Summary of Financial Results for the Third Quarter of Fiscal Year 2023
(Nine Months Ended September 30, 2023)[Japanese GAAP]
November 14, 2023

Company name: SENSHUKAI CO.,LTD.

Stock exchange: Tokyo Stock Exchange
Stock code:
8165
URL: https://www.senshukai.co.jp
Representative:
Mr. Kenji Kajiwara, President and Representative Director
Inquiries:
Mr. Tetsuya Takahashi,Managing Executive Officer, General Manager, Corporates Headquarters
Tel: +81-6-6881-3220
Scheduled date of filing of Quarterly Report: November 14, 2023
Scheduled date of payment of dividend: Preparation of supplementary materials for quarterly financial results: None
Holding of quarterly financial results meeting: None
(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the 3rd Quarter of 2023 (January 1, 2023 – September 30, 2023)(1) Consolidated operating results (cumulative)
Net sales(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable toOperating profit
Ordinary profit
owners of parent
Millions of yen%

3Q 2023
35,845 (14.3)(4,958)
3Q 2022
41,840(6,316)
Note: Comprehensive income (millions of yen) 3Q 2023: (4,213) (-%)

Millions of yen%-

Millions of yen%

Millions of yen%(4,664)(8,670)-(5,002)(6,130)
3Q 2022: (8,182) (-%)

Net income per share

Diluted net income per share

Yen

Yen

3Q 2023(99.66)
3Q 2022(184.98)
Note: Starting with the beginning of 2022, Senshukai has applied Accounting Standard for Revenue Recognition (AccountingStandards Board of Japan (ASBJ) Statement No. 29, March 31, 2020). All figures for 3Q 2022 incorporate this accounting
standard and comparisons with 3Q 2021 are omitted.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

3Q 2023
30,381
17,805
Fiscal Year 2022
38,92322,019Reference: Shareholders’ equity (millions of yen) 3Q 2023: 17,799

Net assets per share
%

Yen

58.6
56.5
Fiscal Year 2022: 21,999

380.35469.792. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal Year 2022
0.00
Fiscal Year 2023
0.00
Fiscal Year 2023 (forecasts)
Note: Revision to the most recently announced dividend forecast: None

-

0.00

0.00

0.00

0.00

3. Consolidated Outlook for Fiscal Year 2023 (January 1, 2023 – December 31, 2023)
Net sales
Millions of yen(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable to Net income per
Operating profit
Ordinary profit
owners of parent
share% Millions of yen% Millions of yen% Millions of yen%

Yen

Full Year 2023
48,000 (18.5)(6,200)(6,200)(5,600)(119.64)
Note: Revision to the most recently announced consolidated outlook: Yes
For more information, please refer to “Notice of Revisions to Full-Year Consolidated Forecasts, Withdrawal of Numerical
Targets in the Medium-Term Management Plan, and Reduction of Executive Compensation” (Japanese version only) that
was announced today (November 14, 2023).

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to “2. Quarterly Consolidated Financial Statements and Notes, ( 3) Notes to Quarterly Consolidated
Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial
Statements)” on page 9 for further information.

(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of shares outstanding (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
3Q 2023:

52,056,993 sharesFiscal Year 2022:

52,056,993 sharesFiscal Year 2022:

5,229,999 shares

3Q 2022:46,870,067 shares

2) Number of treasury shares at the end of the period
3Q 2023:

5,259,682 shares

3) Average number of shares outstanding during the period
3Q 2023:

46,808,906 shares* This quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
* Cautionary statement with respect to forward-looking statements
Cautionary statement with respect to forecasts
The above projections are based on information available at the time of release of this report. Actual results could differ
significantly from these projections due to a variety of factors. For further details regarding the projections, please refer to page3, “1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecasts andOther Forward-looking Statements.”

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income6

Quarterly Consolidated Statement of Income(For the Nine-month Period)

6

Quarterly Consolidated Statement of Comprehensive Income(For the Nine-month Period)7(3) Notes to Quarterly Consolidated Financial Statements

8(Going Concern Assumption)

8(Significant Changes in Shareholders’ Equity)

9(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements ) 9(Additional Information)

10(Segment Information)

11(Significant Subsequent Events)

12

3. Other

12

Important Matters Regarding Going Concern Assumption, Etc.

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12

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first nine months (January 1 to September 30) of 2023, the Japanese economy steadily returned to normal
with the easing of COVID-19-related restrictions. However, the outlook remains uncertain due to concerns about
growing geopolitical risks in addition to the rapid depreciation of the yen and rising commodity prices against a
backdrop of surging global resource prices.
The retail industry is facing a challenging business environment due to the increase in various costs, including
purchase prices and logistics expenses, as well as consumers’ growing thriftiness and preference for low prices in
response to accelerating price hikes. Moreover, in the mail-order and online shopping industry, while the use of ecommerce for purchasing goods has become more established, competition has intensified as consumers, having
greater opportunities to go out, are making greater use of physical stores and more companies are entering the mailorder and online shopping industry.
In this business environment, during the first nine months of 2023, the Group focused on implementing the measures
set forth in its medium-term management plan, including a digital shift of the mail-order and online shopping
business, profit structure reforms, and co-creation with partner companies. Although the effects of these measures
are steadily emerging, sales fell year on year due to a decline in the effective number of members (those who madea purchase within 12 months), which is taken as the base. This happened mainly because of the greater-than-expected
impact of a reduction in orders received following a fall in the number of catalogs distributed during July to
September. As a result, net sales in the first nine months of 2023 decreased 14.3% YoY to 35,845 million yen,operating loss was 4,958 million yen (compared with a loss of 6,316 million yen in the first nine months of 2022),
and ordinary loss was 5,002 million yen (compared with a loss of 6,130 million yen in the first nine months of 2022).
Loss attributable to owners of parent was 4,664 million yen (compared with a loss of 8,670 million yen in the firstnine months of 2022).
Business segment performance was as follows.
(Mail-order and Online Shopping Business)
In the mail-order and online shopping business, which primarily uses catalogs and the Internet, the Group shifted its
sales promotion expenses from high-cost catalog-centered to digitally integrated promotions in the first nine monthsof 2023, and also made advances in optimizing the promotions. The aim was to improve profitability and build afoundation for growth. However, while costs were curtailed by reducing the number of catalog copies distributed,
the digital marketing measures were unable to compensate for the resulting fall in sales. As a result, consolidated
sales in the mail-order and online shopping business decreased 15.1% YoY to 31,326 million yen in the first ninemonths of 2023. There was an operating loss of 5,229 million yen compared with a loss of 6,556 million yen in thefirst nine months of 2022.
(Corporates Business)
In the corporates business, which provides products and services to corporations, sales of novelties related toshareholders’ special benefits and other items increased, but the use of agency services such as corporate logistics
operations failed to grow as expected. Consolidated sales in the corporates business decreased 12.0% YoY to 3,064
million yen in the first nine months of 2023. Operating profit decreased 86.4% YoY to 20 million yen.
(Insurance Business)
This business provides support, mainly to Belle Maison members, for choosing the most suitable insurance policies.
Consolidated sales increased 9.4% YoY to 377 million yen in the first nine months of 2023 and operating profit
increased 16.7% YoY to 204 million yen.
(Others)
Consolidated sales in other businesses, which include the childcare support business, decreased 4.6% YoY to 1,076
million yen in the first nine months of 2023. Operating profit was 46 million yen compared with a loss of 81 million
yen in the first nine months of 2022.

-2-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

(2) Explanation of Financial Position(Balance sheet position)
Assets totaled 30,381 million yen at the end of the third quarter of 2023, a decrease of 8,542 million yen from theend of 2022.
Current assets decreased 8,085 million yen to 16,502 million yen. The factors included decreases of 5,869 million
yen in cash and deposits, and 2,360 million yen in accounts receivable-other. Non-current assets decreased 456
million yen to 13,878 million yen. The factors included decreases of 94 million yen in property, plant and equipment,
225 million yen in intangible assets, and 136 million yen in investments and other assets.
Current liabilities decreased 3,915 million yen to 9,186 million yen. The factors included a decrease of 2,879 million
yen in electronically recorded obligations-operating. Non-current liabilities decreased 413 million yen to 3,389
million yen. The main factors included a decrease of 440 million yen in long-term borrowings.
Net assets decreased 4,213 million yen to 17,805 million yen. The factors included booking of loss attributable toowners of parent of 4,664 million yen. As a result, the equity ratio was 58.6%.
(3) Explanation of Consolidated Forecasts and Other Forward-looking Statements
Senshukai revised its consolidated forecasts for fiscal year 2023 (January 1, 2023 to December 31, 2023) that was
released on June 23, 2023. For more information, please refer to “Notice of Revisions to Full-Year Consolidated
Forecasts, Withdrawal of Numerical Targets in the Medium-Term Management Plan, and Reduction of Executive
Compensation” (Japanese version only) that was announced today (November 14, 2023).

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
3Q 2023(As of Sep. 30, 2023)

Fiscal Year 2022
(As of Dec. 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade, and contract
assetsMerchandise and finished goods

9,287

3,417

1,940

1,969

6,871

7,001

Accounts receivable-other

5,147

2,786

Other

1,423

1,532

Allowance for doubtful accounts

(82)

(206)

24,587

16,502

Buildings and structures, net

3,804

3,706

Land

5,402

5,402

123

127

9,331

9,236

Other

1,465

1,240

Total intangible assets

1,465

1,240

Investment securities

2,417

2,584

Other

Total current assets
Non-current assets
Property, plant and equipment

Other, net
Total property, plant and equipment
Intangible assets

Investments and other assets
1,157

818

Allowance for doubtful accounts

(37)

(1)

Total investments and other assets

3,538

3,401

14,335

13,87838,92330,381

Total non-current assets
Total assets-4-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

(Millions of yen)
3Q 2023(As of Sep. 30, 2023)

Fiscal Year 2022
(As of Dec. 31, 2022)
Liabilities
Current liabilities
Electronically recorded obligations-operating

4,872

1,993

Accounts payable-trade

2,465

2,438

Short-term borrowings

620

620

Income taxes payable19

21

Contract liabilities
Provision for bonuses for directors (and otherofficers)
Provision for bonuses

589

379

5

-

31

195

Other

4,496

3,538

Total current liabilities

13,101

9,186

3,285

2,845

6

6

510

538

Non-current liabilities
Long-term borrowings
Retirement benefit liability
Other
Total non-current liabilities

3,802

3,389

16,903

12,575

Share capital

100

100

Capital surplus

30,08430,084Retained earnings(4,108)(8,773)

Total liabilities
Net assets
Shareholders’ equity

Treasury shares(2,953)(2,953)

Total shareholders’ equity

23,122

18,457

Valuation difference on available-for-sale securities

286

517

Deferred gains or losses on hedges

51

253

(1,516)(1,516)56

88(1,123)(657)

Accumulated other comprehensive income

Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

-5-

20

6

22,01917,80538,92330,381SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive
Income(Quarterly Consolidated Statement of Income)(For the Nine-month Period)
3Q 2022(Jan. 1, 2022 – Sep. 30, 2022)(Millions of yen)
3Q 2023(Jan. 1, 2023 – Sep. 30, 2023)

Net sales

41,84035,845

Cost of sales

21,856

17,979Gross profit

19,984

17,866

Selling, general and administrative expenses

26,30022,824

Operating loss

(6,316)(4,958)Non-operating income
Interest and dividend income

2221

Gain on adjustment of account payable

124

147

Other

263

262

Total non-operating income

410

432

34

34

5

41

106

185

Penalty loss

-

139

Other

79

76

Total non-operating expenses

225

475

(6,130)(5,002)Gain on sale of non-current assets-

218

Gain on sale of investment securities-

137

Gain on sale of shares of subsidiaries and associates

134-

Subsidy income

187-

Total extraordinary income

321

355

13

4

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodCommission expenses

Ordinary loss
Extraordinary income

Extraordinary losses
Loss on sale and retirement of non-current assets
Loss on tax purpose reduction entry of non-current assets

172-

Impairment losses

2,840

99

Total extraordinary losses

3,026

103

(8,835)(4,751)

(161)

(72)

(8,674)(4,679)Loss before income taxes
Income taxes
Loss
Loss attributable to non-controlling interests
Loss attributable to owners of parent

-6-

(4)

(14)

(8,670)(4,664)SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

(Quarterly Consolidated Statement of Comprehensive Income)(For the Nine-month Period)
3Q 2022(Jan. 1, 2022 – Sep. 30, 2022)(Millions of yen)
3Q 2023(Jan. 1, 2023 – Sep. 30, 2023)(8,674)(4,679)Valuation difference on available-for-sale securities

(10)

231

Deferred gains or losses on hedges

465

202

9

16

27

15

492

465

(8,182)(4,213)(8,177)(4,199)

(4)

(14)

Loss
Other comprehensive income

Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests-7-

SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

(3) Notes to Quarterly Consolidated Financial Statements(Going Concern Assumption)
Due to issues related to the replacement of our core system implemented in January 2022, the Senshukai Group
recorded a significant operating loss and loss attributable to owners of parent in 2022. In the first nine months of2023, the Group continued to record a significant operating loss and loss attributable to owners of parent. These
circumstances raise significant doubts about the Group’s ability to continue as a going concern. The Group is
taking the following measures to resolve this situation.
<Measures to improve results of operations>
A. Reforming the mail-order and online shopping business structure1) Enhancing proposal capability (what and for whom) based on a deep understanding of customer needs
Rather than securing sufficient numbers of models to publish catalogs, we will shift to a product lineup with adeep understanding of customers and a greater awareness of themes and seasons. By concentrating resources onnarrowly focused products, we will enhance our product and proposal capabilities, improve the list price sales
ratio, and enhance gross profit margins.
2) Clarifying and integrating the roles of catalogs and digital media
By analyzing customers’ purchasing behavior, we will design the optimal combination of paper-based (including
catalogs, flyers, and direct mail) and digital measures, leveraging the strengths of each to maximize sales
promotion efficiency. As the e-commerce market grows increasingly challenging, the catalog will be used as a tool
to enable differentiation, mainly in the promotion of sales to existing members, while digital media will be usedefficiently to strengthen SEO (search engine optimization) measures and social media marketing and as a tool for
acquisition of new members and communication.
3) Promoting customer retention and fan engagement
Rather than relying on financial incentives such as discounts and points to encourage purchases, we will strengthen
efforts to build trust and attachment to products and brands.
4) Strengthening outsourced e-commerce mall sales
In response to the trend toward oligopoly among major e-commerce malls, we will review the investment allocation
for in-house and outsourced e-commerce malls to capture sales in growth channels.
B. Enhancing company-wide sales and profits
1) Reducing fixed costs
We will methodically reduce fixed costs by such means as cutting system costs, reducing outsourcing costs, andcancelling leased properties.
2) Reorganizing business sectors
We will ensure enhanced profit and growth by making decisions such as withdrawing from business sectors where
profitability and growth are not anticipated and allocating human resources to targeted areas.
C. Deepening and expanding co-creation
1) Deepening and expanding cooperation with JR East
Leveraging original products for the East Japan Railway Company Group (JR East), we will increase sales at JRE
MALL, expanding physical store openings, and growing projects such as contract logistics for the JR East Group.
2) Deepening and expanding reuse & recycling collaboration centered on Aucnet Inc.
By expanding the range of targeted products for the “kimawari” purchasing service and enhancing its handling
capacity, we aim to acquire new members and increase the retention rate and purchase frequency of existing
members.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

3) Strengthening sales of services and experiential products
We will strengthen sales of other companies’ services that can be ordered and purchased on Belle Maison Net, andmake the site useful in customers’ lives through lifestyle proposals that combine goods, services, and experiences.
4) Strengthening the advertising business
Regarding other companies’ advertising placements on Belle Maison Net, we will develop new options such as
tie-up formats, creating lifestyle proposals that are not limited to our own products and services and increasing
sales and profits.
Regarding funds, as of the end of the third quarter of 2023, the Group possessed cash and deposits totaling 3,417
million yen. We have concluded a commitment line agreement with a financial institution we do business with,and as of August 9, 2023, have agreed to revise the content of the agreement. This includes eliminating the financial
covenants in the agreement and contracting for a total commitment of 8,000 million yen. The term of the agreement
expires on March 29, 2024, and enables borrowing for a maximum of six months from the date of execution. Asof the end of the third quarter of 2023, there were no borrowings outstanding under this agreement. The Group is
continuing to work with various financial institutions to obtain ongoing support, but to prepare for the possibilityof non-renewal, we have set up an overdraft facility of 2,000 million yen under a general overdraft agreement inaddition to a special overdraft agreement of about 5,500 million yen, for a total of 7,500 million yen. The general
overdraft agreement has no fixed maturity date, and the special overdraft agreement expires on October 31, 2024.
For information on the renewal of the special overdraft agreement, please refer to “2. Quarterly Consolidated
Financial Statements and Notes, (3) Notes to Quarterly Consolidated Financial Statements (Significant Subsequent
Events).” None of the overdraft agreements had any outstanding borrowings as of the end of the third quarter of2023. We will continue to work closely with financial institutions to ensure further support should we need it in
the future.
However, measures to improve results of operations being undertaken to address significant doubts regarding thegoing concern assumption are currently in progress, and it is possible that the profit and loss and financial benefits
arising from the above-mentioned measures may not be fully realized. The Group recognizes that there issignificant uncertainty regarding the assumption of a going concern as it has yet to determine whether it will beable to procure funds should further support from financial institutions be required.
Furthermore, the quarterly consolidated financial statements have been prepared on the assumption that the Groupwill continue as a going concern and do not reflect the impact of significant uncertainties regarding this assumption.
(Significant Changes in Shareholders’ Equity)
Not applicable.
(Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)(Calculation of tax expense)
Tax expenses are calculated by first determining a reasonable estimate of the effective tax rate after the applicationof tax effect accounting with respect to profit before income taxes for the fiscal year that includes the applicable
quarter and multiplying the profit before income taxes for that quarter by that rate. However, Senshukai uses
legally stipulated effective tax rates to calculate tax expenses when the use of estimated tax rates produces a clearly
irrational result.

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SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

(Additional Information)(Application of the Practical Solution on the Accounting and Disclosure Under the Group Tax Sharing System)
Senshukai and some of its consolidated subsidiaries in Japan have transitioned from the consolidated tax system
to the group tax sharing system from the first quarter of 2023. Consequently, the accounting treatment anddisclosure of income tax, local income tax, and tax effect accounting are in accordance with the “Practical Solution
on the Accounting and Disclosure Under the Group Tax Sharing System” (Practical Solution No. 42, August 12,2021; hereafter, Practical Issues Task Force (PITF) No. 42). Moreover, on the basis of PITF No. 42, Paragraph 32(1), no impact is deemed to arise from changes in accounting policies as a result of the application of PITF No. 42.
Regarding the accounting and disclosure of income tax, local income tax, and tax effect accounting, PITF No. 42
was applied from the end of 2022.
(Uncertainty of accounting estimates)
As of the end of September 2023, the outlook remains uncertain due to a combination of prolonged geopoliticalrisks such as the situation in Ukraine, rising prices resulting from soaring energy and raw material costs, andtightening of global financial conditions to control inflation. Senshukai assumes that these factors will have only
a limited effect on accounting estimates. Although Senshukai is using the best possible estimates based on
information that is currently available, a change in the business c limate or problems may have an effect on thefinancial condition, results of operations and cash flows of the Senshukai Group.

- 10 -SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

(Segment Information)
I 3Q 2022 (Jan. 1, 2022 – Sep. 30, 2022)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment
Mail-orderand online
shopping
business

Corporates
business

Insurancebusiness

Sub-total

Others(Note 1)

Total

(Millions of yen)Amounts
shown onquarterly
Adjustment consolidated
statement ofincome(Note 2)

Net sales
Sales to customers
36,883
3,483
344
40,712
1,128
41,84041,840Inter-segment
184
30
214
0
215
(215)
sales or transfers
Total
37,0683,513
344
40,926
1,128
42,055(215)
41,840
Segment profit(6,556)147
174(6,234)(81)(6,316)(6,316)(loss)
Notes: 1. Others represent the businesses which are not included in any of the reportable segments and consist of thechildcare support business and manufacturing and sales of cosmetics.
2. Segment profit (loss) is adjusted to be consistent with the operating loss on the quarterly consolidated statement ofincome.

2. Information related to impairment of non-current assets, goodwill, etc. for each reportable segment
Significant impairment losses related to non-current assets
In the mail-order and online shopping business segment, the book values of some assets were reduced to theirrecoverable amounts in view of performance being significantly lower than planned, and an impairment loss wasrecorded. This impairment loss was 2,840 million yen in the first nine months of 2022.
II 3Q 2023 (Jan. 1, 2023 – Sep. 30, 2023)
1. Information related to sales and profit or loss for each reportable segment
Reportable segment
Mail-orderand online
shopping
business

Corporates
business

Insurancebusiness

Sub-total

Others(Note 1)

Total

(Millions of yen)Amounts
shown onquarterly
Adjustment consolidated
statement ofincome(Note 2)

Net sales
Sales to customers
31,3263,064
377
34,7681,076
35,84535,845Inter-segment
183
42
226
0
227
(227)
sales or transfers
Total
31,5103,107
377
34,995
1,077
36,073(227)
35,845
Segment profit(5,229)20
204(5,005)46(4,958)(4,958)(loss)
Notes: 1. Others represent the businesses which are not included in any of the reportable segments and consist of thechildcare support business. The manufacturing and sales of cosmetics business, which was included in Others, was
excluded from the scope of consolidation following the sales of all of the shares of Huit laboratories, Inc. held by
the Company on April 1, 2022.
2. Segment profit (loss) is adjusted to be consistent with the operating loss on the quarterly consolidated statement ofincome.

- 11 -SENSHUKAI CO.,LTD. (8165) Financial Results for the Third Quarter of Fiscal Year 2023

(Significant Subsequent Events)(Sale of investment securities)
At the Board of Directors’ meeting held on September 29, 2023, the Company resolved to sell a portion of its
investment securities holdings, and did so as stated below. As a result, the Company will record a gain on sale ofinvestment securities (extraordinary income) for the fourth quarter of 2023 .
(1) Reasons for sale of investment securities
To optimize owned assets and strengthen the Group’s financial structure(2) Details of sale of investment securities
1) Stocks sold: Three listed securities owned by the Company
2) Dates of sale: October 2, 2023, October 3, 2023, and October 12, 2023
3) Gain on sale of investment securities: 374 million yen(Renewal of overdraft agreement)
In accordance with a resolution of the Board of Directors’ meeting held on October 27, 2023, to prepare for the
eventuality that the commitment line agreement cannot be renewed, on November 7, 2023, the Company amended
the maximum contract amount and renewed the contract period under the special overdraft agreement with thefinancial institution it does business with for 3,000 million yen. The details are as follows.
Lender: Sumitomo Mitsui Banking Corporation
Contract limit: 5,500 million yen
Contract signing date: November 7, 2023
Contract maturity date: October 31, 2024
3. Other(Important Matters Regarding Going Concern Assumption, Etc.)
Due to issues related to the replacement of our core system implemented in January 2022, the Senshukai Group
recorded substantial losses in 2022, with an operating loss of 8,139 million yen and loss attributable to owners ofparent of 10,976 million yen. In the first nine months of 2023, the Group continued to record significant losses,with an operating loss of 4,958 million yen and loss attributable to owners of parent of 4,664 million yen. These
circumstances raise significant doubts about the Group’s ability to continue as a going concern.
For further details regarding measures to resolve this situation and the going -concern assumption, please refer to“2. Quarterly Consolidated Financial Statements and Notes, (3) Notes to Quarterly Consolidated Financial
Statements (Going Concern Assumption).”* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which ha s
been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

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