20210203financial results-presentation

Financial Results
for Fiscal Year
Ended December 31, 2020
February 3, 2021
SIOS Corporation
(Stock Code: 3744 on the Second Section of Tokyo Stock Exchange)
© SIOS Corporation All rights Reserved.

Table of Contents
Summary of Business Results for the Fiscal
Year Ended December 31, 2020 (FY 2020)
Review of FY 2020
Medium-Term Business Plan for FY 2021-2023
and Business Forecasts for FY 2021
Ⅰ
Ⅱ
Ⅲ

Summary of Business Results
for the Fiscal Year Ended
December 31, 2020 (FY 2020)
Ⅰ

FY 2019
Results
FY 2020
Results
Change % Change
Net sales 13,686 14,841 ＋1,154 ＋8.4%
Gross profit 4,345 4,465 ＋119 ＋2.8％
Operating profit 54 236 ＋181 ＋329.9％
Ordinary profit 96 256 ＋160 ＋166.4%
Profit (loss)
attributable to owners
of parent
32 310 ＋277 ＋858.4%
EBITDA 145 329 ＋184 ＋127.0%
ROIC 1.7% 6.9% －－
Consolidated Financial Results for FY 2020
4
（In millions of yen）
*EBITDA: Operating profit + Depreciation + Amortization of goodwill
*ROIC: Operating profit after tax / (Shareholders’ equity + Interest-bearing debts)

© SIOS Corporation All rights Reserved. 5
Consolidated Net Sales
Record-high net
sales achieved in
FY 2020
(Up 8.4% YoY)
13,686
14,841
FY2019 FY2020

 Operating profit for FY
2020 increased by ¥181
million from the previous
year.
 EBITDA was up ¥184
million YoY.
Consolidated Operating Profit, EBITDA, and R&D Spending
54
236
145
329
652
616
0
100
200
300
400
500
600
700
800
FY2019 FY2020
Operating Profit EBITDA R&D Spending

Consolidated Balance Sheets
 Property, plant and equipment 186
 Assets:An increase of 592 million yen in cash and deposits and an increase of 556 million yen
in notes and accounts receivable trade.
 Liabilities: An increase of 988 million yen in accounts payable trade and an increase of 228
million yen in advances received.
7
 Intangible assets 226
Current assets
4,479
(including
cash and
deposits of
2,266)
Total liabilities
4,023
(including
interest-bearing
debts of 614)
Total net
assets
1,308
Current assets
6,059
(including
cash and
deposits of
2,858)
Total liabilities
5,303
(including
interest-bearing
debts of 479)
投資その他 438
Total net
assets
1,548
 Property, plant and equipment 131  Intangible assets 112
Total assets
5,332
Total liabilities
and net assets
5,332
Total assets
6,851
Total liabilities
and net assets
6,851
As of December 31, 2019 As of December 31, 2020 （In millions of yen）
 Investment and other assets 438  Investment and other assets 547

Analysis of Consolidated Cash Flows
Cash and cash
equivalents as
of December
31, 2019
Cash flows
from operating
activities
Cash flows
from investing
activities
Cash flows
from financing
activities
Effect of change
in exchange rate
on cash and
cash equivalents
Cash and cash
equivalents as
of December
31, 2020
8
649
2,728
△182 △25
2,136
151

Year-on-Year Changes in Cash Flows
(Millions of yen)
Cash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities
Amount of
YoY
changes
Increase of ¥649 Increase of ¥151 Decrease of ¥182
Breakdown
Increase: Profit before income
taxes
Decrease: Purchase of
shares of subsidiaries and
associates
Decrease: Repayments of
long-term loans payable
+¥409 ¥89 ¥132
Decrease: Notes and accounts
receivable trade
Increase: Gain on transfer of
business
Decrease: Cash dividends
paid
+¥578 ¥329 ¥42
Decrease: Inventories
+¥468
Increase: Notes and accounts
payable trade
+¥988
Increase: Advances received
+¥256

Open System Infrastructure Business
10
Net sales 8,883 million yen, up 15.4％ YoY
 Sales of LifeKeeper*, which is the Group's
core product developed in-house, increased
year on year in Japan, as did sales of
software products sourced from Red Had
Inc.* This was partly because we received
project orders ahead of schedule and partly
because we received several large project
orders from new clients.
 OSS*-related products also achieved a solid
increase in sales.
Note: See the Glossary on Page 30 for descriptions of terms with an asterisk.
7,695
8,883
FY2019 FY2020

Open System Infrastructure Business
Segment income 244 million yen, up 314.2％ YoY
11
 Segment income of the Open System
Infrastructure Business was up YoY as a
result of increased sales.
58
244
FY2019 FY2020

Application Business
12
Net sales 5,957 million yen, down 0.6％ YoY
 Revenues from the provision of support for
system development and implementation,
primarily to educational institutions, achieved
solid growth.
 Revenues from our core software applications
for MFPs*, which were developed in-house,
declined. This was because an increasing
number of corporate users had switched from
a perpetual licensing model to a subscription
model* for these applications.
5,991 5,957
FY2019 FY2020

Application Business
Segment income
Loss of 8 million yen, compared with an
income of 4 million yen the year before
13
 A year-on-year increase in revenues from the
provision of support for system development and
implementation to educational institutions had a
positive impact on the segment income. In
addition, income from the provision of support for
system development and implementation to financial
institutions was up due to the absence of unprofitable
projects that had affected negatively the profitability
of this segment the previous fiscal year.
 These favorable factors were more than offset by the
declined revenues from software applications for
MFPs, and, as a result, the segment loss increased
from the previous year.
△ 4 △ 8
FY2019 FY2020

Review of FY 2020
Ⅱ

Basis for Achieving the SIOS Group Mission
Improve performance
on key management
metrics
Achieve greater
EBITDA and
ROIC
Generate
positive cash
flows
Invest to achieve the mission
Return profit to shareholders and
other stakeholders
Invest in people, R&D, and a
corporate culture that fosters
innovation
Return profit to
shareholders and other
stakeholders
Make the business
foundation more solid
Make the business
Increase sales and
gross profit
Reduce interest-bearing
debts
Maintain good
relationships
with
stakeholders
Carry out
M&A
Release new
products and
services
Enhance existing
products and
services
Raise the level of
customer
satisfaction
Optimizing SG&A expenses

Review of FY 2020①
Release new products
and services
Maintain good
relationships with
stakeholders
Launched a support service for the commercial use of the
Apache Cassandra* distributed open-source database.
Offered the one-time password module for Shibboleth
Identity Provider* as a free OSS product, facilitating the
wider use of OSS.
Repaid ¥130 million of loans payable.
Reduce interest-
bearing debts

Review of FY 2020②
innovation
 SIOS Corporation and SIOS Technology,
Inc. eliminated the mandatory
retirement age effective October 1, 2020.
 The R&D Center operated by SIOS
Technology Corp. in South Carolina was
honored as one of the Best Places to
Work in South Carolina* in 2020.
Return profit to shareholders
and other stakeholders
Resolved to pay a cash dividend of
¥10 per share at fiscal year-end.

Mergers among Consolidated Subsidiaries
To achieve greater operational efficiency and productivity,
the Group has restructured itself to become an organization
that:
1. Operates on a stronger management principle
2. Offers greater cross-selling opportunities for
products and services among Group companies
3. Encourages Group companies to exercise
decentralized autonomy to be resilient to changes in
business environments
Under this arrangement, the Group strives to achieve
sustainable growth.
SIOS Technology,
Inc.
(absorbing and
surviving company)
Gluegent, Inc.
(absorbed
company)
Keyport
Solutions, Inc.
(absorbed
company)
Absorption-type mergers
effective October 1, 2020

Medium-Term Business Plan for
FY 2021-2023 and Business
Forecasts for FY 2021
Ⅲ

Primary Objective and Management Metrics Established
in Medium-Term Business Plan for FY 2021-2023
The Group uses EBITDA and ROIC as its key management metrics to continue to
generate positive cash flow. Positive cash flow enables the Group to invest in
the three driving forces for our growth—people, research and development,
and a corporate culture that fosters innovation—and to return profit to our
shareholders and stakeholders. Through these efforts, the Group works toward
achieving its primary management objective.
Under the mission of making the impossible possible for the people of
the world, the SIOS Group works toward achieving its primary management
objective of pursuing innovative solutions to resolve issues affecting people
and to contribute to a better society.
Primary Management Objective
Management Metrics

Basis for Achieving the SIOS Group Mission
Improve performance
on key management
metrics
Achieve greater
EBITDA and
ROIC
Generate
positive cash
flows
Invest to achieve the mission
Return profit to shareholders and
other stakeholders
innovation
Return profit to
shareholders and other
stakeholders
Make the business
Make the business
Increase sales and
gross profit
Reduce interest-bearing
debts
Maintain good
relationships
with
stakeholders
Carry out
M&A
Release new
products and
services
Enhance existing
products and
services
Raise the level of
customer
satisfaction
Optimizing SG&A expenses
See page 22
See page 22
and 23
See page 23

Key Strategies for FY 2021①
Optimize SG&A
spending
Profit Cube, a consolidated subsidiary of the
Company, will be resolved and merged into SIOS
Technology, Inc., effective April 1, 2021.
Greater cross-selling opportunities for products and
services as well as an enhanced management
structure will enable the Group to achieve greater
operational efficiency and productivity.
Enhance existing
products and services
Aggressively promote the Group's offerings of cloud solutions to
meet corporate clients' increasing appetite to invest in DX*
• Make LifeKeeper work in a cloud environment more effectively
• Step up sales efforts for the Gluegent series
• Provide broader support to universities in their efforts to
implement a cloud environment

Key Strategies for FY 2021②
Return profit to
shareholders
and other
stakeholders
Plans to pay a cash dividend of ¥10 per share
at fiscal year-end.
Optimize SG&A
spending
Close the Platinum Tower Office in Minato-ku, Tokyo, to
reduce office space as most employees are now
working from home
and to cut back on SG&A expenses

Status and Forecast of Subscription Migration for
In-House Products
Revenues from subscription services are on track.
2,133
2,380
2,710
3,110
2,430 2,570
2,740
2,950
FY2020
Actual
FY2021
Forecast
FY2022
Forecast
FY2023
Forecast
Revenues from subscription Revenues from perpetual licensing

Medium-Term Business Plan for FY 2021-2023
Achieve an EBITDA of 770 million yen and an ROIC of 16.8% in
FY 2023 by bolstering revenues from cloud solutions to meet
corporate clients' increasing appetite to invest in DX
2020 2021 2022 2023
EBITDA 329 410 580 770
ROIC 6.9% 9.2% 13.4% 16.8%
25

Consolidated Business Forecasts for FY 2021
FY 2020
Results
FY 2021
Forecasts
Change % Change
Net sales 14,841 15,500 +658 +4.4%
Operating profit 236 320 +83 +35.5%
Ordinary profit 256 350 +93 +36.5%
Profit (loss)
attributable to owners
of parent
310 250 △60 △19.4%
EBITDA 329 410 +80 +24.4%
ROIC 6.9% 9.2% －－
We intend to maintain our momentum of growth for 11 consecutive
fiscal years and achieve net sales of ¥15.5 billion in FY 2021.
26

Cash Dividends for FY 2020 and 2021
Resolved to pay a cash dividend
increased to ¥10 per share.
Year-end cash
dividend
(for fiscal year ended
December 31, 2020)
Plans to pay a cash dividend of ¥10 per share.
Projected year-end
cash dividend
(for fiscal year ending
December 31, 2021)
23rd term 24th term 25th term
Fiscal year ended
December 31, 2019
Fiscal year ended
December 31, 2020
Fiscal year ending
December 31, 2021
Annual
cash
dividend
per share
¥5 ¥10 ¥10

Appendix

SIOS is Innovative Open Solutions
About SIOS Corporation
29
Headquarters SIOS Building, 2-12-3 Minami Azabu Minato-ku, Tokyo, Japan
Capital 1,481 million yen
Established May 23, 1997
No. of employees 454 on a consolidated basis (as of December 31, 2020)
Main consolidated
subsidiaries
Japan:
SIOS Technology, Inc.
Profit Cube Inc.
Listed on the Second Section of the Tokyo Stock Exchange, SIOS Corporation is a holding company that manages
subsidiaries having a wealth of expertise and assets in open source software, including Linux, AI and cloud technologies, and
Fintech.
Under the mission of 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.
U.S.A.:
SIOS Technology Corp.

Glossary
30
Page Term Description
10 LifeKeeper A failover software product that automatically switches a failed primary server to a backup server.
10
Software products sourced
from Red Hat, Inc.
Open-source software products developed by Red Hat, Inc., a provider of open-source solutions.
10 OSS
Abbreviation for open source software, 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 applications for
multifunction printers (MFPs)
A multifunction printer (MFP) is a piece of office equipment that incorporates print, scan, copy, and fax
capabilities into one unit. The Group develops, markets, and updates document management software
applications, such as Quick Scan and Speedoc, that run on an MFP.
12 Subscription model
A business model that charges customers a recurring monthly or annual fee to access a software product
or service.
16 Apache Cassandra
A management system for an open-source distributed database developed by Facebook to facilitate the storage of a
massive amount of data
16 Shibboleth Identity Provider
An open-source software product that enables federation single sign-on on a website within an organization or
across organizations
17
Best Places To Work
in South Carolina
The program run by the South Carolina Chamber of Commerce, partnering with Best Companies Group and SC Biz
News, to solicit feedback from employees to their employers and recognize employers who are among those rated
highest by their employees
22 Digital transformation (DX)
A process in which a company uses data and digital technology to transform its products, services, and
business models to more effectively respond to constantly changing business environments and deliver
greater value to customers and society as well as to transform its business processes and organizational
structure and culture to gain greater competitive advantage.

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 Corporation on 03-6401-5125
(+81-3-6401-5125 from outside Japan)
For inquiries about this document
or fill in and send an online inquiry form available at:
https://mk.sios.com/SIOS_Inquiry.html
Cautionary Statement
31

20210203financial results-presentation

20210203financial results-presentation

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