JAFCO : Financial Results for the Year Ended March 31, 2023

JAFCO Group Co., Ltd.

The original disclosure in Japanese was released on April 26, 2023 at 12:45 (GMT+9).

This is a summary translation of a press release made in Japanese for convenience only.

JAFCO Group Co., Ltd. (Ticker: 8595)	Contact: Investor Relations
1-23-1 Toranomon, Minato-ku,	Tel: [phone]
Tokyo 105-6324 Japan	[e-mail]
https://www.jafco.co.jp/english/
	April 26, 2023

Financial Results for the Year Ended March 31, 2023

[Japanese GAAP]

(Summary of Japanese announcement)

(Japanese yen figures less than one million yen are rounded down)

1. Consolidated Performance for the Year ended March 31, 2023 (April 1, 2022 - March 31, 2023)

1. Consolidated Operating Results

(Figures with % indicate the rate of change from the same period of the previous fiscal year)

					Net sales	Operating income		Ordinary income		Profit attributable to
					[¥ million]	[%]	[¥ million]		[%]		[¥ million]	[%]		JAFCO Group Co.,
																Ltd. stockholders
																[¥ million]	[%]
	For the year ended March		14,073	(49.2)	(4,414)		-		(3,048)	-		40,571	169.0
	31, 2023
	For the year ended March		27,677	28.7	16,876		88.2		18,360	56.8		15,080	(60.8)
	31, 2022
	Note:	Comprehensive income	Year ended March 31, 2023:	(¥20,795 million) [-%]
					Year ended March 31, 2022:	¥25,678 million [(36.9%)]
			Net income per		Fully diluted net	Return	Ordinary income/	Operating income/
				income per share	on equity	total assets		net sales
					share [¥]
							[¥]		[%]			[%]			[%]
	For the year ended		586.92			-		24.7			(1.6)			(31.4)
	March 31, 2023
	For the year ended		192.50			-		7.3			7.4			61.0
	March 31, 2022
	(Ref.) Equity method investment gain or loss Year ended Mar. 31, 2023: ¥- million	Year ended Mar. 31, 2022: ¥- million

(Note) The Company conducted a 3-for-1 stock split as of February 1, 2022. "Net income per share" was calculated assuming that the stock split took place at the beginning of the previous fiscal year.

(2) Consolidated Financial Position

		Total assets	Net assets	Equity ratio	Net assets
		[¥ million]	[¥ million]	[%]	per share [¥]
As of March 31, 2023		159,847	130,745	81.8	2,404.11
As of March 31, 2022		233,024	197,390	84.7	2,769.16
(Reference) Shareholders' equity	As of March 31, 2023: ¥130,745 million	As of March 31, 2022: ¥197,390 million

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JAFCO Group Co., Ltd.

(3) Consolidated cash flows

		Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
		operating activities	investing activities	financial activities	at end of period
		[¥ million]	[¥ million]	[¥ million]	[¥ million]
	For the year ended	(7,245)	69,640	(46,225)	69,481
	March 31, 2023
	For the year ended	(12,958)	748	(43,474)	52,603
	March 31, 2022
2. Dividends

		Dividend per share [¥]		Total		Dividend/
				End of		dividends	Payout ratio	shareholders'
(Record date)	End of 1Q End of 2Q End of 3Q	Total	paid	[consolidated]	equity
the year	[¥ million]		[consolidated]
For the year ended	-	-	-	51.00	51.00	3,635	26.5%	3.0%
March 31, 2022
For the year ended	-	-	-	150.00	150.00	8,157	25.6%	7.8%
March 31, 2023
For the year ending	-	-	-	-	-		-
March 31, 2024 (Forecast)

Notes: The dividend for the year ended March 31, 2023 is based on current plans. The forecast of dividend for the year ending March 31, 2024 is unfixed. The Company set a policy to pay dividends of approximately 3% of shareholders' equity (initial and term-end average value) effective fiscal year ended March 31, 2017, but from the fiscal year ending March 31, 2024 onwards, the policy will be changed to the greater of 3% of shareholders' equity (initial and term-end average value) or 50% of net income.

Dividend/ Shareholders' equity: Dividend per share/ Shareholders' equity per share (initial and term-end average value)

3. Business Forecasts for the Year ending March 31, 2024 (April 1, 2023 - March 31, 2024)

Volatility in stock markets and the IPO environment in Japan and overseas causes performance to fluctuate, as a result of which it is difficult to make meaningful forecasts in earnings. Therefore, instead of announcing projections, the Company makes timely disclosure of quarterly financial results.

*Other Information

1. Changes in significant subsidiaries during this period: None
2. Changes in accounting principles, accounting estimates and correction of prior period errors

• Changes in accounting principles due to revisions to accounting standards: None

② Changes in accounting principles other than ① : None

• Changes in accounting estimates: None

1. ④ Correction of prior period errors: None

2. Number of issued shares (common stock)
   ① Number of issued shares (including treasury shares)

As of March 31, 2023: 56,060,000

As of March 31, 2022: 80,910,000

• Number of treasury shares

As of March 31, 2023:

1,675,979

As of March 31, 2022: 9,628,015

• Average number of shares

Year ended March 31, 2023:	69,126,546
Year ended March 31, 2022:	78,338,168

Note: The Company conducted a 3-for-1 stock split as of February 1, 2022. "Average number of shares" was calculated assuming that the stock split took place at the beginning of the previous fiscal year.

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JAFCO Group Co., Ltd.

(Reference) Summary of Unconsolidated Performance

Unconsolidated Performance for the Year ended March 31, 2023 (April 1, 2022 - March 31, 2023)

(Figures with % indicate the year-on-year rate of change)

(1) Unconsolidated Operating Results

		Net sales	Operating income	Ordinary income	Profit attributable to
		[¥ million]	[%]		[¥ million]	[%]	[¥ million]	[%]	JAFCO Group Co.,
									Ltd. stockholders
									[¥ million]	[%]
For the year ended March	13,156	(50.5)		(4,514)	-	(1,169)	-	42,502	186.3
31, 2023
For the year ended March	26,589	30.3		16,542	98.9	18,099	66.1	14,840	(60.7)
31, 2022
		Net income per		Fully diluted net
		share [¥]		income per share [¥]
For the year ended		614.85				-
March 31, 2023
For the year ended		189.44				-
March 31, 2022

Note: The Company conducted a 3-for-1 stock split as of February 1, 2022. "Net income per share" was calculated assuming that the stock split took place at the beginning of the previous fiscal year.

(2) Unconsolidated Financial Position

	Total assets		Net assets		Equity ratio	Net assets
	[¥ million]		[¥ million]		[%]	per share [¥]
As of March 31, 2023	153,205		126,739		82.7	2,330.45
As of March 31, 2022	225,528		192,558		85.4	2,701.36
(Reference) Shareholders' equity	As of March 31,	2023:	¥126,739 million
	As of March 31, 2022:	¥192,558 million

*These financial results are not subject to audit procedures.

*Cautionary statements with respect to forward-looking statements and other notes

(Access to the financial supplement materials)

The presentation material for the year ended March 31, 2023 will be released on the Company's website on April 26, 2023.

*Note to XBRL

Please note that the names of the English accounts contained in XBRL data, which are available through EDINET and TDNet, may be different from those of the English accounts in our financial statements.

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JAFCO Group Co., Ltd.

1. Outline of Operating Results

(1) Outline of Operating Results

In the consolidated fiscal year ended March 31, 2023, the Company and its consolidated subsidiaries (collectively the "Company Group") posted net sales of ¥14,073 million, (down 49.2% from ¥27,677 million for the previous fiscal year), operating loss of ¥4,414 million (previous fiscal year: operating income of ¥16,876 million), ordinary loss of ¥3,048 million (previous fiscal year: ordinary income of ¥18,360 million), and profit attributable to JAFCO Group Co., Ltd. stockholders of ¥40,571 million (up 169.0% from ¥15,080 million).

During the current fiscal year, there were five portfolio IPOs (five in Japan and none overseas), but hit by a harsh market environment, investment multiple declined, capital gains remained at a low level and additions to investment loss reserves rose.

During the current fiscal year, the Company sold its entire holdings in Nomura Research Institute, Inc. (23,968,100 shares of common stock, excluding shares less than one unit). As a result, gains on sale of ¥63,796 million were recorded (of which, extraordinary gains were ¥62,783 million).

(Outline of Capital Gains)

There were five portfolio IPOs (five in Japan and none overseas), but hit by a harsh market environment, investment multiple declined and capital gains remained at a low level. Capital gains plunged compared to the previous consolidated fiscal year, when there was a major IPO.

				(Millions of Yen)
		Year ended	Year ended	Comparison (%)
		March 31, 2022	March 31, 2023
		(B) / (A)
		(A)	(B)
Revenues from operational	20,257	9,665	47.7
investment securities (1)
	Proceeds from sale of securities	20,147	9,523	47.3
	Dividend and interest income	109	142	130.7
Cost of operational investment	7,619	5,981	78.5
securities (2)
	Cost of securities sold	6,848	5,508	80.4
	Impairment	770	473	61.4
Capital gains (1) - (2)	12,638	3,684	29.2
Multiple (1) / (2)	2.66	1.62	-
Capital gains on listed shares	12,596	3,026	24.0
Capital gains on unlisted shares	41	658	1,586.4
	Gain on sale	3,142	2,153	68.5
	Loss on sale	3,100	1,495	48.2

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JAFCO Group Co., Ltd.

(Outline of Investment Loss Reserves)

In the current consolidated fiscal year, the Company recorded significant investment losses reserves in the fourth quarter based on the possibility of a deteriorating market environment and market slowdown for exits. As a result, the balance of investment loss reserves increased as additions to investment loss reserves significantly exceeded reversals. The ratio of reserves to the balance of unlisted operational investment securities also rose.

Please note that general reserves were fully reversed at the end of the current consolidated fiscal year due to its small balance.

							(Millions of Yen)
		Year ended			Year ended	Comparison (%)
		March 31, 2022		March 31, 2023
			(B) / (A)
		(A)				(B)
Additions to investment loss reserves (1)	1,108			7,853	708.4
	Company-by-company	1,137			7,969	700.5
	reserves
	(Reversal of) General reserves	(29)			(116)	-
Reversal of investment loss reserves (2)	3,094			2,369	76.6
Net additions = (1)-(2)	(1,985)			5,484	-
(minus figures are reversals)
							(Millions of Yen)
		As of March 31, 2022		As of March 31, 2023
Balance of investment loss reserves		8,969			14,490
	Company-by-company reserves		8,853			14,490
	General reserves		116			-
Ratio to all unlisted operational investment securities		12.1%			17.0%

(Outline of Balance of Operational Investment Securities)

The balance of operational investment securities rose due to steady investment mainly in startup companies.

			(Millions of Yen)
		As of March 31, 2022	As of March 31, 2023
Difference between acquisition cost and market	12,510	10,809
value of listed operational investment securities
	Securities whose market value	12,510	10,990
	exceeds acquisition cost
	Securities whose market value	-	(181)
	falls below acquisition cost
			(Millions of Yen)
		Year ended March 31, 2022	Year ended March 31, 2023
(Reversal of) Unrealized losses on operational	-	181
investment securities

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