Autobacs Seven : 第1四半期 決算短信〔日本基準〕（連結）

July 30, 2021

Consolidated Financial Results for the Three Months Ended June 30, 2021【Japanese GAAP】

Summary of Quick Financial Announcement of Consolidated Financial Information for the Three Months Ended June 30, 2021.

Company name: AUTOBACS SEVEN CO., LTD.

Code number: 9832

(URL https://www.autobacs.co.jp/) Headquarters: Tokyo, Japan

Company Representative: Kiomi Kobayashi, Representative Director

Contact for further information: Hiroyuki Takano, General Manager, Finance & Accounting Department

Telephone: [phone]

Stock exchange listing: Tokyo

Submission of Quarterly Business Report: August 6, 2021

Start of cash dividend payments: -

Supplementary quarterly materials prepared: Yes

Quarterly results information meeting held: None

1. Results for the three months ended June 30, 2021 (From April 1, 2021 to June 30, 2021)

(Note: Amounts less than 1 million Yen have been rounded down. A figure in ( ) indicates a loss or a negative figure.)

(1) Results of operations:

(Unit: Millions of Yen except for per share information, and % information which indicates increase or decrease( ).)

	Net sales		Operating income	Ordinary income
Three months ended		％		％		％
June 30, 2021	52,283	-	1,517	-	1,708	-
Three months ended
June 30, 2020	45,026	(10.9)	460	(62.1)	760	(44.0)
Note: Comprehensive income:	1,433 million yen for the Three months ended June 30, 2021: -%
	712 million yen for the Three months ended June 30, 2020: (11.6)%
	Profit attributable to	Basic net income	Basic net income per
	owners of parent	per share (Yen)	share - diluted (Yen)
Three months ended		％
June 30, 2021	1,078	-	13.50		-
Three months ended
June 30, 2020	372	(54.6)	4.66		-

Note: The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. were applied from the beginning of the first three month of the consolidated fiscal year under review. Accordingly, the figures for the three months ended June 30, 2021 reflect said accounting standard, etc., and increase or decrease rates from the same quarter of the previous year are not indicated.

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1. Financial position:
   (Unit: Millions of Yen except for per share information)

				Net assets per
	Total assets	Total net assets	Equity ratio	share (Yen)
Three months ended				％
June 30, 2021	179,797	122,281	67.6	1,524.29

Fiscal year ended

March 31, 2021187,914123,83365.61,542.40

(Reference) Equity: Three months ended June 30, 2021: 121,620 million Yen Fiscal year ended March 31, 2021: 123,180 million Yen

Note: The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. were applied from the beginning of the first three month of the consolidated fiscal year under review. Accordingly, the figures for the three months ended June 30, 2021 reflect said accounting standard, etc.

2. Dividends

		Dividends per share			(Yen)
	Three months	Second Quarter	Third Quarter	Year -end	Annual
Fiscal year ended
March 31, 2021	-	30.00	-	30.00	60.00
Fiscal year ended
March 31, 2022	-	-	-	-	-
Fiscal year ended
March 31, 2022
(forecast)	-	30.00	-	30.00	60.00

Note: Revisions to dividend forecasts published most recently: None

3. Forecast for the fiscal year ending March 2022 (from April 1, 2021 to March 31, 2022)

(Unit: Millions of Yen, percentage figures denote year-on-year change)

	Net sales		Operating income		Ordinary income
		％		％		％
Annual	226,500	-	9,500	-	10,000	-
	Profit attributable to		Basic net income
	owners of parent		per share (Yen)
		％
Annual	6,700	-	83.97
Note: Revisions to financial forecasts published most recently: None

Note: The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. were applied from the beginning of the current consolidated fiscal year under review. Accordingly, the figures for the forecast of the fiscal year ending March 2022 reflect said accounting standard, etc., and increase or decrease rates from the same period of the previous year are not indicated.

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4. Other

1. Significant changes in scope of consolidation: None
2. Adoption of special accounting policies for quarterly financial statements: None
3. Changes in accounting policies, accounting estimation change and restatement

1.	Changes due to changes in accounting standard	: Yes
2.	Changes due to changes in accounting standard except (3)-1.	: None
3.	Changes due to accounting estimation change	: None
4.	Restatement	: None

Note: For further details, please refer to "7. Notes on the quarterly consolidated financial statements", "Changes in Accounting Policies".

1. Shares outstanding (common stock)
2. 1. Number of shares outstanding (including treasury stock)
      Three months ended June 30, 2021: 82,050,105 shares
      Fiscal year ended March 31, 2021: 84,050,105 shares
   2. Number of treasury stock at the end of period

Three months ended June 30, 2021: 2,261,532 shares

Fiscal year ended March 31, 2021: 4,187,061 shares

3. Average shares outstanding over quarter

Three months ended June 30, 2021: 79,856,786 shares

Three months ended June 30, 2020: 79,850,916 shares

※These financial results are not subject to quarterly review procedures by certified public accountants or auditing firms.

※Statement regarding the proper use of financial forecasts and other special remarks (Statement regarding the proper use of financial forecasts)

These forecast performance figures are based on the information currently available to the Company's management and certain assumptions judged rational. Accordingly, these might be cases in which actual results materially differ from forecasts of this report.

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5. Qualitative Information Concerning the Three Months Ended June 30, 2021

Explanation of business results

During the first three months of the consolidated fiscal year under review, consumer spending has remained persistently weak in the Japanese economy due to the COVID-19 pandemic. Although vaccination has begun and other measures are being taken, states of emergency have been intermittently declared in some areas, the situation is still uncertain and there is no end in sight.

Looking at trends in domestic automobile-related industries, new car sales showed signs of recovery compared to the same period of the previous year when the sales were affected by the COVID-19 pandemic. However, the outlook remains uncertain due to the global shortage of semiconductors, which has forced the production of some new cars to be reduced. Although automotive goods were trending toward recovery when compared with the same period of the previous year, some car electronics goods were affected by the semiconductor shortage.

To prevent the spread of COVID-19, the Group continues to ensure that the health and safety of its customers in local communities who visit our stores, business partners and employees is its top priority. With this in mind, it seeks to establish an environment enabling everyone to visit stores and engage in services without worry.

In these circumstances, based on the Five Year Rolling Plan illuminating the direction to be pursued, the Group enacted a range of measures to establish and link six networks for offering services suited to scenarios in which customers use cars, with an eye on continuing to grow its business by responding to changing demand and continuing to contribute to local customers and communities.

As a result, the Group's sales during the first three months of the consolidated fiscal year under review were 52,283 million yen (compared to 45,026 million yen in the same period of the previous year), gross profit was 17,664 million yen (compared to 15,068 million yen in the same period of the previous year), and selling, general, and administrative expenses were 16,147 million yen (compared to 14,608 million yen in the same period of the previous year), resulting in operating income of 1,517 million yen (compared to 460 million yen in the same period of the previous year). Ordinary income was 1,708 million yen (compared to 760 million yen in the same period of the previous year). Consequently, profit attributable to owners of parent stood at 1,078 million yen (compared to 372 million yen in the same period of the previous year).

As the Group has adopted the Accounting Standard for Revenue Recognition, etc. from the beginning of the first three months of the consolidated fiscal year under review, the rates of increase or decrease from the same quarter of the previous year are not stated. However, simple comparisons of the actual results for the current period with those of the previous period are as follows: the Group's net sales increased by 16.1% year on year, gross profit increased by 17.2% year on year, selling, general and administrative expenses increased by 10.5% year on year, operating income increased by 229.7% year on year, ordinary income increased by 124.8% year on year, and net income attributable to shareholders of the parent company increased by 189.6% year on year. Operating income increased by 229.7%, ordinary income increased by 124.8%, and profit attributable to owners of parent increased by 189.6% year on year.

Results by business segment are as follows.

[Domestic AUTOBACS Business]

For the first three months of the consolidated fiscal year under review, total sales of the domestic businesses of the entire AUTOBACS chain (including franchise outlets) increased 9.4% year on year on both a same-store basis and an overall basis.

In light of the importance of cars in people's lives from the perspective of infrastructure even amid a state of emergency, the AUTOBACS chain continued sales operations while simultaneously paying maximum attention to the prevention of infection through the minimization of physical contact between customers and employees, among other means, to aid customers in leading secure and safe lives with their cars. AUTOBACS will continue to make efforts to prevent the spread of infection.

In the same period of the previous year, sales decreased significantly due to the impact of stay-at-home requests following the declaration of a state of emergency. In the first three months of the consolidated fiscal year under review, however, both the number of customers and sales increased over the same period of the previous year thanks to increased car use.

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Sales of tires increased, albeit in a market environment made severe by the ongoing trend of refraining from long drives because of self-restraint regarding travel. Sales of car electronics also increased due to strategic product procurement and management, despite the impact of the global shortage of semiconductors on the supply of some goods.

Regarding its private brands, the Company expanded the merchandise lines of AQ. (Autobacs Quality) and GORDON MILLER, improving the appeal of its merchandise. In addition, the Company has been continuously bolstering operations in stores and proceeding with facility renovations, including sales floors and service bays.

In its statutory safety inspection and maintenance services, the Company promoted reservations via the website and phone as an initiative to reduce opportunities for physical contact with customers and increase convenience. Due to this initiative and the market environment backed by the increased number of vehicles subject to statutory safety inspections, the number of vehicles that underwent statutory safety inspection and maintenance services rose by 10.0% year on year, to approximately 158,000.

In automobile purchases and sales, new car sales and car purchases increased along with the recovery of demand, while used car sales decreased. As a result, the total number of automobiles sold increased 23.0% year on year, to approximately 6,900.

The total number of stores in operation in Japan stood at 585, with one store added at the end of March 2021. The number of CARS franchise stores decreased to 392 from 402 as of the end of March 2021.

As a result, sales in the domestic AUTOBACS business during the first three months of the consolidated fiscal year under review were 39,939 million yen (compared to 36,083 million yen in the same period of the previous year), and segment profit was 3,757 million yen (compared to 2,443 million yen in the same period of the previous year).

[Overseas Business]

Sales for the Overseas Business were 2,588 million yen (compared to 1,952 million yen in the same period of the previous year), and segment loss was 147 million yen (compared to a segment loss of 157 million yen in the same period of the previous year).

In the retail and service business and the wholesale business, sales increased due to the recovery from the previous year when the businesses were severely affected by lockdowns and other factors. In France, retail sales increased due to the gradual lifting of curfew restrictions. In Singapore, both retail and wholesale sales increased, despite the impact of the renewed lockdown that began in May 2021. On the other hand, sales declined at SK AUTOMOBILE PTE. LTD., a consolidated subsidiary of the Company that engages in auto body repair, painting, and automobile maintenance services, due to a fall in repairs caused by a decrease in traffic volume. In China, wholesale sales increased due mainly to a rise in authorized dealers and the development of new wholesale customers. Also in Australia, wholesale sales increased due to sales activities such as the introduction of new goods, in addition to car electronics goods and radio equipment, despite the impact of lockdowns in some regions.

In terms of the number of store openings and closures outside Japan, with three store openings and one closure, the number of stores increased from 45 as of the end of March 2021, to 47.

[Car Dealership, BtoB and Online Alliance Business (formerly Car Dealership, BtoB and Internet Business)]

Sales for the Car Dealership, BtoB and Online Alliance Business were 11,760 million yen (8,744 million yen in the same period of the previous year), and segment loss was 45 million yen (174 million yen in the same period of the previous year).

In the car dealership business, sales declined in the same period of the previous year due to the effects of people voluntarily refraining from outings following the declaration of a state of emergency. In the first quarter of the fiscal year under review, however, sales were higher than in the same period of the previous year. In April 2021, Autobacs Dealer Group Holdings, Co., Ltd., a wholly owned subsidiary of the Group, acquired all shares in TA Import Co. Ltd., which operates three authorized Audi dealers in Tochigi Prefecture and the northern part of Chiba Prefecture, to make it a subsidiary (second-tier subsidiary of the Group). With this acquisition, the Company has started to develop its third brand, following BMW and MINI, as a dealership business.

In the BtoB business, in April 2021 the Company acquired all the shares of Joyful Shaken & Tire Center

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