Consolidated Summary Report under Japanese GAAP: Q2 FY21/06

This is an unofficial translation. In case of any difference in meaning between the original Japanese text and the English translation, Japanese text shall prevail.

Consolidated Summary Report under Japanese GAAP for the second quarter of the fiscal year ending June 30, 2021

			January 29, 2021
Company Name:	AVANT CORPORATION		Stock exchange listings: Tokyo
Code Number:	3836		URL: https://www.avantcorp.com/
Representative:	(Title) President, Group CEO	(Name) Tetsuji Morikawa
For inquiry:	(Title) Director, Group CFO	(Name) Naoyoshi Kasuga	TEL: [phone]

Securities report issue date: February 12, 2021	Dividend payment date: -
Supplementary information for financial statements: Available
Explanatory meeting to be held: Yes

1. Consolidated results for the second quarter of the fiscal year ending June 30, 2021

(Millions of yen, rounded down to the nearest unit) (Percentages indicate year-on-year changes)

(1) Consolidated results of operations

	Revenue	EBITDA	Operating income	Ordinary income		Profit attributable to
		shareholders of parent
													company
Second quarter of the			%		%				%		%				%
fiscal year	7,637		(1.2)	1,417	20.3		1,296		19.0	1,305	19.4		824		22.5
ending June 30, 2021
ended June 30, 2020	7,734		11.6	1,178	8.0		1,089		7.3	1,093	7.9		673		5.0
Comprehensive income (loss) for the 2Q of the fiscal year ending June 30, 2021	844 million yen (17.6%)	for the 2Q of the fiscal year ended June 2020	718 million yen (13.7%)
	Net profit per	Diluted net
	share		profit per share
Second quarter of the			yen		yen
fiscal year
ending June 30, 2021			21.93		-
ended June 30, 2020			17.91		-

(Notes) EBITDA is derived by adding depreciation and amortization of goodwill to operating income.

The Company conducted a 2-for-1 common stock split on December 1, 2019. Net income per share is calculated as if this stock split had taken place at the beginning of the previous fiscal year.

(2) Consolidated financial condition

	Total Assets	Net Assets	Equity Ratios
As of	Unit: million yen	Unit: million yen	%
December 31, 2020	11,294	7,717	68.3
June 30, 2020	11,780	7,194	61.1

(Reference) Net assets attributable to the company's shareholders As of December 31, 2020 7,717 million yen As of June 30, 2020 7,194 million yen

2. Dividends on common stock

		Dividends per share
	1st	2nd	3rd	Fiscal	Annual
	quarter-end	quarter-endquarter-end	year-end
Fiscal Year Ended	yen	yen	yen	yen	yen
June 30, 2020	-	0.00	-	9.00	9.00
June 30, 2021	-	0.00
June 30, 2021 (Forecast)			-	10.00	10.00

Revisions to the most recently announced dividend forecast: None

3. Consolidated earnings forecasts for the fiscal year ending June 30, 2021

(Percentages indicate year-on-year changes)

Profit attributable to

Net profit

Revenue

Operating income

Ordinary income

owners of parent

per share

company

Fiscal Year ending

Unit: million yen

%

Unit: million yen

%

Unit: million yen

%

Unit: million yen

%

yen

June 30, 2021

16,110

2.7

2,330

2.3

2,330

2.1

1,561

1.5

41.52

(Note)

Revisions

to the most recently

announced

earnings forecast: None

Notes

1. Changes in significant subsidiaries during the period (changes in "Specified Subsidiaries" (Tokutei Kogaisha) accompanying changes in scope of consolidation): No

Newly added to the scope of consolidation: nil

Newly deleted from the scope of consolidation: nil

1. Application of accounting procedures specific to the preparation of quarterly consolidated financial statements: none
2. Changes in accounting policies, accounting estimates and correction of past errors:

1. Changes in accounting policies due to revision of accounting standards: No
2. Changes in accounting policies due to reasons other than item (i) above: No
3. Changes in accounting estimates: No
4. Correction of past errors: No

1. Number of shares outstanding (common stock)

(i) Total shares outstanding including treasury stock	As of December 31, 2020	37,603,203 shares	As of June 30, 2020	37,586,982	shares
(ii) Shares of treasury stock held
As of December 31, 2020	2,911 shares	As of June 30, 2020	2,911	shares
(iii) Average outstanding shares	Second quarter of the fiscal year	37,590,859 shares	Second quarter of the fiscal	37,574,282	shares
ending June 30, 2021	year ended June 30, 2020

(Note) The Company conducted a 2-for-1 common stock split on December 1, 2019. Number of shares are calculated as if this stock split had taken place at the beginning of the previous fiscal year.

*This report is exempt from the audits of CPAs or Audit firms.

Forward-looking statements in this report, including earnings forecasts, are based on information currently available to the Company and on certain assumptions deemed to be reasonable. These statements are not promises by the Company regarding future performance.

Actual results may differ materially from the forecast depended on a range of factors. Please refer to "Earnings Forecasts" on page 8 for the assumptions for earnings forecasts and notes for using earnings forecasts.

The Company conducted a 2-for-1 common stock split on December 1, 2019. Net income per share is calculated as if this stock split had taken place at the beginning of the previous fiscal year.

Accompanying Materials - Table of Contents
1. Qualitative Information on Financial Results for the Current Quarter ....................................................	2
(1) Management's Discussion on Business Operations ..............................................................................	2
(2) Discussion on Financial Condition ..........................................................................................	6
(3) Earnings Forecasts .......................................................................................................	8
2. Quarterly Consolidated Financial Statements and Notes..................................................................	9
(1) Quarterly Consolidated Balance Sheets..........................................................................................	9
(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income....	11
Quarterly Consolidated Statements of Income .................................................................................	11
Quarterly Consolidated Statements of Comprehensive Income .........................................	12
(3) Quarterly Consolidated Statements of Cash Flows .....................................................................	13
(4) Notes to Quarterly Consolidated Financial Statements .....................................................................	14
(Notes on the Going Concern Assumption) ..............................................................................	14
(Notes on Substantial Changes in the Amount of Shareholders' Equity) ..................................	14
(Segment information) .............................................................................................	15
(Significant Subsequent Events) .............................................................................................	16

- 1 -

1. Qualitative Information on Financial Results for the Current Quarter

(1) Management's Discussion on Business Operations

Consolidated financial results for the second quarter of the current fiscal year are as follows.

			(millions of yen, rounded down to the nearest unit)
		Fiscal Year ended June	Fiscal Year ending June	Year on Year Change
		30, 2020	30, 2021
		Second quarter	Second quarter	Amount	%
Revenue		7,734	7,637	(96)	(1.2)
Operating income		1,089	1,296	206	19.0
Ordinary income		1,093	1,305	212	19.4
Profit attributable to	owners of	673	824	151	22.5
parent company

At the end of the previous fiscal year, domestic companies began to postpone IT investment (frozen in some industries which underwent significant impacts) due to the spread of the new corona viral infectious diseases (COVID-19), and that began to affect orders received for the Group. As a result, we had a cautious outlook for the results particularly during the second half of the fiscal year under review.

The environment surrounding our Group was initially within the scope of this outlook, but on the other hand, various changes in society are stimulating the need for "management and decision-making based on data." Our Group's needs for products and services are on a recovery trend while transforming them into more sophisticated ones.

As a result, sales in the Business Intelligence Business, which had declined in the first quarter, began to increase, and the scale of the decline in sales in the Consolidated Accounting-related Business also shrank. In addition, the Outsourcing Business continued to achieve double-digit growth. As a result of these factors, revenues were 7,637 million yen (down 1.2% from the same quarter of the previous year), and although sales have not yet started to increase on a cumulative basis, revenue for the last three months have increased slightly, showing signs of recovery.

With regard to the increase in the ratio of recurring revenue (such as software maintenance fees, etc., which are continuously generated), which is 1 of the management targets in the Medium-Term Management Plan, the ratio increased to 36.9%, up 4.2 percentage points from the same quarter of the previous fiscal year. This was due to the growth in the Outsourcing Business, which has consistently maintained a recurring revenue ratio of around 90%, as well as the improvement in the ratio in the Consolidated Accounting-related Business and the Business Intelligence Business due to the increase in cloud sales, etc. The total amount also increased by 14.3%. In recent years, revenue equivalent to recurring revenue, which the Company consistently receive orders for similar services from the same customer, have been on the rise. At present, recurring revenue ratio is calculated without including these.

With regard to profits, operating income was 1,296 million yen (up 19.0% from the same quarter of the previous year), ordinary income was 1,305 million yen (up 19.4%), and profit attributable to owners of parent was 824 million yen (up 22.5%), all of which were higher than the same quarter of the previous year, due to the effects of the improvement in profitability of projects through the increase in the ratio of in-house production and the reduction of non-urgent and non-urgent expenses that have been promoted since the expansion of COVID-19.

The status of each reportable segment is as follows.

(i) Revenues

				(millions of yen, rounded down to the nearest unit)
			Fiscal Year ended June	Fiscal Year ending June	Year on Year Change
			30, 2020	30, 2021
			Second quarter	Second quarter	Amount	%
Consolidated	Accounting-related	4,165	3,897	(267)	(6.4)
Businesses
Business Intelligence Business	2,870	2,878	7	0.3
Outsourcing Business		993	1,179	186	18.7
Elimination	of	inter-segment	(294)	(317)	(22)	-
transactions
Consolidated Revenues	7,734	7,637	(96)	(1.2)

- 2 -