Summary of Financial Results for the Fiscal Year 2023 (Ended December 31, 2023)[Japanese GAAP]
February 13, 2024

Company name: SENSHUKAI CO.,LTD.

Stock exchange: Tokyo Stock Exchange
8165
URL: https://www.senshukai.co.jp
Mr. Kenji Kajiwara, President and Representative Director
Mr. Tetsuya Takahashi,Managing Executive Officer, General Manager, Corporates Headquarters
Tel: +81-6-6881-3220
Scheduled date of annual general meeting of shareholders: March 26, 2024
Scheduled date of payment of dividend: Scheduled date of filing of Annual Security Report: March 27, 2024
Preparation of supplementary materials for financial results: Yes
Holding of financial results meeting: Yes (A video of this meeting is planned to be posted on the Senshukai website)
Stock code:
Representative:
Inquiries:(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the Fiscal Year 2023 (January 1, 2023 – December 31, 2023)(1) Consolidated operating results(Percentages represent changes from the same period of the previous fiscal year)
Profit attributable toOperating profit
Ordinary profit
owners of parent

Net sales
Millions of yen%

Millions of yen%

Millions of yen

Fiscal Year 2023
49,226(16.4)(5,557)
Fiscal Year 2022
58,915(8,139)Note: Comprehensive income (millions of yen) Fiscal Year 2023: (4,739) (-%)

Millions of yen%(5,679)(4,782)(7,889)(10,976)
Fiscal Year 2022: (11,020) (-%)%-

Net income per
share

Diluted net income
per share

Return on equity

Ordinary income
to total assets

Operating income
to net sales

Yen

Yen

%

%

%

Fiscal Year 2023
(102.19)(24.4)(16.1)(11.3)
Fiscal Year 2022
(234.24)(39.8)(17.3)(13.8)
Reference: Equity in earnings (losses) of affiliates (millions of yen) Fiscal Year 2023: (33)
Fiscal Year 2022: 15
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 2022 incorporate this accounting
standard and comparisons with 2022 are omitted.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

Net assets per share%

Fiscal Year 2023
31,80917,279Fiscal Year 2022
38,92322,019Reference: Shareholders’ equity (millions of yen) Fiscal Year 2023: 17,273

Yen

54.3
56.5
Fiscal Year 2022: 21,999

369.15469.79(3) Consolidated cash flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of period

Millions of yen

Millions of yen

Millions of yen

Millions of yen(3,901)(5,869)

1,754
(706)

(722)
148

6,481
9,287

Dividend per share
2Q-end 3Q-end Year-end

Total

Fiscal Year 2023
Fiscal Year 2022

2. Dividends
1Q-endFiscal Year 2022
Fiscal Year 2023
Fiscal Year 2024
(forecasts)

Total dividends Payout ratio Dividend on equity(total)(consolidated)(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

-

0.00
0.00

-

0.00
0.00

0.00
0.00

-

-

-

-

0.00

-

0.00

0.00

-

3. Consolidated Outlook for Fiscal Year 2024 (January 1, 2024 – December 31, 2024)(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

Net sales
Millions of yen

Full Year 2024

51,000% Millions of yen% Millions of yen% Millions of yen

%

Yen

3.6

-

-

-

(38.47)(1,900)(1,900)(1,800)* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) 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

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

52,056,993 sharesFiscal Year 2022:

52,056,993 sharesFiscal Year 2022:

5,229,999 sharesFiscal Year 2022:

46,860,574 shares

2) Number of treasury shares at the end of the period
Fiscal Year 2023:

5,263,634 shares

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

46,805,301 shares(Reference) Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for Fiscal Year 2023 (January 1, 2023 – December 31, 2023)(1) Non-consolidated operating results(Percentages represent changes from the same period of the previous fiscal year)
ProfitOperating profit
Ordinary profit

Net sales
Fiscal Year 2023
Fiscal Year 2022

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

45,89555,123(16.7)-(5,656)(8,290)-(5,653)(7,654)-(4,716)(10,913)-

Net income per share

Diluted net income per share

Yen

Yen

Fiscal Year 2023
(100.78)
Fiscal Year 2022
(232.89)
Note: Starting with the beginning of 2022, Senshukai has applied Accounting Standard for Revenue Recognition (ASBJ Statement
No. 29, March 31, 2020). All figures for 2022 incorporate this accounting standard and comparisons with 202 2 are omitted.

(2) Non-consolidated financial position
Total assets
Millions of yen

Net assets

Equity ratio

Millions of yen

Fiscal Year 2023
30,46816,426
Fiscal Year 2022
37,42921,107
Reference: Shareholders’ equity (millions of yen) Fiscal Year 2023: 16,426

Net assets per share
%

53.9
56.4
Fiscal Year 2022: 21,107

Yen

351.05450.75* This financial report is not subject to audit 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 page4, “1. Overview of Results of Operations, (5) Outlook.”
How to view supplementary information at the financial results meeting
A video of the meeting for the presentation of the financial results for 2023 is planned to be posted on the Senshukai website
soon. In addition, materials used for this presentation will be disclosed using the Timely Disclosure network (TDnet) and wil lbe posted on the Senshukai website.

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

3(3) Cash Flows3(4) Basic Policy Regarding Distribution of Earnings and Dividends in the Current and Next Fiscal Years

4(5) Outlook

4(6) Important Matters Regarding Going Concern Assumption, etc.

4

2. Basic Approach for the Selection of Accounting Standards

5

3. Consolidated Financial Statements and Notes

6(1) Consolidated Balance Sheet

6(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

8

Consolidated Statement of Income

8

Consolidated Statement of Comprehensive Income

9(3) Consolidated Statement of Changes in Equity

10(4) Consolidated Statement of Cash Flows

12(5) Notes to Consolidated Financial Statements

13

Going Concern Assumption

13

Additional Information

14

Segment Information

15

Per Share Information

17

Significant Subsequent Events

17

-1-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

1. Overview of Results of Operations(1) Results of Operations
Overview
In 2023, the Japanese economy steadily returned to normal with the end of COVID-19-related restrictions. However,
the outlook remains uncertain due to concerns about growing geopolitical risks in addition to the 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, in addition to cost reductions and other rationalization measures, the Group focusedon implementing the measures set forth in its medium-term management plan, including a digital shift of the mailorder and online shopping business, profit structure reforms, and co-creation with partner companies. The Grouphas been striving for an early recovery of business performance while steadily taking measures to address issues
identified during the execution of these policies. Although these measures had a limited result in 2023, we expect
them to gradually take effect from 2024 onwards. We believe that significant long-term results will be achieved
through the continued implementation of these initiatives and the verification and improvement of execution
measures.
In 2023, Belle Maison, the Group’s core mail-order and online shopping business, did not achieve sufficient cost
efficiency in order acquisitions to reach its planned target. Sales fell year on year due to a decline in the effective
number of members (those who made a purchase within 12 months), which is taken as the base. As a result, net sales
in 2023 decreased 16.4% YoY to 49,226 million yen, operating loss was 5,557 million yen (compared with a loss of
8,139 million yen in 2022), and ordinary loss was 5,679 million yen (compared with a loss of 7,889 million yen in2022). Loss attributable to owners of parent was 4,782 million yen (compared with a loss of 10,976 million yen in2022).
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, and also madeadvances in optimizing the promotions. The aim was to improve profitability and build a foundation for growth.
However, while costs were curtailed by reducing the number of catalog copies distributed, the digital marketingmeasures were unable to compensate for the resulting fall in sales. As a result, consolidated sales in the mail-orderand online shopping business decreased 18.0% YoY to 43,142 million yen in 2023. There was an operating loss of
5,950 million yen compared with a loss of 8,405 million yen in 2022.
(Corporates Business)
In the corporates business, which provides products and services to corporations, sales declined due to lower-thanexpected growth in the use of agency services such as corporate logistics operations, but growth in novelty andgoods sales related to shareholder benefits and other services contributed to profits. Consolidated sales in thecorporates business decreased 4.1% YoY to 4,115 million yen in 2023. Operating profit increased 37.2% YoY to 67
million yen.
(Insurance Business)
This business provides support, mainly to Belle Maison members, for choosing the most suitable insurance policies.
Consolidated sales increased 4.9% YoY to 537 million yen in 2023 and operating profit increased 4.1% YoY to 292
million yen.

-2-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(Others)
Consolidated sales in other businesses, which include the childcare support business, decreased 3.2% YoY to 1,430
million yen in 2023. Operating profit was 32 million yen compared with a loss of 64 million yen in 2022.
(2) Financial Position
Assets totaled 31,809 million yen at the end of 2023, a decrease of 7,113 million yen from the end of 2022.
Current assets decreased 5,686 million yen to 18,900 million yen. The factors included decreases of 2,806 million
yen in cash and deposits, 1,463 million yen in accounts receivable-other, and 844 million yen in merchandise andfinished goods. Non-current assets decreased 1,426 million yen to 12,908 million yen. The factors included decreasesof 987 million yen in investments and other assets, 323 million yen in intangible assets, and 115 million yen inproperty, plant and equipment.
Current liabilities decreased 1,819 million yen to 11,282 million yen. The factors included decreases of 918 million
yen in electronically recorded obligations-operating, 523 million yen in accounts payable-other and 476 million yen
in accounts payable-trade. Non-current liabilities decreased 554 million yen to 3,248 million yen. The main factors
included a decrease of 610 million yen in long-term borrowings.
Net assets decreased 4,740 million yen to 17,279 million yen. The factors included booking of loss attributable toowners of parent of 4,782 million yen. As a result, the equity ratio was 54.3%.
(3) Cash FlowsThe balance of cash and cash equivalents at the end of 2023 was 6,481 million yen, a decrease of 2,806 million yen
from the end of 2022.
Operating activities used net cash of 3,901 million yen (net cash used of 5,869 million yen in 2022). The main cash
inflows include a decrease in other current liabilities of 1,029 million yen, a decrease in inventories of 848 million
yen and depreciation of 734 million yen. The main cash outflows include loss before income taxes of 4,786 million
yen.
Investing activities provided net cash of 1,754 million yen (net cash used of 706 million yen in 2022). The main
cash inflows include proceeds from sales of investment securities of 1,490 million yen.
Financing activities used net cash of 722 million yen (net cash provided of 148 million yen in 2022). The main cash
outflows were repayments of long-term borrowings of 620 million yen.
Cash flow indicesFiscal Year 2021
Fiscal Year 2022
Fiscal Year 2023
(As of Dec. 31, 2021) (As of Dec. 31, 2022) (As of Dec. 31, 2023)
Equity ratio (%)
63.3
56.5
54.3
Equity ratio based on fair value (%)
34.8
46.4
55.3
Ratio of interest-bearing debt to cash flows (years)
Interest coverage ratio (times)
Notes: 1. Cash flow indices are calculated, using consolidated financial figures, as follows:
The equity ratio is shareholders’ equity divided by total assets.
The equity ratio based on fair value is market capitalization divided by total assets.
The ratio of interest-bearing debt to cash flows is interest-bearing debt divided by the amount of operating cash flows.
The interest coverage ratio is operating cash flows divided by interest payments.
2. Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofshares issued and outstanding at the end of the period, excluding treasury shares.
3. Interest-bearing debt includes short-term borrowings, long-term borrowings, and lease obligations shown on the
consolidated balance sheet.
4. Operating cash flows and interest payments represent net cash provided by (used in) operating activities andinterest expenses paid, respectively, on the consolidated statement of cash flows.
5. Ratio of interest-bearing debt to cash flows and interest coverage ratio are not shown because operating cash flows
were negative.

-3-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(4) Basic Policy Regarding Distribution of Earnings and Dividends in the Current and Next Fiscal Years
The Senshukai Group’s policy regarding dividends is to distribute earnings to shareholders in a manner that reflects
its performance. Furthermore, the policy is to pay stable dividends that take into account the payout ratio of 30% on
a consolidated basis while reflecting the need to use retained earnings to strengthen the company ’s foundation forbusiness operations. Senshukai has a shareholder benefit program that distributes to shareholders twice every year
gift certificates based on the number of shares and the number of years the shares have been held. This program isalso a way to give shareholders a better understanding of Senshukai by using the company ’s products and services.
Regrettably, no dividend has been allocated for 2023 due to the large loss attributable to owners of parent. For 2024,
based on the outlook for results of operations, medium- to long-term financial condition and other items, we regretthat no dividend will be paid as the promotion of measures to improve results of operations and expansion of equityfrom the viewpoint of management stability and safety are top priorities.
(5) Outlook
Consolidated
Fiscal Year 2024 (forecast)

51,000(1,900)(1,900)(Millions of yen)
Profit attributable toowners of parent(1,800)Fiscal Year 2023 (results)

49,226(5,557)(5,679)(4,782)

3.6

-

-

-

Net sales

Change (%)

Operating profit

Ordinary profit

In the fiscal year 2024, we will continue to work on measures to improve results of operations and make flexible
adjustments with the aim of transforming our business structure and returning to profitability in fiscal 2025.
Furthermore, we will revisit our philosophy that the reason for a company ’s existence lies in its contribution tosociety. We will face social issues head-on, taking the lead as a flag-bearer, and work with consumers and business
partners to transform ourselves into a company that solves social issues, aiming to realize a sustai nable society
through lifestyle proposals and the provision of products, services, information, and places to connect, thereby
enriching the value of our existence as a company and improving its corporate value.
The medium-term management plan, which ends in the fiscal year 2025, previously laid down the following threegoals.
(1) Be a source of unique products and services that can be integral elements of our customers’ lives by reflecting
in our products and services a broad range of values and lifestyles and an accurate understanding of customers ’lifestyles.
(2) Use close ties with customers to supply more products that are environmentally responsible, can be used withconfidence, and make customers excited to purchase and use. Increase measures for the recycling and reuseof merchandise (maximize utilization value*) for contributing to a sustainable society where all products areused as much as possible.
(3) Play a role in the establishing of a co-creation society that brings together people and companies that share thesame values and encompasses many types of lifestyles.
* Utilization value is the sum of the value of goods and services (quality, price, accuracy of meeting needs,
attractive and practical designs, materials/ideas for products people like and use a long time, and otherattributes) and the value of those goods and services during and after their use.
(6) 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 a significant operating loss and loss attributable to owners of parent in 2022. In 2023, 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.
For further details regarding going-concern assumption, please refer to “3. Consolidated Financial Statements andNotes, (5) Notes to Consolidated Financial Statements (Going Concern Assumption).”-4-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

2. Basic Approach for the Selection of Accounting Standards
The Senshukai Group has a policy of preparing its consolidated financial statements using Japanese GAAP for thetime being to facilitate comparisons with prior-year performance and the performance of other companies in Japan.
We will take suitable actions with regard to the application of the International Financial Reporting Standards (IFRS)
by taking into account trends in our industry peers in Japan and associated factors in Japan and other countries.

-5-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Millions of yen)
Fiscal Year 2023
(As of Dec. 31, 2023)

Fiscal Year 2022
(As of Dec. 31, 2022)
AssetsCurrent assets
Cash and deposits

9,287

6,481

249

317

Accounts receivable-trade

1,690

1,245

Merchandise and finished goods

6,871

6,026

Notes receivable-trade

Raw materials and supplies

112

109

Accounts receivable-other

5,147

3,684

Other

1,310

1,122

(82)

(86)

24,587

18,900Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

19,93920,034

Accumulated depreciation(16,134)(16,372)

Buildings and structures, net

3,804

3,662

Machinery, equipment and vehicles

6,332

6,348

Accumulated depreciation(6,293)(6,302)39

45

Machinery, equipment and vehicles, net
Tools, furniture and fixtures

888

840

(803)

(735)

84

104

Land

5,402

5,402

Total property, plant and equipment

9,331

9,215

Other

1,465

1,142

Total intangible assets

1,465

1,142

2,417

1,719

Leasehold and guarantee deposits

473

425

Deferred tax assets

10

29

Other

673

376

Accumulated depreciation
Tools, furniture and fixtures, net

Intangible assets

Investments and other assets
Investment securities

Allowance for doubtful accounts

(37)

(0)

Total investments and other assets

3,538

2,550

14,335

12,90838,92331,809Total non-current assets
Total assets-6-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(Millions of yen)
Fiscal Year 2023
(As of Dec. 31, 2023)

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

4,872

3,954

Accounts payable-trade

2,465

1,988

Short-term borrowings

620

620

Lease liabilities

23

22

Accounts payable-other

3,204

2,681

Accrued expenses

624

648

Income taxes payable1932

Accrued consumption taxes

35

56

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

589

627

5

-

31

33

Other

608

615

13,101

11,282

3,285

2,674

Total current liabilities
Non-current liabilities
Long-term borrowings
Lease liabilities

30

25

Deferred tax liabilities

144

163

Retirement benefit liability

6

5

Asset retirement obligations

162

132

Provision for loss on office closing
Other
Total non-current liabilities
Total liabilities

-

170

173

76

3,802

3,248

16,903

14,530Net assets
Shareholders’ equity
Share capital

100

100

Capital surplus

30,08430,084Retained earnings(4,108)(8,891)

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

Total shareholders’ equity

23,122

18,339286

302

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

-7-

51

71

(1,516)(1,516)56

77(1,123)(1,065)20

522,01917,27938,92331,809SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Freight and packing costs
Sales commission
Promotion expenses
Provision of allowance for doubtful accounts
Remuneration for directors (and other officers)
Salaries and allowances
Bonuses
Provision for bonuses for directors (and other officers)
Provision for bonuses
Commission expenses
Depreciation
Other
Total selling, general and administrative expenses
Operating loss
Non-operating income
Interest and dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Gain on adjustment of accounts payable
Rental income from real estate
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodCommission expenses
Provision for loss on office closing
Penalty loss
Miscellaneous losses
Total non-operating expenses
Ordinary loss
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Gain on sale of shares of subsidiaries and associates
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Loss on tax purpose reduction entry of non-current assets
Impairment losses
Other
Total extraordinary losses
Loss before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Loss
Loss attributable to non-controlling interests
Loss attributable to owners of parent

Fiscal Year 2022
(Jan. 1, 2022 – Dec. 31, 2022)
58,91530,86428,050-8-(Millions of yen)
Fiscal Year 2023
(Jan. 1, 2023 – Dec. 31, 2023)
49,226
24,56024,666

5,088
2,727
9,034
65
230
4,127
637
5
44
5,405
1,227
7,595
36,190(8,139)

4,386
3,520
5,624
75
224
3,983
648
31
4,237
697
6,793
30,223(5,557)

39

37

15

-

29
169
77
180
512

123
192
59
142
554

46

45

-

33

113
102
262
(7,889)

195
170
139
93
676
(5,679)

0
18
134
188
341

218
859
1,078

17
173
3,054
57
3,302
(10,850)33
103
136(10,987)(11)(10,976)

4
179
184(4,786)40(28)
11(4,797)(14)(4,782)SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(Consolidated Statement of Comprehensive Income)Fiscal Year 2022
(Jan. 1, 2022 – Dec. 31, 2022)(Millions of yen)
Fiscal Year 2023
(Jan. 1, 2023 – Dec. 31, 2023)(10,987)(4,797)

Valuation difference on available-for-sale securities

18

15

Deferred gains or losses on hedges

(68)

20

1

12

16

8

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

-9-

(33)

57

(11,020)(4,739)(11,009)(4,725)

(11)

(14)

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(3) Consolidated Statement of Changes in Equity
Fiscal Year 2022 (Jan. 1, 2022– Dec. 31, 2022)(Millions of yen)
Share capital

Capital surplus

100

30,084

Balance at beginning of period
Cumulative effects of changes
in accounting policies
Restated balance

Shareholders’ equity
Retained
Treasury sharesearnings
7,061(2,953)

Total shareholders’equity34,291(5)
100

30,0847,055(5)(2,953)34,286

Changes during period
Dividends of surplus
Loss attributable to owners ofparentPurchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period-

Balance at end of period

100

30,084

(187)

(187)

(10,976)(10,976)(0)(0)(11,164)(0)(11,164)(4,108)(2,953)23,122(Millions of yen)

Accumulated other comprehensive income

Balance at beginningof period
Cumulative effects
of changes inaccounting policies
Restated balance

Valuationdifference on
availablefor-salesecurities

Deferred
gains orlosses onhedges

Revaluation
reserve for land

Foreigncurrencytranslation
adjustment

267

119

(1,516)38

Total
Nonaccumulated controlling
otherinterests
comprehensive
income(1,089)-Total net
assets33,202
(5)

267

119

(1,516)38(1,089)-33,196

Changes during period
Dividends of surplus
Loss attributable toowners of parent
Purchase of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of
period(187)(10,976)
(0)
18

(68)

-

17

(33)

20

(12)

18

(68)

-

17

(33)

20

(11,177)

286

51(1,516)56(1,123)20

22,019- 10 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

Fiscal Year 2023 (Jan. 1, 2023– Dec. 31, 2023)(Millions of yen)
Share capital

Capital surplus

100

30,084

Balance at beginning of period
Changes during period
Loss attributable to owners ofparentPurchase of treasury shares
Net changes in items otherthan shareholders’ equity
Total changes during period

Shareholders’ equity
Retained
Treasury sharesearnings(4,108)(2,953)

Total shareholders’equity23,122(4,782)(4,782)(0)Balance at end of period

(0)

-

-

(4,782)(0)(4,782)100

30,084(8,891)(2,953)

18,339(Millions of yen)

Accumulated other comprehensive income

Balance at beginningof period
Changes during period
Loss attributable toowners of parent
Purchase of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of
periodValuationdifference on
availablefor-salesecurities

Deferred
gains orlosses onhedges

Revaluation
reserve for land

Foreigncurrencytranslation
adjustment

286

51

(1,516)56

Total
Nonaccumulated controlling
otherinterests
comprehensive
income(1,123)20

Total net
assets

22,019(4,782)
(0)
15

20

-

21

57

(14)

42

15

20

-

21

57

(14)

(4,740)302

71(1,516)77(1,065)

5

17,279- 11 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(4) Consolidated Statement of Cash Flows
Fiscal Year 2022
(Jan. 1, 2022 – Dec. 31, 2022)(Millions of yen)
Fiscal Year 2023
(Jan. 1, 2023 – Dec. 31, 2023)(10,850)
1,293
3,054
(96)
18
(39)
46

(4,786)
734
179
(33)
2
170
(37)
45

(15)

33

(134)

-

17
173
(18)
(188)
194
2,105
1,091
(1,798)(77)(1,023)260(5,987)67(46)
96(5,869)

(213)
(859)
391
848
1,029
(1,146)
37
(860)
583
(3,881)
75
(45)
(51)
(3,901)(572)(1,192)
187
(15)
19

(182)
(149)
0
1,490

626

-

47
193
(706)

412
73
109
1,754

1,000
(650)

9
(620)

31

-

(186)
(7)
(38)
148

(0)
(84)
(27)
(722)

48

62

(6,377)
15,6659,287(2,806)
9,287
6,481

Cash flows from operating activities
Loss before income taxes
Depreciation
Impairment losses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on office closing
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sale of shares of subsidiaries andassociates
Loss (gain) on sale and retirement of non-current assets
Loss on tax purpose reduction entry of non-current assets
Loss (gain) on sale of investment securities
Subsidy income
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in trade payables
Increase (decrease) in contract liabilities
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Subsidies received
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from sale of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sale of investment property
Proceeds from collection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from share issuance to non-controllingshareholders
Dividends paid
Repayments of installment payables
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 12 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(5) Notes to 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 2023, 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 toresolve 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.
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, and- 13 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

make 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.
In 2024, we will continue to focus on the above measures as the pillars of reform and make flexible adjustmentswith the aim of transforming our business structure and returning to profitability in 2025. Furthermore, we willrevisit our philosophy that the reason for a company’s existence lies in its contribution to society. We will facesocial issues head-on, taking the lead as a flag-bearer, and work with consumers and business partners to transform
ourselves into a company that solves social issues, aiming to realize a sustainable society through lifestyle
proposals and the provision of products, services, information, and places to connect, thereby enriching the valueof our existence as a company and improving its corporate value.
Regarding funds, as of the end of 2023, the Group possessed cash and deposits totaling 6,481 million yen. We haveconcluded a commitment line agreement with a financial institution for a total 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. Moreover, a general overdraft agreement of 2,000 million yen and a special overdraft agreement of
5,500 million yen (with an expiry date of October 31, 2024) have been set up as an overdraft facility in theeventuality that the commitment line agreement cannot be continued. As stated in “3. Consolidated Financial
Statements and Notes, (5) Notes to Consolidated Financial Statements (Significant Subsequent Events),” thegeneral overdraft agreement will be terminated on March 31, 2024, and the expiry date of the special overdraft
agreement extended to January 31, 2025. As of the end of 2023, there were no outstanding borrowings under the
aforementioned commitment line, general overdraft agreement, or special overdraft agreement. We will continue
to work closely with financial institutions to ensure further support should we need it in the future or when theterm of agreement expire.
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 renewal of the term of agreement or further support from financial institutions berequired.
Furthermore, the consolidated financial statements have been prepared on the assumption that the Group willcontinue as a going concern and do not reflect the impact of significant uncertainties regarding this assumption.
We will continue to respond flexibly to changes in the business environment and implement necessary measuresin a timely manner to achieve profitability in 2025. In the medium- to long-term, we strive to become a company
that is long cherished by customers and meets the expectations of all stakeholders.
(Additional Information)(Uncertainty of accounting estimates)
As of the end of 2023, the outlook remains uncertain due to a combination of prolonged geopolitical risks such as
the situation in Ukraine, rising prices resulting from soaring energy and raw material costs, and tightening of global
financial conditions to control inflation. Senshukai assumes that these factors will have only a limited effec t on
accounting estimates. Although Senshukai is using the best possible estimates based on information that iscurrently available, a change in the business climate or problems may have an effect on the financial condition,
results of operations and cash flows of the Senshukai Group.

- 14 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

Segment Information
1. Overview of reportable segment
Segments used for financial reporting are Senshukai’s constituent units for which separate financial information
is available and for which the Board of Directors performs periodic studies for the purposes of determining theallocation of resources and evaluating performance.
The Senshukai Group primarily operates the mail-order and online shopping business, corporates business andinsurance business, and Senshukai and its group companies manage each of these businesses according to theseclassifications.
Therefore, the Group, comprised of these different business segments, has three reportable segments: the mailorder and online shopping business, corporates business and insurance business.
The mail-order and online shopping business is engaged in mail-order sales via a variety of media centered on
catalogs and the Internet. The corporates business uses Senshukai’s infrastructure to provide solutions services
and promotional services targeting mail-order companies and e-commerce businesses. The insurance businessprovides insurance services primarily to Belle Maison members.
2. Calculation methods for sales, profit or loss, assets, and other items for each reportable segment
The accounting methods for reportable segments are the same as those used for preparing the consolidated
financial statements.
Profits (loss) for reportable segments are generally operating profit (loss) figures.
Inter-segment sales or transfers are based on market prices.
3. Information related to sales and profit or loss, assets, and other items for each reportable segment
Fiscal Year 2022 (Jan. 1, 2022 – Dec. 31, 2022)
Reportable segment
Mail-orderand online
shopping
business

Corporates
business

Insurancebusiness

Sub-total

Others(Note 1)

Total

(Millions of yen)Amounts
shown onAdjustment consolidated(Note 2)
financialstatements(Note 3)

Net sales
Sales to customers
52,6334,292
512
57,437
1,477
58,91558,915Inter-segment
258
42
301
0
301
(301)
sales or transfers
Total
52,8914,334
512
57,738
1,478
59,217(301)
58,915
Segment profit(8,405)48
281(8,074)(64) (8,139)(8,139)(loss)
Segment assets
20,6431,236
4321,923780
22,703
16,21938,923
Other items
Depreciation
1,248
11
1,260
33
1,293
1,293
Share of profit ofentities accounted
15
15
15
15
for using equity
methodInvestment inequity-method
645
645
645
645
affiliates
Increase inproperty, plantand equipment
1,178
20
1,199
221
1,421
215
1,636
and intangible
assets
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of thechildcare support business and manufacturing and sales of cosmetics.
2. Adjustments are as follows.
(1) The adjustment to segment assets includes an elimination for inter-segment transactions and corporate assetsthat are not allocated to any of the reportable segments.

- 15 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

(2) The criteria for allocating non-current assets to business segments and related depreciation are different.
(3) The 215 million yen adjustment to increase in property, plant and equipment and intangible assets is the sum ofcorporate assets that are not allocated to any of the reportable segments.
3. Segment profit (loss) is adjusted to be consistent with the operating loss on the consolidated statement of income.
Fiscal Year 2023 (Jan. 1, 2023 – Dec. 31, 2023)
Reportable segment
Mail-orderand online
shopping
business

Corporates
business

Insurancebusiness

Sub-total

Others(Note 1)

Total

(Millions of yen)Amounts
shown onAdjustment consolidated(Note 2)
financialstatements(Note 3)

Net sales
Sales to customers
43,142
4,115
537
47,7951,430
49,22649,226
Inter-segment
261
72
333
0
334
(334)
sales or transfers
Total
43,403
4,188
537
48,1291,431
49,561(334)
49,226
Segment profit(5,950)67
292(5,590)32 (5,557)(5,557)(loss)
Segment assets
17,981
1,225
46
19,254843
20,097
11,71231,809Other items
Depreciation
688
17
706
27
734
734
Share of loss ofentities accounted
(33)
(33)
(33)
(33)
for using equity
methodInvestment inequity-method
582
582
582
582
affiliates
Increase inproperty, plantand equipment
237
48
285
1
287
164
452
and intangible
assets
Notes: 1. Others represent the businesses which are not included in any of the three reportable segments and consist of thechildcare support business. On April 1, 2022, the manufacturing and sales of cosmetics were excluded from thescope of consolidation following the transfer of all shares in Huit Laboratories, Inc., which was a consolidated
subsidiary of Senshukai.
2. Adjustments are as follows.
(1) The adjustment to segment assets includes an elimination for inter-segment transactions and corporate assetsthat are not allocated to any of the reportable segments.
(2) The criteria for allocating non-current assets to business segments and related depreciation are different.
(3) The 164 million yen adjustment to increase in property, plant and equipment and intangible assets is the sum ofcorporate assets that are not allocated to any of the reportable segments.
3. Segment profit (loss) is adjusted to be consistent with the operating loss on the consolidated statement of income.

- 16 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2023

Per Share Information(Yen)
Fiscal Year 2022
Fiscal Year 2023
(Jan. 1, 2022 – Dec. 31, 2022) (Jan. 1, 2023 – Dec. 31, 2023)
469.79369.15
Net assets per share(234.24)(102.19)
Net loss per share
Notes: 1. Diluted net income per share is not presented since Senshukai has no outstanding dilutive securities, and posted a net
loss.
2. Basis for calculation of net income (loss) per share is as follows.
(Millions of yen)
Fiscal Year 2022
Fiscal Year 2023
(Jan. 1, 2022 – Dec. 31, 2022) (Jan. 1, 2023 – Dec. 31, 2023)
Loss attributable to owners of parent(10,976)(4,782)
Amounts unavailable to common shareholders
Loss attributable to owners of parent related to common(10,976)(4,782)stock
Average number of common stock outstanding during the46,86046,805
period (thousand shares)

Significant Subsequent Events(Termination of overdraft agreement)
In accordance with a resolution of the Board of Directors’ meeting held on February 13, 2024, Senshukai willterminate the general overdraft agreement of 2,000 million yen, which was entered into to prepare for the
eventuality that the commitment line agreement cannot be renewed, as follows:
Lender: Sumitomo Mitsui Banking Corporation
Contract limit: 2,000 million yen
Date of termination notice: February 13, 2024
Contract maturity date: March 31, 2024
(Renewal of overdraft agreement)
In accordance with a resolution of the Board of Directors’ meeting held on February 13, 2024, Senshukai renewed
the contract period under the special overdraft agreement of 5,500 million yen, which was entered into to prepare
for the eventuality that the commitment line agreement cannot be renewed, as follows:
Lender: Sumitomo Mitsui Banking Corporation
Contract limit: 5,500 million yen
Contract signing date: February 13, 2024
Contract maturity date: January 31, 2025
* This financial report is solely a translation of summary of “Kessan Tanshin” (in Japanese, including attachments), which has
been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience ofreaders who prefer an English translation.

- 17 -