Financial Results for the First Six Months of
the Fiscal Year Ending March 31, 2021
November 4, 2020TOKAI Holdings
Corporation(Securities Code: 3167)

Agenda
1. Summary of financial results for thesecond quarter of the fiscal year ending
March 2021
2. Points for the second quarter of the
fiscal year ended March 31, 2021

1

Summary of financial results
for the second quarter of the
fiscal year ending March 2021
Katsuhiko Tokita
President & CEO
TOKAI Holdings Corporation

2

Points for the second quarter of the fiscal
year ended March 31, 2021
Steady growth of customer base in core businesses• Net increase of 39,000 from 3 million cases at the beginning of the fiscal year
• Although it was affected by restrictions on face-to-face sales in the first quarter, it
recovered in 2Q after the resumption of economic activity and achieved the internal
plan.
• Net increase significantly exceeding 16,000 cases in the same period of the previous
year

Minimize the impact of corona, landing on par with thesame period of the previous year and exceeding theplan• Despite the impact of corona on some businesses, such as weddings and banquets,
operating profit was flat YoY, offset by an increase in profits associated with anincrease in the number of customers in core businesses.
• All profit items exceeded internal targets and progressed3Second Quarter of Fiscal
Year Ending March 2021
M&A Progress(1 M&A and 1 alliance)

Further business expansion as a comprehensive
construction company
 In August 2020, Chuo Denki Koji Co., Ltd., which operates an electrical engineering business, became aconsolidated subsidiary in Aichi Prefecture Based on our technological capabilities and trust-based relationships cultivated through the developmentof our lifestyle infrastructure services, the Group designs and installs large-scale buildings and also
develops air-conditioning and water supply and drainage sanitation businesses.
 Through this project, we aim to further expand our business as a comprehensive construction company
by building a system for receiving orders for three major construction projects, consisting of airconditioning work, water supply and drainage work, and electrical work in the construction industry.

TOKAI

Chuo Denki Koji Co., Ltd.,

ChukyoArea

TOKAI service area

TOKAI

Air
conditioning
work

Water supply
and drainagework

3 major works inthe construction
business

Aiming to expand businessas a general construction
company

Electricalwork

5Entering the LP gas market in Vietnam
 Entered the LP gas market in Vietnam by acquiring the shares of two
subsidiaries under the Petro Center Group, a major Vietnamese LP gas
distributor, in June 2020.
 Our Group's overseas bases are the fourth new overseas base after ①
Shanghai, China, ② Taiwan, and ③ Myanmar.
④Vietnam (June 2020)
Petro Center GroupLP Gas Business4th overseas base

①Shanghai, China (April 2012)
TOKAI（Shanghai）Trade &Commerce Co., Ltd.
Aqua business②Taiwan (March 2013)
CloudMaster Co., Ltd.
Information③Myanmar (April 2014)

communications Services

TOKAI MYANMAR COMPANY Ltd.
LP gas piping work

6

Aim to expand the LP gas business Vietnam, which maintains the top growth rate among ASEAN member countries, is
expected to continue to grow steadily against the backdrop of an abundant working
population and an increase in foreign direct investment.
 The LP gas market in Vietnam is also expected to expand in the future, and a promisingmarket that is extremely attractive to our group as well
 Combine the LP gas business expertise that our Group has cultivated over many years tocontribute to the development of the Vietnamese LP gas market, and aim to expand thescope of our Group's LP gas business
Trends in demand for LP gas in Vietnam(Thousands of tons)

Petro Center
TOKAI Integration Group

Sales and technology
Safety management
Facility management
2,050

Stable supply
Strong demand

2,122

1,895
1,338

Expectations for
future expansion

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2025 FY2030※Figures up to FY2017 are actual ﬁgures based on IEAs. Estimates after FY2018

Development of the VietnameseLP gas market
Expanding our LP gas business7

13 M&A deals have been completed.
 In the M & A strategy of the medium-term management plan IP20 “JUMP”, a totalof 13 deals were completed with 10 M & A deals and 3 alliance deals.
City gas

City gas

Nikaho City Gas
Business

Isesaki Gas Co., Ltd.

Overseas

August 2019, businessPetro Center Group

alliance

Jun. 2020 Business

Acquired in April 2020

Akita

CATV

alliance

VietnamSENDAI CATV Co.,City gas
Shimonita-machi Gas

Ltd.

MiyagiBusiness

Acquired in March 2020

Acquired business in April 2019

CATV

Construction and Real

Gunma

EstateTokyo Bay Network

Nissan Tri Star

Acquired in July 2017

Construction, Inc.
Acquired in September 2019

CATV

Gifu

Okayama

TV Tsuyama Co., Ltd.

Aichi

Tokyo

IT/Communications

Shizuoka

Cyze Inc.

Acquired in February

Acquired in September

2018

2018

City gas

Construction and Real

AM’s Brain Inc.

October 2019 Joint

Chuo Denki Koji

Acquired business inAcquired in July 2019

Venture Company

Acquired in August 2020

October 2019

IT/Communications

CATV

EstateT&T Energy

Shioya8

Carefully select projects that contribute to growth andcomplete them at an early The 13 projects were completed, resulting in net sales of ¥8.5 billion, operating income of¥600 million, and the addition of 350000 customers, expanding the Group's businessearnings base

[M&A and alliance results](Millions of yen, thousands)

Business

Number ofcompanies

Investment
amountCity gas

4

1,953

ＣＡＴＶ

4

IT/Communicati
ons

OperatingincomeNumber ofcustomers

626

42

6

3,997

4,769

221

344

2

655

398

67

−

Construction andReal Estate

2

3,394

2,735

288

−

Overseas

1

2,992

−

−

−

Total

13

12,989

8,528

618

350

Net sales※City Gas includes two alliances

Currently considering 37 M&A deals worth ¥116.4 billion(*Including the above results)

9

Progress of Area Expansion Strategy

Expanding the Earnings Base through Area Expansion Strategy
 Opened new sales offices in Kasugai City, Aichi Prefecture and Yokkaichi City, Mie Prefecturein June 2020
 Expand the Group's share by expanding into new sales areas and realize sustainable growthin the Group LP gas business Opened a total of 11 sales offices since 2015. We will continue to expand our market shareand expand the earnings base of the LP gas business.
【 LP gas new bases 】
FY 2015

3 bases

Sendai, Iwaki, Toyokawa

FY 2016

2 bases

Nishimikawa, Gifu

FY 2017

2 basesTajimi, Okayama

FY 2018

1 baseKyushuFY20191 bases

Tsu

FY20202 basesKasugai, Yokkaichi (New)Tajimi Sales
OfficeKasugai(New base)Iwaki Sales
Office

Gifu
Tokyo
Aichi

OkayamaContinue to expand ourmarket share.

Shizuoka
Mie

Fukuoka

Sendai Sales
OfficeGifu Sales
OfficeOkayamaSales Office

Kyushu Sales
OfficeMiyagiTsu Sales
OfficeToyokawa
Sales Office
Nishi-Mikawa
Sales Office

Yokkaichi(New base)

Sustainable growth
Expend the income base11

“ABCIR+S” Strategy Progress

An acronym formed by the first letters of AI, Big data, Cloud, IoT, Robotics, andSmartphones. It refers to the Group’s strategy toward technological innovation.

Strengthen marketing through real × digital D-sapiens highly predicts customers' behavior patterns by analyzing BigData and
ABCIR+Sの取り組み
AIs.
 In the first half of the fiscal year, we found signs of cancellation of Aqua andimplemented measures to deter cancellations.
〈 Automated identification of customers who are likely to cancel their subscriptions andimplementation of a survey with special benefits 〉

Modeling

Automatic extractionof churn signs

Approach

Measuring
Effectiveness
Churn rate in the
preliminary churn group

AI
Order history
Gender and age
Participation in web
history and events
TLC Point History...
Etc.

Down 20%

３Predicted churn rate ismore than double

Survey with special
benefitsthat of other generalusers

In the second half, we will implement dozens of cross-selling retention
measures that combine D-sapiens and TLC membership services in earnest.

13

Efforts to Improve Business Efficiency

Promotion of work efficiency and work style reform using ICT
 Promote operational efficiency and work style reforms by utilizing a new core system utilizing the latest
ICT In the LP gas business, we will promote automated meter reading using LPWA terminals and pursue more
efficient delivery operations by analyzing acquired meter reading data through AI, such as optimizing
delivery timing and distribution routes.
 By linking acquired data with D-sapiens, we will predict lifestyles and behavioral patterns of eachindividual customer, which will also lead to the development of new businesses.

Auto meterreading

LPWA terminal

AI analysis

Back office
Paperless Predicting customer
lifestyle patterns
・・・

Data

New coresystemsDatalinkage Predicting customer
behavior patterns

New business

Meter reading

Promotion of businessefficiency and work stylereformDelivery
Expansion of
telecommuting

Optimize
distribution routes

Optimization ofdelivery timing

15

Multiple transaction rate is over 20% by the end of FY03/21
 With TLC (Total Life Concierge) as our group vision, we provide comprehensive and delicate support
for our customers' comfortable lives through various services provided by our group.
 Improve multiple transaction rate to realize TLC vision and increase customer lifetime value
 Plan to increase the multiple transaction rate to over 20% by the end of FY03/21

Insurance

Wedding
ＬＰ gasElectricity

Aqua『 Ｔｏｔａｌ Life Concierge 』
City gas

Housing

Nursing

ＣＡＴＶ

Multipletransaction rate

Security

Internet

MVNO

FY2019Sep. 2020

FY2020

18.8%

19.5%

20.0%

41

Advance into new fields toward the realization of TLC
 Realizing the provision of "Relief / Safety", "Convenience / Comfort", and "Joy / Worthliving" that anticipate the needs of daily life, which is useful for customers' lives
 Enter into new service fields to realize TLC vision

Relief / Safety

Convenience /ComfortJoy / Worth living

New Fields

New Fields

New Fields

Existing business

Existing business

Existing business

CATV

City gasＬＰ
gasElectricity

HousingRenovation

CATV

MVNO

Wedding

WWW

InsuranceSecurity

Aqua

Internet

Farm

NursingStart in February 2019
Rental farm service provision42Consideration of healthcare services also progressed
Based on health, future life will be richer andmore rewarding
Services aimed at preventing cancer andlifestyle-related diseases and improving health
Build a collaborative business model withbusinesses that have a proven track record in
the healthcare field
18

Finally In addition to completing the medium-term management plan IP20"JUMP as the
final year, this fiscal year is a key phase that combines both the creation of afoundation for the next medium-term plan

① Promoting M&A and ② Implementing ABCIR + S,
③ Deepening of TLC and progress of each

Directing group growth from a medium- to long-term
perspective
19

Key points for the second quarter financial
results for the fiscal year ending March 2021

Steady growth of customer base in core businesses◎ Continuing customer count reached 3,042,000 at the end of Q2, up 39,000 from 3,003,000 at the
beginning of the year.
◎ Earnings base further expanded for mainstay gas, CATV, and Hikari Collaboration businesses.
(LP and City) Gas(Thousands of customers)

CATV

+15

760
25

Hikari Collaboration

+25

1,250

1,179

1,200

15

7
740

728

13

11
15

+9

332

333
331

1,150 2

+14

+14

329
327

-4

1,100
-3

700

325

9

1,050
10
680

696

5
660

1,046

1,000

1,076

328

321

324

-13

319

950

670

317
900-186400

3Q2 FY03/19

323

-8

7

5

335

20
720

+11

+5

+8

Q2 FY03/20

Q2 FY03/21

Q2 FY03/19

Q2 FY03/20

Q2 FY03/21

315
Q2 FY03/19

Q2 FY03/20

Q2 FY03/21

Customer count at end of period

Customer count at end of period

Customer count at end of period

Net increase

Net increase

Net increase

Note: Figures are rounded to the nearest thousand.

21

Points of net increase in core business◎ In the gas business, acquisitions of trade areas increased by 30% year-on-year, and market share
expanded in new areas.
◎ In CATV business, telecommunications services rose 2.2 times year on year, a substantial increase◎ The telecommunications business was halted by a net decline in the sum of ISPs and LIBMO.
◎ The aqua business recovered the pace of net increase on a par with the same period of the previous
fiscal year after resuming economic activities.
Net increase(Thousands)

FY2020_2Q（Current）

FY2019_2Q

Gas (LP and City
Gas)

+15

+11

+4 • Increase of 3000 LP gas acquisitions in(Acquisition of market
area)

（+12）

（+9）

（+3） • 11 new LP gas sites added +4000 sites

CATV

+25

+14

+11 • Communications services increased 2.2 times(of which, communication
services)

（+19）

（+9）

（+10）

ICT

+1

-17

improved by 17,220 due to an increase of+18 • ISP
9309 new subscribers and a decrease of 7911

（of which, ISP）

（-3）

（-20）

（+17）

YoY

Pointscommercial areas

year-on-year

cancelled subscribers• Despite a net decrease of 1561 in 1Q, net

Aqua

-0

+3

increase of 1314 in 2Q recovered at the same-3

pace as in the same period of the previous
fiscal year

22

Significant increase in monthly billing volume
in core businesses◎ By expanding the number of customers, which is the earnings base, it will leadto an increase in revenues from an increase in the number of monthly billings
Monthly billing volume(thousands)

5,644
3,251

1,963
1,957 1,956 1,955
5,344

3,180

1,944

5,269

340,000 (up 11.8%)

3,126

5,156
5,040

3,063

5,210

1,110,000 (up 24.3%)

1,909

120,000 (up 6.5%)

3,010
2,950
2,908

1st

4,539

2nd

FY2017

1st

2nd

FY2018LP gas

1st

2nd

FY2019

1st
FY2020

1st

1,844

2nd

FY2017

1st

2nd

FY2018

CATV

1st

2nd

FY2019

1st
FY2020

1st

2nd

FY2017

1st

2nd

FY2018

1st

2nd

FY2019Hikari Collaboration

1st
FY202023

Remained the same level as the same period of theprevious fiscal year and exceeded the plan

◎ Despite an increase in sales due to an increase in the number of customers and an
expansion of the information and communications business for corporations, sales
decreased due to a decrease in selling prices resulting from a drop in the purchase price ofgas and a delay in sales activities in the aftermath of Corona.
◎ In terms of profits, some businesses were affected by Corona, but operating profits landed
at the same level as the same period of the previous year, supplemented by an increase inprofits due to an increase in monthly billing due to an increase in the number of customers
and an increase in the information and communications business for corporations.
◎ Exceeded the internal plan and the progress rate (36%) against the full-year plan is also
higher than the historical level(Millions of yen)YoY

Q2 FY03/21 results Q2 FY03/20 results(April 1, 2020–September 30,
2020)(April 1, 2019–September 30,
2019)

Sales

89,836

93,015-3,179-3.4%

Operating profit

5,452

5,500

-48

-0.9%

Recurring profit

5,499

5,608

-109

-1.9%

Net income

3,279

3,492

-212

-6.1%

EPS (yen)

25.04

26.67

-1.63

-6.1%

Change% change24

YoY comparison of operating income by segment◎ Energy, CATV, and Aqua recorded higher profits due to increased customer numbers, andinformation/communications for corporations also performed well
◎ The decline in the number of customers for information and communications forindividuals has been halted.
◎ Impact of delayed sales activities due to the collapse of Corona on weddings and building
facilities and real estate
6.10

5.90

Operating income（Billion）

5.70

Customers

2.92mn

-0.23
0.42

0.09

5.68

-0.22

Customers

0.05

5.50

5.30

5.50

EnergyIncrease in
the number
Acquisition
costs

5.10

4.90

4.70

ICT

CATV

+0.5

For corporate+0.2

Increase in
the number +0.21-0.19

Acquisition
costs

-0.27

Other costs

Other costs

-0.26

LIBMO

+0.05

Equipment
sales
Temperatu
re, etc.
Purchasing
costs

-0.26

For
Individuals

-0.21

-0.12

Building andFacilities Real
EstateRenovation
Building
andFacilities

-0.08
-0.14

Aqua
Increase in
the number +0.11
Acquisition
+0.1
costs
Other costs

-0.16

-0.15
Other
Businesses,
Adjustments
Wedding,etc.
Adjusted
amount3.04mn

5.45

-0.19
+0.04

+0.11
+0.52

4.50

FY2019_2Q
分類 1

エネルギー

情報通信

※ Changes are before allocation of indirect costs.

CATV

建築不動産

アクア

その他調整額FY2020_2Q
分類 725

Developing Growth Investments on the Backdrop ofStrengthening Equity Capital◎ Capital adequacy ratio further improved by 2.5 points◎ Operating cash flow increased by 4.1 billion yen due to an increase in working
capital such as collection of receivables.
◎ Investing cash flow increased due to aggressive growth investments, and free
cash flow remained unchanged from the same period of the previous fiscal year.

38.0

Equity Ratio％

End of March 2020

48.3

Interest-bearing Debt

Bn

End of March 2020

10.7

Operating cash flowBn

End of September 2019

-6.9

Investing cash flowBn

End of September 2019

3.8

Free cash flowBn

End of September 2019

Interest-bearing debt/
EBITDA ratio

1.6

Times

End of March 2020

40.5

➡

％

End of September 2020

48.3

➡

Bn

End of September 2020

14.8

➡

Bn

End of September 2020

-10.7

➡

Bn

End of September 2020

4.1

➡

Bn

End of September 2020

1.5

➡

Times

End of September 2020

※ Interest-bearing debt to EBITDA ratio for the year ending September 2020 is based on annual prospective EBITDA

26

Maintain growth trend with higher sales and profits◎ Fourth consecutive year of sales growth and third consecutive year of record earnings,
continuing the growth trend◎ In addition to completing the Medium-Term Management Plan IP20"JUMP, we will continue
to focus on expanding our customer base for medium-to long-term growth, while laying the
groundwork for growth in the next Medium-Term Management Plan.
◎ Working on the themes of "Further promotion of M&A," "Implementation of ABCIR + S,"
and "Deepening TLC"
(Millions of yen)

YoY

FY03/21 forecast

FY03/20 results(April 1, 2020–March 31, 2021)(April 1, 2019–March 31, 2020)

Sales

205,300

195,952+9,348+4.8%Operating profit

15,00014,224

+776

+5.5%

Recurring profit

14,87014,479

+391

+2.7%

Net income

8,460

8,241

+219

+2.7%

EPS (yen)

64.60

62.93

+1.67

+2.7%

3,105,000

3,003,000+102,000+3.4%

Customer count at
end of fiscal year

Change% change27

Policy of consistently providing stable dividends◎ We plan to pay an annual dividend of ¥28/share under our dividend policy of striving for continuousand stable dividends.
◎ No change was made to the dividend forecasts (announced May 8, 2020).

28 yenper share

30

20

10

28 yen28 yen28 yen pershare
per shareper shareper share

14

14

14

14

14

14

14

14

FY2017FY2018FY2019FY2020（Forecast）

6

25

15

28 yen12 yen12 yen12 yen12 yen14 yenper share8

per shareper shareper shareper share

6

6

6

6

11

11

5

6

6

6

6

6

FY2011FY2012FY2013

FY2014FY20150Interim dividend

FY2016

Year ended dividend

Commemorative dividend

28

Prospect of business performance and future outlook described in this material are ourestimation based on information available as of this moment, and potential risk anduncertainties are included. Therefore, please note that actual business performance ispossibly very different from the described future outlook due to change of various factors.

For inquiry related to this material, please contact us as follows:
IR Office, TOKAI Holdings Corporation
11F Hamarikyu Intercity, Kaigan 1-9-1, Minato-ku, Tokyo 105-0022
TEL: (03)5404-2891
FAX: (03)5404-2786
http://tokaiholdings.co.jp
e-mail: hd-info@tokaigroup.co.jp

We create and spreadhappiness.