Nitori Holdings Co., Ltd.
Financial Results Presentation
for the Second Quarter of FY2018

26 September 2018
TSE1st.&Sapporo Code : 9843

Overview of Consolidated Financial Results（Billions of Yen）

1H FY2018

1H FY2017

Change21 Feb-20 Aug 2018
(to sales)

21 Feb-20 Aug 2017
(to sales)(YOY)

Net sales

301.6－283.9－17.7

106.3％

Gross profit

165.6

54.9%

152.8

53.8%

12.8

108.4％

SG&A expenses

109.7

36.4%

104.7

36.9%

5.0

104.8％

Operating income

55.8

18.5%

48.1

17.0%

7.7

116.1％

Ordinary income

56.7

18.8%

48.6

17.1%

8.1

116.7％

Profit attributableto owners of parent

37.9

12.6%

35.0

12.3%

2.9

108.3％

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

2

Consolidated Balance Sheets（Billions of Yen）
20 Aug2018

Current assets(Cash and deposits)

20 Feb2018

Change

183.1

164.0

19.1

86.3

63.3

22.9

資 (Inventory)
産
Non-Current assetsの部 (Property, plant and equipment)

48.4

52.7

(4.2)

394.6

386.4

8.2

297.2

291.3

5.8

(Investments and other assets)

16.3

13.8

2.4

577.8

550.5

27.3

77.5

83.4

(5.9)

16.4

19.6(3.1)

2.6

2.0

0.6

24.6

25.4(0.7)

7.0

8.0(0.9)

Total liabilities

102.1

108.8(6.6)

Total net assets

475.7

441.6

34.0

Total liabilities and net assets

577.8

550.5

27.3

Total assets
Current liabilities(Accounts payable - trade)

負債 (Short-term loans payable)のNon-Current liabilities部(Long-term loans payable)

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Major factors
on changes

Net income +37.93

Consolidated Cash Flows（単位：億円）1HFY2018Operatingactivities
Investing
Activities
Financing
activities

1H
FY2017

45.8

Change(5.3)

7.2

・Income before
income taxes
・Income taxes paid

28.3

・Purchase ofproperty, plant andequipment
・Purchase ofintangible assets(12.8)(0.4) ・Cash dividends paid

(5.2)

38.6

(15.7) (44.1)(4.8)

Net increase in cash &cash equivalents

24.3 (10.6)

35.0

Cash & cash equivalents
at end of the year

85.3

55.3

29.9.

.

30.1

(5.4)

Free cash flow

Copyright 2018 Nitori Holdings All Rights Reserved

Major factors
on changes

35.5■不許複製印刷配布+56.6(15.7)(3.3)（CF from Operating activities+CF from Investing activities）

4

Trend in YOY changes
in comparable stores 【1H】（％）

【Sales , YOY】

※Sales = Sales based on orders

115
110

108.2

106.0

102.3

105

101.9

100

99.6

95（％）
115

【No. of Customers・Average Spend per Customer , YOY】
No. of Customers

Average spend per customer

107.7

110

105.5
105

100.5

101.5

104.3

101.3

98.1

100.6

100.5

10098.1

95

1H FY2014

1H FY2015

1H FY2016

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

1H FY2017

1H FY20185

Consolidated Sales
Net sales（Billions of Yen）

【Net sales】

AmountStore sales(Global)¥271.0bil. 104.9%

E-commerce

301.6 (106.3%）
283.9

YOY

¥18.8bil. 130.4%

B to B¥2.4bil. 131.8%

Renovation sales¥2.5bil.

Rent income¥3.6bil. 104.9%

Others¥3.1bil. 102.8%

Total

93.8%

¥301.6bil. 106.3%

Sales comp. by region
Hokkaido

4.5％ (0.3)pt &Shikoku

Chugoku

7.5％ (0.0)pt

Tohoku5.5％ (0.1)pt Okinawa

Kyusyu&8.6％ (0.2)pt

30.7％ (0.5)pt EC

6.3％ +1.2pt

Kanto

1H FY2017

1H FY2018

Copyright 2018 Nitori Holdings All Rights Reserved

Hokuriku&Koshinetsu

5.3％ (0.1)pt Renovati

1.7％ +0.1pt

Chubu&Tokai

10.1％ (0.1)pt Overseas

2.7％ +0.4pt

Kinki

14.8％ (0.3)pt Others

2.3％ (0.1)pt■不許複製印刷配布

B to B &on

6

Gross profit ・ SG&A expenses（Billions of Yen）

【Gross profit】

165.6（108.4%）

152.8

1H FY2017(0.4pt)1H FY2017YOY¥33.2bil. 108.1%

11.0% ＋0.2pt

Rents¥17.8bil. 109.4%

5.9% +0.2pt

Deliverycharge¥13.2bil.

98.0%

4.4% (0.4)pt

Outsourcing¥8.1bil. 122.1%

2.7% ＋0.4pt

Advertising¥7.5bil. 101.2%

2.5% (0.1)pt

Store fixtures
expense¥0.7bil.

0.3% (0.1)pt+0.5pt(0.3pt)21.1%¥5.9bil.

Capital investment+1.3ptRatio toChange
sales

Personnel

COGS
reduction
FX impact
applied to thepurchase（¥106.88/$⇒¥108.34）

AmountDepreciation

1H FY2018【Gross profit margin】

53.8%【SG&A】¥16.1bil.

54.9%（+1.1pt）

Point
program

FX impact
applied to theinventory

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1H FY2018■不許複製印刷配布

7

No. of stores as of 20 Aug 2018

５４５Stores(+２２)

４０１(+5)３０（+3）

１２５（+3）（±０）(DECO HOME)

６９(+7)(China)２８（+4）

Prefecture

No. ofstores

Prefecture

No. ofstores

Prefecture

No. ofstores

Hokkaido

21

Yamanashi

３

Shimane２

Hokkaido

21

Ishikawa

５

Hiroshima

13 (+1)

Aomori６

Toyama４

Yamaguchi

６

Akita

５

Fukui

２

Kagawa

４

Iwate

３

Hokuriku & Koshinetsu

Tokushima

２

Yamagata

５

Shizuoka

13

Kochi

３

Miyagi

７Aichi26

Ehime

６６ (+１)

Mie

７

Chugoku & Shikoku

Fukushima

32 (+１)45 (+２)

Tohoku11～19店舗（5地域）
32 (+１) Gifu

10 (±０)Fukuoka

19Tokyo

48 (+２) Chubu & Tokai
20～29店舗（5地域）

56 (±０)Oita

５Miyazaki

３３Kanagawa

28 (+２)Osaka

33 (+２)

Saitama

31 (+１)

Kyoto

12

SagaChiba

23

Nara

５

Nagasaki

４ (+1)

Gunma

６Hyogo25 (+２)

Kumamoto

７ (+1)

Tochigi

８Shiga７

Kagoshima

７Ibaraki

13

Wakayama

５Okinawa

430店舗～（3地域）

Kanto

157 (+５) Kinki

87 (+４)

Niigata

８Tottori

２Nagano10 (+１)

Okayama

７ (+１)

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Kyushu & Okinawa

52 (+２)

Japan４８２(+15)
8Major indicators of management efficiency（1）Sco NumpeberIndicator

unitTarget

Return on assets％

Over 7.5％

○10.1

9.7

11.6

9.1

11.5

2 Total asset turnoverTi
mesOver 1.0×0.53

0.57

0.59

0.54

0.64

3

Ordinary income
margin％Over 10％

○18.8

17.1

19.6

17.0

18.1

4

Earnings per share¥Over ¥50

○338.7 313.7 296.4 207.5 201.0

5Return on equity％

Over 7.5%

○8.3

8.6

9.87.18.66Equity ratio％

Over 60％

○82.2

82.3

76.8

78.9

78.6

7

Interest coverage

TimesOver 20○1,095 1,982 1,4769458188

Sales growth rate％

Over 10％

×6.3

11.5

14.7

5.4

12.9

9

Ordinary income
growth rate％

Over 10％○16.7(2.4)

32.0(1.1)

24.0

Ratio of gross profit to％Over 48％

○54.9

53.8

54.8

52.6

51.9

Ratio of break-even％

Under 80％

○62.1

64.4

60.2

63.7

61.0

1Group（Six months）

10 sales

11 point to sales

2018.8

Copyright 2018 Nitori Holdings All Rights Reserved

2017.8 2016.8 2015.8 2014.8■不許複製印刷配布

9Major indicators of management efficiency (2)Sco Num
peberIndicator

unitTarget

2018.8

Sale of furniture and home furnishing

12 Sales per tsubo

K Over ¥950K○

13 Stock turnoverTi
mesOver 9×6.0

TimesOver 2.9○

Ratio of profit％

Over 20％

Ratio of real estate cost％

17 cost to gross profit

Ratio of sales promotion

2017.8 2016.8 2015.8 2014.8

1,040 1,025

998

926

940

6.4

6.3

6.1

6.8

4.0

4.4

4.5

4.4

4.8

○34.2

31.735.731.1

33.9

Under 25％

○21.3

21.3

20.3

22.1

21.5％

Under ６％

○5.1

5.5

5.3

5.9

5.9

18 Labor productivity

MOver ¥10M

○19 Sales floor per labor

Tsubo

Over 60

×34.7

34.1

37.1

38.2

39.8

20 tsubo

K

Over 150K

○179

159

177

135

149

21 Stock per tsubo

K

Under 90K

○7875

7273

67

30～35

○

32.9

32.8

32.9

32.4

32.3

Operating assets

14 turnover

15 distribution

16 to gross profit

Operating income per

22 Average age of labor

Results （○won/×lost）
Copyright 2018 Nitori Holdings All Rights Reserved

19.32 18.27 19.70 17.98 18.90○18×4 ○18×4 ○19×3 ○14×8 ○17×5■不許複製印刷配布

10

Plan to establish new DC
Sendai DC at

Taicang DC

Miyagi (Plan)in China

Goka DC at
Ibaraki (Plan)

Warehouse３
Warehouse４
Warehouse２
Warehouse１

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

11

“Nitori Fun！Week”
Campaign
Disposing furniture for
free, good reputation
particularly in urban area
Disposing service broughtsynergy to reputation on
sofa campaign

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

12

New challenges【Changes in businessenvironment】
Globalization
Expansion of businessareaChange in productcomposition【Changes in externalenvironment】
Competition withdifferent industry
Advancement
technology
Problems in logistics andemployment

2022 ¥1 tri. net sales
1,000 stores【Major Projects】
New core system
New ordering and inventory
control system
O2O(Online ⇔Offline)
Development of products
and supply chain
management system

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

13

Store roll-out plan in FY 2018
StoreTaiwanUSAChina

Total

End ofQ2

４１３６９３０５Q3~Q4Net
increase＋１７＋１２＋１ー ＋１０ ＋４０End ofFY2018

４３０８１３１５２８ ５４５

３８ ５８５China＋１０

Taiwan＋１
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Japan＋２９■不許複製印刷配布

14

Plan in FY 2018
（Billions of yen）

FY2018 PlanChange

FY2017(to sales)(to sales)(YOY)

Net sales

614.0

Gross profit

330.0 53.7% 314.7

55.0% 15.3 104.8%

SG&A expenses

231.0 37.6% 221.4

38.7%

9.6 104.3%－572.0－42.0 107.3%

Operatingincome99.0 16.1%

93.3

16.3%

5.7 106.0%

Ordinaryincome

100.0 16.3%

94.8

16.6%

5.2 105.4%

68.0 11.1%

64.2

11.2%

3.8 105.9%

Profit attributableto owners ofparent

No change of plan
Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

15E-Commerce（％）

Net sales YOY

140130120
110

129.3％

130.0％

130.4％

1H FY2016

1H FY2017

1H FY2018112.3％
1H FY2015

Good reputation

Limited color(“N-cool” series
bedding pads)

Limited items(plan)

Lower sofa

Copyright 2018 Nitori Holdings All Rights Reserved

Custom size
furniture■不許複製印刷配布

Beds
16

Cooperation with Stores and Website

Online⇔Offline“Tebura de shopping”（no need to carry packages）

Mobile Application

11,247usages

Number of members：(January～August,2018)(at August,2018)

1.9 million

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

Order on website andreceive at shops

75,782 orders(January～August,2018)17

Shopping time shortening
Testing robot
receptionist
Guidance of sales area at ninefloors building.
Voice guidance and showing on
display to customer’s inquiry※Robot receptionist ”Pepper” provided by SoftBank Robotics Corp.

Digital catalog
Installed at all stores in Japan
Able to check stock status
including nearby stores’ andproducts review

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

18

Web advertising

One to One marketing
WebsiteProfile data of customer

One to One marketing・Tracking info onwebsites

Nitori-net

・LINEID・SNS・Cookieetc.・・・

Visit websites

Core system

DBWeb advertising

Members’ card

●Managing various information unitedly,
and use effectively for web advertising
Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

1919

Analysis of customer data and purchase data

Focus on hot item only
→ products and customers data
Utilize customer andpurchase data analysisfor publicity andmarketing
RFM analysis, Cluster
analysis, Market basket
analysisImage of RFM analysis

Ｒ (recency)
Ｆ (frequency)
Ｍ (monetary)

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20

Seasonal coordination series

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21

Product development
Kitchen board incombination“Ｎ- Cool” series＆ ”Ｎ-Warm” series“Deco Home”
limited items

Digital clock

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

22

Global product development
Global private viewing in Tokyo

Private viewing of furniture in ShanghaiCopyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

23

Reduction of cost & expense
Screw ofshelf

MDF

Particleboard

Reduction ofcost
Verticalmerchandising to
reduce costs andimprove quality
Reduction ofexpenseIncreasetransport efficiency
by reducing
package size

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24

Global supply chain management
Ba Ria-Vung Tau plant Start

manufacturing of
the dining set inaddition tomattress

Thailand plant

Copyright 2018 Nitori Holdings All Rights Reserved

Manufacturing
carpet withrecycled polyester
fiber, making frompet bottles byoriginal technology■不許複製印刷配布

25

【DISCLAIMER】
The forecasts and projected operating results contained in this report are based on information
available at the time of preparation, and thus involve inherent risks and uncertainties.
Accordingly, readers are cautioned that actual results may differ materially from thoseprojected as a result of a variety of factors.