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

28 June 2018
【DISCLAIMER】
IN-HOUSE TRANSLATION

TSE1st.&Sapporo Code : 9843

Overview of Consolidated Financial Results（Billions of Yen）

N t sales
NetlChange

Q1 FY2018

Q1 FY201721 Feb-20
F b 20 MayM
2018
(to sales)

21 Feb-20
F b 20 MayM
2017
(to sales)

157 6
157.6

147 5
147.5

－

106 9％
10.1
101 106.9％－(YOY)

Gross profit

55 2%
87.0870 55.2%

78 678.6

53 3%
53.3%

110 6％
8.3
83 110.6％

SG&A expenses

35 9%
56.5
56
5 35.9%

52 9
52.9

35 9%
35.9%

106 8％
3.6
36 106.8％

Operating income

30.4 19.3%

25.7

17.4%

84.7 118.3％

Ordinaryy income

30.6 19.5%

26.0

17.6%

4.6 117.9％

Profitattributable toowners of parent

12 5%
19.7
197 12.5%

19 0
19.0

12 9%
12.9%

103 4％
0.6
06 103.4％

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2

Consolidated Balance Sheets（Billions of Yen）
20 May2018

Current assets

20 Feb2018

Change

178.9

164.0

14.8

(Cash and deposits)

60.5

63.3(2.7)(Inventory)

52.5

52.7

(0.1)

389.2

386.4

2.7

(Property plant and equipment)(Property,

292 3
292.3

291 3
291.3

10
1.0

(Investments and other assets)

15.6

13.8

1.7

568 1
568.1

550 5
550.5

17 6
17.6

86.4

83.4

3.0

(Accounts payable - trade)

18.9

19.6

(0.6)

(Short-term loans payable)

2.3

2.0

0.3

Non-Current liabilities

24.5

25.4

(0.9)

(
(Long-termlloanspayable)
bl )

70
7.080
8.0

(0 9)
(0.9)

Total liabilities

110.9

108.8

2.1

Total net assets

457.1
5441.6615.4
5

Total liabilities and net assets

568.1

550.5

17.6

Non-Current assets

Total assets
Current liabilities

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Major factors
on changes
Suspense payment +11.0

Deposit +11.0
Accounts payable - other (3.3)
Income taxes payable (5.7)

Net income +19.7

3

Trend in YOY changes
in comparable stores 【Q1】（％）
115

【Sales , YOY】
112.2

※Sales = Sales based on orders

107 5107.5

110105

102.7

99.0

94.3

1009590（％）

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

115110105

107.1

108.3
103.5

Average spent per customer

99.1

100.3

99.9

100

103.1
99.6

95

99.1
95.2

90

2014.52015.5

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2016.5■不許複製印刷配布

2017.52018.5
4

Consolidated Sales
Net sales（Billions of Yen）

157.6

【106.9%】147.5【Net sales】

AmountStore sales(Global)¥141.4bil. 105.5%

E-commerce

YOY¥10.0bil. 133.4%

B to B¥1.5bil. 131.1%

Renovation sales¥1.3¥1 3bil.
bilRent income¥1.7bil. 104.0%Others¥1.4bil.

Total

92.2
92 2%92.1%¥157.6bil. 106.9%

Sales comp. by region
Hokkaido

4.7％ (0.3)pt &Shikoku

Chugoku

7.6％ (0.2)pt

Tohoku5.6％ (0.2)pt Okinawa

Kyusyu&8.8％ (0.1)pt

30.3％ (0.0)pt EC

6.4％ +1.3pt

Kanto

Q1 FY2017

Q1 FY2018

Copyright 2018 Nitori Holdings All Rights Reserved

B to B &Hokuriku&Koshin
etsu

5.3％ (0.2)pt Renovati

1.8％ +0.0pt

Chubu&Tokai

10.1％ (0.1)pt Overseas

2.6％ +0.4pt

Kinki

14.7％ (0.3)pt Others

2.1％ (0.3)pt■不許複製印刷配布

on5

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

【Gross profit】

87.0 【110.6%】78678.6

Q1 FY2017

Q1 FY2018【Gross profit margin】
53.3%＋1.7pt

00+0.0pt
FX impact
applied to thepurchase(¥108.21/$⇒¥108 06/$)⇒¥108.06/$)【SG&A】

Amount

YOY

Ratio toChangesales¥16.7bil. 107.2%

10.6% ＋0.0pt

Rents¥8.9bil. 109.9%

5.7% +0.2pt

Deliverycharge¥7.2bil.

97.9%

4.6% (0.4)pt

Advertising¥4.5bil. 108.1%

2.9% ＋0.0ptOutsourcing¥4.4bil. 121.7%

2.8% +0.3pt

Store fixtures
expensebil¥0 4bil.
¥0.4

0 3% (0.4)pt
0.3%(0 4) tPersonnel

44 2%
44.2%

Depreciation¥2.9bil.

Capital investment¥7.2bil.

55.2% 【＋1.9pt】+0.2pt

FX impact
applied to theinventory

COGSreduction

Q1 FY2017
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Q1 FY2018■不許複製印刷配布

6No. of stores as of 20 May 2018

５３８Stores
【+１５】

４０1
【+5】

１２
【+3】

DECO HOME

６６【+4】(Taiwan)

２９
【+2】

(USA)

５(China)

２５【+1】

Prefecture

No. ofstores

Prefecture

No. ofstores

Prefecture

No. ofstores

Hokkaido

21

Yamanashi

3Shimane

2H kk id
Hokkaido

21

I hikIshikawa

5HiHiroshimahi

13 【+1】【 1】

Aomori6Toyama4

Yamaguchi

6Akita

5

Fukui

2

Kagawa4Iwate3

Hokuriku & Koshinetsu

Tokushima

2

Yamagata

5

Shizuoka

13Kochi

3y g
Miyagi

7Aichi

26

Ehime

6

Fukushima

5Mie

7

Chugoku & Shikoku

Tohoku31

Gifu

10 【±0】Fukuoka

19TTokyok

48 【+2】

ChChubub &TTokaik i

56 【±0】Oit
Oita5Kanagawa

28 【+2】Osaka

33 【+2】Miyazaki

3Saitama

31 【+1】

Kyoto

12Saga3Chiba23Nara5Nagasaki

4 【+1】

Gunma

6Hyogo24 【+1】

Kumamoto

6g
Tochigi

8Shigag

7

Kagoshimag

7Ibaraki

13Wakayama

5Okinawa

4Kanto157【+5】Kinki

86 【+3】

Niigataii

8Tottorii

2Nagano10 【+1】

Okayama

7 【+1】

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32 【+1】45 【+2】

Kyushu & Okinawa

51 【+1】

Japan479【+12】7

Major indicators of management efficiency（1）Indicator

unitTarget

1

Return on assets％

Over 3.75％

○5.5

5.2

6.5

5.2

6.82

Total asset turnover

Times

Over 0.5

×0.28

0.30

0.32

0.29

0.36

︵Group3OrdinaryO
diincomeimargin％

Over 10％

○19.5

17.6

20.2

17.9

19.1

4

Earnings per share¥

Over ¥25○

176.0 170.9 152.9 107.3 109.0︶
Three months

Sco Numpe ber5

Return on equity％

Over 3.75%

○4.4

4.8

5.1

3.8

4.8

6

E it ratio
Equityti％

OOver60％○80 480.4

80 780.7

78 578.575 575.575 675.67Interest coverage

TimesOver 20○

1,431 1,559 1,843 1,048 1,1248

Sales growth rate％

Over 10％

×6.9

7.6

14.9

1.7

15.9

9

Ordinary incomegrowthth ratet％Over 10％

○

17 9
17.9

(6.0)

29.4

(4.4)

20.8

Ratio of gross profit to％Over 48％

○55.2

53.3

54.4

52.4

51.1

R ti off break-even
Ratio
bk％

Under 80％

○60.8

62.8

58.5

61.3

58.1

10 sales

11 point to sales

2018.5

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2017.5 2016.5 2015.5 2014.5■不許複製印刷配布

8Major indicators of management efficiency (2)Sco Numpe berIndicator

unitTarget

2017.52017.5 2016.5 2015.5 2014.5

Sale of furniture and home furnishing

12 Sales per tsubo

K Over ¥950K○

13 Stock turnoverTi
mesOver 9×6.0

6.2

6.6

6.5

7.5

Ti
mes

Over 2.9

○39
3.9

43
4.3

45
4.5

45
4.5

53
5.3

Ratio of profit％

Over 20％

○35.4

33.0

37.3

32.9

36.3

Ratio of real estate cost％

Under 25％

○20.2

20.4

18.8

20.7

19.3

17 cost to gross profit

Ratio of sales promotion％

Under ６％

○5.8

6.0

5.9

6.4

6.9

18 Labor productivity

MOver ¥10M

○19 Sales floor per labor

Tsubo

Over 60

×34 1
34.1

33 0
33.0

36 1
36.1

37 2
37.2

37 8
37.8

20 tsubo

KOver 150K

○195

170

200

155

178

21 Stock per tsubo

K

Under 90K

○82

80

75

75

69

30〜35

○

32.6

32.6

32.6

32.2

32.1

14

Operating assets
turnover15 distribution

16 to gross profit

Operating income perg age
g of labor
22 Average

Results （○won/×lost）
Copyright 2018 Nitori Holdings All Rights Reserved,01,081,081,004,00
1,051,051,094 1,071

19.96 18.25 20.62 18.85 19.76○18×4 ○17×5 ○19×3 ○16×6 ○18×4■不許複製印刷配布

9

TOPICS

Product Development
Vintage-taste“St i ” series“Stain”
izCoordination proposal
combining a botanicalpattern and “second-hand”“second hand”
like furniture

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11

Product Development
Dinning set of low typeUse in combinational“Relax”
Relax● Natural and soft

“SimpleSimple storage goods”
goods

atmosphere that makes yourroom bright●Casual design and color
Copyright 2018 Nitori Holdings All Rights Reserved●Proposing various
a io s stostorage
age

goods collectively■不許複製印刷配布

12

Product Development
Functional lace curtain “ECONATURE”

insulation effect at
Summer: 25%~
heat retention
effect at
Winter: 20%~

UV cutabove

80％

Day and night,
hard tosee throughinside of thecurtain
iGenerallace curtain“ECONATURE”

Generallace curtain“ECONATURE”

Copyright 2018 Nitori Holdings All Rights Reserved

About 2 times
brighter than
general ones

Generalblindfold curtain■不許複製印刷配布“ECONATURE”

13

Seasonal coordination series

zCoordinate with “DAYDAY Value”
ValuezDelivered advertisement videos via SNS etc.
zLeads to increase than sales amount last year
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14

Coordination
３D simulator + consultation of interior
coordination for whole housezPlanning furniturearrangement and interiorplan before moving in●Check size of furnitureand the placement space●Proposing total
coordination

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E-Commerce（％）

Net sales YOY

140130120
110

115 4%
115.4%

119.7%

ʻ16
ʻ16.55
ʻ15.5
ʻ155
Main initiatives of 1Q

Renewal of the top
page of website

124.9%

ʻ17
ʻ17.5
5

Limited items

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133.4%■不許複製印刷配布

ʻ18
ʻ18.5
5

Limitedted colors
co o s(rugs etc.)16

O2O Project
Cooperation withCatalog and website
zPlace competitive items intheth catalog
t lzGuide customers to thewebsite
b it andd introduce
i t dmoreproducts

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17

O2O Project〜Web marketing〜SNS

Display Ads

Timeline on “LINE”
LINE

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18

Corporate businessSteady sales to Hotels and Educational facilities
Hotel

Welfare facility

Hotel

Educational facility

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19

Opening stores in Japan
Kakogawa（Hyogo ・ Nitori）

Yokohama（Nitori express）

Yokohama（Deco Home）

Omiya（Deco Home）

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Opening stores overseas
ChinaTaiwan

USA

Nantong （4/20）

New Taipei（5/11）

Ontario Mills（5/25）

Chengdu（6/22）

Hsinchu（5/11）

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21

Logistics
Deliver furniture and home fashionproducts together

Pick up furnitureat delivery center●AddAdd 500 JPY on theth delivery
d lifeefofffurniture, we bring Hfa productstogether● In season of starting new lifestyle,secure the capacities of deliveries andreduce delivery costs
Copyright 2018 Nitori Holdings All Rights Reserved● Improve convenience forcustomer by delivering the furnitureand Hfa products together● Effectively utilize the vacant spaceof the truck and reduce the cost

■不許複製印刷配布

22

Logistics
Securing human resource
in logistics business

Provide meals for free
•80% of worker say“WantWant to work repeatedly
repeatedly”•Increase 50% oftemporary
tepo a y sta
staff compare
co pa e toprevious year

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23

Recruitment
Domestic

550

Overseas

72

Hiring newgraduates● Hired 550 new
graduates
d t ini JapanJ●Hired 72 overseas who
have studied in Japan

480 China

7260●Planning to expand
hi ihiringoff peoplel iinVietnam and India withexperience of study inJapan

10
Copyright 2018 Nitori Holdings All Rights Reserved● Next year, planning tohire the same number ormore■不許複製印刷配布

24Human Resource development
Nitori USA seminar
Biggest investment in education.
Participants
Pti it experience
i“prosperous home living”
firsthand, and share Nitoriʼsmission and vision.
In the seminar held in the springof 2018, 646 people participated,
including young employees andemployees
loff overseas groups.
【Plan for FY2018】
Total number of participants:
1,250

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25

Awards“Kurumin” certification● Received certification by theMinister of Health
Health, Labor andWelfare as "Child-caring Support
Company“〜Based on the Next Generation
Education and Support Promotion Act,
pass criteria〜

Copyright 2018 Nitori Holdings All Rights Reserved“White-company” award● Awarded in【Philosophy Sharing Division】〜Efforts to define the roles andobjectives that the company shouldplay and disseminate them as abusiness plan were evaluated〜■不許複製印刷配布

26

Store roll-out plan in FY 2018
StoreTaiwan

USAEnd of
Q1

４１３６６

２９Q2~Q4Net
increase＋１７＋１５＋２

End ofFY2018

４３０８１３１５２５ ５３８＋１ ＋１９ ＋５４６ChiChina＋１９USA＋１Taiwan＋２２Japan＋３２

Copyright 2018 Nitori Holdings All Rights Reserved

ChinaTotal■不許複製印刷配布

４４ ５９２27Plan in FY 2018
（Billions of yen）

Plan in FY 2018 of first half
(R ti to(Ratiot sales)l )Net sales

304.4

Gross profit
SG&A expensesp(YOY)

Plan in FY 2018 of full year
(Ratio to sales)(YOY)

107.2%

614.0

164.5

54.0% 107.6%

330.0

53.7% 104.8%

111.6

36.6% 106.5%

231.0

37.6% 104.3%

Operatingincome

52.9

17.4% 109.9%

99.0

16.1% 106.0%

Ordinary income

53.4

17.5% 109.8%

100.0

16.3% 105.4%

1111.7%7% 101
101.6%6%

68 0
68.0

11 1% 10511.1%
105.9%
9%Profitattributablett ib t bl tot
owners of parent【Assumption】
Sales in comparable stores

3535.66－－

107.3%

YOY 102.5％
102 5％ (NITORI+DECOHOME+EC)
YOY 101.0％ (NITORI)
FX rate 111yen/$ (completed exchange contracts(through June) : lower 108yen/$
not implemented after July)
Capital investment: 43 billion yen
Depreciation expense of 12.5 billion yen

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28

【DISCLAIMER】
Th forecasts
Thefandd projectedjd operating
iresults
l containedi d iin thishi report are bbasedd on iinformationfi
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.

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29