BEENOS : Consolidated Financial Results (Japanese Accounting Standards) for 3Q FY2021

This is a translation of the original Japanese release. The Japanese text shall prevail in case of any variance between this version and the Japanese text.

Consolidated Financial Results (Japanese Accounting Standards)

For the Third Quarter Ended 30 June 2021

12 August 2021

Company Name

BEENOS Inc.

Stock Exchange Listing

Tokyo

Stock Code

3328

URL http://www.beenos.com

Representative

President and Group CEO

Shota Naoi

Contact

Executive Officer

Hisanori Matsuda

(TEL) 03-6859-3328

Scheduled filing date of the Annual

13 August 2021

Scheduled date of commencement ―

Securities Report

of dividend payment

Supplementary documents for quarterly results: Yes

Quarterly results briefing: Yes

(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter Ended 30 June 2021

(1 October 2020 - 30 June 2021)

(1) Consolidated Results of Operations (Accumulated Total)

(% show year-on-year changes)

Net sales

Operating income

Ordinary income

Net income

Million yen

%

Million yen

%

Million yen

%

Million yen

%

3Q FY2021

18,341

△6.0

1,090

△60.5

1,065

△60.8

448

△74.8

3Q FY2020

19,501

11.1

2,756

―

2,718

―

1,784

―

Comprehensive

(Note) Income

3Q FY2021

1,258 Mil. yen ( △28.9%)

3Q FY2020

1,769 Mil. yen (

―%)

Net income per share

Net income per share

(basic)

(diluted)

Yen

Yen

3Q FY2021

34.98

32.72

3Q FY2020

143.20

―

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

3Q FY2021

21,928

11,797

53.3

908.80

FY2020

23,029

11,210

48.3

882.12

(Reference) Shareholders'

3Q FY2021 11,684 Million yen

FY2020

11,130 Million yen

equity

2. Dividends

Dividend per share

End of 1Q

End of 2Q

End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

FY2020

―

0.00

―

20.00

20.00

FY2021

―

0.00

―

FY2021 (Forecast)

25.00

25.00

Note: Changes from previous dividend forecast: Yes

3. Consolidated Forecasts for the Fiscal Year Ending 30 September 2021 (1 October 2020 - 30 September 2021)

We are refraining from disclosing our consolidated forecast for FY2021. Please refer to "Explanation of Outlook for FY2021" on pg. 7 for details.

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• Notes

(1) Changes of important subsidiaries during period			:	None
New companies: -(Company name: -)		Excluded companies: -(Company name: -)
(2)
(3) Changes in accounting policies and changes or restatement of accounting estimates
①	Changes in accounting policies caused	by revision	of
accounting standards			:	None
②	Changes in accounting policies other than ①	:	None
③	Changes in accounting estimates			:	None
④	Restatement			:	None
(4) Number of shares outstanding (common shares)
	Number of shares outstanding at the end of
①		3Q FY2021			13,335,995	FY2020	13,335,995
period (including treasury shares)
				Shares		Shares
	Number of treasury shares at end of period					478,417		717,670
②		3Q FY2021			Shares	FY2020	Shares
	Average number of shares outstanding during
③	3Q FY2021			12,831,903	3Q FY2020	12,459,437
the term
				Shares		Shares

• Status of a quarterly review

This financial summary does not need to undergo auditing.

• Explanations and other special notes concerning the appropriate use of business performance forecasts

The forward-looking statements such as result forecasts included in this document are based on the information available to the Company at the time of the announcement and on certain assumptions considered reasonable, and the Company makes no representations as to their achievability. Actual results may differ materially from the forecast depending on a range of factors.

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○Table of Contents

1. Qualitative Information for this Fiscal Year's Results	4
(1) Business Performance Report	4
(2) Financial Status Report	6
(3) Outlook for FY2021	7
2. Quarterly Financial Statements and Major Notes	9
(1) Quarterly Consolidated Balance Sheet	9
(2) Quarterly Consolidated Profit & Loss Statement and
Quarterly Consolidated Statement of Comprehensive Income	10
Quarterly Consolidated Profit & Loss Statement
Consolidated Cumulative 3rd Quarter	11
Quarterly Consolidated Statement of Comprehensive Income
Consolidated Cumulative 3rd Quarter	12
(3) Notes on Consolidated Financial Statement	13
(Notes regarding the premise of on-going concerns)	13
(Notes regarding significant changes in the amount of shareholder's equity)	13
(Segment Information)	13

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1. Qualitative Information for this Fiscal Year's Results

(1) Business Performance Report

The BEENOS Group aims to be on the "Global Platform Frontier" and continue to create platforms that will connect Japan with the world to create new standards and possibilities for people, products and experiences.

Our objective this year is to "establish a position that competitors cannot catch up to" in the Global Commerce Business, "shift to higher ticket items and fortify foreign sales" in the Value Cycle Business and "create a new SaaS-type system specific to the entertainment industry" in the Entertainment Business. We also believe that the effects of the COVID-19 pandemic will have a long-term effect and will take the necessary measures to adapt in the most appropriate manner for the safety and the growth of our businesses.

In the third quarter, the Global Commerce Business continued to decrease shipping rates to various countries including the USA and Russia to increase its share of the market by leveraging its position. The Value Cycle Business has conducted multiple measures, including the opening of additional brick and mortar stores, and has opened a store on China's largest Cross Border EC Mall "Tmall Global" to increase its overseas transactions. The Entertainment Business focused on the sales of official merchandise of performing artists and aimed to create a scheme that would not depend heavily on in-person events. As a result, the E-Commerce Business showed strong growth in sales and operating income. The Incubation Business recorded minimal sales on investments. The new businesses have continued its efforts to support Japanese companies and content holders with their global penetration and advancement by joining partnerships with places such as Alibaba Group's CtoC marketplace "Taobao" and flea market app "Xianyu" as well as Southeast Asia's largest EC platform, "Lazada". As we continue to connect Japan with the world's largest EC markets, we aim to create new markets that crosses borders.

As a result, the 3rd quarter consolidated net sales were 18,341 Million JPY (down 6.0% year on year), operating income was 1,090 Million JPY (down 60.5% year on year), ordinary income was 1,065 Million JPY (down 60.8% year on year), and net income attributable to owners of parent was 448 Million JPY (down 74.8% year on year). The main reason for the big decrease year on year is because we recorded sales of operational investment securities last year (about 3.2 Billion JPY), but sales in the same category were minimal year to date.

The consolidated GMV for the 3rd quarter was 47.2 Billion JPY (up 30.3% year on year).

The achievements of each business segment are as follows.

① E-Commerce Business

1. Global Commerce Business
   As COVID-19 has delayed or suspended international distribution, The Overseas Forwarding and Proxy

Purchasing Business (From Japan) has made a concerted effort to provide alternative shipping methods to foreign countries which has led to an increased pace in sales. The United States has particularly seen an increase in orders as we are able to implement an original shipping service that provides shipping charges at less than half the normal cost which gives us leverage over competitors. We have also created an original shipping method for the Russian market which is seeing a rapid growth in the EC market and has high potential. Shipping to Russia had been limited to shipping by sea which took months for a package to arrive. We have successfully decreased shipping time to approximately 10 days while lowering costs as much as possible to make the service more convenient for users in Russia. We have also made it easier for Japanese EC services to make their products available on Buyee through "Buyee Connect" which can be simply done by installing a few tags on the EC service's website. Popular websites such as LOCONDO.jp and URBAN RESEARCH ONLINE STORE have already used this service. Buyee Connect allows users to purchase through major foreign payment services such as PayPal and Alipay as well as receiving customer support in various languages including English and Chinese.

The Global Shopping Business (To Japan) has continued to automate its operations and conducted marketing strategies aimed at individual users to increase its number of active users. Though COVID-19 has hit the United

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States hard, where our distribution center is located, operations were delayed temporarily by the pandemic, but has returned to normal.

As a result, the net sales were 6,069 Million JPY (up 44.0% year on year) and operating income was 2,076 Million JPY (up 82.1% year on year).

Ii) Value Cycle Business

The Apparel Reuse Business has seen a decrease in demand for luxury items with the continuing spike of COVID-19 and the declaration of a state of emergency in major Japanese cities but has been able to improve its operating margins though the improvement of gross profit margins and optimizing advertising costs. On the purchasing side, we have opened 4 Brandear brick and mortar stores in Tokyo which increases our total to 6 stores to continue the purchasing of luxury items. These efforts have increased the average unit price of purchased items. Furthermore, our online appraising service, "Brandear Bell", has started appraising watches and accessories and our delivery purchasing service has now implemented an insurance service on its deliveries up to 5 Million JPY. These non-face to face measures have improved our purchasing services and led to a steady flow of purchases. On the selling side, we have partnered with the Taiwan and Southeast Asia E-Commerce juggernaut, "Shopee," as well as China's largest Cross Border EC Mall "Tmall Global" to sell merchandise abroad. This has led to an increase in foreign sales which now comprises of 14.9% of all sales in 3Q (foreign composition was 10.3% on 2Q FY2021). We have also started a back-order service where customers can have items they are interested be shipped to any of Brandear or JOYLAB's locations where they can see it first-hand before purchasing the item.

The Liquor Mediation Business has increased its marketing to purchase items from restaurants and bars. As a result, purchases increased. On the selling side, sales were doing well due to consumers purchasing liquor to drink at home as well as an increase in demand for Japanese whiskey that is no longer in circulation. Furthermore, the purchase of luxury items at JOYLAB stores has increased which is accomplishing our measures to increase the synergy within the BEENOS Group.

As a result, net sales were 8,767 Million JPY (down 3.2% year on year) and operating income was 93 Million JPY (up 450.0% year on year).

iii) Entertainment Business

The Entertainment Business continues to see a downward trend of large-scale events due to the COVID-19 pandemic which has led to a decrease in sales at concert venues. However, we have seen a steady increase in sales as we have focused on selling merchandise via E-commerce at online events. We have also optimized operation to cut on fixed costs which has increased operating margins.

The Global Product Business has seen healthy sales in its original cosmetic brands, such as "366 (San Roku Roku). "

As a result, the net sales were 3,337 Million JPY (up 12.5% year on year) and operating income was 164 Million JPY (compared with operating loss of 64 Million JPY in 3Q FY2020).

For the E-Commerce Business as a whole, net sales were 18,174 Million JPY (up 11.9% year on year) and operating income was 2,334 Million JPY (up 113.5% year on year).

②Incubation Business

The Investment and Consultation Business has focused on investing in startups in online marketplaces and

online payments in emerging countries and Japanese inbound tourism in Japan. We have teamed up with one of our domestic investments, Vpon JAPAN Inc., to create a digital solution on the cross-border front. This partnership with BEENOS Travel Inc. will operate the "Japan inbound media promotion verification" service that will gauge how inbound-related advertisements and articles have converted to users actually visiting the target region. We currently find ourselves in the stage where we can synergize with the companies we have

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