FY2022-2024 (Phase 2 of Midterm Management Plan)

VISION 2024
FUKUICOMPUTER HOLDINGS, Inc.
November 11, 2022

Midterm Management Plan Period

We regard the period up to FY2018, during which the Grouphas built the management foundation of its CAD business,to be the first founding period (Development Period I), andthe period from FY2019 onward to be the second founding
period (Development Period II).
We treat the period from FY2019 to FY2021 as the Phase 1of Midterm Management Plan period, and this Midterm
Management Plan period from FY2022 to FY2024 as thesecond period.
During this period, we will clarify the significance of theGroup's existence in society and our long-term vision in
the midst of the structural changes required in theconstruction industry as a whole, and establish a starting
point for growth toward new steps in FY2025 and beyond.
2

Review of Phase 1 of Midterm Management Plan
■ Achievement of Quantitative Goals throughthe Promotion of Priority Measures
NoItems

Results of the final year

Comparison to the target

1

Consolidated sales

14.3 billion yen+ 1.7 billion yen

2Operating income

6.3 billion yen+ 1.8 billion yen3Net profit margin

29.5%+ 6.3% PT

4ROE

24.4%

*Achievement of 15% or more• P r o f it p lan w as ach ieved in FY2019, the fir st year of midter m plan.

■ Major Factors■ Tasks and the Future•

Diffusion of information communication•

While existing businesses are strong, startup creation is limited.

technology through IT introduction subsidies.
Rising demand for IT and ICT products atconstruction sites due to i-Construction andBIM/CIM promotion.

•Response to changes in the external environment, such as a•decrease in construction orders due to a lull in special demand
related to the Olympics and a slowdown in private-sector capital
investment, and the promotion of DX at construction sites.
•We achieved sustained growth while addressing internal tasks
in our management system and business structure.

3

Vision of Growth That We Should Strive for
The construction-related systems business, which mainly consists of "Research" and "Design" services andmakes up a substantial portion of the Group's sales and earnings, will grow by increasing the number ofaccounts while leveraging its sales base.
We will focus on business development in the "Construction," "Maintenance Management," and “Information
Sharing" fields to expand the zone in which we provide solutions, aiming to achieve further growth byincreasing the number of accounts.

Construction

DesignSolution provision zone (number of accounts)

Aiming to "double" the results of Development Period I in Depelopment Period II

MaintenanceManagement

Information Sharing

Life cycle of the construction industry

Development Period II

Market through new solutions

CAD market to date
ResearchPhase 1 of Midterm
Management Plan(2019-2021)

Phase 2 of Midterm
Management Plan(2022-2024)

Phase 3 of Midterm
Management Plan(2025-2027)

4Future Vision
We aim to provide products that contribute to productivity improvementin the construction industry as a wholeAI

Increase in the number ofaccounts(construction industry as a whole)

Metaverse
BlockchainMRDX

By 2024

SaaS

Markets to bepioneered throughnew innovations

Market through newsolutions- Construction/MaintenanceManagement/Information
Sharing

By 2019

CAD market to date
- Research/Design (promotion ofdigitization)

I nvest m ent i n hum anr esour ces f or i nnovat i vechal l enges and busi nesssust ai nabi l i t y

Cultivation of corehuman resources
Appointment offemale executives
Strengthening
recruitment of newgraduates
Strengthening mid career recruitment

Update of existingskill sets
5

Toward Realization of Future Vision
We will realize this vision through new initiatives on our own and with
our partner companies.

MISSION
Be Must Be.
Provision of solutionsNew
initiatives

Be an essential force in theconstruction industry.

VISIONFUKUI ComputerGroup

Partner companies

All for Stakeholder.

Be a company that all
stakeholders appreciate.

VALUE
Dream Big, Design First
Create thoughts of the construction industry.

Be quick to create what people want.
6

Basic Policy and Quantitative Goals■ Basic Policy of This Midterm Manageme nt Plan
- Period to establish a growth starting point for rapid growth from FY2025 onward
We will expand sales through sustained growth of existing products while maintaining profits, and develop new services
and strengthen business sustainability.
In the final year, we aim to achieve 6.7 billion yen in operating income and a net profit margin of 44%.

■ Net sales (billion yen)

14.3

FY2021Result14.6

14.9■Operating income, operating margin(billion yen)

15.2
6.5

44.1%

43.9%
43.9％

43.6%
43.6％

44.0%

FY2021ResultFY2022

FY2023

FY2024
Final year

6.31

FY2022

FY2023

FY2024
Final year

6.7

6.4

27

Priority Measures

1Developaccount
strategies2

3

Developstrategies
according totarget size

Strengthen
governanceof humanresourcefunction8

Priority Measure: Financial Strategy (1)■Develop Accou nt Strategies
In the "Research" and "Design" fields, we will change the method of providing services to improve the repeat rate inline with the development of the next system.
For “Construction," "Maintenance Management," and "Information Sharing," we will acquire new accounts in thefields of new products, cloud, and smart devices.

MaintenanceManagement

Newly acquired accounts
Cloud field, smart device field, etc.

Construction

DesignInformation Sharing

Life cycle of the construction industry

Sales = number of customers (number of accounts)  unit price  repeat rate

Acquired accounts

Ongoing accounts

Research

User scale(Large)
9

Priority Measures: Financial Strategy (1)■Develop Accou nt Strategies
For the next system development, we will implement a catch and release strategy on a continuous
basis while catching up with the national policies so that we can provide steady support.

Key words to be caught in the next system development
Architecture System Business

Surveying/Civil Engineering SystemBusiness- Revised Energy Conservation Law- i-Construction- Basic Plan for Housing and Living- ICT Construction- Digitalization of Building Permit Applications- Long-term Plan for Basic Surveying- DX at Construction Sites- Review of the Real Estate Registration System- CN and SDGs

- The Seventh Decadal Plan for the National Land Survey Project- BIM/CIM in Principle- Basic Act on the Formation of a Digital Society- Work Style Reform Act

10

Priority Measures: Financial Strategy (1)■Develop Accou nt Strategies
We will provide existing services and in addition, new services on an individual basis.
Example: Engineering firm

Example: Surveyor's office
3 employees → Aim to acquire 3 accounts

Surveyor

L a ye r t o w h i c h s e r v i c e s c a n
be added for current users

SOM
Assistant

10 employees → Aim to acquire 10 accounts

SOM

Designers

AddonSales

L a ye r t h a t c a n b e a c q u i r e dthrough current products ormeasures

SiteSupervisors

SAMOffice clerkBuilders

L a ye r t h a t c a n b e a c q u i r e d b yproviding new services

Office clerks

Main Industries
Government andmunicipal offices

Construction
companies

Surveyingcompanies

Engineering firms

Land and building
surveyors

Design offices
11Priority Measures: Financial Strategy (2)■Develop Strategies Accor di ng to Target Size
- Segment targets and provide solutions that include existing products and new services in addition to CAD.
- Prioritize allocation of management resources to industries and businesses where improvement ofprofitability can be aimed.

Large
scale

Mediumscale

Phase 2 of Midterm
Management Plan

Provision of Solutions(2022-2024)

Phase 1 of Midterm
Management PlanCAD Provision(2019-2021)

Smallscale
12Priority Measures: Non-financial Strategy■Strengt hen Human Resource Functions

Solution Development
Specification Design
Program Construction

CAD Development

Quality
Inspection

MarketResearch- Reorganize functions to enable sustained growth of existing businesses and development of new growthareas, with an eye on target-specific strategies
Strategic Customer
Activities

ContentSupport

Sales Activities
Inside Support

IndividualSupport

Technology Development (R&D)
Corporate affairs, Common affairs■ Strengt he n Governa nc e
⚫ Further strengthen board effectiveness⚫ Expand weight of performance-linked compensation⚫ Improve the quantity and quality of dialogue with shareholders
13

Corporate Sustainability

Improve employee work-life balance■Contribute to a Sustainable Society through Business Activities•••

Contribute to sustainability through the use of data
while maintaining operational efficiency at the core

Contribution throughcore business
Develop professional human resources
Develop human resources who respect andaccept diverse values
Continuation of telework system

Contribution throughbusiness development•••

Support for work toward mandatory two days off per
week in the construction industry
Promotion of residential solar power generation
Public-private partnerships, open innovation, regional
revitalization

14

Other Investments■ Other Investments⚫
⚫
⚫

We will make investments in growth as part of our cash allocation philosophy (capital
expenditures, M&A quota setting).
We will invest in human resources for innovative challenges and business sustainability.
We are permitting about 5% of profit level as R&D investment to lead business expansion.

AgeAgeFY2021 (Number of Employees)

60-Ratio of developers

FY2024 (Number of Employees)
Ratio of developers

60-35％

27％

50-59

50-59

21％

26％

40-49

40-49

543 persons

33％

Average age:

30-39

Developer:
194 persons (31%)

20-29

33％
043.7 years

36％

Developer:
164 persons (30%)

20-29

Average age:

30-39

44.1 years

37％633 persons

34％

33％
50

100150200250 (persons)

050

100

150

200

250 (persons)15

Shareholder Return Policy■Share h ol der Return Policy⚫ Our basic policy on profit distribution is “to pay stable and continuous
dividends with emphasis on returning profits to shareholders.”⚫ We aim to increase dividends by 5 yen per year to 70 yen in the final year.

■Dividend per share (yen)
65
65
60
60
60

FY2021ResultFY2022

FY202370

FY2024
Final year
16

APPENDIX

17

Quantitative Goals (by segment)■ Net sales (billion yen)

■Operating income, operating margin(billion yen)

14.3

14.6

14.9

15.2
0.4

ITS Business 0.73

6.31
Other: 0.16

6.4

6.5

6.7

Other: 0.2

0.2

0.27
Surveying/CivilEngineering7.11System
Business

7.8
3.4
44.1%

Architecture
System 6.49
Business

FY2021Result3.8
43.9%

43.6%

44.0%

7.0
2.48

FY2022

FY2023

FY2024
Final year

FY2021Result2.5

FY2022

FY2023

FY2024
Final year18

Priority Measures: Financial Strategy (1)(Provision of Solutions)House Construction◎

Maintenance Information
Sharing
Management△△－△

Construction

Maintenance Information
Sharing
Management△－

Market needs (high)→→－(low)

Surveyingcompanies

Construction
companies

DesignDesignConstruction

Maintenance Information
Sharing
Management○△－Projectprogress△Designconsultants△General Construction
ResearchResearch
Government andmunicipal offices◎Construction－－○Construction
companies

Engineering
firms

DesignDesign offices

ResearchSurveying and Civil Engineering－

◎－△－
◎－－

Provision of solutions (many) ◎ → ○ → △ → － (Nil)19

Priority Measures: Financial Strategy (1)(Growth Vector)
Starting from our core business, we aim to strengthen our support for theindustry by expanding the number of customers and providing functions.
Providing
functions

MaintenanceResearchCompany Scale(Large)(small)DesignConstruction

Expansion

MaintenanceManagement

Information
Sharing

Government andmunicipal offices
Designconsultants

Expansion ofthe numberof customers

Construction
companies

Expansion of providing
functions

Engineering firms
Surveyingcompanies

CAD-centric core businessLand and building
surveyors
Design offices20

Priority Measures: Financial Strategy (2)(Business Development and Track Records)
We continue transactions with 30,000 or more companies in the construction,surveying, and civil engineering segments, mainly in Japan.

House
Construction

GeneralConstruction

Surveying

CivilEngineering
Construction

Targetindustries

Number of active
companies

Cumulative numberof companiesEngineering firms
Design offices

12,50042,000companies

companies

Architecture System
Business- Housing Business- Building Materials
Business- BIM Business

Construction
companies

900

1,800(Construction)companies

companies

Surveyingcompanies

7,800

21,000Land and building
surveyorscompanies

companies

Government andmunicipal offices
Construction
companies (Civilengineering)

9,400

18,000companies

companies

Total: 30,600
companies*Industries other than theabove: approx. 3,000 companies

Total: 82,000
companies

Business segment

Surveying/CivilEngineering System
Business- Surveying Business- Civil Engineering
Business- ConstructionInfrastructure
Business*As of April 2022

21

Priority Measures: Financial Strategy (2)(Track Records by Company Size)
Construction

Surveying and Engineering(By CompanySales, Track Records)(By Company Sales, Track Records)

02,000

4,000

6,000

8,000

0

2,000 4,000 6,000 8,000 10,00012,000(companies)(sales)Over 100 billion

10-100 billion

1-10 billion(companies)(sales)57 (1%)365 (3%)

2,688 (24%)

Over 100 billion

75 (0.4%)

10-100 billion

425 (2%)

1-10 billion

6,186 (56%)
0.1-1 billion～0.1 billion

3,426 (18%)

11,040 (58%)
0.1-1 billion

1,831 (16%)～0.1 billion

3,921 (21%)*Referece: Data from CIIC Construction Industry Information Center(as of April 2022)

22

Non-financial Strategy(Comparison with the Previous Figures)■ Strengthen Human Resource Functions
 Reorganization of functions to enable sustained growth of existing businesses and development of
new growth areas

CAD Development
Specification Design
Program Development

Quality
Inspection

MarketResearch▼ Previous (Phase 1 of Midterm Management Plan Period)

Sales Activities

Telephone
Support

Corporate affairs, Common affairs

Solution Development
Specification Design
Program Construction
CAD Development

Quality
Inspection

MarketResearch▼ Phase 2 of Midterm Management Plan Period
Strategic CustomerActivities

Content Support

Sales Activities
Inside Support

Individual Support

Technology Development (R&D)
Corporate affairs, Common affairs
23