ASICS : The Fiscal Year Ended December 31, 2021

Summary of Consolidated Financial Statements

For the Fiscal Year Ended December 31, 2021

(Japan GAAP)

February 10, 2022

Name of the Company: ASICS Corporation

Listing Exchanges: Tokyo

Code No.: 7936

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

President and COO, Representative Director: Yasuhito Hirota

Date of the ordinary general shareholders' meeting: March 25, 2022

Date of scheduled payment of dividends: March 28, 2022

Date of filing Securities Report: March 28, 2022

Financial Results Supplemental Materials: Yes

Financial Results Presentation Meeting: Yes (For institutional investors and analysts in Japan)

(Amounts less than one million yen are truncated)

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

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	%
FY ended December 31, 2021		404,082	22.9	21,945		-	22,166	-			9,402	-
FY ended December 31, 2020		328,784	(13.0)	(3,953)		-	(6,923)	-		(16,126)	-
(Note) Comprehensive income: FY ended December 31, 2021: ¥ 26,033 million (-)
FY ended December 31, 2020: ¥ (22,648) million (-)
			Net income		Diluted net		Ratio of net income	Ratio of ordinary		Ratio of operating
					to shareholders'		income to total		income to net
			per share		income per share
					equity		assets			sales
			Yen			Yen			%				%			%
FY ended December 31, 2021		51.38			51.33			6.9		6.5			5.4
FY ended December 31, 2020		(88.17)			-			(11.6)		(2.1)			(1.2)
(Reference) Equity in earnings of affiliates: FY ended December 31, 2021:	－ million
			FY ended December 31, 2020:	－ million

(Note) Diluted net income per share has not been disclosed for the fiscal year ended December 31, 2020 because of diluted net loss per share for this fiscal year.

1. Consolidated financial position

			Total assets		Net assets	Shareholders' equity		Net assets per share
				ratio
			MY		MY	%	Yen
	As of December 31, 2021		345,773		146,537	42.2	798.08
	As of December 31, 2020		333,180		126,763	37.9	689.57
	(Reference) Shareholders' equity: December 31, 2021:	¥ 146,080 million	December 31, 2020:	¥ 126,221 million
	(3) Consolidated cash flows
			Cash flows from	Cash flows from	Cash flows from		Cash and cash
			operating activities	investing activities	financing activities	equivalents at end of year
			MY	MY	MY		MY
	FY ended December 31, 2021	49,146	(10,167)	(25,968)		95,275
	FY ended December 31, 2020	19,330	(9,634)	31,336		80,474

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2.	Dividends
			Cash dividend per share				Total	Dividend		Ratio of
						dividend		dividends to
									payout ratio
		End of 1st	End of 2nd	End of 3rd		End of			amount		net assets
	(Record date)		Annual		(Consolidated)
	quarter	quarter	quarter		year		(Annual)		(Consolidated)
		Yen	Yen	Yen		Yen	Yen		MY	%	%
FY ended December	-	0.00	-		24.00	24.00	4,393	-	3.2
31, 2020
FY ended December	-	12.00	-		12.00	24.00	4,392	46.7	3.2
31, 2021
FY ending December	-	16.00	-		16.00	32.00			43.4
31, 2022 (Projected)

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	420,000	3.9	23,000	4.8	22,500	1.5	13,500	43.6	73.77

• Notes

1. Changes in significant subsidiaries during the fiscal year (changes in specified subsidiaries that caused changes in the scope of consolidation): None
2. 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: None

• 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:

December 31, 2021

189,870,559 shares

December 31, 2020

189,870,559 shares

• Number of treasury shares at fiscal end:

December 31, 2021

6,829,533 shares

December 31, 2020

6,827,657 shares

• Average number of shares during the term:

FY ended December 31, 2021	183,004,752 shares
FY ended December 31, 2020	182,888,311 shares

• This financial results report is not subject to auditing procedures 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 8, "(4) Forecast for the fiscal year ending December 31, 2022" for the forecast of consolidated business results.

(How to access supplemental materials on the fiscal year ended business results)

The Company is scheduled to hold conference call on business results for institutional investors on Monday, February 14, 2022. We plan to post the supplemental materials use in the meeting on the Company's website (https://corp.asics.com/en/investor_relations/library/financial_summary) on Thursday, February 10, 2022.

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1. The overview of Business Results

1. The overview of business results for the fiscal year ended December 31, 2021 (January 1, 2021-December 31, 2021)

Major initiatives during the fiscal year ended December 31, 2021

Due to the novel coronavirus disease (COVID-19), ASICS Group ("the Group") continued to face challenging situations, such as cancellation or scale-down of various competitions and temporary closures of some own retail stores. With the expansion of COVID-19, production at our plant in southern Vietnam was temporarily halted, but the Group have worked to minimize the impact on sales in 2021 by securing supply systems in each region and effectively utilizing inventory on hand. There was also an increase in ocean freight costs due to the global shortage of containers.

Net sales and operating income increased significantly from the previous fiscal year, mainly due to the strong performance of Performance Running in all regions. Net sales exceeded 400.0 billion yen in sales for the first time in four years.

• Digital

Worldwide EC sales grew by 23% from the previous year. As a result, the EC sales ratio was 16%. In terms of digital, the Group took the following actions this fiscal year.

(1) Providing running programs

In April, the Group launched the ASICS Premium Running Program in Japan, a new service that offers a variety of running experiences to improve the performance of ordinary runners. In November, the Group launched the ASICS Running Program, which offers a total of three courses (Entry Course, Step Up Course and Speed Course) for runners from those who want to make running a habit to those who want to break their own records.

(2) ASICS World Ekiden 2021 (ASICS World Ekiden 2021)

In November, the Group held a virtual Ekiden race, "ASICS World Ekiden 2021".

This was a new type of running event that connects all team members in online using a "digital tasuki", the narrow band of fabric used in traditional Japanese Ekidens, and many people took part in the event as last year. This event provides an opportunity to enjoy running with people from all over the world.

(3) Conducting NFT auctions

The Group ASICS sold its first footwear, the ASICS SUNRISE RED™ NFT COLLECTION, through digital auctions starting in July 2021.

The "SUNRISE RED™ NFT COLLECTION " is ASICS' first NFT for shoes. All ASICS SUNRISE RED™ NFT COLLECTION owners will receive digital 3D models and textures of their NFT shoes to use in animation projects and other applications, including the Metaverse. The Group is strengthening the digital marketing field, and will actively propose new ways to enjoy sports and lifestyles using digital technology.

*NFT: Non-Fungible Token: A non-falsifiable certificate of authenticity or ownership.

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• Performance Running

Net sales in Performance Running grew by over 30% with significant increases in sales in all regions.

The Group launched METASPEED Sky and METASPEED Edge, new racing shoes that each scientifically designed with a distinct type of stride and cadence(*) running styles for elite athletes in March and June, respectively. Many athletes recorded over 194 personal bests wearing these shoes in Japan and overseas as of the end of December.

*Long distance running styles are split into the two type. Runners take a longer stride once they start increasing their speed, called stride-type, and runners increase both cadence and stride as they run faster, called cadence-type. Furthermore, through research, the Group recognized that increasing running speed comes down to the equation of "stride length × cadence," and that it is important to lengthen stride for stride-type runners and to both lengthen stride and increase cadence for cadence-type runners.

• Onitsuka Tiger

Net sales in Onitsuka Tiger increased by 14%.

The Group participated in Milano Fashion Week for the first time in February, and unveil our Spring/Summer 2022 collection in September. The Group gradually expand the scope of our brand activities in Europe, mainly at London and Milan. In addition, the Group opened the first THE ONITSUKA store in China in the Wangfujing area of Beijing in January, our first flagship store on the West Coast of the United States in Beverly Hills, California, in March, and our largest flagship store at Regent Street in London, one of the world's famous shopping street, in May, and the Group opened our flagship store in Kuala Lumpur, Malaysia in November.

• Status in Key Regions

Net sales and operating income increased in key regions due to the result of strong Performance Running sales in each region. Net sales increased by 16% in Japan, 32% in North America, 22% in Europe and 28% in Greater China compared to the last year.

• Sustainability

The Group has been identified as a global leader for engaging with its suppliers on climate change, being awarded a position on the Supplier Engagement Leaderboard three years in a row, by global environmental impact non-profit CDP.

Also, the Group has been selected for the seventh time as a component company of the Dow Jones Sustainability Asia/Pacific Index. The Dow Jones Sustainability Indices (DJSI) are a series of globally-recognized Socially Responsible Investment (SRI) indices.

In December, ASICS issued a Sustainability-Linked Bond, which is the first scheme in Japan (according to our research) to purchase emission credits based on the achievement of sustainability performance targets.

The Group will continue to promote sustainability-conscious initiatives in all aspects of our business, and strive to make further contributions toward the realization of a sustainable society.

• ROA Tree Management

The Group have implemented measures to maximize ROA, one of the target indicators of the Mid-term plan 2023, and ROA increased by about 8% from -5.0% to 2.8%.

First, the Group held study sessions to put the ideas into practice so that measures to improve ROA spread throughout the Company.

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The Group strengthened Selling, General and Administrative expenses control by cost owners in order to enhance profits. Selling, General and Administrative expenses ratio declined by approximately 4% (48% to 44%) year on year.

From the perspective of capital efficiency, the cash conversion cycle reduced by 38 days (172 days to 134 days) year on year as a result of continuous control and reduce on inventories.

1) Net sales

Despite the effects of COVID-19, net sales increased 22.9% to ¥404,082 million due to strong sales in all regions, mainly driven by the Performance Running category and the Core Performance Sports category.

2) Gross profit

Gross profit increased 30.8% to ¥199,878 million due to the impact of the increase in net sales described above.

3) Operating income

Operating income was ¥21,945 million due to an improvement in the gross profit ratio, as well as due to the increase in net sales described above.

4) Ordinary income

Ordinary income was ¥22,166 million due to the above.

5) Profit attributable to owners of parent

Profit attributable to owners of parent was ¥9,402 million due to the impact of the increase in net sales and profit described above.

Business results by category were as follows.

The net sales results for the fiscal year ended December 31, 2020 have been reclassified to reflect changes of the aggregation method for some categories that were made in the first quarter ended March 31, 2021.

For the results for the fiscal year ended December 31, 2021, for the further deepening of category management, we have defined expenses managed by categories and newly calculated "category profit" together with the actual results for the fiscal year ended December 31, 2020.

(Millions of yen)

		Net sales			Category profit
Category	FY2021	FY2020	Increase	FY2021	FY2020	Increase
	Jan 1 to Dec 31	Jan 1 to Dec 31	(Decrease)	Jan 1 to Dec 31	Jan 1 to Dec 31	(Decrease)
Performance Running	208,268	159,033	49,235	42,634	24,903	17,731
Core Performance Sports	41,332	33,540	7,792	5,004	1,388	3,615
Sports Style	33,252	29,570	3,682	4,310	2,051	2,258
Apparel and Equipment	34,115	29,790	4,324	(175)	(5,381)	5,206
Onitsuka Tiger	38,545	33,935	4,610	4,868	3,616	1,251

1) Performance Running

Net sales increased 31.0% to ¥208,268 million due to strong sales in all regions. Category profit increased 71.2% to ¥42,634 million due to an improvement of the gross profit ratio, as well as due to the increase in net sales described above.

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