FY11/2023 First Quarter
Supplementary Material
on Financial Results
T&S inc.
TSE Growth： 4055
April 14, 2023

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

Table of Contents

FY11/2023 First 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

Topicsp. 14

FY Earnings Forecast

p. 16

Shareholder Returns

p. 18

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2

Highlights (FY2023/1Q)(Theme of current term)

Sustainable Growth
１

Record-high revenues achieved
Net Sales
Operating profit
Ordinary profit
Profit２: 806 million yen: 143 million yen: 143 million yen: 100 million yen(Compared to the previous same quarter)（Up 9.9%↑、+ 72 million yen）
（Up 13.3%↑、+ 16 million yen）
（Up 13.2%↑、+ 16 million yen）
（Up 13.7%↑、+ 12 million yen）

(YoY)
(ditto)(ditto)(ditto)The semiconductor category did well
The solution category did well as well
 Sales in the semiconductor category increased 26.7% YoY, reflecting an increase in the numberof engineers working in semiconductor plant.
 Sales in the solutions category increased 10.0% YoY. Orders for contracted development projects
from major customers remain strong. Sales increased especially due to the continued growth oflarge-scale development projects from major clients.
 Sales in the advanced technology solutions category declined 30.9% YoY. Although sales declined
due to the rebound from large-scale projects recorded in the previous fiscal year, thedevelopment of visual inspection equipment, continued steadily from the previous fiscal year, led
to an increase in profit margins.

３

Provision of Performance-linked bonus As of 1Q, Net sales were 21.8% more than anticipated of full-year forecast. The sales trend wasin line with previous years due to seasonal fluctuation trends, with delivery periods leaning
toward 4Q and 2Q.
 The company continued its policy of returning a portion of operating profit to employees, anddespite the provision of 12 million yen in performance-linked bonuses for 1Q, the company
achieved an operating profit margin of 17.8%. (up 0.5 percentage points compared to theprevious same quarter)

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

3

Financial Results Overview
FY11/2023 First Quarter

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4

Financial Results Overview (FY2023/1Q)
Record-high revenues achieved (Compared to the previous same quarter): 806 million yen
Net Sales
Operating profit : 143 million yen
Ordinary profit : 143 million yen: 100 million yen
ProfitNet Sales(Million yen)

（Up 9.9%↑、+ 72 million yen） （YoY）（Up 13.3%↑、+ 16 million yen） （ditto）（Up 13.2%↑、+ 16 million yen） （ditto）（Up 13.7%↑、+ 12 million yen） （ditto）(Million yen)

1,000

Operating Profit

200

733

Up
9.9%

806
126

500

Up
13.3%

143

100

0

0
FY2022/1Q

FY2023/1Q

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FY2022/1Q

FY2023/1Q

5

Operating Profit (FY2023/1Q)
Increased operating profit by 16 million yen(Compared to the previous same quarter)

Increase(Million yen)

Decrease

Operating profit

Operatingprofit rate
17.8%

Operatingprofit rate
17.3%

FY2022/1Q
OperatingprofitIncreased
sales

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Increase incost ofsales

Increase in
SG&A
expenses

FY2023_1Q
Operatingprofit6

Net Sales by Category (FY2023/1Q)
Solutions’ business remain strong with a 10.0% increase(compared to the previous same quarter)

Semiconductors’ business remains strong with an increase of 26.7%(compared to the previous same quarter)

Advanced Technology Solutions’ business decreased by 30.9% in response to(compared to the previous same quarter)

the large-scale projects in the previous fiscal year

Net Sales (by category)
Solution

Sales proportion(by category)(Million yen)

+53

538

FY2022/1Q
FY2023/1QUp
592 10.0%

Advanced
Technology
Solution39

mil yen

4.9%

500

550

Semi
conductor

600

Semiconductor
137

FY2022/1Q

+36

Up
26.7%

174

FY2023/1Q
100

150

174 mil yen
21.6%

FY2023/1Q

200

Advanced Technology Solution
57

FY2022/1Q
39

FY2023/1Q
0

20

40

Down
30.9%

△17
60

80

Solution

592 mil yen
73.5%

100

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

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7

Net Sales by Customer (FY2023/1Q)
Toshiba G, Hitachi G, Kioxia G

Major customers maintaining steady level
Sales to Hitachi G significantly increased（Up 27.8%（ compared to the previous same quarter ）Composition ratio of 23.8%)

Net Sales (by customer)214

FY2022/1Q

ToshibaG
東芝G

161

FY2023/1Q

150

FY2022/1Q

HitachiG
日立G

192

FY2023/1Q

FY2022/1Q

キオクシアG
Kioxia G

FY2022/1Q

183

Up
14.9%

210
100

Up
27.8%
Up
241 30.3%

FY2023/1Q

0

Down
24.4%

185

FY2023/1Q

Others
その他

Sales proposition(by customer)(Million yen)200

Others26.1%

ToshibaG

20.1%

FY2023/1Q
KioxiaG

29.9%

HitachiG

23.8%

300

(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 third quarter of the previous fiscal year. Taking this into account, sales to Toshiba G
increased by 4.7%.

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8

Quarterly Net Sales and Operating Profit (FY2023/1Q)
1Q cumulative Net Sales: 806 million yen
Increase: +72 million yen, Up 9.9%(compared to the previous same quarter)

1Q cumulative Operating Profit : 143 million yen
Increase: +16 million yen, Up 13.3%(compared to the previous same quarter)

Net Sales

Million yen

4,000Million yen+443 mil yen 3,700 Mil yen

Operating Profit

800

13.6%up+82mil yen
13.3%up

3,256 Mil yen

売
上 2,000
高

1,000

4Q
3Q
2Q
1Q

0

617Mil yen

918 Mil yen
Operating profit

Net Sales

3,000

28.2%
770 Mil yen
23.7%
834Mil yen
25.6%
733 Mil yen
22.5%

700 Mil yen+72百万円
9.9%up

1Q

600

4Q
400

200

806 Mil yen
21.8%

2022/112023/11(Actual)(Forecast)0

194 Mil yen
31.5%

3Q

136Mil yen
22.1%

2Q

160 Mil yen+16mil yen
25.9%
13.3%up

1Q

126 Mil yen
20.5%

1Q

143 Mil yen
20.5%

2022/112023/11(Actual)(Forecast)※ Some seasonal fluctuations can be observed in the company's performancedue to the number of engineers and project delivery dates.

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9

Business environment – Trend of Major Customers
Trend of our Major Customers(As of April 14 ,2023)

The business environment surrounding our company in the heavy electric machinery andinfrastructure-related sectors continues to be strong. Semiconductor manufacturers,
which entered a manufacturing adjustment phase, are moving toward recovery, but at
this point, they are still in the process of doing so. The impact of the COVID-19 has
settled down, and medium to long-term investment appetite is strong, but the response
to geopolitical risks remains an issue.

Toshiba G

Hitachi G

Kioxia G

Other

While there are some governance changes in the company, such as efforts to go delisted, there are no impact on the business environment as sales of energy systems andinfrastructure-related products are growing. In particular, we see the strong
performance of the energy system solutions segment related to power plants, forwhich we are engaged in system development, as a tailwind for the Company.
Demand is solid, especially in the Digital Systems & Services and Clean Energy &Mobility segments. Hitachi G is shifting to a strategy of focusing on social
infrastructure related to our business, and related capital investment has turned
around from the restrained trend during the COVID-19, and inquiries to the Company
are also increasing significantly.
Production is expected to be subject to a 30% adjustment due to a reaction to strong
demand for semiconductors for PCs, smartphones, and other applications. Although themaintenance and operation of the factory system in which the Company is involved is
not closely related to operation capacity, it is expected to be affected by costcooperation and other factors. However, the medium to long-term trend of the flash
memory market continues to expand, and with the government providing large subsidies,
there is a strong appetite for new capital investment, which is expected to lead toincreased orders for system development for the Company.
In the field of R&D for AI algorithm development, automotive-related enterprises,
producers of precision machinery, and firms that provide telecommunication
infrastructure have a strong demand for research investment. During the COVID-19, thetrend toward DX and labor-cost savings is accelerating, and inquiries to the Company
are growing.

(Compiled from publicly available information and media reports by the respective companies)
Copyright ⓒ 2023 T&S inc. All rights reserved.

10

Status of increase in engineers
Increase BP(※1) workforce
as well as the number of employee engineers.
Employee engineers % increase

2.8%（Compared to the previous fiscal year-end）

BP orders % increase

5.9%（Compared to the previous fiscal year-end）

Changes in Number of Employees(Number of Engineers)

400

300

Changes in the number of BP
orders(Number of BP orders)
150

296

304

313

19

19

20

277

285

267

100

19

200
248

293

50

100

0

118

125

90
61

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

2022年11月期
FY11/2022

エンジニア

スタッフ

2023年11月期
FY11/2023※2※2

2020年11月
Nov/2020

2021年11月
Nov/2021

2022年11月
Nov/2022

2023年2月
Feb/2023※1 BP...Business partner. Engineers engaged in our business in the form of outsourcing etc.
※2 as of April 14, 2023
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11

Statement of Income (FY2023/1Q)

Statement of Income (FY2023/1Q)
Unit: thousand yen

FY2022/1Q

FY2023/1Q+/- amount+/- %Net Sales

733,145806,016

72,871

9.9%

Cost of Sales

514,309559,687※

45,3788.8%

Gross Profit

218,835

246,328

27,493

12.6%

SG&A expenses

92,232102,910※

10,677

11.6%

Operating profit

126,602

143,418

16,815

13.3%（Operating profit rate）（17.3%）（17.8%）

Ordinary profit

126,552

143,246

16,693

13.2%（Ordinary profit rate）（17.3%）（17.8%）

Quarterly Profit

88,767

100,916

12,14913.7%（Quarterly profit rate）（12.1%）（12.5%）※ Includes 12,000 thousand yen of performance-linked bonuses to employees due to good performance.

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12Balance sheets (FY2023/1Q)

Balance sheets (FY2023/1Q)
Unit: thousand yen

FY2022

FY2023/1Q+/- amount

2,110,767

2,018,920△91,846

170,732

145,911△24,8212,281,500

2,164,831△116,668

498,233

323,321△174,911

49,76351,312

1,549

547,996374,633△173,362

Total shareholders’ equity

1,733,503

1,790,197

56,694

Total net assets

1,733,503

1,790,197

56,694

Total liabilities & net assets

2,281,500

2,164,831△116,668

Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities

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13

Topics

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14

Topics: Establishment of Nagasaki officeOpened a sixth office at Isahaya city, Nagasaki
Established an office in Isahaya City, Nagasaki Prefecture in April 2023.
Sales and Profit ↑ Aim for a medium to long-term expansion of business with theSony Group, where the orders have been increasing.
Contribution to SDGs ↑ Actively employing local residents who arephysically challenged.
Outline of Business Office(1) Name: Nagasaki Office, T&S inc.
(2) Address: 12-1, Eishomachi, Isahaya City,
Nagasaki Prefecture(3) Date of Establishment: April 1, 2023
(Image source) Based on CraftMAP white map

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15

FY Earnings Forecast
FY11/2023 First Quarter

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

Unit: million yen

FY11/2022（Actual）

Net sales

FY11/2023（Forecast）

FY11/2023
1Q（Actual）

Progress
rate

3,256

3,700

806

21.8%

Operating profit

617

700

143

20.5%

Ordinary profit

626

703

143

20.4%

Net profit(quarterly)

440

495

100

20.4%

Company

Solution
Semiconductor

Advanced
Technology
Solution

Increased by 9.9% YoY. Development projects from major customers such as Toshiba G,
Hitachi G, and Kioxia G were strong. Due to client delivery dates and the number ofengineer dispatch operating days, sales fluctuate seasonally, with sales usually biased
toward 2Q and 4Q, and performance in 1Q was in line with the trend in previous years. The
company increased the BP utilization in order to supplement its engineer resources, andthe shift to high-profit projects was also successful, resulting in a gross profit margin of
30.6%. Absorbing a 12 million yen provision for performance-linked bonuses, operating
profit rose 13.3% YoY to 143 million yen. Operating profit margin was 17.8%.
Sales increased 10.0% YoY. Sales increased due to continued large system development
projects from major clients.
Sales increased by 26.7% YoY. In addition to the recurring requests from semiconductor
plants for an increase in staff, contract terms and conditions have been revised from time
to time, contributing to the increase in sales and profit.
Sales declined 30.9% YoY. Sales declined in the quarter as large-scale projects inprogress is recorded as sales in the same period of the previous fiscal year. However, thedevelopment of visual inspection systems, which has been ongoing since the previous
fiscal year, remained steady, increasing profit margins.

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17

Shareholder Returns

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18

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 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
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 above
policy.
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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19

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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20