Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2023
(April 1, 2022 through September 30, 2022)(Prepared pursuant to Japanese GAAP)All financial information has been prepared in accord with accounting principles generally accepted in Japan.
This is a partial English translation of the original Japanese-language document. All information pertains to consolidated
results unless otherwise noted. Information on the basis of presentation of consolidated financial statements does not appear inthis translation.
November 2, 2022
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:TIS Inc.
Tokyo Stock Exchange, Prime Market
3626
https://www.tis.com/
Yasushi Okamoto, President
Masahiro Hiwasa, Department Manager of Finance & Accounting Dept., Corporate
Planning SBU.
+81 3-5337-4569

Scheduled dates
Submission of quarterly report:
Commencement of dividend payments:

November 11, 2022
December 9, 2022

Supplementary materials to the quarterly results:
Quarterly results presentation held:

Available
Yes (targeted at institutional investors and analysts)
Figures in millions of yen are rounded down to the nearest million

1. Consolidated Results for the First Half of the Fiscal Year Ending March 31, 2023
(April 1, 2022 – September 30, 2022)(1) Consolidated Financial Results

Percentages indicate year-over-year changes
Net sales

Operating income

millions of yen%

millions of yen

Net income attributableto owners of the parent
company

Recurring profit%

millions of yen%

millions of yen

First Half, FY2023
245,305
4.7
27,70916.1
29,225
21.3
18,834First Half, FY2022
234,332
10.9
23,86631.1
24,09956.6
15,521
Note: Comprehensive income: First Half, FY2023: 16,683 million yen (-31.6%); First Half, FY2022: 24,405 million yen (54.0%)
Net income
per share – basic
First Half, FY2023
First Half, FY2022

Net income
per share – diluted

yen

yen

76.54
61.88

-

(2) Consolidated Financial Position
Total assets
millions of yen

Net assets
millions of yen

Equity ratio%

End of First Half, FY2023
438,301
287,24563.2
476,642302,993
61.5
End of FY2022
For reference: Total equity: End of first half, FY2023: 276,954 million yen End of FY2022: 293,125 million yen*Total equity = Shareholders’ equity plus total accumulated other comprehensive income

%

21.3
51.0

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record date or
periodEnd-Q1End-Q2yen

End-Q3yen

13.00
FY202215.00
FY2023
FY2023(forecast)
Note: Revisions from the latest release of dividends forecasts: None

Year-end

Total

yen

yen

-

31.00

44.00

yen

-

32.00

47.00

3. Forecast of Consolidated Results for FY2023 (April 1, 2022 – March 31, 2023)

Net sales

Full FY2023(year ending Mar. 31, 2023)

Operating income

Percentages indicate year-over-year changes
Net income
attributable to
Net income per
Recurring profit
owners of the parent
share – basic
company

millions of yen%

millions of yen%

millions of yen%

millions of yen%

yen

505,000

4.7

59,0007.8

60,5008.6

39,8000.9

163.25

Note: Revisions from the latest release of earnings forecasts: Yes※ Notes(1) Material reclassifications of subsidiaries during the period: None
(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions: None
(2) Accounting methods specific to quarterly consolidated financial statements: None
(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: Yes
2) Changes other than noted in 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-First Half, FY2023 (September 30, 2022):
251,160,894 shares
End-FY2022 (March 31, 2022):
251,160,894 shares
2) Treasury stock as of period-end:
End-First Half, FY2023 (September 30, 2022):
7,974,593 shares
End-FY2022 (March 31, 2022):
1,394,103 shares
3) Average number of shares (during the respective six-month period):First Half, FY2023 (ended September 30, 2022):
246,079,938 sharesFirst Half, FY2022 (ended September 30, 2021):
250,839,654 shares
Note: Treasury stock includes the number of the Company’s own shares held by TIS INTEC Group Employees’
Shareholding Association Trust and the Board Incentive Plan (BIP) Trust.

Quarterly review status
These materials are not subject to the quarterly review procedures to be conducted by certified public accountants or an audit
firm.
Caution on Forward-Looking Statements and Other Important Matters
At a Board of Directors’ Meeting held on May 11, 2022, TIS Inc. (TIS) resolved to acquire its own (treasury) shares inaccordance with Article 156 of the Companies Act of Japan, as applied pursuant to Paragraph 3, Article 165 of said Act.
Accordingly, “Net income per share – basic” in the Forecast of Consolidated Results for FY2023 has been presented taking
into account the effect of this acquisition of treasury shares.
This report contains forward-looking statements that reflect TIS’s plans and expectations based on information available to
TIS at the time of preparation and on certain other information TIS believes to be reasonable. These forward-looking
statements are not guarantees of future performance, and actual results, performance, achievements or financial position may
differ materially from those expressed or implied herein due to a range of factors.
For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, refer to “(3)Consolidated Earnings Forecast and Caution on Forward-Looking Statements” in the “1. Results of Operations” section on
page 10 in the Accompanying Materials.

Accompanying Materials – Contents

1. Results of Operations

2(1) Analysis of Consolidated Operating Results

2(2) Analysis of Financial Condition

9(3) Consolidated Earnings Forecast and Caution on Forward-Looking Statements

10

2. Consolidated Financial Statements

13(1) Consolidated Balance Sheets

13(2) Consolidated Statements of Income and Comprehensive Income

15

Consolidated Statements of Income
For the First Half

15

Consolidated Statements of Comprehensive Income
For the First Half

16(3) Notes on the Consolidated Financial Statements

17(Notes on the Going-concern Assumption)

17(Notes on Significant Changes in the Amount of Shareholders' Equity)17

3. Other Information

17

-1-

1. Results of Operations(1) Analysis of Consolidated Operating Results
In the first six months of fiscal 2023 (April 1, 2022 – September 30, 2022), there were signs of a
pickup in the Japanese economy, due in part to the effects of various policies as the transition to a newphase of living with COVID-19 was underway. Looking ahead, in addition to the continued impact of
the infection, it will be necessary to watch carefully for the risk of downward pressure on Japan's
economy due to the effects of a downturn in overseas economies, rising prices, supply-side
constraints, and fluctuations in financial and capital markets amid worldwide monetary tightening, andother factors.
The IT services industry, to which the TIS INTEC Group (“the Group”) belongs, is expected to see
further increases in IT investment demand as the transformation of business processes and businessmodels utilizing digital technologies progresses globally. This is demonstrated by factors such as the
Bank of Japan’s quarterly Short-term Economic Survey of Enterprises in Japan (September 2022),
which showed a 20.2% year-on-year increase in company software investment plans (all industries
including financial institutions).
In this environment, in accordance with its medium-term management plan (2021-2023) currently
being implemented for further growth in achieving “Group Vision 2026”, the Group is continuing towork to accelerate business restructuring with enhancing provided digital transformation value as the
keystone.
Consolidated net sales for the Group in the first six months of fiscal 2023 rose 4.7% year on year to¥245,305 million. Operating income rose 16.1% to ¥27,709 million, recurring profit rose 21.3% to¥29,225 million, and net income attributable to owners of the parent company rose 21.3% to ¥18,834
million.
(Unit: millions of yen)First Six Months,
FY2022First Six Months,
FY2023(Apr. 1 – Sep. 30, 2021)(Apr. 1 – Sep. 30, 2022)

Net sales

234,332

245,305+4.7%

Cost of sales

174,072

178,229+2.4%

Gross profit

60,25967,075+11.3%

Gross profit ratio

25.7%

27.3%

+1.6P

Selling, general and administrative
expenses

36,39339,365+8.2%

Operating income

23,866

27,709+16.1%

Operating income ratio

10.2%

11.3%

+1.1P

Recurring profit

24,09929,225+21.3%

15,521

18,834+21.3%Net income attributable toowners of the parent company

Year-on-yearchanges

Net sales were higher than in the same period of the previous year as a result of meeting the demandfor IT investment, such as customers’ demand for digital transformation. As for operating income,gross profit ratio rose 1.6 percentage points to 27.3% over the previous year’s level due to factors suchas the provision of high value-added businesses and the promotion of productivity and quality
improvement measures, in addition to the increase in income due to higher revenue. This offset theincrease in selling, general and administrative expenses, which were mainly due to investments suchas anticipatory investments to promote structural transformation and investments that will contributeto future growth. As a result, operating income was higher and the operating income ratio increased
1.1 percentage points year on year to 11.3%. The improvement in non-operating income in addition to
the increase in recurring profit and net income attributable to owners of the parent company reflect thegrowth in operating income.

-2-

<Analysis of the increase/decrease in key factors of operating income (YOY change)>

Segment results for the period are as follows. In line with the change in the Group-wide
management structure to promote further structural transformation, the Group has changed its segmentclassifications effective from the first quarter of fiscal 2023. Net sales for each segment include intersegment net sales, and year-on-year comparisons (figures) are derived by reclassifying figures for thesame period of the previous year into the new segments after the change.
(Unit: millions of yen)First Six Months,
FY2022First Six Months,
FY2023Year-onyear(Apr. 1 – Sep. 30, 2021)(Apr. 1 – Sep. 30, 2022)

changes

Offering
Service

Net sales

49,78653,887+8.2%

Operating income

2,158

2,494

+15.6%

Business

Operating income ratio

4.3%

4.6%

+0.3P

Business

Net sales

21,23021,490+1.2%

Process
Management

Operating income

2,225

2,405

+8.1%

Financial IT
Business
Industrial IT
Business
Regional IT
Solutions

Other

Operating income ratio

10.5%

11.2%

+0.7P

Net sales

44,342

48,718+9.9%

Operating income

5,916

6,311

+6.7%

Operating income ratio

13.3%

13.0%

-0.3P

Net sales

51,95955,219+6.3%

Operating income

5,934

7,763

+30.8%

Operating income ratio

11.4%

14.1%

+2.7P

Net sales

77,52976,304-1.6%

Operating income

7,144

8,352

+16.9%

Operating income ratio

9.2%

10.9%

+1.7P

Net sales

3,067

4,293

+39.9%

410

394

-3.9%

13.4%

9.2%

-4.2P

Operating income
Operating income ratio-3-1) Offering Service Business
Configures services through own investment based on best practices the Group accumulated andprovides knowledge-intensive IT services.
Segment net sales in the first six months of fiscal 2023 totaled ¥53,887 million, up 8.2% year on
year, and operating income increased 15.6% to ¥2,494 million. In addition to capturing demand for
IT investments in areas such as settlement solutions, which is growing with the advance ofdigitalization, growth of overseas sales, improved profitability, and other factors meant a year-onyear increase in both sales and profits, with the operating income ratio increasing 0.3 percentage
points year on year to 4.6%.
2) Business Process Management
Addresses issues related to business processes with IT technology, business know-how and skilledhuman resources to provide more sophisticated, more efficient outsourcing services.
Segment net sales in the first six months of fiscal 2023 totaled ¥21,490 million, up 1.2% year on
year, and operating income increased 8.1% to ¥2,405 million. Steady sales and profits were achieved
against the backdrop of growing outsourcing needs of companies, which led to an increase in bothsales and profits year on year, and pushed up the segment’s operating income ratio to 11.2%, a year
on year improvement of 0.7 percentage points.
3) Financial IT Business
Considers business and IT strategies together and leverages both, and supports business progressusing expert business and operating know-how specific to the finance industry.
Segment net sales in the first six months of fiscal 2023 totaled ¥48,718 million, up 9.9% year on
year, and operating income increased 6.7% to ¥6,311 million. Expansion of IT investment by credit
card companies and other core clients led to an increase in both sales and profits year on year. The
operating income ratio was 13.0%, down 0.3 % percentage points year on year, due to the promotionof measures such as the strengthening of the business structure.
4) Industrial IT Business
Considers business and IT strategies together and leverages both, and supports business progressusing expert business and operating know-how specific to industry sectors other than finance.
Segment net sales in the first six months of fiscal 2023 totaled ¥55,219 million, up 6.3% year on
year, and operating income increased 30.8% to ¥7,763 million. In addition to the trend of expanding
IT investments, mainly by manufacturing and energy-related sectors core clients, profitability andquality improvements, including through promotion of productivity improvement measures, resulted
in a year on year increase in sales and profit, and the operating income ratio increased 2.7
percentage points to 14.1%.
5) Regional IT Solutions
Provides IT professional services extensively, across regions and client sites, and collects anddevelops this know-how as the source of solutions to support efforts to address issues and promotebusiness activities.
Segment net sales in the first six months of fiscal 2023 totaled ¥76,304 million, down 1.6% year
on year, and operating income increased 16.9% to ¥8,352 million. Net sales decreased year on year
due to factors such as the exclusion from the results of a company (Chuo System Corporation)
whose shares were transferred outside the group during the previous fiscal year, but are firm on aprevailing basis. Due to these conditions and the promotion of business activities and other activities
emphasizing profitability, operating income increased year-on-year, and the operating income ratio
increased 1.7 percentage points to 10.9%.

-4-6) OtherConsists of ancillary businesses offering IT services, and other activities.
Segment net sales in the first six months of fiscal 2023 totaled ¥4,293 million, up 39.9% year on
year, operating income was down 3.9% to ¥394 million, and the segment’s operating income ratio
was 9.2%, down 4.2 percentage points. This was mainly due to the absorption-type split of theGroup's shared services business from the Company to TIS Business Service Inc., effective April 1,
2022.
As noted above, the Group has been implementing its medium-term management plan (2021-2023)
in the previous fiscal year as a second step towards realizing its “Group Vision 2026”. Under theslogan of “Be a Digital Mover 2023”, the Group is continuing to increasingly focusing on Strategic
Domains* and is working to accelerate business restructuring, with enhancing provided digitaltransformation value as the keystone.
*Note: “Strategic Domains” are the four business domains designated to be built into the corebusinesses of the Group by 2026, as set forth in Group Vision 2026.
In fiscal 2023, the second year of the medium-term management plan (2021-2023), the Group willenergetically implement various measures in line with the following Group management policies.

The status of issues and initiatives in the Group management policies are presented below.
1) Leverage long-term growth strategy for corporate value and value provided to society throughsustainability management
The Company will continue to promote the resolution of social issues through its business
operations, as well as the advancement of ESG such as the environment, human rights, andhuman capital, and the development of its management foundation through the sophisticationand efficiency of its head office functions.
In accordance with the Basic Direction on Corporate Sustainability, the Group continues topromote initiatives related to the high priority topics of the environment and human rights asurgent and important social issues. Of these initiatives, with regard to human rights issues, theGroup carried out a human rights risk assessment in the previous fiscal year to identify potential
human rights risks and make clear which countries, businesses, and rights holders (persons who
may be negatively impacted by human rights) should be prioritized for future action. In responseto this, during fiscal 2023, in addition to our own Company, we are taking steps to identify
human rights risks stemming from labor problems at outsourced companies and equipment-5-suppliers and to create a mechanism for redress, and to develop a system for the use of theGroup's services for other purposes in a phased manner. Also, in terms of environmental issues,as part of our efforts to reduce greenhouse gas emissions, we have decided to promote initiatives
to become carbon neutral in our data centers. From April 2023, we will use electricity derived
from renewable energy sources for all electricity used at its four main data centers, and will
increase the percentage of renewable energy used at these data centers to 100%.
In addition, as part of the Group's contribution to regional communities, the Group has begun
to utilize the corporate version of the "hometown tax" and has launched projects in cooperation
with NPOs in three areas that cannot be covered by its business activities (activities that support
future users, activities to promote digital technology’s benefits, and activities to reduce thenegative effects of digital technology in society).
Such steady progress in corporate sustainability initiatives has resulted in its selection as acomponent of the MSCI Japan ESG Select Leaders Index for the first time in June 2022.
As part of its efforts to improve the understanding of the Group's brand and its value, we haveinitiated our owned media, "TIS INTEC Group MAGAZINE”. Under the main theme of thebrand message, “Make society's wishes come true through IT.”, the TIS INTEC Group will
introduce its specific initiatives and forward-looking plans to solve social issues in a variety offields.
From the perspective of improving the management foundation by upgrading and increasing
the efficiency of head office functions, the Company will expand the scope of the “G20 Head
Office Function Upgrade Project” which it has been working on for some time. In addition, as
part of our efforts to share and further upgrade indirect business activities, the Company is also
promoting a shift to shared services and digital transformation of back-office operations for thewhole group through a system centered on TIS Business Service Inc.
2) Accelerate improvement of added value through enhanced DX organizational capacity andinvestment
In addition to further strengthening investments in human resources, R&D, and software,
which are the source of mid- to long-term added value growth, the Group will continue topromote M&A for the purpose of expanding its strategic domains.
As we further strengthen the front line, which is the point of contact with stakeholders, andsince it is necessary to strengthen consulting functions in upstream areas such as strategicplanning and issue formulation to promote digital transformation, especially for customers, theGroup is continuing to enhance its collaboration with our consolidated subsidiary, Miotsukushi
Analytics Co., Ltd., a consolidated subsidiary with strengths in data analysis and AI consulting.
In September 2022, along with the acquisition of Fixel Inc., which is engaged in business system
UI (Note 1)/UX (Note 2) design consulting for enterprises and design system construction &operation support for business firms, we established a dedicated digital transformation designteam to assist our clients with product and service design, business problem identification,ideation, and concept development. With the addition of this company to the Group, the value
provided by digital transformation will be strengthened by combining its excellent design
consulting capabilities with TIS's customer support and system construction capabilities.
Through these strategic allocations of management resources and human resource development,
we will continue to focus on increasing the number of digital transformation consultants andexpanding our value delivery system with respect to clients' digital transformation promotion.
In the payments domain, which is one of the Group's strengths, the "credit card processing
service" (Note 3) went into service. In addition, we are developing our business in the overall
settlement area, including digital accounts, mobile wallets, service coordination, security, anddata utilization. In addition to this, in March 2022, ULTRA Inc., a provider of international brandprepaid settlement services, became a consolidated subsidiary, and the Group is preparing todevelop the “Embedded Finance” business, enabling integrated settlement functions in a single
integrated manner by combining ULTRA’s front-end settlement functions and the Group’s
expertise in conventional back-end function structuring of settlement functions. We will continue-6-to contribute to the further popularization of cashless settlement services by expanding theservice lineup and business scale of the entire "PAYCIERGE" total brand of retail settlement
solutions in the payment area, which is expected to grow in step with the development of acashless society.
Going forward, The Group will continue to focus on digital transformation in three domains,
and will aim from an integrated perspective to create a virtuous cycle of new value by treating"social digital transformation" to realize a better society, "business digital transformation" toinnovate our customers' businesses, and "internal digital transformation" to evolve the TIS
INTEC Group itself, as a single linkage that strongly influences each other.
Note 1: User interface A mechanism for input and display when a user interacts with a PC.
Note 2: User Experience A user experience gained from services, etc.
Note 3: A service that provides a total environment necessary for credit card issuing businessactivities. The company develops and provides highly original systems and card
products that meet the current demands of the credit card industry, such as"sophisticated customer orientation," "flexibility for open innovation," and "highprofitability.” Since it is an SaaS-type of provision format, the necessary functions andservices can be used while controlling costs at the time of introduction.
3) Promote business restructuring and measures to improve medium- to long-term asset and capitalefficiency
The Group intends to promote efforts to boost management stability in line with progress in
structural transformation, and to improve assets and capital efficiency over the medium to longterm based on such improvements.
With the aim of further improving the effectiveness of business management, we are
introducing business management with increased attention toward capital costs, promoting groupformation management, expanding business through M&As of domestic and overseas
companies, and business portfolio restructuring. To promote further structural transformation andimprove effectiveness, from fiscal 2023 the entire Group has adopted a management structure
based on its business model, and the segment classifications were changed accordingly. In eachsegment, a segment owner will be assigned to clarify authority and responsibility, and promote
the realization of growth strategies that leverage the strengths of each Group company.
Under these circumstances, in light of the transformation in the quality of management,
including steady progress in structural transformation by concentrating management resources instrategic domains and the accompanying strengthening of the earnings base, etc. through profit
growth and improved cash generation capabilities, etc., and as part of our efforts to optimize ourcapital structure, we have decided to conduct a share buyback of a total of ¥30 billion (total
number of shares to be repurchased: 12,000,000 shares), including approximately ¥5.5 billion to
be returned to shareholders based on a total return ratio of 45%. The Company has alreadyacquired a total of 6,820,800 shares (with a total acquisition cost of ¥24.5 billion) as of
September 2022.
4) Leverage growth strategy designed to become top-class IT group in ASEAN region, andstrengthen governance position
We intend to expand our global partnership network as well as further deepen our markets bystrengthening relationships with investee companies and developing joint ventures based on ourbusiness strategy.
As part of this effort, we are accelerating collaboration with PT Aino Indonesia ("AINO") of
Indonesia, which became an equity-method affiliate in March 2022. AINO has already beenrecognized for its achievements in the joint development of "Acasia," a smartphone-basedtransportation payment package for Southeast Asia, and in joint case studies on MaaS (Mobility
as a Service) as a next-generation transportation service. As a core company of the JATeL
consortium (Note 1), AINO has contributed to JATel receiving the order for the first integrated
transportation payment infrastructure "Jak-Lingko" (Note 2) project in Jakarta, Indonesia, and"Acasia" has been adopted as the back-end system of "Jak-Lingko". In June 2022, we added a-7-

MaaS service collaborating with Southeast Asia’s largest ride-hailing service, “Grab,” which isin a capital and business tie-up with the Company. In the future, in addition to the digitalizationof Southeast Asia’s transportation settlements, we plan to expansion our business domain into
areas such as Park and Ride and data utilization.
In July 2022, the Company entered into a capital and business tie-up with HanKaiSi Intelligent
Technology Co., Ltd. of China, which develops common chassis for self-driving EVs (electricvehicles). With the automotive industry undergoing a major transition with to the shift to EVs
and advances in automated driving technology, and at a time when software is becoming
increasingly important, we aim to create new IT services in the areas of MaaS, smart cities, etc.
through our partnership with the Company.
Furthermore, in order to better ensure the achievement of the “ASEAN top-class IT group”,
we have added consulting as a new axis in addition to our existing channel technology toenhance our presence and capabilities as a global "consulting + IT” player. We will also aim toaccelerate our global business development by focusing on development in Next ASEAN.
Note 1: Joint venture formed by the four companies: PT Jatelindo Perkasa Abadi, AINO,
Thales, and Lyko for the purpose of bidding on PT JAKARTA LINGKOINDONESIA's projects.
Note 2: Integrating the tariff systems of the four public transportation systems that exist in
Jakarta, this service allows users to cross over from public transportation to Ride
hailing (car dispatching service using an app) with a single app. Users can search forroutes, make reservations, purchase tickets, and use the service from the point of
departure to boarding public transportation, and from public transportation drop-off tothe destination, including the means of transportation.
5) Rachet up investment into human resources to sharpen skills and promote diversity
Aiming at added value improvements, the Company will continue its aggressive recruiting
efforts, including improved compensation and training investments, as well as career recruiting.
We are working to improve such things as engagement with employees and support forautonomous career development through the creation of an environment and organizational
culture where diverse individuals can thrive, the promotion of next-generation work-stylereforms looking towards a new work environment, the advancement of human resource portfolio
management by digitalization of a human resources database, and full-scale operation of HR
business partners. Also, to further accelerate structural transformation, we are striving tostrategically secure and foster advanced human resources in areas such as consulting, global
business, and service business and will place human resources optimally.
In addition, the Company will revise its human resource system in April 2023 as amanagement base to encourage each employee to act autonomously and to improve value
exchanges between the Company and each individual in preparation for the Group's unitedefforts to take on challenges. By adopting performance-based compensation based on the humanresource requirements and roles we seek, we aim to realize a virtuous cycle of boosted valueadded through proactive anticipatory investment in human resources, our most importantmanagement resource, and the growth that results from this investment.

-8-

(2) Analysis of Financial Condition(Assets)
Consolidated total assets as of the end of the second quarter amounted to ¥438,301 million, adecrease of ¥38,340 million from ¥476,642 million at the end of the previous fiscal year.
Current assets were ¥226,047 million from ¥259,261 million at the end of the previous fiscal year.
The decrease primarily reflects a ¥42,570 million decrease in cash and deposits.
Fixed assets totaled ¥212,253 million from ¥217,381 million at the end of the previous fiscal year.
The decrease primarily reflects a ¥5,752 million decrease in investment securities.
(Liabilities)
As of the end of the second quarter, total liabilities amounted to ¥151,055 million, a ¥22,593 million
decrease from ¥173,649 million at the end of the previous fiscal year.
Current liabilities totaled ¥116,874 million from ¥139,236 million at the end of the previous fiscal
year. The decrease primarily reflects a ¥13,938 million decrease in income taxes payable, etc.
Fixed liabilities amounted to ¥34,181 million from ¥34,412 million at the end of the previous
fiscal year. The decrease primarily reflects a ¥848 million decrease in Long-term debt.
(Net assets)
Consolidated total net assets as of the end of the second quarter came to ¥287,245 million, adecrease of ¥15,747 million from ¥302,993 million at the end of the previous fiscal year. The
increase primarily reflects a ¥23,983 million increase (net assets decreased) in treasury stock.

-9-

(3) Consolidated Earnings Forecast and Caution on Forward-Looking Statements
In light of the fact that the consolidated financial results for the second quarter of fiscal 2023
significantly exceeded the plan, the consolidated financial forecast for the full fiscal year ending
March 31, 2023, released on May 11, 2022, has been revised as follows. While closely monitoring theimpact of infectious diseases, we expect to expand our business by accurately responding tocustomers’ demand for digital transformation and, we will provide high value-added business andpromote productivity enhancement measures and the like while sustaining our investment in future
growth in an aim to achieve even higher profitability.
(Unit: millions of yen)Previously
released

Current
released

forecast(A)

forecast(B)

Increase/decrease(B - A)

Ratio ofincrease/decrease(%)

Net sales

500,000

505,000+5,000+1.0%

Cost of sales

365,000

366,000+1,000+0.3%

Gross profit

135,000

139,000+4,000+3.0%

Gross profit ratio

27.0%

27.5%

+0.5P

－

Selling, general and administrative expenses

78,00080,000+2,000+2.6%

Operating income

57,00059,000+2,000+3.5%

Operating income ratio

11.4%

11.7%

+0.3P

－

Recurring profit

57,00060,500+3,500+6.1%

37,50039,800+2,300+6.1%

Net income attributable toowners of the parent company<By segment>(Unit: millions of yen)Previously

Current

released
forecast

released
forecast(A)(B)

106,300

109,000+2,700

+2.5%

6,100

6,000

-100

-1.6%

Increase/decrease(B - A)

Ratio ofincrease/decrease(%)

Offering
Service

Net sales

Business

Operating income ratio

5.7%

5.5%

-0.2P

－

Business
Process

Net sales

44,90044,000-900-2.0Operating income

5,250

5,300

+50

+1.0%

Management

Operating income ratio

11.7%

12.0%

+0.3P

－

Net sales

95,70098,500+2,800+2.9%

Operating income

13,00012,700

-300

-2.3%

Financial IT
Business
Industrial IT
Business
Regional IT
Solutions

Other

Operating income

Operating income ratio

13.6%

12.9%

-0.7P

－

Net sales

110,700

111,900+1,200+1.1%

Operating income

15,90016,700

+800

+5.0%

Operating income ratio

14.4%

14.9%

+0.5P

－

Net sales

158,500

158,800

+300

+0.2%

Operating income

17,20018,200+1,000+5.8%

Operating income ratio

10.9%

11.5%

+0.6P

－

Net sales

9,400

9,400

－

－

Operating income

600

700

+100

+16.7%

Operating income ratio

6.4%

7.4%

+1.0P

－

- 10 -

A comparison of the latest full-fiscal year consolidated earnings forecast with the results of theprevious fiscal year is as follows.
(Unit: millions of yen)
Fiscal 2022
Actual results

Fiscal 2023
Forecast

Year-on-yearchangeNet sales

482,547

505,000+4.7%

Cost of sales

353,699

366,000+3.5%

Gross profit

128,848

139,000+7.9%

Gross profit ratio

26.7%

27.5%

+0.8P

Selling, general and administrative

74,10880,000+7.9%

54,73959,000+7.8%

expenses
Operating income
Operating income ratio

11.3%

11.7%

+0.4P

Recurring profit

55,71060,500+8.6%

Net income attributable toowners of the parent company

39,46239,800+0.9%＜Analysis of key factors in the increase/decrease in operating income (forecast, year-on-year change)>- 11 -

<By segment>(Unit: millions of yen)
Fiscal 2022

Fiscal 2023

Year-on-year

Actual results

ForecastchangeOffering
Service

Net sales

Business

Operating income ratio

4.5%

5.5%

+1.0P

Business

Net sales

42,95144,000+2.4%

Process
Management

Operating income

4,991

5,300

+6.2%

Operating income ratio

11.6%

12.0%

+0.4P

Net sales

91,651

98,500+7.5%

Operating income

12,355

12,700+2.8%

Operating income ratio

13.5%

12.9%

-0.6P

Net sales

108,751

111,900+2.9%

Operating income

15,356

16,700+8.7%

Financial IT
Business
Industrial IT
Business
Regional IT
Solutions

Other

Operating income

103,167

109,000

+5.7%

4,692

6,000

+27.9%

Operating income ratio

14.1%

14.9%

+0.8P

Net sales

156,231

158,800+1.6%

Operating income

16,492

18,200+10.4%

Operating income ratio

10.6%

11.5%

+0.9P

Net sales

6,369

9,400

+47.6%

770

700

-9.2%

12.1%

7.4%

-4.7P

Operating income
Operating income ratio

The Company’s medium-term management plan (2021-2023) includes a basic shareholder return
policy that targets a total return ratio of 45%. Also, in order to increase the distribution of profits toshareholders in accordance with business growth in a sustained manner, the Company believes it isdesirable to base shareholder returns on profits derived from operating activities, as they are notaffected by one-time gains or losses. In fiscal 2023, in addition to a share buyback of approximately¥5.5 billion to provide shareholder returns based on this policy, for the purpose of optimizing its
capital structure, the Company is in the process of conducting a share buyback of approximately ¥24.5
billion, for a total share buyback amount of ¥30.0 billion. The total return ratio is forecast to be104.2% based on the completion of the share buyback, the current dividend forecast, and consolidated
earnings forecast.
In addition, the Company will, in principle, retain up to 5% of its treasury stock, and will cancel any
treasury stock holdings in excess of 5% of the total number of shares outstanding. This time, regardingtreasury stock (approximately ¥5.5 billion worth) that the Company plans to acquire from theperspective of its returns to shareholders policy, the Company plans to respond in accordance with thispolicy. However, in consideration of Company policy and the need to eliminate concerns about future
dilution of shares, etc., the Company is planning to retire the treasury stock (approximately ¥24.5
billion worth) that it plans to acquire as part of its efforts to optimize its capital structure.
Note: Total return ratio: The ratio of the combined value of dividend payments and share buybacks
versus net income attributable to owners of the parent company- 12 -

2. Consolidated Financial Statements(1) Consolidated Balance Sheets
As of March 31, 2022

Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable, and contract assets
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Software
Software in progress
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets- 13 -

As of Sep. 30, 2022

millions of yen

millions of yen

114,194
111,361
4,014
298
1,454
1,360
217
26,668(308)
259,261

71,624
117,984
3,583
253
2,377
1,417
183
29,135(511)
226,047

35,471
9,636
9,675
3,723
6,882
65,38934,491
8,657
9,667
4,212
6,405
63,435

14,231
12,255770
1,493
28,75013,53912,573780
1,458
28,352

76,823
6,656
17,31325,266(2,820)123,241
217,381476,642

71,071
7,034
18,561
26,892(3,039)120,520
212,307438,355

As of March 31, 2022

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Provision for loss on order received
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to directors
Other allowances
Net defined benefit liability
Asset retirement obligations
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets- 14 -

As of Sep. 30, 2022

millions of yen

millions of yen

22,47535,22921,864
15,8401,092
140
42,593
139,236

22,03725,763
7,925
16,885657
11943,484
116,874

2,213
3,554
395
272
0
208
12,534
6,992
8,240
34,412
173,649

1,364
3,854
421
272
0
155
12,632
6,944
8,534
34,181
151,055

10,00164,960203,256(3,117)275,100

10,00164,969214,301(27,101)
262,170

20,990(4)(2,672)(70)(219)
18,024
9,867
302,993476,642

16,6639(2,672)851(14)
14,838
10,291
287,299
438,355

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
First Half, FY2022
First Half, FY2023
Items(Apr. 1 – Sep. 30, 2021) (Apr. 1 – Sep. 30, 2022)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Gain on foreign exchange
Other
Total non-operating income
Non-operating expense
Interest expenses
Equity in losses of affiliated companies
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary loss
Loss on disposal of fixed assets
Loss on valuation of investment securities
Impairment loss
Other
Total extraordinary loss
Income before income taxes
Income taxes: current
Income taxes: deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company- 15 -

millions of yen

millions of yen

234,332
174,072
60,25936,39323,866245,305
178,229
67,07539,36527,709

206
644
37
484
1,372

276
601
420
457
1,755

163
650
325
1,139
24,099

139
5
95
239
29,225

0
5

324
54
378

149
133
169
80
533
23,572
6,909
488
7,398
16,173652
15,521

58
316
655
36
1,066
28,537
8,326
608
8,935
19,602768
18,834

5

Consolidated Statements of Comprehensive Income
First Half, FY2022
First Half, FY2023(Apr. 1 – Sep. 30, 2021) (Apr. 1 – Sep. 30, 2022)

Items

millions of yen

Net income
Other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedge
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of equitymethod affiliates
Total other comprehensive income
Comprehensive income(Composition)
Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to noncontrolling interests- 16 -

millions of yen

16,173

19,602

7,681
9
134
133

(4,380)
27
859
207

272

366

8,231
24,405(2,918)
16,68323,743

15,594661

1,089

(3) Notes on the Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable(Notes on Significant Changes in the Amount of Shareholders’ Equity)
Not applicable
3. Other Information
INTEC Inc., a consolidated subsidiary of the Company, is currently in litigation with Mitsubishi Shokuhin Co.,
Ltd., which filed a claim for compensation in connection with services including systems development provided
by INTEC Inc. (Amount of compensation demanded: 12,703 million yen; date the complaint was received:
December 17, 2018).

- 17 -