UT : Summary of Consolidated Financial Statements FY3/2023 First Quarter
UT : Summary of Consolidated Financial Statements FY3/2023 First Quarter In the "Transportation Equipment" subsegment, major automobile manufacturers' production adjustments have caused a decrease in the number of operating days and overtime hours of some technical employees dispatched by UT Group, but demand for UT Group employees has not declined, given the anticipation of production normalization. These initiatives resulted in an increase in segment sales. In the first quarter of FY3/2023, segment sales increased y-o-y, driven by a surge in the number of technical employees which was resulted from efforts in hiring based on the strength of diverse job opportunities in response to strong demand for personnel in each area. As a result, in the first quarter of FY3/2023, the segment recorded net sales of 12,253 million yen (up 18.0% from 10,387 million yen in the same period of the previous year) and segment profit of 496 million yen (loss of 186 million yen), while UT Group Co., Ltd. (Code 2146): Summary of the First Quarter of FY3/2023 the number of technical employees was 12,546 (up 2,024 from 10,522 a year ago).
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(Note) This English translation of the summary of the financial statement was prepared for reference only. In the event of any discrepancy between this translation and the Japanese original, the original shall prevail. For the First Quarter of Fiscal Year Ending March 31, 2023 Supplemental material for the financial results provided: Yes (Uploaded on the Company's website on August 10, 2022) Results briefing for the period under review provided: No (The briefing video will be uploaded on the Company's website on August 10, 2022) 1. Consolidated Results for the First Quarter of FY3/2023 (April 1, 2022 - June 30, 2022) (Notes) Revision of the dividend forecast disclosed recently: None The dividend forecast for FY3/2023 is undecided.
(Note) This English translation of the summary of the financial statement was prepared for reference only. In the event of any discrepancy between this translation and the Japanese original, the original shall prevail. (Note) Revision of the earnings forecasts disclosed recently: None
• Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation) : None
• Use of particular accounting procedures in preparation of quarterly consolidated financial statements: Yes
• Changes in accounting policies and accounting-based estimates, and restatements (a) Changes in accounting policies due to revisions in accounting standards and others: (b) Changes in accounting policies other than (a) above: (c) Changes in accounting-based estimates: (a) Number of shares outstanding at the end of the period (including treasury shares): (b) Number of treasury shares at the end of the period: (c) Average number of shares outstanding during the period:
• The Summary of Quarterly Consolidated Financial Statements is not subject to be reviewed by certified public accountants and auditing firms.
• Cautionary statement with respect to forecasts of future performance and other special items Forecasts regarding future performance and other forward-looking statements in these materials are based on certain assumptions judged to be valid and information currently available to the Company. These statements are not promises by the Company regarding future performance. Actual performance may differ significantly from these forecasts for a number of reasons. For precautions on usage of forecasts of future performance, please refer to the section "1. Qualitative Information on Financial Results for Current First Quarter, (3) Description of Consolidated Earnings Forecast and Other Forward-looking Information" on page 5 of the attachments. The supplemental material for the financial results provided and the results briefing video are scheduled to be uploaded on the Company's website on August 10.
UT Group Co., Ltd. (Code 2146): Summary of the First Quarter of FY3/2023 1. Qualitative Information on Financial Results for Current First Quarter In the first quarter of FY3/2023 (April 1, 2022 - June 30, 2022), although Japan's economy was expected to recover as economic and social activities were normalized, the economic outlook remained uncertain due to a surge in raw material prices prompted by Russia's invasion of Ukraine, the depreciation of the yen caused by the reversal of monetary easing policies in various countries, and the problem of supply constraints driven by global supply chain disruptions. The environment surrounding UT Group has seen a sharp increase in demand for semiconductors, reflecting the digitization of society partly prompted by the COVID-19 pandemic and the acceleration of efforts aimed at decarbonization worldwide. As a result, semiconductor manufacturing equipment (SME) makers and semiconductor makers have been rapidly increasing their production capacity, and personnel demand has been robust. Meanwhile, since the summer of 2021, major automobile manufacturers have intermittently suspended operation mainly due to shortages of semiconductors and other parts. However, personnel demand remained steady, reflecting the anticipated recovery in production activities. In June 2022, the jobs-to-applicants ratio in the production process rose to 1.86 times vs. the ratio of 1.09 times for all job categories, indicating the continued tight supply and demand balance for personnel in manufacturing industries. Under these circumstances, UT Group advanced its Fourth Medium-term Business Plan (FY3/2021 - FY3/2025). With a medium-term target of "creating a diversity & inclusion workstyle platform," the following three growth strategies have been promoted: One-stop Strategy to provide personnel to large manufacturers; Area Platform Strategy; and Solution Strategy. In the core business of worker dispatch to large manufacturers, the Company aims to enhance development of SME engineers so as to raise its share in all processes at client factories. The Company also seeks to establish a stable employment environment in local workplaces via alliances with and M&As of local major companies, and to further expand and strengthen its business base by supporting personnel mobilization of large corporate groups. The current FY3/2023 is the third year of the Medium-term Business Plan. The Company is seeking to raise its top line based on the increased number of technical employees accumulated through the enhanced hiring activities in the previous year. The Company will also strive to establish a leaner business base and improve profitability in order to realize accelerated growth over the medium to long term. Effective April 1, 2022, UT Group carried out a major reorganization within the Group. Operating companies with common business characteristics were integrated to enhance the ability to execute each growth strategy of the Medium- term Business Plan. In addition, since April 2022, we have been gradually introducing a new business system to standardize and communize administration and other tasks among the operating companies with the aim of improving labor productivity and further optimizing staffing. Moreover, efforts to improve hiring efficiency have been made by integrating job opportunities held by each operating company and promoting optimal hiring operations. As a result, in the first quarter of FY3/2023, UT Group recorded net sales of 41,567 million yen (up 18.0% from 35,215 million yen in the first quarter of FY3/2022), EBITDA of 3,614 million yen (up 129.8% from 1,572 million yen), operating profit of 3,341 million yen (up 165.7% from 1,257 million yen), ordinary profit of 3,249 million yen (up 156.7% from 1,265 million yen), and profit attributable to owners of the parent of 2,105 million yen (up 1,000.5% from 191 million yen). The number of technical employees was 46,135 (up 6,387 from 39,748 a year ago).
UT Group Co., Ltd. (Code 2146): Summary of the First Quarter of FY3/2023 The operating results of each business segment are summarized below. From the current first quarter of FY3/2023, the segment classification has been changed from the previous three segments (Manufacturing, Solution, and Engineering) to five segments (Manufacturing, Area, Solution, Engineering, and Overseas). The year-over-year comparison has therefore been made using the reclassified segment basis for the first quarter of FY3/2022. Please see details in (Segment Information) of "(3) Notes to the Quarterly Consolidated Financial Statements" in "2. Quarterly Consolidated Financial Statements and Significant Notes." The new Manufacturing Business is made up of UT Aim, which acquired UT Pabec on April 1, 2022. It is divided into the "Industrial and Commercial Machinery," "Electronics," "Transportation Equipment," and "Other" subsegments. The Manufacturing Business focuses on personnel services for large manufacturing industries, which UT Group has traditionally identified as a core business, and is strongly promoting the "One-stop Strategy to provide personnel to large manufacturers" in the Medium-term Business Plan. Personnel services that meet regional demand, mainly in the "Other" subsegment of the Manufacturing Business prior to the segment change, have been transferred to the newly established "Area Business" segment. Personnel services in Vietnam have been transferred to the newly established "Overseas Business" segment. In addition, some of the design and development engineers and all of the semiconductor manufacturing equipment engineers in the "Design and manufacturing engineers" subsegment in the Engineering Business prior to the segment change have been transferred to this business segment. In the first quarter of FY3/2023, personnel demand remained as firm as in FY3/2022 for the "Industrial and Commercial Machinery," "Electronics," and "Transportation Equipment" subsegments. In the "Transportation Equipment" subsegment, major automobile manufacturers' production adjustments have caused a decrease in the number of operating days and overtime hours of some technical employees dispatched by UT Group, but demand for UT Group employees has not declined, given the anticipation of production normalization. Similarly, in the "Industrial Machinery and Commercial " and "Electronics" subsegments, demand for dispatched workers, particularly those of UT Group, was robust as demand for semiconductors increased. In response to these circumstances, UT Group focused on the efficiency of its hiring activities, achieved a y-o-y increase in the number of technical employees, and promoted high- level personnel management and the dispatch of internally-developed,highly-skilled personnel. These initiatives resulted in an increase in segment sales. Segment profit also increased due to efforts to reduce SG&A expenses, such as raising the efficiency of hiring-related expenses. As a result, in the first quarter of FY3/2023, the segment recorded net sales of 20,512 million yen (up 17.7% from 17,420 million yen in the same period of the previous year) and segment profit of 2,536 million yen (up 88.9% from 1,342 million yen), while the number of technical employees was 14,919 (up 1,517 from 13,402 a year ago). The Area Strategy Business Division responsible for the Area Platform Strategy of UT Aim was transferred to UT Community through the absorption-type company split on April 1, 2022. In addition, UT HP, Support System, Seekel Holdings and UT Progress were absorbed into UT Community, which then changed its name to UT Connect. The Area Business, which is composed of UT Connect and UT SURI-EMU, is strongly promoting the "Area Platform Strategy" in the Medium-term Business Plan. In the first quarter of FY3/2023, segment sales increased y-o-y, driven by a surge in the number of technical employees which was resulted from efforts in hiring based on the strength of diverse job opportunities in response to strong demand for personnel in each area. Segment profit also increased due to efforts to reduce SG&A expenses, such as commonizing the operating base through the Group's major reorganization on April 1, 2022. As a result, in the first quarter of FY3/2023, the segment recorded net sales of 12,253 million yen (up 18.0% from 10,387 million yen in the same period of the previous year) and segment profit of 496 million yen (loss of 186 million yen), while
UT Group Co., Ltd. (Code 2146): Summary of the First Quarter of FY3/2023 the number of technical employees was 12,546 (up 2,024 from 10,522 a year ago). The Solution Business is composed of Fujitsu UT, UT Toshiba, UT FSAS Creative, and UT MESC, and is promoting personnel mobilization based on the strong relationship established through capital alliances and other means with large corporate groups. UT Pabec and UT HP, which formed the "Solution Business" before the segment change, were transferred to a separate segment. UT Pabec was transferred to the "Manufacturing Business" and UT HP to the "Area Business." In addition, UT Group sold all of its shares of UT System Products outside UT Group at the end of March 2022. In the first quarter of FY3/2023, the Solution Business segment increased sales and profit due to the addition of UT FSAS Creative in October 2021, the increase in the number of technical employees led by Fujitsu UT, and efforts to reduce SG&A expenses. As a result, in the first quarter of FY3/2023, the segment recorded net sales of 4,583 million yen (up 15.9% from 3,955 million yen in the same period of the previous year) and segment profit of 15 million yen (loss of 54 million yen), while the number of technical employees was 3,114 (up 1,243 from 1,871 a year ago). The Engineering Business after the segment change is composed of UT Construction and UT Technology, and is divided into "Construction Engineers" and "IT Engineers" as subsegments. And some of the design and development engineers and all of the semiconductor manufacturing equipment engineers in the "Design and manufacturing engineers" subsegment in the Engineering Business prior to the segment change have been transferred to the Manufacturing business segment. In the first quarter of FY3/2023, approximately 200 new graduates who joined UT Group in April 2022 were assigned and in active operation at an early stage. The segment's efforts to develop and assign new graduates have been successful and the new graduates who joined this year were assigned and became operational at an earlier time than those who joined in the previous year. In addition, order booking was favorable for both the construction and IT fields, and the number of technical employees increased y-o-y, resulting in an increase in segment sales and profit. As a result, in the first quarter of FY3/2023, the segment recorded net sales of 2,240 million yen (up 16.4% from 1,925 million yen in the same period of the previous year) and segment profit of 260 million yen (up 59.9% from 163 million yen), while the number of technical employees was 1,574 (up 192 from 1,382 a year ago). The Overseas Business is comprised of Green Speed Joint Stock Company, Green Speed Co., Ltd. And Hoang Nhan Company Limited, which were newly consolidated in January 2021. It is engaged in personnel services, mainly in manufacturing, in Vietnam. The Overseas Business recorded its results for the January-March 2022 period in the first quarter of FY3/2023 with a delay of three months because its settlement date was the last day of December. In the first quarter of FY3/2023, Vietnam's economy achieved a clear recovery, as COVID-19 restrictions were lifted and GDP maintained high growth. The Overseas Business has been expanding its business areas from the southern region centering on Ho Chi Minh City, where it has offices, to the northern region centering on Hanoi. New orders have increased in the northern region and in particular from Japanese companies. The number of technical employees tends to seasonally decrease around the time of the Tet Lunar New Year holiday (which usually occurs in January or February) in Vietnam, but the number of technical employees at the end of March 2022 was higher than at the end of December 2021, resulting in an increase in segment sales and profit.