November 1, 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 First Half of the Fiscal YearEnding March 31, 2019
Steady progress toward first record profits in two years driven by higher earnings on previous year’s
successful investments to grow business
TOKAI Holdings Corporation (hereinafter, the “Company”) today announced its financial results forthe first half of the fiscal year ending March 31, 2019 (April 1, 2018 to September 30, 2018).

1. Expanded earnings base with double-digit growth (+34.9% year on year) in the netincrease in customer countIn 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 progresswith 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 planlooks to roughly double the customer count, sales, and operating profit in the fiscal year ending March 31,2021—the final year of the medium-term plan—versus the fiscal year ended March 31, 2017.
During the first half of the fiscal year ending March 31, 2019, the Company conducted upfront
spending continuing from the previous fiscal year and implemented an aggressive sales program toincrease customer count, which forms its earnings base, with a view to attaining its medium-term targets.
As a result, the continuing customer count reached 2,893 thousand as of September 30, 2018, up
17 thousand from 2,876 thousand at the beginning of the fiscal year (versus a net increase of 13
thousand in the first half of the previous fiscal year; +34.9% year on year).
The net increase in the customer count broken down by main services was as follows (excludes theimpacts of M&A): Gas (LP and city gas) 9,060 (versus a net increase of 6,149 in the first half of theprevious fiscal year); CATV 14,357 (versus a net increase of 11,132); and Aqua (bottled water delivery)
9,466 (versus a net increase of 6,057). Overall, the net increase in the customer count exceeded theprevious year’s level.

2. A double-digit increase (+11.6% year on year) in operating profit
In the first half of the fiscal year ending March 31, 2019, sales rose by 3.9 billion yen (+4.6%) year
on year to 88.8 billion yen, record high for the first half of any fiscal year, on growth in customer
count and the impacts of M&A conducted in the previous fiscal year.
Profit was negatively affected by a decrease in sales volume of household LP gas due to higher
temperatures compared with the first half of the previous fiscal year and a rise in LP gas procurement
costs. However, profit growth on an increase in the number of monthly fee-paying customers
accompanied by an overall rise in customer count offset the negative impacts and led to a 400 million
yen year-on-year increase (+11.6%) in operating profit to 3.5 billion yen.
Higher-than-expected profit at CATV, Information and Communications, and Aqua businesses(positive impact of roughly 300 million yen) partly offset the impact of decline in household LP gas sales
and the rise in LP gas procurement costs (negative impact of about 400 million yen), preventing
operating profit from falling more than 200 million yen, or 6.1%, below forecast.
(Millions of yen)
1H FY03/19
Results

1H FY03/18
Results

1H FY03/19
Forecasts(April 1, 2018 toSeptember 30, 2018)(April 1, 2017 to
September 30, 2017)(April 1, 2018 toSeptember 30, 2018)

Sales

88,84084,911

Operating profit

3,475

Recurring profit

YoY
ChangeVersus
Forecasts

90,100+3,929-1,2603,114

3,700+361-225

3,580

3,143

3,650+437-70

Net income

1,736

1,2461,890

+490

-154

EPS (Yen)

13.26

9.76

14.43

+3.50

-1.17

3. Targets record profits for the fiscal year ending March 31, 2019
In its consolidated earnings forecasts announced on May 8, 2018, the Company revealed its plan topost first record profits for all profit categories in two years driven by the success of aggressive spending
to increase customer count in the previous fiscal year.
The Company expects a 2.1 billion yen increase in profits on growth in the number of monthly
fee-paying customers accompanied by efforts to increase customer count in the current and previous
fiscal years. Based on the expected profit growth coupled with a partial decline in special upfront costs
recorded in the previous fiscal year, the Company projects operating profit to increase by 3.0 billion yen
year on year to 14.0 billion yen.
The Company has made no revisions to its full-year consolidated earnings forecasts nor dividend
forecasts for the fiscal year ending March 31, 2019.
Under its policy of consistently providing stable dividends, the Company plans to pay an annual
dividend of 28 yen per share.

(Millions of yen)
FY03/19 Forecasts

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

YoY

Sales

195,600

186,069+9,531

Percent
Change+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%

Change(Yen)
FY03/19 (Forecast)

FY03/18

Interim (End of Q2)

14.00

14.00

Year-end

14.00

14.00

Annual dividend total

28.00

28.00

—54.7%

Consolidated payout ratio

For details, please see the attached materials, entitled “Financial Results for the First Half of theFiscal Year Ending March 31, 2019.”
Further, for the Company’s earnings announcement for the first half of the fiscal year ending March31, 2019, 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 First Half of theFiscal Year Ending March 31, 2019
TOKAI Holdings Corporation(Code: 3167)
November 1, 2018

Net increase in customer count up
by double-digit YoY◎ 1H saw a net increase in customer count of 17,303, up 34.9% YoY.
◎ Mainstay LP Gas and CATV businesses substantially contributed to the increase in customer count.
◎ From Q3 onward, TOKAI plans to accelerate the pace of net increase in customer count to achieve
an annual net increase of 64,000 (+62% YoY).
Of which:
LP Gas+35,764+64

Thousands of customers

CATV
Of which:
LP Gas+9,011

CATV+14,357+28,839+47+39+17+10+7+6+27+13+7Q1Q21HFY03/18*Excludes increases in customer count resulting from M&A2HFull-year

FY03/19

1

Double-digit increase YoY in all profit categories◎ Posted record high 1H sales thanks to an increase in customer count and effects of M&A conducted inFY03/18◎ Profit was up 400 million yen (+11.6%) YoY on greater number of monthly fee-paying customers
accompanying an increase in customer count.
◎ Excluding the impact of lower LP gas sales volume due to higher temperatures and higher LP gas
procurement costs, TOKAI made steady progress toward forecasts.
Millions of yen

1H FY03/19
Results

1H FY03/18
Results

1H FY03/19
Forecasts(April 1, 2018 to(April 1, 2017 to(April 1, 2018 toSeptember 30, 2018) September 30, 2017) September 30, 2018)

YoY
ChangeVersus Forecasts

Percent
ChangeChangePercent
ChangeSales

88,84084,911

90,100 +3,929+4.6 -1,260-1.4Operating profit

3,475

3,114

3,700+361

+11.6

-225

-6.1

Recurring profit

3,580

3,143

3,650+437+13.9-70-1.9

Net income

1,736

1,246

1,890+490+39.3-154-8.1

EPS (Yen)

13.26

9.76

14.43+3.50+35.9-1.17-8.1
2

Targets record profits in FY03/19◎ Plans to post first record profits for all profit categories in two years with the success of aggressive
investments to expand customer base in FY03/18◎ Expects a 2.1 billion yen increase in profits on an increase in the number of monthly fee-paying
customers owing to efforts to increase customer count in the current and previous fiscal years, andprojects a further increase of 3.0 billion yen in profits on reduced upfront spending
Millions of yenYoY

FY03/19 Forecasts FY03/18 Results(April 1, 2018 toMarch 31, 2019)(April 1, 2017 toMarch 31, 2018)

ChangePercent Change

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％

Sales

3

Policy of consistently providing stable dividends◎ No change was made to the dividend forecasts (announced May 8, 2018).
◎ Plans to pay an annual dividend of 28 yen per share

28 yenper share30per share

28 yenper share

14141414

FY03/18

FY03/19(Forecast)

625201528 yen

12 yen12 yen12 yen12 yen14 yenper share
8per shareper shareper shareper share

6666101111566666

FY03/12

FY03/13

FY03/14

FY03/15

FY03/160Interim dividend

Year-end dividend

FY03/17

Commemorative dividend

4Appendix(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)

1H FY03/14
Results

1H FY03/15
Results

1H FY03/16
Results

1H FY03/17
Results

1H FY03/18
Results

1H FY03/19
Results

84,31587,274

84,77382,201

84,911

88,840Operating profit

411

1,816

1,856

4,406

3,114

3,475

Recurring profit

303

1,585

1,779

4,428

3,143

3,580

Net income

-354

225

277

2,384

1,246

1,736

EPS (Yen)

-3.10

1.96

2.39

21.00

9.76

13.26

Sales

6(2) Sales by segment(Millions of yen)

1H FY03/14
Results

1H FY03/15
Results

1H FY03/16
Results

1H FY03/17
Results

1H FY03/18
Results

1H FY03/19
Results

Gas andPetroleum

41,84642,75437,95832,49632,77733,948

Information andCommunications

18,86819,546

20,42523,75024,90625,154

CATV

12,04912,144

12,212

12,56013,607

15,135

Building and Real
Estate

7,250

8,197

9,301

8,040

8,349

8,987

Aqua

2,102

2,423

2,746

2,929

3,055

3,490

Others

2,196

2,207

2,128

2,423

2,214

2,123

84,31587,274

84,77382,201

84,911

88,840Total

7(3) Operating profit by segment(Millions of yen)

1H FY03/14
Results1H FY03/15
Results

1H FY03/16
Results

1H FY03/17
Results

1H FY03/18
Results

1H FY03/19
Results

Gas andPetroleum

1,173

2,028

2,661

2,838

1,562

1,084

Information andCommunications

1,958

2,389

1,086

1,910

1,541

1,608

CATV

904

843

968

1,451

1,769

2,330

Building and Real
Estate

249

143

347

324

388

554

Aqua

-1,318-979

-616

201

135

291

Others,adjustments-2,556-2,608-2,590-2,318-2,282-2,393

Total

411

1,816

1,856

4,406

3,114

3,475

*Prior to elimination of indirect expenses

8(4) Consolidated financial indicators(Millions of yen)

1H FY03/14
Results

1H FY03/15
Results

1H FY03/16
Results

1H FY03/17
Results

1H FY03/18
Results

1H FY03/19
Results

Total assets

168,296

164,477

160,237

153,384

160,467

164,920

Total liabilities

134,983

125,521117,722

109,380

101,644

102,493

Total net assets

33,313

38,95642,51444,00458,82262,426

Balance ofinterest-bearing
debt

90,48780,93076,25365,76155,01954,930EBITDA

9,170

10,495

10,231

12,217

10,764

10,892Equity ratio19.3 %23.1 %

25.9 %

28.2 %

36.0 %

37.1 %
9(5) Consolidated cash flows(Millions of yen)

1H FY03/14
Results

1H FY03/15
Results

1H FY03/16
Results

1H FY03/17
Results

1H FY03/18
Results

1H FY03/19
Results

Operating cashflow

10,043

11,476

4,412

12,039

7,888

7,193

Investment
cash flow-5,049-4,515-5,289-4,668-6,931-6,964

Free cash flow

4,993

6,961-876

7,370

957

229

Financing cashflow

-6,378-8,021

236-8,833-1,42758

10(6) Group customer count(Thousands of customers)

Information andCommunications

Gas (LP and city gas)
Previous ISP
model, etc.
Hikari Collaboration

LIBMOMobile
Subtotal

CATV
Aqua
Security
Total

1H FY03/14
Results

1H FY03/15
Results

1H FY03/16
Results

1H FY03/17
Results

1H FY03/18
Results

1H FY03/19
Results

629

626

627

634

648

670

841

861

742

565

492

440－－
221－
－
231

117

272－
234－
234

315
13231

328
36
223

1,062
693
120
19
2,498

1,093
690
132
182,535

1,093
698
132
182,543

1,071
722
135
172,5541,050
995141172,827

1,028
1,046
156
172,893
11*The number of customers under a thousand are rounded to the nearest thousand. Information and Communications andCATV both offer communications services, and so their 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
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