Nitori Holdings Co., Ltd.
Financial Results Presentation
for the Fiscal Year 2017

March 27 , 2018
【DISCLAIMER】
IN-HOUSE TRANSLATION

TSE1st.&Sapporo Code : 9843

50th anniversary & achieved growth bothin sales and profit for 31 consecutive fiscal years
FY1987
Numberof Stores
Net Sales
Ordinary
incomeOrdinary
incomemarginResults

FY2017

Net Sales(Billions of Yen)

16 Stores

523 StoresCompare to FY1987

33-Fold

Results

10.3 B yen

572.0 B yen

Compare to FY1987

55-Fold

Results

0.5 B yen

94.8 B yen

Compare to FY1987

177-Fold

Results

5.2％

Ordinary Income(Billions of Yen)

572.0
94.8

512.9
458.1 87.5

16.6％
331.0
314.2
59.1

286.1

348.7
62.1

387.6
63.4

417.2
75.0
67.9

53.5
47.4

156.7
108.7
4.3
0.5

0.1

10.3 17.7
0.5

1.3

30.8 48.9
1.9

3.5

19.0
13.0

’68.2 ’82.2 ’88.2 ’93.2 ’97.2 ’00.2 ’04.2 ’06.2 ’10.2 ’11.2 ’12.2 ’13.2 ’14.2 ’15.2 ’16.2 ’17.2 ’18.2

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

2Number of stores, customers

523Stores
1 Store→100 Stores

36 Years

100 Stores→

200 Stores6 Years

200 Stores→300 Stores

3 Years

300 Stores→400 Stores

3 Years

400 Stores→500 Stores

2 Years

Number of stores
Number of customers(Millions)

420

244

268 300

Achieved 500 stores 217
47.11
43.39
on 6 th Oct. 2017
38.00

331

52.38
49.01

373

523
82.01
471
70.07

60.50

54.49

130
100

1102133

18.70

50
10.06

’68.2 ’82.2 ’93.2 ’97.2 ’00.2 ’04.2 ’06.2 ’10.2 ’11.2 ’12.2 ’13.2 ’14.2 ’15.2 ’16.2 ’17.2 ’18.2
Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

3Overview of Consolidated Financial Results（Billions of Yen）

FY2017
Actual

FY2016(to sales) Actual

512.9

Change(to sales)(YOY)

Net sales

572.0

Gross profit

314.7 55.0%

278.2 54.2% 36.5 113.1％

SG&A
expenses

221.4 38.7%

192.4 37.5% 29.0 115.0％

Operatingincome93.3 16.3%

85.7 16.7%

7.6 108.9％

Ordinary
income94.8 16.6%

87.5 17.1%

7.3 108.3％

Profitattributable toowners of parent

64.2 11.2%

59.9 11.7%

4.3 107.0％－

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布－59.1 111.5％

4

Consolidated Balance Sheets（Billions of Yen）
20 Feb.
2018

20 Feb.
2017

Change

164.0

170.1

(6.1)

63.3

70.5

(7.2)

52.7

48.9

3.8

386.4

317.6

68.8

(Property, plant and equipment)

291.3

248.0

43.3

Land ＋40.2(Investments and other assets)

81.2

55.8

25.4

Investment securities +23.3

550.5

487.8

62.7

Current liabilities

83.4

75.7

7.7

負 (Accounts payable - trade)
債(Short-term loans payable)の部
Non-Current liabilities

19.6

16.0

3.6

2.0

0.6

1.4

25.4

17.3

8.1

(Long-term loans payable)

8.0-8.0Total liabilities

108.8

93.0

15.8

Total net assets

441.6

394.7

46.9

Total liabilities and net assets

550.5

487.8

62.7

Current assets(Cash and deposits)

資(Inventory)
産のNon-Current assets
部

Total assets

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

Major factors
on changes

Net income ＋64.2

5

Consolidated Cash Flows（Billions of Yen）

FY2017
Operatingactivities

Investingactivities
Financing
activities

76.8

FY2016

77.9

Major factors
on changes

Change(1.1)(82.7) (42.0) (40.7)
0.6(6.4)

7.0

Net increase in cash &cash equivalents(5.1)

29.2 (34.3)

Cash & cash equivalents
at end of the year

60.966.0

・Income before
income taxes
・Depreciation andamortization
・Income taxes paid
・Purchase ofproperty,plant andequipment
・Purchase ofinvestment securities
・Cash dividends paid
・Proceeds fromlong-term loans
payable

+92.7
+13.0
(30.0)(60.8)(23.3)(10.2)

+10.0

(5.1)
さんかｋ

Free cash flow

(5.9)

Copyright 2018 Nitori Holdings All Rights Reserved

35.9 (41.8)■不許複製印刷配布（CF from Operating activities+CF from Investing activities）

6

YOY changes in comparable stores（％）

【Sales , YOY】

※Sales = Sales based on orders

115
110105104.4

101.6

103.2

105.5

102.9

1009590（％）

【No. of Customers・
Average Spend per Customer , YOY】
No. of Customers

115

10510095

104.5
99.9

98.0

ChangeFurniture

38.1％▲0.7ptHFa

61.9%+0.7ptAverage spent per customer

110

103.6

FY2017
Sales comp. by product

105.5
102.0
101.2

100.0

FY2015FY2016

104.8
98.2

90

FY2013

FY2014

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

FY2017
7Consolidated Sales
Net sales（Billions of Yen）

572.0 (111.5%）
512.9【Net sales】

AmountStore sales(Global)¥519.1bil. 110.3%

E-commerce

YOY¥30.5bil. 135.0%

B to B¥3.7bil. 120.4%

Renovation sales¥5.4bil. 103.4%

Rent income¥7.0bil. 113.8%

Others

¥6.0bil. 118.0%

Total¥572.0bil. 111.5%

Sales comp. by region
Hokkaido

4.6％ (0.3)pt &Shikoku

Chugoku

7.3％ (0.4)pt

Tohoku5.5％ (0.5)pt Okinawa

Kyusyu&8.6％ (0.3)pt

31.4％ +0.9pt EC

5.4％ +1.0pt

KantoFY2016FY2017

Copyright 2018 Nitori Holdings All Rights ReservedHokuriku&Koshinetsu

5.3％ (0.3)pt Renovati

1.6％ +0.0pt

Chubu&Tokai

10.3％ (0.1)pt Overseas

2.6％ +0.4pt

Kinki

15.1％ (0.5)pt Others

2.3％ +0.1pt■不許複製印刷配布

B to B &on8

Gross profit ・ SG&A expenses（Billions of Yen）

【Gross profit】

314.7（113.1%）

278.2

FY2016FY2017【Gross profit margin】+1.3pt▲1.2pt54.2%
FX impact
applied to thepurchase（¥108.12/$⇒¥103.92/$）

FX impact
applied to theinventory【SG&A】YOY

Ratio toChange
sales

Personnel¥64.3bil. 109.3%

11.2% (0.2)pt

Rents¥33.5bil. 119.7%

5.9% +0.4pt

Deliverycharge¥26.4bil. 111.7%

4.6% ＋0.0pt

Advertising¥16.7bil. 113.0%

2.9% +0.0Pt

Outsourcing¥14.0bil. 128.3%

2.5% +0.3Pt

Store fixtures
expense¥8.1bil. 204.7%

1.4% +0.6Pt

Depreciation¥11.3bil.

Capital investment¥64.1bil.

+0.7pt

55.0%（+0.8pt）

COGS
reduction

FY2016
Copyright 2018 Nitori Holdings All Rights Reserved

Amount

FY2017■不許複製印刷配布

9No. of stores as of 20 Feb. 2018

５２３Stores(+５２)

３９６(+23)９（+５）

DECO HOME

６２(+11)(Taiwan)２７（±０）(USA)

５(China)２４（+13）Prefecture

No. ofstores

Prefecture

No. ofstores

Prefecture

No. ofstores

Hokkaido

21 (+1)

Yamanashi

3

Shimane2

Hokkaido

21 (+1)

Ishikawa

5

Hiroshima

12Aomori

6 (±0)

Toyama4

Yamaguchi

6 (+1)Akita

5 (+1)Fukui

2

Kagawa

4

Iwate

3

Hokuriku & Koshinetsu

31

Tokushima

2

Yamagata

5 (+1)

Shizuoka

13 (+2)

Kochi

3

Ehime

6Miyagi

7

Aichi

26 (+2)

Fukushima

5Mie7Tohoku

31 (+2)

Gifu

Tokyo

46 (+8)Kanagawa

Chugoku & Shikoku

43 (+1)

10 (+3)

Fukuoka

19 (+1)

Chubu & Tokai

56 (+7)Oita

5

26 (+3)Osaka

31 (+3)Miyazaki

3

Saitama

30 (+6)

Kyoto

12 (+1)

SagaChiba

23 (+2)

Nara

5

Nagasaki

3

Gunma

6

Hyogo

23 (+1)

Kumamoto

6 (+1)

Tochigi

8 (±0)

Shiga

7

Kagoshima

7 (+1)

Ibaraki13

Wakayama

5

Okinawa4

Kanto

152(+19) Kinki

83 (+5)

Niigata

8Tottori

2

Nagano9Okayama

6

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

3 (+1)

Kyushu & Okinawa

50 (+4)

Japan467(+39)
10Major indicators of management efficiency（1）Sco Numpe berG r o u（pT w e l v e m o n t h）
sIndicator

unit

1

Return on assets％

Over 15％○2

Total asset turnoverTi
mesOver 2

3

Ordinary income
margin％4

Earnings per share

5

Target2017.2

2016.2

2015.2

2014.2

18.3

19.4

18.3

18.7

20.9

×1.10

1.14

1.12

1.15

1.28

Over 10％

○16.6

17.1

16.4

16.3

16.4

¥Over ¥100

○ 574.49 540.93 425.10 376.14 350.27

Return on equity％

Over 15%○15.416.6

14.7

14.9

16.8

6Equity ratio％

Over 60％

○80.1

80.7

79.5

76.4

76.8

7

Interest coverage

TimesOver 20○1,350 1,457

967

676

4858

Sales growth rate％

Over 10％

○

11.5

12.0

9.8

7.7

11.1

9

Ordinary income
growth rate％

Over 10％

×8.3

16.7

10.4

7.0

2.1

Ratio of gross profit to％Over 48％

○55.0

54.2

53.2

52.3

52.0

Ratio of break-even％

Under 80％

○66.5

65.0

65.6

65.3

64.9

10 sales

11 point to sales

2018.2

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

11Major indicators of management efficiency (2)Sco Numpe berIndicator

unitTarget

2018.22017.2

2016.2

2015.2

2014.2

Sale of furniture and home furnishing

12 Sales per tsubo

K Over ¥950K○1,017981

938

91590313 Stock turnoverTi
mesOver 9×5.6

5.5

5.4

5.5

6.0

Ti
mes

Over 2.9

○3.9

4.0

4.0

4.1

4.5

Ratio of profit％

Over 20％

○30.5

31.3

30.2

30.6

31.8

Ratio of real estate cost％

Under 25％

○21.8

21.1

21.7

22.5

22.3

17 cost to gross profit

Ratio of sales promotion％

Under ６％

○5.9

6.0

6.1

6.4

6.2

18 Labor productivity

MOver ¥10M

○19 Sales floor per labor

Tsubo

Over 60

×34.3

36.6

38.2

39.6

42.0

20 tsubo

KOver 150K

○155

151

134

131

134

21 Stock per tsubo

K

Under 90K

○

82

81

81

79

71

30〜35

○

33.4

33.4

33.3

32.8

32.6

14

Operating assets
turnover15 distribution

16 to gross profit

Operating income per

22 Average age of labor

Results （○won/×lost）
Copyright 2018 Nitori Holdings All Rights Reserved

18.67 18.99 18.43 18.47 19.11○18×4 ○18×4 ○14×8 ○13×9 ○15×7■不許複製印刷配布

12

TOPICS

Product development

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

14

Product development

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

15

Product development

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

16

Store openings in urban area
Shibuya

Ikebukuro

Sapporo(Nitori express)

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

17

Store openings in small population area
Shinjo(Yamagata)

Copyright 2018 Nitori Holdings All Rights Reserved

Nakatsugawa（Gifu）■不許複製印刷配布

18

DECO HOME
Number of stores

34817293951

62'11.2 '12.2 '13.2 '14.2 '15.2 '16.2 '17.2 '18.2

Ratio of original products（items）
70%
40%
10%
'17.2

'18.2

'19.2

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

19

E-commerce
QOQ of net sales
139.5%
136.2%

３Q

139.8%
４Q

２Q
125.0%
１Q

Refurbishment of product photos

Renewal top page

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

Improvement of Nitori App

20

O2O project

Logistics

EC

Aiming to find effective solutions through active
cooperation among different divisionStoresCopyright 2018 Nitori Holdings All Rights ReservedAdvertising■不許複製印刷配布

21

Corporate businessNet sales ¥3.7 bil.

Copyright 2018 Nitori Holdings All Rights Reserved

YOY 120％■不許複製印刷配布

22

Renovation business
Improvement in labor productivity through establishment of
separational system between sales and construction YOY 117%

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

23

Store openings in Taiwan
TainanTaoyuanCopyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

24

Store openings in China
Shanghai 3 rd store(Flagship store)

Retail Business inChina
Net Sales ¥6.2 bil.
YOY 176％
Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

25

Store openings in China
Store openings nationwide ＆ first Hfa store opening
Tianjin(north)Shenzhen(south)

Chengdu(west)

Wuhan(Hfa store)

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

26

Logistics measure〜Working toward human-friendly logistic warehouse~
Unattended/intelligent transport robotic system

ButlerCopyright 2018 Nitori Holdings All Rights Reserved

Devanning assist machine

EL-De/VAN■不許複製印刷配布

27

Alliance with Katitas Co., Ltd.

Mutual use of skill, know-how,sales and distribution network,
personnel

・Expand customer base and service
・Plan to develop “enhancing value ofhome living” product
Used homes with Nitori furnitures and interior goods

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

28

Grand opening of Otaru Art Village
September 1st
Former Mitsui Bank Ltd.
Otaru Branch

Stained Glass Museum（Former Takahashi Storage Warehouse）

Museum Shop

（Former Arata Corp Ltd.）

Nitori Art Museum（Former Hokkaido Takushoku Bank
Ltd. Otaru Branch）
Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

29

Main measures of FY2018

Operational goals toward 2022

A. To establish group growth projectory
and to face new challenges
B. To provide prosperous lifestyles tocustomers through products, stores, andservices
C. To reform system and structures thatsupport our global chain system

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

31

Deco Home ~Creation of New Branding~Opening of Deco Home Toresa Yokohama store in March 23, 2018

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

32

Business in China

Vision2022 200 stores
2032 1,000 storesConstruction of supply andcollection system nationwide※Complete foundation in 2018Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

Opened33

Establishment of Nitori Coordination

Connection of styles andcolors between

Coordination productcomposition ratio(Number of items)

FY2017 18％
FY2018 40％
Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

34

Approach for Achieving Long-term Vision【Change in businessenvironment】●Globalization●Expansion of businessarea●Change in productcomposition【Change in externalenvironment】●Competition withdifferent industries●Advancement intechnology

2022 ¥1 tril. in net sales
1,000 stores【Major Projects】●New core system●New ordering andinventory control system●O2O(Online ⇔ Offline)●Problems in logistics
and employment
Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

35

Ba Ria-Vung Tau factory (Vietnam)

FabricFurniture

88,000㎡
Open space

182,000㎡

Scale 400,000㎡（about 2.5 times larger thanHanoi factory）
Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

36

Taichang Logistics Center（China）
Global logistics baseTotal site area approx.
133,250m²
Total floor area approx.
186,050m²
Operation scheduled to startin Oct. 2018

Taichanglogistics
centerCopyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

37

Store roll-out plan in FY 2018
StoreTaiwan

USAEnd ofFY2017

４０５６２２７Openings＋２５＋２０+４End ofFY2018

４３０８２３１５２４ ５２３+１ ＋２０ ＋７０
６China＋２０USA+１

Taiwan+４Japan＋４５Copyright 2018 Nitori Holdings All Rights Reserved

ChinaTotal■不許複製印刷配布

４４ ５９３38

Plan in FY 2018
（Billions of Yen）

FY2018Plan(to sales)

FY2017
ActualChange(to sales)(to actual)

Net sales

614.0

Gross profit

330.0 53.7% 314.7

55.0% 15.3 104.8%

SG&A expenses

231.0 37.6% 221.4

38.7%

9.6 104.3%

Operating income
Ordinary income
Profit attributableto owners of parent

99.0572.0－

42.0 107.3%

16.1%

93.3

16.3%

5.7 106.0%

100.0 16.3%

94.8

16.6%

5.2 105.4%

64.2

11.2%

3.8 105.9%

68.0【Assumption】
Sales in comparable stores
FX rate－11.1%

YOY 102.5％ (NITORI+DECOHOME+EC)
YOY 101.0％ (NITORI)

111yen/$(completed exchange contracts(through June) : lower 108yen/$)

Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

39

Distribution of Profits to ShareholdersShareholders dividends increase
for consecutive 14 fiscal years（Unit : Yen）

【FY2017】
Annual dividend：92 Yen / share（prev.FY+10Yen）

92

97

2

Half-year dividend(Yen)
Fiscal year-end dividend(Yen)

47

Commemorative dividend(Yen)45※Adjusted stock splits

35

20
12.5

2.5
1.75

2.5
2.5

4
2.5

50

6.5
4.5

7

29

20

10
12.5

22.5

27.5

12.5

20

22.5

22.5

2630

35

45

47

'05.2 '06.2 '07.2 '08.2 '09.2 '10.2 '11.2 '12.2 '13.2 '14.2 '15.2 '16.2 '17.2 '18.2 '19.2（plan）Copyright 2018 Nitori Holdings All Rights Reserved■不許複製印刷配布

40

【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.