Download - ANNUAL REPORT 2018 Year ended February 28, 2018 · (Shingeki-no-Kyojin TEN) 2014 ©Hajime Isayama, Kodansha, “Attack on Titan Exhibition ” Production Partnership 120th anniversary

Code：9716

ANNUAL REPORT 2 0 1 8 Year ended February 28, 2018

1NOMURA Co., Ltd. Annual Report 2018NOMURA Co., Ltd. Annual Report 2018

Edit ing PolicyThe Annual Report 2018 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 2018 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.

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.

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.

NOMURA’s 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.

Annual Report 2018

ContentsPutting 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.

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

about investor relations.

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

IR Library (Japanese only)

1

Corporate Governance Guidelines

Chapter I General Provisions

(Basic Views on Corporate Governance)

Article 1

NOMURA Co., Ltd. (the “Company”) constantly aims for the best possible corporate governance and is constantly taking actions to upgrade corporate governance.

2 The Company is dedicated to the transparency and fairness of making decisions from the standpoint of achieving sustained growth and long-term growth of corporate value. In addition, the Company 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 basic views.

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 the transparency of

this information. 4. The Board of Directors and Board of Auditors fulfill their roles and duties

based on their fiduciary responsibilities to shareholders and responsibility to provide explanations.

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

Chapter II Securing the Rights and Equal Treatment of Shareholders

(General Meeting of Shareholders)

Article 2

The Company promptly posts notices of convocation of the ordinary

Corporate Governance Report

Last Update: January 8, 2016

NOMURA Co., Ltd. Shuji Enomoto, President and CEO

Contact: +81-3-5962-1119

Securities Code: 9716

http://www.nomurakougei.co.jp/ir/

The corporate governance of NOMURA Co., Ltd. (the “Company”) is described below.

I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1. Basic Views NOMURA constantly aims for the best possible corporate governance and is constantly taking actions to

upgrade corporate governance.

The Company is dedicated to the transparency and fairness of making decisions from the standpoint of

achieving sustained growth and long-term growth of corporate value. In addition, the Company 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 basic views.

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 the transparency of this information.

4. The Board of Directors and Board of Auditors fulfill their roles and duties based on their fiduciary

responsibilities to shareholders and responsibility to provide explanations.

5. We hold constructive dialogues with shareholders who have investment policies that are consistent with

the medium to long-term interests of shareholders.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]

[Reasons for Non-compliance with the Principles of the Corporate Governance Code]

The Company is currently not in compliance with part of the four principles and is studying this matter. We

are taking the following actions.

[Supplementary Principle 1-2-4 Use of Shareholder Voting Platform]

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

Corporate Value Creation Process

2 History of Corporate Value Creation4 NOMURA’s Business8 Source of 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 Section

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

Notes: 1. The above is the NOMURA GROUP’s overarching corporate philosophy and brand statement. 2. For the purposes of this text, “NOMURA” refers to the NOMURA GROUP as a whole.

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).

1960 1970 1975 1980

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

NOMURA works on themed pavilions, government pavilions, and 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

GIKEN KOUGEI Co., Ltd. (now NOMURA PRODUCTS Co., Ltd.) becomes a subsidiary through a stock transfer.Shinkiba Studio built (now Shinkiba Office).

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 DUO Co., Ltd. established.1996

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).

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

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

2006

2008

120th anniversary2012

NOMURA PRODUCTS Co., Ltd. established.

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

2014

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

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

2015

2016

2017

2011Institute of Cultural Environments established(now RIKUYOSHA Co., Ltd.).NOMURA TECHNO Co., Ltd. established.

19951892Founded by Taisuke Nomura in Takamatsu. NOMURA initially creates sceneshifting services for theaters. Its base is moved to Tokyo in the 1910s.

’

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 Expo ’70 Commemorative Park Office

Ni-Tele Clock (design by Hayao Miyazaki)

2006　

TOKYO Solamachi®

2012　

Sanuki Pavillion, NationalIndustrial Exhibition (Takamatsu Expo)1928

SEIKO Mullion Clock1984

Store decorations,Takashimaya Osaka Store1947

Tsukuba Expo ’85 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 Headquarters 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

Corporate Value Creation ProcessHistory of Corporate Value Creation

3NOMURA Co., Ltd. Annual Report 2018 NOMURA Co., Ltd. Annual Report 20182


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.

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.

Toyota Automobile Museum Renovation

A team of producers of spaces that attract customers

Diverse advances in the display world

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 work ̶ providing delight and passion to the consumers who visit our clients’ spaces ̶ remains unchanged.

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’s 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 MuseumsScienceMuseums,

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

Corporate Value Creation ProcessNOMURA’s Business


2014 2015 20162012(FY) 2013

1,4101,530 1,540

1,3301,250

2017 2020 20302014 20162013 2015

40.00

60.00

24.04

13.4110.36

19.74

28.69

The display industry is estimated to be an around ¥1,540 billion industry as of 2016, with the sales of the top 30 companies accounting for around ¥746 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 2016 was 15.5% 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 domain of the display industry is closely related to the construction, real estate development, advertising and event industries. The growing number of overseas visitors to Japan and the upcoming Tokyo 2020 Olympics and Paralympics offer the potential for a significant upturn in these industries, including the display industry. With market conditions expected to remain strong until 2020, we need to use this time to make preparations for after that year. This will include developing a digital communications domain, establishing overseas business and working on regional revitalization efforts. Efforts such as these will keep us in the top spot of the display industry, where we will continue to contribute to the development of Japanese society.

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

How the display industry is changing with the times

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: ¥1,540 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)

Change in Scale of Display Market(billions of yen)

Market Domain and Related Industries Shift in Numbers of Overseas Visitors to Japan(millions of people)

*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

Market Share of the Top 30 Companies in the Display Industry

9.5%

6.6%

4.6%

4.5%

15.5%

Total Sales ofthe Top 30 in 2016

¥745.9 billion NOMURA Company A Company B Company C Company D Others

Note: The above figures were calculated by NOMURA

Source: Yano Research Institute Ltd. Source: Investigation of Consumption Trends among Overseas Visitors to Japan by the Japan Tourism Agency

Tokyo 2020 Olympics and Paralympics

Integrated resort (IR) concept

Panasonic Center OSAKA “Re-Life Story ̶ Home Connected with Nature for Playing Innocently and Being Self-absorbed”Kikuchi City LibraryKamome Terrace Matsuri No Yu Hot Spring area at Seibu-Chichibu Station

Tower of the Sun Rebirth ProjectKonosuke Matsushita MuseumG-Takaya (Hexi Golden Eagle Shop, Nanjing)Lumine Singapore (Clarke Quay Central)

Corporate Value Creation ProcessNOMURA’s Business


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.

A network with the top industry share

The three strengths that make us number 1 in the industry

The NOMURA Group works on 14,079 projects for 2,798 clients every year. 78.7% 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.

The 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.

Power of Creativity

Power of Production

Comprehensive Power

Comprehensive Power

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

Where the NOMURA Group’s Domestic and Overseas Branches Are Located

Group Companies Overseas

● ● ● ●

● ● ● ●

Percentage of net sales from repeat clients

78.7%

Number of contracted projects per year

14,079Number of clients

2,798companies

*The above information is correct as of February 28, 2018.

*The above information is correct as of February 28, 2018.

*The above information is correct as of May 31, 2018.

Corporate Value Creation ProcessSource of Corporate Value Creation

NOMURA PRODUCTS Co., Ltd.Planning, design, manufacturing and construction

of the architecture, building redevelopment, interior design and signs for the 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 the tea drink and goods 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.Book editing,

printing, publishing, and sales

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

design for exhibition, interior and decoration

Display and promotion creation for visitor-attraction spaces

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）


Power of ProductionPower of Creativity

Winners of many prestigious design awards both in Japan and overseas

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

Creating new value in spaces

Construction management professionals pursuing a high standard of quality and safety

The 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.

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.

In September 2016, we started the Nomura Open Innovation Lab (NOMLAB) as a new function for developing our digital communications domain. Through this facility, we aim to attract new customers by combining digital innovation with space creation.

In February 2016, we collaborated with nendo Inc., a company headed by world-famous designer Oki Sato, to form the space design office onndo in our organization.

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

The 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 planners and designers 470

At the awards ceremony for the Design for Asia Awards 2017

First-class registered architects 104Design

awards won 66*For 2017, including awards for which we placed Number of

product directors 480 First-class building operation and management engineers 241

*Employee numbers are for the entire NOMURA Group (including contracted employees) as of February 28, 2018

*Employee numbers are for the entire NOMURA Group (including contracted employees) as of February 28, 2018

3rd Advanced Digital Technology Expo

Corporate Value Creation ProcessSource of Corporate Value Creation


Accelerating our efforts to compete on a whole new

dimension

Masaru WatanabeChairman of the Board & CEO

Shuji EnomotoPresident & CEO

Management StrategiesMessage from the Management

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 will rethink the chain of values that our products and services provide from our customers’ perspective. We will propose 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.

NOMURA Long-Term Vision N22

Striving to become the Prosperity Partner that will be needed in 2022 In 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

Consolidated Forecastfor FY 2019

・Net Sales: ¥140.0 billion ・Operating Income: ¥9.5 billion

Be the Only Partner That All of

Our Clients Need

The three steps to achieving N22


Management StrategiesMessage from the Management

The first year of this Medium-Term Management Plan: Major reorganizationBuilding a framework for one-stop provision of a wide range of solutionsThe 2017 fiscal year marked the first year of our 2017-2019 Medium-Term Management Plan to “compete on a whole new

dimension.” We set NOMURA up for medium- to long-term development with a major reorganization, reshuffling our

organization from the conventional vertical divisions by market (commercial, corporate, cultural, etc.) into a format where

the whole company centers on horizontal axes representing our greatest strengths: creativity, products and promotion. We

have created a framework enabling our account managers to build optimal teams to suit the unique characteristics of each

project. This improves our ability to connect the various sources of experience, networks and knowledge that we have built

up throughout over 120 years of business, and makes it easier to cross-sell combinations of products and services.

Throughout the three years of this Medium-Term Management Plan, we will optimize this new organizational framework

and build a framework to provide one-stop solutions with the variety of solutions that the NOMURA Group has at its

disposal.

Further increases in revenue and profit in FY2017, with operating margin increasing by 0.5 percentage pointFinancial results for the first year of our Medium-Term Management Plan were strong, with an increase in revenue due to

plenty of projects in the Public Relations and Sales Promotion market segment and Museums market segment, along with

an improvement in group companies’ results. Gross profit to net sales increased for the fifth year in a row ― an unbroken

streak since FY2012 ― due to the establishment of our production framework and creation of thorough process

management procedures. NOMURA achieved an overall gross profit to net sales rate of 20% for the first time, and

operating profit margin increased by 0.5 percentage point to 7.1%. Sales increased for the fourth year in a row, operating

income and ordinary income increased for the ninth year, and net income attributable to shareholders of the parent

increased for the seventh year.

Implementation of three business strategies for further developmentTurning our marketing and communications business into a major pillar of the CompanyIn the 2018 fiscal year, we will continue to work on the three business strategies set out in our Medium-Term Management

Plan: expanding our business domain, increasing profits and expanding our markets, products and technologies.

We will approach our aim to expand our business domain with the mindset “creating and prospering together with our

customers.” We will not merely take on space-related projects but become actively involved in our customers’ businesses,

working to achieve prosperity for our customers and expansion of the NOMURA Group alike.

To increase profits, we have been creating and improving operational processes and strengthening our advance risk

management and project management. We have also been improving our working environments to get the most out of all

of our employees. We relocated our Osaka Office in October 2017, and in March 2018 we moved a group company based in

the Shin-Kiba area of Tokyo to Daiba where our head office is located. We also converted one floor of our Daiba head

office to a communication area. These changes are expected to increase motivation, further strengthen ties between

departments and other entities in the group, and improve productivity.

To expand our markets, products and technologies, we have been strengthening our corporate and brand

communication and our ability to propose sales techniques and events, promotions to attract customers to facilities, and

space presentation using digital technology. These are being strengthened collectively under the framework of our

marketing and communications business. We are also deepening and broadening initiatives with external alliances in

mind, so that we can provide total value that will bring prosperity to our customers’ businesses. Marketing and

communications are the lifeblood of the NOMURA Group’s business, and we aim to further develop our strengths in this

area to set ourselves apart from our competitors and make this a major pillar of the Company.

Consolidated Forecast (millions of yen)

FY2017 FY2018Forecast

Net Sales ¥115,841 ¥120,000

Operating Income 8,171 8,300

Ordinary Income 8,373 8,500

Net Income* 5,638 5,900

Net Income per Share (yen) 101.36 106.05

ROE (Return on Equity) 15.1％ 15.0％ or more

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

45.0 47.0

As the second year of our Medium-Term Management Plan, FY2018 will be a critical year. As the Tokyo 2020 Olympics

and Paralympics draw closer, demand for related facilities, events and pavilions for each country and sponsor companies

is hitting its stride, The NOMURA Group will respond by working to further strengthen our framework for gaining

project orders and use this historic event as an opportunity to strengthen the NOMURA Group’s customer base both

domestically and overseas so that we can achieve the goals of our Medium-Term Management Plan, and continue to

grow in leaps and bounds after 2020.

We hope that our shareholders and other investors will continue to offer us support and encouragement as we work

on these exciting new initiatives.

Further increases in revenue, profits and dividends planned for FY2018In this industry, improvements in corporate revenue mean that a gradual increase in facility investment can be expected,

and it is predicted that the situation concerning project orders will be favorable.

In terms of market trends, increased investment is expected in a wide range of fields due to the Tokyo Olympics and

Paralympics in 2020. Specific investments include expansion of urban redevelopment such as development of commercial

facilities, airports and stations, projects in the tourism sector such as building and renovation of hotels and expansion of

activity-based and themed attractions, and environment improvement in corporate offices, PR facilities and educational

facilities such as schools as part of initiatives to improve working practices and combat the issue of Japan’s declining

population and aging population.

Many of the NOMURA Group’s projects will be billed in the second half of FY2018, and our figures will therefore be

concentrated in the second half, but we 2020 will take advantage of the current conditions and continue to increase

revenue and profits with the aim of achieving our best figures yet. Increases in labor costs and other expenses are expected

as labor force increases in preparation for the Tokyo 2020 Olympics and Paralympics, which will result in an increase in

sales, general and administrative expenses, but we are aiming to achieve a high gross profit margin and increase profits by

increasing sales and improving productivity through measures such as development of a production framework,

improvement of working practices and aggregation of purchase information.

Returning profits to our shareholders is one of the NOMURA Group’s most important business responsibilities, and

as we grow our business, we will keep dividends in mind, increasing net income attributable to shareholders of the parent

and strengthening the foundations of our business, while also being on the lookout for ways to expand our business in

future. Based on this policy, our annual dividends for this fiscal year were ¥45 per share, a ¥5 increase on the previous year.

In FY2018, we plan to increase this by a further ¥2 to ¥47 per share. The NOMURA Group will continue to strengthen the

foundations of our company so that we can steadily improve on our strong results and continuously return high profits to

our shareholders.

*Net Income Attributable to Shareholders of the Parent


Basic Corporate Governance Policy

Independent Supervision

Outside Directors

Statutory Auditors

Corporate Governance Structure (as of May 24, 2018)

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 dialogues with shareholders who have investment policies that are consistent with the medium- to long-term interests of shareholders.

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/ Relationships with NOMURA Attendance at Board of Directors’ meetings during the 2017 fiscal year

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

11 of 11 meetings (100%)

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

11 of 11 meetings (100%)

Name Reason for Appointment/ Relationships with NOMURA Attendance at Board of Directors’/ Auditors’ meetings during the 2017 fiscal year

Hikoyuki Miwa

Mr. Hikoyuki Miwa was elected a statutory auditor and registered as an independent officer given that he is equipped with a wealth of experience and outstanding knowledge as an accounting expert, and that he is in an objective position independent from the Company’s executive management.

Board of Directors’ meetings:10 of 11 meetings (90.9%)

Board of Auditors’ meetings:8 of 9 meetings (88.9%)

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.

（Appointed May 2018）

As a company with corporate auditors, NOMURA has elected eight directors (including two outside directors) and four 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 two 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.

Board of DirectorsComprising eight directors including two independent outside directors

and four 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 four 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 managers’ meetings 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.

ESG InformationCorporate Governance


Director Compensation

Executives (as of May 24, 2018)

Rigorous Adherence to Compliance Requirements

NOMURA calculates the amount of compensation for each director and auditor in consideration of his/her title, whether he/she is a full-time or

part-time director or auditor, as well as the nature of his/her 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 Directors’ 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 11 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 Auditors’ 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 on 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 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 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.

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) 463 355 ─ 108 ─ 9

Outside directors 17 17 ─ ─ ─ 2

Auditors (excluding statutory auditors) 21 21 ─ ─ ─ 1

Statutory auditors 16 16 ─ ─ ─ ２

Executive Officers Senior Officers Makoto Kanehira

Akihiko Yamazaki

Katsuhiko Yoshida

Fukuzou Okuno

Yuki Doi

Shinji Sakai

Board of Directors Chairman of the Board & CEO Masaru Watanabe

President & CEO Shuji Enomoto

Senior Vice Presidents Masahiro Nakagawa General Manager - Corporate Department; CEO - RIKUYOSHA Co., Ltd.

Kiyotaka Okumoto*1 General Manager - Business Supervision Department, Creative Department, Nomura Tokyo 2020 Office; CEO - NOMURA (Beijing) Co., Ltd.

Board Directors Tadashi Owada*1 General Manager - Business Unit 2

Shuichi Makino General Manager - Business Unit 3

Outside Directors Mitsuo Sakaba

Etsuko Komiya

Auditors Standing Statutory Auditor Masanori Sato

Auditor Koichi Takemura

Statutory Auditors Hikoyuki Miwa

Yasuharu Fushimi

*2 NOMURA offers a “Director Class” allowance for our highest-ranking technical staff.

*1 Including the job titles changed on June 4, 2018.

Front row, from left: Shuichi Makino, Kiyotaka Okumoto, Shuji Enomoto, Masaru Watanabe, Masahiro Nakagawa, Tadashi Owada,Back row, from left: Yasuharu Fushimi, Koichi Takemura, Etsuko Komiya, Mitsuo Sakaba, Masanori Sato, Hikoyuki Miwa

Notes: 1. As of February 28, 2017, NOMURA had 11 directors and three auditors. 2. The annual compensation limit established at the General Meeting of Shareholders as of February 28, 2018 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).

Officers Hironobu Takeda Makoto Kurihara

Shin Sugimoto Kiichiro Yasumi

Koichi Matsuo Yoshiaki Yamaguchi

Takayuki Yoshida Yujiro Kawanishi

Director Class*2 Shigechiyo Suzuki Kenji Tomibayashi

Ryu Kosaka

ESG InformationCorporate Governance


The Environment Quality and Safety

Quality, the Environment and Safety

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.

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, including holding in-house seminars.

*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.Declaration of Support for the Fair Wood Campaign: The “NOMURA Timber Procurement Guideline”

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

The NOMURA Group’s Policies for Quality, the Environment and Safety

ESG InformationCorporate Social Responsibility (CSR)

NOMURA uses a variety of local resources

New of�ce with outstanding design incorporating wood and technical crafts from various communitiesAozora Bank Head Office (2017)Local resources: Materials from Hokkaido, Miyagi,

Yamanashi, Hyogo, Toyama, Oita, Yamagata, Fukuoka, Hiroshima and Gifu prefectures

Prizewinner in Social Design category of Wood Design Award 2017

A new center of prosperity that brings together a variety of the Chichibu area’s greatest features Seibu-Chichibu Station renovation and Seibu-Chichibu Station Hot Springs Matsuri No Yu (2017)Local resources: Wood from Saitama Prefecture (cypress)Winner of Good Design Award 2017

Expressing the value of Mt. Fuji through the unique materials and style of YamanashiFujisan World Heritage Center, Yamanashi Prefecture (2016)Local resources: Wood from Yamanashi Prefecture

(cypress, mountain cherry, oak)Selected for Best 50 at DSA Design Award 2017

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

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. 　We are also working to improve productivity through BIM*1 and digital fabrication*2. A work combining 219 iron sheets made through these techniques was exhibited at the Advanced Digital Technology Expo in 2017. This work is now a permanent exhibit at the NOMURA Training Center.

The NOMURA Training Center, an Interactive Training Facility

Training at the Training Center (results for 2017)

94training sessions held

1,345attendees

*1 Building information modeling, a method in which information on a building, such as structure, design, �nish and price, is included in a 3D digital model. This model is used in all related processes including design, construction and management.

*2 A technique in which data automatically generated by a computer is directly input into a digital machine tool such as a laser cutter to minimize manual production work to the greatest extent possible.

A seminar at NOMURA Training Center

NOMURA Training Center

An exhibit of NOMURA’s innovative work combining 219 iron sheets


Social and Cultural Involvement Initiative for the Advancement of Women

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

For Nihonbashi Toyama-kan, an antenna shop for Toyama Prefecture, we drew out Toyama’s hidden potential by selecting, procuring and designing local wood materials

throughout various processes, including raw wood, wood products and processed items.

NOMURA held a meeting in March 2018 for supporters of the Declaration on Action by a Group of Male Leaders Who Will Create a Society in which Women Shine, an initiative by male corporate leaders who are actively working to promote women’s advancement in the workplace. Around 130 people attended, including the president of NOMURA.　The NOMURA Group will work to create good working conditions for female and male employees alike and enable all employees to put their skills to use.

A workplace initiative that all employees can get involved in

NOMURA Supports the Declaration on Action by a Group of Male Leaders Who Will Create a Society in which Women Shine

Meeting for supporters of the Declaration of Action (the president of NOMURA is second from the right in the second row)

Since the Great East Japan Earthquake in March 2011, the NOMURA Group has continually provided support related to manufacturing and space creation that we are in the best position to offer. In addition to various workshops using local resources, we hold an exhibition of “Light Boxes” created by people in Tokyo and the affected areas in the Tohoku region. We also work with local educational organizations and administrative bodies to provide career support for the next generation, in whose hands the future will rest. We plan to continue working with the people of Tohoku to create even greater things.

The NOMURA Group’s recovery support project for areas affected by the Great East Japan Earthquake

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.

NOMURA has a support program for staff on childcare leave, led by our Diversity Promotion Office. Support is provided through measures such as seminars and group discussions about frameworks and work formats

to be employed on the staff member’s return so that staff members can be active in the workplace after

returning from childcare leave. Twelve staff members plan to return to NOMURA in 2018. Three male staff members also took paternity leave in 2017. We strive to create a company where employees can balance childcare and work.

Support for employees returning from maternity and childcare leave

Initiatives of Diversity Promotion Office

Support Program for Employees Planning to Return from Childcare Leave

Creating an environment where people can get active

Initiatives for a Health and Sports Culture

Team M is made up of female employees currently raising children. The members use their �rsthand experience to incorporate their insights into space design and work with our clients to solve issues. Their products mainly include kids’ spaces in commercial and cultural facilities, and creation of spaces that will be used by families with children, such as nursing rooms and family rest areas. 　In January 2018, Team M teamed up with Associate Professor Ayako Naka from the Faculty of Human Life Design at Toyo University to publish a bilingual book in Japanese and English called Kodomo to Otona no Kukan Dezain (Designing Spaces for Children and Adults). Facility designers and operators were interviewed for the book and many examples were included to inform readers about new spaces that are comfortable for children and adults alike and prompt thought about future space creation.

Space creation from the perspective of female employees raising children

Team M

Kodomo to Otona no Kukan Dezain (Designing Spaces for Children and Adults)

(Sangakusha)

Percentage of Employees Returning to the Workplace after

Maternity Leave or Childcare Leave during the Last 5 Years

(FY2013-FY2017)

100%

ESG InformationEfforts to Improve NOMURA’s Social Value

NOMURA works with the Japan Para Powerlifting Federation. A NOMURA employee, Tetsuo Nishizaki, is a para powerlifter himself and competes in international tournaments while working on social action such as attending many events held to promote para sports. With to the relocation of our Osaka of�ce, the training room has been moved and expanded, and the of�ce is now a base for the NOMURA Powerlifting Club (along with our headquarters in Tokyo). NOMURA is also involved with the Street Rugby* Alliance, which works on popularization activities to expand Japan’s rugby scene.

Tetsuo Nishizaki, a para powerlifter and NOMURA employee. He represented Japan in the 2016 Paralympics in Rio de Janeiro.

*A three-per-side rugby game. Instead of tackling, players must stop moving when touched by an opponent, allowing men and women, children and adults, and experienced and inexperienced players to play together.

NOMURA is an official supporter of the Japanese Para Powerlifting Federation.

URL: http://www.gender.go.jp/english_contents/mge/declaration/index.html


Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2017

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

Net Sales ¥ 87,248 ¥ 80,436 ¥ 90,105 ¥ 87,464 ¥ 101,316 ¥ 98,410 ¥ 103,129 ¥ 108,340 ¥ 115,561 ¥ 115,841 $ 1,078,902

Gross Profit 12,743 11,455 12,072 11,957 13,733 15,960 17,281 19,760 22,722 23,129 215,416

Selling, General and Administrative (SG&A) Expenses 12,176 10,610 10,952 10,741 11,521 11,646 12,069 13,726 15,113 14,957 139,308

Operating Income 567 845 1,120 1,215 2,212 4,313 5,211 6,033 7,608 8,171 76,108

Ordinary Income 820 1,282 1,288 1,325 2,383 4,381 5,434 6,200 7,809 8,373 77,986

Net Income Attributable to Shareholders of the Parent 175 407 403 604 1,242 1,845 3,193 3,841 5,056 5,638 52,518

Orders Received 79,320 82,422 86,808 87,951 102,061 96,399 102,277 107,997 114,733 113,156 1,053,893

Orders Backlog 20,973 25,089 23,838 26,244 29,448 30,033 31,581 33,584 35,184 35,132 327,207

Total Assets 49,897 53,011 52,861 54,344 58,340 59,477 62,805 65,256 72,361 76,443 711,967

Trade Notes and Accounts Receivable 16,885 20,319 19,609 20,850 14,354 16,327 19,518 20,472 20,072 26,777 249,396

Inventories 5,025 6,107 6,927 8,277 8,098 8,652 8,644 8,754 7,479 6,359 59,233

Net Assets 25,073 24,907 24,679 24,883 26,044 27,459 29,992 31,619 35,268 39,344 366,434

Capital Investment 274 271 134 369 324 327 1,264 1,165 239 619 5,768

Depreciation 882 861 819 797 890 839 802 1,012 995 895 8,338

Free Cash Flow (2,189) (1,297) 1,959 (1,451) 12,400 (1,314) 7,389 4,874 10,158 1,106 10,302

Financial Data (%)

Gross Profit to Net Sales 14.6 14.2 13.4 13.7 13.6 16.2 16.8 18.2 19.7 20.0 ─Operating Income to Net Sales 0.7 1.1 1.2 1.4 2.2 4.4 5.1 5.6 6.6 7.1 ─Ordinary Income to Net Sales 0.9 1.6 1.4 1.5 2.4 4.5 5.3 5.7 6.8 7.2 ─Net Income to Net Sales 0.2 0.5 0.4 0.7 1.2 1.9 3.1 3.5 4.4 4.9 ─Selling, General and Administrative Expenses to Net Sales 14.0 13.2 12.2 12.3 11.4 11.8 11.7 12.7 13.1 12.9 ─ROA (Return on Assets) 1.5 2.5 2.4 2.5 4.2 7.4 8.9 9.7 11.4 11.3 ─ROE (Return on Equity) 0.7 1.6 1.6 2.4 4.9 6.9 11.1 12.5 15.1 15.1 ─Equity Ratio 50.1 46.9 46.6 45.8 44.6 46.2 47.8 48.5 48.7 51.4 ─Trade Receivables Turnover (times) 5.1 4.3 4.5 4.3 5.8 6.4 5.8 5.4 5.7 4.9 ─Inventory Turnover (times) 8.8 14.4 13.8 11.5 12.4 11.8 11.9 12.5 14.2 16.7 ─Dividend Payout Ratio 356.0 111.0 111.6 73.9 44.9 48.4 45.3 43.4 44.0 44.4 ─

Per Share Data (yen)

Net Income per Share ¥ 3.09 ¥ 7.21 ¥ 7.17 ¥ 10.82 ¥ 22.25 ¥ 33.09 ¥ 57.41 ¥ 69.05 ¥ 90.90 ¥ 101.36 ─Net Assets per Share 442.79 439.71 440.83 445.62 466.45 493.59 539.12 568.37 633.96 706.96 ─Cash Dividends per Share Applicable to the Fiscal Year 11 8 8 8 10 16 26 30 40 45 ─

Employee Data

Number of Employees 1,396 1,418 1,413 1,401 1,385 1,425 1,474 1,485 1,568 1,579 ─Net Sales per Employee (thousands of yen) ¥ 62,499 ¥ 56,725 ¥ 63,768 ¥ 62,429 ¥ 73,152 ¥ 69,060 ¥ 69,965 ¥ 72,956 ¥ 73,700 ¥ 73,363 ─Operating Income per Employee (thousands of yen) 406 596 792 867 1,597 3,027 3,535 4,063 4,852 5,175 ─Net Income per Employee (thousands of yen) 125 287 285 431 897 1,294 2,166 2,586 3,225 3,571 ─

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 ¥107.37=US$1. 3. Figures for the real estate business and the restaurant and product retail business are excluded in “Orders Received” and “Orders 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)

(yen)

Operating Income

While other selling, general and administrative expenses increased due to the expansion and relocation of our premises and the change in pro forma standard tax rate, this was offset by an increase in sales, improvement in total sales profit and a decrease in labor costs due to improved productivity and attention paid to balancing labor cost fluctuations when hiring. As a result, our operating income increased by ¥562 million on the previous fiscal year, reaching ¥8,171 billion.

Decrease in personnel expenses

Increase in other SG&A expenses

FY2016

FY2017

8,171

7,608

314

158

351Improvement of 0.3 percentage pointsin the gross profit margin

55Increase in gross profit due to a rise in net sales

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. We decided to pay a total dividend of ¥45.0 per share for 2017, marking an increase in dividends for six consecutive fiscal years.

2017

45

2016

40

201520142013

16

2630

(FY)

Financial SectionConsolidated Ten-Year Financial Summary


Net

Sal

es N

et Sales Op

erat

ing

Resu

lts Operating Results

Specialty Stores Museums

Despite NOMURA’s involvement in the building and renovation of many large commercial facilities in major cities, net sales decreased due to a decrease in the opening of stores such as apparel stores and the transfer of our restaurant maintenance business.

Net sales increased due to involvement in history, folk and science museums.

¥38.6 billion ¥11.0 billion

(Down 5.1% YoY) (Up 25.1% YoY)

Philippe Conticini Kagoshima City Museum of Archaeology


Net sales increased due to NOMURA’s renovations of large department stores and general supermarkets, as well as involvement in events and decorations.

¥6.1 billion

(Up 19.5% YoY)

Seibu Tokorozawa Renovation Project

Leisure Facilities

Despite an increased demand for hotel renovations and involvement in projects such as theme parks and hot spring facilities, net sales decreased year on year.

¥7.8 billion

(Down 21.5% YoY)

Oiso Prince Hotel

Shopping Centers

Net sales increased due to large-scale development in major cities and involvement in environment presentation projects for commercial facilities next to facilities such as station buildings.

¥13.3 billion

(Up 14.8% YoY)

Trie Keio Chofu

Expositions and Creative Events

Net sales decreased from the previous fiscal year. Sales for the previous year were unusually high due to a project related to Expo Milano 2015 and international political events.

¥0.6 billion

(Down 70.1% YoY)

Kyoto Infused with Tea Expo


Net sales increased due to PR facility projects in industries such as the appliance, pharmaceutical, automobile and service industries, along with involvement in showrooms and expo events such as the Tokyo Motor Show.

¥19.7 billion

(Up 12.8% YoY)

The 45th Tokyo Motor Show 2017: Toyota Booth

Others

Despite involvement in many environment presentation projects for corporate offices and even an airport and nursery school, net sales decreased from the previous fiscal year because there had been particularly large-scale projects and special requests during the previous year.

¥18.3 billion

(Down 6.3% YoY)

Aozora Bank Head Office Relocation Project

Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Specialty StoresOrders Received ¥26,423 ¥31,613 ¥33,893 ¥37,155 ¥44,165 ¥43,134 ¥44,053 ¥44,911 ¥40,719 ¥34,742

Orders Backlog 3,911 5,995 4,746 7,678 8,275 9,391 9,839 9,730 9,720 5,830


Orders Received 8,643 5,576 6,119 6,133 7,559 6,787 7,042 7,128 5,168 6,767

Orders Backlog 1,638 917 827 739 978 1,500 1,413 926 934 1,536

Shopping CentersOrders Received 7,346 6,055 11,748 6,923 9,013 5,061 8,510 9,329 13,579 10,382

Orders Backlog 3,044 1,799 5,253 3,436 4,395 2,621 4,023 4,501 6,452 3,481


Orders Received 15,732 15,796 15,363 15,289 16,710 17,320 17,128 19,143 17,137 21,594

Orders Backlog 3,147 3,733 3,335 3,539 4,984 4,484 3,274 3,294 2,904 4,734

MuseumsOrders Received 6,564 11,143 6,352 6,235 6,330 8,773 10,217 7,588 8,595 12,516

Orders Backlog 3,842 7,679 6,400 3,654 2,546 4,325 7,152 5,984 5,728 7,175

Leisure FacilitiesOrders Received 5,075 4,891 3,760 4,410 8,983 6,475 4,846 7,427 9,823 11,556

Orders Backlog 1,985 2,267 1,039 1,990 4,667 3,253 1,179 3,325 3,125 6,815

Expositions and Creative Events

Orders Received 2,139 997 1,219 686 822 215 1,047 959 1,595 459

Orders Backlog 737 689 146 374 350 148 717 674 237 89

OthersOrders Received 7,395 6,348 8,351 11,116 8,475 8,631 9,431 11,508 18,114 15,137

Orders Backlog 2,665 2,006 2,087 4,830 3,250 4,306 3,981 5,147 6,080 5,467

TotalOrders Received ¥79,320 ¥82,422 ¥86,808 ¥87,951 ¥102,061 ¥96,399 ¥102,277 ¥107,997 ¥114,733 ¥113,156

Orders Backlog 20,973 25,089 23,838 26,244 29,448 30,033 31,581 33,584 35,184 35,132

Orders Received and Orders 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 “Orders Received” and “Orders 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 FY2014 due to the sale of the relevant subsidiary. 3. Net sales by business segment (FY2017): display business (¥113,208 million) / restaurant and product retail business (¥2,632 million).

Fiscal Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Specialty Stores ¥29,309 ¥29,529 ¥35,142 ¥34,224 ¥43,567 ¥42,017 ¥43,606 ¥45,020 ¥40,729 ¥38,632

Department and Merchandise Stores 8,948 6,297 6,209 6,221 7,321 6,265 7,129 7,614 5,160 6,164

Shopping Centers 6,959 7,300 8,294 8,740 8,054 6,835 7,108 8,851 11,628 13,353

Public Relations and Sales Promotion 18,037 15,209 15,761 15,085 15,265 17,820 18,338 19,124 17,527 19,764

Museums 6,353 7,305 7,631 8,981 7,439 6,994 7,389 8,745 8,851 11,070

Leisure Facilities 4,568 4,610 4,987 3,459 6,307 7,889 6,920 5,280 10,023 7,866

Expositions and Creative Events 1,760 1,045 1,762 459 846 417 479 1,001 2,032 606

Others 11,310 9,137 10,315 10,291 12,513 10,171 12,156 12,700 19,608 18,383

Total ¥87,248 ¥80,436 ¥90,105 ¥87,464 ¥101,316 ¥98,410 ¥103,129 ¥108,340 ¥115,561 ¥115,841

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

Financial SectionReview of Operations by Market Segment Fiscal 2017


2017

8,17

1

2016201520142013

6,03

3

2,21

2

4,31

3 5,21

1

2012

7.17.15.65.6

7,60

8

6.66.65.15.1

4.44.4

2.22.2

2017

115,

841

2016201520142013

108,

340

101,

316

98,4

10

103,

129

2012

20.020.0

18.218.2

115,

561

19.719.7

16.816.816.216.2

13.613.6

2017

45

2016201520142013

30

10

16

26

2012

44.444.443.443.4

40

44.044.045.345.348.448.4

44.944.9

201720162015201420132012

11.311.39.79.7

8.98.97.47.4

4.24.2

15.115.1

12.512.5

11.411.4

15.115.1

11.111.1

6.96.94.94.9

2017

76,4

43

2016201520142013

65,2

56

58,3

40

59,4

77

62,8

05

2012

39,3

44

31,6

19

72,3

6135

,268

26,0

44

27,4

59

29,9

92

2017

113,

156

2016201520142013

107,

997

102,

061

96,3

99

102,

277

2012

35,1

32

33,5

84

114,

733

35,1

84

29,4

48

30,0

33

31,5

81

2017

5,63

8

2016201520142013

3,84

1

1,24

2

1,84

5

3,19

3

2012

4.94.9

3.53.5

5,05

6

4.44.4

3.13.1

1.91.91.21.2

2017

1,10

6

2016201520142013

4,87

4

10,1

5812,4

00

△1,

314

7,38

9

2012

■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 / %)

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

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

■Orders Received / ■Orders 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)

Net Income Attributable to Shareholders of the ParentNet income attributable to shareholders of the parent was up ¥581 million, or 11.5%, from the previous fiscal year to ¥5,638 million. NOMURA recorded an extraordinary loss of ¥1,093 million, due mainly to the recording of business structure improvement expenses and a loss on impairment of the fixed assets (the former Osaka office building).

Operat ing Results by Business SegmentDisplay BusinessSales declined in the specialty stores market due to a decrease in the opening of stores such as apparel stores and the transfer of our restaurant maintenance business. Sales were also lower in the leisure facilities market, where large-scale projects such as hotels and offices were accounted for in the previous fiscal year, and in the “Others” market. However, a number of other markets enjoyed sales growth: sales in the shopping center market increased as a result of production and renovation projects at department stores and large-scale commercial facilities, especially in metropolitan areas; sales in the public relations and sales promotion market advanced due to involvement in PR facilities projects in industries and expo events such as the Tokyo Motor Show; and sales in the museums market rose reflecting involvement in large-scale projects such as history and folk museums. As a result, net sales in the display business rose 0.1% from the previous fiscal year, to ¥113,208 million, and operating income climbed 7.4%, to ¥8,091 million.

Restaurant and Product Retail BusinessNet sales grew 8.4% from the previous fiscal year, to ¥2,632 million,

and operating income rose 0.1%, to ¥142 million. These increases resulted mainly from higher sales in special exhibitions due to gift shop operations at museums and science museums, and restaurants and specialty store operations at commercial facilities.

Assets, L iabi l i t ies and Net AssetsTotal AssetsTotal assets at the fiscal year-end amounted to ¥76,443 million, up ¥4,082 million, or 5.6%, year on year.

Current assets rose ¥3,849 million, or 6.8% from a year earlier, to ¥60,635 million. This principally reflected an increase in trade notes and accounts receivable due to the recording of sales at the end of the fiscal year despite a decline in inventories resulting from completion of construction works.

Non-current assets climbed ¥232 million, or 1.5%, to ¥15,808 million. This result was due mainly to purchase of investment securities and an increase in the valuation difference in the market price of investment securities, despite a transfer of a Group company, a loss on impairment of land and buildings, and a recording of depreciation.

LiabilitiesTotal liabilities at the fiscal year-end amounted to ¥37,099 million, climbing ¥6 million year on year.

Current liabilities grew ¥34 million, or 0.1%, from a year earlier, to ¥31,192 million. The major components of this rise were an increase in trade notes and accounts payable, which outweighed a decrease in income taxes payable due to lower taxable income resulting from the transfer of the Group company.

Non-current liabilities edged down ¥27 million, or 0.5%, from the previous fiscal year-end, to ¥5,907 million. This principally reflected a decrease in the net defined benefit liability reflecting a difference between retirement benefit obligations and the retirement payment for the fiscal year under review.

Net AssetsTotal net assets at the fiscal year-end amounted to ¥39,344 million, climbing ¥4,075 million, or 11.6%, year on year. The increase was mainly due to factors such as a rise in retained earnings resulting from higher net income attributable to shareholders of the parent, despite payment of dividends.

Cash FlowCash Flow from Operating ActivitiesNet cash provided by operating activities totaled ¥2,117 million, due mainly to a rise in income before income taxes and an increase in trade payables. This outweighed higher trade receivables as a result of the completion of many projects at the fiscal year-end.

Cash Flow from Investing ActivitiesNet cash used in investing activities totaled ¥1,010 million, due mainly to expansions and relocations of premises to improve the workplace environment.

Cash Flow from Financing ActivitiesNet cash used in financing activities totaled ¥2,278 million, due mainly to the payment of dividends.

Net Sales and Prof i tsNet SalesNet sales for the fiscal year ended February 28, 2018 reached ¥115,841 million, up ¥279 million, or 0.2%, from the previous fiscal year. This result was attributable to steady sales growth in the department and merchandise stores market, shopping centers market, public relations and sales promotion market, and museums market. Sales were also higher in the businesses of the Group companies.

Gross ProfitGross profit rose ¥406 million, or 1.8%, from the previous fiscal year to ¥23,129 million. The gross profit margin remained stable at 19% or more for all four quarters, and improved 0.3 percentage point from the previous fiscal year, to a high of 20.0%.

Selling, General and Administrative (SG&A) ExpensesSG&A expenses decreased ¥155 million, or 1.0%, to ¥14,957 million. The ratio of SG&A expenses to net sales improved 0.2 percentage point from the previous fiscal year, to 12.9%. This result reflected lower personnel expenses due to attention paid to balancing labor cost fluctuations when hiring and improved productivity (work style reform). On the other hand, expenses increased due to the expansion and relocation of our premises to improve the workplace environment as well as a change in the pro forma standard tax rate.

Operating Income and Ordinary IncomeOperating income rose ¥562 million, or 7.4%, to ¥8,171 million, and ordinary income climbed ¥563 million, or 7.2%, to ¥8,373 million. Operating income and ordinary income reached record highs due to an improvement of 0.5 percentage point in the operating margin, reflecting the higher gross profit margin and a lower SG&A expense ratio.

(FY) (FY)

(FY) (FY)

(FY) (FY)

(FY) (FY)

Financial SectionManagement Discussion and Analysis Fiscal 2017

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 “Orders Received” and “Orders Backlog” because the concept of orders received is different.


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; for example, 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 the loss of

social credibility, claims of liability for damages, and so on.　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 Earthquake Disasters If serious damage caused by an earthquake disaster brings local

economies to a halt, then 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.

Financial SectionBusiness and Other Risks

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

Fiscal Year 2017 2016 2017

Net sales ¥ 115,841 ¥ 115,561 $ 1,078,902 Cost of sales 92,712 92,839 863,485

Gross profit 23,129 22,722 215,416 Selling, general and administrative expenses 14,957 15,113 139,308

Operating income 8,171 7,608 76,108 Non-operating income:

Interest income 9 3 89 Dividends income 37 39 346 Purchase discount earned 87 90 815 Insurance income 56 — 521 Other 34 68 322 Total other income 224 202 2,095

Non-operating expenses:Interest expenses 3 1 35 Foreign currency exchange loss 15 — 141 Other 4 0 39 Total other expenses 23 1 216

Ordinary income 8,373 7,809 77,986 Extraordinary income:

Gain on sales of property and equipment 0 1 7 Gain on sales of investment securities 26 32 249 Gain on share exchange of subsidiaries 14 — 139 Total extraordinary income 42 34 396

Extraordinary loss:Loss on sales and retirement of property and equipment 33 3 308 Loss on impairment of fixed assets 608 — 5,667 Loss on devaluation of investment securities 2 — 20 Loss on devaluation of golf membership right — 11 — Business structure improvement expenses 437 — 4,075 Loss on closing of stores 12 — 113 Total extraordinary loss 1,093 14 10,186

Income before income taxes 7,322 7,830 68,197 Income taxes:

Current 1,794 2,901 16,710 Deferred (115) (128) (1,073)Total income taxes 1,678 2,773 15,637

Net Income 5,643 5,056 52,559 Net income attributable to:

Non-controlling interests 4 — 40 Shareholders of the parent ¥ 5,638 ¥ 5,056 $ 52,518

Other comprehensive income:Net unrealized holding gain (loss) on securities 491 202 4,578 Revaluation reserve for land — 12 — Foreign currency translation adjustments 29 (57) 277 Remeasurements of defined benefit plans 125 103 1,172 Total other comprehensive income 647 261 6,028

Comprehensive income ¥ 6,290 ¥ 5,318 $ 58,588 Comprehensive income attributable to:

Shareholders of the parent ¥ 6,286 ¥ 5,318 $ 58,547 Non-controlling interests 4 — 40

Financial SectionConsolidated Financial Statements

Note: U.S. dollar amounts represent conversions from yen, for convenience only, at ¥107.37=US$1.


ASSETS

Current assets:

Cash and deposits ¥ 25,741 ¥ 26,858 $ 239,748

Trade notes and accounts receivable 26,777 20,072 249,396

Inventories 6,359 7,479 59,233

Deferred tax assets 1,206 1,353 11,235

Other current assets 568 1,037 5,298

Allowance for doubtful accounts (19) (16) (179)

Total current assets 60,635 56,785 564,732

Non-current assets:

Property and equipment:

Buildings and structures 9,597 9,898 89,386

Machinery and vehicles 184 196 1,720

Tools, furniture and fixtures 1,915 1,726 17,835

Land 5,245 5,398 48,854

Lease assets 216 235 2,018

Construction in progress 4 52 41

Less accumulated depreciation (7,566) (7,334) (70,472)

Total property and equipment 9,597 10,172 89,385

Intangible fixed assets 1,035 1,856 9,642

Investments and other assets:

Investment securities 3,884 2,485 36,177

Deferred tax assets 231 206 2,160

Other 1,348 1,134 12,559

Allowance for doubtful accounts (288) (279) (2,690)

Total investments and other assets 5,175 3,547 48,207

Total non-current assets 15,808 15,575 147,235

Total assets ¥ 76,443 ¥ 72,361 $ 711,967

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

Fiscal Year 2017 2016 2017

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

Fiscal Year 2017 2016 2017

LIABILITIES

Current liabilities:

Trade notes and accounts payable ¥ 21,352 ¥ 19,586 $ 198,866

Lease obligations 54 72 506

Income taxes payable 1,179 1,967 10,980

Advances received 3,168 3,322 29,511

Accrued bonuses for employees 1,519 1,317 14,156

Provision for warranties for completed construction contracts 55 67 518

Provision for loss on construction contracts 51 64 474

Provision for business structure improvement expenses 92 — 860

Other current liabilities 3,719 4,759 34,640

Total current liabilities 31,192 31,158 290,516

Non-current liabilities:

Lease obligations 88 118 821

Net defined benefit liability 4,802 4,858 44,724

Retirement benefits for directors and corporate auditors 154 122 1,439

Deferred tax liabilities 406 328 3,782

Deferred tax liabilities for land revaluation reserve 183 229 1,710

Other 272 277 2,537

Total non-current liabilities 5,907 5,934 55,016

Total liabilities 37,099 37,093 345,532

NET ASSETS

Shareholders’ equity:

Common stock 6,497 6,497 60,515

Capital surplus 6,861 6,861 63,902

Retained earnings 25,767 22,249 239,991

Treasury stock (1,091) (1,091) (10,169)

Total shareholders’ equity 38,034 34,516 354,240

Accumulated other comprehensive income:

Net unrealized holding gain (loss) on securities 1,039 547 9,680

Revaluation reserve for land 415 520 3,872

Foreign currency translation adjustments 156 126 1,457

Remeasurements of defined benefit plans (316) (442) (2,950)

Total accumulated other comprehensive income 1,294 751 12,060

Non-controlling interests 14 — 133

Total net assets 39,344 35,268 366,434

Total liabilities and net assets ¥ 76,443 ¥ 72,361 $ 711,967


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, 2017 ¥ 6,497 ¥ 6,861 ¥ 22,249 ¥ (1,091) ¥ 34,516

Cash dividends paid (2,225) (2,225)

Net income attributable to shareholders of the parent 5,638 5,638

Acquisition of treasury stock (0) (0)

Reversal of revaluation reserve for land 104 104

Other amounts of changes

Balance at February 28, 2018 ¥ 6,497 ¥ 6,861 ¥ 25,767 ¥ (1,091) ¥ 38,034

Shareholders’ equityTotal shareholders’

equityCommon stock Capital surplus Retained earnings Treasury stock

Balance at March 1, 2017 $ 60,515 $ 63,902 $ 207,225 $ (10,168) $ 321,474

Cash dividends paid (20,725) (20,725)

Net income attributable to shareholders of the parent 52,518 52,518

Acquisition of treasury stock (0) (0)

Reversal of revaluation reserve for land 972 972

Other amounts of changes

Balance at February 28, 2018 $ 60,515 $ 63,902 $ 239,991 $ (10,169) $ 354,239

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, 2017 ¥ 547 ¥ 520 ¥ 126 ¥ (442) ¥ 751 ¥ ─ ¥ 35,268

Cash dividends paid (2,225)

Net income attributable to shareholders of the parent 5,638

Acquisition of treasury stock (0)

Reversal of revaluation reserve for land 104

Other amounts of changes 491 (104) 29 125 542 14 557

Balance at February 28, 2018 ¥ 1,039 ¥ 415 ¥ 156 ¥ (316) ¥ 1,294 ¥ 14 ¥ 39,344

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, 2017 $ 5,101 $ 4,844 $ 1,180 $ (4,123) $ 7,002 $ ─ $ 328,478

Cash dividends paid (20,725)

Net income attributable to shareholders of the parent 52,518

Acquisition of treasury stock (0)

Reversal of revaluation reserve for land 972

Other amounts of changes 4,578 (972) 277 1,172 5,055 133 5,190

Balance at February 28, 2018 $ 9,680 $ 3,872 $ 1,457 $ (2,950) $ 12,059 $ 133 $ 366,434

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

Fiscal Year 2017 2016 2017

Cash flow from operating activities:

Income before income taxes ¥ 7,322 ¥ 7,830 $ 68,197

Depreciation 895 995 8,338

Loss on impairment of fixed assets 608 — 5,667

Increase (decrease) in allowance for doubtful accounts 20 (6) 189

Increase (decrease) in accrued bonuses for employees 263 130 2,453

Increase (decrease) in net defined benefit liability 124 8 1,155

Increase (decrease) in retirement benefits for directors and corporate auditors 32 (22) 298

Increase (decrease) in other provision (28) (3) (263)

Interest and dividend income (46) (43) (435)

Interest expense 3 1 35

Insurance income (56) — (521)

Business structure improvement expenses 437 — 4,075

Gain on share exchange of subsidiaries (14) — (139)

Loss (gain) on sales of investment securities (26) (32) (249)

Decrease (increase) in trade receivables (7,557) 423 (70,385)

Decrease (increase) in inventories 919 1,274 8,559

Decrease (increase) in prepayments 388 (347) 3,622

Increase (decrease) in trade payables 2,327 1,783 21,681

Increase (decrease) in other payables (723) 970 (6,737)

Increase (decrease) in advances received (194) 182 (1,812)

Increase (decrease) in consumption tax payable (142) (64) (1,324)

Other, net 85 259 798

Subtotal 4,639 13,341 43,206

Cash received for interest and dividends income 47 43 440

Cash paid for interest expenses (3) (1) (35)

Cash paid for income taxes (2,621) (2,740) (24,415)

Cash received for insurance income 56 — 521

Net cash provided by (used in) operating activities 2,117 10,643 19,716

Cash flow from investing activities:

Purchase of property and equipment (476) (214) (4,441)

Proceeds from sales of property and equipment 4 7 44

Purchase of intangible assets (114) (302) (1,069)

Purchase of investment securities (234) (217) (2,182)

Proceeds from sales of investment securities 64 98 596

Proceeds from redemption of investment securities 400 150 3,725

Payments for share exchange of subsidiaries resulting in change in the scope of consolidation (297) — (2,767)

Purchase of investments in subsidiaries resulting in change in the scope of consolidation — (223) —

Payments for guarantee deposits (403) (60) (3,761)

Other, net 47 277 441

Net cash provided by (used in) investing activities (1,010) (484) (9,414)

Cash flow from financing activities:

Dividends paid to shareholders (2,215) (1,662) (20,636)

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

Other, net (62) (145) (578)

Net cash provided by (used in) financing activities (2,278) (1,807) (21,216)

Effect of exchange rate changes on cash and cash equivalents 55 2 516

Net increase (decrease) in cash and cash equivalents (1,116) 8,352 (10,397)

Cash and cash equivalents at beginning of year 26,858 18,505 250,146

Cash and cash equivalents at end of year ¥ 25,741 ¥ 26,858 $ 239,748


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 *Shenzhen opened in April 2018.

Number of EmployeesNOMURA GROUP: 2,202 (including contract employees)Non-consolidated: 987 (regular employees)Consolidated: 1,579 (regular employees)

Organizational Layout

General Meeting of Shareholders

Chairman & CEO

Board of Directors

Board of Auditors

President & CEO Corporate Auditors Office

Busi

ness

Dev

elop

men

t

Hum

an R

esou

rces

Su

ppor

t Dep

artm

ent

Corporate Secretariat

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

NOMURA DUO Co., Ltd.Display and promotion creation for visitor-attraction spaces

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 the tea drink and goods chain store

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

RIKUYOSHA Co., Ltd.Book editing, printing, publishing, and sales

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 exhibition, interior and decoration

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Stock Price Range (monthly)

Stock Price Indices

201720162015201420132012

21.1121.11

20.0920.09

20.4120.41

20.3520.35

23.7023.70

19.4219.42

201720162015201420132012

3.033.032.442.44

2.932.93

2.172.171.591.59

0.930.93

201720162015201420132012

2.12.12.22.2 2.22.22.22.22.02.02.32.3

Price Earnings Ratio (PER)(times)

Price Book-Value Ratio (PBR)(times)

Dividend Yield(%)

2018.22017.22016.22015.2

（Yen）3,000

1,000

2,000

0

(FY) (FY) (FY)

Corporate InformationCorporate Overview as of February 28, 2018

Corporate InformationStock Information as of February 28, 2018

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 5,458

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

Japan Trustee Services Bank, Ltd. (trust account) 2,373,800 4.27

The Master Trust Bank of Japan, Ltd. (trust account) 2,321,900 4.17

Yoko Nomura 1,658,000 2.98

NOMURA Kougei Employee Shareholder Association 1,475,930 2.65

Sumitomo Mitsui Banking Corporation 1,376,920 2.48

Mutual Prosperity Association of NOMURA Co., Ltd. 1,317,000 2.37

NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON LEBDING 15 PCT TREATY ACCOUNT 1,056,400 1.90

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

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

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

Breakdown by Size of Holding Number of Shareholders Shares Held

■ Less than 100 shares 566 3,156

■ 100 shares or more 2,837 716,487

■ 1,000 shares or more 1,636 4,132,316

■ 10,000 shares or more 306 6,230,046

■ 50,000 shares or more 39 2,599,574

■ 100,000 shares or more 50 10,580,490

■ 500,000 shares or more 24 35,686,225

Breakdown by Type of Shareholder Number of Shareholders Shares Held

■ Foreign Investors 183 10,105,800

■ Securities Companies 29 1,136,538

■ Financial Institutions 39 13,372,340

■ Other Corporations 141 12,270,476

■ Individuals and Others 5,066 23,063,140

1.17%6.90%

4.74%

10.81% 59.81%16.57%

1.90%

16.86% 22.30% 38.47%20.47%

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

Phone +81-3-5962-1171

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