Financial ResultsforQ1 FY2022.3(April 1, 2021 ~ June 30, 2021)

July 2021
Asahi Holdings, Inc.
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 © Asahi Holdings, Inc. All rights reserved.

I.

Financial Results for Q1 FY2022.3(April 1, 2021 ~ June 30, 2021)

II.

Appendix1

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Consolidated Results[Unit: ¥ billion]

Q1 FY2021.3
Results

Q1 FY2022.3
Results

Change

39.2

50.4

11.2

Operating profit

5.3

6.9

1.7

Operating profit
ratio

13.4%

13.7%

0.3%

Profit before tax

5.3

6.8

1.5

Profit *

3.6

4.8

1.2

Depreciation

0.6

0.7

0.1

Revenue* Profit attributable to owners of parent
2

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Impact of COVID-19, etc. (YoY Comparison)■Precious Metals BusinessIn the precious metals recycling sector in Japan and Asia, the volume of collection from manufacturing-related industries
as IoT and smartphones and automobile-related industries continued to increase and the volume collected in thedentistry sector has become nearly flat.
Business field

Business Environment

Dentistry

Although medical treatment restrictions continued due to strengthening measures against COVID-19, theamount of collection has become almost flat.

Jewelry

The amount collected from purchasers dropped because of the decrease in purchase demand and theamount of collection from manufacturing-related fields showed a recovery trend.

Catalyst

Recovery of replacement demand for automobiles pushed up the amount of collection in Japan, and theamount collected in east Asia increased.

Electronics sector

The amount of collection increased, backed by strong performance in the production of IoT related, vehiclemounted devices and 5G high-end smartphones as well as sector expansion including ICT application.

North American refining

The volume product processing and sales increased while financial transactions as arbitrage decreased.

■Environmental Preservation Business
The volume of collection from educational institutions has become almost flat and the volume of collection from theautomobile industry, medical and chemical industries increased. On the other hand, the construction and food service
industries remained sluggish.
Industry

Business Environment

Educational/Research
institution

The amount of collection has become almost flat.

Construction

Still sluggish resulting in a drop in the volume of collection of wood waste, sheet glass and other materials.

Automobile

Recovery is underway, and the volume of collection of waste liquids and other materials incresaed.

Food

The impact on food manufacturers remained limited but the decline of demand in the food service industry
continued, leading to a decrease in the amount of residues and glass bottles collected.

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

ChemicalThe volume of collection of disinfectant-related products increased.
3Copyright © Asahi Holdings, Inc. All rights reserved.

Precious Metals Business◼Precious Metals Recycling Business (Japan and Asia)
Significant increase in profit thanks to the rise in precious metal prices
and ensuring the volume of precious metal collection.
◼Refining Business in North America
Decrease in profit due to the decrease in arbitrage, although the volumeof product processing and sales increased.
[Unit: ¥ billion]

Precious Metals

Q1 FY2021.3

Q1 FY2022.3

Results

Results

Revenue
Operating profit

Operating profit ratio

435.0

46.3

5.3

7.2

15.1%

15.5%

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Reference: Changes in the Volume of Precious
Metals Collected and Precious Metal Prices
Amount Collected for Precious Metal Recycling
Q1 FY2021.3[Unit: kg]

Q1 FY2022.3

Results

Results

ChangeGold

4,447

4,153(294)Palladium

1,605

1,576(29)17,14518,192

1,047

967

1,287

319

SilverPlatinum

Precious Metal Prices (per gram)
Q1 FY2021.3
Q1 Mid-term
average price[Unit: Yen]

Q1 FY2022.3
Q1 Mid-term
YoY
average priceGold

5,950

6,421

108%

Palladium

6,986

9,805

140%

58.1

95.4

164%

2,839

4,241

149%

SilverPlatinum

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Environmental Preservation Business◼ Positive impact
Securement of amount of industrial waste collected, increase of theprice of processing◼ Negative impact
Removal of INTER CENTRAL, INC. from the scope of consolidationand the increase in fixed costs associated with the commencement ofoperations of a new incinerator[Unit: ¥ billion]

EnvironmentalPreservation

Q1 FY2021.3

Q1 FY2022.3

Results

Results

Revenue

4.2

4.2

Operating profit

0.7

0.7

16.1%

16.0%

Operating profit ratio

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Financial Position[Unit: ¥ billion]

March 31,2021

June 30,
2021

Change

192.0

209.0

17.0

Trade receivables

100.8

120.8

20.0

Approx. 90% of the balance and most changes arereceivables that constitute borrowings to match metal
procurement in North American business.

Inventories

63.5

64.4

0.9

Almost all balance and increase are collected raw materials
that contain precious materials, works-in-progress andfinished products in the precious metal recycling business.
Risks associated with price fluctuations and quality
degradation remain minimal because the precious metal
content is analyzed before making a purchase and theprecious metal prices are hedged on the futures market atthe time of purchase.

Others

27.7

23.8

(3.9)

Non-current assets

52.8

52.8

(0.1)

Total Assets

244.8

261.7

16.9

Liabilities

146.9

160.0

13.1

104.8

123.2

18.4

42.1

36.7

(5.4)

Capital

97.9

101.8

3.9

Total Equity andliabilities

244.8

261.7

16.9

Current Assets

Bonds and loansOthers

7Remarks

Approx. 90% of the balance and most changes are loans formetal procurement in North American business. Risks
associated with price fluctuations and bad debts remainminimal because, in principle, loans are taken out within thescope of the precious metal content analysis conducted on
incoming raw materials and precious metal prices are hedgedon the futures market at the time of loan

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Cash Flow
[Unit: ¥ billion]

Q1 FY2022.3
Operating CF(3.2)

Increase in inventories(0.8)

All changes are attributable to changes in the collected raw materials that
contain precious materials, works-in-progress and finished products inprecious metal recycling business. Risks associated with price fluctuations
and quality degradation remain minimal because the precious metal content
is analyzed before making a purchase and the precious metal prices are hedgedon the futures market at the time of purchase.

(19.2)Of the increase, (¥22) billion are matching claims for loans for metal
procurement in North American business. Regarding loans, risks
associated with price fluctuations and bad debts remain minimal because,in principle, loans are taken out within the scope of the analysis of precious
metal content conducted on incoming raw materials and precious metal prices
are hedged on the futures market at the time of loan.

10.4

Of the increase, ¥7.8 billion yen are for loans for metal procurement inNorth American business. Changes in loans for metal procurement in North
American business are classified as Operating CF, not Financing CF. Regarding
loans, there are almost no risks associated with quality degradation andbad debts because all loans are used for metal procurement in North Americanbusiness. In addition, risks associated with price fluctuations remains
minimal because the precious metal prices are hedged on the futures market.

Increase in trade andother receivables

Increase in trade andother payables

Others

6.4

Investment CF(1.9)

Financing CF

6.3

Changes in loans andbonds

9.9

Dividends(3.5)

Others(0.1)

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

Remarks

(0.2)
0.9
8

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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 for capital
investment and M&A for future growth.
8 th Mid-term Business Plan

9 th Midterm

FY2017.3

FY2018.3

FY2019.3

FY2020.3

FY2021.3

FY2022.3(18.62)135.39114.07125.12326.90231.27

Annual dividend(yen) *30

31.5

60

65

8590

Dividend payout
ratio (%)

-23.3

52.6

52.0

26.0

38.9

Earnings per share(yen) *(Forecast)** The Company conducted a stock split with a ratio of two-for-one on April 1, 2021. Earnings per share andannual dividend until FY2021.3 are converted to the figures reflecting the stock split.

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RJC Chain of Custody Certification◼ Asahi Pretec Corp. was awarded RJC* Chain of Custody (CoC) Certification on
July 14, 2021.
◼ The Company has also achieved RJC Code of Practices (CoP) Certification on
July 29, 2019, and is the only refiner in Japan which obtained both CoP andCoC Certification.

In order to support one of the Group's priority SDG-related goals— supply precious metals in ways that are friendly to people,
society, and the environment — Asahi Pretec is striving to help
build and maintain the Asahi brand. The Company wants toensure that our brand can be trusted by customers around theworld, allowing them to procure precious metal products thathelp protect human rights and the environment.

*RJC (Responsible Jewellery Council):
RJC is an international NPO that evaluates transparency of the transaction and ethical and environmental
efforts, targeting the jewelry industry which handles gold, platinum, diamonds, etc.
10

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I.

Financial Results for Q1 FY2022.3(April 1, 2021 ~ June 30, 2021)

II. Appendix

11

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Main Revenue Elements of Precious Metals Business
Precious Metals Recycling Business:◼ Income from yield differential is added to refining fees, which is a stable source of fixedincome.
Refining Business in North America:◼ Refining fees are a stable source of income. In financial revenue, earning opportunities
increase in line with the growth in incoming raw materials.
BusinessSegment

Category

Impact on Revenue

PreciousMetals
Recycling

Refining fees◼

Refining inNorthAmerica◼

Yield differential (differential
between actual yield andcontracted yield = free metal)◼

Refining fees◼

◼

◼
Yield differential (differential
between actual yield andcontracted yield = free metal)◼

Financial revenue

◼

◼

◼
◼
◼

Refining fees increase in line with the expansion of the amountcollected.
The unit price for refining fees is higher for those that require difficult
pre-processing, which means the average unit price rises when theproportion of items that require difficult processing is higher.
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.
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 raw materials is received.
Income increases when the interest rate for advanced delivery is
improved in contracts with mines.
Income increases when the period of advanced delivery is extended.
Financial revenue increases when metal procurement costs fall, andthe interest rate spread expands.
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“Advance Trading” in North American Business•••

Provide “Advance Trading” to return products by shortening the delivery timefrom the arrival of raw materials to the return of products.
Will receive "interest for the number of days delivered in advance" from theclients 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.

FinancialInstitutions

Clients(1) Raw materials(3) Advance delivery(2) Loan(4) Finishing(5) Repayment

Development of new finance services such as
structured finance13

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Trend in Metal Prices (Au, Ag)[Unit: JPY per gram]

Au
7,500

FY2020.3

FY2021.3

FY2022.3

7,000
6,500
6,000
5,500
5,000
4,500
2019/07

2019/102020/01

2020/04

2020/07

2020/102021/01

2021/04

2021/07

Ag110

FY2020.3

FY2021.3

FY2022.3

10090
80
70
60
5040
2019/07

2019/102020/01

2020/04

2020/0714

2020/102021/01

2021/04

2021/07

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Trend in Metal Prices (Pd, Pt)
Palladium11,000[Unit: JPY per gram]

FY2020.3

FY2021.3

FY2022.3

10,000
9,000
8,000
7,000

6,000
5,000
4,000
2019/07

2019/102020/01

2020/04

2020/07

2020/102021/01

2021/04

2021/07

Platinum
4,500

FY2020.3

FY2021.3

FY2022.3

4,000

3,500

3,000

2,500

2,000
2019/07

2019/102020/01

2020/04

2020/0715

2020/102021/01

2021/04

2021/07

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