Senshukai : 〔Delayed〕Summary of Financial Results for the Second Quarter of Fiscal Year 2021

Summary of Financial Results for the Second Quarter of Fiscal Year 2021

(Six Months Ended June 30, 2021)

		[Japanese GAAP]
		July 29, 2021
Company name: SENSHUKAI CO.,LTD.	Stock exchange: Tokyo Stock Exchange, First Section
Stock code:	8165	URL: https://www.senshukai.co.jp
Representative:	Mr. Kenji Kajiwara, President and Representative Director
Inquiries:	Mr. Tetsuya Takahashi, Director, General Manager, Corporates Headquarters

Tel: [phone]

Scheduled date of filing of Quarterly Report: August 11, 2021

Scheduled date of payment of dividend: September 1, 2021

Preparation of supplementary materials for quarterly financial results: Yes

Holding of quarterly financial results meeting: Yes (Only a webcast is planned to prevent the spread of COVID-19)(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 2nd Quarter of 2021 (January 1, 2021 - June 30, 2021)

(1) Consolidated operating results (cumulative)

(Percentages represent changes from the same period of the previous fiscal year)

	Net sales		Operating profit		Ordinary profit		Profit attributable to
				owners of parent
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%
2Q 2021	37,905	(10.2)	473		-	499		-	478		-
2Q 2020	42,226	(3.8)	(563)		-	(2,898)		-	(3,000)		-
Note: Comprehensive income (millions of yen) 2Q 2021: 911 (-%)		2Q 2020: (3,148) (-%)
	Net income per share	Diluted net income per share
		Yen				Yen
2Q 2021		10.41				-
2Q 2020		(74.66)				-

(2) Consolidated financial position

	Total assets		Net assets	Equity ratio	Net assets per share
	Millions of yen		Millions of yen	%	Yen
2Q 2021	52,026		33,495	64.4	714.14
Fiscal Year 2020	63,933		32,088	50.2	699.01
Reference: Shareholders' equity (millions of yen)	2Q 2021: 33,495	Fiscal Year 2020: 32,088

2. Dividends

			Dividend per share
	1Q-end	2Q-end		3Q-end	Year-end	Total
	Yen	Yen		Yen	Yen	Yen
Fiscal Year 2020	-	0.00		-	0.00	0.00
Fiscal Year 2021	-	3.00
Fiscal Year 2021 (forecasts)				-	4.00	7.00

Note: Revision to the most recently announced dividend forecast: None

3. Consolidated Outlook for Fiscal Year 2021 (January 1, 2021 - December 31, 2021)

(Percentages represent changes from the same period of the previous fiscal year)

	Net sales		Operating profit	Ordinary profit		Profit attributable to	Net income per
			owners of parent		share
	Millions of yen		%	Millions of yen	%	Millions of yen		%	Millions of yen		%	Yen
Full Year 2021	76,000		(8.7)	1,000	-	1,100		-	1,150		-	24.76

Note: Revision to the most recently announced consolidated outlook: None

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): Yes

Excluded: 3 (Dears Brain Inc., PLANETWORK CO., LTD., WONDERSTAGE Co., Ltd.)

1. Note: Please refer to "2. Quarterly Consolidated Financial Statements and Notes, (4) Notes to Quarterly Consolidated Financial Statements (Changes in Significant Subsidiaries during the Period)" on page 10 for further information.

2. Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
   Note: Please refer to "2. Quarterly Consolidated Financial Statements and Notes, (4) Notes to Quarterly Consolidated Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)" on page 10 for further information.
3. Changes in accounting policies and accounting-based estimates, and restatements
4. 1. Changes in accounting policies due to revisions in accounting standards, others: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
5. Number of shares outstanding (common shares)
6. 1. Number of shares outstanding at the end of the period (including treasury shares)

2Q 2021:

52,056,993 shares

Fiscal Year 2020:

52,056,993 shares

2) Number of treasury shares at the end of the period

2Q 2021:

5,153,503 shares

Fiscal Year 2020:

6,151,627 shares

3) Average number of shares outstanding during the period

2Q 2021:

45,983,955 shares

2Q 2020:

40,191,510 shares

• This quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
• Cautionary statement with respect to forward-looking statements Cautionary statement with respect to forecasts
  The above projections are based on information available at the time of release of this report. Actual results could differ significantly from these projections due to a variety of factors. For further details regarding the projections, please refer to page 4, "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts and Other Forward-looking Statements."
  How to view supplementary information at the financial results meeting
  There will be no meeting for the presentation of the financial results for the second quarter of 2021 because of the COVID-19 pandemic. A video of this presentation is planned to be posted on the Senshukai website soon. In addition, materials used for this presentation will be disclosed using the Timely Disclosure network (TDnet) and will be posted on the Senshukai website.

	SENSHUKAI CO.,LTD. (8165) Financial Results for the Second Quarter of Fiscal Year 2021
Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Forecasts and Other Forward-looking Statements	4
2. Quarterly Consolidated Financial Statements and Notes	5
(1)	Quarterly Consolidated Balance Sheet	5
(2)	Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comp rehensive
	Income	7
	Quarterly Consolidated Statement of Income
	(For the Six-month Period)	7
	Quarterly Consolidated Statement of Comprehensive Income
	(For the Six-month Period)	8
(3)	Quarterly Consolidated Statement of Cash Flows	9
(4)	Notes to Quarterly Consolidated Financial Statements	10
	(Going Concern Assumption)	10
	(Significant Changes in Shareholders' Equity)	10
	(Changes in Significant Subsidiaries during the Period)	10
	(Important Changes in the Scope of Application of the Equity Method)	10
	(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)	10
	(Additional Information)	10
	(Segment Information)	11

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Second Quarter of Fiscal Year 2021

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

In the first half (January 1 to June 30) of 2021, the business environment remained severe due to restrictions on economic activity and sluggish personal consumption caused by the resurgence of COVID -19. Vaccinations have started, but state of emergency or priority measures to prevent the spread of the infection are still being implemented in some areas and the outlook continues to be uncertain.

In Japan's retail industry, "out-of-home consumption," which involves visiting stores, continues to face a difficult situation. On the other hand, mail-order and online shopping sales are growing steadily. We assume that such changes in consumer values and consumption behavior will not be merely transient or temporary, but irreversible.

In this business environment, sales were down but earnings increased in the mail-order and online shopping business compared with the first half of 2020, as the special demand for stay-at-home consumption caused by the COVID- 19 pandemic settled down and the scale of sales promotion activities was reduced. In addition, following the sale of shares at the end of the first quarter, a subsidiary company in the bridal business was excluded from the Group's scope of consolidation. Net sales in the first half of 2021 were down 10.2% year-over-year to 37,905 million yen. There was an operating profit of 473 million yen compared with an operating loss of 563 million yen in the first half of 2020. Ordinary profit was 499 million yen compared with a loss of 2,898 million yen in the first half of 2020. Profit attributable to owners of parent was 478 million yen compared with a loss of 3 ,000 million yen in the first half of 2020.

Business segment performance was as follows.

From the first quarter of 2021, the credit card business, which was formerly included in the insurance and credit card business segment, has been reclassified and included in the mail -order and online shopping business segment for better coordination to the mail-order and online shopping business. In line with this change, the insurance and credit card business segment has been renamed as the "insurance business" segment. Prior-year segment information has been revised to incorporate this new segment to permit comparisons.

(Mail-order and Online Shopping Business)

Consolidated sales in the mail-order and online shopping business, which is primarily the catalog and the Internet businesses, decreased 5.3% year-over-year to 32,842 million yen in the first half. Operating profit increased 8.8% to 1,331 million yen.

In the first half of 2021, the mail order service was firmly established because of the COVID -19 pandemic. However, the special demand for stay-at-home consumption has settled down from the level seen in the previous year. In addition, the Group scaled down its sales promotion programs implemented in the previous year to expand its customer base. Instead, the Group prioritized measures to encourage its existing members to continue making use of the service. Sales decreased and earnings increased due to the improvement in gross profit margins mainly resulting from the implementation of ongoing operational reforms.

(Bridal Business)

Consolidated subsidiaries Dears Brain Inc. and PLANETWORK CO., LTD., and WONDERSTAGE Co., Ltd. , a wholly owned subsidiary of Dears Brain and a sub-subsidiary of Senshukai, were excluded from the scope of consolidation following the sales of all shares of Dears Brain and PLANETWORK on March 31, 2021. In the first quarter of 2021, when the Group had withdrawn from these businesses, consolidated sales in the bridal business decreased 51.3% year-over-year to 1,733 million yen and there was an operating loss of 1,045 million yen compared with a loss of 505 million yen in the first quarter of 2020.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Second Quarter of Fiscal Year 2021

(Corporates Business)

Consolidated sales in the corporates business, which provides products and services to corporations, decreased 11.7% year-over-year to 2,239 million yen. Operating profit decreased 18.8% to 203 million yen.

Segment sales and earnings decreased as a result of a decline in sales of services to deliver appropriate direct mails and other messages to members of the mail-order and online shopping business.

(Insurance Business)

This business provides support, mainly to Belle Maison members, for choosing the most suitable insurance policies. Consolidated sales decreased 1.8% year-over-year to 174 million yen and operating profit decreased 30.4% to 59 million yen.

(Others)

Consolidated sales in other businesses, which include childcare support business and manufacturing and sales of cosmetics, decreased 2.1% year-over-year to 916 million yen. There was an operating loss of 77 million yen compared with a profit of 16 million yen in the first half of 2020.

(2) Explanation of Financial Position

(Balance sheet position)

Consolidated subsidiaries Dears Brain Inc. and PLANETWORK CO., LTD., and WONDERSTAGE Co., Ltd., a wholly owned subsidiary of Dears Brain and a sub-subsidiary of Senshukai, were excluded from the scope of consolidation following the sales of all shares of Dears Brain and PLANETWORK at the end of the first quarter of 2021.

Main reason for the following decrease in non-current assets, short-term borrowings, long-term borrowings is the effect of the exclusion of these subsidiaries from the consolidation.

Assets totaled 52,026 million yen at the end of the second quarter of 2021, a decrease of 11,907 million yen from the end of 2020.

Current assets decreased 2,324 million yen to 35,287 million yen. The factors included decreases of 1,271 million yen in notes and accounts receivable-trade and 1,123 million yen in accounts receivable-other.Non-current assets decreased 9,582 million yen to 16,738 million yen. The factors included decreases of 8,148 million yen in property, plant and equipment, 648 million yen in intangible assets and 786 million yen in investments and other assets.

Current liabilities decreased 6,263 million yen to 15,066 million yen. The factors included decreases of 3,319 million yen in other and 2,683 million yen in short-term borrowings. Non-current liabilities decreased 7,050 million yen to 3,464 million yen. The main factor was a decrease of 5,630 million yen in long-term borrowings.

Net assets increased 1,407 million yen to 33,495 million yen. The factors included booking of profit attributable to owners of parent of 478 million yen, and a decrease of 572 million yen in treasury shares due to disposal of treasury stock for restricted stock compensation. As a result, the equity ratio was 64.4%.

(Cash flow position)

The balance of cash and cash equivalents at the end of the second quarter of 2021 was 18,830 million yen, a decrease of 762 million yen from the end of 2020.

Operating activities provided net cash of 388 million yen (net cash provided of 113 million yen in the same period of 2020). The main cash inflows were an increase in trade payables of 882 million yen and a decrease in other current assets of 713 million yen. The main cash outflows include a decrease in other current liabilities of 1,294 million yen.

Investing activities provided net cash of 1,486 million yen (net cash used of 681 million yen in the same period of

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