Fast Retailing : (830KB)

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FAST RETAILING CO., LTD.

迅 銷 有 限 公 司

(Incorporated in Japan with limited liability)

(Stock Code:6288)

ANNUAL RESULTS ANNOUNCEMENT

FOR THE YEAR ENDED 31 AUGUST 2021

The board of directors (the "Board") of FAST RETAILING CO., LTD. (the "Company" or "Parent") is pleased to announce the consolidated results of the Company and its subsidiaries (collectively the "Group") for the year ended 31 August 2021 together with the comparative figures for the year ended 31 August 2020.

(Amounts are rounded down to the nearest million Japanese yen unless otherwise stated.)

1. CONSOLIDATED FINANCIAL RESULTS

The consolidated financial results were prepared in accordance with International Financial Reporting Standards ("IFRS").

(1) Consolidated Operating Results (1 September 2020 to 31 August 2021)

(Percentages represent year-on-year changes)

	Revenue		Operating profit	Profit before	Profit for
		income taxes	the year
	Millions		%	Millions		%	Millions	%	Millions		%
	of yen		of yen		of yen	of yen
Year ended 31 August 2021	2,132,992		6.2	249,011		66.7	265,872	73.9	175,684		94.3
Year ended 31 August 2020	2,008,846		(12.3)	149,347		(42.0)	152,868	(39.4)	90,398		(49.2)
	Profit attributable to	Total comprehensive	Basic earnings	Diluted earnings
	income for the
	owners of the Parent	per share	per share
	year
	Millions		%	Millions		%		Yen			Yen
	of yen		of yen
Year ended 31 August 2021	169,847		88.0	222,891		104.3		1,663.12	1,660.44
Year ended 31 August 2020	90,357		(44.4)	109,085		(29.6)		885.15			883.62

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Ratio of profit to

Ratio of profit before

Ratio of operating

equity attributable to

income taxes to

profit to revenue

owners of the Parent

total assets

%

%

%

Year ended 31 August 2021

16.4

10.8

11.7

Year ended 31 August 2020

9.5

6.9

7.4

(References) Share of profits and losses of associates Year ended 31 August 2021: 561 million yen

Year ended 31 August 2020: 321 million yen

(2) Consolidated Financial Position

Equity

Ratio of equity

Equity per

attributable to

share

attributable

Total assets

Total equity

owners

attributable

to owners

of the Parent

to owners

of the Parent

to total assets

of the Parent

Millions of

Millions of

Millions of

%

Yen

yen

yen

yen

As at 31 August 2021

2,509,976

1,162,298

1,116,484

44.5

10,930.42

As at 31 August 2020

2,411,990

996,079

956,562

39.7

9,368.83

(3) Consolidated Cash Flows

Net cash generated

Net cash

Net cash

Cash and cash

by

used in investing

used in financing

equivalents

operating activities

activities

activities

at the end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Year ended 31 August 2021

428,968

(82,597)

(302,985)

1,177,736

Year ended 31 August 2020

264,868

(75,981)

(183,268)

1,093,531

2. DIVIDENDS

		Dividends per share						Ratio of
							dividends
	First	Second	Third				Total	Payout		to equity
				dividends	ratio		attributable
	quarter	quarter	quarter	Year-	Full
		(annual)	(consolidated)		to owners of
	period	period	period	end	year
					the Parent
	end	end	end
							(consolidated)
	Yen	Yen	Yen	Yen	Yen		Millions of	%	%
		Yen
Year ended 31 August 2020	-	240.0	-	240.0	480.0	49,003	54.2	5.2
Year ended 31 August 2021	-	240.0	-	240.0	480.0	49,025	28.9	4.7
Year ending 31 August 2022 (forecast)	-	260.0	-	240.0	520.0			30.4

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3. CONSOLIDATED BUSINESS RESULTS PROJECTION FOR YEAR ENDING 31 AUGUST 2022 (1 SEPTEMBER 2021 TO 31 AUGUST 2022)

(% shows rate of increase/decrease from previous year)

Profit before

Profit attributable to

Revenue

Operating profit

owners of the

income taxes

Parent

Millions

%

Millions

%

Millions

%

Millions

%

of yen

of yen

of yen

of yen

Year ending 31 August 2022

2,200,000

3.1

270,000

8.4

270,000

1.6

175,000

3.0

Basic earnings

per share

attributable

to owners

of the Parent

Yen

Year ending 31 August 2022

1,713.26

* Notes

(1) Changes in principal subsidiaries (i.e., changes in specified subsidiaries):

Yes

Newly consolidated: -

Excluded from consolidation: one company: J Brand, Inc.

(2) Changes in accounting policies and accounting estimates:

(i)

Changes in accounting policies to conform with IFRS:

Yes

(ii) Other changes in accounting policies:

None

(iii) Change in accounting estimates:

None

(3) Total number of issued shares (common stock)

(i)

Number of issued shares

As at 31 August 2021

106,073,656

As at 31 August 2020

106,073,656

(including treasury stock)

shares

shares

(ii)

Number of treasury stock

As at 31 August 2021

3,928,985

As at 31 August 2020

3,973,113

shares

shares

(iii)

Average number of shares

For the year ended 31

102,125,851

For the year ended 31

102,081,609

outstanding

August 2021

shares

August 2020

shares

(REFERENCE INFORMATION) NON-CONSOLIDATED FINANCIAL RESULTS

The non-consolidated financial results were prepared in accordance with generally accepted accounting principles in Japan.

(1) Non-consolidated Operating Results (1 September 2020 to 31 August 2021)

(Percentages represent year-on-year changes)

	Net sales	Operating profit	Ordinary profit	Profit
	Millions		%	Millions		%	Millions	%	Millions		%
	of yen		of yen		of yen	of yen
Year ended 31 August 2021	278,605		78.2	191,442		154.2	208,221	166.2	175,286		180.8
Year ended 31 August 2020	156,356		(15.4)	75,316		(36.8)	78,211	(26.2)	62,422		(41.2)
	Net income	Diluted net income
	per share	per share
			Yen			Yen
Year ended 31 August 2021		1,716.37		1,713.61
Year ended 31 August 2020		611.50		610.44

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(2) Non-consolidated Financial Position

				Ratio of	Net assets
		Total assets	Net assets	shareholders'
		per share
				equity to total assets
		Millions of yen	Millions of yen	%	Yen
As at 31 August 2021		1,100,398	667,569	60.0	6,463.08
As at 31 August 2020		1,063,356	538,954	50.0	5,207.74
(References) Shareholders' equity	As at 31 August 2021: 660,168 million yen
	As at 31 August 2020: 531,713 million yen

• This annual results announcement is not subject to auditing procedures pursuant to the Financial Instruments and Exchange Act of Japan.
• Explanation and other notes concerning proper use of consolidated business results projection:
  Statements made in these materials pertaining to future matters including business projections are based on information currently available to the Company and certain assumptions determined to be reasonable. Actual business results may vary substantially depending on a variety of factors.

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1. Business Results

1. Analysis of Business Results for the year ended 31 August 2021
   The Fast Retailing Group's revenue increased and profit expanded significantly in fiscal 2021, or the twelve months from 1 September 2020 to 31 August 2021. Consolidated revenue totaled 2.1329 trillion yen (+6.2% year-on-year) and operating profit totaled 249.0 billion yen (+66.7% year-on-year). Business performance recovered primarily at UNIQLO operations in fiscal 2021 compared to the previous year when performance declined dramatically under the heavy impact of the COVID-19 pandemic. We reported an impairment loss of 16.9 billion yen mainly on UNIQLO International operations and a gain of 8.7 billion yen from the liquidation of J Brand, Inc., resulting in a net cost of 6.5 billion yen under other income/expenses. When we liquidated J Brand, Inc. in August 2021, we recorded a liquidation gain on foreign exchange movements following a subsequent weakening in the Japanese yen compared to the exchange rate at the time of acquisition. We also recorded 16.8 billion yen in finance income net of costs, mainly comprising a 19.2 billion yen foreign exchange gain on foreign-currency denominated assets and other items. As a result, profit before income taxes increased to 265.8 billion yen (+73.9% year-on-year) and profit attributable to owners of the Parent expanded to 169.8 billion yen (+88.0% year-on-year) in the twelve months to 31 August 2021.
   Capital expenditure increased by 17.9 billion yen year-on-year in fiscal 2021 to 100.6 billion yen. That figure can be broken down into 15.7 billion yen for UNIQLO Japan, 38.5 billion for UNIQLO International, 3.8 billion yen for GU, 1.8 billion yen for Global Brands, and 40.7 billion yen for systems, etc. While investment in new store openings declined compared to the previous year in which we opened many global flagship stores and large-format stores, we did increase our investment in global automated warehousing as part of our transformative Ariake Project.
   As a united Group, we are determined to strengthen initiatives designed to expand our business operations and promote sustainability as part our quest to become a global No.1 brand. We work hard to ensure our LifeWear ultimate everyday wear is produced and sold in working environments that are healthy, safe, and environment- conscious, and strive to help solve a variety of social issues. We are currently channeling our efforts into expanding our e-commerce, UNIQLO International, and GU businesses as key pillars of operational growth. With regards to e-commerce, we are accelerating the building of a framework that will promote our main business by melding online and physical stores so we can offer as many of the products and information that customers want, when they want them. We are already pressing ahead with reforms that will enable us to offer more services that combine the strengths of our physical store and e-commerce network and unify inventory management. Regarding UNIQLO International, we are accelerating the opening of new stores in all markets and areas in which we operate, and seeking to instill deeper and more widespread empathy for UNIQLO's LifeWear concept by opening global flagship stores and large-format stores in the world's major cities. In terms of our GU segment, we are working to strengthen GU's position as a brand that offers fun fashion at amazingly low prices and seeking to expand the GU store network primarily in Japan.
   UNIQLO Japan
   UNIQLO Japan reported revenue of 842.6 billion yen (+4.4% year-on-year) and a large increase in operating profit to 123.2 billion yen (+17.7% year-on-year) in fiscal 2021. Full-yearsame-store sales (including e-commerce) increased 3.6% year-on-year. In the first half from 1 September 2020 through 28 February 2021, same-store sales rose 5.6% year-on-year on the back of strong sales of products that fulfilled customer demand for stay-at-home items as well as core Fall Winter ranges. However, same-store sales increased by a much lesser 0.9% year-on-year in the second half from 1 March through 31 August 2021 as sales were adversely impacted by the declaration of a state of emergency and unfavorable weather. Meanwhile, full-yeare-commerce sales are expanding favorably, rising 17.9% year-on-year to 126.9 billion yen in fiscal 2021 to constitute a 15.1% proportion of total revenue.
   The UNIQLO Japan gross profit margin improved 1.4 points year-on-year in fiscal 2021 thanks to efforts to improve cost of sales and our decision to curb discounting of products. From 12 March 2021, we made our products easier for customers to purchase by changing our product price displays in Japan to show just one tax-inclusive price and keeping prices the same by absorbing the consumption-tax component ourselves. We have been able to maintain cost percentages close to regular levels by working successfully with partner factories to improve cost of sales by encouraging the use of common materials, controlling the number of product items, and minimizing fabric wastage. The selling, general and administrative expense ratio also improved by 0.4 point year-on-year thanks to more efficient distribution and advertising and promotion spending.

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