BEENOS : Consolidated Financial Results (Japanese Accounting Standards) for 1Q FY2022

This is a translation of the original Japanese release. The Japanese text shall prevail in case of any variance between this version and the Japanese text.

Consolidated Financial Results (Japanese Accounting Standards)

For the First Quarter Ended 31 December 2021

Company Name	BEENOS Inc.
Stock Code	3328
Representative	President and Group CEO
Contact	Executive Officer
Scheduled filing date of the Annual	14FEB2022
Securities Report

Supplementary documents for quarterly results: Yes

Quarterly results briefing: Yes

		8	February 2022
Stock Exchange Listing		Tokyo
URL http://www.beenos.com
Shota Naoi
Hisanori Matsuda	(TEL) 03-6859-3328
Scheduled date of commencement	―
of dividend payment

(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter Ended 31 December 2021 (1 October 2021 - 31 December 2021)

(1) Consolidated Results of Operations (Accumulated Total)		(% show year-on-year changes)
	Net sales	Operating income	Ordinary income	Net income
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
1Q FY2022	6,816	8.6	82	△76.2	36	△88.3	△18	―
1Q FY2021	6,275	△22.8	345	△85.4	311	△86.8	122	△92.3

Comprehensive

(Note) Income

1Q FY2022

131 Mil. yen (

53.0%)

1Q FY2021

85 Mil. yen (

△94.8%)

Net income per share

Net income per share

(basic)

(diluted)

Yen

Yen

1Q FY2022

△1.43

―

1Q FY2021

9.71

9.13

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

1Q FY2022

21,976

10,904

48.9

851.70

FY2021

21,797

11,395

51.7

883.49

Shareholders'

(Reference) equity

1Q FY2022 10,749 Million yen

FY2021 11,260 Million yen

2. Dividends

Dividend per share

End of 1Q

End of 2Q

End of 3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

FY2021

―

0.00

―

25.00

25.00

FY2022

―

FY2022 (Forecast)

―

―

―

―

Note 1: Changes in the most recently announced dividend forecast: None

Note 2: The dividend for FY2022 is TBD

3. Consolidated Forecasts for the Fiscal Year Ending 30 September 2022 (1 October 2021 - 30 September 2022)

We are refraining from disclosing our consolidated forecast for FY2022. Please refer to "Explanation of Outlook for the Future" on pg. 7 for details.

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• Notes

(1) Changes of important subsidiaries during period			:	None
New companies: - (Company name: -)		Excluded companies: - (Company name: -)
(2) Changes in accounting policies and changes or restatement of accounting estimates
①	Changes in accounting policies caused	by revision	of
accounting standards			:	None
②	Changes in accounting policies other than ①	:	None
③	Changes in accounting estimates			:	None
④	Restatement			:	None
(3) Number of shares outstanding (common shares)
	Number of shares outstanding at the end of
①		FY2021 1Q			13,335,995	FY2021	13,335,995
period (including treasury shares)
				Shares		Shares
	Number of treasury shares at end of period					714,980		590,935
②		FY2021 1Q			Shares	FY2021	Shares
	Average number of shares outstanding during
③	FY2021 1Q			12,723,753	FY2021 1Q	12,647,686
the term
				Shares		Shares

• This financial summary does not need to go through the auditing process.
• Explanations and other special notes concerning the appropriate use of business performance forecasts

The forward-looking statements such as result forecasts included in this document are based on the information available to the Company at the time of the announcement and on certain assumptions considered reasonable, and the Company makes no representations as to their achievability. Actual results may differ from the forecast depending on a range of factors.

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○ Table of Contents

1. Qualitative Information for this Fiscal Year's Results	4
(1)	Business Performance Report	4
(2)	Financial Status Report	6
(3)	Explanation of Outlook for the Future	7
2. Quarterly Financial Statements and Major Notes	8
(1) Quarterly Consolidated Balance Sheet	8
(2) Quarterly Consolidated Profit & Loss Statement and
	Quarterly Consolidated Statement of Comprehensive Income	10
(3) Notes on Consolidated Financial Statement	12
	(Notes regarding the premise of on-going concerns)	12
	(Notes regarding any significant fluctuation of the price of capital stock)	12
	(Segment Information)	13

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1. Qualitative Information for this Fiscal Year's Results

(1) Business Performance Report

The BEENOS Group aims to be on the "Global Platform Frontier" and continue to create platforms that will connect Japan with the world to create new standards and possibilities for people, products and experiences.

Our objective this year is to "optimize and fortify our operations and logistics to our focal regions in Buyee" in the Global Commerce Business, "shift to higher ticket items and fortify foreign sales" in the Value Cycle Business and "utilize our entertainment industry centered platform to drive the DX of the entertainment industry" in the Entertainment Business. We are considering COVID-19 to have a long-term impact so we will continue to monitor the effects of COVID-19 and will make all necessary countermeasures.

The highlights for the consolidated first quarter are as follows. Global Commerce increased our share of the market by implementing cheaper shipping options to select countries and conducting marketing practices tailored to specific regions. Value Cycle continued to fortify its foreign sales channels and took measures to make purchasing from users a more convenient process for them. Entertainment has expanded its reach to operating fan sites for artists and increased the functionality of its EC sites so that it would be less dependent on live events.

The Incubation segment did not record any sales on investment securities in the first quarter. New Businesses succeeded in acquiring more artists for its entertainment platform. We are continuing to develop the business to help Japanese companies be listed on foreign platforms to sell their products abroad.

As a result, the consolidated net sales for 1Q were 6,816 million JPY (up 8.6% YoY), operating income was 82 million JPY (down 76.2% YoY), ordinary income was 36 million JPY (down 88.3% YoY) and net losses attributable to owners of parent was 18 million JPY (net income attributable to owners of parent in 1Q FY2021 was 122 million JPY.

The consolidated GMV for 1Q FY2022 was 18.4 billion JPY (up 24.4% YoY).

The achievements of each business segment are as follows.

① E-Commerce Business

1. Global Commerce Business
   The Overseas Forwarding and Proxy Purchasing Business (From Japan) expanded its low-cost international

delivery service, ECMS Express, to the US, South Korea, Hong Kong and Singapore (previously only available to Taiwan). Furthermore, we have implemented an original international delivery service to Russia, one of our high-profile target regions, which allowed us to provide shipping at a more competitive rate to drive more GMV and sales. We have also improved the user experience for users in Taiwan, which has a low credit card usage rate, by allowing them to pay after the product arrives. We have also added the fashion EC site, BAYCREW'S STORE, operated by BAYCREW'S CO., LTD. and sneaker-based flea market service, SNKRDUNK, operated by SODA inc. to our lineup of stores we assist in their international penetration.

On the other hand, China continues to restrict its users from accessing foreign websites which has affected our services and subsequently decreased the orders we receive from mainland China. We had anticipated this as a risk and have intentionally focused on the growth of other countries so that we would not be heavily dependent on China. Furthermore, we have been constructing a system within the New Business subsegment of the Incubation Business to partner with major EC platforms in China to boost our traffic through those channels. Therefore, the impact of the restrictions by China to our overall results is limited.

The Global Shopping Business (To Japan) continues to aim to yield a consistent profit and has made improvements to its UI and took measures to retain repeat customers.

As a result, the consolidated net sales for 1Q were 2,331 million JPY (up 31.8% YoY) and operating income was 715 million JPY (up 23.6% YoY).

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ii) Value Cycle Business

The Apparel Reuse Business has been focusing its resources on its partnerships with foreign platforms to boost foreign sales. As a result, the composition of foreign sales rose to 24.4% (composition was 18.7% at 4Q FY2021). On the other hand, the temporary decline of COVID-19 cases led to an upward trend in domestic sales, but gross profit margins decreased as more high-ticket items with lower profit margins were being sold. The purchasing side has done well as Brandear opened 2 new stores to bring its total up to 10 brick and mortar stores (including joint stores with JOYLAB). It has also extended the hours of its online purchasing service, Brandear Bell, to be able to support more customers.

The Liquor Mediation Business has seen a healthy growth in sales as the demand for Japanese whiskey and sake increased overseas and we have been able to distribute the products overseas. JOYLAB also opened a new store with Brandear and carried out some promotions to increase purchases.

As a result, the consolidated net sales for 1Q were 3,653 million JPY (up 28.7% YoY) and operating loss was 122 million JPY (operating income in 1Q FY2021 was 51 million JPY).

Iii) Entertainment Business

The Entertainment Business continues to be affected by COVID-19 as live events are still being limited in size and scale which led to a decrease in the sales of merchandise at live events. However, we have improved the UI of the EC sites of the artists we are partnered with and have included an online lottery system for fans to purchase and enjoy. We have also began operating fan club sites for artists to increase our points of monetization.

The Global Product Business partnered its fragrant body care brand, SWATi, with the Disney Princess design to package its products in. We have also been able to boost the recognition of Lavisia's Pokemon cosmetic products, our in-house brand, which had led to an increase in sales.

As a result, the consolidated net sales for 1Q were 925 million JPY (down 44.0% YoY) and operating income was 43 million JPY (down 68.6% YoY).

For the E-Commerce Business as a whole, net sales were 6,911 million JPY (up 10.4% year on year) and operating income was 636 million JPY (down 17.4% year on year).

②Incubation Business

The Investment and Consultation Business has focused on investing in startups in online marketplaces and online payments in emerging countries and Japanese inbound tourism in Japan. Droom, one of India's largest online vehicle marketplaces, has filed for an IPO. We have invested in Droom since its seed stage and seen its growth over the years. India's NoBroker has also become a unicorn and now is one of India's leading companies in its sector. We have not recorded any sales on investments in 1Q FY2022, but plan to make sales when we find the right opportunity. Our domestic investments in the inbound tourism sector continue to face an uphill battle but continue to make preparations to provide high-end products and services for when international travel resumes.

Groobee, our entertainment industry-based platform, of our Start-up Business has started to operate EDITH ONLINE, in partnership with EDITH inc., to produce and sell merchandise for popular anime and games. Our Cross Platform Initiative has extended its reach by adding Saitama Japan Premium Shop, operated by Saitama Prefecture, onto Shopee as well as DELFONICS Store, operated by DELFONICS Co., Ltd., onto Shopee and Lazada. We provide customer support, foreign shipping logistics and payment support in addition to listing such stores onto these foreign marketplaces.

As a result, the consolidated net sales for 1Q were 98 million JPY (up 342.8% YoY) and operating loss was 363 million JPY (operating loss in 1Q FY2021 was 245 million JPY).

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