Cybernet : Results of Operations for the First Half of the Fiscal Year Ending December 31, 2022

(Delayed)

TSE Code : 4312

CYBERNET SYSTEMS CO., LTD.

Results of Operations for the First Half of the Fiscal

Year Ending December 31, 2022

3 August, 2022

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Business Summary of Financial Results for the First Half of FY2022

Projection for FY2022

Our main efforts against Medium-term Business Plan

References

2	©2022 CYBERNET SYSTEMS CO., LTD. All Rights Reserved.

Understanding of the current external environment and its impact on the results of the first half of FY2022

Understanding of the current environment

• Rising resource prices and energy shortages due to the situation in Russia and Ukraine.
• Shortage of parts and materials such as semiconductors due to supply chain disruptions, etc.
• The global spread of COVID-19 has affected economic activities in some regions, such as lockdowns in China, although efforts are being made to normalize economic activities.
• Decrease of Japanese Yes due to widening interest rates between Japan and the US.

Impact on results of the first half of FY2022

• Our business in Russia/Ukraine and EU is limited, and the impact on the results is limited.
• Although there are cases where customers' budget execution is postponed due to the impact of supply chain disruptions, etc., the impact on the results is limited because the products handled by the Company are mainly software used in research and development.
• Some orders delayed in China, due to the lockdown in China, Sales of IT security solutions for cloud environments was strong due to the establishment and permeation of the new normal work style.
• Exchange rate fluctuations have limited impact on the operating income.

3	©2022 CYBERNET SYSTEMS CO., LTD. All Rights Reserved.

Application of Accounting Standard for Revenue Recognition

• "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020; hereinafter the "Revenue Recognition Standard") has been applied since the beginning of this fiscal year.
• By applying the standard, revenue recognition of software maintenance contract of the distribution business changed. Before applying the standard, the revenue was mainly recognized at the start of the contract and now the revenue is recognized over the contract period.
• Since transitional measures of Revenue Recognition Standard have been applied and retrospective adjustments have not been made in the past years, the year-on-year in financial figures in this material are only for reference (For some non-consolidated net sales, retroactively revised figure is disclosed).

Old (image diagram)

New (image diagram)

1,000	Revenue was recognized at
			a single point of start of
			maintenance contract.
			0	0	0
	Q1	Q2	Q3	Q4

Revenue is recognized over maintenance contract period.

250250250250

Q1

Q2

Q3

Q4

4	©2022 CYBERNET SYSTEMS CO., LTD. All Rights Reserved.

Financial Results for the First Quarter of FY2022

• Although sales decreased year-on- year due to the termination of the distribution agreement with Synopsys, sales exceeded the plan by 1.4% due to strong sales of multi-physics analysis tools, the company's main product.
• Operating income decreased due to the decrease in net sales.

• Revenue Recognition Standard has been applied since the beginning of this fiscal year (reference P.4), and the year-on-year in financial figures in this material are only for reference.
• EBITDA: Operating income + Depreciation

					Million yen
	21/12 1H	22/12 1H	YoY	22/12 1H	Change %
	Results	Results	Plan
	Change %	From Plan
	[Old]	[New]	[New]
Net sales	12,507	9,736	(22.2%)	9,600	+1.4%
Gross profit	5,253	4,029	(23.3%)	-	-
Selling, general and	3,015	2,995	(0.6%)	-	-
administrative expenses
Operating income	2,238	1,033	(53.8%)	850	+21.6%
(Operating profit margin)	17.9%	10.6%	-	8.9%	-
Ordinary income	2,227	979	(56.0%)	850	+15.3%
Profit attributable to	1,426	573	(59.8%)	550	+4.3%
owners of parent
EBITDA	2,360	1,153	(51.1%)	1,000	+15.4%
(EBITDA margin)	18.9%	11.8%	-	10.4%	-
EPS (yen)	45.73	18.49	(59.6%)	17.64	+4.8%

5	©2022 CYBERNET SYSTEMS CO., LTD. All Rights Reserved.