Summary of Financial Results for the Fiscal Year 2020 (Ended December 31, 2020)[Japanese GAAP]
February 12, 2021

Company name: SENSHUKAI CO.,LTD.

Stock exchange: Tokyo Stock Exchange, First Section
8165
URL: https://www.senshukai.co.jp
Mr. Kenji Kajiwara, President and Representative Director
Mr. Tetsuya Takahashi, Director, General Manager, Corporates Headquarters
Tel: +81-6-6881-3220
Scheduled date of annual general meeting of shareholders: March 30, 2021
Scheduled date of payment of dividend: Scheduled date of filing of Annual Security Report: March 31, 2021
Preparation of supplementary materials for financial results: Yes
Holding of financial results meeting: Yes (Only a webcast is planned to prevent the spread of COVID-19)
Stock code:
Representative:
Inquiries:(All amounts are rounded down to the nearest millions of yen)

1. Consolidated Financial Results for the Fiscal Year 2020 (January 1, 2020 – December 31, 2020)(1) Consolidated operating results
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%

Millions of yen%

Fiscal Year 2020
83,286(6.6)(389)
Fiscal Year 201989,150 (21.3)
772
Note: Comprehensive income (millions of yen) Fiscal Year 2020: (4,219) (-%)
Net income per
share

Diluted net income
per share

Yen

Yen

Millions of yen%

Return on equity%(3,946)
8,182-

Ordinary income
to total assets

Operating income
to net sales

%

%

%

Fiscal Year 2020
(95.23)Fiscal Year 2019
201.11152.54
Reference: Equity in earnings (losses) of affiliates (millions of yen)

Millions of yen(3,800)
1,418
Fiscal Year 2019: 7,896 (-%)

(10.6)
21.2
Fiscal Year 2020: (3,515)

(5.5)
(0.5)
1.9
0.9
Fiscal Year 2019: 421(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Equity ratio

Millions of yen

Net assets per share%

Fiscal Year 2020
63,93332,088
Fiscal Year 201973,66442,490
Reference: Shareholders’ equity (millions of yen) Fiscal Year 2020: 32,088

Yen

50.2
57.7
Fiscal Year 2019: 42,490

699.01880.56(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

2,428
2,911

(1,557)
8,685(3,995)(6,027)

19,592
22,713Fiscal Year 2020
Fiscal Year 2019

2. Dividends
1Q-endYen

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

Yen

Yen

Total
Yen

Total dividends Payout ratio Dividend on equity(total)(consolidated)(consolidated)
Millions of yen%%

Fiscal Year 2019
0.00
2.00
2.00
80
1.0
0.3
Fiscal Year 2020
0.00
0.00
0.00
Fiscal Year 2021
3.00
4.00
7.00
16.1
(forecasts)
Note: The dividend figures above show dividends for common shares. Please refer to “Dividends of classified stock” (aftermentioned) for information on dividends for shares whose rights are different from those of the Senshukai common shares.

3. Consolidated Outlook for Fiscal Year 2021 (January 1, 2021 – December 31, 2021)(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 2021

91,000% Millions of yen% Millions of yen% Millions of yen

%

Yen

9.3

-

-

-

43.57

2,000

2,000

2,000

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(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 2020:

52,056,993 sharesFiscal Year 2019:52,056,993 sharesFiscal Year 2019:11,865,448 shares

2) Number of treasury shares at the end of the period
Fiscal Year 2020:

6,151,627 shares

3) Average number of shares outstanding during the period
Fiscal Year 2020:
41,440,388 sharesFiscal Year 2019:40,191,068 shares
Note: 173,400 shares of Senshukai stock, which were held by the trust for the stock compensation plan that is linked toresults of operations and cancelled on June 21, 2019, are included in the number of treasury shares, and is deductedfrom the number of shares that is used to calculate the average number of shares outstanding during 2019.

(Reference) Summary of Non-consolidated Financial Results
Non-consolidated Financial Results for Fiscal Year 2020 (January 1, 2020 – December 31, 2020)(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 2020
Fiscal Year 2019

Fiscal Year 2020
Fiscal Year 2019

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

71,157
63,972

11.2(14.0)

2,883
(382)

-

2,827
247

-

1,803
7,448

(75.8)-Net income per share

Diluted net income per share

Yen

Yen

43.53
182.84138.69(2) Non-consolidated financial position
Total assets
Millions of yen

Net assets

Equity ratio

Millions of yen

Fiscal Year 2020
56,257
34,694
Fiscal Year 201959,72739,348Reference: Shareholders’ equity (millions of yen) Fiscal Year 2020: 34,694

Net assets per share
%

61.7
65.9
Fiscal Year 2019: 39,348

Yen

755.79802.36* 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 page
4.
How to view supplementary information at the financial results meeting
There will be no meeting for the presentation of financial results for 2020 because of the COVID-19 pandemic. A video of thispresentation 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 will be posted on the Senshukai website.

(Reference) Dividends of classified stock
Dividends per share for classified stock with rights that differ from those of common shares are shown below.
On July 31, 2020, Senshukai purchased all of the following classified stock pursuant to Article 178 of the Companies
Act by exercising its right to acquire this stock for a cash payment.
Class A preferred stock

1Q-endDividend per share
3Q-end2Q-endYen

Yen

Fiscal Year 2019
20,000,000.00
Fiscal Year 2020
0.00
Notes: 1. Five shares of the Class A preferred stock were issued on March 30, 2018.

Year-end

Total

Yen

Yen

Yen

-

20,000,000.00-

40,000,000.00
0.00

2. The dividends for the Fiscal Year 2019 were partially paid from the capital surplus. Please see “Breakdown ofdividends paid from the capital surplus” below for more information.

Class B preferred stock

1Q-endDividend per share
3Q-end2Q-endYen

Yen

Fiscal Year 2019
Fiscal Year 2020
Note: Nine shares of Class B preferred stock were issued on March 30, 2018.

Year-end

Total

Yen

Yen

Yen

-

-

-

(Reference) Breakdown of dividends paid from the capital surplus
Of the dividends for the Fiscal Year 2019, breakdown of dividends paid from the capital surplus is shown below.
Record date2Q-endDividend per share (Yen)
20,000,000.00
Total dividends (Millions of yen)100
Note: Reduction rate in net assets due to the dividends paid from net assets

2Q-end: 0.003

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

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 Information about Going Concern Assumption

5

2. Basic Approach for the Selection of Accounting Standards

6

3. Consolidated Financial Statements and Notes

7(1) Consolidated Balance Sheet

7(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income

9

Consolidated Statement of Income

9

Consolidated Statement of Comprehensive Income11(3) Consolidated Statement of Changes in Equity

12(4) Consolidated Statement of Cash Flows

14(5) Notes to Consolidated Financial Statements

16

Going Concern Assumption

16

Significant Changes in Shareholders’ Equity

16

Additional Information

16

Segment Information

17

Per Share Information

20

Significant Subsequent Events

20

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SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

1. Overview of Results of Operations(1) Results of Operations
Overview
In 2020, there was a steep downturn of the Japanese economy as COVID-19 impacted consumer spending andeconomic activity. There are still no signs of the end of this crisis as another wave of infections takes place in many
countries. As a result, the economic outlook continues to be extremely unclear.
In Japan’s retail industry, a dramatic shift in the behavior of consumers has taken place due to the COVID -19 crisis.
The e-commerce category has grown because of spending linked to the need to stay at home for safety and thenumber of people who visit stores has plummeted. As people become accustomed to this new life style, the changes
in consumers’ values and behavior are likely to become irreversible structural shifts rather than temporary events.
We believe that success in the retail sector will require the ability to create new ideas for customer value thatmatches today’s new life styles and to provide this value.
In Japan’s wedding industry, the business climate continues to be extremely difficult because of COVID -19. People
are avoiding meals and other wedding activities with large numbers of people, which were customary before thiscrisis, and changing their perceptions of weddings and receptions in other ways for safety during this pandemic.
In the mail-order and online shopping business, sales increased because of rapid measures to target at-home demand
and the success of marketing activities. In the bridal business, sales were down because of the big impact of
postponements to 2021 of more than 40% of the weddings planned for 2020. As a result, sales decreased 6.6% from2019 to 83,286 million yen.
Earnings benefited from an increase in the gross profit margin resulting from structural reforms in the mail-orderand online shopping business. However, there was a sharp decline in bridal business earnings. The result was an
operating loss of 389 million yen compared with a profit of 772 million yen in 2019. The o rdinary loss was 3,800
million yen compared with a profit of 1,418 million yen in 2019 due to the share of loss of entities accounted forusing the equity method. The loss attributable to owners of parent was 3,946 million yen compared with a profit of
8,182 million yen in 2019, when a gain on sales of non-current assets, a gain on sales of investment securities andother items were recorded as extraordinary income.
(Mail-order and Online Shopping Business)
Consolidated sales in the mail-order and online shopping business, which is primarily the catalog and the Internet
businesses, increased 10.1% year-over-year to 67,465 million yen in 2020. There was an operating profit of 2,624
million yen compared with a loss of 805 million yen in 2019.
In 2020, there were many activities for rebuilding the customer base. The primary activity was a reexamination of
how to contact customers who have not made a purchase for a certain length of time or who have made only one
purchase in order to transform these people into regular customers. Another activity was studying from theperspective of customers the new demand associated with the change in life styles caused by COVID -19. We used
this process to create ideas for products that can make people’s lives more fulfilling and pleasant. The performanceof this business also benefited from operational reforms for cost reductions. Due to these activities, there were big
improvements in sales and earnings in 2020 and this business became profitable.
(Bridal Business)
Consolidated sales in the bridal business, centered on the house wedding business, decreased 59.4% year-over-year
to 8,400 million yen. There was an operating loss of 3,728 million yen compared with a profit of 971 million yen
in 2019.
The big downturns in sales and earnings compared with 2019 were caused by wedding and reception postponements
and the suspension of most sales activities because of COVID-19. There were constant activities to reduce selling,
general and administrative expenses and use these expenses more efficiently. We also stepped up measures forsafety during the COVID-19 pandemic, including rigorous hygiene measures. To establish a framework for
operations after the pandemic, we are selling new types of wedding plans that reflect changes in preferences about
ceremonies and receptions. Another measure is renting space to companies for events and using wedding facility-2-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

space in other ways in order to use these assets productively. All of these actions are aimed at improving theperformance of this business.
(Corporates Business)
Consolidated sales in the corporates business, which provides products and services to corporations, increased 7.0%
year-over-year to 5,092 million yen. Operating profit increased 29.4% to 464 million yen.
Due to activities for attracting new customers and increasing sales to current customers, there were new customers
in the novelties business and higher logistics outsourcing sales due to the growth of demand in the e -commerce
sector. There were also higher sales in the sampling business, which provides services such as placing direct mailmarketing messages in packages used to deliver products. The result was higher sales and earnings in this business.
(Insurance and Credit Card Business)
This business provides information mainly to Belle Maison members about insurance policies and about credit
cards with the best reward points. Consolidated sales decreased 22.3% year-over-year to 446 million yen andoperating profit decreased 32.8% to 206 million yen.
We reviewed our channels for sales activities and started using new sales methods, such as coordination with thebridal business and activities targeting families raising children. However, sales and earnings decreased from 2019because we did not conduct sales activities due to COVID-19.
(Others)
Consolidated sales in other businesses, which include childcare support business and manufacturing and sales ofcosmetics, increased 2.2% year-over-year to 1,881 million yen. There was an operating profit of 40 million yen
compared with a loss of 60 million yen in 2019. In the childcare support business, the two nursery schools that
opened in April 2019 as well as the after school child care business, which was started as a peripheral business formore added value, are all performing well.
(2) Financial Position
Assets totaled 63,933 million yen at the end of 2020, a decrease of 9,730 million yen from the end of 2019.
Current assets decreased 4,681 million yen to 37,612 million yen. The factors included decreases of 3,120 million
yen in cash and deposits and 1,467 million yen in merchandise and finished goods. Non-current assets decreased
5,048 million yen to 26,321 million yen. The factors included decreases of 1,169 million yen in property, plant andequipment and 4,610 million yen in investments and other assets, while there was an increase of 730 million yen in
intangible assets.
Current liabilities increased 1,236 million yen to 21,330 million yen. The main factor was an increase of 2,022
million yen in short-term borrowings, while there were decreases of 361 million yen in accounts payable-other and337 million yen in electronically recorded obligations-operating. Non-current liabilities decreased 563 million yen
to 10,514 million yen. The main factor was a decrease of 708 million yen in deferred tax liabilities, while there wasan increase of 286 million yen in long-term borrowings.
Net assets decreased 10,402 million yen to 32,088 million yen. The factors included booking of loss attributable toowners of parent of 3,946 million yen and decreases of 9,280 million yen in capital surplus and 3,274 million yen
in treasury shares because five shares of Class A preferred stock and nine shares of Class B preferred stock werepurchased and canceled on July 31, 2020 under July 30, 2020 Board of Directors’ resolution , and treasury shareswere disposed of through the third-party allotment on October 12, 2020 following the September 16, 2020 Boardof Directors’ resolution. As a result, the equity ratio was 50.2%.
(3) Cash FlowsThe balance of cash and cash equivalents at the end of 2020 was 19,592 million yen, a decrease of 3,120 million
yen from the end of 2019.
Operating activities provided net cash of 2,428 million yen (net cash provided of 2,911 million yen in 2019). The
main cash inflows were share of loss of entities accounted for using equity method of 3,515 million yen,
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SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

depreciation of 1,813 million yen and a decrease in inventories of 1,399 million yen. The main cash outflows include
loss before income taxes of 4,002 million yen.
Investing activities used net cash of 1,557 million yen (net cash provided of 8,685 million yen in 2019). The main
cash outflows include 1,213 million yen for the purchase of intangible assets and 644 million yen for the purchaseof property, plant and equipment.
Financing activities used net cash of 3,995 million yen (net cash used of 6,027 million yen in 2019). The main cash
inflows were net increase in short-term borrowings of 2,100 million yen and proceeds of 1,999 million yen from
disposal of treasury shares. The main cash outflows include 8,005 million yen for the purchase of treasury shares.
Cash flow indicesFiscal Year 2018
Fiscal Year 2019
Fiscal Year 2020
(As of Dec. 31, 2018) (As of Dec. 31, 2019) (As of Dec. 31, 2020)
Equity ratio (%)
45.8
57.7
50.2
Equity ratio based on fair value (%)
13.7
28.6
23.3
Ratio of interest-bearing debt to cash flows (years)
3.7
5.3
Interest coverage ratio (times)
23.1
17.3
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 quantity 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 for Fiscal Year 2018 because
operating cash flows were negative.

(4) Basic Policy Regarding Distribution of Earnings and Dividends in the Current and Next Fiscal Years
The Senshukai Group’s basic policy is maintaining stable dividends, taking into consideration the payout ratio, andensuring a fair distribution of earnings to shareholders that reflects its business performance.
Senshukai has a shareholder benefit program that distributes to shareholders twice every year gift certificates basedon the number of shares and the number of years the shares have been held. These gifts are an expression of
appreciation to shareholders. This program is also a way to give shareholders a better understanding of Senshukai
by using the company’s products.
There was no dividend for 2017 and 2018 because of the decision to place priority on increasing equity from thestandpoint of the stability and soundness of business operations. We resumed dividend payments by paying a year end dividend of 2 yen per share for 2019.
For 2020, the year-end dividend has been suspended because of the loss attributable to owners of parent.
For 2021, based on the outlook for results of operations, the financial condition and other items, we plan to pay aninterim dividend of 3 yen and a year-end dividend of 4 yen for a total of 7 yen. We are determined to makesubstantial distributions to shareholders, including through the shareholder benefit program, as we achieve medium
to long-term growth of corporate value.
(5) Outlook
Consolidated
Fiscal Year 2021 (forecast)

91,000

2,000

2,000

(Millions of yen)
Profit attributable toowners of parent
2,000

Fiscal Year 2020 (results)

83,286(389)(3,800)(3,946)

9.3

-

-

-

Net sales

Change (%)

Operating profit-4-

Ordinary profit

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

In the mail-order and online shopping business, we forecast sales in 2021 that are about the same as in 2020 due toactivities to attract new members and to encourage current members to make frequent purchases. We expect lower
earnings because of higher logistics expenses and an increase in IT infrastructure expenses to build a system capableof supporting growth over the next several years.
The performance of the bridal business will probably be impacted by the COVID-19 pandemic throughout 2021.
Despite this impact, we forecast 2021 sales in this business that are about 80% of sales in 2019. One reason is thatmost of the weddings reserved for 2020 were pushed back to 2021 rather than canceled. This is partly because mostof our wedding locations are in smaller regional cities rather than large metropolitan areas. As a result, we have alarge number of wedding orders for 2021. Another reason is our ability to offer new types of weddings that meetthe increasingly diverse preferences of couples planning a wedding. In addition, we will continue to work onlowering selling, general and administrative expenses and using these expenses more efficiently while making
additional cost reductions whenever possible. Due to these activities, we expect to hold the loss in this business tothe smallest possible amount.
Based on this outlook, we forecast higher sales and earnings in 2021. We expect to return to profitability with anoperating profit of 2,000 million yen. In the bridal business, equity in losses of affiliates will not have a significant
effect on 2021 performance because these losses have been recorded in 2020. As a result , we forecast an ordinary
profit of 2,000 million yen and profit attributable to owners of parent of 2,000 million yen.
* These forecasts are based on assumptions using information available when this report was released. Actual results ofoperations may differ from these forecasts for a variety of reasons, including the possibility of an increase in thenegative effects of the COVID-19 pandemic.

(6) Important Information about Going Concern Assumption
In 2019, there was an operating profit of 772 million yen and profit attributable to owners of parent of 8,182 million
yen. However, there was an operating loss and loss attributable to owners of parent in 2017 and 2018. In 2020,
there was an operating loss of 389 million yen and a loss attributable to owners of parent of 3,946 million yen thatwas caused by the impact of the COVID-19 pandemic on the bridal business. These losses create significant doubts
about the going concern assumption.
In 2019, Senshukai started a medium-term management plan that will end in 2021. This plan includes structuralbusiness reforms that are centered on the mail-order and online shopping business. In 2019, the plan’s first year,
there were operational reforms that included maintaining the proper level of inventories. Oth er activities reduced
assets and created a more streamlined organization in order to cut fixed expenses. Due to these activities, operations
returned to profitability in 2019 with a consolidated operating profit.
In 2020, the plan’s second year, there was a consolidated operating loss because of the big decline in bridal businesssales caused by COVID-19. Nevertheless, structural business reforms continued to produce benefits. Most
significant was the improvement in the performance of the mail-order and online shopping business, where
activities were focused on rebuilding the customer base. In this business, the number of active (making purchases)
members in the core Belle Maison business, which had been declining, increased by 550,00 0 during 2020 to 2.93
million. Furthermore, mail-order and online shopping business sales increased 10.1% to 67,465 million yen andthere was an operating profit of 2,624 million yen.
In the bridal business, the number of weddings is expected to remain below the 2019 level because of COVID-19.
However, we believe the performance of this business will improve after the pandemic ends. One reason for thisoutlook is that a large number of weddings planned for 2020 were pushed back to 2021 rather than canceled. Thisis partly because most wedding facilities are in regional cities instead of large metropolitan areas. Another reason
is the substantial volume of wedding reservations in 2021 and afterward, which demonstrates the steady need forwedding and reception services. While continuing to monitor changes in the COVID-19 pandemic, we will reduce
selling, general and administrative expenses and use these expenses more efficiently. We will implement pandemic
safety measures in accordance with the requests of governments and other public-sector organizations. Moreover,as Japan’s wedding market reaches a key transition phase, we will leverage our corporate culture and experience
concerning the creation of services that are one step ahead of emerging trends in consum er needs. We will also
adapt rapidly to changes, reexamine our business strategies, add services and take other actions to be prepared for-5-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

growth after the COVID-19 pandemic ends. We are determined to build a sound base for earnings and return to
growth in order to stabilize the performance of the Senshukai Group.
At the end of 2020, cash and deposits were 19,592 million yen. In addition, Senshukai has a committed credit line
totaling 10 billion yen with financial institutions (7.9 billion yen was unused at the end of 2020). Consequently, we
believe there are no concerns about our liquidity because we have a sufficient amount of working capital.
For these reasons, we believe there are no significant uncertainties regarding the going concern assumption.
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 countrie s.

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SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Millions of yen)
Fiscal Year 2020
(As of Dec. 31, 2020)

Fiscal Year 2019
(As of Dec. 31, 2019)
AssetsCurrent assets
Cash and deposits

22,713

19,592

Notes and accounts receivable-trade

3,854

3,695

Merchandise and finished goods

8,641

7,173

Raw materials and supplies

197

265

Accounts receivable-other

5,285

5,529

Other

1,750

1,484

Allowance for doubtful accounts

(148)

(129)

42,29337,612

Buildings and structures

35,00435,045

Accumulated depreciation(23,300)(24,403)

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

Buildings and structures, net

11,703

10,641

Machinery, equipment and vehicles

6,703

6,735

Accumulated depreciation(6,444)(6,518)258

217

Tools, furniture and fixtures

2,291

2,324

Accumulated depreciation(1,966)(2,082)

324

242

6,809

6,809

Machinery, equipment and vehicles, net

Tools, furniture and fixtures, net
Land
Leased assets

629

629

Accumulated depreciation

(386)

(421)

Leased assets, net

242

207

7

58

19,346

18,176

1,483

1,203

944

1,954

2,427

3,158

6,046

2,102

600

526

Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Leasehold and guarantee deposits

1,614

1,551

Deferred tax assets

744

282

Other

734

643

Allowance for doubtful accounts

(143)

(120)

Total investments and other assets

9,596

4,986

31,37026,32173,66463,933

Total non-current assets
Total assets-7-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

(Millions of yen)
Fiscal Year 2020
(As of Dec. 31, 2020)

Fiscal Year 2019
(As of Dec. 31, 2019)
Liabilities
Current liabilities
Electronically recorded obligations-operating

6,523

6,185

Accounts payable-trade

3,495

3,620

Short-term borrowings

1,240

3,263

118

122

Accounts payable-other

5,083

4,721

Accrued expenses

1,005

890

Income taxes payable

107

52

Accrued consumption taxes

273

418

Provision for sales promotion expenses
Provision for bonuses for directors (and otherofficers)
Provision for bonuses

225

216

23

-

Lease obligations

233

194

Other

1,763

1,644

Total current liabilities

20,094

21,330

8,558

8,845

Lease obligations

806

683

Deferred tax liabilities

722

14

Non-current liabilities
Long-term borrowings

Retirement benefit liability

3

5

Asset retirement obligations

851

857

Other

135

108

Total non-current liabilities

11,07810,514

31,17331,845

Share capital

100

100

Capital surplus

39,54430,264Retained earnings

10,891

6,768

Total liabilities
Net assets
Shareholders’ equity

Treasury shares(6,800)(3,525)

Total shareholders’ equity

43,73633,606

Valuation difference on available-for-sale securities

366

195

Deferred gains or losses on hedges

49

(78)

(1,516)(1,516)

(120)

(118)

Accumulated other comprehensive income

Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

-8-

(24)

-

(1,245)(1,518)42,49032,08873,66463,933SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)Fiscal Year 2019
(Jan. 1, 2019 – Dec. 31, 2019)89,150(Millions of yen)
Fiscal Year 2020
(Jan. 1, 2020 – Dec. 31, 2020)
83,286

Cost of sales

43,96940,973Gross profit

45,18042,313

Freight and packing costs

4,934

5,023

Promotion expenses

Net sales

Selling, general and administrative expenses
9,978

10,150

Provision for allowance for sales promotion expenses

225

216

Provision of allowance for doubtful accounts

111

120

Bad debts expenses

15

3

Remuneration for directors (and other officers)

190

209

Salaries and allowances

6,377

6,067

Bonuses

1,371

615

23

-

Provision for bonuses for directors (and other officers)
Provision for bonuses

184

189

Depreciation

1,806

1,751

Other

19,187

18,353

Total selling, general and administrative expenses

44,40842,702772(389)

Interest income

23

21

Dividend income
Share of profit of entities accounted for using equity
methodGain on adjustment of account payable

35

41

421

-

255

166

Operating profit (loss)
Non-operating income

Reversal of allowance for doubtful accounts

058

Subsidy income

1423

Miscellaneous income

180

119

Total non-operating income

919

831

Interest expenses
Share of loss of entities accounted for using equity
methodCommission expenses

126

141

-

3,515

38

414

Miscellaneous loss

107

170

273
1,418

4,242
(3,800)Non-operating expenses

Total non-operating expenses
Ordinary profit (loss)-9-

SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

Fiscal Year 2019
(Jan. 1, 2019 – Dec. 31, 2019)(Millions of yen)
Fiscal Year 2020
(Jan. 1, 2020 – Dec. 31, 2020)

Gain on sales of non-current assets

5,623

-

Gain on sales of investment securities

936-

Gain on sales of shares of subsidiaries and associates

336-

Subsidy income

336

18

-

13

7,232

32

90

20

311

18

24

141

3

40

Extraordinary income

Gain on change in equity
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on tax purpose reduction entry of non-current
assetsImpairment loss
Loss on valuation of investment securities
Loss on sales of shares of subsidiaries and associates

4-

Business structure reform expenses

165-

Loss on disaster

18

14

Other

20

-

Total extraordinary losses

639

235

Profit (loss) before income taxes

8,011(4,002)

Income taxes-current

165

60

Income taxes-deferred

(336)

(117)

Total income taxes

(171)

(56)

Profit (loss)

8,182(3,946)

Profit (loss) attributable to owners of parent

8,182(3,946)- 10 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

(Consolidated Statement of Comprehensive Income)Fiscal Year 2019
(Jan. 1, 2019 – Dec. 31, 2019)(Millions of yen)
Fiscal Year 2020
(Jan. 1, 2020 – Dec. 31, 2020)

8,182(3,946)

(239)

(169)

Deferred gains or losses on hedges

(7)

(101)

Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method

5

(3)

(44)

1

(285)

(272)

7,896

(4,219)7,896(4,219)--Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests- 11 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

(3) Consolidated Statement of Changes in Equity
Fiscal Year 2019 (Jan. 1, 2019 – Dec. 31, 2019)(Millions of yen)
Share capital

Capital surplus

22,30423,712

Balance at beginning of period
Changes during period
Dividends of surplus-othercapital surplus
Transfer from share capital toother capital surplus
Profit attributable to ownersof parent
Deficit disposition(22,204)

Shareholders’ equity
Retained
Treasury sharesearnings(3,526)(6,932)

(175)

(175)

22,204-(6,065)

8,182

8,182

6,065

-

Purchase of treasury shares
Disposal of treasury shares
Reversal of revaluation
reserve for land
Net changes in items otherthan shareholders’ equity
Total changes during period

Total shareholders’equity35,558

(131)

(0)

(0)

132

1

169

Balance at end of period

169(22,204)

15,832

14,418

132

8,177

100

39,544

10,891(6,800)43,736(Millions of yen)

Accumulated other comprehensive income
Valuation
Total
NonDeferred
Foreigndifference on
Revaluation
Remeasurements accumulated controlling Total net
gains orcurrency
assetsavailable-forreserve forof defined
otherinterests
losses ontranslation
sale
land
benefit plans comprehensive
hedgesadjustment
securities
incomeBalance at
beginning of period
Changes during
periodDividends ofsurplus-othercapital surplus
Transfer fromshare capital toother capitalsurplusProfit attributableto owners of parent
Deficit disposition
Purchase oftreasury shares
Disposal oftreasury shares
Reversal ofrevaluation reserve
for landNet changes in
items other thanshareholders’equityTotal changes during
periodBalance at end of
period605

60(1,346)

(61)

(47)

(789)

84

34,853

(175)

8,182
(0)
1
169

(238)

(10)

(169)

(59)

22

(455)

(84)

(539)

(238)

(10)

(169)

(59)

22

(455)

(84)

7,637

366

49

(1,516)

(120)

(24)

(1,245)-42,490- 12 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

Fiscal Year 2020 (Jan. 1, 2020– Dec. 31, 2020)(Millions of yen)
Share capital

Capital surplus

100

39,544

Balance at beginning of period

Shareholders’ equity
Retained
Treasury sharesearnings
10,891(6,800)Total shareholders’equity43,736

Changes during period
Dividends of surplus
Loss attributable to owners ofparentPurchase of treasury shares
Disposal of treasury shares
Cancellation of treasury
sharesChange in scope of equity
methodNet changes in items otherthan shareholders’ equity
Total changes during period

(180)

(180)

(3,946)(3,946)(8,005)(8,005)(1,275)

3,275

1,999

(8,005)

8,005

-

2

Balance at end of period

2-(9,280)(4,123)

3,274(10,129)100

30,264

6,768(3,525)33,606(Millions of yen)

Accumulated other comprehensive income
Valuation
Total
DeferredForeigndifference on
Revaluation
Remeasurements accumulated
gains orcurrency
available-forreserve forof definedotherlosses ontranslation
sale
land
benefit plans comprehensive
hedgesadjustment
securities
incomeBalance at
beginning of period
Changes during
periodDividends ofsurplus
Loss attributable toowners of parent
Purchase oftreasury shares
Disposal oftreasury shares
Cancellation oftreasury shares
Change in scope ofequity method
Net changes in
items other thanshareholders’equityTotal changes during
periodBalance at end of
period366

49(1,516)

(120)

(24)

(1,245)

Total net assets

42,490(180)(3,946)(8,005)
1,999
2
(171)

(127)

(0)

1

24

(272)

(272)

(171)

(127)

(0)

1

24

(272)

(10,402)

195

(78)

(1,516)(118)-(1,518)32,088- 13 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

(4) Consolidated Statement of Cash Flows
Fiscal Year 2019
(Jan. 1, 2019 – Dec. 31, 2019)(Millions of yen)
Fiscal Year 2020
(Jan. 1, 2020 – Dec. 31, 2020)

Profit (loss) before income taxes

8,011(4,002)

Depreciation

1,879

1,813

Impairment loss

24

141

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for sales promotion
expenses
Increase (decrease) in provision for bonuses

(3)

(42)

(79)

(9)

(56)

(39)

Cash flows from operating activities

Interest and dividend income

(58)

(63)

Interest expenses
Share of loss (profit) of entities accounted for using
equity method
Loss (gain) on sales of investment securities

126

141

(421)

3,515

(1,250)-3

40

Loss (gain) on sales and retirement of non-current assets(5,532)20

Loss on tax purpose reduction entry of non-current assets

311

18

Subsidy income

Loss (gain) on valuation of investment securities

(336)

(18)

Subsidy income

(1)

(423)

Business structure reform expenses

165-

Decrease (increase) in trade receivables

1,025

180

564

1,399

Decrease (increase) in other current assets

631

(167)

Increase (decrease) in trade payables

(795)

(119)

Increase (decrease) in other current liabilities

(439)

(736)

Other, net

787

375

Subtotal

4,554

2,023

Decrease (increase) in inventories

Interest and dividends received

89

160

Interest paid

(126)

(139)

Income taxes (paid) refund

(196)

(26)

1

423

Proceeds from subsidy income
Payments for business structure reform expenses(1,410)(13)

Net cash provided by (used in) operating activities

2,911

2,428

Purchase of property, plant and equipment(1,690)(644)

Proceeds from sales of property, plant and equipment

8,529

0

Purchase of intangible assets(523)(1,213)

Subsidies received

336

18

Cash flows from investing activities

Purchase of investment securities

(50)

(15)

Proceeds from sales of investment securities
Payments for sales of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Other, net

1,460

-

(186)

-

398

-

411

296

Net cash provided by (used in) investing activities

8,685(1,557)- 14 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

Fiscal Year 2019
(Jan. 1, 2019 – Dec. 31, 2019)(Millions of yen)
Fiscal Year 2020
(Jan. 1, 2020 – Dec. 31, 2020)

Net increase (decrease) in short-term borrowings

-

2,100

Proceeds from long-term borrowings

-

1,450

(1,398)(1,240)(4,340)-(0)(8,005)-

1,999

Dividends paid

(175)

(179)

Other, net

(112)

(118)

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(6,027)(3,995)

(3)

3

5,566

(3,120)Cash and cash equivalents at beginning of period

17,14722,713

Cash and cash equivalents at end of period

22,713

19,592

Cash flows from financing activities

Repayments of long-term borrowings
Payment for redemption of bonds with share acquisitionrightsPurchase of treasury shares
Proceeds from disposal of treasury shares- 15 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Five shares of Class A preferred stock and nine shares of Class B preferred stock were purchased and canceled on
July 31, 2020 under July 30, 2020 Board of Directors’ resolution. In addition, treasury shares were disposed ofthrough the third-party allotment on October 12, 2020 following the September 16, 2020 Board of Directors’
resolution. These processes decreased the capital surplus by 9,280 million yen and treasury shares by 3,275 million
yen in 2020. The results of all these measures were capital surplus of 30,264 million yen and treasury shares of
3,525 million yen at the end of 2020.
Additional Information(Application of tax effect accounting associated with the transition from the consolidated taxation syste m to thegroup tax sharing system)
Senshukai and its consolidated subsidiaries are transitioning to the group tax sharing system that was created by
the Act on Partial Amendments to the Income Tax Act, etc. (Act No. 8 of 2020) and, in conjunction with thistransition, has reexamined items concerning the non-consolidated taxation system. With respect to this transition
and reexamination, Senshukai and its consolidated subsidiaries have not used the provisions of Paragraph 44 of
Implementation Guidance on Tax Effect Accounting (Accounting Standards Board of Japan (ASBJ) Guidance No.
28, February 16, 2018) in accordance with the treatment in Paragraph 3 of Practical Solution on the Treatment of
Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System(ASBJ Practical Issues Task Force (PITF) No. 39, March 31, 2020). As a result, deferred tax assets and deferred
tax liabilities are based on the tax law prior to these amendments.
(Uncertainty of accounting estimates)
The bridal business has reduced operating hours or temporarily closed some locations in order to prevent the spreadof COVID-19 in accordance with requests to stay home and other provisions of the April 2020 declaration of thestate of emergency of the Japanese government and in response to the increasing number of COVID-19 infectionsin Japan. The bridal business resumed operations following the May 2020 end of the state of emergency and thenumber of weddings slowly began to recover. However, the number of infections in Japan started to climb again
in November and a second state of emergency was declared in January 2021. Due to these events, the COVID -19
crisis is continuing to affect the performance of the bridal business. There are many uncertaint ies about when thiscrisis will end, market conditions after the crisis ends and how consumers will behave at that time. For thesereasons, we believe that the bridal business is unlikely to return to the pre-crisis level soon.
At the end of 2020, based on information that is currently available, we now believe that the COVID-19 crisis willcontinue to affect the performance of the bridal business until at least the end of 2021. After that, we expect thisbusiness to recover slowly. We are using these assumptions for accounting estimates for the impairment of noncurrent assets, the recoverability of deferred tax assets and other items. We assume that this crisis will have only anegligible effect on the mail-order and online shopping business and other businesses.
We are using the best possible estimates in accordance with information that is currently available. However, ifsome upcoming event alters the impact of this crisis on business operations, there may be an effect on the Senshukai
Group’s financial soundness, results of operations and cash flows.

- 16 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

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, bridal business, corporates
business and insurance and credit card business, and Senshukai and its group companies manage each of thesebusinesses according to these classifications.
Therefore the Group, comprised of these different business segments, has four reportable segments: the mail-orderand online shopping business, bridal business, corporates business and insurance and credit card 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 bridal business provides mostly house wedding services. The corporates business
uses Senshukai’s infrastructure to provide solutions services and promotional services targeting mail -ordercompanies and e-commerce businesses. The insurance and credit card business provides insurance and credit card
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.

- 17 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

3. Information related to sales and profit or loss, assets, and other items for each reportable segment
Fiscal Year 2019 (Jan. 1, 2019 – Dec. 31, 2019)
Reportable segment
Mail-order
Insurance
Othersand online Bridal Corporates and credit
Sub-total (Note 1)
shopping business businesscardbusinessbusiness

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

Net sales
Sales to customers
Inter-segment sales
or transfers
Total

61,30020,6764,757

574

87,3091,841

89,150-89,150

1,137

0

0

-

1,138

0

1,139

(1,139)-62,43820,6774,758

574

88,448

1,841

90,289(1,139)89,150

Segment profit (loss)

(805)

971

358

307

832

(60)

771

0

772

51,226

21,067801

84

73,1801,719

74,900(1,235)73,664

Segment assets
Other items

Depreciation
604
1,195
18
0
1,818
60
1,879
1,879
Amortization of
212
212
40
253
253
goodwill
Share of loss (profit)
of entities accounted
(88)
509
421
421
421
for using equity
methodInvestment inequity-method
608
3,717
4,326
4,326
4,326
affiliates
Increase in property,
plant and equipment
610
962
33
1,606
316
1,922
1,922
and intangible assets
Notes: 1. Others represent the businesses which are not included in any of the four reportable segments and consist of thechildcare support business and manufacturing and sales of cosmetics.
2. Adjustments are as follows.
(1) The 0 million yen adjustment to segment profit (loss) is an elimination for inter-segment transactions.
(2) The (1,235) million yen adjustment to segment assets is an elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with the operating profit on the consolidated statement of income.

- 18 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

Fiscal Year 2020 (Jan. 1, 2020 – Dec. 31, 2020)
Reportable segment
Mail-order
Insurance
Othersand online Bridal Corporates and credit(Note
1)
Sub-total
shopping business businesscardbusinessbusiness

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

Net sales
Sales to customers
Inter-segment sales
or transfers
Total

67,465

8,400

5,092

446

81,405

1,881

83,286-

83,286

308

14

54

-

378

0

378

(378)

-

67,774

8,414

5,147

446

81,783

1,881

83,664(378)

83,286

Segment profit (loss)

2,624(3,728)

464

206

(432)

40

(391)

2

(389)

Segment assets

49,091

14,911

1,602

52

65,657

1,761

67,419(3,485)63,933

Other items
Depreciation
543
1,196
15
1,756
56
1,813
1,813
Amortization of
179
179
30
209
209
goodwill
Share of loss (profit)
of entities accounted
162(3,677)(3,515)(3,515)(3,515)for using equity
methodInvestment inequity-method
684
684
684
684
affiliates
Increase in property,
plant and equipment
1,328
379
30
1,738
54
1,792
1,792
and intangible assets
Notes: 1. Others represent the businesses which are not included in any of the four reportable segments and consist of thechildcare support business and manufacturing and sales of cosmetics.
2. Adjustments are as follows.
(1) The 2 million yen adjustment to segment profit (loss) is an elimination for inter-segment transactions.
(2) The (3,485) million yen adjustment to segment assets is an elimination for inter-segment transactions.
3. Segment profit (loss) is adjusted to be consistent with the operating loss on the consolidated statement of income.

- 19 -SENSHUKAI CO.,LTD. (8165) Financial Results for Fiscal Year 2020

Per Share Information

Net assets per share

Fiscal Year 2019
(Jan. 1, 2019 – Dec. 31, 2019)
880.56(Yen)
Fiscal Year 2020
(Jan. 1, 2020 – Dec. 31, 2020)
699.01201.11(95.23)

Net income (loss) per share

152.54
Diluted net income per share
Notes: 1. Diluted net income per share in Fiscal Year 2020 is not presented since Senshukai has no outstanding dilutive securities,
and posted a net loss.
2. Senshukai’s stock held by the executive stock compensation trust is included in treasury shares, which are deducted fromthe average number of shares outstanding during the period for the calculation of net income per share and diluted net
income per share for Fiscal Year 2019 (deduction of 81,000 shares in Fiscal Year 2019). In addition, on April 19, 2019,
the Board of Directors approved a resolution to terminate the stock compensation plan that is linked to results ofoperations. As a result, 173,400 shares of Senshukai stock that were held by the trust were cancelled on June 21, 2019.
3. Basis for calculation of net income (loss) per share and diluted net income per share is as follows.
(Millions of yen)
Fiscal Year 2019
Fiscal Year 2020
(Jan. 1, 2019 – Dec. 31, 2019) (Jan. 1, 2020 – Dec. 31, 2020)
Net income (loss) per share
Profit (loss) attributable to owners of parent

8,182(3,946)

Amounts unavailable to common shareholders

100-[Including: dividends for Class A preferred stock]
Profit (loss) attributable to owners of parent related tocommon stock
Average number of shares outstanding during the period(thousand shares)

[100]

[-]

8,082

(3,946)40,191

41,440

Diluted net income per share
Adjustment to profit attributable to owners of parent
Increase in number of common stock (thousand shares)[Including: number of Class A preferred stock (thousand
shares)][Including: number of Class B preferred stock (thousand
shares)]Number of residual securities with no dilution excluded
from calculation of diluted net income per share--

12,797-[4,570][ -][8,226]

[ -]

-

-

Significant Subsequent Events
Not applicable.

* 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.

- 20 -