T Gaia : Full version of Consolidated Financial Results for the Fiscal Year Ending March 31, 2021

Consolidated Financial Results for the Fiscal Year Ended March 31, 2021

(Based on J-GAAP)

			May 7, 2021
Company name:	T-Gaia Corp.	Listing:	Tokyo Stock Exchange, First Section
Stock code:	3738	URL:	https://www.t-gaia.co.jp/
Representative:	Nobutaka Kanaji, President & CEO
Contact:	Kaoru Hayashi, Managing Officer & General Manager of Corporate Planning & Strategy Dept.
	Tel: [phone]

Scheduled date of Annual General Meeting of Shareholders: June 18, 2021

Scheduled date of filing Securities Report: June 18, 2021

Scheduled commencement date of dividend payout: June 21, 2021

Financial results supplementary explanatory documents: Yes

Financial results presentation: Yes (for institutional investors & analysts)

(All amounts are rounded down to the nearest million yen)

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

(1) Consolidated results of operations (twelve months)			(Percentages represent year-over-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of the parent
	Million yen		%	Million yen	%	Million yen	%	Million yen	%
FY 2021	450,863		(4.9)	14,050	2.4	19,801	3.2	13,042	3.3
FY 2020	474,150		(10.0)	13,726	(10.8)	19,194	(6.8)	12,628	(8.8)

(Note) Comprehensive income (million yen): FY 2021: 13,197 / 5.1%	FY 2020: 12,555 / (9.4%)
		Diluted earnings		Ratio of ordinary	Ratio of operating
	Earnings per share	Return on Equity	profit to total
		per share		assets	profit to net sales
	Yen	Yen	%	%	%
FY 2021	234.01	-	21.9	9.5	3.1
FY 2020	226.59	-	24.8	10.7	2.9

(Reference) Equity Gains of Affiliated Companies (million yen): FY 2021: (540) FY2020: 41

(2) Consolidated financial position

					Total assets		Net assets		Equity ratio		Net assets per share
					Million yen			Million yen			%		Yen
	FY 2021					233.826			64.026			27.4		1,148.26
	FY 2020					181,378			55,102			30.4		988.23
	(Reference) Shareholders' equity (million yen): FY 2021: 63,998 FY 2020: 55,076
(3) Consolidated cash flow position
					Cash flows from	Cash flow from investing		Cash flows from		Cash & cash equivalents
				operating activities		activities		financing activities		of the period
					Million yen			Million yen			Million yen		Million yen
	FY 2021					19,338			(32,711)			17,849		47,601
	FY 2020					30,998			(4,642)			(8,868)		43,125
	2. Dividends
					Annual dividends		Total dividend	Dividend	Dividend on equity
						payout ratio
													annual	consolidate
													consolidate
		1Q-end	Interim		3Q-end		Year-end	Annual
			Yen	Yen		Yen		Yen	Yen		Million yen	%	%
	FY 2020			-	37.50		-		37.50	75.00		4,179	33.1	8.2
	FY 2021			-	37.50		-		37.50	75.00		4,179	32.1	7.0
	FY 2022			-	37.50		-		37.50	75.00				34.8
	(forecasts)

3. Consolidated forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Percentages represent year-over-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings per
		owners of the parent	share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	453,000		0.5	13,400	(4.6)	18,400	(7.1)	12,000	(8.0)	215.30

Note 1: Consolidated forecasts for the First half of FY 2022 have not been disclosed.

Note 2: As the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29), etc. are applied from the beginning of the FY 2022, the above consolidated forecasts are the amount after the application of these standards.

If the percentage of year-on-year change in net sales is the change from FY 2021 prior to the adoption of this standard, it increases 7.1%

Notes

1. Changes in significant subsidiaries during the consolidated period (twelve months) under review (changes in subsidiaries accompanying change in the scope of consolidation): None
2. Changes in accounting principles, estimates and restatements
3. 1. Changes in accounting principles caused by revision of accounting standards: None
   2. Changes in accounting principles other than those mentioned above: None
   3. Changes in accounting estimates: None
   4. Restatement: None

(4) Number of shares issued and outstanding (shares of common stock)

• 1. Number of shares outstanding (including treasury shares) at the end of the period
  2. Number of treasury stock at the end of the period
  3. Average number of shares outstanding during the period (twelve months)
• Implementation of quarterly review procedures

FY 2021	56,074,000 shares	FY 2020	56,074,000 shares
FY 2021	338,866 shares	FY 2020	341,827 shares
FY 2021	55,734,177 shares	FY 2020	55,730,993 shares

The consolidated financial statement is not subject to audit procedures pursuant to the Financial Instruments and Exchange Act. At the time of disclosure of the consolidated financial statement, the audit procedures of consolidated financial statements pursuant to the FIEA are already completed

• Cautionary statement with respect to forward-looking statements
  (Disclaimer on forward-looking statements)
  These materials contain forward-looking information including earnings projections based on information currently available to the Company and certain assumptions considered reasonable in the judgment of the Company. Nothing contained in these materials is meant to suggest that the Company promises to attain the said projections. Moreover, due to various factors, actual results may materially differ from projections.

(Concerning financial results supplementary explanatory documents and financial results presentation)

The financial results on- line presentation for investment institute and analysists is scheduled on May 7, 2021. Financial results supplementary explanatory documents will be posted in Japanese on the same day.

*English version of Financial results supplementary explanatory documents will be posted on the English site for Investors of T-Gaia Corporation within days.

*English Account title is based on Account List available at website of Financial Service Agency.

Disclaimer: these financial statements have been prepared in accordance with generally accepted accounting principles in Japan. This English translation is prepared for the reader's convenience. When there are any discrepancies between

the original Japanese version and English translation version, the original Japanese version always prevails.

T-Gaia Corporation (3738) / Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (Twelve Months Ended March 31, 2021) (Based on J-GAAP)

• Attachment: Table of Contents

1. Summary of Results of Operations................................................................................................................................................	2
(1)	Summary of results of operations for the current fiscal year ...................................................................................................	2
(2)	Summary of financial position for the current fiscal year ........................................................................................................	4
(3)	Summary of cash flows for the current fiscal year...................................................................................................................	5
(4)	Outlook ....................................................................................................................................................................................	6
(5)	Basic profit allocation policy, and dividends in the current and next fiscal years....................................................................	7
2. Fundamental Concepts Concerning the Choice of Accounting Standards.....................................................................................	7
3. Consolidated Financial Statements and Essential Notes................................................................................................................	8
(1)	Consolidated Balance Sheets ...................................................................................................................................................	8
(2)	Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .............................................	10
	Consolidated Statements of Income ................................................................................................................................	10
	Consolidated Statements of Comprehensive Income.......................................................................................................	10
(3)	Consolidated Statements of Changes in Shareholders' Equity ..............................................................................................	11
(4)	Consolidated Statements of Cash Flows ................................................................................................................................	13
(5)	Notes to Consolidated Financial Statements ..........................................................................................................................	14
	(Notes on the going-concern assumption) ...........................................................................................................................	14
	(Changes in Presentation)....................................................................................................................................................	14
	(Consolidated Statements of Income)..................................................................................................................................	14
	(Segment information).........................................................................................................................................................	15
	(Per Share Information) .......................................................................................................................................................	18
	(Significant subsequent events) ...........................................................................................................................................	18
4. Others ..........................................................................................................................................................................................	19
	Transfers of directors...........................................................................................................................................................	19

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T-Gaia Corporation (3738) / Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (Twelve Months Ended March 31, 2021) (Based on J-GAAP)

1. Summary of Results of Operations

(1) Summary of results of operations for the current fiscal year

In the period under review (April 2020 to March 2021), the Japanese economy continued to face difficult conditions due to the impact from the spread of the COVID-19 infection. The risk of it on socioeconomic activities will cause a downturn in the domestic and overseas economies and fluctuations in financial and capital markets needs to continue to be taken into consideration.

In the market for mobile phone handsets, which is the main business field of the Group (the Company, its consolidated subsidiaries, and its equity-method affiliates), in response to the spread of COVID-19, the first state of emergency was declared in April 2020, and measures such as shortened hours of operation and closure of shops were taken and the services available at carrier shops were limited. Subsequently, with the lifting of the declaration, shops gradually returned to normal operations from June 2020.

Under the second declaration of a state of emergency issued in January 2021, we were not one of the businesses subject to shortened business hours, temporary closure, etc., and the impact on our business performance was minimal. We will continue to take measures against COVID-19, such as an advance reservation system, to ensure that customers can visit our shops with peace of mind.

On the other hand, telecommunications carriers have been focusing on maintaining and expanding their customer bases over the long term through efforts such as supplementing their service offerings with enhanced point schemes, service contents and mobile payments. In September 2020, commercial 5G (5th-generation mobile communication system) services were launched by various telecommunication carriers, and in December 2020, NTT DOCOMO, INC. was converted into a wholly owned subsidiary by Nippon Telegraph and Telephone Corporation. In addition, we continue to experience significant changes in the competitive environment, with the launch of revised rate plans and online-only plans for services in response to the government's request for further telecommunications fee reductions.

In this business environment, on November 2, 2020, the Company acquired all of the shares of Personals Mobile Business Split Preparation Co., Ltd. (trade name changed to TF Mobile Solutions Corporation on the same day; below, "TFM"), the successor to the mobile phone sales business of Fujitsu Personal System Limited, making it a consolidated subsidiary. Furthermore, the Company merged with TFM as of the effective date of February 1, 2021. We will strive to maintain No. 1 position in the industry, and improve the sophistication of services and productivity.

Sales of mobile handsets, etc. (below, "unit sales") during the period under review at the Group posted 3,570,000 units, marking a decline from the year-earlier period. From the third quarter (October to December 2020) onward, although the acquisition of TFM as a subsidiary contributed to the upward trend in unit sales, this was not enough to offset the impact of the decline in unit sales in the first quarter (April to June 2020) due to the spread of COVID-19 infection.

Although net sales were affected by a decrease in the number of unit sales and a decline in the average selling price of mobile handsets compared to the same period of the previous year, gross profit and profits at each level increased from the previous fiscal year due to the strong performance of the Enterprise Solutions Business Segment and the Payment Service Business and Other Business Segment.

As a result, consolidated results for the period under review marked net sales of 450,863 million yen (-4.9% compared with the year-earlier period), with operating profit of 14,050 million yen (+2.4%).

Ordinary profit marked 19,801 million yen (+3.2%) including 5,926 million yen (+10.4%) in income from hoarded cards recognized in non-operating income. Profit attributable to owners of parent posted 13,042 million yen (+3.3%).

Results by business segment for the period under review are described below.

				(Millions of yen)
	Mobile	Enterprise Solutions	Payment Service
	Telecommunications	Business and Other	Total
	Business Segment
	Business Segment	Business Segment
Net sales	355,468	32,345	63,050	450,863
	(9.1%)	7.3%	18.9%	(4.9%)
Profit attributable to	7,326	1,935	3,780	13,042
owners of parent	(6.3%)	9.1%	24.5%	3.3%
Supplementary	10,986	3,354	(289)	14,050
information -	(5.8%)	19.2%	61.6%	2.4%
Operating profit
(loss)

* Percentages refer to year-over-year changes

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T-Gaia Corporation (3738) / Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (Twelve Months Ended March 31, 2021) (Based on J-GAAP)

[Mobile Telecommunications Business Segment]

In Mobile Telecommunications Business Segment, although unit sales decreased from the previous fiscal year for the reasons mentioned above, the market was revitalized in the fourth quarter (January to March 2021) due to the announcement of revised rate plans by telecommunication carriers. Integration synergies are also beginning to be realized, as the newly added shops as a result of making TFM a subsidiary have started to sell the Company's original commercial products.

In addition, it was possible to minimize the impact on profit thanks to the receipt of financial support from telecommunications carriers related to COVID-19 countermeasures during the first quarter of the current fiscal year and to the control of selling, general and administrative expenses throughout the fiscal year.

As a result, net sales marked 355,468 million yen (-9.1% compared with the year-earlier period), with profit attributable to owners of parent of 7,326 million yen (-6.3%).

[Enterprise Solutions Business Segment]

In mobile solutions for enterprise clients' business, unit sales increased significantly from the previous fiscal year, due in part to the acquisition of TFM as a subsidiary. In addition to the tailwind of ICT investment due to reforms in working styles and the spread of COVID-19 has caused companies to move forward with the introduction of telework. The Group has continued to respond to the social needs that have emerged as a result of the companies adopting ICT through measures such as strengthening its Life Cycle Management operations revolving around device life cycle management spanning the width from procurement, propositions, and introduction support for smart devices including PCs, to environment building, maintenance, operations, and updating services.

In products related to fixed-line telecommunications, the Company has continued to work to improve the quality of support for resale wholesalers and clients for the Company's own "TG Hikari" fiber-optics access service and improve business efficiency through system introduction. Therefore, the cumulative number of enterprise client lines continued to steadily increase.

On the other hand, a one-time loss was recorded at equity-method affiliates.

As a result, net sales marked 32,345 million yen (+7.3% compared with the year-earlier period) and profit attributable to owners of parent of 1,935 million yen (+9.1%).

[Payment Service Business and Other Business Segment]

In Payment Service Business and Other Business Segment, the demand for a variety of digital content, including games, music, and video streaming, continued to be strong due to an increase in the amount of time spent at home, and trading in related gift cards and PIN merchandise increased from the previous fiscal year. In addition, sales of earphones, microphones and USB cables necessary for remote work continued to be strong at convenience stores, one of the Company's sales channels.

With respect to other new business, we continued to work on new formats to deal with COVID-19, including the opening of an online ICT school for elementary school students and the hosting of online events for the e-sports business.

In the overseas payment service business, the gift card business and house card business in Singapore have been steady. The Company is continuing to prepare for its entry into Vietnam.

At the consolidated subsidiary, QUO CARD Co., Ltd., issuance of QUO Card increased from the previous fiscal year. This was the result of a continued large number of adoptions of QUO Card and QUO Card Pay, mainly by local governments to support healthcare workers. QUO CARD Co., Ltd. is steadily expanding member stores for the QUO Card Pay service, mainly in new business categories such as restaurants, drug stores, and clothing stores.

As a result, net sales marked 63,050 million yen (+18.9% compared with the year-earlier period) and profit attributable to owners of parent of 3,780 million yen (+24.5%).

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