Q3 FY03/2024

Supplementary Materials for
Consolidated Financial Results
February 1, 2024

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

Q3 RESULTS SUMMARY AND STATUS OF STRUCTURAL REFORMS
SUMMARY
Q3 results:
Business Production continued to expand, while Venture Capital booked impairment losses in six companies● Business Production:– Sales: JPY3.45bn (+28% YoY); operating loss: JPY0.17bn○ Despite continued sales growth, expansion has yet to match the increase in hiring● Venture Capital:– Operating loss: JPY0.91bn○ Sold one company. Posted impairment losses in six companies (nine companies total) due to prolonged
weak sentiment in the financing market
Progress of structural reforms (establishing an earnings base in Business Production for stable growth, andharvesting investments appropriately in the volatile investment business)● Business Production: Continuing to steadily sow the seeds for rapid future growth– Securing many talented personnel○ Expect to have about 160 employees, in contrast to the plan for FY03/2024, which called for 93– Expansion of customer base and diversification of themes○ Especially, increase in orders with new service, Technology & Amplify (T&A)● Investment business: Although FY03/2023 saw the recording of significant gains on sale, impairment losses toexceed gains on sale in FY03/2024
Shareholder returns● In addition to the share buyback of approximately JPY2.8bn, we plan a special year-end dividend ofapproximately JPY1.2bn (JPY128 per share) for FY03/2024©2024 Dream Incubator Inc. All Rights Reserved.

1

Q3 FY03/2024 Financial Results
Reference Materials● Company profile● Current medium-term management plan

©2024 Dream Incubator Inc. All Rights Reserved.

2

Q3 FY03/2024 CONSOLIDATED P&L
Excludes businesses sold in FY03/2023

Sales

Q3 FY03/2024(JPYbn)(JPYbn)YoY change（％）

4.61

3.78-18● Business Production

2.70

3.4528● Venture Capital

1.91

0.33

-83

1.10ｰ1.08－● Business Production*

0.30-0.17－● Venture Capital*

0.80

-0.91

－

Recurring profit

1.13-1.11－

Net income－**

-1.03

－

Operating profit***

Q3 FY03/2023

Segment operating profit = segment profit – companywide expenses
No figure provided for Q3 FY03/2023, as net income for FY03/2023 was calculated based on all businesses, including those already sold©2024 Dream Incubator Inc. All Rights Reserved.

3

BUSINESS PRODUCTION: SALES
Sales progress vs. plan

Quarterly sales*(JPYbn)(JPYbn)Progress rate

7.0

72%

6.0

5.9

4.8

5.0
4.0

1.4

3.8

1.13

1.2

0.99

1.0
3.45

3.3

1.36

0.8

3.0

0.6

2.0

0.71

0.78

1.12
0.96

0.86 0.84

0.61
0.52

0.4

1.0

0.2

0.0*

通期 通期
FYFY
Plan
Actual計画 実績

3QPlan計画

Q3Actual
実績

通期 FY
通期FYPlan計画 Actual
実績FY03/2023

FY03/2024

FY03/2025

Excludes sales in businesses sold

通期FY0.0
1Q
1Q Q2
2Q 3Q
Q1 2Q
Q2 3Q
Q3 4Q
Q4 1Q
Q3Q1
Q2
Q3
Q4
Q1 2Q
Q2 3Q
Q3 4Q
Q4 Q1
FY03/2022

FY03/2023

FY03/2024©2024 Dream Incubator Inc. All Rights Reserved.

4

BUSINESS PRODUCTION: CONTINUED TO SECURE MANY TALENTED PERSONNELNUMBER OF BUSINESS PRODUCERS*(No. of people)

160

145

140
Of which,
T&A: 43120

Increase/decrease
1008780
60

58

End-Mar2023

Netincrease

End-Dec20237032 **102T&A

172643

合計8758145

Of which,
T&A: 17BP（excl. T&A）

40
200
End22/3期
FY03/2022
期末***Excludes employees dedicated to Incubation
Includes two employees transferred from Incubation

End23/3期
FY03/2023
期末

FY03/2024
24/3期(end-Dec)
12月末時点©2024 Dream Incubator Inc. All Rights Reserved.

5

BUSINESS PRODUCTION: DESPITE CONTINUED SALES GROWTH,
EXPANSION HAS YET TO MATCH HIRING
Year-on-year comparison of quarterly sales and personnel and hiring expenses(JPYbn)Q1 (Apr–Jun)

Q2 (Jul–Sep)

Q3 (Oct–Dec)+0.36
Net+0.29
Increase insales

＋0.07
+0.10
＋0.04

Increase inpersonnel andhiring expenses

-0.21

-0.25
-0.31

-0.29
©2024 Dream Incubator Inc. All Rights Reserved.

6BUSINESS PRODUCTION: FULL-YEAR SALES EXPECTED TO EXCEEDMEDIUM-TERM PLAN
Confirmed portion of full-year sales*(at each point in time)Monthly sales(JPYbn)(JPYbn)

0.6

6.0

24/3期
FY03/2024
FY03/2023
23/3期

0.5

5.0

0.4

4.0

FY03/2022
22/3期

Sales target in themedium-term plan
4.21
3.84
3.090.3

3.0

3.02

2.31
0.2

2.0

2.53

2.14

1.0

1.25

1.12
0.46

AprMayJunJulAug
Sep
Oct
Nov
Dec
JanFebMar
AprMayJunJulAug
Sep
Oct
Nov
Dec
JanFebMar
AprMayJunJulAug
Sep
Oct
Nov
Dec

0.0
FY03/2022
*2.62

1.85

1.23
0.1

2.36

FY03/2023

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

FY03/2024

0.0
Orders received
前期受注済
in theprevious year

1Q

2Q

3Q

4Q

©2024 Dream Incubator Inc. All Rights Reserved.

7

PROJECT CASE STUDIES
Measures to prevent unauthorized resale of tickets
using My Number Card

JICA×DI launches next generation socialentrepreneurship development project

Overview

Overview● Demonstration of using My Number Card to verify a person’s● We have started conducting investigations on behalf of JICA for theidentity at the time of ticket purchase and entry, thereby
potentially preventing mass purchases through multiple accounts
and high-priced fraudulent reselling.
– A demonstration experiment is scheduled to be conducted atthe “38th Mynavi Tokyo Girls Collection 2024 Spring/Summer”
event.

establishment of the JICA Social Innovator Hub (tentative name)● The new Social Innovator Hub aims to address social challenges

and promote sustainable development through the cultivation ofindividuals with knowledge and experience in social
entrepreneurship, as well as the creation of a platform for businessco-creation.

● Results and insights obtained from a pilot experiment aimed at

reducing workload in the entertainment industry, which has been
carried out in collaboration with the Digital Agency since
September 2023, will also be fully utilized.
Identity verification points in ticket distribution

Using JPKI*
1

Primarydistribution
1

Secondarydistribution

Tertiarydistribution

Purchase
2

Sale

Identification of visitors- Only for My Number Card
pre-sale lottery ticket purchasers

Purchase×Sale
3

2
Entry

Identification ofprimary purchaser- Only for My Number Card
pre-sale lottery applicants

3
Entry…

Secondary distribution
ticket visitor
identification- For future realization

Japanese
universities

Developing countries
Businessimplementation●●Information onsocial issues
Networks ofhumanresources

Japan●PeopleResearch technology

Places・ Human resources

JointmanagementIssues

Social issues
and the places
to resolve themSocialinnovators●TechOngoingdevelopment
and export oftechnology

SocialInnovator
HubThe nexus of social
issues, technology,
andhuman resources
Human resources

Socialentrepreneurshipcourses●with ambition, skills,
and technology

Establishment of an entrance lane exclusively for the relevant ticket(Figure: Demonstration experiment overview)*Japanese Public Key Infrastructure (JPKI): Public personal authentication service

Businessdevelopment
supportSeeds of social
innovators from highly
motivated developing
countries and Japan(Figure: The Social Innovator Hub concept)©2024 Dream Incubator Inc. All Rights Reserved.

8

VENTURE CAPITAL: PORTFOLIO AND MARKET VALUE(JPYbn)March 31, 2023
Book value 1)

Book value 1)

Japan

0.1

（9co.）

1.4

Sold two companies 4) 5)
Booked impairment
losses in 1 company4)India

1.8（21co.）

6.5

Booked impairment
losses in 8 companies4)

Other

0.0

（1co.）

Total

2.0

1.2 （13co.）

4.9

0.3

0.0

（1co.）

0.3（31co.）

8.2

1.3 （21co.）

6.0

LP investment in 2.4
funds 3)

（6co.）

2.4

2.4（6co.）

2.4

4.5

（37co.）

10.7

3.7 （27co.）

8.4

(1.7)

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/impairment losses
Excludes sale of one impaired company

0.05

Market value 2)

0.75

Core venture
portfolio2)
3)
4)
5)

Market value 2)（7co.）

Total1)

December 31, 2023

(1.3)

©2024 Dream Incubator Inc. All Rights Reserved.

9CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2023

March 31, 2023
(Total assets: JPY31.3bn)

Cash anddeposits
JPY10.3bn

Liabilities
JPY9.4bn

December 31, 2023
(Total assets: JPY18.2bn)(Major increase/decrease)
Liabilities● Income taxes payable:-JPY 6.1bn

Short-term
Investment
assets*
JPY13.8bn

Venture capital
JPY5.4bn
Other assets
JPY1.7bn*

Joint money trust

Net assets
Net assets
JPY21.9bn● Dividends:-JPY 2.0bn● Share buyback:-JPY 2.8bn● Net loss:-JPY 1.0bn

Cash anddeposits
JPY 6.4bn
Short-term
Investment assets*
JPY5.3bn

Liabilities
JPY2.1bn

Net assets
JPY16.1bn

Venture capital
JPY4.4bn

Other assets
JPY2.1bn©2024 Dream Incubator Inc. All Rights Reserved.

10

SHAREHOLDER RETURNS

Shareholder return policy during the medium-term plan period (FY03/2023–FY03/2025)(disclosed)● Total shareholder returns of JPY10.0bn– FY03/2023: Paid special dividends of JPY2.0bn– FY03/2024: Return over JPY4.0bn to shareholders, primarily in the form of sharebuyback○ Executed approximately JPY2.8bn in share buyback○ Determined implementation of a special year-end dividend of approximately
JPY1.2bn (JPY128 per share)– FY03/2025: Return the remaining amount (JPY4.0bn) to shareholders
Future policy● The method of returns for FY03/2025 and details on the retirement of treasury stockacquired will be disclosed at the time of full-year FY03/2024 earnings announcement©2024 Dream Incubator Inc. All Rights Reserved.

11

FULL-YEAR FORECAST

Business Production (versus medium-term plan)● Sales: Approx. JPY5.0bn versus target of JPY4.8bn● Net income/loss*: Loss of approx. JPY0.1bn versus target of income of JPY0.6bn● FY03/2025 forecast will be disclosed at the time of full-year FY03/2024 earnings
announcement
Venture Capital● Further prolongation of weak sentiment in the financing market may lead toimpairment losses in Q4* Simply calculated by deducting taxes (30% tax rate) from profit adjusted for income from non-controlling interests©2024 Dream Incubator Inc. All Rights Reserved.

12

Q3 FY03/2024 Financial Results
Reference Materials● Company profile● Current medium-term management plan

©2024 Dream Incubator Inc. All Rights Reserved.

13

OVERVIEW OF DREAM INCUBATOR (DI)Company profile

Corporate philosophy

Name

Dream Incubator Inc.

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*

JPY5.0bnCredo

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

MVV

Employees* 143

KeyDream Incubator (Vietnam) Joint Stock Company
subsidiaries Next Rise Social Impact Fund Investment Limited Partnership
DI India Digital Investment FundManagement Takayuki Miyake
Kyohei Hosono
Tetsuro Harada
Tsutomu Fujita
Soichiro Uno
Yuriya Komatsu
Sakon Uda
Business

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

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

History
2000
2002

Launched operations with the aim of developing investment/incubationand consulting businesses
Listed on TSE Mothers Market2005Listed on TSE First Section

2007

Established Dream Incubator Vietnam in Ho Chi Minh City, Vietnam
Acquired shares in ipet (current ipet Holdings) and made it aconsolidated subsidiary for incubation
Formed DI India Digital Investment FundEntered into a capital and business alliance with Dentsu 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 other subsidiaries toconcentrate resources on Business Production

20112018
2021
20222023*As of March 31, 2023

©2024 Dream Incubator Inc. All Rights Reserved.

14

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

BusinessProductionInstallation● 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©2024 Dream Incubator Inc. All Rights Reserved.

15

EXECUTIVES

Takayuki Miyake

Kyohei Hosono

Tetsuro Harada

Representative Director, President

Director, Executive Vice President

Director, Chairman of the Board● After his time at the Ministry of Economy,● At Japan Bank for International Cooperation,● While undergoing sonar operator training for

Trade and Industry (METI), where hedeveloped a venture capital program,oversaw the development of a range ofpolicies within the Ministry, includinginternational energy policies, and formulated
laws and regulations, he entered theconsulting industry.
● To realize DI’s founding philosophy (create
100 companies like Sony and Honda), whichleft much impression on him, Mr. Miyake
established the concept of “industryproduction” and “business production,”
focused on creating businesses rooted inefforts to address social issues.
● He co-authored Business ProductionStrategies to Create 300 Billion Yen Businessand The Road to Success in Business
Production to Create 300 Billion Yen Business(PHP Institute); co-authored Creating theFuture through Industry Production: How toThink to Create New Businesses One afterAnother (Nikkei BP); and authored Empathy xDigging Deep Is the Strongest Business Skill(PHP Institute).

he was involved in ODA for former Soviet
Union countries, efforts to resolve debt issuesof 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, hesupported global expansion of large
companies, 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.

naval vessels in the Japan Maritime SelfDefense Force in Etajima, Mr. Harada
witnessed the devastation brought by war toHiroshima and the city’s recovery from it.
Driven by his desire to contribute to theindustrial development that propelled thisrecovery, he transitioned to the private sector.
● At Nippon Life Insurance, he was engaged infinancial planning, loan sales planning, andHR planning.
● Mr. Harada joined DI shortly after its founding,
after learning about the Company’s purposeof fostering new businesses and newindustries. He was engaged in strategic
consulting, top management development,and investment and incubation for a range ofmajor companies in IT, telecommunications,manufacturing, general trading, wholesale,retail, construction, etc. After leading
structural reforms as CEO, he becamechairman of the Board and supports theCompany’s succession for continued growth.

©2024 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©2024 Dream Incubator Inc. All Rights Reserved.

17

Q3 FY03/2024 Financial Results
Reference Materials● Company profile● Current medium-term management plan

©2024 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 ProductionIncubation©2024 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
and harvested funds1) Further strengthen our Business Production
platform● Invest in recruitment and HR development● Invest in infrastructure to raise

productivity2) 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 capital

Harvest appropriately

BalanceIncubation(harvests)

BusinessProduction(profit)

Returned toshareholders
except for fundsfor growthinvestment andrequired cashflow

Dividend fromBusiness
Production©2024 Dream Incubator Inc. All Rights Reserved.

20

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

Incubation(harvest=upside)

1.00.3

***
***

0.6

FY03/2023

FY03/2024

FY03/2025

Sales (JPYbn)

3.3

4.8

5.9

Personnel(headcount)

70

93

115

EPS (JPY)**

3156

102

Simple calculation of recurring profit x tax rate of 30%
Calculation assumes number of shares outstanding as of end-March 2022
As of end-March, 2022

BusinessProduction(base)©2024 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 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 decisions based on their own judgement. The Company accepts
absolutely no responsibility for losses arising from the use of these materials.

©2024 Dream Incubator Inc. All Rights Reserved.

22

The Business Producing Company