FINANCIAL RESULTS BRIEFINGFOR Q2 FY2018
Infocom Corporation
10/29/2018

Copyright © 2018

INFOCOM CORPORATION. All rights reserved.

Contents
01

Financial Results for Q2 FY1802

Major First-Half Policies andSecond-Half Initiatives
03

Earnings Forecast for FY18

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INFOCOM CORPORATION. All rights reserved.

1

01

Financial Results for Q2 FY18

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INFOCOM CORPORATION. All rights reserved.

2

FY18 Q2 Earnings Highlights (Consolidated)

Net sales

Operating income

Profit attributable toowners of the parent＋9.1%+9.8%(27.1%)(Billion yen)(Billion yen)30(Billion yen)5523.1

25

21.2

443

2.3

202.5

FY172QFY182Q Higher sales, driven by strong e-comicperformanceCopyright © 201800

FY172Q

INFOCOM CORPORATION. All rights reserved.

1.811102.522153



FY172QFY182Q

Higher profits due to higher sales



FY182Q

Prior year includes extraordinary gains
from sale of data center

3

Management Performance (Consolidated)
FY17Q2FY18Q2Vs. PYVs. Forecast

YoY%Forecast

YoYNet sales

21.2

23.1+1.9+9.1

23.0+0.1

Operatingincome

2.3

2.5+0.2+9.8

2.6(0.0)(Operating margin)(11.2)(11.2)EBITDA

2.9

3.1+0.2+6.9

3.2(0.0)

2.6(0.0)(0.7)

2.6(0.0)

1.8(0.6)(27.1)

1.8+0.0*1

Ordinary income

2.6(Unit: Billion yen, %)(11.3)*2

Profit attributable toowners of the parent

2.5

 Higher sales and income year on year
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INFOCOM CORPORATION. All rights reserved.

*1 Partnership gain recorded as non-operating income (+0.2)*2 Gain on sale of data center recorded as extraordinary income (+1.1)

4

Business Areas and Segment Structure
Business Solution Group

Digital Entertainment Group

Health IT

Business SoftwareEnterprise ServiceManagementDigital Entertainment

Package services
for medical institutions

ERP・RPABusiness package
cloud services

System integration
for major companies

E-comic
E-commerce・Hospitals
・Pharmaceutical companies
・Nursing-care companies
・Health industry

Copyright © 2018

・Companies
・ERP GRANDIT®
・Government
offices
・緊急連絡/安否確認
・Localgovernments
・文書管理
・RPA

INFOCOM CORPORATION. All rights reserved.

・Textile manufacturers
・Trading companies
・Pharmaceutical wholesalers
・Mobile phone companies

・General consumers

5IT Services Segment Earnings (Consolidated)(Unit: Billion yen, %)Net sales

FY172Q

Operating income(Billion yen)(Billion yen)

153

10.5
1010.2

50%

40%

230%

20%

51

3.9

6.0%

3.9

00.6

3.9%

0

FY172QFY182Q

0.4

FY172QFY182Q

Healthcare
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INFOCOM CORPORATION. All rights reserved.

10%

Vs. PYFY18Q2

YoY%

10.5

10.2

(0.2)

(2.4)

Healthcare

3.9

3.9(0.0)(2.1)

Operating income

0.6

0.4

(0.2)

(36.0)(Operating margin)

(6.0)

(3.9)

Net sales

Net sales• The Healthcare business performed essentially inline with plan
• Lower sales for corporate IT services

0%

Operating income• Corporate IT services recorded lower profits due tolower sales• Ongoing up-front investments
6Digital Entertainment Segment Earnings (Consolidated)(Unit: Billion yen, %)Net sales(Billion yen)(Billion yen)

15

3

50%

12.8

2.1

10.6
102

1.7

40%

10.0

1

16.2%

17.1%

20%

10%

00

FY172QFY182Q0%

FY172QFY182Q

E-comics
Copyright © 2018

Net sales
E-comics

30%

12.4
5

FY17Q2Operating income

INFOCOM CORPORATION. All rights reserved.

Vs. PYFY18Q2

YoY%

10.6

12.8+2.1+20.5

10.0

12.4+2.3+23.2

Apr-Jun+17.9

Jul-Sep+28.2+0.4+26.5

Operating income

1.7

2.1

(Operating margin)(16.2)(17.1)Net sales
E-comics distribution service experienced strong
performance; new record for sales on both single-monthand quarter basis

Operating income
Higher profits due to higher sales and operational
efficiencies
7E-Comic Distribution Service Earnings (Net Sales by Quarter)(Billion yen)

7654

3

21Q

2Q3Q4Q

1Q

FY15
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INFOCOM CORPORATION. All rights reserved.

2Q

3Q

FY164Q

1Q

2Q

3Q

FY174Q

1Q

2Q

FY188

Investments(Billion yen)
R&D Investment

Capital Investment

Equity Investment

Major Investments (Billion yen)

Business Development

1.5
BusinessDevelopment

0.9
1.0

0.2
0.1

1.1
0.2
0.4

0.5

Copyright © 2018

EquityE-comics, overseas startups, etc.
Investment

0.2
0.4

E-comic distribution service
Healthcare
Capital Hospitals, community-based comprehensive care,
Investment drug companies, etc.

0.3

GRANDIT

0.4
0.0New business planning, research, demonstration
tests, etc.

0.3

0.00.1

FY172QFY182Q

INFOCOM CORPORATION. All rights reserved.

OtherAI, community-based comprehensive care, newR&D
technology research, etc.
Investme
nt
Other

0.1

9Balance Sheets (Consolidated)(Unit: Billion yen)

FY17Amount

FY Q2

Composition
Ratio

AmountComposition
Ratio

YoY

Major Change Factors
・ Cash and deposits +0.5

Current assets

27.6

72.3

27.4

68.3

(0.2) ・ Notes and accounts receivable - trade -1.8

Fixed assets

10.6

27.7

12.7

31.7+2.1 ・ Investments and other assets +2.2

38.2

100.0

40.1

100.0

+1.9

Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total net assets
Total liabilities and netassets
Shareholders’ equity ratio
Copyright © 2018

9.6
0.2

25.3

9.8

・ Inventories, Other +1.0

・ Income taxes payable -0.7
・ Provision for bonuses -0.3

20.8

(1.3)

0.5

8.3
0.8

2.1

+0.6 ・ Deferred tax liabilities +0.6

25.8

9.1

22.9(0.6)

28.3

74.2

30.9

77.1

+2.5

38.2
73.8%

100.0

40.176.7%

100.0+1.9

INFOCOM CORPORATION. All rights reserved.

・ Retained earnings +1.1
・ Valuation difference on available-for-sale securities +1.4

10

Cash Flows (Consolidated)(Unit: Billion yen)(Billion yen)

FY17
Q2

Increase in profit before
income taxes, etc.

20

Cash dividends paid, etc.

+2.0

(0.3)

1.8(0.6)(2.5)

Free CF

4.2

1.3

(2.8)

Financing CF

(0.4)

(0.7)

(0.3)

(0.0)

0.0

+0.0

3.7

0.5(3.2)

beginning of period

12.4

16.6+4.2

Cash and cash equivalents,end of quarter

16.1

17.1

+0.9

2.3

Investing CF*1(0.7)

1614

17.1

16.6

Effects of exchange ratechanges on cash and cashequivalents
Change in cash and cash

12equivalents
Cash and cash equivalents,

10

FY17Operat
ing CF

Investing CF

Financing CF

Cash and Equivalents
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INFOCOM CORPORATION. All rights reserved.

FY18
Q2
Cash and Equivalents

Change2.0

Operating CF(0.6)

18

FY18
Q2

*1

*1 Sale of data center, etc.

11

02

Major First-Half Policies andSecond-Half Initiatives
E-comics
Healthcare
OthersCopyright © 2018INFOCOM CORPORATION. All rights reserved.

12

02

Major First-Half Policies andSecond-Half Initiatives
E-comics

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INFOCOM CORPORATION. All rights reserved.

13E-comics: First Half Progress
Aiming to outperform market growth as the leading company in the industry
・・・・

1. Expand collaborations with publishers
・Expand exclusive first-run distributions

25%Up

18.0

2. Strengthen data analysis capabilities
・More effective targeted advertising

3. Expand scale of business

7.3

・Expand overseas to Korea, Taiwan
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18Net Sales
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・・・(Earnings Forecast)14E-comics Reference: AI/Data Utilization
2016

2017

2018-Automatic Tagging

Launch of Big Data Analysis

Improve Level ofData Analysis

Identify Topics and Keyword
from Product Information
Using AI

Infrastructure to Handle Large
Data Volume

Also Capture Qualitative Datafor Analysis

Big Data Analysis(Purchase History, BehaviorHistory)

Use Machine Learning to Study
Analysis and Prediction
Methods

Operational Efficiencies

Improve Processing Speed

Increase Sales

Use in Marketing

Expand Personalization(Recommendations, Site Design(Improve Website Design)

Identify Best-Sellers)

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02

Major First-Half Policies andSecond-Half Initiatives
Healthcare

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Healthcare

First Half Progress

1. Accelerate of community-based comprehensive care business Promote complete IT nursing care solution and expand peripheral services✓ IoT Caretaker Services MIMAMORE 2.0 (version upgrade; sensor independent)✓ Release of Care Style support service for nursing professionals job search✓ Demonstration tests of shopping agent service for nursing facility patients (partnership with SOMPOHoldings)

2. Strong sales of products for hospitals, driven by revised laws

 Positive impact of revised medical services payment law and work-stylereform in hospitals provide prime opportunities✓ Clinical Information Systems✓ Employment Management System
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INFOCOM CORPORATION. All rights reserved.

Expanding requirements for clinical information
systems in hospitals
Ministry of Health, Labour and Welfare requiring
more effective tracking of work hours17Healthcare

Co-creation With Partners and Rolling Out Services for Community-based Comprehensive Care

MedicalCommunity-based Comprehensive Care

Nursing Care

Carestyle support service
for nursing professional job search

TEIJINNew

Patient Information Sharing System

Nursing Care Information Database

Vital Link

Coordination

Large-Scale
Nursing Care
Businesses
SolastoAll-in-One
Nursing Care IT!

Operation Support

Version UP(1) Nursing care record system

Nursing Care Support(2) Caretaker support service

MR Sales Support

SOMPO
Radiation/MedicalImages

VentureCompanies

Digital Health Connect

Treatment Information
ManagementNew

Drug Information
Management

Drug Makers
Copyright © 2018

Hospitals

INFOCOM CORPORATION. All rights reserved.

Elderly, Family

Demonstration Tests ofShopping Agent Service

Nursing Care Businesses18

02

Major First-Half Policies and SecondHalf Initiatives
OthersCopyright © 2018

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19

Others

Initiatives in AI, IoT, Robotics Process Automation (RPA)

Use as foundational technology for our own services

Use to improve productivity in internal operations(work-style reform)

Launch New Services

RPA × AI

RPA

Automate, make everyday tasks more
efficient to encourage work-stylereformAI

Accumulate expertise throughrepeated cycle of technical researchand hands-on operations

Use RPA and AI-OCR, coordinate with GRANDIT
Automated Solution for Paper-Based Vouchers

IoT
Conforms to HACCP for Restaurants, Retail
IoT Food Temperature Management ServiceAI
Built-In AI Credit Engine
Credit Approval Service at score
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03

Earnings Forecast for FY18

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INFOCOM CORPORATION. All rights reserved.

21

Earnings Forecast for FY18 (Consolidated)
FY18
Revised
Forecast

FY17Actual

FY18
InitialForecast

Vs. PY
YoY%45.7

51.0+5.2+11.4

50.0IT Services
Digital Entertainment

24.4
21.2

25.0
26.0+0.5+4.7+2.1+22.2

26.0
24.0

Operating income

5.8

6.7+0.8+14.9

6.5

IT Services
Digital Entertainment

2.4
3.3

2.5
4.2+0.0+0.8+1.7+25.0

2.7
3.8(Operating margin)(12.7)(13.1)

6.9
5.9

7.9
6.7+0.9

+13.0

+0.7

+12.0

4.6
17.9

4.6
15.3

(0.0)

(0.9)

(2.6)

―

Net sales

EBITDA
Ordinary income
Profit attributable to ownersof the parent
ROE (%)(Unit: Billion yen; %)(13.0)

7.7
6.5
4.5
1.5

◆Upward revision of fiscal year forecasts based on first-half results and outlook for key businesses
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IT Services Segment Earnings Forecast(Unit: Billion yen, %)Net sales

2524.4FY17Actual

Operating income

25.0

530%

315

2.4
2105

10.0%

2.5
10.0%
10%

10.1

9.5

010

FY17

FY18%

+0.5+2.1

Healthcare

10.1

9.5

(0.6)

(6.1)

Operating income

2.4

2.5+0.0+1.7(Operating margin)(10.0)(10.0)Net sales
We expect to feel the negative impact of a shift in a majorsystems integration project for a drug manufacturer to a later
period. Despite this shift, we expect hospital sales to be strong,
and we forecast higher sales.

0%

FY17 FY18

Healthcare
Copyright © 2018

YoY

25.0

2020%

Vs. PY

24.4

Net sales
4FY18
RevisedForecast

INFOCOM CORPORATION. All rights reserved.

Operating income
Expect sales to be level with the prior year23Digital Entertainment Segment Earnings Forecast(Unit: Billion yen, %)Net sales

26.0

Operating income
5030%

2510E-comics

40203.330

15Net sales

4.2

21.2

FY17Actual25.4

16.2%
15.8%

10%

105Vs. PY
YoY%

21.2

26.0+4.7+22.2

20.2

25.4+5.1+25.5

First Half
Second Half

+23.2
+27.8+0.8

+25.0

20%

2020.2FY18Revised
Forecast

Operatingincome

3.3

4.2

(Operating margin)(15.8)(16.2)Net sales
E-comics will continue to show high growth rates during the second half
We expect sales of 25.4 billion yen, 25% higher year on year

00

FY17

FY180%

FY17 FY18

E-comics
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INFOCOM CORPORATION. All rights reserved.

Operating income
Despite ongoing up-front investments in data analysis and AI, ecomic sales increases should drive higher profits
24

Shareholder Returns
Annual dividend per share (yen)
38.0

¥40
¥30
22.0
18.5

¥2025.040.030

28(YearEnd)(YearEnd)

10(Interim)10(Interim)10(Interim)

15(YearEnd)¥10¥0Net income
per share

FY14

FY15

FY16

FY1779.43

26.64

119.28169.70FY18(Forecast)◆Dividends
Interim dividend of 10 yen for the fiscal year ending
March 2019Year-end dividend of 30 yen, resulting in aprojected full-year dividend of 40 yen (dividend
payout ratio of 23.8%)◆Shareholder Benefits
Provided to shareholders owning at least one
trading unit per the register of shareholders as of
September 30, 2018
（Announcement scheduled for early December)

168.20* On August 21, 2018, INFOCOM applied for approval to change our listing to the main markets of the Tokyo Stock Exchange.

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INFOCOM CORPORATION. All rights reserved.

25

Contact

Infocom Corporation
Corporate Communications Office
TEL: +81-3-6866-3160 Email: pr＠infocom.co.jp

This document is provided for the purpose of providing information about the Company and its performance, not for the solicitation of investments insecurities issued by the Company. In addition, because yen figures in this document are stated in billions of yen and rounded off after the first decimal
place, management indicators, year-on-year changes, and percentage changes are approximate. With certain exceptions, this document is based on data asof September 30, 2018.
The names of the companies, services, and products stated in this document are trademarks or registered trademarks of their respective companies.
The opinions and forecasts included in this document are judgments of the Company as of the date this document was prepared. The Company does notguarantee the accuracy or completeness of information contained herein, which might change as new data becomes available.

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INFOCOM CORPORATION. All rights reserved.

26