Slide 1: Financial Results for Fiscal Year Ended December 31, 2023
Financial Results for Fiscal Year Ended December 31, 2023 February 8,2024 SIOS ,Corp. （Stock Code: 3744 on the Second Section of Tokyo Stock Exchange） © SIOS © SIOS Corporation. Corporation. All rights All rights Reserved. Reserved.
Slide 2: Table of Contents
Table of Contents 1. Review of Business Results for the Fiscal Year Ended December 31, 2023 (FY 2023) 2. Business Forecasts for the Fiscal Year Ending December 31, 2024 (FY 2024) 3. Growth Strategies for FY 2024 4. Medium-Term Business Plan for FY 2024-2026 5. Appendix © SIOS Corporation. All rights
Slide 3: 1. Review of Business Results for FY 2023
1. Review of Business Results for the Fiscal Year Ended December 31, 2023 (FY 2023) © SIOS Corporation. All rights Reserved.
Slide 4: Consolidated Financial Results for FY 2023
Consolidated Financial Results for FY 2023 (In millions of yen) FY2022 FY2023 Change %Change Results Results Net Sales 14,420 15,889 ＋1,469 ＋10.2% Gross profit 4,666 5,216 ＋549 ＋11.8％ Operating income △572 △208 ＋364 － Ordinary income △499 △15 ＋483 － Profit (loss) attributable to △639 △18 ＋620 － owne
Slide 5: Consolidated Net Sales
Consolidated Net Sales （In millions of yen） 15,889 14,420 Up 10.2% year on year FY2022 FY2023 © SIOS Corporation. All rights Reserved. 5
Slide 6: Consolidated Operating Profit, EBITDA, and R&D Spending
Consolidated Operating Profit, EBITDA, and R&D Spending （In millions of yen） 838 839 Operating loss decreased by ¥364M from the previous year. Negative EBITDA (208) (147) decreased by ¥322M YoY. (469) R&D expenses increased (572) FY2022 FY2023 by ¥1M YoY. Operating Profit EBITDA R&D Spending ©
Slide 7: Consolidated Balance Sheets
Consolidated Balance Sheets As of December 31, 2022 As of December 31, 2023 （In millions of yen） Total liabilities Current Current 4,778 assets 5,741 負債合計 assets 5,195 (including (including 5,518 (including interest- cash and (内有利子 cash and bearing deposits of 負債181) deposits of debts of 2,604) 2,50
Slide 8: Analysis of Consolidated Cash Flows
Analysis of Consolidated Cash Flows （In millions of yen） 188 28 39 -157 2,604 2,505 Cash and cash Cash flows from Effect of exchange Cash and cash Cash flows from Cash flows from equivalents as of operating rate change on cash equivalents as of investing activities financing activities December 31,2
Slide 9: Cash Flow Analysis
Cash Flow Analysis Cash flows from Cash flows from Cash flows from operating activities investing activities financing activities Net cash provided or used ¥28M net cash provided ¥188M net cash provided ¥157M net cash used • Increase in trade • Proceeds from refund payables: ¥150M of guarantee depos
Slide 10: Open System Infrastructure Business
Open System Infrastructure Business Net sales 9,909 million yen, Up 13.7％ YoY （In millions of yen） 9,909 Sales of software products sourced from Red Hat Inc.* increased YoY. 8,716 Sales of LifeKeeper* were strong for both on-premise* and cloud* application. FY2022 FY2023 Note: See the Glossary o
Slide 11: Open System Infrastructure Business
Open System Infrastructure Business 90 million yen, compared with a loss of Segment income 13 million yen the year before （In millions of yen） Segment income was up YoY, 90 driven by robust sales in this segment. -13 FY2022 FY2023 © SIOS Corporation. All rights Reserved. 11
Slide 12: Application Business
Application Business Net sales 5,967 million yen, Up 4.8％ YoY （In millions of yen） 5,967 Revenues from the provision of support 5,691 for system development and implementation were up YoY, especially from the support provided for API* projects and business management systems of stock brokerage fir
Slide 13: Application Business
Application Business -311 million yen, compared with a loss Segment income of 570 million yen the year before （In millions of yen） Segment loss decreased YoY with increases in personnel expenses and investments in new products and services -311 partially offset by increased -570 sales in this segmen
Slide 14: 2. Business Forecasts for FY 2024
2. Business Forecasts for the Fiscal Year Ending December 31, 2024 (FY 2024) © SIOS Corporation. All rights Reserved.
Slide 15: Consolidated Business Forecast for FY2024
Consolidated Business Forecast for FY2024 The Company projects an increase in consolidated net sales for two consecutive years and a return to operating profit for FY 2024. （In millions of yen） FY2023 FY2024 Change %Change Results Results Net Sales 15,889 16,600 +710 +4.5% Gross profit △208 250 +458
Slide 16: Analysis of Projected Operating Profit for FY 2024
Analysis of Projected Operating Profit for FY 2024 We expect to return to operating profit for FY 2024, due to an increase in gross profit resulting from robust sales and a cutback in R&D and other SG&A expenses. （In millions of yen） 710 74 250 △326 ０ △208 Operating profit Increase in gross Increase
Slide 17: 3. Growth Strategies for FY 2024
3. Growth Strategies for FY 2024 © SIOS Corporation. All rights Reserved.
Slide 18: Growth Strategies for FY 2024
Growth Strategies for FY 2024 We will continue to focus on our SaaS* and subscription-based* businesses while developing new businesses into growth drivers. 1 Continue to invest in our SaaS and subscription-based businesses 2 Expand our API solutions business Maximize the benefits of generative AI*
Slide 19: Revenue from the Gluegent Series
Revenue from the Gluegent Series Our enhanced product development and user support have been keeping the ARR¹ of the series on a solid growth path. Combined ARR of Gluegent Flow and Gluegent Gate （In millions of yen） 577 488 Combined ARR for FY 2023 414 375 was up 18.2% YoY 270 Gluegent Flow Gluegen
Slide 20: Actions to Drive ARR
Actions to Drive ARR To drive ARR, we must increase A while stemming B. Formula for ARR ARR = MRR × 12 months A B MRR = MRR for the previous month + New + Upgrade - (Downgrade + Churn) New: Revenue increase from new clients Upgrade: Revenue increase from clients who upgraded to a higher- tiered subs
Slide 21: Actions Taken to Drive Revenue Growth of the Gluegent Series
Actions Taken to Drive the Revenue Growth of the Gluegent Series We made it work more closely with Microsoft 365 to help corporate users achieve greater operational efficiency. A. Increase revenue from new and upgrading clients We have made it work more closely with Microsoft 365. Gluegent Flow ha
Slide 22: Awards and Recognition Accorded to the Gluegent Series
Awards and Recognition Accorded to the Gluegent Series Received many awards for its highly rated performance. Gluegent Flow received a High Performer award in the workflow system category in ITreview Grid Award 2024 Winter, announced by the IT reviewing platform ITreview in January 2024. It was th
Slide 23: Actions Taken to Drive Revenue Growth of the Gluegent Series
Actions Taken to Drive the Revenue Growth of the Gluegent Series Enables efficient management of user IDs of employees across a corporate group and its supply-chain partners in a zero-trust* environment. SaaS and IT A. Increase revenue from new and upgrading clients infrastructure other cloud- based
Slide 24: Bolster the Subscription Business of LifeKeeper
Bolster the Subscription Business of LifeKeeper Subscription Revenue of LifeKeeper Outside Japan Revenue for FY 2023: Up 22.6% YoY Subscription revenue of CAGR: Up 55.8% LifeKeeper has been following a solid growth path outside Japan. We have also stepped up our sales and marketing efforts for i
Slide 25: Sales of YourDesk
A cloud-based e-medical records A system that manages employees' system that assists psychiatric seating arrangement and attendance hospitals in making greater use of DX records in a teleworking and hot- solutions desking environment The Japanese government has Sales of YourDesk established the Of
Slide 26: API Solutions Business
API Solutions Business API stands for application programming interface, which is a set of protocols that enables different software programs and applications to share functions. Example of How APIs Work in Business A company can launch a new API service by sharing data with Map app other companie
Slide 27: Our Approaches to the API Solutions Business
Our Approaches to the API Solutions Business We have been upgrading our API-related technologies to be able to meet diverse business needs. SIOS launched its API solutions business in 2017 in anticipation of the emergence of APIs that connect many systems to make them work with each other. We ha
Slide 28: API Solutions Business Model
API Solutions Business Model Our dedicated API infrastructure team uses their wealth of professional business and API knowledge to assist corporate clients in designing, developing, operating, and supporting API solutions. One-Stop API Solutions STEP 1 STEP 2 STEP 3 STEP 4 Assisting in Assisting in
Slide 29: Performance of Our API Solutions Business
Performance of Our API Solutions Business Revenue in Our API Solutions Business Revenue for FY 2023: Up 40.3% YoY CAGR: Up 48.9% Our revenue in this business has been following a solid growth path, as our engineering strengths in the field of API economy have met surging business needs. FY2019 FY202
Slide 30: Maximize the Benefits of Generative AI Solutions
Maximize the Benefits of Generative AI Solutions in Our Business Development and Operations Make greater use of generative AI to achieve higher operational productivity and efficiency internally and create greater value for clients Launch a consulting service focused on 1 generative AI solutions Use
Slide 31: Consulting Service Focused on Generative AI Solutions
Consulting Service Focused on Generative AI Solutions We have launched a consulting service focused on Azure OpenAI Service.* Assist in the design Assist in the Assist in the PoC Assist in the and development planning phase phase phase operation phase Identify the Create a PoC Train the client's Dev
Slide 32: 4. Medium-Term Business Plan for FY 2024-2026
4. Medium-Term Business Plan for FY 2024-2026 © SIOS Corporation. All rights Reserved.
Slide 33: Medium-Term Business Plan for FY 2024-2026
Medium-Term Business Plan for FY 2024-2026 We intend to continually bolster our EBITDA and ROIC performance by expanding our SaaS business and growing new businesses. Our goal is to bring our ROIC ratio well above our WACC ratio by FY 2026. （In millions of yen） 2023 2024 2025 2026 EBITDA -147 310 61
Slide 34: Increasing Our Enterprise Value with a Keen Eye on Our Capital Cost
Increasing Our Enterprise Value with a Keen Eye on Our Capital Cost The SIOS Group has been using the ROIC as a key metric to keep track of its financial performance since FY 2019. After experiencing a business downturn in FY 2022, we have taken a variety of actions to bolster our financial strength
Slide 35: Dividend Rates for FY 2023 and 2024
Dividend Rates for FY 2023 and 2024 26th term 27th term 28th term Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended December 31, 2023 December 31, 2023 December 31, 2023 Annual cash dividend per ¥10 ¥５ ¥10 share Dividend rate for FY 2023 ¥5 Projected dividend rate ¥10 (up by ¥5 from the previous
Slide 36: 5. Appendix
5. Appendix © SIOS Corporation. All rights Reserved.
Slide 37: About SIOS Corporation
About SIOS Corporation SIOS is Innovative Open Solutions SIOS Corporation started as a system integrator that provided solutions based on Linux and other varieties of open source software. Today, the company serves as a holding company of the SIOS Group, which includes technology firms specializing
Slide 38: Glossary
Glossary page Term Description Software products sourced 10 Open-source software products developed by Red Hat, Inc., a provider of open-source solutions from Red Hat, Inc. 10 LifeKeeper A failover software product that automatically switches a failed primary server to a backup server 10 On-premises
Slide 39: Cautionary Statement
Cautionary Statement Forward-looking statements about the Company’s business outlook contained in this document reflect management’s assumptions and judgments made on the basis of available information, and may include risks and uncertainties. We caution that significant risks and uncertainties coul
Slide 40: e® SIOS
e® SIOS