YONDOSHI HOLDINGS INC.

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To Our Shareholders

Overview of Fiscal 2018

Looking at the Group’s consolidated performance in fiscal 2018, the fiscal year ended February 28, 2019, net sales amounted to ¥47,118 million (down 2.0% compared with the previous fiscal year). Operating income came to ¥4,984 million (down 18.3% YoY) and ordinary income was ¥6,804 million (down 10.0% YoY). Profit attributable to owners of parent fell to ¥2,440 million (down 53.9% YoY), due mainly to the recording of a one-time tax expense stemming from the transfer of shares of FUJI CO., LTD., an equity method affiliate, in line with business restructuring.
Turning to the Group’s operating performance on an individual segment basis, the F.D.C. Products group, which is largely responsible for activities in the Jewelry Business, reported a downturn in revenue and earnings. In addition to the time taken to bring about a recovery in bridal jewelry sales, this downturn largely reflects the drop in sales below plans over the December Christmas season, the period of peak demand. Meanwhile, signs of a positive turnaround are beginning to emerge on the back of the Group’s vigorous efforts to promote a variety of measures in the bridal jewelry business. In the Apparel Business, both revenue and earnings increased. This was the result of the AS’TY group’s successful efforts to strengthen measures with major clients utilizing its product planning capabilities and overseas production framework. Retailer age Co., Ltd. achieved positive returns by expanding the opening of new locations in its mainstay everyday fashion brand PALETTE, as well as other measures aimed at strengthening sales promotions.

Providing Adequate Returns to Shareholders

The YONDOSHI HOLDINGS Group places the appropriation of profits to shareholders as a key management priority. As a result, the Group maintains the basic policy of delivering stable and sustainable cash dividends. At the same time, the Group adopts a flexible policy toward the purchase of treasury stock as a part of comprehensive efforts to increase the level of returns to shareholders. With this in mind, and together with the interim dividend, YONDOSHI HOLDINGS declared an annual cash dividend of ¥75 per share for the fiscal year under review, an increase of 10 per share compared with the previous fiscal year. In addition, through a TOB, the Company acquired 3,253,733 shares of treasury stock, representing 11.1% of the total number of shares issued and outstanding. Turning to dividends for the fiscal year ending February 29, 2020, YONDOSHI HOLDINGS plans to pay an interim and fiscal year-end cash dividend of ¥40 per common share for a full fiscal year cash dividend of ¥80 per common share, representing a ninth consecutive fiscal year of cash dividend growth. Moreover, the Company will proactively pursue efforts aimed at flexibly purchasing treasury stock. Following the purchase of 130,000 shares of treasury stock in March, the Company resolved to acquire additional treasury stock to a maximum of 1,350,000 shares at a meeting of its Board of Directors held on April 10, 2019. Through the large-scale acquisition of treasury stock, YONDOSHI HOLDINGS is placing utmost emphasis on capital efficiency, such as net income per share and ROE, which will lead to increasing the level of returns to shareholders.

Toward Achieving the 5th Medium-Term Management Plan

With “Challenge and Change” as its overarching slogan, YONDOSHI HOLDINGS launched its Fifth Medium-Term Management Plan under a new management structure. As a group that is committed to becoming a century-old company and brand, the YONDOSHI HOLDINGS Group is placing utmost importance on working to increase the value of the 4ºC brand. Guided by the Fifth Medium-Term Management Plan, every effort will be made to actively nurture human resources, strengthen the competitiveness of products, and ascertain market trends. In the fiscal year ending February 29, 2020, the second year of the Fifth Medium-Term Management Plan, taking into account full-fledged measures at rebranding the Jewelry Business and stable growth in the Apparel Business, the Group projects net sales of ¥47,300 million, operating income to total ¥5,100 million, ordinary income to come to ¥5,400 million, and profit attributable to owners of parent to amount to ¥3,400 million, on a consolidated basis.

Left: CEO Saishi Kimura
Right: COO Akihiro Takiguchi