performance briefing · aoki holdings inc. fashion anniversaire and bridal karaoke café complex...

Performance Briefing for the Fiscal Year Ended March 31, 2016

May 19, 2016

AOKI Holdings Inc.

http://www.kfit.jp/

http://www.anniversaire.co.jp/

http://www.orihica.com/

http://www.aoki-style.com/

AOKI Holdings Inc. 2

AOKI Group's Business Portfolio Management

FY3/16 Review of Operations

Consolidated Profit and Loss

Sales and Operating Profit by Business Segment

Major Changes in Consolidated Balance Sheet

Consolidated Statement of Cash Flows

Number of Stores Opened/Closed

FY3/17 Earnings Forecast

Consolidated Forecast

Forecast for Sales and Operating Profit by Business Segment

Outlook for Store Openings/Closings

First Half of FY3/17 Consolidated Forecast

Fashion Business Performance and Forecast


FY3/17 Initiatives

AOKI: FY3/17 Initiatives

ORIHICA: FY3/17 Initiatives

FY3/17 Forecast

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Anniversaire and Bridal Business Performance and Forecast

Industry Trends

Features and Position within Industry


FY3/17 Forecast

Entertainment Business Performance and Forecast

Supplementary Documents

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Facility Types: Karaoke rooms

FY3/16 Review of Operations: Karaoke rooms

Conditions at Existing Stores : Karaoke rooms

FY3/17 Forecast: Karaoke rooms

Facility Types: Café complex

FY3/16 Review of Operations: Café complex

Conditions at Existing Stores: Café complex

FY3/17 Forecast: Café complex

Aggressive Store Development

FY3/16 Consolidated Business Results and Major Expenses


FY3/17 Consolidated Forecast and Major Expenses

Reference: FY3/16 Fashion Business Performance

Reference: FY3/17 Fashion Business Outlook

Reference: FY3/16 Entertainment Business Performance

Reference: FY3/17 Entertainment Business Outlook

Business Portfolio Comprised of Three Segments

FY3/16 Financial Highlights

Goals for FY3/17


Target Benchmarks

Shareholder Returns: Basic Policy

Shareholder Returns: Dividends and Dividend Forecast

Shareholder Returns: Repurchase of Treasury Stocks

Contents

AOKI Group’s Business Portfolio Management

AOKI Holdings Inc.

Karaoke party space, modeled after the luxury resort area COTE D'AZUR in south France, that provides a refreshing and relaxing atmosphere filled with song and conversation. It offers pleasurable moments for people's everyday lives (photo on right: VIP room).

4 4

AOKI

ORIHICA

Completed in 1998 based on the concept of "anniversary.” Located in the center of the Omotesando district and has a chapel, space for parties, and a Paris-style café. Well-known for hosting the weddings of the famous, has become one of the top brands for weddings.

ANNIVERSAIRE OMOTESANDO

Fashion Business

Business Portfolio Comprised of Three Segments

Anniversaire and Bridal Business Entertainment Business

"Pleasure of dressing well" The AOKI Group's founding business. Suits are the key item in this business, but we also provide casual wear and women's wear to enrich the fashion lives of our customers both at work and outside of work.

Choreographing special events where customers are in the spotlight Choreographs weddings –and "guesthouse" weddings in particular– to ensure customers shine on the most important day of their lives.

Offering entertainment and relaxation Provides customers opportunities for rest, relaxation and entertainment in a variety of welcoming environments. Café complex "KAIKATSU CLUB" boasts top sales in industry.

Karaoke Facility: COTE D'AZUR Chain of primarily roadside stores, although we have recently begun to focus on opening stores in central Tokyo as well (photo: AOKI GINZA Store). Features carefully planned products and stylists with highly-specialized knowledge that offer total coordination to customers.

Chain of stores primarily in shopping centers. Offer new "business" and "business-to-casual" styles targeting men and women in their 20s to 40s.

ANNIVERSAIRE

Guesthouse wedding facility with a European style chapel and garden filled with flowers and greenery. The Group operates 14 such facilities nationwide. These facilities are our answer to customers who want a unique wedding that reflects their individuality. In February 2014, flagship MINATO MIRAI YOKOHAMA was opened.

Café Complex: KAIKATSU CLUB

Café complex, modeled after the island of Bali, that provides a relaxing and rejuvenating environment for those who want to quietly rest or those who just want a change of pace. KAIKATSU CLUB in Kita-yamata, Yokohama, offers a fitness club, karaoke space, and simulated golf range.


Sales Operating Profit

Fashion Anniversaire and Bridal Karaoke Café Complex

Sales increased due to new store openings and contribution from Café Complex Operations Business. Profits declined because of a decrease in existing-store sales in the Fashion Business,

and decline in the number of married couples in the ANNIVERSAIRE and Bridal Business

112.6 116.1 114.0

30.9 30.3 29.3

17.5 18.2 18.2

22.7 26.4 27.0

183.8 191.0 188.5

0

20

40

60

80

100

120

140

160

180

200

FY3/15 FY3/16 Forecast FY3/16

10.7 11.8 9.8

4.2

4.1

3.5

1.7 1.5

1.4

1.8 2.1

2.2

0

2

4

6

8

10

12

14

16

18

20

FY3/15 FY3/16 Forecast FY3/16

17.7

20.0 19.0

FY3/16 Financial Highlights

(Billions of yen) (Billions of yen)

AOKI Holdings Inc.

Goals for FY3/17

6

FY3/16 Accomplishments and Issues

-Sales continued to increase due to new store openings in all business segments

-Sustained growth in the Café Complex Operations Business

-Existing-store sales decreased in the Fashion Business and Karaoke Facility Operations Business

-Declining number of couples married in the ANNIVERSAIRE and Bridal Business due mainly to market conditions

Business Segment and Overall Priorities

All operations: Invigorate existing stores

Effects of ongoing initiatives on the FY3/17 forecast -Forecast a small sales increase due to new stores but lower earnings in all businesses due to higher expenses

caused by the actions outlined above -Earnings down in FY3/17 but expect actions during the year to produce higher earnings and overall growth starting

in FY3/18

Fashion Business Use the biggest-ever renovation budget to heighten internal growth power for a rebound in existing-store performance

Anniversaire and Bridal Business Use effective advertising and marketing expenditures, renovate facilities and use other actions to attract more customers and orders

Karaoke Facility Operations Business Continue adding about 10 locations each year while working on a recovery of existing-location performance

Café Complex Operations Business Open more cafés than ever before and make existing locations even more appealing

AOKI Holdings Inc.

Fashion Anniversaire and Bridal Karaoke Café Complex

9.8 8.9

3.5 2.8

1.4

1.4

2.2

2.2

0

2

4

6

8

10

12

14

16

18

20

FY3/16 FY3/17 Forecast

(Billions of yen)

7

114.0 117.0

29.3 28.2

18.2 19.2

27.0 30.2

188.5 194.6

0

50

100

150

200


(Billions of yen)

Sales Operating Profit

Forecast higher sales as new stores contribute to sales but lower earnings in all business segments caused by investments for increasing the power to grow organically

17.7

15.8



Aiming for the medium-term targets by establishing a base for consistent

growth of the entire AOKI Group

Operating Margin ROE EPS

(%)

(%)

Benchmark Level

Operating margin 9.4%

ROE 6.9%

EPS ¥107.55

Benchmark Level


ROE 10.0%

EPS ¥180.00

(Yen)

Benchmark Level


ROE 6.2%

EPS ¥98.14

Target Benchmarks

FY3/16 Results Medium-term Target

(established in May 2014) FY3/17 Forecast

ROE = (Profit attributable to owners of parent / Shareholders’ equity) x 100 (%)

9.4 8.1

12.0

0

2

4

6

8

10

12

14

FY3/16 FY3/17 Plan Medium-termtarget

107.55 98.14

180.00

0

50

100

150

200


6.9 6.2

10.0

0

2

4

6

8

10



Shareholder Returns: Basic Policy

Item Goal

Basic stance Position earnings distributions as one management priority and determine distributions while reflecting requirements involving future business operations, financial soundness and other factors

Dividend policy Maintain a dividend payout ratio of 30% or more while paying a

dividend at least as high as in the previous year

Total return ratio Goal is a total return of 50% or more in the absence of special

requirements for funds

The AOKI Group has revised the basic policy for distributing earnings to shareholders


Dividend for FY3/16

Increased ¥4 to ¥40 per share

(¥20 interim and ¥20 year-end dividends)

Shareholder Returns: Dividends and Dividend Forecast

7.50 7.50 10.00 15.00 18.00 20.00 21.00 7.50 10.00

12.50

18.00 18.00

20.00 22.00

FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 Forecast

2Q-end Year-end

¥15.0 ¥17.5

¥22.5

¥33.0 ¥36.0

¥40.0 ¥43.0

Dividend forecast for FY3/17

Based on the revised basic policy and need

for funds, planning a ¥3 increase to ¥43 (¥21 interim and ¥22 year-end dividends)

*Dividends up to and including the FY3/14 interim dividend have been adjusted for the 2-for-1 stock split on January 1, 2014.


We plan to expeditiously acquire treasury stock, taking into account such factors as investment plans, the status of funding and the share price.

Shareholder Returns: Repurchase of Treasury Stocks

We plan to repurchase 2.5 million shares of treasury stocks (February 15 press release)

FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17

(Forecast)

Value of shares

acquired

Number of shares acquired

(Thousands)

3.9

(3,820)

- - 1.2

(1,000)

2.0

(930)

- - 2.3

(1,520)

3.1

(2,180)

Capital Expenditures 10.4 11.2 12.4 9.7 16.9 19.7 16.1 9.5 12.1

(Billions of yen)

Acquisition period: From February 16, 2016 to January 31, 2017 Total number of shares to be acquired: Up to 2.5 million shares

(Number of shares acquired as of April 30: 500,000 shares)

Total value of shares to be acquired: No more than ¥3.5 billion (Value of shares acquired as of April 30: ¥0.6 billion)


Account/Period FY3/15 FY3/16 Change YoY % Major Components

Sales 183,805 188,594 4,788 102.6 Contributions from new stores Increase in existing-store sales at Café Complex Operations Business

Gross profit Gross profit margin

86,785 47.2%

87,170 46.2%

384 -1.0pt

100.4 Decline in Fashion Business by 0.4pt Decline in Bridal Business by 0.4pt

Selling, general and administrative expenses 67,757 69,380 1,622 102.4

Increase in new store-opening expenses, personal and advertising expenses in each business segment

Operating profit Operating margin

19,028 10.4%

17,789 9.4%

-1,238 -1.0pt

93.5 Lower sales in the Bridal Business Decline in gross profit margin

Non-operating profit 1,173 1,191 17 101.5

Non-operating expenses

1,287 1,353 65 105.1

Ordinary income 18,914 17,627 -1,286 93.2

Extraordinary gains - 68 68 -

Extraordinary losses 1,942 2,356 414 121.3 Litigation settlement

Profit attributable to owners of parent

10,185 9,711 -473 95.3

Consolidated Profit and Loss

(Millions of yen)

Depreciation: ¥7,677 million (including lease assets of ¥1,670 million) YoY existing-store sales: -0.8% for Fashion, -0.8% for Karaoke, +5.9% for Café Complex


Business Segment FY3/15 FY3/16 Change YoY % Major Components

183,805 188,594 4,788 102.6

Fashion 112,675 114,015 1,340 101.2 Contributions from new stores

Anniversaire and Bridal 30,917 29,321 -1,595 94.8 Decline in the number of couples married

Entertainment (Total) 40,237 45,294 5,056 112.6

(of which) Karaoke 17,523 18,240 717 104.1 Contributions from new facilities

(of which) Café Complex 22,714 27,054 4,339 119.1 Contributions from new facilities and higher sales at existing facilities

Business Segment FY3/15 FY3/16 Change YoY % Major Components

19,028 17,789 -1,238 93.5

Fashion 10,773 9,818 -954 91.1 Decline in gross profit margin and lower sales at existing-stores

Anniversaire and Bridal 4,205 3,591 -613 85.4 Lower sales due to decline in the number of couples married

Entertainment (Total) 3,518 3,780 262 107.4

(of which) Karaoke 1,712 1,489 -222 87.0 Increase in renovation expenses and lower sales at existing facilities

(of which) Café Complex 1,806 2,291 484 126.8 Higher sales at existing facilities

Inter-segment transactions 531 598 67 112.7

Sales and Operating Profit by Business Segment

Sales by business segment

Operating profit by business segment

Total

Total

(Millions of yen)

(Millions of yen)


Account/Period FY3/15 FY3/16 Change Major Components

Current assets 73,769 73,899 129

Cash in hand and in banks 29,226 27,560 -1,665 Decreased due to capital investments, etc.

Inventories 26,476 27,835 1,358 Increased due to openings of new stores, etc.

Fixed assets 156,396 156,464 67

Tangible fixed assets 108,308 107,846 -462 Decreased due to depreciation, etc.

Intangible fixed assets 6,550 6,680 130

Investments and other assets 41,538 41,936 398

Total assets 230,166 230,363 196

Current liabilities 43,397 38,248 -5,148 Decreases in accrued consumption taxes and accounts payable-other, etc.

Accounts payable-trade 19,867 18,021 -1,845 Decreased due to a decrease in procurement

Current portion of long-term debt 4,450 4,050 -400

Long-term liabilities 47,093 49,187 2,094 Increase in retirement benefit obligations, etc.

Long-term debt 35,325 36,275 950 Fund raising for capital investments

Total liabilities 90,491 87,436 -3,054

Common stock 23,282 23,282 -

Capital surplus 28,757 27,833 -923 Decreased due to retirement of treasury stock

Retained earnings 86,658 92,929 6,270 Profit and dividend from surplus

Treasury stock -45 -1,436 -1,391 Purchase and retirement of treasury stock

Total accumulated other comprehensive income 1,021 229 -791

Stock acquisition rights - 87 87

Total net assets 139,675 142,926 3,251

Total liabilities and net assets 230,166 230,363 196

Major Changes in Consolidated Balance Sheet (Millions of yen)


Account/Period FY3/15 FY3/16 Change Major Components

Cash flows from operating activities

18,685 12,610 -6,075 Decrease in profit before income taxes Increase in consumption taxes paid

Cash flows from investing activities

-16,324 -6,969 9,355 Decrease in acquisition of tangible fixed assets

Cash flows from financing activities

4,245 -7,306 -11,551 Decrease in long-term debt: ¥12.5 billion

Change in cash and cash equivalents

6,606 -1,665 -8,271

Beginning balance 22,619 29,226 6,606

Ending balance 29,226 27,560 -1,665

Consolidated Statement of Cash Flows

(Millions of yen)


Business Segment Stores/Facilities

FY3/15 FY3/16

Number of Stores

Opened Closed Number of

Stores Opened Closed

Fashion AOKI 557 39 3 567 12 2

ORIHICA 141 11 1 144 12 9

Anniversaire and Bridal ANNIVERSAIRE 14 - - 14 - -

Karaoke COTE D'AZUR 169 10 - 183 15*1 1

Café Complex KAIKATSU CLUB, other*2 260 32 - 295 36 1

Total 1,141 92 4 1,203 75 13

Capital Expenditures (Millions of yen) 16,068 9,492

Capital Expenditures FY3/15 FY3/16

Fashion 5,211 2,117

Anniversaire and Bridal 872 968

Karaoke 1,752 1,968

Café Complex 3,414 4,290

Consolidated Total 16,068 9,492

Number of Stores Opened/Closed

(Number of stores)

*1 Includes acquisition of 7 stores *2 Includes KAIKATSU FITNESS CLUB

(Millions of yen)


Account/Period FY3/16 FY3/17 (Forecast) Change YoY % Major Components

Sales 188,594 194,600 6,005 103.2 Contributions from new stores and increase in existing-store sales


87,170 46.2%

88,170 45.3%

999 -0.9pt

101.1 Decrease in Fashion Business by 0.5pt


Increase in new store-opening expenses in each business segment, and increase in renovation expenses in Fashion Business


17,789 9.4%

15,800 8.1%

-1,989 -1.3pt

88.8 Decrease in gross profit margin, and increase in SG&A expenses

Non-operating profit 1,191 950 -241 79.7

Non-operating expenses 1,353 1,050 -303 77.6

Ordinary income 17,627 15,700 -1,927 89.1

Extraordinary gains 68 - -68 -

Extraordinary losses 2,356 1,700 -656 72.1 Mainly impairment losses

Profit attributable to owners of parent 9,711 8,800 -911 90.6

Consolidated Forecast

(Millions of yen)

Assumptions Depreciation: ¥8,200 million (including lease assets of ¥1,605 million) YoY existing-store sales:

Fashion: +2.8% for 1H, +1.6% for 2H, +2.0% for full year Karaoke: -1.7% for 1H, -2.4% for 2H, -2.0% for full year Café Complex: +1.6% for 1H, +0.4% for 2H, +1.0% for full year


Business Segment FY3/16 FY3/17 (Forecast) Change YoY %

Total 17,789 15,800 -1,989 88.8

Fashion 9,818 8,900 -918 90.6

Anniversaire and Bridal 3,591 2,800 -791 78.0

Entertainment (Total) 3,780 3,600 -180 95.2

(of which) Karaoke 1,489 1,400 -89 94.0

(of which) Café Complex 2,291 2,200 -91 96.0

Inter-segment Transactions 598 500 -98 83.6

Business Segment FY3/16 FY3/17 (Forecast) Change YoY %

Total 188,594 194,600 6,005 103.2

Fashion 114,015 117,000 2,984 102.6

Anniversaire and Bridal 29,321 28,250 -1,071 96.3

Entertainment (Total) 45,294 49,400 4,105 109.1

(of which) Karaoke 18,240 19,200 959 105.3

(of which) Café Complex 27,054 30,200 3,145 111.6

Forecast for Sales and Operating Profit by Business Segment

Sales by business segment (Millions of yen)

Operating profit by business segment (Millions of yen)

AOKI Holdings Inc.

Business Segment Stores/Facilities

FY3/16 FY3/17 (Forecast)

Number of Stores

Opened Closed Number of

Stores To be

Opened To be

Closed

Fashion AOKI 567 12 2 570 8 5

ORIHICA 144 12 9 147 5 2

Anniversaire and Bridal ANNIVERSAIRE 14 - - 14 - -

Karaoke COTE D'AZUR 183 15*1 1 191 9 1

Café Complex KAIKATSU CLUB, other*2 295 36 1 338 44 1

Total 1,203 75 13 1,260 66 9

Capital Expenditures (Millions of yen) 9,492 12,100

21

※ 快活フィットネスクラブ含む Capital Expenditures FY3/16 FY3/17 (Forecast)

Fashion 2,117 4,670

Anniversaire and Bridal 968 650

Karaoke 1,968 1,624

Café Complex 4,290 5,001

Consolidated Total 9,492 12,100

Outlook for Store Openings/Closings

(Number of stores)

(Millions of yen) *1 Includes acquisition of 7 stores *2 Includes KAIKATSU FITNESS CLUB


Account/Period 1H FY3/16 1H FY3/17 (forecast)

Change YoY % Major Components

Sales 81,704 82,680 975 101.2 Contributions from new stores and increase in existing-store sales


36,187 44.3%

35,290 42.7%

-897 -1.6pt

97.5 Decrease in Fashion Business by 0.9pt


Increase in renovation expenses in Fashion Business


3,681 4.5%

400 0.5%

-3,281 -4.0pt

10.9

Decrease in gross profit margin, increase in SG&A expenses, and lower sales due to decline in the number of couples married in Bridal Business

Non-operating profit 620 520 -100 83.9

Non-operating expenses 681 570 -111 83.6

Ordinary income 3,620 350 -3,270 9.7

Extraordinary losses 347 100 -247 28.8

Profit attributable to owners of parent 2,157 100 -2,057 4.6


(Millions of yen)

YoY existing-store sales for 1H: Fashion: +2.8%, Karaoke: -1.7%, Café Complex: +1.6% No. of stores to be opened in 1H: Fashion: 4 stores (-10 vs. previous year), Karaoke: 5 facilities (-1 vs. previous year), Café Complex: 24 facilities (+3 vs. previous year)

Assumptions

Fashion Business

FY3/16 Performance and FY3/17 Forecast

AOKI Holdings Inc.

10,773

9,818

0

2,000

4,000

6,000

8,000

10,000

12,000

0

20,000

40,000

60,000

80,000

100,000

120,000

24 24

Operating profit down 8.9% YoY

Lower existing-store sales: down 0.8%

Gross profit margin: down 0.4 point

Abnormally warm winter impacted sales of suits, formal wear and coats

Higher procurement price

SG&A expenses: +2.2% YoY

Increase in the number of stores; increases in land rents, personnel expenses and depreciation related to new store openings

Reduced and optimized expenses, mainly for supplies, advertising and utilities

FY3/15 FY3/16

(Millions of yen)

FY3/16

YoY % % to sales

Sales 114,015 101.2 100.0

Gross profit 69,734 100.5 61.2

SG&A expenses 59,915 102.2 52.6

Operating profit 9,818 91.1 8.6

FY3/15 FY3/16

10,733 114,015 112,675

Sales up 1.2% YoY

New store openings: 24

AOKI: 12

ORIHICA: 12

Increase in existing-store sales at ORIHICA

9.6%

8.6 %

Fashion Business: FY3/16 Review of Operations Profits down with decrease in existing-store sales and lower gross profit margin, although sales increased due to contributions from new store openings

(Millions of yen)

(Millions of yen)

Sales Operating profit/ Operating margin

AOKI Holdings Inc.

△ 20

△ 15

△ 10

△ 5

0

5

10

15

20

25

1月 2月 3月 4月 5月 6月 7月 8月 9月 10月 11月 12月 1月 2月 3月 4月

売上高客数客単価

2Q Sales: +0.7% Number of customers: +1.2% Sales per customer: -0.5%

3Q Sales: -3.2% Number of customers: -8.0% Sales per customer: +5.1%

4Q Sales: +0.7% Number of customers: -0.6% Sales per customer: +1.3%

25

Apr

2015

May

2015

Jun

2015

Jul

2015

Aug

2015

Sep

2015

Oct

2015

Nov

2015

Dec

2015

Jan

2016

Feb

2016

Mar

2016

Full

year

Apr

2016

Existing-store sales (%) +10.4 +7.3 -16.9 +0.2 +3.0 -0.8 +2.3 -11.5 +2.2 +2.1 +4.0 -2.0 -0.8 +7.6

No. of customers (%) -9.0 -3.5 -16.4 +0.4 +4.3 -1.0 -1.9 -14.3 -5.9 -2.5 +1.5 -0.3 -5.3 +11.4

Sales per customer (%) +21.3 +11.1 -0.6 -0.2 -1.2 +0.2 +4.3 +3.2 +8.7 +4.7 +2.4 -1.7 +4.7 -3.4

Deviation from average temperature (℃) (Tokyo)

+0.6 +2.9 +0.7 +1.2 +0.3 -0.2 +0.9 +1.8 +1.7 +0.9 +1.5 +1.4 - +1.5

FY3/16 YoY Change in Monthly Performance

(%)

FY3/15 FY3/16

Existing-store sales down 0.8%

1Q Sales: -1.0% Number of customers: -9.9% Sales per customer: +9.9%

Fashion Business—FY3/16 Review of Operations: Existing Stores Existing-store sales down 0.8% as number of customers declined, although sales per customer increased due to the higher average sales per item

Sales Customers Sales per customer

- - - -

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

AOKI Holdings Inc.

Initiatives Results

TV commercials for “Truly Washable Suits”

Smaller number of basic styles and colors, mainly for Cool Biz apparel

Ideas for casual fashions using single apparel items

Larger lineup of suits, formal wear and office casual wear for career women

Commercials sparked strong sales of these suits

Shortage of apparel variations for bulk bought

Declining prices for coordinated light clothing

Strong sales of women’s apparel

More promotions focusing on merchandise rather than prices

More efficient promotions at the launch and during the real-demand phase

Reduced sales promotions but sales promotions of competitors caused the number of customers to decline

Store environments linked to merchandise promotions

Improved store designs to match changing market, customer needs and preferences

Lower contract success rate due to insufficient events; decline in bulk purchases

Renovated stores posted strong sales

Established the Corporate Sales Department About 200 alliance partner companies; corporate sales up about 40% YoY

Training women’s stylists to serve the increasing number of female customers

Currently have about 70 women’s stylists, about 50 more than in FY3/15

Used TV commercials for the first time

Opened the industry’s first Pop Up Shop

Started selling THE 3rd SUITS

Strong sales due to improvement in ORIHICA brand recognition

26

Fashion Business growth initiatives and results

Merchandise

Sales

Promotions

Environment

Human resources

ORIHICA

Fashion Business: FY3/16 Review of Operations

AOKI Holdings Inc.

Fashion Business: : FY3/17 Initiatives

Overweight (BMI of 30+) Population Ratio

27

Changes in the business climate

Issues for the fashion

business

Changes in markets and consumers

Polarization of demand for suits (prices, functions, brands)

More working women and female managers

Diversification of business styles for millennials (age 20 to 35)

Increasing pct. of customers who need large sizes

Growing need for casual apparel for 50 to 69 age segment Increasing number of older customers

How to target the large baby boom junior segment

Successful store environments in today’s Internet age

More business styles means more jacket styling and business-to-casual apparel needs

Sales areas that reflect the composition of sales (product categories)

Japan’s Population

Source: National Institute of Population and Social Security Research

90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 (Age)

Baby-boom generation

(advancing to 70s)

Baby boom jr. generation

(advancing to 50s)

Millennial decline (age 18-35)

2010 2015 2020

0

5

10

15

20

25 (Millions of people)

Women 3.5

Women [値]

Men [値]

Men [値]

2.5

3.0

3.5

4.0

4.5

03年 04年 05年 06年 07年 08年 09年 10年 11年

Source: Ministry of Health, Labour and Welfare “National Health and Nutrition Survey”

(%)

2003 2004 2005 2006 2007 2008 2009 2010 2011

AOKI Holdings Inc.

Reinvigorate existing stores to match changes in the market: 1

28

Continue to create highly functional, value-added apparel 1

No-iron shirts

Office casual wear Formal wear for women

Larger lineup of Truly Washable Suits, a category that meets a significant customer need

Innovative high-performance shirt requiring no ironing

Strengthened joint product development activities with Shinshu University

Larger selection and more innovative ideas for royal brand apparel (A.V.S., JUNKO SHIMADA, MAJI)

*Simply wash and dry – Absolutely no ironing is needed Level 4.0 in post-wash stability demonstration test (normally level 3.2 is enough to guarantee fabric stability)

Start of “Shigoto Nadeshiko,” a joint project for working women with a women’s magazine published by Shogakukan

More merchandise for the office casual segment, including accessories

Strengthening the lineup of formal wear for a broad range of ages

More new ideas for apparel for career women 2

Truly Washable Suits

Fashion Business—AOKI: FY3/17 Initiatives

AOKI Holdings Inc.


29

Target new customer needs

Collaboration with ORIHICA

New business styles for the millennial generation:

Collaboration with ORIHICA

Expand personal order space in stores to serve customers

seeking high-end and personalized fashions

Large size stores: Open more Size MAX stores

Relaxed casual: More new ideas using the CAFÉ SOHO brand

Optimization of merchandise and sales promotions 4

Merchandise promotions

Use TV commercials and the Internet for core apparel lines like Truly Washable Suits

and no-iron shirts

More fashion magazine advertising Men: Men’s CLUB, OCEANS, Mono Max

Women: CanCam, Oggi

Sales promotions

Use store opening and store renovation sales

Use AOKI Festivals and Trade-in Campaigns to increase apparel replacement demand,

sell off inventories and achieve other goals

3

Store selling large sizes


AOKI Holdings Inc.


30

Create comfortable and welcoming store interiors 5

More improvements to thoughtful and polite stylist services 6

Install reception chairs, water dispensers and elevators

(in 2-story stores)

Configure sales areas so that customers can browse with ease

Set up a formal apparel section with a high-end atmosphere

Larger sales area for women and better atmosphere, including

display cases and racks

Training stylists who specialize in specific apparel categories

Increase the number of gold stylists

Upgrade training programs to enhance the skills of all stylists

A stylist gives a customer a recommendation

Space to relax near the sales counter

Gold badge Silver badge



Use reinvigorated existing stores to improve profitability

More new ideas using ORIHICA original merchandise 1

Open five stores each year in carefully selected locations 3

THE 3rd SUITS business apparel

THE 3rd SUITS casual apparel

Continue the brand recognition improvement strategy 2

Take TV commercial campaign, launched for the first time in 2015, one more step

Continue to open Pop Up Shops and add shops in locations new to ORIHICA

Expand THE 3rd SUITS lineup

Introduce a new line of casual apparel

Launch SUPER NO IRON Shirts

Opened the first outlet store

The Nasu Garden Outlet store opened on April 29

Continue relocating stores to better locations within the same shopping center

The ORIHICA Nasu Garden Outlet Store

Fashion Business—ORIHICA: FY3/17 Initiatives

AOKI Holdings Inc.

0

2,000

4,000

6,000

8,000

10,000

12,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

32

Operating profit down 9.4% YoY SG&A expenses: +3.6% YoY

Higher costs due to an increase in stores for renovations

Higher advertising expenses due to special sales at newly opened and remodeled stores

Gross profit margin: -0.5pt YoY

Partly caused by selling off inventories

Sales up 2.6% YoY

Change in existing-store sales (forecast)

1H: +2.8%, 2H: +1.6%, full year: +2.0%

New store openings

AOKI: 8 (1H: 3, 2H: 5) New stores in Ito-Yokado and Nitori Mall

ORIHICA: 5 (1H: 1, 2H: 4) New stores in outlet malls



FY3/17 Forecast

YoY % % to sales

Sales 117,000 102.6 100.0

Gross profit 71,000 101.8 60.7

SG&A expenses 62,100 103.6 53.1


9,818 8,900

8.6% 7.6%

114,015 117,000

AOKI Nitori Mall Hirakata Store

Fashion Business: FY3/17 Forecast Forecast sales to increase due to contributions from newly opened stores and revitalization of existing stores, but profits to decrease by higher SG&A expenses

(Millions of yen) (Millions of yen)


(Millions of yen)

Anniversaire and Bridal Business


AOKI Holdings Inc.

The Declining Number of Marriages in Japan

34 34 34 34

Number of Marriages and Wedding Receptions

Anniversaire and Bridal Business: Industry Trends

• Marriages have decreased from 714,000 in 2005 to 636,000 in 2015, down 78,000 in 10 years (down about 1% each year)

• Wedding reception ratio decreased from 69.3% of all marriages in 2005 to 58.6% in 2015 (down about 1 pct. point each year)

• The decline in marriages and the reception ratio increased after the April 2014 consumption tax hike

714 731 720 726 708 700

662 669 661 644 636 625

495 493 492 483 474 458 430 417 414

384 380 373

69.3 67.5 68.4 66.5 67.0 65.4 65.0 62.4 62.6

59.7 58.6 57.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

0

100

200

300

400

500

600

700

800

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Forecast

No. of marriagesPct. with wedding receptionWith wedding reception

*Uses Ministry of Health, Labour and Welfare data and Recruit data

(Thousand couples) (%)

AOKI Holdings Inc. 35 35 35 35

Japan’s bridal market is shrinking with the decline in the number of marriages

2005

14.2%

2010

21.8% (Zexy Wedding Magazine Trend Survey 2015)

Bridal market

The guesthouse wedding market share increased for several years but has been decreasing since 2010

Guesthouse weddings' share of total wedding market in Japan

2015

17.2%

Notes: 1) Based on sales of bridal/wedding product and service companies 2) Includes overseas weddings arranged in Japan 3) The wedding/reception market is one part of the bridal market

Wedding and wedding reception expenditures in Japan

15,080 15,160 14,500 14,290 14,310 14,270 14,250

0

20

40

60

80

100

120

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2009年 2010年 2011年 2012年 2013年 2014年 2015年

挙式披露宴・披露パーティ市場規模前年比

(Est.) (Forecast)

Yano Research Institute estimate

(Billions of yen)

100.9% 100.5% 95.6% 98.6% 100.1% 99.7% 99.9%

120%

100%

80%

60%

40%

20%

0%

1,600

1,400

1,200

1,000

800

600

400

200

1,508 1,516 1,450 1,429 1,431 1,427 1,425

Wedding/reception expenditures Pct. of prior year


AOKI Holdings Inc. 36 36 36

The bridal industry and competition

Japan’s bridal market

Wedding and reception expenditures are about ¥1,400 billion

The number of marriages is about 600,000 every year

The percentage of marriages with a reception is declining

The average age for first marriage is continuing to increase

There is a decline in the interest in marriage

Bridal companies are shifting to new businesses as they open new locations (hotel

operations, contract operation of hotel wedding facilities, small weddings, consulting,

etc.)

More renovations and updates in response to new competitors

More services for overseas weddings

Increase in internal production to cut outsourcing

2015 guesthouse wedding share was 17.2% (down 4.6 points over the past 5 years)

Outlook for changes in the operating environment

*Zexy Wedding Magazine Trend Survey 2015


AOKI Holdings Inc.

■ Product proposals

■ Manage 14 facilities and 42 halls

■ Industry position

Nagano

Hills Yokohama,

MINATO MIRAI YOKOHAMA

Fukuoka

Kobe Shirakabe Osaka, Esaka

Kashiwa

Omotesando, Toyosu,

Tokyo Bay, Tachikawa

Omiya

Metro area: 8 facilities

Kansai area: 3 facilities

37

Anniversaire and Bridal Business: Features and Position within Industry

Provides "Anniversaire"-style weddings mainly in major cities

Average price per couple at the Company: 4,486,000 yen (FY3/16)

Average price per couple across industry: 3,266,000 yen

(Zexy Wedding Magazine Trend Survey 2015, excluding tax)

Wedding hall and consultation division sales: No.4 in the industry

“33rd Service Industry Comprehensive Survey” Nikkei MJ, November 5, 2015

AOKI Holdings Inc.

Sales and profits declined as number of couples married decreased

38

FY3/16

YoY % % to sales

Sales 29,321 94.8 100.0

Gross profit 8,695 93.4 29.7

SG&A expenses 5,103 99.9 17.4


Sales down 5.2% YoY


No. of couples married decreased by 345 YoY

Change in the business climate (decline in marriages)

More heated competition from other companies

End of the start-up period contribution of ANNIVERSAIRE MINATO MIRAI YOKOHAMA

Average sales per couple increased by ¥12,000 YoY

Increase in average food and beverage sales

Higher non-wedding sales (proposal plans, wedding insurance, etc.)

Cost control 0

5,000

10,000

15,000

20,000

25,000

30,000


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

FY3/16 FY3/15

4,205

3,591

13.6%

12.2%

30,917 29,321

FY3/15 FY3/16

Banquet room in MINATO MIRAI YOKOHAMA Garden venue in Toyosu

Facility renovations in January 2016

Anniversaire and Bridal Business: FY3/16 Review of Operations


(Millions of yen)

AOKI Holdings Inc. 39 39

FY3/15 FY3/16 Change YoY %

No. of facilities at period-end 14 14 - -

No. of wedding/reception halls at period-end 42 42 - -

No. of couples married 6,755 6,410 -345 94.9%

Capacity utilization ratio 71.2% 65.2% -6.0pt -

Average sales per couple (thousands of yen) 4,474 4,486 +12 100.3%

Average no. of guests 76.7 75.7 -1.0 98.6%

Anniversaire and Bridal Business: FY3/16 Review of Operations

Performance benchmarks

AOKI Holdings Inc.

Forecast lower sales and earnings despite higher operating efficiency and measures to strengthen existing locations because of a decline in the number of couples marrying

FY3/17 Forecast

YoY % % to sales

Sales 28,250 96.3 100.0

Gross profit 8,170 94.0 28.9

SG&A expenses 5,370 105.2 19.0


40

Sales down 3.7% YoY


Actions to translate preliminary visits into firm wedding orders Sales activities using a clear concept based on the

strength of each location

More proposal plans, mother/father/kids wedding plan and other measures to create new ways to attract customers

More renovations, decorations and other improvements to upgrade existing locations

Actions to earn profits Improving operating efficiency with a core IT system

update and associated review of business flow

Negotiations for cost cutting

More emphasis on sales of peripheral products and services (jewelry, wedding insurance, baby rings, etc.)


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000


12.2%

9.9%

3,591

2,800

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000


29,321 28,250

FY3/16 FY3/17

Forecast YoY

No. of couples married/ planned for marrying 6,410 6,175 -235

Average sales per couple (thousands of yen) 4,486 4,512 +27

Anniversaire and Bridal Business: FY3/17 Forecast


(Millions of yen)

Entertainment Business



Relaxing space for tomorrow's dynamism

COTE D'AZUR, a karaoke and party facility that draws inspiration from the "paradise-on-earth"

coastal region of the same name in southern France, provides a refreshing and relaxing

atmosphere filled with song and conversation

Karaoke Facility Operations: Facility Types

Facility features: Facilities based on a clear concept

Industry rank: No.5 “33rd Service Industry Comprehensive Survey"

Nikkei MJ, November 11, 2015

Regular room Ladies’ room Family room

Party room

Various types of "communication space"

Japanese room Online darts

Special rooms equipped for extra needs

VIP room Live room Stage room Super stage room


FY3/16

YoY % % to sales

Sales 18,240 104.1 100.0

Gross profit 3,417 95.9 18.7

SG&A expenses 1,928 104.2 10.6


Sales up 4.1% YoY

New store openings particularly in front of train stations: 8

Store renovations: 17

Increase in sales per customer due to strengthening of the food and drink menus and offering more party course menu selections

Started the new “CINEKARA” Private Cinema service


Decrease in existing-store sales: -0.8%

Gross profit margin: -1.6pt YoY

Higher costs mainly due to an increase in facilities for renovations

Increase in SG&A expenses: +4.2%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

17,523 18,240

FY3/15 FY3/16


A dual room equipped for “CINEKARA”

9.8%

8.2%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

FY3/15 FY3/16

1,712

1,489

Karaoke Facility Operations: FY3/16 Review of Operations

Sales increased due to contributions from newly opened stores but profits decreased by the lower existing-store sales and higher costs


(Millions of yen)


Monthly trend in sales growth

Apr 2015

May 2015

Jun 2015

Jul 2015

Aug 2015

Sep 2015

Oct 2015

Nov 2015

Dec 2015

Jan 2016

Feb 2016

Mar 2016

Full year

Apr 2016

Existing-store sales (%) -1.5 +0.6 -0.4 +4.6 -6.4 +1.1 +3.5 -4.9 +3.2 -0.9 -3.9 -4.2 -0.8 -0.1

No. of customers (%) -1.7 +0.1 -1.2 +1.2 -8.4 -1.6 -0.2 -5.7 +1.4 -2.4 -5.5 -6.9 -2.6 -3.5

Sales per customer (%) +0.2 +0.5 +0.8 +3.3 +2.2 +2.7 +3.6 +0.8 +1.8 +1.6 +1.6 +2.9 +1.9 +3.5


+0.6 +2.9 +0.7 +1.2 +0.3 -0.2 +0.9 +1.8 +1.7 +0.9 +1.5 +1.4 - +1.5

-15

-10

-5

0

5

10

15


Sales

Customers

Sales per customer

(%)

FY3/15 FY3/16

1Q Sales growth

-0.4% Fewer nighttime

customers in suburban locations

2Q Sales growth

-0.8% Customer number

continued to decline at suburban locations

3Q Sales growth

+1.0% Strong sales from

year-end party packages

4Q Sales growth

-2.9% Decrease in number of customers in the family and younger

generation segments

Karaoke Facility Operations: FY3/16 Review of Operations

Conditions at Existing Stores

AOKI Holdings Inc.

FY3/17 Forecast

YoY % % to sales

Sales 19,200 105.3 100.0

Gross profit 3,450 100.9 18.0

SG&A expenses 2,050 106.3 10.7



Change in existing-store sales (fct.) (1H: -1.7%, 2H: -2.4%, full year: -2.0%)

Decrease in gross profit margin: -0.7pt YoY

Increase in SG&A expenses: +6.3% YoY

Sales up 5.3% YoY

New store openings particularly in front of train stations: 9 (1H: 5, 2H: 4)

Revitalization of existing facilities

Renovations (Plan to renovate 18 locations to add more “concept

rooms” and make other improvements)

Further enrich food and drink menus

Increase the number of locations with “CINEKARA”

45

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800




1,489 1,400

18,240 19,200

8.2%

7.3%

The new hamburger menu

Karaoke Facility Operations: FY3/17 Forecast

Forecast sales to increase due to contributions from newly opened stores but profits to decrease by the lower existing-store sales


(Millions of yen)

AOKI Holdings Inc.

Extreme relaxation close at hand Café complex "KAIKATSU CLUB," which draws

inspiration from the Asian resort island of Bali, is a "relaxation convenience store."

We provide "convenient" relaxation space readily accessible to customers.

46

Café Complex Operations: Facility Types

Facility features: Facilities based on a clear concept

Industry rank: No.1 “33rd Service Industry Comprehensive Survey"

Nikkei MJ, November 11, 2015

Massage seat Reclining seat Full flat seat Sofa seat

Pair flat seat

Online darts

Living room

For friends and couples For singles

For families and groups

Drink bar

Comics, magazines, newspapers

Billiards

AOKI Holdings Inc.

FY3/16

YoY % % to sales

Sales 27,054 119.1 100.0

Gross profit 4,851 121.4 17.9

SG&A expenses 2,559 117.0 9.5


Operating profit up 26.8% YoY Higher expenses from new store openings were

offset by strong existing store sales

Sales up 19.1% YoY%

New store openings: 36 Prefectures where first facilities were opened:

Saga More store openings near railway stations The first facility exclusively for women:

Akihabara-ekimae Store

Higher sales at existing facilities: +5.9% Successful renovations (18 facilities)

Set up sections exclusively for women; added booths

Further improvement of the food menu

Better facilities, such as high spec PCs and high-speed Internet access

Introduction of KAIKATSU CLUB app

47


FY3/15 FY3/16 0

5,000

10,000

15,000

20,000

25,000

30,000

22,714

27,054

FY3/16 FY3/15 0

500

1,000

1,500

2,000

2,500

1,806

2,291

8.0% 8.5%

Café Complex Operations: FY3/16 Review of Operations Sales rose and profits also rose sharply due to contributions from newly opened stores and higher sales at existing locations


(Millions of yen)

Sections exclusively for women

AOKI Holdings Inc.

△ 5

0

5

10


Sales

Customers

Sales per customer

Conditions at Existing Stores

48

Monthly trend in sales growth

Apr 2015

May 2015

Jun 2015

Jul 2015

Aug 2015

Sep 2015

Oct 2015

Nov 2015

Dec 2015

Jan 2016

Feb 2016

Mar 2016

Full year

Apr 2016

Existing-store sales (%) +3.8 +6.9 +6.7 +7.9 +6.3 +8.4 +7.5 +3.8 +5.8 +4.9 +5.9 +3.3 +5.9 +8.0

No. of customers (%) +4.5 +6.8 +7.2 +7.9 +6.8 +7.3 +7.2 +4.4 +6.6 +5.0 +6.7 +3.8 +6.2 +7.7

Sales per customer (%) -0.7 +0.1 -0.5 +0.0 -0.4 +1.0 +0.3 -0.6 -0.8 -0.1 -0.8 -0.5 -0.2 +0.3


+0.6 +2.9 +0.7 +1.2 +0.3 -0.2 +0.9 +1.8 +1.7 +0.9 +1.5 +1.4 - +1.5

(%)

FY3/15 FY3/16

2Q Sales growth

+7.5% Customer number increased as higher cool-down demand

continued due to hot weather

3Q Sales growth

+5.7% Success of actions to

make summer customers want to

come back

4Q Sales growth

+4.7% Another strong

quarter backed by improvements in

facilities and customer convenience

1Q Sales growth

+5.8% Hot weather in Tokyo

made more people visit cafés to cool

down

Café Complex Operations: FY3/16 Review of Operations

-

AOKI Holdings Inc.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

0

4,000

8,000

12,000

16,000

20,000

24,000

28,000

32,000



49

FY3/17 Forecast

YoY % % to sales

Sales 30,200 111.6 100.0

Gross profit 5,050 104.1 16.7

SG&A expenses 2,850 111.3 9.4


Forecast higher sales due to new cafés and sales growth at existing locations but lower earnings resulting from expenses for adding many new cafés

Sales up 11.6% YoY New store openings: 44 (1H: 24, 2H: 20)

Revitalization of existing facilities

Change in existing-store sales (fct.): 1H: +1.6%, 2H: +0.4%, Full year: +1.0%

Renovations (Plan to renovate 19 locations including 6 facilities with exclusive area for women)

Complete separation of smoking and non-smoking areas in the amusement area

More upgrades for the KAIKATSU CLUB app


Higher expenses from new store openings and renovations

Decrease in gross profit margin: -1.2pt YoY

Increase in SG&A expenses: +11.3% YoY


2,291 2,200

8.5%

7.3%

27,054

30,200

Café Complex Operations: FY3/17 Forecast


(Millions of yen)

AOKI Holdings Inc.

Suburban locations

50

Expand market share by meeting the needs of the times

Store opening strategy

Focusing on creating a dominant presence in key markets

In areas where we have yet to open a facility, we will open multiple facilities simultaneously to quickly raise brand recognition and market share

Store formats

Hokkaido: 4

Tohoku: 24

Kanto: 99

Chukyo/Tokai: 49 Kinki: 55

Kyushu: 23

Chugoku: 15

Hokuetsu: 14

Koshin: 9

Stores are not yet located

Stores are located

Shikoku: 6

Train station building

Facilities exclusively for women

7 49 59

89 103 110 133 152 172

211 228 260

295 338

500

050

100150200250300350400450500

FY3/04 FY3/05 FY3/06 FY3/07 FY3/08 FY3/09 FY3/10 FY3/11 FY3/12 FY3/13 FY3/14 FY3/15 FY3/16 FY3/17 Current TargetsForecast

(Number of stores)

Café Complex Operations: Aggressive Store Development

(As of May 19, 2016) Total: 298 stores

Prefectures where

Supplementary Documents

Notes on pages 52, 54 and 55: 1. Net income per share: Net income divided by average number of shares outstanding (excluding treasury stock). 2. All amounts are rounded down to million yen. 3. The total operating profit for each segment and operating profit do not match due to inter-segmental adjustments. Please see pages 14 and 20 for the difference.


FY3/16 Consolidated Business Results (Millions of yen unless otherwise stated)

FY3/15 Results

% FY3/16

Forecast % FY3/16 Results % YoY change YoY %

Sales 183,805 100.0 191,050 100.0 188,594 100.0 4,788 102.6

Fashion 112,675 100.0 116,100 100.0 114,015 100.0 1,340 101.2

Anniversaire/Bridal 30,917 100.0 30,300 100.0 29,321 100.0 -1,595 94.8

Karaoke 17,523 100.0 18,250 100.0 18,240 100.0 717 104.1

Café Complex 22,714 100.0 26,430 100.0 27,054 100.0 4,339 119.1

Gross profit 86,785 47.2 90,160 47.2 87,170 46.2 384 100.4

Fashion 69,409 61.6 72,250 62.2 69,734 61.2 325 100.5

Anniversaire/Bridal 9,314 30.1 9,200 30.4 8,695 29.7 -618 93.4

Karaoke 3,562 20.3 3,530 19.3 3,417 18.7 -145 95.9

Café Complex 3,994 17.6 4,650 17.6 4,851 17.9 856 121.4

SG&A expenses 67,757 36.9 70,160 36.7 69,380 36.8 1,622 102.4

Fashion 58,636 52.0 60,450 52.1 59,915 52.6 1,279 102.2


Karaoke 1,850 10.6 1,950 10.7 1,928 10.6 77 104.2

Café Complex 2,188 9.6 2,480 9.4 2,559 9.5 371 117.0

Operating profit 19,028 10.4 20,000 10.5 17,789 9.4 -1,238 93.5

Fashion 10,773 9.6 11,800 10.2 9,818 8.6 -954 91.1


Karaoke 1,712 9.8 1,580 8.7 1,489 8.2 -222 87.0

Café Complex 1,806 8.0 2,170 8.2 2,291 8.5 484 126.8

Ordinary income 18,914 10.3 19,900 10.4 17,627 9.3 -1,286 93.2


10,185 5.5 11,300 5.9 9,711 5.1 -473 95.3

Net income per share (yen) 111.70 - 125.09 - 107.55 - -4.15 -

Shares outstanding at period-end (1,000 shares)

91,183 - 89,982 - 89,665 - -1,518 -


FY3/16 Major Expenses

(Millions of yen unless otherwise stated)

FY3/15 Results FY3/16 Results

Total Fashion Anniversaire/

Bridal Karaoke

Café Complex Total Fashion Anniversaire/ Bridal Karaoke Café Complex

YoY % YoY % YoY % YoY % YoY %

Advertising expenses

11,781 9,204 1,745 405 174 12,202 103.6 9,525 103.5 1,725 98.9 426 105.1 190 109.2

Personnel expenses

24,914 20,304 1,120 981 1,329 25,381 101.9 20,540 101.2 1,214 108.4 965 98.3 1,494 112.5

Rents 14,883 15,114 21 26 35 15,360 103.2 15,566 103.0 21 102.0 32 120.7 55 158.4

Depreciation 2,670 2,028 74 44 22 3,082 115.4 2,387 117.7 64 86.1 53 120.3 40 178.9

Note: The sum of the business segment items does not match the total because the total includes expenses of AOKI Holdings Inc. and inter-segment eliminations.

FY3/15 Results FY3/16 Results

Anniversaire/ Bridal

Karaoke Café Complex Anniversaire/ Bridal Karaoke Café Complex

YoY % YoY % YoY %

Personnel expenses 5,488 4,139 5,936 5,022 91.5 4,485 108.4 7,434 125.2

Rents 1,931 3,574 3,844 1,948 100.9 3,868 108.2 4,581 119.2

Depreciation 1,626 1,299 1,439 1,610 99.0 1,267 97.5 1,618 112.4

SG&A expenses

Major expenses included in cost of sales

Note: The ANNIVERSAIRE/Bridal, Karaoke, and Café Complex businesses include the above-stated expenses in cost of sales, in addition to the SG&A expenses in the upper table.


AOKI Holdings Inc.


54


1H FY3/16

Results %

1H FY3/17 Forecast

% YoY change YoY %

Sales 81,704 100.0 82,680 100.0 975 101.2

Fashion 44,697 100.0 45,400 100.0 702 101.6

Anniversaire/Bridal 14,978 100.0 13,300 100.0 -1,678 88.8

Karaoke 8,730 100.0 9,200 100.0 469 105.4

Café Complex 13,322 100.0 14,800 100.0 1,477 111.1

Gross profit 36,187 44.3 35,290 42.7 -897 97.5

Fashion 27,461 61.4 27,450 60.5 -11 100.0

Anniversaire/Bridal 4,442 29.7 3,580 26.9 -862 80.6

Karaoke 1,445 16.6 1,440 15.7 -5 99.6

Café Complex 2,596 19.5 2,560 17.3 -36 98.6

SG&A expenses 32,505 39.8 34,890 42.2 2,384 107.3

Fashion 27,599 61.7 29,620 65.2 2,020 107.3

Anniversaire/Bridal 2,600 17.4 2,750 20.7 149 105.8

Karaoke 962 11.0 1,035 11.3 72 107.5

Café Complex 1,244 9.3 1,465 9.9 220 117.7

Operating profit 3,681 4.5 400 0.5 -3,281 10.9

Fashion -137 - -2,170 - -2,032 -

Anniversaire/Bridal 1,841 12.3 830 6.2 -1,011 45.1

Karaoke 482 5.5 405 4.4 -77 83.9

Café Complex 1,351 10.1 1,095 7.4 -256 81.0

Ordinary income 3,620 4.4 350 0.4 -3,270 9.7


2,157 2.6 100 0.1 -2,057 4.6

Net income per share (yen) 23.80 - 1.12 - -22.68 - Shares outstanding at period-end (1,000 shares)

89,982 - 89,664 - -317 -


FY3/17 Consolidated Forecast

FY3/16 Results

% FY3/17

Forecast % YoY change YoY %

Sales 188,594 100.0 194,600 100.0 6,005 103.2

Fashion 114,015 100.0 117,000 100.0 2,984 102.6

Anniversaire/Bridal 29,321 100.0 28,250 100.0 -1,071 96.3

Karaoke 18,240 100.0 19,200 100.0 959 105.3

Café Complex 27,054 100.0 30,200 100.0 3,145 111.6

Gross profit 87,170 46.2 88,170 45.3 999 101.1

Fashion 69,734 61.2 71,000 60.7 1,265 101.8


Karaoke 3,417 18.7 3,450 18.0 32 100.9

Café Complex 4,851 17.9 5,050 16.7 198 104.1

SG&A expenses 69,380 36.8 72,370 37.2 2,989 104.3

Fashion 59,915 52.6 62,100 53.1 2,184 103.6

Anniversaire/Bridal 5,103 17.4 5,370 19.0 266 105.2

Karaoke 1,928 10.6 2,050 10.7 121 106.3

Café Complex 2,559 9.5 2,850 9.4 290 111.3

Operating profit 17,789 9.4 15,800 8.1 -1,989 88.8

Fashion 9,818 8.6 8,900 7.6 -918 90.6


Karaoke 1,489 8.2 1,400 7.3 -89 94.0

Café Complex 2,291 8.5 2,200 7.3 -91 96.0

Ordinary income 17,627 9.3 15,700 8.1 -1,927 89.1


9,711 5.1 8,800 4.5 -911 90.6

Net income per share (yen) 107.55 - 98.14 - -9.41 - Shares outstanding at period-end (1,000 shares)

89,664 - 89,664 - - -


AOKI Holdings Inc.

56

FY3/17 Major Expenses


Total Fashion Anniversaire/

Bridal Karaoke

Café Complex

Total Fashion Anniversaire/ Bridal Karaoke Café Complex

YoY % YoY % YoY % YoY % YoY %

Advertising

expenses 12,202 9,525 1,725 426 190 11,933 97.8 9,306 97.7 1,787 103.5 479 112.4 233 122.1

Personnel expenses

25,381 20,540 1,214 965 1,494 26,289 103.6 21,140 102.9 1,330 109.6 970 100.5 1,542 103.2

Rents 15,360 15,566 21 32 55 15,517 101.0 15,720 101.0 24 109.7 34 106.8 58 105.4

Depreciation 3,082 2,387 64 53 40 3,409 110.6 2,610 109.3 96 149.8 94 176.9 51 125.8


Anniversaire / Bridal

Karaoke Café Complex Anniversaire / Bridal Karaoke Café Complex

YoY % YoY % YoY %

Personnel expenses 5,022 4,485 7,434 4,880 97.2 4,760 106.1 8,306 111.7

Rents 1,948 3,868 4,581 1,992 102.3 4,306 111.3 5,400 117.9

Depreciation 1,610 1,267 1,618 1,625 100.9 1,205 95.1 1,853 114.5


SG&A expenses

Major expenses included in cost of sales

Note: The ANNIVERSAIRE/Bridal, Karaoke, and Café Complex businesses include the above-stated expenses in cost of sales, in addition to the SG&A expenses in the upper table.


Note: The sum of the business segment items does not match the total because the total includes expenses of AOKI Holdings Inc. and inter-segment eliminations.

AOKI Holdings Inc.


57

(%)

(%)

First half YoY % Second half YoY % Full year YoY %

Number of units sold (in ten thousands)

FY3/16 43.7 96.3 83.9 99.5 127.5 98.4

FY3/15 45.3 87.1 84.3 81.7 129.6 83.5

Unit price (thousands of yen)

FY3/16 26.3 104.0 27.1 100.0 26.9 101.1

FY3/15 25.3 107.2 27.1 108.4 26.6 107.7

First half 3Q 4Q Second

half Full year Oct. Nov. Dec. Jan. Feb. Mar.

FY3/16 -0.3 2.3 -11.5 2.2 -3.2 2.1 4.0 -2.0 0.7 -1.1 -0.8

FY3/15 -6.7 -14.9 -9.8 -14.8 -13.0 0.5 11.0 -15.0 -6.1 -9.2 -8.3



Number of customers

FY3/16 -5.9 -1.9 -14.3 -5.9 -8.0 -2.5 1.5 -0.3 -0.6 -4.9 -5.3

FY3/15 -10.5 -18.6 -13.3 -10.8 -14.1 0.2 0.8 -14.9 -7.1 -11.2 -10.9

Sales per customer

FY3/16 5.9 4.3 3.2 8.7 5.1 4.7 2.4 -1.7 1.3 4.0 4.7

FY3/15 4.2 4.5 4.0 -4.4 1.2 0.3 10.1 -0.1 1.2 2.3 2.9

(1) Change in existing-store sales

(2) Change in number of customers and sales per customer at existing stores

(3) Number of units sold and unit prices of suits

AOKI Holdings Inc.

58

(4) Sales by category (Millions of yen unless otherwise stated)

(Square meters)

FY3/15 Results % FY3/16 Results % YoY change YoY %

Heavy clothing 48,848 43.4 48,747 42.7 -101 99.8

Medium clothing 9,038 8.0 8,810 7.7 -228 97.5

Light clothing 34,529 30.6 34,502 30.3 -26 99.9

Ladies’ clothing 17,115 15.2 18,689 16.4 1,574 109.2

Other 3,143 2.8 3,265 2.9 121 103.9

Total 112,675 100.0 114,015 100.0 -234 101.2

FY3/15 FY3/16 YoY change YoY %

342,534 353,154 10,620 103.1


(5) Average total sales area

Definition: Heavy clothing: Suit, formal wear, coat

Medium clothing: Jacket, slacks

Light clothing: Shirt, tie, casual wear, clothing accessories, etc.

Other: Alteration, etc.


(6) Store network by prefecture

（単位：店） FY3/16

No. of stores opened / closed No. of stores at period-end No. of stores opened / closed No. of stores at period-end

AOKI ORIHICA Total AOKI ORIHICA Total AOKI ORIHICA Total AOKI ORIHICA Total

Hokkaido 24 24 Hokkaido/ Tohoku

Gifu 1 /1 1/1 12 1 13 Tokai

Aomori 4 4 Shizuoka 1/1 1 2/1 22 4 26

119 Iwate 4 4

57

Aichi 3 /1 3/1 54 15 69

Miyagi 8 4 12 Mie 11 11

Akita 3 3 Shiga 1 1 6 2 8 Kinki/ Chugoku Yamagata 2 2 Kyoto 5 1 6

Fukushima 7 1 8 Osaka 1 3/1 4/1 33 14 47

97 Ibaraki /1 /1 15 3 18 Kanto Hyogo 1 1 12 10 22

Tochigi /1 /1 11 1 12

344

Nara 5 1 6

Gunma 12 12 Hiroshima 1 1 5 3 8

Saitama 2/2 2/2 52 17 69 Fukuoka 19 19 Kyushu

Chiba 1 1 42 15 57 Nagasaki 1 1 3 3

35 Tokyo /1 3/1 3/2 70 30 100 Kumamoto 1 1 7 7

Kanagawa 1 1/1 2/1 56 20 76 Miyazaki 1 1 1 1

Niigata 10 2 12 Koshinetsu/ Hokuriku

Kagoshima 5 5

Toyama 9 9 Total 12/2 12/9 24/11 567 144 711

Ishikawa 8 8

59 Fukui 3 3

Yamanashi 6 6

Nagano 21 21


(1) Change in existing-store sales, number of customers and sales per customer at existing stores

(2) Sales forecast by category

1Q 2Q First half 3Q 4Q Second half Full year

Sales FY3/17 (forecast) 4.2 0.5 2.8 3.0 0.5 1.6 2.0

FY3/16 -1.0 0.7 -0.3 -3.2 0.7 -1.1 -0.8

Number of customers

FY3/17 (forecast) 4.2 0.5 2.8 2.3 0.5 1.4 2.0

FY3/16 -9.9 1.2 -5.9 -8.0 -0.6 -4.9 -5.3

Sales per customer

FY3/17 (forecast) 0.0 0.0 0.0 0.7 0.0 0.2 0.0

FY3/16 9.9 -0.5 5.9 5.1 1.3 4.0 4.7

(Millions of yen)

FY3/16 % FY3/17 Forecast % YoY change %

Heavy clothing 48,747 42.7 50,450 43.1 1,702 103.5

Medium clothing 8,810 7.7 9,100 7.8 289 103.3

Light clothing 34,502 30.3 34,800 29.8 297 100.9

Ladies’ clothing 18,689 16.4 19,450 16.6 760 104.1

Other 3,265 2.9 3,200 2.7 -65 98.0

Total 114,015 100.0 117,000 100.0 2,984 102.6

(%)

Definition: Heavy clothing: Suit, formal wear, coat Light clothing: Shirt, tie, casual wear, clothing accessories, etc. Medium clothing: Jacket, slacks Other: Alteration, etc.

Reference: FY3/17 Fashion Business Outlook

AOKI Holdings Inc.



Number of customers

FY3/16 -2.1 -0.2 -5.7 1.4 -1.2 -2.4 -5.5 -6.9 -5.0 -3.1 -2.6

FY3/15 -4.5 -2.5 0.0 -6.1 -3.2 -4.3 7.0 -3.6 -1.0 -2.1 -3.3

Sales per customer

FY3/16 1.6 3.6 0.8 1.8 2.2 1.6 1.6 2.9 2.2 2.3 1.9

FY3/15 1.2 3.0 1.5 2.9 2.2 1.5 2.3 -1.6 0.4 1.3 1.3



FY3/16 -0.6 3.5 -4.9 3.2 1.0 -0.9 -3.9 -4.2 -2.9 -0.9 -0.8

FY3/15 -3.3 0.5 1.5 -3.4 -1.1 -2.9 9.4 -5.2 -0.6 -0.8 -2.0

61 61

FY3/15 FY3/16 YoY change

Existing stores

Room charges 52.6 52.5 -0.1pt

Food and beverage sales 46.7 46.9 +0.2pt

Other sales 0.7 0.6 -0.1pt

(%) (3) Karaoke facility operations: Percentage to existing-store sales

(%)

(%)

(1) Karaoke facility operations: Change in existing-store sales

(2) Karaoke facility operations: Change in number of customers and sales per customer at existing stores


AOKI Holdings Inc.



Number of customers

FY3/16 6.8 7.2 4.4 6.6 6.1 5.0 6.7 3.8 5.1 5.6 6.2

FY3/15 3.8 5.1 8.7 3.9 5.8 3.7 8.1 3.7 5.0 5.4 4.6

Sales per customer

FY3/16 -0.1 0.3 -0.6 -0.8 -0.4 -0.1 -0.8 -0.5 -0.4 -0.4 -0.2

FY3/15 0.4 -0.1 0.1 0.3 0.1 0.3 -1.4 -1.7 -0.9 -0.4 0.0



FY3/16 6.7 7.5 3.8 5.8 5.7 4.9 5.9 3.3 4.7 5.2 5.9

FY3/15 4.2 5.0 8.8 4.2 5.9 4.1 6.6 1.9 4.1 5.0 4.6


62

FY3/15 FY3/16 YoY change

Existing stores

Room charges 84.1 83.5 -0.6pt

Food and beverage sales 14.3 14.6 +0.3pt

Other sales 1.6 1.9 +0.3pt

(%) (6) Café complex operations: Percentage to existing-store sales

(%)

(%)

(4) Café complex operations: Change in existing-store sales

(5) Café complex operations: Change in number of customers and sales per customer at existing stores


(7) Store network by prefecture

（単位：店）

FY3/16

No. of stores opened / closed No. of stores at period-end No. of stores opened / closed No. of stores at period-end

COTE D'AZUR

KAIKATSU CLUB

Total COTE

D'AZUR KAIKATSU

CLUB Total

COTE D'AZUR

KAIKATSU CLUB

Total COTE

D'AZUR KAIKATSU

CLUB Total

Hokkaido 4 4 Hokkaido/ Tohoku

Gifu 7 7 Tokai

Iwate 1 1 2 4 6 Shizuoka 1 1 8 9 17

68 Miyagi 6 5 11

39

Aichi /1 2 2/1 9 26 35

Akita 1 3 4 Mie 2/1 2/1 2 7 9

Yamagata 1 1 1 5 6 Shiga 2 3 5 Kinki/ Chugoku Fukushima 3 3 1 7 8 Kyoto 3 7 10

Ibaraki 1 1 4 11 15 Kanto Osaka 7 1 8 15 22 37

98

Tochigi 1 5 6

188

Hyogo 3 3 6 16 22

Gunma 1 8 9 Nara 2 2 2 3 5

Saitama 1 1 6 22 28 Wakayama 2 2

Chiba 1 1 2 11 22 33 Shimane 2 2

Tokyo 2 3 5 32 15 47 Okayama 2 6 8

Kanagawa 5 2 7 34 16 50 Hiroshima 1 1 5 5

Niigata 1 1 3 8 11 Koshinetsu/ Hokuriku

Yamaguchi 2 2 Toyama 2 2 4 Tokushima 2 2 Kyushu/

Shikoku Ishikawa 5 4 9

54

Kagawa 3 3

Fukui 6 6 Fukuoka 4 4 3 7 10

31

Yamanashi 2 3 5 Saga 2 2 2 2

Nagano 13 6 19 Nagasaki 2 2

Kumamoto 5 5

Oita 2 2 3 3

Miyazaki 2 2 3 3

Kagoshima 1 1 Total 15/1 36/1 51/2 183 295 478

AOKI Holdings Inc.

Reference: FY3/17 Entertainment Business Outlook

64


Sales FY3/17 (forecast) -3.4 -0.1 -1.7 -2.0 -2.8 -2.4 -2.0

FY3/16 -0.4 -0.8 -0.6 1.0 -2.9 -0.9 -0.8

Number of customers

FY3/17 (forecast) -3.5 -0.3 -1.8 -2.0 -2.8 -2.4 -2.1

FY3/16 -0.9 -3.3 -2.1 -1.2 -5.0 -3.1 -2.6

Sales per customer

FY3/17 (forecast) 0.2 0.2 0.2 0.0 0.0 0.0 0.1

FY3/16 0.5 2.6 1.6 2.2 2.2 2.3 1.9

(1) Karaoke facility operations: Change in existing-store sales, number of customers and sales per customer at existing stores

(2) Café complex operations : Change in existing-store sales, number of customers and sales per customer at existing stores

(%)

(%)


Sales FY3/17 (forecast) 3.1 0.2 1.6 1.2 -0.4 0.4 1.0

FY3/16 5.8 7.5 6.7 5.7 4.7 5.2 5.9

Number of customers

FY3/17 (forecast) 3.3 0.3 1.7 1.1 -0.5 0.3 1.0

FY3/16 6.2 7.3 6.8 6.1 5.1 5.6 6.2

Sales per customer

FY3/17 (forecast) -0.1 -0.1 -0.1 0.1 0.1 0.1 0.0

FY3/16 -0.3 0.2 -0.1 -0.4 -0.4 -0.4 -0.2