This document is a translation of the Japanese financial statements and is not in conformity with accounting principles of the United States.

SENKO Group Holdings Co., Ltd.

Summary of Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2019
[Japan GAAP]

Name of Listed Company:
Code Number:
Representative:
Inquiries:

August 10, 2018
SENKO Group Holdings Co., Ltd.
Stock Listed on: The First Section of the Tokyo Stock Exchange
9069
URL http://www.senkogrouphd.co.jp/en/
Title: President
Name: Yasuhisa Fukuda
Title: Executive Officer, Public Relations and IR
Name: Noburoh Sasaki
Tel. (06) 6440-5155

Scheduled Date of Issue of Quarterly Financial Report:
Quarterly Supplemental Information Materials:
Scheduled Date of Quarterly Information Meeting:

August 14, 2018

Scheduled Date of Dividend Paid: −

None
None
(Amounts less than ¥1 million have been rounded down)

1. Consolidated Operating Results for the Three Months Ended June 30, 2018
(1) Consolidated Operating Results (Cumulative)
Operating revenue
Million yen
129,365
119,605

Three months ended June 30, 2018
Three months ended June 30, 2017

%
8.2
8.4

(Percentage figures represent year-on-year changes)
Profit attributable toOperating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen
%
4,697
22.6
4,856
22.8
2,919
53.6
3,830
(7.9)
3,954
(2.3)
1,901
(9.3)

(Note) Comprehensive income
Three months ended June 30, 2018: ¥3,178 million (6.2%)
Profitper share

Three months ended June 30, 2017: ¥2,991 million (38.3%)
Diluted profit
per share

Yen
19.21
12.54

Yen
17.82
11.63

Total assets
Million yen
342,892
333,972

Net assets
Million yen
121,364
118,056

Three months ended June 30, 2018
Three months ended June 30, 2017(2) Consolidated Financial Position

As of June 30, 2018
As of March 31, 2018
(Reference) Shareholders’ equity:
As of June 30, 2018: ¥114,045 million

Equity ratio
%
33.3
33.7

Net assets per share
Yen
750.39741.44As of March 31, 2018: ¥112,643 million

2. Dividends
June 30

September 30
Yen
11.00

Yen
−
Fiscal year ended March 31, 2018−
Fiscal year ending March 31, 2019
Fiscal year ending March 31, 2019
13.00
(Forecast)(Note) Change in the estimation of dividend for the fiscal year in this period: None

Annual dividend
December 31
YenMarch 31

Total

−

Yen
11.00

Yen
22.00

−

13.00

26.00

3. Forecast of Consolidated Operating Results for the Fiscal Year Ending March 31, 2019 (From April 1, 2018 to March 31, 2019)
Operating revenue
Million yen%
First half ending September 30, 2018
260,000
7.3
Fiscal year ending March 31, 2019
530,000
7.7(Note) Change in the forecast made in this period: None

Operating profit
Million yen
9,000
19,300

%
12.6
12.9

(Percentage figures represent year-on-year changes)
Profit attributable toProfitOrdinary profit
owners of parent
per share
Million yen% Million yen%
Yen
9,000 12.1
5,400
24.1
35.54
19,300 11.5
11,50021.0
75.70

Notes(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries associated with change in scope of
consolidation): Yes
Newly included: 1 company (Company name) M-Senko Logistics Co., Ltd.
(2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting principles and estimates, and retrospective restatement(a) Changes due to revision of accounting standards: None(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(4) Shares outstanding (Common shares)(a) Shares outstanding (including treasury shares)
As of June 30, 2018:

152,861,921 shares

As of March 31, 2018:

152,861,921 shares

880,018 shares

As of March 31, 2018:

937,015 shares(b) Treasury shares
As of June 30, 2018:(c) Average number of shares (Cumulative)
Three months ended June 30, 2018:

151,980,565 shares

Three months ended June 30, 2017:

151,619,822 shares(Note) Starting with the first quarter of the fiscal year ended March 31, 2015, the number of treasury shares at term-end includes Senko
shares owned by the trust account of employee stock ownership plan (as of June 30, 2018: – shares; as of June 30, 2017: 736,600
shares), following revisions to accounting principles due to the amendment of accounting standards. Starting with the third quarterof the fiscal year ended March 31, 2018, the number of treasury shares at term-end includes Senko shares owned by the trust
accounts of Performance-linked Stock Compensation Plan for Employees (as of June 30, 2018: 349,900 shares) andPerformance-linked Stock Compensation Plan for Directors (as of June 30, 2018: 210,200 shares).
Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.
Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report was prepared
and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number ofreasons. For information about the assumptions used for forecasts and precautions concerning the use of forecasts, please see “Forecast
for the six-month period and the full-term of the fiscal year ending March 31, 2019” on page 3.

Index to accompanying materials

1．Results of Operations and Financial Condition ........................................................................................................................................ 2(1) Results of operations ......................................................................................................................................................................... 2(2) Financial condition ............................................................................................................................................................................. 3(3) Forecast for the six-month period and the full-term of the fiscal year ending March 31, 2019 ......................................................... 3
2．Consolidated Financial Statements ......................................................................................................................................................... 4(1) Consolidated balance sheets .............................................................................................................................................................. 4(2) Consolidated statements of (comprehensive) income ....................................................................................................................... 6
Consolidated statements of income
For the three months ended June 30, 2017 and 2018.................................................................................................................... 6
Consolidated statements of comprehensive income
For the three months ended June 30, 2017 and 2018.................................................................................................................... 7

1

1.

Results of Operations and Financial Condition(1) Results of operations
In the three-month period of the fiscal year ending March 31, 2019 (April 1, 2018 to June 30, 2018), the Japanese economy has been on
a path of recovery amid the continuing improvement in the corporate earnings and employment and income environment. Meanwhile, theoverseas economy has been continuing to mount a modest recovery on the whole, despite concerns that include uncertainty regarding
political measures of respective nations and developments with respect to trade issues.
In the logistics industry where our core business lies, although the labor shortages and the rise in fuel prices have continued, freight
volume has been firm mainly for consumer-related and production-related cargo.
In this environment, the Senko Group has been working to expand its business areas, upgrade its operating system and strengthen its
earnings capacity, as the second year of “Senko Innovation Plan 2021 (SIP21)” five-year medium-term business plan.
The following provides an outline of our main activities in the three-month period.
To expand its business areas, in April SENKO Co., Ltd. commenced operations of Higashi Fuji PD Center (Fuji City, Shizuoka Prefecture)in order to expand business for major drug store logistics, and in May it took charge of logistics business of a major apparel manufacturer
and commenced operations of Nagareyama Logistics Center (Nagareyama City, Chiba Prefecture).
In April, in order to expand operations involving frozen and refrigerated logistics, Runtec Corporation commenced operations of its Osaka
Branch Nanko Center (Osaka City) which is equipped with Japan’s largest automated frozen storage warehouse with a quake-absorbing
structure. Also in April, it expanded the frozen and cold storage warehouse of its Fukuoka Branch Center (Fukuoka City).
Outside Japan, in May SHANGHAI SENKO INTERNATIONAL FREIGHT FORWARDING INC. commenced operations of its Qingpu
Logistics Center, located in Shanghai, in order to fortify its logistics functions in China’s Shanghai region.
To upgrade our operating system, we have been actively moving ahead with labor-saving and mechanization initiatives in our distribution
centers by adopting the latest technologies such as robotic arms and unmanned forklifts.
In order to further accelerate such initiatives going forward, in April we set up the AI Project and the Robotics Project, both promoting R&D
and other such endeavors.
In relation to those projects, in July we established innovatech studio Co., Ltd. which develops next-generation technologies in areas
such as AI and robotics, and engages in system sales.
Meanwhile, having succeeded SENKO Co., Ltd.’s marine shipping business, Senko Line Co., Ltd. started business operations in April.
Senko Line aims to expand the marine shipping business by joining forces with Group companies NIPPON MARINE CO., LTD. and
EIKICHI KAIUN CO., LTD. and accelerating a modal shift and other initiatives.
With respect to our modal shift initiatives, in June we received the Logistics Environment Grand Prix Award (the highest Logistics
Environment Award) and three Logistics Environment Special Awards from the Japan Association for Logistics and Transport inrecognition of our four initiatives that include switching from the previous use of trucks to the use of railroads and marine vessels forlong-distance transport of beverage, chemical product, food, housing material and other items.
To strengthen our earnings capacity, we made progress in revising the freight charges and overhauling the terms of business, and also
worked on streamlining back office operations and improving productivity at distribution sites.
The three-month-period performance was as follows.
(Unit: Millions of Yen)

Operating revenue
Operating profit
Ordinary profit
Profit attributable to owners ofparentThree months ended
June 30, 2017
119,605

Three months ended
June 30, 2018
129,365

3,830
3,954
1,901

Change

%
9,759

8.2

4,697
4,856

867
901

22.6
22.8

2,919

1,018

53.6

Consolidated operating revenue for the three-month period ended June 30, 2018 of the current fiscal year increased 8.2% year on year to¥129,365 million. This result mainly reflected effects of expanding sales and revising the freight charges, year-on-year differences arisingwith respect to ANZEN YUSO CO., LTD. and OKUMURA CO., LTD. which became consolidated subsidiaries in the previous fiscal year,
and furthermore moves taken since April this year to make operating companies of living support services into consolidated subsidiaries(KEIHANNA helper station Co., Ltd., VENUS CO., LTD., BLUE EARTH JAPAN Co., Ltd., etc.).
On the profit front, despite higher costs largely stemming from rises in expenses for hiring vehicles and other outsourcing costs, andincreases in fuel prices, consolidated operating profit increased to ¥4,697 million, up 22.6% year on year, and consolidated ordinary profit
increased to ¥4,856 million, up 22.8% year on year. The upturn in profits was largely attributable to factors that include positive effects on
profits brought about by expanding sales, revising freight charges and making entities into consolidated subsidiaries, and furthermore dueto the decrease in the amount amortized for actuarial differences in accounting for retirement benefit obligations.

2Profit attributable to owners of parent increased to ¥2,919 million, up 53.6% year on year, partially as a result of having made Runtec
Corporation and other entities into wholly owned subsidiaries.
The three-month-period operating revenue by segment was as follows.
Logistics
Operating revenue grew 8.7% year on year to ¥91,101 million in this segment. This was mainly attributable to higher revenues generated
by large facilities opened in the previous fiscal year, expansion of sales to new customers with respect to daily-use items, food products,
apparel, and chemical products, and year-on-year differences related to the timing of consolidation of ANZEN YUSO CO., LTD.
Trading & commerce
Operating revenue grew 3.8% year on year to ¥35,472 million in this segment. This was mainly attributable to higher revenues from tradeoperations and sales of petroleum products, and also due to year-on-year differences related to the timing of consolidation of OKUMURA
CO., LTD.
OthersOperating revenue rose 75.3% year on year to ¥2,791 million in this segment. This was mainly attributable to higher revenues due to theconsolidation of operating companies of living support services.
(2) Financial condition
Assets, liabilities and net assets
Total assets
Total assets as of June 30, 2018 were ¥342,892 million, ¥8,919 million higher than at the end of the previous fiscal year. Current assets
amounted to ¥120,036 million, up ¥5,888 million from the end of the previous fiscal year. This mainly reflected an increase of ¥7,208
million in cash and deposits, despite a decrease of ¥723 million in notes and operating accounts receivable. Non-current assets totaled¥222,803 million, up ¥3,036 million from the end of the previous fiscal year. This was primarily due to increases of ¥5,445 million inproperty, plant and equipment and ¥498 million in intangible assets, despite a decrease of ¥2,906 million in investments and other assets.
Liabilities
Liabilities as of June 30, 2018 increased ¥5,611 million from the end of the previous fiscal year to ¥221,527 million. Current liabilities
totaled ¥110,296 million, up ¥4,247 million from the end of the previous fiscal year. This was mainly due to an increase of ¥11,715 million
in short-term loans payable, despite decreases of ¥1,476 million in notes and operating accounts payable-trade, ¥3,561 million in income
taxes payable and ¥1,636 million in provision for bonuses. Non-current liabilities totaled ¥111,230 million, up ¥1,363 million from the endof the previous fiscal year. This was primarily due to increases in long-term loans payable of ¥760 million and long-term lease obligationsof ¥463 million.
Net assets
Net assets as of June 30, 2018 rose ¥3,308 million from the end of the previous fiscal year to ¥121,364 million. This was mainly
attributable to increases of ¥274 million in capital surplus, ¥943 million in retained earnings and ¥1,922 million in non-controlling interests.
The equity ratio as of June 30, 2018 decreased by 0.4 percentage points to 33.3% from the end of the previous fiscal year.
(3) Forecast for the six-month period and the full-term of the fiscal year ending March 31, 2019
No revisions have been made to the forecast of consolidated operating results for the first half ending September 30, 2018 and the fiscal
year ending March 31, 2019, announced in “Summary of Financial Statements for the Fiscal Year Ended March 31, 2018” on May 10,
2018.

3

2.

Consolidated Financial Statements(1) Consolidated balance sheets(Unit: Millions of Yen)
As of March 31, 2018

As of June 30, 2018

AssetsCurrent assets
Cash and deposits

24,99532,203

Notes and operating accounts receivable

70,52669,803Merchandise and finished goods

7,293

7,186

Work in process

351

515

Raw materials and supplies

536

577

10,460

9,769

(16)

(19)

114,148

120,036

Buildings and structures, net

55,04566,245

Land

59,61359,717

Other, net

45,411

39,553

Total property, plant and equipment

160,071

165,516

Goodwill

6,522

6,859

Other

4,225

4,385

Total intangible assets

10,747

11,24522,642

20,444

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Intangible assets

Investments and other assets
Investment securities
Long-term loans receivable

3,709

3,679

Net defined benefit asset

3,658

3,814

Guarantee deposits

12,11812,285

Deferred tax assets

4,317

3,287

Other

3,718

3,701

Allowance for doubtful accounts(1,216)(1,172)

Total investments and other assets

48,94746,041

219,766

222,803

Business commencement expenses

57

52

Total deferred assets

57

52

333,972

342,892

Total non-current assets
Deferred assets

Total assets

4

(Unit: Millions of Yen)
As of March 31, 2018

As of June 30, 2018

Liabilities
Current liabilities
Notes and operating accounts payable-trade37,41835,942

Electronically recorded obligations-operating

7,189

7,126

Current portion of bonds

48

48

Short-term loans payable

29,351

41,066

Lease obligations

3,073

3,028

Income taxes payable

4,509

947

Provision for bonuses

4,625

2,989

197

83

Other

19,63419,063

Total current liabilities

106,048

110,296

Bonds payable

17,16817,144

Convertible bond-type bonds with share acquisitionrights10,03910,037Long-term loans payable

63,232

63,992

Lease obligations

7,342

7,806

Provision for directors’ retirement benefits

159

156

Provision for special repairs

82

91

Net defined benefit liability

6,901

6,817

Asset retirement obligations

819

908

4,120

4,276

109,866

111,230

215,915

221,527

Capital stock

26,52826,528

Capital surplus

29,73030,004Retained earnings

54,96855,912

Treasury shares

(590)

(569)

110,637

111,876

Provision for directors’ bonuses

Non-current liabilities

Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

1,775

1,863

Deferred gains or losses on hedges

(61)

(11)

Foreign currency translation adjustment

334

264

Remeasurements of defined benefit plans

(42)

52

2,005

2,169

Share acquisition rights

373

356

Non-controlling interests

5,040

6,962

118,056

121,364

333,972

342,892

Total accumulated other comprehensive income

Total net assets
Total liabilities and net assets5(2) Consolidated statements of (comprehensive) income(Consolidated statements of income)(For the three months ended June 30, 2017 and 2018)(Unit: Millions of Yen)
Three months ended
June 30, 2017

Three months ended
June 30, 2018

(April 1, 2017–June 30, 2017)(April 1, 2018–June 30, 2018)

Operating revenue

119,605

129,365

Operating cost

106,970

114,861

Operating gross profit

12,635

14,503

Selling, general and administrative expenses

8,805

9,806

Operating profit

3,830

4,697

Interest income

25

28

Dividend income

74

78

Other

453

473

Total non-operating income

553

580

Interest expenses

241

273

Other

187

148

Total non-operating expenses

429

421

3,954

4,856

Subsidy income–

187

Reversal of allowance for doubtful accounts for
subsidiaries and associates–

46

Gain on sales of non-current assets–

37

Delinquency charges

157–

Total extraordinary income

157

271

–

187

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on reduction of non-current assets
Loss on retirement of non-current assets–

35

Loss on office withdrawal

269–

Total extraordinary losses

269

222

3,842

4,905

Income taxes-current

858

749

Income taxes-deferred

498

1,140

Total income taxes

1,357

1,890

Profit

2,485

3,015

584

95

1,901

2,919

Profit before income taxes

Profit attributable to non-controlling interests
Profit attributable to owners of parent

6

(Consolidated statements of comprehensive income)(For the three months ended June 30, 2017 and 2018)(Unit: Millions of Yen)
Three months ended
June 30, 2017

Three months ended
June 30, 2018

(April 1, 2017–June 30, 2017)(April 1, 2018–June 30, 2018)

Profit

2,485

3,015

Valuation difference on available-for-sale securities

314

102

Deferred gains or losses on hedges

25

52

Foreign currency translation adjustment

(74)

(86)

Remeasurements of defined benefit plans, net of tax

241

95

Total other comprehensive income

506

163

2,991

3,178

2,365

3,084

625

93

Other comprehensive income

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests

7