Second Quarter of Fiscal 2021 Ending March 31, 2022
Financial Results Briefing

November 11, 2021

TDC SOFT Inc.
© 2021 TDC SOFT Inc.

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1. Overview of Consolidated Financial Results for
the Second Quarter of Fiscal 2021 Ending March 2022
2. Status of Key Measures for the Second Quarter ofFiscal 2021 Ending March 2022
3. Outlook for the Fiscal Year Ending March 2022
Hiroyoshi Kobayashi, President and Representative Director

4. Details of Financial Results for the Second Quarter ofFiscal 2021 Ending March 2022
Tsuyoshi Ogaki, Director & General Manager-Administration© 2021 TDC SOFT Inc.

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Important Points in the Second Quarter of
Fiscal 2021 Ending March 2022

Performance during the Quarter• Each business field has made solid progress since the beginning of the period
reaching net sales of ¥14,661 million, an 11.2％ increase year on year
• Improved profitability through the expansion of the next-generation SI business, a high-value-added field, and reductions inselling, general and administrative (SG&A) expenses have secured a 47.5% year-on-year increase to ¥1,588 million
in operating profit

TopicsMedium-Term Management Plan “Shift to the Smart SI” 04/2019 – 03/2022• The next-generation SI business overall has grown to make up 16.2% of net sales (+5.0% YOY)
• The agile development business has achieved steady growth of 36.6% YOY in net sales• The information system security business has formed an alliance with Internet Research Institute,
Inc. in the field of cyber security© 2021 TDC SOFT Inc.

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Overview of Consolidated
Financial Results for theSecond Quarter ofFiscal 2021 Ending March 2022

© 2021 TDC SOFT Inc.

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Overview of Consolidated Financial Resultsfor the Second Quarter of Fiscal 2021 Ending March 2022
Q2 FY
(Millions of Yen) Ending March2022

Profit MarginYOY

Q2 FY Ended
March 2021

Net sales

14,661-+11.2%

13,186Gross profit

3,090

21.1%

+15.0%

2,687

Operating profit

1,588

10.8%

+47.5%

1,077

Ordinary profit

1,647

11.2%

+48.8%

1,107

Quarterly
net income

1,117

7.6%

+49.9%

745【Highlights】•The impact of the COVID-19 pandemic on our businesses has been limited, and each business field has made solid progress•Promoting proactive investment in key strategic fields such as agile development and information system security, the nextgeneration SI business has progressed ahead of plan•

Operating profit margin has improved due to reductions in SG&A expenses© 2021 TDC SOFT Inc.

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Overview of Net Sales by Field
Second Quarter of Fiscal 2020
Ended March 2021

¥13,186 million

Second Quarter of Fiscal 2021
Ending March 2022

¥14,661 million

1,115(8.5%)
1,873(12.8%)

1,698(12.9%)

4,047(27.6%)

3,816(28.9%)
6,555(49.7%)

IT consulting & services
IT solutions for public corporations© 2021 TDC SOFT Inc.

1,891(12.9%)

6,849(46.7%)

IT solutions for financial services
Platform solutions
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Highlights of Each Field
IT Consulting & Services+69.5% YOY

1,891

1,900

1,115

1,425

Provides solution services to promote customer’s DX, including IT strategy andsystemization concept planning, technical consulting, educational services, in-housecloud applications, BI/DWH, ERP, CRM, etc.

950

IT service management and cloud management services are driving
expansion in this field, which is expected to continue growing.

475
0

Q2 FY Ended 03/2021

Q2 FY Ending 03/2022

IT Solutions for Financial Services+4.5% YOY
6,900

6,555

6,849

6,425

The impact of project suspensions and delays from the previous fiscal
year have resolved, with insurance- and credit-related systemdevelopment projects seeing solid progress.

5,950
5,475
5,000

Provides integrated IT solutions for the financial industry, including systemization
planning, design, development, maintenance, etc.

Q2 FY Ended 03/2021© 2021 TDC SOFT Inc.

Q2 FY Ending 03/2022

Highlights of Each Field
IT Solutions for Public Corporations+6.1% YOY
4,100
3,825

3,816

4,047

3,550
3,275
3,000

Q2 FY Ended 03/2021

Q2 FY Ending 03/2022

Provides integrated IT solutions for the distribution, manufacturing, service, andpublic sectors, including systemization planning, design, development, maintenance, etc.

Solid progress on development projects for thetransportation, telecommunications, and energy industries.
Transportation in particular is seeing an increase in upstream DX
projects and future growth is expected.

Platform Solutions+10.3% YOY

1,873

1,900
1,825
1,750

Solid progress in cloud-related infrastructure construction
projects. Firm growth is expected to continue due to expanding
demand.

1,698

1,675
1,600

Q2 FY Ended 03/2021© 2021 TDC SOFT Inc.

Provides environmental design, construction, operational support, network
product development, network integration, etc. for IT infrastructure

Q2 FY Ending 03/2022

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Status of Key Measures for theSecond Quarter of Fiscal 2021 EndingMarch 2022

© 2021 TDC SOFT Inc.

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Medium-Term Management Plan
VisionKey Strategies
Performance
Targets

Medium-Term Management Plan

ManagementPolicy© 2021 TDC SOFT Inc.

Evolve into a next-generation system integration (“SI”) business that captures the latent needs ofthe market and adapts to digital technologies and new trends

Aim to become a next-generation system
integrator
Pursue high-value-added SI services

Promote SI model reforms

Promote business expansion and higher revenue in
key strategic fields

Promote the development of both high-productivity andhigh-quality SI processes

Agile developme
nt businessInformation
system security
business

Improve efficiency inquality assurance processes

Achieve net sales of ¥29 billion during fiscal 2021 ending March 2022
Expand the next-generation SI business' share of net sales to around 20%

Achieve final-year targets of the Medium-Term Management Plan10Initiatives to Become a Next-Generation System Integrator

Overview of the Next-Generation SI Business
The next-generation SI business isgrowing steadily
Expanded to 16.2% of net sales(+61.6％ YOY, 19.1% above plan)

Profitability improved on a consolidated basis
owing to growth in this business and other factors

Gross profit margin
Operating profit margin
Ordinary profit margin© 2021 TDC SOFT Inc.

21.1% (+0.7% YOY)
10.8% (+2.6% YOY)
11.2% (+2.8% YOY)

Changes in Next-Generation SI Business
Sales Ratio and Net Sales(millions of yen)

2,400

2,38220%

1,800

16.2%

15%

1,200
60001,474846

11.2%5%6.5%
Q2 FY Ended March 2020

10%

Q2 FY Ended March 2021 Q2 FY Ending March 2022

0%11

Initiatives to Become a Next-Generation System Integrator

TOPICS: Key Strategic Field – Agile Development BusinessNet sales in the agile development business have grown steadily (36.6% YOY)in line with increased DX demand from customers

Agile Development Business Sales
776

800
675
550

518

568

425300© 2021 TDC SOFT Inc.

Q2 FY Ended 03/2020

Q2 FY Ended 03/2021

Q2 FY Ending 03/2022

12Initiatives to Become a Next-Generation System Integrator

TOPICS: Key Strategic Field – Agile Development Business
Basic agreement reached on business partnershipwith Ricksoft Co., Ltd.
Through this business partnership with Ricksoft, we aim to develop and offer services
that allow Japanese enterprises to introduce SAFe® more effectively and in a shorteramount of time to achieve their business transformation.

We will combine our SAFe® services with the products sold by Ricksoft tooffer new services through the agile development business.
© 2021 TDC SOFT Inc.

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Initiatives to Become a Next-Generation System Integrator

TOPICS: Key Strategic Field – Information System Security Business
Formed an alliance with Internet Research Institute, Inc.
in the field of cyber security
We are jointly examining new services and business models
to help alleviate cyber security-related concerns.

We aim to add value through the synergistic effects of the alliance between us toprovide our customers with meaningful services.

© 2021 TDC SOFT Inc.

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Outlook for theFiscal Year Ending March 2022

© 2021 TDC SOFT Inc.

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Outlook for the Fiscal year Ending March 2022
Key Measures for FY Ending March 2022
●Promotion of proactive investment
Promote proactive investment to solidify foothold for further growth in light ofsolid business conditions
Invest in key strategic fields such as agile development and information system security
Conduct research for 5G-related business development
Strengthen sales promotion of in-house products (StyleFlow)© 2021 TDC SOFT Inc.

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Financial Results Forecasts for the Full Fiscal YearEnding March 2022

(Millions of Yen)

Financial Results& Dividend Forecast for FY
Ending March 2022

Profit Margin

YOY

Results for FY
Ended March 2021

Net sales

29,000-+6.3%

27,292

Operating profit

2,750

9.5%

+16.6%

2,358

Ordinary profit

2,810

9.7%

+9.6%

2,564

Net income

1,880

5.9%

+9.9%

1,711

Net incomeper share¥78.01-+9.8%¥71.03

Dividendforecast¥26-+8.3%¥24© 2021 TDC SOFT Inc.

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Details of Financial Results for
the Second Quarter of Fiscal
2021 Ending March 2022

© 2021 TDC SOFT Inc.

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• Financial Statements• Net Sales Analysis• Orders Received/Backlog• Operating Profit Analysis© 2021 TDC SOFT Inc.

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Financial Statements
Statement of Income(Millions of Yen)

Net sales
Labor expenses
Outsourcing expenses
Other expenses
In-process increase/decreaseCost of sales
Gross profit
Selling, generaland administrative expenses

Operating profit
Non-operating income/expenses
Ordinary profit
Profit before income
taxes
Quarterly net income
EPS© 2021 TDC SOFT Inc.

Q2 FYEnding March
2022

Q2 FY
Ended March
2021

Balance Sheet
Change14,661
5,737
5,551
362
(80)
11,570
3,090
1,502
1,588
58

13,186
5,191
5,070
383
(146)
10,498
2,687
1,610
1,077
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+11.2%+10.5%+9.5%−5.7%+45.2%+10.2%+15.0%−6.7%+47.5%+96.7%

1,647
1,647

1,107
1,107

+48.8%+48.8%

1,117
46.39

745
30.94

+49.9%+49.9%(Millions of Yen)

End of Q2
FY EndingMarch 2022

19,137
Current assets
15,475
Non-current assets
3,661
Total liabilities
4,843
Current liabilities
4,605
Non237current liabilities
Total net assets
14,293
Total liabilities and net assets 19,137
Owners’ equity ratio
74.7%
Net assets per share592.76
Total assets

End ofFY Ended Ma
rch 2021

18,652
15,081
3,570
4,989
4,757
231
13,66318,652
73.3%
566.99Change+2.6%
+2.6%
+2.5%
−2.9%−3.2%
+2.6%
+4.6%
+2.6%
+4.5%

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Financial Statements
Statement of Cash Flows

Balance of cash etc. at the beginning of the period
Profit before income taxes
Depreciation and amortization

0680
10,077

Notes and accounts receivable - trade
Inventories−468

Notes and accounts payable - trade

10,290

CF from
investing activities
CF fromfinancing activities

Accounts payable - otherAccrued expenses
Accrued consumption taxes
Other
Income taxes

CF from
operating activities

CF from operating activities
Purchase of property, plant and equipment
Purchase of investment securities
Proceeds of dividend distribution from partnerships
Guarantee deposits
Interest and dividend income
Other
CF from investing activities
Increase (decrease) in short-term loans payable
Dividend payment

Balance of cash etc.
at the beginning of the period

Balance of cash etc.
at the end of the periodOther
CF from financing activities
Balance of cash etc. at the end of the period© 2021 TDC SOFT Inc.

10,077379
1,647
42(90)(80)
99(45)
(103)
(153)
(57)
(580)
680
(7)
(6)
8(17)
21
10
124(587)(4)(468)
10,2907
21Overview of Sales by Customer Industry(millions of yen)

Q2 FY Ended March 2020

Q2 FY Ended March 2021

Q2 FY Ending March 2022
3,898
3,260

2,850
2,593

2,513

2,048 2,034 2,062

3,123

2,850

2,525
2,237
1,924

1,501

1,640

1,284

1,223

Banking

CreditInsurance

ManufacturingNon-manufacturing

1,398

Public agencies
and organizations

Finance© 2021 TDC SOFT Inc.

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Status of Orders Received/Backlog(millions of yen)Order received

13,796

Backlog

6,551

Net sales© 2021 TDC SOFT Inc.

13,6006,600

13,4156,65013,128

13,186Q2 FY Ended March 2020

Q2 FY Ended March 2021

14,5007,000

15,421

7,793

14,661Q2 FY Ending March 2022

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Operating Profit Analysis(millions of yen)
Gross profit+403

SG&Aexpenses

-107

1,588
<Gross Profit>

1,077

Increased due to improved
profitability through higher net sales andhigher value-added business.

<SG&A Expenses>
Personnel and training costs decreased
due to restricted hiring of new graduates.

Q2 FY Ended March 2021

© 2021 TDC SOFT Inc.

Q2 FY Ending March 2022

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TDC SOFT Inc.
https://www.tdc.co.jp/*Note on this document:
The matters related to the forecasts of the TDC SOFT Group in thisdocument have been determined based on currently available informationand may change due to uncertain factors inherent in forecasts and/orchanges in the situation surrounding business operation going forward.

© 2021 TDC SOFT Inc.

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TDC SOFT Inc.
https://www.tdc.co.jp/© 2021 TDC SOFT Inc.

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