セグエグループ（3968） – [Delayed]Plan for Compliance with the Listing Maintenance Criteria for the New Market Segment

Plan for Compliance with the Listing Maintenance Criteria for the New Market SegmentStock Code: :3968Segue Group Co., Ltd.December 29, 2021Opinions and forecasts contained in this material are based on our judgments at the time the materials were prepared,and we do not guarantee the accuracy of the information.Actual results may differ materially from the forward-looking statement due to changes in various factors.Our current status as of the transition record dateAmong the listing maintenance criteria for the Prime Market, we did not meet the criteria of the “Market capitalization of tradable shares” as of the transition record date (June 30, 2021) CriteriaPrime MarketOur CompanyCompliance statusMarket capitalization of tradable shares10 billion yen or more6.76 billion yen ×Number of shareholders800 or more2,925Number of tradable shares20,000 units or more54,707 unitsRatio of tradable shares35% or more47.3%Trading value (daily average)20 million yen or more150 million yen○○○○*The figures shown above are based on the “Results of the initial assessment on compliance with the listing criteria for the Prime Market of new market segment” received from the Tokyo Stock Exchange, Inc. as of July 9, 2021.© Segue Group Co.,Ltd. All rights reserved. 2Basic policy and planned scheduleBasic PolicyIn order to satisfy the standard for the Market capitalization of tradable shares,we will accelerate business growth and work to increase corporate value to increase market capitalization.At the same time, we are working to increase the ratio of tradable shares,aiming to further improve the Market capitalization of tradable shares.Planned scheduleOur new medium-term targets are net sales of 17 billion yen, operating income of 1.2 billion yen, net income of 0.8 billion yen, and EPS of 69 yen for FY12/24, and we will take various measures to meet the standards.© Segue Group Co.,Ltd. All rights reserved. 3Medium-term numerical targets to meet the criteriaForecasts for FY12/21 (revised on November 11, 2021)Net sales12.3 billion yenOperating income0.57 billion yenNet income0.44billion yenTargets for FY12/24Net salesOperating incomeNet income17 billion yen1.2 billion yen0.8 billion yen*The sales target for FY12/24 is the figures after applying the Accounting Standard for Revenue Recognition, etc.© Segue Group Co.,Ltd. All rights reserved. 4Estimates of theoretical stock price and market capitalization of tradable sharesEstimating the theoretical stock price using EPS based on the medium-term target figure of 0.8 billion yen in net income for FY12/24 and the Company’s average PER of 23.6 times after 2019 as the assumed value, the stock price would be 1,630 yen. As a result, the Market capitalization of tradable shares will reach 10.59 billion yen.EPSPERTheoretical stock priceTradable shares *1Market capitalization of tradable shares69.1 yen ×23.6x =1,630 yen×65 thousand units=10.59 billion yen*1 This is the target value for FY12/24. The decrease in the number of tradable shares due to the acquisition of treasury stock is not taken into account.Reference: Average PER since 2019列120192020Our company22.8×27.8x20211H23.5x2021Q315.9×2019-23.6xIndustry average(Information andCommunication)27.1×30.2×32.0x27.3×29.1x*2 Our average P/E ratio is calculated based on daily figures, and the industry average is calculated by referring to the Japan Exchange Group and other statistical materials.© Segue Group Co.,Ltd. All rights reserved. 5Initiatives to meet the criteria ①Significantly increase the number of engineers who are the foundation of our businessApproximately 70% of our Group’s personnel are engineers, and they are engaged in the consideration of new products, quality assurance, development of in-house products, and provision of various services. They are essential to the foundation of our business. We will form a new recruitment team and aim to double the number of engineers hired over the next three years.Estimated transition of engineers500400300200© Segue Group Co.,Ltd. All rights reserved. End-Dec. 2019End-Dec. 2020End-Dec. 2021(Forecast)End-Dec. 2022(Target)End-Dec. 2023(Target)End-Dec. 2024(Target)6Initiatives to meet the criteria ②Growth in Value Added Distribution Business Continuous handling of new security products Accumulation of steady support services Strengthening of efficient sales system(recurring revenue)Expansion of In-house Development Business Acquisition of local governments’ projects for information Development of new series and cloud versionssystems resilience Expansion of private sector demand, including medical institutions, financial institutions, and manufacturing companies Expansion of sales partners and accelerate of collaboration Provision of cloud services Strengthening development teamStrengthening System Integration Business Acceleration of increase in consultants, sales and technical staffs Development of sales areas such as western Japan Expansion of domains such as cloud, DX, AI Increasing the size of projects© Segue Group Co.,Ltd. All rights reserved. 7Initiatives to meet the criteria ③Expansion of recurring revenue business Establishment of a new division Strengthening cloud-based service specializing in servicesmodel Improvement of customer satisfaction Development of new servicesBusiness transformation Recruitment and training of IT engineers Regional expansion Hiring and training of engineers for advanced security Promotion of digital transformation (DX)Establishment of new domestic offices Consideration of overseas expansionCapital and business alliances, M&As Execution of M&As Expansion of alliances with companies possessing leading-edge and proprietary technologies© Segue Group Co.,Ltd. All rights reserved. 8Initiatives to meet the criteria ④IR/capital policy Increase opportunities for communication with shareholders and investors Communication with existing shareholders regarding measures to increase the liquidity of our shares, including requests for existing shareholders to sell our shares.SDGs Initiatives Development and production of IT and security personnel Provision of engineer training to customers Development of human resources who can achieve high value-added results Creation of an environment that enables employees to perform more rewarding work Continuous investment in companies with new and unique technologies, such as AI*The medium-term targets are currently being formulated based on the figures on page 4 and the outline above, but the content may change during the process of formulation.More specific details of the medium-term targets are scheduled to be announced in February 2022.© Segue Group Co.,Ltd. All rights reserved. 9AppendixLong-Term Vision (Announced in August 2019)Long-term direction of the Segue GroupBecoming a new leading company in the network securityWe aim to be a TOP company in the industry that is trusted and proud by our customers and partners with a Security Solutions Provider Business by bringing together new technologies such as AI and IoT, and members with unique ideas.Changes in the Market Environment Technological Innovation, AI, Digital Transformation Society5.0 Cyber attacks and terrorism becoming increasingly diverse and complex Geopolitical risk Declining birthrate, aging population, severe shortage Opportunities and Threats New growth potential associated Shift from Conventional IT to with changeAdvanced IT Shift from product to service of engineers© Segue Group Co.,Ltd. All rights reserved. Transforming threats into opportunities for continuousdevelopment11Long-Term Vision (Announced in August 2019)Basic Management Strategy PolicyFurther enhancing our corporate valueSustainable growth in existing businessesConcentrate investment and expansion in new products, services, proprietary products,and proprietary servicesExplosive growth through M & A strategies and the creation of new business modelsCorporatevalueM&A, New BusinessExpansion of highly innovativeproducts and servicesEnhancement of existing businessesFrom a medium-tolong-term perspectiveExplosive growthBase line2019© Segue Group Co.,Ltd. All rights reserved. 202912NotesThe material is prepared solely for the purpose of providing information and is not intended for the purpose of offering, soliciting, or selling specific products, including our shares. The information provided in this material is not required by or based on the Financial Instruments and Exchange Law, governmentordinances and regulations, or the Tokyo Securities Exchange listing regulations. The material contains certain forward-looking statements about our financial condition, results of operations, management plan, and plans and objectives. Please note that such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause our actual results or results of our performance to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based on our current and forecast management strategies and various assumptions regarding the political and economic environment surrounding our business. The information provided in this material is subject to all possible risks and uncertainties, however, there is no assurance of the accuracy, certainty, appropriateness, and fairness of the information provided in this presentation. Please note that the content may be changed or eliminated without notice. Segue Group Co., Ltd. Investor Relations Office, Corporate Administration DepartmentInquiries about IRhttps://segue-g.jp/ir/contact/© Segue Group Co.,Ltd. All rights reserved. 13