Belc : Summary of Financial Results 2022

Consolidated Financial Results for the Fiscal Year Ended February 28, 2022

[Japanese GAAP]

April 14, 2022

Company name: Belc CO., LTD.

Stock exchange listing: Tokyo Stock Exchange Code number: 9974

URL:https://www.belc.jp

Representative: Issei Harashima, President and Representative Director

Contact: Hideo Ueda, Senior Managing Director; Associate GM of Compliance Office; Responsible for Finance and

Accounting Department and Operations Support Department, and in charge of Legal Affairs

Phone: [phone]

Scheduled date of annual general meeting of shareholders: May 26, 2022 Scheduled date of commencing dividend payments: May 27, 2022 Scheduled date of filing securities report: May 26, 2022

Availability of supplementary explanatory materials on annual financial results: Available Schedule of annual financial results briefing session: Scheduled

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended February 28, 2022 (March 1, 2021 - February 28, 2022)

(1) Consolidated Operating Results (% indicates changes from the previous corresponding period.)

Operating income	Operating profit	Ordinary profit	Profit attributable to owners of parent
Fiscal year ended February 28, 2022 February 28, 2021	Million yen % 300,268 5.6 284,460 18.8	Million yen % 13,072 9.6 11,932 14.0	Million yen % 13,885 9.5 12,675 14.4	Million yen % 9,187 4.1 8,828 21.0

(Note) Comprehensive income: Fiscal year ended February 28, 2022: ¥9,224 million [3.5%]

Fiscal year ended February 28, 2021: ¥8,909 million [26.4%]

Basic earnings per share	Diluted earnings per share	Return on equity	Ratio of ordinary profit to total assets	Ratio of operating profit to net sales
Fiscal year ended February 28, 2022 February 28, 2021	Yen 440.30 423.09	Yen - -	% 11.5 12.1	% 9.6 9.6	% 4.4 4.2

(Reference) Equity in earnings of affiliated companies:

Fiscal year ended February 28, 2022: ¥- million Fiscal year ended February 28, 2021: ¥- million

(2) Consolidated Financial Position

Total assets	Net assets	Equity ratio	Net assets per share
As of February 28, 2022 As of February 28, 2021	Million yen 153,214 136,558	Million yen 83,650 76,283	% 54.6 55.9	Yen 4,008.83 3,655.78

(Reference) Equity: As of February 28, 2022: ¥83,650 million

As of February 28, 2021: ¥76,283 million

(3) Consolidated Cash Flows

Cash flows from operating activities	Cash flows from investing activities	Cash flows from financing activities	Cash and cash equivalents at end of period
Fiscal year ended February 28, 2022 February 28, 2021	Million yen 17,059 17,348	Million yen (18,476) (14,001)	Million yen 5,838 (3,500)	Million yen 11,791 7,369

2. Dividends

Annual dividends	Total dividends (annual)	Payout ratio (consolidated)	Ratio of dividends to net assets (consolidated)
1st quarter-end	2nd quarter-end	3rd quarter-end	Year-end	Total
Fiscal year ended February 28, 2021 Fiscal year ended February 28, 2022	Yen - -	Yen 40.00 43.00	Yen - -	Yen 46.00 47.00	Yen 86.00 90.00	Million yen 1,794 1,877	% 20.3 20.4	% 2.5 2.3
Fiscal year ending February 28, 2023 (Forecast)	-	45.00	-	45.00	90.00	21.2

3. Consolidated Financial Results Forecast for the Fiscal Year Ending February 28, 2023 (March 1, 2022 -

February 28, 2023)

(% indicates changes from the previous corresponding period.)

Operating income	Operating profit	Ordinary profit	Profit attributable to owners of parent	Basic earnings per share
Full year	Million yen 296,166 % -	Million yen 13,193 % -	Million yen 13,223 % (4.8)	Million yen 8,850 % (3.7)	Yen 424.14

(Note) The Company will apply the "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan (ASBJ) Statement No. 29) and other related accounting standards from the beginning of the fiscal year ending February 28, 2023. While the above forecasts reflect the application of these accounting standards, changes from the previous corresponding period for operating income and operating profit are not provided as the figures for the previous fiscal year were prepared using a different accounting process.

* Notes:

• (1) Changes in significant subsidiaries during the fiscal year under review: None (Changes in specified subsidiaries resulting in changes in scope of consolidation) Newly included: -

  Excluded: -

• (2) Changes in accounting policies, changes in accounting estimates and retrospective restatement

  • 1) Changes in accounting policies due to the revision of accounting standards: None

  • 2) Changes in accounting policies other than 1) above: None

  • 3) Changes in accounting estimates: None

  • 4) Retrospective restatement: None

• (3) Total number of issued and outstanding shares (common shares)

  1) Total number of issued and outstanding shares at the end of the fiscal year (including treasury shares):

February 28, 2022:

February 28, 2021:

20,867,800 shares 20,867,800 shares

2) Total number of treasury shares at the end of the fiscal year:

February 28, 2022:	1,287 shares
February 28, 2021:	1,153 shares
3) Average number of shares during the fiscal year:
Fiscal year ended February 28, 2022:	20,866,607 shares
Fiscal year ended February 28, 2021:	20,866,721 shares

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2022 (March 1, 2021 - February 28, 2022)

(1) Non-consolidated Operating Results (% indicates changes from the previous corresponding period.)

Operating income	Operating profit	Ordinary profit	Profit
Fiscal year ended February 28, 2022 February 28, 2021	Million yen % 300,801 5.6 284,836 18.8	Million yen % 12,748 10.7 11,518 17.6	Million yen % 13,591 10.4 12,309 17.5	Million yen % 9,004 2.8 8,756 26.9

Basic earnings per share	Diluted earnings per share
Fiscal year ended February 28, 2022 February 28, 2021	Yen 431.55 419.62	Yen - -

(2) Non-consolidated Financial Position

Total assets	Net assets	Equity ratio	Net assets per share
As of February 28, 2022 As of February 28, 2021	Million yen 151,393 134,769	Million yen 79,234 72,081	% 52.3 53.5	Yen 3,797.21 3,454.37

(Reference) Equity: As of February 28, 2022: ¥79,234 million

As of February 28, 2021: ¥72,081 million

2. Non-consolidated Financial Results Forecast for the Fiscal Year Ending February 28, 2023 (March 1, 2022 -

February 28, 2023)

(% indicates changes from the previous corresponding period.)

Operating income	Ordinary profit	Profit	Basic earnings per share
Full year	Million yen 296,426 % -	Million yen 12,994 % (4.4)	Million yen 8,706 % (3.3)	Yen 417.23

(Note) The Company will apply the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29) and other related accounting standards from the beginning of the fiscal year ending February 28, 2023. While the above forecasts reflect the application of these accounting standards, the change from the previous corresponding period for operating income is not provided as the figure for the previous fiscal year was prepared using a different accounting process.

* These consolidated financial results are outside the scope of audit by certified public accountants or an audit firm.

* Explanation of the proper use of financial results forecasts and other notes

The business outlook and other forward-looking statements in these materials are based on information currently available to the Company and certain assumptions that are deemed reasonable. Actual financial results, etc. may significantly vary from these forecasts due to various factors. For the assumptions used in the above financial results forecasts and other related matters, please refer to "1. Overview of Operating Results, etc. (4) Future Outlook" on page 4.

Table of Contents - Attachments

1. Overview of Operating Results, etc. .................................................................................................... 2

(1) Overview of Operating Results for the Fiscal Year under Review .................................................. 2

(2) Overview of Financial Position for the Fiscal Year under Review ................................................. 3

(3) Overview of Cash Flows for the Fiscal Year under Review ............................................................ 3

(4) Future Outlook ................................................................................................................................ 4

(5) Basic Policy on Distribution of Profits and Dividends for the Fiscal Year under Review and Next

Fiscal Year ......................................................................................................................................... 5

2. Basic Policy on Selection of Accounting Standards ............................................................................ 5

3. Consolidated Financial Statements and Principal Notes ..................................................................... 6

(1) Consolidated Balance Sheets .......................................................................................................... 6

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ..... 8

(3) Consolidated Statements of Changes in Equity ............................................................................ 10

(4) Consolidated Statements of Cash Flows ....................................................................................... 12

(5) Notes to Consolidated Financial Statements ................................................................................. 14

(Notes on going concern assumption) ...................................................................................... 14

(Segment information, etc.) ...................................................................................................... 14

(Per share information) ............................................................................................................. 14

(Significant subsequent events) ................................................................................................ 14

1. Overview of Operating Results, etc.

(1) Overview of Operating Results for the Fiscal Year under Review

During the fiscal year ended February 28, 2022, the Japanese economic climate remained harsh due to the impact of COVID-19. As the level of social and economic activity increases, with measures being implemented to curb the spread of infection, the economy is expected to recover as a result of various government policies and improvements in overseas economies. However, due care must be taken with respect to the risk of the pandemic causing downturns in domestic or overseas economies, and the economic outlook, including the impact of changes in the financial and capital markets, remains uncertain.

In the retail industry, amid the changes in lifestyle and persistent decline in consumer spending due to the spread of COVID-19, conditions remain harsh, with increased transportation costs due to soaring crude oil prices, and higher purchase prices for food products due to rising raw material prices.

In this environment, the Belc Group (the "Group") has worked to sell delicious and fresh products, emphasize our price appeal, and create stores that are supported and trusted by customers, led by our motto of "Better Quality & Lower Price," so that we, as a supermarket, can provide members of local communities with richer lives.

Below is an overview of the main initiatives we have implemented.

As for our sales measures, we have continued with business as usual, supplied products, and fulfilled our role as a lifeline in communities while employing various measures to prevent the spread of COVID-19. In April, to commemorate the number of Belc card members exceeding two million, we made efforts to give customers more incentives to visit our stores, including a massive promotional campaign in which customers won big prizes and product promotion on social media. We have also been enhancing the convenience of our customers by gradually expanding the stores that support "Belc otodoke (delivery) pack," our online grocery shopping service, and "smabelc," a service that enables smart shopping and eases the lines at the check-out counters. Furthermore, we have pushed ahead with our efforts to provide shopping assistance to the elderly and other customers through increasing the availability of our mobile supermarket, "Tokushimaru."

As for our product measures, we have promoted select products by creating conceptual flyers that focus on the products. We have also expanded our offering of products in our private label, "kurabelc (Belc for everyday life)," successively launching reasonably priced products that help improve people's daily lives.

As for our store operations, we have used the Company's greatest feature, our standardized corporate structure, as a foundation on which we have firmly established our labor scheduling program (LSP), appropriately allocated personnel, and leveraged labor-saving equipment to promote efficient chain operations.

As for our store investments, we newly opened the following four new stores: Toda Hikawa-cho Store in Toda City, Saitama Prefecture in July 2021; Forte Ota Store in Ota City, Gunma Prefecture in October 2021;

Sagamihara Miyashimohon-cho Store in Sagamihara City, Kanagawa Prefecture in November 2021; and Hanno Azu Store in Hanno City, Saitama Prefecture in January 2022. In addition, we renovated seven existing stores, expanded their deli and convenience food selections, and updated the facilities to provide more pleasant shopping environments. In March 2021, we closed Satte Minami Store in Satte City, Saitama Prefecture. As a result, we operate 126 stores as of February 28, 2022.

We have leveraged the strength of our in-house logistics to carry out large-scale batch procurement of products from production sites and manufacturers, through which we aim to improve our delivery efficiency and product price competitiveness while achieving more consistent product quality. We have also continued to review and revise our delivery system based on the work performed at stores, and to improve the efficiency of store operations.

Meanwhile, our consolidated subsidiary Home Delica Co., Ltd. started operation of its new No. 1 Plant equipped with cutting edge machinery and production lines in January 2022. Going forward, together with the No. 2 Plant, we intend to build a supply system for products that taste even better and improve the efficiency of our stores. In addition, Joytech, Inc. strived to reinforce the Group's service business by developing and supplying equipment, supplies, and sales materials and through its store cleaning service business.