SENKO : Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2022

This document is a translation of the Japanese financial statements and is not in conformity with accounting principles of the United States.

SENKO Group Holdings Co., Ltd.

Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2022

[Japan GAAP]

				November 12, 2021
Name of Listed Company:	SENKO Group Holdings Co., Ltd.	Stock Listed on: The First Section of the Tokyo Stock Exchange
Code Number:	9069	URL https://www.senkogrouphd.co.jp/en/
Representative:	Title: President and Representative Director	Name: Yasuhisa Fukuda
Inquiries:	Title: Executive Officer, Responsible for PR & IR	Name: Satoru Kokubo	Tel. [phone]

	Scheduled Date of Issue of Quarterly Financial Report:	November 12, 2021	Scheduled Date of Dividend Paid: December 3, 2021
	Quarterly Supplemental Information Materials:	Yes
	Quarterly Information Meeting:		Yes (for analysts)
										(Amounts less than ¥1 million have been rounded down)
1. Consolidated Operating Results for the Six Months Ended September 30, 2021
(1) Consolidated Operating Results (Cumulative)							(Percentage figures represent year-on-year changes)
				Operating revenue		Operating profit		Ordinary profit	Profit attributable to
						owners of parent
				Million yen		%			Million yen	%			Million yen		%	Million yen	%
	Six months ended September 30, 2021			300,762		10.0			11,705	21.4		11,964		22.5	6,955	21.5
	Six months ended September 30, 2020			273,449		(3.1)			9,641	(6.8)		9,767		(3.8)	5,726	(11.0)
(Note) Comprehensive income
	Six months ended September 30, 2021: ¥7,807 million (26.6%)	Six months ended September 30, 2020: ¥6,165 million (-3.8%)
				Profit		Diluted profit
				per share		per share
						Yen			Yen
	Six months ended September 30, 2021			47.20				39.20
	Six months ended September 30, 2020			37.67				34.95
(2) Consolidated Financial Position
				Total assets		Net assets			Equity ratio		Net assets per share
				Million yen		Million yen					%		Yen
	As of September 30, 2021			453,934				148,400					30.0		939.81
	As of March 31, 2021			436,066				146,120					30.9		909.55
(Reference) Equity:
	As of September 30, 2021: ¥136,204 million		As of March 31, 2021: ¥134,783 million

(Note) During the second quarter ended September 30, 2021, the Company finalized the provisional accounting treatment for business combinations. As a result, figures for the fiscal year ended March 31, 2021 reflect the finalization of the provisional accounting treatment.

2. Dividends

			Annual dividend
	June 30	September 30	December 31	March 31	Total
	Yen	Yen	Yen	Yen	Yen
Fiscal year ended March 31, 2021	-	13.00	-	15.00	28.00
Fiscal year ending March 31, 2022	-	17.00
Fiscal year ending March 31, 2022			-	15.00	32.00
(Forecast)
(Note) Change in the estimation of dividend for the fiscal year in this period: Yes

3. Forecast of Consolidated Operating Results for the Fiscal Year Ending March 31, 2022 (From April 1, 2021 to March 31, 2022)

(Percentage figures represent year-on-year changes)

	Operating revenue	Operating profit	Ordinary profit	Profit attributable to	Profit
	owners of parent		per share
	Million yen		%	Million yen	%	Million yen	%	Million yen		%	Yen
Fiscal year ending March 31, 2022	625,000		9.2	25,200	17.1	25,600	15.2	14,800		3.9	100.42
(Note) Change in the forecast made in this period: Yes

Notes

1. Changes in significant subsidiaries during the period (Changes in specified subsidiaries associated with change in scope of consolidation): None
2. Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None
3. Changes in accounting principles and estimates, and retrospective restatement
4. 1. Changes due to revision of accounting standards: Yes
   2. Changes other than in (a): None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
5. Shares outstanding (Common shares)
6. 1. Shares outstanding (including treasury shares)

As of September 30, 2021:	152,952,221 shares	As of March 31, 2021:	152,952,221 shares
(b) Treasury shares
As of September 30, 2021:	8,024,208 shares	As of March 31, 2021:	4,764,111 shares
(c) Average number of shares (Cumulative)
Six months ended September 30, 2021:	147,371,289 shares	Six months ended September 30, 2020:	152,031,426 shares

(Note) Starting with the third quarter of the fiscal year ended March 31, 2018, the number of treasury shares at term-end includes Senko shares owned by the trust accounts of Performance-linked Stock Compensation Plan for Employees (as of September 30, 2021: 338,276 shares; as of March 31, 2021: 341,740 shares) and Performance-linked Stock Compensation Plan for Directors (as of September 30, 2021: 339,226 shares; as of March 31, 2021: 348,873 shares).

Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.

Cautionary statement regarding forecasts of operating results and special notes

• Forward-lookingstatements in these materials are based on information available to management at the time this report was prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. For information about the assumptions used for forecasts and precautions concerning the use of forecasts, please see "Forecast for the full-term of the fiscal year ending March 31, 2022" on page 3.
• The supplementary material on quarterly earnings will be available on the Company's website.

Index to accompanying materials

1. Results of Operations and Financial Condition ...........................................................................................................................................	2
(1)	Results of operations...........................................................................................................................................................................	2
(2)	Financial condition...............................................................................................................................................................................	3
(3)	Forecast for the full-term of the fiscal year ending March 31, 2022...................................................................................................	3
2. Consolidated Financial Statements .............................................................................................................................................................	5
(1)	Consolidated balance sheets..............................................................................................................................................................	5
(2)	Consolidated statements of (comprehensive) income .......................................................................................................................	7
	Consolidated statements of income
	For the six months ended September 30, 2020 and 2021 .............................................................................................................	7
	Consolidated statements of comprehensive income
	For the six months ended September 30, 2020 and 2021 .............................................................................................................	8
(3)	Consolidated statements of cash flows ..............................................................................................................................................	9

1

1. Results of Operations and Financial Condition

1. Results of operations
   In the six-month period of the fiscal year ending March 31, 2022 (April 1, 2021 to September 30, 2021), the economic environment continued to be harsh due to the ongoing spread of the novel coronavirus disease (COVID-19). Although socio-economic activities are increasingly expected to normalize through the vaccination rollout and other measures, the outlook still remains unclear.
   The six-month-period performance was as follows.

				(Unit: Millions of Yen)
	Six months ended	Six months ended	Change	%
	September 30, 2020	September 30, 2021
Operating revenue	273,449	300,762	27,313	10.0
Operating profit	9,641	11,705	2,063	21.4
Ordinary profit	9,767	11,964	2,196	22.5
Profit attributable to owners of	5,726	6,955	1,228	21.5
parent

Amid signs that cargo volumes are recovering in the Logistics business, we made group-wide efforts to expand sales, improve cost efficiency and enhance productivity, as well as promote M&A, and as a result, consolidated operating revenue, consolidated operating profit, consolidated ordinary profit, and profit attributable to owners of parent all increased year on year.

The six-month-period operating revenue by segment was as follows.

Logistics

				(Unit: Millions of Yen)
	Six months ended	Six months ended	Change	%
	September 30, 2020	September 30, 2021
Operating revenue	188,068	208,540	20,471	10.9
Segment income	8,559	10,883	2,323	27.2

Amid an apparent recovery in cargo volumes, which declined drastically due to the impact of the spread of COVID-19 in the corresponding period of the previous fiscal year, we strived to expand sales, improve cost efficiency and enhance productivity while reaping the contribution of revenue from M&A we conducted in the previous fiscal year. As a result, operating revenue increased ¥20,471 million year on year to ¥208,540 million, and segment income rose ¥2,323 million year on year to ¥10,883 million.

Trading & commerce

				(Unit: Millions of Yen)
	Six months ended	Six months ended	Change	%
	September 30, 2020	September 30, 2021
Operating revenue	77,534	75,010	(2,523)	(3.3)
Segment income	1,461	1,372	(88)	(6.1)

In addition to making household paper wholesale distributor AZFIT CO., Ltd. a consolidated subsidiary in April, we worked on expanding sales, improving cost efficiency among other initiatives. However, in part as a result of applying the Accounting Standard for Revenue Recognition and relevant revised ASBJ regulations, and in part due to rising purchase prices in fuel sales, among other factors, operating revenue decreased by ¥2,523 million year on year to ¥75,010 million and segment income fell ¥88 million year on year to ¥1,372 million.

Others

				(Unit: Millions of Yen)
	Six months ended	Six months ended	Change	%
	September 30, 2020	September 30, 2021
Operating revenue	7,846	17,211	9,364	119.4
Segment loss	(26)	(106)	(79)	-

In addition to making membership-based general wholesale and retail business operator TERAUCHI CO., LTD. a consolidated subsidiary in January 2021, we worked on expanding sales, improving cost efficiency among other initiatives. However, in part due to the continued impact of the spread of COVID-19, operating revenue rose ¥9,364 million year on year to ¥17,211 million while segment loss was ¥106 million, a deterioration of ¥79 million year on year.

2

1. Financial condition
2. 1. Assets, liabilities and net assets
      Total assets
      Total assets as of September 30, 2021 were ¥453,934 million, ¥17,868 million higher than at the end of the previous fiscal year.
      Current assets totaled ¥163,945 million, up ¥54 million from the end of the previous fiscal year. This was mainly due to increases of ¥535 million in trade notes and accounts receivable, and contract assets as well as ¥749 million in electronically recorded monetary claims - operating, despite a decrease of ¥1,142 million in cash and deposits.
      Non-current assets totaled ¥289,989 million, up ¥17,813 million from the end of the previous fiscal year. This was primarily due to increases of ¥14,427 million in property, plant and equipment and ¥3,205 million in intangible assets.

Liabilities

Liabilities as of September 30, 2021 increased ¥15,587 million from the end of the previous fiscal year to ¥305,533 million. Current liabilities totaled ¥128,306 million, down ¥5,408 million from the end of the previous fiscal year. This was mainly due to decreases of ¥1,390 million in income taxes payable and ¥4,796 million in other current liabilities, despite an increase of ¥568 million in electronically recorded obligations - operating.

Non-current liabilities totaled ¥177,227 million, up ¥20,996 million from the end of the previous fiscal year. This was mainly attributable to increases of ¥9,976 million in bonds payable, ¥7,927 million in long-term borrowings, ¥1,701 million in long-term lease obligations and ¥1,540 million in other non-current liabilities.

Net assets

Net assets as of September 30, 2021 rose ¥2,280 million from the end of the previous fiscal year to ¥148,400 million. This was primarily due to increases of ¥4,743 million in retained earnings and ¥878 million in non-controlling interests, despite a decrease of ¥3,498 million in purchase of treasury shares. The equity ratio as of September 30, 2021 decreased by 0.9 percentage points to 30.0% from the end of the previous fiscal year.

With regard to the business combination with UACJ Logistics Corporation on December 1, 2020, although provisional accounting treatment was applied in the fiscal year ended March 31, 2021, the business combination was finalized during the second quarter ended September 30, 2021. As a result, the financial position is compared and analyzed with that at the end of the previous fiscal year using the amounts after the revision due to the finalization of the provisional accounting treatment.

2) Cash flows

Cash and cash equivalents as of September 30, 2021 decreased by ¥1,245 million from the end of the previous fiscal year to ¥49,126 million.

Net cash provided by operating activities amounted to ¥12,170 million. This was mainly due to profit before income taxes of ¥11,685 million and depreciation of ¥9,337 million, despite a decrease in cash due to a decrease in accrued liabilities of ¥2,583 million and income taxes paid of ¥5,394 million.

Net cash used in investing activities totaled ¥21,849 million. This was mainly due to purchase of property, plant and equipment of ¥15,913 million and purchase of shares of subsidiaries resulting in change in scope of consolidation of ¥5,174 million.

Net cash provided by financing activities totaled ¥8,259 million. This was mainly due to proceeds from long-term borrowings of ¥10,677 million and proceeds from issuance of bonds of ¥10,000 million, despite net decrease in short-term borrowings of ¥1,797 million, repayments of long-term borrowings of ¥1,858 million, repayments of finance lease obligations of ¥2,473 million, purchase of treasury shares of ¥3,630 million and dividends paid of ¥2,228 million.

1. Forecast for the full-term of the fiscal year ending March 31, 2022
   Considering the consolidated operating results for the six months ended September 30, 2021 and the current circumstances, we have revised our full-year forecast of consolidated operating results for the fiscal year ending March 31, 2022 announced on May 14, 2021, as follows.
   For details, please refer to "Notice Regarding Revision to Full-Year Forecast of Consolidated Operating Results and Dividends of Surplus (Interim Dividend and Increased Dividend)," which was announced today.
   Forecast of consolidated operating results for the fiscal year ending March 31, 2022 (from April 1, 2021 to March 31, 2022)

	Operating	Operating profit	Ordinary profit	Profit attributable
	to owners of		Profit per share
	revenue
			parent
Previous forecast (A)	Million yen	Million yen	Million yen	Million yen		Yen
625,000	24,600	25,000	14,500	97.85
Revised forecast (B)	625,000	25,200	25,600	14,800	100.42
Amount of change (B - A)	-	600	600	300
Change (%)	-	2.4	2.4	2.1
Actual results for the
fiscal year ended March	572,405	21,520	22,230	14,240	93.81
31, 2021

3