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Financial Results
for the 6 Months Ended
June 30, 2017
© SIOS Technology, Inc. All rights Reserved. 1
July 31, 2017
SIOS Technology, Inc.
(Stock Code: 3744 on the Second Section of Tokyo Stock Exchange)
Table of Contents
Summary of Business Results for the 6
Months Ended June 30, 2017
Initiatives to Achieve Sustained Growth
Medium-Term Sales and Profit Plan and
Business Forecasts for Fiscal Year Ending
December 31, 2017
Ⅰ
Ⅱ
Ⅲ
© SIOS Technology, Inc. All rights Reserved. 2
© SIOS Technology, Inc. All rights Reserved.
Summary of Business Results
for the 6 Months Ended
June 30, 2017
3
Ⅰ
Results for the
6 months ended
June 30, 2016
Results for the
6 months ended
June 30, 2017
Change % Change
Net sales 6,238 6,226 (11) (0.2%)
Gross profit 2,268 2,162 (106) (4.7%)
Operating
income 330 173 (156) (47.5%)
Ordinary income 292 184 (108) (37.0%)
Profit attributable
to owners
of parent
88 89 +0 +1.1%
EBITDA 417 260 (156) (37.5%)
© SIOS Technology, Inc. All rights Reserved. 4
Consolidated Financial Results
for the 6 Months Ended June 30, 2017
*EBITDA: Operating income + Depreciation + Amortization of goodwill
In millions of yen
3,225
3,626
4,392
6,238 6,226
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2013/2Q 2014/2Q 2015/2Q 2016/2Q 2017/2Q
5
Consolidated Net Sales in First Halves of the Past 5 Fiscal Years
Net sales for the first 6 months of FY 2017 were slightly
down from the same period the year before, during
which we achieved substantial year-on-year growth.
© SIOS Technology, Inc. All rights Reserved.
In millions of yen
1H FY 2013 1H FY 2014 1H FY 2015 1H FY 2016 1H FY 2017
© SIOS Technology, Inc. All rights Reserved. 6
Analysis of Consolidated Net Sales
Net sales for the 6 months ended June 30, 2017, were slightly down from the
same period the year before, with a sales increase in the open system
infrastructure business offset by a comparable decrease in the application
business due to a projected shift of sales to the second half of the fiscal year.
(233)
6,226
Net sales for the
6 months ended
June 30, 2016
Increase in net sales
in open system
infrastructure business
Net sales for the
6 months ended
June 30, 2017
In millions of yen
6,238
+221
Decrease in net sales
in application
business
129 43
(55)
330
173152
221
305
282
264
-100
0
100
200
300
400
2013/2Q 2014/2Q 2015/2Q 2016/2Q 2017/2Q
営業利益 研究開発費
© SIOS Technology, Inc. All rights Reserved. 7
Consolidated Operating Income and R&D Spending
in First Halves of the Past 5 Fiscal Years
 Operating income for the first half of FY 2017 down by
156 million yen from the same period the year before
 R&D spending on a general upward trend
In millions of yen
1H FY 2013 1H FY 2014 1H FY 2015 1H FY 2016 1H FY 2017
Operatin
g income
R&D
spending
© SIOS Technology, Inc. All rights Reserved. 8
(183)
Operating income for
the 6 months ended
June 30, 2016
Increase in segment
income in open
system infrastructure
business
In millions of yen
Decrease in segment
income in
application business
Analysis of Consolidated Operating Income
Operating income for the 6 months ended June 30, 2017, was down
from the same period the year before, with an increase in segment
income in the open system infrastructure business more than offset by
a larger decrease in the application business.
+26
173
330
Operating income for
the 6 months ended
June 30, 2017
161
76
(21)
417
260
-50
0
50
100
150
200
250
300
350
400
450
2013/2Q 2014/2Q 2015/2Q 2016/2Q 2017/2Q
9
Consolidated EBITDA in First Halves of the Past 5 Fiscal Years
EBITDA in the first half of FY 2017 down by 156
million yen from the same period the year before
© SIOS Technology, Inc. All rights Reserved.
In millions of yen
1H FY 2013 1H FY 2014 1H FY 2015 1H FY 2016 1H FY 2017
Consolidated Balance Sheets
As of June 30, 2017
Current assets
3,977
Tangible fixed
assets 182
Intangible fixed
assets
916
Investment and
other assets
461
In millions of yen
Total liabilities
3,817
Total net assets
1,719
© SIOS Technology, Inc. All rights Reserved. 10
As of December 31, 2016
Current assets
3,615
Tangible fixed
assets 193
Intangible fixed
assets
971
Investment and
other assets
475
Total liabilities
3,608
Total net assets
1,647
 An increase in current assets from December 31, 2016, to June 30, 2017,
reflected an increase of 320 million yen in cash and deposits.
 An increase in total liabilities reflected an increase of 244 million yen in
advance received.
Total assets: 5,256 Total assets: 5,537
 The SIOS Group had sufficient cash and cash equivalents as of
June 30, 2017, thanks to substantial cash flows collected from
operating activities.
11
Analysis of Consolidated Cash Flows
© SIOS Technology, Inc. All rights Reserved.
Cash and cash
equivalents as
of December
31, 2016
Cash flows from
operating
activities
Cash flows from
investing
activities
Cash flows from
financing
activities
Effect of
exchange rate
change on
cash and cash
equivalents
1,793
(11)
469
2,114
In millions of yen
(93) (44)
Cash and cash
equivalents as
of June 30,
2017
3,203
81
Open System Infrastructure Business
Up 6.9%
 Increased sales of LifeKeeper*, one of our core
products
 Increased sales of OSS* support services and related
products
 Increased sales of software products sourced from Red
Hat, Inc.*
 Achieved record sales for the first half of a fiscal
year
 Achieved an increase in segment income
primarily due to increased sales of the
profitable LifeKeeper
© SIOS Technology, Inc. All rights Reserved. 12
Net sales 3,424 million yen, up 6.9% year on year
Segment income 107 million yen, up 32.7% year on year
In millions of yen
3,424
107
Net sales
Segment
income
1H FY 2016 1H FY 2017
Net sales
Segment incomeUp 32.7%
Note: See the Glossary on Page 26 for descriptions of terms with an asterisk.
3,034
249
Down 73.6%
Application Business
Down 7.7%
 Increased sales of software applications for
MFPs*
 Sales of software applications for financial
institutions declined substantially year on year,
primarily because the majority of their sales was
projected to shift to the second half of the fiscal
year.
 A substantial decline in sales of software
applications for financial institutions drove the
segment income in the application business
down.
© SIOS Technology, Inc. All rights Reserved. 13
Net sales 2,801 million yen, down 7.7% year on year
Segment income 65 million yen, down 73.6% year on year
In millions of yen
2,801
65
Net sales
1H FY 2016 1H FY 2017
Net sales
Segment incomeSegment
income
© SIOS Technology, Inc. All rights Reserved.
Initiatives for Sustainable Growth
- Beyond the 20th Anniversary of SIOS -
14
Ⅱ
Beyond the 20th Anniversary of SIOS
© SIOS Technology, Inc. All rights Reserved.
2017 marks the 20th anniversary of SIOS Technology, Inc., which was originally founded under
the trade name Ten Art-ni Corporation in 1997. At the time, Microsoft Windows, UNIX, and
mainframe OSs* were the mainstream OSs, and Linux was considered a
variant for hobbyists.
Nevertheless, we saw the great potential of Linux to go beyond the hobbyist community and
into the mainstream business community and set out to promote Linux in a variety of business
applications.
Today, Linux has become one of the most widely used OSs in the world, finding its way into
millions of smartphones running on Google’s Android.
Our business with open source software, which includes Linux, has grown to become one of the
pillars that sustain the growth of the SIOS Group.
The drive to make the impossible possible is at the heart of our actions.
As we celebrate our 20th anniversary, we have a new corporate mission:
Making the impossible possible for the people of the world.
The SIOS Group pursues innovative solutions to resolve issues
affecting people and to contribute to a better society.
15
Notes: Linux is a trademark of Linus Torvalds.
All other company names and product names in this document are registered trademarks or trademarks of their respective companies.
Making the impossible possible
for the people of the world
Mission Statement of the SIOS Group
© SIOS Technology, Inc. All rights Reserved.
The SIOS Group pursues innovative solutions
to resolve issues affecting people and to contribute
to a better society.
IMPOSSIBLE
16
SIOS contributes to a better society through its business growth
The Better Society That SIOS Helps Build
© SIOS Technology, Inc. All rights Reserved.
Creative
Environment
Fulfilling
Life
Sustainable &
Connected
Society
17
© SIOS Technology, Inc. All rights Reserved.
Enable people to leave mundane and repetitive tasks to
AI and use information provided by AI to focus on higher-
level tasks that require human judgment and intelligence.
SIOS iQ*
Analyze a vast amount of information and present it in a
visualized format that is easy to understand and in a
manner that serves as a basis for creating new business
opportunities.
Integration of big-data infrastructure
Provide business users with greater options and flexibility in
selecting and implementing software applications,
reducing their dependence on a small number of
established software developers.
OSS
Predict system
problems
Identify causes of problems
and assist in solving them
Data collection
Data
processing
Data
store
Data
mart
Data analysis
Operation and
maintenance
Lower cost
Flexibility
Latest
technolog
y
18
Creative
Environment
People focus on creative work while leaving
mundane and repetitive tasks to machines.
The Better Society That SIOS Pursues
SIOS
OSS
© SIOS Technology, Inc. All rights Reserved.
The Better Society That SIOS Pursues
Provide secure, easy-to-use cloud-based services that
assist corporate clients in building a workplace in which
employees can achieve their full potential.
Gluegent cloud services*
Allow a user to use a single username and password to
safely access multiple applications in a corporate
environment, eliminating the need to remember multiple
usernames and passwords.
Single sign-on solutions
Visualize and enhance each employee’s mental state so
as to achieve greater communication and productivity in
the workplace.
Willysm*
Employees self-
assess their mental
state
Single sign-on
Managers monitor their
employees’ mental
state
19
Fulfilling Life
Everyone has the opportunity to develop their skills and
reach their full potential in a comfortable and supportive
workplace that promotes their physical and mental health.
© SIOS Technology, Inc. All rights Reserved.
The Better Society That SIOS Pursues
Convert paper documents into digital files to achieve
significantly greater productivity in sharing, storing, and
reusing information as well as to reduce paper use to save
finite natural resources and preserve the environment.
Speedoc*
Minimize downtime of enterprise information systems and
keep them running in the event of a disaster to ensure
continuity of mission-critical operations in society.
LifeKeeper, DataKeeper
Provide software applications that ensure safe and secure
transactions at banks, securities companies, and
insurance companies, and contribute to community
development through regional financing.
Ensure safe and secure financial
transactions
Integrated
management
database
Analysis
tools
Reports
Scan
documents
Quickly store
scanned
documents in
designated folders
20
Sustainable &
Connected Society
Enable people to live in a safe and secure environment.
Make efficient and responsible use of natural resources.
Create dynamic and thriving communities.
Backup systemPrimary system
Failover
Data replication
© SIOS Technology, Inc. All rights Reserved.
Driving Forces Behind Our Mission
21
3 driving forces behind SIOS’s mission to pursue a better society
Our Mission
Making the
impossible possible
for the people
of the world
People
Culture Technology
Fulfilling Life
Driving
forces SIOS continues to refine and upgrade its
proprietary technologies to venture into new
territories.
Technology
SIOS attracts employees with diverse values
and professional backgrounds and helps
them reach their full potential.
People
SIOS fosters a culture that encourages
employees to be independent-minded and
demonstrate the pioneering spirit of an
entrepreneur who creates trends, not simply
follows them.
Culture
Creative
Environment
Sustainable &
Connected Society
© SIOS Technology, Inc. All rights Reserved.
Medium-Term Sales and Profit
Plan and Business Forecasts for
Fiscal Year Ending December 31,
2017
22
Ⅲ
5.9 6.5 7.3
9.3
12.0
12.6
14.0
16.0
230 290
120 (40)
650 670
770
1,000
Medium-Term Sales and Profit Plan
FY 2013
Results
FY 2014
Results
FY 2016
Results
FY 2018
Plan
FY 2019
Plan
FY 2015
Results
Net
sales
EBITDA
FY 2017
Plan
Continue to invest in R&D and improve effectiveness in
marketing and sales so as to achieve net sales of 16
billion yen and EBITDA of 1 billion yen in FY 2019
FY 2012
Results
© SIOS Technology, Inc. All rights Reserved. 23
In billions of yen
In millions of yen
Results for the
6 months ended
June 30, 2017
(in millions of yen)
Forecasts for fiscal
year ending
December 31, 2017
(in millions of yen)
Percentage of
achievement
Net sales 6,226 12,600 49.4%
Operating
income 173 500 34.6%
Ordinary income 184 480 38.3%
Profit attributable to
owners of parent 89 320 27.8%
EBITDA 260 670 38.8%
© SIOS Technology, Inc. All rights Reserved. 24
Consolidated Business Forecasts for Fiscal Year
Ending December 31, 2017
Payment of Dividends for Fiscal Year Ending December 31, 2017
We chose, instead of paying dividends, to invest in research and
development in FY 2016 and increase our efforts to implement the
medium-term business plan.
Annual dividends for
fiscal year ended
December 31, 2016
(Declared)
Based on the business forecasts for fiscal year ending December 31,
2017 outlined in the previous page, we project payment of a dividend
of 5.00 yen per share for FY 2017.
Annual dividends for
fiscal year ending
December 31, 2017
(Forecast)
18th term 19th term 20th term 21st term
Fiscal year ended
December 31,
2014
Fiscal year ended
December 31,
2015
Fiscal year ended
December 31,
2016
(Declared)
Fiscal year ending
December 31,
2017
(Forecast)
Annual
dividends
per share
5.00 yen 0.00 yen 0.00 yen 5.00 yen
© SIOS Technology, Inc. All rights Reserved. 25
Glossary
Page Term Description
12 LifeKeeper
A failover software product that automatically switches a failed primary
server to a backup server.
12 Open-source software (OSS)
Software whose source code, which is the fundamental component of the
program, is made available for free and can be used, modified, and
redistributed.
12
Software products sourced from
Red Hat, Inc.
Open-source software products developed by Red Hat, Inc., a provider of
open-source solutions.
13 Software applications for MFPs
A multifunction printer (MFP) is a piece of office equipment that incorporates
print, scan, copy, and fax capabilities into one unit. SIOS develops, markets,
and updates Quick Scan and other document management software
applications running on an MFP.
15 OS (operating system)
A basic software program that manages a computer’s hardware and
software resources.
18 SIOS iQ
A software platform that comprehensively monitors, analyzes, and optimizes
operations of applications in virtual and cloud environments to improve
performance and efficiency and ensure reliability in resolving complex issues.
19 Gluegent cloud services
Services that assist corporate clients in using the cloud to achieve greater
operational efficiency, such as Gluegent Flow, a cloud-based workflow
management system.
19 Willysm
A software application that monitors employees’ mental state to manage
stress in the workplace and enhance their motivation.
20 Quick Scan and Speedoc
Software applications that convert paper documents into digital files using an
MFP scanner.
© SIOS Technology, Inc. All rights Reserved. 26
Cautionary Statement
© SIOS Technology, Inc. All rights Reserved. 27
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 could cause actual performance to differ materially from what is
discussed in the forward-looking statements. Significant risks and uncertainties that might
affect our performance include, but are not limited to, the economic environment and
market conditions in which we operate.
Call the IR Section of SIOS Technology, Inc. on 03-6401-5111
(+81-3-6401-5111 from outside Japan)
or fill in and send an online inquiry form available at:
https://lp.sios.jp/MRK_Inquiry_SIOS_english.html
For inquiries about this document
20170731financial results-presentation

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20170731financial results-presentation

  • 1. Financial Results for the 6 Months Ended June 30, 2017 © SIOS Technology, Inc. All rights Reserved. 1 July 31, 2017 SIOS Technology, Inc. (Stock Code: 3744 on the Second Section of Tokyo Stock Exchange)
  • 2. Table of Contents Summary of Business Results for the 6 Months Ended June 30, 2017 Initiatives to Achieve Sustained Growth Medium-Term Sales and Profit Plan and Business Forecasts for Fiscal Year Ending December 31, 2017 Ⅰ Ⅱ Ⅲ © SIOS Technology, Inc. All rights Reserved. 2
  • 3. © SIOS Technology, Inc. All rights Reserved. Summary of Business Results for the 6 Months Ended June 30, 2017 3 Ⅰ
  • 4. Results for the 6 months ended June 30, 2016 Results for the 6 months ended June 30, 2017 Change % Change Net sales 6,238 6,226 (11) (0.2%) Gross profit 2,268 2,162 (106) (4.7%) Operating income 330 173 (156) (47.5%) Ordinary income 292 184 (108) (37.0%) Profit attributable to owners of parent 88 89 +0 +1.1% EBITDA 417 260 (156) (37.5%) © SIOS Technology, Inc. All rights Reserved. 4 Consolidated Financial Results for the 6 Months Ended June 30, 2017 *EBITDA: Operating income + Depreciation + Amortization of goodwill In millions of yen
  • 5. 3,225 3,626 4,392 6,238 6,226 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2013/2Q 2014/2Q 2015/2Q 2016/2Q 2017/2Q 5 Consolidated Net Sales in First Halves of the Past 5 Fiscal Years Net sales for the first 6 months of FY 2017 were slightly down from the same period the year before, during which we achieved substantial year-on-year growth. © SIOS Technology, Inc. All rights Reserved. In millions of yen 1H FY 2013 1H FY 2014 1H FY 2015 1H FY 2016 1H FY 2017
  • 6. © SIOS Technology, Inc. All rights Reserved. 6 Analysis of Consolidated Net Sales Net sales for the 6 months ended June 30, 2017, were slightly down from the same period the year before, with a sales increase in the open system infrastructure business offset by a comparable decrease in the application business due to a projected shift of sales to the second half of the fiscal year. (233) 6,226 Net sales for the 6 months ended June 30, 2016 Increase in net sales in open system infrastructure business Net sales for the 6 months ended June 30, 2017 In millions of yen 6,238 +221 Decrease in net sales in application business
  • 7. 129 43 (55) 330 173152 221 305 282 264 -100 0 100 200 300 400 2013/2Q 2014/2Q 2015/2Q 2016/2Q 2017/2Q 営業利益 研究開発費 © SIOS Technology, Inc. All rights Reserved. 7 Consolidated Operating Income and R&D Spending in First Halves of the Past 5 Fiscal Years  Operating income for the first half of FY 2017 down by 156 million yen from the same period the year before  R&D spending on a general upward trend In millions of yen 1H FY 2013 1H FY 2014 1H FY 2015 1H FY 2016 1H FY 2017 Operatin g income R&D spending
  • 8. © SIOS Technology, Inc. All rights Reserved. 8 (183) Operating income for the 6 months ended June 30, 2016 Increase in segment income in open system infrastructure business In millions of yen Decrease in segment income in application business Analysis of Consolidated Operating Income Operating income for the 6 months ended June 30, 2017, was down from the same period the year before, with an increase in segment income in the open system infrastructure business more than offset by a larger decrease in the application business. +26 173 330 Operating income for the 6 months ended June 30, 2017
  • 9. 161 76 (21) 417 260 -50 0 50 100 150 200 250 300 350 400 450 2013/2Q 2014/2Q 2015/2Q 2016/2Q 2017/2Q 9 Consolidated EBITDA in First Halves of the Past 5 Fiscal Years EBITDA in the first half of FY 2017 down by 156 million yen from the same period the year before © SIOS Technology, Inc. All rights Reserved. In millions of yen 1H FY 2013 1H FY 2014 1H FY 2015 1H FY 2016 1H FY 2017
  • 10. Consolidated Balance Sheets As of June 30, 2017 Current assets 3,977 Tangible fixed assets 182 Intangible fixed assets 916 Investment and other assets 461 In millions of yen Total liabilities 3,817 Total net assets 1,719 © SIOS Technology, Inc. All rights Reserved. 10 As of December 31, 2016 Current assets 3,615 Tangible fixed assets 193 Intangible fixed assets 971 Investment and other assets 475 Total liabilities 3,608 Total net assets 1,647  An increase in current assets from December 31, 2016, to June 30, 2017, reflected an increase of 320 million yen in cash and deposits.  An increase in total liabilities reflected an increase of 244 million yen in advance received. Total assets: 5,256 Total assets: 5,537
  • 11.  The SIOS Group had sufficient cash and cash equivalents as of June 30, 2017, thanks to substantial cash flows collected from operating activities. 11 Analysis of Consolidated Cash Flows © SIOS Technology, Inc. All rights Reserved. Cash and cash equivalents as of December 31, 2016 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Effect of exchange rate change on cash and cash equivalents 1,793 (11) 469 2,114 In millions of yen (93) (44) Cash and cash equivalents as of June 30, 2017
  • 12. 3,203 81 Open System Infrastructure Business Up 6.9%  Increased sales of LifeKeeper*, one of our core products  Increased sales of OSS* support services and related products  Increased sales of software products sourced from Red Hat, Inc.*  Achieved record sales for the first half of a fiscal year  Achieved an increase in segment income primarily due to increased sales of the profitable LifeKeeper © SIOS Technology, Inc. All rights Reserved. 12 Net sales 3,424 million yen, up 6.9% year on year Segment income 107 million yen, up 32.7% year on year In millions of yen 3,424 107 Net sales Segment income 1H FY 2016 1H FY 2017 Net sales Segment incomeUp 32.7% Note: See the Glossary on Page 26 for descriptions of terms with an asterisk.
  • 13. 3,034 249 Down 73.6% Application Business Down 7.7%  Increased sales of software applications for MFPs*  Sales of software applications for financial institutions declined substantially year on year, primarily because the majority of their sales was projected to shift to the second half of the fiscal year.  A substantial decline in sales of software applications for financial institutions drove the segment income in the application business down. © SIOS Technology, Inc. All rights Reserved. 13 Net sales 2,801 million yen, down 7.7% year on year Segment income 65 million yen, down 73.6% year on year In millions of yen 2,801 65 Net sales 1H FY 2016 1H FY 2017 Net sales Segment incomeSegment income
  • 14. © SIOS Technology, Inc. All rights Reserved. Initiatives for Sustainable Growth - Beyond the 20th Anniversary of SIOS - 14 Ⅱ
  • 15. Beyond the 20th Anniversary of SIOS © SIOS Technology, Inc. All rights Reserved. 2017 marks the 20th anniversary of SIOS Technology, Inc., which was originally founded under the trade name Ten Art-ni Corporation in 1997. At the time, Microsoft Windows, UNIX, and mainframe OSs* were the mainstream OSs, and Linux was considered a variant for hobbyists. Nevertheless, we saw the great potential of Linux to go beyond the hobbyist community and into the mainstream business community and set out to promote Linux in a variety of business applications. Today, Linux has become one of the most widely used OSs in the world, finding its way into millions of smartphones running on Google’s Android. Our business with open source software, which includes Linux, has grown to become one of the pillars that sustain the growth of the SIOS Group. The drive to make the impossible possible is at the heart of our actions. As we celebrate our 20th anniversary, we have a new corporate mission: Making the impossible possible for the people of the world. The SIOS Group pursues innovative solutions to resolve issues affecting people and to contribute to a better society. 15 Notes: Linux is a trademark of Linus Torvalds. All other company names and product names in this document are registered trademarks or trademarks of their respective companies.
  • 16. Making the impossible possible for the people of the world Mission Statement of the SIOS Group © SIOS Technology, Inc. All rights Reserved. The SIOS Group pursues innovative solutions to resolve issues affecting people and to contribute to a better society. IMPOSSIBLE 16
  • 17. SIOS contributes to a better society through its business growth The Better Society That SIOS Helps Build © SIOS Technology, Inc. All rights Reserved. Creative Environment Fulfilling Life Sustainable & Connected Society 17
  • 18. © SIOS Technology, Inc. All rights Reserved. Enable people to leave mundane and repetitive tasks to AI and use information provided by AI to focus on higher- level tasks that require human judgment and intelligence. SIOS iQ* Analyze a vast amount of information and present it in a visualized format that is easy to understand and in a manner that serves as a basis for creating new business opportunities. Integration of big-data infrastructure Provide business users with greater options and flexibility in selecting and implementing software applications, reducing their dependence on a small number of established software developers. OSS Predict system problems Identify causes of problems and assist in solving them Data collection Data processing Data store Data mart Data analysis Operation and maintenance Lower cost Flexibility Latest technolog y 18 Creative Environment People focus on creative work while leaving mundane and repetitive tasks to machines. The Better Society That SIOS Pursues SIOS OSS
  • 19. © SIOS Technology, Inc. All rights Reserved. The Better Society That SIOS Pursues Provide secure, easy-to-use cloud-based services that assist corporate clients in building a workplace in which employees can achieve their full potential. Gluegent cloud services* Allow a user to use a single username and password to safely access multiple applications in a corporate environment, eliminating the need to remember multiple usernames and passwords. Single sign-on solutions Visualize and enhance each employee’s mental state so as to achieve greater communication and productivity in the workplace. Willysm* Employees self- assess their mental state Single sign-on Managers monitor their employees’ mental state 19 Fulfilling Life Everyone has the opportunity to develop their skills and reach their full potential in a comfortable and supportive workplace that promotes their physical and mental health.
  • 20. © SIOS Technology, Inc. All rights Reserved. The Better Society That SIOS Pursues Convert paper documents into digital files to achieve significantly greater productivity in sharing, storing, and reusing information as well as to reduce paper use to save finite natural resources and preserve the environment. Speedoc* Minimize downtime of enterprise information systems and keep them running in the event of a disaster to ensure continuity of mission-critical operations in society. LifeKeeper, DataKeeper Provide software applications that ensure safe and secure transactions at banks, securities companies, and insurance companies, and contribute to community development through regional financing. Ensure safe and secure financial transactions Integrated management database Analysis tools Reports Scan documents Quickly store scanned documents in designated folders 20 Sustainable & Connected Society Enable people to live in a safe and secure environment. Make efficient and responsible use of natural resources. Create dynamic and thriving communities. Backup systemPrimary system Failover Data replication
  • 21. © SIOS Technology, Inc. All rights Reserved. Driving Forces Behind Our Mission 21 3 driving forces behind SIOS’s mission to pursue a better society Our Mission Making the impossible possible for the people of the world People Culture Technology Fulfilling Life Driving forces SIOS continues to refine and upgrade its proprietary technologies to venture into new territories. Technology SIOS attracts employees with diverse values and professional backgrounds and helps them reach their full potential. People SIOS fosters a culture that encourages employees to be independent-minded and demonstrate the pioneering spirit of an entrepreneur who creates trends, not simply follows them. Culture Creative Environment Sustainable & Connected Society
  • 22. © SIOS Technology, Inc. All rights Reserved. Medium-Term Sales and Profit Plan and Business Forecasts for Fiscal Year Ending December 31, 2017 22 Ⅲ
  • 23. 5.9 6.5 7.3 9.3 12.0 12.6 14.0 16.0 230 290 120 (40) 650 670 770 1,000 Medium-Term Sales and Profit Plan FY 2013 Results FY 2014 Results FY 2016 Results FY 2018 Plan FY 2019 Plan FY 2015 Results Net sales EBITDA FY 2017 Plan Continue to invest in R&D and improve effectiveness in marketing and sales so as to achieve net sales of 16 billion yen and EBITDA of 1 billion yen in FY 2019 FY 2012 Results © SIOS Technology, Inc. All rights Reserved. 23 In billions of yen In millions of yen
  • 24. Results for the 6 months ended June 30, 2017 (in millions of yen) Forecasts for fiscal year ending December 31, 2017 (in millions of yen) Percentage of achievement Net sales 6,226 12,600 49.4% Operating income 173 500 34.6% Ordinary income 184 480 38.3% Profit attributable to owners of parent 89 320 27.8% EBITDA 260 670 38.8% © SIOS Technology, Inc. All rights Reserved. 24 Consolidated Business Forecasts for Fiscal Year Ending December 31, 2017
  • 25. Payment of Dividends for Fiscal Year Ending December 31, 2017 We chose, instead of paying dividends, to invest in research and development in FY 2016 and increase our efforts to implement the medium-term business plan. Annual dividends for fiscal year ended December 31, 2016 (Declared) Based on the business forecasts for fiscal year ending December 31, 2017 outlined in the previous page, we project payment of a dividend of 5.00 yen per share for FY 2017. Annual dividends for fiscal year ending December 31, 2017 (Forecast) 18th term 19th term 20th term 21st term Fiscal year ended December 31, 2014 Fiscal year ended December 31, 2015 Fiscal year ended December 31, 2016 (Declared) Fiscal year ending December 31, 2017 (Forecast) Annual dividends per share 5.00 yen 0.00 yen 0.00 yen 5.00 yen © SIOS Technology, Inc. All rights Reserved. 25
  • 26. Glossary Page Term Description 12 LifeKeeper A failover software product that automatically switches a failed primary server to a backup server. 12 Open-source software (OSS) Software whose source code, which is the fundamental component of the program, is made available for free and can be used, modified, and redistributed. 12 Software products sourced from Red Hat, Inc. Open-source software products developed by Red Hat, Inc., a provider of open-source solutions. 13 Software applications for MFPs A multifunction printer (MFP) is a piece of office equipment that incorporates print, scan, copy, and fax capabilities into one unit. SIOS develops, markets, and updates Quick Scan and other document management software applications running on an MFP. 15 OS (operating system) A basic software program that manages a computer’s hardware and software resources. 18 SIOS iQ A software platform that comprehensively monitors, analyzes, and optimizes operations of applications in virtual and cloud environments to improve performance and efficiency and ensure reliability in resolving complex issues. 19 Gluegent cloud services Services that assist corporate clients in using the cloud to achieve greater operational efficiency, such as Gluegent Flow, a cloud-based workflow management system. 19 Willysm A software application that monitors employees’ mental state to manage stress in the workplace and enhance their motivation. 20 Quick Scan and Speedoc Software applications that convert paper documents into digital files using an MFP scanner. © SIOS Technology, Inc. All rights Reserved. 26
  • 27. Cautionary Statement © SIOS Technology, Inc. All rights Reserved. 27 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 could cause actual performance to differ materially from what is discussed in the forward-looking statements. Significant risks and uncertainties that might affect our performance include, but are not limited to, the economic environment and market conditions in which we operate. Call the IR Section of SIOS Technology, Inc. on 03-6401-5111 (+81-3-6401-5111 from outside Japan) or fill in and send an online inquiry form available at: https://lp.sios.jp/MRK_Inquiry_SIOS_english.html For inquiries about this document