SIGMAXYZ : Consolidated Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2022 (Japanese Accounting Standards)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the

First Nine Months of the Fiscal Year Ending March 31, 2022

(Japanese Accounting Standards)

		February 7, 2022
Company name:	SIGMAXYZ Holdings Inc.	Stock listing: Tokyo Stock Exchange
Stock code:	6088	URL: https://www.sigmaxyz.com/
Representative:	Ryuichi Tomimura, Representative Director and President
Inquiries:	Shinya Tabata, CFO	Telephone: [phone]

Scheduled date of quarterly securities report filing: February 9, 2022

Scheduled date of dividend payment: -

Preparation of supplementary materials on quarterly financial results: Yes

Schedule of quarterly financial results presentation meeting: None

(Amounts of less than ¥1 million are rounded down)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2021 (from April 1, 2021 to December 31, 2021)

(1) Consolidated Operating Results (Cumulative)				(% figures indicate year-on-year changes)
		Revenue		Operating Profit	Ordinary Profit	Profit Attributable to
			Owners of Parent
Nine months ended		Millions of yen		%	Millions of yen		%	Millions of yen	%	Millions of yen	%
December 31, 2021		11,303		10.4	2,084		78.4	2,080	71.6	1,269	70.7
December 31, 2020		10,241		(13.3)	1,168		(28.5)	1,212	(24.3)	743	(21.0)
Note: Comprehensive Income		Nine months ended December 31, 2021: ¥1,269 million [70.7%]
		Nine months ended December 31, 2020: ¥743 million [(21.0)%]
		Profit per Share	Profit per Share
		(Diluted)
Nine months ended				Yen			Yen
December 31, 2021				60.62			-
December 31, 2020				38.81			38.76

Note: Profit per share (diluted) for the nine months ended December 31, 2021 is not stated because there are no dilutive shares.

(2) Consolidated Financial Position

Total Assets

Net Assets

Equity Ratio

Net Assets per Share

As of

Millions of yen

Millions of yen

%

Yen

December 31, 2021

13,052

9,636

73.8

456.95

March 31, 2021

10,283

5,462

53.1

287.61

Reference: Equity

As of December

31, 2021:

¥9,636 million

As of March 31, 2021:

¥5,462 million

2. Dividends

Annual Dividend

First Quarter-End

Second Quarter-End

Third Quarter-End

Fiscal Year-End

Total

Fiscal year ended

Yen

Yen

Yen

Yen

Yen

March 31, 2021

－

0.00

－

22.00

22.00

Fiscal year ending

－

0.00

－

March 31, 2022

Fiscal year ending

March 31, 2022

26.00

26.00

(Forecast)

Note: Revisions to the most recently announced dividend forecast: Yes

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3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2022 (from April 1, 2021 to March 31, 2022)

(% figures indicate year-on-year changes)

	Revenue		Operating Profit	Ordinary Profit	Profit Attributable to	Profit per Share
		Owners of Parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%		Yen
Fiscal year ending	16,000		14.1	2,700	54.5	2,700	50.2	1,650	36.4		78.65
March 31, 2022

Note: 1. Revisions to the most recently announced earnings forecasts: Yes

2. For details on the consolidated earnings forecasts, please refer to the "Notice Concerning Revisions to Earnings and Dividend Forecasts" announced on February 7, 2022 (Japanese Only).

• Notes
• 1. Changes in significant subsidiaries during the period (changes in specified subsidiaries affecting the scope of consolidation): None
  2. Adoption of special accounting methods for preparation of quarterly consolidated financial statements: None
  3. Changes in accounting policies, changes in accounting estimates, and retrospective restatements

1)	Changes in accounting policies associated with revisions to accounting standards: Yes
2)	Changes in accounting policies other than those in item 1) above:	None
3)	Changes in accounting estimates:	None
4)	Retrospective restatements:	None

Note: For details, please refer to "2. Quarterly Consolidated Financial Statements and Important Notes (3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 7 of the attached materials.

(4) Number of shares issued (common stock)

1)	The number of shares issued as of the end of the period (including treasury shares)
	As of December 31, 2021		23,154,300 shares
	As of March 31, 2021		21,104,300 shares
2)	The number of treasury shares as of the end of the period
	As of December 31, 2021		2,064,597 shares
	As of March 31, 2021		2,110,564 shares
3)	Average number of shares outstanding during the period (cumulative from the start of the fiscal year)
	Nine months ended December 31, 2021		20,943,543 shares
	Nine months ended December 31, 2020		19,166,340 shares

Note: The number of treasury shares excluded from the calculation of the number of treasury shares as of the end of the period and average number of shares outstanding during the period (cumulative from the start of the fiscal year) include the shares of the Company held by Custody Bank of Japan, Ltd. (Trust Account E) as trust assets for the Employee Stock Ownership Plan (J-ESOP) and those held by Custody Bank of Japan, Ltd. (Trust Account) as trust assets for a performance-linked stock compensation program.

• These quarterly financial statements are outside the scope of quarterly review procedures by certified public accountants or audit corporations.
• Explanation regarding proper use of financial forecasts, and other special matters
  The earnings forecasts and other forward-looking statements presented in these materials reflect information currently available to the Company and assumptions that are deemed to be reasonable, but the Company does not guarantee the achievement of these targets. Actual results may differ significantly as a consequence of various factors. For more information on the Company's earnings forecasts and underlying assumptions, please refer to "1. Qualitative Information on Quarterly Financial Results (3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements" on page 3 of the attached documents.

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SIGMAXYZ Holdings Inc. (6088) Financial Results for the Nine Months Ended December 31, 2021

Contents of the attached materials

1. Qualitative Information on Quarterly Financial Results	2
(1)	Explanation of Operating Results	2
(2)	Explanation of Financial Position	2
(3)	Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements	3
2. Quarterly Consolidated Financial Statements and Important Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	5
	Quarterly Consolidated Statement of Income
	(Nine months ended December 31, 2020 and 2021)	5
	Quarterly Consolidated Statement of Comprehensive Income
	(Nine months ended December 31, 2020 and 2021)	6
(3)	Notes to Quarterly Consolidated Financial Statements	7
	(Notes Regarding Assumption of a Going Concern)	7
	(Notes on Significant Changes in the Amount of Shareholders' Equity)	7
	(Changes in Accounting Policies)	7
	(Segment Information, etc.)	8

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SIGMAXYZ Holdings Inc. (6088) Financial Results for the Nine Months Ended December 31, 2021

1. Qualitative Information on Quarterly Financial Results

1. Explanation of Operating Results

The Japanese economy is still in a dire situation due to the impact of COVID-19. In terms of future prospects, while the economy is expected to recover, partly owing to the effects of various policies and improving overseas economies, as the economic and social activities head toward normalization, sufficient heed must be paid to downward risks also. It is necessary to closely observe the impacts of COVID-19, including variants, on national and international economies as well as on changes in the financial and capital markets.

In such an environment, the Group is engaged in value creation in a wide range of industries and companies such as making business strategy, M&As, business reform, organizational reform, utilization of digital technology and cloud solutions, project management, development of new business, promotion of collaboration between companies, business investment and creation of joint ventures. Our goal is to provide services toward realization of "Three Innovations" that promote digital transformation (DX) of companies, namely: (i) Streamlining existing business operations (Digital Transformation); (ii) Creating new value (Service Transformation); and (iii) Management platform reform (Management Transformation).

The Group has made the transition to a holding company system in October 2021. Under the umbrella of the holding company SIGMAXYZ Holdings Inc., Group companies, including SIGMAXYZ Inc., the new subsidiary that handles the consulting business, and SIGMAXYZ Investment Inc. that handles the investment business, will promote their business and strive to achieve further growth of the Group as a whole through services strengthened by collaboration.

The Group's revenue for the nine months ended December 31, 2021 amounted to ¥11,303 million (up 10.4% year on year). Selling, general and administrative expenses were ¥3,134 million (up 11.1% year on year) as activities increased following an increase in revenue.

Due to an increase in revenue and a decrease in cost of revenue, gross profit increased by ¥1,229 million to ¥5,219 million (up 30.8% year on year), operating profit increased by ¥916 million to ¥2,084 million (up 78.4% year on year), and ordinary profit increased by ¥867 million to ¥2,080 million (up 71.6% year on year).

Profit attributable to owners of parent came to ¥1,269 million (up 70.7% year on year).

From the nine months ended December 31, 2021, the Group has begun to report segment information for the following two segments as the importance of "investment business" increased: "Consulting Business" and "Investment Business."

Operating results for each segment are as follows.

(Consulting Business)

The financial results of the Consulting Business for the nine months ended December 31, 2021 shows revenue of ¥11,170 million and operating profit of ¥3,173 million. The consulting business was driven by projects supporting companies in their formulation of digital transformation strategies for companies, revitalization of organizations and personnel, and development of new businesses and services.

On the hiring front, the Company added 9 mid-career recruits and 50 new graduates in the nine months ended December 31, 2021. The training for new graduates has been completed successfully in a hybrid format combining a remote work environment and face-to-face training. They have started working on their job in October. The number of consultants was 485 as of the end of December, 2021. Project satisfaction remained high at 93 points.

(Investment Business)

The financial results of the Investment Business for the nine months ended December 31, 2021 shows revenue of ¥256 million and operating profit of ¥95 million. They derived mainly from assistance to invested companies and proceeds from sale of equities.

During the six months ended September 30, 2021, the Group sold its entire equity interest in JTB Benefit Service, inc. With regard to new investment, during the first six months ended September 30, 2021, the Group invested in Wellness Communications Corporation, which conducts health management SaaS and other businesses in the area of corporate wellness though ITOCHU Corporation's network. Furthermore, during the first nine months ended December 31, 2021, the Group made investment in PROGRIT Inc., which offers English learning and coaching services.

1. Explanation of Financial Position (Assets)
   Total assets as of December 31, 2021 stood at ¥13,052 million (up ¥2,768 million from the end of the previous fiscal

year). This was mainly attributable to an increase in cash and deposits (up ¥1,564 million from the end of the previous fiscal year) and an increase in operational investment securities (up ¥515 million from the end of the previous fiscal year).

(Liabilities)

Liabilities as of December 31, 2021 totaled ¥3,415 million (down ¥1,405 million from the end of the previous fiscal year). This was mainly attributable to a decrease in short-term borrowings (down ¥1,600 million from the end of the previous fiscal year).

(Net assets)

Total assets as of December 31, 2021 stood at ¥9,636 million (up ¥4,174 million from the end of the previous fiscal year). This mainly reflected increases in share capital and capital surplus (each up ¥1,778 million from the end of the previous fiscal year) due to the impact of a third-party allocation of shares.

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SIGMAXYZ Holdings Inc. (6088) Financial Results for the Nine Months Ended December 31, 2021

(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements

The Company has revised its consolidated earnings forecasts announced on April 22, 2021. For details, please refer to the "Notice Concerning Revisions to Earnings and Dividend Forecasts" announced on February 7, 2022 (Japanese Only).

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