Financial Results
for the 6 Months Ended
June 30,2021
July 29,2021
SIOS ,Corp.
（Stock Code: 3744 on the Second Section of Tokyo Stock Exchange）© SIOS Corporation All rights Reserved.

Summary of Business Results
for the 6 Months Ended
June 30 ,2021© SIOS Corporation All rights Reserved.

Consolidated Financial Results
for the 6 Months Ended June 30,2021(In millions of yen)

Results for the6 months ended
June 30,2020

Net Sales

7,276

Gross profit

2,178

Operating income

54

Ordinary income

57

Profit attributable toowners of parent

19

EBITDA101

ROIC(annualized)

3.5%

Results for the
6 months ended
June 30,2021

8,079
2,486295316234
334
16.9%

Change%Change+802+11.0%+307+14.1%+241+443.2%＋258＋446.0%＋214－＋233＋231.6%－－*EBITDA: Operating profit + Depreciation + Amortization of goodwill*ROIC: Operating profit after tax / (Shareholders’ equity + Interest-bearing debts)© SIOS Corporation All rights Reserved.

3

Consolidated Net Sales(In millions of yen)

Record-high net
sales achieved in
FY 2021(Up 11.0% YoY)

© SIOS Corporation All rights Reserved.

4

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

⚫ Operating profit for the firsthalf of FY 2021 increasedby ¥241 million from thesame period the previous
fiscal year.
⚫ EBITDA up ¥233 million YoY.
⚫ R&D spending remainedrobust.
© SIOS Corporation All rights Reserved.

5

Open System Infrastructure BusinessNet sales

5,054 million yen, up 20.8％ YoY（In millions of yen）

As corporate clients continued to invest

heavily in implementing DX* solutions
amid the COVID-19 crisis,⚫ Sales of software products sourced
from Red Hat, Inc.* were strong.
⚫ Sales of LifeKeeper*, which is ourcore product, achieved stablegrowth.
Note: See the Glossary on Page 28 for descriptions of terms with an asterisk.
© SIOS Corporation All rights Reserved.

6

Open System Infrastructure BusinessSegment income

215 million yen, compared with on lossof 5 million yen the year before（In millions of yen）

⚫ Segment income of theOpen System Infrastructure
Business was up YoY as aresult of increased sales.

© SIOS Corporation All rights Reserved.

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Application BusinessNet sales

3,024 million yen, down 2.2％ YoY（In millions of yen）

⚫ Sales of software applications forMFPs*, which are our core products,
and revenues from the Gluegent
series* achieved YoY growth.
⚫ Revenues from the provision of
support for system development
and implementation to financial
institutions declined.

© SIOS Corporation All rights Reserved.

8

Application Business
Segment income

79 million yen, up 32.7％ YoY（In millions of yen）

⚫ Segment income of theApplication Business was up
YoY as a result of strong
sales of our products
developed in-house.

© SIOS Corporation All rights Reserved.

9

Consolidated Balance Sheets(In millions of yen)

Currentassets
6,059(includingcash anddeposits of2,858)

Investment andother assets 547

Total assets
6,851

Totalliabilities
5,303(includinginterestbearing
debts of479)

Total net
assets1,548

Investment andother assets 568

Total liabilities
and net assets

Total assets
投資その他
438
6,465

6,851

◼ Property, plant and equipment◼ Intangible assets 112

As of December 31, 2020⚫
⚫

Current
assets5,652(including
cash anddeposits of3,240)

131

Totalliabilities
4,725(includinginterestbearing
debts of377)
Total net
assets1,739
Total liabilities
and net assets

6,465◼ Property, plant and equipment 143◼ Intangible assets 100

As of June 30, 2021

Current assets: Down by ¥481M in inventories
Current liabilities: Down by ¥865M in accounts payable trade; up by ¥502M
in advances received© SIOS Corporation All rights Reserved.

10Analysis of Consolidated Cash Flows(In millions of yen)

47

2,728

Cash and cash
equivalents as ofDecember 31,2020

28
3,240

△208644

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities© SIOS Corporation All rights Reserved.

Effect of exchangerate change on
cash and cash
equivalents

Cash and cash
equivalents as ofJune 30, 2021
11

Year-on-Year Changes in Cash Flows
Cash flows from operating activities
Net amount of cash generated or used
BreakdownAmount of cash
generated

Amount of cash used

¥644M net cash generated
Profit before income taxes:¥313M
Cash generated as a result of adecrease in trade receivables:¥420M
Cash generated as a result of adecrease in inventories:¥481M
Cash generated as a result of anincrease in advances received:¥467M
Cash used to reduce tradepayables:¥865M

Cash flows from investing
activities¥47M net cash generated

Cashflows from(Millionsof financingyen)
activities¥208M net cash used

Proceeds from withdrawal oftime deposits:¥130M

Cash used to pay for asset
retirement obligations:¥30M
Cash used to purchaseinvestment securities:¥25M

Cash used to repay long-termborrowings:¥61M
Net decrease in short-termborrowings:¥50M
Cash used to pay dividends:¥86M© SIOS Corporation All rights Reserved.

12Major Achievementsin the First Six Months of FY 2021

© SIOS Corporation All rights Reserved.Primary Objective and Management Metrics Established

Primary Management Objective
Under the mission of making the impossible possible for the people ofthe world, the SIOS Group works toward achieving its primary management
objective of pursuing innovative 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 three driving forces for our growth—people, research and development,
and a corporate culture that fosters innovation—and to return profit to ourshareholders and stakeholders. Through these efforts, the Group works towardachieving its primary management objective.
© SIOS Corporation All rights Reserved.

14

Basis for Achieving the SIOS Group Mission
Make the businessSee page 16
foundation more solid
Raise the level ofCarry out
customer
M&A
satisfaction
Release new
products andservices

Maintain good
relationships
withEnhance existing
stakeholders
products andservices

Make the business See page 16
foundation more solid

Improve performanceon key management
metrics

Generate
positive cashflows

Reduce interest-bearing
debts

Invest in people, R&D, and acorporate culture that fosters
innovation

Return profit toshareholders and otherstakeholders

Increase sales andgross profit
Optimizing SG&A expenses

Invest to achieve the mission
Return profit to shareholders andother stakeholders

Achieve greater
EBITDA andROIC© SIOS Corporation All rights Reserved.

15

Review of 1H FY 2021
Enhanceexisting
products andservices
Optimizing SG&A
expenses

Reduceinterestbearing debts•••

Bolstered our SaaS* business, including Gluegent series
service products (see pages 17 to 21 for details).
Upgraded cloud application for LifeKeeper.
Stepped up our efforts to assist colleges and universities in
implementing cloud solutions.

Facilitated a merger between two consolidatedsubsidiaries.
(SIOS Technology absorbed Profit Cube on April 1, 2021.)

Repaid ¥111 million of loans payable.

© SIOS Corporation All rights Reserved.

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High-Priority Business Strategy:Bolstering Our SaaS Business© SIOS Corporation All rights Reserved.

High-Priority Business Strategy: Bolstering Our SaaS Business
Invest more heavily in expanding our SaaS business to better serve
corporate clients and accelerate the Group's growth
Our B2B Business Domains•Highpriority
areaSaaS

Softwarelicensingandsubscription* services

Systemintegration
services

Sales ofsoftware
applications
sourcedfromoutside theGroup

Projected Japanese market for SaaS for 2021: 1.2 trillion
yen(Source: "Cloud Computing Market 2021--Today and Future," published by Fuji Chimera ResearchInstitute, Inc.)•The SaaS market is projected to maintain strong growth
momentum, benefiting from a shift to teleworking and DX
solutions in corporate environments.

We will invest more heavily in our SaaS
business, while taking advantage of ourexisting B2B products and services, such assystem integration services and software
applications.
© SIOS Corporation All rights Reserved.

18First Phase of SaaS Enhancement: Gluegent Series
The Gluegent series service products are designed to assist corporate clients in
shifting to teleworking and implementing DX solutions, and include theGluegent Flow cloud-based workflow system and the Gluegent Gate SaaS
authentication system.

Cloud-based workflow system

SaaS authentication infrastructure solution

A variety of cloud-basedservices
The entire workflow
managed in the cloud

RequestEmployee

Approval

First approver

AuthorizationFinal approver

Unauthorizeddevices© SIOS Corporation All rights Reserved.

External users

Internal users

Authorized users and devices

Offices and remotelocations

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ARR1 of the Gluegent Series
The Gluegent series growing faster than the SaaS market2(Millions of yen)

271
June 2017

Up 21.7％333
June 2018

381

June 2019

471

June 2020

574

June 2021

1. ARR: Annual Recurring Revenue, obtained by multiplying MRR (monthly recurring revenue, which is a predictable revenue that a business counts on receiving every
month from subscriptions) by 12
2. "Cloud Computing Market 2021--Today and Future," published by Fuji Chimera Research Institute, Inc., predicts that the Japanese SaaS market for 2021 will grow
15.6% year on year to 1.2 trillion yen.

© SIOS Corporation All rights Reserved.

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Strategy to Increase ARR of the Gluegent Series
2021 will prove to be the turning point that will accelerate
the growth of ARR of the Gluegent series.
Step up marketingefforts
ARR・Recruit experienced marketing professionals
・Invest in digital marketing programs➡ Increase awareness of Gluegent in themarket and acquire new businesses
Step up productdevelopment efforts
・Assign more engineers to product developmentprojects
・Develop products that will meet user needs
Year2021➡ Offer clients the right products at the righttime© SIOS Corporation All rights Reserved.

21

Business Forecasts for

Fiscal Year Ending December 31, 2021

© SIOS Corporation All rights Reserved.

Updated Business Forecasts for FY2021
Annual forecasts revised upward to reflect the better-than-expectedbusiness results for the first half
(Millions of yen)
Earlier Forecasts(announced January28, 2021)

Net Sales
Operating
Income15,500320

EBITDA

410

ROIC

9.2%

UpdatedForecasts

15,70048056013.2%© SIOS Corporation All rights Reserved.

% Change+1.3%+50.0%+36.6%－23Percentage of First-Half Results to Updated Forecasts
We intend to maintain our momentum of growth for 11 consecutive
fiscal years and achieve net sales of ¥15.7 billion in FY 2021.
（In millions of yen）

Results for the
6 months ended
June30,2021

Net sales

8,079

Operating income

295

Ordinary
income316

Profit attributable toowners of parent

234

EBITDA

334

ROIC(annualized)

16.9%

Forecast for fiscalyear ending
December 31, 2021

Percentage ofachievement

15,700480510
390
560
13.2%

51.5%

© SIOS Corporation All rights Reserved.

61.6%
62.0%
60.1%

59.8%

－24

Cash Dividends for FY 2020
24th term

25th term

Fiscal year ended

Fiscal year ending
December 31, 2021

December 31, 2020

(Forecast)

Annual cash
dividend pershare

Fiscal year ending
December 31, 2021

¥10

¥10Plan to pay a cash dividend of ¥10 per share at fiscal year-end.

(Forecast)© SIOS Corporation All rights Reserved.

25

Appendix© SIOS Corporation All rights Reserved.

About SIOS Corporation
SIOS is Innovative Open Solutions
Listed on the Second Section of the Tokyo Stock Exchange, SIOS Corporation is a holding company that manages

subsidiaries having a wealth of expertise and assets in open source software, including Linux, AI and cloudtechnologies, and Fintech.
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.
Headquarters
CapitalEstablished

SIOS Building, 2-12-3 Minami Azabu Minato-ku, Tokyo,
Japan
1,481 million yen
May 23, 1997

No. of employees

454 on a consolidated basis (as of December 31, 2020)

Main consolidatedsubsidiaries

Japan:SIOS Technology, Inc.

U.S.A.:
SIOS Technology Corp.

© SIOS Corporation All rights Reserved.

27

GlossaryPage

TermDescription

6

Digital transformation (DX)A process in which a company uses data and digital technology to transformits products, services, and business models to more effectively respond toconstantly changing business environments and deliver greater value tocustomers and society as well as to transform its business processes andorganizational structure and culture to gain greater competitive advantage.

6Software products sourced
from Red Hat, Inc.

Open-source software products developed by Red Hat, Inc., a provider ofopen-source solutions.

6LifeKeeper

A failover software product that automatically switches a failed primary server
to a backup server.

8Software applications for
multifunction printers (MFPs)

8

Gluegent series

16SaaS

18

Subscription business model

A multifunction printer (MFP) is a piece of office equipment that incorporates
print, scan, copy, and fax capabilities into one unit. The Group develops,
markets, and updates document management software applications, such as
Quick Scan and Speedoc, that run on an MFP.
Service 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 afunction to manage schedules of team members into Google Calendar.
Software as a Service. A software licensing and distribution model that allows
users to connect to and use cloud-based software applications over the internet.
A business model that charges customers a recurring monthly or annual fee toaccess a software product or service.
© SIOS Corporation All rights Reserved.

28

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-lookingstatements. Significant risks and uncertainties 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 Corporation All rights Reserved.

29