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.

August 12, 2022

Consolidated Financial Results

for the Three Months Ended June 30, 2022

(Under Japanese GAAP)

Company name:

RAKUS Co., Ltd.

Listing:

Tokyo Stock Exchange

Securities code:

3923

URL:

https://www.rakus.co.jp

Representative:

Takanori Nakamura, Representative Director and President

Inquiries:

Yoshifumi Matsushima, Director, Strategic Planning Department

Telephone:

+81-50-8880-3200

Scheduled date to file quarterly securities report:

August 12, 2022

Scheduled date to commence dividend payments:

-

Preparation of supplementary material on quarterly financial results: Yes

Holding of quarterly financial results briefing:

None

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)

(1) Consolidated operating result (cumulative)

(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Three months ended

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

June 30, 2022

6,165

33.7

286

(44.9)

293

(44.2)

182

(47.1)

June 30, 2021

4,613

33.3

519

(42.9)

526

(42.5)

346

(43.8)

Note:

Comprehensive income

For the three months ended June 30, 2022:

¥204 million

[(41.0)%]

For the three months ended June 30, 2021:

¥346 million

[(43.8)%]

Basic earnings

Diluted earnings

per share

per share

Three months ended

Yen

Yen

June 30, 2022

1.01

-

June 30, 2021

1.91

-

Note:

Diluted earnings per share are not stated because there are no dilutive shares.

(2) Consolidated financial position

Total assets

Net assets

Equity-to-asset ratio

As of

Millions of yen

Millions of yen

%

June 30, 2022

11,691

8,477

72.5

March 31, 2022

11,700

8,617

73.6

Reference: Equity

As of June 30, 2022:

¥8,477 million

As of March 31, 2022:

¥8,617 million

2. Cash dividends

Annual dividends per share

First quarter-end

Second quarter-end

Third quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

-

0.00

-

1.90

1.90

March 31, 2022

Fiscal year ending

-

March 31, 2023

Fiscal year ending

0.00

-

1.95

1.95

March 31, 2023

(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the year ending March 31, 2023 (from April 1, 2022 to September 30, 2022)

(Percentages indicate year on year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Basic earnings

owners of parent

per share

Millions of

%

Millions of

%

Millions of

%

Millions of

%

Yen

yen

yen

yen

yen

Six months ending

12,773

34.8

492

(44.6)

492

(45.3)

298

(49.3)

1.64

September 30, 2022

(cumulative)

Notes 1. Revisions to the consolidated earnings forecasts most recently announced: None

2. Only earnings forecasts for the six months ending September 30, 2022 (cumulative) have been disclosed in the consolidated earnings forecasts for the year ending March 31, 2023. For details, please refer to "1. Qualitative information on quarterly financial results (3) Explanation regarding information on consolidated financial results forecasts and other forward-looking statements" on page 3 of the attachment. The Company plans to disclose earnings forecasts for the full year when financial results for the six months ending September 30, 2022 are announced.

* Notes

  1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
  2. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
  3. Changes in accounting policies, changes in accounting estimates, and restatement
    1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
    2. Changes in accounting policies due to other reasons: None
    3. Changes in accounting estimates: None
    4. Restatement: None
  5. Number of issued shares (common shares)
    1. Total number of issued shares at the end of the period (including treasury shares)

As of June 30, 2022

181,216,000 shares

As of March 31, 2022

181,216,000 shares

(ii) Number of treasury shares at the end of the period

As of June 30, 2022

1,566 shares

As of March 31, 2022

1,494 shares

  1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Three months ended June 30, 2022

181,214,462 shares

Three months ended June 30, 2021

181,214,510 shares

  • Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
  • Proper use of earnings forecasts, and other special matters (Note concerning forward-looking statements)
    Forward-looking statements such as earnings forecasts contained in this document are based on information currently available to the Company and certain assumptions deemed to be reasonable by the Company and are not intended to be a promise by the Company to achieve them. Furthermore, actual performance, etc. may vary significantly due to a variety of factors. Please refer to "1. Qualitative information on quarterly financial results (3) Explanation regarding information on consolidated financial results forecasts and other forward-looking statements" on page 3 of the attachment for the conditions assumed in earnings forecasts and notes on use of earnings forecasts.

○Table of Attachment Contents

Index

1. Qualitative information on quarterly financial results ..............................................................................

2

(1)

Explanation of operating results.........................................................................................................

2

(2)

Explanation of financial position........................................................................................................

3

(3)

Explanation regarding information on consolidated financial results forecasts and other forward-

looking statements..............................................................................................................................

3

2. Quarterly consolidated financial statements and notes thereto .................................................................

4

(1)

Quarterly consolidated balance sheet .................................................................................................

4

(2)

Quarterly consolidated statements of income and quarterly consolidated statements of

comprehensive income .......................................................................................................................

6

(Quarterly consolidated statements of income) ..................................................................................

6

(Quarterly consolidated statements of comprehensive income) .........................................................

7

(3)

Notes to quarterly consolidated financial statements .........................................................................

8

(Notes regarding assumption of going concern).................................................................................

8

(Notes on significant changes in the amount of shareholders' equity) ...............................................

8

(Additional information) ....................................................................................................................

8

(Segment information, etc.)................................................................................................................

8

- 1 -

1. Qualitative information on quarterly financial results

  1. Explanation of operating results
    In the telecommunications service market in which the Company operates, attention is being drawn to the shift to digitalization of corporate operations associated with the review of work styles due to the impact of the novel coronavirus infections (COVID-19) and the promotion of improvement of operating efficiency due to the labor shortage.
    In such a management environment, using performance in the fiscal year ended March 31, 2021 as a baseline, the Group is working toward the new medium term management targets of net sales CAGR (compound annual growth rate) of 26% to 30% over five years until the fiscal year ending March 31, 2026, profit attributable to owners of parent of ¥10 billion or more and net assets of ¥20 billion or more in the fiscal year ending March 31, 2026. In order to achieve maximum net sales target CAGR of 30%, which is being particularly emphasized among these, the Group plans to engage in strengthening growth investment while swiftly verifying the effect of responses and measures to address the external environment by formulating measures and budgets for each six-month period for the first four years.
    In the first three months of the current fiscal year, the cloud business realized a high rate of growth in net sales due to growth investment in core services made from the previous fiscal year leading to an increase in orders received. In the IT outsourcing business, the Group significantly increased personnel to respond to customers' strong need for IT engineers, and assignments progressed smoothly.
    As a result, during the first three months of the current fiscal year, net sales were ¥6,165 million (up 33.7% year on year), operating profit was ¥286 million (down 44.9% year on year), ordinary profit was ¥293 million (down 44.2% year on year) and profit attributable to owners of parent was ¥182 million (down 47.1% year on year).
    Operating results by segment were as follows.
    1. Cloud business
      Net sales in the cloud business were ¥5,011 million (up 35.1% year on year) as a result of strong new orders for Raku Raku Seisan, Raku Raku Meisai and Raku Raku Hambai. In terms of profit, segment profit was ¥161 million (down 61.7% year on year) due to the continuation of active growth investment in line with the medium term management targets.
    2. IT outsourcing business
      In the IT outsourcing business, net sales were ¥1,154 million (up 27.8% year on year) and segment profit was ¥124 million (up 24.8% year on year) as a result of realizing significant increases in personnel and steadily increasing working engineers due to continuing active hiring against the backdrop of strong customer needs.

- 2 -

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Rakus Co. Ltd. published this content on 12 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2022 06:38:49 UTC.