November 12, 2020

Briefing Materials for
Financial Results
First half of the Fiscal
Year ending March
2021
First half of FY3/2020
I-NET Corp.
[TSE, First Section: 9600]©2020 I-NET CORP.All rights reserved

www.inet.co.jp

Contents of Briefing

1. Introduction(Overview of Company)
2. Overview of Earnings in First
half of Fiscal Year ending
March 2020
3. Initiatives in Medium-termManagement Plan
4. Full-year Earnings Forecasts
5．Appendix©2020 I-NET CORP.All rights reserved

www.inet.co.jp

2

1. Introduction(Overview of Company)©2020 I-NET CORP.All rights reserved

www.inet.co.jp

3Overview of Company (as of September 30, 2020)
 Trade name: I-NET Corp.
 Founded: April 22, 1971
 Headquarters: 3-3-1 Minatomirai,
Nishi-ku, Yokohama
 Capital: 3,203 million yen Founder: Noriyoshi Ikeda,
Founder Supreme Adviser
 Representative Director andExecutive President: Mitsuru Sakai
 Subsidiaries: IST-Software Co., Ltd.
Software Control Co., Ltd.
I-NET DATA SERVICE CORP.
 Number of employees: 1,663 (consolidated)

959 (non-consolidated) Offices, branches, data centers and overseas offices
Tokyo office, Sapporo branch, Sendai branch, Chubu branch, Osaka branch, ChuSikoku Branch, Fukuoka branch, No. 1 Data Center, No. 2 Data Center
Singapore Representative Office©2020 I-NET CORP.All rights reserved

www.inet.co.jp

4Overview of Company (as of September 30, 2020)

I-NET Corp.
Capital: 3,203 million yen
Consolidated employees:
1,676
Non-consolidated
employees: 959

Wholly owned
consolidated
subsidiaryBusiness:
Information processing
services
System development
services
Product sales

Wholly owned
consolidated
subsidiary

100% nonconsolidated special
subsidiary company©2020 I-NET CORP.All rights reserved

IST-Software Co., Ltd.
Capital: 608 million yen
Employees: 464

Software Control Co., Ltd.
Capital: 54 million yen
Employees: 240

I-NET DATA SERVICE CORP.
Capital: 9 million yen
Employees: 20

www.inet.co.jp

5History (Over-the-counter trading to present)(Net sales)
350

300

Received assignmentsfrom 6 out of 10 designatedoil wholesalers

250

Listed on firstsection(Unit: 100 million yen)

Merged two
subsidiaries,
founded ISTSoftware

Recordedrecord-high
net sales
Received assignmentsfrom 5 out of
7 designated oilwholesalers

Set up droneflying field

Began offering
cloud services

Merger with Soft
Science Co., Ltd.

200

150

Listed on second
section1st data center,stage II building
begins operating

100 Over-the-counter2nd data center,stage I building
begins operating

2nd data center,stage II building
begins operating

trading begins

50

0

1st data center,stage I building
begins operating

'20/3
'19/3
'18/3
'17/3
'16/3
'15/3
'14/3
'13/3
'12/3
'11/3
'10/3
'09/3
'08/3
'07/3
'06/3
'05/3
'04/3
'03/3
'02/3
'01/3
'00/3
'99/3
'98/3
'97/3
'96/3
©2020 I-NET CORP.All rights reserved

www.inet.co.jp

6Business Overview: Net sales by service category
We provide customers with services in the following
three service categories.
Information processing

4%

31.0
61%

billion yen

35%

10.8

billion yen

System development

18.9

billion yen

Product sales

1.3 billion yen*Net sales as of the fiscal year ended in March 2020
©2020 I-NET CORP.All rights reserved
www.inet.co.jp

7

Achieving stable growth by expanding the stock business
Definition of stock business

Merits of expanding stock business Examples of stock business Growth foundation built up

 Business that generates net sales at a

fixed amount every month Business with contracts that continue
beyond the next fiscal year Recurring revenue business= information processing services

with ongoing net sales
 High profitability (most recent
Gross profit was 23％）
 Increase in net sales and income
per person

 Cloud services
 Data center services

 SS commissioned settlement(gas stations) Printing and inserting

Trends in net sales for stock business over past 10 years (consolidated)(Unit: Million yen)

10,000
8,000

4,000

7,252

7,802

8,487

8,783

9,107

9,607

9,784

10,0522,000
010,091

10,819Result of First halfof FY2021

6,000

5,846

'11/3 '12/3 '13/3 '14/3 '15/3 '16/3 '17/3 '18/3 '19/3 '20/3 '21/3©2020 I-NET CORP.All rights reserved

www.inet.co.jp

Growth foundation that continues
beyond the next fiscal year

Planned value

12,0008

Business overview: Information processing services
Data center services

Cloud services
Wide range of cloud services
developed at data centers

Hokkaido(1 building)Telework support

Nagano(1 building)
Yokohama(four buildings)

提携

Osaka
センター
(1 building)

Remote desktop

Business chat
File sharing

Business card management
serviceNo. 1 Data Center(Yokohama)Total floor area of about 9,000 ㎡

No. 2 Data Center(Yokohama)Cloud infrastructure

Total floor area of about 13,000 ㎡©2020 I-NET CORP.All rights reserved

www.inet.co.jp

9

Information processing services Gas station data processing

We have provided data processing services for gas stations (SS)nationwide since founding.
Support SS at seven branches nationwide (Sapporo, Sendai, Tokyo, Nagoya, Osaka,
Chugoku & Shikoku, Fukuoka)
We have a relationship with about 30% of all SS based on over 50 years of results

We provide account / credit processing systems for SS affiliated with oil wholesalers (ENEOS,
Idemitsu Kosan, KYGNAS SEKIYU, TAIYO OIL) and trading companies (Itochu Enex, Mitsubishi
Corporation Energy, Marubeni Energy, SAN-AI Oil)（Overview of processing services）

Our petroleum sales settlement service has a long track record and is used by many SS,
generating stock growth through monthly fees•

Inet cloudenvironment

Customer

Invoicedispatched

Settlement-type
Process sales data
Process accounts
receivable data
Process accounts
payable data
Process flash report data

Process kerosene data
Process gasoline data
Internet

©2020 I-NET CORP.All rights reserved••••
Send data tocredit cardcompany

Support for building wholesaler
settlement systems
Credit processing
Support for building wholesaling systems
Support for building gas systems
Settlement systems support, etc.

Bolster development of "Government agency
demand card systems" for petroleum
associations nationwide
Support emergency services by facilitating seamlessrefueling of emergency vehicles, etc.

www.inet.co.jp10Business overview: System development services
We support the digital transformations of many customers through thetrusting relationships we have built up over the years in fields such as
operational application development, package software development, dataservices, AI services, embedded control systems, and space development.

Finance

Petroleum and gas

Retail and distribution

Manufacturing

Architecture andreal estate

Railways andtransportation
infrastructure©2020 I-NET CORP.All rights reserved

www.inet.co.jp

Space

Medical11Group’s business model
Align range of services with customers’ businesses and develop
into recurring revenue business centered on cloud data centers
DX

Oil/LNG
Financialindustry
Retail anddistribution
industry
Service industry

Space field

solutionsFintechCloud
services©2020 I-NET CORP.All rights reserved

Data processing
service/settlement

Cloud
Data Center

Infrastructure
construction,
Operational
monitoring

Wholesale andintegration field
Construction andreal estateindustry

Printing,
Mailing,

BPO

Systemdevelopment
Embedded
controlsystems
www.inet.co.jp

Manufacturing

Communications
and media
Public agencies, local
governments, other12

2. Overview of Earnings in First
half of Fiscal Year ending
March 2020

©2020 I-NET CORP.All rights reserved

www.inet.co.jp

13Overview of Earnings in First half of FY 2020 (consolidated)(Unit: Million yen, %)First half of FY2019
AmountChange over previous
fiscal year

First half of FY2020

Percentage

AmountPercentage

ChangeRate ofchangeNet sales

15,360100.0

14,884

100.0

(476)

(3.1)

Cost of sales

11,81876.9

11,734

78.8

(83)

(0.7)

Gross profit

3,542

23.1

3,150

21.2

(392)

(11.1)

Selling, general andadministrative expenses

2,285

14.9

2,320

15.6

35

1.6

Operating income

1,257

8.2

829

5.6

(427)

(34.0)

Ordinary income

1,250

8.1

854

5.7

(396)

(31.7)Net income attributable toparent

827

5.4

372

2.5

(454)

(55.0)

Income per share (yen)

52.01

―

23.34

―

(28.67)－©2020 I-NET CORP.All rights reserved

www.inet.co.jp

14

Sales by service category (consolidated)（Unit: Million yen, %)First half of
FY2019

Information
processing①
services
Systemdevelopment
services ②
SystemProduct sales

Total

ChangeFirst half of
FY2020

Amount of change

Percent change

Net sales

5,396

5,882

485

9.0

Gross profit

1,432

1,326

(105)

(7.3)

Ratio of gross profit to net sales

26.5

22.6

(4.0)

－

Net sales

9,264

8,367

(897)

(9.7)

Gross profit

2,028

1,740

(287)

(14.2)

Ratio of gross profit to net sales

21.9

20.8

(1.1)

－

Net sales

699

634

(64)

(9.2)

Gross profit

81

82

0

0.7

Ratio of gross profit to net sales

11.7

13.0

1.3

－

Net sales

15,36014,884

(476)

(3.1)

Gross profit

3,542

3,150

(392)

(11.1)

Operating income

1,257

829

(427)

(34.0)

Operating margin

8.2

5.6

(2.6)

－

(Main factors)①Data center sales rose due to a steady rise in usage. Mailing service sales and profit fell as the recent shift to digital and otherfactors has resulted in a decline in usage. Margins declined due to the strategic acquisition of low-margin projects aimed atboosting growth.
②Engineer utilization rates declined because system development projects for petroleum and other companies were put on holdor postponed due to the COVID-19 pandemic. As a result of this and other factors, sales and profits declined.

©2020 I-NET CORP.All rights reserved

www.inet.co.jp

15

Information processing: Factors causing trends in net sales
Factors causing trends in net sales for
information processing

6,000
Other

5,500
5,000

(Unit: Million yen)

5,882

- 206

Data center and cloud service sales rosedue to greater use of data centers byexisting and new customers•

Reduced use of mailing services due to theshift to digital and other factors resulted ina decline in sales

Data processing
Data center,
services

10,091

＋14

Cloud

＋676

4,500
4,000

•

Previous fiscal
year

分類 2

分類 2

分類 3

Current fiscal
year

Data center and cloud services（Part of information processing business）

4,382(FY March 2020)
3,545
2,471

2,761

Net sales have more thanquadrupled in 10 years as themarket grew

1,271

'12/3

'13/3

'14/3

©2020 I-NET CORP.All rights reserved

3,917

3,032

1,966

'11/3

3,609

4,951

'15/3

'16/3

'17/3

www.inet.co.jp

'18/3

'19/3

'20/3

16

Trends in net sales for system development（単位：百万円）(Unit: Million
yen)

Total of 1Q and 2Q FY March 2020

Trends in net sales for system
12,000development services
9,264

10,000

8,367

8,000
6,000
4,000

•

Software investment demand was strong and had
trended firm before the COVID-19 pandemic•

The COVID-19 pandemic depressed engineer
utilization rates, resulting in sales falling in both 1Q
and 2Q FY March 2020

2,000
0

Previous fiscal year

Current fiscal year

System development services(FY March 2020)

18,924
16,395

12,351

13,063

13,45813,064

13,45814,081

13,937

14,348

Solid trends as demand for software
investment increases
'11/3

'12/3

'13/3

'14/3

©2020 I-NET CORP.All rights reserved

'15/3

'16/3

'17/3

www.inet.co.jp

'18/3

'19/3

'20/3

17

Full-year progress
Full-year consolidated forecast (Announced on July 30th , 2020)(Unit: Million yen, %)First half of
FY2020First half of
FY2021

ChangeForecast of
FY2021

Progressrate

Net sales

15,36014,884(476)

31,50047.3%

Operating profit

1,257

829

(427)

2,580

32.2%

Ordinary profit

1,250

854

(396)

2,540

33.6%

827

372

(454)

1,675

22.2%

Profit attributable toowners of parent(About forecast for first half of FY2021)••••

Sales and profit progress is lagging due to factors such as lower engineer utilization rates
because the economic slowdown sparked by the COVID-19 pandemic resulted in some systemdevelopment services projects being put on hold or postponed.
The data center and cloud service business has enjoyed high demand even during the pandemic,
with upbeat usage.
The decline in 2H net income is partly due to a ¥250 million special retirement payout to theformer Chairman (who also founded the company), which was booked as an extraordinary loss
in 1Q.
We aim to achieve the full-year target by leveraging the strength of our balanced businessportfolio.

©2020 I-NET CORP.All rights reserved

www.inet.co.jp

18

FY2020 FY2021 1Q～2Q(Unit: Million yen, %)Net sales

OperatingprofitOrdinary
profit2Q

FY2021

7,341

7,543

201

14,884FY2020

7,280

8,080

799

15,360Change

60

(536)

(597)

(476)

FY2021

343

486

142

829

FY2020

568

688

119

1,257

Change

(225)

(202)

23

(427)

FY2021

4.7％

6.4％

1.7%

5.6％

FY2020

7.8％

8.5％

0.7%

8.2％

Change(3.1%)(2.1%)

1.1%(2.6%)©2020 I-NET CORP.All rights reserved

ChangeTotal of 1Q
and２Q

1Q

www.inet.co.jp

19Balance sheet (consolidated)(Unit: Million yen, %)End of fiscal year
ended in March 2020
AmountConstituent
ratioFirst half of FY2021
AmountChange over end of
previous fiscal year

Constituent
ratio

Amount ofchangeRate ofchange

9,628

32.5

8,820

30.3

(808)

(8.4)

Non-current assets ①

19,96067.5

20,327

69.7

367

1.8

Total assets

29,589100.0

29,148

100.0

(441)

(1.5)

Current liabilities

8,407

28.4

7,956

27.3

(450)

(5.4)

Non-current liabilities

5,957

20.1

5,845

20.1

(112)

(1.9)

Current assets

Total liabilities②

14,36548.5

13,802

47.4

(563)

(3.9)

Net assets③

15,22451.5

15,346

52.6

121

0.8

29,589100.0

29,148

100.0

(441)

(1.5)

Total liabilities and net
assets(Major factors)① Investment securities rose by ¥405 million due to investments to strengthen the business and valuation②③

reappraisals
Interest-bearing debt declined ¥48 million, income taxes payable fell ¥198 million, accounts payable due to otherand the acquisition of fixed assets fell ¥124 million, consumption tax payments and repayment of lease obligations
reduced liabilities by ¥186 million
Capital surplus fell ¥128 million, valuation difference on available-for-sale securities rose ¥174 million, a reduction
in treasury shares added ¥41 million©2020 I-NET CORP.All rights reserved

www.inet.co.jp

20

Cash flow statement (consolidated)(Unit: Million yen, %)First half of FY2020

First half of FY2021

Change overprevious year

AmountAmountChangeCash flow from operating
activities

1,471

Cash flow from investing
activities(2,123)

Cash flow from financing
activities

262

Change in cash and cash
equivalents

1,154

(317)

② (1,167)

956

①

③

(633)

(895)

(390)

(646)

(256)

Balance of cash and cash
equivalents at beginning of
period

3,299

3,083

(216)

Balance of cash and cash
equivalents at end of period

2,909

2,436

(472)

(Major factors)① Increase: ・・・Retained earnings from depreciation and goodwill amortization added ¥902 million
Profit before income taxes and minority interests ¥571 million, trade receivables declined ¥227 million
Decrease:・・・income taxes paid ¥404 million, etc.
② Expenditure of ¥1,001 million mainly due to expansion of data center facilities to accommodate orders for large-scale
projects③ Interest-bearing debt declined ¥48 million, purchase of treasury shares of ¥105 million, dividends paid ¥341 million©2020 I-NET CORP.All rights reserved

www.inet.co.jp

21Medium-Term Management Plan: Progress with earnings forecasts

Net sales targets
35,00033,20033,00031,09730,00031,00029,000(Unit: Million yen)

31,500Target

2,800
2,700
2,600
2,500
2,400
2,300
2,200

Target• Net sales increased for the ninth straight year and net
income rose for the tenth straight year, showing that
we have made major strides in achieving our targets.
• Data center and cloud services were solid.
• System development field was strong due to highdemand for IT investment.

27,59127,00025,000Status in first year of plan

Plan for second and third years'19/3
Actual'20/3
1st year'21/3
2nd year

Operating profit targets

2,450

2,501

'22/3
3rd year'20/3
1st year• Improve product and service capacity for big data, AI
and fintech• Strengthen pursuit of cloud services

2,730

2,580

• Address needs for workstyle reform such as telework• Work with private-sector startup companies and othersin the space development field

Impact of COVID-19 pandemic• Information processing services centered on data
centers and cloud services are driving earnings evenduring the pandemic

2,345

'19/3

• Respond proactively to customers’ DX needs'21/3
2nd year'22/3
3rd year

Actual

We will accurately identify customer
needs and continue to meet our targets.
©2020 I-NET CORP.All rights reserved• System development services have been hurt due to a
decline in engineer utilization rates. We expect this tonormalize going forward.
• The pandemic has made the environment surrounding
corporate capital investment unclear, but demand for
IT investment has been sustained by the shift totelework and other workstyle reforms.
• We plan to further bolster the stock business.

www.inet.co.jp22

3.Initiatives in Mediumterm Management Plan
Main businesses and topics
Please see the appendix for details of
our medium-term plan initiatives©2020 I-NET CORP.All rights reserved

www.inet.co.jp

23

Strengthen R&D functions
We established an R&D office in April 2020 aimed at strengthening R&D capabilities.
The first fruit of this research was the launch of a Three Cs data sensing service based on IoT andcloud technology to help combat the COVID-19 pandemic【New service】

The service constantly monitors the concentration of
C02 in a room using a small IoT device that measures
C02. Concentration levels can be checked on
smartphones or computers and alerts can be set up. It
helps to reduce the risk of COVID-19 infection due tothe Three Cs where many people tend to gather suchas companies, commercial facilities, and educational
facilities.

Communication
protocol: MQTT

Place in meeting rooms,
training venues,
classrooms, etc.

Internet

WiFi
communication

CO2 value
prediction model【Features】

Concentration app

WiFi receiver

CO2 sensor unit
(CO2, thermo
hygrometer)

I-NET data
center•Alerts can be set up to help
maintain optimal environments•

Easy-to-understand userinterface•

Reduce the risk of COVID-19
infection during the pandemic•

Eases the burden on customers.
Data is sent safely and securely
to I-NET data centers

Analysis app

Send email alert- Check- Analyze- Coordinate

Database
Screen image

Display on digital signage system*Customer provides the signage display
Operator (monitoring
on web browser)©2020 I-NET CORP.All rights reserved

www.inet.co.jp

24Expand the rollout of ABC costing system"ABC Financial®" is an activity-based costing system for financial institutions thatenables multifaceted cost analysis and a swift response to the rapid digitaltransformation of banking business models. The system is performing well, and we
aim to roll it out for other industries to make it a standard costing system.

～Activity-based costing system for financial institutions～

Our proprietary activity-based costing system for financial institutions makes it easier to understand cost
structures that had been difficult to grasp by allowing users to freely set the information to be analyzed.
The lightweight system configuration does not require database software and can be operated by a single
PC. Installation of the dedicated ABC costing calculation engine developed by I-NET allows high-speed
calculations to be performed, and big data extracted from mission-critical systems can also be imported.
・Experienced in creating cost calculation models

・We can provide high-quality, fast systems

We have staff experienced in building cost calculation
models (rules for allocating expenses required fortargeted business activities and products) and canprovide a one-stop service from model construction tosystem construction.

We provide systems that incorporate a dedicated ABC costing
calculation engine with a proven track record. Excel can beused for model management and the analysis of costcalculations, eliminating the need to introduce new businessintelligence tools for analysis.

・Used by 23 firms, being adopted by regional banks

・Looking to expand into other industries, such as water departments

Shizuoka Bank, a major regional bank, decided to
introduce the system in September. It has been
adopted by major regional banks, as well as at
second-tier regional banks, labor banks, and special
financial institutions.
See our October 6 press release here:⇒©2020 I-NET CORP.All rights reserved

We aim to introduce costing systems to a variety of clients byleveraging our experience in constructing systems for many
types of industries.
*In general, such systems are often used in the financial,logistics, and medical industries, and have recently often been
introduced at water departments to increase cost transparency.

www.inet.co.jp

25

Strengthening the space development businessPrivate companies are becoming increasingly active in the space industry,suggesting it is poised to become a large market. I-NET is stepping up efforts
in this field, building on its 40-plus years of expertise.
【Trends in the space business】
The space industry has traditionally been
dominated by governments that have invested
huge amounts into national space agencies, but
private companies with no experience in spacebusiness are now entering the field. Technologicaladvancements have enabled the development of
low-cost small satellites, which are becoming
mainstream. We expect this to become a large
market in the future.

【I-NET's expertise】
We have over 40 years ofexperience in satellite
development, starting from ourwork on the meteorologicalsatellite Himawari No.1 in 1977.
I-NET is one of the few players
in the industry, meaning we
receive requests forcooperation on satellite(C)JAXA
development from mostprominent space start-ups.
（Himawari No.1）©2020 I-NET CORP.All rights reserved【Promising artificial satellite businesses】
１．Small satellite constellation business
Use a large number of small satellites to provide:① Internet connection from anywhere on Earth② Satellite images of all regions of the globe

２．Space debris removal business
Create a safe environment for spaceshipnavigation
Remove debris that is becoming a growing threat

３．Satellite data use business
Analyze space-related data such as images andlocation information, and apply it in other fields➡I-NET has been steadily laying the
groundwork for all three business
opportunities
www.inet.co.jp

26

Strengthening the space development business: Three key steps

②

③
④
⑤
⑥

Actively hiring former
employees of large firms witha long history in spacedevelopment
Shifting staff from IoT andother development
departments to the spacebusiness
Promoting alliances withbusiness partners
Considering M&A of spacerelated companies
Recruiting from major national
universities that are joint
research partners
Hiring work-ready technicalcollege personnel through newchannels① We invested ahead of procurement of
the firm's E series, becoming the only
shareholder as a satellite-related
business.
② We have been strengthening our
relationship since the company wasestablished and are already collaboratingon the following projects.

Service field
Satellite onboard
equipment

Academic
research institutes

Ground station /operation
Data center
Data analysis

Participatingcompanies
Genesia Corporation

Tokyo Institute ofTechnology

Satellite bus

Oceanography /aquaculture
Vegetation /agriculture

Developmentof debrisremovalsatellite©2020 I-NET CORP.All rights reserved

A team of four major national
universities led by the Tokyo Instituteof Technology and private companies
including I-NET were chosen for the
JAXA Innovation No. 3 project, which isscheduled to launch in 2022.

Diiway Space
Corporation

Tohoku University
I-NET
University of Tokyo
Information Technology
CenterNagoya University

UmitronMakeup of team spanning space to ground①

Astroscale Holdings is a pioneer in thefield of space debris removal and isleading the field in terms of development.
We have built the following relationshipwith the firm and plan to expand thebusiness globally.

3 Satellite data businessSpace

Many prominent space start-ups haveasked I-NET to help with thedevelopment of small satellites. We
are taking the following steps tosecure adequate human resources tomeet demand.

2 Space debris removal
business

Ground1 Small satellite
constellation business

I-NET's role:
Satellite system design, test support
Satellite operation (operation design, operation)
Cloud environment to promote project
Provide IT infrastructure for satellite data

Ground station
operations

www.inet.co.jp

I-NET is not only involved in thedevelopment and operation of satellites.
We also aim to establish a satellite databusiness in collaboration with ourmainstay data center and cloudbusinesses.

27Topics: Management response to COVID-19 pandemic
Item
Business,
services

Status of initiatives
・Establish a portal providing tools to support telework(Supporting the introduction of remote desktops, business chat app,
online conference system, file-sharing services)
・System support projects for the new normal gradually becoming more
active(Projects to support building e-commerce site business related toautomobile supplies; moves to promote cashless systems at financial
institutions)・Use the Internet or other methods as appropriate for meetings inside

Customerinteractions

EventsStaff

and outside the company
・Refrain from business meals with clients, limit the number of people thatcan meet in one place
・Continuing stable operations of data centers and BPO business thatreceives customer data

・For a certain period, stop holding seminars or participating in exhibitions

・Start holding new online seminars
・Continue conducting hiring activities, such as information sessions andinterviews, over the Internet

・Implement work-from-home or staggered working hours as required
・Record daily activities to facilitate a rapid review of staff activity if needed
・Employees continue to work in good health©2020 I-NET CORP.All rights reserved

www.inet.co.jp

28

4．Dividend Policy©2020 I-NET CORP.All rights reserved

www.inet.co.jp

29

Dividend Policy
Interim
中間

50.0《Dividend Policy》
Continue with stabledividends while retaining
earnings to prepare
for future capital demand

Year-end
期末

Dividend payout rate
配当性向

(Unit: yen, %)

50.0%

45.0

45.0%

40.0

40.0%

35.0

35.0%

30.0

30.0%

25.0
20.0
15.0
10.0
5.0
0.0

18.0

19.0

20.0

15.0

17.0

15.0

17.0

18.0

19.0

20.0

15/3

16/3

17/3

18/3

19/3

21.5

24.0

25.0%
20.0%

21.5

22.0

15.0%
10.0%
5.0%

20/3

21/3
（予）
*We carried out a stock split on October 1, 2016, but actual dividends (estimates) are noted
here (without adjusting for the impact of the stock split).

0.0%

Plans for annual dividends per share (ninth straight year of dividend increases planned)
Fiscal year ended
March 2019

Fiscal year ended
March 2020

Fiscal year ending
March 2021

40.0 yen

43.0 yen

46.0 yenInterim (20.0 yen)
Year-end (20.0 yen)Interim (21.5 yen)
Year-end (21.5 yen)Interim (22.0yen)
Year-end (24.0yen)*April 2021 will be the 50th anniversary since founding. We plan to raise our dividend and also pay
a special end-of-year commemorative dividend of ¥2 as a thank you to our shareholders.
©2020 I-NET CORP.All rights reserved

www.inet.co.jp

30

5．Appendix©2020 I-NET CORP.All rights reserved

www.inet.co.jp

31Initiatives in Medium-termManagement Plan
Business strategy plan
Investment strategy plan
ESG initiative plan
Status of initiatives through September 2020
Please see our home page for details of the medium-term management
plan announced in May 2019.
https://www.inet.co.jp/ir/policy/mid-goal.html#contents©2020 I-NET CORP.All rights reserved

www.inet.co.jp

32

Role of Medium-Term Management Plan

Higher corporate
value

Expandedbusiness scale

Business strategy plan
Investment strategy plan

Toward further
growthESG initiative plan

50 billion
yen in net
sales

33.2 billion
yen in net
sales

2019

2021

Medium-termManagement Plan

©2020 I-NET CORP.All rights reserved

2024

20XX

Next Medium-termManagement Plan

www.inet.co.jp

33

Management strategies

Strengthen ties
with customers

Enter new markets
and service areas

Protect

OffenseEnsure that customer comes first
Proposals with added value

Develop products and services with growthpotential

Invest in human resources©2020 I-NET CORP.All rights reserved

www.inet.co.jp34

3. Initiatives in Mediumterm Management Plan
Business strategy plan
Investment strategy plan
ESG initiative plan
Status of initiatives through September 2020
Please see our home page for details of the medium-term management
plan announced in May 2019.
https://www.inet.co.jp/ir/policy/mid-goal.html#contents©2020 I-NET CORP.All rights reserved

www.inet.co.jp

35

Management strategy: Partner strategy and channel strategy＋

Cloud service
partners

Expansion ofservice line-up

Sales partners

Expansion ofsales channels＝

OEM partners

Expansion ofbusiness fields

Systemdevelopment
partners

Expansion of
top line©2020 I-NET CORP.All rights reserved

www.inet.co.jp

36

Management strategy: Cloud partner strategy
As a platform provider,©2020 I-NET CORP.All rights reserved

www.inet.co.jp

RworksAktio

UNIRITANEOJAPAN(inet)…
様(inet)

Drone platform

Cloud services

SS

様

様

(inet)

PaperlessStudio Japanwe will combine cloud infrastructure (NGEC) and applications as a service.

37

Management strategy: Platform strategy

Satellites

DronesAI

Cloud applications

edge

Antenna groundstations

fog

edge
fog

edge

edge

fog

edge

IoT devices

fog

fog

fog

edge

RobotsEvery kind of data flows to data centers©2020 I-NET CORP.All rights reserved

www.inet.co.jp38

Business strategy plan:
Initiatives toward a digital transformation ①•

Set up a telework promotion contact point and provide remote desktops and other
tools

•
•

Expand the fields of data science and AI business
Augment AI cloud services to mid-sized and small- and medium-sizedcompanies and strengthen sales•

Strengthen and adjust financial packages tailored to change needs in financial market,
monitor future market trends, revise financial products, expand system scope, and plan andconsider package updates based on cloud compatibility•

Utilize our expertise in sales management operations for the distribution industry todifferentiate ourselves from competing companies
Modernize AS400 legacy assets
Pursue BIM and CIM businesses for the construction industry
Pursue infrastructure inspection services for local governments (Kimitsu
model)••••

Regional broadband wireless access (BWA) initiatives, high-speed data
communications helping to improve local public services©2020 I-NET CORP.All rights reserved

www.inet.co.jp39

3. Initiatives in Mediumterm Management Plan
Business strategy plan
Investment strategy plan
ESG initiative plan
Status of initiatives through September 2020
Please see our home page for details of the medium-term management
plan announced in May 2019.
https://www.inet.co.jp/ir/policy/mid-goal.html#contents©2020 I-NET CORP.All rights reserved

www.inet.co.jp

40

Progress with investment strategy plan ①•

Development of a next-generation cloud platform thattakes cloud infrastructure (NGEC) to the next level•

Upgrade data center facilities, increase floor space, andsystematically carry out expansions•

Expansion of data analysis and data science business•

Implement measures to achieve targets for number of
new graduate hires, strengthen hiring of mid-career hires
who can immediately be effective•

Reinforce education and training programs and theirsubstance to enhance human resource capacity at each
level

•

Build business foundation in Southeast Asia (plans to set
up a business base)•

Aim to expand services with areas of expertise andcutting-edge technology©2020 I-NET CORP.All rights reserved

www.inet.co.jp

41

Progress with investment strategy plan ②
Capital investment•

Capital investment focused on data centers, which are the coreof our services•

As customers use data centers, we regularly update facilities,
and recently have augmented facilities in line with large-scale
projects.
Trends in capital investment（Million yen）
6,000
5,000
4,000
3,000
2,000
1,000

Capital investment (other than DC updrades)

Capital investment (DC upgrades)

Amortization
0 costs

DC and cloud sales

16'/3※Estimate17'/3©2020 I-NET CORP.All rights reserved

18'/3

19'/3

20'/3

www.inet.co.jp

42

Progress with investment strategy plan ③
Human resource investments

New graduate hires

Trends in number of new graduate
employees for I-NET on parent basis

Number of new graduate
hires increases every year

Entry in
April 2015

Entry in
April 2016

Entry in
April 2017

Entry in
April 2018

Entry in
April 2019

Entry in
April 2020

Plannedhires forApril 2021

３３

４２

４２

４４

４８

６４

８０

Mid-career hires
Hire professionals with cuttingedge IT skills such as data
analysis and professionals who
can immediately be effective inthe space development field, an
area on which we are currently
focusing©2020 I-NET CORP.All rights reserved

Human resource training
Training for each step along the career path
New hire training→ Six-month new hire training

Annual training for young employees→ Training for each class of newhires is provided annually

Training for managers→ Management training for newly
appointed managers

Management Academy→ Special training to train future
managers

Many other theme-specific training programs, such as training to strengthen
sales and diversity training

www.inet.co.jp43

3. Initiatives in Mediumterm Management Plan
Business strategy plan
Investment strategy plan
ESG initiative plan
Status of initiatives through September 2020
Please see our home page for details of the medium-term management
plan announced in May 2019.
https://www.inet.co.jp/ir/policy/mid-goal.html#contents©2020 I-NET CORP.All rights reserved

www.inet.co.jp

44Strengthening governanceReinforcing system for fair and transparent corporate management

Shift to company with an Audit andSupervisory Committee
Strengthen supervisory functions of board of directors• Audit and Supervisory Committee members, who
supervise the job execution of board members,
become members of the board of directors• Audit and Supervisory Committee members havethe right to vote in board of directors meetings

Establishment of Nominating andCompensation Committee
Strengthen independence and transparency, as well as
accountability, of the functions of board of directors
meetings• Responsible for appointing and removing managers
and nominating candidates for director positions• Compensation for managers and directors, and other©2020 I-NET CORP.All rights reserved

www.inet.co.jp

Strengthensupervisory
function

Enhancetransparency
45

Recognized as “White 500” organization in Certified Health & Productivity
Management Organization Recognition Program in 2020

I-NET recognized as a “White 500” organization in Certified Health &Productivity Management Organization Recognition Program in 2020 forsecond straight year
We aim for ongoing improvements to corporate value and will go evenfurther in supporting efforts to promote employee health.

～Declaration of HealthFocused Management～
Based on the philosophy that employees are
the greatest asset in management, I-NET
recognizes employee health from amanagement perspective. We believe that themental and physical health of employees is
the source of sustainable corporate value
improvement. Therefore, we will actively
promote health management that supports
employee health.

For details, see here→

https://www.inet.co.jp/sustainability/
social/health-management.html©2020 I-NET CORP.All rights reserved

www.inet.co.jp

46

ESG and social contribution activities by I-NET’s regional
development foundation
In January 2020, I-NET’s regional development foundation was authorized as apublic interest corporation. By carrying out long-term and stable activities andsupporting activities that contribute to the development of a better local
community, we are implementing ESG activities and giving back to society.
I-NET's regional development foundation, The foundation carries out the following projects
a public interest corporationin the Kanagawa Prefecture region.

Link for foundation’s website
https://www.inet-found.or.jp/©2020 I-NET CORP.All rights reserved①

Projects to support and provide subsidies or toassess and award the sustainability and activities oforganizations that carry out activities related to thefollowing activities• Sound training and education of children andyouth• Sound mental and physical development throughsports• Improve public sanitation• Environmental conservation and infrastructure• Sound development of local community②

Projects needed to achieve other objectives withpublic benefit

I-NET’s regional development foundation was established by
Noriyoshi Ikeda, I-NET’s founder and chairman of the board, toprovide support and advice on sustainable activities fororganizations carrying out activities contributing to society in
Kanagawa Prefecture (activities aimed at providing public benefit).

www.inet.co.jp

47

ESG Initiative Plans ①

Plans as of the release in May 2019

Based on our belief that employees are management’s greatest asset, I-NET
believes that the physical and mental health of employees is the key to raising
corporate value sustainably, and pursues health management accordingly. In orderto create a working environment in which all employees can exercise theirstrengths with peace of mind, we pursue reforms to work styles.

White 500

Eruboshi

Kurumin

Recognized in February 2019

Recognized in October 2018

Recognized in May 2012

METI, MHLW, other

Recognized by Minister of
Health, Labour and Welfare

Recognized by Minister of
Health, Labour and Welfare(Key initiatives related to female
participation in the workplace)(Key initiatives related tochildrearing)(Key initiatives related to health)• Declaration of health-focusedmanagement• Ensuring that employees receive regularcheckups, and follow up based on
checkup results• Industrial doctors provided and healthsupport office set up• Encourage employees to receive mental
health tests• Ratio of women: 23.0%• Women account for 40% or more of
new graduate hires• Formation of women’s committee• Formation of Diversity Promotion Office• Appointment of female directors (twoout of 11)• Kanagawa’s Women’s Participation
Support Group©2020 I-NET CORP.All rights reserved

www.inet.co.jp• Expansion of shorter work hour program(until child is in third grade ofelementary school)• Establishment of days on which all
employees leave work on time
• Maternity leave for spouse• Days off for memorials• Work from home program• Job return program48

ESG Initiative Plans ②
Promotion of employment for disabled people

Plans as of the release in May 2019

Growth of “Cheering on Working Moms”
website to support childrearing andwomen’s participation in the workplace

I-NET Data Service

Cheering on Working Moms

A special subsidiary was established (authorized by
Minister of Health, Labour and Welfare) with theaim of providing a place in which disabled people
can thrive and receive support in living
independently.

Support Team for Working Mothers was set up and is
run as a search site for childcare centers that uses
open data for Yokohama City.

■Primary operations
Data entry
Scanning

Light work
Preparation ofbusiness cards, etc.

https://kosodate.inet.co.jp/©2020 I-NET CORP.All rights reserved

www.inet.co.jp

49Initiatives in Medium-termManagement Plan
Earnings plans
Plans as of the release in May 2019©2020 I-NET CORP.All rights reserved

www.inet.co.jp

50Medium-term Earnings Forecasts (consolidated)
Forecasts released in May 2019

(Unit: Million yen)
Information processing

Product sales

System development(Operating
income）
3,000

Operating income（Net Sales）
30,0002,500
25,0002,000

20,0001,500

15,00010,0005,000

14,081

13,937

14,34816,39518,080

9,607

9,784

10,052

10,092

10,880

1,000
500

0

0

'16/3

'17/3

'18/3

'19/3

'20/3

'21/3
（plan）'22/3（plan）（plan）Net sales

24,434

24,617

25,61527,591

30,00031,50033,200Operatingincome

1,918

1,992

2,081

2,345

2,450

2,580

2,730

ROE

9.4%

10.7%

10.4%

10.9%

10.9%

11.0%

11.1%

©2020 I-NET CORP.All rights reserved

www.inet.co.jp

51

These materials were prepared on the basis of
information that is currently available, and actual
performance may differ from forecasts due to arange of factors. We ask for your understanding.
All services and products listed in these materials
are registered trademarks or trademarks of I-NET
or other companies.

Please contact the company with any inquiries.
Corporate Strategy and Investor Relations
TEL
045-682-0806
E-Mail contact_ir@inet.co.jp
URL
https://www.inet.co.jp©2020 I-NET CORP.All rights reserved

www.inet.co.jp

52