H.I.S. Reports Results for the Full Year Ended October 2012

H.I.S. Reports Results for the Full Year Ended October 2012 
Tokyo, Dec 14, 2012 - (JCN Newswire) - H.I.S. Co., Ltd. (TSE1: 9603), a leading
travel and airline ticket agency, has announced results for the full year ended
October 31, 2012. As the Group actively sought to increase share in the
industry, consolidated net sales for the period rose 13.3% to 431,483 million
yen, operating income rose 20.3% to 11,316 million yen, ordinary income rose
22.5% to 13,479 million yen, and net income also rose 12.4% to 9,331 million
Within the travel industry, demand for overseas travel trended upward,
supported by the continuing historically strong yen and growing travel
opportunities for seniors. According to the Japan National Tourist Organization
(JNTO), the (estimated) number of Japanese who departed the country from
November 2011 through October 2012 is expected to have increased 10.9% year on
year to a historically high of around 18,573,000 people, an increase of
approximately 1,831,000 people. 
Under these business conditions, the Group strove to improve the quality of
its services and implemented various measures so that it could ensure strong
demand in the travel business, the Group's main business segment. 
- Travel Business 
As for initiatives in the area of online travel sales, the Group completely
renewed its online overseas airline ticket reservation site in November 2011 in
order to strengthen ticket sales. In addition, several new services were
introduced, such as a website that integrates reservations for overseas airline
tickets and hotel booking in May 2012. Improvements were also made such as
making the search and reservation pages more user friendly and simplifying
procedures. In order to increase convenience, the Group also enhanced its
smartphone application (e.g. H.I.S. overseas ticket reservations) and services
provided through SNSs such as Facebook and LINE. Internet-based sales were
As for sales channels, in East Japan, the Group restructured its network of
branches with a focus on productivity and introduced mini-branches. In West
Japan, the Group reinforced its sales system through various endeavors
including opening a specialty branch in the headquarters in Umeda, Osaka.
Moreover, efforts were made to further strengthen its sales system for overseas
weddings by establishing overseas wedding/honeymoon counters at all of the
Group's hundred branches throughout Japan and other measures. 
Turning to group travel, the overall business was firm as sales of tours to
see events at the London Olympics, which H.I.S. has become the official travel
agent of for the first time, were extremely strong and orders for large-scale
group trips (for corporate clients, various events, school trips, etc.) grew.
As for corporate travel (corporate business trips), the Group has steadily
increased the number of corporate clients through various endeavors including
linking the corporate reservation system SFIDA-online to the overseas ticket
search system, increasing convenience, and dispatching sales staff throughout
the world to expand corporate contracts globally. 
As for product development, the Group strengthened sales for charter flights
(Jet Asia Airway flights to Bangkok, flights from areas throughout Japan to
Hawaii, etc.), and these flights were used by many customers. Working to
improve the "impresso" brand of guided tours, the Group developed
extremely creative products, including one plan that involved renting out the
Louvre Museum, and they were well received by customers. Efforts such as a
commercial that Sei Hiraizumi, a popular Japanese actor, appeared in were used
to strengthen marketing of its three-generation travel products to new groups
of customers. The Group has worked to fully enter Japan's domestic travel
industry, and within this business, the Group launched sales of not only tours
that make use of low-cost carriers (LCC) that started flights this year but
also products related to the business tie-up with All Nippon Airways at all the
Group's branches. Furthermore, the domestic lodging reservation website
Sumayado was launched in March 2012. 
Turning to the business expansion overseas, the Group made further
improvements to both its H.I.S VACATION business and the overseas out-bound
business. The H.I.S. VACATION business involves Internet-based direct sales of
products such as overseas hotel bookings and optional tours created or obtained
by overseas offices to both Japanese and overseas travelers while the overseas
out-bound business covers sales of locally-departing flights to non-Japanese
customers, mainly in Asia. Furthermore, the Group launched an online
reservation site for local overseas clients in Singapore, following the
introduction of a similar site in Thailand. The Group will move forward with
constructing sites that are closely tied to the local community throughout the
world. In addition, the BtoB business, wholesale sales to other travel
companies, steadily grew as staff conducted aggressive sale activities. As for
branches, the Group continued to actively reinforce its network of branches,
which included efforts such as expanding lounges in its branches in Nairobi,
Kenya; Pusan, Korea (out-bound operations), and Guam. 
As a result of the various measures discussed above and despite the effect of
travel postponements and cancellations due to some diplomatic problems, the
travel business was able to increase the number of passengers departing Japan
that it handled during the current fiscal year. Therefore, the Group recorded
an increase in both sales and income for the business, with sales rising 11.4%
year on year to 407,304 million yen and operating income increasing 13.6% year
on year to 11,384 million yen, which was for various reasons including sales
activities that stressed productivity. 
- Hotel Business 
In the hotel business, the Group had two hotels in Australia and one in
Sapporo, and added two new hotels during the fiscal year. The Watermark Hotel
Nagasaki located in Nagasaki's HUIS TEN BOSCH and the Guam Reef Hotel
located along the Tamon Bay on Guam were newly included in the scope of
consolidation. The Group strove to improve customer satisfaction and
profitability at all hotels, and sales rose 24.5% year on year to 2,784 million
yen for the business, but the Group recorded an operating loss of 232 million
yen for the business. 
- Theme Park Business 
HUIS TEN BOSCH Co. Ltd. which celebrated the twenty-year anniversary of its
founding, worked to increase the quality of the theme park, improved its
customer draw, and reduced expenses. The company enhanced well received events
that were designed to attract customers. These events included Gardening World
Cup, Kingdom of Light, and the Rose Festival. Furthermore, events that have
remained extremely popular, such as the Hanabi (Fireworks) World Cup,
contributed to stronger customer draw. As for new attractions, in addition to
winning a bid for the White Ferris Wheel in November 2011, HUIS TEN BOSCH
introduced Adventure Park in March 2012, the Thriller Fantasy Museum in May,
and ONE PIECE Ride Cruise - FOR THE NEW WORLD - in Huis Ten Bosch in July 2012,
increasing the value of visiting the park. The Huis Ten Bosch Art Museum hosted
Visionary Art the Gogh Exhibition since July in commemoration of the
twenty-year anniversary of the opening of the museum, and the exhibition has
been warmly received. As a result, sales rose 19.3% year on year to 15,957
million yen and operating income increased 166.9% year on year to 2,639 million
yen for the business. 
- Transportation Business 
On February 29, 2012, the Ocean Rose, which is operated by HTB CRUISE Co.,
Ltd., made its maiden cruise from Nagasaki to Shanghai. Although full
operations were launched with higher quality cruises on July 25, the Group
recorded 157 million yen in sales and an operating loss of 1,142 million yen
for the business because of diplomatic problems. 
- Kyushu Sanko Group 
In order to strengthen domestic travel in Japan and promote travel to Japan,
CO., LTD., turning the company into a consolidated subsidiary. The Kyushu Sanko
LTD., recorded 6,137 million yen in sales and recorded 275 million yen in
operating income. The company has only been included in the scope of
consolidation for three months, July-September 2012. 

I. Consolidated Financial Results for the Full Year Ended October 31, 2012
Consolidated Operating Results                       (millions of yen)
Full year ended October 31,       2012        %         2011        %
Net Sales                      431,483     13.3      380,805      9.4
Operating Income                11,316     20.3        9,407     49.8
Ordinary Income                 13,479     22.5       11,005    119.2
Net Income                       9,331     12.4        8,300    145.2
Net Income/Share (y)            287.77                255.96
Fully Diluted
  Net Income/Share (y)              --                    --
Return on Equity (ROE)            14.3                  14.0
Return on Assets (ROA)             8.6                   8.5
Ordinary Income to
  Operating Revenue Ratio          2.6                   2.5
Consolidated Financial Position
As of October 31,                          2012                  2011
Total Assets                            173,497               139,018
Shareholders' Equity                     76,763                65,589
Shlders' Eqty Ratio (%)                    39.0                  45.3
Shlders' Eqty/share (y)                2,088.35              1,942.32
Consolidated Cash Flows
Full year ended October 31,                2012                  2011
Cash Flow from Operating Activities       9,577                18,464
Cash Flow from Investing Activities     (18,250)              (18,147)
Cash Flow from Financing Activities        (295)               (1,843)
Cash and Cash Equivalents at Period End  35,821                44,703
II. Forecast for the Fiscal Year Ending October 31, 2013
                                Interim      %      Full year      %
Net Sales                       230,000   14.3        490,000   13.6
Operating Income                  6,500   29.0         15,000   32.5
Ordinary Income                   7,500   16.5         17,000   26.1
Net Income                        4,300    3.9         10,000    7.2
Net Income / Share (y)           132.61                308.39

The global economic environment will likely remain uncertain due to some
diplomatic problems, but within the travel industry, travel demand is expected
to rise for various reasons including the spread of LCCs in Japan, new routes
from overseas, and greater travel opportunities for seniors. On the other hand,
we project that it will become more important to respond to market changes,
such as diversification of points of contact with customers and fiercer
competition within the industry both in Japan and overseas that includes
airline companies that are promoting direct sale of products. 
Under these business conditions, within the travel business, the Group's
core segment, the Group will strive to improve its safety, security, service,
and quality; focus on generating synergies within the group; deftly respond to
customer needs, including making a foray into the cruise business and
aggressively using charter flights; develop original products and services for
the global market; and rapidly implement measures in order to expand and
broaden the travel business for both flights departing from Japan and locally
overseas. In addition, the Group will promote expansion with a greater
awareness of productivity and efficiency and further increase earnings, and
this will involve various activities including sales operations that take into
consideration sales channels and conducting promotions to generate demand based
on an awareness of the medium's characteristics. 
HUIS TEN BOSCH Co., Ltd. will exert its originality and creativity to develop
entertainment and events and move forward various new projects. The company
will strive to realize further growth through various endeavors, including
holding the From No.1 of the East to No.1 of the world - Kingdom of the Light
with 10 million illumination bulbs (from November 23, 2012 - March 10, 2013);
opening i-4, a dome theater with 360 degrees panoramic view on November 23,
2012; and introducing The Maze, a massive five-story maze that is on one of the
largest in the world, in the spring of 2013 (expected to open March 1, 2013). 
In addition, the Group announced the founding of an international charter
airline company on December 4, 2012, and the company plans to make its first
flight in the summer of 2013 and is in preparation for this flight. 

III. Dividends
Year ended                  2013 (Forecast)         2012         2011
                                      34.00        34.00        32.00

The Company expects to pay a year-end dividend of 34 yen per share. As for the
dividend for the next fiscal year, the Group plans to pay an annual common
dividend of 34 yen per share to ensure sustainable and stable profit sharing.
However, the Company will remain flexible in responding to the situation, if
performance worsens in uncertain market conditions. 
About H.I.S. Co., Ltd. 
H.I.S. Co., Ltd. was founded in 1980 and pioneered the Japanese discount
airline ticket industry. Today the H.I.S. Group is comprised of 89 subsidiaries
and 9 affiliated companies around the world, and has become a leader in the
Japanese travel industry. For more information, please visit
http://www.his.co.jp/english/ . 
H.I.S. Co., Ltd.
Manabu Shimizu
Corporate Planning Division
Tel: +81-3-5908-2070
Fax: +81-3-5908-2423
Email: shimizu.manabu@his-world.com 
Copyright 2012 JCN Newswire. All rights reserved. www.japancorp.net 
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