Pan Pacific International Holdings Corporation
Q3 Results for FY 2019
Earnings Results
July 1, 2018 – March 31, 2019
May 8, 2019

Earnings summary
9 months to March 2019

Consolidated(Millions of yen)

9 months to March 2018

ActualShare

YoY

ActualShare

Net sales

918,990

100.0%

130.7%

703,156

100.0%

Gross profit

252,11727.4%

139.6%

180,615

25.7%

SGA

205,78522.4%

146.4%

140,555

20.0%

Operating profit

46,3325.0%

115.7%

40,060

5.7%

Recurring profit

51,7585.6%

119.1%

43,441

6.2%

Profit attributable toowners of parent

37,0524.0%

136.4%

27,163

3.9%

EPS(Yen)234.17–136.4%

171.71- Consumption environment overall in Japan was stagnant. Some negative factors including rise in raw material price and badweather affected our business, however, those were offset by strong necessities’ sales. Tax-free sales grew by 21%yoy, hit therecord high sales of 50 billion yen.
UNY Co., Ltd. newly came under the group’s umbrella. 9.1 billion yen of negative goodwill was posted due to this consolidation.
UNY conversion stores are turning around even in initial year. 100 stores will be converted within 5 years.
● Gross profit and margin went up sharply triggered by our accelerated sales growth.
● SG&A went up due in part to rise in commission paid. Initial cost for new store openings and cost related to the consolidationof UNY were the factors for increase in SG&A.
 Operating profit and net profit hit an all-time-high. Non-operating profit and loss in net was 5.4billion yen, extraordinary profit
and loss in net was 1.6billion yen.

1Same-store sales (Don Quijote Co., Ltd.)Same Store Sales
105.0%

TrafficSpending

100.0%95.0%
2016.Sep.

2017.Mar.

Existing stores
Sales (%)
Customer traffic (%)
Customer spending (%)
Existing store count

2017
Oct.

2017.Sep.

2018.Sep.

2019.Mar.

Nov.

Dec.

2019
Jan.

Feb.

102.6 105.9 104.0 103.0 103.6 105.2 103.1 101.6 104.4 100.0 101.4 103.5 100.4 100.5

98.8

99.7

101.6 104.1

100.2 105.4 103.0 101.3 101.3 102.5 101.1

Nov.

Dec.

2018Jan.

2018.Mar.

Feb.

Mar.

Apr.

May.

Oct.

Mar.

97.7

99.7

100.5 102.2

102.4 100.5 100.9 101.6 102.3 102.6 101.9 102.2 103.5 101.2 101.5 105.0

98.7

101.0 101.1

99.9

101.0 101.8

274

291

294

301

301

278

278

280

283

283

288

99.9

Sep.

99.6

278

98.9

Aug.

101.7

277

100.9

Jul.

98.6

275

99.4

Jun.

291

283

299

301

 DQ SSS went up 1.0% (0.2 pts decline for domestic sales and 1.2pts contribution from tax-free sales), traffic went down 0.2% andspending went up 1.2% for the first nine months in FY June 2019, beat the high bar of last year (4.5% growth yoy).
 A series of natural disasters and unusual high temperature affected the traffic and sales for seasonal items.
Sales momentum for tax-free sales were the strongest ever before by attracting customers with cosmetics and pharmaceutical items.

2

Sales breakdown by product category
9 months to March 2019

Consolidated(Millions of yen)

ActualShare

9 months to March 2018
YoY

ActualShare

Miscellaneous household goods

61,886
172,163

6.7%
18.7%

103.2%
106.0%

59,970
162,482

8.5%
23.1%

Foods

257,62528.0%

110.7%

232,745

33.1%

Watches & fashion merchandise

121,893

13.3%

99.8%

122,153

17.4%

Sporting goods & leisure goods

Other products

42,57011,542
72,26816,502

4.6%
1.3%
7.9%
1.8%

100.0%
96.8%
173.1%
104.3%

42,54911,927
41,741
15,826

6.1%
1.7%
5.9%
2.2%

Total discount store business(Former Don Quijote HD stores)

756,449

82.3%

109.7%

689,393

98.0%

Clothings

17,445

1.9%

―

―

―

Household goods

19,370

2.1%

―

―

―

Foods

92,500

10.1%

―

―

―

Total GMS business(Former UNY group stores)

133,953

14.6%

―

―

―

Tenant leasing business

24,1562.6%

186.0%

12,984

1.9%

Other business

4,432

0.5%

568.9%

7790.1%

Total sales

918,990

100.0%

130.7%

703,156

100.0%

Home electrical appliances

DIY goods
Overseas3Sales breakdown by product category
Home electrical appliances
Miscellaneous household goods
Foods
Watches & fashion merchandise

Seasonal items and wireless headsets were two biggest earners.
POSA cards and gaming consoles became popular.
Daily necessities such as detergents took the lead.
Cosmetics and pharmaceutical items were robust due to strong tax-free sales.
Processed food such as noodles as well as snacks and drinks were strong.
MEGA stores were affected by lower vegetable price than last year. Delis were good.
Though outer wear were soft, inner wear and casual outfit were enough to cover.
Fashion items were good.

Sporting goods & leisure goods Outdoor goods struggled, however, Japanese souvenir and bicycles were contributors.

DIY goods Exterior goods were stagnant due to natural disasters. Tools and parts were stable.
Overseas Fresh foods and Japanese delis were strong. (1USD=¥111.3, 1SGD=¥81.8)
Total discount store business Stable domestic sales mainly daily necessities such as food, and accelerated tax-free(Former Don Quijote HD stores) sales made up strong discount store sales.

Clothing Clearance sale promoted the sales for ladies outer wear and inner.
Beddings and storage boxes were good. Sales for seasonal appliances and gaming
consoles went up sharply.
Processed food such as snacks and daily delivered food were strong. Fruits and fries
Foods
boosted foods sales.
Total GMS business Weak foods sales due to lower vegetable price were offset by robust outer wear and(Former UNY group stores) household goods.

Household goods3The number of storesBreakdown by format(stores)
FY2017FY2018FY2019-Q1

FY2019-Q2

FY2019-Q3

Don Quijote

198

209

212

215

213

MEGA4043434343

New MEGA

72

80

8183

87

MEGA DQ UNY

―

――

―

10

Apita / Piago

――

―

―

182

Picasso

21

23

26

26

26

Kyo-yasu-do

4444

3

mini Piago

――

―

―

74

Doit

1718

1716

15

Nagasakiya

222

22Total stores in Japan

354

379

385

389

655

Overseas

1439

39

40

40

Global Total

368

418

424

429

695

Domestic opening

3255

774

Domestic closure

5512

10Net increase275065(6)(Conversion Store)

4

The number of stores
Breakdown by company(stores)
FY2017FY2018FY2019-Q1

292313

320

325

327

Nagasakiya Co., Ltd. (MEGA)

4043

434343

UD Retail Co., Ltd.

――――

10UNY Co., Ltd. (Apita, Piago)

―――

―

182

Lirack Co., Ltd. (Kyo-yasu-do)

4444

3

99 Ichiba Co., Ltd. (mini-piago)

――

――

74

Doit Co., Ltd. (Doit)

1718171615

Daishin Co., Ltd. (MEGA Omori sanno)

1111

1

Domestic Total

354

379385389

655

DQ USA (Stores in Hawaii)

34433

MARUKAI (California)

11991111

QSI (Hawaii)―

24242424

PPRM (Singapore)

―

2222

Overseas Total

1439394040

Global Total

368

418

424

429

695

Don Quijote Co., Ltd.
(DQ,New MEGA and small format)(MEGA UNY;conversion store from UNY)FY2019-Q2

FY2019-Q3

4

Key components in SG&A
9 months to March 2019

Consolidated(Millions of yen)

9 months to March 2018

ActualShare

YoY

ActualShare

Net sales

918,990

100.0%

130.7%

703,156

100.0%

Salary allowance

75,5068.2%

143.0%

52,791

7.5%

Rent

28,596

3.1%

137.2%

20,846

3.0%

Commission paid

28,344

3.1%

171.6%

16,517

2.3%

Depreciation andamortization

13,802

1.5%

128.5%

10,737

1.5%

Others59,5376.5%

150.1%

39,664

5.7%

SG&A

205,78522.4%

146.4%

140,555

20.0%

 The consolidated SG&A went up by 46.4% largely due to UNY consolidation. Personnel cost and commission paid
increased by expanding the business scale rapidly. One-off cost related to UNY consolidation and initial cost for new stores
were added.
 Without UNY, SG&A would have increased by 13.2%.
(Former Don Quijote Holdings posted its SG&A 159.1 billion yen. /SG&A as a percentage of sales : 20.8%)

5

Sales and profit by business
Sales, profit and loss by segment from Jul.1, 2018, to March.31, 2019
Consolidated

Discount store

GMS

Tenant leasing

Others

Total(Millions of yen)

Adjusted

Consolidated

Sales to externalcustomers

756,449

133,953

24,156

4,432

918,990―918,990

Internal sales or transfers
between segments

2,304

214

1,086

1,337

4,941(4,941)―

758,753 134,167

25,242

Total
Segment profit

39,355

3,141

4,495

5,769 923,931(768)

46,223(4,941) 918,990
109

Sales, profit and loss by segment from Jul.1, 2017, to March.31, 2018
Consolidated

Retail business

GMS

Tenant leasing

OthersTotal

46,332(Millions of yen)

Adjusted

Consolidated

Sales to externalcustomers

689,393―

12,984779

703,156―

703,156

Internal sales or transfers
between segments

1,901

―

1,025

―

2,926

(2,926)―

Total

691,294―

14,009Segment profit

39,906―

2,067

779 706,082(1,916)40,057(2,926) 703,156
340,060 Retail business is separated into “Discount store business” and “GMS (General Merchandize Store) business”
from March quarter of 2019 because UNY and its subsidiaries came under PPIH (Pan Pacific International
Holdings; former Don Quijote Holdings).

6

New segment category
Retail business

Tenant leasing business

Other business

Before（MajorSubsidiaries）

Don NagasaDoit
Quijote kiya

*２

※２

DQ USAMARUKAI

QSI

PPRM

JAM

JCE

D-One

RealitPPIH

PPLAUNY Group

UDR

99 Ichiba

UNY

UCS

*１

After（MajorSubsidiaries）

Discount store business

GMS business

Tenant leasing business

Other business*１. Disclosed business segments were changed from Q3 FYJune 2019 (March quarter). Former “Retail business” is divided into two after consolidating UNY.
(“Discount store business”, and “GMS (General Merchandize Store) business”).
*2．JAM (Japan Asset Marketing) and Realit are included in “Discount store business”.

7Balance Sheet
Consolidated(Millions of yen)

As of March 31,
2019

Change from
June 30, 2018

(Millions of yen)

Consolidated

As of March 31,
2019

Change from
June 30, 2018

Total current assets

494,980

258,367

Total current liabilities

343,398

171,512

Cash and deposits

177,048

105,075

Accounts payable

156,172

63,142

66,10966,109

Short-term liabilities*

43,135

21,731

Merchandise

181,578

45,797

Total noncurrent liabilities

602,269

279,872

Total noncurrent assets

791,078

220,913Long-term bonds

238,458

147,184

Total property, plan and equipment

611,354

263,441

Long-term borrowings

Buildings

264,590131,175

271,101

70,433

Land

317,547

128,681

6,539(5,565)

Total intangible assets

37,2208,973

Total liabilities

945,667

451,384

Goodwill

17,457(143)

Net assets

340,391

27,896

142,504(51,501)

Total shareholders’ equity

319,50728,17080,85334,359Non-controlling interests

19,962(1,825)

1,286,058

479,280

Liabilities and net assets

1,286,058

479,280

Installment account receivable

Total investments and other assets

Lease and guarantee deposits
Total assets

Long-term payables under fluidity
lease receivables* Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds

 Assets: Major reasons for increase in assets were cash and deposits (105.1 billion yen added), notes receivable andaccount receivable (7.6 bil yen), installment account receivable (66.1 bil yen/newly posted due to UNY consolidation),merchandise inventory (45.8 bil yen), tangible assets (263.4 bil yen) and intangible assets (9 bil yen ).
On the other hand, investment and other assets decreased by 51.5 billion yen.

 Liabilities: 398.8 billion yen of liability for UNY and its subsidiaries were consolidated. Total liabilities went up 451.4 billion yen
mostly came from UNY.

8

Cash flows and Capital expenditure(Millions of yen)

9 months to March
2019

Consolidated Cash Flows
Cash and equivalents at beginning of period
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash and equivalents
Cash and equivalents at end of period

75,88393,087(35,992)
56,476
114,086
189,969

9 months to March
2018

78,09425,891(144,716)
119,596375
78,469Change(2,211)
67,196
108,724(63,120)
113,711
111,500(Millions of yen)

Consolidated Capital Expenditures
Capital expenditures
Cash flows*
Net increase (decrease)

9 months to March
2019

37,20057,783
20,5839 months to March2018

34,53834,054(484)

Change2,662
23,72921,067* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend Cash flow from operating activities was 93.1 billion yen positive. Positive factors : 50.0 billion yen of income before income taxes,
16.5 billion yen of depreciation and amortization and 61.0 billion yen of decrease in installment account receivable.
Negative factors : 9.1 billion yen of negative goodwill, 5.9 billion yen of investment gain from equity affiliates, 7.6 billion yen
increase in inventory and 23.2 billion yen for corporate tax payment.
 Cash flow from financing activities was 56.5 billion yen positive. 165.6 billion yen of net increase in long-term bonds, 92.4 billion
yen of net decrease of long-term loans and 5.9 billion yen of dividend payment were major factors.
 Capex was 37.2 billion yen. (DQ:13.8 bil, Nagasakiya:2 bil, UDR:500 mil JAM: 9.9bil). Free cash flow was 20.6 billion yen positive.

9Earnings summary for Q3
3 months to March 2019

Consolidated(Millions of yen)

ActualShare

3 months to March 2018
YoY

ActualShare

Net sales

405,575

100.0%

168.8%

240,326

100.0%

Gross profit

116,506

28.7%

192.8%

60,43925.1%

SGA

100,19124.7%

201.9%

49,626

20.6%

Operating profit

16,3164.0%

150.9%

10,813

4.5%

Recurring profit

16,4284.1%

132.7%

12,383

5.2%

Profit attributable toowners of parent

13,436

3.3%

158.4%

8,485

3.5%

EPS(Yen)

84.90-

158.3%

53.64-10Sales breakdown by product category for Q33 months to March 2019

Consolidated(Millions of yen)

ActualShare

3 months to March 2018
YoY

ActualShare

Other products

20,59757,20189,682
37,987
11,7003,646
27,013
10,473

5.1%
14.1%
22.1%
9.4%
2.9%
0.9%
6.7%
2.6%

103.2%
105.8%
113.3%
99.1%
102.0%
97.0%
113.4%
104.5%

19,95954,074
79,18838,316
11,4703,760
23,814
10,021

8.3%
22.5%
33.0%
15.9%
4.8%
1.5%
9.9%
4.2%

Total discount store business(Former Don Quijote HD stores)

258,299

63.7%

107.4%

240,602100.1%Clothings

17,445

4.3%

―

―

―

Household goods

19,370

4.8%

―

―

―

Foods

92,500

22.8％

―

―

―

Total GMS business(Former UNY group stores)

133,953

33.0%

―

―

―

Tenant leasing business

12,7993.2%

557.2%

2,298

1.0%

Other business

524

0.1%

―

(2,574)(1.1)%

Total sales

405,575

100.0%

168.8%

240,326

100.0%

Home electrical appliances
Miscellaneous household goods
Foods
Watches & fashion merchandiseSporting goods & leisure goods
DIY goods
Overseas11Key components in SG&A for Q3
3 months to March 2019Consolidated(Millions of yen)

ActualShare

3 months to March 2018
YoY

ActualShare

Net sales

405,575

100.0%

168.8%

240,326

100.0%

Salary allowance

35,901

8.9%

191.4%

18,7607.8%

Rent

13,453

3.3%

180.7%

7,443

3.1%

Commission paid

15,5653.8%

290.8%

5,352

2.2%

Depreciation andamortization

6,193

1.5%

159.0%

3,896

1.6%

Others

29,0797.2%

205.1%

14,1755.9%

SG&A

100,19124.7%

201.9%

49,62620.6%

12

Forecast for fiscal June 2019
Consolidated(Millions of yen)

FY2019 previously announced
forecastFY2019 Revised Forecast
Plan

Share

YoY

Plan

Share

Net sales

1,330,000

100.0%

141.3%

1,370,000

100.0%

Gross profit

370,000

27.8%

151.6%

360,000

26.3%

SGA

307,000

23.1%

159.5%

297,000

21.7%

Operating profit

63,0004.7%

122.2%

63,000

4.6%

Recurring profit

67,0005.0%

117.1%

65,0004.7%

Net profit

48,0003.6%

131.9%

48,0003.5%

EPS (Yen)

303.25―131.8%

303.31―Dividend per share

38.00

―

118.8%

38.00―

Capital expenditure

48,000

3.6%

85.6%

48,000

3.5%

Depreciation

20,8001.6%

140.4%

21,0001.5%

 The progress of “Vision 2020” (goals to achieve by FY 2020 set in 2015) is as follows.
Sales : 1 trillion yen (133% achieved), Store count : 500 (140% achieved) and ROE: 15.0% (Q3 ROE was 16.4%)
 Don Quijote SSS forecast : flat for Q4 and +0.8% for full year. (SSS results for the first nine months : 1.0% growth) Capex is likely to be 48 billion yen with 26 organic new stores and 10 UNY conversion stores.

13