NEXT Co.,Ltd.
TSE 1st section 2120

Annual Report ofFinancial Statement

Second Quarter of the Year Ended March 31, 2012

(April 2011 to September 2011)
Opinions and forecasts expressed in this document are those ofmanagement as of the date of publication and management
does not offer any guarantee regarding their accuracy. Please
note that actual business performance and results may differ
materially from such opinions and forecasts due to changes invarious factors.

2nd Quarter Financial Results for the Year Ending March 31, 2012 ・・・pp.2-10
Comparison with Business Forecast for 1H of FY03/2012

・・・pp.11-13

Revision of Business Forecast for the Year ending March 31, 2012 ・・・pp.14-22

NEXT Co., Ltd
TSE 1st section 2120
Accumulated
Total

The Overseas Business Strategy of the NEXT Group

・・・pp.23-24

Company Credo and Business Principles

・・・p.25

Reference Materials

・・・ pp.26-40

Real Estate Information Service “HOME’S”

・・・ pp. 27-28

Reference Data

・・・ pp. 29-31

Approach toward smart devices

・・・p32The Overseas Business Strategy of the NEXT Group

・・・pp.33-34

Future Business Development

・・・ pp. 35-36

Corporate Profile, Shareholder Composition and CSR report ・・・ pp. 37-39
IR Information Contact Details and “IR News”

・・・ p.40

NEXT Co., Ltd. TSE 1st section 2120

2nd Quarter Financial Results for the Year Ending
March 31, 2012
April 2011 to September 2012

Consolidated
Accumulated
total

2nd Quarter Financial Results
for the Year Ending March 31, 2012

Today’s Points

Recorded a year-on-year decrease in sales and profits. Immense impact of“HOME’S Rental & Real Estate Trade”

Sales
Operating profit
Net profit： 4,820 million yen (down 12.6% year-on-year)：251 million yen (down 81.1% year-on-year)： 74 million yen (down 91.7% year-on-year)

The number of properties posted grew dramatically to an average of 3.26 million
during September (+1.54 million year-on-year) due to the change in pricing method
to the pay-per-inquiry fee structure. Largest number of properties to date.
The number of inquiries for “HOME’S Rental & Real Estate Trade” failed toincrease, which meant delays in recording profits. Sales decreased by 23.2%
year-on-year.
The local information service, “Lococom” has been markedly slow to record profits.
Personnel will be downsized from the 2nd Half and services will continue with theminimum number of personnel.
The Full-year Business Forecast has been revised. Starting November, thePresident/Representative Director has taken charge of “HOME’s,” the real estate
information service, and has been reinforcing its operating structure.

3
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

2nd Quarter Financial Results
for the Year Ending March 31, 2012

Consolidated
Accumulated
total

！

Check

Trend of major indicators

Trend of consolidated business performance

Sales (million yen)

Operating profit (million yen)

1,331

5,513

5,077

Quarterly Net profit (million yen)

899

4,820
＋67.1％

797＋8.6％＋106.2％436▲81.1％▲12.6％！

10年3月期
FY03/2010
2Q Accumulated
2Q累計
total
(Apr - Sep)

11年3月期
FY03/2011
2Q Accumulated
2Q累計
total
(Apr -Sep)

12年3月期
FY03/2012
2Q Accumulated
2Q累計
total
(Apr - Sep)

10年3月期
FY03/2010
FY03/2010
2Q
Accumulated
2Q2Q累計Accumulated

11年3月期
FY03/2011
2Q 2Q累計
Accumulated

Check“HOME’S Rental & Real Estate Trade” trend of major indicators

total
total
(Apr
(Apr- -Sep)
Sep)

total
(Apr -Sep)

Number of properties posted(thousand properties)

12年3月期
FY03/2012
2Q Accumulated
2Q累計
total
(Apr - Sep)

Sales per store (yen)3,266▲91.7％

251

74
10年3月期
FY03/2010
2Q2Q累計Accumulated
total(Apr - Sep)

11年3月期
FY03/2011
2Q 2Q累計
Accumulated
total(Apr -Sep)

Number of affiliated stores(stores)

11,389＋89.8％

53,96953,450

10,249

1,721
1,364

50,214▲1.0％＋26.2％
10年3月期
FY03/2010
Averageof Sep
9月度平均

11年3月期
FY03/2011
Averageof Sep
9月度平均

9,308＋11.1％▲6.1％
12年3月期
FY03/2012
Average of Sep
9月度平均

12年3月期
FY03/2012
2Q Accumulated
2Q累計
total
(Apr - Sep)

10年3月期
FY03/2010
Average of 2Q
2Q累計平均(Apr - Sep)

11年3月期
FY03/2011
Average of 2Q
2Q累計平均(Apr - Sep)

12年3月期
FY03/2012
2Q累計平均Averageof 2Q(Apr - Sep)

▲18.3％
10年3月期
FY03/2010
Average of 2Q
2Q累計平均(Apr - Sep)

11年3月期
FY03/2011
Average of 2Q
2Q累計平均(Apr - Sep)

12年3月期
FY03/2012
Averageof 2Q
2Q累計平均(Apr - Sep)

4
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Accumulated
total

2nd Quarter Financial Results
for the Year Ending March 31, 2012

Po i n t

Sales declined 12.6% and SG&A expenses rose 8.7%, resulting in a decline in sales and profits.

Consolidated

Trend of Operating P/L

FY03/2010
2Q (Apr-Sep)

FY03/2011
2Q (Apr-Sep))

Sales

5,077

5,513

4,820

▲ 692

See p. 7▲ 12.6% ⇒for details

Cost of sales

120

95

128

＋ 32

＋ 34.3%

Selling, general & administrative (SG&A)
expenses

4,159

4,085

4,440

＋ 354

＋8.7%

Personnel costs

1,755

1,781

1,653

▲ 128

▲ 7.2% *1

Advertising costs

943

979

1,154

＋ 175

＋ 17.9% * 2

270

188

104

▲ 83

▲ 44.7% * 3

175

159

243

＋ 83

＋ 52.5% * 4

71

67

15

▲ 52

▲ 77.4% * 5

944

909

1,268

＋ 359

＋ 39.6% * 6

Operating profit

797

1,331

251

▲ 1,080

Net profit

436

899

74

▲ 825

▲ 91.7% * 7

Operating profit margin (OPM)

15.7%

24.2%

5.2%

▲ 18.9p―

Unit: million yen

Operating expense
Depreciation/amortization cost
Allowances of uncollectible receivables
and performance guarantee
Other selling, general & administrative(AS&A) expenses

FY03/2012
2Q (Apr-Sep)

Change(year-on-year)

Percentage change(year-on-year)▲ 81.1%* The guarantor operating business, from which the Company withdrew in the 2Q of FY ended March 31, 2011, recorded sales of 268 million yen, SG&A expenses of 248
million yen and operating profit of 20 million yen in the previous fiscal year.
*1 The average consolidated number of employees during the 2Q stood at 582 (a decrease of 3 year-on-year), including 23 new graduates (no change year-on-year). The
guarantor operating business recorded personnel costs of 93 million yen (Average number of employees during the period: 66) in the previous fiscal year.
*2; In the real estate information services, costs for listing advertising and SEO processes contributing directly to attracting customers increased by 82 million yen. In thelocal information services, such costs rose by 54 million yen. Costs for new businesses increased by 37 million yen.
*3 Decrease of 42 million yen due to the withdrawal from the guarantor operating business*4 Increase of 74 million yen due to the relocation of the head office and the depreciation of assets to be retired. Increase of 19 million yen in amortization of software due tothe renewal of Lococom.
*5 Decrease of 56 million yen due to the withdrawal from the guarantor operating business*6 Other AS&A expenses increased by 318 million yen due to the relocation of the head office, and 16 million yen due to the launch of new businesses.
*7 In the previous fiscal year , the Company recorded extraordinary losses of 331 million yen (22 million yen in prior-year depreciation costs due to the recording of asset
retirement obligations, 74 million yen in provision for relocation of the head office and 229 million as loss on sales of shares of NFS Co., Ltd.). In the fiscal year underreview, the Company recorded an extraordinary loss of 113 million yen (113 million yen in impairment losses of software of Lococom Services).

5
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t
Unit:
Millionyen
6,000

2nd Quarter Financial Results
for the Year Ending March 31, 2012

Trend of cost to sales ratio

Each ratio has worsened due to decreased sales and increased costs incurred in therelocation of the head office.
AmountFY03/2010
2Q (Apr-Sep)

FY03/2011
2Q(Apr-Sep)

Breakdown
FY03/2012
2Q (Apr-Sep)

FY03/2010
2Q (Apr-Sep)

5,000

31.1%

1,420
1,581

1,760
979

1,781

1,653

1,000
797

251
FY03/2011 2Q(Apr-Sep)

FY03/2012 2Q(Apr-Sep)

32.3%

40%

Advertising
costs

0%

8.2p
Deterioration34.6%

Personnel
costs

34.3%

20%
10%

1,331

23.9%

17.8%

30%

1,755

36.5%

Cost andother SG&A
expenses

18.6%

50%
1,154

FY03/2010 2Q(Apr-Sep)

10.8p
Deterioration

70%

60%

943

2,000

25.8%

80%

4,000

0

FY03/2012
2Q(Apr-Sep)

100%
90%

3,000

FY03/2011
2Q(Apr-Sep)

24.1%

15.7%
5.2%
FY03/2010 2Q(Apr-Sep)

FY03/2011 2Q(Apr-Sep)

OperatingprofitFY03/2012 2Q(Apr-Sep)

In ”Cost and other SG&A expenses ratio”(pink), despite the approx. 160 million yen decrease in expenses due to the withdrawal from the guarantor operating business,costs for relocation of the head office increased.
“Advertising costs ratio” (green) increased by 82 million yen in real estate information services and by 54 million yen in local information services, and decreased by 37
million yen in others.
“Personnel costs ratio” (blue) decreased due to the withdrawal from the guarantor operating business. Personnel costs decreased by 21 million in the real estate
information services; increased by 81 million yen in the local information services; and decreased by 61 million yen in others*As a basic rule, we intend to maintain a personnel costs to sales ratio of approx. 30% and an advertising costs to sales ratio of approx. 20%.

6
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

2nd Quarter Financial Results
for the Year Ending March 31, 2012

Consolidated
Accumulated
total

Trend of sales by service

Sales decreased overall, as Other services failed to cover the decrease in sales of Rental & Real
Estate Trade

Po i n t

FY03/2010
2Q(Apr-Sep)

Unit: Million yen

FY03/2011
2Q(Apr-Sep)

FY03/2012
2Q (Apr-Sep)

Change(year-on-year)

Percentage change(year-on-year)

Consolidated sales

5,077

5,513

4,820

▲ 692

▲ 12.6%

Real estate information services

4,721

5,215

4,776

▲ 439

▲ 8.4%

Rental & Real Estate Trade

3,319

3,651

2,804

▲ 847

▲ 23.2%*1

New Condominium

523

525

681

＋ 156

＋ 29.7%*2

New Houses

378

451

639

＋ 187

＋ 41.6%*3

Custom Built House andRenovation

199

243

266

＋ 22

＋ 9.4%

Renter’s Network

145

164

185

＋ 20

＋ 12.7%

Note2

155

177

197

＋ 20

＋ 11.5%Note 3

15

16

14

▲2

▲ 12.6%

Note4

334

268

―

―

―

Note5

4

12

29

＋ 17

＋ 141.3%

OthersLocal information services
business
Real estate lease warrant
business

Others*4Note 1: All inter-segment transactions have been offset and eliminated.
Note 2: “Others” in Real estate information services comprise “HOME’S Estimation for Relocation,” “HOME’S Elderly Care Service” and HOME’S-derived businesses,
among others.
Note 3: Local community services changed its name to Local information services. Sales from this segment comprise sales from “Lococom.”
Note 4: With the sale of all shares in NFS Co., Ltd., our consolidated subsidiary, on August 2, 2010, we withdrew from the business concerned, which was excluded
from the consolidated accounts starting from the second quarter of the year ended March 31, 2011.
Note5: “Others” comprise “MONEYMO,” “eQOL Skincare” and “Casualty insurance agency business,” among others.

*1: Sales decreased due to the change in the pricing method. Although the number of properties increased dramatically, it did not lead to the increase ininquiries. Cancellation of membership also increased due to the change in the pricing method.
*2: Sales of special products, including special feature pages were strong.
*3 : The number of houses posted increased by 36.1% year-on-year.
*4: MONEYMO and eQOL Skincare were launched in February 2011.

7
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

2nd Quarter Financial Results
for the Year Ending March 31, 2012

Trend in P/L by segment

Decreased profit in all segments due to decreased sales and increased costs from the relocationof the head office

Po i n t
Unit:
Million yen
1,500

FY03/2011
2Q (Apr-Sep)

FY03/2012
2Q (Apr-Sep)

19

1,300
1,100
900
700

1,489

500

890

300
100
▲100
▲300

▲160
▲17

▲430

Year-on-year
Unit: Million yen

FY03/2011
2Q (Apr-Sep)

FY03/2012
2Q (Apr-Sep)

ChangePercentagechangeReal estate
information service

1,489

890

▲ 599

▲40.2%

Local information
services

▲ 161

▲ 430

▲ 268

―

Real estate leasewarrant

20

―

▲ 20

―

Others

▲ 17

▲ 208

▲ 191

―

Consolidated
operating profit

1,331

251

▲ 1,080▲81.1%*1 Percentage change is not stated, if losses were recorded in the previous fiscal
year or the current fiscal year
*2 Real estate lease warrant was excluded from the consolidated accounts startingfrom the second quarter of the previous fiscal year.
Real estate information service

▲500
▲700

▲208
FY 03/2011 2Q(Apr-Sep)

FY 03/2012 2Q(Apr-Sep)

Local information services
Real estate lease warrant
Others“Real estate information service” (orange) recorded a substantial fall in profits as a result of decreased sales of 439 million yen and increases inadvertising costs and rent due to the relocation of the head office.
”local information services” (blue) recorded a decrease in profits due to the increase in personnel and the implementation of various promotions
intended to make this business profitable.
“Real estate lease warrant business” (green) after recording an operating profit of 20 million yen in the 1Q of FY 03/2011, recorded zero profits, as aresult of the Company’s withdrawal from the business. ：”Others” (pink) recorded increased costs for the new businesses “MONEYMO” and “eQOL Skincare.”8
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t
Unit: Million yen

2nd Quarter Financial Results
for the Year Ending March 31, 2012

Consolidated balance sheet
and goodwill

Assets decreased due to the decline in sales. The Company continued to have zero interest
bearing debt.
Sep. 30, 2011

March 31, 2011 【End 2Q FY03/2012】

PercentagechangeChangeAssets

9,711

9,184

▲ 526

▲ 5.4%

Current assets

6,841

6,555

▲ 285

▲ 4.2%

Fixed assets

2,869

2,628

▲ 240

▲ 8.4%

1,595

1,107

▲ 488

▲ 30.6%

Current
liabilities

1,355

867

▲ 488

▲ 36.0%

Fixed liabilities

240

240

＋

0

＋ 0.1%Net assets

8,115

8,077

▲ 38

Net assets
per share

432.77 yen

425.82 yen▲ 6.95

Liabilities

Main reasons for change*1

Increase in cash:
Decrease in accounts receivable:
Decrease in securities:
Decrease of corporate taxes
receivable:
Software, etc.

1,820 million yen /Increase in current assets
121 million yen/Decrease in current assets
1,510 million yen/Decrease in current assets
359 million yen/Decrease in current assets
117 million yen/Increase in fixed assets*3

Accounts payable-other
Increase in accrued corporate tax
and consumption tax
Decrease in allowance for bonuses
Interest bearing debt

338 million yen/Decrease in current liabilities
58 million yen/Increase in current liabilities*4▲ 0.5%

Decrease in accumulated income

36 million yen/Decrease in net assets▲ 1.6%*Effective October 1, 2011, the Company conducted a 1:100 stock split.
Consequently, net assets per sharer are calculated by dividing net assets by the total
number of issued stocks after said split.

*2

188 million yen/Decrease in current liabilities
Zero

Unit: thousand yen

Goodwill amortization status

Total amountof goodwill

Beginning of period
residual value

April to September 2011amortization amountResidual value

Number ofmonthsoutstanding

Amortization completion
date

The former Willnic

50,00010,000

5,000

5,000

6 months

March 2012

The former Littel

216,738

216,738

21,673

195,065

54 months

March 2016

* Willnic Co., Ltd. and Littel Co., Ltd. were merged into the Company through absorption on July 1, 2010 and on April 1, 2011, respectively, with the Company as the surviving company*1: Main reasons for increase in cash: Increase due to refunds of corporate tax and cancellation of Free Financial Fund (FFF) and decrease due to the payment
of dividends.
*2: The main reason for decease in securities: Cancellation of FFF*3: Decrease due to the recording of impairment losses on Lococom*4: The main reason for the decrease in accounts payable-other: Advertising listings and system usage fees decreased as the peak season came to an end.

9
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t

2nd Quarter Financial Results
for the Year Ending March 31, 2012

Consolidated cash flow

Balance of cash and cash equivalents at the end of the 2Q was 3,000 million yen; 5,000 million yen, iftime deposits were included.

Unit: Million yen

Previous year
FY03/2011
2Q (Apr-Sep)【Current year】
FY 03/2012
2Q (Apr-Sep))

Main items

ChangePrevious year
FY03/2011
2Q (Apr-Sep)【Current year】
FY 03/2012
2Q (Apr-Sep

1,005
159
―
229
30

153
244
113
―
148

Profit before tax
Depreciation/amortization cost
Loss on impairment

Operating CF

＋ 632

＋ 595

▲ 36

Loss on sale of stocks of affiliates
Increase/decrease in accounts receivable
Increase/decrease in accounts payable-

▲

50

▲

673

347

Acquisition of tangible fixed assets

▲ 92

▲ 30

Acquisition of intangible assets

▲ 125

▲ 147

―

2,000

▲ 755

―

▲ 119

▲ 109

other
Corporate Tax

Cash outflow due to depositing cash in

Investment CF▲ 1,042▲ 2,177▲ 1,135▲

302

time deposit
Cash outflow due to sale of shares insubsidiary that involves a change in scopeof consolidation (*1)

Financial CF

▲ 124

▲ 107

＋ 16

Increase/decrease in
cash and cash
equivalents▲ 534▲ 1,690▲ 1,155

Balance of cash andcash equivalents

5,954

3,017
(*2)

▲ 2,936

Payment of dividend(*1) Sales of shares in subsidiary refer to the transfer of the shares of NFS Co., Ltd.

(*2) 5,017 million yen, if time deposits are included.

10
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

NEXT Co., Ltd. TSE 1st section 2120

Comparison with Business Forecast for 1H
of FY03/2012

Consolidated
Accumulated
total

Po i n t

Comparison with Business Forecast
for 1H of FY03/2012

Trend of operating P/LOperating profit secured by compensating for decreased sales through efforts to cut costs andreexamining investments in new businesses

Unit: Million yen

ActualFY03/2012
1H (Apr-Sep)

Forecast/Actual Comparison for 1H of
FY03/2012

Forecast
FY03/2012
1H (Apr-Sep)

Variance

Variance ratio

Sales

4,820

4,966

▲ 146

▲ 3.0%

Cost of sales

128

128

▲0

▲ 0.1%

Selling, general & administrative (SG&A)
expenses

4,440

4,991

▲ 551

▲ 11.0%

Personnel costs

1,653

1,846

▲ 192

▲ 10.4%Advertising costs

1,154

1,202

▲ 47

▲ 3.9%

Operating expense

104

179

▲ 74

▲ 41.9%Depreciation/amortization cost

243

251

▲7

▲ 3.1%

15

23▲8▲ 35.4%

1,268

1,488

▲ 220

▲ 14.8%Operating profit

251

▲ 153

＋ 404

―

Net profit

74

▲ 115

＋ 190

―

Operating profit margin

5.2%▲ 3.1%＋ 8.3p―Allowance of uncollectible
receivables and performance
guarantee
Other SG&A expenses⇒Seenext page*1*2*1: Decrease as a result of unused operating expenses in the amount of 15 million yen in Real estate information services, 7 million yen in local
information services and 12 million yen in corporate.
*2: Approximately 50 million yen in recording of expenses in different reporting periods and overall cost reductions

12
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t

Comparison with Business Forecast
for 1H of FY03/2012

Trend of sales by service

Although Other services performed strongly, sales from Rental & Real Estate Trade fell short ofpredictions.
ActualFY03/2012
1H (Apr-Sep)

Unit: Million yen

Forecast
FY03/2012
1H (Apr-Sep)

Forecast/Actual Comparison for 1H
of FY03/2012
Variance

Variance ratio

4,820

4,966

▲ 146

▲ 3.0%

Real estate information services

4,776

4,823

▲ 46

▲ 1.0%

Rental & Real Estate Trade

2,804

2,989

▲ 184

▲ 6.2%New Condominium

681

701

▲ 19

▲ 2.8%New Houses

639

560

＋ 78

＋ 14.0%

Custom Built House andRenovation

266

248

＋ 18

＋ 7.5%

Renter’s Network

185

182

＋3

＋ 1.9%

Note 2

197

140

＋ 56

＋ 40.3%

Local information services

Note 3

14

69

▲ 55

▲ 79.5%*3

Others

Note 5

29

74

▲ 44

▲ 59.9%*4

Consolidated sales

Others*1*2Note 1: All inter-segment transactions have been offset and eliminated.
Note 2: Others” in Real estate information services comprise “HOME’S Estimation for Relocation,” “HOME’S Elderly Care Service” and HOME’S-derived businesses, among
others.
Note 3: Local community services changed its name to Local information services. Sales from this segment comprise sales from “Lococom.”
Note 4: With the sale of all shares in NFS Co., Ltd., our consolidated subsidiary, on August 2, 2010, we withdrew from the business concerned, which was excluded from theconsolidated accounts starting from the second quarter of the year ended March 31, 2011.
Note5: “Others” comprise “MONEYMO,” “eQOL Skincare” and “Casualty insurance agency business,” among others.
*1: Although the number of properties increased drastically, the number of inquiries fell short of predictions.
*2: The number of properties posted increased by 36.1% year-on-year, resulting in sales that exceeded predictions.
*3: Although we successfully cultivated new stores, the number of users failed to increase and sales fell short of predictions.
*4: The number of customers from the MONEYMO site, the number of insurance consultations and the number of requests for materials fell short of predictions.

13
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

NEXT Co., Ltd. TSE 1st section 2120

Revision of Business Forecast
for the Year ending March 31, 2012

Consolidated
Forecast

Po i n t

Revision of Business Forecast
for the Year ending March 31, 2012

Revision Summary

Business forecasts for sales, operating profit and net profit revised downward by 15.7%, 58.7%
and 69.9%, respectively
Unit: million yen【Reference】
FY03/2011(Actual)Previously
Revised forecast
announced forecast
FY 03/2012
FY03/2012

ChangePercentagechange10,738

11,7399,899▲ 1,840▲ 15.7%

Cost of sales

229

287

327

＋ 39

＋ 13.7%

Selling, general & administrative (SG&A)
expenses

8,759

10,0799,004▲ 1,074▲ 10.7%

Personnel costs

3,507

3,524

3,048

▲ 475

▲ 13.5%*2

Advertising costs

2,460

2,568

2,647

＋ 79

＋ 3.1%*3

Operating expense

313

481

266

▲ 214

▲ 44.6%*3

Depreciation/amortization cost

367

514

485

▲ 28

▲ 5.5%

Allowances of uncollectible receivables andperformance guarantee

81

40

0

▲ 40

▲ 99.2%Other selling, general & administrative(AS&A) expenses

2,028

2,950

2,555

▲ 394

▲ 13.4%*4Operating profit

1,749

1,372

567

▲ 804

▲ 58.7%*5

Net profit

1,107

773

233

▲ 540

▲ 69.9%Operating profit margin (OPM)

16.3%

11.7%

5.7%

▲ 6.0p

―

Sales

*1

*1: For sales by segment/services, see page 27.
*2: Additional recruitment of personnel, which was planned for the new businesses and mainly in the Local information services “Lococom,” will be cut back.
*3: In order to maximize sales, a portion of the costs that were cut back will be injected into advertising costs of the Real estate information services.
*4: We will reexamine investments in businesses and make company-level efforts to cut costs.
*5: Although a decrease in sales is predicted, recording of profits is expected through cost cuts and other efforts.

15
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t

Revision of Business Forecast
for the Year ending March 31, 2012

Trend of cost to sales ratio

While cost cuts and reexamination of investments are planned, the operating profit margin is expected
to fall by 6.0% due to the drastic decrease in sales.
AmountUnit:
Million yen

FY03/2011 Actual

Breakdown

FY03/2012
FY03/2012
Previous forecast Revised forecast

FY03/2011
ActualFY03/2012
FY03/2012
Previous forecast Revised forecast

12,0000.3p
Deterioration100%

10,000
3,020

3,635
2,460

60%

3,048

2,000
1,749
0

21.9%

FY03/2011 Actual

1,372
FY03/2012 Previous
forecast

40%
30%

3,524

0%

5.6p
Deterioration

26.7%

32.7%
30.0%

30.8%

20%
10%

567
FY03/2012
Revised forecast

36.7%

22.9%

50%

3,507

36.4%

70%

2,568
2,647

4,000

28.1%

80%

8,000

6,000

90%

4,274

Cost andother
expenses

16.3%

Advertising
costs

Personnel
costs

11.7%

5.7%
FY03/2011 Actual FY03/2012 Previous FY03/2012 Revised
forecast
forecast

Operatingprofit: “Cost and other expenses ratio” (pink) is likely to deteriorate by 0.3p. Expenses will be held back through cost cuts and reexamination of investments.
: “Advertising costs ratio” (green) is likely to deteriorate by 4.8p. Despite the decrease in sales, a slight increase in advertising costs is planned in order to maximize
sales.
:”Personnel costs ratio” (blue) is likely to deteriorate by 0.8p. Personnel costs will be held back by discontinuing the personnel increases at “Lococom,” the local
information services and by cutting back on personnel.
: “Operating profit ratio” (orange) is likely to deteriorate by 6.0p. Although cost cuts and reexamination of investments are planned, operating profit ratio is expected
to deteriorate as a result of a drastic decrease in sales.
*As a basic rule, we intend to maintain a personnel costs to sales ratio of approx. 30% and an advertising costs to sales ratio of approx. 20%.

16
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t

Revision of Business Forecast
for the Year ending March 31, 2012

Trend of sales by service

13.5% decline in Rental & Real Estate Trade, 97.2% decline in local information services
expected【Reference】
FY03/2011(Actual)Previously
announced
forecast
FY03/2012

Revisedforecast
FY 03/2012

Consolidated sales

10,738

11,7399,899▲ 1,840▲ 15.7%

Real estate information services

10,407

10,502

9,755

▲ 746

▲ 7.1%

Rental & Real Estate Trade

7,096

6,596

5,708

▲ 888

▲ 13.5%*1

New Condominium

1,131

1,505

1,348

▲ 157

▲ 10.5%*2

New Houses

994

1,149

1,318

＋ 169

＋ 14.7%

Custom Built House andRenovation

501

515

574

＋ 58

＋ 11.4%

Renter’s Network

331

391

382

▲8

▲ 2.3%

Note 2

351

344

424

＋ 79

＋ 23.1%

Note 3

35

928

26

▲ 902

▲ 97.2%

Note 4

268

－

－

－

－

Note 5

26

308

117

▲ 190

▲ 61.8%

Unit: Million yen

OthersLocal information services
business
Real estate lease warrant
business

OthersPercentagechangeChange*3Note 1: All inter-segment transactions have been offset and eliminated.
Note 2: Others” in real estate information services comprise “HOME’S Estimation for Relocation,” “HOME’S Elderly Care Service” and HOME’S-derived businesses,
among others.
Note 3: Local Community Services changed its name to Local information services. Sales from this segment comprise sales from “Lococom.”
Note 4: With sale of all shares in NFS Co., Ltd., our consolidated subsidiary, on August 2, 2010, we withdrew from the business concerned, which was excluded
from the consolidated accounts starting from the second quarter of the year ended March 31, 2011.
Note5: “Others” comprise “MONEYMO,” “eQOL Skincare” and “Casualty insurance agency business,” among others.
*1: Although the number of properties increased drastically, the number of inquiries fell short of predictions and consequently forecasted sales have undergone adownward revision.
*2: Although sales are expected to increase compared to the previous year due to strong sales of special products, including special feature page, plans are
expected to fall short of predictions.
*3: Forecast for sales has undergone a downward revision due to the number of coupon users falling drastically short of predictions.

17
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Forecast

Revision of Business Forecast
for the Year ending March 31, 2012

Dividend forecast

Dividend ratio of 15% starting from this year. The dividend will be adjusted to 1.90 yen, in line withthe adjustment of net profit.

Po i n t

ItemPrevious forecast(August 19, 2011)

Revised forecast

Annual dividend(Forecast)

6.20 yen

1.90 yen

Consolidated net
profit

773 million yen

233 million yen

Dividend ratio

15.0％

15.3％

！

Check

Our basic policy on profit allocation
We strive to develop our business aggressively
and grow profit continuously. At the same time, we
identify the return of profits to shareholders as oneof the important corporate management policies
while focusing on “retained earnings” and“investment for future growth” that are aimed atenhancing and strengthening the Company’s
financial structure.

With respect to dividend, it is our basic policy toflexibly allocate the fruit of our endeavors
according to the results of each accounting period
in consideration of our medium- to long-termbusiness plan.

* The amount of “ordinary dividend” is subject to change according to the actual consolidated net profit (dividend ratio of 15%)

18
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Accumulated
total

Revision of Business Forecast
for the Year ending March 31, 2012

Po i n t

Although the number of properties has been increasing, the number of inquiries has failed to grow.

Consolidated

Current Status
Number of properties

・Number of properties has been increasing
・September averaged 3.26 million properties(highest on record)

Current status and issues/ measures(HOME’S Rental & Real Estate Trade)

OutcomeIssues/Measures○

・Improved searches due to the increase in number ofproperties
・Thoroughly publicize the fact the Company has thelargest number of properties in Japan.

△

・Conduct efficient advertising.
・Reinforce capture of smart phone users.
・Expand the reach by using such media as social
media (SNS).

Number of Unique Users(Number of UU)

・Number of Unique Users has remained
approximately the same.

Affiliated stores

・Number of withdrawals has bottomed out.

△

・Propose effective posting methods.
・Continue activities for better understanding of the
pay-per-inquiry fee structure.

・Despite ongoing upgrades to the website, theconversion rate (leading to inquiries) has not
improved.

×・Continue with meticulous revamping of the website.

×・Maximize the number of inquiries.
・Expand sales of optional products toward the peakseason.

Number of inquiries

Sales

・Number of inquiries fell short of the plan.
・Sales of optional products fell short ofpredictions.

Increase exposure on SNS and various devices.
Reinforce follow-ups on customers. Expand sales of
optional products.
19
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t

Measures (HOME’S Rental & Real
Estate Trade)

Revision of Business Forecast
for the Year ending March 31, 2012

Thoroughly publicize the fact that the Company has 2-3 times as many property postings as othercompanies.

*Number of rental and real estate postings on major real estate portal sites( Unit : million properties)(Findings by the Company as of beginning of October 2011)

Name of company

The Company

Company A

Company B

Company C

Number of property
1.22
1.68
1. 25
postings
リスティング広告、SEO、提携ポータルサイト、SNS、スマートフォン向け広告・・・等

3.37

Listing
advertising

SEO

Mobile phone
portalSNS

Exposure on various
devices(Such as smart phones)

In order to appeal to the customers with Japan’s largest
number of properties posted, advertising methods will be
expanded and efforts will be made to increase theCompany’s visibility among as many users as possible.
20
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t

Measures (HOME’S Rental & Real
Estate Trade)

Revision of Business Forecast
for the Year ending March 31, 2012

10 months since the transition to the pay-per-inquiry fee structure. Starting to win the understanding of
the affiliate stores.

Mar. 2011

 Number of withdrawals ofaffiliated stores hasbottomed out.
 We are also starting to win
the understanding of theaffiliate stores toward the
pay-per inquiry fee
structure.

Mar. 2010

Number of Affiliated StoresMar. 2012

Unit :stores

Apr.

May.

Jun.

Jul.

Oct.

Sep.

Oct.

Nov.

Dec

Jan.

Feb.

Mar.

(Excerpt from announcement on “HOME’S” business performance for September FY03/2012)【Comments of affiliate stores】(Company A)
Previously, we only posted properties, which were expected to receive
responses; but now we can post all properties under management, andresponses have increased. More than ever before, nearly 30% moreusers are coming to the stores saying they saw that property on“HOME’S.” We are expanding exposure of our high priority properties byusing the “Special advertising point” option.

(Company B)
As other companies are also able to post large numbers of properties,
there is a greater sense of differentiation. We are more focused on thequality of information, we are becoming more creative with the remarks
columns and copies, and improving content.

(Company C)
As a result of being able to post all properties, we can appeal to the users
regarding the number of properties being handled in the region, while atthe same time appeal to the owners, showing them how many properties
we are managing.

(Company D)
Since “response = payment,” there is a stronger awareness toward closing
contracts within the company.

(Excerpt from an article in Shukan Jutaku dated October 31, 2011)21
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Consolidated
Accumulated
total

Po i n t

Revision of Business Forecast
for the Year ending March 31, 2012

Current status and issues/ measures (local
information services)

Although this business has been slow to post profits, services will continue, in preparation for thegrowth of the Online to Offline (020) market
Current Status

OutcomeIssues/Measures

Number of check-ins

・The act of “Check-in,” which utilizes location
information is not catching on and growth isslower than predicted.

Total of 51,958 times
by the end of Sep.

・Continue with the low-cost, tie-up promotion.
・Increase the number of daily users.

Number of word-ofmouths

・Although the number of word-of-mouths
End of Mar.
End of Sep.
increased by approx. 50,000 in 6 months, and
16,00021,000a certain level of success has been achieved ,(＋28.5%)it has not reached planned levels.

・Increase the number of word-of-mouths bycollaborating with social media including,
Twitter, Facebook, and mixi.
・Conduct ongoing updates.
Improve convenience for smart phoneusers.

Number of application
downloads

・iPhone APPs were launched on April 21.
・Over 100,000 downloads in under 3 months.

Total of 114,586
by the end of Sep.

Number of stores・Through the increase of sales personnel andcollaboration with other companies, thenumber of registered stores has increased
drastically and targets have been achieved.

1,972 storesby the end of Sep.
(Achievement rate of 160%)

・Conduct efficient capture of stores using
agency measures.

Sales

・Not enough stores that issue coupons.
・Procedures for using coupons are complex.
・Slow to record profit.

14 million yen
by end of Sep.

・As the method of using the GPS-linked
coupons was difficult, the pay-per-inquiry
was abandoned and a monthly standard fee
was adopted.

Concentrated injection of human resources in 1 H, full-renewals and new store
cultivations were conducted.

Personnel will be decreased to 1/5 and the operations will bemaintained with a minimum number of personnel
22
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

NEXT Co., Ltd. TSE 1st section 2120

The Overseas Business Strategyof the NEXT GroupConsolidated
Accumulated
total

Po i n t

The Overseas Business Strategy of theNEXT Group

Progress in the Overseas
Business

As the first step toward becoming a Global Company, preparations are underway to commencebusinesses in Thailand and China.
Establishedsubsidiary(HOME'SPROPERTY MEDIA)

1. Kingdom of Thailand

A number of employees havebeen dispatched to Thailand toprepare for the commencement ofbusiness

Business commencement date:
Scheduled for January 2012
Type of company: Subsidiary (99.9%)
Service to be provided: Real estate
information service

Sep

2. People’s Republic of China
Business commencement date:
Scheduled for January 2012
Type of company: Equity method
affiliate (39% equity investment
planned)Service to be provided: Real estate
information service

Oct

Nov

Dec

Commencement ofreal estate information
service in Thailand(planned)Jan

Commencement of realestate information
service in China(planned)・Acquisition of Real Estate Mobile
Inc. (“REM”) shares (planned)
・Joint equity investments in Next
Property Media Holdings Ltd. with
REM (planned)24
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Company Credo and Business Principles

Company

Credo

Altruism“”.

This idea will aim at all the directions.

Business Principles of NEXTWe will always go forward to build asocial mechanism through which more
people can receive“” and “”25
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

NEXT Co., Ltd. TSE 1st section 2120

Reference
Materials
Reference Materials ・・・pp.26-40
Real Estate Information Service “HOME’S”

・・・ pp. 27-28

Reference Data

・・・ pp. 29-31

Approach toward smart devices

・・・ p. 32

The Overseas Business Strategy of the NEXT Group・・・ pp. 33-34

The concept of our future business development

・・・ pp. 35-36

Corporate Profile, Shareholder Composition and CSR report・・・ pp. 37-39

IR Information Contact Details and “IR News”

・・・ p.40

26
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Real Estate Information Service “HOME’S”
Point“HOME’S” business model: Fee structure based on the number of inquiries

CustomerNEXT (“HOME’S”)

User

Inquiry
View information
Make inquiry(Rental & Real Estate Trade)

Post property
information
Real estate broker
Real estate
managementcompany(Rental & Real Estate
Trade)

Upper: PC site

(Standard fee plus charge onsome options)View information
Make inquiry

Inquiry

Developer

Register property
information
Register company
information andconstruction workcase examples

Home builder
Building contractor
Remodeling
contractor

Left: Mobile site
Right: Smart phone application

Free

Charge27
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Real Estate Information Service “HOME’S”
Point！

Determined a new pricing structure of “HOME'S” to be implemented as of January 2011 to pursue
advance of property coverage additionally.
CheckStandard membership fee is reduced and objects posted is free of charge. Pricing scheme will bechanged to service fee of charging on inquiry
Old major pricing structure

Revision■ Monthly standard fee
15,000 yen■ Additional fee for posting+30 objects 15,000 yen ■ Optional products
Listed per productNew pricing structure (Method of charging on inquiry)■ Monthly standard fee
10,000 yen■ Additional fee for posting
None (Basically, there is no limit in the number of objects posted)■ Price of charging on inquiry (per e-mail/telephone call)
Rent: 2.0 to 5.5% of the rent (*1)
Sales/Investment: 0.01 to 0.05% of the property price (*2)
■ Optional products Listed per product (no change)*1 5.5% for 1 to 15, 4.0% for 16 to 60, and 2.0% for 61 and over.
*2 0.05% for 1 to 5, 0.02% for 6 to 20, and 0.01% for 21 and over

！

Check

Aiming at further improvement of property coverage

Point

1. It will be easier to post properties with free charge for posting.
2. It will be easier to entry and continue the use by reducing the standard price.
3. The price gap in the community will be leveled off by changing the price structure corresponding to the rent /price of the property.

Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

28

Reference Data

Profit and loss statement / Number of Properties Posted andAffiliated Stores of Rental & Real Estate Trade

Unit: million yen

Previous year

Current year

FY03/2011 2Q(Apr-Sep)

FY03/2011 2Q(Apr-Sep)

Amountshare

AmountComparison

share

ChangePercentage change

5,513

100.0%

4,820

100.0%

△692

5,215

94.6%

4,776

99.1%

△439

△8.4%

Rental & Real Estate Trade

3,651

66.2%

2,804

58.2%

△847

△23.2%New Condominium

525

9.5%

681

14.1%

New Houses

451

8.2%

639

13.3%

Custom Built House and Renovation

243

4.4%

266

5.5%

Renter’s Netw ork

164

3.0%

185

3.8%

Others

177

3.2%

197

4.1%

＋156
＋187
＋22
＋20
＋20

＋29.7%＋41.6%＋9.4%＋12.7%＋11.5%

Local information services business

16

0.3%

14

0.3%

△2

△12.6%

Real estate lease w arrant business

268

4.9%

0

0.0%

△268

△100.0%

Others

12

0.2%

29

0.6%

Cost of sales

95

1.7%

128

2.7%

＋17
＋32
＋505
＋22
＋175

＋141.3%＋34.3%＋12.4%＋1.3%＋17.9%

Consolidated sales
Real estate information services

Selling, general & administrative (SG&A) expenses△12.6%

4,085

74.1%

4,591

95.2%

Personnel costs

1,781

32.3%

1,804

37.4%

Advertising costs

979

17.8%

1,154

23.9%

Operating expense

188

3.4%

104

2.2%

△83

△44.7%

Depreciation/amortization cost

159

2.9%

243

5.0%

＋83

＋52.5%

Allow ances of uncollectible receivables and performance guarantee
Other selling, general & administrative (AS&A) expense
Operating profit
Net profit

Unit : properties

Sept. 30, 2010

Sept. 30, 2011

End 2Q
FY03/2011

End 2Q
FY03/2012

67

1.2%

15

0.3%

△52

△77.4%

909

16.5%

1,268

26.3%

＋359

＋39.6%

1,331

24.1%

100

2.1%

△1,231△92.4%

899

16.3%

△14

△0.3%

△914

△101.7%Comparison
ChangePercentagechangeUnit : storesSept. 30, 2010

Sept. 30, 2011

End 2Q
FY03/2011

End 2Q
FY03/2012

Comparison
ChangePercentagechange△1,654△14.9%

Number of Properties Posted

1,712,390

3,253,239＋1,540,849＋90.0%

Number of Affiliated Stores

11,0809,426

Hokkaido & Tohoku

75,955

169,501＋93,546＋123.2%

Hokkaido & Tohoku

242

234

△8

△3.3%

North Kanto

66,095

100,437＋34,342＋52.0%

North Kanto

253

236

△17

△6.7%

Capital Region

917,814

1,378,973＋461,159＋50.2%

Capital Region

7,719

6,319

△1,400△18.1%

Hokuriku & Koshinetsu

29,291

66,639＋37,348＋127.5%

Hokuriku & Koshinetsu

150

152

＋2

＋1.3%

Tokai

134,258

303,786＋169,528＋126.3%

Tokai

405

334

△71

△17.5%

Kinki

356,552

879,335＋522,783＋146.6%

Kinki

1,807

1,726

△81

△4.5%

Chugoku

30,204

108,195＋77,991＋258.2%

Chugoku

125

106

△19

△15.2%

Shikoku

18,14062,777＋44,637＋246.1%

Shikoku

94

97

＋3

＋3.2%

Kyushu & Okinaw a

84,081

183,596＋99,515＋118.4%

Kyushu & Okinaw a

285

222

△63

△22.1%

Unit : yen
Price of Affiliated Stores

54,556

50,681△3,875△7.1%

Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

29

Reference Data

Quarterly Profit and loss statement【Consolidated】 Profit and loss statement
Unit: million yen【Unconsolidated】 Profit and loss statement
FY03/2011

FY03/2012

1Q
2,899
2,612
1,843
258
220
123
86
80
8
268
9
46
2,162
943
454

2Q
2,613
2,603
1,808
267
231
120
78
97
7
―
2
49
1,923
838
525

3Q
2,584
2,568
1,750
279
256
119
79
82
9
―
7
59
2,076
867
517

4Q
2,640
2,623
1,693
326
286
138
87
91
9
―
6
73
2,597
857
963

1Q
2,357
2,337
1,398
320
304
129
89
94
5
―
14
58
2,305
911
567

2Q
2,462
2,438
1,405
361
335
137
95
103
9
―
14
70
2,285
742
587

Operating expense

107

80

71

53

50

53

Depreciation/amortization cost

81

77

83

123

119

124

Allow ances of uncollectible receivables
and performance guarantee

56

10

3

10

2

13

Other selling, general & administrative (AS&A)
expense

518

390

532

587

654

690

641

448

△30

296
23.8%

603
24.5%

253
17.3%

△45
△1.1%

FY03/2011
2Q
3Q
2,613
2,584
2,603
2,568
7
9
―
―
2
7
641
448
720
566
△70
△70
―
―
△8
△47
24.5%
17.3%
27.7%
22.1%
―
―
―
―
―
―

4Q
2,640
2,623
9
―
6
△30
117
△83
―
△63
△1.1%
4.5%
―
―
―

FY03/2012
1Q
2Q
2,357
2,462
2,337
2,438
5
9
―
―
14
14
△5
106
307
452
△215
△227
―
―
△97
△118
△0.3%
4.3%
13.1%
18.6%
―
―
―
―
―
―

Consolidated sales
Real estate information services
Rental & Real Estate Trade
New Condominium
New Houses
Custom Built House and Renovation
Renter’s Netw ork
OthersLocal information services business
Real estate lease w arrant business
OthersCost of sales
Selling, general & administrative (SG&A) expenses
Personnel costs
Advertising costs

Operating profit
Net profit
Operating profit margin

Unit: million yen

FY03/2011

FY03/2012

1Q
2,411
2,402
1,843
258
220
―
80
9
0
34
1,765
772
423
52
69

2Q
2,535
2,524
1,808
267
231
120
97
7
2
40
1,870
807
525
77
72

3Q
2,505
2,488
1,750
279
256
119
84
9
7
51
2,021
834
517
69
76

4Q
2,553
2,536
1,693
326
286
138
91
9
6
63
2,532
823
962
51
116

1Q
2,267
2,247
1,398
320
304
129
94
5
14
49
2,245
873
567
48
127

2Q
2,366
2,342
1,405
361
335
0
240
9
14
61
2,224
703
587
51
119

0

9

3

10

2

12

447

377

518

568

626

599

Operating profit

611

624

433

△42

△27

231

614

Net profit

307

8

245

△49

△21

73

△5

257

Operating profit margin

25.4%

24.6%

17.3%

△1.7%

△1.2%

9.8%

△11
△0.3%

85
10.5%

Sales
Real estate information services
Rental & Real Estate Trade
New Condominium
New Houses
Custom Built House and Renovation
OthersLocal information services business
OthersCost of sales
Selling, general & administrative (SG&A) expenses
Personnel costs
Advertising costs
Operating expense
Depreciation/amortization cost
Allow ances of uncollectible receivables
and performance guarantee
Other selling, general & administrative (AS&A)
expense【Consolidated】 Profit and Loss statement per segments
Unit: million yen
Consolidated sales
Real estate information services
Local information services business
Real estate lease w arrant business
OthersOperating profit
Real estate information services
Local information services business
Real estate lease w arrant business
OthersOperating profit margin
Real estate information services
Local information services business
Real estate lease w arrant business
Others

1Q
2,899
2,612
8
268
9
690
769
△91
20
△8
23.8%
29.5%
―
7.7%
―

30
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Reference Data

Real Estate Market Data

【Number of Apartments for Sales（annual）】

Source:Real Estate Economic institute Co.LTD
2006

2007

2008

2009

2010

August-11

September-11

year-on-year

74,463△11.5%

61,021△18.1%

43,733△28.3%

36,376△16.8%

44,535＋22.4%

1,372△13.5%

3,468＋24.9%

3,685
＋0.0%

2,318
△27.9%

3,914
＋3.6%

3,441
△32.9%

4,073
△1.3%

2,306
＋1.7%

3,713
＋16.7%

year-on-year

30,146△8.8%

30,219＋0.2%

22,744△24.7%

19,784△13.0%

21,716＋9.8%

1,301△13.6%

1,501
＋4.3%

1,719
＋2.1%

1,116
△19.8%

1,780
＋1.0%

1,888
△22.9%

1,560△18.2%

1,282△23.9%

1,957
△7.3%

year-on-year

51,257＋2.0%

42,430△17.2%

31,560△25.6%

23,435△25.7%

18,450△21.3%

year-on-year

155,866△6.9%

133,670△14.2%

98,037△26.7%

79,595△18.8%

84,701
＋6.4%

2006

2007

2008

2009

2010

August-11

September-11

year-on-year

4,200
＋2.2%

4,644
＋10.6%

4,775
＋2.8%

4,535
△5.0%

4,716
△4.0%

4,238
＋2.4%

4,717
△1.2%

4,674
△7.8%

4,663
＋1.0%

4,719
＋1.2%

4,507
△4.0%

4,558
△3.7%

5,116
＋15.6%

4,265△15.1%

year-on-year

3,380
＋6.8%

3,478
＋2.9%

3,513
＋1.0%

3,411
△2.9%

3,452
＋1.2%

3,484
△3.8%

3,507
＋7.4%

3,378
＋9.3%

3,672
＋1.2%

3,496
△1.5%

3,419
＋0.6%

3,582
＋4.4%

2,982
△15.0%

3,150△11.2%

year-on-year

3,560
＋2.0%

3,813
＋7.1%

3,901
＋2.3%

3,802
△2.5%

4,022
＋5.8%

2006

2007

2008

2009

2010

August-11

September-11

year-on-year

537,943＋3.9%

430,867△19.9%

444,747＋3.2%

311,463△30.0%

291,840△6.3%

23,989△11.3%

20,840△3.8%

21,763△9.5%

22,163△9.3%

20,695△4.9%

26,1215.0%

30,464＋18.5%

28,372
9.8%

19,395△18.2%

year-on-year

241,826＋4.8%

159,685△34.0%

164,623＋3.1%

67,382△59.1%

97,757＋45.1%

10,435＋31.1%

9,420＋103.9%

8,670
△1.3%

10,812＋11.8%

10,006＋138.1%

8,812＋47.9%

9,785＋79.6%

10,694＋61.6%

9,059△13.9%

year-on-year

138,394＋0.4%

121,163△12.5%

106,619△12.0%

95,294△10.6%

113,427＋19.0%

9,377＋14.6%

9,382＋12.7%

9,324
＋9.6%

9,413
＋12.6%

8,796
△1.8%

10,203＋5.6%

10,375＋7.8%

10,990＋10.8%

9,396
△0.9%

year-on-year

355,700＋0.9%

311,803△12.3%

310,664△0.4%

286,993△7.6%

308,517△7.5%

22,299＋5.5%

22,126＋6.0%

22,863＋4.0%

23,554＋0.2%

23,528△2.9%

26,931△2.6%

32,382＋19.1%

31,039＋6.9%

24,978
△9.7%

2006

2007

2008

2009

2010

August-11

September-11

5,564,346△0.7%

5,498,941△1.2%

5,356,935△2.6%

5,300,025△1.1%

5,084,579△4.1%

392,744＋3.4%

331,890
△2.2%

2006

2007

2008

2009

2010

August-11

September-11

Population（ten thousand persons）
year-on-year

12,777＋0.00%

12,777＋0.00%

12,769△0.06%

12,751△0.14%

12,806＋0.43%

12,792＋0.42%

12,763＋0.21%

Household（thousand）

47,531＋1.0%

48,023＋1.0%

47,957△0.1%

48,013＋0.1%

Capital Region
Kinki
Other
Nationwide【Trend of Price for Apartements（annual）】
unit:ten thousand yen
Capital Region
Kinki
Nationwide

Apartment houseHouse
Owned properties

March-11

April-11

May-11June-11

July-11

Source:Real Estate Economic institute Co.LTD【New build properties（anuual）】
House for rent

January-11 February-11

January-11 February-11

March-11

April-11

May-11June-11

July-11

Source:Ministry of Land, Infrastructure, Transport and Tourism【Internal migrants（anuual）】

January-11 February-11

March-11

April-11

May-11June-11

July-11

Source:Ministry of Internal Affairs and Communications

unit:perons
Internal migrants
year-on-year【Trend of Population and Household （annual）】

year-on-year

January-11 February-11
295,512＋0.6%

322,888△3.4%

March-11
853,545△6.9%

April-11
730,677△4.7%

May-11
407,942＋21.5%

June-11
343,408＋2.3%

July-11
348,875△1.9%

Source:Ministry of Internal Affairs and Communications
January-11 February-11
12,802＋0.42%

12,737△0.09%March-11
12,796＋0.42%

April-11

May-11June-11

July-11

12,797＋0.41%

12,793＋0.41%

12,795＋0.41%

12,792＋0.37%

31
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Approach toward smart devices•Launched nd Android game App,
“Perfect Room Layout.”•Launched the iPhone App, “HOME’S
Estimation for Relocation”.

•Launched the iPhone App, “HOME’S
Finding a Nice Room Horoscope.”•Upgraded the Android App,“HOME’S.”•Launched the iPhone/iPad new
Condominium navigation
APP,“HOME’S Newl Condominiums.”• Launched rd Android game App,“Capsule Room Planning.”•Linked “HOME’S” for smart phones
with Google maps search for rental
properties.

•Launched nd Android game App, “GoSwim Mr. HOMES-kun.”•Launched optimization website for thesmart phone device, “Lococom.”3•Launched the iPhone App, “HOME’S Elderly
Care Service.”•Revamped “HOME’S,” the rental
property search service for smart
phones.

2

2•Launched the iPhone App, ”Lococom.”

Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Oct
Aug

Sep
Jul
Jun
May

Apr

Focusing on the rapidly growing smart devices (iPhone, iPad, Android)
Po i n t

32

The Overseas Business Strategyof the NEXT GroupPo i n t

Kingdom of Thailand

Established a wholly owned subsidiary in Thailand, and plans are underway for providing real estate
information with an exhaustive listing of properties！

Check
1. Kingdom of Thailand
Business commencement date:
Scheduled for January 2012
Type of company: Subsidiary (99.9%)
Service to provided: Real estate
information service

1. Kingdom ofThailandNEXT Co., Ltd.

Competitors

Market conditions

A wealth of property information, mainly on
new properties ,using the AREA Co. (*)
network

A crowded field of small-scale
websites

Bangkok home sales: Approx. 100,000
Of which approx. 52% are Condominiums

Utilization of AREA Co.’s operatingleasesBasically free websites (banneradvertising)

Product capabilities of HOME’S
products

Updating of information is lessfrequent and information is biased

Internet advertizing expenses in the realestate industry was approx. 235 million
yen in 2010, representing a year-on-yearincrease of 289%

HOME’S’ website operating expertise

Most sites are set up as bulletinboards with little search capabilities

Technical capabilities of NEXT
Compatibility with devices including
smart phones

Internet advertizing expenses accounted
for 1% of all advertizing expenses.

Number of Internet users: 18 million
More than 15% growth yearlyInternet penetration rate: Approx. 25%*AREA Co. (Agency For Real Estate Affairs Co., Ltd.), headed by Sopon Pornchokchai,Managing Director (Chairman), is an independent, professional assets consulting firm,
providing real estate appraisals and research based on international standards to the
public and private sectors. AREA Co. maintains a solid network in the real estateindustry of Thailand and surrounding countries.

Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

33

The Overseas Business Strategyof the NEXT GroupPo i n t

People’s Republic of China

Plans are underway to provide a real estate information website in China, where
phenomenal proliferation of the Internet is expected！

Check
2. People’s Republic of China
Business commencement date:
Scheduled for January 2012
Type of company: Equity method
affiliate (39% equity investment planned)
Service to be provided: Real estate
information service

NEXT Co., Ltd.

People’s Republic
2. of China

Competitors

Market conditions
A record 4.8 trillion yuan was spent on realestate investments in 2010.

Product capabilities of HOME’S products

Crowded field with 3 major companies (ofwhich 2 are listed companies) and small- andmedium-sized companies
The industry leader, SouFun HD, recorded
sales of USD224,490 thousand and operating
profit of USD 78,420 thousand

HOME’S’ website operating expertise

Information is of poor quality, as information
screening is not widespread

Technical capabilities of NEXT

A fixed monthly fee charge for posting is theprevalent fee structure.

Sharing networks with real estate companies
and partnerships with companies capable of
attracting customers on the Internet

Compatibility with devices including smart
phonesOn the other hand, the government has
strengthened controls over soaring realestate prices and restrictions on speculative
real estate sales.
Internet real estate advertising was 2,450
million yuan, accounting for 10% of all
advertizing costs. In 2012, Internet
advertizing is expected to forge ahead ofnewspaper advertizing to become the No.2
advertizing media.
Number of Internet users: 460 million(penetration rate: 35%)
Number of mobile phone users: 750 million(penetration rate: 57%)

34
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

The concept of our future business development
Point

The Next Group’s strategy is to aim at becoming a global company with “DB+CCS” (*)

Concept of “DB+CCS”◆ Communication service✔ Service enabling the user to becomeacquainted with people and feel rapport
with and warmth of such people✔ Service allowing users to help eachother
◆ Concierge service✔ Service enabling the service provider
to select information best-suited to theperson in question and offer proposal tothat person✔ Service allowing the service provider
to identify latent needs as well and offer
recommendation

User

User needs

Best-suited data

CCS
Provide “DB＋CCS” tosolve the “non-availability” issue
in the world

A vast amount of data

In Japan

LivingCommunity

Work

Finance

Medical

Education

Eating・・・

Overseas

LivingCommunity

Work

Finance

Medical

Education

Eating・・・

DB✔ Database from which anyone canobtain required information through any
device, anytime and anywhere✔ Comprehensive database of direct
relevance to people’s “life”✔ Database usable in Japan as well as
overseas✔ Database free from false information* “DB+CCS”: An abbreviation for “Database” and “Communication & Concierge Service”

35
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

The concept of our future business development
Point

In addition to the growth of the real estate information service, the revenue base, we are
studying new businesses as well as overseas business development！

Mid/long-term goals

Sales

Check
Overseas business
Development(yet to be implemented)[Corporate management metrics]
1. Aim to achieve an operating profit margin of 25%
2. Improve productivity
3. Return of profits to shareholders through a・Real estate information service

continuous dividend payment and profit growth・Local community
・Others[Business development]
1.HOME’S as absolute No.1 = Improve property
comprehensiveness2.Secure a new revenue base
3.Overseas business development

New business(already launched)

New business(yet to be launched)・ Local community
・ Life and money
information website
・ Medical informationarea

・ Education area, etc.

Aim to become
an infrastructure of life
through the developmentof our business basedon the practice ofour management
principles, andexpand our scale

Base business・Real estate information service
Future shape

Now

Timeline

As of September 2011

36
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Corporate profile
Company nameNEXT Co., Ltd (TSE 1st Section: 2120)

Representative

President and CEO Takashi Inoue

EstablishedMarch 12, 1997 (Accounting year end: March)

Paid-in capital

1,993 million yen

Consolidated numberof employees

579 (including contingent employees totaling 44) A decrease of 18 from March 31, 2011

Business contents

Real estate information service
Local information service
OthersNumber of shareholders

3,628 (as of September 30, 2011)

Major shareholders

Board member of NEXT, Rakuten, Inc.
(NEXT Co., Ltd. is an equity method affiliate of Rakuten, Inc.)

Headquarters address(relocated in January 2011)

Shinagawa Front Building (general reception 3rd floor), 2-3-13, Konan, Minato-ku, Tokyo

Consolidated subsidiaries(equity interest ratio)

Number of shares outstanding: 187,770 shares

A decrease of 106 from March 31, 2011

Renter’s Co.(100%)
HOME’S PROPERTY MEDIA(THAILAND)CO.,LTD. （99.9%）
As of September 30, 201137
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Shareholder composition
Point

Decrease of 106 shareholders from March 31, 2011 to 3,628 shareholders
Number of shareholders

3,628(As of September 30, 2011), Decrease of 106 from March 31, 2011

Major shareholders

NEXT Co., Ltd. directors and Rakuten Inc. (NEXT Co., Ltd. is an equity method
affiliate of Rakuten, Inc.)

Financial
institutions
21 (0.6%)

Financial instruments
business operators
16(0.4%)

Japanese government
and municipal governments

Other
corporations

1 (0.0%)36(1.0%)Treasury stock

Total 3,628

1 (0.0%)Foreign corporations
47(1.3%)

Individuals andothers

Large Shareholders

3,506 (96.6%)
Name

Number ofshares held

Ratio of shares held
to total number ofissued shares (%)

Takashi Inoue
Rakuten Inc.
J.P. MORGAN CLEARING CORP-SEC
Tapug Corporation

Number of shares

GOLDMAN SACHS & CO. (Regular Account)

Prospect Japan Fund Ltd.

Status of shares
Item

Japanese
Financial
Financi
government
instrumentsaland municipal institutio businessgovernments
operators
ns

Other
corporations

Foreign Individu
corporat als and Treasurionsothers y stock

Number of shares
held
Shareholdings
percentage of the
total

Total

Status ofless-than
one unit
sharesMorgan Stanley & Co., LLC.
Japan Trustee Services Bank, Ltd. (Trust Account)
Baillie Gifford Japan Trust PLC
NEXT Co., Ltd. Employee Shareholding Association
Total

38
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

2010 CSR Report

The Company has issued the “2010 CSR Report.”
The Report explains the businesses and concepts of NEXT. Co., Ltd.
http://www.next-group.jp/csr/pdf/report2010.pdf

39
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

IR Information Contact Details

NEXT Co., Ltd.
Business Planning Dept.
Corporate Communications Group
ContactPhone+81-3-5783-3603 (weekdays 10:00 – 18:00)
Fax+81-3-5783-3737
E-mailir@next-group.jp
Company website http://www.next-group.jp/ (Japanese)(Mobile website)IR News

http://www.next-group.jp/m/ (Japanese)

In order to provide information to our stakeholders promptly
and to help to better familiarize themselves with NEXT, we
distribute “IR News” each time we update information on ourcompany website involving monthly data and otherinformation releases.
To register, please use the following registration form.
[Registration for]http://www.next-group.jp/ir/magazine/index.html

40
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.