プロトコーポレーション（4298） – Financial Results for the Nine Months Ended December 2021

Financial Results for the NineMonths Ended December 2021(April 1,2021 to December 31,2021)PROTO CORPORATION (4298)January 31, 2022(Investor Meeting February 2, 2022)INDEXFY2022 Q3Oct2021 – Dec20211.Overview of Results2.Topics3.Future Growth Strategyof the Company4.APPENDIX2Overview of ResultsQ3(Apr-Dec)/FY March 2022 HighlightsBoth sales and profit increased due to steady growth in the used car and new car fields*1BusinessResults■■Net sales: 42,692 million yen YoY +2.3% *1Operating income: 5,141 million yen YoY +4.4%*1Ad-related■ Net sales: 16,926 million yen YoY +5.9% *1■ Sales of MOTOR GATE and MG Calendar were strongStrengthen promotion of Goo-netInformationand Service■ Net sales: 4,318 million yen YoY +10.9% *1■ Steady growth in new car business, progress in introduction of DataLine SalesGuide Car replacement Proposal Movie and AI assessmentSales ofgoods■ Net sales: 18,367 million yen YoY +7.5% *1■ Mainly due to steady sales of tires*1: Compared to the same period of the previous fiscal year based on the new revenue recognition standards.4Q3(Apr-Dec)/FY March 2022: Operating Results[unit: million yen]Sales ratioQ3/FY2021 *1Apr-Dec 2020Q3/FY2022 *1Apr-Dec 2021YoYAchievement rateResults(a)Results(b)(b)-(a)%Forecast(c)(b)-(c)%41,717 100.0%42,692100.0%975+2.3%44,834100.0%(2,141)(4.8%)18,52844.4%18,58961+0.3%18,86342.1%(274)(1.5%)Net SalesGross ProfitEBITDA Operating IncomeOrdinary IncomeNet IncomeSales ratio43.5％14.2％12.0％12.4％11.8％5,91414.2%4,92611.8%4,87211.7%3,2287.7%6,0685,1415,2945,049154215422+2.6%+4.4%+8.7%1,821 +56.4%[unit: million yen]Q3/FY2021 *1Apr-Dec 2020Q3/FY2022 *1Apr-Dec 2021YoYResults(a)Results(b)(b)-(a)%Forecast(c)(b)-(c)%Sales ratioSales ratioQ3/FY2022Apr-Dec 2021Sales ratio5,78712.9％4,79910.7%4,78610.7%4,75810.6%Q3/FY2022Apr-Dec 2021Sales ratio14,06331.4%5,42212.1%3,3727.5%5,26811.8%281342+4.9%+7.1%508 +10.6%290 ＋6.1％Achievement rate(616)(4.4%)(295)(5.4％)245 ＋7.3％(566)(10.8%)SG&A Expenses13,60132.6%13,44731.5%Employment Cost5,64113.5%5,12712.0%Advertising Cost3,2677.8%3,6188.5%Other Expenses4,69211.2%4,70111.0%(154)(1.1％)(514)(9.1％)350 +10.7%9+0.2％*1: Compared to the same period of the previous fiscal year based on the new revenue recognition standards.5Q3(Apr-Dec)/FY March 2022: Operating Results by SegmentNet Sales[unit: million yen]Q3/FY2021 *1Apr-Dec 2020Q3/FY2022 *1Apr-Dec 2021YoYQ3/FY2022Apr-Dec 2021Achievement rateResults(a)Results(b)(b)-(a)%Forecast(c)Sales ratio(b)-(c)%Sales ratioSales ratioAutomobile-related36,97188.6%39,61292.8%2,640+7.1%Ad-related15,98638.3%16,92639.6%Information and services3,8949.3%4,31810.1%Sales of goods17,09041.0%18,36743.0%18,62841.5%Lifestyle-relatedReal EstateOther BusinessTotalOperating Income[unit: million yen]2,9131061,7247.0%0.3%4.1%7901112,1781.9%0.3%5.1%41,717100.0%42,692100.0%Q3/FY2021 *1Apr-Dec 2020Q3/FY2022 *1Apr-Dec 2021Profit MarginProfit MarginAutomobile-related5,73015.5%6,24415.8%Lifestyle-relatedReal EstateOther Business2221021107.6%95.9%6.4%641051738.2%94.9%8.0%Management Division(1,240)-(1,446)-Total4,92611.8%5,14112.0%939424+5.9％+10.9％1,276+7.5％(2,122)(72.9％)4453975+3.9％+26.3％+2.3％YoY513(157)263(205)215+9.0％(70.9％)+2.8％+57.0%-+4.4％39,11716,3944,0947999087.2%36.6%9.1%1.8%0.2%4,82710.8%44,834100.0%Q3/FY2022Apr-Dec 2021Profit Margin5,93215.2%4975233(1,491)6.1%83.9%4.8%-4,79910.7%495531224(260)(8)20(2,648)(2,141)+1.3％+3.2％+5.5％(1.4％)(1.1％)+22.6％(54.9％)(4.8％)Achievement rate3111529(60)45342+5.3％+32.0％+38.8％(25.7％)+7.1％-6*1: Compared to the same period of the previous fiscal year based on the new revenue recognition standards.Results(a)Results(b)(b)-(a)%Forecast(c)(b)-(c)%Quarterly ResultsConsolidated sales: 16,384 million yen YoY: +3.2% *1Sales in the Used Car Business (MOTOR GATE) and New Car Business were strong.And tire sales were strong.Ad-related(Automobile)Info & Services(Automobile)Sales of goods(Automobile)Others(Life,RE,other)（million yen）Previous standard17,315 New revenue recognition standards1,579 15,325 15,873 13,518 1,583 13,937 1,592 5,518 5,660 8,903 1,253 1,322 1,346 1,662 6,497 1,371 4,757 1,244 12,737 1,580 13,105 1,589 1,575 14,070 1,657 13,661 1,310 12,646 713 7,479 4,853 5,258 5,413 4,774 1,312 1,337 1,363 1,393 1,462 1,462 16,384 1,055 8,179 5,163 5,361 5,486 5,794 5,154 5,350 5,481 5,789 5,543 5,695 5,686 20,00018,00016,00014,00012,00010,0008,0006,0004,0002,000020,00018,00016,00014,00012,00010,0008,0006,0004,0002,0000Q1Q2Q3FY21.03Q4Q1Q2Q3FY21.03 Q4Q1Q2Q3FY22.03Q4*1: Compared to the same period of the previous fiscal year based on the new revenue recognition standards.7Quarterly ResultsConsolidated operating income: 2,057 million yen YoY: (1.4%) Sales in the Used Car Business (MOTOR GATE) and New Car Business were strong.On the other hand, due to the impact of the transfer of shares in PROTO MEDICAL CAREOperating incomeOP Margin（million yen）Previous standard2,088 New revenue recognition standards2,087 2,057 1,502 1,335 11.1%9.6%12.1%1,502 11.8%1,335 10.2%1,014 6.6%13.1%1,780 13.0%1,015 7.2%12.6%1,304 10.3%25002000150010005000Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4FY21.03 FY21.03 FY22.0320.0%18.0%16.0%14.0%12.0%10.0%8.0%6.0%4.0%2.0%0.0%8Quarterly ResultsSG&A Expenses: 4,545 million yen YoY: (2.3%)*1Mainly SG&A expenses decreased YoY due to the impact of the transfer of shares in PROTO MEDICAL CARE Employment CostAdvertising CostOther Expenses（million yen）6,0005,0004,0003,0002,0001,0000Previous standardNew revenue recognition standards5,3765,297 4,642 4,771 4,459 4,376 4,570 4,654 4,452 4,448 4,545 3951, 469 2091, 0361, 9311, 2781, 9171, 4811, 7681, 0171, 2871, 3881, 3151, 169 2091, 3651, 3311, 2781, 5161, 2711, 7681, 8361, 6771, 3881, 5661, 989 7971, 9731, 1241, 7461, 6561, 6021, 2861,Q1Q2Q3Q4Q1Q4Q1Q2Q3Q4FY21.03 Q2Q3FY21.03 FY22.03*1: Compared to the same period of the previous fiscal year based on the new revenue recognition standards.9Quarterly Results[unit: million yen]Q3/FY2021 *1Oct-Dec 2020Q3/FY2022 *1Oct-Dec 2021Net SalesGross ProfitEBITDA Operating IncomeOrdinary IncomeNet IncomeResults(a)Results(b)(b)-(a)%Sales ratio15,873 100.0%16,384100.0%Sales ratio40.3％14.4％12.6％12.6％8.7％6,74242.5%2,41715.2%2,08713.1%2,04412.9%1,4369.0%6,6032,3662,0572,0641,426[unit: million yen]Q3/FY2021 *1Oct-Dec 2020Q3/FY2022 *1Oct-Dec 2021Sales ratioSales ratioSG&A Expenses4,65429.3%4,54527.7%Employment Cost1,86711.8%1,68210.3%Advertising Cost1,1727.4%1,2067.4%Other Expenses1,61510.2%1,65610.1%YoY(51)(29)19(9)YoY510+3.2%(139)(2.1%)(2.1%)(1.4%)+1.0%(0.7%)(109)(2.3％)(185)(9.9％)3441+3.0%+2.6％Sales ratioSales increased and income decreased due Q3/FY2021QoQOct-Dec 2020to the transfer of shares of PROTO MEDICAL CARE that took place on June 1, Results(c)2021.17,315Impact of PROTO MEDICAL CARE on net sales: (896) million yen, operating income: (57) million yen14.0％100.0%(1,070)(1,990)39.6%6,8592,418(468)(11.5%)(44.3%)(6.8%)(b)-(c)%2,08812.1%(1,074)(51.4%)2,04511.8%1,4378.3%(800)(39.1%)186 ＋13.0％Q3/FY2021Oct-Dec 2020QoQSales ratio4,77127.6%1,86710.8%1,1841,7196.8%9.9%605 ＋12.7%15 ＋0.8％598 ＋50.5％(8)(0.5%)Results(a)Results(b)(b)-(a)%Results(c)(b)-(c)%*1: Compared to the same period of the previous fiscal year based on the new revenue recognition standards.10Quarterly Results by SegmentNet Sales[unit: million yen]Q3/FY2021 *1Oct-Dec 2020Q3/FY2022 *1Oct-Dec 2021YoYResults(a)Results(b)(b)-(a)%Results(c)Sales ratioSales ratioAutomobile-related14,29890.1%15,32893.6%1,029+7.2%Ad-related5,48134.5%5,68634.7%Information and services1,3378.4%1,4628.9%Sales of goods7,47947.1%8,17949.9%Lifestyle-relatedReal EstateOther BusinessTotalOperating Income[unit: million yen]954365846.0%0.2%3.7%63389540.4%0.2%5.8%15,873100.0%16,384100.0%Q3/FY2021 *1Oct-Dec 2020Q3/FY2022 *1Oct-Dec 2021YoYLifestyle-relatedReal EstateOther Business6038506.4%104.4%8.7%533748.3%86.5%7.8%Management Division(402)-(463)-Total2,08713.1%2,05712.6%(891)(93.4％)204124699137051068(55)(4)23(61)(29)+3.7％+9.3％+9.4％+4.9％+63.4％+3.2％+2.9％(91.4％)(13.0％)+46.7%-(1.4％)Sales ratioBoth sales and income decreased in the Q3/FY2021QoQOct-Dec 2020Lifestyle-Related Information segment due to the transfer of shares of PROTO (b)-(c)MEDICAL CARE on June 1, 2021.15,736Impact of PROTO MEDICAL CARE on net 5,486sales: (896) million yen, operating income: (57) million yen1,3467.8%(2,073)90.9%31.7%30725%(13.2％)+5.6％+1.9％8,90351.4%(2,406)(27.0％)17,315100.0%(1,990)(11.5％)954405845.5%0.2%3.4%Q3/FY2021Oct-Dec 2020Profit Margin603850(402)2,0886.4%93.2%8.7%-12.1%46(0)36+4.9％(1.5％)+6.3％QoQ(15.6％)(0.5％)(61.1％)(9)(0)(31)2(1,074)(51.4％)-11Results(a)Results(b)(b)-(a)%Results(c)(b)-(c)%Profit MarginProfit MarginAutomobile-related2,33916.4%2,40715.7%2,34014.9%(1,035)(44.3％)*1: Compared to the same period of the previous fiscal year based on the new revenue recognition standards.TopicsTOPICS(1): 1) Status of SaaS-type business for BSteady increase in the number of affiliated dealers of MOTOR GATE(Goo-net)Goo-net(Unit: Dealers)20,606 21,148 21,451 20,992 21,000 21,381 22,296 22,240 22,290 22,555 22,722 53.754.053.255.254.653.952.554.154.854.854.530,00025,00020,00015,00010,0005,000014012010080600Number of dealers22,722YoY+1.9%Churn rate(12-month average)1.9％4020ARPA/MonthJPY54.5KYoY+3.9%MRR *1(Dec,2021)JPY1.23BnQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4FY20.03 FY21.03 FY22.03*1: Abbreviation for Monthly Recurring Revenue. This is the total amount of monthly fees for recurring clients as of the end of the applicable month.13TOPICS(1): 2) Status of SaaS-type business for BDataLine SalesGuide Car replacement Proposal Movie and AI assessments are being introduced, and monthly ARPA is increasing.10,000508,000(Unit: Dealers)6,0005,462 5,512 5,588 5,697 5,635 5,746 5,792 5,869 6,040 6,106 6,155 10.3 11.4 11.6 12.3 12.9 13.3 14.0 16.6 16.618.2 18.24,0002,0000Number of dealers6,155YoY+6.3%Churn rate(12-month average)0.6％ARPA/MonthJPY18.2KYoY+30.0%MRR *1(Dec,2021)JPY0.11Bn403020100Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4FY20.03 FY21.03 FY22.03*1: Abbreviation for Monthly Recurring Revenue. This is the total amount of monthly fees for recurring clients as of the end of the applicable month.14TOPICS(1): 3) Status of SaaS-type business for BPromote the development of DX products and increase the number of dealerswhere they are introduced. Establish an absolute position in the new car fieldMarch 2021 (Results)Dec 2021 (Results)Increase/DecreaseDLSG car replacementproposal Movie87 AI Chatbot712 DLSG car replacementproposal1,410 DataLine Finder280 DLSG car replacementproposal Movie397 AI Chatbot333 DLSG car replacementproposal1,768 DataLine Finder313 DataLine AI Assessment818 DataLine AI Assessment1,611 DataLine SalesGuide5,869 DataLine SalesGuide6,155 14,30014,30004,0008,00012,00016,00004,0008,00012,00016,000Number of Installed DealersTarget Market ScaleNumber of Installed DealersTarget Market Scale+310(379)+358+33+793+28615TOPICS(2): 1) Release of MOTOR GATE PIT INAs an approach to maintenance field data Started providing a receiving order management tool (SaaS) (February 1, 2022)New customerExisting customers❶Ad Business ❷Service Business❶Ad BusinessSending customers through advertisingSending customers through servicesSending customers through advertisingGoo-net PitGoogleMy businessAmazonCompany websiteUp to 32 menus*Tire replacementUp to 32 menus*PRODUCTFeatures of MOTOR GATE PIT IN(1) Linkage with customer-attractionfunctionsImplemented a function to attract customers fromGoo-net Pit and partner sites, etc.*Main menu itemsWheel and tire replacement, installation of car navigation systems, ETC,and Maintenance, daily inspections, coating, electrical repairs,vehicle inspections, statutory inspections, etc.(2)DX for receiving order managementStreamlining of scheduling, smartphone supportReceiving Order management tool（MOTOR GATE PIT IN）*Centralized management toolIn the future, we will strengthen the linkage with services provided by the PROTO Group (estimates, appraisals, purchases, sales, parts orders, etc.)16TOPICS(2): 2) Profit structure of maintenance shopsCost of sales60.6％Cost of goods purchased40.0％❶Product Sales BusinessMG Shopping, etc.Net sales100％SG&A expenses38.8％Labor cost 10.5％Subcontracting cost 4.5％Labor cost 19.9％Advertising expenses 0.4％❷Service BusinessSaaS-type business➌Advertising BusinessGoo-net PitOperating incomeSource: “2013 Basic Survey Report on the Status of Small and Medium Enterprises”.0.6％Number of companies: 24,629Number of employees: 183,10417TOPICS(3):Promoting Global Expansion through MG AlliancesImproving export support operations to increase the number of used vehicles exportedMG Alliance Used Car Exports219 166 141 177 166 169 181 180102(Units)3002001000Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb MarFY March 2021FY March 2022Export of used vehicles in Japan (2021): 1,287,000 units1.Promote expansion of vehicles available for sale by overseas dealersDecember 2021: approx. 120,000 units to 150,000 units (March)2. Promoting the reduction of lost contract opportunities through real-time data linkage with MOTOR GATE3. Improve the method of confirming the condition of vehicles by utilizing the appraisal information of Goo-Inspection.Amid a recovery in the used car export market in a weak yen environment, we will improve our operations and promote an increase in the number of used cars exported.Strengthen the data business based on used car export data.18Future Growth Strategy of the Company(Overview of the New Medium-Term Three-Year Plan (FY March 2023 – FY March 2025))Medium- to long-term growth image of PROTO CORPORATION (non-consolidated)Evolution into a Data Services Company Profit levelCreation and monetization of data services・Promoting the construction of a mobility-related information platform for the creation and monetization of data services・Expand into new business fields in addition to mobility-related fieldsMobility-related information platform construction・Integration of mobility-related domains・Investment in new businessesUsed carNew carMaintenanceUsed carNew carMaintenanceNew BusinessM&ACurrent Mid-termManagement plan2022Next Mid-term Management Plan2025*Mobility-related information: Includes information on all peripheral services related to automobiles and motorcycles.20Creation and monetization of data servicesTargets for the number of UU and the number of installed bases in line with enhanced service developmentGoo-net UU/end of each fiscal year (monthly)30 million UUsExpansion of Goo-net’s contents and services・Expansion of new car peripheral information・Expansion of video content・Expansion of contents and services using AIStrengthen SaaS-type business for BServicesLocation of SaaS for B(Plan: March 2025)MOTOR GATE(Used car)*Goo-netMOTOR GATE(Maintenance)*Goo-net PitDataLine SalesGuide*New car negotiation tools24,000 dealers8,000 shops8,000 dealersFY19.03FY20.03FY21.03FY25.03（Plan）2135,000,00030,000,00025,000,00020,000,00015,000,00010,000,0005,000,0000Creation and monetization of data servicesDevelopment of a data service business based on a platformMarketing the use of dataUse in marketing solutions, targeted advertising, etc.Data Services DevelopmentDevelopment of new services using our own data and the data of our business partnersPlatform（MOTOR GATE）Data AnalysisVisualizing and digging deeper into customers by analyzing data through BIAI DevelopmentNext Generation AI Development22Medium- to long-term growth of Group companiesImprove sales growth and profitability at each companyMain ActivitiesAUTOWAYTIRE WORLD KAN BEST Aiming for a 10% share of domestic tire unit salesPROTO SOLUTIONExpansion of AI and human resource support businessCAR CREDOPROTO-RIOSExpansion of appraisal and inspection business and merchandising (yard-type and on-site) businessExpansion of SaaS-type business for B in the maintenance fieldGOONET EXCHANGEExpand the number of used vehicles exported through MOTOR GATE.Promotion of M&AsExpansion of business scale of existing businesses and business development into new businesses23Medium-term growth image (net sales)PROTO CORPORATIONConsolidated subsidiariesM＆A100 billion yen10.0 ■New acquisitions through mergers and acquisitions55.7 billion yenNet SalesCAGR 15.8%35.3 27.2 45.0 55.0 ■Business growth at group companies・Expand sales share of tires and wheels・Expansion of AI and human resource support business■Business growth at PROTO CORPORATION・Business in the field of used cars, new cars, and maintenance Growth and platform construction・Strengthen SaaS-type business for B・Creation of new businessesFY March 2021New revenue recognition standards(Including elimination of internal transactions)FY March 2025(Plan)(Including elimination of internal transactions)24Medium-term growth image (operating income)PROTO CORPORATIONConsolidated subsidiariesOperating income ratio10.7%5.9 billion yenOperating IncomeCAGR 14.1%1.4 4.8 Operating income ratio10.0%10 billion yen■Consolidated subsidiaries・Improve profitability through business structure reforms■PROTO CORPORATION・Strengthen SaaS-type business for B・Development of data service business2.0 8.0 FY March 2021Elimination of internal transactions and amortization of goodwill＝(0.3billion yen)FY March 2025(Plan)25Financial StrategyFinancial PolicyThe Group promotes management that is conscious of the cost of capital, and aims to continuously generate returns that exceed the cost of capital. To achieve this goal, we will strive for business growth based on a balance between promoting investment in growth, ensuring financial soundness, and strengthening returns to our stakeholders.Sustainable enhancement of corporate valueRealization of ROE of 12% or more (excluding extraordinary gains and losses)promoting investment in growthPromote M&A and business investment with ROIC in mindensuring financial soundnessCash and deposits of approximately 3 months of monthly salesCapital adequacy ratio of 50% or morestrengthening returns to our stakeholdersStrengthen returns to customers, employees, and shareholders26Financial Strategy︓M&A and Growth InvestmentPromote M&A and growth investment for business growthConsolidated cash flow scenario for the fiscal year ending March 2023 to March 2025 (3 years)INOUTOperating Cash FlowApprox. 18 billion yenAppropriation of cash and cash equivalents carried forward(Net cash)Approx. 21.3 billion yenAs of December 31, 2021Shareholder returnApprox. 4 billion yenM&A InvestmentCVC InvestmentCapital InvestmentBusiness InvestmentPersonnel investmentApprox. 20 billion yenCash and deposits (working capital)Approx. 15.3 billion yen27ESG ActivitiesPromote environmental responsiveness and strengthen governance systems to achieve sustainable growth.EnvironmentFormulation of the Basic Sustainability Policy (December 2021)Started to address climate change-related risks and impacts on profit opportunities based on the TCFD framework.Invested in a venture company engaged in renewable energy business through PROTO Ventures 2 Investment Limited Partnership.SocialEliminate information asymmetry between buyers and sellers of used cars through the operation of the car information media “Goo-net” and the vehicle condition information disclosure service “Goo-Inspection”.Promote initiatives for diversity.Governance・At a meeting of the Board of Directors held on September 14, 2021, it was resolved to select the “prime market”.・On December 14, 2021, we filed our Corporate Governance Report.28APPENDIXCorporate GoalGaining “customer satisfaction (useful information and services),” “employee pride (company and work),” and “shareholder trust (future and achievements)” by creating a new society through change and innovationCustomer satisfactionBeneficial information and servicesPride of employeesCompany and workTrust from shareholdersFuture and resultsCHANGING COMPANY-A company that continues to change for the future-30About our assets and strengthsLeveraging organization assets to drive DX in the industryPhysical AssetsLand, buildings, furniture and fixtures, inventory, etc.Financial AssetsCash and cash equivalents, accounts receivable, liabilities, investments, equity, etc.Organization AssetsCorporate culture, brand and strategyDatabaseVehicle masterAutomobile-related information platformVehicle inspection informationCustomer AssetsUnique users 12 million UU/month (Goo-net)Unique users 3 million UU/month (Goo-net Pit)Used car dealers 22,240 (61% share of total number of dealers)New car dealers 5,869 (41% share of total number of dealers)Maintenance shops 12,532 (14% share of total shops)Employee AssetsNumber of consolidated employees: 1,416Number of engineers: 213Number of vehicle inspectors: 111(As of March 31, 2021)31Initiatives for the FuturePromote the establishment and integration of positions in the used car, new car, and maintenance fields.Goo-net PitGoo-netFY March 202132APPENDIX(Corporate Profile)Corporate ProfileCorporate Name PROTO CORPORATIONFounded Established October 1, 1977 June 1, 1979Common Stock 1,849 million yen (As of March 31, 2021) Shares Outstanding 41,925,300 shares (As of March 31, 2021)Head Offices 1-23-14 Aoi, Naka-ku, Nagoya-shi, Aichi 460-0006 Japan6-18-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-0023 JapanBranch Offices Sapporo, Sendai, Takasaki, Nagano, Hamamatsu, Nagoya, Kanazawa, Osaka, Hiroshima, Matsuyama, Fukuoka, Kumamoto(35 Sales Outlets Nationwide)Fiscal Year-endMarch 31Number of EmployeesConsolidated: 1,416 (As of March 31, 2021)Parent: 553 (As of March 31, 2021) Stock Exchange ListingSubsidiaryTokyo Stock Exchange, First Section and Nagoya Stock Exchange, First Section1. AUTOWAY Co., Ltd. (Full subsidiary since April 2013)2. TIRE WORLD KAN BEST CO., LTD. (Full subsidiary since April 2015)3. GOONET EXCHANGE (Former Kings Auto) (Full subsidiary since April 2012)established in April 2021)4. PROTO-RIOS INC. (Full subsidiary since October 2002) 5. CAR CREDO Co., Ltd. (Full subsidiary, established in February 2012) 12. Onion Inc. (Full subsidiary since in October 2021)13. UB Datatech, Inc. (established in October 2021)6. CAR BRICKS Co., Ltd. (established in May 2017)14. CAR CREDO (Thailand) Co., Ltd. (established in December 2018)7. PROTO SOLUTION Co., Ltd. (Full subsidiary, established in April 2007 ) (As of January 31, 2022)10. PROTO Ventures (Full subsidiary, established in April 2019)11. PROTO Ventures 2 Investment Limited Partnership (Full subsidiary, 8. OKINAWA CALL STAFF SERVICE Co., LTD (Full subsidiary since October 2017)9. Associe Co., Ltd (Full subsidiary since October 2019)34Major ShareholdersFinancial Data (Consolidated)Major ShareholdersShares outstanding (million, March 2021)01) Mugen CorporationDPS (¥, FY March 2022, Forecast)02) The Master Trust Bank of Japan, Ltd. (Trust Account )EPS (¥, FY March 2022, Forecast)139.7403) JPLLC CLIENT SAFEKEEPING ACCOUNTBPS (¥, FY March 2021)893.9704) PROTO CORPORATIONROE (%, FY March 2021, Net income basis)05) Custody Bank of Japan, Ltd.(Trust Account )ROA (%, FY March 2021, Ordinary income basis)06) JP MORGAN CHASE BANK 385632Equity ratio (%, March 2021)07) CLEARSTREAM BANKING S.A.Potential share dilution (million) -08) Hiroichi YokoyamaForeign ownership (%, March 2021)27.6709) Yoshihiro Yokoyama41.935.014.313.072.710) JPMBL RE NOMURA INTERNATIONAL PLC 1 COLL EQUITY(As of September 30, 2021)(Shares : Thousands) % Held13,614 32.47% 4,606 10.98% 1,895 04.52% 0,1,729 04.12%0,1,264 03.01%0,1,137 02.71%0,928 02.21%0,892 02.12%0,724 01.72%0,652 01.55%35Segment detailsAutomobile-related(Main Product)Ad-relatedMaintenanceData registration fee for Goo-net PitInformation and services New carsDataLine SalesGuide, etc.MaintenanceSale of goods Export of used cars (GOONET EXCHANGE)EC: Sale of goods (PROTO CORPORATION)Major products in each segmentUsed carsData registration fee for Goo-net, etc. (charge for using MOTOR GATE, etc.) The monthly charge for MOTOR GATE (such as Goo-net) is dominant.The sales from ad agency business, fliers, information magazines, etc. are included.Ad-relatedGoo-net GooBike Goo-net PitSales of software for maintenance and sheet-metal processing (PROTO-RIOS)Information and services The monthly charge for the cloud service “DataLine” for new car dealers and the sales of software for maintenance and sheet-metal processing are dominant. The sales from vehicle appraisal are included.Sale of goods EC: Tires and Wheels (AUTOWAY, TIRE WORLD KAN BEST)Sales are mainly from the e-commerce sales of tires and wheels and exporting used cars. Lifestyle-related Sales of ads, rental welfare goods (PROTO MEDICAL CARE *1)Sales are mainly from advertisement income related to nursing and welfare and rental sales of welfare equipment. Real Estate Income from the rental of real estate (PROTO CORPORATION)Sales are mostly from rent income of the non-operational floors of our own building.Other BusinessBPO business, Software Development (PROTO SOLUTION)Agricultural business (PROTO CORPORATION)Investment (PROTO Ventures)Sales are mostly from the BPO business.*1:Shares have already been transferred in June 2021.36APPENDIX(Financial Data)Q3/FY March 2022: Consolidated Balance Sheet[unit: million yen]As of March 31, 2021As of Dec 31, 2021increase and decreaseResults(a)RatioResults(b)Ratio(b)-(a)%Current AssetsNon-Current AssetsCurrent LiabilitiesNon-Current LiabilitiesNet AssetsTotal Assets31,62317,76412,1261,32735,93449,38864.0％36.0％24.6％2.7％72.8％100.0％36,82517,53013,1271,19340,03454,35567.7％32.3％24.2％2.2％73.7％100.0％5,201(234)1,001(134)4,0994,967116.4％98.7％108.3％89.9％111.4％110.1％[unit: million yen]Cash and cash equivalentsInterest-bearing debtNet cashAs of March 31, 2021As of Dec 31, 2021increase and decreaseResults(a)RatioResults(b)Ratio(b)-(a)%21,7053,36018,34543.9％6.8％37.1％24,9393,59221,34745.9％6.6％39.3％3,2342323,002114.9％106.9％116.4％38Q3/FY March 2022: Consolidated Statements of Cash Flows[unit: million yen]Q3/FY March 2021Q3/FY March 2022increase and decreaseResults(a)Results(b)(b)-(a)Cash Flows from Operating ActivitiesCash Flows from Investing ActivitiesCash Flows from Financing ActivitiesCash and Cash Equivalents at End of Term[unit: million yen]Investment Amount(Tangible/intangible fixed assets*)Depreciation(Tangible/intangible fixed assets)Amortization of Goodwill4,143(662)(1,101)19,6924996693182,6691,694(1,133)24,719924654272Q3/FY March 2021Q3/FY March 2022increase and decreaseResults(a)Results(b)(b)-(a)(1,474)2,356(32)5,026424(14)(46)39FY March 2022:Consolidated Earnings ForecastConsolidated Statements of Income [unit: million yen]FY March 2021(Previous standard)FY March 2021*2(New Revenue Recognition Standard)FY March 2022*1(New Revenue Recognition Standard)Results(a)Sales ratioResults(b)Sales ratioForecast(c)Sales ratio(c)-(b)%100.0%4,212Net SalesGross ProfitEBITDAOperating IncomeOrdinary IncomeNet Income60,09725,1917,2625,9416,1184,853100.0%41.9%12.1%9.9%10.2%8.1%55,78724,8417,2625,9416,1184,853100.0%44.5%13.0%10.7%11.0%8.7%60,00025,1357,4386,1006,0805,615Net Income per Share(Yen)120.86-120.86-139.7418.88+15.6%[unit: million yen]FY March 2021(Previous standard)FY March 2021*2(New Revenue Recognition Standard)FY March 2022*1(New Revenue Recognition Standard)Results(a)Sales ratioResults(b)Sales ratioForecast(c)Sales ratio(c)-(b)%SG&A ExpensesEmployment CostAdvertising CostOther Expenses19,2507,5255,0716,65332.0%12.5%8.4%11.1%18,8997,5255,0436,33033.9%13.5%9.0%11.3%19,0357,2064,8316,998135(318)(212)667+0.7％(4.2%)(4.2%)+10.5%41.9%12.4%10.2%10.1%9.4%-31.7%12.0%8.1%11.7%For the fiscal year ending March 31, 2022, the transfer of shares in PROTO MEDICAL CARE is expected to result in a decrease in revenue of approximately 3.0 billion yen, a decrease in operating income of approximately 200 million yen, and an increase in net income of approximately 1.0 billion yen.In addition, in the Other segment, we expect net sales of approximately 4.6 billion yen to increase due to M&A, etc. at PROTO SOLUTION Co., Ltd. +7.6％+1.2％+2.4%+2.7％(0.6％)+15.7％YoY294175158(38)761YoY*1 Due to the application of the “Accounting Standard for Revenue Recognition” and other standards from the fiscal year ending March 31, 2022, agency transactions and certain transactions that are deemed to grant options to acquire additional goods or services will be accounted for in accordance with the application of these standards.*2 Figures are based on the new revenue recognition standard for comparability, but they are unaudited reference figures and may be subject to change as a result of accounting audits.40FY March 2022:Consolidated Earnings Forecast by SegmentNet Sales[unit: million yen]Automobile-relatedAd-relatedInformation and servicesSales of goodsLifestyle-relatedReal EstateOther BusinessTotalOperating Income[unit: million yen]Lifestyle-relatedReal EstateOther BusinessManagement DivisionTotalFY March 2021(Previous standard)FY March 2021*2(New Revenue Recognition Standard)FY March 2022*1(New Revenue Recognition Standard)YoYResults(a)Results(b)Forecast(c)(c)-(b)%Sales ratio89.3％36.3％8.8％44.2％6.5％0.3％3.9％53,67921,8065,29226,5793,9141572,345Sales ratio88.5％39.0％9.4％40.1％7.0％0.3％4.2％49,38421,7765,25722,3493,9141422,345Sales ratio86.5％36.7％9.2％40.6％1.4％0.2％51,89322,0375,52124,3358651217,11911.9％60,097100.0％55,787100.0％60,000100.0％2,5092602631,985(3,049)(21)4,7734,212+5.1％+1.2％+5.0％+8.9％(77.9％)(14.9％)+203.6％+7.6％FY March 2021(Previous standard)FY March 2021*2(New Revenue Recognition Standard)FY March 2022*1(New Revenue Recognition Standard)YoYResults(a)Results(b)Forecast(c)(c)-(b)%Profit MarginProfit MarginProfit Margin273140130(1,639)5,9417.0％89.1％5.6％-9.9％273140130(1,639)5,94114.2％7.0％98.3％5.6％491023625.7％84.0％5.1％-(1,952)-10.7％6,10010.2％501(224)(38)232(312)158+7.1％(81.9％)(27.3％)+177.8％-+2.7％Automobile-related7,03613.1％7,0367,53814.5％In the fiscal year ending March 31, 2022, the transfer of shares in PROTO MEDICAL CARE will result in a decrease of approximately 3.0 billion yen in net sales and a decrease of approximately 200 million yen in operating income in the lifestyle-related business.In addition, in the Other segment, we expect net sales of approximately 4.6 billion yen to increase due to M&A, etc. at PROTO SOLUTION Co., Ltd. *1 Due to the application of the “Accounting Standard for Revenue Recognition” and other standards from the fiscal year ending March 31, 2022, agency transactions and certain transactions that are deemed to grant options to acquire additional goods or services will be accounted for in accordance with the application of these standards.*2 Figures are based on the new revenue recognition standard for comparability, but they are unaudited reference figures and may be subject to change as a result of accounting audits.41Consolidated Earnings (quarterly transition)[unit: million yen]FY2020March,Q1FY2020March,Q2FY2020March,Q3FY2020March,Q4FY2021March,Q1FY2021March,Q2FY2021March,Q3FY2021March,Q4FY2022March,Q1 *1FY2022March,Q2*1FY2022March,Q3*1FY2022March,Q4*114,69815,14715,13414,14713,51813,93717,31515,32513,66112,64616,384Net SalesGross ProfitEBITDA Operating IncomeOrdinary IncomeNet Income5,9511,7601,4481,4361,0356,1721,6021,2711,3412,1426,2821,9621,6221,8061,3906,0001,1307947694215,9621,8291,5021,5541,017SG&A ExpensesEmployment CostAdvertising CostOther Expenses4,5021,9179451,6384,9011,9221,2051,7734,6601,9389891,7325,2051,9421,4621,8004,4591,9029641,593*1 New Revenue Recognition Standard5,9781,6671,3351,2737744,6421,8721,1391,6306,8592,4182,0882,0451,4374,7711,8671,1841,7196,3911,3471,0141,2451,6245,3761,8831,7821,7106,2332,0961,7801,8652,2814,4521,7979891,6655,7521,6061,3041,3651,3414,4481,6471,4211,3796,6032,3662,0572,0641,4264,5451,6821,2061,656[unit: million yen]FY2020March,Q1FY2020March,Q2FY2020March,Q3FY2020March,Q4FY2021March,Q1FY2021March,Q2FY2021March,Q3FY2021March,Q4FY2022March,Q1 *1FY2022March,Q2*1FY2022March,Q3*1FY2022March,Q4*142Consolidated Earnings by Segment (quarterly transition)Net Sales[unit: million yen]FY2020March,Q1FY2020March,Q2FY2020March,Q3FY2020March,Q4FY2021March,Q1FY2021March,Q2FY2021March,Q3FY2021March,Q4FY2022March,Q1 *1FY2022March,Q2*1FY2022March,Q3*1FY2022March,Q4*1Automobile-related13,21913,67013,49512,48311,93512,34415,73613,66312,35111,93215,328Ad-relatedInformation and servicesSales of goodsLifestyle-relatedReal EstateOther BusinessTotal5,1611,2596,7981,044463885,3871,4156,8671,057433755,3661,4526,6761,022355815,1631,2535,518981375645,3611,3225,660978395755,4861,3468,903954405845,5431,3935,413667366065,6951,4624,77460366165,6861,4628,179633895414,69815,14715,13414,14713,51813,93717,31515,32513,66112,64616,384Operating Income[unit: million yen]FY2020March,Q1FY2020March,Q2FY2020March,Q3FY2020March,Q4FY2021March,Q1FY2021March,Q2FY2021March,Q3FY2021March,Q4FY2022March,Q1 *1FY2022March,Q2*1FY2022March,Q3*1FY2022March,Q4*1Automobile-related1,7931,6421,9811,1641,7861,6052,3401,3042,2101,6262,407Lifestyle-relatedReal EstateOther Business514714434217323528Management DivisionTotal(457)1,448(474)1,271(456)1,622*1 New Revenue Recognition Standard813322803137603850(420)1,502(418)1,335(402)2,0885536593353953374(581)1,780(401)1,304(463)2,057435,7941,3716,4971,00140620513719(399)1,0145,5691,4285,4851,04435583429(1)(420)794Operating Results 10-year Summary[unit: million yen]FY2012MarchFY2013MarchFY2014MarchFY2015MarchFY2016MarchFY2017MarchFY2018MarchFY2019MarchFY2020MarchFY2021MarchNet SalesOperating IncomeNet IncomeEBITDA*1Adjusted Net Income*2DepreciationAmortization of Goodwill30,58238,28754,76148,60254,29756,717 62,111 62,251 59,127 60,0975,8463,2756,5403,6802884054,2092,2905,1612,8364045464,7352,6276,4833,5558199284,2332,3816,0393,3088799264,071(390)6,1496411,0461,0322,795 1,506 4,5472,145 3,674 519 5,396 1,151 1,113 1,089 638 632 4,565 3,159 5,920 3,596 916 437 5,136 4,991 6,455 5,420 890429 5,9414,8537,2625,275898422*1 EBITDA was calculated with the equation: operating income + depreciation + amortization of goodwill*2 Adjusted Net Income was calculated with the equation: net income + amortization of goodwill44Operating Results 10-year Summary by SegmentSales[unit: million yen]FY2012MarchFY2013MarchFY2014MarchFY2015MarchFY2016MarchFY2017MarchFY2018MarchFY2019MarchFY2020MarchFY2021MarchAutomobile-relatedAd-relatedInformation and servicesSales of goodsLifestyle-relatedReal EstateOther BusinessTotal26,70420,5793,3122,8133,47016624033,68721,1633,7498,7743,83716359750,13821,4124,46444,05621,5934,54651,02521,2314,89356,10021,6185,05356,16721,2785,04152,87021,4855,55724,26217,91523,39224,89929,42929,84725,8273,5413,3934,236 4,370 4,335 4,168 167913164988187 213 195 160 1,268 1,426 1,553 1,928 49,48621,0065,0873,4661621,18230,58238,28754,76148,60254,29756,717 62,111 62,251 59,127 Operating Income[unit: million yen]FY2012MarchFY2013MarchFY2014MarchFY2015MarchFY2016MarchFY2017MarchFY2018MarchFY2019MarchFY2020MarchFY2021MarchAutomobile-related7,2725,9166,2175,6245,277 3,939 4,933 5,7586,582Lifestyle-relatedReal EstateOther Business228831318524869(149)(323)(140)33896(94)307 109 (66) 478 147 (136) 370 170 (71) 249 193 57 169 135 58 Management Division(1,589)(1,599)(1,659)(1,732)(1,554) (1,633) (1,728) (1,693) (1,809) Total5,8464,2094,7354,2334,071 2,795 3,674 4,565 5,136 53,67921,8065,29226,5793,9141572,34560,0977,036273140130(1,639)5,94145Future OutlookThe IR information in this document includes a future outlook. Such information other than the past events may be influenced by the risk and uncertainty due to the competition, market, and systems in the field of our company’s business. As a result, the outlook based on the assumption and estimation with available information may be different from actual results and performance in the future. We would appreciate your understanding. For InquiriesPROTO CORPORATIONIR staff: Takabayashi, Tel:+81-52-934-1514Mail:4298ir@proto-g.co.jp46