May 20, 2020

Summary of Consolidated Financial Results for the Fiscal Year Ended March 31, 2020
[Japanese GAAP]
Listings: TSE First Section
Company name: AOKI Holdings Inc.
Stock code:
8214
URL: https://www.aoki-hd.co.jp/
Representative:
Akihiro Aoki, President
Contact:
Haruo Tamura, Executive Vice President
Tel: +81-45-941-1388
Scheduled date of Annual General Meeting of Shareholders:June 26, 2020
Scheduled date of filing of Annual Securities Report:
June 26, 2020
Scheduled date of payment of dividend:
June 5, 2020
Preparation of supplementary materials for financial results:
Yes
Holding of financial results meeting:Yes (for institutional investors and analysts)
Note: The original disclosure in Japanese was released on May 20 2020 at 14:15 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2020 (April 1, 2019 – March 31, 2020)(1) Consolidated results of operations
Sales
Million yen%
FY3/20180,220(7.6)
FY3/19195,054(2.2)
Note: Comprehensive income (million yen)

(Percentages represent year-on-year changes)
Profit attributable toOperating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen%
6,649(50.7)
5,501(53.7)
447(90.3)
13,491(9.7)
11,890(15.1)
4,602(37.6)
FY3/20: (664) (-%)
FY3/19: 4,482 (down 40.3%)

Net income per
Diluted net income
Return on equity
share
per share
Yen
Yen%
FY3/205.23
0.3
FY3/1953.34
3.2
Reference: Equity in income of affiliates (million yen)
FY3/20: -Ordinary profit on
total assets
%
2.4
5.0
FY3/19: -Operating profit to
sales
%
3.7
6.9

(2) Consolidated financial position
Total assets
Million yen
As of Mar. 31, 2020
229,843
As of Mar. 31, 2019
232,056
Reference: Shareholders’ equity (million yen)

Net assets
Million yen
139,209
145,671
As of Mar. 31, 2020: 138,981

Equity ratio%

Net assets per share
Yen
60.5
1,641.34
62.7
1,694.45
As of Mar. 31, 2019: 145,595(3) Consolidated cash flow position

FY3/20FY3/19Cash flows fromoperating activities
Million yen
14,80313,066

Cash flows frominvesting activities
Million yen(16,418)(9,152)

Cash flows fromfinancing activities
Million yen(1,098)(9,532)

Cash and cash equivalents
at end of period
Million yen
23,84326,558

2. Dividends
Dividend per share

Dividend payout Dividend on
ratio
equity1Q-end2Q-end3Q-endYear-end
Total(consolidated) (consolidated)
Yen
Yen
Yen
Yen
Yen
Million yen%%
FY3/19
29.00
31.00
60.00
5,172
112.5
3.5
FY3/20
23.00
23.00
46.00
3,921
880.0
2.8
FY3/21 (forecasts)
Note: Forecasts for the 2Q-end and year-end dividends for FY3/21 are undecided at this time.
Breakdown of 2Q-end dividends for FY3/19: Ordinary dividends: 22.00 yen; Commemorative dividends: 7.00 yen
Breakdown of Year-end dividends for FY3/19: Ordinary dividends: 23.00 yen; Commemorative dividends: 8.00 yen
Total
dividends

3. Consolidated Forecast for the Fiscal Year Ending March 31, 2021 (April 1, 2020 – March 31, 2021)
There is no forecast for the fiscal year ending in March 2021 at this time. Determining a reliable forecast is not possible because of
the difficulty of predicting the effects of the COVID-19 crisis on the performance of the AOKI Group.
An announcement will be made as soon as it becomes possible to determine a forecast.

* Notes(1) Changes in consolidated subsidiaries during the period (changes in scope of consolidation): None
(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others:None2) Changes in accounting policies other than 1) above:None3) Changes in accounting-based estimates:

Yes

4) Restatements:

None

Note: Please refer to “Changes in Accounting-based Estimates” on page 13 for further information.

(3) Number of shares outstanding (common shares)
1) Number of shares outstanding (including treasury stock) at the end of the period
As of Mar. 31, 2020:

90,649,504 shares

As of Mar. 31, 2019:

90,649,504 shares

As of Mar. 31, 2019:

4,724,330 sharesFiscal year ended Mar. 31, 2019:86,287,266 shares

2) Number of shares of treasury stock at the end of the period
As of Mar. 31, 2020:

5,974,058 shares

3) Average number of shares outstanding during the period
Fiscal year ended Mar. 31, 2020:

85,577,316 shares(For reference) Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2020 (April 1, 2019 – March 31,
2020)(1) Non-consolidated results of operations

FY3/20FY3/19Operating revenue
Million yen
%
6,523
15.3
5,660
5.2

Operating profit
Million yen%
646(26.9)
885
12.0
Diluted net income per shareYen

FY3/20FY3/19Net income per share
Yen
57.00
75.88

(Percentages represent year-on-year changes)
Ordinary profit
ProfitMillion yen%
Million yen%
5,737(18.8)
4,878(25.5)
7,063
32.9
6,547
30.2

-

(2) Non-consolidated financial position
Total assets
Million yen
As of Mar. 31, 2020
163,525
As of Mar. 31, 2019
157,174
Reference: Shareholders’ equity (million yen)

Net assets
Million yen
114,429
116,447
As of Mar. 31, 2020: 114,200

Equity ratio%

Net assets per share
Yen
69.8
1,348.69
74.0
1,354.34
As of Mar. 31, 2019: 116,371

Note 1: This financial report is not subject to audit by certified public accountants or auditing firms.
Note 2: Cautionary statement with respect to forecasts and other matters
Disclosure of the information meeting materials
The Company plans to hold a financial results meeting for institutional investors and analysts by telephone conference on Friday,
June 5, 2020. Materials to be distributed at this event will be available on the Company’s website on the day before the meeting.

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

Contents of Attachments
Pages
2

1. Overview of Results of Operations, etc.
(1) Results of Operations

2(2) Financial Position

4(3) Cash Flows

4(4) Outlook

5

2. Basic Approach for the Selection of Accounting Standards

5

3. Consolidated Financial Statements and Notes

6(1) Consolidated Balance Sheet

6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

8

Consolidated Statement of Income

8

Consolidated Statement of Comprehensive Income

9(3) Consolidated Statement of Changes in Shareholders’ Equity

10(4) Consolidated Statement of Cash Flows

12(5) Notes to Consolidated Financial Statements

13

Going Concern Assumption

13

Reclassifications

13

Changes in Accounting-based Estimates

13

Additional Information

13

Segment and Other Information

14

Per Share Information

17

Subsequent Events18

4. Other

18

Changes in Directors

18

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AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

1. Overview of Results of Operations, etc.
(1) Results of Operations
In prior years, rent income of real estate and the rent cost of real estate were included in non-operating profit, selling,
general and administrative expenses, and non-operating expenses. Beginning with the current fiscal year, rent
income of real estate and the rent cost of real estate are instead included in sales and cost of sales. Comparisons andanalysis using results of operations in the previous fiscal year are based on figures that have been restated toconform with this change.
In the fiscal year that ended on March 31, 2020, corporate earnings and the labor market continued to improve inJapan but the economy began showing increasing signs of stagnation following the October 2019 consumption tax
hike. However, the economy slowed down rapidly due to the global outbreak of COVID-19 and the current
economic environment is extremely challenging. The AOKI Group implemented various measures in all businesssegments as explained below. Despite these activities, sales and earnings were lower than in the previous fiscal year
primarily because of the immense negative impact of COVID-19.
Sales
Operating profit
Ordinary profit
Profit attributable to owners of parent

180,220 million yen
6,649 million yen
5,501 million yen
447 million yen(down 7.6% year-on-year)(down 50.7% year-on-year)(down 53.7% year-on-year)(down 90.3% year-on-year)

Operating results by segment are as follows.
Fashion Business
AOKI conducted a Freshers Fair to target the so-called “freshers (freshman) market,” which consists mainly of new
university graduates starting their first jobs. AOKI used advertising featuring Sexy Zone, a group of singers
belonging to the same generation, and Ms. Mio Imada, an actress who has appeared in many TV dramas. In one step
to respond to the change in business apparel styles, some stores and the AOKI e-commerce shop started selling the“nano.universe DESIGN” line of new business apparel. This apparel was created by nano.universe, a popular
apparel retailer that handles the fashions of many companies. During the fiscal year, seven stores were opened and
54 stores were closed due to examinations of stores from the standpoints of profitability and AOKI’s dominant areas.
These closings include stores closed for relocation and conversions to a café complex or other business format. As aresult, there were 519 AOKI stores at the end of the fiscal year compared with 566 at the end of the previous fiscal
year.
ORIHICA conducted a Freshers Fair by using Internet videos and social networking services, a Pre-School
Ceremony Fair to give parents ideas for apparel to wear at ceremonies at a child’s nursery school or kindergarten,
and other special campaigns. During the fiscal year, one ORIHICA store was opened and 13 stores were closed to
improve the efficiency of operations. As a result, ORIHICA had 119 stores at the end of the fiscal year comparedwith 131 at the end of the previous fiscal year.
Although many actions were taken during the fiscal year, a warm winter and other unfavorable weather, the change
in business apparel styles, and the October 2019 consumption tax hike all had a negative effect on the performanceof ORIHICA stores. In addition, COVID-19 caused a big downturn in the number of customers in late February andthe entire month of March, which is normally ORIHICA’s peak season. As a result, sales in this segment decreased
14.0% to 98,352 million yen and operating profit decreased 60.3% to 2,886 million yen.
Anniversaire and Bridal Business
ANNIVERSAIRE INC., which operates guesthouse-style wedding and reception facilities, promoted TRENDCOLLECTIONS, a new wedding format, and increased marketing activities by using social networking services inorder to attract customers. Despite these actions, the number of weddings was much lower than one year earlier. The
smaller number of wedding and reception locations at this company and changing market conditions were two
reasons for this decline. In addition, many weddings and receptions were postponed starting in late February becauseof COVID-19. As a result, sales decreased 12.4% to 22,270 million yen and operating profit decreased 79.7% to 439
million yen.
2

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

Entertainment Business
KAIKATSU CLUB, a chain of café complexes, completed renovations of 76 locations during the fiscal year.
Improvements include private rooms with locked doors, the addition of karaoke rooms, no-smoking booths andshowers, and other changes. In addition, cafés increased activities for meeting customers’ needs, such as byproviding space for teleworking and by holding a Turkish Rice (pork cutlet, spaghetti and rice pilaf) Fair consistingof limited-time-only menu items. This business has started a new format that combines a KAIKATSU CLUB with a
FiT24 fitness center, which uses a self-service format and is open 24 hours. The new format has been performing
well by enabling customers to utilize the services and equipment of both a café club and fitness center.
In the COTE D’AZUR karaoke business, 16 locations were remodeled, karaoke units with the latest technologies
were installed and there were many special event campaigns in order to make existing locations more appealing.
During the fiscal year, 85 KAIKATSU CLUBs and 28 FiT24 locations were opened and 10 karaoke locations wereclosed, including locations closed for conversion into café complexes to improve efficiency. As a result, there were
602 stores in this business segment at the end of the fiscal year compared with 499 at the end of the previous fiscal
year.
Sales increased 7.9% to 58,388 million yen due to contributions from new facilities and strong existing-store sales.
Operating profit decreased 16.0% to 2,672 million yen due to higher expenses related to new store openings and theimpact of COVID-19.
Real Estate Leasing Business
Segment sales increased 16.3% to 3,624 million yen mainly because of an increase in the subleasing of closed
properties in the Fashion Business and COTE D’AZUR karaoke business. Operating profit increased 4.8% to 668
million yen.
Impact of COVID-19 in March 2020
Change in existing-store performancevs. March 2019

Effects of the COVID-19 crisis

Fashion

Sales:
down 32.9%
Number of customers: down 35.0%
Sales per customer: up 3.2%

- 29.3% decrease in “freshers” customers at AOKI
because school graduation and entrance ceremonies
were canceled- 36.6% decrease in the number of standard customers(excluding “freshers”) at AOKI as people stayedhome and switched to teleworking- 35.8% decrease in existing-store sales at ORIHICA
because of temporary store closings and other reasons

Anniversaireand Bridal

Sales:

down 53.3%- The number of weddings was down by about 300 as
couples rescheduled or canceled weddings

Sales:
down 17.2%
Number of customers: down 15.6%
Sales per customer: down 1.9%

- 37.2% decrease in existing karaoke facility sales and12.0% decrease in existing café complex sales
because people stayed home and for other reasons- An increase in the number of people who canceled
FiT24 fitness center memberships
Cancellations of more than 2,500 memberships

Segment

Entertainment

3

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

(2) Financial Position
Balance sheet position
AssetsTotal assets at the end of the fiscal year under review decreased 2,213 million yen from the end of the previous fiscal
year to 229,843 million yen.
Current assets decreased 7,651 million yen from the end of the previous fiscal year. There were decreases of 2,714
million yen in cash in hand and in banks, 3,337 million yen in accounts receivable-trade mainly as a result of adecrease in sales, and 1,392 million yen in inventories due to a decrease in procurement and other factors. Fixed
assets increased 5,438 million yen from the end of the previous fiscal year as tangible fixed assets increased 7,575
million yen due to new store openings and other factors, while investment securities decreased 1,502 million yen
due mainly to sales.
Liabilities
Current liabilities decreased 4,590 million yen from the end of the previous fiscal year. There were decreases of
3,598 million yen in accounts payable-trade mainly due to a decrease in procurement and 720 million yen in accrued
bonuses for employees. Long-term liabilities increased 8,838 million yen. There was an increase of long-termborrowings of 5,507 million yen mainly due to a 9,000 million yen of new loan and scheduled repayment, andincreases of lease obligations and asset retirement obligations of 1,420 million yen and 1,124 million yen,respectively, due to new store openings and other factors.
Net assets
Net assets decreased 6,461 million yen from the end of the previous fiscal year. There was a decrease of 4,190
million yen in retained earnings due to a profit attributable to owners of parent and dividend from surplus, and anincrease of 1,289 million yen in treasury stock due to stock repurchases.
(3) Cash Flows
Cash flow position(Millions of yen)
FY3/20FY3/19Cash flows from operating activities

13,066

14,803

Cash flows from investing activities(9,152)(16,418)

Cash flows from financing activities(9,532)(1,098)

Increase (decrease) in cash and cash equivalents(5,617)(2,714)

Cash and cash equivalents at beginning of period

32,17526,558Cash and cash equivalents at end of period

26,55823,843

Cash and cash equivalents at the end of the fiscal year under review decreased 2,714 million yen from the end of theprevious fiscal year to 23,843 million yen mainly due to a decrease in profit before income taxes and an increase inpayments for acquisition of tangible fixed assets, while there were proceeds from long-term borrowings and adecrease in income taxes paid.
Net cash provided by operating activities increased 1,736 million yen to 14,803 million yen on a year-on-year basis.
The principal factors were profit before income taxes of 1,707 million yen, depreciation and amortization of 8,807
million yen, and impairment loss of 3,710 million yen.
Net cash used in investing activities increased 7,266 million yen to 16,418 million yen on a year-on-year basis. Thiswas mainly due to the payments of 13,959 million yen for the acquisition of tangible fixed assets for capital
investment, 971 million yen for acquisition of intangible fixed assets, and 838 million yen for leasehold andguarantee deposits.
Net cash used in financing activities decreased 8,433 million yen to 1,098 million yen on a year-on-year basis. Thiswas mainly due to scheduled repayment of long-term borrowings of 2,650 million yen, repayments of lease

4

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

obligations of 2,013 million yen, and cash dividends paid of 4,636 million yen, while there were proceeds fromlong-term borrowings of 9,000 million yen for capital expenditure.
(4) Outlook
There is no forecast for the fiscal year ending in March 2021 at this time. As was explained in “Subsequent Events”
on page 18, determining a reliable forecast is not possible because of the difficulty of predicting the length of the
COVID-19 crisis and the effects of this crisis on the performance of the AOKI Group.
Risk factors involving COVID-19
The COVID-19 outbreak that began early in 2020 had a big impact on the AOKI Group as people stayed home andbusinesses reduced operating hours. The impact was especially severe in the Fashion Business because of the steep
decline in sales that began in late February 2020, which is normally the start of the peak period for the number ofcustomers at the AOKI Group’s apparel stores. Overall, the pandemic has caused consolidated sales to decline little
over 4% year-on-year in the fiscal year that ended in March 2020. This crisis is likely to have a very big impact on
the Japanese economy in the fiscal year ending in March 2021 due to the expected length of the state of emergency
in Japan and the COVID-19 pandemic. Unemployment is high and consumer spending is lackluster. Furthermore, if
AOKI Group stores need to continue to suspend operations or reduce operating hours, the resulting decline in sales
may have a significant effect on results of operations.
2. Basic Approach for the Selection of Accounting Standards
The AOKI Group’s operations are located in Japan and the Group has little or no need of raising funds in overseas
markets. Moreover, the percentage of shares held by foreign shareholders is relatively small. In view of the above
factors the Company currently uses Japanese accounting standards for its financial statements.
The Company will consider using International Financial Reporting Standards (IFRS) if considered necessary by the
future direction of the Group’s business development, the use of IFRS by other companies in Japan and other factors.

5

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet
FY3/19(As of Mar. 31, 2019)(Millions of yen)
FY3/20(As of Mar. 31, 2020)

AssetsCurrent assets
Cash in hand and in banks

26,55823,843

Accounts receivable-trade

11,7938,455

Inventories

25,57424,181Other current assets

9,061

8,851

Allowance for doubtful accounts

(38)

(36)

72,94865,297

Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures, net

134,265

141,422

Accumulated depreciation(73,332)(74,921)

Buildings and structures, net

60,933

66,501

16,947

18,214(9,366)(9,963)

Machinery, vehicles, tools, furniture and fixtures
Accumulated depreciation
Machinery, vehicles, tools, furniture and fixtures, net
Land
Lease assets

7,581

8,250

36,941

36,138

13,841

16,497

Accumulated depreciation(9,473)(10,374)

Lease assets, net

4,367

6,122

Construction in progress

134

519

Total tangible fixed assets

109,958

117,533

5,932

5,631

4,209

2,706

Intangible fixed assets
Investments and other assets
Investment securities
Guarantee deposits

7,881

7,740

Leasehold deposit

20,536

20,653

Deferred income tax assets

8,442

8,273

Other investments and other assets

2,186

2,048

Allowance for doubtful accounts

(40)

(40)

Total investments and other assets

43,216

41,382

159,107

164,546

232,056

229,843

Total fixed assets
Total assets

6

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

(Millions of yen)
FY3/20(As of Mar. 31, 2020)

FY3/19(As of Mar. 31, 2019)
Liabilities
Current liabilities
Accounts payable-trade18,162

14,563Current portion of long-term borrowings

2,650

3,493

Lease obligations

1,709

2,024

Accounts payable-other

5,903

5,515

Accrued income taxes
Accrued bonuses for employees

579

407

2,078

1,357

83

39

Other current liabilities

6,010

5,187

Total current liabilities

37,17732,587Long-term borrowings

34,82540,332

Lease obligations

3,216

4,636

872

695

Retirement benefit liability

1,094

1,276

Asset retirement obligations

6,466

7,591

Accrued bonuses for directors (and other officers)

Long-term liabilities

Accrued costs for customer point program

Other long-term liabilities

2,733

3,513

Total long-term liabilities

49,20858,04686,38590,634

Share capital

23,282

23,282

Capital surplus

27,84627,823Retained earnings

100,488

96,298Treasury stock(6,302)(7,592)

Total shareholders’ equity

145,315

139,812

Unrealized gain on securities

370

(726)

Remeasurements of defined benefit plans

(89)

(105)

Total accumulated other comprehensive income

280

(831)

75

228

145,671

139,209

232,056

229,843

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

Stock acquisition rights
Total net assets
Total liabilities and net assets

7

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income(Millions of yen)
FY3/20(Apr. 1, 2019 – Mar. 31, 2020)

FY3/19(Apr. 1, 2018 – Mar. 31, 2019)
Sales

195,054

180,220

Cost of sales

111,380

107,737

Gross profit

83,673

72,483

Selling, general and administrative expenses

70,182

65,833Operating profit

13,491

6,649

Interest income

91

78

Dividend income

78

73

Insurance fee income

40

162

Non-operating profit

Compensation income

-

85

Other

177

159

Total non-operating profit

388

557

Interest expenses

299

282

Loss on disposal of fixed assets
Expenses for events to celebrate AOKI’s 60th
anniversary
Other

558

839

450

-

679

583

1,988

1,705

11,8905,501

Non-operating expenses

Total non-operating expenses
Ordinary profit
Extraordinary gains
Gain on sale of fixed assets

175

65

Gain on sales of investment securities

27

100

Gain on reversal of stock acquisition rights

124

Total extraordinary gains

215

170

4,153

3,710

444

-

-

84

Extraordinary losses
Impairment loss
Loss on liquidation of subsidiaries and associates
Loss on valuation of investment securities
Loss on disaster

71

169

4,669

3,964

Profit before income taxes

7,436

1,707

Current income taxes

2,670

818

Deferred income taxes

163

441

Total income taxes

2,834

1,260

Profit4,602

447

Profit attributable to owners of parent

4,602

447

Total extraordinary losses

8

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

Consolidated Statement of Comprehensive Income
FY3/19(Apr. 1, 2018 – Mar. 31, 2019)(Millions of yen)
FY3/20(Apr. 1, 2019 – Mar. 31, 2020)

4,602

447

(218)

(1,096)

ProfitOther comprehensive income
Unrealized gain on securities
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

97

(15)

(120)

(1,112)

4,482

(664)

4,482

(664)

-

-

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

9

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

(3) Consolidated Statement of Changes in Shareholders’ Equity
FY3/19 (Apr. 1, 2018 – Mar. 31, 2019)(Millions of yen)
Shareholders’ equity

Balance at the beginning ofcurrent period

Common stock

Capital surplus

23,282

27,833Retained earnings Treasury stock
100,299(5,376)

Total
shareholders’equity146,039

Changes of items during period
Dividend from surplus(4,413)(4,413)

Profit attributable to owners ofparent

4,602

4,602

Purchase of treasury stock
12

Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at the end of current
period

(986)

(986)

59

72

-

12

188

(926)

(724)

23,282

27,846

100,488(6,302)

145,315

Accumulated other comprehensive income
Remeasurements
Unrealized gainof defined benefit
on securities
plans
Balance at the beginning ofcurrent period

588

(187)

Total accumulated
othercomprehensive
income401

Stockacquisitionrights87

Total net assets

146,528

Changes of items during period
Dividend from surplus(4,413)

Profit attributable to owners ofparent

4,602

Purchase of treasury stock(986)

Disposal of treasury stock72

Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at the end of current
period

(218)

97

(120)

(12)

(132)

(218)

97

(120)

(12)

(857)

370

(89)

280

75

145,671

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AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

FY3/20 (Apr. 1, 2019 – Mar. 31, 2020)(Millions of yen)
Shareholders’ equity

Balance at the beginning ofcurrent period

Common stock

Capital surplus

23,282

27,846

Retained earnings Treasury stock
100,488(6,302)

Total
shareholders’equity145,315

Changes of items during period
Dividend from surplus(4,637)(4,637)447

447

Profit attributable to owners ofparentPurchase of treasury stock(22)

Disposal of treasury stock
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at the end of current
period(1,399)(1,399)

110

87

-

(22)

(4,190)(1,289)(5,502)

23,282

27,82396,298(7,592)

139,812

Accumulated other comprehensive income
Remeasurements
Unrealized gainof defined benefit
on securities
plans
Balance at the beginning ofcurrent period

370

(89)

Total accumulated
othercomprehensive
income280

Stockacquisitionrights75

Total net assets

145,671

Changes of items during period(4,637)

Dividend from surplus
Profit attributable to owners ofparent

447

Purchase of treasury stock(1,399)

Disposal of treasury stock87

Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at the end of current
period(1,096)(15)(1,112)

153

(958)

(1,096)(15)(1,112)

153(6,461)

(726)

(105)

(831)

228

139,209

11

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

(4) Consolidated Statement of Cash Flows
FY3/19(Apr. 1, 2018 – Mar. 31, 2019)(Millions of yen)
FY3/20(Apr. 1, 2019 – Mar. 31, 2020)

Profit before income taxes

7,436

1,707

Depreciation and amortization

8,229

8,807

Impairment loss

4,153

3,710

183

158

(2,018)

-

(186)

(177)

(170)

(151)

299

282

Cash flows from operating activities

Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for retirement benefits
for directors (and other officers)
Increase (decrease) in accrued costs for customer point
programInterest and dividend income
Interest expenses
Loss on liquidation of subsidiaries and associates

444-

Decrease (increase) in accounts receivable-trade

(134)

3,337

Decrease (increase) in inventories
Increase (decrease) in accounts payable-trade

432

1,392

(1,649)(3,598)

Increase (decrease) in accrued consumption taxes

(892)

(97)

Other

2,394

1,009

Subtotal

18,523

16,383

Interest and dividend income received

139

143

Interests paid

(300)

(276)

(6,170)(2,953)

875

1,506

13,066

14,803

Payments for acquisition of tangible fixed assets(7,035)(13,959)

Income taxes paid
Income taxes refund
Net cash provided by operating activities
Cash flows from investing activities
Payments for acquisition of intangible fixed assets(1,206)(971)

Payments for leasehold and guarantee deposits
Proceeds from collection of leasehold and guarantee
deposits
Net decrease (increase) in short-term borrowings

(965)

(838)

737

235

170

-

Net decrease (increase) in trust beneficiary rights

(36)

21

Other

(817)

(907)

(9,152)(16,418)

Net cash used in investing activities
Cash flows from financing activities
Proceeds from long-term borrowings

1,000

9,000

Repayments of long-term borrowings(2,650)(2,650)

Repayments of lease obligations(2,484)(2,013)(986)(1,399)(4,411)(4,636)-600(9,532)(1,098)

Payments for purchase of treasury stock
Dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents(0)0Increase (decrease) in cash and cash equivalents(5,617)(2,714)

Cash and cash equivalents at beginning of period

32,17526,558Cash and cash equivalents at end of period

26,55823,843

12

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
No reportable information.
Reclassifications
Consolidated Statement of Income
In prior years, rent income of real estate and the rent cost of real estate were included in non-operating profit, selling,
general and administrative expenses, and non-operating expenses. Beginning with the current fiscal year, rent
income of real estate and the rent cost of real estate are instead included in sales and cost of sales.
This change was made to more properly incorporate the Real Estate Leasing Business in the financial statements.
Real estate leasing is now positioned as one of the major businesses of AOKI Holdings. Rent income of real estate isa consistent source of earnings and more growth of this income is expected as the number of leased properties
increases. In addition, the profitability of this business has been properly managed by the relevant department.
Consolidated financial statements for the previous fiscal year have been restated to reflect these reclassifications.
Accordingly, “rental income of real estate” under “non-operating profit” of 524 million yen, “rent cost of real estate”
under “non-operating expenses” of 415 million yen and real estate-related expenses, which was included in “selling,
general and administrative expenses,” of 27 million yen in the consolidated statement of income for the previous
fiscal year has been reclassified. As a result, sales and cost of sales increased 1,135 million yen and 1,054 million
yen, respectively.
“Insurance fee income,” included in “other” under “non-operating profit” in the previous fiscal year, is reclassified
and presented as a separate line item in the current fiscal year since the amount exceeded 10/100 of total
non-operating profit. Consolidated financial statements for the previous fiscal year have been restated to reflect thisreclassification.
Accordingly, “other” under “non-operating profit” of 218 million yen in the consolidated statement of income forthe previous fiscal year is reclassified and divided into “insurance fee income” of 40 million yen and “other” of 177
million yen.

Changes in Accounting-based Estimates
Changes in Accounting-based Estimates for Asset Retirement Obligations
AOKI Holdings has recorded asset retirement obligations for returning leased space to its original condition inassociation with real estate leasing contracts for stores and other properties. According to the store closure and otherinformation, the Company changed its accounting-based estimates for restoration expenses which will be required
for store closures. As a result of this change, an increase of 650 million yen is added to asset retirement obligations
before the change. The effect of this change on profit/loss is insignificant.

Additional Information
Accounting-based Estimates
As of May 20, 2020, the COVID-19 pandemic is continuing to have a significant negative impact on the business
operations of the AOKI Group. Many estimates for accounting purposes are used by the AOKI Group for the
preparation of the consolidated financial statements. To incorporate the effects of COVID-19 in these estimates, wehave used primarily the following assumptions.
The following information is based on estimates and judgments that the Company believes are reasonable based on
current market conditions and available information. Actual results of operations may differ from this information inthis extremely uncertain environment because of the inability to predict how much the COVID-19 pandemic willcontinue to spread, when this crisis will end and other upcoming events.
The effects of COVID-19 are likely to continue to expand somewhat in all regions of Japan where the businesses of
the AOKI Group operate stores and other facilities. The sales and operating profit of these stores and other facilities
13

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

may decline due to restrictions on their operations, lower demand and other reasons. We expect sales in thesebusinesses in the fiscal year ending in March 2021 to decline from the current fiscal year due to the effects of the
COVID-19 pandemic. Sales are likely to be down 25% in the Fashion Business, approximately 5%-25% in the
ANNIVERSAIRE and Bridal Business, and about 25% in the Entertainment Business.
Determining a forecast is difficult because of the inability to foresee when the COVID-19 crisis will end. To
establish the best possible estimates, based on the assumption that the crisis will wind down by the end of June 2020
at the soonest and at the end of March 2021 at the latest, the expected value method is used for some estimates foraccounting purposes that are utilized for the calculation of the amounts shown on the financial statements.
The AOKI Group’s businesses fall in three categories – Fashion Business, the ANNIVERSAIRE and Bridal Businessand Entertainment Business. The Fashion Business handles products closely linked with the daily necessities ofdomestic consumers. The ANNIVERSAIRE and Bridal Business operates non-lifestyle facilities for special
occasions where stable demand is expected. The Entertainment Business offers services that are steadily becoming apart of consumer lifestyles. As a result, once the COVID-19 crisis ends, we believe that demand for our products andservices is very likely to return to about the same level as it was prior to the start of this crisis.
The following are the details of the accounting-based estimates with high uncertainty used in the preparation of
consolidated financial statements of the Group.
1. Impairment losses on fixed assets
For the determination of signs of impairment and the calculation of the amounts that can be recovered as of March
31, 2020, the Company estimated the negative effect of COVID-19 on future cash flows. Estimates of future cash
flows reflect the effects of the spread of these infections and the assumption that these infections will continue toincrease to some degree in all regions where the AOKI Group operates stores and other facilities. Predicting when
this crisis will end is impossible. We have established a number of scenarios based on the premise that this crisis
may end at some point three months to one year from now. We then used the expected value method in order toestablish estimates of future cash flows.
2. Recoverability of deferred tax assets
To estimate the amount of deferred tax assets to recognize, the AOKI Group estimates future taxable income andtax-deductible losses carried forward by using forecasts for results of operations that are based on reasonableassumptions. The forecast as of March 31, 2020 incorporates the negative effects of the COVID-19 crisis and of theassumption that there may be a further increase in these infections in all regions of Japan where the AOKI Group
operates stores and other facilities. Predicting when this crisis will end is impossible. Consequently, we determined
estimates by using a number of scenarios based on the premise that this crisis may end at some point three months to
one year from now.
Segment and Other Information
Segment information
1. Overview of reportable segment
The Group defines reportable segments as businesses for which financial details can be compiled; the Board of
Directors will review this information on a periodic basis in order to assist with decisions about allocating resourcesand evaluating the performance.
AOKI Holdings, as a pure holding company, supports the businesses of the various companies in the Group. AOKI
Holdings and each business company proposes and executes comprehensive strategies for the products and services
they sell in Japan.
The products and services of AOKI Holdings and the business companies are divided into segments. The four
reportable segments are the Fashion Business, the ANNIVERSAIRE and Bridal Business, the Entertainment
Business, and the Real Estate Leasing Business. AOKI and ORIHICA are both included in one business segment, theFashion Business, because they fit all the conditions for grouping including similarities in economic and product
14

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

characteristics.
The Fashion Business plans and sells men’s and women’s wear; the ANNIVERSAIRE and Bridal Business operates
wedding halls; the Entertainment Business operates KAIKATSU CLUB, which provides services and spaces for avariety of experiences that match the current needs and preferences of consumers, karaoke facilities, and fitness
centers; and the Real Estate Leasing Business leases real estate of the AOKI Group, including space previously
occupied by stores and other businesses that were closed, within the Group and to other companies.
2. Calculation methods for sales, profits/losses, assets, liabilities and other items for each reportable segment
The accounting treatment methods for reportable segments are generally the same as accounting principles andprocedures used for the preparation of the consolidated financial statements.
Profits for reportable segments are generally operating profit figures. Profits on and transfer amounts ofinter-segment transactions within the Group are based on current market prices.
3. Information related to sales, profits/losses, assets, liabilities and other items for each reportable segment
FY3/19 (Apr. 1, 2018 – Mar. 31, 2019)(Millions of yen)Amounts shown on
Adjustment
consolidated(Note 1)
financial statements(Note 2)

Reportable segment
AnniversaireEntertainment
and Bridal

Fashion

Real Estate
Leasing

Total

Sales
External sales
Inter-segment sales
and transfers
Total

114,401

25,413

54,102

1,135

195,054-

195,054

2

19

0

1,980

2,002

(2,002)-

114,404

25,433

54,102

3,116

197,056(2,002)

195,054

Segment profit

7,263

2,169

3,182

638

13,253237

13,491

Segment assets

113,200

39,451

43,529

1,198

197,379

34,677232,056

2,994

1,507

3,409

52

7,963

176

8,140

-

-

13

-

13

-

13

4,307

542

5,360

67

10,278

1,128

11,406

Other items
Depreciation andamortization
Amortization of goodwill
Increase in tangible
fixed assets andintangible fixed assets

Notes: 1. The above adjustments include the following items.
(1) The 237 million yen adjustment to segment profit includes 3,753 million yen in elimination for inter-segment
transactions, and -3,515 million yen in company-wide costs that cannot be allocated to any specific reportablesegments. Company-wide costs mainly include administration expenses of the Company that cannot be attributed
to reportable segments.
(2) The 34,677 million yen adjustment to segment assets includes -33,229 million yen in elimination of the offsetting
receivables from subsidiaries, and company-wide assets of 67,907 million yen that cannot be allocated to any
specific reportable segments. Company-wide assets consist mainly of the Company’s land and building andstructures of the head office that cannot be attributed to reportable segments.
(3) The 1,128 million yen adjustment to an increase in tangible and intangible fixed assets mainly includes investment
in building and structures related to extension and reconstruction of the head office.
2. Segment profit is adjusted to be consistent with operating profit on the consolidated statement of income.

15

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

FY3/20 (Apr. 1, 2019 – Mar. 31, 2020)(Millions of yen)Amounts shown on
Adjustment
consolidated(Note 1)
financial statements(Note 2)

Reportable segment
AnniversaireEntertainment
and Bridal

Fashion

Real Estate
Leasing

Total

Sales
External sales

98,351

22,26058,3881,220

180,220-

180,220

1

9

0

2,403

2,415

(2,415)-

Total

98,352

22,27058,3883,624

182,636(2,415)

180,220

Segment profit

2,886

439

2,672

668

6,667

(17)

6,649

Segment assets

102,989

37,31556,9291,468

198,704

31,139229,843

2,919

1,438

3,956

62

8,376

346

8,723

-

-

3

-

3

-

3

2,116

401

17,56929

20,116250

20,367

Inter-segment sales
and transfers

Other items
Depreciation andamortization
Amortization of goodwill
Increase in tangible
fixed assets andintangible fixed assets

Notes: 1. The above adjustments include the following items.
(1) The -17 million yen adjustment to segment profit includes 4,281 million yen in elimination for inter-segment
transactions, and -4,299 million yen in company-wide costs that cannot be allocated to any specific reportablesegments. Company-wide costs mainly include administration expenses of the Company that cannot be attributed
to reportable segments.
(2) The 31,139 million yen adjustment to segment assets includes -42,725 million yen in elimination of the offsetting
receivables from subsidiaries, and company-wide assets of 73,865 million yen that cannot be allocated to any
specific reportable segments. Company-wide assets consist mainly of the Company’s land and building andstructures of the head office that cannot be attributed to reportable segments.
(3) The 250 million yen adjustment to an increase in tangible and intangible fixed assets mainly includes investment incompany-wide systems.
2. Segment profit is adjusted to be consistent with operating profit on the consolidated statement of income.

4. Information related to revisions for reportable segments
In FY3/20, the Karaoke Facility Operations Business and Café Complex Operations Business were combined toreflect the reorganization of management and the increasing diversity of the operations. The combined business was
renamed the Entertainment Business.
As noted in the section “Reclassifications,” the business related to real estate leasing is reclassified and presented asa separate segment titled “Real Estate Leasing Business.”
The segment information for FY3/19 is prepared and disclosed based on the reportable segments after the revision.

16

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

Per Share Information(Yen)
FY3/20(Apr. 1, 2019 – Mar. 31, 2020)

FY3/19(Apr. 1, 2018 – Mar. 31, 2019)
Net assets per share

1,694.45

1,641.34

Net income per share

53.34

5.23

Notes: 1. Diluted net income per share is not presented since the Company has no potential stock with dilutive effects.
2. The following is a reconciliation of net income per share

Item

FY3/19(Apr. 1, 2018 – Mar. 31, 2019)(Millions of yen)
FY3/20(Apr. 1, 2019 – Mar. 31, 2020)

4,602

442

-

-

4,602

442

86,28785,577

Net income per share
Profit attributable to owners of parent
Profit not attributable to common shareholders
Profit attributable to owners of parent applicable tocommon shares
Average number of common shares outstanding
during the period (Thousand shares)

Summary of potential stock not included in thecalculation of diluted net income per share since there
was no dilutive effect

Stock acquisition rights issued
pursuant to the Board of
Directors’ resolution on
November 18, 2015
Stock Acquisition Rights No. 5
Number of stock acquisitionrights: 7,750

Stock acquisition rights issued
pursuant to the Board of
Directors’ resolution on
November 18, 2015
Stock Acquisition Rights No. 5
Number of stock acquisitionrights: 7,300
Stock acquisition rights issued
pursuant to the Board of
Directors’ resolution on June 27,
2019
Stock Acquisition Rights No. 6
Number of stock acquisitionrights: 11,345

3. The following is a reconciliation of net assets per share
Item(Millions of yen)
FY3/20(As of Mar. 31, 2020)

FY3/19(As of Mar. 31, 2019)

Total net assets
Deduction on total net assets[of which stock acquisition rights]

145,671

139,209

75

228

[75]

[228]

Net assets applicable to common shares

145,595

138,981

Number of common shares used in calculation of net
assets per share (Thousand shares)

85,92584,67517

AOKI Holdings Inc. (8214) Fiscal Year Ended March 31, 2020

Subsequent Events
Effects of temporary store closings and other actions in April 2020 and afterward due to COVID-19
Due to COVID-19 and the Japanese government’s declaration of a state of emergency on April 7, 2020, the storesand other facilities of all AOKI Group businesses have reduced operating hours or temporarily closed. In addition,
the openings of some new locations have been postponed or canceled. All of these events are having a negative
effect on sales.
In the Fashion Business, starting on April 8, the operating hours of about 500 stores were reduced and about 120
stores have suspended operations for at least one month. In the ANNIVERSAIRE and Bridal Business, all 13
locations suspended wedding and reception operations starting on April 7. In the Entertainment Business, about 200
KAIKATSU CLUB cafés suspended operations starting on April 11 for at least 10 days, and COTE D’AZUR
karaoke locations have suspended operations as necessary, and about 100 locations stopped operating on April 9 for
at least one month. In addition, we have postponed or canceled plans for some new stores and other locations in theFashion Business and Entertainment Business.
In all businesses, there are declines in sales and some variable expenses at locations where operations have been
reduced or suspended but still some fixed expenses.
As of May 20, it is impossible to foresee when the COVID-19 crisis will end and how much consumer demand will
recover after this crisis. This crisis is expected to have a significant effect on the AOKI Group’s financial condition,
results of operations and cash flows in the fiscal year ending in March 2021 and afterward. At this time, it is notpossible to determine a reliable estimate of the monetary impact of this crisis.
4. Other
Changes in Directors (to be effective June 26, 2020)(1) Candidate for corporate auditor
Corporate auditor

Hiroshi Kurita (Current Managing Executive Officer)(2) Retiring corporate auditor
Corporate auditor

Masaya Enomoto* This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

18