Autobacs Seven : Earnings Release "Consolidated Financial Results for the Three Months Ended June 30, 2017"(PDF)

July 28, 2017

Consolidated Financial Results for the First Quarter Ended June 30, 2017【Japanese GAAP】

Summary of Quick Financial Announcement of Consolidated Financial Information For the First Quarter Ended June 30, 2017.

Company name : AUTOBACS SEVEN CO., LTD.

Code number : 9832

(URL http://www.autobacs.co.jp/) Headquarters : Tokyo, Japan

Company Representative : Kiomi Kobayashi, Representative Director

Contact for further information : Noritaka Hiraga, Officer, Finance & Accounting and Legal Telephone : [phone]

Stock exchange listing : Tokyo

Submission of Quarterly Business Report : August 4, 2017 Start of cash dividend payments : -

Supplementary quarterly materials prepared : Yes Quarterly results information meeting held : None

1. Results for the First quarter ended June 30, 2017 (From April 1, 2017 to June 30, 2017)

   (Note: Amounts less than 1 million Yen have been rounded down. A figure in ( ) indicates a loss or a negative figure.)

2. Results of operations:

   (Unit: Millions of Yen except for per share information, and % information which indicates increase or decrease( ).)

   Net sales Operating income Ordinary income

   First quarter ended ％ ％ ％

   June 30, 2017	49,982	5.1	354	96.9	636	17.9
   First quarter ended June 30, 2016	47,549	(3.1)	180	(81.4)	539	(59.2)

   Note: Comprehensive income : 315 million yen for the First quarter ended June 30, 2017 : - %

   (655) million yen for the First quarter ended June 30, 2016 : - %

   Profit attributable to owners of parent	Basic net income per share (Yen)	Basic net income per share - diluted (Yen)
   First quarter ended June 30, 2017	％ 300 42.7	3.64	-
   First quarter ended June 30, 2016	210 (63.9)	2.50	-

3. Financial position:

4. (Unit: Millions of Yen except for per share information)

   Net assets per
   Total assets	Total net assets	Equity ratio	share (Yen)
   First quarter ended	％
   June 30, 2017	172,234	125,199	72.5	1,513.84
   Fiscal year ended
   March 31, 2017	176,708	127,392	71.9	1,540.12
   (Reference) Equity : First quarter ended June 30, 2017 : 124,909 million Yen
   For the year ended March 31, 2017 : 127,078 million Yen

5. Dividends

   Dividends per share	(Yen)
   First Quarter	Second Quarter	Third Quarter	Year -end	Annual
   Fiscal year ended
   March 31, 2017	-	30.00	-	30.00	60.00
   Fiscal year ended
   March 31, 2018	-	-	-	-	-
   Fiscal year ended
   March 31, 2018
   (forecast)	-	30.00	-	30.00	60.00
   Note : Revisions to dividend forecasts published most recently : None

6. Forecast for the fiscal year ending March 2018 (from April 1, 2017 to March 31, 2018)

   (Unit: Millions of Yen, percentage figures denote year-on-year change)

   Net sales	Operating income	Ordinary income
   ％	％	％
   Annual	205,000	0.5	7,000	20.1	7,500	5.3
   Profit attributable to	Basic net income
   owners of parent	per share(Yen)
   ％
   Annual	5,200	72.4	63.02
   Note : Revisions to financial forecasts published most recently : None

7. Other

8. Significant changes in scope of consolidation : None

9. Adoption of special accounting policies for quarterly financial statements : None

10. Changes in accounting policies, accounting estimation change and restatement

11. Changes due to changes in accounting standard : None

12. Changes due to changes in accounting standard except (3)-1. : None

13. Changes due to accounting estimation change : None

14. Restatement : None

15. Shares outstanding (common stock)

16. Number of shares outstanding (including treasury stock) First quarter ended June 30, 2017 : 84,050,105 shares Fiscal year ended March 31, 2017 : 84,050,105 shares

17. Number of treasury stock at the end of period

    First quarter ended June 30, 2017 : 1,538,424shares Fiscal year ended March 31, 2017 : 1,538,020 shares

18. Average shares outstanding over quarter

    First quarter ended June 30, 2017 : 82,511,962 shares

    First quarter ended June 30, 2016 : 84,009,321 shares

    ※These financial results are not subject to the quarterly review procedures

    ※Statement regarding the proper use of financial forecasts and other special remarks (Statement regarding the proper use of financial forecasts)

    These forecast performance figures are based on the information currently available to the Company's management and certain assumptions judged rational. Accordingly, these might be cases in which actual results materially differ from forecasts of this report.

19. Qualitative Information concerning Consolidated Business Results for the Three Months Ended June 30, 2017

20. Starting from the first three months of the consolidated fiscal year under review, the Company reorganized its reportable segments in order to change the management of its resources allocation and business performance evaluation so that it is in line with the business segments set out in the 2017 Medium-Term Business Plan, which commences in the fiscal year ending March 2018.

    (1) Explanation of business results

    Looking at the trends of the domestic automotive-related industry during the first three months of the consolidated fiscal year under review, although volumes of new vehicle sales and used car registration have been recovering, this has yet to translate into an improvement in consumers' appetite for purchasing automotive goods and services.

    Under these circumstances, the Group announced the 2017 Medium-Term Business Plan in May 2017 and is focusing on measures to enhance earnings growth and asset efficiency based on the Group vision of "Turnaround of domestic AUTOBACS business" and "Development of future growth drivers."

    The Group's sales during the first three months of the consolidated fiscal year under review increased by 5.1% year on year, to 49,982 million yen, gross profit climbed by 3.2% year on year, to 15,332 million yen, and selling, general, and administrative expenses increased by 2.0% year on year, to 14,977 million yen, resulting in operating income of 354 million yen, an increase of 96.9% from a year earlier. Ordinary income increased by 17.9% year on year, to 636 million yen. As a result, profit attributable to owners of parent increased by 42.7% year on year, to 300 million yen.

    Results by business segment are as shown below. [Domestic AUTOBACS Business]

    For the first three months of the consolidated fiscal year under review, total sales for domestic businesses

    in the AUTOBACS chain (including franchise outlets) increased by 5.6% year on year on a same-store basis, and by 5.1% year on year on an overall-store basis.

    At domestic AUTOBACS chain stores, sales of merchandise and goods related to car washing were reinforced along with "parent and child car washing" and other events at stores, which were offered as proposals for various ways for customers to enjoy cars. Company reduced the ratio of cost of goods purchased for outlets to enhance sales force of franchise outlets. On the other hand, expenses increased year on year, In addition, sales of tires was robust, mainly reflecting efforts to enhance the customer service systems and merchandise mix at stores in response to rush demand before price increase of tires, which were raised by tire manufacturers in Japan. Moreover, the launch of JKM and GORDON MILLER, brands to offer new lifestyles that feature cars, was announced and sales of merchandise and goods to improve the motorized lifestyle and the time spent in garages were commenced. Meanwhile, JACK&MARIE, Japan's first shop for motorized lifestyle, was launched and its first store was opened in ZOZOTOWN, Japan's largest shopping site for fashion, to offer the Company's original goods, etc. In the statutory safety inspection and maintenance services segment, thanks to a business environment in which the number of vehicles subject to statutory inspection increased and efforts to consistently provide information about said services in the stores, the number of vehicles that underwent statutory safety inspection and maintenance services increased by 13.2% year on year, to approximately 154,800 units. In the automobile purchase and sales segment, a new main character for TV commercials was aired to showcase to customers the factors that differentiate the Company's automobile purchase services. In addition, the number of automobile purchased increased owing to strengthened initiatives for purchasing vehicles by each store, while sales to used car dealers by means such as auto auctions grew. As a result, sales of both new and used cars came to approximately 5,900 units, representing a year-on-year increase of