Asahi Holdings, Inc.

Financial Results for Q3 FY2023.3

January 31, 2023
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.
II.

Financial Results for Q3 FY2023.3(April 1, 2022 ~ December 31, 2022)

Appendix

Copyright © Asahi Holdings, Inc. All rights reserved.

1

01 Consolidated Results
Unit：billion yenQ3Q3

FY2022.3

FY2023.3

Results

FY2023.3
YoY

Results

Forecast

ChangeYoY
ChangeRevenue

144.5

205.8

61.3

270.0

77.6

Operating profit

19.3

17.5(1.8)

24.0(2.4)

13.4%

8.5%

(4.9%)

8.9%(4.9%)

Profit before tax

19.3

14.4(4.9)

22.6(3.8)

Profit※1

13.6

10.2(3.4)

15.6(3.1)

Capex

4.5

3.4(1.2)

6.5

(1.8)

Depreciation

2.0

2.5

0.5

3.0

0.3

Ratio

※1※Profit attributable to owners of parent

Copyright © Asahi Holdings, Inc. All rights reserved.

2

02 Business Environment of Q3 in Each Segment
Precious Metals Business••

The volume of precious metal collected in the precious metals recycling business increased YoY but decreased from second quarter. The main reasons
include decrease in the volume collected -- from a major customer in the jewelry sector, in the catalyst sector due to the sluggish automobile industry
and a weaker yen, and in the electronics sector due to a fall in demand for some products in the electronic components.
In the North American refining business, product processing and sales operations remain as strong.

Business FieldDentistry
Jewelry
Catalyst
Electronics
North American refining

Business Environment
The downward trend in collection volume continues due to extended limitations on the number of patients as part ofongoing infection control measures in addition to the spread of substitute products.
The volume collected from a major customer is decreasing for purchases while the volume remains flat formanufacturing.
The volume collected in Japan is decreasing due to a weaker yen and falling market prices. The volume collectedfrom Korean catalyst manufacturers is increasing.
EV-related and industrial application items remain strong, but the volume collected is decreasing due to a large drop
in smartphone/ICT-related products.
Trades in areas such as product processing and sales remain strong.

Environmental Preservation Business•

The volume collected from educational and medical institutions is trending upward, but those from construction is trending downward. Collection
volume for automobile-related items remains sluggish.

Industry
Educational/Researchinstitution
Construction
Automobile
Electronics
MedicalChemicalBusiness Environment
The volume collected from educational institutions is trending upward compared to the same period last year.
The number of housing starts is on the decline due in part to soaring material prices. The volume of related waste
generation is also falling.
The number of plants in operation continues to drop due to a sustained shortage of semiconductors and components.
The volume of waste collection from related component plants remains low.
Inventory adjustment moves by electronics manufacture affected production of components suppliers. Related waste
generation is on a downward trend.
The number of recuperation accommodation facilities is growing due to number of COVID-19 patients is increasing,
expanding the volume of related medical waste once again.
Production indexes in the chemical industry are slightly increasing compared to last year
*Mainly described the environment in third quarter compared with that in second quarter

Copyright © Asahi Holdings, Inc. All rights reserved.

3

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

Refining Business in North America

Q3 FY2023.3 Results
Revenue significantly increased thanks to theincrease in sales volume in line with increased incollection volume mainly from jewelry sector.
The composition ratio of dental and catalyst sector,
which have relatively high profit margins, decreased.
Expenses increased due to depreciation associatedwith Bando plant, rising fuel prices and other factors.

Q3 FY2023.3 Results
The various value-added business transactions thatserve as the base of the refining business were strong.
Due to the impact of the COVID19, “Stock-Take”,
which in the previous year contributed to profits
equivalent to two years' worth when combined withthe previous two years, has normalized in the currentyear.

➡Increase in revenue and decrease in profit➡Increase in revenue and decrease in profit

Precious

Q3 FY2022.3

MetalsResults

Q3 FY2023.3
Results

FY2023.3

YoY Change

Forecast

YoY Change

Revenue

131.0

192.4

61.5

251.0

77.1

Operating Profit

19.4

17.4(2.0)

24.2

(2.4)

14.8%

9.0%

(5.8%)

9.6%(5.7%)

Ratio

Copyright © Asahi Holdings, Inc. All rights reserved.

4

04 Ref: Volume of Precious Metals Collected•

The volume of precious metals collected increased mainly in jewelry sector.

•Increase in volume of collection from jewelry and catalyst sector covered the decrease in volumeof collection from dentistry sector.

AuPdPt

Unit：kg

進捗率72％Copyright © Asahi Holdings, Inc. All rights reserved.

5

05 Environmental Preservation Business
Environmental Preservation
Q3 FY2023.3 Results
Thanks to the gradual recovery of industrial production activity, the processing volume of industrial wastes increased
and plant usage rate was maintained in high level.
Despite revenue decreased due to the impact of deconsolidation of JW Glass Recycling Co., Ltd. (Revenue: 0.8 billion
yen, OP: 0.1 billion yen in FY2022.3), operating profit covered the impact and secured even higher results.

➡Decreaseinrevenue and increase in profit[Unit: billion yen]

Environmental
Preservation

Q3 FY2022.3
Results

Q3 FY2023.3
Results

FY2023.3

YoY Change

Forecast

YoY Change

Revenue

13.5

13.4(0.1)

19.0

0.4

Operating Profit

2.7

3.3

0.6

3.9

0.2

20.1%

24.8%

4.7%

20.5%

0.5%

Ratio

Copyright © Asahi Holdings, Inc. All rights reserved.

6

06 Financial Position
Unit：billion yen

Current Assets
Trade receivables

Mar 31,

Dec 31,

2022

2022

Change

241.8

312.0

70.2

151.4

210.9

59.4

Remarks

The greater part of the balance and changes are receivables that constitute borrowings tomatch metal procurement in North American business.

The majority of inventory balances and changes in inventories are linked to materials, works inInventories

63.4

64.9

1.5

process and products that contain precious metals in the precious metals recycling
business. Risks associated with price fluctuations and quality deterioration are extremely
limited because precious metals prices are hedged at the time of purchase.

Others

26.9

36.2

9.3

Non-current assets

56.6

49.4

(7.2)

Total Assets

298.4

361.4

63.0

Liabilities

193.3

254

60.8
Borrowings for Advance Trading in North American business constitute a large percentage.

Bonds and loans

150.9

225.2

74.3

Risks associated with price fluctuations and bad debts are extremely limited becausebullion for Adovance Trading is procured through borrowing after receiving raw materials andprecious metal prices are hedged according to the repayment date.

Others42.3

28.8(13.5)

Capitals

105.1

107.4

2.2

Total equity and liabilities

298.4

361.4

63.0

Copyright © Asahi Holdings, Inc. All rights reserved.

707 Cash Flow
Unit：billion yen
Q3 FY2023.3

Operating CF

Remarks

7.4
The greater part of the changes is the collected raw materials that contain precious materials, works-in-progress

Changes in inventories(1.5)

and finished products in precious metal recycling business. Risks associated with price fluctuations and quality
deterioration remain extremely limited because raw materials are purchased after the precious metal content is analyzed
and the precious metal prices are hedged on the futures market at the time of the purchase.

Of the increase/decrease amount, (61.3) billion yen reflects the increase/decrease in receivables commensurate
Changes in trade and otherreceivables

with borrowings for advance delivery transactions, etc. in the North American business. Risks associated with(63.0) price fluctuations and bad debts are extremely limited because bullion for Advance Trading in North Americanbusiness is procured through borrowing after receiving raw materials and precious metal prices are hedged according to
the repayment date.

Changes in trade and otherpayables

Of the increase/decrease amount, 56.8 billion yen reflects the increase/decrease in borrowings for Advance
61.1

Trading in the North American business. Of the increase/decrease amount in borrowings for Advance Trading in theNorth American business is shown not as CF from financing activities but as increase/decrease in trade receivables in
CF from operating activities.

Others10.8

Investment CF(2.4)

Financing CF(4.7)

Changes in loans and bonds
Proceeds from issuance ofbonds

1.7
4.9

Dividends(7.0)

Others(4.4)

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

Copyright © Asahi Holdings, Inc. All rights reserved.

3.0
3.3

8

08 Shareholder Return Policy
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 for capital
investment and M&A for future growth. We have never before reduced dividends and no change of the year-end
dividend forecast.

Earnings pershare(yen)Dividend payout
ratio(%)

135.39114.07125.12326.9

231.27201.52

23.3

52.6

5226

38.9

44.7

* The Company conducted a stock split with a ratio of two-for-one on April 1, 2021. The figures before and including FY2020 are convertedto the figures reflecting the stock split.
Copyright © Asahi Holdings, Inc. All rights reserved.

9I.
II.

Financial Results for Q3 FY2023.3(April 1, 2022 ~ December 31, 2022)

Appendix

Copyright © Asahi Holdings, Inc. All rights reserved.

10

Ref•
•Share Transfer of Fuji Medical Instruments Mfg. Co., LtdAll the holding shares of Fuji Medical Instruments Mfg. Co., Ltd, an equity-method affiliatecompany, were transferred to Johnson Health Tech Co., Ltd. in December, 2022.
The share transfer had no impact on operating profit, while recorded a loss on transfer of shares of
1.8 billion yen in “Other non-operating expenses

About Fuji Medical Instruments Mfg. Co., Ltd.
Location
Job title and name of representative
Description of business

Unit：million yen

1-22, Noninbashi 1-chome, Chuo-ku,

Share capital

Osaka

Representative Director

Revenue

Manufacture, sales, import and export ofNet income

Seiji Yasunaga

health equipment, etc.

（FY2021.12）（FY2021.12）30
17,846720

About share transfer
Transferee company nameJohnson Health Tech. Co., Ltd.

Number of shares to be transferred

120,000

Number of shares owned before transfer120,000

Copyright © Asahi Holdings, Inc. All rights reserved.

Transfer price
Number of shares

owned after transfer

Not

Disclosed011

RefSound Financial BaseFinancial Position

Equity Ratio[Unit: ¥ billion]

Dec 31, 2022

Excluding North
American businessCurrent
Assets

312.0

113.7

Non-current
assets

49.4

49.4

Total
Assets

361.4

163.2

Liabilities

254.1

55.8

Capitals

107.4

107.4

Total equity
and liabilities

361.4

163.2

•
••

Dec 31, 2022

29.7%
loan for “Advance Trading”

Excluding North
American business

65.8%

Enabling large-scale funding for the finance services with low interest.
To expand our business, refining and finance is indivisible.

In general, rising interest will not affect the profitability of the North American business.

Copyright © Asahi Holdings, Inc. All rights reserved.

12Ref••Digital Transformation Business of Waste Treatment
Contribute to the building of a low-carbon, sustainable society through digitalization of industrial
waste from discharge to treatment and reduction of environmental impact
Expand the market to cover waste disposal companies with a major version upgrade scheduled in
2023

2025～
2023～
June 2022～
Phase01
Launch DXE ServiceThe business efficiency of collection andtransportation providers is improved withuse of electronic manifests and ordermanagement functions using SaaS.
Electronic manifests
Alternative to vouchers
Automatic generation ofelectronic manifests

Phase03
Contribution to CO2 emissions
reductions

Phase02
Release DXE Station
All waste management companies are connectedseamlessly from collection management todelivery management.

Contribute to carbon neutrality throughautomatic calculation of CO2 emissions.
Calculation of CO2 emissions
Business rating &matching

Measures on carbon
credits

Discharge, collectionand disposal
workflowCompliance check withelectronic contractsDischarge, collection
and disposal
workflowCompliance check withelectronic contracts

Sales and billing
management

Electronic manifests:
Alternative to vouchers

Sales and billing
management

Electronic manifests:
Alternative to vouchers

Automatic generationof electronic manifests

Interface with vehicle
dispatch and driver
apps

Automatic generationof electronic manifests

Interface with vehicle
dispatch and driver
appsInterface with vehicle dispatch
and driver apps

Copyright © Asahi Holdings, Inc. All rights reserved.

13

RefLow Carbon Technology Research, Development andDemonstration Program• ASAHI PRETEC Corp. has proposed the "Development of a system for building a green hydrogen supply chain
through effective use of by-products" jointly with FC Development Co., Ltd., X-Scientia Co., Ltd., and Sumitomo
Mitsui Trust Bank, Limited., for the "2021 Low Carbon Technology Research, Development and Demonstration
Program," which was publicly called on by the Global Environment Bureau, Ministry of the Environment and thissystem has been selected for a partially-subsidized project.
• The introduction of a hydrogen generator at the Kitakyushu Plant was completed in December 2022 and technicaldemonstration testing started from January 2023.
• The possibility for collaboration between local governments and businesses for local production and sale ofhydrogen energy is being considered.

Copyright © Asahi Holdings, Inc. All rights reserved.

14

Progress of Capital Investment

RefInvestment purposes: Business expansion, margin improvement

Total amount of investment in Mid-term business plan: ¥22.7 billion

Bando Plant Largest state-of-the-art precious
metals recycling plant in Asia

FY2022/3

North American Refining Business Launching warehouse business &strengthening existing equipment

FY2023/3

New incinerator in Yokohama Large incinerator in eastern JapanUnit: ¥billion
Remarks

Mid-term
plan

Results

Mid-term
plan

6.3

7.7

3.2

5.8 ―

Domestic

4.7

4.0

1.9

2.2

Approx. ¥300 million as an investment in building ahydrogen supply chain

Overseas

1.6

3.6

1.3

3.6

Delay in facility to be completed in FY2022.3 andadditional investment

Environmental
Preservation

0.8

0.7

2.2

0.7 Partial review of investment plan by reviewing process

Total

7.1

8.3

5.4

6.5 No change in total investment for 3 years

PreciousMetals

Copyright © Asahi Holdings, Inc. All rights reserved.

Forecast15Bando Plant in Ibaraki PrefectureRef••••

Consolidating processes from raw material collection to finishing
Improving production efficiency by introducing cutting-edge IoT technology.
Excellent industrial production area from the viewpoint of BCM (Business Continuity Management).
Certified as top tier and “ZEB Ready” by Building-Housing Energy-efficiency Labeling System of Japan's
Ministry of the Environment.

© BANDO CITY.

Ref: Bando City Resilience Plan
In the "Bando City Resilience Plan" created by Bando City, which learned from the lessons from the 2011 Great
East Japan Earthquake. From the perspective of BCM and supply chain, posted with the goal of "Goal 5: Do notcause economic activities to malfunction."<Source> https://www.city.bando.lg.jp/page/page006456.html
https://www.mlit.go.jp/common/001031559.pdf

Copyright © Asahi Holdings, Inc. All rights reserved.

16

Ref

Selected as a Constituent of Index• JPX-NIKKEI 400
We have been included in the JPX Nikkei Index 400 for three consecutive years. The index

consists of companies that are highly appealing to investors and that meet the requirementsof global investment standards, such as efficient use of capital and management
perspectives that are conscious of investors.

• FTSE Blossom Japan Sector Relative Index
We have been included in the FTSE Blossom Japan Sector Relative Index (one ofthe GPIF's benchmarks), which reflects the performance of Japanese companies
that demonstrate strong environmental, social, and governance (ESG) practices intheir respective sectors, and is designed to be sector-neutral.

Unit:Yen

Copyright © Asahi Holdings, Inc. All rights reserved.

17RefTrend in Metals Prices (Gold, Palladium)

Copyright © Asahi Holdings, Inc. All rights reserved.

18

Ref

Trend in Metals Prices (Platinum, Average Price)

Unit：YenPrecious

Metal Prices

Q3

Q3

FY2022/3

FY2023/3

Average price

Average pricefor the period

for the period

Gold

6,587

7,885

1,299

Palladium

7,127

8,999

1,872

Platinum

3,732

4,492761(per gram)

Copyright © Asahi Holdings, Inc. All rights reserved.

Change◆Reference
Gold…Quote from mining company
Palladium …Nikkei low price
Platinum …retail price(exclude tax)
19