ARE Holdings, Inc.
Financial Results for Q1 FY2025.3

July 31, 2024
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 this report.
Copyright © ARE Holdings, Inc. All rights reserved.

2I.

Financial Results for Q1 FY2025.3

II.

Appendix(April 1, 2024 ～ June 30, 2024)

Copyright © ARE Holdings, Inc. All rights reserved.

Business Highlights of Q1 FY2025.3

3Revenue

92.3 billion yen

Plan Progress Rate

YoY+29.7 billion yen

Operating Profit

3.6 billion yen

YoY

Plan Progress Rate

+1.2 billion yen

The continuing rise in gold prices led tothe increase in gold collection especiallyin the Jewelry Sector.

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20.0 %

Reasons for an Increase in Profit

Reasons for an Increase in Revenue•

24.9 %•There was a loss in the same period last year due
to the decrease in rhodium prices, but no loss thisquarter as prices were stable.

•Overall collection of precious metals increased.

•Equity method investment gain from RENATUS Co.,Ltd is accounted starting this quarter.

4

Consolidated Results
Unit：billion yen

Q1
FY2024.3
Results

Q1
FY2025.3

FY2025.3

YoYChangeResults

PlanRevenue

62.6

92.3

+ 29.7370.0

Operating profit

2.5

3.6+ 1.2

18.0

3.9%

3.9%

△ 0.0

4.9%

Profit before tax

2.5

3.8+ 1.3

17.6

Profit2.4

3.2+ 0.8

13.1

Ratio

* "Profit" is Profit attributable to owners of parent* Revenue, operating profit, and profit before tax for the first quarter of FY2024.3 show the amounts excluding
discontinued operations (Japan Waste Co., Ltd.).

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5Reasons for Change in Operating Profit
Unit：billion yen* Amounts may not add up due to rounding.

Remarks

Unit：Yen

Precious
Metal Prices※(per gram)

Q1

Q1

FY2024.3

FY2025.3

Average price

Average pricefor the period

for the period

Gold

8,750

11,7442,994

Palladium

6,463

4,994

△ 1,469

Platinum

4,610

5,001

391

Rhodium

28,541

23,012△ 5,529

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•Price decline of palladium led to a slightdecrease in profit.

•While Japan Waste's results are
excluded from the year-ago period, theequity method investment gain fromRenatus Co., Ltd is included from thisquarter.

Change【Reference】
Gold…Quote from mining company, Palladium …Nikkei low price, Platinum …retail price(exclude tax), Rhodium …Metals Week NY
Dealer Price

6Businesses

Environmental Preservation
Business

Precious Metals Business

Revenue

Revenue－ billion yen

92.3 billion yen（YoY － billion yen）

（YoY +29.7billion yen）

Operating Profit

0.5 billion yen

Operating Profit

3.2 billion yen（YoY +0.7billion yen）

* "Other" includes sales of Rh and revenue from the North American refining business.

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（YoY+0.5 billion yen）

•Equity method investment gain from
Renatus Co., Ltd is included starting
this quarter(0.5 billion yen).

•Japan Waste's results are excluded fromthe year-ago period.

Revenues and operating profit for the same period of theprevious fiscal year exclude discontinued operations (JapanWaste Co., Ltd.).

7

Precious Metals Business｜ Collection Breakdown(YoY)

CollectionfieldElementAuPd

PtRh

Business Environment
Total amount collected：YoY 105％

Dentistry
30～50％

50～70％

Less
than10％－

Despite the market shrinking due to emerging new technologies
and alternatives, constructing sales system and expanding
measures helped to achieve the same level of collection as lastyear.

Total amount collected：YoY ：115％－Jewelry
Over 70％Less
than10％10～30％

Collection grew due to the return of various Jewelry-related
events and also the increase in the amount distributed in therecycling market as a result of rising gold prices.
Total amount collected：YoY ：99％

Electronic
Over 70％Less
than10％Less
than10％－Inventory adjustments for electronic parts and semiconductors
have been completed. Recovery has been gradual due to lessdemands for BEV, insourcing of Chinese generic parts, and delay
in increased production of AI chip.
Total amount collected：YoY ：108％

Catalysts－50～70％30～50％

Less
than10％The quantity of environmental catalystｓ fell due to improvements
made in major catalyst manufacturers and the depreciation of yen.
However, expansion of analysis trading for waste catalysts has led
to a slight increase in collection.

The symbols in the table indicate the percentage of each category in the total recovery volume (exc. Ag and Cu).
Comments for each area are compared with the same period last year.
The "total amount collected" in the text includes the amount of Ag and Cu recovered.

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8

Precious Metals Business｜Impact of Gold Collection
FY2024.3 Q1
Breakdown of revenue

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FY2025.3 Q1
Breakdown of revenue

9Precious Metals Business｜Volume of Precious Metals
Collected
Unit：kg

Unit：kgCopyright © ARE Holdings, Inc. All rights reserved.

Unit：kg

Unit：kg

10 Precious Metals Business｜Trend in Precious MetalsPrices

Au

FY2024.3 Q1

FY2025.3 Q1（¥/g）

Reference：Quote from mining company

Pd

FY2024.3 Q1

FY2025.3 Q1（¥/g）

Reference：Nikkei low price

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Metals Business｜Trend in Precious Metals
11 PreciousPrices
Pt

FY2024.3 Q1

FY2025.3 Q1（¥/g）

Reference：retail price(exclude tax)Rh

FY2024.3 Q1

FY2025.3 Q1（＄/toz）

Reference：Metals Week NY Dealer Prices

Copyright © ARE Holdings, Inc. All rights reserved.

12 North American Refining Business
The New Product Series for American Reserve: Columbia Goddess
What is American Reserve?

Columbia Goddess

Gold and silver buillon product brand produced
by Asahi Refining USA. With 200 years ofexperience, we proudly present precious metals
products mined, refined, and made in the US.

The design for new product series of American
Reserve captures Columbia-a symbol ofAmerican Spirit-wielding her torch of liberty infront of the American flag.

Aiming for※the Expansion of Warehouse Business for Greater GrowthCustomers
Assay
Refine & Process
COMEX
Standardized
ProductsCopyright © ARE Holdings, Inc. All rights reserved.

Asahi Depository

Store（COMEX Certified Warehouse）

Storage as of June, 2024

Au

Storage

760,000 oz

Ag
Storage

21,000,000 oz

Storage
feeInvestors

13 Online Sales

Official Online StoreASAHIMETALFINE EC
https://ec.asahimetalfine.com/

Online sales of buillon products have started for individual customers targeting younger generations.
We aim for expansion of the business through our ability to provide one-stop service for collecting,producing, and selling precious metals.
Examples of Products Available

Silver
5 types of barsGold1 oz bar

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Silver1 oz mint

Expanding the Variety of Products

We will continue to expand our line-up of uniqueproducts including minted products of Asahi
Refining.
Delivery destinations are only within Japan and are not available overseas.

14 Promoting Overseas Businesses
India: Huge Market with a Populationof 1.4 billion
Demand for Au inJewelry*1

Passenger Car
Sales*2562t/year

4.22 million units（34x higher than Japan）（YoY+8.4%）

The market in India has abundant
opportunities for collection for Jewelry andWaste automobile catalyst. We will startwith looking into the size of the market andthe economic trend.
*1 Created by ARE Holdings based on data from World Gold Council*2 Extracted from data from Society of Indian Automobile
Manufacturers (SIAM), actual figures for FY2023

Thailand: High Demand for Au inJewelry
宝飾関連のAu需要が旺盛なタイ
Demand for Au*342t/year（12th place in the world）

Many jewelry processors
gather in Thailand

Jewelry Export Value*4
4.5 billion $(2023 actual results)

We are in the preparation process forestablishing sales and manufacturing sitesin Thailand. In addition to Jewelry,collection for electronic scrap is in thepicture.
*3 Created by ARE Holdings based on data from World Gold Council*4 Excerpt from "Gem and Jewelry Institute of Thailand"

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15 Financial Position
Unit：billion yen

Current Assets

Trade receivables

Mar 31,

June 30,

2024

2024

Change

253.8

317.8

64.0

155.3

194.0

38.7

Remarks

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

Inventories

33.9

57.3

The majority of inventory balances and changes in inventories are linked to materials, works
in process and products that contain precious metals in the precious metals recycling
23.4
business. Risks associated with price fluctuations and quality deterioration are limited
because in principle, precious metals prices are hedged at the time of purchase.

Others

64.6

66.5

1.9

Non-current assets

64.2

66.7

2.5

Total Assets

318.0

384.5

66.5

Liabilities

191.5

254.1

62.6

Bonds and loans

141.2

202.4

Borrowings of change in Bonds and Loans.Risks associated with price fluctuations and baddebts are extremely limited because bullion for Advance Trading is procured through61.2
borrowing after receiving raw materials and precious metal prices are hedged according to therepayment date.

Others

50.4

51.7

1.4

Equity

126.5

130.4

3.9

Total equity and liabilities

318.0

384.5

66.5

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16 Sound Financial Base
Consolidated Financial Statements

Excluding North America businessUnit：billion yen

Equity Ratio

33.9 %

Unit：
billion yen

Equity Ratio

64.5 %

Current assets consist mainly of advance payments attached to North American refining
contracts, and the equity ratio excluding the North American refining business is good at64.5%.
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17 Cash Flow
Unit：billion yen
Q1 FY2025.3
Operating CF

Remarks

0.5

Changes in inventories(23.4)The majority of the change was due to precious metal-containing raw materials, work in progress, and finishedproducts in the precious metals recycling business.

Changes in trade andother receivables(48.3)Of the increase/decrease, minus 51.2 billion yen was due to the increase/decrease in receivables corresponding toborrowings from advance transactions, etc. in the North American business.

Changes in trade andother payables

Of the increase/decrease, +41.3 billion yen is the increase/decrease in borrowings due to advance transactions, etc. inthe North American business. Of the increase/decrease in borrowings, the increase/decrease in borrowings due to42.5
advance transactions, etc. in the North American business is presented as an increase/decrease in trade receivables inoperating CF, not as financing CF.

Others29.7

Investment CF

1.3

Financing CF

6.7

Changes in loans andbonds

11.1Dividends(3.4)

Others(0.3)

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

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(0.8)
7.6

18 Shareholder Return Policy••

The annual dividend for FY2024.3 was 90 yen per share, and the payout ratio was 28.2% due to the impact of the shareexchange gain.
For FY2025.3, the annual dividend is planned to be 80 yen per share, while share purchase (approx. 1 billion yen or 498
thousand shares) was implemented, and the total return ratio is expected to be 54.0％.

※1:2 stock split was implemented on April 1, 2021, and dividends per share and earnings per share until FY2021/3 are calculated based the post-split basis

Copyright © ARE Holdings, Inc. All rights reserved.

19 Progress of Capital Investment
Precious Metals Recycling Business
Expansion of Bando Plant (second phase)

To increase productivity and shorten lead time of catalyst
and electronic sector, the expansion construction of Bando
Plant has started. Centralization of processing facility andintroduction of new process will strengthen ourcompetitiveness. Expected to be completed in April, 2025.

North American Refining Business
Renewal of Silver Refining Facility(ESR)

To produce silver - Asahi Refining’s main
product―ESR(electrolysis facility) will be introduced.
The construction has been initiated and the facility will becompleted in 2026.
Unit:billion yen

FY2024.3
Results

FY2025.3
Q1 Result

FY2025.3
Plan

Capital Investment Amount

8.5

2.4

12.9

Precious Metals business

6.1

2.3

12.6

Domestic

3.3

1.4

6.6

Overseas

2.8

0.9

6.0

Others

2.4

0.0

0.3

Depreciation

3.6

0.7

3.1

"Others" includes capital investment in environmental preservation projects.
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20 The Asahi Way Updated to ARE Group Way
Group WayPurpose
Totally Committed to Protecting the Natural Environment and Preserving Resources
We conserve limited natural resources, preserve the global environment,
and contribute to the realization of a sustainable world

Goals
・ Solving planet-wide problems and enhancing corporate value
・ Achieving business growth for the benefit of all stakeholders
・ Establishing a globally trusted corporate brandValues
Care for Others

Take on Challenges

We will prioritize
We will fearlessly
safety and health as take on challenges
we respect eachand be innovative forotherthe future

Copyright © ARE Holdings, Inc. All rights reserved.

Independent Initiative Continuous Improvement
We will take actions
based on actual facts,
sites, and products
while achieving total
optimization

We will keep searching for
better technology, quality,and service

Keep Learning
We will learn andupdate ourselves forboth our own and theorganization’s growth

21I.

Financial Results for Q1 FY2025.3

II.

Appendix(April 1, 2024 ～ June 30, 2024)

Copyright © ARE Holdings, Inc. All rights reserved.

22 CO2 Emissions Reduction from Precious Metals
Recycling

FY2024.3
Effect of reducing emissions
貴金属リサイクルによる削減効果
by precious metal recycling

599,666 t-CO

FY2024.3
CO2排出量実績
CO2 Emissions
Results

20,488 t-CO

22Reduce our CO2emissions by

CO2 emissions
approximately
1/30
during precious metals manufacturing

Energy-derived CO2 Emissions Reduction Results*（Base year）
28,153 t△28％ △31％

△35％
△63％

* The figures in the graph exclude Japan Waste Co., Ltd., which became a discontinued operation.

Copyright © ARE Holdings, Inc. All rights reserved.

23 SDGs Initiatives
SDGs-related key themes
Supplying precious metals
in ways that are friendly topeople, society, and theenvironment

Expand precious
metals recycling

Effective use of limited
global resources

Reduce CO2emissions

Promoting responsible precious Reducing CO emissions from2
metals management
energy sources

Enhancement of work-lifebalance and diversity
promotion

Encourage andsupport SDG activities

Emphasizing diversity andimproving job satisfaction

Supporting employee
contribution activities tothe SDGsIndex

FY2030 Goal

FY2023 ResultPercentage of women in managerial positions toall female employees

7％5％Percentage of employees with disabilities

2.5％*1

3.6％

Annual paid leave utilization rate

70%

58.8% （80.7％*2）

Rate of men taking childcare leave and childcare
leave*3

100%

76.9%

*1 The statutory employment rate set by the Ministry of Health as of July 2024. We aim for higher employment rate than the statutory employment rate in 2030.
*2 Reference data that reflects the days of paid leave as well as the days of designated leave.
*3 Paternity leave specified by Act on Childcare Leave/Caregiver Leave••“Platinum Kurumin” granted forthe first time in 2024

What is “Platinum Kurumin”?

Certification granted forbusinesses that continuously
promote and support working
while raising children

Our employment rate for people with disabilities is higher than the statutory employment rate
A flexible work style system is created through the introduction of designated leave models on top of paid
leave

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24 SDGs Initiatives（External Evaluation）●：Selected －：Not selectedFieldESGIndex202220232024

FTSE Blossom
Japan Sector
Relative

●

●

●CDP

BA-In
preparation

Environment

SocialIn
preparation

S&P/JPX
Carbon Efficient Index●●Health & Productivity
Management Outstanding
Organizations

●

●

●MSCI
Empowering Women Index-●●KuruminPlatinum Kurumin

●

●

●

This indicates the year of selection and certification and is different from the fiscal year.

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25 Expansion of Recycled Gold Market
The Amount of Supply for Recycled Gold Hit the Highest since 2021
Changes in recycled gold supply
Unit：t• Every year since 2021, the amount ofsupply for recycled gold from January toMarch has increased.
• The amount of supply for recycled gold inJan.-Mar. 2024 reached 351t(+12% fromthe same period last year), which was themost since 378t in Jul.-Sep. 2020.

* Created by ARE Holdings based on data from World Gold Council* The figures for 2024 are our forecasts calculated by annualizing the actual figures for January to March.

Jewelry Brands Engaged in More Use of Recycled Gold for Sustainability Reasons

BVLGARIPRADAHERMESOver 99% of gold sourced byBvlgari comes from industrialrecycling, effectively reducing theenvironmental and social impacts
connected with mining operations.

100% of the gold used in Prada finejewelry is Certified Recycled Gold,
which a choice that benefits boththe environment and human rights.

100%of gold and silver used forjewellery are from recycled sources(no mining).

* Excerpt from BVLGARI's website

Copyright © ARE Holdings, Inc. All rights reserved.

* Excerpts and summaries from the"2023 Sustainability Report"* Excerpt from the HERMES’s website

26 ROE Trends** Figure excludes the gain on the stock exchange between RENATUS Co., Ltd. and Japan Waste Co., Ltd.

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