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    3962   JP3507750002

CHANGE INC.

(3962)
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Change : Summary of Consolidated Financial Results (IFRS) for the Second Quarter of the Fiscal Year Ending September 30, 2021

05/13/2021 | 03:56am EDT

[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence.

May 13th, 2021

Summary of Consolidated Financial Results (IFRS) for the Second Quarter of the Fiscal Year Ending September 30, 2021

Listed company name: CHANGE Inc.

Listed share exchange: Tokyo Stock Exchange Securities Code: 3962

URL: https://www.change-jp.com/

Representative: Hiroshi Fukudome, President

For Inquiry: Yutaka Yamada, CFO

TEL: 03-6435-7347

Scheduled filing date of quarterly report: May 13, 2021

Scheduled commencement date of dividend payments: None

Preparation of explanatory materials for financial results: Yes

Holding of a briefing on financial results: Yes (For institutional investors and analysts)

(Amounts less than one million are rounded down.)

1. Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending September 30, 2021 (October 1, 2020 to March 31, 2021)

  1. Consolidated Operating Results (Six-month Period)

(Percentages indicate year-on-year changes.)

Quarterly profit

Total quarterly

Revenue

Operating profit

Profit before taxes

Quarterly profit

attributable to owners

comprehensive

of the parent

income

Mil

%

Mil

%

Mil

%

Mil

%

¥ Mil

%

¥ Mil

%

2nd Quarter of FY2021

10,262

79.7

5,319

88.9

5,264

88.3

3,441

88.2

3,467

165.0

3,441

88.2

2nd Quarter of FY 2020

5,710

-

2,815

-

2,796

-

1,828

-

1,308

-

1,828

-

Basic per share

Diluted per share

Quarterly profit

Quarterly profit

Yen

Yen

2nd Quarter of FY2021

51.69

50.37

2nd Quarter of FY 2020

20.80

20.28

(Note) The Company conducted a 2-for-1 share split of its ordinary shares on September 1, 2020, and a 2-for-1 share split of its ordinary shares on January 1, 2021. The figures hereof were calculated on the assumption that the share split was conducted at the beginning of the fiscal year ended September 30, 2020.

(2) Consolidated Financial Position

Total assets

Total shareholders' equity

Quarterly profit attributable to

Percentage of interests

owners of parent

attributable to owners of parent

Millions of yen

Millions of yen

Millions of yen

%

Second Quarter of the

Fiscal Year Ending

37,294

29,296

29,306

78.6

September 2021

Fiscal year ended

17,093

9,406

7,959

46.6

September 2020

2. Dividend Status

Annual dividends

End of First Quarter

End of second quarter

End of the third quarter

Fiscal year end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

-

0.00

-

0.00

0.00

September 2020

Fiscal year ended

-

0.00

September 2021

FY2021/9 (Forecast)

-

0.00

0.00

(Note) Revisions to the most recently announced dividend forecasts: None

1

[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence.

3. Forecasts for the Fiscal Year Ending September 30.2021 (October 1, 2020 to September 30, 2021)

(Percentages indicate year-on-year changes for the full year and year-on-year changes for the quarter.)

Quarterly profit

Basic Net Profit

Revenue

Operating profit

Profit before taxes

Net profit

attributable to

Per share

owners of parent

Mil

%

Mil

%

Mil

%

Mil

%

¥ Mil

%

Yen

15,781

49.7

5,071

20.7

5,008

20.4

3,272

18.1

3,296

60.9

49.20

Full year

16,281

54.4

5,571

32.6

5,508

32.4

3,599

29.9

3,623

76.8

54.08

(Note) 1. Any change or adjustment of figures compared with the most recently announced one: No

  1. Forecasts for the fiscal year ended September, 2021 are disclosed in a certain range.
  2. The Company conducted a 2-for-1 share split of its ordinary shares on January 1, 2021. The figures hereof were calculated on the assumption that the share split was conducted at the beginning of the fiscal year ending September 30, 2021.

2

[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence.

※ Notes

  1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): No

New company (company name) None.

Excluded company (company name) None

  1. Changes in accounting policies and changes in accounting estimates
    1. Changes in accounting policies required by IFRS: No
    2. Changes in accounting policies other than those: No
    3. Changes in accounting estimates: No
  2. Number of shares outstanding (ordinary shares)

(i) Number of shares outstanding at

the end of the period (including

FY2021 2Q

72,615,562 shares

FY2020 2Q

63,105,600 shares

treasury share)

(i) Number of shares outstanding at

the end of the period (including

FY/2021 2Q

394 shares

FY2020 2Q

392 shares

treasury share)

(ii) Number of treasury shares at the

FY/2021 2Q

67,085,411 shares

FY2020 2Q

62,913,508 share

end of the period

(Note) The Company conducted a 2-for-1 share split of its ordinary shares on September 1, 2020, and a 2-for-1 share split of its ordinary shares on January 1, 2021. The figures hereof were calculated on the assumption that the share split was conducted at the beginning of the fiscal year ended September 30, 2020.

  • Quarterly results are not subject to quarterly review by certified accountants or audit corporations.
  • Explanations and other special notes concerning the appropriate use of business performance forecast

The earnings forecasts and other forward-looking statements contained in this report are prepared based on information currently available to the Company and on certain assumptions deemed to be reasonable, but they are not promised by the Company regarding future performance. Actual results may differ significantly from these forecasts due to various factors. For future forecasts and assumptions, please refer to ""1. Overview of Operating Results, etc. (iii) Forecasts for the next fiscal year" on page 3 of the attached materials.

3

[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence.

Accompanying Materials - Contents

Index

1. Qualitative information on financial results for the first quarter of the fiscal year ending September 30, 2021

.........................5

(1)

Overview of Operating Results .....................................................................................................................................................

5

(2)

Financial Position...........................................................................................................................................................................

5

(3)

Consolidated Earnings Forecasts and Other Forward-LookingInformation ..........................................................................

6

2. Condensed Quarterly Consolidated Financial Statements and Major Notes .................................................................................

7

(1)

Condensed Quarterly Consolidated Statement of Financial Position........................................................................................

7

(2)

Condensed Quarterly Consolidated Statements of Income and Summary Quarterly Consolidated Statements of

Comprehensive Income .......................................................................................................................................................................

9

(3)

Condensed Quarterly Consolidated Statements of Changes in Equity ...................................................................................

11

(4)

Condensed Quarterly Consolidated Statements of Cash Flows ...............................................................................................

13

(5)

Notes to Condensed Quarterly Consolidated Financial Statements ........................................................................................

14

(Notes on the Going Concern Assumption) .................................................................................................................................

14

(Segment Information) ..................................................................................................................................................................

14

(Subsequent Events) ......................................................................................................................................................................

15

4

[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence.

1. Qualitative information on financial results for the first quarter of the fiscal year ending September 30, 2021

(1) Overview of Operating Results

In the future, it is predicted that about 1 out of 2.5 citizens will be older than 65 in 2060, resulting in a world of super-aged society. In recent years, as a result of the spread of new corona viruses, it was found that Japanese digital transformation (hereinafter, "DX") is becoming increasingly behind the world. Therefore, in the stock market, there is a clear bipolarization between companies adaptive and evolving to DX and other companies. As a result, it is urgently necessary for surviving companies to respond to, transform, and invest in DX. In addition, it is also inevitable for local governments who are facing with the challenge of severe financial conditions and population decline and whose workloads are increasing despite the declining number of employees to improve operational efficiency through DX.

Under such circumstances, the Group (or simply, "we") has been developing businesses such as digitization of business models and business processes and support for the development of digital human resources in order to dramatically improve Japanese productivity with "People multiplied by Technology" and to make Japan a sustainable society with a decreasing population under the vision of "Change Productivity" under the mission of "Change People, Change Business, Change Japan". Since its inception, we have provided solutions to the digitization needs of many customers.

We have been achieving steady growth in sales and profit every year since the listing of our shares in September 2016. Specifically, we are developing and expanding our business in three areas: NEW-IT Transformation Business, which supports the development of digital human resources, innovations in business processes, and digitization; Investment Business, which is investing in businesses that are synergistic with NEW-IT Transformation Business, to be responsible for creating new businesses and building business models; and the Publitech Business, which is committed to promoting DX-based regional creation.

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

In NEW-IT Transformation Business, we pushed ahead with digitization projects for large corporations and government agencies, while also making steady progress, mainly in projects related to digital human resource development. In addition, in order to jointly implement digital human resource development with KDDI Corporation, we established a joint venture, named Digital Growth Academia Inc., and acquired beacapp, Inc., one of the fastest-growing companies in Japan as a beacon-related solution provider, and made it a subsidiary. In these ways, we are accelerating DX in Japan.

In the Publitech Business, revenues increased significantly due to factors such as an increase in the commission rate in the hometown tax payment platform business from April 2020. In addition, LoGo Chat and LoGo Form, which are SaaS businesses for local governments, have been steadily expanding with strong reputation among customers as they move to paid services from April 2021.

We also succeeded in raising 16,384 million yen to fund for growth by implementing equity financing in overseas markets with the purposes of accelerating business growth with "DX multiplied by Region" and "diversifying our shareholders and further improving corporate governance based on this and improving share liquidity in conjunction with an increase in the number of shares outstanding."

As a result, in the first six months of the current fiscal year, revenue was 10,262 million yen (up 79.7% year on year), operating profit was 5,319 million (up 88.9% year on year), profit before taxes was 5,264 million yen (up 88.3% year on year), and profit attributable to owners of parent was 3,467 million yen (up 165.0% year on year).

Segment operating results are as follows: (I)NEW-ITTransformation Business

In the NEW-IT Transformation Business, the Company pushed ahead with digitization projects for large corporations and government agencies, while also making steady progress, mainly in projects related to digital human resource development. In addition, in order to jointly implement digital human resource development with KDDI Corporation, we established a joint venture, named Digital Growth Academia Inc., and acquired beacapp, Inc who boasts one of the fastest-growing companies in Japan as a beacon-related solution provider, and made it a subsidiary. In these ways, we are accelerating DX in Japan.

Consequently, the NEW-IT Transformation Business recorded revenue of 1,110 million yen (up 0.9% year on year) and segment income of 354 million yen (up 33.7% year on year) for the second quarter of the current fiscal year.

(II)Investment Business

In the Investment Business, during the second quarter of the current fiscal year, share prices of our listed investees were firm.

As a result, in the second quarter of the current fiscal year, revenue in the Investment Business was 247 million yen (up 3908.5% year on year) and segment profit was 237 million yen (compared with a segment loss of 4 million yen in the same period of the previous fiscal year).

(III) Publitech Business

In the Publitech Business, revenues increased significantly due to factors such as an increase in the commission rate in the hometown tax payment platform business from April 2020. In addition, LoGo Chat and LoGo Form, which are SaaS businesses for local governments, have been steadily expanding with strong reputation among customers as they move to paid services from April 2021.

As a result, revenue in the Publitech Business for the second quarter of the current fiscal year was 8,904 million yen (up 93.4% year on year), and segment profit was 5,394 million yen (up 77.5% year on year).

  1. Financial Position
    1. Assets, Liabilities, and Shareholder Equity (Assets)
      Current assets at the end of the second quarter of the current fiscal year were 30,754 million yen, an increase of 19,447 million yen from the end of the previous fiscal year. This was mainly due to an increase of 17,225 million yen in cash and cash equivalents. Non-current assets were 6,540 million yen, an increase of 752 million yen from the end of the previous fiscal year. This was primarily due to an increase of 650 million in goodwill due to the acquisition of beacapp Inc.
      As a result, total assets were 37,294 million yen, an increase of 20,200 million yen compared to the end of the previous fiscal

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Change Inc. published this content on 13 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2021 07:55:07 UTC.


© Publicnow 2021
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Sales 2021 16 369 M 149 M 149 M
Net income 2021 3 904 M 35,6 M 35,6 M
Net Debt 2021 - - -
P/E ratio 2021 47,9x
Yield 2021 -
Capitalization 195 B 1 778 M 1 778 M
Capi. / Sales 2021 11,9x
Capi. / Sales 2022 10,2x
Nbr of Employees -
Free-Float 50,6%
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Number of Analysts 2
Last Close Price 2 680,00 JPY
Average target price 4 625,00 JPY
Spread / Average Target 72,6%
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Managers and Directors
Hiroshi Fukudome President & Representative Director
Yutaka Yamada Chief Financial Officer & Director
Yoshihisa Jimbo Chairman
Hiroshi Fujiwara Independent Outside Director
Akira Itoh Director, EVP & Manager-NEW IT Unit
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