Avant : Consolidated Summary Report under Japanese GAAP for the third quarter of the fiscal year ending June 30, 2023

This is an unofficial translation. In case of any difference in meaning between the original Japanese text and the English translation, Japanese text shall prevail.

Consolidated Summary Report under Japanese GAAP for the third quarter of the fiscal year ending June 30, 2023

			April 28, 2023
Company Name:	AVANT GROUP CORPORATION	Stock exchange listings: Tokyo
	(Formerly AVANT CORPORATION)
Code Number:	3836		URL: https://www.avantcorp.com/
Representative:	(Title) President, Group CEO	(Name) Tetsuji Morikawa
For inquiry:	(Title) Director, Group CFO	(Name) Naoyoshi Kasuga	TEL: [phone]

Securities report issue date: May 12, 2023			Dividend payment date:	-
Supplementary information for financial statements: Available
Explanatory meeting to be held: No
						(Millions of yen, rounded down to the nearest unit)
1. Consolidated Financial Results for the Nine Months Ended March 31, 2023
(1) Consolidated results of operations						(Percentages indicate year-on-year changes)
	Net sales		EBITDA		Operating profit	Ordinary profit	Profit attributable to
			owners of the parent
Nine months ended		%		%		%		%		%
March 31, 2023	16,187	17.4	3,244	13.0	2,920	11.4	2,910	13.5	1,871	19.0
March 31, 2022	13,786	-	2,871	-	2,622	-	2,565	-	1,572	-

Comprehensive income (loss)	for the nine months ended March 31, 2023	1,921 million yen (19.4%) for the nine months ended March 31, 2022	1,609 million yen (-)
	Net profit per	Diluted net
	share	profit per share
Nine months ended	yen		yen
March 31, 2023	49.72		-
March 31, 2022	41.80		-

(Notes) EBITDA is derived by adding depreciation and amortization of goodwill to operating profit.

The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year ended June 30, 2022, and the figures for the nine months ended March 31, 2022 are after the application of the said accounting standard, etc., so the percentage change from the same quarter of the previous year is not stated.

(2) Consolidated financial condition

	Total Assets	Net Assets	Equity Ratios
As of	Unit: million yen	Unit: million yen		%
March 31, 2023	16,699	12,064		72.2
June 30, 2022	16,617	10,597		63.8
(Reference) Equity	As of March 31, 2023	12,064 million yen	As of June 30, 2022	10,597 million yen

2. Dividends on common stock

			Dividends per share
		1st	2nd	3rd	Fiscal	Annual
		quarter-end	quarter-end	quarter-endyear-end
		yen	yen	yen	yen	yen
Fiscal year ended June 30, 2022	-	0.00	-	13.00	13.00
Fiscal year ending June 30, 2023	-	0.00	-
Fiscal year ending June 30, 2023 (Forecast)				15.00	15.00
Revisions to the most recently announced dividend forecast: None
(Note)	Breakdown of year-end dividend for the fiscal year ended June 30, 2022: ordinary dividend of 12.00 yen and commemorative dividend of 1.00 yen (25th
	anniversary of the Company's founding)

3. Consolidated earnings forecasts for the fiscal year ending June 30, 2023

(Percentages indicate year-on-year changes)

		Net sales		Operating profit	Ordinary profit		Profit attributable to	Net profit
				owners of the parent	per share
Fiscal Year ending	Unit: million yen	%	Unit: million yen	%	Unit: million yen	%	Unit: million yen	%	yen
June 30, 2023	21,800	16.6	3,100	-4.5	3,100	3.7	2,030	-0.7	53.93
(Note)	Revisions to the most recently announced earnings forecast: None

Notes

1. Changes in significant subsidiaries during the period (changes in "Specified Subsidiaries" (Tokutei Kogaisha) accompanying changes in scope of consolidation): No

Newly added to the scope of consolidation: nil Newly deleted from the scope of consolidation: nil

1. Application of accounting procedures specific to the preparation of quarterly consolidated financial statements: none
2. Changes in accounting policies, accounting estimates and restatement:

1. Changes in accounting policies due to revision of accounting standards: Yes
2. Changes in accounting policies due to reasons other than item (i) above: No
3. Changes in accounting estimates: No
4. Restatement: No

Note: For details, please refer to "2. Quarterly Consolidated Financial Statements and Major Notes (4) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 15 of the attached document.

(4) Number of issued shares (common shares)

1. Total number of issued shares including treasury shares
2. Number of treasury shares held
3. Average number of shares

As of March 31, 2023	37,645,851 shares	As of June 30, 2022	37,625,501 shares
As of March 31, 2023	2,998 shares	As of June 30, 2022	2,998	shares
Nine months ended March 31, 2023	37,634,014 shares	Nine months ended March 31, 2021	37,611,645	shares

• This report is exempt from the audits of CPAs or Audit firms.
• Explanation of the appropriate use of earnings forecasts and other special notes

Forward-looking statements in this report, including earnings forecasts, are based on information currently available to the Company and on certain assumptions deemed to be reasonable. These statements are not promised by the Company regarding future performance. Actual results may differ materially from the forecast depending on a range of factors. Please refer to "Earnings Forecasts" on page 8 for the assumptions for earnings forecasts and notes for using earnings forecasts.

Accompanying Materials - Table of Contents
1. Qualitative Information on Financial Results for the Current Quarter	2
(1) Management's Discussion on Business Operations	2
(2) Discussion on Financial Position	6
(3) Earnings Forecasts	8
2. Quarterly Consolidated Financial Statements and Notes	9
(1) Quarterly Consolidated Balance Sheets	9
(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income	11
Quarterly Consolidated Statements of Income	11
Quarterly Consolidated Statements of Comprehensive Income	12
(3) Quarterly Consolidated Statements of Cash Flows	13
(4) Notes to Quarterly Consolidated Financial Statements	15
(Notes on the Going Concern Assumption)	15
(Notes on Substantial Changes in the Amount of Shareholders' Equity)	15
(Changes in Accounting Policies)	15
(Additional Information)	15
(Segment Information)	16
(Revenue Recognition)	17

1. Qualitative Information on Financial Results for the Current Quarter

(1) Management's Discussion on Business Operations

Consolidated financial results for the nine months ended March 31, 2023 are as follows.

Net sales

Operating profit

Ordinary profit

Profit attributable to owners of the parent

(Millions of yen, rounded down to the nearest unit)

Nine months ended	Nine months ended	Year-on-Year Change
March 31, 2022	March 31, 2023	Amount	%
13,786	16,187	2,400	17.4
2,622	2,920	297	11.4
2,565	2,910	345	13.5
1,572	1,871	299	19.0

Consolidated net sales were 16,187 million yen (up 17.4% year-on-year) as a result of steady growth in all three businesses: Group Governance, Digital Transformation, and Outsourcing, as we proactively responded to growing investment needs among Japanese companies, our customers, to maintain and strengthen competitiveness by "upgrading corporate management and activities using data and digital technology," which is becoming a mid- to long-term trend.

The ratio of recurring sales (sales that occur on an ongoing basis, such as software maintenance fees), which is one of the management indicators in the medium-term management plan, was 34.4%, up 0.3 percentage points from the same period of the previous year, as the Outsourcing Business, where the recurring sales ratio is constantly maintained at around 90%, showed a high growth rate, resulting in an increase in the sales composition ratio for the entire Group. Also, total recurring sales continued to grow steadily, increasing 18.6% year-on-year.

As for profits, in addition to increases in fixed personnel expenses due to improved compensation and an increase in headcount following reinforced recruitment efforts to strengthen competitiveness for the purpose of securing human resources, and an increase in outsourced processing expenses in response to increased demand from customers, due to the group reorganization, there were also rebranding expenses reorganization, and costs due to product rationalization and improvement of development environment at the operating companies. However, these factors were offset by the effect of increased sales in each business segment, resulting in operating profit of 2,920 million yen (up 11.4% year-on-year), ordinary profit of 2,910 million yen (up 13.5% year-on-year), and profit attributable to owners of the parent of 1,871 million yen (up 19.0% year-on-year).

The status of each reportable segment is as follows.

(i) Net sales

(Millions of yen, rounded down to the nearest unit)

			Nine months ended	Nine months ended	Year-on-Year Change
			March 31, 2022	March 31, 2023	Amount	%
Group Governance Businesses	6,806	7,824	1,018	15.0
Digital Transformation Business	5,273	6,174	900	17.1
Outsourcing Business		2,252	2,773	520	23.1
Elimination	of	inter-segment	(545)	(584)	(38)	-
transactions
Consolidated Net sales	13,786	16,187	2,400	17.4

(ii) Operating profit

Group Governance Businesses Digital Transformation Business Outsourcing Business

Corporate Expenses and Elimination of inter-segment transactions Consolidated operating profit

(Millions of yen, rounded down to the nearest unit)

Nine months ended	Nine months ended	Year-on-Year Change
March 31, 2022	March 31, 2023	Amount	%
1,554	1,517	(37)	(2.4)
981	1,241	259	26.5
578	629	50	8.8
(491)	(466)	24	-
2,622	2,920	297	11.4

In the Group Governance Business, net sales increased to 7,824 million yen, up 15.0% from the same period of the previous year. In addition to the core business of consolidated accounting and disclosure solutions, growth in solutions that contribute to group management information control drove growth, with the increase in sales of consulting services being the main reason for the rise in sales during the quarter. Meanwhile, aside from an increase in outsourced processing expenses to meet rising demand, expenses increased for product rationalization and development environment improvement that were conducted simultaneously with the reorganization, resulting in a year-on-year decline of margins and a decrease in the amount of profit. As a result, operating profit was 1,517 million yen (up 2.4% year-on-year).

In the Digital Transformation Business, the need among customers to utilize data for decision making related to management and business promotion continues to accelerate and has shifted to a focus on the provision of cloud data platforms and ever-larger projects. On the other hand, the business intelligence-related development, the traditional core of the business also grew was also strong, resulting in an increase in net sales to 6,174 million yen (up 17.1% year-on-year). Although personnel expenses increased due to higher compensation levels intended to strengthen competitiveness in order to secure staff, this was offset by the effect of higher sales, and operating profit was 1,241 million yen (up 26.5% year-on-year), significantly higher than the same period a year earlier.

In the Outsourcing Business, while continuing to maintain high net sales growth rates, recurring sales continued to build steadily, resulting in net sales increasing to 2,773 million yen (up 23.1% year-on-year). In terms of profitability, factors that increased costs, such as the promotion of personnel hiring and increased office space to achieve sustainable growth in the future, led to margins declining from the year earlier period, but due to sales growth operating profit increased to 629 million yen (up 8.8% year-on-year).