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Presentation Material:

Announcement of FY 2018 Interim Results
November 15, 2018

0

Ⅰ. Interim Results Outline

11. Outline of Consolidated Results for Interim Period Ended September 2018
(Units: millions of yen)

2018/92017/9Net Sales

49,88253,085△6.0％

53,80049,800△7.4％

Operating
Income△1,159

601

－

300

△1,160－Ordinary
Income△1,095

626

－

280

△1,100－

Profitattributable toowners of parent△1,286316－

70△1,290－△35.16yen

8.64yen－

1.91yen △35.25yen－

Change From 2018/9
2018/9 ToCompared
Revised Plan
(Actual Results) (Actual Results) Prev. Period (Previous Forecast) (Revised Forecast)Interim
Net Income
Per Share＊Previous Forecast: Announced May 8, 2018
＊Revised Forecast: Announced October 31, 20182

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

53.08
49.88

Net Sales△3.20 billion yen【Main Increase/Decrease Factors】● System Kitchens● System Bathrooms● Washstands/Vanities△ 1,990 million yen△ 270 million yen△ 60 million yen
etc.

●Decrease Due to Decreased Net Sales△ 2,120 million yen

33.16

33.37

Cost of Sales（66.2）（66.9）△1.79 billion yen

Cost of Sales Ratio

＋0.7％
17.92

16.50

（33.8）（33.1）

Gross Profit△1.42 billion yen

0

2017/9●Increase Due to Increased Cost of Sales Ratio＋ 330 million yen●Decrease in S.S., CENTORO Cost of Sales Ratio△ 0.19 point●Increase in RAKUERA Cost of Sales Ratio＋ 0.44 point●Decrease in System Bathrooms Cost of Sales Ratio△ 0.35 point＋ 0.01 point●Supply Segment＋ 0.44 point●Influence of raw materials and others
etc.

●Decrease Due to Decreased in Net Sales●Decrease in Gross Profit Ratio△ 1,080 million yen△ 330 million yen

2018/93

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

17.92

Gross Profit

16.50△1.42 billion yen

SGA Expenses

17.32

17.66

（32.6）（35.4）＋0.34 billion yen

SGA Ratio＋2.8 ％（1.1）（ △2.3 ）

0.60

△1.16

Operating Income△1.76 billion yen-800

2017/9【Main Increase/Decrease Factors】●Sales Expenses●Distribution Expenses●Personnel Expenses●Administrative Expenses＋ 550 million yen△ 90 million yen△ 130 million yen＋ 10 million yen●Sales Expenses●Distribution Expenses●Personnel Expenses●Administrative Expenses＋ 1.2 points＋ 0.2 points＋ 0.7 points＋ 0.7 points●Decrease in Gross Profit●Increase in SGA Expenses△ 1,420 million yen＋ 340 million yen

2018/94

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

Bathtubs & Washstands

Other【2018/9】(Units: millions of yen)
120,000

107,386

Other

106,000
6.2%

6,652

6,589

6.2% Bathtubs &16,86016,535

15.6％

82,876

78.2％

Washstands

100,000

15.7%

6.5％

16.8％

76.7％

Kitchen Equipment

80,00053,08560,000

3,227
8,724

49,882
8,400

20,000083,87378.1％

40,00041,134【2017/9】

3,235

Bathtubs &Washstands

38,246

Other

6.1％

16.4％
77.5％
Kitchen Equipment

2017/92018/9(Current Interim Period)

2018/3

2019/3（Term-End Forecast）

5

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

Direct-S ales (Con domin iu m own ers)
Hou sin g Con stru ctors
G en eral R ou tes (Con stru ction Con tractors - Home R en ovation )

5.1％

5.1％

16.3％

16.0％

78.6％

78.9％

5.1％
15.9％

【First-Half Base】
3.7％
15.9％

80.4％

2.8％

3.2％

79.0％
15.9％

14.7％

81.3％

82.1％
0

0

2016/92017/92017/3

2018/3

2019/3（Term-End Forecast）

2018/9(Current Interim Period)

6

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

【Increased/Decreased Values】【Assets】

100

84.37

83.37

Total Assets

82.11△1.26 billion yen

42.74

Cash and Deposits
Notes and Accounts
Electronically Recorded
Monetary Claims

75

Current Assets

47.30【 Main Increase/Decrease Factors 】●Current Assets●Fixed Assets△ 2,160 million yen＋ 900 million yen●Cash and Deposits△ 2,230 million yen●Notes and Accounts Receivable △ 1,150 million yen●Electronically Recorded Monetary Claims△ 500 million yen

46.17△3.43 billion yen

50

Inventory
3.06
3.44

2.11
2.12

3.44
2.06

●Increase in Merchandise and Finished Goods＋1,290 million yen＋1.33 billion yen
Other Current Assets●Decrease in Accounts Receivable△110 million yen●Tangible Fixed Assets●Intangible Fixed Assets●Securities Investments＋ 100 million yen＋ 90 million yen＋ 700 million yen△0.06 billion yen

25

33.07

32.96

33.86

Fixed Assets＋0.89 billion yen
0

2017/9 2018/3 2018/9
7

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

84.37

83.37

●Short-term Borrowing

82.11
Current Liabilities

25.45
24.34

8.43

53.00

6.69

52.35

50.85

●Electronically recorded obligations - operating＋ 1,150 million yen△1.20 billion yen●Accounts Payable-Trade△ 360 million yen

Non-current liabilities● Long-term Borrowing＋ 430 million yen

24.22

7.05

△ 1,600 million yen＋3.60 billion yen

Total Net Assets＋1.50 billion yen●Interim Net Income△ 1,280 million yen△ 360 million yen●Dividends●Increase in Valuation difference on
available-for-sale securities＋ 180 million yen

0. 00

2017/9 2018/3 2018/9
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. 0020.20
20.97 （2018/3）
20. 00

△22.2

17.98

Compared to Year-End Balance
15. 00

10. 00

5. 00

1.32

△2.4

1.08

△11.9

0. 00

△ 0.46△ 1.76＋1.2△ 1.64 △ 1.65

△ 5. 00

2017/92018/99

6. Capital Investments (Consolidated)

R&D Costs

Capital Investment

Deprecation Costs(Units: billions of yen)

【FY2018 Major Capital Investment Details】

4.00

4.0

3.66

3.55

3.05
3.0

2.10
2.0

① Production Equipment

580 million yen② Showroom Renovation

950 million yen③ Information Investment

550 million yen④ Others

40 million yen

Second-Half Plans

1.80

1.70

First-Half Results

1.38
1.19

1.10

① Production-Related

820 million yen② Operations-Related

390 million yen③ Information-Related

620 million yen

1.0

0.0

0.61

0.56

2017/92018/92018/3(Current Interim Period)

2019/3（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 Share400

Volume

1,400

89.2
80

1,227

82.5 80.7 80.5

77.3

Demand Volume
Cleanup Share(Thousands of Sets) (Thousands of Sets)

1,200

1,200 1,204 1,207

（％）

30.0

1,242
25.0

75.4 75.8
300
1,000

60

244

244

217

220
233

232

19.9

214

20.3

800

20.0

19.4

19.3
17.8

200

577

600

40

17.2 15.0

34.9
99
◆

10.0

100

400

20

5.0

200
Current Interim Period0013/3 14/3

15/3

16/3 17/3

18/3 19/3（Forecast）

0

0.0

14/3

15/3

16/3

17/3

18/3

18/9

(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(Thousands of Sets) (Thousands of Sets)

50

1,000

17.7
15.8
15

10.0

757

8.0

（％）

839

43
14.0 13.7

38

Demand Volume
Cleanup Share

34

13.1

33
31

10

40

800

30

600

739

754

752

12.2 12.0
29

6.0

29

5.1
6.1

20

4.6

400

368
4.4

4.1

4.0

3.9

4.0

◆

14

5

10

200

2.0

0

0.0

Current Interim Period

0

0

13/3

14/3

15/3

16/3

17/3

18/3

19/3
（Forecast）

14/3

15/3

16/3

17/3

18/3

18/9

(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 Share150

Volume

2,000

1,828

5.4
5.1
4.8

5

4

109

4.6

4.7

Demand Volume
Cleanup Share(Thousands of Sets) (Thousands of Sets)

4.5

4.3

120

1,600

90

1,200

1,768 1,804

（％）

10.0

1,833 1,844

8.0

109
93

90

90

3

6.0

6.0

88
81
2.1

857
5.3

5.0

5.0

4.7

4.8

60

800

4.0

30

400

2.0

0

0.0

2
◆

40
1

Current Interim Period

0

0

13/3

14/3

15/3

16/3

17/3

18/3

19/3

（Forecast）

14/3

15/3

16/3

17/3

18/3

18/9

(Current Interim Period)

13

8. Forecasted Consolidated Results For The Period Ending March 2019
(Units: millions of yen)

2018/3

2019/3(Actual Results)(Forecast)

Change From
Prev. Period

Net Sales

107,386

106,000△1.3％

Operating
Income

398

△750

-

0.4％

-0.7％

-

418

△720

-

0.4％

-0.7％

-

49

△1,220

-

0.0％

-1.2％

-

Operating Margin

Ordinary
IncomeOrdinary Income
MarginProfit attributableto owners of parent
Net Income
Margin14

II. Future Strategy
Progress of Medium-Term Management Plan

15

1. Outline of 2018 Medium-term Management Plan (2018 to 2020)(1) - Vision“Reformation to transform into ‘Cleanup’a lifestyle value creating business”
At Cleanup we aim to become a business that delivers“excitement” to customers around the world and we willcontinue to always be the business of choice by creating andproposing a “new lifestyle value” for kitchens, dining rooms,
living rooms and hygienic spaces, as “kitchen experts”.

16

1. Outline of 2018 Medium-term Management Plan (2018 to 2020)(2) - Commitments and Framework
Commemorating the 70th anniversary of our establishment, moving forward.
At Cleanup we take on the challenging task of “Reformation and Creation”.

Structural Reforms

1. Increase shares in mid to high-end
markets.
2. Transform to discard low profit structure.

Growth strategies

3. Establish second pillar of business
operations.
4. Engage in M&A and business alliances.

Businessfoundation
enhancements

5. Enhance technological capabilities.
6. Create brands.
7. Nurture personnel.
171. Outline of 2018 Medium-term Management Plan (2018 to 2020)(3) - Orientation and Domain of Strategies
Products and services
New

Existing

New
Existing

Customers and markets[New product &service development]･ Maintenance business･ EC business[Market penetration]･ Increasing shares in mid tohigh-end markets

Entry into new business areas

EC business[Diversification]･ Cross industry business･ Web business･ M&A business alliances[New market development]･ Expand overseas business
operations･ Extend business to the affluent

Premium productsLine of mid to high-end products

Overseas production
concept<ASEAN member countries>

Laos
MyanmarThailand

VietnamPhilippines

Cambodia
Malaysia

BruneiSingapore

Indonesia

 Start with the implementation of our basic concept from the 2015 Medium-Term Business Plan and continue
on to evaluations.
 Deepen the grip on business in the existing fields, while taking on the challenge of entering into new fields.

18

2. Specific Measures for “2018 Medium-Term Management Plan”(1) - Reformation of Product Line-up
Innovate product lines ranging from ultra-high class tomedium and high class markets.

(Italian premium kitchens)Market (2)<Estimated market size>

Approximately

7,000 sets per year

“Made to order /semi-made-to-order”(Houses)Advancement into the“High Class”

富market裕層市へaffluentの進出
for場theMarket (1)Approximately

15 billion yen in sales(Survey by the Japan Research Institute)

Existing business domains
19

2. Specific Measures for “2018 Medium-Term Management Plan”(2) - Redevelopment of Superior to Medium Quality Products 1/5
Redevelop two of our major traditional brands tocreate the new CleanupCore models of medium to superior quality

Flagship model
1998

Introduction

The first all sliding storage stainlesscabinet system kitchen in the industry

From February 2018:
Brand redeveloped

1983

Introduction

The first simplified installation system kitchen in
the industry
The long and best selling brand that continued to stay
the top products for the longest time in the industry

From September 2018:
Brand redeveloped20

2. Specific Measures for “2018 Medium-Term Management Plan”(2) - Redevelopment of Superior to Medium Quality Products 2/5
A half year has elapsed since the launch of the brand. New activities
will be implemented for brand penetration of the market.

The concept is “bringing the kitchen into thecenter of life”.

Introduced as a “kitchen for enjoying arelaxed lifestyle”

1 Center position design
Features
Craftsmanshipof2
CENTRO“Cube Design” harmoniously
3 blends into interior decor

The post of “CENTRO Ambassadors” appointed
to ten famous saloneses.
Disseminating attractive features of the “CENTRO”

Principal activities
1. The coordination of “CENTRO” exhibits, which are held at the
Kitchen Town Tokyo during each scheduled month.
2. The holding and sponsoring of events at the Kitchen Town
Tokyo, during each scheduled month.
3. The dissemination of details on the “CENTRO Lifestyle”,
through official blogs of Ambassadors.
4. Information communication at classes presided over by therespective individuals and through SNS.

21

2. Specific Measures for “2018 Medium-Term Management Plan”(2) - Redevelopment of Superior to Medium Quality Products 3/5
A new story of the core brand started at Cleanup from September 2018.

Further evolution of the “Cleanlady”

The introduction of a new core brand in themedium to superior quality price range

Features of STEDIA

Complete redesigning offloor containers.

The introduction of the“Acrystone Nagarail Sink”

The floor container (storage on floor
level) was completely redesigned tosuit an open plan kitchen, living roomand dining room environment inresponse to the diversification ofinterior decorating trends.

The “Nagarail Sink” line of products,
introduced in 2015, now includes
models made with Acrystone, in
addition to those made with stainlesssteel.

1

2

The incorporation of new storage
functionalities, developed by considering
usage frequency and ease for the extractionof contents, as standard features.

The “zone concept”, which is a storage
concept we have nurtured over theyears and has evolved further byincorporating a stainless steel ecocabinet that is easily maintained andused cleanly for a long time, was added
to the standard feature.

322

2. Specific Measures for “2018 Medium-Term Management Plan”(2) - Redevelopment of Superior to Medium Quality Products 4/5
Starting new advertisement and sales promotional activities to convey
the attractive features of STEDIA“Forever unchanging and beautiful”
The new commercial released on August 21.

Ms. Takako Matsu talks about the attractive features of thestainless cabinet kitchen.
Do you know? Stainless Steel
Cabinet Edition

An appeal has been made to the viewers about the
aspect of using stainless steel, which has a strong
resistance to mold, contamination and odor, evendeep into the interior of the kitchen which isordinarily out of sight.

Commercial video currently
released!

“STEDIA Special Site”
http://cleanup.jp/kitchen/stediasp

Do you know? Araail Range Hood
EditionAn introduction on how the interior of the range
hood is kept clean with automatic cleaning.

23

2. Specific Measures for “2018 Medium-Term Management Plan”(2) - Redevelopment of Superior to Medium Quality Products 5/5
The two pieces of equipment compatible with the CENTRO and STEDIA
series products were given the Good Design Award.

Hybrid Cooktop

Stainless Design Hood

The positively assessed features include a cooktop thatincorporates both gas burners and IH heaters to offer adynamic composition.

The positively assessed features include a simple form
with an inclined panel to enable head clearance whileeliminating the presence of an exhaust duct.

Compatible SeriesCompatible Series

Dual Chef

Ballena24

2. Specific Measures for “2018 Medium-Term Management Plan”(3) - Enhancement of Customer Contacts
Renovations and relocations of showrooms continue forsustained and enhanced sales capacities

Renovations were conducted at four sites during first half of FY2018
The “Osaka South
Showroom” was relocatedto Nishi-ku (south) from
Kita-ku (north) of Sakai
City in Osaka Prefectureand subsequently thename was changed.
The showroom floor
space has been expanded
by about 50%.

Relocation

Renovation→ Combined exhibits that include
compact kitchens, systembathrooms and washstands
for condominiums.

Sakai Showroom(Opened May 8, 2018)

Substantiated proposals
to improve traffic
convenience and lifestylevalues.

Supporting renovations forsmall residential housing,such as condominiums.

Nerima Showroom(Opened September 6, 2018)

The exhibits of products
have been enhanced forbathroom renovations.

Relocation

New establishment of the“Kitchen Studio”, wherevisitors can experience
using our products.

Renovation

Kanazawa Showroom(Opened Sunday, September 23, 2018)

Toyota Showroom(Opened September 6, 2018)

The enhancement of various
types of exhibits, for delving
deeper into the demand forrenovations, include exhibitsof such products asconnective frames that canbe utilized for renovations
without destroying theexisting window sashes.

25

2. Specific Measures for “2018 Medium-Term Management Plan”(4) - New Development of Support Framework
Attractive features of Cleanup products are enhanced withsupport framework aspects as well!

From
September,
2018

The “Cleanup Smile Membership Program”, a program for paid
support services, is revamped.
Supported product ranges have been extended with selectable inspection periods toprovide even more substantial support services.
Supported products

1

Increasedfrom three
products →Five products
for enhanced
coverage!

Fitted kitchen・ CENTRO
・ STEDIA
・ Rakuera

System Bathroom

・ Aqulia-Bath・ Yuasis

2* Red letters on the right represent
two additional products.
[Program Outline]
Scheduled inspection
service

Extended repair
warranty period
Other services
Service fees (taxexclusive)

Standard plan
Every five years(an initial inspection is conducted
one month after starting the use of
the products)
Base unit & equipment
five-year extension

Select plan

Light plan

Every year / Every two years / Every three
years / Every four years / Every five years /Whether or not the initial inspection is
selectable

None

Selectable from the options of the base unit for 10 years & equipment forsix years / Base unit & equipment for six years / Base unit & equipment
for three years

10% off various services, such as equipment replacements, parts replacements
and the like, as well as a subscription to the lifestyle magazine “365c”.
¥2,857 (annual fee)
¥11,429 (initial fee)

Two plans are
newly
established &added¥1,200 to ¥6,000 (annual fee)
¥5,000 to ¥28,000 (initial fee)

* Varies according to scheduled inspection
cycles and extended number of years.

None¥5,000 to ¥28,000(initial fee)

* Varies, depending on theextended number of years.

26

2. Specific Measures for “2018 Medium-Term Management Plan”(5) - Activities Implemented for Overseas Business Operations◆ Enhance the implementation of stainless cabinets, primarily in the nations of Asia.
◆ Examine the overseas supply framework.
Shenyang● China・ Kitchen products and the like to be supplied to major house manufacturers (Suzhou, Taicang, etc.)

Beijing

・ Collaboration is to be enhanced with distributors, while sales are made to Japanese developers.

DalianKorea
Tokyo● Taiwan

Shanghai・ The area of jurisdiction is to be expanded and the sales capabilities enhanced to implement businessactivities intended to capture property projects.
・ Support for distributors is to be enhanced, as sales are made to major developers.

TaipeiVietnamHong Kong● Singapore, Malaysia and Thailand

・ Sales activities intended for real estate developers are to be intensified through collaboration withdesigners and local distributors in the central market for ASEAN nations.

● Other Asian Countries

Thailand

Malaysia

・ Distributors are to be established at principal nations to implement sales activities, intended primarily
for those in the high income brackets.

Condominiums in Suzhou,
China.

Singapore* Blue letters represent
production sites.

Condominium in Kuala Lumpur,
Malaysia27

2. Specific Measures for “2018 Medium-Term Management Plan”(6) - CSR Programs
Cleanup Foundation- A means to pay back local communities, with gratitude The foundation, which was established in2012, continues to provide support fortraining young people, who will be carrying
local communities, with restoration activities
within Fukushima Prefecture. Scholarships

Cleanup Wrestling Club
Promotion of sports by encouraging participation in wrestling.

Club founded in 1992

A wrestling club is operated as a corporate sports activity. Four of our athletes are
currently training to qualify for participation at the 2020 Tokyo Olympic Games. Kids
wrestling is also supported in Iwaki City of Fukushima Prefecture, the location for oneof our production sites.
Wrestler
Minagawaprovided to 40 people in FY2018.

World ChampionshipWrestler
KawanaNational Sports Festivalof Japan at Fukui

Wrestler
KinoshitaWorld University Championships

Wrestler
ShiokawaNational Sports Festivalof Japan at Fukui■ Principle results (since April 2018)

Awarded scholarships for FY2018 and supported healthy training of young athletes(at Cleanup Training Center)R&D promotion
projects

Scholarshipprojects

Sports promotion
projects

Out of a desire to nurture young athletes and for the early restoration of
Fukushima Prefecture ...
Establishment date: December 13, 2012
Location: 78 Hisanohamashizu, Hisanohamamachi, Iwaki City, Fukushima Prefecture
Located inside the Cleanup Training Center<Wrestler Hiroe Minagawa>
October 2018: Awarded a silver medal two years in a row at the“World Championship”
August 2018: Awarded the silver medal at the “Asian Games”

August 2018: Awarded “Minister of Education, Culture,
Sports, Science and Technology Award” (recipients
include Manager Imamura)

June 2018: Awarded the First Prize seven years in a row for the
first time as a female athlete at the “Meiji Cup”
<Wrestler Masuto Kawana>
October 2018: Awarded First Prize at the “National Sports
Festival of Japan at Fukui”
July 2018: Awarded Third Prize at the “Japan Wrestling
Federation Championship”<Wrestler Kirin Kinoshita>
September 2018: Awarded First Prize at the “World University
Championships”
June 2018: Awarded Third Prize at the “Meiji Cup”
May 2018: Awarded a silver medal, as a male member of TeamJapan at the “Wrestling World Cup”
<Wrestler Kanta Shiokawa>
October 2018: Awarded First Prize at the “National Sports
Festival of Japan at Fukui”
June 2018: Awarded Third Prize at the “Meiji Cup”

Cleanup Kids Iwasaki Wrestling Club
Social contributions to the local community, as well asactivities to facilitate the healthy growth of children whocarry our future with support for the creation of a brighter
future, are facilitated through the administration of the kids
wrestling program.

28

For any questions concerning investor relations, please contact:

Cleanup Corporation
Corporate Planning Department, Public Relations Section

Tel 03-3894-4771
URL http://cleanup.jp/

Disclaimer
This material is intended to provide information regarding the FY2018 financial results (April 2018 September 2018) and does not constitute a solicitation to invest in Cleanup Corporation-issued
securities.
Furthermore, this material was created based upon data current as of November 15, 2018. Opinions
and forecasts contained within this material were the subjective judgments of Cleanup Corporation at
the time of creation. No guarantee or promise is made as to the accuracy or completeness of thisinformation. Additionally, this information is subject to change without prior notice.
29