Senshukai : 〔Delayed〕 Summary of Financial Results for the Third Quarter of Fiscal Year 2021

Summary of Financial Results for the Third Quarter of Fiscal Year 2021

(Nine Months Ended September 30, 2021)

		[Japanese GAAP]
		October 29, 2021
Company name: SENSHUKAI CO.,LTD.	Stock exchange: Tokyo Stock Exchange, First Section
Stock code:	8165	URL: https://www.senshukai.co.jp
Representative:	Mr. Kenji Kajiwara, President and Representative Director
Inquiries:	Mr. Tetsuya Takahashi, Director, General Manager, Corporates Headquarters

Tel: [phone]

Scheduled date of filing of Quarterly Report: November 12, 2021

Scheduled date of payment of dividend: -

Preparation of supplementary materials for quarterly financial results: None

Holding of quarterly financial results meeting: None

(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 3rd Quarter of 2021 (January 1, 2021 - September 30, 2021)

(1) Consolidated operating results (cumulative)

(Percentages represent changes from the same period of the previous fiscal year)

	Net sales	Operating profit		Ordinary profit		Profit attributable to
			owners of parent
	Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen		%
3Q 2021	53,540		(10.0)	462		-	503		-	479		-
3Q 2020	59,502		(8.4)	(1,075)		-	(4,577)		-	(5,070)		-
Note: Comprehensive income (millions of yen) 3Q 2021: 880 (-%)		3Q 2020: (5,336) (-%)
	Net income per share	Diluted net income per share
			Yen				Yen
3Q 2021		10.36				-
3Q 2020		(126.15)				-

(2) Consolidated financial position

	Total assets		Net assets	Equity ratio	Net assets per share
	Millions of yen		Millions of yen	%	Yen
3Q 2021	51,636		33,323	64.5	710.53
Fiscal Year 2020	63,933		32,088	50.2	699.01
Reference: Shareholders' equity (millions of yen)	3Q 2021: 33,323	Fiscal Year 2020: 32,088

2. Dividends

			Dividend per share
	1Q-end	2Q-end		3Q-end	Year-end	Total
	Yen	Yen		Yen	Yen	Yen
Fiscal Year 2020	-	0.00		-	0.00	0.00
Fiscal Year 2021	-	3.00		-
Fiscal Year 2021 (forecasts)					4.00	7.00

Note: Revision to the most recently announced dividend forecast: None

3. Consolidated Outlook for Fiscal Year 2021 (January 1, 2021 - December 31, 2021)

(Percentages represent changes from the same period of the previous fiscal year)

	Net sales		Operating profit	Ordinary profit		Profit attributable to	Net income per
			owners of parent		share
	Millions of yen		%	Millions of yen	%	Millions of yen		%	Millions of yen		%	Yen
Full Year 2021	76,000		(8.7)	1,000	-	1,100		-	1,150		-	24.76

Note: Revision to the most recently announced consolidated outlook: None

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): Yes

Excluded: 3 (Dears Brain Inc., PLANETWORK CO., LTD., WONDERSTAGE Co., Ltd.)

1. Note: Please refer to "2. Quarterly Consolidated Financial Statements and Notes, (3) Notes to Quarterly Consolidated Financial Statements (Changes in Significant Subsidiaries during the Period)" on page 8 for further information.

2. Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
   Note: Please refer to "2. Quarterly Consolidated Financial Statements and Notes, (3) Notes to Quarterly Consolidated Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)" on page 8 for further information.
3. Changes in accounting policies and accounting-based estimates, and restatements
4. 1. Changes in accounting policies due to revisions in accounting standards, others: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
5. Number of shares outstanding (common shares)
6. 1. Number of shares outstanding at the end of the period (including treasury shares)

3Q 2021:

52,056,993 shares

Fiscal Year 2020:

52,056,993 shares

2) Number of treasury shares at the end of the period

3Q 2021:

5,158,150 shares

Fiscal Year 2020:

6,151,627 shares

3) Average number of shares outstanding during the period

3Q 2021:

46,293,785 shares

3Q 2020:

40,191,445 shares

• This quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
• Cautionary statement with respect to forward-looking statements Cautionary statement with respect to forecasts
  The above projections are based on information available at the time of release of this report. Actual results could differ significantly from these projections due to a variety of factors. For further details regarding the projections, please refer to page 3, "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts and Other Forward-looking Statements."

	SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2021
Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Forecasts and Other Forward-looking Statements	3
2. Quarterly Consolidated Financial Statements and Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
	Income	6
	Quarterly Consolidated Statement of Income
	(For the Nine-month Period)	6
	Quarterly Consolidated Statement of Comprehensive Income
	(For the Nine-month Period)	7
(3)	Notes to Quarterly Consolidated Financial Statements	8
	(Going Concern Assumption)	8
	(Significant Changes in Shareholders' Equity)	8
	(Changes in Significant Subsidiaries during the Period)	8
	(Important Changes in the Scope of Application of the Equity Method)	8
	(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)	8
	(Additional Information)	8
	(Segment Information)	9

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2021

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

In the first nine months (January 1 to September 30) of 2021, the business environment remained severe due to repeated declarations of a state of emergency following the resurgence of COVID-19 and restrictions on economic activity. Although there is progress with COVID-19 vaccinations, the outlook continues to be uncertain.

In Japan's retail industry, store sales continue to face a difficult situation due to restrictions on going o ut and reduced opening hours, while mail-order and online shopping are now more firmly established as a shopping channel among consumers than was the case before the COVID-19 pandemic.

In this business environment, sales were firm in the mail-order and online shopping business compared with 2019 pre-COVID-19 levels. However, net sales in the first nine months of 2021 were down 10.0% year-over-year to 53,540 million yen because the special demand for stay-at-home consumption caused by the COVID-19 pandemic settled down compared to the same period of the previous year and, following the sale of shares at the end of the first quarter, a subsidiary company in the bridal business was excluded from the Group's scope of consolidation. For the same reasons, the mail-order and online shopping businesses reported a decline in earnings, but the bridal business moved into the black. As a result, there was an operating profit of 462 million yen compared with an operating loss of 1,075 million yen in the first nine months of 2020. Ordinary profit was 503 million yen compared with a loss of 4,577 million yen in the first nine months of 2020. Profit attributable to owners of parent was 479 million yen compared with a loss of 5,070 million yen in the first nine months of 2020.

Business segment performance was as follows.

From the first quarter of 2021, the credit card business, which was formerly included in the insurance and credit card business segment, has been reclassified and included in the mail -order and online shopping business segment for better coordination to the membership measures in this business. In line with this change, the insurance and credit card business segment has been renamed as the "insurance business" segment. Prior-year segment information has been revised to incorporate this new segment to permit comparisons.

(Mail-order and Online Shopping Business)

Consolidated sales in the mail-order and online shopping business, which is primarily the catalog and the Internet businesses, decreased 4.9% year-over-year to 46,521 million yen in the first nine months. Operating profit decreased 34.9% to 1,153 million yen.

Although the number of members making purchases increased steadily by comparison to the pre -COVID-19 pandemic 2019, the level of special demand for stay-at-home consumption eased from the level recorded in the previous year. Other reasons for the decrease in sales and earnings included the strengthening of the framework for the implementation of the medium-term management plan announced in July this year, and the increase in fees and personnel expenses incurred to get ready for the 2022 renewal of the core system, which is an essential premise for our business reform using digital technologies.

(Bridal Business)

Consolidated subsidiaries Dears Brain Inc. and PLANETWORK CO., LTD., and WONDERSTAGE Co., Ltd. , a wholly owned subsidiary of Dears Brain and a sub-subsidiary of Senshukai, were excluded from the scope of consolidation following the sales of all shares of Dears Brain and PLANETWORK on March 31, 2021. In the first quarter of 2021, when the Group had withdrawn from these businesses, consolidated sales in the bridal business decreased 51.3% year-over-year to 1,733 million yen and there was an operating loss of 1,045 million yen compared with a loss of 505 million yen in the first quarter of 2020.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2021

(Corporates Business)

Consolidated sales in the corporates business, which provides products and services to corporations, decreased 4.8% year-over-year to 3,622 million yen. Operating profit decreased 20.2% to 289 million yen.

Although orders for outsourced logistics and call center services increased due to the expansion of mail -order sales to corporate clients, both sales and earnings decreased due to a reduction in the use of novelty services compared to the previous year.

(Insurance Business)

This business provides support, mainly to Belle Maison members, for choosing the most suitable insurance policies. Consolidated sales increased 4.6% year-over-year to 284 million yen and operating profit decreased 4.1% to 116 million yen.

(Others)

Consolidated sales in other businesses, which include childcare support business and manufacturing and sales of cosmetics, increased 1.6% year-over-year to 1,378 million yen. There was an operating loss of 51 million yen compared with a loss of 0 million yen in the first nine months of 2020.

(2) Explanation of Financial Position

(Balance sheet position)

Consolidated subsidiaries Dears Brain Inc. and PLANETWORK CO., LTD., and WONDERSTAGE Co., Ltd., a wholly owned subsidiary of Dears Brain and a sub-subsidiary of Senshukai, were excluded from the scope of consolidation following the sales of all shares of Dears Brain and PLANETWORK at the end of the first quarter of 2021.

Main reason for the following decreases in non-current assets, short-term borrowings and long-term borrowings is the effect of the exclusion of these companies from the consolidation.

Assets totaled 51,636 million yen at the end of the third quarter of 2021, a decrease of 12,297 million yen from the end of 2020.

Current assets decreased 2,836 million yen to 34,776 million yen. The factors included decreases of 4,256 million yen in cash and deposits and 1,079 million yen in notes and accounts receivable-trade, while there was an increase of 2,458 million yen in merchandise and finished goods. Non-current assets decreased 9,461 million yen to 16,860 million yen. The factors included decreases of 8,194 million yen in property, plant and equipment, 144 million yen in intangible assets and 1,121 million yen in investments and other assets.

Current liabilities decreased 6,369 million yen to 14,961 million yen. The factors included decreases of 3,108 million yen in other and 2,683 million yen in short-term borrowings. Non-current liabilities decreased 7,163 million yen to 3,351 million yen. The main factor was a decrease of 5,735 million yen in long-term borrowings.

Net assets increased 1,234 million yen to 33,323 million yen. The factors included booking of profit attributable to owners of parent of 479 million yen, and a decrease of 572 million yen in treasury shares due to disposal of treasury stock for restricted stock compensation. As a result, the equity ratio was 64.5%.

(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

Senshukai currently maintains its consolidated forecasts for fiscal year 2021 (January 1, 2021 to December 31, 2021) that was released on March 23, 2021. Although the outlook remains uncertain due to the impact of COVID- 19, we remain firmly dedicated to contributing to society by fulfilling our duty as a retail company that provides support to consumers by supplying merchandise and new ideas that match the needs of our customers.

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