Serio : Summary of Consolidated Financial Results for the Fiscal Year Ending May 31, 2022

July 14, 2022

Summary of Consolidated Financial Results for the Fiscal Year Ended May 31, 2022

			[Japanese GAAP]
Company name:	SERIO HOLDINGS CO., LTD.	Listing: Tokyo Stock Exchange
Securities code:	6567	URL: https://www.serio-holdings.co.jp/
Representative:	Hisashi Wakahama, President and CEO
Contact:	Koji Gotani, Director, General Manager, Management Division	Tel: [phone]
Scheduled date of Annual General Meeting of Shareholders:	August 29, 2022
Scheduled date of payment of dividend:	August 30, 2022
Scheduled date of filing of Annual Securities Report:	August 29, 2022
Preparation of supplementary materials for financial results:	Yes
Holding of financial results meeting:	Yes (for institutional investors and analysts)

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended May 31, 2022 (June 1, 2021 - May 31, 2022)

(1) Consolidated results of operations								(Percentages represent year-on-year changes)
	Net sales		Operating profit		Ordinary profit		Profit attributable to
					owners of parent
	Million yen		%	Million yen		%	Million yen		%	Million yen	%
Fiscal year ended May 31, 2022		9,130		11.1	233	(30.7)		272		(21.1)					173	(22.4)
Fiscal year ended May 31, 2021		8,218		18.3	337	147.1		344		105.5					223	121.3
Note: Comprehensive income	Fiscal year ended May 31, 2022:	173 million yen	(down 22.4%)
		Fiscal year ended May 31, 2021:	223 million yen	(up 121.3%)
	Earnings per share	Diluted earnings		Return on equity	Ordinary profit on	Operating profit to
		per share		total assets			net sales
		Yen		Yen				%				%				%
Fiscal year ended May 31, 2022		27.47		-				8.7				6.0				2.6
Fiscal year ended May 31, 2021		35.34		-				12.2				8.2				4.1
Reference: Equity in earnings of affiliates	Fiscal year ended May 31, 2022: -		Fiscal year ended May 31, 2021: -

Notes: 1. SERIO Holdings conducted a two-for-one common stock split on October 1, 2020. Earnings per share are calculated as if this stock split had taken place at the beginning of the previous fiscal year.

1. 2. Diluted earnings per share are not shown because there were no dilutive common stock equivalents.

2. Consolidated financial position

	Total assets		Net assets		Equity ratio	Net assets per share
	Million yen		Million yen		%	Yen
As of May 31, 2022	4,627		2,062		44.6	326.26
As of May 31, 2021	4,495		1,931		43.0	305.21
Reference: Shareholders' equity	As of May 31, 2022:	2,062 million yen	As of May 31, 2021: 1,931 million yen

(3) Consolidated cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at end of period
	Million yen	Million yen	Million yen	Million yen
Fiscal year ended May 31, 2022	169	(184)	(13)	1,869
Fiscal year ended May 31, 2021	483	(163)	44	1,897

2. Dividends

		Dividend per share			Total	Dividend		Dividend on
							payout ratio		net assets
	1Q-end	2Q-end	3Q-end	Year-end	Total		dividends
		(consolidated)	(consolidated)
	Yen	Yen	Yen	Yen	Yen		Million yen	%	%
Fiscal year ended May 31, 2021	-	0.00	-	7.00	7.00	44	19.8	2.3
Fiscal year ended May 31, 2022	-	0.00	-	7.00	7.00	44	25.5	2.2
Fiscal year ending May 31, 2023	-	0.00	-	7.00	7.00			22.7
(forecast)

Note: SERIO Holdings conducted a two-for-one common stock split on October 1, 2020. The dividend per share for the fiscal year ended May 31, 2021 is the amount paid after the common stock split.

3. Consolidated Forecast for the Fiscal Year Ending May 31, 2023 (June 1, 2022 - May 31, 2023)

(Percentages represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings per
		owners of parent	share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	9,640		5.6	300	28.5	300	10.2	195	12.4	30.85

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Changes in accounting policies and accounting-based estimates, and restatements

1)	Changes in accounting policies due to revisions in accounting standards, others:	Yes
2)	Changes in accounting policies other than 1) above:	None
3)	Changes in accounting-based estimates:	None
4)	Restatements:	None

Note: Please refer to page 14 "3. Consolidated Financial Statements and Notes, (5) Notes to Consolidated Financial Statements, Changes in Accounting Policies" for details.

(3) Number of issued shares (common stock)

1)	Number of shares issued at the end of the period (including treasury shares)
	As of May 31, 2022	6,329,400 shares	As of May 31, 2021:	6,329,400 shares
2)	Number of treasury shares at the end of the period
	As of May 31, 2022:	8,627 shares	As of May 31, 2021:	- shares
3) Average number of shares during the period
	Fiscal year ended May 31, 2022:	6,316,662 shares	Fiscal year ended May 31, 2021:	6,329,400 shares

Note: SERIO Holdings conducted a two-for-one common stock split on October 1, 2020. The number of issued shares (common stock) is calculated as if this stock split had taken place at the beginning of the previo us fiscal year.

Reference: Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended May 31, 2022 (June 1, 2021 - May 31, 2022)

(1) Non-consolidated results of operations						(Percentages represent year-on-year changes)
	Net sales	Operating profit			Ordinary profit	Profit
	Million yen	%	Million yen	%		Million yen	%	Million yen	%
Fiscal year ended May 31, 2022	488	12.1	177	29.0		184	28.8	123	28.9
Fiscal year ended May 31, 2021	435	4.5	137	103.3		142	95.8	95	129.5
	Earnings per share		Diluted earnings per share
		Yen				Yen
Fiscal year ended May 31, 2022		19.54				-
Fiscal year ended May 31, 2021		15.14				-

Notes: 1. SERIO Holdings conducted a two-for-one common stock split on October 1, 2020. Earnings per share are calculated as if this stock split had taken place at the beginning of the previous fiscal year.

1. 2. Diluted earnings per share are not shown because there were no dilutive common stock equivalents.

2. Non-consolidatedfinancial position

	Total assets		Net assets		Equity ratio	Net assets per share
	Million yen		Million yen		%	Yen
As of May 31, 2022	1,887		1,782		94.5	282.06
As of May 31, 2021	1,811		1,710		94.4	270.19
Reference: Shareholders' equity	As of May 31, 2022:	1,782 million yen	As of May 31, 2021: 1,710 million yen

• The financial report is not subject to audit by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts and other special items Cautionary statement with respect to forward-looking statements
  Forecasts of future performance in these materials are based on assumption judged to be valid and information available to the SERIO Holdings management at the time the materials were prepared, but are not promises by SERIO Holdings regarding future performance. Actual results may differ materially from the forecasts for a number of reasons. Please refer to "1. Overview of Results of Operations, (4) Outlook" for forecast assumptions and notes of caution for usage.
  How to view supplementary materials for quarterly financial results
  Supplementary materials for the financial results will be disclosed today (July 14, 2022), using the Timely Disclosure network (TDnet). SERIO Holdings plans to hold a web conference information meeting for institutional investors and analysts on July 19, 2022. Materials to be distributed at this event will be posted on the SERIO Holdings website on July 19, 2022.

	SERIO Holdings Co., Ltd. (6567) Financial Results for FY5/22
Contents of Attachments
1. Overview of Results of Operations	2
(1)	Results of Operations	2
(2)	Financial Position	4
(3)	Cash Flows	4
(4)	Outlook	5
(5)	Basic Policy for Profit Distribution and Dividends for the Current and Next Fiscal Years	6
2. Basic Approach to the Selection of Accounting Standards	6
3. Consolidated Financial Statements and Notes	7
(1)	Consolidated Balance Sheet	7
(2)	Consolidated Statements of Income and Comprehensive Income	9
	Consolidated Statement of Income	9
	Consolidated Statement of Comprehensive Income	10
(3)	Consolidated Statement of Changes in Equity	11
(4)	Consolidated Statement of Cash Flows	12
(5)	Notes to Consolidated Financial Statements	13
	Going Concern Assumption	13
	Significant Accounting Policies in the Preparation of Consolidated Financial Statements	13
	Changes in Accounting Policies	14
	Segment Information	14
	Per Share Information	17
	Subsequent Events	17

1

SERIO Holdings Co., Ltd. (6567) Financial Results for FY5/22

1. Overview of Results of Operations

SERIO Holdings completed the formalities for transition to the Tokyo Stock Exchange's new market segment and was transited to the Growth Market on April 4, 2022 after.

SERIO Holdings has applied the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020) and other standards from the beginning of the current fiscal year. As a result, prior-year comparisons are based on figures in the previous fiscal year that use different accounting standards. More information is in "3. Consolidated Financial Statements and Notes, (5) Notes to Consolidated Financial Statements, Changes in Accounting Policies."

(1) Results of Operations

In the fiscal year that ended on May 31, 2022, the outlook for the economy remained unclear because of states of emergency and other safety measures as the pandemic continued.

There is no significant negative impact of the pandemic on the employment assistance business in part because of consistent demand at companies involving workforce flexibility. Although operations were suspended from time to time in the after-schoolday-care and nursery school businesses because of the pandemic, operations are gradually returning to normal. We continued to operate after-schoolday-care facilities and nursery schools while taking actions to prevent infections in order to meet the child care needs of working parents and guardians. In December 2020, the Japanese government announced a New Child -raising Confidence Plan that has the goal of establishing an infrastructure of nursery schools for approximately 140,000 children by the end of 2024. Demand for child care is increasing because of the rising percentage of women in the workforce and demand is expected to continue to climb. The government's commitment to creating an environment conducive to child-rearing has strengthened following the cabinet's decision to create the "Children and Families Agency " in April 2023.

During the fiscal year, we continued to take actions aimed at creating jobs in order to provide an e ven larger number of people with opportunities to work while caring for children. We also continued to strengthen the administrative infrastructures of the after-schoolday-care and nursery school businesses to accommodate the growth of these two operations.

Sales increased because of the contribution to sales of after-schoolday-care facilities and nursery schools that opened in April 2021. Operating profit decreased primarily for two reasons. First are higher personnel expenses than in the previous fiscal year when operating hours of after-schoolday-care facilities were reduced significantly and the number of nursery school children decreased because of the pandemi c. Second is the increase in personnel and other expenses associated with the increase in the head office workforce in preparation for strengthening operations over the medium term.

As a result, net sales increased 11.1% year on year to 9,130 million yen. Operating profit was 233 million yen, down 30.7% and ordinary profit was 272 million yen, a decrease of 21.1%. Profit attributable to owners of parent decreased 22.4% to 173 million yen.

Business segment performance was as follows.

1) Employment assistance

As a company dedicated to enabling people to continue working while caring for a family, we are a source of jobs that enable more women to work in a manner that matches each stage of their lives. We submit proposals to companies in a variety of industries for personnel support that makes it possible to reduce expenses by using people in the most productive ways possible.

Segment sales increased because of an increase in orders from current customers and large orders for operating public-sector call centers. Segment profit decreased because of an increase in the cost of sales associated with one-time cost of upgrading the IT system environment.

As a result, net sales of this business were 2,694 million yen, up 4.2% year on year, and segment profit was 98 million yen, a decrease of 2.6%.

2

SERIO Holdings Co., Ltd. (6567) Financial Results for FY5/22

2) After-school day care

We are continuing to operate after-schoolday-care facilities while strictly following the guidelines for protection against COVID-19 infections in order to allow people to use these facilities with confidence. There is less impact on the after-schoolday-care facilities under management as the number of infections has decreased following the lifting of the priority measures to prevent the spread of the COVID -19 pandemic. Now, number of events and activities we hold are returning to the pre-pandemic level as we strive to operate our after-schoolday-care facilities in a manner that makes children feel at ease and want to continue to attend.

As shown in the table below, the SERIO Group opened eight locations in April 2022, and added an outsourcing contract from one local government agency during the fiscal year. Eight locations were closed because of contract completions and other reasons. As a result, there was no change in the total number of locations. The number of after-schoolday-care facilities operated by the SERIO Group at the end of May 2022 was 133 for public facilities (operated for local governments), 10 for private elementary schools and one in the private sector, a total of 144.

Sales increased because of the inclusion of the sales of 11 locations opened during the previous fiscal year. Segment profit decreased as the return to normal operations following the impact of the pandemic in the previous fiscal year raised personnel expenses.

As a result, net sales of this business were 2,824 million yen, up 10.9% year on year, and segment profit was 114 million yen, a decrease of 27.8%.

Newly opened after-schoolday-care facilities during the fiscal year

Name of facility	Location	Opened	Format
Gekkohara Elementary School Ranran	Meguro-ku, Tokyo	April 2022	Public-sectorafter-school
Hiroba	child care
Mukaihara Elementary School Ranran	Meguro-ku, Tokyo	April 2022	Public-sectorafter-school
Hiroba	child care
Haramachi Elementary School Ranran	Meguro-ku, Tokyo	April 2022	Public-sectorafter-school
Hiroba	child care
Oizumi Nishi Elementary School Child	Nerima-ku, Tokyo	April 2022	Public-sectorafter-school
Care Club	child care
Sodegaura Nishi Elementary School	Narashino-shi, Chiba	April 2022	Public-sectorafter-school
District After-School Child Care Club	child care
Sodegaura Nishi Elementary School	Narashino-shi, Chiba	April 2022	Public-sectorafter-school
After-School Classes	child care
Ueda Higashi Elementary School Twilight	Tempaku-ku, Nagoya	April 2022	Public-sectorafter-school
Room	child care
Tempaku Elementary School Twilight	Tempaku-ku, Nagoya	April 2022	Public-sectorafter-school
Room	child care

3) Nursery schools

Although some nursery schools closed temporarily or cancelled some classes because of the pandemic, operations are gradually returning to normal. We continued operating nursery schools while taking numerous actions to protect children and instructors from infections in accordance with government guidelines.

As of April 1, 2021, there were 5,634 preschool children in Japan who were waiting for a nursery sc hool opening. This is a decrease of 6,805 from one year earlier probably because parents are reluctant to use nursery schools during the pandemic. As the percentage of women who have jobs climbs, demand for child care is remaining very strong. The number of children using nursery schools and other care facilities has increased to 2,740,000, 4,712 more than one year earlier.

During the fiscal year, the SERIO Group opened three certified nursery schools, as shown in the table below. One community child development support facility was closed because of contract completions. The result was a net increase of two locations. At the end of May 2022, there were 26 certified nursery schools, 11 small certified nursery schools, three nursery schools for companies, and two community child development support facilities, a total of 42 locations.

Sales benefited from the increasing number of children at nu rsery schools newly opened in places where there is

3