Hikari Tsushin, Inc.TSE: 9435

Financial results briefing material for the 1st quarter of the term ending March 2025

· Issued by Hikari Tsushin, Inc.

Financial Results

For the three months ended June 30, 2024

August 13, 2024

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

Quarterly Growth Rate for 5 Fiscal Years (1)

At an Average growth rate for 5 fiscal years, recurring operating profit of In-house products grows about 10%, net income grows 21%, and comprehensive income grows 30%.

(Billion JPY)

Revenue

Recurring

Operating profit

Operating profit

Income

Net

Compre

In-house

Third-

In-house

Third-

In-house

Third-

Before

income

hensive

tax

Income

Total

party

Total

party

Total

party

products

products

products

products

products

products

20/3

Q1

125.3

79.1

46.5

27.0

20.6

6.3

24.6

14.9

8.1

25.0

15.4

18.4

Q2

134.3

86.3

48.6

27.6

21.3

6.3

20.2

13.0

8.0

21.8

15.5

21.7

Q3

129.1

84.2

45.6

28.3

22.0

6.3

17.5

11.2

7.0

19.9

13.2

43.0

Q4

135.6

87.8

48.5

30.3

23.9

6.3

10.5

6.6

5.2

13.2

7.4

(39.1)

21/3

Q1

129.2

90.0

39.7

32.5

26.2

6.2

22.4

16.7

6.1

24.4

13.6

29.9

Q2

136.6

97.0

39.8

32.5

26.1

6.3

25.1

18.6

6.9

25.6

16.3

28.8

Q3

139.1

99.3

40.0

31.7

25.4

6.3

18.3

14.1

4.9

23.0

13.6

26.8

Q4

154.3

112.3

42.1

11.5

5.4

6.0

3.3

-2.1

6.1

9.0

11.0

44.7

22/3

Q1

133.4

97.1

36.9

33.1

27.1

6.0

24.3

19.4

5.4

30.2

20.6

31.6

Q2

137.9

101.8

36.4

33.6

27.4

6.1

24.6

20.1

5.3

30.6

19.5

32.1

Q3

142.4

107.9

34.9

32.2

26.0

6.2

19.2

14.8

4.9

24.7

18.6

16.8

Q4

159.2

120.5

39.1

27.9

21.6

6.3

15.2

10.5

5.5

22.9

28.6

33.4

23/3

Q1

143.4

112.2

31.7

30.3

24.5

5.8

18.2

15.0

4.0

40.5

27.6

22.6

Q2

166.5

136.3

30.9

21.9

16.1

5.7

27.8

5.4

23.2

41.6

32.2

51.1

Q3

160.5

133.7

27.2

33.0

29.0

4.0

20.0

17.4

3.3

12.1

6.7

15.6

Q4

173.4

141.6

32.0

41.7

37.5

4.1

20.3

17.1

3.9

24.0

24.7

44.6

24/3

Q1

140.1

114.2

26.5

38.4

34.7

3.7

23.9

21.3

3.5

47.5

32.7

71.2

Q2

156.3

130.2

26.8

39.1

35.5

3.6

24.5

21.8

3.6

39.6

29.0

51.2

Q3

150.2

124.1

26.8

35.8

32.5

3.3

26.0

24.2

2.8

20.7

12.0

27.6

Q4

155.2

127.2

28.7

37.5

34.7

2.8

20.0

20.3

1.3

60.0

48.3

115.7

25/3

Q1

146.1

120.1

26.0

38.5

34.9

3.6

27.2

24.3

4.1

65.7

45.8

74.2

Average

growth rate for

3%

8%

(11%)

7%

11%

(10%)

2%

10%

(12%)

21%

24%

32%

5 fiscal years

©2024 HIKARI TSUSHIN,INC. All Rights Reserved * The total does not match the breakdown because intercompany eliminations and others are omitted from the presentation.

1

Quarterly Growth Rate for 5 Fiscal Years (2)

Average growth rate for 5 fiscal years, all main indicators of the balance sheet above 20% and EPS at 25%.

(Billion JPY)

BS

Per Share

Shareholder Return

Capital Efficiency

Net Asset

Acquisition

Dividend

Hypothetical

Hypothetical

Net Cash

before

EPS

BPS

Dividends

of the

Asset

Net Asset

Equity

payment

consolidated

consolidated

Asset

shareholder

(Yen)

(Yen)

(Yen)

Company's

return

own share

amount

ROA

ROE

20/3

Q1

146.0

815.3

287.7

321.3

271.3

¥337

¥5,913

¥96

0.0

4.4

-

-

Q2

190.3

916.5

324.6

362.8

291.3

¥339

¥6,350

¥99

0.0

4.5

-

-

Q3

263.7

1,000.4

362.7

405.5

329.7

¥288

¥7,187

¥102

0.0

4.6

-

-

Q4

195.2

972.0

318.5

366.2

285.7

¥162

¥6,228

¥105

0.0

4.8

-

-

21/3

Q1

224.3

972.5

343.1

395.7

308.6

¥297

¥6,727

¥105

0.0

4.8

-

-

Q2

259.6

1,053.7

367.0

424.9

332.4

¥355

¥7,245

¥117

0.0

5.3

-

-

Q3

287.4

1,109.5

388.6

451.9

353.9

¥298

¥7,715

¥117

0.0

5.3

-

-

Q4

321.4

1,256.8

429.0

497.6

393.4

¥240

¥8,575

¥117

0.0

5.3

-

-

22/3

Q1

334.7

1,305.9

447.1

531.0

411.4

¥452

¥9,057

¥119

9.8

5.4

-

-

Q2

374.0

1,312.5

468.2

557.7

435.8

¥431

¥9,594

¥121

0.0

5.4

-

-

Q3

355.2

1,384.2

475.5

574.2

443.7

¥410

¥9,811

¥124

3.5

5.6

-

-

Q4

343.6

1,451.3

499.3

605.0

468.6

¥610

¥10,380

¥127

1.3

5.7

-

-

23/3

Q1

350.0

1,473.3

509.9

626.4

480.6

¥615

¥10,725

¥131

5.0

5.8

-

-

Q2

389.5

1,605.9

554.5

677.1

525.4

¥718

¥11,725

¥135

0.0

6.0

-

-

Q3

393.0

1,621.1

562.2

691.0

534.6

¥182

¥11,931

¥138

0.0

6.1

10.9%

23%

Q4

440.2

1,691.9

598.3

735.5

571.0

¥541

¥12,773

¥141

2.0

6.3

10.6%

21%

24/3

Q1

518.4

1,773.8

651.2

798.1

622.9

¥733

¥13,986

¥143

3.3

6.3

10.5%

22%

Q2

582.4

1,823.0

690.8

848.8

662.4

¥653

¥14,940

¥145

4.6

6.4

9.7%

22%

Q3

602.7

1,896.5

709.2

876.9

682.7

¥273

¥15,444

¥147

3.2

6.4

9.7%

22%

Q4

773.9

2,078.9

819.2

997.7

790.4

¥1,108

¥17,907

¥203

1.7

8.9

8.9%

22%

25/3

Q1

837.5

2,173.4

883.8

1,069.1

857.1

¥1,040

¥19,415

¥156

0.0

6.8

9.1%

22%

Average growth

rate for 5 fiscal

41%

21%

25%

27%

25%

25%

26%

10%

-

9%

-

-

years

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

* Net assets before shareholder return means net assets if there had been no "shareholder funding" and "shareholder

2

return" since the company was established.

Performance

(Billion JPY)

25/3 Q1

Results

YoY

Main factors

Revenue

Record

146.1

+4%

Increase in the number of existing

- high

customers in electricity

Recurring

Increased profit due to increase in the number of

Record

38.5

+0%

existing customers

Operating Profit

Decreased profit due to revision of electricity

- high

pricing

Operating Profit

Record

27.2

+13%

Improve productivity in electricity and

- high

beverage business

21.0 Billion yen in Foreign exchange gains （+4.4

Income before Tax

Record

65.7

+38%

billion yen YoY）

- high

Dividend income and Interest income16.5 billion

yen（+6.6billion yen）

Net Income

Record

45.8

+40%

-

(attribute to owners of parent)

- high

Comprehensive Income

Record

74.2

＋3％

-

(attribute to owners of parent)

- high

(Reference)

25.8

+7%

Gain on transfer of business : 1.3 billion yen

Operating profit excluding one-

(mainly from Commission-based Sales)

time gains and losses

25/3

Forecast

Progress

Rate

620.0

23%

162.0

23%

100.0

27%

138.0

47%

90.0

45%

-

-

100.0

25%

* One-time gains and losses mainly indicate gains and losses on acquisition of or loss of control of subsidiaries, gains and losses on business

3

transfers, gains and losses on sale of fixed assets and impairment losses.

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

Change in reporting segments

Before Change

Segments

Categories

1

Corporate

In-house

Service

products

Individual

In-house

2

Customer

products

Service

3

Commission-

Third-party

based Sales

products

After Change

*This classification differs from that on page 10 of our

financial results presentation dated May 15, 2024.

Segment

Key Businesses

Categories

1

Electricity and

Power Producer and Supplier

In-house

Gas

(PPS), LP Gas

products

2

Telecommunica

Internet Communication Line

In-house

tions

Services, Ancillary Services

products

3

Beverage

Water Delivery, Beer Server

In-house

products

Property and Casualty

In-house

4

Insurance

Insurance, Life Insurance

products

and Warranty Services

5

Financial

Microfinance

In-house

Services

products

6

Solution

EPARK, Payment Processing

In-house

products

Commission-

Commission-Based Sales of

Third-party

7

Mobile Phones and Office

Based Sales

products

Automation Equipment

The reportable segments were changed by reviewing the business management classification to

represent the actual activities of the business operations appropriately.

4

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

Gain and Loss by Businesses

  1. Due to increase in the number of existing customers
  2. Impact due to off-balance sheet business activities
  3. Decrease due to price revision
  4. Decline in demand for telecommunication lines
  5. EPARK business restructuring is progressing smoothly
  • Revenue

(Billion JPY)

24/3

25/3

YoY

Q1

Q1

Revenue

140.1

146.1

+4%

Electricity &

43.1

a

51.2

+18%

Gas

Telecommuni

30.5

29.7

(2%)

cations

Beverage

20.1

b

18.3

(9%)

Insurance

5.1

a

6.2

21%

Finance

7.6

7.5

(0%)

Solution

7.1

7.0

(1%)

Commission-

26.4

26.0

(1%)

based Sales

  • Recurring Operating Profit

(Billion JPY)

24/3

25/3

YoY

Q1

Q1

Recurring

Operating

38.4

38.5

+0%

Profit

Electricity &

13.4

a,c

12.9

(3%)

Gas

Telecommuni

10.8

d

9.7

(9%)

cations

Beverage

7.0

7.2

+3%

Insurance

2.6

3.0

+18%

Finance

0

0

-

Solution

0.7

e

1.9

+147%

Commission-

3.6

3.4

(4%)

based Sales

5

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

Gain and Loss by Businesses

  • Acquisition Cost
  1. Due to easing competition, 8% increase in the Customer Acquisition.
  2. Strong sales of ancillary services .
  3. Impact due to off-balance sheet business activities
  4. Steady increase in customer acquisition.
  5. Business is favorable, especially in Malaysia.
    • Operating Profit

(Billion JPY)

24/3

25/3

YoY

Q1

Q1

Acquisition

(14.4)

(11.3)

(21%)

Cost

Electricity &

(6.3)

a

(5.7)

(9%)

Gas

Telecommunic

(2.8)

b

(3.4)

+21%

ations

Beverage

(5.7)

c

(4.9)

(14%)

Insurance

(1.3)

d

(1.0)

(20%)

Finance

3.5

e

4.7

+33%

Solution

(0.2)

(0.6)

+142%

Commission-

(0.3)

(0.3)

(9%)

based Sales

One-time gains

0

1.3

-

and losses

(Billion JPY)

24/3

25/3

YoY

Q1

Q1

Operating

23.9

27.2

(13%)

Profit

Electricity &

7.1

7.2

+0%

Gas

Telecommunic

7.9

6.3

(20%)

ations

Beverage

1.2

2.3

+85%

Insurance

1.2

2.0

+60%

Finance

3.5

4.7

+33%

Solution

0.5

1.3

+150%

Commission-

3.2

3.1

(4%)

based Sales

One-time gains

0

1.3

-

and losses

* Since this material lists the one-time gains and losses of each business segment together, the figures of each segment may differ from the financial statements.

6

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

Income before Tax

Increased income mainly due to higher dividend income and interest income.

(Billion JPY)

20/3

21/3

22/3

23/3

24/3

Income before tax

80.0

821

108.5

118.4

168.0

Operating Profit

73.0

69.2

83.5

86.6

94.5

Dividend income and

7.1

8.1

11.1

18.0

30.5

Interest income

Foreign exchange gains

(0.9)

6.0

15.8

12.0

39.5

(losses), etc.

Foreign exchange

(0.9)

1.5

10.4

5.7

28.0

gains (losses)

Gains (losses) from

0.0

0.0

5.4

4.9

6.8

Negative Goodwill, etc.

Gains (losses) on sale

0.0

4.5

0.0

1.2

4.6

of affiliated companies

Others

0.8

(1.2)

(2.0)

1.7

3.2

24/3

25/3

YoY

Q1

Q1

47.5

65.7

+38%

23.9

27.2

+13%

9.9

16.5

+66%

17.6

21.0

+19%

16.6

21.0

+26%

0.6

0.0

(100%)

0.3

0.0

(100%)

(3.9)

1.0

-

* The USD/JPY exchange rate stood at 151.4 yen per dollar at the end of March 2024 and 161.1 yen per dollar at the end of June 2024. Assuming the rate is 145 yen per dollar at the end of September, foreign exchange gains and losses for the first half of FY March 2025 are expected to be negative 17 billion yen.

7

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

Cash Flows

17.1 billion yen in business, 16.8 billion yen in Dividend income and Interest income.

(Billion JPY)

24/3

25/3

20/3

21/3

22/3

23/3

24/3

YoY

Q1

Q1

Business CFs

98.7

73.2

74.3

82.4

124.3

39.0

17.1

(56%)

EBITDA

89.0

85.6

100.2

102.8

109.0

27.6

30.7

+11%

Operating Profit

73.0

69.2

83.5

86.6

94.5

23.9

27.2

+13%

Depreciation and

16.0

16.4

16.7

16.2

14.5

3.7

3.5

(5%)

Amortization

Changes in Receivables

9.7

(12.5)

(25.9)

(20.4)

15.3

11.3

(13.5)

-

and Payables

Dividend income, Interest

9.1

10.6

14.2

20.9

33.8

12.8

16.8

+31%

income

Shareholder Return

(17.8)

(20.3)

(36.6)

(30.8)

(38.9)

(9.7)

(8.4)

(13%)

Listed stock and bond

(59.6)

(84.7)

(88.2)

(87.5)

(81.7)

(14.3)

(51.1)

+256%

investments

Financing

59.4

115.6

99.1

102.2

102.7

41.6

42.3

+1%

Others (tax and interest

(3.5)

(43.1)

(57.6)

(42.4)

(49.4)

(32.1)

(26.6)

(17%)

expense)

8

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

Fluctuation of Equity Attribute to Owners of Parent

An increase of 66.6 billion yen in equity during Q1 25/3.

(Billion JPY)

20/3

21/3

22/3

23/3

24/3

24/3

25/3

YoY

Q1

Q1

Equity attributable to owners

285.7

393.4

468.6

571.0

790.4

622.9

857.1

+37%

of parent

Balance at the End of

257.2

285.7

393.4

468.6

571.0

571.0

790.4

+38%

the Previous Period

Fluctuation for the

+28.4

+107.6

+75.2

+102.3

+219.4

+51.9

+66.6

+28%

period

Net income

attributable to owners

+51.6

+54.6

+87.5

+91.3

+122.2

+32.7

+45.8

+40%

of parent

Gains (losses) on

+27.1

+10.8

+13.9

+16.2

+49.9

+6.3

+5.0

(20%)

sales of securities

Comprehensive

(34.5)

+64.9

+11.9

+25.8

+88.7

+30.5

+17.8

(41%)

Income fluctuation

Shareholder Return

(17.8)

(20.3)

(36.6)

(30.9)

(38.6)

(9.6)

(8.9)

(7%)

Others

+2.0

(2.3

(1.5)

(0.1)

(2.8)

(7.9)

+6.8

-

(assets fluctuation etc.)

9

©2024 HIKARI TSUSHIN,INC. All Rights Reserved

Company analysis