Slide 1: Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2024
Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2024 Datasection Inc. February 22, 2024 Ticker Symbol: 3905
Slide 2: Table of Contents
Table of Contents 1. Results for the Third Quarter of the Fiscal Year Ending March 31, 2024 2. Plan for the Fiscal Year ending March 31, 2024 3. Appendix 4. Reference Materials (Company Profile) 1 © 2024 Datasection Inc.
Slide 3: 1. Results for the Third Quarter of the Fiscal Year Ending March 31, 2024
1. Results for the Third Quarter of the Fiscal Year Ending March 31, 2024 2 © 2024 Datasection Inc.
Slide 4: Consolidated Financial Highlights
1. Results for the Fiscal Year Ending March 31, 2024 (Q3) Consolidated Financial Highlights • Year on year, revenues increased across the company. Still led by overseas subsidiaries • On the other hand, the company recorded significant losses, mainly due to delays in the restructuring of the busines
Slide 5: Comparison of Year-on-Year Sales
Comparison of Year-on-Year Sales (Simple aggregated basis of each company) • Continued growth both in Japan and overseas based on a simple aggregated basis of each company • Overseas, the pace of growth is generally in the "40% range" + 16.3% + 12.6% + 44.4% Japan Overseas Consolidated 4 © 2024 Data
Slide 6: Comparison of Year-on-Year Operating Profit
Comparison of Year-on-Year Operating Profit (Simple aggregated basis of each company) • Comparable profit growth achieved overseas on a simple aggregated basis of each company • In Japan, despite the cost increases associated with growth, the cost of structural reform factors could not be absorbed +
Slide 7: FY2024 Q3: Breakdown of Profit Items
FY2024 Q3: Breakdown of Profit Items • Business factors include: Deficit due to restructuring factors in Japan • In addition, temporary extraordinary loss resulted in a significant final deficit -34,831 -34,831 Operating Non-operating Ordinary Income taxes - Other Net loss loss expenses profit (loss
Slide 8: Notes on Adjusted EBITDA
1. Results for the Fiscal Year Ending March 31, 2024 (Q3) Notes on Adjusted EBITDA • Depreciations, which are the source of real CF generation, are almost at the same level as last year • In the current year, business factors related to the restructuring in Japan are expected to have a negative impa
Slide 9: Consolidated Net Sales and Operating Profit Trends (Quarterly)
Consolidated Net Sales and Operating Profit Trends 1. Results for the Third Quarter of the (Quarterly) Fiscal Year Ending March 31, 2024 Unit: Millions of yen Net sales (left axis) Operating profit (right axis) 2020/3 2021/3 2022/3 2023/3 2024/3 Fiscal term Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 10: Consolidated Financial Position (Balance Sheet)
1. Results for the Third Quarter of the Consolidated Financial Position (Balance Sheet) Fiscal Year Ending March 31, 2024 • The loss for the period almost directly contributed to the decrease in assets and capital items • The capital adequacy ratio declined, but will recover as a result of the annou
Slide 11: Progress of Leading Indicator: Retail Marketing FollowUP
1. Results for the Third Quarter of the Progress of Leading Indicator: (Retail Marketing "FollowUP") Fiscal Year Ending March 31, 2024 Net sales leading indicators increased steadily year-on-year • The number of stores adopting and cameras installed, a medium-term KPI for net sales, increased by 30%
Slide 12: Addressing Financial Challenges
Addressing Financial Challenges 11 © 2024 Datasection Inc.
Slide 13: Temporary Extraordinary Loss
Temporary Extraordinary Loss 1. With regard to the treatment of the preference dividend rights of the class shares (preferred stock) issued by the consolidated subsidiary Jach, the recoverability of the long-term loans receivable from preferred shareholders, which is an existing receivable, was revi
Slide 14: Revision of Full-Year Consolidated Earnings Forecast
Revision of Full-Year Consolidated Earnings Forecast We have revised the consolidated earnings forecast for the fiscal year ending March 31, 2024 (April 1, 2023 - March 31, 2024), previously announced on May 15, 2023, as follows. (Millions of yen) Net sales Operating Adjusted Ordinary profit Profit
Slide 15: 2. Plan for the Fiscal Year ending March 31, 2024
2. Plan for the Fiscal Year ending March 31, 2024 14 © 2024 Datasection Inc.
Slide 16: Earnings Forecast (Revised Plan)
2. Plan for the Fiscal Year ending March 31, 2024 Earnings Forecast (Revised Plan) • Net sales revised upward and profit items revised downward due to various factors • While taking into account temporary factors, in accordance with our policy for the current fiscal year, we will pursue balanced gro
Slide 17: Factors behind the Revision of Consolidated Full-Year Results
Factors behind the Revision of Consolidated Full-Year Results (Simple aggregated basis of each company: operating profit or loss) Previous Present forecast forecast Business in Japan Overseas business Consolidation/elimination Operating profit 16 © 2024 Datasection Inc.
Slide 18: Financial Trends Highlights
2. Plan for the Fiscal Year ending March 31, 2024 Financial Trends Highlights • Achieving growth in Japan and overseas • In order to make the domestic business profitable, the policy is to secure management resources by rebuilding the business portfolio and proceed with financial restructuring to tr
Slide 19: Adjusted EBITDA (Revised Plan)
2. Plan for the Fiscal Year ending March 31, 2024 Adjusted EBITDA (Revised Plan) • Full-year adjusted EBITDA is also expected to be negative due to business factors No significant change in non-CF amortization factors due to execution of M&A strategy Adjusted Operating profit EBITDA (50M) (250M) Amo
Slide 20: Changes in Management Structure and Recent Actions
Changes in Management Structure and Recent Actions 19 © 2024 Datasection Inc.
Slide 21: Notice of Change of Representative Director and President
Notice of Change of Representative Director (Resignation) and Change of President Reason for resignation: (Feb. 14: Disclosed as appropriate) Poor performance in recent years “Progress of Disclosure: Losses of Consolidated Subsidiaries" (Large Extraordinary Losses), "Notice of Reversal of Deferred T
Slide 22: Third-Party Allotment
Third-Party Allotment Announced on Jan. 26 that funds (totaling 1,497 million yen) will be raised through two types of new shares and share acquisition rights from First Plus Financial Holdings PTE. Ltd. (FPF, Singapore) through an introduction by VLC Holdings Co., Ltd. (*) * Announced change of pay
Slide 23: Basic Agreement on Comprehensive Business Alliance with VLC Holdings
Announcement of Basic Agreement on Comprehensive Business Alliance with VLC Holdings Co., Ltd. The two companies have decided to form a comprehensive business alliance with the aim of strengthening the business bases of both groups and further increasing their corporate value < Reasons for the Allia
Slide 24: Notice of the Extraordinary General Meeting of Shareholders
Notice of the Extraordinary General Meeting of Shareholders (Record Date and Schedule, etc.) The following resolutions were adopted regarding the determination of the record date for convening the Extraordinary General Meeting of Shareholders of our Company to be held on Wednesday, April 17, 2024, t
Slide 25: New Director Candidates and Reasons for Election
Notice of Extraordinary General Meeting of Shareholders (New Director Candidates and Reasons for Election) Names of New Director Reasons for Election Candidates The candidate has extensive work experience in a wide range of fields, including investment banking, investment in Japan and overseas, glob
Slide 26: Notice of Invitation of Advisor
Notice of Invitation of Advisor Invited Mr. Ryuji Sakamaki, a specialist and entrepreneur in the field of statistical analysis AI, as an advisor < Purpose of Invitation > • Engaged in various business activities that use data for business, and actively worked in technical laboratories of major EC co
Slide 27: Major Policies and Progress This Year
Major Policies and Progress This Year 26 © 2024 Datasection Inc.
Slide 28: Topics and Key Policies for the Period
Topics and Key Policies for the Period (Announced May 15, 2023) 1. Business Portfolio 2. Strengthen Global Structure 3. Improve Customer Value • Continue overseas growth • Review business segments on • Launch new internally while balancing the investment a global basis developed products of resource
Slide 29: Strengthening Global Infrastructure (Consolidation of Panama and Spain)
Strengthening Global Infrastructure (Consolidation of Panama and Spain) New consolidation of two (2) companies, Alianza FollowUP Panamá S.A. (Panama) and FollowUP Customer Experience S.I (Spain). Consolid % of votes Primary Business Activity ated FY held Driving real-world change (improving business
Slide 30: Reporting Segment Change
Reporting Segment Change Reporting segments are reorganized into two, "Japan" and "Overseas” • Review and upgrade business and performance management systems from a management approach perspective • Facilitate understanding by investors and other stakeholders • Align with the future business strateg
Slide 31: Business Acquired from The ROOM4D Group
Business Acquired from The ROOM4D Group (September) • Acquisitions in high-growth areas such as data science and generative AI • In the area of data analysis and AI solutions, a core business in which our Group has strengths, we intend to further enhance our competitiveness by strengthening our engi
Slide 32: New Service Release (FollowUP Shelf Analytics)
New Service Release (FollowUP Shelf Analytics) • Launch of FollowUP Shelf Analytics, a product shelf analysis solution for supermarkets (Wednesday, June 28, 2023) • AI-based real-time detection of missing items, misplaced items, wrong number of faces, and wrong prices on product shelves to reduce lo
Slide 33: Strengthen Investor Relations
Strengthen Investor Relations (Start distribution of corporate research reports) Commence analyst coverage (first session on Monday, October 30, 2023) We will strive to further improve information disclosure, including this business. (From our website) We are pleased to inform you that a corporate r
Slide 34: Sustainability Policy
Development of Sustainability Policy Sustainability Policy Contributing to the world and people's lives 100 years from now. 33 © 2024 Datasection Inc.
Slide 35: Sustainability Policy: CEO Message and Vision
Sustainability Policy Message from the CEO Sustainability Vision We are striving for sustainable Contributing to the world and people's growth and business breakthroughs lives 100 years from now. with a strong will to continue improving people's lives around the world. Since its establishment in 200
Slide 36: Sustainability Policy: Partnerships and Diversity
Sustainability Policy Creating innovation through Promoting diversity and inclusion global partnerships on a global basis By supporting stable management, especially in our South We partnered with companies in Southeast Asia to promote diversity American subsidiaries, we help developing countries cr
Slide 37: Redefining Business Areas
Redefining Business Areas By returning to its strengths in “data and AI”, the company has redefined its three (3) Business Domain: Data Science Marketing System Integration Solution 36 © 2024 Datasection Inc.
Slide 38: 3. Appendix
3. Appendix 37 © 2024 Datasection Inc.
Slide 39: Consolidated Net Sales Trends
Consolidated Net Sales Trends 3. Appendix Fiscal 2024/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3 term Q3 Net sales (Millions of 317 376 439 593 721 1,088 1,168 1,389 1,692 1,925 1,549 yen) 38 © 2024 Datasection Inc.
Slide 40: Consolidated Operating Profit Trends
Consolidated Operating Profit Trends 3. Appendix Fiscal 2024/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3 term Q3 Operating profit 57 85 28 79 45 100 14 18 77 (56) (182) (Millions of yen) 39 © 2024 Datasection Inc.
Slide 41: Consolidated Ordinary Profit Trends
Consolidated Ordinary Profit Trends 3. Appendix Fiscal 2024/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3 term Q3 Ordinary profit 60 85 36 71 45 95 5 31 165 41 (217) (Millions of yen) 40 © 2024 Datasection Inc.
Slide 42: Trends in Consolidated Profit Attributable to Owners of Parent
Trends in Consolidated Profit Attributable to Owners of Parent 3. Appendix Fiscal 2024/3 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3 term Q3 Profit attributable to owners of parent 45 63 26 36 16 37 (17) (41) 2 (534) (852) (Millions of yen) 41 © 2024 Datasection Inc.
Slide 43: 4. Reference Materials
4. Reference Materials 42 © 2024 Datasection Inc.
Slide 44: Company Profile
Company Profile 43 © 2024 Datasection Inc.
Slide 45: We ARE ... Change the Frame
We ARE ... What we will be ... What we should do ... Change the Frame As a "section" of the World Data Division, we continue to improve the lives of people around the world, revolutionizing the real world with technology and creating new ways of living © Datasection Inc 44
Slide 46: Company Profile: Datasection Inc.
Company Profile Company Profile Datasection Inc. Head Office 8F Gotanda PLACE Bldg., Business Business in Japan 1-3-8, Nishigotanda, Shinagawa-ku, Tokyo, 141-0031, Japan Data Science Domain Marketing Solution Domain Foundation July 11, 2000 System Integration Domain Date Capital 1,527,489,000 yen (a
Slide 47: Company History
Company Profile: Our History Company History Acquisition of The ROOM4D Alliance with Nippontect Systems Jach Technology SpA becomes a subsidiary Capital and business alliance with KDDI Capital and business alliance with Arum in the medical field Acquisition of FollowUP’s store analysis tool business
Slide 48: Our Founder
Company Profile: Our Founder Leading expert on data science workforce development Founder of Datasection Inc. (currently an advisor to our company) / Professor at Digital Hollywood University Director of Media Library, Visiting Professor, Tama University Graduate School Director, Wit Institute, Inc.
Slide 49: Our Leadership
Company Profile: Our Leadership Our Leadership Shinichi Iwata Christian Cafatti President and Director Representative Director CEO and CFO Yuki Jun Nakajima Kohki Sakata Uchiyama Director (External) Director (External) Director (External) © Datasection Inc 48
Slide 50: Our Leadership
Company Profile: Our Leadership Our Leadership Akira Tashiro Shun Ishizaki Daisuke Yokoyama Full-time Audit & Audit & Supervisory Audit & Supervisory Supervisory Board Board Member Board Member Member (External) (External) (External) / CPA © Datasection Inc 49
Slide 51: Introducing the Datasection Group
Company Profile: Datasection Group DATASECTION GROUP The Datasection Group supports DX and business rationalization for a wide range of companies in retail and other industries on a global basis Introducing the with its strengths in large-scale data analysis, high-performance image analysis using AI
Slide 52: Datasection Inc.
Datasection Inc. info@datasection.co.jp 03-6427-2565 8F Gotanda PLACE Bldg., 1-3-8, Nishigotanda, Shinagawa-ku, Tokyo, 141-0031, Japan https://www.datasection.co.jp
Slide 53: Forward-Looking Statements Disclaimer
Forward-Looking Statements Disclaimer • This document has been prepared by the Company for the purpose of providing investors with an understanding of the current status of the Company for their reference. • The information contained herein is based on generally accepted economic, social, and other