Declining Demand and Business Disruptions Caused by COVID-19

「During the interim consolidated accounting period, Japan's economy was on a moderate recovery trend as normalization progressed, employment and income conditions improved, and inbound and services demand increased.」

「During the third quarter of the fiscal year, the Japanese economy showed signs of a moderate recovery, including a recovery in personal consumption reflecting the normalization of economic and social activity.」

「During the second quarter of the fiscal year, economic activity in Japan showed signs of a gradual recovery, due to the easing of restrictions on activities following the slowdown in the spread of COVID-19 and the lowering of its legal classification to Class 5, among other factors.」

「During the first quarter of the fiscal year, the Japanese economy gradually moved toward normalization of social and economic activity, partly due to the reclassification of COVID-19 as a Class 5 infectious disease, and the economy was recovering moderately.」

「When infectious diseases, including COVID-19, occur and spread, our group will place the safety of customers, business partners and employees first, conduct production and sales activities while paying close attention to the impact of the spread of infection, and work to minimize the impact.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「By thoroughly implementing measures to prevent COVID-19 infections, we were able to secure event orders steadily, and continued to receive orders for COVID-19-related businesses.」

「During the first quarter of the fiscal year, the Japanese economy showed some signs of recovery as strict restrictions were eased, including through the wider rollout of vaccinations against COVID-19 and the lifting of priority preventive measures, but economic activity remained stagnant due to factors including the risk of a renewed spread of infections caused by new variants.」

「When infectious diseases, including COVID-19, occur and spread, the Group places the safety of customers, business partners and employees first and works to maintain production and sales activities while paying close attention to the impact of the spread of infection and seeking to minimise its effects. However, if infections occur in regions where the Group operates or at its sales offices or factories and impede the continuation of operations, the Group's operating performance and financial condition may be affected. In addition, a contraction in economic activity resulting from states of emergency and other measures issued by the national or local governments may reduce orders for various printed materials and the holding of events, potentially affecting the Group's operating performance and financial condition.」

「In the event business, events during the busy autumn season were held almost as scheduled as the number of new COVID-19 cases declined.」

「Due in part to the extension of the state of emergency and the period covered by priority preventive measures to prevent the spread of COVID-19, a succession of events during the cumulative second quarter of the current consolidated fiscal year were cancelled or postponed.」

「Due in part to the extension of the period covered by priority preventive measures to prevent the spread of COVID-19, a succession of events during the cumulative first quarter of the current consolidated fiscal year were cancelled or postponed.」

「Revenue from the printing business declined due in part to the stagnation of personal consumption and corporate activity caused by the spread of COVID-19. This included declines in catalogues and inserts, which are major commercial printing products, as well as in printed publications. Revenue from the event business also remained under severe order conditions through the end of the fiscal year, as events scheduled for the year-end peak season were cancelled or postponed amid the renewed spread of COVID-19.」

「Amid growing concern over the resurgence of COVID-19, the order environment remained difficult. Although the company worked to secure orders through measures for operating during the pandemic and thorough cost reviews, revenue was ¥104 million, down 66.2% year on year, and the operating loss was ¥41 million, compared with an operating loss of ¥16 million in the same period of the previous year.」

「Although the events business has gradually begun to recover since around August following the announcement of policies by national and prefectural governments aimed at keeping economic activity running during the COVID-19 pandemic, event cancellations and postponements have continued. As a result, revenue fell substantially to ¥25 million, down 85.8% year on year, and the operating loss was ¥45 million, compared with an operating loss of ¥17 million in the same period of the previous year.」

「Most events during the first quarter ended June were cancelled or postponed due to the spread of COVID-19. As a result, revenue fell substantially to ¥16 million, down 85.8% year on year, and the operating loss was ¥20 million, compared with an operating loss of ¥3 million in the same period of the previous year.」

「The Group expects its performance to be significantly affected by a decrease in related printed materials and events resulting from requests to refrain from going out and the cancellation of various events accompanying the spread of COVID-19. In addition, all business activities scheduled for March 2020 were cancelled or postponed due to the impact of COVID-19, although the impact on performance for the current consolidated fiscal year was minor.」