Financial Results Briefing for Q2 FY03/2023

INFOCOM CORPORATION
October 28,2022

On November 16,2022, “Earnings Forecast for FY03/2３”(Page 13,14) was added.
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Contents
Financial Results for Q2 FY03/23

Earnings Forecast for FY03/23

Initiatives in Key Businesses
E-Comic
Health IT
Evolve Into a Services Oriented Business

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Results

Financial Results for Q2 FY03/23

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Q2 FY03/23 Results (Consolidated)
E-comic business growth based on stronger marketing
Net sales

Operating profit

Profit attributable toowners of the parent＋1.8%-25.8％-50.4％(Billion yen)(Billion yen)(Billion yen)

40

10

10

30

7.5

7.5

20

5

32.4

33.0
4.9

3.7

5

3.4

10

2.5

2.5

0

0

0

FY03/22 FY03/23
Digital Entertainment
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

FY03/22
Business Solution

3

FY03/231.7
FY03/22 FY03/23

Management Performance (Consolidated)(Billion yen)

YoY

FY03/22Q2

FY03/23
Q2

Change

32.4

33.0

+0.5

＋1.8%

Operating profit

4.9

3.7

(1.2)

-25.8％(Operating margin)（15.4%）（11.2%）EBITDA

5.6

4.2

(1.3)

-24.4％

Ordinary profit

5.0

3.7

(1.2)

-25.1％

Profit attributable toowners of the parent

3.4

1.7 *

(1.7)

-50.4％Net sales%*Recorded an extraordinary loss considering the futurebusiness environment for consolidated subsidiaries
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

4

Business Areas and Segment Structure
Digital Entertainment
Group

Business Solution Group

DigitalEntertainment

Health IT

E-comic

Package services
for medical
institutions

・General consumers

・Hospitals
・Pharmaceutical companies
・Nursing care companies
・Health industry

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

5

Business
SoftwareEnterprise Service
Management

ERP
Business package
cloud services

System integration
for major companies

・Companies
・Government offices
・Local governments

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

Digital Entertainment Results (Consolidated)(Billion yen)

Net sales(Billion yen)(Billion yen)

25

10

21.3

100%

21.9
8

20

FY03/22
Q2

Operating profit

80%

FY03/23
Q2

YoY

Change

%

21.3

21.9

+0.5

＋2.4%

Operating profit

4.1

2.7

(1.3)

-33.5％(Operating margin)（19.4%）（12.6%）Net sales

Net sales
6

15

60%

・Expanded content and stronger marketing initiatives led
to sales growth

4.1
10

4

40%

2.7

・New record-high for quarterly sales
・Decreasing influence of pirate sites (closures of largescale pirate sites)

5

2

20%

19.4%

Operating profit

12.6%
0

0

FY03/22 FY03/23
Q2
Q2

0%

FY03/22 FY03/23
Q2
Q2

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Cost increase due to strengthened marketing6E-comic Advertising strategy led to growth and new record-highfor quarterly sales
Continue revised marketing measures of Q4 in the previous year through the first half of this year;
invest in advertising
We will consider further aggressive ad placements in the second half as we monitor ad effectivenessConfirm advertising ⇒ Aggressive advertising strategy
effectiveness
Ad placements

11.6
116

10.9
109

10.6
106

11.7
117

Peak
109
10.9

10.8
108

106
10.6

10.3
103
9.7
97

9.5
95

Bottom1Q

2Q

3Q

FY03/21
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

4Q

1Q

2Q

3Q

FY03/22
7

4Q

1Q

2Q

3Q

FY03/23

4Q

Business Solution Results (Consolidated)(Billion yen)

Net sales(Billion yen)(Billion yen)

200
20

4

80%

FY03/23
Q2

ChangeNet sales

11.0

11.1

+0.0

＋0.6%

Health IT

4.4

4.3

(0.1)

-2.8％

0.8

0.9

+0.1

＋12.7%（7.7%）（8.6%）

Operating profit
3

150
15

11.0

11.1

(Operating margin)

2

50
5

1

40%

0.8

0.9

7.7%

4.3

・Project for hospitals delayed due to seventh wave of
COVID-19 and slow hardware delivery (due tosemiconductor shortages)
・Corporate business remained steady20%

Operating profit

8.6%

・Higher profits due to higher sales
00

0

FY21 FY03/23
FY22
FY03/22
Q2
Q2
2Q
2Q

%

Net sales

100
10

4.4

60%

YoY

FY03/22
Q2

Operating profit

0%

FY03/22 FY03/23
Q2
Q2

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

8

Investments(Billion yen)(Billion yen)

Main Details

Category

1.5

Amount1.38
New business planning, research, etc.

0.23

EquityInvestment

Equity tie-ups with animation studies,etc., in the e-comic distribution service

0.49

0.23

1.16
1.0

Business
Development

0.21
0.49

E-comic(Systems development, etc.)

0.40

CapitalInvestment

0.5

Health IT(Radiology systems, etc.)

0.57

GRANDIT development, enhanced
miraimil functions

0.57
0.46

Other

0.0

0.07

0.07

FY03/22Q2

FY03/23
Q2

R&D Investment
Equity Investment

R&D
Investment

Capital Investment
Business Development

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

9AI, new technology research, etc.

0.0７

Balance Sheets (Consolidated)(Billion yen,%)

FY03/22

FY03/23 Q2

AmountCurrent assets

45.1

78.5

45.9

79.7

+0.8

Fixed assets

12.3

21.4

11.6

20.2

(0.7) Goodwill impairment -0.6

57.5

100.0

57.6

100.0

+0.0

12.4

21.6

13.0

22.6

+0.6

0.5

0.9

0.5

0.8

(0.0)

Total liabilities

12.9

22.5

13.5

23.5

+0.6

Total net assets

44.5

77.4

44.0

76.4

(0.5)

Total liabilities and net assets

57.5

100.0

57.6

100.0

+0.0

Total assets
Current liabilities
Non-current liabilities

Shareholders’ equity ratio
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

76.8%

Amount75.8%
10Composition
Ratio

Major Change Factors

Composition
Ratio

YoY

Cash Flows (Consolidated)(Billion yen)(Billion yen)・Profit before income taxes
・Change in notes and accounts
receivable-trade and contract
assets

FY03/22
Q2

・Purchase of intangible assets
・Purchase of investment securities
・Collection of guarantee deposits

FY03/23
Q2

ChangeOperating CF

3.1

4.3

+1.1

Investing CF

(0.8)

(0.3)

+0.5

Free CF

2.2

3.9

+1.6

Financing CF

(1.4)

(2.0)

(0.5)

Effects of exchange ratechanges on cash and cash
equivalents

0.0

0.0

+0.0

Change in cash and cash
equivalents

0.7

1.9

+1.1

Cash and cash equivalents,
beginning of period

29.9

31.7

+1.7

Cash and cash equivalents,
end of quarter

30.7

33.6

+2.9

・Dividends

(0.3)

(2.0)

+4.3

30

33.6
31.7

20

Beginning Operating
FY03/23
CF

InvestingCF

Cash andEquivalents
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Financing
CF

FY03/23
Q2
Cash andEquivalents

11Forecast

Earnings Forecast for FY03/23

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Earnings Forecast for FY03/2３ (Consolidated)
Comparison vs. Initial Forecast(Billion yen)
FY03/２２
Results

FY03/23
Initial Forecast*

FY03/23
Revised Forecast

Revision
Vs.
Initial Forecast

ChangeNet sales

64.5

70.0

71.0

+1.0

+6.4

Operating profit

10.0

10.5

10.5

±0

+0.4

(Operating margin)(15.6%)(15.0%)(14.8％)EBITDA

11.4

11.8

11.8

±0

+0.3

Ordinary profit

10.1

10.5

10.5

±0

+0.3

Profit attributable toowners of the parent

6.9

7.0

6.1

-0.9

-0.8

Net income pershare (yen)126.20127.80111.35-16.45-14.85

ROE

16.1%

15.2%

13.4%

-1.8

-2.7

◆ Revision based on E-comic business outlook
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

* Announced April 27, 202213

Earnings Forecast for FY03/23 (Consolidated)(Billion yen)
FY03/22 Results
1H

2H

FY03/23
FY

1H

YoY

2H(Forecast) FY (Forecast)

32.4

32.1

64.5

33.0

37.9

71.0

4.9

5.0

10.0

3.7

6.7

10.5

(15.4％)（15.9％）（15.6％）（11.2％）（17.9％）（14.8％）EBITDA

5.6

5.7

11.4

4.2

7.5

Ordinary profit

5.0

5.1

10.1

3.7

Profit attributable toowners of the parent

3.4

3.4

6.9

1.7

Net sales
Operating profit(Operating margin)

+9.9％

+0.4

+4.0％

11.8

+0.3

+3.4％

6.7

10.5

+0.3

+3.0％

4.3

6.1

-0.8

-11.8％-１４.８５-11.8％

126.20111.35

ROE

16.1%

13.4%

14

%

+6.4

Net income pershare (yen)Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Changeｰ２.7

Segment Earnings Forecast (Consolidated)[Digital Entertainment](Billion yen)

FY03/22 Results
1H

Net salesFY

YoY (%)

2H
FY(Forecast) (Forecast)

1H

1H

2H

FY

21.3

19.1

40.5

21.9

23.0

45.0

+2.4%

+20.7%+11.0%

4.1

3.6

7.7

2.7

4.2

7.0

-33.5%+17.4%-9.8%(19.4%)(18.9%)(19.1%)(12.6%)(18.4%)(15.6%)

Operating profit(Operating margin)

2H

FY03/23◆ We revised full-year forecasts upward based on 1H results and the future outlook(sales: +1.0 billion yen)[Business Solution](Billion yen)
FY03/22 Results
1H

Net sales
Health IT

Operating profit(Operating margin)

2H

FY03/23FY

YoY (%)

2H
FY(Forecast) (Forecast)

1H

1H

2H

FY

11.0

12.9

24.0

11.1

14.8

26.0

＋0.6%

＋14.4%

+8.1%

4.4

5.8

10.2

4.3

7.1

11.5

-2.8%

＋22.6%+11.7%

0.8

1.4

2.3

0.9

2.5

3.5

+12.7%＋71.8%+50.3%(7.7%)(11.4%)(9.7%)(8.6%)(17.1%)(13.5%)

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

15

Shareholder Returns

Annual dividends per share

(Yen)

50.0

50

10 YenCommemorative
Dividend

45.0

40.0

40

37.0

31.0

27.0

30
27.0

22.0

27.0
21.0

20
17.0

10

18.0
13.0

10.0

10.0

FY03/20

FY03/215.0

0FY03/19

Interim
Net income
per share (yen) 87.46◆Dividends
For FY03/2023, we forecast aninterim dividend of 18 yen and a yearend dividend of 27 yen, for a total
annual dividend of 45 yen(40.4% payout ratio)

101.32

FY03/22

FY03/23(Forecast)Year-End114.61

126.20111.35◆Shareholder Benefits
Providing shareholder benefits toshareholders owning at least one
trading unit per the register ofshareholders as of September 30,
2022(Announcement planned for the endof November)*Dividends per share and net income per share reflect stock split performed on March 1, 2019
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

16Extraordinary Losses

The former representative director of our consolidated subsidiary, Medical Create Co., Ltd.,
was arrested by the police on October 5, 2022, on suspicion of bribery.

Medical Create is cooperating fully with the police investigation.
We apologize deeply for any concern and inconvenience this may cause our customers andother concerned parties.

In connection with this matter, we recorded an extraordinary loss for impairment of

goodwill, since it has become difficult for the company to execute business as we planned
when we acquired shares of the company (which made the company a subsidiary).

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

17

Strategy

Initiatives in Key Businesses
E-Comic

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

E-comic Strategies Leading to a Return to Growth(Billion yen)

1. Optimal use of advertising and marketing
We returned to growth through aggressive
and effective ad placements.

50

40・Web/app ads, TV/video ads
・Free content, membership points
30

2. Cultivate growth businesses
・Mecha Comic App

20⇒ Independent app measures (advertising, quest functions)⇒ Free content (young segment)

・Korea Peanutoon

10⇒ Effective ad placements, enhanced original content

・Mecha Comic US release ⇒ Scheduled for December 2022

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

19

2022

2021

2020

2019

2018

2017

2015

・Capital and business alliance with TWIN ENGINE Inc.

2016

0

3. Business field expansion

E-comic Initiatives for New Business Domains
Each service is growing steadily in response to unique measures
Mecha Comic App⚫

Growing into a service with definite presencein South Korea
Aiming for further growth through originalcontent

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

FY03/23 Q2

FY03/23 Q1

FY03/22 Q4

FY03/22 Q3

FY03/22 Q2

FY03/22 Q1

FY03/21 Q1

20

FY03/21 Q4< Peanutoon Sales>

FY03/23 Q2

FY03/23 Q1

FY03/22 Q4

FY03/22 Q3

FY03/22 Q2

FY03/22 Q1

FY03/21 Q4

FY03/21 Q3

FY03/21 Q2

FY03/21 Q1

FY03/20 Q4

FY03/20 Q3

FY03/20 Q2<Cumulative App Downloads>

FY03/21 Q3⚫

⚫

Grew 1.5 times year on year, helping enhancethe overall Mecha Comic presence
Conducted effective promotions on the web
and in apps

FY03/21 Q2⚫

PeanutoonE-comic Business Development (Concept)
Content Acquisition

E-Comic Distribution

Overseas
2019~

Korea
Authors

Asia(Amateur)

Authors

Original
Comics(Pro)

Expand Content

U.S.

12/2022

Market Growth

Domestic
Publishers

M&A

DeeperCollaboration

Collaborations
With Publishers

Webtoon(Korea)Business Field
Expansion

Comic
Adaptation

Live-action
dramasAnime

DramasNovelsCopyright © 2022 INFOCOM CORPORATION. All rights reserved.

21

Equity Tie-Ups
With Animation
StudiosE-comic Expand Content
Offering and selling a wide range of works, from big titles from major publishers, specialized
WEBTOON works for e-comics, and original titles from Mecha Comic, focusing on works for women
Shonen Manga

Youth Manga

Publisher(Shueisha)

Shoujo Manga

Publisher(Shueisha)Spy × Family

Kingdom

Tatsuya Endo

Yasuhisa Hara

Publisher(Shogakukan)

Women's Manga
Publisher(Mecha Comic

Original)

InfocomMonthly Ranking*

InfocomMonthly Ranking*No.3 Overall

No.8 Overall
Mawata No Ori

Giso Kareshi ni Ai Sarete
Shimaimashita

Ira Ozaki

Kaoruko Miyama
Publisher(Kodansha)

Publisher(Kodansha)

Publisher(Mecha Comic✕ Miel）

Publisher(Reverse)

Original
First-Run

Webtoon

InfocomMonthly Ranking*

InfocomMonthly Ranking*No.1 Overall

No.2 Overall

Smile at the Runway

The Fable

Itsuwari no Ai

Kotoba Inoya

Katsuhisa Minami

Keita Kanamori / Riko Ueno

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

22

Kekkon Shobaihanheun/Antstudio/KEN/Reverse*Infocom Monthly Ranking: As of October 26, 2022

E-comic Collaborations With Publishers
Joint initiatives
with publishers
Campaign tie-ups with publishers

Original campaigns
for popular works
Unique campaigns for popular
works in Mecha Comic

Tie-up campaigns
with magazines
Joint publication of magazines
between Shueisha Grand Jump
and Mecha Comic
Sponsor regular manga awards
for submissions
Develop and distributeexclusive works

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

23

E-comic Expand Business Domains
Capital and business alliance with TWIN ENGINE Inc. (August 2022)
Bring together the expertise of the two companies, andpursue joint development projects related to planning, production,and promotion of e-comics and animation
Domestic
Overseas
Content
E-Comic
Distribution

Original Comics
Production

×

Joint
Planning

Collaboration
Promotions

Production

Animation Distribution

Original Animation

Global streaming distribution platforms,
including Netflix and Amazon
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

24

Strategy

Initiatives in Key Businesses
Health IT

Evolve Into a Services Oriented Business

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Health IT CWS Expansion

MarketEnvironment

Hospitals⚫ Overtime caps for physicians (beginning April 2024)⚫ Leverage ICT adoption enterprises and IT adoption
subsidies⚫ COVID-19-related subsidies will continue in FY03/23⚫ Begin proof-of-concept tests to relax staffing
standards, conditional on the use of IT and robots⚫ Roughly 10% of medium-sized or larger hospitals have adopted work
management systems

The number of facilities adopting CWS has increased due to thework-style reform efforts in hospitals.

・The impact of COVID-19 is subsiding, and sales arerecovering⇒ Number of adoptions in the first half exceeded all of FY2019(record high)・Easy and simple to use for nursing care companies
with more facilities and smaller in scale comparedwith hospitals

Smart CWS
Progress

Nursing Care Companies

Work-style reform
for physicians

CWS
Care staff
management

CWS
Care staff schedulemanagement

Help manage work hours
for physicians

Cumulative Numberof Facilities Making
Orders260

Currently developing a next-generation CWS for
cloud computing

CWS for Care
Capture care staff
schedule management
users

Schedulemanagement

Offer simplified
version and leveragesales companies

2014
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

2016

2018

2020
26

2022

Health IT Building a wide-area medical imaging system to shareimages from inside ambulances
Building the Oita Prefecture Remote Image Transmission System to share camera
images, EKG, and location information
Adopted in major medical institutions and all fire departments in Oita Prefecture;
first attempt in providing prefecture-wide coverage
Oita Prefecture Facilities Adopting System

System Overview

Fire departments
Disaster-response
hospitals
Hospitals

Beppu City

Oita City

Future Direction
・Link CWS schedule management system and EMC safety
confirmation system
・Deploy wide-area medical imaging systems in other areas
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

27

Health IT Custom Medical Care Initiatives
・Business alliance with Genoox, an Israeli company that provides genome medical information services
・Began marketing a genetic analysis report service for pharmaceutical companies that are pursuing generelated drug discovery such as anti-cancer drugs
Gene Analysis Report Service (Franklin)
・Analyzes, prioritizes, and builds reports for important gene mutation
types using a combination of an extensive genome database and AI
・Dramatically reduces the time required for detecting gene mutations
and researching information provides the basis for the mutation inquestion

Analysis Workflow
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

Analysis Results Display Screen
28

Health IT Pursuing Asian Healthcare
Easing of entry restrictions in various countries has stimulated collaborations with local
Hospital Information System （HIS） vendors and the search for new partners
FY03/23

FY03/22●Drug data expansion and updates ●Local language support●Data management tools development, etc.

Philippines

Domestic
Products for
Hospitals

Drug
Information
System(DI)

Completion of
drug databaseIndonesia

Creation of new
businesses inSoutheast Asia

・PoC implementation for HIS vendors and others

Business alliance with
Docquity

Docuity to commence PoC forlinking social media and drug
information(Developing social media platform
for physicians in Southeast Asia)↓
Overseas
expansion・Signed a subscription agreement with Global Telehealth Inc.
(largest telehealth company in the Philippines)

MedicalImaging
Information
SystemIndonesia

Developed a viewer formobile devices

・Introduce at CINTA KASIH TZU CHI
Hospital and other hospitals
・Roll out via Terakorp in the future

Sales support from HIS
vendor (Terakorp)(SaaS for medical
administration)

Additional investment in
Singapore-based Homage(caregiver matching company)

Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

29

・Begin healthcare data businessstudy with Stash using medical
insurance claim data

Evolve Into a Services Oriented Business Train cloud engineers
We will begin efforts to train cloud engineers, for which market demand is expected to grow in the future
Cloud Center of Excellence▼Cloud Technology Promotion Office (new)2022.04

Learn
Acquire the latest knowledge ofcloud-related technologies

Experience
Hands-on learning to build andoperate cloud services

Practice
Participate in actual cloud
construction projects

・Regular technical webinars

・Hands-on training

・Regular technical webinars

・Enriched hands-on training

・Hackathon for departments(June)

・Provide environment forhands-on development
experience

・Participate in Alterｂooth's
cloud construction project・Participate in Alterｂooth's
cloud construction projectInteract

・Conduct company-wide
technical exchange meetingon the topic of cloudutilization (November)

Expand the network of engineers
by sharing case studies
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.

2022.1030

Becoming a services company thatdelivers new value through the co-creationof ICT and real-world businesses<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 in securities 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 as of September 30, 2022. The names of the companies, services, and products stated in this document are trademarks or registered trademarks of theirrespective 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 not guarantee the accuracy or completeness of
information contained herein, which might change as new data becomes available.
Copyright © 2022 INFOCOM CORPORATION. All rights reserved.