Consolidated Summary Report of Operating Results for Fiscal 2023 (Year Ended December
31, 2023) [Japan GAAP]
February 6, 2024
Company name:

Future Corporation

Listing: Tokyo Stock Exchange

Securities code:

4722

URL: https://www.future.co.jp

Representative:

Yasufumi Kanemaru, Chairman and President

Contact:

Yasukazu Matsushita, Executive Officer

TEL: 03-5740-5724

Scheduled date of annual general shareholders’ meeting:March 27, 2024

Scheduled date for distributing dividend payments:

March 28, 2024

Scheduled date for filing the securities report:

March 28, 2024

Creation of supplemental material on financial results:

No

Holding of financial results briefing:

Yes (for institutional investors and analysts)(Amount rounded off to million yen)

1.

Consolidated Results for Fiscal 2023 (January 1, 2023, to December 31, 2023)(1)

Consolidated operating results(Percentage figures indicate year-on-year changes.)

Net sales

EBITDA*

Profit attributable toowners of parent

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Fiscal 2023

59,32410.4

15,012

11.4

13,700

12.1

9,221

(0.2)

Fiscal 2022

53,73810.3

13,47532.8

12,226

35.8

9,239

45.0

(Note) Comprehensive income
Fiscal 2023: 10,044 million yen [77.5%]* EBITDA = Operating income + Depreciation + Amortization of goodwill
Profit per share

Fiscal 2022: 5,660 million yen [(3.8)%]

Return on equity (ROE)

Operating income margin

Yen

%

%

Fiscal 2023

104.12

19.2

23.1

Fiscal 2022

104.3421.3

22.8(Reference) Share of profit (loss) of entities accounted for using equity method(Note)(2)

In FY2023, the Company confirmed the accounting treatment for a business combination that had been provisionally accounted for. Figures
for FY2022 have been adjusted to reflect the confirmed accounting treatment.

Consolidated financial position
Total assets

Fiscal 2023
Fiscal 2022
(Reference) Shareholders’ equity(Note)(3)

Fiscal 2023: 46 million yen
Fiscal 2022: 61 million yen

Shareholders’ equity
ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

66,04351,38777.8

580.1057,97644,82977.3

506.23Fiscal 2023: 51,387 million yen

Fiscal 2022: 44,829 million yen

In FY2023, the Company confirmed the accounting treatment for a business combination that had been provisionally accounted for. Figures
for FY2022 have been adjusted to reflect the confirmed accounting treatment.

Consolidated cash flow position
Net cash provided by(used in) operating
activities

Net cash provided by(used in) investing
activities

Net cash provided by(used in) financing
activities

Cash and cash
equivalents at the endof the period

Million yen

Million yen

Million yen

Million yen

Fiscal 2023

7,568

(3,029)(3,898)28,215

Fiscal 2022

10,174(1,009)(3,017)27,552

2.

Cash dividends
Ratio of
Dividend
dividends
payoutto netTotal cash
ratio
dividends
assets(consolidat(consolidat
ed)ed)

Dividends per share
End offirstquarter

End ofsecondquarter

End ofthird
quarter

End offiscal year

Total

Yen

Yen

Yen

Yen

Yen

Million yen%%

Fiscal 2022

-

17.00

-

20.00

37.00

3,276

35.5

7.6

Fiscal 2023

-

20.00

-

20.00

40.00

3,543

38.4

7.4

Fiscal 2024 (forecast)

-

21.00

-

21.00

42.00

(Note)

3.

36.7

Revisions to the most recently announced dividend forecast: None

Projected Consolidated Results for Fiscal 2024 (January 1, 2024, to December 31, 2024)(Percentage figures indicate year-on-year changes.)
Net sales

EBITDA

Million yen%

First six months(accumulated total)

29,700

4.8

Full-year

63,000

6.2

Million yen

%

7,400

6.8

15,500

3.2

Operating income

Profit attributableto owners of parent

Profit per
share

Million yen%

Million yen

%

Yen

6,700

6.3

4,690

8.5

52.94

14,5005.8

10,15010.1

114.58

*

Notes

(1)

Changes in significant subsidiaries during the fiscal year under review (changes in specified subsidiaries accompanied bychanges in the scope of consolidation): None

(2)

Changes in accounting policies or estimates and retrospective restatements(i) Changes in accounting policies in accordance with revisions of accounting standards: Yes(ii) Changes in accounting policies other than item 1) above: None(iii) Changes in accounting estimates: None(iv) Retrospective restatements: None
(Note)(3)

For more information, see “(5) Notes to consolidated financial statements (Changes in accounting policies)” in “4.
Statements and Major Notes” on page 15 of the appendix.

Consolidated Financial

Number of outstanding shares (common stock)(i)

Total outstanding shares as of the endof the period (including treasury
shares)Fiscal 2023

95,328,000 shares Fiscal 2022

95,328,000 shares

Total treasury shares as of the end of
the period

Fiscal 2023

6,744,163 shares Fiscal 2022

6,771,952 shares(iii) Average number of outstanding shares
during the period under review

Fiscal 2023

88,573,589 shares Fiscal 2022

88,546,007 shares(ii)(Reference) Overview of non-consolidated results
Non-consolidated Results for Fiscal 2023 (January 1, 2023, to December 31, 2023)(1)

Non-consolidated operating results(Percentage figures indicate year-on-year changes.)

Net sales
Million yen

Operating revenue%

Million yen

Operating income

Profit%Million yen%

Million yen%

Fiscal 2023

2,344 (70.7)

13,727 208.9

11,634

96.3

10,240

98.3

Fiscal 2022

8,014

4,443

5,926

18.8

5,164

39.3

6.4

Profit per share
Yen

Fiscal 2023

115.61

Fiscal 2022

58.32

55.4

(2)

Non-consolidated financial position
Total assets

Shareholders’ equity
ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

Fiscal 2023

46,59041,90589.9

473.06

Fiscal 2022

40,83834,34484.1

387.82(Reference) Shareholders’ equity*

Fiscal 2023: 41,905 million yen

Fiscal 2022: 34,344 million yen

This summary of annual financial results is outside the scope of auditing by a certified public accountant or an audit corporation.

* Points to note about the proper use of projections, and other noteworthy events
Any forward-looking statement, including earnings forecasts, contained in this document is based on information currently held by theCompany and assumptions the Company considers to be reasonable, and the Company does not promise to achieve any of them. Actual
results may differ significantly from forecasts due to various uncertain factors.

○ Contents
1.

Overview of Operating Results and Other .................................................................................................................................... 2(1) Overview of operating results for fiscal 2023 ......................................................................................................................... 2(2) Overview of the financial position for fiscal 2023 .................................................................................................................. 3(3) Overview of cash flows for fiscal 2023 .................................................................................................................................. 4(4) Future outlook ........................................................................................................................................................................ 5(5) Dividend policy and dividends for the current and next year ................................................................................................. 6

2.

The Future Group.......................................................................................................................................................................... 7

3.

Basic Approach to Selection of Accounting Standards ................................................................................................................. 7

4.

Consolidated Financial Statements and Major Notes .................................................................................................................... 8(1) Consolidated balance sheets ................................................................................................................................................... 8(2) Consolidated statements of income and comprehensive income .......................................................................................... 10(3) Consolidated statements of changes in net assets ................................................................................................................. 12(4) Consolidated statements of cash flows ................................................................................................................................. 14(5) Notes to consolidated financial statements ........................................................................................................................... 16(Notes on premise of a going concern) ................................................................................................................................. 16(Changes in accounting policies) .......................................................................................................................................... 16(Business Combinations) ...................................................................................................................................................... 16(Segment information) .......................................................................................................................................................... 17(Per Share Information) ........................................................................................................................................................ 20(Significant subsequent events) ............................................................................................................................................ 21

5.

Other ........................................................................................................................................................................................... 22

- 1 -

1.

Overview of Operating Results and Other(1) Overview of operating results for fiscal 2023
(Overview of the fiscal year under review)
Consolidated results of the Group for the fiscal year under review (January 1, 2023, to December 31, 2023)
were as follows:
Net sales
Operating income
Profit attributable to owners of parent¥59,324 million¥13,700 million¥9,221 million(up 10.4% year on year)(up 12.1% year on year)(down 0.2% year on year)

Looking at the economic environment during the current fiscal year under review, we saw companies
continue to actively harness the power of IT to change their operations, such as promoting digitaltransformation (DX), implementing business reforms, and creating new digital services, despite global
uncertainty, persistent inflation, and the increase of overseas interest rates. Companies are revamping theirwork styles and overall supply chains following the enforcement of the Work Style Reform Law, andaccelerating the use of IT in areas related to ESG and the SDGs. These things boost IT investments in all
sectors and fields. In terms of individual lifestyles, the use of IT-driven services, such as shopping at ecommerce sites, enjoying entertainment and sports on video and online, and accessing education and selfdevelopment services online, has become common, and various related services are being created.
Working against this backdrop, we won contracts from customers in a wide range of industries and madeprogress with large-scale projects that would contribute to medium-term growth. As a result, consolidated
net sales and operating income for the current fiscal year under review increased year on year. On the other
hand, profit attributable to owners of parent decreased slightly. This is a function of the recording ofextraordinary income from the sale of investment securities in the previous fiscal year, and the recording of
an impairment loss on fixed assets and loss on valuation of investment securities as extraordinary losses in
the current fiscal year.
Details of the performance (net sales and operating income) of each segment are as follows.
(i)

IT Consulting & Service Business
Future Architect, Inc. (including the Technology Division of Future Corporation) continued to moveahead with various projects of customers in a wide range of industries and won contracts with them.
They include designs of platforms for integrated data management of procurement, manufacturing, andquality control in retail, renovations of mission-critical systems of apparel companies, grand designs
for advancing DX of a newspaper company group, and design/development relating to the revampingof mission-critical systems and IT infrastructures in the food wholesaling and public services.
In addition to that, the company made steady progress with the projects to introduce next-generationbanking systems to regional financial institutions. The first one is at the final integration test phasetoward release in the next fiscal year and the second one for another bank is at the developmental phase.
These projects will contribute to the Company’s medium-term growth. The company also madeprogress in the introduction of a loan support system FutureBANK at several financial institutions, andprovided DX assistance to many companies including the logistics and apparel companies.
Furthermore, as a result of ensuring quality control in implementing projects, its net sales and operating
income increased year on year.
Future Inspace, Inc. performed steadily in development for system infrastructure renewal and cloud
migration projects from existing customers, in addition to the provision of regular maintenance andoperation services. As a result, net sales and operating income increased year on year.
Future One, Inc. worked on boosting orders for the sale of its original InfiniOne software package, thecompany’s key product, through industry-specific sales strategies, mainly in the steel industry. On theother hand, orders received were sluggish due to a slowdown of IT investment by SMEs following theimplementation of the invoice system in Japan (a consumption tax system that started in October 2023).
As a result, net sales and operating income decreased year on year.
YDC Corporation saw continuous steady progress in developing new customers as well as cultivating
existing customers, particularly in the manufacturing industry. In addition to these traditional system
integration projects, it enjoyed an increase in orders led by the strategic planning phase, such as missioncritical system renovation and grand design consultation for the SmartFactory concept. Furthermore, it
provided higher added value to customers and improved its profitability. As a result, net sales andoperating income increased year on year.
- 2 -While dit Co., Ltd. saw an increase in the sales ratio of cybersecurity-related services, such as
vulnerability assessment, incident response and network security solutions, orders for services fell shortof expectations and recruiting costs continued to occur, resulting in a decline in both net sales andoperating income.
As a result, the segment saw both net sales and operating income increase to reach 50,817 million yen(up 11.5% year on year) and 13,705 million yen (up 6.2% year on year) respectively.
(ii) Business Innovation Business
YOCABITO CO., LTD. saw a recovery in gross margin ratio helped by per-product management withutilization of a digital platform, which was promoted from the current fiscal year, and strategic sales
price setting. However, sales of fall and winter apparel were weaker than expected because of the warm
winter, and the sales of outdoor goods were sluggish due to the increasingly competitive market,
resulting in a decrease in net sales year on year and continued operating loss.
Tokyo Calendar Inc. saw a robust stream of revenue from its online services, such as Tokyo Calendar
Date, and its advertising sales have got on a recover track. However, it incurred costs relating to thedevelopment of its new service Gourmet Calendar, resulting in an increase in net sales but a decreasein operating income year on year.
CodeCamp Co., Ltd. enjoyed an uptick in its corporate training business and reduced costs byimproving operational efficiency, resulting in an increase in net sales and operating income year on
year.
LaiBlitz, Inc. launched the esports business as a new initiative and held audition events. In terms ofbusiness performance, it started the projects of introducing FastBiz, a packaged membershipmanagement and e-commerce service for sports teams, to several professional baseball teams, leading
to a year-on-year increase in both net sales and operating income.
CURIOSITY inc., newly consolidated from the second quarter of the fiscal year under review, isengaged in store design for luxury brands and interior design for hospitality (luxury hotels and highend residences), as well as cosmetics and other products, mainly for overseas customers. During the
fiscal year under review, it made steady progress in store design for luxury brands overseas, contributing
to our business results.
As a result, the segment saw an increase in both net sales and operating income, with net sales totaling
8,385 million yen (up 1.3% year on year) and an operating loss standing at 144 million yen (down froman operating loss of 274 million yen for the same period last year).
Operating income under adjustments which post income and expenses of Future Corporation’s
holding company functions and eliminations of intersegment transactions in the reporting segment, was
263 million yen, an increase of 599 million yen year on year (up from an operating loss of 336 million
yen for the same period last year). This was mainly due to the increased technical support fees that
Future Corporation received through its IT consulting and services business.
(Note) Segment results mentioned above are before adjustment for intersegmental sales and transfers.
(2) Overview of the financial position for fiscal 2023
(Assets, liabilities and net assets)
The following is the analysis of financial position for the fiscal year under review.
AssetsLiabilities
Net assets¥66,043 million¥14,656 million¥51,387 million(up 13.9% year on year)(up 11.5% year on year)(up 14.6% year on year)

The following is the analysis of financial position for the fiscal year under review.
(i)AssetsCurrent assets were 44,237 million yen on a consolidated basis at the end of the fiscal year under review,
up 5,401 million yen from the preceding year, and non-current assets amounted to 21,806 million yen,
up 2,665 million yen, with total assets standing at 66,043 million yen, up 8,067 million yen. The main
factors included an increase in cash and deposits (up 1,363 million yen) that was boosted by increasein profit, an increase in notes and accounts receivable – trade, and contract assets (up 1,646 millionyen), and an increase in other current assets (up 3,138 million yen).
- 3 -(ii) Liabilities
Current liabilities were 10,842 million yen at the end of the fiscal year under review, up 981 million
yen from the preceding year, and non-current liabilities were 3,813 million yen, up 527 million yen.
Hence, total liabilities came to 14,656 million yen, up 1,509 million yen. The main factors included anincrease in deferred tax liabilities (up 525 million yen year on year) due to a rise in the market price ofinvestment securities held, an increase in other current liabilities (up 785 million yen), and an increase
in income taxes payable (up 301 million yen).
(iii) Net assets
Net assets were 51,387 million yen at the end of the fiscal year under review, up 6,557 million yen fromthe preceding year. The main factors included an increase in retained earnings (up 5,679 million yen)
and an increase in valuation difference on available-for-sale securities (up 815 million yen).
(3) Overview of cash flows for fiscal 2023
The following is the analysis of the Group’s consolidated cash flows for the fiscal year under review.
(i)

Net cash provided by (used in) operating activities
Net cash from operating activities saw an inflow of 7,568 million yen in total (compared with an inflow
of 10,174 million yen in the previous fiscal year), chiefly due to the posting of profit before income
taxes of 13,194 million yen and depreciation of 1,147 million yen, despite income taxes paid amounting
to 6,307 million yen.

(ii) Net cash provided by (used in) investing activities
Net cash from investing activities saw an outflow of 3,029 million yen (compared with an outflow of
1,009 million yen in the previous fiscal year), chiefly due to the posting of purchase of intangible assetsof 1,335 million yen and purchase of shares of subsidiaries resulting in change in scope of consolidationof 1,410 million yen.
(iii) Net cash provided by (used in) financing activities
Net cash from financing activities saw an outflow of 3,898 million yen (compared with an outflow of
3,017 million yen in the previous fiscal year), mainly reflecting cash dividends paid of 3,542 million
yen.
(iv) Cash and cash equivalents at the end of the period
Cash and cash equivalents at the end of the fiscal year under review stood at 28,215 million yen, withan increase of 663 million yen resulting from operating, investing and financing activities.

- 4 -(4) Future outlook
The Group’s earnings forecast for the fiscal year ending December 31, 2024, is as follows.
Net sales
Operating income
Profit attributable to owners of parent¥63,000 million¥14,500 million¥10,150 million(up 6.2% year on year)(up 5.8% year on year)(up 10.1% year on year)

In the medium to long term, corporations will continue making aggressive investments in information
technology as they move toward DX and adapt to changes in the ways people work, such as remote working,as well as address economic and social issues, including ESG factors and the SDGs.
The Group will strive to accurately grasp the needs of companies promoting these management reforms
through IT, then leverage Group synergies to provide active and multilateral support in an effort to gain evenfurther support from customers in many and diverse industries.
We will also continue to promote our measures concerning ESG and the SDGs, and support customers’
environmental and decarbonization efforts.
Furthermore, by making effective use of intellectual property and conducting flexible strategic investments,
including M&A, as the Group, we will evolve our business model and achieve further growth from the next
fiscal year onward. In addition, the Group will also invest in developing a business foundation that willcontribute to its future growth, such as continuous personnel recruitment, training and R&D.
As for M&A, we announced in January 2024 the business integration with Revamp Corporation. Revamp
engages in operations focused on business support, digital transformation, and investment services to help
client companies realize medium- to long-term growth, in line with its corporate philosophy of revitalizing
companies from the core. Integrating the expertise Revamp has gained through working closely with clientcompanies to implement management reforms with the Group’s proficiency in designing and implementing
corporate strategies and business processes using the latest technology, we will further enhance the problemsolving ability of the Group as a whole and accelerate its growth.
In terms of personnel recruitment, we will start, for the hiring of new graduates, Value Recruitment basedon their experience and skills developed during their student years, applying a new compensation systemwith an increase in estimated annual salary. In addition, we will conduct various initiatives such as
disseminating recruitment information on the Group’s unique metaverse platform. Through these efforts,
we will continue to attract new talent.
In tandem with this, the Group will strengthen its governance by strengthening internal communication
within the Group and further improving the accuracy of its quality management.
Noteworthy events in each business segment are as follows.
(i)

IT Consulting & Service Business
Future Architect, Inc. has received orders for grand designs from customers implementing management
reforms and mission-critical system renewals from diverse industries conscious of the advancement of
DX. The company will ensure the implementation of these projects, while striving to acquire moreorders from companies with investment demand, for example by providing customers with DX
professional development programs.
It will also strengthen its provision of IT solutions that will contribute to solving long-standing issues,
such as a next-generation banking system for the regional financial sector, GlyphFeeds for media,
FutureApparel for apparel, and FutureLOGI for logistics, and bolster its initiatives aimed at mediumto long-term growth, such as supporting the realization of digitally sophisticated corporate strategies asa whole.
Furthermore, it will develop a framework that will lead the age to come by working to emphasize theacquisition of excellent talented people, investment in training, quality control, and project
management.
Future Inspace, Inc. is looking to further improve development quality and hire/train employees withan eye to steadily increasing revenue, so that the stable development of several large-scale projects,
such as system infrastructure renewal and cloud migration projects for existing customers, is ensured.
Future One, Inc. will continue to work on enhancing its product lineup while leveraging the strength of
its original InfiniOne software package to boost orders through industry-specific sales strategies. It will

- 5 -

provide total solutions under an integrated manufacturing and sales system to enhance future value of
its customers, all with an eye to higher revenue.
YDC Corporation will further focus on proposing SmartFactory solutions to the manufacturing industry
and continuously stepping up efforts to propose solutions to new and existing customers by introducing
such solutions to pilot customers, seeking to expand its customer contact reform business with a focus
on SaaS services. In addition, it aims to acquire new projects in the logistics area by taking advantageof the Group synergy and contribute to the ESG sector through a consortium that pursues the ideal formof sustainability management. With these efforts, it will strive to increase revenue further.
In order to provide companies with a security life cycle that achieves zero trust, dit Co., Ltd. will
strengthen its human resource strategy, including recruitment activity and internal training, and its
cooperation with its subsidiary, Cyber Solutions, Inc. In addition, it will promote log analysis and theprovision of crisis management services, focusing on security risk assessment, for further revenue
growth.
(ii) Business Innovation Business
YOCABITO Co., Ltd. will continue to strive to recover its profitability by increasing the accuracy ofanalytics with the use of a digital platform, increasing operational efficiency through data-driven
approach, and speeding up decision-making. It will also steadily promote the renewal of some private
brands as a pillar of new growth.
Tokyo Calendar Inc. will further enhance customer attraction and user engagement by strengthening
digital promotion by analyzing and utilizing user data. The company will also work on a seamlesscooperation of monthly magazines and web media with its services including Tokyo Calendar Date and
Gourmet Calendar to enhance exposure for further growth and aim to increase the overall profitability.
Following the previous year, CodeCamp Co., Ltd. will enhance its service for companies and local
governments in consideration of the market needs, including DX professional development andreskilling. As for services for individual customers, it will properly identify individual learning needs
and focus on the development of necessary courses, aiming to receive more orders.
Aiming to develop the esports industry itself, LaiBlitz, Inc. will build a data analysis system for esports
with the Future Fastball development technology, which leverages data to strengthen teams, to create aworld-class professional esports team, and publish some analytical data. Furthermore, it will
incorporate the technologies and know-how acquired in the esports business into its systems for sports
teams, aiming to contribute to the further expansion of customers’ business.
CURIOSITY inc. will focus on the business of interior design for hospitality (luxury hotels and highend residences), as such projects are large in size, and will continuously receive orders for store designof global brands in line with the global expansion of customers. At the same time, it will hire designers
who understand and practice the CURIOSITY design philosophy and are globally capable.
(5) Dividend policy and dividends for the current and next year
The Company determines its dividend by comprehensively taking into account the state of its accounting
period profit and loss, cash flows and treasury stock purchasing while placing shareholder return as its
priority management issue and securing a proper level of internal reserves for the organization to continue
growing in a sustainable manner.
The Company plans to apply a dividend payout ratio standard of at least 35% of consolidated earnings.
Under the above-mentioned policy, we plan to pay a total dividend of 20.00 yen per share as a year-end
dividend from surplus. The full fiscal year dividend comprising the year-end dividend and the previously
paid interim dividend is expected to be 40.00 yen per share (consolidated dividend payout ratio of 38.4%).
Under the above-mentioned policy, we plan to pay an annual dividend of 42.00 yen per share (year-end
dividend of 21.00 yen and interim dividend of 21.00 yen, consolidated dividend payout ratio of 36.7%) as adividend from surplus for the next fiscal year.

- 6 -

2.

The Future GroupThe Group (the Company and its related companies) has introduced a holding company structure, and consistsof 20 consolidated subsidiaries and three equity-method affiliates as of December 31, 2023.
The Company, as a holding company, establishes the Group’s growth strategy, monitors management of theGroup companies, and provides specialty services to these companies. Details of the business segments of theGroup and how major related companies in charge are positioned in the relevant segment are as follows.
(IT Consulting & Service Business)
In this business, the Group helps clients solve problems, by sharing management issues with them from amanagerial perspective, understanding the essence of the clients’ businesses and establishing information
systems for them using advanced IT.
Company name:
Future Architect, Inc. (subsidiary)
Future Inspace, Inc. (subsidiary)
YDC Corporation (subsidiary)

Future One, Inc. (subsidiary)
dit Co., Ltd. (subsidiary)Business activities
Provision of IT consulting services from an objective and independent
standpoint by using leading-edge information technology
Additional development as well as maintenance and operation services
for projects primarily developed by Future Architect, Inc.
Provision of IT consulting services, including a solution for
integrating and analyzing quality information, mainly to customers in
the manufacturing business
Development, sales and maintenance of mission-critical packaged
software for sales management, production management, accounting
and other processes as well as provision of cloud-based services
Security consulting and forensic services
Sales of products for network operations and security

Innovation Laboratory, Inc. (subsidiary)

Provision of management consulting services to create innovation

Logizard Co., Ltd. (affiliate)

Development and sales of and support for cloud-based logistics andinventory management software (warehouse management system or
WMS)(Business Innovation Business)
In this business, the Group provides original services using IT and creates business innovations.
Company name:Tokyo Calendar Inc. (subsidiary)Business activities
Publication of the magazine “Tokyo Calendar,” provision of
information using websites and smartphone applications, and services
including reservations for tables at restaurants

YOCABITO CO., LTD. (subsidiary)

Sales of sports, outdoor and fitness gear on the Internet

CodeCamp Co, Inc. (subsidiary)

Online and offline educational service including operation of theonline programming school “CodeCamp”

LaiBlitz, Inc. (subsidiary)

Development of software related to sports and entertainment andoperation of online services

CURIOSITY inc. (subsidiary)

Planning and production of commercial and industrial designs, andplanning, development, design, and production of new products

Among affiliated companies engaged in businesses that are not included in the two businesses mentioned
above, such as management of a handball team, investing in, as well as holding and managing securities, themain companies are as follows:•

Major affiliated company
Zeekstar Sports Entertainment, Inc. (subsidiary)
Future Investment Corp. (subsidiary)

3.

Basic Approach to Selection of Accounting Standards
Taking into consideration the comparability of consolidated financial statements among enterprises, the Groupprepares consolidated financial statements under Japanese GAAP.
The Company intends to adopt International Financial Reporting Standards (IFRS) appropriately inconsideration of circumstances inside and outside of Japan.
- 7 -

4.

Consolidated Financial Statements and Major Notes(1) Consolidated balance sheets(in millions of yen)
Consolidated fiscal year
under review(December 31, 2023)

Previous consolidated
fiscal year
(December 31, 2022)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade, and contract
assetsSecurities
Merchandise and finished goods
Work in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Software
Customer-related assets
Technology-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 8 -26,65228,0158,549

10,195

1,000
1,116
22
1,498
(3)
38,835

200
1,160
31
4,637
(3)
44,237

1,815(1,142)673
0
3,107(2,703)
404
1,078

1,869
(1,317)552
0
3,115(2,648)
466
1,020

401
2,992
56
322
5
3,777

1,083
3,370
90
1,135
4
5,684

12,856
1,188
244
(4)
14,284
19,14057,976

13,770
1,205
0
126
(1)
15,10221,806
66,043(in millions of yen)
Consolidated fiscal year
under review(December 31, 2023)

Previous consolidated
fiscal year
(December 31, 2022)
Liabilities
Current liabilities
Accounts payable – trade
Accounts payable – other
Income taxes payable
Provision for bonuses
Provision for quality assurance
Provision for loss on projects
Other
Total current liabilities
Non-current liabilities
Asset retirement obligations
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
CapitalCapital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

- 9 -

1,067
1,810
2,280
250
60
37
4,354
9,860

1,096
1,604
2,582
277
103
38
5,140
10,842

356
2,798
130
3,285
13,146

357
3,324
132
3,813
14,6564,000
3735,858(2,210)37,6854,000
8441,537(2,201)
43,421

7,123
(5)
25
7,143
44,82957,976

7,938
(2)
30
7,966
51,38766,043

(2) Consolidated statements of income and comprehensive income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Directors’ compensations
Salaries and bonuses
Other salaries
Rents
Training expenses
Research and development expenses
Depreciation
Recruiting expenses
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Dividend income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Loss on investments in investment partnerships
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Impairment loss
Total extraordinary losses
Profit before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit(Breakdown)
Profit attributable to owners of parent

Previous consolidated
fiscal year
(From January 1, 2022
to December 31, 2022)
53,73827,08326,655(in millions of yen)
Consolidated fiscal year
under review(From January 1, 2023,
to December 31, 2023)
59,32430,51728,807

567
6,086
295
945
615
980
460
767
31
3,677
14,428
12,226

639
6,627
326
933
738
1,190
418
958
163
3,109
15,106
13,700

338

317

61

46

15
415

55
419

34
35
70
12,57127
5
32
14,087

732
732

0
0

40
40
13,264
4,028
(3)
4,024
9,239

490
404
894
13,194
4,103
(131)
3,972
9,221

9,239

9,221

- 10 -

(in millions of yen)
Consolidated fiscal year
under review(From January 1, 2023,
to December 31, 2023)

Previous consolidated
fiscal year
(From January 1, 2022
to December 31, 2022)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests- 11 -(3,588)
(6)
15

815
2
4

0

(0)

(3,579)5,660

822
10,044

5,660

10,044--

(3) Consolidated statements of changes in net assets
Previous consolidated fiscal year (from January 1, 2022, to December 31, 2022)(in millions of yen)
Shareholders’ equity
CapitalBalance at the beginning of
the period
Cumulative effects due
to changes in accounting
policies
Balance at the beginning of
the current fiscal year
reflecting changes inaccounting policies
Changes of items during
the period

Capital surplus
4,000

Retained earnings-

Treasury shares

29,299Total shareholders’ equity(2,221)

31,078

64

4,000

-

29,36464(2,221)

31,142

Dividends from surplus(2,744)(2,744)

Profit attributable toowners of parent

9,239

9,239

Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other than shareholders’equityTotal changes of items
during the period
Balance at the end of theperiod

37

(0)

(0)

10

48

-

37

6,494

10

6,542

4,000

37

35,858(2,210)37,685

Accumulated other comprehensive income
Valuation difference on
Deferred gains or losses
available-for-saleon hedges
securities
Balance at the beginning of
the period
Cumulative effects due
to changes in accounting
policies
Balance at the beginning of
the current fiscal year
reflecting changes inaccounting policies
Changes of items during
the period

10,711

Foreign currencytranslation adjustment

Total accumulated othercomprehensive income

910,723

1

Total net assets

41,80164

10,7111

9

10,72341,865

Dividends from surplus(2,744)

Profit attributable toowners of parent

9,239

Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other than shareholders’equityTotal changes of items
during the period
Balance at the end of theperiod(0)
48(3,588)(6)

16(3,579)(3,579)(3,588)(6)

16(3,579)

2,963

7,123

(5)

25

7,143

44,829- 12 -

Consolidated fiscal year under review (from January 1, 2023, to December 31, 2023)(in millions of yen)
Shareholders’ equity
CapitalBalance at the beginning of
the period
Changes of items during
the period

Capital surplus
4,000

Retained earnings
37

Treasury shares

35,858

Total shareholders’ equity(2,210)37,685

Dividends from surplus(3,542)(3,542)

Profit attributable toowners of parent

9,221

9,221

Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other than shareholders’equityTotal changes of items
during the period
Balance at the end of theperiod

46

(0)

(0)

9

56

-

46

5,679

9

5,735

4,000

84

41,537(2,201)

43,421

Accumulated other comprehensive income
Valuation difference on
Deferred gains or losses
available-for-saleon hedges
securities
Balance at the beginning of
the period
Changes of items during
the period

7,123

Foreign currencytranslation adjustment

Total accumulated othercomprehensive income

25

7,143

(5)

Total net assets

44,829Dividends from surplus(3,542)

Profit attributable toowners of parent

9,221

Purchase of treasury
shares
Disposal of treasury
sharesNet changes of items
other than shareholders’equityTotal changes of items
during the period
Balance at the end of theperiod

(0)
56
815

2

4

822

822

815

2

4

822

6,557

7,938

(2)

30

7,966

51,387- 13 -

(4) Consolidated statements of cash flows(in millions of yen)
Consolidated fiscal year
under review(From January 1, 2023,
to December 31, 2023)

Previous consolidated
fiscal year
(From January 1, 2022
to December 31, 2022)
Net cash provided by (used in) operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for quality assurance
Increase (decrease) in provision for loss on projects
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on investments in investment partnerships
Foreign exchange losses (gains)
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Impairment loss
Decrease (increase) in notes and accounts receivable –trade and contract assets
Decrease (increase) in inventories
Increase (decrease) in accounts payable – trade
Increase (decrease) accounts payable – other
Decrease (increase) in other assets
Increase (decrease) in other liabilities
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities- 14 -

13,264
1,218
31
(71)
6
25
37
(340)
0

13,194
1,147
163
(14)
27
43
1
(322)
1

(61)

(46)

34
41
(732)
40
-

27
(33)
490
404

(1,268)(1,522)

111
136
299
(60)
1,083
13,793354(0)(3,972)
10,174

4
25
(290)
(548)
796
13,547330(1)(6,307)7,568

(in millions of yen)
Consolidated fiscal year
under review(From January 1, 2023,
to December 31, 2023)

Previous consolidated
fiscal year
(From January 1, 2022
to December 31, 2022)
Net cash provided by (used in) investing activities
Purchase of securities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments for asset retirement obligations
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from redemption of investment securities
Payments for investments in capital
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Repayments of short-term loans payable
Repayments of long-term loans payable
Repayments of finance lease obligations
Cash dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period- 15 -(1,100)2,000(76)(1,693)
(1)

100
(166)
(1,335)-(509)(1,410)

(989)
1,432
200
(279)
(6)

(2)
8
(211)
(17)

11

1

3
(1,009)3(3,029)

(13)
(74)
(172)
(2,756)(0)(3,017)

(117)
(39)
(198)
(3,542)(3,898)

(26)

22

6,121
21,43027,552663
27,552
28,215(5) Notes to consolidated financial statements(Notes on premise of a going concern)
Not applicable.
(Changes in accounting policies)(Application of Implementation Guidance on Accounting Standard for Fair Value Measurement)
The Group has applied the “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, June 17, 2021) from the beginning of the fiscal year underreview, and it has applied the new accounting policy provided for by the Implementation Guidance on
Accounting Standard for Fair Value Measurement prospectively in accordance with the transitional
measures provided for in paragraph 27-2 of the Implementation Guidance on Accounting Standard for
Fair Value Measurement. This change has no effect on the consolidated financial statements.
(Business Combinations)
Business combination by acquisition
The Company, at its Board of Directors meeting held on March 23, 2023, resolved that Future
Investment Corp., a subsidiary of the Company, would acquire all shares of CURIOSITY inc. and makeit a subsidiary. Future Investment Corp. entered into a share transfer agreement on April 3, 2023, andacquired all shares on April 21, 2023.
1. Overview of business combination(1) Name and details of business of the acquired company
Name of the acquired company: CURIOSITY inc.
Details of business:

Planning and production of commercial and industrial designs,
and planning, design, and production of new products(2) Main reasons for the business combination
By combining the Group’s technology and consulting capabilities of designing management
and IT with CURIOSITY’s boundary-less design capabilities cultivated in real space, a
tremendous increase in added value created by the entire Group is expected. Contribution to thedevelopment of new areas, such as business creation, is also anticipated. Furthermore,
CURIOSITY’s potential to significantly expand the design domain will increase by adding
new digital power to design capabilities in real space.
Judging that the acquisition would significantly contribute to enhancing the Group’s corporate
value over the coming years, the Company decided to acquire shares of the company and makeit a subsidiary.
(3) Date of business combination
April 21, 2023 (stock acquisition date)
April 1, 2023 (deemed acquisition date)(4) Legal form of business combination
Acquisition of shares(5) Name of the company after business combination
CURIOSITY inc.
(6) Percentage of voting rights acquired
100%(7) Main basis for determining the company to be acquired
The Company’s consolidated subsidiary acquired the shares in exchange for cash.
2. Period of performance of the acquired company included in the consolidated financial statements
From April 1, 2023, to December 31, 2023
3. Acquisition cost for the acquired company and breakdown of the consideration by type
Consideration for the acquisitionCash2,220 million yen- 16 -

4. Details and amount of major acquisition-related expenses
Remuneration/fees, etc. for advisory services
96 million yen
5. Amount of goodwill arisen, reasons for it, and method and period of amortization(1) Amount of goodwill arisen
846 million yen
The amount of goodwill has been fixed upon completion of the allocation of acquisition costs.
(2) Reasons for the goodwill arising
Due to the extra earning potential expected from the future development of business(3) Method and period of amortization
Straight-line amortization over eight years
6. Amounts of assets accepted and liabilities assumed on the date of business combination and main
breakdown thereof
Current assets
Non-current assets

982 million yen
1,054 million yen

Total assets
Current liabilities
Non-current liabilities
Total liabilities

2,037 million yen
306 million yen
357 million yen
663 million yen

7. Outline of contingent consideration for acquisition prescribed in the business combinationagreement and accounting policy for future fiscal years(1) Outline of contingent consideration for acquisition
Consideration for the acquisition does not include contingent consideration. If the conditions aremet, the contract will incur a contingent consideration for acquisition (earn-out consideration) of
up to 660 million yen, which has not yet been determined.
(2) Accounting policy
In the event of a change in the consideration for acquisition, the acquisition cost shall be deemed
to have occurred at the time of acquisition and be revised. The amount of goodwill andamortization of goodwill shall be also revised.
8. Amounts allocated to intangible assets other than goodwill, breakdown by major type, and weighted
average amortization period
Customer-related assets
105 million yen (amortization period: 2 years)
Technology-related assets

914 million yen (amortization period: 10 years)

9. Approximate amount of effects on the consolidated statements of income for the fiscal year underreview assumed that the business combination consummated on the beginning of the fiscal year
under review, and the method for calculating that amount
Details are omitted because such effects are not material in amount.
(Segment information)[Segment information]
1. Overview of reportable segments
The reportable segments of the Group are constituent units of the Company for which separate
financial information can be obtained, and the Board of Directors examines such information on aregular basis to determine the allocation of management resources and evaluate business- 17 -

performance.
The Group defines the classification of business segments by comprehensively taking into accountmain services, solutions, customers and markets, and has two reportable segments: the IT
Consulting & Service Business and Business Innovation Business.
The business operations of the two reportable segments are as follows:
Reportable segments

Business operations

IT Consulting & Service BusinessIn this business, the Group helps clients solve problems, by sharing management
issues with them from a managerial perspective, understanding the essence of theclients’ businesses and establishing information systems for them using advanced
IT.

Business Innovation BusinessIn this business, the Group provides original services using IT and createsbusiness innovations.

2. Methods of calculating net sales, income or loss, assets, liabilities, and other items by reportablesegment
The accounting method applied to the above-mentioned business segments is a method in
accordance with the accounting policy applied to the preparation of the consolidated financial
statements.
Income of reportable segments is based on operating income.
Intersegment sales and transfers are based on market prices.

- 18 -

3. Information on the amounts of net sales, profit or loss, assets, liabilities, and other items byreportable segment
Previous consolidated fiscal year (from January 1, 2022, to December 31, 2022)(in millions of yen)

Reportable segments
IT Consulting Business& Service
Innovation
Business
Business

Other(Note 1)

Total

Total

Adjustments(Note 2)

Amount stated in
the financial
statements(Note 3)

Net sales
Sales to outside clients

45,487

8,204

53,691

46

53,738-53,738Intersegment sales ortransfer

106

69

176

381

558

(558)

-

Total

45,5938,274

53,868428

54,296(558)

53,738Segment profit (loss)

12,910(274)

12,636(72)

12,563(336)

12,226

Segment assets

30,323

4,576

34,8996,200

41,09916,87657,976

Depreciation

1,021

132

1,153

16

1,170

47

1,218

Amortization of
goodwill

10

21

31

-

31

-

31

1,722

204

1,926

18

1,944

25

1,970

Other items

Increase in property,
plant and equipment andintangible assets(Note)

1.
2.
3.

“Other” is a segment for operations not included in reportable segments. The segment covers an operation businessof a handball team, and investment in, holding of, and management of securities.
Adjustments to segment profit (loss) and segment assets represent the amount of intersegment transactions
eliminated and income, expenses and assets of the holding company excluding the technology segment.
Segment profit (loss) is adjusted with operating income in consolidated financial statements.

Consolidated fiscal year under review (from January 1, 2023, to December 31, 2023)(in millions of yen)

Reportable segments
IT Consulting Business& Service
Innovation
Business
Business

Other(Note 1)

Total

Total

Adjustments(Note 2)

Amount stated in
the financial
statements(Note 3)

Net sales
Sales to outside clients

50,7508,259

59,010314

59,324-59,324

Intersegment sales ortransfer

66

125

192

493

685

(685)

-

Total

50,817

8,385

59,202807

60,010(685)

59,324

Segment profit (loss)

13,705(144)

13,561(123)

13,437263

13,700

Segment assets

30,9185,127

36,046

7,553

43,60022,44366,043

Depreciation

811

255

1,067

24

1,091

55

1,147

Amortization of
goodwill

-

163

163

-

163

-

163

1,476

144

1,621

44

1,665

45

1,711

Other items

Increase in property,
plant and equipment andintangible assets(Note)

1.
2.
3.

“Other” is a segment for operations not included in reportable segments. The segment covers an operation businessof a handball team, and investment in, holding of, and management of securities.
Adjustments to segment profit (loss) and segment assets represent the amount of intersegment transactions
eliminated and income, expenses and assets of the holding company excluding the technology segment.
Segment profit (loss) is adjusted with operating income in consolidated financial statements.

- 19 -

(Per Share Information)
Previous consolidated fiscal year
(From January 1, 2022 to December
31, 2022)

Consolidated fiscal year under review(From January 1, 2023, to December
31, 2023)

Net assets per share¥506.23¥580.10

Profit per share¥104.34¥104.12(Note)

1. Diluted profit per share is not recorded because there are no potential shares.
2. Profit per share is calculated based on the following:

Previous consolidated fiscal year
(From January 1, 2022 to December
31, 2022)

Consolidated fiscal year under review(From January 1, 2023, to December
31, 2023)

Profit per share
Profit attributable to owners of parent(millions of yen)

9,239

9,221

Amount not attributable to commonshareholders (millions of yen)

-

-

9,239

9,221

88,546,007

88,573,589

Profit attributable to owners of parent
related to common stock (millions of yen)
Average number of outstanding shares
during the period under review (share)- 20 -

(Significant subsequent events)(Merger Agreement with Revamp Corporation)
The Company’s Board of Directors, at its meeting held on January 24, 2024, resolved to enter into anagreement (the “Agreement”) with Revamp Corporation (the “Revamp”) for a merger as noted below.
The Agreement was signed between the two companies on the same day. A summary is as follows.
1. Outline of the Agreement
On January 24, 2024, the Company and Revamp entered into the abovementioned Agreement, underwhich the two companies will work together to take necessary steps that will enable the Company tobuy, with the consent of Revamp’s shareholders, all outstanding shares of Revamp (excluding thetreasury stock held by Revamp, “Target Shares”) in cash in order to make Revamp the Company’s
wholly owned subsidiary (the “Merger”). Revamp will purchase all of its stock acquisition rights
before the Company acquires the Target Shares.
Under the Agreement, the Company consents to entering into a share transfer agreement with
Revamp’s shareholders to acquire the Target Shares, according to certain conditions, including that
Revamp has purchased all of its stock acquisition rights, that Revamp’s shareholders agree to transfer
the Target Shares to the Company, and that Japanese competition authorities approve the transfer.
2. Reasons for the Merger
The Group’s mission is to develop corporate and IT strategies designed to maximize its clients’ future
value.
Revamp engages in operations focused on business support, digital transformation (DX), andinvestment services to help client companies realize medium- to long-term growth, in line with its
corporate philosophy of revitalizing companies from the core.
The Group is seeing growing expectations from its client companies coping with economic and social
challenges, such as a declining working-age population, ESG issues, and SDGs, while they try tokeep up with the accelerating pace of DX. The addition of Revamp will enable the Group to integrate
the expertise Revamp has gained through working closely with client companies to implement
management reforms with the Group’s proficiency in designing and implementing corporate
strategies and business processes using the latest technology. This merger will further enhance theproblem-solving ability of the Group as a whole and accelerate its growth.
3. Overview of Revamp
Operating results and financial position of the company for the last three years (on a consolidated basis)
Year ended
Year ended
Year ended
Fiscal year
March 31, 2021
March 31, 2022
March 31, 2023
Net assets

5,865 million yen

7,013 million yen

8,686 million yen

Total assets

7,242 million yen

9,016 million yen

10,005 million yen

Net sales

7,673 million yen

9,826 million yen

8,916 million yen

Operating income

1,466 million yen

1,981 million yen

2,228 million yen

Ordinary income

1,377 million yen

1,921 million yen

2,270 million yen

814 million yen

1,301 million yen

1,659 million yen

Profit attributable to owners of parent

4. Schedule of the Merger(1)

Board of Directors resolution date

January 24, 2024

(2)

Date of agreement

January 24, 2024

(3)

Scheduled date of stock acquisition

Late March 2024

- 21 -

5.

Other
Orders received(in millions of yen)

Category

Previous consolidated fiscal year
(From January 1, 2022
to December 31, 2022)
Orders received

Consolidated fiscal year under review(From January 1, 2023,
to December 31, 2023)

Order backlog

Orders received

Order backlog

IT Consulting & Service Business

47,957

14,10653,308

16,663Business Innovation Business

2,911

703

4,745

1,592

50,86814,80958,053

18,256

Total

Category

Third quarter of the consolidated
fiscal year under review(from July 1, 2023
to September 30, 2023)
Orders received

Order backlog

Fourth quarter of the consolidated
fiscal year under review(From October 1, 2023,
to December 31, 2023)
Orders received

Order backlog

IT Consulting & Service Business

15,225

18,33911,055

16,663Business Innovation Business

1,295

1,680

1,185

1,592

16,52020,02012,241

18,256

Total- 22 -