Intelligent Wave Inc. · TSE:4847

Intelligent Wave — H1 FY06/24 Earnings Presentation

29 slides from Intelligent Wave's earnings presentation, Feb 9, 2024

  1. Slide 1: Financial Results for 1H FY06/24

    Financial Results for 1H FY06/24 (July 1 to December 31, 2023) [Non-Consolidated] Intelligent Wave Inc. Announced on February 9, 2024 Copyright © 2024, INTELLIGENT WAVE INC All rights reserved.

  2. Slide 2: Financial Results for 1H FY06/24

    Financial Results for 1H FY06/24 Forecast for FY06/24 Key initiatives in FY06/24 Reference Copyright © 2024, INTELLIGENT WAVE INC. All rights reserved. 2

  3. Slide 3: Overview

    Overview Q1 sales and profits declined year on year from the impact of large-scale hardware sales in the same period last year, but 1H sales and profits increased due to growth in three main areas: system development, cloud services, and security. Orders increased significantly due to an increase in

  4. Slide 4: Sales by Category

    Sales by Category Sales in the three main areas of system development, cloud services, and security grew. Third-party products and services decreased YoY due to large-scale hardware sales for FEP* system renewal in the previous fiscal year. Million yen 1H FY06/23 1H FY06/24 Change(YoY) Net sales 6,7

  5. Slide 5: Sales by Business Domain

    Sales by Business Domain The payment systems, etc. segment, an area of expansion in the payment business domain, grew due to large-scale projects for credit card companies. FEP declined due to large-scale hardware sales for FEP system renewal in the previous year. Cloud services grew due to an expan

  6. Slide 6: Top Three Clients by Sales

    Top Three Clients by Sales Concerning DNP, existing projects performed well. The System Integrator business increased YoY due to large-scale projects for credit card company. The Credit card company business increased YoY due to an expanded scale of system development in multiple areas. Million yen

  7. Slide 7: Sales by Type (Recurring and Spot)

    Sales by Type (Recurring and Spot) Recurring revenue is increasing steadily due to higher sales of cloud services. In the future, the company aims to expand the scale of its business in combination with the growth of flow sales such as system development. Million yen …Recurring …Spot ※ Recurring rat

  8. Slide 8: Operating income

    Operating income Gross profit increased due to higher sales in system development and cloud services, as well as strong profit margins on large-scale project and other system development. SG&A expenses increased from 2H FY06/23 due to investments in human capital and improvements to the office envir

  9. Slide 9: Cloud Service Business

    Cloud Service Business Net sales increased YoY due to an expanded user base (seven companies in total), mainly due to the fraud detection service IFINDS. Profit is improving due to changes in the service composition ratio and stabilization of the operation system. Million yen FY06/23 FY06/24 1Q 2Q 3

  10. Slide 10: Amount of orders

    Amount of orders Amount of orders increased in 'Payment and finance' due to large-scale projects for credit card company, large- scale infrastructure construction and operation project, and FEP renewal. In Security, orders increased in a wide range of products in existing focus areas and expansion a

  11. Slide 11: Orders on Hand

    Orders on Hand Orders on hand increased significantly due to projects in multi-year contracts for infrastructure construction and operation, cloud services and security, in addition to large-scale project for credit card company. ■…Payment & Finance (System Development) ■…Payment & Finance (Maintena

  12. Slide 12: Forecast for FY06/24

    Financial Results for 1H FY06/24 Forecast for FY06/24 Key Initiatives in FY06/24 Reference Copyright © 2023, INTELLIGENT WAVE INC. All rights reserved. 12

  13. Slide 13: FY06/24 Full-year Forecasts

    FY06/24 Full-year Forecasts Million yen FY06/23 FY06/24 Change actual forecast (full year) 1H 2H Full year 1H 2H Full year Net sales 6,789 6,585 13,374 7,000 8,000 15,000 +12.2% Payment and finance 5,393 5,015 10,408 5,160 5,840 11,000 +5.7% Cloud services 881 985 1,867 1,190 1,310 2,500 +33.9% Secu

  14. Slide 14: FY06/24 Forecasts

    FY06/24 Forecasts Sales are expected to increase for in-house products and hardware in 2H. In addition, the company aims to achieve its full-year forecast by increasing system development sales, mainly for large-scale project, and security sales. Profits are also expected to achieve the full-year fo

  15. Slide 15: Shareholder Returns

    Shareholder Returns An interim dividend will be paid for the first time from FY06/24 in order to enhance shareholder returns. The dividend amount is 15 yen per share, as per the latest dividend forecast. dividend dividind payout ratio 40 40th Anniversary Dividend of 10 yen 49.6 45.1 48.8 40.6 42.3 1

  16. Slide 16: Key Initiatives in FY06/24

    Financial Results 1H FY06/24 Forecast for FY06/24 Key Initiatives in FY06/24 Reference Copyright © 2024, INTELLIGENT WAVE INC. All rights reserved. 16

  17. Slide 17: Status of Strategies by Business Domain

    Status of Strategies by Business Domain • Received orders for large-scale infrastructure construction and operation Payment and • Expanding scale of system development in multiple areas at two major credit card finance companies • launching initiatives with DNP to create new payment services. • Incr

  18. Slide 18: Payment business

    Payment business Expanding the scope of our payment business domain based on the development experience and business expertise gained in the existing domains. Credit card companies’ systems（on-premises ） Existing Expanding domain domain Extarnal Fundamental system Connection System System operation

  19. Slide 19: Card Fraud Detection Service / Cutting-Edge Initiatives

    （アクワイアラー） Card Fraud Detection Service / Cutting-Edge Initiatives カード発行会社様 （イシュアー） 電話・メール・FAXで情報連携 加盟店様 As part of the Security Consortium jointly promoted by IWI and JCB, we have been expanding the functionality ！ 不正取引検知 of ！ 不審利用検知 MATTE, JCB’s web-based information sharing service for fraudulent

  20. Slide 20: Expansion in the Security Business

    Expansion in the Security Business We are narrowing down the cybersecurity products we have been focusing on, and plan to enhance the sales of our in-house product CWAT for internal information leakage prevention, as well as the key management solution HSM and an ID management solution, which are in

  21. Slide 21: Sustainability Activity Initiatives

    Sustainability Activity Initiatives We are promoting several initiatives to realize the four materialities we have identified. Creating an environmentally Creating a future society Creating a safe and Risk Management and friendly and sustainable where each person can shine prosperous future Governan

  22. Slide 22: Reference

    Financial Results 1H for FY06/24 Forecast for FY06/24 Key initiatives in FY06/24 Reference Copyright © 2024, INTELLIGENT WAVE INC. All rights reserved. 22

  23. Slide 23: Cost of manufacturing

    Cost of manufacturing Million yen FY06/23 FY06/24 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Materials cost 21 6 13 9 10 7 Labor cost 731 737 696 721 745 744 Expenses 486 517 512 519 569 667 Subcontracting cost 892 911 929 1,047 1,085 1,124 Total manufacturing 2,132 2,173 2,152 2,298 2,411 2,544 cost Work in progress

  24. Slide 24: SG&A expenses

    SG&A expenses Million yen FY06/23 FY06/24 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Salaries 384 388 372 417 387 382 Training and 14 22 18 23 24 12 recruiting Equipment and 120 118 125 133 127 108 maintenance, etc. Advertising 9 13 20 17 14 17 Others 124 124 132 138 139 137 Total 651 665 667 728 691 656 1H FY06/23 1H

  25. Slide 25: Cash Flows

    Cash Flows ＋764 Million yen (1,213) (624) Income before taxes +859 Purchase of intangible assets (915) D&A +512 Purchase of PP&E (220) A/R increase (57) Purchase of investment securities (102) A/P decrease +31 (74) Inventory increase 配当金の支払 (524) Dividends 3,619 4,694 Income taxes paid (282) JPY 1,0

  26. Slide 26: Historical performance

    Historical performance Million yen ■… Net sales ■ … Operating income 13,374 11,493 11,187 10,603 10,920 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 1,556 1,177 1,036 1,130 731 702 921 678 484 547 371 389 417 228

  27. Slide 27: Company overview

    Company overview As of December 31,2023 Established December 27, 1984 Location Kayabacho Tower, 1-21-2 Shinkawa, Chuo-ku, Tokyo Employees 475 Parent company Dai Nippon Printing Co., Ltd. (50.73%) Capital stock JPY843.75k Shares 26,340,000 Shareholders 9,808 outstanding Ownership (%) % of shareholder

  28. Slide 28: Reference) Our Cloud Services

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

  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

Intelligent Wave — H1 FY06/24 Earnings Presentation on 6ix