NS : Consolidated Financial Results From April 1, 2024 to December 31, 2024

Published February 4, 2025 at 7:02 a.m. UTC

Source: MarketScreener

(% indicates changes from the previous corresponding period.)

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 Nine Months Ended December 31, 2024
	(Under IFRS)
	February 4, 2025
Company name:	NS Solutions Corporation
Listing:	Tokyo Stock Exchange, Nagoya Stock Exchange, and Fukuoka Stock Exchange
Securities code:	2327
URL:	https://www.nssol.nipponsteel.com
Representative:	Kazuhiko Tamaoki, Representative Director & President
Inquiries:	Hideki Miyake, Director, Accounting & Finance Department
Telephone:	+81-3-6899-6000

Scheduled date of commencing dividend payments:	-
Preparation of supplementary material on financial results:	Yes
Holding of financial results briefing:	Yes (for analysts)
	(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2024 (April 1, 2024 to December 31, 2024)

(1) Consolidated Operating Results (cumulative)

	Revenue		Operating profit	Profit before tax	Profit attributable to
		owners of parent

Nine months ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
December 31, 2024	240,294	9.2	29,587	27.0	30,270	27.7	20,401	31.8
December 31, 2023	220,119	6.5	23,295	4.4	23,706	4.9	15,483	2.5

	Total comprehensive	Basic earnings	Diluted earnings
	income		per share	per share
Nine months ended	Million yen	%		Yen		Yen
December 31, 2024	35,224	13.9		111.50		-
December 31, 2023	30,923	341.8		84.62		-

(Note) The Company carried out a 2-for-1 stock split of common stock as of July 1, 2024. Basic earnings per share were calculated assuming the stock split had taken place at the beginning of the previous fiscal year.

(2) Consolidated Financial Position

				Ratio of equity
	Total assets	Total equity	Equity attributable	attributable to
	to owners of parent	owners of parent to

				total assets
As of	Million yen	Million yen	Million yen	%
December 31, 2024	392,769	262,482	254,176	64.7
March 31, 2024	374,637	244,783	236,829	63.2

2. Cash Dividends

			Annual dividends

	1st quarter-end	2nd quarter-end		3rd quarter-end	Year-end	Total

	Yen	Yen		Yen	Yen	Yen
Fiscal year ended	-	40.00		-	45.00	85.00
March 31, 2024

Fiscal year ending	-	36.50		-
March 31, 2025

Fiscal year ending					36.50	73.00
March 31, 2025 (Forecast)

(Note 1) Revision to the forecast for dividends announced most recently: None

(Note 2) The Company carried out a 2-for-1 stock split of common stock as of July 1, 2024. The annual dividends per share for the fiscal year ending March 31, 2025 and the fiscal year ending March 31, 2025 (forecast) are based on the amount taking into consideration the stock split. Annual dividends per share for the fiscal year ending March 31, 2025 (forecast) without taking the stock split into account would be 146.00 yen.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2025 (April 1, 2024 to March 31, 2025)

(% indicates changes from the previous corresponding period.)

	Revenue		Operating profit	Profit before tax	Profit attributable	Basic earnings
		to owners of parent	per share

	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	333,000	7.2	39,000	11.4	39,500	11.5	26,500	9.3	144.83

(Note 1) Revision to the financial results forecast announced most recently: None

(Note 2) The Company carried out a 2-for-1 stock split of common stock as of July 1, 2024. Basic earnings per share is based on the amount taking into account the stock split. Basic earnings per share for the fiscal year ending March 31, 2025 without taking into account the stock split would be 289.66 yen.

* Notes:

Significant changes in the scope of consolidation during the period: Yes
Newly included: 1 company (NS Solutions BizTech Corporation)
Excluded: None
(Note) For further details, please see Business combination, etc. under 2. Condensed Quarterly Consolidated Financial Statements and Primary Notes (5) Notes to Condensed Quarterly Consolidated Financial Statements on page 13 of the attached document.
Changes in accounting policies and changes in accounting estimates
1. Changes in accounting policies required by IFRS: None
2. Changes in accounting policies other than 1) above: None
3. Changes in accounting estimates: None
Total number of issued shares (common stock)
1. Total number of issued shares at the end of the period (including treasury shares):

As of December 31, 2024:	183,002,000 shares
As of March 31, 2024:	183,002,000 shares
2) Total number of treasury shares at the end of the period:
As of December 31, 2024:	27,756 shares
As of March 31, 2024:	17,088 shares
3) Average number of shares outstanding during the period:
Nine months ended December 31, 2024:	182,971,745 shares
Nine months ended December 31, 2023:	182,980,544 shares

(Note) The Company carried out a 2-for-1 stock split of common stock as of July 1, 2024. The numbers of shares presented above were calculated assuming the stock split had taken place at the beginning of the previous fiscal year.

Review of the Japanese-language originals of the attached quarterly consolidated financial statements by certified public accountants or an audit firm: None
Proper use of financial results forecast and other notes
- The forecasts stated above are based on information available as of the date of publication of this document. Actual results may differ from these forecasts due to a wide range of factors hereafter.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results	2
(1)	Operating Results	2
(2)	Financial Position	3
(3)	Consolidated Financial Results Forecast and Other Forward-looking Information	5
2. Condensed Quarterly Consolidated Financial Statements and Primary Notes	6
(1)	Condensed Quarterly Consolidated Statements of Financial Position	6
(2)	Condensed Quarterly Consolidated Statements of Profit or Loss and Condensed Quarterly Consolidated
	Statements of Comprehensive Income	8
(3)	Condensed Quarterly Consolidated Statements of Changes in Equity	10
(4)	Condensed Quarterly Consolidated Statements of Cash Flows	12
(5)	Notes to Condensed Quarterly Consolidated Financial Statements	13
	Going concern assumption	13
	Segment information, etc. ....................................................................................................................... 13
	Business combination, etc. ...................................................................................................................... 13

1. Qualitative Information on Quarterly Financial Results

Operating Results Analysis of operating results
The Japanese economy continued to show signs of a mild recovery during the nine months ended December 31, 2024. While close attention should be paid to global situations, including those in the United States, China, and the Middle East, as well as the impact of rising domestic prices, exchange rate fluctuations, and interest rate trends on corporate earnings, domestic companies' earnings have continuously improved. System investment by client companies remained firm, as the need for digital transformation (DX) with the purpose of expanding business and increasing competitiveness continued to be strong.
Based on the Medium-term Business Strategy 2021-2025 published in April 2021, NS Solutions Corporation (hereinafter, the "Company," and the Company and its subsidiaries are collectively referred to as the "Group") is endeavoring to expand our business by capturing customer needs for DX to the greatest extent possible. Furthermore, we are working on formulating a new medium-term management plan (2025-2027) aimed at realizing the NSSOL 2030 Vision published in April 2024, which outlines our aspirations for the Company in 2030.
We have strongly driven our customers' DX through various initiatives. These include expanding "PPMP" (Process-manufacturing Production Management Package), which was created by productizing the production management system introduced at Nippon Steel Corporation, to other manufacturing industries, developing a new, highly secure "Remote Predictive Maintenance System" for globally expanding semiconductor manufacturing equipment manufacturers, and launching "CloudHarbor," which provides comprehensive support for cloud-native transformation. Furthermore, we have expanded our lineup of the virtual desktop service "M³DaaS@absonne" (adding M³DaaS for AVD with Azure Stack HCI) and continue to focus on expanding sales of solutions, including the electronic transaction and contract service "CONTRACTHUB." OSP Solutions Inc., which became our wholly owned subsidiary on October 1, 2024, is providing operation and maintenance services to customers as a member of the Group.
In the AI domain, where the Company has accumulated knowledge, we provide numerous AI solutions, including a solution to connect the AI platforms "Databricks" and "DataRobot," and have launched services to support the installation of "Alli LLM App Market," an AI platform that promotes the utilization of generative AI and improves operational efficiency, in customers' private environments. Moreover, we continue to strengthen our response capabilities in the AI domain, including through collaborations with other companies, such as entering into a partnership agreement with Digital Humans, Inc., which possesses digital human technology, and investing in TRADOM Inc., a company with strengths in AI-powered foreign exchange management solutions.
To promote sustainability management, we have organized our value creation process based on our goals to achieve the purpose of our existence in society, defined five material issues, and are working to address them. To realize "solving social issues through IT," in addition to the above initiatives, we have participated in a research project led by the Ministry of Health, Labour and Welfare, which aims to accelerate the secondary use of medical and other information among medical institutions through the leveraging of data utilization technologies in which we have extensive experience. We also provide "NSDDD Cloud for Government," a cloud service designed to promote the use of public and private sector data by local governments. Furthermore, we continue to support next-generation education through visiting lectures to elementary and junior high schools, including developing content to learn about carbon neutrality in "K3Tunnel," a programming learning site operated by the Company, and conducting demonstration classes in collaboration with local governments. As a result of these efforts, the Company was selected again as an index component of the FTSE4Good Index

Series, FTSE Blossom Japan Index, and FTSE Blossom Japan Sector Relative Index, which are ESG investment benchmarks.

Revenue for the nine months ended December 31, 2024 amounted to 240,294 million yen, an increase of 20,175 million yen compared to 220,119 million yen for the same period of the previous fiscal year. This was due to strong performance mainly in the cloud solutions field and software products, in addition to higher sales in the manufacturing, Nippon Steel Group field and the financial services field. Operating profit amounted to 29,587 million yen, an increase of 6,292 million yen compared to 23,295 million yen for the same period of the previous fiscal year. This was due to increased gross profit resulting from higher revenue and improved gross profit margin, despite a rise in selling, general and administrative expenses as a result of the enhancement of human capital, including recruiting and training, as well as enhanced investments in technology, research and development, and other areas.

An overview of the nine months ended December 31, 2024 by service field (Business Solutions and Consulting & Digital Service) is as follows.

Business Solutions

Revenue for the nine months ended December 31, 2024 amounted to 181,172 million yen, an increase of 16,226 million yen compared to 164,946 million yen for the same period of the previous fiscal year, mainly due to higher sales to Nippon Steel Corporation and in the manufacturing and financial services fields.

Consulting & Digital Service

Revenue for the nine months ended December 31, 2024 amounted to 59,121 million yen, an increase of 3,948 million yen compared to 55,172 million yen for the same period of the previous fiscal year, owing to favorable sales in the cloud solutions field and software products.

Financial Position

Analysis of financial position
Total assets at the end of the nine months ended December 31, 2024 amounted to 392,769 million yen, an increase of 18,132 million yen compared to 374,637 million yen at the end of the previous fiscal year. This was mainly due to increases of 79,068 million yen in cash and cash equivalents and 9,384 million yen in contract assets, partly offset by decreases of 52,792 million yen in other financial assets (non-current assets) and 18,321 million yen in trade and other receivables.
Total liabilities at the end of the nine months ended December 31, 2024 amounted to 130,287 million yen, an increase of 434 million yen compared to 129,853 million yen at the end of the previous fiscal year. This was mainly due to an increase of 18,947 million yen in income taxes payable, partly offset by decreases of 8,943 million yen in deferred tax liabilities and 6,004 million yen in bonus payable included in other current liabilities.
Total equity at the end of the nine months ended December 31, 2024 amounted to 262,482 million yen, an increase of 17,698 million yen compared to 244,783 million yen at the end of the previous fiscal year. The breakdown mainly includes 21,125 million yen of profit, 14,098 million yen of other comprehensive income, 10,795 million yen of dividends paid, and a reduction of 6,324 million yen in capital surplus. As a result, the ratio of equity attributable to owners of parent to total assets was 64.7%.

Cash flows
Statements of cash flows
The balance of cash and cash equivalents at the end of the nine months ended December 31, 2024 was 183,044 million yen. Net increase in cash and cash equivalents for the nine months of the current fiscal year was 79,068 million yen, compared to a net increase of 6,015 million yen for the same period of the previous fiscal year. Cash flows by activity type are as follows.

Cash flows from operating activities
Cash flows from operating activities for the nine months ended December 31, 2023 resulted in a cash inflow of 18,288 million yen. This is mainly attributable to 23,706 million yen of profit before tax, 9,013 million yen of depreciation and amortization, a 19,300 million yen decrease in trade and other receivables, a 10,514 million yen increase in contract assets, a 9,463 million yen increase in inventories, a 6,264 million yen increase in trade and other payables, a 5,312 million yen decrease in bonus payable, and income taxes paid of 11,951 million yen.
On the other hand, cash flows from operating activities for the nine months ended December 31, 2024 resulted in a cash inflow of 24,600 million yen. This is mainly attributable to 30,270 million yen of profit before tax, 9,085 million yen of depreciation and amortization, a 19,500 million yen decrease in trade and other receivables, a 9,380 million yen increase in contract assets, a 4,989 million yen increase in inventories, a 4,136 million yen increase in trade and other payables, a 6,442 million yen decrease in bonus payable, and income taxes paid of 13,971 million yen.
Cash flows from investing activities
Cash flows from investing activities for the nine months ended December 31, 2023 resulted in a cash inflow of 739 million yen. This is mainly attributable to 7,555 million yen of proceeds from sale and redemption of other financial assets, partly offset by 2,626 million yen of purchase of property, plant and equipment, and intangible assets and 4,376 million yen of purchase of other financial assets.
On the other hand, cash flows from investing activities for the nine months ended December 31, 2024 resulted in a cash inflow of 71,177 million yen. This is mainly attributable to 78,311 million yen of proceeds from sale and redemption of other financial assets, 5,399 million yen of purchase of other financial assets and 2,756 million yen of purchase of property, plant and equipment, and intangible assets.
Cash flows from financing activities
Cash flows from financing activities for the nine months ended December 31, 2023 resulted in a cash outflow of 13,238 million yen. This is mainly attributable to 5,603 million yen of repayments of lease liabilities and 7,319 million yen of dividends paid.
On the other hand, cash flows from financing activities for the nine months ended December 31, 2024 resulted in a cash outflow of 16,807 million yen. This is mainly attributable to 10,795 million yen of dividends paid and 5,573 million yen of repayments of lease liabilities.

Information on capital resources and liquidity of funds

1. Basic policy
  The Group believes that it is important to continuously maintain and strengthen its competitiveness and increase its corporate value into the future.
  Therefore, we seek to maintain sufficient internal reserves to prepare for capital requirements for investments and other needs toward business growth and business risks such as wide-area disasters. The capital requirements include those for initiatives to steadily capture evolving DX needs, continuously enhance high-value-added businesses and overall corporate value, further strengthen acquisition and training of excellent human resources, and conduct thorough internal controls and risk management. At the same time, regarding profit distribution, our basic policy is to implement appropriate and stable distribution of dividends to shareholders.
  We aim for a consolidated dividend payout ratio of 50%, with a focus on returning profits to shareholders in line with consolidated performance.
2. Capital requirements and financing
  Major capital requirements of the Group include capital expenditures and operating expenses such as material costs, outsourcing costs, labor costs, overhead costs, and selling, general and administrative expenses. Those capital requirements are satisfied by own funds.
  As for working capital on hand, the Company concentrates surplus funds from subsidiaries in the Company for centralized management by implementing the cash management system (CMS) and also having certain of its domestic subsidiaries implement the same system. Note that the Company's CMS is administered by Nippon Steel Corporation with 170,189 million yen deposited in the system as of December 31, 2024 being presented as part of cash and cash equivalents.
  For unexpected capital requirements, the Company has overdraft arrangements with major banks and Nippon Steel Corporation, its parent company, to prepare for liquidity risks.
Consolidated Financial Results Forecast and Other Forward-looking Information
No revisions have been made to the consolidated financial results forecast announced on October 29, 2024.

2. Condensed Quarterly Consolidated Financial Statements and Primary Notes

Condensed Quarterly Consolidated Statements of Financial Position

			(Millions of yen)

	As of March 31, 2024		As of December 31, 2024

Assets
Current assets
Cash and cash equivalents	103,975	183,044
Trade and other receivables	67,767	49,445
Contract assets	18,162	27,547
Inventories	25,176	30,210
Other financial assets	1,555	1,757
Other current assets	11,620	4,365

Total current assets	228,258	296,370
Non-current assets
Property, plant and equipment	16,901	15,951
Right-of-use assets	34,801	29,892
Goodwill	2,923	2,923
Intangible assets	3,847	4,036
Investments accounted for using equity method	212	195
Other financial assets	83,597	30,805
Deferred tax assets	3,969	12,244
Other non-current assets	124	349

Total non-current assets	146,379	96,398

Total assets	374,637	392,769

				(Millions of yen)
		As of March 31, 2024		As of December 31, 2024

Liabilities
Current liabilities
Trade and other payables	23,263	25,266
Contract liabilities	24,523	24,384
Lease liabilities	6,936	6,151
Other financial liabilities	819	2,964
Income taxes payable	7,857	26,804
Provisions	1,080	925
Other current liabilities	16,756	7,388

Total current liabilities	81,237	93,885
Non-current liabilities
Lease liabilities	27,855	23,853
Other financial liabilities	104	55
Retirement benefit liability	4,732	5,453
Provisions	2,870	2,863
Deferred tax liabilities	8,943		-
Other non-current liabilities	4,108	4,176

Total non-current liabilities	48,615	36,402

Total liabilities	129,853	130,287
Equity

Share capital	12,952	12,952
Capital surplus	9,953	3,628
Retained earnings	174,625	235,958
Treasury shares	(32)	(63)
Other components of equity	39,330	1,700

Total equity attributable to owners of parent	236,829	254,176

Non-controlling interests	7,954	8,305

Total equity	244,783	262,482

Total liabilities and equity	374,637	392,769