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

April 30, 2021

Consolidated Financial Results for the First Three Months of Fiscal Year

Ending December 31, 2021 (Three Months Ended March 31, 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: May 12, 2021

Scheduled date of dividend payments: -

Supplementary materials: Yes

Investors meeting: No

(Figures are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Three Months Ended March 31, 2021

(January 1, 2021 - March 31, 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

%

Three months ended Mar. 31, 2021

46,017

24.6

6,009

33.4

6,083

35.0

4,240

33.9

Three months ended Mar. 31, 2020

36,933

18.9

4,504

26.2

4,506

25.7

3,166

27.0

Note: Comprehensive income: Three months ended Mar. 31, 2021: 4,336 million yen (45.8%)

Three months ended Mar. 31, 2020: 2,975 million yen (21.7%)

Net income per share

Diluted net income per share

Yen

Yen

Three months ended Mar. 31, 2021

8.54

8.53

Three months ended Mar. 31, 2020

6.37

6.37

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 Mar. 31, 2021	83,201	49,908		58.6
As of Dec. 31, 2020	81,263	47,658		57.5
Reference: Shareholders' equity	Mar. 31, 2021: 48,776 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)		-
Year ending Dec. 31, 2021	(forecast)			5.75	-		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
Half year	94,133		25.0	12,041	29.2	12,075	29.2	8,427		28.9	16.96
(accumulated)
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 three-month period ended March 31, 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)

Mar. 31, 2021:	501,262,000 shares	Dec. 31, 2020:	501,262,000 shares
2) Number of treasury stock at the end of period
Mar. 31, 2021:	4,443,576 shares	Dec. 31, 2020:	4,443,576shares
3) Average number of shares outstanding during the period
Three months ended Mar. 31, 2021:	496,818,424 shares	Three months ended Mar. 31, 2020:	496,844,424 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 three 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 spread 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 489 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 three 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 333,820 newly registered accounts for the first three months of the fiscal year ending December 31, 2021 and the number of registered accounts totaled 5,834,594 as of the end of the first three 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 46,017 million yen (24.6% increase from the same period of the previous fiscal year), operating income of 6,009 million yen (33.4% increase from the same period of the previous fiscal year), ordinary income of 6,083 million yen (35.0% increase from the same period of the previous fiscal year), and net income attributable to owners of the parent of 4,240 million yen, a corresponding 33.9% increase.

(2) Qualitative Information Regarding Consolidated Financial Position

Total assets as of March 31, 2021 (the end of the first three months of the fiscal year ending December 31, 2021) amounted to 83,201 million yen, an increase of 1,938 million yen from the end of the previous fiscal year. This was attributable to increases of 5,851 million yen, 2,564 million yen and 1,401 million yen in Buildings, notes and accounts receivable-trade and Machinery and equipment, respectively, despite a decrease of 8,855 million yen in cash and deposits.

On the other hand, total liabilities as of March 31, 2021 amounted to 33,293 million yen, a decrease of 311 million yen from the end of the previous fiscal year. This was due mainly to decreases of 2,328 million yen and 1,422 million yen in income taxes payable and accrued consumption taxes, respectively, despite increases of 2,852 million yen and 998 million yen in accounts payable-trade and accounts payable-other, respectively.

Total net assets amounted to 49,908 million yen, an increase of 2,249 million yen from the end of the previous fiscal year. This was largely due to net income attributable to owners of the parent of 4,240 million yen offset by dividend payments of 2,359 million yen for the first three months of the fiscal year ending December 31, 2021.

As a result, the equity ratio as of March 31, 2021 was 58.6%, up 1.1 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 three 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 Mar. 31, 2021
Assets
Current assets
Cash and deposits	18,843		9,988
Notes and accounts receivable-trade	17,766		20,330
Electronically recorded monetary claims	501		144
Merchandise	11,445		11,973
Goods in transit	326		419
Supplies	102		200
Accounts receivable-other	4,901		4,701
Other	459		618
Allowance for doubtful accounts	(82)		(82)
Total current assets		54,264					48,294
Noncurrent assets
Property, plant and equipment
Buildings, net	4,285		10,136
Leased assets, net	3,792		3,658
Other, net	11,009		12,458
Total property, plant and equipment		19,086			26,253
Intangible assets
Goodwill	803		817
Other	4,025		4,795
Total intangible assets		4,829			5,613
Investments and other assets
Guarantee deposits	1,478		1,538
Other	1,652		1,547
Allowance for doubtful accounts	(49)		(45)
Total investments and other assets		3,081				3,040
Total noncurrent assets		26,998				34,907
Total assets		81,263				83,201
Liabilities
Current liabilities
Accounts payable-trade	11,643		14,496
Lease obligations	659		26
Accounts payable-other	3,931		4,929
Income taxes payable	4,185		1,856
Provision for employees' bonuses	104		250
Provision for directors' bonuses	45					－
Provision for accident related loss	9		9
Other	1,962		509
Total current liabilities		22,542				22,078
Noncurrent liabilities
Long-term loans payable	9,000		9,000
Lease obligations	591		590
Net defined benefit liability	345		373
Other	1,124		1,251
Total noncurrent liabilities		11,062				11,214
Total liabilities		33,604				33,293
Net assets
Shareholders' equity
Capital stock	1,993		1,993
Capital surplus	816		816
Retained earnings	44,311		46,191
Treasury stock	(315)		(315)
Total shareholders' equity		46,805				48,686
Accumulated other comprehensive income
Foreign currency translation adjustment	(35)		96
Remeasurements of defined benefit plans	(7)		(6)
Total accumulated other comprehensive income		(43)				90
Subscription rights to shares		72			84
Non-controlling interests	823		1,046
Total net assets		47,658			49,908
Total liabilities and net assets		81,263			83,201

（2） Consolidated quarterly statements of (comprehensive) income

											(In millions of yen)
Accounts					Three months period					Three months period
				ended Mar. 31, 2020					ended Mar. 31, 2021
Net sales	36,933		46,017
Cost of sales	26,462		32,706
Gross profit				10,470				13,311
Selling, general and administrative expenses				5,965				7,301
Operating income				4,504				6,009
Non-operating income
Interest income	6		11
Foreign exchange gains	7		37
Gain on sale of materials	2		3
Differences in consumption taxes, etc.					－	37
Other	15		11
Total non-operating income		31			101
Non-operating expenses
Interest expenses	10		8
Loss on disposal of inventories	7		10
Accident related loss	6		3
Other	5		4
Total non-operating expenses		29			27
Ordinary income		4,506			6,083
Extraordinary income
Gain on sales of fixed assets	0		0
Total extraordinary income		0			0
Extraordinary loss
Loss on disposal of fixed assets	0		6
Total extraordinary losses		0			6
Income before income taxes		4,506			6,077
Income taxes-current		1,363			1,776
-deferred	39		105
Total income taxes		1,403			1,881
Net income		3,103			4,195
Net income attributable to:
owners of the parent	3,166		4,240
non-controlling interests	(62)		(45)
Other comprehensive income
Foreign currency translation adjustment	(125)		140
Remeasurements of defined benefit plans	(2)		1
Total other comprehensive income		(128)			141
Comprehensive income		2,975			4,336
Comprehensive income attributable to:
owners of the parent	3,079		4,321
non-controlling interests	(104)		15