Results for the 2nd Quarter ended September 30, 2017

【 Reference 】
Translation

In the case of inconsistencies between the Japaneseand English version, the Japanese version will control
and supersede any ambiguities.

November 10th, 2017

NAC Co., Ltd.
Code; 9788 TSE 1st section

Topics

1. Results for the 2nd
Quarter ended September 30, 2017

…

P. 2

2. Results by Segments

…

P. 11

3. FY2017 Forecasts of Financial Results… P. 24

4. Plan of Dividends

…

P. 28

5. Appendix

…

P. 30

This document contains certain forward-looking statements including the NAC Group’s sales andcontract targets based on information available to the Group as of the date of release. Thesestatements are subject to a number of risks and uncertainties such as economic and businessconditions as well as the outcomes of new services.
Therefore, please understand that actual future results may differ materially from these projections
set forth in the Group’s forward-looking statements.

11. Results for the 2nd Quarter ended September 30, 2017

2

1

Q2 FY2017 Consolidated Income Statement（Millions of yen）

Plan Comparison
6 months
ending FY2017

YoY Comparison

Actual/Plan
ComparisonPlan

6 months
ended FY2016

YoY
Comparison

Sales38,14836,200105.4%

34,361+ 11.0%Gross profit

15,775－－

15,390+ 2.5%（Gross margin）

41.4%

－

－

44.8%

▲ 3.4pt

SG&A

17,337－－

17,662▲ 1.8%

Operating Income▲ 1,561▲ 1,500－▲ 2,272－（Operating margin）▲ 4.1%▲ 4.1%－▲ 6.6 ％

+ 2.5pt

Non-operating
income and loss

▲ 14

－

－

6

－

Ordinary Income▲ 1,576▲ 1,490－▲ 2,266－

Extra-ordinary
income and loss

▲ 180

－

－

▲ 58

－

▲ 1,429▲ 1,050－▲ 1,810－Net income attributableto owners of parent< Point>≫ In the Housing sales business, orders in hand were increased as of the end of the previous fiscal year, so both sales and operating
income were improved year on year.
≫ In the Rental business, sales increased in all sections.
3

Sales & Operating income trend

1（Million of yen）

（Million of yen）

70,000

7,000
Sales

60,000Operating Income
6,000

Sales

5,000

51,54050,00043,77840,0004,000
38,14836,5233,000

34,361

30,000

2,000
3,403
1,000

20,0001,796

010,000▲ 1,561▲ 2,272▲ 1,094▲ 1,0000▲ 2,000

FY2015▲ 10,000

Q1-2

FY2016
Q3-4

Q1-2

FY2017
Q3-4

Q1-2

Q3-4

▲ 3,000≫ Nac tends to post an operating income in the second half of the year because hand-overin Housing sales usually concentrates between 3rd and 4th quarters.
4

1

Sales by Segment（Millions of yen）

Plan Comparison

6 months
ending FY2017

Plan

YoY Comparison

Actual/Plan
Comparison

6 months
ended FY2016

YoY
Comparison

CreCla

6,678

6,700

▲ 21

6,858

▲ 179

Rental

6,783

6,500

+ 283

6,455

+ 328

Construction
Consulting

2,558

2,600

▲ 41

2,640

▲ 81

Housing Sales

17,21619,000▲ 1,783

13,388+ 3,827

Mail-order

4,943

5,100

▲ 156

5,022

▲ 79

Elimination▲ 31▲ 3,700+ 3,668

▲3

▲ 27

Total

38,14836,200+ 1,948

34,361+3,787≫ In the CreCla Business, sales declined year on year and fell short of the planed target since sales of the CreCla plant that contributed
to business results last year was not appropriated in this period and the sales volume of bottled water decreased owning toadverse weather conditions in East Japan.
≫ The Rental business exceeded the planed target and previous year because all segments improved business performances.
≫ In the Construction Consulting, sales decreased year on year and fell short of planed target due to sales decreases in Eco & Eco.
≫ Although the Housing sales business rose sales year on year because of increases in hand as of the end of the previous fiscal year in
Leohouse and J-wood, sales was below the planed target since the Housing sales business continues to face an uphill sales battle.
≫ In the Mail-order business, the number of new customers increased in both “Macchia Label” and “Coyori” brands ; however, sales declined
year on year and fell short of the planed target because of the slowdown in the repeat rate and decreases in sales per customers.

5

1

Operating income by Segments（Millions of yen）

Plan Comparison
6 months
ending FY2017

Plan

YoY Comparison

Actual/Plan
Comparison

6 months
ended FY2016

YoY
Comparison

CreCla131(2.0%)▲ 40(▲ 0.6%)+ 171(+ 2.6pt)

14(0.2 ％)+ 116(+ 1.8pt)

Rental928(13.7%)

880(13.5%)+ 48(+ 0.2pt)

824(12.8 ％)

+ 103(+ 0.9pt)

Construction
Consulting

239(9.4%)

310(11.9%)▲70(▲ 2.6pt)

234(8.9 ％)+4(+ 0.5pt)

Housing Sales▲ 1,974(▲ 11.5%)▲ 1,740(▲ 9.2%)▲ 234(▲ 2.3pt)▲ 2,214(▲ 16.5 ％)+ 239(+ 5.1pt)

Mail-order▲ 291(▲ 5.9%)▲ 300(▲ 5.9%)

+8
(－)

▲ 481
(▲ 9.6 ％)+ 189(▲ 3.7pt)

Elimination,
HQ Cost

▲ 594

▲ 610

▲ 15

▲ 650

+ 56

▲ 1,562(▲ 4.0%)▲ 1,500(▲ 4.1%)▲ 61(▲ 0.3pt)▲ 2,272(▲ 6.6 ％)+ 710(+ 2.5pt)

TotalNote) The figures inside ( ) marks indicate operating margin.

≫ In the CreCla business, operating income exceeded the planed target and previous year because of revisions to management costs.
≫ The Rental business increased operating income year on year and the planed target owing to sales increases in all sections.
≫ The Construction Consulting business increased operating income year on year owing to sales increases in the construction know-how
systems business and the construction materials business; on the other hand, it fell short of the planed target owing to sales decreases
in Eco & Eco.
≫ In the Housing sales business, operating income rose in comparison with last year, but it fell short of the planed target because of the
upward tendency about construction costs and expenses related to new store openings.
≫ In the Mail-order business, operating income rose year on year due to revisions to sales promotion costs and advertising expenses.
61

Factors causing the differences of financial resultscompared with planed targets【 Construction Consulting business】≫ Sales fell short of the planed target due to sales decreases in Eco & Eco that haveconducted an overhaul of income structure, sales promotions and process
management to generate stable profits.
≫ Operating income was below the planed target owing to sales decreases in Eco & Eco.

【Housing Sales business】≫ Sales fell short of the planed target because the number of orders received decreased.
※ It was affected by circumstances in the housing industry.
≫ Operating income fell short of the planed target owing to the upward tendency about
construction costs, expenses related to new store openings and sales.

【Mail-order business】≫ Although the number of new customers continues to be strong, sales fell short ofthe planed target because of a slowdown in the repeat rate and the decrease insales per customers.
7

1

Analysis for operating income & loss(YoY change)※Increase and Decrease of SG&A
＋ Increase in profit and loss
▲ Decrease in the profit and loss

（Millions of yen）

Commission
paid

Others

Personnel
expenses

+ 50
▲ 354
Gross profit ＋ 193
Sales promotion costs（＋ 1.2％）（ ▲ 5.2％） Rent（＋
23.6％）
＋ 385
and
▲ 80
Advertising Exp.

＋ 554（＋ 2.5％）

Depreciation
andAmortization▲ 38（▲ 6.8％）（▲ 4.0％）（＋ 15.1％）▲ 1,561
FY2017Q2▲ 2,272
FY2016Q2
The reason of increases and decreases of SG&A
≫ Sales promotion costs and advertising expenses decreased because of the proper operation of investments in advertisingand sales in all segments.
≫ Commission paid declined since consulting fees decreased compared with last year.
≫ We newly posted personnel expenses in BELAIR, suzukuri, KUNIMOKU HOUSE and AILIFE.
8

1Consolidated Balance Sheet
As of Sep.
2017

（Millions of yen）
Break
down

As of Mar.
2017

Break
down

Comparison

24,13254.2%

22,13350.9%+ 1,998

13,32629.9%

13,813

31.8%

▲ 486

Intangible assets

3,235

7.3%

3,546

8.2%

▲ 311

Investments and other assets

3,843

8.6%

4,006

9.2%

▲ 162

20,40444,53745.8%
100.0%

21,36643,49949.1%
100.0%▲ 961+ 1,037

Total liabilities

23,457
7,139
30,596

52.7%
16.0%
68.7%

20,905
7,087
27,992

48.1%
16.3%
64.4%

+ 2,551+ 52+ 2,603

Shareholder’s equity

14,74433.1%

16,31437.5%▲ 1,569

Accumulated other comprehensive
income▲ 804▲ 1.8%▲ 807▲ 1.9%+3

Total net assets

13,94044,53731.3%
100%

15,50643,49935.7%
100.0%▲ 1,566+ 1,037

Current assets
Total property, plant andequipment

Non-current assets
Total assets

Current liabilities
Non-current liabilities

Total liabilities and net assets■ Current assets ： Cash and deposits ▲ 2,526 Costs on uncompleted construction contracts + 1,649■ Non-current assets ： Building and structures ▲ 217■ Current liabilities ：Advances received on uncompleted construction contracts + 3,076■ Non-current liabilities ： Long-term loans + 217

Accounts payable ▲ 2,029

Equity Ratio ： 31.3 ％91Consolidated Cash Flow

（Millions of yen）

1st half of
FY2017
1.Net cash provided by operating activities
2.Net cash used in investing activities
3.Net cash used in financing activities
Net increases cash and cash equivalents

1st half of
FY2016FY2017▲ 3,117▲ 879▲ 2,237▲ 688▲ 1,837

1,148

1,221

▲ 302

1,524

▲ 2,584▲ 3,019

435

7,430

8,346

▲ 916

56

ー

ー

4,903

5,326

▲ 423

889

945

▲ 55

Cash and cash equivalents
at beginning of period
Cash with the new connection and cash equal
accrualCash and cash equivalents
at end of period

Depreciation and amortization

The main reasons of the fluctuation■ Operating activities：An increase in Advances received on uncompleted construction contracts at 3,004 millions of yen.
An increase in depreciation at 889 millions of yen
An increase in inventory at 2,517 millions of yen
A decrease in accounts payable at 2,029 millions of yen / Net loss at 1,757 millions of yen■ Investing activities： Acquisition of property, plant and equipment at 485 millions of yen
Purchase of investments in subsidiaries resulting in change in scope of consolidation at 274 millions of yen■ Financing activities：An increase in Short-term loans at 1,000 millions of yen

10

2. Results by Segments

11

2

Results by Segment (1) CreCla ①（Millions of yen）

10,000Sales

To affiliates
Directly managed

8,000

6,660

6,858

6,678

2,482

2,565

2,346

4,177

4,292

4,331

FY2015 Q1-Q2

FY2016 Q1-Q2

FY2017 Q1-Q2

6,000
4,000
2,000
0

≫ Our direct managed stores tried to win new customers and improve customer retention rate toenrich the content of customer services. As a result, sales increased year on year.
≫ In affiliates, sales declined year on year since sales of the CreCla plant that contributed tobusiness results last year was not appropriated in this period and the sales volume of bottled
water decreased.
（Millions of yen）

1,500
Operating Income

Operating
Income

1,000
500
0
▲ 500

▲ 219

14

131

FY2015 Q1-Q2

FY2016 Q1-Q2

FY2017 Q1-Q2≫ Operating income exceeded previous year because of revisions to management costs.

12

Results by Segment (1) CreCla ②

2（Million of yen）

10,000（Million of yen）

Sales
Sales

1,000

Opataring Income

800

8,000
6,660

6,434

6,858

6,435

6,678

600

6,000

400
259

4,000

131

14

200

18

2,000

0

▲ 219
-

▲ 200
FY2016FY2015(2,000)

Q1-2

Q3-4

Q1-2

FY2017

Q3-4

Q1-2

Q3-4

▲ 400

≫ Operating income exceeded largely previous year because of revisions to management
costs.
13

2

Results by Segment (2) Rental ①（Millions of yen）

10,000

Sales

8,000
6,000
4,000
2,000

Earnestwith
Duskin

6,783
6,296
632

1,131

6,455
639
1,173

4,532

4,643

FY2015 Q1-2

FY2016 Q1-2

694
1,229

4,859

0
FY2017 Q1-2

≫ The Duskin business focused on existing customers to improve customer satisfaction. Moreover, we

utilised M&A strategy to expand business areas. Consequently, the number of customers and contract
termination rates held steady,so sales increased year on year.
≫ With-branded pest-control devices business strengthened sales promotions before the summer peak demand season inboth our directly managed stores and affiliated stores. Moreover, the newest product called “With” is sold from July,
2017. As a result, sales rose year on year.
≫ Earnest that provides regular cleaning plan for business also grew sales because there were increases in referrals of（Millions of yen） new customers by existing customers.

1,500

Operating
Income

1,200
900

912

824

This segment includes

600
300

928
Amortization of goodwill

Operating Income

at 0.2 million yen related to AI LIFE.

0
FY2015 Q1-2

FY2016 Q1-2

FY2017 Q1-2

≫ Operating income increased year on year owing to sales increases in all sections.
14

Results by Segment (2) Rental ②

2（Millions of yen）

(Millions of yen)

10,000

Sales

2,000

Operating Income

Sales

8,000

1,600
6,296

6,468

6,455

6,000

6,679
1,029

912

929

824

6,783

1,200
928

4,000

800

2,000

400

-

FY2015

Q1-2

FY2016

Q3-4

Q1-2

FY2017

Q3-4

Q1-2

Q3-4

≫ Operating rose increased year on year owing to sales increases in all sections.
15

2

Results by Segment (3) Construction Consulting ①※① It includes internal transactions about 75 millions yen.

(Millions of yen)※② It includes internal transactions about 93 millions yen.

Eco＆Eco

5,000

Sales

Construction materials
4,000

Know-how system

3,000

2,747

2,000

1,469

※①

2,715

※②

634

2,651
273

1,096

1,358

1,278

983

1,019

FY2015 Q-1-2

FY2016 Q-1-2

FY2017 Q-1-2

1,000
0

≫ The construction know-how systems increased sales thanks to continual support programs for small and midsize
building contractors.

≫ The construction materials business increased the number of orders regarding solar powered house, especially newbuilt house, in the housing market by the use of “Net Zero Energy House (ZEH)”. Additionally, we have started
offering construction materials for subdivided housing unit and renovation in the adjacent market from last year, andit produced positive results. Overall, in the construction materials business, sales increased significantly year on year.

(Millions of yen)

≫ Eco & Eco have conducted an overhaul of income structure, sales promotions and process management to generate
stable profits, so we have successfully changed its business model even though sales declined temporarily.

1,000Operating
IncomeThis segment includes Amortization of

Operating Income

goodwill at 9 million yen related to

800
600

Eco&Eco.

523

400

234

239

FY2016 Q1-2

FY2017 Q1-2200

0FY2015 Q1-2

≫ Operating income rose slightly year on year owing to sales increases in the construction knowhow systems business and the construction materials business.
16

Results by Segment (3) Construction Consulting ②

2(Millions of yen)

(Millions of yen)

5,000

2,000

Sales
Sales

Operating Income
3,929

4,000

1,600

3,449
3,000

2,747

2,558
722

2,000

622

523

1,200

2,640

234

1,000

800

400

239

-

-

FY2015
Q1-2

FY2016
Q3-4

Q1-2

FY2017
Q3-4

Q1-2

Q3-4

≫ Operating income rose slightly year on year owing to sales increases in theconstruction know-how systems business and the construction materials
business.
17

Results by Segment (4) Housing sales ①

2【 Suburban areas 】(Millions of yen)※① It includes internal transactions about 6 millions yen.
Kunimokuhose

KDI

J-wood※② It includes internal transactions about 110 millions yen.

Leohouse（suburban areas）

20,000

Leohouse（urban areas）※② 17,326

15,874
1,263

Sales

351
※① 13,388

707

Others【 Urban areas 】
Tokyo Kanagawa
Chiba Saitama

2,092
2,023

1,453
10,00013,085

9,956

11,383

1,525

1,270

1,474

FY2015 Q1-2

FY2016 Q1-2

FY2017 Q1-2

0

≫ In the Housing sales business, sales rose largely year on year because of increases in hand as of theend of the previous fiscal year in Leohouse and J-wood.
(Millions of yen)

500

FY2015 Q1-2

FY2016 Q1-2

▲ 500

Operating
IncomeFY2017 Q1-2

This segment includes
Operating
Incomethe Amortization of goodwill at 49 million yen
related to to J-wood, KDI and▲ 1,297

KUNIMOKUHOUSE.
▲ 1,500▲ 2,214▲ 2,500▲ 1,974≫ Operating income improved year on year because of sales increases even though there were an
upward tendency about construction costs and expenses related to new store openings.

18

Results by Segment (4) Housing sales ②2(Millions of yen)

40,000(Millions of yen)

Sales
Sales

7,000

Operating Income
29,54830,0005,000

21,57720,00015,874

1,591

884

10,0001,000▲ 2,214▲ 1,297

3,000

17,216

13,388▲ 1,974▲ 1,000

0

FY2015▲ 10,000

Q1-2

FY2016
Q3-4

Q1-2

Q3-4

FY2017
Q1-2

Q3-4▲ 3,000≫ Sales and Operating income tend to increase around Q4.
≫ Operating income rose in comparison with last year due to sales increases.

19

2

Results by Segment (4) Housing sales ③

130 stores（ Leohouse ：105 stores, J-wood ：10 stores, KDI ：3 stores, suzukuri : 10 stores, KUNIMOKU HOUSE : 2 stores）
Leohouse

J-woodKUNIMOKU HOUSE opened new stores（ As of Sep.30, 2017 ）（ As of Sep.30, 2017 ）during the 2nd quarter

KDI

KDI

（ As of Jun.30, 2017 ）during the 2nd quartersuzukuri

suzukuri opened new stores（ As of Jun.30, 2017 ）opened new stores

Aomoriduring the 2nd quarter

Wakayama

Niigata

Shizuoka

Fukushima
Tochigi

SaitamaTokyo

Kanagawa

Chiba

Tokushima

Aichi

Kochi

MiyagiYama-nashi

Mie

Kagoshima

Nara

KagawaOsaka

MiyazakiOkinawa

Ehime

Yamagata

Gumma

Fukui
Shiga

Iwate

IbarakiOkayama

Akita

NaganoHiroshima

ToyamaGifu

Tottori

Kyoto

Shima
-ne

Hyogo

Oita

Yamaguchi

Saga

Nagasaki

Fuku
-oka

Ishikawa

Leohouse： 105 stores ( Branch : 46 / Model display site : 56 / Others : 3 )J-wood： 10 stores ( Housing café : 3 / Model display site : 7 )KDI：
3 store ( Branch : 3 )suzukuri： 10 store ( Branch : 9 / Other : 1 )KUNIMOKU HOUSE：
2 store ( Branch : 1 )

Kuma
-moto

Hokkaido

20

2

Results by Segment (4) Housing sales ④

Quarterly store openings, number of orders, completions and average sales price（Leohouse)（Number of houses ordered）
FY2015FY2016FY2017

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Number ofOrders

387

533

406

459

457

677

397

550

439

542

Complet
ions

238

500

347

694

186

390

403

871

188

478

Ordersin hand

1,035

1,057

1,109

861

1,114

1,385

1,361

1,016

1,245

1,294

Change

+133

+22

＋52

▲248

+253

+271

▲24

▲345

+229

+49

※1

※1

Unit
price

18.49 million yen

Q3

Q4

※1

Target : 18.26 million yen

Target : 18.50 million yen※1 Unit price excludes additional costs and exterior construction costsStore
openings

7

Total
stores

※２

※3

109

108

0

0
108

0

2

※4

※5

105

105

0

0

0

105

105

105

5

0

105

105

※6

Closing of model display sites :Closing of model display sites :

※2 ▲5

※4 ▲3

※3 ▲1

※5 ▲2

※6 Brand change to suzukuri ▲521

Results by Segment（5）Mail-order ①

2(Millions of yen)

10000

Sales
8000

※ It includes internal transactions about 39 millions yen.
OthersMail-order
※

6000

4,959

5,022

4000

4,943
321
4,632

2000

0
FY2015 Q1-2

FY2016 Q1-2

FY2017 Q1-2

≫ The mainstay Macchia Label brand increased in the number of new customers resulting from the aggressive investment inadvertising and promotions ahead of the spending plan. However, sales decreased year on year due to a slowdown in the repeat
rate and the decrease in sales per customers.
≫ Although the number of new customers continues to be strong, sales of the Coyori brand of skin and hair care products madefrom natural ingredients also declined year on year as a result of a sluggish growth in sales per customers.
(Millions of yen)100

Operating
IncomeOperating Income
0

▲ 100

FY2015 Q1-2

FY2016 Q1-2

FY2017 Q1-2

▲ 200

▲ 291
▲ 300
▲ 400
▲ 500

This segment includes
Amortization of goodwill at
283 million yen related to

▲ 451

▲ 481

JIMOS and BELAIR.

≫ Operating income increased year on year due to revisions to sales promotion costs and advertising expenses.

22

Results by Segment（5）Mail-order ②2(Millions of yen)

(Millions of yen)
8,000

Sales

1,500

Operating Income

Sales
6,000

5,418

4,959

5,440

5,022

1,000

4,943

4,000
398

345

500

2,000
▲ 291
0

▲ 2,000

上期
Q1-2

FY2015

0

▲ 481

▲ 451

下期
Q3-4

上期
Q1-2

FY2016

下期

Q1-2

Q3-4

Q1-2

FY2017

Q3-4

▲ 500

Q3-4

▲ 4,000▲ 1,000≫ Sales and operating income generally are tilted toward the second half of the year due toaggressive investment in advertising and promotions the first half of the year.
≫ Operating income is expected bellow zero because of goodwill amortization.
23

3. FY2017 Forecasts of Financial Results

24

3

Revised FY2017 Forecast of Financial Results（Millions of yen）

Plan Comparison

Plan（at Nov.10）

FY2016 Results

Plan（at May.12）changeSales

94,10096,300▲ 2.3%

85,901

Operating income

2,000

2,000

－

756

Ordinary income

2,050

2,050

－

793

550

850

▲ 35.3%415

32.74yen50.62yen▲ 17.88yen

24.65yen

37yen

37yen

－

27yen

Net income

EPS

Dividends per share≫ Based on the situation of the orders received and orders in hand in the housing sales business, the NAC downgrade sales
forecast.
≫ Operating income remains the same because of revisions to management costs in all segments and sales increases in somebusiness such as the Rental business.
≫ Net income attributable to owners of parent is downgraded because the Housing sales business appropriated impairment loss
regarding unprofitable stores.
25

3

Sales Forecast by Segment（Millions of yen）

Plan Comparison

Sales

Plan
（at Nov.10）

FY2016 Results

Plan（at July.3）

Change

CreCla13,50013,500－13,293

Rental

13,60013,600－13,135Construction
Consulting

6,200

6,200

－

6,089

Housing Sales

50,00052,000▲ 4.0%

42,936Mail-order

10,80011,000▲ 1.9%

10,463

Total

94,10096,300▲ 2.3%

85,901≫ In the housing market, the number of housing starts regarding subdivided housing unit dropped for the 4 consecutive months from
June, 2017.
Based on the situation of the orders received and orders in hand in the Housing sales business, we downgrade sales forecast.
≫ The Mail-order faces a slowdown in the repeat rate and the decrease in sales per customers, so we downgrade sales forecast.
26

Operating income Forecasts by Segment

3（Millions of yen）

Plan Comparison

Operating income

Plan（at Nov.10）

Plan（at July.3）

FY2016 Results
Change

CreCla500(3.7％)

300(2.2％)+ 200(+ 1.5pt)

274(2.1％)

Rental2,000(14.7％)

1,800(13.2％)+ 200(＋1.5pt)

1,853(14.1％)

Construction
Consulting

900(14.5％)

900(14.5％)－

956(15.7％)

Housing Sales▲ 200(▲ 0.4％)650(1.3％)▲ 850(▲ 1.7pt)▲ 622(▲ 1.5％)Mail-order

100(0.9％)

50(0.5％)+ 50(+0.4pt)▲ 457(▲ 4.4％)

Elimination,
HQ cost▲ 1,300▲ 1,700+ 400▲ 1,247

Total

2,000
(2.1％)

2,000(2.1％)－

756(0.9％)Note) The figures inside ()marks indicate operating margin.

≫ In the housing sales business, operating income forecasts declined due to the effect of lower sales and increases in construction
costs.
27

4. Plan of Dividends

28

4Plan of dividends：Dividend Policy with DOE 4%※ Payout ratio : within 100 %（Yen）

Payment amount of Dividends

FY2014

Dividends pershare

38 yenFY201538 yenFY2016FY2017 (Plan)

27 yen37 yen≫ Our dividend policy is DOE 4%.
In accordance with this dividend policy, annual dividend is 37 yen in FY2017.
29

5. Appendix

30

5Company's outline（As of the end of September 2017）

Company name

NAC Co., Ltd.

Head office

Shinjuku Center Building, 1-25-1 Nishi-shinjuku Shinjuku-ku, Tokyo

EstablishedMay 1971

President

Kan Yoshimura

Businesses■ CreCla（Production and sale of bottled water）■ Rental（Duskin franchise business, pest control machine rental, regular cleaning plan）■ Construction Consulting（Construction know-how, solar energy systems）■ Housing Sales（Contract construction of a custom-built house, finance and insurance affairs with housing
sales）■ Mail-order (Cosmetics and health food mail-order sales)

Consolidated
companies

Leohouse Co., Ltd.（Housing sales）
Earnest Corporation（Building maintenance）
JIMOS Co., Ltd. （Mail-order）
BELAIR Co., Ltd. (Mail-order)
J-wood Co., Ltd. （Housing sales）
Eco ＆ Eco Co., Ltd.（Sales of energy-saving products ・Construction）
KDI Co., Ltd. （Housing sales）
Nac life partners Co., Ltd. （Housing sales）
KUNIMOKU HOUSE Co., Ltd. （Housing sales）
suzukuri Co., Ltd. （Housing sales）
AI LIFE Co., Ltd. （Rental businesss）

Employees

2,152(consolidated)

Capital stock

4,000 millions yen

Number of shares

18,719,250 shares (share unit :100 shares）

Number ofshareholders

10,446 (Total number of shareholders; treasury shares are excluded)31

5

Key Financial Indicators（Consolidated）
FY2015
Average number of shares
during the period

FY2016Comparison

16,867,190 shares

16,854,157 shares▲ 13,033 shares

Net assets per share（BPS）

934.95yen

923.41yen▲ 11.54yen

Net income per share（EPS）

14.99yen

24.65yen+ 9.66yenEquity ratio

38.0%

35.6%

▲ 2.4pt

Ratio of shareholder’sequity to Net income
（ROE）

1.6%

2.7%

+ 1.1pt

Dividends per share

38yen

27yen

▲ 11yen253.6%

110.1%▲ 143.5pt

4.0%

2.9%

▲ 1.1pt

Dividend ratio
Ratio of dividends toshareholder’s equity32

5Company History

May. 1971

Established Duskin Tsurukawa in Machida city

Aug. 1977

Changed company name to NAC Co., Ltd

Sep. 1995

Listed on the JASDAQ market

Jan. 1997

Listed on the 2nd section of
the Tokyo Stock Exchange

Sep. 1999

Listed on the 1st section of
the Tokyo Stock ExchangeDec. 2001

Started bottled water “CreCla” delivery businessFeb. 2002

Started housing sales business through Leohouse

Feb. 2010

Achieved 50 billion yen of sales
when celebrating its 40th year

Mar. 2012

Acquired Earnest Corporation

Jul. 2013

Acquired JIMOS Co., Ltd.
& J-wood Co., Ltd.

Apr. 2014

Opened the CreCla Honjo-Plant

Sep. 2015

Acquired Eco & Eco Co., Ltd.

May. 2016

Acquired KDI Co., Ltd.

May. 2016

Acquired KUNIMOKU HOUSE Co., Ltd.

Sep. 2017

Acquired AI LIFE Co., Ltd.

33

5

Positioning in a market of each business

CreCla■ Market leader in bottled water sales（Number of affiliated stores : 600）
■ Market leader in bottled water production■ First HACCP certified business in the industry■ First Eco Mark certified business in the industry■ First in the industry to open an R&D center

Rental■ Highest sales of all Duskin franchisees（out of approximately 2,000 companies）■ With-branded pest control devices for restaurants first in the industry to be approved by Ministry of Health,Labour and Welfare■ Acquired AI LIFE Co., Ltd. (September, 2017) that runs Duskin business.

Construction
Consulting■ Nac members ( Construction company : 6,000 )■ Providing support for affiliated building firms through order promotion and cost reduction services, including
solar power systems and products for Smart House■ Acquired Eco & Eco Co., Ltd. (September, 2015) that deals with energy-saving products.

Housing
Sales■ Contract construction of a custom-built house under the Leohouse brand■ Leading local builder in contract construction (FY2011, FY2012 and FY2013)■ Acquired J-wood Co., Ltd. (July 2013) that produces natural houses■ In the survey of customer’s satisfaction of custom-built house conducted by Oricon, we won female customer’ssatisfaction No.1 in three categories.
■ We acquired KDI Co., Ltd. that deal with subdivided housing unit and custom-built house in metropolitan area.
■ We acquired suzukuri Co., Ltd. that perform business in a matrix concept.
■ We acquired KUNIMOKU HOUSE Co., Ltd. that expands the housing sales business in Hokkaido.W

Mail-order■ In July 2013, the mail-order business entry by a subsidiary of JIMOS Co., Ltd.
■ Various cosmetics for skin and hair care suitable for repeat use 260 thousand female customers (mainly in their40-60’s)■In the "'14 Yahoo! BEAUTY mail order cosmetics grand prize you choose."
It won the products No.1 of JIMOS in base makeup items department
34

FY2016 Sales and Operating income Breakdown

5
CleClaRentalConstruction Consulting

Housing
Sales

50％

Mail-order

CreClaHousing sales

RentalConstruction Consulting

CreCla

CreCla

15％

14％

Sales
85,901 million

RentalConstruction
Consulting

15％

48％

Operatingincome756 million

Construction
Consulting

Rental92％

Housing
Sales

▲31％

7％
Mail-order

Mail-order

12％

▲23％
※except HQ-costs

Operating margin on sales
CreClaRentalConstruction
Consulting

Mail-order

Housing
sales

Total

2.1%

14.1%

15.7%

▲4.4％

▲1.5%

1.3%
35

5

Operating income trend by segment（Million of yen）

（Million of yen）

【CreCla】

Invested for
expanding market

2,000
1,500

2,686

2,500

Accelerated
store openings

2,000
1,500

1,000
500

【Housing sales】 3,003

3,000

2,500

-175 -413 -610 -213 198

529 576

400
-78

-60

184

375

143 -201

274

500

1,000
500

0

0

-500

-500

-1,000-19-273 -110

1,208
509

389 235-1,317

388

-200

-412

03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3
(Ex)

-1,000（Million of yen）

-1,500

1,858

[]
-622

-661

-1,500【Mail-order】

1,000

Actively
advertising
investment

500-199-222 -105100

003/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3
(Ex)
-500

（Million of yen）
2,500
2,000

【Rental】
2,000
1,8411,853
1,802
1,738
1,654
1,5351,582
1,505

1,999
1,5001,5801,4921,392
1,445
1,321

-457

2,500

1,500

1,000

1,000

500

500

-500

1,767
1,616
1,564
1,501

2,000

1,500

0

【Consulting Construction】（Million of yen）

915
508

1,146

937
619

425 543670

976 900

956 900

0
03/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3
(Ex)

-500

-1,000-1,000-1,500-1,50003/3 04/3 05/3 06/3 07/3 08/3 09/3 10/3 11/3 12/3 13/3 14/3 15/3 16/3 17/3 18/3
(Ex)

We focus on aggressive investment toward growth centering on the Rental Business and theConstruction Consulting Business, which show stable business performance.

36