Interim report
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Translation January 31, 2025 Consolidated Financial Results for the First Nine Months of the Fiscal Y ear Ending March 31, 2025 <under IFRS> Company name: PRONEXUS INC. Listing: Tokyo Stock Exchange Stock code: 7893 URL https://www.pronexus.co.jp/english/ Representative: Takeshi Ueno, President and Representative Director Inquiries: Jun Takamatsu, Managing Executive Officer, General Manager, Corporate Planning and Administrative Division, General Manager, President’s Office TEL: +81-3-5777-3111 (from overseas) Scheduled date to commence dividend payments: – Preparation of supplementary material on earnings: Yes Holding of earnings performance review: None (Millions of yen with fractional amounts rounded, unless otherwise noted) 1. Consolidated performance for the first nine months of the fiscal year ending March 31, 2025 (from April 1, 2024 to December 31, 2024) (1) Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.) Revenue Operating profit Profit before tax Profit First nine months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % December 31, 2024 24,590 2.5 3,261 10.8 4,715 56.3 3,210 53.1 December 31, 2023 23,991 13.0 2,944 18.7 3,016 16.9 2,096 19.6 Profit attributable to owners of parent Total comprehensive income Basic earnings per share Diluted earnings per share First nine months ended Millions of yen % Millions of yen % Yen Yen December 31, 2024 3,206 53.3 2,946 27.3 125.67 – December 31, 2023 2,091 19.6 2,314 36.7 81.98 – Note: At the end of the fiscal year ended March 31, 2024, the provisional accounting treatment for business combinations was finalized. Accordingly, figures for the first nine months of the fiscal year ended March 31, 2024 show the amounts that have been adjusted to reflect the revision of the initial allocation of acquisition costs upon finalization of the provisional accounting treatment. (2) Consolidated financial position Total assets Total equity Equity attributable to owners of parent Ratio of equity attributable to owners of parent to total assets As of Millions of yen Millions of yen Millions of yen % December 31, 2024 40,064 27,407 27,355 68.3 March 31, 2024 38,584 25,583 25,535 66.2
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2. Cash dividends Annual dividends First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Fiscal year ended March 31, 2024 – 18.00 – 18.00 36.00 Fiscal year ending March 31, 2025 – 26.00 – Fiscal year ending March 31, 2025 (Forecast) 26.00 52.00 Notes: 1. Revisions to the forecasts of cash dividends most recently a nnounced: None 2. For the fiscal year ending March 31, 2025, the dividend for the second quarter-end and fiscal year-end (forecast) each include a special dividend of 8.00 yen (total of 16.00 yen for the fiscal year). 3. Consolidated earnings foreca sts for the fiscal year 2024 (from April 1, 2024 to March 31, 2025) (Percentages indicate year-on-year changes.) Revenue Operating profit Profit before tax Profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Fiscal year ending March 31, 2025 31,000 2.9 2,500 2.7 3,900 54.2 2,650 48.4 2,650 48.9 103.88 Notes: 1. Revisions to the consolidated earnings forecasts most recently a nnounced: None 2. On May 13, 2024, PRONEXUS INC. (hereinafter the “Company”) made a separate announcement, “(Update on Disclosed Matter) Notice Concerning Changes in Associates Accounted for by the Equity Method (Share Transfer), Recording of Gain on Sale of Shares of Subsidiaries and Associates, and Other Information.” In conjunction with this share transfer, the Company recorded gain on sale of investments accounted for using equity method of 1,411 million yen in the first quarter of the fiscal year ending March 31, 2025.
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* Notes (1) Significant changes in the scope of consolidation during the period: None (2) Changes in accounting policies and changes in accounting estimates a. Changes in accounting policies required by IFRS: Yes b. Changes in accounting policies due to other reasons: None c. Changes in accounting estimates: None (3) Number of issued shares (common shares) a. Total number of issued shares at the end of the period (including treasury shares) As of December 31, 2024 27,716,688 shares As of March 31, 2024 27,716,688 shares b. Number of treasury shares at the end of the period As of December 31, 2024 2,207,608 shares As of March 31, 2024 2,207,565 shares c. Average number of shares during the period (cumulative from the beginning of the fiscal year) For the first nine months ended December 31, 2024 25,509,086 shares For the first nine months ended December 31, 2023 25,509,142 shares * Review of the Japanese-language originals of the attached quarterly consolidated financial statements by certified public accountants or an audit corporation: None * Proper use of earnings forecasts, and other special matters (Caution regarding forward-looking statements and others) The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual business and other results may differ substantially due to various factors. Please refer to the section of “(3) Explanation of consolidated earnings forecasts and other forward-looking statements” of “1. Review of operating results and others” on page 5 of [Attached Material] for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof. (Means of access to contents of supplementary material on earnings and earnings performance review) The supplementary material on earnings will be available on the Company’s website. The Company holds presentations for analysts regarding the six-month and year-end results. Distributed presentation materials as well as video recordings of the performance reviews will be available on the Company’s website.
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- 1 - [Attached Material] Index 1. Review of operating results and others ..................................................................................................... 2 (1) Review of operating results for the first nine months ........................................................................ 2 (2) Explanation of financial position ........................................................................................................ 6 (3) Explanation of consolidated earnings forecasts and other forward-looking statements ..................... 6 2. Condensed quarterly consolidated financial statements and significant notes thereto ............................. 7 (1) Condensed quarterly-consolidated statement of financial position .................................................... 7 (2) Condensed quarterly consolidated statement of profit or loss and condensed quarterly consolidated statement of comprehensive income .................................................................................................. 9 (3) Condensed quarterly consolidated statement of changes in equity .................................................. 11 (4) Notes to condensed quarterly consolidated financial statements...................................................... 13 (Changes in accounting policies) ...................................................................................................... 13 (Segment information) ..................................................................................................................... 13 (Notes on premise of going concern) ............................................................................................... 13 (Notes to quarterly consolidated statement of cash flows) ............................................................... 13
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- 2 - 1. Review of operating results and others (1) Review of operating results for the first nine months (i) Condition of Japanese economy In the first nine months, the Japanese economy showed a gradually recovery trend in economic conditions, backed mainly by improvement in the employment and income environment. However, the future of the economy remains unclear due to surging resource prices caused by the war in Ukraine and conflicts in the Middle East, primarily in Gaza, becoming prolonged, an increase in prices, the Japanese yen depreciation in foreign exchange markets and other factors. Furthermore, in the securities markets of Japan, to which the business of the Company is closely linked, although the Nikkei Stock Average fell to the 31,000-yen level at one point in the first nine months due to concerns about the slowing of the U.S. economy and the rapid appreciation of the yen, expectations for a domestic economic recovery resulted in it trading mostly around the 38,000-yen level, compared to the 32,000-yen level in the same period of the previous fiscal year. (ii) Review of performance In the first nine months of the current fiscal year, orders for web services, English translation services and other IR-related services increased against the backdrop of the growing need for the promotion of dialogue with shareholders and investors and the requirement for companies listed on the Prime Market to simultaneously disclose timely disclosure information, etc. in Japanese and English starting in April 2025. In addition, orders increased for finance-related products for listed companies and, in the investment trust-related business, for promotion tools, mainly for sales company websites. The business of preparing the shareholder convocation notices, one of our mainstay products, saw the number of their printed pages decrease due to the system for the electronic provision of convocation notices that was implemented starting from the general meetings of shareholders held in March 2023. However, sales were almost at the same level year on year, as the shift to electronic provision has been more gradual than expected, as well as due to an increase in the number of printed copies, accompanying the increase in the number of individual shareholders, and the provision of services aimed at supporting electronic provision. In addition, starting from the first nine months of the current fiscal year, the accounting for the annual fees for the practical information provision services for our client companies was changed from recording a lump sum at the beginning of the fiscal year previously to recording monthly installments. Although there will be no impact on the performance for the full year as a result of this change, both revenue and profit for these services for the first nine months decreased by 31 million yen. The aforementioned factors contributing to increased revenue more than offset these. As a result, consolidated revenue in the first nine months was 24,590 million yen, an increase of 599 million yen, or 2.5%, year on year. In terms of profit, due in part to efforts to offset initial costs incurred to address the system for electronic provision of shareholder convocation notices and a decrease in sales promotion expenses, operating profit came to 3,261 million yen, an increase of 317 million yen, or 10.8%, year on year. In addition, as a result of recording gain on sale of investments accounted for using equity method of 1,411 million yen in conjunction with the share transfer of associates accounted for using equity method, profit before tax was 4,715 million yen, an increase of 1,698 million yen, or 56.3%, year on year, and profit attributable to owners of parent was 3,206 million yen, an increase of 1,114 million yen, or 53.3%, year on year. 1) Sales performance by business <Listed companies disclosure-related business> In conjunction with the expanding adoption of the system for the electronic provision of convocation notices that was implemented starting from the general meetings of shareholders held in March 2023, the number of printed pages for shareholder convocation notices, one of our mainstay products, decreased. However, as the shift to electronic provision has been more
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- 3 - gradual than expected, as well as due to an increase in the number of printed copies, accompanying the increase in the number of individual shareholders, and the promotion of orders for new services in response to the introduction of the new system, the negative impact has been negligible and the results exceeded our plan at the beginning of the fiscal year. In addition, orders increased for finance-related products against the backdrop of robust stock markets, and revenues increased for outsourcing services for the preparation of disclosure documents due to strong demands for operational streamlining. As a result, revenue of the listed companies disclosure-related business was 10,098 million yen, an increase of 239 million yen, or 2.4%, year on year. <Listed companies IR and events-related, etc. business> Orders increased for web services and support services for preparing tools for non-financial information, backed by growing needs and societal demands for the promotion of dialogue with shareholders and investors. Furthermore, revenues increased for English translation services in anticipation of the requirement for companies listed on the Prime Market to simultaneously disclose information in Japanese and English starting in April 2025. However, revenue from business reports for shareholders decreased as the number of companies preparing such reports has declined. In addition, starting from the first nine months of the current fiscal year, the accounting for the annual fees for the practical information provision services for our client companies was changed from recording a lump sum at the beginning of the fiscal year previously to recording monthly installments. Although there will be no impact on the performance for the full year as a result of this change, the sales for these services for the first nine months decreased by 31 million yen. As a result, revenue of the listed companies IR and events-related, etc. business was 8,563 million yen, an increase of 240 million yen, or 2.9%, year on year. <Financial instruments disclosure-related business> In the investment trust-related business, orders increased for promotion tools, mainly for sales company websites, against the backdrop of the increase in the number of individual investors following the introduction of the new NISA (Nippon Individual Savings Account) scheme. In the meantime, in the real estate securities business, despite a decline in orders for related products due to a decrease in financing compared to the same period of the previous fiscal year, factors contributing to increased revenue more than offset these. As a result, revenue of the financial instruments disclosure-related business was 5,154 million yen, an increase of 116 million yen, or 2.3%, year on year. <Database-related business> In the database-related business, although there were some decreases in unit prices during contract renewals for existing customers, we worked to increase unit prices mainly from universities, who are the main customers, and acquire orders from new customers. As a result, revenue of the database-related business was 775 million yen, an increase of 5 million yen, or 0.6%, year on year.
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- 4 - Revenue by product areas (Thousands of yen with fractional amounts discarded, unless otherwise noted) First nine months of FY2023 (from April 1, 2023 to December 31, 2023) First nine months of FY2024 (from April 1, 2024 to December 31, 2024) Change Amount Composition ratio (%) Amount Composition ratio (%) Amount (%) Listed companies disclosure- related business 9,859,228 41.1 10,098,235 41.1 239,007 2.4 Listed companies IR and events- related, etc. business 8,323,106 34.7 8,562,848 34.8 239,743 2.9 Financial instruments disclosure- related business 5,037,872 21.0 5,153,764 21.0 115,892 2.3 Database-related business 770,964 3.2 775,479 3.1 4,514 0.6 Total 23,991,170 100.0 24,590,326 100.0 599,156 2.5 Note: Amounts are based on sales prices. 2) Earnings summary In the first nine months, revenue increased by 599 million yen year on year, with revenue in all product areas exceeding the same period of the previous fiscal year. Cost of sales amounted to 15,182 million yen, an increase of 385 million yen, or 2.6%, year on year, despite a decrease in costs for paper as a result of the expanding adoption of the system for the electronic provision of shareholder convocation notices. Factors causing this cost increase included continued rises in unit purchase prices, such as the cost of materials, including paper, and increases in labor costs and outsourcing expenses caused by the expansion of orders. The cost-to-sales ratio was 61.7%, remaining at the same level year on year, as a result of efforts to offset initial costs incurred to address the aforementioned system for electronic provision, and to implement operational streamlining. As a result, gross profit was 9,408 million yen, an increase of 214 million yen, or 2.3%, year on year. Selling, general and administrative expenses amounted to 6,229 million yen, a decrease of 76 million yen, or 1.2%, year on year mainly due to a decrease in sales promotion expenses. The ratio of selling, general and administrative expenses was 25.3%, a decrease of 1.0 percentage points year on year. As a result, operating profit was 3,261 million yen, an increase of 317 million yen, or 10.8%, year on year. In addition, as a result of recording finance income of 69 million yen, finance costs of 26 million yen, and gain on sale of investments accounted for using equity method of 1,411 million yen in conjunction with the share transfer of associates accounted for using equity method, profit before tax was 4,715 million yen, an increase of 1,698 million yen, or 56.3%, year on year. As a result, profit attributable to owners of parent was 3,206 million yen, an increase of 1,114 million yen, or 53.3%, year on year. In conjunction with the finalization of the provisional accounting treatment for business combinations, the figures for the first nine months of the fiscal year ended March 31, 2024 reflect the finalization of the provisional accounting treatment. (iii) Seasonal factors of the third quarter The Company and its subsidiaries (the “Group”) owe approximately two-thirds of its revenue to Japanese listed companies. Because roughly 60% of these companies close their books in March, orders for products related to account settlements and shareholders’ meetings peak in the first quarter (from April to June). Consequently, as shown in the table below, revenue during the first quarter accounts for approximately 40% of the year total, while that during the third quarter (from October to December) is limited to around 20%.
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- 5 - (Reference) Fiscal year ended March 31, 2024 Q1 (Apr.–Jun.) Q2 (Jul.–Sep.) Q3 (Oct.–Dec.) Q4 (Jan.–Mar.) Year total Revenue (Millions of yen) 11,800 5,916 6,275 6,126 30,117 Composition ratio (%) 39.2 19.7 20.8 20.3 100.0
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- 6 - (2) Explanation of financial position As of December 31, 2024, total assets increased by 1,480 million yen from the previous fiscal year-end to 40,064 million yen. The main components included an increase of 3,589 million yen in cash and cash equivalents, a decrease of 345 million yen in right-of-use assets, a decrease of 974 million yen in investments accounted for using equity method, and a decrease of 417 million yen in other financial assets (non-current assets). As of December 31, 2024, total liabilities decreased by 344 million yen from the previous fiscal year- end to 12,657 million yen. The main components included a decrease of 526 million yen in trade and other payables, and an increase of 432 million yen in contract liabilities. Equity totaled 27,407 million yen as of December 31, 2024, an increase of 1,824 million yen from the previous fiscal year-end. The main components included an increase due to the recording of 3,206 million yen in profit attributable to owners of parent, a decrease due to the recording of a loss of 264 million yen in other comprehensive income, and a decrease due to dividends of surplus of 1,122 million yen. As a result, the ratio of equity attributable to owners of parent to total assets became 68.3%. (3) Explanation of consolidated earnings forecasts and other forward-looking statements <Outlook for the fiscal year ending March 31, 2025> No changes have been made to the full-year consolidated earnings forecasts announced on May 13, 2024.
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- 7 - 2. Condensed quarterly consolidated financial statements and significant notes thereto (1) Condensed quarterly-consolidated statement of financial position (Thousands of yen) As of March 31, 2024 As of December 31, 2024 Assets Current assets Cash and cash equivalents 9,452,342 13,041,552 Trade and other receivables 3,089,873 2,799,732 Other financial assets 1,798,796 1,830,974 Inventories 588,363 534,929 Other current assets 413,977 479,534 Total current assets 15,343,350 18,686,722 Non-current assets Property, plant and equipment 4,409,753 4,246,501 Right-of-use assets 2,657,411 2,312,768 Goodwill 3,670,999 3,672,055 Intangible assets 4,954,217 4,914,488 Investment property 186,322 186,322 Investments accounted for using equity method 973,599 – Other financial assets 5,994,443 5,577,639 Deferred tax assets 350,433 383,389 Other non-current assets 43,450 83,800 Total non-current assets 23,240,627 21,376,963 Total assets 38,583,977 40,063,685
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- 8 - (Thousands of yen) As of March 31, 2024 As of December 31, 2024 Liabilities and equity Liabilities Current liabilities Borrowings 122,085 400,000 Lease liabilities 803,445 762,348 Trade and other payables 1,830,942 1,304,928 Income taxes payable 702,688 1,006,874 Contract liabilities 756,416 1,188,696 Other current liabilities 3,266,666 3,174,053 Total current liabilities 7,482,242 7,836,899 Non-current liabilities Borrowings 311,470 – Lease liabilities 1,840,133 1,567,438 Retirement benefit liability 2,648,177 2,665,523 Provisions 219,795 220,099 Other non-current liabilities 499,484 367,063 Total non-current liabilities 5,519,059 4,820,123 Total liabilities 13,001,300 12,657,023 Equity Share capital 3,058,651 3,058,651 Capital surplus 4,688,104 4,688,104 Treasury shares (2,269,512) (2,269,562) Other components of equity 1,186,563 913,699 Retained earnings 18,871,299 20,963,906 Total equity attributable to owners of parent 25,535,105 27,354,798 Non-controlling interests 47,572 51,864 Total equity 25,582,677 27,406,662 Total liabilities and equity 38,583,977 40,063,685
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- 9 - (2) Condensed quarterly consolidated statement of profit or loss and condensed quarterly consolidated statement of comprehensive income (Condensed quarterly consolidated statement of profit or loss) (Thousands of yen) First nine months ended December 31, 2023 First nine months ended December 31, 2024 Revenue 23,991,170 24,590,326 Cost of sales (14,797,322) (15,182,035) Gross profit 9,193,847 9,408,290 Selling, general and administrative expenses (6,304,621) (6,228,524) Other income 65,546 85,000 Other expenses (11,037) (3,823) Operating profit 2,943,735 3,260,944 Finance income 51,810 69,110 Finance costs (21,482) (26,411) Share of profit of investments accounted for using equity method 42,410 – Gain (loss) on sale of investments accounted for using equity method – 1,411,154 Profit before tax 3,016,473 4,714,797 Income tax expense (920,255) (1,504,738) Profit 2,096,218 3,210,059 Profit attributable to Owners of parent 2,091,315 3,205,767 Non-controlling interests 4,903 4,292 Profit 2,096,218 3,210,059 Earnings per share Basic earnings per share (Yen) 81.98 125.67 Diluted earnings per share (Yen) – –
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- 10 - (Condensed quarterly consolidated statement of comprehensive income) (Thousands of yen) First nine months ended December 31, 2023 First nine months ended December 31, 2024 Profit 2,096,218 3,210,059 Other comprehensive income Items that will not be reclassified to profit or loss Financial assets measured at fair value through other comprehensive income 198,866 (270,230) Share of other comprehensive income of investments accounted for using equity method 3,468 – Total of items that will not be reclassified to profit or loss 202,334 (270,230) Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations 15,790 6,607 Total of items that may be reclassified to profit or loss 15,790 6,607 Other comprehensive income, net of tax 218,124 (263,623) Comprehensive income 2,314,342 2,946,436 Comprehensive income attributable to Owners of parent 2,309,439 2,942,144 Non-controlling interests 4,903 4,292 Comprehensive income 2,314,342 2,946,436
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- 11 - (3) Condensed quarterly consolidated statement of changes in equity First nine months ended December 31, 2023 (Thousands of yen) Equity attributable to owners of parent Share capital Capital surplus Treasury shares Other components of equity Exchange differences on translation of foreign operations Financial assets measured at fair value through other comprehensive income Total Balance as of April 1, 2023 3,058,651 4,688,104 (2,269,465) 41,809 1,022,397 1,064,206 Profit – Other comprehensive income 15,790 202,334 218,124 Total comprehensive income – – – 15,790 202,334 218,124 Purchase of treasury shares (46) – Dividends – Total transactions with owners – – (46) – – – Balance as of December 31, 2023 3,058,651 4,688,104 (2,269,512) 57,599 1,224,731 1,282,330 Equity attributable to owners of parent Non-controlling interests Total Retained earnings Total Balance as of April 1, 2023 17,853,844 24,395,339 40,803 24,436,142 Profit 2,091,315 2,091,315 4,903 2,096,218 Other comprehensive income 218,124 218,124 Total comprehensive income 2,091,315 2,309,439 4,903 2,314,342 Purchase of treasury shares (46) (46) Dividends (918,329) (918,329) (918,329) Total transactions with owners (918,329) (918,376) – (918,376) Balance as of December 31, 2023 19,026,830 25,786,403 45,706 25,832,109
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- 12 - First nine months ended December 31, 2024 (Thousands of yen) Equity attributable to owners of parent Share capital Capital surplus Treasury shares Other components of equity Exchange differences on translation of foreign operations Financial assets measured at fair value through other comprehensive income Total Balance as of April 1, 2024 3,058,651 4,688,104 (2,269,512) 70,274 1,116,289 1,186,563 Profit – Other comprehensive income 6,607 (270,230) (263,623) Total comprehensive income – – – 6,607 (270,230) (263,623) Purchase of treasury shares (50) – Dividends – Transfer from other components of equity to retained earnings (9,240) (9,240) Total transactions with owners – – (50) – (9,240) (9,240) Balance as of December 31, 2024 3,058,651 4,688,104 (2,269,562) 76,881 836,819 913,699 Equity attributable to owners of parent Non-controlling interests Total Retained earnings Total Balance as of April 1, 2024 18,871,299 25,535,105 47,572 25,582,677 Profit 3,205,767 3,205,767 4,292 3,210,059 Other comprehensive income (263,623) (263,623) Total comprehensive income 3,205,767 2,942,144 4,292 2,946,436 Purchase of treasury shares (50) (50) Dividends (1,122,400) (1,122,400) (1,122,400) Transfer from other components of equity to retained earnings 9,240 – – Total transactions with owners (1,113,160) (1,122,450) – (1,122,450) Balance as of December 31, 2024 20,963,906 27,354,798 51,864 27,406,662
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- 13 - (4) Notes to condensed quarterly consolidated financial statements (Changes in accounting policies) The Group has adopted the following standards from the beginning of the first quarter of the fiscal year ending March 31, 2025. The adoption of the following standards does not have a material impact on the condensed quarterly consolidated financial statements. IFRS Description of New Standards/Amendments IAS 1 Presentation of Financial Statements Amended to clarify the requirements for classifying debt and other financial liabilities as current or non-current IFRS 16 Leases Amended to clarify the accounting treatment of a sale- and-leaseback transaction after the date of the transaction (Segment information) The reportable segments of the Group are components of the Company for which discrete financial information is available and regularly reviewed by the Board of Directors to make decisions about allocation of managerial resources and to assess their performance. The Group’s business consists of the production of disclosure and IR-related products and incidental business operations. As such, the Group has a single business segment, the disclosure-related business, since there are no separable operating segments. (Notes on premise of going concern) No items to report (Notes to quarterly consolidated statement of cash flows) Quarterly consolidated statements of cash flows for the nine months ended December 31, 2024 is not prepared. Depreciation and amortization for the nine months ended December 31, 2024 are as follows. (Thousands of yen) First nine months ended December 31, 2023 First nine months ended December 31, 2024 Depreciation and amortization 1,987,856 1,970,859 Note: At the end of the fiscal year ended March 31, 2024, the provisional accounting treatment for business combinations was finalized. Accordingly, figures for the nine months ended December 31, 2023 show the amounts that have been adjusted to reflect the revision of the initial allocation of acquisition costs upon finalization of the provisional accounting treatment.