Financial Highlights

for the Six Months Ended September 30, 2023

November 13, 2023

Japan Post Holdings: Financial Highlights

Results of Operations for the Six Months Ended September 30, 2023

(Billions of yen)

Japan Post Holdings

Japan Post Co.

Japan Post Bank

Japan Post Insurance

(Consolidated)

(Consolidated)

(Consolidated)

(Consolidated)

Ordinary income

5,618.1

1,582.6

1,299.5

3,113.9

Year-on-year

+ 167.7

(124.4)

+ 370.7

(88.4)

(for the six months ended

September 30, 2022)

+ 3.1%

(7.3)%

+ 39.9%

(2.8)%

Change

Net ordinary income (loss)

335.2

(22.9)

253.8

99.3

Year-on-year

+ 40.7

(57.7)

+ 33.6

+ 64.7

(for the six months ended

September 30, 2022)

+ 13.8%

-

+ 15.2%

+ 187.5%

Change

Net income (loss)

120.2

(21.0)

182.1

50.4

Year-on-year

(Note)

(85.7)

(47.4)

+ 23.5

+ 2.1

(for the six months ended

September 30, 2022)

(41.6)%

-

+ 14.8%

+ 4.4%

Change

Note: Including the effect of a decline in the ratio of shareholders' equity (89%→61.5%) associated with the sale of shares of Japan Post Bank held by Japan Post Holdings (March 2023).

  • Forecast for the Fiscal Year Ending March 31, 2024

Net ordinary income

620.0

15.0

470.0

140.0

[percentage achievement]

[54.1%]

[ - ]

[54.0%]

[70.9%]

Net income

240.0

7.0

335.0

72.0

[percentage achievement]

[50.1%]

[ - ]

[54.3%]

[70.1%]

Notes: 1.Figures less than ¥0.1 billion are rounded down. The figures of Japan Post Holdings (consolidated) and the combined figures of each subsidiary do not correspond because of other consolidated accounting procedures, etc. 2.The amount of ordinary profit on the consolidated statements of income of Japan Post Insurance has been used for net ordinary income of Japan Post Insurance.

3. Net income for Japan Post Holdings (consolidated) has been calculated based on the ratio of shareholders' equity held by Japan Post Holdings in Japan Post Co. (100%), Japan Post Bank (61.5%) and Japan Post Insurance (49.8%).

4.The amounts of net income attributable to Japan Post Holdings, net loss attributable to Japan Post Co., net income attributable to Japan Post Bank and net income attributable to Japan Post Insurance have been used for net income (loss) of Japan Post Holdings (consolidated), Japan Post Co. (consolidated), Japan Post Bank (consolidated) and Japan Post Insurance (consolidated), respectively.

Copyright © 2023 JAPAN POST GROUP. All Rights Reserved. 1

Japan Post Co. (Consolidated) [Postal and Domestic Logistics Business]:

Financial Results

  • The volume of items handled decreased by 4.7% in total year-on-year. Mail decreased by 3.4% and Yu-Mail decreased by 12.3%. Yu-Pack(Note1) increased by 1.7% year-on-year (including an increase of 5.1% in Yu-Packet), due to an increase in the volume of Yu- Packet handled.
  • Operating income decreased by ¥34.4 billion year-on-year (a decrease of 3.5% year-on-year) due mainly to lower volumes of mail and Yu-Mail handled.
  • Net operating loss of ¥50.7 billion was recorded (loss increased by ¥44.4 billion from net operating loss of ¥6.2 billion in the same period of the previous fiscal year), with an increase in operating expenses of ¥10.0 billion year-on-year (an increase of 1.0% year-on-year), due mainly to increases in personnel expenses and collection, transport and delivery outsourcing expenses, despite cost control initiatives and other measures.

Analysis of Year-on-year Change in Net Operating Income (loss)

(Billions of yen)

Net operating

〔Trends in Net Operating Income (Loss)〕

Net operating

2021

2022

2023

loss

loss

7.2

(6.2)

(50.7)

(Six months

(Six months

ended

(six months ended September 30)

ended

September

Decrease in

September

30, 2022)

30, 2023)

operating

(6.2)

(50.7)

income

(34.4)

Other expenses +3.0

Personnel

Collection,

transport and

expenses

delivery

+6.9

outsourcing

Miscellaneous

expenses

expenses

+5.7

(2.6)

Trends in Volume of Items Handled

(Volume of items handled in millions)

( 1.6 %)

( 4.7 %)

( 2.8 %)

＋1.7 %

Yu-Pack(Note1)

( 2.9 %)

(12.3 %)

Yu-Mail

( 1.2 %)

( 3.4 %)

Mail

0

(six months ended September 30)

Results of Operations for the Six Months Ended September 30, 2023

(Billions of yen)

Parcels

(12.3)

(Yu-Pack(note1) and Yu-Mail)

Standard mail

(9.9)

Sales revenue of

(7.4)

Postage Stamps and Postcards

Optional services

(6.9)

International mails

＋ 4.0

Domestic collection,

Delivery outsourcing

＋ 3.1

expenses

International mails

＋ 2.5

delivery expenses

Salaries and allowances,

＋ 4.3

etc.

Legal welfare expenses

＋ 2.0

Operating outsourcing

(1.8)

expenses

Postal service

(1.4)

commissions

For the six

For the six

Year-on-year

months ended

months ended

change

Sept. 30, 2023

Sept. 30, 2022

Operating income

941.5

976.0

(34.4)

Operating expenses

992.3

982.2

+ 10.0

Personnel expenses

622.6

615.7

+ 6.9

Notes: 1. Yu-Pack includes Yu-Packet.

2. From the three months ended June 30, 2023, JP Logistics Group Co., Ltd. and JP Logistics Co., Ltd., which were previously included in the "International Logistics Business, " have been reclassified as part of the "Postal and Domestic Logistics Business," and the figures for the same period of the previous fiscal year have been adjusted accordingly.

Other expenses

369.6

366.5

+ 3.0

Net operating loss

(50.7)

(6.2)

(44.4)

Copyright © 2023 JAPAN POST GROUP. All Rights Reserved. 2

Japan Post Co. (Consolidated) [Post Office Business]:

Financial Results

  • Operating income decreased by ¥7.8 billion year-on-year (a decrease of 1.5% year-on-year), with a continuing decrease in banking commissions and insurance commissions, despite an increase in income from the real estate business due to a rise in rental income from existing properties.
  • Net operating income decreased by ¥6.7 billion year-on-year (a decrease of 18.1% year-on-year), as operating expenses decreased by ¥1.1 billion year-on-year (a decrease of 0.2% year-on-year) with a rise in other expenses due mainly to tax on real estate acquisition associated with the completion of real estate development properties, despite a decrease in personnel expenses.

Analysis of Year-on-year Change in Net Operating Income

Trends in the Earnings Structure

〔Trends in Net Operating Income〕

(Billions of yen)

(Billions of yen)

600.0

572.8

Other operating income

2021

2022

2023

(35.0)

537.8

(7.8)

530.0

Of which:

52.2

Real estate

Net operating

19.5

37.1

30.4

＋ 5.3

57.5

＋ 1.7

59.2

business

15.9

(six months ended September 30)

96.9

Merchandising

income

(0.6)

15.6

96.2

(1.4)

94.8

business

(Six months

Commissions

Net operating

400.0

Third-party

ended

for business

financial product

September

income

181.7

consignment

(7.4)

174.2

163.3

agency services

3.9

30, 2022)

Personnel

Other

(Six months

(10.9)

Postal service

37.1

(19.2)

ended

expenses

expenses

Funds to

Other operating

September

200.0

96.5

commissions

(5.0)

+3.8

(27.1)

69.4

62.5

maintain post

30, 2023)

(6.8)

Banking commissions

income

office network

+1.7

30.4

Insurance commissions

+9.6

145.4

140.4

150.0

(5.0)

＋ 9.6

Funds to maintain

0.0

post office network

2021

2022

2023

(six months ended September 30)

Results of Operations for the Six Months Ended September 30, 2023

(Billions of yen)

For the six

For the six

Year-on-year

months ended

months ended

change

Real estate business

＋ 1.6

Commission fee

＋ 1.7

Sept. 30, 2023

Sept. 30, 2022

Merchandising business

(0.3)

Taxes and dues

＋ 0.6

Operating income

530.0

537.8

(7.8)

Third-party financial product

(0.0)

Depreciation and

＋ 0.5

Operating expenses

499.5

500.6

(1.1)

agency services

amortization

Personnel expenses

356.8

361.9

(5.0)

Banking commissions

(10.9)

Salaries and allowances, etc.

(4.6)

Other expenses

142.6

138.7

+ 3.8

Insurance commissions

(6.8)

Retirement benefit expenses

(1.0)

30.4

37.1

(6.7)

Postal service commissions

(1.4)

Legal welfare expenses

＋ 0.6

Net operating income

Copyright © 2023 JAPAN POST GROUP. All Rights Reserved. 3

Japan Post Co. (Consolidated) [International Logistics Business]:

Financial Results

  • Operating income decreased by A$851 million year-on-year (a decrease of 27.2% year-on-year), due partly to a fall in cargo rates in the Global Forwarding business, despite securing income in the Global Logistics business on par with the same period of the previous fiscal year.
  • Operating expenses decreased by A$801 million year-on-year (a decrease of 26.3% year-on-year) overall due to a decrease in expenses in the Global Forwarding business commensurate with lower income and cost reductions in the Global Logistics business, but this was not enough to offset the decline in operating income, and net operating income (EBIT) declined by A$49 million year-on-year (a decrease of 57.1% year-on-year).

Trends in Net Operating Income (EBIT)

Total EBIT(

)

(Millions of Australian dollars)

250

187

86

37

200

150

60

100

93

37

50

97

53

Note 4

64

0

(19)

(6)

(48)

(20)

(50)

2021

2022

2023

(six months ended September 30)

■ Global Logistics ■ Global Forwarding ■ Global Express ■ Corporate/Other

Results of Operations for the Six Months Ended

September 30, 2023

(Millions of Australian dollars) [Billions of yen]

For the six

For the six

Year-on-year

months ended

months ended

change

Sept. 30, 2023

Sept. 30, 2022

Operating income

2,284

3,136

(851)

(revenue)

[213.0]

[293.4]

[(80.4)]

Operating expenses

2,247

3,049

(801)

[209.5]

[285.2]

[(75.7)]

Personnel

662

698

(36)

expenses

[61.7]

[65.3]

[(3.5)]

Other

1,584

2,350

(765)

expenses

[147.7]

[219.9]

[(72.1)]

37

86

(49)

Net operating

income (EBIT)

[3.4]

[8.1]

[(4.6)]

Notes: 1. For the six months ended September 30, 2021, operating income (revenue), operating expenses and net operating income (EBIT) are the total amounts for Toll, JP Logistics Group Co., Ltd. and JP Logistics Co., Ltd. For the six months ended September 30, 2023 and 2022, operating income (revenue), operating expenses and net operating income (EBIT) are the amounts for Toll only, as JP Logistics Group Co., Ltd. and JP Logistics Co., Ltd. have been reclassified as part of the "Postal and Domestic Logistics Business" from the three months ended June 30, 2023.

  1. Figures for the six months ended September 30, 2021 in the above graph have been reclassified due to a partial reclassification of businesses between segments from segment from the three months ended June 30, 2022 (total amounts are unchanged).
  2. Figures in square brackets are presented in billions of yen (Average exchange rate for the six months ended September 30, 2023: ¥93.22 to A$1.00 and for the six months ended September 30, 2022: ¥93.55 to A$1.00).
  3. Depreciation and amortization that have been suspended based on IFRS are recorded in operating income ( EBIT) for the Global Express business for the six months ended September 30, 2021 (the effect of this is offset through Corporate/Other).

Copyright © 2023 JAPAN POST GROUP. All Rights Reserved. 4

Japan Post Co. (Consolidated): Financial Highlights

  • Operating income decreased by ¥121.6 billion year-on-year (a decrease of 7.2% year-on-year, including a decrease of ¥1.0 billion attributable to the effect of exchange rate fluctuations).
  • Net operating income decreased in all three businesses (loss increased in the postal and domestic logistics business) and an overall net operating loss of ¥20.1 billion was recorded (a decrease of ¥55.2 billion from net operating income of ¥35.0 billion in the same period of the previous fiscal year).
  • Net ordinary loss of ¥22.9 billion (a decrease of ¥57.7 billion from net ordinary income of ¥34.7 billion in the same period of the previous fiscal year) and net loss of ¥21.0 billion (a decrease of ¥47.4 billion from net income of ¥26.3 billion in the same period of the previous fiscal year) were also recorded.

Analysis of Year-on-year Change in Net Income (Loss)

Results of Operations for the Six Months Ended September 30, 2023

〔Trends in Net Operating Income (Loss)〕

2021

2022

2023

38.5

35.0

(20.1)

(six months ended September 30)

Net income

Net operating

income from

(Six months

postal and

ended

domestic

September 30,

logistics

2022)

business

(Billions of yen)

〔Trends in Net Income (Loss)〕

2021

2022

2023

6.4

26.3

(21.0)

(six months ended September 30)

(Billions of yen)

For the six

For the six

Year-on-year

months ended

months ended

change

Sept. 30, 2023

Sept. 30, 2022

Operating income

1,579.8

1,701.5

(121.6)

Operating expenses

1,600.0

1,666.4

(66.4)

26.3

(44.4)

Net loss

(Six months

ended

September 30,

2023)

(21.0)

Net operating

income from

Net operating

post office

income from

Income

business

international

Other income

(6.7)

logistics

taxes, etc.

(expenses)

business

Extraordinary

(10.2)

(4.6)

gains(losses)

(1.7)

Personnel

1,041.3

1,042.9

(1.6)

expenses

Other expenses

558.6

623.5

(64.8)

Net operating income (loss)

(20.1)

35.0

(55.2)

Net ordinary income (loss)

(22.9)

34.7

(57.7)

Extraordinary gains

6.4

5.6

+ 0.7

Income (loss) before

(16.5)

40.4

(56.9)

income taxes

Income taxes

(9.4)

Note: JP Logistics Group Co., Ltd. and JP Logistics Co., Ltd. have been reclassified from the "International Logistics Business" to the "Postal and Domestic Logistics Business" from the three months ended June 30, 2023. Figures for the same period of the previous fiscal year have also been adjusted to reflect this new classification.

Net income (loss)

(21.0)

26.3

(47.4)

Copyright © 2023 JAPAN POST GROUP. All Rights Reserved. 5

Japan Post Bank (Consolidated): Financial Highlights

Consolidated Results of Operations for the Six Months Ended

September 30, 2023

(Billions of yen)

For the six months ended

Year-on-year

Sept. 30, 2023

Sept. 30, 2022

change

Consolidated gross operating

377.7

576.3

(198.5)

profit

Net interest income

337.9

429.9

(91.9)

Net fees and commissions

77.5

75.0

+ 2.4

Net other operating

(37.7)

71.3

(109.0)

income

Gains (losses) on foreign

(23.8)

51.8

(75.7)

exchanges

Gains (losses) on Japanese

(13.9)

19.3

(33.3)

government bonds, etc.

General and administrative

467.6

466.0

+ 1.5

expenses (excludes non-recurring losses)

Provision for general reserve

-

(0.0)

+ 0.0

for possible loan losses

Consolidated net operating

(89.8)

110.2

(200.1)

profit (loss)

Non-recurring gains (losses)

343.6

109.8

+ 233.7

Net ordinary income

253.8

220.1

+ 33.6

Net income

182.1

158.6

+ 23.5

Overview

  • Consolidated gross operating profit
    Net interest income decreased by ¥91.9 billion year-on-year, primarily due to an increase in foreign currency funding costs.
    Net fees and commissions increased by ¥2.4 billion year-on-year. Net other operating income decreased by ¥109.0 billion year-on-year, due to a decrease in gains (losses) on Japanese government bonds, etc. and a decrease in gains (losses) on foreign exchanges.
  • General and administrative expenses
    Increased by ¥1.5 billion year-on-year due to an increase in non- personnel expenses.
  • Non-recurringgains (losses)
    Increased by ¥233.7 billion year-on-year due to an increase in gain on sales associated with risk adjustment operations for stocks, as well as a boost in income from private equity funds and real estate funds.
  • Net income
    Achieved 54.3% of the full-year results forecast of ¥335.0 billion.

(Reference (Note))

(%)

As of

Change

Sept. 30, 2023

Sept. 30, 2022

ROE

3.85

3.36

+ 0.48

(Shareholders' equity basis)

OHR

65.07

68.14

(3.06)

(Including net gains and losses on

money held in trust, etc.)

Note: Based on the calculation method used for financial targets under the (Japan Post Bank) Medium-Term Management Plan (fiscal years ending March 31, 2022 - 2026):

ROE = net income / [(shareholders' equity at beginning of period + shareholders' equity at end of period) / 2] x 100

OHR = general and administrative expenses / (net interest income, etc. + net fees and commissions) x 100

Net interest income, etc. refers to interest income after deducting interest expenses (including gains and loss on sales, etc.).

ROE and OHR are calculated based on the figures as of the period ended September 30, 2023, and do not represent indicators for the fiscal year ending March 31, 2024.

Copyright © 2023 JAPAN POST GROUP. All Rights Reserved. 6

Japan Post Bank (Non-consolidated): Net Interest Income, etc.

Net Interest Income

(Billions of yen)

For the six

months ended

Year-on-year

Sept. 30, 2023

Sept. 30, 2022

change

Net interest income

337.5

429.7

(92.1)

Interest income

677.6

611.0

+ 66.5

Interest income on

92.9

Japanese government

130.5

(37.5)

bonds

Interest income on

539.5

442.8

+ 96.7

foreign securities

Strategic investment

54.5

100.3

(45.7)

field (Note 1)

Interest expenses

340.0

181.2

+ 158.7

[Reference: Trend in income from the strategic investment field*]

(as of)

  • Income from the strategic investment field contributes to non-recurring gains (losses) in addition to net interest income.

* The strategic investment field includes private equity funds (PE), real estate funds (equity/debt), direct lending funds, infrastructure debt funds, etc.

Notes: 1. Net interest income includes income associated with PE (profit distributions), real estate funds (debt), etc.

2. Non-recurring gains (losses) include income associated with PE (gains (losses) on redemption), real estate funds (equity/debt), etc.

Net Fees and Commissions

(Billions of yen)

For the six months ended

Year-on-year

Sept. 30, 2023

Sept. 30, 2022

change

Net fees and commissions

76.8

74.2

+ 2.5

relating to

Exchange and settlement

45.5

46.4

(0.8)

transactions

ATMs

18.6

16.6

+ 2.0

Investment trusts (Note 3)

5.9

6.1

(0.1)

Others

6.6

5.1

+ 1.4

Note 3: Includes Yucho Fund Wrap (discretionary investment service)

Deposit Balance

(Trillions of yen)

(as of)

Copyright © 2023 JAPAN POST GROUP. All Rights Reserved. 7

Japan Post Bank (Non-consolidated): Status of Investment Assets

(Billions of yen)

(Trillions of yen)

250

220.5

229.6

226.3

226.8

Short-term

13.2

13.1

13.6

207.5

11.5

investments

and others

200

11.3

60.6

66.6

68.2

63.3

etc.

Due from banks,

51.4

150

4.9

5.5

4.6

5.8

4.4

5.6

6.3

5.7

Loans

4.5

6.5

Money held in trust

100

65.6

71.1

74.1

78.3

81.8

Foreign securities,

etc.

15.9

16.5

16.1

Japanese local

50

16.2

17.0

government bonds,

corporate bonds,

53.6

etc.

50.4

49.2

38.1

38.9

Japanese

government

0

bonds

Mar.31, Mar.31, Mar.31, Mar.31, Sept.30,

2020

2021

2022

2023

2023

As of

Composition

As of

Composition

Sept. 30,

Mar. 31,

ratio (%)

ratio (%)

2023

2023

Securities

137,740.6

60.7

132,769.4

58.6

Japanese government

38,904.5

17.1

38,114.7

16.8

bonds

Japanese local

government bonds,

17,001.0

7.4

16,297.4

7.1

corporate bonds,

etc.(Note 1)

Foreign securities, etc.

81,835.1

36.0

78,357.2

34.6

Foreign bonds

27,973.2

12.3

26,139.0

11.5

Investment

53,740.2

23.6

52,110.2

23.0

trusts(Note 2)

6,314.9

2.7

6,564.7

2.8

Money held in trust

Domestic stocks

1,471.4

0.6

1,857.6

0.8

Loans

5,750.9

2.5

5,604.3

2.4

Due from banks, etc.(Note 3)

63,381.6

27.9

68,283.5

30.1

Short-term investments

13,618.8

6.0

13,158.3

5.8

and others(Note 4)

Total investment assets

226,806.9

100.0

226,380.4

100.0

Change

  • 4,971.2
    • 789.8
    • 703.5
  • 3,477.8
  • 1,834.2
  • 1,630.0
    (249.8)

(386.1)

  • 146.5
    (4,901.9)
  • 460.4
  • 426.5

(as of)

Notes: 1. "Japanese local government bonds, corporate bonds, etc." consists of Japanese local government bonds, commercial paper, Japanese corporate bonds and Japanese stocks.

  1. The major investment target in "Investment trusts" is foreign bonds, including private equity funds, etc.
  2. "Due from banks, etc." consists of negotiable certificates of deposit, Bank of Japan deposits and monetary claims bought.
  3. "Short-terminvestments and others" consists of call loans and receivables under resale agreements, etc.

Copyright © 2023 JAPAN POST GROUP. All Rights Reserved. 8

Japan Post Insurance (Consolidated): Financial Highlights

Results of Operations for the Six Months Ended September 30, 2023

(Billions of yen)

For the six months ended

Year-on-year

Sept. 30, 2023

Sept. 30, 2022

change

Ordinary income

3,113.9

3,202.4

(88.4)

Ordinary expenses

3,014.6

3,167.9

(153.2)

Ordinary profit

99.3

34.5

+ 64.7

Extraordinary gains

7.0

81.2

(74.2)

Reversal of reserve for

7.0

81.4

(74.3)

price fluctuations(Note 1)

Provision for reserve for

34.4

27.1

+ 7.2

policyholder dividends

Net income

50.4

48.2

+ 2.1

Annualized premiums from

45.2

32.7

new policies

+ 12.4

(individual insurance)

Overview

  • Core profit increased due mainly to a decrease in insurance payments associated with COVID-19. In addition, net capital gains (losses) improved substantially. As a result, ordinary profit (consolidated) increased by ¥64.7 billion year-on-year to ¥99.3 billion.
  • Net capital gains (losses) (excluding gains on cancellation of investment trusts) were neutralized through the reserve for price fluctuations. As a result, net income increased by ¥2.1 billion year- on-year to ¥50.4 billion.
  • Annualized premiums from new policies increased compared with the same period of the previous fiscal year for both individual insurance and medical care. (Note 3)
  • Annualized premiums from policies in force decreased compared with the end of the previous fiscal year for both individual insurance and medical care.(Notes 2 and 3)

(Reference) Ordinary profit （Non-consolidated）

Annualized premiums from policies in force (individual insurance)(Note 2)

As of

Sept. 30, 2023

Mar. 31, 2023

3,078.7

3,217.6

Change

(138.9)

(Billions of yen)

For the six months ended

Year-on-year

Sept. 30, 2023

Sept. 30, 2022

change

Core profit

131.7

104.6

+ 27.1

Net capital gains (losses)

5.7

(72.1)

+ 77.9

Notes: 1. Positive figures indicate net reversals and negative figures (in parentheses) indicate net provisions.

  1. Policies in force for individual insurance include those for Postal Life Insurance Policies, which show contracts reinsured by Japan Post Insurance from the Organization for Postal Savings, Postal Life insurance and Post Office Network.
  2. Please refer to "Status of Insurance Policies" on page 10 for annualized premiums from new policies and policies in force for medical care.

Non-recurring gains (losses)

(37.2)

1.5

(38.8)

Ordinary profit

100.2

33.9

+ 66.2

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Japan Post Holdings Co. Ltd. published this content on 13 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 13:56:40 UTC.