ASICS : The Fiscal Second Quarter Ended June 30, 2022

Summary of Consolidated Financial Statements

For the Second Quarter Ended June 30, 2022

(Japan GAAP)

August 12, 2022

Name of the Company: ASICS Corporation

Listing Exchanges: Tokyo

Code No.: 7936

URL: https://corp.asics.com/en/

President, CEO and COO, Representative Director: Yasuhito Hirota

Date of filing Securities Report by quarter: August 15, 2022

Date of scheduled payment of dividends: September 8, 2022

Quarterly Results Supplemental Materials: Yes

Quarterly Results Presentation Meeting: Yes (For institutional investors, analysts and press in Japan)

(Amounts less than one million yen are truncated)

1. Consolidated results for the second quarter ended June 30, 2022 (January 1, 2022- June 30, 2022)

1. Consolidated business results (Accumulated)

(The percentages indicate the rates of increase or decrease compared with the corresponding period of the previous fiscal year)

	Net sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
	MY	%	MY	%	MY	%	MY	%
2nd quarter ended June 30, 2022	225,080	7.4	19,166	(20.1)	18,979	(23.4)	13,562	9.8
2nd quarter ended June 30, 2021	209,478	42.6	23,993	-	24,770	-	12,350	-

(Note) Comprehensive income: 2nd quarter ended June 30, 2022: ¥ 42,107	million (81.7 %)
2nd quarter ended June 30, 2021: ¥ 23,177	million (- %)
	Net income	Diluted net
	per share	income per share
	Yen	Yen
2nd quarter ended June 30, 2022	74.08	74.02
2nd quarter ended June 30, 2021	67.50	67.43

Note: ASICS Corporation has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. effective from the beginning of the first quarter of the current consolidated fiscal year.

The figures for the first six month of the fiscal year ending December 31, 2022 are the figures after the application of the accounting standards.

1. Consolidated financial position

	Total assets	Net assets	Shareholders' equity
	ratio
	MY		MY		%
As of June 30, 2022	402,160		186,024		46.1
As of December 31, 2021	345,773		146,537		42.2
(Reference) Shareholders' equity: June 30, 2022: ¥ 185,583 million	December 31, 2021:	¥ 146,080 million

Note: ASICS Corporation has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. effective from the beginning of the first quarter of the current consolidated fiscal year.

The figures for the first six month of the fiscal year ending December 31, 2022 are the figures after the application of the accounting standards.

2. Dividends

				Cash dividend per share
(Record date)		End of 1st		End of 2nd		End of 3rd		End of		Annual
	quarter		quarter		quarter		year
		Yen		Yen		Yen		Yen		Yen
FY ended December		-	12.00		-		12.00	24.00
31, 2021
FY ending December		-	16.00
31, 2022
FY ending December						-		16.00	32.00
31, 2022 (Projected)
(Note) Changes in projected dividends: None

3. Forecast of consolidated business results for the fiscal year ending December 31, 2022 (January 1, 2022- December 31, 2022)

(The full-year percentages indicate the rates of increase or decrease compared with the previous fiscal year)

	Net sales		Operating income	Ordinary income	Profit attributable to	Net income per
		owners of parent	share
	MY	%	MY	%	MY	%	MY	%	Yen
Full-year	460,000	13.8	27,000	23.0	26,000	17.3	18,000	91.4	98.32

(Note) Changes in forecast of consolidated business results: Yes

For details regarding the revision of the consolidated business results forecast, please refer to "Notice Concerning the Revision of the Consolidated Business Results Forecast for the Fiscal Year Ending December 31, 2022" announced on August 12, 2022.

• Notes

1. Changes in significant subsidiaries during the fiscal year (changes in specified subsidiaries that caused changes in the scope of consolidation): None
2. Adopting accounting treatment simplified or specialized for quarterly consolidation: Yes
3. Changes in accounting policy, changes in accounting estimates, and changes in presentation due to revisions

• Changes in accounting policy to conform to revisions in accounting standards and others: Adopted: Yes
• Changes in accounting policy adopted otherwise than in: None
• Changes in accounting estimates: None
• Changes in presentation due to revisions: None

1. Number of shares (of common stock) issued and outstanding

• Number of shares outstanding (including treasury shares) at fiscal end:

June 30, 2022

189,870,559 shares

December 31, 2021

189,870,559 shares

• Number of treasury shares at fiscal end:

June 30, 2022

6,702,388 shares

December 31, 2021

6,829,533 shares

• Average number of shares during the term:

2nd quarter ended June 30, 2022	183,077,178 shares
2nd quarter ended June 30, 2021	182,973,120 shares

• Summary of Consolidated Financial Statements is not subjected to quarterly review by independent auditors
• Explanation of appropriate use of business performance forecasts; other special items

(Notes to the description about future, other)

The performance forecasts above are estimated based on information available as of the date hereof. This may cause actual results to differ from stated projections due to changing business conditions or other factors. Please refer to page 9, "(3) Explanation on forecast for consolidated business results and others" for the forecast of consolidated business results.

(How to access supplemental materials on quarterly business results)

The Company is scheduled to hold presentation meeting on business results for institutional investors, analysts and press on Monday, August 15, 2022. We plan to post the materials used in the meeting on the Company's website (https://corp.asics.com/en/investor_relations/library/financial_summary) on Friday, August 12, 2022.

1. Qualitative information for consolidated business results

(1) Explanation on business results

Forward-looking statements in the text are our estimation as of the end of the second quarter ended June 30, 2022.

Effective from the first quarter ended March 31, 2022, the Company has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and others.

Major initiatives during the second quarter ended June 30, 2022

Although there are concerns about the various effects of the novel coronavirus disease (COVID- 19) this quarter, efforts to normalize socioeconomic activities are underway in many parts of the world. Net sales grew significantly. Despite some impact from lockdown in Shanghai and other areas, the effects of logistics disruptions are improving, and net sales grew by 7.4% from the same period of the previous fiscal year, also coming in ahead of our plan.

Under these circumstances there has been confusion over the situation in Russia and Ukraine. However, the scale of ASICS Russia and Ukraine operations are small and the impact on business performance has been minimal.

◇ Digital

• Worldwide EC sales grew by 18.4% from the previous year.

The number of OneASICS members increased to 6.2 million (5.4 million as of last year-end), partly because runners are now able to enroll in OneASICS through the race registration platform Race Roster and partly because enrollment through the e-commerce site has increased. In addition, the number of races managed globally by ASICS has been increased from 1,324 of FY2021 Q2 to 1,970 of FY 2022 Q2 due to contribution by an Australian race registration company called Register Now, which ASICS acquired last year. In addition, marathons handled by Race Roster, mainly in North America, have been posted on ASICS Runkeeper™ running app, and both are now working together. Through these efforts, we will continue to make steady progress in building the "running ecosystem" promoted by ASICS.

• ASICS has been selected as one of the "Digital Transformation Stocks (DX Stocks) 2022" in a joint program by Japan's Ministry of Economy , Trade and Industry (METI) and the T okyo Stock Exchange, Inc. (TSE) for the firs t time.
  "DX Stocks" is a program that METI and TSE select and introduce up to 1-2 companies per sector among companies listed on the Tokyo Stock Exchange that have established internal mechanisms to promote DX that will lead to increased corporate value and have demonstrated outstanding achievements in the use of digital technology.
  This year's selection as a DX Stock was based on the "Mid-Term Plan 2023", and the Company was recognized for various initiatives, including "accelerating growth of omni-channel business by expanding touch points using digital technology" and "launching a running ecosystem and new touch points / service business".

• Performance Running

• ① Net sales exceeded the plan with double-digitsyear-on-year growth. The impact of logistics disruptions has been improved and net sales increased mainly in Europe, Greater China, and Oceania. The Greater China, where there was a lockdown, posted an increase of approximately 35% in the second quarter over the same period of the previous year.

• The two latest updates to the METASPEED™ series for top athletes, METASPEED™ SKY+ and METASPEED™ EDGE+, were released in June.
  This time, the shape and structure of each part have been adjusted based on athletes' feedback, and functions have been evolved to provide athletes with two additional options.
  Since its launch in March 2021, the METASPEED™ series has so far recorded 389 personal bests for athletes (as of August 9, 2022).

③ On April 24, the official race of World Athletics, "META: Time: Trials" sponsored by ASICS, was held in Málaga, Spain. 73 top athletes of ASICS wore the METASPEED™ + series, resulting in 29 personal bests and 4 national records.

The "META: Time: Trials JAPAN Series" was held in Japan as well. Races were held in six regions throughout Japan (Hokkaido, Kanto, Chubu, Kansai, Chugoku and Fukuoka from June 26 to July 31) and virtually (from May 24 to July 31), and the final will be held in Tokyo on September 24 for the top finishers in these races.

◇ Onitsuka Tiger

① Onitsuka Tiger sales decreased both year-on-year and compared to plan, partly due to the impact of lockdown in Shanghai and other areas. Among them, sales in Southeast and South Asia increased to ¥3.0 billion (more than double from the previous year), while sales in Japan also increased.

② On May 12, a store event was held at the ONITSUKA TIGER RODEO DRIVE STORE in North America to raise brand awareness and value, focusing on the Spring Summer 2022 Collection and store. At the event, we tied up with fashion media "FLAUNT" to hold a brand event based on the concept of the year-long project Year Of Onitsuka Tiger to commemorate the Year of the Tiger, which gained a lot of media exposure.

We will continue to work on measures to increase awareness of Onitsuka Tiger throughout North America as well.

◇ Sustainability

The Group has released the "Sustainability Report 2021". In addition to sustainability activities in FY2021, the report provides information on progress toward achieving medium- and long- term sustainability goals. The report includes the following special features.

・The ratio of female managers increased to 33.7% globally

・Reduced CO2 emissions at our business sites by 28.0% and CO2 emissions in our supply chain by 19.7% (compared to 2015)

・Established a green procurement policy to prioritize procurement of products from sustainable suppliers that meet certain standards regarding environmental performance (e.g., setting a 1.5℃ target and formulating a renewable energy procurement plan, etc.). These will be gradually introduced to strategic suppliers in the future

We will continue to engage in environmentally and socially conscious business activities toward the realization of people's physical and mental health and a healthy global environment, including

our goal of reducing greenhouse	gas emissions to virtually zero by 2050.
◇ ROA Tree Management

ROA is one of the Financial Index of the Mid-term Plan 2023, and despite an increase in the selling, general and administrative expenses ratio, we efficiently generated profits, and ROA improved by 0.1% from 7.2% to 7.3% compared to the same period in the previous year, and also improved by approximately 5% from 2.8% at the end of the previous fiscal year.

The Cash Conversion Cycle (CCC) deteriorated by 9 days, from 165 days to 174 days compared to the same period in the previous year, and by 40 days, from 134 days compared to the end of the previous fiscal year.

ROA calculation as follow (Annualized)

Profit attributable to owners of parent for the second quarter ended June 30, 2022	× 2
(Total assets for the fiscal year ended December 31, 2021 + Total assets for the second quarter ended June 30, 2022) ÷ 2

1) Net sales

Despite production disruptions caused by shutdown at some factories, net sales increased 7.4% to ¥225,080 million from the same period foreign exchange effects and strong sales of the Performance Running category in some regions.

2) Gross profit

Gross profit increased 5.7% to ¥111,486 million due to the impact of the increase in net sales described above.

3) Operating income

Operating income decreased 20.1% to ¥19,166 million mainly due to an increase in commission fee, despite the impact of the increase in net sales described above.

4) Ordinary income

Ordinary income decreased 23.4% to ¥18,979 million mainly due to the impact of the decrease in profit described above.

5) Profit attributable to owners of parent

Profit attributable to owners of parent increased 9.8% to ¥13,562 million due to the decrease of the amount recorded in extraordinary losses caused by the impact of COVID-19.