Bellsystem24 Holdings, Inc.TSE: 6183

Supplementary Materials for the Financial Results for Quarter Two of the Fiscal Year Ending Feb. 2025

· Issued by Bellsystem24 Holdings, Inc.

Supplementary Materials for

the Financial Results for Quarter Two of the Fiscal Year Ending Feb. 2025

(March 2024 - August 2024)

Creating Better Communities through Communication

BELLSYSTEM24 HOLDINGS, INC.

October 9, 2024

Securities code: 6183

© BELLSYSTEM24 HOLDINGS, INC.

1 Q2 of FY Ending Feb. 2025 Financial Results

© BELLSYSTEM24 HOLDINGS, INC.

2

Q2 of FY Ending Feb. 2025 Result Summary

Both revenue and operating profit fell from the same period in the previous year due to the continued effect of a decrease in business related to national policy matters including COVID-19.

Revenue

Operating profit

Profit attributable to

owners of parent

72.0 billion yen

4.8 billion yen

3.0 billion yen

Same period YoY

Same period YoY

Same period YoY

-4.64 billion yen

-1.72 billion yen

-1.48 billion yen

(-6.1%)

(-26.3%)

(-32.8%)

78.29

76.68

72.04

8.18

5.23

4.50

6.53

4.81

3.02

Q2 of FY2022 Q2 of FY2023 Q2 of FY2024

Q2 of FY2022 Q2 of FY2023 Q2 of FY2024

Q2 of FY2022 Q2 of FY2023 Q2 of FY2024

© BELLSYSTEM24 HOLDINGS, INC.

3

Overview of Consolidated Statement of Income for Q2 of FY Ending Feb. 2025

(Unit: billions of yen)

FY2023 Q2

Q2 of

FY2024

Same

period YoY

YoY

Change

Same

period YoY

YoY

Percent

Change

Consolidate

  1. Earnings Forecast

(Planned)

Progress

rate

Revenue

76.68

72.04

-4.64

-6.1%

153.00

47.1%

Fundamental business

70.32

70.51

+0.19

+0.3%

149.30

47.2%

Business related to COVID-19

6.01

1.31

-4.70

-78.2%

3.00

43.6%

Other

0.35

0.22

-0.13

-37.1%

0.70

31.1%

Gross profit

14.12

12.73

-1.39

-9.8%

29.80

42.7%

Selling, general and administrative

-8.48

-7.98

+0.50

-5.9%

-17.30

expenses

Other income (expenses)

0.89

0.05

-0.84

-93.9%

0.00

Operating profit

6.53

4.81

-1.72

-26.3%

12.50

38.5%

Operating profit ratio

8.5%

6.7%

8.2%

Share of profit (loss) of investments

0.07

0.05

-0.02

-28.6%

12.50

accounted for using equity method

Financial income/costs

-0.18

-0.20

-0.02

+11.1%

-0.44

Profit attributable to owners of

4.50

3.02

-1.48

-32.8%

8.00

37.8%

parent

© BELLSYSTEM24 HOLDINGS, INC.

4

Analysis of Change in Revenue for Q2 of FY Ending Feb. 2025

Revenue stood at 72.04 billion yen, down 4.64 billion yen, or 6.1%, from 76.68 billion yen in the previous fiscal year.

Revenue from fundamental business showed a slight increase of 0.19 billion yen or 0.3% year on year.

  • The overall increase was small, reflecting the effect of a decrease in large-scale projects, despite an increase in new projects.

Business related to national policy matters including COVID-19 decreased 4.70 billion yen, or 78.2%, year on year.

  • Business related to COVID-19 was almost completed, while business related to other national policy matters (benefit payments, etc.) increased from the same period in the previous fiscal year.

Fundame

Business related to

ntal

COVID-19 and other

Other

76.68

business

national policies

+0.19

-4.70

(Unit: billions of yen)

-0.1372.04

-4.64

(-6.1%)

Q2 of FY2023

Q2 of FY2024

Revenue

Revenue

© BELLSYSTEM24 HOLDINGS, INC.

5

Analysis of Change in Operating Profit for Q2 of FY Ending Feb. 2025

Operating profit reached 4.81 billion yen, down 1.72 billion yen or 26.3% year on year. Gross profit fell 1.39 billion yen year on year.

  • The decline is largely attributable to decreased revenue from high-revenue business related to national policy matters such as COVID-19.
  • Fundamental business showed only a slight increase and its impact on gross profit was limited.

Selling, general and administrative expenses decreased 0.50 billion yen year on year (positive factor).

  • The decline reflects lower indirect personnel expenses due to the appropriate allocation of human resources and the reduction of a broad range of expenses including advertising and equipment-related expenses.

Gross profit

SG&A expenses

Gains related to

Other income

(Unit: billions of yen)

step-by-step acquisition

(expenses)

6.53

Gains due to a change in the

excluding gains related to step-

classification of a subsidiary in

by-step acquisition

Vietnam from an equity method

-1.39

affiliate to a consolidated

subsidiary (previous fiscal year)

+0.50

-0.84

-0.00

4.81

-1.72

(-26.3%)

Q2 of FY2023

Q2 of FY2024

Operating profit

Operating profit

© BELLSYSTEM24 HOLDINGS, INC.

6

Analysis of Change in Profit for Q2 of FY Ending Feb. 2025

Profit reached 3.02 billion yen, down 1.48 billion yen or 32.8% year on year.

The share of profit of investments accounted for using the equity method decreased slightly year on year.

  • The share of profit of investments in TB Next Communications Co., Ltd. and Thai-based True Touch decreased slightly year on year.

Share of profit (loss)

Operating

of investments

Financial

Income tax

Non-

(Unit: billions of yen)

profit

accounted for using

income/costs

expense

4.50

equity method

-1.72

-0.02

-0.02

+0.24

  • TB Next Communications Co., Ltd. (JV with Toppan: Interest of 49.0%)
  • True Touch Co., Ltd. (Thailand: Interest of 49.9%)

-1.48

(-32.8%)

controlling

interests

+0.04 3.02

Q2 of FY2023

Q2 of FY2024

Profit

Profit

※ Profit refers to profit attributable to owners of parent.

© BELLSYSTEM24 HOLDINGS, INC.

7

Trends in Revenue by Client Industry in Q2 of FY Ending Feb. 2025

A breakdown of fundamental business revenue by client industry shows an increase in Finance/Insurance but a decrease in Transportation/Communications, Wholesale/Retail and others

compared to Q2 of the previous fiscal year.

(Unit: billions of yen)

Services

(Human resources placement, Internet services, broadcasting, electric money, code payment, point rewards service, etc.)

Revenue remained almost unchanged from Q2 of the previous fiscal year, partly due to an increase in new projects, despite a decrease in large-scale projects involving human resources placement and Internet-

related services.

31.6

33.8

29.5

8.1

8.6

8.1

8.1

16.6

7.4

8.3

8.2

7.5

9.3

8.4

FY2021

FY2022

FY2023

FY2024

Transportation/Communications

(Communication carriers, providers, travel,

transportation, etc.)

Revenue from communication carriers declined mainly in terms of services for individual customers.

32.2

32.3

30.6

8.0

7.5

8.0

7.3

14.9

8.0

7.6

7.1

8.4

8.3

7.8

FY2021

FY2022

FY2023

FY2024

Finance/Insurance

(Banking, securities, life and non-life insurance,

credit cards, etc.)

Revenue related to life and non-life insurance remained strong, increasing compared to Q2 of the previous fiscal year. This more than offset the decrease due to the absence of large spot transactions in Q1.

20.6

22.2

24.0

6.2

5.5

13.1

5.9

5.7

6.2

5.6

6.0

6.9

5.4

5.9

FY2021

FY2022

FY2023

FY2024

Wholesale/Retail

(Mail-order sales, e-commerce, product sales

services, etc.)

Overall, revenue fell compared to Q2 of the previous fiscal year, despite an increase in mail-order sales and e-commerce related to health food.

19.0 18.7 17.5

4.4 4.2

Manufacturing

(Manufacturers, food manufacturing, printing,

medical care and pharmaceuticals, etc.)

Revenue decreased mainly due to a reduction of business handling inquiries related to electricity rate increases. However, medical care and pharmaceuticals remained firm.

Other

(Local government, electricity, gas, water,

housing, real estate, etc.)

Revenue from digital transformation support business related to local governments and new energy service business steadily increased.

4.7 4.4 8.3

4.8 4.5 4.1

4.8 4.4 4.2

FY2021 FY2022 FY2023 FY2024

8.3

9.0

8.3

6.6

6.8

7.0

2.4

1.9

2.3

1.9

3.8

1.8

1.7

4.0

2.3

2.2

1.7

1.7

1.9

1.9

1.5

1.8

2.3

2.0

1.9

1.8

1.9

2.0

FY2021

FY2022

FY2023

FY2024

FY2021

FY2022

FY2023

FY2024

* Breakdown by industry of BELLSYSTEM24’s non-consolidated revenue in the fundamental business from its top 300 clients

© BELLSYSTEM24 HOLDINGS,INC.

8

ITOCHU Synergy in Q2 of FY Ending Feb. 2025

Revenue based on ITOCHU Synergy decreased to 7.61 billion yen (down 0.75 billion yen or 9.0% year on year).

- Revenue decreased year on year mainly due to the completion of business under some large-scale contracts.

Revenue based on ITOCHU Synergy

16.99

14.45

15.16

4.40

13.17

3.66

3.61

3.48

3.75

4.35

3.56

3.44

3.63

3.74

4.12

4Q

3.25

3Q

2Q

3.00

3.65

4.01

4.12

1Q

(Unit: billions of yen)

16.03

3.84

3.84

8.36

7.61

3.96

3.68

4.40

3.93

FY2019

FY2020

FY2021

FY2022

FY2023

FY2024

© BELLSYSTEM24 HOLDINGS, INC.

9

Overview of Consolidated Statement of Financial

Position for Q2 of FY Ending Feb. 2025

(Unit: billions of yen)

Current assets

End of Feb.

2024

28.30

End of Aug.

2024

29.56

YoY Change

+1.27

Remarks

Cash and cash equivalents Trade receivables

7.21

19.20

9.04

18.56

+1.82 -0.64

Non-current assets

147.17

143.77

-3.40

Property, plant and equipment

8.45

7.92

-0.53

(excluding right-of-use assets)

Right-of-use assets

27.38

24.26

-3.12

Goodwill

96.77

96.72

-0.05

Total assets

175.47

173.33

-2.13

Current liabilities

48.60

57.59

+8.99

Borrowings

23.00

28.30

+5.30

Increase due to reclassification from long-term

borrowings, etc.

Non-current liabilities

Long-term borrowings

Other long-term financial liabilities

59.13

33.23

21.85

47.57

24.74

19.12

-11.56

-8.49-2.73

Decrease due to reclassification to current portion and scheduled payment

Equity

67.74

68.18

+0.44

Of which, shareholders’ equity

66.73

67.29

+0.56

Increase due to profit, decrease due to

dividends

Of which, non-controlling interest

1.01

0.89

-0.12

Decreased due mainly to dividends from

subsidiaries

Total liabilities and equity

175.47

173.30

-2.17

Ratio of shareholders’ equity to total

38.0%

38.8%

0.8%

assets

Net interest-bearing debt

49.02

44.00

-5.02

Net DER

0.73 times

0.65 times

-0.08

© BELLSYSTEM24 HOLDINGS, INC.

10

Company analysis

Earlier from Bellsystem24

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