Sansan: Notice regarding recognition of deferred tax assets/non-operating expenses and differences in consolidated financial results

Notification Regarding the Recognition of Deferred Tax Assets and Non-Operating Expenses, and Differences in Consolidated Financial Results from Full-Year Consolidated Profit Forecast or Prior Year Actual Results

Sansan, Inc. (“the Company”) today announces that it has recognized the following deferred tax assets and non-operating expenses in its financial results for the year ended May 31, 2022 (“FY2021”). In addition, the Company announces the differences between the consolidated financial results for fiscal 2021 and the consolidated annual earnings guidance for fiscal 2021 announced on July 14, 2021 or the actual results for the prior fiscal year (“fiscal 2020”) , as following.

1. Details of deferred tax assets

Following careful consideration of the recoverability of deferred tax assets based on fiscal year 2021, future performance trends and other factors, the Company has recorded deferred tax assets and the amount the corporate tax adjustment (- denotes profit) of -296 million yen for fiscal 2021.

2. Details of non-operating expenses

Affiliates of the Company’s equity method include CREATIVE SURVEY Inc., which manages online survey tools, and SATORI Inc., which develops and sells marketing automation tools, etc. Since many of these affiliates are currently in the stage of aggressive business growth investments, such as product development and marketing, and have run deficits, the company has recorded a cumulative investment loss according to the equity method of 609 million yen (462 million yen recorded up to and including the third quarter) for fiscal 2021.

3. Differences Between Fiscal 2021 Actual Results and Fiscal 2021 Forecast or Fiscal 2020 Actual Results

Note: The Company implemented a 4:1 common stock split on December 1, 2021. Accordingly, basic earnings per share is calculated assuming that such stock split had been effected at the beginning of the previous fiscal year.

4. Reasons for differences

(Difference from forecast consolidated annual results)

Consolidated sales and operating income are within the range of the annual forecasts announced at the start of the year. However, due to having made flexible investment decisions based on the economic environment, the evolution of our businesses and other factors, the consolidated operating profit has largely exceeded the lower limit.

(Difference from prior year actual results)

In the case of consolidated ordinary profit and profit attributable to owners of the parent company, the reasonable estimation of certain non-operating profits and losses and other factors is plagued with difficulty, and therefore specific forecast figures n were not disclosed. However, a gain on the sale of investment securities of 979 million yen was recorded as non-operating profit, resulting in a significant increase from the prior year.