Agenda
1. Company Profile
2. Initiatives Implemented in FY2015

3. Mid-term Business Plan
4. CSR/Dividend Policy2１. Company Profile

3

About Nitori Group• Established：December 1967
• Incorporated： March 1972
• Net Sales：¥445 bil.
• Capital：¥13.3 bil.
•Main Operations：Furniture/homefurnishing manufacture, logistics, retail• No. of Stores：420 （As of February 2016）• No. of Employees：Approximately 28,000First store opened (99.17㎡) in December 1967

Stores：1
Sales：¥10 M
Employees：2
My age：23

4

Nitori Group
Nitori Holdings Co., Ltd.

Nitori

HomeLogistics

Planning &Sales

Logistics

NitoriPublicHome
Deco

Nitori
FacilityStorefurnishing
maintenance2 othercompanies

Curtain
Advertising
Manufacturing& Travel& ImportAgency【7 domestic companies】

Nitori
Furniture

NitoriTaiwanNitoriUSA

Marketingcompany
in Taiwan

Marketingcompany
in U.S.

(Vietnam, Indonesia）

Furniture
Manufacturing

5 Companies
in China
Marketingcompany in China,
Trading Firm/
Warehouse

4 Companies inSoutheast Asia
（India, Malaysia,Thailand,Vietnam）

Trading Firm

【14 overseas companies】

5Company Objective and Our Long-term Vision

Company Objective
Offering a rich variety of choices for world
citizens pursuing more comfortable living space

Long-term Vision
2012
2022

300 stores
1,000 stores¥340 bil. in sales¥1 tril. in sales

Expanding high-market-share regions, contributing to more
comfortable living space2032

3,000 stores¥3 tril. in sales

Offering a rich variety of choices for world citizens pursuing more
comfortable living space

6

Manufacture-Logistics-Retail Business Model

Some 90% of Nitori’s merchandise developed
in-house or directly imported (private labels)Marketing & research

Product Planning & Designing

Procurement of materials

Store operations

Logistics

ImportFactory productionQuality testing & packaging

7

Global Sourcing
Procure high-quality materials at low-cost globally

UV paint

Inclined shelves

Earthquake
proof latches

Low formalinmaterials

Enamel paintSockets

Drawer frontplates

Drawer pulls

Bottomdrawers

Drawers

Counter

Nitori’s merchandise produced using materials sourced globally8

Total Coordination of Furniture and Furnishings

Total coordination
proposals
9

Domestic Store Network

３８３stores ３４４ ３９Hokkaido Region
19 stores

Hokuriku & Koshinetsu
Region 30 stores
Chugoku & Shikoku
Region 40 stores

Kinki Region 66storesKyushu & Okinawa Region
44 stores

TohokuRegion
28 stores
Kanto Region
109 stores

Tokai Region 47stores（As of Feb 20 2016）10

Overseas Store Network（As of Feb 20 2016）

China
８storesUSA
5 storesTaiwan２4 stores

11Factories and Logistics Centers
Taicang Distribution
Center, China (2015)

Shanghai Process
Center, China(2008)

Domestic large logistics
distribution centers

Kanto distribution center
Kansai distribution center
Kyushu distribution center

Overseas large logistics
distribution centers

Nitori Furniture Vietnam(2004)

3 Factories
directmanagement

Plan to start
operating in FY2017（400K ㎡）

Nitori Furniture Ba Ria-Vung Tau(2015)

Nitori Furniture Indonesia(1994)

12

E-Commerce /Corporate Business Sales

Nitori Net

Corporate Business Sales/Renovations

OfficeConvenience stores

Total remodeling13

２. Initiatives Implemented in FY2015

14

Full-year Company Targets Call forHigher Revenue, Profit for 29 Years（Sales:¥ bil.）（Ordinary Income：¥ bil.）

500

100

45090

400350Sales¥445 bil.(plan)
Ordinary Income ¥72 bil.(plan)

80
70

300

60

250

5020040150

Sales

30100

Ordinary income

2050

1000'87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

15

Product Development
Nitori StudioDeveloped and manufactured
in our factories
Affordable prices Maintained
A wide variety of colors,
sizes offered to customers

135 patterns for your style⇒ helps boost customer visitsand diversify customer base16

Product Development
KaruFuwa Down Comforter

Extremely lightweight
and fluffy

Single Mattress Porta 2

Portable andenvironmentally-friendly
17Product Development
Nーsleep “Premium” Series
Individual coils support the body,dispersing body pressure

Our pocket coil technology

A mattress that gives the ultimate sleep

18

Product Development
N WarmN Cool

ふところは寒いが、

Quality has markedly improved
Building a stable supply system
Customer base expansion unfolding on exposure to high-profile
department store, media
Developing a wider range of merchandise, including for kids

19

Development
Nitori Skillet
Ranked 26 th in Nikkei’s

500K soldTop 30 Items of the Year
“Nitori Skillet” Selling Points

An affordable price of ¥498
（including taxes）
Easy to use and stays warm fora long timeCan be used in an oven and has
a wide range of uses20

３. Mid-term Business Plan21

Increasing Furniture / Home FurnishingMarket Size201320222032※ internal investigation¥83 tril.

¥45 tril.⇒¥57 tril.⇒

Russia/CISEuropeNorth America
1010１６１４１６１４0.7

2Japan

１６９4

１1

China

43４22

Korea
0.7

Middle East
Mexico４32４India

２11

Taiwan３0.2 0.3 0.4

ASEAN
South America
2 ３４Africa
0.7

12４2

1

Oceania112

2013 Hfa + Furniture
Estimated market size ( ¥1tril.)
2020-22 Hfa + Furniture
Estimated market size ( ¥1tril.)2030-32 Hfa + Furniture
Estimated market size ( ¥1tril.)

Expanding Overseas
Markets

22

Shopping Mall
Property adjacent to Nitori
Miyazaki Store redeveloped(floor space:52,700㎡）

Nitori Mall Miyazaki
April 2015 ＯＰＥＮ

Nitori Mall Hirakata
２０１６ Spring
ＯＰＥＮ (planned)
Largest Nitori Mall（floor space:58,500㎡）
23

Logistics
Large new logistics centers
to come on stream

New centers designed tomeet higher volume fromaccelerated store expansion

Satte Logistics Distribution Center
Start Operations in FY
2018, largest scale ever inNitori Group106,000㎡

Kobe Logistics Distribution Center
Start Operations in FY2017

32,000㎡

Nagoya Logistics Distribution Center
Start Operations in FY2018

57,000㎡
24Work Environment(headcount)

Different Working Styles Possible 100

9080
・ Workplace no longer solely driven by70
career-track employees
6050
・ Increasingly diversified work styles at stores 40
30
・ Women, senior citizens playing more
20
important roles
100
・Supporting nursing care・Maternity/ Parental leave and shortened
hours fully introduced＜ Diversity Committee ＞

87
64
4730

2012 2013 2014 2015 (FY)No.of parental leave＜ Return-to-work program ＞

25

Job Rotation
Purpose of rotation

Employees rotate
With store operations forming the hub
in intervalsof career development, employees
averaging 2-3
rotate through different departments
to sharpen skills as specialistsyears
IT

Advertisement

Sales
PlanningLogistics
Storeoperations
Tradingcompany

EC
Education

Manufacturing

Skills as
specialists will be
sharpened26

Major Initiatives for FY2016
A) Revamping merchandisingB) Revamping supply systems

C) Strengthening quality controlD) Raising quality of services
E) Revamping of business strategy27

MajorInitiatives forFY2016

A. Revamping merchandising■ Establishing a system to develop
merchandise for world citizens
・Development of merchandise marketable worldwide
・Locating new procurement sources
・global sharing of product information■ Vertical Merchandising
・ Sourcing policy
・ Global operations to have the same suppliers/vendors■Revamping merchandise mix and redesigning
retail space・Developing standard merchandise mix for each region

・Reviewing price points to diversify customer base28

MajorInitiatives forFY2016

Ｂ. Revamping supply systems
Ｃ. Strengthening quality control■ Optimization of Global Inventory Management
・Building a global logistics network
・Building centers for complex cargo loading;sharing of merchandise information■ Measures Taken to Address
Cost Increases, Labor Shortage(We view them as an opportunity anddifferentiate us from others)
・Mechanize, automate, systemize■ Global Quality Standards
・Establishing global standards for quality control
・Assisting business partners in achieving the said
standards
・Shifting quality controls abroad; quality controloriented human resource development

29

MajorInitiatives forFY2016

Ｄ. Raising quality of services
Ｅ. Revamping of business strategy■ Strengthening In-store Customer Services
・Strengthening customer-facing services and offering more
attractive self-service options(differentiation pursued based on strength of brick and mortar stores)■ Transforming into

Omni-channel Retailer
・Building a framework to allow customers to shop more conveniently■ Laying the groundwork forfaster store openings abroad30

４. CSR/Dividend Policy

31Moves for Environmental Protection
Reduction of CO2Emissions
Emission cuts on merchandise development
Reduced and simplified packaging
Energy saving at stores,
logistics centers
Introduction of LED lighting
for overhead illumination
Using reusable packaging toreduce wasteMore efficient trucking
Shorter distances, closures of freightterminals key to cutsMore efficient use of materials
in manufacturing
Recycling wood chips for reinforcement(¥ bil.)(t-co2)
200500

180

450

160

400

140350120300100

250

80200

60150

40200

CO2 Emissions
Sales

100500(FY)

Sales and CO2
Emissions per Store32

Human Development Through Sport
Nitori Women’s
Running Team

Host the Nitori Ladies
Golf tournament

33

Culture and Education
Nitori International
Scholarship Foundation
11th year since establishment
Donations to 38 regions andscholarships awarded to 895
individuals

Tairyu Sanso Garden
In 1998 named as national
beauty spot and from Nov. 2010
held by Nitori.

Scholarships awarded to highschool students affected in theTouhoku Earthquake
American seminars held forscholarship recipients

Nitori CulturalFoundation
Donation to Hokkaido
Restoration and storage ofhistorical and cultural artifacts
Above items put on view to the public34

Profit Report to Share Holders
Total Shareholder Payouts Dividend
hikes over 12 consecutive years※Stock splits adjusted.
‘16.2

‘06.2

Annualdividend/share

‘07.2

’08.2

‘09.2

‘10.2

‘11.2

‘12.2

‘13.2

‘14.2

‘15.2

（initialplan）

５

６.５ １１ １７

２５ ３２.５ ４０

４５５０

５５６０

(half-year dividend)

[2.5]

[2.5]

[4.5]

[12.5][22.5][22.5][26][30]

Dividend payout
ratio

５.２%

５.５%

８.１% １０.６% １２.０%

１４.6%

１５.2%

(as % of consolidatednet income)[7][12.5][20]

１１.８% １３.１% １３.８% １４.３%

Share Repurchases Implemented（yen）

60
50
40
30
20
100

Share buybacksof ¥2.2 bil.

Share buybacksof ¥1.0 bil.
Share buybacksof ¥14.6 bil.

Dividend for shareholders of record at end-FY
Dividend for shareholders of record at end-1H FY

'06.2

'07.2

'08.2

'09.2

'10.2

'11.2

'12.2

'13.2

'14.2

'15.2

'16.2
35

Stock Performance
Nitori’s price appreciation from pre-Lehman-crisis
levels roughly 6 times that for Nikkei Stock Average（Nikkei Stock Average: yen）

（Nitori Holdhings: yen）

29,00012,000※2008/6/30～2016/2/20
25,50022,000

Nikkei StockAverage up 54%

Nitori Holdings
up 330%10,0008,000

18,5006,000

15,0004,000

11,500

Nikkei Stock Average

2,000

Nitori Holdings

8,000036

【DISCLAIMER】
The forecasts and projected operating results contained in this report are based on information
available at the time of preparation, and thus involve inherent risks and uncertainties.
Accordingly, readers are cautioned that actual results may differ materially from thoseprojected as a result of a variety of factors.
Figures are rounded off to the digits that are displayed.