Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending September 30, 2019
(FY9/19) (Nine Months Ended June 30, 2019) [IFRS]
Company name:

August 14, 2019
Stock Exchange
TSE 1stListing:
URL https://www.evolableasia.com/

Evolable Asia Corp.

Stock code:
6191
Representative:
Hideaki Yoshimura, CEOContact:
Yusuke Shibata, Representative Director and CFO
Scheduled date of filing of Quarterly
Scheduled date of payment ofAugust 14, 2019
Report:dividend:
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results briefing: Yes (for institutional investors and securities analysts)(TEL) 03 (3431)6191―(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter (October 1, 2018 to June 30, 2019) of FY9/19(1) Consolidated results of operations(Percentages represent year-on-year changes)
OperatingincomeNet sales
Millionsof yenNine months ended March
31, 2019
Nine months ended March
31, 2018%

Millionsof yen16,123 154.9
6,324

―

Profit before
income taxes

Profit attributable to Total comprehensive
owners of parent
incomeMillions
Millions%%%of yenof yen%Millionsof yen%Millionsof yen183 △82.5

120

△88.4

35

△95.2

1,041

―

751

―

1,050

―

△29 △104.5

11

△98.4

661

740

―

―

Fully diluted profit per
share

Profit per share
Yen

Yen

△1.61

△1.61

38.20

36.85

Nine months ended March
31, 2019
Nine months ended March
31, 2018

Profit(2) Consolidated financial position
Total assets

Ratio of equity
Equity attributable toattributable to owners ofowners of parent
parentTotal equity

Millions of yen

Millions of yen

Millions of yen%

30,38824,939

9,043
5,567

8,615
5,186

28.35
20.80

As of June 30, 2019
As of September 30, 2018

2. Dividends
Dividend per share
1Q–end2Q–end3Q–endYear–end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended
―
0.00
―
10.00
10.00
Sep. 30, 2018
Fiscal year ending―
0.00―
Sep. 30, 2019
Fiscal year ending Sep. 30,――
2019 (Estimated)
Note: Revision to the most recently announced dividend forecast: None
Evolable Asia Corp. plans to pay the year-end dividend for the fiscal year ending September 30, 2019, based on a dividend payout ratioof approximately 20%. Evolable Asia Corp. will not disclose the dividend forecast since the full-year consolidated financial forecasts
are not disclosed due to the difficulty of making reasonable estimates.

―1―

* Notes(1) Changes in significant subsidiaries during the period (changes in specified

Nonesubsidiaries resulting in changes in scope of consolidation):
Newly included:– companies

Excluded:– companies(2) Changes in accounting policies and accounting–based estimates, and restatements
1) Change of the accounting policy required under IFRS:

None2) Changes in accounting policies other than (i) above:None3) Changes in accounting–based estimates:

None(3) Numbers of outstanding shares (common stock)1) Number of shares outstanding as of the end of the As of June 30,
period (including treasury shares)

2) Number of treasury shares as of the end of the As of June 30,
period19,554,500

As of Sep. 30, 2018

17,708,000―

As of Sep. 30, 2018

―

2019

2019

3) Average number of shares issued during the period Ninemonthsended June 30,

Nine months ended
18,482,840

17,327,311
June 30, 20182019

* The current quarterly financial report is exempt from the quarterly review procedures performed by certified public accountants or
audit corporations.
* Explanation of appropriate use of earnings forecasts, and other special items
Consolidated financial forecasts for the current fiscal year are not presented due to the difficulty of calculating reasonable forecasts. For
the reasons for this, see “Outlook” on page 6 of the Consolidated Financial Results for the Fiscal Year Ended September 30, 2018
(FY9/18) announced on November 13, 2018.

―2―

○Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance………………………………………………4(1) Explanation of Results of Operations ……………………………………………………………………………………4(2) Explanation of Financial Position ………………………………………………………………………………..………5(3) Explanation of Consolidated Forecast and Other Forward-looking Statements……………………………………….…6
2. Condensed Consolidated Financial Statements and Notes to the Condensed Consolidated Financial Statements ………7
(1) Condensed Consolidated Statement of Financial Position…………………………………………………………….…7(2) Condensed Consolidated Statement of Income and Condensed Consolidated Statement of Comprehensive Income ….8(3) Condensed Consolidated Statement of Changes in Equity ……………………..………………………………………12(4) Condensed Consolidated Statement of Cash Flows ……………………………………………………………….……13(5) Notes to Condensed Consolidated Financial Statements …………………………………………………………….…14
Notes on going concern assumptions …………………………………………………………………………………14
Significant changes in shareholders’ equity ……………………………………………………………..……………14
Segment information, etc. …………………………………………………………………………………….………14
Important subsequent events ……………………………………………………………………………………….…16―3―

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
Evolable Asia Corp. (hereinafter the “Company”) and its consolidated subsidiaries (hereinafter collectively the “Group”) disclosed
consolidated financial statements in accordance with IFRS starting from previous fiscal year, and the figures for the first six months ofthe previous fiscal year have also been restated according to IFRS for comparative analysis.
During the third quarter under review, the global economy maintained a robust performance mainly driven by advanced economies.
However, the global economic outlook became increasingly uncertain amid trade tensions between the US and China. The Japanese
economy remained on a moderate recovery path, reflecting steady improvement in employment and income conditions. The economy
continued to expand at a solid pace, supported by increased domestic demand and inbound tourist demand against the background of theupcoming Tokyo Olympics in 2020 and EXPO 2025 in Osaka.
In the travel industry, the number of Japanese citizens who left Japan in the period from January to June 2019 totaled 9.54 million,
increasing about 0.75 million from the same period of the previous fiscal year according to the statistics released by the Japan National
Tourism Organization (JNTO). In addition, the number of foreigners who visited Japan from January to June 2019 surpassed 16.63
million. The number is rising steadily toward 40 million, the target for 2020 set in the Tourism Vision to Support the Future of Japan,
which the Japanese government adopted in March 2016.
Under these conditions, the Company continued expanding its operations by seeking to diversify its service lines with a focus on salesof domestic airline tickets and international airline tickets as an online travel agency and significantly investing in advertising to raise
recognition of its main brand AirTrip. The Company also continued to enhance its services for foreign visitors to Japan, making the mostof its online travel business expertise.
In the IT Offshore Development Business, which was launched in 2012, the Company steadily won customers in numerous businesscategories and increased the number of engineers employed, focusing on the development of lab–type facilities in Vietnam. The numberof engineers hired grew to 1,000 as of the end of June 2019. In the Investment Business, which has been developing in earnest since thestock was listed, the Company has been investing in growing companies. As of the end of June 2019, the Company has invested in 56
companies.
In this business environment, the Group achieved consolidated net sales of 16,123 million yen (up 154.9% year on year), a
consolidated operating income of 183 million yen (down 82.5% year on year), a consolidated profit before income taxes of 120 million
yen (down 88.4% year on year), and a consolidated loss attributable to owners of parent of 29 million yen (compared to consolidated
profit attributable to owners of parent of 661 million yen a year earlier) in the first nine months of the fiscal year under review.
Operating results by segment are as follows.
(1) Online Travel Agency Business
The Group offers the following four services in the Online Travel Agency Business segment.
・BtoC services (operation of PC and smartphone websites for selling travel commodities directly to general consumers)
The Company made considerable upfront investments in mass marketing, including TV commercials and train advertising, to acquire
new customers and build a stable customer base in the future. The Company also improved user interfaces to increase the number of
repeat customers. These contributed to a steady increase in the number of service users.
The recognition of the Company’s brand AirTrip increased, and strategic pricing and the active input of branding costs were conductedto acquire customers.
・BtoBtoC services (travel content provision under brands owned by business partners)
The enhanced development of alliances with major partners, the provision of services to match the needs of major partners, andenhanced communication with partners contributed to an increase in service use. In addition, like the BtoC services, measures formarketing and alliances with an emphasis on increasing customer numbers were promoted.
・BtoB services (wholesale to other travel agencies)
Net sales were solid, reflecting trends in the airline industry and policies enforced by business partners.

―4―

・BTM services (centralized management of internal approval procedures and arrangements associated with corporate business trips)
These services basically adopt a business model under which net sales expand in a manner that is linked with an increase in the numberof corporate customers and a rise in their usage rate. The services achieved growth attributable to initiatives taken by the Group, including
the addition of salespeople and the identification of existing customers who used the services at a relatively low rate.
・Services for foreign visitors (business of providing various BtoC services to visitors to Japan)
The Company offers various services for foreign visitors to Japan, including Wi-FI rental, camping car rental, currency exchange andweb media serves. In every business line, net sales and income grew steadily due to an increase in visitors to Japan, multilingual customer
service and stronger marketing.
As a result of the factors stated above, net sales for the Online Travel Agency Business segment amounted to 14,063 million yen (up204.0% year on year), and segment income came to 60 million yen (Segment loss of 105 million yen at the end of the same period lastyear) in the first nine months of the fiscal year under review.
(2) IT Offshore Development BusinessIn the IT Offshore Development Business segment, the Group offers lab-type facility development services to customers consisting
mainly of e-commerce operators, web solution providers, and game and system developers in Ho Chi Minh, Hanoi and Da Nang in
Vietnam.
The Company’s lab-type facility development model is distinctive in that a team is formed with new dedicated staff members hired foreach customer. The model also enables customers to confirm the state of lab-type facility development on demand. The Company
assumes the assignment of dedicated staff members to each team on a medium- to long-term basis. For that reason, the success or failureof development depends on employing workers suited to customer demands and motivating the respective engineers more.
In addition, these services basically adopt a business model under which customers are billed on the basis of man-months and thenumber of workers. During the consolidated fiscal year under review, an increase in the number of engineers and a rise in unit prices due
to improvements in development efficiency contributed to an increase in sales.
As a result of the factors stated above, net sales for the IT Offshore Development Business segment reached 1,817 million yen (up 13.7%
year on year), and segment income totaled 134 million yen (up 25.2% year on year).
(3) Investment BusinessIn the Investment Business segment, the Group emphasizes synergies with the existing businesses and expands service lines throughaggressive M&A and capital alliances. The Group is pursuing investment in growing companies to improve profitability. During theconsolidated fiscal year under review, the Group had increased the number of companies in which it invests to 56. As a result, net sales
for the Investment Business segment stood at 242 million yen (up 139.6% year on year), and segment income was 473 million yen (down
65.9% year on year) in the first nine months of the fiscal year under review.

(2) Explanation of Financial Position(Assets)
Total assets increased 5,459 million yen from the end of the previous fiscal year, to 30,388 million yen at the end of the third quarter
under review. This result was mainly due to an increase of 3,045 million yen in cash and deposits, and an increase of 903 million yen innotes and accounts receivable – trade and other receivables.
(Liabilities)
Liabilities increased 1,973 million yen from the end of the previous fiscal year, to 21,345 million yen at the end of the third quarter underreview. This result primarily reflected an increase of 411 million yen in trade and other payables, and an increase of 862 million yen ininterest-bearing debt.
(Equity)
Net assets rose 3,475 million yen from the end of the previous fiscal year, to 9,043 million yen at the end of the third quarter underreview. This result was mainly attributable to an increase of 1,819 million yen in capital stock and a rise of 1,642 million yen in share―5―premium.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
Consolidated financial forecasts for the current fiscal year are not presented due to the difficulty of calculating reasonable forecasts as
explained in the Consolidated Financial Results for the Fiscal Year Ended September 30, 2018 (FY9/18) announced on November 13,
2018.

―6―

2. Condensed Consolidated Financial Statements and Notes to the Condensed Consolidated Financial Statements(1) Condensed Consolidated Statement of Financial Position(Millions of yen)
FY9/18(as of Sep. 30, 2018)

Third Quarter of FY9/19(as of June 30, 2019)

AssetsCurrent assets
Cash and cash equivalents
Notes and accounts receivable – tradeand other receivables
Other financial assets

5,320

8,365

4,442

5,345

3,889

4,649

Inventories

87

248

Income taxes receivable

132

167

Other current assets

1,331

975

Total current assets

15,202

19,752

Property, plant and equipment

1,111

1,308

Goodwill

5,167

5,451

Intangible assets

2,236

2,533

Other financial assets

1,055

1,178

Other non–current assets

83

60

Deferred tax assets

82

103

9,736

10,63624,93930,388

4,333

4,745

6,802

6,801

428

596

Non-current assets

Total non–current assets
Total assets
Liabilities and equity
Liabilities
Current liabilities
Operating payables and otheroperating payables
Interest–bearing debt
Other financial liabilities
Accrued income taxes

80

155

Other current liabilities

3,281

3,834

Total current liabilities

14,926

16,133

4,009

4,872

Other financial liabilities

61

42

Provisions

76

82

Deferred tax liabilities

288

205

Non–current liabilities
Interest–bearing debt

Other non-current liabilities

8

9

Total non-current liabilities

4,444

5,211

19,371

21,345

1,100

2,919

Share premium

2,117

3,759

Retained earnings

1,963

1,925

Total liabilities
EquityCapital stock

Other items of equity
Total equity attributable to owners ofparentNon–controlling interests

5

11

5,186

8,615

380

427

Total equity

5,567

9,043

24,93930,388

Total liabilities and equity―7―(2) Condensed Consolidated Statement of Income and Condensed Consolidated Statement of Comprehensive Income
Condensed Consolidated Statement of Income
For the First nine-month Period(Millions of yen)
Nine months ended June 30,
2018(Oct. 1, 2017 – Jun. 30, 2018)
Net sales

Nine months ended June 30,
2019(Oct. 1, 2018 – Jun. 30, 2019)

6,324

16,123

Cost of sales△2,359△7,014Gross profit

3,965

9,109

△4,3201,415
6△9,540430
225

Other expenses

△15

△41

Operating income

1,050

183

Selling, general and administrative expense
Gain and loss on investments
Other income

Finance income

16

14

Finance costs

△25

△77

Profit before income taxes

1,041

120

Corporate income tax expenses

△289

△85

Profit751

35

Profit (loss) attributable to
Owners of parent

661

△29

Non-controlling interests

89

65

751

35

Profit (loss) per share (Yen)

38.20

△1.61

Fully diluted profit (loss) per share (Yen)

36.85

△1.61

Profit per share―8―For the Third Quarter Period(Millions of yen)
Note

Third quarter of FY9/18(April 1, 2018 – June 30, 2018)

Third quarter of FY9/19(April 1, 2019 – June 30, 2019)

2,875

5,505

△1,140△2,279Net sales
Cost of sales
Gross profit

1,734

3,225

△1,944475△3,296
166

4

4

Other expenses△9△7Operating income

260

92

Selling, general and administrative expense
Gain and loss on investments
Other income

Finance income

05

Finance costs
Profit before income taxes
Corporate income tax expenses

△12
247
△91

△31
67
△96

Profit

156

△29

148

△20

7

△8

156

△29

Profit (loss) per share (Yen)

8.53

△1.07

Fully diluted profit (loss) per share (Yen)

8.24

△1.07

Profit (loss) attributable to
Owners of parent
Non-controlling interests

Profit per share―9―Condensed Consolidated Statement of Comprehensive Income
For the First Nine-month Period(Millions of yen)
Nine months ended June 30,
2018(Oct. 1, 2017 – Jun. 30, 2018)

Nine months ended June 30,
2019(Oct. 1, 2018 – Jun. 30, 2019)

751

35

Items that may be reclassified as profit or loss
Translation adjustments of foreign
operations
Cash flow hedge

△10

△22

0

△1

Total of items that may be reclassified as
profit or loss

△10

△23

Total of other comprehensive income, net of tax

△10

△23

Comprehensive income

740

11

Owners of parent

656

△42

Non–controlling interests

84

54

ProfitOther comprehensive income, net of tax

Comprehensive income attributable to―10―For the Third Quarter Period(Millions of yen)
Third quarter of FY9/18(April 1, 2018 – June 30, 2018)

Third quarter of FY9/19(April 1, 2019 – June 30, 2019)

156

△29

Items that may be reclassified as profit or loss
Translation adjustments of foreign
operations
Cash flow hedge

16

△16

1

△0

Total of items that may be reclassified as
profit or loss

17

△16

Total of other comprehensive income, net of tax

17

△16

Comprehensive income

173

△46

Comprehensive income attributable to
Owners of parent

158

△29

15

△16

ProfitOther comprehensive income, net of tax

Non–controlling interests―11―(3) Condensed Consolidated Statement of Changes in Equity
Nine months ended June 30, 2018 (Oct. 1, 2017 – Jun. 30, 2018)(Millions of yen)
Equity attributable to owners of parent
Capital stock Capital surplus
As of October 1, 2017

Retainedearnings

Other items ofequityTotal

Noncontrollinginterests

Total equity

1,031

815

1,139

5

2,992

402

3,394

Profit

-

-

661

-

661

89

751

Other comprehensive income

-

-

-

△5

△5

△5

△10

-

-

661

△5

656

84

740

Total comprehensive income
Dividends of surplus

-

-

△118

-

△118

△27

△145

Issuance of new shares

36

36

-

-

73

-

73

-

42

-

-

42

16

59

-

1,309

-

-

1,309

△112

1,197

-

△126

-

-

△126

△56

△183

-

-

-

7

7

△6

0

36

1,261

△118

7

1,187

△186

1,001

1,067

2,077

1,682

7

4,836

300

5,137

Increase (decrease) by businesscombination
Increase (decrease) by shareexchanges
Equity transactions with noncontrolling interests
Increase (decrease) throughtransfers and other changes
Total transactions with owners
As of June 30, 2018

Nine months ended June 30, 2019 (Oct. 1, 2018 – Jun. 30, 2019)(Millions of yen)
Equity attributable to owners of parent
Capital stock Capital surplus
As of October 1, 2018

Retainedearnings

Other items ofequity
5

5,186

Total

Noncontrollinginterests

Total equity

380

5,567

1,100

2,117

1,963

Profit (loss)

-

-

△29

-

△29

65

35

Other comprehensive income

-

-

-

△12

△12

△11

△23

Total comprehensive income

-

-

△29

△12

△42

54

11

Dividends of surplus

-

△177

-

-

△177

-

△177

Issuance of new shares

1,819

1,819

-

-

3,638

-

3,638

Increase (decrease) throughtransfers and other changes

-

-

△8

18

9

△7

2

Total transactions with owners

1,819

1,642

△8

18

3,471

△7

3,463

As of June 30, 2019

2,919

3,759

1,925

11

8,615

427

9,043

―12―

(4) Condensed Consolidated Statement of Cash Flows(Millions of yen)
Nine months ended June 30,
2018(Oct. 1, 2017 – Jun. 30, 2018)

Nine months ended June 30,
2019(Oct. 1, 2018 – Jun. 30, 2019)

1,041
230
△1,415
0

120
666
△430
△13

interest expense

25

71(Increase) decrease in trade and other receivables

221

△335

Decrease (increase) in inventories

△2

△66

975
232
217
△62
△573
△422
464
3
△26
△107
333

30
445
166
27
△311
△55
317
12
△70
△28
230

Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments for lease deposits
Collection of lease deposits
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Purchase of shares of subsidiaries resulting in change inscope of consolidation

△123
46
△567
△52
23

△241
121
△904
△101
167

454

50

△355

-

Payments for transfer of business
Other
Net cash provided by (used in) investing activities

△16
△591

△136
△5
△1,050

526
2,700
△284
75

△37
1,867
△1,358
3,595

△183

-

△117
△32
2,683

△176
△6
3,884

Cash flows from operating activities
Profit (loss) before tax
Depreciation and amortization expense
Investment income (loss)
Increase in allowance

Increase (decrease) in trade and other payables
Decrease (increase) in advance payments - trade
Decrease (increase) in deposits received
Increase (decrease) in guarantee deposits received
Decrease (increase) in investment securities for sale
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities

Cash flows from financing activities
Net increase (decrease) in short–term loans payable
Proceeds from long–term loans payable
Repayments of long–term loans payable
Proceeds from issuance of common shares
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation
Dividends paid to owners of the parent company
Other
Net cash provided by (used in) financing activities

△5

△19

Net increase (decrease) in cash and cash equivalents

2,419

3,045

Cash and cash equivalents at beginning of period

2,078

5,320

61

-

4,560

8,365

Effect of exchange rate change on cash and cash equivalents

Increase in cash and cash equivalents resulting from merger
Cash and cash equivalents at end of period―13―(5) Notes to Condensed Consolidated Financial Statements(Notes on going concern assumptions)Not applicable.
(Significant changes in shareholders’ equity)
During the first nine months of the fiscal year under review, exercise of the Second Series, Third Series, Fourth Series, Fifth Series
and Thirteenth Series of Stock Acquisition Rights caused shares outstanding to increase by 1,846,500 shares and caused capital stockand share premium to each increase by 1,819 million yen.
(Segment information, etc.)(1) Summary of reportable segments
The Company’s reportable segments are its business units that have separate financial information available and that are subject toperiodical examinations by the Board of Directors for the purpose of determining the allocation of management resources and evaluating
performance.
Under its “One Asia” vision, the Group aims to serve as a bridge connecting various opportunities and engineers in Asia. With theOnline Travel Agency Business, IT Offshore Development Business and Investment Business as its three mainstay businesses, the Group
classifies these businesses, with their highly unique business models, as its main reportable business segments and draws up anddetermine Group strategies accordingly.
The businesses and main products belonging to each reportable segment are as follows:
Online Travel Agency Business: Online general travel agency service
IT Offshore Development Business: Lab-type offshore development services and BPO services
Investment Business: Investment in growing companies and turnarounds(2) Calculation method of segment income (loss) and segment performance
Transactions between reportable segments are conducted based on the same general terms and conditions that apply to externalcustomers. Transactions between reportable segments are conducted based on the same general terms and conditions that apply to
external customers.
The Group does not allocate assets or liabilities to reportable segments.
(3) Information about segment income (loss) and segment performance
Nine months ended June 30, 2018 (Oct. 1, 2017 – Jun. 30, 2018)(Millions of yen)
Reportable segments
OnlineIT Offshore
TravelInvestment
Developme
AgencyBusiness
nt BusinessBusiness

Total

Other
(Note 1)

Total

Adjustment
Consolidatesd Total(Note 2)External sales revenue

4,625

1,597

101

6,324

0

6,324

-

6,324

Intersegment revenue

-

135

-

135

-

135

△135

-

Total sales revenue

4,625

1,732

101

6,459

0

6,460

△135

6,324

Segment profits (losses)(Note 3)

△105

107

1,391

1,393

△0

1,393

△342

1,050

Financial income

16

Financial expenses△25

Income before income
1,041
taxes
(Note 1) The category “Other” includes the business segments not included in the reportable segments, such as advertising revenue.
(Note 2) The category “Adjustments” mainly consists of corporate expenses that do not belong to any reportable segment andintersegment transactions.
(Note 3) Segment income is adjusted with operating income in the summary consolidated statement of income.

―14―

Nine months ended June 30, 2019 (Oct. 1, 2018 – Jun. 30, 2019)(Millions of yen)
Reportable segments
OnlineIT Offshore
TravelInvestment
Developme
AgencyBusiness
nt BusinessBusiness

Other(Note 1)

Total

Adjustment
Consolidatesd Total(Note 2)

Total

External sales revenue

14,063

1,817

242

16,1230

16,123-

16,123

Intersegment revenue

34

382

-

416

-

416

△416

-

14,0982,200

242

16,5400

16,540△416

16,123

60

134

473

668

△0

668

△485

183

Total sales revenue
Segment profits (losses)(Note 3)Financial income

14

Financial expenses△77

Income before income
120
taxes
(Note 1) The category “Other” includes the business segments not included in the reportable segments, such as advertising revenue.
(Note 2) The category “Adjustments” mainly consists of corporate expenses that do not belong to any reportable segment andintersegment transactions.
(Note 3) Segment income (loss) is adjusted with operating income in the summary consolidated statement of income.

Third quarter ended June 30, 2018 (Apr. 1, 2018 – Jun. 30, 2018)(Millions of yen)
Reportable segments
OnlineIT Offshore
TravelInvestment
Developme
AgencyBusiness
nt BusinessBusiness

Other(Note 1)

Total

Adjustment
Consolidatesd Total(Note 2)

Total

External sales revenue

2,330

544

0

2,875

0

2,875

-

2,875

Intersegment revenue

-

54

-

54

-

54

△54

-

Total sales revenue

2,330

598

0

2,929

0

2,929

△54

2,875

Segment profits (losses)(Note 3)

△135

2

468

334

0

334

△74

260

Financial income

0

Financial expenses△12

Income before income
247
taxes
(Note 1) The category “Other” includes the business segments not included in the reportable segments, such as advertising revenue.
(Note 2) The category “Adjustments” mainly consists of corporate expenses that do not belong to any reportable segment andintersegment transactions.
(Note 3) Segment income (loss) is adjusted with operating income in the summary consolidated statement of income.

―15―

Third quarter ended June 30, 2019 (Apr. 1, 2019 – Jun. 30, 2019)(Millions of yen)
Reportable segments
OnlineIT Offshore
TravelInvestment
Developme
AgencyBusiness
nt BusinessBusiness

Other(Note 1)

Total

Adjustment
Consolidatesd Total(Note 2)

Total

External sales revenue

4,588

675

241

5,505

0

5,505

-

5,505

Intersegment revenue

1

73

-

75

-

75

△75

-

Total sales revenue

4,590

749

241

5,580

0

5,580

△75

5,505

Segment profits (losses)(Note 3)

△86

22

236

172

-

172

△79

92

Financial income

5

Financial expenses△31

Income before income
taxes(Note 1) The category “Other” includes the business segments not included in the reportable segments, such as advertising revenue.
(Note 2) The category “Adjustments” mainly consists of corporate expenses that do not belong to any reportable segment andintersegment transactions.
(Note 3) Segment income (loss) is adjusted with operating income in the summary consolidated statement of income.
(Important subsequent events)
Regarding making National Ryutsu Sangyo Co., Ltd. consolidated subsidiary
At the extraordinary board of directors meeting held on August 6, 2019, the Company resolved to exchange shares with theCompany as the parent company of a wholly owned subsidiary for shareholder exchange and National Ryutsu Sangyo Co., Ltd.
(hereinafter “National Ryutsu Sangyo” ) as a wholly owned subsidiary for shareholder exchange.
Since the calculation has not been completed at this time of the fair value of acquired assets and assumed liabilities on the datewhen the Company acquires control, detailed information about the accounting treatment for the business combination including
goodwill, acquired assets and assumed liabilities on the control acquisition date is not disclosed.
(1) Reason for business combination
As an online travel agency, the Company has expanded its operations by diversifying its service lines with a focus on sales ofdomestic and overseas airline tickets and airing TV commercials to improve recognition of its main brand AirTrip. The Company
has made National Ryutsu Sangyo Co., Ltd. a subsidiary for the purpose of advancing this strategy.
(2) Overview of the acquired company
Name: National Ryutsu Sangyo Co., Ltd.
Business description: Sales of various gift certificates, travel coupons, etc.
(3) Scheduled control acquisition dateAugust 30, 2019―16―

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