2014 Full-Year Results
From June 1, 2014 to May 31, 2015

ERI Holdings Co., Ltd.
July 15, 2015
Listed on Tokyo Stock Exchange
Code 6083

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

1

2014 Full-Year Results Ended May 31, 2015

Summary
Sales slightly shrunk and operating income declined for two
consecutive years･･･ Share-up in core business and expansion into new businesses, but notenough to offset slump of new built market ･･･ Due to consumption tax increase, downturn in consumer confidence led to sales
drop of year-on-year 9.3% in housing segment.
 Non-housing business was in relatively better situation but its segment sales
dropped year-on-year 2.0%.
 Existing building segment sales grew year-on-year 36.8% with a robust growthin service of building legal compliance inspection .
 Service of Point System for Energy-Saving Homes was steady and, in addition,
services for energy-saving market such as BELS/Energy Pass started up gradually.
 Despite ¥184 million of litigation related loss*, net income stayed positive.
* April 2015, the final appeal was rejected by the Supreme Court and Osaka High Court’s judgment became final, which partiallyaffirmed ERI’s liability (¥148 million of compensation for damage).

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

22014 Full-Year Results Ended May 31, 2015

Consolidated results(Millions of Yen)

ChangeFY2013

FY2014(Jun. 2013 ‐ May 2014)(Jun. 2014 ‐ May 2015)

12,509（11,395）

11,949（10,917）

Operating Income

635

292

▲343

▲54.0%

Operating Income
Ratio

5.1%

2.4%

‐

‐

Ordinary Income

651

331

▲319

▲49.1%

Ordinary Income
Ratio

5.2%

2.8%

‐

‐

Net Income

▲41

18

59

‐

Net Income per Share
(Yen)

▲5.33

2.37

7.70

‐

Gross Sales(Net Sales *)Amounts

Ratio

▲560
▲4.5%
（▲477） （▲4.2%）* Net sales is subtracted peer check fee from gross sales. （Peer check fee is paid to the other bodies through ERI group.)
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

3

2014 Full-Year Results Ended May 31, 2015

Consolidated results by segment(Millions of Yen)FY2013

FY2014

Building Confirmation
and Inspection(Net Sales*1)

7,418(6,304）［55.3%］

Housing Performance
Evaluation and its
related services
OthersGross Sales Total

ChangeOperating
IncomeChangeAmounts

Ratio

7,032
(6,001）［55.0%］▲385(▲303）▲5.2%（▲4.8%）

31

▲238

3,000
［26.3%］

2,691［24.6%］▲308▲10.3%

62

▲193

2,091
［18.4%］

2,224［20.4%］

133

6.4%

198

89

12,50911,949［100.0%］*2 ［100.0%］※2

▲560

▲4.5%

292

▲343

*1 Net sales is subtracted peer check fee from gross sales. （Peer check fee is paid to the other bodies through ERI group.)*2 Structural ratio［ ］ is calculated using Net sales. （FY2013 ¥11,395million, FY2014 ¥10,917 million）
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

42014 Full-Year Results Ended May 31, 2015

Trends in housing market
Changes in new housing starts by category of housings The total number of( an average of the past two months, including present month )new housing starts
decreased by 9%during this period.

 Moderately, but 3

consecutive months,
new housing starts
had started risingsince March 2015.

 Housing for sale(condominiums)
became steadyrecently.

 Housings forowner-occupation
increased in May
2015, for the firsttime in 16 months.

( Year-on-Year )New housing starts
Housings for rent
Housings for sale (single‐detached)

Housings for owner‐occupation
Housings for sale (condominiums)

50%
40%
30%
20%
10%
0%
‐10%
‐20%
‐30%
‐40%
Dec Jan Feb Mar Apr May Jun
2014

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

5

Jul

Aug Sep Oct Nov Dec Jan Feb Mar Apr May
2015
2014 Full-Year Results Ended May 31, 2015

Trends in housing market (continued)
Changes in new orders of detached housesby Major house builders

 New orders ofdetached houses bymajor house builders
hit the bottom in lastSeptember andrebound to year-onyear increase.

 However, themomentum wouldn’t
appear so strong
because the growthrate have been lower
than that of two
years ago.

( Year-on-Year )New housing starts

A

B

C

D

E

F

60%
40%
20%
0%
‐20%
‐40%
‐60%
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May
2014
2015
※ New housing starts are on the basis of the number of houses , and the results of major house builders
are on the basis of amounts of money which was disclose on each company’s website.

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

6

2014 Full-Year Results Ended May 31, 2015

Trends in housing market (continued)
 The number of building confirmation by ERI group decreased 10.4%.
 On the other hand, the whole market number of building confirmation decreased

14.1%. As a results, the market share of our group expanded to 7.6% and themarket share of large buildings (Categories I - III) expanded to 17.7%.
Number of building confirmation and market share by ERI group
Number of building confirmation by ERI group （Categories IV）

Number of building confirmation by ERI group （Categories I through III）

Total market share
Market share of buildings in Categories IV

Market share of buildings in Categories I through III※Fiscal year end of this chart is March

50,00020%

Cases

40,00030,000

17.2%
15.6%

17.0%

17.1%

17.7%

15%

10%

20,00010,000

25%

6.7%

7.4%

7.3%

7.3%

7.6%

3.3%

3.7%

3.8%

3.7%

4.0%

FY2010FY2011FY2012FY2013

FY20145%

0%

0
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

7

2014 Full-Year Results Ended May 31, 2015

Trends in housing market (continued)
 The number of housing design performance evaluations of detached houses by

ERI group decreased 20.2%.
 Partly due to the major house builders’ slump in detached house sector in thefirst half of the year and condominiums decrease in collective house sector.
Number of housing design performance and market share by ERI group
Housing design performance evaluation of detached houses by ERI group
Housing design performance evaluation of collective houses by ERI groupMarket share of detached houses※Fiscal year end of this chart is March

Market share of collective houses

35,00030.0%30,000cases

25,00023.7%

20,00015,000

35.0%

24.8%

22.8%

20.5%

20.2%

24.0%
21.7%

22.4%
20.9%

25.0%
20.0%
15.0%

16.6%

10,000

10.0%

5,000

5.0%

0

0.0%
FY2010FY2011

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

FY20128FY2013

FY20142014 Full-Year Results Ended May 31, 2015

Breakdown of building confirmation
FY2014 Japan ERI’s results of building confirmation by category of buildings.
(exc. plan change cases)(Cases, Millions of Yen）
(Educations, Lodgings and more）

OthersTotal

Hospitals, Welfares

Factories, Warehouses

Offices, StoresCollective Houses

Detached Houses
Number of Building Confirmation

26,782

6,602

3,605

1,940

1,268

1,097

41,294Year‐on‐Year-11.1%

-1.7%

-1.2%

17.6%

-18.5%

-4.4%

-7.9%

Proportion

64.9%

16.0%

8.7%

4.7%

3.1%

2.7%

100.0%Net Sales

612.0

557.1

455.3

395.0

229.6

182.2

2,431.3

Year‐on‐Year

-9.3%

-8.5%

1.1%

14.4%

-22.3%

-2.4%

-5.1%

Proportion

25.2%

22.9%

18.7%

16.2%

9.4%

7.5%

100.0%-15.2%

-7.1%

5.1%

-17.6%-7.3%-11.8%

62.2%

10.3%

13.0%

6.9%

7.6%

100.0%（April 2014 ‐ March 2015)
Growth rate of national
newly built floor space(construction starts)
Proportion
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

92014 Full-Year Results Ended May 31, 2015

Key service figures | Consolidated(Cases)

FY2013

FY2014(Jun. 2013 ‐ May 2014)（Jun. 2014 ‐ May 2015）

Building
confirmations（exc. antennas）

62,065（60,653）

Final inspections（exc. antennas）

ChangeAmounts

Ratio

56,617（56,127）▲5,448（▲4,526）▲8.8%（▲7.5%）

54,113（51,324）

49,707（48,928）▲4,406（▲2,396）▲8.1%（▲4.7%）

Housing design
performance
evaluations ofdetached house

21,23618,039▲3,197▲15.1%

Housing design
performance
evaluations ofcollective house

30,59023,620▲6,970▲22.8%

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

102014 Full-Year Results Ended May 31, 2015

Key service figures | Consolidated (continued)
FY2014
Cases
Building confirmations for medium to large
size buildings (over 500 sqm)

5,083

Housing performance evaluations ofdetached houses

ChangeAmounts（Millions of Yen）

Cases

Amounts（Millions of Yen）

▲76

15

18,038706 ▲3,199▲102

Technical assessments for Long‐Life Quality
Housings*

21,439347 ▲3,285▲38

Inspections for housing defect liability
insurance

21,678268 ▲3,564

▲119

1,340

Evaluations of seismic capacity and seismic
retrofitting plans

539

171

132

25

Structural evaluations of high‐rise buildings( Skyscraper and/or Base isolation)

124

163

▲55

▲34

* The number of cases which the certification of Long-Life Quality Housing were issued.

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11

2014 Full-Year Results Ended May 31, 2015

Prospect of focused services
Previous period performance and outlook of earthquake-proofing, energy-savingand stock-utilization services

Earthquake‐
proofing

Newly
built
marketExistingbuilding
marketEnergy‐saving
Energysaving
point

Building
confirmation

Performance
evaluation

EnergyPass

BELS
Evaluationof seismic
retrofitting

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

Stock‐
utilization

LegalcomplianceinspectionHome
inspection

122014 Full-Year Results Ended May 31, 2015

Sales breakdown | Consolidated
FY2013
Others19%

Housing
performance
evaluation andits related
services
26%

FY2014

Newly built
non‐houses,
36%
Newly built
houses,60%

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

Existingbuildings,
6%

Others20%

Existingbuildings,
4%

Building
confirmationand inspection
55%

13

Housing
performance
evaluation andits related
services
25%

Newly built
non‐houses,
37%

Newly built
houses,57%

Building
confirmationand inspection
55%

2014 Full-Year Results Ended May 31, 2015

Consolidated financial statements | Assets(Millions of Yen)FY2013

FY2014(Jun. 2013 ‐ May 2014)(Jun. 2014 – May 2015)

4,382

4,296

▲86

Total current assets

3,372

3,556

184

Cash and deposits

1,851

2,341

490

Accounts receivable

486

480

▲5

Work in process

339

350

11

Total noncurrent assets

1,009

739

▲270

Total property, plant andequipment

123

104

▲18

Total intangible assets

110

138

28

Total investments and otherassets

775

495

▲280

Statutory deposit *

135

‐

▲135

Total assets

Change* April 2015, the final appeal rejected by the Supreme Court and Osaka District Court’s judgment became final, which affirmed ERI’s partial
liability (¥148 million compensation for damage). Financial compensation for damage was paid and statutory deposit was refunded.
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

14

2014 Full-Year Results Ended May 31, 2015

Consolidated financial statements | Liabilities(Millions of Yen)FY2013

FY2014(Jun. 2013 ‐ May 2014)(Jun. 2014 – May 2015)

2,182

2,223

41

1,768

1,999

231

‐

86

86

413

223

▲189

185

‐

▲185

2,199

2,072

▲127

Total shareholders’ equity

2,194

2,067

▲127

Retained earnings

1,349

1,101

▲247

Treasury stock *

▲173

▲52

120

Total liabilities and net assets

4,382

4,296

▲86

Total liabilities
Total current liabilities
Long‐term debt due within
one year*
Total noncurrent liabilities
Long‐term loans payable *Total net assets

Change* Having introduced “Japanese version Trust-Type Employee Stocks Ownership Plan i.e. J- ESOP” on October 2013, book value of
40,700 treasury stock (¥52 million) and borrowing for acquisition of the stock (¥86 million) are included.
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

15

2014 Full-Year Results Ended May 31, 2015

FY2015 Earnings forecast
 Construction market condition

Non-housing market will continue moderate growth. Housing market will rebound fromnegative repercussions of consumption tax increase and will be expanded by thegovernment’s incentive plans.

 Key operating figures

1. Being prepared for implementation of the energy saving standards, and focusing onshare-up in core business, especially on large building services
2. Developing existing building related business, new services derived from the revision of
Building Standard Law and energy-saving initiatives
3. Improving operational efficiency by promoting electronic application procedures(100 million yen, units)

Private-sector non-housing construction investment and new housing starts (FY)Fiscal year

FY1995

FY2000FY2005FY2010FY2011FY2012(forecast)

FY2013(forecast)

FY2014(forecast)

FY2015(forecast)

Private-sector nonhousing investment(ex Civil Eng. Works)

110,095

93,42992,357

69,116

69,61871,80079,80082,80084,300YoY change（-6.8%）（-0.5%）（3.4%）（-9.5%）（0.7%）（3.1%）（11.1%）（3.8%）（1.8%）

1,484

1,213

1,249

819

841

893

987

878

917

（-4.9%）（-1.1%）（4.7%）（5.6%）（2.7%）（6.2%）（10.6%）（-11.0%）(4.4%）New housing starts

YoY change

Source: The Research Institute of Construction and Economy “QUARTERLY OUTLOOK OF CONSTRUCTION AND MACRO ECONOMY” (April 22, 2015)
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

16

2014 Full-Year Results Ended May 31, 2015

FY2015 Earnings forecast
 Net sales forecasts: 11,741 million yen (+823 million yen)
 Ordinary income forecasts: 649 million yen (+357 million yen)
Expecting 2% growth in both houses and non-houses newly built market
Share-up in core business and pursuing growth opportunity in energy-saving
service, seismic qualification service and building-stock business including
assessment of compliance with the Building Standard Law

 Development of management structure
Organization enhancing specialty of each group company
Structural calculation review service is consolidated into TBTC from Japan ERI andstarts to provide nationwide service (from October).

Holding company improves corporate governance of ERI group and also focus
on strategic resource management and new business development.

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

17

2014 Full-Year Results Ended May 31, 2015

Forecasts for FY2015(Millions of Yen)FY2014FY2015(Jun. 2014 – May 2015)(Jun. 2015 – May 2016)

11,949（10,917）

11,741

823

Operating Income

292

649

357

Vs. Gross Sales

2.4%

5.5%

－

Ordinary Income

331

643

312

Vs. Gross Sales

2.8%

5.5%

－

Net Income

18

378

360

Net Income per Share (Yen)

2.37

48.39

46.01

Dividend per Share (Yen)

30

30

0

Gross Sales(Net Sales *)Change* Net sales is subtracted peer check fee from gross sales. （Peer check fee is paid to the other bodies through ERI group.)
Due to the revision of Building Standard Law in June 2015, applicants directly apply to structural calculation review body and, from FY 2016,
our group sales result in the same number that was previously net sales.
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

18

2014 Full-Year Results Ended May 31, 2015

Topics in FY2015
Heading for implementation of the Energy-Saving Standards
 July 2015, Bill for Enhancement of Building Energy Performance passed and became effective. All newbuildings will meet the energy-saving standards by 2020 in a phased manner.
 From 2017, 2,000 sqm and over non-housing building of new construction (about 3,600 buildings peryear) must meet the energy-saving standards and new buildings from 300 sqm to 2,000 sqm (about
37,000 buildings per year) must be registered energy-saving plan.
 In 2020, it’ll expand to 300 sqm and under new housing (about 480,000 buildings per year), whilesome uncertainty remains, and huge demand is anticipated depend on major house builders’ action.
Energy-consumption (new building flow)[estimated]

Number of construction put-in-placeby building size

Japan ERI’s share
20.6%

Japan ERI’s share
32.8%

Estimated by multiplying
floor area by house/nonhouse specific energy
consumption respectively
Source: MLIT “houses/buildings energy-saving policies in the future (initial report)”, January 2015

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19

2014 Full-Year Results Ended May 31, 2015

Topics in FY2015
Evaluation service of BELS （Assessment of compliance with the Building
Energy-efficiency Labeling System）
 Utilized as a requirement of some government-subsidized projects
2015 existing building energy-saving promotion program
2015 regional residence greening program (good building type) From 2015 GRESB survey, which is emphasized by J-REITs,
incorporate BELS as a credit factor
 As sustainability focused more than ever, BELS is expected to be ever more
popular among REOCs, landlords, brokers, tenants, investors and financial
institutions, etc.
 To promote BELS, Japan ERI launch special discount campaign
for these government-subsidized projects.

BELS・・
Established by MLIT’s initiative in April 2014
Streamlined labeling system for non-residential buildings basedon primary energy consumption
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20

2014 Full-Year Results Ended May 31, 2015

Topics in FY2015
Eco-Point system for energy-saving housing Dec. 27, 2014, implementation of point system for energy-saving homes was endorsed by the Cabinet.


ERI Group starts certification service for the Point application.
・New construction of environmental-friendly eco housing: grant some points to new housing thatmeet the energy saving standards
・Environmental-friendly retrofit: grant some points based on energy saving performance and others※Applicable for the housing contracted after cabinet approval date and completed construction after extra budget approval date.
※Expiring November 30, 2015, however, depends on budget implementation status, the date could be accelerated.

 Growing steadily soon after service start in February 2015, it’s a promising service contributing to firsthalf sales.

Energy Pass certification
 Among EU countries, mandatory labeling system of house energy consumption,
which is required to maintain indoor temperature comfortable through a year.
 January 2014, Japan ERI started third party certification as sole agent in Japan.
 Track record shows new detached houses certification predominating,but new condominium certification also initiated.
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

21

2014 Full-Year Results Ended May 31, 2015

Topics in FY2015
Robust growth in inspection service for legal
compliance of existing buildings
 For facilitating Building Permit Request of alteration and/or
extension of buildings without Inspection Certificate
 For negotiation tool of property transaction
 For assurance of compliance for tenant leasing
Changes in monthly sales of inspection service for legal compliance of existing buildings(Including newly launched service based on the MLIT’s guideline)（ Thousands of Yen ）20000

July 2014, Japan ERI

18000

started this service

16000
14000
12000

based on the MLIT’s

10000

guideline as the first

8000

service provider

6000

registered by the MLIT.

4000
2000
0
Jun
2014

July

Aug

Sep

Oct

Nov

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Dec

Jan
2015

Feb

22

Mar

Apr

May
2014 Full-Year Results Ended May 31, 2015

Topics in FY2015
Home inspection sales increase year-on-year 62.3%
 Record-high sales of home inspection by ERI Solution Co., Ltd.
 In addition to business alliance with Mitsui Fudosan Realty Co., Ltd.
from 2012, newly starting several business alliances with Panasonic
Corporation and others.
Home inspection sales（ Thousands of Yen ）14,00012,00010,000
8,000
6,000
4,000
2,000
0
Jun

Aug

Oct

Dec

Feb

Apr

Jun

2012
Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

Aug

Oct

2013

Dec

Feb

Apr

Jun

Aug

2014
23

Oct

Dec

Feb

Apr

2015

2014 Full-Year Results Ended May 31, 2015

IR Contact
ERI Holdings Co., Ltd.
Investor Relations and Public Relations Dept.
info@j-eri.co.jp

Copyright © 2015 ERI holdings Co., Ltd. All rights reserved.

24

2014 Full-Year Results Ended May 31, 2015