FY11/2023 Third Quarter
Supplementary Material
on Financial Results

T&S inc.
TSE Growth: 4055
October 13, 2023

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Table of Contents
FY11/2023 Third QuarterHighlights

p. 3

Financial Results Overview

p. 4

Operating profit

p. 6

Business Performancep. 7

Net sales by Categoryp. 8

Net sales by Customer

p. 9

Quarterly Net Sales and Operating profit

p. 10

Business Environment

p. 11

Status of Engineers

p. 12Statement of Income

p. 13

Balance Sheets

p. 14

Topicsp. 15

FY Earnings Forecast

p. 17

Shareholder Returns

p. 19Copyright ⓒ 2023 T&S inc. All rights reserved.

2

Highlights (FY2023/3Q)(Theme of current term)

Sustainable Growth
１

Record-high revenues continues
Net ｓales
Operating profit
Ordinary profit
Quarterly profit

２

::
:
:

2,520 million yen
461 million yen
465 million yen
326 million yen(Compared to the previous same quarter)（Up 7.8%↑ + 182 million yen）
（Up 9.0%↑ + 37 million yen）
（Up 7.9%↑ + 34 million yen）
（Up 7.7%↑ + 23 million yen）

(YoY)
(ditto)(ditto)(ditto)The semiconductor category remains strong➢ Sales in the semiconductor category increased 17.3% compared to the previous samequarter, maintaining robust performance while mitigating the impact of the semiconductor
market downturn.
➢ Sales in the solutions category increased 8.4% compared to the previous same quarter,
driven by the expansion of orders from clients beyond major ones, contributing to a steadytrend. Orders for contracted development projects from major customers remained stable.
➢ Sales in the advanced technology solutions category declined 21.0% compared to theprevious same quarter. Despite the decline in net sales caused by the repercussions of alarge project recorded in the previous period, the reduction in net sales compared to thesame quarter of the previous year has improved when compared to Q2.

３Operating profit margin increased despite performance-linked
bonuses being reserved➢ The company will continue its policy of sharing a portion of the Operating profit withemployees. A provision of 13 million yen has been recorded for performance-linked bonuses.
➢ Despite an increase in outsourcing and labor costs, the company achieved an operating
profit margin of 18.3% (which is 0.2 percentage points higher than the same quarter of theprevious year).

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3

Financial Results Overview
FY11/2023 Third Quarter

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4

Financial Results Overview (FY2023/3Q)
Record-high revenues continues (Compared to the previous same quarter)
Net ｓales
Operating profit
Ordinary profit
Quarterly profit: 2,520 million yen:
461 million yen:
465 million yen:
326 million yen

Net sales(Million yen)
3,000

2,500

2,338Up
7.8%（Up 7.8%↑ + 182 million yen）
（Up 9.0%↑ + 37 million yen）
（Up 7.9%↑ + 34 million yen）
（Up 7.7%↑ + 23 million yen）

(Million yen)

(YoY)
(ditto)(ditto)(ditto)Operating profit

600

2,520
500

423
2,000

400

1,500

300

1,000

200

500

1000Up9.0%

4610
FY2022/3Q

FY2023/3Q

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FY2022/3Q

FY2023/3Q

5

Operating profit (FY2023/3Q)

Increased Operating profit by 37 million yen(Compared to the previous same quarter)(Million yen)

Increase

Decrease

Operating profit
営業利益Operating
profit rate
18.3%

Operatingprofit rate
18.1%

FY2022/3Q
OperatingprofitIncreasedsales

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Increase in
Cost ofsales

Increase in
SG&A
expenses

FY2023/3Q
Operatingprofit6

Business Performance
Net sales

Ordinary profit(Million yen)

(Million yen)

4,000

800

3,500

700
3,256626

3,000

600
2,732
2,520

2,500

2,297

500

465

2,266

2,133
2,000

419

1,905

400
304

1,500

300

1,000

200

269
202
148

500

10000
FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023(Q3 Actual)

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FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023(Q3 Actual)7

Net sales by Category (FY2023/3Q)
Solutions’ business are performing steadily with an 8.4% increase.
(compared to the previous same quarter)

Semiconductors’ business remain strong with an increase of 17.3%.
(compared to the previous same quarter)

Advanced Technology Solutions’ business decreased by 21.0% in response(compared to the previous same quarter)

to the large-scale projects in the previous period.

Net sales (by category)Sales proportion (by category)(Million yen)

Solution1,725

FY2022/3Q

Up+144 8.4%

FY2023/3Q

AdvancedTechnologySolution

142

1,869

mil yen

5.6%
1,200

1,400

1,600

1,800

2,000

Semiconductor

Semiconductor
433

FY2022/3Q+75508FY2023/3Q

Up
17.3%

508 mil yen
20.2%

FY2023/3Q
2,520 mil yen

200

300

400

500

600

Advanced Technology Solution180

FY2022/3Q△37142

FY2023/3Q
050

100

150200

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250

Down
21.0%

Solution
1,869 mil yen
74.2%(Note) Our business segment is a single segment. Only Net sales arecalculated by category

8Net sales by Customer (FY2023/3Q)
Toshiba G, Hitachi G, Kioxia G

Major customers maintaining steady level
Sales to KioxiaG and Others increased(Up 16.6%)(Up 25.3%)（compared to the previous same quarter）(compared to the previous same quarter)

Net sales (by customer)(Million yen)Toshiba G

Hitachi G

Kioxia G

499

Down
19.3%

513560

Up
9.2%

619

FY2022/3Q
FY2023/3Q

FY2022/3Q
FY2023/3Q

619

FY2022/3Q

775

FY2023/3Q

Up
25.3%

Sales proposition(by customer)

ToshibaGOthers

19.8%

27.1%FY2023/３Q
HitachiG

Others684

FY2023/3Q

100200300

Up
16.6%

586

FY2022/3Q

400

500

600

700

800900KioxiaG

22.2%

30.8%

1,000(Note) Due to the restructuring of Toshiba Group, the Net sales of the former Chubu Toshiba Engineering Co., Ltd. (currently known
as Kioxia Engineering Co., Ltd.) are aggregated under Kioxia Group starting from Q3 of the previous fiscal year. Taking this into
account, sales to Toshiba Group increased by 0.7%.

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9Quarterly Net sales and Operating profit (FY2023/3Q)
3Q cumulative Net sales: 2,520 million yen
Increase: +182 million yen, Up 7.8%
(compared to the previous same quarter)

3Q cumulative Operating profit : 461 million yen
Increase: +37 million yen, Up 9.0%
(compared to the previous same quarter)(Million yen)

Net sales

4,000+443 mil yen
13.6%up(Million yen)

3,700 Mil yen

Operating profit

800+82 mil yen
13.3%up

Net Sales

3,000

4Q

918 Mil yen
28.2%

売上 2,000
高770 Mil yen
3Q
23.7%

1,000

2Q 834 Mil yen
25.6%

1Q

+182 mil yen
7.８%up

733 Mil yen
22.5%

3Q
2Q

812 Mil yen
22.0%

902 Mil yen
24.4%

Operating profit

3,256 Mil yen

617Mil yen
600

営
業
利 400
益

200

806Mil yen

1Q

21.8%
00

700Mil yen

4Q

194 Mil yen+37 mil yen
31.5%
9.0%up3Q

136 Mil yen
22.1%

3Q

144 Mil yen
20.6%

2Q

160 Mil yen
25.9%

2Q

173 Mil yen
24.８%

1Q

143 Mil yen
20.5%

126 Mil yen
1Q 20.5%2022/112023/112022/112023/11(Actual)(Forecast)(Actual)(Forecast)(Note) Some seasonal fluctuations can be observed in the company's performancedue to the number of engineers and project delivery dates.

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10

Business Environment - Trend of Major Clients(Overall) Trend of Major Customers(As of October 13, 2023）

The semiconductor market is slow to recover from the downturn in the latter half of 2022.
However, there hasn't been a significant shift in the perspective, with expectations
remaining for a sustained growth trend in the medium to long term. On the other hand,challenges faced like the global inflation and ongoing geopolitical risks associated with
Russia's actions in Ukraine.

Toshiba G

Hitachi G

Kioxia G

Others

The resolution on the movement towards delisting is expected to occur
this year. Although net sales for 1Q decreased compared to the previous
same quarter, their Energy System Solutions segment where our company
is involved in system development has been performing well, which isconsidered a positive factor for our company.
In the 'Digital Systems & Services' segment, responsible for IT services,
are experiencing a steady flow of orders, especially for large projects. It
anticipates a continued expansion of their business driven by the demandfor digital services, which is expected to result in a further increase ininquiries to our company.
Considering the decline in global semiconductor demand and the delay inmarket recovery, Kioxia plans to continue adjusting production in line withdemand trends. While the short-term outlook is challenging, their view ofthe market as a growth trend in the medium to long term remains
unchanged. They intends to maintain competitiveness through initiatives
such as developing next-generation products and reducing manufacturingcosts.
As generative AI, exemplified by ChatGPT, gains attention andconsideration for usage possibilities in its operations, interest from ourclients has been increasing.

(Compiled from publicly available information and media reports by the respective companies)
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Status of Engineers
Securing Engineering Resources through BP(※1)
Capabilities
Changes in Number of Employees(Unit: no. of people)

400

300

Changes in the number ofBP orders(Unit: no. of orders)
150

267

296

304

308

19

19

20100

19200

248

277

285

288

50

118

121

Nov/2022

Aug/2023

90100
610

FY11/2020

FY11/2021

EngineerFY11/2022

Staff

FY11/2023※20Nov/2020

Nov/2021※1 BP...Business partner. Engineers engaged in our business in the form of outsourcing etc.
※2 as of October 13, 2023

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Statement of Income (FY2023/3Q)
Statement of Income (FY2023/3Q)
Unit: thousand yen

FY2022/3Q

FY2023/3Q+/- amount+/- %Net sales

2,338,440

2,520,546

182,105

7.8%

Cost of sales

1,620,367

1,743,691※

123,3２4

7.6%

Gross profit

718,072

776,854

58,781

8.2%

SG&A expenses

294,799315,654※

20,854

7.1%

Operating profit

423,273461,200

37,927

９.0%（Operating profit rate）（18.1%）（18.3%）

Ordinary profit

431,739465,913

34,173

7.9%（Ordinary profit rate）（18.5%）（18.5%）

Quarterly profit

302,735

326,037

23,301

7.7%（Quarterly profit rate）（12.9%）（12.9%）※ Includes 13,000 thousand yen of performance-linked bonuses to employees.

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Balance Sheets (FY2023/3Q)
Balance Sheets (FY2023/3Q)
Unit: thousand yen

FY2022

FY2023/3Q+/- amount

2,110,767

2,232,095

121,327

170,732

145,907△24,824

2,281,500

2,378,002

96,502498,233

306,927△191,306

49,76355,618

5,855

547,996362,545△185,451

Total shareholders’ equity

1,733,503

2,015,457

281,953

Total net assets

1,733,503

2,015,457

281,953

Total liabilities & net assets

2,281,500

2,378,002

96,502Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities

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Topics

Copyright ⓒ 2023 T&S inc. All rights reserved.

15Topics: Consideration to transition to a Holding Company’s structure

Our company intends to begin considering the transition to aholding company structure within the timeframe of 2024.
Goals✓✓✓✓✓✓

TimingAchieving agile and detailed management
Ensuring the independence of operatingcompanies
Efficient resource allocation
Achieving effective corporate governance
Creating new businesses
Achieving business expansion through M&A✓

Targeting progress during 2024

Method✓Details to be announced upon
discussions

Image of the transition of the Holding company’s structure
December 2023 (scheduled)2024 (scheduled)

Ultimate target structure

Holding Company(Management, Strategy)

Holding Company(Management, Strategy)

Business SubsidiaryBusiness division

Business division

Business division

Business division

Business division

Business division

Business SubsidiaryBusiness SubsidiaryBusiness Subsidiary(Announced on September 15, 2023)

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FY Earnings Forecast
FY11/2023 Third Quarter

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FY Earnings Forecast
No change in Full-Year Performance Forecast
Unit: million yen

FY11/2022（Actual）

Net sales

FY11/2023（Forecast）

FY11/2023
3Q（Actual）

Percentage ofprogress

3,256

3,700

2,520

68.1%

Operating profit

617700461

65.9%

Ordinary profit

626703465

66.2%

Net profit (quarterly)

440495326

65.8%

CompanyNet sales increased by 7.8% compared to the previous same quarter. Orders from major clientsremained stable, and in addition, there was growth in orders from other clients. While thecumulative net sales for the 3Q reached an all-time high, delays in hiring engineers had animpact, resulting in a progress rate of 68.1% towards the full-year forecast. To supplement
engineering resources, we have been consistently increasing the use of BP since the end of theprevious fiscal period. Also, allocating 13 million yen for performance-linked bonuses, operating
profit increased by 9.0% compared to the previous same quarter to 461 million yen compared tothe same period last year. The operating profit margin is 18.3%.

Solution

Net sales Increased by 8.4% compared to the previous same quarter. There was growth in orders
for contracted development projects from other clients. Orders for outsourced development frommajor clients continue to maintain a strong performance.

Semiconductor

Net sales Increased by 17.3% compared to the previous same quarter, despite challenges within
the semiconductor market due to the impact of cost cooperation and other factors, the company
managed to secure an increase in revenue. Although the maintenance and operation of thefactory system are not closely related to the operational rate of the plants, there is ananticipation that the recovery in the semiconductor market will have an impact.

AdvancedTechnologySolution

Net sales decreased by 21.0% compared to the previous same quarter. Due to the impact of alarge project in progress during the previous period, which was recorded as net sales in the sameperiod. Net sales for this quarter have continued to decline following the first half of the fiscalyear. However, the decrease has been controlled compared to 2Q due to the smooth progress inthe development of the visual inspection system.

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18

Shareholder Returns

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19

Shareholder Returns
Dividend ratio for FY11/2023 is targeted at 10%
Basic Policy on dividends
The Company considers it an important management task to increase corporate
value through investment in the acquisition of new technologies in fields wherefuture growth is expected, and believes that the return of profits to shareholders
is the key to achieving this goal.
Our basic policy for profit distribution is to continue to pay appropriate dividends
in consideration of business performance, while giving priority to securing theinternal reserves necessary to improve our corporate value.
As for FY11/2023, the Company plans to pay a dividend of 6.55 yen per share (up 0.55
yen in real terms), aiming for a dividend payout ratio of around 10%, in line with the abovepolicy.
The financial indicators that take into account the above measures are as follows.

Dividend per share

Dividend ratio

Return on equity（ROE）

FY11/2022 (Actual)

6.00yen

10.3%

27.3%

FY11/2023（Forecast）

6.55yen

10.0％

25.3%

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20

Contact

T&S inc.
Corporate Planning and IR Dept.
Email / pr@tecsvc.co.jp
URL / https://www.tecsvc.co.jp/

Information contained in this material includes those related to prospects. Such information is based on thoseavailable to us at the present moment and certain assumptions that may be considered reasonable. Therefore
we do not guarantee any realization thereof and any future business performance. Various factors such aschanges in the economic climate, industries in general, customers' needs, and legislative changes may bringabout some situations substantially different from the current forecasts. In the future, even if some new
information and some event occur, we have no obligation to carry out any update or revision concerning any
information about the future contained in this material.

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21