Financial Results offiscal 2018
and
New medium-term
management plan
M a y
1 5 , 2 0 1 9
Sy s t e na C or po ra t i on

Security code:2317(First Section of the Tokyo Stock Exchange)

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

Company Outline【Company name】

Systena Corporation【Established】

March 1983
March

【Fiscal period】【Director】

Representative Director： Yoshichika Hemmi
and Chairman
Representative Director： Kenji Miuraand President： Takafumi Kai
Managing Director【Auditor】

Full-time Corporate Auditor(Outside Corporate Auditor)： Toru Hishida【Number of Employees】【Listed Monetary andCommodities Exchange】【Capital Stock】【Number of outstanding shares】

TSE 1st Section
1,513,750,000 Yen
112,720,000 shares

Managing Director： Shinichiro Kawachi

Director

Director

Outside Director ：Kouichi Ogawa： Makoto Taguchi： Hiroyuki Fujii

Director：Shingo Hemmi

Outside Director ：Yukio Suzuki

Outside Corporate ： Masao Sato､ Yoshihiro Nakamura､ Masao Hamano
Auditor

Non-Consolidated:2,565/Consolidated:3,430 (As of April 1, 2019)

Framework Design Business

Solution Design Business► Development of self-driving and in-vehicle systems► Development of various social infrastructure systems► Development smartphone and web applications► Embedded development using robotics, artificial intelligence and IoT► Comprehensive support for various systems and services fromplanning to design, development verification and operation► Development of mission-critical systems for the financial
sector (for the non-life insurance, life insurance, andbanking industries), the industrial sector, public sector
and other industries
Development of infrastructure systems►► Planning, development and offering of product introduction
service

IT Service Business

Solution Sales Business► Operation, maintenance, and monitoring of systems
and networks► Help desk and user support► IT-related products for corporate customers, suchas servers, computers, peripherals, and software► Provision of infrastructure building, virtualizationand other IT device/equipment-related services

Cloud Business►

Offering Systena’s own service, ‘Canbus.’‘Canbus.IoT’ , ‘Cloudstep’ , ‘Web Shelter’.

► Offering and supporting introduction of G
Suite, Microsoft Office 365, and othercloud services

Overseas Business

Investment & Incubation Business► Mobile communication-related technical► New business promoted by subsidiarysupport, development and verification
support , provision of various solutions► Trend research and commercialization of
the latest technologies and services

Internet of Things► Planning and management of social
games for mobile, smartphone, PC

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

1

Domestic Group Companies●Equity method affiliatedcompanies●Consolidated subsidiaries
ＰｒｏＶｉｓｉｏｎ Co., Ltd.
【Capital】 85,000,000 Yen【Ratio of capital contribution】
100％
Information terminal softwaredevelopment support, technicalsupport, Mobile device and webbased app quality verification,
System operation andmaintenance（Solution Design Business）（Framework Design Business）

Tokyoto Business
Service Co.,Ltd【Capital】 100,000,000 Yen【Ratio of capital contribution】

Systena 51％ TOKYO METROPOLITAN GOVERNMENT 49％

Data entry, Large volume output,
Mailing service, Secretariat agency,
Paperwork agency. Model company
for employing heavily disabled
persons incorporated jointly withTOKYO METROPOLITANGOVERNMENT.

（IT Service Business）

IDY Corporation

HIS HOLDINGS,INC.

【Capital】 65,000,000 Yen【Ratio of capital contribution】
76.7％【Capital】 95,000,000 Yen【Ratio of capital contribution】
25.36％

Design, manufacture and sales of
IoT/M2M router,LTE/3G/WiMAX2+/PHS router,
Wi-Fi board, Android terminal,
wireless digital signage, antennaetc

Development and sale of products(software) for computers andrelated equipment, Provision of
personnel including computerengineers and technicians.

（Solution Design Business）（Solution Design Business）

TBSOPERATION CO., LTD
GaYa Co.Ltd.
【Capital】 75,000,000 Yen【Ratio of capital contribution】
65％
Planning and management of social
games for mobile, smartphone, PC（Consumer Service Business）【Capital】 30,000,000 Yen【Ratio of capital contribution】
Tokyoto Business Service
Co.,Ltd 100％
Employment transition support andcontinuous employment support
based on the General Support for
Persons with Disabilities Act.
Employment training for persons
with disabilities.

（IT Service Business）

Internet of Things, Inc.
【Capital】 50,000,000 Yen【Ratio of capital contribution】
100％
Provide planning, development,
sales and other services in thefields of IoT, robots, Fintech andsocial media.

（Investment & Incubation
Business）

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

2

Overseas group companies● Consolidated subsidiaries

Systena America Inc.

●Equity method affiliatedcompanies

StrongKey, Inc.

【Capital】 19,000,000 US dollar【Ratio of capital contribution】
100％【Capital】 7,650,000 US dollars【Ratio of capital contribution】
28.84％

Mobile communications-related
technical support, development andverification support, Provision ofvarious solutions, Trend researchand commercialization of the latest
technologies and services

Development and sale of encryption
and authentication products（Overseas Business）

Systena Vietnam Co.,Ltd.
【Capital】 200,000 US dollar（4,200,000,000 Vietnamese
DONG）【Ratio of capital contribution】
100％

capitalcontribution ※ StrongAuth, Inc. changed

business name to StrongKey, Inc.

（Overseas Business）

ONE Tech, Inc.
【Capital】 6,000,000 US dollars【Ratio of capital contribution】
50％
Development and sale of IoT
solution packages

Software development, evaluationand verification, operation andmaintenance, IT Service in General.

（Solution Design Business）（Framework Design Business）（Overseas Business）

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

3

Financial Results offiscal 2018
（Consolidated）＜YoY＞

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

4

Financial Results （Consolidated）
Software development has continued to perform strongly, primarily in the areas ofInternet Business, e-Commerce, In-Vehicle Systems, IoT, Robotics and AI. The
business scope of IT services have expanded significantly. The Solution Sales Businessfocused on strong system integration business. For the Cloud Business, we actively
expanded the sales promotion of in-house commercial products. As a result of these
efforts, we achieved a significant increase in both revenue and profits.
（in millions of yens）

Fiscal 2018
Profit ratio

AmountNet
sales

Fiscal 2017

59,742

Amount－ 54,320

YoY rate

Profit ratio

Amount ofchangerate ofchange

－

5,422

10.0％

Operatingprofit

6,902 11.6％

5,170

9.5％

1,731

33.5％

Ordinary
profit

6,706 11.2％

5,147

9.5％

1,559

30.3％

Profitattributable toowners ofparent

4,584

3,542

6.5％

1,042

29.4％

7.7％

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

5

Point 1
Year-on-year

Solution Design Business

Net Sales 21,214 million yen +12.6％

Year-on-year

Operating Profit 3,666 million yen +37.9％

In the Solution Design Business, systems development displayed particularly strong performance in areas
such as in-vehicle systems and internet services. We also received many orders in growth areas such as
robotics and AI. Net sales increased by 12.6%, while operating profit increased by 37.9%.
Framework Design BusinessYear-on-year

Net Sales 5,294 million yen +15.1％

Operating Profit

841

million yen

Year-on-year+37.9％The Framework Design Business continued to perform well. In addition to receiving additional orders for
insurance systems from existing customers, we also saw an increase in orders for infrastructurebuilding projects, and our shift into new domains such as payment settlement also continued toprogress.
We increased the number of orders received for installation/deployment services for work process
automation tools by including inquiries for license sales and deployment support, with a focus on interdivisional collaboration and cooperative partnerships with product vendors.
IT Service Business

Net Sales 7,827 million yen

Year-on-year+11.7％

Year-on-year

Operating Profit 1,067 million yen +30.1％

 We stepped up sales efforts targeting customers’ profit-making divisions while high value-added on-off
projects such as Windows 10 migration for internal IT divisions and the associated smart device
adoption drove sales and profits.
 We used security-related products as a sales hook for developing relationships with new customers.
Solution Sales BusinessYear-on-year

Net Sales 24,032 million yen +5.0％

Year-on-year

Operating Profit 1,155 million yen +15.9％

 Systems-related projects have increased as a result of the end of support for the Windows7 andWindowsServer2008 operating systems.
 Leveraging workstyle reform as a key concept, we have stimulated demand primarily in the areas ofmobile, security and cloud computing.
 We expanded the number of high added-value one-stop service projects over what we had envisioned
in the roadmap in various areas including the introduction of IT equipment, infrastructure building,system development, maintenance and operation.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

6

Point 2
Cloud BusinessYear-on-year

Net Sales 1,129 million yen +16.1％

Operating Profit 197

million yen

Year-on-year+27.6％

 Orders received for the new Canbus. Service were brisk. We
conducted promotional activities through web to strengthen sales
promotion. We stimulated demand by employing the keywords Digitaltransformation(DX) and IT management to our advantage.
 Due to migrating groupware to the cloud as a part of workstyle reform,
we enjoyed strong sales of Cloudstep.

Overseas BusinessYear-on-year

Net Sales 120 million yen +66.8％

compared toprevious period

Operating Profit ▲31 million yen +141million yen

 We posted advertisements in magazines to drive sales ofStrongKey’s security services in Japan.
 We received orders for IoT business development from major
Japanese-owned automotive parts manufacturers in a joint effort
with One Tech.
 We received orders for IoT and software development frommultiple Japanese-run corporations utilizing offshore developmentin Vietnam.
 The above efforts enabled us to achieve positive monthly profits forseveral months.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

7

Sales by Segment（Consolidated）＜YoY rate＞（in millions of yens）

Fiscal 2018
Sales distribution
ratio

AmountSolution
DesignFiscal 2017

YoY rate

Sales distribution
ratio

AmountAmount ofrate of changechange21,21435.5％

18,833

34.7％

2,380

12.6％

Framework
Design

5,294

8.9％

4,600

8.5％

694

15.1％

IT Service

7,827

13.1％

7,010

12.9％

817

11.7％

Solution
Sales

24,03240.2％

22,885

42.1％

1,147

5.0％

Cloud

1,129

1.9％

972

1.8％

156

16.1％

Consumer
Service

397

0.7％

501

0.9％

▲103

▲20.6％

Overseas

120

0.2％

72

0.1％

48

66.8％

Investment
Incubation

―

―

5

0.0％

▲5

―

Adjustment

▲272

▲0.5％

▲559

▲1.0％

287

―

Total

59,742100.0％

54,320100.0％

5,422

10.0％

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

8

Operating profit by Segment（Consolidated）＜YoY rate＞（in millions of yens）

Fiscal 2018

Fiscal 2017

YoY rate

AmountProfit ratio

AmountProfit ratio

Solution
DesignFramework
DesignAmount ofchangerate ofchange

3,666

17.3％

2,657

14.1％

1,008

37.9%

841

15.9％

662

14.4％

178

27.0％

IT Service

1,067

13.6％

820

11.7％

247

30.1％

Solution
Sales

1,155

4.8％

997

4.4％

158

15.9％

197

17.5％

155

15.9％

42

27.6％

Consumer
Service

8

2.0％

65

13.0％

Overseas

▲31

―

▲172

―

141

―

Investment
Incubation

▲3

―

▲19

―

16

―

Adjustment

―

―

5

―

▲5

―

6,902

11.6％

5,170

9.5％

1,731

33.5％

Cloud

Total

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

▲56 ▲86.5％

9

Composition of Net Sales and Operating Profit by Segment

Cloud

Consumer
Service

Net sales¥59,742mil

0.7%

Overseas

1.9%

0.2%

Solution
Design35.5%

Solution
Sales

Operating profit¥6,902mil
Cloud

0.1%

2.9%

Solution
Sales

16.7%

Solution
DesignIT Service

15.5%

40.2%
Framework
DesignIT Service
8.9%

13.1%
Investment & Incubation—
Adjustment▲0.5%

Consumer
Service

53.1%

Framework
Design12.2%

Overseas▲0.4％
Investment & Incubation ▲0.1％
Adjustment－%

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

10

Achievement status of FourYear Medium-Term plan
（Fiscal 2015～Fiscal 2018）

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

11

Achievement status of Four-Year Medium-Term Plan
Strategies(1) Autonomous driving(2) Smart cities(3) Robotics(4) IoT solutions

We will focus management
resources on the fields expected
to experience the most growthover the next decade.

Targeted Management Indicators and Outlook for Fiscal 2018

* Effective June 1, 2018, Systena split each of its commonshares into four, but figures that do not take this split into
account are listed.

(hundreds of millions of yen)

KPI

FY2014
Results

FY2015Results

FY2016
Results

FY2017
Results

FY2018Results

InitialTargetNet Sales

36,951

42,69546,25554,32059,742
1.6xOperating
Profit

2,226

3,172

3,693

5,170

EPS (yen)

37

90.59

89.68

30
81.0％

32
35.3％

7.3％

17.2%

Dividends(yen)
Payout ratio
ROE

Comparison withtargetAmountof change

rate ofchange56,000
1.5x

3,742

6.7%

6,902
3.1x

5,500
2.5x

1,402

25.5%

145.26※188.08

－

－

－

36
40.1％

46
31.7％

※64
34.0％

52yen
At least
40％

12

23.0%

15.7％

22.4％

24.6％

At least
20%◎◎

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

12

Earnings Forecast for
Fiscal 2019
(Consolidated, Full Year)

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

13

Earnings Forecast for the Full Year (Consolidated)（in millions of yens）

Fiscal 2019
Earnings Forecast
Profit ratio

AmountNet
sales

Fiscal 2018

63,147

Amount－ 59,742

YoY rate

Profit ratio

Amount ofchangerate ofchange

－

3,404

5.7％

Operatingprofit

7,865 12.5％

6,902 11.6％

962 14.0％

Ordinary
profit

7,622 12.1％

6,706 11.2％

915 13.7％

5,140

4,584

555 12.1％

Profit attributableto owners ofparent8.1％

7.7％

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

14

1. Solution Design Business
Key Points for previous period

Year-on-year

Net Sales 21,214 million yen +12.6％

Operating Profit 3,666

million yen

Year-on-year+37.9％In the Solution Design Business, systems development displayed particularly strong performance in areas
such as in-vehicle systems and internet services. We also received many orders in growth areas such as
robotics and AI. Net sales increased by 12.6%, while operating profit increased by 37.9%.
Outlook for this Period

compared with previous period

Net Sales 23,450 million yen + 10.5％

compared with previous period

Operating Profit 4,408 million yen +20.2％

The primary focus of our business operations will be in the field of Internet Services, forwhich we are currently receiving large numbers of inquiries. We will also aim to drive thesteady expansion of our operations in In-vehicle Systems (one key area in which we are
currently investing our energies), with a pivotal focus on growth in robotics and AI.
1. In-vehicle Systems Business ~ Focus on winning orders from high-growth areas! ~ Orders in the information field (infotainment) aimed at improving the comfort of in-vehicle spaces will
expand.
 In the safety field related to passenger vehicles and fixed route buses, etc., we will expand projects andaccumulate expertise based around autonomous driving.
2. Internet Services Business ~ Focus on highly profitable areas through selection and concentration! ~ The development of solutions that utilize service robots and related consulting will expand.
 We will also engage in projects utilizing robots, based around the keywords of IoT and AI.
3. Internet Services Business ~ Focus on highly profitable areas through selection and concentration! ~ We will aim to increase the number of orders received in the fields of E-commerce, payments, andeducational systems, and to expand and enhance our outsourced development laboratories.
 Orders will grow in the web business field utilizing smart devices.
 We will expand into internet service projects based around IoT and AI.
 We will also seek to expand the scale of orders received utilizing offshore development in Vietnam.
4. Work Process Systems Business ~Invest energies into alliance-based business!~ By utilizing OSS（Open Source Software), we will aim to deliver low-cost services in short delivery times.
 We will expand the scale of orders received by expanding our OSS services and use of offshoredevelopment in Vietnam.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

15

2. Framework Design Business
Key Points for previous periodYear-on-year

Net Sales 5,294 million yen +15.1％

Year-on-year

Operating Profit 841 million yen +37.9％

The Framework Design Business continued to perform well. In addition to receiving additional orders
for insurance systems from existing customers, we also saw an increase in orders for infrastructurebuilding projects, and our shift into new domains such as payment settlement also continued toprogress.
We increased the number of orders received for installation/deployment services for work process
automation tools by including inquiries for license sales and deployment support, with a focus oninter-divisional collaboration and cooperative partnerships with product vendors.

Outlook for this Period

compared to previous period

Net Sales 5,770 million yen +9.0％

compared to previous period

Operating Profit 968 million yen +15.1％

We will aim to achieve a balance between both existing and new business operations, by
pursuing projects with high growth potential and profitability through the lateral
deployment of existing business operations in various other fields, while at the same time
proactively securing orders for new business operations.
1. Expand orders for lucrative projects with growth potential

We will pursue projects with a focus on insurance systems, payment systems and infrastructure building.

We will seek to accumulate knowledge and establish sales routes with a view to building a growth engine
for the next period.

2. Work proactively to secure orders for projects based on the keyword of Digital
Transformation (DX)

3. Engage proactively in new business operations with a focus on collaboration throughout
Systena, and collaborative partnerships with manufacturers and vendors
We will expand our services in areas such as robotic process automation (RPA), cloud systems, data
analysis, voice recognition and image recognition; and to increase orders for license sales anddeployment support by bolstering our inter-divisional collaboration and cooperative partnerships withproduct manufacturers and vendors.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

16

3. IT Service Business
Key Points for previous period

Net Sales 7,827 million yen

Year-on-year+11.7％

Year-on-year

Operating Profit 1,067 million yen +30.1％

 We stepped up sales efforts targeting customers’ profit-making
divisions while high value-added on-off projects such as Windows
10 migration for internal IT divisions and the associated smart
device adoption drove sales and profits.
 Additionally, we cultivated new customers using AI chat bots andsecurity-related commercial products as sales hooks.
Outlook for this Period

compared to previous period

Net Sales 8,692 million yen +11.0％

compared to previous period

Operating Profit 1,220 million yen +14.2％

In addition to expanding our market share, the market itself, and sales,
we will also seek to shift to a high-profit business model, and shift
management resources to projects in high added-value fields.
 We will shift from conventional services utilizing the ability to mobilize humanresources such as help desk and system operator services to per-service contracted
business services underpinned by expertise gained from projects and English
language ability, such as high added-value IT support, IT infrastructure, PMO and lab
services. We will make changes to providing services more directly linked to the
expansion of customers’ businesses, and also expand the number of customers weserve and net sales by deploying AI chat bots and RPA new commercial products
while upgrading and expanding our existing offerings.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

17

4. Solution Sales Business
Key Points for previous period

Year-on-year

Net Sales 24,032 million yen +5.0％

Year-on-year

Operating Profit 1,155 million yen +15.9％

 Systems-related projects have increased as a result of the end of support for the Windows7 andWindowsServer2008 operating systems.
 Leveraging workstyle reform as a key concept, we have stimulated demand primarily in theareas of mobile, security and cloud computing.
 We expanded the number of high added-value one-stop service projects over what we hadenvisioned in the roadmap in various areas including the introduction of IT equipment,
infrastructure building, system development, maintenance and operation.
Outlook for this Period

compared to previous period

Net Sales 24,000 million yen ▲0.1％

compared to previous period

Operating Profit 1,242 million yen +7.5％

1. Investment in expanding the solutions segment

 We will upgrade and expand the range of services we offer, and devote greater resources

2. Enhance initiatives aimed at hybrid environments

 We will strengthen support for customers moving from on-premise systems (owned andoperated by the customer) to hybrid environments.
 We will also work to bolster alliances with cloud partners.

3. Strengthen earnings capacity through expanded sales of services
 Provide all services through ALL Systena.
 Launch a new one-stop service centered around apps.

4. Strengthen coordination with Systena America.Inc.

 Sale and development of IoT-related commercial products with a strong focus on
security.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

18

5. Cloud Business
Key Points for previous period

Year-on-year

Net Sales 1,129 million yen +16.1％

Year-on-year

Operating Profit 197 million yen +27.6％

 Orders received for the new Canbus. Service were brisk. We
conducted promotional activities through web to strengthen sales
promotion. We stimulated demand by employing the keywords Digitaltransformation(DX) and IT management to our advantage.
 Due to migrating groupware to the cloud as a part of workstyle reform,
we enjoyed strong sales of Cloudstep.
Outlook for this Period

compared to previous period

Net Sales 1,230 million yen +8.9％

compared to previous period

Operating Profit 64 million yen ▲67.6％

During this period, we will aim to increase and expand sales of our own proprietaryservices, primarily Canbus., and stimulate demand through advance investments
aimed at increasing brand recognition, enhancing product power andimproving the level of customer satisfaction.
1. Improving recognition of Canbus. and bolstering sales promotion through advanceinvestment
 Using industry-targeted approaches such as web promotion, aimed primarily at work
process and management issues such as DX and workstyle reform, we will engage inactivities to improve offline brand recognition (i.e. brand power).
2. Enhancing services through advance investment
 In order to enable the realization of various services, we will enhance our product powerand bolster our human resources to improve our support capabilities.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

19

6. Overseas Business（Systena America Inc.）
Key Points for previous period






Net Sales 120 million yen

Year-on-year+66.8％

Year-on-year

Operating Profit ▲31 million yen +141million yen

We posted advertisements in magazines to drive sales of StrongKey’s security
services in Japan.
We received orders for IoT business development from major Japanese-owned
automotive parts manufacturers in a joint effort with One Tech.
We received orders for IoT and software development from multiple Japaneserun corporations utilizing offshore development in Vietnam.
The above efforts enabled us to achieve positive monthly profits for several months.
Outlook for this Period

Year-on-year

Net Sales 150 million yen +24.8％

compared to previous period

Operating Profit ▲15 million yen +16million yen

１．Begin full-scale sale of StrongKey products We will bolster sales of security products to coincide with the toughening of GDPR
and other regulations.
２．Global roll-out of end-to-end solutions through a joint venture One Tech, Inc.
 We will showcase our IoT solutions at the U.S.-based multiple IoT Expo andstrengthen sales both inside and outside the United States.
 Stronger sales of LPWA equipment, sensors and IoT gateways.
３．Technical support for Japanese-owned manufacturing industry in the U.S.
 We will work to maintain orders for continuous projects and secure orders for new
projects from Japanese-owned companies with which we have existing transactions.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

20

Earnings Forecast for the Full Year (Consolidated)

Sales by Segment
Fiscal 2019
Earnings Forecast（in millions of yens）

Fiscal 2018

YoY rate
Amount ofrate of changechangeAmountSales distribution
ratio

AmountSales distribution
ratio

23,45037.1％

21,214

35.5％

2,235

10.5％

Framework
Design

5,770

9.1％

5,294

8.9％

475

9.0％

IT Service

8,692

13.8％

7,827

13.1％

864

11.0％

Solution
Sales

24,00038.0％

24,032

40.2％

▲32

▲0.1％

Cloud

1,230

2.0％

1,129

1.9％

100

8.9％

Overseas

150

0.2％

120

0.2％

29

24.8％

Investment
Incubation

305

0.5％

397

0.7％

Adjustment

▲450

▲0.7％

▲272

▲0.5％

▲177

－

Total

63,147100.0%

59,742100.0％

3,404

5.7％

Solution
Design▲92 ▲23.3%*Consumer services are included in Investment Incubation for this period.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

21

Earnings Forecast for the Full Year (Consolidated)

Operating profit by Segment
Fiscal 2019
Earnings Forecast（in millions of yens）

Fiscal 2018

YoY rate

AmountProfit ratio

AmountProfit ratio

Solution
DesignFramework
DesignAmount ofchange

4,408

18.8％

3,666

17.3％

741

20.2％

968

16.8％

841

15.9％

126

15.1％

IT Service

1,220

14.0％

1,067

13.6％

152

14.2％

Solution
Sales

1,242

5.2％

1,155

4.8％

86

7.5％

64

5.2％

197

17.5％

Overseas▲15▲10.0％

▲31

ー

16

－

Investment
Incubation

▲22

▲7.2%

5

1.3％

▲27

▲520.4％

Adjustment

－

－

－

－

－

－

7,865

12.5％

6,902

11.6％

962

13.9％

Cloud

Total

rate ofchange▲133 ▲67.6％*Consumer services are included in Investment Incubation for this period.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

22

Earnings Forecast
Composition of Net Sales and Operating Profit by Segment
Investment &Incubation
Cloud

0.5%

2.0%

Net sales¥63,147mil

Solution
Sales

38.0%

Overseas

0.2%

Solution
Sales

15.7%

Solution
Design37.1%

Framework
IT Service Design

13.8%
Adjustment

Operating profit
Cloud7,865mil
0.8%

9.1%

▲0.7%

IT Service

Solution
Design15.4%

Framework
Design

55.8%

12.3%

Overseas▲0.2％
Investment & Incubation ▲0.2%
Adjustment－%

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23

Systena GroupManagement Objectives
and Basic Policy

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24

(1) Basic Management Policy
The management objective of the Systena Group is

to become one of Japan’s leading IT
companies and support the Japanese
economy from the ground up!

To achieve this, we embrace the basic policy ofbalanced management, controlling the conflicting
qualities of “destruction and creation,” “stability
and growth” and “maintenance and innovation”
in the right balance while continually placing theaxis of management at the central point of thependulum.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

25

(2) Targeted Management Indicators

 Stable and high dividends
 High return on equity
 High ratio of operating profit to sales
To achieve these targets, we will strive
to establish a high earnings structure
consistent with a basic management
policy emphasizing balance between
growth and stability.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

26

Systena
New medium-term
management plan
＜five-year＞（Fiscal 2019～ Fiscal 2023）
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

27

New Five-Year Medium-Term plan
Major Management Policy

Improve Productivity with Data-Driven
Management
 We will implement high-precision cost pricemanagement and grasp real profits and losses
at an early stage by utilizing IT business
management systems built using our proprietary
Systena-developed platform Canbus.
 Based on visualization of management data andmanagement information enumerated using
predictive AI, we will seek to thoroughly improve
productivity with the aim of maximizing profits.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

28

New Five-Year Medium-Term plan
Strategies(1) Automotive(2) “Cashless”/payment settlement(3) Robotics/IoT/RPA/cloud(4) Own-brand products and services

We will focus management
resources on the fields
expected to experience themost growth over the next
decade.

Targeted Management Indicators and Outlook for Fiscal 2023
(hundreds of millions of yen)

KPI

2019/32024/3

Net Sales

59,742

101,000

6,902

15,200Operating profit
margin

11.6％

15.0％

Operating profit
per employee

2.16

Operating Profit

ROE

24.6％

（1.7x）（2.2x）

2.60(20％ increase)25％

We will aim to achieve:

 Net sales of 101 billion yen
 Operating profit of 15.2 billion yen
 Operating profit margin of 15%
 Operating profit per employee of
2.6 million yen
 ROE of 25％

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

29

１.Solution Design Business

Aim to expand business operations to a wide range of industries with technical support
utilizing technological capabilities developed through service experience in the in-vehicle
and net business fields, which have grown into core business areas.
Aim to expand business operations in the robotics industry, where demand is expected
to increase due to personnel shortages and other such factors, based on our extensive
development track record.
Also aim to expand business operations in the work process field by increasing our trackrecord in developing work process systems, the need for which stems from factors such as
personnel shortages, DX and replacement/renewal of legacy systems.
2020

In-vehicle

2021

Infotainment

Robotics

Communication robots

800 million yen

Olympic related

10.2 billion yen

Educational reform

Work process

Workstyle reform

FY2018Net Sales: 21.2
billion yen
Operating Profit:
3.7 billion yen
State of progress

2023

Connected cars

Safety solutions

6.0 billion yen

Industrial robots
Medical robots & systems

Expansion of transactions with mainstay customers

Open source utilization

5G-related services
AI and RPA

5.0 billion yen

Increasing demand with AI, IoT and other technology elements

20.0 billion yen
Digital transformation (DX)
Solutions to tackle personnel shortages

FY2019 outlook
Net sales growth of 1.9x and operating profit growth of 2.2x
Net Sales: 23.45
billion yen
Operating Profit:
4.41 billion yen

2024

Autonomous driving

Lifestyle robots (nursing care & lifestyle support)

Net business

2.3 billion yen

MaaS

Car sharing

2.7 billion yen

2022

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

5.0 billion yen

FY2023 target
Net Sales: 40.95
billion yen
Operating Profit:
8.1 billion yen

30

2. Framework Design Business


Deploy finance and insurance-related expertise accumulated so far, while at the sametime seeking to accumulate expertise for responding to needs for digitalization anddeploying this expertise proactively in serving both new and existing customers.
Expand and enhance services with a focus on automation.
Operating Profit: 0 →300 million yen

Net Sales: 0 → 1.5
billion yen

Accumulate and deploy expertise for response to needs for digitalization in new fields

Insurance

Socialinfrastruc
tureOpen source

Agile

Cloud

Net Sales: 4.76 → 6.0
billion yen

Banking

IT infrastructure

Electronic
payments

Package utilization

Cashless payment

Operating Profit: 100 →500 million yen

本部間協業・

Expansion and enhancement of new services with afocus on automation and streamlining
FY2018Net Sales: 5.3
billion yen
Operating Profit:
800 million yen
State of progress

SCM/CRM

Operating Profit: 750 →800 million yen

Expand business domains, renew andintegrate mission-critical systems to
respond to digitalization with respect
to existing customers
Net Sales: 0.54 → 2.5
billion yen

Front system

FinTechDigitalization

Point conversion

Net banking

Automateddiagnosis

Deployment
supportLicense sales

AI-related

FY2019 outlook
Net sales growth of 1.8x and operating profit growth of 2.0x

FY2023 target
Net Sales: 9.4
billion yen
Operating Profit:
1.6 billion yen

Net Sales: 5.77
billion yen
Operating Profit:
97 billion yen

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

31

3. IT Service Business
Create and implement a new business model together with customers, and become atransformational organization that raises corporate value through continually tackling newchallenges based on experiences and past results.
•••

We will engage in outsourced business operations on an individual service basis, withservices such as IT support, IT infrastructure, PMO and LABO offering high added value
based on expertise developed through various projects.
As market trends become more short-lived and change drastically, we will shift to providing
services to match essential (i.e. indispensable) parts and trends in order to link in directly withcustomers business operations.
Most recently, we are working to increase customer number and sales by investing efforts
into delivering new products and services such as AI, chat bots and RPA.

Stable recruitment of engineers

Infrastructurework
FY2018Net Sales: 7.8
billion yen
Operating Profit:
1.1 billion yen
State of progress

PMO
work

RPA , AI,
chat bots

980 → 1600

Bolster
recruitAn increase of 620 ment

Speed up & bolster human resources development,
shorten development time from 5 years to 2 years

By increasing sales from outsourced businesses such as IT
support, IT infrastructure, PMO and LABO from current salesof 4.5 billion yen to 8.0 billion yen five years from now, we
will seek to increase our overall gross profit margin from
30% to 34%.

FY2019 outlook

Increase number of customers

FY2023 target

Enhance product lineup

Net sales growth of 1.4x and operating profit growth of 2.2x

Net Sales: 11.06
billion yen
Operating Profit:
2.35 billion yen

Net Sales: 8.69
billion yen
Operating Profit:
1.22 billion yen

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

32

4. Solution Sales Business
Provide solution services aimed at solving management issues faced by customers (suchas improving productivity, reducing costs, and bolstering security) using Systena’s overallsales capabilities in order to create and expand added-value business, and transform into
an ICT partner that supports customers’ business operations; and link thistransformation on to a continuous improvement in sales and profits.
Business
Strategy

Numerical
Targets

FY2018

Existing business

Service business

FY2023

FY2023Cloud business
FY2023+34%
increase+176%
increase+341%
increase

FY2018FY2018FY2018FY2019 outlook

Net Sales: 24.0
billion yen
Operating Profit: 1.2
billion yen
State of progress

Bolster response to data centers and hybrid environments
Increase inter-divisional synergies and expand services
Expand subscription and stock businesses

Operating profit of 6％, net service sales of 11.4 billion yen andpercentage sales of 30%
Net Sales: 2.40
billion yen
Operating Profit:
1.24 billion yen

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

FY2023 target
Net Sales: 36.58
billion yen
Operating Profit:
2.3 billion yen

33

5. Cloud BusinessImplement a high added-value subscription model, primarily for Canbus.



Aim to achieve growth with high added-value business operations in the field of work
process SI, utilizing the advantages of Canbus.



Aim to expand and enhance new services and achieve further growth through researchand development of new technology elements such as AI and IoT.
2020

2021

Workstyle reform

AI and RPA

2022

2023

2024

Digital transformation (DX)
Measures against personnel shortages

Canbus. is a business application
platform. This service enables anyone
to create and operate work processservices easily, irrespective of their IT
literacy. We will appeal to customers
about its capabilities to resolve
corporate management issues such as
DX and workstyle reform.

FY2018Net Sales: 1.1
billion yen
Operating Profit:
200 million yen
State of progress

CloudStep groupware can be used as
an add-on for G Suite and Office365.
We will appeal to customers about
its capabilities to improve corporate
productivity and workstyle diversity.

New Services

We will create new services from
R&D, primarily in areas such as IoT,
AI and security.

FY2019 outlook
Achieve targets in global business, armed with own-brand products
and services and content based in Japanese culture

FY2023 target
Net Sales: 1.97
billion yen
Operating Profit:
500 million yen

Net Sales: 1.23
billion yen
Operating Profit: 60
million yen

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

34

6. Overseas Business（Systena America Inc. ） Aim to increase joint orders with OneTech in the continuously expanding field of IoT,
based on technical support for Japanese-owned companies in the United States.
 Provide support for countermeasures against data leaks for public institutions andprivate sector companies in Japan, by providing the latest technologies including
StrongKey cyber security products; and unearth new technologies and markets.

Business
Strategy Bolster technical support for Japanese-owned companies in the U.S.
 Increase orders received for IoT projects, both in the U.S. and globally Bolster support for cyber security measures in Japan

Cyber security

IoT

Technical support

FY2023

FY2023

FY2023

Key fields
FY2018FY2018Fy2018Contribution to Systena (Japan): Net Sales: 1.5 billion yen, Operating Profit: 800 million yen

FY2018Net Sales: 100
million yen
Operating Profit:-30 million yen
State of progress

FY2019 outlook
Unearth the next new technologies and markets
Net Sales: 150
million yen
Operating Profit:
20 million yen

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

FY2023 target
Net Sales: 640
million yen
Operating Profit:
250 million yen

35

７．Collaboration with Overseas Business

Systena America

Collaboration

Collaboration

One Tech
Strongkey

Japan
Sales activities

System building anddeployment support

Technical support

Solution Sales GroupNew Planning GroupInternet of Things*

In investment incubation businesses, we will aim
to achieve net sales of 400 million yen andoperating profit of 100 million yen by FY2023.

SupportDevelopment

IT Management
Business Group

Solution Design GroupWe will aim to consolidate the strengths of each division anddeliver these services in Japan with an “All Systena” approach.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

36

Earnings Forecast for Fiscal 2023
Composition of Net Sales and Operating Profit by Segment

Overseas
Cloud

Net sales¥101bil

Operating profit¥15.2bilInvestment &Overseas
Incubation
0.4% Cloud 1.6%

0.6%

1.9%

Investment &Incubation

0.7%

3.3%

Solution
DesignSolution
Sales

36.2%

40.6%

Solution
Sales

15.1%

IT Service

15.5%

IT Service

11.0%

9.3%

Framework
DesignSolution
Design

53.3%

10.5%
Framework
DesignCopyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

37

Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.

Making digital society a happy society.
Systena IT Services

https://www.systena.co.jp/
The earnings forecasts described in this document and mentions of future events are predications based on theinformation available at the time of publication, and may incorporate uncertain factors.
Please note that actual business performance can fluctuate due to various factors including changes in theeconomic or business environment.
Copyright ⓒ 2010 - 2019 Systena Corporation All Rights Reserved.