Feedforce : Financial Results for Q1 of the fiscal year ending May 2022

About this update from Feedforce Group Inc.

English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. Consolidated Financial Results for the Three Months Ended August 31, 2021 [Japanese GAAP] September 30, 2021 Company name: Feedforce Group Inc ． Listing: Tokyo Stock Exchange Securities code: 7068 URL: https://feedforcegroup.jp Representative: Representative Director and President Koji Tsukada Inquiries: Director,Corporate Team Manager Shingo Nishiyama TEL +81-3-5846-7016 Scheduled date to file quarterly securities report: October 15, 2021 Scheduled date to commence dividend payment: － Preparation of supplementary materials on financial results: Yes Holding of financial results meeting: Yes (Amounts less than one million yen are rounded down) 1. Consolidated financial results for the first three months of the fiscal year ending May 31, 2021(from June 1, 2021 to August 31, 2021) (1) Consolidated operating results (Percentages indicate year-on-year changes.) Net sales EBITDA Operating profit Ordinary profit Profit attributable to owners of parent Three months ended Millions of yen ％ Millions of yen ％ Millions of yen ％ Millions of yen ％ Millions of yen ％ August 31, 2021 672 － 293 72.7 250 95.7 251 108.9 154 454.1 August 31, 2020 551 － 169 － 128 － 120 － 27 － Note: Comprehensive income Three months ended August 31, 2021: ¥153 million [164.2%] Three months ended August 31, 2020: ¥ 58 million [-%] Basic earnings Diluted earnings per share per share Three months ended Yen Yen August 31, 2021 5.95 5.79 August 31, 2020 1.23 1.17 Note: 1. As the Company has not prepared consolidated financial statements for the three months ended August 31, 2019, the percentage indicating year-on-year changes is not shown for the three months ended August 31, 2020. As the "Accounting Standard for Revenue Recognition" will be applied from the fiscal year ending May 31, 2022, the percentage change from the previous fiscal year is not shown for net sales. EBITDA is a sum of operating profit, depreciation, and amortization of goodwill. The Company conducted a 4-for-1 stock split of common stocks as of December 1, 2020. The "Earnings per share" and "Diluted earnings per share" is calculated assuming that the said stock split was conducted at the beginning of the previous consolidated fiscal year. Consolidated financial position Total assets Net assets Equity-to-asset ratio As of Millions of yen Millions of yen Millions of yen August 31, 2021 6,203 2,568 40.7 May 31, 2021 6,467 2,401 36.6 Reference: Equity As of August 31, 2021: ¥2,523 million As of May 31, 2021: ¥2,366 million - 1 - English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. 2. Cash dividends Annual dividends First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Fiscal year ended － 0.00 － 0.00 0.00 May 30, 2021 Fiscal year ended － May 30, 2022 Fiscal year ended May 30, 0.00 － 0.00 0.00 2021(Forecast) Note: Revisions to the forecast of cash dividends most recently announced: None 3. Consolidated earnings forecasts for the fiscal year ending May 31, 2022 (from June 1, 2021 to May 31, 2022) (Percentages represent year-on-year changes) Profit attributable to Basic Net sales EBITDA Operating profit Ordinary profit earnings owners of parent per share Millions of yen ％ Millions of yen ％ Millions of yen ％ Millions of yen ％ Millions of yen ％ Yen Six months ending 1,415 － 565 41.7 478 51.7 474 55.1 295 113.0 11.39 November 30, 2021 Fiscal year ending 3,047 － 1,266 19.7 1,092 22.8 1,083 23.9 675 42.8 25.98 May 31, 2022 Note: 1. Revisions to the earnings forecasts most recently announced: No Effective from the fiscal year ending May 31, 2022, the "Accounting Standard for Revenue Recognition" will be applied, and the above forecasts are based on figures after the application of the standard.Due to the adoption of this standard, the percentage of net sales increase/decrease from the previous year is not shown. EBITDA is a sum of operating profit, depreciation, and amortization of goodwill. Notes Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation) : None Application of specific accounting for preparing the quarterly consolidated financial statements: None Changes in accounting policies, changes in accounting estimates, and restatement Changes in accounting policies due to revisions to accounting standards and other regulations: Yes Changes in accounting policies due to other reasons: None Changes in accounting estimates: None Restatement: None Number of issued shares (Common shares) a. Total number of issued shares at the end of the period (including treasury shares) As of August 31, 2021 25,947,200 shares May 31, 2021 25,910,400 shares b. Number of treasury shares at the end of the period As of August 31, 2021 42 shares May 31, 2021 42 shares c. Average number of outstanding shares during the period As of August 31, 2021 25,937,897 shares As of August 31, 2020 22,710,217 shares Note: The Company conducted a 4-for-1 stock split of common stocks as of December 1, 2020. The "Average number of outstanding shares" is calculated assuming that the said stock split was conducted at the beginning of the previous consolidated fiscal year. Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation. Proper use of earnings forecasts, and other special matters Forward-looking statements, including the consolidated forecasts stated in these materials, are based on information currently available to the Company and certain assumptions deemed reasonable. Results may differ materially from the consolidated forecasts due to various factors. The Company changed its corporate name from FeedForce, Inc. to FeedForce Group, Inc. as of September 1, 2021, following the transition to a holding company structure. - 2 - English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. Attached Material Index 1. Qualitative information regarding results for the period ………………………………………………………………………………………………….. 4 (1) Explanation of operating results ………………………………………………………………………………………………………………………………. 4 (2) Explanation of financial position ……………………………………………………………………………………………………………………………… 5 (3) Explanation of consolidated financial results forecasts and other forward-looking statements ………………………………………. 5 2. Consolidated financial statements and significant notes thereto ………………………………………………………………………………………. 6 (1) Consolidated balance sheets …………………………………………………………………………………………………………………………………….. 6 (2) Consolidated statement of income and consolidated statement of comprehensive income …………………………………………….. 7 (3) Notes to the consolidated financial statements ………………………………………………………………………………………………………….. 9 Notes on premise of going concern ………………………………………………………………………………………………………………………… 9 Notes on significant changes in the amount of shareholders' equity ………………………………………………………………………….. 9 (Changes in significant subsidiaries during the period under review) ………………………………………………………………………… 9 (Change in accounting policy) ……………………………………………………………………………………………………………………………….. 10 (Segment Information) …………………………………………………………………………………………………………………………………………. 11 (Significant subsequent events) ……………………………………………………………………………………………………………………………… 12 - 3 - English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. 1. Qualitative information regarding results for the period (1) Explanation of operating results During the first three months of the consolidated fiscal year,The Japanese economy remained in a severe situation due to the effects of COVID-19. There are signs of a recovery, but the outlook remains uncertain. On the other hand, the market size of the Internet advertising market, which is our main business domain, increased by 5.9% year-on-year to 2.229 trillion yen in 2020.Although total ad spending is down 11.2% year over year, the Internet advertising market continues to grow, partly due to the acceleration of digital transformation. (Source ： DENTSU INC. "Advertising Expenditures in Japan in 2020". ） Under these economic conditions, our company has been providing information distribution optimization and effective advertising management services under the mission of Our mission is to "Enrich your work. ～ Continue to create innovation in the B2B domain ～ ". By making full use of the vast amount of product and project data we have accumulated to date for building data feeds, as well as our conversion and updating know-how, we have been able to process the information held by companies into an optimal form and provide the right information to the right target users at the right time. In addition, we have established good relationships with each digital platformer. By leveraging this relationship and linking our multiple services, we have strived to provide comprehensive support that not only helps companies develop new customers, but also contributes to strengthening ongoing relationships with users. Feedforce Split Preparation Inc. (The company name was changed to "FeedForce, Inc." on September 1, 2021.) and Social PLUS Inc. were established on June 1, 2021 as wholly owned subsidiaries of the Company in order to shift to a holding company structure as of September 1, 2021. Consequently, results for the first three months of the consolidated fiscal year under review, we recorded net sales of ¥672,558 thousand , EBITDA of ¥293,021 thousand (up 72.7% year on year), operating profit of ¥250,629 thousand (up 95.7% year on year), Ordinary profit of ¥251,125 thousand (up 108.9% year on year) and profit attributable to owners of parent amountingto ¥154,454 thousand (up 454.1% year on year). Results by segment are as follows. (Professional Services) For customers, mainly enterprises, we provide "Anagrams," an Internet advertising management business and marketing support, including listing advertising; "Feedmatic," an advertising management service for platforms, etc.; "DF PLUS," a data feed construction service tailored to individual needs; and "Contents Feeder," an SEO support service that generates and automatically operates satellite sites. During the first quarter of the current fiscal year, unit net sales of existing customers increased for Feedmatic, despite a decrease in the amount of advertising placed for large-scale projects. As a result, net sales totaled ¥503,382 thousand, segment profit totaled ¥227,640 thousand (up 111.3% year on year). (SaaS) We also offer "EC Booster," an ad serving service that can automatically place optimized ads based on product information on EC sites, "dfplus.io," an integrated data feed management service that allows ad staff to create, manage, and optimize data feeds, and "Social PLUS," a service that supports customer reach through web membership registration, login, and direct messaging using SNS information. During the first quarter of the current fiscal year, net sales steadily increased mainly due to the acquisition of new projects and an increase in unit sales prices in "dfplus.io" and "Social PLUS". As a result, net sales totaled ¥166,750 thousand, segment profit totaled ¥62,291 thousand (up 144.2% year on year). (DX) In the DX business, we are developing new services to support corporate DX through "The creation of a foundation for the use of digital assets using technology". During the first quarter of the current fiscal year, we developed and invested in new businesses, such as building Shopify-based sites and developing applications for Shopify. As a result, net sales totaled ¥2,425 thousand, segment loss totaled ¥39,302 thousand (compared to ¥5,187 thousand in the previous fiscal year). - 4 - English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. (2) Explanation of financial position As of August 31, 2021, assets amounted to ¥6,203,227 thousand, down ¥264,280 thousand from their level on May 31, 2021. (Current assets) As of August 31, 2021, current assets amounted to ¥4,597,194 thousand, down ¥318,218 thousand from their level on May 31, 2021. This was primarily due to a decrease of ¥121,927 thousand in cash and deposits, ¥168,151 thousand in accounts receivable - trade, and ¥29,837 thousand in advance payments - trade. (Non-current assets) As of August 31, 2021, non-current assets amounted to ¥1,606,033 thousand, up ¥53,938 thousand from their level on May 31, 2021. This was primarily due to a decrease of ¥11,783 thousand in goodwill and ¥27,350 thousand in customer relationship, while investments and other assets increased by ¥93,337 thousand. (Current liabilities) As of August 31, 2021, current liabilities amounted to ¥1,902,816 thousand, down ¥352,193 thousand from their level on May 31, 2021. This was primarily due to a decrease of ¥94,946 thousand in accounts payable - trade and ¥31,569 thousand in provision for bonuses. (Non-current liabilities) As of August 31, 2021, non-current liabilities amounted to ¥1,731,540 thousand, down ¥79,414 thousand from their level on May 31, 2021. This was primarily due to a increase of ¥5,585 thousand in deferred tax liabilities while long-term borrowings decreased by ¥85,000 thousand. (Net assets) As of August 31, 2021, net assets amounted to ¥2,568,870 thousand, up ¥167,328 thousand from their level on May 31, 2021. This was primarily due to a increase of ¥154,454 thousand in retained earnings and ¥11,599 thousand in share acquisition rights. (3) Explanation of consolidated financial results forecasts and other forward-looking statements The Company has made no changes to the forecast for the fiscal year ending May 31, 2022 that it announced on June 30, 2021. The Group's current consolidated business forecasts are based on information available at the time of this announcement and incorporate as much information as possible.Although the outlook for the impact of the spread of the COVID-19 remains uncertain, the Group's business activities have largely returned to normal, and at this point we believe that there will be no significant impact.In the event that the forecast changes in response to future market trends, it will be disclosed in a timely manner. - 5 - This is an excerpt of the original content. To continue reading it, access the original document here .

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