Bookoff : Consolidated Summary Report For the Second Quarter of the Fiscal Year Ending May 31, 2022

January 13, 2022

Consolidated Summary Report

For the Second Quarter of the Fiscal Year Ending May 31, 2022

[Japanese GAAP]

Company Name: BOOKOFF GROUP HOLDINGS LIMITED	Stock Exchange: Tokyo
Code Number:	9278	URL: https://www.bookoffgroup.co.jp/en/
Representative:	Yasutaka Horiuchi, President and CEO
Inquiries:	Ryotaro Hara, General Manager of Corporate Planning Department Tel: [phone]
Quarterly Report issue date:	January 14, 2022
Dividend payment date:	-
Supplementary materials of quarterly financial results:	Yes
Quarterly Financial results briefing:	Yes

(Amounts less than one million yen are rounded down)

1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending May 31, 2022 (June 1, 2021 - November 30, 2021)

(1) Consolidated Results of Operations						(Percentage figures represent year-on-yearchanges)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
		Million yen	YoY change	Million yen	YoY change	Million yen	YoY change	Million yen	YoY change
			%	%	%	%
Six months ended Nov. 30, 2021		42,776		-		345	-	662		-	457	-
Six months ended Sep. 30, 2020		37,522		(9.1)		517	(41.2)	650		(43.2)	(284)	-
(Note) Comprehensive income			Six months ended Nov. 30, 2021:	¥450 million (-%)
				Six months ended Sep. 30, 2020:	¥(256) million (-%)
		Net income per share	Fully diluted net income
			per share
					Yen			Yen
Six months ended Nov. 30, 2021				26.20			-
Six months ended Sep. 30, 2020				(16.31)			-

(Note) BOOKOFF GROUP HOLDINGS changed its fiscal year end from March 31 to May 31 beginning with the fiscal year that ended on May 31, 2021. No year-on-year changes are shown for the six months ended November 30, 2021 because the first half are different. The first half of the current fiscal year ended on November 30, 2021 and the first half of the previous fiscal year, which was a transitional fiscal year, ended on September 30, 2020.

(2) Consolidated Financial Condition
		Total assets		Net assets			Equity ratio
		Million yen		Million yen			%
As of Nov. 30, 2021	41,664		13,301			31.8
As of May 31, 2021	40,321		12,944			31.9
(Reference) Shareholders' equity	As of Nov. 30, 2021: ¥13,229 million	As of May 31, 2021: ¥12,854 million
2. Dividends
					Dividend per share
		End of 1Q	End of 2Q	End of 3Q	End of 4Q	End of FY	Full year
		Yen		Yen		Yen	Yen		Yen	Yen
Fiscal year ended May 31, 2021		-		0.00		-		-	6.00	6.00
Fiscal year ending May 31, 2022		-		0.00
Fiscal year ending May 31, 2022 (est.)					-	-	15.00	15.00
(Note) Revisions to the most recently announced dividend forecast: Yes

3. Consolidated Forecast for the Fiscal Year Ending May 31, 2022 (June 1, 2021 - May 31, 2022)

(Percentage figures represent year-on-year changes)

	Net sales	Operating profit	Ordinary profit	Profit attributable to	Net income
	owners of parent	per share
	Million yen	YoY change	Million yen	YoY change	Million yen	YoY change	Million yen	YoY change	Yen
		%		%		%		%
Full year	87,000	-	1,350	-	1,800	-	850	-	48.70

(Notes) 1. Revisions to the most recently announced consolidated earnings forecasts: Yes

1. Only the full-year forecast is shown because BOOKOFF GROUP HOLDINGS manages performance on a fiscal year basis.
2. No prior-year comparisons are shown because the fiscal year ended on May 31, 2021 was a 14-month transitional fiscal period due to the change in the fiscal year.
3. BOOKOFF GROUP HOLDINGS disposed of its treasury shares on October 21, 2021 as restricted stock remuneration. Net income per share in the consolidated forecast for the fiscal year ending May 31, 2022 reflects the effect of disposal of these treasury shares.

Notes:

1. Significant changes in subsidiaries during the period (changes in specific subsidiaries accompanied by changes in the scope of consolidation): None

New: - (company name)

Excluded: - (company name)

1. Application of special accounting methods for presenting quarterly consolidated financial statements: None
2. Changes in accounting policies and accounting-based estimates, and restatements

1. Changes due to revision of accounting standards: Yes
2. Changes due to other reasons: None
3. Changes in accounting-based estimates: None
4. Restatements: None

(Note) Please see "2. Quarterly Consolidated Financial Statements and Notes, (4) Notes to Quarterly Consolidated Financial Statements, Changes in Accounting Policies" on page 11 of the attachments for further information.

4. Number of shares outstanding (common shares)

(Shares)

1. Shares outstanding (including treasury shares)
2. Treasury shares
3. Average number of shares outstanding

As of Nov. 30, 2021	20,547,413	As of May 31, 2021	20,547,413
As of Nov. 30, 2021	3,088,900	As of May 31, 2021	3,100,000
Six months ended Nov. 30, 2021	17,449,900	Six months ended Sep. 30, 2020	17,447,413

• The current summary report is not subject to the quarterly review by certified public accountants or auditing firms.
• Cautionary statement regarding forecasts of operating results and special notes

(Forward-looking statements)

Forward-looking statements in these materials are based on information available to management at the time this report was prepared and assumptions that management believes are reasonable. This report is not promises by BOOKOFF GROUP HOLDINGS regarding future performance. Actual results may differ materially from those projected in the forward -looking statements due to a variety of factors.

(How to view supplementary materials for quarterly financial results)

Supplementary materials for the quarterly financial results will be disclosed today (January 13, 2022), using the Timely Disclosure network (TDnet).

BOOKOFF GROUP HOLDINGS LIMITED (9278)

Summary Report for the Second Quarter of May 2022 Fiscal Year

Table of Contents

1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Cash Flows	4
(3)	Explanation of Financial Position	4
(4)	Explanation of Consolidated Earnings Forecasts and Other Forward -looking Statements	4
2. Quarterly Consolidated Financial Statements and Notes	5
(1)	Quarterly Consolidated Balance Sheet	5
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	7
	Quarterly Consolidated Statement of Income	7
	For the Six-month Period
	Quarterly Consolidated Statement of Comprehensive Income	8
	For the Six-month Period
(3)	Quarterly Consolidated Statement of Cash Flows	9
(4)	Notes to Quarterly Consolidated Financial Statements	11
	(Notes Concerning the Going-Concern Premise)	11
	(Significant Changes in Shareholders' Equity)	11
	(Changes in Accounting Policies)	11
	(Segment Information)	12

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BOOKOFF GROUP HOLDINGS LIMITED (9278)

Summary Report for the Second Quarter of May 2022 Fiscal Year

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

Forward-looking statements in this Consolidated Summary Report are based on information available to management as of the end of the second quarter.

The previous fiscal year was a 14-month transitional fiscal year from April 1, 2020 to May 31, 2021 due to the change in the fiscal year end. Consequently, no year-on-year comparisons are shown because of the different first half of the current fiscal year (June 1 to November 30, 2021) and previous fiscal year (April 1 to September 30, 2020).

Since the start of operations, the BOOKOFF Group has always been guided by the two corporate philosophies of "contributing to society through our business activities" and "the pursuit of employees' material and spiritual wellbeing." In addition, the Group has established the following mission for business activities in accordance with these philosophies: Be a source of an enjoyable and prosperous life for as many people as possible.

Based on this mission, we will use our strengths in Japan's growing reuse market to become the leading reuse company with books as the core category. Our goal is to become the reuse store chain used by the largest number of customers as we adapt to changes in market conditions.

We have established two core strategies in order to accomplish this goal.

Core strategy I: Upgrade individual stores

We believe that upgrading reuse services provided at stores in all of our businesses, whether in Japan or other countries, to reflect the needs of regions served and targeted customer segments is the starting point for becoming a leading reuse company that serves the largest number of customers. To accomplish this goal, we are making upgrades in a manner that matches the format packages and services of individual stores.

1) BOOKOFF operations in Japan

BOOKOFF operations in Japan are the Group's core business and have consistent sales and earnings that account for a large share of consolidated sales and earnings. As a result, this business generates funds for investments for activities for growth. There are separate management policies for the two categorie s of stores, which are based mainly on floor area, and for online stores, primarily BOOKOFF Online, and e-commerce distribution centers.

2) Business for affluent customers

This sector consists of two services that target mainly affluent and high-net-worth customers. One is the operation of purchasing desks at department stores using the hugall brand. The other is the operation of jewelry repair, restoration and sales locations at department stores and shopping centers using the name aidect brand. Both services are valuable channels for serving customer segments that are not covered by BOOKOFF stores. The hugall service uses its improved efficient operations extending from purchases to sales in order to generate earnings by purchasing quality reuse items primarily at purchasing desks located at department stores. To continue increasing earnings, the hugall service is focusing on adding more locations, mainly at department stores, and constantly increasing the number of customers. At the aidect service, the main goal is becoming profitable. To accomplish this, the highest priorities are operating existing stores more efficiently and increasing the volume of services for order-made items, which have a high profit margin.

3) Overseas business

The BOOKOFF Group operates stores in the United States and France. In addition, the Group started operating stores in Malaysia under the name Jalan Jalan Japan in 2016 to create a channel for selling surplus merchandise in Japan.

Core strategy II: Use all the BOOKOFF Group's strengths

In the past, the BOOKOFF Group provided separate services at stores and through channels other than stores. As the digital shift alters the spending patterns of customers of the BOOKOFF operations in Japan, we need to leverage all of our strengths in order to continue growing. In addition, we must continue expanding our businesses for affluent customers and our overseas operations as our group's business activities become more

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BOOKOFF GROUP HOLDINGS LIMITED (9278)

Summary Report for the Second Quarter of May 2022 Fiscal Year

diverse. Our growth will also be backed by the use of operational expertise acqu ired over many years, our highly talented workforce and the linkage of merchandise among different business units.

The most important initiative within this core strategy is the "One BOOKOFF" concept for our core BOOKOFF operations in Japan. This concept has the following objective.

"One BOOKOFF"

Our goal is to seamlessly integrate our member base, sales and purchasing platforms, the systems that underpin these operations, and other resources. We want to allow all of our services to utilize our assets including information and expertise concerning members, merchandise, operations and other items acquired by individual operations. By facilitating this widespread sharing of resources, we plan to increase the volume of business for the entire BOOKOFF chain of stores in Japan while improving the earnings of every store.

To accomplish this goal, we are making strategic IT and marketing investments in the current fiscal year to increase the consistency of earnings in the BOOKOFF operations in Japan as the pandemic continues to impact the business climate. We are also making investments in remodeling BOOKOFF SUPER BAZAAR stores with the goal of achieving a recovery in the earnings of these stores. In addition, we are positioning this fiscal year as a time for taking on new challenges in order to improve the profitability of services for affluent customers and of our overseas operations, which are business sectors with good prospects for growth.

We are continuously making investments for activities involving the "One BOOKOFF" concept. These activities include measures to increase the number of members using our official app, distributing coupons and conducting special sales exclusively for members, allowing customers to pick up at stores mercha ndise purchased using the app, and other convenient and valuable services. Investments have been also used to create an omni-channel structure that utilizes the BOOKOFF Online website and to move forward with our O2O (online-to-offline) strategy.

In BOOKOFF operations in Japan, we actively renovated existing BOOKOFF SUPER BAZAAR and BOOKOFF PLUS stores during the first half. Sales of books, which are the largest components of sales, were lower than the very high level of one year earlier with demand associated with the need to stay home during the pandemic. But there were big increases from one year earlier in sales in the trading card and hobby goods category because of numerous activities for raising the sales of these products, such as the expansion of trading card sales areas and the establishment of space for trading card duels.

At businesses for affluent and high-net-worth customers, sales were higher than one year earlier despite the negative effect of the pandemic on purchasing desks at department stores and other business operations.

In Malaysia, Jalan Jalan Japan stores were forced to suspend operations due to a pandemic lockdown. In the United States, there were high levels of purchases and sales at BOOKOFF stores. Most significant was big increases in sales from one year earlier in books and anime merchandise. During the first half, we opened BOOKOFF KAKA'AKO store in the U.S. and Jalan Jalan Japan Masai store in Malaysia.

In the city of Musashino in Tokyo, we opened Japan TCG Center Kichijoji-eki-kitaguchi store. This is the BOOKOFF Group's first store specializing in trading cards. Customers can buy and sell trading cards at the store and purchase new card packs as well as many types of merchandise associated with trading cards. The store also has a space for trading card duels.

As a result, consolidated net sales amounted to ¥42,776 million. The BOOKOFF Group recorded an operating profit of ¥345 million, an ordinary profit of ¥662 million, and a profit attributable to owners of parent of ¥ 457 million.

There is no business segment information because the BOOKOFF Group has only a single segment.

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