Long-term Vision and the Medium-termManagement Plan
(Based on FY9/2024-FY9/2026)

PCI Holdings, INC.
(TSE Standard Market: 3918)
November 15, 2023

Table of Contents
1. Review
2. Environment Surrounding Us
3. Long-term Vision “PCI X-formation 2032”
4. Medium-term Management Plan “PCI-VISION 2026”
5. Sustainability

1. Review

Review of the previous medium-term management plan(major strategies and its evaluation)
Establishing one-stop solutions
to meet all IT needs of customers
for both software and hardware
One-stop solutions throughthe integration of softwareand hardware technologies

Supporting the promotion ofdigital transformation
through high added-value

Five measures toward achievement

Strategic theme ofthe previous
medium-term
management plan

Details

Evaluation

Scale expansion and quality improvement of the system engineering services
business

Quality and quantity improvement by focusing on areasof expertise◎

Creation of optimal house-brand products, solutions,and services

Solution development based on AI/edge technologies〇

Promotion of cybersecurity-related businesses

Sales expansion in the industrial equipment sector△

Further reinforcement of cooperation with business partners and active
promotion of M&A

Promotion of one-stop services through the acquisition
of SORD〇

Reinforcement of organizational structure and promotion of work style reform

Promotion of human resources education, realization of work
styles based on business characteristics〇

3

Review of the previous medium-term management plan(financial results and target achievement)◼

Revenue and profit increased, but did not reach the target for the final fiscal year
⇒ Final fiscal year
Net sales: 95.0% vs. the plan, operating profit: 95.0% vs. the plan

Financial results for PCI-VISION 2023

Performance evaluation
FY9/2023(single year)

PCI-VISION 2023
FY9/2020(Millions of yen)

FY9/2021

FY9/2022

FY9/2023

3-year averageannual growth

Plan

ResultNet sales

16,75821,24925,17028,491+19.4%

30,00028,491

Operatingprofit

750

1,174

1,445

1,709

+31.6%

1,800

1,709

Operatingprofit margin

4.5%

5.5%

5.7%

6.0%

-

6.0%

6.0%

Net profit attributable toshareholders of theparent company forthe current period

287

670

643

1,008

+52.0%

1,070

1,008

ROE

5.8%

10.7%

8.5%

12.3%

-

-

-

Payout ratio

89.0%

40.7%

48.5%

33.0%

-

-

-

✓ Provision of one-stop solutions
through the integration ofsoftware and hardware
technologies⇒ The core strategy ofthe previous medium-term
management plan, but did
not progress as planned✓ Material purchase price⇒ Unexpected weakeningof the yen and soaring
material prices⇒ Delayed pass-through forsales prices✓ Group structure⇒ Unexpected separationof operating companies(also impacted thenext medium-term
management plan)

4

Review of the previous medium-term management plan(remaining issues and direction of solutions)◼

In the next medium-term management plan, we urgently need to build a foundation for new growth and higher
corporate value based on the review of the previous medium-term management plan

Areas

Remaining issues

Direction of medium- and long-term solutions

Business• Establishment of a PCI brand based on the trust of customers• High added-value with one-stop services of software andhardware• Diversification of business portfolio• Increase in corporate value by improving capital efficiency• Differentiation as PCI brand through the selection and concentrationof business areas• Branding by focusing on areas of expertise• Increase in corporate value with ROE/ROIC as indicators

Technology• Providing high value to customers by covering a wide range ofadvanced technologies• Early acquisition of new technologies with a long-term
perspective

Human
resources• Enhancement of employee engagement• Enhancement of educational programs for human capitalmanagement• Further enhancement of diversity and inclusion

ESG• Further reduction of environmental impact• Increasing awareness toward solving social issues• Further enhancement of the Group’s governance• Current and future technology selection based on a technology
roadmap• IP acquisition based on R&D activities• Enhancement of human capital management• Expansion of educational programs (reskilling, recurrent education)• Promotion of women’s empowerment, internationalization of humanresources• Implementation of cutting-edge approaches as an IT company• Practicing purpose-oriented management by spreading
the long-term vision• Establishment of the Group’s governance with a sense of unity52. Environment
Surrounding Us

External environment: Trend of domestic IT services market
The overall trend of the domestic IT services market✓ The size of the domestic IT services market is expected to expand steadily at an average annual growthrate of around 3-4% for the time being✓ Companies that increase IT budgets from the previous year are over 40% of the total(the highest in the past 10 years)

Trend by sector, industry, and company size
✓ By sector: Investment in digital transformation and automation by AI/IoT is expanding✓ By industry: Both the amount and growth rate of IT investment are high in the manufacturing industry(especially in the semiconductor and automotive industries)※ In the manufacturing industry, the proportion of software investment is increasing, and the cost of software andsemiconductor out of one finished product (e.g., automobile) is particularly increasing✓ By company size: Medium-size firms’ willingness to invest in IT outstrips that of major companies

Supply and demand outlook for IT human resources market✓ Despite the expanding IT demands, IT human resources are expected to go short due to a decrease
in workforce✓ In particular, a shortage of human resources for IT services using advanced technologies suchas AI and IoT is apparent

7

Internal environment: Strengths of the Group

Technical
capabilities

Relationships

Swiftness and highadded-value

Technologies with extensive trackrecords such as,-embedded software development-designing, manufacturing, andmaintenance of embedded PCs-designing and testing of semiconductors-AI-based image analysis

Strong customer base including
the automotive and semiconductor
industries

Swift system integration using
cloud platforms such as AWS

Extensive partner network
including platform holders,package vendors, softwarehouses, and electronics
trading firms

In-house manufactured productsthat apply AI-based image
analysis and cloud technologies

83. Long-term Vision
PCI X-formation 2032

Ideal state of PCI Group in 2032
PX2032 vision statement
We aim to continuously explore the possibilitiesof IT, contribute to the realization of a secure,safe, and prosperous society (= sustainable
society), and be a company that constantly
adapts to change and seeks growth.

Ideal state
Establishment of a corporate brandPresence in areas of mobility, AI-based image analysis, etc.
Evolution into an integrated technology and consulting company
Integration of high technological capabilities and deep
understanding of customers

PCI Group’s mission: Practice of corporate philosophy

Corporatephilosophy

We pursue the happiness of all of our employees:Achieving well-being

and contribute to the development of society:Fulfilling our social responsibilities

through the improvement of customer satisfaction:Closely addressing the genuine needs of our customers

PCI Group operates based on the universal mission to deeply understand the genuine needs of our customers as an IT provider andsolve various social issues through our customers by utilizing our strengths related to IT. We will also contribute to the realization of asecure, safe, and prosperous society by continuing to “Positively” “Change” and “Innovate” to meet the demands of the changing ages.

10Growth story
Continue to explore the potential of IT, contribute to the realization of a secure, safe, and prosperous society,and be a company that constantly adapts to change and seeks growth: PX2032
Environment surrounding usExternal
environment◼

◼
◼

Development of information
technology• Rapid revolution of AI• Broadening the base of digitaltransformation• Oligopolization of platform
holders
Demographic shift
Global environmental changes

Key issues

Keywords for realization

Business perspective(1) Exploration and acquisition ofadvanced technologies,
cooperation with platform holders• Selection and concentration ofbusiness areas - allocation of
resources to areas of expertise• Future technology selection basedon a technology roadmap

Resource allocation (3-year total)Internal
environment

◼
◼



◼
◼

ESG

◼

◼

Advanced technical capabilities
in embedded and AI/IoT areas
Strong customer base in areas
such as automobile andsemiconductors
Low profitability

Tightening of climate change
regulations
Spreading diversity andinclusiveness
Growing importance of
securing and developing
human resources
Engagement with shareholders
and capital market(2) Ideation and creation of added
value through a deeper
understanding of customers

Business perspective• Integration of high technologicalcapabilities and deep
understanding of customers• Solving social issues by
providing value to customers(3) Improving ability to convert
technology to value• Human capital
0.5
• R&D
1.5
• M&A-related
2.5
Total of 4.5 billion yen(4) Cost management, profit
maximization, and increase ininvestment and returns

Management perspective(5) Implementation of TCFD
Recommendations• Efforts to reduce environmental
impact• Educational enhancement,
equal opportunities• The practice of purpose-oriented
management• Increase in corporate value(ROE/ROIC)

Ideal state(6) Purpose, long-term vision, humanresource materiality, humanresource strategy(7) Pursuit of return on capital by
spreading the ROIC tree

Financial perspective• Optimizing the balance b/w
investment and shareholder
return over the long term

ESG perspective• Promotion of global warming
countermeasures• Achievement of well-being• Thorough accountability

11

Management targets◼
◼

Aim for 50.0-70.0 billion yen in net sales in the long-term vision to establish a corporate brandSustainably maintain ROE of around 15% to achieve growth with quality

Consolidated net sales(Billions of yen)Create through “multiplication” of the following
three measures:(1) Synergy among existing businesses(2) Synergy by M&A(3) Synergy from capital alliances, etc.

70.0

50.0
35.0
28.5
30.5

FY9/2023

FY9/2026

Second founding phase

FY9/2032

Branding phase124. Medium-termManagement Plan
PCI-VISION 2026

(Reference) Matrix between Business Companies and Business Segments...From October 1, 2023 onward

Engineering
Business

PCI Solutions

SORD

PRIVATECH

・Software engineering company
that provides technical capabilities
for any industry or field・Particularly strong in embedded
systems development

・The first PC manufacturer in Japan・50 years in business and highly
reliable technology
・Embedded PC manufacturer

・System engineering company
with strengths in semiconductor
design and testing technologies
・Testing house located near the
Tokyo metropolitan area

Information
technology services - Embedded software development(Manufacturers: mainly for automotive,that meet customer
telecommunications, information appliances, etc.)
requirements andEnterprise software development
specifications in a
(System integrators: mainly for finance, distribution,
wide range ofmanufacturing, government, etc.)
industries

Design, development,
Product/Device and sales of hardware
products and devices
Businessfor specific industries- Kitting services- Call center services(Manufacturers: PC help desk, etc.)- Development of embedded
computers–(Manufacturers: for medical equipment, printing
machines, etc.)- Computer development
for edge computing(System integrators: for medical, retail, etc.)

Problem solving
through consulting
ICT Solutions and services that
Business utilize ICT in a wide
range of fields- Solutions using AI- Cloud service Integration–(System integrators and manufacturers: mainly
for medical, retail, etc.)–- Design and testing ofsemiconductors(For semiconductor manufacturers)- LSI turnkey service(For electronic device manufacturers)- IoT solutions- Solutions using AI

Mutual collaboration by topic and by project14

Basic strategy◼

The period of the new medium-term management plan is defined as the second founding phase. Through the period, we 1) build
a foundation for further growth and 2) conduct proactive and strategic investment to improve the quality of revenue.

Basic concepts
Purpose-oriented
management

Basic strategy

Enhancement of competitiveness• Transition to a profitablebusiness model

Highly profitablestructure

Thorough cost management• Investment based on costeffectiveness

Human capitalmanagement

Maximization of capital efficiency
Targets set for
ROE/ROIC and PBR• Expansion of cash-generating
capability• Enhancement of growth investment

Enhancement of human capital investment and restructuring of humancapital management• Mobility sector,
image AI
technology• Systemdevelopment
through cloud
integration• Development ofenvironmentallyfriendly hardware• Development of a group of engineers by acquiring cutting-edge technologies• Accumulation of relationship management skills to deeply know our customers

Sustainable
management

Establishment ofa PCI brandSustainable growth• Appropriate maintenance of the business environment

Evolution into
an integrated
technology andconsulting
company

15

Business strategy: Engineering Business Segment◼

The Engineering Business Segment is the backbone of our revenue. Our first priority is to generate sustainable profit, and we willrefine our ability to respond to market changes and technical readiness based on these for steady growth with little fluctuation

Themes

Goals

Approaches

Specific measures

Enhancement ofcompetitiveness

Increase businessprofitability and createa capital-efficientbusiness model

1. Shift human resources to highly profitable areas
through the selection and concentration ofbusiness segments
2. Secure technical capabilities for the future(by developing them and through collaboration
with cutting-edge startups)
3. Reconfigure engineers’ knowledge and skills tobusiness and technological segments of focus• Increase emphasis on the mobility sector (automobile,
construction machinery, etc.)• Increase presence in areas requiring extensive
advanced technologies such as the “out-car” sector• Promote reskilling through educational investmentusing an industry-government-academia scheme• Promote diversity in human resources throughpartnerships with overseas (especially in Asia)

1. Optimize the ratio of direct and indirect costs
2. Reduce SG&A expenses by streamlining indirectfunctions• Revitalize by reorganization based on a reconsiderationof technical and managerial job classifications• Promote labor-saving and streamlining through digitaltransformation“Win” by technicalcapabilities
Thorough costmanagement

Aim for lean business
operations and build
resilience to changes
in the businessenvironment

16

Business strategy: Product/Device Business Segment◼

The Product/Device Business Segment is our stable core business based on hardware (goods). We will achieve sustainablegrowth by improving our technical capabilities and building a good customer base including medical device and semiconductor
manufacturers. In addition, we will differentiate ourselves and add high value through a comprehensive value proposition byenhancing services around “goods”

Themes

Goals

Approaches

Specific measures

Enhancement ofcompetitiveness

Increase businessprofitability and createa capital-efficientbusiness model

1. Provide comprehensive value covering multiple
steps in the customers’ value chain througha combination of products and services
2. Leverage product development and mass
production capabilities to develop and market
new products in sectors such as IoT and EdgeAI• Enhance services related to existing businesses suchas PC kitting, installation, and maintenance• Provide comprehensive services such as LSI turn-key(from circuit design to prototyping and mass productionof LSI)

1. Optimize procurement and purchasing
2. Reduce SG&A expenses by streamlining indirectfunctions• Promote labor-saving and streamlining through digitaltransformation“Win” byrelationships
Thorough costmanagement

Aim for lean business
operations and build
resilience to changes
in the businessenvironment17

Business strategy: ICT Solutions Business Segment◼

The ICT Solutions Business Segment is a growth driver of PCI Group, and we will proactively invest our management resources toenhance competitiveness••

Platform business: Focus on areas of strength such as cloud-related and AI-related and provide swift and high value-added solutions
Main frame business and others: Aim for expanded business opportunities through cross-selling with other businesses based ona good customer base

Themes

Goals

Approaches

Enhancement ofcompetitiveness

Increase businessprofitability and createa capital-efficientbusiness model“Win” by swiftness
and high addedvalue

1. Focus on services of strength (cloud integration,
AI-based image analysis, etc.) and concentrateengineer resources
2. Package and commercialize solutions provided
to customers and expand sales to customers
with similar needs
3. Keep monitoring the expansion of needs throughcustomer contacts at all times to explore newservice areas and proactively acquire necessary
technologies• In cloud integration, swiftly provide added value tocustomers by combining platform services such as
AWS and other applications/in-house developed
software• In AI, provide solutions to various needs in anomaly
detection-related or smart-cities centered on ourstrength in image analysis technology

Aim for lean business
operations and build
resilience to changes
in the businessenvironment

1. Promote efficiency through the selection andconcentration of platform services handled
2. Compress indirect functions and convert them toa customer contact function or a customer
needs-capturing function within the Group• Revitalize by reorganization based on a reconsiderationof technical and managerial job classifications• Promote labor-saving and streamlining through digitaltransformation

Thorough costmanagement

Specific measures18

Cost management strategy◼ Thorough cost • Proactive investment based on cost-effectiveness: Expanding expenses tied to revenue and reducing indirect expenses
management • Reinforcement of advance spending: Education and training expenses, R&D expenses, amortization of goodwill, etc.
⇒ Setting improvement of “SG&A expenses/gross profit” ratio as KPI with a target of 65%

Increase
Engineering
Business

Increase

SG&A expenses
Control• Expansion of collaboration with partners• Proactive approach to highprofitability projects

Product/Device
Business

Cost of sales
Control• Cost expenditureassociated withthe enhancement ofcompetitiveness such as
strategic businessexpansion and increased
revenue• Improved productivity by promoting off-site
development, etc.
• Review of low-profitability projects• Reduction of material purchase prices• Standardization of material purchase• Direct expenses to enhance
the sales force• Incentive expenses tomotivate employees• Up-front expenses for the
futureICT Solutions
Business

Indirect functions• Streamlining and simplification of all indirectfunctions(considering structural reorganization, etc.)

19Management targets (3-year plan)◼

Organic growth targets• By implementing strategies bybusiness segment, we aim toincrease sales and profit andachieve various managementtargets over the three years basedon the existing business portfolio• In FY9/2024, revenue and profit isexpected to decrease year-onyear due to impacts of theseparation of subsidiaries
However, we will use these three
years as a period to build
a foundation to achieve the longterm vision and focus on growing
our business performance andconsolidating our foothold◼

PCI-VISION 2026

3-year changes (*)

FY9/2023
FY9/2024(Millions of yen)

FY9/2026

3-yearchanges

Average annual
growth rate

Challenging

targets
FY9/2026

Net sales

28,491

26,30030,500

4,539

5.5%

Operating profit

1,709

1,510

2,750

1,403

26.9%

Operating profit
margin

6.0%

5.7%

9.0%

+3.8p

Net profit attributable
to shareholders of
the parent company forthe current period

1,008

880

1,500

711

23.9%

EBITDA

2,097

1,850

3,050

1,408

22.9%

ROIC

11.3%

9.7%

≥15%

－

－

≥15%

ROE

12.3%

10.1%

≥15%

－

－

≥15%

Total payout ratio

33.0%

≥60%

≥50%

－

－

≥50%

PBR

1.25

≥2

－

－

≥2

－

35,000
－
－

－
3,500

Challenging targets• We will work on boosting sales
and profit through M&A strategies
which are considered separately－(*) 3-year changes exclude impacts of the separation of leafnet Co., Ltd. and Trackimo GPS Co., Ltd.

20

Plan by business segment◼
◼

◼

・Increase revenue and profit by focusing on the mobility sector and reviewing low-profitability sectors
・Maintain around 50% of the Group’s net sales as the backbone of the Group’s performance
Product/Device Business: ・Maintain and expand a strong customer base to increase sales, take in hardware-related services,and shift the increased cost to sales, thereby significantly improving gross profit margin from FY9/2023
Engineering Business:

ICT Solutions Business:

・Proactively invest management resources as a growth driver that leads the Group for a 36% increase in
net sales and a 95% increase in gross profit margin from FY9/2023

Net sales

Gross profit

Gross profit margin

vs.
vs.
vs.
FY9/2024 FY9/2026 FY9/2023 FY9/2024 FY9/2026 FY9/2023 FY9/2024 FY9/2026 FY9/2023(*)(Millions of yen)

(*)

(*)

Engineering

13,80014,870

2,117

3,240

3,760

729

23.5%

25.3%

1.5p

Product/device

10,21012,250

1,435

2,370

2,940

1,015

23.2%

24.0%

6.2p

ICT solutions

2,290

3,380

896

810

1,230

599

35.4%

36.4%

11.0p

Consolidated

26,30030,500

4,539

6,420

7,930

2,340

24.4%

26.0%

4.5p

(*) Comparison with FY9/2023 excludes impacts of the separation of leafnet Co., Ltd. and Trackimo GPS Co., Ltd.

21

Growth investment and shareholder returns◼

Effectively use the cash generated by enhanced competitiveness and cost management (operating cash flow of 5.0 billion yen in 3-year
cumulative total <Note>)<Note> 7.0 billion yen of funding in total with expense-based growth investments (human capital, R&D)
⇒ Ensuring balance between growth investment and shareholder returns

3-year investment (billions of yen)
Human capital investment

M&A investment

0.5・Increase in the number ofengineers
・Education for learning
new technologies

・Expansion of service line-ups

・Productivity enhancement
training

・Securing engineering resources

・Enhancement of engagement

・Expansion of customer base

2.5

1.5
R&D investment
・Elemental technology research・Applied technology research・Adding high value to existingproducts

Flexible allocation based on the progressof strategies and business performance

Growth investment

Shareholder returns
Dividends• Maintaining continuous dividend increase• Planning +2 yen for FY9/2024 (+1 yen for
the interim, +1 yen for the year-end)→ Payout ratio is expected to exceed 40%

Purchase of treasury shares• Planning to continue purchasing for a certain amounteach year• Planning 0.2 billion yen for FY9/2024

Maintaining a total payout ratio of at least 50%⇒ Planning at least 60% for FY9/2024

22

5. Sustainability

Sustainability management

Courseof conduct

Corporate ethos

Basic policy forsustainability

We pursue the happiness of all of our employees and contribute to the developmentof society through the improvement of customer satisfaction
1. Achieving stable business growth
2. Providing solutions tailored to users
3. Aiming to become a company supported by users
4. Positively (P) change (C) and innovate (I)5. Striving to be a company that satisfies all stakeholders

Materiality(key perspectives)(1) Achieving a secure, safe and prosperous society through the pursuit of efforts to positively change and innovate

Business aspect (technology)(2) Providing truly beneficial solutions to our customers

Business aspect (customers)(3) Contributing to the creation of a sustainable global environment

Environment (E)(4) Developing human resources who find joy in the development of society, business growth, and self-realization

Society (S) and human capital(5) Fostering a corporate culture that values diversity, fairness, and inclusion

Society (S) and the entire society(6) Pursuing fair and just corporate activities that can fulfill accountability

Governance (G)24

Human capital management, human resources strategy
Human resources strategy

The kind of human resources we seek
• Integrated technology consultant(capable of creating innovation fromthe perspective of digital transformation)(2) Construction and operation of a dynamic humanresources portfolio

Current
condition• Relationship manager(3) Adaptation to corporate culture

Human resources materiality

GAP(1) Human resources strategy fully engaged withmanagement strategy

Approaches

KPI (note)
The number of personnel and growth rate by typeof human resources

Leveraging of human resources by
reskilling

Promotion of protean careers

The number of reskilled personnel, cost and timeof training per personnel

Cross-group development of humanresources

Group-wide education and training system D

Degree of satisfaction with education and training,
cost and time of training per personnel

Communication within the Group

Dialogue, personnel exchanges, career path setting

The number of exchange meetings held, the numberof personnel exchanges

A corporate culture that encourages
challenges

Challenging target setting, engagement

Percentage of challenging target-setting

Development of executives

Advanced succession planning

Increase in the number of next-generation candidates

Digital transformation, HR tech

Quantification of human resources
・Criteria (knowledge, skills, mindset)
・Types (value × rarity)

Engagement scores

Visualization of human resources portfolio

Support(Note) Including items under review

25

Contribution to the creation of a sustainable global environment◼

Long-term and sustainable activities beyond the timeline of the medium-term management plan are needed◼

According to the endorsement statement to TCFD (FY9/2023), continue activities in line with the recommendations and disclose theresults regularly

Now
2023

2030

2035

Government
target2050
Zero greenhouse gas emissions

Achievement of carbon neutrality (including Scope 3)
Our target

60% reduction for Scope 1+2 (vs. base year (note))(Note) Base year:
FY9/2017 for PCI Holdings and PCI Solutions, FY9/2021 for SORD

46% reduction for Scope 1+2

Current
conditions(FY9/2023)• Expected to reduce around 8% vs. base year (note)• Steadily reducing emissions through measures such as relocating to
offices that use renewable energy and replacing facilities with energyefficient ones
• Carbon offsetting and other measures are needed to achieve the final
target, and the Group is considering the most appropriate method(non-fossil certificate, carbon credit, carbon tax, etc.)(1) Continue with the measures implemented to dateand strengthen efforts toward achieving the FY2030
target(2) For the Product/Device Business, embody andimplement the Scope 3 reduction target(3) Maintain at least a “B” level for the CDP rating

26

Precautions
No information in this material is intended as a solicitation to buy or sell our stock.
The forecasts and other forward-looking statements contained in this material are based on theinformation available to us at the time the material was prepared and involve potential risks anduncertainties.
Therefore, please be aware that, due to various factors, actual results may differ materially from thoseprojected in the forward-looking statements. In the event that you suffer any loss or damage based on
this information, neither our Company nor the information providers shall be liable for any loss ordamage.

Contact information
Group Strategy and IR Section, PCI Holdings,INC. (Hiroyuki Kogure)E-mail : ir@pci-h.co.jp / TEL : +81-3-6858-0536
Office Hours: 9:00 - 17:00 (except Saturdays, Sundays and national holidays)

27

Positively, Change, Innovate