Don Quijote Holdings
Second Quarter Results for Dec.
Dec 2014
F bFebruary
5th 2015
5th,0Earnings Summary, First Half of FY2015
Consolidated((Millions of yen)y )6 months to Dec. 2014
Actual6 months to Dec. 2013

Share

YoY

ActualShare

Net sales

342,224100.0%

112.8%

303,322100.0%

Gross profit

91,63426.8%

113.0%

81,075

26.7%

SGA

68,22320.0%

112.6%

60,571

20.0%

Operating profit

23,411

6.8%

114.2%

20,504

6.7%

Recurring profit

24,0447.0%

113.8%

21,1357.0%

Net profit

13,6944.0%

105.1%

13,0244.3%EPS(Yen)

174.41-104.5%

166.94-• Total sales increased by 12.8% YoY, same-store sales were up 4.6% YoY(DQ format only). We delivered upbeat sales
growth with our successful strategies for daily necessities and foods. We also took market share from competitors by leading
price competition after the consumption tax
tax-hike.
hike• GPM improved 0.1 points year on year to 26.8% in 1H, mainly due to the following two reasons.
-Food sales, which have relatively lower GPM, jumped by about 20% from a year ago. GPM improved because of the better
sales in value-added goods.
-Gross profit increased at a faster pace than sales.
• SGA ratio to the sales were flat although we made the upfront investment, mainly labor cost etc, for the future new store
rollout.
OP grew and beat our estimate driven by sales growth. 1H results were all time high.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

1

Existing Stores (Don Quijote store format)

Existing stores= Customer traffic= All stores= Customer spending= Existing stores2013 Oct.

Nov.

Dec.

Sales

100.0%

100.0%

99.1%

Customer traffic

99.6%

99.9%

Customer spending

100.4%
186

Existing store No.

2014 Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul

Aug.

Sep.

Oct.

Nov.

Dec.

98.7%

97.7%

116.7%

95.5%

100.7%

99.5%

101.4%

102.3%

105.0%

108.3%

107.1%

104.3%

99.5%

99.5%

97.6%

105.7%

97.3%

102.4%

100.9%

101.7%

100.6%

103.5%

105.2%

103.8%

100.0%

100.1%

99.5%

99.2%

100.1%

110.4%

98.2%

98.4%

98.6%

99.8%

101.7%

101.5%

102.9%

103.1%

104.2%

187

189

192

191

193

195

195194196196196195

196200• Don Quijote same store sales were up 4.6%(1Q:+2.8%, 2Q:+6.3%) because of more customer traffic (up 2.3%) and morecustomer spending (up 2.2%) even though cold air mass brought low temperature nationwide throughout the month.
• Stronger demand towards daily commodity goods and growing foreign tourists’tourists sales are the major contributorscontributors. Low
temperature promoted winter seasonal goods.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

2

Sales Breakdown of Products Category : FY2015 1HConsolidated(Millions of yen)

6 months to Dec. 2014
ActualShare

6 months to Dec. 2013
YoY

ActualShare

Home electrical appliances

29,346

8.6%

104.5%

28,095

9.3%

Miscellaneous household goods

76,53022.4%

111.1%

68,861

22.7%

Foods

101,61629.7%

118.5%

85,721

28.3%

Watches & fashion merchandise

73,16421.4%

105.6%

69,281

22.8%

Sporting goods & leisure goods

19,8355.8%

106.3%

18,666

6.1%

Oth products
Otherd t

29 87029,8708 7%
8.7%

137 7%
137.7%

21 69921,6997 2%
7.2%

Total retail store business

330,36196.6%

113.0%

292,323

96.4%

Rent income

8,972,2.6%

107.5%

8,348,2.8%

Other business

2,892

0.8%

109.1%

2,651

0.8%

342,224100.0%

112.8%

303,322100.0%

Total• Foods grew its sales by 18.5% year on year thanks to successful pricing strategy and product mix.
“Processed foods” e.g. snacks and noodles “Daily delivered foods” e.g. eggs, tofu and beverages are the contributors.
• Miscellaneous household ggoods ggrew 11.1% yyear on yyear backed byy the strong
g foreigng tourists’ demand toward cosmetics
and drugs as well as daily necessities like hair care products.
• Luxuries and durables are on the recovery track with smaller negative impact from pre tax-hike last-minute demand.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

3

Number of stores(Number of stores)

FY2013

FY2014FY2015-1Q

FY2015-2Q

Don Quijote

165

174

172

173

MEGA

35373737

New MEGA

21283134

Others

3130

3233

Domestic store opening

162269Temporary store closing

0311

Domestic store closure

352

3Net store increase131735Overseas

3141414255

283286291

Total• 15 new stores opened in 1H: 7 Don Quijote, 5 New MEGA , 1 Doit and 2 Kyoyasudo.
• 7 stores closed total in DQ Group including temporal suspension.
• New store openings are ongoing in line with our expectation so far. Having stores in properties that were formally occupied
by other retailers, is our main way. We’re securing human resources including senior-citizen part-time staff in an agile
manner.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

4Key Components of SG&A Expenses : FY2015 1H
Consolidated(Millions of yen)

6 months to Dec. 2014
Actual6 months to Dec. 2013

Share

YoY

ActualShare

Net sales

342,224100.0%

112.8%

303,322100.0%

Salary allowance

24,3327.1%

116.8%

20,834

6.9%

R t
Rent

9 170
9,170

2 7%
2.7%

106 1%
106.1%

8 640
8,640

2 8%
2.8%

Commission paid

7,791

2.3%

103.3%

7,545

2.5%

Depreciation and amortization

5,370

1.6%

118.0%

4,551

1.5%

Others21,5606.3%

113.5%

19,001

6.3%

SGA

68,22320.0%

112.6%

60,571

20.0%• SGA ratio to the sales stood at 20.0%, flat year on year. It was affected by initial cost* burden associated with new 15 storesopenings, more work required with sales mix change, and the consolidation of MARUKAI, the U.S. subsidiary.
*Salary allowance, Depreciation & Amortization, Fixings, etc.

• Stronger sales promotion with our original e-money ”majica” to push up the spending per customer for further sales growth.
Personnel cost, mainly salary allowance went up year on year. This is because of the fact that we secured human resourcesin advance to be ready for the aggressive new store openings onwards.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

5

Sales, Profit and Loss by Segment : FY2015 1H（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2014, to Dec. 31, 2014
Consolidated

Retail store

Rent income

Others

Total

Adjusted amount

Consolidated,
330,361

8,972,

2,891,

342,224,-

342,224
,

-

7,373

2,959

10,332(10,332)-

Total

330,361

16,3455,850

352,556(10,332)

342,224

Segment profit

14,954

6,041

2,604

23,599(188)

23,411

Sales to external customers
Internal sales or transfers
between segments（Millions of yen）

Sales, profit and loss by segment from Jul. 1, 2013, to Dec. 31, 2013
Consolidated
Sales to external customers

Retail store

Rent income

Others

Total

Adjusted amount

Consolidated

292,323

8,348

2,651

303,322-

303,32232 043
2,043

1 409
1,409

3 455
3,455

(3 455)(3,455)-

Total

292,326

10,391

4,060

306,777(3,455)

303,322

Segment profit

17,055

2,539

1,280

20,874(370)

20,504

Internal sales or transfers
between segments• 1H segment profit in the retail business was 15.0 billion yen which is our mainstay.
• 1H segment profit in the tenant leasing business was 6.0 billion yen.
• 1H segment profit in other business was 2.6 billion.

Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

6

Sales, profit and asset by subsidiaries : FY2015 1H（Millions of yen）

Sales, profit and asset by subsidiaries from Jul. 1, 2014, to Dec. 31, 2014
ConsolidatedDon Quijote１)

DoitNagasakiya 2)

Overseas 3)

OthersEliminationConsolidated

Net sales

243,856

9,171

77,14916,481

18,965(23,398)342,224

Operating profit

18,208

333

2,215

672

5,645(3,662)

23,411

Total asset

370,538

22,20575,877

17,260250,504(246,918)

489,466

Net asset

167 290
167,290

18 48918,48942 73642,736

13 532
13,53267 24067,240(101 005)(101,005)

208 282
208,282

PL/1USD= \ 103.6
BS/1USD= \ 109.5（Millions of yen）

Sales profit and asset by subsidiaries from Jul
Sales,Jul. 1
1, 20132013, to Dec
Dec. 31
31, 2013
Consolidated

Don Quijote１)

DoitNagasakiya 2)

Overseas 3)

OthersElimination

Consolidated

Net sales

211,643

10,38571,287

8,186

11,778(9,957)303,322

Operatingp
gp
profit14,139,634

1,771,

425

2,131,

1,404,

20,504,

Total asset

363,526

22,651

66,934

10,388150,967(173,704)

440,762

Net asset

153,187

18,11236,526

9,419

36,932(71,231)

182,945

1) According to the change in pure holdings f irm, Don Quijote is simply added both Don Quijote and Don Quijote HD by split

PL/1USD= \ 99.5
PL/1USD99 52) Nagasakiy a shows only retail business

BS/1USD= \ 99.03) Ov erseas includes DQ USA and MARUKAI• Same store sales continue to grow, mainly DQ, Nagasakiya and DQ USA and expanded profit.
• Doit struggle to get recoil reduction after the consumption tax-hike and decreased stores.
stores• Don Quijote Group continues to pursue the concept of “Valuing the customer as our utmost priority” after the change to apure holdings company.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

7

Balance Sheet（Millions of yen）
As of Dec. 31,2014

Change from
Jun. 30, 2014

T t l currentt assets
Totalt176 926
176,926

18 092
18,092

Cash and deposits

39,485Merchandise（Millions of yen）
As of Dec. 31,
2014

Change from
Jun. 30, 2014

T t l currentt liabilities
Total
li biliti

144 723
144,723

30 27930,279(3,205)

Accounts payable

73,335

18,217102,369

13,264

Short-term liabilities*

31,547

11,603

312,540

39,239Total noncurrent liabilities

136,461

11,934

244,798

32,075Long-term bonds

48,0103,710

Buildings

89,244

12,166Long-term borrowings

31,6541,624

Land

140,193

20,513Long-term payables under fluidity
lease receivables

37,556

3,211

17,192

1,836

Total liabilities

281,184

42,213

7,415

1,083

Net assets

208,282

15,118

Total investments and other assets

50,5505,328

200,188

12,551

Lease and guarantee deposits

31,929966

Minority interests

7,135

1,316

489,466

57,331

Liabilities and net assets

489,466

57,331

Consolidated

Total noncurrent assets
Total property, plant and equipment

Total intangible assets
Goodwill

Total assets

Consolidated

Total shareholders' equity* Short-term liabilities = Short-term loans payable + Current portion of long-term loans payable + Current portion of bonds• Cash & deposits amounted to 39.5 billion yen, a decline of 3.2 billion from the end of the fiscal year ending in June 2014.
Increased efficiency for current cash on hand led to a reduction of 3.2 billion yen.
• Merchandise stood at 102.4 billion yen, 13.3 billion more than the end of last year with 15 new stores as well as theaccumulation based on the robust sales trend.
trend• Payables under fluidity lease receivables were 44.5 billion yen, up 4.3 billion, with financing through ABL.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

8

Cash Flows and Capital Expenditures（Millions of yen）

Consolidated Cash Flows
6 months to Dec.
2014
C h andCashd equivalents
i l t att bbeginningi i off periodi dCash flows from operating activitiies
Cash flows from investing activities
C h flflows ffrom fifinancing
Cashi activities
ti iti
Net increase (decrease) in cash and equivalents
Cash and equivalents at end of period

6 months to Dec.
2013

44,10544
105
23,651(29,558)
5 248
5,248(204)43,901

36,13236132
22,624(16,664)
17 636
17,63623,90460,0366 months to Dec.
2014
Cash flows*
Net increase (decrease)

7,973
7973
1,027
(12,894)(12 388)(12,388)(24,108)(16,135)（ Millions of yen）

Consolidated Capital Expenditures
C it l expenditures
CapitalditChange6 months to Dec.
2013

27,23027
230
17,940(9,290)15,49715497
16,252755

Change11,73311733
1,688(10,045)* Cash flows = Net income + Depreciation and amortization + Extraordinary loss - Dividend• Net cash provided by operating activities totaled 23.7 billion yen based on additions from pretax profit at 23.3 billion yen andan increase in trade payable at 17.5 billion yen and subtractions from an increase in inventory at 12.6 billion yen and income
taxes paid at 9 billion yen.
• 5.2
5 2 billi
billion yen off cash
h inflowsi flini financial
fi
i l CF llargely
l ddue tto 7
7.5
5 billibillion yen iincome ffrom rentt claims
l ililiquidation
id ti iintendingt didiversified financing.
• Capex stood at 27.2 billion yen, mainly in Japan Asset Marketing and Don Quijote.
Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

9Earnings Summary, Second Quarter of FY2015
Consolidated((Millions of yen)y )3 months to Dec. 2014
Actual3 months to Dec. 2013

Share

YoY

ActualShare

Net sales

178,363100.0%

113.7%

156,808

100.0%

Gross profit

47,39926.6%

115.1%

41,195

26.3%

SGA

34,44419.3%

111.7%

30,831

19.7%

Operating profit

12,9557.3%

125.0%

10,364

6.6%

Recurring profit

13,222

7.4%

123.6%

10,701

6.8%

Net profit

7,553

4.2%

114.3%

6,608

4.2%

EPS(Yen)

96.20-

113.7%

84.61-

Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

10Sales Breakdown of Products Category : FY2015 2Q
Consolidated(Millions of yen)

3 months to Dec. 2014
ActualShare

3 months to Dec. 2013
YoY

ActualShare

Home electrical appliances

16,461

9.3%

107.7%

15,2799.7%

Miscellaneous household goods

40,51922.7%

112.6%

35,990

23.0%

Foods

52,84329.6%

118.2%

44,723

28.5%

Watches & fashion merchandise

39,06621.9%

106.6%

36,64923.4%

Sporting goods & leisure goods

8,627

4.9%

108.1%

7,982

5.1%

Oth products
Otherd t

14 846
14,8468 3%
8.3%

140 0%
140.0%

10 601
10,601

6 8%
6.8%

Total retail store business

172,36296.7%

114.0%

151,223

96.5%

Rent income

4,523
,2.5%

106.1%

4,262,2.7%

Other business

1,478

0.8%

111.7%

1,323

0.8%

178,363100.0%

113.7%

156,808

100.0%

Total

Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

11Key Components of SG&A Expenses : FY2015 2Q
Consolidated(Millions of yen)

3 months to Dec. 2014
Actual3 months to Dec. 2013

Share

YoY

ActualShare

Net sales

178,363100.0%

113.7%

156,808

100.0%

Salary allowance

12,352

6.9%

116.6%

10,592

6.8%

Rent

4 626
4,626

2 6%
2.6%

106 3%
106.3%

4 353
4,353

2 8%
2.8%

Commission paid

4,130

2.3%

98.0%

4,214

2.7%

Depreciation and amortization

2,762

1.6%

118.1%

2,339

1.5%

Others

10,5745.9%

113.3%

9,333

5.9%

SGA

34,44419.3%

111.7%

30,831

19.7%

Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

12Company Forecast : FY2015 (June 2015)
Consolidated

FY2015 Revised forecast(Millions of yen)

Plan

Share

YoY

FY2015 Previous forecast
Plan

Share

Net sales

658,000

100.0%

107.4%

634,000

100.0%

Gross profit

175,500

26.7%

109.0%

167,800

26.5%

SGA

139,000

21.1%

109.7%

133,000

21.0%

Operating profit

36,5005.5%

106.4%

34,800

5.5%

Recurring profit

37,5005.7%

105.7%

35,6005.6%

Net profit

21,8003.3%

101.5%

21,500

3.4%

EPS(Yen)278 09278.09-101 2%101.2%

274 26274.26-

Capital expenditure

45,000-126.5%

35,000-Depreciation

11,2001.7%

107.7%

10,5001.7%• FY2015 forecast revised upward. Sales : up 24 billion yen, OP : up 1.7 billion, RP : up 1.9 billion, against our initial forecast.
• Don Quijote same store sales forecast goes as follows. Full year : +3.5% year on year, 2H : -1.1%• Main reason for 45 billion of capex per annum: 28-30 new store openings, etc

Copyright (c) 2015 Don Quijote Holdings Co.,Ltd. All rights reserved.

13