TSE Prime
Securities code: 4687

Second Quarter of Fiscal 2023 Ending March 31, 2024
Financial Results Briefing

November 20, 2023

TDC SOFT Inc.

© 2023 TDC SOFT Inc.

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1

Overview of Consolidated Financial Results for
the Second Quarter of Fiscal 2023 Ending March 31, 2024

2

Status of Key Measures for the Second Quarter ofFiscal 2023 Ending March 31, 2024

3

Outlook for the Fiscal Year Ending March 2024
Hiroyoshi KobayashiPresident and Representative Director

4

Details of Financial Results for the Second Quarter of Fiscal 2023 Ending March 31, 2024

Tsuyoshi OgakiDirector and Executive Officer in charge of Administration© 2023 TDC SOFT Inc.

2

Important Points in the Second Quarter ofFiscal 2023 Ending March 2024

Performance during the Quarter● All business fields made solid progress, resulting in net sales of ¥18,856 million, a 12.3% increase year on year.
● Investments towards future business expansion, including the "Smart Work Concept" involving staff recruitment and training, as
well as relocating our headquarters, have been progressing as planned.

● Operating profit outperformed projections, resulting in operating profit of ¥1,858 million, a 0.4% increase year on year.

Topics● Status of Next-Generation SI BusinessNet sales have increased by 9.4% year on year to ¥4.30 billion, indicating healthy growth● Status of SI Model Reform
We have launched a new internal system, "PROJECT IQ," to enhance productivity and eliminate troubled projects● Head Office Relocation
We commenced operations at our new headquarters at Kudan-Kaikan Terrace on October 10th (Tuesday)© 2023 TDC SOFT Inc.

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１
Overview of Consolidated
Financial Results for
the Second Quarter of Fiscal 2023
Ending March 31, 2024

© 2023 TDC SOFT Inc.

4

1

Overview of Consolidated Financial Results for theSecond Quarter of Fiscal 2023 Ending March 31, 2024

(Millions of yen)

Q2 FYEnding
March 2024

Profit MarginYOY

Q2 FY Ending
March 2023

Net sales

18,856-+12.3%

16,793Gross profit

4,041

21.4%

+10.0%

3,674

Operating profit

1,858

9.9%

+0.4%

1,851

Ordinary profit

1,930

10.2%

+0.4%

1,922

Quarterly net
income attributableto owners of parent

1,310

7.0%

+0.7%

1,301

[Highlights]● Each business field performed well and net sales exceeded the plan, achieving an increase in revenue● Although costs associated with actively pursuing investments for future business growth have increased,

operating profit has exceeded expectations, resulting in increased earnings© 2023 TDC SOFT Inc.

51

Overview of
Financial
Results

Highlights of Each Field

IT Consulting & Services+27.1% YOY
3,800
3,150
2,500

3,218
2,531

1,850
1,200

2023.3 2Q

2024.3 2Q

Provides IT strategy and systemization concept planning to facilitate customers’
DX, as well as technical consulting, educational services, in-house cloud
applications, and solution services including business intelligence (BI)/datawarehousing (DWH) and enterprise resource planning (ERP)/customer
relationship management (CRM)

Solid progress on SaaS solution projects forenterprises

IT Solutions for Financial Services+9.9% YOY
9,000
8,000

7,766

8,533

7,000

Strong progress on development projects forbanking systems

6,000
5,000

2023.3 2Q© 2023 TDC SOFT Inc.

Provides integrated IT solutions for the financial sector,
including systemization planning, design, development, andmaintenance2024.3 2Q

1Overview ofFinancialResults

Highlights of Each Field

IT Solutions for Public Corporations+7.9% YOY
5,200
4,953
4,800
4,400

4,591

2023.3 2Q

Provides integrated IT solutions for the distribution, manufacturing, service,
and public sectors, including systemization planning, design, development,and maintenance

Solid progress on development projects for
public agencies and the transportation sector
2024.3 2Q

Platform Solutions+13.0% YOY
2,300
2,100

2,151
1,902

1,900

Solid progress on projects to build infrastructure
for the banking sector

1,700
1,500

Provides environmental design and construction of IT infrastructure, alongwith operational support, network product development, and networkintegration

2023.3 2Q© 2023 TDC SOFT Inc.

2024.3 2Q
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2
Status of Key Measures for theSecond Quarter of
Fiscal 2023 Ending March 31, 2024

© 2023 TDC SOFT Inc.

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2

Status ofKey Measures

Medium-Term Management Plan “Shift to the Smart SI Plus”

We will expand our business into new domains basedaround our existing SI business and acquire the capabilities
needed for new business models in an aim to become a new
type of next-generation system integrator.

Expand ourbusiness domain
We will tap into the latest elemental
technologies to expand our high-value-addedintegration services based on the potential
needs of society and our customers.

Create high-valueadded SI services© 2023 TDC SOFT Inc.

KeyStrategies

We will use innovative approaches
to develop an SI process designed
to ensure high productivity and highquality.

Support SI model
reforms
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2

Status ofKey Measures

Core Strategy 1: Create High-Value Added SI Services

Overview of the Next-Generation SI Business

Next-Generation SI Business Net Sales

The next-generation SI businesshas grown more than fivefold in the last
five years, driven by agile development
and cloud-related services,

5,000marking significant expansion
3,933

4,000
3,000

2,382
2,000

Next-Generation SI Business
Integration services that capture customers’ potential
needs, tap into the latest elemental technologies in agile
development and security, and provide high-value added
services while also reducing the costs to the user,including time as well as effort.

© 2023 TDC SOFT Inc.

4,301

1,000

1,47484602020.3 2Q 2021.3 2Q 2022.3 2Q 2023.3 2Q 2024.3 2Q(Millions of yen)

Net sales

102

Status ofKey Measures

Pursuing High-value-added SI Services (Status of Key
Strategic Fields)

Agile Development BusinessInformation System Security Business

Maintain net sales growth by securing andtraining engineers

Market is tending toward expansion,and further growth is expected throughout
the full fiscal year than in the previous period(Millions of yen)

1,600

Agile Development Business Sales
1,472
89% increase over three years

1,200

Information System Security Business Sales
14% increase

984776800
40002022.3 2Q© 2023 TDC SOFT Inc.

2023.3 2Q

2024.3 2Q

2023.3 2Q

2024.3 2Q
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2

Status ofKey Measures

Core Strategy 2: Support SI Model Reforms

Development of New Internal System, PROJECT IQ⚫ Boost productivity and eradicate troubled projects■ Project performance evaluation featureThis feature enables standardized quality assurance by quantitatively visualizing performance from atechnical standpoint, moving away from human-centric project reviews and order decisions based on
individual experience.

■ Staff skill assessment registration &search feature
By consolidating skill assessment informationof project personnel, this feature allows
for company-wide information searches based on
skill keywords and evaluations.

© 2023 TDC SOFT Inc.

122

Status ofKey Measures

Expand Our Business Domain

We will acquire the capabilities needed for new business models and expand ourbusiness into new domains based around our existing SI business domain.
TargetTarget Business 2

Target Business 3

Consulting Business

Service Sales Business

SI Business Commodity Domain

DX / IT consulting, solution
implementation consulting andeducation services

Selling products and services that meetuser needs and potential seeds

TargetBusinessbusiness(1) 1(Millions of yen)

(Millions of yen)

(Millions of yen)

380

400

400

+131%

450
400

+219%

350300300

Managed services and outsourcing
services in the SI business, includingmaintenance and upkeep

+552%

300
250

200200200
119150100

10010050000
2023.3 2Q© 2023 TDC SOFT Inc.

2024.3 2Q

2023.3 2Q

2024.3 2Q

2023.3 2Q

2024.3 2Q
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2

Status ofKey Measures

Promote Proactive Forward-Looking Investment+¥213 million

Increased investment by approximately ¥213
million YOY, promoting proactive forwardlooking investment
2022.3 2Q

2023.3 2Q

Investment Amount

Field of Investment (1)Increased investment
in technology
To further expand into new businessventures and high-value-added
areas, we have increased ourinvestments in elementaltechnologies.

© 2023 TDC SOFT Inc.

Field of Investment (2)Investments inhuman resources
We have also stepped up efforts tosecure more talent than in the previous
period, increasing new graduate hires
from 120 to 160. Additionally, we areproactively investing in training for rapid
skill development.

Field of Investment (3)Investments inthe Smart Work Concept
We have relocated our head office andestablished a new development hub, "Techno
Growth Center Shinjuku."
By increasing our investment in this facility, weaim to achieve both high productivity and highquality, targeting further growth.

143
Outlook for the Fiscal YearEnding March 2024

© 2023 TDC SOFT Inc.

153March 2024
Outlook

Outlook for the Fiscal Year Ending March 2024 (By Field)

IT Consulting & Services

IT Solutions for Financial Services+11.6% YOY
5,200
4,200

5,733

6,400

2023.32024.3

3,877

3,200
2,200

1,200
2022.3

IT Solutions for Public Corporations+5.0% YOY
18,75016,00013,25010,5007,750
5,000

14,393

15,90016,7002022.32023.32024.3

Platform Solutions+4.1% YOY
10,000
9,000
8,000
7,000
6,000
5,000

9,511
8,795

2022.3© 2023 TDC SOFT Inc.

9,900

2023.32024.3+4.9% YOY
4,700
4,250
3,800
3,350
2,900
2,450
2,000

3,858

2022.3

4,098

2023.34,300

2024.3

3

Outlook for the Fiscal Year Ending March 31, 2024

Financial Results and Dividend Forecast(Millions of yen)

Full Fiscal Year(YOY)

Net sales

37,300(+5.8%)

Operating profit Ordinary profit

3,550(+2.6%)

3,750(+1.0%)

Profitattributableto owners ofparent

2,510(+0.8%)

EPS(Yen)105.31Dividendforecast(Yen)
Year-end 40.00
Total 40.00● Business environment is expected to remain strong and net sales are expected to grow steadily.
● Continue to promote proactive forward-looking investment measures. In particular, although head office relocation costs areexpected to be an extraordinary factor for the current fiscal year, investment costs are expected to be absorbed for the full fiscal
year due to the effect of revenue growth, resulting in higher sales and profit.
● The dividend forecast is to increase the ordinary dividend by ¥10 to ¥40 per share.

© 2023 TDC SOFT Inc.

17４Details of Financial Resultsfor the Second Quarter of Fiscal 2023
Ending March 31, 2024

© 2023 TDC SOFT Inc.

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● Financial Statements● Net Sales Analysis● Orders Received/Backlog● Operating Profit Analysis© 2023 TDC SOFT Inc.

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4Financial Statements

Statement of Income(Millions of yen)
Net sales
Labor expenses
Outsourcing expenses
Other expenses
In-processincrease/decrease
Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating profit
Non-operating
income/expenses
Ordinary profit
Profit (loss) before
income taxes
Net income© 2023 TDC SOFT Inc.

Q2 FY EndingMarch 202418,856
6,359
8,084
502
130

Balance Sheet

Q2 FY Ended
March 2023

16,793
5,935
6,883
442
142

Change+12.3%+7.1%+17.5%+13.6%-7.9%

14,815
4,041
2,182

13,1193,674
1,823+12.9%+10.0%+19.7%

1,858
71

1,851
70

+0.4%
+1.5%

1,930
1,930

1,922
1,922

+0.4%
+0.4%

1,310

1,301

+0.7%

(Millions of yen)
Total assets
Current assets
Non-current
assetsTotal liabilities
Current liabilities
Non-currentliabilities
Total net assets
Total liabilities and net
assetsOwners’ equity ratio
Net assets per share

Q2 FY
End of FY
Ending MarchEnded2024
March 2023

Change23,206
19,094
4,112

22,771
18,827
3,704

+1.9%
+1.4%
+4.3%

5,950
5,644
305

5,817
5,540
276

-6.5%
-6.6%
-3.3%

17,20323,153

15,25521,072

+4.8%
+1.7%

74.1%
685.0272.1%
653.43

+4.8%

20

4

Financial Statements

Statement of Cash Flows
66674

CF from
investingactivities

12,010

CF from operating
activities

Balance of cash, etc. at thebeginning of the period
Profit (loss) before income taxes(586)

12,165CF from financing
activities(130)

Accrued expenses(364)

Other(22)

Income taxes(740)

CF from operating activities
Purchase of property, plant andequipment
Proceeds from sales of investment
securities
Interest and dividend income674

CF from investing activities
Net increase in short-term loans
payableDividend payment
Other© 2023 TDC SOFT Inc.

Balance of cash, etc.
at the end of the period

1,930

Inventories

Other

Balance of cash, etc.
at the beginning of the period

12,010

CF from financing activities
Balance of cash, etc. at the end ofthe period(62)9737(6)66147(726)

(7)
(586)
12,16521

4Overview of Sales by Customer Industry
Q2 FY Ended March 2022

Q2 FY Ended March 2023

Q2 FY Ending March 2024

4,868(Millions of yen)

4,648

3,749
3,343
2,548

3,504

2,850

3,898

2,525 2,648
2,404

2,285
1,924

2,062

Banking2,270

CreditInsurance

Manufacturing

1,975
1,404
1,398

Non-Manufacturing

Public agencies andorganizations

Finance© 2023 TDC SOFT Inc.

22

4

Status of Orders Received/Backlog

19,351
17,713
Orders received

15,421

Backlog of orders

7,793

Net sales

14,661

16,79318,856Q2 FY Ended
March 2022

Q2 FY Ended
March 2023

Q2 FY Ending
March 2024

(Millions of yen)
© 2023 TDC SOFT Inc.

8,400

8,831

8,700

8,585

23

4

Operating Profit Analysis(Millions of yen)

+366+358

1,858

1,851
Grossprofit<Gross profit>+ Profit grew due to an increase in sales

Sales
expenses<SG&A expenses>+ Expanding the hiring of new graduates+ Acquiring new technologies for theexpansion of next-generation SI business+ Relocating the headquarters as a part of the"Smart Work Concept"

Q2 FY Ended
March 2023

© 2023 TDC SOFT Inc.

Q2 FY Ending
March 202424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.

© 2023 TDC SOFT Inc.

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