Financial Results Briefing for Q2 FY03/2020

Infocom Corporation
October 30, 2019

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INFOCOM CORPORATION. All rights reserved.

Contents
01

Financial Results for Q2 FY03/20
02

Earnings Forecast for FY03/20
03

Initiatives for FY03/20
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01

Financial Results for Q2 FY03/20

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Q2 FY03/20 Results (Consolidated)
Net sales＋19.7%(Billion yen)

＋48.8%(Billion yen)40

27.630

Profit attributableto owners of parent

Operating profit+37.2%(Billion yen)

10.0

10.0

7.5

7.5

23.1205.0

102.500.0

FY03/19

FY03/20

3.8
2.5

5.0

2.5

2.5

1.80.0FY03/19

FY03/20

FY03/19

FY03/20◆Core businesses (e-comics, health IT) recorded strong sales and profit performance
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Q2 FY03/20 Results (Consolidated)(Billion yen,%)

FY03/19

YoY

FY03/20

Change%Operating profit(Operating margin)

2.5

27.6
3.8（11.2）（14.0）EBITDA

3.1

4.4

+1.3

+42.0

Ordinary profit

2.6

3.8+1.2+48.1

Profit attributableto owners of parent

1.82.5+0.6+37.2

Net sales

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23.1+4.5+19.7+1.2+48.84

Business Areas and Segment Structure
Digital EntertainmentGroup

Business Solution Group

Health IT

Business SoftwareEnterprise Service Management

Digital Entertainment

Package services
for medicalinstitutions

ERP・RPABusiness package
cloud services

System integration
for major companies

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

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

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

・General consumers

5Business Solution Results (Consolidated)
Net sales(Billion yen,%)Operating profit(Billion yen)

FY03/19(Billion yen)

15

11.6

125

100%

480%

10.2

FY03/20

YoYChange%

Net sales

10.2

11.6+1.3+12.9

Health IT

3.9

4.8+0.8+22.8

Operating profit

0.4

1.3+0.9+227.6(3.9)(11.4)

9360%(Operating margin)

6240%

Net sales

20%Strong performance in services for hospitals/corporate customers
Positive impact of work to convert hospitals to new Imperial era name inJapan and increase in Japan’s consumption tax rate

1.3
34.8

3.9

10.4
11.4%

00

FY03/19

FY03/203.9%

0%FY03/19FY03/20

Health IT
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Operating profit
Significant growth in profits due to strong performance inhospital/corporate license sales
6Digital Entertainment Results (Consolidated)(Billion yen,%)Operating profit

Net sales

FY03/19(Billion yen)(Billion yen)205100%

480%

16.0
151015.8

2.1

2.5210

17.1%

15.8%

0

FY03/19 FY03/20%

16.0+3.2+25.1

E-comic

12.4

15.8+3.4+27.8

Operating profit

2.1

2.5+0.3

+15.9

60%

(Operating margin)(17.1)(15.8)

40%

Net sales

20%0%FY03/19 FY03/20

E-comic
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Change

12.8

12.4
5YoY

Net sales

12.8
3

FY03/20

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E-comic distribution service experienced strongperformance

Operating profit
Higher profits; absorbed investment-related costs
for overseas expansion, and app development
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Q2 FY03/20 Results of E-Comic Distribution Service(Billion yen)9753

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
FY03/17
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FY03/18

FY03/19

FY03/208

Investments(Billion yen)

R&D

CapitalEquity30.1

20BusinessNew business planning, research,
Development demonstration tests, etc.

EquityInvestment

1.1

1.8

0.2
0.4
0.3
0.1

0.40.0FY03/19

FY03/20

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Conversion of Korean e-comic distribution
business to a consolidated subsidiary
Conversion of nursing professional
recruitment company to a consolidated
subsidiary, etc.

Amount0.1

1.8

E-comic(App development, Enhancement of server
facilities, etc.）
CapitalInvestment

Health IT

0.4

GRANDIT
Other
R&D
Investment

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Main Details

Category

2.51(Billion yen)Bus. Development

AI, new technology research, etc.

0.0

9

Balance Sheets (Consolidated)(Billion yen,%)

FY03/19
Amount2Q FY03/20

Composition
Ratio

AmountComposition
Ratio

YoY

Major Change Factors

Current assets32.4

74.3

31.8

72.6

Fixed assets

11.2

25.7

12.0

27.4

・Cash and deposits +0.3(0.6) ・Notes and accounts receivable -1.1
・Goodwill +1.2
+0.8 ・Investments and other assets -0.4

43.6

100.0

43.8

100.0

+0.2

21.4

0.5

・Accounts payable-trade -0.1
(1.2) ・Income taxes payable -0.4
・Provision for bonuses -0.3
(0.0)

Total assets
Current liabilities

Non-current liabilities

10.6
0.2

0.7

9.3
0.2

24.4

Total liabilities

10.9

25.1

9.6

21.9(1.3)

Total net assets

32.774.9

34.2

78.1+1.5

Total liabilities and net assets

43.6

100.0

43.8

100.0+0.2

Shareholders’ equity ratio

74.6%

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・Retained earnings +1.6

77.2%
10

Cash Flows (Consolidated)(Billion yen)(Billion yen)・Profit before income taxes

25+3.020(1.6)

・Dividends

(0.9)

1510

20.5

20.1

50
Beginning
FY03/20

OperatingCF

InvestingCF

FinancingCF

Cash andEquivalents

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2Q
FY03/192Q
FY03/20

ChangeOperating CF

2.0

3.0+0.9

Investing CF(0.6)

(1.6)

(0.9)

Free CF

1.3

1.3+0.0

Financing CF(0.7)

(0.9)

(0.1)

0.0

(0.0)

(0.0)

0.5

0.3

(0.1)

Cash and cash equivalents,
beginning of period

16.6

20.1

+3.5

Cash and cash equivalents,
end of quarter

17.1

20.5

+3.3

・Purchase of shares of subsidiaries

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2Q
FY03/20
Cash andEquivalents

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

11

02

Earnings Forecast for FY03/20

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Earnings Forecast for FY03/20 (Consolidated)(Billion yen,%)

FY03/19
Results

FY03/20
New Forecast

YoY
Change%FY03/20
Initial Forecast

51.7

58.5+6.7+13.1

57.0

Operating profit

6.8

8.2

+1.3

+19.0

7.8

（Operating margin）(13.3)（14.0）EBITDA

8.0

9.4

+1.3

+17.4

9.0

Ordinary income

6.8

8.2

+1.3

+19.3

7.8

Profit attributable to owners of
the parent

4.7

5.5

+0.7

+15.0

5.2

87.46
15.7

100.5315.9+13.08

+15.0

95.07
15.1

Net sales

Net income per share (yen)ROE（％）（13.7）+0.2◆Upward revision of fiscal year forecasts based on first-half results and outlook for core businesses
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13Progress Toward Medium-Term Management Plan Targets (Growth, Profitability)(Billion yen,%)

FY03/20
TargetGrowthtarget
achievement
ratio(%)

FY03/20
ForecastNet sales

60 to 80

58.5

97.5

EBITDA（*１）

7 to 10

9.4

134.3

70%

75.0%

107.1

10% and over

15.9%

159.1

Ratio of core businesses（*２）

Profitability ROE◆Forecast general achievement of targets based on growth in core e-comic andhealth IT businesses◆Continue M&A activities
(*1)
(*2)

Operating income + depreciation and amortization
Ratio of sales from core businesses (e-comic, health IT) to total consolidated sales

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Business Solution Group Earnings Forecast (Consolidated)(Billion yen,%)Operating profit

Net sales(Billion yen)

FY03/19
Results(Billion yen)

30

5

24.2

100%

25.0
42.9

360%

YoY
Change%Net sales

24.2

25.0+0.7+3.2

Health IT

9.8

10.6+0.8+8.7Operating profit

2.4

2.9+0.4+16.6(Operating margin)(10.3)(11.6)

80%

20

FY03/20
Forecast

2.4240%

109.8

10.6

111.6%

20%

Net sales
Expecting favorable performance in Q3 health IT,
despite earlier up-front purchases ahead ofconsumption tax increase

10.3%

000%

FY03/19 FY03/20

FY03/19 FY03/20（Forcast）（Forcast）

Health IT
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Operating profit
Expecting higher profits driven by sales tohospitals/corporate customers
15Digital Entertainment Segment Earnings Forecast (Consolidated)Operating profit

Net sales(Billion yen)(Billion yen)40

10100%

33.5
30880%

27.4

5.3

620
33.2

0Change%

Net sales

27.4

33.5+6.0+21.9

E-comic

26.6

33.2+6.5+24.5

Operating profit

4.3

5.3+0.9+20.7(Operating margin)(16.0)(15.8)Net sales

4.3
42

FY03/20
Forecast

60%

40%

26.6
10

FY03/19Results(Billion yen,%)
YoY

16.0%

15.8%

020%0%

FY03/19 FY03/20

FY03/19 FY03/20（Forcast）（Forcast）

Expect strong performance in e-comic
20%-plus growth year on year

Operating profitHigher profits due to increase in e-comic sales

E-comic
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Shareholder Returns（Yen）

Annual dividends per share40◆Dividends
29.030
22.0
19.0

20

19.0

（Year-End）

11.0

12.5

◆Shareholder benefits

1010.0(Interim)

0FY03/16

FY03/17

Implement interim dividend of ¥10 per share
for FYE March 2020
Project year-end dividend of ¥19 per sharefor an annual dividend of ¥29 per share

FY03/18

FY03/19

FY03/20
FY03/20

Implement for shareholders of record as of
September 30, 2019 who own at least one trading
unit (announcement scheduled for the end ofNovember)（Forecast）
Net incomeper share(yen)

13.32

59.64

84.85

87.46

100.53＊ Dividends per share and net income per share reflect stock split performed on March 1, 2019
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Initiatives for FY03/20

E-comic

First-Half Initiatives⚫ Optimize digital advertising through data analysis⚫ Release of Meccha Comics mobile app
Second-Half Initiatives⚫ Improve recommendation function⚫ Digital signage in Yamanote Line train cars
⚫ Free content promotion tied to TV commercials

Other⚫ Korean Business

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Initiatives for FY03/20

First-Half Initiatives

Health IT⚫ Expand services for medical/nursing care
employees
Second-Half Initiatives⚫ Employment management system for nursing
care field⚫ Career change support service for nursing
professionals who tend to serve longer periodsof employment with employers⚫ Overseas expansion

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Health IT Second-Half Initiatives －Overseas Expansion
Create new healthcare-related businesses across Southeast Asia
Southeast Asian Healthcare Market• Rising awareness of health, driven by increase in lifestylediseases• Medical costs in 10 ASEAN countries rising 10%-plus inrecent years• Rising demand for use of healthcare IT withadvancements in health care

Infocom Initiatives

No. of hospitals per 10,000 people
Population in parenthesis (Unit : million)
Japan

0.67
(120)

Thailand

0.20
(70)

Vietnam

0.13

Malaysia(90)

Philippines

0.11

Feb. 2016 Launched GnB Accelerator, startup venture0.17(30)(100)

support program in Indonesia⇒ Investigate potential business expansion
SingaporeOct. 2019

Signed agreement with HealthXCapital, venture capital fundspecializing in healthcare

0.03（6）

Indonesia0.03（260）*Fund investing in healthcare ventures dealing in healthcare IT,
diagnostic and medical treatment equipment, etc.
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【Reference】

E-Book Market Growth(Billion yen)

500

400

300

200

100

Source: E-Book Business Survey Report 2019
(July 31, 2019); Impress Corporation02016

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2019
2020
2021
2022
2023
(Forecast) (Forecast) (Forecast) (Forecast) (Forecast)

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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 ondata as of September 30, 2019.
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
not guarantee the accuracy or completeness of information contained herein, which might change as new data becomes available.

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