Business and Financial Impact of COVID-19

「In response to the spread and prevalence of COVID-19, the Group actively promoted the provision of online services to customers, including the shift from in-person to online services. However, if the end of the COVID-19 pandemic results in a mismatch between the online services and other offerings provided by the Group and customer needs, the Group's operating results may be affected.」

「During the nine-month period ended 31 December, restrictions on economic and social activity were eased, including as a result of COVID-19 being reclassified as a Class 5 designated infectious disease, and the Japanese economy maintained a gradual recovery trend.」

「During the first three months of the current consolidated fiscal year, demand continued to improve, particularly in the food service, travel and accommodation industries, following the reclassification of COVID-19 as a Class 5 infectious disease. However, economic conditions remained uncertain due to the slowdown in personal consumption caused by continued inflation stemming from the prolonged situation in Ukraine, slowing growth at major US IT companies, and concerns about an economic downturn against a backdrop of global monetary tightening.」

「In response to the spread and prevalence of COVID-19, the Group actively promoted the provision of online services to customers, the digitalization of operations and remote working. As demand also increased for stay-at-home products such as books provided by the Group, the operating environment was generally favorable for several consecutive periods. However, if the change in COVID-19 to a Class 5 infectious disease and the end of the COVID-19 pandemic result in a mismatch between the online services and other offerings provided by the Group and customer needs, the Group's operating results may be affected by a backlash.」

「During the nine-month period ended 31 December, the Japanese economy entered a gradual recovery trend as restrictions on activity related to COVID-19 were eased and the acceptance of foreign tourists resumed.」

「During the first six months of the current consolidated fiscal year, signs emerged that social activity was normalizing as the impact of COVID-19 waned. However, uncertainty about the economic outlook continued due to a resurgence of infections caused by a variant virus beginning in July and weaker consumer sentiment resulting from inflation caused by the prolonged situation in Ukraine and the depreciation of the yen.」

「During the first three months of the current consolidated fiscal year, signs emerged that social activity was normalizing as the impact of COVID-19 waned. However, the outlook for the economy remained uncertain, as prolonged tensions surrounding Ukraine and a substantial depreciation of the yen caused import raw-material prices and energy costs to surge, driving inflation beyond expectations and dampening consumer sentiment.」

「During the nine-month period ended 31 December, the Japanese economy remained sluggish due to the renewed spread of COVID-19 and the impact of the state of emergency, but began to recover following the lifting of the state of emergency at the end of September 2021.」

「During the first six months of the current consolidated fiscal year, corporate earnings recovered sharply from the second half of the previous consolidated fiscal year and exceeded pre-pandemic levels. However, industrial production stagnated after recovering, and personal consumption remained weak, particularly in face-to-face services, due to shorter operating hours accompanying the declaration of a state of emergency. Overall, the economy remained sluggish.」

「During the first three months of the current consolidated fiscal year, personal consumption weakened, particularly in face-to-face services, due to store closures and calls to refrain from going out accompanying the declaration of a state of emergency. However, industrial production and exports recovered as economic activity resumed in Japan and overseas, while capital investment showed signs of bottoming out as corporate earnings improved, leaving the overall economy broadly flat.」

「The Group is working to establish a structure that enables it to continue operating flexibly even in the event of a widespread epidemic, based on the business continuity plans of each company and division, through staggered working hours, working from home, securing liquid deposits and webcasting. However, there is a risk of a decline in new business opportunities due to fewer sales meetings, lower advertising and training revenue due to customers reducing advertising and training expenses, the temporary closure of bookstores, the main sales channel for books, the temporary closure and shortened operating hours of amusement facilities and a decline in visitor numbers, temporary office closures if employees are found to be infected, and the inability to collect trade receivables from customers whose continued operations have become difficult. These factors may affect the Group's operating results, financial position and cash flows.」

「The spread of COVID-19 has had a broad impact on the economy and corporate activities. The Group has also been affected to some extent in its financial position, operating results and cash flows from the current consolidated fiscal year onward due to the temporary closure of bookstores and amusement arcades operated by the Group, among other factors.」

「The spread of COVID-19 has had a broad impact on the economy and corporate activities. The Group has also been affected to some extent in its financial position, operating results and cash flows from the current consolidated fiscal year onward due to the temporary closure of bookstores and amusement arcades operated by the Group, among other factors. As it is currently difficult to reasonably forecast when the infectious disease will subside or the extent of its impact, the Group has made accounting estimates, including judgments regarding the recoverability of deferred tax assets and the recognition of impairment losses, on the assumption that the impact will continue throughout fiscal 2021, based on information from external sources and other information.」

「Mainly due to the temporary suspension and delays in commissioned projects resulting from the spread of COVID-19, revenue was ¥106 million, down 39.6% year on year, and the segment loss (operating loss) was ¥24 million, compared with segment profit of ¥6 million in the same period of the previous year.」

「The spread of COVID-19 has had a broad impact on the economy and corporate activities. The Group has also been affected to some extent in its financial position, operating results and cash flows from the following consolidated fiscal year onward due to the temporary closure of bookstores and amusement arcades operated by the Group, among other factors.」