Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Year Ended March 31, 2023
(Based on Japanese GAAP)
April 28, 2023
Company name:SMS CO., LTD.

Stock exchange listing: Tokyo
Stock code:
2175
Representative:
Inquiries:

URL

https://www.bm-sms.co.jp/CEOCFO

Natsuki Goto
Masato Sugizaki

Scheduled date of ordinary general meeting of shareholders:
Scheduled date to file Securities Report:

June 23, 2023
June 23, 2023

Scheduled date to commence dividend payments:
Preparation of supplementary material on financial results:

June 26, 2023
Yes

Holding of financial results meeting:

Yes

TEL

03-6721-2400(for institutional investors and analysts)(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(1) Consolidated operating results
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Year ended March 31, 2023
45,667
17.4
7,279
15.2
8,759
13.4
6,406
18.4
Year ended March 31, 2022
38,899
8.2
6,318
15.5
7,726
16.1
5,408
12.7

Earnings per share

Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen
%%%
73.13
19.0
14.4
15.9
61.77
20.8
14.6
16.2

Diluted earnings pershare

Yen
73.51
62.07

Year ended March 31, 2023
Year ended March 31, 2022
(2) Consolidated financial position

Total assets
As of March 31, 2023
As of March 31, 2022

Net assets

Equity ratio

Millions of yen
65,09856,585

Millions of yen
38,421
29,991

Cash flows fromoperating activities
Millions of yen
8,504
9,818

Cash flows frominvesting activities
Millions of yen(3,763)(2,079)Net assets per share%
58.3
52.4

Yen
435.29340.10(3) Consolidated cash flows

Year ended March 31, 2023
Year ended March 31, 2022

Cash flows from
Cash and cash equivalents
at end of period
financing activities
Millions of yen
Millions of yen(3,043)
16,170(3,987)
14,126

2. Cash dividends
Annual dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end

Year ended March 31, 2022
Year ended March 31, 2023
Year ending March 31, 2024
(Forecast)of dividends
Total cash
Dividend payout Ratio
to net assets
dividends (Total) ratio (Consolidated) (Consolidated)

Total

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

––

0.00
0.00

––

10.50
15.00

10.50
15.00

915
1,307

16.9
20.4

3.5
3.9–0.00–––

1–

3. Forecast of consolidated financial results for the year ending March 31, 2024 (from April 1, 2023 to March 31, 2024)
Net sales
Full year

Millions of yen
54,799Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen
%Yen
20.0
8,375
15.0
9,960
13.7
7,127
11.3
81.78

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2023
(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

No
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(3) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2023

87,153,500 shares As of March 31, 2022

87,147,800 shares

Number of treasury shares at the end of the period
As of March 31, 2023

641 shares As of March 31, 2022

561 shares

Average number of shares during the period
Year ended March 31, 2023

87,148,889 shares Year ended March 31, 2022

287,131,740 shares

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2022

As of March 31, 2023

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade

14,640
5,842

16,965
6,510

28
25

20
29

Accounts receivable - otherPrepaid expenses

6,757
665

8,440
793

Other
Allowance for doubtful accounts

27(163)67(274)

27,82332,552746(396)845(448)

Work in process
Supplies

Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net

350

397

864(642)1,024(802)Tools, furniture and fixtures, net

222

222

Machinery, equipment and vehicles
Accumulated depreciation

28(18)

30(23)

Tools, furniture and fixtures
Accumulated depreciation

97

Right-of-use assets
Accumulated depreciation

Machinery, equipment and vehicles, net

688(394)

768(509)

Right-of-use assets,net

294

259

876

886

Goodwill
Software

8,907
3,013

10,0294,156

Trademark right
Customer-related assets

9,581
1,421

11,0531,355

0

0

22,923

26,594

Investment securities
Deferred tax assets

2,825
975

2,629
1,138

Leasehold and guarantee deposits

1,160

1,298

Total investments and other assets

4,962

5,065

28,76232,54656,58565,098

Total property, plant and equipment
Intangible assets

Other
Total intangible assets
Investments and other assetsTotal non-current assets
Total assets3

(Millions of yen)
As of March 31, 2022

As of March 31, 2023

Liabilities
Current liabilities
Accounts payable - trade

307

324

Current portion of long-term borrowings
Accounts payable - other

1,999
8,933

1,901
10,566

Accrued expenses
Income taxes payable

577
1,674

682
1,263

Accrued consumption taxes
Contract liabilities

460
1,004

654
1,073

Deposits received
Provision for bonuses

169
704

180
858

Lease liabilities
Other131
244

152
357

Total current liabilities

16,20718,015

Non-current liabilities
Long-term borrowings

8,054

6,153

173
1,973

178
2,208

185
0

121
–

10,387

8,661

26,594

26,677

Shareholders' equity
Share capital

2,310

2,315

Capital surplus
Retained earnings

114
27,69911933,190(1)(1)

30,12335,624567(1,052)

395
1,917

(484)

2,312

352

484

29,991

38,421

56,58565,098Retirement benefit liability
Deferred tax liabilities
Lease liabilities
Other
Total non-current liabilities
Total liabilities
Net assets

Treasury shares
Total shareholders' equity
Accumulated other comprehensive incomeValuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets

4Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Net sales

38,89945,667

Cost of sales

4,455

5,566

Gross profit

34,443

40,100

Selling, general and administrative expenses

28,12532,820Operating profit

6,3187,279

Non-operating income
Interest income

1217

Share of profit of entities accounted for using equity method
Other

1,509
47

1,526
70

Total non-operating income

1,569

1,615

43

59

Interest expenses
Other

79
38

69
6

Total non-operating expenses

160

135

7,726

8,759

Gain on sale of non-current assets
Gain on reversal of foreign currency translation adjustments

1–050

Total extraordinary income

151

Non-operating expenses
Foreign exchange losses

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sale and retirement of non-current assets

1513

Impairment losses
Loss on sale of investment securities

3––
1

Loss on valuation of investment securities

1021

15

Profit before income taxes

Total extraordinary losses

7,707

8,795

Income taxes - current

2,444

2,575

Income taxes - deferred

(145)

(186)

Total income taxes

2,298

2,389

Profit

5,408

6,406

Profit attributable to non-controlling interests
Profit attributable to owners of parent

5–

–

5,408

6,406

Consolidated statements of comprehensive income(Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Comprehensive income

Fiscal year ended

Fiscal year ended

March 31, 2022

March 31, 2023
5,408

6,406

(0)
2,031

(0)
2,945

590

(147)

2,622

2,797

8,031

9,203

8,031

9,203

–

–

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

6Consolidated statements of changes in equity
Fiscal year ended March 31, 2022
(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning of period

Capital surplus

Retained earnings

Total shareholders'equity

Treasury shares

2,281

85

23,140(0)25,506

–

–

(22)

–

(22)

2,281

85

23,118(0)25,484Issuance of new shares

29

29

–

–

58

Dividends of surplus––(827)–(827)

Profit attributable to ownersof parent–

–

5,408

–

5,408

Purchase of treasury shares–––(0)(0)

Net changes in items otherthan shareholders' equity

–––

––

Cumulative effects ofchanges in accounting
policies
Restated balance
Changes during period

Total changes during period
Balance at end of period

29

29

4,580

(0)

4,639

2,310

114

27,699(1)

30,123

Accumulated other comprehensive income
Valuation difference
on available-for-salesecurities

Foreign currencytranslation adjustment

Total accumulated
other comprehensive
income0(3,107)(3,107)259

22,658

–

–

––

(22)

0(3,107)(3,107)259

22,636

Issuance of new shares

––––

58

Dividends of surplus

––––

(827)

Profit attributable to ownersof parent––––

5,408

Purchase of treasury shares

––––

(0)

Net changes in items otherthan shareholders' equity

567

2,055

2,622

92

2,715

Total changes during period

567

2,055

2,622

92

7,354

Balance at end of period

567(1,052)

(484)

352

29,991

Balance at beginning of period
Cumulative effects ofchanges in accounting
policies
Restated balance

Share acquisition rights

Total net assets

Changes during period7

Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders' equity
Share capital
Balance at beginning of period

Capital surplus

Retained earnings

Total shareholders'equity

Treasury shares

2,310

114

27,699(1)

30,123Issuance of new shares

44–

–

9

Dividends of surplus––(915)–(915)

Profit attributable to ownersof parent

–

–

6,406

–

6,406

Purchase of treasury shares

–––

(0)

(0)

Net changes in items otherthan shareholders' equity

–

––

–

–

Total changes during period

44

5,491

(0)

5,500

2,315

119

33,190(1)

35,624

Changes during period

Balance at end of period

Accumulated other comprehensive incomeValuation difference
on available-for-salesecurities

Foreign currencytranslation adjustment

Total accumulated
other comprehensive
income567(1,052)

(484)

352

Issuance of new shares

––––

9

Dividends of surplus––––(915)

Profit attributable to ownersof parent

––––

6,406

Purchase of treasury shares

––––

(0)

Net changes in items otherthan shareholders' equity

(171)

2,969

2,797

131

2,929

Total changes during period

(171)

2,969

2,797

131

8,430

Balance at end of period

395

1,917

2,312

484

38,421

Balance at beginning of period

Share acquisition rights

Total net assets

29,991

Changes during period

8Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Fiscal year ended

Fiscal year ended

March 31, 2022

March 31, 2023
7,707

8,795

1,649
833

1,977919

Loss (gain) on sale and retirement of non-current assets
Impairment losses

14312–

Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities–110

Share-based payment expensesGain(Loss) on reversal of foreign currency translation

91

126–

(50)

(262)

45(36)

93

Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability

47106(18)

Foreign exchange losses (gains)
Interest expenses

43
79

59
69

Decrease (increase) in trade receivables
Increase (decrease) in accrued consumption taxes

(750)
(49)

(324)
179

Decrease (increase) in accounts receivable - other
Decrease (increase) in prepaid expenses(428)
152(1,649)(114)

Increase (decrease) in contract liabilities
Increase (decrease) in accounts payable - other

54
1,169

(60)
1,523

Depreciation
Amortization of goodwill

adjustments
Share of loss (profit) of entities accounted for using equity
methodIncrease (decrease) in allowance for doubtful accounts

Other, net

213

(105)

Subtotal

10,498

11,586

Interest and dividends received

1522

Interest paid
Income taxes paid

(80)
(616)

(70)
(3,034)

Net cash provided by (used in) operating activities

9,818

8,504

Cash flows from investing activities
Payments into time deposits

(171)

(459)

Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment95(212)227(286)

Purchase of intangible assets
Proceeds from sale of investment securities(1,800)–(2,628)
0–(618)

Payments for acquisition of shares of subsidiaries resulting
in change in scope of consolidation
Other, net
Net cash provided by (used in) investing activities

990(2,079)(3,763)

(Millions of yen)

Cash flows from financing activities
Repayments of long-term borrowings

Fiscal year ended

Fiscal year ended

March 31, 2022

March 31, 2023
(3,070)(2,013)(126)
7(128)
652

8(849)
(0)

(915)
(0)

Net cash provided by (used in) financing activities(3,987)(3,043)

Effect of exchange rate change on cash and cash equivalents

229

345

Repayments of lease liabilities
Proceeds from issuance of share acquisition rights
Proceeds from issuance of shares resulting from exerciseof share acquisition rights
Dividends paid
Other, net

Net increase (decrease) in cash and cash equivalents

3,981

2,043

Cash and cash equivalents at beginning of period

10,144

14,126

Cash and cash equivalents at end of period

14,126

16,17010