Watts Co., Ltd.

(2735; Tokyo Stock Exchange First Section)

Operating Results for the Fiscal Year
Ended August 2019 and Business
Forecasts for the Fiscal Year Ending
August 2020
October 15, 2019 (Tuesday)
Fumio Hiraoka, President and CEO

Contents
Financial
Overview

Operating Results for the Fiscal Year
Ended August 2019

P2 – P7

By Business

Situation of Each Business for the
Fiscal Year Ended August 2019

P9 – P17

Business Forecasts for the Fiscal
Business Plan Year Ending August 2020 andEfforts toward Each Business

Reference

P19 – P24

P26 – P33
1

Financial
Overview

Consolidated Operating Results for the Fiscal Year
Ended August 2019
(Millions of yen)

Financial highlights

FY8/18FY8/19 (Current period)

Ratio to sales

Ratio to sales

Ratio toforecast

YoY

Sales

49,480－51,399－103.9％

98.8％

Gross profit

18,80438.0％

19,33737.6％

102.8％－

Selling, general and administrative
expenses

17,80336.0％

18,62036.2％

104.6％－EBITDA

1,388

2.8％

1,157

2.3％

83.4％

－

Operating profit

1,000

2.0％

716

1.4％

71.6％

77.9％

Recurring profit

1,037

2.1％

656

1.3％

63.2％

74.6％

Net income attributable to owners ofparent

633

1.3％

70

0.1％

11.1％

26.1％

Net income per share (Yen)

46.79

－

－

5.26

 Sales increased by 3.9% YoY, mainly due to the concentration of 100-Yen shop opening in 1Q, andmaking “Real Co., Ltd.”, which operates discount shops, a subsidiary in the previous fiscal year.
➡P3
 Operating profit was 71.6% YoY due to an increase in personnel expenses associated with a rise inminimum wages and an increase in rent in line with intensifying competition for opening new shop in the
100-Yen shop business.
➡P5
 Net income attributable to owners of parent declined sharply to 11.1% YoY, mainly due to therecording of impairment losses on store facilities of Søstrene Grene, etc.
➡P6
2

Financial
Overview

Sales by Business Type(Millions of yen)

Sales by Business Type

100-Yen shops

FY8/19 (Current period)

Ratio to sales

Ratio to sales

YoY

Directly managed

41,24883.4％

42,52982.7％

103.1％

Wholesale, Other

2,764

5.6％

2,368

4.6％

85.7％

44,01288.9％

44,89787.4％

102.0％

Directly managed

1,098

2.2％

762

1.5％

69.3％

Wholesale

1,616

3.3％

1,714

3.3％

106.0％

2,715

5.5％

2,476

4.8％

91.2％

1,814

3.7％

1,697

3.3％

93.6％

938

1.9％

2,328

4.5％

248.2

49,480100.0%

51,399100.0％

103.9％

Subtotal

Overseas
Business

FY8/18Subtotal
Buona Vita
Lifestyle products
business

Søstrene Grene
AMANO

Real, etc.

Total

 Sales in the domestic 100-Yen shop business increased by 2.0% YoY. However, its ratio to theconsolidated sales decreased by 1.5 percentage points due mainly to making “Real Co., Ltd.” asubsidiary in April of the previous fiscal year.
3

Financial
Overview

Quarterly Changes in Gross MarginSales

11,84912,047

12,925Gross profit
12,65438.8%

12,731Gross margin
12,916 12,974

In April 2018, the Company made Real Co., Ltd., which
operates discount shops, a consolidated subsidiary.
Gross margin at these shops is low, leading to adecrease in gross margin from FY8/18 3Q.

38.3%

37.5%

37.4%

12,775

38.0%

37.6%

37.4%

37.4%

4,761

4,833

4,882

4,859

4,539

4,672

4,850

18/8

18/8

18/8

18/8

19/8

19/8

19/8

19/8

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

4,735

4

Financial
Overview

Factors for Changes in Operating Profit(Millions of yen)Amount ofincrease ingross profit

Increase in salaries of part-time employees
and temporary staffs: +315
Increase in legal welfare expenses +27, etc.

Amount ofincrease in rent

243

Increase in commissions related to temporary
staffing services for shop openings and theuse of Smartphone Saifu App, etc.

Amount ofincrease inpersonnel
expenses

532
396

Amount ofincrease inequipment cost5

Operatingprofit1,000

Amount ofincrease incommission
paid

56

Amount ofAmount ofincreaseinincrease inutility bill entertainment
expenses

14

13

Increase in expenses for theshareholder benefit program due
to an increase in the number ofshareholders.
Increase/decre
ase in otherexpenses

97

Sales increased by 3.9% YoY, andgross profit increased by 2.8% YoY

Decreased by 283 million yen 71.6％ YoYPrevious
periodOperatingprofit716

Current
period5

Financial
Overview

Breakdown of Extraordinary Losses

Breakdown ofextraordinary losses
300(Millions of yen)

277

Impairment
loss
200

197

133

0

Loss on disposal of
fixed assets

Loss on disposal of
fixed assets

20

7 Of the 197 million yen of impairment loss in the Loss on disposal of fixed assets increased by 13

Impairment loss

73

current fiscal year is due to the withdrawal from theAMANO business which is unlikely to turn profitablearound November 2019.
current fiscal year, 115 million is ascribed to store
equipment, etc. at Søstrene Grene.

150

50

subsidiary in the previous fiscal year was due to thetransfer of a Malaysian subsidiary that had been in red
in the previous fiscal year

 59 million yen of loss on business liquidation in the

250

100

 52 million yen of loss on the sale of shares of a52

59

Loss on sales of sharesof subsidiaries

Loss on businessliquidation

18/8

19/8

million yen due to active closure of unprofitable shops,
mainly 100-Yen shops.

 Continue to actively close low profitability andunprofitable shops as well as review of unprofitablebusinesses. Certain level of extraordinary losses is
expected in the next and following years. However,these losses are expected to be stabilized.
6

Financial
Overview

Consolidated Balance Sheet andConsolidated Cash Flows(Millions of yen)

Consolidatedbalance sheet

 Shareholders’ equity ratio was

FY8/19(Current period)

FY8/18Pct. change

Pct. change

Cash and deposits

5,147

Down 10.1％

6,075

Up 18.0%

Merchandise and finished goods

6,811

Up 4.7％

7,081

Up 4.0％

Other current assets

2,646

Down 13.0％

2,942

Up 11.2％

Tangible fixed assets

1,759

Up 14.4％

1,780

Up 1.2％Other fixed assets

3,581

Up 9.5％

3,677

Up 2.7％

Total assets

19,945

Down 0.7％

21,557Up 8.1％

Liabilities

9,711

Down 4.9％

11,690Up 20.4％

Net assets

10,234

9,867

Down 3.6%

Up 3.7％(Millions of yen)

Consolidated cash flows

FY8/19(Current period)

FY8/18ChangeNet 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

 In the cash flows from operating

Change

687

△469

2,279

1,592

△615

△89

△832

△216

△658

△714

△510

147

5

△3

△8

△14

5,147

△580

6,075

928

72

△559

1,447

1,375

47.1%, down by 5.1 percentage
points from the end of the previous
period.
In other current assets, accrued
consumption taxes increased by 55
million yen.
In liabilities, electronically recorded
obligations increased by 1,044
million yen and notes and accounts
payable-trade increased by 699
million yen
Net assets decreased by 367 million
yen due mainly to the purchase oftreasury stock of 135 million yen.



activities, accounts payable
increased by 1,779 million yen due
to the closing day of the current
consolidated fiscal year being aholiday.
In the cash flows from investing
activities, acquisition of intangible
fixed assets increased by 62 million
yen due to the renewal of the coresystem.

7

Contents
Financial
Overview

Operating Results for the Fiscal Year
Ended August 2019

P2 – P7

By Business

Situation of Each Business for the
Fiscal Year Ending August 2020

P9 – P17

Business Plan

Business Forecasts for the Fiscal
Year Ending August 2020 andEfforts toward Each Business

P19 – P24

Reference

P26 – P33
8

By Business

Topics by Business

Domestic 100-Yen Shop BusinessOpening/closing

Opened 111 shops against the full-year plan of 115 shops and closed 80
shops against 84 shops. The number of shops at the end of the period was
1,192 (net increase of 31 shops)➡P11

Watts brand shops

Increased by 101 shops to 520 shops due to openings and renovations.
The share to total number of 100-Yen shops increased to 43.6%➡P12

Overseas Business
Overseas shops

The number of shops that are selling WATTS products was 88 (up 16 fromthe end of the previous fiscal year), and more than 130 shops including
local partners’ shops.
➡P13,14

Domestic Other Business
Buona Vita

A life-style goods shop offering comfortable life. The number of shops at theend of period was 20. Focused on development of existing shops such as byimproving product lineups.
➡P15

Søstrene Grene

Denmark’s life-style goods shop. Operate 5 shops. Raise brand recognitionand expand its scale of operation to make the business into profitable.

AMANO

Decided to withdraw from this business as there is no prospect for
improvement in profits.

RealCommunity-based discount shop. Made as subsidiary in April of the previous
fiscal year. Aim to create synergies with 100-Yen shop business.
➡P17

➡P16

9

By Business

Situation of 100-Yen Shop Business①― Changes in Same-store sales YoY ―FY8/19 (Current period)

FY8/18 (Previous period)

105.0%

101.4%

102.7%
100.7%

100.0%
100.6%
98.8%

100.3% 100.3%
99.8%

99.2%

Sep

Oct

Full-year total

Sales

Nov

Dec

No. ofcustomers

97.5%

100.0%

99.7%

98.2%

99.0%
98.1%

97.5%

Sales were weak due to the sluggish
sales of winter clothing related to thewarm winter, etc.

Due to the cool summer, summer products
accounted for 1.2 percentage points lower thanthe previous fiscal year.
The number of customers significantly
decreased by 96.6% YoY.

Jan

May

Spending per
customer

YoY

99.3％

98.6％

100.5％

Current period

99.7％

98.8％

100.9％※ Sales for September 2019:104.7％

101.0%

100.1%

98.2%

97.7%

The number of customers was 102.9% YoY.
Rebound from a drop in the number ofcustomers due to the impact of typhoons andprolonged rain in the previous fiscal year.

90.0%

99.5%

96.5%

95.0%

100.9%

101.1%

Feb

Mar

Apr

Jun

Jul

Aug

 Spending per customer increased YoY in all
months, but was below the full-year target of
100.0% as we unable to offset the decline incustomer numbers due to the impact ofcompetition and weather conditions, etc.
 Sales of Watts brand shops reached 101.5% YoY.
10

By Business

Situation of 100-Yen Shop Business②―Number of Shops (Opening/Closing Plan and Results) ―Opening
Closing
No. of shops at the end of period

1,161
1,028

1,192

Opening/closing plan and results
1,192

1,087

Opening plan
115 shops → Opened 111 shops
141

130

111

102

Closing plan
84 shops

115→ Closed 80 shops

 Breakdown of shop openings: 23 tenant

82

16/8

71

67

17/8

18/8

80

19/8

84

19/8
(Forecast)

shops, 87 consignment shops, and 1 FC
shop. Total number of shops was 111.
 Breakdown of shop closings: 37 tenant
shops and 43 consignment shops. Total
number of shops was 80.
 Net increase of 31 shops. The number ofshops was 1,192 at the end of period, in linewith the plan.
11

Situation of 100-Yen Shop Business③

By Business―New Shop Openings and Renovations of “Watts” Brand Shops―
520

Closing479

Renovation
Opening

352

No. of shops at theend of period

差替え

419

20
11

16

257

20

September 2019 Watts Tachikawa Shop (Tokyo)

15
6

12

184

22 11548

57

 Increased by 101 shops from the end of the
78
63

58

50

55

52

20
-2

-1

-1

-3

-7

-10

16/8

16/8

17/8

17/8

18/8

18/8

19/8

19/8

2Q

4Q

2Q

4Q

2Q

4Q

2Q

4Q

-17

previous fiscal year. The share to total number ofshops (1,192 shops) is 43.6%.
 Watts brand recognition is steadily increasing, as
the Company was able to open some shops at
facilities that attract large numbers of customers
in the current fiscal year.
 To open shops mainly Watts brand; renovations
will be made by reviewing the possibility ofinvestment recovery.
12

By Business

Situation of Overseas Business①―Changes in Sales (Directly-managed and Wholesale)―
2,715

300 0

2,297

250 0

1,881

200 0

(Millions of yen)

1,616
1,714

1,371

Directly-managed sales
Wholesale sales

150 0

1,058

2,476

1,174

100 0

500

149

251

426

508
395

681

112

377

14/8

15/8

707

925

1,098

762

0

11/8

12/8

13/8

16/8

17/8

18/8

19/8

 Directly-managed shops gain foothold while focusing onwholesale sales to neighbor countries (collaboration withlocal partners).
 Sales at directly-managed shops decreased due to thetransfer of a sales subsidiary in Malaysia to a local
partner and the switch from directly-managed operation tofranchised operation in April of the previous fiscal year.
Overseasbusiness

Sales

June 2019 Big-C Roi Et Shop (Thailand)

FY8/18FY8/19

2,715

2,476

million yen

million yen

YoY
91.2％

13

By Business

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

Opening
Closing
No. of shops at the end of period

88
66

72

78

59

No. of shops
at the end of
period(FY8/19)

Closing

Thailand

13

1

49

China

－

－

2

Malaysia－

18

Vietnam

1

3

9

Peru

8

1

20

Total

22

6

88

 In Thailand, net increase of 12 shops, totaled
49 shops. The Company commenced to open
Watts brand shops, there are 8 Watts shops
including renovated shops.

28
22

18
12

9

12

4

5

16/8

17/8

6
18/8

 There are about 50 fixed-price shops with sales

3

19/8
19/8
(Result) (Forecast)floors consisting of the Company’s products
which include 16 shops in Myanmar, 11 shops in
Mexico and other countries.

 In Peru, net increase of 7 shops, totaled 20
shops. Wholesaling to Mexico and Brazil via
Peru.
14

By Business Situation of “Buona Vita”

Opening
Closing
No. of shops at the end of period

25
21

24
21

20

November 2018 Buona Vita Machinoma Omori Shop (Tokyo)

6 Carefully select locations for new shop openings,

4
4
16/8

5

1

17/8

3

3

2
18/8

mainly in front of the station. During the fiscal year,
closed 3 unprofitable shops, totaled 20 shops.
 Despite efforts to developing existing shops, such as
introducing new gift items, same-store sales remained
at 96.5% YoY.

19/8
19/8
(Result) (Forecast)15

Situation of "Søstrene Grene"

By BusinessOpening

Closing
No. of shops at the end of period

6

Established a joint venture
Hilmer Japan in May 2016,
with 55% equity stake5

September 2019 Søstrene Grene Kawasaki Le FRONT Shop (Kanagawa)4
 Opened the first flagship shop in Omotesando on October 28,

3
2
3
1
16/8

17/8

18/8

2




1

19/8

19/8

(Result)(Forecast)2016. Operate 5 shops as of the end of August 2019.
Same-store sales have not yet reached the target, and theloss increased due to the closing costs of the Diversity Tokyo
Plaza Shop and the recording of impairment losses on store
facilities.
Improve brand recognition by introducing products that meetthe domestic market and strengthening branding using SNS
and also promote multi-store expansion, utilizing lowoperating-cost-shop format with the aim of making thebusiness profitable early.

16

By Business

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

 Offer a wide range of value-for-money products with utilizing their strength in procurement capability.
 Implement cost-cutting measures through the integration of headquarters functions, etc.
 Trial opening of collaborative shops with the Company’s 100-Yen shops to create synergies with 100Yen shop business.
 Opened Kayashima Shop (Neyagawa City, Osaka) in April, operate 6 shops as of the end of August
2019.
17

Contents
Financial
Overview

Operating Results for the Fiscal Year
Ended August 2019

P2 – P7

By Business

Situation of Each Business for the
Fiscal Year Ending August 2019

P9 – P17

Business Forecasts for the Fiscal
Business Plan Year Ending August 2020 andEfforts toward Each Business

Reference

P19 – P24

P26 – P33
18

Business Plan

Business Forecasts for FY8/20(Millions of yen)

Business
forecasts

FY8/192Q

FY8/20 2Q(Forecast)

Ratio tosales

Ratio tosales

FY8/19FY8/20 (Forecast)

Ratio to
sales

YoY

Ratio to
sales

YoY

Sales

25,648ー

25,500ー

99.4％

51,399－51,860ー

100.9％

Gross profit

9,595

37.4％

ー

ー

ー

19,337

37.6％

ー

－

ー

SG&A

9,228

36.0％

ー

ー

ー

18,620

36.2％

ー

ー

ー

Operating profit

366

1.4％

300

1.2％

81.8％

716

1.4％

770

1.5％

107.4％

Recurring profit

337

1.3％

310

1.2％

92.0％

656

1.3％

790

1.5％

120.4％Net income attributable toowners of parent

103

0.4％

120

0.5％

116.0％

70

0.1％

350

0.7％

495.9％Net income per share (yen)

7.70

8.96

ー

5.26

26.12

－

ROE

1.0％

1.2％

ー

0.7％

3.4％

ー

 100-Yen shop opening/closing plan
【Opening】1H:72, 2H:68, Total:140【Closing】 1H:54, 2H:28, Total:82

Net increase: 58 shops

 100-Yen shop same-store sales target：
100.0％ YoY

 Revenue growth was limited due to withdrawal
from the AMANO business, but earnings
improved for the full year.
 Net income attributable to owners of parent is
expected to increase significantly as we expect
the decrease in impairment loss, although wewill continue to close low-profit and unprofitable
stores.

19

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

20

Business Plan

Initiatives for the 100-Yen Shop Business①

Offer higher price products Increase the number of higher price products (¥200 to ¥1,000)
to enhance the product lineups and revitalize sales floors.
 Introduce not only to tenant-type shops but also to
consignment-type shops, leading to an improvement in grossmargin for the entire Group 862 items as of the end of August. Aiming for the introductionof 1,300 items as of the end of 26th term.

Inter-group collaboration
 Trial collaboration with discount shops "Real"and lifestyle products businesses to createsynergies among Group businesses (Photograph:
Watts Kadoma Minami Shop with a product section of Real)

Full 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 accumulated
POS data with all shops, not only at each shop.

21

Business Plan

Initiatives for the 100-Yen Shop Business②

Moves toward cashless paymentsCashless payment services currently available:credit cards, electronic money, iD, nanaco, WAON, and Rakuten Edy.
 As of the end of August 2019, cashless payment is available at 218 shops
among the 465 tenant-type shops.
More than 200 of our shops are participating in the Cashless and Consumer
Redemption Business (cashless point redemption business)

Streamlining cash
registers

Introduction of Smartphone Saifu App






The aim is to increase repeat customers and win Watts fans
Utilize for events at the time of opening and sales promotions atexisting shops(Example: “Stamp xx times campaign”, etc.)
Introduced at about 200 shops, membership exceeded 66 thousand
The number of customers at shops using the service increased,
contributing to the acquisition of a certain number of repeat
customers

Introduce automatic change
machines on a trial basis atsome shops
Currently verifying the effects
of reducing the time required
for settlement processing

22

Business Plan

Initiatives for Overseas Business
小物家园 “KOMONOKAEN”

KOMONOYA[Expansion of wholesaling][Further improvement of existing markets]

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 “130 shops.” The Company will continue tokeep an eye on entering a promising market

Improve novelty of shops through strategic renovations
Replacement of products and improvement of ordering
based on POS data
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
23

Business Plan

Initiatives for Other Businesses Plan to open 2 new shops (including Seibu Higashi-totsuka Shop to open in
October). Carefully select locations to grow as income generating business.
 Conduct sales promotion activities such as distribution of sales information andevent information by individual store via LINE official accounts, promotion of new
products via Instagram Improvement of customer service level including wrapping skill

 Plan to open 2 new shops (including Kawasaki Le FRONT Shop opened in
September).
 Review shop operations to promote transition to low operating cost shops.
 Promote redevelopment of past popular (best-selling) products and developing
original Japanese products. Continue to focus on evergreen and fast-selling
products.
 Strengthened sales promotion by effective coupon distribution and developmentof SNS contents and other actions for the Japanese market.

 Plan to open 1 new shop, reduce and optimize shop opening costs
 Establish a structure that creates operation synergies with 100-Yen shops
 Strengthen liquor sales and increase customer drawing power24

Contents
Financial
Overview

Operating Results for the Fiscal Year
Ended August 2019

P2 – P7

By Business

Situation of Each Business for the
Fiscal Year Ended August 2019

P9 – P17

Business Forecasts for the Fiscal
Business Plan Year Ending August 2020 andEfforts toward Each Business

Reference

About Watts GroupP19 – P25

P27 – P34
25

Reference

Brands of Watts Group

Domestic 100-Yen shop business

Overseasbusiness

Other domestic
business

26

Reference

Overview of Other Businesses“Buona Vita,” a variety store
which proposes a
comfortable life. Operates
20 shops as of the end of
August 2019. The photo isnonowa Higashikoganei
shop which opened in April
2019

Collaboration shop
between 100-Yen
shop and grocery

Community-based small
discount shop.
Operates 6 shops as ofthe end of August 2019.

“Søstrene Grene”, a joint
venture in a life-style goods
shop offering North European
items. Operates 5 shops as ofthe end of August 2019

Import andwholesale ofEuropean taste
lifestyle goods

27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 to get more followers

 Launched our official SNS accounts in the
100-Yen Shop business!
 The number of Instagram followers has
exceeded 60,000 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.

28

Reference

Company Profile

Establishment
Meaning of the Company’s nameFebruary 22, 1995 (Currently the 26th 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)
3,311 employees (as of August 31, 2019) *Part-time workers included
1,312 shops (as of August 31, 2019) *Other shops included29

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

FY8/19Sales¥51.3bn

No. ofshops

1,312 shops

Consolidated sales
No. of Group shops at the end of period

30

Shareholder Composition

Reference

Individual and others
Financial institutions

FY8/18Other companies
Securities companies

Foreign companies and others
Treasury stock

24.55%

43.97%

16.93%

0.29%

11.72%
2.51%
0.88%

FY8/1948.22%

24.57%

10.85% 11.87%
3.58%

Total number ofshares issued
Number ofshareholders

FY8/17

FY8/18FY8/1913,958,800

13,958,800

13,958,800

sharessharesshares8,316

15,225

17,590 Number of shareholders

YoY－+2,365

Ownership ratio
Individuals and others
Other domestic
companies
Foreign companies
and others
Financial institutions
Securities companies
Treasury stock

37.54%
24.55%

43.97%
24.55%

48.22%
24.57%+4.25P+0.02P

23.18%
11.52%
0.68%
2.51%

16.93%
11.72%
0.29%
2.51%

10.85%
11.87%
0.88%
3.58%△6.08P+0.15P+0.59P+1.07P(Note) The figures are rounded to the third decimal place and may not add up to 100% when adding the ratios of each section.

increased by 2,365 fromthe previous fiscal yearend.

 Ownership ratio of
individual shareholders
increased by 4.25
percentage points YoY.

 The increase in treasury
stock is due to theacquisition of 150,000 oftreasury stock during thecurrent fiscal year.
31Dividend Policy

Reference

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

FY8/17

FY8/18FY8/19Dividend payout ratio

190.1％

28.3%
7.9％
2.2%

32.1%
24.2%
8.7％

6.2％

2.1%
2.0%

¥15.00¥15.00¥15.00

16/8

17/8

18/8

1.3%

0.7％

Net income per share (Yen)

53.04

61.96

46.79

5.26

Dividend per share (Yen)

15.00

15.00

15.00

10.00

Dividend payout ratio

28.3％

24.2％

32.1％ 190.1％

Dividend yield

1.6％

1.1％

1.6％

1.6％

ROE (Return on Equity)

7.9％

8.7％

6.2％

0.7％

DOE (Dividend on Equity)

2.2％

2.1％

2.0％

1.3％

*Dividend payout ratio for each fiscal year is calculated based on the stock
price of accounting date.
*Payout ratio for FY8/19 is calculated based on the stock price as of today.

¥10.0019/8

32

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 FY8/19.
 We will plan more attractive benefits with reflecting your opinions and suggestions.
33

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