TOKAI : Financial Results for the First Three Months of the Fiscal Year Ending March 31, 2023

	July 28, 2022
To whom it may concern
Company Name:	TOKAI Holdings Corporation
Representative Name:	Katsuhiko Tokita,
	President & CEO
	(Code No. 3167, TSE Prime Market)
Contact:	Yoshihiro Taniguchi, Public Relations
	and Investor Relations Office
TEL:	[phone]

Financial Results for the First Three Months of the Fiscal Year Ending March 31, 2023

Achieved a Q1 sales hike and a record high for the second consecutive year, Q1 operating profit rise

for the first time in two years and higher results than internally projected

TOKAI Holdings Corporation (hereinafter, "the Company") today announced its financial results for the first three months of the fiscal year ending March 31, 2023.

1. The Company continued to expand its earnings base to achieve a net annual increase of

100,000 in customer count.

The Company announced the fourth Medium-Term Management Plan, Innovation Plan 2024 "Design the Future Life" ("IP24"*1) in May last year. The plan covers the period up to the fiscal year ending March 31, 2025.

A key strategy in IP24 is "LNG strategy." The Company will expand its business areas at the Local level (expansion of share in existing areas), at the National level (expansion of new business areas in Japan), and at the Global level (business development overseas) and will achieve growth in the number of customers through selection and concentration, focusing on profitability.

To achieve 3.56 million customers at the end of the fiscal year ending March 31, 2025, the Company will pursue an aggressive strategy to expand its earnings base, aiming to achieve 3.30 million customers (a net annual increase of 100,000 in customer count) at the end of the fiscal year under review.

In operating activities in the first three months of the fiscal year under review, the Company aggressively conducted sales activities to gain customers while thoroughly taking measures to prevent COVID-19 infections and recorded 3,213,000 continuing customers as of June 30, 2022. This continuing customer exceeded the count at the beginning of the fiscal year (3,194,000) by 19,227 (versus an increase of 9,488 in the same period of the previous fiscal year).

With net increase of 6,635 (LP and city) gas customers (7,514 in the same period of the previous fiscal year), 8,161 CATV customers (8,270), 4,552 Hikari Collaboration customers (126) and 3,151 LIMBO (MVNO service) customers (112), we further expanded our earnings base.

2. Q1 net sales grew for the second consecutive year to achieve new record high, with Q1

operating profit rising for the first time in two years

For the first quarter under review, net sales stood at 51.8 billion yen, up 3.4 billion yen or 7.0% year on year. The figure rose for the second consecutive year to set a new record high. This resulted chiefly from sales growth following an increase in energy, CATV and other customers, rises in selling prices linked with energy purchase prices, and expansion of the stock business for corporate clients in the Information and Communication business.

Operating profit reached 3.4 billion yen, up 0.1 billion yen or 4.0% year on year, marking an increase for the first time in two years. The impact of the LP gas purchase prices that were far higher than the levels in the same period a year earlier was offset mainly by profit growth after an increase in the number of monthly fee- paying customers that accompanied a higher customer count and a profit hike in the Information and Communication business for corporate clients.

Net sales and all profit figures ended higher than their respective internally projected levels.

					(Millions of yen)
	Q1 FY03/23	Q1 FY03/22	YoY
	results	results
	Change		% change
	(April 1, 2022 to June 30, 2022)	(April 1, 2021 to June 30, 2021)
Net sales	51,803	48,396	+3,407		+7.0%
Operating profit	3,355	3,226	+128		+4.0%
Ordinary profit	3,389	3,353	+35		+1.1%
Profit attributable to owners	1,795	1,870	-74		-4.0%
of parent
EPS (yen)	13.72	14.28	-0.56		-3.9%

3. To Achieve the Medium-Term Management Plan, IP24 "Design the Future Life"

With its Corporate Philosophy "For customers' livelihood along with the region, together with the earth, we will continue to grow and develop" as an unchanging value, the Group will adapt to changes in customers' lifestyles and changes in society and the environment and, while supporting and staying close to customers, aims to evolve into a "Life Design Group" that designs and provides the new lifestyles of the future. To this end, we are working on the fourth Medium-Term Management Plan "IP24."

The fiscal year ending March 31, 2023 is the second fiscal year under the IP24. The Company made steady progress in its efforts to achieve the goals described in the five key messages in IP24: (i) Implementation of LNG strategy, (ii) Evolution of TLC*2 concept, (iii) Stepping up of DX strategy, (iv) Optimal allocation of management resources, and (v) Strengthening of SDG initiatives.

To date, the earnings and dividend forecasts for the fiscal year ending March 31, 2023 remain unchanged from those announced on May 10, 2022.

							(Millions of yen)
	FY03/23 forecast	FY03/22 results		YoY
	(April 1, 2022 to March 31,	(April 1, 2021 to March 31,
	2023)		2022)	Change		% change
Net sales	223,000		210,691	+12,309		+5.8%
Operating profit	14,500		15,794	-1,294		-8.2%
Ordinary profit	14,300		15,907	-1,607		-10.1%
Profit attributable to	8,300		8,969	-669		-7.5%
owners of parent
EPS (yen)	63.43		68.49	-5.06		-7.5%
Customer count at end of	3,295,000		3,194,000	+101,000		+3.2%
fiscal year
	FY03/23		FY03/22		FY03/21
	(forecast)
Interim (end of Q2)	16.00 yen		15.00 yen		14.00 yen
Year-end	16.00 yen		17.00 yen		16.00 yen
Annual dividend per share	32.00 yen		32.00 yen		30.00 yen

For details, please see the attached materials, entitled "Financial Results for the First Three Months of the Fiscal Year Ending March 31, 2023."

For the Company's earnings announcement for the first three months of the fiscal year ending March 31, 2023, please see the following URL:

https://www.tokaiholdings.co.jp/english/ir/library/earnings.html

*1 For the details of the fourth Medium-Term Management Plan "IP24," please see the following URL:

https://www.tokaiholdings.co.jp/english/ir/management/manageplan.html

*2 TLC (Total Life Concierge) concept: The Group will provide a comprehensive range of carefully tailored services to help customers live more comfortable lives and aim to improve customer satisfaction.

Financial Results for the First Quarter of the

Fiscal Year Ending March 31, 2023

TOKAI Holdings Corporation

(Code: 3167)

July 28, 2022

Expansion of earnings base proceeds

• The number of continuing customers as of June 30, 2022 stood at 3,213 thousand, an increase of 19 thousand from 3,194 thousand at the beginning of the fiscal year.
• The earnings base continued to expand in the gas business, the CATV business, the Hikari Collaboration business and the LIMBO business.

	Gas (LP and city)			CATV			Hikari Collaboration		LIBMO
(Thousand)	+8				+8
			+8		+3
		+7	+5
				+7		1,240	+3	+2
+5	791
		351	58
								+0	+0

1,20

752

1,16

6

337

53

328

50

718

1

Q1 FY03/2021

Q1 FY03/2022

Q1 FY03/2023

Q1 FY03/2021

Q1 FY03/2022

Q1 FY03/2023

Q1 FY03/2021

Q1 FY03/2022

Q1 FY03/2023

Q1 FY03/2021

Q1 FY03/2022

Q1 FY03/2023

(Two years

(Previous fiscal

(Current fiscal

(Two years

(Previous fiscal

(Current fiscal

(Two years

(Previous fiscal

(Current fiscal

(Two years earlier)

(Previous fiscal

(Current fiscal

earlier)

year)

year)

earlier)

year)

year)

earlier)

year)

year)

year)

year)

Number at end of period

Net increase

Number at end of period

Net increase

Number at end of period

Net increase

Number at end of period

Net increase

* Rounded to the nearest thousand

1

Q1 net sales grow for the second

consecutive year to set new record high

• Q1 net sales rose for the second fiscal year and set a new record high, resulting chiefly from an increase in customers, rises in selling prices linked with energy purchase prices, and expansion of the Information and Communication business for corporate clients.
• Q1 operating profit increased for the first time in two years. The impact of soaring LP gas purchase prices was offset mainly by profit growth after an increase in the number of monthly fee-paying customers that accompanied a higher customer count and a profit hike in the Information and Communication business for corporate clients.

					(Millions of yen)
	Q1 FY03/23	Q1 FY03/22	YoY
	results	results
	(April 1, 2022 -	(April 1, 2021 -	Change		% change
	June 30, 2022)	June 30, 2021)
Net sales	51,803	48,396	+3,407		+7.0%
Operating profit	3,355	3,226	+128		+4.0%
Ordinary profit	3,389	3,353	+35		+1.1%
Profit attributable to	1,795	1,870	-74		-4.0%
owners of parent
EPS (yen)	13.72	14.28	-0.56		-3.9%
					2

Consolidated full-year financial results forecast

• Net sales are forecast to increase 12.3 billion yen, or 5.8% year on year, to reach a new record high for the fifth consecutive fiscal year. This is chiefly attributable to growth in customer numbers and increases in orders received from corporate clients in the Information and Communications business and in the Construction, Equipment and Real Estate business.
• Operating profit is expected to fall 1.3 billion yen year on year, taking into account an impact of 5.1 billion yen from rising LP gas purchase prices.
• The LP gas business will continue to drive the active attraction of customers on the basis of pricing measures that will maintain price competitiveness.
• The number of customers in the overall Group will rise 100,000 from 3.19 million at the end of the previous fiscal year, to 3.30 million.

	FY03/23	FY03/22	YoY
	forecast	results	Change		% change
	(FY2022)	(FY2021)		(%)
Net sales	2,230	2,107	+123		+5.8
Operating profit	145	158	-13		-8.2
Ordinary profit	143	159	-16		-10.1
Profit attributable	83	90	-7		-7.5
to owners of parent
Customer count at	3.30 million	3.19 million	+0.1 million		+3.2
end of fiscal year

(100 millions of yen)

Plan IP24	From Plan IP24
(FY2022)	Change	% change
(%)
2,210	+20	+0.9
156	-11	-7.1
‒	‒	‒
90	-7	-7.8
3.32 million	-0.02 million	-0.6

3

Dividend forecast

• Annual dividend per share is projected to stay unchanged at 32 yen per share from the previous fiscal year.
• The dividend forecast (announced on May 10, 2022) remains unchanged.

50		52.9%				54.7%					50.5%
45				46.7%			47.2%	44.5%	44.6%	46.7%
					43.4%
40	40.2%										32
										32
35									30
					28	28	28	28	yen/share yen/share
					yen/share
					yen/share	yen/share	yen/share	yen/share
30			35.1%
25					6					17	16
								16
						14	14	14
20
			14
	12	12	12	11
15	yen/share
	yen/share	yen/share	yen/share
10	6	6	6	8
		14	14	14	14	15	16
5					11
	6	6	6	6
0
	FY2012	FY2013	FY2014	FY2015	FY2016	FY2017	FY2018	FY2019	FY2020	FY2021	FY2022
											(forecast)

Interim dividend		Year-end dividend		Commemorative dividend	Payout ratio

4