar. 2021

Fiscal year
ended
Mar. 2022

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HOME CENTER and HOME FASHION STORE

Trends in Existing Stores
Net sales of existing stores compared to previous year (%)

FY3/22 cumulative (existing stores)
Net sales : 90.8%
Customers: 88.0%
Customer average: 103.2%

Record-breaking heatwave

Gradually at a normal pace

Declaration of a stateof emergency
Heavy rain of July2020

Demand due to the approach of Typhoon Haishen(October 2019: last-minute demand ahead of theconsumption tax hike)
Apr.

May.

Jun.

Jul.

Aug.

Sep.

Oct.

Nov. Dec.

Jan.

Feb.

Mar.

Apr.

Western Japan
heavy rains
May.

Jun.

Jul.

Aug. Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

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Sales
Customers
Customeraverage

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Trends in Gross Profit Margin(%)

Marked a record high

34.8%
Global financial crisis
September 2008

Consumption tax hike to 10%
October 2019

Consumption tax hike to 8%
April 2014

31.9

31.0

31.7

32.2

32.6

32.5

33.4

33.5

33.1

32.8

32.5

32.1

32.9

34.4

FY3/2234.8

FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 FY3/18 FY3/19 FY3/20 FY3/21 FY3/22
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Factors for a Change in Operating Profit(Millions of yen)

Gross profit

Selling, general and administrative expenses

Materials, DIY and gardening
merchandisesHousehold goods(3,703)
Furniture andhome fashion
goods

18,221(2,879)OthersUtilities expenses
Advertisingexpenses
Operating revenue(1,698)
(635)

+328

+110

Personnel
expenses+503

OthersDepreciation andamortization

(225)

(130)

+2,111

12,002

Fiscal year ended March 2021
operating profit
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Fiscal year ended March 2022
operating profit
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Trends in Private Brand Ratio(%)

Company total
Private Brand ratio

Fiscal yearendedMar. 2018
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Materials, DIY andgardening goods

Fiscal year
ended
Mar. 2019

Householdgoods

Fiscal year
ended
Mar. 2020

Furniture and home fashion

Fiscal year
ended
Mar. 2021

Fiscal year
ended
Mar. 2022
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HOME CENTER and HOME FASHION STORENAFCO "supports the day-to-day life" of consumers amid increasingpressure of surging prices
Image of household expenditure
Other* Created from "Household Survey",
The Statistics Bureau, Ministry ofInternal Affairs and Communications

Food

Cultureandrecreation

Education

HousingTransportationandcommunication
Medical care

Fuel, light andwater charges

Needs for kitchen garden are expanding

Furniture andhousehold utensils
Clothing andfootwear

Increased demand for bicycles
due to soaring gasoline prices

Overwhelming volume of consumables

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Private Brand Products (Materials, DIY and Gardening Merchandises)

From engine to battery. Original battery tools
Gardeningmerchandises

Carpentry supplies

A single battery can be connected
and used with various models.
A single battery can be usedwith various models.

April 2022 New ProductMay 2022 New Products

18V brushless stringtrimmer

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High rotation + high torquebrushless motor adopted

18V chainsaw

18V garden blower

18V jigsaw

14.4V thunder
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Private Brand Products (Materials, DIY and Gardening Merchandises)

Energy-saving model that meets the diversified needs
Circulator
Energy saving 360 degree swing type

Large / energy saving
industrial fan type

Industrial fanBattery typeAir volume: 127%
Powerconsumption: 52%(Compared to ourequivalent model)

Circulator with remote control (aroma caseattached)

Fan energy saving DC type

18V rechargeable 2WAY
blower fan

N folding leg stand fan
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DCCirculator

Stand type
DC Circulator

DC living fan
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Private Brand Products (Materials, DIY and Gardening Merchandises)
Gardening become popular due toconsumer consciousness on defending livelihoods
Original seed

Series to plant as is
Joint strut

Harvest at home Vegetable seeds

Original vegetable seedlings

Original grafted
vegetable seedlings

Large-scale vegetableseedlings

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Soil to be planted
as isPlant pot

Safe and secure organic soil

Organic soil
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Private Brand Products (Materials, DIY and Gardening Merchandises)

Original working gears
Original wearable fan vest

Original dial type working shoes

Wearable fan vest [10350]

Dial-type safety sneakers [FSS-1000]■ Color: 4 colors ■ Size: M - 3L

■ Color: White, Black, Red ■ Size: 25.0cm-28.0cm■ With removable hood
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■One-touch dial

■ Anti-slip andoil-resistant sole
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Private Brand Products (Household goods)

Evolved Product Development.
NAFCO Outdoor Private Brand Products[Titanium stove]■ A stove that can be used with solid fuel,firewood, and charcoal.
■ Light weight and convenient to carry.

[KING chair][Oil lantern]■ Burning time: Approximately 14 hours■ A popular product with flame fluctuations
that cannot be created with LEDs, etc.

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■ Convergent chair with a built-in cushion for a fluffy seating.
■ Bottle pocket on the side.
■ Uses flame-retardant[Flame-retardant outdoor vest]

fabric.
■ Equipped with variouspockets.

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Private Brand Products (Furniture and Home Fashion goods)

Product Development That Does Not Compromise on Quality

Topper mattress

Bottom mattressThin inner pocket coils for
comfortable sleep
Excellent durability against fatigue even after
prolonged use
Gentle, wrap-around sleeping comfort
Keeps dry and hygienic

Uses SHRAPE, a more comfortablematerial than feathers
Soft, light and gentle to the touch
Excellent moisture retention, heat retention,and insulation properties
Prevents cotton dust from forming and helps
prevent allergies
Maintains fluffiness with little change in bulk

Uses CUTELY, highly deodorantcottonExcellent deodorant function effective against
sweat and age-related odors
Antibacterial and deodorizing features eliminate
unpleasant odors
Moisture-absorbing and moisture-retaining
features make the inside of the mattress
comfortable

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■ Euro top mattress and double
cushion-type bed frame ensure
unsurpassed snugness■ Functional, durable andbreathable, for high-quality
sleep

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Private Brand Products (Furniture and Home Fashion goods)

Brooklyn-themed Interior Decor Coordination【Ecru Rug Series】【Garden Comforter Cover Series】

A cool coordination that is neatly organized in gray and blue by
spicing up with geometric textiles.

【Multi-purpose Shelf York series】
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Number of Point Card Members(Ten thousand people)

Fiscal year
ended
Mar. 2019
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Point card membership is increasing through apps and cards(Up 3.3％ from the end of the previous fiscal year）

Fiscal year
ended
Mar. 2020

Fiscal year
ended
Mar. 2021

Fiscal year
ended
Mar. 2022
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Outline of ESG initiatives

The main items are listed.
Field

Items

OutlineReduction of carbon dioxide
emissions・ Changing the lighting at stores to LED (completed100%)・ Installation of solar panels on the roof of stores

Environmentally friendly
products

・ Development and sales of herbicides from naturalingredients・ Development and sales of rechargeable electricstring trimmer

Recycling after use

・ Collecting PET bottles
・ Collecting used ink cartridges

SRole in Disasters

・ Number of municipalities with which we have enteredagreements for the supply of disaster supplies: 321
・ Product supplies through immediate store restorationin the disaster area

G

Corporate Governance・ Resolution of the items that need to be explained in
Corporate Governance Report

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HOME CENTER and HOME FASHION STOREStore Openings▼ Fiscal year ended March 2022 Results

New store

Minami-yatsushiro StoreExpansion

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Store
NameOpeningLocation

Store style

TWO-ONESTYLE
Mi Nara

April

Nara

Furniture and home fashion
store

TWO-ONESTYLE
QANATO
Nishi-Kobe

September

Hyogo

Furniture and home fashion
store

Yokkaichi

December

Mie

Home center

Minamiyatsushiro

December

Kumamoto

Home center

Nobeokaminami

April

MiyazakiCombination store

Nakabaru

June

Saga

Togitsu

JulyNagasaki

Hita

November

Oita

Home center

Combination store

Home center

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Plans for New Stores Opening▼ Fiscal year ending March 2023 Plan

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Newstore

TWO-ONE STYLE
Matsuzakaya Shizuoka

AprilShizuoka

NewstoreYasuーShiga

Home center

Newstore

KurobeーToyamaHome center

Furniture and home fashion store

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Number of Stores by Business Type
Small stores of
300 tsubo
Furniture-onlystoresHI stand-alone
storesCombination
storesTotal stores

KansaiTohoku

Chugoku

KantoKyushu
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Chubu
Shikoku
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Business Growth Status
Composition
ratio(no. ofstores)

Number of people inserved business area

Related segment(s)Materials, DIY
and gardening
merchandisesHouseholdgoods

Furniture andhome fashion
goods

Other

Large-scale stores

Combination
store

39.8%

○○○

○

200,000

Home center

50.7%

○○

(someproducts)○

100,000

Home fashion
store

3.9%

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○

300,000

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HOME CENTER and HOME FASHION STOREForecast for the Fiscal Year Ending March 31, 2023
(Millions of yen)
Full-year(Plan)

Net Sales% ofsales

YoYChange(%)

208,100 100.0% 100.8%% ofsales

Fiscal Year
Ended
March 31,2021(Results)% ofsales

206,549

100.0%

234,578

100.0%

Fiscal Year
Ended March31, 2022
(Results)

Operatingprofit12,8006.2%

106.6%

12,002

5.8%

18,221

7.8%

Ordinary
profit13,200

6.3%

105.0%

12,572

6.1%

18,918

8.1%

Profit

8,000

3.8%

100.5%

7,961

3.6%

11,6885.0%

Annualdividends(Interim/Fullyear)

56 yen (forecast)(28 yen/28 yen)56 yen(28 yen/28 yen)

50 yen(23 yen/27 yen)

*The Company has applied “Accounting Standard for Revenue Recognition” and others since the beginning of the fiscal year ended March 31,2022. The figures before the application of such Standard and others are presented based on the disclosed figures before the application.
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HOME CENTER and HOME FASHION STOREThis document is intended solely for the purpose of providing information toinvestors.
We will disclose information as needed at an appropriate time depending onthe external environment and the progress of business performance.
This document may contain forward-looking statements. These statements
are not statements of past fact, but are instead forecasts based on
hypotheses and assumptions determined from information available at thecurrent time.
They also involve risks and uncertainties related to economic trends, marketenvironments, and the like.
Actual business performance may therefore differ from the Company’sforecasts.

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