Financial Results Presentation for the Second
Quarter of the Fiscal Year Ending March 2023
(47th Business Year)

November 11, 2022

Focus Systems Corporation(Securities Code: 4662)© 2022 Focus Systems Corporation

Table of Contents

Financial Results for the Second Quarter of the Fiscal
Year Ending March 2023 (47th Business Year)

p.3

Projections for the Fiscal Year Ending March2023 (47th Business Year)

p.13

Supplementary Information: Current Topics

p.16

Supplementary Information: Company Outline

p.19© 2022 Focus Systems Corporation

2

Financial Results for the Second Quarter of the
Fiscal Year Ending March 2023 (47th Business Year)© 2022 Focus Systems Corporation

3

Overview

Net sales and income both reached record highs in the first half of the fiscal year
(Unit: Million yen)

FY2022Year-on-yearchangeFY2023

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

Ratio

Net sales

6,031

12,48919,25526,278

6,943

14,238

1,749

14.0%

Operatingincome

302

821

1,367

1,640

489

1,103

282

34.4%

Ordinary
income

306

770

1,322

1,600

523

1,165

394

51.3%

204

522

889

1,066

354

797

275

52.8%

Current quarter

Net
income© 2022 Focus Systems Corporation

4

Progress on main indicators

All indicators are exceeding 50%
against the plan for fiscal year

(Unit: Million yen)

Net sales❙ We made good progress in the second quarter, expanding
trade with existing customers and cultivating new customers.
❙ Compared to previous years, large-scale projects in thedevelopmental phase were concentrated in the first half of the
fiscal year.

Plan for Fiscal Year

7,295

1,800

Plan for Fiscal Year

Ordinary income
Plan for Fiscal Year

1,103

614

642

Progress rate
489

Q1

523

Q2 Total

Q1© 2022 Focus Systems Corporation

51.8%

6,943

Q2

Q2

Q2 Total

Current net income
Plan for Fiscal Year

1,165

443

Progress rate

61.3%
Q2

1,820

14,238Progress rate

Q1

Operating income

27,5001,220

797Progress rate

64.0%

354

Q2 Total

Q1

65.4%
Q2

Q2 Total

5

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-performing existing projects are driving the segment as a whole,alongside an increase in new projects that are also off to a good start.
(Unit: Million yen)

Net sales

5,000
4,000

Year-on-yearchange14.0％(Unit: Million yen)

4,141

Segment income

3,632

600

3,000
2,000

1,000

720

800

Year-on-yearchange

400

23.8％

200

582

0

0
FY2022 Q2FY2023 Q2

FY2022 Q2FY2023 Q2❙ Following on from the later part of the first half-year, medical projects in the public sector
greatly boosted sales and profits.

❙ The expansion and strengthening of the stable earnings base through large-scale social
insurance projects and others, contributed to the segment's performance.
© 2022 Focus Systems Corporation

6

Segment Overview (2)Enterprise business

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

Actively acquired primary contract projects for the ERP business, such as
intra-mart, Biz∫, and SAP, leading to significant growth(Unit: Million yen)

Net sales(Unit: Million yen)

3,722

4,000

3,083

Segment income

3,000Year-on-yearchange2,000

Year-on-yearchange

20.7％

1,000

51.9％

0

600

400

524
345

200

0
FY2022 Q2 FY2023 Q2

FY2022 Q2FY2023 Q2❙ We actively acquired primary contract projects not only from the private sector, but also
from local governments.
❙ We succeeded in optimizing personnel management and increasing unit price in the
projects, thereby increasing profits.
© 2022 Focus Systems Corporation

7

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

Maintained the trend of growth by acquiring low-code development
projects, which we have been strategically advancing(Unit: Million yen)

(Unit: Million yen)

Net sales

3,000
2,500

Year-on-yearchange

7.0％

2,364

2,530

Segment income

400
300

2,000

Year-on-yearchange

200

1,500

3.0％

100

297

306

FY2022 Q2FY2023 Q201,000
FY2022 Q2 FY2023 Q2❙ Costs increased due to the impact of delays in the progress of large-scale projects.
❙ The additional costs were covered by the favorable performance of low-code development
projects, as well as the portfolio we have built up across a wide range of technological areas.
© 2022 Focus Systems Corporation

8

Segment Overview (4)Mainly infrastructure design/construction, mainframe construction, system development,
related operation/maintenance, in-house product manufacturing, provision of IoT solutions

Innovation

The segment performed well overall, with expansion in both the areas ofsystem development and infrastructure design/construction.
(Unit: Million yen)

Net sales

4,000

3,409

3,844

(Unit: Million yen)Segment income

12.8％

438

457

FY2022 Q2FY2023 Q2

400

3,000
Year-on-yearchange500

Year-on-yearchange

2,000

4.5％

1,000

300
200
100
0

0
FY2022 Q2 FY2023 Q2❙ The large-scale public development projects that we are working on jointly with IBM Japan
expanded smoothly and contributed to sales.
(Increase in the cost of building a secure development environment)❙ Infrastructure design/construction also continued with its strong performance from the first halfof the fiscal year.
© 2022 Focus Systems Corporation

9

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

Second Quarter of theCurrent Fiscal Year

Current assets

10,86911,468Non-current assets

12,503

8,119

Property, plant, and equipment

3,510

3,516

155

163

8,836

4,439

23,372

19,587

Current liabilities

5,277

5,559

Non-current liabilities

3,330

1,976

8,608

7,536

Main reasons for increase:• Increase in short-term borrowings 320 million yen• Increase in provision for bonuses 216 million yen

Shareholders’ equity

9,869

10,349Main reason for decrease:• Decrease in deferred tax liabilities 1,408 million yen

Capital

2,905

2,905

Capital surplus

2,158

2,167

Retained earnings

5,156

5,622

Decrease of 3,785 million yen year-on-year

Treasury shares

(350)

(346)

Valuation difference on
available-for-sale securities

4,894

1,701

Main reason for decrease:• Decrease in valuation difference on available-for-salesecurities 3,193 million yen

Total net assets

14,764

12,051

Total liabilities and net assets

23,372

19,587

AssetsIntangible assets
Investments and other assets
Total assets
Liabilities

Total liabilities

Main reasons for increase:• Increase in cash and deposits 906 million yen• Increase in work-in-progress 20 million yen
Main reason for decrease:• Decrease in accounts receivable and contract assets
301 million yen• Decrease in investment securities 4,601 million yen

Decrease of 1,071 million yen year-on-year

Net assets© 2022 Focus Systems Corporation

Decrease of 3,785 million yen year-on-year

10Net income increase/decrease analysis(Unit: Million yen)

• Increase in selling, generaland administrative expenses+340

Increase ingross margin(57)
Increase in
selling, generalandadministrative
expenses• Increase in interest anddividends income received

+112

+8

Changes in nonoperating income /expenditure

Increase in
extraordinary
income(128)

Increase inincome taxes,
etc.

Increasedby 275522

797

Previous second
quarter net income

Current second
quarter net income© 2022 Focus Systems Corporation

11

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

• Increase in net income• Increase in contract
liabilities+1,084(297)• Guarantee deposits• Acquisition of property, plant andequipment• Proceeds from long-term borrowings• Net increase in short-termborrowings+117
Increasedby 904

4,352
Cash and cash
equivalents at the
beginning of theperiod© 2022 Focus Systems Corporation

5,256
Sales
C/F

Investment
C/F

Financial
C/F

Cash and cash
equivalents at theend of the second
quarter
12

Projections for the Fiscal Year Ending March 2023
(47th Business Year)© 2022 Focus Systems Corporation

13

Projections — Fiscal Year Ending March 2023 (47th Business Year)❙ Projections remain as they stand in view of factors such as the greater emphasis on the first halfof the current fiscal year and plans to relocate some offices.
❙ For the current fiscal year, an interim dividend was paid. The annual dividend per share is
expected to be 30.00 yen.
FY2022 results

FY2023 projections

Year-on-yearchange(million yen)(million yen)

Net sales

26,27827,500

4.6

Operating income

1,640

1,800

9.7

Ordinary income

1,600

1,820

13.7

Net income

1,066

1,220

14.4

FY2022 results(％)

FY2023 projections
70.76

80.86

Dividend per share (yen)27.00(Breakdown) Interim dividend 5.00
Ordinary dividend 20.00
Commemorative dividend 2.00

30.00
(Breakdown) Interim dividend
5.00
Year-end dividend 25.00

Dividend payout ratio (%)

38.2

37.1

Net income per share (yen)© 2022 Focus Systems Corporation

14

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

This document is based on information available as of November 11, 2022, 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.

© 2022 Focus Systems Corporation15

Supplementary Information: Current Topics© 2022 Focus Systems Corporation

16

Topics (1)Products &Services

Eight-Japan Engineering Consultants Inc. adopts multiple SAP solutions

Products &Services

Training Associate Agreement with UiPath— Developing the market for companies with sales of less than 500 billion yen —Products &Services

Developing the DX Market for SMEs in the trade industry— Focus Systems and TradeWaltz collaborate to integrate Beyond TheBook and TradeWaltz —— Focus Systems heads system construction of "RISE with SAP S/4HANA Cloud" —Our products

Products &Services

Focus Systems receives Biz∫AWARD 2022 Special Award for accepting
consecutive prime project orders

Products &Services

IoT positioning technology used in Shiga Prefectural Project to Promote Local Useof Emerging Technologies— Delivering more Omi Beef to dining tables —Our products

Products &Services© 2022 Focus Systems Corporation

Focus Systems wins intra-mart Special Project Award 2022 for its achievements inprojects delivered to government agencies and educational institutions
17

Topics (2)"Initiatives for the Future"
Showcasing our efforts to engage with broader fields through technology on our website
Medicaltreatment

Joint research with the Gynecology and Obstetrics Department of the Graduate School of
Medicine, Kyoto University

Femtech app to promote improvement in symptoms throughself-care
A smartphone app that aids in evaluating the condition toward symptom improvement, byrecording the symptoms of PMS/PMDD, which are conditions that affect only women.

Medicaltreatment

Joint research with the Radiation Department of Yokohama City University Hospital and theFaculty of Global Management of Chuo University

Eye-tracking measurements in CT scans
A system that supports the efficient detection of incidental findings, toward
improving patients' prognosis and quality of life.

Agriculture
Our products

Joint research with the University of Shiga Prefecture, Shiga Prefectural Livestock Technology
Promotion Center, and tiwaki Co., Ltd.

Laborsaving in calf production through IoT devices© 2022 Focus Systems Corporation

Realizing the early detection of diseases and injuries in calves, and contributing
to the promotion of digital transformation and laborsaving in the livestockindustry, through the introduction of IoT products
18Supplementary Information: Company Outline© 2022 Focus Systems Corporation

19

Corporate Data
Line of business

Software development and provision of IT services
Security product development, sales, and service provision

Head office

2-7-8 Higashi Gotanda, Focus Gotanda Bldg., Shinagawa-ku, Tokyo

Business offices

Tokyo, Osaka, Nagoya

Capital

2.9 billion yen

Exchange listings

Tokyo Stock Exchange Prime Market (Securities Code: 4662)

Employees

1,265 (as of March 31, 2022)

1977

Focus Systems Corporation established for the purpose of software development

1978

Starts doing business with Oki Electric Industry Co., Ltd., and initiates softwaredevelopment work on electronic switchboards

1988

Starts doing business with Nippon Telegraph and Telephone Corporation (now NTT DATA
Corporation) and begins providing services for the development of systems forgovernment and other public agencies

1996

OTC share registration with the Japan Securities Dealers Association

1997

Commences business with IBM Japan, Ltd. and begins system operation/maintenanceand infrastructure technology support business

1999

Starts information security business

2004

Starts selling products for digital forensics, a new field of information security

2015

Listing changed to Tokyo Stock Exchange, Second Section

2016

Listing designation changed to Tokyo Stock Exchange, First Section

2022

Listing on Tokyo Stock Exchange Prime Market© 2022 Focus Systems Corporation

20

Business Fields

Focus Systems support society and people’s lives.
Cloud

Trading Distribution Systems

Airport and Traffic
Control Systems

Heaith Insurance
Systems
Business Applications
Electronic
Administration Systems

Communication
Control Systems

Pick
UP

EmbeddedTax and Finance
Systems

Automobile
Registration Systems© 2022 Focus Systems Corporation

Medical OfficeWork Systems

Care Welfare Systems
Cyber Security

21Four Business Segments

01

Public sector

Social infrastructure,
etc.

03

Wide-ranging
solutions

Communication
control, embedded
systems, AI solutions,
etc.

02

Enterprisebusiness

Enterprise resource
planning (ERP), cloud,
web applications, etc.

04

Innovation

Infrastructure, IoT,
information security, etc.
22

The Company’s Position in the System Integration Industry (1)❙ Focus Systems is an independent system integrator (SI).
❙ We possess consulting service capabilities required in the upstream processes as well as
technological capabilities required in the downstream processes.

Primary
contracts
Primary andsecondarycontracts© 2022 Focus Systems Corporation

Secondarycontracts

Tertiary
contracts

23

The Company’s Position in the System Integration Industry (2)Independent system
integrator

OutlineManagement and capital
independence

Wide-ranging and freebusiness fields

Strengths

Cultivating our own
assetsSystem integrator whose parent System integrator whose
company does not manufacture
parent company
computers
manufactures computers
Subsidiary company that develops
information systems
Former systems department of a
trading/finance company

Utilization of the parent company's
know-howStable business foundation

Computer company
Hardware company

Utilization of the parent
company's hardware
Solution proposals
Stable business foundation

All self-supporting
management

Weaknesses

Development of customers & BPs

Limited areas of expertise

Accumulation of intellectual
property

Narrow business domains

Constrained by the parent
company

Strengthening of managementbase & finance© 2022 Focus Systems Corporation24

Transaction Flow

Customers (government agencies, local governments, private sector companies)
New business start-up

Major SI firms

Development

Selection and mastery of
new technologies
Profit margin improvements
through direct contracting

Long-term, robust
cooperative frameworks

Stablebase

Business partners© 2022 Focus Systems Corporation25

Changes in the Number of Employees & Turnover Rate
❙ Strengthened measures to increase awareness of the Company's draws, including improved
information disclosure to both new graduates and mid-career job seekers❙ Reduction of post-employment placement mismatches has led to a steady decline in turnover(%)(Number of persons)

1,400

Turnover
rate

20

1,300

5.4％

18
16

1,200

14

1,100

12
1,000
10
900
8
800

6

700

4

600

2

500

0
2010

2011

2012

2013

Number of employees

2014

2015

2016

Company turnover

2017

2018

2019

2020

2021

Industry-wide turnover*The industry turnover rate is extracted from the "Survey on Employment Trends" (Ministry of Health, Labour and Welfare).
*Our turnover rate is based on the fiscal year, while the industry turnover rate is based on the calendar year.
© 2022 Focus Systems Corporation

26

Health Management
We were selected by the Ministry of Economy, Trade and Industry and the Japan HealthCouncil as a company with good health management in their "Corporations with Exceeding
Health Management 2022 (large-scale corporate division)" certificate.

Support for club activities ･･･ We support employees' participation in club activities in order to promote theirhealth. Currently, about 150 employees are enrolled in 9 types of club activities.

Health maintenance seminars ･･･ We conduct theme-based seminars on how to stay physically and mentally
healthy, including seminars on improving dietary habits, preventing stiffshoulders and backaches, mindfulness training, and yoga and healing
seminars, among others.
Efforts to promote the understandingof the health risks of smoking
and measures to improve mental
health have also been undertaken.

© 2022 Focus Systems Corporation

27

Work Style Reform (1)Work-Life Balance
Systems for･･･ Systems for helping employees balance work duties with childcare or eldercare.
shortened working Employees can choose shortened working days (3 days a week) or reduced working
days or reduced
hours (choice of 5 hours or 6 hours per day).
working hours*Employees are eligible for the systems until their children reach the third grade inelementary school or until they are no longer required to do nursing care.
*A combination of these systems and the flextime system is also possible.
Kurumin (child-rearing
support) certified

Percentage of employees who use
shortened working days/reduced
working hours after childcare leave

Percentage of employees
who return to work afterchildcare leave

66.6％
33% (including
men)

100％
* As of March 31, 2022･･･ Re-employment is possible within 10 years of resignation due"Job Return" system
to a life event (marriage, childbirth, or child-rearing) or for(re-employment system)
career advancement (overseas study or change of employer).
Flextime system© 2022 Focus Systems Corporation･･･ This system helps employees work basedon their lifestyles.
100％
28

Work Style Reform (2)Diversity
Occupational field creation ･･･ In 2015, we began producing vegetables through hydroponics, aiming at
creating new fields of employment for persons with disabilities.
We have now established farms in Chiba and Ibaraki Prefectures, providing
employment to persons with disabilities who wish to engage in agricultural
work.

Information exchange for female employees ･･･ This initiative provides career planning support for young
women by communicating work styles and the like.
Eruboshi (Female employee career promotion)
We are certified as an "Eruboshi" company for being an
outstanding company based on the Act on Promotion of
Women's Participation and Advancement in the Workplace.
© 2022 Focus Systems Corporation

29

Changes in Responses to the Employment Rate System for
Persons with Disabilities❙ We created new fields of agricultural and office work, and improved work environments so thata large number of persons with disabilities could find sustained work.
❙ We provided employees with internal training programs that help deepen their understanding ofworking with persons with disabilities, and strengthened systems that embrace them.
(Number of persons)(Number counted based on rules)

1,400
1,300
1,200

Meets thelegallyrequirednumber35

Above thelegallyrequirednumber

30

1,100
25
1,000
900
20
800
700

15

600
500

10
'18/3
Number of employees© 2022 Focus Systems Corporation

'19/3

'20/3

Legally required number based on rules

'21/3

'22/3

Actual number based on rules

30Company Mascot
Mascot Character"Fukue-san"In order to draw people closer to Focus Systems and the worldof information systems, we use Fukue-san to send out
information about our business, employees and the future.

© 2022 Focus Systems Corporation31