NS : Consolidated Financial Results for the First Quarter of Fiscal 2022

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between the Japanese version and the English translation, the Japanese version will prevail.

	Consolidated Financial Results
	for the First Quarter of Fiscal 2022
	(April 1, 2022 - June 30, 2022)
	[under IFRS]
	August 2, 2022
Company name:	NS Solutions Corporation
Stock exchange listing:	Tokyo Stock Exchange
Code number:	2327
URL:	https://www.nssol.nipponsteel.com
Representative:	Hiroyuki Morita, Representative Director & President
Contact:	Hideki Komatsu, Director, Accounting & Finance Department
Phone:	[phone]

Scheduled date of filing quarterly securities report:	August 10, 2022
Scheduled date of commencing dividend payments:	-
Availability of supplementary briefing material on quarterly financial results:	Available
Schedule of quarterly financial results briefing session:	Scheduled (for analysts)

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

1. Consolidated Financial Results for the First Quarter of Fiscal 2022 (April 1, 2022 to June 30, 2022)

(1) Consolidated Operating Results					(% indicates changes from the previous corresponding period.)
			Revenue				Operating profit		Profit before tax		Profit attributable to
								owners of parent
		Million yen	%		Million yen	%		Million yen	%		Million yen	%
	FY2022 1Q	65,132	(0.6)			6,484	(11.9)		6,652	(12.7)		4,352	(8.4)
	FY2021 1Q	65,519	-			7,363	-		7,618	-		4,750	-
		Total comprehensive			Basic earnings		Diluted earnings
			income				per share		per share
		Million yen	%				Yen			Yen
	FY2022 1Q	(5,784)	-				47.57			-
	FY2021 1Q	5,432	-				51.92			-
(2) Consolidated Financial Position
													Ratio of equity
			Total assets		Total equity	Equity attributable	attributable to
				to owners of parent	owners of parent to
													total assets
				Million yen			Million yen		Million yen		%
	FY2022 1Q			303,592		195,233		188,623		62.1
	FY2021			325,764		204,569		197,831		60.7

Copyright (C) 2022 NS Solutions Corporation, All rights reserved.

2. Dividends

			Annual dividends
	1st quarter-end	2nd quarter-end	3rd quarter-end	Year-end	Total
	Yen	Yen	Yen	Yen	Yen
FY2021	-	30.00	-	36.00	66.00
FY2022	-
FY2022 (Forecast)		35.00	-	35.00	70.00

(Note) Revision to the forecast for dividends announced most recently: No

3. Consolidated Financial Results Forecast for Fiscal 2022 (April 1, 2022 to March 31, 2023)

(% indicates changes from the previous corresponding period.)

	Revenue		Operating profit	Profit before tax	Profit attributable	Basic earnings
		to owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	144,000	10.1	14,500	2.3	14,800	2.1	9,700	2.5	106.02
Full year	295,000	9.1	31,000	3.7	31,500	2.6	21,100	2.8	230.63

(Note) Revision to the financial results forecast announced most recently: No

Copyright (C) 2022 NS Solutions Corporation, All rights reserved.

* Notes:

1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None

1. Total number of issued shares (common stock)
2. 1. Total number of issued shares at the end of the period (including treasury shares):

FY2022 1Q:	91,501,000 shares
FY2021:	91,501,000 shares

2) Total number of treasury shares at the end of the period:

FY2022 1Q:	14,323 shares
FY2021:	923 shares

3) Average number of shares during the period:

FY2022 1Q:	91,492,073 shares
FY2021 1Q:	91,500,207 shares

• This quarterly consolidated financial results report is exempt from the quarterly review conducted by certified public accountants or an audit corporation.
• Explanation of the proper use of financial results forecast and other notes
• • The Group adopted the International Financial Reporting Standards (IFRS) from the three months ended June 30, 2022. The consolidated financial statements for the transition date, the same period of the previous fiscal year, and the previous fiscal year are presented based on IFRS.
  • The forecasts stated above are based on information available as of the date of publication of this document. Actual results may differ from these forecasts due to a wide range of factors hereafter.

Copyright (C) 2022 NS Solutions Corporation, All rights reserved.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results .....................................................................................	2
(1)	Operating Results ...........................................................................................................................................	2
(2)	Financial Position ...........................................................................................................................................	3
(3)	Consolidated Financial Results Forecast and Other Forward-looking Information .......................................	4
2. Condensed Quarterly Consolidated Financial Statements and Primary Notes ...................................................	5
(1)	Condensed Quarterly Consolidated Statements of Financial Position ...........................................................	5
(2)	Condensed Quarterly Consolidated Statements of Profit or Loss and Condensed Quarterly Consolidated
	Statements of Comprehensive Income ...........................................................................................................	7
(3)	Condensed Quarterly Consolidated Statements of Changes in Equity ...........................................................	9
(4)	Condensed Quarterly Consolidated Statements of Cash Flows ....................................................................	11
(5)	Notes to Condensed Quarterly Consolidated Financial Statements .............................................................	12
	Going concern assumption ......................................................................................................................	12
	First-time adoption ..................................................................................................................................	12

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Copyright (C) 2022 NS Solutions Corporation, All rights reserved.

1. Qualitative Information on Quarterly Financial Results

1. Operating Results Analysis of operating results
   Japan saw signs of economic recovery during the three months ended June 30, 2022. Corporate earnings have generally improved despite weakness in some areas, and system investment by client companies has increased moderately.
   Based on the Mid-term Business Strategy 2021-2025 published in April 2021, NS Solutions Corporation (hereinafter the "Company" or collectively referred to as the "Group") defined four focus areas for business growth: DX in the manufacturing industry, digital platformer, digital workplace solution, and IT outsourcing. We are endeavoring to expand our business by capturing customer needs for digital transformation to the greatest extent possible.
   As part of efforts to achieve growth, we worked to enhance our response capabilities in the digital transformation (DX) services. In April this year, the Company entered into a capital and business alliance agreement with Arithmer Inc., which has advanced mathematical AI technology, for the purpose of enhancing our capabilities to respond to customer needs in the AI domain by strengthening and expanding Arithmer's AI technology capabilities. In June, the Company entered into a strategic partnership with Pegasystems Inc. to jointly conduct sales and marketing activities for its low-code development platform in Japan and to support the digitization of business processes for various customers mainly in the enterprise domain. Furthermore, the Company also worked to develop new solutions as it launched the provision of "Enepharos," energy trading and risk management services, in June.
   In addition, we proceeded with our efforts to promote DX for Nippon Steel Corporation. These efforts included the building of "NS-IoT," a wireless IoT sensor platform for centralized management of data from steel manufacturing sites, and the launch of its actual operation in April for the purpose of early detection of abnormalities in facilities. We also built "NS-Lib," an integrated data platform that allows for grasping management information and KPIs on a real-time basis and taking appropriate actions based on our integrated data management services.
   In the promotion of sustainability management, we have organized our value creation process based on our goals to achieve the purpose of our existence in society, defined five material issues, and are working to address them. Regarding our initiatives toward the reduction of environmental impacts, which is one of the material issues, the Company has endorsed the TCFD recommendations and set a reduction target for GHG emissions. The Company is also engaged in efforts to foster an organizational culture where everyone can work energetically with a sense of fulfillment, such as the promotion of diversity and inclusion, working on various business activities from the perspective of ESG to create a prosperous society, including its support and sponsorship for "Tokyo Rainbow Pride 2022." As a result of these efforts, the Company has been newly selected as an index component of the FTSE Blossom Japan Sector Relative Index, in addition to the FTSE4Good Index Series and FTSE Blossom Japan Index, which are ESG investment benchmarks.
   Revenue for the three months ended June 30, 2022 amounted to 65,132 million yen, a similar level to the same period of the previous fiscal year (65,519 million yen). This was due partly to an increase in the platformer- related business, despite some delays in addition to reactionary declines in product sales and projects related to regulatory compliance. Profit before tax amounted to 6,652 million yen, a decrease of 966 million yen compared to 7,618 million yen for the same period of the previous fiscal year, due to an increase in selling, general and administrative expenses as a result of proactive investments in human resources and others.

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Copyright (C) 2022 NS Solutions Corporation, All rights reserved.