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Presentation Material:

Announcement of FY 2017 Year-End Results
May 17, 2018

0

Ⅰ. Results Outline

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

2018/32017/3(Actual Results)

Net Sales

2018/3(Actual Results)

Change From
Prev. Period(Revised Forecast)107,386

113,661△5.5％

110,300

Operating
Income398

1,989△79.9％

1,400

Ordinary
Incom

418

1,795

△76.7％

1,300

Profit attributableto ownersof parent

49

1,339

△96.3％

700

1.34yeｎ33.55yeｎ△96.0％

19.13yen

Net Income
Per Share＊Revised Forecast : Announced November 1, 20172

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

113.66107.36Net Sales△6.27 billion yen

76.69

71.93

Cost of Sales（67.5）（67.0）△4.75 billion yen
Cost of Sales Ratio

△0.5％
36.97
(32.5)

35.45(33.0)
Gross Profit0

2017/3

2018/3△1.52 billion yen【Main Increase/Decrease Factors】●System Kitchens△ 5,050 million yen●System Bathrooms△ 910 million yen●Washstands△ 210 million yen●Decrease Due to Decreased Earnings△ 4,230 million yen●Decrease Due to Decreased Cost of Sales Ratio△ 520 million yen●Increase in S.S., CLEANLADY Cost Ratio＋ 0.62 points●Increase in RAKUERA Cost Ratio＋ 0.05 points●Decrease in System Bathrooms Cost Ratio△ 0.14 points●Raw Materials, Cost Reduction etc.
△ 1.03 points●Decrease Due to Decreased in Net Sales△ 2,040 million yen●Increase in Gross Profit Ratio＋ 520 million yen

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

38, 000

36.97

35.45

【 Main Increase/Decrease Factors 】

Gross Profit△1.52 billion yen
SGA Expenses

34.98

35.05

（30.8）（32.6）＋0.07 billion yen

18, 000

SGA Ratio＋1.8％-2, 000

1.99
（1.8）

0.39
（0.4）

2016/32017/3Operating Income●Sales Expenses●Distribution Expenses●Personnel Expenses●Administrative Expenses＋ 330 million yen△ 150 million yen△ 70 million yen△40 million yen●Sales Expenses●Distribution Expenses●Personnel Expenses●Administrative Expenses＋ 0.4 points＋ 0.2 points＋ 0.7 points＋ 0.5 points●Decrease in Gross Profit●Decrease in SGA Expenses△ 1,520 million yen△ 70 million yen△1.59 billion yen
43. Sales Composition (1) By Segment (Consolidated)

Kitchen Equipment

Bathtubs & Washstands

Other【2018/3】(Units: millions of yen)

113,661

120,000

107,386

6,348

Other

111,000
5.8％
6,484

6,652
17,976

100,000

17, 304

Bathtubs &Washstands

6.2％

15.7％
78.1％

15.6％

Kitchen Equipment

16,86080,00060,000【2017/3】
89, 336

83,87387,212

78.6％

Other

40,000Bathtubs &Washstands
20,000

5.6％

15.8％
78.6％
Kitchen Equipment0

2017/3

2018/3

2019/3(Forecast)5

3. Sales Composition (2) By Sales Route (Non-Consolidated)

4.8％

D irec t-S ales(Con domin iu m own ers)

5.1％

5.1％

16.1％

16.0％

16.3％

79.1％

78.9％

78.6％

5.1％
16.0％

5.1％
15.9％

Hou sin g Con stru ctors
G eneral Routes(Con stru ction Con tractors - Home Ren ovation )

78.9％

79.0％

0

2018/3 2019/3
2017/3(Forecast)
2015/3 2016/3

6

4. Consolidated Balance Sheet Summary – 1/2【Assets】【Increased/Decreased Values (Rates)】【Main Increase/Decrease Factors】(Units: billions of yen)

84.37

Current Assets

47.31

83.90

46.17

Total Assets△0.47 billion yen
Cash and Deposits
Notes and Accounts Receivable
Electronically Recorded
Monetary Claims●Current Assets●Fixed Assets△ 2,430 million yen+ 1,960 million yen●Cash and Deposits△ 1,190 million yen●Notes and Accounts Receivable△ 2,730 million yen●Electronically Recorded
Monetary Claims+ 2,780 million yen△1.14 billion yen
Inventory
2.22
3.97

2.11
2.78

●Decrease in Goods and Products△0.11 billion yen
Other Current Assets△ 150 million yen● Decrease in Securities△ 990 million yen●Tangible Fixed Assets●Intangible Fixed Assets●Securities Investments＋840 million yen△ 150 million yen＋1,270 million yen△1.19 billion yen
30.87

32.83

Fixed Assets＋1.96 billion yen
2017/3

2018/37

4. Consolidated Balance Sheet Summary – 2/2【Liabilities / Net assets】
100【 Increased/Decreased Values 】【Primary Reasons for Increase/Decrease】(Units: billions of yen)

84.37

23.28

8.47

83.90

24.34

Current Liabilities●Trade Accounts Payable, Other Accounts Payable△ 480 million yen＋ 1,910 million yen●Short-term loans payable＋1.05 billion yen●Current portion of long-term loans payable△ 630 million yen●Electronically Recorded Monetary Claims＋ 1,010 million yen●Income taxes payable△ 310 million yen

Long-Term Liabilities●Lease obligations●Long-term loans payable

7.21

50

△1.26 billion yen
52.61＋ 1,350 million yen△ 2,670 million yen

52.35

Total Net Assets△0.26 billion yen●Net Income●Dividends●Valuation Difference on
Available-for-Sale Securities＋ 50 million yen△ 730 million yen＋ 450 million yen

0

2017/3

2018/38

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

Year-End Cash & Cash Equivalents Balance

30. 0025. 00

21.89
20.20

△16.9

20. 00

15. 00

10. 00

5. 00

3.68

△7.5
0. 00

△18.1

△ 0.49△ 3.052.93＋7.1△ 2.34 △ 2.30

△ 5. 00△ 10. 00

2017/3

2018/39

6. Capital Investments (Consolidated)
R&D Costs

Capital Investment

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

FY 2017 Results

6.0

5.53

① Production-Related
5.0② Showroom Renovation

960 million yen③ Information Investment

840 million yen③ Others

170 million yen

4.00

3.82

4.0

1,080 million yen

3.66

3.58

3.55

3.05

FY 2018 Plan

3.0

2.41

① Production-Related

1,260 million yen② Operations-Related

1,630 million yen③ Information-Related

1,010 million yen

2.0

1.15

1.13

1.19

1.15

1.0

④ Others
0.0

2016/32017/3

2018/3

100 million yen

2019/3(Forecast)10

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

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

100

Monetary Value
Volume(Thousands of Sets)

400

Demand Trends and Market Share
1,400

89.2
80

82.5 80.7 80.5

77.3

75.4

1,200

78.5
300

60

244

244

217

233

232

222

（％）

30

1,227 1,200 1,204 1,207 1,242
1,121

25

1,000

800

220

Demand Volume
Cleanup Share(Thousands of Sets)

19.4

19.9

20.3

20

19.4

19.3
17.8

200

15
600

40

10

100

400

20

5

200

0

0

13/3 14/3

15/3

16/3 17/3

18/3 19/3

0

0

13/3

14/3

15/3

16/3

17/3

18/3

（Forecast）

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)

20.0

(Thousands of Sets)

50

Demand Trends and Market Share
1,000

17.7
15.8
15.0

（％）

10

839

43
14.0 13.7

38

Demand Volume
Cleanup Share(Thousands of Sets)

34

33

13.1
31

10.0

40

800

30

600

745

739

754

757

752

8

12.2 12.5
29

6

30
5.1
20

5.1
4.6

400

4.4

4.1

4

3.9

5.0

0.0

13/3

14/3

15/3

16/3

17/3

18/3

19/3

10

200

2

0

0

0

13/3

14/3

15/3

16/3

17/3

18/3

（Forecast）

12

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

Washstands/Vanities
Demand Volume
Cleanup Share(Units: billions of yen)

6.0

Demand Trends and Market Share(Thousands of Sets)

150

2,000

1,828

5.4
5.1
4.8

5.0

4.0

109

Demand Volume
Cleanup Share(Thousands of Sets)

4.6

4.7

1,768

（％）

1,804 1,833 1,844

10

1,655

4.5

4.5

120

1,600

90

1,200

8

109
93

90

91

3.0

87

6.6

6

6.0

87

5.3

5.0

5.0

4.7

60

800

30

400

2

0

0

0

4

2.0

1.0

0.0

13/3

14/3

15/3

16/3

17/3

18/3

19/3

13/3

14/3

15/3

16/3

17/3

18/3

（Forecast）

13

8. Showrooms And Visitor Numbers(Locations)

Number of Showrooms(Thousands of groups)

Number of Visitors

600

180

539
510
150

120

456

109

483

471
451

444

448

468

436

456

459

500

400

105

105

102

102

102

102

101

102

102

103

103

90

300

60

200

30

100

0

0

08/3

09/3

10/3

11/3

12/3

13/3

14/3

15/3

16/3

17/3

18/3

19/3
（Forecast）

14

9. 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

111,000＋3.4％

Operating
Income398

1,000＋150.7％

0.4％

0.9％

-

Ordinary
Income418

950＋127.1％

Ordinary Income
Margin

0.4％

0.9％

-

Profit attributable toowners of parent

49

400

＋713.9％

0.0％

0.4％

-

Operating Income
MarginNet Income
Margin15

II. Future Strategy

Progress of Medium-Term Management Plan andBasic Policy for FY2018

16

1. Activities Implemented and Review of 2015 Medium-Term Management Plan (2015 to 2017)

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 in renovation 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.

● 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.

Provide new value by utilizing the strengths of a dedicated kitchen manufacturer● Capture overseas markets.

Growthstrategies-

Establish a successful model for overseas, while ascertaining market conditions.

● Create new businesses.
-

Create new business operations that are expected to grow, while utilizing our strengths.

ü Target sales volume for mid to high-end products were unattained, although popular products were in a steady trend. The product mix is deteriorating, but
the gross margin ratio is improving for individual products.
ü Entry to the high-end market was launched according to plan, with implementations to take place for the Medium-Term Management Plan, during the next
fiscal term.
ü Action has been taken to establish a framework, called for by the Medium-Term Management Plan, but efforts have not yet achieved profit structure reforms.

17

2. Outline of 2018 Medium-term Management Plan (2018 to 2020)(1) - Vision“Reformation to transform into ‘Cleanup’
the 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”.

18

2. Outline of 2018 Medium-term Management Plan (2018 to 2020)(2) - Commitments and Framework

Commemorating the 70th anniversary of our establishment and 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.
193. Outline of 2018 Medium-term Management Plan (2018 to 2020)(3) - Orientation and Domain of Strategies
Products and services
Existing

New
Existing

Customers and markets[New product &service development]･ Maintenance business･ EC businessNew

EC business
Entry into new business areas[Diversification]･ Cross industry business･ Web business･ M&A business alliances[Market penetration][New market development]･ Increasing shares in mid tohigh-end markets･ Expand overseas business
operations･ Extend business to affluent

Premium productsLine of mid to high-end products

Overseas production
conceptü Start with the implementation of our basic concept from the 2015 Medium-Term Business Plan and continue
on to evaluations.
ü Deepen the grip on business in the existing fields, while taking on the challenge of entering into new fields.
20

4. Specific Measures for “2018 Medium-Term Management Plan”(1) - Reformation of Product Line-up

Reform the product line in preparation for full-scale entry into high and super high-end markets“High Class”(Italian premium kitchens)Market (2)<Estimated market size>

Approximately

7,000 sets per year

“Made to order /semi-made-to-order”(Houses)Advancement into themarket for the affluent

Market (1)Approximately

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

Existing business domains
21

4. Specific Measures for “2018 Medium-Term Management Plan”(2) - Activities Implemented for Super High-end Market

Full-scale implementation of business for the affluent (Valcucine / PRIMITAGE)
Showroom of Valcucine, an Italian premium kitchen brand.
The first domestic showroom “Valcucine Tokyo”
opened in December 2017.

Artematica

Made to order for upscale houses

Genius Loci

● Premium kitchens made to satisfy the needs of the affluent.
● Sophisticated designs and innovations, demanded by premium-oriented customers.
● The site receives predominantly house manufacturers and developers, exclusively byappointment, at the preset the time.
[Summary of Valcucine]● Business founded in Pordenone in Italy in 1980.
● Developer of premium kitchens for affluent clientele around the world.
● Famous as an innovative and environmentally friendly manufacturer● Sales locations operate in 54 countries around the world.
● A transaction agreement with our company was concluded in September 2017.
.

Semi-made-to-order kitchen, withsophisticated designs, cater to every need ofeach individual customer. Proposals offeredprimarily to house manufacturing customers.

22

4. Specific Measures for “2018 Medium-Term Management Plan”(3) - Activities Implemented for High-end Market

The flagship model was upgraded to restore the market share.

From February 1, 2018

Based on the concept of “bringing the kitchen into the center of life”

Introduced as a “kitchen for enjoying arelaxed lifestyle”
Features of CENTRO

Center position design

CraftsmanshipA comfortable storage solution for reducing
any wasted space and movement, is
proposed by further evolving the concept of
categorizing and sorting cooking utensils andspices according to the frequency of use andworkability (zone concept).

The apex of Cleanup technology is mademanually by craftsman with a desire tocreate products that customers will “usefor a long time”.

1

2“Cube Design” harmoniously
blends into interior decor

3

The overall kitchen is completed in aflush finish, comprised of linear and flat
designs to better fit in a living space.

23

4. Specific Measures for “2018 Medium-Term Management Plan”(3) - Activities Implemented for High-end Market

A full model change of hygienic products to reposition for the high-end market.

From February 1, 2018

Further evolution of beauty and functionality!
The proposal of a safe and comfortable sink space, the “New TIARIS.”

Features of TIARIS

Center position design

1

The product not only features the beautyof a left and right symmetry, but also
improves the paths of user movements,
due to the center position design.

“Cube Design” harmoniously
blends into interior decor

Proposition of secure andsafe space

Unnecessary curves were removed, much
like with the CENTRO and the product was
created with a flush and simple finish witha linear and flat design, to better fit into
areas and produce a comfortable space.

Risks, such as tumbling and heat shockwithin the sink area, have been reduced
to suggest a safe and comfortablesink space.

2

3

24

4. Specific Measures for “2018 Medium-Term Management Plan”(4) - Enhancement of Customer Contacts

Further enhancing value provided at showrooms.
Famous saloneses recruited as “CENTRO Ambassadors”.
Highest grade fitted kitchen
Conveys the attractive featuresof “CENTRO”

New establishments and the relocation of showrooms to promotesales strategies.
Relocation

Utsunomiya Showroom
Utsunomiya City, Tochigi Prefecture(Opened May 27, 2017)

Kitchen studios that alsooffer spatial proposals, tohold a variety of community
based events.

Proposing dining
space using Oya tuff
stone, which is a
special product of thelocal area.

http://dreamiaclub.jp/centro.html
Principal activities(1) Coordinate “CENTRO” exhibits at Kitchen Town Tokyo.
(2) Hold and sponsor events at Kitchen Town Tokyo.
(3) Relay the details of a “CENTRO Lifestyle” on the official blog site.
(4) Communicate information at classes presided over by the respective individuals and through SNS.

New installation● A total proposal that provokes
images of living after renovations.

The largest salonese information site in Japan

Edogawa Showroom
Blog site: http://centro.mcre.jp/blog/

Operation: Dreamia Club Executive Office

An urban showroom with afocus on condominium
renovations.

Edogawa-ku, Tokyo(Opened September 15, 2017)● A spatial exhibition space that offers
an image of a condominium unit.

25

4. Specific Measures for “2018 Medium-Term Management Plan”(4) - Enhancement of Customer Contacts

Further enhancing the value provided at showrooms.
Proposing a lifestyle with graceful new uniforms

Promoting the acquisition of specialized knowledge by employees

The uniforms of showroom advisors
upgraded since April

Showroom advisors wear a license badge

Original “Cleanup” button

License badge clearly indicatingthat the wearer is a qualified employee

Qualification nameTwo types of corsage, with elegant curves,
are available

KitchenSpecialist● A design featuring both decorative features that take into consideration
the latest trends and functionality.
Freely mix and match for a total of 12 coordinated combinations.

Sorting and Storing
Advisor● One-piece dresses are also available to be worn as maternity wear, withadjustable sizes, so pregnant advisors can continue to work with peaceof mind.

Shokuiku Food
Education Instructor

Class

Purposes and descriptions―

An individual with specialist knowledge, together withcustomers, formulates the proposals of kitchen space
configurations that meet the expectations truly desired bycustomers.

Class 1
Class 2

Class 3

An individual capable of offering proposals for a more
comfortable and abundant lifestyle, by reviewing how peopleinteract with materials in their daily lives.
An individual who understands the importance of foodeducation and works on improving culinary techniques toprovide food education for day-to-day living, while
disseminating knowledge to other people nearby.

26

4. 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

DalianBeijing・ Advancement into the market will be achieved through a collaboration with a house manufacturer.
Kitchens and associated products are to be supplied to the four districts of Shenyang, Suzhou, Wuxi and Taicang.

Korea
Tokyo

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

Shanghai● Taiwan・ 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
Thailand● 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.

Malaysia
Singapore● Other Asian Countries
・Distributors are to be established at principal nations to implement sales activities, intended primarily
for those with high income brackets.

Condominium in Kuala Lumpur, Malaysia

Okura Condominium, China

27

4. Specific Measures for “2018 Medium-Term Management Plan”(6) - Activities Implemented for EC business Operations

The launch of an EC business, as a new sales channel.
An EC ( Online
Shopping ) site is to berevamped and launched.
Aiming to further expand
the market!
http://style.cleanup.jp/

Top page of online shopping site →● Navigation function● Substantial columns

Visitors can click on products tovisually select the intended
products, using the “Navigation
Function”, for more enjoyableinternet shopping!

Hints for making kitchen life
pleasant and information for dayto-day living are delivered
through these columns.
Parts and products, linked withthe subjects of articles, are madeavailable for purchase!
28

5. CSR Programs (1) - Welfare for Disabled Persons

The tenth Anniversary of Cleanup Heartful Corporation.
Ten years of activities aimed at “self-reliance” and “inclusiveness”.
[Management philosophy]“Create thoughtful value for society, as acorporation that symbolizes a whole range of
CSR activities of the Cleanup Group.”[Principal activities]● Facility management services for the Cleanup Group.
● Clerical operations, such as data entry.
● Management of “Kurio-no Pan-ya” bakery and the like.

The first anniversary was at a location that informed the residents of the local
community about the “lavish food culture”!
(November 1, 2017)

Participation in a local elementary school
event, by providing freshly baked breads,
was in cooperation with members of the
PTA.

A scene from an exhibition and the sale offreshly baked waffles was in commemoration of
the first anniversary.

29

5. CSR Programs(2) - Support for Disaster Recovery and Personnel Training

Cleanup Foundation - Contributing to the Training of Personnel Who Will Maintain the Local Communities.
The “Cleanup Foundation”, established in 2012, has been continuously providing support for restorations and thetraining of young people, who will be maintaining the local communities in Fukushima Prefecture. Scholarships were
provided to 40 people in FY2017.

◎ Aiming to provide restoration support and the training of young people in Fukushima Prefecture.
Scholarshipprojects

Sports promotion
projects

R&D promotion
projects

30