Interim Report
April 1, 2019 – September 30, 2019

Daitobo Co., Ltd.
Securities code: 3202

since 1896

200thManagement’s message– Get Ahead of the Future –Please allow me to begin by extending my heartfelt gratitude toour shareholders for their continued patronage and support.
I would like to make a brief statement on our performance forthe first half of the 200th fiscal year (from April 1, 2019 to
September 30, 2019).
Firstly, I would like to take this opportunity to express mysincerest appreciation to all our shareholders for enabling us toreach the milestone of our 200th fiscal year.
During the first half of the fiscal year ending March 31, 2020,
the Japanese economy continued in a moderate recovery trend
overall, as evidenced by an upswing in consumption resulting
from an upsurge in demand prior to the consumption tax hikeand continued improvement in the employment environment,
despite deteriorating business sentiment in the manufacturingindustry against a backdrop of uncertainties overseas, including
the prolonged trade friction between the United States andChina.
Amid such conditions, the Group earnestly worked on
measures in the “Get Ahead of the Future” Mid-termManagement Policy launched in fiscal 2018, with the aim ofachieving sustainable growth and enhancing corporate value
over the mid-to long-term based on our corporate philosophy of
fostering a spirit of enterprise and of social contribution byhelping others through self-help.

Specifically, with regard to “Pillar strategy 1: propriety
initiatives aimed at investment for growth, and maintenanceand renewal investment” set forth in the Mid-term ManagementPolicy, the expansion of floor space and renovation of the SUN
TO MOON Kakitagawa (the 4th stage development), one of theleading commercial facilities in Shizuoka Prefecture, wascompleted largely on schedule and handed over in September
this year. At present, as we announced in July this year, we are
steadily working on preparations with the aim of opening thefacility in March 2020. Once it is fully operating, we expect it to
be one of the country’s leading commercial facilities with anannual 10 million customers and transaction volume of around¥27 billion.
In addition, with regard to “Pillar strategy 2: expansion ofbusiness scale and enhancement of profitability,” the partial
acquisition of the health care business that we implemented at
the end of the prior fiscal year is starting to make a contribution.
Net sales in the health care business segment for the first halfof the fiscal year almost doubled, increasing by approximately
80% year-on-year. In addition, operating income in the healthcare business segment posted a first-half profit for the first timein five fiscal years. Going forward, we will continue to increase
synergic benefits in order to further improve our businessperformance.

Consolidated financial highlights
Net sales

Operating income¥2,385 million

Up 11.1% year-on-year
Down 1.4% from business results forecast■ First half ■ Full year (Millions of yen)

5,400
4,496

¥249 million■ First half ■ Full year (Millions of yen)460

Up 32.2% year-on-year
Up 27.8% from business results forecast
327
249

2,147

199th fiscal
year results

1

2,420

2,385

200th fiscal
year forecast

200th fiscal
year results

199th fiscal
year results

200th fiscal
year forecast

188

195

199th fiscal
year results

200th fiscal
year forecast

200th fiscal
year results

199th fiscal
year results200th fiscalyear forecast

Furthermore, we are continuing reform efforts in each section,
including systems, finance, and human resources, based on eachstrategy contained in the Mid-term Management Policy, and are
gradually seeing results.

<Business results for the first half>

In the first half of the fiscal year under review, net sales
increased to ¥2,385 million (up 11.1% year-on-year), partly due
to increased sales resulting from the acquisition of the healthcare business. Operating income increased to ¥249 million (up32.2% year-on-year), partly due to an improved gross margin
ratio and the absence of the impact from the recording of
one-time expenses pertaining to investment in the commercial
property business in the same period of the prior fiscal year.
Ordinary income, which takes into account non-operating
expenses such as interest expenses, increased to ¥152 million(up 38.3% year-on-year). Profit attributable to owners of parent,
which takes into account tax expenses such as income tax, roseto ¥148 million (up 3.2% year-on-year), resulting in a year-onyear increase in sales and profits.

Kazuhiro Yamauchi

President and Representative Director

Ordinary income

Profit attributable to owners of parent¥152 million■ First half ■ Full year (Millions of yen)

Up 38.3% year-on-year
Up 79.0% from business results forecast

236

240

¥148 million■ First half ■ Full year (Millions of yen)

Up 3.2% year-on-year
Up 85.8% from business results forecast

294
230

152
85

199th fiscal
year results

148

144

110

200th fiscal
year forecast

80

200th fiscal
year results

199th fiscal
year results

200th fiscal
year forecast

199th fiscal
year results

200th fiscal
year forecast

200th fiscalyear results

199th fiscal
year results

200th fiscal
year forecast

Notes: Forecasts shown above are based on the materials available as of the date of publication of this report, and actual results may differ from those forecasts due to various factors.

2

The operating results by reportable segments are summarized as follows:(Commercial property business)
In the commercial property business, facility transaction volumes at SUN
TO MOON Kakitagawa, one of the leading commercial facilities in Shizuoka
Prefecture, remained steady, partly due to events during Golden Week andthe summer vacation as well as the upsurge in demand at mass consumer
electronics stores prior to the consumption tax hike, with net sales
showing an increase year-on-year.
As a result, net sales in the commercial property business totaled¥1,193 million (up 0.7% year-on-year), and operating income amounted to¥495 million (up 8.5% year-on-year), representing year-on-year increases insales and profits.

(Health care business)
In both the health care business section and the general bed and bedding
section, net sales increased year-on-year as the result of the businessacquisition at the end of the prior fiscal year.
As a result, net sales in the health care business increased to ¥651
million (up 80.2% year-on-year), and operating income rose to ¥1 million(operating loss of ¥13 million in the same period of the prior fiscal year),marking first-half profit for the first time in five fiscal years and year-onyear increases in sales and profits.

(Textile and apparel business)
Net sales in the apparel section decreased year-on-year, partly due to theharsh condition of the domestic apparel market. In the uniform section, netsales increased year-on-year due to the growth in sales to the public sector.
As a result, although net sales in the textile and apparel businessdecreased to ¥540 million (down 10.0% year-on-year), operating loss
improved year-on-year to ¥1 million (operating loss of ¥14 million in thesame period of the prior fiscal year), thanks to improved profitability.

Commercial property businessNet sales

Operating income(Millions of yen)

1,193

457

495

199th fiscal year

200th fiscal year

199th fiscal year

200th fiscal year

Health care businessNet sales(Millions of yen)

Operating income(Millions of yen)

651
1361
(13)
199th fiscal year

200th fiscal year

199th fiscal year

200th fiscal year

Textile and apparel businessNet sales
599(Millions of yen)

Operating income(Millions of yen)

540
(1)
(14)

199th fiscal year

3

(Millions of yen)

1,185

200th fiscal year

199th fiscal year

200th fiscal yearIn conclusion 
Taking the opportunities presented by our 125th anniversary which we will celebrate in 2020, the Group will further accelerate its
initiatives on a new stage with the strategies set forth in the “Get Ahead of the Future” Mid-term Management Policy.
We would like to ask our shareholders for their continued support and guidance.

TOPICS1 Wadatetsu Company Starts Up in the Health Care Business

In March 2019, the Company took over the health care business ofthe former WATEX Co., Ltd., a cloth and bedding wholesaler in Osakawith over 100 years’ history. Based on its sales capabilities with astrong awareness of health care, the acquired business is extremelycomplementary in such areas as regionality and product lineup
because: 1) its main territory is west Japan, which is a weaker area
for the Company; 2) it handles functional health-related materials;
and 3) it has many wholesaling departments and sectors close toretailing, which is an area the Company intends to strengthen. Since
the acquisition, business results have been progressing as
anticipated and the business is contributing to increased sales andprofits in the Company’s health care business.
In addition, we are also progressing with new productdevelopment and working on new themes, including participation inexhibitions at Tokyo Big Sight.

4TOPICS

2Special

Kazuhiro Yamauchi
President and Representative Director

The Company’s health care business focuses on sleep-related business thatprovides good-quality sleep, and we expect net sales to double compared with theprior fiscal year, partly due to the business acquisition. We are also making efforts
to obtain health care-related qualifications within the company in response to thegrowing presence of the health care business section. Under these circumstances,Firstly, in fact, many of our employees have taken
the Health Management Proficiency Test thisfiscal year, mainly in the Daitobo Group’s health carebusiness section, and in the next fiscal year we arethinking about applying for the group test as a company.
As the Chief Executive, can you tell us briefly about HealthManagement Proficiency?
YamauchiHealth Management Proficiency started out in1992 as a general instructor qualification for
health managers. Against the backdrop of the subsequent
increase in health awareness, and with the sponsorship ofthe Ministry of Education, Culture, Sports, Science andTechnology, today over 65,000 people have been certified
under Health Management Proficiency. The successful
candidates are contributing to society by widely utilizing
the accurate knowledge they have concerning healthamong corporate entities, schools, and local governments.
Yasumura

Yamauchi

5I think it’s wonderful that as we enter an era of adeclining birthrate and aging population, thenumber of people who are learning accurate knowledge
about health through the proficiency test is increasing, andthat there are a growing number of people who will makea social contribution not only to themselves but also to theworld and to people. In response to these types of social
needs, the health care business section of the Daitobo
Group is also trying to provide customers with correct
information about health while expanding its productrange with a focus on products related to sleep. I thinkthat Health Management Proficiency is an extremely
useful tool to increase such knowledge.
I’m happy to hear that it is also being used forwork. By the way, is the Daitobo Group also
working extensively on health management?
Yasumura

Actually this year the Company was awarded oneof the few “certifications of health management”
under the general health insurance system in Tokyo. All
executives and employees understand that this is not justabout each person’s physical and mental health but thatYamauchi

intervie w
Jump up 2020
～ 125 周年へ～

Reiko Yasumura
Chief Executive, Health Management Proficiency Association
Managing Director, Japanese Association of Preventive
Medicine for Adult Disease

we have invited Ms. Reiko Yasumura, Chief Executive of the HealthManagement Proficiency Association, and Managing Director of theJapanese Association of Preventive Medicine for Adult Disease totalk to Kazuhiro Yamauchi, President and Representative Director,
about the theme of “health management.”

the company organization was recognized for engaging indaily operations while maintaining a healthy condition asa collective body for individuals’ health. As a company
operating a health care business, I think this is something
for which we can be proud.
The concept of health care is a broad one,covering areas from medical care to body careand sports, but I think that it is important in terms ofhealth management to care for the mind and body prior tosuffering an illness. “Sleep” is an extremely importantfactor from this perspective. I think the fact that theDaitobo Group is engaged in health care with “sleep” as akeyword can be effective also from the perspective ofpreventing lifestyle-related diseases. I sincerely hope thatyou will continue to contribute to the creation of a healthy
and rewarding lifestyle in the age of a declining birthrateand aging population through the health care business.
Yasumura

Yamauchi

Reiko Yasumura Profile

Chief Executive, Health Management Proficiency Association
Managing Director, Japanese Association of Preventive Medicine for Adult Disease
Executive Secretary, Ministry of Education, Culture, Sports, Science and Technology’s
National Council for the “Early to Bed, Early to Rise, and Don’t Forget Your Breakfast”
Campaign
Supervising Pharmacist
Active in promotion activities for “Health Management Proficiency” sponsored by the
Ministry of Education, Culture, Sports, Science and Technology, and as a health lecturer.

2020, the year of the Tokyo Olympics and the Tokyo
Paralympics, and we aim to contribute to the healthy andrewarding lifestyles of an even greater number of people
through the health care business. Thank you very much foryour time today.

The Daitobo Group intends to make a further leap
forward as we celebrate our 125th anniversary in6

TOPICS

3 New Building “SUN TO MOON Oasis” Opening in March

2020 at the SUN TO MOON Kakitagawa Commercial Facility

SUN TO MOON Kakitagawa is a wide-area commercial complex opened in 1997 in a prime location next to Kakitagawa River, which is one of Japan’s
three largest clear rivers, with views of Mt. Fuji. The Company is proceeding with expansion of floor space and renovation (the 4th stage development),and in October 2018 constructed an annex where we relocated and opened “SWEN,” a store for outdoor life supplies. Construction was largely
completed in September 2019, and we took possession of the new building, “SUN TO MOON Oasis,” a connecting bridge, and a new multi-story car park.
Opening is scheduled for mid-March 2020.

■ The facility concept is “Bridge to a Brighter Life.”

The new “SUN TO MOON Oasis” is a three-story building with approximately 7,000 m2 of tenanted floor space consisting of 31 stores. 14 of these stores
will be local stores with roots in the eastern part of Shizuoka Prefecture, and will offer products and services that closely match the area’s lifestyle, incollaboration with popular stores nationwide. The facility concept is “Bridge to a Brighter Life.” The building will be connected to the main building andannex, and our aim is to add color to the daily lives of local customers and to be a bridge leading to a more vibrant life.
The outline of each floor is as follows:● 1F Library Café & Select Food

Centered around a bakery & café-style TSUTAYA BOOKSTORE, the first in the eastern part of Shizuoka Prefecture, this floor will feature a number of
unique stores that will add color to daily life, including specialty food retailers and bedding stores.
● 2F Restaurant Street & Select Goods
Here we present a full-fledged restaurant zone. This area will also consist of stores offering beauty services and fashion goods providing strong
support for everyday chic.
● 3F Kids & Variety
In addition to large-scale stores offering an extensive selection of kids’ & baby fashion and family casual fashion, this floor also features amusement
areas to support the child-raising generation.

Prime location with views of Mt. Fuji

7

The new “SUN TO MOON Oasis” building

Review of Financial Results
Consolidated balance sheetDescription(Thousands of yen)

End of the first half of
this fiscal year

End of the prior fiscalyear(as of September 30, 2019)(as of March 31, 2019)(Assets)
Current assets

3,472,601

3,053,350

Non-current assets

19,470,806

17,799,711

 roperty, plant andP
equipment

18,743,140

17,067,530

Intangible assets

197,318

204,276Investments and otherassets

530,347

527,904

22,943,407

20,853,062

Total assets(Liabilities)
Current liabilities

2,199,547

3,750,950

Non-current liabilities

16,281,334

12,793,693

Total liabilities

18,480,881

16,544,644(31,399)(180,029)

Capital stock

100,000

100,000

Retained earnings(121,617)(270,247)

Treasury shares(9,781)(9,781)

Accumulated othercomprehensive income

4,478,979

4,477,563

Stock acquisition rights

14,946

10,884

Total net assets

4,462,526

4,308,418

Total liabilities and net assets

22,943,407

20,853,062

Consolidated statement of income(Thousands of yen)

For the first half of
this fiscal year

For the first half ofthe prior fiscal year

Net sales

2,385,782

2,147,439

Cost of sales

1,685,039

1,564,930

Gross profit

700,742

582,509

Selling, general andadministrative expenses

451,577

394,068

Operating income

249,165

188,440

Non-operating income

4,621

7,046

Non-operating expenses

101,644

85,468

Ordinary income

152,141

110,018

Profit before income taxes

152,141

110,018

Income taxes-current

4,709

3,562

Income taxes-deferred(1,198)(37,546)

Profit148,630

144,002

Profit attributable to ownersof parent

148,630

144,002

Description(from April 1, 2019 to
September 30, 2019)(from April 1, 2018 toSeptember 30, 2018)(Net assets)
Shareholders’ equity

Consolidated statement of cash flows
Description

Cash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities
Effect of exchange rate change
on cash and cash equivalents
Net increase (decrease) incash and cash equivalents
Cash and cash equivalents atthe beginning of the period
Cash and cash equivalents at
the end of the period(Thousands of yen)

For the first half of
this fiscal year

For the first half ofthe prior fiscal year

171,413

23,645(1,596,184)(192,040)

1,705,816

189,982

(293)

(30)

280,751

21,557

1,725,283

1,777,319

2,006,034

1,798,876(from April 1, 2019 to
September 30, 2019)(from April 1, 2018 toSeptember 30, 2018)8Business fields
Commercial property business

Health care business

Daitobo’s commercial properties are the go-to place forpleasant lifestyles. We will offer enriched living space
based on our vision of “creating space that delights ourcustomers.”• Shopping malls

Textile and apparel businessIn response to the aging population and rising healthconsciousness, the Company supports the healthy andcomfortable life of customers with products drawing on ourproprietary technology. Our strength lies in the hightechnological ability of the Group’s domestic production bases.

Daitobo will satisfy the diverse needs of our customers,from apparel fashion to uniforms, based on its vision of“creating products that delight our customers.”• Health-promoting textile materials-related• Home-use medical devices • General bed and bedding• Health-promoting foodstuffs• Uniforms for both official and civilian users• Production-management type OEM operations• Knitwear planning

Members of the Board of Directors
President and Representative Director
Vice President and Representative Director
Director and Senior Executive Officer
Outside DirectorDirector(Audit and Supervisory Committee Member)

Kazuhiro Yamauchi
Toshiyasu Nomura
Shogo Mieda
Yasunobu SawadaYuji Kakuma

Outside Director

Haruki Iinuma

Outside Director

Takashi Kagami

Outside Director

Shusaku Okumura

Executive Officer
Executive Officer

Hiroshige Aoki
Wataru Iida

(Audit and Supervisory Committee Member)(Audit and Supervisory Committee Member)(Audit and Supervisory Committee Member)(Note 1) Messrs. Yasunobu Sawada, Haruki Iinuma, Takashi Kagami and Shusaku Okumura are Outside Directors (independent directors).
(Note 2) The Company has an Audit and Supervisory Committee which is composed of four (4) Audit and Supervisory Committee Members.

Wataru Iida Shogo Mieda Shusaku Okumura Takashi Kagami Kazuhiro Yamauchi Toshiyasu Nomura Yuji Kakuma Yasunobu Sawada Haruki Iinuma Hiroshige Aoki

9

Corporate Overview/Status of Shares (as of September 30, 2019)
Corporate Overview

Status of Shares

EstablishedFebruary 27, 1896

Total number of shares authorized to be issued

96,000,000 shares

Capital stock¥100,000,000

Total number of shares issued

30,000,000 shares

Total number of shareholders

11,642

Place of business
Head Office

6-1 Nihonbashihoncho 1-chome, Chuo-ku, Tokyo, Japan+81-3-6262-6565

Nagoya SalesDepartment

17-9 Honmachi 4-chome, Ichinomiya-shi, Aichi, Japan+81-586-23-4811

Wadatetsu
Company/Osaka
Sales Department

5-7 Honmachi 2-chome, Chuo-ku, Osaka, Japan+81-6-6267-6655 (Wadatetsu Company)+81-6-6262-8322 (Osaka Sales Department)Group companies

Daitobo Estate Co., Ltd. (Shizuoka)
Niigata Daitobo Co., Ltd. (Niigata)
DAITOBOSHOKU (SHANGHAI) CORPORATION (China)

Guide to Shareholder Benefits
1 Eligible shareholders
The program targets shareholders who own 100 shares or more of the Company’sshares for six consecutive months or longer and are registered or recorded in theshareholders’ register as of March 31 of each year.
2 Detail of the plan
Number of shares held
Consecutively
held period

100 shares ormore but lessthan 1,000 shares

2,000 shares or more

One benefit
discount coupon
Six months
for products
or more but
available at theless thanCompany’s
one yearinternet shoppingsite① QUO card worth① QUO card worth② One benefit discount② One benefit discountTwo benefit
discount coupons
for products
One year oravailable at themoreCompany’sinternet shoppingsite① QUO card worth

coupon for products
available at theCompany’s internet
shopping site

¥3,000② Two benefit discountcoupons for products
available at theCompany’s internet
shopping site

Number ofshares held(Thousandshares)

Shareholder nameShareholding
ratio
(%)

The Master Trust Bank of Japan, Ltd.
(Trust account)

938

3.14

First Brothers Co., Ltd.

682

2.28

Japan Trustee Services Bank, Ltd.
(Trust account 5)

620

2.07

SEED INC.

501

1.67

Developer Sanshin inc.

500

1.67

Japan Trustee Services Bank, Ltd.
(Trust account 2)

328

1.10

Kazuhiro Igarashi

3201.07

Shinyo Co., Ltd.

280

0.93

SBI Securities Co., Ltd.

271

0.91

Japan Trustee Services Bank, Ltd.
(Trust account)

264

0.88

Note: Shareholding ratio is calculated excluding treasury stock (68,749 shares).

1,000 shares or more
but less than 2,000shares¥2,000Principal Shareholders (Top 10)¥4,000coupon for products
available at theCompany’s internet
shopping site

① QUO card worth¥5,000② Two benefit discountcoupons for products
available at theCompany’s internet
shopping site

Breakdown of Shares by Type of Shareholder(Shareholding ratio)■ National and local governments0.00%

Total number ofshareholders

11,642■ Financial institutions10.57%■ Securities companies

2.75%■ Other domestic corporations

9.14%■ Foreign shareholders

2.09%■ Individuals and others

75.45%

10

Information for Shareholders

IR Information

Fiscal year
Record dates for
dividend of surplus
Annual General Meetingof Shareholders
Administrator ofshareholders’ register(special accountmanagement institution)
Mailing address

Please visit the Company’s website with IR
information such as summary of financial results
and securities report, as well as the latest financial
information and matters for timely disclosure.

(For telephone inquiries)
Method of public notice

From April 1 to March 31 of the following year
Year-end dividend March 31
Interim dividend September 30
June every year
4-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan
Sumitomo Mitsui Trust Bank, Limited

http://www.daitobo.co.jp/ir/

8-4 Izumi 2-chome, Suginami-ku, Tokyo168-0063, Japan
Stock Transfer Agency Business Planning Dept.,
Sumitomo Mitsui Trust Bank, Limited
0120-782-031 (toll-free in Japan)
Public notices by the Company shall be done byelectronic means.
However, in the event that accidents or otherunavoidable reasons prevent public notice by electronicmeans, the notice will be posted in The Nikkei.

Daitobo Co., Ltd.
http://www.daitobo.co.jp/For inquiries regarding this report, please contact: Business Management Headquarters TEL: +81-3-6262-6565