Consolidated Financial Statements for the Nine Months Ended September 30, 2023 (IFRS)
These financial statements have been prepared for reference only.
November 13, 2023
Link and Motivation Inc.
Stock exchange listing: Tokyo, Prime Market
Code number: 2170
http://www.lmi.ne.jp/english
Representative: Ozasa Yoshihisa, Chairman and Representative Director
Contact: Yokoyama Hiroaki, Corporate Officer andManager of Group Design Office
Phone: +81-3-6853-8111
Filing of Quarterly Report (Shihanki Hokokusho) (scheduled):
November 13, 2023
Start of distribution of dividends (scheduled):
December 25, 2023
Supplementary documents for quarterly results:
Yes
Quarterly results briefing:No(Amounts are rounded down to the nearest million.)

1. Consolidated Results for the Nine Months Ended September 30, 2023
(January 1, 2023 – September 30, 2023)(1) Revenues and Income
Revenues(¥ million)
Nine months ended
September 30, 2023
Nine months ended
September 30, 2022

(Percentages represent change compared with the same quarter of the previous year.)
IncomeOperatingNet
ChangeChangebeforeChangeChangeincomeincome(%)(%)
income taxes(%)(%)(¥ million)(¥ million)(¥ million)

25,052

2.7

3,323

5.7

3,283

8.2

2,082

4.2

24,399

0.3

3,143

48.6

3,034

53.2

1,998

—

Net income
attributable toowners of theparent(¥ million)

Change(%)

Comprehensive
income(¥ million)

Change(%)

Basic earnings
per share (¥)

Dilutedearnings per
share (¥)

Nine months ended
September 30, 2023
1,829
(2.0)
2,683
30.9
16.39
16.36
Nine months ended
September 30, 2022
1,865
—
2,050
—
16.73
16.73
Note: The Company has adopted IAS 12 Income Taxes (May 2021 amendment) as of the first quarter of the fiscal year ending
December 31, 2023, and figures are retrospectively restated to reflect this change in accounting policy. The percentage change
from the same period of the previous year in the amounts of net income, net income attributable to owners of the parent, andcomprehensive income are not presented because retrospective adjustments were made in accordance with this change inaccounting policy.

(2) Financial Position
Equity attributable
Ratio of equity
to owners of theattributable to owners
parentof the parent to total(¥ million)
assets (%)
As of September 30, 2023
30,594
13,597
10,82035.4
As of December 31, 2022
28,908
11,243
9,057
31.3
Note: The Company has adopted IAS 12 Income Taxes (May 2021 amendment) as of the first quarter of the fiscal year ending
December 31, 2023, and figures are retrospectively restated to reflect this change in accounting policy.
Total assets(¥ million)

Total equity(¥ million)

2. Dividends
Dividends per share
3rd Qtr.
Year-end
2022
1.90
2.00
2023
2.80
2023 (est.)
2.90
Note: Revisions since the most recently announced dividend forecast: Yes
1st Qtr.
1.90
2.80

2nd Qtr.
1.90
2.80

Total
7.70
11.30

3. Forecast of Results for 2023 (January 1, 2023 – December 31, 2023)(Percentages represent change compared with the previous fiscal year.)
Net income
Basic
Net
Revenues
Operating income
attributable toearnings
incomeowners of the parent
per share(¥ million)(%) (¥ million)(%)(¥ million)(%)(¥ million)(%)(¥)
Full-year
35,300
7.7
4,670
28.7
2,900
37.7
2,630
35.4
23.57
Note: Revisions since the most recently announced forecast of results: No

Notes(1) Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Due to Change in Scopeof Consolidation): No(2) Changes in Accounting Policies and Changes in Accounting Estimates(a) Changes in accounting policies required by IFRS: Yes*(b) Changes in accounting policies other than (a) above: No(c) Changes in accounting estimates: No* Please refer to “(5) Notes to Condensed Consolidated Financial Statements” on page 17 for details.
(3)

Number of Shares Issued and Outstanding (Common Stock)(a) Number of shares at the end of the period (including treasury stock)
Nine months ended September 30, 2023: 113,068,000; Year ended December 31, 2022: 113,068,000(b) Number of treasury shares at the end of the period:
Nine months ended September 30, 2023: 1,431,468; Year ended December 31, 2022: 1,506,468(c) Average number of shares outstanding (cumulative with earlier quarters):
Nine months ended September 30, 2023: 111,604,389; Nine months ended September 30, 2022: 111,561,557* These Financial Statements Are Not Subject to Review by a Certified Public Accountant or Auditing Firm
* Explanation of the Proper Use of Performance Forecasts and Other Special Instructions
Note regarding forward-looking statements:
Consolidated forecasts and other statements regarding the future contained in this document are based on information
currently available to the Company and certain reasonable assumptions. Actual performance may differ substantially
due to numerous factors.
How to obtain supplementary quarterly financial information:
Supplementary quarterly financial information is disclosed on the same day on TDnet.

Contents of Attachments
1. Overview of Results of Operations and Other Information ............................................................................ 2(1) Overview of Results of Operations for the Nine Months Ended September 30, 2023 ............................ 2(2) Overview of Financial Position for the Nine Months Ended September 30, 2023 ................................. 7(3) Overview of Cash Flow for the Nine Months Ended September 30, 2023 .............................................. 7(4) Forecast ......................................................................................................................................................... 8
2. Condensed Consolidated Financial Statements and Main Notes ................................................................... 9(1) Condensed Consolidated Statements of Financial Position ..................................................................... 9(2) Condensed Consolidated Statements of Operations and Comprehensive Income ............................... 11(3) Condensed Consolidated Statements of Changes in Equity ................................................................... 15(4) Condensed Consolidated Statements of Cash Flow ................................................................................. 16(5) Notes to Condensed Consolidated Financial Statements ....................................................................... 17
Change in Accounting Policies ..............................................................................................................17
Significant Accounting Policies .......................................................................................................... 17
Notes Regarding Significant Accounting Estimates and Judgements .................................................. 17
Notes Regarding Assumption of Going Concern ............................................................................... 17
Significant Subsequent Events ............................................................................................................ 18

1

1. Overview of Results of Operations and Other Information
Forward-looking statements in the following text are based on judgments as of September 30, 2023, the last day ofthe consolidated accounting period under review. Because the Link and Motivation Group (the “Group”) transferred thedomestic temp staff business operated by its subsidiary Link Agent Inc. (formerly Link Staffing Inc.) to iDA K.K. as ofJanuary 1, 2022, these operations are classified as discontinued. Therefore, the amount from continuing operations isshown for revenues, gross profit and operating income, and the total from continuing and discontinued operations isshown for net income attributable to owners of the parent.
(1) Overview of Results of Operations for the Nine Months Ended September 30, 2023
The Group supports the transformation of numerous organizations and individuals using “Motivation Engineering” (theGroup’s core technology), incorporating academic results in business administration, social systems theory, behavioral
economics, psychology and other disciplines, under its mission: “Through Motivation Engineering, we provide opportunities
to transform organizations and individuals and create a more meaningful society.” During the nine months ended September
30, 2023 (the “first nine months of 2023”), the Japanese economy continued to recover gradually, supported by a pickup
in personal consumption and an increase in demand from inbound tourism. However, the economic outlook remains
unclear due to price increases in Japan and the risk of stagnation in the global economy due to long-term interest rate
hikes in various countries. Under these economic conditions, the Group perceives a growing need for companies to promote
human capital management in order to deal with change.
In this economic environment, the Group’s revenues for the first nine months of 2023 were ¥25,052 million (a 2.7%
increase compared with the same period of the previous year), gross profit was ¥13,043 million (an 8.1% increase),
operating income was ¥3,323 million (a 5.7% increase) and net income attributable to owners of the parent was ¥1,829
million (a 2.0% decrease).
In the first nine months of 2023, revenues were below the Group’s expectations at the beginning of the year,
increasing only slightly from the same period of the previous year. However, gross profit increased compared with thesame period of the previous year due to recovery in the Consulting & Cloud business and substantial growth in the
Personnel Placement business, both of which have high profit margins. In addition, operating income increased, evenabsent the one-time income of approximately ¥700 million recorded in the first nine months of 2022 due to the reversal oflease liabilities as part of the relocation and closure of schools in the Career School business. Operating income isprogressing as expected toward the full-year financial forecast, and operating income for the fiscal year ending December
31, 2023 is projected to reach a new record, surpassing the ¥3,825 million recorded in the fiscal year ended December 31,
2018. Net income attributable to owners of the parent decreased slightly compared with the same period of the previous
year, but is progressing as expected toward the full-year forecast.
The Group has adopted IAS 12 Income Taxes (May 2021 amendment) as of the first quarter of the fiscal year ending
December 31, 2023. This amendment has been applied retrospectively. As a result, net income attributable to owners of
the parent increased by ¥120 million in the first nine months of the previous year and decreased by ¥46 million in the firstnine months of 2023. Net income attributable to owners of the parent for the first nine months of 2023 would have been
¥1,876 million before the retrospective application (a 7.5% increase compared with the same period of the previous year
before the retrospective application).
The segment and business classifications of the Group are as shown below, and an overview of the first nine monthsof 2023 by segment and business follows.

2

Link and
Motivation Group

Organizational
Development Division

Individual
Development Division

Matching Division

Consulting &Cloud Business

Career School Business

ALT Placement Business

Link and Motivation Inc.

Link Academy Inc.

Link Interac Inc.

Link Global Solution Inc.

Link Japan Careers Inc.

Link Event Produce Inc.

IR Support Business

Cram School Business

Personnel Placement
Business

Link Corporate
Communications Inc.

Motivation Academia Inc.

Link Agent Inc.
Link-i Inc.
OpenWork Inc.

3

Organizational Development Division
The Organizational Development Division provides support for the creation of companies that are chosen byindividuals (“Motivation Companies”). In concrete terms, it offers services that provide support for increasing
engagement with a company’s stakeholders (employees, job applicants, customers, shareholders) by applying“Motivation Engineering,” which is the core technology of the Group.
In this segment, segment revenues for the first nine months of 2023 were ¥9,439 million (a 5.9% increase), andsegment income was ¥6,632 million (an 8.2% increase). An overview of operating results by business for the first ninemonths of 2023 is as follows.
Consulting & Cloud BusinessTo increase employee engagement, the Consulting & Cloud business diagnoses engagement based on its original
diagnostic framework and offers one-stop solutions for innovations in recruiting, training, systems and corporate culture
related to organizations and personnel. The business also provides the Motivation Cloud series of cloud-based services
that allow customer companies to manage employee engagement themselves.
In this business, revenues for the first nine months of 2023 were ¥8,088 million (a 4.7% increase) and gross profit was¥6,113 million (a 10.1% increase). Results by product in the Consulting & Cloud business were as follows.
Table 1. Revenues by ProductProduct (¥ million)(Figures in brackets are gross profit)

YoY change(%)

Nine months ended
September 30, 2022

Nine months ended
September 30, 2023

7,729
[5,553]

8,088[6,113]

4.7%
10.1%

Consulting

5,125

4,744

-7.4%

Cloud

2,603

3,344

28.4%

Consulting & Cloud BusinessIn the first nine months of 2023, revenues increased compared with the same period of the previous year, as services
in the Consulting category recovered. Gross profit increased significantly, with the substantial growth of the high-margin
Motivation Cloud series contributing to results. Until the end of the first half of 2023, companies continued to focus on
responding to the requirement to disclose human capital information in securities reports starting from the fiscal year
ended March 31, 2023, and placed lower priority on “transformation.” In addition, growth weakened temporarily because
this business was unable to fully meet the human capital management needs of diverse customers due to the Group’s
product-based organizational structure, but recovered as expected from July onward as efforts by companies to respond to
disclosure requirements settled down. Promoting inter-organizational cooperation through changes in the management
accounting system and expanding cross-selling between businesses were major factors in the recovery. Continuing topromote expansion of cross-selling and long-term support will improve the ability of the Consulting & Cloud business tomeet the human capital management needs of a variety of customers.
Monthly fee revenue increased substantially compared with the same period of the previous year for the Motivation
Cloud series of products, which are part of the Cloud category and are priority services. The number of deliveries andmonthly fee revenue were as follows.
Table 2. Number of Deliveries and Monthly Fee Revenue for the Motivation Cloud Series at Quarter-End
2022
2023
March

Number ofdeliveries
Monthly fee
revenue(¥ thousand)

June

September

December

March

June

September

745

768

820

831

846

851

883

256,155

284,692

306,934

328,505

339,179

358,792

395,398

Since its founding in 2000, the Group has not only diagnosed the engagement status of companies and employees but
has also supported their transformation. The Motivation Cloud series is a group of cloud-based services in the field of HR
4

Tech (human resources combined with technology) for improving employee engagement. The Group migrated theorganization diagnosis service it has offered since its founding to the cloud and started providing the Motivation Cloud
service in July 2016. Motivation Cloud is currently ranked number one in share of sales by vendor in the employee
engagement market (the sixth consecutive year: fiscal 2017 to fiscal 2022 forecast) in ITR Market View: Human
Resources Management Market 2023, a market research report published by ITR Corporation.
The Group is forecasting ¥430,000 thousand in fee revenue from the Motivation Cloud series for the month ofDecember 2023 (a year-on-year increase of 30.9%). Monthly fee revenue for September 2023 was ¥395,398 thousand (a28.8% increase). As a result of new introductions primarily by major companies, the growth of monthly fee revenue was¥36,605 thousand in the third quarter of 2023, a new record for growth on a quarterly basis.
The Group will continue to promote the introduction of Motivation Cloud at major companies. In addition, for Stretch
Cloud, a human resource development cloud service, we plan to expand in the human resource development market,
which exceeds ¥500 billion. By executing these growth strategies, the Group will achieve further growth.
IR Support Business
The IR Support business provides one-stop support for corporate branding through various media and events centeredon the field of investor relations for the “improvement of investor engagement” at corporations. In addition to productionof printed media such as integrated reports for shareholders and investors, web-based media such as investor relations(IR) sites, and visual media such as webcasts of financial results briefings, the business creates forums for shareholders’meetings and other events.
In this business, revenues for the first nine months of 2023 were ¥1,487 million (a 9.6% increase) and gross profit was¥605 million (a 7.8% decrease).
In the first nine months of 2023, production of integrated reports, the core service, expanded as expected, andrevenues increased compared with the same period of the previous year. Gross profit decreased compared with the same
period of the previous year due to an increase in production-related personnel expenses.
Needs for disclosure of non-financial capital, particularly human capital information, are increasing further with therequirement to disclose human capital information in securities reports. The number of companies disclosing thediagnosis results of Motivation Cloud, which we provide, surpassed 100 at the end of September 2023. Disclosure of
employee engagement is also steadily increasing. The business will generate synergies with the Consulting & Cloudbusiness by continuing to enhance disclosure of human capital information based on diagnosis and transformation.
Individual Development Division
The Individual Development Division supports the creation of individuals who are chosen by organizations (“iCompanies”). Specifically, it applies “Motivation Engineering,” which is the core technology of the Group, to businesses
in areas including career schools and cram schools, to provide one-stop services to customers from elementary school
students to working adults. These services range from helping to set goals to understanding individual issues andformulating and implementing study plans.
In this segment, segment revenues for the first nine months of 2023 were ¥4,775 million (a 10.9% decrease) andsegment income was ¥2,158 million (a 1.0% decrease). An overview of operating results by business for the first ninemonths of 2023 is as follows.
Career School Business
The Career School business provides five services aimed at the career advancement of university students andworking adults: “Aviva” personal computer schools, “Daiei” qualification schools, “Rosetta Stone Learning Center,”“Rosetta Stone Premium Club” and “Hummingbird” foreign language schools.
In this business, revenues for the first nine months of 2023 were ¥4,214 million (a 13.2% decrease) and gross profit
was ¥1,921 million (a 2.1% decrease).
In the first nine months of 2023 for BtoC services, restructuring to relocate or close the 81 schools nationwide in
response to changes in learning needs accelerated by the COVID-19 pandemic and the shift to online courses moved
forward as planned, and the gross profit margin improved as expected. The gross profit margin for the first nine monthsof 2023 was 45.6%, an improvement compared with 40.4% in the first nine months of 2022. Revenues from online
courses, which were ¥214 million in the first nine months of 2022, were ¥393 million in the first nine months of 2023.
This business will continue to enhance customer value while at the same time improving business efficiency. For BtoB
5

services, this business is aiming to shift to services with a higher continuation rate. The monthly average number ofparticipants in the “Cafeteria Plan,” a program for companies that allows employees to select their own benefits from amenu of options, increased by approximately 20% at the end of September 2023 compared with the end of June 2023.
This business will continue to promote the shift to services with a high continuation rate.
Cram School Business
The Cram School business operates two cram schools in both in-person and online formats—“SS-1,” anindividualized instruction school for students preparing for junior high school entrance exams, and “Motivation
Academia” cram schools for junior high and high school students—to improve the academic ability of elementary, juniorhigh and high school students. For Motivation Academia in particular, unlike typical cram schools, students can not only
improve their academic ability but also acquire skills to play an active role in society. The Cram School business utilizes
its assets in programming education and English conversation education to provide a place for students from elementary
school straight through to high school to acquire skills that they can utilize in society, in addition to improving theiracademic ability.
In this business, revenues for the first nine months of 2023 were ¥560 million (an 11.6% increase) and gross profit
was ¥237 million (an 8.7% increase).
Revenues increased substantially and gross profit also increased in the first nine months of 2023 due to expansion in
the number of students enrolled in classes.
In addition to improving the continuation rate from SS-1 to Motivation Academia, this business will continue toincrease the number of new enrollees by providing learning opportunities through online courses to a wide range ofstudents, not just those in areas where they can attend physical schools.
Matching Division
The Matching Division operates the ALT (assistant language teacher) Placement business and the Personnel
Placement business in order to provide opportunities to connect organizations and individuals. It creates matches with ahigh retention rate by going beyond the skill requirements of companies and local governments to provide support for
matching organizations and individuals based on the characteristics of each individual using data based on “Motivation
Engineering,” the core technology of the Group.
In this segment, segment revenues for the first nine months of 2023 were ¥11,416 million (a 5.9% increase) andsegment income was ¥4,764 million (an 9.8% increase). An overview of operating results by business for the first ninemonths of 2023 is as follows.
ALT Placement Business
The ALT Placement business dispatches non-Japanese assistant language teachers (ALTs) to elementary, junior highand high schools throughout Japan and provides English-language instruction services on contract, in order to match nonJapanese people who want to work in Japan with local governments. In this business, barriers to entry are extremely highdue to the importance placed on relationships of trust with customers and a company’s track record, and the Group has
established the predominant number-one share among private companies.
In this business, revenues for the first nine months of 2023 were ¥8,835 million (a 0.7% decrease) and gross profit
was ¥2,226 million (a 10.7% decrease).
In the first nine months, revenues were essentially flat, but gross profit decreased substantially. From October 2022, a
law requiring ALTs who work 20 or more hours per week to be enrolled in the social insurance program is being applied,
starting with companies with the most employees. As the private company with the largest share, the law was applied toour company earlier than our competitors. Consequently, the Group was aware that the competitive environment in fiscal
2023 would be challenging, but even under these conditions, revenues were maintained at the level of the same period of
the previous year, and progressed in line with the Group’s original expectations. The Group will continue to aim forfurther expansion of the business by shifting some services online and utilizing ICT, in addition to further enhancing thequality of ALTs, one of its strengths, to respond to diversifying customer needs.
Personnel Placement Business
The Personnel Placement business operates a referral service for human resources that introduces the human resources
necessary for business growth in order to find the right fit between job applicants and companies. Mainly, it provides
6

mid-career referrals that match working adults looking to change jobs with companies, and conducts new graduate
recruiting and referrals that match university students looking for employment with companies.
In this business, revenues for the first nine months of 2023 were ¥2,604 million (a 37.5% increase) and gross profit
was ¥2,561 million (a 37.7% increase).
In the first nine months, OpenWork Inc., which has a particularly high growth rate, continued to steadily accumulate
registered users as well as employee online reviews and evaluation scores. The direct recruiting service (OpenWork
Recruiting) saw an increase in the number of website visits resulting from continued investment in marketing, which led
to an increase in the number of new online resume registrations. The cumulative number of online resume registrations(working adults and students) has grown to approximately 950,000. In addition, as a result of efforts to stimulate
recruiting activity among existing customers, recruiting by employers and registered agencies increased, and revenues
from this service were ¥1,381 million (a 128.0% increase).
This business will continue to expand synergy with the Organizational Development Division, and will ramp up its
matching services by considering not only the skills of individuals but also the type of job seekers.
Venture Incubation
In addition to its divisions, the Group conducts venture incubation. In venture incubation, the Group provides its
know-how in organizational and personnel consulting in addition to funding, as well as support on an organizational levelfor growing venture companies that aim to list their stock. The two main criteria for selection of investees are sympathy
with the idea of “creation of Motivation Companies” and aim to list stock. Gains on sales and other results generated fromventure incubation are recorded in retained earnings on the condensed consolidated statements of financial position, or
under other income or other expenses on the consolidated statements of operations.
(2) Overview of Financial Position for the Nine Months Ended September 30, 2023
Total assets as of September 30, 2023 were ¥30,594 million, an increase of ¥1,686 million from the end of theprevious year. This was mainly due to a ¥1,585 million increase in cash and cash equivalents.
Total liabilities as of September 30, 2023 were ¥16,997 million, a decrease of ¥667 million from the end of theprevious year. This was mainly due to factors including ¥541 million in interest-bearing and other financial liabilities.
Total equity as of September 30, 2023 was ¥13,597 million, an increase of ¥2,354 million from the end of theprevious year. This was mainly due to factors including a ¥1,310 million increase in capital surplus associated withposting net income attributable to owners of the parent and an increase of ¥591 million in non-controlling interests.
(3) Overview of Cash Flow for the Nine Months Ended September 30, 2023
Cash and cash equivalents (“cash”) as of September 30, 2023 were ¥7,698 million, an increase of ¥1,585 million
during the period.
Cash flow during the nine months ended September 30, 2023 was as follows.
Cash Flow from Operating Activities
Net cash provided by operating activities was ¥2,864 million, an increase of ¥1,208 million in the same period of theprevious year. The principal factor decreasing cash was a ¥934 million increase in trade and other receivables comparedwith the same period of the previous year, while the principal factors increasing cash included a ¥249 million increase inincome before income taxes compared with the same period of the previous year, a ¥658 million increase in trade andother payables, and a ¥1,190 million increase in other.
Cash Flow from Investing Activities
Net cash provided by investing activities was ¥400 million, an increase of ¥188 million compared with the same
period of the previous year. Principal factors decreasing cash included the non-recurrence of proceeds from business
transfer that occurred in the same period of the previous year and a decrease of ¥792 million in proceeds from refund of
security deposits and guarantees compared with the same period of the previous year, while the principal factors
increasing cash included a ¥293 million decrease in payments for acquisition of intangible assets, a ¥987 million increasein proceeds from the sale of investment securities, and a ¥209 million decrease in payments for fulfillment of asset
retirement obligations.

7

Cash Flow from Financing Activities
Net cash used in financing activities was ¥1,677 million, a decrease of ¥738 million compared with the same periodof the previous year. The principal factor decreasing cash was a decrease of ¥1,300 million in proceeds from long-term
financial liabilities compared with the same period of the previous year, while the principal factors increasing cash
included a ¥900 million net increase in short-term financial liabilities, a decrease of ¥735 million in repayment of longterm financial liabilities, and an increase of ¥452 million in proceeds from payments from non-controlling interests.
(4) Forecast
In the first nine months of 2023, operating income increased compared with the same period of the previous year, driven
by the recovery of the e Consulting & Cloud business and the substantial growth of the Personnel Placement business,both of which have high profit margins. In the first nine months of 2022, the Group recorded one-time income of
approximately ¥700 million on the reversal of lease liabilities as part of the relocation and closure of schools in the Career
School business. Excluding one-time items (income and expenses), operating income increased substantially by 20.0%
compared with the same period of the previous year. Operating income is progressing as planned toward the full-year
forecast, and for the fiscal year ending December 31, 2023, the Group has forecast operating income of ¥4,670 million (a28.7% increase), which would be a new record.
The Group views changes in the labor market as a crucial opportunity, and for the time being will focus on the Consulting& Cloud business of the Organizational Development Division, which has significant growth potential. The Group
believes that there is still ample room for expansion in support of domestic companies, and plans to leverage its uniqueability to comprehensively support human capital management through the cycle of identification of problems throughdiagnosis, transformation of those problems, and disclosure of the transformation results. To achieve further growth, theGroup considers it essential to shift its consulting services to a recurring revenue business model, and is focusing on
increasing the balance of orders (total orders for future projects obtained at a given point in time). As of September 30,
2023, orders increased substantially compared with the same period of the previous year, and the transition to a recurring
revenue business model is making steady progress. Orders for projects in the year ending December 2024 have increased
substantially compared with the same period of the previous year (orders for projects in the year ending December 2023
as of September 30, 2022). The Group is making steady progress in securing sales for 2024. Going forward, the Groupwill achieve substantial growth by proactively making investments in businesses, including through M&As, and in humanresources. It will also focus on expansion of cross-selling and enhancement of long-term support.

8

2. Condensed Consolidated Financial Statements and Main Notes(1) Condensed Consolidated Statements of Financial Position(Millions of yen, rounded down to the nearest million)

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current financial assets
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Other non-current financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

9

As of
December 31, 2022

As of
September 30, 2023

6,112
3,299
183
12
1,025
10,633

7,698
3,752
240
25
787
12,505

599
3,308
9,347
2,417
1,947
572
81
18,27528,908

624
3,458
9,347
2,240
1,854
495
68
18,08930,594

(Millions of yen, rounded down to the nearest million)

LIABILITIES AND EQUITY
LIABILITIESCurrent liabilities
Trade and other payables
Contract liabilities
Interest-bearing and other financial liabilities
Lease liabilities
Income tax payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Interest-bearing and other financial liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
EQUITY
Equity attributable to owners of the parent
Share capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity

10

As of
December 31, 2022

As of
September 30, 2023

1,858
1,461
5,064
905
712
8
1,725
11,737

1,771
1,281
5,386
1,007
930
45
1,720
12,142

2,332
2,824
318
328
124
5,927
17,664

1,468
2,549
334
382
119
4,854
16,997

1,380
4,464
(320)
5,385
(1,851)
9,057
2,185
11,24328,908

1,380
4,641
(288)
6,696
(1,609)10,8202,777
13,59730,594

(2) Condensed Consolidated Statements of Operations and Comprehensive Income
Condensed Consolidated Statements of Operations
Nine Months Ended September 30(Millions of yen, rounded down to the nearest million)

Continuing Operations
Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating income
Financial revenues
Financial expenses
Income before income taxes
Income taxes
Net income
Discontinued Operations
Profit from discontinued operations
Net income(Attributable to)
Owners of the parent
Non-controlling interests
Total

Nine months ended
September 30, 2022

Nine months ended
September 30, 2023

24,39912,32912,070
9,464
776
238
3,143
20
129
3,034
1,082
1,951

25,052
12,00813,043
9,809
317
228
3,323
20
60
3,283
1,200
2,082

47
1,998

—

2,082

1,865
132
1,998

1,829
253
2,082
(Yen)

Earnings per share attributable to owners of the parent
Basic earnings per share
Continuing operations
Discontinued operations
Basic earnings per share
Diluted earnings per share
Continuing operations
Discontinued operations
Diluted earnings per share

16.30
0.42
16.73
16.30
0.42
16.73

11

16.39
—

16.39
16.36
—

16.36

Three Months Ended September 30(Millions of yen, rounded down to the nearest million)

Continuing Operations
Revenues
Cost of sales
Gross profit
Selling, general and administrative expenses
Other income
Other expenses
Operating income
Financial revenues
Financial expenses
Income before income taxes
Income taxes
Net income
Discontinued Operations
Profit (loss) from discontinued operations
Net income(Attributable to)
Owners of the parent
Non-controlling interests
Total

Three months ended
September 30, 2022

Three months ended
September 30, 2023

7,633
4,035
3,598
3,037
647
34
1,173
11
30
1,154
273
880

8,337
4,131
4,205
3,195
179
80
1,108
10
25
1,093
433
659

(1)
879

—

659

839
40
879

573
85
659
(Yen)

Earnings per share attributable to owners of the parent
Basic earnings (loss) per share
Continuing operations
Discontinued operations
Basic earnings (loss) per share
Diluted earnings (loss) per share
Continuing operations
Discontinued operations
Diluted earnings (loss) per share

12

7.53
(0.01)
7.52

—

5.14

7.53
(0.01)
7.52

—

5.14
5.13
5.13

Condensed Consolidated Statements of Comprehensive Income
Nine Months Ended September 30(Millions of yen, rounded down to the nearest million)

Nine months ended
September 30, 2022
Net income
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net gain (loss) on revaluation of financial assets
measured at fair value through other comprehensive income
Total of items that will not be reclassified to profit or loss

Nine months ended
September 30, 2023

1,998

2,082

62
62

603
603

Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total of items that may be reclassified to profit or loss
Total other comprehensive income
Total comprehensive income

(10)
(10)
52
2,050

(2)
(2)
601
2,683

(Attributable to)
Owners of the parent
Non-controlling interests
Comprehensive income

1,918
132
2,050

2,430
253
2,683

13

Three Months Ended September 30(Millions of yen, rounded down to the nearest million)

Three months ended
September 30, 2022
Net income
Other comprehensive income
Items that will not be reclassified to profit or loss:
Net gain (loss) on revaluation of financial assets
measured at fair value through other comprehensive income
Total of items that will not be reclassified to profit or loss

Three months ended
September 30, 2023

879

659

78
78

(306)
(306)

Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total of items that may be reclassified to profit or loss
Total other comprehensive income
Total comprehensive income

(3)
(3)
75
955

(0)
(0)
(306)
352

(Attributable to)
Owners of the parent
Non-controlling interests
Comprehensive income

914
40
955

266
85
352

14

(3) Condensed Consolidated Statements of Changes in Equity
Nine Months Ended September 30, 2022
(Millions of yen, rounded down to the nearest million)
Equity attributable to owners of the parent

January 1, 2022
Cumulative effect ofchange in accounting
policyBalance at beginning of
period reflecting changein accounting policy
Net income
Other comprehensive
incomeTotal comprehensive
incomeDividends fromsurplus
Share-based paymenttransactions
Transfer from othercomponents ofequity to retained
earnings
Total transactions withthe owners
September 30, 2022

SharecapitalCapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

1,380

3,879

(320)

4,406

(1,853)

7,493

1,154

8,648

—

—

—

(219)

—

(219)

—

(219)

1,380
—

3,879
—

(320)
—

4,187
1,865

(1,853)
—

7,274
1,865

1,154
132

8,429
1,998

—

—

—

—

52

52

—

52

—

—

—

1,865

52

1,918

132

2,050

—

—

—

(635)

—

(635)

—

(635)

—

—

—

—

40

40

—

40

—

—

—

(12)

12

—

—

—

—
1,380

—
3,879

—
(320)

(648)
5,404

53
(1,747)

(594)
8,597

—
1,287

(594)
9,884

Nine Months Ended September 30, 2023
(Millions of yen, rounded down to the nearest million)
Equity attributable to owners of the parent

January 1, 2023
Net income
Other comprehensive
incomeTotal comprehensive
incomeChange in ownershipinterest in
subsidiaries
Dividends fromsurplus
Exercise of stockacquisition rights
Share-based paymenttransactions
Transfer from othercomponents ofequity to retained
earnings
Total transactions withthe owners
September 30, 2023

SharecapitalCapitalsurplusTreasurysharesRetainedearnings

Other
componentsof equity

Total equity
attributableto owners of
the parent

Noncontrollinginterests

Total
equity

1,380
—

4,464
—

(320)
—

5,385
1,829

(1,851)
—

9,057
1,829

2,185
253

11,243
2,082

—

—

—

—

601

601

—

601

—

—

—

1,829

601

2,430

253

2,683

—

175

—

—

—

175

338

513

—

—

—

(848)

—

(848)

—

(848)

—

30

—

—

(30)

—

—

—

—

(28)

31

—

1

4

—

4

—

—

—

329

(329)

—

—

—

—
1,380

177
4,641

31
(288)

(518)
6,696

(358)
(1,609)(667)
10,820

338
2,777

(329)
13,59715

(4) Condensed Consolidated Statements of Cash Flow
(Millions of yen, rounded down to the nearest million)

Cash flow from operating activities
Income before income taxes
Profit before tax from discontinued operations
Depreciation and amortization
Loss on impairment(Profit) loss from business transfer
Loss (gain) on valuation of investment securities
Financial revenues and financial expenses
Decrease (increase) in trade and other receivables
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Other
SubtotalInterest and dividends received
Interest paid
Income tax refund
Income taxes paid
Net cash provided by operating activities
Cash flow from investing activities
Payments for acquisition of property, plant and equipment
Payments for acquisition of intangible assets
Proceeds from business transfer
Payments for acquisition of investment securities
Proceeds from sale of investment securities
Payments for security deposits and guarantees
Proceeds from refund of security deposits and guarantees
Payments for fulfillment of asset retirement obligations
Other
Net cash provided (used in) investing activities
Cash flow from financing activities
Net increase (decrease) in short-term financial liabilities
Proceeds from long-term financial liabilities
Repayment of long-term financial liabilities
Proceeds from exercise of stock acquisition rights
Payments of cash dividends
Repayment of lease liabilities
Proceeds from payments from non-controlling interests
Payments for acquisition of treasury shares
Net cash used in financing activities
Cash and cash equivalents translation adjustment
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the quarter
Cash and cash equivalents at end of the quarter

16

Nine months
ended
September 30, 2022

Nine months
ended
September 30, 2023

3,034
19
1,291
160
(50)
20
109
481
(72)
(743)
(1,276)
2,975
5
(115)
2
(1,212)
1,655

3,283
—

1,249
185
—

26
40
(453)
(57)
(85)
(85)
4,103
10
(51)
45
(1,243)
2,864

(71)
(693)
441
(79)
1
(22)
924
(282)
(4)
212

(108)
(400)

(500)
1,400
(1,777)400
100(1,041)
62
(844)
(805)
452
(0)
(1,677)
(1)
1,585
6,112
7,698

—

(634)
(904)
—
—

(2,416)
(1)
(549)
4,917
4,368

—

(79)
989
(38)
131
(73)
(20)
400

(5) Notes to Condensed Consolidated Financial Statements(Change in Accounting Policies)(Income Taxes)
The Group has adopted the following standard as of the first quarter of 2023.
IFRS
Summary of New Establishment or Amendment
IAS 12

Income Taxes (May 2021
amendment)

Clarifies deferred tax accounting for leases and decommissioning
obligations

This amendment clarifies that entities should recognize deferred tax liabilities and deferred tax assets on certaintransactions (e.g., leases and decommissioning obligations) that give rise to equal amounts of taxable and deductible
temporary differences on initial recognition.
This amendment is applied retrospectively to the condensed quarterly consolidated financial statements and theconsolidated financial statements for the same period of the previous fiscal year and for the previous fiscal year.
As a result, in the consolidated statements of financial position for the previous fiscal year, deferred tax assets
decreased by ¥44 million, deferred tax liabilities increased by ¥58 million and retained earnings decreased by ¥102
million compared with the amounts before the retrospective application. In the condensed consolidated statements ofoperations, income taxes increased by ¥19 million and profit from continuing operations decreased by ¥19 million. In
addition, profit from discontinued operations increased by ¥140 million and net income increased by ¥120 million.
Basic earnings per share from continuing operations and diluted earnings per share from continuing operations forthe nine months ended September 30, 2022 each decreased by ¥0.18. Basic earnings per share from discontinued
operations and diluted earnings per share from discontinued operations each increased by ¥1.26, and basic earnings per
share and diluted earnings per share each increased by ¥1.08.
Because the cumulative effect was reflected in equity at the beginning of the nine months ended September 30, 2022,
the beginning balance of retained earnings in the condensed consolidated statements of changes in equity after
retrospective application decreased by ¥219 million.
(Significant Accounting Policies)
The significant accounting policies applied in these condensed consolidated financial statements are the same as those
applied in the consolidated financial statements for the previous fiscal year except for those noted in “Change in
Accounting Policies” and in the item below.
Income taxes expense for the nine months ended September 30, 2023 was calculated using the estimated averageannual effective tax rate.
(Stock-Based Compensation)
The Group has introduced a restricted stock compensation plan as an equity-settled, share-based compensation plan for
executive officers effective from the six months ended June 30, 2023. Restricted stock compensation is measured byreferring to the fair value on the date the shares are granted, and is recognized as an expense over the vesting period fromthe grant date, with the corresponding amount recognized as an increase in equity.
(Notes Regarding Significant Accounting Estimates and Judgements)
In preparing the consolidated financial statements, management makes judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The
results of accounting estimates may differ from actual results.
The estimates and their underlying assumptions are reviewed on an ongoing basis. The effects of a review ofaccounting estimates are recognized in the accounting period in which the estimates are reviewed as well as in future
periods.
Estimates and estimate-related judgments that have a significant impact on these condensed consolidated financial
statements are the same as those in the condensed consolidated financial statements for the same period of the previous
fiscal year.
(Notes Regarding Assumption of Going Concern)
None applicable17

(Significant Subsequent Events)(Authorization of Share Buyback)At a Board of Directors meeting held on November 13, 2023, the Group authorized the repurchase of shares of its
common stock pursuant to Article 459, paragraph 1 of the Companies Act of Japan, and Article 43 of the Articles ofIncorporation.
(1) Reason for the Share Buyback
The Group is implementing a flexible capital policy to enhance capital efficiency and shareholder returns, after
comprehensively considering its financial condition and stock price. Having sufficiently secured the cash necessary to fundgrowth investments, the Group believes that its future profitability is not fully reflected in its stock price, and therefore
made the decision to buy back its own shares.
(2) Details of the Share Buyback
1) Type of shares to be bought back2) Total number of shares to be bought back3) Total amount of buyback4) Buyback period

Common stock
4,000,000 shares (upper limit)(3.58% of total shares issued, excluding treasury stock)¥2 billion (upper limit)
November 14, 2023 – June 30, 202418