MonotaRO : Consolidated Financial Results for the First Six Months of Fiscal Year Ending December 31, 2021

July 30, 2021

Consolidated Financial Results for the First Six Months of Fiscal Year

Ending December 31, 2021 (Six Months Ended June 30, 2021)

Company name: MonotaRO Co., Ltd.

Listing: Tokyo Stock Exchange, First Section

Stock code:

3064

URL: https://www.monotaro.com

Representative:

Masaya Suzuki, President & CEO

Contact:

Tetsuya Koda, Senior Executive Officer, General Manager of Admin. Dept.

Tel: [phone]

Scheduled date to file Quarterly Securities Report: August 10, 2021

Scheduled date of dividend payments: September 10, 2021

Supplementary materials: Yes

Investors meeting: Yes

(Figures are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Six Months Ended June 30, 2021

(January 1, 2021 - June 30, 2021)

(1) Consolidated results of operations

(Percentages show the change from the same period of previous fiscal year)

Net income

Net sales

Operating income

Ordinary income

attributable to

owners of the parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Six months ended Jun. 30, 2021

91,868

22.0

11,898

27.7

11,973

28.2

8,344

27.6

Six months ended Jun. 30, 2020

75,281

19.6

9,318

22.7

9,342

22.8

6,540

23.3

Note: Comprehensive income: Six months ended Jun. 30, 2021: 8,409 million yen (32.3%)

Six months ended Jun. 30, 2020: 6,357 million yen (23.4%)

Net income per share

Diluted net income per share

Yen

Yen

Six months ended Jun. 30, 2021

16.80

16.79

Six months ended Jun. 30, 2020

13.16

13.16

The Company implemented a 2-for-1 share split effective on April 1, 2021 and net income per share and diluted net income per share are stated on the assumption that the share split was implemented at the beginning of the previous fiscal year.

(2) Consolidated financial position

	Total assets	Net assets		Equity ratio
	Millions of yen	Millions of yen	%
As of Jun. 30, 2021	88,114	53,938	60.0
As of Dec. 31, 2020	81,263	47,658	57.5
Reference: Shareholders' equity	Jun. 30, 2021: 52,872 million yen	Dec. 31, 2020: 46,761 million yen

2. Dividends

				Dividends per share
		1Q-end	2Q-end	3Q-end		Year-end	Annual
		Yen	Yen	Yen		Yen	Yen
Year ended Dec. 31, 2020		-	8.50	-		9.50	18.00
Year ending Dec. 31, 2021	(actual)	-	5.75
Year ending Dec. 31, 2021	(forecast)			-		5.75	11.50

Note: Amendments to dividend forecast compared with the most recent disclosure: None

The Company implemented a 2-for-1 share split effective on April 1, 2021, and the interim and year-end dividend for the year ended December 31, 2020 would be equivalent to 4.25 yen and 4.75 yen respectively, and the annual dividend would be 9.00 yen, on the assumption that the share split was implemented at the beginning of the previous fiscal year.

3. Consolidated Forecasts for the Fiscal Year Ending December 31, 2021 (January 1, 2021 - December 31, 2021)

(Percentages show the change from the same period of previous fiscal year)

								Net income		Net income per
	Net sales		Operating income	Ordinary income	attributable to
		share
								owners of the parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen		%	Yen
Full year	194,220		23.4	24,678	25.9	24,738	25.8	17,273		25.4	34.77

Note: Revision of consolidated forecast during this quarter: None

The Company implemented a 2-for-1 share split effective on April 1, 2021 and net income per share is stated on the assumption that the share split was implemented at the beginning of the current fiscal year

4. Others

1. Changes in the number of material subsidiaries resulting in changes in scope of consolidation during the six-month period ended June 30, 2021: None
2. Application of special accounting methods for the preparation of quarterly consolidated financial statements: None
3. Changes in accounting principles and estimates, or retrospective restatements:
4. 1. Changes in accounting principles caused by the revision of accounting standards: None
   2. Changes in accounting principles other than mentioned in 1): None
   3. Changes in estimates: None
   4. Retrospective restatements: None
5. Number of shares outstanding (common shares)
6. 1. Number of shares outstanding at the end of period (including treasury stock)

Jun. 30, 2021:	501,275,000 shares	Dec. 31, 2020:	501,262,000 shares
2) Number of treasury stock at the end of period
Jun. 30, 2021:	4,443,812 shares	Dec. 31, 2020:	4,443,576 shares
3) Average number of shares outstanding during the period
Six months ended Jun. 30, 2021:	496,822,639 shares	Six months ended Jun. 30, 2020:	496,830,924 shares

The Company implemented a 2-for-1 share split effective on April 1, 2021 and the respective numbers of shares above are stated on the assumption that the share split was implemented at the beginning of the previous fiscal year.

This quarterly report of financial results is out of scope from quarterly review procedures conducted by independent auditors.

* Cautionary statement with respect to forward-looking statements

The forecasts above are based on the judgments made in accordance with information currently available. Forecasts therefore include risks and uncertainties. Actual figures may differ from these forecasts due to subsequent changes in the circumstances.

1. Qualitative Information on the Consolidated Financial Statements

(1) Qualitative Information Regarding Consolidated Results of Operations

The Japanese economy during the first six months of the fiscal year ending December 31, 2021 generally continued to be weak with government economic and fiscal policies providing some support, while concerns about the global rebound of the novel coronavirus infectious disease (COVID-19) made the outlook for the future Japanese economy unpredictable.

In this economic environment, we have continually concentrated on acquiring new customers aggressively mainly through internet advertisements (paid listings) and internet search engine optimization (SEO), which can improve our website's position on the search engines. We also conducted promotion activities including direct mail using e-mail and mail flyers, daily special prices, the publication and distribution of catalogs. In terms of catalogs, we newly published REDBOOK vol. 17 Spring Edition in late February, divided into 13 volumes with 180 thousand items and approximately 2.9 million issues available in total.

Furthermore, the total number of our product lineup reached approximately 18 million items in total and 479 thousand items in stock which are available for the same day shipment to meet the increase in demand corresponding to the expansion of our customer base as of the end of the first six months of the fiscal year ending December 31, 2021. In addition, in order to strengthen the logistics base, "Ibaraki Chuo Satellite Center" (total floor area of about 49,000 m2), which has both a warehousing function for imported items and a shipping function for high-demand items, started its operation in March.

In addition, in relation to the sales of MRO products to large customers through the integrated purchase systems, both the number of customers and the amount of sales steadily increased.

Consequently, we have successfully obtained 653,104 newly registered accounts for the first six months of the fiscal year ending December 31, 2021 and the number of registered accounts totaled 6,153,878 as of the end of the first six months of the fiscal year ending December 31, 2021.

In addition, NAVIMRO, which is our Korean subsidiary, also aggressively engaged in acquiring new customers mainly through paid listings and focused on increasing both its product lineup and the number of products in stock in order to expand its customer base.

All of our efforts mentioned above resulted in net sales of 91,868 million yen (22.0% increase from the same period of the previous fiscal year), operating income of 11,898 million yen (27.7% increase from the same period of the previous fiscal year), ordinary income of 11,973 million yen (28.2% increase from the same period of the previous fiscal year), and net income attributable to owners of the parent of 8,344 million yen, a corresponding 27.6% increase.

(2) Qualitative Information Regarding Consolidated Financial Position

Total assets as of June 30, 2021 (the end of the first six months of the fiscal year ending December 31, 2021) amounted to 88,114 million yen, an increase of 6,851 million yen from the end of the previous fiscal year. This was attributable to increases of 5,748 million yen, 2,516 million yen and 2,208 million yen in Buildings, Merchandise and notes and accounts receivable- trade, respectively, despite a decrease of 8,339 million yen in cash and deposits.

On the other hand, total liabilities as of June 30, 2021 amounted to 34,176 million yen, an increase of 571 million yen from the end of the previous fiscal year. This was due mainly to an increase of 2,408 million yen in accounts payable-trade, despite decreases of 1,483 million yen and 614 million yen in accrued consumption taxes and lease obligations, respectively.

Total net assets amounted to 53,938 million yen, an increase of 6,280 million yen from the end of the previous fiscal year. This was largely due to net income attributable to owners of the parent of 8,344 million yen offset by dividend payments of 2,359 million yen for the first six months of the fiscal year ending December 31, 2021.

As a result, the equity ratio as of June 30, 2021 was 60.0%, up 2.5 percentage points from the end of the previous fiscal year.

(3) Forecast for the Fiscal Year Ending December 31, 2021

Our consolidated financial results for the first six months of this fiscal year were almost in line with our plan. Therefore, the consolidated forecast for the fiscal year ending December 31, 2021, disclosed on February 2, 2021, has not been changed at this time.

2. Consolidated Quarterly Financial Statements

(1) Consolidated quarterly balance sheets

Accounts											(In millions of yen)
				As of Dec. 31, 2020					As of Jun. 30, 2021
Assets
Current assets
Cash and deposits	18,843		10,504
Notes and accounts receivable-trade	17,766		19,974
Electronically recorded monetary claims	501		910
Merchandise	11,445		13,961
Goods in transit	326		646
Supplies	102		130
Accounts receivable-other	4,901		4,966
Other	459		1,072
Allowance for doubtful accounts	(82)		(89)
Total current assets				54,264				52,077
Noncurrent assets
Property, plant and equipment
Buildings, net	4,285		10,033
Leased assets, net	3,792		3,553
Other, net	11,009		13,222
Total property, plant and equipment			19,086			26,809
Intangible assets
Goodwill			803			786
Other	4,025		5,147
Total intangible assets			4,829			5,934
Investments and other assets
Guarantee deposits	1,478		1,733
Other	1,652		1,605
Allowance for doubtful accounts	(49)		(46)
Total investments and other assets		3,081			3,293
Total noncurrent assets		26,998			36,036
Total assets		81,263			88,114
Liabilities
Current liabilities
Accounts payable-trade	11,643		14,047
Lease obligations	659		47
Accounts payable-other	3,931		4,127
Income taxes payable	4,185		3,851
Provision for employees' bonuses	104		115
Provision for directors' bonuses	45						－
Provision for accident related loss	9		18
Other	1,962		569
Total current liabilities		22,542			22,777
Noncurrent liabilities
Long-term loans payable	9,000		9,000
Lease obligations	591		588
Net defined benefit liability	345		394
Other	1,124		1,415
Total noncurrent liabilities		11,062			11,398
Total liabilities		33,604			34,176
Net assets
Shareholders' equity
Capital stock	1,993		2,000
Capital surplus	816		917
Retained earnings	44,311		50,296
Treasury stock	(315)		(413)
Total shareholders' equity		46,805			52,800
Accumulated other comprehensive income
Foreign currency translation adjustment	(35)		75
Remeasurements of defined benefit plans	(7)		(4)
Total accumulated other comprehensive income		(43)			71
Subscription rights to shares		72			80
Non-controlling interests	823		985
Total net assets		47,658			53,938
Total liabilities and net assets		81,263			88,114