LAC Co., Ltd.

Mid-termmanagement plan
（FY2024-2026）
May 13, 2024

© 2022 LAC Co.,

Looking back on the previous mid-term
management planDifferences from previous mid-term management plan target values
The results fell short of targets mainly due to delays in creating growthinvestments, including business opportunities and M&A, and improving
productivity, despite growing from the time of making the plan
（Billion yen）

Difference

FY2023
Subjects

Net Sales

OperatingincomeROE

Mid-term management
plan goals

FY2020

43.6
Security business 18.6
SI business 25.0

55.0
Security business 25.5
SI business 29.5

2.1

3.0

2.6%

10% above
3FY2023

In comparison
with FY2020

49.4
Security business 22.1
SI business 27.3

2.1
9.1%

In comparison
with Targets+5.7-5.5(+13.2%)

Achievement rate

+0.0-0.8(+2.7%)

Achievement rate

+6.5pt-0.9pt

90.0%

72.5%

© 2024 LAC Co., Ltd.

Progress status of previous mid-term management plan
Main achievements
Endurance⚫ High-added-value services and recurring projects were expanded, centeredon individual monitoring services based on the recognition level of securitymeasuresAdaptability⚫ Automation × know-how-based diagnostic services were expanded⚫ AI-based financial crime preventive solutions were rolled out

Leveraging
digitalcapabilities⚫ The internal IT environment × Zero Trust based on a telework system wereadvanced⚫ Generative AI was internally developed and utilized. Services were rolled out
to offer support in adoption, diagnosis, etc. to other companies
Recognition of issues

The roll-out of services through digitalized business know-how by the Security
Business has a long way to go
The advancement of management DX was delayed considerably partly due tothe termination of in-house development of a backbone core system4© 2024 LAC Co., Ltd.

New mid-term management planAwareness of the business environment surrounding LAC
IT Environment

Issues in society (customers)

Digital utilization is more diverse, extensive, anddeeper

Pursuit of cost-effectiveness that justifies digital utilization

Higher efficiency of measures through AI and
automation
Easy-to-understand and affordable
countermeasures

Connection between systems spreads widely and interdependency ismore complex and deepened
Cybersecurity is essential everywhere

Cybersecurity is a key industry for a digital society
Significant lack of security personnel

Response to complicating and sophisticating threats

From points (case-by-case measures) to lines andplanes (comprehensive measures)Requests for advanced financial crime preventivemeasures

Cyber threats become more serious

Ensuring resilience throughout supply chains

Business shutdown is a real threat, and financial crime too is
growing rapidly
Malicious use of AI and other advanced technologies (including fakeworks, etc.) becomes noticeable

Security measures for middle-scale and small andmidsize companies
Security measures in overseas bases
Consideration of and measures against business
shutdown

It is essential to use technology better than attackers do

Ensure the continuity of security measures

Demands from a national security perspective also
mount

Formulation and continuous operation ofinvestment strategy for digital security

The perspective of national security that protests freedom anddemocracy in cyber space becomes essential in order to run
business and live in an IT environment that has become social
infrastructure

Ensure economic security

Supply chain measures for critical infrastructure
providers
Security vendor that can compete on theinternational stage

Cybersecurity becomes the key to national security
6© 2024 LAC Co., Ltd.

Requests to LAC concerning Social Issues
Equipped with knowledge (intelligence) based on about 30 years of experience in the field

As a group with expertise in cybersecurity measures
Response leveraging automation
and AI

Response with comprehensive
service capabilities

Digitize people’s know-how by utilizing
AI and offer sophisticated and costeffective services

Provide one-stop and optimal services against
cyber threats that become more complex andsophisticated than ever before

Provide services that connect to measures for
middle-scale and small and midsize companies

Further enhance the added value of Security business and SI business andadvance new value creation from a medium- to long-term perspective

7© 2024 LAC Co., Ltd.

Towards mid- to long-term value creation
Set mid-term management plan targets with the continuous growth of existing
businesses at the center and aim at higher growth through taking medium- tolong-term measures
Steady progress in new value creation(Discontinuous growth in the added value and productivity of existing businesses)-Automation/AI utilization
Integrated security service platform
Expansion and reinforcement of security tools and services
Financial crime preventive measures
M&A, overseas expansion, etc.

Net sales

60.0

Net salesbillion yen

49.4
billion yen

Continuous growth of existing businesses- Security Business: Sales growth exceeding market growth based on services- SI Business: Sustainable unit price improvement through “skill shift” (use your skills
for a second job)

20172018

2019

2020

2021

2022

2023

2024
82025

2026medium-term
management plan2027

2028

2029

2030 (FY)© 2024 LAC Co., Ltd.

New mid-term management plan goals
Target net sales of 60 billion yen, operating income and ordinary income each of
4 billion yen and ROE of 15%
Aim to surpass the targets through implementing medium- and long-term measures
Continue the policy of shareholder return with DOE of 5% as the basic indicator（Billion yen）

Subjects

FY2023

FY2026
Mid-termmanagement
plan goals

Increase/decrease
Difference（百万円）

Change+21.3%

Net sales

49.4

60.0

+10.5

Operating income2.14.0+1.8（CAGR+22.5%）

Operating income ratio

4.4%

6.7%+2.3pt-

Ordinary income

2.1

4.0+1.8+87.6%（CAGR+23.3%）

9.1%

15.0%+5.9pt-

ROE

9（CAGR+6.6%）+83.9%

Shareholder Returns

Distribute profit by taking into
account investment and thestatus of cash flows from a
medium- to long-term
perspectiveDOE（Dividend-to-equity ratio）

Basic indicator 5％© 2024 LAC Co., Ltd.

New mid-term management plan Existing business - by segment
Security business (SSS business)

Net sales

Expand service business centered on operation monitoring⚫ Expand consulting projects by increasing recurring ones
⚫ Expand large-scale emergency response service projects by boosting
response capabilities⚫ Expand diagnostic service projects by optimizing the balance between
engineers and automation⚫ Expand comprehensive and all-encompassing operation monitoring
service projects from individual monitoring⚫ Expand large-scale projects of product sales through continuous
cooperation with product venders and consulting capabilities

Segment margin（Billion yen）

（Billion yen）

28.1

+27.1%

22.1

5.2

Consulting

3.8
3.0

3.6

Assessment

Service+32.4％9.0+59.7%

2.2

Monitoring

6.5

7.7
0.8

9.4

Product0.7

Maintenance

FY2023

FY2026FY2023

mid-termmanagement plan

Net sales⚫ Expand high-unit-price system development projects with the skill shift
to specific technology fields based on solutions⚫ Secure a certain number of hardware/software (HW/SW) andmaintenance projects in response to customer demand such as thereturn to on-premises⚫ Expand the continuation of subscription-type solutions that can be abase for specific technological fields
10FY2026

mid-termmanagement plan

SI business (SIS business)
Drive the skill shift to high-unit-price projects

3.6

Segment margin（Billion yen）

（Billion yen）

+16.6% 31.8

27.3
18.2

3.5

+35.9%
21.5

Development

3.9

HW/SW

3.8

Service+18.1％
2.9

IT maintenance

2.4

3.4

Solution

FY2023

FY2026

3.0

5.2

mid-termmanagement plan

FY2024FY2026
mid-termmanagement plan

© 2024 LAC Co., Ltd.

New mid-term management plan
Ordinary Income: Analysis of Factors for Change (YoY Comparison)
Ordinary income is expected to increase mainly due to the effects of higher sales and cost
reduction based on an office strategy although expenses are forecast to be pushed up byhigher SG&A expenses primarily resulting from strengthening a sales system（Billion yen）

Effect of higher sales

SG&A+3.3-1.9
Office strategy

Non-operating
items

+0.5

+0.1

4.0

2.1

Ordinary income +1.9
FY2026
Mid-termmanagement plan

FY2023(Note) Although expenses for the office strategy are included in SG&A expenses, they are presented individually in the graph.
11© 2024 LAC Co., Ltd.

Steady progress toward new value creation
Combine AI and engineering to enhance the added value and productivity ofsecurity services
Strive to create a security tool that can compete on the international stage

AI × Security

Integrated security
service platform

Sophistication of threat detection,
predictive analysis and response ×
productivity improvement by integrating AI
into various services

Enhancement of the added value ofservices × productivity improvement bybuilding a foundation that analyzes andutilizes data collected from each service in
a comprehensive manner

Security tools
Acquire tools that can compete on the international stage with an eye on
strategic cooperation with security tool venders
12© 2024 LAC Co., Ltd.

AI

Security
Sophisticate services and respond to rapidly expanding needs by replacing humanhandling with AI and automation
Respond to the needs of small and midsize companies through strengthening market
competitiveness, and new services with high cost-effectiveness
Service points (provided value)

DetectAI⚫ Advanced analysis of large volumes of accumulated
threat data

Intelligenceaccumulation⚫ Enhancement of productivity by replacing humanhandling with AI and automation

Automation

ResponseAnalysis

Excellent track records that secure superiority,
centered on large companies- Number of JSOC clients
Approx. 1,000 companies- Number of cases diagnosed
Cumulative total of approx. 27,500- Number of emergency cases responded toCumulative total of approx. 4,800⚫ Development of new analytical tools against
increasingly deceiving and evolving attacks⚫ Provision of services even covering small and midsize
companies by leading automation to development of
new services with high cost-effectiveness13© 2024 LAC Co., Ltd.

Integrated security service platform
Elevate from operational monitoring to cyber risk managementIntegrate the data analysis and utilization platforms of various security services
Service points (provided value)
Provides a cyber risk
management platform
Convert to intelligence
Operationalmonitoring
Emergency response
Automation

AI
compatibility

Automation
AI
compatibility

Consulting

Automation

AI
compatibility

Diagnosis
AI
Automation compatibility

Education
AI
Automation compatibility⚫ Integrate and visualize cyber risks that are fragmented
across networks, applications, terminals, etc.
⚫ Improve convenience by providing customers thathave already adopted diverse tools with an integratedplatform(Examples of tools: SASE, UEBA, CASB)⚫ Provide optimal measures to customers by leveraging
knowledge gained from integrated data platforms⚫ Plan to provide even to large-scale group companies

Integrated dataplatform

SASE: Secure Access Service Edge. UEBA: User and Entity Behavior Analytics
CASB:Cloud Access Security Broker

14© 2024 LAC Co., Ltd.

Security tools
Pursue the acquisition of new security tools, including alliances with othercompanies, by leveraging the knowledge (intelligence) gained from approximately
30 years of experience in the field
Example of promotion ofalliances
Operationalmonitoring

Diagnosis

AI and automation
× Threat Intelligence

AI and automation
× Know-how(Joint venture with NRI)

(In cooperation with Aeye
Security Lab, Inc.)

Examples of tools developed in-house
Malware investigativetools

PC self-diagnosis tool

“FalconNest”“Jishin-kun”

Integratedplatform

AI × Security
Alliance

Grow into new security tools

Service points (provided value)⚫ Acquire security tools through coordination with threat
intelligence of AI × security, integrated security services
platforms, etc.

Strategic alliance and acquisition are options in addition
to in-house development⚫ Expand even into the security market for middle-scaleand small and midsize companies
Further sophisticate services by broadening the activity
fields and accumulating intelligence15© 2024 LAC Co., Ltd.

Purpose Vision upheld by LAC
Purpose“Building a Trusted Society With Reliable Technology”
As the digital society becomes more sophisticated and complex, we will build safe andsecure social infrastructure by utilizing a variety of highly sophisticated technologies
and realize a society where people can support each other and be happy.

VisionWe aim to “become a role model for surviving in the digital society.”
We will continue to maintain the pioneering spirit that has led Japan's cybersecurity, protect
people's activities in an increasingly deepening and sophisticated digital society, drive theculture of the security industry, and serve as a role model for surviving in the new era.
16

© 2024 LAC Co., Ltd.

※ This document was prepared based on information available as of May 13, 2024 and is subject to change without notice.
※ The earnings targets, future forecasts, and other statements presented in this document are based on forecasts or assumptions based on information
available at the time this document was prepared by the Group and are subject to direct or indirect impacts from various changes in the operating
environment, including economic conditions and social trends. Accordingly, actual results, strategies, or other information may differ considerablyfrom the forecasts or assumptions※ LAC, JSOC, and Cyber Emergency Center are registered trademarks of LAC Co., Ltd. Other company names and product names presented in thisdocument are, as a general rule, also trademarks or registered trademarks of LAC Co., Ltd. or other companies.

© 2024 LAC Co., Ltd.