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

[Japan GAAP]

				February 9, 2022
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:	February 14, 2022	Scheduled Date of Dividend Paid: -
	Quarterly Supplemental Information Materials:	Yes
	Quarterly Information Meeting:		None
										(Amounts less than ¥1 million have been rounded down)
1. Consolidated Operating Results for the Nine Months Ended December 31, 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	%
	Nine months ended December 31, 2021			465,449		9.6			20,356	17.0		21,040		19.1	12,656	9.1
	Nine months ended December 31, 2020			424,603		(0.7)			17,400	1.3		17,663		2.5	11,605	6.7
(Note) Comprehensive income
	Nine months ended December 31, 2021: ¥13,254 million (9.3%)	Nine months ended December 31, 2020: ¥12,126 million (6.3%)
				Profit		Diluted profit
				per share		per share
						Yen			Yen
	Nine months ended December 31, 2021			86.36				71.68
	Nine months ended December 31, 2020			76.32				70.84
(2) Consolidated Financial Position
				Total assets		Net assets			Equity ratio		Net assets per share
				Million yen		Million yen					%		Yen
	As of December 31, 2021			460,559				151,377					30.2		959.38
	As of March 31, 2021			436,066				146,120					30.9		909.55
(Reference) Equity:
	As of December 31, 2021: ¥139,041 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: None

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	100.98
(Note) Change in the forecast made in this period: None

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 December 31, 2021:	152,952,221 shares	As of March 31, 2021:	152,952,221 shares
(b) Treasury shares
As of December 31, 2021:	8,023,589 shares	As of March 31, 2021:	4,764,111 shares
(c) Average number of shares (Cumulative)
Nine months ended December 31, 2021: 146,554,033 shares	Nine months ended December 31, 2020:	152,064,112 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 December 31, 2021: 338,276 shares; as of March 31, 2021: 341,740 shares) and Performance-linked Stock Compensation Plan for Directors (as of December 31, 2021: 338,607 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 .............................................................................................................................................................	4
(1)	Consolidated balance sheets..............................................................................................................................................................	4
(2)	Consolidated statements of (comprehensive) income .......................................................................................................................	6
	Consolidated statements of income
	For the nine months ended December 31, 2020 and 2021 ............................................................................................................	6
	Consolidated statements of comprehensive income
	For the nine months ended December 31, 2020 and 2021 ............................................................................................................	7

1

1. Results of Operations and Financial Condition

1. Results of operations
   In the nine-month period of the fiscal year ending March 31, 2022 (April 1, 2021 to December 31, 2021), the economic environment has, despite a gradual recovery in economic activity after the fifth wave of the novel coronavirus disease (COVID-19) waned, maintained an uncertain outlook with a resurgence in the spread of infections due to a new variant, and with the added factor of soaring fuel prices.
   The nine-month-period performance was as follows.

				(Unit: Millions of Yen)
	Nine months ended	Nine months ended	Change	%
	December 31, 2020	December 31, 2021
Operating revenue	424,603	465,449	40,846	9.6
Operating profit	17,400	20,356	2,956	17.0
Ordinary profit	17,663	21,040	3,376	19.1
Profit attributable to owners of	11,605	12,656	1,051	9.1
parent

Despite the fact that we were affected primarily by the application of the Accounting Standard for Revenue Recognition in terms of operating revenue, and also affected primarily by soaring fuel prices in terms of profit, 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 nine-month-period operating revenue by segment was as follows.

Logistics

				(Unit: Millions of Yen)
	Nine months ended	Nine months ended	Change	%
	December 31, 2020	December 31, 2021
Operating revenue	290,084	324,007	33,922	11.7
Segment income	15,702	18,660	2,958	18.8

Despite the effect of soaring fuel prices, we strived to expand sales, improve cost efficiency and enhance productivity 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, while reaping the contribution of revenue from M&A. As a result, operating revenue increased ¥33,922 million year on year to ¥324,007 million, and segment income rose ¥2,958 million year on year to ¥18,660 million.

Trading & commerce

				(Unit: Millions of Yen)
	Nine months ended	Nine months ended	Change	%
	December 31, 2020	December 31, 2021
Operating revenue	121,180	114,129	(7,051)	(5.8)
Segment income	2,412	2,301	(110)	(4.6)

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 ¥7,051 million year on year to ¥114,129 million and segment income fell ¥110 million year on year to ¥2,301 million.

Others

				(Unit: Millions of Yen)
	Nine months ended	Nine months ended	Change	%
	December 31, 2020	December 31, 2021
Operating revenue	13,337	27,312	13,975	104.8
Segment income (loss)	(209)	167	377	-

In addition to making membership-based general wholesale and retail business operator TERAUCHI CO., LTD. a consolidated subsidiary in January 2021, and working on expanding sales and improving cost efficiency, a recovery in consumer spending from October to December also contributed to the results. Operating revenue increased by ¥13,975 million year on year to ¥27,312 million and segment income rose ¥377 million year on year to ¥167 million.

2

1. Financial condition
   Assets, liabilities and net assets
   Total assets
   Total assets as of December 31, 2021 were ¥460,559 million, ¥24,492 million higher than at the end of the previous fiscal year. Current assets amounted to ¥169,223 million, up ¥5,332 million from the end of the previous fiscal year. This was mainly due to increases of ¥12,871 million in trade notes and accounts receivable, and contract assets, ¥1,045 million in electronically recorded monetary claims - operating, ¥1,048 million in merchandise and finished goods and ¥2,328 million in other current assets, despite a decrease of ¥11,904 million in cash and deposits.
   Non-current assets totaled ¥291,335 million, up ¥19,159 million from the end of the previous fiscal year. This was primarily due to increases of ¥15,791 million in property, plant and equipment and ¥3,819 million in intangible assets.
   Liabilities
   Liabilities as of December 31, 2021 increased ¥19,235 million from the end of the previous fiscal year to ¥309,181 million. Current liabilities totaled ¥131,379 million, down ¥2,335 million from the end of the previous fiscal year. This was mainly due to decreases of ¥7,094 million in current portion of bonds payable, ¥3,275 million in income taxes payable and ¥2,460 million in provision for bonuses, despite increases of ¥7,187 million in trade notes and accounts payable, ¥1,032 million in electronically recorded obligations - operating and ¥1,331 million in short-term borrowings.
   Non-current liabilities totaled ¥177,802 million, up ¥21,571 million from the end of the previous fiscal year. This was mainly attributable to increases of ¥9,976 million in bonds payable, ¥8,020 million in long-term borrowings, ¥1,519 million in long-term lease obligations and ¥2,079 million in other non-current liabilities.
   Net assets
   Net assets as of December 31, 2021 rose ¥5,256 million from the end of the previous fiscal year to ¥151,377 million. This was primarily due to increases of ¥7,939 million in retained earnings and ¥1,018 million in non-controlling interests, despite a decrease of ¥3,497 million in purchase of treasury shares. The equity ratio as of December 31, 2021 decreased by 0.7 percentage points to 30.2% 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. Forecast for the full-term of the fiscal year ending March 31, 2022
   No revisions have been made to the forecast of consolidated operating results for the fiscal year ending March 31, 2022, announced in "Summary of Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2022" on November 12, 2021.

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