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Presentation Material:

Announcement of FY 2017 Interim Results
２０１２年１１月２０日
November16, 2017

0Ⅰ. Interim Results Outline

11. Outline of Consolidated Results for Interim Period Ended September 2017
(Units: millions of yen)

2017/92016/9Net Sales

53,08556,747△6.5％

56,800△6.5％

Operating
Income601

1,242△51.6％

1,250△51.9％

Ordinary
Income626

1,153△45.7％

1,160△46.0％

Profitattributable toowners of parent

316

935 △66.2％

760△58.4％

8.64yen

22.49yen △61.6％

20.77△58.4％

Change From2017/9 ToCompared
Revised Plan
(Actual Results) (Actual Results) Prev. Period (Previous Forecast)Interim
Net Income
Per Share＊Previous Forecast: Announced May 9, 20172

2. Consolidated Profits ① Net Sales, Gross Profit【Increased/Decreased Values (Rates)】(Units: billions of yen)

56.74

Net Sales

53.08△3.66 billion yen【Main Increase/Decrease Factors】● System Kitchens● System Bathrooms● Washstands/Vanities△ 3,490 million yen△ 620 million yen△ 110 million yen
etc.

●Decrease Due to Decreased Net Sales△ 2,440 million yen

37.88

35.16

Cost of Sales（66.8）（66.2）△2.72 billion
yen
Cost of Sales Ratio

△0.6％
18.86

17.92

（33.2）（33.8）

Gross Profit△0.94 billion yen

0

2016/9●Decrease Due to Decreased Cost of Sales Ratio△ 280 million yen●Increase in S.S., CLEANLADY Cost Ratio＋ 0.60 point●Increase in RAKUERA Cost of Sales Ratio＋ 0.03 point●Decrease in System Bathrooms Cost of Sales Ratio△ 0.05 point△ 0.01 point●Supply segment＋ 0.17 point●Influence of raw materials and others
etc.

●Decrease Due to Decreased in Net Sales●Increase in Gross Profit Ratio△ 1,220 million yen＋ 280 million yen

2017/93

2. Consolidated Profits ② SGA Expenses, Operating Income【Increased/Decreased Values (Rates)】(Units: billions of yen)

18.86

17.92

Gross Profit△0.94 billion yen

SGA Expenses

17.62

17.32

（31.0）（32.6）△0.30 billion yen

SGA Ratio＋1.6 ％

1.24

0.60

Operating Income

（2.2）

（1.1）

＋0.64 billion yen

2016/92017/9【Main Increase/Decrease Factors】●Sales Expenses●Distribution Expenses●Personnel Expenses●Administrative Expenses△ 80 million yen△ 160 million yen△ 30 million yen△ 30 million yen●Sales Expenses●Distribution Expenses●Personnel Expenses●Administrative Expenses

0.0 points＋ 0.1 points＋ 0.9 points＋ 0.6 points●Decrease in Gross profit●Decrease in SGA Expenses△ 940 million yen＋ 300 million yen

-500

4

3. Sales Composition ① By Segment (Consolidated)
Kitchen Equipment

Bathtubs & Washstands

Other【2017/9】(Units: millions of yen)

113,661

120,000

6,348

Other

110,300

5.6％

5.9％

6,497

17,976

100,000

15.8％

17,469

15.8％

6.1％

Bathtubs &16.4％
Washstands

77.5％

Kitchen Equipment

80,00056,74760,00053,085

3,099
3,227

9,464

8,724

89,33686,33478.6％

40,00044,184【2016/9】
78.3％

5.5％

Bathtubs &16.7％
Washstands

41,13420,000

0

Other

77.8％

Kitchen Equipment

2016/92017/9(Current Interim Period)

2017/3

2018/3（Term-End Forecast）

5

3. Sales Composition ② By Sales Route (Non-Consolidated)【Full-Term Base】

Direct-Sales (Condominium owners)
Housing Constructors
General Routes (Construction Contractors - Home
Renovation)

5.1％

5.1％

5.3％

16.0％

16.3％

15.9％

78.9％

78.6％

78.8％

【First-Half Base】
5.1％
15.7％

79.2％

3.7％

2.8％

15.9％

15.9％

80.4％

81.3％
0

0

2015/92016/92016/32017/3

2018/3（Term-End Forecast）

2017/9(Current Interim Period)

6

4. Consolidated Balance Sheet Summary – 1/2(Units: billions of yen)

【Increased/Decreased Values】【Assets】

100

85.90

84.37 86.88

75

Current Assets

47.31
47.31
47.04

Total Assets＋ 2.51 billion yen
Cash and Deposits
Notes and Accounts
Electronically Recorded
Monetary Claims【 Main Increase/Decrease Factors 】●Current Assets●Fixed Assets＋ 310 million yen＋ 2,200 million yen●Cash and Deposits△ 420 million yen●Notes and Accounts Receivable △ 2,180 million yen●Electronically Recorded Monetary Claims＋ 2,590 million yen＋ 0.00 billion yen

50

Inventory
3.73
4.24

2.22
3.97

3.06
3.44

＋ 0.84 billion yen
Other Current Assets

25●Increase in products and products ＋ 870 million yen●Decrease in Securities△ 500 million yen●Tangible Fixed Assets●Intangible Fixed Assets●Securities Investments＋ 1,130 million yen△ 110 million yen＋ 1,180 million yen△ 0.53 billion yen
30.88

30.87

33.07

Fixed Assets＋ 2.20 billion yen
0

2016/9 2017/3 2017/9
7

4. Consolidated Balance Sheet Summary – 2/2(Units: billions of yen)【Primary Reasons for Increase/Decrease】【Liabilities･Minority Interests・Assets】【 Increased/Decreased Values 】

85.90

84.37

86.88

●Short-term Borrowing

Current Liabilities
23.76

5.99

23.28

25.45

8.47

8.43

△ 2.16 billion yen
Non-current liabilities△ 0.04 billion yen

56.15

52.61

53.00

Total Net Assets＋0.39 billion yen＋ 1,470 million yen●Electronically recorded obligations - operating＋ 860 million yen●Accounts Payable-Trade△ 280 million yen● Lease obligations● Long-term Borrowing＋ 1,330 million yen△ 1,460 million yen●Interim Net Income＋ 310 million yen△ 360 million yen●Dividends●Increase in Valuation difference on
available-for-sale securities＋ 420 million yen

0. 00

2016/9 2017/3 2017/9
8

5. Consolidated Cash Flow Statement Summary(Units: billions of yen)

Cash Flow from Operating Activities

Cash Flow from Investing Activities

Cash Flow from Financing Activities

Interim (Year-End) Cash & Cash Equivalents Balance

30. 0025. 0021.89
22.16 （2017/3）

20.97

△9.2

20. 00Compared to Year-End Balance

15. 00

10. 00

5. 00

1.61
0.29

△2.9

△7.5

1.32

0. 00

△ 1.46△3.0△ 1.76△ 0.46△ 5. 00

2016/92017/99

6. Capital Investments (Consolidated)

R&D Costs

Capital Investment

Deprecation Costs【FY2017 Major Capital Investment Details】(Units: billions of yen)
3.82

4.0

3.50 3.55

3.0

2.41

600 million yen② Showroom Renovation

380 million yen③ Information Investment

360 million yen④ Others

40 million yen

1.70
1.38
1.13

1.04

1.10

1.0

0.0

① Production Equipment

Second-Half Plans

1.79

2.0

First-Half Results

0.56

0.61

2016/92017/92017/3(Current Interim Period)① Production-Related

800 million yen② Operations-Related

690 million yen③ Information-Related

520 million yen④ Others

110 million yen

2018/3（Term-End Forecast）

10

7. Sales Results For Major Products and Cleanup Market Share - 1/3

Complete System Kitchen Sales Results
Monetary Value(Units: billions of yen)

100

Demand Trends and Market Share
Demand Volume
Cleanup Share(Thousands of Sets) (Thousands of Sets)

400

Volume1,400

89.2
82.5 80.7 80.5

77.3

80

1,200

76.7

1,227 1,200 1,204

（％）

30.0

1,207

1,0911,121

25.0

300

69.7

1,000

232

60

244
217

244

219

800

233
200

195

600

37.3

40

20.0

17.9
598

15.0

10.0

107
◆

17.9

20.3
19.4 19.9
19.4 19.3

100

400

20

5.0

200
Current Interim Period0012/3 13/3

14/3

15/3 16/3

17/3 18/3（Forecast）

0

0.0

12/3 13/3 14/3 15/3 16/3 17/3 17/9
(Current Interim Period)

11

7. Sales Results For Major Products and Cleanup Market Share - 2/3

Modular System Bathroom Sales Results
Monetary Value
Volume(Units: billions of yen)

20

Demand Trends and Market Share
Demand Volume
Cleanup Share(Thousands of Sets) (Thousands of Sets)

50

1,000

17.7
15.8
15

14.1

839

43
14.0 13.7

38

35

（％）

10.0

34

33

40

800

30

600

739 739 757

731 745

8.0

13.1 13.0
31

31

6.0

10

6.4

4.8

5.1

5.1

4.6

4.1
4.4

20

400

10

200

2.0

0

0.0

4.1 380

4.0

◆

15

5

Current Interim Period

0

0

12/3

13/3

14/3

15/3

16/3

17/3

18/3
（Forecast）

12/3 13/3 14/3 15/3 16/3 17/3 17/9
(Current Interim Period)

12

7. Sales Results For Major Products and Cleanup Market Share - 3/3

Washstands/Vanities
Monetary Value(Units: billions of yen)

6

Demand Trends and Market Share
Demand Volume
Cleanup Share(Thousands of Sets) (Thousands of Sets)

150

Volume

2,000

1,828

5.4
5.1
5

4.8

4.7
109

4

4.6

1,609

4.7

4.5

120

1,600

90

1,200

1,768 1,804

（％）

10.0

1,833

1,655
8.0

109

99

93

90

90

88

3

6.2

6.6

6.0

6.0

4.9
5.3

2.2

5.0 5.0

883

60

800

4.0

30

400

2.0

0

0.0

2
◆

43
1

Current Interim Period

0

0

12/3

13/3

14/3

15/3

16/3

17/3

18/3

（Forecast）

12/3 13/3 14/3 15/3 16/3 17/3 17/9
(Current Interim Period)

13

8. Forecasted Consolidated Results For The Period Ending March 2018
(Units: millions of yen)

2017/3

2018/3(Actual Results)(Forecast)

Change From
Prev. Period

Net Sales

113,661

110,300△3.0％

Operating
Income

1,989

1,400

△29.6％

Operating Margin

1.8％

1.3％

-

Ordinary
Income

1,795

1,300

△27.6％

Ordinary Income
Margin

1.6％

1.2％

-

Profit attributableto owners of parent

1,339

700

△47.7％

1.2％

0.6％

-

Net Income
Margin14

II. Future Strategy(Summary of Medium-Term Management Plan)

15

1. Management Environment ― Trends in the number of New housing starts
Rent increases became stagnant and the status for privately owned houses,
as well as ready built houses and condominiums, more or less leveled off.
Privately owned houses

Company houses

Ready built houses and condominiums

Rental housing（Units）

987,254

1,000,000
819,020

841,246

893,002800,000

880,470

974,137

920,537

950,000

369,993
320,891
291,840

358,340

289,762

427,275

383,678

420,000

600,000
500,151496,840

259,148

400,000

212,083

239,086

6,580

7,576

249,660
236,042

246,586

7,867

5,832

217,770249,286

213,971240,000

5,272
5,919

5,793
126,604

200,000
308,517304,822

316,532

352,841
278,221284,441

2,941

5,000
131,998

291,783

152,8362,605

285,000

148,266

0FY2010FY2011FY2012FY2013

FY2014FY2015FY2016（2Q）

FY2016FY2017 FY2017（2Q） （Forecast）＊Ministry of Land, Infrastructure, Transport and Tourism Monthly Economic Construction Statistics, Building Starts

16

2. Management Issues and Basic Policies for Final Fiscal Year of“Medium-Term Management Plan 15”
Innovations geared towards an added value (revenue) focused management
 Maximize added value and optimize fixed assets
Profitstructure
improvements
Fundamental
reforms

Evolution ofmanagement
base-

Enhance sales for mid to high end products.
Develop products that give competitive advantage inrenovation market.
Promote sales strategies with showrooms at the core.

-

Enhance cost reduction activities for the entire supply chain.

-

Optimize facility investments and costs.

-

Review evaluation indices.

Focusedimplementationof these activities● Realization of high productivity through improved efficiency of operational duties
and structures.
● Creation of people and brands that only dedicated kitchen manufacturer can achieve.
● Promotion of business activities with social missions.
● Enhancement of governance framework and stabilization of returns to shareholders.

rovide new value by utilizing the strengths of a dedicated kitchen manufacturer
Growthstrategies

 Capture overseas markets.
 Create new businesses.
17

3. Specific Measures and Results
1) Enhance sales of medium to high end products
Aim for ultrahigh quality market
Trading agreement concluded with the Italian premium kitchen manufacturer, Valcucine― Valcucine (Italy) ―[Main Plans for Current Fiscal Year]● Open first showroom for Valcucine in Tokyo.
● Start dealing with Valcucine branded kitchens primarily inTokyo Metropolitan area.

● Founded in 1980 at Pordenone in Italy.
● Introduced premium kitchens targeting the wealthy class of people around the world.
● Renowned as an innovative yet environmentally considerate kitchen manufacturer.
● Sales offices at 54 sites around the world.

Handled Product Series

We plan to provide two series, “Artematica” and“Genius Loci”, which are the main productseries of Valcucine.
“Artematica”“Genius Loci”

Aim for High Quality Market (Future Plans)February 2018

・ System Kitchen

・ Vanity WashstandDomestic sales are planned for new system
kitchens and vanity washstands of a higher grade.
Respond to a diverse range of needs with knowhow of product development and proprietary
technologies at Cleanup.

18

3. Specific Measures and Results2) Develop products that have competitive advantage in renovation market ①
New Compact Kitchen “Colty”

New System Bathroom “Yuasis”

Innovative Trendy Door Colors

New Concept Storage Proposed for Bathrooms19

3. Specific Measures and Results2) Development of products that have competitive advantage in renovation market ②Best Facility Selected by 400 Renovation Sales Persons and Planners“Renovation Awards Grand Prize for 2017”
Received Grand Prize three years in a row for all three grades of kitchen categories.
High grade price
range

What areRenovation
Awards...

(As described by RemodelingBusiness Journal)

Medium grade pricerange

Affordable grade
price range

Awards that recognize products selected by voting of renovation sales persons
and planners. A survey is conducted once a year by the Remodeling Business
Journal.
“Most desirable products for selling and most desirable renovation products for
proposals” are selected. Points are derived using five rating levels, withproducts ranked and announced based on the number of points earned.

Reasons behind support
for kitchens from Cleanup

1

Uncompromis
ing concern
for stainless
steel

2

Nagarail sink3

Araail range
hood

20

3. Specific Measures and Results
3) Promote sales strategies with showrooms at the core ①
New projects

Established new Urban type showroom with focus on condominium renovations

Edogawa Showroom opened(September 15, 2017)

Principal
features● Comprehensive proposal facilitates the imaging of life after renovation● Installation of spacial exhibition to present image of single rooms incondominiums
21

3. Specific Measures and Results
3) Promote sales strategies with showrooms at the core ②

License Badge that clearly indicates qualifications

Promote the acquisition of specialized
knowledge by employees who offer
customers value that can only beprovided by a dedicated kitchen
manufacturer.

List of
Qualifications(As of the end of May 2017)

Qualification name

Grade

Number ofqualified
individuals

Purposes and description

Color

Kitchen Specialist―

185 persons

Specialized knowledge gained to propose a configurationof the kitchen space that a customer truly desires,
through collaboration with the customer.

OrangeGrade 1

16 persons

Grade 2325 persons

Grade 3339 persons

Sorting and Storing Advisor

Shokuiku Food Education Instructor

The relevance of objects found within the living space isreconsidered to propose a more comfortable andabundant life.
An understanding of the importance of food education isgained, cooking skills are improved and practical foodeducation is taught for daily lives to convey thesignificance of food education to people nearby.

Pink
Blue

Green

22

3. Specific Measures and Results
4) Promote showroom visitors and develop corporate brandImplementation of web promotions using
the internet
The “Top Kitchen Selected by Renovation
Professionals” Campaign
The web movie “Simple Tips from Remi
Hirano - Variety Show for Cooking!”
Broadcasting web movies that go hand inhand with the campaign. Hugely talked
about show that utilized Remi Hirano, theculinary expert.

Television adverts broadcast to develop
corporate brand for medium to long term
New television advert “ART: Stainless” completed
Nationwide broadcasting started in October
Our collaboration with world’s top stainlesssteel art is achieved. Cutting edge andbeautiful nature is expressed, as well as thestrong material characteristics of stainless in
an intuitive and dynamic manner.

The web is utilized to promote visitors to showrooms and a
campaign is launched that takes consumers from the presentationof a planning proposal through to the contract signing.

“Cloud Gate”
Artist: Anish Kapoor
Exhibit location: Millenium Park in Chicago in the United States of America
20 meter width, 10 meter height, 13 meter depth and about 100 ton weight
Hybrid welding of stainless plates23

4. CSR activities
1) Social, environmental and community contribution activities
Environmental Activities

Social Welfare Activities

Restoration Assistance Activities

Social and Environmental Report 2017
issued with brand new content

Kitchen Seminar fordisabled persons

The “Saturday Learning”
manufacturing plant tour at Iwaki City
in Fukushima Prefecture

Efforts to reduce the environmental burden andresolve environmental problems were introduced
through activities.

The lest system kitchens and system baths wereintroduced to provide information for visually
impaired persons.

Children were invited to a factory tour withfabrication work sites and experiential learning.

Brand new content this fiscal
year, with the addition ofmanagement ideology andsocial roles.

The “Nagarail” with a sloped sink line, was verified
by touch.

Products were introduced on
our website and relevant
leaflets were distributed atshowrooms nationwide.

Issued October 2017
Issuing division: CS Promotion Division

The introduction of a cleaning method for Araail
Range Hood.

Venue: Cleanup Kitchen Town Tokyo
Target: Approximately 60 visually impaired persons
and care providers

Venue: Kashima System Factory
Target: Fifth grade students at Iwaki City
Yotsukura Elementary School24