Slide 1: Financial Results for the Fiscal Year 2021
Tokyo Stock Exchange 1st Section: Securities Code 3992 Needs Well Inc. Financial Results for the Fiscal Year 2021 (October 1, 2020 – September 30, 2021) November 11, 2021
Slide 2: Agenda
1. 2021/9 Financial report summary 2. 2022/9 Results forecast 3. Growth strategy 4. Reference 2021年9月期 通期 決算説明資料 2
Slide 3: Financial highlights ①
1.1) Financial highlights① Profit increase for 10 consecutive fiscal years and record- high profit achieved Strong performance of telecommunications, logistics and solutions overcame the impact of COVID-19 Net sales 5,752 million JPY YoY +7.2 % − Ordinary profit Ordinary profit margin 582 million JP
Slide 4: Financial highlights ②
1.1) Financial highlights② Net sales Increased YoY from 2Q onwards despite stalling in Q1 Profits Profits at operating profit and lower levels declined YoY in 4Q due to higher bonuses and education expenses to secure talent as well as lower COVID-19 subsidies, but all profit levels achieved double-d
Slide 5: Tokyo Stock Exchange's market restructuring
１．２) Tokyo Stock Exchange’s market restructuring In consideration of the Tokyo Stock Exchange’s market restructuring in April 2022, Needs Well will enact medium- and long-term measures in seeking to satisfy the criteria to list on the Prime Market * Although Needs Well does not currently satisfy the
Slide 6: Performance progression rate
1.3) Performance progression rate Sales were strong for Business Systems SI orders in the telecommunications and logistics related sector and the wide selection of high-value-added projects available for Solutions/Products, etc. Business Systems SI Performance achievement rate, actual sales, (target
Slide 7: Ordinary profit analysis
1.4) Ordinary profit analysis Ordinary profit increased 13.2% year on year with the significant contribution of gross profit having increased 10.4% year on year due to improved productivity and acquisition of high-value-added projects ■ Increase ■ Decrease Unit: million JPY YoY Recruitment costs Inc
Slide 8: Profit & loss statement
1.5) Profit & loss statement Ordinary profit ratio remained at a high level of 10.1% （Up 0.5 pts year-on-year) FY2020/9 Financial Results FY2021/9 Financial Results Unit: million JPY Result Net Sales Result Net Sales Year-on-year Net sales 5,364 - 5,752 - 107.2% Business Systems SI ※ ※ 4,360 75.8% ※
Slide 9: Balance sheet
1.6) Balance sheet Equity ratio at 80.2% *Selection of significant entries only FY2020/9 FY2021/9 Unit: million JPY Result Result Year-on-year Cash and deposits 1,780 2,868 1,088 remain unchanged from the Accounts receivable Prepaid expenses 689 34 938 25 248 -8 previous year Total current assets 2,
Slide 10: Agenda
1. 2021/9 Financial report summary 2. 2022/9 Results forecast 3. Growth strategy 4. Reference 2021年9月期 通期 決算説明資料 10
Slide 11: Results forecast
2.1) Results forecast Forecast of increase in revenue for 2 consecutive fiscal years & increase in profit for 11 consecutive fiscal years with increased productivity from rapidly developing the competency of new graduate employees and the acquisition of high-value-added projects Infrastructure Servi
Slide 12: Dividends and shareholder returns
2.2) Dividends and shareholder returns FY22/9 forecast Dividend per share: 20.00 JPY/share 2 JPY increase in regular dividend Dividend increase for 4 consecutive fiscal years Dividend (JPY; regular and commemorative dividends) and payout ratio 49.3 % Payout ratio (Total 23.00) 47.5% 39.0 % 5.00 32.8
Slide 13: Agenda
1. 2021/9 Financial report summary 2. 2022/9 Results forecast 3. Growth strategy 4. Reference 2021年9月期 通期 決算説明資料 13
Slide 14: 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. 2021年9月期 通期 決算説明資料 14
Slide 15: Growth track
3.2) Growth track Oct 2021 Acquired 70% of Zeroichi Production’s total outstanding shares Net sales Oct 2020 Started Logistics, Connected Businesses Number of personnel Aug 2019 Started AI Business Jun 2019 Tokyo Stock Exchange 1st Section Jun 2018 Tokyo Stock Exchange 2nd Section Oct 2017 Started S
Slide 16: Medium-Term Basic Policy
3.3) Medium-Term Basic Policy Breaking away from the dispatch business, becoming a true system integrator 2021年9月期 通期 決算説明資料 16
Slide 17: Our three strengths
3.4) Our three strengths Capacity for Financial sector accounts for 50% of net sales in financial system main service line, Business Systems SI. development Particularly advanced in life insurance and accident Capacity for insurance sectors. financial Strong performance record in developing systems
Slide 18: Performance targets FY2023/9
3.5) 1 Performance targets FY2023/9 Net sales 10.0 Ordinary profit 1.0 billion JPY billion JPY Billion JPY CAGR (compound annual growth rate) 10.0 Billion JPY CAGR (compound annual growth rate) 1.0 23.1 24.8 100 10 % % 50 5 0 0 2020 2021 2022 2023 2020 2021 2022 2023 Existing businesses M&A Existing
Slide 19: Promotion policies: Sales growth
3.5) 2 Promotion policies: Sales growth Unit: billion JPY Logistics Business Market scale (our forecast) Logistics IoT software solutions market Logistics industry is facing a serious labor shortage +1.2 10.0 (WMS, etc.) as the selection of diversifying needs continues to 2023 103.0 bil. JPY increas
Slide 20: Growth strategy focus points
3.6) Growth strategy 1 Promote improvement of corporate value 2 Launch 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 2021年9月期 通期 決算説明資料 20
Slide 21: Promote improvement of corporate value ⅰ
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 Capital • M&A • Individual investors • Media IR・PR policy • Promotes CI, VI CI: Corporate Identit
Slide 22: M&A, capital and business alliances
3.6) 1 Promote improvement of corporate value ⅱ Proactively pursue M&A, capital and business alliances, and the development of collaborative relationships Capital and business Capital and business Collaboration Share acquisition alliance alliance ITFOR Inc. Logi Revo Co., Ltd. Canon IT Solutions Inc
Slide 23: Expand Logistics Businesses
3.6) 2 Expand Logistics Businesses Facing labor shortages as the needs of the Internet society continue to increase → Increased demand for system development (Developed by Needs Well; launched in August 2021) realizes 3 smart aspects Manpower-saving, Quick process with Visualization of issues paperl
Slide 24: Expand AI Business
3.6) 3 Expand AI Business Expand AI Business by expanding the Work AI lineup * Work AI is a general term for industry-specific AI solutions developed to support corporate DX by utilizing know-how in integration for AI, RPA, etc. AI Remote Education Quantitative visualization of business talks with n
Slide 25: 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 26: Establish business foundation
3.6) 5 Establish business foundation Establishing a business foundation for stable development into the future as a listed company ▶▶▶ Service line composition Business Systems SI Service lines that establish • Expand into the financial sector by the business foundation accumulating business knowled
Slide 27: 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% in FY2023/9 (FY2021/9 results: 10.8%) Expansion strategy Provide DX centered on solutions from Needs Well Coordinating peripheral syste
Slide 28: 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 50% Maintain and expand existing users • Secure repeat customers End user composition ratio • Train highly skilled engineers and expand the scope of expertise
Slide 29: Initiatives directly linked to business
3.7) 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 30: Initiatives supported by systems and activities
3.7) 2 Initiatives supported by systems and activities Work style reform & personnel development • Incentive dates for paid leave, Premium Friday, overtime target of 20 hours • Expand selection of employees eligible for remote work • System for encouraging skill improvement and motivation Increase r
Slide 31: Agenda
1. 2021/9 Financial report summary 2. 2022/9 Results forecast 3. Growth strategy 4. Reference 2021年9月期 通期 決算説明資料 31
Slide 32: Company profile
Company profile As of September, 2021 Company Name Needs Well Inc Head Office 13F, New Otani Garden Court, 4-1 Kioi-cho, Chiyoda-ku, Tokyo, 102-0094 Japan Office - Shinjuku Office : 5F, South Tower, 13-15 Tomihisa-cho, Shinjuku-ku, Tokyo, 162-0067 Japan - Nagasaki Office: 5F, Meijiyasudaseimei Nagas
Slide 33: Business fields
Business fields Needs Well provides total IT services through four services focused on Business Systems SI for finance. Automobiles/ Finance Business Systems SI medical devices/IoT Connected Systems Solution Solutions Business IT platforms AI Infrastructure Services Solutions Business Web Distributi
Slide 34: Business system diagram
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 level of
Slide 35: Business results 1
Business results 1 Net sales Operating profit Unit : million yen Unit : million yen 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 １Q 1,217 1,341 1,418 1,348 １Q 121 110 92 136 ２Q 2,470 2,724 2,809 2,818 ２Q 255 266 267 306 ３Q 3,801 3,739 4,097 4,078 4,262 ３Q 387 354 375 337 434 total 4,5
Slide 36: Business results 2
Business results 2 Profit per share ROE unit：Yen unit：% 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 １Q 9.88 9.04 7.04 10.52 １Q ２Q 20.85 22.02 21.19 23.81 ２Q ３Q 35.51 28.18 30.22 27.30 34.75 ３Q total 36.74 40.81 38.78 41.15 40.99 46.64 total 36.7 24.8 20.2 18.8 16.5 14.7 * Figures are
Slide 37: Business results 3
Business results 3 Capital adequacy ratio Net assets per share unit：% unit：Yen 2016 2017 2018 2019 2020 2021 2016 2017 2018 2019 2020 2021 １Q 66.7 68.5 71.3 74.5 １Q ２Q 62.8 65.4 73.6 75.7 ２Q ３Q 50.5 59.0 71.4 71.2 74.0 ３Q total 49.3 61.4 64.0 73.4 74.5 80.2 total 117.21 179.63 204.99 232.63 262.41 3
Slide 38: Disclaimer and 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