EGuarantee : 〔Delayed〕Consolidated Financial Results for the Fiscal Year Ended March 31, 2021

Consolidated Financial Results

for the Fiscal Year Ended March 31, 2021

[Japanese GAAP]

May 14, 2021

Company name: eGuarantee, Inc.
Stock exchange listing: Tokyo
Code number: 8771
URL: https://www.eguarantee.co.jp/
Representative: Masanori Eto	President and Chief Executive Officer
Contact: Nozomu Murai	Director, General Manager of Corporate Administration Dept.
Phone: [phone]

Scheduled date of ordinary general meeting of shareholders: June 28, 2021

Scheduled date of commencing dividend payments: June 29, 2021

Scheduled date of submitting annual securities report: June 29, 2021

Availability of supplementary briefing material on financial results: Yes

Schedule of financial results briefing session: Yes (for institutional investors and securities analysts)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 to March 31, 2021)

(1) Consolidated operating results		(% indicates changes from the previous corresponding period.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Fiscal year ended	Million yen		%	Million yen	%	Million yen	%	Million yen	%
March 31, 2021	7,194		20.8	3,088	13.6	3,108	13.0	2,004	(12.9)
March 31, 2020	5,956		6.9	2,718	8.2	2,751	7.8	2,301	39.3

(Note) Comprehensive income: Fiscal year ended March 31, 2021: ¥ 2,161 million [(11.2) %)] Fiscal year ended March 31, 2020: ¥ 2,433 million [38.1%]

	Basic earnings per	Diluted earnings	Profit on equity	Ordinary profit on	Operating profit
	share	per share	total assets	on net sales
Fiscal year ended	Yen	Yen	%	%	%
March 31, 2021	45.12	42.51	14.6	15.9	42.9
March 31, 2020	54.14	51.27	21.5	16.7	45.6

(Reference) Equity in earnings of associates: Fiscal year ended March 31, 2021: ¥ (0) million Fiscal year ended March 31, 2020: ¥ 5 million

(2) Consolidated financial position

		Total assets	Net assets	Capital adequacy	Net assets per share
		ratio
As of		Million yen	Million yen	%	Yen
March 31, 2021		22,570	17,186	70.3	347.19
March 31, 2020		16,444	12,798	70.3	271.94
(Reference) Equity:	As of March 31, 2021: ¥ 15,876 million
	As of March 31, 2020: ¥ 11,558 million
(3) Consolidated cash flows
	Cash flows from		Cash flows from		Cash flows from	Cash and cash
			equivalents at end of the
	operating activities		investing activities		financing activities
			period
Fiscal year ended		Million yen		Million yen		Million yen	Million yen
March 31, 2021	4,694		(80)		2,209	11,644
March 31, 2020	1,036		(1,661)		(613)	4,820

2. Dividends

		Annual dividends				Total	Consolidated		Consolidated
	1st	2nd	3rd	Year-end	Total			dividend on
	quarter-end	quarter-end	quarter-end		dividends	payout ratio		net assets
	Yen	Yen	Yen	Yen	Yen		Million yen	%	%
Fiscal year ended	―	0.00	―	14.00	14.00	595	25.9	5.6
March 31, 2020
Fiscal year ended	―	0.00	―	22.00	22.00	1,006	48.8	7.1
March 31, 2021
Fiscal year ending
March 31, 2022	―	0.00	―	22.00	22.00			41.9
(Forecast)

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 to March 31, 2022)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	4,000		15.9	1,780	18.4	1,800	19.1	1,150	18.5	25.15
Full year	8,500		18.1	3,720	20.4	3,750	20.6	2,400	19.8	52.48

* Notes:

1. Changes in significant subsidiaries during the fiscal year ended March 31, 2021 (change in specified subsidiaries resulting in change in scope of consolidation): No
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
3. 1. Changes in accounting policies due to the revision of accounting standards: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
4. Total number of issued shares (common shares)
   1) Total number of issued shares at the end of the period (including treasury shares):

March 31, 2021:	45,729,800 shares
March 31, 2020:	42,506,400 shares
2) Total number of treasury shares at the end of the period:
March 31, 2021:	1,414 shares
March 31, 2020:	1,385 shares

3) Average number of shares during the period:
Fiscal year ended March 31, 2021:	44,415,315 shares
Fiscal year ended March 31, 2020:	42,505,035 shares

(Reference) Overview of Non-consolidated Financial Results

1. Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 to March 31, 2021)

(1) Non-consolidated operating results			(% indicates changes from the previous corresponding period.)
	Net sales			Operating profit		Ordinary profit		Profit
Fiscal year ended	Million yen		%		Million yen		%		Million yen		%	Million yen		%
March 31, 2021	7,776		27.5		2,689		14.4		2,941		12.9	2,008		(12.7)
March 31, 2020	6,100		3.1		2,351		6.2		2,605		6.9	2,301		39.1
	Basic earnings	Diluted earnings per
	per share			share
Fiscal year ended			Yen			Yen
March 31, 2021			45.22			42.60
March 31, 2020			54.15			51.28

(2) Non-consolidated financial position

	Total assets	Net assets	Capital adequacy ratio	Net assets per share
As of:	Million yen	Million yen	%	Yen
March 31, 2021	21,517	16,041	73.9	347.56
March 31, 2020	15,503	11,706	74.6	272.23
(Reference) Equity:	As of March 31, 2021: ¥ 15,893 million
	As of March 31, 2020: ¥ 11,571 million

2. Non-consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 to March 31, 2022)

(% indicates changes from the previous corresponding period.)

	Net sales		Ordinary profit	Profit		Basic earnings per share
	Million yen		%	Million yen	%	Million yen		%	Yen
First half	4,150		8.5	1,700	14.8	1,150		13.0	25.15
Full year	8,800		13.2	3,550	20.7	2,400		19.5	52.48

*These financial results are outside the scope of audits by certified public accountants or audit firms.

*Guidance on the appropriate use of financial results forecasts and other special notes

Notes on forward-looking statements

Financial results forecasts and other forward-looking statements in this document are based on information currently available to the Company and certain assumptions deemed reasonable, and the Company does not guarantee their achievement. Actual performance and other results may be significantly different from the forecasts due to various factors. For details on the assumptions for financial results forecasts and notes on the use of financial results forecasts, etc., refer to "1. Overview of Operating Results, (4) Future Outlook" on page 3 of the attachment.

Disclosure of supplementary briefing material on financial results

Supplementary briefing material on financial results will be posted on the Company's website. The Company also plans to hold a briefing session for institutional investors and securities analysts on Monday, May 17, 2021.

• Contents of the Attachment

1. Overview of Operating Results ....................................................................................................	2
(1)	Overview of Operating Results for the Fiscal Year under Review .........................................	2
(2)	Overview of Financial Position for the Fiscal Year under Review .........................................	2
(3)	Overview of Cash Flows for the Fiscal Year under Review ...................................................	3
(4)	Future Outlook ........................................................................................................................	3
(5)	Significant Events Concerning Going Concern Assumption ..................................................	3
2. Basic Policy on Selecting Accounting Standards .........................................................................	4
3. Consolidated Financial Statements and Primary Notes ................................................................	5
(1)	Consolidated Balance Sheets ..................................................................................................	5
(2)	Consolidated Statements of Income and Comprehensive Income ..........................................	7
(3)	Consolidated Statements of Changes in Equity.......................................................................	9
(4)	Consolidated Statements of Cash Flows ................................................................................	11
(5)	Notes to Consolidated Financial Statements ..........................................................................	12
	(Notes on Going Concern Assumption) .................................................................................	12
	(Important Matters Forming the Basis for Preparing Consolidated Financial Statements) ....	12
	(Notes on Consolidated Balance Sheets) ................................................................................	14
	(Notes on Consolidated Statements of Income) .....................................................................	14
	(Notes on Consolidated Statements of Comprehensive Income) ...........................................	14
	(Notes on Consolidated Statements of Changes in Equity) ....................................................	15
	(Notes on Consolidated Statements of Cash Flows)...............................................................	16
	(Segment Information) ...........................................................................................................	17
	(Per Share Information) ..........................................................................................................	19
	(Significant Subsequent Events).............................................................................................	20

1

1. Overview of Operating Results

(1) Overview of Operating Results for the Fiscal Year under Review

Although the Japanese economy in the fiscal year under review was in a tough situation due to the COVID-19 infection, there are signs of recovery at present. However, the future remains uncertain as the fourth wave of the spread of the COVID-19 infection is said to have arrived.

As for the environment surrounding eGuarantee, Inc. (the "Company") and its subsidiaries (collectively, the "Group"), the number of corporate bankruptcies decreased by 13.8% year on year to 7,314 cases in the fiscal year under review (source: TEIKOKU DATABANK, Ltd.), and it is believed that various benefits and institutional loans that are substantially interest-free and unsecured were successful in curbing the number of corporate bankruptcies. However, a lack of prospects for business improvement due to the prolonged stagnation of economic activities is expected to increase the number of companies going bankrupt, and the close monitoring of the trend of bankruptcies is needed to be continued accordingly.

Amid such an environment, credit risk guarantee services continued to show robust results. The number of new contracts increased by developing new products and offering them promptly to meet customers' growing needs due to the impact of the COVID-19 infection and other factors. Also, inquiries from customers who had not considered the use of the guarantee service increased. The customer base that uses the guarantee service was expanded by the Group's efforts to improve the service's recognition by advertising and actively responding to requests for interviews from the media. For existing policies, the Group has reviewed their conditions and limited underwriting of large-scale risks to diversify risks and restructure the portfolio, in light of the possibility of an increase in the number of bankruptcies in the future due to the impact of the COVID-19 infection.

As a result, at the end of the fiscal year under review, guarantee obligations amounted to 637.1 billion yen (from the end of the fiscal year under review, total amount of the maximum amount guaranteed set for each guaranteed party (if the guaranteed party is not identifiable, the maximum amount guaranteed set for each contractor of the guarantee agreement) is stated as guarantee obligations), and net sales were 7,194,885 thousand yen (up 20.8% year on year), while operating profit was 3,088,846 thousand yen (up 13.6% year on year), ordinary profit was 3,108,793 thousand yen (up 13.0% year on year), and profit attributable to owners of parent was 2,004,095 thousand yen (down 12.9% year on year). Of this, profit attributable to owners of parent was significantly increased in the previous fiscal year as a result of a temporary special factor, which was a significant reduction in the rate of income taxes after the application of tax effect accounting due to the tax-deductibility of ESOP trust distributions. In the fiscal year under review, it has decreased compared to the previous fiscal year due to the absence of such temporary special factors.

Financial results by service are as follows:

・Guarantee services for commercial companies

Net sales for these services amounted to 7,013,910 thousand yen (up 21.2% year on year).

・Guarantee services for financial institutions

Net sales for these services amounted to 180,974 thousand yen (up 6.4% year on year).

1. Overview of Financial Position for the Fiscal Year under Review Assets

Total assets at the end of the fiscal year under review increased by 37.3% from the end of the previous fiscal year to 22,570,471 thousand yen.

Current assets increased by 25.2% from the end of the previous fiscal year to 17,085,816 thousand yen. This is mainly due to an increase in cash and deposits of 6,823,517 thousand yen.

Non-current assets increased by 95.9% from the end of the previous fiscal year to 5,484,655 thousand yen. This is mainly due to an increase in investment securities of 2,571,487 thousand yen.

Liabilities

Total liabilities increased by 47.7% from the end of the previous fiscal year to 5,384,392 thousand yen.

Current liabilities increased by 49.2 % from the end of the previous fiscal year to 5,269,109 thousand yen. This is mainly due to an increase in income taxes payable of 932,056 thousand yen.

2