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Showa Holdings Co., Ltd.

Business Briefing Session

27 July 2020

Consolidated 5 Businesses

6 Businesses in Group

Sport

Food

Entertainment

Digital Finance※

※Commercial Credit and Finance PLC (CCF),

a listed company in Sri Lanka is our equity method affiliate.

Resort

2

6 Businesses in Group

Rubber

3

Report for FY 2020

Overview of Group Businesses

Impact and countermeasures

against the Covid-19 epidemic

4

Summary of the business performance in FY 2020Stagnant consolidated profits, though factors vary from business to business

Negative factor

1. Sales in the Digital Finance, the company's largest business,

declined as it reduced disbursement until August of last year to

cope with legal risks.

2. Legal costs drove down profits (Digital Finance).

Neutral factor

3. Sport business continued in slump from 2017.

4. Rubber business continues to be sluggish.

Positive factor

5. Progress in improving operational efficiency in the Digital Finance

business and reducing expenses.

6. Profits in the food business expanded.

7. Profits in the entertainment business have improved.

5

Impact of Covid-19 epidemic in Q4Diversified businesses hedge a certain amount of risk

The impact of countermeasures against the Covid-19 epidemic in each country

1. Digital Finance Business: Lockdown led strict restrictions on operations.Provision of 290 million JPY in special allowance for doubtful accounts to cover future increases in bad debt.

2. Sport Business: Revenue decreased due to self-restraint and school closure.

3. Food Business: Sales declined, but the effects of business improvements overcame the impact.

4. Entertainment business: No impact due to remote work has been promoted for a long time.

5. Rubber business: No impact.

6

Prospect for the future business performanceExpecting recovery in Q2 (July-September period)

1. Digital Finance Business: The recovery of overdue loans is

progressing faster than expected. Sales activities have already

resumed.

2. Food Business: Profit increasing continuously.

3. Rubber Business: While there are concerns about the impact of

the recession, the increase of sales expected as a competitor is

withdrawing form the market.

4. Sport Business: A steady recovery has been in place since June.

5. Entertainment Business: Several projects in Q1 delayed.

Expecting recovery in following quarters due to strong

performance of the titles that the company in charge.

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0

4,500

9,000

13,500

18,000

3,903 3,9033,126 3,361

5,956

7,405

8,703

10,786

12,21812,753

13,242

15,01815,479

Consolidated Revenue

JPY Million

8

-1,000

0

1,000

2,000

3,000

4,000

▲ 136▲ 261

▲ 421▲ 547

366

758

413674

2,261

3,557

1,599

968

▲ 131

Consolidated Operating Profit

JPY Million

9

-1500

-1000

-500

0

500

1000

1500

2000

▲2,412

▲1,297

155

▲3,260

2,037

101

▲ 43

92

364 376

▲3,427

▲ 311

▲602

Consolidated Net Profit

JPY Million

Showa Holdings Co., Ltd.アジアを開拓し続けるコングロマリット 10

Overview of each Business

Group Lease PCLStrategy to be the leading leasing company in ASEAN 11

Digital Finance Business

Remain close to our customers and contribute to their life improvement and foster their entrepreneurship

spirit with innovative finance products

Digital Finance - Leasing Business(Optimization of "Glocal Digital Finance")

Leasing and Hire Purchase

➢ Providing financial support to the customers who acquire assets such asmotorcycles, three-wheeled motorcycles and tractors.

➢ Expanding business network in collaboration with business partners such as motorcycle dealers.

➢ Providing financial support by establishing a point of sale (POS) at a partner's store or sales channel.

12

13

Digital Finance - Lending Business(Optimization of "Glocal Digital Finance")

Microfinance, Asset back loan and Entrepreneur loan

➢ Providing small-scale secured and unsecured loans directly to customers.➢ Operating and owning small branches as sales channels.➢ Providing finance service at customer house in local villages in addition to

the operation in the branches.

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Overview (Digital Finance Business)

Overview➢ Conservative reduction of new disbursement of loans was made, due

to ongoing lawsuits.➢ After winning a major court case in Thailand in August 2019, the

company has shifted back to a policy of business expansion and new contracts are on the rise.

Impact of COVID-19 epidemic➢ Temporary suspended operations and implementation of strict credit

criteria was made after lockdown in many countries in Southeast Asia, as countermeasures against the epidemic of Covid-19.

➢ Provided special allowance for NPL (around 288 Million JPY).➢ Operation resumed from early May. Along with the relaxation of

restrictions in each countries. Improvement of debt collection is under way.

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Revenue (Digital Finance Business)

1,537

2,948

4,834

6,966

8,566 9,079

9,546 9,447

8,179

0

2,000

4,000

6,000

8,000

10,000

12,000

JPY Million

16

Segment Profit (Digital Finance Business)

641

1,032 817

1,000

2,651

4,010

2,497

1,611

415

415

288

0

900

1,800

2,700

3,600

4,500

JPY Million

Shift to business re-growth policy from August 2019

4,190

3,130

2,736

3,523

3,817

3,380

900

1,800

2,700

3,600

4,500

964

1,339 1,287

1,550

1,730

400

800

1,200

1,600

2,000

1,456

1,219

2,110

1,915

1,617

500

1,000

1,500

2,000

2,500

1075

871

13451291

1142

300

600

900

1200

1500

Thailand GL motorcycleNumber of new contract

Thailand TNB motorcycleAsset back loan

Number of new contact

CambodiaHonda motorcycle

Number of new contract

MyanmarHonda motorcycle

Number of new contract

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➢ After winning the case in Thailand, new policy to reboost the disbursement was set.

➢ Anticipating gradual growth of portfolio after release of lockdown.

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Digital Finance BusinessCarefully seek a growth trajectory

➢The recovery of overdue loans is progressing faster

than expected.

➢Provision of 290 million JPY in special allowance.

➢Sales activities have already resumed.

➢Despite the strong competitiveness over our

competitors, the company has adopted a policy to

monitor carefully economic trends and other

factors for future expansion.

ASUKA Foods Co., Ltd.「ちょっと食べる」喜びを毎日世界へ 19

Food BusinessTo deliver "Happiness with small bites"

all around the world everyday

Food Business (From a producer of Japanese

Sweets to a well-known Brand)

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Overview (Food Business)

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Overview➢ Up to last year: Excessive product numbers have reduced production

efficiency.This year: Improving profitability by narrowing down to priority products.

➢ Up to last year: Low productivity due to the shortage of the skilled workers.This year: Improving productivity through successful measures to recruitfull-time employees.

Significantly increased profitability through improvements in both products and human resources.

Impact of COVID-19 epidemic➢ Revenue is declining due to the impact of Covid-19 epidemic, as a result of

the above measures, improvement of profits is realized more than that.➢ Increasing visibility by focusing on branding through social media.

2018 - 2022

Revenue (Food Business)

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4,576 4,756

4,483 4,681

4,859 4,830 4,563

4,354 4,353

0

2,000

4,000

6,000

JPY Million

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Segment Profit (Food Business)

▲ 17

80

-20

0

20

40

60

80

100

Successful business transformation undertaken after consolidation in 2019, with significant improvement in profitability.

JPY Million

▲ 1.6

▲ 15.4

9.612.9

28.6 29.3

-16

0

16

32

JPY Million

※Food consolidation from 1 October 2018

Total segment profit in the financial year

Quarterly segment profit

Progress of branding through social media

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Branding thorough social media has progressed, increasing awareness of the company's products is expected to make a

significant contribution to earnings growth over the medium to long term.

https://twitter.com/tw_asukafoods

3.30million view

Highest record in May

Covered

in the Yahoo news Japan!

Twitter followers of Asuka Foods

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551 552

5,154 5,101 5,082 5,710 5,645 5,458 5,305 5,299

16,815 17,819 17,382

27,462

29,628

0

4,000

8,000

12,000

16,000

20,000

24,000

28,000

32,000

Apr-19 May Jun Jul Aug Sep Oct Nov Dec Jun-20 Feb Mar Apr May Jun

(Followers)

Nihonbashi-honcho KashidokoroHealth Food

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More delightful More delicious

More healthy Wagashi

Twitter followers of Nihonbashi-honcho Kashidokoro

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942 946 975

1,992 2,121 2,091 2,060 2,247 2,183 2,172

5,472

7,461

11,371

14,211 14,435

0

4,000

8,000

12,000

16,000

Apr-19 May Jun Jul Aug Sep Oct Nov Dec Jan-20 Feb Mar Apr May Jun

(Followers)

Food BusinessTo improve profitability and increase revenue

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➢Expecting maintained high profits with

continuous improvement of productivity.

➢Sales in current quarter is increasing due to

improved recognition in the market.

➢The current policy is expected to continue,

with the aim of further increasing profits

through increased sales.

Showa Rubber Co., Ltd.顧客の「大切」を守る社会の守護者 29

Rubber BusinessThe guardian that protects the "Important asset" of customers

Rubber Business (The guardian that protects

the "Important asset" of customers)

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Rubber Lining Pressing

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Overview (Rubber Business)

Overview➢Sales had been decreased and profit was negative long

term due to shrinking domestic market.

Impact of COVID-19 epidemic➢No impact at the time, but there is a concern about future

impact.➢One of the biggest competitor of rubber lining business

announced their closure of business.http://www.daiki-rubber.co.jp/info/information_200326d.pdf

➢Expecting significant improvement in sales and profits through capturing their market share.

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Revenue (Rubber Business)

2,034 2,018

1,762 1,652 1,600 1,560 1,511

1,665 1,574

0

500

1,000

1,500

2,000

2,500

JPY Million

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Segment Profit (Rubber Business)

▲165

▲ 4

▲ 102▲ 78

▲ 64

▲ 99

▲176

▲ 74

▲ 111

-300

-200

-100

0

100

200

300

JPY Million

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Major rubber lining operators in Japan

Daiki Rubber Industry Co., Ltd.(Scheduled to be closed at March 2021)

Showa Rubber Co., Ltd.

Kyokuto Rubber Co., Ltd.

Ohji Rubber & Chemicals Co., Ltd.

・ ・・・

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Business outlook of Rubber Lining Business

JPY Million

Revenue comparison(Mar-2020)

Revenue and profit outlook(Rubber Lining Business)

※Showa Rubber estimation

217 228

484 862

991

1,249

0

200

400

600

800

0

500

1,000

1,500

Profit

Revenue

1,000

721

141

0

400

800

1,200

Competitor

(Scheduled to close)

Showa Rubber

Rubber lining business

JPY Million

Otherrevenue

Rubber Liningrevenue

36

Rubber BusinessIncrease profit through focusing on rubber lining

➢Being mindful of the impact of a possible recession.

➢Expecting sales growth in the profitable rubber

lining business as competitors pull out.

➢Aiming to increase sales and improve profits by

concentrating management resources on the

rubber lining business.

LUCENT Co., Ltd.スポーツコミュニティの活性化 37

Sport BusinessActivation of sports communities

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Sport Business (Be the promoter closest to sports communities)

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Overview (Sport Business)

Overview➢ Tennis Ball Business: Sales initiative to improve profitability stalled,

market share declined.

➢ Tennis Wear Business: Efforts were made and completed throughout the

previous year to normalize excess inventory in FY 2018.

➢ Tennis Club Business: Aggressively expanded the business.

Impact of COVID-19 epidemic➢ Sales of tennis balls, tennis wear, and other products plummeted due to

the suspension of school and tennis club activities and the closure of

sports facilities across the country.

➢ Tennis club partially closed and heavily affected.

➢ Expecting recovery through school reopening and new tennis club opening.

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1,392 1,388 1,417 1,448 1,396

1,505 1,561

1,376

1,133

0

500

1,000

1,500

2,000

JPY Million

Revenue (Sport Business)

Segment Profit (Sport Business)

41

206217

231

206221

193

78

149

79

0

100

200

300

JPY Million

Lucent Tennis Club

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2,821 2,838

2,769

2,863

2,818

3,043

2,500

2,600

2,700

2,800

2,900

3,000

3,100

3,200

Number of members reached highest in June after overcoming COVID-19

Twitter followers of Lucent

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2,504

4,369 4,598

5,860

6,096

1,300

2,600

3,900

5,200

6,500

Apr-19 May Jun Jul Aug Sep Oct Nov Dec 20-Jan Feb Mar Apr May Jun

(Followers)

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Sport Business User communication and expansion of tennis club

➢Social media promotion before the epidemic of

Covid-19 improved brand awareness.

➢Improving deeper communication with users to

regain market share.

➢Strong tennis club business continues to open new

tennis clubs and soft tennis classes.

➢Expecting further expansions of tennis club

business.

Wedge Holdings Co., Ltd.世界の時間を「ワクドキ」で埋め尽くす 45

Entertainment Business

Lets make world full of "WakuDoki"

Entertainment Business("Anywhere door" of entertainment contents)

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Demon Slayer: Kimetsu no Yaiba Official fanbook Kingdom Official Problem Collection My Hero AcademiaOfficial Character Book2 Ultra Analysis

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WIXOSS WXK-11 Reincarnation

Entertainment Business("Anywhere door" of entertainment contents)

Battle Spirits [BS52] Awakening Chapter 1 Reincarnation (Returner)

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Overview (Entertainment Business)

Overview➢ Sales did not grow over the course of the year.➢ Entertainment titles handled in projects such as manga and card

games performed well. As a result, book editing royalties and royalty income increased.

➢ Aiming for full-scale business expansion through further development of overseas business that continued developing.

Impact of COVID-19 epidemic➢ Since remote work has been promoted for a long time, the impact

of the spread of Covid-19 infection is limited.➢Despite the delay of the several projects in Q1, expecting recovery

in following quarters due to strong performance of the titles that the company in charge.

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Revenue (Entertainment Business)

599 605 590 589

508 490

455 456 460

0

250

500

750

JPY Million

50

Segment Profit (Entertainment Business)

194

149136

109

5948

▲ 56▲ 80

▲ 6

-100

0

100

200

300

JPY Million

51

Revenue & profit improved quarterly

78

111

133

153

0

50

100

150

200

▲ 42

▲ 2

11

41

-60

0

60

120

Segment profit (FY 2020)

Revenue (FY 2020)

JPY Million JPY Million

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Creating a new TCG distribution channels in Southeast Asia

52

Phuong NamRetail

Franchise

300,000 people on social media

Title acquisition Distribution channel

"Anywhere door" of

entertainment contents

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Creating a new TCG distribution channels in Southeast Asia

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➢ Obtained the distributorship and sales rights for Southeast Asia from major Japanese TCG publishers.

・HAIKYU!! Volleyball Card Game (Jan 2018～)・WIXOSS (Apr 2020～)・Battle Spirits (Jun 2020～)

➢ Fostering a community of 300,000 TCG fans in Southeast Asia through social media. (Mar 2017～)

➢ Develop franchise with directly managed store in Indonesia. (May 2020～）

➢ Developed sales channel through partnership with a major bookseller Phuong Nam Retail in Vietnam. (Jun 2020～)

54

Franchise development in Indonesia

54

Indonesia

Franchise stores: 9 stores(Recruitment of member stores started in May 2020)

Directly managed store: 3 stores

55

Social media administrationDeveloping largest TCG community in Asia

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29,232

73,781

128,934

173,444

206,456

228,395 240,815

268,741

0

50,000

100,000

150,000

200,000

250,000

300,000

TCGnoheya Facebook page followers(Followers)

5656

26 July 2020

TCGnoheya FB page

followers :

300,765https://www.facebook.com/tcgnoheya/

Social media administrationDeveloping largest TCG community in Asia

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Entertainment Business (Business in Japan

remains strong, Southeast Asia to be profitable)

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➢Several projects in Q1 delayed.

➢The strong performance of the titles that the

company in charge.

➢Continuing to control expenses.

➢New Market Development in Southeast Asia.

➢Accelerate expansion in Southeast Asia while

leveraging the strong performance in Japan.

Showa Holdings Co., Ltd.アジアを開拓し続けるコングロマリット

THANK YOU

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