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Performance Report

Economic Performance

 We will endeavor to enhance our corporate value, through continuous efforts to further increase not only sales and share values but also the brand value of Yamada Denki and to develop good relationships with customers and business partners.

Earnings

 In fiscal 2015, although the future course of the economy remained to be uncertain with progressing appreciation of the yen and fluctuations of stock prices, the home appliance distribution industry enjoyed favorable sales of some products thanks to repurchase demand for daily necessities. However, the influence of a backlash against the rush demand triggered by the termination of the eco-point system and the consumption tax increase was prolonged. Yamada Denki’s consolidated sales for fiscal 2015 amounted to 1 trillion 612.7 billion yen, with an operating profit of 58.1 billion yen and a recurring profit of 62.7 billion yen. Current net profit belonging to the parent company’s shareholders was 30.3 billion yen.

Products and Services Provided by Yamada Denki and Sales by Product Category

 The Yamada Denki Group sells a variety of electric home appliances and information electronics products to individuals and corporates. Recently, we have been placing stress on the housing business such as the sale of smart houses and renovation of existing houses. We also provide various pre-and after-sales services, including the provision of personal computer lessons and the establishment of counters dedicated to small and medium-sized companies and government agencies. Social needs are changing drastically due to the declining birth rate and the aging of society, population decrease and the development of the Internet society. However, we take advantage of having the largest store network in Japan and will further endeavor to enhance services based on the “customer first”approach with the aim of being a leading company of the IoT age through the Daily Life Support Services, Smart House Services, Renovation Services, Net Mall Services and Environment-related Services.

Not Only Provide Products but also Offer Expert Service and Solutions

 In order to respond to changing social needs, the Yamada Denki Group is promoting the shift from only providing goods (home appliances and other products) to offering proposals on servicing (miscellaneous support and services). By not only selling goods but also offering proposals on servicing, we are trying to further enhance the value of goods themselves and improve customer convenience.

Development of Smart House & Renovation Businesses for Cultivating New Markets and Linking to the Coming Generations

 The Yamada Denki Group has been promoting the initiatives of “energy conservation” through the dissemination of energy-efficient electric home appliances, “energy creation” by the use of photovoltaic power generation systems, and “energy storage” to store generated power, via its store network and subsidiaries (Yamada SxL Home Co., Ltd. (First Section, Tokyo Stock Exchange; Code: 1919) and Yamada Wood House Co., Ltd.). We offer proposals on smart houses wherein these initiatives are controlled and integrated through the use of the HEMS and communications infrastructure (proposals on newly-built houses and net zero energy houses (ZEH)). We have installed model houses and showrooms with offices at stores’ parking lots and mockups within stores to demonstrate our unique business models, which are independent from the conventional ones employed by ordinary home builders, and offer proposals on the entirety of a house in response to the coming aging society with fewer children. In this manner, we are cultivating new markets from the customers’ viewpoint and based on a downstream perspective. Furthermore, Housetec Inc., which is a subsidiary household equipment manufacturer, installs showrooms within Yamada Denki’s stores and is actively offering proposals on renovation in collaboration with Total Smarnity Life Corner booths (renovation corner booths), while shifting from a business model centered on B-to-B services and expanding new B-to-C demand.

Promotion of Reuse and Recycling Business of Home Appliances and PCs

 In collaboration among C.I.C. Corporation, Azuma Metal Co., Ltd., and Inversenet Co., Ltd. within the Yamada Denki Group, the business to reuse and recycle home appliances and PCs has been promoted. Home appliances that are no longer used are collected and then renewed and resold as goods for reuse after the processes of cleaning, breakdown, inspections, etc., or are recycled as resources. As of the end of March 2016, the number of outlet/reuse stores operated by Yamada Denki increased to 16. Second-hand clothes and other non-electric/non-electronics products are also sold in collaboration with CIC., in addition to home appliances for reuse. In this manner, we are trying hard to satisfy customer needs and are contributing to circulation of limited resources.

Development of SPA Products

 Yamada Denki has been developing its original brand, “HERB Relax” series, as the SPA business, integrally covering marketing, planning, development and retailing. Under the basic concept, “Products with Functions Preferred by Customers”, instead of seeking so-called “high functionality,” new products are being developed from the customers’ viewpoint, such as limiting them to only necessary functions or further improving energy efficiency. As of the end of March 2016, there are a total of 313 products mainly in categories of consumable goods and small home appliances.

Opening of New Stores

 Having established a national chain covering all 47 prefectures, Yamada Denki has been continuing its efforts to further advance its store network and improve services as a specialist home appliance merchandiser while responding to various social needs. The number of stores as of the end of March 2016 was 947 (directly operated stores: 637; Best Denki stores: 161; and other consolidated subsidiaries: 149) and the total number of stores including FC stores was 12,087.