LAC Co., Ltd.
Financial Results for 1Q Ended June 30, 2024
August 9, 2024

© 20242022 LAC Co., Ltd.

Agenda1. Outline of Financial Results for 1Q
ended June 30, 2024
2. Forecasts for the year ending March31, 2025
3. References

Outline of Financial Results for 1Q ended June 30, 2024

Highlights of Consolidated Financial Results (YoY comparison)
Net sales up on growth of Security Business and SI Business
Operating income decreased reflecting the one-time expenses (65 million yen) related to office contract renewal, which is expected tocontribute to profit over the medium to long term from the next fiscal year onward
Ordinary income and net income attributable to owners of parent increased partly due to an improvement in equity in losses of affiliates(Million yen)
Subjects

Net sales

2024/3
1Q

Ordinary income
Ordinary income ratio (%)

Net income attributable to ownersof parent

Difference

Change (%)

11,61913,204+1,585+13.6-1-8-6-

-0.0

-0.1

-0.0p

--46-24+21--0.4

-0.2

+0.2p

--56-37+18-

Operating income
Operating income ratio (%)

YoY comparison

2025/31Q

Note: One characteristic of Group’s business is that earnings in the first quarter tend to be relatively low because the booking of sales,
particularly in the Security business, is skewed significantly towards the fourth quarter.
4© 2024 LAC Co., Ltd.

Ordinary Income: Analysis of Factors for Change (YoY comparison)
Despite an increase in labor costs due to a rise in base salary, etc. and the recording ofexpenses related to office contract renewal, ordinary income grew driven by the effect ofhigher sales and improvement in equity in losses of affiliates(Million yen)
Effect of higher sales

SG&A

+190

-131
Office contract renewal
expenses-65＜Main factors for increase/decrease＞
Labor costs-93
other-38

Non-operating items+28＜Main factors for increase/decrease＞
Equity in earnings of affiliates +29
Other
-1

-46

-24

Ordinary income +212024/3
1Q

2025/3
1Q

Notes: 1. Office contract renewal expenses resulted from the recognition of assets and liabilities for restoration expenses related to the contract renewal of the Hirakawacho
office including the reduction of floor space (lease expires in March 2025) and an increase in depreciation due to a change in the estimate of existing assets. It isincluded in SG&A expenses but is shown in the chart separately.
2. Equity method affiliates are two companies; KDDI Digital Security, Inc. and Nuligen Security Co., Ltd.
© 2024 LAC Co., Ltd.
5

Business Results by Segment (YoY comparison)
Security business net sales up, profit down SI business net sales up, profit up
Company-wide common expenses increased due to the recording ofoffice renovation-related expenses, etc.
(Million yen)
Net sales2024/3
1Q

YoY comparison

2025/3
1Q

Difference

Change (%)

Security Solutions Services (SSS) business

5,062

5,639+576+11.4

System Integration Services (SIS) business

6,556

7,565+1,009+15.4

11,61913,204+1,585+13.6

Total

Segment margin

2024/3
1Q

YoY comparison

2025/3
1Q

Difference

Change (%)

Security Solutions Services (SSS) business

173

85-87-50.4

System Integration Services (SIS) business

801

1,012＋211＋26.3

Total

974

1,098＋123＋12.7

Company-wide common-976-1,106-130-Note: Segment margin is profit that includes business-related SG&A expenses but before the incorporation of corporate common expenses.
6© 2024 LAC Co., Ltd.

Business Results of Security Solution Service (SSS) segment
Net sales increased due to expansion of Assessment services and monitoring services
Profit declined due to workforce expansion and other measures for structural reinforcement
Net sales(Million yen)

6,000

Security Consulting Services
Educational and training services increased backed by growth in the targeted
mail training business, but a decline in the emergency response service
business and other factors resulted in lower sales.

Security Assessment Services

4,000

5,062

681
641

-8.0％
Consulting
Assessment +66.4％

1,676

Monitoring +13.6％

2,437

Product175

201

Maintenance +15.1％

2024/3 1Q

2025/3 1Q

740
385

Difference

1,475

Change2,2850Security Monitoring Services
Sales were up thanks to the growth of individual monitoring services, which provide
advanced security measures for specific companies, and internal fraud monitoring
services, etc.

Sales grew, including products for web security against denial-of-service
attacks and products for collecting and analyzing potential threat information.

+6.6％

Segment margin(Million yen)

300

200

Security Product Sales+576+11.4%

2,000

Sales increased driven by the strong performance of our mainstay web applicationassessment services and platform assessment services as well as an expansion in apenetration testing project that was intended to investigate potential threats.

5,639

173

Difference-87
Change-50.4%
10085

Security Maintenance Services
Sales decreased due to a decline in existing business as demand is shrinking in
the wake of expansion in cloud-enabled products.
70

2024/3 1Q

2025/3 1Q© 2024 LAC Co., Ltd.

Business Results of System Integration Services (SIS) segment
Net sales and profit increased thanks to growth in sales ofdevelopment services and hardware/software
Net sales(Million yen)

7,565

8,000

6,556

Development Services
Sales increased thanks to growth in projects for major banks andpublic-sector, etc.

+1,009

6,000

4,000

Hardware and Software Sales
Sales rose thanks to significant growth as a result of winning large
projects, etc., although demand has been shrinking partly due to theexpansion of cloud services.

2,000

04,154

ChangeDevelopment+8.3％+71.0％+15.4％
1,184HW/SW

1,094

IT maintenance +7.4％

690786

Solution

2024/3 1Q

2025/3 1Q+13.9％

Segment margin

1,500

Difference
1,000

Solutions Services
Sales grew thanks to an increase in sales of cloud solution productsthat also contribute to cybersecurity.

4,500

692
1,018

(Million yen)

IT Maintenance Services
Sales increased as contract renewals, etc. remained strong and grew.

Difference

801＋211

1,012

Change＋26.3%50002024/3 1Q

82025/3 1Q© 2024 LAC Co., Ltd.

Highlights of Consolidated Balance Sheet (YoY comparison)
Maintaining stable financial base to enable sustained investment in growth（Million yen）
Subjects

As ofMarch 31,2024

Point

As ofJune 30,2024

Difference
Assets23,77022,277-1,492Current assets

17,472

16,264-1,207

Noncurrent assets

6,297

6,013

-284

8,365

7,376

-989

Total Assets

Total Liabilities
Current liabilities

7,903

6,908

-995

462

467+5

Total net assets

15,404

14,901

503

Cash and deposit

5,494

5,115-379

Noncurrent liabilities

Interest-bearing debt

Shareholders‘ equity ratio

124

108

64.8％

66.9％

【Current assets】
Decrease in Notes and accounts receivable - trade, -2,213
and contract assets＋508
Increase in work in process

Liabilities【Current liabilities】
Decrease in accounts receivable-trade-690

Net assets【Net assets】
Decrease in retained earnings

-471

-15
9+2.1p© 2024 LAC Co., Ltd.

Forecasts for the year ending March 31, 2025
The Company will not make a change to the announcement made on May
13, 2024, because we believe that our performance in the first threemonths of the current consolidated fiscal year was generally favorable, andby taking into account the Company’s seasonal performance, with a bias
toward the fourth quarter of the consolidated fiscal year.

Forecasts for the year ending March 31, 2025 (YoY Comparison)unchanged from May 13, 2024 announcement

Both net sales and profit are expected to increase
Operating income will stay almost flat due to one-time expenses
for an office contract renewal that will contribute to cost reductions in the next
fiscal year and beyond(Million yen)
Subjects

2024/3Results

YoY comparison

2025/3
Forecasts

Difference

Change (%)

Net sales

49,47752,750+3,272+6.6

Operating income

2,174

2,180+5+0.34.4

4.1-0.3p-

2,153

2,200+46+2.1

4.4

4.2-0.2p-

1,379

1,500+120+8.7

9.1

9.5+0.4p-

Operating income ratio (%)

Ordinary income
Ordinary income ratio (%)

Net income attributable to ownersof parent

ROE (%)

11© 2024 LAC Co., Ltd.

Business Forecasts by Segment (YoY Comparison)unchanged from May 13, 2024 announcement

Both the Security business and SI business are expected to increase net sales and profits
due to the expansion of service businessCorporate common expenses are expected to rise due in large part to an office contract
renewal and an increase in labor costs(Million yen)

Net sales

2024/3Results

YoY comparison

2025/3
Forecasts

Difference

Change (%)

Security Solutions Services (SSS) business

22,15924,560+2,400+10.8

System Integration Services (SIS) business

27,31728,190+872+3.2

49,47752,750+3,272+6.6

Total

Segment margin

2024/3Results

YoY comparison

2025/3
Forecasts

Difference

Change (%)

Security Solutions Services (SSS) business

2,260

2,780+519+23.0

System Integration Services (SIS) business

3,854

4,260+405+10.5

Total

6,115

7,040+924+15.1

Company-wide common-3,940-4,860-919-Note: Segment margin is profit that includes business-related SG&A expenses but before the incorporation of corporate common expenses.
12© 2024 LAC Co., Ltd.

References

Consolidated Financial Results (Quarterly)
Net Sales
2023/315,0002024/3Operating income

2025/3

13,204
11,619
10,16811,02910,214

12,641
10,7842023/32,000

14,186
12,8502024/32025/3
1,479
1,281

1,500

10,000

1,000
500

257

5,000

316

359 380

2Q

3Q

0-123 -1-8-500

01Q

2Q

3Q1Q4QNet income attributable to owners of parent

Ordinary income
2023/32,000

2024/3'2025/3

2,000
1,535
1,325

1,500

2023/32024/32025/3

1,500
903

1,000
1,000500500

266 3034Q

169 196

1,006

233

0354 361-500-149 -56 -37

0-132-1,000-46 -24-500-1,070-1,500

1Q

2Q

3Q

4Q

1Q

14

2Q

3Q

4Q

© 2024 LAC Co., Ltd.

Consolidated Financial Results and Results by Segment (Quarterly)(Million yen)
Consolidated Financial Results

2023/32024/32025/3

Net sales
Cost of sales
Cost of sales / net sales (%)
Selling, general and administrative expenses
Selling, general and administrative expenses / net sales (%)
Operating income
Operating income ratio (%)
Net income attributable to owners of parent
Net income attributable to owners of parent ratio (%)

1Q
10,168
8,292
81.6
1,999
19.7
-123
-1.2
-149
-1.5

2Q
10,214
7,998
78.3
1,958
19.2
257
2.5
169
1.7

3Q
10,784
8,497
78.8
1,927
17.9
359
3.3
-1,070-9.9

4Q
12,850
9,619
74.9
1,949
15.2
1,281
10.0
903
7.0

1Q
11,619
9,670
83.2
1,950
16.8
-1-0.0-56-0.5

2Q
11,029
8,837
80.1
1,876
17.0
316
2.9
196
1.8

3Q
12,641
10,266
81.2
1,995
15.8
380
3.0
233
1.8

4Q
14,186
10,616
74.8
2,090
14.7
1,479
10.4
1,006
7.1

1Q
13,204
11,065
83.8
2,147
16.3
-8-0.1-37-0.3

Security Solutions Services (SSS) businessNet sales
Security Consulting Services
Security Assessment Services
Security Monitoring Services
Security Product Sales
Security Maintenance Services
TotalSegment margin714
397
1,460
1,761
164
4,498
201922
556
1,516
1,361
1434,500
523

956
585
1,511
1,303
280
4,638
538

1,268
1,036
1,730
1,577
271
5,884
1,102

740
385
1,475
2,285
175
5,062
173

881
609
1,572
1,489
157
4,709
384

995
558
1,713
1,751
254
5,272
307

1,281
1,465
1,838
2,246
281
7,114
1,395

681
641
1,676
2,437
201
5,639
85

System Integration Services (SIS) businessNet sales
Development Services
Hardware and Software Sales
IT Maintenance Services
Solutions Services
Total
Segment margin

3,731
415
961
560
5,669

4,021
496
733
463
5,714

4,158
603
909
4756,146

4,443
944
696
882
6,966

4,154
692
1,018
690
6,556

4,427
685
722
485
6,320

4,828
1,030
739
771
7,369

4,809
1,121
612
528
7,071

4,500
1,184
1,094
786
7,565

731

769

798

1,129

801

861

1,065

1,125

1,012

Company-wide common expenses-1,057-1,035

-977

-950

-976

-930

-993

-1,040-1,106

15

2Q

3Q

4Q

© 2024 LAC Co., Ltd.

Orders and Balance of Orders by Segment (YoY comparison)
Order received during first quarter

Order backlog at end of first quarter

16,00030,000+3,740（＋35.0％）14,00012,00014,424

10,684

Consulting+81.2％

Assessment-0.8％

Monitoring+16.6％

25,00020,000

SSS business

10,0005,294 → 6,760+1,465（＋27.7％）

8,000

Product+6,621（＋34.1％）

26,046

19,425
10,434 → 12,708

Maintenance+18.0％Development+25.4％

10,000+9.8％-24.5％

Monitoring+15.9％

Product+44.4％

Maintenance+87.4％Development+34.9％

HW/SW+71.4％

SSS business+32.0％
15,000Consulting
Assessment+2,273（＋21.8％）6,000

SIS business

4,000

SIS business

5,390 → 7,664+2,274（＋42.2％）

2,000

HW/SW
IT Maintenance +46.1％+220.1％
Solutions

02024/3 1Q

8,990 → 13,338

5,000+68.8％+4,347（＋48.4％）IT Maintenance +39.7％
Solutions+156.8％02025/3 1Q

2024/3 1Q

2025/3 1Q

Notes: Orders and balance of orders are for the parent only.

16© 2024 LAC Co., Ltd.

Consolidated Financial Results (Subsegment)(Million yen)

(Million yen)

60,0006,000

52,75049,47750,0005,000

43,693 42,660 44,018
36,896 37,109 38,432

40,00032,538 32,215 33,413

31,59538,71940,466
4,000
SSS business32,577 33,086 32,850

30,0003,000

19,8791,895

20,000

1,489

1,998

2,100

2,328

2,377

2,446

2,224 2,366 1,767

Dealerbusiness

2,180

2,117
1,595

2,000

2,174
1,775

10,000

SIS business

Operatingincome(Right)

1,441

1,000

905
674
00
2008/03 2009/03 2010/03 2011/03 2012/03 2013/03 2014/03 2015/03 2016/03 2017/03 2018/03 2019/03 2020/03 2021/03 2022/03 2023/03 2024/03 2025/03※1※2(Forecast)※1 Earnings for the fiscal year ended March 31, 2008, the fiscal year in which Little eArth Corporation Co., Ltd, and A&I System Co., Ltd., initiated their management integration,
include Little eArth Corporation's net sales and operating income for the 15 months from January 2007 through March 2008 because Little eArth Corporation changed its fiscal
year-end from December to March. Little eArth Corporation's nonconsolidated earnings for the three months ended March 31, 2007, are deducted from the earnings data herein topresent annualized pro forma data for the sake of like-for-like comparability.
※2 Business segments were revised from the fiscal year ended March 31, 2015. The data plotted above for the preceding fiscal year (ended March 31, 2014) are adjusted to reflect
the re-segmentation to present pro forma data for the sake of segment-by-segment earnings comparability.
© 2024 LAC Co., Ltd.
17

Consolidated Employees(People)
3,000

2,500

2,167

2,216

829

895

2,114

2,129

2,192

884

907

949

2,275

2,000

1,014

1,500

SSS business
SIS business

Managing section

1,000

1,141

1,160

1,054

1,039

1,059

1,066

197

161

176

183

184

195

'Mar. 31,2020

'Mar. 31,2021

'Mar. 31,2022

'Mar. 31,2023

'Mar. 31,2024

'Jun. 30,
2024

500

0Note: There was a decrease of 30 employees (compared to March 31, 2021) in the SSS business, due to the absorption-type merger of Asian Resurrection with LAC CyberLink
as the surviving company, in the 1st quarter.
The employees of I Net Rely Corporation (97 employees as of June 30, 2021) were excluded from the number of SIS employees as of September 30, 2021.
This is because I Net Rely Corporation was excluded from the scope of consolidation following the sale of all shares in said company on June 28, 2021.
18© 2024 LAC Co., Ltd.

※ This document was prepared based on information available as of August 9, 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.