RACCOON : Summary of Financial Results (Consolidated)For the First Three Quarters of the Fiscal Year Ending April 30, 2021(Japanese GAAP)

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Summary of Financial Results (Consolidated)

For the First Three Quarters of the Fiscal Year Ending April 30, 2021

(Japanese GAAP)

Listed company: Raccoon Holdings, Inc. Code: 3031

Representative: Isao Ogata, President and Representative Director

Stock Exchange: Tokyo Stock Exchange

URL:http://www.raccoon.ne.jp/

Contact: Satoshi Konno, Executive Vice President of Finance and Director Scheduled date of submission of quarterly report: March 11, 2021

Scheduled date of commencement of dividend payment: - Supplementary documents for quarterly financial results: Yes

Quarterly financial results briefing: Yes (for institutional investors and securities analysts)Tel. [phone]

(Rounded down to the nearest million yen)

1. Consolidated results for the first nine months ended January 31, 2021 (May 1, 2020, through January 31, 2021)

(1) Consolidated operating resultsMarch 4, 2021

(The percentages are year-on-year changes)

Net income

Term ended January 31, 2021	3,246
Term ended January 31, 2020	2,531
(Note) Comprehensive income

Net sales	EBITDA
Million yen	Million yen	%	Million yen	%	Million yen	%	Million yen	%
1,068	68.6	959	82.0	956	80.6	630	86.4
633	36.3	527	33.8	529	36.2	338	42.3

Operating income Ordinary income attributable to owners of parent

% 28.2 17.0

Term ended January 31, 2021 ¥630 million (86.4%)

Term ended January 31, 2020 ¥338 million (42.3%)

(Note) EBITDA = Operating income + depreciation + amortization of goodwill (+ equity in earnings of affiliates)Net income per shareNet income per share

Term ended January 31, 2021

Term ended January 31, 2020

(2) Consolidated financial position

As of January 31, 2021

As of April 30, 2020 (Reference) Shareholders' equity

(diluted)

29.18 18.10

Yen

Total assets

Net assets

Million yen

Yen 28.60 17.86

Equity ratio

Million yen

Net assets per share

12,640 13,600

As of January 31, 2021 As of April 30, 2020

5,662 3,999 ¥5,638 million ¥3,988 million

% 44.6 29.3

Yen 252.16 197.68

2. Dividends
Dividend per share
End of Q1	End of Q2	End of Q3	Year end	Annual
Fiscal year ended April 30, 2020 Fiscal year ending April 30, 2021	Yen - -	Yen 0.00 8.00	Yen - -	Yen 6.50	Yen 6.50
Fiscal year ending April 30, 2021 (forecast)	8.00	16.00
(Note) Revisions to dividend forecasts announced most recently: None 3. Forecast of consolidated results for the fiscal year ending April 30, 2021 (May 1, 2020, through April 30, 2021)

(The percentages are year-on-year changes)

Net sales

Million yen 4,450

EBITDAOperating income Ordinary income

% 28.0

Million yen

%Million yen

1,330 56.7

1,180 67.1

Full year

~ 4,600

~ 32.3

~ 1,410

~ 66.2

~ 1,270

(Note) Revisions to financial forecasts announced most recently: NoneNet income attributable to owners of parentNet income per share

~ 79.9

%Million yen

1,160

~

1,250

% 63.7

~ 76.4

Million yen

740 64.0

~ 800

~ 77.3

%

Yen 34.61 ~ 37.42

* Notes

• (1) Important changes in subsidiaries during the term (changes in specified subsidiaries resulting in change in the scope of consolidation): None

• (2) Application of accounting specific to the preparation of quarterly consolidated financial statements: None

• (3) Changes in accounting principles and changes or restatements of accounting estimates

  • (i) Changes in accounting policies associated with revisions to accounting standards, etc.: None

  • (ii) Changes in accounting policies other than those specified in (i): None

  • (iii) Changes in accounting estimates: None

  • (iv) Restatement: None

• (4) Number of issued shares (common shares)

  • (i) Number of issued shares (including treasury stock) at the end of the quarter

January 31, 2021

22,361,043 April 30, 2020

20,176,043

• (ii) Number of treasury stock shares at the end of the quarterJanuary 31, 2021

41

April 30, 2020

－

(iii) Average number of issued shares during the termNine months ended January 31, 2021 21,591,827 Nine months ended January 31, 2020 18,676,077 *This financial summary is not subject to the statutory quarterly review by a certified public accountant or audit corporation.

* Explanation about the proper use of results forecasts, and other special notes

(Cautionary note on forward-looking statements)

The forward-looking statements, including results forecasts, contained in this document are based on information the Company has obtained as of today and certain assumptions the Company considers reasonable. The Company does not guarantee its achievement of the forward-looking statements. Actual results may differ significantly depending on a variety of factors. For the assumptions underlying the results forecasts and notes on their use, please refer to 1. Qualitative Information on Results for the First Three Quarters under Review, (3) Explanation of forecasts including consolidated results forecasts on page 5.

(How to obtain supplementary information for quarterly financial results)

Supplementary documents for the quarterly financial results will be disclosed on the TDnet (Timely Disclosure network operated by the Tokyo Stock Exchange) shortly.

• ○ Contents of Accompanying Materials

1. Qualitative Information on Results for the First Three Quarters under Review .......................................................................................4

(1) Explanation of operating results ...........................................................................................................................................................4

(2) Explanation on the financial status .......................................................................................................................................................5

(3) Explanation of forecasts including consolidated results forecasts .......................................................................................................5

2. Quarterly Consolidated Financial Statements and Major Notes ...............................................................................................................6

(1) Quarterly consolidated balance sheets ..................................................................................................................................................6

(2) Quarterly consolidated statements of income and comprehensive income .........................................................................................8

(Quarterly consolidated statements of income) ......................................................................................................................................8

(First three quarters under review) .....................................................................................................................................................8

(Quarterly consolidated statements of comprehensive income) ............................................................................................................9

(First three quarters under review) .....................................................................................................................................................9

(3) Notes on quarterly consolidated financial statements ........................................................................................................................10

(Notes regarding going concern assumptions) .....................................................................................................................................10

(Notes in the case of significant changes in amount of shareholders' equity) ....................................................................................10

(Additional information) .......................................................................................................................................................................10

(Segment information) ..........................................................................................................................................................................11

(Significant subsequent events) ............................................................................................................................................................11

1. Qualitative Information on Results for the First Three Quarters under Review

(1) Explanation of operating results

During the first three quarters under review (May 1, 2020, through January 31, 2021), the Japanese economy experienced a deterioration in business confidence from the impact of stagnating economic activities with the second state of emergency declared by the government due to the spread of the novel coronavirus (COVID-19) and remained in a difficult situation. In terms of the world economy, restrictions on economic activities have been tightened with resurgence and lockdowns occurring in several other countries and the outlook remains uncertain.

Under such circumstances, the Raccoon Group worked to expand the infrastructure services it offers for business-to-business transactions based on the management philosophy of "making corporate activities more efficient and convenient." As inquiries and applications from companies continued to increase in both the EC and Financial businesses under the prolonged COVID-19 pandemic, it would appear that demand for the Company's services, which utilize IT and can prepare for non-face-to-face business activities and continuation of business activities, has increased even further. As a result, consolidated net sales amounted to 3,246,010,000 yen (up 28.2% year on year) in the first three quarters under review.

In terms of expenditures, the ratio of cost of sales for the Financial business was at a low level as a result of reviewing allowance for guarantees, allowance for claim compensation, and allowance for doubtful accounts in consideration of the current situation in which the amount of guarantees it provided is in a declining trend. Although advertising expenses increased by 63.2% year on year due to an increase in cost for promotion, other expenses were at a low level. Consequently, selling, general and administrative expenses increased by 19.1% year on year. As a result, EBITDA stood at 1,068,606,000 yen (up 68.6%), operating income at 959,625,000 yen (up 82.0%), ordinary income at 956,614,000 yen (up 80.6%), and net income attributable to owners of parent at 630,131,000 yen (up 86.4%), all on a year-on-year basis.

Results by segment are as follows:

(i) EC business

In Super Delivery, the mainstay service in the EC business, efforts have been made to increase both new membership and transaction value through improvement in average sale per customer. The Super Delivery service is available for a wide variety of businesses either in or outside Japan, including overseas businesses, on top of domestic retailers and non-retail businesses. Under the prolonged COVID-19 pandemic, the digital shift of corporate activities is progressing further. In order to establish Super Delivery as a tool for corporate wholesale purchasing activities, the Company is currently strengthening promotions and exerting effort to actively acquire members and participating companies. As one part of this initiative, online advertisements were introduced in December 2020. Meanwhile, from November 2020, the Company changed the fee structure for participating companies and began offering a new fee plan which waives the basic fee for posting product information in favor of system usage fees. Through making it easier for companies to list products on Super Delivery by eliminating the basic fee for posting product information, the pace of increase in participating companies is expected to further improve in the future. Furthermore, the number of items displayed will increase as the number of participating companies increases, leading in turn to an increase in the number of member retailers and continuous expansion of transaction value over the medium- to long-term. Consequently, at the end of the third quarter under review, the number of Super Delivery member retailers stood at 204,907 (up 37,840), the number of participating companies counted 2,278 (up 425), and the number of items displayed was 1,494,243 (up 346,952), all compared with the end of the previous fiscal year.

The value of transactions for the third quarter under review decreased due to the sharp decrease in the ratio of masks and sterilization goods, which are considered to be products of special demand in relation to COVID-19, from the first quarter to the second quarter. However, from the second quarter to the third quarter, while demand for masks and sterilization goods settled down, the transaction value of ordinary products in apparel and miscellaneous goods steadily increased, and the overall transaction value of Super Delivery increased by 5.3% on a quarter-on-quarter basis, having changed directions to result in a positive increase. The transaction value of ordinary products in apparel and miscellaneous goods did not display any decrease, remaining on an increasing trend on a quarterly basis for the fiscal year under review. Consequently, the transaction value in the first three quarters under review totaled 14,713,267,000 yen (up 64.3%) with the value of transactions in Japan increasing by 59.8% and the value of transactions overseas increasing by 85.3%, both on a year-on-year basis.

Sales in the EC business stood at 2,017,578,000 yen (up 43.7%), and segment profit was 875,659,000 yen (up 48.0%), both on a year-on-year basis.

(ii) Financial business

In the Paid service, the number of member companies steadily increased to surpass 4,000. The Company has continued its endeavors to improve the operating rate of the acquired member companies and increase sales per company. During the third quarter under review, although the value of transactions decreased for member companies in some industries that were negatively affected by COVID-19, the overall value of transactions increased due to the increase in the number of operations. Accordingly, the value of transactions outside the Group totaled 15,582,383,000 yen (up 9.0%) and the overall value of transactions (including 6,922,408,000 yen of transactions within the Group) stood at 22,504,791,000 yen (up 15.9%), both on a year-on-year basis.

In Guarantee services, against the backdrop of the prolonged COVID-19 pandemic, inquiries from small- to medium-sized companies investigating countermeasures against the risk of bankruptcy and arrears of their business partners have continued to increase for the T&G Credit Guarantee service and the URIHO service. In addition, the pace of increase is accelerating for business collaborations with local financial institutions on which the Company has been working thus far, and there is a tangible sense of the heightened demand for credit guarantee services.

Regarding rent guarantee services, the Company continued its efforts to increase name recognition of its services for both business and residential properties among real estate companies. The Company has been working to reach real estate companies through tenant/residential rental application services and the number of collaborating companies has also steadily increased. Furthermore, the Company fully rolled out sales of the Simple Plan, in which the initial guarantee fee starts at 10% of the rent amount, and began expanding this series nationwide.

Guarantees outstanding at the end of the third quarter under review amounted to 81,973,123,000 yen (20,865,449,000 yen for

RACCOON FINANCIAL, Inc. and 61,107,673,000 yen for RACCOON RENT, Inc.), up 8.4% from the end of the previous fiscal year (up 15.4% from the third quarter of the previous fiscal year). As a result, sales in the Financial business stood at 1,408,595,000 yen (up 11.8% year on year). In terms of expenditures, the ratio of cost of sales for the Financial business was at a low level as a result of reviewing allowance for guarantees, allowance for claim compensation, and allowance for doubtful accounts in consideration of the current situation in which the amount of guarantees it provided is in a declining trend. Consequently, segment profit totaled 425,447,000 yen (up 117.4% year on year).

• (2) Explanation on the financial status

  Total assets at the end of the third quarter under review amounted to 12,640,922,000 yen, down 959,154,000 yen from the end of the previous fiscal year. Current assets decreased 866,105,000 yen to 10,057,307,000 yen. The main factor for the decrease is the decrease of 990,445,000 yen in cash and deposits due to repayment of short-term borrowings despite the increase of 176,354,000 yen in accounts receivable - trade due to increased transactions. Non-current assets decreased 93,048,000 yen to 2,583,615,000 yen. The main factors for the decrease are the recording of 30,256,000 yen in amortization of goodwill, the decrease of 20,043,000 yen in buildings due to depreciation and the decrease of 29,981,000 yen in deferred tax assets.

  Total liabilities at the end of the third quarter under review totaled 6,978,241,000 yen, down 2,622,124,000 yen from the end of the previous fiscal year. Current liabilities decreased 2,466,519,000 yen to 5,679,661,000 yen. The main factor for the decrease is the decrease of 2,640,000,000 yen in short-term borrowings due to repayment. Non-current liabilities decreased 155,604,000 yen to 1,298,580,000 yen. The main factor for the decrease is the decrease of 175,423,000 yen in long-term borrowings due to repayment.

  Total net assets at the end of the third quarter under review totaled 5,662,681,000 yen, up 1,662,969,000 yen from the end of the previous fiscal year. The main factors for the increase are the increase of a total of 1,330,082,000 yen in capital stock and capital surplus due to the exercising of subscription rights to shares and the increase in retained earnings due to the recording of 630,131,000 yen as net income attributable to owners of parent, while retained earnings decreased 310,032,000 yen due to cash dividends paid.

• (3) Explanation of forecasts including consolidated results forecasts

  Consolidated results for the Company generally progressed according to the forecasts. For this reason, the Company made no changes to the results forecasts announced in the previous Summary.

  The forward-looking statements presented above are based on information available to the Company at the time this Summary was prepared and certain assumptions that the Company considers rational. Actual results and the like may differ significantly from these figures due to various uncertain factors.

2. Quarterly Consolidated Financial Statements and Major Notes

(1) Quarterly consolidated balance sheets

(Thousand yen)
End of previous	End of third quarter of the consolidated fiscal year under review (As of January 31, 2021)
consolidated fiscal year
(As of April 30, 2020)
Assets
Current assets
Cash and deposits	6,641,033	5,650,588
Accounts receivable - trade	4,208,093	4,384,448
Rights to claim compensation	43,761	53,141
Supplies	105	258
Prepaid expenses	187,585	147,514

Allowance for doubtful accounts (227,937)

(235,530)

Non-current assets

Buildings, net 585,478

565,434

Accumulated depreciation (3,537)

－

Tools, furniture and fixtures 48,347

55,164

Tools, furniture and fixtures, net 6,331

20,342

Total property, plant and equipment 1,473,950

1,467,917

Total intangible assets 505,534

470,956

Total investments and other assets 697,178

644,741

yen)
Other	70,770	56,886
Total current assets	10,923,413	10,057,307
Property, plant and equipment
Buildings	627,207	622,859
Accumulated depreciation	(41,729)	(57,424)
Vehicles	3,537	－
Vehicles, net	0	－
Accumulated depreciation	(42,015)	(34,821)
Land	882,140	882,140
Intangible assets
Software	191,723	194,108
Software in progress	30,113	23,661
Goodwill	281,579	251,323
Other	2,118	1,862
Investments and other assets
Investment securities	427,740	408,555
Lease and guarantee deposits	15,463	11,263
Deferred tax assets	241,725	211,744
Other	12,249	13,177
Total non-current assets	2,676,664	2,583,615

Total assets

13,600,077

12,640,922

(Thousand yen)
End of previous	End of third quarter of the consolidated fiscal year under review (As of January 31, 2021)
consolidated fiscal year
(As of April 30, 2020)
Liabilities
Current liabilities
Accounts payable - trade	4,365,434	4,568,560
Short-term borrowings	2,640,000	－
Current portion of long-term borrowings	344,996	261,672
Accounts payable - other	77,515	127,177
Income taxes payable	78,073	92,321
Allowance for guarantees	125,073	86,092
Provision for bonuses	74,457	69,459
Provision for sales promotion expenses	13,280	18,470
Deposits received	8,612	42,420
Other	418,737	413,488
Total current liabilities	8,146,180	5,679,661

Thousand yen)

Other 32,160

54,628

Total liabilities 9,600,365

6,978,241

Treasury shares －

(42)

Share acquisition rights 11,317

24,147

Non-current liabilities
Long-term borrowings	1,418,342	1,242,919
Asset retirement obligations	3,682	1,032
Total non-current liabilities	1,454,184	1,298,580
Net assets
Shareholders' equity
Capital stock	1,187,195	1,852,237
Capital surplus	849,051	1,514,092
Retained earnings	1,952,147	2,272,246
Total shareholders' equity	3,988,394	5,638,533
Total net assets	3,999,711	5,662,681

Total liabilities and net assets

13,600,077

12,640,922

(2) Quarterly consolidated statements of income and comprehensive income (Quarterly consolidated statements of income)

(First three quarters under review)

(Thousand yen)
First three quarters of the previous consolidated fiscal year (From May 1, 2019, to January 31, 2020)	First three quarters of the consolidated fiscal year under review (From May 1, 2020, to January 31, 2021)
Net sales	2,531,098	3,246,010
Cost of sales	485,692	477,418
Gross profit	2,045,405	2,768,592
Selling, general and administrative expenses	1,518,282	1,808,967
Operating income	527,123	959,625
Non-operating income
Commission income	1,906	3,556

Other 2,976

3,254

Non-operating expenses

Other 298

743

Ordinary income 529,792

956,614

Office relocation expenses －

10,856

Income before income taxes 529,792

945,758

Net income 338,040

630,131

yen)
Gain on investments in investment partnerships	4,392	14,319
Total non-operating income	9,275	21,130
Interest expenses	3,229	8,931
Commission expenses	1,569	9,572
Taxes and dues	1,509	4,892
Total non-operating expenses	6,607	24,140
Extraordinary losses
Total extraordinary losses	－	10,856
Income taxes	191,751	315,626
Net income attributable to owners of parent	338,040	630,131

(Quarterly consolidated statements of comprehensive income)

(First three quarters under review)

(Thousand yen)
First three quarters of the previous consolidated fiscal year (From May 1, 2019, to January 31, 2020)	First three quarters of the consolidated fiscal year under review (From May 1, 2020, to January 31, 2021)
Net income	338,040	630,131
Comprehensive income	338,040	630,131
(Comprehensive income attributable to)
Comprehensive income attributable to owners of parent	338,040	630,131

yen)

(3) Notes on quarterly consolidated financial statements

(Notes regarding going concern assumptions)

Not applicable

(Notes in the case of significant changes in amount of shareholders' equity)

Capital stock and legal capital surplus increased by 665,041,000 yen respectively, due to the issuance of new shares by exercising of subscription rights to shares and stock options. Consequently, capital stock amounted to 1,852,237,000 yen and legal capital surplus amounted to 1,208,653,000 yen at the end of the third quarter under review.

(Additional information)

(Application of the Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System)

For items for which transition to the group tax sharing system created in the Act for Partial Amendment of the Income Tax Act, etc. (Act No. 8 of 2020) was made and for which the non-consolidated taxation system was reviewed in step with transition to the group tax sharing system, the Company and its consolidated subsidiaries do not apply the provisions in Paragraph 44 of the Implementation Guidance on Tax Effect Accounting (Accounting Standards Board of Japan (ASBJ) Guidance No. 28, February 16, 2018) based on the treatment in Paragraph 3 of the Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System (ASBJ Practical Issues Task Force (PITF) No. 39, March 31, 2020), and the amounts of deferred tax assets and deferred tax liabilities are based on the provisions of the Income Tax Act before amendment.

(Segment information) Segment information

I. First three quarters of the previous consolidated fiscal year (from May 1, 2019, to January 31, 2020)

1. Sales and profits or losses in each reporting segment

(Thousand yen)

Reporting segment	Adjustment (Note 1)	Quarterly consolidated financial statement amount (Note 2)
EC	Financial	Total
Sales Sales to external customers Inter-segment sales and transfers	1,404,270	1,126,827 133,325	2,531,098 133,325	2,531,098
－
－	(133,325)	－
Total	1,404,270	1,260,153	2,664,424	(133,325)	2,531,098
Segment profit	591,520	195,723	787,243	(260,120)	527,123

(Notes) 1. The segment profit adjustment of minus 260,120,000 yen includes company-wide revenues and expenses not distributed to the reporting segments. The company-wide revenues are mostly comprised of management consulting fees and such from each segment and the company-wide expenses are general and administrative expenses and such which are not attributable to reporting segments.

2. Segment profits are adjusted to operating income in the quarterly consolidated statements of income.

2. Items related to impairment loss on non-current assets, goodwill, etc. by reporting segment

Not applicable

II. First three quarters of the consolidated fiscal year under review (from May 1, 2020, to January 31, 2021)

1. Sales and profits or losses in each reporting segment

(Thousand yen)

Reporting segment	Adjustment (Note 1)	Quarterly consolidated financial statement amount (Note 2)
EC	Financial	Total
Sales Sales to external customers Inter-segment sales and transfers	2,017,578	1,228,432 180,163	3,246,010 180,163	3,246,010
－
－	(180,163)	－
Total	2,017,578	1,408,595	3,426,173	(180,163)	3,246,010
Segment profit	875,659	425,447	1,301,107	(341,482)	959,625

(Notes) 1. The segment profit adjustment of minus 341,482,000 yen includes company-wide revenues and expenses not distributed to the reporting segments. The company-wide revenues are mostly comprised of management consulting fees and such from each segment and the company-wide expenses are general and administrative expenses and such which are not attributable to reporting segments.

2. Segment profits are adjusted to operating income in the quarterly consolidated statements of income.

2. Items related to impairment loss on non-current assets, goodwill, etc. by reporting segment

Not applicable

(Significant subsequent events)

Not applicable