エス・エム・エス（2175） – Summary of Consolidated Financial Results for the Year Ended March 31, 2022 (Based on Japanese GAAP)

Translation Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail. Summary of Consolidated Financial Results for the Year Ended March 31, 2022 (Based on Japanese GAAP) April 28, 2022TEL 03-6721-2400 URL https://www.bm-sms.co.jp/ Company name: SMS CO., LTD. Stock exchange listing: Tokyo Stock code: 2175 Representative: Inquiries: CEO CFO Scheduled date of ordinary general meeting of shareholders: Scheduled date to file Securities Report: Scheduled date to commence dividend payments: Preparation of supplementary material on financial results: Holding of financial results meeting: (1) Consolidated operating results Natsuki Goto Masato Sugizaki June 24, 2022 June 24, 2022 June 27, 2022 Yes Yes (for institutional investors and analysts) (Amounts less than one million yen are rounded down)1. Consolidated financial results for the year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) Net sales Operating profit Ordinary profit Percentages indicate year-on-year changesProfit attributable to owners of parent Year ended March 31, 2022 Year ended March 31, 2021 Millions of yen 38,899 35,960 % Millions of yen 6,318 8.2 5,470 2.3 % Millions of yen 7,726 6,653 15.5 10.8 % Millions of yen 5,408 4,800 16.1 4.7 % 12.7 0.9 Earnings per share Diluted earnings per share Ordinary profit/total assets Operating profit/net sales Profit attributable to owners of parent/equity Yen 62.07 55.13 Yen 61.77 54.86 % 20.8 23.1 % 14.6 13.2 Total assets Net assets Equity ratio Net assets per share Millions of yen 56,585 49,444 Millions of yen 29,991 22,658 % 52.4 45.3 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Millions of yen 9,818 6,769 Millions of yen (2,079)(1,783)Millions of yen (3,987)(5,224)Millions of yen 14,126 10,144 % 16.2 15.2 Yen 340.10 257.14 Annual dividends per share 1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end Total Total cash dividends (Total) Dividend payout ratio (Consolidated) Ratio of dividends to net assets (Consolidated) Yen – – – Yen 0.00 0.00 0.00 Yen – – – Yen 9.50 10.50 – Yen Millions of yen 9.50 10.50 – 827 915 % 17.2 16.9 – % 4.0 3.5 Year ended March 31, 2022 Year ended March 31, 2021 (2) Consolidated financial position As of March 31, 2022 As of March 31, 2021 (3) Consolidated cash flows Year ended March 31, 2022 Year ended March 31, 2021 2. Cash dividends Year ended March 31, 2021 Year ended March 31, 2022 Year ending March 31, 2023 (Forecast) 13. Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023) Net sales Operating profit Ordinary profit Percentages indicate year-on-year changesProfit attributable to owners of parent Earnings per share Full year Millions of yen 46,063 % Millions of yen 7,238 18.4 % Millions of yen 8,499 14.6 % Millions of yen 5,984 10.0 % 10.6 Yen 68.68 (1) Changes in significant subsidiaries during the year ended March 31, 2022 (changes in specified subsidiaries resulting in the change in scope of consolidation): (2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements Changes in accounting policies due to revisions to accounting standards and other regulations: Changes in accounting policies due to other reasons: Changes in accounting estimates: Restatement of prior period financial statements: (3) Number of issued shares (common shares) Total number of issued shares at the end of the period (including treasury shares) No Yes No No No As of March 31, 2022 87,147,800 shares As of March 31, 2021 87,109,600 shares Number of treasury shares at the end of the period Average number of shares during the period As of March 31, 2022 561 shares As of March 31, 2021 491 shares Year ended March 31, 2022 87,131,740 shares Year ended March 31, 2021 87,085,303 shares 4. Notes 2Consolidated financial statements Consolidated balance sheets As of March 31, 2021 As of March 31, 2022 (Millions of yen) 10,538 4,933 16 31 6,324 598 808 156 (188) 23,218 619 (324) 295 792 (552) 239 36 (20) 16 618 (230) 387 939 8,834 2,355 8,621 1,502 0 21,313 1,975 879 1,110 7 3,972 26,225 49,444 14,640 5,842 28 25 6,757 – 665 27 (163) 27,823 746 (396) 350 864 (642) 222 28 (18) 9 688 (394) 294 876 8,907 3,013 9,581 1,421 0 22,923 2,825 975 1,160 – 4,962 28,762 56,585 Assets Current assets Cash and deposits Accounts receivable – trade Work in process Supplies Accounts receivable – other Income taxes refund receivable Prepaid expenses Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Buildings Accumulated depreciation Buildings, net Tools, furniture and fixtures Accumulated depreciation Tools, furniture and fixtures, net Machinery, equipment and vehicles Accumulated depreciation Machinery, equipment and vehicles, net Right-of-use assets Accumulated depreciation Right-of-use assets,net Total property, plant and equipment Intangible assets Goodwill Software Trademark right Customer-related assets Other Total intangible assets Investments and other assets Investment securities Deferred tax assets Leasehold and guarantee deposits Other Total investments and other assets Total non-current assets Total assets 3 As of March 31, 2021 As of March 31, 2022 (Millions of yen) 258 2,479 7,750 438 374 505 869 – 147 669 233 115 33 13,875 10,644 149 1,830 281 3 12,909 26,785 2,281 85 23,140 (0) 25,506 0 (3,107) (3,107) 259 22,658 49,444 307 1,999 8,933 577 1,674 460 – 1,004 169 704 – 131 244 8,054 173 1,973 185 0 16,207 10,387 26,594 2,310 114 27,699 (1) 30,123 567 (1,052) (484) 352 29,991 56,585 Liabilities Current liabilities Accounts payable – trade Current portion of long-term borrowings Accounts payable – other Accrued expenses Income taxes payable Accrued consumption taxes Advances received Contract liabilities Deposits received Provision for bonuses ProvisionForRepayment Lease liabilities Other Total current liabilities Non-current liabilities Long-term borrowings Retirement benefit liability Deferred tax liabilities Lease liabilities Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Share acquisition rights Total net assets Total liabilities and net assets 4Consolidated statements of income and consolidated statements of comprehensive income Consolidated statements of income (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Share of profit of entities accounted for using equity method Other Net sales Cost of sales Gross profit Operating profit Non-operating income Interest income Selling, general and administrative expenses Total non-operating income Non-operating expenses Foreign exchange losses Interest expenses Other Total non-operating expenses Ordinary profit Extraordinary income Gain on sale of non-current assets Gain on sale of investment securities Total extraordinary income Extraordinary losses Loss on sale and retirement of non-current assets Impairment losses Loss on valuation of investment securities Loss on termination of retirement benefit plan Event cancellation loss Total extraordinary losses Profit before income taxes Income taxes – current Income taxes – deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent 35,960 3,957 32,003 26,533 5,470 10 1,241 88 1,340 53 90 13 157 6,653 0 70 70 117 – 3 121 11 253 6,470 1,734 (65) 1,669 4,800 – 4,800 38,899 4,455 34,443 28,125 6,318 12 1,509 47 1,569 160 7,726 43 79 38 1 – 1 3 1 – – 15 21 7,707 2,444 (145) 2,298 5,408 – 5,408 5Consolidated statements of comprehensive income (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Profit Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests 4,800 0 (952) (5) (957) 3,843 3,843 – 5,408 (0) 2,031 590 2,622 8,031 8,031 – 6Consolidated statements of changes in equity Fiscal year ended March 31, 2021 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity (Millions of yen) Total shareholders’ equity Balance at beginning of period 2,246 19,079 Changes during period Issuance of new shares Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Changes during period Issuance of new shares Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period 34 2,281 34 – – – – 0 – – – – 0 0 0 (739) 4,800 4,060 23,140 – – – – – – – (0) – – – (0) – (0) (0) – – – – 88 88 259 21,376 68 (739) 4,800 (0) – 4,129 25,506 68 (739) 4,800 (0) (869) 3,259 22,658 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Share acquisition rights Total net assets Balance at beginning of period (2,149) (2,149) 171 19,398 (957) (957) (3,107) (957) (957) (3,107) 51 34 – – – – 34 85 – – – – 7 – – – – (0) – (0) (1) – – – – – 92 92 352 (22) 58 (827) 5,408 (0) – 4,639 30,123 (22) 58 (827) 5,408 (0) 2,715 7,354 29,991 Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Share acquisition rights Total net assets Balance at beginning of period (3,107) (3,107) 259 22,658 (3,107) (3,107) 259 22,636 Fiscal year ended March 31, 2022 Share capital Capital surplus Retained earnings Treasury shares Shareholders’ equity (Millions of yen) Total shareholders’ equity Balance at beginning of period 2,281 23,140 (0) 25,506 2,281 23,118 (0) 25,484 Cumulative effects of changes in accounting policies Restated balance Changes during period Issuance of new shares Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Cumulative effects of changes in accounting policies Restated balance Changes during period Issuance of new shares Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Net changes in items other than shareholders’ equity Total changes during period Balance at end of period – 29 – – – – 29 2,310 0 – 0 – – – – 567 567 567 (22) (827) 5,408 4,580 27,699 – – – – – – – – 2,055 2,055 (1,052) 2,622 2,622 (484) 85 – 85 29 – – – – 29 114 – – – – – 8Consolidated statements of cash flows (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 6,470 1,371 814 117 – (70) 3 81 240 79 82 (9) (198) 53 90 208 (30) (142) (148) 180 – 44 64 20 9,303 (90) (2,463) 6,769 (218) 399 (376) (1,659) 71 0 (1,783) 7,707 1,649 833 14 3 – 1 91 4 – 7 43 (262) (36) 79 (750) (49) (428) 152 – 54 1,169 213 10,498 15 (80) (616) 9,818 (171) 95 (212) (1,800) – 9 (2,079) Cash flows from operating activities Profit before income taxes Depreciation Amortization of goodwill Loss (gain) on sale and retirement of non-current assets Impairment losses Loss (gain) on sale of investment securities Loss (gain) on valuation of investment securities Share-based payment expenses Share of loss (profit) of entities accounted for using equity method Increase (decrease) in allowance for doubtful accounts Increase (decrease) in provision for bonuses IncreaseDecreaseInProvisionForRepaymentOpeCF Increase (decrease) in retirement benefit liability Foreign exchange losses (gains) Interest expenses Decrease (increase) in trade receivables Increase (decrease) in accrued consumption taxes Decrease (increase) in accounts receivable – other Decrease (increase) in prepaid expenses Increase (decrease) in advances received Increase (decrease) in contract liabilities Increase (decrease) in accounts payable – other Other, net Subtotal Interest and dividends received Interest paid Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities Payments into time deposits Proceeds from withdrawal of time deposits Purchase of property, plant and equipment Purchase of intangible assets Proceeds from sale of investment securities Other, net Net cash provided by (used in) investing activities 9 (Millions of yen) Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Cash flows from financing activities Repayments of long-term borrowings Repayments of lease liabilities Proceeds from issuance of share acquisition rights Proceeds from issuance of shares resulting from exercise of share acquisition rights Dividends paid Other, net Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (4,507) (60) 12 64 (732) (0) (5,224) (110) (348) 10,493 10,144 (3,070) (126) 7 52 (849) (0) (3,987) 229 3,981 10,144 14,126 10