ASKUL : Summary of Consolidated Financial Results for the Year Ended May 20, 2021

Disclaimer

This is an English translation of the captioned release excerpt. This translation is prepared and provided for the purpose of the reader's convenience. All readers are recommended to refer to the original version in Japanese of the release for complete information.

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Summary of Consolidated Financial Results

for the Year Ended May 20, 2021

[Japanese GAAP]

July 2, 2021

Company name:ASKUL Corporation

Stock exchange listing: Tokyo

Code number: 2678

URL: https://www.askul.co.jp/kaisya/ir/

Representative: Akira Yoshioka

President and chief executive officer

Contact: Tsuguhiro Tamai

Director and chief financial officer

Phone: [phone]

Scheduled date of Annual General Meeting of Shareholders: August 4, 2021

Scheduled date of commencing dividend payments: August 5, 2021

Scheduled date of filing annual securities report: July 30, 2021

Availability of supplementary briefing material on annual financial results: Yes

Schedule of annual financial results briefing session: Yes (for institutional investors and analysts)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended May 20, 2021 (May 21, 2020 to May 20, 2021)

(1) Consolidated Operating Results

(% indicates changes from the previous corresponding period.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Fiscal year ended

Million yen

%

Million yen

%

Million yen

%

Million yen

%

May 20, 2021

422,151

5.4

13,923

57.8

13,850

60.0

7,758

37.2

May 20, 2020

400,376

3.3

8,821

95.1

8,656

95.9

5,652

-

(Note) Comprehensive income:	Fiscal year ended May 20, 2021:	¥7,740 million	[35.3%]
		Fiscal year ended May 20, 2020:	¥5,720 million	[-%]
	Basic earnings	Diluted earnings		Rate of return on	Ordinary profit to	Operating profit to
		per share	per share		equity	total assets ratio	net sales ratio
Fiscal year ended		Yen	Yen		%	%	%
May 20, 2021		75.83	75.68		14.0	7.6	3.3
May 20, 2020		55.39	55.14		11.2	5.0	2.2

(Reference) Equity in earnings (losses) of affiliated companies: Fiscal year ended May 20, 2021: ¥- million Fiscal year ended May 20, 2020: ¥- million

(Note) ASKUL Corporation conducted a 2-for-1 stock split of common stock on May 21, 2021. "Basic earnings per share" and "Diluted earnings per share" are calculated on the assumption that the said stock split was implemented at the beginning of the preceding fiscal year.

(2) Consolidated Financial Position

	Total assets	Net assets	Capital adequacy ratio	Net assets per share
As of		Million yen	Million yen	%	Yen
May 20, 2021		190,107	59,203	30.9	573.57
May 20, 2020		174,146	52,825	30.1	513.69
(Reference) Equity: As of May 20, 2021:	¥58,777 million
As of May 20, 2020:	¥52,434 million

(Notes) 1 A provisional accounting treatment regarding the business combination was finalized in the fiscal year ended May 2021, and the figures as of May 20, 2020 have been based on the finalized provisional accounting treatment.

1. 2 ASKUL Corporation conducted a 2-for-1 stock split of common stock on May 21, 2021. "Net assets per share" is calculated on the assumption that the said stock split was implemented at the beginning of the preceding fiscal year.

2. Consolidated Cash Flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash
	equivalents at the end
	operating activities	investing activities	financing activities
	of period
Fiscal year ended	Million yen	Million yen	Million yen	Million yen
May 20, 2021	15,998	(9,079)	(3,919)	66,259
May 20, 2020	16,609	(6,055)	(4,761)	63,260

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Disclaimer

This is an English translation of the captioned release excerpt. This translation is prepared and provided for the purpose of the reader's convenience. All readers are recommended to refer to the original version in Japanese of the release for complete information.

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2. Dividends

			Annual dividends				Payout	Dividends
					Total	to net
							ratio
	1st		2nd	3rd	Year-end	Total	dividends	assets
		(consolidated)
	quarter-end	quarter-end	quarter-end		(consolidated)
Fiscal year ended		Yen	Yen	Yen	Yen	Yen	Million yen	%	%
May 20, 2020		-	19.00	-	19.00	38.00	1,939	34.3	3.8
May 20, 2021		-	19.00	-	30.00	49.00	2,508	32.3	4.5
Fiscal year ending
May 20, 2022		-	15.00	-	15.00	30.00		34.2
(Forecast)

(Notes) 1 ASKUL Corporation conducted a 2-for-1 stock split of common stock on May 21, 2021. The actual amounts of dividends before the said stock split are described for the fiscal year ended May 2020 and the fiscal year ended May 2021.

2 The year-end dividend forecast for the fiscal year ended May 2021, announced on March 16, 2021, has been revised. For details, please see "Notice on Dividends from Surplus," announced today.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending May 20, 2022 (May 21, 2021 to May 20, 2022)

(% indicates changes from the previous corresponding period.)

								Profit attributable	Basic earnings
	Net sales		Operating profit	Ordinary profit	to owners of
		per share
								parent
	Million yen		%	Million yen	%	Million yen	%	Million yen		%	Yen
Full year	430,000		1.9	14,000	0.5	13,900	0.4	9,000		16.0	87.82

(Note) ASKUL Corporation conducted a 2-for-1 stock split of common stock on May 21, 2021. "Basic earnings per share" in the consolidated financial results forecast for the fiscal year ending May 2022 is calculated in consideration of the effect caused after the said stock split.

* Notes:
(1) Changes in significant subsidiaries during the period under review
(changes in specified subsidiaries resulting in changes in scope of consolidation):	No

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: Yes
   4. Retrospective restatement: No
3. Total number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares):

May 20, 2021:	102,518,800	shares
May 20, 2020:	110,518,800	shares

2) Total number of treasury shares at the end of the period:

May 20, 2021:	41,874	shares
May 20, 2020:	8,443,244	shares

3) Average number of shares during the period:
Fiscal Year ended May 20, 2021:	102,303,044	shares
Fiscal Year ended May 20, 2020:	102,058,890	shares

(Note) ASKUL Corporation conducted a 2-for-1 stock split of common stock on May 21, 2021. "Total number of issued shares at the end of the period," "Total number of treasury shares at the end of the period," and "Average number of shares during the period" are calculated on the assumption that the said stock split was implemented at the beginning of the preceding fiscal year.

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Disclaimer

This is an English translation of the captioned release excerpt. This translation is prepared and provided for the purpose of the reader's convenience. All readers are recommended to refer to the original version in Japanese of the release for complete information.

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(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended May 20, 2021 (May 21, 2020 to May 20, 2021)
(1) Non-consolidated Operating Results				(% indicates changes from the previous corresponding period.)
		Net sales		Operating profit		Ordinary profit	Net income
Fiscal year ended		Million yen		%		Million yen		%		Million yen	%	Million yen	%
May 20, 2021		368,188		5.5		12,108		68.6	12,299	64.4	8,125	65.2
May 20, 2020		349,105		2.5		7,181		70.9	7,480	59.3	4,919	901.8
		Basic earnings	Diluted earnings
		per share	per share
Fiscal year ended				Yen			Yen
May 20, 2021			79.43			79.31
May 20, 2020			48.20			48.18
(2) Non-consolidated Financial Position
		Total assets		Net assets	Capital adequacy ratio	Net assets per share
As of			Million yen			Million yen			%		Yen
May 20, 2021			173,554			58,855			33.9		574.30
May 20, 2020			158,479			52,101			32.9		510.28
(Reference) Equity: As of May 20, 2021:		¥58,852 million
	As of May 20, 2020:		¥52,086 million

(Note) ASKUL Corporation conducted a 2-for-1 stock split of common stock on May 21, 2021. "Net assets per share" is calculated on the assumption that the said stock split was implemented at the beginning of the preceding fiscal year.

• This Summary of Consolidated Financial Results is not subject to audit.
• Notes for using forecasted information and others

Earnings forecasts and other forward-looking statements contained in this document are based on the information ASKUL has obtained to date and on certain assumptions it considers reasonable. As such, these forecasts and statements are not intended as a commitment by the Company to achieve them. Note also that actual results and other future events may differ materially from these forecasts and statements due to a variety of factors.

For the assumptions on which earnings forecasts are based and notes and information on the use of earnings forecasts, see "1. Overview of Business Results, etc. (4) Future Outlook" on Page 8 of Attached Materials.

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Disclaimer

This is an English translation of the captioned release excerpt. This translation is prepared and provided for the purpose of the reader's convenience. All readers are recommended to refer to the original version in Japanese of the release for complete information.

○ Table of Contents for Attached Materials

1.	Overview of Business Results, etc. ...................................................................................................................................	5
	(1)	Overview of Business Results for the Fiscal Year Under Review .................................................................................	5
	(2)	Overview of Financial Condition for the Fiscal Year Under Review ..............................................................................	7
	(3)	Overview of Cash Flows for the Fiscal Year Under Review..........................................................................................	7
	(4)	Future Outlook..............................................................................................................................................................	8
2.	Basic Thinking on the Selection of Accounting Standards...............................................................................................	10
3.	Consolidated Financial Statements ..................................................................................................................................	11
	(1)	Consolidated Balance Sheets .....................................................................................................................................	11
	(2)	Consolidated Statements of Income and Comprehensive Income .............................................................................	13
	(3)	Consolidated Statements of Changes in Net Assets ..................................................................................................	15
	(4)	Consolidated Statements of Cash Flows..................................................................................................................	177
	(5)	Notes to Consolidated Financial Statements..............................................................................................................	19

(Notes to Going Concern Assumptions) .......................................................................................................................	19
(Changes in Accounting Estimates) .............................................................................................................................	19
(Segment Information, etc.)..........................................................................................................................................	20
(Per Share Information)................................................................................................................................................	23
(Significant Subsequent Events) ..................................................................................................................................	24
4. Other .............................................................................................................................................................................	255
Details of Selling, General and Administrative Expenses (Consolidated) ......................................................................	255

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Disclaimer

This is an English translation of the captioned release excerpt. This translation is prepared and provided for the purpose of the reader's convenience. All readers are recommended to refer to the original version in Japanese of the release for complete information.

1. Overview of Business Results, etc.

(1) Overview of Business Results for the Fiscal Year Under Review

During the fiscal year under review (from May 21, 2020 to May 20, 2021), Japan's economy saw consumer spending and corporate activity stagnate as the COVID-19 spread. Globally, there are favorable signs thanks to progress in vaccinations. However, as Japan has gone through repeated declarations of a state of emergency, the economic outlook remains uncertain.

With the spread of the COVID-19 causing a decrease in demand in a great number of industries, the e-commerce market, in which the Group operates, is expected to play the role of a shopping activity that reduces contact among people in a new lifestyle, putting demand there on an upward trend. On the other hand, as delivery charges remain high primarily due to a shortage of delivery drivers, and competition in the industry for better service quality is underway, the business environment continues to allow for little optimism.

Under such circumstances, the B-to-B business in the mainstay e-commerce business, taking the expansion of the e-commerce market as an opportunity, is pushing forward with further business growth under the mission of "Provide Reliable Services to All Workplaces as a Lifeline for People Working There." The B-to-C business is tackling structural reform to ensure that LOHACO realizes positive operating profit in the fiscal year ending May 2023.

During the fiscal year under review, the growth rate of net sales of the B-to-B business, which had fallen after the declaration of the state of emergency of April 2020, remained firm after the declaration of a state of emergency was lifted in May 2020. Due to continued special demand for hand sanitizers, face masks and other infection-prevention products against the COVID-19, both net sales and profits of the B-to-B business rose drastically, and simultaneously, the B-to-C business LOHACO improved its profitability as planned.

As a consequence, net sales in the fiscal year under review were 422,151 million yen, a 5.4% increase year on year. Operating profit was 13,923 million yen, a 57.8% increase year on year, and ordinary profit was 13,850 million yen, a 60.0% increase year on year. As extraordinary losses, loss on retirement of non-current assets of 845 million yen accompanying the website renewal of the "LOHACO Main Store" and others; provision of allowance for doubtful accounts of 700 million yen to ecohai Co., Ltd., which was excluded from consolidation; and loss on disaster due to the damage caused by the earthquake that occurred off the coast of Fukushima Prefecture on February 13, 2021, and subsequent earthquakes of 688 million yen, and others were recorded. As a result, profit attributable to owners of parent came to 7,758 million yen, a 37.2% increase year on year. Each of the profit totals broke the past record by a wide margin with operating profit and net profit marking record highs for the first time in 13 and 8 fiscal years respectively.

Operating results by segment are outlined below. <> business>

In the B-to-B business, the mainstay business of the Group, net sales declined due to the effect of voluntary restraint on business activities by customers following the declaration of a state of emergency in April 2020. However, after the declaration of a state of emergency was lifted in May 2020, the net sales growth rate remained steady. This was mainly due to an increase in demand for infection-prevention products, such as disposable gloves and partitions in addition to hand sanitizers and face masks, which became necessary mainly for customers who were small and medium-sized corporations to resume and continue business activities during the pandemic. Demand for office supplies from customers who are mid-level and large corporations is also on a recovery path. Additionally, sales of MRO supplies (Note 1), such as packaging materials, and long tail products also increased due to growing demand in e-commerce. The number of long tail products topped 8.9 million items as a result of the Group's focus on strengthening its product lineup. Consequently, the B-to-B business posted a sales increase in the fiscal year under review.

In addition to the effect of SEO (Note 2), which the Group has kept strengthening, the Group saw orders increase from new customers, such as medical institutions and nursing care facilities, with which transactions started as a result of the Group's ongoing priority deliveries of hand sanitizers to them at the request of the Ministry of Economy, Trade and Industry and the Ministry of Health, Labour and Welfare. Because the Group strove to broaden product lineups and enhance delivery quality to ensure all customers continued to use its services, the operational rate also rose at both existing and new customers.

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