Earnings Presentation for the Third Quarter of the Fiscal ... · Third Quarter of the Fiscal Year...

Earnings Presentation for the Third Quarter of the Fiscal Year

Ending March 31, 2017

RIZAP GROUP, Inc.

Takeshi Seto, President & CEO

(Stock Code: 2928 on the Sapporo Securities Exchange Ambitious)

March 3, 2017

Copyright © 2017 RIZAP GROUP Inc. All rights reserved.

2Copyright © 2017 RIZAP GROUP Inc. All rights reserved.

Today’s Contents

1. Highlights of Consolidated Financial Results for 9 Months Ended December 31, 2016

2. Growth Strategy

① Grow businesses in existing segments② Launch new businesses③ Pursue business partnerships with other

companies④ Step up M&A activities and enhance group

synergy


Highlights of Consolidated Financial Results for 9 Months Ended December 31, 2016

1. Achieved substantial revenue and profit

growth for 4 consecutive fiscal years: Revenues

and operating income were up 70% and 173%, respectively,

from the same period of the year before

2. Made profits in every segment: Apparel and

entertainment businesses turned to profitability

3. Accelerated M&A activities while maintaining

financial soundness


Record-breaking financial performance

Consolidated P/L

(in millions of yen)

9 months ended

12/31/2015

9 months ended

12/31/2016

Year-on-year

changes

(Amount)

Year-on-year

changes (%)

Revenues 38,676 65,726 +27,050 169.9%

Operating income 2,929 8,001 +5,072 273.1%

Pretax income 2,694 7,557 +4,863 280.4%

Net income 1,614 5,199 +3,585 322.0%

Net income attributable

to owners of parent

company1,659 5,081 +3,422 306.2%


Achieved continuous revenue and profit

growth for 4 consecutive fiscal years

Consolidated Revenues and Operating Income

38,676

2014

28,365

2013

15,448

2012

13,435

2016

65,726

2015

Consolidated Revenues Consolidated Operating Income

229

-21

1,402

20132012 2016

8,001

2015

2,929

2014

Up 69.9%

YoY

Up 173.1%

YoY


(For 9 months ended Dec. 31 of each fiscal year)


Revenues by Segment

21,23127,164

6,908

8,9414,734

21,306

6,320

8,929

For 9 months ended Dec. 2015

-518

38,676

-615

65,726


Apparel

Housing-related lifestyle

Beauty and health

Adjustment

Entertainment


Revenues surged

in every segment


Operating Income by Segment

5,808

4,300

979

1,853

-861-647

-362

220

-431

70


8,001


2,929

Adjustment

Apparel

Beauty and health

Housing-related lifestyle

Entertainment


Made profits in

every segment

Apparel and entertainment

businesses turned to

profitability


Operating Income of Group Companies by Business Segment

Apparel business

Loss of67 million yen

Turn to profitability(45 million yen)

Profitable Profit increased

Profitable Profit

Loss Turn to profitability


Beauty and health business

ProfitableProfit increased

substantially



Profitable Profitable

Housing-related lifestyle business

Profit of60 million yen

Profit increased

to 107 million yen



Profitable Profitable

Entertainment business


October-December

Quarter of FY2015





October-December

Quarter of FY2016

October-December

Quarter of FY2015

October-December

Quarter of FY2016

October-December

Quarter of FY2015

October-December

Quarter of FY2016

October-December

Quarter of FY2015

October-December

Quarter of FY2016


Breakdown of Operating Income


3,192

5,515

-1,650

4,136

9 months ended

December 31, 2015

2,929

-263

9 months ending

December 31, 20179 months ended

December 31, 2016

8,001

Upfront investment and loss from

unprofitable businesses

Profit resulting from discounted

acquisitions through M&A

Operating income from core businesses

Operating income jumped 72% year

on year even with the extraordinary

income from M&A taken out of the

equation

We aim to achieve a

substantial increase in

operating income excluding

extraordinary factors in

FY2017

(Target)

-263


Accelerated M&A activities while maintaining financial soundness

Consolidated Balance Sheets

As of December 31, 2016

(Total assets: 82,574 million yen)

As of March 31, 2016

(Total assets: 53,777 million yen)

Equity

Non-current

liabilities

Current

Liabilities

Non-

current

assets

Current

assets

11,137(20%)

15,344(28%)

27,296(50%)

21,255(40%)

32,522(60%)

(Ratio of equity attributable

to owners of parent

company: 19.0%)

Equity

Non-current

liabilities

Current

Liabilities

Non-

current

Assets

Current

assets

17,501(21%)

26,615(32%)

38,458(46%)

29,283(35%)

53,291(64%)

(Ratio of equity attributable to

owners of parent company:

17.4%)


No significant change in the

ratio of equity attributable to

owners of parent company


Cash flow from operating activities temporarily suffered due

to a strategic decision to build up inventory and aggressive

M&A activities. It is forecasted to return to a normal level by

the end of FY2016.

Cash Flow from Operating Activities

9 months ended

December 31, 2015

9 months ended

December 31, 2016

Year-on-year

changes

Consolidated cash

flow from operating

activities +863 ▲3,896 ▲4,759

① Increase in inventory

(based on a strategic

decision)▲310 ▲2,055 ▲1,745

② Income taxes ▲733 ▲2,572 ▲1,839

Main extraordinary factors



Everything is on track

Business Forecasts for Fiscal Year Ending March 31, 2017

657 343Revenues 100

80 21Operating

income10.1

75 20Pretax

income9.5

66% achieved9 months total

9 months total

9 months total 79% achieved

79% achieved

Full-year forecasts

Note: Rate of achievement = Results in 9 months

divided by full year forecast

(in billions of yen)

65.7

8.0

7.5

34.3

2.1

2.0


Fastest-Growing Companies

Fastest-Growing Companies in Japan

(April to December 2016)

*Source: Nihon Keizai Shimbun (morning

edition of February 23, 2017)

*Excludes financial institutions and companies

listed in TSE JASDAQ or Mothers.

Companies that made 30 billion yen or more

in revenues for April to December 2015 were

tabulated.

CompanyYoY revenue

growth (%)

Revenues

(in billions

of yen)

1Chilled & Frozen Logistics

Holdings Co., Ltd.170.9% 79.2

2 RIZAP Group 169.9% 65.7

3Ono Pharmaceutical Co.,

Ltd.168.0% 188.8

4 Takara Leben CO., LTD. 155.9% 53.7

5 Start Today Co., Ltd. 142.2% 53.6

6 Yahoo Japan Corporation 141.7% 630.9

7Toyo Engineering

Corporation138.9% 304

8 FJ Next Co., Ltd. 138.1% 45.6

9 Daiichi Jitsugyo Co., Ltd. 137.5% 116.1

10 Nissei Build Kogyo Co., Ltd. 134.8% 53.7

RIZAP ranked as

the second-fastest

growing company

in Japan


Today’s Contents

1. Highlights of Consolidated Financial Results for 9 Months Ended December 31, 2016

2. Growth strategy

① Grow businesses in existing segments② Launch new businesses③ Pursue business partnerships with other

companies④ Step up M&A activities and enhance group

synergy


We prove that “People can

change.”

RIZAP Group Management Philosophy



“Become the No. 1 global brand in the

self-investment industry”

Business Domain

Maslow’s hierarchy of needs

Self-

actualization

Esteem

Love/Belonging

Safety

Physiological

“Self-investment industry”

= Business domain of the

RIZAP Group

Focus of our

group

“Necessities industry”

= Outside our business domain


Infinite potential in the self-investment industry

RIZAP’s Target Markets

Healthcare and

beauty care

market

2 trillion yen+Golf

1.4 trillion yen

Sporting goods

and apparel

1.9 trillion yen

Other

lesson market

950 billion yen

English

education

310 billion yen

Business-skill

training

490 billion yen

Sports classes

651 billion yen

Self-investment

industry market

7 trillion yen+


On track toward achieving our targets

Progress toward Achieving the Targets Established in the

Medium-term Plan “COMMIT 2020”

Consolidated Operating IncomeConsolidated Revenues


554391

FY2020

Target

FY2015

Results

FY2016

Target

FY2014

Results

5021

FY2015

Results

FY2016

Target

FY2014

Results

FY2020

Target

1,000

300 35

100

39.155.4

100

2.1

10

5.0


Four Key Initiatives to Achieve COMMIT 2020

③

Create a new revenue base by

working with other leading

companies

Grow businesses in

Accelerate growth centered on

RIZAP・ Shift to “stack-up management”

・ Expand customer base

Upgrade M&A processes and

pursue greater synergy among

group companies so as to

achieve greater profitability in

every segment

Step up M&A activities and

enhance group synergy① Launch new businesses

Aggressively invest in new

businesses to grow them into

another “RIZAP”

2

3

4

1existing segments

Pursue business partnerships

with other companies


Achieved record quarterly revenues in 3Q of FY2016,even though historically revenues dipped in 3Qs of previous fiscal years

Revenues of the Core RIZAP Business

（億円）

Note: Revenues from RIZAP body-making business and RIZAP-related products and services

58

5148

51

42

33

2528

22

5955

4QFY2014

1Q

3Q 4Q2QFY2015

1Q

2Q 3Q FY2016

1Q2Q 3Q

5.9(in billions of yen)

2.2

2.82.5

3.3

4.2

5.14.8

5.1

5.8

5.5


Cumulative memberships exceeded 70,000

RIZAP Memberships

FY2015 FY2016

(memberships)

65,000

60,000

55,000

50,000

40,000

0

75,000

45,000

70,000

AugJul Jun JanDecNovOctApr May JulMarFeb AugJanDec SepNovOctSep


Reached the 100th store mark,

meeting ever-growing customer needs

New and Existing RIZAP Stores

: Existing

stores

: New stores

Kyodo

120

81

42

10

FY2016

Target

FY2016

Present

FY2015FY2014

110

FY2013FY2012

25

Yoyogi Uehara

Ikebukuro

Higashiguchi

Kasukabe

Nerima

Urawa

*As of March 3, 2017

*Total number of stores inside and

outside Japan

Number of Stores

Odawara

Kitasenju

Ueno

Sasebo


New Stores

Kitasenju store

Opened Sun. 2/19/2017

Yoyogi Uehara store

Opened Sat. 12/17/2016

Ueno store

Opened Sat. 2/25/2017

Nishinomiya Kitaguchi store

Opened Sun. 11/27/2016


Improved membership renewal and retention rates due

to high customer satisfaction

Membership Renewal Rate and Retention Rate

The retention rate after

12 months of enrollment is up 60%High customer satisfaction

resulted in a higher membership renewal rate

Up 30%

FY2016

As of January 2017

Average

FY2015

2H

Average

FY2015

1H

Average

Membership Renewal Rate (%) Retention Rate after 12 months of Enrollment (%)

Up 60%

January 2017April 2015


Enrollments in Life Support

Program grew substantially,

resulting from improved

membership renewal and

retention rates

Enrollments in Life Support Program

January

2016

April

2016

Up 630%

July

2016

October

2016

January

2017

The Number of Customers Enrolled

in the Life Support Program


New members acquired through customerreferrals continued to increase

Member Acquisition through Customer Referrals

Percentage of New Members Acquired through Customer Referrals

50

0

Dec

2016

40.8%

Nov

2016

35.3%

Oct

2016

29.3%

Sep

2016

32.6%

Aug

2016

32.0%

Jul

2016

28.0%

Jun

2016

27.0%

May

2016

24.0%

Apr

2016

24.0%

(%)


Enhance relationship

with customers through

a campaign focused on

increasing family

member referrals

Family Member Referral Campaign


The percentage of sales to

subscribers doubled thanks to

improved customer satisfaction

Product Sales to Subscribers

FY2016

As of Jan 2017 Average

FY2015

Average

16%

32%

Percentage of Products Sold

to Subscribers


The RIZAP business enters a new growth stage



Let’s watch a video

“All about RIZAP”

(120-second infomercial for the elderly)



Elderly market

continues to grow

Aging of Japan

Percentage of Population

Aged 65 and Older

現状

2015 2020

40%

2040

27%

201020001990

12%

2060 *Source: The Aging Society White Paper 2016,

published by the Cabinet Office

Present


We have been receiving

an increasing number of

inquiries from the elderly

Increased Inquiries from the Elderly

January

2017

January

2016

13%

February 2017

(preliminary)

21%

26%

Percentage of Inquiries

from the Elderly


Increased enrollments of the elderly contributed to revenue growth as they spent more on average than younger members

Enrollments of the Elderly on the Rise

Percentage of New Members

Aged 50 and Older

14%

February 2017

(preliminary)

January

2017

19%

January

2016

22%


Encouragingly

positive feedback

from the elderly

New Program Tailored to the Elderly

93%

Do you think RIZAP is right for

people aged 50 and older?

Yes

Note: Results of a questionnaire survey on 190 male and female customers

aged 50 and older who completed a beginner’s course from April to

September 2016.

“Yes” includes those who answered “Agree” and “Somewhat agree”


90% of RIZAP beginners aged

50 and older said they felt

healthier

Encouragingly Positive Feedback from Members Aged 50 and Older

89%

Did your health data show

signs of improvement

after joining RIZAP?

Yes

88%

Yes

88%

Yes

90%

Yes

Do you feel you are

healthier after joining

RIZAP?

Would you recommend RIZAP

to your friends and relatives

who have health concerns?

青木英子さん(67歳)

Do you have a healthier

lifestyle after joining

RIZAP?

Note: Results of a questionnaire survey on 190 male and female customers aged 50 and

older who completed a beginner’s course from April to September 2016.


Rolled Out Aggressive Marketing Programs Targeted at the Elderly

Infomercial for the elderly

Free newspaper for the elderly

(Example of synergy with PADO

Corporation)

TV and print advertising


Increased elderly

customers will result in

greater utilization of

trainers and stores

Effect of Increased Elderly Customers on the RIZAP Business

7:00 am 11:00 pm12:00 pm

Correlation between Trainers’

Availability and Sessions Engaged by

Customers

Number of

available trainers

Number of

sessions engaged

by customers

Room for improvement

by taking advantage of

a growing number of

elderly customers

Further profit-

improvement

opportunity(better utilization of staffers,

properties, and equipment)


Developing food products with functional

claims that meet the needs of the elderly

RIZAP-Branded Food Products with Functional Claims

Note: Regulatory documents regarding these products were

submitted to and accepted by the Consumer Affairs Agency

(as of March 3, 2017).

・・・

ASSIST EYE JUST VITAL FLORA

Supports flexibility

and mobility of knee

joints

Improves the eye’s

focusing function

and relieves eye

strain from PC use

Improves intestinal

environment and

promotes

gastrointestinal condition

March 2017

Product name:

Efficacy:

To be

available in:March 2017 June 2017


Four Key Initiatives to Achieve the COMMIT 2020

③



companies

Grow businesses in








every segment





another “RIZAP”

2

3

4

1existing segments




Establishing a “RIZAP Ecosystem” focused on the

self-investment market

Overall Picture of New Business Strategy

② Maximize effectiveness of marketing①Attract customers through new channels

③ Offer supporting products

RIZAP ONLINERIZAP books and

magazines

RIZAP Food

GolfEnglish conversation

classes

Cooking schoolsProduct development

Partnerships with

convenience storesRIZAP Apparel


RIZAP x RIZAP GOLF

The first co-branded store opened at Ikebukuro

Higashiguchi

RIZAP x RIZAP GOLF Co-branded Store Opened on January 18, 2017


Excellent customer satisfaction generated in

RIZAP GOLF has proven the effectiveness

of the RIZAP Method

RIZAP GOLF: Customer Satisfaction

Do you feel like your golf skills

improve every time you take

lessons at RIZAP GOLF?

Are you happy with the lessons

provided at RIZAP GOLF?

Yes

93%

Yes

90%

Note: Results of a questionnaire survey on 189 customers

after taking RIZAP GOLF lessons from November 2016 through January 2017


The number of active members has been on a

sharp rise

RIZAP GOLF: The Number of Active Customers

Feb Nov JanDecJan OctSepAugMar Apr May JulJun

The Number of Active

Customers


RIZAP GOLF: Prospective Customers

The Number of Inquiries

from Prospective

Customers

Feb MarJan JanDecNovOctSepAugJulJunMayApr

Generated a keen interest among

prospective customers

We will expand the RIZAP

GOLF business

significantly in FY2017

Advertising was temporarily cut

back due to increase in waitlisted

customers. (switched to test

marketing)



③



companies

Grow businesses in








every segment





another “RIZAP”

2

3

4

1existing segments




Aggressively pursue partnerships with other

companies to create a new revenue base and to

establish RIZAP as a “cutting-edge healthcare

brand”

Pursue Business Partnerships with Other Companies

1. Work with other leading companies

2. Conduct joint research with universities and hospitals

3. Work with local governments

4. Partner with companies working with

cutting-edge technologies

Key strategies to enhance business

partnerships


RIZAP x Family Mart co-branded products

sold more than 9 million units*

Partnership with Family Mart Convenience Stores

NO. 1 NO. 2 NO. 3

NO. 4 NO. 5 NO. 6 The 3rd series of

items are in the

pipeline

RIZAP

Spicy Miso Ramen

RIZAP

Soft Chocolate

Chip Cake

RIZAP

Chocolate

Chip Scone

RIZAP

Custard Pudding

RIZAP

Cheese Cake

RIZAP

Caramel Latte

LaunchedJanuary 2017

* 11 items are in the market as of February 19, 2017

x


RIZAP x Pizza HutThe number of stores

carrying co-brand products is on the rise to meet growing customer

demand

Partnership with Pizza Hut

Aug. 2016 Oct. 2016 Jan. 2017

x

Expected

to grow

The Number of Pizza Hut

Stores Carrying Co-branded

Products

149

32

6


Kirin Beverage and RIZAP have been working on

developing a new product that addresses people’s

health concerns

Partnership with Kirin Beverage

x

We will jointly announce a new product on March 14, 2017


Launched health-promotion program for the elderly:An initiative to extend healthy-life expectancy of the elderly in

collaboration with a local government and hospitals

Partnership with the City of Makinohara, Shizuoka

x

Makinohara, Shizuoka

This is the first time in Japan that a local

government has worked with a service

provider to establish a sustainable,

result-oriented business model

(We are talking to other local governments

about partnerships)

Feature

Commission paid to RIZAP is variable,

depending on the degree of improvements

in participants’ health data, which is in line

with the RIZAP philosophy “Committed to

results”

Period March 2017 onward

Intended

forThe elderly living in Makinohara, Shizuoka

Program

• Duration: 3 months

• Weekly health seminar

• Monitoring progress of regular exercise

and healthy diet

Evaluation

criteria

• Changes in health data such as blood

pressure

• Changes in the degree of happiness,

using a happiness life check sheet

• Changes in anatomic age, using

RIZAP’s proprietary method

Outline of the Initiative



③



companies

Grow businesses in








every segment





another “RIZAP”

2

3

4

1existing segments




Group Company Topic

20162015201420132012

9.01 millionRanked 1st for

4 straight years*1

Ranked 1st

in the skincare division*2

*1: As of March 2017

*2: Based on yen-based sales from FY2011 to FY2014 in the mud

face wash market, excluding OEM. Mud face wash is face

cleanser that uses mud as an active ingredient. Source: Yano

Research Institute Ltd. (March 2016)

*3: Amazon annual ranking 2016(FY)

DOROwa Series

broke the 9 millionth

shipment mark in sales

Dec. 28, 2016

Limited offer

Cumulative Quantity of

DOROwa Series Shipped


Group Company Topic

2,925

3,315

20162015

3,052

2014

Revenues of IDEA

International

Revenues on an upward

trend with key brands

doing well

BRUNO(Interior products)

MILESTO(Travelling items)


(for July through December in each fiscal year)


Group Company Topic

Won

The Good Design Award

2 years in a row

Minatomirai Show HouseMariscal House

(Hiranumabashi Show House)


Concepts and Logic


Futuristic

gyms using

digital signage

Customer Benefits

RIZ

AP

Eco

syste

m

Exte

rnal fa

cto

rsIn

tern

al fa

cto

rs

Gym

Stylish design

representing

what the RIZAP

brand stands for

Machine

Body make

line extended

to apparel and

sundries

Body Make

Collection

Golf

CollectionGoods

Golf apparel

and

accessories

Healthcare

products

Machine

training

room

Comfortable

living space

A comfort zone nearest to you is what it takes to make you

feel uplifted and happy

Always stay healthy and fit

Body care &

Recovery from

exhaustion


RIZAP at home

Trainer app

session

An app that recommends training and dietary menus,

and can be safely used at home

Tra

inin

g m

en

uD

ieta

ry m

en

u

Digital

dietary

management

Self-

management

app

Application


FACE yourself.

Body-make space that blends into

a living space



a living space

FACE yourself.


An Example of Synergy between Group Companies

RIZAP x Nihonbungeisha

ranked 1st and 2nd on

Amazon’s best-selling book list*

*Amazon Ranking:

Best-selling book ranking in the other beauty and diet category

(as of January 17, 2017)

x


Strategic M&A to Accelerate

Growth


Past M&A Activities

FY2013 and earlier

FY2014 FY2015 FY2016

Angeliebe

IDEA International(Stock code: 3140 on TSE JASDAQ )

SD Entertainment(Stock code: 4650 on TSE JASDAQ )

Dream Vision Co., Ltd.(Stock code: 3185 on TSE

Mothers)

Auntie RosaJapan Gals

JapangalsSC (formerly, ASTY)

Marimura

Tatsumi Planning

Nihonbungeisha Co., Ltd.Hokuto Printing

Passport(Stock code: 7577 on TSE JASDAQ)

Maruko(Stock code: 9980 on TSE 2nd)

Misuzu

Jeans Mate(Stock code: 7448 on TSE 1st)

PADO Corporation

(Stock code: 4833 on TSE JASDAQ)


Achieved outstanding

ROI

Past M&A: Return on Investment

84

267

Returns

(Total value + unrealized gain)Investment amount

3.2 X


• TVPI: 3.2

• Gains: 18.3 billion yen(including unrealized gain)

8.4

26.7


Achieve a V-Shaped Business Turnaround Fast

Category Key initiatives

① Rebranding• Redesign the brand definition

• Focus on profitable brands

② Enhance

competitiveness of

products

• Recruit experienced technical creators

• Increase special orders to suppliers and incorporate the

latest fashion trends into products

③ Enhance effectiveness

of sales

• Transform sales and channel strategies and practices

(Improve in-store customer service and sales

associates’ upsell skills; consider opening flagship

stores)

④ Restructure business

processes

• Overhaul business processes from end to end

(including business management, merchandising, store

planning, and logistics)

Achieve a V-shaped business turnaround fast by

injecting the RIZAP Group’s wealth of know-how and

resources


JEANS MATE: Rebranding


JEANS MATE: Store Renovation

69


JEANS MATE: Store Renovation


JEANS MATE: Transformation of Business Management

x

Launched a business-management transformation project that

focuses on pursuing the best interests of the company, working with

Goldratt Consulting, which sold more than 10 million copies of The

Goal around the world

The first workshop session with

Goldratt Consulting held on

February 18, 2017


in partnership with PADO Corporation,

publisher of the most widely circulated free

paper in Japan

RIZAP Group launched a media business

Announced on February 13, 201772


Most Widely Circulated Free Paper in Japan

Top 10 Free Papers by Circulation

Source: Statistics published on publishers’ websites and the Japan Free Newspaper Guide 2016

Free paper PublisherCirculation* (in millions of

copies)

1 PADO PADO Corporation 9.62

2 Living ShimbunSankei Living

Shimbunsha Inc.7.90

3 Hot Pepper Recruit 5.86

4 Woman LifeWoman Life Shimbunsha,

K.K.3.98

5 Town Work Recruit 3.00

6 Teinen Jidai Shimbun Hensyu Center 2.50

7 High Carat Ardent-Wish Inc. 2.44

8 Town News Townnews-sha Co., Ltd. 2.34

9 Chiiki Shimbun Chiiki Shimbunsha 2.12

10 Yomiuri FamilyYomiuri Jyoho Kaihatsu

Osaka1.59

The most widely

circulated free

paper in Japan


PADO Readership

80% of PADO readers

are in their 20s, 30s

and 40s

*Based on PADO selected reader questionnaire

Readership Comparison by Age Group

Communicate to this

demographic as

potential customers of

RIZAP programs

7.1%

15.1%

14.4%

40.1%

24.1%

23.4%

31.1%

10.9%

23.3%

10.5%

0% 20% 40% 60% 80% 100%

新聞

ぱど

20s and

younger 30s 40s 60s and

older50s

Newspapers30s 40s 50s

20s and

younger

60s and

older


Creating Group Synergy Using New Media Vehicles

Examples of synergy created by the use of new media vehicles

New media

vehicle for the

elderly

RIZAP for the

elderly

New media vehicle

for health and

beauty products

Key products

offered by Group

companies

Maximize the synergy among Group

companies


Enhance the effectiveness of the media marketing

platform to maximize group synergy

Maximizing Group Synergy

Media

business

group

・・・

Publication Printing Community mediaRIZAP media

marketing department

Housing-related

lifestyle business

group

Entertainment

business

group

Beauty and health

business group

Apparel business

group


Building a more robust management platform as a

basis for substantially growing the RIZAP Group

Upgrading the Management Platform

Media marketing

Strategic areas to be enhanced in the group-

wide platform

Purchasing IT and SCM Logistics

・・・

Implementing initiatives to dramatically upgrade each

area of operations(by recruiting senior executives from outside, partnering with other

companies, and pursing M&A opportunities)


Maximize

RIZAP Group’s Corporate

Value


Highlights of 3Q Results

1. Achieved revenue and profit growth for 4 consecutive fiscal years and made profits in every segment

2. RIZAP’s core business has entered a new growth phase, fueled by the increasing revenues from the elderly

3. Ready to expand the RIZAP GOLF business significantly in FY2017

4. Ready to maximize the Group’s corporate value by achieving greater synergy among Group companies


Business forecasts for FY2016 remains

unchanged, on track of significant

growth

Consolidated Business Forecasts for Fiscal Year Ending March 31, 2017

Results of

Fiscal Year

Ended March

2016

Forecast for

Fiscal Year

Ending March

2017

Year-on-year

Changes

(Amount)

Year-on-year

Changes

(%)

Revenues 55,448 100,000 +44,552 180.3%

Operating income 5,066 10,150 +5,084 200.3%

Income attributable to

owners of parent

company2,466 6,000 +3,534 243.3%



The number of complimentary items of

merchandise offered to our shareholders doubled

Upgraded the Shareholder Benefits Program


Maximize RIZAP Group’s Corporate Value

Committed to

achieving revenues

of 300 billion yen in

FY2020

0908072006 10 1711 12 13 14 15 16

55.4

100

(in billions of yen))

(Forecast)

Consolidated Revenues

(Stock listed)


Committed to achieving operating income of 35 billion

yen in FY2020

0908072006 10 1711 12 13 14 15 16

5.0

10.1

Maximize RIZAP Group’s Corporate Value


(Forecast)

Consolidated Operating Income

(Stock listed)


To realize a world

in which everyone shines

with a smile and confidence

84


This material is provided for the sole purpose of sharing information about RIZAP

and the RIZAP Group and not intended to solicit investment in our stock.

The opinions and forecasts presented in this material represent our views at the

time of the preparation of the material, and we make no guarantees or warranties

as to the accuracy or completeness of the information, which may be subject to

change at any time without notice.

RIZAP Group, Inc.

https://www.rizapgroup.com/

We appreciate your continued support.

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