Financial Results for the First Half of the
Fiscal Year Ending March 31, 2018
TOKAI Holdings Corporation(Code: 3167)
November 1, 2017

Highlights of Interim Results and Group Direction

TOKAI Holdings Corporation
Katsuhiko Tokita, President & CEO
1

Highlights of Interim Results
Revenue for this term turned to profit from the second half and started steadily towards 14 billion yen
operating income for the next fiscal year

◎ Net sales were 84.9 billion yen, an increase due to customer growth, etc. (+ 3.3% YoY)–

In terms of profits, we carried out upfront investment and declined profit as initially anticipated–Meanwhile, an increase of 400 million yen (+ 14.9%) from the expectation contributed by an increase incustomers of CATV business and an increase in orders for corporate customers in telecommunications business◎ The number of customers as a group's earnings base increased by 263,000
compared with the beginning–

Customer acquisition in the LP gas business and CATV business has been steady. The net increase in thenumber of customers during the interim period is 13 thousand, which is twice as strong as the customer net
increase of 6,000 in the previous term.

–

The increase in the number of customers by M & A of 250 thousand also added, and as of the end of the interim
period progresses to 84% of the plan for the number of customers at the end of this term.

◎ Financial position improved, the Equity ratio increased by 1.5% to 36.0%–

Although free cash flow was negative (-6.4 billion yen) due to aggressive investment, the outstanding balance ofinterest-bearing debt increased slightly due to the exercise of convertible bonds (+ 2.4 billion yen).

–

Maintained an interest-bearing debt/EBITDA ratio at around 2.0x, the same level as the previous fiscal year.

2

Three keywords heading for the foundation of 100 years
The Company Established in 1950, and has become a holding company in 2010, whichis the 60th year.
The final year of the "Innovation Plan 2020 JUMP" will celebrate 70 years.
These four years are important for the next thirty years, that is, for building thefoundation of the group heading toward the 100th year.

"Sales force""Open Innovation to Capture the Third Wave""Utilizing Group Comprehensive Power"3

Sales force is the source of competitiveness of the group
The source of competitiveness of the group is "DNA of sales" which is inherited from the era of direct
gas sales
With this sales force, the second growth period grew in the CATV business and telecommunications
business and built 2.9 million customers
Advance this strong sales force to "advanced sales" and further expand customer base

Renov
ation

Housingequipment

Introduction and utilizationof AI and big dataRealestateSecurityGas
Insurance

PPS

The source ofcompetitivenessisCommunic
ation forcorporate

Aqua

Sales force
Telecommunicatio
ns

ISP

CATV

Broadcast

2.9 million customer base

MobileBraidalMVN
O

NursingcarePeripheral services to enhancecustomer satisfaction

4

Open Innovation Capturing the 3rd Wave
The 1st wave was the gas business, founded in 1950, contributing to the Stability and Improvementof the Quality of People's Lives.
The 2nd wave was the entry into the information and communications business from 1988. Throughthese efforts, we have contribute to the sophistication and diversification of the people's living
standards, and establish a solid business foundation from the Tokai region to the entire country.
Taking advantage of the new 3rd wave, we will create new value and services that customers want in
the next and make them our own business. In order to achieve this, we will promote open innovation.
9hange in TOKAI group sales

2nd wave
Information andCommunication Revolution

1st wave
Reconstruction after the war and improvement ofstandard of living of the people
Contributing to the stabilization of people's
lives and improvement of quality of life
through energy business centered on gas

1950

1955

1960

1965

1970

1975

3rd wave
The Fourth Industrial Revolution
IoT, AI, Renewable Energy Sharing
Economy, Virtual 9urrency, Electric
Vehicles, etc.

Provide new services such as CATV
and broadband to customers
cultivated in the gas business,thereby contributing to thesophistication and diversification of
the standard of living of the Japanesepeople.

1980

1985

1990

1995

Gas

Telecommunications

2000

2005

2010

New buisiness

2015

2020

9urrent

2025

2030

2035

2040

2045

2050

5

Start from “OTS(On The Spot) house”
The OTS House is a fully self-sufficient home for water and electricity.
In addition to CATV, broadband, aqua, and security, it incorporates new value and services
that customers want in their future lives, such as smart locks that use IoT technologies, andhome appliance controllers that control a variety of home appliances from the outside.

6

Launch of intelligent home services
Entered into a tie-up with ITS Communications Inc. and launched Intelligent Home Service in November in the
CATV business (in Tokyo and five prefectures).
One of the core IoT services, and there is significant market potential (approximately five times the market in thenext six years).
The Group's strengths in sales capabilities and customer base will be fully utilized, and leverage expertise in sales
methods and customer response accumulated through diversified management, such as telecommunications,
ISPs, and security.
Intelligent home service provided by Tokyu Group's cable TV company
It's Communications

Starting with the CATV business, we will promote sales
as one of the new products of the TOKAI groupIP
cameraSmart lock

MotionsensorDoor,
Window
sensorInternet

Home
gatewayHomeelectronics
controller

Smart
light

Varioussensors

License sales

Customerdevelopment, contract,
construction
maintenance etc.

2.9 Million TOKAI Group
Customers

Smartphone,
PC, etc.

TOKAI Group companies

With home automation function, easy control of household appliances

7

Strong growth by leveraging the Group's
comprehensive strengths
In order to differentiate ourselves from our competitors, we need to be the most userfriendly service provider for our customers in the field of services in their daily lives.
In the new medium-term plan, TLC's numerical target is to increase the number ofmultiple transactions to 20% of group customers.
Over the next four years, the Company will continue to add new value and services inareas where it has been unable to proceed with multiple transactions.

Multiple transactions to
20% of group customers

In the new medium-term plan,
TLC's numerical target

Add new value and services

Expanding customer base

8

Points of interim period
settlement of accounts

9Lower profits on higher sales as expected in 1H◎ Sales up by 2.7 billion yen (+3.3%) YoY, due in part to Tokyo Bay Network M&A effect(700 million yen)
◎ Operating profit down due to 2.0 billion yen in upfront spending to acquire newcustomers and launch new services, but exceeded initial target by 400 million yen(14.9%) on stronger-than-expected growth of customer base and performance of
CATV and communications services to corporate customers(Sales · Profit: Million yen, Earnings per share: Yen)YoY change
1H FY03/18
Results

1H FY03/17
Results

Versus initial forecasts

Initial forecasts
Amount ofchangePercentchange (%)

Amount ofchangePercentchange (%)

84,911 82,201 86,000 +2,709+3.3 -1,089-1.3

Operating profit

3,114

4,406

2,710 -1,291

-29.3

+404

+14.9

Recurring profit

3,143

4,428

2,650 -1,284

-29.0

+493

+18.6

Net income

1,246

2,384

1,080 -1,137

-47.7

+166

+15.4

EPS (Yen)

9.76

21.00

8.52 -11.24

-53.5

+1.24

+14.6

Sales

10

Customer count up a sharp 260 thousand from start of FY03/18◎ Net increase of customer count in existing businesses (excluding M&A) of more than
2.0x from 6 thousand in full-year FY03/17 to 13 thousand in 1H FY03/18◎ Exceeded initial target on bringing forward M&A of Tokyo Bay Network◎ Will lead to earnings growth due to increase in customer paying monthly fees from Q3
onward(Thousands of customers)

2,415

Net increase of
263 thousand(+10.3%)Gas+6 thousand
CATV +261 thousandAqua+6 thousand(and others)

2,445

2,519

2,537

2,827
263

2,558

2,564
250
Net increase of
more than 2.0x

72
FY03/1230
FY03/13
Net increase73
FY03/14

純増件数（既存）(existing businesses)

19

20

6

13

FY03/15

FY03/16

FY03/17

1H FY03/18

Net increase

純増件数（M&A）(M&A)

Customer count at

期末顧客件数the end of term

11

Taking advantage of strengthened equity capital to invest for growth◎ Equity ratio up on progress with conversion of convertible bonds and sustained quarterly net
profit growth◎ FCF: 2.0 billion yen upfront spending to acquire new customers and launch new services, andaggressive investment in business expansion such as 1.2 billion on Tokyo Bay Network M&A◎ Maintains interest-bearing debt/EBITDA ratio at 2.0x

34.5

Equity ratio%

As of March 31, 2017

Balance of interestbearing debt

54.1

billionyen

As of March 31, 2017

12.0

Operating cash flow

billionyen

1H FY03/17-4.7

Investment cash flow

billionyen

1H FY03/17

7.4

Free cash flow

billionyen

1H FY03/17

Interest-bearing
debt/EBITDA ratio

2.0 X
FY03/17

➡
➡
➡
➡
➡
➡

36.0

%

As of September 30, 2017

55.0

billionyen

As of September 30, 2017

7.9

billionyen

1H FY03/18-6.9

billionyen

1H FY03/18

1.0

billionyen

1H FY03/18

2.0 X
1H FY03/18

12

Point of Financial Results for the First Half
◎ In the first half of the fiscal year under review, we invested ¥2.0 billion in upfront costs and othercosts, which resulted in the following major results. And continue to invest in expanding its
customer base in 2H, which will lead to higher earnings in the future.
Item

Gas business
Expansion of area, etc.

Cost of establishing new
bases-¥0.0 mn

Cost to acquire customers-¥500 mn

New-customer acquisitionfees-¥400 mn

Launch of new
LIBMO promotions
communications services

To prevent cancellationor cancellation

Cost for the First Half of the Fiscal Year (YoY Comparison) and its Achievements
The LP gas business enters Okayama Prefecture (Kurashiki).

Increase in the number of LP gas new customers from 17,000 to
21,000 (+4,000)-¥500 mn

Net increase of 11,000 LIBMO customers

Gas business-¥400 mn

LP gas cancellation and cancellation from 18,000 to 15,000, down
3,000Communication, etc.

-¥300 mn

BB cancellations and cancellations from 64,000 to 62,000, down 2,000

Total-¥2,000
mn

Increase in income due to an increase in the numberof billings, etc.

+¥700
mn

Consolidated Operating Income YoY-¥1,300
mn

LPG, CATV, and corporate communications businesses

13Full-year forecast◎ Forecasts 1.3 billion yen year-on-year operating profit decline in FY03/18 due to upfront
spending on expanding service areas, sales promotion of new information services, andpreventing service cancellations by retail customers with a view to expanding earnings base for
future growth◎ No change to full-year consolidated earnings forecast announced on May 9, 2017
(Millions of yen)

YoY

FY03/18 Forecast FY03/17 Results(April 1, 2017 toMarch 31, 2018)(April 1, 2016 to
March 31, 2017)

189,400

178,631+10,769+6.0％

Operating profit

11,41012,750-1,340-10.5％

Recurring profit

11,36012,775-1,415-11.1％Net income

6,450

7,337

-887

-12.1％EPS (Yen)

50.88

64.46

-13.58-21.1％

Sales

Percent
ChangeChange14

Dividend forecast◎ Interim dividend is 14 yen per share, up 3 yen from 11 yen per share in previous fiscal year
◎ Year-end dividend unchanged from initial forecast of 14 yen per share to maintain previous fiscal
year’s annual dividend of 28 yen per share (previous fiscal year’s year-end dividend of 17 yen
per share was ordinary dividend of 11 yen per share + commemorative dividend of 6 yen per
share)
30

28 yen28 yenper shareper share

6

25

15

10

+3
yen

20

12 yen12 yen12 yen12 yenper shareper shareper shareper share

6

6

6

6

14 yenper share

11

8

6

6

6

6

6

FY03/12

FY03/13

FY03/14

FY03/15

FY03/16

Year-end dividend

+3
11

5

14

yen

14

Interim dividend0Interim dividend

Year-end dividend

FY03/17

Commemorative dividend

FY03/18(Forecast)15

About LP gas business

16

External Environment Surrounding the LP Gas Business-Market Forecasts◎ Demand for gas for residential and commercial use was 6.26 million tons in fiscal
2016 and is forecasted to decrease to 5.81 million tons in fiscal 2020, a decrease of
1.8% per year.
◎ The number of LP gas-consuming households is forecasted to decrease by 0.6%
annually from 24.2 million in fiscal 2016 to 23.6 million in 2020.
(1) LP gas demand forecast
FY2016FY2020Compared to FY 2016
Change％Annualrate（％）

Residential and commercialuse

6,258 Ktons

5,813 Ktons-445 Ktons

-7.1

-1.8

Industrial and city gas use

4,978 Ktons

5,592 Ktons+614 Ktons

+12.3

+3.0

Total for general use

11,236 Ktons

11,405 Ktons+169 Ktons

+1.5

+0.4

(Source: Ministry of Economy, Trade and Industry, Oil Market Trends Survey WG Document. Issued 2017.4.3)(2) Number of consumer households

FY2016FY2020Compared to FY 2016
Change％Annualrate（％）

Total households

52,950 households
Thousand

53,053 households
Thousand+103 households
Thousand

+0.2

+0.1

LPG consumption
householdTotal householdcomposition ratio

24,189 households

23,578 households-611 households

-2.5

-0.6

Thousand45.7 ％(Source: SEKIYU-KAGAKU-SINBUN-SHA, Annual Report on LPG Document, 2017 Version)

Thousand

44.4 ％

Thousand-1.2 ％

17

Medium-Term Plan for LP Gas Business~ Policy and Number Expansion Plan
◎ The LP gas market is mature and the residential and commercial-use market iscontracting.
◎ Achieve continuous business growth through aggressive investment to expand areaand market share◎ Plans to increase customer numbers by 30% over four years to 760,000
Plan for LP gas customers

Area
expansion

Expandingmarketshare

30% increase over 4 years

76(Ten thousand)59

Active investment

Continuous growth of business
FY2016FY2017FY2018FY2019FY202018

Measures to expand sales areas◎ Establieshd Five bases (Iwaki, Sendai, Toyokawa, Gifu, and Nishi-Mikawa) in the
Chubu area (Gifu and Aichi prefectures) and the Tohoku area (Miyagi prefecture)since FY2015.
◎ In this fiscal year, it entered Okayama. By the end of the current fiscal year, it plans to
expand into two additional locations (Tajimi and Kyushu).
◎ In the next fiscal year, it plans to open two bases in Nagano and Mie Prefectures.
New expansion base （FY2016）5 bases

MiyagiTajimi sales office (provisional)

New expansion base （FY2017）3 bases

Gifu sales office

Iwaki sales office

NaganoGifu

Kyushu sales office(provisional)

Sendai branch
officeSuwa sales office (provisional)

New expansion base （FY2018）2 bases

OkayamaTokyo

Shizuoka
Aichi
Mie

Toyokawa
sales office
Nishi-Mikawa
sales office

FukuokaOkayamasales office

Mie sales office(provisional)

Entered area
New entry area FY2017
New entry area FY2018

19

Aiming to acquire a customer base in new areas◎ Our market share in existing areas is 8.4% (our customers are 580,000 of the
6.94 million LPG-consuming households)◎ In new areas, we aims to acquire 10,000 customers at each location,compared to 4.18 million LPG-consuming households in all 10 locations.
◎ Plan to increase the number of customers in new areas to 70,000 in FY2020,
four years from now
Existing area
(Performance)

Plan of the number of customers
in the new area

New area(plan)70（Thousand）

LPG Consumer
Households

6.94 million 4.18 million
households

households

Ourcustomers

0.58 million

0.1 million

households

households

Market
share

8.4%

2.4%

8
FY2016FY2017FY2018FY2019FY2020 20

Expanding the LP business in the Okayama area
◎ Of the new areas, Okayama (Kurashiki) is developing the Group's CATV business,and the Group is launching a new LPG business in those areas.
◎ Able to actively conduct sales activities by leveraging the CATV business's namerecognition and customer base
（Okayama Pref.）TV Tsuyama Co., Ltd.

Kurashiki Cable TV Co., Ltd.
Tsuyama City

Provided area Total number of households 260,000
Broadcast customer

90,000(Approximately 35% of households provided)
Kurashiki Cable TV Co., Ltd.

Okayama City

Communication customer

30,000Utilize brand visibility andcustomer baseKurashiki City

Aggressive sales activities
LPG Okayama sales office21

Net increase in number of customers~plan to more than triple the previous fiscal year
◎ Net decrease continued until FY2014, but the net increase trend recovered for the last twoconsecutive fiscal years.
◎ In this fiscal year, the Company will make up-front investments to increase the number of new
registrations, while also focusing on preventing cancellations◎ Aiming for a net increase of 28,000 customers, more than tripling from the previous fiscal year
Net increase in recovery
for the second consecutive term（Thousand）

41

8
-2

FY2011FY2012

55

28

8

-3

-19

-26

More thantriple netincrease△33
FY2013

FY2014

New registration

FY2015FY2016

Cancellation△28
FY2017
estimate

22

About the information
communication business

23

Strong promotion of Hikari Collaboration◎ Achieve Hikari Collaboration rate of 61% by the first half of the fiscal year
◎ Plan to raise the Hikari Collaboration rate to 85% by four years' time

Progress status and plan of Hikari collaboration(Changes in optical collaboration rate)

85.1%

60.8%

55.9%
49.0%
38.6%
43.6%

50.7%

35.1%
0.8%

24.4%
1.4%

Mar-15Mar-16

Sep-16

Mar-17

Sep-17

Our Company

Mar-18Mar-19Mar-20Mar-21

Nationwide("

Hikari collaboration rate = (

-

)
)

24

Steady start-up of MVNO
◎ Launched low-cost SIM service “LIBMO” in February◎ Steady start-up as a strategic product that embodies the TLC vision◎ In terms of sales channels, existing ISP customers, electronics mass retailers, and web
channels performed well.
◎ Plan to increase the number of customers in four years to 140,000, benefiting from the
expansion of the market（Thousand）

LIBMO customer count planning

Number of acquisitions by major
channel (cumulative)（Thousand）

138

2
4

6
2
Apr-17

Until May-17

Until Jun-17

Existing ISP customers

Until Jul-17

Until Aug-17

Electronics mass retailers

WEB

Until Sep-17

Others

FY2016FY2017FY2018FY2019FY202025

Own competitive optical trunk line network
Built a proprietary fiber optic network spanning 6,000 km
Constructed to connect the high-demand Kanto Region to Okayama,
passing through Tokyo, Nagoya, and Osaka
Providing comprehensive solutions that integrate data centers, optical fiber networks,
and system development capabilities

The total distance of the optical trunk line, which is the
backbone of the group's information and telecommunications
business and CATV business:

Approx.

6,000km( Breakdown of total laying distance )Telecommunication business 2,618 km
CATV business
3,551 km

*As of March 31, 2017
LCV Data Center※Including trunk and branch line (excluding lead-in line)

NagoyaOkayamaAtsugi Otemachi
Osaka

Yaizu

Okayama Data Center
Shizuoka Data Center

26

Large growth in cloud-related business◎ Focus on cloud-related services, which are expected to grow significantly◎ Cloud access services in the corporate network market grew 3.7 times from
¥5.3 billion in FY2016 to ¥19.5 billion in FY2020◎ Full coverage of connectivity solutions with AWS, the largest provider of cloudcomputing services, and major public clouds（Billion yen）

Forecast for corporate cloudconnecting service market

Major cloud service

Our
cloud service

3.7 times in four years

20

Cloud connect solution

5.3

FY2016FY2017FY2018FY2019FY2020Wide Area Ethernet

Leased line

Customer

Customer

Customer（出所：富士キメラ総研（2016年9月）、IDC Japan（2017年1月））

27

Capital and business alliance with Cloud Ace Inc.
◎ Capital and business alliance with Cloud Ace Inc., the No.1 venture company inthe domestic Google cloud◎ Sales of cloud solutions, a growth field, more than doubled YoY◎ Four years later, we will grow sales of corporate telecommunications businessfrom ¥ 20.6 billion in 2016 to ¥ 29.5 billion.
Synergy effect through alliance with Cloud Ace
Inc.

Medium-term plan for sales in the Telecommunications
Business for corporate customers（Billion yen）

1.4 times in four years

Provide GCP connection line service
Dispatch of engineer

Cooperation / support

30

21

Provision of GCP construction
and operation support
Technical support on GCP

Expanding the scope of cloud services
Expanding sales of connecting line services
Development of human resources and acquisitionof qualifications

FY2016FY2017FY2018FY2019FY202028

About CATV business

29

Group's CATV business◎ Operates in Shizuoka, Tokyo, Kanagawa, Chiba, Nagano, and Okayama prefectures◎ The total number of customer is 990,000 (as of the end of September 2017), including
750,000 broadcasting and 240,000 communications customers.
ATSUGI ISEHARA CABLE
NETWORK CORPORATIONLCV CORPORATION

Nagan
o

KURASHIKI CABLE TELEVISION Inc

Tokyo Bay Network Co.,Ltd.

Tokyo
Kanagawa

Shizuoka

Okayama

TOKAI Cable Network Corporation
Toco Channel Shizuoka Corporation

In-house optical fiber network laying total distance Approximately 6,000 km

Chiba

ICHIHARA COMMUNITY NETWORK TELEVISION CORPORATION
EAST COMMUNICATIONS COMPANY LIMITED

Broadcasting

750,000

Communications

240,000

Total

990,000

30

CATV Business Mid-term Plan
Expansion through M&A◎ Plan to increase the number of customers (730,000) at the end of the previous fiscal year by 1.5
times and 380,000 over four years (of which 300,000 are M&As)◎ Acquired additional shares in Tokyo Bay Network in July of this year and made it a consolidated
subsidiary◎ Today, we announced the consolidation of TV Tsuyama in Tsuyama City, Okayama Prefecture.
（東京23区）
Period end customer
number planning（Ten Thousand）

Tokyo Bay Network Co.,Ltd.

250,000
1.5 times in four years

112

Chuo-ku
Koto-Ku

Cable Television TsuyamaCo., Ltd.

100,0073
Tsuyama City

Making 2 companies
consolidated
260,000 increase
Kurashiki City

FY2016FY2017FY2018FY2019FY202031（Okayama Pref.）Midterm plan of CATV business
Increase due to expansion of customer number◎ In addition to M & A, we anticipate a net increase of 20,000 each year (totalof 80,000) in the next 4 years◎ Past had also increased by 20,000 pace per year, sufficiently achievable◎ Operating profit is also expected to increase to 1.75 times the previous year
in four years.
Operating profit plan

Plan for net increase

1.75 times in four years

300 thousand increase in M & A（Thousand）
over the next 4 years
Net increase of 80,000 in existing
business

24
20

FY2015FY20162222

FY2017FY2018Broadcasting

21

2.8

20

FY20194.9（Billion yen）

FY2020FY2016FY2017FY2018FY2019FY202032

Communications

Strengths of the Group's CATV Business
The Group's Own Optical Fiber Network◎ Looking at the era of convergence of broadcasting and communication, promoting FTTH from2006
◎ We expect to almost complete the conversion of our CATV areas to 100% optical by fiscal 2020.
◎ This will increase the number of broadcasting and communications customers and contribute tofuture business expansion.
[Broadcast optical] FTTH : Excellent delivery capability, fault resistance, and durability
CATV
Head end
Closure(Center equipment) Optical fiber trunk line
(Optical branching device)
Reception ofvariousbroadcasts via
optical fiber etc.

Enhance center
facility and add opticalbroadcasting
capability

Optical fiber lead-in
Coupler(Optical terminal)

Delivery ability
2,600 MHz

Add broadcasting
coupler

Use existing
communication FTTH
network for broadcast
distribution

Install broadcasting ONU in each house

Broadcast opticalizing schedule
（％）

100
80
60

100% opticalizing
almost finished

40
20
0

FY2016FY2017
TCN・East

FY2018Toco Channel

Ichihara

FY2019Kurashiki

Atsugi

FY2020LCV

33Strengths of the Group's CATV Business
Cooperation with mobile communication carriers◎ The Company's share of fixed broadband communication services in our CATV area is over 30%◎ Own FTTH service customers with high profitability steadily increase◎ The alliance with major carriers has a difference in sales channels and users of both companies,
and each other's relationship with WIN-WIN
Per 1
deviceau smart value

Fixed broadband communication
service share

Our Company

30%

32%

34%

35%

37%

38%

FY2015FY2016FY2017FY2018FY2019FY2020au

Up to 2 yearsUp to 2,000
yen discount every
month!

au smartphoneor
au mobile phoneor
4G LTE tablet

Any two or more services

WIN-WIN
Customer number plan(communication)（Ten thousand）

Per 1
deviceSoftbank Ouchi-Wari
Our Company

21

23

24

26

27

FY2015FY2016FY2017FY2018FY201928

FY2020Softbank

Up to 2 yearsUp to 2,000
yen discount every
month!

Smartphone
SoftBank Mobile phone
Tablet34

Strengths of the Group's CATV BusinessResponse to 4K broadcasting
The penetration rate of 4K broadcasting to 40% level by 2020 Tokyo Olympic Games
In order to provide 4K broadcasting in the CATV infrastructure, it is necessary to optical line (FTTH), our Group
have promoted change the line to optical from 2001 . →Cover almost the entire area in 2020.
We assume that many small and medium-sized operators that can not make capital investment will come out inthe near future.
End of 2020
Expansion of demand for 4K
4K (compatible) TV
broadcasting towards the Tokyo Olympic Games
19.77 million units *1(~ July 2020)
Aim for penetration rateof 4K broadcasting 40% *2
June, 2018:
Russia 2018 FIFA World Cup*1 Quoted from Nomura ResearchInstitute "IT Navigator 2018 edition"from "4 K Television Holding
Household Count Forecast".

14.88 million households
at the end of March 20184K tuner built-in TV(Dedicated antenna isrequired for 4K viewing * 3)
As of the end of March 2017
2.46mn household *1

FY2016FY2017

Business
opportunities

FY2018December, 2018: BS/CS4K practical broadcasting start ●4K Tuner not equipped TV(Requires 4K tuner anddedicated antenna * 3)

FY2019FY2020July 2020 Tokyo Olympics ●*2 Forecasts of the number ofnational households in FY2020(54,107 thousand households) by
Nomura Research Institute "IT
Navigator 2018 edition" "Predictionof number of households held by 4K
television" and National Social
Security and Population ResearchInstitute "Future estimation ofhouseholds in Japan" Calculated
more

35

Strengths of the Group's CATV Business
Increasing the Added Value of the Group's Networks◎ We will provide services that meet the needs of the times, such as IoT
businesses, which are becoming increasingly popular in the future.
◎ Investments to add value to CATV networks◎ Active Efforts by the Regional Wireless Network "BWA" (Broadband WirelessAccess)◎ Key to continued and sustained growth in CATV businesses
Efforts to increase added
value of CATV network
The current CATV network

Efforts of regional
BWA
Application example of regional
BWA

Mobile rooter
access point

Culture Center

Ward office

Branch officeConstruction of disaster prevention / crime prevention
network in cooperation with local governments

Increase added value

Improvement of broadband infrastructure that
communities can utilize
Community channel trunk line backup

36

The performance forecasts and forward-looking statements in these materials are based on
information currently available to the Company, and include potential risks and uncertainties.
Please be aware that due to changes in a variety of factors, actual results may differ
materially from the projections and other forward-looking statements in these materials.

Please contact us with any questions regarding these materials.
Public Relations and Investor Relations Office
TOKAI Holdings Corporation
2-6-8 Tokiwa-cho, Aoi-ku, Shizuoka 420-0034, Japan
Hamarikyu-InterCity 11th floor, 1-9-1 Kaigan, Minato-ku, Tokyo
Phone: +81-(0)3 -5404-2891
Fax: +81-(0)3-5404-1110
https://tokaiholdings.co.jp/english/
e-mail： overseas_IR@tokaigroup.co.jp