BEENOS : FAQ on Financial Results for 2Q FY2024

This is a translation of the original Japanese release. The Japanese text shall prevail in case of any variance between this version and the Japanese text.

FAQ on Financial Results for 2Q FY2024

This Q&A compilation gathers frequently asked questions, received from shareholders and investors following the earnings presentation held on Wednesday, May 8. These questions, chosen for their frequency and insight, are responded to in order to provide a clearer understanding of the Company's operations and strategies. We will continue to update with important questions from the inquiries we receive in the future.

Q1. Why was ROE set at 10%?

The Company achieved an ROE of 10% in the previous fiscal year, though it had fallen below 10% in earlier fiscal years. Considering the Ito Report compiled by the Ministry of Economy, Trade and Industry, which sets an ROE target of 8%, we have established an ROE of 10% as the minimum target to be achieved. We will internally discuss the ROE target for the medium term and consider disclosing it in the future.

Q2. You mentioned that more than 1 billion yen of the medium-term target operating income of 5

billion yen will come from the accumulation of operating income through M&A. Are you planning to acquire a company that generates operating income of 1 billion yen or more?

Rather than acquiring a company that already generates a profit of 1 billion yen, our strategy involves acquiring a company with the potential to reach that level and nurturing it into a business with a profit of 1 billion yen. We aim to actively pursue M&A opportunities in areas related to the Global Commerce Business or the Entertainment Business. These acquisitions should lead to an expansion in one or more of the following areas: the products we handle, the strengthening of logistics and operations and an increase in our customer base.

Q3. When will the Entertainment Business Groobee business contribute to profits?

The Groobee business exhibits significant distribution volatility depending on whether featured artists hold an event, making it challenging to achieve consistent profitability. However, we are starting to see stable profit generation in terms of the GMV. By further expanding our GMV, we believe we can aim for sustained profitability in the next fiscal year.

Q4. Is it possible to record profit and loss of incubation (investment business) as non-operating profit and loss?

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In pursuit of stable growth in consolidated operating income, we have previously studied this possibility. However, considering accounting standards and other factors, consultations with our auditors have revealed that this would be difficult to achieve. The business has not made any new net investments recently and we intend to gradually reduce the scale of our existing investments by selling them at appropriate times in the future. Consequently, we expect the impact on consolidated operating income to diminish in the medium to long term.

Q5. How much will the expenses related to the office relocation be for this fiscal year and next fiscal year?

We expect office relocation expenses to increase by several tens of millions of yen this fiscal year, and this has been factored into our earnings forecast. This increase is due to the extended construction period and the earlier-than-expected start of rent accrual at the new location. The actual relocation will occur in the next fiscal year, and we anticipate one-time costs related to the relocation to be slightly less than 100 million yen. These costs include the expense of the move and the payment of double rent until the restoration work is completed. However, please note that the details of each cost are still being finalized and may be subject to change.

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