Senshukai : (Delayed) Summary of Financial Results for the First Quarter of Fiscal Year 2021

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

(Three Months Ended March 31, 2021)

		[Japanese GAAP]
		April 30, 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: May 14, 2021

Scheduled date of payment of dividend: -

Preparation of supplementary materials for quarterly financial results: None

Holding of quarterly financial results meeting: None

(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 1st Quarter of 2021 (January 1, 2021 - March 31, 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		%
1Q 2021	18,655	(6.0)	(388)		-	(373)		-	(290)		-
1Q 2020	19,850	(5.3)	(1,001)		-	(1,782)		-	(1,722)		-
Note: Comprehensive income (millions of yen) 1Q 2021: 89 (-%)		1Q 2020: (1,907) (-%)
	Net income per share	Diluted net income per share
		Yen				Yen
1Q 2021		(6.32)				-
1Q 2020		(44.09)				-

(2) Consolidated financial position

	Total assets		Net assets	Equity ratio	Net assets per share
	Millions of yen		Millions of yen	%	Yen
1Q 2021	53,731		32,177	59.9	700.96
Fiscal Year 2020	63,933		32,088	50.2	699.01
Reference: Shareholders' equity (millions of yen)	1Q 2021: 32,177	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		-
Fiscal Year 2021 (forecasts)			3.00		-	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		-	25.05

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, (3) Notes to Quarterly Consolidated Financial Statements (Changes in Significant Subsidiaries during the Period)" on page 9 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, (3) Notes to Quarterly Consolidated Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)" on page 9 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)

1Q 2021:

52,056,993 shares

Fiscal Year 2020:

52,056,993 shares

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

1Q 2021:

6,151,722 shares

Fiscal Year 2020:

6,151,627 shares

3) Average number of shares outstanding during the period

1Q 2021:

45,905,333 shares

1Q 2020:

40,191,545 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
  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."

	SENSHUKAI CO.,LTD. (8165) Financial Results for the First 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 Comprehensive
	Income	7
	Quarterly Consolidated Statement of Income
	(For the Three-month Period)	7
	Quarterly Consolidated Statement of Comprehensive Income
	(For the Three-month Period)	8
(3)	Notes to Quarterly Consolidated Financial Statements	9
	(Going Concern Assumption)	9
	(Significant Changes in Shareholders' Equity)	9
	(Changes in Significant Subsidiaries during the Period)	9
	(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)	9
	(Additional Information)	9
	(Segment Information)	10

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

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

In the first quarter (January 1 to March 31) of 2021, the business environment remained severe due to restrictions on economic activity and sluggish personal consumption caused by the resurgence of COVID -19. The lifting of the second emergency declaration led to a gradual resumption of economic activity, but priority measures to prevent the spread of the infection are still being implemented in some areas, and, with a third declaration of a state of emergency issued in April 2021, 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 sales are growing steadily due to the increase in "stay-at-home consumption." We assume that such changes in consumer values and consumption behavior will not be merely transient or temporary, but irreversible.

In Japan's wedding industry, the situation remains challenging. Although couples who had postponed their wedding receptions are now using our services more, business has not recovered to the pre-pandemic level due to the increasing consumer awareness of issues such as avoiding eating and drinking in large groups.

In such a business environment, sales and earnings increased in the mail-order and online shopping business due to continued use by members of our service following the rebuilding of the customer base in the previous year. However, the decrease in sales and earnings in the bridal business had a significant impact. Net sales in the first quarter of 2021 were down 6.0% year-over-year to 18,655 million yen. There was an operating loss of 388 million yen compared with an operating loss of 1,001 million yen in the first quarter of 2020. Ordinary loss was 373 million yen compared with a loss of 1,782 million yen in the first quarter of 2020. The loss attributable to owners of parent was 290 million yen compared with a loss of 1,722 million yen in the first quarter 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, increased 5.2% year-over-year to 15,337 million yen in the first quarter. There was an operating profit of 531 million yen compared with a loss of 635 million yen in the first quarter of 2020.

In the first quarter of 2021, the Group continued to propose new lifestyles from the customer 's point of view in response to the "stay-at-home consumption" due to the spread of the COVID-19 pandemic. We also developed sales promotion strategies by utilizing the customer base that we rebuilt in the previous year. In addition, sales and earnings increased due to the improvement in gross profit margins resulting from the implementation of ongoing operational reforms.

(Bridal Business)

Consolidated sales in the bridal business, centered on the house wedding business, decreased 5 1.3% year-over-year to 1,733 million yen. There was an operating loss of 1,045 million yen compared with a loss of 505 million yen in the first quarter of 2020.

The big downturns in sales and earnings compared with the first quarter of 2020 were caused by wedding and reception postponements and the suspension of most sales activities because of COVID-19.

Consolidated subsidiaries Dears Brain Inc. and PLANETWORK CO., LTD., and WONDERSTAGE Co., Ltd. , a

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

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. For details, please refer to "Notice of Change in Consolidated Subsidiaries (Transfer of Shares) and Revision s to Consolidated Outlook" released on March 23, 2021 (Japanese version only).

(Corporates Business)

Consolidated sales in the corporates business, which provides products and services to corporations, decreased 10.0% year-over-year to 1,065 million yen. Operating profit decreased 1.0% to 109 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 10.4% year-over-year to 71 million yen and operating profit decreased 44.2% to 13 million yen.

(Others)

Consolidated sales in other businesses, which include childcare support business and manufacturing and sales of cosmetics, increased 0.4% year-over-year to 447 million yen. Operating profit decreased 37.2% to 3 million yen.

(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 53,731 million yen at the end of the first quarter of 2021, a decrease of 10,202 million yen from the end of 2020.

Current assets decreased 73 million yen to 37,539 million yen. The factors included decreases of 945 million yen in notes and accounts receivable-trade, and 847 million yen in accounts receivable-other, while there were increases of 985 million yen in merchandise and finished goods, and 614 million yen in other. Non-current assets decreased 10,128 million yen to 16,192 million yen. The factors included decreases of 8,094 million yen in property, plant and equipment, 860 million yen in intangible assets and 1,173 million yen in investments and other assets.

Current liabilities decreased 3,412 million yen to 17,918 million yen. The factors included decreases of 2,874 million yen in other and 583 million yen in short-term borrowings. Non-current liabilities decreased 6,879 million yen to 3,635 million yen. The main factor was a decrease of 5,445 million yen in long-term borrowings.

Net assets increased 89 million yen to 32,177 million yen. The factors included booking of loss attributable to owners of parent of 290 million yen, and increases of 234 million yen in deferred gains or losses on hedges, 74 million yen in valuation difference on available-for-sale securities, and 70 million yen in foreign currency translation adjustment. As a result, the equity ratio was 59.9%.

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