Slide 1: Financial Results for the Fiscal Year 2022
Tokyo Stock Exchange Prime Market: Securities Code 3992 Needs Well Inc. Financial Results for the Fiscal Year 2022 (October 1, 2021 – September 30, 2022) November 10, 2022
Slide 2: Agenda
1. 2022/9 Financial report summary 2. 2023/9 Results forecast 3. Growth strategy 4. Reference
Slide 3: Net sales, ordinary profit
1.1) Net sales, ordinary profit Significant increase in both net sales and profit year on year, showing a strong trend of expansion • Expanded sales channels and reinforced the customer base through active capital and business alliances and business alliances • ・ Expanded projects for DX of life ins
Slide 4: Financial highlights: Net sales/ordinary profit trends by FY
1.2) Financial highlights: Net sales/ordinary profit, trends/comparison by FY Both net sales and ordinary profit reached new highs since establishment High level for salary increases of 2.15% and an annual bonus of 4.8 months due to strong performance [Net sales by quarter] Total [OrdinAary profit b
Slide 5: Performance progression rate
1.3) Performance progression rate Progression rate on performance targets: 100.5% for net sales, 103.7% for ordinary income Infrastructure Services: Strong performance in VDI installations and cloud-related projects Solutions: Strong performance in solutions relating to the Revised Preservation of E
Slide 6: Ordinary profit analysis
1.4) Ordinary profit analysis Ordinary profit increased 24.5% (142 million JPY) year on year • Gross profit increased by 148 million JPY (+10.5% year on year) due to increased orders and acquisition of high-value-added projects • Personnel-related expenses★ increased by 152 million JPY (+4.8% year o
Slide 7: Profit & loss statement
1.5) Profit & loss statement Ordinary profit ratio was 10.8% (Up 0.7 pts YoY) FY2021/9 Financial Results FY2022/9 Financial Results Unit: million JPY Result Net Sales Result Net Sales Year-on-year Net sales 5,752 - 6,730 - 117.0% Business Systems SI 4,360 75.8% 4,988 74.1% 114.4% Infrastructure Serv
Slide 8: Balance sheet
1.6) Balance sheet Equity ratio at 77.5%, down 2.7 pts year on year due to acquisition of treasury shares *Selection of significant entries only FY2021/9 FY2022/9 *Selection of significant entries only FY2021/9 FY2022/9 Assets Unit: million JPY Result Result Year-on-year Unit: million JPY Result Res
Slide 9: Agenda
1. 2022/9 Financial report summary 2. 2023/9 Results forecast 3. Growth strategy 4. Reference
Slide 10: Transition to consolidated accounting
2.1) Transition to consolidated accounting Transition to consolidated accounting from October 2022 with Needs Well’s inclusion of subsidiaries and an equity-method affiliate Needs Well Inc. Business Systems SI, Infrastructure Services, Connected Systems, Solutions [Consolidated subsidiaries] Zeroich
Slide 11: Forecast (Consolidated)
2.2) Forecast (Consolidated) Toward achieving the Medium-Term Management Plan Targets of Net sales: 10.0 billion JPY & Ordinary profit: 1.0 billion JPY Needs Well will continue efforts throughout FY2023/9 to expand existing businesses and conclude M&A contracts at a pace that exceeds forecasts Infra
Slide 12: Medium-Term Management Plan: Present situation & measures
2.3) Medium-Term Management Plan: Present situation & measures Medium-Term Management Plan Targets for FY2023/9 Net sales: 10.0 billion JPY Ordinary profit: 1.0 billion JPY While existing businesses are steadily expanding to exceed the target of 7.7 billion JPY, we are Present situation facing issue
Slide 13: Dividends and shareholder returns
2.4) Dividends and shareholder returns FY23/9 forecast Dividend per share: 23 JPY/share 3 JPY increase in regular dividend In addition to shareholder returns, we will work to increase employee salaries and bonuses in seeking economic growth and securing talent. Dividend (JPY; regular and commemorati
Slide 14: Agenda
1. 2022/9 Financial report summary 2. 2023/9 Results forecast 3. Growth strategy 4. Reference
Slide 15: Management philosophy
3.1) Management philosophy Management philosophy Contributing Broadly to the Economy and Society Business slogan Try & Innovation Constantly evolving, Needs Well continues to contribute broadly to the economy and society with challenges and innovations. Financial Results for the Fiscal Year 2022 15
Slide 16: Growth track
3.2) Growth track Oct 2021 Acquired 100% of BO-Studio, Komsoft total outstanding shares July 2022 Holds 33.3% of Souken-sys Inc.’s total outstanding shares Net sales Apr 2022 Tokyo Stock Exchange Prime Market Number of personnel Oct 2021 Acquired 70% of Zeroichi Production’s total outstanding shares
Slide 17: Medium-Term Basic Policy
3.3) Medium-Term Basic Policy Breaking away from the dispatch business, becoming a true system integrator Financial Results for the Fiscal Year 2022 17
Slide 18: Our three strengths
3.4) Our three strengths Capacity for Financial sector accounts for 50% of net sales in main service line, financial system Business Systems SI. development Particularly advanced in life insurance and accident insurance sectors. Capacity for financial system Strong performance record in developing s
Slide 19: Performance targets
3.5) 1 Performance targets FY2023/9 Net Sales 10.0 billion JPY Ordinary profit 1.0 billion JPY 10.0 Billion JPY CAGR（compound annual growth rate） CAGR（compound annual growth rate） 1.0 Billion JPY ２３．1 % ２４．８ % 2020 2021 2022 2023 2020 2021 2022 2023 Existing businesses M&A Existing businesses M&A *
Slide 20: Promotion policies: Sales growth
3.5) 2 Promotion policies: Sales growth Unit: billion JPY Logistics Business Market scale (our forecast) Logistics industry is facing a serious labor shortage as the selection of diversifying +1.2 Logistics IoT software solutions market needs continues to increase. There is urgent demand for immedia
Slide 21: Growth strategy focus points
3.6) Growth strategy 1 Promote improvement of corporate value 2 Expand Logistics Businesses 3 Expand AI Business Focus 4 Expand nearshore development points 5 Establish business foundation 6 Expand Solutions Business 7 Increase direct sales to end users Financial Results for the Fiscal Year 2022 21
Slide 22: Promote improvement of corporate value
3.6) 1 Promote improvement of corporate value ⅰ Promote our management philosophy of “Contributing Broadly to the Economy and Society” through improvement of the NeedsWell Value • Institutional investor • Individual investors Capital • M&A • Acquisition of treasury shares • Media IR・PR policy • Prom
Slide 23: Promote improvement of corporate value: M&A and alliances
3.6) 1 Promote improvement of corporate value ⅱ Proactively pursue M&A, capital and business alliances, and the development of collaborative relationships Expanding sales channels, orders, products, and engineers for further growth Feb. 2020 Capital and business ITFOR Inc. Utilize engineers from bot
Slide 24: Expand Logistics Businesses
3.6) 2 Expand Logistics Businesses Increased rate of online shopping has expanded needs for advanced logistics warehouses Warehouse Management System realizes 3 smart aspects • Expand sales of SmartWMS by collaborating with logistics hardware manufacturers • Store development for ordered SmartWMS •
Slide 25: Expand AI Business
3.6) 3 Expand AI Business Expand AI Business by expanding the Work AI lineup AI Remote Education Speak Analyzer AI comparison of information with top performing models to provide feedback on points needing improvement. * Work AI is a general term AI automation of rough estimation of parts and materi
Slide 26: Expand nearshore development
3.6) 4 Expand nearshore development Nagasaki Development Center aims to maintain 100 employees in FY2024/9 Utilize nearshore bases to acquire highly competent personnel and provide solutions for labor shortages Nearshore utilization • Expand nearshore development system by accepting orders for out-o
Slide 27: Establish business foundation
3.6) 5 Establish business foundation Establishing a business foundation for stable development into the future as a listed company Business Systems SI ▶▶▶ Service line composition • Expand into the financial sector by accumulating business knowledge Service lines that establish and training highly-s
Slide 28: Expand Solutions Business
3.6) 6 Expand Solutions Business Expanding the Solutions Business to accelerate business expansion and increase added value Net sales composition ratio target 15.0% (FY2022/9 results: 12.7%) Expansion strategy Provide DX centered on IT Re-Engineering Service solutions from Needs Well Coordinating pe
Slide 29: Increase direct sales to end users
3.6) 7 Increase direct sales to end users Stabilize orders and improve profitability, maintain and expand end user direct sales ratio to over 60% Maintain and expand existing users • Secure repeat customers End user • Train highly skilled engineers and expand the scope of expertise composition ratio
Slide 30: Agenda
1. 2022/9 Financial report summary 2. 2023/9 Results forecast 3. Growth strategy 4. Reference
Slide 31: Company profile
4.1) Company profile As of September,2021 Company Name Needs Well Inc. Representative President and CEO Kozo Funatsu Established October 1, 1986 Stock Listing Tokyo Stock Exchange, Prime Market (3992) Paid-in Capital 908 million JPY Net sales 6,730 million JPY Number of 570 Fiscal year end September
Slide 32: Business fields
4.2) Business fields Needs Well provides total IT services through four services focused on Business Systems SI for finance. Financial Results for the Fiscal Year 2022 32
Slide 33: Business system diagram
4.3) Business system diagram Clients Needs Well Subcontractor Business Direct transaction* /supplier Systems SI Infra- Partner structure company System Services End user integrator Connected Supplier Systems Manufacturer Solutions/ Products, etc. Order Provision of services/products, etc. * High lev
Slide 34: Initiatives directly linked to business
4.4) 1 Initiatives directly linked to business Aim for sustainable management through business strategies that incorporate the perspectives of SDGｓ, ESG, and CSR Nearshore Development Promotion: Nagasaki Development Center to maintain 100 employees by 2024 Promote development by committing to QCD (q
Slide 35: Initiatives supported by systems and activities
4.4) 2 Initiatives supported by systems and activities Work style reform & personnel development • Promote a healthy work-life balance by incentive dates for paid leave, Premium Friday (leaving work early on the last Friday of the month), reducing overtime work, etc. • Expand selection of employees
Slide 36: Business results 1
4.5) Business results 1 Net sales Unit : million yen Operating profit Unit : million yen 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 １Q 1,217 1,341 1,418 1,348 1,562 １Q 121 110 92 136 171 ２Q 2,470 2,724 2,809 2,818 3,253 ２Q 255 266 267 306 362 ３Q 3,801 3,739 4,097 4,078 4,2
Slide 37: Business results 2
4.5) Business results 2 Profit per share ROE Unit : Yen Unit : % 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 １Q 9.88 9.04 7.04 10.52 12.36 １Q ２Q 20.85 22.02 21.19 23.81 25.58 ２Q ３Q 35.51 28.18 30.22 27.30 34.75 38.61 ３Q Total 36.74 40.81 38.78 41.15 40.99 46.64 49.86 Total
Slide 38: Business results 3
4.5) Business results 3 Capital adequacy ratio Unit : % Net assets per share Unit : Yen 2016 2017 2018 2019 2020 2021 2022 2016 2017 2018 2019 2020 2021 2022 １Q 66.7 68.5 71.3 74.5 77.3 1Q ２Q 62.8 65.4 73.6 75.7 78.3 2Q ３Q 50.5 59.0 71.4 71.2 74.0 75.9 3Q Total 49.3 61.4 64.0 73.4 74.5 80.2 77.5 Tot
Slide 39: Corporate Communication Division contact
• All statements described herein have been prepared by Needs Well based on the currently available information. • Actual results may differ from forecasts due to various factors in the future. Corporate Communication Division e-mail: ir-contact@needswell.com