SIGMAXYZ : Consolidated Financial Results for the First Six 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 Six Months of the Fiscal Year Ending March 31, 2022

(Japanese Accounting Standards)

		November 4, 2021
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: November 4, 2021

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 Six Months Ended September 30, 2021 (from April 1, 2021 to September 30, 2021)

(1) Consolidated Operating Results (Cumulative)				(% figures indicate year-on-year changes)
		Revenue		Operating Profit	Ordinary Profit	Profit Attributable to
			Owners of Parent
Six months ended		Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen	%
September 30, 2021		7,274		7.8	1,112		81.6	1,102		74.8	592	61.8
September 30, 2020		6,747		(13.2)	612		(37.6)	630		(36.9)	366	(40.6)
Note: Comprehensive Income		Six months ended September 30, 2021: ¥592 million [61.8%]
		Six months ended September 30, 2020: ¥366 million [(40.6)%]
		Profit per Share	Profit per Share
		(Diluted)
Six months ended				Yen			Yen
September 30, 2021				28.55			-
September 30, 2020				19.09			19.06

Note: Profit per share (diluted) for the six months ended September 30, 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

September 30, 2021

12,805

9,660

75.4

452.55

March 31, 2021

10,283

5,462

53.1

287.61

Reference: Equity

As of September

30, 2021:

¥9,660 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

－

24.00

24.00

(Forecast)

Note: Revisions to the most recently announced dividend forecast: None

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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	2,500	43.0	2,500	39.1	1,500	24.0		71.23
March 31, 2022
Note: Revisions to	the most recently	announced earnings forecasts: None

• 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 (4) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 8 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 September 30, 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 September 30, 2021		1,808,097 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)
	Six months ended September 30, 2021		20,771,706 shares
	Six months ended September 30, 2020		19,197,030 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 Six Months Ended September 30, 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
	(Six months ended September 30, 2020 and 2021)	5
	Quarterly Consolidated Statement of Comprehensive Income
	(Six months ended September 30, 2020 and 2021)	6
(3)	Quarterly Consolidated Statement of Cash Flows	7
(4)	Notes to Quarterly Consolidated Financial Statements	8
	(Notes Regarding Assumption of a Going Concern)	8
	(Notes on Significant Changes in the Amount of Shareholders' Equity)	8
	(Changes in Accounting Policies)	9
	(Segment Information, etc.)	9

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SIGMAXYZ Holdings Inc. (6088) Financial Results for the Six Months Ended September 30, 2021

1. Qualitative Information on Quarterly Financial Results

1. Explanation of Operating Results

Recently, the Japanese economy has continued to show signs of picking up from the challenging conditions persisted due to the fallout of the novel coronavirus (COVID-19) pandemic although the pick-up is slowing down. We expect the economy to recover down the road due to the promotion of vaccinations, various policies and improvement of overseas economies. However, we need to closely watch the increasing risk of economic deterioration caused by developments of the COVID-19 pandemic at home and abroad and its impact through supply chains, as well as the impact of fluctuations, etc. 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. Furthermore, a capital and business alliance with ITOCHU Corporation was concluded in April 2021. Based on the alliance, collaboration with ITOCHU and its group companies has commenced in each business domain.

The consolidated financial results and key business indicators for the six months ended September 30, 2021 are as follows.

Revenue was ¥7,274 million (up 7.8% year on year). Some projects to support client companies contributed to the Group's business performance. Such projects include services to assist ERP cloud migration services, formulation of digital transformation strategies for companies, revitalization of organizations and personnel, and development of new businesses and services. Reducing outsourcing costs by strengthening the internal delivery system for ERP cloud migration services projects resulted in an improvement in profit margin. In addition, SIGMAXYZ Investment Inc., which was newly established in April 2021, also commenced business successfully and has already made new investments and divesture of assets. In September 2021, we made 5% equity participation in Wellness Communications Corporation which is engaged in health management SaaS business in the corporate wellness field.

Selling, general and administrative expenses were ¥2,099 million (up 5.9% 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 ¥616 million to ¥3,211 million (up 23.8% year on year), operating profit increased by ¥499 million to ¥1,112 million (up 81.6% year on year), and ordinary profit increased by ¥471 million to ¥1,102 million (up 74.8% year on year).

Profit attributable to owners of parent came to ¥592 million (up 61.8% year on year).

On the hiring front, the Company added 4 mid-career recruits and 50 new graduates in the six months ended September 30, 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. As of September 30, 2021, the total number of employees was 571 (up 6 year on year) including 501 consultants.

Project satisfaction remained high at 93 points, and the number of projects was 571, while the number of clients was 142.

1. Explanation of Financial Position (Assets)
   Total assets as of September 30, 2021 stood at ¥12,805 million (up ¥2,521 million from the end of the previous fiscal

year). This was mainly attributable to an increase in cash and deposits (up ¥2,222 million from the end of the previous fiscal year) and an increase in operational investment securities (up ¥382 million from the end of the previous fiscal year).

(Liabilities)

Liabilities as of September 30, 2021 totaled ¥3,144 million (down ¥1,676 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 September 30, 2021 stood at ¥9,660 million (up ¥4,197 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 Six Months Ended September 30, 2021

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

The consolidated earnings forecasts for the fiscal year ending March 31, 2022 have not changed from the forecasts included in "Consolidated Financial Results for the Fiscal Year Ended March 31, 2021," released on April 22, 2021.

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