Financial Results Presentation for the Second … Financial Results...NitoriHoldingsCo.,Ltd.Holdings...

Nitori Holdings Co., Ltd.Nitori Holdings Co., Ltd.Financial Results Presentationfor the Second Quarter of FY2016

September 27 2016TSE Ticker Code : 9843

September 27 , 2016

Overview of Consolidated Financial Results（Billions of Yen）

1H FY201621 F b 20 A 2016

1H FY201521 F b 20 A 2015

Change21 Feb-20 Aug 2016

(to sales)21 Feb-20 Aug 2015

(to sales) (YOY)

2 8 222 2 32 6Net sales 254.8 － 222.2 － 32.6 114.7％

139 5 117 0 22 5Gross profit 139.5 54.8% 117.0 52.6% 22.5 119.3％

SG&A 90 3 80 3 10 0SG&A expenses 90.3 35.5% 80.3 36.1% 10.0 112.6％

Operating 49 2 36 7 12 5Operating income 49.2 19.3% 36.7 16.5% 12.5 134.0％

Ordinary 49 8 37 8 12 0Ordinary income 49.8 19.6% 37.8 17.0% 12.0 132.0％

i 32 8 22 9 9 9Copyright 2016 Nitori Holdings All Rights Reserved 2

Net income 32.8 12.9% 22.9 10.3% 9.9 143.3％

Consolidated Balance Sheets20 Aug 2016

20 Feb 2016 Change Major factors

on changes

（Billions of Yen）

Current assets 141.8 130.0 11.8(Cash and deposits) 63.0 42.3 20.7

Merchandise and(Inventory) 36.8 45.4 (8.6) Merchandise andfinished goods (8.2)

Non-Current assets 302.3 284.6 17.7238 6 224 9 13 7(Property, plant and equipment) 238.6 224.9 13.7 Land ＋7.0 , Buildings ＋11.9

(Investments and other assets) 51.2 48.5 2.7Total assets 444.1 414.5 29.6o a asse s

Current liabilities 83.8 67.6 16.2 Forward exchange contracts liabilities +13.8

(Accounts payable) 13.7 15.4 (1.7)( p y ) ( )(Short-term loans payable) 0.9 1.5 (0.6)

Non-Current liabilities 18.0 16.0 2.0(Long-term loans payable) 0 0.6 (0.6) Repayment

Total liabilities 101.9 83.6 18.3

Total net assets 342 3 331 0 11 3 Net income ＋32 8

Copyright 2016 Nitori Holdings All Rights Reserved

Total net assets 342.3 331.0 11.3 Net income ＋32.8

Total liabilities and net assets 444.1 414.5 29.63

Consolidated Cash Flows

1H FY2016

1H FY2015 Change Major factors

on changes


on changes

Operatingactivities 49.5 32.7 16.8

・Income before income taxes

・Decrease in +50.4

activities inventories・Income taxes paid

+7.9(14.7)

Investing・Purchase of property,plant andInvesting

activities (22.0) (25.1) 3.1property,plant and equipment

・Purchase of intangible assets

(21)

(2.5)h di id d id ( )

Financingactivities (4.9) (4.4) (0.5)

・Cash dividends paid・Repayments of long-term loans payable

(3.9)

(1.3)

Net increase in cash & cash equivalents 21.5 3.2 18.3Cash & cash equivalentsCash & cash equivalents at end of period 58.3 28.9 29.4

（CF from Operating activities


Free cash flow 27.5 7.6 19.9 （CF from Operating activities+CF from Investing activities）

4

Consolidated Financial Ratios 【1H】

Equity Ratio ROE

78.6% 78.9% 76.8%80%

90%9.8%

8%9%

10%

70%8.6%

7.1%6%7%8%

60%Aug 2014 Aug 2015 Aug 2016

5%Aug 2014 Aug 2015 Aug 2016

¥3 014 ¥3,076¥3,500

BPS¥300

EPS

¥2,431

¥3,014 ¥3,076

¥2,500

¥3,000 ¥296¥250

¥1,500

¥2,000

,

¥201 ¥207¥150

¥200

Copyright 2016 Nitori Holdings All Rights Reserved 5

,

Aug 2014 Aug 2015 Aug 2016 Aug 2014 Aug 2015 Aug 2016

Comparable stores , YOY【1H】

Sales※ １０８．２％(all stores ）１１３．８％

No. of Customers(all stores ）

１０７．７％１１５４％

Average Spend

(all stores ）１１５．４％

１００５％Average Spend per Customer １００．５％

¥１０３２６/$Average Exchange Rate ¥１０３.２６/$bilDepreciation

Capital Investment¥ ５.１ bil.¥２４.７ bil.


Capital Investment6

※ Sales= Sales based on orders

¥２４.７ bil.

Trend in YOY changes in comparable stores 【1H】

106 0 108.2115

※Sales = Sales based on orders【Sales , YOY】（％）

101.8 102.8

106.099.6

108.2

105

110

95

100

90

115 No. of Customers Average spend per customer

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

107.7 104.9 102 3

105.5 101 5

110

100 5

104.9 102.3 101.5 100.5

100

105

97.1 100.5 100.5 98.1 90

95


Aug 2012 Aug 2013 Aug 2014 Aug 2015 Aug 20167

Quarterly trend in YOY changes in comparable stores

FY２０１３ FY２０１４ FY２０１５ FY２０１６120

（％）

112.2

108 8109.1

115

100 1

106.0 106.5 106.7 105.2

108.8 107.5

105

110

100.1 105.5

98 7

97.0 100

98.7 97.8

94.3

90

95

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Sales Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016

Furniture ％ 98.1 101.9 105.0 105.3 116.1 94.5 98.4 94.2 89.3 108.0 105.4 107.7 104.0 104.7Home Furnishing ％ 101.9 109.5 107.6 105.8 109.2 102.2 97.6 99.2 98.7 105.8 105.0 109.2 109.8 111.6Comparable stores(Total) ％ 100.1 106.0 106.5 105.5 112.2 98.7 97.8 97.0 94.3 106.7 105.2 108.8 107.5 109.1

Furniture ％ 104.8 108.6 110.9 109.6 120.4 97.7 100.7 98.1 92.9 113.6 111.1 112.4 108.8 109.4


HomeFurnishing ％ 109.2 116.8 114.8 111.1 114.5 107.2 100.9 104.8 104.6 113.4 112.5 115.7 115.9 117.8All(Total) ％ 107.1 113.0 113.1 110.4 117.0 102.9 100.7 101.9 99.2 113.5 111.9 114.5 113.0 114.8

Major factors on YOY changesNet salesGross profitGross profit margins

【Net sales】 Amount YOYStore sales ¥234.1 bil. 113.8%

254 8

Gross profit marginsSG&A ratio

（＋14 7%）

E-commerce ¥11.1 bil. 129.1%Corporatebusiness sales ¥4.3 bil. 108.3%


222.2

254.8

54 8%

（＋14.7%） Rent income ¥3.0 bil. 142.3%Other ¥2.3 bil. 124.4%Total ¥254 8 bil 114 7%

52.6%54.8%(＋2.2pt) 【SG&A】 Amount YOY Ratio to

sales YOY

Personnel ¥28 0 bil 113 1% 11 0% (0 1)pt

Total ¥254.8 bil. 114.7%

117.0

139.5 Personnel ¥28.0 bil. 113.1% 11.0% (0.1)pt

Rents ¥13.5 bil. 108.6% 5.3% (0.3)pt

Delivery

（＋19.3%）

Delivery charge ¥12.1 bil. 109.4% 4.7% (0.3)pt

Advertising ¥6.5 bil. 107.5% 2.6% (0.1)Pt

36.1% 35.5%(-0.6pt) 【Gross profit margins】

FX impact (０．4)ｐｔ

Copyright 2016 Nitori Holdings All Rights ReservedAug 2015 Aug 2016

9

COGS reduction ＋２．6ｐｔ

Results of Opening & Closing Stores (Q2 FY2017)

Oli Ki hi h

Q2 FY2017 ４００stores in JapanOlinas Kinshicho

Ohta Ohtorii

Olinas Kinshicho

COCOLIA TAMA CENTER

Don Quijote Omori

Y hi Ki７stores

Yoshizuya Kiyosu

Vivit Minami Funabashi Ohta OhtoriiFunabashi

AEON Amagi

Tachikawa FROM CHUBU


LUSCA Hiratsuka２storesDECO HOME

No. of stores as of Aug 20,2016

４３７Prefecture No. of

stores Prefecture No. of stores Prefecture No. of

stores

Hokkaido 19 Yamanashi 3 Shimane 2

H kk id 19 I hik 5 Hi hi 12４３７Stores

Hokkaido 19 Ishikawa 5 Hiroshima 12

Aomori 6 Toyama 4 Yamaguchi 5

Akita 4 Fukui 2 Kagawa 4(+1)

Iwate 3 Hokuriku & Koshinetsu 31(+1) Tokushima 2

Yamagata 4 Shizuoka 11 Kochi 2

Miyagi 6 Aichi 23(+1) Ehime 6DECO HOME

３５５(+11)

yag 6 c 3( ) e 6

Fukushima 5 Mie 7 Chugoku & Shikoku 41(+1)

Tohoku 28 Gifu 7 Fukuoka 17(+1)

T k 29(+5) Ch b & T k i 48(+1) Oit 5

４５(+６)

Tokyo 29(+5) Chubu & Tokai 48(+1) Oita 5

Kanagawa 22(+1) Osaka 24(+2) Miyazaki 3

Saitama 23(+3) Kyoto 11 Saga 2

２４５(Taiwan) (USA)

Chiba 21(+1) Nara 3 Nagasaki 3

Gunma 6(+1) Hyogo 20 Kumamoto 5

Tochigi 8 Shiga 5 Kagoshima 6

２４５g g g

Ibaraki 11 Wakayama 5 Okinawa 4

Kanto 120(+11) Kinki 68(+2) Kyushu & Okinawa 45(+1)

ii 8( ) i 2 400８(China)


Niigata 8(+1) Tottori 2Japan 400

(+17)Nagano 9 Okayama 6

８

Sales by region

Eastern 47.0 Western 42.9

E-commerce

Others

5 06 1 30 0 5 7 10 5 15 5 7 8 9 3 4 5 5 6Aug 2016

（％）


E-commerce

Others

5.0 6.1 30.0 5.7 10.5 15.5 7.8 9.3 4.5 5.6 Aug 2016

6.0 7.5 32.9 6.0 11.0 15.8 8.4 8.4 2.3 1.7

Aug 2012


7.6 5.9 37.5 5.4 11.6 16.0 5.1 8.1 Aug 2008


13 2 8 5 42 6 5 5 9 3 11 9 5 9

0.7 2.1

13.2 8.5 42.6 5.5 9.3 11.9 2.0

5.9 1.1

Aug 2004

0% 20% 40% 60% 80% 100%

Hokkaido Tohoku Kanto Hokuriku &Koshinetsu

Chubu &Tokai


Kinki Chugoku &Shikoku

Kyushu &Okinawa E-commerce Others

12

Major indexes of management efficiency（1）Scope

Number Index un

it Target 2016.8 2015.8 2014.8 2013.8 2012.8

1 Return on assets ％ Over 7.5％ ○ 11.6 9.1 11.5 10.5 11.41 ％ ○ 11.6 9.1 11.5 10.5 11.4

2 Total asset turnoverTi

mes

Over 1.0 × 0.59 0.54 0.64 0.64 0.63O di iG

rou

3 Ordinary income margin ％ Over 10％ ○ 19.6 17.0 18.1 16.5 18.1

4 Earnings per share ¥ Over ¥50 ○ 296.4 207.5 201.0 162.5 159.0p

︵Six

5 Return on equity ％ Over 7.5％ ○ 9.8 7.1 8.6 8.2 9.6

6 E it ti ％ O 60％ ○ 76 8 78 9 78 6 74 9 70 6

x m

on

t

6 Equity ratio ％ Over 60％ ○ 76.8 78.9 78.6 74.9 70.6

7 Interest coverageTi

mes

Over 20 ○ 1,475.7 945.1 818.2 448.5 310.8ths

︶8 Sales growth rate ％ Over 10％ ○ 14.7 5.4 12.9 9.8 6.8

9 Ordinary income th t ％ Over 10％ ○ 32.0 (1.1) 24.0 0.1 16.59 growth rate ％ Over 10％ ○ 32.0 (1.1) 24.0 0.1 16.5

10 Ratio of gross profit to sales ％ Over 48％ ○ 54.8 52.6 51.9 52.8 55.2R ti f b k


11 Ratio of break-even point to sales ％ Under 80％ ○ 60.2 63.7 61.0 64.9 66.8

13

Major indexes of management efficiency (2)Scope

Number Index un

it Target 2016.8 2015.8 2014.8 2013.8 2012.8

12 Sales per tsubo K Over ¥950K ○ 998 926 940 886 880

Sa

le

998 9 6 9 0 886 880

13 Stock turnoverTi

mes

Over 9 × 6.3 6.1 6.8 6.8 7.0

14 Operating assets Ti○ 4 5 4 4 4 8 4 9 5 0

e o

f fur

n

14 Operating assets turnover me

sOver 2.9 ○ 4.5 4.4 4.8 4.9 5.0

15 Ratio of profit distribution ％ Over 20％ ○ 37.8 36.9 34.5 35.7 32.1

nitu

re

a

16 Ratio of real estate cost to gross profit ％ Under 25％ ○ 20.3 22.1 21.5 22.1 22.3

17 Ratio of sales promotion cost to gross profit ％ Under ６％ ○ 5.3 5.9 5.9 6.2 6.6a

nd

ho

m

cost to gross profit

18 Labor productivity M Over ¥10M ○ 19.70 17.98 18.90 19.31 19.70Ts

37 1 38 2 39 8 42 8 42 2e fu

rn

is

19 Sales floor per labor ubo

Over 60 × 37.1 38.2 39.8 42.8 42.2

20 Operating income per tsubo K Over 150K ○ 177 135 149 133 140s

hin

g 21 Stock per tsubo K Under ９0K ○ 72 73 67 61 5722 Average age of labor 30〜35 ○ 32.9 32.4 32.3 32.2 31.7


22 g g ○ 32.9 32.4 32.3 32.2 31.7Results （○win/×lose） ○19×3 ○14×8 ○17×5 ○14×8 ○15×7

14

TOPICS Q２Q

Merchandise Branding StrategyDeveloping company-owned brands

with different price rangeswith different price ranges

More “STYLE” to your daily life

“Better VALUE” in your everyday your daily life

A lineup of stylish goods

your everyday

A lineup of “easy-to- A lineup of stylish goods focused on quality and

design for a better lifestyle

A lineup of easy tocoordinate” daily goods at a

low price

Comingi F ll 2017

Available at 90 storesf S t 2016


in Fall 2017from Sept 201616

Merchandise Branding StrategySimple & Modern


Fun-and-easy-to-coordinate colors for everyone. At a low price.17

School Backpack & Desk

Early Launch on June 24

2015J l 17

2016J 24July 17

All storesJune 24 Pre-sales at

some storesJuly 11 All stores

Adjusting to the early demand trend of the market l t l t t d l t 50 t lllately, we started pre-sales at 50 stores, as well as online

Through early launch and active sales promotion,achieved a great increase in sales

“Natural wood desk”, decorated with a new color and a beautiful wood grain is a new popular item


Promotion Activities

“Enfant Summer Festival” boothAn event sponsored by “Enfant”, a parenting magazine for

mothers with children in kindergartenChildren can try the newest models of backpacks from

various brands

Shared a common booth in collaboration with TEIJIN LtdShared a common booth in collaboration with TEIJIN Ltd.

●Attended by approximately 10,000 people in both Osaka and Tokyo


Product Development

N-sleep New VariationsDeveloping a firm-type mattress for our

best-selling original N-sleep seriesg g p

Utilizing a firmer pocket coils, we managed to enhance support while maintainingto enhance support while maintaining comfort-fit feel

Providing more variationsto the existing series


Product Development

N－Textile Original Custom Made Curtains

Adopt a domestically-produced high quality fabric to compete with other key manufacturers

Provide a product lineup that is up to one third cheaper than manufacturerʼs catalogs Easy-to-choose combination of drape (front) and sheer(back) curtains


Product Development

N-warm Now on saleIncreased the volume of filling as well as

performance; moisture-absorption and heat release providing more warmthheat-release, providing more warmth with the same price

Added a new lower-priced comforter toAdded a new lower priced comforter to the lineup

More design variations for carpet/rugMore design variations for carpet/rug


Seasonal Coordination Series

Cafe Time WINTER HOLIDAY

The latest trend of coordination Using mostly warm colors, series that is widely mentioned on the SNS

R l i d t li h t

“Live warmly” coordination series.“Exciting Winter holiday” theme

i i d f i l d


Relaxing and stylish room concepts inspired from a camping lodge

Coordination Ideas

NITORIMOOK magazine Vol 2MOOK magazine Vol.2

Coordination techniques using Nitoriʼs itemsCoordination techniques using Nitori s items suggested by popular bloggers and Instagram users

New items introductions for the season

A total of 80 pages of expertsʼ lessons on interior as well as tips and ideas on using our best-selling itemsbest selling items

Published twice a year（Spring & Summer edition/Autumn & Winter edition)edition/Autumn & Winter edition)

Available at all Nitori & Deco-Home Stores


Making good use of SNS

Posting coordination ideas on the Instagram

Photo posting campaign to share the fun of interior coordination using Nitori products with customersNitori products with customers

Introducing coordination ideas from magazines and displays at stores

Total number of applied photos: 1,361


More convenient “Nitori Net”

Pick-up in store service

Available at all storesfrom July 21

Goods purchased through the internet can be picked up for free

from July 21

internet can be picked up for free of shipping charge.

More than 5,000 users have used this service.

Pre-service test period of “Stock Reserve service” started from Sept. 8 from 16 stores in Tokyo within urban districts.


Corporate Business Sales, Products Developmentー Examples of delivered goods

For healthcare providers Providing “total coordination” with safe and hygienic furniture


Logistic Measures

Swap Body Containers Have been introduced in cooperation with Fuji Transport Co., Ltd.

Vehicle with a detachable container body No waiting time for unloading and uploading improving transportation capacityNo heavy physical work for drivers countermeasure for drivers (labor) shortage

y


No heavy physical work for drivers countermeasure for drivers (labor) shortage

Social Contribution Activity

Nitori Otaru Art Village opened on July 23 Stained Glass Art Gallery

(Former Takahashi warehouse)Art Nouveau Glass Building

(Former Arata Commercial Firm)


Nitori Ladiesʼ Golf Tournament

The 7th Nitori Ladiesʼ Golf Tournament

S ki N iSaki Nagamine, affiliated to Nitori,

d d th 7th i

Winner：Ritsuko Ryu,a professional golfer


was awarded the 7th prize

Nippon Store Awards 2016

1st prize on ʻAdding color to the daily life .̓

Basis of evaluation Rank Points of Evaluation

Overall evaluation

1st Adding color to the daily life

2nd Interior suggestions for daily life2 gg y

Evaluation by visiting

2nd Stores and facilities are laid out for easy shopping

by visiting customers 3rd Products are placed in a way that customers

can compare among various choices

“Nitori” was selected among 360 brands based on the

d t d f i t 260 th d lsurvey conducted from approximate 260 thousand people

in Japan.


in Japan.

Opening Stores in Department Stores

Takashimaya Konandai store

Sales floor: about 5,000㎡

Colorful presentation and extensive


pmerchandise assortment

Opening Stores at Central TokyoOPEN on Sept. 16Nakameguro

Store

Ueno Marui OPEN on Oct 7Ueno Marui Store OPEN on Oct. 7


Store roll-out plan of Central Tokyo

Name Region Open Scale(Unit : tsubo)

Nakameguro Meguro Ward Sep. 16 , 2016 700

Tokyu Toyoko Shib a Wa d Sep 29 2016 130y y(Deco Home) Shibuya Ward Sep. 29 , 2016 130

Ueno Marui Ueno Ward Oct. 7 , 2016 315

Shinjuku Takashimaya Times Square Shibuya Ward Dec. 2016 900

Kannana Umejima Adachi Ward Dec. 2016 2,000

K hi Y S t W d D 2016 2 000Kanpachi Yoga Setagaya Ward Dec. 2016 2,000

Ikebukuro Sunshinecity Toshima Ward Dec. 2016 420

Komae Setagaya-Street Komae City Feb. 2017 1,400


Tobu Ikebukuro Toshima Ward Spring of 2017 1,100

Store roll-out plan in FY 2016

StoreTaiwan USA China

TotalTaiwan USA China

End of Q2 ３５５４５２４５８４３７Q3〜Ｑ4

net increase ＋２２＋９＋３＋１＋３＋３８net increaseEnd of FY

2016 ３７７５４２７６１１４７５2016

China USAChina＋３

USA＋１

Japan＋３１Taiwan


＋３１＋３35

Projection in FY 2016（Billions of Yen）

FY 2016 , Projection（）

FY 2015（）

Change（）（to sales）（to sales）（YOY）

Net sales 500.0 － 458.1 － 41.9 109.1%

Gross profit 263.0 52.6% 243.5 53.2% 19.5 108.0%pSG&A expenses 184.0 36.8% 170.5 37.2% 13.5 107.9%

Operating income 79.0 15.8% 73.0 15.9% 6.0 108.2%

Ordinary income 80.0 16.0% 75.0 16.4% 5.0 106.7%

Net income 51.4 10.3% 47.0 10.3% 4.4 109.4%


No change of projection

【DISCLAIMER】The forecasts and projected operating results contained in this report are based on information available at the time of preparation, and thus involve inherent risks and uncertainties.Accordingly readers are cautioned that actual results may differ materially from thoseAccordingly, readers are cautioned that actual results may differ materially from those projected as a result of a variety of factors.Figures are rounded off to the digits that are displayed.

Financial Results Presentation for the Second … Financial Results...NitoriHoldingsCo.,Ltd.Holdings...

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Transcript of Financial Results Presentation for the Second … Financial Results...NitoriHoldingsCo.,Ltd.Holdings...