Nikkon : Summary of Consolidated Financial Results for the Six Months Ended September 30,2021

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results for the Six Months Ended September 30, 2021 (Based on Japanese GAAP)

Company name:	NIKKON Holdings Co., Ltd.
Stock exchange listing:	Tokyo
Stock code:	9072	URL http://www.nikkon-hd.co.jp
Representative:	President & Representative Director	Masakatsu Kuroiwa
Inquiries:	Director, Managing Executive Officer, and	Yasunori Matsuda
General Manager of Accounting Department
Scheduled date to file Quarterly Securities Report:	November 12, 2021
Scheduled date to commence dividend payments:	December 7, 2021
Preparation of supplementary material on quarterly financial results:	No
Holding of quarterly financial results meeting:	Yes

November 5, 2021

TEL [phone]

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended September 30, 2021 (from April 1, 2021 to September 30, 2021)

(1) Consolidated operating results (cumulative)

Percentages indicate year-on-year changes

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

% Millions of yen

% Millions of yen

%

Six months ended September 30,

94,614

10.5

9,262

31.7

9,952

25.9

6,542

25.9

2021

Six months ended September 30,

85,631

(15.6)

7,033

(35.8)

7,905

(32.5)

5,194

(43.7)

2020

Note: Comprehensive income Six months ended September 30, 2021

¥6,412 million

[1.1%]

Six months ended September 30, 2020

¥6,343 million

[(13.0)%]

Earnings per share

Diluted earnings per share

Yen

Yen

Six months ended September 30,

99.47

99.19

2021

Six months ended September 30,

79.02

78.76

2020

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen

%

As of September 30, 2021

321,881

212,461

65.9

As of March 31, 2021

322,139

208,290

64.5

Reference: Equity

As of September 30, 2021

¥212,016 million

As of March 31, 2021

¥207,747 million

2. Cash dividends

Annual dividends per share

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2021



33.00



34.00

67.00

Year ending March 31, 2022



34.00

Year ending March 31, 2022



35.00

69.00

(Forecast)

Note: Revisions to the forecasts most recently announced: No

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3. Forecast of consolidated financial results for the year ending March 31, 2022 (from April 1, 2021 to March 31, 2022)

Percentages indicate year-on-year changes

			Net sales			Operating profit		Ordinary profit		Profit attributable to	Earnings per share
							owners of parent
			Millions of yen	%		Millions of yen	%		Millions of yen	%	Millions of yen	%		Yen
	Full year		200,000		9.6		21,000		15.4		22,400		8.9		15,000		3.1		228.19
Note: Revisions to the forecasts most recently announced: No
4. Notes
	(1) Changes in significant subsidiaries during the six months ended September 30, 2021			No
	(changes in specified subsidiaries resulting in the change in scope of consolidation):
	(2) Application of special accounting methods for preparing quarterly consolidated financial statements:	Yes

Note: For details, please refer to "Application of special accounting for preparing quarterly consolidated financial statements" of "2. Quarterly consolidated financial statements and significant notes thereto, (4) Notes to quarterly consolidated financial statements" on page 122 of the attached documents.

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
Changes in accounting policies due to other reasons:			No
Changes in accounting estimates:				No
Restatement of prior period financial statements:				No
Note: For details, please refer to "Changes in accounting policies" of "2. Quarterly consolidated financial statements and significant
	notes thereto, (4) Notes to quarterly consolidated financial statements" on page 122 of the attached documents.
(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
	As of September 30, 2021	68,239,892	shares	As of March 31, 2021			68,239,892	shares
Number of treasury shares at the end of the period
	As of September 30, 2021	2,445,437	shares	As of March 31, 2021			2,506,469	shares
Average number of shares outstanding during the period
	Six months ended September 30, 2021	65,768,773	shares	Six months ended September 30, 2020		65,733,493	shares

Note: The number of treasury shares at the end of the period and the number of treasury shares excluded from the calculation of the average number of shares outstanding during the period include shares of the Company held by a trust whose beneficiaries are Directors (26,900 shares as of September 30, 2021).

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of forecasts of financial results, and other special matters
  Forward-looking statements, including financial results forecasts stated in these materials, are based on information currently available to the Company and certain assumptions deemed reasonable. Actual financial and other results may differ substantially from the statements herein due to various factors.

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Index of attached documents
1. Qualitative information regarding results for the six months.............................................................................	4
(1)	Explanation of operating results...................................................................................................................	4
(2)	Explanation of financial position .................................................................................................................	4
(3)	Explanation of forward-looking statements, including forecasts of consolidated financial results .............	5
2. Quarterly consolidated financial statements and significant notes thereto.........................................................	6
(1)	Consolidated balance sheets.........................................................................................................................	6
(2)	Consolidated statements of income (cumulative) and consolidated statements of comprehensive income
	(cumulative) .................................................................................................................................................	8
(3)	Consolidated statements of cash flows ......................................................................................................	10
(4)	Notes to quarterly consolidated financial statements .................................................................................	12
	(Notes on going concern assumption)........................................................................................................	12
	(Notes on significant changes in the amount of shareholders' equity).......................................................	12
	(Application of special accounting for preparing quarterly consolidated financial statements) ................	12
	(Changes in accounting policies) ...............................................................................................................	12
	(Segment information, etc.) .......................................................................................................................	13

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1. Qualitative information regarding results for the six months

1. Explanation of operating results
   In the first six months of the fiscal year ending March 31, 2022, the Japanese economy continued to experience harsh conditions despite continuing signs of recovery amid the continuing impact of the novel coronavirus disease (COVID-19). Furthermore, although vaccinations are progressing, the outlook for the economy has remained unclear as social and economic activities have been unable to recover completely.
   In the logistics industry, the severe business situation has continued due to a chronic labor shortage and intensified competition in addition to rising fuel prices and other factors.
   Under these circumstances, the Group's consolidated sales for the six months ended September 30, 2021 were 94,614 million yen, up 10.5% from the same period of the previous fiscal year, mainly due to a recovery in business volume.
   Operating profit was 9,262 million yen, up 31.7%, due to the effect of higher sales and efficiency improvement of operations. Ordinary profit was 9,952 million yen, up 25.9%, following the increase in operating profit.
   Profit attributable to owners of parent was 6,542 million yen, up 25.9%.

Business results by segment are as follows.

1. Transportation business

Sales were 42,888 million yen, up 9.8% from the same period of the previous fiscal year, mainly due to a recovery in the volume of cargo handled. Operating profit was 2,089 million yen, up 41.9%, mainly due to the effect of higher sales and improvement of transportation efficiency, despite rising fuel prices.

1. Warehousing business

Sales were 16,635 million yen, up 5.1% from the same period of the previous fiscal year, due to an increase in the volume of cargo stored, which is the result of our ongoing efforts in Japan and overseas to establish or expand warehouses. Operating profit was 3,745 million yen, up 1.0% due to an increase in depreciation, etc., despite the effect of higher sales.

1. Packaging business

Sales were 21,351 million yen, up 16.1% from the same period of the previous fiscal year, mainly due to a recovery in business volume. Operating profit was 1,428 million yen, up 249.7 %, mainly due to the effect of higher sales and efficiency improvement of operations.

1. Testing business

Sales were 10,360 million yen, up 3.9% from the same period of the previous fiscal year, mainly due to a recovery in business volume. Operating profit was 1,521 million yen, up 32.9%, due to the effect of higher sales and efficiency improvement of operations.

(2) Explanation of financial position

1. Assets

Current assets at the end of the second quarter of the fiscal year ending March 31, 2022 totaled 68,553 million yen, a decrease of 5,989 million yen from the end of the previous fiscal year. The decrease mainly came from decreases of 2,917 million yen in cash and deposits and 2,383 million yen in notes and accounts receivable - trade. Non-current assets totaled 253,328 million yen, an increase of 5,731 million yen from the end of the previous fiscal year. The increase mainly came from an increase of 6,041 million yen in property, plant and equipment due to the establishment and expansion of warehouses in Yorii Town (Saitama Prefecture), Kani City (Gifu Prefecture) and Niigata City (Niigata Prefecture), the acquisition of a building as a leased asset in Inzai City (Chiba Prefecture), and the introduction of testing equipment for a research and development building in Haga Town (Tochigi Prefecture).

As a result, total assets were 321,881 million yen, a decrease of 257 million yen from the end of the previous fiscal year.

1. Liabilities

Current liabilities at the end of the quarter under review totaled 38,657 million yen, a decrease of 7,612 million yen from the end of the previous fiscal year. The decrease mainly came from decreases of 2,957 million yen in electronically recorded obligations

• non-operating,2,264 million yen in accounts payable - other, recorded under other. Non-current liabilities totaled 70,763 million yen, an increase of 3,183 million yen from the end of the previous fiscal year. The increase mainly came from an increase of 3,547 million yen in lease obligations on the building acquired in Inzai City (Chiba Prefecture).
  As a result, total liabilities were 109,420 million yen, a decrease of 4,428 million yen from the end of the previous fiscal year.

1. Net assets

Net assets at the end of the quarter under review were 212,461 million yen, an increase of 4,170 million yen from the end of the previous fiscal year. This increase mainly came from an increase of 4,248 million yen in retained earnings.

As a result, the equity ratio at the end of the period under review was 65.9% (64.5% at the end of the previous fiscal year).

1. Cash flows

Cash and cash equivalents (hereinafter referred to as "cash") at the end of the quarter under review were 27,471 million yen, a decrease of 2,895 million yen from the end of the previous fiscal year.

Net cash provided by operating activities was 13,438 million yen, an increase of 3,441 million yen from the same period of the previous fiscal year. As main factors of increase, profit before income taxes and cash flow from increase (decrease) in other liabilities rose 2,011 million yen and 1,570 million yen, respectively.

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Net cash used in investing activities was 11,894 million yen, a decrease of 447 million yen from the same period of the previous fiscal year. As main factors, purchase of property, plant and equipment fell 154 million yen and proceeds from sale of investment securities rose 91 million yen.

Net cash used in financing activities was 4,332 million yen, a difference of 19,855 million yen compared with net cash provided by financing activities in the same period of the previous fiscal year. This is mainly due to proceeds from issuance of bonds decreasing by 20,000 million yen.

1. Explanation of forward-looking statements, including forecasts of consolidated financial results
   As for the forecast of consolidated financial results, there is no change to the forecasts announced on May 12, 2021.
   The forecasts are based on information available to the Company on the announcement date of this material, actual financial results may differ from the statements herein due to various factors.

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