RACCOON : Summary of Financial Results (Consolidated) For the Fiscal Year Ended April 30, 2022 (Japanese GAAP)

Summary of Financial Results (Consolidated)

For the Fiscal Year Ended April 30, 2022

(Japanese GAAP)

																																		June 10, 2022
Listed company: Raccoon Holdings, Inc.											Stock Exchange: Tokyo Stock Exchange
Code:	3031																URL: http://www.raccoon.ne.jp/
Representative:	Isao Ogata, President and Representative Director
Contact:	Satoshi Konno, Executive Vice President of Finance and Director			Tel. [phone]
Scheduled date of ordinary general meeting of shareholders: July 23, 2022
Scheduled date of commencement of dividend payment: July 25, 2022
Scheduled date of submission of annual securities report: July 28, 2022
Supplementary documents for financial results: Yes
Financial results briefing: Yes (for institutional investors and securities analysts)
																				(Rounded down to the nearest million yen)
1. Consolidated results for the fiscal year ended April 30, 2022 (May 1, 2021 through April 30, 2022)
(1) Consolidated operating results															(The percentages are year-on-year changes)
																																		Net income
						Net sales				EBITDA	Operating income			Ordinary income	attributable to owners
																																		of parent
						Million		%			Million		%			Million	%				Million			%			Million			%
						yen					yen				yen						yen					yen
Year ended April 30, 2022			4,789		9.7			1,268		(5.3)		1,126		(5.9)				1,135			(6.7)			354		(55.7)
Year ended April 30, 2021			4,364		25.5			1,339		57.8		1,196		69.4				1,216		71.8			800		77.6
(Note) Comprehensive income			Year ended April 30, 2022		¥354 million ((55.7)%)
						Year ended April 30, 2021		¥800 million (77.6%)
						Net income per	Net income per share	Return on			Ordinary income		Operating income
						share				(diluted)		equity		to total assets ratio		to net sales ratio
									Yen							Yen			%										%					%
Year ended April 30, 2022						15.97					15.90			6.7										8.6					23.5
Year ended April 30, 2021						36.78					36.19			17.2										9.3					27.4
(Reference) Equity in earnings of affiliates	Year ended April 30, 2022 ¥- million
									Year ended April 30, 2021 ¥- million
(2) Consolidated financial position
						Total assets				Net assets			Equity ratio				Net assets per share
									Million yen						Million yen									%								Yen
As of April 30, 2022						14,060							5,364									37.6							238.12
As of April 30, 2021						12,452							5,342									42.6							239.23
(Reference) Shareholders' equity				As of April 30, 2022		¥5,289 million
									As of April 30, 2021		¥5,310 million
(3) Consolidated cash flows
					Operating activities		Investing activities	Financing activities		Cash and cash equivalents
										at end of year
									Million yen						Million yen							Million yen							Million yen
As of April 30, 2022						1,856								(197)						(1,128)							5,333
As of April 30, 2021						184								(43)						(1,972)							4,802
2. Dividends
										Dividend per share									Total amount		Payout ratio		Dividend on
			End of Q1		End of Q2		End of Q3		Year end	Annual				of dividends		(consolidated)		equity ratio
										(consolidated)
						Yen		Yen				Yen			Yen	Yen				Million yen					%		%
Fiscal year ended April 30, 2021			-		8.00			-			9.00	17.00					380					46.2		7.8
Fiscal year ended April 30, 2022			-		10.00			-			10.00	20.00					447					125.2		8.4
Fiscal year ending April 30, 2023			-		9.00			-			9.00	18.00											49.0
(forecast)
3. Forecast of consolidated results for the fiscal year ending April 30, 2023 (May 1, 2022 through April 30, 2023)
																				(The percentages are year-on-year changes)
																													Net income	Net income
		Net sales				EBITDA	Operating income		Ordinary income			attributable to
									per share
																													owners of parent
		Million yen		%		Million yen		%		Million yen	%		Million yen		%			Million yen	%			Yen
First half			-		-			-			-				-	-			-				-						-	-			-
Full year		5,500			14.8			1,450			14.3	1,300	15.4		1,300		14.5				810	128.4		36.76

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* Notes

1. Important changes in subsidiaries during the fiscal year (changes in specified subsidiaries resulting in change in the scope of consolidation): None
2. Changes in accounting principles and changes or restatements of accounting estimates
3. 1. Changes in accounting policies associated with revisions to accounting standards, etc.: Yes
   2. Changes in accounting policies other than those specified in (i): None
   3. Changes in accounting estimates: None
   4. Restatement: None
4. Number of issued shares (common shares)
5. 1. Number of issued shares (including treasury stock) at the end of the fiscal year

April 30, 2022	22,361,043	April 30, 2021	22,361,043
(ii) Number of treasury stock shares at the end of the fiscal year
April 30, 2022	147,616	April 30, 2021	163,668
(iii) Average number of issued shares during the fiscal year
Year ended April 30, 2022	22,211,025	Year ended April 30, 2021	21,778,030

*This financial summary is not subject to audit procedures 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. Overview of Operating Results, etc., (4) Future prospects" on page 6 of the accompanying materials.

(How to obtain supplementary information for financial results and information on results briefings)

Supplementary documents for the financial results will be disclosed on the TDnet (Timely Disclosure network operated by the Tokyo Stock Exchange) shortly. Additionally, the Company will hold a results briefing session for institutional investors and securities analysts via a live stream on Friday, June 10, 2022. The video of this results briefing session will be provided on the website promptly after the session is held.

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• Contents of Accompanying Materials

1. Overview of Operating Results, etc............................................................................................................................................................	4
(1)	Overview of operating results for the fiscal year under review...........................................................................................................	4
(2)	Overview of the financial status for the fiscal year under review .......................................................................................................	5
(3)	Overview of cash flows for the fiscal year under review.....................................................................................................................	5
(4)	Future prospects.....................................................................................................................................................................................	6
2. Basic Policy on Selection of Accounting Standards ..................................................................................................................................	6
3. Consolidated Financial Statements and Major Notes ................................................................................................................................	7
(1)	Consolidated balance sheets..................................................................................................................................................................	7
(2)	Consolidated statements of income and comprehensive income.........................................................................................................	9
(3)	Consolidated statements of changes in equity....................................................................................................................................	11
(4)	Consolidated statements of cash flows ...............................................................................................................................................	12
(5)	Notes on consolidated financial statements........................................................................................................................................	13
(Notes regarding going concern assumptions).....................................................................................................................................	13
(Changes in accounting policies)..........................................................................................................................................................	13
(Notes in the case of significant changes in amount of shareholders' equity)....................................................................................	13
(Segment information) ..........................................................................................................................................................................	14
(Per share information) .........................................................................................................................................................................	17
(Significant subsequent events) ............................................................................................................................................................	18

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1. Overview of Operating Results, etc.

(1) Overview of operating results for the fiscal year under review

During the fiscal year under review (May 1, 2021 through April 30, 2022), the Japanese economy saw frequent restrictions and relaxations of economic activities according to the infection status of the novel coronavirus (COVID-19). With progress in vaccinations, the economy moved toward the normalization of economic activities to relax restrictions upon taking thorough measures against infections, and started to show signs of recovery. Meanwhile, the outlook remains uncertain due mainly to surging crude oil and raw material prices, a Chinese economic slowdown caused by a zero-COVID policy and a weakening of the yen.

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." During the fourth quarter under review, with a gradual decrease in cases of the Omicron variant, restrictions were eased in stages and domestic economic activities became slightly more active. In addition, as demand for the Company's services continued on the back of the digital shift in B2B transactions, net sales of both the EC business and the Financial business increased. As a result, consolidated net sales for the fiscal year under review were 4,789,984,000 yen (up 9.7% year on year).

In terms of expenditures, cost of sales increased due to an increase in the amount of guarantees provided in the Financial business resulting from a gradual relaxation of credit screening criteria in anticipation of recovery in the domestic economy. Nonetheless, screening criteria have been controlled appropriately and the ratio of cost of sales continued to be lower than levels seen before the COVID-19 pandemic. In addition, advertising expenses increased by 19.9% year on year as the Company continued efforts to enhance promotional activities, and personnel cost increased by 11.0% due to reinforcement of personnel, while other expenses decreased. As a result, selling, general and administrative expenses increased by 12.2% year on year.

As a result, the Company posted EBITDA of 1,268,568,000 yen (down 5.3%), operating income of 1,126,081,000 yen (down 5.9%), and ordinary income of 1,135,109,000 yen (down 6.7%), for the fiscal year under review, all compared on a year-on-year basis. In addition, the Company recorded an impairment loss of goodwill of 147,564,000 yen as extraordinary losses, as a result of reviewing future plans at RACCOON RENT, Inc., a consolidated subsidiary providing a rent guarantee business, in light of a deterioration in the external environment caused by the prolonged COVID-19 pandemic and other factors. As a result, the Company posted net income attributable to owners of parent of 354,661,000 yen (down 55.7% year on year) for the fiscal year under review.

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 gross merchandise value* through improvement in average sale per customer. In the fiscal year under review, the Company strengthened promotional activities aimed at enhancing awareness and increasing the number of customer acquisitions to actively capitalize on the growth in demand on the back of the digital shift of B2B transactions.

As a result, as of the end of the fiscal year under review, the number of Super Delivery members stood at 278,219 (up 58,108), the number of participating companies at 3,171 (up 538), and the number of items displayed at 1,431,200 (down 26,709), all compared with the numbers at the end of the previous fiscal year.

During the fourth quarter under review, with a gradual decrease in cases of the Omicron variant in Japan, restrictions were eased in stages and the number of buying customers steadily increased, causing a steady increase in the national gross merchandise across Japan. Since the gross merchandise value significantly increased owing to products of special demand in relation to COVID-19 in the fiscal year ended April 30, 2021, the gross merchandise value in Japan for the fiscal year ended April 30, 2022 increased only 1.5% year on year, showing a low level of growth. However, the gross merchandise value of ordinary products in Japan excluding transactions in masks and sterilization goods, which are products of special demand, increased by 8.2% year on year. As for the gross merchandise value overseas, both the number of buying customers and average sales per customer increased despite an increase in negative factors such as shipping costs that remained high, delays in delivery due to container shortages, and a deterioration in overseas conditions. Consequently, the gross merchandise value overseas increased by 38.8% year on year.

• To better reflect the nature of transactions facilitated by the Company, what was referred to as "transaction value" in previous materials is now referred to as "gross merchandise value."

As a result, sales in the EC business stood at 2,950,677,000 yen (up 8.5% year on year). In terms of expenditures, the Company continued to implement aggressive promotional activities, resulting in an increase in advertising expenses of 17.3% year on year, while personnel cost increased by 12.7% year on year due to reinforcement of personnel for business expansion. Consequently, segment profit was 1,178,761,000 yen (up 2.6% year on year).

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(ii) Financial business

In the Paid service, the number of member companies continued to steadily increase to surpass 4,500. During the fourth quarter under review, a gradual decrease in cases of the Omicron variant and the continued recovery of the domestic economy helped boost the value of transactions per member company. Consequently, the value of transactions outside the Group totaled 25,600,155,000 yen (up 19.4%) and the overall value of transactions (including 9,050,404,000 yen of transactions within the Group) stood at 34,650,560,000 yen (up 13.1%), both compared on a year-on-year basis, recording double digit growth.

In Credit Guarantee services, the Company has continued to actively work on business collaborations with regional banks, etc., for the T&G Credit Guarantee service and the URIHO service, and the number of collaborations steadily increased. In addition, the Company ran taxi advertising for URIHO aimed at enhancing awareness, reaching out to more companies and enhancing service awareness.

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.

Guarantees outstanding at the end of the fiscal year under review amounted to 97,106,271,000 yen (30,755,223,000 yen for RACCOON FINANCIAL, Inc. and 66,351,047,000 yen for RACCOON RENT, Inc.), up 15.1% from the end of the previous fiscal year. As a result, sales in the Financial business stood at 2,074,871,000 yen (up 10.1% year on year), recording double digit growth. In terms of expenditures, the amount of guarantees provided increased due to the relaxation of credit screening criteria, but screening criteria has been controlled appropriately and the ratio of cost of sales continued to be lower than levels seen before the COVID-19 pandemic. The Company continued its policy of strengthening promotional activities, resulting in advertising expenses increasing by 32.4% year on year. Personnel cost increased by 12.1% year on year due to reinforcement of personnel for business expansion. Consequently, segment profit totaled 431,584,000 yen (down 17.4% year on year).

(2) Overview of the financial status for the fiscal year under review

Total assets at the end of the fiscal year under review amounted to 14,060,831,000 yen, up 1,608,646,000 yen from the end of the previous fiscal year. Current assets increased 1,923,720,000 yen to 11,796,462,000 yen. The main factors causing the increase were the increase of 1,357,701,000 yen in accounts receivable - trade due to increased transactions. Non-current assets decreased 315,074,000 yen to 2,264,368,000 yen. The main factors for the decrease include the decrease of 244,125,000 yen in investment securities due to recording a loss on valuation of investment securities and the decrease of 180,345,000 yen in goodwill mainly as a result of the recording of an impairment loss of goodwill of a subsidiary.

Liabilities at the end of the fiscal year under review totaled 8,696,242,000 yen, up 1,586,333,000 yen from the end of the previous fiscal year. Current liabilities increased 1,770,413,000 yen to 7,629,575,000 yen. The main factor for the increase is the increase of 2,261,344,000 yen in accounts payable - trade due to increased transactions, while accounts payable - other decreased by 495,184,000 yen. Non-current liabilities decreased 184,079,000 yen to 1,066,666,000 yen. The main factor for the decrease is the decrease of 178,336,000 yen in long-term borrowings due to repayment.

Net assets at the end of the fiscal year under review increased 22,313,000 yen from the end of the previous fiscal year to 5,364,588,000 yen. The main factor for the increase is the increase of retained earnings due to recording 354,661,000 yen of net income attributable to owners of parent and the increase of 43,288,000 yen in share acquisition rights due to recording share- based remuneration expenses, offset by the decrease of 49,219,000 yen in treasury shares due to the grant of shares through an employee stock ownership plan (J-ESOP) and the decrease of 424,856,000 yen in retained earnings due to cash dividends paid.

(3) Overview of cash flows for the fiscal year under review

Cash and cash equivalents (the "funds") at the end of the fiscal year under review increased 531,047,000 yen from the end of the previous fiscal year to 5,333,916,000 yen. Cash flows from each activity for the fiscal year under review and their primary factors are as follows:

(Cash flows from operating activities)

Net cash provided by operating activities during the fiscal year under review amounted to 1,856,587,000 yen. The main factor for this is an increase of 2,261,344,000 yen in notes and accounts payable - trade.

(Cash flows from investing activities)

Net cash used in investing activities during the fiscal year under review amounted to 197,447,000 yen. The main factors for this are the recording of 129,347,000 yen as purchase of intangible assets primarily for developing software and the recording of 100,000,000 yen as purchase of investment securities.

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