Shift to the Smart SI

TSE Prime
Securities code: 4687

Fiscal Year Ended March 31, 2022
Financial Results Briefing
May 24, 2022

TDC SOFT Inc.

© 2022 TDC SOFT Inc.

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1

Overview of Consolidated Financial Results for the Fiscal Year Ended March 31, 2022

２

Status of Key Measures for the Fiscal Year Ended March 31, 2022

３

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

４

Outlook for the Fiscal Year Ending March 31, 2023

Hiroyoshi Kobayashi, President and Representative Director

５

Details of Financial Results for the Fiscal Year Ended March 31, 2022
Tsuyoshi Ogaki, Director and Executive Officer in charge of Administration© 2022 TDC SOFT Inc.

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Important Points in the Fiscal Year Ended March 31, 2022

Performance during the Fiscal Year Ended March 31, 2022
● All business fields made solid progress reaching net sales of ¥30,925 million, a 13.3% increase year on year.
● Secured ¥2,967 million in operating profit, a 25.8% increase year on year. Achieved the Medium-Term Management
Plan performance targets.
● Proactively promoted further forward-looking investment in light of robust business conditions.

Topics● Status of Next-Generation SI Business
Steadily expanding primarily in key strategic fields.
Net sales has grown 60% year on year to ¥5,390 million and accounted for 17.4% of net sales, up 5.1 percentage points.
●

Established the Medium-Term Management Plan “Shift to the Smart SI Plus” (FY2022-FY2024)
Maintains the same fundamental concept of the previous Medium-Term Management Plan with the addition of a new core
strategy to “expand our business domain”© 2022 TDC SOFT Inc.

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1
Overview of Consolidated Financial Results
for the Fiscal Year Ended March 31, 2022

© 2022 TDC SOFT Inc.

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１

Overview ofConsolidated
Financial Results

Overview of Consolidated Financial Results for theFiscal Year Ended March 31, 2022
FY Ended March2022

Profit Margin

Net sales

30,925-+13.3%27,292Gross profit

6,423

20.8%

+19.0%

5,398

Operating profit

2,967

9.6%

+25.8%

2,358

Ordinary profit

3,082

10.0%

+20.2%

2,564

Net income

2,069

6.7%

+20.9%

1,711(Millions of Yen)YOY

FY Ended March2021[Highlights]● Project postponements and other issues that had occurred in the previous term havecollectively turned around since the beginning of the fiscal year, and all business fields madesolid progress for the term.
● Our businesses are steadily providing greater value-added services, and we have proactively
promoted further forward-looking investment.
● While we made downward revisions to our business targets of the Medium-Term
Management Plan at the beginning of the fiscal year in light of the severity of the COVID-19© 2022 TDC SOFT Inc. pandemic, we achieved all of our original targets.

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１

Overview ofFinancial
Results

Highlights of Each Field

IT Consulting & Services+57.7% YOY
4,550
3,900
3,250
2,600
1,950
1,300
650
03,877and systemization concept planning, technical consulting, educational
services, in-house cloud applications, BI/DWH, ERP, CRM, etc.

2,458

03/2021

Provides solution services to promote customers’ DX, including IT strategy

03/2022IT service management and cloud managed servicerelated projects thrived during the year. Expansion
driven by the trend toward DX.

IT Solutions for Financial Services+8.4% YOY
16,00013,25013,27614,393

10,5007,750
5,000© 2022 TDC SOFT Inc.

03/2021

03/2022

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

The previous fiscal year saw projects suspended orpostponed due to COVID-19, but the situation improved overthe fiscal year and credit-related system development
projects made solid progress in particular.

１Overview ofFinancialResults

Highlights of Each Field

IT Solutions for Public Corporations+10.7% YOY
9,500
8,750
8,000
7,250
6,500
5,750
5,000

8,795
7,945

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

03/2021

03/2022

Solid progress on development projects forthe transportation and telecommunications
sectors.

Platform Solutions+6.8% YOY
4,025
3,620
3,215
2,810
2,405
2,000

3,612

03/2021© 2022 TDC SOFT Inc.

3,858

03/2022

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

Solid progress on projects to build cloud-related
infrastructure.
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１

Overview ofFinancialResults

Overview of Net Sales by Field
FY Ended March 31, 2021
¥27,292 million

FY Ended March 31, 2022
¥30,925 million

2,458(9.0%)

3,877(12.5%)

3,612(13.2%)

7,945(29.1%)

8,795(28.4%)
13,276(48.7%)

IT Consulting & Services
IT Solutions for Public Corporations© 2022 TDC SOFT Inc.

3,858
(12.5%)

14,393(46.6%)

IT Solutions for Financial Services
Platform Solutions

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２
Status of Key Measures for the Fiscal Year
Ended March 31, 2022

© 2022 TDC SOFT Inc.

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２

Status of Key
Measures

Create High-Value-Added SI Services

Overview of the Next-Generation SI Business
The next-generation SI businessis steadily growing.
The business has grown to make up 17.4% of
net sales (112% of the planned figure), driven by
agile development and cloud-related fields.

This business growth coupled withcost cutting initiatives have increased
profitability on a consolidated basis.
Gross profit margin
20.8% (+1.0% YOY)
Operating profit margin 9.6% (+1.0% YOY)
Ordinary profit margin 10.0% (+0.6% YOY)
© 2022 TDC SOFT Inc.

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

6,000

5,390

4,500

17%
3,362
12%

3,000
1,500

15%
10%

1,886661

20%

7%5%

3%
FY Ended0 March2019

FY Ended
March 2020

FY Ended
March 2021

FY Ended
March 2022

0%10２

Status of KeyMeasures

Create High-Value-Added SI Services

TOPICS: Key Strategic Field – Agile Development BusinessWe continued to focus on agile development from the previous FY toenhance our services as it is essential to achieving DX.
We reached a basic agreement with
Ricksoft Co., Ltd. on a business
partnership.

We aim to provide new services bycombining our SAFe® services
with the products sold byRicksoft.
© 2022 TDC SOFT Inc.

Number of Agile-Related Engineers
Approx. 5-fold increase over 4 years
300
250
200
150
100500261

194
10250
03/2019

03/2020

03/2021

03/2022

Certified SAFe Program Consultants
Certified Scrum Developers
Engineers with experience in agile development projects
11２

Status of Key
Measures

Create High-Value-Added SI Services

TOPICS: Key Strategic Field – Agile Development BusinessNet sales in the agile development business havegrown 5-fold over 4 years accompanying
increased DX demand from customers
Agile Development Business Sales

Approx. 5x growth
1625
1300
975
650
325
01,523
1,256

812
330
03/2019© 2022 TDC SOFT Inc.

03/2020

03/2021

03/202212

２

Status of Key
Measures

Create High-Value-Added SI Services

TOPICS: Key Strategic Field – Information System Security BusinessWe have strengthened our efforts to provide greater added value,
including through the addition of new services.
We have formed an alliance with Internet
Research Institute, Inc. in the field of cybersecurity.

Expanded our security
diagnostic services

We aim to add value through the synergistic
effects of the alliance and provide ourcustomers with meaningful services.

© 2022 TDC SOFT Inc.

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２

Status of Key
Measures

Support SI Model Reforms

Improvement of quality standards for our services
We have worked to improve the quality standards of our services by encouraging theshared use of highly-skilled talent among other measures.

Price control
We have utilized a pricelist and promoted administrative controls and initiatives that
focus on deviations from the standard pricing.

Elimination of troublemaking projects
We have introduced a system to evaluate project performance and worked to eliminate
troublemaking projects.
Down over

03/2021© 2022 TDC SOFT Inc.

30% YOY

03/2022

Number of Projects with Lower ProfitMargins than Projected14２Status of KeyMeasures

Promote Proactive Forward-Looking Investment

Increased investment intechnology

Investment in branding and marketing

Investment in elementaltechnologies● We have invested in marketing to increase sales ofour in-house products● We have aggressively promoted investment into
corporate branding to secure human resources+28.7% YOY

03/2021+¥266 million

03/2022
03/2021

03/2022

Advertising & Publicity Expenses© 2022 TDC SOFT Inc.

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３
New Medium-Term Management Plan
“Shift to the Smart SI Plus”(FY2022~FY2024)© 2022 TDC SOFT Inc.

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３

Medium-TermManagementPlanMedium-Term Management Policy
Medium-Term Management Plan
Management Policy

Medium-Term Management Plan
Management Objectives

FY Ending March 2025
Performance Targets
ConsolidatedSales
The TDC SOFT Group will contribute to“Realizing a Smarter World (Society)”by providing high-value-added IT services
based on the potential needs of the market
as well as society.

© 2022 TDC SOFT Inc.

¥40 billion

Consolidated

Operating Profit 10%
Margin17

３Medium-Term
ManagementPlan

Key Strategies

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-added
integration services based on the potential
needs of society and our customers.

Create high-valueadded SI services© 2022 TDC SOFT Inc.

KeyStrategies

We will use innovative
approaches to develop an SI
process designed to ensure highproductivity and high quality.

Support SI model
reforms18

３

Medium-Term
ManagementPlan

Key Strategy – Expand Our Business Domain

SI Business Expand our next-generation SI business Increase our business volume through managed services in
our SI business such as maintenance and upkeep

ConsultingBusinessWe are aiming to accumulate knowledge and develop methodologies for ournext business expansion.
 Further expand our existing DX/IT consulting and SAFe consulting services
 Enhance and expand our technical education services

Service & Product
Sales Business Expand sales of new in-house products that leverage upon ouraccumulated knowledge
 Strengthen our marketing function to sell products and services thatcapture user needs and potential markets© 2022 TDC SOFT Inc.

19３Medium-Term
Management
Plan

Key Measures

Secure HumanResources Promote aggressive recruitment
 Promote human resource development (ability to hit the groundrunning, focus on high-value-added areas)

Promote Group/
M&A Strategies

 Promote Group/M&A strategies to acquire functions andcharacteristics not possessed by the Company to expand into new
business domains

Strengthen
Corporate Base Strengthen the use of data and other corporate functions to enableenhanced strategic decision making

Increase
Investment forBusiness Expansion

 Promote investment to acquire elemental technologies expected tobecome mainstream moving forward and the capabilities needed toexpand our business domain as the trend towards DX picks up speed.

© 2022 TDC SOFT Inc.

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３Medium-Term
ManagementPlanKey Measures●Increase investment for business expansion
We are investing in the following 7 areas in FY2022.

We are targeting further expansion in new businesses and high-value-added fields
We will invest in technologies relate to front-end frameworks
such as React, Angular and Vue in an aim to train ourengineers and develop products using these technologies.

Front-EndFrameworks

AgileCloudNative© 2022 TDC SOFT Inc.

We aim to build out a managed services business thatprovides operation and maintenance functions throughthe use of cloud-native applications, automation, andother sources of efficiency.

Automation &Managed Services

Data Analytics
Platform

Information
Security
UXD

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４Outlook for the Fiscal YearEnding March 31, 2023

© 2022 TDC SOFT Inc.

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03/2023

４ Outlook

Outlook for the Fiscal Year Ending March 31, 2023 (By Field)

IT Consulting & Services+18.6% YOY
5,200

3,877

4,200
3,200

4,600

Demand for IT service management and cloud
managed service-related projects is expected tocontinue and maintain a growth trajectory.

2,458

2,200
1,200
03/2021

03/2022

03/2023

IT Solutions for Financial Services+3.2% YOY
16,00013,276

14,39
3

14,85
003/2021

03/2022

03/2023

13,25010,5007,750
5,000© 2022 TDC SOFT Inc.

We expect to see solid progress in our
existing domains and increased revenue fromexpansion in the SoE and SoI domains.

03/2023

４ Outlook

Outlook for the Fiscal Year Ending March 31, 2023 (By Field)

IT Solutions for Public Corporations+8.6% YOY
10,000
9,000
8,000
7,000
6,000
5,000

7,945

03/20218,79503/2022

9,550

Growth is expected in transportation andmanufacturing sectors.
Projects supporting customers’ IT planningare expected to thrive amidst demand for DX.

03/2023

Platform Solutions+3.7% YOY
4,250
3,800
3,350
2,900
2,450
2,000

3,612

03/2021© 2022 TDC SOFT Inc.

3,858

4,00003/2022

03/2023

Steady growth is expected due to increasing
demand for cloud-related services.

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03/2023

４ Outlook

Outlook for the Fiscal Year Ending March 31, 2023

Financial Results and Dividend Forecast(Millions ofYen)

Q2(Cumulative)

Full Fiscal
YearNet SalesOperating
ProfitOrdinary
ProfitNet Income

15,6001,340
1,365915(+6.4%) (-15.6%) (-17.1%) (-18.1%)
33,000(+6.7%)

3,065(+3.3%)

3,135(+1.7%)

2,100(+1.5%)

EPS(Yen)

37.95

DividendForecast(Yen)Interim15.00
Year-end

87.10

30.00
Total: 45.00● We will promote aggressive investment measures based on the medium-term plan. We expect
revenue growth to absorb the investment costs over the full fiscal year and forecast an increasein sales and profit.
● We plan to pay out a commemorative dividend of ¥15 per share as an interim dividend as an
expression of gratitude toward our shareholders for their continued support.
25© 2022 TDC SOFT Inc.

５Details of Financial Results for the Fiscal
Year Ended March 31, 2022

© 2022 TDC SOFT Inc.

26

●Financial Statements●Net Sales Analysis●Orders Received/Backlog●Operating Profit Analysis© 2022 TDC SOFT Inc.

27

of 03/2022
５ Details
Financial Results

Financial Statements

Statement of Income(Millions of Yen)
Net sales
Labor expenses
Outsourcing expenses
Other expenses
In-process increase/decrease

Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating profit
Non-operating
income/expenses
Ordinary profit
Profit before income
taxes
Net income
EPS© 2022 TDC SOFT Inc.

FY Ended
March 2022

Balance SheetFY Ended
March 2021

Change30,925
11,725
11,909790
75
24,501
6,423
3,456

27,292
10,988
10,151782(27)
21,894
5,398
3,039+13.3%+6.7%+17.3%+1.0%‐+11.9%+19.0%+13.7%

2,967
114

2,358
205

+25.8%-44.1%

3,082
3,082

2,564
2,564

+20.2%+20.2%

2,069
85.82

1,711
71.03

+20.9%+20.8%(Millions of Yen)
Total assets
Current assets
Non-current
assetsTotal liabilities
Current liabilities
Non-current
liabilities
Total net assets
Total liabilities and net
assetsOwners’ equity ratio
Net assets per share

End of FY
End of FY
Ended March
Ended
2022
March 2021

Change21,072
17,3683,704

18,652
15,081
3,570+13.0%+15.2%
+3.7%

5,817
5,540
276

4,989
4,757
231

+16.6%+16.5%+19.4%

15,25521,072

13,66318,652+11.6%+13.0%

72.4%
632.6473.3%
566.99+11.6%

28

of 03/2022
５ Details
Financial Results

Financial Statements
Balance of cash etc. at thebeginning of the period
Profit before income taxes

Statement of Cash Flows
2,174
10,077(2)(547)

11,702

CF from
investing activities

Depreciation and amortization
Notes and accounts receivable trade
Notes and accounts payable trade
Inventories
Accounts payable - otherCF fromfinancing activities

Accrued expenses
Other

CF from
operating activities

Income taxes
CF from operating activities
Purchase of property, plant andequipment
Interest and dividend incomeOther
CF from investing activities
Increase (decrease) in short-termloans payable
Dividend payment

Balance of cash etc.
at the beginning of the period© 2022 TDC SOFT Inc.

Balance of cash etc.
at the end of the periodOther
CF from financing activities
Balance of cash etc. at the end ofthe period

10,0773,082
83(643)254

75
364
93(101)(1,034)
2,174
(59)
63(6)
(2)
49(587)(8)(547)
11,70229

of 03/2022
５ Details
Financial Results

Overview of Sales by Customer Industry(millions of yen)

FY Ended March 2020

6,197

5,161
4,970
4,446 4,382
3,895

BankingCredit

FY Ended March 2021

FY Ended March 2022
8,260
6,853
6,362

6,234

5,046
4,945
4,027
3,350
2,683

Insurance

Manufacturing

3,277
3,010
2,907

NonManufacturing

Public agencies
and organizations

Finance© 2022 TDC SOFT Inc.

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Status of Orders Received/Backlogof 03/2022
５ Details
Financial Results(millions of yen)Orders received 13,796

14,575

15,908

7,793

7,472

13,415

7,430

6,650

7,067

14,667

13,186

14,106

14,661

16,263

H2

H1

H2

H1

H2

Backlog of orders

6,551

6,380

Net sales

13,128H1FY Ended March 2020
© 2022 TDC SOFT Inc.

14,565

15,4216,500

FY Ended March 2021

FY Ended March 202231

of 03/2022
５ Details
Financial Results

Operating Profit Analysis(millions of yen)

Grossprofit+1,025

SG&A
expenses

+417

2,967
2,358

<Gross Profit>+ Profit grew due to an increase in sales+ Profitability improved due to a greater
proportion of sales from the next-generation SIbusiness<SG&A Expenses>- Decreased due to fewer new employees+ Proactively invested in business expansion

FY Ended March 2021

© 2022 TDC SOFT Inc.

FY Ended March 202232

Shift to the Smart SI

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.

© 2022 TDC SOFT Inc.

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