Financial Results Presentation for the Second
Quarter of the Fiscal Year Ending March 2024
（ FY2024,Q2｜48th Business Year）

November 21, 2023

Focus Systems Corporation(Securities Code: 4662)© Focus Systems Corporation

Table of Contents

Summarized Results for the Six Months
Ended September 30, 2023

P.３〜

Segment Overview

P.５〜

Financial Position

P.９〜

Measures to Ensure Achievement of FullYear Plan / Earnings and Dividend Forecast

P.12〜© Focus Systems Corporation2

Summarized Results ①

Achieved record high sales, but profit for the six months declined at all levels
year on year(Unit: Million yen)

（単位：百万円）

FY2023Year-on-yearchangeFY2024

Entire
Q1
Q2
Q3
Q1
Q2
financial
Amountyear
Results Results Results
Results Results
Results

Ratio

Net sales

6,943

14,23821,41529,124

7,310

15,166

Operatingincome

489

1,103

1,585

1,894

236651▲452 ▲41.0%

Ordinary
income

523

1,165

1,654

1,911

217644▲520 ▲44.7%

354797

1,126

1,390

148439▲358 ▲44.9%

Current quarter

Net income© Focus Systems Corporation

927

6.5%

3

Summarized Results ② Progress on main indicators

Year-to-date performance vs. Annual Plan wasweak (Net Sales >50%; Profit at all levels >30%)

Net sales
通期計画

In Q2, succeeded in reducing year-on-year profit decline from Q1,but still requiring major effort
Major Factors
・Unprofitable contract that surfaced in Q1
・Year-on-year profit decline was magnified due to profit inprevious fiscal year being heavily weighted to first six months

Operating income
通期計画

415

2,000

Ordinary income
通期計画

651

427

Progress rate
236

Q1

Q2

© Focus Systems Corporation

2,020

7,856

217

Q2 Total

Q1

Q230,100

15,166
Progress rate

50.4%

7,310

Q1Q2

Q2 Total

Current net income
通期計画

644

291

Progress rate

32.6%

(Unit: Million yen)

1,450

439
Progress rate

31.9%

148

Q2 Total

Q1

30.3%
Q2

Q2 Total

4Segment Overview ①

Public sector

From the design and manufacture of social infrastructure-related systems, whose end users aremainly government offices and local governments, through to post-system operation management
and maintenanceStrong execution of new and existing businesses across the entire segment,
driving both Company net sales and profit(Unit: Million yen)

Net sales

5,000(Unit: Million yen)

4,1414,567

Segment income

800

4,000
Year-on-yearchange

10.3％

1,000

Year-on-yearchange

3,000
2,000

14.2％

1,000

720

823

600
400
200
00
FY2023 Q2

FY2024 Q2

FY2023 Q2

FY2024 Q2❙Robust performance from existing projects (projects related to automobiles, Individual Number (MyNumber), and the central governmental agencies' move to cashless payment)❙Profit opportunities generating from NTT DOCOMO-related and other new projects© Focus Systems Corporation5

Segment Overview ②Enterprise business

Mainly corporate company core business systems/online system development,
network/infrastructure design/construction, RPA solutions, related operation/maintenance,and ICT consulting

Robust net sales, but fell short of matching strong profit performance incorresponding six months of previous fiscal year
(Unit: Million yen)

Net sales

5,000
4,000

Year-on-yearchange

12.1％

3,722

(Unit: Million yen)

4,171

Segment income

2,000

19.2％

1,0000524
423

Year-on-yearchange3,000

600

4002000
FY2023 Q2 FY2024 Q2

FY2023 Q2

FY2024 Q2❙Strong performance of Infrastructure business driving improvement of profit levels❙Increased prime contractor projects in ERP business, but fell short of matching strong
project margin ratio that drove profit in corresponding six months of previous fiscal year
© Focus Systems Corporation

6

Segment Overview ③

Wide-ranging solutions

Communication control system development, embedded system development, systemdevelopment for private companies and government agencies, AI solutions, related
operation/maintenance, and ICT consulting, mainly in the Tokyo, Nagoya, and Osaka
areas

Despite increased net sales, profit fell significantly owing to increased labor,
outsourcing and other expenses associated with the unprofitable contract(Unit: Million yen)

(Unit: Million yen)

Net sales

5,000Segment income

4,000Year-on-yearchange6.5％

3,000600
400

2,530

2,694

2,000
1,0000
FY2023 Q2 FY2024 Q2

Year-on-yearchange200

141.9％

0-200306▲128FY2023 Q2FY2024 Q2❙Project costs revised based on monitored actual costs. Services to be launchedwithin current fiscal year.
❙Other businesses within the segment including low-code development projects continuing to boost© Focus Systems Corporation7Segment Overview ④

Innovation

Mainly infrastructure design/construction, mainframe construction, system development,
related operation/maintenance, in-house product manufacturing, provision of IoT solutions

Achieved year-on-year profit improvement despite the effects of the strong
profit performance in corresponding six months of previous fiscal year
(Unit: Million yen)

(Unit: Million yen)

Net sales

5,000
4,000

Year-on-yearchange

2.9％

3,844

Segment income

600

3,732
Year-on-yearchange

3,000
2,000

4.2％

1,000

457

477

FY2023 Q2

FY2024 Q2

400

20000
FY2023 Q2 FY2024 Q2❙Infrastructure business continued its strong performance from Q1.
❙Steady performance of mainframe systems business and growth of integrated businessplatform business were the driving forces of the increased profit.

© Focus Systems Corporation8

Financial Position ①

Balance Sheets (B/S)(Unit: Million yen)Previous
Fiscal Year

Second Quarter of theCurrent Fiscal Year

Decrease of 543 million yen year-on-year

AssetsMain reasons for increase:• Increase in cash and deposits 71 million yen• Increase in work-in-progress 90 million yen

Current assets

11,875

11,939Non-current assets

8,541

7,934

Property, plant, and equipment

3,649

3,614

159

138

4,731

4,180

20,417

19,873Current liabilities

5,841

5,816

Non-current liabilities

1,761

1,636

7,603

7,452

Main reasons for increase:• Increase in short-term borrowings 179 million yen• Increase in provision for bonuses 257 million yen

Shareholders’ equity

10,867

10,867Main reason for decrease:• Decrease in accounts payable 448 million yen

Capital

2,905

2,905

Capital surplus

2,167

2,177

Retained earnings

6,140

6,126

Decrease of 393 million yen year-on-year

Treasury shares

△346

△342

Valuation difference on
available-for-sale securities

1,9461,552

Main reason for decrease:• Decrease in valuation difference on available-for-salesecurities 393 million yen

Total net assets

12,814

12,420Total liabilities and net assets

20,417

19,873

Intangible assets
Investments and other assets
Total assets
Liabilities

Total liabilities
Net assets© Focus Systems Corporation

Main reason for decrease:• Decrease in investment securities 571 million yen

Decrease of 150 million yen year-on-year

9Financial Position ②

Net income increase/decrease analysis(Unit: Million yen)
Increase in labor andoutsourcing expenses

Decrease of subsidy income
Provision of allowance for
doubtful accounts▲407797358+182▲44
Decrease ingross margin

Increase in selling,
general andadministrative
expenses▲20
Decrease in nonoperating income
Increase in nonoperating expenses

Previous second
quarter net income© Focus Systems Corporation439▲68
Decrease in
extraordinary
profits

Decrease incorporate taxes, etc.

Current second
quarter net income
10Financial Position ③

Cash Flow (C/F)(Unit: Million yen)

Decrease in trade payables
Decrease in accounts payable other
Increase in provision for loss on
construction contracts+250

Refund of guarantee deposits
Acquisition of property, plantand equipment
Purchase of shares ofsubsidiaries and associates▲53

Proceeds from long-term borrowings
Dividends paid
Repayments of long-term borrowings
Redemption of bonds

▲118

5,364

5,285

Cash and cash
equivalents at the
beginning of theperiod© Focus Systems Corporation

Sales
C/F

Investment
C/F

Financial
C/F

79

Cash and cash
equivalents at theend of the second
quarter11

Measures to Ensure Achievement of Full Year Plan /Earnings and Dividend Forecast ① Measures

Unprofitable contract• Prevent incurring additional costs through quality control andstrict adherence to delivery dates

Company overall measures• Prioritize projects with lower risk and higher margins• Postpone some training and other events to concentrate on
profit acquisition• Ensure stable operation and management of other existing
projects© Focus Systems Corporation

12

Measures to Ensure Achievement of Full Year Plan /Earnings and Dividend Forecast ➁ Earnings and Dividend Forecast❙We are maintaining our earnings forecast as businesses other than the unprofitable contract areperforming well. Interim dividend will be paid as planned.
❙Annual dividend per share is expected to be 38.00 yen (interim dividend 6.00 yen + year-end
dividend 32.00 yen).
FY2023 results

FY2024 projections(million yen)(million yen)

Year-on-yearchange(％)

Net sales

29,12430,100

3.4

Operating income

1,894

2,000

5.5

Ordinary income

1,911

2,020

5.7

Net income

1,390

1,450

4.3

FY2023 results

FY2024 projections

Net income per share (yen)

92.18

96.01

Dividend per share (yen)

35.00
5.00
30.00

38.00
6.00
32.00

(Breakdown) Interim dividend
Year-end dividend

Dividend payout ratio (%)© Focus Systems Corporation

38.0(Breakdown) Interim dividend
Year-end dividend

39.6
13

Focus Systems sincerely requests
the continued guidance andsupport of all stakeholders.

In this presentation, numbers are rounded down to the nearest whole number, and percentage
figures rounded up or down to two decimal places.
This document is based on information available as of November 21, 2023, and on assumptions
as of the same date concerning uncertain factors affecting future financial results.
Actual financial results may materially differ from projections due to various factors in the future.
Consequently, Focus Systems Corporation does not guarantee any certainty.
© Focus Systems Corporation14