Results Briefing Summary
Profits rise on record-high gross profit margin Summary of 1H FY3/20 Consolidated Results
2Q FY3/19
Consolidated(\ million)
Actual2Q FY3/20

Composition
ratio

ActualYoYComposition
ratio

48,477 100.0%

48,313 100.0%

Product Development
Model Business

24,58050.7%

24,753Wholesale
Model Business

22,38846.2%

Others

1,508

Gross profit

ChangeReference

Pct. Change

5/13/19
forecast

ChangePct. Change

(163)

-0.3%

50,000(1,686)

-3.4%

51.2%

173

0.7%

25,150(396)-1.6%

21,742

45.0%

(646)

-2.9%

22,700(957)

-4.2%

3.1%

1,817

3.8%

308

20.5%

2,150(332)-15.5%

13,26827.4%

13,647

28.2%

379

2.9%

13,900(252)-1.8%

SG&A expenses

10,51021.7%

10,522

21.8%

12

0.1%

10,800(277)-2.6%

Operating income

2,758

5.7%

3,124

6.5%

366

13.3%

3,100

24

0.8%

Ordinary income

2,845

5.9%

3,156

6.5%

310

10.9%

3,100

56

1.8%

Net income

1,861

3.8%

2,138

4.4%

277

14.9%

2,150(11)-0.5%

Net sales

For the first half of FY3/20, Doshisha reported consolidated results as follows: net sales of ¥48,313 million(down 0.3% year on year), gross profit of ¥13,647 million (up 2.9%), selling, general and administrative
expenses of ¥10,522 million (up 0.1%), operating income of ¥3,124 million (up 13.3%), ordinary income of¥3,156 million (up 10.9%), and net income ¥2,138 million (up 14.9%).
Compared with start-of-year forecasts, sales in the Product Development Model Business were ¥396
million lower than projected (1.6% below forecast). Although sales in the apparel, living storage and othercategories were in line with forecasts, sales of seasonal summer products were weaker than expected due
to unsettled weather and a cool summer. Sales in the Wholesale Model Business were ¥957 million lower
than projected (4.2% below forecast). There were several reasons for the shortfall. Sales of famous brandproducts increased year on year, led by demand for mid-range products (retail prices up to ¥50,000), butthat was cancelled out by a decline in sales of wristwatches amid a steep drop in luxury watches sourcedfrom suppliers. In the segment’s national brand (NB) processing business, profits increased year on year,
supported by an improvement in the gross profit margin, which reflected careful targeting of priority sales
regions and retail formats, greater accuracy in analysis of sales area and channel data, and tighter
inventory management. Overall, net sales were ¥1,686 million lower than projected at the start of the fiscalyear.
The gross profit margin was 28.2%, up year on year, higher than the start-of-year forecast and also a newrecord for Doshisha. The strong performance reflected successful price negotiations with manufacturers
and an increase in the sales weighting for products developed in-house.

Selling, general and administrative expenses have been rising each year due to steep increases in
distribution costs, but we managed to offset price hikes by using charter flights and shipments from optimal
distribution locations. The Kanto Logistics Center in Kisarazu, Chiba Prefecture also became fully
operational. As a result, the Company was able to reduce operational costs in areas such as outsourced
processing, third-party outsourcing and warehousing fees. Typhoon Faxai inflicted serious damage onsome areas of Japan in September. The Kanto Logistics Center building was not damaged, but it wasforced to halt operations due to a week-long power outage. However, the impact on earnings was modest,
as operations were transferred to our warehouse in Kansai and other locations. Other operating costs
increased year on year, reflecting higher product advertising expenses and maintenance costs for the head
office building of Orion Co., Ltd., which became part of the Doshisha Group at the end of 2018. As a resultof the above, selling, general and administrative expenses increased ¥12 million year on year, but theselling, general and administrative expenses ratio rose only 0.1 percentage point to 21.8%.

 Summary of 1H FY3/20 Consolidated Results by Business Segment
Our operations are largely divided into two business segments: the Product Development Model Businessand the Wholesale Model Business. The Product Development Model Business plans, manufactures andsells original Doshisha products. The Wholesale Model Business is a comprehensive sales proposal
business, mainly focused on selling and planning sales promotions for leading domestic and overseasbrands and products sourced from major manufacturers in Japan. The product range in the Wholesale
Model Business includes well-known brand watches, bags and other items, traditional mid-year andyear-end assorted gift packs arranged by Doshisha using merchandise sourced from leading domestic
suppliers, and national brand (NB) processed products.

(¥ billion)

60.0

Product Development
Model BusinessFamousbrands

Wholesale
Model Business

NB
processingOthers* Figures in ( ) are composition ratio
Figures in [ ] are year on year change

50.4

40.0

48.4 [-3.9%]

48.3 [-0.3%]

24.5

24.7

23.9
(47.5%)(50.7%)(51.2%)[+2.7%][+0.7%]

10.920.024.9(49.4%)

End of 2Q FY3/188.6(17.9%)(18.2%)[-19.6%]22.313.9(27.6%)

0.08.8(21.8%)(46.2%)[-10.2%]13.5(28.0%)[-1.9%]

21.7(45.0%)[-2.9%]

13.0(27.1%)[-2.7%][-3.5%]End of 2Q FY3/19

End of 2Q FY3/20

1H FY3/20 Consolidated Results by Sales Channel
Sales in the discount store retailer channel were up 6% year on year, reflecting initiatives that helped todrive strong sales of famous brands and gifts. In the online channel, sales rose 21% year on year,
supported by efforts to increase sales of fashion accessories and interior storage products such as steel
storage racks to e-commerce retailers. Sales to specialist watch and clothing stores declined 18% year onyear due to lower sales of luxury brand products, but sales in other channels were steady year on year.

 Consolidated Forecasts for FY3/20
Consolidated(\ million)

FY3/19FY3/20

YoY
Full year

ChangePct.
Change48,313

54,686 103,000

4,331

4.4%

50,161

24,75328,14652,900

2,738

5.5%

23,08545,474

21,742

23,95745,700

225

0.5%

1,508

1,524

3,032

1,817

2,582

4,400

1,367

45.1%

Gross profit

13,26812,891

26,16013,647

14,65228,300

2,139

8.2%

SG&A expenses

10,51010,08820,598

10,522

11,077

21,600

1,001

4.9%

Operating income

2,758

2,803

5,561

3,124

3,575

6,700

1,138

20.5%

Ordinary income

2,845

3,219

6,065

3,156

3,643

6,800

734

12.1%

Net income

1,861

2,402

4,263

2,138

2,511

4,650

386

9.1%

1H2H

Full year

1HNet sales

48,47750,19098,668

Product Development
Model Business
Wholesale
Model Business

24,58025,581

22,388Others2H

Our start-of-year forecasts for FY3/20 are unchanged. We see sales and profits both increasing year onyear, with net sales of ¥103.0 billion (up 4.4% year on year), gross profit of ¥28.3 billion (up 8.2%), selling,
general and administrative expenses of ¥21.6 billion (up 4.9%), operating income of ¥6.7 billion (up 20.5%),
ordinary income of ¥6.8 billion (up 12.1%) and net income of ¥4.65 billion (up 9.1%). By business segment,
we forecast sales of ¥52.9 billion (up 5.5% year on year) in the Product Development Model Business and¥45.7 billion (up 0.5%) in the Wholesale Model Business.

 Doshisha’s Value Creation Cycle (Ability to Generate Profits)
Our strengths are our business base, which supports our efforts to build a company with aspirations thatwill never fail, and three business models on which our business portfolio is built. Together, these strengths
support adaptable risk management, which allows us to respond to changes in the market while spreadingrisk and constantly taking on new business challenges.
We also have powerful business assets: the sales channels of 4,800 business partners in various
industries and sectors and more than 2,100 suppliers with proprietary and third-party factories supplying awide range of products. Backed by our product planning capabilities, we constantly keep a close eye on
retail environments and play a central role in handling business flow. We are involved in all parts of theretail process, from product planning, development, procurement and sales area design to sales support
and after-sales services. As our product portfolio covers a wide range of different categories, we supply
numerous different products in clothing, food and homewares, with more than 50,000 SKUs handled byour operations each year and products ranging in price from ¥100 merchandise to luxury watches.

Corporate philosophy:
Build a company with aspirations that will never fail
(1) Emphasis on cash flow management (2) High equity ratio(3) Rigorous credit control (4) Flexible organization(5) Fabless manufacturer operating structure…etc.
Adaptable Risk Management
Product Development Model Business &Wholesale Model BusinessSuppliers
Proprietary production
Affiliated production sites
Suppliers(Food / brand products)◆Product planning, design, development,
procurement◆Sales support, sales area design, sales
promotion planning◆Quality assurance, delivery schedule control◆Delivery, assorted product processing◆Logistics
50,000 product items
in a wide range of categories

2,100 companies

Retail environment information

Doshisha’s
here too!
Customers / Consumers
Hardware stores
Large electronics retailers
Discount stores
General merchandise stores
Specialist merchandise stores
Online retailers
Overseas retailers
End-consumer

4,800 companies
300,000 stores
BtoC e-commerce sales

Vision: “Create an unrivalled company worldwide”
Strengthen the “Niche No.1 strategy withunique value”(Consumer perspective, new, interesting)• Help customers and consumers lead richer lives• Consistently pay stable dividends with a focus onshareholders

Our vision to “create an unrivalled company worldwide” guides all our efforts. Predicting changes in theoperating environment and anticipating what consumers want is likely to become even more difficult in thefuture. That uncertain outlook means we need to develop our business with more emphasis on creating
new product concepts and ideas by asking ourselves three key questions – what do consumers want, whatis “new” and what is “interesting”? We also have to secure the No.1 position in the businesses and fields
that we target, no matter how small the markets and without leaning too much on the clothing, food or
homewares categories. Our presence in such a wide range of product categories may make it hard toaccurately define our business, but it also means we have no direct competitors. That approach will help
us to “create an unrivalled company worldwide.” Through that process, we will strive to increase
Doshisha’s corporate value by helping consumers lead richer lives and by becoming a more appealing
company to all our stakeholders.

 Building a profitable business portfolio
We have broadly divided the businesses in our portfolio into three categories based on strategic direction:“maintain and reinforce,” “transform,” and “consider for renewal.” Our basic strategy is to generate
sustained growth by a mixing and matching businesses and realigning the portfolio in response to changes
in our markets. Although earnings will continue to fluctuate, that strategy will drive the Group’s growth
going forward.
The “maintain and reinforce” category includes the Product Development Model Business, the newly
established fourth business unit, and e-commerce and overseas sales. The “transform" category includes
the famous brands business and the NB processing business (gifts and other products) in the Wholesale
Model Business and the food products business in the Product Development Model Business. Our goal isto put those businesses on the path to steady growth by improving business efficiency and rebuilding
earnings structures. The “consider for renewal” category covers audio & video (A&V)-related businesses.
We have already made progress developing new products with Orion Co., Ltd., which is now a Group
company, so we have positioned the A&V business as a viable business with future potential.

 Business Strategy for FY3/20<Companywide Strategy: Logistics Reforms – Bring logistics in-house and increase efficiency totransform the earnings structure>
Transportation companies are likely to raise distribution prices again in FY3/20. Doshisha handles a widerange of products with varying sizes across categories such as clothing, food and homewares. Optimizing
distribution of those products is a key issue for the Group and we are implementing three initiatives tocontrol logistics costs. Using our dual-hub proprietary logistics network, we are reducing warehousestorage fees by switching from third-party providers to our own logistics centers; cutting outsourcing costs
by using in-house assets for product shipment and processing work; and reducing transportation costs by
sharing and combining shipments instead of distributing individual products from optimal locations. We
expect those measures to offset any price increases for distribution services. Consequently, we forecast
2H FY3/20 logistics costs will be flat year on year, as they were in 1H. We aim to continue reducing
logistics costs through tighter cost control and further optimization that lifts productivity.
<Companywide Strategy: Branding – Reinforce branding based on our "Doshisha's here too!" message>
Doshisha has used product branding strategies for some time for its fashion brands and private brands.
From FY3/20 we also started to promote our corporate brand with the slogan, “Doshisha’s here too!” Ouraim is to increase Doshisha’s corporate value as a “lifestyle creation company with close links toconsumers” by supplying every-day, familiar products to consumers based on three product concepts –create new value, target niche markets, and tell unique stories . We plan to develop branding strategy
further to reinforce selling methods and sales promotions. Using our new corporate website, which wasrelaunched in April 2019, we aim to strengthen sales promotion and marketing with visual media that ismore exciting and accessible for consumers.
<Companywide Strategy: Enhance manufacturing capabilities – New 4K tuner TV developed withOrion goes on sale>We established Orion Co., Ltd. in December 2018 to take over the professional services (PS) businessacquired from Orion Electric Co., Ltd., which owns the ORION TV brand. Orion’s main business isproviding PS for solution design, circuit board design and software development as part of productdevelopment. Leveraging those strengths in product development and technology, we are working toBusiness strategy (topics)

Generating synergies through collaboration andspecialization in areas of core competence
Joined Doshisha Groupin November 2018

Orion Co., Ltd. (overview)
 ORION – Japanese electronics brand PS business* with strengths in technology,
product development and quality assurance*Professional services business: Mainly provides solution design, circuit board design and softwaredevelopment as part of product development.

Creating synergies throughcollaboration

Creating synergies throughspecialization

Reinforcing customer service
operations

New 4K tuner TV launched• Strengthening quality assurance andafter-sales support to improve peaceof mind and lift customer satisfaction<Benefits>• Tuner and key circuits developed in-house• In-house product planning, development andmanufacturing yields significant cost advantages

develop new technologies and reinforce quality assurance, while also targeting orders for outsourced
product development from external customers.
We have also combined customer service operations for our household lighting business and A&V-related
business at Orion's head office in Fukui Prefecture to further improve after-sales support and quality. In
product development, we teamed up with Orion to develop a new TV with a 4K tuner to capture demandduring the 2020 Tokyo Olympics. The TV was launched in November.

 FY3/20 Dividend Policy
We aim to pay a consistent and stable dividend based on a payout ratio target of 30%. For FY3/20, weplan to pay a full-year dividend of ¥50 per share. In addition, as of end-September 2019, we had
repurchased 641,400 shares, in line with our share buyback plans for FY3/20.
(November 14, 2019, Tokyo)