TRANSLATION FOR REFERENCE ONLYFY2017Q2
Consolidated Financial Results
Aplix Corporation
14th August 2017

Disclaimer: This English translation is for reference purposes only. In theevent of any discrepancy between the Japanese original and this English
translation, the Japanese original shall prevail. We assume noresponsibility for this translation or for direct, indirect or any other form ofdamage arising from the translation.

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

1

FY2017Q2 P/L Statement（Consolidated）
Revenues

OperatingProfit

Recurring
ProfitNet income
attributable toparentcompanyshareholders

FY16Q2
Actual (A)739-590-608-618

FY17Q2
Actual (B)434-201-218-707

Change（B－A）-305+389+390-89

Change（％）-41.3－－－(Million Yen)

 Operating Loss improved +389mil. Yen by continuous cost reduction.
 Net loss decreased by -89mil. Yen due to extra loss of 463mil. Yen ofstock transfer loss of 3 publishing companies.

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

2

FY2017Q2 Revenues by Segment
Mil. Yen

600（Million Yen）

500
400

FY16FY17Q2Q2

Change300

Technology8282±０%200Publishing3510－（Total Revenues）

433

82-81.０%

1000Q1

Q2

Q3

Q4Q1

2016

TechnologyPublishing

Q22017493

 Technology Division sales was same level of Q2FY16
Compare to Q1FY17, sales was increased due to sales promotion by newmanagement.
*Publishing business related Stock of Aplix IP Publishing, Flex Comix and HOLPSHUPPAN, Publishing has been all transferred on 31st Mar 2017.

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

3FY2017Q2 Operating Cost by Segment
Mil. Yen

1200（Million Yen）

1000
800
600
400
2000Q1Q2Q3Q4Q1

2016

TechnologyPublishing

FY17Q2Q2ChangeTechnology239

97 -59.4%

Publishing

3020Company

112

63 -43.7%（Total Cost）

655

160 -75.6%

Q22017493

FY16－Company

 Due to stock transfer of 3 publishing companies, operating cost wasreduced in Q2FY17
 In addition, cost reduction e.g. office rent reduce and fix cost wasanother factor
Operating Cost was reduced YoY -75.6%
Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

4

FY17Q2 Received Orders and Orders Backlog
Mil. Yen

200（Million Yen）
150

10050FY16FY17Q2

Q2

ChangeReceived Orders

166

95-42.8%

Orders Backlog

10511-89.5％

0
2016Q2
Received Orders

2017Q2Orders Backlog

 Received Orders and Orders Backlog were decreased YoY 42.8% andYoY -89.5%
 The decrease was derived from big software development project
was accounted in last year

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

5

FY2017 Forecast（Consolidated）（Million Yen）

Revenues

OperatingProfit

FY2016（A）

1,526-929

FY2017
Forecast (B)

1,054

12

Change (B－A)-472+941-30.9%－Change (％)

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

6

Growth Strategy

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

7

FY17Q2 Results
FY17Q2 Results Drastic Cost reduction so far : Shutdown of Patentdivision, SoC division, stock transfer of publishingbusiness and rent cost down.
We have finished “surgery”
 Next Growth Strategy
１．Expansion Revenues on IoT Solutions business
２．Re-organize internal corporate structure tomonetize IoT solution

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

8

Growth Strategy: 1. Expansion Revenues
Expansion Revenues utilizing Aplix competence① Embedded Software Technology② Advanced Project Experiment in USA③ Development & Operation of Large Scale IoT Platform

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

9

Growth Strategy: 1. Expansion Revenues① Embedded Software Technology

 IoT requires “embedded”: Aplix has been developing
over 30 years of embedded software development
e.g. car navigation, cellular phone, consumerelectronics. We have fundamental competence forembedded technology
 Current： Already shipped commercial products fromWater Purifier Solution（Franke, Aquasana) in US andJapanese Manufacturer Next：Expanding existing customer and launch a new
PoC with new customer
Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

10Growth Strategy: 1. Expansion Revenues② Advanced Project Experiment in USA

 Aplix continues to operate US sales and marketingover 10 years. We archived advanced projectexperiment e.g. Air purifier with Amazon Alexa(Guardian Technologies) and water filter shortage
notification (Aquasana) Current：Continues orders from water purifiervendors and expansion of Amazon Alexa solution inUS Next：Preparation for Amazon Alexa Japanese Service(currently not released yet)
Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

11

Growth Strategy: 1. Expansion Revenues③ Development & Operation of Large Scale IoT Platform Aplix has been developing & operating NESCAFEGOLDBLEND Barista i app & cloud service
 Current：Still developing and operating NESCAFEGOLDBLEND Barista-i service Next：Expanding another customer to utilize ourcompetence

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

12

Growth Strategy ２. Re-organization
 Background: new management team has been
started from April and re-organize internal structure
to provide better service to customer
1. Joint sales & development function：bothsales and development team face to customer
and propose better solution to customer
2. Corporate Officer：Appointed corporate officers
on firmware/server area, app development areaand sales area
3. Working Style：Introduction of remote working

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

13

Growth Strategy ２. Re-organization
 Appointed Corporate Officer＜Management Team＞
Representative DirectorKengo Nagahashi

Director of the Board

Kunihiro Ishiguro

Outside Director of the Board

Kozo Hiramatsu

Audit & Supervisory Board Member

Shinobu Nemoto

Outside Audit & Supervisory Board Member

Yoshio Nitta

Corporate Officer

Kengo Nagahashi

Corporate Officer

Kunihiro Ishiguro

Corporate Officer

Ken Takagi （Sales）

Corporate Officer

Takahiro Shirakawa（Server & Firmware）

Corporate Officer

Nobushige Yamada（App development）

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

14

Business Strategy

IoT Solution Business
Revenues＝ Region × Category
JapanBeaconServiceUSA

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

Revenue Share

15

Japan Business Strategy

BeaconProviding Location Beacon as MyBeacon®
Increase Price in Dec. 2016 (1,200Yen -> 2,500Yen)
Notification beacon is for Consumer Electronics

ServiceProviding App & Cloud solution
Retails： To meet demands by understanding customer
behavior using IoT Solution
Telematics：Tie up with Car Insurance company totrack driver’s situation

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

16

USA/EU Business Strategy
Aplix Corporation of America (California USA) providing IoT solutions mainlyfor USA and EU region

BeaconExpanding existing customer and new customer mainly
water purifier , air purifier and consumer electronics

Service

Water Purifier：Already shipment e.g. Aquasana and expandingsolutions to new customers

Pet and Air Purifier： Continues business from existing customers
e.g. OurPet’s, Guardian Technologies and expanding customers toadapt new technologies e.g. Alexa Skill on Amazon.com

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

17

Cost Reduction

Focus on IoT Solution Business Focusing on IoT solution business and transferring 3
publishing companies stock (Aplix IP Publishing, Flex Comixand HOLP SHUPPAN, Publishing) on 31st Mar 2017 and closed
oversea department excluding USA and also closedIntellectual Property division and Semiconductor division

Cost Reduction
 Drastic cost reduction for all fixed cost e.g. office rent andsubcontracted fees

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

18

BLE module shipment
Accumulated 420 thousands BLE modules shipment in June 2017
（Unit）
450,000
400,000
350,000
300,000

250,000
200,000
150,000
100,000
50,000201705201703

201701

201611

201609201607

201605

201603

201601201511

201509201507

201505201503

201501

201411

201409201407

201405201403

201401

201311

201309201307

201305201303

2013010Source: Company Data
BLE modules include JM Series MyBeacon Series and Others.
Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

19

Appendix

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

20

Corporate Overview
Company Name
Aplix Corporation

MarketTokyo Stock Exchange Mothers

Headquarter Address
2-20-9, Nishi-waseda, Shinjuku-ku, Tokyo
169-0051, Japan

Code
JP:3727

FoundedBusiness Services

February 22, 1986
Capital1,861 million yen (as of March 31, 2017）

IoT Solution(Security, Hardware, Software, Cloud)Group Company
Aplix Corporation of America

Revenue
1,526 million yen (Consolidated, As of Dec.
31, 2016)

Number of Employees
37 (Consolidated, as of June 30, 2017）

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

21

Corporate Overview
Management Team- Representative Director

Kengo Nagahashi- Director of the Board

Kunihiro Ishiguro- Outside Director of the Board

Kozo Hiramatsu- Audit & Supervisory Board Member

Shinobu Nemoto- Outside Audit & Supervisory Board Member

Yoshio Nitta- Outside Audit & Supervisory Board Member

Masato Yamada- Corporate Officer

Kengo Nagahashi- Corporate Officer

Kunihiro Ishiguro- Corporate Officer

Ken Takagi- Corporate Officer

Takahiro Shirakawa- Corporate Officer

Nobushige Yamada

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

22

Management Team

Kengo Nagahashi (Representative Director)

Received BA and MS from Keio University and Ph.D in Computer Sciencefrom the University of Tokyo. He experienced Visiting Researcher atComputer Laboratory in University of Cambridge UK and joined Nikko
Citigroup as a sell side analyst covering IT service software in 2006. Afterleaving Citigoup, he launched Future Bridge Partners Corporation andbecame Director CFO of Aplix from Mar. 2015 and Representative Directorfrom Feb. 2017 of Aplix.

Kunihiro Ishiguro (Director, CTO)

After graduating from Hokkaido University's Faculty of Agriculture, after
going through SRA Corporation by development of UNIX software,
operation of Internet routing control, realizing route control by open source
ware GNU Developed "Zebra". In October 1999, he founded IP Infusion in
the US in order to develop and sell "ZebOS" which is commercial software
based on "Zebra". "ZebOS" is adopted by routers and switch makers all overthe world. After working as CTO Director of ACCESS Co., Ltd., he became
CTO of Aplix from Apr. 2015 and Director from Mar. 2016.

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.

23

Aplix Corporation
http://www.aplix.co.jp/
Note: The materials are provided to share information about Aplix business activities, and it is not intended tosolicit investment in Aplix shares. While the materials may describe information such as forecasts related tofuture business performance, this information has been created based on the judgment of Aplix at the time thematerials were created.
As a result, Aplix offers no guarantee that the conditions described will come to pass, and any of theinformation described is subject to change without notice in the future.

Copyright © 2017 Aplix and/or its affiliates. All rights reserved.