Financial Summary for Q3 FY March 2026 [IFRS] (Consolidated)

Overview of Business Results

Consolidated net sales for Q3 FY March 2026 were JPY 4,471,796 million (3.8% YoY increase), operating income was JPY 856,693 million (1.1% YoY increase), and net income attributable to owners of parent for the quarter was JPY 545,541 million (5.1% YoY increase). The increase in net sales was driven by growth in mobile revenue based on telecommunications, as well as growth in growth areas such as financial business income, IoT-related services, and data centers. Operating income increased slightly with net sales growth. The Personal segment posted net sales of JPY 3,575,557 million (2.0% YoY increase) with operating income almost flat at JPY 667,545 million. The Business segment steadily grew with net sales of JPY 1,101,521 million (8.4% YoY increase) and operating income of JPY 183,193 million (4.9% YoY increase).

Financial Position and Cash Flow Status

Total assets amounted to JPY 18,364,689 million (increase of JPY 1,649,810 million from the previous consolidated fiscal year-end), total liabilities were JPY 12,924,824 million (increase of JPY 1,765,111 million), and total equity was JPY 543,986 million (decrease of JPY 11,530 million), resulting in a decline in equity attributable to owners of parent ratio from 30.1% to 26.8%. Cash flow from operating activities was JPY 917,240 million (increase of JPY 198,850 million YoY), cash flow used in investing activities was an outflow of JPY 791,800 million (decrease of JPY 225,570 million YoY), and cash flow used in financing activities was an outflow of JPY 315,916 million (increase of JPY 588,960 million YoY).

Revision of Earnings Guidance and Establishment of Special Investigation Committee

Improper transactions (fictitious circular transactions) in the advertising agency business came to light, prompting the establishment of a special investigation committee to conduct an inquiry. Expected decreases of JPY 67.6 billion in net sales, JPY 42.0 billion in operating income, and JPY 35.2 billion in net income attributable to owners of parent are forecast. Additionally, due to a decline in total smartphone sales and energy sales, a total net sales decrease of JPY 270 billion is anticipated. Due to a review of the sales strategy, the recoverability of sales commission related assets has declined, and an impairment loss of JPY 50 billion is planned. In light of these factors, the full-year consolidated earnings guidance was revised to net sales of JPY 6,060,000 million, operating income of JPY 109,000 million, and net income attributable to owners of parent of JPY 698,000 million.