May 27, 2019
Financial Results for Fiscal 2018,
the Year Ended March 31, 2019
KNT-CT Holdings Co., Ltd.
1
Contents
I. Summary
II. Overview of Financial Results for Fiscal 2018
III. Forecasts of Financial Results for Fiscal 2019
IV. Medium-Term Management Plan (FY2018 - FY2020)
I. Summary
2
Overview of Financial Results for Fiscal 2018
3
405.1
411.8
FY2017 FY2018
71.6 71.9
FY2017 FY2018
3.12.5
FY2017 FY2018
1.41.2
FY2017 FY2018
Sales Gross income
Operating income Profit attributable to owners of parent
+6.6
(+1.6%)
+0.3
(+0.5%)
(-0.6)
(-20.3%)
(-0.1)
(-9.5%)
(Billions of yen)
Progress on Medium-Term Management Plan (Topics)
4
Rebuild
individual
travel
business
Products
Integrate Kinki Nippon
Tourist and Club
Tourism
Switch to
online sales
focus
Sales
Switch to community-based development
☞Reorganize Mate planning and purchasing channels and integrate KNT and CT
through product development
Reform business processes
☞Pre-sale products on website and shorten business term from planning to selling
Effective and efficient online sales
☞Shift media production from paper media orientation to online focus (website
and email magazines)
☞New sales model that combines stores (real) and online (virtual)
Renovate website
☞Update website design to enhance usability
Expand sales of CT products at KNT stores
Strengthen interconnections of websites and customer data of both
companies
Establish new KNT-CT Partners Association made up of affiliated and
collaborating organizations
Expand and
strengthen group
travel business
Expand orders received for hospitality business, etc. of sponsor companies for 2020 large-scale international
sporting games
Develop original educational travel support system aimed at expanding handling of educational travel and
creating future customers
Strengthen
global business
Expand service through B to B (to C) basic strategy
Strengthen mutual collaboration between domestic and overseas subsidiaries
☞Expand inbound travel business and travel business at overseas
StructureHD
(Web Strategy
Dept.)
KNT-CT
Web Travel Kinki Nippon Tourist
Club Tourism
++
II. Overview of Financial Results for
Fiscal 2018
5
KNT-CT Holdings’ Scope of Consolidation
6
33 consolidated subsidiaries
NTT DATA TERANOS CORPORATION KNT TRAVEL (THAILAND) CO., LTD.
H&M INSURANCE HAWAII, GRIFFIN INSURANCE
KIE (USA), KIE (CANADA), KIE (OCEANIA), HOLIDAY TOURS MICRONESIA (GUAM),
KINTETSU INTERNATIONAL EXPRESS (CHINA), KINTETSU MAYSEN
INTERNATIONAL (SHANGHAI), KNT Taiwan, KNT (HK)
TOURIST EXPERTS, INC.
Kinki Nippon Tourist Shoji Co., Ltd.
TOURIST SERVICE HOKKAIDO CO., LTD.,KNT Business Create Co., Ltd.
Tourist International Assistance Service, Inc.
Event & Convention House, Inc.
Japan Outside Japan
8 travel companies
outside Japan
Other
10 other affiliated
companies
Temporary staff services
Merchandising and insurance
Business consignment and others
Travel assistance services
Event and convention planning
Club Tourism International Inc., Kinki Nippon Tourist Hokkaido Co., Ltd., Kinki Nippon
Tourist Tohoku Co., Ltd., Kinki Nippon Tourist Kanto Co., Ltd., Kinki Nippon Tourist
Metropolitan Co., Ltd., Kinki Nippon Tourist Chubu Co., Ltd., Kinki Nippon Tourist Kansai
Co., Ltd., Kinki Nippon Tourist Chugokushikoku Co., Ltd., Kinki Nippon Tourist Kyushu Co.,
Ltd., Kinki Nippon Tourist Corporate Business Co., Ltd., KNT-CT Global Travel Co., Ltd.,
KNT-CT Web Travel Co., Ltd., Kinki Nippon Tourist Okinawa Co., Ltd., UNITED TOURS CO.,
LTD., Sanki Travel Service Co., Ltd.
Reinsurance underwriting businesses
Club Tourism Life Care Service Co., Ltd.Nursing care business
KNT-CT Holdings Co., Ltd.
Headquarters: Shinjuku Sumitomo Bldg., 2-6-1 Nishi-Shinjuku,
Shinjuku-ku, Tokyo
Club Tourism Space Tours Inc.Space trip enterprise
15 travel companies in
Japan
Two companies affiliated by the equity method
Results and Sales by Segment for FY2018
7
FY2017 FY2018Increase/
decrease
Increase/
decrease
(%)
Sales 405,172 411,821 6,649 1.6
Gross income 71,658 71,993 335 0.5
Operating income 3,177 2,532 (645) (20.3)
Ordinary income 3,342 2,834 (507) (15.2)
Extraordinary income 43 12 (31) (72.3)
Extraordinary loss 509 1,786 1,277 250.9
Profit attributable to owners of parent 1,412 1,279 (133) (9.5)
(Millions of yen; %)
Consolidated Balance Sheets at the End of FY2018
8
FY2017
(March 31, 2018)
FY2018
(March 31, 2019)
Increase/decrease
Current assets 111,013 121,521 10,508
Cash and
deposits68,140 71,348 3,207
Fixed assets 19,403 19,958 555
Total assets 130,416 141,479 11,063
Current liabilities 101,631 111,224 9,593
Trade accounts
payable and
unsettled travel
tickets
40,997 40,494 (502)
Fixed liabilities 3,480 3,305 (175)
Total liabilities 105,111 114,529 9,417
Total net assets 25,304 26,950 1,645
Retained earnings 7,731 9,010 1,279
Total liabilities
and net assets130,416 141,479 11,063
(Millions of yen)
FY2017
(March 31,
2018)
FY2018
(March 31,
2019)
Capital adequacy
ratio19.3% 19.0%
FY2017
(March 31,
2018)
FY2018
(March 31,
2019)
Net assets per share 923.26 yen 983.82 yen
Consolidated Cash Flow Statement for FY2018
9
(Millions of yen)
FY2017(April 1, 2017 – March 31, 2018)
4,590
(2,519)
(23)
67,191
FY2018(April 1, 2018 – March 31, 2019)
4,845
(1,677)
(18)
70,349
Cash flows used in
operating activities
Cash flows from
investment activities
Cash flows from
financing activities
Cash and cash
equivalents at the end
of the interim period
III. Forecasts of Financial Results for
Fiscal 2019
10
Forecasts of Consolidated Financial Results for FY2019
11
FY2018 FY2019Increase/
decrease
Increase/
decrease
(%)
Sales 411,821 422,500 10,679 2.6
Operating income2,532 3,000 468 18.5
Ordinary income 2,834 3,200 366 12.9
Profit attributable to owners of parent 1,279 1,860 581 45.4
(Millions of yen; %)
12
IV. Progress on Medium-Term
Management Plan
(FY2018-FY2020)
1. Overview of Medium-Term Management Plan
13
Plan Period
Basic Target
Basic Policies
Priority
Businesses
FY2018-FY2020 (three fiscal years)
Expand net sales and profit through business structure reform
(1) Maximize effects through organizational restructuring
(2) Rebuild individual travel business
(3) Expand and strengthen group travel business
(4) Reinforce internal control
(5) Develop and utilize human resources
(1) Growth area business (inbound travel business, sports
business, and regional exchange business)
(2) Online sales business
(3) 2020 large-scale international sporting games business
2. Overview of Business Structure Reform
14
Basic
PoliciesBasic Strategies
Centraliza-
tion
Strengthen group-wide business strategy formulation functions and business
promotion functions
Decentrali-
zation
Accelerate decision-making by being locally focused and demonstrate agility
Specialize in growth markets, including inbound travel business and online
sales business
KNT-CT Holdings Co., Ltd.
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◇Group Structure33 consolidated
subsidiaries
Two companies affiliated by the equity method
(As of April 1, 2019)
3. Rebuild individual travel business
15
(1) Plan and develop products
Establish Individual Travel and Online Sales
Department at each KNT
Reorganize Mate planning and purchasing
departments
☞ Strengthen collaboration with each operating
company and expand online sales based on KNT-CT
Web Travel
(1) Expand products selling by online
(2) Strengthen aggressive marketing through email
magazines.
☞Switch from departure side-based development
to community-based development
Purchasing
planning
centers
Local purchasing
Plan and develop local tourism
(community-based unit) products
Domestic
planning
centers
Develop products at departure point
(local tourism products + transport
from departure destination))
Products based on
conventional material-
type products
Highly theme-based products
that provide “experiences” with
clear targets
+
☞Collect tourism resources with collaboration between KNT
and CT in each region
☞Develop Mate products including CT’s local product
☞Expand local tourism products (community-based units)
Develop and expand highly theme-based
products
450
3,000
FY2018 FY2019(plan)
Community-Based Units
(Number of units)
Acronyms: Kinki Nippon Tourist = KNT, Club Tourism = CT
(KNT)
Progress of Medium-Term
Management Plan
3. Rebuild individual travel business
16
(2) Product sales
Switch business processes to online first
☞Implement business flow to online pre-sale and
system reformBusiness term from purchase plan develop list product
online (sales)
KNT: before, approx. 3 months⇒ after, approx. 0.5 months
☞Reform website and email magazines to evoke
images of travel utilizing videos, etc.
Use tablets for in-store sales
Expand sales of CT products at KNT stores
Respond immediately to customer needs
Develop seasonal products with sense of speed ,
☞ Equip each KNT store in Japan with tablets for
efficient in-store information with “product
explanations and applications through website”
Switch to IT-based sales style
Ensure acquisition and appropriate management of customer information
Expand online sales through integration of stores (real) and online (virtual)
☞ Introduce CT sales terminals at each KNT store in
Japan. Also introduce simple terminals at KNT partner
stores (agencies and dealers, in partners
association )
8.5
10.7
FY2017 FY2018
Sales of CT Products in Stores (includes partners association)
+22
(+26%)
(Billions of yen)
Progress of Medium-Term
Management Plan
3. Rebuild individual travel business
17
(3) Product purchasing
Establish KNT-CT Partners Association
Strengthen purchasing functions
☞ While promoting integration of KNT and CT, establish new association aimed at further mutual collaboration
among partner organizations
Previously
Kinki Nippon Tourist National Himawari
Association
Club Tourism Partners Association
Kinki Nippon Tourist Affiliated Ryokan
& Hotel Federation
April 01, 2019~
KNT-CT Partners
Association
☞ Promote strengthening of purchasing capabilities of reorganized “purchasing planning centers” at each KNT operating company
With collaborating organizations, including hotels, tourist facilities, and transport:
■ Enhance marketing and planning proposals alongside appropriate market research
■ Establish deeper bonds and relationships than ever before through increased frequency of sales visits
☞ Integrate KNT (group travel and individual travel) and CT aimed at seamless cooperation with KNT-CT Partners Association to
promote use of ordinary guest rooms (improve inventory reduction rate) and attract more customers
Progress of Medium-Term
Management Plan
3. Rebuild individual travel business
18
(4) Develop and improve IT systems at KNT and CT
IT investment plan aimed at expanding online sales
Update website designs
☞ Investment plan under Medium-Term Management Plan (FY2018 – 2020)
Investment
areas:
(1) Website support, (2) Customer databases,
(3) Core system reconstruction, (4) Other
Total
investment: Approx. ¥9.4 billion
☞ Update and expand functionality of KNT and CT sites to enhance website
usability
Display products for each
point of departure based on
popular areas and keywords
Establish feature pages using
themes, seasons, areas, etc.
Establish local tourism
planning pages introducing
recommendations for each
destination
KNT website CT website
Promote smartphone support for
feature pages
Update design to improve ease of
use of application screens
Enhance functionality to enable
customers to select the content of e-
mail magazines and the number
received themselves
Progress of Medium-Term
Management Plan
3. Rebuild individual travel business
19
(5) Interconnection of KNT/CT via IT systems
Website
Custom-
er data
List KNT and CT feature products on joint feature site
Joint feature site
KNT
products
KNT products
CT
productsCT
products
KNT email magazine
CT email magazine
*Introduce
features in
magazines, etc.
KNT website CT website
KNT customers CT customers
STEP1 STEP2
Sell both KNT and CT products on the own site
for each other
KNT
products
CT
products
CT
products
KNT
products
KNT website CT website
Register both KNT and CT members from joint
feature site
Establish and run a marketing analysis environment (including
recommendations) using customer information of both KNT
and CT
Implement One to One marketingJoint feature site
KNT customer
system
Register
CT customer
system
Register
KNT email magazine CT email magazine
(1) New customers
(2) New KNT (CT
members)
(3) New CT (KNT
members) Integrated customer data
KNT customer data
CT customer data
Recommendation system (KNT)
Online recommendations
Recommendationemail magazine
Analysis staff
Product
planning staff
Analysis tools
Recommendation system (CT)Analysis
results
KNT customers KNT/CT customers
CT customers
Online recommendations
Recommendation email magazine
Progress of Medium-Term
Management Plan
3. Rebuild individual travel business
20
(6) Expand customers at KNT and CT
“Infrastructure” required to expand online sales
☞ Customer data from customer expansion
■Current (end of FY2018)
Total customer target: 9.76 million
■2022 target
KNT customers
Approx. 4 million
• Group travel customers
• Register companion
customers
• Incorporate customers
making first-time bookings
• Ongoing customer increase
Customers of both
Approx. 1.70 million
Club Tourism customers
Approx. 10 million
Total customer target:
Approx. 12.30 million
KNT customers
Approx. 2.28 million
Customers of both
Approx. 280,000
Club Tourism customers
Approx. 7.76 million
Ongoing customer
increaseIncorporate mutual
customers at each company
Progress of Medium-Term
Management Plan
4. Target Direction for Individual Travel Business
21
1. Differentiation from OTAs through product development that make use of
our speciarities
Product
development
and
customer
contact not
present at
OTAs
(4) Real customer contact in stores
Understand real customer needs
Develop customer and local communication
(1) Club Tourism’s highly theme-based products
(2) Uncover local tourism resources using
nationwide branches and stores, provide
community-based tourism incorporating
these resources
(3) Human resources
Knowledge and skills in “travel demand
development”
Planning and
development
capabilities
(5) Purchasing capabilities
Purchasing and sales capabilities in both group and
individual travel businesses
Information gathering capabilities through collaboration with
KNT-CT partners association
Progress of Medium-Term
Management Plan
4. Target Direction for Individual Travel Business
22
2. Topline expansion through multi-channel sales with a focus on online sales
Direct sales “stores” Role of online sales channel (own site)
(1) Tool for acquisition of customer data (e-mail address, purchase history, etc.)
required for sales promotions and marketing
(2) Pre-sale (or limited sale) of products through own website
(a) Sell high-value-added,* high-profit-margin products via own website
*Highly theme-based products. Products in niche markets in collaborations with
animations, sports, and celebrities, etc.
(b) Challenging products for which agency sales are difficult
*Confirm and visualize needs (website sales also play role as litmus test)
Media, call centers, etc.
Other company sales channels,
including OTAs
Direct sales “website”
3. Expand online sales
Progress of Medium-Term
Management Plan
Overseas
subsidiaries
5. Strengthen global business
23
Basic
Strategies
Expand handling through B to B (to C)
Strengthen mutual collaboration at domestic and overseas Group companies based on KNT-CT
Global Travel
Roll out efficient and effective promotion in collaboration with KNT-CT-Web Travel
Japan Outside Japan
KNT-CT
Global Travel
Kinki Nippon Tourist
Corporate Business
Club Tourism International
KNT regional companies
Site operation and
management
KNT-CT Web Travel
Local travel companies overseas (real and online), agents,
etc.
Business
strategies
Focus:
Expand partners
through collaborative
business
Collaboration (customers, product
information, customer transfer)
Collaboration (promotion)
Expand DMC business and create global
exchange business through collaboration with
overseas travel companies, etc.
Reinforce lineup of Club Tourism YOKOSO
inbound travel products
Boost sales through expanded collaboration with
online travel companies
Expand inbound accommodation-only JTO
products through collaboration with purchasing
locations of each KNT regional company
Collaboration (customers,
product information,
customer transfer)
Growth area business
Progress of Medium-Term
Management Plan
6. Expand education-related business
24
☞Develop Tabitomo Plus, an original smartphone app for an educational travel support system
Provide new services and value using “education × travel × ICT”
Information for parents
Travel Guide
Itinerary
Group organization
Portfolio/memos
MY Page
Safe & Sound
Travel guide
Memos
Survey
Group Activities
Album
Increase order rate for school events by responding to diversifying needs
Reduce work for teachers
Increase learning outcomes for students utilizing ICT
Provide greater reassurance to parents
Integrated support for travel events with 12 functions from pre-travel to
post-travel
Realize enhanced convenience by connecting schools, students, parents,
and KNT within the system
Expand and strengthen group travel business
Objectives
Functions
12 functions Image of smartphone top screen
Progress of Medium-Term
Management Plan
7. Initiatives for 2020 large-scale international sporting games business
25
Establishment of structure and sales activities for 2020
(1) Promote business as one KNT-CT Group
☞In process of building and implementing a Group-wide structure based on the holding company
(2) Sponsor company sales
☞Support for ordered corporate hospitality programs
(3) Sale of add-on travel products for spectator tickets
☞Develop products and roll out sales leveraging customer Kinki Nippon Tourist’s ability to attract tourists
and planning capabilities of Club Tourism
☞Activities to evoke demand through campaigns
☞Feature products and announce sales information through stores, website, and mail magazines
Use 2020 as opportunity to create “legacy”
Sales know-how in related businesses to international sporting games
Establish trust and personal connections through corporate hospitality business, etc.
Use 2020 as opportunity to expand sales territory in the group and individual travel businesses
Develop human resources through experience
Use sales of add-on travel products for spectator tickets as opportunity to expand customers (mail magazine members)
Human resources
Skill credentials
Customer base
Business base
Growth
base
“legacy”
for the
future
(2020 and
beyond)
8. Numerical Plans (Consolidated)
26
FY2017 FY2018 FY2019 FY2020
Results Results YoY Forecasts YoY Plan YoY
Sales 405,172 411,821 101.6% 422,500 102.6% 456,000 107.9%
Operating income 3,177 2,532 79.7% 3,000 118.5% 5,500 183.3%
Ordinary income 3,342 2,834 84.8% 3,200 112.9% 5,700 178.1%
Profit attributable
to owners of parent1,412 1,279 90.6% 1,860 145.4% 3,400 182.8%
Capital adequacy
ratio19.3% 19.0% 19.7% 20.5%
Return on Equity
(ROE)5.7% 4.9% 6.7% 10.3%
IT investment
plans3,437 2,330 67.8% 3,900 167.4% 3,170 81.3%
(Millions of yen)
Period of Medium-Term Management Plan
IR Inquiries
Shinjuku Sumitomo Buildings, 2-6-1
Nishi-shinjuku, Shinjuku-ku, Tokyo, Japan, 163-0239
Public Relations, General Affairs Department
(IR contacts: Tachibana, Iwamoto)
TEL:03-6851-4500
URL:https://www.kntcthd.co.jp/
KNT-CT Holdings Co., Ltd.
These materials are not intended to solicit investment, but are provided for reference only.
Please refer to the company’s financial statements and securities reports for accurate
earnings figures. The financial targets provided in this material are based on information
available at the time of writing, however, actual results may differ from the forecasts as a
result of changes in a range of factors.