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Performance Reporting

Economic Performance

We will endeavor to enhance our corporate value, through continuous efforts to further increase sales, share values and the brand value of Yamada Denki, based on good relationships with customers and business partners.

Earnings

 In fiscal 2017, the economy remained on a recovery track thanks to improvement in corporate performance and employment conditions. In the home appliance distribution industry, sales of major products such as TVs, refrigerators, washing machines, air conditioners slowed down in the latter half of the year and those of PCs were sluggish, but mobile phones sold well thanks to the launch of new models. As a result, sales as a whole remained almost flat. Yamada Denki's consolidated sales for fiscal 2017 amounted to 1 trillion 573.8 billion yen, with an operating profit of 38.7 billion yen and a recurring profit of 47.3 billion yen. Current net profit belonging to the parent company's shareholders was 29.7 billion yen.

Analysis of Financial Status

Assets, Liabilities, and Net Assets

 The total assets as of the end of this fiscal year in the consolidated financial results increased to 1,175,568 million yen, up by 16,111 million yen compared to the end of the previous consolidated fiscal year (a 1.4% increase from the previous term). This is mainly due to increases in cash and deposits. Liabilities increased to 586,827 million yen, up by 12,918 million yen (a 2.3% increase from the previous term), mainly due to increases in notes and accounts payable. Net assets increased to 588,740 million yen, up by 3,192 million yen (a 0.5% increase from the previous term), due to such reasons as an increase in accumulated earnings. As a result, the capital adequacy ratio increased to 49.8% (up by 1.4 points from the previous term).
 The accelerated replacement of inventory towards the following fiscal year improved the financial composition and operating cash flow, with decreased inventories, increased cash and deposits, and decreased interest-bearing liabilities. Furthermore, the capacity to create cash flow was enhanced and the capital adequacy ratio and other cash flow-related indices showed improvements.

Cash Flows

Cash and cash equivalents as of the end of this fiscal year in the Consolidated Financial Results increased to 51,326 million yen, up by 16,345 million yen compared to the end of the previous consolidated fiscal year (a 46.7% increase from the previous term).

Net cash used in operating activities

Net cash used in operating activities resulted in income of 61,689 million yen, mainly due to a decrease in notes and accounts receivable, an increase in notes and accounts payable, and a decrease in inventories despite a year-on-year decrease in net income before taxes.

Net cash used in investing activities

Net cash used in investing activities resulted in expenditure of 12,668 million yen, mainly due to the acquisition of tangible fixed assets upon refurbishment of stores.

Net cash used in financing activities

Net cash used in financing activities resulted in expenditure of 32,920 million yen, mainly due to the purchase of treasury stock.

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

 The Yamada Denki Group sells a variety of 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 birthrate 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 age through the daily life support services, smart house services, renovation services, online sales & shopping 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 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. and YamadaWoodHouse 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.

Having Absorbed Nakayama Co., Ltd.

 On April 1, 2018, the Yamada Denki Group absorbed its consolidated subsidiary, Nakayama Co., Ltd. Nakayama is a home renovation company that has offered integrated services from the product development to the production, sale, installation and after-sales services.
 The Yamada Denki Group positions total housing services centered on home appliances as one of the major pillars of its new businesses and is promoting the opening of this type of new stores. Through the absorption, the Yamada Denki Group aims to mutually consolidate functions and infrastructures and collaborate in developing new stores, thereby enhancing the efficiency of the Group's management and strengthening its business bases and strategies.
 Yamada Denki completely absorbed Nakayama, which dissolved accordingly.

Tie-ups for Business Expansion

Capital and Business Tie-up with FOMM Corporation

 On October 31, 2017, the Yamada Denki Group signed a capital and business tie-up agreement with FOMM Corporation (in Kawasaki City), which develops small electric vehicles (EVs). FOMM was founded in 2013 by engineers who had engaged in the development of a super compact EV, "COMS," of Toyota Auto Body Co., Ltd. The company has developed a four-seat compact EV that can float on water in an emergency.
 The Yamada Denki Group considers EVs as new home appliances in the 21st century and will develop a new business integrating new ideas and services relating to EVs. Furthermore, the Group aims to establish a next-generation mobility business through offering battery charging services at group stores and car sharing services, and through making houses with low environmental impact in conjunction with the smart house business.

Business Tie-up with ASAHI EITO CO., LTD.

 On November 8, 2017, the Yamada Denki Group signed a business tie-up agreement with ASAHI EITO CO., LTD. ASAHI EITO is a manufacturer of housing equipment centered on sanitary ware that has a long history. It offers integrated services from the designing, development, manufacturing, sale and installation based on its original technologies to create a comfortable living environment for customers. Taking advantage of the outstanding international procurement ability, the company also provides highly original, high-quality and low-cost toilets, bathroom vanities and other housing equipment broadly to house makers, home builders, home improvement centers, building contractors, home renovation companies, etc.
 The tie-up will facilitate the smart house and renovation businesses making the most of the strengths and know-how of both sides and will enable the Yamada Denki Group to better respond to the needs of consumers against the backdrop of a rapidly changing social environment with the declining birthrate and the aging of society, population decrease, and development of the Internet society.