Onward : Consolidated Financial Results for the Fiscal Year Ended February 28,2023

Consolidated Financial Results

for the Fiscal Year Ended February 28, 2023

[Japanese GAAP]

April 6, 2023

Company name: Onward Holdings Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange

Securities code: 8016

URL: https://www.onward-hd.co.jp/en/

Representative: Michinobu Yasumoto, President and CEO

Contact: Osamu Sato, Managing Director in charge of Finance, Accounting, Investor Relations

Phone: [phone]

Scheduled date of Annual General Meeting of Shareholders: May 25, 2023

Scheduled date of commencing dividend payments: May 26, 2023

Scheduled date of filing annual securities report: May 26, 2023

Availability of supplementary materials on financial results: Available

Schedule of financial results briefing session: Scheduled (for institutional investors, securities analysts, and the press)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Performance for the Fiscal Year Ended February 28, 2023 (March 1, 2022 - February 28, 2023)

(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
		Net sales		Operating profit		Recurring profit	Profit attributable to
				owners of parent
	Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
	February 28, 2023	176,072	4.5	5,214	-	5,319	948.7	3,061	(64.3)
	February 28, 2022	168,453	(4.2)	(1,079)	-	507	-	8,566	-

(Note) Comprehensive income: Fiscal year ended February 28, 2023: 10,767 million yen [(7.6)%] Fiscal year ended February 28, 2022: 11,657 million yen [-%]

	Basic earnings	Diluted	Return on	Ratio of	Ratio of
	earnings	recurring profit	operating profit
	per share	equity
	per share	to total assets	to net sales
Fiscal year ended	Yen	Yen	%	%	%
February 28, 2023	22.57	22.53	4.3	3.4	3.0
February 28, 2022	63.17	63.04	13.9	0.3	(0.6)

	(Reference)	Share of profit (loss) of entities accounted for using equity method:
				Fiscal year ended February 28, 2023: (46) million yen
				Fiscal year ended February 28, 2022: (73) million yen
			EBITDA (operating profit + depreciation and amortization):
				Fiscal year ended February 28, 2023: 10,373 million yen [165.0%]
				Fiscal year ended February 28, 2022: 3,915 million yen [-%]
(2) Consolidated Financial Position
				Total assets	Net assets		Shareholders'	Net assets per share
					equity ratio
				Million yen	Million yen			%	Yen
		As of February 28, 2023	159,198	85,073			47.0	550.76
		As of February 28, 2022	157,727	77,257			42.4	493.14
		(Reference)	Shareholders'	equity: As of February	28, 2023: 74,747 million yen
				As of February 28, 2022: 66,886 million yen

(3) Consolidated Cash Flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash

equivalents

operating activities

investing activities

financing activities

at end of period

Fiscal year ended

Million yen

Million yen

Million yen

Million yen

February 28, 2023

5,685

4,390

(11,955)

13,795

February 28, 2022

7,814

21,685

(36,173)

15,199

2. Dividends

Annual dividends per share

Total

Payout ratio

Ratio of

dividends to

1st

2nd

3rd

Year-

dividends

Total

(consolidated)

net assets

quarter-

quarter-

quarter-

end

(annual)

end

end

end

(consolidated)

Fiscal year ended

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

-

-

-

12.00

12.00

1,627

19.0

2.4

February 28,

2022

Fiscal year ended

-

-

-

12.00

12.00

1,628

53.2

2.0

February 28,

2023

Fiscal year ending

February 29,

-

-

-

14.00

14.00

47.5

2024 (Forecast)

3. Consolidated Performance Forecast for the Fiscal Year Ending February 29, 2024 (March 1, 2023 - February 29, 2024)

(% indicates changes from the previous corresponding period.)

	Net sales	Operating profit	Recurring profit	Profit attributable	Basic
	to owners of	earnings per
							parent		share
1H (cumulative)	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
86,200	4.9	1,000	416.4	700	6.9	1,400	193.9	10.32
Full year	185,000	5.1	7,000	34.2	6,300	18.4	4,000	30.7	29.49
(Reference) EBITDA (operating profit + depreciation and amortization):
		Full year ending February 29, 2024 (forecast):12,100million yen [16.6%]
		Full year ended February 28, 2023: 10,373 million yen [165.0%]

* Notes:

(1) Changes in significant subsidiaries during the fiscal year under review (changes in specified subsidiaries resulting in changes in scope of consolidation): Yes

Newly included: - (Company name:)

Excluded: One company (Company name: Onward Beach Resort Guam, Inc.)

(2) Changes in accounting policies, changes in accounting estimates, and restatement

1) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes

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

3) Changes in accounting estimates: None

4) Restatement: None

1. Total number of issued shares (common stock)
   1) Total number of issued shares at the end of the period (including treasury shares):

As of February 28, 2023:	157,921,669 shares
As of February 28, 2022:	157,921,669 shares
2) Total number of treasury shares at the end of the period:
As of February 28, 2023:	22,204,488 shares
As of February 28, 2022:	22,287,771 shares
3) Average number of shares outstanding during the period:
Fiscal year ended February 28, 2023:	135,655,390 shares
Fiscal year ended February 28, 2022:	135,619,330 shares

(Reference) Summary of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2023 (March 1, 2022 - February

28, 2023)
(1) Non-consolidated Operating Results				(% indicates changes from the previous corresponding period.)
			Net sales				Operating profit		Recurring profit		Net income
	Fiscal year ended	Million yen	%	Million yen	%		Million yen	%		Million yen	%
	February 28, 2023		11,082	(23.5)		7,012	(35.1)		2,173	(59.3)		2,542	(70.2)
	February 28, 2022		14,478	27.5		10,799	54.5		5,345	-		8,525	-
		Basic earnings		Diluted earnings
			per share			per share
	Fiscal year ended		Yen			Yen
	February 28, 2023		18.74			18.71
	February 28, 2022		62.87			62.74
(2) Non-consolidated Financial Position
			Total assets		Net assets	Shareholders'	Net assets per share
				equity ratio
			Million yen		Million yen		%		Yen
	As of February 28, 2023		136,058		83,502		61.3		614.66
	As of February 28, 2022		134,198		78,861		58.6		580.53

(Reference) Shareholders' equity: As of February 28, 2023: 83,419 million yen As of February 28, 2022: 78,739 million yen

• These consolidated financial results are outside the scope of audit by certified public accountants or an audit firm.
• Explanation of the proper use of performance forecast and other notes
  The performance outlook and other forward-looking statements herein are based on information currently available to the Company and certain assumptions that have been deemed reasonable. Actual performance may differ significantly from these forecasts due to a wide range of factors. For conditions used as the assumptions for the performance forecast and notes on the use of performance forecast, please refer to "1. Overview of Operating Results, etc." on page 2 of the Attachments.

Note:

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Table of Contents - Attachments
1. Overview of Operating Results, etc. .................................................................................................... 2
(1)	Overview of Operating Results for the Fiscal Year under Review	2
(2)	Overview of Financial Position for the Fiscal Year under Review	2
(3)	Overview of Cash Flows for the Fiscal Year under Review	3
(4)	Basic Policy on Shareholder Returns and Dividends for the Fiscal Year under Review and the Next
Fiscal Year	4
(5)	Future Outlook	4
2. Basic Policy on Selection of Accounting Standards	4
3. Consolidated Financial Statements and Principal Notes	5
(1)	Consolidated Balance Sheets	5
(2)	Consolidated Statements of Income and Comprehensive Income	7
(3)	Consolidated Statements of Changes in Equity	9
(4)	Consolidated Statements of Cash Flows	13
(5)	Notes to Consolidated Financial Statements	15
	(Uncertainties of entity's ability to continue as going concern)	15
	(Significant accounting policies for preparation of Consolidated Financial Statements)	15
	(Changes in accounting policies)	19
	(Changes in the presentation method)	20
	(Notes to Consolidated Statements of Income)	20
	(Notes to Consolidated Statements of Comprehensive Income)	21
	(Notes to Consolidated Statements of Changes in Equity)	22
	(Notes to Consolidated Statements of Cash Flows)	24
	(Segment information, etc.)	25
	(Per share information)	30
	(Significant events after reporting period)	31

1

1. Overview of Operating Results, etc.

1. Overview of Operating Results for the Fiscal Year under Review
   During the fiscal year under review (from March 1, 2022 to February 28, 2023), the Japanese economy showed signs of recovery as economic activities normalized due to the relaxation of restrictions on activities related to COVID-19. However, due to rising inflation on the back of soaring resource prices and raw material prices, the depreciation of the yen, and other factors, the outlook remains uncertain.
   In these circumstances, the Group has been striving to evolve towards "customer-centric management that leverages the diverse individual qualities of our employees." To achieve the medium- to long-term management vision ONWARD VISION 2030 established in April 2021, in our core Apparel Business, we have been actively pursuing e-commerce strategies through our group e-commerce site ONWARD CROSSET in addition to managing physical stores. In particular, we have bolstered the development of OMO (Online Merges with Offline)-type stores that integrate services offered in our physical stores and online store, leading to a high number of users and contributing to increased sales in our physical stores. Furthermore, as a result of our global business reforms and efforts to limit discount sales, our gross profit margin improved by 2.9 pp, and our SG&A ratio decreased by 0.7 pp. Consequently, we achieved profitability at all profit levels, including operating profit. It should be noted that profit attributable to owners of parent decreased compared to that of the previous fiscal year, which included gain on sale of real estate.
   As a result of the above, consolidated net sales amounted to 176,072 million yen (a 4.5% increase year on year), a consolidated operating profit was recorded at 5,214 million yen (an operating loss of 1,079 million yen for the previous fiscal year), a consolidated recurring profit was recorded at 5,319 million yen (a 948.7% increase year on year), and profit attributable to owners of parent amounted to 3,061 million yen (a 64.3% decrease year on year).
   Furthermore, the Group has adopted EBITDA (operating profit + depreciation and amortization) as a management indicator with the purpose of enabling convenient comparisons between companies regardless of differences in accounting standards, amid its efforts to accelerate growth through enhancement and expansion of business foundations that utilize creation of new businesses, M&As, etc.
   EBITDA for the fiscal year under review was 10,373 million yen (a 165.0% increase year on year).

Status by segment is as follows.

[Apparel Business]

In the domestic business, the number of visitors to physical stores increased with the relaxation of restrictions on activities related to COVID-19, sales were favorable in the key brands of our core operating company, Onward Kashiyama Co., Ltd., namely Nijyusanku, ICB, and Jiyuku, among others, and the D2C brand UNFILO created hit products, contributing to sales growth. Sales also increased at Onward Personal Style Co., Ltd., which develops the KASHIYAMA brand, as the company accelerated the development of franchise stores in addition to directly-managed stores.

In the overseas business, the profitability of existing businesses improved significantly, mainly due to the withdrawal from unprofitable businesses under global business reforms.

As a result, sales expanded, with a significant return to profitability in the Apparel Business as a whole.

[Lifestyle Business]

Chacott Co., Ltd., which operates a wellness business, saw strong performance of products in its mainstay ballet and fitness wear merchandise line, as well as Chacott COSMETICS and Chacott BALANCE, with sales recovering to pre-pandemic levels. Creative Yoko Co., Ltd., which operates a pet and home life business, posted strong sales as its strategy of opening physical stores proved successful.

As a result, both sales and profit increased in the Lifestyle Business as a whole.

1. Overview of Financial Position for the Fiscal Year under Review 2