FY11/2022 Third Quarter
Supplementary Material
on Financial Results

T&S inc.
TSE Growth: 4055
October 14th, 2022

Copyright ⓒ 2022 T&S inc. All rights reserved.

Table of Contents

FY11/2022 Third Quarter
Highlights

p. 3

Financial Results Overview

p. 4

Operating Profit

p. 6

Net Sales by Categoryp. 7

Net Sales by Customer

p. 8

Quarterly Net Sales and Operating Profit

p. 9

Business environment

p. 10

Status of increase in engineers

p. 11Statement of Income

p. 12

Balance Sheets

p. 13

FY Earnings Forecast

p. 14

Shareholder Returns

p. 16

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2

Highlights (FY11/2022 3Q)(Theme of current term)

Accelerated Growth１

２

Record-high revenues achieved(Compared to the previous same quarter)

Net sales
Operating profit
Ordinary profit
Profit(Up 18.4%↑, + 362 million yen)
(Up 52.1%↑, + 145 million yen)
(Up 51.9%↑, + 147 million yen)
(Up 51.7%↑, + 103 million yen)

: 2,338 million yen: 423 million yen:
431 million yen: 302 million yen(YoY)(ditto)(ditto)(ditto)Advanced Technology Solution made a breakthrough.
Other categories also performed well.
➢ Sales in the Advanced Technology Solution category increased 61.1% year-on-year. Sales grew as a result ofcontinued orders for AI-related R&D support services and treatise survey support, as well as steady orders fromnew clients. In particular, the percentage of sales in this category to the entire company increased from 5.7% in
the same period of the previous year to 7.7% in the third quarter of the current fiscal year. This was due to anincrease in new clients and projects from existing clients such as NEC Corporation, which remained strong fromthe previous fiscal year.
➢ Sales in the solutions category increased 13.6% year-on-year. Orders for contracted development projects frommajor clients remained strong. In the previous fiscal year, a large-scale development projects for semiconductor
manufacturers from our major customer which contribution to sales.
➢ Sales in the Semiconductor category increased 25.4% year-on-year. The number of engineers dispatched to
semiconductor plant for maintenance and operation services remained strong due to the steady orders frommajor customers, as well as an increase in the number of employees due to the semiconductor market.

３

3Q cumulative sales progress rate exceeded previous years, and performancelinked bonuses were also allocated.
➢ Compared to 72.3% of total sales in the previous 3Q, the progress rate toward the full-year forecast is 75.4%
in the current period.
➢ Continuing from the previous year, a portion of operating profit was returned to employees. Despite theprovision of 55 million yen in performance-linked bonuses for the 3Q, we achieved an operating profit rate of
18.1%. (up 4.0 percentage points from the same period of the previous year)

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3

Financial Results Overview
FY11/2022 Third Quarter

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4

Financial Results Overview (FY11/2022 3Q)

Record-high revenues achieved (compared to the previous same quarter)
Net sales: 2,338 million yen(Up 18.4%↑, + 362 million yen)

(YoY)

Operating profit:

423 million yen(Up 52.1%↑, + 145 million yen)(ditto)Ordinary profit:

431 million yen(Up 51.9%↑, + 147 million yen)(ditto)Profit:

302 million yen(Up 51.7%↑, + 103 million yen)(ditto)Net Sales(Million yen)

(Million yen)

3,000

500

Up
18.4%
2,000

Operating profit

2,338

Up
52.1%

400

423 ※

1,975
300

278 ※

200
1,000
100

0

0
FY2021/3Q

FY2022/3Q

FY2021/3Q

FY2022/3Q※ Performance-linked bonuses for employees of 55 million yen in FY2022/3Q and 45 million yen in FY2021/3Q
were recorded in consideration of the good performance of the company.

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5

Operating Profit (FY11/2022 3Q)

Absorbed performance-linked bonuses andincreased operating profit by 145 million yen.
Increase(Million yen)

Decrease(YoY)

Operating
営業利益
営業利益profit

In addition to the regular bonus,
a performance-linked bonus wasgiven to the employees ※Operatingprofit rate
18.1%

Operatingprofit rate
14.1%
Increase in labor andsubcontracting costs
mainly due to increase in
number of engineers

FY2021/3Q
OperatingprofitIncreased
sales

Provisionfor bonusesin cost of
sales

Other
increase incost ofsales

Provisionfor bonusesin SG&A
expenses

Other
decrease in
SG&A
expenses

FY2022/3Q
Operatingprofit※The Company recorded 55 million yen in FY2022/3Q and 45 million yen in FY2021/3Q.
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6

Net Sales by Category (FY11/2022 3Q)

Sales increase in all categories
Up 61.1% Advanced Technology Solution Category (YoY)
Net Sales (by category)Sales proportion (by category)(Million yen)

Solution
1,518

FY2021/3Q

+206

Up
13.6%

1,725

FY2022/3Q
1,000

1,200

1,400

1,600

1,800

345

+87

Up
25.4%

433

FY2022/3Q
200

300

400

111

500

+68

Up
61.1%

180

FY2022/3Q
0

100

200

433mil yen
18.5% FY2022/3Q
2,338 mil yen

Advanced Technology Solution
FY2021/3Q

180mil yen
7.7%
Semi
conductor

2,000

Semiconductor
FY2021/3Q

Advanced
Technology
Solution

Solution
1,725mil yen
73.8%

300
(Note) Our business segment is a single segment. Only net sales are calculated by category.

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7

Net Sales by Customer (FY11/2022 3Q)

Toshiba G, Hitachi G, Kioxia G

Major customers maintaining steady level
Sales to Kioxia G significantly increased（Up 48.1%（compared to the previous same quarter）Composition ratio of 26.5%
Net Sales (by customer)
ToshibaG
東芝G

Sales proposition (by customer)(Million yen)

624 Down
619 0.9%

FY2021/3Q
FY2022/3Q

OthersHitachiG
日立G

432

FY2021/3Q

Up
18.7%

513

FY2022/3Q

25.1%

Toshiba G

26.5%

FY2022/3Q
Kioxia G
キオクシアGUp

418

FY2021/3Q

619 48.1%

FY2022/3Q

Kioxia G
Othersその他

499

FY2021/3Q

586

FY2022/3Q

200

300

400

500

600

Up
17.4%
700

26.5%

Hitachi G

22.0%

800

(Note) Due to the reorganization of Toshiba G, the sales of Kioxia Engineering Corporation (former Chubu Toshiba Engineering Co., Ltd.)
have been included in "Kioxia G" from the current quarter.

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8

Quarterly Net Sales and Operating Profit (FY11/2022 3Q)

3Q cumulative Net Sales: 2,338 million yen
Increase:＋362 million yen, 18.4% increase

Progress rate: 75.4%(Compared to the previous same quarter)(Percentage of progress toward full-year forecast)

3Q cumulative Operating Profit: 423 million yen
Increase:＋145 million yen, 52.1% increase

Progress rate: 76.9%(Compared to the previous same quarter)

Net Sales

3,500
3,000

Net Sales

2,500+367 mil yen
13.4% up

2,732Mil yen

3Q

75.4%

770
3Q
24.9%
834
2Q
26.9%

Mil yen

1,000

2Q

700 Mil yen
25.6%

1Q

586 Mil yen
21.5%

500
0

+137 mil yen
33.2%up

Progress
rate

+362

Mil yen688 Mil yen
25.2%

550 Mil yen

500

757 Mil yen 18.4%
up
27.7%

2,000
1,500

3,100

600
Mil yenmil yen

4Q

Operating Profit(Million yen)

733
1Q
23.6%

Mil yen

Progress
rate

+145

76.9%

412 Mil yen 52.1%

mil yenOperating Profit(Million yen)

(Percentage of progress toward full-year forecast)

400

4Q
300

134Mil yen
32.6%

3Q
200

106 Mil yen
25.7%

2Q

100 Mil yen
24.4%

1Q

71Mil yen
17.3%

100

136
3Q 24.8%up

Mil yen2Q 16029.1%

Mil yen1Q 12623.0%

Mil yen02021/112022/112021/112022/11(actual)(forecast)(actual)(forecast)※ There are seasonal differences in our business performance due to the increase in the numberof engineers and project delivery dates.

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9

Business environment – Trend of Major Customers

Trend of our Major Customers (As of October 14 , 2022)th

There is a strong business environment surrounding the Company. While the semiconductor
industry is experiencing a lull, it continues to operate at a high level, and associatedcompanies have a strong appetite for investment. While companies are overcoming theeffects of COVID-19, the issue is how to handle geopolitical risks.

Toshiba G
Hitachi G

Kioxia G

OthersThe demand for automotive semiconductors and products related to energy andinfrastructure is strong. Energy system solutions related to power plants, where
we are engaged in system development, are a particular tailwind for the Company.
A consecutive record of highest profits has been achieved as a result of improved
market conditions and reorganization of group companies; we are experiencing
strong performance in our IT services and energy segment, and we expect toincrease investment in our business-related equipment, reversing a trend ofrestraint during COVID-19.
While semiconductor demand continued to be strong, some production
adjustments were made. The government announced a subsidy of 92.9 billion yen
for the construction of a new manufacturing building at the Yokkaichi plant.
Further orders are expected due to continued investment expansion, including theconstruction of a new manufacturing building at the Kitakami Plant and theacquisition of Chubu Toshiba Engineering, a subsidiary of Toshiba.
In the field of R&D for AI algorithm development, automotive-related manufacturers,
precision machinery manufacturers, and telecommunication infrastructurecompanies have a strong appetite for research investment. The trend toward DX
and labor savings has accelerated in the midst of the COVID-19, resulting ininquiries to our company are expanding.
(Compiled from each company's published data and newspaper reports)

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10

Status of increase in engineers

Struggled to recruit engineers
Personnel increase rate

4.0% ※

ca. 10% of total engineers

Recruitment policy(Number of Engineers)

372

400
338

350

305

300

+29

274

250
200

150
100

277

288
※

248

50
0
2020年11月期
FY11/20202021年11月期
FY11/2021

2022年11月期
FY11/2022

actual実績

2023年11月期
FY11/2023

2024年11月期
FY11/2024

goal
目標※ As of October 14th, 2022

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11

Statement of Income (FY11/2022 3Q)

Statement of Income (FY11/2022 3Q)
Unit: Thousand Yen

FY11/2021 3Q

FY11/2022 3Q+/- amount+/- %Net Sales

1,975,571

2,338,440

362,868

18.4%

Cost of Sales

1,414,880

1,620,367

205,486 ※14.5%

Gross Profit

560,691

718,072

157,381

28.1%

SG&A expenses

282,481294,799

Operating profit

278,209423,273（Operating profit rate）（14.1%）（18.1%）

Ordinary profit

284,274

431,739（Ordinary profit rate）（14.4%）（18.5%）

Quarterly Profit

199,544302,735（Quarterly profit rate）（10.1%）（12.9%）

12,317 ※4.4%

145,06452.1%

147,46451.9%

103,191

51.7%※ Includes performance-linked bonuses of 55,000 thousand yen in FY11/2022 3Q and 45,000 thousand
yen in FY11/2021 3Q for employees due to good performance.

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12Balance Sheets (FY11/2022 3Q)

Balance Sheets (FY11/2022 3Q)
Unit: thousand yen

FY11/2021

FY11/2022 3Q+/- amount

1,869,946

1,859,871△10,075

117,500

157,650

40,1501,987,447

2,017,522

30,074440,851

374,148△66,70251,51347,373△4,140492,364

421,521△70,843

Total shareholders’ equity

1,495,082

1,596,000

100,917

Total net assets

1,495,082

1,596,000

100,917

Total liabilities & net assets

1,987,447

2,017,522

30,074Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities

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13

FY Earnings Forecast
FY11/2022 Full-year

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FY Earnings Forecast

Steady progress against full-year forecasts(No change in the full-year forecast)

Unit: million yen

Net sales

FY11/2021（actual）

2,732

Operating profit

412

Ordinary profit

419

Current period(quarterly) Profit

294

FY11/2022（forecast）

FY11/2022
3Q (actual）

3,100(Compared to previous
period ratio: increase 13.4%)

550(Compared to previous
period ratio: increase 33.2%)

557(Compared to previous
period ratio: increase 32.9%)

391(Compared to previous
period ratio: increase 32.7%)

Progress rate

2,338

75.4%

423

76.9%

431

77.5%

302

77.4%

Company

Sales increased 18.4% year-on-year. Sales remained strong in all categories. Development projects from majorclients such as Toshiba G, Hitachi G, and Kioxia G were steady. Cumulative 3Q Net sales were 75.4% compared to
the full-year forecast. The use of outsourcing has been increasing to supplement the company's engineeringresources, and a shift to more high-profit projects has also been successful, resulting in a gross profit margin of
30.7%. Absorbing a performance-linked bonus provision of 55 million yen, operating profit rose 52.1% year-onyear to 423 million yen. Operating profit margin was 18.1%.

Solution

Sales increased 13.6% year-on-year. Orders for contracted development projects from major clients remained
steady. Particularly, a large-scale development project for an in-factory system from a semiconductor
manufacturer (our major customer), which started in the previous fiscal year, contributed to the increase inorders.

Semiconductor

Sales increased 25.4% year-on-year. In addition to steady orders from major clients stays strong in thesemiconductor market, the demand for an increase in the number of dispatched engineers for maintenance andoperation services at semiconductor factories remained strong, contributing to higher sales and profit.

Advanced
Technology
Solution

The company made an increase of 61.1% year-on-year in sales, with steady growth in continued orders for AIrelated R&D support services and support for research. As well as orders from new clients. This category grew to
7.7% of total company sales in 3Q, up from 5.7% in the same period of the previous fiscal year, due to anincrease in new clients and steady orders from existing clients such as NEC Corporation.

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15

Shareholder Returns

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16

Shareholder Returns
Purchase of own treasury shares has been ended.
Basic Policy on Dividends
The Company considers it an important management task to increase corporate value throughinvestment in the acquisition of new technologies in fields where future 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 inconsideration of business performance, while giving priority to securing the internal reserves
necessary to improve our corporate value.
As for FY11/2022, the Company plans to pay a dividend of 5.00 yen per share (up 1.00 yen inreal terms), aiming for a dividend payout ratio of around 10%, in line with the above policy.
In addition to this, the Company repurchased its own shares from January to July 2022.
The financial indicators after taking into account the above measures are as follows.
Dividend per share
FY11/2022（Forecast）

Total return ratio（※）

5.00 yen

54.4%

Return on Equity
(ROE)
24.6%

※ The above figures take into account the results of share repurchases.

The status of treasury shares repurchases as follows;
Total number ofshares acquired

Total acquisition
price of shares

130,400 shares

174,873,500 yen

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Acquisition period (contract basis)

January 14, 2022 – July 13, 2022

17

Contact

T&S inc.
Corporate Administration 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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18