ＴＯＫＡＩホールディングス（3167） – [Delayed]Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2022

January 27, 2022 TOKAI Holdings Corporation Katsuhiko Tokita, President & CEO (Code No. 3167 Tokyo Stock Exchange First Section) To whom it may concern Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2022 Started to Implement a New Medium-Term Management Plan, Innovation Plan 2024 “Design the Future Life” TOKAI Holdings Corporation (hereinafter, “the Company”) today announced its financial results for the first nine months of the fiscal year ending March 31, 2022. 1. The Company continued to expand its earnings base to achieve a net annual increase of 100,000 in customer count. The Company announced the fourth Medium-Term Management Plan, Innovation Plan 2024 “Design the Future Life” (“IP24”*1) in May last year. The plan covers a period from this fiscal year to the fiscal year ending March 31, 2025. A key strategy in IP24 is “LNG strategy.” The Company will expand its business areas at the Local level (expansion of share in existing areas), at the National level (expansion of new business areas in Japan), and at the Global level (business development overseas) and will achieve growth in the number of customers through selection and concentration, focusing on profitability. To achieve 3.56 million customers at the end of the fiscal year ending March 31, 2025, the Company will pursue an aggressive strategy to expand its earnings base, aiming to achieve 3.20 million customers (a net annual increase of 100,000 in customer count) at the end of the fiscal year under review. In operating activities in the first nine months of the fiscal year under review, the Company was thorough in taking measures to prevent COVID-19 infections. Meanwhile, the Company took proactive steps to attract customers and recorded 3,142 thousand continuing customers as of December 31, 2021. This continuing customer number exceeded the count at the beginning of the fiscal year (3,099 thousand) by 43,292 (versus an increase of 59,804 in the same period of the previous fiscal year, including M&A-related 8,253). With net increases of 29,533 (LP and city) gas customers (24,416 in the same period of the previous fiscal year), 26,055 CATV customers (34,395, including M&A-related 8,253 customers), and 3,391 Aqua (bottled drinking water delivery) customers (1,015), we further expanded our earnings base. 2. Sales increased for the first time in two periods and hit a record high. In the nine months ended December 31, 2021, the Company recorded sales of 149.4 billion yen (up 9.6 billion yen or 6.9% year on year), the first increase in two periods and a record high. Sales increased chiefly due to increases in the numbers of energy customers and CATV customers, expansion of recurring-revenue businesses in the Information and Communications business for corporate clients, and the effect of M&A in the Construction, Equipment, and Real Estate business. On the profit front, operating profit fell to 9.2 billion yen (down 0.7 billion yen or 6.6% year on year). While an increase in profit thanks to an increase in the number of monthly fee-paying customers that accompanied a higher customer account and an increase in profit in the Information and Communications business were recorded, the growth was more than offset by an increase in expenses for gaining customers, reflecting more LP gas and Aqua customers gained than a year ago, among other factors. Quarterly net income attributable to owners of the parent was 4.6 billion yen, down 1.3 billion yen, or 21.9% year on year, due mainly to the recording of a temporary extraordinary loss. Net sales, operating profit, and recurring profit each exceeded the Company’s internal plan, and quarterly net income attributable to owners of the parent also exceeded the internal plan, despite the aforementioned temporary extraordinary loss. Net sales Operating profit Recurring profit Net income EPS (yen) Q3 FY03/22 results (April 1, 2021 to December 31, 2021) 149,420 9,248 9,324 4,634 35.38 Q3 FY03/21 results (April 1, 2020 to December 31, 2020) 139,792 9,901 9,929 5,936 45.33 (Millions of yen) YoY Change % change +9,627 -653 -605 -1,301 -9.95 +6.9% -6.6% -6.1% -21.9% -21.9% 3. Started to implement a new Medium-Term Management Plan, Innovation Plan 2024 “Design the Future Life” With its Corporate Philosophy “For customers’ livelihood along with the region, together with the earth, we will continue to grow and develop” as an unchanging value, the Group will adapt to changes in customers’ lifestyles and changes in society and the environment and, while supporting and staying close to customers, aims to evolve into a “Life Design Group” that designs and provides the new lifestyles of the future, ready to take on new challenges described in the new Medium-Term Management Plan “IP24.” The Group has made steady progress to make the fiscal year ending March 31, 2022 a year where the Group will lay foundations for achieving the goals described in the five key messages in IP24: (i) Implementation of LNG strategy, (ii) Evolution of TLC*2 concept, (iii) Stepping up of DX strategy, (iv) Optimal allocation of management resources, and (v) Strengthening of SDG initiatives. The earnings and dividend forecasts for the fiscal year ending March 31, 2022 remain unchanged. (Millions of yen) FY03/22 forecast (April 1, 2021 to March 31, 2022) FY03/21 results (April 1, 2020 to March 31, 2021) YoY Change % change Net sales Operating profit Recurring profit Net income EPS (yen) Customer count at end of fiscal year 207,000 15,240 15,320 8,830 67.42 FY03/22 (forecast) 196,726 15,226 15,312 8,815 67.32 +10,274 +14 +8 +14 +0.10 +97,000 +5.2% +0.1% +0.1% +0.2% +0.2% +3.1% FY03/22 FY03/21 3,195,000 3,099,000 14.00 yen Interim (end of Q2) 16.00 yen Year-end Annual dividend per share 30.00 yen For details, please see the attached materials, entitled “Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2022.” For the Company’s earnings announcement for the first nine months of the fiscal year ending March 31, 2022, please see the following URL: https://www.tokaiholdings.co.jp/ir/library/earnings.html *1 For the details of the fourth Medium-Term Management Plan “IP24,” please see the following URL: 15.00 yen 30.00 yen 15.00 yen https://www.tokaiholdings.co.jp/ir/management/manageplan.html *2 TLC (Total Life Concierge) concept: The Group will provide a comprehensive range of carefully tailored services to help customers live more comfortable lives and aim to improve customer satisfaction. Contact: Yoshihiro Taniguchi Public Relations and Investor Relations Office TEL: +81-(0)3-5404-2891 Email: overseas_IR@tokaigroup.co.jp Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2022TOKAI Holdings Corporation(Code No. 3167)January 27, 2022Steady Expansion of Customer Base in Core Businesses◎ The number of continuing customers as of December 31, 2021 stood at 3,142 thousand, an increase of 43 thousand from 3,099 thousand at the beginning of the fiscal year.◎ We further expanded our earnings base in the gas business, the main business, CATV business and Aqua business.Gas (LP and city)(Thousand)+30 8304030+26 +24 774+19 CATV+34 +4 +26 1,224 Aqua+1 +3 1667377031,188 1,088 162160FY2019_3Q(Two years earlier)FY2020_3Q(Previous fiscal year)FY2021_3Q(Current fiscal year)FY2019_3Q(Two years earlier)FY2020_3Q(Previous fiscal year)FY2021_3Q(Current fiscal year)FY2019_3Q(Two years earlier)FY2020_3Q(Previous fiscal year)FY2021_3Q(Current fiscal year)Number at end of fiscal yearNet increaseNumber at end of fiscal yearNet increaseNumber at end of fiscal yearNet increase1* Rounded to the nearest thousand* The net increases include increases through M&A.41,2951,245-11,1951,145-61,0951,045-11995945-1678020107300-10680-20-30630-4035302520151050173171169167165163161159157155153Net sales hit a record high.◎ Net sales hit a record high chiefly due to an increase in the number of customers, expansion in the Information and Communications business for corporate clients, and the effect of M&A in the Construction, Equipment, and Real Estate business.◎ Operating profit fell 700 million yen year on year, chiefly reflecting an increase in expenses to acquire customers, albeit partially offset by growth in profit attributable to an increase in the number of monthly fee-paying customers accompanying an increase in the number of customer accounts, as well as by a rise in profit in the Information and Communications business for corporate clients.◎ Net income decreased 1,300 million yen year on year, chiefly due to the recording of a temporary extraordinary loss.Q3 FY03/22 results(April 1, 2021 to December 31, 2021)Q3 FY03/21 results(April 1, 2020 to December 31, 2020)149,420139,7929,2489,3244,63435.389,9019,9295,93645.33Net salesOperating profitRecurring profitNet incomeEPS(Net sales and profit: million yen; EPS: yen)YoYChange% change+9,627-653-605-1,301-9.95+6.9%-6.6%-6.1%-21.9%-21.9%2Consolidated full-year financial results forecast◎ The Group has made steady progress to make the fiscal year ending March 31, 2022 a year in which the Group will lay the foundations for achieving the goals described in the five key messages in the Medium-Term Management Plan IP24: (i) Implementation of LNG strategy, (ii) Evolution of TLC concept, (iii) Stepping up of DX strategy, (iv) Optimal allocation of management resources, and (v) Strengthening of SDG initiatives.◎ The earnings forecast for the fiscal year ending March 31, 2022 (announced on May 11, 2021) remains unchanged.FY03/22forecast(April 1, 2021 to March 31, 2022)FY03/21results(April 1, 2020 to March 31, 2021)(Millions of yen)YoYChange% changeNet sales207,000196,726+10,274Operating profitRecurring profitNet incomeEPSCustomer count at end of fiscal year15,24015,3208,83067.4215,22615,3128,81567.32+14+8+14+0.103,195,0003,099,000+97,000+5.2%+0.1%+0.1%+0.2%+0.2%+3.1%3Dividend forecast◎ Plan to pay dividends at a payout ratio of 40% to 50% for FY03/22. The annual amount for FY03/21, which was increased to 30 yen/share, is the baseline.◎ The dividend forecast (announced on May 11, 2021) remains unchanged.44.2%52.9%40.2%35.1%12 yen/share12 yen/share12 yen/share12 yen/share6666666614 yen/share8654.7%46.7%47.2%44.5%44.6%44.5%43.4%28 yen/share6111128 yen/share28 yen/share28 yen/share30 yen/share30 yen/share1414141615141414141550.0%40.0%30.0%20.0%10.0%0.0%50454035302520151050FY2011FY2012FY2013FY2014FY2015FY2016FY2017FY2018FY2019FY2020Interim dividendYear-end dividendCommemorative dividendPayout ratioFY2021(forecast)45Appendix(1) Consolidated results(2) Sales by segment(3) Operating profit by segment(4) Consolidated financial indicators(5) Consolidated cash flows(6) Group customer count(1) Consolidated resultsQ3 FY03/18ResultsQ3 FY03/19ResultsQ3 FY03/20ResultsQ3 FY03/21ResultsQ3 FY03/22Results(Millions of yen)Sales133,336137,943141,557139,792149,420Operating profit6,5797,0389,2789,9019,248Recurring profit6,6627,2479,4789,9299,324Net income3,4353,9665,1035,9364,634EPS (Yen)26.6630.2938.9745.3335.387(2) Sales by segment(Millions of yen)Q3 FY03/18ResultsQ3 FY03/19ResultsQ3 FY03/20ResultsQ3 FY03/21ResultsQ3 FY03/22ResultsEnergyInformation and CommunicationsCATVbuilding equipment real estateAquaOthers53,14554,67555,19153,43758,71737,76037,95938,83437,83138,20620,87122,82923,43324,99424,26513,49113,84614,91914,81519,0254,6525,2795,6035,7785,8113,4153,3523,5752,9343,395Total133,336137,943141,557139,792149,420※From the current fiscal year, the name of the reporting segment has been changed from “gas and oil” to “energy” and from “building and real estate” to “building equipment real estate”. The segment name change will not affect sales by segment.(3) Operating profit by segmentQ3 FY03/18ResultsQ3 FY03/19ResultsQ3 FY03/20ResultsQ3 FY03/21ResultsQ3 FY03/22ResultsEnergyInformation and CommunicationsCATVbuilding equipment real estateAquaOthers3,8572,9542,4102,5952,7583,5686812219154443,9643,3663,7901,2425975,0343,0814,1021,094578-3,350-3,442-3,682-3,988-4,514Total6,5797,0389,2789,9019,248*Prior to elimination of indirect expenses(Millions of yen)4,3173,4924,5391,12628789(4) Consolidated financial indicatorsQ3 FY03/18ResultsQ3 FY03/19ResultsQ3 FY03/20ResultsQ3 FY03/21ResultsQ3 FY03/22Results(Millions of yen)Total assets165,886167,035168,697172,946181,450Total liabilities106,661107,404102,972102,104105,652Total net assets59,22459,63165,72470,84175,797Balance of interest-bearing debt57,51158,48152,61551,34449,060EBITDA18,05218,26620,76921,76821,202Equity ratio35.0 %35.0 %38.2 %40.1 %40.9 %(5) Consolidated cash flowsQ3 FY03/18ResultsQ3 FY03/19ResultsQ3 FY03/20ResultsQ3 FY03/21ResultsQ3 FY03/22Results12,2959,81315,47619,40212,305-9,655-9,615-9,683-14,672-11,667Operating cash flowInvestment cash flowFree cash flow2,6401975,7934,730638Financing cash flow-2,081762-4,779-3,863-94510(Millions of yen)11(6) Group customer countQ3 FY03/18ResultsQ3 FY03/19ResultsQ3 FY03/20ResultsQ3 FY03/21ResultsQ3 FY03/22Results(Thousands of customers)Gas (LP and city gas)s Previous ISP model, etc.Hikari CollaborationLIBMOSubtotal dna noitamrofnIinoitacnummoCCATVAquaMobileSecurity65347831921818143229176744303283979715722017703396324457661602141673737533552763162209161,0021,0551,0881,1881,224Total2,8392,8972,9333,0633,142*The number of customers under a thousand are rounded to the nearest thousand. Information and Communications and CATV both offer communications services, and so their numbers are excluded from total figures.774382342557791661951612(7) EBIDA by businessQ3 FY03/18ResultsQ3 FY03/19ResultsQ3 FY03/20ResultsQ3 FY03/21ResultsQ3 FY03/22Results(Millions of yen)Energy7,3426,5127,5638,5127,923Information and CommunicationsFor consumersFor corporations4,3524,6515,6341,0281,1984,5044,7157,4357,8918,0558,5998,812Construction, Equipment,and Real Estate1,1951,4261,7731,6771,8556388441,0501,051807CATVAquaEBITDA (Total)18,05218,26620,76921,76821,202* EBITDA = operating profit + depreciation (operating profit is before allocation of indirect costs, etc.)* Information and communications have been divided into those for consumers and those for corporations from the previous term. Before that, the figures for the entire information and communication are displayed.13The performance forecasts and forward-looking statements in these materials are based on information currently available to the Company, and include potential risks and uncertainties. Please be aware that due to changes in a variety of factors, actual results may differ materially from the projections and other forward-looking statements in these materials.Please contact us with any questions regarding these materials.Investor Relations OfficeTOKAI Holdings CorporationHamarikyu Inter City 11th floor, 1-9-1, Kaigan, Minato-ku, Tokyo 105-0022, JapanPhone: +81-(0)3 5404-2891Fax: +81-(0)3-5404-2786https://www.tokaiholdings.co.jp/english/e-mail： overseas_IR@tokaigroup.co.jp