SIGMAXYZ : Consolidated Financial Results for the First Three Months of the Fiscal Year Ending March 31, 2023 (Japanese Accounting Standards)

Note: 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

First Three Months of the Fiscal Year Ending March 31, 2023

(Japanese Accounting Standards)

		August 3, 2022
Company name:	SIGMAXYZ Holdings Inc.	Stock listing: Tokyo Stock Exchange
Stock code:	6088	URL: https://www.sigmaxyz.com/
Representative:	Ryuichi Tomimura, Representative Director and President
Inquiries:	Shinya Tabata, CFO	Telephone: [phone]

Scheduled date of quarterly securities report filing: August 5, 2022

Scheduled date of dividend payment: -

Preparation of supplementary materials on quarterly financial results: Yes

Schedule of quarterly financial results presentation meeting: None

(Amounts of less than ¥1 million are rounded down)

1. Consolidated Financial Results for the Three Months Ended June 30, 2022 (from April 1, 2022 to June 30, 2022)

(1) Consolidated Operating Results (Cumulative)					(% figures indicate year-on-year changes)
		Revenue		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	%
June 30, 2022		3,871		13.3	631		66.5	644	76.7	392	156.3
June 30, 2021		3,415		1.5	379		148.1	364	123.2	153	75.9
Note: Comprehensive Income		Three	months ended June 30, 2022: ¥415 million [171.5%]
		Three months ended June 30, 2021: ¥153 million [75.9%]
		Profit per Share	Profit per Share
		(Diluted)
Three months ended				Yen			Yen
June 30, 2022				9.23			-
June 30, 2021				3.78			-

Notes: 1. The Company carried out a two-for-one split of its common stock with an effective date of April 1, 2022. The figures for "profit per share" were calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended March 31, 2022.

1. 2. Profit per share (diluted) for the three months ended June 30, 2021 and 2022 are not stated because there are no dilutive shares.

2. Consolidated Financial Position

	Total Assets		Net Assets		Equity Ratio	Net Assets per Share
As of	Millions of yen		Millions of yen		%	Yen
June 30, 2022	13,223		9,872		74.7	233.53
March 31, 2022	14,656		10,302		70.3	242.92
Reference: Equity	As of June 30, 2022:	¥9,872 million
	As of March 31, 2022:	¥10,302 million

Note: The Company carried out a two-for-one split of its common stock with an effective date of April 1, 2022. The figures for "net assets per share" were calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended March 31, 2022.

2. Dividends

			Annual Dividend
		First Quarter-End	Second Quarter-End	Third Quarter-End	Fiscal Year-End	Total
Fiscal year ended		Yen	Yen	Yen	Yen	Yen
March 31, 2022		-	0.00	-	26.00	26.00
Fiscal year ending		-
March 31, 2023
Fiscal year ending
March 31, 2023			0.00	-	15.00	15.00
(Forecast)

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Notes: 1. Revisions to the most recently announced dividend forecast: None

2. The Company carried out a two-for-one split of its common stock on April 1, 2022, and the dividend amounts for the fiscal year ended March 31, 2022 are the actual dividend amounts before the stock split. If the stock split is not taken into account, the forecast for the annual dividend per share for the fiscal year ending March 31, 2023 is ¥30.

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

(% figures indicate year-on-year changes)

	Revenue		Operating Profit	Ordinary Profit	Profit Attributable to	Profit per Share
		Owners of Parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%		Yen
Fiscal year ending	17,200		9.9	3,180	15.2	3,180	15.0	2,000	20.2		47.24
March 31, 2023
Note: Revisions to	the most recently	announced earnings forecasts: None

• Notes
• 1. Changes in significant subsidiaries during the period (changes in specified subsidiaries affecting the scope of consolidation): None
  2. Adoption of special accounting methods for preparation of quarterly consolidated financial statements: None
  3. Changes in accounting policies, changes in accounting estimates, and retrospective restatements 1) Changes in accounting policies associated with revisions to accounting standards: Yes

2)	Changes in accounting policies other than those in item 1) above:	None
3)	Changes in accounting estimates:	None
4)	Retrospective restatements:	None

Note: For details, please refer to "2. Quarterly Consolidated Financial Statements and Important Notes (3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 8 of the attached materials.

(4) Number of shares issued (common stock)

1)	The number of shares issued as of the end of the period (including treasury shares)
	As of June 30, 2022		46,308,600 shares
	As of March 31, 2022		46,308,600 shares
2)	The number of treasury shares as of the end of the period
	As of June 30, 2022		4,031,394 shares
	As of March 31, 2022		3,897,394 shares
3)	Average number of shares outstanding during the period (cumulative from the start of the fiscal year)
	Three months ended June 30, 2022		42,516,619 shares
	Three months ended June 30, 2021		40,540,380 shares

Notes: 1. The number of treasury shares excluded from the calculation of the number of treasury shares as of the end of the period and average number of shares outstanding during the period (cumulative from the start of the fiscal year) include the shares of the Company held by Custody Bank of Japan, Ltd. (Trust Account E) as trust assets for the Employee Stock Ownership Plan (J-ESOP) and those held by Custody Bank of Japan, Ltd. (Trust Account) as trust assets for a performance-linked stock compensation program.

• 2. The Company carried out a two-for-one split of its common stock with an effective date of April 1, 2022. The figures for "the number of shares issued as of the end of the period," "the number of treasury shares as of the end of the period" and "average during the period" were calculated on the assumption that the stock split was conducted at the beginning of the fiscal year ended March 31, 2022.

• These quarterly financial statements are outside the scope of quarterly review procedures by certified public accountants or audit corporations.
• Explanation regarding proper use of financial forecasts, and other special matters
  The earnings forecasts and other forward-looking statements presented in these materials reflect information currently available to the Company and assumptions that are deemed to be reasonable, but the Company does not guarantee the achievement of these targets. Actual results may differ significantly as a consequence of various factors. For more information on the Company's earnings forecasts and underlying assumptions, please refer to "1. Qualitative Information on Quarterly Financial Results (3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements" on page 3 of the attached materials.

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SIGMAXYZ Holdings Inc. (6088) Financial Results for the Three Months Ended June 30, 2022

Contents of the attached materials

1. Qualitative Information on Quarterly Financial Results	2
(1)	Explanation of Operating Results	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements	3
2. Quarterly Consolidated Financial Statements and Important Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	6
	Quarterly Consolidated Statement of Income
	(Three months ended June 30, 2021 and 2022)	6
	Quarterly Consolidated Statement of Comprehensive Income
	(Three months ended June 30, 2021 and 2022)	7
(3)	Notes to Quarterly Consolidated Financial Statements	8
	(Notes Regarding Assumption of a Going Concern)	8
	(Notes on Significant Changes in the Amount of Shareholders' Equity)	8
	(Changes in Accounting Policies)	8
	(Segment Information, etc.)	9

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SIGMAXYZ Holdings Inc. (6088) Financial Results for the Three Months Ended June 30, 2022

1. Qualitative Information on Quarterly Financial Results

1. Explanation of Operating Results

The Japanese economy is gradually recovering, and in terms of future prospects, the economy is expected to recover partly owing to the effects of various policies, as the economic and social activities head toward normalization. However, sufficient heed must be paid to downward risks caused by changes in the financial and capital markets amid global monetary tightening, rising raw material prices, supply-side restrictions, etc.

In such an environment, the Group has generated value in a wide range of industries and companies, and created new markets that solve social issues through the synergy of each Group company with "consulting" and "investment" at the center of business. In the Consulting Business, we are engaged in value creation that includes making business strategy, business reform, organizational reform, utilization of digital technology and cloud solutions, project management, development of new business, and promotion of collaboration between companies. Our goal is to provide services toward realization of "Three Innovations" that promote corporate transformation, namely Management Transformation, Digital Transformation, and Service Transformation. In the Investment Business, we promote investment activities primarily in the "Regenerative & Well-being" area, which intersects with a number of industries.

The Group's revenue for the three months ended June 30, 2022 amounted to ¥3,871 million (up 13.3% year on year).

Selling, general and administrative expenses were ¥1,265 million (up 21.5% year on year) due to the increase in sundry expenses associated with the normalization of face-to-face activities and recruiting expenses.

Due to an increase in revenue and a decrease in cost of revenue, gross profit increased by ¥476 million to ¥1,897 million (up 33.5% year on year), operating profit increased by ¥252 million to ¥631 million (up 66.5% year on year), and ordinary profit increased by ¥279 million to ¥644 million (up 76.7% year on year).

Total income taxes stood at ¥252 million (up 19.2% year on year).

Profit before income taxes came to ¥644 million (up 76.7% year on year), and profit attributable to owners of parent came to ¥392 million (up 156.3% year on year).

Operating results for each segment are as follows.

(Consulting Business)

The financial results of the Consulting Business for the three months ended June 30, 2022 shows revenue of ¥3,888 million (up 12.9% year on year) and segment profit of ¥1,158 million (up 36.9% year on year). The Consulting Business was driven by projects supporting corporate transformations, including the formulation of digital transformation strategies, development of new businesses and services, and revitalization of organizations and personnel, for customers mainly in the retail, trading, telecommunications, finance and manufacturing industries.

On the hiring front, the Consulting Business added 18 mid-career recruits and 36 new graduates in the three months ended June 30, 2022. The training for new graduates is going well in a hybrid format combining a remote work environment and face-to-face training. They will start working on their job from the coming October. The number of consultants was 514 as of the end of June 2022. Project satisfaction was remarkably high at 96 points.

(Investment Business)

The financial results of the Investment Business for the three months ended June 30, 2022 shows revenue of ¥12 million (down 68.4% year on year), mainly from dividend income, and segment loss of ¥65 million (compared to a segment loss of ¥6 million in the same period of the previous fiscal year).

In May, the Investment Business made an investment of approximately ¥200 million in Forest Energy Inc., which develops renewable energy business, such as power generation using wood biomass that was locally produced for local consumption and utilizes domestic wood from forest thinning, and the cumulative balance of investments on June 30 was approximately ¥2,000 million.

1. Explanation of Financial Position (Assets)
   Total assets as of June 30, 2022 stood at ¥13,223 million (down ¥1,433 million from the end of the previous fiscal year).

This mainly reflected a decrease in cash and deposits (down ¥1,095 million from the end of the previous fiscal year) and a decrease in notes and accounts receivable - trade, and contract assets (down ¥268 million from the end of the previous fiscal year).

(Liabilities)

Liabilities as of June 30, 2022 totaled ¥3,350 million (down ¥1,003 million from the end of the previous fiscal year). This mainly reflected a decrease in accounts payable - other (down ¥465 million from the end of the previous fiscal year) and a decrease in income taxes payable (down ¥818 million from the end of the previous fiscal year).

(Net assets)

Total net assets as of June 30, 2022 stood at ¥9,872 million (down ¥429 million from the end of the previous fiscal year). This mainly reflected a decrease due to the acquisition of treasury shares, etc. (up ¥254 million from the end of the previous fiscal year).

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SIGMAXYZ Holdings Inc. (6088) Financial Results for the Three Months Ended June 30, 2022

(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements

The consolidated earnings forecasts for the fiscal year ending March 31, 2023 have not changed from the forecasts included in "Consolidated Financial Results for the Fiscal Year Ended March 31, 2022," released on May 9, 2022.

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