Pan Pacific International : Summary Report of Consolidated Financial Results For the Fiscal Year Ended June 30, 2022

Summary Report of Consolidated Financial Results

For the Fiscal Year Ended June 30, 2022

(All financial information has been prepared in accordance with accounting principles generally accepted in Japan.)

Pan Pacific International Holdings Corporation

Securities Code No.:	7532
Shares Listed:	Tokyo Stock Exchange
Address:	2-19-10 Aobadai, Meguro-ku, Tokyo
Representative:	Naoki Yoshida, President and CEO
Contact:	Keita Shimizu, Executive Officer and CFO (Phone:[phone])
URL:	https://ppih.co.jp/

(Amounts in million yen are rounded off to the nearest million)

1. Overview of Business Results and Financial Position for the fiscal year ended June 30, 2022 (from July 1, 2021 to June 30, 2022)

(1) Results of Business Operations					(Millions of yen, except per-share data)
		Change	Operating	Change	Ordinary	Change	Profit Attributable	Change
	Net Sales	to Owners of
	(%)	Income	(%)	Income	(%)	(%)
		Parent
Fiscal year ended	1,831,280	7.2	88,688	9.2	100,442	23.3	61,928	15.2
June 30, 2022
Fiscal year ended	1,708,635	1.6	81,232	7.7	81,452	9.2	53,734	7.6
June 30, 2021

(Note) Comprehensive income: 64,081 million yen [10.1%] (FY 2022.6), 58,207 million yen [16.8%] (FY 2021.6)

	Net Income	Net Income	Return on	Ordinary	Operating
	Per Share	Per Share-fully	Income on Total	Income on
	Equity	(%)
	(Yen)	diluted (Yen)	Assets (%)	Net Sales (%)
Fiscal year ended	102.64	102.41	15.3		7.3	4.8
June 30, 2022
Fiscal year ended	84.74	84.52	13.6		6.1	4.8
June 30, 2021

(Reference)Equity in earnings of affiliates:498 million yen (FY 2022.6), 237 million yen (FY 2021.6)

(Note) The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the fiscal year ended June 30, 2022 and each figure for the fiscal year ended June 30, 2022 is the figure after applying the accounting standard and relevant ASBJ regulations.

During the consolidated accounting period for the second quarter of the fiscal year ended June 30, 2022, provisional accounting treatment for business combinations has been finalized. The figures for the fiscal year ended June 30, 2021 reflect the content of the provisional accounting treatment.

(2) Financial Position			(Millions of yen, except per-share data)
		Total Assets	Net assets	Ratio of Shareholders' Equity	Net Assets
		to Total Assets (%)	per Share (Yen)
As of		1,383,678	399,247	28.3	657.75
June 30,2022
June 30,2021		1,370,115	438,628	30.5	659.90

(Reference) Equity: 392,220 million yen (as of June 30, 2022), 418,524 million yen (as of June 30, 2021)

(Note) During the consolidated accounting period for the second quarter of the fiscal year ended June 30, 2022, provisional accounting treatment for business combinations has been finalized. The figures for the fiscal year ended June 30, 2021 reflect the content of the provisional accounting treatment.

(3) The Consolidated Statements of Cash Flows		(Millions of yen)
	Cash Flows from	Cash Flows from	Cash Flows from	Cash and Cash
	Operating Activities	Investing Activities	Financing Activities	Equivalents
Fiscal year ended	95,136	(44,756)	(53,854)	180,418
June 30, 2022
Fiscal year ended	79,143	(78,131)	(28,954)	160,875
June 30, 2021

(Note) During the consolidated accounting period for the second quarter of the fiscal year ended June 30, 2022,provisional accounting treatment for business combinations has been finalized. The figures for the fiscal year ended June 30, 2021 reflect the content of the provisional accounting treatment.

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2. Dividends

	Dividend per share (yen)			Dividends in	Dividend payout		Dividends on net
	Six Months Ended	Year Ended	Total		total (annual,	ratio (consolidated		assets (consolidated
	December 31	June 30		Millions of yen)	basis, %)		basis, %)
Year Ended June 30,	3.00	13.00	16.00	10,147		18.9	2.6
2021
Year Ended June 30,	3.00	14.00	17.00	10,137		16.6	2.6
2022
Year Ending June 30,	4.00	14.00	18.00				―
2023 (Forecast)

3. Consolidated Business Forecast：For the year ending June 30, 2023 (From July 1, 2022 to June 30, 2023)

(Millions of yen, except per-share data)

							Profit		Net Income
		Change	Operating	Change	Ordinary	Change	Attributable	Change
	Net Sales	per
	(%)	Income	(%)	Income	(%)	to Owners of	(%)
		Share(Yen)
							Parent
Six Months Ending	958,300	4.4	53,700	23.0	47,800	7.4	33,000	9.5	55.34
December 31, 2022
Year Ending	1,890,000	3.2	94,000	6.0	82,500	(17.9)	56,900	(8.1)	95.42
June 30, 2023

4. Others

1. Significant changes in the scope of consolidation: Yes

Newly consolidated: 1 company (Pan Pacific International Financial Service Corporation) , Excluded:－

(2) Changes in accounting policies concerning preparation of consolidated financial statements

1. ① Changes in line with revision to accounting standards: Yes

   ② Other changes: None

   ③ Changes in accounting estimates: Yes

   ④ Restatement: None

2. Number of outstanding shares (Common shares)

①	Number of outstanding shares (Treasury shares included)	June 30, 2022	634,378,640 shares
		June 30, 2021	634,239,440 shares
② Number of treasury shares	June 30, 2022	38,073,224 shares
		June 30, 2021	18,924 shares
③	Average number of outstanding shares during the period	June 30, 2022	603,329,167 shares
		June 30, 2021	634,086,639 shares

※This financial summary is not subject to audit conducted by certified public accountants or an audit corporation.

※Explanation regarding the appropriate use of forecasts of business results

The financial forecasts of business results are based on judgments and estimates that have been made using currently available information. By nature, such financial forecasts are subject to uncertainties and risks. Therefore, actual results might be significantly different from the aforementioned forecasts for a variety of reasons, including changes in economic environments related to our business, market trends and foreign currency exchange rates.

※The Company plans to hold a financial result briefing for security analysts and institutional investors on August 12, 2022. Presentation materials for the briefing will be available on the Company's website.

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Consolidated Balance Sheets

		(Millions of yen)
	As of June 30,	As of June 30,
	2021	2022
	Amount	Amount
Assets
Current assets
Cash and deposits	¥157,522	¥176,777
Notes and accounts receivables-trade	21,074	12,728
Accounts receivables - installment	65,491	52,122
Operating loans	7,658	8,115
Merchandise and finished goods	203,416	205,893
Prepaid expenses	7,671	7,904
Deposits paid	4,364	4,768
Other	29,488	20,052
Allowance for doubtful accounts	(1,276)	(1,828)
Total current assets	495,406	486,531
Non-current assets
Property, plant and equipment
Buildings and structures, net	261,481	268,358
Tools, furniture and fixtures, net	32,848	35,022
Other, net	1,517	1,412
Land	317,402	314,711
Construction in progress	7,830	19,649
Right of use assets, net	22,672	25,913
Total property, plant and equipment	643,750	665,065
Intangible assets
Goodwill	55,411	61,759
Other	23,255	24,458
Total intangible assets	78,667	86,217
Investments and other assets
Investment securities	29,082	27,226
Long-term loan receivables	1,192	966
Long-term prepaid expenses	5,140	4,859
Retirement benefit asset	16,756	17,455
Deferred tax assets	24,558	20,840
Lease and guarantee deposits	73,882	73,225
Other	3,802	3,422
Allowance for doubtful accounts	(2,120)	(2,129)
Total investments and other assets
152,292	145,864
Total non-current assets	874,709	897,146
Total assets
¥1,370,115	¥1,383,678

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		(Millions of yen)
	As of June 30,	As of June 30,
	2021	2022
	Amount	Amount
Liabilities
Current liabilities
Notes and accounts payables - trade	¥149,984	¥152,885
Short-term loan payables	1,500	－
Current portion of long-term loan payables	33,613	26,918
Current portion of bonds	22,566	11,421
Payables under fluidity lease receivables	191	－
Accounts payables - other	46,508	49,128
Lease obligations	1,380	1,804
Accrued expenses	25,550	25,182
Deposits received	28,000	13,485
Income taxes payables	11,299	13,492
Provision for point card certificates	5,747	1,935
Contract liabilities	－	11,361
Other
27,211	18,765
Total current liabilities
353,550	326,378
Non-current liabilities
Bond payables	203,976	272,555
Long-term loan payables	271,507	276,201
Lease obligations	21,087	25,471
Asset retirement obligations	24,165	30,338
Negative goodwill	7	－
Other	57,195	53,488
Total non-current liabilities
577,937	658,053
Total liabilities
931,487	984,431
Net assets
Shareholders' equity
Capital stock	23,153	23,217
Capital surplus	17,121	17,376
Retained earnings	376,152	428,044
Treasury shares	(15)	(80,956)
Total shareholders' equity	416,411	387,681
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	1,165	520
Foreign currency translation adjustment	749	3,532
Remeasurements of defined benefit plans	199	487
Total accumulated other comprehensive income
2,113	4,539
Share acquisition rights
216	271
Non-controlling interests	19,888	6,755
Total net assets
438,628	399,247
Total liabilities and net assets	¥1,370,115	¥1,383,678

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Consolidated Statements of Income

		(Millions of yen)
	Fiscal year ended	Fiscal year ended
	June 30, 2021	June 30, 2022
	Amount	Amount
Net sales	¥1,708,635	¥1,831,280
Cost of sales	1,211,400	1,287,892
Gross profit
497,236	543,388
Selling, general and administrative expenses
416,003	454,701
Operating income
81,232	88,688
Non-operating income
Interest and dividend income	617	855
Amortization of negative goodwill	86	7
Share of profit of entities accounted for using equity method	237	498
Foreign exchange gains	1,580	15,468
Other	4,426	4,145
Total non-operating income	6,945	20,973
Non-operating expenses
Interest expenses paid on loans and bonds	5,704	7,509
Cost of claim's liquidation	49	1
Commission fee	61	450
Other	911	1,260
Total non-operating expenses	6,725	9,219
Ordinary income	81,452	100,442
Extraordinary income
Gain on sales of non-current assets	94	924
Gain on insurance claims	1,269	－
Reversal of provision for environmental measures	1	85
Other	74	95
Total extraordinary income	1,437	1,105
Extraordinary losses
Impairment loss	16,711	5,720
Loss on retirement of non-current assets	1,024	1,433
Loss on closing of stores	630	952
Loss on disaster	76	174
Loss on litigation	－	548
Other	257	692
Total extraordinary losses	18,698	9,519
Profit before income taxes	64,191	92,028
Income taxes - current	19,408	26,812
Income taxes - deferred	(9,977)	3,469
Total income taxes	9,430	30,281
Profit	54,761	61,747
Profit attributable to non-controlling interests	1,026	(182)
Profit attributable to owners of parent	¥53,734	¥61,928

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