Financial Results
for the Third Quarter
From June 1, 2016 to February 28, 2017

ERI Holdings Co., Ltd.
March 30, 2017
Listed on Tokyo Stock Exchange (Code 6083)
http://www.h-eri.co.jp
1Summary
Decrease in revenue and earnings year-on-year Thanks largely to a strong growth of housings for rent construction, the number of new

housing starts was expanding but owner-occupied housings market was sluggish.

 In Building Confirmation and Inspection services, the number of Building Confirmations

increased but decrease in sales per unit and delay in large buildings’ Final Inspections
dampened growth.

 In Housing Performance Evaluation and its related services, Housing Construction

Performance Evaluation was still in slump.

 In Solution Services, recently performing well but it was still not enough to catch up with theprevious year's result in the cumulative period.

 In other segments, BELS and other new businesses performed well and Structural Evaluationof High-rise Buildings kept going on a recovery trend.

 In addition to upfront investment for energy conservation related new service, temporary

expenses associated with resolution of litigation were recorded.

Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

2

Financial Results for the Third Quarter Ended February 28, 2017

Consolidated results(Millions of yen)

FY2015 3Q

FY2016 3Q(Jun. 2015 – Feb. 2016) (Jun. 2016 – Feb. 2017)

ChangeAmountsRatio

8,685(8,571)

8,412(8,412)▲272(▲158)▲3.1%(▲1.9%)

Operating Income490

171

▲319

▲65.1%

Operating Income Ratio

5.6%

2.0%

--Ordinary Income502187▲314▲62.7%

Ordinary Income Ratio

5.8%

2.2%

--Profit Attributable toOwners of Parent339

109

▲230

▲67.8%Net Income per Share (Yen)

43.44

13.95

▲29.49-Gross Sales(Net Sales *)* Net sales is gross sales minus peer check fee, which was paid to a Structural Calculation Review Body through ERI group. After the revision of Building Standard
Law in June 2015, the procedure of confirmation was changed and applicants directly apply to a Structural Calculation Review Body separately from Building
Confirmation procedure. Both gross and net sales are described in FY 2015 disclosure, from FY 2016, however, these two sales results in one same sales, which has
been previously described as net sales. In addition, as the consolidated subsidiary TBTC changed its fiscal year-end from March to May in the previous year, wehave consolidated the company's settlement of accounts for the eleven months from April 2015 to February 2016.
Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

3

Financial Results for the Third Quarter Ended February 28, 2017

Consolidated results by segment(Millions of yen)

FY20153Q

FY2016
3Q

ChangeAmounts

Ratio

Operating
IncomeChangeBuilding Confirmation
and Inspection(Net Sales)

4,674(4,560)［53.2%］

4,552(4,552)［54.1%］▲121(▲7)▲2.6%(▲0.2%)

199▲75Housing Performance
Evaluation and its
related services

2,278［26.6%］

2,146［25.5%］

▲132

▲5.8%

▲11▲118

Solution Services*1723［8.4%］

654［7.8%］

▲68

▲9.5%

30

▲49Others

1,008［11.8%］

1,058［12.6%］

505.0%▲46▲75

Gross Sales Total

8,685［100.0%］*2

8,412［100.0%］*2

▲272

▲3.1%

171

▲319

*1 “Solution Services” split off from “Others” as an independent segment due to its growing importance in 1Q FY2016. In addition, TBTC’s services, solely included in“Others” previously, divided into each segment. 3Q FY2015 data in this table are also revised based on new segment recognition.
*2 Structural ratio [ ] is calculated using Net sales. (FY2015 8,571 million yen, FY2016 8,412 million yen)
Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

4

Financial Results for the Third Quarter Ended February 28, 2017

Main operating figures | Consolidated(Cases)

FY2015 3Q

FY2016 3Q(Jun. 2015 – Feb. 2016) (Jun. 2016 – Feb. 2017)

ChangeAmountsRatioBuilding confirmations

43,21844,890

1,672

3.9％

Final inspections

35,337

36,112775

2.2％

Housing design performance
evaluations of detached house

14,49615,328832

5.7％

Housing design performance
evaluations of collective house

16,351

17,761

1,410

8.6％

Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

5

Financial Results for the Third Quarter Ended February 28, 2017

Key service figures | Consolidated
FY2016 3Q

ChangeAmounts

Cases（Millions of Yen,Tax Excluded）

Amounts

Cases（Millions of Yen,Tax Excluded）

Building Confirmations for medium to large
size buildings (over 500 sqm)

3,959

1,009

91

14

Housing Performance Evaluations ofdetached houses*115,328

542

832

24

Technical Assessments for Long-life Quality
Housings*2

17,569267477

1Inspections for Housing Defect Liability
Insurance*3

18,395

221

441

4

Evaluations of Seismic Capacity andSeismic Retrofitting Plans

138

44▲119▲43

Structural Evaluations of High-rise Buildings(Skyscraper and/or Base isolation)

117

150

45

65

*1 Since the first quarter financial results explanation material (announced on September 30, 2016), the amount of Housing Performance Evaluations of detachedhouses is indicated by tax excluded amount. Along with that, the figures for the change from previous year is calculated by the tax excluded amount.
*2 The number of cases which the certification of Long-Life Quality Housing were issued.
*3 Jutaku Anshin Hosyo’s cases and amounts.
Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

6

Financial Results for the Third Quarter Ended February 28, 2017

New services operating figures | Consolidated(Cases)

FY20153Q

FY2016
3Q

ChangeAmountsRatio

Route-2 Structural Examination*142963620748.3%

Pre-completion Tentative Approval*170165

95135.7%

Assessment of Compliance with the BuildingStandard Law services*25664814.3%

BELS certification (Non-housings) *3

791385974.7%

BELS certification (housings) *3

-

1,964

1,964-%

Energy Pass certification*4

68211

143210.3%*1 The service started responding to the revision of Building Standard Law in June 2015.
*2 The service started responding to the release of “Guideline for conformity inspection of Building Standard Law on existing buildings
with no Inspection Certificate by utilizing Designated Confirmation and Inspection Bodies” (MLIT) in July 2014.
*3 The service started responding to the release of ”Guideline for the Building Energy-efficiency Labeling (2013)” (MLIT) in October 2013.
Coverage of BELS system expanded to housings in April 2016.
*4 The service, evaluation on insulating performance and HVAC efficiency of housings promoted by Japan Energy Pass Association,
started to add third-party certification system in January 2014.
Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

7

Financial Results for the Third Quarter Ended February 28, 2017

Changes of quarterly results | Consolidated
Quarterly net sales and ordinary income
Net sales(Millions of yen)

Ordinary income(Millions of yen)
400

4000350

3500300
3000250
2500

2001502000100

1500501000
0-100500

Ordinary income-50

Net sales
FY20123Q

FY20124Q

FY2013
1Q

FY20132Q

FY20133Q

FY20134Q

FY20141Q

FY20142Q

FY20143Q

FY20144Q

FY20151Q

FY20152Q

FY20153Q

FY20154Q

FY20161Q

FY20162Q

FY2016
3Q

0Until third quarter of FY2013, data is financial results announced by JAPAN ERI CO.,LTD.

Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

8Financial Results for the Third Quarter Ended February 28, 2017

Forecasts for FY2016(Millions of yen)

FY2016
Forecast *FY2015

Change11,470(11,356)

11,492(11,492)

21(135)

Operating Income

569421▲148

Vs. Gross Sales

5.0%

3.7%

－Ordinary Income

625

425

▲200Vs. Gross Sales

5.5%

3.7%

－

Profit Attributable toOwners of Parent414256▲157

Net Income per Share (Yen)

52.96

32.78

－

Dividend per Share (Yen)

30300

Gross Sales(Net Sales)*We announced “Notice on Revision of Earnings Forecast for the Fiscal Year Ending May 2017” on December 20, 2016.

Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

9Financial Results for the Third Quarter Ended February 28, 2017

Topics
 The Hiroshima high court confirmed Japan ERI’s overall lawsuit victory on the case concernedwith the breach of seismic standards. (February)Then, all the cases reported in Annual Securities Report were finished.

 M&A with EPA System Co., Ltd. was successfully completed. (March) Investment forstrengthening system division and improving work efficiency.

 Comprehensively revise the Building Confirmation and Inspection services fee

for the first time in ten years. (implemented on April)
Reflect expanding operation costs corresponding to increased workload and complexity, etc.
through the review process.

 Evaluation for Compliance with Energy Consumption Performance of Buildings

will start up .(scheduled in April)
Opportunity to share up in large size buildings services.
Held specialized seminar for customers at nationwide 34 branch offices andpreliminary counseling started.

Copyright © 2017 ERI holdings Co., Ltd. All rights reserved.

10

Financial Results for the Third Quarter Ended February 28, 2017