Arte Salon : (Corrections) Partial Corrections of “Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2021 ”

This translated document is an excerpt from the original Japanese document and is intended for reference purposes only. Should any discrepancies or doubt arise between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

February 14, 2022

To Whom It May Concern

Company name : Arte Salon Holdings, Inc. Representative : Shigeyoshi Yoshimura,

President and Representative Director (Stock Code: 2406)

Contact : Mitsuharu Sakaguchi,

Executive Officer and General Manager of Corporate Planning Department

(Tel: [phone])

(Corrections) Partial Corrections of "Summary of Consolidated Financial Results

for the Fiscal Year Ended December 31, 2021 [Japanese GAAP]"

Arte Salon Holdings, Inc. hereby announces that there have been corrections made partly to the "Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2021 [Japanese GAAP]" that was disclosed on February 7, 2022, as follows.

Notes

1．Reason for corrections

After the announcement of "Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2021 [Japanese GAAP]", it was found that there were some errors in the Non-consolidated Financial Results for the Fiscal Year ended December 31, 2021, and the relevant parts have been corrected.

2．Explanation of corrections The corrections are underlined.

[Reference] Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year ended December 31, 2021 (January 1, 2021 - December 31, 2021)

(1) Non-consolidated operating results [Before correction]

(Percentages indicate year-on-year changes)

	Net Sales		Operating profit	Ordinary Profit	Profit Attributable
		to owners of Parent
Fiscal Year Ended	Million yen		%	Million yen	%	Million yen	%	Million yen		%
December 31, 2021	2,389		(5.9)	101	94.4	143	(18.0)	15		-
December 31, 2020	2,539		1.7	52	(67.6)	175	(24.5)	(70)		-
[After correction]
						(Percentages indicate year-on-year changes)
	Net Sales		Operating profit	Ordinary Profit	Profit Attributable
		to owners of Parent
Fiscal Year Ended	Million yen		%	Million yen	%	Million yen	%	Million yen		%
December 31, 2021	2,542		0.1	101	94.4	143	(18.0)	15		-
December 31, 2020	2,539		1.7	52	(67.6)	175	(24.5)	(70)		-

The End.

This translated document is an excerpt from the original Japanese document and is intended for reference purposes only. Should any discrepancies or doubt arise between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

February 7, 2022

Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2021

		[Japanese GAAP]
Company name:	Arte Salon Holdings, Inc.	Listings: Tokyo Stock Exchange
Stock Code:	2406	URL: https://www.arte-hd.com/
Representative:	Shigeyoshi Yoshimura, President and Representative Director
Contact:	Mitsuharu Sakaguchi, Executive Officer and General Manager of Corporate Planning Department
	Tel: [phone]
Expected date of Annual General Meeting of Shareholders:	March 29, 2022
Expected date of commencing dividend payments:	March 30, 2022
Expected date of filing Annual Securities Report:	March 30, 2022
Availability of supplementary materials for financial results:	Yes
Holding of financial results meetings/ briefing:	Yes (for institutional investors and analysts)

(Amounts under one million yen have been rounded down.)

1. Consolidated financial results for the fiscal year ended December 31, 2021 (January 1, 2021 - December 31, 2021)

(1) Consolidated operating results																(Percentages indicate year-on-year changes)
			Net Sales					Operating profit		Ordinary Profit			Profit Attributable
										to owners of Parent
Fiscal Year Ended		Million yen			%			Million yen		%		Million yen		%			Million yen	%
December 31, 2021			8,639			9.8				570			362.2			636		109.6						274	-
December 31, 2020			7,867			(7.4)				123			(76.0)			303		(42.2)						(196)	-
	Earnings per share		Diluted earnings		Return on equity		Ratio of ordinary				Ratio of operating
				per share				profit to total assets				profit to net sales
Fiscal Year Ended				Yen						Yen				Yen				%					%
December 31, 2021			27.71						-					9.8				7.3					6.6
December 31, 2020			(19.87)						-					(7.0)				3.6					1.6
(2) Consolidated financial position
			Total assets						Net assets				Equity ratio				Net assets per share
As of			Million yen			Million yen						%								Yen
December 31, 2021						9,121						2,926						32.1								295.65
December 31, 2020						8,347						2,673						32.0								270.00
(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
Fiscal Year Ended					Million yen			Million yen			Million yen							Million yen
December 31, 2021						1,377					(661)					(31)								1,879
December 31, 2020						339					(665)					(53)								1,195
2. Cash dividends
					Annual dividends per share				Total	Payout ratio			Ratio of dividends
			1Q-end		2Q-end		3Q-end	Year-end	Total	dividends	(Consolidated)		to net assets
						(Consolidated)
			Yen				Yen			Yen	Yen	Yen		Million yen						%		%
Fiscal Year Ended December. 31, 2020		-			0.00			-	2.00	2.00		19							-		0.7
Fiscal Year Ended December. 31, 2021		-			0.00			-	5.00	5.00		49				18.0		1.8
Fiscal Year Ending December. 31, 2022	-			-			-	-	-											-
(Forecast)

Note: The dividend forecast for the fiscal year ending December 31, 2022 is not provided because the Company's shares are scheduled to be delisted due to the implementation of a tender offer ("Tender Offer") for the Company's issued common shares by Genesis Co., Ltd. ("Offeror") and a series of subsequent procedures, as announced in the press release "Notice of Implementation of MBO and Recommendation of Tender Acceptance" dated February 7, 2022.

3. Consolidated Earnings Forecast for the fiscal year ending December 31, 2022 (January 1, 2022 - December 31, 2022)

The earnings forecast for the fiscal year ending December 31, 2022 is not provided because the Company's shares are scheduled to be delisted due to the implementation of Tender Offer by Offeror and a series of subsequent procedures, as announced in the press release "Notice of Implementation of MBO and Recommendation of Tender Acceptance" dated February 7, 2022.

1

* Notes

1. Changes in significant subsidiaries during the period (changes in scope of consolidation): None
2. Changes in accounting policies and accounting-based estimates, and restatements
3. 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: Yes
   4. Restatements: None
4. Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

As of December 31, 2021

10,300,000 shares

As of December 31, 2020

10,300,000 shares

Number of treasury shares at the end of the period

As of December 31, 2021

399,781 shares

As of December 31, 2020

399,743 shares

Average number of shares outstanding during the period

Fiscal Year Ended

9,900,249 shares

Fiscal Year Ended

9,900,257 shares

December 31, 2021

December 31, 2020

[Reference] Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year ended December 31, 2021 (January 1, 2021 - December 31, 2021)

(1) Non-consolidated operating results

(Percentages indicate year-on-year changes)

Net Sales

Operating profit

Ordinary Profit

Profit Attributable

to owners of Parent

Fiscal Year Ended

Million yen

%

Million yen

%

Million yen

%

Million yen

%

December 31, 2021

2,542

0.1

101

94.4

143

(18.0)

15

-

December 31, 2020

2,539

1.7

52

(67.6)

175

(24.5)

(70)

-

Earnings

Diluted earnings per share

per share

Fiscal Year Ended

Yen

Yen

December 31, 2021

1.55

-

December 31, 2020

(7.17)

-

(2) Non-consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

As of

Million yen

Million yen

%

Yen

December 31, 2021

5,552

1,852

33.4

187.12

December 31, 2020

5,518

1,857

33.6

187.58

2. Non-consolidated Earnings Forecast for the fiscal year ending December 31, 2022 (January 1, 2022 - December 31, 2022)

The earnings forecast for the fiscal year ending December 31, 2022 is not provided because the Company's shares are scheduled to be delisted due to the implementation of Tender Offer by Offeror and a series of subsequent procedures, as announced in the press release "Notice of Implementation of MBO and Recommendation of Tender Acceptance" dated February 7, 2022.

*Cautionary statement with respect to financial forecasts and other special notes

(Cautionary note regarding forward-looking statements)

The earnings forecast for the fiscal year ending December 31, 2022 is not provided because the Company's shares are scheduled to be delisted due to the implementation of Tender Offer by Offeror and a series of subsequent procedures, as announced in the press release "Notice of Implementation of MBO and Recommendation of Tender Acceptance" dated February 7, 2022.

(How to obtain supplementary explanatory materials for financial results and contents of financial results briefing)

From the perspective of preventing the spread of novel coronavirus infection, the Company plans to distribute a video presentation of its financial results for institutional investors and analysts on its website on February 9, 2022, in place of a financial results briefing. The supplementary explanatory materials for the financial results will be disclosed on TDnet and the Company's website on the same day.

2

Overview of business results

During the consolidated fiscal year under review (January 1, 2021 to December 31, 2021), the Japanese economy showed signs of recovery as the severe situation caused by the novel coronavirus infection gradually eased. While the recovery trend is expected to continue, supported by the effects of various policies, attention should be paid to the impact of the infection, including its variant, on the domestic and overseas economies and the effects of fluctuations in financial and capital markets.

Although the beauty salon industry was affected by the repeated issuance and extension of state of emergency declarations, demand for services has been solid, and the chain store sales of the Group have been recovering to the level before the COVID-19 related crisis. However, the outlook for the future infection status, including the spread of the variant, remains uncertain and the situation does not allow for optimism.

Under these circumstances, the Arte Group ("the Group") has been thoroughly implementing anti-infection measures in accordance with the current situation of each store, including workplace vaccination for employees, placing top priority on the safety and health of customers and employees.

Based on a long-term portfolio strategy, we have developed multiple brands to meet the diverse needs of customers in each of our operating companies. With design-oriented salons such as Ash and New York・New York, which provide high-quality services, at the core of our operations, we are also opening maintenance salons under Choki Peta brand, which provide cut and color services at reasonable prices against the backdrop of growing demand for regular hair maintenance.

We conduct our business activities based on thorough hygiene management at each of our operating companies and brands to ensure the safety and security of our stores. At the same time, under the management philosophy of "providing beauty, health, and youthfulness to customers in the community and aiming to build companies that can establish a society of well-being with everyone involved in the Group," we are implementing various measures to strengthen the unity of the Group, improve management efficiency, and build the best stores in the region.

In response to the prolonged impact of the novel coronavirus, we are focusing on measures to increase sales per customer, such as proposing value-added menus and strengthening the sales of salon retail products. At the same time, we are accelerating the digitalization and smartification of all aspects, including store operations, sales promotion, and technical training, to improve productivity and strengthen the earnings base that will support further growth of the Group in anticipation of the eventual digital transformation (DX) of the beauty industry.

For design-oriented salons, we are developing web marketing strategies for each salon by stylists with marketing skills, working to strengthen the counseling and proposal skills of our staff with the aim of retaining customers, and enhancing the latest hair care products and menus targeting customers with high sense of beauty, to provide high-value- added services.

Furthermore, we are also developing various private brands, including "ennic" series, a new line of original hair and skin care products containing people- and environment-friendly natural ingredients, to raise brand awareness.

As for Choki Peta, maintenance salons, we are mainly opening stores in commercial facilities to offer quick haircut and color services at reasonable prices during shopping, enhancing convenience and providing services tailored to customers' lifestyles.

As a result of the above, the chain store sales of the Company's major subsidiaries for the fiscal year under review were as follows: Ash Co., Ltd. ("Ash"), 111.3% of the same period in the previous year; New York・New York Co., Ltd.( "NYNY"), 108.5%; Style Designer Inc. ("SD"), 104.6％; and C&P Co., Ltd. ("C&P"), 121.6%. The number of customers of the Company's major subsidiaries was 107.8% of the same period in the previous year. Accordingly, net sales at all chain stores of the Group totaled 18,611 million yen (110.3%).

During the fiscal year under review, the number of stores operated by the Group's consolidated subsidiaries totaled 336 (Ash, 130 stores; NYNY, 42 stores; SD, 99 stores; C&P, 56 stores; and Diamond Eyes Co., Ltd., 9 stores). Including one overseas store (Republic of Singapore), the number of stores in the Group reached 337. The number of Choki Peta stores in the Kansai region operated by NYNY was 10, and the total number of franchise stores in the Group totaled 229 ( Ash, 106 stores; NYNY, 22 stores; SD, 99 stores; and C&P, 2 stores).

As a result, consolidated earnings for the fiscal year under review were as follows: Net sales amounted to 8,639 million yen (109.8% of the same period in the previous year), operating profit was 570 million yen (462.2 % of the same period in the previous year), ordinary profit was 636 million yen (209.6 % of the same period in the previous year), and profit attributable to owners of parent came to 274 million yen (compared with a loss attributable to owners of parent of 196 million yen for the same period in the previous year).

The description by segment is omitted because the Company Group engages in a single segment of beauty salon chain business.

3

Outlook

The earnings forecast for the fiscal year ending December 31, 2022 is not provided because the Company's shares are scheduled to be delisted due to the implementation of Tender Offer by Offeror and a series of subsequent procedures, as announced in the press release "Notice of Implementation of MBO and Recommendation of Tender Acceptance" dated February 7, 2022.

4