デジタル・インフォメーション・テクノロジー（3916） – [Delayed]Financial Results for the Second Quarter of the Fiscal Year Ending June 2022

Digital Information Technologies CorporationFinancial Results for the Second Quarter of the Fiscal Year Ending June 2022(TSE1: 3916)February 2022https://www.ditgroup.jp1. FY6/2022 2Q Financial Results 2. FY6/2022 Business Forecasts3. FY6/2022 Priority Measures by Segment/Initiatives in 1H4. DIT Group’s Vision for 2030 and New Mid-term Management Plan5. Reference material21. FY6/2022 2Q Financial Resultshttps://www.ditgroup.jpFY6/2022 2Q Overview of Financial Results■ Steadily responded to demand; achieved new record highs in sales and profits, breaking the previous-year records.■ Operating income margin remained high at 12.7%Net sales: 7,685 million yen(+8.8% YoY)Operating income: 973 million yenOperating income margin: 12.7%(+6.7% YoY)(-0.2ppt.)Progress rate to the full-year forecasts Net sales (Est.): 15,600 million yenOperating income (Est.): 1,900 million yenNet sales Operating income 2Q2Q49.4%49.3%2Q57%2Q51.2%4FY6/2022 2Q Overview of Financial Results (Business)Our ore Software Development Business grew.Both the Business Solutions Unit and the Embedded Solutions Units drove the favorable performance. ■ Software Development Business ・ In the Business Solutions Unit (+9.5% YoY), sales and profits increased thanks to significant growth in our mainstay business system development. In business system development, sales of pharmaceutical-related projects grew significantly, while the acquisition of communications, manufacturing, and ERP-related projects progressed more than expected. Operational support was partly affected by business reforms at mainstay customers, but steadily grew by capturing needs such as cloud infrastructure construction.・ In the Embedded Solutions Unit (+9.2% YoY), sales and profits increased thanks to significant growth in semiconductor-related projects and increase in system verifications. In embedded systems development, sales of mainstay automobile-related projects went out of the pause and sales of semiconductor-related projects grew significantly. Sales and profits of IoT-related projects also increased steadily. In embedded system verification, sales and profits increased significantly YoY thanks to significant growth in automotive verification, as well as growth in 5G and pharmaceuticals-related projects.・ In the Original Product Unit (+12.8% YoY), sales grew steadily in both xoBlos and WebARGUS despite continuing constraints on business negotiations following the COVID-19 crisis. Electronic contract cloud DD-CONNECT received more inquiries and also received orders from major construction companies, etc.■ In the Systems Sales Business (-8.5% YoY), sales and profits decreased as COVID-19 had a large impact on its mainstay face-to-face sales activities, despite a respite in the reactionary fall following the special demand.5FY6/2022 2Q Financial Highlights Both sales and profits achieved record-highs.(Millions of yen)7,0656,5675,000+7.6%Net salesOperating incomeOrdinary income7,685973912981912+8.8%732+6.7%736600+7.6%509600+24.5%600+23.9%Net income attributable to owners of parent686628+9.3%+23.3%0FY6/20202QFY6/20212QFY6/20222Q000FY6/20202QFY6/20212QFY6/20222QFY6/20202QFY6/20212QFY6/20222QFY6/20202QFY6/20212QFY6/20222Q6FY6/2022 2Q Summary of Financial Results■ Strong performance even under the COVID-19 crisis. Record-high figures for each income items.FY6/2021 2QResultComposition%FY6/2022 2QResultComposition%FY6/2022planProgressrate%(Millions of yen)Net sales7,065 100.0%7,685 100.0%15,60049.3%Gross profit1,75824.9%1,93125.1%84691212.0%12.9%91212.9%—-12.5%95897398112.7%1,90051.2%12.8%1,90051.6%SG&AOperating incomeOrdinary incomeNet income attributableto owners of parent6288.8%6868.9%1,31852.0%7Factors behind Changes in Net Sales and Operating Income (YoY) Sales were strong in both the Business Solutions Units and the Embedded Solutions Units, and steady growth in the Original Product Unit. SG&A expenses increased by 111 million yen due to a refund of taxes and public charges in the previous 1Q in addition to an increase in personnel expenses and recruitment expenses associated with business expansion.Net salesOperating income(Millions of yen)(Millions of yen)Originalproduct SystemsSaleEmbeddedBusiness+620 million yen+8.8%expensesIncrease i npersonnel Increase in commissions paidexpensesIncrease in recruitment-related public chargesIncrease in taxes and Decrease in advertising expensesexpensesIncrease i nR&D expensesIncrease i nother 973912gross profitIncrease in +61 million yen+6.7%SG&A costYoY+111 million yenFY6/2021 2QFY6/2022 2QFY6/2021 2QFY6/2022 2Q8Changes in Operating Income Margin■Operating income margin declined slightly (0.2%) due to higher SG&A expenses, but maintained a high profit margin.■Gross margin increased due to higher sales and higher profit margins in the software development business, despite a decrease in sales of Rakuichi, which has a high profit margin.Ratio of each profit and R&D expenses to salesGross profit marginSG&AOperating income margin24.9%25.1%12.0%12.9%12.7%12.5%25.3%14.2%11.2%30.0%25.0%20.0%15.0%10.0%5.0%0.0%FY6/20202QFY6/2021 2QFY6/2022 2Q9Quarterly Net Sales & Operating Income For 2Q, net sales and operating income showed record-highs.Net salesOperating income(Millions of yen)(Millions of yen)FY6/2020FY6/2021FY6/2022FY6/2020FY6/2021FY6/20223,969 3,716 3,771 3,635 3,642 3,607 3,430 3,273 3,293 3,286 552 580 505 421 453 407 353 379 230 166 1Q2Q3Q4Q1Q2Q3Q4Q*Operating income is seasonally lower in 4Q due to new hires and year-end allowances, but we are working to reduce the decline by increasing the salary and bonus payment rate starting this fiscal year.10Business Domains: Positioning of Each BusinessMake inroads into new Business AreasOriginal Product BusinessDevelopment / sales of originalproducts based on proprietary technology.System Sales BusinessSales of System Solutions geared toward SMEs.Embedded Solutions BusinessDevelopment and verification of software for embeddedsystems used in automobiles, mobile and network devices.Business Solutions BusinessProvision of IT services such as IT system design/development/construction, installation support, and operation support to a wide range of industries including finance, telecommunications, transportation, and distributionGrowthFieldEarnings BaseStableGrowthBusiness foundationStrengthen on-site capabilities x Strengthen product capabilities x Strengthen management base by creating systems and environment11Business Segment and Composition of Sales Business system development and embedded system verification grew. Ratio of the Original Product Unit exceeded 5%.ClassificationFY6/20202QNet salesCompositionFY6/20212QNet salesCompositionFY6/20222QNet salesCompositionBusinesses segmentSoftware Development BusinessBusiness System DevelopmentBusinessSolutions UnitOperational SupportEmbeddedSolutions UnitEmbedded Product DevelopmentEmbedded Product VerificationOriginal Product UnitSystems Sales BusinessBusinessBasesBusinessBasesGrowthFieldBusinessBases33.0%31.7%93.7%56.3%59.6%40.4%77.9%22.1%4.4%6.3%95.5％58.9%57.6%42.4%78.9%21.1%4.9%4.5%96.2％59.3％59.3％40.7％31.8％75.9％24.1％5.1％3.8％12Sales by Business Segment In addition to the strong performance of the Business Solutions and Original Product Units, the Embedded Solutions Unit also showed signs of recovery.Quarterly Sales by Business(Graphs from left to right: FY6/2020 2Q, FY6/2021 2Q, FY6/2022 2Q)Business solutionEmbedded solution(Millions of yen)Original productSystem sales4,558 4,161 3,696 5,0004,5004,0003,5003,0002,5002,0001,5001,00050002,701 2,443 2,395 2,203 2,238 1,856 1,765 2,169 1,493 1,853 1,766 1,688 BusinessSolutions＝BusinessSystems+OperationalsupportEmbeddedSolutions＝Embeddeddevelopment+EmbeddedvenificationOriginal ProductSystems Sales13589 480 471 391 346 286 319 414 292 Net Sales by Segment: Business Solutions Unit(Millions of yen)4,5584,161 Net sales: 4,558 million yenYoY change: +9.5%4,5004,0003,5002,5002,0001,500Business systems 1,000development50003,696 12.6%increase9.5%increase1,856 Operational 3,000support1,493 1,765 2,203 2,395 2,701 FY6/20202QFY6/20212QFY6/20222QSuccessful review of business portfolio resulted in higher sales and profits.■Business System Development■Although sales of the financial-related projects declined slightly due to a shift in personnel, sales of the pharmaceutical-related projects grew significantly, and orders in the communications, manufacturing, and ERP-related projects progressed more than expected, resulting in significant growth.■Operational Support■Despite some impacts from business reforms by mainstay customers following the COVID-19 crisis, steady growth by capturing needs such as cloud infrastructure construction.14Net Sales by Segment: Embedded Solutions Unit3,000(Millions of yen)2,5002,169 2,238 2,000Embedded verification480 3.2%increase471 2,4439.2％increase589 1,000Embedded development1,688 1,766 1,853 1,5005000FY6/20202QFY6/20212QFY6/20222QNet sales: 2,443 million yenYoY change: +9.2%Higher sales and profits due to growth in semiconductor-related projects, etc.■Embedded Development■Sales of mainstay automobile-related projects increased slightly after leveling off, and sales of semiconductor-related products grew significantly.Sales and profits increased as IoT-related projects, including mobile and consumer electronics, were solid.■Embedded System Verification■Sales and profits substantially increased, with sales growing by 25.1% YoY. This was attributable to a large growth in sales of automotive verification, and growth in 5G (mobile devices and base stations) and pharmaceutical-related products.15Net Sales by Segment: Original Product Unit450400350300250200150100500(Millions of yen)346 391 12.8％increase286 20.9％increaseFY6/20202QFY6/20212QFY6/20222QNet Sales: 391 million yenYoY change: +12.8%Despite the remaining impact of COVID-19, results exceeded those of the previous year.■ [WebARGUS: Cybersecurity product]Both sales and profits were solid due to the accumulation of license sales. Continued collaboration with external cyber security specialist companies.■ [xoBlos: Operational efficiency products]Steady growth due to expansion of horizontal deployment within existing customers. Both sales and profits grew. Strengthened product appeal by expanding linkage functions with various systems such as RPA and ERP. Orders from major companies is increasing.■ [Other new products]DD-CONNECT, an electronic contract service, both received inquiries and orders increased. Develop sales agents for new product “shield cms”.16Net Sales by Segment: Systems Sales Business450400350300250200150100500(Millions of yen)414 -22.9％decrease319 Net Sales: 292 million yenYoY change: -8.5%292 Sales and profits in the systems sales business declined YoY due to the impact of COVID-19.-8.5％decrease■ Sales and profits decreased due to FY6/20202QFY6/2021 2QFY6/2022 2Qsusceptibility to the COVID-19 impact, since we mainly sell product through face-to-face sales, despite a respite in the reactionary fall following the reduced tax rate from FY6/2020 to FY6/2021.*The Systems Sales business mainly sells Rakuichi, which is a core system for providing operational support and management support to small-and medium-sized enterprises created by Casio Computer Co., Ltd.17Balance SheetDebt-free management, with equity ratio at 73.4%Cash and depositsAccounts receivableAccounts receivable and contract assetsWork in progressOthersTotal current assetsProperty, plant and equipmentIntangible fixed assetsInvestments and other assetsTotal fixed assetsTotal assetsEnd-Jun. 2021End-Dec. 2021Change3,3333,7202,084－－ 2,320387－1656,30310114－98 △3349639△9△1401 △197517 △2074326,8201311165,664110155987246,388Notes and accounts payable – tradeShort-term borrowingsOtherTotal current liabilitiesLong-term debtOthersTotal fixed liabilitiesTotal liabilitiesCapital stockCapital surplusRetained earningsTotal net assetsTotal liabilities and net assets(Millions of yen)End-Jun. 2021End-Dec. 2021Change487－1,2631,750－1111111,8614534593,6144,5266,38851528－-119119－1,180 △831,695 △55－881,815 △46004794794324534594,0935,0056,82018Cash Flows Steady increase in cash( Millions of yen)Operating CFFinance CFInvestment CFCash & cash equivalents at end of yearFY06/2112-175FY06/22189-221FY06/20FY06/212QFY06/21FY06/222Q19Topics: Decided to shift to the Prime MarketBased on the “Results of Selection of New Market Segments” published by the Tokyo Stock Exchange, we were given permission to shift to the “Prime Market” from April 4 of this year.As a company listing on the Prime Market, the top market after the reclassification, we will strive to achieve sustainable growth and increase corporate value over the medium to long term so that we can meet the expectations of our shareholders.202. FY6/200 Business Forecasts https://www.ditgroup.jpFY6/2022 Business Forecasts Aim to increase sales and profits by promoting business based on the two pillars of “stabilizing the business foundation” and “strengthening growth factors”.FY6/2021ResultComposition%FY6/2022ForecastComposition%YoY%(Millions of yen)Net sales14,444 100.0% 15,600 100.0% +8.0%Operating income1,722 11.9%1,90012.2% +10.3%Ordinary income1,730 12.0%1,90012.2% +9.8%Net income attributable to owners of parent1,1968.3%1,3188.4% +10.2%22FY6/2022 Progress Rate in 1H to the Full-year Forecasts Considering the impact of COVID-19, we have expected that sales will be weighted toward 2H, but progress rate in 1H was favorable.Net salesOperatingincomeOrdinary incomeNet incomeattributable toowners of parentProgress rate in 1H to the full-year forecastsFull-year forecasts7,685 million yenProgress rate : 49.3%973 million yenProgress rate: 51.2%981 million yenProgress rate: 51.6%686 million yenProgress rate: 52.0%15,600 million yen1,900 million yen1,900 million yen1,318 million yen0%25%50%75%100%23Return to Shareholders (Dividend Forecasts) Based on the target payout ratio of 35% or above stated in the medium-term management plan, we plan to pay 30 yen per share for the current fiscal year.Changes in dividend and payout ratioInterimYear-endPayout ratio31.4%11 yen14 yen30.8%9 yen10 yen35円30円25円20円15円10円5円0円33.3%9 yen7 yen36.034.032.030.028.035.0%15 yen15 yen FY6/2022(Forecast)FY6/2019FY6/2020FY6/2021・Payout ratio = Total amount of dividend payment ÷ Net income attributable to owners of parent243. FY6/2022Key Initiatives by Segment for 2Hhttps://www.ditgroup.jpForecast of Business Results by Segment• In the Software Development Business, we plan to increase sales by 8.2% YoY, and in the Original Product Unit, we aim to increase sales by 15.2%.(Millions of yen)2613,83814,9751,1368.2%96.0%Business Solutions Unit8,6049,1335296.1%58.5%Embedded Solutions Unit4,5225,02250011.0%32.2%Original Product Unit71282010815.2%5.3%605625203.2%4.0%14,44415,6001,1568.0%TotalBusiess SegmentChangeCompositionSoftware Development BusinessSystem Sales Business%ChangeFY6/2021Net salesFY6/2022Net salesForecastForecast by Segment: Business Solutions Unit10,000(Millions of yen)7,838 8,604 6.1％increase9.8％increase4,443 4,575*4,142 5,000Second Half9,0008,0007,0006,0004,0003,0002,0001,000First Half01H Ratio 47.2％3,696 1H Ratio 48.4％4,161 1H Progress rate49.9％4,558 FY6/2020FY6/2021FY6/2022(Forecast)Net sales: 9,133 million yenYoY change: +6.1%9,133 ■ In business system development, demand is expanding to a wider range of industries; we will build a system that can capture the demand to expand business scale and improve profits.■ Operational support is an area that is less susceptible to the impact of COVID-19; it aims to respond appropriately to demand and continue to expand business scale and improve profits.*The 2H figure in the current forecast is simply the full-year forecast minus the 1H actual results.27Priority Measures by Segment: Business Solutions UnitPriority MeasuresResults in the First HalfEfforts in the Second Half1. Expand pharmaceuticals, communications, ERP (SAP, etc.)-related projects in addition to financial services, which are our strengths.Strong performance due to a shift of personnel from financial to pharmaceutical and ERP (mainly SAP)-related projects in accordance with the planContinue to shift personnel to high-margin areas (pharmaceuticals, SAP-related, etc.)2. Increase orders for technology projects that promote DX, such as cloud and AI-based services.Expanded through cloud-related projects3. Expand end-user direct contract projects and promote service proposal based business.Steady growth in direct contracts with end users4. Improve the contract project ratio and implement thorough project management.5. Expand business by utilizing local bases as “advanced near shore development centers.”Standardization of project management progressed, and QCD (quality, cost, delivery) progressed without problemsGrowth in Ehime Company, the main regional baseThe number of cloud-related projects is expected to increase, and we aim to expand DX projects such as AI-based servicesSteady progress in large-scale projects by pharmaceutical end users and promotion of service proposal-based businessesFurther promotion of standardization of project management and aiming for zero failure projectsAiming to acquire more projects with the COVID-19 disaster as a tailwind28Forecast by Segment: Embedded Solutions Unit6,0005,0004,000(Millions of yen)4,308 5.0％increase5,022 4,522 11.0％increaseSecond Half3,0002,139 2,284 2,0001H Ratio 50.3％1,000First Half2,169 01H Ratio49.5％2,238 2,579*1HProgress rate48.6％2,443 Net sales: 5,022 million yenYoY change: +11.0%■ In embedded system development, we aim to grow by striving to increase its share of transactions with existing high-quality customers in the automotive, semiconductor, and industrial equipment fields, as well as expanding its IoT-related projects.■ In embedded system verification, we aim to grow by expanding the domains of automotive, pharmaceutical-equipment, and 5G related projects.FY6/2020FY6/2021FY6/2022(Forecast)*The 2H figure in the current forecast is simply the full-year forecast minus the 1H actual results.29Priority Measures by Segment: Embedded Solutions UnitPriority MeasuresResults in the First HalfEfforts in the Second HalfAutomobile-related field is going out of the pause and sales start to increaseFocus on expanding the fields of automated driving, automotive communications equipment, and safety standards, as recovery in the automobile-related field is expectedSteady expansion in the IoT field in each industry (automotive, consumer electronics, electricity, and gas)Aiming to win projects in each industry in the IoT field and expand in the IoT field1. Maintain/expand automobile-related business (autonomous driving, in-vehicle communication equipment and safety standards) and expand the industrial equipment business.2. Expand IoT beyond the boundaries of industry (e.g., cars (communication modules development) and consumer electronics (kitchen consumer electronic IoT service platform development and service expansion)). 3. In the automotive field, we aim to win projects in the mass-production development field, as well as in the advanced development field.4.Complete standardization of embeddedverification to improve quality and expandoperations.Standardization of embedded verification progressed, and the effects were confirmed through trial operationExpansion of mass production development at major automobile meter-related companiesAccumulate results for participation in mass production development by finished vehicle manufacturers and major parts manufacturersAiming to expand embedded verification operations using proprietary methodology, supported by recovery in automobile-related fields*MaaS: Mobility as a Service (The concept of using information and communication technology to lead to seamless movement for modes of transport other than private cars.)30Forecast by Segment: Original Product Unit9008007006005003002000(Millions of yen)60916.8％increase71215.2％increaseSecond Half400323 1H Ratio47.0％100First Half286 366 1H Ratio48.6％346 820429*1H Progress rate47.7％391 Net sales: 820 million yenYoY change: +15.2%We aim for steady growth as all products can play a more active role in the New Normal society under COVID-19.■Growth is expected in response to further rising demand for cyber security.■Anticipate growth by riding trend of work style reform.FY6/2020FY6/2021FY6/2022(Forecast)*The 2H figure in the current forecast is simply the full-year forecast minus the 1H actual results.31Priority Measures by Segment: Original Product UnitPriority MeasuresResults in the First HalfEfforts in the Second Half1. Actively approach large users focused on financial institutions based on introduction results.2. Provide Total Security Services under “DIT Security” Brand・Promote activities through joint seminars with partner companies・Strengthen lineup of cyber security products3. Provide cyber security services in our own cloud environment4. Enhance engagement with customers through web advertising, webinars, and DM5. Realize the introduction of the IoT version of WebARGUS based on the system resilience (self-detection and self-repair) concept.Received inquiries for projects from multiple large-scale usersProactively pursue approaches to introductionSuccessful introduction of other companies’ products constantly as part of total security servicesAim to strengthen lineup and revitalize sales activities by collaborating with other companies’ productsEstablished the foundation for cyber security services in our own cloud environmentAim to expand service deployment to customersContinued web advertising and increase awarenessDevelop news advertising in smart speakers as a new trialSignificant progress was not achievedContinue to explore industry trends32Priority Measures by Segment: Original Product UnitPriority MeasuresResults in the First HalfEfforts in the Second Half1. Introduced in a total of more than 515 companies and further strengthen sales to large users.The number of companies introducing the system exceeded 530Aim for 550 installation companies, mainly large-scale users2.Strengthen user support and increase licenses from existing customers.Steady progress in increasing licenses from existing customers3. Actively promote the Plus one concept (linkage with RPA, ERP and other systems) to expand sales opportunities.Expansion of sales centered on ERP productsContinue to strengthen support activities for existing customers and to increase licensesPromote sales activities with the aim of collaborating with ERP products that have a track record4.Provide form processing services in the cloud environment.Established the foundation to provide cloud-based servicesRedefine the content of services and begin sales activities5. Commercialize and provide services of RPA operation portal based on xoBlos.Progress in designing xoBlos based RPA-operation portalsComplete the commercialization of the RPA operation portal and aggressively commence sales activities33Priority Measures by Segment: Original Product UnitNew Product: DXPriority MeasuresResults in the First HalfEfforts in the Second Half1. Aim for full-scale development of the electronic contract outsourcing service DD-CONNECT.Strong demand with introduction to large-scale usersCapture robust demand2. Aim to cultivate markets and receive orders as soon as possible with the launch of sales of Shield CMS.Enhanced corporate web site, promoted awareness activities, and cultivated distributors to cultivate the marketStart full-scale sales activities to win orders3.Provide new services in response to the New Normal society under the COVID-19 crisis and SDGs.Provide DX-related services (AI, RPA, voice recognition, etc.)R&D is underway to provide new servicesPlan to provide new services during the 2H of the fiscal year*CMS: Contents Management System (This is the general term for systems that manage the digital content of text and images that constitute web content on an integrated and systematic basis and perform the necessary processing such as distribution.)*SDGs: Sustainable Development Goals (These are the United Nations’ international goals for sustainable development. Theyconsist of 17 global goals and 169 targets.)34Forecast by Segment: Systems Sales Business(Millions of yen)7398007004003002001000625605-18.1％decrease325 600Second Half5003.2％increase286 333*1H Ratio56.0％First Half414 1H Ratio52.7％319 FY6/2020FY6/20211HProgress rate46.7％292 FY6/2022(Forecast)Net sales: 625 million yenYoY change: +3.2%Expect a reactionary fall due to the absence of special demand in the previous fiscal year.■For the mainstay Rakuichi business, we aim to increase sales by strengthening support and proposals useful to customers.■Approach royal existing customers to expand profits.*The 2H figure in the current forecast is simply the full-year forecast minus the 1H actual results.* Rakuichi is a business and management support system for SMEs manufactured by Casio Computer Co., Ltd.35Priority Measures by Segment: Systems Sales BusinessPriority MeasuresResults in the First HalfEfforts in the Second Half1. Aim for stable transaction over the long term; strive to support digital transformation (DX) by SMEs2. Strengthen proposals for various services required by customers (e.g., printers, networks and security products).3. Cultivate new customers by proposing exclusive business packages to companies whose business scale is larger than those of existing customers.Selection of domains to support DX by SMEsCapture demand in line with revisions to the Electronic Book Retention LawPromoted sales of Rakuichiperipheral equipment to cover the decline in sales of RakuichiStrive to propose UTM(*) and other peripheral equipmentStarted proposals by selecting packaged products Implement proposals without fail, focusing on selectively packaged products*UTM: Unified Threat Management centralizes several security functions into a single product and manages various types of security.364. DIT Group’s Vision for 2030 and New Mid-term Management Plan (FY6/2022-FY6/24)(Excerpted from explanatory materials disclosed on Aug. 20, 2021)https://www.ditgroup.jpVision for 2030Toward a Trusted and Selected DIT BrandDIT Brand- Enhance Customer Value! -～ Enhance Customer Value ! ～DIT Services Providing a higher level of valueDIT SpiritsDITSecurityDITEfficiencyDITSupportDITConsultingDITQualityDITTechnologiesSafety and robustnessEfficiency improvementReliable operationHigh qualityAdvanced technologyProfessional groupAbility to resolve issues and propose solutions38Steps to Realize the 2030 VisionVertical axs: iiExpanson of busnessiDIT 2030 VisionFY6/2028-FY6/2030Establishing the DIT BrandFY6/2025-FY6/2027Achieving a growth trajectoryEstablish a DIT brand that is trusted and chosen by all stakeholdersFY6/2022-FY6/2024Promoting business structural improvementEstablish a business style and put the overall business on a growth trackBuild up business capabilities by promoting the creation of a company and structure that will enable the next growthHorizontal axis: Development of infrastructure39Mid-term Growth Model■ We will further strengthen the “2-axis business promotion,” which has supported growth up to the present time, and promote further expansion of our business foundation and the provision of new value and services.12Business foundationGrowth factors・・・Further expanding the base by leveraging stable exchanges in a wide range of business domains as a strength・・・Providing new value and services in response to social changeProfitsNew Medium-term Management PlanNew value and servicesBusiness foundation in existing areasExpansion of Growth Factors• Business expansion centered on original products• Expansion of business domains utilizing new technologies• Expansion of new service-oriented businesses through collaboration and co-creationExpansion/stabilization of business foundation• Continuously investing management resources in areas with growth potential• Further Expansion of Business Domains through Comprehensive StrengthsGrowth factorsBusiness foundationFY6/2022-2024FY6/2025-2027FY6/2028-203040Management TargetsChallenge to sales of 50 billion yen ! FY6/2022 ResultsFY6/2030 TargetNet salesOperating income14.4 billion yen1.72 billion yenOrganic growth+New business・M&A, etc.30 billion yen or more 50 billion yen or more4 billion yen or more 5 billion yen or more-FY6/2022FY6/2022-FY6/2030Dividend payout ratio 30％ or more35％ or more41Management Targets in the Medium-Term Management Plan■ Medium-Term Management Targets for Organic GrowthFY6/2021(Results)FY6/2022(Forecast)FY6/2023(Planned)FY6/2024(Planned)Net sales14.4 billion yen 15.6 billion yen 16.8 billion yen 18.5 billion yen1.72 billion yen 1.90 billion yen 2.15 billion yen 2.50 billion yen11.9%12.2%12.8%13.5%Operating incomeOrdinary incomeDividend payout ratioROE29.2%Maintain 20% or more30% or more35% or more■ Dividend Forecast for FY6/2022Annual dividend per share24.0 yen30.0 yen42Management Targets of the Medium-Term Management Plan (Dividend Payout Ratio)■ Raising the dividend payout ratio from the current 30% level to 35% or moreOrdinary Divident(yen)Payout RatioMaintain a dividend payout ratio of 35% or more31.8%33.3%31.4%30.8%35.0%30.0 Yen24.7%20.0 Yen24.0 Yen16.0 Yen7.5 Yen11 YenNew Medium-term Management PlanFY6/2017FY6/2018FY6/2019FY6/2020FY6/2021FY6/2022(Forecast)FY6/2023(Planned)FY6/2024(Planned)45.040.035.030.025.020.015.010.05.00.036.0%34.0%32.0%30.0%28.0%26.0%24.0%22.0%20.0%43SDGs: Contributing to the Realization of a Sustainable SocietyWe will strive to support a sustainable society through appropriate corporate management and the introduction of our original products to customers.Contribution from corporate managementContribution from introduction of original products, etc.Contribute to a sustainable society by enhancing employee benefits, promoting diversity through the appointment of women to managerial positions, and appropriate business management with an emphasis on governance, etc.Contribute to establishing a comfortable and secure Internet-based society and improving social productivity by introducing security products (WebARGUS) and work style reform-related products (xoBlos, DD-CONNECT), etc.Relevant SDGs goalsRelevant SDGs goals44Reference materialshttps://www.ditgroup.jpCorporate DataTrade nameDigital Information Technologies CorporationEstablishmentJanuary 4, 2002Contents of businessLocation of head officeDevelopment of business systems, development and verification of embedded systems, system operation services, sales of in-house developed software, and system sales business5F, FORECAST Sakurabashi, 4-5-4 Hacchobori, Chuo-ku, TokyoCapital stock :453,156 thousand yen (As of the end of June 2021)Fiscal year end :June 30Number of the employees1,097 (1,016 on a non-consolidated basis) (As of the end of June 2021)OfficerGroup Companies :Satoshi Ichikawa, Representative Director and President6 other internal directors and 4 outside directors1 full-time auditor and 2 outside auditors(As of the end of September 2021)DIT Marketing Service Co., Ltd., DIT America, LLC.Satoshi Ichikawa, Representative Director and PresidentMarch 2004 Joined the CompanyJuly 2007 Executive Officer, General Manager, Corporate Planning DivisionJuly 2010 Executive Officer, General Manager of Business DivisionSeptember 2012 Director and Executive Director, General Manager of Corporate Planning Department and Product Planning and Development Department July 2015 Managing Director, General Manager of Business DivisionJuly 2016 Representative Director and Senior Managing Executive OfficerJuly 2018 Representative Director and President46Domestic and overseas development bases and the number of employeesOsaka Office(169 employees)1-5-16 Edobori, Nishi-ku, Osaka-shi(Other Osaka Development Center)Ehime Office (56 employees)7-1-21, Mibancho, Matsuyama-shi, EhimeEast Japan Center (16 employees)4-6-1 Hayaoka, Miyagino-ku, Sendai-shi, MiyagiDIT America (33 employees)Head Office(576 employees)4-5-4, Hatchobori, Chuo-ku, Tokyo(Other Hacchobori Satellite Office)DIT Marketing Services (48 employees)2-35-4 Minami-Ikebukuro, Toshima-ku, Tokyo(Other Yokohama, Chiba, Makuhari, Takasaki Offices)47Kawasaki Office (199 employees)1-2-4, Sunago, Kawasaki-ku, Kawasaki-shi, KanagawaCorporate PhilosophyOver-allClient-drivenCorporate philosophyCompanyIndividualsEmployee training/growth, CommunicationIncrease in value added, Sense of objective / target,Passion and dedicationManagement philosophyGuarantee ouremployees’ livelihoodwhile contributing tosocietyManagement PolicyDeliver on our commitment to value generation andadaptability to change, while aiming to realize stable growth for the company５つの基本的な事業戦略iiDsperson (sub-optiimzation)lDeveopment of Managerial taent lAdaptability to change / Specailization /Organizational strategyOrganizational strategy involving dispersion (sub-optimization)and concentration (total optimization) BSCompanyeB company SBCompany ESCompany NNCompany QECompany EMCompanylXoBos DvsoniiiiBusness DvsoniiiI TSecurityLaboratory DXBusness ilDeveopment Office NewProduct CSDivisionTSDivisionPSDivisionAdministration divisionCorporate Planning DivisionConcentration (total optimization)Control / Unification /Collaboration IDTAmerica, LLC IDTMarketing Servce Co., Ltd.i48Business strategySelected as One of Stocks Constituting JPX-Nikkei Mid and Small Cap IndexWe continued to be selected as one of stocks used by Tokyo Stock Exchange, Inc. and Nikkei Inc. for calculating “JPX-Nikkei Mid and Small Cap Index” in fiscal 2020*In order to live up to the expectations of stakeholders, we will strive to improve corporate value sustainably and conduct business administration while caring for shareholders, in accordance with the purpose of the selection. *This index will be applied from August 31, 2021 to August 30, 2022.49Customer BaseSales Composition by IndustryTransportation 3%Medical care5%Distribution,Other3%Public service 6%Services7%Manufacturing35%Automotive47％Semiconductors14％Communications20%Financial business21% Customers of the DIT Group areApprox. 2,800 companies・ Software development business mainly attend listed companies and their affiliates, and system sales business mainly attend SMEs. Sales Composition by Industry of Software Development Business (Left chart)・ Including information systems subsidiaries, sales for end users accounted for 80% of total sales.50Composition of ShareholdersEnd of December 2021Number of shareholders: 5,767persons*The graph is based on number of holdings5.3％ 0.9％11.2％16.2％14.1％52.3％Individuals andothersFinancialInsutitutionsOthercorporationsForeignInvesterSecuritiescompaniesTreasury stock51Launched “shieldcms”, a Highly Secure Website Creation PlatformLaunched “shieldcms”, a website creation platform that combines safety and mobility, in SeptemberSaaS, open source services are often poorly secured and are vulnerable to cyber-attacks such as falsification of websites.Accordingly, we have combined our original security product WebARGUS with CMS services to develop a new high-security SaaS platform that enables instantaneous recovery of web tampering caused by cyber-attacks. The platform was launched in September. We have been receiving much inquiries for this product.52Contact information :Enomoto, IR Division, Corporate Planning DivisionTEL: 03-6311-6532 FAX: 03-6311-6521E-mail: ir_info@ditgroup.jphttps://www.ditgroup.jp■ The content of these materials is based on generally accepted economic and social conditions and certain assumptions that we deem reasonable. However, the content of these materials may change without notice due to changes in the business environment or other factors.■ The information provided in this presentation contains forward-looking statements. These forward-looking statements are based on current expectations, estimates and assumptions that involve risks. These statements are subject to uncertainties that could cause actual results to differ materially from those described in these statements.■ Such risks include, but are not limited to, general domestic and international economic conditions, such as general industry and market conditions, interest rate and currency exchange rate fluctuations.■ We shall not be obligated to update or revise any forward-looking statements contained in this report, even if there is any new information or future events.https://www.ditgroup.jp