NEXT Co., Ltd.
TSE 1st section 2120

Annual Report ofFinancial Statement

Year Ended March 31, 2012
(April 2011 to March 2012)
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 businessperformance and results may differ materially from such opinions andforecasts due to changes in various factors.

NEXT Co., Ltd.
TSE 1st section 2120

Financial Results for the Year Ended March 31, 2012

・・・ pp. 2-10

Our Initiatives for the Three Months Ended March 31, 2012

・・・ pp. 11-18

Business Forecast for the Year Ending March 31, 2013・・・ pp. 19-23

Priority Action Points for the Year Ending March 31, 2013・・・ pp. 24-33

Business Management Philosophy

・・・ p. 34

Reference Materials

・・・ pp. 35-49

Our goal in founding NEXT・・・ p. 36

NEXT’s service offerings

・・・ p. 37

Real Estate Information Service “HOME’S”

・・・ p. 38

The NEXT Group’s overseas business strategy

・・・ pp. 39-42

Reference data

・・・ pp. 43-46

About NEXT and its shareholder breakdown

・・・ pp. 47-48

IR information contact details and “IR News”

・・・ p. 49

NEXT Co., Ltd. TSE 1st Section 2120

Year Ended March 31, 2012
Financial Results
April 2011 to March 2012

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

Year Ended March 31, 2012 Financial Results

Today’s Points

Recorded a year-on-year decline in sales and profit due to lower sales for the “HOME’S Rental & Real
Estate Trade” business and higher costs arising from the head office relocation
Sales： 10,319 million yen （down 3.9％ year-on-year ）Operating profit：
952 million yen （down 45.6％ year-on-year ）Net profit：
465 million yen （down 57.9％ year-on-year ）The number of properties posted averaged 3.61 million during March 2012 (+0.69 million year on year)
The number of affiliated stores stood at 9,926 (+363 year on year) as of March 31, 2012
A year-on-year sales growth began to be recorded starting from February 2012 thanks to thesynergistic effect of the airing from January of a TV commercial featuring a popular young comedy
duo and the implementation during the quarter of various sales promotion initiatives
The “HOME’S” website won the number one position in the Smartphone Site Usability Ranking
survey conducted in April 2012, becoming a top website in three categories, the number ofproperties posted, website user counts and smartphone site usability
Launched real estate information site “homescn.com” in Beijing and Shanghai in April 2012 while
making an Indonesian company its subsidiary in the same month3
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Year Ended March 31, 2012 Financial Results！

Trend of major indicators

Trend of consolidated business performance

Check

Sales (million yen)

FY03/2011
・・・ (million yen)
Net profit

Operating profit (million yen)
1,979

1,107

1,026

1,749

▲0.4％
+7.9％

952

▲11.6％▲3.9％

465▲45.6％▲57.9％

FY03/2011
FY03/2010
accumulated total accumulated total！

FY03/2012
accumulated total

FY03/2012
FY03/2011
FY03/2010
10年3月期…
11年3月期…
12年3月期…
accumulated total accumulated total accumulated total

FY03/2011
FY03/2010
FY03/2012
10年3月期…
11年3月期…
12年3月期…
accumulated total accumulated total accumulated total“HOME’S Real Estate Rents & Trade” trend of major indicators

Check

No. of objects posted(1,000 objects)

3,615

Number of affiliated stores (stores)

Sales per store (yen)2,918

54,666+23.9％

average
3月度平均
in March 2010

FY03/201111年3月期

average
3月度平均
in March 2011

+2.5％

▲3.9％

+103.2％
FY03/201212年3月期

averagein3月度平均March 2012

FY03/2010

10年3月期
averageaccumulated
累計平均total

FY03/201111年3月期
averageaccumulated
累計平均total

FY03/201212年3月期
averageaccumulated
累計平均total

10,9559,530

52,027

▲0.9％

1,436

FY03/2010
10年3月期

10,68554,157▲13.0％
FY03/2011
FY03/2012
11年3月期12年3月期
averageaverageaverageaccumulated
累計平均total accumulated
累計平均total accumulated
累計平均total
FY03/2010
10年3月期

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

Year Ended March 31, 2012 Financial Results
Po i n t

Trend of Operating P/L (simplified version)

Sales declined 3.9％ and operating profit fell 45.6％ as SG&A expenses rose 3.6%
Unit: million yen

FY03/2010(Apr-Mar)

FY03/2011(Apr-Mar)

FY03/2012(Apr-Mar)

Change(year-on-year)

Percentage change(year-on-year)

See p. 7▲3.9% ⇒
for details

10,77910,738

10,319▲418

Cost of sales

243

229

291

+62

+27.2% *1

Selling, general & administrative(SG&A) expenses

8,556

8,759

9,075

+316

+3.6%

Personnel costs

3,583

3,507

3,186

▲321

▲9.2% * 2

Advertising costs

1,926

2,460

2,735

+274

+11.2% * 3

Operating expense

515

313

240

▲72

▲23.2% * 4

Depreciation/amortization cost

364

367

479

+112

+30.6% * 5

Allowances of uncollectible
receivables and performance
guarantee

188

81

-

▲81

▲100.0% * 6

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

1,978

2,028

2,433

+404

+19.9%

Operating profit

1,979

1,749

952

▲797

▲45.6%Net profit

1,026

1,107

465

▲641

▲57.9% * 8

Operating profit margin (OPM)

18.4%

16.3%

9.2%

▲7.1p

Sales

*7

-

* Real estate lease warrant business, from which the Company withdrew in the 2Q of FY 03/2011, had recorded sales of 268 million yen, SG&A expenses of 248 million yen andoperating profit of 20 million yen in FY 03/2010.
*1: An increase of 16 million yen in ASP services use fees and an increase of 12 million yen in production costs for special feature page contents*2: The average consolidated number of employees during FY 03/2012 stood at 563 (a decrease of 19 year-on-year), including 23 new graduates (no change year-on-year). A
decrease of 183 million yen in employees’ bonuses and a decrease of 137 million in personnel costs due to 39 temporary employee resignations*3: An increase of 395 million yen in website customer drawing costs and an increase of 167 million yen in TV commercial-related costs. An advertising costs decrease of 172 million
due to the absence of the campaign and promotion costs incurred in FY 03/2011*4: A decrease of 50 million yen due to the Company’s withdrawal from Real estate lease warrant business*5: An increase of 101 million yen due to depreciation and amortization arising from the head office relocation and to asset retirement obligations*6: Due to a decrease arising from the Company’s withdrawal from Real estate lease warrant business and from a reduced default rate
*7: An increase of 601 million yen due to the head office relocation. A decrease of 102 million yen due to lower employee recruitment costs. An increase of 44 million yen in researchand development costs resulting from the founding of Littel Research Institute*8: For FY 03/2011, the Company had recorded an extraordinary loss of 377 million yen (22 million yen in prior-year depreciation costs due to the recording of asset retirement
obligations, 125 million yen in provision for the head office relocation and 229 million yen in a loss on sale of shares in NFS Co., Ltd.). For FY 03/2012, the Company posted 113 million
yen in an extraordinary loss (113 million yen in a loss on amortization relating to Lococom services [software])Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

5

Year Ended March 31, 2012 Financial Results
Po i n t
Unit:
Millionyen

Trend of cost to sales ratio

A profit decline posted with the improved personnel cost ratio failing to offset higher costs resulting
from increased advertising spending and the head office relocation
AmountFY03/2010(Apr-Mar)

FY03/2011(Apr-Mar)Breakdown
FY03/2012(Apr-Mar)

FY03/2010(Apr-Mar)

FY03/2011(Apr-Mar)

FY03/2012(Apr-Mar)
5.3 pterosionCost andother SG&A
expenses

Advertisingcosts
1.8 pterosion

Personnel
costs

Operatingprofit(Apr-Mar)- FY03/2011 -：In ”Cost and other SG&A expenses ratio”(pink), despite an approx. 160 million yen decrease in expenses due to the Company’s withdrawal from
Real estate lease warrant business, costs for the relocation of the head office increased：“Advertising costs ratio” (green) increased due to an increase in website customer drawing costs and TV commercial-related costs：“Personnel cost (blue)” declined due to a decrease of 93 million yen resulting from the Company’s withdrawal from Real estate lease warrant businessas well as to a decrease of 183 million yen in employees’ bonuses and to a personnel costs decrease of 137 million yen resulting froma decline in the number of temporary employees from 54 to 15* 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%

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

Year Ended March 31, 2012 Financial Results

Trend of sales by service

Strong new condominium/housing sales failed to offset lower sales for the “HOME’S Rental and Real
Estate Trade” business, causing the Company’s overall sales to record a decline

Po i n t

FY03/2010 (Apr-Mar)

Unit: Million yen

FY03/2011(Apr-Mar)

FY03/2012(Apr-Mar)

Change(year-on-year

Percentage change(year-on-year

10,77910,738

10,319

▲418

▲3.9%

Real estate information
services

9,963

10,407

10,222

▲185

▲1.8%

Rental & Real Estate Trade

7,014

7,096

5,956

▲1,139▲16.1% *1

New Condominium

1,061

1,131

1,403

+271

+24.0% * 2

New Houses

804

994

1,404

+409

+41.2%

Custom-built house andrefurbishment

417

501

596

+94

+18.9%

Renter's Network

302

331

399

+67

+20.4%

Note2

362

351

461

+110

+31.5% *4

Note 3

27

35

30

▲4

▲13.9%

Note 4

783

268

-

▲268

-

Note 5

4

26

67

+40

+150.6%

Consolidated sales

OthersLocal information services
business
Real estate lease warrant
business
Others*3Note 1: All inter-segment transactions have been offset and eliminatedNote 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,” “Casualty insurance agency business” and “Career education business” among others*1: Sales showed a year-on-year decline in the fiscal year under review due to the change in the pricing method. The number of properties posted on our website
grew substantially while the number of affiliated store membership withdrawals resumed their rising trend. The number of inquiries fell short of our original forecastin the fiscal year under review*2: Sales for project services such as special feature pages were strong*3: The number of properties posted grew 28.3% year on year. The membership increased 14.5% year on year
*4: Sales for “HOME’S Estimation for Relocation” grew by 95 million yen while sales for “HOME’S Elderly Care Service” increased by 28 million yen

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

Financial Results for the Year
Ended March 31, 2012
Point

Trend of P/L by segment

Profit declined for all the segments due to lower sales and to higher costs arising from the head
office relocation

Unit: Million
yen

FY03/2010(Apr-Mar)

FY03/2011(Apr-Mar)

Year-on-year change
Unit: Million yen

FY 03/2011
FY 03/2012(from Apr. to Mar.) (from Apr. to Mar.)

ChangePercentagechange (%)

Real estate
information service
Local information
services
Real estate leasewarrant

2,173

1,912

▲ 260

▲12.0%

▲ 314

▲ 633

▲ 319

―

19

―

▲ 19

―

Others

▲ 128

▲ 326

▲ 198

―

Consolidated
1,749
952
▲ 797 ▲45.6%
operating profit*1: No percentage change is shown for segments that recorded an operating
loss for the year ended March 31, 2011 or for the year ended March 31, 2012
* 2: The guarantor operating business was excluded from the consolidated
accounts starting from the second quarter of the year ended March 31, 2011

FY03/2011(Apr-Mar)

FY03/2012(Apr-Mar)

Real estate
information service
Local information
services
Real estate leasewarrant
Others： The real estate information services (orange) recorded a decline in operating profit due to a sales decrease of 185 million yen as well as to higher advertising costs and to increased
rent following the head office relocation： In the local information services (blue), the Company continued to implement a staffing expansion program and various sales promotion measures until the second quarter of the
fiscal year under review with the aim of achieving profitability for this business line. Yet starting from the third quarter, the Company began to operate this business line with minimum
staffing in a change of policy while continuing its cost downsizing efforts：The guarantor operating business (green), attained operating profitability in the first quarter of the fiscal year ended March 31, 2011, recording 19 million yen in operating profit for
the quarter. Because the Company had withdrawn from this business in the fiscal year ended March 31, 2011, no operating profit was recorded for the fiscal year under review： In “Others” (pink), an increase in costs was recorded for the “MONEYMO,” “eQOL Skincare” and career education businesses, respectively

8
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Financial Results for the Year
Ended March 31, 2012
Po i n t

Consolidated balance sheet and goodwill

Net assets per share grew 4.4% year on year while interest-bearing debt remained zero
March 31,2011

March 31, 2012[End FY03/2012

Assets

9,711

10,119▲ 407▲ 4.2%

Current assets

6,841

7,255

+ 414

+ 6.1%

Fixed assets

2,869

2,863

▲ 6

▲ 0.2%

Liabilities

1,595

1,641

+ 45

+ 2.9%

Current liabilities

1,355
240

1,399
241

+ 44
+ 1

+ 3.3%+ 0.6%

8,115

8,477

+ 362

+ 4.5%

432.77 yen

451.95 yen+ 19.18+ 4.4%

Unit: Million yen

Fixed liabilities

Net assets

Net assets per share

PercentagechangeChangeMain reasons for change
Increase in cash and deposits: 2,217 million yen / Increase in current assets
Increase in accounts receivable-trade: 128 million yen / Increase in current assets
Decrease in short-term investment securities: 1,510 million yen / Decrease in current
assetsNon-occurrence of income taxes receivable: 359 million yen / Decrease in current assets
Increase in investment securities: 333 million yen / Increase in noncurrent assets

Decrease in accounts payable-other: 143 million yen / Decrease in current liabilities
Increase in income taxes payable and consumption taxes payable: 331 million yen /Increase in current liabilities
Decrease in provision for bonuses: 183 million yen / Decrease in current liabilities
Interest bearing debt: 0

*1
*2

*3
*4

Increase in retained earnings: 357 million yen / Increase in net assets*Effective October 1, 2011, the Company conducted a 1:100 stock split. Consequently,
net assets per share were calculated by dividing net asset value by the total number ofshares outstanding after this stock split

Unit: 1,000 yen

Goodwill amortization status

Total amountof goodwill

Beginning of period
residual value

April 2010 to March 2011amortization amountResidual value

The former Willnic

50,00010,0002,500

0The former Littel

216,738

216,738

43,347

173,390

Number ofmonthsoutstanding

Amortization completiondate

0March 2012

48 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: The main reasons for increase in cash and deposits: Increase due to refunds of income tax and cancellation of Free Financial Fund (FFF) anddecrease due to dividend payment*2: The main reason for a decease in short-term investment securities: Cancellation of FFF*3: The main reasons for an increase in investment securities: The acquisition of shares worth 25 million yen in Chinese company Real Estate
Mobile Inc. and the acquisition of shares worth 116 million yen in Next Property Media Holdings Limited as well as the acquisition of shares worth
173 million yen in Taiwanese company Rakuya Inc.

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

Financial Results for the Year
Ended March 31, 2012
Po i n t

Consolidated cash flow

The balance of cash and cash equivalents as of March 31, 2012 stood at 3,400 million yen; 5,400
million yen if time deposits are included

Unit: Million yen

Operating CF

Investment CF

Financial CF
Increase/deceasein cash and cash
equivalents
Balance of cash andcash
equivalents

FY03/2011+ 660▲ 2,317

FY03/2012[Year under review]+ 1,512▲ 2,698

Change

+ 852

▲ 381

▲ 124

▲ 108

+ 15

▲ 1,780▲ 1,294

+ 486

4,707

3,413

▲ 1,294

FY03/2012[Year under review]

Main items

FY03/2011

Income before income taxes and minority
interests
Depreciation and amortization
Impairment loss
Increase/decrease in provision for bonuses
Loss on sales of stocks of subsidiaries andaffiliates
Increase/decrease in accounts receivable-trade
Increase/decrease in accounts payable-other
Income taxes paid or refunded (▲denotes
income taxes paid)

1,365 million yen

868 million yen

367million yen

481 million yen―

113 million yen▲ 36 million yen▲ 183 million yen

229 million yen―▲ 296 million yen▲ 140 million yen

205 million yen▲ 107 million yen▲ 1,139 million yen

276 million yen―▲ 2,000 million yen▲ 10 million yen▲ 324 million yen

Cash outflow due to the depositing of time
depositCash outflow due to the acquisition of
investment securities
Cash outflow due to the acquisition of property,
plant and equipment
Cash outflow due to the acquisition of intangible
noncurrent assets▲ 509 million yen▲ 54 million yen▲ 280 million yen▲ 321 million yen▲ 755 million yen―

Cash outflow due to sale of shares in subsidiarythat involves a change in scope of consolidation(*1)
Cash outflow due to the depositing of security
deposit and security money▲ 654 million yen▲ 0 million yen

Payment of dividends▲ 120 million yen▲ 110 million yen(*1) Due to sale of shares in subsidiary or in NFS Co., Ltd.

(*2)(*2) 5,413 million yen if the more-than-three-month time deposit of 20 million yen

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

NEXT Co., Ltd. TSE 1st Section 2120

Our Initiatives for the Three Months Ended
March 31, 2012

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

Our Initiatives for the Three Months Ended
March 31, 2012！

TopicsCheck

Real estate information
services

Attained increased sales thanks to the positive effects of our cross-media sales
promotion activities

Overseas business

China
Launched real estate information services site “homescn.com”

The “HOME’S” website won the number one position in the Smartphone Site Usability
Ranking survey, becoming a top website in three categories, the number of properties
posted, website user counts and smartphone site usability

Indonesia
Made local company PT. Rumah Media a subsidiary12
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Initiatives for the Three Months Ended
March 31, 2012
！

！

Check
Continued to air a TV commercial featuring a popular
Comedy duo during the January to March 2012 period
Aired a TV commercial featuring the popular comedy duo “Heisei Nobushi
Kobushi,” demonstrating our two service appeals, “the top-ranked website
in the number of properties posted” and “the function to allow the user todiscover an ideal property instantly”！

Positive effects of various sales
promotion initiatives

Check
Sales began to show a year-on-year gain startingfrom February 2012
Following a period of negative year-on-year growth, monthly sales
began to increase year on year starting from February 2012, helped
partly by our cross-media promotion efforts■ “HOME’S Rental and Real Estate Trade”: Changes in monthly sales

Check

2011年3月期
FY 03/2011

2012年3月期
FY 03/2012

Demonstrated the same service appeals through ourcross-media sales promotion initiative using TV
commercial and other vehicles

Year-on-year
gain

Demonstrated the same service appeals by running display advertisements
and campaigns while airing the TV commercial simultaneously■Display advertisement■Campaign

Apr
May
4月
5月
2011年
2011

Jun
6月

Jul
7月

Aug
8月

Sept
9月

Oct
10月

Nov
11月

Dec
12月

Jan
1月
2012年
2012
2012

Feb
2月

Mar
3月

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

Our Initiatives for the Three Months Ended
March 31, 2012
！

！

Check

Top

Ranked top in the number ofproperties posted

Company
A’s siteCompany
C’s site

Check

Top

In terms of the number of properties posted, the “HOME’S” website was ranked
top in the ranking survey of five major real estate portal sites, featured in the2011 December 12 edition of the Shukan Jutaku Shinbun newspaper (date ofsurvey: December 6, 2011). “HOME’S” property listings were found to be morethan twice those of competitor sites
Unit:
10,000 properties

Ranked top in the number ofproperties posted and website
visitor counts

370

The “HOME’S” website was ranked top in website user counts among
different real estate information sites, according to the 2012 January
Nielsen Net Ratings data, which was attributable to its superior
convenience and diverse content offerings
Site nameSumaity
2010

May

Feb

Dec

Mar

Ranked top in website
visitor counts

Site operator

Site operator

NEXT Co., Ltd

3.87 million

Recruit Co., Ltd.

3.24 million

Rakuten, Inc.

2.04 million

Yahoo! JAPAN1.88 million

CHINTAI Corporation

1.62 million

At Home Co., Ltd.

1.12 million

ADPARK Communications

0.68 million

Home Advisor, Inc.

0.62 million

Home Advisor, Inc.

0.52 million

Kakaku.com, Inc.

0.25 million* The property information of “HOME’S” is posted on the Infoseek Real Estate website as well
Source: 2012 January Nielsen Net Ratings data of website user access through homeinstalled PC and office-installed PC* The number of rental and for-sale properties posted on major real estate portal sites* As of March 1, 2012 (source: NEXT data)

14
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Initiatives for the Three Months Ended
March 31, 2012
！

！

Check

Top

Ranked top in usability

The “HOME’S” website was ranked top in usability due to its “overall website clarity”
among 30 sites in four segments composed of different portal sites, EC sites,
company sites and specialized sites in specific categories (sites dedicated to specificcategories or functions such as real estate and financial services), websites run bycompanies providing their main services via smartphone
Rank

Operator/site name

Overall score

Ranked top in usability

Check
The “Triple Chance! HOME’S Property Search/Relocation
Support Campaign” now underway in celebration of thethe Company having won top website rankings in three categories
Marking the winning of top website rankings in three categories, namely,
the number of properties posted, site visitor counts and usability, we are
now in the process of implementing this campaign in collaboration with ouraffiliated stores. This campaign will continue until the end of July 2012
with the aim of acquiring new users during the post-peak moving season

Overall
website clarity

HOME'S (specialized site)
Nomura Securities (specialized site)ZOZO Town (EC site)
House Foods (company site)
Tokyo Metro (company site)
Kakaku.com (EC site)
United Arrows (company site)
Nissan Motor (company site)
At Home (specialized site)
Amazon.com (EC site)*Source: Data released by Tribeck Strategies, Inc. on April 5, 201215
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Initiatives for the Three Months Ended
March 31, 2012
Point

Progress status for our overseas
business operations

Took an equity participation in an Indonesian entity, following on from investment in companies inThailand, China and Taiwan, in an effort to lay the groundwork for making “HOME’S” a global brand

September 2011
•Set up in Thailand subsidiary HOME'S PROPERTY MEDIA (THAILAND) CO., LTD.

December 2011
•Took an equity participation in Real Estate Mobile Inc.（REM）, a China-based real estate service provider serving the needs of realestate companies in the country•Took an equity participation in Next Property Media Holdings Limited jointly with REM•Took an equity participation in Rakuya International Info. Co., Ltd., a Taiwan-based operator of a real estate information website

January 2012•Services launched in Thailand by real estate information website “HOME’S Thailand”

April 2012•Services launched in China (Beijing and Shanghai) by real estate information website “homescn.com”•Took an equity participation in local company PT. Rumah Media in Indonesia

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

Our Initiatives for the Three Months Ended
March 31, 2012
Point

China

Services launched by “HOME’S” website China version on April 9, 2012 in Beijing and Shanghai
simultaneously
！

Check

Services launched by real estate
information Website “homescn.com”
in Beijing and Shanghai on April 9,
2012

The number of properties
posted as of April 2012

1 million

The targeted number ofproperties posted
for FY 20122.25 million

The targeted sales

for FY 2014

3.0 billion to
4.0 billion yen

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

Our Initiatives for the Three Months Ended
March 31, 2012
Point

Indonesia

Launched preparations for providing Indonesian real estate information services
Company
namePT. Rumah Media (English name: Home media)

Representative Suryanto Wijaya （Corfina）
Date offounding

December 14, 2011

Number of
employees

Eight (including one to two employees to be seconded fromNEXT)

Shareholders

NEXT Co., Ltd.
PT. Corfina Mitrakreasi

Business
activities

Real estate information services business！

50% (675,000 shares)
50% (675,000 shares)

Check

Took an equity participation in PT. Rumah Media,
Making it NEXT’s subsidiary
May 2012
To launch real estate concierge services for Japanesenationals living in Indonesia
September 2012
To launch a real estate information website for providing
information to Indonesian users

The targeted sales for FY 2014
Approx. 30 million to 40 million yen
Met the representative of major shareholder Corfina on April
20, 2012 during his Japan visit

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

NEXT Co., Ltd. TSE 1st Section 2120

Business Forecast for the YearEnding March 31, 2012

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

Business Forecast for the YearEnding March 31, 2012
Po i n t

Initiatives for FY 03/2013

Sales are forecast to remain flat year on year, based on our conservative estimation, and profit isforecast to decline year on year as we implement our branding enhancement program

Item

FY03/2012 results

FY03/2013 business forecast

Assumptions•

Consolidated sales

10,319 million yen

10,332 million yen

Up 0.1％

Consolidated financial results•
Real estate
information services

10,222 million yen

10,175 million yen

Down 0.5％

Local information
services

30 million yen

49 million yen

Up 63.2％

Others67 million yen

107 million yen

Up 60.6％

Consolidated
operating profit
Consolidated
net profit

952 million yen

465 million yen

535 million yen

215 million yen•

An increase of 400 million yen in
the advertising costs budget due
to the branding enhancement
program•

The Company is likely to record
90 million yen in a loss on equity
method investment in an
overseas affiliate, under nonoperating expenses

Down 43.8％

Down53.8％

Sales were forecast
conservatively in view of highvolatility for inquiry-based fee
revenues
An anticipated sales growth due
to our branding enhancement
program was not factored into
the sales forecast

20
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Business Forecast for the YearEnding March 31, 2012
Point

Trend of operating P/L

Sales are forecast to remain flat year on year, and the advertising costs budget was expanded byapprox. 400 million yen for implementing our branding enhancement program
Unit: million yen[Reference]
FY03/2011(Actual)

FY03/2012(Actual)

FY03/2013(Forecast)

ChangePercentage change

10,738

10,31910,332+ 12+0.1% * 1

Cost of sales

229

291

354

+ 62

+21.5% * 2

Selling, general & administrative (SG&A)
expenses

8,759

9,075

9,442

+ 367

+4.0%

Personnel costs

3,507

3,186

3,068

▲ 117

▲ 3.7%

Advertising costs

2,460

2,735

3,129

+ 393

+ 14.4%

Operating expense

313

240

344

+ 103

+ 43.0% * 3

Depreciation/amortization cost

367

479

474

▲5

▲ 1.1%

Allowances of uncollectible
receivables and performance
guarantee

81

-

18

+ 18

-

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

2,028

2,433

2,408

▲ 24

▲ 1.0%

Operating profit

1,749

952

535

▲ 417

▲ 43.8%Net profit

1,107

465

215

▲ 250

▲ 53.8% * 4

Operating profit margin (OPM)

16.3%

9.2%

5.2%

▲ 4.0pSales-*1: Sales were forecast conservatively in view of high volatility for inquiry-based fee revenues. An anticipated change in sales due to the positive
promotion effects was not factored into the forecast. For the sales forecast by service, please see Page 22*2: An increase due to the content production costs for new condominium and new detached house special feature pages*3: An increase due to the costs for the real estate information service campaign and the costs for “Others”*4: The Company is likely to record 90 million yen in a loss on equity method investment, under non-operating expenses

21
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Business Forecast for the YearEnding March 31, 2012
Point

Trend of sales by service

The sales forecast was made on a conservative basis. An anticipated sales growth due to ourincreased advertising costs spending was not factored into the sales forecast[Reference]
FY03/2011(Actual)

Unit: Million yen

FY03/2012(Actual)

FY03/2013(Forecast)

ChangePercentage change

10,738

10,31910,332+12+0.1% * 1

Real estate information services
business

10,407

10,222

10,175▲46▲0.5%

Rental & Real Estate Trade

7,096

5,956

5,702

▲254

▲4.3% * 2

New condominium

1,131

1,403

1,398

▲4

▲0.3%

New Houses

994

1,404

1,538

+133

+9.5%

Custom-built house andrefurbishment

501

596

649

+53

+8.9%

Renter's Network

331

399

463

+64

+16.2%

351

461

422

▲38

▲8.4%

35

30

49

+19

+63.2%

Note 3

268

-

-

-

-

Note 4

26

67

107

+40

+60.6%

Consolidated sales

OthersLocal information services
business
Real estate lease warrant
business
Others

Note 2

Note 1: All inter-segment transactions were offset and eliminatedNote 2: “Others” in the real estate information services are composed of “HOME’S Estimation for Relocation,” “HOME’S Elderly Care Service,” HOME’S-derived
businesses and overseas business, among others
Note 3: : 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
Note 4: “Others” comprise “MONEYMO,” “eQOL Skincare,” “Casualty insurance agency business” and “Career education business” among others*1: An anticipated change in sales due to the positive effects of the promotion program in the real estate information services was not factored into
the forecast*2: The forecast was made on a conservative basis in view of high volatility for inquiry-based fee revenues

22
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Business Forecast for the YearEnding March 31, 2012

Dividend forecast

We expect to pay 1.70 yen in FY 03/2013 per-share dividend, a decline of 2 yen due to a profit
decline, while we will keep our dividend payout ratio at 15%

Point

Item

FY03/2012

FY03/2013 (Forecast)

Annual dividend(Forecast)

3.70 yen

1.70 yen

Consolidated net
profit

465 million yen

215 million yen

Dividend ratio

14.9％

14.8％

！

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 one of the important corporate management
policies while focusing on “retained earnings” and “investment for future growth” that are aimed
at enhancing and strengthening the Company’s financial structure.
With respect to dividend, it is our basic policy to flexibly allocate the fruit of our endeavor
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%)

23
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

NEXT Co., Ltd. TSE 1st section 2120

Priority action points for the Year Ending
March 31, 2013

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

Our Top Priority Challenges for the YearEnding March 31, 2013！

Our top priority challenges

Check

Number one
priority

In JapanEnhance the “HOME’S” website

Number twopriority

Overseas
Put our business on a firm footing in the countries we have
expanded into and consider new target countries

Number threepriority

In Japan
Develop our new businesses towards attaining profitability for them25
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Top Priority Challenges for the YearEnding March 31, 2013
Point

The concept of our future businessdevelopment

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”

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

Our Top Priority Challenges for the YearEnding March 31, 2013

Promote a revenue expansion spiral through raising our property comprehensiveness and improving
the matching rate

Po i n t(i) Expand the affiliatedstore membership••(ii) Up-selling

See Page 28
for details•

Put in place a new affiliated store
prospecting team
Seek to reduce the number ofmembership withdrawals throughenhancing our relationship with theexisting affiliated stores

DB

Sales
expansion
cycle

Expand revenue further throughachieving improved media value

See Page 28
for details

Put in place function-by-function
specialized teams
Consulting-based marketing
Expand sales for optional products••(vi) Attain increased sales
on the back of a greaternumber of inquiries•

Business growth scenario for “HOME’S”(iii) Increasing number ofproperties••

See Page 28
for details

Expand the number of uniqueproperties by attaining an
increased number of affiliatedstoresGrow the number of properties
posted by our existing affiliatedstoresCCS(iv) Draw customers to our
website(v) Achieve higher matching rates
See Page 30
for details•••

Introduced a recommendation engine
Attain improved usability
Increasing number of matching byincreasing number of properties•••

See Page 29
for details

Step up the branding promotion efforts
Enhance the site contents
Expand customer drawing vehicles witha focus on smart devices

27
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Initiatives for the YearEnding March 31, 2013
Point

In Japan: Enhance the “HOME’S” website

Achieve an increased number of properties efficiently, driven byfunction-based marketing business units

Business unit

Prospective
affiliatedstore

New affiliated store
prospecting activities
by specialized teams

Consulting-based
marketing throughregular visit services

Existing
affiliatedstore

Consulting-based
marketing throughtelephone call services

Action points

・New affiliated store prospecting
activities by specialized teams
・Acquire new affiliated stores throughproxy marketing services

・Consulting-based marketing
utilizing market data
・Expand sales for optional products

・Seek to prevent membershipwithdrawals and a decline in thenumber of properties by enhancing
our relationship with the existing
affiliated stores

Promotenewenrollment

Up-sellCurbmembershipwithdrawals

Attain an even greater number of properties

Target28
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Initiatives for the YearEnding March 31, 2013
Point

In Japan: Enhance the “HOME’S” website

Expanding the advertising budget from 2.7 billion yen to 3.1 billion yen – Stepping up our branding
promotion efforts to attain a greater customer drawing capability

Non-virtual
event

Campaign

Promotion
targetingsmartphone

SEM & SEO
measures

Reinforce

Branding
・TV commercial
・Display advertisement
・Outdoor advertisement
・Area marketing

Sponsoractivities

Social media

・
・
・

29
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Initiatives for the YearEnding March 31, 2013
Point

In Japan: Enhance the “HOME’S” website

Focus the efforts on smart devices and aim to launch recommendation services

Step up our CCS = Achieve improved matching rates(CCS: Communication & Concierge Service) Develop services designed for smart devices on a prioritized basis
 Roll out a recommendation engine■Smart Phone Enhance the site contents■iPad Upgrade the functions to facilitate communication
between the website user with the real estate company

Aim to achieve expanded sales through attaining
an increased number of inquiries
30
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Initiatives for the YearEnding March 31, 2013
Point

Overseas business development

Aim to provide multi-language-search-based comprehensible information site services offering
integrated Asian real estate information！

Overseas strategy concept:
Start with the provision of real estate information servise witha focus on Asia

Background:
Asia offers the potential of rapid economic growth andsubstantial growth for the internet
Many Asian areas have under-developed real estate
information infrastructure (a situation akin to that for Japan adecade ago)Asianregioninformation
site

Check

Priority points for our overseas strategy
Property comprehensiveness:
A website offering high levels of property
comprehensiveness as is done by our website inJapan
Provide a wealth of integrated information covering
all the segments, i.e. newly-built, previously-owned,
rental and resort properties

Borderless:Integrate real estate information into one single
database, and make available a common information
platform that allows the user to search Asian
real estate information from any location in the world

Multi-language-based concierge services:
Make available a platform allowing the user to search,
for example, Thai property information in English,
Japanese and Chinese
Intend to also provide concierge services enabling
the user to place an inquiry in different languages, inaddition to the information search services

In April 2011, the “HOME’S” website became the first site in Japan to offer
English and Chinese language services
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

31

Our Initiatives for the YearEnding March 31, 2013
Point

Pursue overseas businesses

Strive to run our businesses stably in countries we have already expanded into and to continue
considering new target countries■Internet penetration and GDP growth rates in Asian countries

Country(territory)

Internet users(million)Internet
GDP growth rate
penetration rate (past 3-year avg.)

2011

2011

2009-2011■Current statuses and targets for countries NEXT has already expanded into
Countries
Equity holding
NEXT hasService launchratio*
expanded into
99.9%

Jan. 2012

123

200

50 to 60
million yen

China

40.2%

Apr. 2012

1 million

2.25 million

3.0 to 4.0
billion yen

Indonesia

50.0%

May 2012(plan)――

30 to 40
million yen

12.2%

513

38.40%

9.6%

India

121

10.20%

7.9%

Japan

101

80.00%▲0.6%

Indonesia

55

22.40%

5.7%

South Korea

40

82.70%

3.4%

TaiwanVietnam30

33.70%

6.0%*Includes indirect equity participation

The Philippines

29

29.20%

4.1%

Thailand18

27.40%

1.9%

Malaysia

1761.70%

3.5%

Taiwan16

70.00%

4.3%

Hong Kong4

68.70%

3.1%

Singapore3

77.20%

6.2%

Country name in red: The countries NEXT has alreadyexpanded into

Targeted number Targetedof properties for sales for FY
March 31, 201303/2015

Thailand

China

Source :Internet World Stats, JETRO

Current
number ofproperties■Thai version of “HOME’S”

Equity participation in a local portal site

■China version of “HOME’S” ■ Local portal site in
Taiwan (Rakuya.com)

32
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Our Initiatives for the YearEnding March 31, 2013

The concept of our future businessdevelopment

Sales

Mid/Long-term goals【Corporate Management Metrics】
1. Aim to achieve 25% operating profit margin
2. Improve productivity
3. Return of profits to shareholders throughcontinuous dividend payments and increased
profits【Business Development】
1. HOME’S as Absolute No.1 = Improve property
comprehensivenessInternational
Expansion

Asia・ASEAN
・Real Estate Information Service

2. Overseas Business Expansion
3. Secure a new revenue base

Aim to improve
the infrastructureof living by
develop businessthat follow our
Corporate
Philosophy

New Departments
・Local Community Information Service “Lococom”
・Financial Information Service ”MONEYMO”
・Medical Information Site ”eQOL Skincare”
・Career Information Website, etc.

Main Business・Real Estate Information Service “HOME’S”

Time
33
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Company Credo and Business Principles

Company Credo

Altruism
Our priority is making people happy.
Everyone in the world: Consumers, Clients,
Coworkers, Family, and so on…

Corporate Philosophy (NEXT Group Vision)

Create a society where everyone canattain comfort and happiness throughcontinuing social innovations.

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

NEXT Co., Ltd. TSE 1st Section 2120

Reference Materials

Reference Materials

・・・Page 35 – 49

Our goal in founding NEXT

・・・Page 36

NEXT’s service offerings

・・・Page 37

Real Estate Information Service “HOME’S”

・・・Page 38

The NEXT Group’s overseas business strategy

・・・Page 39 – 42

Reference data

・・・Page 43 – 46

About NEXT and its shareholder breakdown

・・・Page 47 – 48

IR information contact details and “IR News”

・・・Page 49

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

Our Goal in Founding NEXT

Eliminate the world’s “negatives” such as “worry,” ”dissatisfaction,” and“inconvenience”

We at NEXT seek to provide all kinds of lifestyle services through the internet
to help people in the world lead comfortable lives with peace of mind

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

NEXT’s Service Offerings

About NEXT

NEXT seeks to provide, through the internet, all kinds of lifestyle services
related to not only “residential properties” but also “local community” and“medical services” in order to help people in the world lead comfortable lives
with a peace of mind anytime anywhere

Local
community
information

Medicalinformation

Education
information

Finance
information

Housing
information

Career education services

37
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

“HOME’S” Business Model
Point“HOME’S” business model: Fee structure based on the number of inquiries

CustomerNEXT (“HOME’S”)

User

Inquiry(Real-estate Rents &Transactions)

・Real estate broker
・Real estate
managementcompany

View information
Make inquiry

Post property
information(Real-estate Rents &Transactions)Upper: PC site

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

Inquiry
Developer・Home builder
・Building contractor
・Remodeling
contractor

Register property
information
Register company
information andconstruction workcase examples
Left: Mobile site
Right: Smart phone application

Free

Charge38
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

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！

Check① Kingdom of Thailand
Business commencement date:
Scheduled for January 2012
Type of company: Subsidiary (99.9%)
Service to provided: Real estate
information service① 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.

39

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！

Check② People’s Republic of China
Business commencement date:
Scheduled for January 2012
Type of company: Equity method
affiliate (39% equity investment)
Service to be provided: Real estate
information service

NEXT Co., Ltd.
Sharing networks with real estate companies
and partnerships with companies capable of
attracting customers on the Internet
Product capabilities of HOME’S products
HOME’S’ website operating expertise
Technical capabilities of NEXT
Compatibility with devices including smart
phonesPeople’s Republic② of China

Competitors

Market conditions

Crowded field with 3 major companies (ofwhich 2 are listed companies) and small- andmedium-sized companies

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

The industry leader, SouFun HD, recorded
sales of USD224,490 thousand and operating
profit of USD 78,420 thousand
Information is of poor quality, as information
screening is not widespread
A fixed monthly fee charge for posting is theprevalent fee structure.

On the other hand, the government has
strengthened controls over soaring real estate
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 of newspaper advertizing to become theNo.2 advertizing media.

Number of Internet users: 460 million(penetration rate: 35%)
Number of mobile phone users: 750 million(penetration rate: 57%)

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

The NEXT Group’s Overseas Business Strategy

TaiwanEntered into a capital alliance with Taiwan’s top-class portal site operator with the aim of expanding
our business globally

Point
！

Check

③Taiwan③

Equity participation target:
Rakuya International Info. Co. Ltd.

TaiwanThe portal operated: Rakuya.com<URL: http://www.rakuya.com.tw/>
Equity interest value: 66.12 million Taiwan dollars(approx. 170.85 million yen)
Equity interest ratio: 12.18% held by NEXT

Rakuya International Info. Co., Ltd.

Local competitors

Runs Rakuya.com, Taiwan’s leading real estate
information portal site with property listings ofmore 400,000

Top eight local operators account for one
quarter of the Taiwanese real estate market

Rakuya’s shareholders are composed ofcompanies that are well versed in internet
services and the real estate business and havealready expanded in the China market, so NEXT
expects to enjoy synergistic effects

The affiliated store business model anddirectly-run store business model coexisting:
70% of the market is accounted for by small- to
medium-sized real estate brokers

Receives from NEXT its technological expertiseand the knowhow for running the “HOME’S”
websiteNEXT seconds one Director to Rakuya

Market conditions
Internet users: Approx. 16.14 million
Internet penetration rate: Approx. 70%
Mass media advertising spending (2010):
Approx. 141.1 billion yen
Internet advertising market size: Approx. 24.0
billion yen, representing about 17% of the nation’s
entire advertising spending
Taiwan’s newly-built housing market amounted to
4 trillion yen for 2011
The country’s real estate trading market is likely to
be worth over 10 trillion yen

Taiwan is ranked 4th in the world and 3rd in Asia interms of real estate market value appreciation rate
Taiwan’s top eight real estate operators account for
one quarter of the local market

41
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

The NEXT Group’s Overseas Business Strategy
Point

Indonesia

NEXT made an Indonesian company its local subsidiary in Indonesia, the market that is expected topost a fast-paced growth！

Check④Indonesia
Planned service launch: May 2012
Format: Subsidiary (a 50.0% stake acquired)
Services: Real estate information service
Concierge services

PT. Rumah MediaA partnership with the company having
human connections with the nation’s politicaland business circles as well as high net worth
individuals owning properties“HOME’S” service appeal“HOME’S” site operation knowhow
NEXT’s technological expertise④

Indonesia

Local competitors

Market conditions

IPGA and PropertyGuru entered the portal
business market ahead of competitors

Indonesia’s population is the fourth largest in
the world, and the nation’s per capita income
grew by 15.3% per year from 2004 to 2010

The number of properties advertised by the two
operators represents a mere 0.16% (80,000
units) at a maximum of the entire number of thenation’s properties (50 million units)

Insufficient amount of information available,
services and customer drawing ability
Lack of high-quality agentsNEXT seconds a COO

Internet user population: 39.6 million (ranked
4th in Asia)
Likely to grow to 85 million by 2015
Strong housing demand due to the growing
population and a rapid urbanization
Needs for high-end rental properties for
expatriates
Japanese nationals living in Indonesia: 12,469
persons (up 6.6% year on year; as of October
1, 2011)42
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Additional information

Summary of Statements of income
Unit: Million yen

Sales per segment

FY03/2012 FY03/2012 FY03/2013 FY03/2013
1H
2H
1H
2H
(Actual)(Actual)(Forecast) (Forecast)

Unit: Million
yen

Segment

FY03/2012 FY03/2012 FY03/2013
1H
2H
1H(Actual)(Actual)(Forecast)

FY03/2013
2H(Forecast)

Sales

4,820

5,499

4,951

5,381

Real Estate Rents &Transactions

2,804

3,152

2,724

2,977

Cost of sales

95

133

171

182

New condominium

681

721

675

722

4,440

4,635

4,431

5,010

New detached house

639

765

749

788

Custom-built houseand refurbishment

266

329

324

324

Renter’s Co., Ltd.

185

213

223

239

Others

197

263

186

236

Local
information
services

Lococom

14

16

17

31

OthersOthers

29

37

47

60

Total

4,820

5,499

4,951

5,381

Selling, general &administrative (SG&A)
expenses
Personnel costs

1,653

1,532

1,559

1,509

Advertising costs

1,154

1,580

1,243

1,885

Operating expense

104

136

160

183

Depreciation/amortizatio
n cost

243

236

221

253

Allowances of
uncollectible
receivables andperformance guarantee

15

▲15

9

9

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

1,268

1,164

1,238

1,170

Operating profit

251

700

347

188

Net profit

74

391

154

61

Operating profit margin
(OPM)

5.2%

12.7%

7.0%

3.5%

Real estate
information

43
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Additional information
Statements of income
Previous year
FY03/2011
AmountSales
Real estate information services
Real Estate Rents & Transactions
New condominium
New detached house
Custom-built house and refurbishment
Renter’s Co., Ltd.
OthersLocal information services
Guarantor operating business
OthersCost of sales
Selling, general & administrative (SG&A) expenses
Personnel costs
Advertising costs
Operating expense
Depreciation/amortization cost
Allowances of uncollectible receivables and performance guarantee
Other selling, general & administrative (AS&A) expenses
Operating profit
Net profit

10,738
10,407
7,096
1,131
994
501
331
351
35
268
26
229
8,759
3,507
2,460
313
367
81
2,028
1,749
1,107

Current year
FY03/2012

Ratio
100.0%
96.9%
66.1%
10.5%
9.3%
4.7%
3.1%
3.3%
0.3%
2.5%
0.2%
2.1%
81.6%
32.7%
22.9%
2.9%
3.4%
0.8%
18.9%
16.3%
10.3%

AmountComparison

Ratio

10,31910,222
5,956
1,403
1,404
596
399
461
30
－
67
291
9,075
3,186
2,735
240
479
－
2,433
952
465

Percentagechange
△418
△3.9%
△185
△1.8%
△1,139△16.1%＋271＋24.0%＋409＋41.2%＋94＋18.9%＋67＋20.4%＋110＋31.5%△4△13.9%△268＋40＋150.6%＋62＋27.2%
＋316
＋3.6%
△321
△9.2%
＋274
＋11.2%△72△23.2%＋112＋30.6%△81－＋404＋19.9%△797△45.6%△641△57.9%

Change100.0%
99.1%
57.7%
13.6%
13.6%
5.8%
3.9%
4.5%
0.3%
－
0.6%
2.8%
87.9%
30.9%
26.5%
2.3%
4.6%
－
23.6%
9.2%
4.5%

Number of Affiliated Stores and Properties Posted of 「HOME’S Real Estate Rents & Transactions」
Unit : stores

FY03/2011

FY03/2012

Number of Affiliated Stores
Hokkaido & Tohoku
North Kanto
Capital Region
Hokuriku & Koshinetsu
Tokai
Kinki
Chugoku
Shikoku
Kyushu & Okinawa

9,563
252
228
6,342
150
394
1,730
138
93
236

9,926
253
232
6,598
156
408
1,824
108
98
249

Price of Affiliated Stores

56,09557,649Comparison
Percentage
Changechange
＋363
＋3.8%
＋1
＋0.4%
＋4
＋1.8%
＋256
＋4.0%
＋6
＋4.0%
＋14
＋3.6%
＋94
＋5.4%
△30
△21.7%
＋5
＋5.4%
＋13
＋5.5%
(Unit : yen)
1,554
＋2.8%

Unit : properties
Number of Properties Posted
Hokkaido & Tohoku
North Kanto
Capital Region
Hokuriku & Koshinetsu
Tokai
Kinki
Chugoku
Shikoku
Kyushu & Okinawa

FY03/2011
2,483,612
127,708
74,606
1,034,755
54,095
262,349
701,50370,50042,790115,306

FY03/2012
3,396,226
190,179
106,489
1,461,263
66,215306,543
922,433
106,550
61,159175,395

Comparison
Percentage
Changechange＋912,614
36.7%＋62,47148.9%＋31,88342.7%＋426,508
41.2%＋12,12022.4%＋44,19416.8%＋220,930
31.5%＋36,05051.1%＋18,36942.9%＋60,08952.1%

44
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Additional information
Quarterly consolidated sales and operating profit and loss per segment

Quarterly consolidated statements of income
Q1

FY03/2011
Q2
Q3

Q4

Q1

Sales
2,899
2,613
2,584
2,640
2,357
Real estate information
2,612
2,603
2,568
2,623
2,337
Real Estate Rents &
1,843
1,808
1,750
1,693
1,398
New condominium
258
267
279
326
320
New detached house
220
231
256
286
304
Custom-built house and refurbishment123
120
119
138
129
Renter’s Co., Ltd.
86
78
79
87
89
Others
80
97
82
91
94
Local information services
8
7
9
9
5
Guarantor operating business 268――――
Others92
7
614
Cost of sales
46
49
59
73
58
Selling, general & administrative (SG&A)
2,162 expenses
1,923
2,076
2,597
2,305
Personnel costs
943
838
867
857
911
Advertising costs
454
525
517
963
567
Operating expense
107
80
71
53
50
Depreciation/amortization cost 81
77
83
123
119
Allowances of uncollectible receivables
56
and10
performance
3 guarantee
102Other selling, general & administrative
518 (AS&A)
390 expenses
532
587
654
Operating profit
690
641
448
△30
△5
Net profit
296
603
253
△45
△11
Operating profit margin
23.8%
24.5%
17.3%
△1.1% △0.3%

FY03/2012
Q2
Q3

Q4

2,462
2,438
1,405
361
335
137
95
103
9
―
14
70
2,134
742
587
53
124
13
614
257
85
10.5%

3,012
2,983
1,737
390
400
179
110
163
7
―
22
94
2,552
845
961
68
118
△17
575
366
212
12.2%

2,486
2,462
1,415
330
364
149
102
99
9
―
14
68
2,083
686
619
68
117
1
589
334
178
13.5%

Q1

Sales
2,899
Real estate information
2,612
Local information services
8
Guarantor operating business 268
Others9Operating profit
690
Real estate information
769
Local information services△91
Guarantor operating business19
Others△8
Operating profit margin
23.8%
Real estate information
29.5%
Local information services―
Guarantor operating business 7.7%
Others―

FY03/2011
Q2
Q3

Q4

Q1

FY03/2012
Q2
Q3

Q4

2,613
2,603
7
―
2
641
720
△70
―
△8
24.5%
27.7%
―
―
―

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

2,357
2,337
5
―
14
△5
307
△215
―
△97
△0.3%
13.1%
―
―
―

2,462
2,438
9
―
14
257
583
△214
―
△111
10.5%
23.9%
―
―
―

3,012
2,983
7
―
22
366
514
△60
―
△87
12.2%
17.2%
―
―
―

2,584
2,568
9
―
7
448
566
△70
―
△47
17.3%
22.1%
―
―
―

2,486
2,462
9
―
14
334
508
△142
―
△30
13.5%
20.6%
―
―
―

Quarterly statements of income
Q1

FY03/2011
Q2
Q3

Q4

Q1

Sales
2,411
2,535
2,505
2,553
2,267
Real estate information
2,402
2,524
2,488
2,536
2,247
Real Estate Rents &
1,843
1,808
1,750
1,693
1,398
New condominium
258
267
279
326
320
New detached house
220
231
256
286
304
Custom-built house and refurbishment ―
120
119
138
129
Others
80
97
82
91
94
Local information services
9
7
9
9
5
Others02
7
614
Cost of sales
34
40
51
63
49
Selling, general & administrative (SG&A)
1,765 expenses
1,870
2,021
2,537
2,245
Personnel costs
772
807
834
823
873
Advertising costs
423
525
517
962
567
Operating expense
52
77
69
51
48
Depreciation/amortization cost 69
72
76
116
114
Allowances of uncollectible receivables
0and performance
9
3 guarantee
102Other selling, general & administrative
447 (AS&A)
377 expenses
518
573
640
Operating profit
611
624
433
△47
△27
Net profit
307
8
245
△54
△21
Operating profit margin
25.4%
24.6%
17.3% △1.9% △1.2%

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

FY03/2012
Q2
Q3

Q4

2,366
2,342
1,405
361
335
―
240
9
14
61
2,073
703
587
51
119
12
600
231
73
9.8%

2,902
2,872
1,737
390
400
―
343
7
22
83
2,490
808
961
64
112
△16
559
329
198
11.3%

2,383
2,359
1,415
330
364
―
249
9
14
59
2,023
650
619
63
111
1
576
300
165
12.6%

45

Additional information

Real Estate Market Data

【Number of Apartments for Sales（annual）】
2006

2007

2008

2009

2010

Source:Real Estate Economic institute Co.LTD
2011
Jan-12
Feb-12Mar-12

74,463△11.5%
30,146△8.8%
51,257＋2.0%
155,866△6.9%

61,021△18.1%
30,219＋0.2%
42,430△17.2%
133,670△14.2%

43,733△28.3%
22,744△24.7%
31,560△25.6%
98,037△26.7%

36,376△16.8%
19,784△13.0%
23,435△25.7%
79,595△18.8%

44,535＋22.4%
21,716＋9.8%
18,450△21.3%
84,701＋6.4%

44,499△0.1%
20,219△6.9%
21,864＋18.5%
86,582
＋2.2%

2006

2007

2008

2009

2010

Source:Real Estate Economic institute Co.LTD
2011
Jan-12
Feb-12Mar-12

4,200
＋2.2%
3,380
＋6.8%
3,560
＋2.0%

4,644
＋10.6%
3,478
＋2.9%
3,813
＋7.1%

4,775
＋2.8%
3,513
＋1.0%
3,901
＋2.3%

4,535
△5.0%
3,411
△2.9%
3,802
△2.5%

4,716
△4.0%
3,452
＋1.2%
4,022
＋5.8%

4,578
△2.9%
3,490
＋1.1%
3,896
△3.1%

2006

2007

2008

2009

Source:Ministry of Land, Infrastructure, Transport and Tourism
2010
2011
Jan-12
Feb-12Mar-12

543,463＋7.8%
238,614＋4.0%
138,261＋0.3%
358,519＋1.5%

441,733△18.7%
168,918△29.2%
124,238△10.1%
314,865△1.2%

464,851＋5.2%
182,555＋8.1%
115,785△6.8%
318,511＋1.2%

321,470△30.8%
76,678△58.0%
91,254△21.2%
284,631△10.6%

298,014△7.3%
90,597＋18.2%
110,358＋20.9%
305,221
＋7.2%

2006

2007

2008

2009

2010

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%【Trend of Population and Household （annual）】
2006

2007

2008

2009

2010

Population（ten thousand persons）
year-on-year
Household（thousand）
year-on-year

12,777＋0.00%
48,023＋1.0%

12,769△0.06%
47,957△0.1%

12,751△0.14%
48,013＋0.1%

12,806＋0.43%

Capital Region
year-on-year
Kinki
year-on-year
Otheryear-on-year
Nationwide
year-on-year【Trend of Price for Apartements（annual）】
unit:ten thousand yen

Capital Region
year-on-year
Kinki
year-on-year
Nationwide
year-on-year【New build properties（anuual）】

House for rent
year-on-year
Apartment house
year-on-yearHouseyear-on-year
Owned properties
year-on-year【Internal migrants（anuual）】

Internal migrants
year-on-year

12,777＋0.00%
47,531＋1.0%

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

285,832△4.1%
116,755＋28.9%
116,798＋5.8%
305,626＋13.3%

1,819＋32.6%
1,007△22.6%

4,309
＋1.7%
3,279
△5.9%

24,256＋1.1%
10,167
△2.6%
9,594
＋2.3%
21,687△2.7%

3,918＋13.0%
1,394
△7.1%

4,475
△5.1%
3,232
△7.8%

22,798＋9.4%
11,254＋19.5%
9,967＋6.2%
22,462
＋0.2%

3,462
△6.1%
2,316
＋34.7%

4,668
△0.1%
3,749
＋11.0%

23,468＋7.8%
10,167
△2.6%
9,703
＋4.1%
22,335△2.3%

Source:Ministry of Internal Affairs and Communications
2011
Jan-12
Feb-12Mar-12

5,044,239△0.8%

295,525＋0.0%

337,747＋4.6%

842,438△1.3%

Source:Ministry of Internal Affairs and Communications
2011
Jan-12
Feb-12Mar-12

12,772△0.27%

12,773△0.23%

12,770△0.22%

12,765△0.22%

46

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

523 (including contingent employees totaling 23) A decrease of 74 from March 31, 2011

Business contents

Real estate information service
Local information service
OthersNumber of shareholders

3,380 (as of March 31, 2012)

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: 18,770,000 shares

A decrease of 354 from March 31, 2011

Renter’s Co.(100%)
HOME’S PROPERTY MEDIA(THAILAND)CO.,LTD. （99.9%）
As of March 31, 201247
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.

Shareholder composition
Point

Decrease of 354 shareholders from March 31, 2012 to 3,380 shareholders
Number of shareholders

3,380(As of March 31, 2012), Decrease of 354 from March 31, 2011

Major shareholders

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

Financial institutions

Financial instruments
business operators

21 (0.6%)28(0.8%)Treasury stock

Other
corporations

1 (0.0%)35(1.0%)Total 3,380

Large Shareholders

Foreign corporations 54(1.6%)
Individuals andothers3,241 (95.9%)
Name

Numberof shares
held

Ratio ofshares held
to total
number ofissued shares(%)

Takashi Inoue
Rakuten Inc.
J.P. MORGAN CLEARING CORP-SEC
Tapug Corporation
Baillie Gifford Japan Trust PLC

Number of sharesNEXT Co., Ltd. Employee Shareholding Association
Status of shares

Item

Japanese
Financial
Financi
government
instruments Otheral
and municipal institutio business corporations
governments
operators
ns

Foreigncorporations

Individu
als andothersTreasurystock

Number of shares
held
Shareholdings
percentage of the
total

Total

Status ofless-than
one unit
shares370
0.0%Bank of New York GCM Client Accounts JPRD ISG (FE-AC)
Japan Trustee Services Bank, Ltd. (Trust Account)
Prospect Japan Fund Ltd.
GOLDMAN SACHS & CO. (Regular Account)
Total

48
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)
http://www.next-group.jp/en/index.html (English)

IR News

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

49
Copyright (c) 2011 NEXT Co.,Ltd. All Rights Reserved.