Q1 FY03/2025

Supplementary Materials for
Consolidated Financial Results
August 2, 2024

Dream
Incubator Inc. (stock code: 4310)
株式会社ドリームインキュベータ

SUMMARY
Structural reforms (establishing an earnings base in Business Production for stable growth,and harvesting investments appropriately in volatile Incubation) underway
Q1 FY03/2025 results● Business Production– Sales: JPY1.1bn (+15% YoY), operating loss: JPY0.32bn○ Sales amounted to only 15% of the full-year target, as sales tend to be weighted toward 2H and due tothe end of multiple large projects and delays in procedures caused by the diversifying earnings model○ Project proposals were up sharply YoY, and we intend to continue working to accelerate sales growthfrom Q2 onward● Venture Capital– Operating profit: JPY0.37bn○ Exited investment in two companies and recorded a capital gain

Progress of structural reforms● Business Production– Made some progress in hiring versus the plan; shifting focus from hiring to training personnel– Continued expanding and deepening the customer base while diversifying the earnings model toward building
a stable earnings base
● Incubation (Venture Capital + Business Investment)– Continued harvesting investments appropriately
Shareholder returns● Released the interim dividend forecast for FY03/2025 of JPY1.0bn (JPY106 per share)● Plan to determine and disclose the specific use of the remaining JPY3.0bn at the time of the interim results
announcement© Dream Incubator Inc. All Rights Reserved.

1

Q1 FY03/2025 Financial Results
Reference Materials● Company profile● Current medium-term management plan

© Dream Incubator Inc. All Rights Reserved.

2

Q1 FY03/2025 CONSOLIDATED P&L

Q1 FY03/2024

Q1 FY03/2025(JPYbn)(JPYbn)

1.17

1.62

38

● Business Production

0.96

1.10

15

● Venture Capital

0.21

0.52

148

-0.18

0.04

－

● Business Production*

-0.15

-0.32

－

● Venture Capital*

-0.02

0.37

－

Recurring profit

-0.19

0.05

－

Net income

-0.18

-0.07

－

Sales

Operating profit*

Segment operating profit = segment profit – companywide expenses

YoY change（％）© Dream Incubator Inc. All Rights Reserved.

3

BUSINESS PRODUCTION: SALES
Sales progress vs. plan

Quarterly sales*
Progress rate

(JPYbn)
8.0

15%
7.3

(JPYbn)
1.8
1.58

1.6
6.0

4.8
4.0

1.36

1.4
5.0

1.13

1.2
1.0

3.8
3.3

0.8
0.6

2.0

1.1

0.99

0.860.84
0.78
0.71
0.61
0.52

1.12

1.10

0.96

0.4
0.2

0.0
FY
Plan

FY
ActualFY03/2023
*

FY
Plan

FY
ActualFY03/2024

FY03/2022 figures exclude sales of transferred businesses.

FY
Plan

FY
ActualFY03/2025

0.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
FY03/2022

FY03/2023

FY03/2024

FY03/
2025

© Dream Incubator Inc. All Rights Reserved.

4

Reference

MONTHLY AND QUARTERLY SALES (CUMULATIVE)
Monthly sales

Confirmed portion of full-year sales* (at each point in time)(JPYbn)0.6(JPYbn)8.0

Sales target in the plan

0.5

FY 03/2025
6.0

FY 03/2024

0.4

5.03

FY 03/2023
FY 03/2022

0.3

4.21

4.0
3.09
2.49

0.2
1.21

2.0
1.23

0.1

1.12

3.02
2.62

2.31
2.53

2.14

3.84

2.36

1.85

1.25

0.46
0.0
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun

0.0

FY03/2022*

FY03/2023

FY03/2024

FY03/
2025

Of total orders, orders for which sales are recorded in the current fiscal year. FY03/2022 figures exclude sales of transferred businesses.

Orders.
receivedin the previous
year

1Q

2Q

3Q

4Q

© Dream Incubator Inc. All Rights Reserved.

5

NUMBER OF BUSINESS PRODUCERS*(No. of people)

196

200

179
155

150

Of which,

T&A: 60

Increase/decrease

Of which,

T&A: 50

100

End-Mar2024

Net
increase

End-Jun
2024

105

+14

119

T&A

50

+10

60

Total

155

+24

179

87

BP

Of which,

58

T&A: 17（excl. T&A）

50

0

*

Mar
2022
2022年

Mar
2023
2023年

Mar
2024
2024年

Jun
2024
2024年

3月末

3月末

3月末

6月末

Excludes employees dedicated to Incubation

End2025年
FY03/2025
3月末(計画)(Plan)© Dream Incubator Inc. All Rights Reserved.

6

PROJECT AIMED AT ATTRACTING AFFLUENT INBOUND TOURISTS
TO THE SAN-IN REGION
An initiative to diversify the earnings model
Overview:● Provide an end-to-end support to San-in Godo Bank, from devising inboundtourism strategies to attracting affluent global tourists– Develop high-value-added tour packages unique to the San-in region– Attract and sell to affluent tourists from around the world● Implement the project jointly with XPERISUS, an expert in the development andglobal sales of high-value-added travel experiences

Significance of the project:● Industry production● With this project as the starting point, plan to roll out similar projects across thenation and promote the development of a new business model for DI’s Business
Production

Earnings model for DI:● Fixed fees + performance-based fees

Expansion opportunities:● Horizontal expansion to other regions● Tourism infrastructure development© Dream Incubator Inc. All Rights Reserved.

7

CONCLUSION OF A BUSINESS PARTNERSHIP AGREEMENT WITH DENTSU SOKEN
An initiative to accelerate the expansion of Technology & Amplify (T&A)
Overview and significance of the partnership

Overview:● By combining the respective strengths of each company,

DI and Dentsu Soken will jointly provide a one-stop
service covering all areas from concept formation andstrategy planning to technology implementation

Significance for DI:● Increased opportunities to generate earnings by further

deepening collaboration with the Dentsu Group– In particular, accelerate and expand the scale of the

new service line, Technology & Amplify

Reference: Press release© Dream Incubator Inc. All Rights Reserved.

8

VENTURE CAPITAL: PORTFOLIO AND MARKET VALUE(JPY bn)

June 30, 2024

March 31, 2024
Book value 1)

Venture portfolio

Principal
Investment

0.4 （11co.）LP
investment
in funds 3)

2.5

Total

（6co.）

Market value 2)
2.8

Book value 1)
Sold：2co.4)

ー

2)
3)
4)

2.6

2.9 （17co.）

5.4

Excludes stocks that have been fully impaired and have no subsequent up-rounds, and stock options not subject to valuation(for stocks held in own funds, includes only the portion equivalent to DI’s stake)
Before taxes. Taxes are shown in parentheses (included in the value above).
Book value takes into account the amount of gains/losses. Market value is not calculated because the calculation method differs for each fund.
Includes partial sales

3.2

ー（6co.）（Same as Book value）

(0.7)

1)

0.4 （10co.）Market value 2)（Same as Book value）

3.0 （16co.）

5.8
(0.8)

© Dream Incubator Inc. All Rights Reserved.

9

CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2024

March 31, 2024
(Total assets: JPY17.4bn)

June 30, 2024
(Total assets: JPY16.6bn)

Liabilities
JPY2.2bn
Cash and deposits
JPY6.4bn(Major increase/decrease)

Cash and deposits
JPY4.6bn

Liabilities
JPY2.4bn

Net assets● Dividends for previous FY:
Short-term
Investment
assets*JPY5.3bn*-JPY1.2bn
Net assets
JPY15.1bn

Short-term
Investment
assets*JPY6.3bn

Venture capital
JPY3.4bn

Venture capital
JPY3.5bn

Other assets
JPY2.2bn

Other assets
JPY2.1bn

Joint money trust

Net assets
JPY14.1bn© Dream Incubator Inc. All Rights Reserved.

10

SHAREHOLDER RETURNS
Aim for total shareholder returns of JPY10.0bn during the medium-term management plan period
FY03/2023

FY03/2024

FY03/2025

Interimdividendーー

JPY1.0bn (forecast)Year-end
dividend

JPY2.0bn

JPY1.2bn

Undecided(JPY191.11/share)(JPY128/share)Sharebuybackー

JPY2.8bn(JPY106/share)

Total JPY3.0bn
Undecided● Of which, cancelled

JPY2.6bn*● Plan to allocate
JPY0.2bn** to stock
remuneration***for employees● Choose themethods for
returning profits,considering future
share price andliquidity

Plan to determine and disclose the undecided figures
at the time of the interim results announcement
*
**
***

Represents 930,784 shares (8.9% of total shares issued before cancellation as of March 31, 2024)
Represents 74,500 shares (0.7% of total shares issued before cancellation as of March 31, 2024)
Shares as a percentage of annual income: 10% for executive officers, 5% for senior managers and managing directors (from FY03/2025 onward)© Dream Incubator Inc. All Rights Reserved.

11

Q1 FY03/2025 Financial Results
Reference Materials● Company profile● Current medium-term management plan

© Dream Incubator Inc. All Rights Reserved.

12

OVERVIEW OF DREAM INCUBATOR (DI)Company profile

Corporate philosophy

Name

Dream Incubator Inc.

Credo

Established

June 1, 2000 (launch of operations)

Stock code

4310 (TSE Prime)

Head office

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

Capital*

JPY5.0bn

Employees*

227

Key
subsidiaries

Dream Incubator (Vietnam) Joint Stock Company
Next Rise Social Impact Fund Investment Limited Partnership
DI India Digital Investment FundManagement

Takayuki Miyake
Kyohei Hosono
Tetsuro Harada
Tsutomu Fujita
Yuriya Komatsu
Sakon Uda

Business*

MVV

Representative Director, President
Director, Executive Vice President
Director, Chairman of the Board,
Audit & Supervisory Committee member
Outside Director
Outside Director, Audit &Supervisory Committee member
Outside Director, Audit &Supervisory Committee member

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

As of March 31, 2024

History

1. Service (Strive to benefit clients and people)
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‒ Envision Beyond Boundaries of Areas‒ Formulate Beyond Boundaries of Customaries‒ Partner Beyond Boundaries of Organizations‒ Challenge Beyond Boundaries of Ourselves

2000

Launched operations with the aim of developing
investment/incubation and consulting businesses

2002

Listed on TSE Mothers Market

2005

Listed on TSE First Section

2007

Established Dream Incubator Vietnam in Ho Chi Minh City, Vietnam

2011

Acquired shares in ipet (current ipet Holdings) and made it aconsolidated subsidiary for incubation

2018

Formed DI India Digital Investment Fund

2021

Entered into a capital and business alliance with Dentsu Group
Formed Next Rise Social Impact Fund Investment Limited Partnership

2022

Changed stock listing to TSE Prime Market

2023

Sold all shares in ipet Holdings and two other subsidiaries toconcentrate resources on Business Production

2024

Enter into a capital and business alliance agreement with Yamaguchi
Financial Group© Dream Incubator Inc. All Rights Reserved.

13

DI’S VALUE ADDED: BUSINESS PRODUCTION (BUSINESS CREATION SUPPORT)
Support menu

Description

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

Business
Production● Support the development of business strategies, leveraging the technologies, resources, and otherstrengths of customer companies● Focused on designing business models, develop a framework for large projects through networking

and policy collaborations

Business
Production
Installation● In addition to strategy development, support business creation of customer companies through toTechnology &Amplify● To amplify the business value of customer companies through technology, provide comprehensive

execution and realization of results● Further support customer companies with resolving management issues they face in the process ofbusiness creation (related to organizational structure, personnel, infrastructure, etc.)
support from strategy development to conceptualization and execution● Support customers from the conceptualization stage, combining digital architecture and businessstrategies

Global SX*● Centered on Asia, support global business production of Japanese companies● In collaboration with JICA, develop and execute schemes for new public-private collaboration andsocial impact creation, primarily in emerging nations*

Sustainability Transformation© Dream Incubator Inc. All Rights Reserved.

14

Reference

BUSINESS CREATION PROJECTS UNDERTAKEN WITH MAJOR CORPORATIONS
A list of projects introduced on our homepage (links available)
Technology & Amplify

Strategy Consulting

Industry Produce

Client：Chubu Electric
Power

Client：A major
manufacturer● Supported the construction● Supported the optimizationof corporate R&D portfoliowith MUFG: Devised
concepts and strategies, andcreated mechanisms forindustrialization

Installation /Execution support

Installation /Execution support

Business Creationof a digital twin/metaverse
platform to resolve issues
facing SMEs

Client：TOYOTA

Client：OMRON● Provided support for the● Support for establishment

establishment of Toyota
Research Institute, Inc.
(TRI), the hub of Toyota’s
AI/robotics researchand operation of Innovation
Exploring Initiative
Headquarters (IXI), an
organization for new
business creation

Global SX

Installation /Execution support

Installation /Execution support

Client：MUFG

Client：JICA

Client：EXEO Group

Client：EXEO Group● Joint industry production● Strategy formulation and● In-team support for the● Promoting Purpose
formulation with an eye
toward transformation into
an innovative organization

execution support for social
impact investment inSoutheast and South Asia

Business Creation

M&A / FA / Financial Solutions

Innovation Promotion
Department (IBEX –Innovation Base of EXEO),
whose mission is to addresschanges in the businessenvironment over the
medium to long term
through innovation

Business Creation

Client：A major
manufacturer

Client：A major
manufacturer

Client：Metropolitan
Expressway Group● Comprehensive support for● Commercialization of● Development strategy

business creation in China,
including strategy
formulation, negotiations
with potential local partners,
and PoC design

technology, andaccompanying overseas M&A
supportformulation support for
InfraDoctor (infrastructure
maintenance & management
support system)© Dream Incubator Inc. All Rights Reserved.

15

DIRECTORS
Representative
Director, President

Takayuki
MiyakeDirector, Executive
Vice President

Kyohei Hosono
Director, Chairman of
the Board,
Audit & Supervisory
Committee member

Tetsuro Harada
Outside Director

Tsutomu Fujita● Joined DI after working at the Ministry of Economy, Trade and Industry (METI) and in the consulting industry● Established the concepts of “industry production” and “business production,” which focus on creating significant business

opportunities from social issues. Currently, Mr. Miyake is engaged in expanding the social impact of DI’s industry and businessproduction initiatives.

● During his time at the Japan Bank for International Cooperation, Mr. Hosono was engaged in various ODA projects, including

ODA for former Soviet Union countries, debt issues of developing countries, and ODA reforms.

● At DI, he is primarily responsible for global business and incubation, and also served as representative of a local subsidiary in

Vietnam. Currently, he is overseeing global expansion and corporate operations.

● Joined DI after serving in the Japan Maritime Self-Defense Force (JMSDF) and later working at Nippon Life Insurance● Mr. Harada was in charge of corporate consulting, venture (startup) investment and development, and corporate functions,

before he was appointed CEO and led structural reforms. Currently, as a Chairman of the Board, he supports governance andSuccession for Continued Growth.

● Held multiple key positions, including Executive Vice Chairman of Citigroup Inc, outside director of several companies, and Visiting

professor at School of Business Administration, Hitotsubashi University. Has over 30 years of experience in the securities market as
a Japanese equity strategist, winning the top spot in the Nikkei Analyst Rankings for five consecutive years from 2006 to 2010.
● Currently, Mr. Fujita is serving as representative director and president of Strategy Advisors, outside director of RIZAP Group, andOutside Audit & Supervisory Board Member of ITOCHU.

Outside Director,
Audit &
Supervisory
Committee member● After joining Nomura Securities, Ms. Komatsu spent over 20 years analyzing and investing in Japanese and Asian public andOutside Director,
Audit &
Supervisory
Committee member● Held key positions at McKinsey & Company, JAPAN POST HOLDINGS, and Tokyo Star Bank. Having served as outside director

Yuriya Komatsu

Sakon Uda

private companies at asset management firms in Japan and New York. Served as director of KADOKAWA DWANGO (now
KADOKAWA), director and CFO of DWANGO, and director of IA Partners.
● Currently, she concurrently holds the positions of outside director and chairperson of the Board at NTN and outside director of
Daicel.
and chairman of the Board at EBARA, Mr. Uda possesses extensive knowledge and experience in both consulting andcorporate management.
● Currently, he serves as outside director and chairman of the Board at Hokkoku Financial Holdings, outside director of Pacific
Consultants, and outside director of Ichigo.
© Dream Incubator Inc. All Rights Reserved.

16

CORPORATE MISSION

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© Dream Incubator Inc. All Rights Reserved.

17

Q1 FY03/2025 Financial Results
Reference Materials● Company profile● Current medium-term management plan

© Dream Incubator Inc. All Rights Reserved.

18

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

Business Production

Expand ourteam
Expandcollaborations

Business
Production
Industry
Production

Business
Production
Installation

Global SX

Expandfunctions● Further strengthen the Business Production platform● Enhance profitability by investing in related and peripheral businesses

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

Incubation© Dream Incubator Inc. All Rights Reserved.

19

MAINTAIN BALANCE BETWEEN GROWTH INVESTMENT TOWARD ENHANCINGCORPORATE VALUE AND SHAREHOLDER RETURNS
As we transition from NAV-based to P&L-based management, we will be resuming shareholder
returns.
Growth investment (expansion of functions):
Grow profits

Shareholder returns: Increase EPS and PER

Disciplined investment (cost effectiveness)

Based on profits from stable growth in P&L andharvested funds

1) Further strengthen our Business Production
platform● Invest in recruitment and HR development● Invest in infrastructure to raise productivity

Harvest appropriately

BalanceIncubation(harvests)2) Enhance profitability by investing in related
and peripheral businesses of Business
Production● Invest to bolster capabilities and expand

revenue opportunities, etc.

● Anticipated ROIC* > 12%*

Net income ÷invested capitalBusiness
Production(profit)

Returned toshareholders
except for funds
for growthinvestment andrequired cashflow
Dividend from
Business
Production© Dream Incubator Inc. All Rights Reserved.

20

FY03/2025 FORECAST FOR BUSINESS PRODUCTION
Compared with the medium-term plan targets, revised up the sales target while lowering the profit
targetMedium-term
profit plan

FY03/2025 forecast
Sales (JPYbn)

7.3

Reasons for discrepancy
5.9（FY03/2024 results: 5.0)

Personnel (headcount)

196● Pursue further expansion of115

business scale with an eye tolonger-term growth（FY03/2024 results: 155)

Net income
0.5
attributable to owners（FY03/2024 results: 0.04)
of parent (JPYbn)
EPS (JPY)*60（FY03/2024 results: 4)*

EPS figure for the medium-term profit plan is based on the total number of shares issued as of March 31, 2022,
and for the FY03/2025 forecast, on the total number of shares issued as of March 31, 2024, excluding treasury shares.

1.0● Time required before sales

102

growth can match the personnel
increase, with the impact of
upfront expenditures remaining
to some degree© Dream Incubator Inc. All Rights Reserved.

21

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 of
future 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 decisions based on their own judgement. The Company accepts
absolutely no responsibility for losses arising from the use of these materials.

© Dream Incubator Inc. All Rights Reserved.

22

The Business Producing Company