Japan Post : Financial Highlights for the Three Months Ended June 30, 2023

Financial Highlights

for the Three Months Ended June 30, 2023

August 10, 2023

Japan Post Holdings: Financial Highlights

 Results of Operations for the Three Months Ended June 30, 2023		(Billions of yen)
		Japan Post Holdings
		Japan Post Co.	Japan Post Bank	Japan Post Insurance
		(Consolidated)
		(Consolidated)	(Consolidated)	(Consolidated)
	Ordinary income	2,847.9	802.9	643.4	1,593.7
	Year-on-year	+ 129.6	(53.3)	+ 194.6	(15.1)
	(for the three months ended
	June 30, 2022)	+ 4.8%	(6.2)%	+ 43.3%	(0.9)%
	Change
Net ordinary income	173.0	8.4	118.4	43.2
	Year-on-year	+ 10.3	(18.9)	(1.9)	+ 29.7
	(for the three months ended
	June 30, 2022)	+ 6.4%	(69.3)%	(1.6)%	+ 221.5%
	Change
	Net income (loss)	(Note1)	9.3	86.8	21.0
	(8.5)
	Year-on-year	(Note2)
	(127.1)	(20.3)	(1.9)	+ 9.4
	(for the three months ended
	June 30, 2022)	[ - ]	(68.4)%	(2.2)%	+ 80.9%
	Change

Notes: 1.Including ¥85.0 billion in a loss on valuation of securities (extraordinary loss) for the stock in Rakuten Group, Inc. held by Japan Post Holdings.

• 2. 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]	[27.9%]	[56.0%]	[25.2%]	[30.9%]
	Net income	240.0	7.0	335.0	72.0
	[percentage achievement]	[ - ]	[134.2%]	[25.9%]	[29.2%]

Notes: 3.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. 4.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.

5. 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%).

6.The amounts of net income (loss) attributable to Japan Post Holdings, net income 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 of Japan Post Holdings (consolidated), Japan Post Co. (consolidated), Japan Post Bank (consolidated) and Japan Post Insurance (consolidated), respectively.

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

Financial Results

• The volume of items handled decreased by 3.3% in total year-on-year. Mail decreased by 2.2% and Yu-Mail decreased by 9.9%. Yu-Pack(Note1) increased by 2.3% year-on-year (including an increase of 6.8% in Yu-Packet), due to an increase in the volume of Yu- Packet handled.
• Operating income decreased by ¥6.5 billion year-on-year (a decrease of 1.3% year-on-year) due mainly to lower volumes of mail and Yu- Mail handled.
• Net operating loss of ¥6.9 billion was recorded (a decrease of ¥11.0 billion year-on-year from net operating income of ¥4.0 billion in the same period of the previous fiscal year), with an increase in operating expenses of ¥4.4 billion year-on-year (an increase of 0.9% 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)

Trends in Volume of Items Handled

		〔Trends in Net Operating Income〕	(Billions of yen)	5,000					(Volume of items handled in millions)
Net operating				4,549	(2.5 %)
	2021	2022	2023		4,433	( 3.3 %)	4,286
		247
income	Decrease in	20.3	4.0	(6.9)		(5.7 %)	233
(Three months			＋2.3 %	238	Yu-Pack(Note1)
	(three months ended June 30)	4,000
ended June	operating		801	(1.7 %)	787
30, 2022)	income					(9.9 %)	709	Yu-Mail
		Net operating
4.0	(6.5)
				loss
				(Three months	3,000
		Other expenses +2.9	ended June	3,501	(2.5 %)	3,414	(2.2 %)	3,339	Mail
				30, 2023)
	Personnel			(6.9)
	Collection,
	expenses	transport and			2,000
	delivery			2021		2022		2023
	+1.4	outsourcing
		expenses								(three months ended June 30)
		+2.8

Miscellaneous

Results of Operations for the Three Months Ended June 30, 2023

expenses

(Billions of yen)

+0.1

For the three

For the three

Year-on-year

months ended

months ended

change

June 30, 2023

June 30, 2022

Parcels

(5.4)

International mails delivery expenses

＋1.9

Operating income

482.9

489.5

(6.5)

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

Domestic collection, transport and

＋0.9

Sales revenue of

(3.9)

delivery outsourcing expenses

Operating expenses

489.9

485.5

+ 4.4

Postage Stamps and Postcards

Standard mail

(3.6)

Personnel expenses

309.3

307.8

+ 1.4

International mails

＋ 4.2

Salaries and allowances, etc.

＋ 1.1

Other expenses

180.5

177.6

+ 2.9

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

(6.9)

4.0

(11.0)

previously included in the "International Logistics Business, " have been reclassified as part of the "Postal and Domestic

Net operating income (loss)

Logistics Business," and the figures for the same period of the previous fiscal year have been adjusted accordingly.

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

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

Financial Results

• Operating income decreased by ¥1.8 billion year-on-year (a decrease of 0.7% 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 ¥3.3 billion year-on-year (a decrease of 16.3% year-on-year), as operating expenses increased by ¥1.4 billion year-on-year (an increase of 0.6% 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)
							286.2							Other operating income
						2021	2022	2023	300.0		(	16.5)	269.6	(1.8)	267.7	Of which:
							22.5			Merchandising
						11.3	20.7	17.3		＋ 3.8	26.4	＋ 1.4	27.8	business	6.7
Net operating								(three months ended June 30)		48.7			(0.5)	Real estate	7.8
income													48.2	＋ 0.0	48.2	business
Commissions									200.0					Third-party
(Three months								Net operating
ended June	for business									93.5							financial product
							income				(3.7)				agency services	1.7
30, 2022)	consignment	Funds to	Other operating	Personnel		Other				89.7	(5.1)	84.6
20.7	(8.1)	expenses	expenses	(Three months						Postal service
maintain post	income		ended June
		office network	+1.4		(0.8)		+2.2	30, 2023)	100.0	48.6						31.9	commissions
					(13.6)	34.9	(3.0)	Banking commissions
		+4.8					17.3
											72.7				70.2		75.0	Insurance commissions
													(2.5)	＋ 4.8	Funds to maintain
										0.0								post office network
										2021				2022		2023
																	(three months ended June 30)
										Results of Operations for the Three Months Ended June 30, 2023
																		(Billions of yen)
															For the three	For the three	Year-on-year
															months ended	months ended
															change
	Real estate business	＋ 1.0									June 30, 2023	June 30, 2022
				Operating income				267.7		269.6	(1.8)
	Third-party financial product	＋ 0.5
	agency services
	Merchandising business		(0.2)	Taxes and dues	＋ 1.2	Operating expenses				250.3		248.8	+ 1.4
Banking commissions		(5.1)	Salaries and allowances, etc.	(0.7)			Personnel expenses	179.7		180.5	(0.8)
			Other expenses				70.5		68.2	+ 2.2
Insurance commissions		(3.0)
Postal service commissions	＋ 0.0							Net operating income			17.3		20.7	(3.3)

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

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

Financial Results

• Operating income decreased by A$460 million year-on-year (a decrease of 29.0% 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$426 million year-on-year (a decrease of 27.6% year-on-year) overall due to cost reductions in the Global Logistics business and a decrease in expenses in the Global Forwarding business commensurate with lower income, but this was not enough to offset the decline in operating income, and net operating income (EBIT) declined by A$34 million year-on-year (a decrease of 79.4% year-on-year).

Trends in Net Operating Income (EBIT)

Total EBIT(		)	(Millions of Australian dollars)

120	77	43	8
90
60	26	12
	20
30	36	53
	Note 4	25
0	(6)	(22)	(7)
		(8)
(30)	2021	2022	2023

(three months ended June 30)

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

Results of Operations for the Three Months Ended

June 30, 2023

(Millions of Australian dollars) [Billions of yen]

		For the three	For the three	Year-on-year
		months ended	months ended
		change
		June 30, 2023	June 30, 2022
Operating income	1,127	1,588	(460)
(revenue)	[103.5]	[147.1]	[(43.6)]
Operating expenses	1,118	1,545	(426)
[102.6]	[143.0]	[(40.3)]
	Personnel	337	347	(9)
	expenses	[30.9]	[32.1]	[(1.1)]
	Other	781	1,198	(416)
	expenses	[71.7]	[110.9]	[(39.1)]
		8	43	(34)
Net operating
income (EBIT)	[0.8]	[4.0]	[(3.2)]

Notes: 1. For the three months ended June 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 three months ended June 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 three months ended June 30, 2022 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 three months ended June 30, 2023: ¥91.78 to A$1.00 and for the three months ended June 30, 2022: ¥92.60 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 three months ended June 30, 2021 (the effect of this is offset through Corporate/Other).

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