SMS : FY03-24 1H SMS Summary of Consolidated Financial Results

About this update from Sms Co., Ltd.

Translation Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail. Summary of Consolidated Financial Results for the Six Months Ended September 30, 2023 (Based on Japanese GAAP) October 27, 2023 Company name: SMS CO., LTD. Stock exchange listing: Tokyo Stock code: 2175 URL https://www.bm-sms.co.jp/ Representative: CEO Natsuki Goto Inquiries: CFO Masato Sugizaki TEL 03-6721-2400 Scheduled date to file Quarterly Securities Report: November 10, 2023 Scheduled date to commence dividend payments: - Preparation of supplementary material on quarterly financial results: Yes Holding of quarterly financial results meeting: Yes (for institutional investors and analysts) (Amounts less than one million yen are rounded down) 1. Consolidated financial results for the six months ended September 30, 2023 (from April 1, 2023 to September 30, 2023) (1) Consolidated operating results (cumulative) Percentages indicate year-on-year changes Net sales Operating profit Ordinary profit Profit attributable to owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % Six months ended September 30, 2023 27,474 17.7 4,701 2.0 5,775 0.3 4,176 1.1 Six months ended September 30, 2022 23,334 17.1 4,609 25.2 5,758 22.5 4,129 21.3 Earnings per share Diluted earnings per share Yen Yen Six months ended September 30, 2023 47.81 47.66 Six months ended September 30, 2022 47.38 47.17 (2) Consolidated financial position Total assets Net assets Equity ratio Millions of yen Millions of yen % As of September 30, 2023 72,727 43,794 59.7 As of March 31, 2023 65,098 38,421 58.3 2. Cash dividends Annual dividends per share 1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end Yen Yen Yen Yen Year ended March 31, 2023 - 0.00 - 15.00 Year ending March 31, 2024 - 0.00 Year ending March 31, 2024 (Forecast) - - Total Yen 15.00 - 3. Forecast of consolidated financial results for the year ending March 31, 2024 (from April 1, 2023 to March 31, 2024) Percentages indicate year-on-year changes Net sales Operating profit Ordinary profit Profit attributable to Earnings per share owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Full year 54,799 20.0 8,375 15.0 9,960 13.7 7,127 11.3 81.59 1 4. Notes Changes in significant subsidiaries during the six months ended September 30, 2023 (changes in specified subsidiaries resulting in the change in scope of consolidation): Application of special accounting methods for preparing quarterly consolidated financial statements: No Yes (3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements Changes in accounting policies due to revisions to accounting standards and other regulations: No Changes in accounting policies due to other reasons: No Changes in accounting estimates: No Restatement of prior period financial statements: No (4) Number of issued shares (common shares) Total number of issued shares at the end of the period (including treasury shares) As of September 30, 2023 87,561,600 shares As of March 31, 2023 87,153,500 shares Number of treasury shares at the end of the period As of September 30, 2023 685 shares As of March 31, 2023 641 shares Average number of shares during the period (cumulative from the beginning of the fiscal year) Six months ended September 30, 2023 87,357,597 shares Six months ended September 30, 2022 87,147,506 shares 2 Quarterly consolidated financial statements Consolidated balance sheets (Millions of yen) As of March 31, 2023 As of September 30, 2023 Assets Current assets Cash and deposits 16,965 20,500 Accounts receivable - trade 6,510 7,001 Work in process 20 45 Supplies 29 34 Accounts receivable - other 8,440 9,826 Prepaid expenses 793 962 Other 67 52 Allowance for doubtful accounts (274) (235) Total current assets 32,552 38,189 Non-current assets Property, plant and equipment Buildings 845 1,095 Accumulated depreciation (448) (497) Buildings, net 397 598 Tools, furniture and fixtures 1,024 1,146 Accumulated depreciation (802) (888) Tools, furniture and fixtures, net 222 258 Machinery, equipment and vehicles 30 28 Accumulated depreciation (23) (21) Machinery, equipment and vehicles, net 7 6 Right-of-use assets 768 862 Accumulated depreciation (509) (631) Right-of-use assets, net 259 230 Total property, plant and equipment 886 1,093 Intangible assets Goodwill 10,029 10,482 Software 4,156 4,883 Trademark right 11,053 12,077 Customer-related assets 1,355 1,324 Other 0 0 Total intangible assets 26,594 28,767 Investments and other assets Investment securities 2,629 2,085 Deferred tax assets 1,138 1,216 Leasehold and guarantee deposits 1,298 1,373 Total investments and other assets 5,065 4,676 Total non-current assets 32,546 34,537 Total assets 65,098 72,727 3 (Millions of yen) As of March 31, 2023 As of September 30, 2023 Liabilities Current liabilities Accounts payable - trade 324 239 Current portion of long-term borrowings 1,901 1,901 Accounts payable - other 10,566 12,454 Accrued expenses 682 1,099 Income taxes payable 1,263 1,492 Accrued consumption taxes 654 824 Contract liabilities 1,073 1,484 Deposits received 180 185 Provision for bonuses 858 827 Lease liabilities 152 147 Other 357 397 Total current liabilities 18,015 21,053 Non-current liabilities Long-term borrowings 6,153 5,202 Retirement benefit liability 178 201 Deferred tax liabilities 2,208 2,374 Lease liabilities 121 98 Other - 1 Total non-current liabilities 8,661 7,878 Total liabilities 26,677 28,932 Net assets Shareholders' equity Share capital 2,315 2,551 Capital surplus 119 356 Retained earnings 33,190 36,059 Treasury shares (1) (1) Total shareholders' equity 35,624 38,966 Accumulated other comprehensive income Valuation difference on available-for-sale securities 395 326 Foreign currency translation adjustment 1,917 4,114 Total accumulated other comprehensive income 2,312 4,441 Share acquisition rights 484 386 Total net assets 38,421 43,794 Total liabilities and net assets 65,098 72,727 4 Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative) Consolidated statements of income (cumulative) (Millions of yen) Six months ended Six months ended September 30, 2022 September 30, 2023 Net sales 23,334 27,474 Cost of sales 2,451 2,965 Gross profit 20,883 24,508 Selling, general and administrative expenses 16,274 19,807 Operating profit 4,609 4,701 Non-operating income Share of profit of entities accounted for using equity method 1,152 1,098 Other 38 28 Total non-operating income 1,191 1,126 Non-operating expenses Foreign exchange losses 3 18 Interest expenses 35 33 Other 3 0 Total non-operating expenses 42 52 Ordinary profit 5,758 5,775 Extraordinary income Gain on sale of non-current assets 0 1 Total extraordinary income 0 1 Extraordinary losses Loss on sale and retirement of non-current assets 8 9 Loss on sale of investment securities 1 - Loss of reversal of foreign currency translation adjustment 33 - Total extraordinary losses 43 9 Profit before income taxes 5,715 5,767 Income taxes 1,586 1,591 Profit 4,129 4,176 Profit attributable to owners of parent 4,129 4,176 5 Consolidated statements of comprehensive income (cumulative) Profit Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests (Millions of yen) Six months ended Six months ended September 30, 2022 September 30, 2023 4,129 4,176 0 - 3,702 2,175 (28) (46) 3,674 2,128 7,803 6,304 7,803 6,304 - - 6 Consolidated statements of cash flows (Millions of yen) Six months ended Six months ended September 30, 2022 September 30, 2023 Cash flows from operating activities Profit before income taxes 5,715 5,767 Depreciation 938 1,115 Amortization of goodwill 438 509 Loss (gain) on sale and retirement of non-current assets 8 8 Loss (gain) on sale of investment securities 1 - Loss on Reversal of Foreign currency translation adjustment 33 - Share of loss (profit) of entities accounted for using equity 419 496 method Increase (decrease) in allowance for doubtful accounts (5) (49) Increase (decrease) in provision for bonuses (61) (58) Increase (decrease) in retirement benefit liability (10) 6 Foreign exchange losses (gains) 3 18 Interest expenses 35 33 Decrease (increase) in trade receivables 140 (316) Increase (decrease) in accrued consumption taxes 185 155 Decrease (increase) in accounts receivable - other (1,349) (1,357) Decrease (increase) in prepaid expenses (129) (157) Increase (decrease) in contract liabilities 238 309 Increase (decrease) in accounts payable - other 1,308 1,883 Other, net 62 380 Subtotal 7,975 8,744 Interest and dividends received 12 17 Interest paid (36) (34) Income taxes refund (paid) (1,913) (1,505) Net cash provided by (used in) operating activities 6,038 7,222 Cash flows from investing activities Payments into time deposits (215) (52) Proceeds from withdrawal of time deposits 16 182 Purchase of property, plant and equipment (131) (365) Purchase of intangible assets (1,217) (1,554) Proceeds from sale of investment securities 0 - Other, net 0 1 Net cash provided by (used in) investing activities (1,548) (1,788) Cash flows from financing activities Repayments of long-term borrowings (1,048) (950) Repayments of lease liabilities (64) (78) Proceeds from issuance of share acquisition rights 6 5 Proceeds from issuance of shares resulting from exercise of 1 304 share acquisition rights Dividends paid (915) (1,306) Other, net - (0) Net cash provided by (used in) financing activities (2,020) (2,027) Effect of exchange rate change on cash and cash equivalents 442 214 Net increase (decrease) in cash and cash equivalents 2,912 3,621 Cash and cash equivalents at beginning of period 14,126 16,170 Cash and cash equivalents at end of period 17,039 19,791 7

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