Asahi Holdings, Inc.

Financial Results for Q3 FY2022.3

January 28, 2022
These forecast performance figures are based on information currently available to the company’s management and certain
assumptions judged rationally. Accordingly, there might be cases in which actual results materially differ from forecasts of thisreport.
Copyright © Asahi Holdings, Inc. All rights reserved.

I.

Financial Results for Q3 FY2022.3(April 1, 2021 ~ December 31, 2021)

II. Appendix

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1

01 Consolidated Results[Unit: ¥ billion]

Q3
FY2021.3

ResultPrecious Metals Business is strong,driving results

Increase in revenue and profit
Revenue:
144.5 billion yen (+24.5 billion)
Operating profit:19.3 billion yen (+2.1 billion)

Q3
FY2022.3

FY2022.3

ResultYoY
ChangeForecast

YoY
ChangeRevenue

120.0

144.5

24.5

190.0

25.2

Operatingprofit

17.2

19.3

2.1

26.0

0.9

14.4％

13.4%

(1.0%)

13.7%(1.6%)

Profit before
tax

17.3

19.3

1.9

26.0

(0.1)

Profit※

12.0

0.6

1.6

18.2(7.5)

Capex

3.6

4.5

0.9

7.1

1.8

Depreciation1.9

2.00.1

2.7

0.2

Ratio

※Profit attributable to owners of parent

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2

02 Business Environment in Each Segment
Precious Metals BusinessIn the precious metals recycling sector in Japan and Asia, the volume of collection from 5G-related increased while the volume of collection
from automobile-related decreased.
In refining business in North America, the volume of product processing and sales increased.

Business field

Dentistry
Jewelry
Catalyst
Electronics sector
North American refining

Business Environment

As medical treatment restrictions continued due to the measures against COVID-19, the amount of collection
decreased.
There are signs of recovery of the amount of collection from purchasers. The amount of collection frommanufacturers slightly increased due to the rapid increase in EC channel.
In domestic market, the amount of collection dropped due to the decrease in automobile sales. In overseas
market, the amount of collection from the catalyst manufacturers increased.
Although there is some impact of production cuts in vehicle-mounted devices, the amount of collection increased
backed by strong performance in the 5G-related production.
The volume of product processing and sales increased.

Environmental Preservation BusinessTransactions for electronic component-related waste liquid and medical-related waste continued to be brisk, and there are signs ofrecovery in construction industry, On the other hand, the volume of collection from food industry decreased due to the voluntary restraintof dining out.

Industry

Business Environment

Educational/Researchinstitution

The amount of collection in education industry increased.

Construction

The volume of collection from waste wood etc, increased due to recover of housing starts.

Automobile

The volume of collection of waste liquids and other materials from forging parts manufacturers decreased.

FoodThe decline of demand in the food service industry continued, leading to a decrease in the amount ofresidues and glass bottles collected.

MedicalThe volume of collection of medical wastes and incineration processing increased.

ChemicalThe volume of collection of disinfectant-related products increased.

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3

03 Precious Metals Business Segment
Precious Metals Recycling Business(Japan and Asia)

Refining Business in North America

Q3 FY2022.3
The precious metal prices rose and the volume of
precious metals sales increased.

Q3 FY2022.3
Despite a decrease in the volume of gold raw
materials received, the volume of productprocessing and sales increased.

➡Increase in both revenue and profit➡Decrease in revenue and increase in profit[Unit: ¥ billion]

Precious Metals

Q3 FY2021.3
Results

Q3 FY2022.3
Results

FY2022.3

YoY Change

Forecast

YoY Change

Revenue

105.6

131.0

25.4

171.0

26.2

Operating Profit

16.2

19.4

3.2

24.7

0.7

Ratio

15.4%

14.8%

(0.6%)

14.4%(2.2%)

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4

04 Reference: Changes in the Volume of Precious Metals
Collected and Precious Metals Prices

 Although the amount of gold collection decreased, the impact on the company’s performance
was minor because of the decrease in unprofitable transactions.
 The disclosure of information on silver was called off due to the withdrawal from photobusiness in 2018.

[Unit: kg]
Amountcollected for
PreciousMetals
Recycling

Q3 FY2021.3
ResultQ3 FY2022.3
ResultChange[Unit: yen]

PreciousMetals
Prices (pergram)

Q3 FY2021.3

Q3 FY2022.3

Q3 mid-term
average priceQ3 mid-term
average price

ChangeGold

13,714

11,410(2,304)

Gold6,274

6,369

102％

Palladium

5,015

4,387(628)Palladium

7,426

8,733

118％

Platinum

3,364

3,572208

Platinum

3,073

3,728

121％

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5

05 Environmental Preservation Business Segment
Environmental Preservation■Positive impact
Transactions for semiconductor/electronic component-related waste liquid and medical-related waste continued tobe brisk. The disposal volume of industrial waste increased,■Negative impact
INTER CENTRAL, INC. was removed from the scope of consolidation, etc.

➡Decrease in both revenue and profit[Unit: ¥ billion]

Environmental
貴金属
Preservation

Q3 FY2021.3
Results

FY2022.3

Q3 FY2022.3
Results

YoY増減
ChangeForecast

YoY増減
ChangeRevenue

14.5

13.5

(0.9)

19.0

(1.0)

Operating profit

2.8

2.7

(0.1)

4.3

0.5

19.6%

20.1%

0.4%

22.6%

3.4%

Ratio

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6

06 Financial Position[Unit: ¥ billion]

Current Assets
Tradereceivables

Mar 31,2021

Dec 31,
2021

Change

192.0

244.1

52.1

100.8

166.4

65.6

Inventories

63.5

51.9

(11.6)

Others

27.7

25.7

(2.0)

Non-current assets

52.8

53.0

0.1

Total Assets

244.8

297.0

52.2

Liabilities

146.9

194.6

47.7

Bonds and loans

104.8

162.0

57.1

Others

42.1

32.6

(9.4)

97.9

102.5

4.6

244.8

297.0

52.2

Capitals
Total equity and liabilities

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Remarks

The greater part of the balance and increases are receivables that constituteborrowings to match metal procurement in North American business.
The greater part of the balance and decreases are collected raw materials that
contain precious materials, works-in-progress and finished products in the
precious recycling business. Risks associated with price fluctuations and quality
degradation remain minimal because raw materials are purchased after theprecious metal content is analyzed and the precious metal prices are hedged on thefutures market at the time of the purchase.

The greater part of the balance is loans for Advance Trading in North Americanbusiness. Risks associated with price fluctuations and bad debts remainminimal because procurement of metals for Advance Trading by loans is taken out
within the scope of the precious metal content analysis conducted on incoming raw
materials and precious metal prices are hedged on the futures market at the time ofthe repayment.

707 Cash Flow
Operating CF

Q3 FY2022.3

14.9

Decrease in inventories

Increase in trade andother receivables

Increase in trade andother payables

Investment CF
Financing CF

Dividends
Others

Effect of exchange rate change
on cash and cash equivalents
Changes in cash deposits

11.4

The greater part of the decreases is the collected raw materials that containprecious materials, works-in-progress and finished products in precious metal
recycling business. Risks associated with price fluctuations and quality
degradation remain minimal because raw materials are purchased after theprecious metal content is analyzed and the precious metal prices are hedged on thefutures market at the time of the purchase.

(61.8)Of the increase, (64.4) billion yen are matching claims for loans for AdvanceTrading in North American business. Risks associated with price fluctuations andbad debts remain minimal because procurement of metals for Advance Trading byloans is taken out within the scope of the precious metal content analysis conducted
on incoming raw materials and precious metal prices are hedged on the futures
market at the time of the repayment.

59.1

Of the increase, 56.3 billion yen are for loans for Advance Trading in North
American business. Increase in loans for Advance Trading in North Americanbusiness is classified as increase in trade receivables in Operating CF, not Financing
CF. There are no risks associated with quality degradation and bad debts
because all loans are used for metal procurement for Advance Trading. In addition,risks associated with price fluctuations remains minimal because the precious
metal prices are hedged on the futures market.

6.3
(4.1)
(13.9)

OthersChanges in loans andbonds

Remarks[Unit: ¥ billion]

（4.8)
(7.1)
（2.0）
0.0
（3.1）

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8

08 Shareholder Returns
Basic Policy:
We will strive to consistently pay dividends without decreasing the annual dividend level from the current level.
Moreover, we aim to maintain a dividend payout ratio of 40%, while retaining sufficient internal reserves forcapital investment and M&A for future growth.

Changes in dividends per share(yen)10080Commemorative dividendYear-end dividendInterim dividend

40200Earnings pershare (yen)Dividend payout
ratio (%)

65

6060

151515FY2017.3

FY2018.34545(Forecast)

3530

31.5
1.5
1530

90

85

3030

FY2019.3

FY2020.34045

FY2021.3

FY2022.3(18.62)135.39114.07125.12326.90231.27

-23.3

52.6

52.0

26.0

38.9

* The Company conducted a stock split with a ratio of two-for-one on April 1, 2021. The figures before and including FY2020 are converted
to the figures reflecting the stock split.
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9I.

Financial Results for Q3 FY2022.3(April 1, 2021 ~ December 31, 2021)

II. Appendix

Copyright © Asahi Holdings, Inc. All rights reserved.

10RefMain Revenue Elements of Precious Metals Business

Precious Metals Recycling Business

Refining Business in North America

Income from yield differential is added to refining
fees, which is a stable source of fixed income.

Refining fees are a stable source of income. In
financial revenue, earning opportunities increase inline with the growth in incoming raw materials.

Segment

Refining fees
Precious Metals
Recycling

Yield differential(differential between actual
yield and contracted yield =free metal)

Refining fees
Yield differential
Refining in North
America

Impact on revenue

Category(differential between actual
yield and contracted yield =free metal)■Refining fees increase in line with the expansion of the amount collected.
■The unit price for refining fees is higher for those that require difficult pre-processing,which means the average unit price rises when the proportion of items that require difficult
processing is higher.

■ The volume of free metal expands when the actual yield climbs on account ofimprovements in technical capabilities and processes.

■ Income from free metal increases in line with a hike in prices.
■ The amount of fees expands when the volume of incoming raw materials (dore) increases.
■ The unit fee cost does not change over short term because contracts are long-term.
■ The volume of free metal expands when the actual yield climbs on account of improvements

in technical capabilities and processes.

■ Income from free metal increases in line with a hike in prices.
■ Income opportunities for financial transactions increase when a larger amount of rawmaterials is received.

Financial revenue■ Income increases when the interest rate for advanced delivery is improved in contracts withmines.

■ Income increases when the period of advanced delivery is extended.
■ Financial revenue increases when metal procurement costs fall, and the interest rate spread

expands.

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11

Ref

“Advance Trading” in North American Business✓Provide “Advance Trading” to return products by shortening the delivery time from the arrival of raw materials
to the return of products.
✓Will receive "interest for the number of days delivered in advance" from the clients by accepting the delivery
before the contract delivery date.
✓There is no risk of bad debt since advance delivery is performed after receiving raw materials from the client.

Financial
Institutions

Clients①Raw materials②Loan③Advance delivery④Finishing⑤Repayment

Development of new finance services such as
structured finance

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12

参考Sound Financial BaseFinancial Position

Equity Ratio[Unit: ¥ billion]

Dec 31, 2021

Excluding North
AmericabusinessCurrent
Assets

244.1

99.6Non-current
assets53.0

53.0

Total Assets

297.0

152.5

Liabilities

194.6

50.1

Capitals

102.5

102.5

Total equity andliabilities

297.0

152.5

Dec 31, 2021

34.5%
loan for “Advance Trading”

Excluding North
America business

67.2%

 Enabling large-scale funding for the finance services with low interest.
 Strengthening global competitiveness and profitability of the Refining Business by diversifying
financing method.
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13

Ref2050 Carbon Neutrality Declaration
 On December 13, 2021, we made the declaration of achieving Carbon Neutrality by 2050.
 Also, expressed our endorsement of the recommendations of the Task Force on Climate-Related
Financial Disclosures (TCFD) to promote information disclosure that aligns with TCFD
recommendations.

Plan to reduce CO2 emissions
40,670t（Base year）(CO2 emissions from energy sources)

88%

84%

Switch to CO2-free electricity,
process revision, waste to energy,
fuel revision, move to ZEB,switch
to fuel-efficient cars, etc.

50%

Adding to those to the left,
technological innovations,carbon offset, etc.
All Scope 1 and 2emissions including
CO2 emissions from
non-energy sources

0%
2015

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2020

2021 Plan

2030 Goal

2050 Goal

14

Trend in Metal Prices [Au, Pd]

Ref
Gold

7,000

FY2020.3

FY2021.3

FY2022.3〔Unit: JPY per gram〕

6,500
6,000
5,500
5,000
4,500
4,000

2019/10

Palladium

2020/01

2020/04

FY2020.3

2020/07

2020/102021/01

2021/04

FY2021.3

2021/072021/102021/12

FY2022.3

10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000

2019/102020/01

2020/04

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2020/07

2020/102021/01

2021/04

2021/072021/102021/1215

Ref

Trend in Metal Prices [ Pt ], Stock Price

Platinum〔Unit: JPY per gram〕
FY2021.3

FY2020.3

4,500

FY2022.3

4,000
3,500
3,000
2,500
2,000

2019/10Stock Price

2020/01

2020/04

FY2020.3

2020/07

2020/102021/01

2021/04

FY2021.3

2021/072021/10〔Unit：yen〕

FY2022.3

2,5002021/12

2,000

2,050

1,500

1,000

500

2020/11
Selected for JPX Nikkei 400

1,353

2019/10* The stock prices before March 31, 2021 are converted to those reflecting the stock split conducted on April 1, 2021.
2020/1

2020/4

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2020/72020/102021/12021/42021/72021/102021/1216