Financial Resultsfor Fiscal Year
Ended December 31, 2021

February 3,2022
SIOS ,Corp.
（Stock Code: 3744 on the Second Section of Tokyo Stock Exchange）© SIOS Corp. All rights Reserved.

Summary of Business Results
for the Fiscal Year Ended
December 31, 2021 (FY 2021)© SIOS Corp. All rights Reserved.

Consolidated Financial Results for FY 2021
FY2020Results

FY2021Results

Net Sales

14,841Gross profit

4,465

Operating income

236

Ordinary income

256

Profit (loss)
attributable toowners of parent

310

EBITDA329

ROIC

6.9%

15,725
4,884
358
400
36744810.0%*EBITDA: Operating profit + Depreciation + Amortization of goodwill*ROIC: Operating profit after tax / (Shareholders’ equity + Interest-bearing debts)© SIOS Corp. All rights Reserved.

(In millions of yen)

Change%Change＋883＋6.0%＋419＋9.4％＋122＋51.7％＋143＋56.1%＋57＋18.6%＋118＋36.1%－－3

Consolidated Net Sales（In millions of yen）

14,841

15,725

Record-high net
sales achieved in
FY 2021(Up 6.0% YoY)

FY2020

FY2021© SIOS Corp. All rights Reserved.

4

Consolidated Operating Profit, EBITDA, and R&D Spending（In millions of yen）

800

616

638

600
400

236

329

358

448200⚫ Operating profit for the
first half of FY 2021
increased by ¥122 million
from the same period theprevious fiscal year.

0FY2020
Operating Profit⚫ EBITDA up ¥118million
YoY.
R&D Spending

FY2021
EBITDA© SIOS Corp. All rights Reserved.

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Consolidated Balance Sheets
As of December 31, 2020

Current
assets 6,059(including
cash anddeposits of2,858)

Investment and otherassets 547

Totalliabilities
5,303(includinginterestbearing
debts of479)

Current
assets 5,774(including
cash anddeposits of3,148)

Total net
assets1,548

Investment and otherassets 653

Total liabilities⚫
⚫

As of December 31, 2021

（In millions of yen）

Totalliabilities
4,752(includinginterestbearing
debts of314)

Total net
assets1,897
Total liabilities

Total assets
and net assets
6,851
6,851

Total assets
and net assets
6,649
投資その他 438
6,649

◼ Property, plant and equipment 131◼ Intangible assets 112◼ Property, plant and equipment 121◼ Intangible assets 100

Current assets：A decrease of 484 million yen in merchandise.
Current liabilities：A decrease of 628 million yen in accounts payable trade.
an increase of 328 million yen in advances received.
© SIOS Corp. All rights Reserved.

6

Analysis of Consolidated Cash Flows（In millions of yen）

4258

3,148

△267

2,728

587

Cash and cash
equivalents as ofDecember 31,2020

Cash flows fromoperatingactivities

Cash flows frominvesting activities

Cash flows fromfinancing activities© SIOS Corp. All rights Reserved.

Effect of exchange
rate change on
cash and cash
equivalents

Cash and cash
equivalents as ofDecember 31, 2021

7

Year-on-Year Changes in Cash Flows（In millions of yen）
Cash flows from operating
activities
Net amount of cash generated orused
Amount of cash
Breakdown
generated¥587M net cash generated
Profit before income taxes:¥396M
Cash generated as a result of adecrease in trade receivables:¥222M
Cash generated as a result of adecrease in inventories:¥429M
Cash generated as a result of
an increase in advances
received:¥271M
Cash used to reduce trade
Amount of cash usedpayables:

Cash flows from investing
activities

Cash flows from financing
activities¥58M net cash generated¥267M net cash used

Proceeds from withdrawalof time deposits:
¥130M

¥628M

Cash used to pay dividends:¥87M
Cash used to repay longterm borrowings:¥123M© SIOS Corp. All rights Reserved.

8

Open System Infrastructure BusinessNet sales

9,588 million yen, Up 7.9％ YoY）

（In millions of yen）

As corporate clients rushed to invest in
DX* to better deal with the challenges

9,588

brought about by the COVID-19 crisis,⚫ sales of software products sourced

8,883

from Red Hat, Inc.* remainedstrong,⚫ and sales of our core LifeKeeper*FY2020

FY2021increased.

Note: See the Glossary on Page 33 for descriptions of terms with an asterisk.
© SIOS Corp. All rights Reserved.

9

Open System Infrastructure Business
Segment income

352 million yen, Up 44.6％ YoY）

（In millions of yen）

352

Segment income of the Open

System Infrastructure Business

244

was up YoY, driven by robustsales.
FY2020

FY2021© SIOS Corp. All rights Reserved.

10

Application BusinessNet sales

6,136 million yen, Up 3.0％ YoY）

（In millions of yen）

⚫ Revenues from our core software
applications for MFPs* and the5,957

6,136

Gluegent series* grew year onyear.
⚫ Sales of the management support
system to financial institutions
recorded growth.
⚫ Revenues from providing financial
institutions with support for system

FY2020

FY2021development and implementation
declined.

© SIOS Corp. All rights Reserved.

11

Application Business
Segment income

4 million yen, compared with on loss of
8 million yen the year before（In millions of yen）

Growth of revenues from ourcore software products
helped return this segment△8FY2020

4into profitability.

FY2021© SIOS Corp. All rights Reserved.

12

Review of FY 2021

© SIOS Corp. All rights Reserved.

Basis for Achieving the SIOS Group Mission
Make the businessfoundation more solid
Raise the level ofCarry outcustomer
M&A
satisfaction

Release new
products andservices

Maintain good
relationships
withEnhance existing
stakeholders
products andservices
Make the businessfoundation more solid

Improve performanceon key management
metrics

Generate
positive cash
flows

Increase sales andgross profit
Optimizing SG&A expenses
Reduce interest-bearingdebts

Invest to achieve the mission
Return profit to shareholders andother stakeholders

Invest in people, R&D, and acorporate culture that fosters
innovation
Return profit to shareholders
and other stakeholders

Achieve greater
EBITDA andROIC© SIOS Corporation All rights Reserved.

14

Review of FY 2021①
Enhanceexisting
products andservices【Key strategies and actions planned for FY 2021】

To promote the Group's offerings of cloud solutions to meet
corporate clients' increasing appetite to invest in DX
・To upgrade the cloud application for LifeKeeper
・To step up sales efforts for the Gluegent series
・To provide broader support to universities in their efforts
to implement a cloud environment【Achievements】
・LifeKeeper turned out to be a key profit driver for the Group. The Group continued to upgrade
its cloud application.

・The provision of assistance to universities in implementing a cloud environment also
contributed to the Group's profit.
・The Group's efforts to expand its SaaS* business paid off; the Gluegent series, the focus of theefforts, achieved growth in sales and contributed to the Group's bottom line.

© SIOS Corp. All rights Reserved.

15

Review of FY 2021②Enhance existingproducts andservices
Optimizing SG&Aexpenses【Key strategies and actions planned for FY 2021】
・To consolidate the Group's business operations in Japan into
SIOS Technology, Inc.
・To pursue greater cross-selling opportunities for theGroup's products and services and make the Group's
management structure more robust
・To achieve greater operational efficiency and productivity【Achievements】
・Consolidated the Group's business operations in Japan into SIOS Technology in April 2021.
・The Group achieved record-high net sales for the year (15.7 billion yen), as a result ofpursuing cross-selling opportunities for the Group's products and services and achieving
greater operational efficiency and productivity.

© SIOS Corp. All rights Reserved.

16

Review of FY 2021③
Optimizing SG&A
expenses

To close the Platinum Tower Office inMinato-ku, Tokyo

Achievement: Closed the office as planned, which would lead to savings on
operating costs for FY 2022 and beyond.

Return profit to shareholders
and other stakeholders

To pay an ordinary dividend of ¥10 per
share for the year

Achievement: The Company plans to pay a 25th anniversarycommemorative dividend of ¥5 per share in addition to an ordinary
dividend of ¥10 per share for the year.
© SIOS Corp. All rights Reserved.

17

Medium-Term Business Planfor FY2022-2024・BusinessForecasts for FY 2022

© SIOS Corp. All rights Reserved.

Primary Objective and Management Metrics Established

Primary Management Objective
Under the mission of making the impossible possible for the people of the world, theSIOS Group works toward achieving its primary management objective of pursuinginnovative solutions to resolve issues affecting people and to contribute to a better society.

Management Metrics
The Group uses EBITDA and ROIC as its key management metrics to continue togenerate positive cash flow. Positive cash flow enables the Group to invest in the threedriving forces for our growth—people, research and development, and a corporate culturethat fosters innovation—and to return profit to our shareholders and stakeholders.
Through these efforts, the Group works toward achieving its primary management

objective.
© SIOS Corp. All rights Reserved.

19

Key Strategies for FY 2022①
Enhanceexisting
products andservices
Release new
products andservices

To continue to invest heavily in expanding the Group's
SaaS business in order to better serve corporate clientsand accelerate the Group's growth

・To continue to upgrade cloud application for LifeKeeprand other existing products
・To continue to step up sales efforts for the Gluegentseries
・To venture into the Med Tech businessTo continue to pursue cross-selling opportunities for theGroup's products and services in order to achieve greater
productivity© SIOS Corp. All rights Reserved.

20

Continue to Invest in the SaaS Business【Our B2B Business Domains】

Highpriority
area(continued)

SaaS

Softwarelicensing andsubscription*
services

Systemintegration
services

Sales ofsoftware
applications
sourced fromoutside theGroupThe SaaS market is projected tomaintain strong growth momentum,
buoyed by an accelerating DX trend in
corporate environments.

The Group will continue to invest
heavily in its SaaS business, while
taking advantage of its existing B2B
products and services, including system
integration services and software
products.

© SIOS Corp. All rights Reserved.

21

Focused Business ① Gluegent Series
The Gluegent series service products are designed to assist corporateclients in shifting to teleworking and implementing DX solutions, andinclude the Gluegent Flow cloud-based workflow system and theGluegent Gate SaaS authentication system.
【Gluegent Flow Information System Cloud (released in December 2021)】

Requester in auser department

Manager in auser department

Automaticprocessing

UserIT department

Requests thatan ID beassigned,updated, orinvalidated.

Approves theassigning,updating, orinvalidatingof an ID.

Assigns,updates, orinvalidates
an ID.

SSO
login
controlID
verification
monitoring

HR management
systemCloud services© SIOS Corp. All rights Reserved.

22

Focused Business ① Gluegent Series【 ARR* of the Gluegent Series (In millions of yen) 】
542577436

313

2017/12359

2018/122019/12

2020/122021/12

1. ARR: Annual Recurring Revenue, obtained by multiplying MRR (monthly recurring revenue, which is a predictable revenue that a business counts onreceiving every month from subscriptions) by 12© SIOS Corp. All rights Reserved.

23

Focused Business ① Gluegent Series
Actions for FY 2022
Step up marketing efforts

Recruit marketing professionals and continue to step up
digital marketing efforts in order to raise awareness of theproduct in the market and win additional projects fromcorporate clients
Step up product development efforts
Add more engineers to the development team to create anddeliver products that meet corporate users' needs andexpectations© SIOS Corp. All rights Reserved.

24

Focused Business ② Med TechThe INDIGO NOTE electronic medical record service
to be released in spring 2022
【Advantages of INDIGO NOTE】• Offers features that specifically benefit mental hospitals.
• The first electronic medical record service in Japan to be compliant with the HL7®FHIR®
international standards for exchanging healthcare information between different systems• Enables medical professionals to access medical records stored• in the cloud from anywhere and anytime.

【Objectives】• Ensure the service's interoperability with diverse medical care systems• Develop the Med Tech business into another core business of the Group and continue todeliver innovative services as part of the group-wide efforts to help achieve a creative society© SIOS Corp. All rights Reserved.

25

Key Strategies for FY 2022②

Optimizing SG&A
expenses

To close the Tennozu Office inShinagawa-ku, Tokyo, which will lead tosavings on operating costs for FY 2023
and beyond

Return profit to shareholders
and other stakeholders

To continue to pay an ordinary annual
dividend of ¥10 per share© SIOS Corp. All rights Reserved.

26

Medium-Term Business Plan for FY2022-2024
Continue to invest in expanding the SaaS business to achieve an
EBITDA of 850 million yen and an ROIC of 21.5% for FY 2024
（In millions of yen）

2021

2022

2023

2024

EBITDA

448

220

530

850

ROIC

10.0%

3.0% 12.3% 21.5%© SIOS Corp. All rights Reserved.

27

Consolidated Business Forecasts for FY 2022
We intend to maintain our momentum of growth for 12 consecutive
fiscal years and achieve net sales of ¥16 billion in FY 2022.
（In millions of yen）

FY 2021
ResultNet sales

15,725(With the impact of the adoption ofthe “Amended AccountingStandards for RevenueRecognition” factored out)

15,725

Operating income

358

Ordinary income

400

Profit attributable toowners of parent

367

EBITDA

ROIC

448
10.0%

FY 2022
Forecasts

16,00016,400
100
12060
220
3.0%

Change% Changeーー675

＋4.3%

△258

△72.1%△280△70.0%△307△83.7%△228△50.9%ーー

Note: We plan to apply the "Amended Accounting Standard for Revenue Recognition" from the fiscal year ending December 2022, which is expected to affect sales.
© SIOS Corp. All rights Reserved.

28

Analysis of Projected Operating Profit for FY 2022
（In millions of yen）
An increase in sales andmarketing costs to be offset
by an increase in gross profit
resulting from robust sales
Upfront investment in
expanding the SaaS businessand upgrading cloud application
One-off expenses to be incurred for reducing
costs and improving productivity
・Expenses for closing the Tennozu Office: (80)・Expenses for replacing ERP: (36)

Operatingprofit for FY
2021 (results)

Increase ingross profit
resultingfrom robustsales (A)Increase incost of sales(B)

Increase inother SG&A
expenses

Increase inR&D
expenses

Increasein one-off
expenses

Projectedoperating
profit for FY2022

Note: Negative impact of ¥400M, resulting from the adoption of the "Amended Accounting Standards for Revenue Recognition," not factored into (A) or (B)© SIOS Corp. All rights Reserved.

29

Cash Dividends for FY 2021 and 2022

Annual cash
dividend per
share
Year-end cash
dividend（for fiscal year ended
December 31,2021）

Projected Year-endcash dividend（for fiscal year ending
December 31,2022）

24th term25th term

26th term

Fiscal Year Ended
December 31, 2021

Fiscal Year Ended
December 31, 2022

Fiscal Year Ended
December 31, 2023

¥10

¥15

¥10To pay a 25th anniversary commemorative dividend of ¥5 per sharein addition to an ordinary dividend of ¥10 per share

To continue to pay an ordinary dividend of ¥10 per share© SIOS Corp. All rights Reserved.

30

Appendix© SIOS Corp. All rights Reserved.

About SIOS Corporation
SIOS is Innovative Open Solutions
SIOS Corporation started as a system integrator that provided solutions based on Linux and other varieties ofopen source software. It is listed in the Second Section of the Tokyo Stock Exchange, and serves as a holding
company of a group that includes technology firms specializing in software products and SaaS solutions.
Under the mission of making the impossible possible for the people of the world, the SIOS Group pursues
innovative solutions to resolve issues affecting people and to contribute to a better society.
Visit https://www.sios.com to learn more about us.
Headquarters
CapitalEstablished

SIOS Building, 2-12-3 Minami Azabu Minato-ku, Tokyo,
Japan

1,481 million yen
May 23, 1997

No. of employees489on a consolidated basis (as of December 31, 2021)

Main consolidated
subsidiaries

Japan:
SIOS Technology, Inc.

U.S.A.:
SIOS Technology Corp.

© SIOS Corp. All rights Reserved.

32

GlossaryPage
99911TermDescription

A process in which a company uses data and digital technology to transform its products,services, and business models to more effectively respond to constantly changing businessDX
environments and deliver greater value to customers and society as well as to transform its(Digital transformation)business processes and organizational structure and culture to gain greater competitive
advantage.
Software products sourced from Open-source software products developed by Red Hat, Inc., a provider of open-sourcesolutions.
Red Hat, Inc.

LifeKeeper

A failover software product that automatically switches a failed primary server to a backup
server.
A multifunction printer (MFP) is a piece of office equipment that incorporates print, scan,

Software applications forcopy, and fax capabilities into one unit. The Group develops, markets, and updates document
multifunction printers (MFPs) management software applications, such as Quick Scan and Speedoc, that run on an MFP.

11

Gluegent series

15SaaS

21Subscription business modelService products designed to assist corporate clients in achieving greater operational
efficiency using cloud solutions. The series includes the Gluegent Gate cloud-based
management of user IDs, the Gluegent Flow cloud-based workflow system, and the Gluegent
Apps Group Scheduler, which incorporated a function to manage schedules of team members
into Google Calendar.
Software as a Service. A software licensing and distribution model that allows users toconnect to and use cloud-based software applications over the internet.
A business model that charges customers a recurring monthly or annual fee to access asoftware product or service.

© SIOS Corp. All rights Reserved.

33

Cautionary Statement
Forward-looking statements about the Company’s business outlook contained in this document reflect
management’s assumptions and judgments made on the basis of available information, and may include
risks and uncertainties. We caution that significant risks and uncertainties could cause actual performance
to differ materially from what is discussed in the forward-looking statements. Significant risks anduncertainties that might affect our performance include, but are not limited to, the economic environment

and market conditions in which we operate.

For inquiries about this document
Call the IR Section of SIOS Corporation on 03-6401-5111(+81-3-6401-5111 from outside Japan)
or fill in and send an online inquiry form available at:https://mk.sios.com/SIOS_Inquiry_english.html© SIOS Corp. All rights Reserved.

34