Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy
between this translated document and the Japanese original, the original shall prevail.

April 10, 2024

Consolidated Financial Results
for the Six Months Ended February 29, 2024
(Under Japanese GAAP)
Company name:
Listing:
Securities code:
URL:
Representative:
Inquiries:

Watts Co., Ltd.
Tokyo Stock Exchange2735
https://www.watts-jp.com
Fumio Hiraoka, President and CEO
Hidehito Mori,
Executive Managing Director, Head of Corporate Planning OfficeTelephone:+81-6-4792-3280
Scheduled date to file quarterly securities report:
April 10, 2024
Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:
Yes (for institutional investors)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months ended February 29, 2024 (from September 1, 2023 to
February 29, 2024)(1) Consolidated operating results (cumulative)
Sales
Six months ended(Percentages indicate year-on-year changes.)

Operating profit

Net income attributable toowners of parent

Recurring profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

February 29, 2024

30,255

2.4

743

173.4

749

176.6

436

49.2

February 28, 2023

29,550

3.7

271

-57.3

270

-60.1

292

-19.1

Note: Comprehensive income

For the six months ended February 29, 2024:
For the six months ended February 28, 2023:
Net income
per share

Six months ended¥426 million¥277 million[53.6%][-23.2%]

Diluted net income per
share
Yen

Yen

February 29, 2024

32.90

-

February 28, 2023

21.53

-

(2) Consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen%

February 29, 2024

25,71512,014

46.7

August 31, 2023

25,489

11,96446.9

Reference:

EquityAs of February 29, 2024:
As of August 31, 2023:¥11,998 million¥11,952 million

2. Cash dividends
Annual dividends per shareFirst quarter-end

Second quarter-end

Third quarter-end

Yen

Yen

Yen

Yen

Yen

-

0.00

-

15.00

15.00

-

0.00
-

15.00

15.00

Fiscal year ended
August 31, 2023
Fiscal year ending
August 31, 2024
Fiscal year ending
August 31, 2024
(Forecast)Fiscal year-end

Total

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Forecast of consolidated financial results for the year ending August 31, 2024 (from September 1, 2023 toAugust 31, 2024)(Percentages indicate year-on-year changes.)
Sales

Full year
Note:

Operating profit

Net income attributable toowners of parent

Recurring profit

Net income
per share

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

60,200

1.5

1,050

68.9

1,000

54.2

620

147.4

46.77

Revisions to the forecast of financial results most recently announced: None

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change inscope of consolidation): None
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: None(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(4) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of February 29, 2024

13,458,800 shares

As of August 31, 2023

13,898,800 shares(ii) Number of treasury shares at the end of the period
As of February 29, 2024

296,452 shares

As of August 31, 2023

431,092 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Six months ended February 29, 2024

13,255,791 shares

Six months ended February 28, 2023

13,578,154 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants oran audit corporation.
* Proper use of earnings forecasts, and other special matters
The forward-looking statements regarding future performance in this material are based on information currently
available to the Company and certain assumptions that the Company deems to be reasonable at the time this report
was prepared. Therefore, the Company does not make promises about the achievements. Actual results may differ
significantly from the forecasts due to various factors.

1. Results of Operations………………………………………………………………………………………………………… 2(1) Analysis of operating results……………………………………………………………………………………………… 2(2) Analysis of financial position…………………………………………………………………………………………….. 3(3) Future forecast information including business forecasts………………………………………………………………… 3
2. Quarterly Consolidated Financial Statements………………………………………………………………………………… 4(1) Quarterly Consolidated Balance Sheets…………………………………………………………………………………... 4(2) Consolidated Statements of Income and Statements of Comprehensive Income………………………………………… 6
Quarterly consolidated statements of income
Second quarter……………………………………………………………………………………………………... 6
Consolidated statements of comprehensive income
Second quarter……………………………………………………………………………………………………... 7(3) Quarterly Consolidated Statements of Cash Flows……………………………………………………………………….. 8(4) Notes to Consolidated Financial Statements………………………………………………………………………………. 9(Notes on going concern assumption) …………………………………………………………………………………. 9(Notes if there is a significant change in the amount of shareholders' equity) ……………………………………….….. 91

1. Results of Operations(1) Analysis of operating results
During the six months ended February 29, 2024, the Japanese economy experienced a gradual stabilization in inflation as
import prices settled compared to a certain period. However, despite expectations for higher wages, continuously negative real
wages were not reversed, and personal consumption showed no signs of a strong trend. With the timing of the U.S. interest rate
cut being pushed back, the market anticipated a delay in closing the gap between U.S. and Japanese interest rates, and the dollaryen exchange rate trended around 150 yen per dollar The "cheap Japan" was highlighted once again. While some companies
announced solid performance in the corporate sector, mainly in the export industry, severe conditions persisted in industries
where labor shortages were becoming increasingly tight.
Given this environment, in addition to the 100-Yen shop business in Japan, the Company, which operates the “Watts”, “Watts
with”, “meets.”, “silk”, etc., has been working on diversifying its revenue sources by undertaking other domestic businesses,
centering on the sale of life-style goods and discount goods as well as overseas business.
In the domestic 100-Yen Shop business, the Company is proceeding with store renovations as planned to increase the productlineup of household items, mainly in roadside large-scale shops with a wide range of food products. In addition, the Company issteadily introducing full-function self-checkout registers to streamline the purchasing process. At the same time, to further
improve customer convenience, it is expanding the Watts Online Shop's in-store pickup service, which has been available only inlimited regions, to all areas of Japan.
As for new shop openings, the Company opened 87 shops to the full-year plan of 160 shops. There were 53 shop closings(including 3 franchised shops), including certain unprofitable shops and unpredictable closing of shops where the Company’s
shops were located in. As a result, the total number of 100-Yen shops at the end of the second quarter was 1,803, which includes
1,787 directly managed shops (net increase of 37), and 16 franchised/other shops (net decrease of 3).
Of these, the number of the Watts brand shops "Watts" and "Watts with" was 1,335 (net increase of 88), accounting for morethan 74.0% of the total.
As for the number of the domestic other shops at the end of the second quarter, “Buona Vita,” a life-style goods shop offering
comfortable life, was 13 shops (net decrease of 2). “Tokino:ne”, a household items shop under the theme of “time”, operates 2
directly-managed shops (unchanged). In addition, “Tokino:ne” sells its products in the Company's 100-Yen shops.
“Value- 100,” the fresh-foods supermarket collaboration, continues with 1 shop (unchanged). "Real", a discount shop, was 6
shops (net increase of 1).
Regarding the overseas operation, the Company operates “KOMONOYA”, a fixed-price shop mainly in Southeast Asia.
“KOMONOYA” operates 20 shops in Thailand (net decrease of 5), and 7 shops in Peru (net decrease of 3). In China, there were
4 shops (unchanged) named “小物家园”(KOMONOKAEN), a fixed price shop. The total number of own-brand shops“KOMONOYA” and “小物家园”(KOMONOKAEN) was 31 (net decrease of 8).
Sales for the six months of the current fiscal year increased to 30,255 million yen (up 2.4% YoY and 101.8% to the plan),mainly thanks to strong sales in the 100-Yen Shop business, while the Company has been closing unprofitable shops.
Operating profit was 743 million yen (up 173.4% YoY, 309.8% to the plan), recurring profit was 749 million yen (up 176.6%
YoY, 394.3% to the plan), and net income attributable to owners of parent was 436 million yen (up 49.2% YoY, 363.5% to theplan). This was mainly because the gross profit margin exceeded the plan due to measures to increase the sales proportion ofhousehold items and products priced higher than 100 yen, despite the continuing high cost of procurement reflecting the external
environment. In the six months of the previous fiscal year, the Company recorded income taxes-deferred (gains) due to thereorganization among its consolidated subsidiaries. As a result, the rate of increase in net income attributable to owners of parent
was lower than other profit items. (Ratio to plan: ratio to the business forecasts for the six months ended February 2024 whichwere announced in the Summary of Financial Results on October 10, 2023.)
Since the Group operates under a single segment consisting of the operation of 100-Yen shops associated business, segment
information is omitted.

2(2) Analysis of financial position
Assets, liabilities and net assets(Assets)
As of the end of the second quarter of the current fiscal year, current assets stood at 19,412 million yen, increased by 492
million yen from the end of the previous fiscal year. This was mainly due to increases of 696 million yen for merchandiseand finished goods and 350 million yen for cash and deposits, while decreases of 233 million yen for deposits paid to otherin current assets and 168 million yen for notes and accounts receivable-trade.
Noncurrent assets stood at 6,302 million yen, decreased by 266 million yen from the end of the previous fiscal year. Thiswas mainly due to decreases of 72 million yen in deferred tax assets, 67 million yen in software included in other intangible
assets, 65 million yen in goodwill, and 58 million yen in guarantee deposits.
As a result, total assets stood at 25,715 million yen, increased by 225 million yen from the end of the previous fiscal year.
(Liabilities)
As of the end of the current second quarter of the fiscal year, current liabilities stood at 10,149 million yen, increased by
183 million yen from the end of the previous fiscal year. This was mainly due to decreases of 203 million yen in notes andaccounts payable - trade, despite increases of 251 million yen in electronically recorded obligations and 111 million yen incurrent portion of long-term loans payable.
Noncurrent liabilities stood at 3,550 million yen, a decrease of 7 million yen compared with the end of the previous fiscal
year. This was mainly due to an increase of 11 million yen in long-term loans payable, while there were decreases of 13
million yen in guarantee deposits received and 7 million yen in asset retirement obligations included in other long-term
liabilities.
As a result, total liabilities stood at 13,700 million yen, increased by 176 million yen from the end of the previous fiscal
year.
(Net assets)
As of the end of the second quarter of the current fiscal year, net assets stood at 12,014 million yen, increased by 49 million
yen compared with the end of the previous fiscal year. This was mainly due to an increase of 234 million yen in retained
earnings and a decrease of 48 million yen in treasury stock, offset by a decrease of 226 million yen in capital surplus.
As a result, shareholders’ equity ratio stood at 46.7% (46.9% at the end of the previous fiscal year).
② Cash flows
Cash and cash equivalents (hereinafter referred to as “cash”) at the end of the current second quarter of the fiscal year
amounted to 5,996 million yen, increased by 350 million yen from the previous fiscal year.
Details and breakdown of each cash flow in the second quarter are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities was 630 million yen (596 million yen was provided in the same period of theprevious fiscal year). Cash was provided mainly by income before income taxes of 666 million yen, depreciation of 286
million yen, decrease in trade receivables of 167 million yen, income taxes refund of 141 million yen, and increase inaccrued consumption taxes of 89 million yen. Cash was used mainly for an increase of 761 million yen in inventories.
(Cash flows from investing activities)
Net cash used in investing activities was 254 million yen (425 million yen was used in the same period of the previous
fiscal year). This was mainly due to purchase of property, plant, and equipment of 257 million yen, and payments for asset
retirement obligations of 41 million yen. Cash was provided mainly by proceeds from refund of leasehold and guarantee
deposits of 76 million yen.
(Cash flows from financing activities)
Net cash used for financing activities was 40 million yen (220 million yen was used in the same quarter of the previousyear). Cash was used mainly for long-term loans payable of 477 million yen and cash dividends paid of 202 million yen.
Cash was provided mainly by proceeds from long-term loans payable of 600 million yen.
(3) Future forecast information including business forecasts
There are no changes to the full-year business forecasts announced in the "Notice Concerning Revision to Business
Forecasts for the First Half and the Full-Year" on March 28, 2024.

3

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet(Thousands ofyen)Previous fiscal year
(August 31, 2023)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Raw materials and supplies
Consumption taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation and impairment loss
Buildings and structures, net
VehiclesAccumulated depreciation and impairment loss
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation and impairment loss
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

4

Current second quarter(February 29, 2024)

5,646,608
2,797,383
9,719,862
16,78547,393721,037-29,071
18,919,998

5,996,693
2,628,651
10,416,606
71,438
14,593
311,184-27,024
19,412,141

4,074,010-3,167,522
906,488
33,390-29,153
4,236
5,049,332-4,228,762
820,569
257,800
109,161-103,187
5,973
16,1392,011,208

3,850,388-2,942,016
908,372
32,952-29,554
3,397
5,124,164-4,283,238
840,926
257,800
107,536-102,725
4,811
2,015,306

406,767
442,753
849,521340,805
375,020715,825

345,682545,983
2,690,009
134,581-7,801
3,708,455
6,569,184
25,489,183

341,847
473,690
2,631,887
132,077-7,706
3,571,796
6,302,929
25,715,071

(Thousands of yen)Previous fiscal year
(August 31, 2023)
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations
Current portion of long-term loans payable
Income taxes payable
Accrued consumption taxes
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Retirement benefit liability
Provision for directors’ retirement benefits
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Stock acquisition right
Total net assets
Total liabilities and net assets

5

Current second quarter(February 29, 2024)

3,974,812
3,886,711
779,496
117,202102,700
142,008
963,362
9,966,293

3,771,490
4,138,073
890,712
166,663
160,435
148,876
873,453
10,149,706

2,104,658
456,153
31,673
681,263
284,156
3,557,905
13,524,198

2,116,432
467,755
33,817
673,494
259,0293,550,529
13,700,235

440,297
1,350,605
10,261,701-200,885
11,851,719

440,297
1,124,379
10,495,838-152,849
11,907,665

4,553

3,157

96,073
100,627
12,639
11,964,985
25,489,183

87,457
90,614
16,55512,014,835
25,715,071

(2) Consolidated Statements of Income and Statements of Comprehensive Income(Quarterly consolidated statements of income)(Second quarter)(Thousands of yen)Previous second quarter(from September 1, 2022
to February 28, 2023)
Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating revenues
Interest income
Foreign exchange gains
Royalty income
Compensation income
Subsidy income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Early-withdrawal penalty
Share of loss of entities accounted for using equity
methodExchange loss
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Impairment loss
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Net income attributable to owners of parent

6

Current second quarter(from September 1, 2023
to February 29, 2024)

29,550,968
18,381,185
11,169,783
10,897,801
271,981

30,255,932
18,626,288
11,629,643
10,886,112
743,531

2,065
2,660
26,944
1,789
6,415
39,875

3,339
15,066
1,888
13,038930
10,81245,075

5,444
9,143

4,580
23,13913,048

6,742

9,231
4,110
40,978
270,879

4,974
39,435749,171

1,810
1,810

2,001
2,001

5,546
84,19889,744
182,945
52,978-162,337-109,359
292,304
292,304

14,11470,94385,058666,114
157,548
72,413229,962
436,152
436,152

(Quarterly consolidated statements of income)(Second quarter)(Thousands of yen)Previous second quarter(from September 1, 2022
to February 28, 2023)
Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Share of other comprehensive income ofassociates accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to ownersof parent

7

Current second quarter(from September 1, 2023
to February 29, 2024)
292,304

436,152-2,161-1,396-9,369-12,713-3,365

4,097-14,896
277,407-10,012426,139

277,407426,139

(3) Quarterly Consolidated Statements of Cash Flows(Thousands of yen)Previous second quarter(from September 1, 2022
to February 28, 2023)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in liabilities relating toretirement benefits
Increase (decrease) in provision for directors’
retirement benefits
Interest and dividends income
Interest expenses
Loss (gain) on sale of investment securities
Loss on retirement of noncurrent assets
Decrease (increase) in accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payabletrade
Increase (decrease) in accrued consumption taxes
Other
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Payments for asset retirement obligations
Proceeds from sale of investment securities
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Repayment of lease obligations
Decrease (increase) in deposits paid for acquisitionof treasury stock
Cash dividends paid
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
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Current second quarter(from September 1, 2023
to February 29, 2024)

182,945
297,398
84,19865,962

666,114286,706
70,94365,962-3,329-2,142

24,276

6,868

28,26011,602

1,747

2,143

-2,1585,444-1,8105,546
455,204-309,879-3,4324,580-2,001
14,114
167,585-761,477

39,76648,430-52,495-177,317
643,758
2,170-4,974-125,162
80,860596,651

89,884-72,476
593,407
3,460-4,675-103,477
141,906
630,621-347,742-37,819-75,794-257,076-7,615-32,147

50,43676,902-26,500
11,125300-425,995-41,2356,235
300-254,637

100,000
300,000-413,459-3,675600,000-477,010-1,364-8

40,171-203,713-220,848-202,357-40,560-3,795

14,662-53,986
6,687,848
6,633,862

350,084
5,646,608
5,996,693

(4) Notes to Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.
(Notes if there is a significant change in the amount of shareholders' equity)
Not applicable.

9