Aucnet : Consolidated Financial Statements for the First Quarter of the Fiscal Year Ending December 31, 2021

Consolidated Financial Statements for the First Quarter of

the Fiscal Year Ending December 31, 2021

[Japanese GAAP]

May 11, 2021

Company name: AUCNET INC.

Stock exchange listing: Tokyo Stock Exchange

Code number: 3964

URL: https://www.aucnet.co.jp/

Representative: Mr. Shinichiro Fujisaki, President & COO

Contact: Mr. Hiroki Taniguchi, Director & Managing Executive Officer, DM, Corporate Management Division

Phone: [phone]

Scheduled date of filing quarterly report: May 11, 2021

Scheduled date of commencing dividend payments: -

Preparation of supplementary explanatory materials: Yes

Quarterly financial results meeting: None

									(Amounts of less than one million yen are rounded down.)
1. Consolidated Results for the First Quarter of the Fiscal Year Ending December 31, 2021
(January 1, 2021 - March 31, 2021)
(1) Consolidated Operating Results (cumulative)		(% indicates changes from the previous corresponding period.)
				Net sales				Operating profit		Ordinary profit		Profit attributable to
									owners of parent
Three months ended			Million yen	%	Million yen	%		Million yen	%		Million yen	%
March 31, 2021			9,268	65.8		1,808	59.1		2,017	70.4		1,277	76.7
March 31, 2020			5,591	14.8		1,136	34.1		1,184	29.6		723	50.0
(Note) Comprehensive income: Three months ended March 31, 2021: ¥1,412 million [112.0%]
				Three months ended March 31, 2020: ¥666 million [35.5%]
			Basic earnings		Diluted earnings
				per share			per share
Three months ended			Yen				Yen
March 31, 2021		46.11			45.73
March 31, 2020		26.17			25.93
(2) Consolidated Financial Position
				Total assets			Net assets	Equity ratio
				Million yen			Million yen		%
As of March 31, 2021			37,772			20,744		54.0
As of December 31, 2020		33,280			19,637		58.1

(Reference) Equity: As of March 31, 2021: ¥20,413 million As of December 31, 2020: ¥19,324 million

2. Cash Dividends

					Annual dividends
		1st quarter-end	2nd quarter-end		3rd quarter-end	Year-end	Total
		Yen	Yen		Yen	Yen	Yen
Year ended		-	10.00			-	11.00	21.00
December 31, 2020
Year ending		-
December 31, 2021
Year ending
December 31, 2021			14.00			-	14.00	28.00
(Forecast)

(Note) Revision to the forecast for dividends announced most recently: Yes

3. Forecast of Consolidated Results for the Fiscal Year Ending December 31, 2021 (January 1, 2021 - December 31, 2021)

(% indicates changes from the previous corresponding period.)

							Profit		Basic earnings
	Net sales	Operating profit	Ordinary profit	attributable to
	per share
							owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	34,351	42.7	4,496	21.3	4,558	25.1	2,516	32.7	90.63

(Note) Revision to the forecast of consolidated results announced most recently: Yes

* Notes:

1. Changes in significant subsidiaries during the period under review: None
2. Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: Yes
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 1. Changes in accounting policies due to the revision of accounting standards: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
5. Total number of issued and outstanding shares (common shares)
6. 1. Total number of issued and outstanding shares at the end of the period (including treasury shares):

March 31, 2021:	27,864,700 shares
December 31, 2020:	27,863,500 shares
2) Total number of treasury shares at the end of the period:
March 31, 2021:	147,316 shares
December 31, 2020:	147,316 shares
3) Average number of shares during the period:
Three months ended March 31, 2021:	27,716,304 shares
Three months ended March 31, 2020:	27,624,201 shares

• These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants or an audit firm.
• Explanation of the proper use of performance forecast and other notes

The earnings forecast and other forward-looking statements herein are based on the information currently available and certain assumptions deemed reasonable by the Company, and the Company does not guarantee their achievement. In addition, actual results may differ significantly from these forecasts due to a wide range of factors. For cautionary notes on assumptions that form the basis of the performance forecast and the use of performance forecast, please see "1. Qualitative Information on Quarterly Financial Results (3) Explanation of Consolidated Performance Forecast and Other Forward-looking Information" on page 4 of the attachments.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results ................................................................................	2
(1)	Explanation of Operating Results ..............................................................................................................	2
(2)	Explanation of Financial Position ..............................................................................................................	4
(3)	Explanation of Consolidated Performance Forecast and Other Forward-looking Information .................	4
2. Quarterly Consolidated Financial Statements and Primary Notes .................................................................	5
(1)	Quarterly Consolidated Balance Sheets .....................................................................................................	5
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income .............................................	6
(3)	Notes to Quarterly Consolidated Financial Statements ..............................................................................	8
	(Notes on going concern assumption) ...................................................................................................	8
	(Notes in case of significant changes in amount of shareholders' equity) ............................................	8
	(Accounting methods adopted particularly for the preparation of quarterly consolidated
	financial statements).............................................................................................................................	8
	(Segment information, etc.) ...................................................................................................................	8
	(Significant subsequent events) .............................................................................................................	9

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1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

Forward-looking statements in this document are based on the judgments of the Group (the Company and its subsidiaries) as of the end of the first quarter of the fiscal year under review.

During the three months ended March 31, 2021, the Japanese economy faced a severe condition for a long period due to factors including the second declaration of a state of emergency following the spread of the novel coronavirus (COVID-19) along with the request for self-restraint in economic activities. While it was expected that the economy would pick up by containing a resurgence of the infection and raising the level of economic activities, a third state of emergency declaration was issued, and the future outlook remains uncertain. In these circumstances, in line with our brand statement, "Shaping the Future of Commerce," the Company has worked to further improve its social and economic value, by providing competitive value-added products and services to promote information distribution in addition to its B2B information distribution intermediary businesses.

As a result, for the three months ended March 31, 2021, net sales were ¥9,268,410 thousand (up 65.8% from the same period of the previous fiscal year), operating profit was ¥1,808,852 thousand (up 59.1% from the same period of the previous fiscal year), ordinary profit was ¥2,017,702 thousand (up 70.4% from the same period of the previous fiscal year), and profit attributable to owners of parent was ¥1,277,981 thousand (up 76.7% from the same period of the previous fiscal year).

Performance results by business segment are as follows.

In view of the growing scale of business in auctions for pre-owned luxury brand items and other services, the Company has changed its segments from the fiscal year ended December 31, 2020. The "Other Information Distribution Business" segment, which comprised auctions for pre-owned luxury brand items, used motorcycles, and flowers, has been discontinued. Auctions for pre-owned luxury brand items are now included in the new "Consumer Product Business" segment, while auctions for used motorcycles and flowers have been consolidated into the existing "Others" segment.

For the following comparison with the previous year, the figures are compared by restating the figures of the previous year to match the new segment classification.

(Automobile Business)

The Automobile Business comprises the Company's mainstay used vehicle auctions (*1), shared inventory market (*2), live linked auctions (*3), proxy bidding service (*4), used vehicle inspection service (*5), and other services.

In the Japanese automotive sector, which has close connections with our business, total new-vehicle registrations (*6) increased 4.2% year-on-year to 1.42 million units in the three months ended March 31, 2021. The total number of used-vehicle registrations (*7) increased 2.1% year-on-year to 1.94 million units, and the number of vehicles listed (*8) at auctions around Japan decreased 1.5% year-on-year to 1.89 million units. The total number of vehicles sold at auction (*8) increased 5.3% year-on-year to 1.28 million units.

In the used vehicle distribution market, demand for used vehicles is increasing, due partly to a shift in people's mindset towards car transportation that can avoid close contact with others amid the spread of COVID-19. Under these circumstances, for our used vehicle auctions, although the number of vehicles listed decreased from the same period of the previous fiscal year due to a supply shortage in the market, the rate of sale rose from the previous fiscal year with a slight decrease in the number of vehicles sold from the previous fiscal year owing to strong inquiries. For the same reason, the number of vehicles sold in the shared inventory market also increased. For our live linked auctions and proxy bidding service, the number of vehicles bought increased significantly from the same period of the previous fiscal year, due to the continued rise in the need for remote participation in live linked auctions. As a result of these solid results, auction-related sales increased by

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