Intelligent Wave Inc. · TSE:4847

Intelligent Wave — H1 FY06/23 Earnings Presentation

29 slides from Intelligent Wave's earnings presentation, Feb 3, 2023

  1. Slide 1: Financial Results for 1H FY06/23

    Financial Results for 1H FY06/23 (July 1 to December 31, 2022) [Non-Consolidated] Intelligent Wave Inc. Announced on February 3, 2023 Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved.

  2. Slide 2: Financial Results 1H FY06/23

    Financial Results 1H FY06/23 Key initiatives in 1H FY06/23 Forecast for FY06/23 Reference Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved. 2

  3. Slide 3: Overview

    Overview Million yen Change（YoY） Change 1H FY06/22 1H FY06/23 （vs.Forecast） Net sales 4,887 6,789 ＋1,902 ＋38.9% △0.2％ Operating income 478 803 ＋325 ＋68.0% △10.8％ Ordinary income 499 824 +325 ＋65.1% △10.4％ Net income 337 558 +221 +65.6% △12.8％ Amount of orders 7,516 6,459 △1,057 △14.1% Orders on hand

  4. Slide 4: Sales by categories YoY comparison

    Sales by categories YoY comparison (＋) “Hardware” increased due to FEP system* renewal for existing customers, “cloud services” increased, “system development” increased due to large projects for a credit card company. (△) “In-house products & Services” decreased mainly due to several license sales

  5. Slide 5: Sales by categories vs. Forecast

    Sales by categories vs. Forecast (＋) “Payment & Finance” exceeded the plan due to an increase in projects in new areas. “Cloud Services” performed as planned. (△) “Security” fell short of plan due to lack of new projects. Million yen 1H FY06/22 1H FY06/23 Change Net Sales 6,800 6,789 △11 Payment & F

  6. Slide 6: Sales by Business Domain

    Sales by Business Domain (＋) Sales increased due to FEP system renewal projects, an increase in the number of users of cloud services and a large-scale project for a credit card company. Million yen 1H FY06/22 1H FY06/23 Change Net Sales 4,887 6,789 ＋1,902 Payment & Finance 3,915 5,393 ＋1,478 FEP・Fr

  7. Slide 7: Top Three Clients by Sales

    Top Three Clients by Sales Million yen 1H FY06/22 1H FY06/23 Change Main projects Hardware sales and system 1. System 497 1,197 ＋700 development due to FEP system Integrator renewal Tokenization Service system (for Smartphone payment 2. D N P 691 877 ＋186 transaction ) , Payment Platform*, System op

  8. Slide 8: Sales by "Stock" and "Flow"

    Sales by “Stock” and “Flow” Sales of “Stock” is steadily increasing due to higher sales of cloud services and maintenance. ■…Flow ■…Stock Million yen 2,216 2,175 1,517 1,634 1,382 1,055 1,442 1,470 1,625 1,196 1,252 1,312 1Q 2Q 3Q 4Q 1Q 2Q FY06/22 FY06/23 Stock: categories with contracts that allow

  9. Slide 9: Operating income

    Operating income (＋) Increase in sales due to hardware sales and system development. (△) Decrease in sales of In-house Products & Services, Increase expenses for cloud services and higher SG&A expenses, etc. 576 ■…Operating income ●…Operating margin 464 483 Million yen 451 352 319 273 15.7% 15.7% 27

  10. Slide 10: Amount of Orders

    Amount of Orders ■… Payment & Finance (System Development ) ■… Payment & Finance (Maintenance,Hardware, etc) ■… Cloud Services ■… Security 4,686 228 Million yen 4,252 3,954 299 273 339 1,876 311 3,329 3,056 3,130 2,829 132 214 2,562 2,660 2,612 322 133 86 1,929 822 112 336 243 507 73 79 1,000 2,144

  11. Slide 11: Orders on Hand

    Orders on Hand ■… Payment & Finance (System Development ) ■… Payment & Finance (Maintenance,Hardware, etc) ■… Cloud Services ■… Security Million yen 9,268 9,563 9,047 9,233 666 660 606 7,963 749 639 6,075 5,912 4,210 4,141 5,688 5,530 4,214 4,589 681 5,022 606 693 689 4,236 423 1,934 1,762 1,609 2,6

  12. Slide 12: Orders on Hand by "Stock" and "Flow"

    Orders on Hand by “Stock” and “Flow” ■…Flow ■…Stock Million yen 9,563 9,047 9,233 9,268 7,963 1,814 2,895 1,873 2,647 1,587 5,912 1,370 7,173 7,419 6,376 6,621 6,668 4,541 1Q 2Q 3Q 4Q 1Q 2Q FY06/22 FY06/23 * The classification of sales based on so-called "stock-type" and "flow-type" sales has been r

  13. Slide 13: Cloud Service Business

    Cloud Service Business Sales increased significantly YoY due to an increase in the number of users. On the other hand, compared to the plan, sales are in line with the plan, but profits are lower than the plan at the beginning of the period due to an increase in expenses to strengthen the system in

  14. Slide 14: Orders for Cloud Services

    Orders for Cloud Services IOASIS received several large orders in the previous fiscal year, and IFINDS and IGATES are receiving strong inquiries for orders, and the number of users is expected to increase. Million yen FY06/22 FY06/23 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Amount of orders 1,000 1,876 273 311 507 8

  15. Slide 15: Key initiatives in 1H FY06/23

    Financial Results 1H FY06/23 Key initiatives in 1H FY06/23 Forecast for FY06/23 Reference Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved. 15

  16. Slide 16: Expansion of payment business

    Expansion of payment business We will maintain and expand the FEP and the fraud detection business which is our strength, and we will also aim to expand sales in the payment business by increasing the number of users of Cloud Services and expanding our business domain by developing Acquiring and Per

  17. Slide 17: Status of Strategies by Business Domain

    Status of Strategies by Business Domain - Collaborated with JCB to strengthen measures to prevent card fraud throughout the industry-wide. Launched the first project. Payment＆ - Expanding business domain into peripheral systems area by Finance supporting IT strategies of major credit card company cl

  18. Slide 18: Published Japanese Proofread Tool by AI (demo version)

    Published Japanese Proofread Tool by AI (demo version) Started R&D of National Language Processing (NLP) from 2016. Developed ‘IWI Japanese Proofread Tool’ utilizing AI and published the demo version in November 2022. Utilizing NLP in Japanese While many new services based on NLP AI technology have

  19. Slide 19: Forecast for FY06/23

    Financial Results Q2 FY06/23 Key initiatives in Q2 FY06/23 Forecast for FY06/23 Reference Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved. 19

  20. Slide 20: FY06/23 Full-year Forecasts

    FY06/23 Full-year Forecasts Million yen FY06/22 FY06/23 Change actual forecast （full year) 1H 2H Full year 1H（actual） 2H(Full year- Full year 1H actual) Net sales 4,887 6,606 11,493 6,800 6,700 13,500 ＋17.5% Payment & Finance 3,915 5,313 9,229 5,320 4,830 10,150 ＋10.0% Cloud Services 493 680 1,173 8

  21. Slide 21: FY06/23 Forecasts

    FY06/23 Forecasts Million yen FY06/22 FY06/23 (actual) (forecast) １H ２H １H ２H Full year Full year YoY （actual） (Full year-1H actual) Net sales 4,887 6,606 11,493 6,789 6,711 13,500 ＋1.6% Payment & Finance 3,915 5,313 9,229 5,393 4,757 10,150 △10.5% System Development 2,369 2,720 5,089 2,840 2,970 5,

  22. Slide 22: Reference

    Financial Results 1H FY06/23 Key initiatives in 1H FY06/23 Forecast for FY06/23 Reference Copyright © 2022, INTELLIGENT WAVE INC. All rights reserved. 22

  23. Slide 23: Cost of manufacturing

    Cost of manufacturing Thousand yen FY06/22 FY06/23 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Materials cost 7,194 8,162 11,264 10,943 21,857 6,582 Labor cost 718,848 734,397 714,332 724,102 731,531 737,858 Expenses 431,898 413,397 403,356 501,360 486,571 517,615 Subcontracting cost 603,162 668,363 757,872 831,229 892

  24. Slide 24: SG&A expenses

    SG&A expenses Thousand yen FY06/22 FY06/23 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Salaries 290,810 310,527 335,648 361,087 384,909 388,481 Training and recruiting 10,332 13,989 24,046 24,878 14,951 22,121 Rent 18,793 18,328 16,822 17,320 24,509 25,362 Advertising 12,691 11,432 12,179 9,110 9,994 13,631 R&D 9,301 5

  25. Slide 25: Cash Flows JPY 404mil increase

    Cash Flows ＋1,717 Million yen △864 △447 Purchase of PP&E -216 Income before taxes＋824 Purchase of -660 D&A ＋447 intangible assets A/R decrease ＋1,082 A/P decrease -568 Inventory increase -41 Dividends -445 4,336 3,932 Income taxes paid -300 JPY 404mil increase 30-Jun-22 Operating activities Investin

  26. Slide 26: Historical performance

    Historical performance ■… Net sales ■ … Operating income 11,187 11,493 Million yen 10,920 10,603 10,443 8,469 7,137 7,205 6,695 6,558 6,367 6,160 5,891 5,870 5,505 5,527 5,257 5,241 4,844 5,174 4,956 4,762 1,854 1,528 1,482 1,519 1,177 1,036 1,130 731 921 678 702 547 371 389 417 358 321 484 228 131

  27. Slide 27: Reference) Our Cloud Services

    Reference) Our Cloud Services ・SaaS product for providing operation system and supporting customers to launch acquiring business ■IOASIS ・ Offer 24/7 system operation ■IPRETS ・Point management system that grants points at the time of payment, etc. ■IGATES ・Provides 24/7 non-stop switching operation

  28. Slide 28: Company overview

    Company overview As of December 31,2022 Established December 27, 1984 Location Kayabacho Tower, 1-21-2 Shinkawa, Chuo-ku, Tokyo Employees 449 Parent company Dai Nippon Printing Co., Ltd. (50.71%) Capital stock JPY843.75k Shares 26,340,000 Shareholders 9,525 outstanding Ownership (%) % of shareholder

  29. Slide 29: Intelligent Wave Inc.

    These materials were produced to provide information concerning the company and its businesses. They are not intended as a solicitation for investment in securities issued by Intelligent Wave Inc. The opinions, forecasts, and other forward-looking statements in these materials are based on the compa

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