July 29, 2022

Summary of Consolidated Financial Results

for the First Quarter of the Fiscal Year Ending March 31, 2023

(Three Months Ended June 30, 2022)

[Japanese GAAP]

Company name:

COMTURE CORPORATION

Listing: Tokyo Stock Exchange

Stock code:

3844

URL: https://www.comture.com/en/ir/index.html

Representative:

Chihiro Sawada, President

Contact:

Takahiro Kamei, Director and General Manager, Corporate Planning Division

Tel: +(81)3-5745-9700

Scheduled date of filing of Quarterly Report:

August 5, 2022

Scheduled date of payment of dividend:

August 31, 2022

Preparation of supplementary materials for quarterly financial results:

Yes

Holding of quarterly financial results meeting:

Yes (for institutional investors and analysts)

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

1. Consolidated Financial Results for the First Quarter Ended June 30, 2022 (April 1, 2022 - June 30, 2022)

(1) Consolidated operating results

(Percentages represent year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Three months ended Jun. 30, 2022

6,855

16.0

686

(26.4)

681

(26.7)

478

(14.2)

Three months ended Jun. 30, 2021

5,910

19.2

932

67.2

929

65.7

558

51.0

Note: Comprehensive income (million yen):

Three months ended Jun. 30, 2022:

482

(down 13.6%)

Three months ended Jun. 30, 2021:

558

(up 48.3%)

Net income per share

Diluted net income per share

Yen

Yen

Three months ended Jun. 30, 2022

15.02

-

Three months ended Jun. 30, 2021

17.52

-

*Diluted net income per share is not

presented because there were no potential shares with dilutive effects.

(2) Consolidated financial position

Total assets

Net assets

Shareholders' equity ratio

Million yen

Million yen

%

As of Jun. 30, 2022

18,796

13,940

74.2

As of Mar. 31, 2022

18,934

13,820

73.0

Reference: Shareholders' equity (million yen):

As of Jun. 30, 2022:

13,940 As of Mar. 31, 2022: 13,820

2. Dividends

Dividend per share

1Q-end

2Q-end

3Q-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2022

8.25

8.25

9.25

11.25

37.00

Fiscal year ending Mar. 31, 2023

11.00

Fiscal year ending Mar. 31, 2023 (forecast)

11.00

11.00

11.00

44.00

Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(Percentages represent year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Net income per

owners of parent

share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

First half

13,890

15.8

2,200

12.1

2,200

11.9

1,450

18.8

45.59

Full year

28,800

15.3

4,660

16.6

4,660

16.5

3,080

22.4

96.62

Note: Revisions to the most recently announced consolidated earnings forecasts: None

* Notes

(1) Changes in significant subsidiaries during the period (changes in scope of consolidation): None

Newly added: -

Excluded: -

  1. Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
  2. Changes in accounting policies and accounting-based estimates, and restatements
    1. Changes in accounting policies due to revisions in accounting standards, others: Yes

2)

Changes in accounting policies other than 1) above:

None

3)

Changes in accounting-based estimates:

None

4)

Restatements:

None

(4) Number of outstanding shares (common stock)

1) Number of shares outstanding at the end of the period (including treasury shares)

As of Jun. 30, 2022:

32,241,600 shares

As of Mar. 31, 2022:

32,241,600 shares

2) Number of treasury shares at the end of the period

As of Jun. 30, 2022:

368,090 shares

As of Mar. 31, 2022:

365,150 shares

3) Average number of shares outstanding during the period

Three months ended Jun. 30, 2022:

31,874,883 shares

Three months ended Jun. 30, 2021:

31,871,450 shares

  • The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
  • Explanation of appropriate use of earnings forecasts, and other special items
    Forecasts of future performance in this report are based on assumptions judged to be valid and information available to the Company's management at the time the materials were prepared. Actual results may differ significantly from these forecasts for a number of reasons. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking Statements" on page 5 for forecast assumptions and notes of caution for usage.

COMTURE CORPORATION (3844) Financial Results for the First Quarter of FY3/23

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance

2

(1)

Explanation of Results of Operations

2

(2)

Explanation of Financial Position

5

(3)

Explanation of Consolidated Forecast and Other Forward -looking Statements

5

2. Quarterly Consolidated Financial Statements and Notes

6

(1)

Quarterly Consolidated Balance Sheet

6

(2)

Quarterly Consolidated Statements of Income and Comprehensive Income

8

(3)

Notes to Quarterly Consolidated Financial Statements

10

Going Concern Assumption

10

Significant Changes in Shareholders' Equity

10

Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements 10

Changes in Accounting Policies

10

Segment and Other Information

10

Business Combinations

10

Subsequent Events

11

1

COMTURE CORPORATION (3844) Financial Results for the First Quarter of FY3/23

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

Companies and governments need to implement strategic innovations that utilize digital technologies, such as by creating new businesses and services and new ways for people to do their jobs. The growth of IT investments is expected to gain momentum in the digital transformation (DX) sector.

The COMTURE Group regards these trends as an opportunity for long -term growth. We are dedicated to giving customers support for their DX activities as well as altering COMTURE itself, a process we call the COMTURE Transformation (CX). Our strategy for the next 10 years is to play a key role in the business model reforms of our customers. This includes DX assistance that incorporates our own templates and solutions for the provision of added value, an activity centered on building stronger ties with global vendors.

COMTURE was one of the first companies to build value-added systems based on Lotus Notes, SAP and other platforms. We increased the number of platforms we handle to match changes in the business climate. Today, we build systems based on AWS, Microsoft, Salesforce, ServiceNow, Pega and other cloud platforms. Services also encompass data analytics using SAS and other tools, the use of robotic process automation (RPA) tools for the efficiency and automation of business processes, and more DX-related solutions. Demand is increasing for the construction of systems based on these DX platforms and COMTURE has the expertise to create profitable proposals with significant added value for customers. Furthermore, by adding to conventional stand-alone platforms the ability to supply multi-faceted platforms, we can meet the increasingly complex needs of our customers by assembling the best possible solutions. To provide these solutions, we are encouraging our people to acquire even more advanced vendor certifications and improve skills at creating proposals for customers. Another priority is providing services with even more added value involving consulting and other fields.

We are using formats that combine online and face-to-face interaction for efficient sales activities and the presentation of proposals to prospective customers. Daily business reports utilize a sales force automation (SFA) system to facilitate the timely sharing of information with many people, including man agement. The goal is to utilize the collective knowledge of our team even more in order to raise our proposals to a higher level and strengthen sales activities. Launching new businesses faster in growing market sectors is another priority. We have started a project that covers all COMTURE businesses for the purpose of creating templates based on customers' needs and then using these ideas for new businesses that can contribute to our next stage of growth.

Market conditions are favorable for receiving new orders and our highest priority is recruiting and retaining the engineers we require to handle these orders and maintain strong performance. Raising salaries and other benefits for employees is the most important point for recruiting and retaining engineers. One step was an average salary increase of 10% in the previous fiscal year and we plan to raise the average salary by at least 8% in the current fiscal year. We have also been increasing engagement with our workforce, such as by allowing individuals to use a working style combining telework and work at a COMTURE office, utilizing small groups and other forms of unrestricted R&D activities and by establishing more ties between management and employees.

We are using numerous measures to strengthen recruiting activities. In addition to hiring talented new college graduates, we are working closely with consultants, recruiting agents and other recruiting specialists to improve methods used to recruit people who have experience at other companies.

To cover areas where there are shortages in our own workforce, we are using strategic forms of collaboration with partner companies, including the creation of core partners. These relationships allow us to be the fi rst to receive information about engineers we can hire who will become productive immediately. We will continue to place priority on the recruitment of engineers with activities that include the use of the COMTURE Group's educational materials and courses to assist individuals acquire skills in growing market sectors.

In addition to taking these actions, we are using M&A as another important method for adding people with the skills we require to the COMTURE Group in order to grow even faster. In April 2022, our acquisition of SoftwareCreation Co., Ltd. strengthened our operations by adding 120 engineers to our workforce.

In April 2022, the stock listing of COMTURE moved to the Prime Market of the Tokyo Stock Exchange.

2

COMTURE CORPORATION (3844) Financial Results for the First Quarter of FY3/23

To create an even more effective system of corporate governance as well as a stronger framework for our management, we have shifted to the company with an Audit and Supervisory Committee governance structure. Shareholders approved the proposal to make this change at the shareholders meeting held on June 17, 2022. The Audit and Supervisory Committee, where the majority of members are outside directors, will ensure the transparency of management by performing activities concerning the compliance of business o perations with law and regulations and the suitability and other characteristics of the auditing function. In addition, this governance structure will further raise the speed of decisions and business activities by giving the directors the Board of Directors' authority to make decisions about how business operations are conducted.

To meet the expectations of all stakeholders of the COMTURE Group, we remain committed to making more improvements to our corporate governance and achieving long -term growth of corporate value as we listen carefully to the opinions and other input of shareholders and other stakeholders.

Due to numerous measures that reflect changes in the business climate, along with initiatives for the growth of the DX business, sales in the first quarter increased for the twelfth consecutive year to a record high on an effective sales basis. Although sales were higher, gross profit was lower because of a big increase in personnel expenses and expenses associated with the growth of business operations.

Sale and gross profit in the COMTURE Group's business categories were as follows.

In the Cloud Solutions Business, sales increased because of higher demand for several services. Sources of growth include the use of collaborations with Microsoft and Salesforce.com to build customer information systems, the shift of internal data systems to the cloud, primarily at large companies in the manufacturing and other sectors, and consulting and other services involving the digitalization of business processes .

In the Digital Solutions Business, sales increased. One reason is growth of the data analysis business, which includes anti-money laundering for financial institutions, and other activities. Growth of the data management business, such as building and maintaining infrastructures for collecting and storing large amount of data on the Google Cloud Platform, was another reason for the increases in sales and earnings.

In the Business Solutions Business, the pace of growth of the SAP business, including the us e of SAP's S/4HANA ERP system, temporarily declined because of a chronic shortage of resources. However, sales increased because of the consolidation of a subsidiary beginning in the current fiscal year.

In the Platform, Operation Services Business, sales increased. Demand is increasing for the construction of Amazon Web Services (AWS) and other cloud environments and services for the shift of operations to the cloud. There is also growth of the business for operating cloud environments and increasing dema nd for the outsourcing and security support of IT system operations.

In the Digital Learning Business, sales and gross profit were higher. One reason was the growth of the DX education business for cloud service certifications of Microsoft, Salesforce, Ser viceNow and other companies. Increasing demand at companies for new employee and other structured training programs also contributed to sales growth.

(Millions of yen)

1Q of FY3/22

1Q of FY3/23

Change

Change (%)

Cloud Solutions Business

Net sales

2,244

2,447

202

9.0%

Gross profit

569

546

(23)

(4.1)%

Digital Solutions Business

Net sales

572

630

58

10.3%

Gross profit

143

135

(8)

(6.1)%

Business Solutions

Net sales

1,434

1,935

501

34.9%

Business

Gross profit

311

295

(15)

(5.0)%

Platform, Operation

Net sales

1,170

1,337

167

14.3%

Services Business

Gross profit

284

241

(42)

(14.9)%

Digital Learning Business

Net sales

489

504

15

3.1%

Gross profit

142

157

15

10.7%

3

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Comture Corporation published this content on 03 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2022 07:21:14 UTC.