YONDOSHI HOLDINGS INC.
First Section, Tokyo Stock Exchange (8008)

Investors’ Presentation
Results for the Fiscal 2018
(The Fiscal Year Ended February 28, 2019)
April 10, 2019

Contents
Ⅰ. Overview and Summary of Fiscal 2018, the Fiscal Year Ended February
28, 2019
Ⅱ. Medium-term Strategic Approach
Ⅲ. Consolidated Business Results Forecasts for Fiscal 2019

Saishi Kimura. Chairman and Representative Director・CEO
Akihiro Takiguchi, President and Representative Director・COO
YONDOSHI HOLDINGS INC.
Note: Amounts identified in this report are presented in millions of yen rounded down. Percentage figures are calculated from raw data.

Disclaimer: Operating forecasts and forward-looking statements that are not of historic fact are based on information available
to management as of the date of this report. Subject to a variety of risks and uncertainties, these forecasts and forward-looking
statements may differ substantially from actual results due to a diversity of factors including changes in the Company’s
operating environment, market trends and fluctuations in foreign currency exchange rates. As a result, readers are advised not
to rely solely on the information provided as the basis for investment decisions.

2Contents
Ⅰ. Overview and Summary of Fiscal 2018, the Fiscal Year Ended
February 28, 2019
Ⅱ. Medium-term Strategic Approach
Ⅲ. Consolidated Business Results Forecasts for Fiscal 2019

Overview of Consolidated Operating Results for
Fiscal 2018
 Decrease in revenue and earnings due mainly to a delay in the recover of existing store sales
in the Jewelry Business Incidence of non-operating income, special charges, and a tax expense stemmingfrom temporary factors as a result of the Company’s business reorganization during
the fiscal year under review(Millions of yen)

Net sales
48,060Operating income

Ordinary income

Net income

6,102

7,562

5,293

47,118

6,804

4,984

2,440

－2.0%
FY2017
第68期実績
Actual Results

FY2018
第69期実績
Actual Results

FY2017
第68期実績
Actual Results

FY2017 (2018/2)(Millions ofyen, %)

ActualResults

Gross profit

48,06028,049Gross profit
margin58.4

Net sales－10.0%－18.3%FY2018
第69期実績
ActualResults

FY2017
第68期実績
Actual Results

FY2018 (2019/2)

(%)

100.0
58.4

Plans
(Revised)(%)

48,00027,554
57.4

100.0
57.4

－53.9%FY2018
第69期実績
Actual Results

FY2017
第68期実績
Actual Results

FY2018 (2019/2)
ActualResults

47,11827,155

(%)

100.0
57.6

57.6

FY2018
第69期実績
ActualResults

YoY

vs. Plan

Increase(Decrease)(%)

Increase(Decrease)
(%)

－2.0
－3.2

－1.8
－1.4

+0.2pt－0.8ptSG&A expenses

21,94745.7

22,25446.4

22,171

47.1

+1.0

－0.4

Operatingincome

6,102

12.7

5,300

11.0

4,984

10.6

－18.3

－5.9

Ordinary income

7,562
5,293

15.7
11.0

6,850
2,800

14.3
10.4

6,804
2,440

14.5
5.2

－10.0
－53.9

－0.6
－12.7

Net income4Operating income
Cost of sales ratio
FY2017 FY 2018
41.6% ⇒ 42.4%+0.8pt(Millions of yen)

SG&A expenses to net sales ratio
FY2017 FY 201845.7% ⇒ 47.1%+1.4pt

－ 942
6,102

－ 48

+223
4,984

Operatingincomemargin12.7%

Operating income

FY2017(2018/2)

Operatingincomemargin10.6%

Net sales

Cost of sales

SG&A expenses

Operating income

FY2018(2019/2)
5

Trends in Quarterly Business Results
Trends in Net Sales by Quarter
1Q
12,672 12,306

'15/2

'16/2

(Millions of yen)

3Q

2Q

4Q
14,815

11,588 11,341 11,216

11,142 11,742 11,347 11,086

10,87812,095 12,251 11,541 11,407

'17/2

'15/2

'19/2

'15/2

'18/2

'19/2

'16/2

'17/2

'18/2

'16/2

'17/2

'18/2

11,143

'19/2

'15/2

16,583

'16/2

'17/2

Trends in Operating Income by Quarter
1Q

2Q

15,321

14,226 13,880

'18/2

'19/2

(Millions of yen)

3Q

4Q
2,737 2,564 2,615
2,163

1,560

1,348

1,547

1,341

1,196
700

'15/2

'16/2

'17/2

(Millions of yen)

'18/2

'19/2

'15/2

FY2017(2018/2)

855

'16/2

1,157 1,067

'17/2

'18/2

797

'19/2

1,982

1,261
1,079 1,007
1,043 1,172

'15/2

'16/2

'17/2

'18/2

'19/2

'15/2

'16/2

'17/2

1Q
FY20182Q
FY20183Q
FY20184Q
FY2018FY2018(2019/2)

Increase /(Decrease)

'18/2

'19/2

YoY

Net sales

48,06011,216

10,878

11,143

13,88047,118

(942)

－2.0

Gross profit

28,049

6,497

6,085

6,460

8,112

27,155

(893)

－3.2

Operating income

6,102

1,196

797

1,007

1,982

4,984

(1,118)－18.3

6

Overview of Business Results by Segment～The Jewelry Business Decrease in revenue and earnings owing mainly to a delay in the recovery of bridal jewelry
sales and lower year-on-year existing store sales over the Christmas peak period of demand Began implementing roll-outs by price range from the fiscal year under review; achieved acertain level of success in addressing growing captive demand and the upswing in purchases
for own use(Millions of yen)

Net sales
30,98129,295

Operating income

Ordinary income

Net income

5,470

5,598

3,749

－5.4%

FY2017
1
Actual Results

FY2018
2
Actual Results

4,465－18.4%FY2017
Actual Results(Millions ofyen, %)Net sales
OperatingincomeOrdinary
incomeNet income

ActualResults－18.3%FY2018Actual Results

FY2017 (2018/2)

2,982

4,572

FY2017
Actual Results－20.5%FY2018Actual Results

FY2017
Actual Results

FY2018 (2019/2)

(%)

Plans
(Revised)(%)

ActualResults(%)

FY2018Actual Results

YoY

vs. Plan

Increase(Decrease) (%)

Increase(Decrease) (%)

30,981

100.0

29,900100.029,295

100.0

－5.4

－2.0

5,470

17.7

4,650

17.9

4,465

15.2

－18.4

－4.0

5,598

18.1

4,780

18.2

4,572

15.6

－18.3

－4.4

3,749

12.1

3,100

12.3

2,982

10.2

－20.5

－3.8

7

Jewelry Business:
Quarterly Trends in Mainstay Brand Existing Store Sales
Overall recovery trends excluding department store channel sales of 4ºC bridal jewelry
(%)

105
100

95
90
85
4ºC fashion jewerly

4ºC bridal jewerly (department store)

4ºC bridal jewerly (specialty store)

canal4ºC

80
1Ｑ

Existing stores

2Ｑ

1Q

2Q

3Ｑ

1H

3Q

4Ｑ

4Q

2H

Full year

4ºC fashion jewerly

97.8

92.2

94.9

97.0

97.4

97.3

96.3

4ºC bridal jewerly(department store)

92.4

84.0

87.8

90.3

92.3

91.4

89.7

4ºC bridal jewerly(specialty store)

91.4

94.6

93.1

96.9

100.5

98.9

96.3

canal4ºC

104.5

96.2

100.3

95.7

97.2

96.6

98.2 8

Overview of Business Results by Segment～The Apparel BusinessFirm trends in both the apparel manufacturing and everyday fashion businesses; increase in revenue andearnings
Successful steps to strengthen measures with major clients in the apparel manufacturing business; sound trend
Upward trend in the everyday fashion business with results exceeding the previous period on the back ofsuccessful efforts to expand the opening of new locations and to strengthen sales promotions(Millions of yen)

Net sales
17,079Operating income

17,822

603

566

+4.3%

Ordinary income

4,582

904

817

+6.5%

Net income+10.6%+771.6%526

FY2017
Actual Results

FY2018Actual Results

FY2017
Actual Results

FY2018Actual Results

FY2017 (2018/2)(Millions ofyen, %)Net sales
OperatingincomeOrdinary
incomeNet income

ActualResults

FY2017
Actual Results

FY2018Actual Results

FY2017
Actual Results

FY2018 (2019/2)
Plans(Revised)(%)

ActualResults(%)(%)

FY2018Actual Results

YoY

vs. Plan

Increase(Decrease) (%)

Increase(Decrease) (%)

17,079100.0

18,000100.0

17,822

100.0

+4.3

－1.0

566

3.3

700

3.9

603

3.4

+6.5

－13.9

817

4.8

1,000

5.6

904

5.3

+10.6

－0.1

526

3.1

990

5.5

4,582

25.7

+771.6+362.89

Overview of Financial Position and Cash Flows(Consolidated)Total assets, liabilities, and net assets stood at ¥59.9 billion, ¥16.3 billion, and ¥43.5 billion, respectively
Investment securities and net assets declined ¥6.4 billion and ¥9.8 billion, respectively, following
the implementation of the Company’s capital policy
Cash flows from financing activities: repurchase of the Company’s own shares totaling ¥7.2 billion;
paid cash dividends of roughly ¥1.8 billion as a part of efforts to return profits to shareholders

Financial Position

Cash Flows
As of February 28, 2019

Total assets¥59.9 billion¥43.5 billion

Total liabilities Total net assets¥ 16.3 billion(Millions of yen)

FY2017(2018/2)

FY2018(2019/2)

Increase(Decrease)

Operating cash
flows

5,427

1,664

(3,763)

Investingcash flows(3,023)

5,407+8,430Financing cashflows

(1,665)(9,344)(7,679)Free
cash flows

2,403

7,071

+4,66810

Overview of Capital Investment as well as Depreciation
and Amortization (Consolidated)
Capital investment: ¥0.89 billion Depreciation and amortization: ¥1.12 billion

FY2017 (2018/2)

FY2018 (2019/2)
YoY(Millions of yen, %)Actual Results

Capitalinvestment

Actual Results

1,230

895

FY2017 (2018/2)

FY2018 (2019/2)
YoY(Millions of yen, %)Actual Results

Depreciation andamortization

(335)

1,116

Actual Results

1,123

+7
11

Status of Store Openings
 Promoting a scrap and build policy in the Jewelry Business Net increase of six stores in the Apparel BusinessApparelBusiness

Jewelry BusinessJapan

FY2017(2018/2)

FY2018ActualResults(2019/2)

Total
Overseas

PALETTE

217

5

65

287

2

5

0

8

13

1

6

13

1

2

16

42

86

209

4

71

284

Roadsidebutique

Department
store

Bridal Shop

Fashion
Building

Fiscalyearend

5

79

43

90

Storesopened030Storesclosed0

6

Fiscalyearend

5

76

Total

12

Status of the Number of Domestic Brand Stores in the
Jewelry Business
4ºC

4ºC

FY2017(2018/2)

FY2018ActualResults(2019/2)

BRIDAL

canal 4ºC

EAU
DOUCE
4℃

MAISONJEWELL

Jewelry
Total

Luria４℃

Total

Fiscalyear-end

92

43

48

23

7

213

61

274

Storesopened

2

0

2

0

1

5

0

5

Storesclosed

3

1

4

0

1

9

10

19

Fiscalyear-end

91

42

46

23

7

209

51

260

* Composite stores that handle multiple brands are recorded as a single store by each individual brand.

13

Return of Profits to Shareholders
 With the basic policy of providing stable and continuous dividends,
YONDOSHI HOLDINGS also maintains a flexible approach toward therepurchase of its own shares Through a TOB, the Company repurchased roughly 3,250,000 shares of its own shares(at a cost of approximately ¥7.2 billion) during the fiscal year under review
 The Company declared an annual cash dividend of ¥75 per share, up ¥10 per share, for the fiscal year
ended February 28, 2019; this represented an eighth consecutive fiscal year of dividend growth(Millions of yen)

1,862

2,000
1,500

1,713

90.0
80.0

1,318

78.1

70.0
60.0

1,000
500

(%)

Total dividends (left scale)

50.0

31.4

Payout ratio (right scale)

40.0

25.9

30.0

0

20.0
FY2016 (2017/2)

FY2017 (2018/2)

FY2018 (2019/2)

FY2016 (2017/2)

FY2017 (2018/2)

FY2018 (2019/2)

Annual dividends per share (Yen)

50.0

65.0

75.0

Payout ratio (%)

25.9

31.4

78.1

Total return ratio (%)

―

―

374.1
14

Contents
Ⅰ. Overview and Summary of Fiscal 2018, the Fiscal Year Ended
February 28, 2019
Ⅱ. Medium-term Strategic Approach
Ⅲ. Consolidated Business Results Forecasts for Fiscal 2019

Management Indicator Policy
Historical approach toward management indicators

Bearing in mind equity in earnings of affiliates,
YONDOSHI HOLDINGS has positioned ordinary income
as an important management indicator
In light of this review

Identify the amount of profit on a cash basis as a key
management indicator in order to properly determine the levelof return to shareholders

Exclude Fuji Co., Ltd. from the scope of consolidation as an equity-method
affiliate as a result of the Company’s business reorganization
Exclude the impact of goodwill as a non-cash expense item

From ordinary income to operating income before theamortization of goodwill* Operating income before the amortization of goodwill = operating income + goodwill amortization
16

Medium-Term Management Objectives① ROE 10％* or higher② EPS ¥200* or higher③ Consecutive increase in dividends paid; target anannual dividend of ¥100 per share in the future* Calculated using net income before amortization of goodwill(Net income before amortization of goodwill = profit attributable to owners of parent + goodwill amortization)17

Capital Policy Initiatives for the Fiscal Year Ending
February 29, 2020
 Work to lift the level of returns to shareholders through the largescale repurchase of the Company’s own shares, while at the sametime further increasing ROE and EPS

Press release issued on April 10, 2019
Repurchase of the Company’s own shares・Total number of shares to be repurchased / aggregate cost of share
repurchase: Up to a maximum of 1,350,000 share (¥3.5 billion)* 5.85% of the total number of shares issued and outstanding (excluding
treasury stock)・Repurchase period: April 11, 2019 to August 31, 2019
・Repurchase method:(1) Repurchase through the ToSTNeT-3 off-hours trading system(2) Market repurchase on the basis of a trust agreement

18

Continued Emphasis on Maintaining Consecutive
Increases in the Payment of Cash Dividends
 Continue to emphasis increases in the payment of cash dividends through profit growthand higher returns to shareholders
 Plan to pay a cash dividend of ¥80 per share, up ¥5 per share, for the fiscal year ending
February 29, 2020 for a ninth consecutive fiscal year of dividend growth Target an annual cash dividend of ¥100 per share in the future(Yen)

Annual cash dividend results and outlook
75

80

65
50
40
30

32

20

20

21

22

FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019Outlook

FY2020
Outlook

FY2021
Outlook（2010/2）（2011/2）（2012/2）（2013/2）（2014/2）（2015/2）（2016/2）（2017/2）（2018/2）（2019/2）（2020/2）（2021/2）（2022/2）

19

Fiscal Year Ending February 29, 2020:
Review of the Return of Profits to Shareholders
Plan to pay a cash dividend of ¥80 per share, up ¥5 per share, for a ninth consecutive fiscal
year of dividend growth Following on from the previous period, plans to undertake the large-scale repurchase of own shares(Repurchased 130,000 shares on March 4; plans to repurchase own shares up to a maximum
1,350,000 shares (details outlined in a press release issued on April 10))

In addition to continuously increasing capital efficiency, YONDOSHI HOLDINGS is
maintaining its emphasis on consecutive increases in the payment of cash dividends
while working to lift the level of returns to shareholders
FY2018 (2019/2)

FY2019 (2020/2) Forecasts

Annual dividends per share (Yen)

75.0

80.0

EPS (Yen)

96.03

133.78

Payout ratio (%)

78.1

59.8

Total return ratio (%)

369.3

162.9

＜Reference：Management Indicator (Net income before amortization of goodwill )＞FY2018 (2019/2)

FY2019 (2020/2) Forecasts

ROE (%)

6.2

9.1

EPS (Yen)

115.6

174.1

* Forecast EPS before the amortization of goodwill is calculated after taking into account repurchase of
the Company’s own shares to the maximum amount identified in the fiscal year ending February 29, 2020.

20

Outlook for Profit Growth
Strengthen the Company’s business platformby rebuilding the Jewelry Business and work to
expand captive demand and purchases forown use while broadening the depth of profit growth8070

Growth factors

75

Operating income before theamortization of goodwill
Expand captive demand andpurchases for own use in
the Jewelry Business¥5.45 billion

65

60

55

Strengthen the Jewelry Business platform＋
Stable Apparel Business growth50

45
FY2018（2019/2）

FY2019（2020/2）

FY2020（2021/2）

FY2021（2022/2）

FY2022（2023/2）

FY2023（2024/2）

FY2024（2025/2）

FY2025（2026/2）

FY2026（2027/2）

FY2027（2028/2）

FY2028（2029/2）

21

Jewelry Business: Positioning of theFifth Medium-Term Management Plan
Current Status and Changes in the Operating Environment

 Toward a seamless market that extends beyond establishedchannels; outlook of an increasingly competitive environment
 Time required before a bridal jewelry market recovery
materializes Fluctuation in the Christmas gift market; difficult conditions
generally in the domestic jewelry brand market

Vision Build a robust brand and corporate structure Target a top share of the market in Japan
22

Enhance the Value of the 4ºC Brand:
3 Line Merchandising Engage in finely grained merchandising that is tailored to specific attributes by rolling out products by
price range
 Encourage captive demand and purchases for own use by upgrading and expanding the lineups of midand high-price range products (2nd/3rd Line) Work toward a recovery in existing store sales by also adjusting merchandising endeavors for 1st Lineproducts(%)

1st Line (Less than 30,000 yen)
3rd Line (70,000 yen or higher)

130

2nd Line (30,000 yen ～ 70,000 yen)

125
120
115
110
105
100
100
95
90
85
80
75
Mar. 2018

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan. 2019

Feb.

23

Enhance the Value of the 4ºC Brand:
Expand the Roll-Out of New Prototype Stores
 Increase the number of new 4ºC prototype stores to 14 as of February 28, 2019 by opening new stores and refurbishingexisting stores
 Sales of existing stores refurbished under the new prototype format exceed pre-refurbishment levels by 7.9 points
 Steadily promote new prototype stores in the fiscal year ending February 29, 2020 and beyond (plans to bring the number of
new prototype stores to 24 as of February 29, 2020 (6 newly opened stores and 4 refurbished stores)

4ºC Hiroshima PARCO Store 24

4ºC Rebranding Initiatives
Incorporating resources from outside the Group to promote 4ºC rebrandingin earnest

From FY 2019
FY 2018

FY 2017

Break free from a gift
image
・Change policies toward
promotion
・Initiate the roll-out of new
prototype stores

Work toward 4ºC
rebranding

Strengthen measures
・Rebuild the brand value
aimed at addressing
conveyed to customers
captive demand (purchases
for own use)
・Roll-out products by price range
Commence 3Line merchandising・Completely renew the 4ºC brand
site

25

Increase the Competitiveness of Bridal Jewelry Expectations toward department store channel bridal jewelry and the impact of special
benefit plan memberships
 Target online booking growth through 4ºC bridal specialty stores and increasing points ofcontact
 Roll-out the 2019Year model “Our Story” and promote the appeal of a unique experienceand values

26

Reinforce the Strength of the canal4ºC Brand
through Rebranding Enhance the strength of the brand through rebranding Appeal a unique world view of the brand to further growth Events marking the brand’s 10th anniversary; focus on product development

27

Upgrade Online Strategies
 Strengthen communications with customers utilizing SNS tools
 Develop online apps; improve the convenience of loyal customers and the precision ofcustomer relationship management
 Strengthen collaboration between online and brick and mortar stores with respect to fairs
and related promotional events28

Apparel Business: Positioning of theFifth Medium-Term Management Plan
Current Status and Changes in the Operating Environment

As customers become increasingly selective and the market exhibits
signs of a shakeout, the ability to forge a unique and distinct identity
and to gain a competitive edge is becoming increasingly important tocorporate survival
Ongoing efforts to bolster initiatives aimed at shifting production to
Bangladesh in the Apparel Business
Further entrenching the PALETTE brand’s dominant position in the
Kansai area by expanding the opening of new stores in the everyday
fashion business

Vision Hone overseas production and product planning capabilities whilefurther reinforcing the ODM function in the apparel manufacturingbusiness Target future sales of ¥15 billion by continuing to open stores thatreinforce the PALETTE brand’s dominant position in the Kansai area inthe everyday fashion business
29

Apparel Manufacturing Business Promote new proposals that draw on materials sourced from Bangladesh while making
the most of product planning capabilities
 Engage in stable operations by strengthening initiatives with existing partner companies

Deep China area

Shanghai area in China
Guangzhou area in China

Bangladesh
Dhaka Office： Factory owned by AS’TY group, office owned by AS’TY

VietnamAS’TY VIETNAM INC.
Hai Phong Factory30

Everyday Fashion Business Expecting to exceed sales of ¥10 billion in the fiscal year ending February 29, 2020 whiletargeting sales of ¥15 billion in the future on the back of efforts aimed at opening new
PALETTE brand stores mainly in the Kansai area
 Work to increase profit margins by strengthening product management capabilities,
promoting direct trade, and developing new products

PALETTE Chugoku, Shikoku and Kyushu area store
distribution map

PALETTE Kansai area store distribution map

31

Toward Stable and Continuous Growth～Creating Sustainable Value
Work toward enhancing value in the three jewelry SPA, apparel ODM, andretail businesses
VisionInputsBusinesses

Outputs

Customers

Jewelry SPA

Customers

Employees

Employees

Manufacturers

Manufacturers

Partnercompanies

Apparel OEM

RetailPartnercompanies
SocietySocietyEnhanced corporate value;
increased customer satisfaction

A century-old company and brandShareholders

Shareholders

Outcomes

Management and business platforms
The environment, society, and governance (ESG)32

Activities Aimed at Addressing ESG Issues (1) Only two Japanese companies (including F.D.C. Products Inc.) were affiliatedwith Responsible Jewellery Council (RJC) as of April 30, 2019.
F.D.C. Products is striving to contribute to improve reliability and standard ineach field of the jewerly market
 Every effort is made to promote responsible business practices while engaging in
activities that help realize a sustainable society and business operations
 Improve the quality as well as increase the level of service and transparency of
price and material background Work toward further enhancing value by clarifying the integrity of the F.D.C.
Products brand※What is the RJC・・・
The Responsible Jewellery Council is an international not-for-profit, standards and certification
organization. Covering social and environmental responsibility focusing on the jewelry industry,
the Council strives to realize responsible business practices for diamonds, gold and platinum acrossthe entire jewelry supply chain and processes from mine to retail.
33

Activities Aimed at Addressing ESG Issues (2)Reinforce personnel and promote humanresource development across the Group
as a whole Develop next-generation leaders Engage in Group-wide cross-sectional human resource education,
assignment, and hiring activities
 Develop human resources through in-house and external training

Promote diversity management
 Promote workstyle reform (work-life balance) Promote opportunities that allow women to excel

Quality assurance
 Further upgrade and expand the Group’s industry leading quality
assurance structure and systems
 Enhance the integrity of products and services

34

Contents
Ⅰ. Overview and Summary of Fiscal 2018, the Fiscal Year Ended
February 28, 2019
Ⅱ. Medium-term Strategic Approach
Ⅲ. Consolidated Business Results Forecasts for Fiscal 2019

Consolidated Business Results Forecasts
for Fiscal 2019
FY2018 (2019/2)（(Millions of yen, %)Results

FY2019 (2020/2)（％）

Full-year
forecasts

YoY（％）

Increase(Decrease) (%)

Net sales

47,118100.0

47,300

100.0

+0.4

Gross profit

27,155

57.6

27,26557.6+0.4

Gross profit margin57.6

Selling, general andadministrative expenses

22,17147.1

22,16546.9±0

Amortization of
goodwill

496

1.1

496

1.0

±0

Operating income

4,984

10.6

5,100

10.8

+2.3

Ordinary income

6,804

14.5

5,400

11.4

－20.6

Net income

2,440

5.2

3,400

7.2

+39.3

≪Reference ≫57.6

FY2018 (2019/2)±0

FY2019 (2020/2)

YoY

Operating income before
the amortization of
goodwill

5,480

11.6

5,596

11.8

+2.1

Net income before theamortization of goodwill

2,937

6.2

3,896

8.2

+32.7

* Operating income before the amortization of goodwill = operating income + goodwill amortization; net income before theamortization of goodwill = profit attributable to owners of parent + goodwill amortization

36

Fiscal Year Ending February 29, 2020:
Projected Key Management Indicators
Based on profit before the amortization of goodwill
FY2018 (2019/2)

Operating income

FY2019 (2020/2)
Forecasts

5,480

5,596

ROE (%)

6.2

9.1

EPS (Yen)

115.6

174.1

(Millions of yen)

* Operating income before the amortization of goodwill = operating income + goodwill amortization* Net income before the amortization of goodwill = profit attributable to owners of parent + goodwill amortization* Forecast EPS before the amortization of goodwill is calculated after taking into account repurchase of
the Company’s own shares to the maximum amount identified in the fiscal year ending February 29, 2020.

37

Trends in Growth Investments
 Continue investments aimed at increasing brand value and directed at growthfields Build a robust brand and corporate structure that can map out new growthstrategies in the next medium-term management plan
(Unit: Millions of yen)Amount of investment aimed at increasing brand value
Increase in brand value

Increase in brand value (growth)
2,098
1,962

1,726

（236）

FY2017FY2018（372）

FY2019 (Forecast)
38

Consolidated Business Results Forecasts by Segment
for Fiscal 2019 (Figures are after accounting for intrasegment net sales and transfers)
 Revenue projected to decrease and earnings to increase in the Jewelry Business by working
to increase profitability on the back of a scrap and build policy Both revenue and earnings expected to increase in the Apparel Business thanks to efforts
aimed at expanding the opening of new PALETTE brand stores
FY2018(2019/2)(Millions of yen, %)FY2019 (2020/2)

Results

The Jewelry
Business

The ApparelBusiness

Forecast

YoY

Net sales

29,29528,500－2.7

Operating income

4,465

4,600

+3.0

Ordinary income

4,572

4,700

+2.8

Net income

2,981

3,200

+7.3

Net sales

17,82218,800+5.5

Operating income

603

740

+22.7

Ordinary income

904

925

+2.3

4,582

560

－87.8

Net income

39Impact on an Increase in the Consumption Tax Rate
Despite a rush in demand and subsequent correction, the impact of an increase in
the consumption tax rate expected to level out after three months.
(%)

130

1997

125

2014

120
115
110
105
100
100
95
90
85
March

April

Existing store

March

May

April

June

May

July

June

July

AugustAugust

1997

129.1

90.7

98.0

96.6

103.3

103.5

2014

112.4

98.0

107.1

95.9

101.8

104.3

Increase in the consumption tax rate(1)3% to 5% on April 1, 1997 (2)5% to 8% on April 1, 201440

Plans for Store Openings and Closures Work to increase the profitability of stores in the Jewelry Business by promoting ascrap and build policy Plan to open six new PALETTE brand stores in the Apparel BusinessApparelBusiness

Jewelry BusinessJapan

FY2018ActualResults(2019/2)

FY2019Forecast(2020/2)

Total
Overseas

PALETTE

209

4

71

284

2

8

0

6

14

3

4

18

1

0

19

41

84

199

3

77

279

Roadsidebutique

Department
store

Bridal Shop

Fashion
Building

Fiscalyearend

5

76

42

86

Storesopened042Storesclosed2

9

Fiscalyearend

3

71

Total

41

Plans for the Number of Domestic Brand Storesin the Jewelry Business

4ºC

FY2018ActualResults(2019/2)

FY2019Forecast(2020/2)

4ºC
BRIDAL

canal 4ºC

EAU
DOUCE
4ºC

MAISONJEWELL

Jewelry
Total

Luria 4ºC

Total

Fiscalyear-end

91

42

46

23

7

209

51

260

Storesopened

6

2

0

0

0

8

0

8

Storesclosed

10

3

1

1

1

16

9

25

Fiscalyear-end

87

41

45

22

6

201

42

243

* Composite stores that handle multiple brands are recorded as a single store by each individual brand.

42

In Conclusion

Plans to achieve a turnaround from the decrease in revenue
and earnings in the fiscal year ended February 28, 2019 toan increase in both revenue and earnings in the fiscal year
ending February 29, 2020
Position operating income before the amortization of
goodwill as an important performance management
indicator in line with the absence of any equity in earnings
of affiliates from the fiscal year ending February 29, 2020
after reorganizing the Group’s structure
Initiate rebranding efforts in the Jewelry Business inearnest; work to increase the value of the 4ºC brandPursue continued stable growth by steadily implementing
existing strategies in the Apparel Business43

In Conclusion

Undertake the repurchase of the Company own shares up
to a maximum of 1,350,000 shares; in addition to lifting thelevel of returns to shareholders by actively promoting acapital policy, maintain the Company’s emphasis on themedium-term ROE target of 10% or higher and EPS of¥200 or higher(* on a net income before the amortization of goodwill basis)

Further improve the quality of management and contributeto lifting the level of each industry field as the leading
jeweler in Japan44

We kindly request that you direct all inquiries regarding this document and investor relations
in general to the following point of contact:

YONDOSHI HOLDINGS INC.
Corporate Planning Division (Kozuka, Moriyama, Mori)
TEL+81-3-5719-3274
FAX+81-3-5719-4462
E-mail ir-yondoshi@yondoshi.co.jp

Disclaimer: Forecasts and forward-looking statements are based on a wide range of assumptions.
YONDOSHI HOLDINSG INC. takes no responsibility for the accuracy of the information contained inthis document and does not guarantee its validity or outcome. Readers are asked to use this information
with the understanding that actual results may differ materially from estimates and forecasts.