Briefing on the Financial Results for
the Fiscal Year Ended March 31, 2021
May 11, 2021

TDC SOFT Inc.
© 2021 TDC SOFT Inc.

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1. Overview of Consolidated Financial Results for theFiscal Year Ended March 31, 2021
2. Status of the Key Measures for theFiscal Year Ended March 31, 202
3. Outlook for the Fiscal Year Ending March 31, 2022
Hiroyoshi Kobayashi, President and Representative Director

4. Details of Financial Results for the Fiscal Year Ended March 31, 202
Tsuyoshi Ogaki, Director & General Manager-Administration21	1	

© 2021 TDC SOFT Inc.

Important Points in the Fiscal Year Ended March 31, 2021

Results of the fiscal year ended March 31, 2021
• IT consulting and services and IT solutions for public corporations performed well.
However, due to the certain projects being postponed as a result of the COVID-19 pandemic,
net sales were 27,292 million yen, down 1.8% year on year.
• Profitability increased due to expanding the next-generation SI business, an area of high value added.
As a result, secured operating profit of 2,358 million yen, up 6.9% year on year.

Topics● Medium-term Management Plan “Shift to the Smart SI” 04/2019 – 03/2022
Creating high-value-added SI services
・Agile development business:

Sales were 1,256 million yen, approximately four times higher than two years ago

・Information system security business: Released new services aimed at needs of security market
Received orders for PoC projects aimed at SI services development utilizing local 5G

Supporting SI model reforms
・Strength of Company’s DX strategy has been highly evaluated and was the first in the industry to be recognized as a
“DX-certified operator” by the Ministry of Economy, Trade and Industry© 2021 TDC SOFT Inc.

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Overview of Consolidated
Financial Results for theFiscal Year Ended March 31, 2021

© 2021 TDC SOFT Inc.

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Overview of Financial Results
for the Fiscal Year Ended March 31, 2021
(unit: millions ofyen)

Fiscal year ended
March 31, 2021

Year-on-yearchangeProfit margin

Fiscal year ended
March 31, 2020

Net sales

27,292--1.8%

27,795Gross profit

5,398

19.8%

+2.3%

5,277

Operating profit

2,358

8.6%

+6.9%

2,206

Ordinary profit

2,564

9.4%

+13.2%

2,265

Net income

1,711

6.3%

+14.1%

1,500[Highlights]•COVID-19 pandemic impacted order activities by limiting face-to-face sales activities and causing postponements andcancellations of projects•

Net sales fell slightly year on year; however, DX-related projects in the IT consulting and services business performed well•

Operating profit margin increased due to adding high value to businesses based on medium-term management plan

© 2021 TDC SOFT Inc.

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Highlights of Each Field
IT Consulting & Services+91.0% YoY
2,600
1,950
1,300

2,458

1,28765002020.3

2021.3Developing IT strategies and information system concepts to facilitate customers’ DXprojects and provided solutions services, such as technology consulting, educationalservices, proprietary cloud applications, BI/DWH, ERP, CRM, and so on.

During this year, the Group made solid progress on projects
related to data analytics infrastructure including BI/DWH andETL. Experienced sudden growth from tailwinds of DX trends.

IT Solutions for Financial Services-15.1% YoY

16,00015,63013,25013,276

10,5007,750
5,000© 2021 TDC SOFT Inc.

2020.32021.3

Offered integrated IT solutions for the financial sector, including information system
concepts, design, development, and maintenance.

There was a steady stream of system development projects related toloyalty point cards while there was little activity in projects for
insurance businesses.
Field where impact of COVID-19 was most felt in project
postponements and cancellations.

Highlights by field
IT Solutions for Public Corporations+7.9% YoY
8,000
7,250

7,363

7,945

Offered integrated IT solutions for the logistics, manufacturing, and service industries
as well as the public sector, including information system concepts, design,development, and maintenance.

6,500
5,750
5,000

2020.32021.3Development projects for manufacturing and transportationindustries were steady.

Platform Solutions+2.8% YoY
3,620

3,514

3,612

3,215
2,810

Solid progress made on projects to build IT infrastructure fortelecommunication businesses and public agencies.

2,405
2,000
© 2021 TDC SOFT Inc.

Offered services that include configuring and developing IT infrastructure along withhelping with its operation, developing network products, and integrating networks.

2020.32021.37

Overview of Net Sales by Field
Fiscal year ended March 31, 2020

Fiscal year ended March 31, 2021

¥27,795 million¥27,292 million
1,287(4.6%)

3,514(12.6%)

15,630(56.3%)

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

3,612(13.2%)

7,945(29.1%)

7,363(26.5%)

2,458(9.0%)

13,276(48.7%)

IT solutions for nancial services
Platform solutions*We updated how we segment our businesses during the first quarter of the fiscal 2020 ended March 2021
based on the directions these businesses are taking.
The numbers for the previous fiscal year are calculated in line with the updated segments.

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Status of the Key Measures for theFiscal Year Ended March 31, 2021

© 2021 TDC SOFT Inc.

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Medium-term Management Plan
Evolve into a next-generation system integration (“SI”) business geared to digital technology andnew trends based on the potential needs of the market
VisionCreate high-value-added SI services
Key strategies

Medium-term Management Plan

Aim to become a next-generation system integrator

PerformanceGoals© 2021 TDC SOFT Inc.

Promoting business expansion in the key strategic
fields to pursue high revenue
Agile development
business

Support SI model reforms• M&A and promotion of alliances with other companies has
been well received;
Certified as “DX-certified operator”

Information systemsecurity business

Achieve net sales of ¥28.5 billion during fiscal 2021 ending March 2022
Expand high-value-added SI services so they will make up 20% of the net sales

10Initiatives to Become a Next-generation System Integrator

Overview of the Next-generation SI Business
The next-generation SI business issteadily growing
The business has grown to make up 12.3% of net sales(112% of the planned figure).

Sales Ratios and Net Sales of the Next-generation
SI Business over Recent Years(millions of yen)

4,000

3,362

3,000

15%

1,886

2,000
Gross profit margin
Operating profit margin
Ordinary profit margin© 2021 TDC SOFT Inc.

19.8% (+0.8% YOY)
8.6% (+0.7% YOY)
9.4% (+1.3% YOY)

1,000
020%

661

12.3%

6.8%

5%

2.5%
Fiscal year ended
March 31, 2019

Fiscal year ended
March 31, 202010%

Fiscal year ended
March 31, 2021

0%11Initiatives to Become a Next-generation System Integrator

TOPICS: Key Strategic Field Agile Development BusinessFrom last year, concentrated on agile development, which is required torealize DX, and strengthened services
1. Organizational/process reform support services

2. Agile development support services

Planning/consideration

Services design© 2021 TDC SOFT Inc.

Implementation/operation
DevOpsUsing large-scale agile framework with largest global
market share SAFe®, enhance organizational/process
reform consulting and educational services

Scrum development

12Initiatives to Become a Next-generation System Integrator

TOPICS: Key Strategic Field Agile Development Business
From last year, concentrated on agile development, which is required torealize DX, and strengthened services
1. Organizational/process reform support services

Number of Agile Development Engineers

Approximately 4x in three years
1942002. Agile development support services

Planning/consideration

Services design© 2021 TDC SOFT Inc.

Implementation/operation
DevOps

Scrum development

150
100

102
50

500

2019.32020.32021.3

Certified SAFe Program Consultants
Certified Scrum Developers
Engineers with experience in agile development projects 13

Initiatives to Become a Next-generation System Integrator

TOPICS: Key Strategic Field Agile Development BusinessAs customer DX demand grows, agile development business net sales to approximately 4x in three years
Drive creation of high added value through gross profit margin of approximately 7% higher than regular SIprojects

Sales from the Agile Development BusinessApproximately 4x 1,256

1300
975
650
3250© 2021 TDC SOFT Inc.

8123302019.32020.32021.314

Initiatives to Become a Next-generation System Integrator

TOPICS: Key Strategic Field Information System Security Business
Focus more on the initiatives to create high added value, such as adding new services
Released new services targeting needs of security market
To meet the growing social demand for remote work solutions, launched Tegata, a cloud-based● secure access service that uses the technology called “LTE over IP.”
Began offering cloud security diagnosis services utilizing CIS benchmarks, global best practices,● to respond to increased use of public cloud by companies.

Executed PoC projects looking toward the development of SI services that utilize local 5G
We work with LTE-X and a transportation company with whom we have formed capital/business alliances to execute
PoC projects that aim to acquire elemental technologies leading to local 5G. We continue and promote servicedevelopment in the runup to the wide use of local 5G.
© 2021 TDC SOFT Inc.

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Initiatives to Become a Next-generation System Integrator

TOPICS: Support SI Model Reforms
First in information services industry to be certified as a "DX-certified operator"
by the Ministry of Economy, Trade and Industry
On February 1, 2021, TDC Soft was the seventh company overall and the first in the information
services industry to be certified as a by the Ministry of Economy, Trade and Industry

Points of the Company that were recognized
Aptness of strategy in medium-term management plan and the organization structure to realize thisPromotion of businesses that are key to realizing DX, such as agile development business, etc.
Promotion of open innovation activities, such as M&A and business alliances with other companies, etc.
Research to improve the efficiency of quality assurance processes utilizing data in development projects© 2021 TDC SOFT Inc.

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Outlook for theFiscal Year Ending March 31, 2022

© 2021 TDC SOFT Inc.

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Outlook for the Fiscal Year Ending March 2022
Important initiatives for the fiscal year ending March 31, 2022
●Recovery of performance in IT solutions for financial services field• In the fiscal year ended March 31, 2021, the COVID-19 pandemic caused postponements and cancellations of projects, leading toa decrease in large-scale projects for SoR (general purpose systems)• Rebuild financial department and strengthen response to SoE and SoI areas in order to create high-value-added services
for customer needs

Financial systems businessheadquarters

Financial business design business headquarters(newly established)

Large-scale management
Solid systems development

Newest open technological capabilities are central
Respond to market changes in agile development

Systemrequirements

System of Record(compilation of information)

System of Engagement(strengthening ofcustomer touch points)

System of Insight(analysis and utilization of information)

Development
scope

Large

MediumMedium/Small© 2021 TDC SOFT Inc.

Value-addedHigh18

Outlook for the Fiscal Year Ending March 2022
Important initiatives for the fiscal year ending March 31, 2022
● Strengthen investments to expand businesses
As the trend of DX accelerates, in order to acquire the elemental technologies expected to become mainstream in the future andestablish a foothold in key strategic areas,
we developed an investment plan at least 1.6x higher from the fiscal year ended March 31, 2021

Aiming further expansion of new businesses and high-value-added fields

Agiledevelopmentbusiness© 2021 TDC SOFT Inc.

Information
systemsecuritybusiness

UI/UXContainer

Data analytics
infrastructure19Outlook for the Fiscal Year Ending March 2022 (by field)
IT Consulting & Services+15.9% YoY
3,000
2,250
1,500

2,458

2,850
Demand for data analytics infrastructure-related projects is
expected to continue, allowing for further growth1,28775002020.3

2021.32022.3

IT Solutions for Financial Services+4.7% YoY
16,00015,63013,25013,276

13,9002021.32022.3

10,5007,750
5,000

2020.3© 2021 TDC SOFT Inc.

Sales expected to grow due to booking postponed
projects and expanding SoE and SoI areas

Outlook for the Fiscal Year Ending March 2022 (by field)
IT Solutions for Public Corporations+0.7% YoY
8,000
7,250

7,363

7,945

8,000
Performance expected to be roughly equal to the fiscal year
ended March 31, 2021
as development projects for manufacturing andtransportation continue.

6,500
5,750
5,000

2020.32021.32022.3

Platform Solutions+3.8% YoY
3,800

3,514

3,612

3,750

3,350

IT infrastructure building projects for telecom operators andgovernmental agencies expected to continue; however,performance is expected to decline due to the conclusion ofcertain projects.

2,900
2,450
2,000

2020.3© 2021 TDC SOFT Inc.

2021.32022.321

Outlook for the Fiscal Year Ending March 2022
Earnings forecast and dividend forecast(unit: millionsof yen)

Net sales

Operating profit Ordinary profit

Net incomeEPS(yen)Dividendforecast(yen)Second quarter(cumulative)

13,500(+2.4%)

1,100(+2.1%)

1,120(+1.2%)

750(+0.6%)

31.12

0.00

Full year

28,500(+4.4%)

2,510(+6.4%)

2,570(+0.2%)

1,715(+0.2%)

71.17

24.00

● Considering changes to the external environment due to the impact of COVID-19, the full year sales
forecast was revised from ¥30 billion to ¥28.5 billion.
As a result, operating profit was revised from ¥2.7 billion to ¥2.51 billion.

© 2021 TDC SOFT Inc.

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Details of Financial Results for theFiscal Year Ended March 31, 2021

© 2021 TDC SOFT Inc.

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

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Financial Statements
Statement of Income

Balance Sheet

Fiscal year
ended March31, 2021

Fiscal year
ended March 31,
2020

27,292
10,988
10,151782(27)
21,894
5,398
3,039

27,795
10,22811,458845(14)22,5185,277
3,070

Operating profit
Non-operating income/expenses

2,358
205

2,206
+6.9%
58 +251.2%

Ordinary profit
Profit before income
taxes

2,564
2,564

2,265
2,265

+13.2%+13.2%Net income

1,711
71.03

1,500
62.29

+14.1%+14.0%(unit: millions of yen)

Net sales
Labor expenses
Outsourcing expenses
Other expenses
In-process increase/decrease

Cost of sales

Gross profit
Selling, general andadministrative expenses

EPS© 2021 TDC SOFT Inc.

Change-1.8%+7.4%-11.4%-7.4%-87.0%-2.8%+2.3%-1.0%(unit: millions of yen)

Fiscal year
ended March
31, 2021
Year-end

18,652Current assets
15,081
Non-current assets
3,570
Total liabilities
4,989
Current liabilities
4,757
Non-current liabilities
231
Total net assets
13,663
Total liabilities and net assets18,652
Owners’ equity ratio
73.3%
Net assets per share
566.99Total assets

Fiscal year
ended March
31, 2020
Year-end

16,652
13,463
3,188
4,544
4,347
197
12,107
16,65272.7%
502.43

Change+12.0%+12.0%+12.0%+9.8%+9.4%+17.5%+12.9%+12.0%+12.8%

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Financial Statements
Statement of Cash Flows

Balance of cash, etc. at the beginning of the period
Profit before income taxes

2,273

Depreciation and amortization

17Notes and accounts receivable-trade-594

Notes and accounts payable-trade

10,077

CF frominvesting activities

8,379

CF fromfinancing activities

Inventories
Accounts payable – otherAccrued expenses
Other
Income taxes

CF fromoperating activities

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

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

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

Dividend payment
Other
CF from financing activities
Balance of cash, etc. at the end of the period© 2021 TDC SOFT Inc.

8,379
2,564
86
93(82)
(27)
(66)
152
142
(589)
2,273
(26)
(106)
8958
(2)
17(587)(7)(594)
10,007726

Overview of Sales by Customer’s Business Category(millions of yen)

Fiscal year ended March 31, 2019

Fiscal year ended March 31, 2020

6,123
4,794
4,446
3,895

5,161
4,760
4,970

Fiscal year ended March 31, 2021

6,853

6,234

6,362
5,372

4,945
3,350

3,277

2,683
2,659

BankingCreditInsurance

Manufacturing2,883

Non-manufacturing

2,907

Public agencies
and organizations

Finance© 2021 TDC SOFT Inc.

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Orders Received; Backlog of Orders(millions of yen)Orders received

Backlog of orders

Net sales

12,937

6,498

13,622

5,804

13,700

6,000

6,551

6,380

14,1006,500

14,565
13,415

6,650

7,067

12,247

13,434

13,128

14,667

13,186

14,106

1H

2H

1H

2H

1H

2H

Fiscal year ended March 31, 2019
© 2021 TDC SOFT Inc.

13,796

14,575

Fiscal year ended March 31, 2020

Fiscal year ended March 31, 202128

Operating Profit Analysis(millions of yen)
Gross profit

+121

SG&A
expenses

-31

2,358

<Gross profit>
The profit increased owing to profitability
improved through higher net sales andthe high-value-added business.

2,206<SG&A expenses>
Despite decrease in costs incurred as aresult of the COVID-19 pandemic, these
expenses increased as we hired more
new employees and invested more in
human resource development.
Fiscal year ended March 31, 2020

© 2021 TDC SOFT Inc.

Fiscal year ended March 31, 2021

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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 this document
have been determined based on currently available information and may change
due to uncertain factors inherent in forecasts and/or changes 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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