January 31, 2019
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 Nine Months 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 nine months of the fiscal year ending March 31, 2019 (April 1, 2018 to December 31, 2018).

1. Expanded earnings base on customer count net increase of 22 thousand
customers since the beginning of the fiscal year
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 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 plan
looks 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.
In the first nine months 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 December 31, 2018, up
22 thousand from 2,876 thousand at the beginning of the fiscal year.
The net increase in the customer count broken down by main services was as follows (excludes theimpacts of M&A): LP Gas 13,106 (versus a net increase of 11,094 in the same period of the previous
fiscal year); CATV 22,786 (versus a net increase of 17,966); and Aqua (bottled drinking water delivery)
11,116 (versus a net increase of 8,320). Overall, the net increase in the customer count exceeded theprevious year’s level.

2. Record high sales on higher sales and profit, expanded earnings baseIn the first nine months of the fiscal year ending March 31, 2019, sales rose 4.6 billion yen (+3.5%)
year on year to 137.9 billion yen, a record high for the first nine months of any fiscal year, on
growth in customer count and the impacts of M&A conducted in the previous fiscal year.
In terms of profit, operating profit increased 500 million yen (+7.0%) year on year to 7.0 billion
yen.
This was mainly due to an increase in the number of monthly fee-paying customers accompanied
by an overall rise in customer count, boosting profit by a total of 1.6 billion yen from the Gas, CATV,
Information and Communications (Hikari Collaboration, etc.), and Aqua businesses. Other factors
included earnings improvement (200 million yen) of the TOKAI-brand MVNO service LIMBO, launched in
the third quarter of the previous fiscal year, and sales activities including curtailment of customer
acquisition costs and cancellation prevention costs, which led to operating profit growth totaling 2.5
billion yen.
At the same time, non-sales factors included a decrease in sales volume of household LP gas (400
million yen) due to higher temperatures compared with the same period of the previous fiscal year and arise in LP gas procurement costs (1.6 billion yen) totaling 2.0 billion yen.
With respect to the rise in LP gas procurement costs, we expect a minimal impact on earnings due
to cost pass-through measures implemented in January 2019.
(Millions of yen)
Q3 FY03/19 Results Q3 FY03/18 Results(April 1, 2018 to
December 31, 2019)

Sales(April 1, 2017 to
December 31, 2018)

YoY
ChangePercent Change

137,943

133,336+4,606+3.5%

Operating profit

7,038

6,579

+458

+7.0%

Recurring profit

7,247

6,662

+584

+8.8%

Net income

3,966

3,435

+531

+15.5%EPS (Yen)

30.29

26.66

+3.63

+13.6%

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.
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
spending recorded in the previous fiscal year, the Company anticipates 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 a year-end
dividend of 14 yen per share and 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)Interim (End of Q2)

FY03/19

FY03/18
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 Third Quarter of the
Fiscal Year Ending March 31, 2019.”
Further, for the Company’s earnings announcement for the Third Quarter of the fiscal year ending March
31, 2019, please see the following URL: https://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 Third Quarter of the
Fiscal Year Ending March 31, 2019
TOKAI Holdings Corporation(Code: 3167)
January 31, 2019

Achieved net increase in customer count of 22 thousand
from the beginning of FY03/19◎ At end-Q3, the continuing customer count reached 2,898 thousand, a net increase of 22 thousand
from the beginning of FY03/19.
◎ Mainstay LP Gas, CATV, and Aqua businesses all made progress with net increases that exceeded
cumulative Q3 FY03/18 figures.
(Net increase in customer count, thousands of customers)

+18

+23

+18

+13

+11

+11
+8

+1

+2
LP GasCATV

Cumulative Q3 FY03/17*Excludes increases in customer count resulting from M&A

Cumulative Q3 FY03/18

Aqua
Cumulative Q3 FY03/19

1

Expanded earnings base, achieved record high sales◎ Sales increased due to the impact of M&A conducted in FY03/18 as well as increased customer
count.
◎ Operating profit rose by 500 million yen (+7.0% YoY) due to an increase in the number of monthly
fee-paying customers accompanied by higher customer count and curtailment of upfront spendingfor customer acquisition.
◎ Minimize the impact of rising LP gas procurement costs on earnings with cost pass-throughmeasures implemented in January 2019
(Millions of yen)YoY

Q3 FY03/19 Results Q3 FY03/18 Results(April 1, 2018 to
December 31, 2018)(April 1, 2017 to
December 31, 2017)

137,943

133,336+4,606+3.5％

Operating profit

7,038

6,579

+458

+7.0％

Recurring profit

7,247

6,662

+584

+8.8％

Net income

3,966

3,435

+531

+15.5％EPS (Yen)

30.29円26.66円+3.63円+13.6％

Sales

PercentchangeChange2

Factors causing operating profit increase in Q3◎ Due to increased customer count (2.84 million at end-Q3 FY03/18, 2.90 million at end-Q3 FY03/19,
an increase of 60 thousand customers), monthly fee-paying customers grew, resulting in an increasein profit of 1.6 billion yen, with LIMBO (TOKAI-brand MVNO service) also improving by 200 million
yen.
◎ At the same time, the impact of non-sales activities was 2.0 billion yen (the impact of surging
procurement costs has been addressed).
Sales activity results

95

Non-sales activity factors

Increased profit

90

Billions of yen

Upfront spending
Non-sales activities

+0.2

80

Communication
MVNO

75
70

-0.4

+0.7

Customer acquisition costs

85

LIBMO
sales
promotion

+1.6

84

Customeracquisition andretention costs

High temperature
impact
Gas

-1.6

+0.7

2.90 million+0.2

customers

2.84 million
customers

65
60

-0.4

Procurement cost
impactCustomer growth

6.6

Gas
Gas

+0.3

CATV

+0.8

7.0

-1.6

Hikari+0.1
Collaboration
Corporate
communications +0.1
services

55
50

Aqua

分類 1
Q3 FY03/18
Results

分類 2

+0.2

分類 3

分類 5

分類 5

Q3 分類
FY03/19
7
Results 3

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 an increase of 3.0 billion yen in profits, stemming from 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 FY03/18 and FY03/19, as well as reduced upfront spending compared to FY03/18(Millions of yen)

YoY

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

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円51.19円+9.30円+18.2％

Sales

Percent
ChangeChange4

Policy of consistently providing stable dividends◎ No change was made to the dividend forecasts (announced May 8, 2018).
◎ Plans to pay a year-end dividend of 14 yen per share and an annual dividend of 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 yenper shareper shareper shareper share

6

6

6

6

14 yenper share

11

8

10

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)

Q3 FY03/14
Results

Q3 FY03/15
Results

Q3 FY03/16
Results

Q3 FY03/17
Results

Q3 FY03/18
Results

Q3 FY03/19
Results

132,959

135,981130,103

127,432

133,336

137,943

Operating profit

3,196

4,866

4,006

8,193

6,579

7,038

Recurring profit

2,959

4,517

3,921

8,246

6,662

7,247

Net income

920

1,819

1,395

4,850

3,435

3,966

EPS (Yen)

8.03

15.81

12.05

42.71

26.66

30.29

Sales

7

(2) Sales by segment(Millions of yen)

Q3 FY03/14
Results

Q3 FY03/15
Results

Q3 FY03/16
Results

Q3 FY03/17
Results

Q3 FY03/18
Results

Q3 FY03/19
Results

Gas andPetroleum

66,964

67,10658,34851,29153,14554,675

Information andCommunications

28,62830,02031,98836,212

37,76037,959CATV

18,093

18,207

18,345

18,901

20,871

22,829Building and Real
Estate12,37913,311

13,783

12,926

13,491

13,846

Aqua

3,271

3,707

4,130

4,391

4,652

5,279

Others

3,621

3,626

3,507

3,708

3,415

3,352

132,959

135,981130,103

127,432

133,336

137,943

Total

8(3) Operating profit by segment(Millions of yen)

Q3 FY03/14
Results

Q3 FY03/15
Results

Q3 FY03/16
Results

Q3 FY03/17
Results

Q3 FY03/18
Results

Q3 FY03/19
Results

Gas andPetroleum

3,297

4,376

5,232

5,550

3,857

2,954

Information andCommunications

3,227

3,716

1,472

2,993

2,410

2,595

CATV

1,398

1,309

1,453

2,125

2,758

3,568

591

349

523

619

681

915

Aqua

-1,695-1,166

-933

299

221

444

Others,adjustments-3,623-3,718-3,741-3,396-3,350-3,442

Total

3,196

4,866

4,006

8,193

6,579

7,038

Building and Real
Estate*Prior to elimination of indirect expenses

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

Q3 FY03/14
Results

Q3 FY03/15
Results

Q3 FY03/16
Results

Q3 FY03/17
Results

Q3 FY03/18
Results

Q3 FY03/19
Results

Total assets

172,863

168,034

164,500

157,735

165,897

167,035

Total liabilities

138,724

128,808

122,228

111,007

106,672

107,404

Total net assets

34,13939,22542,272

46,72859,224

59,631

Balance ofinterest-bearing
debt

91,03282,74379,53965,67857,511

58,481

EBITDA

16,333

17,817

16,56519,992

18,052

18,266Equity ratio

19.2 %

22.8 %

25.1 %

29.1 %

35.0 %

35.0 %
10(5) Consolidated cash flows(Millions of yen)

Q3 FY03/14
Results

Q3 FY03/15
Results

Q3 FY03/16
Results

Q3 FY03/17
Results

Q3 FY03/18
Results

Q3 FY03/19
Results

Operating cashflow

14,535

15,111

8,505

17,082

12,295

9,813

Investment
cash flow-7,672-6,909-8,750-6,929-9,655-9,615

Free cash flow

6,863

8,202

-244

10,152

2,640

197

Financing cashflow

-7,625-7,983-47-11,261-2,081762

11

(6) Group customer count(Thousands of customers)

Q3 FY03/14
Results

Q3 FY03/15
Results

Q3 FY03/16
Results

Q3 FY03/17
Results

Q3 FY03/18
Results

Q3 FY03/19
Results

629

624

629

635

653

674

848

866

686

538

499

430

Hikari Collaboration

-

-

173

288

319

328

LIBMO

-

-

-

-

21

39

Mobile

225

234

235

234

229

220

1,073

1,099

1,094

1,060

1,047

1,017

CATV

694

689

704

728

1,002

1,055

Aqua

121

133

134

135

143

157

Security

19

18

18

17

17

17

2,510

2,540

2,553

2,551

2,839

2,898

Information andCommunications

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

Subtotal

Total*The number of customers under a thousand are rounded to the nearest thousand. Information and Communications and
CATV both offer communications services, and so their numbers are excluded from total figures.

12

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.
Investor Relations Office
TOKAI Holdings Corporation
Hamarikyu Inter City 11th floor, 1-9-1, Kaigan, Minato-ku, Tokyo 105-0022, Japan
Phone: +81-(0)3 5404-2891
Fax: +81-(0)3-5404-2786
https://tokaiholdings.co.jp/english/
e-mail： overseas_IR@tokaigroup.co.jp