Watts Co., Ltd.

(2735; Tokyo Stock Exchange First Section)

Operating Results for the Fiscal Year
Ended August 2018 and Business
Forecasts for the Fiscal Year Ending
August 2019
October 15, 2018 (Monday)
Fumio Hiraoka, President and CEO

Contents
Financial
Overview

By Business

Consolidated Operating Results for the
Fiscal Year Ended August 31, 2018

Situation of Each Business for the
Fiscal Year Ended August 31, 2018

Business Forecasts for the Fiscal
Business Plan Year Ending August 31, 2019 andEfforts toward Each Business

Reference

P2 – P6

P8 – P16

P18 – P23

P25 – P32
1

Financial
Overview

Consolidated Operating Results for the
Fiscal Year Ended August 31, 2018
(Millions of yen)

Financial highlights

FY8/17

FY8/18 (Current period)

Ratio to sales

Ratio to sales

Ratio toforecast

YoY

Sales

47,494－49,444－104.1%

99.7%

Gross profit

17,99437.9％

18,77938.0%

104.4%－

Selling, general and administrative
expenses

16,78535.3％

17,80336.0%

106.1%－EBITDA

1,566

3.3％

1,363

2.8%

87.0%

－

Operating profit

1,209

2.5％

975

2.0%

80.7%

67.3%

Recurring profit

1,272

2.7％

1,037

2.1％

81.5%

68.2%

Net income attributable to owners ofparent

839

1.8％

633

1.3%

75.5%

68.5%

Net income per share (Yen)

61.96

－

－

46.79

 Sales increased by 4.1% YoY, almost as planned, as a result of steady 100-Yen shop opening andmaking “Real Co., Ltd.” which operates discount shops a subsidiary in April.

➡P3

➡P4
 Gross profit increased by 4.4% as the gross margin improved by 0.1 percentage point.
 Operating profit decreased by 19.3% as a result of higher SG&A expenses. This is due to weakness in
100-Yen shop same-store sales mainly due to extremely abnormal weather and increases in rent andpersonnel expenses associated with an increase in the number of shops, and an increase in the use of
temporary staff when opening shops. Profits fell significantly below the forecast.
➡P5
2

Financial
Overview

Sales by Business Type(Millions of yen)

Sales by Business Type

100-Yen shops

FY8/18 (Current period)

Ratio to sales

Ratio to sales

YoY

Directly managed

39,824

83.9％

41,243

83.4%

103.6%

Wholesale, Other

3,238

6.8％

2,748

5.6%

84.9%

43,062

90.7％

43,99189.0%

102.2%

925

1.9％

1,098

2.2％

118.7%

1,371

2.9％

1,616

3.3％

117.9%

2,297

4.8％

2,715

5.5%

118.2%

1,792

3.8％

1,814

3.7%

101.2%

341

0.7％

923

1.9%

270.4%

47,494100.0%

49,444100.0％

104.1%

Subtotal
Directly managed

Overseas
Business

FY8/17Wholesale
Subtotal
Buona Vita

Lifestyle products
business

Søstrene Grene
AMANO

Other

Total

 Sales of domestic 100-Yen shop business increased by 2.2% YoY. However, its ratio to consolidated
sales decreased by 1.7 percentage points due mainly to the decrease in wholesale sales of franchised
shops and growth in overseas sales.
 The ratio of overseas business to consolidated sales increased from 4.8% to 5.5%.
3

Financial
Overview

Changes in Gross Margin

Gross profit

Gross margin

37.9%
37.6%

37.5%

16,72817,331

FY8/15

FY8/1638.0%

17,994

18,779FY8/17

FY8/18In the 100-Yen shop business Gradually replace to higher value-added
products mainly in the Watts brand shops.
 Reduce food with high cost rate and continue
to raise the daily-use product sales ratio.
 Composition ratio of directly-managed shops
continue to rise because of not expanding
franchised shops and wholesaling.
In other domestic businesses Aim to expand the sales share of Buona Vita
and Søstrene Grene (which is capable ofearning a relatively high gross profit).
In the overseas business Recently, the Company will carefully assess
appropriate gross margin while also focusing
on the SG&A ratio trend, because thewholesale with low markup rate comparedwith directly-managed shops is expanding.

(Current
period)4

Financial
Overview

Factors for Changes in Operating Profit(Millions of yen)

Increased due to increase in the number ofpart-time employees associated with new shop
openings, and rising hourly wages due toincrease in minimum wage and labor shortage

Amount ofAmount ofincrease ingross profit increase in rent

346

Amount ofincrease inpersonnel
expenses

784
386

Promoted actively the use of
temporary staff when opening shops
to reduce the burden of shop staffs
Amount ofAmount ofincreaseindecrease incommission
equipment cost

4

Operatingprofit1,209

Previous period

Gross profit increased by 4.4% YoY due toa 4.1% increase in sales and 0.1
percentage points improvement in grossmarginpaid

68

Amount ofAmount ofincrease inincrease intransport
advertisement
Increase/decrease
cost
cost
in other expenses

45

38

137

Almost the same as in the previous period due
to optimization of expenses for Watts shop
openings and renovations, although shop
openings exceeded the plan

Operatingprofit 1,113

1,152

Decreased by 233 million yen 80.7％ YoY

975

Operatingprofit975

Current period

5Financial
Overview

Consolidated Balance Sheet andConsolidated Cash Flows（Millions of yen)

Consolidatedbalance sheet

FY8/17

FY8/18 (Current period)

Pct. change

Pct. change

Cash and deposits

5,727

Up 13.8％

5,147 Down 10.1％

Merchandise and finished goods

6,506

Up 6.5％

6,811

Up 4.7％

Other current assets

3,043

Up 10.0％

2,914

Down 4.2％

Tangible fixed assets

1,538

Up 8.2％

1,759

Up 14.4％

Other fixed assets

3,269

Up 3.6％3,312

Up 1.3％

Total assets

20,084Up 8.6％

19,945 Down 0.7％

Liabilities

10,210Up 10.7％

9,711

Down 4.9％

Net assets

9,873

Up 6.6％

10,234

Up 3.7％

 Shareholders’ equity ratio was Liabilities decreased by 4.9% due（Millions of yen)

Consolidated cash flows

FY8/17

FY8/18 (Current period)

ChangeNet cash provided by (used in)operating activities
Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities
Effect of exchange rate change on cash
and cash equivalents
Cash and cash equivalents at end of
periodFree cash flows

428

687

△469

△525

176

△615

△89

55

149

△658

△714

9

60

5

△3

5,727

696

5,147

△580

631

605

72

△559

mainly to repayment of 239 million yen
in long-term loans
Retained earnings increased by 429
million yen from the end of the previous
period In net cash provided by (used in)Change1,157

52.2%, up 2.5% from the end of theprevious period
Merchandise and finished goods
increased by 305 million yen due toaggressive shop openings andrenovations of 100-Yen shops. Also,
tools, furniture and fixtures intangible fixed assets increased by
113 million yenoperating activities, income before
income taxes and minority interests
decreased by 297 million yen andaccrued consumption tax decreased
by 222 million yen, respectively
In net cash provided by (used in)financing activities, proceeds fromlong-term loans payable decreased by
671 million yen

6Contents
Financial
Overview

Consolidated Operating Results for the
Fiscal Year Ended August 31, 2018

P2 – P6

By Business

Situation of Each Business for the
Fiscal Year Ended August 31, 2018

P8 – P16

Business Forecasts for the Fiscal
Business Plan Year Ending August 31, 2019 andEfforts toward Each Business

Reference

P18 – P23

P25 – P32
7

By Business

Topics by Business

Domestic 100-Yen Shop BusinessOpening/closing

Opened 141 shops against the full-year plan of 108 shops and closed 67
shops against 75 shops. The number of shops at the end of the period was➡P10
1,161 (net increase of 74 shops)

Watts brandshops

Establishment of the “Watts with” model which opens at an investment based on
the sales size accelerated shop openings and renovations. As a result, the➡P11number of Watts brand shops increased by 162 to 419.

Overseas BusinessGroup sales

Sales of overseas business were 118.2% YoY, expanding its ratio toconsolidated sales from 4.8% to 5.5%

Number ofoverseas shops➡P12

The number of shops that are selling WATTS products was 72 (up 6 YoY), andmore than 110 shops including local partners’ shops➡P13

Domestic Other Business
Buona Vita

Søstrene Grene

A life-style goods shop offering comfortable life. Decreased by 4 shops to 21
shops. Focused on development of existing shops such as by improving➡P14
product lineups
Denmark’s life-style goods shop. Opened up to 4 shops. Raise brandrecognition and expand its scale of operation to make the business into
profitable➡P15
8

Situation of 100-Yen Shop Business①
By Business― Changes in Same-store sales YoY ―FY8/18 (Current period)

105.0%
101.3%

FY8/17 (Previous period)

103.2%

101.8%

101.9%

103.2%

100.7%

99.5%

100.6%

100.0%

101.5% 101.8%

99.8%

98.2%

96.5%

101.8%
101.0%
100.8%
100.0%

100.1%
99.5% 98.2%
97.5%

99.0%

100.9%
99.9%

95.0%
Because the number of customers
decreased significantly to 95.3% YoY,
due to the impact of typhoons that hit
twice during the weekends andprolonged rains during the monthSlow sales due to heavy snowfall in easternJapan and nationwide cold waves. The
number of customers were 97.8% YoY in
January and 97.3% YoY in February

The number of customers
decreased nationwide due toextremely abnormal weather andsales were also slow during theGolden Week holidays

90.0%
Sep

Oct

Full-year total

Sales

Nov

Dec

No. ofcustomers

Jan
Spending per
customer

Feb

Mar

Apr

May

Jun

Jul

Aug

 Spending per customer exceeded every month theprevious year's level, but this was below the full-yeartarget of 101.0%, as the number of customers was
weak due to the frequent abnormal weathers andCurrent period
99.3％
98.6％
100.5％
other factors.
 Sales of Watts brand shops achieved over 100% YoY*Sales of September 2018: 101.4%
YoY

101.5％

100.5％

100.8％

9By BusinessOpeningSituation of 100-Yen Shop Business②―Number of Shops (Opening/Closing Plan and Results) ―Closing

No. of shops at the end of period

1,087
1,008

1,161

1,120

1,028

Opening/closing plan and results
Opening plan
108 shops→ Opened 141 shops

141
130
113

108

102

Closing plan
→ Closed 67 shops
75 shops （of which 10 franchised shops) New shop openings achieved the full-year target

64

FY8/1582

FY8/1671

67

75

FY8/17

FY8/18FY8/18(Forecast)(exceeded 33 shops compared to the plan),although the large number of new shops isconsignment type with relatively small sales scale There is still scope for opening consignment shops
which account for 113 shops of 141 shops
 The number of shops at the end of period
exceeded the plan resulting in 1,161 shops
10

Situation of 100-Yen Shop Business③

By Business―New Shop Openings and Renovations of “Watts” Brand Shops―
419

352

ClosingRenovation

257

Opening
No. of shops at theend of period

184
12

20

11

September 2018 Watts Odawara Dynacity West Shop

20

(Kanagawa)

115

78

22

57
1 15

16

63
48

 The share to total number of shops (1,161 shops)
58

50

20
7
-2

-1

-1

-3

-7

FY8/15

FY8/15

FY8/16

FY8/16

FY8/17

FY8/17

FY8/18FY8/18

2Q

4Q

2Q

4Q

2Q

4Q

2Q

4Q

is 36.1%.
 The number of shops increased by 162 from theend of the previous period as a result of
establishing multiple shop opening models
according to sales
 To open shops mainly Watts brand; renovations
will be made by reviewing the possibility ofinvestment recovery
11

Situation of Overseas Business①

By Business―Changes in Sales (Directly-managed and Wholesale)―
2,715
2,297
1,881

(Millions of yen)
Directly-managed sales

87

149

FY8/10FY8/11

1,371

Wholesale sales

251
FY8/12

426
25

1,616

1,058
508

1,174

681

400

395
112

377

FY8/13

FY8/14

FY8/15707
FY8/16925
FY8/171,098
FY8/18

 Directly-managed shops gain foothold while focusing onwholesale sales to neighbor countries (collaboration withlocal partners)
 There are about 40 fixed-price shops with sales floors
consisting of the Company’s products which include 17
shops in Myanmar, 12 shops in Mongolia and othercountries

May 2018 Udon Thani Shop (Thailand)Overseasbusiness

FY8/17

FY8/18Sales

2,297 million yen

2,715 million yen

YoY
118.2％

12

By Business

Situation of Overseas Business②― Number of Shops (Opening/Closing Plan and Results) ―Opening

Opening

Closing59

No. of shops at the end of period

72

66

71

No. of shops
at the end of
period(FY8/18)

Closing

Thailand

7

1

37

China

－

7

2

Malaysia

519Vietnam

－

3

11

Peru

6

－

13

Total

18

12

72

 Same-store sales in Thailand are recovering,
35
13

28
18

18
12

12
3

4

5

FY8/15

FY8/16

FY8/17

FY8/18(Result)

8

FY8/18(Forecast)and the Company will continue to focus on
products while aggressively opening new shops
 Malaysia transferred its sales subsidiary to a
local partner in April. Wholesales to Singapore
via Malaysia are expanding steadily and theCompany will continue to focus on wholesales
as a significant market
 China shrank its direct-managed shops andfocused on pop-up shops
 Peru's directly-managed shops remained strong.
Started wholesales to Mexico in the previous
period13

By Business Situation of “Buona Vita”～Planned number of shops opened/closed and resultsof the number of shops～
Opening

Closing

No. of shops at the end of period

25
23

22

21

21

July 2017 KOBE HARBORLAND umie Shop Closed 4 shops and totaled 21 shops
 Same-store sales were 98.3% YoY but the Company is

9

6
4

4

4

5

3
1

FY8/15

FY8/16

FY8/17

FY8/18FY8/18(Result) (Forecast)gradually replacing a product range tailored to eachstore and sales are recovering Slowed the pace of new shop openings to improve
profitability at existing shops
14

By Business

Situation of "Søstrene Grene"

November 2017 Søstrene Grene PRIMETREE AKAIKE Shop Operated by a joint venture company "Hilmer Japan Co., Ltd.". A brand company which operates morethan 200 specialty shops offering Scandinavian items mainly in Europe holds 40% shares Opened the first flagship shop in Omotesando on October 28, 2016. Operates 4 shops as of the end of
August 2018. Scheduled to open Kokubunji Shop (Kokubunji-shi, Tokyo) in November 2018
 Sell Scandinavian items at reasonable prices and introduce about 100 new items every week Improve brand recognition by introducing products that meet the domestic market and strengthening
branding using SNS and also promote multi-store expansion, with the aim of making the businessprofitable early15

By Business

Situation of “Real"On April 2, 2018, the Company acquired all the shares of Real Co., Ltd., which
operates small-scale discount shops, and made it a consolidated subsidiary.

 Community-based shop with extensive product lineup of daily necessities.
 Four shops in Osaka and Hiroshima.
 We will utilize the Company's strength in procurement capability cultivated with the 100yen shop business.
 Improve profitability by implementing cost-cutting measures through the integration of
headquarters functions, etc., thereby increasing the contribution to profits.

16

Contents
P2 – P6

Financial
Overview

Consolidated Operating Results for the
Fiscal Year Ended August 31, 2018

By Business

Situation of Each Business for the
Fiscal Year Ended August 31, 2018

P8 – P16

Business Plan

Business Forecasts for the Fiscal
Year Ending August 31, 2019 andEfforts toward Each Business

P18 – P23

Reference

P25 – P32
17

Business Plan

Business Forecasts for the Fiscal YearEnding August 31, 2019
(Millions of yen)
FY8/18 2Q

Business Forecast

FY8/18FY8/19 2Q (Forecast)
Ratio tosales

Ratio tosales

FY8/19 (Forecast)
Ratio tosales

Ratio to
sales

YoY

YoY

Sales

23,886

ー

25,400ー

106.3％

49,444－52,000ー

105.2％

Gross profit

9,207

38.5％

ー

ー

ー

18,779

38.0％

ー

－

ー

SG&A

8,613

36.1％

ー

ー

ー

17,803

36.0％

ー

ー

ー

Operating profit

593

2.5％

430

1.7％

72.5％

975

2.0％

1,080

2.1％

110.7％

Recurring profit

602

2.5％

430

1.7％

71.4％

1,037

2.1％

1,110

2.1％

107.0％

379

1.6％

255

1.0％

67.2％

633

1.3％

650

1.3％

102.5％Net income attributable toowners of parent
Net income per share
(Yen)
ROE

28.00

18.82

ー

46.79

47.98

－

3.8％

2.4％

ー

6.2％

6.1％

ー

Opening/closing plan of 100-Yen shops[Opening] 63 shops in 1H, 52 shops in 2H, a total of 115 shops[Closing] 52 shops in 1H, 32 shops in 2H, a total of 84 shops

Net increase of 31 shops

 Profits are expected to decrease in 1H due to theclosing of unprofitable and less profitable shops
and aggressive renovations mainly in 1H
Meanwhile in 2H, the Company is expected toensure profits as in the previous period for the fullyear as a result of contribution of effects of new
shop openings and renovations in 1H to profits

18

Business Plan

Growth vision with the trinity of our businessContinue to pursue
Structure to Sell
Better Products at
Lower Prices
 Low-cost opening and closingof shops
 Low-cost operation
 Best value-for-money dailyuse household items

Establish businessmodel for eachcountry Expand directly managed
shops by fully owned local
subsidiaries
 Establish joint venturecompany with local partners
 Develop new shops by
franchisee system

Brush up of Watts brand

100-Yen Shop business

Overseasbusiness

Otherbusinesses

 Shops and product lineups that
add more style to one’s life Establish shop opening model of“Watts” and “Watts with”
 Utilize POS system and improvereordering support system

Expand business andEnlarge source of
earnings
 Grow existing business andsecure profitability
 Capture new opportunities
including M&A

19

Business Plan

Initiatives for the 100-Yen Shop Business①

Watts brand shops

Renovate “Watts” and “Watts with” in a systematic manner. Increase Watts brand shops at a pace of 100 shops per
year with new shop openings
Plan both to improve customer satisfaction and to maximize sales and profits by establishing a shop model to suit thelocation and customer segments, while leveraging our expertise in low-cost opening and closing of shops and lowcost operation, which we have cultivated through existing models “meets." and "silk”
Create sales floors that reflect locations and customer segments by distributing merchandise reports for shops andconducting sales analysis using POS

Use of POS dataAccurately identify popular and unpopular items. Reduce stagnant products and replace themwith popular and new products to increase the freshness of products of sales floors
Introduce ordering support system to avoid losing sales opportunities due to stock-out
Create sales floors that match seasonal and regional characteristics by sharing sales data
accumulated under the Watts brand with “meets." and "silk”

20Business Plan

Initiatives for the 100-Yen Shop Business②

Expansion of “WATT’S new”

Revitalization of sales floors







Set a theme every 3 months and drastically change
displays. Develop an area that allows customers toimage a scene of life and appeal to young females
As of the end of August 2018, 4 shops are displaying“WATT'S new” space

Implement monthly headquarter-led sales promotion*The above photos show examples of developmentof monthly sales promotion
 Increase the number of fashionable items, switchingfrom the standard lineup of consumables andgeneral merchandises. Also aggressively introduce
new products and seasonal products

Increase the number of higher price products aiming
for rise in spending per customerEstablish a sales floor follow-up system suited toeach management style by placing dedicated staff
in charge of each store format

21

Business Plan

Initiatives for Overseas Business
小物家园 “KOMONOKAEN”

KOMONOYA[Expansion of wholesaling]

Currently, countries and regions with shipping records
are China, South Korea, Taiwan, Myanmar, Singapore,
Mongolia, New Zealand, Australia, Mexico, Brunei andPhilippines, etc. The number of retailers including
wholesalers that are selling only WATTS products ismore than “110 shops.” The Company will continue tokeep an eye on entering a promising market[Boost up existing market]


Rebuild support system of the existing market andshops through a new department which wasestablished in the current period. Raise the level ofmanagement of sales floors to expand sales. Regard
particularly Thailand, Vietnam and Myanmar as
significant markets and will actively provide support for
operation【Strengthen product competitiveness】
 Focus on supplying products for overseas as well as existing 100 yen products. Actively procure
products such as Japanese-made products and high quality products that are in high demand
overseas Build a commodity supply system to respond to a timely shipment overseas
22Business Plan

Initiatives for Other Businesses Plan to open 3 new shops. Select locations to grow as a business that makes agood profit Aim to gain repeat customers by strengthening trend products, gift-related andhand-made items
 Distribute information on trends, MD schedules and ways to develop products toshops controlled by the headquarters to create high quality sales floors
 Plan to open 2 new shops. Focus on reform of products and promote MD thatsuits the Japanese market. Also focus on stable supply of regular and popular
products
 Aim to establish a brand in Japan by dispatching information using SNS andincreasing media exposure. Customer satisfaction improvement and PR effects
are also expected by holding workshops and in-store events on a regular basis
 Expand sales through multi-store operation of website and development of
exclusive merchandise Strengthen sales of elegant general merchandise, our area of expertise Create a business format which is likely to generate synergies with the100-Yen
shop business Strengthening of sales promotion such as through leaflets
23

Contents
Financial
Overview

Consolidated Operating Results for the
Fiscal Year Ended August 31, 2018

P2 – P6

By Business

Situation of Each Business for the
Fiscal Year Ended August 31, 2018

P8 – P16

Business Forecasts for the Fiscal
Business Plan Year Ending August 31, 2019 andEfforts toward Each Business

P18 – P23

About Watts GroupP25 – P32

Reference24Reference

Brands of Watts Group

Domestic 100-Yen shop business

Overseasbusiness

Other domestic
business25

Reference

Overview of Other Businesses“Buona Vita,” a variety store
which proposes a
comfortable life. Operates
21 shops as of the end of
August 2018. The photo is
Sannomiya OPA2 shop
which opened in February
2017

Collaboration shop
between 100-Yen
shop and grocery

Community-based small
discount shop.
Operates 4 shops as ofthe end of August 2018

“Søstrene Grene”, a joint
venture in a life-style goods
shop offering North European
items. Operates 4 shops as ofthe end of August 2018

Import andwholesale ofEuropean taste
lifestyle goods

26

Reference

Use of SNS

https://twitter.com/watts_100/

https://www.instagram.com/watts_100/

・Watts official twitter

・Watts official Instagram

Providing photos of recommended
products and announcements ofmonthly sales promotion.
Retweeting blogs and articles
containing 100-Yen shop
information.

Like twitter, we will inform you therecommended products of our 100Yen Shops. Providing attractive
information so that more people will
follow.

 Launched our official SNS accounts in the
100-Yen Shop business!
 Aiming to acquire new customers as wellas increase the frequency of visits ofexisting customers

LINE@ is also available at several shops, which users
can get information when you become friend.

27

Reference

Company Profile

Establishment
Meaning of the Company’s nameFebruary 22, 1995 (Currently the 25th business term)
Derived from “Wa! tto ikou”(Japanese catch cry to “go forth energetically”)

Market listing

Tokyo Stock Exchange First Section(Securities code: 2735)

Capital stock

440 million yen (as of August 31, 2018)

Head office

Main business

Number of employees
Number of shops

5F,Sumitomo OBP Plaza Building, 4-70,

Shiromi 1-chome, Chuo-ku, Osaka-shi, Osaka Prefecture

Wholesale and retail of daily-use and household items(Mainly operation of 100-Yen shops)
3,245 employees (as of August 31, 2018) *Part-time workers included
1,263 shops (as of August 31, 2018) *Other shops included28

Reference

Corporate History 2011 Advanced to Hokkaido（Opened shops in 47 prefecture）

2014
Exceeded 1,000 shops
Listed on TSE1

2009
Started overseas business
Advanced to Thailand 2002 Shares were publicly listed
2007（Current TSE JASDAQ）
Integrated with Ohthree Co., Ltd.

Exceeded 700 shops
 1997 Established distribution
center in Shiga Prefecture 1995 Established in Chuo-ku,
Osama , as a successor of
Hisamatsu Co., Ltd.

1998
Exceeded 100 shops
for 4 years
after establishment

1995
Established2005
100-Yen shops exceeded
300 shops

2002¥10b in sales
Went OTC

FY8/18Sales¥49.4bn

No. ofshops

1,263 shops

Consolidated sales
No. of Group shops at the end of period29Reference

Shareholder Composition
Individual and others
Financial institutions

FY8/17

Other companies
Securities companies

37.54%

Foreign companies and others
Treasury stock

24.55%

23.18%

0.68%

11.52%
2.51%
0.29%

FY8/1843.97%

24.55%

16.93%

11.72%
2.51%

Total number ofshares issued
Number ofshareholders

YoY

 Number of shareholders increased by

FY8/17

FY8/18

13,958,800
shares8,316

13,958,800
shares
15,225＋6,90937.54%
24.55%

43.97%
24.55%+6.43P±0P

23.18%
11.52%
0.68%
2.51%

16.93%
11.72%
0.29%
2.51%

－

Ownership ratio
Individuals and others
Other domestic
companies
Foreign companies andothersFinancial institutions
Securities companies

Treasury stock

6,909 from the previous fiscal year-end.

 Ownership ratio of individual
shareholders increased by 6.43
percentage points YoY, and of foreigncompanies decreased by 6.25
percentage points.

-6.25P  Watts will secure return capital forshareholders by achieving good results.
+0.20P-0.39P±0P(Note) The figures are rounded to the third decimal place and may not add up to 100% when adding the ratios of each section.

30

Reference

Dividend Policy

The Company’s policy is “to maintain a stable dividend payment,”
considering the return of profits to shareholders.
Net income per share

Dividend per share

ROE（Return on Equity）

DOE（Dividend on Equity）

FY8/16

Dividend payout ratio

32.1%

28.3%
24.2%

7.9％

2.2%

8.7％

2.1%

6.2％

2.0%

15.00 yen

15.00 yen

FY8/16

FY8/17

FY8/18FY8/18Net income per share (Yen)

53.04

61.96

46.79

Dividend per share (Yen)

15.00

15.00

15.00

Dividend payout ratio

28.3％

24.2％

32.1％

Dividend yield

1.6％

1.1％

1.6％

ROE (Return on Equity)

7.9％

8.7％

6.2％

DOE (Dividend on Equity)

2.2％

2.1％

2.0％

959

1,305

950

Stock price of accounting date(Aug. 31)(Yen)
15.00 yen

FY8/17*Dividend payout ratio for each fiscal year is calculated basedon the stock price of accounting date.
*Dividend per share for FY8/18 is forecast as of today.
31

Reference

Shareholder Benefit Program

Number of shares held andholding period

Description

100 to 999 sharesA

1,000 shares or more/
Holding 3 years or more

A

A

＋

B

B

 Shown above is shareholder benefit products for FY8/18.
 We will plan more attractive benefits with reflecting your opinions and suggestions.
32

The data and future forecasts presented in this material are based on informationthat was available at the time this material was released. Changes in circumstances
can occur due to a range of factors and the Company gives no guarantee regarding
achievement of objectives and forecasts, or future operating results. Information
contained herein may change without forewarning. When using this data and referencematerials, please verify and confirm details against information that you have obtainedby other methods and exercise your discretionary judgment. Watts Co., Ltd. will in noway be held liable for any loss resulting from the use of this material.

Please contact us if you have any inquiry regarding this material.
Inquiries:
Hidehito Mori
(Executive Managing Director, Head of Corporate Planning Office), Watts Co., Ltd.

e-mail： ir@watts-jp.com
TEL ： 06-4792-3280