Performance Trend 1. Overview of performance for FY3/2024 Consolidated performance for FY3/2024 of G-7 Holdings <7508> was 192,992 million yen in increased operating income of 9.1% over the previous year, and increased ordinary income of 7.4% to 7,318 million yen, and attributed to the parent company's net income of 5,175 million yen, an increase of 35.3% over the previous year. Sales were driven by the Business Supermarket Business and the Meat Business, and continued to set a new record high, exceeding the company's plan by 4.3%. However, in terms of profits, the automobile-related business was affected by a decrease in profits due to poor sales of winter tires due to a warm winter, and could not reach the company's plan, it turned to a profit increase for the second time due to the growth of other businesses centered on the Business Supermarket business. The sales cost ratio has increased by 0.8 points over the previous year due to changes in the sales composition ratio; however, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main reasons for the increase/decrease of selling, general and administrative expenses were a decrease of 600 million yen in energy costs due to subsidies from rising electricity prices, and an increase of 1 billion yen in labor costs due to improvements in employee treatment and increased education costs. In addition to this, depreciation expenses increased by nearly 600 million yen due to rising construction material costs and rising costs of opening stores etc. The EBITDA margin has increased by 0.1 points from the previous year. Also, the reason for the large increase in the net income of the parent company's shareholders attributable to the current period is due to the elimination of 500 million yen in retirement benefits paid to executives that were recorded as special losses in the previous year, a decrease of 455 million yen in impairment losses, and a gain of 127 million yen on the sale of investment securities in FY3/2024.

2. Financial condition and performance indicators.

As of the end of March 2024, the financial situation of Joshin Denki <8173> showed total assets of JPY 232,775 million, an increase of JPY 9,557 million compared to the previous year-end. The main reason for this increase was due to an increase of JPY 9,446 million in current assets, of which cash and deposits increased by JPY 1,122 million, accounts receivable increased by JPY 2,407 million, and inventories increased by JPY 2,140 million. Fixed assets remained at JPY 108,769 million, an increase of JPY 112 million compared to the previous year-end, with no significant movement in tangible or intangible fixed assets. On the other hand, total liabilities increased by JPY 5,642 million compared to the previous year-end, to JPY 128,162 million. The main reason for this increase was a decrease in current liabilities due to a decrease of JPY 3,632 million in bills and accounts payable, while short-term interest-bearing debt increased by JPY 1,744 million. In fixed liabilities, long-term borrowings increased by JPY 5,395 million. Total equity increased by JPY 3,915 million compared to the previous year-end, to JPY 104,613 million.

Looking at the performance indicators, as of the end of March 2024, the equity ratio was 44.9% and the current ratio was 146.6%, indicating sufficient financial safety on the balance sheet. The balance of investment securities was JPY 8,017 million, with a gain on the sale of investment securities of JPY 1,159 million recorded on the income statement and income of JPY 1,525 million from the sale of investment securities recorded on the cash flow statement. It is expected that around 20% of the total investment securities held will be sold within a year, with Daikin Industries <6367> and Asics <7936> being the largest components of the market value. In the future, as the trend of reducing shareholdings continues, expectations for further strengthening of shareholder returns as a source of funds through the sale of investment securities are likely to increase.

(Author: Hiroki Nagao, FISCO guest analyst)