Cybernet : Results of Operations for the Third Quarter of the Fiscal Year Ending December 31, 2022

(Delayed)

TSE Code : 4312

CYBERNET SYSTEMS CO., LTD.

Results of Operations for the Third Quarter of the

Fiscal Year Ending December 31, 2022

2 November, 2022

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Business Summary of Financial Results for the First Three Quarters of FY2022

Projection for FY2022

References

2	©2022 CYBERNET SYSTEMS CO., LTD. All Rights Reserved.

Understanding of the current external environment and its impact on the results of the First three quarters of FY2022

Understanding of the current environment

• Rising resource prices and energy shortages due to the situation in Russia and Ukraine.
• Shortage of parts and materials such as semiconductors due to supply chain disruptions, etc.
• Due to COVID-19,Shenzhen went into a temporary lockdown. Chinese government continues the policy of zero-COVID policy.
• Global economic slowdown against the background of the above situation.
• Promotion of DX aimed at work style reforms, etc.
• Depreciation of Yen due to widening interest rate differentials between Japan and the United States

Impact on results of the first three quarters of FY2022

• Against the background of uncertainties in the global economy, some of orders postponed in Europe, the United States, Asia, etc.
• Sales of IT security solutions for cloud environments was strong due to the establishment and permeation of new normal work style.
• Exchange rate fluctuations have limited impact on the operating income.

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Application of Accounting Standard for Revenue Recognition

• "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020; hereinafter the "Revenue Recognition Standard") has been applied since the beginning of this fiscal year.
• By applying the standard, revenue recognition of software maintenance contract of the distribution business changed. Before applying the standard, the revenue was mainly recognized at the start of the contract and now the revenue is recognized over the contract period.
• Since transitional measures of Revenue Recognition Standard have been applied and retrospective adjustments have not been made in the past years, the year-on-year in financial figures in this material are only for reference (For some non-consolidated net sales, retroactively revised figure is disclosed).

Old (image diagram)

New (image diagram)

1,000	Revenue was recognized at
			a single point of start of
			maintenance contract.
			0	0	0
	Q1	Q2	Q3	Q4

Revenue is recognized over maintenance contract period.

250250250250

Q1

Q2

Q3

Q4

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Financial Results for the First Three Quarters of FY2022

• Although strong sales of multi- physics analysis tools, net sales decreased due to the termination of the distribution agreement with Synopsys.
• Operating income decreased due to the decrease in net sales.

• Revenue Recognition Standard has been applied since the beginning of this fiscal year (reference P.4), and the year-on-year in financial figures in this material are only for reference.
• EBITDA: Operating income + Depreciation

					Million yen
	21/12 3Q	22/12 3Q	YoY	22/12 3Q	Change %
	(cumulative)	(cumulative)	(cumulative)
	Results	Results	Change %	Plan	From Plan
	[Old]	[New]		[New]
Net sales	17,547	14,406	(17.9%)	14,700	(2.0%)
Gross profit	7,337	5,898	(19.6%)	-	-
Selling, general and	4,634	4,703	+1.5%	-	-
administrative expenses
Operating income	2,703	1,195	(55.8%)	1,280	(6.6%)
(Operating profit margin)	15.4%	8.3%	-	8.7%	-
Ordinary income	2,703	1,098	(59.4%)	1,280	(14.2%)
Profit attributable to	1,913	600	(68.6%)	810	(25.8%)
owners of parent
EBITDA	2,885	1,381	(52.1%)	1,505	(8.2%)
(EBITDA margin)	16.4%	9.6%	-	10.2%	-
EPS (yen)	61.35	19.40	(68.4%)	25.97	(25.3%)

5	©2022 CYBERNET SYSTEMS CO., LTD. All Rights Reserved.