Financial Results Reportfor Q2 of the Fiscal Year Ending March 2021

August, 2020

（TSE JASDAQ：6736）
https://www.sun-denshi.co.jp
1

０. Agenda
Table of Contents

１

Outline of Financial Results
HighlightOutline（YoY Comparison）･･････････････････････････3

２

Consolidated performance
forecast･･････････････････････････10

３

Business Strategies of SUN
CORPORATION group･･････････････････････････12

Copyright© SUNCORPORATION Ltd. All rights reserved.

2

１. Outline of financial results
Table of Contents

１

Outline of Financial Results
Highlight
Outline（YoY comparison）･･････････････････････････3

２

Consolidated performance
forecast･･････････････････････････10

３

Business Strategies of SUN
CORPORATION group･･････････････････････････12

Copyright© SUNCORPORATION Ltd. All rights reserved.

3１. Outline of financial results
Highlight by Business Segment for Q2 of FY March 2021
Net
Sales
Mobile Data
SolutionsEntertainmentRelated

New IT Business
Related

OthersCorporate ex.
Total

Operating
Profit9,214

1,993742△330136

31%（Unit Million yen）

Description―

Sales and orders for mobile forensic equipment and related
services grew steadily, resulting in an 8.5% YoY increase insales. Segment loss was lower due to the elimination of
one-time expenses generated from issuing preferred sharesthrough a third-party allotment by a subsidiary.

6.8

Net Sales & Operating profit were decreased YoY due to thedecreased amount of control board sales and consigned
development sales, while the segment profit was secured byimproving the efficiency of the Pachinko hall systembusiness.

4.2【M2M】Net Sales were increased thanks to the increasedM2M products sales. In addition, the business became
profitable due to the improved cost efficiency.
【AR】The loss decreased as the costs decreased, thanks
to the shift to focus software development.
【Game contents】
Net sales were decreased YoY, due to the termination of old
app sales, having attempted to expand the business into theoverseas market. The business became profitable because
the expenses were reduced by enhancing the work
efficiency.

107

27

25.2―

△464―

―

12,049△599――

Copyright© SUNCORPORATION Ltd. All rights reserved.

4１. Outline of financial results
Consolidated PL for Q1 of FY March ended 2021 (YoY)
FY March 2020
Q2Net Sales
COGSGross Profit
SGA ex.
Include R&D
R&D ex.
Operating profit
Ordinary profit
Net loss
attributable toSUN
CORPORATIONFY March 2021
Q2

Difference（％）

12,13012,049

△0.7

4,024

3,551

△11.8

33.2％
8,106
66.8％
9,846
81.2％
3,176
26.2％
△1,740△14.3％△1,654△13.6％△1,497△12.3％

29.5％
8,497
70.5％
9,097
75.5％
3,380
28.1％
△599
△5.0％
△541
△4.5％
△547
△4.5％（Unit Million yen）

Description
Entertainment business sales weredecreased, due to COVID-19 crisis.

△3.7Ｐ+4.1+3.7Ｐ

Gross profit increased due to a
relative increase in high-margindevelopment projects.

△7.6

Expenses (generated from issuing
preferred shares by Cellebrite througha△5.7Ｐ third-party allotment) decreased in
the previous quarter.

+6.4+1.9Ｐ―

Expenses in relation to the third party
allotment and labor cost decreased due＋9.3Ｐ
to COVID-19 crisis―＋9.1Ｐ――+7.8ＰCopyright© SUNCORPORATION Ltd. All rights reserved.

5１. Outline of financial results
Business segments information（Unit Million yen）

FY March 2020
Q2Mobile datasolutions

Entertainmentrelated

New IT businessrelated

OthersNet Sales

TotalDifference
（％）

8,491

9,214+8.5△1,273△330―

Ratio(%)――

Net Sales

2,794

1,993

△28.7

Operating Profit

242

136

△43.8

Ratio(%)

8.7

6.8△21.8P

Net Sales

698742+6.3

△206

31―

Ratio(%)―――P

Net Sales

156

107

△31.4

Operating Profit△4127――

25.2―P△461△464―

Net Sales

12,13012,049△0.7

Operating Profit△1,740△599―――Operating Profit

Operating Profit

Ratio(%)
Corporate Expenses

FY March 2021
Q2

Operating Profit

Ratio(%)

Copyright© SUNCORPORATION Ltd. All rights reserved.

―P―P6１. Outline of financial results（Reference) Total amount of orders at CellebriteDI

FY March
2018

Total

129,498

FY March2019%

100.0 171,721

FY March
2020%（Unit USD K）
FY March
2020 Q2%FY March
2021 Q2%%

100.0 201,102

100.0

89,637 100.0 109,359 100.0

AMERICAS

69,79053.9

91,51853.3

99,256

49.4

41,661

46.5

48,92444.7

EMEA

42,37732.7

57,16333.3

68,47334.0

29,64233.0

33,70530.8

APAC

17,33013.4

23,04013.4

33,373

16.6

18,33420.5

22,314

20.4

00.0

00.0

0

0.0

0

0.0

4,416

4.1

BB
AMERICASEMEAAPACBB
39,20930,158
3,398

3,955

57,17349,12542,55043,29943,757

5,504

5,979

6,966

5,834
16,403

9,901

11,67925,35325,367Q2

Q319,51044,89645,785

4,808

5,587

41,29048,555

6,218

11,843

16,74755,028
1,410

8,821

6,491

15,89322,092

14,11815,732

18,106

20,681

20,980Q4Q1Q254,331
3,006
6,421
17,257

22,17013,48016,51354,37816,44810,503
16,256Q1

FY2017

17,81020,278Q4

Q126,888

Q2

Q3
FY2018AMERICAS (Nth, MID&STH America), EMEA (Europe &Africa),
APAC (Asia/ Oceania)

34,20826,608Q3FY201923,387

21,277Q4

Q127,647Q2
FY2020Created based on the monthly Financial Report of Cellebrite.
Therefore, no accounting adjustments have been made.

Copyright© SUNCORPORATION Ltd. All rights reserved.

7１. Outline of financial results（Reference) Net Sales at CellebriteDI

FY March2018Total

111,345

FY March2019%

100.0 149,399（Unit KUSD）

FY March
2020%%FY March
2020 Q2%FY March
2021 Q2％

100.0 171,186

100.0

77,844100.0

84,503100.0

AMERICAS

63,461

57.0

82,821

55.4

89,423

52.2

39,82651.2

43,20751.1

EMEA

33,89230.4

46,31831.0

56,01632.7

27,25235.0

26,371

31.2

APAC

13,992

12.6

20,26013.6

25,74715.0

10,76613.8

13,419

15.9

00.0

00.0

00.0

00.0

1,506

1.8

BB

51,039AMERICASEMEAAPACBB
33,68534,434

2,9362,965

10,613

10,58914,34913,014

20,136

20,88020,60020,452Q2Q3Q4Q1

26,521
2,852

41,147
6,198

43,231
38,908

4,852

5,442
16,34345,77040,5995,226

39,64340,30342,51137,541

4,922

4,874

10,05438,733

4,927

5,844
13,75815,214

12,91014,364

16,075

11,17722,036

22,463

20,405

20,52023,82625,771

19,306

Q2

Q3Q4

Q1

Q2

Q3

Q4

1,139
367 8,743

4,676
12,874

13,497

8,382

15,287Q1

FY2017FY2018FY201920,81622,391

Q1Q2
FY2020Created based on the monthly Financial Report of Cellebrite.
Therefore, no accounting adjustments have been made.

Copyright© SUNCORPORATION Ltd. All rights reserved.

8

１. Outline of financial results
Consolidated B/S ( YoY )The end of March, FY ending March
2020
2021 Q2
Total Assets
Current Assets

Cash and deposit

Inventory

Fix Assets

Current Liabilities

Fix Liabilities

Net Assets

Change（％）

42,87042,496△0.8

35,42235,078△0.9

82.6％
26,390
61.6％
1,317
3.1％
7,448
17.4％
22,410
52.3％
1,855
4.3％
18,60543.4％

82.5％
26,851
63.1％
1,418
3.3％
7,418
17.4％
22,380
52.6％
1,840
4.3％
18,27543.0％（Unit Million yen）

△0.1Ｐ
+1.7+1.5Ｐ+7.6+0.2Ｐ△0.4+0.0Ｐ△0.1+0.3Ｐ△0.8+0.0Ｐ
△1.7
△0.4Ｐ

Copyright© SUNCORPORATION Ltd. All rights reserved.

Description―
Decreased in notes and accounts
receivable-trade―――
Payment made, in relation to theacquisition of BlackBag¥ -1,944 million―
Decreased in retained earnings
due to net loss attributable toshareholders of the parentcompany
9２. Consolidated performance forecastTable of Contents

１Outline of Financial Results
Highlight
Outline（YoY Comparison）･･････････････････････････3

２

Consolidated performance
forecast･･････････････････････････10

３

Business Strategies of SUN
CORPORATION group･･････････････････････････12

Copyright© SUNCORPORATION Ltd. All rights reserved.

10

２. Consolidated performance forecast
Consolidated performance forecast for FY ending March 2021

Our consolidated performance forecast has not been determined
for the fiscal year ending March 2021
Impact from Covid-19 crisis Mobile data solutionsDue to the lockdowns in major countries such as US and European countries, sales have been stagnant
and exhibitions and sales activities in US have been postponed, which may have a significant impact on
the business, resulting in decreased orders and sales. If COVID-19 positive cases are found in the team,regular software updates may not be feasible.
 Entertainment-related
Under the state of emergency in Japan, pachinko halls have been requested to close their halls for awhile. It may cause sales of the pachinko/pachinko slot machines and parlor equipment to be decreased.
If COVID-19 positive cases are found in the team, sales of consigned development projects may decline,
due to limited resources.
 New IT business related
In the M2M business, meetings with customers have been postponed, which resulted in slowing down
sales activities. Therefore, sales may decline.

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11

３. Business Strategies of SUNCORP group
Table of Contents

１

Outline of Financial Results
HighlightOutline（YoY Comaprison）･･････････････････････････3

２

Consolidated performance
forecast･･････････････････････････10

３

Business Strategies of SUN
CORP group･･････････････････････････12

Copyright© SUNCORPORATION Ltd. All rights reserved.

12

３. Business Strategies of SUNCORP group
Roadmap（FY 2017/3- FY2023/3 Consolidated Net Sales）
Focusing on DI business
Promoting administrative improvement by improving the efficiency
Description

Target（FY 2023/3）
Net Sales ¥35 billion
Allocating large part of resources into DI business. Focusing on
the DI business as part of our group business strategies.

Net Sales

2017/3

Net Sales DI

Net Sales SecurityNet Sales M２M
2018/3

Net Sales AR
2019/3
ActualNet Sales Pachinko Parts
Net Sales O2O
2020/32021/3

Net Sales Pachinko hall
Net Sales Game
2022/3

 Change in mid-term sales target
due to COVID-19 crisis
Net Sales of FY ending March 2023

¥33 billion (Sales are expected todecline due to the business transferof O2O and SUNTAC.) Business selection and focus
・ The budget structure was definedbasing on an aggressive strategy,
prioritizing the business expansion, butin anticipation of the medium- to longterm impact of the change, the budget
structure has been revised to bedefensive.
・While prioritizing the development ofexisting businesses, the company willcontinue exploring the cyber security
market, making most of our network inIsrael and other countries.
・ Promote administrative improvements
by enhancing the efficiency in ourbusiness development process.

2023/3

Forecast

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13

３. Business Strategies of SUNCORP group
DI Measures（M&A for inorganic growth）

Continuing efforts toward inorganic growth
Strategies for the next FY

 Remote work was enforced due to COVID-19 crisis, which resulted in security risks being taken more
seriously.
 Becoming a market leader by providing leading-edge digital intelligence solutions.
 Launching the Connect Global Virtual Summit to create a forum for digital research leaders,eDiscovery professionals and the DFIR community to create a safer world.

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14

３. Business Strategies of SUNCORP group
Rebuild our business portfolio

Build the business structure under the new management
Purpose To clarify what business to select and focus
 To improve the financial structure

Policy Maintain profitability of the major businesses which are our revenue source.
(Mobile data, Entertainment related) Selective investment into M2M business and upgrade the major products.
 Attempt to maximize the synergy effect (AR, Game contents).

Execution
 Large part of SUNTAC shares held by SUN Corporation were transferred toJALCO Holdings, which resulted in SUNTAC becoming a non-subsidiary, with
JALCO HD holding 86% and Sun Corporation holding 14%.
 Accelerating business improvements by our New Organization
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15

３. Business Strategies of SUNCORP group
Collaboration with other companies（AceReal Smartglasses）

Providing solution of remote work support “AceReal for docomo”
Utilizing 5G and AceReal SmartglassesFeatureLive video and audio streaming
Instruction manuals and images can be displayed on glasses using PC.
Realizing higher security and lower latency by using "Cloud Direct", directly
connected to the cloud platform through DoCoMo's 5G*
No setting required and committed customer support

Major functions of AceReal Apps
・Video calls
・Displaying instruction manuals
・Check list function
・File transmission
・Video recording and playing
・Image processing and editing

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16

Explanatory material of Financial Resultsfor Q2 of the Fiscal Year Ending March 2021
The business forecasts and future projections contained in this presentation are based on information available as of thedate of the presentation being published. Actual results may change due to risks or uncertain factors in relation tosubsequent economic circumstances, market situation, or competition.
All values less than one million yen indicated are rounded down.

Contact information:
SUNCORPORATION
Corporate Strategy Division
Email : ir@sun-denshi.co.jp
Copyright© SUNCORPORATION Ltd. All rights reserved.

17