Consolidated Financial Report for the Fiscal Year Ended September 30, 2021 (IFRS)

The English translation of this financial report was prepared for reference purposes only. The financial information contained in this report is delivered from our unaudited financial statements.

Consolidated Financial Report for the Fiscal Year Ended September 30, 2021 (IFRS)

			November 11, 2021
Company name: LIFULL Co., Ltd.	Listed exchange: Tokyo Stock Exchange
Stock code:	2120	URL:	https://ir.lifull.com/en/
Representative:	INOUE, Takashi	(Position) President and CEO
Contact:	FUKUZAWA, Hidekazu (Position) Managing Officer, General Manager of Group Company Business Development Department
	(TEL) [phone]

Ordinary General Shareholders Meeting (scheduled):	December 23, 2020
Commencement of dividend payments (scheduled):	-
Filing annual securities report (scheduled):	December 24, 2020
Preparation of supporting documentation for earnings: Yes	Earnings presentations: Yes (For institutional investors and analysts)
	(Millions of yen; amounts have been rounded down to the nearest million yen)

1. Consolidated Financial Results for Fiscal 2021 (October 1, 2020 to September 30, 2021)

1. Consolidated Operating Results

(Percentages indicate YoY change)

					Operating			Profit before			Profit attributable	Total
	Revenue					Net profit	to owners of the	comprehensive
			income				income taxes
										parent			income
	million yen		%	million yen		%			million yen	%	million yen	%	million yen		%	million yen		%
Fiscal 2021	35,857		1.3	(6,644)		-			(6,857)	-	(5,895)	-	(5,901)		-	(4,490)		-
Fiscal 2020	35,402		(9.9)	2,485		(40.6)			2,136	(41.1)	1,167	(50.5)	1,162		(51.7)	2,530		-
	Basic earnings		Diluted net income	Return on equity	Return on assets		Operating income
	per share		per share				margin
				yen					yen			%				%				%
Fiscal 2021			(44.78)				(44.78)			(19.1)		(13.5)				(18.7)
Fiscal 2020			8.71						8.71			3.5		4.3				7.0

(Reference)	Equity in Income from Investments in Affiliates	FY 2021/9: -128 million yen	FY 2020/9: -249 million yen
(Note 1)	As provisional accounting methods for corporate mergers have been determined during FY 2021/9, the same provisional accounting methods have
	been applied for values in FY 2020/9.
(Note 2)	Diluted quarterly earnings per share for FY 2020/9 and FY 2021/9 are equal to basic quarterly earnings per share due to the absence of potential
	shares.

(2) Consolidated Financial Position

				Equity attributable to	Equity attributable to	Equity attributable to
		Total assets	Total equity	the owners of the	the owners of the	owners of the parent
				parent	parent ratio	per share
		million yen	million yen	million yen	%	yen
As of September 30, 2021	45,887	28,538	28,413	61.9	215.61
As of September 30, 2020	55,560	33,639	33,487	60.3	254.12
(Note)	As provisional accounting methods for corporate mergers have been determined during FY 2021/9, the same provisional accounting methods have
	been applied for values in FY 2020/9.

(3) Consolidated Cash Flows

	Total assets	Total equity	Equity attributable to	Equity attributable to owners
	owners of the parent	of the parent ratio (%)
	million yen	million yen	million yen	%
Fiscal 2021	1,287	(1,068)	(3,291)	13,145
Fiscal 2020	4,884	(1,730)	3,391	15,962

2. Dividends

		Annual dividend			Total	Payout ratio	Dividend on
	First	Second	Third		Fiscal		equity ratio
		Total	Dividends	(consolidated)
	quarter-end	quarter-end	quarter-end		year-end	(consolidated)
	yen	yen	yen		yen	yen	million yen	%	%
Fiscal 2020	-	0.00	-		5.29	5.29	697	60.8	2.1
Fiscal 2021	-	0.00	-		-	-	-	-	-
Fiscal 2022 (Forecast)	-	-	-		-	-		-

Note 1: Cash dividends per share have been calculated at a payout ratio of 25% and rounded up at the third decimal point.

Note 2: Dividends per share are calculated according to the total number of issued shares at the end of the financial period

Note 3: Dividends for FY 2021/9 will be decided at the Board of Directors Meeting to be held on Nov. 17, 2021.

Note 4: Dividends for FY 2022/9 are expected to be calculated based on a payout ratio of 25%.

3. Forecasts on the Consolidated Results for Fiscal 2022 (October 1, 2021 to September 30, 2022)

(Percentages indicate YoY change for the entire year)

	Revenue		Operating income		Profit attributable to owners of the parent	Basic earnings per share
	million yen		(%)	million yen		(%)	million yen	(%)	yen
Fiscal Year 2022	39,000		8.8	1,700		-	700	-	5.31

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* Notes

1. There have been no changes in material subsidiaries during the term.
2. Changes in accounting policies and changes or restatement of accounting estimates

[1] Changes in accounting policies required by IFRS	: No
[2] Changes in accounting policies other than [1]	: No
[3] Changes in accounting estimates	: No

(Note) For details, refer to "Condensed Consolidated Financial Statements and Significant Notes (5) Notes on the Consolidated Financial Statements" on Page 14.

1. Number of shares issued (common stock)

1. Number of shares issued at the end of the period (including treasury stock)
2. Treasury shares at the end of the period
3. Average shares during the period

As of September 30,	134,239,870	As of September 30,	134,239,870
2021		2020
As of September 30,	2,458,256	As of September 30,	2,458,256
2021		2020
Fiscal 2021	131,781,614	Fiscal 2020	133,534,160

This consolidated financial report is not subject to audit.

Regarding appropriate use of result forecasts and other notes

• Result forecasts and other statements about the future found in this document are based on information available to the Company and assumptions deemed reasonable at the current time. Actual results and outcomes may vary significantly due to various factors. For more information on the terms related to the assumptions used for result forecasts and notes on the use of result forecasts and other information, please refer to page 8 "(4) Outlook" of the supplemental documentation.
• The Company has scheduled an online earnings presentation for institutional investors and analysts at the following date. Materials, recordings and records of the question and answer session will be made available on the Company's website in a timely fashion.
• November 12, 2021 (Thursday): Online earnings presentation for institutional investors and analysts
• In addition, the Company holds briefings as appropriate for individual investors. Please refer to the LIFULL IR website (https://ir.LIFULL.com/en/) for more details.

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(Appendix)

Contents

1.	Overview of Operating Results ...................................................................................................................................	4
	(1)	Overview of Operating Results for the Fiscal Year Ended September 30, 2021.................................	4
	(2)	Overview of Financial Position for the Fiscal 2020 Analysis of financial position ............................	6
	(3)	Overview of Cash Flows for Fiscal 2021...........................................................................................................	6
	(4)	Outlook .......................................................................................................................................................................	7
2.	Basic Approach to the Selection of an Accounting Standard...........................................................................	7
3.	Condensed Consolidated Financial Statements and Significant Notes.........................................................	8
	(1)	Condensed Consolidated Statements of Financial Position .....................................................................	8
	(2)	Condensed Consolidated Statements of Profit or Loss and Condensed
		Consolidated Statements of Comprehensive Income ................................................................................	10
	(3)	Condensed Consolidated Statements of Changes in Equity ...................................................................	12
	(4)	Condensed Consolidated Statements of Cash Flows.................................................................................	13
	(5)	Notes on the Consolidated Financial Statements.......................................................................................	15

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1. Overview of Operating Results

(1) Overview of Operating Results for the Fiscal Year Ended September 30, 2021

During the current fiscal year, the economy of Japan was dramatically affected by subsequent waves of COVID-19 infections. As a result of the pandemic, the Japanese government announced a number of measures against the spread of the virus including states of emergency and stay-home orders in local areas urging people to limit time outside their homes. The number of new infections reached a peak of 25,000 during August, but this number began to significantly decrease in September. Currently, the expectations for the recovery of economic activities are high, but the situation still remains unstable.

Looking at the real estate and construction industry where the majority of our clients are active, the number of new-build properties increased slightly to 843,799 (+1.5% YoY) despite increased costs for lumber. At the same time, the spread of COVID-19 has led to increased focus on living environments due to stay- home orders and more people working from home. The Japanese government is also providing long-term support for home buyers through its "Green Home Point System" and extending tax-free periods for home loans. As a result, new-build condominiums listed for sale in the Greater Tokyo Area increased to 32,990 (+28.8%), and 39,864 (+14.6%) re-sale condominiums were sold - a return to pre-COVID levels of 2019. However, the demand has caused inventory to dwindle. ("Building Start Statistics Survey Report" Ministry of Land, Infrastructure, Transport and Tourism, "Monthly Market Watch" Real Estate Information Network for East Japan.)

In regard to the Japanese advertising industry (Jan. - Dec. 2020,) the real estate and housing segment for newspapers, magazines, radio and television media advertising shrank 13.0%. However, our primary segment of online advertising continued to grow for the seventh year straight to ¥2.2 trillion. It is predicted that the online shift of mass media will continue to accelerate in the future ("2020 Advertising Expenditures in Japan" Dentsu.)

Outside of Japan, the spread of COVID-19 continues to have serious effects on economies all over the world. In light of the current situation, we have recommended that all employees work from home and hold meetings online to stop the spread of COVID-19 and protect our employees and other stakeholders. We have not experienced any major issues from these measures.

During the previous fiscal year in Japan, we postponed our investment plans due to the pandemic and focused our efforts on sustainable business practices. During the current fiscal year, though, stay-home restrictions have been easing as the situation begins to recover. Therefore, we have restarted and strengthened growth investments while monitoring the situation for efficient spending.

On the other hand, other countries have each taken their own steps against the pandemic. Therefore, we have placed our priority on maintaining the status quo and have been making balanced investments toward strengthening our competitive advantages.

Regarding the amount of goodwill for LIFULL CONNECT, due to the high level of uncertainty for the mid- term business plan directly after acquisition, we based our assessment of the recoverable value of the business on the widely utilized valuation methods fair value less costs to sell (FVLCTS) and value in use (VIU). Comparing the two values, we took the higher and compared it with the book value to make impairment assessments. However, with the passage of time since the acquisition of the subsidiaries included in LIFULL CONNECT, we determined that the prospects of the mid-term strategy have improved. Therefore, we calculate the valuation of LIFULL CONNECT solely based on its ability to generate future cash flows (VIU) and have, thus, posted an impairment loss of goodwill amounting to ¥9.7 billion.

As a result, the LIFULL Group's consolidated financial results for the fiscal year ended September 30, 2021 were as follows: Revenue amounted to ¥35,857,177 thousand (+1.3% YoY); net loss before taxes to ¥6,857,347 thousand (profit before taxes amounted to ¥2,136,175 thousand in the previous fiscal year); net loss for the period to ¥5,895,682 thousand (net profit for the period amounted to ¥1,167,357 thousand in the previous fiscal year) and net loss attributable to owners of the parent to ¥5,901,120 thousand (profit attributable to owners of the parent amounted to ¥1,162,588 thousand in the previous fiscal year).

Revenue and profit / loss by segment was as follows:

(Thousands of yen; percentages indicate year-over-year change)

Segment	Revenue		Segment profit and loss
Amount		Change %	Amount	Change %
(1) HOME'S Services	26,715,113		(1.7)	2,364,272	(39.3)
(2) Overseas	7,263,807		10.5	1,577,535	+95.3
(3) Other Businesses	2,191,881		13.7	(679,033)	Note 2

Note 1: Intersegment transactions have not been eliminated.

Note 2: Segment loss in the previous term was ¥396,933 thousand.

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1. HOME'S Services Business

In the HOME'S Services segment, the Group's core business, the Group provides services for both users and realtors in order to create a world where LIFULL HOME'S is an indispensable service.

During the current fiscal year, we made progress towards encompassing all properties in Japan, strengthening brand awareness and boosting our media presence. In addition to releasing new features such as "nice-to-have" search conditions to help users find the right place to live, we also made it easier for users to send inquiries via SNS platforms. Our investments in promotion have also improved brand recognition, and LIFULL HOME'S Sumai No Madoguchi, our impartial support service to help users find the right place to live, expanded into new regions. In addition to these initiatives, the demand for more comfortable living environments due to the extension of stay-home orders and the spread of remote work, users to and inquiries via LIFULL HOME'S have increased.

However, we also experienced a number of challenges including increased demand placing stress on the new-build market causing inventory to sharply decline in addition to a drop in listings due to changes in our pricing scheme implemented in October 2019. The Tokyo Olympic Games also resulted in a temporary decline in the number of real estate-related searches. As a result, segment revenue for the second half of the year (April to September) increased 1.9% YoY. Although this trend is continuing, we are still on the road to recovery to pre-COVID levels.

As a result, the HOME'S Services segment ended the year with sales revenue totaling ¥26,715,113 thousand (-1.7% YoY) and segment profit totaling ¥2,364,272 thousand (-39.3% YoY.)

(2) Overseas

The Overseas segment primarily consists of the aggregation websites for real estate, used cars and job listings: Trovit and Mitula.

During the current fiscal year, we have been strengthening the global competitiveness of our online services in over 60 different countries. Our user shares in various regions continue to increase along with the value of our advertising services, and we have been making progress toward the quality of each of our services.

However, the effects of the pandemic as well as travel and lockdown restrictions remain in place in many countries and regions. Even in our focus sector, real estate, many clients continue to restrict their advertising volumes. Therefore, we are maintaining a balance between investments toward our competitive advantage and the sustainability of our businesses with a significant improvement to profitability.

As a result, sales revenue for the Overseas segment amounted to ¥7,263,807 thousand (+10.5% YoY) and segment profit to ¥1,577,535 thousand (+95.3% YoY) for the current fiscal year.

(3) Other Businesses

The Other Businesses segment comprises LIFULL Kaigo (nursing care), a search website for nursing facilities for the elderly; LIFULL Trunkroom, a search website for rental storage facilities; LIFULL Hikkoshi (moving house), a website devoted to providing estimates and online reservations for moving companies; and Regional Revitalization as well as the Regional Revitalization Fund.

During the current fiscal year, we increased investments in Regional Revitalization activities and revised our business plans for renovating and reselling previously abandoned properties while creating new organizational divisions to implement these changes.

As a result, the sales revenue for the Other Businesses segment amounted to ¥2,191,881 thousand (+13.7% YoY) and segment loss to ¥679,033 thousand (a ¥282,100 thousand loss compared to the total loss of ¥396,933 thousand in the previous fiscal year.)

For further details on financial results, including the following items, please refer to LIFULL'S IR website, specifically the "Earnings Presentation for the Fiscal Year Ended September 30, 2021", announced on November 11, 2021.

URL:https://ir.lifull.com/en/ir/ir-data/

Condensed statements of profit and loss:	Condensed statements of profit and loss (IFRS)
Sales revenue by segment:	Sales revenue by segment (IFRS)
Progress toward financial result forecasts:	Condensed statements of profit and loss and sales by segment
Business strategies:	Main activities by segment
Quarterly data:	Condensed statements of profit and loss and segment income
	and loss
Collection of external statistical data:	Number of condominiums for sale, condominium sales prices,
	number of new housing starts, number of people moving
	between prefectures and population
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