May 10, 2021

Medium-TermManagement Plan(from FY2021 to FY2025)

Copyright 2021 NSD CO., LTD.

Formulating the New Medium-Term Management Plan
We have now formulated a new Medium-Term Management Plan that begins thisfiscal year. In this Medium-Term Management Plan, NSD will lay the foundation foradvancing to the next new stage in terms of both quantity and quality for five years.
Specifically, we aspire for the corporate group to achieve 100 billion yen in net sales.
To that end, we will expand our business foundation by utilizing M&A deals in addition
to further extending our existing businesses. Also, we will accelerate efforts to adapt
to a digitalizing society in the fields of new technology, digital transformation, andsolutions, thereby working to transform into a company of greater added value. At thesame time, While working on management that contributes to the realization of asustainable society, we aim to be a "company that proposes the future of people andIT."
We at NSD shall always proceed forward as a professional IT industry group capableof fulfilling your expectations. We hope to continue receiving your unwavering support.

May 10, 2021
NSD Co., Ltd.
President & CEOYoshikazu Imajo
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Results of Previous Medium-term Management Plan (Policies)
BasicStrategies

Pursue new growth opportunities in new business, new technology domains, etc.
Improve compatibility with new technologies in systems development
Further strengthen people and organization

Systems development
Drive group-wide sales growth, supported by customer needs for investment in systems
development
There is also a growth trend in sales related to new technology

New business, new technology domains, etc.
Specific Strategies

Set up expert teams like the new Advanced Technology Business Division and new company
NSD Advanced Technology Research Institute Co., Ltd.
Finish building the company's structure, such as deploying a variety of resources to new fieldsof technology
Collaborate with customers to engage in co-creation

Personnel development and organization

Carry out aggressive efforts to reform working lifestyles and for health and productivity
management
Ongoing action to cope with COVID-19

Business partners, M&A deals, alliances

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Add personnel from business partners, focus on spurring communication with management
ranks
Further alliances that mix a variety of players in Japan and abroad with partnerships andcapital in operations2

Results of Previous Medium-term Management Plan (Consolidated Figures) The previous Medium-Term Management Plan (from FY2018 to FY2020) had a strong
environment for receiving orders and the plan's targets were revised upward twice Over the three years, the average growth rate for net sales was 4.7%, we achieved operating
income of 8.1%, and we increased operating income margin by 1.4%
 The final fiscal year was impacted by COVID-19(million yen)
2018/3Results

2019/3Plan

2020/3Plan

2021/3Plan

2021/3Revised

2019/3Results

2020/3Results

2021/3Results

57,70460,00061,50063,00070,00061,57365,063

66,184

5,595

6,600

7,800

10,00012,000

7,048

8,541

9,025

Operating Income

7,799

8,100

8,300

8,500

10,000

8,492

9,545

9,842

Operating Income
Margin (%)

13.5

13.5

13.5

13.5

14.3

13.8

14.7

14.9

Ordinary Income

8,119

8,200

8,400

8,600

10,100

8,756

9,661

9,955

Net Income

5,368

5,500

5,300

5,700

6,800

5,817

6,314

6,373

ROE (%)

12.1

11.8

10.9

11.3

13.7

12.6

13.8

13.7

Net Sales
New corebusiness net sales

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Results of Previous Medium-term Management Plan (Shareholder Returns)
 The dividend during the previous Medium-Term Management Plan rose by 16 yen per share,
while there were approximately 8 billion yen in purchases of treasury shares In FY2019, we paid a commemorative dividend of 14 yen per share and retired 1 million
treasury shares In FY2020, the consolidated dividend payout ratio was 50% or more (an increase of over10%)
Dividend and Consolidated Dividend Payout Ratio per Share
Commemorative dividend
Year-end dividend
Consolidated dividend payout ratio (excluding commemorative dividend)(yen)1452.4%
41.0%

43.1%

40.9%

2630

3242

FY2017FY2018FY2019FY2020*1. The value of the dividend per share is based on the number of shares after the January 1, 2020 stock split*2. The consolidated dividend payout ratio including the FY2019 commemorative dividend was 58.8%

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Changes in the NSD Group's Business Environment

In the IT Industry
 Expanded investment to accelerate DX and business opportunities arisingtherefrom
 The performance of digital business utilizing new technology will be future
lifelines Distinctive emerging companies and organizations/people will arise andestablish a certain share and status
 Focus on recruiting and developing skilled talent (i.e. IT engineers)

Throughout Society While COVID-19 currently impacts the economy, we expect it to stabilize
over the long term Post-pandemic trends and adaptation to a digital society will lead to theintroduction of new lifestyles

 Action with a sustainability focus will become more of an entrenched norm
throughout society
 Awareness of individual working lifestyles will further increase and change
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Direction of the New Medium-Term Management Plan
 Continue in the direction of the previous Medium-Term Management Plan in the new
Medium-Term Management Plan Meanwhile, reflect the current trends in the external environment and factors behind
anticipated changes
 A plan that will realize our long-term goals

Medium-TermManagement Plan

Pioneer new technologies

Stronger non-customized
development
Stronger competitiveness incustomized development

Medium-TermManagement Plan

Medium-TermManagement Plan(April 1, 2015 –March 31, 2018)
Net sales

66.1 bil. yen
9.8 bil. yen(Operating income margin 14.9%)
Market cap 170.0 bil. yen

7.7 bil. yen(Operating income margin 13.5%)

42.9 bil. yen

Operating income

Net sales

57.7 bil. yen

Operating income(April 1, 2021 –March 31, 2026)(April 1, 2018 –March 31, 2021)

Operating income(April 1, 2012 –March 31, 2015)
Net sales

Medium-Term
Management Plan

Market cap 102.4 bil. yen

5.1 bil. yen(Operating income margin 12.0%)
Market cap 85.3 bil. yen

April 2012

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*1. Net sales and operating income (as well as their margins) are from the final fiscal year of each plan.
Market capitalization is from the end of each plan.

April 2015

April 2018

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Goals in the New Medium-Term Management Plan

Long-Term Goals
A company offering a vision for the future of people and IT
Advance, deepen, and update alliances in Japan and abroad with a progressive, solid
business foundation

Upstream planning and proposals for value propositions that resonate with customers

An organizational culture where independent workers can demonstrate creativity

Five-Year Goals
1. Being advantages in certain fields, a corporate group develops business over multiple domains- Drive companywide growth in new core and new technology domains- Establish a certain degree of name recognition in the solutions field
2. A company culture that adds a uniquely NSD touch to systems development- Praise for our combination of original advantage + performance using new technologies + stronger
proposals; achievement of sustained growth
3. An IT engineer group that creates business transformation with our customers- A customer-oriented company that practices DX implementation for the public

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7Basic Strategies in the New Medium-Term Management Plan The strategies to implement the Five-Year Goals are our Basic Strategies
 The strategies to turn those Basic Strategies into reality are our Specific Strategies

Four Basic Strategies

Being advantages incertain fields, a corporategroup develops businessover multiple domains

Five-YearGoals
A company culture thatadds a uniquely NSD touch
to systems development
An IT engineer groupthat creates business
transformation
with our customers

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(1) Achieve sustained growth in the systems development business(2) Greater focus on new technologies and DX business to build upresults(3) Expand size of the solutions business into a second pillar of thecompany(4) Stronger efforts for the SDGs and ESG (Environment, Social, andGovernance)

8Specific Strategies in the New Medium-Term Management PlanSystems developmentStronger ability to win projects from customers and greater responsiveness in upstream processes tothat end
Build up results in new technologies and DX businessWin new business in domains such as administrative digitalization by the government and 5G/6G
Recruit the talent needed to drive growth (e.g. securing excellent new graduates, more mid-career hires,
deeper collaboration with business partners, expanded utilization of offshoring)

New technology and DX

Develop AI products (e.g. location information solutions, image analysis, voice recognition), strengthening
sales base, speed up business development
Deepen collaboration and co-create with customers, expand outside networks in new technologies
Specialized departments share knowledge with the company's divisions
Train personnel in new technologies and DX, expand training and incentive systems to add more personnel
and improve their technical skills

Solutions business

Accelerate the rollout of leading healthcare brand CAReNA in Japan and abroad
Further strengthen sales capabilities of HR products (ORDIA and JobSuite) and educational products (manabox)
Develop and commercialize new services in shareholder services
Expand business size and accelerate it by acquiring existing products and brands through M&A deals

SDGs/ESG (Environment, Social, and Governance)Establish implementation organization in-house
Formulate KPIs and build a system to routinely check progress toward them

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Consolidated Numerical Targets in the New Medium-Term Management Plan (1) Five-year numerical targets:
Net sales
100 billion yen (of which new core business net sales*1 of 40 billion)
Operating income
14.5 bil. yen
Net income
10.0 bil. yen(million yen)2021/3Results

2022/3
Plan

66,18470,00074,00078,000100,000

18,00422,00026,00030,00040,000Operating Income

9,842

10,00010,70011,30014,500Operating Income Margin(%)

14.9

14.3

14.5

14.5

14.5

Ordinary Income

9,955

10,10010,70011,30014,500Net Income

6,373

6,800

7,200

7,600

10,000ROE (%)

13.7

13.7

13.9

14.0

15.0

Net Sales
New core businessnet sales*1

2023/3
Plan2024/3
Plan

2026/3Goal*1. The definition of new core business net sales has been revised in the new Medium-Term Management Plan. Net sales now includes
systems development net sales from new technology and solutions businesses in which NSD is involved, as well as newly-added netsales from new DX business.

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Consolidated Numerical Targets in the New Medium-Term Management Plan (2)Analysis of factors for achieving targets

When expanding net sales, we consider both the systems development business and solutions businessdrivers of growth
Sustain an operating income margin of around 14.5% while including spending on new technology and DX(e.g. procuring and training needed personnel), goodwill amortization arising from M&A deals, etc.
For new core business net sales, aim for consolidated net sales of 40% while focusing on addressing newtechnology and DX
Expected total spending on M&A deals is around 20 billion yen

Consolidated net sales(million yen)

Systems
development
business

Solutionsbusiness

New core business net sales
Solutionsbusiness

100,000(million yen)

40,000

New technologyand DX

66,18418,004+21,996+33,816

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FY2025

FY2020

FY2025

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Shareholder Returns in the New Medium-Term Management Plan
Profit return policy to shareholders
Actively pay dividends and acquire treasury stock based on a basic policy of a total return
ratio of 70% or more

 Dividends are 50% or more of consolidated net income Acquisition of treasury stock is 20% or more of consolidated net (Acquired between
July and June of the following year)※ Aim to own 10% of issued treasury shares, and if exceeding 15%, retire shares until the ratio isapproximately 10%Dividend and Consolidated Dividend Payout Ratio per Share
Commemorative dividend
Year-end dividend
Consolidated dividend payout ratio (excluding commemorative dividend)(yen)

Forecast

14

43.1%

40.9%

3032

FY2018FY2019

52.4%

52.2%

4245

FY2020

FY2021*1. The value of the dividend per share is based on the number of shares after the January 1, 2020 stock split*2. The consolidated dividend payout ratio including the FY2019 commemorative dividend was 58.8%

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