ANNUAL REPORT 2019 Year ended February 28, 2019...(Shingeki-no-Kyojin TEN) 2014 ©Hajime Isayama,...

ANNUAL REPORT 2 0 1 9 Year ended February 28, 2019

Code: 9716

1NOMURA Co., Ltd. Annual Report 2019NOMURA Co., Ltd. Annual Report 2019

Management Philosophy

Brand Statement

We help to create enriching environments by putting people first and creating new value.

A partner that brings prosperity to our clients’ businesses Prosperity means both business success for our client companies and fulfillment for the people who spend time there.

NOMURA will continue to challenge itself to be the best partner for our clients and bring our clients prosperity.“Prosperity Partner” is a symbolic slogan that expresses the aim of the NOMURA GROUP.

Annual Report 2019

ContentsCorporate Value Creation Process

2 History of NOMURA's Corporate Value Creation4 NOMURA’s Business8 Source of NOMURA's Corporate Value Creation

Management Strategies 12 Message from the Management

ESG Information

16 Corporate Governance20 Corporate Social Responsibility (CSR)22 Efforts to Improve NOMURA’s Social Value

Financial Information

24 Consolidated Ten-Year Financial Summary26 Review of Operations by Market Segment28 Management Discussion and Analysis30 Business and Other Risks31 Consolidated Financial Statements

Corporate Information

36 Company Overview37 Stock Information

Putting People First NOMURA reflects a diverse range of human values to create comfortable environments that will improve consumers’ lives.

NOMURA also provides fulfilling, people-centric workplaces where our employees can realize their full potential.

Creating New ValueNOMURA explores new functions and possibilities for interaction between people, between people and items, and between

people and information to maximize customer traffic and create the best spaces for our clients’ businesses.

Our AimNOMURA improves the culture of people’s everyday lives by improving the environments where people spend their time.

It is through this work that we lead the environment creation industry.

Values Offered by NOMURA

NOMURA Provides Delight and Passion to CustomersNOMURA provides experiences that inspire delight and passion by creating highly attractive and inviting spaces in line with

consumers’ views, contributing to its clients’ business success and their customers’ (the end users’) enjoyment.

NOMURAʼs Aim

To be the only partner that any of our clients needThe NOMURA Group works together to provide, or act as an agent for, even more comprehensive space-related services for

our clients. By doing this, we will become an indispensable part of our clients’ business activities and value chain, making

NOMURA the only partner that any of our clients need.

Note: For the purposes of this text, “NOMURA” refers to the NOMURA GROUP as a whole.

Edit ing PolicyThe Annual Report 2019 includes both financial information, such as management policies and business strategies, and non-financial information, such as CSR initiatives, to enable our

shareholders, investors and a wide range of other stakeholders to deepen their understanding of NOMURA through an integrated presentation of important information. Photographs, charts

and tables have been used to illustrate the Company’s operations in a visual manner. Our Investor Relations website (URL on the right) provides more comprehensive information.

Forward-Looking StatementsThe Annual Report 2019 contains forward-looking statements regarding future performance that can be reasonably expected based on information available at the time this report

was prepared. Please be advised that NOMURA’s actual results and performance could differ materially from those anticipated by the forward-looking statements due to potential risks

and uncertainties.

Investor Relations Website “Investor Relations” on our website includes materials

about investor relations.

https://www.nomurakougei.co.jp/english/ir/

IR Library (Japanese only)

Securities Reports (Japanese only)

Financial Results (Japanese only)

Corporate Governance Guideline

(Japanese and English)

Supplementary Materials for Financial Results (Japanese only)

Corporate Governance Report

(Japanese and English)

Corporate Governance

Sanuki Pavillion, NationalIndustrial Exhibition (Takamatsu Expo)1928

SEIKO Mullion Clock1984

Store decorations,Takashimaya Osaka Store1947

Tsukuba Expo ʼ85 Government Pavilion/History Pavillion1985Tsukuba Expo ’85 Memorial Foundation

Japan Foreign Trade FairYokohama1949

Environment design atTokyo Sea Life Park1989

1st Osaka International Exhibition Venue1954

Museum of Meiji Restoration(Kagoshima City)1994

MISAKI KOEN Amusement Park(Ride Fair)1960

Eitaro Sohonpo window display design1964

Mandarin Bar,Mandarin Oriental Tokyo2005

Museum of YEBISU BEER2010

Shiseido Parlour Ginza8-Choume Store1997

Ikebukuro PARCO1969

Daiba Head Office (Tokyo)2008

Osaka Museum of Natural History1974

Attack on Titan Exhibition(Shingeki-no-Kyojin TEN)2014©Hajime Isayama, Kodansha, “Attack on Titan Exhibition” Production Partnership

120th anniversary celebration event:NOMURA Club2012

Live and disco STUDIO MONSIEUR1978

Name changed to NOMURA Co., Ltd.1945

1892 19501940

1900sEarly NOMURA provides promotion services for

exhibitions, frequently working on exhibitions at the Takashimaya Tokyo department store.

Contracted to work on the First All Japan Motor Show (now known as the Tokyo Motor Show).

Head office relocated to Shibaura, Minato-ku, Tokyo.

NOMURA works on themed pavilions, government pavilionsand other major pavilions at the Japan World Exposition (Expo ’70).

Reorganized as an incorporatedpublic company.

1990 1995 2000 2010 2015

1920sLate NOMURA begins working on events for sumo

halls and department stores in addition to exhibitions.

1942

1954

1966

1970

Sapporo Office opened (now Hokkaido Branch).1971

Okayama Office opened.1973

Fukuoka Office opened(now Kyushu Branch).1974

Northern Japan Division opened (now Tohoku Branch).1978

Registered with the Japan Securities Dealers Association (OTC-registered stocks).1989

Shinkiba Studio built.1984

Hiroshima Office opened (now Chugoku/Shikoku Branch).NOMURA works on major theme pavilions, the American pavilion and other major pavilions at the International Exposition, Tsukuba, Japan (Expo ’85).1985

NOMURA Co., Ltd. stocks listed on the second section of the Tokyo Stock Exchange.

1991

100th anniversaryNODE Co., Ltd. established.

1992

NOMURA SERVICE Co., Ltd. established (now C’s·three Co., Ltd.).

1994

NOMURA TECHNO Co., Ltd. established.1995

NOMURA DEVELOPMENT Co., Ltd. established.

1998

NOMURA (Beijing) Co., Ltd. established.2004

NOMURA Co., Ltd. stocks listed on the first section of the Tokyo Stock Exchange.NOMURA works on Japanese government pavilion and other major pavilions at the Expo 2005 Aichi Japan (Expo 2005).

2005

NOMURA receives accreditation to use PrivacyMark.Entire company receives ISO14001 certification.TESCO Co., Ltd. becomes a subsidiary through stocks acquired through a public tender offer (no longer a subsidiary due to share exchange in 2017).

Head office relocated to Daiba, Minato-ku, Tokyo

Entire company receives ISO9001 certification.NOMURA DESIGN AND ENGINEERING SINGAPORE PTE. LTD. established.

2006

2008

120th anniversary2012

RIKUYOSHA Co., Ltd. becomes a subsidiary (now a wholly-owned subsidiary) through stocks acquired through a public tender offer.

2014

20111892Founded by Taisuke Nomura in Takamatsu. NOMURA initially creates scene shifting services for theaters. Its base is moved to Tokyo in the 1910s.

’

NOMURA Point of Purchase Advertising Co., Ltd. established (now NOMURA PRODUCTS Co., Ltd.).

NOMURA DUO EAST Co., Ltd. established(now NOMURA DUO Co., Ltd.).

NOMURA PRODUCTS Co., Ltd. established. after NOMURA GIKEN Co., Ltd. is absorbed by NOMURA COMS Co., Ltd.

RIKUYOSHA Co., Ltd. and the Institute of Cultural Environments merge, maintaining the name RIKUYOSHA Co., Ltd.

2015

Opened the Kyoto Sales OfficeEstablished TNP Co., Ltd.Relocated the Osaka Office to Namba, Naniwa-ku, Osaka

Square Co., Ltd. becomes a wholly-owned subsidiary through stock acquisition.NODE (Shanghai) Co., Ltd. established.

2016

2017

Nomura becomes Official Supporter of Olympic and Paralympic Games Tokyo 2020 in the category of Design, Engineering and Construction Services for Interior Spaces and Exhibition Spaces.

2018

19801960 1970

Okinawa Office opened.

3NOMURA Co., Ltd. Annual Report 2019 NOMURA Co., Ltd. Annual Report 20192

Corporate Value Creation Process

History of NOMURA's Corporate Value Creation

A History of Over 120 Years: An Enduring Thirst for a Challenge

NOMURA can trace its roots back to the Taisho Period (1912 – 1926). Following the Company’s establishment in 1892, founder Taisuke Nomura created a large-scale mechanism for displaying chrysanthemum dolls at Tokyo’s national sumo hall. The bold imagination and ambition of this pioneering display, which amazed and delighted people at the time, have since expanded into a variety of fields. At the heart of NOMURA’s development lies a thirst for a challenge, an insistence on quality and a conceptual framework for pursuing customer satisfaction.

12-dangaeshi tiered chrysanthemum doll display at Ryogoku Sumo Hall Arena (stage conversion without intermission)

Around 1924

The First All-Japan Motor Show

1954©Japan Automobile Manufacturers Association, Inc.

Expo Osaka 1970

1970©Osaka Prefectural Government

Ni-Tele Clock (design by Hayao Miyazaki)

2006　

TOKYO Solamachi

2012　©TOKYO-SKYTREETOWN


EDOCCO Edo Culture Complex


NOMURA’s Business

Creating and vitalizing spaces

that provide delight and passion

For over 120 years, NOMURA’s creators and manufacturing specialists have shared their keen eye and strong skills

to create spaces that attract crowds of customers while meeting the wide-ranging needs of our clients. Times may change,

but the spirit of our work̶providing delight and passion to the consumers who visit our clients’ spaces̶remains unchanged.

Our main business is display work where we create interiors and exhibits for various facilities and events that attract customers. We provide total value, with services from investigations, planning and consulting to design, layout, production, construction, operation and management according to our clients’ strategies and operations for their spaces. We have expanded our facility and event vitalization, operation, management and customer attraction work into the food, beverage and retail industries, and are working to further expand our business domain in response to growing client needs in recent years.

A team of producers of spaces that attract customers

Business Workflow for Providing Comprehensive Client Support

Research, Planning and Consult ing

Research and analysis of the requirements and issues faced by

customer-oriented companies, and formulation of concept, business

and operating plans

Operation ManagementOperation, customer attraction support, revitalization and maintenance of facilit ies based on the business and operating plans

Design and LayoutDesign and layout based on the

concept and plans

Manufacturing and Construct ionConstruction of displays, interiors and facilit ies based on the design and layout

The NOMURA Group now works in a diverse range of markets and fields, from commercial facilities such as specialist stores and department stores to other facilities such as hotels and offices, as well as exhibitions for museums, art galleries and showrooms, and even promotional work such as expositions and events. The display market is constantly changing with the times ― commercial facilities have expanded from department stores to station buildings and shopping centers, museums have evolved from academic exhibitions to interactive learning, and we’re seeing a shift from amusement parks to theme parks.The NOMURA Group’s mission is to contribute to the prosperity of our clients’ business by attracting as many consumers as possible and providing them with delight and passion.

Diverse advances in the display world

The NOMURA Groupʼs Markets and Fields

Schools, Hospitals

Restaurants and BarsSpecialty Stores

Finance Stores

Department Stores

Shopping Centers

Stations, Terminal Facilities

Corporate PR Facilities, Showrooms

Trade Show Events

POP Advertising, NoveltiesMuseums,

Art MuseumsScience Museums,

Memorial Halls, Aquariums

Theme Parks, Amusement Parks

Amusement Facilities

Hotels, Wedding Facilities

Expositions, Cultural Events

Offices

CI-VI Signs

Specialty StoresSpecialty Stores

OthersOthers

Expositions and Creative EventsExpositions and Creative Events

MuseumsMuseums

Public Relations and Sales Promotion


Shopping CentersShopping Centers

Department and Merchandise Stores


Leisure FacilitiesLeisure Facilities


2016 2017 20182014（FY） 2015

1,540 1,560 1,6001,530

1,410

2016 2020 203020152014

4,000

6,000

2,404

1,341

1,974

2017

2,869

2018

3,119

A leading company in the display industry The market conditions of the display industry

Change in Scale of Display Market(billions of yen)

Market Share of the Top 30 Companies in the Display Industry

9.9%

6.7%

4.4%

4.4%

15.2%

Total Sales ofthe Top 30in FY2017

¥761.5 billion

Source: Yano Research Institute Ltd.

Olympic and Paralympic Games Tokyo 2020

Integrated resort (IR) concept

Projection mapping at Buke Yashiki, a historic samurai house（DENKEN PJM）

Panasonic Center TOKYO

AMADA MUSEUM

Hida Space Science Museum KamiokaLab

Hamleys Canal City Hakata

Moominvalley Park


NOMURA’s Business

J'S GATE DINING

Tokyo Midtown Hibiya

How the display industry is changing with the times

The display industry is estimated to be an around ¥1,560 billion industry as of FY2017, with the sales of the top 30 companies accounting for around ¥761 billion. The market is gradually recovering from the impact of events such as the global financial crisis and the Great East Japan Earthquake, and is expected to continue growing in future. 　The NOMURA Group’s market share in FY2017 was 15.2% of that occupied by the top 30 companies in the display industry―the highest market share in the industry. But there’s still more room to grow.　We work on over 14,000 projects a year, branching into a growing number of markets from household-name restaurants and shopping centers to exhibitions, events, museums and theme parks.

The market situation of the display industry is closely linked to that of industries such as construction, real estate, advertising and events. As Japan gears up for the Olympic and Paralympic Games Tokyo 2020, there has been an increasing number of overseas tourists, bringing an upswing in demand for creation of infrastructure, work in the tourism industry and vitalization of local communities. As a result, we are working on more large-scale projects than ever before, and are refining our space creation services to provide total value. We are also actively working on joint projects and cooperations with other companies to make digital technology and other cutting-edge technology a stronger part of our space presentation work, with the aim of using our position as a leading company in the display industry to contribute to further development of Japanese society.

NOMURA Company A Company B Company C Company D Others

Note: The above figures were calculated by NOMURA(Estimate)

Commercial and Other Facilities Segment*1

(large shopping centers, specialty stores, retail stores, offices, hotels, etc.)

Promotion Segment*2

(exhibitions, expositions, museum exhibitions, events, decorations, POP, etc.)

Exhibition Facilities Segment*3

(corporate PR facilities, showrooms, museums, science museums, factory tour facilities, etc.)

Display Business: ¥1,600 billion

Event Industry(conferences, culture, sports)

Advertising Industry(sales and promotional advertising, outdoor advertising, exhibitions, visuals, etc.)

Real Estate Industry(development, etc.)

Construction IndustryManufacturing

Industry (furniture and fixtures)

Printing Industry (POP advertising)

Market Domain and Related Industries

*1 Specialty store market, department store and mass retailing market, shopping center market, leisure facility market, etc.

*2 PR, sales and promotion market, museum and art gallery market, department store and mass retailing market*3 PR, sales and promotion market, museum and art gallery market, leisure facility market

Shift in Numbers of Overseas Visitors to Japan(millions of people)

Integrated resort (IR) concept

Source: Investigation of Consumption Trends among Overseas Visitors to Japan by the Japan Tourism Agency



Source of NOMURA's Corporate Value Creation

A network with the top industry share

Comprehensive Power

Where the NOMURA Groupʼs Domestic and Overseas Branches Are Located

*The above information is correct as of February 28, 2019.

Comprehensive power refers to the outstanding level of work we achieve through our extensive teamwork.The NOMURA Group consists of a large network of domestic and overseas offices and 12 group companies, which together occupy the largest share of the industry. We all work together to meet a wide range of needs.

The NOMURA Group has a vast number of planners and designers with a keen eye and boundless creativity. Our nationally and internationally acclaimed “power of creativity” produces one-of-a-kind value.

With a team of space creation specialists who turn a wide range of needs into reality, we are constantly refining and passing on our years of experience, making use of the latest technology and information to provide safe, high-quality services with outstanding value. We are also working actively to improve quality and safety throughout the display industry as a whole.

The three strengths that make us number one in the industryThe NOMURA Group has provided delight and passion to people throughout the ages ever since we were first

established in 1892.

We will build on our solid results to earn a high degree of trust from core companies and other promising companies,

making use of our three strengths: comprehensive power, power of creativity and power of production.

The NOMURA Group works on 14,645 projects for 2,821 clients every year. 79.9% of our sales are from clients who request work from us every year, showing the high level of trust that our clients have in us. Our domestic and overseas offices, our group

companies and our affiliated companies throughout Japan form a network that occupies the top share of the industry.

Percentage of net sales from repeat clients

79.9%

Number of contracted projects per year

14,645Number of clients

2,821companies

Domestic Branches in 10 CitiesTokyo (Head Office), Sapporo, Sendai, Nagoya, Osaka, Kyoto,

Okayama, Hiroshima, Fukuoka, Naha

Overseas Branches in 8 CitiesBeijing, Shanghai, Chengdu, Shenzhen, Hong Kong, Singapore,

Milan, New York

Group Companies in Japan Group Companies Overseas

● ● ● ●

● ● ● ●



NOMURA PRODUCTS Co., Ltd.Planning, design, manufacturing and construction of architecture, building redevelopment, interior

design and signs for commercial, public and cultural facilities and chain store spaces

NOMURA TECHNO Co., Ltd.Design, production, maintenance and operation

support for exhibition equipment, videos, graphics, information systems, etc.

Square Co., Ltd.Layout and supervision

of restaurants and chain stores

NOMURA (Beijing) Co., Ltd.Display design and construction; architectural decoration design and construction; design,

manufacturing and procurement of furniture and fixtures; provision of technical consulting and services

TNP Co., Ltd.

NOMURA DEVELOPMENT Co., Ltd.Development and operation of restaurants

and retail stores; planning, production, and sales of original products

C’s・three Co., Ltd.Integrated business services,

temporary staffing, facility operation

NOMURA DESIGN AND ENGINEERINGSINGAPORE PTE. LTD.

Design and construction of interiors for commercial facilities; design and construction

for exhibition facilities and events

Total chain store construction services: planning, layout and construction of store architecture, interior and kitchen spaces

NOMURA DUO Co., Ltd.

NODE Co., Ltd.Planning, design, and layout of commercial

facilities

RIKUYOSHA Co., Ltd.Art, design and book publishing

NODE (Shanghai) Co., Ltd.Architecture design consulting,

design for exhibitions, interiors and decorations

Display and promotion creation for spaces to attract visitors

2017/08/18

C:99　M:43DIC 182 （18 版）

C:74　M:67　Y:68DIC 544 （17 版）

K:85％

K:50％

株式会社ＴＮＰ

ロゴ

和文ロゴ

英字表記

ロゴ（モノクロ）

Comprehensive Power

Power of Creativity

Power of Production


Power of ProductionPower of Creativity

Creating new value in spacesWith fresh ideas and top-notch design skills, NOMURA’s creative team is constantly working to create new delight and passion.

At the awards ceremony for the Asia Pacific Interior Design Awards 2018


Source of Corporate Value Creation

“Digital innovation x space creation” is the theme of NOMLAB, our specialist organization for the development of our digital communications business. NOMLAB was behind the success of our Kiku no Machi Nihonmatsu (Nihonmatsu the Chrysanthemum City) Branding Project, in which we teamed up with the municipal government of Nihonmatsu City in Fukushima Prefecture to organize an interactive event featuring chrysanthemum-themed MR*. Our exhibit at DESIGNART TOKYO 2018 was tied in with this event.* Mixed reality, a medium that combines reality with virtual spaces.

NOMURA and Rhizomatiks Architecture formed a dream team for the Japan in Architecture exhibition held at Mori Art Museum in 2018, with each company bringing its amazing strengths in presentation, context creation, construction and space design to create an interactive installation. This was just the start of our partnership, and Team Notora (Japanese for “No & Rhi”) has produced a variety of other creations since.

A Thousand Flowers: The Wonder of a Single Connection—Our Exhibit at DESIGNART TOKYO 2018 Interactive Installation: Power of Scale

Number of planners and designers 560 First-class

registered architects 103Design awards won 48

*Employee numbers are for the entire NOMURA Group (including contracted employees) as of February 28, 2019.

*For 2018, including awards for which we placed

Winners of many prestigious design awards both in Japan and overseasThe NOMURA Group’s high level of creativity has long been recognized by many of Japan’s top design awards, and has been a driving force in the industry as a whole. In recent years, we have actively competed for awards throughout Asia and in Europe and North America, resulting in a string of overseas wins too. We will continue to merge tradition and innovation and use our creativity and the latest technology to share NOMURA’s spirit not only with Japan but with the whole world.

Construction management professionals pursuing a high standard of quality and safetyThe NOMURA Group’s 480 product directors are construction management professionals who oversee the whole process from project planning and management to production and direction, turning plans and designs into reality with a high standard of quality and safety.

Number of product directors 520 First-class building operation

and management engineers 258*Employee numbers are for the entire NOMURA Group (including contracted employees) as of February 28, 2019.

A strong network of affiliated companies to help NOMURA provide the best quality and safety.

To help us achieve quality and safety you can count on for every product and service we provide, we have a strong network of around 500 companies nationwide. We have joined together with our core affiliated companies to form the NOMURA Cooperative, which works to improve the quality and safety of the design industry as a whole, passes on technology and meets the needs of a diverse range of markets through a wide variety of technology.


Management Strategies

Message from the Management

Striving to become the Prosperity Partner that will be needed in 2022In 2012, the NOMURA Group established the NOMURA Long-Term Vision N22, which outlined our vision

about the company we would need to become in 10 years. By 2022, we need to be a Prosperity Partner, a partner

that not only creates spaces but shares a common goal with our customers and strategically develops and vitalizes

spaces to maximize our customers’ prosperity. We aim to become a space strategies partner for our customers,

creating delight and passion with them and developing spaces that will bring prosperity and enrich society.

Our path toward this goal was divided into three medium-term management plans. We are currently working

on the second step, the 2017-2019 Medium-Term Management Plan.

Superior Value Chain

Compete on a Whole New

Dimension

Be the Only Partner That All of

Our Clients Need

NOMURA Long-Term Vision

The Three Steps to Achieving N22

Building a solid foundation for steady, sustainable growth

Masaru WatanabeChairman of the Board & CEO

Shuji EnomotoPresident & CEO

FY2014 - FY2016: Superior Value ChainWe strove to leverage our basic values of quality, speed and cost-effectiveness to dominate the industry

and become the top space creation company in Japan, and to improve the value that we provide to our

clients by providing the NOMURA Group’s wide range of products and services as one-stop solutions.

We achieved great results through measures such as expansion of our product range through group-wide

collaboration, and strategic customer development activities.

FY2017 - FY2019: Compete on a Whole New DimensionIn the three-year period starting from 2017, we are rethinking the chain of values that our products and services provide from our customers’ perspective. We are proposing one-stop solutions that are unmatchable by our competitors to solve issues in our customers’ long-term business strategies.

FY2020 - FY2022: Be the Only Partner That All of Our Customers NeedWe will take charge of all operations related to our customers’ spaces, acting as agents for this work so

that our customers can focus on their core operations. NOMURA’s space strategy agents will become a

part of our customers’ business activities, making NOMURA an irreplaceable partner for our customers.


provide multi-pronged products and services. We will continue strengthening this framework to meet the wide-

ranging needs of our customers and provide total value as space creators.

We expect selling, general and administrative expenses to increase in 2019 and our projections for our

consolidated results in the 2019 fiscal year reflect this, with sales expected to increase by 3.3% year on year to

¥130 billion and operating income expected to increase by 1.6% to ¥9.3 billion. While there are an enormous

number of projects in the pipeline, the most important thing is to maintain our high standard of quality. Our

employees are our driving force, so the most crucial task at hand is to improve our working practices and help

each and every employee to take their work to the next level so that we can continue to bring the NOMURA

standard of quality to every project we work on. This will mainly take the form of staff training, improvement of

our working environments and measures to ensure that we have the capacity to carry out this vast volume of work.

We are also conscious that returning profits to our shareholders is one of the most important parts of doing

business, so each step we take will be preceded by a careful assessment of how the venture will grow our business,

generate net income attributable to shareholders of the parent (and thus dividends), strengthen our foundations

and lead to future expansion. Based on this policy, we plan to pay dividends of ¥25 per share in the 2019 fiscal year.

We also recently enacted a 2-for-1 stock split to improve the liquidity of our stock and expand our investor base.

The NOMURA Group will continue to improve and strengthen the frameworks of our business to generate strong

results on an ongoing basis, which will mean continuous high dividends for our shareholders.

Our aims for continuous growth from 2020 onwardUrban redevelopment is set to continue from 2020 onward, particularly in the Tokyo, Kansai and Chubu areas.

This will be an opportunity for the NOMURA Group to build on its strong performance in carrying out large-

scale projects as we meet the demand for large-scale commercial facilities and complexes that this redevelopment

will bring. We are also working on large-scale events such as Expo 2025 Osaka, Kansai, Japan, taking steps to

expand our work in the tourism industry through projects such as all-inclusive resorts and adopting digital

technology in our space creation and presentation projects through joint projects and cooperations with other

companies. In the immediate future, we will of course be working steadily to meet the special demand created by

the Olympic and Paralympic Games Tokyo 2020, and will turn the valuable opportunities and experience we gain

through this work into a solid foundation for steady, continuous growth of our business.

We would like to thank you, our shareholders and investors, for your ongoing support and encouragement,

and look forward to building on our relationship with you in future.

Management Strategies

Consolidated Forecast (millions of yen)

FY2017 FY2018 FY2019Forecast

Net Sales ¥115,841 ¥125,859 ¥130,000

Operating Income 8,171 9,154 9,300

Ordinary Income 8,373 9,341 9,400

Net Income 5,638 6,745 6,300

Net Income per Share (yen) 101.36 121.26 56.62*

ROE (Return on Equity) 15.1% 16.3％ 14 – 16%

Cash Dividends per Share Applicable to the Fiscal Year (yen)

45.0 52.0(including special dividend of ¥2)

25.0*

Dividend Payout Ratio 44.4% 42.9% 44.2%

Demand for space creation remains strong, bringing more increases in revenue and profits in FY2018Consolidated results for the 2018 fiscal year were outstanding in both sales and operating income. Sales　increased by 8.6% to ¥125.859 billion due to a number of successes such as large projects in various markets,

including the specialty store and amusement facilities markets. Ongoing refinements of our production systems

and improvements of profits in group companies led to a better ratio of gross profit to net sales, resulting in a

12.0% increase in operating income to ¥9.154 billion. Sales increased for the fifth year in a row and both

operating income and ordinary income increased for the tenth year, leading to dividends of ¥52 per share,

including a special dividend of ¥2 per share to celebrate 10 consecutive years of increases in consolidated

operating income.

Our role as a Tokyo 2020 Partner has been an opportunity to lay the foundations for growthThe Olympic and Paralympic Games Tokyo 2020 are now not far away. In June 2018, NOMURA signed a contract

to become an Official Supporter of the Tokyo Organising Committee of the Olympic and Paralympic Games in

the Design, Engineering and Construction Services for Interior Spaces and Exhibition Spaces category. We are

working on three initiatives to strengthen our foundations so that we can parlay this opportunity into steady,

continuous growth that lasts well beyond 2020.

Our first initiative is to strengthen the foundations of our business. In addition to strengthening our value as a

space creator for large-scale events through our work on preparation and decoration of the venues, we will be

building relationships with over 70 other partner companies and over 200 countries and regions that will be

participating in the Olympic and Paralympic Games Tokyo 2020, which will provide valuable opportunities to

expand our relationships with existing customers and grow our customer base.

Our second initiative will seek to boost our organizational competence, increasing employee engagement so

that our employees, teams and companies grow together, gain confidence and pride and make contributions to

society. The first step of this initiative has been the creation of a communal “refresh space” in our Daiba head

office. Employees of all stripes share their knowledge and experiences, supercharging our idea sharing process

with a variety of perspectives that extend beyond any one role or job description. This has breathed new life into

our communication and seen all of our employees grow further.

Our third initiative is to achieve greater recognition of our brand’s value. Our display business burst into the

public sphere after our involvement in the Japan World Expo in 1970 (Expo ’70), boosting the social value of the

industry and bringing about dramatic growth in our company. We will take Tokyo 2020 as an opportunity to show

the world how the display industry brings delight and passion, working to achieve greater recognition of the

value of our space creation business and NOMURA as a whole.

Our aims for the final year of our medium-term management planThe 2019 fiscal year will be the final year of our current medium-term management plan, which focuses on

competing on a whole new dimension.

We started the 2019 fiscal year with a large backlog of orders to meet growing demand in urban redevelopment

for complexes, theme parks and hotels for Japan’s growing tourist base and new offices to handle changes in

working practices. We are approaching these challenges by working to become a stronger NOMURA, working to

meet our customers’ needs more effectively in this changing market. We began our medium-term management

plan by reshuffling our organization from the conventional divisions by market to new divisions by function. This

has enabled company-wide optimization of the NOMURA Group’s resources and the building of a framework

that brings together the creative and product-based axes of our business̶two of NOMURA’s key strengths̶to

* We enacted a 2-for-1 stock split effective from June 1, 2019.

Message from the Management


ESG Information

Basic Corporate Governance Policy

Corporate Governance Structure (as of May 23, 2019)

NOMURA constantly aims for the best possible corporate governance, and works continually to upgrade its corporate governance.

NOMURA is dedicated to transparency and fairness in decision making from the standpoint of achieving sustained growth and long-term growth

of corporate value. In addition, NOMURA believes that increasing the vitality of management by effectively utilizing resources and reaching

decisions with speed and resolution is a key component of corporate governance. Numerous actions are taken to upgrade corporate governance

based on the following.

1. We respect the rights of shareholders and maintain equality for all shareholders.

2. We work with stakeholders, including shareholders, in a suitable manner that reflects their interests.

3. We disclose company information properly and ensure its transparency.

4. The Board of Directors and Board of Corporate Auditors fulfill their roles and duties based on their fiduciary responsibilities to shareholders and responsibility to provide explanations.

5. We hold constructive dialogs with shareholders who have investment policies that are consistent with the medium- to long-term interests of shareholders.

As a company with corporate auditors, NOMURA has elected 10 directors (including two outside directors) and three auditors (including two outside

auditors). Directors are subject to audits on the execution of their duties through their attendance at a Board of Directors’ meeting and the periodic

holding of a Board of Auditors’ meeting. The Corporate Auditors Office, charged with internal auditing, consists of three officers and audits business

units according to an internal auditing plan, while enhancing the Company’s audit function through collaboration with the Board of Auditors.

Head Office Divisions(Corporate Headquarters)

Each Department/Subsidiary

Corporate Auditors Office(Internal Auditing)

Audits

Audits Audits

Accounting Auditor

Appointment/Dismissal



Board of Auditors

General Meeting of Shareholders

Board of Directors

RepresentativeDirectors

ManagementCommittee

Reporting Reporting

Reporting

Reporting

Affiliates

Affiliates

Affiliates

(Outside Experts)Consulting Attorneys

Disclosure Committee

Investment EvaluationCommittee

Risk ManagementCommittee

Nomination and Compensation Committee

Inquiries/Reports

Appointment/Dismissal/Supervision

Inte

rnal

Co

ntro

l F

unct

ions

Board of DirectorsComprising 10 directors including two independent outside directors

and three auditors including two outside auditors, the Board of

Directors deliberates and decides important business matters, and

supervises the execution of business undertaken by directors.

Board of AuditorsComprising three auditors including two outside auditors, the Board of

Auditors investigates the status of operations and assets of the

Company and its subsidiaries according to the annual audit plan, and

exchanges information among the auditors in response to timely

reports from the accounting auditors and the Corporate Auditors Office.

Standing statutory auditors attend meetings of the Management

Committee and the Risk Management Committee to gather information

needed for audits and provide input when necessary.

Management CommitteeThe Management Committee meets twice a month to deliberate and

examine management matters and basic policy related to medium- and

long-term visions.

Nomination and Compensation Committee The Company has established the Nomination and Compensation

Committee as a body that deliberates matters related to the election,

promotion, demotion and dismissal of directors and auditors, as well as

matters associated with their compensation before submitting a report

to the Board of Directors. This committee is composed of four

members: the President, the Director who oversees a division of the

headquarters, an outside director and a standing statutory auditor.

Risk Management CommitteeThe Company has established the Risk Management Regulations,

which describe the risk management of the entire Group. Through the

appointment of a director and officers in charge of risk management

and periodic meetings of the Risk Management Committee, NOMURA

manages the risk of the entire Group in a comprehensive and

exhaustive manner.

Disclosure CommitteeNOMURA has a Disclosure Committee for the purpose of ensuring that

important company information is disclosed in a fair and timely manner,

as prescribed in the timely disclosure rules of the Tokyo Stock Exchange

and other guidelines. For significant material facts, the Disclosure

Committee first holds discussions. Next, the associated division submits

a proposal to the Board of Directors. After the approval of a resolution

or submission of a report, the information is promptly disclosed.

Independent Supervision

Outside Directors

Statutory Auditors

NOMURA’s fundamental policy is to nominate persons with diverse backgrounds as outside director and statutory auditor candidates. This is

because we think it is important to secure a diversity of knowledge, experience and skills of members of the Board of Directors as a means of

preserving the independence and objectivity of the board. Under this fundamental policy, we elected two outside directors and two statutory

auditors.

Name Reason for Appointment/Relationship with NOMURA Attendance at Board of Directors’ meetings during the 2018 fiscal year

Mitsuo SakabaMr. Mitsuo Sakaba was elected an outside director and registered as an independent officer because having served as Japan’s Ambassador to Vietnam and to Belgium, he is equipped with deep insights into politics and the economy from a global perspective.

10 of 10 meetings (100%)

Etsuko KomiyaMs. Etsuko Komiya was elected an outside director and registered as an independent officer because as a former experienced news anchor, she is highly knowledgeable in corporate business management and economic affairs.

10 of 10 meetings (100%)

Name Reason for Appointment/Relationship with NOMURA Attendance at Board of Directors’/Auditors’ meetings during the 2018 fiscal year

Yasuharu Fushimi

In addition to his specialist knowledge about taxation, Mr. Fushimi has been directly involved in the management of other companies. He was appointed as a statutory auditor and placed in the position of independent director with the hope that he will use his wealth of experience to strengthen NOMURA’s auditing framework.

Board of Directors’ meetings:8 of 8 meetings (100%)

Board of Auditors’ meetings:8 of 8 meetings (100%)（Appointed May 2018）

Tatsumi Yamada

Mr. Tatsumi Yamada was elected a statutory auditor and registered as an independent officer because he is equipped with a wealth of experience and outstanding knowledge as an expert on international accounting and as a member of the Certified Public Accountants and Auditing Oversight Board of the Financial Services Agency, and is in an objective position independent from the Company’s executive management.

（Appointed May 2019）



Director Compensation

Executives (as of May 23, 2019)

Rigorous Adherence to Compliance Requirements

Self-Assessment of the Board of Directors

NOMURA calculates the amount of compensation for each director and auditor in consideration of their title, whether they are a full-time or part-time director or auditor, as well as the nature of their duties, social standards, and a comparison to employee salaries, as well as the Company’s financial results, and within the scope of the maximum compensation approved by a resolution of a General Meeting of Shareholders. When determining the amount of compensation for each director and auditor, the Nomination and Compensation Committee deliberates on the proposed amount. The amount of compensation for each director is determined at a Board of Directors’ meeting, and that for each auditor is determined through discussion between auditors.

Execution of Directorsʼ Duties

NOMURA ensures that directors’ duties are executed in an appropriate and efficient manner through the process of defining their official authority and decision-making rules in internal regulations such as the Board of Directors Regulations and the Organization Resolution Regulations. During the fiscal year under review, a Board of Directors’ meeting was held on 10 occasions to perform supervision with a view to ensuring that directors’ and employees’ duties are executed in conformity with laws and ordinances, as well as the Articles of Incorporation.

Execution of Auditorsʼ Duties

During the fiscal year under review, a Board of Auditors’ meeting was held on nine occasions to broadly exchange opinions, deliberate and review the reasonableness of the Company’s business management, as well as its compliance, thereby issuing advice and recommendations to the management when appropriate. Auditors attended Board of Directors’ meetings and Management Committee meetings, among other significant meetings, to rigorously monitor the execution of duties by directors.

Establishment of Risk Management Platform

During the fiscal year under review, a Risk Management Committee meeting was held on seven occasions to identify significant risks for NOMURA’s business management, ascertain and analyze such risks, and consider measures to address them, thereby seeking to avoid risks in our business activities. To thoroughly communicate the Group’s management philosophy and code of conduct, as well as points to be borne in mind under laws and ordinances, we created and distributed the Compliance Guide.

NOMURA implemented various training programs for the purpose of ensuring rigorous adherence to compliance requirements. We have a whistleblowing desk in place at our Head Office and an external lawyer’s office in order to promptly discover and correct any act that breaches the Company’s regulations or is unacceptable under normal social conventions, and to preserve the organization’s social credibility. Incidents that occurred during the fiscal year under review were promptly investigated before being reported to corporate auditors.

In February 2019, the 12 members of the Company’s Board of Directors, comprising all directors and statutory auditors including outside directors and outside statutory auditors, took the FY2018 Board of Directors Assessment Questionnaire. The survey mainly dealt with topics such as the composition and operation of the Board of Directors as well as provision of information to outside officers. All 12 members signed their questionnaires and identified themselves. The results of the survey yielded comments such as “Active discussions are taking place”, and “Improvement is seen in prior explanation of the meeting agenda to outside officers.” The Company’s Board of Directors retained an assessment level of “Largely satisfactory”.

Front row, from left: Shuichi Makino, Kiyotaka Okumoto, Shuji Enomoto, Masaru Watanabe, Masahiro Nakagawa, Tadashi OwadaBack row, from left: Yasuharu Fushimi, Etsuko Komiya, Shinji Sakai, Fukuzou Okuno, Mitsuo Sakaba, Masanori Sato, Tatsumi Yamada

ESG Information


Total Amount of Remuneration per Classification of Executives, Total Amount of Remuneration by Category, and Number of Executives

PositionTotal amount of remuneration

(millions of yen)

Total amount of remuneration by type (millions of yen)Number of recipientsBasic

remuneration Stock options Bonuses Retirement benefits

Directors (excluding outside directors) 369 281 ─ 88 ─ 8

Outside directors 18 18 ─ ─ ─ 2

Auditors (excluding statutory auditors) 28 28 ─ ─ ─ 2

Statutory auditors 18 18 ─ ─ ─ 3

Notes: 1. As of February 28, 2019, NOMURA had eight directors and four auditors. 2. The annual compensation limit established at the General Meeting of Shareholders as of February 28, 2019 is ¥500 million for directors and ¥30 million for outside directors (decided at

the 78th General Meeting of Shareholders on May 21, 2015), and ¥60 million for auditors (decided at the 69th General Meeting of Shareholders on May 12, 2006).

Board of Directors Chairman of the Board & CEO Masaru Watanabe

President & CEO Shuji Enomoto

Senior Vice Presidents Masahiro Nakagawa General Manager – Corporate Headquarters

Kiyotaka Okumoto General Manager – Business Headquarters

Board Directors Tadashi Owada General Manager – Business Unit 2, Business Headquarters

Shuichi Makino General Manager – Human Resource Management Department, Corporate Headquarters

Fukuzou Okuno General Manager – Creative Department, Business Headquarters

Shinji Sakai General Manager – Business Unit 1, Business Headquarters

Outside Directors Mitsuo Sakaba

Etsuko Komiya

Auditors Standing Statutory Auditor Masanori Sato

Statutory Auditors Yasuharu Fushimi

Tatsumi Yamada

Executive Officers Senior Officers Makoto Kanehira

Akihiko Yamazaki

Katsuhiko Yoshida

Yuki Doi

* At NOMURA Co., Ltd., we offer "Director Class" allowances for our highest-ranking intellectual and technical staff, who are considered assets of the company, to create an environment that stimulates intellectual and technological advancement.

Officers Hironobu Takeda Yoshiaki Yamaguchi

Koichi Matsuo Yujiro Kawanishi

Takayuki Yoshida Takahiro Mukai

Makoto Kurihara Tatsuya Sudo

Kiichiro Yasumi Asako Harayama

Director Class* Shigechiyo Suzuki Kenji Tomibayashi

Ryu Kosaka Yuji Hirata


Quality and Safety

The Environment

ESG Information

Corporate Social Responsibility (CSR)

Quality, the Environment and Safety

We are committed to doing everything we can to develop professional employees in every area and at every level by gathering and sharing all of the knowledge, technology and know-how required to achieve the NOMURA Group’s high standards of quality and safety. As part of this effort, we opened the NOMURA Training Center in January 2016 as a base for us to work together with our af�liated companies to improve our quality and safety. The Center’s Training Lab simulates all stages of our processes in an environment resembling an actual site, from various forms of scaffolding and reinforced concrete foundation samples that are actually used on construction sites, to morning meetings and risk prediction meetings. In addition to providing legally mandated training according to the Industrial Safety and Health Act, this facility creates effective and sustainable training frameworks. Speci�c measures include interactive hazard training where speci�c examples of accidents and incidents are shared, and training where specialist instructors from various �elds provide hands-on training in their craftsmanship.

The Center also carries out BIM* initiatives to improve productivity, including BIM seminars and information exchange sessions for employees, a training room for self-study about BIM and a 3D space point group scanner.

As the NOMURA Group uses extremely large volumes of wood and wood products in its business activities, we believe that we have an environmental and social responsibility to protect the forests by ensuring that Fair Wood*1 (wood that is sustainable and complies with laws) is sourced for our projects. Our CSV Council*2 works according to the NOMURA Group’s Policies for Quality, the Environment and Safety, so that all employees can provide added value to our customers through daily business activities from the standpoint of environmental conservation. As part of this project, we announced the NOMURA Timber Procurement Guidelines, including the Declaration of Support for the Fair Wood Campaign. In May 2017, the Japanese government passed the Act on Promoting the Distribution and Use of Legally Harvested Wood (nicknamed the “Clean Wood Act”). NOMURA is strengthening its fair wood initiatives to comply with this law, with activities ranging from in-house and industry-wide workshops to interactive tours connecting creators with the forest.

*1 Fair Wood: Jointly proposed by the Fair Wood Partners (the Global Environmental Forum and FoE Japan, an international environmental nongovernmental organization (NGO)), this term refers to timber and wood products whose production takes into account the forest environment of the logging site and its effect on the local communities.

*2 The CSV (Creating Shared Value) Council is an organization that promotes company-wide efforts to achieve social contributions in NOMURA’s daily business activities.

We develop professionals who can achieve NOMURA’s high standards in quality and safety.

We support the use of wood from known origins.

The NOMURA Training Center, an Interactive Training Facility �Declaration of Support for the Fair Wood Campaign: The “NOMURA Timber Procurement Guideline” �

NOMURA is carrying out a wide range of initiatives to promote the use of wood.

The NOMURA Groupʼs Policies for Quality, the Environment and Safety

Local materials used in a historic shrine’s cultural centerEDOCCO Edo Culture Complex（2018)The 1300th anniversary of the historic Kanda Myojin Shrine was commemorated with the opening of a new cultural center called EDOCCO. The Tama area of Tokyo is said to have been associated with Masakado, the enshrined deity of the shrine, and so materials from the area were actively used in the creation of this space.

Promoting activities that connect creators with treesLocal “Forest Connection” toursTours of FSC® certified forests and timber in Tama, Tokyo PrefectureNOMURA has begun organizing tours of timber-producing areas in an initiative to show creators and construction and business clients where their timber comes from. The initiative also provides opportunities for them to meet business owners who are highly knowledgeable about timber and the forests where it comes from. Our aim is to encourage people to use wood and inspire widespread creation of wood-based spaces.

Winners of an honorable mention at the Wood City Tokyo Model Building AwardsNIHONBASHI TOYAMA（2016）In January 2019, NOMURA received an award from the Tokyo Metropolitan Government for exploring new possibilities for the use of wood, and for using wood innovatively in a space that others in the industry can look to as a model. The award-winning space was Nihonbashi Toyama-kan, a store showcasing specialties from Toyama Prefecture. A range of wood products from Toyama, including timber, wood materials and processed wood products, were carefully selected and procured, and local craftspeople brought their distinctive techniques to the production of the floor materials, furniture and decorations.

Training at the Training Center (results for 2018)

114 training sessions held

1,008 attendees

* Building information modeling, a method in which information on a building, including the structure, design, �nish and price, are placed in a three-dimensional digital model. This is useful in every step of the building process, from design and construction to management.

Measurement using a 3D space point group scanner, and the measurement screen A seminar at NOMURA Training Center

NOMURA Training Center

In keeping with our management philosophy, we recognize that assuring quality, preserving the environment and maintaining safety and health are our corporate duty.We see these as important pillars of our business endeavors and have constructed and continue to refine an integrated management system encompassing quality, the environment, and health and safety.

Complying with all relevant laws and regulations and other societal requirements

1 Separating and recovering industrial waste materials and making ongoing efforts to recycle resources

4Further improving quality standards in order to provide customers with satisfaction and peace of mind

2 Ensuring the safety and health of all involved in our operations, and realizing a comfortable workplace environment

5Proposing environmentally friendly projects and designs to prevent environmental pollution

3 Providing health and safety education and preventing accidents6

Declaration of Support for the Fair Wood Campaign: The “NOMURA Timber Procurement Guideline”We will actively promote the use of Fair Wood timber:1. Domestic timber and regional timber (a shorter travel distance

between the consumer and the logging site)2. Timber bearing a trusted forestry certi�cation (FSC, PEFC,

SGEC, etc.)3. Wood building material whose raw material is derived from

scrap wood (recycled or reused)

We will ensure that these types of timber are not used:1. Timber from endangered species of trees2. Timber whose legality (logging, production and

transaction) cannot be determined3. Timber whose country of origin or tree species cannot be

determined

(Total)


ESG Information

Efforts to Improve NOMURA’s Social Value

Initiatives for Cultural Development and Contribution to Local Communities

Initiatives for Employee Development and Creation of Excellent Working Conditions

The introduction of national policies such as regional revitalization and COOL JAPAN has drawn attention to local manufacturing, but there have been a number of obstacles such as demand and a lack of successors for current business leaders. We realized that we can help by using the mindsets and know-how that we have amassed during our 120 years in business to create a space for the traditional manufacturing practices of each region. In addition to measures for customers in Japan, we have overseas strategies in place to create a good business cycle in which spaces with a high degree of hidden extra value can be delivered.

Providing a place for traditional craftsmanship from around Japan

JAPAN VALUE Project� �

Gold leaf from Ishikawa Prefecture was used on the walls of Grand Prince Hotel Takanawa.Work by expert plasterers completed the look, creating a space that exudes traditional

Japanese beauty.

The Nest Room, a women-only break room opened at the request of our female employees.

The NOMURA Group has continually supported communities that were damaged in the Great East Japan Earthquake in 2011, carrying out manufacturing and space creation work that we are uniquely equipped to offer such as workshops that make use of local resources. In 2013 we began a project in which people from Tohoku, the region that was damaged by the earthquake, and Tokyo make and exhibit a light box. Light boxes from this project were displayed in Ishinomaki City (Miyagi Prefecture) and in NOMURA’s head office in 2018 as part of the official Tokyo 2020 program. A total of 2,500 people have participated in the project in the six years it has run. Each participant is the star of their own little part of the big light box, and their collective objet d’art becomes a vibrant street decoration that brings the people of Ishinomaki together.

Contributions to communities damaged by disasters

Minna Tsunagaro! (Everybody Come Together!) Project �

The “Light Box” is a craft kit devised by artist Taizo Matsumura, which has a myriad of colored patterns when held up to the light that differ depending on how it was made.

With Tokyo 2020 on the horizon, we carried out inclusivity tests and held LGBT-friendliness seminars for employees in the NOMURA Group in February 2019. Speakers with disabilities visited from the Japan Universal Manners Association and taught our employees how to provide accessible, respectful and dignified experiences for elderly people and people with disabilities. The seminars have given us all a deeper understanding of the importance of respecting the many differences between people (diversity) and making sure that everyone has a place at the table (inclusivity), which we will apply to our design and layout work so that our spaces and exhibits provide a comfortable experience for everyone.

Promoting inclusivity in society and building it into our business activities

Inclusivity and LGBT-Friendliness Seminars �

An inclusivity and LGBT-friendliness seminar

NOMURA is actively involved in activities to promote and raise recognition of sports, including working with a sports federation encompassing 10 sports and providing various forms of support to athletes representing Japan. One of our own employees, Tetsuo Nishizaki, is a para powerlifter (male, 54kg class) who competed in the Rio de Janeiro 2016 Paralympic Games. In addition to competing internationally, Mr. Nishizaki has been appointed as a Para Sports Messenger by the Nippon Foundation Paralympic Support Center. He has spoken at events all over Japan to promote para sports and inspire more inclusive societies, and has developed close ties with local communities through his work. His work makes him an important part of NOMURA’s own sports initiatives, and we hope that his achievements will get other employees interested in sports and inspire a health-conscious mindset throughout the company.

Promoting sports and inspiring more inclusive societies

Contribution to Sports Events and Support of Para Athletes �

We are conscious that a company is nothing without its employees, and are carrying out various initiatives to ensure that our employees remain healthy and happy. In addition to a program to support employees taking maternity and parental leave, we have published a Carers’ Handbook to address the concerns of the growing number of employees who are caring for a family member, opened a women-only break room at the request of our female employees and begun inviting experts to give health seminars. Each year, we add new initiatives to our extensive range.

Creating healthy workplaces

Initiatives for a Good Work-Life Balance �

Photographed by Hiroki Nishioka

We are proud to report that one of our own employees, Tetsuo Nishizaki, beat both his personal best and the national record at the 2nd Para Powerlifting

Challenge Cup Kyoto in April 2019. Competing in the 54kg class, Mr. Nishizaki won at 140kg and lifted 142kg in his 4th attempt at the Power Lift.

Percentage of Employees Returning to the Workplace after

Maternity Leave or Childcare Leave during the Last 5 Years

(FY2014-FY2018)

100%

In June 2018, we opened RE/SP, a communal “refresh space”, in our head office, with the design, layout and production handled entirely by Nomura employees themselves. Comprising five zones—an exercise zone, a conversation zone, a relaxation zone, a concentration zone and a food and drinks zone—this is a space where every employee can refresh themselves physically and mentally while building stronger relationships with their colleagues and sparking new creativity.

Creating a communal space to spark new creativityRE/SP, Our “Refresh Space” �

RE/SP, our “refresh space”



Consolidated Ten-Year Financial Summary

Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2018

Financial Indicators (millions of yen)　 (thousands of U.S. dollars)

Net Sales ¥ 80,436 ¥ 90,105 ¥ 87,464 ¥ 101,316 ¥ 98,410 ¥ 103,129 ¥108,340 ¥ 115,561 ¥ 115,841 ¥ 125,859 $ 1,135,196

Gross Profit 11,455 12,072 11,957 13,733 15,960 17,281 19,760 22,722 23,129 26,062 235,075

Selling, General and Administrative (SG&A) Expenses 10,610 10,952 10,741 11,521 11,646 12,069 13,726 15,113 14,957 16,908 152,509

Operating Income 845 1,120 1,215 2,212 4,313 5,211 6,033 7,608 8,171 9,154 82,566

Ordinary Income 1,282 1,288 1,325 2,383 4,381 5,434 6,200 7,809 8,373 9,341 84,258

Net Income Attributable to Shareholders of the Parent 407 403 604 1,242 1,845 3,193 3,841 5,056 5,638 6,745 60,845

Orders Received 82,422 86,808 87,951 102,061 96,399 102,277 107,997 114,733 113,156 149,361 1,347,179

Order Backlog 25,089 23,838 26,244 29,448 30,033 31,581 33,584 35,184 35,132 60,855 548,886

Total Assets 53,011 52,861 54,344 58,340 59,477 62,805 65,256 72,361 76,037 88,846 801,360

Trade Notes and Accounts Receivable 20,319 19,609 20,850 14,354 16,327 19,518 20,472 20,072 26,777 31,427 283,462

Inventories 6,107 6,927 8,277 8,098 8,652 8,644 8,754 7,479 6,359 9,115 82,218

Net Assets 24,907 24,679 24,883 26,044 27,459 29,992 31,619 35,268 39,344 43,311 390,649

Capital Investment 271 134 369 324 327 1,264 1,165 239 619 651 5,873

Depreciation 861 819 797 890 839 802 1,012 995 895 837 7,554

Free Cash Flow (1,297) 1,959 (1,451) 12,400 (1,314) 7,389 4,874 10,158 1,106 8,821 79,565

Financial Data (%)

Gross Profit to Net Sales 14.2 13.4 13.7 13.6 16.2 16.8 18.2 19.7 20.0 20.7 —

Operating Income to Net Sales 1.1 1.2 1.4 2.2 4.4 5.1 5.6 6.6 7.1 7.3 —

Ordinary Income to Net Sales 1.6 1.4 1.5 2.4 4.5 5.3 5.7 6.8 7.2 7.4 —

Net Income to Net Sales 0.5 0.4 0.7 1.2 1.9 3.1 3.5 4.4 4.9 5.4 —

Selling, General and Administrative Expenses to Net Sales 13.2 12.2 12.3 11.4 11.8 11.7 12.7 13.1 12.9 13.4 —

ROA (Return on Assets) 2.5 2.4 2.5 4.2 7.4 8.9 9.7 11.4 11.3 11.3 —

ROE (Return on Equity) 1.6 1.6 2.4 4.9 6.9 11.1 12.5 15.1 15.1 16.3 —

Equity Ratio 46.9 46.6 45.8 44.6 46.2 47.8 48.5 48.7 51.7 48.7 —

Trade Receivables Turnover (times) 4.3 4.5 4.3 5.8 6.4 5.8 5.4 5.7 4.9 4.3 —

Inventory Turnover (times) 14.4 13.8 11.5 12.4 11.8 11.9 12.5 14.2 16.7 16.3 —

Dividend Payout Ratio 111.0 111.6 73.9 44.9 48.4 45.3 43.4 44.0 44.4 42.9 —

Per Share Data (yen)

Net Income per Share ¥ 7.21 ¥ 7.17 ¥ 10.82 ¥ 22.25 ¥ 33.09 ¥ 57.41 ¥ 69.05 ¥ 90.90 ¥ 101.36 ¥ 121.26 $ 1.09

Net Assets per Share 439.71 440.83 445.62 466.45 493.59 539.12 568.37 633.96 706.96 778.11 7.01

Cash Dividends per Share Applicable to the Fiscal Year 8 8 8 10 16 26 30 40 45 52 0.47

Employee Data

Number of Employees 1,418 1,413 1,401 1,385 1,425 1,474 1,485 1,568 1,579 1,745 —

Net Sales per Employee (thousands of yen) ¥ 56,725 ¥ 63,768 ¥ 62,429 ¥ 73,152 ¥ 69,060 ¥ 69,965 ¥ 72,956 ¥ 73,700 ¥ 73,363 ¥ 72,125 $ 650,542

Operating Income per Employee (thousands of yen) 596 792 867 1,597 3,027 3,535 4,063 4,852 5,175 5,245 47,316

Net Income per Employee (thousands of yen) 287 285 431 897 1,294 2,166 2,586 3,225 3,571 3,865 34,868

Notes: 1. Return on Assets (%) = (Ordinary Income / Average Total Assets) ×100, Return on Equity (%) = Net Income / Average Equity ×100, Trade Receivables Turnover (Times) = Net Sales / Average Trade Receivables, Inventory Turnover (Times) = Net Sales / Average Inventories, Dividend Payout Ratio (%) = (Cash Dividends per Share Applicable to the Year / Net Income per Share) ×100, FY2012 was a 12.5-month reporting period, owing to a change in the fiscal year-end.

2. U.S. dollar amounts represent conversions from yen, for convenience only, at ¥110.87=US$1. 3. Figures for the real estate business and the restaurant and product retail business are excluded in “Orders Received” and “Order Backlog” because the concept of orders received is different. 4. The number of employees includes only regular employees.

Analysis of Selected Financial Indices　

(millions of yen)Operating Income

While expenses increased due to an increase in personnel expenses as a result of expanded hiring, relocation costs and increased rents to improve the workplace environment, as well as advertising fees, these were offset by an increase in net sales and an improvement in the gross profit margin. As a result, our operating income increased by ¥982 million on the previous year, reaching ¥9,154 million.

FY2017

FY2018

9,154

8,171

-797

-1,153Decrease due to an increase in expenses

933

Increase in gross profit due to a rise in net sales 2,000

Improvement of 0.7 percentage points in the gross profit margin

Decrease due to an increasein personnel expenses

(yen)Cash Dividends per Share

The dividends for the year are decided based on the amount of consolidated net income attributable to shareholders of the parent for the year, along with factors such as the enhancement of the Company’s management base and future business expansion. For FY2018, we decided to pay a total dividend of ¥52.0, comprising an ordinary dividend of ¥50.0 together with an additional commemorative dividend of ¥2.0 to mark 10 consecutive years of increased consolidated operating income.

2018

52

2017

45

201620152014

2630

40

(FY)



Review of Operations by Market Segment Fiscal 2018

Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Specialty StoresOrders Received ¥31,613 ¥33,893 ¥37,155 ¥ 44,165 ¥43,134 ¥ 44,053 ¥ 44,911 ¥ 40,719 ¥ 34,742 ¥ 44,240Order Backlog 5,995 4,746 7,678 8,275 9,391 9,839 9,730 9,720 5,830 7,941


Orders Received 5,576 6,119 6,133 7,559 6,787 7,042 7,128 5,168 6,767 5,711Order Backlog 917 827 739 978 1,500 1,413 926 934 1,536 1,538

Shopping CentersOrders Received 6,055 11,748 6,923 9,013 5,061 8,510 9,329 13,579 10,382 18,613Order Backlog 1,799 5,253 3,436 4,395 2,621 4,023 4,501 6,452 3,481 8,714


Orders Received 15,796 15,363 15,289 16,710 17,320 17,128 19,143 17,137 21,594 18,426Order Backlog 3,733 3,335 3,539 4,984 4,484 3,274 3,294 2,904 4,734 5,134

MuseumsOrders Received 11,143 6,352 6,235 6,330 8,773 10,217 7,588 8,595 12,516 8,150Order Backlog 7,679 6,400 3,654 2,546 4,325 7,152 5,984 5,728 7,175 6,558

Leisure FacilitiesOrders Received 4,891 3,760 4,410 8,983 6,475 4,846 7,427 9,823 11,556 15,703Order Backlog 2,267 1,039 1,990 4,667 3,253 1,179 3,325 3,125 6,815 9,985

Expositions and Creative Events

Orders Received 997 1,219 686 822 215 1,047 959 1,595 459 2,326Order Backlog 689 146 374 350 148 717 674 237 89 1,579

OthersOrders Received 6,348 8,351 11,116 8,475 8,631 9,431 11,508 18,114 15,137 36,189Order Backlog 2,006 2,087 4,830 3,250 4,306 3,981 5,147 6,080 5,467 19,402

TotalOrders Received ¥82,422 ¥86,808 ¥87,951 ¥ 102,061 ¥96,399 ¥102,277 ¥107,997 ¥114,733 ¥113,156 ¥149,361Order Backlog 25,089 23,838 26,244 29,448 30,033 31,581 33,584 35,184 35,132 60,855

Orders Received and Order Backlog by Market Segment over the Past 10 Years (millions of yen)

Notes: 1. FY2012 was a 12.5-month reporting period, owing to a change in the fiscal year-end. 2. Figures for the real estate business and the restaurant and product retail business are excluded in “Order Received” and “Order Backlog” because the concept of orders received is different.

Notes: 1. FY2012 was a 12.5-month reporting period, owing to a change in the fiscal year-end. 2. The real estate business and the restaurant and product retail business are included in the “Others” segment. The real estate business was excluded from figures for FY2014 due to the sale of the relevant subsidiary. 3. Net sales by business segment (FY2018): display business (¥123,639 million)/restaurant and product retail business (¥2,220 million).

Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Specialty Stores ¥29,529 ¥35,142 ¥34,224 ¥ 43,567 ¥42,017 ¥ 43,606 ¥ 45,020 ¥ 40,729 ¥ 38,632 ¥ 42,130

Department and Merchandise Stores 6,297 6,209 6,221 7,321 6,265 7,129 7,614 5,160 6,164 5,709

Shopping Centers 7,300 8,294 8,740 8,054 6,835 7,108 8,851 11,628 13,353 13,381

Public Relations and Sales Promotion 15,209 15,761 15,085 15,265 17,820 18,338 19,124 17,527 19,764 18,026

Museums 7,305 7,631 8,981 7,439 6,994 7,389 8,745 8,851 11,070 8,767

Leisure Facilities 4,610 4,987 3,459 6,307 7,889 6,920 5,280 10,023 7,866 12,533

Expositions and Creative Events 1,045 1,762 459 846 417 479 1,001 2,032 606 835

Others 9,137 10,315 10,291 12,513 10,171 12,156 12,700 19,608 18,383 24,475

Total ¥80,436 ¥90,105 ¥87,464 ¥101,316 ¥98,410 ¥103,129 ¥108,340 ¥115,561 ¥115,841 ¥125,859

Net Sales by Market Segment over the Past 10 Years (millions of yen)

Specialty Stores MuseumsDepartment and Merchandise Stores Leisure FacilitiesShopping Centers Expositions and

Creative EventsPublic Relations and

Sales Promotion Others

Net

Sal

es N

et Sales Op

erat

ing

Resu

lts Operating Results

Net sales increased over the last year due to projects to open multiple new stores, as well as apparel and brand store projects.

Despite projects at history and natural history museums, net sales decreased due to the fall in the number of large-scale projects compared to the previous year.

¥42.1 billion ¥8.7 billion

(Up 9.1% YoY) (Down 20.8% YoY)

ISETAN MiRROR Terrace Mall Shonan Heijokyu Izanai-Kan

Despite projects to renovate and decorate major department stores, net sales decreased due to a fall in the number of large-scale projects compared to the previous year.

¥5.7 billion

(Down 7.4% YoY)

Odakyu Department Store Machida Renovation

Net sales increased over last year due to numerous projects including theme park exhibition work and the renovation of hotels at tourist attractions in Japan.

¥12.5 billion

(Up 59.3% YoY)

Hilton Fukuoka Sea Hawk

Net sales remained flat from last year. NOMURA’s projects included station buildings and shopping centers next to major metropolitan train stations.

¥13.3 billion

(Up 0.2% YoY)

M-INT KOBE

Net sales increased over last year due to exhibition projects at public events.

¥0.8 billion

(Up 37.8% YoY)

Tower of the Sun Rebirth Project

Despite expo, showroom and corporate PR facility projects for manufacturers of electronics, beverages, and housing facilities, net sales decreased over last year, which benefited from net sales for the Tokyo Motor Show.

¥18.0 billion

(Down 8.8% YoY)

YAMAHA INNOVATION ROAD

Net sales substantially increased over last year due to numerous office projects as well as projects at nursery school and airport-related facilities.

¥24.4 billion

(Up 33.1% YoY)

Sega Sammy Group head office relocation project



Management Discussion and Analysis 2018 Fiscal Year

2018

8,17

1

2017201620152014

6,03

3

4,31

3 5,21

1

2013

7.17.1

9,15

4

7.37.35.65.6

7,60

8

6.66.65.15.1

4.44.4

2018

115,

841

2017201620152014

108,

340

98,4

10

103,

129

2013

20.020.0

125,

859

20.720.7

18.218.2

115,

561

19.719.7

16.816.816.216.2

2018

45

52

2017201620152014

30

16

26

2013

44.444.4

42.942.9

43.443.4

40

44.044.045.345.348.448.4

2018

76,0

37

2017201620152014

65,2

56

59,4

77

62,8

05

2013

39,3

44

88,8

4643

,311

31,6

19

72,3

6135

,268

27,4

59

29,9

92

2018

113,

156

2017201620152014

107,

997

96,3

99

102,

277

2013

35,1

32

149,

361

60,8

55

33,5

84

114,

733

35,1

84

30,0

33

31,5

81

2018

5,63

8

2017201620152014

3,84

1

1,84

5

3,19

3

2013

4.94.9

6,74

5

5.45.4

3.53.5

5,05

6

4.44.4

3.13.1

1.91.9

2018

1,10

6

2017201620152014

4,87

4

10,1

58

8,82

1

(1,3

14)

7,38

9

2013

▪Operating Income/ Operating Income to Net Sales(millions of yen / %)

▪Net Sales/ Gross Profit to Net Sales(millions of yen / %)

▪Cash Dividends per Share/▪Dividend Payout Ratio(yen / %)

▪Total Assets/▪Net Assets(millions of yen)

▪Orders Received/▪Order Backlog(millions of yen)

▪ Net Income Attributable to Shareholders of the ParentNet Income to Net Sales

(millions of yen / %)

Free Cash Flow(millions of yen)

(FY) (FY)

(FY)

(FY) (FY)

(FY) (FY)201820172016201520142013

11.311.3

9.79.78.98.9

7.47.4

15.115.1

11.311.3

16.316.3

12.512.5

11.411.4

15.115.1

11.111.1

6.96.9

(FY)

Note: Figures for the real estate business and the restaurant and product retail business are excluded in “Orders Received” and “Order Backlog” because the concept of orders received is different.

Net Income Attributable to Shareholders of the ParentNet income attributable to shareholders of the parent was up ¥1,106 million, or 19.6%, from the previous fiscal year at ¥6,745 million. This increase was attributable to the recording of a gain on sales of property and equipment and other extraordinary income due to the sale of real estate held by the Company, improving net income to net sales by 0.5 percentage points to reach 5.4%.

Operat ing Results by Business SegmentDisplay BusinessSales declined in the museums market where there were few large-scale projects. However, growth was seen in several markets: multi-store opening projects and apparel and brand store projects in the specialty stores market; theme park decoration and environment presentation projects, as well as the building and renovation of hotels in the leisure facilities market; and large-scale corporate office projects, shared office projects, and airport facilities projects in the “Others” market. As a result, net sales in the display business rose 9.2% from the previous fiscal year, to ¥123,639 million, and operating income climbed 13.3%, to ¥9,169 million.

Restaurant and Product Retail BusinessDespite engaging in gift shop operations at art museums and science museums, and restaurants and specialty store operations at commercial facilities, net sales decreased 15.7% from the previous fiscal year, to ¥2,220 million, and operating income fell 65.6%, to ¥49 million due to store closings and a decreased number of events.

Assets, L iabi l i t ies and Net AssetsTotal AssetsTotal assets at the fiscal year-end amounted to ¥88,846 million, up ¥12,808 million, or 16.8%, year on year. Current assets rose ¥14,229 million, or 23.9% from a year earlier, to ¥73,658 million. This principally reflected an increase in cash and deposits from a rise in operating revenue, as well as an increase in trade notes and accounts receivable due to a large recording of completed construction contracts at the fiscal year-end, and an expanded order backlog in line with an increase in inventories. Non-current assets fell ¥1,420 million, or 8.6%, to ¥15,188 million. This was due mainly to the sale of offices in Tokyo and Osaka.

LiabilitiesTotal liabilities at the fiscal year-end amounted to ¥45,535 million, up ¥8,841 million, or 24.1%, year on year. Current liabilities grew ¥9,028 million, or 28.9%, from a year earlier, to ¥40,220 million. The major factors in this rise were an increase in advances received for large-scale project orders and expanded income taxes payable due to growth in profit. Non-current liabilities decreased ¥186 million, or 3.4%, from the previous fiscal year-end, to ¥5,314 million. This principally reflected the reversal of deferred tax liabilities for land revaluation reserve due to the sale of land.

Net AssetsTotal net assets at the fiscal year-end amounted to ¥43,311 million, climbing ¥3,967 million, or 10.1%, year on year. The increase was mainly due to a rise in retained earnings resulting from the recording

of net income attributable to shareholders of the parent, despite the payment of dividends.

Cash FlowCash Flow from Operating ActivitiesNet cash provided by operating activities totaled ¥7,683 million, due mainly to a rise in income before income taxes and an increase in advances received.

Cash Flow from Investing ActivitiesNet cash used in investing activities totaled ¥1,137 million, due to the sales of offices in Tokyo and Osaka.

Cash Flow from Financing ActivitiesNet cash used in financing activities totaled ¥2,557 million, due mainly to the payment of dividends.

Net Sales and Prof i tsNet SalesNet sales for the fiscal year ended February 28, 2019 reached ¥125,859 million, up ¥10,017 million, or 8.6%, from the previous fiscal year. The increase was attributable to a steady stream of orders under good market conditions, as well as several large-scale projects, mainly in the specialty stores market and leisure facilities market.

Gross ProfitGross profit rose ¥2,933 million, or 12.7%, from the previous fiscal year to ¥26,062 million. The gross profit margin improved 0.7 percentage points from the previous fiscal year, to 20.7%, due to a substantial increase in net sales as well as the thorough order and process management of large-scale projects, and the improvement of the profit margin of business conducted by the Group companies.

Selling, General and Administrative (SG&A) ExpensesSG&A expenses increased ¥1,951 million, or 13.0%, to ¥16,908 million. The ratio of SG&A expenses to net sales increased 0.5 percentage points from the previous fiscal year, to 13.4%. This was mainly due to an increase in personnel expenses reflecting expanded hiring, relocation expenses and increased rents to improve the workplace environment, and advertising fees.

Operating Income and Ordinary IncomeOperating income rose ¥982 million, or 12.0%, to ¥9,154 million, and ordinary income climbed ¥968 million, or 11.6%, to ¥9,341 million. Despite an increase in SG&A expenses, the increase of gross profit in line with a rise in net sales and the improvement in the gross profit margin caused both operating income and ordinary income to break our records once again, improving the operating margin by 0.2 percentage points to reach 7.3%.

ROE (Return on Equity)/ ROA (Return on Assets) (%)



Business and Other Risks


Consolidated Financial Statements

Outlined below are the major risks faced by the NOMURA GROUP in its business activities that have been identified as having the potential

to significantly impact the decisions of investors. The forward-looking statements outlined below are based on judgments by NOMURA as of

the date of the creation of this report.

① Economic FluctuationsThe Group maintains a stable business base by securing orders

from a wide range of clients, rather than depending on a few

specific business partners. Fluctuations in the economy can,

however, have an impact on performance in forms such as further

curbs in capital investment or advertising expenses or the

postponement or cancellation of planned projects.

② Legal RegulationsThe Group is subject to various legal regulations in the course of

its business activities, such as the Construction Business Act and

the Architect Act. In the future, if any of these laws and regulations

are revised or abolished or if it is found that a legal transgression

has occurred for some reason, this could hinder business

operations and have an impact on performance.

③ Quality Control, Environmental Conservation, Health and SafetyThe Group has consolidated and operated its various management

systems on quality, environment, and health and safety.

Regarding quality control, the Group’s chief engineers and

managing engineers in charge of on-site technical supervision

maintain technical and other standards through rigid quality and

process control. In the event that any quality defects occur in

produced items, performance could be impacted due to effects such

as the loss of social credibility or claims of liability for damages.　In terms of environmental conservation, when disposing of

surplus materials from display work such as the refitting of stores

or dismantling of exhibitions, the Group complies with regulations

such as laws on industrial waste management and conducts rigid

control of waste disposal subcontractors to ensure that they treat

waste properly. If any illegal waste disposal by subcontractors

took place, there would be a loss of social credibility for not only

the subcontractor but also the Group, which could have an

adverse effect on orders received.

With regard to health and safety, the Group conducts

appropriate control to prevent accidents at manufacturing and

construction sites, such as eliminating dangers and harmful

factors. If an accident took place, however, it would result in a loss

of credibility, which could have an impact on orders received.

④ Risks Related to Major Earthquakes If serious damage caused by a major earthquake brings local

economies to a halt, the Group’s business operations could be

affected. Examples would include the postponement or

cancellation of client branch openings or event planning, as well

as a reduction in the scale of orders received in affected regions.

Consolidated Statements of Income and Comprehensive Income (millions of yen) (thousands of U.S. dollars)(Note)

Fiscal Year 2018 2017 2018

Net sales ¥ 125,859 ¥ 115,841 $ 1,135,196 Cost of sales 99,796 92,712 900,121

Gross profit 26,062 23,129 235,075Selling, general and administrative expenses 16,908 14,957 152,509

Operating income 9,154 8,171 82,566 Non-operating income:

Interest income 9 9 86 Dividends income 46 37 420 Purchase discount earned 90 87 813 Insurance income — 56 — Other 45 34 407 Total other income 191 224 1,728

Non-operating expenses:Interest expenses 0 3 3 Foreign currency exchange loss 1 15 15 Other 1 4 17 Total other expenses 4 23 36

Ordinary income 9,341 8,373 84,258 Extraordinary income:

Gain on sales of property and equipment 644 0 5,814 Gain on sales of investment securities 0 26 4 Gain on share exchange of subsidiaries — 14 —Total extraordinary income 645 42 5,818

Extraordinary loss:Loss on sales and retirement of property and equipment 26 33 238 Loss on impairment of fixed assets 78 608 711 Loss on devaluation of investment securities 9 2 90 Loss on devaluation of golf membership rights 31 — 280 Business structure improvement expenses — 437 —Loss on closing of stores — 12 —Total extraordinary loss 146 1,093 1,320

Income before income taxes 9,840 7,322 88,756 Income taxes:

Current 3,568 1,794 32,190 Deferred (485) (115) (4,383)Total income taxes 3,083 1,678 27,807

Net Income 6,757 5,643 60,949 Net income attributable to:

Non-controlling interests 11 4 103Shareholders of the parent ¥ 6,745 ¥ 5,638 $ 60,845

Other comprehensive income:Net unrealized holding gain (loss) on securities (295) 491 (2,662)Foreign currency translation adjustments (61) 29 (554)Remeasurements of defined benefit plans 72 125 656 Total other comprehensive income (283) 647 (2,560)

Comprehensive income ¥ 6,473 ¥ 6,290 $ 58,388 Comprehensive income attributable to:

Shareholders of the parent ¥ 6,462 ¥ 6,286 $ 58,284Non-controlling interests 11 4 103

Note: U.S. dollar amounts represent conversions from yen, for convenience only, at ¥110.87=US$1.


ASSETS

Current assets:

Cash and deposits ¥ 31,941 ¥ 25,741 $ 288,099

Trade notes and accounts receivable 31,427 26,777 283,462

Inventories 9,115 6,359 82,218

Other current assets 1,201 568 10,834

Allowance for doubtful accounts (27) (19) (252)

Total current assets 73,658 59,428 664,364

Non-current assets:

Property and equipment:

Buildings and structures 6,274 9,597 56,593

Machinery and vehicles 185 184 1,675

Tools, furniture and fixtures 1,845 1,915 16,641

Land 3,743 5,245 33,762

Lease assets 229 216 2,074

Construction in progress 15 4 141

Less accumulated depreciation (4,335) (7,566) (39,105)

Total property and equipment 7,958 9,597 71,783

Intangible fixed assets 1,002 1,035 9,045

Investments and other assets:

Investment securities 3,527 3,884 31,819

Deferred tax assets 1,421 1,032 12,823

Other 1,629 1,348 14,694

Allowance for doubtful accounts (351) (288) (3,170)

Total investments and other assets 6,227 5,976 56,167

Total non-current assets 15,188 16,608 136,996

Total assets ¥ 88,846 ¥ 76,037 $ 801,360

Consolidated Balance Sheets (millions of yen) (thousands of U.S. dollars)(Note)

Fiscal Year 2018 2017 2018

(millions of yen) (thousands of U.S. dollars)(Note)

Fiscal Year 2018 2017 2018

LIABILITIES

Current liabilities:

Trade notes and accounts payable ¥ 21,236 ¥ 21,352 $ 191,544

Lease obligations 46 54 417

Income taxes payable 2,883 1,179 26,006

Advances received 9,072 3,168 81,825

Accrued bonuses for employees 1,719 1,519 15,509

Provision for warranties for completed construction contracts 47 55 425

Provision for loss on construction contracts 100 51 903

Provision for business structure improvement expenses 49 92 446

Other current liabilities 5,066 3,719 45,694

Total current liabilities 40,220 31,192 362,774

Non-current liabilities:

Lease obligations 75 88 681

Net defined benefit liability 4,824 4,802 43,514

Retirement benefits for directors and corporate auditors 193 154 1,743

Deferred tax liabilities for land revaluation reserve — 183 —

Other 221 272 1,997

Total non-current liabilities 5,314 5,501 47,936

Total liabilities 45,535 36,693 410,710

NET ASSETS

Shareholders’ equity:

Common stock 6,497 6,497 58,605

Capital surplus 6,861 6,861 61,884

Retained earnings 30,426 25,767 274,430

Treasury stock (1,092) (1,091) (9,853)

Total shareholders’ equity 42,692 38,034 385,067

Accumulated other comprehensive income:

Net unrealized holding gain (loss) on securities 744 1,039 6,712

Revaluation reserve for land — 415 —

Foreign currency translation adjustments 94 156 856

Remeasurements of defined benefit plans (244) (316) (2,201)

Total accumulated other comprehensive income 595 1,294 5,368

Non-controlling interests 23 14 213

Total net assets 43,311 39,344 390,649

Total liabilities and net assets ¥ 88,846 ¥ 76,037 $ 801,360


Consolidated Statements of Changes in Net Assets (millions of yen)

Consolidated Statements of Changes in Net Assets (thousands of U.S. dollars) (Note)

Shareholders’ equityTotal shareholders’

equityCommon stock Capital surplus Retained earnings Treasury stock

Balance at March 1, 2018 ¥ 6,497 ¥ 6,861 ¥ 25,767 ¥ (1,091) ¥ 38,034

Cash dividends paid (2,503) (2,503)

Net income attributable to shareholders of the parent 6,745 6,745

Acquisition of treasury stock (0) (0)

Reversal of revaluation reserve for land 415 415

Other amounts of changes —

Balance at February 28, 2019 ¥ 6,497 ¥ 6,861 ¥ 30,426 ¥ (1,092) ¥ 42,692

Shareholders’ equityTotal shareholders’

equityCommon stock Capital surplus Retained earnings Treasury stock

Balance at March 1, 2018 $ 58,605 $ 61,884 $ 232,415 $ (9,847) $ 343,057

Cash dividends paid (22,579) (22,579)

Net income attributable to shareholders of the parent 60,845 60,845

Acquisition of treasury stock (5) (5)

Reversal of revaluation reserve for land 3,750 3,750

Other amounts of changes —

Balance at February 28, 2019 $ 58,605 $ 61,884 $ 274,430 $ (9,853) $ 385,067

Accumulated other comprehensive incomeTotal accumulated

other comprehensive income

Non-controlling interests Total net assetsNet unrealized

holding gain (loss) on securities

Revaluation reserve for land

Foreign currency translation

adjustments

Remeasurements of defined

benefit plans

Balance at March 1, 2018 ¥ 1,039 ¥ 415 ¥ 156 ¥ (316) ¥ 1,294 ¥ 14 ¥ 39,344

Cash dividends paid (2,503)

Net income attributable to shareholders of the parent 6,745

Acquisition of treasury stock (0)

Reversal of revaluation reserve for land 415

Other amounts of changes (295) (415) (61) 72 (699) 9 (690)

Balance at February 28, 2019 ¥ 744 ¥ — ¥ 94 ¥ (244) ¥ 595 ¥ 23 ¥ 43,311

Accumulated other comprehensive incomeTotal accumulated

other comprehensive income

Non-controlling interests Total net assetsNet unrealized

holding gain (loss) on securities

Revaluation reserve for land

Foreign currency translation

adjustments

Remeasurements of defined

benefit plans

Balance at March 1, 2018 $ 9,375 $ 3,750 $ 1,411 $ (2,857) $ 11,679 $ 129 $ 354,866

Cash dividends paid (22,579)

Net income attributable to shareholders of the parent 60,845

Acquisition of treasury stock (5)

Reversal of revaluation reserve for land 3,750

Other amounts of changes (2,662) (3,750) (554) 656 (6,310) 84 (6,226)

Balance at February 28, 2019 $ 6,712 $ — $ 856 $ (2,201) $ 5,368 $ 213 $ 390,649

Consolidated Statements of Cash Flow (millions of yen) (thousands of U.S. dollars)(Note)

Fiscal Year 2018 2017 2018

Cash flow from operating activities:

Income before income taxes ¥ 9,840 ¥ 7,322 $ 88,756

Depreciation 837 895 7,554

Loss on impairment of fixed assets 78 608 711

Increase (decrease) in allowance for doubtful accounts 74 20 668

Increase (decrease) in accrued bonuses for employees 200 263 1,805

Increase (decrease) in net defined benefit liability 129 124 1,169

Increase (decrease) in retirement benefits for directors and corporate auditors 38 32 348

Increase (decrease) in other provisions (5) (28) (52)

Interest and dividend income (56) (46) (507)

Interest expense 0 3 3

Insurance income — (56) —

Business structure improvement expenses — 437 —

Gain on share exchange of subsidiaries — (14) —

Loss (gain) on sales of property and equipment (644) 1 (5,814)

Loss (gain) on sales of investment securities (0) (26) (4)

Decrease (increase) in trade receivables (4,727) (7,557) (42,641)

Decrease (increase) in inventories (2,785) 919 (25,125)

Decrease (increase) in prepayments (493) 388 (4,448)

Increase (decrease) in trade payables 40 2,327 361

Increase (decrease) in other payables 1,213 (723) 10,948

Increase (decrease) in advances received 5,948 (194) 53,655

Increase (decrease) in consumption tax payable (235) (142) (2,126)

Other, net 131 84 1,188

Subtotal 9,584 4,639 86,450

Cash received for interest and dividends income 56 47 507

Cash paid for interest expenses (0) (3) (3)

Cash paid for income taxes (1,957) (2,621) (17,652)

Cash received for insurance income — 56 —

Net cash provided by (used in) operating activities 7,683 2,117 69,302

Cash flow from investing activities:

Purchase of property and equipment (560) (476) (5,053)

Proceeds from sales of property and equipment 2,372 4 21,398

Purchase of intangible assets (315) (114) (2,847)

Purchase of investment securities (135) (234) (1,225)

Proceeds from sales and redemption of investment securities 66 464 595

Payments for share exchange of subsidiaries resulting in change in the scope of consolidation — (297) —

Payments for guarantee deposits (239) (403) (2,161)

Other, net (49) 47 (442)

Net cash provided by (used in) investing activities 1,137 (1,010) 10,262

Cash flow from financing activities:

Payments for acquisition of treasury stock (0) (0) (5)

Dividends paid to shareholders (2,495) (2,215) (22,510)

Dividends paid to non-controlling interests (2) — (19)Other, net (58) (62) (527)

Net cash provided by (used in) financing activities (2,557) (2,278) (23,064)

Effect of exchange rate changes on cash and cash equivalents (64) 55 (581)

Net increase (decrease) in cash and cash equivalents 6,199 (1,116) 55,919

Cash and cash equivalents at beginning of year 25,741 26,858 232,180

Cash and cash equivalents at end of year ¥ 31,941 ¥ 25,741 $ 288,099


Fiscal Year Begins on March 1st, ends on the last day of February

General Meeting of Shareholders May of each year

Share Unit 100 shares

Transfer Agent Sumitomo Mitsui Trust Bank, Limited

Stock Exchange Listing The First Section of the Tokyo Stock Exchange

Securities Code 9716

Authorized Shares 238,170,000 shares*

Shares Issued and Outstanding 59,948,294 shares*

Number of Shareholders 5,419

Major Shareholders

Name of Shareholder Number of SharesPercentage of Total Issued Shares (%)

NOMURA Y.K. 5,234,000 9.41

ARITA Y.K. 5,141,500 9.24

The Master Trust Bank of Japan, Ltd. (trust account) 3,160,200 5.68

Japan Trustee Services Bank, Ltd. (trust account) 2,468,100 4.44

Yoko Nomura 1,658,000 2.98

NOMURA Kougei Employee Shareholder Association 1,427,130 2.57

Mutual Prosperity Association of NOMURA Co., Ltd. 1,394,400 2.51

Sumitomo Mitsui Banking Corporation 1,376,920 2.48

NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON LEBDING 15 PCT TREATY ACCOUNT 1,001,400 1.80

The Dai-ichi Life Insurance Company, Limited 974,700 1.75

0.01%

61.78%

1.06%6.09%

3.69%

10.09% 17.28%

1.54%

16.87% 24.26% 36.96%20.37%

Note: The breakdown figures include the number of treasury shares.


Stock Information as of February 28, 2019

Stock Price Range (monthly)

Stock Price Indices

201820172016201520142013

21.1121.1126.4726.47

20.0920.09

20.4120.41

20.3520.35

23.7023.70

201820172016201520142013

3.033.03

4.134.13

2.442.442.932.93

2.172.171.591.59

201820172016201520142013

2.12.11.61.6

2.22.2 2.22.22.22.22.02.0

2019.22018.22017.22016.2

（Yen）3,000

1,000

2,000

0

(FY) (FY) (FY)

Organizational LayoutGeneral Meeting of

Shareholders

Chairman & CEO

Board of Directors

Board of Auditors

President & CEO

Busi

ness

Uni

t 1

Busi

ness

Uni

t 2

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Corporate Overview as of February 28, 2019

BusinessHeadquarters

CorporateHeadquarters

* Effective June 1, 2019, the Company conducted a 2-to-1 stock split of its common stock, resulting in 476,340,000 shares of

authorized shares and 119,896,588 shares issued and outstanding.

NameNOMURA Co., Ltd.

EstablishedMarch 15, 1892

IncorporatedDecember 9, 1942

Common Stock¥6,497 million

Head Office2-3-4 Daiba, Minato-ku, Tokyo 135-8622, JapanPhone +81-3-5962-1171

Osaka Office19F Parks Tower, 2-10-70, Nambanaka, Naniwa-ku, Osaka City, Osaka 556-0011, JapanPhone: +81-6-6649-3331

Domestic BranchesHokkaido (Sapporo), Tohoku (Sendai), Chubu (Nagoya), Chugoku/Shikoku (Hiroshima), Kyushu (Fukuoka), Kyoto (Kyoto), Okayama (Okayama), Okinawa (Naha)

Overseas BranchesBeijing, Shanghai, Chengdu, Shenzhen, Hong Kong, Singapore, Milan, New York

Number of EmployeesNOMURA GROUP: 2,388 (including contracted employees)Non-consolidated: 1,123 (regular employees)Consolidated: 1,745 (regular employees)

Group CompaniesNOMURA PRODUCTS Co., Ltd.Planning, design, manufacturing and construction of architecture, building redevelopment, interior design and signs for commercial, public and cultural facilities and chain store spaces

NOMURA DUO Co., Ltd.Display and promotion creation for spaces to attract visitors

TNP Co., Ltd.Total chain store construction services: planning, layout and construction of store architecture, interior and kitchen spaces

NOMURA TECHNO Co., LtdDesign, production, maintenance and operation support for exhibition equipment, videos, graphics, information systems, etc.

NOMURA DEVELOPMENT Co., Ltd.Development and operation of restaurants and retail stores; planning, production, and sales of original products

NODE Co., Ltd.Planning, design, and layout of commercial facilities

Square Co., Ltd.Layout and supervision of restaurants and chain stores

C’s · three Co., Ltd.Integrated business services, temporary staffing, facility operation

RIKUYOSHA Co., Ltd.Art, design and book publishing

NOMURA (Beijing) Co., Ltd.Display design and construction; architectural decoration design and construction; design, manufacturing and procurement of furniture and fixtures; provision of technical consulting and services

NOMURA DESIGN AND ENGINEERING SINGAPORE PTE. LTD.Design and construction of interiors for commercial facilities; design and construction for exhibition facilities and events

NODE (Shanghai) Co., Ltd.Architecture design consulting, design for exhibitions, interiors and decorationsNote: Currently in the process of dissolution and liquidation

Notes: 1. The Company holds 4,316 thousand shares (7.20%) of treasury stock. 2. Percentage of total issued shares is computed excluding total treasury stock.

Composition of Shareholders

Breakdown by Size of Holding Number of Shareholders Shares Held

■ Less than 100 shares 679 3,679

■ 100 shares or more 2,914 635,788

■ 1,000 shares or more 1,417 3,652,347

■ 10,000 shares or more 302 6,050,636

■ 50,000 shares or more 35 2,210,904

■ 100,000 shares or more 47 10,359,392

■ 500,000 shares or more 25 37,035,548

Breakdown by Type of Shareholder Number of Shareholders Shares Held

■ Foreign Investors 189 10,112,074

■ Securities Companies 27 923,375

■ Financial Institutions 33 14,546,440

■ Other Corporations 144 12,208,982

■ Individuals and Others 5,026 22,157,423

Price Earnings Ratio (PER)(times)

Price Book-Value Ratio (PBR)(times)

Dividend Yield(%)

2-3-4 Daiba, Minato-ku, Tokyo 135-8622 Japan

Phone +81-3-5962-1171

https://www.nomurakougei.co.jp/english

ANNUAL REPORT 2019 Year ended February 28, 2019...(Shingeki-no-Kyojin TEN) 2014 ©Hajime Isayama,...

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Transcript of ANNUAL REPORT 2019 Year ended February 28, 2019...(Shingeki-no-Kyojin TEN) 2014 ©Hajime Isayama,...