コアコンセプト・テクノロジー（4371） – [Delayed]Financial Results Q1 FY2022

Financial results for Q1 of FY 12/2022Core Concept Technologies Inc. Securities Code: 4371May 12, 20221 E x e c u t i v e S u m m a r y2 E a r n i n g s R e p o r t3 G r o w t h S t r a t e g y4 A pndpexiP3-P5-P16-P23-21Executive SummaryExecutive SummaryExecutive summarySales and profit grew considerably year on year.Net sales: 2,754 million yen+62.7 % year on year406 million yen+167.3 % year on year14.8% +5.8 points year on yearResults for Q1 of FY 12/2022Operating income:Operating income margin: ©2022 Core Concept Technologies Inc.42Earnings ReportEarnings ReportEarnings reportSales and profit grew considerably year on year.(net sales: +62.7%; operating income: +167.3%)Q1 of FY 12/2021Q1 of FY 12/2022Change% ChangeForecastNet sales1,693+1,061+62.7%10,40026.5%Outsourcing expenses Personnel expensesOther costsGross margin SG&AOperating incomeOrdinary incomeNet incomeGross profit marginOperating income margin Outsourcing expense rate9522906138923615216511123.0%9.0%56.3%2,7541,57934910871731040643031426.0%14.8%57.3%+626+59+47+65.8%+20.3%+77.7%+328+84.3%+73+31.0%+254+167.3%+264+159.9%+203+181.6%+3.1P+5.8P+1.1P—Unit: million yenProgress rate——-8528686028.2%——–47.7%49.5%52.3%©2022 Core Concept Technologies Inc.6Earnings ReportFactors in increase/decrease of operating incomeThanks to the growth in net sales, operating income rose considerably by 254 million yen or 167.3% year on year.[Million yen]IncreaseDecreaseTotal—-Operating income in Q1 of FY 12/2021Net salesOutsourcing expenses Personnel expensesRecruitment expensesOthersOperating income in Q1 of FY 12/2022©2022 Core Concept Technologies Inc.7Earnings ReportVariation in quarterly net salesSales are expected to remain flat from Q1 to Q2, and increase from Q3 to Q4.⚫In Q1 of FY 12/2022, sales of both support for DX and support for staffing of IT personnel increased YoY.FY 12/2020 saw a decline in performance in Q2 and Q3 amid the novel coronavirus pandemic, but the performance recovered in FY12/2021, showing healthy sales in Q3 and Q4.Many customers close their accounts in March, and the sales growth in Q2 tends to be smaller than that in Q1 due to an increase of inspections from April to March of the following year.Support for DXSupport for staffing of IT personnel⚫⚫[Million yen]3,0002,000Decline due to the novel coronavirus pandemic 1,389 1,211 1,330 1,000700 0688 Q1674 536 Q2640 689 Q31,603 1,693 1,750 770 895 1,000 2,385 1,293 1,971 1,108 833 797 863 1,092 749 Q2Q4Q1Q3Q420202021©2022 Core Concept Technologies Inc.82,754 1,389 1,364 Q12022Earnings ReportVariation in quarterly operating incomeOperating income margin tends to be high in 1Q and Q3 and low in Q2 and Q4.⚫In Q1 of FY 12/2022, operating income margin was as high as 14.8% owing to a large project with a high profit margin and the impact of an increase in personnel and recruitment expenses associated with mid-career hires that were pushed back to Q2.Since a lot of new graduates join our company in April, personnel expenses tend to increase significantly in Q2, resulting in a low operating income margin for that period.If a provision for year-end bonus is posted in Q4, it will cause operating income margin to decline.Operating income marginOperating income margin increased due to a large project with a high profit margin and the curtailment of mid-career recruitment expensesOperating income margin dropped due to new graduates & mid-career hires14.8%Operating income margin dropped due to a provision for year-end bonus 10.6%4.5%4.4%5.3%4.0%4.8%406 63 Q1-2.1%Q2-25 58 Q384 Q4209 Q3113 Q470 Q29.0%152 Q120%15%10%5%0%-5%Q1202220202021©2022 Core Concept Technologies Inc.9[Million yen]500⚫⚫4003002001000-100Earnings ReportNumber of employeesWe concentrate on recruitment activities, and the number of employees is steadily increasing.Number of Employees22 new graduates joined19 new graduates joined243 248 250 23 new graduates joined290 260 211 213 212 220 184 [Person]300250200150End ofMar.End ofJun.End ofSep.End ofDec.End ofMar.End ofJun.End ofSep.End ofDec.End ofMar.Apr. 1202020212022©2022 Core Concept Technologies Inc.10Earnings ReportResults by segmentBoth support for DX and support for staffing of IT personnel saw significant growth of sales and profit.Q1 of FY 12/2021Q1 of FY 12/2022Change% ChangeUnit: million yenNet salesSupport for DX Support for staffing of IT personnelGross margin Support for DX Support for staffing of IT personnelGross profit marginSupport for DX Support for staffing of IT personnelBacklog of ordersSupport for DX Support for staffing of IT personnel1,69379789538927711123.0%34.8%12.5%1,4456887562,754１,3641,38971750621026.6%37.1%15.2%2,2261,296929+1,061+567+494+328+228+99+3.1P+2.3P+2.7P+780+607+172+62.7%+71.1%+55.2%+84.3%+82.6%+88.7%—+54.0%+88.2%+22.9%©2022 Core Concept Technologies Inc.11Earnings ReportFinancial highlightTop line continued to grow at a high rate and operating income margin also increased.Variations in net sales and sales growthVariations in operating income and its margin⚫ We invested for growth from FY 12/2018 to FY 12/2020.We prioritized active recruitment and office relocation.⚫ Profit grew from FY 12/2021.⚫ In FY 12/2020, growth rate declined, due to the delay in order receipt and the postponement of project delivery due to the novel coronavirus pandemic.⚫ The impact of the novel coronavirus pandemic was lingering in FY 12/2021, but growth rate was recovered.⚫ In Q1 of FY 12/2022, results were on track to achieve the plan.15,00053.8%41.4%41.0%10,000CAGR of net sales37.3%*16.1%7,801 5,534 4,766 5,0003,371 2,754 1,50050%33.3%10,400 10%8.2%7.0%546 0%1,0003.9%3.5%3.3%5%852 -50%500406 0%133 165 180 Net salesNet sales growthOperating incomeOperating income margin0-100%02018201920202021Q1/202220222018201920202021Q1/20222022cumulativeplancumulativeplan*From FY 12/2017 to FY 12/2021©2022 Core Concept Technologies Inc.-5%12Earnings ReportOur sales composition by client company’s scaleGreatly increased transactions with large companies by actively giving proposals based on a track record of DX support. Q1 of FY 12/2021 cumulativeQ1 of FY 12/2022 cumulativeLess than 5 billion yen: 29%5 billion yen or larger: 5%500 billion yen or larger: 3%100 billion yen or larger: 33%50 billion yen or larger: 4%10 billion yen or larger: 26%Less than 5 billion yen: 21%500 billion yen or larger: 18%5 billion yen or larger: 3%10 billion yen or larger: 26%100 billion yen or larger: 26%50 billion yen or larger: 6%©2022 Core Concept Technologies Inc.13Earnings ReportNo. of clients in each sales rangeAs we increased continuous transactions with existing clients, the number of clients with high spend on our services is increasing. （No. of companies）Q1 of FY 12/2021 cumulative2021/1Q累計2022/1Q累計Q1 of FY 12/2022 cumulativeNo. of clients in each sales range201 155 147 119 45 31 3 5 2 4 100-500 million yen1～5億50-100 million yen5,000万円～1億10-50 million yen1,000万円～5,000万円Less than 10 million yen1,000万円未満計Total©2022 Core Concept Technologies Inc.14200150100500Earnings ReportBalance sheetRetained earnings increased thanks to strong performance, resulting in higher equity capital ratio.Unit: million yenEnd of FY 12/2021Q1 ofFY 12/2022ChangeMajor factor in increase/decreaseCurrent assetsCash & deposits Fixed assetsTotal assetsCurrent liabilitiesFixed liabilitiesNet assetsTotal liabilities and net assets3,0311,3417413,7731,6171941,9613,7733,1991,1487463,9451,4881802,2763,945Equity capital ratio52.0%57.7%+167(193)+4+172(129)(13)+314+172+5.7PDecrease mainly due to bonus payment and tax payment in MarchDue to increase in retained earnings©2022 Core Concept Technologies Inc.153Growth StrategyGrowth StrategyOur strategy: SummaryDomainStrategiesConcrete measuresIntroduction of usage fee income (Recurring-revenue business)Orizuru ECOrizuru MESExpansion of our industrial areasLogistics and warehousingMedical care (dental technique)Chemical & foodExpansion of our customer base and areasExpansion of transactions with leading system integratorsBusiness development in local areasImprovement in convenience (Ohgi)IT personnel supply and demand heat mapHigh-precision matching by AIBilling and payment managementArea expansionOsaka and FukuokaNagoya and SendaiOther local citiesSecuring of resourcesSmall and medium-sized IT enterprises and AI venturesExpansion of our industrial areasIT companies with strengths in areas consistent with the expansion of industry areas for support for DX©2022 Core Concept Technologies Inc.17Support for DX(Orizuru)Support for staffing of IT personnelPartner companies for supporting developmentM&A and alliancesGrowth StrategyMarket scale: Scale of the DX market and the business domain of our companyThe investment in DX is expected to grow considerably. We will expand our DX support business domain in the fields of traffic/transportation, distribution, and medical care, which have a high affinity for the manufacturing and construction fields. Industries/business fields2020 [100 million yen]Forecast for FY 2030 [100 million yen]Growth from FY 2020 [times]Traffic/transportationFinanceManufacturingDistribution/RetailMedical care/nursing careReal estateMunicipalitiesSales and marketingCustomer servicesOthers2,7801,8871,6204417312204091,5644103,75913,82112,7406,2115,4502,4552,1159704,9004,50080211,81451,9574.53.23.35.52.84.42.81.93.111.93.7Future priority fieldCurrent priority fieldFuture priority fieldFuture priority field*Source: Future Outlook for the Digital Transformation Market in 2022 produced by Fuji Chimera Research Institute, Inc. on January 13, 2022©2022 Core Concept Technologies Inc.18Growth StrategyMarket scale: Aggravated shortage of IT personnelWe are entering the age in which business competitiveness is determined by the capability of staffing IT personnel.Estimated number of IT engineers demanded and suppliedNo. of engineers supplied DeficiencyShortage of about 450,000 IT engineers381 398 364 432 415 449 314 326 338 351 304 261 220 1,6001,4001,2001,000800994 1,005 1,018 1,032 1,046 1,060 1,071 1,081 1,091 1,101 1,110 1,114 1,118 1,122 1,127 1,133 6002015202020252030©2022 Core Concept Technologies Inc.19Growth StrategyOur strategy: To enhance the functions of OrizuruTo expand the DX support domain by enhancing the functions of “Orizuru”To conduct business also in industries that have a high affinity for the manufacturing and construction industriesExpansion of our business domainReceipt and placement of ordersCurrent domainDesignIntegrated managementManufacturing/constructionseirtsudni tegrat foesaercn IManufacturingConstructionDistribution/logisticsFoodOtherB2B industriesMedical careEC(Targets)Construction, distribution, apparel, etc.(Features)・Automation of price estimation, business negotiation, contract conclusion, and follow-up activities・Marketplace・Prosthetic/orthodontic dentistry・Automation of design and processingOPC UA(Targets)Manufacturing, construction, logistics, MESand warehousing(Features)・Automation of planning, production, control, etc. through the PLM linkage・Automatic visualization of budgets, results, and KPI・Conveyance inside warehouses・TransportationLiquid quality measurement©2022 Core Concept Technologies Inc.20Growth StrategyOur strategy: To establish a platform with OhgiWe aim to establish a platform by providing “Ohgi” with client companies.OutsourcersOutsourceesDetails of projectsDetails of projectsBusiness companies and leading system integratorsProposalsCommissionsProposalsPartner companiesNeeds from outsourcersBusiness companies⚫ It is impossible to hire excellent engineers.⚫ They do not have the know-how to hire external engineers.Leading system integrators⚫ They want to hire engineers flexibly according to projects. (Sufficient number of engineers for a certain period)⚫ As they entrust many partner companies, it is difficult to manage projects.⚫ They want to hire engineers at appropriate prices (while curtailing outsourcing expenses).Charging modelNeeds from outsourceesMonthly fee per successful project × Commission rate × No. of monthsThis is not a recurring-revenue business, but if the number of successful projects on Ohgiincreases, the revenues from Ohgiwill become quasi-recurring.Small and medium-sized IT enterprises ⚫ It is difficult to acquire transactions.⚫ They want to increase the utilization rate of their engineers.⚫ They want to find projects in which their engineers’ skills can be utilized.⚫ They want to find profitable projects.©2022 Core Concept Technologies Inc.21Growth StrategyOur strategy: Pursuit of synergiesSynergy among support for DX, the Ohgi platform, and support for staffing of IT personnelSupport for DXOhgi platformSupport for staffing of IT personnelBuilding a mechanism for business expansion・Expansion of business domain by expanding Orizuru’s functions・Shift to a recurring-revenue business through Orizuru EC and MES・Expansion of scale by maintaining a balance between the number of projects and the number of engineers based on a supply-demand heat map (supply-demand situation of projects and personnel skills)・Aim for a quasi-recurring-revenue business scheme by retaining high quality human resourcesAfter DX is completed in-house, client companies transition to direct procurement of IT personnel.Business transactions and trust relationships have already been established.To acquire IT personnel staffing projects from existing clientsCustomers of support for DX start to use Ohgi.Customers of support for staffing of IT personnel start to use Ohgi.Cross-sellingBusiness transactions and trust relationships have already been established.Existing customers are not able to take up projects. (When regular employees cannot be assigned)To acquire DX projects from existing clients[New clients]・Web marketing/nurturing, lead acquisition through webinars・To promote referrals from partners such as Salesforce[Existing Customers]Activities for repeating orders from existing customers and approaches to other organizationsPromote Ohgi registration to existing partnersProvide high quality projects (matching the skills of their engineers) and high average spending (eliminating multiple margins)Area strategiesSince the majority of companies are currently located in Tokyo, we will increase the number of companies in the entire Tokyo metropolitan area, Osaka/Fukuoka (CCT office located), and Nagoya/Sendai (expansion to be considered).For regions other than the major cities, we are considering expansion through agencies or M&A.Expansion of clients and projectsPromotion of Ohgiplatform usageCommon policiesExpansion of partner companies for supporting IT developmentCommon policies©2022 Core Concept Technologies Inc.224AppendixAppendixCorporate profileCorporate nameCore Concept Technologies Inc. (CCT)To support client companies in DX and staffing of IT personnelBusinessdescriptionLocation11th floor of DaiyaGate Ikebukuro, 1-16-15 Minami-ikebukuro, Toshima-ku, TokyoRepresentativeTakeshi Kaneko, Representative Director, President, CEODate ofestablishmentSeptember 17, 2009Capital stock509,638,000 yen (as of March 31, 2022)Account closingmonthDecemberNo. of employees290 (as of April 1, 2022)Office locationsTokyo (headquarters), Osaka, and FukuokaTokyo Headquarters11th floor of DaiyaGate Ikebukuro, 1-16-15 Minami-ikebukuro, Toshima-ku, TokyoOsaka Office3rd floor of Dai-san Nakajima Bldg., 5-11-10 Nishi-Nakajima, Yodogawa-ku, Osaka-shi, OsakaFukuoka OfficeAcross Cube Hakataeki-mae, 3-4-25 Hakataeki-mae, Hakata-ku, Fukuoka-shi, Fukuoka©2022 Core Concept Technologies Inc.24AppendixMission, vision, and course of actionMissionCreate the Next-generation IT IndustryVisionRight AI, Right DX.In order to support and promote true digital transformation (DX) among clients and secure business competitiveness in the AI era to come, we will fulfill our valuable roles. (Right AI, Right DX.)Under this management vision, we are operating business with the aim of becoming an IT vendor for offering new values. ActionGuideline Think Big, Act Together.Our course of action is composed of the following:(1) Out-of-the-box, freewheeling thinking (Think Big), and (2) Cooperatively taking action while envisioning ideal business activities from the standpoint of customers (Act Together).©2022 Core Concept Technologies Inc.25AppendixRecognition of issues in the domestic system integration fieldIt is difficult for business companies to conduct DX by themselves. The involvement of many intermediary agencies makes each project uneconomical.OutsourcersOutsourceesInvolvement of many intermediary agenciesBusiness companiesredrOtroppuSLeading system integrators and consulting firmsSecond-tier/mid-sized IT vendorstroppuSredrOredrOMany intermediary agenciestroppuS3rd-tier or lower-tier small and medium-sized IT enterprisesFreelance engineersProblems business companies are facing⚫ Shortage of personnel who can proceed with DX⚫ They rely on leading system integrators and consulting firms for IT strategies and development.Problems small and medium-sized IT enterprises are facing⚫ The system is uneconomical, due to the involvement of intermediary agencies.⚫ Inefficiency of staffing of IT personnel (spending labor and time)⚫ Income inequality between engineers of leading system integrators and of small and medium-sized IT enterprises©2022 Core Concept Technologies Inc.26AppendixOur ideal state and strategiesSo that business companies can realize “in-house DX,” we will provide “reproducible DX methods and the DX function platform (“Orizuru”).”We will offer a system for enabling business companies to hire external IT engineers directly, to skip intermediary agencies.Our ideal state = Creating the next-generation IT worldOur strategiesBusiness companiesIn-house DX⇒ Each company will carry out DX independently and continuously.Means for DXTo provide “reproducible DX methods and a DX function platform,” so that clients can conduct DX by themselves⚫ “CCT-DX Method” for implementing DX without help from outside ⚫ “Orizuru” equipped with DX functions for each industry ⚫ (Current) We are focusing on manufacturing and construction industries. ⚫ (In the future) We will expand our business domain to include other industries.To offer a system for enabling business companies to hire IT engineers directly⚫ To provide client companies with “Ohgi,” a platform for staffingTo increase partners for supporting IT development to be registered in Ohgi⚫ (Current) Tokyo(In the future) Tokyo Metropolitan Area, Osaka, Fukuoka, Nagoya, and Sendai 3gnoma ygrenys fo tiusruPisegetarts©2022 Core Concept Technologies Inc.27Direct staffingDirect staffing of external IT personnel⇒ Utilization of external engineers based on a single-tier system with a clear chain-of-command structure Partners for supporting IT development・Provision of opportunities for engineers of small and medium-sized IT enterprises to flourish and improvement of their working environment・Enhancement of the competitiveness of partner companies for supporting developmentAppendixBusiness descriptionOur core business is to support DX and staff IT personnel.Support for DXWe support client companies in DX, based on “CCT-DX Method,” which is CCT’s original method for supporting DX, and “Orizuru,” a DX development base and an IoT/AI solution for streamlining the establishment and operation of systems.We provide hands-on support for clients in all processes, including the envisioning of an ideal state after DX, the verification of technologies, the development, operation, and maintenance of systems, and in-house DX. Support for staffing of IT personnelBy utilizing the know-how for implementing projects and managing teams, broad partnership for supporting IT development, and the capability of staffing IT personnel with “Ohgi,” which is a platform for staffing personnel, we support some functions of the HR sections, procurement sections, and project managers of various companies, leading system integrators, consulting firms, etc. on a one-stop basis. ClientsStrategySupport for DXSupport for staffing of IT personnelPromotion of DXStaffing of IT personnelSupport for DXTo increase our business domains we excel at one by oneSupport for staffing of IT personnelTo increase clients in the industries where IT engineers are in high demandSwift DX with OrizuruLarge-scale, speedy operations with OhgiDX development base for the manufacturing and construction industriesIn-house utilization of the platform for staffing IT personnelPartners for supporting IT developmentCooperation with partner companies that have engineers in various fields mainly in Tokyo ©2022 Core Concept Technologies Inc.28AppendixCharacteristics of support for DX: CCT-DX MethodUnique method for hands-on support for all processes of DX1. Ideal Post-DX EnvisioningWe will visually express the expected state of each client’s business after DX, how on-site business operations will change, how much DX will produce effects, etc. with “DX-ToBe Digest.”2. Technical Verification3. System DevelopmentWe will build an actual system and check whether business operations can be completed fully and smoothly after DX. With “Agile Joint Development” with client companies, we will repeat the development cycle stepwise in a short period of time.4. Maintenance/In-house DX SupportWe will train DX engineers in client companies through a series of processes shown left, so that client companies can carry out DX independently and continuously.ClientsRecognition of issuesInvestment decisionSharingof visionsGrasp the current situation and set visionsEvaluate technologies and develop prototypesAgile Joint DevelopmentDiscussionon specsDesignTestInstallationAgile developmentDevelopment of architecture for DXUI / UXBusiness ProcessAPI linkageDevice / IoTTrain personnel and support in-house DXOutcomesDX-ToBe DigestTechnological backupInitial IT systemDevelopment of a system for in-house DX©2022 Core Concept Technologies Inc.29AppendixCharacteristics of support for DX: OrizuruTo actualize DX swiftly at low cost by utilizing “Orizuru,” a development base for DX in the manufacturing and construction industriesProduct lineup and features for realizing DXTarget industriesManufacturing and construction industriesDX for designDX for procurementDX for manufacturing3D ViewerSearch for similar dataAutomatic estimationCollection and communication of dataAppearance inspectionTo streamline the design process by utilizing the AI for retrieving similar shapes of 3D models ・Indication of light-size CAD data with “3D Viewer”・Streamlining of business operations and automatic cost estimation with a “search for similar data” function based on AIThe hub that automatically acquires the conditions of on-site equipment and devices, quantifies them, and sends commands to the equipment and devices based on analysis results OPC UAPLM3D GraphicsAIIoTTo save labor for appearance inspection based on our original image processing technology Image processingOur forte and element technologies*PLM: Abbreviation of “Product Lifecycle Management.” It means summarizing a variety of technological information on the entire product lifecycle, and using it for improving AI: Abbreviation of “Artificial Intelligence.” Technology for conducting intellectual activities, such as identification, inference, and problem solving, on behalf of human beings.the capability of developing products and corporate competitiveness. 3D Graphics: A method of producing a 3D image on a plane by using 3D data with height, width, and depth. IoT: Abbreviation of “Internet of Thing.” It means linking the Internet with things that have been offline so far. CAD: Abbreviation of “Computer Aided Design.” It is a tool for supporting design and drawing with a computer. ©2022 Core Concept Technologies Inc.30AppendixSupport for staffing of IT personnel: Capability of staffing personnel by utilizing OhgiTo meet the needs for personnel demanded in each phase (processes, jobs, the number of workers, and periods) with “Ohgi” swiftlyPhases in system developmentOur full-time employees who joined our company as new graduatesPlanningTechnology verificationInstallationClient companiesSupportSupportSupportSupportProject leaderProject leaderProject leaderConsultantsAI engineersArchitectsOperation and maintenanceProject leaderStaffingStaffingStaffingStaffingPersonnel of partner companiesConsultantsAI engineersDevelopment teamUI/UX engineersTest teamOperation teamPlatform for staffing IT personnel“Ohgi “ is a platform for matching projects with IT personnel belonging to our partner companies for supporting development. Our company uses it for supporting clients in staffing personnel.©2022 Core Concept Technologies Inc.31AppendixSupport for staffing of IT personnel: Value of “Ohgi”By reducing the time for allocating staff to each project considerably, it is possible to swiftly give a proposal to each client company. Workflow in the conventional multi-outsourcing system 3 days to 1 week required for sending requests (1st-tier → 2nd-tier → 3rd-tier …) and proposals (… 3rd-tier → 2nd-tier → 1st-tier) RequestReceived& searchRequest1st-tier contractor2nd-tier contractor3rd-tiercontractor4th-tiercontractorReceived& searchRequestProposalProposal settledDocuments acceptedProposalMeetingrequestCheckMeetingrequestDocument checkProposalDocument checkCheck…MeetingrequestNotify sched.Schedule adjustmentRequestDocument checkMeeting coordinationMatching process with “Ohgi”3 days to 1 week1st-tiercontractorOhgiPartnersMatching with “Ohgi”10 min.Reduce the “matching” time,which takes 3 days to 1 week with the conventional method,by 99%Proceed to “meeting coordination”©2022 Core Concept Technologies Inc.32AppendixMajor clientsWe have supported clients in a broad range of fields, mainly the manufacturing and construction fields.Support for DXSupport for staffing of IT personnel*Existing clients account for over 80% of sales. Repeat orders from existing clients shore up steady growth.©2022 Core Concept Technologies Inc.33AppendixCharacteristics of our companySupport for all processes of DX, including the envisioning of an ideal state, system development, and in-house DX⚫ Employees and corporate organizations that possess the skills to reform business operations (consultation) and advanced IT technologies (AI) and possess consulting skills.) (By improving the strengths of the members who founded our company through recruitment and training, weorganized a team of engineers who are versed in on-site operations in the manufacturing and construction fields ⚫ “CCT-DX Method,” a unique method for hands-on support for all processes of DX ⚫ To customize and actualize DX swiftly at low cost based on “Orizuru,” which is equipped with standard functionsBusiness base that facilitates stable, significant growth and financial resilience⚫ Stable orders from leading system integrators⚫ Business leverage utilizing the network of partners for supporting IT development and financial resilience based on control of outsourcing expenses when the business environment worsens⚫ Business operation in the DX market and the IT personnel market, which are expected to grow ©2022 Core Concept Technologies Inc.34AppendixRegarding the handling of this material⚫ This material was produced by our company for the sole purpose of providing information, and not intended for soliciting the purchase or sale of securities of our company.⚫ The descriptions related to forecasts included in this material are based on our judgments and assumptions as well as currently available information, and include information on our business plans, market scale, competitors’ situations, industries, and growth potential. Accordingly, there is a possibility that actual results may differ significantly from explicit and implicit forecasts due to various risks and uncertainties.⚫ Unless otherwise specified, this document indicates financial data in accordance with the generally accepted accounting principles in Japan.⚫ Information on companies other than our company is based on publicly available information.©2022 Core Concept Technologies Inc.35