Contents
Net One by the Numbers

11
13
15
17

Corporate History

Net One’s Visions for Itself and Society
Message from the CEO
Message from the Chairperson of
the Board of Directors

Related page

P.29

Chapter 2: Growth Strategy

Service ratio

ROE

Operating margin

Customer satisfaction

Ratio of Independent
Outside Executive Directors

45.2 %

20.1 %

9.8 %

78.3 %

66.7 %

Accelerate the shift to services
and achieve customer success

Maintaining a high level ofcapital efficiency

Review of Operations
The Societal Prevalence of Net One
Establishment of netone valley

Value Creation

Value Creation Process
Materiality
Acceleration of Our Shift toward Services
Achieving Customer Success
Capital Supporting Value Creation

31
33
34
35
37

Message from the COO
Message from the CSDO
Message from the CTO

Progress toward the fulfillment of key materiality-related KPIs
Related page

P.21

Chapter 1: Materiality

Solving social challenges
Solution revenue

Message from the CFO
Message from the CHRO, CRO, and CCO

Management Capital

Professional Personnel
Design Capabilities

Train personnel
for the next generation
Security personnel
CISSP holder

FY2022

FY2024¥7.2¥30.0
billionbillionFY202223

FY203080

Registered Information
Security Specialist

FY2022

FY2030

Green ICT

51

Co-creation Capabilities

Cloud personnel
Front divisions

FY2022

FY2030

Up

Up

93%

GovernanceCorporate divisions

49

Executives

Enterprise Market

59
61
63
64

Financial and Non-financial Highlights

Telecom Carrier Market
Public Market
Partner Business

FY2022

FY2030Up

Up

April 2023

FY20307.8% 15% 28.6% 50%
50

Editorial policy

Reference guidelines

The net one report is published to inform all stakeholders of the Net One Group regarding our
growth strategy, value creation efforts, and the sustainability management concepts andinitiatives we have adopted as we aim to realize our Purpose. Our net one report for fiscal 2023
introduces the value creation measures we are implementing as we aim to attain our Vision for2030 in accordance with the central idea of shifting toward services and ensuring sustainability
management. In addition, the separate “Sustainability Data Book 2023” covers the Net One
Group’s progress in implementing materiality-related initiatives, including ESG performance data.
In this report, figures for financial results from fiscal 2014 to fiscal 2019 have been restated toreflect the revisions that were made to past financial results disclosed in December 2020.

Ministry of Economy, Trade and Industry:
Guidance for Collaborative Value Creation

Notes on included matters

Glossary

The names of each company in the net one report are trademarks or registered trademarks ofeach company. “Health Management®” is a registered trademark of the Nonprofit Organization
Kenkokeiei.

net one report 2023

FY203050150Consolidated Financial Data
External Evaluation

68.0% 90%

April 2023

International Integrated Reporting Council (IIRC)
The International <IR> Framework

Forward-looking statements
This report contains forward-looking statements that involve
inherent risks and uncertainties and therefore may differ materiallyfrom actual results. Forward-looking statements are based on
information currently available to the Company and investors
should not place undue reliance on them. The Company
undertakes no obligation to update or revise current forecasts inthis report to reflect events, changes in the operating environment
or other unforeseen developments that may occur in the future.

Disclosure tools for financial
and non-financial information“net one report”: An integrated report comprising content focusedon the importance and story lines of our value creation andsustainability.
“Sustainability Data Book (SDB)”: A data book focused on thecompleteness of non-financial information such as reports on ESG
initiatives.

Financialinformation
Annual Securities
ReportFinancial Results
Financial Results
Briefing Materials
etc.

net onereportFinancial andnon-financial integration
Importance:
Emphasison storytelling

Business Segments

51
53
55
57

FY2030

Ratio of female
new graduate hires

GovernanceDX personnel

Message from the Chairperson of
the Audit and Supervisory Committee

Business Segments

FY2022

Ratio of female
managers

50 %Corporate Governance

23

Percentage of male
employees taking childcare
leave or special leave for childbirth

100

45
48

Chapter 5

Two of our Outside
Executive Directors are women
An Outside Executive Director serves as
the Chairman of the Board of Directors

Management Capital

Status of Medium-Term Business Plan and
Progress toward Associated Targets

Chapter 4

Overall satisfaction improved
0.1 points year on year

Growth Strategy

29

Chapter 3

High value-added businessand improved productivity

Growth Strategy

Chapter 2

39
41
42
43

Major achievements in fiscal 2022

Value Creation

19
21
23
25
27

Introduction

1
3
5
9

Chapter 1

1

Net One by the Numbers

Non-financial
information
Sustainability website,
etc.

SDB

Emphasis on
breadth of non-financial
information

net one report 2023

2

As the pace of digitalization picks up in virtually every industry, we will proactively facilitate proper
adaptation by designing connections that link people and networks. Moving forward, we will leverage theunique critical assessment capabilities we have developed through our effective utilization of ICT as we
consistently innovate solutions for social challenges and provide society with value underpinned by ourproven technological capabilities.

Resolution of

PMVV-W

Decliningbirthrate
and aging
population

PurposeGreen growth

VisionVisionWAY(Code of Conduct)

the potential of people and networks, and create a prosperous future
Purpose Unleashby carrying on / inheriting tradition and making innovation happen

Smart manufacturing

Unleash thepotential of people and networks, and create a prosperous future

by carrying

on / inheriting tradition and making innovation happen

Growthstrategy

Acceleration of shift toward
services, acquisition anddemonstration of strengths

Realizing
our Purpose

Facilitating more robust
customer success

Reinforcement ofour business base

Corporate culture reform / thorough visualization /personnel strategy

Socialresponsibility

Promoting materiality-related initiatives
in accordance with our Sustainability Policy

Key strategies

Prosperous future

Unleashing the potential ofpeople and networksof our Medium-Term Business Plan

Sustainable growth

Each of us is a professional with outstanding expertise and high ethical standards,
and contributes to solving the problems of society and our customers

Business Segments

net one report 2023

Social infrastructure to realize Society 5.0

Governance

Adapting to change
while targetingsustainable growth

Digital government

Management Capital

Values3

Regional
revitalization

areas of our Medium-Term Business Plan

Growth Strategy

MissionMissionMissionVisionThree focus

social challenges

Value Creation

Technological advancements
Stakeholder support

Introduction

Net One’s Visions for Itself and Society

Act with pride as a leading network company
Create added value unique to Net One and achieve sustained growth● Continue to be an elite group of people who train their minds
and skills through continuous self-improvement● Maintain an appropriate profit structure to fulfill our responsibilities toa wide range of stakeholders●●

net one report 2023

4

Message from the CEO

Now is the time to restructure the relationships
between people and digital technology anddemonstrate the true value that the Net One
Group provides in pursuit of a better society.

Value Creation

In accordance with its Purpose, the Net One Group aims to“unleash the potential of people and networks, and create aprosperous future by carrying on / inheriting tradition andmaking innovation happen.” To understand what is meant by“prosperous future,” we must first unravel the relationships
between people and digital technology. The evolution of
networks has eliminated borders that previously
compartmentalized different elements of information
distribution, while ICT has become increasingly convenient in awide range of contexts. However, at present, I personally feelthat we still have a long way to go before we can confidently

say that people are truly using ICT effectively. True, generativeAI, for example, can do in a matter of minutes what used torequire one person an hour to accomplish. At first glance, thismay seem like an improvement in productivity, but I believethat true improvement in productivity is not measured by thelength of time spent on a job, but rather by how much of thesurplus output created through the use of AI can be allocatedto tasks which only humans can perform. This belief is what
we have in mind when we talk about “unleashing the potentialof people;” in the context of human activity, ICT should beviewed as a supplemental tool to be used by all people,
regardless of race, gender, nationality, or physical ability, inorder to maximize their own abilities. If utilized in this way, ICT
will enable all people to influence each other, address
emergent issues, and facilitate the creation of a better society.
This scenario constitutes the Net One Group’s vision of a“prosperous future.”

Introduction

As a leading network company,
we will create a prosperous future
by maximizing human abilities throughoptimal ICT application.

Realizing our Purpose

Growth Strategy

The trend toward digitalization is accelerating amidchanges in our external environment, including the
emergence of geopolitical risks and a declining
population in Japan. Under these circumstances,
networks, which serve as the foundation for
digitalization, are indispensable. Accordingly, the Net

Management Capital

One Group remains keenly aware that expectations
are high. Many are waiting to see what kind of value
the Net One Group will deliver to society when thetime for digitalization is now or never. Please allow me
the opportunity to explain our vision for the future.

GovernanceBusiness Segments

Takafumi Takeshita
President & CEO
Net One Systems Co., Ltd.

Photo: netone valley’s VALLEY*1 space*1. This is the central gathering place of the “netone valley” innovation center. The VALLEY area connects people, technology, and information to accelerate collaboration and synergy.

5net one report 2023

net one report 2023

6

Message from the CEO

Overall, we are confident that we generated favorable progress
during fiscal 2022. We are continuously establishing andimproving the foundations for our service strategy, which is a
key focus of the growth strategy outlined within our MediumTerm Business Plan. Additionally, we firmly believe that fiscal
2023, the second year of our Medium-Term Business Plan, will
be a turning point on the road to our next major leap forward.
When listening to casual conversations among our employees,
I now commonly hear them talking about services rather thanreferencing product sales models focused on network
equipment.

Our second founding

Pursuing true innovation through theelimination of boundaries and developing
the Net One Group into an organization thatgenerates extraordinary breakthroughs

Business Segments

net one report 2023

We spent the year laying the foundationfor our next major leap forward,
while systematically promoting personnel
strategies and reinforcing our businessfoundations.

Governance

7

Progress achieved during the first year of
our Medium-Term Business Plan

Management Capital

Following discussions regarding its medium- to long-term
vision, the Net One Group’s Board of Directors established a“Vision for 2030” that is based on the four themes set forth inits overall Vision. Underlying the Vision for 2030 in its entirety is
the concept of continuity; the Company is charged with boththe mission and responsibility of surviving and continuing toprovide value as a public institution that exists for the benefit ofsociety. In accordance with this fundamental idea, please allow
me to convey the intentions and purposes behind each of thethemes underlying Vision for 2030.
First, the Net One Group aims to become a “leading
company” that is recognized and respected by domestic
companies in all industries. While we are proud of our status
as a leading network company, we also aspire to be a leading
company in other fields, including sustainability management
focused on non-financial capital. I believe that the power todecide if we are a leading company lies in the hands of others.
Undergoing objective evaluations from all possible
perspectives, including market and sustainability-related
performance metrics, we will fulfill our responsibilities and earn
recognition as an exemplary company. Through these efforts,
we will establish a reputation as a role model corporation in
Japan. I firmly believe this is the pathway forward for the Net
One Group.
Second, we aim to create value that facilitates objective
evaluation, while continuing to boost added value. This theme
incorporates the idea that the very existence of the Net One
Group, as well as its capacities for critical assessment andachievement, constitutes added value. Through sustainability

operating up until the present thanks to the support ofcustomers, partners, shareholders, our employees and theirfamilies, our local communities, and many others.
As we reflect on our history and progress to date, we are
now undergoing a second founding, creating a new Net One
Group that will facilitate the achievement of further growth
moving forward. In May 2023, we launched the “netone valley”
innovation center as a new business base and a strategic
location through which employees can take on the challengeof creating new value and charting pathways toward aprosperous future. Utilizing netone valley as a starting point,
we will embark upon our journey toward the creation of a new
future for the Net One Group. The key concept behind these
efforts will be the elimination of boundaries. Boundaries canimpact both how employees work and the relationships
between employees and our stakeholders. We encourage our
employees to f reely take adv a n ta ge of a l l a v a i l a bl e
opportunities to build a new future through their work styles
and daily lives. At the same time, we call upon our
stakeholders to share ideas that will facilitate our transition
toward this future. In this sense, netone valley could be viewed
as a giant front porch; just as back in the “good old days,”when people gathered on the front porch, a space neither
inside nor outside the home, to talk about all sorts of topics,
we will aim to explore a wide range of possibilities together
within a relaxed environment that is not constrained by normal
business conventions. I firmly believe that true innovation iscreated at times, and in places, such as these.
The development of netone valley remains incomplete. We
plan to continue updating the facility’s equipment andsoftware. Furthermore, we will simultaneously continue to“update” ourselves, refining our capabilities without amoment’s pause. By creating innovation that is nourished bytradition, we will unleash the potential of both people andnetworks. Furthermore, we will generate further traditions
through the innovation thereby achieved. We hope that you are
excited about both the innovation we will create moving
forward and the prosperous future we aim to achieve, and we
humbly request your ongoing support as we pursue theseobjectives.

Growth Strategy

We have established a “Vision for 2030”
that consists of four themes and is centrally
focused on the concept of continuity.

Our shift toward services is strategically critical to thecontinuity of our Group. By establishing a business model
grounded in recurring revenue, we will ensure our ability togenerate stable earnings throughout the year, while conducting
personnel planning and development. We also believe in theimportance of building ongoing relationships with ourcustomers through services. With this goal in mind, we
recognize the critical strategic significance of creating a service
lineup that is “standardized to the point at which it can be fully
customized,” thereby enabling us to respond to a diverse
range of customer needs.
With regard to our personnel strategy, we plan to begin
defining the necessary capabilities and drafting staffing plans
for the realization of our Vision for 2030, which describes the
future position in which we want to be. Afterward, we will
identify discrepancies between our current circumstances andour desired future through backcasting and adopt appropriate
measures for addressing these discrepancies. Furthermore, by
sharing the details of these processes with employees, we will
aim to establish a system through which employees cancompare the Company’s assessments of their aptitudes andtalents with their own ideal visions for themselves and makeadjustments accordingly, thereby enhancing employee
engagement. As a starting point, we established a new
personnel system in fiscal 2022. Employees are the wellspringfrom which the Net One Group creates value. Therefore, eachand every employee is encouraged to chart his or her own
career path, hone his or her abilities, and further improve
performance through appropriate self-evaluation. Throughthese efforts, the Net One Group will continue to achieve
growth. To facilitate the achievement of this advantageous andself-perpetuating cycle, we will implement comprehensive
strategies that cover a wide range of business elements,
including compensation, training, and recruitment.
Meanwhile, we are making steady progress toward thereinforcement of our business base. As part of our corporate
culture reform efforts, we have been concentrating on activities
aimed at driving home our corporate philosophy system infiscal 2022, and our employees have demonstrated a strong
appreciation for this system. In fiscal 2024, the final year of our
Medium-Term Business Plan, we aim to develop thisappreciation into resonance, thereby leading the Group into aphase within which its employees can take decisive andindependent action. In the more distant future, we would liketo elevate this resonance to the level of harmonization, thus
entering a stage during which employees can effectively
influence and motivate those around them.

Value Creation

Medium- to long-term vision

management, we will ensure that all of our employees are able
to perform their professional duties with vitality andenthusiasm, while also guaranteeing that our impact on ourcustomers and society at large will be evermore positive.
Third, to facilitate our evolution toward the company I havedescribed, we will establish an “elite group” of professionals.
The Net One Group firmly believes that a professional isdistinct from an expert; an expert is someone who, due tosurrounding circumstances, is the only individual who iscapable of performing a task, while a true professional issomeone who is able to systematize and pass on intellectual
capital, thereby enhancing the overall strength of anorganization. Moving forward, the Net One Group will continue
to transform itself into a leading company while maintaining
teamwork as its cornerstone.
Finally, with regard to the fourth and final theme, which
concerns profit structure, we are targeting ongoing growth for
the Net One Group. As time progresses, we will establish an
appropriate profit structure and build a foundation that will
enable us to steadily and independently take all necessary
steps forward, thereby transitioning into a new phase of value
creation.
By the end of our current Medium-Term Business Plan, we
aim to establish five cultural practices that will serve as
benchmarks for measuring progress toward achieving our
medium- to long-term vision: creating value as a team,relishing challenges, maintaining purpose-driven attitudes,
showing mutual support, and confronting risks. These cultural
practices are not independent of each other, but are instead
inextricably linked. Rather than avoiding risk, we will motivate
ourselves to consider how we can minimize risk to support theachievement of our objectives and how we can support eachother as members of the same team to facilitate this process.
Through these efforts, we will collectively generate new value.
Establishing these new cultural practices will be part of ourcorporate culture reform efforts, and will serve as the first step
toward strengthening our governance. I recognize that thefulfillment of our Vision for 2030 is a critical milestone toward
the attainment of our Mission, which I shared when I assumed
my position as president of the Company.

Introduction

We firmly believe that the driving force behind our efforts tofacilitate a “prosperous future” is our capacity for “criticalassessment,” a capability that the Net One Group has
consistently maintained and refined throughout its existence.
From the time of our founding, when computer networks were
not commonplace, we recognized that the evolution of
networks would revolutionize our perceptions of physicaldistance and human connections, while also impacting our
personal values and culture. We accordingly improved ourtechnologies in accordance with a core objective ofincorporating network application to ensure that thesechanges would enrich human lives. Along the way, we
experienced both successes and failures and developed
realistic frames of reference through which we could evaluate
our progress. Consequently, we were able to improve ourcritical assessment capabilities, which enabled us to identify
the true issues our clients were facing and the goals they wereaiming to achieve, while also enhancing our ability to facilitate
the achievement of these goals. Moving forward, we must
explore different ways to stay abreast of rapidly emerging
technologies, ensure their safety, and provide advice regarding
their optimal utilization, thereby allowing their users to masterthem without the need for compromising adaptations. I am
confident that now is the time for the Net One Group to
demonstrate its true strength.

Net One Systems, which started with just ¥200 million incapital and only ten employees, celebrated the 35th
anniversary of its founding this year. Currently, we have ¥12.2
billion in capital, more than 2,500 employees, and revenue
equivalent to more than six times the amount we reported for
2000, the year we went public. We have been able to continue

net one report 2023

8

Enhancement of nomination and remuneration systems

Independent Outside Executive Director
Chairperson of the Board of Directors
Attorney at law
Photo: netone valley’s INFORMATION HUB*1 space*1. Located within the “netone valley” innovation center, this is a space for gathering information. Its design facilitates chance encounters and encourages personal exploration.

We will facilitate a shift toward proactive management
while enhancing both internal and external communication.
Governance reform

Challenges and response measures associated with assessments of effectivenessStatus of response in fiscal 2022

Enhancement of wide-ranging
discussions based on
management strategies

We established “visualization” as a priority theme for deliberation and held objective data-based discussions regarding thestatus of the Group and other issues once every three months.
During monthly meetings of the Board of Directors, the Governance and Corporate Culture Advisory Committee reported on
the progress of corporate culture reforms and recurrence prevention measures, thereby enhancing subsequent discussions.

Review of agenda items for the
Board of Directors meetings

We used our transition into a company with an audit and supervisory committee as an opportunity to delegate approximately
70% of decision-making authority formerly held by the Board of Directors to the Management Committee and other bodies.

Acquisition of time for discussion
on important issues throughsystematic planning of agenda
items

We successfully established year-long systematic administration through the formulation of annual agendas at the beginningof the fiscal year.
Compared to the previous year (July through March), we lowered the number of agenda items for meetings of the Board of
Directors from 165 to 102 (a year-on-year decrease of 38%) and increased the average time spent discussing each agenda
item from 13 minutes to 21 minutes.

net one report 2023

Support risk management to accelerate
our shift toward services
Independent outside executive directors are responsible forbalancing, and preventing abuse of, managerial authority.
However, we also recognize the important role that outside
perspectives fulfill with regard to supporting proactive
management. Proactive approaches are always accompanied
by risks, some of which are unprecedented. Nevertheless,these risks are an unavoidable reality when it comes toachieving growth.
To facilitate business execution, independent outside
executive directors like myself should support uninhibited andenthusiastic idea sharing and challenge acceptance byproactively identifying possible risks and proposing solutions
for addressing them. The Company’s independent outside

net one report 2023

Business Segments

9

Fiscal 2021 challenges

Proactive management

GovernanceIn fiscal 2022, the governance structure of Net One Systems
underwent major changes, as we transitioned into a company
with an audit and supervisory committee and began requiringthat six of the nine members of our Board of Directors be
independent outside executive directors. We feel that we wereable to implement drastic reforms in such a short period oftime in part because all members of our management shared astrong sense of urgency regarding the need to implement
reforms aimed at preventing recurrence of fraudulent acts andin part because management held a series of dialogues with
employees concerning the Company’s direction moving
forward, which raised awareness regarding the significance ofgovernance reform activities throughout the Company.
The Company has revamped systems and processes
associated with its Board of Directors to ensure that the board

In accordance with its recently established Vision for 2030, the
Net One Group aims to be recognized throughout society as aleader in terms of all corporate activities, including, but notlimited to, those in the network field. One of the key issues wemust face as we aim to achieve this goal is the promotion ofdiversity and inclusion. To raise our ratio of female employees,
which is one of our materiality-related KPIs, we need toconstruct an organizational foundation that will allow us todevelop a fresh crop of female executive directors. We believethat having women in positions carrying ultimate decisionmaking responsibility will provide emotional support to our
female employees, while also raising their awarenesses of theroles they fulfill with the Company. Furthermore, in a rapidlychanging industry where new forces are constantly emerging
both in Japan and abroad, we must also appoint foreign
nationals in accordance with a global perspective and promotemembers of the younger generation to positions through which
they can lead the ICT industry.
To achieve these objectives, I have personally created
opportunities for interaction with employees while
simultaneously promoting open dialogue. I sincerely hope that
this dialogue will encourage each employee to think about hisor her own career and potential and communicate his or her
own thoughts and ideas more proactively. Meanwhile, I believethat as we develop more employees with this mindset, we willobserve growth in the number of leaders who proactively drive
the Net One Group forward, thereby generating new growth
for the Company as a whole.
Having expressed steadfast support for our Vision for 2030,
all members of our current Board of Directors are in agreement
regarding the future direction of the Net One Group and firmly
believe in the soundness of the Net One Group’s governancestructure. However, we cannot convey the importance ofgovernance through routine disclosures of information alone
and must ensure that our shareholders and investors
understand that our reforms represent much more than mere
formality. To convince them of the significance of our reforms,
we must continue to communicate as concretely as possible
the activities and discussions undertaken by our Board of
Directors and all committees. As chairperson of the Board of
Directors, I am responsible for proactively ensuring that the Net
One Group is recognized as a company that is achieving
business development through strong governance.

Management CapitalManagement’s strong resolve toimplement sweeping reforms

is more focused on discussing important issues. We
accomplished this feat by delegating authority to theManagement Committee and other decision-making bodies to
cut down the volume of proposals submitted to the Board of
Directors and by beginning to identify discussion items related
to important management issues, which complement
resolutions and reports reviewed by the board. Furthermore,
we shifted the focus of the board’s discussions from thepromotion of recurrence prevention measures to the future
prospects and growth potential of the Net One Group. Whilemaintaining a sound governance framework, we are diligently
discussing the adoption of a proactive system of corporate
management that will lead us into our next stage of growth. To
spur on these discussions, we will ensure proper
administration and leadership that will allow each executive
director to demonstrate his or her individual expertise during
meetings of the Board of Directors and facilitate the exchange
of a diverse range of opinions.

The Net One Group’s commitment toensuring appropriate evaluations througheffective communication

Growth Strategy

Message from the Chairperson of the Board of Directors

Looking ahead to 2030
Value Creation

Maya Ito

Another governance reform we have implemented is thereorganization of the Advisory Committee into the Nomination
Advisory Committee and the Remuneration Advisory
Committee. As a member of both committees, I am
responsible for ensuring that the results of discussions held
during meetings of the Board of Directors are reflected throughcorresponding policies and systems.
With regard to nominations, we have developed asuccession plan that prioritizes adherence to the foundationsof our compliance and governance systems and formulated tofacilitate our transition toward a proactive system ofmanagement. Independent outside executive directors are
responsible for verifying and evaluating the suitability ofcandidates for positions in our next generation ofmanagement. To ensure the selection of appropriate
candidates, we will ensure that we thoroughly understand theskills and characters of each candidate while also providing
ample opportunity for independent outside executive directors
and candidates to exchange views and opinions.
In terms of compensation, we have introduced a restricted
stock compensation system for chief executives with the aimof ensuring that they execute their duties while sharing thesame perspectives regarding value that are held by ourinvestors. Furthermore, we are currently establishing a system
under which compensation for chief executives will reflect
performance indicators unrelated to earnings, such as thedegree to which we have raised the share of revenue
generated through services and the results of employee
awareness surveys.
Japanese society at large is currently facing a scarcity ofhuman resources. Under these circumstances, we mustensure that we maintain a relatively compelling remuneration
system if we aim to shift toward proactive system ofmanagement. We updated our remuneration system in July
2023, and as time progresses, we intend to continue adjusting
this system in an effort to guarantee growth in its appeal
moving forward.

Introduction

Focus on identifying next-generation
management talent and revising
remuneration policies

executive directors have a diverse range of expertise and haveaccumulated extensive experience in the field of crisis
response. Furthermore, we have a system in place that allows
these executive directors to apply their abundant knowledge
and expertise to risk management. As we aim to earn the full
trust of our customers through the proactive delivery ofservices, we will provide the advice necessary to ensure that allneeds are addressed and further enhance cooperation withpersonnel responsible for business execution.

10

2022-2024

Current Medium-Term Business Plan

Corporate History

2019-2021

Established the Expert
Operations Center (XOC)

2016-2018

Previous
Medium-TermBusiness Plan

(Shift to services)

Introduction

Net One Systems was established in 1988 as a specialist network installation company, focusing initially on the
procurement and sale of routers, switches and other ICT equipment.
Since then, we have continued to grow in response to the evolution of ICT and changing customer needs,
using our advanced network technologies as a point of difference, while extending our business reach fromnetworks into all areas of ICT platforms, such as cloud systems, security and IoT.
2007

Previous
Medium-TermBusiness Plan

Executing our growth strategy and strengthening
our business base,with the aim of realizing
our new philosophy system

Transformation
for the next era(Integrated Service Business)

Sustained growth(Cloud and security)

2009

2023
Established the “netone
valley” innovation center

Relocated and expanded
the Technical Center

Value Creation

Revenue (by markets)■ Enterprise■ Telecom carrier

2021■ Public

Acquired “COPCⓇ,” acertification for contact centers■ Partner■ Other

2020
Established the “nBC” and “Lab as aService” to help customers accelerate DX

Growth Strategy

2019Started providing the refurbishment
business and solutions for MSP

2001

2017

Listed on the First Section of theTokyo Stock Exchange

Launched a subscription service that provides the“functions” that are necessary for ICT platforms

1999
Operating income amount

Certified as a gold partner
by Cisco Systems

2013

1996

1990

2000

601
Changes in market
conditions

Wider use of information systems

34.3%

42.2%

2024

Servicesales ratio

55.0%
2022

Number of employees

2,023
Improvements
in ICT system efficiency

2024

Number of employees

2,548
ICT utilization becomes central to business reform

Improving communication speeds

ICT utilization

1992 ~

1995 ~

2008 ~

2011 ~

2016 ~

Interconnection

Network systems

Internet

Virtualization

Cloud & Security

Digitalization

Conventionally, computer networks
have been connected only according
to each manufacturer’s proprietary
specifications. With our proprietaryequipment, communication softwaredevelopment capabilities, and personnel, we have achieved interconnection
regardless of specifications and manufacturers.

Began providing sales, design, andmaintenance services for network
equipment for limited communications
within the premises, such as computerto-computer connections, mainly tomajor private sector companies, research institutes, and universities.

With the rapid spread of the Internet,
sales, design, installation, andmaintenance of network equipment
have increased. In response, theCompany has expanded its businessfields to include the network integration
business for telecom carriers andgovernment agencies, in addition to
our existing fields of major private
sector companies and universities.

The Company has focused on virtualization
as a new technology for pursuing efficiency.
By utilizing the characteristics of virtualizationt e c h n o l o g y, w h i c h p r e s e n t s v a r i o u sadvantages including the effective use of ICT
assets, flexibility in adding capacity, andpower saving, the Company strived to
expand its business to major private sector
companies, government agencies, and local
governments.

By leveraging its network know-how, theCompany has shifted to a business style thatprovides total solutions, including the installation of servers and cloud systems for clientcompanies. The Company had also begun tofocus on security, such as countermeasurest o p re v e n t i n f o r m a t i o n l e a k s t h ro u g h
networks.

ICT utilization has expanded rapidly, and theCompany has transformed itself to play acentral role in business reforms. The Company
is creating new added value, in response to thegrowing importance of network technologies
that safely connect all kinds of products andservices as its business field continues toexpand.

Business Segments

1988 ~

Governance

Sharing information between business sites

Customer needs

Changesin business fields

Internet uptake

Servicesales ratio

2010

Number of employees(Target)2020

Servicesales ratio

Management Capital

2010

Registered as an over-the-counter stock with
the Japan Securities Dealers Association

Founded1988

品質管理センター
移転・統合

2016
Established the “Security
Operations Center”(SOC)

Strategy support
Systems optimization

Changesin provided value

11

net one report 2023

Maintenance / Operations
Hardware sales

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12

Review of Operations

Expansion of our business fields centered on networks

FY2022 Revenue
Enterprise market

23.6%

Security
Multi-cloudsystems

Internet

Factories Data centers

22.1%

Cloud systems
Security measures● Work style innovation●●

ICT strategy support

Systems optimization
System installation, maintenance, and operation

The enterprise business has built up a high level oftrust with customers after many years of providing
high-quality network systems.
● Backed by that trust, we share with customers theGroup’s knowledge and experience of utilizing ICT.
Our approach allows customers to use cloudsystems, reinforce security and implement work
style innovation in a more flexible and practicalway.

●

Focus areas
Smart manufacturing, social infrastructure to realize Society 5.0

Telecom carriers / ISP *1●●

Service platforms
Corporate business●

Extensive track record in the design and installationof large-scale networks●

Strong position in multivendor product integration
and automated system operation, backed byadvanced network design capabilities*1. ISP: Internet service providers

Telecom carrier market

Hardware sales and maintenance

Strengths and characteristics

Management CapitalServices

Remote working

29.4%

Growth Strategy

DX consulting, managed services
Delivery of ICT functionality

Internal
networks

Partner business

Value Creation

Multi-cloud systems, Cloud HUB services, integrated services

Cloud
HUB

Manufacturing /non-manufacturing / financeEnterprise market

Virtualization, cloud technology, security, remote working

Security

23.4%

Public market

Key markets / sectors

Shift toward a service-based
business modelBusiness expansion andtechnological development

LAN/WAN network integration

Public cloud systems

Telecom carrier market* Note that the sum of the above percentages does not add up to 100%, due to other business segments that are not included in the reportable segments (the Global business segment, etc.).

The Net One Group has leveraged its strengths in networks and expanded its business fields in line with the increase indemand for ICT utilization.
Amid the recent and ongoing shift to multi-cloud systems, networks that securely and effectively link cloud systems
have become indispensable. Consequently, the Group has taken on a broader range of responsibilities, including
support for cloud systems, cybersecurity initiatives, and general support for ICT platforms utilized in pursuit of digitaltransformation. We are gradually transitioning toward a business model focused on providing services ranging fromproposing grand designs for the installation of next-generation systems to establishing efficient systems that optimallycombine a variety of products, as well as services that support the entire lifecycles of systems. Accordingly, the scopeof our business continues to expand.

Private cloud systems

209.6 billion yen

Introduction

Concentrating primarily on large-scale companies and government agencies, the Net One Groupsupports the introduction and ongoing optimization of comprehensive frameworks and systems thatenable the transformation of business models and work styles through the use of ICT.

Focus areas
Social infrastructure to realize Society 5.0, digital government, and smart manufacturing

Characteristics of our business segments
Local governments / education /universities, research centers /social infrastructures / healthcare

Telecom carriers●

Optimization of the full ICT lifecycle, from design,
installation and maintenance to operation,
optimization and in-field improvement of ICT
platforms

Cloud systems● Security measures● Campus networks

Public market

Focus areas
Digital government, social infrastructure to realize Society 5.0

PublicSystem integrators

Partner companies

Directsales

Consulting services that help customers clearly
identify the challenges they face●

Customers
Enterprise●

Governance

The Group’s business is broadly divided into four segments based on the industry of the customers they serve. The
composition ratio of each segment is well-balanced, at roughly 20% to 30%.
In the enterprise, telecom carrier, and public markets, we provide customers with solutions from system proposals
to various services under a direct sales model. In the partner business, we are conducting a resale business that sells
products and services through collaboration with system integrators who undertake all-in-one information systemoutsourcing. In addition to the conventional direct sales model, we also engage in co-creation with telecom carriers
and partner companies, and provide support for corporate groups. We are working to acquire a diversified market, by
making efficient proposals to customers who are difficult for us to approach directly.

A wide range of support,
from product proposal to technical support
Net One Partners

Handles a wide range of products from overseas●

Provides quality assurance, technology verificationand value-added services such as proposal
support and system maintenanceBusiness Segments

Specializes in collaboration
with partner companies● Network● Cutting-edge ICT equipment
and related solutions●●

Net One Systems

Partner business
ICT vendors (equipment manufacturing, software development)

Focus areas
Social infrastructure to realize Society 5.0, digital government, and smart manufacturing* Revenue for external customers is used in revenue by segment presented on this page and in Chapter 5.

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14

The Societal Prevalence of Net One

Main contribution scenes

Introduction

The Group’s solutions and services are utilized in various places and situations where they support social
infrastructure.
We are working to achieve our materiality of “realizing a safe and secure advanced information society,”by leveraging our strengths in network technology to connect society and contribute to ICT utilization.
Main contribution scenes

Integration of group ICT platforms

Remote working / Zero trust

Factories

Smart factories

Local
governments

Integrated
operation
services
Private cloud systems

Enterprise market
Logistics

SASE / Zero trust

Smart buildings

Maintenance

Educational
institutions

Authenticationand coordination

Offices

Factories

Cloud systems LGWAN

Security cloud systems

School systems / GIGA schools

SOC

Data centers
Monitoring

Public market
Group
companies

We will conduct upgrades leading to expandable, high-quality network
systems that will facilitate the creation of an advanced digital society.

Internet

Hospitals

Operation

Smart logistics

ICT platform renewal conductedin anticipation of the digital transformation era

Public cloud systems

Security

Construction

Security cloud, strengthening of
information security, digitalizationof business processes /local government CRM

Value Creation

Offices

We will enhance ICT utilization and governance in accordancewith our unified security policy.

Remote working
Homes

Work style innovation,
telemedicine,
hospital Wi-Fi / security

Monitoring

Government
office buildings

Local government
office buildings

Business
locationsPublic healthcenters, etc.

Lifecycle support from our customer success teamGrowth Strategy

Educational
institutions

Offices

Hospitals
Financial
institutions

Local
governments

Electricity

Management Capital

Railroads

Factories
Telecommunication

Gas

Logistics

Governance

Main contribution scenes

Telecom carrier
marketCorporatebusiness

ICT platforms
Security cloud systems

ICT platform
integration support

We will spearhead pioneering technological innovation targetingnext-generation service platforms while collaborating with customers
to co-create new markets.

net one report 2023

Product selection,
sales support, technical support

FunctiondeliveryComprehensive support for
procurement, quality control,and distribution

MSP
support

Proposals and supply management
for products designed to support
specific operations

We will develop a resale business through which we collaborate
with system integrators to sell products and services.

5G

Service planningsupportUtilization of
next-generation platforms*1. Multi-access edge computing (MEC)

15

Product
proposals

Operations associated with the partner businessBusiness Segments

Service
platforms

Main collaboration scenes

Example: Installation of MEC*1 platforms using 5G

Solving ofsocial challenges

Partner businessResale business operated throughcollaboration with system integrators, co-creation
involving telecom carriers and partner companies,
and support for corporate groups

Corporate
customers

net one report 2023

16

netone valley

Introduction

Establishment of,a place for taking on the challenge of creating new value
and paving the way toward a prosperous future

Solution
Value Creation

Proposing optimal solutions tocustomers using ICT platforms
refined utilizing the reference
models generated through ourown digital transformation efforts
We adopt and evaluate technologies at netone valley before
proposing their use to our clients, thereby accumulating

Growth Strategy

essential expertise. Offering sophisticated security that allows
for freedom, convenience, and safety, netone valley alsoenables us to jointly conduct proof-of-concept experiments
along with our partners and clients.

Management CapitalGiven the recent major changes in environments surrounding society, including the emergence ofgenerative AI and operational automation, the importance of value-creating human resources capableof generating innovation has been rising. To continue delivering value to a changing society, the Net
One Group must also shift toward a service-based business model and transform work styles byadopting value-creating approaches. Moving forward, we will create a prosperous future throughinnovation generated via various forms of interpersonal networking, including new professional

PROJECT ROOM

encounters and diverse collaborative efforts. The “netone valley” innovation center serves as a venue

A venue for creating new business and services alongwith our partners and customers

Communication & Collaboration

Innovation

Encouraging communicationand collaboration while fostering
an open corporate culture

Working together to develop
scenarios intended to facilitate
the resolution of social challenges
while accelerating innovation

corporate culture, and ensure widespread understanding andThrough netone valley, visitors can experience a wide variety ofacceptance of our philosophies, we must create environments in

cutting-edge technologies and new services. Using thiswhich employees can communicate closely with one another.

innovation center, we will engage in co-creation along with ourThrough our establishment of netone valley, we have provided acustomers and partners, creating new value and generating

venue that encourages a wide range of employee activities, thereby
revitalizing communication and fostering a sense of mutual
understanding and organizational unity among our employees.

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net one report 2023

Business Segments

To facilitate the creation of ideas and innovation, foster a strong

Governancethrough which these objectives can be accomplished using practical measures.

solutions for social challenges using digital technology.

PARK

INNOVATION SHOW CASE

An office space that encourages casual communication

A place where visitors can experience what the Net One brand has
to offer through exposure to new services and the latest technological combinations

net one report 2023

18