Supplementary Materials for Financial
Results for the Second Quarter of the
Fiscal Year Ending June 30, 2023
System Support Inc. (Security Code: 4396)
February 9, 2023

Notice: This document is only for reference purposes. In the event of any discrepancy between this translated document andthe original Japanese document, the latter shall prevail.

Company Profile
Company name

System Support Inc. (STS)

Location

9F Rifare, 1-5-2 Honmachi, Kanazawa-shi, Ishikawa Prefecture

Founding

January 1980

Listed market

Tokyo Stock Exchange Prime Market (security code: 4396)

Capital

723 million yen

Net sales

16,198 million yen (FY2022/6, consolidated)

Representative

Ryoji Koshimizu, Representative Director

Number of
employees

1,233 (as of June 30, 2022, consolidated)

OfficesTokyo, Nagoya, Osaka, and Kanazawa (headquarters)

Business outline■Cloud Integration BusinessTechnical support for migration and use of cloud services (ServiceNow,
Microsoft Azure, AWS, Google Cloud, etc.) and resale of licenses, etc.

■System Integration Business

Overseas (U.S. & Canada):
10
Hokuriku area:
249
Tokyo metropolitan
area: 643
Tokai area: 154
Kansai area: 177

84% of employees
are engineers

Number of employees by region(as of June 30, 2022, consolidated)

Technical support for the introduction and use of ERP packages, constructionof infrastructure such as Oracle database, and IT system consulting, design, development, operation, and maintenance■Outsourcing Business

Our Group’s private cloud and other data center services, data analysis and input, and near-shore system operation andmaintenance■Product Business

Development and sale of products (software) by Our Group, and customization according to user companies’
applications■Overseas Business© 2023 System Support Inc.

Overseas system integration, outsourcing of payroll and accounting services, recruitment services, and media
management

2Company Profile – Net Sales Trends and History(1 million yen)Entered a Celonis Partner Program Agreement with CELONIS K.K.
Entered a Subcontractor Agreement with Automation Anywhere, Inc.
Entered a Google Cloud & Google for Education Commercial Partner Program Agreement with Google Cloud Japan G.K.

18,00016,00014,000Received Microsoft Cloud Platform Gold Competency certification

12,000Received Microsoft Cloud Platform Silver Competency certification
Entered a PartnerNow Master Terms with ServiceNow Nederland B.V.

10,000Entered an APN Consulting Partner contract with Amazon Japan K.K.

8,000Entered a SAP Service Partner contract with SAP Japan Co., Ltd.

6,000
4,000

Entered an Oracle EBS Technical Partner contract with Oracle
Corporation Japan

2,000

1980/121982/12'80/12 '82/12 1984/6'84/6 1986/6'86/6 1988/6'88/6 1990/6'90/6 1992/6'92/6 1994/6'94/6 1996/6'96/6 1998/6'98/6 2000/6'00/6 2002/6'02/6 2004/6'04/6 2006/6'06/6 2008/6'08/6 2010/6'10/6 2012/6'12/6 2014/6'14/6 2016/6'16/6 2018/6'18/6 2020/6'20/6 2022/6'22/6●Established System Support Inc. in Kanazawa City, Ishikawa Prefecture●Listed on the Tokyo Stock Exchange
Mothers Index●eNet Solutions Co., Ltd. financed and founded●Nagoya Office opened●Tokyo Office opened●Osaka Office opened0●Listed on the First Section of theTokyo Stock Exchange●Moved to TSE Prime●Acquired shares of T4C Co., Ltd., andmade it a subsidiary●STS Medic Inc. financed and founded●Acquired shares of Across Solutions, Inc. and made it a subsidiary●STS Innovation, Inc. financed and founded in California, USA●STS Innovation Canada, Inc. financed andfounded in Vancouver, Canada© 2023 System Support Inc.

* Net sales are consolidated from FY2016/6, and unconsolidated before that.

3

Summary of Financial Results for 2Q of FY2023/6 and Earning
Forecast of FY2023/6
Contents
1. Financial highlights
2. Net sales and income (consolidated)
3. Forecast for full year earning of FY2023/6 (consolidated)
4. Changes of reportable segments
5. Net sales and income by segment (consolidated)© 2023 System Support Inc.

4

Financial Highlights for 2Q of FY2023/6 (Cumulative)
Unit: 1 million yen

2Q of
FY2023/6(Cumulative)

Difference(YoY change)

Percentagechange(YoY change)

Progress rate
against full-year
forecast

Net sales

9,211

1,421

+18.2%

50.9％

Operatingprofit743

155+26.4%

51.0％

 Net sales were strong in all businesses, led by the cloud integration business.
 Profit ratio increased due to expansion of highly profitable cloud integration
business, etc.

 Although the progress rate against the full-year forecast is more than 50%, thefull-year forecast remains unchanged from the initial forecast at this stage.

© 2023 System Support Inc.

5

Consolidated Net Sales and Income of 2Q of FY2023/6 (Cumulative)
2Q of
FY2021/6

2Q of
FY2022/6

2Q of
FY2023/6(Cumulative)(Cumulative)(Cumulative)

Net sales

6,917

7,790

9,211

Gross profit

1,814(26.2%)

2,049(26.3%)

2,499

Operatingprofit508(7.4%)

587(7.5%)

743

Unit: 1 million
yen
Difference(YoY change)

Percentagechange(YoY change)

1,421+18.2%(27.1%)

450+22.0%(8.1%)

155+26.4%

Current profit

517(7.5%)

592(7.6%)

757(8.2%)

164+27.8%

Current net
profit344(5.0%)

393(5.0%)

508(5.5%)

115+29.4%*Profit ratio in (■Composition of net sales by segment*1
0.7%

9.3%

3.7%

26.0%

12.0%

Unit: 1 million yen

152

134

5.0%
4.0%
3.0%
2.0%

1.7%

1.7%

2Q of
FY2022/6（Cumulative）

2Q of
FY2023/6（Cumulative）■ Recruitment-■ Training expenses■ Research and―related expenses
development
expenses

1.0%
0.0%

Percentage of net
sales

3.3%

14.4%

49.1%

21.1%

Cloud integration

System integration

Cloud integration

System integration

Outsourcing

Product

Outsourcing

Product© 2023 System Support Inc.

200
180
160
140
120
100
80
60
40
20
0

■Composition of segment profit*2

60.2%

Overseas)■Changes in investment-related expenses

Overseas*1 Net sales by segment are sales to external customers.

*2 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

6Forecast for Full Year Earning of FY2023/6 (Consolidated)
For FY2023/6, we plan net sales of 18,093 million yen, up 11.7% year on year, andoperating profit of 1,456 million yen, up 21.7% year on year.
Unit: 1 million yen
FY2021/6

Net sales
Operatingprofit14,431931

FY2022/6

16,1981,196

FY2023/6(Forecast)

18,093
1,456

Percentagechange(Period overperiod)+11.7%+21.7%

1,190

1,452

+22.0%

Current net
profit

674

785

982

+25.1%

Interimdividends

0 yen

12 yen15 yen-Annual dividends

954

Total

© 2023 System Support Inc.

21 yen21 yen13 yen25 yen15 yen30 yenUnit: 1 million yen

20,00015,00010,0005,000
0Current
profitYear-end
dividends■Net sales/operating profit (consolidated)

11,762529

FY2019/6

13,376754

14,431931

1,196

FY2020/6

Net sales

FY2021/6

FY2022/6

Operating profit

1500

FY2023/6（Forecast）

0

Unit: Yen

25
13
1.5

1,456

2000
1000

■Dividends*

10

FY2019/6

18,093500-

16,198FY2020/6

Interim dividends

21
FY2021/6

30
15

12

15

FY2022/6

FY2023/6（Forecast）

Year-end dividends* Our Company conducted a 2-for-1 stock split of shares of common stock on April 1, 2019, and June 1, 2020, and the figures for FY2019/6 and earlier in this graph have been retroactively adjusted.

7

Changes of Reportable Segments
From FY2023/6, the reportable segments will be changed with the primary objectiveof more clearly showing progress in the cloud integration field that we are focusing
on in the medium term.
Old segments

New segments*
Cloud Integration Business

Solution Business[Cloud integration]

Support for the introduction and use of cloud services such as ServiceNow,
Microsoft Azure, and AWS[System integration]

Technical support for migration and use of cloud services (ServiceNow,
Microsoft Azure, AWS, Google Cloud, etc.) and resale of licenses, etc.

System Integration BusinessSupport for the introduction and use of ERP packages, construction of
infrastructure such as Oracle database, and development of IT systems

Technical support for the introduction and use of ERP packages, constructionof infrastructure such as Oracle database, and IT system consulting, design,development, operation, and maintenanceOutsourcing BusinessOutsourcing Business

Product Business

Product Business

OthersOverseas BusinessPrivate cloud services, data analysis and input, operations and maintenancein our Group’s data center
Development, sales, and customization of products (software)

Development and sale of products (software) by Our Group, andcustomization according to user companies’ applications

Overseas information provision services, overseas media business, etc.

Net sales composition (FY2022/6, consolidated)
84.0%
ソリューション
ソリューション
Solution© 2023 System Support Inc.

アウトソーシング
アウトソーシング
Outsourcing

4.1%
11.7%

プロダクト
プロダクト
Product

その他
その他
OthersOur Group’s private cloud and other data center services, data analysis andinput, and near-shore system operation and maintenanceOverseas system integration, outsourcing of payroll and accounting services,
recruitment services, and media management

0.2%

4.1%
20.9%
Cloud
integration
クラウドインテグレーション

プロダクト
プロダクト
Product

64.8%
Systemintegration
システムインテグレーション
システムインテグレーション
海外
海外
Overseas*The arrows from the old segments to the new segments indicate the main ones. Net sales are sales to external customers.
The net sales composition in the new segment category is based on reclassified financial results for FY2022/6, and has not been reviewed by an auditing firm.

0.4%

9.7%
Outsourcing
アウトソーシング
アウトソーシング

8

Consolidated Net Sales and Income by Segment for 2Q of FY2023/6 (Cumulative)
9.3%

Cloud Integration Business•

3.7%

ServiceNow and IT system-based cloud services received strong orders,with particularly strong growth in Google Cloud.

0.7%
26.0%

Composition of net sales bysegment(2Q of FY2023/6 cumulative)

Cloud Integration
Business

Technical support for migration
and use of cloud services(ServiceNow, Microsoft Azure,
AWS, Google Cloud, etc.) andresale of licenses, etc.

60.2%

■Net sales*1
Unit: 1 million yen

2500

52.2%
increase

2000
1500

1,573
21

1000

2,394
96

261
288
825

723

922

2Q of FY2022/6(cumulative)

2Q of FY2023/6(cumulative)

Servicenow
Microsoft Azure
OthersAWS
Google Cloud© 2023 System Support Inc.

Unit: 1 million yen

800
700

53.4%
increase

500

437

600
400

27.8%

300

505

500
0

86
236

■Operating profit/profit ratio(Segment profit/profit ratio*3)■Gross profit/profit ratio*2

670

28.0%

200

40.0%

2Q of FY2022/6 2Q of FY2023/6(cumulative)(cumulative)

Gross profit

400
350
300

30.0%

250

20.0%

150

10.0%

100
0

50.0%

Unit: 1 million yen

58.1%
increase

374

40.0%

236

30.0%

200
100

0.0%

50
0

Gross profit ratio*1 Net sales are sales to external customers.

*2 Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.
*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

50.0%

20.0%
15.0%

15.6%

2Q of FY2022/6 2Q of FY2023/6(cumulative)(cumulative)

Segment profit

10.0%
0.0%

Segment profit ratio

9Cloud Integration Business Details (1) Support for the Introduction and Use of ServiceNow
Support for the introduction and use of ServiceNow*, a cloud service for businesses from the U.S.
*ServiceNow is a cloud service provided by ServiceNow, Inc. to standardize IT service management and other operations.

ServiceNow, Inc. is ranked No. 1 in FORTUNE Future 50 (2020), with a market capitalization of approximately US$90 billion in January 2023.

Net sales of ServiceNow
Unit: 1 million yen

2,000

1Q

1,800
1,600

1,527

1,400

387

1,200

3Q

4Q

Up 27.5%
YoY(2Q(Cumulative))

Number of our ServiceNow
certified build certifications
Unit: Case

(1 billion USD)

Net sales of ServiceNow, Inc.*3

8

1,000

416

800

6

488

600

410

400
200
0

2Q

• Our Company actively invests in the development of engineers to create a systemcapable of providing stable service, and captures demand as the number of companies
that have adopted ServiceNow in Japan increases.
• Our Company ranked second in terms of ServiceNow certified build certifications as ofthe end of September 2022*1.
• First domestic company certified as a Bronze Services Partner in 2017*2; currently thehighest ranking Elite Partner.

312
FY2022/6 *© 2023 System Support Inc.

144

434
FY2023/6*There have been minor revisions to the sales figures for each quarter of the
fiscal year ended June 30, 2022, as compared to the figures shown in the
supplementary materials for the 1Q of the fiscal year ending June 30, 2023,
but the full-year total figures remain unchanged.

69
31

176

84

2

37

Dec. 31, Jun. 30, Dec. 31, Jun. 30, Jan. 15,
2019
2020
2020
2021
2022

4

Jun. 30,2022

0

2014/12 2015/12 2016/12 2017/12 2018/12 2019/12 2020/12 2021/12 2022/12*1 From the ServiceNow Japan website (target: Certified Implementation Specialist/Certified Application Developer/Certified
Application Specialist)*2 From the ServiceNow partner program of ServiceNow, Inc. in the U.S.
10
*3 Prepared by Our Company from ServiceNow, Inc. financial resultsCloud Integration Business Details (2) Cloud Platform Migration and Usage Support
Cloud platform migration (Microsoft Azure, AWS, Google Cloud) and usage support
Our strength is in the area of using databases and data analysis platforms in the cloud, thanks to ourtechnological expertise in the database field, which we have cultivated over many years.
Net sales for cloud platform
migration, usage support, etc.

Flow of cloud platform
migration and usage support

Unit: 1 million yen

1Q
2000

1,857

1600

583

1800
1400
1200
1000

424

490

400
200
0

3Q

4Q

Our main services

For total up
73.2% YoY,
for resale up
60.2% YoY

Before Proposal and design
cloud
migration ▼Migration and usage support(2Q(Cumulative))991(creation of cloud environment)

850

273

800
600

2Q

216
287

359
Total
(Migration etc.
+Resale)

470
621

214
ResaleFY2022/6 *© 2023 System Support Inc.

Total
(Migration etc.
+Resale)333
ResaleAfter
cloudmigration▼(Delivery)
Operation and monitoring
ResaleReselling cloud accounts (payas-you-go or bulk purchases basedon data usage) from Our

Company to customers toensure stock revenue

History of major certification and awards inthis field

Microsoft Azure• Obtained Gold Cloud Platform competency certification
Recognized as a partner with an outstanding track record in
Microsoft Azure deployments
・Obtained Advanced Specialization*1
Obtained highly specialized partner certifications in specific solution
areas
・Won the MVP Award five times in a row
Received consecutive awards in the field of data platforms since
2017*2AWS・Obtained Oracle competency in the AWS competency

program*3

・Received APN partner award “Rising Star of the Year 2014”
Google Cloud・Obtained data analysis specialization with Partner Advantage
program
Oracle・Received 14 consecutive awards for Oracle Database*4
Received awards including Oracle Certification Award 2020 from
Oracle Japan

FY2023/6*There have been minor revisions to the sales figures for each quarter of the
fiscal year ended June 30, 2022, as compared to the figures shown in the
supplementary materials for the 1Q of the fiscal year ending June 30, 2023,
but the full-year total figures remain unchanged.

*1

Acquired in the “Migrating Windows Server and SQL Server to Microsoft Azure” field
Awarded by Our Company employees
Program to identify, validate, and recommend AWS Partner Network (APN) advanced and premium tier partners
that have demonstrated technical expertise and customer success for AWS*4
Awards from 2007 to 2020
*2
*3

11

Consolidated Net Sales and Income by Segment for 2Q of FY2023/6 (Cumulative)
System Integration Business•••

ERP faring well.
Improved profitability in the infrastructure construction contributed to higher
gross profit ratio.
Segment profit (operating profit) decreased due to an increase in common
SG&A expenses such as head office expenses.
■Net sales*1■Gross profit/profit ratio*2
Unit: 1 million yen

Unit: 1 million yen

8.2% increase
5,125

5,000
4,000

2,719

5,543

2,944

3,000
993

1,035

1,412

1,564

2Q of FY2022/6(cumulative)

2Q of FY2023/6(cumulative)

2,000
1,000
0

ERP
© 2023 System Support Inc.

Database

10.5% increase
1,400
1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0

IT system development*1Net sales are sales to external customers.

1,203

23.5%

1,330

24.0%

2Q of FY2022/6 2Q of FY2023/6(cumulative)(cumulative)
Gross profit

System Integration BusinessTechnical support for the introduction
and use of ERP packages, constructionof infrastructure such as Oracle
database, and IT system consulting,design, development, operation, andmaintenance

Gross profit ratio

26.0%

Composition of net sales
by segment(2Q of FY2023/6
cumulative)■Operating profit/profit ratio(Segment profit/profit ratio*3)

Unit: 1 million yen

200

193

150
100
50
0

3.8%

50.0%
45.0%
16.8% decrease
40.0%
160
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
2.9%
5.0%
0.0%

2Q of FY2022/6 2Q of FY2023/6(cumulative)(cumulative)
Segment profit

Segment profit ratio*2Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.

*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

0.7%

60.2%

250
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%

9.3%

3.7%

12

Consolidated Net Sales and Income by Segment for 2Q of FY2023/6 (Cumulative)
Outsourcing Business
Our Group’s private cloud andother data center services,
data analysis and input, andnear-shore system operationand maintenanceOutsourcing Business•

Strong performance in data center operations including AI-related
services.

9.3%

3.7%

0.7%
26.0%

Composition of net sales
by segment(2Q of FY2023/6
cumulative)

60.2%■Net sales*1
1000
900

15.4% increase

800

746

700

130

600

Unit: 1 million yen

300 19.3% increase

150

250

273

229

200
30.7%

150

400

710

615

200

31.8%

100
50

100
0

Unit: 1 million yen

861

500
300

2Q of FY2022/6(cumulative)■

Data center© 2023 System Support Inc.

■Operating profit/profit ratio(Segment profit/profit ratio*3)■Gross profit/profit ratio*2

2Q of FY2023/6(cumulative)0

2Q of FY2022/6(cumulative)■

Data analysis, input, near-shore,etc.
*1Net sales are sales to external customers.

Gross profit

2Q of FY2023/6(cumulative)

50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%

Unit: 1 million yen

140
120
100

Gross profit ratio

18.9% increase

45.0%
109

30.0%
25.0%
20.0%

60

15.0%

40

0

12.4%

12.8%

2Q of FY2022/6(cumulative)

2Q of FY2023/6(cumulative)

Segment profit

10.0%
5.0%
0.0%

Segment profit ratio*2Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.

*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

40.0%
35.0%

92

80

20

50.0%

13

Consolidated Net Sales and Income by Segment for 2Q of FY2023/6 (Cumulative)

Product Business••

Strong sales performance of Tateyakusha and SHIFTEE.
Improved profit margin on stock sales such as monthly subscription fees
and no significant increase in selling, general and administrative expenses
contributed to higher segment profit ratio.
■Net sales*1

400■Gross profit/profit ratio*2
Unit: 1 million yen

16.8% increase

345

295

45
35
40

200

34
32
30

150

111

350
300
250

0

87

22.7% increase

200

113

109

150

Tateyakusha
SHIFTEE
Others© 2023 System Support Inc.

2Q of FY2023/6(cumulative)

208

60.5%

50

2Q of FY2022/6 2Q of FY2023/6(cumulative)(cumulative)

MOS
Shugyoyakusha*1Net sales are sales to external customers.

Gross profit

90.0%
80.0%

100

0
2Q of FY2022/6(cumulative)

100.0%

170
57.6%

100
50

Unit: 1 million yen

250

Product Business
Development and sale ofproducts (software) by Our
Group, and customizationaccording to user companies’
applications

9.3%

3.7%

60.2%

■Operating profit/profit ratio(Segment profit/profit ratio*3)

Unit: 1 million yen

100
90
44.9%
increase

9180

100.0%
90.0%
80.0%

70

60.0%

60

60.0%

50.0%

50

50.0%

40.0%

40

40.0%

30.0%

30

30.0%

20.0%

20

10.0%

10

0.0%

0

70.0%

63

21.4%

26.6%

2Q of FY2022/6 2Q of FY2023/6(cumulative)(cumulative)
Segment profit

20.0%
10.0%
0.0%

Segment profit ratio*2Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.

*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

26.0%

Composition of net sales
by segment(2Q of FY2023/6
cumulative)

70.0%

Gross profit ratio

0.7%

14

Consolidated Net Sales and Income by Segment for 2Q of FY2023/6 (Cumulative)
Overseas Business
Overseas system integration,
outsourcing of payroll andaccounting services, recruitment
services, and media management

Overseas Business••

Strong performance in outsourcing operations in North America.
Status of system integration projects affects gross profit ratio.

0.7%
3.7%
9.3%

26.0%

Composition of net sales
by segment(2Q of FY2023/6
cumulative)

60.2%■Gross profit/profit ratio*2■Net sales*1
1.2

100
Unit: 1 million yen

90
70 35.8% increase
50

67

49

0.8
0.6

40

0.4

30
20

0.2

10
0

Unit: 1 million yen

1

80
60

■Operating profit/profit ratio(Segment profit/profit ratio*3)

2Q of FY2022/6(cumulative)

2Q of FY2023/6(cumulative)

0

40
35

28.7% increase
28

30
25
20

56.9%

53.9%

15
10
5
0

2Q of FY2022/6 2Q of FY2023/6(cumulative)(cumulative)
Gross profit© 2023 System Support Inc.

36

*1Net sales are sales to external customers.

Unit: 1 million yen

100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

30

22.6% increase

25
20

25

20

15
10

42.0%

37.9%

5
0

Gross profit ratio

2Q of FY2022/6 2Q of FY2023/6(cumulative)(cumulative)
Segment profit

Segment profit ratio*2Gross profit by segment is the amount before adjustment for gross profit in the consolidated financial statements.

*3 Segment profit is the amount before adjustment for operating profit in the consolidated financial statements.

100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%

15

Reference Materials
Contents
1. Human resources strategy
2. Financial condition (consolidated)
3. Growth strategy by segment
4. Our Company topics© 2023 System Support Inc.

16

Human Resources Strategy
Our Group regards human resources as a source of business growth, and is actively
engaged in the expansion of its education system and recruitment activities.

Number of employees (consolidated)
Unit: People

30.0%

1,400
1,233
1,200
1,000
800
600
400

956
157

1,039
163

25.0%

194

177

799

876

8.1%

7.7%

949

5.9%

FY2019/6

FY2020/6

Engineers

Sales, management, etc.

© 2023 System Support Inc.

FY2021/62

1,039

4.9%
FY2022/6

10.0%
5.0%

FY2023/6(planned)

FY2020/6

FY2021/6

FY2022/6

New graduate
recruitment

58

60

70

（Number ofpotential
recruits）

Mid-career
recruitment

97

89

83

93

Retirement
rate

7.7%

5.9%

4.9%

–

20.0%
15.0%

200
0

1,126

85

0.0%

Retirement rate

17

Financial Condition for the 2Q of FY2023/6 (Consolidated)
Unit: 1 million yen
End of
FY2022/6

Difference

End of 2Q of
FY2023/6(From the end of
previous fiscal year)

Current assets

6,303

6,625

321

Non-current assets

1,511

1,538

27

Total assets

7,815

8,164

348

Current liabilities

3,686

3,695

9

707

672

-34

Total liabilities

4,393

4,368

-25

Total net assets

3,421

3,796

374

Total liabilities andnet assets

7,815

8,164

348

Capital-to-asset ratio

43.8%

46.5%

-

Non-current liabilities© 2023 System Support Inc.

Main factors of change
Increase: Notes and accounts receivable - trade, andcontract assets+431
Decrease: Cash and deposits-89

Increase: Short-term borrowings
Decrease: Other of current liabilities
Income taxes payable

+540
-532
-47

Increase: Retained earnings

+373

18

Growth Strategy by Segment (Cloud Integration Business)
Business outline: Technical support for migration and use of cloud services (ServiceNow, Microsoft Azure,
AWS, Google Cloud, etc.) and resale of licenses, etc.
1

Expansion of the corresponding area
Expanding investment to quickly develop new overseas cloud services in theJapanese market and expanding the range of supported services

2

Expansion of existing businesses
Focusing on AWS, Microsoft Azure, Google Cloud, and ServiceNow, which
are the mainstays of this business, Our Company will strengthen thedevelopment of proprietary services to further enhance customer
convenience and improve the productivity of Our Group, differentiating
itself from other cloud integrators. We are also considering value-added
features that will differentiate the resale of cloud accounts from othercompanies.

(100 million yen)

20,000Receives customer referrals
from global IT vendors andincreases orders

Expansionof orders

Cloud platform services (IaaS/PaaS) market
trends and forecasts*
CAGR of 23.1% for 2018–2024 (forecast)

15,00010,000
5,000

5,000
0

Developing cloud-related engineers expand orders andmaintain and improve a virtuous cycle of further growth of
Our Company business through market growth

6,900

8,500

10,50015,10017,40012,600Engineertraining andknow-how
accumulation

2018
2019
2020
2021
2022
2023
2024
2018年 2019年 2020年
2021年
2022年 (Forecast)
2023年 (Forecast)
2024年
2020年(Forecast)
2021年 (Forecast)
2022年
2023年

予測
予測

予測
予測

Strengthening
relationships
with global IT
vendors

予測
予測

Strengthens relationships with global IT
vendors by gaining technicalcertifications and recognition
Actively invests in training cloud-related engineers

予測

Note 1: Business operator's net sales base Note 2: Forecasts for 2021 and subsequent years
Note 3: Market size does not include Software as a Service (SaaS)© 2023 System Support Inc.

* Source: “Survey on the Cloud Platform (IaaS/PaaS) Services Market (2021),” by Yano Research Institute, Inc.,

announced on September 7, 2021

19

Growth Strategy by Segment (System Integration Business)
Business outline: Technical support for the introduction and use of ERP packages, construction of
infrastructure such as Oracle database, and IT system consulting, design, development,
operation, and maintenance

Growthstrategy
Expansion of existing
businesses

Strengthening project
management

Steadily recruit and train engineers
and secure orders for ERP-related,database-related, RPA-related, andother IT system development, which
are the mainstay of this business.

Continue project management fromthe perspective of quality, duration,
cost, and risk control to curb theoccurrence of unprofitable projects
and improve service quality© 2023 System Support Inc.

Strengthening relationshipwith customers

Our Company engineers work closely withcustomers such as user companies toexpand projects and continue receiving
orders from existing customers■Efforts to secure stable orders

User
company

SIer

Our Group

Percentage of directtransactions: 67.4%*1
Customer repeat rate: 74.4%*2

Build close relationships with user
companies to expand projects andcontinue receiving orders*1 Percentage of our net sales for FY2021/6. *2 Percentage of customers with sales recorded by Our Company in FY2020/6 who continued to record sales in FY2021/6

20

Growth Strategy by Segment (Outsourcing Business)
Business outline: Our Group’s private cloud and other data center services, data analysis and input, and nearshore system operation and maintenance■Features of Our Group’s data center•

Growthstrategy
Data center expansion

Target customers different from major
cloud users, and use AI-related and otherunique services as a hook tool to build up
customers and data usage.

Expansion of ERP nearshore

With the need for maintenance of ERP
products, centered on SAP ERP,
expected to increase toward 2027, Our
Company is strengthening its system
by training near-shore personnel in the
Kanazawa area.

Continuous data center
facility expansion

Gradually expand facilities according tooperating conditions to both improve quality
and ensure profitability.

••

Our Group’s data centers are located in Kanazawa and Tokyo, andcustomer companies use servers at the data centers.
The revenue structure is based on long-term continuous use, nottemporary use, and charges are based on the amount of data used,
so the more data is entrusted to us, the more stock-type sales willaccumulate.
It can also be used as a BCP measure by setting up a data centerin Kanazawa City, where earthquakes rarely occur*.

(1 million yen)

Data center monthly stock amount trend

110
100
90
80
70
60
50
40
‘19年
FY2019/6
6月期‘20年
FY2020/6
6月期

‘21年
‘21
FY2021/6
6月期
6月期

‘22年
‘22
FY2022/66月期
6月期* Sources: Japan Meteorological Agency seismic intensity database Number of earthquakes of intensity 1 or greater observed in 2021: 3 (maximum intensity 2)© 2023 System Support Inc.

21

Growth Strategy by Segment (Product Business)
Business outline: Development, sales, and customization of products (software) by Our Group
Mainly cloud-based products (monthly billing system); sales expansion throughdistributors in addition to direct sales
Number of companies with system installed(Company)

2000

Growthstrategy
Customer expansion

Maintaining andimproving highprofitability

Existing main products are almost
profitable, with cumulative segment
profit ratio of 26.6% in 2Q of
FY2023/6. Maintain a structure inwhich sales growth leads to higher
profits and secure high profits.
* As of December 31, 2022 (cumulative)© 2023 System Support Inc.

1500
1000

In order to increase new customers, Our
Company will expand sales channels foragents and strengthen advertising andpublicity. In addition, Our Company will aim toincrease the number of users by expanding thenumber of divisions within existing customers.

Functional
enhancement

Continue to enhance existingproducts to reduce lead time until
introduction and improve
competitiveness against othercompanies’ products.

500
0Sep. 30,
2019

Dec. 31,2019

Mar. 31,2020

Jun. 30,
2020

Sep. 30,
2020

Dec. 31,2020

TateyakushaMar. 31,2021

MOS

Construction information management
system for the building industry

Jun. 30,
2021

Sep. 30,
2021

Dec. 31,2021

ShugyoyakushaMar. 31,2022

Jun. 30,
2022

Sep. 30,
2022

Dec. 31,2022

SHIFTEE

Mobile order and supply system

Tateyakusha

696 companies (including OEMs)*

677 companies*

Cloud-based shift management
systemAttendance and work management
system
Shugyoyakusha

110 companies*

160 companies*

22

Growth Strategy by Segment (Overseas Business)
Business overview: System integration overseas (in the U.S. and Canada), outsourcing of payroll andaccounting services, recruitment services, and media management

Growthstrategy

Our subsidiary
STS Innovation Canada(Vancouver, Canada)

Support forcompanies entering
North America
Expansion of
cutting-edge
services in Japan

Collecting cutting-edge IT
information to develop
promising businesses inJapan© 2023 System Support Inc.

Support for IT infrastructure,
recruitment, and marketing ofJapanese companies entering
North America

Strengthening
outsourcing services

Strengthen remote monitoring
services for Japanese companies
using the time difference between
Japan and North America andoutsourcing services for Japanesecompanies in the U.S.

Support for companies entering
North America and remotemonitoring service using timedifference★
★

Outsourcing
services forJapanesecompanies in
the U.S.
Our subsidiary
STS Innovation(Silicon Valley,
U.S.A.)

23

Our Company Topics for FY2023/6 (July 2022 to January 2023)
Date

Subject

July 8, 2022

Number of Google Cloud certifications held by our employees exceeds 120.
Focusing on training engineers in data analysis, a field in which Google Cloud excels.

July 8, 2022

Our employees have won the Microsoft MVP award (Data Platform) five times in a row.

July 12, 2022

System Support moved Microsoft Base Kanazawa in front of Kanazawa Station.
Started offering free DX education for the public, and set up co-working space with private booths.

July 25, 2022

Conducted an online seminar (Microsoft Base Kanazawa New Facility Opening Ceremony and Opening Memorial Webinar).

August 1, 2022

System Support assisted in the migration of the Nikkei ID platform from on-premise to AWS.
Succeeded in a secure migration of the Nikkei ID, which is used by 10 million members for web service logins, with short downtime andno complete shutdown.

August 30, 2022

Microsoft Base Kanazawa is certified as a subsidized facility for the “Project to Expand the Use of Private Facilities Utilizing Trees in
Ishikawa.”

September 20, 2022

Received Oracle Certification Award 2022.

October 3, 2022

System Support provides DX training at Microsoft Base Kanazawa for young employees of Ishikawa Prefectural Police.
They learned basic knowledge of DX and simple web application development.

October 4, 2022

System Support obtained data analysis specialization with Google Cloud Partner Advantage program.
Proved our proficiency and successful track record in data analysis.

October 6, 2022

System Support developed three solution packages that leverage Google Cloud services and launched them on October 6.
Google Cloud services are packaged and can be started in a short period of time.

October 21, 2022

System Support held “HoloWeen,” a Halloween event where visitors can experience cutting-edge MR (Mixed Reality) technology.
Microsoft HoloLens 2 utilized at Microsoft Base Kanazawa.

© 2023 System Support Inc.

24

Our Company Topics for FY2023/6 (July 2022 to January 2023)
Date

Subject

November 24, 2022

Eight-Japan Engineering Consultants Inc., an integrated construction consultant, adopts Celonis as its DX platform to evolve its entire
value chain.

December 13, 2022

System Support held "Ho-Ho-HoloLens," a Christmas event where visitors can experience cutting-edge MR (Mixed Reality) technology.
Microsoft HoloLens 2 utilized at Microsoft Base Kanazawa.

December 22, 2022

System Support selected by Google Cloud as AlloyDB launch partner.

January 10, 2023

System Support starts to provide “Introduction Support Service for Azure+OCI.”
We help customers who wish to use Oracle Database on Microsoft Azure to build a high-performance, cost-effective multi-cloudenvironment.

January 12, 2023

System Support introduces a “remote work system outside commuting area” with the aim of securing human resources by improving
employees’ work environment.

© 2023 System Support Inc.

25

Microsoft Base Kanazawa Initiatives
 Microsoft Base Kanazawa, a facility in Kanazawa City, Ishikawa Prefecture, is operated under

the concept of “Kanazawa-based IT urbanization in the Hokuriku area.” It provides a place forcloud-centered communication, where people can receive DX education and experience thelatest technologies to promote DX by industry, academia, public and private sectors.
Universities
andstudents

Enterprises
Community

Stakeholders••

Support for the promotion of DX by industry, academia, and the publicthrough the provision of free DX education, etc.
Expanding local businesses, revitalizing the economy, and creating new
business opportunities by providing co-working spaces and other businessspaces.

Implementation offree DX education© ©20232023 System
SupportInc. Inc.
System
Support

Provision of business space(co-working space)Interaction with IT
engineers and holding
events

Latest VR and
MR experiences
26
26

Disclaimer and Forward Looking Statements
This document has been prepared by System Support Inc. (hereinafter referred to as “Our

Company”) for the purpose of providing investors with an understanding of the current
status of Our Company.
The contents of this document are prepared based on economic, social, and otherconditions generally recognized as prevailing at the time this report was prepared, as wellas certain assumptions that we have judged to be reasonable, but may be subject to change
without notice due to changes in the business environment or other reasons.
The materials and information provided in this presentation include so-called “forward
looking statements.” These statements are based on current expectations, projections, andassumptions with risks and involve uncertainties that could cause results to differ materiallyfrom those in the statements.
Such risks and uncertainties include general industry and market conditions, and generaldomestic and international economic conditions such as interest rate and currency
exchange rate fluctuations.
For further information, please contact:
Investor Relations, Administrative Planning Department, System Support Inc.
TEL: 076-265-5151 E-mail: ir@sts-inc.co.jp© 2023 System Support Inc.

27

Thank you