SIGMAXYZ : Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (Japanese Accounting Standards)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results

for the Fiscal Year Ended March 31, 2021

(Japanese Accounting Standards)

		April 22, 2021
Company name:	SIGMAXYZ Inc.	Stock listing: Tokyo Stock Exchange
Stock code:	6088	URL: https://www.sigmaxyz.com/
Representative:	Ryuichi Tomimura, Representative Director and President
Inquiries:	Shinya Tabata, CFO	Telephone: [phone]

Scheduled date of ordinary general meeting of shareholders:	June 24, 2021
Scheduled date of dividend payment:	June 7, 2021
Scheduled date of securities report filing:	June 25, 2021
Preparation of supplementary materials on financial results:	Yes
Schedule of financial results presentation meeting:	Yes (To be held online to prevent spread of novel coronavirus
	disease infection)
	(Amounts of less than ¥1 million are rounded down)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 to March 31, 2021)

(1) Consolidated Operating Results				(% figures indicate year-on-year changes)
	Revenue		Operating Profit	Ordinary Profit	Profit Attributable to
		Owners of Parent
Fiscal year ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
March 31, 2021	14,024		(12.4)	1,747	(21.0)	1,797	(16.9)	1,210	(14.0)
March 31, 2020	16,003		20.1	2,211	74.2	2,164	63.7	1,407	54.8

Note: Comprehensive Income

Fiscal year ended March 31, 2021: ¥1,210 million [(14.0)%]

Fiscal year ended March 31, 2020: ¥1,407 million [54.8%]

Profit per Share

Profit per Share

Ratio of Ordinary

Ratio of Operating

Return on Equity

Profit to Total

(Diluted)

Profit to Revenue

Assets

Fiscal year ended

Yen

Yen

%

%

%

March 31, 2021

63.32

63.26

23.0

18.0

12.5

March 31, 2020

72.87

72.58

29.3

26.0

13.8

Reference: Share of profit (loss) of entities accounted for using equity method

Fiscal year ended March 31, 2021: ¥5 million

Fiscal year ended March 31, 2020: -¥111 million

(2) Consolidated Financial Position

Total Assets

Net Assets

Equity Ratio

Net Assets per Share

As of

Millions of yen

Millions of yen

%

Yen

March 31, 2021

10,283

5,462

53.1

287.61

March 31, 2020

9,669

5,036

52.1

263.82

Reference: Equity

As of March 31,

2021:

¥5,462 million

As of March 31, 2020:

¥5,036 million

(3) Consolidated Cash Flows

Cash Flows from

Cash Flows from

Cash Flows from

Cash and Cash

Equivalents at End of

Operating Activities

Investing Activities

Financing Activities

Year

Fiscal year ended

Millions of yen

Millions of yen

Millions of yen

Millions of yen

March 31, 2021

1,598

285

(783)

5,275

March 31, 2020

2,335

(2)

34

4,175

1

2. Dividends

					Annual Dividend
		First Quarter-End	Second Quarter-End			Third Quarter-End		Fiscal Year-End	Total
Fiscal year ended		Yen	Yen			Yen			Yen	Yen
March 31, 2020		－	0.00			－		22.00	22.00
Fiscal year ended		－	0.00			－		22.00	22.00
March 31, 2021
Fiscal year ending
March 31, 2022		－	0.00			－		24.00	24.00
(Forecast)
		Total Dividends	Payout Ratio			Dividend on Equity
		(Annual)	(Consol.)			Ratio (Consol.)
Fiscal year ended		Millions of yen	%					%
March 31, 2020	453		30.2		8.8
Fiscal year ended	453		34.7		8.0
March 31, 2021
Fiscal year ending
March 31, 2022				30.6
(Forecast)

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2022 (from April 1, 2021 to March 31, 2022)

(% figures indicate year-on-year changes)

	Revenue		Operating Profit	Ordinary Profit	Profit Attributable to	Profit per Share
		Owners of Parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%		Yen
Fiscal year ending	16,000		14.1	2,500	43.0	2,500	39.1	1,500	24.0		78.49
March 31, 2022

Since "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29), etc. will be applied from the beginning of the fiscal year ending March 31, 2022, the above consolidated earnings forecasts represent the amounts based on the said accounting standard.

2

• Notes
• 1. Changes in significant subsidiaries during the period (changes in specified subsidiaries affecting the scope of consolidation): None
  2. Changes in accounting policies, changes in accounting estimates, and retrospective restatements
  3. 1. Changes in accounting policies associated with revisions to accounting standards: None
     2. Changes in accounting policies other than those in item 1) above: None
     3. Changes in accounting estimates: None
     4. Retrospective restatements: None
  4. Number of shares issued (common stock)
  5. 1. The number of shares issued as of the end of the period (including treasury shares)

	As of March 31, 2021	21,104,300 shares
	As of March 31, 2020	21,068,300 shares
2)	The number of treasury shares as of the end of the period
	As of March 31, 2021	2,110,564 shares
	As of March 31, 2020	1,977,334 shares
3)	Average during the period
	Fiscal year ended March 31, 2021	19,109,979 shares
	Fiscal year ended March 31, 2020	19,312,690 shares

(Reference) Overview of Non-Consolidated Financial Results

1. Non-Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 (April 1, 2020 to March 31, 2021)

(1) Non-Consolidated Operating Results					(% figures indicate year-on-year changes)
		Revenue		Operating Profit	Ordinary Profit	Profit
Fiscal year ended		Millions of yen		%	Millions of yen		%	Millions of yen		%	Millions of yen	%
March 31, 2021	13,736		(13.0)	1,668		(24.1)	1,792		(24.0)	1,247	(13.0)
March 31, 2020	15,797		20.2	2,199		81.2	2,359		81.3	1,433	61.0
		Profit per Share	Profit per Share
		(Diluted)
Fiscal year ended				Yen			Yen
March 31, 2021				65.28			65.22
March 31, 2020				74.21			73.92
(2) Non-Consolidated Financial Position
		Total Assets	Net Assets		Equity Ratio		Net Assets per Share
Fiscal year ended		Millions of yen	Millions of yen			%		Yen
March 31, 2021				10,193			5,415			53.1		285.11
March 31, 2020				9,556			4,951			51.8		259.37
Reference: Equity		As of March 31,	2021: ¥5,415 million
		As of March 31, 2020: ¥4,951 million

• These quarterly financial statements are outside the scope of quarterly review procedures by certified public accountants or audit corporations.
• Explanation regarding proper use of financial forecasts, and other special matters
  The earnings forecasts and other forward-looking statements presented in these materials reflect information currently available to the Company and assumptions that are deemed to be reasonable, but the Company does not guarantee the achievement of these targets. Actual results may differ significantly as a consequence of numerous factors. For more information on the Company's earnings forecasts and underlying assumptions, please refer to "Overview of Operating Results, etc." on page 2 of the attached documents.

3

SIGMAXYZ Inc. (6088) Financial Results for the Fiscal Year Ended March 31, 2021

Contents of the attached materials

1. Overview of Operating Results, etc.	2
(1)	Overview of Operating Results in Current Fiscal Year	2
(2)	Overview of Financial Position in Current Fiscal Year	2
2. Basic Policy Regarding Selection of Accounting Standards	3
3. Consolidated Financial Statements and Important Notes	4
(1)	Consolidated Balance Sheet	4
(2)	Consolidated Statements of Income and Comprehensive Income	6
	Consolidated Statement of Income	6
	Consolidated Statement of Comprehensive Income	7
(3)	Consolidated Statement of Changes in Equity	8
(4)	Consolidated Statement of Cash Flows	9
(5)	Notes to Quarterly Consolidated Financial Statements	11
	(Notes Regarding Assumption of a Going Concern)	11
	(Segment Information, etc.)	11
	(Per share information)	13

1

SIGMAXYZ Inc. (6088) Financial Results for the Fiscal Year Ended March 31, 2021

1. Overview of Operating Results, etc.

1. Overview of Operating Results in Current Fiscal Year i. Operating Results in Current Fiscal Year
   Recently, the Japanese economy has continued to show signs of picking up from the fallout of the novel coronavirus (COVID-19) pandemic although some parts of it still remain weak. We expect the economy to recover down the road. However, we need to closely watch how the COVID-19 pandemic will affect the economies at home and abroad, as well as how fluctuations in the financial and capital markets affect our business operations.

In such an environment, the Group has promoted businesses to support client companies in their digital transformations (DX). During the first quarter ended June 30, 2020, the COVID-19 pandemic affected the Group's operating performance. However, since the second quarter ended September 30, 2020, the volumes of orders received for consulting services have recovered to near year-ago levels. Throughout the fiscal year under review, we continued to deliver services to client companies, making the maximum use of our digital workplace environment.

The consolidated financial results and key business indicators for the fiscal year ended March 31, 2021 are as follows.

Revenue came to ¥14,024 million (down 12.4% from the previous fiscal year), against the backdrop of decreased revenues from consulting services for the aviation industry which has been severely affected by the COVID-19 pandemic, and from product sales due to a phased scale-down of the procurement of hardware and software products on behalf of clients which has contributed only marginally to profit. Meanwhile, a number of new projects to support client companies contributed to the Group's business performance. Such projects include services to assist with ERP cloud migration, to formulate digital transformation strategies, to revitalize organizations and personnel, and to develop new businesses and services.

Selling, general and administrative expenses amounted to ¥3,576 million (down 9.7% year on year) as increases in expenses associated with measures against COVID-19 were more than offset by a reduction in other expenses.

As a result of the decreased revenue, gross profit decreased by ¥848 million to ¥5,324 million (down 13.7% year on year), operating profit decreased by ¥463 million to ¥1,747 million (down 21.0% year on year), and ordinary profit decreased by ¥366 million to ¥1,797 million (down 16.9% year on year).

Extraordinary income came to ¥147 million mainly due to the sale of the Group's entire stake in Lawson Digital Innovation Inc. to Lawson, Inc. in April 2020. Lawson Digital Innovation is a joint venture established in 2016 primarily for the purpose of promoting the digitalization of the Lawson business. We sold our stake in the company as we achieved the intended purpose.

Total income taxes stood at ¥735 million (down 4.5% year on year).

Profit before income taxes came to ¥1,945 million (down 10.6% year on year), whereas profit attributable to owners of parent came to ¥1,210 million (down 14.0% year on year).

On the hiring front, the Company added 34 mid-career recruits and 51 new graduates in the current fiscal year. This brought its total workforce up to 554 people (up 30 year on year) including 481 consultants.

We achieved to maintain a high level of project satisfaction with a score of 94 points.

ii. Outlook

The outlook is based on the information available as of the date of its forecast, although the effects of the COVID-19 pandemic on our business in the future are still uncertain. In the event of changes in the situation, the outlook will be revised to reflect such changes as appropriate.

We will align our two mainstay businesses -the consulting business and the alliance business - to support client companies in their digital transformation, to invest in a range of businesses, and to establish joint ventures. Besides the above, we will reap returns from the investments we made in the past and will further drive our business growth.

To this aim, we will expand our consulting capacity (in terms of both skills and workforce). On the hiring front, 50 new graduates joined the Group on April 1, 2021. We will also continue with the policy to add talented mid-career recruits.

Through these efforts, during the fiscal year ending March 31, 2022, the Company expects to record revenue of ¥16,000 million (up 14.1% year on year), operating profit of ¥2,500 million (up 43.0% year on year), ordinary profit of ¥2,500 million (up 39.1% year on year), and profit attributable to owners of parent of ¥1,500 million (up 24.0% year on year).

1. Overview of Financial Position in Current Fiscal Year i. Status of Assets, Liabilities, and Net assets
   (Assets)
   Current assets as of March 31, 2021 stood at ¥8,015 million (up ¥1,072 million from the previous fiscal year), mainly reflecting ¥5,275 million in cash and deposits and ¥1,787 million in accounts receivable-trade.Non-current assets came to ¥2,267 million (down ¥458 million from the previous fiscal year), mainly comprising ¥986 million in investment securities and ¥327 million in software.

2