健康づくりの Wellness Life グループ Group T O S H O Financial Results for the Fiscal Year Ended March 2017 Progress of Medium-term Management Plan (FY03/16 to FY03/18) June 2017 Financial Results Briefing for Investors Yuichiro Kutsuna, President&COO
Company Profile Company name TOSHO CO., LTD. Headquarter Tokyo Office Established Capital No. of employees (Group) No. of shares outstanding No. of shareholders Share unit 16-5, Mikawaanjo 1-Chome, Anjo-shi, Aichi 11F Mitsubishi Bldg., 2-5-2 Marunouchi, Chiyoda-ku, Tokyo March 1979 (Fiscal Year End: March) 1,580 million yen 411 (as of Apr. 1, 2017) 19,157,500 shares 3,698 (as of 31, 2017) 100 shares Security code Listing market Business category Consolidated subsidiary 8920 Tokyo Stock Exchange First Section Nagoya Stock Exchange First Section Services AB Hotel Co., Ltd. 2
3 TOSHO FY03/17 Consolidated Results Net sales 21,350 million (up 2,125 million YoY +11.1%) Operating income 5,982 million (up 533 million YoY +9.8%) Ordinary income 6,025 million (up 645 million YoY +12.0%) Net income attributable to owners of parent 3,726 million (up 569 million YoY +18.1%) (Million yen) Net sales 21.35bn 7,000 Operating Income 7,000 Ordinary Income 4,000 Net income attributable to owners of parent 3.72bn 20,000 15,000 19.22bn 6,000 5,000 5.44bn 5.98bn 6,000 5,000 5.38bn 6.02bn 3,000 3.15bn 10,000 4,000 3,000 4,000 Maintain the record-high sales and earnings Sales increased for 7 consecutive years earnings increased for 6 consecutive years 3,000 2,000 5,000 2,000 2,000 1,000 1,000 1,000 0 FY03/16 FY03/17 0 FY03/16 FY03/17 0 FY03/16 FY03/17 0 FY03/16 FY03/17
FY03/17 Consolidated Results Sports Club Business No. of sports clubs: 64 Average no. of members: up 4.4% YoY Hotel Business No. of hotels: 9 Operating rate: 87.4% FY03/16 (April 2015 - March 2016) Real estate Business No. of rental apartments: 54 buildings, 2,165 rooms Occupancy rate: 97.4% FY03/17 (April 2016 - March 2017) (Million yen) Results Ratio to sales % Results Ratio to sales % YoY% Increase/ decrease Net sales 19,224 100.0 21,350 100.0 111.1 +2,125 Sports Club Business 14,887 77.5 16,363 76.7 109.9 +1,475 Hotel Business 2,890 15.0 3,507 16.4 121.4 +617 Real Estate Business 1,446 7.5 1,479 6.9 102.2 +32 Gross Profit 7,077 36.8 8,133 38.1 114.9 +1,055 SG&A 1,628 8.5 2,151 10.1 132.1 +522 Operating Income 5,449 28.3 5,982 28.0 109.8 +533 Sports Club Business 3,763 (25.3) 4,314 (26.4) 114.7 +551 Hotel Business 989 (34.2) 982 (28.0) 99.3-7 Real Estate Business 688 (47.6) 675 (45.6) 98.1-13 Adjustments 8-10 - - +2 Ordinary Income 5,380 28.0 6,025 28.2 112.0 +645 Net Income Attributable to Owners of Parent 3,156 16.4 3,726 17.5 118.1 +569 4
(%) 40.0 35.0 33.0 FY03/17 Consolidated Results Favorable same-store sales Growth in gross margin 34.6 36.8 Gross margin 38.1 Operating income margin 30.0 25.0 20.0 15.0 10.0 23.7 23.0 25.5 24.9 Regarding the posting of sales cost & SG&A Expenses up to opening (start of revenue) counted as SG&A Expenses after opening mainly counted as sales cost Average cost to opening for sports clubs & AB Hotels: 40 million per store (Cost of labor, land rental, consumables, sales, etc.) 9.2 9.1 8.5 28.3 28.0 28.0 28.2 Ordinary income margin SG&A expense ratio 10.1 5.0 Opened 9 stores (HSC:7, AB:2) Opened 6 stores (HSC:4, AB:2) Opened 4 stores (HSC:2, AB:2) Opened 8 stores (HSC:5, AB:3) FY03/14 FY03/15 FY03/16 FY03/17 5
FY03/18 Plan Net sales 23,800 million (+11.5% YoY) Operating income 6,500 million (+8.7% YoY) Ordinary income 6,500 million (+7.9% YoY) Net income attributable to owners of parent 4,000 million (+7.3% YoY) (Million yen) Net sales Operating Income Ordinary Income Net income attributable to owners of parent 25,000 23.8bn 7,000 6.50bn 7,000 6.5bn 5,000 20,000 21.3bn 6,000 59.8bn 6,000 6.02bn 4,000 3.72bn 4.0bn 5,000 5,000 3,000 15,000 4,000 4,000 2,000 10,000 FY03/17 FY03/18 3,000 FY03/17 FY03/18 3,000 FY03/17 FY03/18 1,000 FY03/17 FY03/18 6
FY03/18 Plan (Consolidated) Plan to achieve the record-high sales and earnings FY03/17 (April 2015 - March 2017) FY03/18 (April 2016 - March 2018) (Million yen) Results Ratio to sales % YoY% Results Ratio to sales % YoY% Increase/ decrease Net sales 21,350 100.0 111.1 23,800 100.0 111.5 +2,449 Sports Club Business 16,363 76.7 109.9 17,880 75.1 109.3 +1,516 Hotel Business 3,507 16.4 121.4 4,380 18.4 124.9 +872 Real Estate Business 1,479 6.9 102.2 1,540 6.5 104.1 +60 Gross Profit 8,133 38.1 114.9 8,950 37.6 110.0 +816 SG&A 2,151 10.1 132.1 2,450 10.3 113.9 +298 Operating Income 5,982 28.0 109.8 6,500 27.3 108.7 +517 Sports Club Business 4,314 (26.4) 114.7 4,656 (26.0) 107.9 +341 Hotel Business 982 (28.0) 99.3 1,165 (26.6) 118.6 +182 Real Estate Business 675 (45.6) 98.1 679 (44.1) 100.6 +3 Adjustments 10 - - - - - -10 Ordinary Income 6,025 28.2 112.0 6,500 27.3 107.9 +474 Net Income Attributable to Owners of Parent 3,726 17.5 118.1 4,000 16.8 107.3 +273 7
Sales Trends (Actual & Plan) 25,000 20,000 15,000 10,000 5,000 0 2,317 375(12) 389(1) 1,890 (8) Construction Hotels 1,398 468(21) 395(1) 2,755 (12) 1,259 651(30) 488(2) 4,369 (18) Leasing Sports Clubs ( )Total no. of clubs, hotels or buildings Listed on JASDAQ on February 2, 2004 4.9bn 5.0bn 6.7bn 1,452 9.1bn 1,199 1,416 (42) 604(5) 934(37) 486(2) 6,341 (26) 10.8bn 7,552 (33) Listed on TSE & NSE Second Section on March 15, 2013 Moved into facility services Withdrew from construction 10.9bn 274 1,497 (49) 976(5) 736(5) 8,154 (35) 10.6bn 10.8bn 1,360 1,560 (48) (48) 862(5) 8,300 (37) 8,580 (42) 12.0bn 1,367 (49) 993(5) 9,642 (47) 13.2bn 1,406 (50) 1,081 (5) FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 8 Established AB Hotels on October 1, 2014 Listed on TSE & NSE First Section on March 19, 2014 10,783 (53) 15.2bn 1,440 (50) 1,539 (7) 12,245 (60) 16.8bn 1,416 (50) 1,973 (9) 13,498 (64) 19.2bn 1,446 (51) 2,890 (11) 14,887 (66) 21.3bn 1,490 (54) 3,510 (14) 16,300 (71) Plan 23.8bn 1,540 (61) 4,380 (19) 17,880 (81)
Ordinary Income & Ordinary Income Margin Trends 8,000 7,000 6,000 Plan to record all-time high earnings for seven consecutive years 21.4% 23.0% 28.0% 24.9% 28.2% 6,025 27.3% 6,500 30.0% 25.0% 5,000 17.9% 19.7% 18.5% 19.4% 5,380 20.0% 15.5% 14.8% 4,203 4,000 13.4% 13.5% 3,501 15.0% 3,000 2,000 1,000 11.7% 581 674 Ordinary income Ordinary income margin 1,954 1,423 1,603 912 2,087 2,000 2,326 2,845 10.0% 5.0% 0 FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 9 Current plan 0.0%
As of March 2017 Comparison of Membership Age Composition Under 29 30s 40s 50s 60s Over 70 Holiday Sports Club 17.5% 16.2% 20.1% 19.0% 17.6% 9.6% Over 60 27.2% As of March 2017 Company A 13.0% 12.5% 17.7% 18.7% 20.5% 17.7% Over 60 38.2% As of March 2017 Company B 15.7% 14.3% 20.0% 18.7% 18.1% 13.2% Over 60 31.3% As of August 2016 Company C 4.1% 8.9% 23.6% 40.0% 23.4% Over 60 63.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Reference: financial materials of each company, Company C represents 30s as 30s and under (including 20s) as the company has no age data of 20s. 10
Million yen Results and Forecasts of Listed Competitors Ordinary Incomes Tosho 7,000 Tosho Company A Company B 6,000 Maintain the record-high earnings 5,000 4,203 4,000 3,501 2,845 3,000 2,869 2,827 2,636 2,470 2,489 2,326 2,276 2,238 2,087 2,000 1,954 2,539 2,000 1,867 2,163 1,719 1,967 1,603 2,000 2,202 1,423 1,660 1,153 1,372 1,437 912 1,000 581 674 1,332 879 1,049 729 627 754 5,380 3,199 6,025 2,932 3,973 3,512 6,500 Company A 4300 3800 Company B 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Plan 11
FY03/18 Plan (Ordinary income margin) 30.0% Tosho Company A Company B 28.0% 28.2% 27.3% 25.0% 23.0% 24.9% Tosho 21.4% 20.0% 17.9% 19.7% 18.5% 19.4% 15.0% 13.4% 13.5% 15.5% 14.8% 11.7% 10.0% 5.0% 0.0% 7.9% 8.3% 5.5% 6.8% 6.4% 4.4% 3.7% 4.2% 2.9% 4.3% 2.5% 2.1% 3.9% 1.9% 1.9% 2.1% 2.8% 2004 2005 8.6% 2006 2007 2008 2009 2010 2011 2012 5.3% 5.2% 2013 5.4% 4.7% 2014 6.3% 5.0% 2015 6.7% 6.2% 2016 7.9% 7.5% 2017 Company B Company A Plan 8.1% 7.7% 2018 12
TOSHO Market Capitalization Starting small, aiming for strong growth! Market Stock price Market cap Feb. 4, 2004 Listed on JASDAQ Offering price 330 yen 2.5 billion 5.0 billion Initial price 700 yen 15, 2013 19, 2014 Current (May 29, 2017) Listed on TSE, NSE Second Section Listed on TSE, NSE First Section 1,206 yen 22.1 billion 1,646 yen 31.5 billion 5,520 yen 105.7 billion 13
6,000 (Yen) 5,250 TOSHO Stock Price Trends Changes in stock price at the end of month May 29, 2017 5,520 5,380 5,000 4,895 4,725 4,790 4,465 4,630 4,515 4,545 4,470 4,550 5,030 4,000 4,115 3,985 3,895 2016 3,000 2015 3,495 2,976 2,808 2,791 2,730 2,635 2,851 3,000 2,087 2,031 3,425 2,240 3,200 2,977 2,386 2,353 3,435 2,446 3,245 2,743 2,000 2014 2013 1,000 2012 1,839 1,820 1,719 1,775 1,588 1,370 1,450 1,210 684 587 669 668 668 1,253 1,345 1,220 700 730 788 1,430 861 1,511 1,041 1,800 1,814 1,271 1,190 2010 0 454 472 490 495 466 445 449 445 451 478 501 516 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 14
30.0 25.0 20.0 15.0 10.0 5.0 Annual dividend (Yen) 65 5.0 60 5.5 70 6.0 5.0 5.5 6.0 90 7.0 7.0 Dividend Policy Plan to increase dividend for 8 consecutive years 10 Interim dividend: 12 yen, year-end dividend: 12 yen Interim dividend Year-end dividend EPS Dividend policy aligned with earnings 11 12 14 107 18 10.0 Commemo rative dividend (+ 2) 8.0 132 19 10.0 11.0 9.0 164 21 10.0 194 23 12.0 11.0 208 Plan 24 Year-end dividend 12.0 Interim dividend 12.0 EPS (Yen) 200.00 150.00 100.00 50.00 0.00-50.00 0.0 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 15-100.00
Medium-term Management Plan FY03/16 (Result), FY03/17 (Result), FY03/18 16
Segment Overview Wellness Life Tosho Group Three principles of health: Exercise, Nutrition, Rest (No. of stores is as of May 31) TOSHO CO., LTD. AB Hotel Co., Ltd. Sports Club Business Holiday Sports Club Wellness through exercise 71 clubs across Japan Real Estate Business Rental Apartments A City Wellness through comfort 54 buildings across Aichi Prefecture Hotel Business AB Hotel Wellness through good sleep 15 hotels across Japan 17
Progress of Medium-term Management Plan FY03/16 FY03/17 FY03/18 Net sales 18.2 billion 20 billion 22 billion Ordinary income (Ordinary income margin) Original Medium-term 3-year Plan (Issued on May 21, 2015) 4.7 billion (25.8%) 5.2 billion GO (+5) GO (+5) Upward revision Initial plan was already achieved (26.0%) 5.7 billion (25.9%) FY03/16 (Result) FY03/17 (Result) FY03/18 (Plan) Net sales 19.2 billion 21.3 billion 23.8 billion Ordinary income (Ordinary income margin) 5.38 billion (28.0%) 6.0 billion (28.2%) 6.5 billion (27.3%) 18
Medium-term Management Plan FY03/16 (Result) FY03/17 (Plan) FY03/18 (Plan) Net sales 19.2 billion 21.3 billion 23.8 billion Growth rate (YoY) +13.8% +11.1% +11.5% Ordinary income 5.38 billion 6.02 billion 6.50 billion Growth rate (YoY) +28.0% +12.0% +7.9% Ordinary income margin 28.0% 28.2% 27.3% EPS 164.79 194.54 208.83 ROE 17.9% 18.0% 18.5% Planned capital expenditure 3.88 billion 4.78 billion 8.50 billion Opening plan Key management index targets for FY03/18 (final year of the mid-term plan) Net sales 23.8 billion (+ 1.8 billion to the initial plan) Ordinary income 6.5 billion (+ 800 million to the initial plan) Ordinary income margin 27.3% (+1.4pt to the initial plan) EPS 208 (+ 41 to the initial plan) ROE 18.5% (+0.5pt to the initial plan) New sports clubs 2 clubs 5 clubs 10 clubs New rental apartments (Real estate business) New hotels 2 hotels 3 hotels 5 hotels 35 rooms (1 apartment) 60 rooms (3 apartments) 262 rooms (7 apartments) 19
Holiday Sports Clubs 300,000 250,000 200,000 150,000 100,000 Members 8 Clubs FY03/18 Plan Clubs: 81 Members: 220 thousand 12 18 26 83,762 33 96,127 GOGO Plan Number of Clubs & Members 35 37 100,880 105,190 42 114,755 47 127,148 53 140,421 60 159,521 64 171,942 66 180,000 +2 clubs 71 200,000 +5 clubs 81 220,000 +10 clubs 90 70 50 30 10 50,000 40,483 59,827 GOGO Plan -10 26,691 0 FY03/04 FY03/05 FY03/06 FY03/07 FY03/08 FY03/09 FY03/10 FY03/11 FY03/12 FY03/13 FY03/14 FY03/15 FY03/16 FY03/17 FY03/18 20-30
Growth Strategies Continued rapid growth in the facility service industry 5 Strategies for Holiday Sports Clubs 1. Market 2. Development 3. New products 4. Sales 5. Service Market survey targeting 100,000-150,000 people Open stores in a location where business model can be adapted Develop a new business model Respond to changes of times Introduce new programs, new systems & new products Continue to release hot sellers by evolving products Flyers, web, word-of-mouth Speedy member registration and contracts HR training, service etiquette, maintenance of facility & environment Offer " safety, peace-of-mind & comfort " with gratitude 21
71 clubs operated nationwide (as of the end of May 31, 2017) Kyushu: 8 clubs Yahatanishi (Fukuoka) Fukuoka Umebayashi ( ) Onojo ( ) Omuta ( ) Koga ( ) plan Kokura Minami ( ) plan Oita (Oita) Saga (Saga) Kumamoto Kita (Kumamoto) Kumamoto Nagamine ( ) Miyazaki (Miyazaki) plan Opening 100 clubs is a checkpoint Potential demand Kanto: over 100 locations Other: over 100 locations Kyushu 8 clubs Chugoku: 3 clubs Fukuyama (Hiroshima) Yonago (Tottori) Tottori ( ) plan Chugoku 3 clubs Izumo (Shimane) Shikoku 1 club Shiminoseki (Yamaguchi) plan Shikoku: 1 club Matsuyama (Ehime) Kochi (Kochi) plan Kinki 10 clubs Kinki: 10 clubs Suzuka (Mie) Yokkaichi ( ) Kusatsu (Shiga) Nara (Nara) Yamatotakada ( ) plan Izumiotsu (Osaka) Higashi Osaka ( ) Neyagawa ( ) Osaka Hirano ( ) Himeji (Hyogo) Mukonoso ( ) Wakayama (Wakayama) plan Market Strategy Chubu 26 clubs Chubu: 26 clubs Mikawa-anjo(Aichi) Kofu (Yamanashi) Kariya Chiryu ( ) Matsumoto (Nagano) Ichinomiya ( ) Nagano ( ) Toyohashi ( ) Ueda ( ) Toyota ( ) Numazu (Shizuoka) Nagoya Narumi ( ) Hamamatsu ( ) Nisshin Nagakute ( ) Shimizu ( ) Toyokawa ( ) Fuji ( ) Owariasahi ( ) plan Fujinomiya ( ) Okazaki ( ) plan Yaizu ( )plan Ogaki (Gifu) 22 Kanto 15 clubs Tohoku 3 clubs Gifu ( ) plan Hokkaido 5 clubs : Clubs without pool facilities Operating clubs shown on map Niigata Benten (Niigata) Niigata Akamichi ( ) Nagaoka ( ) Toyama (Toyama) Takaoka ( ) Kanazawa (Ishikawa) Fukui (Fukui) Hokkaido: 5 clubs Hakodate Asahikawa Sapporo Kiyota Sapporo Kita 24 Jo Sapporo Hassamu plan Higashisapporo plan Tomakomai Tohoku: 3 clubs Hirosaki (Aomori) Akita (Akita) Morioka (Iwate) Kanto: 15 clubs Utsunomiya (Tochigi) Isesaki (Gunma) Takasaki ( ) Maebashi ( ) Ota ( ) Funabashinichidai-mae (Chiba) Ichihara Goi ( ) Kisarazu( )plan Chiba-chuo( )plan Zamarinkan (Kanagawa) Ebina Kashiwadai ( ) Sagamihara ( ) Kodaira (Tokyo) Nishiichinoe (Edogawa) plan Okegawa (Saitama) Fukaya ( ) Soka ( )
Planned Club Openings Holiday Sports Club Sports Clubs Opening Plan (announced) FY03/18 Holiday Sports Club Miyazaki (Miyazaki-shi, Miyazaki) Holiday Sports Club Chiba Chuo (Chiba-shi, Chiba) Holiday Sports Club Yaizu (Yaizu-shi, Shizuoka) Holiday Sports Club Kisarazu (Chiba-shi, Chiba) Holiday Sports Club Yamatotakada (Yamatotakada-shi, Nara) Holiday Sports Club Wakayama (Wakayama-shi, Wakayama) Holiday Sports Club Gifu (Gifu-shi, Gifu) Holiday Sports Club Koga (Koga-shi, Fukuoka) Holiday Sports Club Sapporo Hassamu (Sapporo-shi, Hokkaido) Holiday Sports Club Okazaki (Okazaki-shi, Aichi) 2017 Jun Jun Jul Aug Sep Oct 2018 Jun Jun Sep Mar FY03/19 Holiday Sports Club Higashi-Sapporo (Higashi-Sapporo-shi, Hokkaido) Holiday Sports Club Kochi (Kochi-shi, Kochi) Holiday Sports Club Kokura Minami (Kita-Kyushu-shi, Fukuoka) Holiday Sports Club Shimonoseki (Shimonoseki-shi, Yamaguchi) Apr Jun Sep Oct Holiday Sports Club Tottori (Tottori-shi, Tottori) 23
Development Strategy - Business Model Investment amount (building ownership) Net sales (thousand yen) General Eco 2500 Model (with Hot Studio) 450 million yen 216,000 100% Ordinary income 75,600 35% Expenses 140,400 65% 女性限定 プログラム Hot Studio Location Site area Total floor space Parking Assumed No. of members Close to town center & station Around 1,800 tsubo (around 5,950m2) Around 550 tsubo (around 1819m2) 220 cars 2,500 Avg. fee 7,200 Market population 100,000 within 3km 24
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ターゲット ABS プレス New Program Strategy ビューティークイーン バッシルエット ホリデイスポーツクラブは YOSAKOI ソーラン祭り 公認企業です 27
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スタイルスタジオ 29
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Sales Strategy Speedy member registration via Flyer Web Member introduction 31
50% of members are joined via website 32
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HR Training Facilities - Holiday College Training examples Targeted at all staff Full-time, part-time, temporary & external instructors HR training Customer Satisfaction! New product development No. 1 Choice! Maintenance training No. 1 in Safety! Instructor practical training Operational management training Customer service training Develop new programs Machine maintenance Equipment maintenance Building maintenance 34
3,000 2,500 2,000 1,500 1,000 12 845 1,286 A City Rental Apartments Rooms Buildings GOGO Plan 21 30 37 No. of buildings and rooms 42 1,693 49 48 48 2,000 1,988 FY03/18 Plan Rooms: 2,600 50 50 50 51 2,070 2,070 2,105 54 2,165 +3 buildings 61 2,427 +7 buildings 70 60 50 40 30 20 10 0 500 360 494 +1 building -10 GOGO Plan -20 0-30 35
A City Market Strategy Priority development area Nagoya city Existing apartments 54 buildings, 2,165 rooms (as of May 31, 2017) To be completed in 2017 262 rooms 36
Development Strategy, New Product Strategy Enhanced safety and security measures -entrance with automatic door lock -security cameras -video intercom Develop rental apartments for single people from young to elder generation Mainly develop studio apartments Rental apartment of A City 37 Room layout: one room+ kitchen 26m2
AB Hotel Co., Ltd. Foundation for growth 1. Nationwide development of City Hotels specializing in guest accommodations 2. Nationwide operation with 100 hotels 3. Priorities on good sleep, good food and overall comfort 4. Above 80% of occupancy rate 5. 30% of Ordinary income margin (store profit: 35%) 38
AB Hotel 4,000 3,500 3,000 2,500 Rooms Hotels GOGO Plan No. of hotels and rooms FY03/18 Plan Hotels: 19 Rooms: 2,500 5 5 5 5 5 5 7 9 11 14 19 2,474 30 20 10 1 1 2 2 2,000 1,811 0 1,500 1,000 500 133 133 262 262 Established AB Hotel on October 1, 2014 671 641 634 637 1,148 1,421 +2 hotels +3 hotels GOGO Plan +5 hotels -10-20 0-30 39
Kyoto Osaka Ishikawa Fukui Shiga Toyama Tochigi Gunma NAGANO Saitama Gifu Tokyo Yamanashi Chiba Kanagawa Aichi Aichi Prefecture x10 Shizuoka AB Hotel Mikawa-anjo(Main) Market Strategy 15 hotels operated in Japan Ibaraki (as of May 31, 2016) The 15th hotel AB Hotel Gifu opened on April 7 5-minute walk from JR Gifu Station Nara Mie Shiga Prefecture AB Hotel Omi Hachiman FY18 Nara Prefecture AB Hotel Nara Kyoto Prefecture AB Hotel Kyoto Shijo Omiya FY17 Osaka Prefecture AB Hotel Osaka Sakaisuji-Hommachi FY19 Saitama Prefecture AB Hotel Fukaya Gunma Prefecture AB Hotel Isesaki Ishikawa Prefecture AB Hotel Kanazawa Yamaguchi Prefecture AB Hotel Ube-Shinkawa FY18 AB Hotel Mikawa-anjo(New) AB Hotel Mikawa-anjo(South) AB Hotel Toyota Motomachi AB Hotel Okazaki AB Hotel Nagoya Sakae AB Hotel Komaki AB Hotel Ichinomiya AB Hotel Toyohashi AB Hotel Mikawa Toyota AB Hotel Tokai Otagawa FY18 AB Hotel Tahara FY18 Shizuoka Prefecture AB Hotel Fuji FY17 AB Hotel Iwata FY17 Gifu Prefecture AB Hotel Kakamigahara FY17 AB Hotel Gifu 40
Planned Hotel Openings AB Hotel Hotel Opening Plan (announced) FY03/18 AB Hotel Gifu (Gifu-shi, Gifu) 2017 Apr Opened AB Hotel Kakamigahara (Kakamigahara-shi, Gifu) AB Hotel Iwata (Iwata-shi, Shizuoka) AB Hotel Fuji (Fuji-shi, Shizuoka) AB Hotel Kyoto Shijo Horikawa (Kyoto-shi, Kyoto) Jun Jun 2018 Jan Mar FY03/19 AB Hotel Omihachiman (Omihachiman-shi,Shiga) AB Hotel Tokai Otagawa (Tokai-shi, Shizuoka) AB Hotel Ube-Shinkawa (Ube-shi, Yamaguchi) AB Hotel Tahara (Tahara-shi, Aichi) Jun Aug Sep Nov FY03/20 AB Hotel Osaka Sakaisuji-Hommachi (Osaka-shi, Oasaka) 2019 Jun 41
Development Strategies - Business Model AB Hotels targeting 80% occupancy rate & 35% profit by focusing on customer satisfaction Creating hotels that can satisfy the demand of guests Investment amount (building ownership) Business model 130 540 million Net sales (thousand yen) 227,760 100% Ordinary income 79,716 35% Expenses 148,044 65% Location Site area (Leased) Size Assumption Commercial area, in the vicinity of a station Around 300 tsubo (around 992m2) 130 guest rooms 80% occupancy rate Avg. price 6,000+ Target Business people, families, women 42
New product strategy Amenity&Bright Comfortable rooms perfect for business people and families Free breakfast-japanese and European buffet Free Wi-Fi available in entire building A duvet style bed Deluxe twin with family use Two types of pillows Duvet style bed Single room Japanese and European breakfast Large public bath Individual air-conditioning 43
Tosho Group will continue to grow under the theme of Wellness Life 44
Precaution regarding forward-looking statements This presentation contains plans, outlooks, strategies and other information associated with expectations for future results of operations. This information is based on the judgments of management in accordance with information that is currently available. Actual results of operations may differ from these forward-looking statements for a number of reasons. ******************************* For more information 1-16-5 Mikawaanjo-cho, Anjo-shi, Aichi Prefecture, 446-0056 Investor Relations Department, Tosho Co., Ltd. (Kariyazono) TEL 0566-79-3111 FAX 0566-79-3110 Mail: y-kari@to-sho.net Website: http://www.to-sho.net/ Thank you for your interest in Tosho. Everyone at our organization has a strong commitment to achieving our goals. 45