プレミアグループ（7199） – Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 [IFRS]

Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 [IFRS] May 6, 2022 Listed on the Tokyo Stock Exchange URL https://www.premium-group.co.jp/ President and CEO Director and Managing Executive Officer (Name) Yohichi Shibata (Name) Toru Ohnuki Scheduled date of commencement of dividend payment: June 9, 2022 Premium Group Co., Ltd. 7199 (Title) (Title) Tel. 03-5114-5708 Company Name Stock Code Representative Contact Scheduled date of regular general meeting of shareholders: Scheduled date of securities report submission: Supplementary material for financial results prepared: Financial results meeting held: Yes No June 29, 2022 June 30, 2022 1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, 2022) (Consolidated financial results, Nonconsolidated financial results: Amounts are rounded to the nearest million yen.) (1) Consolidated Operating Results Operating income Profit before tax Profit (% change from previous fiscal year) Total comprehensive income Profit attributable to owners of parent Million yen % Million yen % Million yen % Million yen % Million yen 20,827 16.8 4,017 2,964 23.8 2,941 23.4 3,010 17,825 27.2 3,463 2,393 64.8 2,383 62.6 2,447 16.0 33.0 % 23.0 77.1 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Basic earnings per share Diluted earnings per share Yen Yen Ratio of earnings to equity attributable to owners of parent Ratio of pretax profit to total assets % 34.8 38.3 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Reference: Equity method investment profit/loss FY Ended March 31, 2022 227.36 184.55 229.39 186.74 (2) Consolidated Financial Position 213 million yen FY Ended March 31, 2021 59 million yen Total assets Total equity Equity attributable to owners of parent Equity attributable to owners of parent ratio Equity attributable to owners of parent per share Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 (3) Consolidated cash flow Million yen 81,800 68,156 Million yen Million yen 9,814 7,291 9,710 7,211 % 5.4 5.5 % 11.9 10.6 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 2. Dividends Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ending March 31, 2023 (forecast) Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Cash and cash equivalents at end of period Million yen 1,608 1,321 Million yen (1,028) (1,172) Million yen 2,797 1,617 Annual dividend First quarter Yen Second quarter Third quarter Yen Yen 22.50 25.00 30.00 ‒ ‒ ‒ Year end Total Yen 23.50 Yen Million yen 46.00 26.00 51.00 30.00 60.00 588 655 ‒ ‒ ‒ Total dividends (total) Payout ratio (consolidated) Ratio of dividends to equity attributable to owners of parent (consolidated) % 9.4 7.7 % 24.6 22.2 22.8 – 1 – Yen 754.71 563.12 Million yen 11,433 8,054 3. Forecasts of Consolidated Financial Results for the Fiscal Year Ending March 31, 2023 (April 1, 2022 to March 31, 2023) Operating income Profit before tax Profit Profit attributable to owners of parent Basic earnings per share Million yen % Million yen % Million yen % Million yen % 24,500 17.6 4,700 17.0 3,400 14.7 3,400 15.6 Yen 264.59 Fiscal year ending March 31, 2023 * Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in a change in scope of consolidation): None (2) Changes in accounting policies and accounting estimates 1) Changes in accounting policies required by IFRS : None 2) Changes in accounting policies for other reasons : None : None 3) Changes in accounting estimates (3) Number of shares issued and outstanding (common stock) 1) Number of shares issued and outstanding at end of period (including treasury shares) 2) Number of treasury shares at 3) Average number of shares end of period during period Fiscal year ended March 31, 2022 13,394,990 shares 13,334,390 shares Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2021 12,821,970 shares 12,760,839 shares 528,885 shares 528,293 shares Reference: Summary of nonconsolidated financial results 1. Nonconsolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 to March 31, 2022) (1) Nonconsolidated Operating Results Operating income Million yen Operating profit Million yen Ordinary income Million yen 3,098 1,514 1,470 % 34.4 (% change from previous fiscal year) % 38.9 Net profit Million yen 1,423 % 37.9 2,404 (14.7) 1,127 (14.9) 1,058 (15.7) 1,032 (17.5) Earnings per share Diluted earnings per share Yen (2) Nonconsolidated Financial Position Total assets Net assets Equity capital ratio Net assets per share % 42.3 33.4 Yen 418.15 350.79 FY Ended March 31, 2022 Reference: Equity capital Note: Financial figures for nonconsolidated financial results are calculated based on Japanese GAAP. * Consolidated financial results are not subject to audits by a certified public accountant or auditing firm. * Note to ensure appropriate use of forecasts and other remarks 5,348 million yen FY Ended March 31, 2021 4,492 million yen 1. For additional information on financial results, also refer to the explanatory materials on financial results released today. Financial results explanatory materials: http://ir.premium-group.co.jp/ja/library/presentation.html 2. The above consolidated earnings forecasts have been prepared based on the information we have obtained as of the date of publication of this material and certain assumptions that we deem reasonable, and the actual earnings will depend on various factors in the future. It may differ from the expected value. 110.00 79.94 Million yen 5,380 4,492 – 2 – Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 % 28.9 Yen 110.98 80.88 Million yen 12,635 13,446 Contents of Attachments 1. Summary of Business Results …………………………………………………………………………………………………………………….. 4 2. Basic Thinking on Selection of Accounting Standards …………………………………………………………………………………… 7 3. Consolidated Financial Statements and Major Notes ……………………………………………………………………………………… 8 (1) Consolidated Statement of Financial Position ……………………………………………………………………………………….. 8 (2) Consolidated Statement of Profit and Loss ……………………………………………………………………………………………. 9 (3) Consolidated Statement of Comprehensive Income ……………………………………………………………………………… 10 (4) Consolidated Statement of Changes in Equity ……………………………………………………………………………………… 11 (5) Consolidated Statement of Cash Flows ………………………………………………………………………………………………. 13 (6) Notes on the Consolidated Financial Statements ………………………………………………………………………………….. 14 (Notes concerning the going-concern assumption) ……………………………………………………………………………….. 14 (Changes in accounting policies) ……………………………………………………………………………………………………….. 14 (Changes in presentation methods) …………………………………………………………………………………………………….. 14 (Changes in accounting estimates) ……………………………………………………………………………………………………… 14 (Segment information) ……………………………………………………………………………………………………………………… 15 (Earnings per share) …………………………………………………………………………………………………………………………. 16 (Important subsequent events) …………………………………………………………………………………………………………… 16 – 3 – 1. Summary of Business Results (1) Summary of business results during the period under review The Japanese economy trended toward recovery during the current consolidated fiscal year under review (April 1, 2021 to March 31, 2022), bolstered by efforts to halt the spread of the COVID-19 pandemic and widening vaccinations. Nevertheless, amid factors including the emergence of new COVID-19 variants and supply chain disruptions due to the chip supply shortage, the outlook for the future remains unclear. Performance in the used vehicle market, the Company’s main target business area, slipped from the previous year. The number of used ordinary passenger vehicles registered in Japan from April 2021 through March 2022 fell to 3,169,492 vehicles (down 5.8% from the previous consolidated fiscal year). (Source: Statistical data from the Japan Automobile Dealers Association) Based on the assumption of thoroughgoing compliance reflecting changes in the external business environment, including regulatory changes, we seek to realize our mission to contribute to the construction of a prosperous society by providing top level financing and services to the world and to foster employees who are broadminded, have a positive outlook, and assiduously work their way towards creating results. In addition to Credit Finance and Auto Warranty services, to expand business interactions and accelerate growth in the scope of our operations and in our earnings, we provide a comprehensive line of auto mobility services that assist in motor vehicle procedures undertaken by used vehicle dealers and auto repair shops, our major client base. At the same time, we are taking on the challenge of implementing various initiatives to realize a new growth model. The status of each business is summarized below. The results shown exclude revenues from internal sales between segments. Additionally, the segment information for the previous fiscal year has been calculated in the same method as for the current fiscal year, and only operating revenues (external revenues) have been restated. Challenging market conditions persisted in the Finance Business. New vehicle sales fell for various reasons, including supply chain disruptions attributable to the chip supply shortage. The shrinking pool of used vehicles led to rising prices for used vehicles. Under such conditions, the volume of credit increased from the two preceding years due to more efficient sales activities following the migration to paperless contracts and the expansion of member services. Structural enhancements implemented via a reorganization of the sales organization and improved efficiency in servicing of claims in arrears based on the digital transformation (DX) of operations, as well as steady servicing results attributable to consolidated subsidiary Central Servicer Corporation, resulted in operating income of 13,518 million yen, up 11.8% from the previous consolidated fiscal year, and segment income of 3,099 million yen. In the Automobile Warranty Business, as with the Finance Business, the total volume of new warranties rose from the two preceding years. This growth, which occurred despite slowing growth in the volume of alliance products, is attributable to several factors: improvements in management structures and efficiency based on sales promotions for our own products, the reassignment of sales staff specializing in alliance products, and a more precise division of responsibilities in the back-office organization. We also directed vehicle repairs to our network of auto repair shops and cut repair costs by using used parts procured within the Group. As a result, operating income was 4,446 million yen (up 9.5% from the previous consolidated fiscal year), while segment income was 637 million yen. In the Auto Mobility Business, operating income was 2,863 million yen (up 71.3% from the previous consolidated fiscal year), while segment income at 26 million yen returned to positive territory, after recording a segment loss in the previous consolidated fiscal year. These results are attributable to growth in parts sale and wholesale vehicles sale as well as growth in service volumes resulting from expanding our networks of affiliates and auto repair shops and growing member services. In our international businesses, gains on equity method investments were 213 million yen thanks to improved performance by Eastern Commercial Leasing p.l.c. in Thailand. Operating costs rose to 16,992 million yen, up 14.1% from the previous consolidated fiscal year. Measures to reduce expenses, including cost-cutting in the Automobile Warranty Business and computerizing various business processes through digital transformation (DX), helped absorb increases in various expenses generated by business expansion. These factors resulted in operating income of 20,827 million yen, up 16.8% from the previous consolidated fiscal year; profits before tax in this consolidated fiscal year of 4,017 million yen, up 16.0% from the previous consolidated fiscal year; and profits attributable to owners of parent of 2,941 million yen, up 23.4% from the previous consolidated fiscal year. – 4 – (2) Summary of financial position during the period under review (Assets) At the end of the consolidated fiscal year under review, total assets stood at 81,800 million yen, up 13,645 million yen from the end of the previous consolidated fiscal year. This was due mainly to an increase of 7,619 million yen in financial receivables and 3,379 million yen in other financial assets. (Liabilities) At the end of the consolidated fiscal year under review, total liabilities stood at 71,987 million yen, up 11,122 million yen from the end of the previous consolidated fiscal year. This was due mainly to an increase of 4,986 million yen in financial guarantee policies and 4,118 million yen in borrowings. (Capital) At the end of the consolidated fiscal year under review, total capital stood at 9,814 million yen, up 2,523 million yen from the end of the previous consolidated fiscal year, due mainly to an increase of 2,320 million yen in retained earnings and other factors. Total equity attributable to owners of parent grew 2,499 million yen from the end of the previous consolidated fiscal year to 9,710 million yen. (3) Cash flow position during the period under review A look at cash flow during the consolidated fiscal year under review shows total cash flow from operating activities of 1,068 million yen (vs. 1,321 million yen in cash flow used in operating activities in the previous consolidated fiscal year); total cash flow used in investing activities of 1,028 million yen (vs. 1,172 million yen in cash flow used in investing activities in the previous consolidated fiscal year); and total cash flow from financing activities of 2,797 million yen (vs. 1,617 million yen in cash flow from financing activities in the previous consolidated fiscal year). Cash and cash equivalents (“funds” hereinafter) at the end of this consolidated fiscal year stood at 11,433 million yen, up 3,379 million yen from the end of the previous consolidated fiscal year. The status of each type of cash flow and key associated factors for the consolidated fiscal year are summarized below. (Cash flow from operating activities) Funds secured from operating activities during the consolidated fiscal year under review totaled 1,068 million yen. Major revenues from operating activities included 4,017 million yen in profit before tax and an increase of 4,986 million yen in financial guarantee contracts. Major expenditures included an increase of 7,619 million yen in financial receivables and an increase of 1,251 million yen in other assets. (Cash flow from investing activities) Funds diverted to investments during the consolidated fiscal year under review totaled 1,028 million yen. Major expenditures on investment efforts included expenditures of 576 million yen on the acquisition of property, plant, and equipment and 285 million yen on the acquisition of intangible assets. (Cash flow from financing activities) Funds secured from financing activities during the consolidated fiscal year under review totaled 2,797 million yen. Major revenues from financing activities included 15,100 million yen in short-term borrowings and 11,048 million yen in long-term borrowings. Major expenditures included 16,000 million yen in repayment of short-term borrowings and 6,063 million yen in repayment of long-term borrowings. – 5 – (4) Future outlook During the next consolidated fiscal year (April 1, 2022 to March 31, 2023), the outlook for the used vehicle market, the primary market in which we operate, is expected to remain uncertain. Various factors contribute to this uncertainty, including slower new vehicle production due to the global chip shortage and the impact of COVID-19, delays in supplies of parts following Russia’s invasion of Ukraine, and the lower numbers and rising cost of used vehicles on the market. However, given the essential nature of cars for the activities of individual consumers, the used vehicle market, the primary market in which we operate, is likely to exhibit firm and stable demand and we expect to see improvements in consolidated business performance forecasts for the fiscal year ending March 2023. Despite such challenging market conditions, the Group will strive to improve business performance by cutting costs, maximizing synergies among our three business segments, and promoting digital transformation (DX) to improve business efficiency. The next consolidated fiscal year will be the final fiscal year of the Value Up↗2023 medium-term management plan announced in May 2021. In addition to promoting the adoption of membership organizations for auto dealers and auto repair shops, unifying the brands of the membership organizations with establishing Car Premium., Ltd. in April 2022 and serving as a platform connecting individual customers to these auto dealers and auto repair shops, we will strive to achieve coexistence, coprosperity, and sustained mutual progress in members and convenient, safe, and reliable automotive lifestyles for end users in an auto industry said to have reached a once-in-a-century turning point. – 6 – 2. Basic Thinking on Selection of Accounting Standards Since the fiscal year ended March 2016 (fiscal year no. 1), the Group has applied the International Financial Reporting Standards (IFRS) to make international comparisons more useful, improve access to financial information in capital markets, and facilitate the preparation of consolidated financial statements for the Group, including overseas affiliates. – 7 – 3. Consolidated Financial Statements and Major Notes (1) Consolidated Statement of Financial Position (Unit: million yen) Previous consolidated fiscal year (March 31, 2021) This consolidated fiscal year (March 31, 2022) Assets Cash and cash equivalents Financial receivables Other financial assets Property, plant, and equipment Intangible assets Goodwill Investments accounted for using equity method Deferred tax assets Insurance assets Other assets Total assets Liabilities Financial guarantee contracts Borrowings Other financial liabilities Provisions Income taxes payable Deferred tax liabilities Other liabilities Total liabilities Equity Equity attributable to owners of parent Capital Share premium Treasury shares Retained earnings Other components of equity Total equity attributable to owners of parent Non-controlling interests Total equity Total liabilities and equity 8,054 28,115 5,108 3,644 5,768 3,958 1,434 2 3,111 8,961 68,156 25,079 19,641 6,703 302 648 1,404 7,087 60,865 1,612 1,281 (1,201) 5,403 116 7,211 79 7,291 68,156 11,433 35,733 5,786 3,648 6,279 3,958 1,600 3 3,284 10,075 81,800 30,065 23,759 7,248 366 720 1,238 8,590 71,987 1,700 1,295 (1,201) 7,722 194 9,710 103 9,814 81,800 – 8 – (2) Consolidated Statement of Profit and Loss (Unit: million yen) Previous consolidated fiscal year (From April 1, 2020 to March 31, 2021) This consolidated fiscal year (From April 1, 2021 to March 31, 2022) Operating income Other finance income Share of profit of investments accounted for using equity method Other income Total income Operating expense Other finance cost Other expense Total expense Profit before tax Income tax expense Profit Attributable to Owners of parent Non-controlling interests Profit Earnings per share attributable to owners of parent Basic earnings per share (yen) Diluted earnings per share (yen) 17,825 9 59 694 18,586 14,891 64 168 15,123 3,463 1,070 2,393 2,383 10 2,393 186.74 184.55 20,827 17 213 47 21,104 16,992 41 55 17,087 4,017 1,053 2,964 2,941 23 2,964 229.39 227.36 – 9 – (3) Consolidated Statement of Comprehensive Income (Unit: million yen) Previous consolidated fiscal year (From April 1, 2020 to March 31, 2021) This consolidated fiscal year (From April 1, 2021 to March 31, 2022) Profit Other comprehensive income Items that may be reclassified to net profit or loss Exchange differences on translation of foreign operations Share of other comprehensive income of investments accounted for using equity method Other comprehensive income (net of tax) Comprehensive income Attributable to: Owners of parent Non-controlling interests Comprehensive income 2,393 (1) 55 53 2,447 2,437 9 2,447 2,964 (4) 50 46 3,010 2,988 22 3,010 – 10 – (4) Consolidated Statement of Changes in Equity Equity attributable to owners of parent (Unit: million yen) Capital Share premium Treasury shares Retained earnings Other components of equity Exercise of warrants Share of other comprehensive income of investments accounted for using equity method Balance as of April 1, 2020 Comprehensive income Profit Other comprehensive income Total comprehensive income Transactions with owners, etc. Issuance of new shares Purchase of treasury shares Dividends Share-based payment transactions Total transactions with owners, etc. Balance as of March 31, 2021 Comprehensive income Profit Other comprehensive income Total comprehensive income Transactions with owners, etc. Issuance of new shares Purchase of treasury shares Dividends Capital transactions with non-controlling interests Share-based payment transactions Total transactions with owners, etc. Balance as of March 31, 2022 1,260 – – – 6 – – 15 21 1,281 – – – 6 – – (11) 19 14 1,295 (1,201) – – – – (0) – – (0) (1,201) – – – – (1) – – – (1) (1,201) 3,587 2,383 – 2,383 – – (568) – (568) 5,403 2,941 – 2,941 – – (621) – – (621) 7,722 10 – – – (3) – – 3 0 10 – – – (3) – – – 33 30 40 53 – 55 55 – – – – – 108 – 50 50 – – – – – – 158 1,534 – – – 6 – – 72 78 1,612 – – – 6 – – – 82 88 1,700 – 11 – Balance as of April 1, 2020 Comprehensive income Profit Other comprehensive income Total comprehensive income Transactions with owners, etc. Issuance of new shares Purchase of treasury shares Dividends Share-based payment transactions Total transactions with owners, etc. Balance as of March 31, 2021 Comprehensive income Profit Other comprehensive income Total comprehensive income Transactions with owners, etc. Issuance of new shares Purchase of treasury shares Dividends Capital transactions with non-controlling interests Share-based payment transactions Total transactions with owners, etc. Balance as of March 31, 2022 Equity attributable to owners of parent (Unit: million yen) Non- controlling interests Total Total equity Other components of equity Exchange differences on translation of foreign operations Total 62 – 54 54 (3) – – 3 0 116 – 47 47 (3) – – – 33 30 194 (1) – (1) (1) – – – – – (2) – (3) (3) – – – – – – (5) 5,242 2,383 54 2,437 9 (0) (568) 91 (468) 7,211 2,941 47 2,988 9 (1) (621) (11) 134 (489) 9,710 70 10 (1) 9 – – – – – 79 23 (1) 22 – – – 2 – 2 103 5,312 2,393 53 2,447 9 (0) (568) 91 (468) 7,291 2,964 46 3,010 9 (1) (621) (9) 134 (487) 9,814 – 12 – (Unit: million yen) Previous consolidated fiscal year (From April 1, 2020 to March 31, 2021) This consolidated fiscal year (From April 1, 2021 to March 31, 2022) (5) Consolidated Statement of Cash Flows Cash flow from operating activities Profit before tax Depreciation and amortization expense Other finance income and finance costs Decrease (increase) in financial receivables Increase (decrease) in financial guarantee contracts Decrease (increase) in other financial assets Increase (decrease) in other financial liabilities Decrease (increase) in other assets Increase (decrease) in other liabilities Share of loss (profit) of investments accounted for using equity method Other Subtotal Interest received Dividends received Interest paid Income taxes paid Income taxes refunded Cash flow from (used in) operating activities Cash flow from investing activities Purchase of investment securities Purchase of property, plant, and equipment Purchase of intangible assets Payments for loans receivable Collection of loans receivable Payments for guarantee deposits Proceeds from collection of guarantee deposits Cash flow from acquisition of subsidiary Cash flow from acquisition of affiliate Other Cash flow from (used in) investing activities Cash flow from financing activities Proceeds from short-term loans Repayments of short-term loans Proceeds from long-term loans Repayments of long-term loans Repayments of lease obligations Payments for purchase of treasury shares Dividends paid Other Cash flow from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of period – 13 – 3,463 1,316 213 (5,643) 3,016 (432) 681 (869) 785 (59) (392) 2,077 2 – (153) (930) 325 1,321 (1) (911) (300) (21) 15 (121) 182 (94) (48) 127 (1,172) 14,474 (9,959) 4,076 (5,740) (755) (0) (567) 89 1,617 1,766 6,286 2 8,054 4,017 1,294 185 (7,619) 4,986 (504) 369 (1,251) 1,428 (213) 134 2,825 1 98 (153) (1,344) 181 1,608 (1) (243) (576) (20) 15 (285) 103 – – (22) (1,028) 15,100 (16,000) 11,048 (6,063) (805) (1) (621) 139 2,797 3,378 8,054 1 11,433 (6) Notes on the Consolidated Financial Statements (Notes concerning the going-concern assumption) Not applicable (Changes in accounting policies) Not applicable (Changes in presentation methods) 1. Consolidated Statement of Financial Position From the current consolidated fiscal year, lease investment assets, which had been included in other financial assets in the previous consolidated fiscal year, are included as financial receivables. This reflects the growing importance of the lease business during the consolidated fiscal year under review. To reflect this change in presentation methods, 4,721 million yen included in other financial assets on the Consolidated Statement of Financial Position for the previous consolidated fiscal year have been transferred to financial receivables. 2. Consolidated Statement of Profit and Loss Starting with the consolidated fiscal year under review, in line with the change in presentation methods on the Consolidated Statement of Financial Position, interest expenses on lease investment assets are included in operating expenses. They had previously been included in other finance costs. To reflect this change in presentation methods, 35 million yen that had been included in other finance costs on the Consolidated Statement of Profit and Loss for the previous consolidated fiscal year have been transferred to operating expenses. 3. Consolidated Statement of Cash Flows In line with the change in presentation methods on the Consolidated Statement of Financial Position, lease investment assets, which had been included in decrease (increase) in other financial assets, are included in decrease (increase) in financial receivables starting with the consolidated fiscal year under review. To reflect this change in presentation methods, an increase of 2,992 million yen included in decrease (increase) in other financial assets on the Consolidated Statement of Profit and Loss for the previous consolidated fiscal year has been transferred to decrease (increase) in financial receivables. (Changes in accounting estimates) Not applicable – 14 – (Segment information) (1) Overview of operating segments The Group’s operating segments are the constituent units of the Group for which separate financial information is available. These units are subject to periodic review by the Board of Directors to determine the allocation of management resources and to evaluate business performance. Through the previous consolidated fiscal year, the Credit-related Business was the Group’s only reporting segment. However, revenues from businesses other than Credit Finance have since grown. Accordingly, starting from the first quarter of this consolidated fiscal year, the Group began organizing management by business segment, including management of business results, by reporting them to the Board of Directors by business segment. In doing so, we employ three reporting segments—Finance Business, Automobile Warranty Business, and Automotive Mobility Services Business—based on the business areas that had been used previously in management by business service. A summary of each reporting segment is provided below. The Finance Business consists mainly of the Credit Finance Business and Auto Leasing Business, which provide financing services to enable customers to pay for purchases of products and services in installments, and debt collection services. The Automobile Warranty Business consists of automobile warranty services that enable customers who choose to add automobile warranty plans when purchasing vehicles through the Group’s partners to receive repairs free of charge, within the scope specified in advance, for mechanical problems with their purchased vehicles, in exchange for payment of a fixed warranty charge. The Automotive Mobility Services Business is made up chiefly of automotive mobility services, which provide multiple services needed for the automobile distribution business (such as the sale of auto parts, wholesale vehicles, and software). The Group does not allocate assets and liabilities to the business segments employed by the Board of Directors. (2) Operating segment operating income and profit The Group’s figures on profit or loss by segment are prepared using the same standards as those for consolidated financial statements. Adjustments and companywide figures include profit and loss not allocated to specific business segments and elimination entries for internal transactions between segments. Prices of internal transactions between segments are based on actual market prices. Beginning in the first quarter of the consolidated fiscal year, the Group changed the units used in evaluations of business results by the Board of Directors to the three business segments of the Finance Business, Automobile Warranty Business, and Automotive Mobility Services Business. Since the Group has managed profit and loss by segment since the first quarter of this consolidated fiscal year, segment information for the previous consolidated fiscal year has been calculated, to the extent practical, using the same methods as those for the consolidated fiscal year under review. Only revenues from external customers have been restated. (3) Regional information Information on operating profits by region is omitted because operating profits from external customers attributable to the domestic market account for the bulk of operating profits on the Consolidated Statement of Profit and Loss. In addition, information on non-current assets by region is omitted because the book value of non-current assets attributable to domestic locations accounts for the bulk of non-current assets on the Consolidated Statement of Financial Position. (4) Information on important customers Information on important customers is omitted because the Group’s businesses target ordinary consumers and no single external customer (or group) accounts for 10% or more of the Group’s operating profit. (5) Information on products and services Information on products and services is omitted because the category of products and services is identical to the reporting segment. Previous consolidated fiscal year (April 1, 2020 to March 31, 2021) (Unit: million yen) Reporting segment Automobile Warranty Automotive Mobility Services Total Other Consolidated Adjustments and companywide figures Revenues Revenues from external customers 12,094 4,059 1,671 17,825 – – 17,825 Finance – 15 – Consolidated fiscal year under review (April 1, 2021 to March 31, 2022) (Unit: million yen) Reporting segment Automobile Warranty Automotive Mobility Services Finance Total Other Consolidated Revenues Adjustments and companywide figures – 238 1 17 20,827 4,017 13,518 4,446 2,863 20,827 3,099 637 26 3,762 The bases for calculations of basic earnings per share and diluted earnings per share are shown below. Revenues from external customers Segment profit/loss Profit before tax (Earnings per share) (1) Basic earnings per share Profit attributable to owners of common stock of parent (million yen) Weighted average of total number of shares issued and outstanding during the period (shares) Basic earnings per share (yen) (2) Diluted earnings per share Profit attributable to owners of common stock of parent (million yen) Profit used to calculate diluted earnings per share (million yen) Basic weighted average of number of shares of common stock (shares) Adjustments related to stock options issued by parent (shares) Weighted average of number of shares of common stock used to calculate diluted earnings per share (shares) Diluted earnings per share (yen) (Important subsequent events) Not applicable Previous consolidated fiscal year (From April 1, 2020 to March 31, 2021) This consolidated fiscal year (From April 1, 2021 to March 31, 2022) 2,383 2,941 12,760,839 186.74 12,821,970 229.39 Previous consolidated fiscal year (From April 1, 2020 to March 31, 2021) This consolidated fiscal year (From April 1, 2021 to March 31, 2022) 2,383 2,383 12,760,839 151,235 12,912,075 184.55 2,941 2,941 12,821,970 114,539 12,936,509 227.36 – 16 –