〔Delayed〕The original disclosure in Japanese was released on February 14, 2019 at 15:00 (GMT+9)

February 14, 2019

Tsukada Global Holdings Inc.
Consolidated Earnings Report for the Fiscal Year ended December 31, 2018
(Japanese GAAP)
Stock listing: Tokyo Stock Exchange (First Section)
Securities code: 2418
URL: http://www.tsukada-global.holdings/en/
Representative: Masayuki Tsukada, President and CEO
Information contact: Masahiro Yamazaki, Manager, Finance &Tel: +81-3-5464-0081
Accounting Department
Scheduled dates:
Annual general meeting of shareholders:March 28, 2019
Filing of statutory year-end financial report:
March 28, 2019
Dividend payout:
March 29, 2019
Supplementary materials to year-end financial results available: Yes
Year-end earnings presentation held: Yes (targeted at institutional investors and analysts)(Amounts rounded down to the nearest million yen)

1. Consolidated Performance for the Fiscal Year ended December 31, 2018
(January 1, 2018 – December 31, 2018)(1) Consolidated Operating Results
Net sales(Percentages indicate year-on-year changes)
Operating income

Ordinary income

Profit attributable toowners of the parent
million yen%

million yen%
million yen%
million yen%
Year ended
60,197
5.1
5,249
23.0
5,257
19.5
December 31, 2018Year ended
57,253
3.4
4,268
21.4
4,398
22.2
December 31, 2017
Note: Comprehensive income: Year ended December 31, 2018:
1,724 million yen (-15.7%)
Year ended December 31, 2017:
2,046 million yen (-6.8%)
Diluted profit
Ordinary income
ProfitReturn on equity
per shareper share
to total assets
yen
yen
%
%
Year ended
50.82
50.40
7.0
6.0
December 31, 2018Year ended
46.19
42.31
6.6
5.2
December 31, 2017
Reference: Equity in (earnings) losses of affiliates:
Year ended December 31, 2018: - million yen
Year ended December 31, 2017: - million yen

2,424

10.0

2,203

12.9

Operating income
to net sales
%
8.7
7.5

(2) Consolidated Financial Position

December 31, 2018

Total assets
million yen
90,862

Net assets
million yen

39.1

Net assets per shareyen
745.2440.5

717.16Equity ratio%
37,081

84,44735,781
December 31, 2017
Reference: Total equity: December 31, 2018: 35,548 million yen
December 31, 2017: 34,208 million yen
Total equity=Shareholders’ equity plus total accumulated other comprehensive income.

(3) Consolidated Cash Flows
Cash flows fromoperating activities
million yen

million yen

Year ended
December 31, 2018Year ended
December 31, 2017

Cash and cash
equivalents at end of
periodmillion yen

Cash flows fromfinancing activities

Cash flows frominvesting activities

million yen

6,050

(375)

3,704

24,117

7,062(3,976)(3,573)

14,896

2. Dividends
Dividend per share
Total
dividends

Year ended
December 31, 2017
Year ended
December 31, 2018Year ending
December 31, 2019
(Forecast)Rate of total
Dividend
dividend to
payout ratio
net assets(consolidated)(consolidated)%%

End-Q1yen

End-Q2yen

End-Q3yen

Year-endyen

Annual total
yen

-

5.00

-

5.00

10.00

477

21.6

1.4

-

5.00

-

5.00

10.00

477

19.7

1.4

-

5.00

-

5.00

10.00

million yen

15.4

3. Earnings Forecast for the Fiscal Year ending December 31, 2019
(Percentages indicate year-on-year changes)(January 1, 2019 – December 31, 2019)
Net sales
million yen%

Profit attributable toProfit%owners of the parent
million yen%

per shareyen

Operating income

Ordinary income

million yen

million yen%

Six months ending
June 30, 201929,500

5.4

1,200

11.5

1,200

20.4

650

10.4

13.63

Year ending
December 31, 2019

63,000

4.7

5,500

4.8

5,560

5.8

3,100

27.9

64.99

*Notes(1) Changes affecting the consolidation status of significant subsidiaries during the period: Yes(Changes in specific subsidiaries accompanying a change in scope of consolidation)
Newly Consolidated: None
Newly Deconsolidated: Best Bridal Korea Inc.
Note: For details, please refer to “(5) Notes to the Consolidated Financial Statements (Changes inSignificant Subsidiaries for Fiscal Year 2018)" in the section "3. Consolidated Financial Statements
and Main Notes" on page 14 in the accompanying materials.
(2) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: None
2) Changes other than noted in 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None(3) Shares issued (common stock)1) Number of shares issued at end of period(including treasury stock)2) Number of shares held in treasury at end of period

3) Average number of shares outstanding during the period

December 31, 2018

December 31, 2017

48,960,000

48,960,000

1,259,834

1,259,834

Year ended

Year ended

December 31, 2018

December 31, 2017

47,700,166

47,700,166* This Earnings Report is exempt from auditing conducted by certified public accountants or byauditing firms.

*Appropriate Use of Earnings Forecast and Other Important Information(Cautionary Statement with Respect to Forward-Looking Statements)
Any forecasts and forward-looking statements given herein are based on information available as of thisreport’s publication and on certain assumptions that are deemed reasonable. These forecasts are notguarantees of future performance, and actual results may differ from forecasts due to changes in thebusiness environment. For the assumptions underlying the forecasts herein and other notice on the useof earnings forecasts, please refer to “(4) Earnings Forecast for the Fiscal Year Ending December 31,
2019” in the section “1. Review of Consolidated Financial Results” on page 5 in the accompanying
materials.

(Presentation handout materials)
The Company has scheduled an earnings presentation targeted at institutional investors and analysts on
February 18, 2019.
The presentation handout materials will be posted on the Company's website immediately after the event.

Accompanying Material – Contents
1. Review of Consolidated Financial Results(1) Operating Results for Fiscal 2018
(2) Analysis of Financial Condition(3) Overview of Cash Flows(4) Earnings Forecast for the Fiscal Year Ending December 31, 2019
2. Basic Views on Adoption of Accounting Standards
3. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheets(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income(3) Consolidated Statements of Changes in Net Assets(4) Consolidated Statements of Cash flows(5) Notes to the Consolidated Financial Statements(Note on the Going-concern Assumption)(Changes in Significant Subsidiaries for Fiscal Year 2018)(Additional Information)(Segment Information)(Per Share Information)(Significant Subsequent Events)
4. Other Information(1) Changes in Officers(2) Weddings Held and Orders Received

1

2
2
3
3
5
5
6
6
8
8
9
10
12
14
14
14
14
15
18
18
19
19
19

1. Review of Consolidated Financial Results(1) Operating Results for Fiscal 2018
In the fiscal year ended December 31, 2018, the Japanese economy followed a recovery path thanks to
the improvement in corporate earnings, increased personal spending and improved employment
conditions on the back of the government’s various economic policies. However, the future outlook
remains clouded by the impact that trade issues between the U.S. and China could have on the global
economy and the uncertainties in the economic conditions abroad.
In the bridal market, the core business of the Tsukada Global Holdings Group (“the Company”), thenumber of weddings in Japan in fiscal year 2018 was estimated at 590,000, compared with 607,000,
down 2.8% from fiscal year 2017 (source: Outline of Vital Statistics in Japan, Ministry of Health, Labourand Welfare). Although the declining birthrate is gradually having a discernible impact, Japan’s wedding
market environment remains generally stable, due partly to a steady rise in wedding expenditures per
wedding due to late-life marriages. Moreover, the number of foreign visitors to Japan, even though thegrowth rate has slowed down from the 19.3% rate in 2017, is estimated to have reached 31.19 million in2018 (up 8.7% year-on-year from the 28.69 million in 2017 according to the Japan National Tourism
Organization), and the hotel market is continuing to expand steadily owing to the recovery in theJapanese economy, and the continued increase in the number of foreign visitors. The relaxation-related
market, though witnessing a slowdown in growth on the whole, enjoyed stable growth thanks to theburgeoning interest in health and beauty in addition to the market’s existing underlying strength.
In this market environment, the Group endeavored to expand sales and enhance profitability byaccurately responding to customers’ increasingly individualized and diversifying needs in the bridal, hotel,
and wellness and relaxation (W&R) markets while working to create new value, develop high-quality,
appealing outlets, and provide high value-added services.
Based on this policy, the Company has taken steps this term to expand its earnings and geographicaloperating areas with, for example, the opening of ArtGrace Next Ashiya (Ashiya, Hyogo Prefecture) in
March 2018 and the preparations for the opening of the Kimpton Hotel Shinjuku, Tokyo (provisionalname), expected to be opened in 2020.
As a result of these efforts, in the fiscal year ended December 31, 2018, the Company posted
increased revenue and profits. Consolidated net sales were ¥60,197 million (up 5.1% year on year).
Operating income totaled ¥5,249 million (up 23.0%) and ordinary income totaled ¥5,257 million (up19.5%). However, given the likelihood of losses caused by worsening profitability of some assets held in
the wedding business and W&R business segments, the Company posted an impairment loss of ¥1,183
million taking into account future business plans and recoverability, and as a result profit attributable toowners of the parent came to ¥2,424 million (up 10.0%).
1) Wedding businessIn fiscal 2018, sales grew in the wedding business bolstered by an increase in the number of overseas
weddings and mainstay Japanese weddings as well as the commencement of full-year operations at
the Strings Omotesandoh. Segment profits increased as the Company primarily promoted internal
handling of the various materials related to wedding ceremonies such as photographs, videos, andfloral decorations.
As a result, net sales in the wedding business were ¥38,113 million (up 7.8% year on year), and2

segment operating income was ¥6,333 million (up 25.2%).
2) Hotel businessIn fiscal 2018, even though overnight accommodation occupancy rates and average charge per nightrose leading to increased accommodation-related sales, sales of the hotel business decreased slightly
due to the decrease in the number of weddings held at hotels and lost opportunities due to somerefurbishment work. Income in the segment decreased due to the decrease in the number of
weddings as well as the expenses associated with the preparations for the opening of the Kimpton
Hotel Shinjuku, Tokyo (provisional name).
As a result, net sales in the hotel business came to ¥18,244 million (down 0.3% year on year), andsegment operating income totaled ¥981 million (down 24.3%).
3) W&R business (Wellness & Relaxation business)
This segment achieved sales growth in the period under review, as it made solid progress withincreasing membership at its Best Style Fitness Shin-Urayasu, a comprehensive fitness club that
opened in 2017, as well as at the fitness department of the Beauty & Relax SPA-HERBS spa complex.
However, the segment posted an operating loss owing to the startup costs of nine Queensway
reflexology salons as well as Best Style Fitness Balance Ginza and Best Style Fitness Kaihin
Makuhari.
As a result, the W&R business posted net sales of ¥3,839 million (up 6.0% year on year) and asegment operating loss of ¥426 million (compared with a loss of ¥406 million a year earlier).
(2) Analysis of Financial Condition
Assets, Liabilities, and Net Assets
Total assets at the end of the fiscal year (December 31, 2018) amounted to ¥90,862 million, an increaseof ¥6,415 million from the end of the previous fiscal year (December 31, 2017). The change largely
reflects a ¥9,220 million increase in cash and deposits due to the sale of the commercial-use land at
Jingumae in Tokyo as well as financing and a ¥1,324 million increase in construction in progress due tothe construction of Kimpton Hotel Shinjuku, Tokyo (provisional name), while land holdings declined¥5,328 million primarily due to the sale of the Jingumae property.
Liabilities at the end of the fiscal year came to ¥53,780 million, an increase of ¥5,114 million from theend of the previous fiscal year. The increase is chiefly attributable to an increase of ¥13,305 million in
long-term debt (including the current portion) owing to fund procurement for capital investment, which
outweighed an ¥8,100 million decline in short-term debt due to repayment.
Net assets at the end of the fiscal year totaled ¥37,081 million, an increase of ¥1,300 million fromthe end of the previous fiscal year. The change is primarily due to a ¥2,032 million increase in retained
earnings reflecting the posting of profit attributable to owners of the parent, which offset a ¥368 million
decrease in foreign currency translation adjustments and ¥249 million in deferred loss on derivatives
under hedge accounting.
(3) Overview of Cash Flows
Cash and cash equivalents (“cash”) at the end of the fiscal year increased by ¥9,220 million from theend of the previous fiscal year to ¥24,117 million. Cash flows and factors behind changes in the cash
flows are explained below.

3

(Operating cash flow)
Cash provided by operating activities during the fiscal year totaled ¥5,871 million, a decline of 16.9%
from the previous fiscal year. The change is mainly attributable to ¥3,275 million in depreciation andamortization and ¥4,389 million in profit before income taxes, partially offset by ¥2,275 million in income
taxes paid.
(Investing cash flow)
Cash used in investing activities totaled ¥196 million, compared with ¥3,976 million in the previous fiscal
year. The change is mainly the result of ¥7,255 million for purchase of tangible assets, partially offset bythe ¥6,800 million proceeds from sales of tangible assets.
(Financing cash flow)
Cash gained in financing activities in the fiscal year totaled ¥3,704 million, compared with ¥3,573 million
cash used in the previous fiscal year. The change is mainly attributable to proceeds of ¥17,420 million
from long-term debt payable compared with the ¥8,100 million decrease in short-term debt payable,
repayments of long-term debt of ¥4,064 million and the redemption of corporate bonds of ¥744 million.
Changes in the Tsukada Global Holdings Group’s cash flow-related indicators are as follows.
FY2014FY2015FY2016FY2017FY2018Return on equity (%)

42.7

39.6

38.5

40.5

39.1

Return on equity based onmarket value (%)

60.1

47.7

39.3

37.5

31.3

Cash
flow
interest-bearing(years)

to
debt

3.9

6.2

5.8

5.0

6.6

Interest(times)

ratio

32.6

24.8

27.2

33.9

26.3

coverage

Notes:
Return on equity: Total equity/Total assets
Return on equity based on market value: Market valuation/Total assets
Cash flow to interest-bearing debt: Interest-bearing debt/Operating cash flow
Interest coverage ratio: Operating cash flow/Interest expenses
1. All indicators are calculated based on consolidated figures.
2. Cash flows from operating activities in the Consolidated Statements of Cash Flows are used for
operating cash flow. Interest-bearing debt includes all liabilities recorded on the Consolidated
Balance Sheets on which interest is paid. Interest paid in the Consolidated Statements of Cash
Flows is used for Interest expenses.

4(4) Earnings Forecast for the Fiscal Year Ending December 31, 2019
Regarding the economic environment in which the Tsukada Global Holdings Group operates, theeconomy continued on a recovery track reflecting improvement in corporate earnings and an upturn inconsumer spending as well as improvement of employment conditions thanks partly to the impact ofvarious policy measures. However, the economic outlook is likely to remain unclear primarily due to thetrend of trade disputes between the U.S. and China and uncertainties over the direction of overseas
economies.
The Group intends to actively develop products which accurately meet ever-changing customer needs
and constantly strive to create new value. It will also aim to improve its cost-competitiveness and further
enhance profitability through efficient outlet operation and the development of human resources.
The wedding order backlog at the end of the fiscal year under review (December 31, 2018) was 8,298(up 2.9% year on year). For the fiscal year ending December 31, 2019, the Company forecasts
consolidated net sales of ¥63,000 million (up 4.7%), operating income of ¥5,500 million (up 4.8%),
ordinary income of ¥5,560 million (up 5.8%), and profit attributable to owners of the parent of ¥3,100
million (up 27.9%).

2. Basic Views on Adoption of Accounting Standards
The Company’s financial statements are prepared in accordance with the accounting principles
generally accepted in Japan (Japanese GAAP), in order to ensure comparability with other companies in
the peer. As to the possible future adoption of the International Financial Reporting Standards (IFRS), theCompany shall continue its study going forward, taking into account the future developments of theCompany’s business and of the global and Japanese business environments.

5

3. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheets
December 31, 2017
AmountAssetsCurrent assets
Cash and deposits
Accounts receivable – tradeMarketable securities
Merchandise
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful receivables
Total current assets
Fixed assets
Tangible assets
Buildings and structures
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total tangible assets
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Deferred assets
Bond issuance costs
Total deferred assets
Total assets

6(millions of yen)
December 31, 2018
Amount14,985
1,108
118
557
416
1,256
(38)
18,40424,206
1,281
289
127
490
782
1,136
(24)
28,28946,083(21,338)
24,74520,881647
7,918(6,019)1,898
48,173

48,680(23,318)
25,361
15,553
1,972
8,500(6,777)
1,723
44,610

2,004
231
2,236

1,738
184
1,922

2,675
8,663
3,343
1,048
(180)
15,55065,960

2,557
8,152
3,415
1,961
(206)
15,87962,41282
82
84,447160
160
90,862

December 31, 2017
AmountLiabilities
Current liabilities
Accounts payable – trade
Short-term debt
Current portion of long-term debt
Current portion of bonds
Current portion of convertible bonds with stockacquisition rights
Income taxes payable
Advances received
Other
Total current liabilities
Fixed liabilities
Bonds
Long-term debt
Net defined benefit liability
Provision for directors’ retirement benefits
Asset retirement obligations
Other
Total fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

7(millions of yen)
December 31, 2018
Amount

2,461
8,100
3,633
744

2,437
3,172
590

500

-

1,234
1,625
4,009
22,307

1,313
1,884
4,381
13,7783,415
18,848
353
738
2,369
632
26,35848,666

3,125
32,614
302
784
2,391
783
40,00153,780472
634
33,816(892)
34,030472
634
35,849(892)
36,063

(66)

(142)

-

(249)

250
(5)
178
1,572
35,781
84,447

(118)
(4)
(514)
1,533
37,08190,862

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(millions of yen)
Year ended
Year ended
December 31, 2017 December 31, 2018
AmountAmount57,25360,197
Net sales
Cost of sales
38,71340,59818,54019,599Gross profit
14,272
14,349Selling, general and administrative expenses
4,268
5,249
Operating income
Non-operating income
Interest income
36
29
Dividend income
328Gain on investments in silent partnership
166
150
Real estate rental income
253
213
Foreign exchange gains
93
Other
92
93
Total non-operating income
675
495
Non-operating expenses
Interest expenses
212
233
Loss on valuation of derivatives
178
Real estate rental expenses
101
96
Foreign exchange loss
81
Other
51
77
Total non-operating expenses
544
488
4,398
5,257
Ordinary income
Extraordinary income
Gain on sales of fixed assets
0492
Gain on sales of investment securities
1
Other
2
Total extraordinary income
1494
Extraordinary loss
Impairment loss
192
1,183
Other
278
178
Total extraordinary loss
471
1,361
3,929
4,389
Profit before income taxes
1,873
2,218
Income taxes – current
(174)
(275)
Income taxes – deferred
1,699
1,942
Total income taxes
2,229
2,446
Profit for the period
26
22Profit (loss) attributable to non-controlling interests
2,203
2,424
Profit (loss) attributable to owners of the parent

8

Consolidated Statements of Comprehensive Income

Profit for the period
Other comprehensive income
Net unrealized gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Remeasurements of defined benefit plan
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to non-controllinginterests

9

Year ended
December 31, 2017
Amount2,229(millions of yen)
Year ended
December 31, 2018
Amount
2,446

(8)

(75)

-

(249)

(174)
(1)
(183)
2,046

(397)
0
(722)
1,724

2,067

1,731

(21)

(6)

(3) Consolidated Statements of Changes in Net Assets
Year ended December 31, 2017 (January 1 to December 31, 2017)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Retainedearnings

Treasury stock

32,090Changes during term
Cash dividends
Profit attributable to owners of
the parent
Net changes in items other

(892)

Total
shareholders’equity32,304

(477)

(477)

2,203

2,203

than shareholder's equity
Total changes during term

-

-

1,726

-

1,726

Balance at end of term

472

634

33,816(892)

34,030

Accumulated other comprehensive income

Balance at beginning ofterm

Net unrealized
gain onavailable-for-salesecurities

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans

Total
accumulated
othercomprehensive
income

(58)

376

(3)

313

Non-controllinginterests

1,610

Total net
assets34,228Changes during term
(477)

Cash dividends
Profit attributable toowners of the parent
Net changes in items
other than

2,203

(8)

(125)

(1)

(135)

(38)

(173)

Total changes during term

(8)

(125)

(1)

(135)

(38)

1,552

Balance at end of term

(66)

250

(5)

178

1,572

35,781shareholder's equity

10

Year ended December 31, 2018 (January 1 to December 31, 2018)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Changes during term
Cash dividends
Profit attributable to owners of
the parent
Change in scope of
consolidation

Retainedearnings
33,816

Treasury stock
(892)

Total
shareholders’equity34,030

(477)

(477)

2,424

2,424

85

85

Net changes in items otherthan shareholder's equity
Total changes during term

-

-

2,032

-

2,032

Balance at end of term

472

634

35,849(892)

36,063

Accumulated other comprehensive income
Total
Deferred gain
Foreign
Remeasurements accumulated(loss) on
currency
otherof defined
derivatives
translation
comprehensive
benefit plans
under hedge
adjustments
incomeaccounting

Non-controllin
g interests

Total net assets

1,572

35,781

Net unrealized
gain onavailable-for-s
ale securities
Balance at beginningof term

(66)

-

250

(5)

178

Changes during term
(477)

Cash dividends
Profit attributable toowners of theparentChange in scope of

2,424

85

consolidation
Net changes in
items other than

(75)

(249)

(368)

0

(692)

(38)

(731)

Total changes during
term

(75)

(249)

(368)

0

(692)

(38)

1,300

End of term balance

(142)

(249)

(118)

(4)

(514)

1,533

37,081shareholder'sequity11

(4) Consolidated Statements of Cash flows(millions of yen)
Year ended
Year ended
December 31, 2017 December 31, 2018
AmountCash flows from operating activities
Profit before income taxes
Depreciation and amortization
Amortization of goodwill
Amortization of bond issuance costs
Increase (decrease) in allowance for doubtful receivables
Interest and dividend income
Interest expenses
Loss on disposal of tangible assets(Gain) loss on sales of fixed assets
Impairment loss
Shop closing expenses(Gain) loss on sales of investment securities
Loss on valuation of affiliated companies’ shares(Gain) loss on valuation of derivatives(Gain) loss on investments in silent partnership
Foreign exchange (gain) loss
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement
benefits(Increase) decrease in notes and accounts receivable –trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in advances received
Increase (decrease) in accrued consumption taxes(Increase) decrease in other assets
Increase (decrease) in other liabilities
Other
Sub totalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

12

Amount

3,929
3,344
266
27
154
(68)
212
13
(0)
192
15
8
24
178
(166)
(95)
20

4,389
3,275
266
20
11
(38)
233
49
(491)
1,183
90
(7)
(150)
11
(49)

36

45

(143)

(173)

(54)
99

57
(22)

289

262

(144)
(91)
295
619
8,964
41
(208)
(1,734)
7,062

176
(2)
(324)
(236)
8,578
18
(230)
(2,316)
6,050

Year ended
Year ended
December 31, 2017 December 31, 2018
AmountCash flows from investing activities
Purchase of tangible assets
Proceeds from sales of tangible assets
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Repayment of contributions from the silent partnership
Loans receivableCollection of loans receivable
Lease and guarantee deposits
Collection of lease and guarantee deposits
Payments of construction assistance fund receivables
Other- net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term debt
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bonds
Payments for redemption of bonds
Payments for redemption of convertible bonds
Dividends paid to non-controlling interests
Dividends paid to shareholders
Other – net
Net cash provided by (used in) financing activities
Foreign currency translation adjustments on cash andcash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Decrease in cash and cash equivalents resulting fromexclusion of subsidiaries from consolidation
Cash and cash equivalents, end of period

13

Amount(4,226)
(56)
(257)
227
540
(42)
42
(144)
9
(50)
(17)
(3,976)(7,255)
6,800
(38)
67
82
(26)
(143)
200
(63)
(375)

8,100
7,001
(13,329)488(849)(4,500)
(16)
(476)
9
(3,573)(8,100)17,520(4,164)
201
(744)
(500)
(31)
(477)
3,704

3

(3)

(483)
15,3809,375
14,896-(154)

14,89624,117

(5) Notes to the Consolidated Financial Statements(Note on the Going-concern Assumption)
Not applicable(Changes in Significant Subsidiaries for Fiscal Year 2018)
Effective from the fiscal year ended December 31, 2018, Best Bridal Korea Inc., which used to be aconsolidated subsidiary of the Company in the previous fiscal year, has now been excluded from thescope of consolidation due to the lack of materiality.
(Additional Information)
Some of the Company’s consolidated subsidiaries in Japan used to have a lump-sum retirement
payment plan, as well as defined benefit and defined contribution corporate pension plans. Effective
on April 1, 2018, however, these plans have been abolished. In relation to this abolishment,“Accounting Treatment concerning Transfer, etc. between Retirement Benefit Plans” (ASBJ
Implementation Guidance No. 1 on Accounting Standard) and “Practical Solution on Accounting
Treatment concerning Transfers, etc. between Retirement Benefit Plans” (Practical Issues Task
Force PITF No. 2) have been implemented. The financial effect of the said implementation was
immaterial on the fiscal year ended December 31, 2018.

14

(Segment Information)
1. Overview of reportable segment
The Company Group’s reportable segments are components of the Group about which separate financial
information is available. These segments are subject to periodic examinations to enable the Company’sboard of directors to decide how to allocate resources and assess performance.
The Group’s operations are classified into three reportable segments: the “Wedding business” thatprovides services such as planning and operation related to wedding ceremonies and banquets in Japanand overseas, the “Hotel business” that offers the management of hotel weddings and banquets, andprovision of hotel accommodation services, and the “W&R business” segment that provides reflexology
services and management of a spa complex and a comprehensive fitness club.
“Wedding business” comprises outlet management in Japan and sales to customers, provision of foodand drinks at wedding banquets, dress rental and beauty care services, as well as management of venues
and operations for weddings and banquet in Hawaii and Bali Indonesia, mainly for customers who bookthrough the Group’s sales salons in Japan. “Hotel business” offers the management of hotel weddings andbanquets, and provision of hotel accommodation services at Hotel InterContinental Tokyo Bay, The Strings
by InterContinental Tokyo, Sir Winston Hotel Nagoya by the Strings, and The Strings Hotel Nagoya. “W&Rbusiness” operates a British-style reflexology salon, “Queensway” with a high level of skills andsophisticated know-how of attending to customers, as well as managing a spa complex, “Beauty &Relax
SPA-HERBS,” and a comprehensive fitness club, “BEST STYLE FITNESS.”

2. Calculation of net sales, income/loss, assets, liabilities, and other items by reportable segment
Accounting methods applied in the reportable business segments are in accordance with theaccounting policies that are adopted for the preparation of consolidated financial statements.
Reportable segment income is based on operating income.
Intersegment sales or transfers are based on market price.

15

3. Net sales, income/loss, assets, liabilities, and other items by reportable segment

Year ended December 31, 2017 (January 1 to December 31, 2017)(millions of yen)

Reportable segment
Amountrecorded on

WeddingbusinessHotelbusiness

W&R
business

Total

Adjustments

consolidated(note 1)

financialstatements(note 2)

Net sales
Sales to outside
customers
Inter-segment sales
and transfers

35,33918,2903,623

57,253-57,253

1,407

373

1

1,782

(1,782)-

Total

36,747

18,663

3,625

59,036(1,782)57,253

Segment income (loss)

5,060

1,296

(406)

5,950

(1,682)

4,268

Segment assets

33,80923,452

6,095

63,35721,08984,447

1,721
-

1,213
128

332
138

3,267
266

77
-

3,344
266

3,396

678

556

4,631

103

4,735

Other items
Depreciation/amortization
Amortization of goodwill
Increase(decrease) intangible and intangible
assets
Notes: 1. Details of adjustments are as follows:(1) The minus 1,682 million yen adjustment for segment income or loss includes 37 million yen elimination ofinter-segment sales and minus 1,719 million yen of unallocated corporate expenses. The main component of these
unallocated corporate expenses is SG&A expenses that are not attributable to reportable segments.
(2) The 21,089 million yen adjustment for segment assets comprises unallocated corporate assets. Unallocatedcorporate assets consist mainly of cash and deposits held by the Company which are not attributable to reportablesegments.
(3) The 77 million yen adjustment for depreciation/amortization comprises depreciation/amortization for unallocatedcorporate assets.
(4) The 103 million yen adjustment for increase in tangible and intangible assets comprises investments in unallocatedcorporate assets.
2. Segment income or segment loss is adjusted to correspond with operating income reported on the consolidated
statements of income.

16

Year ended December 31, 2018 (January 1 to December 31, 2018)(millions of yen)

Reportable segment
Amountrecorded on

WeddingbusinessHotelbusiness

W&R
business

Total

Adjustments

consolidated
financial(note 1)statements(note 2)

Net sales
Sales to outside
customers
Inter-segment sales
and transfers

38,113

18,244

3,839

60,197-60,197

1,447

344

1

1,793

(1,793)-

Total

39,56018,5883,841

61,990(1,793)60,197

Segment income (loss)

6,333

981

(426)

6,888

(1,638)5,249

Segment assets

27,731

24,9195,233

57,88532,97790,862

1,733
-

1,106
128

361
138

3,200
266

74
-

3,275
266

1,955

1,612

861

4,429

3,251

7,680

Other items
Depreciation/amortization
Amortization of goodwill
Increase(decrease) intangible and intangible
assets
Notes: 1. Details of adjustments are as follows:(1) The minus 1,638 million yen adjustment for segment income or loss includes 114 million yen elimination ofinter-segment sales and minus 1,753 million yen of unallocated corporate expenses. The main component of these
unallocated corporate expenses is SG&A expenses that are not attributable to reportable segments.
(2) The 32,977 million yen adjustment for segment assets comprises unallocated corporate assets. Unallocatedcorporate assets consist mainly of cash and deposits held by the Company which are not attributable to reportablesegments.
(3) The 74 million yen adjustment for depreciation/amortization comprises depreciation/amortization for unallocatedcorporate assets.
(4) The 3,251 million yen adjustment for increase in tangible and intangible assets comprises investments in unallocatedcorporate assets.
2. Segment income or segment loss is adjusted to correspond with operating income reported on the consolidated
statements of income.

17(Per Share Information)

Net assets per share
Profit for the period per share
Diluted profit per share
Note:

Year ended December 31, 2017717.16 yen
46.19 yen42.31 yen

Year ended December 31, 2018745.24 yen
50.82 yen
50.40 yen

The calculation base for profit for the period per share and for diluted profit per share is as follows:Year ended
December 31, 2017

Year ended
December 31, 2018

2,203

2,424

-

-

2,203

2,424

47,700,166

47,700,166--

4,363,623

398,739[4,363,623][398,739]

Profit for the period per share
Profit attributable to owners of the parent(millions of yen)Amount not attributable to common
stockholders (millions of yen)
Profit attributable to common stocks ofowners of the parent (millions of yen)
Average number of common stocks
outstanding during the term (shares)
Diluted profit per share
Adjustment to profit attributable to owners of
the parent (millions of yen)
Increase in the number of common stock(shares)[Of which convertible bond with stockacquisition rights (shares)]
Residual securities that are not dilutive and notincluded in the calculation for diluted profit per
share

-

(Significant Subsequent Events)
Not applicable184. Other Information(1) Changes in Officers
Not applicable(2) Weddings Held and Orders Received
1) Number of weddings held
Year ended December 31, 2017

Year ended December 31, 2018

Number of weddings held (cases)
11,800

Number of weddings held (cases)
12,806

Hotel business

1,845

1,712

Total

13,645

14,5182) Wedding orders received
Year ended December 31, 2017

Year ended December 31, 2018

Segment
Wedding business

Segment

Orders received

Order backlog

Orders received

Order backlog

Wedding business(cases)
12,571(cases)6,949(cases)12,976(cases)7,119Hotel business

1,704

1,116

1,775

1,179

Total

14,275

8,065

14,7518,298

19