Abc valuation final

ValuationGroup Presentation

Capital　 3,482 million yenPresident and Executive Officer Minoru NoguchiNumber of Employees　 5,245 (Part-time employees 2,454

included)Description of Business

Retailing of products, such as shoes, clothing and general merchandise, product development, import of goods from all over the world, licensing business for various brands.

Number of StoresHokkaido 27, Tohoku 41, Tokyo 97, other Kanto 204, Chubu 96, Kansai 102, Chugoku&Shikoku 51, Kyushu&Okinawa 82, total 700

Subsidiaries ： ABC-MART KOREA,INC. ABC-MART TAIWAN,INC. LaCrosse Footwear,Inc.

ABC-MART, INC.

History1985　 Kokusai Boeki Shoji inc.

1986　 Agency contract with G.T.Hawkins limited for exclusive rights1990　 ABC-Mart Ltd.is established

1991　 Agency contract with Vans, Inc. for exclusive sales2000　 Initial public offering on JASDAQ

2002　 ITC absorbed ABC-Mart Co., Ltd. and changed its name to ABC-Mart Inc.・ ABC-MART, Inc. was listed on first section of the Tokyo Stock Exchange・ Subsidiary company ABC-Mart Korea Inc. was established in South Korea

2005　 Ladies brand Nuovo collection developed2008　Mega Stage, the Company’s first large size general shop handling apparel and other goods as a tenant store, is opened

2012　 ABC-Mart GrandStage IKEBUKURO and ABC-Mart GrandStage DiverCity TOKYO Plaza is opened

Management Strategy

• Catch and adapt market needs.• Business expansion depends on

local market.SHOP

• Global network• Grow up house brand

PRODUCT

• Effective logistics system• Building up highMANAGEMENT

• Focus on the store• Leadership and team workMAN POWER

Shoe Market Size in Japan

(JPY:100mil,%)Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Market size 14,530 14,410 14,235 13,985 13,785 13,935 14,240 14,470 14,060 13,445 13,425 13,115

Comparison 　 99.2% 98.8% 98.2% 98.6% 101.1

%102.2

%101.6

% 97.2% 95.6% 99.9% 97.7%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201112,000

12,500

13,000

13,500

14,000

14,500

15,000

Slightly Declining

JPY100mil

Year

ABCMart11%

CHIYODA12%

G Foot7%

others70%

Major Players in Japanese Market

There are 12,000 shoe stores in Japan (2007). Their average annual sales is JPY56million.SMEs are disappearing affected by the large scale store and internet shopping.

Advantage Matrix Analysis

ABC Mart is the only company succeeded in Specialized

Business.These businesses gain benefits from both economies of scale and differentiation (often characterized by experience effects in their own, differentiated, segment)

ABC Mart

CHIYODAPal

G FootDelica

RegalHimiko

Operating income ratio(%)

Revenue(JPY.mil))

Comparable Analysis

ABC Mart is on the average level of similar companies.

EBITA Comparable Analysis = Corporate Value(Total stock value + Net Debt) /EBITA (Operating Profit + Depreciation)

EBITA Multiple Ratio(Times)

Rapid revenue growth and high profit ratio.They are growing performance in the shoe market.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

Revenue Operation income Ordinary income Net income Net income ratio

Mill

ion

yen

Net

inco

me

ratio

n

Financial condition

20012002

20032004

20052006

20072008

20092010

20112012

0

100

200

300

400

500

600

700

800

900

Total number of shopsRevenue per a shop

Reve

nue

[mill

ion

yen]

& #

of s

hops

Each segment has kept the stable growth. In contrast, Revenue per a shop has been decreasing in this ten years because of rapid growth in diversified channel such as shopping center and road side.For more expansion, the key is oversea demands.

Sales by segments

2007 2008 2009 2010 2011 20120

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Sports Leather casual Ladies Business Kids SandalOthers

Reve

nue

[mill

ion

yen]

SWOT analysis

1. No. 1 share2. Strong name

brand3. Collaboration with

a lot of strong national brands

1. Dance booming2. Running booming3. Oversea demands

1. No private brand2. Weak channel on

Internet3. No fashionable

1. Ecommerce company penetration

2. Aging society3. Decrease of the expense to shoes

Strengths Opportunities

Weaknesses Threats

Optimistic Moderate Pessimistic

Opportunity

Take an opportunity to expand oversea growth and domestic market is growing more because of the acquisition of dance and running demands

Expand oversea business and domestic market is sustainable growth

Grow in oversea, but domestic is shrink

Risk

Japan market is stable but no expansion

E-commerce penetration and try to develop own E-commerce site

Japan market is shrink and growth

E-commerce penetration and takeover customers to Amazon and ZOZO

Strategy

Expand oversea business and shift to e-shop targeted youngers as well as shop business to continue acquiring the market share

Expand oversea business and shift to e-shop as well as shop business to keep the market share

Focus on oversea market and keep shop model

Set scenarios (2013 to 2015)

Cash flow projection

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200

5,000

10,000

15,000

20,000

25,000

30,000

Pessimistic Moderate Optimistic

Net

inco

me

[mill

ion

yen]

Optimistic Moderate Pessimistic

RevenueTotal revenue CAGR 15.3%Domestic growth 9.7%Oversea growth 32.3%

Total revenue CAGR 9.3%Domestic growth 0.6%Oversea growth 32.3%

Total revenue CAGR 0.0%Domestic growth -5.1%Oversea growth 26.5%

Net income Net income CAGR 15.3% Net Income CAGR 7.8% Net income CAGR 0.0%

DCF法による評価（単位：億円）

2010/2 2011/2 2012/2 2013/2 2014/2 2015/2 2016/2 2017/2 TerminalActual Actual Actual Forecast Forecast Forecast Forecast Forecast Value

Sales 1,135 1,274 1,408 1,625 1,803 1,940 1,940 ％ 成長率 12.2% 10.5% 15.4% 11.0% 7.6% - 100.0% #DIV/ 0! #DIV/ 0!

Cost of sales 490 531 597 ％ of Sales 43.2% 41.7% 42.4% 0.0% 0.0% 0.0% #DIV/ 0! #DIV/ 0! 0.0%

Gross income 645 743 811 ％ of Sales 56.8% 58.3% 57.6% 0.0% 0.0% 0.0% #DIV/ 0! #DIV/ 0! 0.0%

selling and administration cost 403 474 539 ％ of Sales 35.5% 37.2% 38.3% 0.0% 0.0% 0.0% #DIV/ 0! #DIV/ 0! 0.0%

Operating income 242 269 272 333 365 389 389 ％ of Sales 21.3% 21.1% 19.3% 20.5% 20.2% 20.1% #DIV/ 0! #DIV/ 0! 20.1%

【営業利益調整項目】●●●●調整後営業利益 333 365 389 0 0 389Tax 111 123 114 135 149 158 0 0 158

41% 41% 41% 41% 41% 41%NOPAT 131 145 159 198 216 231 0 0 231Depreciation(+) 19 22 26 35 45 50 75横置きのれんの償却(+)CAPEX(-) ▲ 65 ▲ 75 ▲ 75 ▲ 75仮置きWorking Capital(-) ▲ 20 ▲ 20 ▲ 20

(+)持分法投資損益FCF 148 166 186 0 0 231

NOPAT 231

割引率 4.74% Terminal Value 4,871WACC 4.74% 1.00 2.00 3.00 4.00 4.00 永久成長率 0% 割引係数 0.95 0.91 0.87 0.83 1.00 0.83

FCF割引現在価値 141 152 162 0 0 4,048

FCF現在価値合計（事業価値合計） 4,502非事業用資産繰越欠損金の節税効果企業価値 12/2期実績 4,502有利子負債 83 83少数株主持分 ▲ 0.2 ▲ 0未積立退職給付債務その他株式価値 4,419発行済株式総数（自己株控除後） 75,294,000株

一株当たり株式価値 5,870円

Valuation

Appendix

0 歳 2

4

6

8

10

12

14

16

18

950 1,000 1,050 1,100 1,150 1,200 1,250

Age

Appendix

2005 2006 2007 2008 2009 2010 20110

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

OthersChildren shoesSports shoesWomen shoesMen shoes