Q1 FY03/2024

Supplementary Materials for
Consolidated Financial Results
August 1,2023
Dream Incubator Inc.
(Stock Code: 4310)
本資料は機密性の高い情報や第三者の権利に関連しうる情報を含んでおり、開示は貴社内に限定され、また、使用目的もご依頼の際に合意した目的に限定されます。外部への開示や、目的外の使用を検討される場合は、事前に当社にご相談のうえ、書面の同意を取得していただくよう御願いいたします。

SUMMARY
Q1 results● Business Production– Sales: JPY0.96bn (+11% YoY)
– Operating loss: JPY0.15bn○ Increase in personnel expenses outpaced sales growth, but we aim to achieve fullyear net income target of JPY0.6bn by increasing sales going forward● Venture Capital– Operating loss: JPY0.02bn○ Sold one company in Q1○ From Q2 onward, we plan to continue promoting sales (i.e., exit) at optimal timing
Expansion of service lineup● Technology & Amplify (T&A), a new practice, is gradually starting to expand, withpromising signs of further growth
Share buyback● Acquisition status as of July 31, 2023
– Number of shares acquired: 465,000 shares (31% of the upper limit of 1,500,000)– Acquisition price: JPY1.25bn (42% of the upper limit of JPY3.0bn)● Plan to cancel all acquired shares, except those earmarked for stock-based compensation
for some executives and employees, by the time of full-year results announcement© DI 2023 － ALL RIGHTS RESERVED.

11. Q1 FY03/2024 Financial Results

2. Reference Materials1）Company profile
2）Current medium-term management plan

© DI 2023 － ALL RIGHTS RESERVED.

2

Q1 FY03/2024 CONSOLIDATED P&L(EXCLUDES BUSINESSES SOLD IN FY03/2023)● Business Production– Sales continued to expand– Posted an operating loss as higher personnel expenses resulting fromaggressive hiring outpaced sales growth● Venture Capital: Sold one company(JPYbn)

Q1
FY03/2023

Q1FY03/2024

YoYchangeSales

1.06

1.17

10.3%

Business Production

0.86

0.96

11.6%

Venture Capital

0.20

0.21

4.6%

Operating profit

0.21

-0.18

-

Business Production*

0.15

-0.15

-

Venture Capital*

0.05

-0.02

-

Recurring profit

0.25

-0.19

-

- **

-0.18

-

Net income***

Segment operating profit = segment profit – companywide expenses
No figure provided for Q1 FY03/2023, as net income for FY03/2023 was calculated based on all businesses, including those already sold© DI 2023 － ALL RIGHTS RESERVED.

3

Q1 FY03/2024 CONSOLIDATED P&LReference(INCLUDES BUSINESSES SOLD IN FY03/2023)

Q1 FY03/2023 results included the impact of then-consolidated ipet Holdings
and extraordinary income of JPY0.54bn from the sale of two subsidiaries(JPYbn)Q1
FY03/2023

Q1FY03/2024

YoYchange

Sales

8.98

1.17

-86.9%

Business Production

0.86

0.96

11.6%

Venture Capital

0.20

0.21

4.6%

Pet Lifestyle (ipet)

7.91--Operating profit

0.35-0.18-

Business Production

0.15-0.15-Venture Capital

0.05-0.02-Pet Lifestyle (ipet)

0.13--

Recurring profit

0.42-0.19-0.54--0.72

-0.18

-

Extraordinary income(Gain on sale of shares of subsidiaries and associates)

Net income© DI 2023 － ALL RIGHTS RESERVED.

4

BUSINESS PRODUCTION:OPERATING PROFIT/LOSS (YOY COMPARISON)
Cost increase resulting from ongoing aggressive hiring temporarily preceded sales
growth(JPYbn)
0.3
0.2

0.10
0.15

Of which,
T&A: 0.05

0.1
Of which,
T&A: 0.14-0.31-0.1-0.2*Operating profit
in Q1 FY03/2023

Sales growth

Increase inpersonnel andhiring expenses

Mainly floor expansion, capex, and project outsourcing expenses© DI 2023 － ALL RIGHTS RESERVED.

-0.10

-0.15

Increase in otherexpenses*

Operating loss
in Q1 FY03/2024
5

BUSINESS PRODUCTION: SALES
Sales continued to grow, up 11% YoY and reaching 20% of the full-year target
Sales progress vs. plan(JPYbn)
70
7.0(JPYbn)Progress rate

20%6.060

5.9

1.13

+11%0.99

1.0100.78

0.88

3.3

0.96

0.86 0.84

0.71

3.8
0.6
6 0.523.030

0.610.44202.00.96

101.00
通期
FY
Plan
計画

通期
FY
Actual実績

FY03/2023*

YoY

121.24.8505.04.040

Quarterly sales*

通期
FYPlan計画

1Q
Q1
実績
ActualFY03/2024

Excludes sales in businesses sold

20.2

通期
FYPlan計画

通期FY
Actual
実績

0Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
FY03/2022 FY03/2022FY03/2022 FY03/2022FY03/2023 FY03/2023FY03/2023FY03/2023 FY03/2024

22/3 22/3 22/3 22/3 23/3 23/3 23/3 23/3 24/3
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1QFY03/2025© DI 2023 － ALL RIGHTS RESERVED.

6

BUSINESS PRODUCTION:

NUMBER OF BUSINESS PRODUCERS

Number of business producers*(No. of people)

140

120
1201008780

Of which,
T&A: 1760

Increase/decrease

Of which,
T&A: 27

58

40

End-Mar2023

Net
End-Junincrease 2023

(excl. T&A)

BP70

23 **

93

T&A

171027Total

87

33

120

200
FY03/2022
実績

FY03/2023
実績

Q1 FY03/2024
実績…

We will continue hiring talented individuals to increase growth potential in the next fiscal year onward⚫
Aim to achieve full-year net income target of JPY0.6bn by increasing sales going forward***

Excludes employees dedicated to Incubation
Includes two employees transferred from Incubation © DI 2023 － ALL RIGHTS RESERVED.

7

LAUNCH OF TECHNOLOGY & AMPLIFY (T&A)
Significance and aim of T&A①②Amplify(Value Amplification)

Create Businessesand Change Societies③② Turn concepts from0 to 1

③ Transform 1 into 10and even 100

Industry Production
Business Production

Business Production
Installation

Technology& Amplify

Established initialstructure

Intend to get the business ontrack and expand the scope

Hired executives
and establishedinitial structure⚫ Six executives/
managingdirectors

Promoting expansion of themember base● 27-person structure as of June30
– +10 from March 31

Began making
proposals tocustomers inearnest

Orders in full swing● Sales of JPY0.05bn in Q1● Launch took some time, butorder forecast on an uptrend
since June
– Orders also include projects
connected to BP

Orders

① Conceptualize
from 0FY03/2024 (as of Q1)

Recruitment

Innovation

FY03/2023
Focus

Businesses created through Business
Production are amplified through technology● Integration and collaboration withexisting Business Production team

StatusDemand is robust, showing promising signs of growth© DI 2023 － ALL RIGHTS RESERVED.

8

VENTURE CAPITAL: PORTFOLIO AND MARKET VALUE● Sold one company● No major change in the book or market value(JPYbn)March 31, 2023

June 30, 2023

Market value 2)

Book value 1)

Market value 2)Japan

0.1 (9 co.)

1.4

0.1 (8 co.)

1.1

India

1.8 (21 co.)

6.5

2.0 (21 co.)

6.6

Other

0.0 (1 co.)0.3

▲Sold onecompany

0.0 (1 co.)

0.3

Total

2.0 (31 co.)8.2(no investment/impairment)

2.1 (30 co.)8.1

LP investment infunds 4)

2.4 (6 co.)

2.4

2.5 (6 co.)

2.5

Venture Capital

4.5 (37 co.)

10.7
（1.7）

4.7 (36 co.)10.7

Core venture
portfolio 3)

Book value 1)

1） For investees of in-house funds, only DI’s stake is shown.
2） Before taxes. Taxes are shown in parentheses (included in the value above).
3） Excludes shares in companies that have been impaired and have no subsequent up rounds, and stock options not subject to valuation.
4） Book value takes into account the amount of gains/losses. Market value is not calculated because the calculation method differs for each fund.
© DI 2023 － ALL RIGHTS RESERVED.

（1.7）

9

CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2023
March 31, 2023
(Total assets: JPY31.3bn)

Cash and deposits
JPY10.3bn

Liabilities
JPY9.4bn

June 30, 2023
(Total assets: JPY21.9bn)(Major increase/decrease)
Liabilities● Income taxes payable: -JPY6.1bn

Short-term
investment
assets*
JPY13.8bn*Net assets● Dividends: -JPY2.0bn● Share buyback: -JPY0.7bn
Net assets
JPY21.9bn

Cash anddeposits
JPY9.0bn
Short-term
investmentassets*
JPY5.3bn

Venture capital
JPY5.4bn

Venture capital
JPY5.6bn

Other assets
JPY1.7bn

Other assets
JPY1.9bn

Joint money trust© DI 2023 － ALL RIGHTS RESERVED.

Liabilities
JPY2.6bn

Net assets
JPY19.3bn

10

STATUS OF SHARE BUYBACK
Shareholder return policy for FY03/2024: Return over JPY4.0bn to shareholders,primarily in the form of share buybacks
Matters resolved regarding share buyback (May 11)● Total number of shares to be acquired: 1,500,000 (upper limit)
15% of total shares issued (excl. treasury stock)● Total acquisition price: JPY3.0bn (upper limit)● Acquisition period: May 12, 2023–March 31, 2024
Acquisition status as of July 31, 2023
● Number of shares acquired: 465,000 shares (31% of upper limit)● Total acquisition price: JPY1.25bn (42% of upper limit)
Policy after acquisition● Plan to cancel all shares, except those earmarked for stock-based compensation
for some executives and employees, by the time of full-year resultsannouncement© DI 2023 － ALL RIGHTS RESERVED.

111. Q1 FY03/2024 Financial Results

2. Reference Materials1）Company profile
2）Current medium-term management plan

© DI 2023 － ALL RIGHTS RESERVED.

12OVERVIEW OF DREAM INCUBATOR (DI)Name

June 1, 2000 (launch of operations)Company profile

Stock
code

4310 (TSE Prime)

Headoffice

Tokyo Club Building, 4F
3-2-6 Kasumigaseki, Chiyoda-ku, Tokyo, Japan

Capital*

JPY5.0bn

Employees*

143

Key
subsidiaries

Dream Incubator (Vietnam) Joint Stock Company
Next Rise Social Impact Fund Investment LimitedPartnership
DI India Digital Investment Fund
Takayuki Miyake

Representative Director, President

Kyohei Hosono

Director, Executive Vice President

Tetsuro HaradaDirector, Chairman of the Board

Tsutomu Fujita

Outside Director

Soichiro Uno

Outside Director, Audit & Supervisory Committee member

Yuriya Komatsu

Outside Director, Audit & Supervisory Committee member

Sakon Uda

Outside Director, Audit & Supervisory Committee member

Business Business Production (business creation support,growth strategy consulting, etc.)*

As of March 31, 2023

Credo

2. Create (Generate profit by yielding added value)
3. Grow (Contribute to develop a better society)4. Share (Harmonize with society for mutual prosperity)
Mission: Create Businesses and Change Societies
Vision: Become the First Choice of Challengers
Value: Advance Beyond Boundaries.

MVV‒ Envision Beyond Boundaries of Areas‒ Formulate Beyond Boundaries of Customaries‒ Partner Beyond Boundaries of Organizations‒ Challenge Beyond Boundaries of Ourselves

2000

2002
2005
2007

History

Management

Corporate philosophy

Established

1. Service (Strive to benefit clients and people)

Dream Incubator Inc.

2011
2018
2021

2022
2023

© DI 2023 － ALL RIGHTS RESERVED.

Launched operations with the aim of developinginvestment/incubation and consulting businesses
Listed on TSE Mothers Market
Listed on TSE First Section
Established Dream Incubator Vietnam in Ho Chi
Minh City, Vietnam
Acquired shares in ipet (current ipet Holdings) andmade it a consolidated subsidiary for incubation
Formed DI India Digital Investment FundEntered into a capital and business alliance withDentsu Group
Formed Next Rise Social Impact Fund Investment
Limited Partnership
Changed stock listing to TSE Prime Market
Sold all shares in ipet Holdings and two othersubsidiaries to concentrate resources on BusinessProduction13DI’S VALUE ADDED: BUSINESS PRODUCTION(BUSINESS CREATION SUPPORT)
Support menu

Description● With the aim of resolving social issues through business, support customers’ review of businessIndustry
Production

Business
Production
Business
Production
Installation
Technology &Amplify

creation potential, starting with the industry outlook● Design new concepts, with boundary-defying ideas that can change existing rules, throughdiscussions with government bodies and other organizations● Support the development of business strategies, leveraging the technologies, resources, andother strengths of customer companies● Focused on designing business models, develop a framework for large projects throughnetworking and policy collaborations● In addition to strategy development, support business creation of customer companies throughto execution and realization of results● Further support customer companies with resolving management issues they face in the processof business creation (related to organizational structure, personnel, infrastructure, etc.)● To amplify the business value of customer companies through technology, provide

comprehensive support from strategy development to conceptualization and execution● Support customers from the conceptualization stage, combining digital architecture andbusiness strategies● Centered on Asia, support global business production of Japanese companies

Global SX**

Sustainability Transformation● In collaboration with JICA, develop schemes for new public-private collaboration and social

impact creation, primarily in emerging nations© DI 2023 － ALL RIGHTS RESERVED.

14

EXECUTIVES
Takayuki Miyake
Representative Director, President

Kyohei Hosono
Director, Executive Vice President● After his time at the Ministry of Economy, Trade● At Japan Bank for International Cooperation,and Industry (METI), where he developed aventure capital program, oversaw thedevelopment of a range of policies within theMinistry, including international energy policies,
and formulated laws and regulations, he entered
the consulting industry.

● To realize DI’s founding philosophy (create 100

companies like Sony and Honda), which left much
impression on him, Mr. Miyake established theconcept of “industry production” and “businessproduction,” focused on creating businesses
rooted in efforts to address social issues.

● He co-authored Business Production Strategies toCreate 300 Billion Yen Business and The Road toSuccess in Business Production to Create 300 Billion
Yen Business (PHP Research Institute); co-authoredCreating the Future through Industrial Production:
How to Think to Create New Businesses One after
Another (Nikkei BP); and authored Empathy xDigging Deep Is the Strongest Business Skill (PHPResearch Institute).

he was involved in ODA for former Soviet
Union countries, efforts to resolve debt
issues of emerging nations, and ODA
reforms.

● Mr. Hosono joined DI because he wasattracted to the Company’s business model
encompassing both strategic consulting andincubation.

● At DI, he was mainly in charge of global

business and incubation. While in Vietnam,
he supported global expansion of largecompanies, promoted investments in local
companies, and experienced the ordeal ofleading the revitalization of a listed local
investee. Currently, he is involved in global
business production to support Japanesecompanies striving to resolve social issues
facing emerging nations, and he is also incharge of HR, finance, accounting, and IR asa corporate officer.
© DI 2023 － ALL RIGHTS RESERVED.

Tetsuro Harada
Director, Chairman of the Board● While undergoing sonar operator training fornaval vessels in the Japan Maritime Self-Defense
Force in Etajima, Mr. Harada witnessed thedevastation brought by war to Hiroshima and thecity’s recovery from it. Driven by his desire tocontribute to the industrial development thatpropelled this recovery, he transitioned to theprivate sector.

● At Nippon Life Insurance, he was engaged infinancial planning, loan sales planning, and HRplanning.

● Mr. Harada joined DI shortly after its founding,

after learning about the Company’s purpose offostering new businesses and new industries. He
was engaged in strategic consulting, top
management development, and investment andincubation for a range of major companies in IT,
telecommunications, manufacturing, general
trading, wholesale, retail, construction, etc. Afterleading structural reforms as CEO, he becamechairman of the Board and supports theCompany’s succession for continued growth.

15DI ＝ The Business Producing Company

Mission: Create Businesses and Change Societies
Vision:Become the First Choice of Challengers

Value:

Advance Beyond Boundaries.
‒ Envision Beyond Boundaries of Areas‒ Formulate Beyond Boundaries of Customaries‒ Partner Beyond Boundaries of Organizations‒ Challenge Beyond Boundaries of Ourselves© DI 2023 － ALL RIGHTS RESERVED.

16

1. Q1 FY03/2024 Financial Results

2. Reference Materials1）Company profile2）Current medium-term management plan

© DI 2023 － ALL RIGHTS RESERVED.

17

DIRECTION THAT DI INTENDS TO TAKE
Incorporate investment assets to further strengthen Business Production
Expand service lineup

Expand our team
Expandcollaborations

Expandfunctions

Industry
Production

Business
Production
Global SX

Business
Production
Installation● Further strengthen our Business Production platform● Enhance profitability by investing in related andperipheral businesses

Integrate assets (harvested funds/capabilities) byincorporating them into Business Production

Incubation© DI 2023 － ALL RIGHTS RESERVED.

18

MAINTAIN BALANCE BETWEEN GROWTH INVESTMENT TOWARD
ENHANCING CORPORATE VALUE, AND SHAREHOLDER RETURNS
As we transition from NAV-based to P&L-based management, we will
be resuming shareholder returns.
Growth investment: Improve profitability(Expand functions)Shareholder returns: Improve EPS and PER
Balance

Disciplined investment(cost effectiveness)

Based on profits from stable growth in P&L
and harvested funds(1) Further strengthen our Business
Production platform

Realized appropriately● Invest in recruitment and HRdevelopment● Invest in infrastructure to raise

Incubation(Harvests)

productivity(2) Enhance profitability by investing in
related and peripheral businesses ofBusiness Production● Invest to bolster capabilities, expandBusinessProduction(Profit)revenue opportunities, etc.

● Estimated ROIC*＞12%*Net income ÷ invested capital© DI 2023 － ALL RIGHTS RESERVED.

Returned toshareholders
except for
funds forgrowthinvestmentand required
cash flow
Dividend
fromBusinessProduction

19

MEDIUM-TERM PROFIT PLAN (FY03/2023–FY03/2025）
Net income from Business Production ＋ Potential upside of harvests from Incubation
Net incomeattributable toparent company
shareholders*＋ JPY11.0bn (unrealized gains after tax)***(JPYbn)Incubation(Harvests:Upside)

1.0
0.3
FY03/2023

FY03/2024

FY03/2025

3.3

4.8

5.9

Personnel(headcount)

70

93115

EPS (JPY)**

3156

102

Sales(JPYbn)

*
**
***

0.6

Simplified calculation of recurring profit × tax rate of 30%
Calculation assumes number of shares outstanding as of end-March 2022
As of end-March 2022
© DI 2023 － ALL RIGHTS RESERVED.

Business
Production(Base)

20

DISCLAIMER

These materials contain forward-looking statements pertaining to forecasts
and future strategies, which are based on information available to theCompany at the time the materials were prepared. These statements are notguarantees that targets and forecasts will be reached, nor an assurance offuture operating results. Future performance may vary substantially due tochanges in the operating environment, downturns in performance at investee
companies, share price fluctuations in the markets for financial products, andother factors.

Also, the content of these materials may change without notice. People using
these materials are advised to refer also to other sources of information andmake any decisions based on their own judgment. The Company accepts
absolutely no responsibly for losses arising from the use of these materials.

© DI 2023 － ALL RIGHTS RESERVED.

21The Business Producing Company