Full year fiscal year ended July 2019

Financial Results
Explanation Material

Bestone.com Co. Ltd.
(Securities code: 6577)

Table of Contents

1. Management philosophy
2. Financial report-Summary of consolidated financial
results for the current fourth quarter-Summary of consolidated financial
results for the full year
-Trends in financial results-Trends in users of the website

3. Major efforts during the fiscal year
ended July 2019
-A variety of campaigns-Best1’s tours-New PSA (preferred sales agent)contracts-CruiseBookJapan-Ebisu Ryokan

5. Future growth strategy-Summary of growth strategy-Policy for the current period-First hosting of chartered cruise-Start of escorted tours-Entry into inbound market-Strengthening of marketing-Hotel/Japanese-style hotel business-Investment/capital and business alliance-Forecast of financial results for the fiscal year
ending July 2020

6. Reference materials-Company overview-Service overview-Advantage of Bestone.com

4. Market environment-Population of cruise guests in Japan-Growth potential of cruise market-Inbound cruise market
1Management philosophy

Provide all customers with a first
unforgettable experience on a cruise
tour/voyage
Life Change Experience
Make cruises more familiar and easy
Cruise tours are not only for the wealthy and elderly.

We will contribute to a growth in the Japanese cruise market by establishing an environment where
young tourists and persons who have yet to travel on cruise ships can join cruise tours/voyages easily
and comfortably and providing them with the opportunities to experience a new form of tours.

2Management policy[Basic view for future financial results]

As the main cruise business (main business), we are designed to maximize profits not forthe short term but for the middle and long term with the aim of securing revenue andprofit growth and maximizing net sales (scale) and gross profits.
Cruise market has not yet matured but is at a transition stage in its development, though the business environment
has improved year by year and transaction volume/population of cruises have shown
G1solid growth.
At the phase where the market has matured to some extent (the number of Japanese cruise guests has reached acertain level), in our opinion, the followings are the most important points:
・Number of tourists through (using) Best1 Cruise
・The penetration of the brand so that Best1 becomes the automatic choice for reserving cruise tours
To be a top online platform in the reservation of cruise tours,
・We will put a priority on making investment for growth in scale (net sales) while securing revenue and profit
growth,and・We will carry out business and profit planing for the time being on the assumption it takes half a year - a year
from time of investment (advertisement/ system/personnel expenses) to an effect on financial results.
3スライド 4
G1

原文「クルーズに乗る日本人が一定に達した」は、「クルーズに乗る日本人の数が一定の水準に達した」の意味で翻訳しております。
GLOVA, 2019/11/21

Table of Contents

1. Management philosophy
2. Financial report-Summary of consolidated financial
results for the current fourth quarter-Summary of consolidated financial
results for the full year
-Trends in financial results-Trends in users of the website

3. Major efforts during the fiscal year
ended July 2019
-A variety of campaigns-Best1’s tours-New PSA (preferred sales agent)contracts-CruiseBookJapan-Ebisu Ryokan

5. Future growth strategy-Summary of growth strategy-Policy for the current period-First hosting of chartered cruise-Start of escorted tours-Entry into inbound market-Strengthening of marketing-Hotel/Japanese-style hotel business-Investment/capital and business alliance-Forecast of financial results for the fiscal year
ending July 2020

6. Reference materials-Company overview-Service overview-Advantage of Bestone.com

4. Market environment-Population of cruise guests in Japan-Growth potential of cruise market-Inbound cruise market
4Summary of consolidated financial results (for the current fourth
quarter)• For the fourth quarter (May-July), consolidated net sales amounted to 651 million yen, 132.2% of those for the same period of theprevious fiscal year.
This is mainly due to flexible sales such as last-minute discounts and the attraction of demand for the early summer vacation period in July.

Quarterly net sales reached a historical high.
In the fourth quarter, all net sales, gross profit, operating income and ordinary income reached historic highs.
• After the 10 consecutive days of the Golden Week holiday, cruises continuously attracted high interest, and so reservations remained solid.
• We aggressively made upfront investment in advertisement in the process of strengthening the attraction of reserving tours for the next period,and increased advance reservations.

Fourth quarter of the fiscal year ended July 2019 (May-July
2019)(thousands of yen)

Current 4Q

Previous 4Q

Actual results

Composition
ratio

Actual results

Composition
ratio

PercentchangeNet sales

651,724-

493,148-132.2%

Gross profit

130,52720.0%

87,72617.8%

148.8%

Total SGA

100,157

15.4%

68,63013.9%

145.9%

Advertisement

40,077

6.1%

25,8475.2%

155.1%

Personnel

32,811

5.0%

25,2325.1%

130.0%

Other

27,267

4.2%

17,551

3.6%

155.4%

Operating income

30,3704.7%

19,0953.9%

159.0%

Ordinary income

28,5544.4%

18,0133.7%

158.5%Net income

14,782

2.3%

10,0852.0%

146.6%
5

Summary of consolidated financial results for the full year
(consolidated statement of income)• For the current consolidated fiscal year, net sales amounted to 2,173 million yen, 136.9% of those for the previous consolidated

fiscal year.
This is mainly due to continued growth in the cruise market, expansion of lineup campaign and increased shares resulting from strengtheningof new sales promotion and measure for acquiring repeaters.

In the full year, all consolidated net sales, gross profit, operating income and ordinary income reached another historicalhigh.
• Net sales, gross profit and SGA (selling, general and administrative expenses) are 3 million yen, 21 million yen and 41 million higher than the plan,
respectively. Consequently, operating income are 19 million yen lower.
* Other in SGA includes M&A related expenses of about 7 million yen and additional audit fee of about 8 million yen arising from introduction of andchanges in the system.
We failed to achieve the profit plan despite steady business because of insufficient initial reflection of administration expenses after listing and M&A related
expenses.

Fiscal year ended July 2019 (August 2018 - July 2019)(thousands of yen)

Current fiscal year
Actual results

Net sales
Gross profit
Total SGA
Advertisement
Personnel
Other
Operating income
Ordinary income
Net income

2,173,845
452,676
318,200
104,095
116,103
98,000134,475
131,263
84,203

Plan

Previous fiscal year
Actual results

Composition
ratio

vs. theprevious
fiscal year

100.2%

1,587,520-

136.9%

431,022105.3%

338,87421.3%

133.6%

14,6%

276,890114.7%

218,24913.7%

145.8%

4.8%

103,600

100.5%

74,421

4.7%

139.9%

5.3%

105,624109.9%

88,1295.6%

131.7%

4.5%

67,666143.9%

55,6983.5%

175.9%

6.2%

154,13188.3%

120,6257.6%

111.5%

6.0%

150,24588.9%

115,508

7.3%

113.6%

3.9%

100,01484.7%

77,3084.9%

108.9%

Composition
ratio

Plan

vs. the plan-

2,170,310

20.8%

6

Trends in financial results for the full year
・For the current consolidated fiscal year, consolidated net sales and ordinary income amounted to 2,173 million

yen (136.9% of those for the previous consolidated fiscal year) and 131 million yen(108.9%), respectively, reaching another historical high on a full-year basis.
We have steadily increased transaction volume and customers mainly
due to an expansion of the cruise market, penetration of online
reservation of tours, expansion of product lineup, web marketing,and an improvement in UI.

■Net sales(millions of yen)

Non-consolidated
Consolidated

2,173Collective recording of M&A fees in SGA resulted in consolidated
ordinary income below non-consolidated ordinary income. No
subsidiaries have recorded ordinary loss.

■Ordinary income(millions of yen)
Non-consolidated
Consolidated

140

131

2,000
120

1,587

100

1,500

80

1,196
1,000

115

937

60

60

51

694
40
500

443
20

6

5

0

0
9th term

10th term

11th term

12th term

13th term

14th term

9th term

10th term

11th term

12th term

13th term

14th term

7

Trends in “Best1 cruise” users••

For June, the number of users marked a historic high, 166% of that for the same period the previous year and received
inquiries and advance orders remained strong following May.
An increase in net inflow for the April-July period mainly had an effect on sales for the fiscal year ending July 2020.
Among others, reservations for Golden Week in April 2020 were at least twice as high as the previous fiscal year. (Effect ofstronger demand for cruise tours/trend of making reservations forward)*The following trends in users of the website are based on timing of using the website (timing of consideration/reservation), and so the trends differ from thoseat timing of recording of sales (sales are recorded on departure date of tours).
Monthly users for May/June
Exceeded 220,000 UUs (unique users)/1
million PVs (page views)

Best1 cruise WEBusers*Reference
Population of cruise guests in Japan: 315,000

220000200000180000August, the first month of the period
160,000 UUs/750,000 PVs

Effect on future sales

16000014000012000010000080000
AugustSeptember

OctoberNovember

DecemberJanuary

Fiscal year ended July 2018

February

March

April

May

June

July

Fiscal year ended July 2019

As for timing of considering cruise tours (inflow into “Best1 Cruise”), there is a trend of seasonal fluctuation not dependent on advertising.

8

Table of Contents

1. Management philosophy
2. Financial report-Summary of consolidated financial results forthe current fourth quarter-Summary of consolidated financial results forthe full year
-Trends in financial results-Trends in users of the website

3. Major efforts during the fiscal year ended
July 2019-A variety of campaigns-Best1’s tours-New PSA (preferred sales agent) contracts-CruiseBookJapan-Ebisu Ryokan

5. Future growth strategy-Summary of growth strategy-Policy for the current period-First hosting of chartered cruise-Start of escorted tours-Entry into inbound market-Strengthening of marketing-Hotel/Japanese-style hotel business-Investment/capital and business alliance-Forecast of financial results for the fiscal year
ending July 2020

6. Reference materials-Company overview-Service overview-Advantage of Bestone.com

4. Market environment-Population of cruise guests in Japan-Growth potential of cruise market-Inbound cruise market
9A variety of campaigns
We have implemented flexible sales promotions unique to OTA (online travel agent) including seasonal
campaigns, preliminary reports on price revisions of shipping companies and our special rate for reservationof tours close to their hosting (terms of purchases).
[Seasonal campaigns]
We have selected core products and implemented discountcampaigns for the products with a limited time with the aim offollowing:・Obtaining new customers
・Selling products with high profitability
・Controlling timing of departure (accounting sales)
・Increasing contract rate and efficiency of operation[Preliminary reporting of price cutting/ special rates](i) We have generated synergy by timely preparing of the feature
web page with price revisions by shipping companies, and related
sales promotion by the shipping companies on other media andstrengthening our sales promotion.
(ii) We can make appealing prices without reducing profits bypurchasing cabins vacant immediately before departure at the
special terms only applied to us and implementing flexible sales
promotion because the lead time for posting the cabins on the web
is a day.
10

Offering unique products/Best1’s tours
We have developed many original packaged tours with air tickets and specially designed products.
We will make efforts to increase the number of tours and develop escorted tours.
[Best1’s tours with air tickets]
By making minimum packages combining air tickets and boat cruise
tickets, the highly flexible discount tours with the following features,• Possible to eliminate efforts to find air tickets suited to cruises• Easily understandable total amount necessary for a tour
• Cheaper than other companies’ products combined with sightseeing
and other products• Possible to customize hotels and sightseeing by users themselves,
positioned between packaged tours with full services and personal
tours.

[Mystery cruises]
They are special plans that cruise ships and departure date/shipping
routes are unannounced at reservation.
Impressive plans with cruise ships undisclosed makes it possible topurchase vacant cabins at special prices and sell them at a lower price.

11

Strengthening of relationship with shipping companies/new PSA(preferred sales agent) contracts
・New PSA (preferred sales agent) contracts mainly related to premium/luxury cruise ships have become
effective.
In addition to an improvement in terms of purchases, resultingly, joint product planning/sales promotion
plans will be implemented.
・We will expand product lineup and make web registration more efficient through system linkage on
inventory information (including charges for vacant cabins).
Only cruise company in France. The company commissioned four small-sized cruise ships with good
design(same type ships) from 2010 to 2015. The 10,000 ton-class ships are favored in terms ofcharacteristic body and sophisticated and elegant decor. The company’s expeditionary cruises(expedition ships) for the south pole, etc. are also acknowledged.
Its cruise ships win the nickname of “Gastronomic ship”, offering authentic french cuisine on board.

Regent Seven Seas is a cruise company with its headquarters in Miami, Florida.
Cruise ships have cabins consisting of suites with a balcony and a bathtub, and all inclusive luxury cruises
are offered that charges for the cruises range from alcoholic charges to charges for sightseeing tours atanchorage sites.

Oceania Cruises has upper premium cruise ships with a high class feel and casualness not requiring fullformal dress. Their middle-sized luxury cruise ships call at favorable ports around the world.
Guests can enjoy the greatest cuisine overseen by famous chefs at open seating special restaurants while
being casually dressed, with no dress code or restrictions and no additional charges.
The one and only service combining the quality of premium cruise ships and the casual atmosphere isappreciated by cruise enthusiasts around the world, and the company has won many prestigious awards.
12

Multi-language website “cruisebookjapan”
We have set up a multi-language website to obtain increasing inbound cruise tourists.
At present, we have not yet obtained foreign users because of no marketing activities. However, in our plan
marketing activities will be launched, and expanded in terms of scale, and contribute to financial results inthe next three years.

“cruisebookjapan.com” Multi-language support website possible to search and reserve cruise tours
Japanese
English・The website opened at the end of December 2018.
Chinese (simplified)
・We will implement marketing activities and attract guests in the order of
Taiwanese (traditional)
English version site and then Tawanese/Korean version site.
Korean・We will generate 10% of net sales from inbound tourists in the nextIndonesian
three years.
Thai
Supporting seven languages!
Trends of inbound cruise guests
500
450
400
350
300
250
200
150

The number of inbound cruise
guests slightly declined because
Chinese market has entered aconsolidation phase from an
overheating phase.
Shipping companies expressed anincrease in allocation of cruise
ships toward 2020, and so thenumber will achieve repeated
growth if the market leaves
behind a temporary lull.
*The central government set up the goal ofincreasing the number of inbound cruise
guests to 5 million in 2020 in the “Tourism
Vision to Support the Future of Japan”(announced on March 30, 2016).

100
50
0
2013 2014 2015 2016 2017 2018 2019 2020

Number of cruise users in rapidly growing Asian countries
China(thousand people)
Taiwan(thousand people)
Singapore (thousand people)
Hong Kong (thousand people)
Malaysia(thousand people)
India(thousand people)
Indonesia(thousand people)
Philippines (thousand people)
South Korea (thousand people)
Thailand(thousand people)
Vietnam(thousand people)

2016
2,122.9
299.3
214.2
127.3
99.8
148.5
33.2
26.4
32.0
50.5
5.9

2017
2,396.7
373.5
266.6
229.8
187.6
172.3
46.5
41.2
39.2
26.5
6.5

Growth rate
13%
25%
24%
81%
88%
16%
40%
56%
23%
-48%
10%

*It is prepared by us, based on CLIA “Asia Market Trends 2018”.

The markets
with the potential
equal to or
above Japan︕

13

Made Ebisu Ryokan a subsidiary【Entry into hotel/Japanese inn business】
・We have obtained Ebisu Ryokan through M&A as a foothold for a new business.
Ebisu Ryokan is located at a convenient site 7 minutes walk from the JR Kyoto Station and in front of the quiet and calm street.
Please go from the JR/Shinkanse Hachijo exit through Kintesu shopping street “Miyakomichi” to the main street. It takes a few minutes
walk to go to our building from there, and so it is also convenient when you are caught in the rain or have large suitcases.
The Japanese inn has a building with 9 guest rooms (27 overnight guests at maximum), constructed in 2015, and is a small-sized hosteltype facility for foreign (inbound) guests specializing in accommodation with no meals.

16-2 Higashikujo Nakatonoda-cho, Minami-ku, Kyoto-shi

The hotel has maintained solid occupancy results mainly from foreign
tourists since opened in 2015.
For the latest fiscal year ended April 2019, it recorded net sales of 39
million yen and ordinary income of 8 million yen. (The results only for the
fourth quarter are reflected in the consolidated statement of income)14

Table of Contents

1. Management philosophy
2. Financial report-Summary of consolidated financial results forthe current fourth quarter-Summary of consolidated financial results forthe full year
-Trends in financial results-Trends in users of the website

3. Major efforts during the fiscal year ended
July 2019-A variety of campaigns-Best1’s tours-New PSA (preferred sales agent) contracts-CruiseBookJapan-Ebisu Ryokan

5. Future growth strategy-Summary of growth strategy-Policy for the current period-First hosting of chartered cruise-Start of escorted tours-Entry into inbound market-Strengthening of marketing-Hotel/Japanese-style hotel business-Investment/capital and business alliance-Forecast of financial results for the fiscal year
ending July 2020

6. Reference materials-Company overview-Service overview-Advantage of Bestone.com

4. Market environment-Population of cruise guests in Japan-Growth potential of cruise market-Inbound cruise market
15

Population of cruise guests in Japan for 2018
It was prepared by us, based on the “2018 Japanese cruise trends (survey result)” announced by the Ministry of Land, Infrastructure, Transport and Tourism on June 27, 2019.

In 2018, the population of Japanese cruise guests totaled 321,000, above 300,000 for the second consecutive year,

reaching historic highs for the third consecutive year.
Given shipping companies’ schedule for allocation of ships, it will also reach historic highs in 2019 and 2020.

【Goals】
Market population

Historic
high

350

Population of cruise guests in Japan300

500,000

250

Our share

200

More than 10%

150

Handling

・・・

100

50,000-70,000

50
0
2003

2004

2005

2006

2007

2008

Oceangoing cruises of Japanese ships

2009

2010

2011

2012

2013

Oceangoing cruises of foreign ships

2014

2015

2016

2017

2018

time as many
2023 *Four-fiveas present figures

Coastal cruises of Japanese ships

Breakdown

Our sales composition ratio: 97% : Handled about 15,000 persons

Our sales composition ratio: 3%
Population of Japanese ship cruise (foreign and Japanese) guests: about 100,000

Population of foreign ship cruise guests (including cruises departing from and arriving in Japan): about 200,000

The market has maintained
high growth though it is niche.
CAGR (compound annual growth rate) For recent years, thepopulation has grown at a
Past 15 years: 10.1%
faster pace due to a higher
Latest 5 years: 12.9%
recognition in volume.

220

High growth

170

120

It is expected to further growbecause of foreign ships’
continuous presence in Japan(regular lines) being
established.

70

-30

2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018

20

Driver of market growth170

Slightincrease

CAGR (compound annual growth rate)
Past 15 years: 1.6%
Latest 5 years: 2.4%

120

70

20

-30

2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018

220

The figures mainly consist ofguests of the following three
Japanese cruise ships:
・Asuka・NIPPON MARU
・Pacific Venus.
When long term voyages(including world cruise) are
operated, days of accommodation
increase while annual guests
decrease.
*There are slight changes in the number of cruise
ships during the period described at left side.
*Statistically, the figures include guests of someferries.

16

Growth potential of cruise market in Japan• In japan, cruise tours tend to be considered expensive. We will explore a new cruise market by covering a wide range of casual cruises which areglobally considered standard.
• Given that there is a population of cruise guests, which are mainly accounted for by casual cruise guests, equivalent to about 3% of the
population in United States and United Kingdom, we think that there is the sufficient possibility of the population of cruise guests,
which is now 300,000, increasing to around 1 million.
Unit: millions ofpeopleLuxuryMainly cruise tours with 10 or more overnight stays$400- /overnight stayAge group: 50’s or moreType of guests: retired persons, persons celebrating
anniversary

About 4%*1

Picture of cruise
tours in Japan

About 16%*1

327.2

11.9

United Kingdom

66.0

1.9

Japan

126.8

0.3

Mainly cruise tours with 7 or more overnightstays$200-/overnight stayAge group: 30’s or moreType of guests: people of mature age, retired
couples, friends, honeymoon couples

Mainly cruise tours with 3-7 overnight stays$70-/overnight stayAge group: 20’s or moreType of guests: people of active age to mature age,friends, families

Cruise tourists

United States

Premium

CasualPopulation

Ratio of cruise tourists to the population

About 80%*1

United States

3.6%

United Kingdom

Japan

0.0%
*1:
The ratio is based on passenger capacity.
Source: It was prepared by Ministry of Land, Infrastructure, Transport and Tourism, based on the Cruise Book (2016 version)(JOPA:Japan Oceangoing Passenger Ship Association)

2.9%

0.25%

0.5%

1.0%

1.5%

2.0%

2.5%

Source: United Nations, World Population Prospects 2018
Cruise Lines International Association, 2019 cruise trends & industry outlook - CLIA
Ministry of Land, Infrastructure, Transport and Tourism “2018 Japanese cruise trends”

3.0%

3.5%

4.0%

17

Number of port calls to Japan and inbound cruise market
It was prepared by us, based on the “2018 cruise ship port calls in Japanese ports and harbors and inbound cruise tourists (confirmed report)” announced by the Ministry of Land, Infrastructure, Transport and Tourism on June 27, 2019.

In 2018, cruise ship port calls totaled 2,930, a historic high.
Inbound cruise guests totaled 2,451,000 (down 3.1% year-over-year).
Trends in port calls to Japanese ports and harbors
3000

Port calls totaled 2,930 (up
6% year-over-year), a
historic high, with 1,913 forforeign ships and 1,017 forJapanese ships.
First place for

2500
2000
1500

four consecutive
years

1000
500
0
2013 2014 2015
Japanese ships

2016 2017 2018
Foreign ships

400
350
300
250
200
150
100

*The central government set up the goal ofincreasing the number of inbound cruise
guests to 5 million in 2020 in the “Tourism
Vision to Support the Future of Japan”(announced on March 30, 2016).

50
02013 2014 2015 2016 2017 2018 2019 2020

PublicPrivateShipping companies established terminal
facilities for passengers, and the facilities areshared with other shipping companies.

Port of Yatsushiro (Kumamoto)
RCIPort of Sasebo
CarnivalPort of Kagoshima (Kagoshima)
RCI
Port of Motobu (Okinawa)
Genting Hong Kong

Port of Shimonoseki(Yamaguchi)
MSC Cruises

Port of Hirara (Miyakojima)
CarnivalPort of Shimizu (Shizuoka)
Genting Hong Kong

Port of Naha (Okinawa)
RCI

Number of cruise users in rapidly growing Asian countries
The number of inbound cruise
guests slightly declined because
Chinese market has entered aconsolidation phase from an
overheating phase.
Shipping companies expressed anincrease in allocation of cruise
ships toward 2020, and so thenumber will achieve repeated
growth if the market leaves
behind a temporary lull.

450

Yusen Cruise

Gave the permission for preferred use ofports and harbors quay

By port and harbor,(i) Port of Hakata: 279(ii) Port of Naha: 243(iii) Port of Nagasaki: 220(iv) Port of Yokohama: 168(v) Port of Hirara: 143

Trends of inbound cruise guests
500

Establishment of global cruise sites through public private partnership(sequentially selected from July 1, 2017)
Amendment of the Port and Harbor Act forPort of Yokohama
public private partnership
Carnival

2016

2017

Growth rate

China(thousand people)

2,122.9

2,396.7

13%

Taiwan(thousand people)

299.3

373.5

25%

Singapore(thousand people)

214.2

266.6

24%

Hong Kong(thousand people)

127.3

229.8

81%

Malaysia(thousand people)

99.8

187.6

88%

India

(thousand people)

148.5

172.3

16%

Indonesia(thousand people)

33.2

46.5

40%

Philippines(thousand people)

26.4

41.2

56%

South Korea(thousand people)

32.0

39.2

23%

Thailand(thousand people)

50.5

26.5

-48%

Vietnam(thousand people)

5.9

6.5

10%

*It is prepared by us, based on CLIA “Asia Market Trends 2018”.

The markets withthe potential
equal to or above
Japan︕

18

Table of Contents

1. Management philosophy
2. Financial report-Summary of consolidated financial results
for the current fourth quarter-Summary of consolidated financial results
for the full year
-Trends in financial results-Trends in users of the website

3. Major efforts during the fiscal year ended
July 2019-A variety of campaigns-Best1’s tours-New PSA (preferred sales agent) contracts-CruiseBookJapan-Ebisu Ryokan

5. Future growth strategy-Summary of growth strategy-Policy for the current period-First hosting of chartered cruise-Start of escorted tours-Entry into inbound market-Strengthening of marketing-Hotel/Japanese-style hotel business-Investment/capital and business alliance-Forecast of financial results for the fiscal year
ending July 2020

6. Reference materials-Company overview-Service overview-Advantage of Bestone.com

4. Market environment-Population of cruise guests in Japan-Growth potential of cruise market-Inbound cruise market
19

Future growth strategy of Bestone.com[Multi-store operation of themed/differentiated hotels]
Ebisu Ryokan (Kyoto): 9 guest rooms/net sales of 35 million
yen⇒To establish know-how of marketing and operation
To add one or two hotels with 30 guest rooms or more andnet sales of 100 million yen or more annually through M&A
or new development[New business development in the medium and longterm]
We will make venture investments and capital andbusiness alliances in fields peripheral to our groupbusinesses including travel/EC/global/video/marketingwith the aim of generating synergy with our corebusiness and obtaining capital gain.

[Asian zone cruise booking website]
Multi-language website for inbound tourists
To take measures for marketing “Cruisebookjapan” inthe selected target areas (languages)
To initially seek to take first place in dealing in inboundcruise tours (visiting Japan) with the aim of global
operation

Cruise business

2020

Chartered/escourted tours

Strengthening of website
establishment/development

Unique products/exclusive sales

Strengthening of marketing (SNS/video)

2021

2022

Strengthening of services
Improvement in customer satisfaction(CS)
Professional/personnel support

2023

Development of potential customer group
Increase in recognition of cruises
themselves
Mass/SNS advertising

2024

20

Plan of the current period︓GW holiday chartered cruises[To host our first chartered cruise]
As disclosed on April 26, 2019, we expect the business to generate net sales of about 300 million yen and gross margin ratio of 35%.
At present, cabins excluding some suite cabins and cabins with balcony have already sold out (sales progress of 92%).
We will continuously operate the highly profitable charter business by carefully considering cruise ships/schedules/shipping routes andtaking a certain degree of inventory risk.

21

Plan of the current period: Entry into escorted tours•••

We will enter escorted tours for Mediterranean cruise departing December 2019
For competing major travel agencies, escorted tours are a core cruise tour product. In a cruise tour market where many guests get
on a cruise ship for the first time, it is a product category with many users.
We will operate the major courses of Mediterranean Sea/Aegean Sea, which have the second most guests following courses
departing from and arriving in Japan (with little needs for escorting staff), as our first series of escorted tours, and then expand toa variety of locations and strengthen the product lineup.

Market scale of escorted tours
Among cruise tourists, about 60% now use
escorted tours.

To enter about a 40 billion
yen market with 150,000
users !
*It is our forecast based on interviews with shipping

22

Plan of the current period: Strengthening of web marketing[Marketing for actual guest group]
In addition to repeat and referred guests, the group that knows about cruises through media and word of
mouth has expanded year by year. We will continue to implement the web marketing for securing
increasing demand (search countermeasures such as SEO and listing/display advertising)[Marketing for potential guest group]
In our opinion, SNS and video advertising make it possible to implement an approach creating demanditself while seeking cost performance. We will strategically take measures to expand the market.

23

Plan of the current period: Strengthening of services and increasein CS
We have the advantage in know-how/expertise which we have developed as a travel agency specializing in
cruise tours for over 10 years.
We will implement more sophisticated training and manuals (which were newly established/introduced in theprevious period) and improve the cycle from questionnaire to operation and web improvement to constructservices with high customer satisfaction.
Expansion of operator
education

CRM (our own customer
management system)

Establishment of training curriculum/introduction of manual
Highly technical OJT
Our own training/briefing in cooperation with shipping companies

Suggestions suited to attribution of customers
Suggestions based on actual results/history of tours

Feedback from customer questionnaire
Satisfaction of hospitality/suggestions(Evaluation of operators)

Evaluation of website

Evaluation of products
Evaluation of cruise
ships

Training sessions/case sharing meeting on
customer careEngineering team↓Rapid improvement

Reflected in product planning
Cooperation with shipping
companies
Feedback, etc.

24Plan of the current period: Full-scale entry into inbound/global
marketCruises for inbound tourists (mainly from South East Asia) has a remarkably larger market over Japanese
cruises, but not so many online reservations have yet been made.
We will start marketing from the current period to expand the scale of online reservation as a platform.
Population of inbound cruise
guests: 2.5 million

In the next 3-5 years,(About 10 times as many as cruise guests inJapan)

To increase sales from these cruise
guests to 300-500 million yen

Population of global cruise guests:
27 million(about 100 times as many as cruise guests inJapan)

Trends of inbound cruise guests
500
450
400
350
300
250
200
150

The number of inbound cruise
guests slightly declined
because Chinese market hasentered a consolidation phasefrom an overheating phase.
Shipping companies expressed
an increase in allocation of
cruise ships toward 2020, andso the number will achieve
repeated growth if the market
leaves behind a temporary lull.

100
50
0
2013 2014 2015 2016 2017 2018 2019 2020

*The central government set up the goal ofincreasing the number of inbound cruise
guests to 5 million in 2020 in the “Tourism
Vision to Support the Future of Japan”(announced on March 30, 2016).

Additionally, to examine establishment of overseas subsidiaries

Number of cruise users in rapidly growing Asian countries
2016

2017

Growth rate

China(thousand people)

2,122.9

2,396.7

13%

Taiwan(thousand people)

299.3

373.5

25%

Singapore(thousand people)

214.2

266.6

24%

Hong Kong(thousand people)

127.3

229.8

81%

Malaysia(thousand people)

99.8

187.6

88%

India

(thousand people)

148.5

172.3

16%

Indonesia(thousand people)

33.2

46.5

40%

Philippines(thousand people)

26.4

41.2

56%

South Korea(thousand people)

32.0

39.2

23%

Thailand(thousand people)

50.5

26.5

-48%

Vietnam(thousand people)

5.9

6.5

10%

*It is prepared by us, based on CLIA “Asia Market Trends 2018”.

The markets withthe potential
equal to or above
Japan︕

25

Plan of the current period: Hotel/Japanese-style hotel business・Now looking for properties in Fukuoka/Kanazawa/Kobe/Tokyo/Yokohama
・Exploring cooperation with other companies in development/operation of properties
・Now carrying out a handoff of know-how on operation of Ebisu Ryokan
・Plan to additionally acquire and newly develop one or two Japanese-style hotels/hotels (30-50 guest rooms)

Future plan of Ebisu Ryokan (hotel business)
To secure profitability by operating the business in locations where there is synergy with thecruise business, with careful examination of the number of guest rooms and the scale offacilities and limitation on excessive investment

Kanazawa
Fukuoka

・locations in seaport towns having a high affinity with cruises
・Appropriate investment scale (small-medium sized hotels)・Facilities with themes and concepts (including “Japanism” and “Japanese inn”)

Kyoto
Osaka
Kobe

NagoyaYokohama

Tokyo

Plan to operate business by centering on the above items*The names of places are stated only as examples of seaport locations,and there is no plan or determination where the business will be
operated.

[Plan for new acquisition of properties]
1-2 properties[Current status]
Ebisu Ryokan (Kyoto)
9 guest rooms
Net sales of around 30-40
million yen+

Easy-to-access locations in seaport towns
such as
Fukuoka/Kanazawa/Kobe/Yokohama/Tokyo
30-50 guest rooms
Net sales of around 100-200 million yen perproperty

26

Status of investment destinations
The following shows counterparties of our existing investments (such as capital and business alliance) and details ofcooperation between the counterparties and us.
We will make venture investment (business) for the purpose of capital gain from the fiscal year ending July 2020.

(Tour metasearch/media)

Now preparing for IPO

Taking measures to increase inflow into “Best1 cruise” by posting many articles featuring tour guidance for cruise tours within the site as an alliancewith us for attracting customers(Foreign human resources/inbound media)Now preparing for IPO
Use referrals from Inbound Technology for foreign staff engaged in translation/operation of our multi-language site “cruisebookjapan”(SNS marketing/operation support consulting)

Now preparing for IPO

Make efforts to create know-how by assisting marketing measures on our Facebook and Instagram(Recruitment/talent recruiting)Start-up (seed round was completed)

A platform to make contacts and create incentive through smart-phone meetings with famous employees leading to hiring new recruits.
To use the company’s know-how and services as a part of our recruitment efforts(Subscription service of lunch)

Start-up (seed round was completed)

Subscription service of take-out lunch. Now expanding business by expanding the service area and cooperating with cloud kitchen, etc.
Used to collect information on the subscription model for real customers. We examine this to develop our tour subscription business.

27

Forecast of fiscal results for the fiscal year ending July 2020
•
•
•
•
•

Net sales are expected to be 2,775 million yen in light of orders received as of the end of July and solid market growthrate.
Measures on inbound tourists and new business, etc. are not reflected in figures of the plan stated below because of the
difficulty in forecasting its effect on net sales.
We will increase market share and transaction volume by accelerating investment (advertise/personnel expense) because
the market is in a growth phase.
The goal of net income is set to 102 million yen.
As the plan for the current period, we are eliminating uncertainty to the extent possible and feasibility is being repeatedly
examined carefully, looking back on results of the plan for the previous period.

*Figures in the medium-term plan will not be announced at this stage because of the difficulty in reflecting new business and M&A plans into the plan.
Fiscal year ending July 2020 (August 2019-July 2020)(thousands of yen)

Forecast of consolidated fiscal results
Plan for the current period

Composition
ratio

2,775,000

100.0％

Gross profit

583,000

Total SGA

Actual results for the previous period
Actual results Composition ratio

Growth rate

2,173,845

ー

127.7％

21.0％

452,67620.8%

128.8％

421,000

15.2％

318,200

14,6%132.3％

Advertisement

150,500

5.4％

104,0954.8%

144.6％

Personnel

153,500

5.5％

116,103

5.3%

132.2％

Other

117,000

4.2％

98,0004.5%

119.4％

Operating income

162,000

5.8％

134,475

6.2%

120.5%

Ordinary income

160,500

5.8％

131,263

6.0%

122.3％Net income

102,000

3.7％

84,2033.9%

121.1％Net sales28

Table of Contents

1. Management philosophy
2. Financial report-Summary of consolidated financial results
for the current fourth quarter-Summary of consolidated financial results
for the full year
-Trends in financial results-Trends in users of the website

3. Major efforts during the fiscal year ended
July 2019-A variety of campaigns-Best1’s tours-New PSA (preferred sales agent) contracts-CruiseBookJapan-Ebisu Ryokan

5. Future growth strategy-Summary of growth strategy-Policy for the current period-First hosting of chartered cruise-Start of escorted tours-Entry into inbound market-Strengthening of marketing-Hotel/Japanese-style hotel business-Investment/capital and business alliance-Forecast of financial results for the fiscal year
ending July 2020

6. Reference materials-Company overview-Service overview-Advantage of Bestone.com

4. Market environment-Population of cruise guests in Japan-Growth potential of cruise market-Inbound cruise market
29Company overview
Business
activities

Online travel agency specializing in
cruise tours/shipping tours

Location

16-6 Tomihisacho, Nishikura LK Bldg 2F,
Shinjuku, Tokyo, 162-0067, Japan

RegisterednumberCommissioner of Japan Tourism Agency
Registered Travel Agency No. 1980
Regular member of Japan Association ofTravel Agents

Capital stock

286,836,000 yen (capital reserves:
203,336,000 yen)

Established

September 5, 2005

Number of
employees

31 (including annual average number of
temporary employed persons)*As of the end of July 2019

Corporate history
September 2005

Bestone.com Co. Ltd. was established in Shoto, Shibuya-ku, Tokyo.

December 2005

Registered as Class III Tourism Agency in Tokyo (Travel Agency

Authorized by Governor of Tokyo No3-5693)
January 2006

Started operating the online travel reservation site “Best1 cruise”

July 2009Moved the headquarters to Roppongi 5 chome, Minato-ku, Tokyo
July 2013Moved the headquarters to Shinjuku 6 chome, Shinjuku-ku, Tokyo
September 2014

Opened the site specialized in cruises for honeymoon couples“HUNEMOON”

Representative
Director andPresident

Hidetaka Sawada

Directors

Takao Ogawa, Yohei Nomoto, Mika
Yoneyama and Yohei Takagi

Corporate
auditors

Siro Ogasa, Nobuhiro Nomura and Yoshinori
Takanashi

Subsidiaries

Fivestarcruise Inc.(wholly owned subsidiary)
Ebisu Ryokan(wholly owned subsidiary)

December 2014

Changed the registration to Class I Tourism Agency (Commissioner ofJapan Tourism Agency Registered Travel Agency No. 1980)
Started selling our planned tours
June 2015

Moved the headquarters to Shinjuku 5 chome, Shinjuku-ku, Tokyo

March 2016

Made Fivestarcruise Inc. a wholly owned subsidiary

August 2017

Moved the headquarters to Tomihisacho, Shinjuku-ku, Tokyo

November 2017

Entered into sales agreement with Adventure, Inc.

November 2017

Won online sector FIT (personal tours) performance award of Costa Award

November 2017

Won sales excellence award of Royal Caribbean International

April 2018Listed on Tokyo Stock Exchange Mothers market
May 2018Entered into sales agreement with NTT DoCoMo, Inc.
November 2018Won excellence sales award of Royal Caribbean International for the second
consecutive year
December 2018Made Ebisu Ryokan a consolidated subsidiary30

Summary of services (operating sites)
Our group operate as an online travel agency specializing in cruise tours “Best1 cruise” offering reasonablecruise tours, “HUNEMOON” targeting honeymoon couples, and also our subsidiary site “Fivestarcruise Inc.”
specializing in luxury ships.

Best1 cruise (main site)

One of the largest
sites in Japan interms of number of
products

Huge information
volumeWord-of-mouth
ranking

Possible to makereservations at any
hours

Search/comparison
Reservation function

This is a specialized site for searching and reserving boat tickets for cruise ships andpackaged tours online. On the site, it is possible to reserve tours offered by affiliatedtravel agencies, in addition to boat tickets and our planned products, and 26,000 or morecourses are covered. The site supports PCs and smart phones.
It is increasing users with monthly PVs of 1 million and monthly UUs of 200,000.

“cruisebookjapan.com”
Multi-language support website for searching andreserving cruise tours

To be released in December 2018

“Cruiseee!”
One of the largest sites in Japan in terms ofthe number of tour courses posted

Smartphone application

HUNEMOON (the site dedicated to cruises for honeymoon couples)
We implement marketing for the site as a site
different from Best1cruise, approaching honeymoon
couples who were not initially looking at cruises.

Japanese
EnglishChinese (simplified)Taiwanese (traditional)
KoreanIndonesianThai
Supporting 7
languages!

Popularity ranking
Number of wordof-mouth
One of the top
applications inJapan!

Fivestarcruise (wholly owned subsidiary)
A travel agency dedicated to luxury ships
It has a product lineup specializing in luxury ships andsuite rooms of casual ships for the wealthy andseniors.

31

Online platform of cruise tours
The main site “Best1 cruise” is the cruise reservation platform with the largest transaction volume of cruise
products (the number of cruise ships and courses) in Japan.
Posting of, (i) “boat tickets” of cruises departing from and arriving in local spots, (ii) Best1’s own tours with
air tickets and escorted tours and (iii) cruise tours offered by affiliated travel agents, makes it possible to do
one-stop consideration of all types of cruise tours.

The largest cruise search/reservation platform in Japan
Largest in Japan
More than 60
shipping
companies
26,000 courses

1,000,000
PVs/M
200,000
UUs/M

The site where global cruise tickets are the most available in Japan.

+
Best1’s own tours+
Possible to implement one-stop comparison/reservation of tours also offered by affiliated travel agencies
32

Strength of web (API/system linkage)・The information about the currently vacant cabins of cruise ships
around the world is linked on the system, and the web page is also
automatically created.

・We have alliances with almost all casual cruise ships and haveincreased alliances with premium and luxury cruise ships year byyear.
Affiliated shipping companies

CompanyA

Company
B

CompanyC

Our website[Only one website in Japan!]
Reflect vacant cabins and price information in real time and post them in our
unified format

CompanyA
Company
B

CompanyC

Start month

Celebrity Cruises (United States)

July 2016

Royal Caribbean International (United States)

July 2016

Azamara Cruises (United States)

July 2016

Pullmantur Cruises (Spain)

June 2016

Costa Cruises (Italy)

September 2016

MSC Cruises (Italy)

September 2016

Norwegian Cruise Line (United States)

September 2016

Carnival Cruise (United States)

February 2017

Celestyal Cruises (Greece)

May 2017

Silversea Cruises

May 2018

Windstar Cruises

July 2018

Compagnie du Ponant

March 2019

Oceania Cruises

August 201933

Ability to give hospitality/make suggestions
There are many guests taking cruise tours for the first time. Therefore, there are few guests who search andreserve cruise tours and complete procedures up to the credit card payment without asking questions. It is
required that we give hospitality and guidance, using our expertise.
Quality of
hospitality

Give friendly, polite and concise hospitality precisely because it’s non-face-to-face communication“I don’t know how to search”“I selected three candidates, but I can’t
determine which to choose”“How much is the child fee?”“What is the dress code?”
Necessary to make a variety ofconfirmations for reservation︕

Professional
operators
Implement search on Best1 and make an online reservation because I am selecting a tour by myself (about
25%)

34

Disclaimers and notes on forward-looking statements

Disclaimers
 The material was prepared by Bestone.com Co. Ltd. (hereinafter called the “Company”) to serve as a reference for shareholders
with the aim of obtaining understanding about the current status of the Company.
 Descriptions herein are based on economic/social conditions generally recognized as of the date of preparation and certain
assumptions the Company thinks rational, but they may be changed without notice for reasons such as changes in the businessenvironment.
 Descriptions herein represent the Company’s judgments as of preparing the material. In preparing the material, the Company has
paid due attention. But the Company makes no guarantee or promises about the accuracy or completeness of the information andmakes no expressions or guarantee about the descriptions.

Notes on forward-looking statements
 The material and information provided in this announcement include so called forward-looking statements. They are based onprospect, forecast and assumptions with risks as of now, and they include the uncertainty which may cause results different fromthese descriptions.
 These risks and uncertainty include the general conditions of industry and general domestic and global economic conditions such as
market conditions, interest rates and fluctuations in currency exchange rates.
 The Company assumes no obligation for updating/amending the forward-looking statements included in this announcement even if
there will be new information/future events.
35