Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Nine Months Ended December 31, 2019
(Based on IFRS)
Company name:

Stock exchange listing: Tokyo
Securities code:
4819
Representative:
Inquiries:

February 10, 2020

Digital Garage, Inc.
URL

https://www.garage.co.jp/

Representative Director,Kaoru Hayashi
President Executive Officer and Group CEOMember, Board of Directors, Senior
Executive Officer, in charge of the Corporate Makoto Soda

TEL

Strategy Division
Scheduled date to file Quarterly Securities Report:

February 12, 2020

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:–Yes

Holding of quarterly financial results meeting:No03-6367-1111(Amounts are rounded off to the nearest million yen)
1. Consolidated financial results for the nine months ended December 31, 2019 (from April 1, 2019 to December 31, 2019)(1) Consolidated operating results (cumulative)
Revenue

Nine months ended
December 31, 2019
Nine months ended
December 31, 2018

Percentages indicate year-on-year changes

Profit before tax

Profit attributable Comprehensive
to owners of parent
incomeMillions ofMillions%%%
yenof yen

ProfitMillions ofyen%Millions ofyen%Millions ofyen

28,6747.4

10,388

(1.8)

7,459

(3.1)

7,525

(2.0)

8,637

22.2

26,690–

10,580

–

7,695

–

7,682

–

7,067

–

Basic earnings per share

Diluted earnings per share

Yen
Nine months ended December 31, 2019
163.67
Nine months ended December 31, 2018164.72(Note. Revenue and profit before tax represent the amount of continuing operations only.)Yen
149.34157.95(2) Consolidated financial position
Total assets

As of December 31, 2019
As of March 31, 2019

Total equity

Millions of yen
169,191
146,890

Ratio of equity
attributable to owners ofparent to total assets
Millions of yen%
54,26632.1
46,60931.7

Equity attributable toowners of parent

Millions of yen
54,97147,345

2. Cash dividends
Annual dividends per share

Year ended March 31, 2019Year ending March 31, 2020

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––Yen
0.00
0.00

Yen––

Yen
28.00

Yen
28.00

––

Year ending March 31, 2020 (Forecast)(Note 1. Revision to the forecast on financial results: No)(Note 2. Fiscal year ending March 31, 2020 forecast is to be determined.)Total

3. Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2020 (April 1, 2019 to March 31, 2020)
In the field of investment and incubation in domestic and overseas unlisted companies in the Incubation Technology Segment, it is difficult toreasonably estimate the fair value of securities held by Digital Garage Group at the end of the fiscal year. Therefore, Digital Garage, Inc. does notdisclose consolidated financial forecasts.
14. Notes(1) Changes in significant subsidiaries during the nine months ended December 31, 2019(changes in specified subsidiaries resulting in the change in scope of consolidation):–(2) Changes in accounting policies and changes in accounting estimates
Changes in accounting policies required by IFRS:
Changes in accounting policies due to other reasons:––

Changes in accounting estimates:–(3) Number of issued shares (ordinary shares)
Total number of issued shares at end of period (including treasury shares)
As of December 31, 201947,395,400 shares As of March 31, 201947,341,600 shares

1,390,316 shares As of March 31, 2019

1,391,452 shares

Number of treasury shares at end of period
As of December 31, 2019

Average number of shares during period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 201945,973,228 shares Nine months ended December 31, 2018

246,635,071 shares

Condensed quarterly consolidated financial statements
Condensed quarterly consolidated statement of financial position(Millions of yen)
As of March 31, 2019

As of December 31, 2019

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables

48,15423,25447,664
20,626Inventories
Operational investment securities

232
26,695332
35,122

451
6780
275

Other financial assets
Income taxes receivable
Other current assets

394

585

Total current assets

99,186105,384

Property, plant and equipment
Goodwill

9,421
6,575

19,4697,689

Intangible assets
Investment property

2,575
3,046

3,337
2,962

Investments accounted for using equity method
Other financial assets

19,1396,662

20,869
9,324

Deferred tax assets
Other non-current assets

137
148

41
115

Total non-current assets

47,70463,807

146,890

169,191

Non-current assets

Total assets3

(Millions of yen)
As of December 31, 2019

As of March 31, 2019
Liabilities and equity
Liabilities
Current liabilities
Borrowings

2,211

6,600

Trade and other payables
Other financial liabilities

45,799853

46,601
1,817

Income taxes payable
Other current liabilities

1,076
2,482

617
2,652

Total current liabilities

52,42058,287

Bonds and borrowings
Other financial liabilities

35,9595,430

34,557
13,721Retirement benefit liability
Provisions

565
321

568
321

Deferred tax liabilities
Other non-current liabilities

4,744
106

6,581
184

Total non-current liabilities

47,12555,932

99,545

114,220

Share capital
Capital surplus

7,504
4,235

7,576
4,390

Treasury shares
Other components of equity(5,026)
1,303(5,012)
2,480

Retained earnings

38,593

44,832

Total equity attributable to owners of parent

46,60954,266

Non-current liabilities

Total liabilities
EquityNon-controlling interests
Total equity
Total liabilities and equity

4736

706

47,34554,971

146,890

169,191

Condensed quarterly consolidated statements of income
First nine months of fiscal year

(Millions of yen)
Nine months ended
December 31, 2018
Continuing operations
Revenue in recurring business

Nine months ended
December 31, 201916,397

19,431

5,806
1,742

4,759
1,540

95

45

2,650

2,900

Total

26,69028,674

Cost of sales
Selling, general and administrative expenses

7,404
8,326

8,569
9,210

219
162

238
270

Total

16,11018,286

Profit before tax

10,58010,388

Income tax expense

3,339

2,929

Profit from continuing operations

7,241

7,459

Revenue
Expenses

1,261
1,655

–
–

Profit (loss) before tax

(394)

–

Income tax expense

(225)

–

Profit (loss) after tax from discontinued operations

(169)

–

Gain (loss) on sales on discontinued operations
Income tax expense from sale of discontinued operations

898
275

––

Profit from discontinued operations

454

–

7,695

7,459

7,682
13

7,525
(66)

154.40163.67

Revenue in operational investment securities
Other income
Finance income
Share of profit of investments accounted for using equity
methodOther expenses
Finance costs

Discontinued operations

ProfitProfit (loss) attributable toOwners of parent
Non-controlling interests
Earnings per share
Basic earnings per share
Continuing operations
Discontinued operations

10.32

–

Total

164.72163.67

Continuing operations
Discontinued operations

148.109.84

149.34–

Total

157.95149.34

Diluted earnings per share

5Stand-alone 3rd quarter of fiscal year
3rd quarter ended December(Millions of yen)
3rd quarter ended December

31, 2018

31, 2019

Continuing operations
Revenue in recurring business
Revenue in operational investment securities

5,352
1,398

6,576
968

Other income
Finance income872(134)

301
28

Share of profit of investments accounted for using equity
method

978

1,205

Total

8,465

9,078

Cost of sales

2,312

2,853

Selling, general and administrative expenses
Other expenses

2,829
70

3,121
74

Finance costs

74(32)

Total

5,286

6,016

Profit before tax
Income tax expense

3,179
933

3,062843

Profit from continuing operations

2,247

2,218

Discontinued operations
Revenue

195–Expenses

759–

Profit (loss) before tax
Income tax expense

(565)
(238)

––

Profit (loss) from discontinued operations

(327)

–

Profit

1,920

2,218

Profit (loss) attributable toOwners of parent

1,957

2,253

Non-controlling interests

(37)

(35)

Continuing operations
Discontinued operations

49.53(6.94)

49.00
–

Total

42.59

49.00

Diluted earnings per share
Continuing operations

45.27

44.75

Discontinued operations(6.26)

–

Total

39.01

44.75

Earnings (loss) per share
Basic earnings per share

6Condensed quarterly consolidated statements of comprehensive incomeFirst nine months of fiscal year

(Millions of yen)
Nine months ended
December 31, 2018
ProfitOther comprehensive income

Nine months ended
December 31, 2019

7,695

7,459(788)

1,316

5(34)

155(104)(0)

1

Other comprehensive income

(628)

1,178

Comprehensive income

7,067

8,637

7,057
10

8,702
(64)

Items that will not be reclassified to profit or loss
Net change in fair value of equity instruments designatedas measured at fair value through other comprehensive
incomeShare of other comprehensive income of investments
accounted for using equity method
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Share of other comprehensive income of investments
accounted for using equity method

Comprehensive income attributable toOwners of parent
Non-controlling interests

7

Stand-alone 3rd quarter of fiscal year

Profit

3rd quarter ended December(Millions of yen)
3rd quarter ended December

31, 2018

31, 2019
1,920

2,218

(898)

(605)

(60)

(7)

(108)

3(0)

(0)

(1,067)

(609)

853

1,609890

1,643(38)(34)

Other comprehensive income
Items that will not be reclassified to profit or loss
Net change in fair value of equity instruments designatedas measured at fair value through other comprehensive
incomeShare of other comprehensive income of investments
accounted for using equity method
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Share of other comprehensive income of investments
accounted for using equity method
Other comprehensive income
Comprehensive income
Comprehensive income attributable toOwners of parent
Non-controlling interests8

Condensed quarterly consolidated statement of changes in equityNine months ended December 31, 2018 (from April 1, 2018 to December 31, 2018)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
Financial assets

Share

CapitalTreasury

capitalsurplussharesmeasured atfair value
through othercomprehensive
incomeBalance at April 1, 2018

7,465

3,748

(26)

Exchangedifferences
ontranslationof foreign
operations

504

1,071

(779)

155

(779)

155

Remeasurements

Totalof defined
benefit plans

0Profit (loss)
Other comprehensive income
Comprehensive income
Issuance of new shares–29

Changes in ownership interest in
subsidiaries

–
29

–

1,575–(624)

–(56)

(624)
–
–

Dividends
Change in scope of consolidation––

Share-based remunerationtransactions

230–

Forfeiture of share acquisitionrights5–

Purchase of treasury shares
Issue of convertible bonds

(5)
703

(5,000)Transfer from other componentsof equity to retained earnings(0)

OtherTotal
Balance at December 31, 2018

––
(0)

5–

29

912

(5,000)

(0)

––

(0)

7,494

4,660

(5,026)

(276)

1,227

0951

9

(Millions of yen)
Equity attributable to owners of parent
Retained earnings
Balance at April 1, 2018
Profit (loss)

(624)

(3)

(628)

7,682

7,057

10

7,067

59
(56)
(1,133)–transactions
Forfeiture of share acquisitionrightsPurchase of treasury sharesof equity to retained earnings
OtherTotal
Balance at December 31, 2018

0

43,199
7,695

59323

(1,133)

Change in scope of consolidation
Share-based remuneration

Issue of convertible bonds
Transfer from other components

483
13

Total

42,717
7,682

Issuance of new shares
Changes in ownership interest insubsidiaries
Dividends

interests

29,955
7,682

Other comprehensive income
Comprehensive income

Non-controlling

Total

267
(1,133)

29

29230

230

55(5,005)(5,005)

703

703

––

55(1,132)(5,191)352(4,840)36,504

44,583844

45,427

10

Nine months ended December 31, 2019 (from April 1, 2019 to December 31, 2019)(Millions of yen)
Equity attributable to owners of parent
Other components of equity

Balance at April 1, 2019

7,504

Exchangemeasured at

differenceson

Remeasurements

comprehensive

translationof foreign

benefit plansincomeoperations

TreasurysharesCapitalsurplusSharecapitalFinancial assets

4,235

fair value
through other(5,026)

Profit (loss)
Other comprehensive income
Comprehensive income
Issuance of new shares
Changes in ownership interest in

–

–

72

72

–

75

1,231

1,280(103)

1,280(103)

Totalof defined

(3)

–
1,177
–

1,177
–
–

subsidiaries
Dividends–

Change in scope of consolidation
Share-based remunerationtransactions
Purchase of treasury shares

(62)

–

146

–
(0)

–(0)
(1)

14––

72

155

14–

–

–

–

7,576

4,390(5,012)

1,355

1,127(3)2,480Disposal of treasury shares
OtherTotal
Balance at December 31, 2019

1,303

(Millions of yen)
Equity attributable to owners of parent
Retained earnings
Balance at April 1, 2019Non-controllinginterests

Total

Total

38,59346,609736

47,345

Profit (loss)
Other comprehensive income

7,525

7,525
1,177(66)
1

7,459
1,178

Comprehensive income

7,525

8,702

(64)

8,637

Issuance of new shares
Changes in ownership interest insubsidiaries
Dividends

144–(1,287)

Change in scope of consolidation
Share-based remunerationtransactions
Purchase of treasury shares
Disposal of treasury shares
OtherTotalBalance at December 31, 2019

144
34

34(1,287)(1,287)

(62)

(62)

146

146

(0)

(0)

14(1)

14(1)

(1,287)(1,045)34(1,011)

44,83254,266706

54,971

11

Condensed quarterly consolidated statements of cash flows(Millions of yen)
Nine months ended
December 31, 2019

Nine months ended
December 31, 2018
Cash flows from operating activities
Profit before tax
Depreciation and amortization

10,580
1,396

10,388
1,586

(20)
162

(18)
186

Share of loss (profit) of investments accounted for using
equity method(2,650)(2,900)Loss (gain) on sales of shares of subsidiaries and associates
Decrease (increase) in trade and other receivables(1,152)(3,282)

(642)
2,746

Decrease (increase) in investment securities for sale
Decrease (increase) in inventories(7,611)(95)(8,429)
(100)

(737)
16710
(683)

SubtotalInterest and dividends received(3,393)
1,303

2,845
1,659

Interest paid
Income taxes refund (paid)(112)(1,650)(61)(1,867)

189–(3,663)

2,576

Purchase of property, plant and equipment
Purchase of intangible assets(1,125)(863)(1,431)(1,330)Purchase of investment securities
Proceeds from sale of investment securities(2,556)941(3)–

Payments for acquisition of subsidiaries
Proceeds from sale of subsidiaries–816(1,043)–(1,339)

(500)

1,238

762

(5)

(788)

105

531

(34)

–

(2,821)(3,802)

Interest and dividend income
Interest expenses on borrowings and bonds

Increase (decrease) in trade and other payables
OtherNet cash provided by (used in) operating activities fromdiscontinued operations
Net cash provided by (used in) operating activities
Cash flows from investing activities

Purchase of investments accounted for using equity method
Proceeds from sale of investments accounted for using equity
methodPayments of leasehold deposits and guarantee deposits
Other
Net cash provided by (used in) investing activities fromdiscontinued operations
Net cash provided by (used in) investing activities

12

Nine months ended(Millions of yen)
Nine months ended

December 31, 2018

December 31, 2019

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

3,372–3,216100

Repayments of long-term borrowings
Proceeds from issuance of bonds with share acquisition rights(9,222)
25,161(432)–

Repayments of lease obligations
Capital contribution from non-controlling interests

(635)
403

(970)
34

Payments for acquisition of interests in subsidiaries from
non-controlling interests

(137)

–

28–

(5,005)(1,073)(0)(1,287)(27)

79(60)–

12,805740

Proceeds from sale of interests in subsidiaries to noncontrolling interests
Purchase of treasury shares
Dividends paid
OtherNet cash provided by (used in) financing activities fromdiscontinued operations
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

57(5)

6,379

(491)

Cash and cash equivalents at beginning of period

39,45048,154

Cash and cash equivalents

45,82947,66413