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.

3. Financial Condition and Management Indicators

Creek and River Co., Ltd. <4763> total assets for the interim period of February 2025 increased by 3,245 million yen compared to the previous period, reaching 28,664 million yen. In 2024, due to August end falling on a holiday, various debt payment dates were pushed to the beginning of the following month, resulting in an inflated balance mainly centered on cash and deposits. Looking at the main factors of increase and decrease, cash and deposits in current assets increased by 2,783 million yen, while tangible fixed assets increased by 355 million yen and intangible fixed assets such as software increased by 186 million yen.

Total liabilities increased by 3,670 million yen compared to the previous period to 13,343 million yen. Interest-bearing liabilities increased by 1,629 million yen, and trade accounts payable and advances received increased by 307 million yen and 1,413 million yen, respectively. The increase in advances received was due to the payment date of social insurance premiums being pushed to the beginning of the following month. Total net assets decreased by 424 million yen to 15,320 million yen. Although quarterly net profit attributable to parent company shareholders was recorded at 1,470 million yen, the decrease was attributed to dividend payments of 918 million yen and the acquisition of treasury stocks worth 994 million yen.

In terms of management indicators, the self-capital ratio, which indicates the safety of management, decreased from 61.2% to 53.0% compared to the previous period. This was influenced by the August year-end holiday leading to an increase in liabilities and the implementation of treasury stock acquisitions. However, the net cash (cash and deposits - interest-bearing liabilities) increased by 1,154 million yen to a record high of 10,078 million yen, indicating that the financial situation continues to be healthy. The company continues to demonstrate a policy of allocating available cash towards growth investments, M&A funds, and shareholder returns.

(Written by FISCO guest analyst, Jo Sato)