Performance Trend 1. Overview of performance for FY3/2024 Consolidated performance for FY3/2024 of G-7 Holdings <7508> was 192,992 million yen in increased operating income of 9.1% over the previous year, and increased ordinary income of 7.4% to 7,318 million yen, and attributed to the parent company's net income of 5,175 million yen, an increase of 35.3% over the previous year. Sales were driven by the Business Supermarket Business and the Meat Business, and continued to set a new record high, exceeding the company's plan by 4.3%. However, in terms of profits, the automobile-related business was affected by a decrease in profits due to poor sales of winter tires due to a warm winter, and could not reach the company's plan, it turned to a profit increase for the second time due to the growth of other businesses centered on the Business Supermarket business. The sales cost ratio has increased by 0.8 points over the previous year due to changes in the sales composition ratio; however, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main reasons for the increase/decrease of selling, general and administrative expenses were a decrease of 600 million yen in energy costs due to subsidies from rising electricity prices, and an increase of 1 billion yen in labor costs due to improvements in employee treatment and increased education costs. In addition to this, depreciation expenses increased by nearly 600 million yen due to rising construction material costs and rising costs of opening stores etc. The EBITDA margin has increased by 0.1 points from the previous year. Also, the reason for the large increase in the net income of the parent company's shareholders attributable to the current period is due to the elimination of 500 million yen in retirement benefits paid to executives that were recorded as special losses in the previous year, a decrease of 455 million yen in impairment losses, and a gain of 127 million yen on the sale of investment securities in FY3/2024.

2. Financial forecast for the March 2025 period.

For the fiscal year ending in March 2025, TDSE <7046> expects revenue of 28,370 million yen (+12.5% YoY), operating profit of 2,840 million yen (+4.6% YoY), ordinary profit of 2,840 million yen (+3.4% YoY), and net income of 1,960 million yen (-1.7% YoY). Considering the performance of the first quarter, the progress of the consulting business is weak, and the company faces challenges in the first quarter, but there is time to overcome and come up with countermeasures, so no adjustments have been made. It is thought that it is important to take measures to strengthen sales, actively promote the deployment of the alliance strategy and top sales, and hope to achieve the target by a comeback that gathers the overall strength of the company.

In addition, the company has revealed plans to execute capital alliances and M&A for non-continuous growth, in addition to organic growth. We want to keep an eye on it as a move to accelerate corporate growth when the direction and execution plan of the strategy are established.

(Author: FISCO guest analyst Nobumitsu Miyata)