USEN NEXT : Consolidated Financial Results for the Six Months Ended February 28, 2022

Consolidated Financial Results for the Six Months Ended February 28, 2022

[Japanese GAAP]

April 7, 2022

Company name: USEN-NEXT HOLDINGS Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange

Code number: 9418

URL:https://usen-next.co.jp/

Representative: Yasuhide Uno, President, Representative Director & CEO Contact: Shohei Mabuchi, Managing Director & CFO

Phone: +81-3-6823-7015

Scheduled date of filing quarterly securities report: April 8, 2022 Scheduled date of commencing dividend payments: -

Availability of supplementary briefing materials on quarterly financial results: Available

Schedule of quarterly financial results briefing session: Scheduled (for analysts and institutional investors)

(Amounts are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the Six Months Ended February 28, 2022 (September 1, 2021 - February 28, 2022)

(1) Consolidated Operating Results (% indicates changes from the previous corresponding period.)

(Note) Comprehensive income: Six months ended February 28, 2022: ¥4,434 million [1.1%]

Six months ended February 28, 2021: ¥4,384 million [85.8%]

(Note) The Company has applied "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the three months ended November 30, 2021. The above amounts for the six months ended February 28, 2022 show figures after the said accounting standard has been applied. Percent changes from the previous corresponding period are calculated based on the consolidated financial results for the six months ended February 28, 2021 before the said accounting standard has been applied.

(2) Consolidated Financial Position

(Reference) Equity: As of February 28, 2022: ¥35,964 million

As of August 31, 2021: ¥33,331 million

(Note) The Company has applied "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the three months ended November 30, 2021. The above amounts for the six months ended February 28, 2022 show figures after the said accounting standard has been applied.

2. Dividends

(Note) Revision to the forecast for dividends announced most recently: None

3. Consolidated Financial Results Forecast for the Fiscal Year Ending August 31, 2022 (September 1, 2021 -

August 31, 2022)

(% indicates changes from the previous corresponding period.)

(Note) Revision to the financial results forecast announced most recently: None

The Company has applied "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the three months ended November 30, 2021. The above amounts for the consolidated financial results forecast for the fiscal year ending August 31, 2022 show figures after the said accounting standard has been applied. Percent changes from the previous corresponding period are calculated based on the consolidated financial results for the fiscal year ended August 31, 2021 before the said accounting standard has been applied.

* Notes:

(1) Changes in significant subsidiaries during the period under review: None

(Changes in specified subsidiaries resulting in changes in scope of consolidation): Newly included: - ( ), Excluded: - (

)

• (2) Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: Yes (Note) For details, please refer to "(4) Notes to Quarterly Consolidated Financial Statements (Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements)" on page

  13 of the Attachments.

• (3) Changes in accounting policies, changes in accounting estimates and retrospective restatement

  • 1) Changes in accounting policies due to the revision of accounting standards: Yes

  • 2) Changes in accounting policies other than 1) above: None

  • 3) Changes in accounting estimates: None

  • 4) Retrospective restatement: None

• (4) Total number of shares issued and outstanding (common shares)

  • 1) Total number of shares issued and outstanding at the end of the period (including treasury shares):

February 28, 2022:

August 31, 2021:

60,084,611 shares 60,083,111 shares

• 2) Total number of treasury shares at the end of the period:

  72 shares
  23 shares
  Six months ended February 28, 2022:	60,083,746 shares
  Six months ended February 28, 2021:	60,072,611 shares
  (5) Calculation method of management indices

  February 28, 2022:

  August 31, 2021:

• 3) Average number of shares during the period:

 EBITDA: Operating profit + Depreciation + Amortization of goodwill

* The amounts of depreciation and amortization of goodwill represent figures on the statements of cash flows.  Adjusted EPS: Adjusted profit (i.e., Profit attributable to owners of parent + Amortization of goodwill) / Average number of shares during the period

* These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants or an audit firm.

*Explanation on the proper use of financial results forecast and other notes

(Notes on forward-looking statements, etc.)

The earnings forecasts and other forward-looking statements herein are based on information available to the Company and certain assumptions deemed reasonable as at the date of publication of this document, and the Company does not in any way guarantee the achievement of the projections. In addition, actual results may differ significantly from these forecasts due to various factors. For preconditions for the financial results forecast and notes on the use thereof, etc., please refer to "1. Qualitative Information on Quarterly Financial Results (1) Explanation of Operating Results" on page 2 of the Attachments.

(Method of obtaining supplementary briefing materials on quarterly financial results)

Briefing materials on the financial results for the six months ended February 28, 2022 will become available today (April 7, 2022) on the Company's website and TDnet.

Table of Contents - Attachments

1. Qualitative Information on Quarterly Financial Results ........................................................................... 2

(1) Explanation of Operating Results ............................................................................................................ 2

(2) Explanation of Financial Position ............................................................................................................ 7

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information ........ 7

2. Quarterly Consolidated Financial Statements and Principal Notes ........................................................... 8

(1) Quarterly Consolidated Balance Sheets ................................................................................................... 8

(2) Quarterly Consolidated Statements of Income and Comprehensive Income ......................................... 10

Quarterly Consolidated Statements of Income

For the six months ended February 28 ...................................................................................... 10 Quarterly Consolidated Statements of Comprehensive Income

For the six months ended February 28 ...................................................................................... 11

(3) Quarterly Consolidated Statements of Cash Flows ............................................................................... 12

(4) Notes to Quarterly Consolidated Financial Statements ......................................................................... 13

(Notes on going concern assumption) ..................................................................................................... 13

(Notes in case of significant changes in shareholders' equity) ................................................................ 13 (Accounting methods adopted particularly for the preparation of quarterly consolidated financial

statements) ............................................................................................................................................... 13

(Changes in accounting policies) ............................................................................................................. 13

(Additional information) ......................................................................................................................... 14

(Segment information, etc.) ..................................................................................................................... 15

1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

The Group believes that a variety of customers it serves in the B to B market are its greatest assets, including commercial stores to which the Group provides its mainstay music distribution services, in addition to other customers such as hotels, hospitals, golf courses and small- to medium-sized offices.

Making the most of these assets, the Group has been focusing on initiatives to further consolidate its position as a solutions provider and a platformer for small- to medium-sized enterprises that provides one-stop solutions to various needs and problems of customers in its five business segments: the Content Distribution Business, the Store Services Business, the Communications Business, the Business Systems Business, and the Energy Business.

During the fiscal year under review, after the COVID-19 pandemic temporarily subsided, the Omicron variant rapidly spread from the end of the year and the number of COVID-19 cases surged significantly again, which led to the Japanese government's implementing priority measures to prevent the spread of infections. Even now, the number of the COVID-19 cases remains high.

Business activities have also been impacted, as evidenced by some commercial stores being forced to temporarily close or reduce operating hours, due to failure to secure the necessary number of staff in some commercial stores caused by the sudden increase of COVID-19 cases. In addition, a sharp rise in shipping costs due to soaring prices of crude oil, a hike in raw material prices including agricultural products caused by unseasonable weather, surging prices of imported items due to the stagnation of logistics, and weak yen are primarily affecting the Japanese economy to a great extent.

Under these circumstances, the Group, as a "social DX" company that brings the future closer to the present, has continued to focus on its efforts to support commercial stores and service users by providing one-stop solutions to the needs and problems of society through its business activities.

In each segment, the Group has provided products and services tailored to various needs and issues of customers under the COVID-19 pandemic and further utilized resources in the Group to practice our Group slogan, "Brighten the future."

In order for the Group to steadily carry out its new strategy and realize sustainable growth and a further increase of corporate value while responding to a social environment undergoing drastic change in the era of coexistence with and post COVID-19, the Group formulated and released a new medium-term business plan, "Road to 2025" on February 28, 2022. Moreover, the Group issued its first integrated report so that our management and corporate activity will be understood even further.

As a result, regarding the financial results for the six months ended February 28, 2022, net sales were ¥114,016 million (up 12.7% year on year), operating profit was ¥8,849 million (up 10.3% year on year) and ordinary profit was ¥8,432 million (up 10.5% year on year). In addition, profit attributable to owners of parent was ¥4,408 million (up 0.8% year on year).

The Group's net sales (including inter-segment sales or transfers) and operating profit by segment are outlined below.

Effective from the first quarter of the fiscal year under review, the Group has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, March 31, 2020; hereinafter referred to as the "Revenue Recognition Accounting Standard") and other standards.

Year-on-year comparisons in (1) Explanation of Operating Results, and comparisons with the end of the previous fiscal year in (2) Explanation of Financial Position are made using figures from the consolidated results of the previous fiscal year prior to the application of such accounting standards. Details are as described in "Notes (Changes in accounting policies) and (Segment information, etc.)."

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