May 8, 2018
TOKAI Holdings Corporation
Katsuhiko Tokita, President & CEO(Code No. 3167 Tokyo Stock Exchange First Section)

To whom it may concern

Financial Results for the Fiscal Year Ended March 31, 2018and Earnings Forecast for the Fiscal Year Ending March 31, 2019
V-shaped Recovery to Drive First Record Profits in Two Years
TOKAI Holdings Corporation (hereinafter, the “Company”) today announced its financial results
for the fiscal year ended March 31, 2018, and its earnings forecast for the fiscal year ending March
31, 2019.

1． Customer Count Up Sharply by 310 Thousand from Start of the Year, Clearing
Full-Year Target of 2.88 Million
In May 2017, the Company announced its third medium-term management plan Innovation Plan
2020 “JUMP” and growth strategies to attain plan targets. This entails investing a total of 100
billion yen over four years in M&A and aggressively pursuing an alliance strategy, in addition to
making progress with existing priorities such as increasing the number of continuing customers,
securing multiple contracts based on the “Total Life Concierge” (TLC) concept, and expanding
service areas. The plan looks to roughly double the customer count, sales, and operating profit by
the fiscal year ending March 31, 2021 versus the fiscal year ended March 31, 2017.
During the fiscal year, the Company conducted upfront spending and implemented an aggressive
sales program to increase the customer count, which forms its earnings base, with a view toattaining its medium-term targets. As a result, the “continuing customer” count reached 2,876
thousand as of March 31, 2018, increasing by 312 thousand (+12.2%) from March 31, 2017, andexpanding the Company’s earnings base.
The net increase in the customer count at existing businesses (excluding M&A activity such as
Tokyo Bay Network Co., Ltd. and TV Tsuyama Inc.) was over six times the net increase recorded in
the fiscal year ended March 31, 2017.
The net increase in the customer count broken down by main services was as follows: Gas (LP andcity gas) 19,109 (versus a net increase of 7,897 in the previous fiscal year); CATV 298,428 (versus a
net increase of 23,607 in the previous fiscal year), reflecting 25,715 from existing service areas and272,713 from M&A; and Aqua (bottled water delivery) 10,998 (versus a net increase of 1,836 in theprevious fiscal year). The Information and Communications business also registered a net increaseof 26,892 (versus a net increase of 1,732 in the previous fiscal year) in the LIBMO MVNO service
launched in February 2017.

2． Upfront Spending and Aggressive Sales Program to Expand Earnings BaseDuring the fiscal year, the Company conducted upfront spending on initiatives such as theacquisition of new customers and prevention of service cancellations, with an eye toward future
growth. It expanded its customer base, and positioned the year as a period to put the Company on
track for record profits in the next fiscal year and beyond. It also successfully conducted anaggressive sales program and achieved its customer count target, as noted above.
On the earnings side, operating profit was down 1.8 billion yen (-14.0%) year on year to 11.0 billion
yen due to the abovementioned upfront cost burden, but sales were up 7.4 billion yen (+4.2%) year
on year to 186.1 billion yen thanks to a higher customer count, M&A effects, and other factors.
(Millions of yen)
FY03/18

FY03/17

Results

Results(April 1, 2017 toMarch 31, 2018）(April 1, 2016 to
March 31, 2017)

Sales

186,069

178,631

189,400+7,438-3,331

Operating profit

10,971

12,75011,410-1,779-439

Recurring profit

11,191

12,775

11,360-1,584-169

Net income

6,620

7,337

6,450

-716

+170

EPS (Yen)

51.19

64.46

50.88

-13.28+0.31

Forecast

VersusYoY

Forecast

3． Ongoing Progress with Improvement of Financial Position
Turning to financial position, the Company improved its equity ratio by 1.8pp from 34.5% at theend of the previous fiscal year to 36.3% as a result of the booking of net income and progress withthe conversion of convertible bonds with stock acquisition rights.
Free cash flow was down from the previous fiscal year due to upfront spending to aggressively
expand the customer base and M&A investment, but the Company further reduced the balance ofinterest-bearing debt and maintained the interest-bearing debt/EBITDA ratio at the year-earlier
level.

4． Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2019
Anticipates First Record Profits in Two Years Supported by Successful Investments
in Previous Fiscal Year
The Company expects a renewed upturn in profits in the fiscal year ending March 31, 2019.
Aggressive investments to expand the customer base in the previous fiscal year have paid off, andthe Company accordingly forecasts record profits across all profit categories.
In addition to an anticipated substantial increase in profits due to a higher customer count andother factors as a result of initiatives undertaken in the previous fiscal year, the Company also
looks for effects from a partial decline in special upfront costs recorded in the previous fiscal year.
It will continue to conduct upfront spending to expand its customer base, and work to realize atransition to a profit growth track heading into the final year of its medium-term plan.
Under its policy of consistently providing stable dividends, the Company targets an annualdividend of 28 yen.

(Millions of yen)
FY03/19 Forecast

FY03/18 Results(April 1, 2018 toMarch 31, 2019)(April 1, 2017 toMarch 31, 2018)

YoY
ChangePercent
ChangeSales

195,600

186,069+9,531+5.1%

Operating profit

13,96010,971+2,989+27.2%

Recurring profit

13,88011,191+2,689+24.0%Net income

7,920

6,620

+1,300+19.6%EPS (Yen)

60.48

51.19

+9.30

+18.2%

FY03/19 (Forecast)

FY03/18

FY03/17

End of Q2 (Yen)

14.00

14.00

11.00

Year-end (Yen)

14.00

14.00

17.00

Annual dividend total (Yen)

28.00

28.00

28.00

—

54.7%

43.4%

Consolidated payout ratio(Note) The year-end dividend for FY03/17 was an ordinary dividend of 11.00 yen plus a commemorative dividend of 6.00 yen.

For details, please see the attached materials, entitled “Financial Results for the Fiscal Year
Ended March 31, 2018 and Earnings Forecast for the Fiscal Year Ending March 31, 2019.”
Furthermore, for the Company’s earnings announcement for the year ended March 31, 2018,
please see the following URL.
http://tokaiholdings.co.jp/english/ir/library/earnings.html

Contact: Yoshihiro Taniguchi
Public Relations and Investor Relations Office
TEL: +81-(0)3-5404-2891
Email: overseas_IR@tokaigroup.co.jp

Financial Results for the Fiscal Year Ended March 31, 2018and Earnings Forecast for the Fiscal Year Ending March 31, 2019

TOKAI Holdings Corporation(Code: 3167)
May 8, 2018

Customer count up sharply by 310 thousand
from start of year
◎ The net increase in the customer count in existing businesses (excluding M&A) was over six times thenet increase recorded in the previous fiscal year, up 39 thousand versus 6 thousand in the previous
fiscal year.
◎ In addition, M&A activity such as Tokyo Bay Network and TV Tsuyama added 273 thousand customers.
◎ Cleared customer count target as projected at the start of the year, and this will lead to profit growth
driven by an increase in the number of customers paying monthly fees going forward.
Gas+ 19 thousand
CATV + 298 thousand
Aqua+ 11 thousand(and others)(Thousands of customers)

2,415

2,445

2,519

2,537

Net increase of

2,876

312 thousand(+12.2%)

2,558

312

2,564
273

6.0x

net increase

72
FY03/1230
FY03/1373
FY03/14

Net increase (existing businesses)

19

20

6

FY03/15

FY03/16

FY03/17

Net increase (M&A)

39

FY03/18

Year-end customer count1

Upfront spending and aggressive sales◎ Actively stepped up activities to promote growth (such as the expansion of service areas, the launch of
new communications services, and the upfront spending for prevention of service cancellations) withthe aim of putting the Company on track for record profits in FY03/19 and beyond.
◎ The customer count, which is the group’s earnings base, increased sharply as a result.
◎ On the profit side, the abovementioned upfront costs increased by 3.7 billion yen YoY, but a higher
customer count boosted profits by 1.8 billion yen, establishing the foundation for earnings in FY03/19
and beyond.

(Sales and profits: Millions of yen; EPS: Yen)

FY03/18
Results

FY03/17
Results

InitialForecasts

YoY
ChangeVersus forecast
Percent
ChangePercent
ChangeChange186,069 178,631 189,400 +7,438+4.2-3,331-1.8

Operating profit

10,971 12,750 11,410-1,779

-14.0

-439

-3.8

Recurring profit

11,191 12,775 11,360-1,584

-12.4

-169

-1.5

Net income

6,620

7,337

6,450

-716

-9.8

+170

+2.6

EPS (Yen)

51.19

64.46

50.88

-13.27

-20.6

+0.31

+0.6

Sales

2

Taking advantage of strengthened equity capital
to invest in growth◎ Equity ratio further up 1.8pp on conversion of convertible bonds and the booking of net income.
◎ Free cash flow was temporarily down due to aggressive investments in growth including 3.7 billion yen
in upfront costs for initiatives such as the acquisition of new customers and the launch of newservices, and 1.2 billion yen in M&A investment. However, interest-bearing debt declined further andthe interest-bearing debt/EBITDA ratio was maintained at the year-earlier level.

Equity ratio

34.5

%

As of March 31, 2017

Balance of interest-bearing
debt
Operating cash flow

54.1

billion yen

As of March 31, 201726.7

billion yen

FY03/17

Investment cash flow

(11.0)

billion yen

FY03/17

Free cash flow

15.7
1.9
FY03/17

➡
➡

36.3

%

As of March 31, 2018

51.0

billion yen

As of March 31, 201820.9

billion yen

FY03/18➡ (11.5)
9.4➡

billion yen

FY03/18

billion yen

FY03/17

Interest-bearing debt/
EBITDA ratio➡

billion yen

FY03/18

X

➡

1.9

x

FY03/183

Record profits in FY03/19 as investments ingrowth pay off◎ Forecasts a 2.1 billion yen increase in profits due to a higher number of customers paying monthly
fees and other effects accompanying customer growth in FY03/18 and FY03/19. Also expects
upfront and other costs to decline by 800 million yen from the previous fiscal year in FY03/19,
boosting profits by 2.9 billion yen.
◎ Plans to steadily increase the customer count through further upfront spending in FY03/19, andsteadily establish the foundations for profit growth heading into FY03/20 and FY03/21.

(Millions of yen)

FY03/19
Forecast

FY03/18
Results

YoY
Percent
ChangeChange195,600

186,069+9,531+5.1％

Operating profit

13,96010,971+2,989+27.2％

Recurring profit

13,88011,191+2,689+24.0％Net income

7,920

6,620

+1,300+19.6％EPS (Yen)

60.48

51.19

9.30

+18.2％

Sales

4

Policy of consistently providing stable dividends◎ As already publicly announced, the annual (ordinary) dividend for FY03/18 was maintained at 28 yen
per share, putting it on par with the FY03/17 level that included a 6 yen commemorative dividend.
◎ Dividend target for FY03/19 also set at 28 yen per share.

28 yenper share30

28 yenper share

14

14

14

14

FY03/18

FY03/19(Forecast)

6

25

20

15

28 yenper share

12 yen12 yen12 yen12 yen14 yenper share8

per shareper shareper shareper share

6

6

6

6

10

11

11

5

6

6

6

6

6

FY03/12

FY03/13

FY03/14

FY03/15

FY03/160Interim dividend

Year-end dividend

FY03/17

Commemorative dividend

5Appendix(1) Consolidated results(2) Sales by segment(3) Operating profit by segment(4) Consolidated financial indicators(5) Consolidated cash flows(6) Group customer count(1) Consolidated results(Millions of yen)

FY03/13

Sales

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18

181,684 188,987 187,511 180,940 178,631 186,069

Operating profit

8,934

7,392

9,003

8,245

12,75010,971

Recurring profit

8,065

7,013

8,549

8,150

12,775

11,191

Net income

3,085

2,598

3,934

3,458

7,337

6,620

EPS (Yen)

29.84

22.66

34.16

30.01

64.46

51.19
7

(2) Sales by segment(Millions of yen)

FY03/13

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18

Gas andPetroleum

94,51997,22993,06780,74573,34476,073

Information andCommunications

38,49738,803

40,11844,24649,50850,894

CATV

23,78624,187

24,35924,60825,39628,386

Building andReal Estate

15,756

19,24520,01920,975

19,511

19,807

Aqua

3,750

4,378

4,959

5,487

5,762

6,200

Others

5,374

5,142

4,987

4,875

5,108

4,706

Total

181,682 188,984 187,509 180,936 178,631 186,069
8(3) Operating profit by segment(Millions of yen)

FY03/13

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18

Gas andPetroleum

7,358

6,506

7,679

8,991

9,161

7,364

Information andCommunications

4,934

4,412

4,956

2,308

4,213

3,174

CATV

1,251

1,808

1,669

1,975

2,752

3,554

633

1,386

1,029

1,266

1,098

1,330

(926)

(2,001)(1,313)(1,119)298

246

Others,adjustments(4,318)(4,720)(5,016)(5,175)(4,775)(4,699)

Total

8,934

7,392

9,003

8,245

12,75010,971

Building andReal Estate
Aqua* Prior to elimination of indirect expenses

9(4) Consolidated financial indicators(Millions of yen)

FY03/13

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18

Total assets

177,642 173,620 165,702 160,303 161,112 166,391

Total liabilities

143,631 135,291 122,234 118,332 104,665 104,940

Total net assets

34,011

38,32943,467

41,97056,44661,450

Balance ofinterest-bearing
debt

93,66885,843

73,114

71,41054,13750,980EBITDA

26,382

24,96526,23324,98028,392

26,318Equity ratio

18.6%

21.6%

25.7%

25.6%

34.5%

36.3%
10

(5) Consolidated cash flows(Millions of yen)

FY03/13

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18

Operating cashflow

25,71322,80627,265

21,395

26,692

20,909Investment
cash flow(9,983)(9,664)(8,851) (11,015) (10,985) (11,488)

Free cash flow

15,73013,141

18,414

Financing cashflow

(14,051) (14,125) (18,764)

10,37915,7069,421(9,150) (16,643)(9,527)

11

(6) Group customer count(Thousands of customers)

FY03/14

FY03/15

FY03/16

FY03/17

FY03/18

Gas (LP and city gas)

629

628

626

634

642

661

Previous ISP
model, etc.
HikariCollaboration

816

854

859

633

527

465

—

—

4

219

299

323

LIBMO

—

—

—

—

2

29

Mobile

213

227

235

236

233

227

1,029

1,082

1,099

1,088

1,061

1,044

CATV

691

693

690

710

733

1,032

Aqua

102

122

130

133

135

146

Security

19

19

18

18

17

17

2,445

2,519

2,537

2,558

2,564

2,876
12

Information andCommunications

FY03/13

Subtotal

Total* Customer numbers under a thousand are rounded to the nearest thousand.
Information and Communications and CATV both offer communications services, and duplicated numbers are excluded from total figures.

The performance forecasts and forward-looking statements in these materials are based on
information currently available to the Company, and include potential risks and uncertainties.
Please be aware that due to changes in a variety of factors, actual results may differ
materially from the projections and other forward-looking statements in these materials.

Please contact us with any questions regarding these materials.
Public Relations and Investor Relations Office
TOKAI Holdings Corporation
11F Hamarikyu Intercity, 1-9-1 Kaigan Minato-ku, Tokyo 105-0022, Japan
Phone: +81-(0)3-5404-2891
FAX: +81-(0)3-5404-2786
http://tokaiholdings.co.jp/english/
e-mail: overseas_IR@tokaigroup.co.jp