J Front Retailing : Consolidated Financial Results for the First Six Months of the Fiscal Year Ending February 28, 2023 (under IFRS)

Translation

October 11, 2022

Consolidated Financial Results for the First Six Months of

the Fiscal Year Ending February 28, 2023

(under IFRS)

Company name:	J. FRONT RETAILING Co., Ltd.
Listing:	Tokyo Stock Exchange and Nagoya Stock Exchange
Securities code:	3086
URL:	https://www.j-front-retailing.com/
Representative:	Tatsuya Yoshimoto, President
Inquiries:	Hajime Inagami, Senior General Manager of Investor Relations Promotion Division,
	Financial Strategy Unit
	TEL: [phone] (from overseas)

Scheduled date to file Quarterly Securities Report:	October 13, 2022
Scheduled date to commence dividend payments:	November 11, 2022

Preparation of supplementary material on quarterly financial results: Yes

(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated performance for the first six months of the fiscal year ending February 28, 2023 (from March 1, 2022 to August 31, 2022)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
	Gross sales	Sales revenue	Business profit	Operating profit		Profit before tax
Six months ended	Millions of	%	Millions of		%	Millions of	%	Millions of	%		Millions of	%
	yen		yen			yen		yen			yen
August 31, 2022	464,130	16.8	169,129		7.5	13,629	272.9	13,237	-	12,223	-
August 31, 2021	397,345	23.9	157,333		6.7	3,654	-	(1,388)	-	(2,871)	-
	Profit attributable	Total		Basic earnings	Diluted earnings
	comprehensive
	to owners of parent	per share	per share
	income
Six months ended	Millions of	%	Millions of	%		Yen		Yen
	yen		yen
August 31, 2022	10,155	-	10,311		-		38.75		38.72
August 31, 2021	(1,995)	-	(1,912)		-		(7.62)		(7.62)

• 1. Of sales revenue, sales from purchase recorded at the time of sale (shoka shiire) of the "Department Store Business" have been converted into gross amount and the net amount of sales of the "SC Business" into tenant transaction volume (gross amount basis) to calculate gross sales.

2. Business profit is obtained by subtracting cost of sales and selling, general and administrative expense from sales revenue. Operating profit is obtained by adding other operating income to and subtracting other operating expenses from business profit.

(2) Consolidated financial position

				Ratio of equity	Equity attributable
			Equity attributable	attributable to
	Total assets	Total equity	to owners of parent
	to owners of parent	owners of parent to
				total assets	per share
As of	Millions of yen	Millions of yen	Millions of yen	%	Yen
August 31, 2022	1,161,035	368,702	357,041	30.8	1,362.36
February 28, 2022	1,192,907	362,120	350,368	29.4	1,337.29

2. Cash dividends

			Annual dividends
	First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
Fiscal year ended	Yen	Yen	Yen	Yen	Yen
-	14.00	-	15.00		29.00
February 28, 2022
Fiscal year ending	-	15.00
February 28, 2023
Fiscal year ending
February 28, 2023			-	16.00		31.00
(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the fiscal year ending February 28, 2023 (from March 1, 2022 to February 28, 2023)

(Percentages indicate year-on-year changes.)

	Gross sales	Sales revenue	Business profit		Operating profit	Profit before tax
	Millions of	%	Millions of	%	Millions of	%		Millions of	%	Millions of	%
Fiscal year ending	yen		yen		yen			yen		yen
975,000	12.6	346,000	4.4	24,000	104.8		23,500	150.5	20,500	231.2
February 28, 2023
	Profit attributable	Basic earnings
	to owners of parent	per share
	Millions of	%		Yen
	yen
Fiscal year ending
16,000	270.2		61.05
February 28, 2023
Note: Revisions to the consolidated earnings forecasts most recently announced: None

• Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Changes in accounting policies, changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
4. Number of issued shares (common shares)
5. 1. Total number of issued shares at the end of the period (including treasury shares)

As of August 31, 2022	270,565,764 shares
As of February 28, 2022	270,565,764 shares

1. Number of treasury shares at the end of the period

As of August 31, 2022	8,489,856 shares
As of February 28, 2022	8,565,722 shares

1. Average number of shares during the period (cumulative from the beginning of the fiscal year)

For the six months ended August 31, 2022	262,067,710 shares
For the six months ended August 31, 2021	261,862,212 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters

(Caution regarding forward-looking statements)

The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable by the Company. These statements do not purport that the Company pledges to realize such statements. Actual business and other results may differ substantially due to various factors. Please refer to "1. Qualitative information regarding results for the first six months (3) Explanation of consolidated earnings forecasts and other forward-looking statements" on page 7 of the material attached to this quarterly financial results report for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof.

(How to obtain supplementary material on financial results)

Supplementary material on financial results was disclosed on the same day on TDnet.

[Attached Material]
	Index
1.	Qualitative information regarding results for the first six months...........................................................	2
(1)	Explanation of operating results ..........................................................................................................	2
(2)	Explanation of financial position .........................................................................................................	7
(3)	Explanation of consolidated earnings forecasts and other forward-looking statements ......................	7
2.	Condensed quarterly consolidated financial statements and significant notes thereto ............................	8
(1)	Condensed quarterly consolidated statement of financial position......................................................	8
(2)	Condensed quarterly consolidated statement of profit or loss ...........................................................	10
(3)	Condensed quarterly consolidated statement of comprehensive income............................................	11
(4)	Condensed quarterly consolidated statement of changes in equity....................................................	12
(5)	Condensed quarterly consolidated statement of cash flows...............................................................	14
(6)	Notes to condensed quarterly consolidated financial statements .......................................................	15
	(Notes on premise of going concern).................................................................................................	15
	(Segment information) .......................................................................................................................	15

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1. Qualitative information regarding results for the first six months

(1) Explanation of operating results

		Six months ended August 31, 2022
(Millions of yen, %)		(from March to August)
	Year-on-year changes	Against April
	Results	announced figures
		Change in amount	Change in percentage	Change in amount
Gross sales	464,130	66,785	16.8	(27,870)
Sales revenue	169,129	11,796	7.5	(9,871)
Gross profit	82,861	13,168	18.9	(3,639)
Selling, general and	69,232	3,194	4.8	(5,768)
administrative expense
Business profit	13,629	9,975	272.9	2,129
Other operating income	2,320	663	40.0	1,320
Other operating expenses	2,712	(3,989)	(59.5)	712
Operating profit	13,237	14,625	-	2,737
Profit attributable to owners	10,155	12,150	-	4,155
of parent

In the six months ended August 31, 2022 (from March 1, 2022 to August 31, 2022), consolidated sales revenue was ¥169,129 million, up 7.5% year on year, operating profit was ¥13,237 million (operating loss of ¥1,388 million in the six months ended August 31, 2021) and profit attributable to owners of parent was ¥10,155 million (loss of ¥1,995 million in the six months ended August 31, 2021).

Against April announced figures, although sales revenue decreased, operating profit increased largely due to an increase in business profit as a result of cost savings and other measures during the period, as well as the receipt of subsidies in the SC Business. Together with the decrease in tax expenses, profit attributable to owners of parent increased.

During the six months ended August 31, 2022, the Japanese economy showed signs of a recovery although it was affected by the impact of the novel coronavirus disease (COVID-19) and also the impact of supply-side constraints, inflation and other factors on corporate activities.

In the retail sector, although there were concerns about the negative impact of COVID-19, inflation and other factors on personal spending, there have been signs of a recovery since the lifting of strict infection control measures in late March, including no restrictions limiting movement during the summer holiday season and the emergence of a rebound in consumption. However, we recognize that we need to continue keeping a close eye on the risk of downward pressure on consumption due to trends in the spread of COVID-19, sudden changes in exchange rates, high prices and other factors.

Amid this highly uncertain business environment, we have positioned FY2022, the second year of our Medium-Term Business Plan, as a year of "gear change" to ensure that we are on the right track toward "complete recovery" from the COVID-19 pandemic, as stated in the Medium-Term Business Plan, and to shift to aggressive management for "regrowth" in FY2024 and beyond.

Specifically, to steadily link our three key strategies to results as part of our "real x digital strategy" in our core Department Store Business, we made efforts to evolve customer communications utilizing the Daimaru Matsuzakaya App, and also launched a media commerce site for cosmetics centered on brick- and-mortar stores and promoted renovations to make brick-and-mortar stores more attractive in accordance with the store characteristics. In addition, in the SC Business, we promoted major renovations mainly for Ikebukuro PARCO, Nagoya PARCO and other flagship stores according to a large-scale renovation plan based on our key strategies.

In our "developer strategy," we have entered the residential real estate business to maximize the use of our real estate holdings and expand our real estate portfolio, and planned and promoted development focusing on priority areas, including one of the largest multi-use facility developments in Osaka's Shinsaibashi area, in addition to Nagoya's Sakae area. Moreover, we are evaluating the basic policy and details of the Group CRE strategy and the establishment of a business promotion system for "regrowth" in FY2024 and beyond.

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