May 9, 2023

Interim Review on
Medium-Term Management Plan(from FY2021 to FY2025)
Created on May 10, 2021
Revised on May 9, 2022
Revised on May 9, 2023

Copyright 2023 NSD CO., LTD.

Introduction
Thank you for reading this material, which presents an interim review of our five-year-long Mediumterm Management Plan, which began in the fiscal year ended March 31, 2022, together with a partial
revision to its targets.
In the past two years under the Medium-term Management Plan, our existing businesses grewsteadily and we expanded the business foundations of the NSD Group by means of M&A. As a result,
we are developing a solid footing for evolving into a corporate group generating more than 100 billion
yen in net sales. Going forward, we will accelerate efforts to adapt to a digital society in the fields of
new technology, digital transformation, and solutions, thereby continuously working to transform into a
more value-added company.
In parallel, we will work on management that will help realize a sustainable society. We will thus aim to
be a company that proposes the future of people and IT. We hope to continue receiving yourunwavering support.
May 9, 2023
NSD Co., Ltd.
President & CEO

Copyright 2023

Yoshikazu Imajo1

Progress of Individual Strategies under the Medium-Term Management
Plan (Interim Review)
System development

We focused IT investment demand of financial, manufacturing and other customers to receive more orders.
In the areas of new technology and DX, system development projects doubled, led by projects related to digitalization.
To secure the human resources needed to drive our growth, we stepped up recruitment, increased base pay, promoted
work style reform, expanded regional locations (See page 4), built closer relationships with business partners andbolstered our deployment capacity.

New technology and DXWe launched the Advanced Technology Strategic Business Unit. Under this unit, the Advanced Solution Planning
Department and the DX Consulting Department were created.
We upgraded the personnel development incentive program. The number of personnel holding qualifications for artificial
intelligence (AI) and cloud doubled.
We stepped up AI and Internet of Things (IoT) product development (for positional information solutions, image analysis,
voice recognition and others) and expanded sales foundations to speed up the growth of our business.

Solution business

We continued our efforts to promote healthcare-related products, including CAReNA and Gluketto, and humanresources-related products, such as ORDIA and JobSuite.
We invested in M&A, which we expect to expand the solution business in the areas of medical treatment and healthcare.

(See page 5.)

We will continue working to expand and accelerate our business through investment in M&A and other means, seeking tocreate a second pillar of the business.

SDGs / ESG (environment, society and governance)

We launched the Sustainability Management Committee chaired by the President and CEO.
This committee played a central role in developing an action policy, a sustainability declaration, material issues,measures and key performance indicators (KPIs).
We created and published an integrated report. We will work intensively to improve outsiders' evaluation.

(See page 6.)

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Consolidated Targets in Medium-Term Management Plan
(Upward Revision) In view of results for the first two years of the plan, we revised the targets for the third and lateryears and added EBITDA as a new indicator.
 We will strive to meet the initial target of 100 billion yen in net sales for the final fiscal year as well asother targets.
(million yen)(First fiscal year)(2nd year)(3rd year)(4th year)(Final fiscal year)(For reference)

2022/3Results

2023/3Results

2024/3
Revised plan

2025/3
Plan

2026/3
Plan

2026/3
Previous plan

71,18877,98297,000103,000

110,000

100,000

23,53728,41137,50043,00050,00045,00011,414

12,52414,00015,00016,50015,000

16.0

16.1

14.4

14.6

15.0

15.0

12,156

13,351

16,60017,70019,200--17.1

17.1

17.1

17.2

17.5

--Ordinary income

11,654

12,662

14,00015,00016,50015,000Net income

7,823

10,219

8,700

9,500

10,500

10,200ROE (%)

15.7

19.3

15.4

15.9

16.6

16.5

Net sales
New core business net sales(Note 1)

Operating income
Operating income margin (%)
EBITDAEBITDA margin (%)(Note 2)

(Note 1) System Development Business related to New Technologies and DX, and Solution Business.
(Note 2) A gain on the sale of shares of 2,150 million yen was posted as extraordinary income.

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[Reference] Launch of Regional Business Sites Considering that it is essential for our growth to secure the human resources, NSD works toincrease employees' job satisfaction and enhance personnel development.
 As one of measures for this, we launched regional business sites. We will actively employ
competent IT engineers who wish to stay in their regions, to enhance the composition of individual
business sites.

August 2022:

Our first regional business site is set up in the city of Sendai.
Name:

Sendai Business Site

Location: Floor 22, AER, 1-3-1 Chuo, Aoba-ku, Sendai-shi, Miyagi, Japan
Business: System development

FY2023/3* An external view of the building in which the Sendai Business Site is locatedDecember 2022:Our second regional business site is launched in the city of Hiroshima.
Name:Hiroshima Business Site

Location: Floor 10, Hiroshima Train Vert Building, 1-2-22 Kamiyacho, Naka-ku,Hiroshima-shi, Hiroshima, Japan
Business: System development* An external view of the building in which the Hiroshima Business Site is locatedCopyright 2023

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[Reference] M&A Investments
 To expand our business foundations, the Medium-term Management Plan envisions investing anapproximate total of 20 billion yen in M&A. As a result of studying potential deals over the past twoyears, we welcomed a total of three companies into the NSD Group.
 In the remaining period of the Medium-term Management Plan, we will actively consider utilizing
M&A deals.

October 2022: NSD acquires shares of Trigger Inc. and makes it a consolidated subsidiary.
FY2023/3

Location: Floor 2, VORT Akihabara V, 3-8-11 Iwamotocho, Chiyoda-ku, Tokyo, Japan
Business: IT consulting and system development

April 2023:

NSD acquires shares of ART Holdings Co., Ltd. and makes it a consolidated subsidiary.

May 2023:

NSD acquires shares of NHOSA Corporation and makes it a consolidated subsidiary.

FY2024/3

Companies subject to consolidation:
Six operating companies under the control of ART Holdings Co., Ltd. as aholding company
Locations: Sabae-shi (Head Office) and Fukui-shi, Fukui, Kanazawa-shi, Ishikawa,
and elsewhere
Business: System development and others

Location: NHOSA Building, 1-21-4 Chuo, Nakano-ku, Tokyo, Japan
Business: Development and sales of computer systems for statements of medical
expenses for dental clinics and dialysis treatment support systems

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[Reference] Progress of Sustainability (SDGs/ESG) Activities With respect to sustainability, we announced NSD's Sustainability Initiatives on March 30, 2022 to
make clear our structure and the policy for our activities.
 At present, the Sustainability Management Committee plays a central role in carrying out individual
activities in accordance with our long-term vision.
July 2021:

NSD launches the Sustainability Management Committee as an internal cross-divisionalorganization.

March 2022:

NSD announces the Sustainability Declaration.

FY2022/3

Recognizing that the realization of a sustainable society is essential, we fulfill our social responsibilities by contributing to thesound development of society to create and provide new solutions beneficial to people and society, viewing coexistence andshared prosperity with employees, customers, and shareholders as the very essence of our corporate activities. We
simultaneously strive to achieve sustainable growth by pursuing ESG initiatives.

It also announces Material Issues (Materiality), Measures and Key Performance Indicators(KPIs).
April 2022:

FY2023/3

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NSD establishes the Sustainability
Procurement Guidelines for its
business partners.

February 2023: NSD publishes an Integrated Report.
NSD acquires ISO 14001 certification for theenvironmental management system.

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