Financial Results
FY3/22 (24th term)

June 9, 2022
Estore Group
Estore CorporationAlthough the Company has applied the new revenue recognition standard
from FY3/22, the figures for FY3/20 and FY3/21 in this document are
retrospectively applied these standards (but not audited) as reference.
The figures for transactions conducted as an agent have been reclassified
from gross to net.

1. Overview of FY3/22 Results

Overview of FY3/22 Results

・Increase in sales and profits
BusinessResults

Record-high profits in excess of 1 billion yen
Although sales appears to have declined on the summary of the financial
report, this is because figures for transactions conducted as an agent havebeen reclassified from gross to net.

・Net sales: 5,746 million yen (Up 6%)
・Operating income: 1,051 million yen (Up 16%)
Ratio of operating income to net sales : 18.3%

・Accelerated DX investment by client companies
Factor・Driven by systems for large e-commerce websites
・E-commerce spending remained steady, exceeding the previous fiscal
year's bubble.
・Advanced system development in anticipation of future demandPrior
investment

Contribution of newly consolidated subsidiary・Strengthened advertising (TV commercial, etc.)p.3

FY3/22 Topics

Establishment of Group Management

Transitioning from E-commerce (EC) to Unified Commerce (UC)■ Estore: Shift to large projects in line with expectations
As we have been promoting "reduction in the number of stores and improvement in the quality of stores",acquisition of large stores was several times more successful than cancellations.

■ Commerce21: Shit to “backroom” services
In addition to "EC-front" services centered on UC, strengthen "backroom" systems, such as supply chain
bookkeeping systems.

■ WCA: Shift to e-commerce specialized services
Shifted from "operation-type advertising" to "attracting customers focused on LTV" with reduced effectiveness,greatly contributing to hands-on services.

■ Consolidation of Irvine Systems, Inc. and reinforcement of the development structure
Acquisition price: 130 million yen (majority of shares), commenced consolidation in July 2021, and used treasury
stock (39 million) as part of consideration (share issuance)■ Steady progress of the Medium-Term Management Plan (FY3/25)
3-thirds of the 5-year plan starting from FY3/21 trended as planned■ Purchase of treasury stock
240 thousand shares, 4.79% of the total number of issued shares (excluding treasury stock), at a purchaseprice of 491 million (2,049 yen per share)p.4

Consolidated Net Sales (Quarterly Change)

Beyond COVID-19 ReboundStrong performance throughout the fiscal year against the backdrop of corporate DX
investment.
(Million yen)

EC Systems

FY3/20 FY3/21 FY3/22

PaymentSettlement

1,455 1,487

1,469
1,372

Marketing

1,362

1,357

1,417

1,239

733

740

726

Q1
Apr-Jun

Q2
Jul-Sep733

Q3
Oct-Dec

Q4Jan-Marp.5

Consolidated Operating Income/Net income*Net income up by 40%

Record-high profits for 2 consecutive years.
40 yen of divided payment, exceeding the initial forecast of 32 yen.
Operating income

Ordinary income

Record-high＋16.0％

Record-high＋0.4％

Net income/DividendRecord-high＋40.3％

1,051
1,073

906

677

1,078

Dividends (yen)Gain on valuation of crypto-assets
95 million yen
Gain on sales of investment
security
62 million yen

482
367

478

526
4029

FY3/20FY3/21

FY3/22

FY3/20※ Net income attributable to owners of parent

FY3/21

FY3/22

FY3/2032

FY3/21

FY3/22

Unit: million yenp.6

Increase in equity ratio

Consolidated Balance Sheets
Equity ratio: 32.6％, ＋5.4pt YoY(Million yen)

71％

Current assets
Major items
Cash and deposits
Accounts receivableand contract assets

3,858

5,865 Current liabilities
4,450
965

Major items
Accounts payable and accrued liabilities
Short-term and current portion of loans
Deposits received

Non-current liabilities

29％

Non-current assets
Tangible and intangible
Investment and others

2,3461,239
1,106

Total assets

8,211
Liabilities/Net assets
Long-term debt: 843 million yen
Convertible bonds: 510 million yen

Net assets
Shareholders' equityOthers

577
548
2,209
1,563
2,789
2,665
124

47％

19％

34％

8,211
Equity ratio: 32.6%
Net income: 677 million yen
Acquisition of treasury stock: -491 million yen
p.7

Consolidated Statements of Cash Flows

Flexible cash management

Acquisition of treasury stock + dividend paid: 650 million yen
Profit before income taxes: 1,062 million yen
Decrease in notes and accounts payable: - 384
million yen
Decrease in deposits received: - 319 million yen

6,000

5,000

OperatingCFFinancing
CF1,661

14415

4,766

△ 198
3,288
3,000

FinancingCF△ 269
Investing
CFInvesting
CF

4,000

Long-term and short-term borrowings: +360
million yen
Loan repayment: - 169 million yen
Acquisition of treasury stock: - 491 million yen
Dividends paid: -159 million yen

4,448
△ 464

Acquisition of tangible and intangible
fixed assets:

OperatingCF- 136 million yen
Purchase of investment security:- 120 million yen

2,000

1,000(Million yen)

0End-Mar. 2020
Cash balance

End-Mar. 2021
Cash balance

End-Mar. 2022
Cash balancep.8

2. Status by Revenue Model

Consolidated Net Sales(Quarterly Change)

2. Status by Revenue Model EC Systems■ Strong performance throughout the fiscal year on the back of DX investments by client companies.

Net sales：4,293 million yen＋10.1％YoY(Million yen)

FY3/20FY3/21

FY3/22

1,200

1,125
1,010

1,000

1,034

998

1,088

1,068
977

890

800

600
470

502

468495

400

200

0Q1
Apr-Jun

Q2
Jul-SepQ3
Oct-Dec

Q4
Jan-Marp.10

Consolidated Net Sales(Full-year forecast)

2. Status by Revenue Model EC Systems■ Client companies' willingness to invest in DX is strong. Double-digit sales growthis expected.
(Million yen)

6,000

4,850

5,000
4,293
3,900

4,000

3,000

2,000

1,936

1,000

0

FY3/20FY3/21

FY3/22

FY3/23
Planp.11

2. Status by Revenue Model Payment Settlement

Consolidated Net Sales(Quarterly Change)

E-commerce spending showed only a slight rebound from the "stay-at-home demand" in the previous year; infact, web-based consumption is firmly established.

Net sales：854 million yen＋2.2％YoY(Million yen)

FY3/20300

FY3/21

FY3/22247

250

230
195

200

210208157

155200

197

142

150

198

128100500

Q1Apr-Jun

Q2
Jul-Sep

Q3
Oct-Dec

Q4
Jan-Marp.12

(Reference) Shopserve:
Commercial Transaction Value

2. Status by Revenue Model Payment Settlement

The commercial transaction value in the first half did not reach the level of the previous firsthalf, which saw a sharp increase due to COVID-19, but remained steady in the second half.
(Billion yen)

3530
25

Increase

COVID-19
1st yearBubblesoaring

Increase

COVID-19
2nd year

Increase

Slightincrease

Increase

Before20 COVID-1915
1050

Apr-JunJun-Sep

FY3/20

Oct-Dec

FY3/21

Jan-Mar

FY3/22* Shopserve's commercial value. Figures do not include the value of Sell Side Solution trade.

p.13

2. Status by Revenue Model Payment Settlement

Consolidated Net Sales(Full-year forecast)

E-commerce spending is expected to remain strong.

(Million yen)

1,000
900

835854

FY3/21

FY3/22

890

800
700
600

582

500
400
3002001000

FY3/20FY3/23
Planp.14

Consolidated Net Sales(Quarterly Change)

2. Status by Revenue Model Marketing

Sales shifted to online promotion for e-commerce. Figures are now
presented in net amount.
※ Percentage change is not shown because it is difficult to compare with theprevious year due to an increase in the number of transactions that should bepresented as net amount.

Net sales：599 million yen(Million yen)

FY3/20FY3/21

FY3/22

190

200

179

180
153

160

155

151

151

146

150

140
120
100

109

101

95

90

80
60
40
20
0

Q1
Apr-Jun

Q2
Jul-Sep

Q3
Oct-Dec

Q4
Jan-Marp.15

Consolidated Net Sales(Full-year forecast)

2. Status by Revenue Model Marketing

The Hands-on Incubation (HOI) business is expected to become profitable.

(Million yen)

1,000

860

900
800
678700

599

600
500
400396300
200
1000

FY3/20FY3/21

FY3/22

FY3/23
Planp.16

2. Status by Revenue Model HOI Business

STEP

1Business Progress

Review of Projects
Future business potential, etc.

STEP

2

Pre-HOI
Consulting

STEP

3

Implementation ofHOI (monetization)

7 projects inprogress
Apparel, food andbeverage, and servicing etc.

Target1-2 projects per year17

3. Business Forecasts

3. Business Forecasts

Full-year Business Forecasts■ Sales and profits are forecast to increase on the back of continued growth in Ecommerce spending and DX spending by companies that are expected to become
more active. Expect record high profits for 3 consecutive years.

Previous results
FY3/22

Forecasts
FY3/23YoY

Net sales

5,746

6,600

114.8％

Operatingincome

1,051

1,250

118.9％

Ordinary income

1,078

1,270

117.8％Net income*

677

800

118.1％(Million yen)

※ Net income attributable to owners of parent
p.19

3. Business Forecasts

Consolidated Net Sales (Medium-Term Management Plan)■ Strong demand for DX investment mainly on systems for large E-commerce sites.
Forecast sales growth in line with the Medium-Term Management Plan.
CAGR：23.7%
10,100

6,600
5,415

5,746

2,914

CAGR：28.2%

FY3/20ResultFY3/21ResultFY3/22
FY3/22
ResultPlan
Medium-Term Management Plan

FY3/25
Plan
20

p.20

3. Business Forecasts

Consolidated Operating Income (Medium-Term Management Plan)

Operating income (Million yen)

2,000

2,000

1,250
1,000

500

COVID-19
special demand(estimate)

1,051
906

Actual:478 700

FY3/20ResultFY3/21ResultFY3/22
ResultFY3/22Plan

FY3/25Plan

Medium-Term Management Plan
p.21

4. Appendix

(1) Group Overview

4. Appendix

23 years of support for own store e-commerce

Figures as of March 31, 2022

Support menu: sales systems + sales promotion services
Advantage is the one-stop service

E-commerce
systeme.g. Issuance of rewards basedon the number of purchases
and other engagement

Established in 1999 ......... Became wholly-owned subsidiary of our group in 2020

Cloud e-commerce system
Established in 1999

Reflects marketing data insystem operation
Automation is also possible

Payment,etc.

Advantages of onestop service forcustomersDedicated built e-commerce system / Packaged e-commerce system

Provide pay-as-you-go services such as card payment
Established in 1999

Reflects system data inmarketing operations
Automation is also possible

Sales
promotionagencye.g. Automatic suspensionof ad placement bydetecting missing inventory

Mass marketing (advertising, content creation, and increasing the numberof customers)
Established in 2005 ......... Became wholly-owned subsidiary of our group in 2020
Direct marketing (planning and operation of CRM, increase customer visits)
Established in 2004 ......... Investment in 20%, unconsolidated
p.23

(2) Market position and product lineup

4. Appendix

Position

Corporation/enterprise that require customer marketing

Platform e-commerce(Mall)

Head officee-commerce system
Dedicated built e-commerce system

AmazonRakuten / ZOZO
MercariCloud e-commerce system

Shopping cart
Instant Cart
Head office cart systemp.24

(3) Earnings structure and cyclical synergies

4. Appendix

E-commerce systems

E-commerce systems

1Paymentsettlement

Pay-as-you-go services such as
credit card, convenience store,
electronic payment, e-mail, CRM,
logistics, etc.

・Monthly and annual recurring revenuesystem
・Additional services and customization
・Compared to peers, the advantage is theability to connect ② and ③ services.

Payment settlement

2• Pay-as-you-go system linked to the GMV ofthe system• Highly profitable business with 24/365
machine operation

Sales
promotion
proposals

Sales promotion proposals
Sales staff

Sales
promotionagencyProvide mass marketing (create newcustomers)
Provide direct marketing (to create repeatcustomers)

3•••

Individual proposals to increase GMV
Same as above, sales promotion on behalf ofcustomers
With this service, we are able to increase ② sales
and continue and expand ① contracts.

Sales promotion agency
・In principle, recurring with low incomes but
substitutional profits
・With this service, we are able to increase ② sales
and continue and expand ① contracts.
・ Compared to peers, the advantage is that it does
not incur customer acquisition costs.

p.25

4. Appendix(4) Market environment and reasons for the dominance of the in-house e-commerce store

The population is still growing, and thefirst e-commerce development period has
allowed for excessive competition.

Therefore, mall-type web
shops appeared in this period

A social environment in which the shift to an IT society
must be accelerated
Declining population and industrial deflation
Customer marketing became essential(ARPU and LTV Management)

Population
andeconomy

Companies are required to have own
e-commerce shop.

50% in the latter part and a 50% shift tothe main office in the past

Platform E-commerce

In-house e-commerce store

Innovator3％

Adapter
12％

Early major
35％

Late measure
35％

Legato15％

Current position
We have a large future customer market① Accelerated shift from malls to main stores; ② large growth rate of domestic e-commerce adoption still low; and ③ theory that large
number of late majors enter the market
When IT (EC) is sorted into the E. Rogers industrial development curve (market area), it is now the middle of the early majors and the late majors. In other words, we thinkthat it is at the top of the peak of the customer market area. Therefore, the customer market after the Rate Major is the market of the same size as the past 20 years. Inaddition, as the domestic population and economy have already peaked and are on a downward curve, both socially and politically, digital promotion is inevitable. At present,
only 7% of the domestic EC adoption rate (30% in China, 20% in the U.S., and 15% in Southeast Asia) is expected to increase at an early pace (reaching Legato in 2010years).
We anticipate that the market for large corporations, many of which are more late majors, will develop rapidly than above.

p.26

4. Appendix(5) Major Customers

p.27