Results of Operations for the First Half of the Fiscal Year Ending August 31, 2021

April 2021

SERAKU Co., Ltd.

Copyright © SERAKU Co., Ltd. All Right Reserved.

I. Company Overview

2

Copyright © SERAKU Co., Ltd. All Right Reserved.

Company Overview

Management Policy: Create and foster businesses through IT education/training

services and contribute to the advancement of society.

Company name:

SERAKU Co., Ltd.

Established:

December 1987

Representative:

Tatsumi Miyazaki, Representative Director

Capital:

299,495,500 yen (as of March 31, 2021)

Employees:

2,495 on a consolidated basis (as of February 28, 2021)

Location:

Nishishinjuku Prime Square Bldg. 7-5-25 Nishishinjuku,

Shinjuku-ku, Tokyo

Group companies:

P's Engineering (wholly owned subsidiary)

SERAKU ECA (wholly owned subsidiary)

Listed exchange:

Tokyo Stock Exchange, First Section (stock code 6199) Listed on November 20, 2017

3

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Our Business Model

Based on a business model of creating IT professionals through education that can respond to new technologies, we aim to achieve higher growth by building a continuously cumulative profit structure and making investments in growing business domains

IT System Construction and Operation

System integration (SI) domain

Digital transformation (DX) domain

Construction/operation of IT systems

Cloud domain, customer success domain (DX

(long-term projects)

domain for the emergence and growth of

Industry-specific IT support (for substantial

companies' needs)

IT needs)

Unified three-way growth (recruiting, training, operations) in step with changes in technology trends and the nature of companies' requirements

Use our own education programs to create experts in new technology domains where markets are growing and there is a shortage of people

and personnel of Sharing resources technology

Network Services

Agricultural IT domain Digital healthcare domain

Midori Cloud

Vital Program

Currently working on

new services

Focusing investments on social issues with the best prospects for growth

Education-based IT professional creation

Internal recruiting and training allow quickly creating large numbers of IT engineers

Recruiting

Training

×

×

Sales skill

Large investments when market conditions are favorable produces medium to long-

skill

skill

term sales growth

We have trained more than 3,000 engineers and have

Limit recruiting when market conditions are unfavorable in order to place priority on

operational know-how obtained from participation in highly

earnings

sophisticated projects

4

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Business Segments and Service Domain

  • Long-term,steady growth and growing size of the System Integration segment, along with substantial added value and fast growth of the Digital Transformation segment

Digital Transformation (DX)

Focusing on three sectors with the most growth potential as digitalization continues to advance, aiming for social

reform and fast growth

Midori Cloud

Cloud & Solutions Business

Customer Success Solutions Business

Midori Cloud Business

  • Infrastructure solutions
  • IoT cloud support center
  • Cybersecurity
  • Introduction and support services for operation of Salesforce.com
  • Design of marketing activities
  • Data science
  • Agricultural IoT service (Midori Cloud)
  • Livestock IoT service (Farm Cloud)
  • Solutions for the agriculture and fisheries sector

System Integration (SI)

Two sources of growth: Operation of existing IT systems, a business with long-term steady growth,

and technology support for industries with substantial IT needs

Financial/social systems

Operation of IT infrastructures

Yokohama branch

Information communication systems

Operation of IT systems

Nagoya branch

Enterprise systems

Osaka branch

Service management

Fukuoka branch

  • Quality assurance

Mechanical Design and Engineering

P's Engineering

5

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DX: Cloud & Solutions Business

  • Total support, including design, construction, operation, surveillance and security, for establishing a cloud ICT environment for companies
  • The need for these services is growing fast due to COVID-19; growing by shifting engineers to the DX domain and strengthening alliances

IoT cloud support center

24-hour Cloud infrastructure and IoT services every day

24-hour/365-day operation

Facilities with outstanding

security and resilience to disasters

Managed service provider (MSP)

for IoT systems

Business alliances

Automation of system operations

and usage of AI

Security operations center

Cybersecurity

Vulnerability diagnosis service, support from installation to operation of security products

Diagnosis service to identify

vulnerabilities

SOC operation support

Assistance for assembling a framework

(SOC engineer on site)

Installation of security products

Endpoint/UTM/CASB/VDI/others

*Planning on adding more security products (alliances)

Cloud infrasolutions

A broad spectrum of support for creating a cloud corporate ICT environment

Design and construction services

Server

Linux／Windows／UNIX

Network infrastructures

Virtualization/Hyperconverg

ed infrastructure (HCI)

Cloud

Kitting

Plan to complete the training of 200 certified Microsoft engineers by August 2021

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DX: Customer Success Solutions Business

Specializing in the Salesforce platform, which has a high market share in the SFA/CRM domain and strengthening the shift from engineers in the SI domain to those in the DX domain

Salesforce.com utilization support services

Already assisting more than 250 companies due to rapid market growth

Providing utilization support both on site and remotely

Utilization assessment program

Utilization support service

Salesforce manager support service

Design of marketing activities

  • Salesforce Pardot/Marketing Cloud operation
  • Digital marketing support using a company's customer data

Data science

  • Tableau operation using data science engineers
  • Data science and business intelligence support centered on customer data

Expand services in line with the addition of Salesforce services, such as Salesforce Anywhere (collaboration tool) and Slack (business collaboration)

In April 2021, SERAKU and NTT Data launched a business reform support service that begins with support for using Salesforce

NTT Data, which is the largest partner of Salesforce.com in Japan, handles the sale of products, consulting and

other activities

×

SERAKU plans to train 500 Salesforce engineers over the next three years. These experts will provide primarily

on-site Salesforce utilization support to NTT Data's customers

The goal of this close relationship with NTT Data is to become the leader in Japan for business reform support

linked to this utilization assistance

Plan to complete the training of 170 certified Salesforce engineers by August 2021 (ranking among

the most in Japan) and to have 500 of these engineers within three years

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DX: Midori Cloud Business

A platform to support agricultural production (IoT device x Cloud service × Data science)

A platform for agriculture

Used at more than 2,400 locations

Midori Cloud

In use in all 47 Japanese prefectures

Use agricultural production data for data-driven agriculture

A platform for pig and chicken farming

Used at 73 locations

Farm Cloud

Boosts productivity through the visualization of buildings and equipment for pigs and chickens

Environmental measurement and records

IoT devices measure environmental parameters at an agricultural operation, store data in the cloud and generate notices of abnormalities.

Production plans and work records

Use PCs and smartphones for production plans and records of work performed. Also facilitates GAP certification and implementation.

Centralized oversight of several buildings raises shipment volumes and earnings

Warnings and other messages can be received anywhere to allow quickly responding to problems

Automatic environmental control

Windows, temperature control, ventilation and other items are controlled automatically or remotely via an app.

Data comparisons and analysis

Data are analyzed and compared with data at other locations and AI and machine learning are used to improve production.

Livestock

Office/

Status report

Head office

building

other location

Agriculture and Fisheries solutions for companies and the public sector

Primary industry DX by using agricultural production support platforms and SERAKU technologies

Agricultural production support

SERAKU technologies

platforms

×

AI/machine learning

Midori Cloud

UI/UX optimization

System/applications

Communication/network

Farm Cloud

Hardware/IoT

8

Digitalization

  • Sensing
  • IoT device installation
  • Data collection
  • Use of smart devices to record data

Boosts productivity

  • BI tools for visualization
  • Development of UI/UX
  • AI for automation/labor- saving measures
  • Control by using the IoT

Improves management

  • Optimization of equipment and animal feed
  • Support for receiving certifications
  • Higher efficiency
  • Sales channel optimization

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DX: Midori Cloud Business

Examples of Agriculture and Fisheries solutions

Asparagus production using smart

agriculture technology

The Smart Agriculture Demonstration Project

of Japan's Ministry of Agriculture, Forestry

and Fisheries (Minami-Shimabara, Nagasaki)

Smart agriculture provides the visualization of temperature and water supervision for the stability of production.

This also creates a production system that overcomes the harvesting and shipment bottlenecks due to a labor shortage. This project will be used as the guideline for asparagus production that uses smart agriculture technology.

Asparagus farms are a sector that is lagging behind regarding the use of data. This project is aimed at revolutionizing the asparagus growing business.

Equipment management system

using Midori Note

Solutions for major forestry companies

At businesses nationwide the grow tree seedlings, there has been a need for the centralized oversight of production progress and the use of equipment at multiple locations. SERAKU developed equipment, inventory and other management functions for inclusion in Midori Note to provide this centralized supervision.

These additional functions were developed quickly because Midori Note already provided a standardized format for production management.

An IoT chicken cage system using

Farm Cloud

A solution for a large chicken business

Cages used for raising chickens have sensors and control devices. Connecting these items to SERAKU's Farm Cloud transforms this cage system into an IoT system.

With Farm Cloud, monitoring and analyzing data are easy. This allows using data to improve chicken farming operations and the collection of eggs.

This technology can convert a legacy cage system into an IoT system quickly and at a low cost.

9

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System Integration Business

  • Growth of the education-based IT professional creation business along with the consistent growth of long-term IT infrastructure/system operation relationships
  • More added value by shifting experienced professionals to the DX domain and making them project managers

Operation of IT infrastructure/systems

Assign tasks that match each engineer's skill level at long-term continuous IT infrastructure and IT system operation projects

  • Use education-based IT professional creation to consistently increase the number of engineers
  • More than 75% of business is large-scale operation projects that require long-term continuous operation
  • The number of customers and projects is increasing because of the large volume of IT needs
  • More customers at locations other than Tokyo (Yokohama, Nagoya, Osaka, Fukuoka)
  • Progress with workforce diversity, such as more female leaders, continuing to use people after childbirth and other major personal events, the use of teleworking to provide services, and other measures

Industry-specific IT support

Growth by giving people specialized skills for market sectors with very high demand for IT support and strengthening relationships with large system integration firms

Financial/social systems

Information communication

systems

Enterprise systems

  • Train IT professionals with business knowledge in order to work in market sectors with strong demand for IT support
  • Work as a subcontractor at large projects of major system integration firms and receive more orders directly as the prime vendor
  • Aim for growth by using collaboration and alliances with partners

Steady growth based on the education-based IT professional creation model and the provision of greater added value by

shifting people to the DX domain

  • SERAKU's exclusive IT professional creation model underpins growth by using introductory lessons and then lessons using actual work environments to train people with no experience so they can be assigned to projects within two to three months
  • To provide greater added value, experienced people acquire more advanced skills for DX activities, project management and other higher level jobs

Resuming recruiting activities to aim for more growth

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SERAKU's Competitive Strengths in the System Integration Business

Recruiting skill

  • Recruiting activities that shift people to the growing IT sector (hire people with work experience but no IT experience who have the potential to learn and advance)
  • Recruiting for full-time employees targets new graduates as well as hiring people throughout the year on a nationwide

scale

  • Training programs and a lineup of innovative services allows SERAKU to offer attractive career opportunities; up to 2,500 applications are received every month

Training skill

  • The initial training program is structured to place newly hired people in actual projects after only two to three months
  • Practical training that uses the same equipment and environments as for actual projects
  • The SERAKU Jonetsu University is a platform for sharing knowledge and upgrading skills

Sales skill

  • Sales activities are adding more than 100 new customers every year
  • A sound base for relationships with many large system integration firms
  • Customers span many industries and business models that require IT services

750

Number of SERAKU Customers

500

250

0

Aug. 2017

Aug. 2018

Aug. 2019

Aug. 2020

11

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II. 1H FY8/21 Results of Operations

12

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1H FY8/21 Financial Highlights (1)

  • Sales in both the System Integration and Digital Transformation segments were generally as planned
  • Operating profit was 62.3% higher than one year earlier
  • Ordinary profit was higher than planned because of employment adjustment subsidies

1H FY8/20 results

1H FY8/21 results

(Millions of yen)

(% to sales)

(% to sales)

(YoY change)

Net sales

6,550

-

7,268

-

+11.0%

Gross profit

1,560

23.8%

1,790

24.6%

+14.8%

Operating

441

6.7%

716

9.9%

+62.3%

profit

Ordinary

446

6.8%

1,110

15.3%

+148.9%

profit

Profit

284

4.3%

703

9.7%

+147.0%

13

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1H FY8/21 Financial Highlights (2)

  • Second half sales are usually more than half of fiscal year sales
  • First half sales were generally as planned
  • Sales are on track for reaching the fiscal year forecast

Forecast

FY8/21

Results

FY8/20 Results

FY8/19 Results

(Millions of yen)

1H forecast 7,2652H forecast 7,755

3,520

3,748

(1Q)

(2Q)

48.4%

3,161

3,389

3,546

3,674

(1Q)

(2Q)

(3Q)

(4Q)

47.6%

2,581

2,700

2,984

3,143

(1Q)

(2Q)

(3Q)

(4Q)

46.3%

0%

20%

40%

60%

80%

100%

14

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1H FY8/21 Financial Highlights (3)

  • Securing stable earnings in the System Integration segment and focusing on shifting engineers from the SI domain to the DX domain
  • Big increase in the Digital Transformation segment pct. of sales and operating profit
  • The Digital Transformation segment increased to 25.7% of first half operating profit

Sales by Business Segment

Operating Profit by Business Segment

Mechanical Design

3.1%

Mechanical Design

and Engineering

Mechanical Design

3.0%

Others 0.0%

and Engineering

and Engineering

3.1%

Others

0.2%

Digital Transformation

Digital Transformation

Digital Transformation

Digital Transformation

17.0%

24.5%

14.7%

25.7%

Others

0.0%

System Integration

System Integration

System Integration

System Integration

79.8%

72.4%

85.3%

71.2%

1H FY8/20

1H FY8/21

1H FY8/20

1H FY8/21

(*Excluding sales and profits of the segments that are in red)

15

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Quarterly Sales Growth

  • Sales have increased consistently from quarter to quarter
  • Record-high2Q FY8/21 sales due to a higher engineering staff utilization rate and the ongoing

DX shift

Increase in engineers waiting for assignments

Engineer utilization rate

recovered

Caused by reduction in hiring of inexperienced

Increase in new orders

(Millions of yen)

people in 3Q/4Q FY8/20

Progress with the DX shift

4,000

20% annual growth

(same as increase in number of engineers)

3.674

3,748

3,546

3,520

3,389

3,000

3,143 3,161

2,984

2,324

2,189

2,085

2,000

1,000

2,700

2,581

2,417

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

FY8/18

FY8/19

FY8/20

FY8/21

16

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Quarterly Earnings Growth

  • Gross profit margin has remained above 20% even while making investments for growth
  • Big increases in the gross profit margin and operating margin in 2Q FY8/21

(Millions of yen)

1,200

SG&A expense

Gross profit

Operating

Gross profit

Operating margin

26.3%

profit

margin

ratio

24.1%

24.4%

24.5%

23.7%

24.1%

23.0%

23.1%

22.0%

22.2%

22.6%

22.8%

21.5%

800

20.5%

20.2%

18.2%

17.9%

16.7%

16.3%

16.3%

15.4%

15.3%

14.9%

15.0%

15.2%

15.2%

13.4%

14.4%

11.9%

400

8.8%

8.0%

9.4%

8.5%

10.7%

6.6%

6.0%

5.9%

6.6%

6.8%

7.6%

2.3%

1.3%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0

0.0%

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

FY8/18

FY8/19

FY8/20

FY8/21

17

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Number of Engineers and Utilization Rate

  • The utilization rate under normal conditions is consistently in the 98%-99% range
  • This rate fell only to the 95% level during the COVID-19 crisis and recovered to the 98.6% level as of 2Q FY8/21

(Number of people)

(%)

3,000

99.4

99.2

98.8

98.5

98.7

98.2

98.4

98.2

98.6

98.4

98.6

100.0

96.8

95.0

95.7

Total number

Engineer utilizat

ion rate

of engineers

2,271

2,436

2,379

2,311

2,269

2,000

2,080

2,182

90.0

1,972

2,041

1,899

1,622

1,679

1,736

1,588

1,000

80.0

0

70.0

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

FY8/18

FY8/19

FY8/20

FY8/21

*The utilization rate is for engineers who have completed initial training.

18

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Number of Engineers and Categories

  • The number of engineers started decreasing in 4Q FY8/20 in part because of a temporary reduction in investments for growth
  • The number of DX engineers is increasing as more people are shifted to the DX domain

(Number of people)

2,500

2,000

1,500

1,000

500

0

2,436

2,379

Digital transformation

Process system engineers

System integration

engineers

2,311

engineers

2,182

2,271

2,269

2,080

2,041

1,972

1,899

1,679

1,736

1,588

1,622

1,908

1,991

1,941

1,786

1,749

1,851

1,805

1,739

1,763

1,695

1,503

1,534

1,539

1,583

DX engineer ratio was 19.3% in

2Q FY8/21

DX engineer ratio was 12.0% in

2Q FY8/20

62

64

87

91

99

99

86

82

57

439

438

18

18

35

244

272

346

339

176

213

214

85

88

169

122

135

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

3Q

4Q

1Q

2Q

FY8/18

FY8/19

FY8/20

FY8/21

19

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Education for Engineers

  • A training environment that allows using actual projects gives people more advanced engineering skills
  • Training is focused on acquiring engineering certifications in the DX domain
  • One goal of the engineering training framework is further raising rates charged for engineering

Number of Microsoft Azure Certifications

Number of Salesforce Certifications

SERAKU started using the Microsoft Cloud & AI Engineer Development Program in September 2020 and now has a program capable of training more than 200 Microsoft Azure engineers every year to provide DX services.

ofExamples certifications

•

AZ-900: Microsoft Azure Fundamentals

•

AZ-103: Microsoft Azure Administrator

•

AZ-104: Microsoft Azure Administrator

•

DP-100: Designing and Implementing a Data Science Solution on Azure

and many more

143

43

SERAKU has the fifth-largest number of certified Sales Cloud consultants in Japan (based on March 2021 Salesforce data). Furthermore, SERAKU is among the leaders in Japan in the growth in the number of advanced Salesforce certifications.

ofExamples certifications

•

Sales Cloud consultant

•

Pardot consultant

•

Service Cloud consultant

•

Field Service Lightning consultant

•

Community Cloud consultant

•

Einstein Analytics and Discovery consultant

and many more

339

Salesforce certifications

Advanced Salesforce certif

ications

322

257

113

121

189

82

129 53

97 31

16

Sep. 2020

Feb. 2021

Jan. 2020 Apr. 2020 Jul. 2020 Oct. 2020 Jan. 2021 Feb. 2021

20

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Effects of the COVID-19 Pandemic

Business

  • There were delays in assigning the approximate 200 new graduates hired in April 2020 to projects, but almost all of these new employees had assignments as of December 2020.
  • The engineer utilization rate temporarily decreased because COVID-19 raised the number of people waiting for an assignment. But this rate recovered to 98.6% in 2Q FY8/21.

Recruiting

  • Hiring of inexperienced people was reduced starting in May 2020, but the recruiting of experienced people resumed in January 2021 because of the higher engineer utilization rate and receipt of new orders.
  • Engineers hired in FY8/21 are expected to contribute to sales growth in the next fiscal year.
  • Using different recruiting methods to create new opportunities for hiring people.

Training

  • Completed measures for remote education programs.
  • Online IT engineer training programs ensure consistent quality for all lessons.

Digital transformation

  • Increasing the pace of shifting engineers to the DX domain because of the growing volume of DX needs involving cyber security, customer success solutions and other services

21

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Topics

  • Dec. 20, 2019 Launch of Agricultural Operation Support Service for Assistance with Managing

Agricultural Businesses

A free service that supplies produce market information, weather forecasts and agricultural chemicals information and records production plans and harvests

  • Feb. 27, 2020 IoT/Cloud Support Center Opens in Tokyo

With 24-hour/365-day operations, this center helps meet the growing demand for services in the cybersecurity business and IoT/cloud support center business

  • Mar. 10, 2020 Expansion of Branches in Nagoya and Osaka

To meet the growing need for SERAKU's services in the Nagoya and Osaka areas, the Nagoya and Osaka branches were enlarged for upgrading the environment for training activities and handling a larger volume of work.

  • Apr. 1, 2020 Midori Cloud Selected as a Smart Agriculture Demonstration Project by the

Ministry of Agriculture, Forestry and Fisheries

A business in Nagasaki prefecture with the involvement of Midori Cloud was selected by the Ministry of Agriculture, Forestry and Fisheries as a smart agriculture demonstration project

  • Apr. 1, 2020 Nationwide Launch of the Farm Cloud Livestock IoT Service

The Midori Cloud agricultural IoT service is used to support the production activities of large pig and chicken farms

  • May 25, 2020 R&C Holdings Business Alliance for Smart Agriculture for Produce Distribution

This alliance with R&C Holdings, Japan's second-largest fruit and vegetable wholesaler, will facilitate the use of smart agriculture for the distribution of produce

  • Sep. 7, 2020 Cooperation with Microsoft Japan for Training 200 Microsoft Azure Engineers

Every Year

Training will use the Cloud & AI Engineer Development Program of Microsoft Japan

  • Mar. 30, 2021 Cooperation with NTT Data for Creating 500 Business Reform Personnel over Three

Years

Started in April 1, 2021 a joint business reform support service starting with service utilization support for companies using Salesforce

  • Apr. 6, 2021 Start of Salesforce Anywhere Support

Expansion of support for the use of Salesforce, support for installation, operation and utilization of the Salesforce Anywhere collaboration tool

22

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  1. 2H FY8/21 Initiatives and Growth Forecast

23

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FY8/21 Plan

  • The engineer utilization rate has returned to the pre-pandemic level and is expected to remain high
  • Recruiting activities have resumed for significantly increasing the number of engineers, but market conditions must be monitored closely

FY8/20 results

FY8/21 plan

(Millions of yen)

(% to sales)

(% to sales)

(YoY change)

Net salles

13,771

-

15,020

-

+9.1%

Operating

1,134

8.2%

1,370

9.1%

+20.8%

profit

Ordinary

1,165

8.5%

1,650

11.0%

+41.6%

profit

Profit

654

4.7%

957

6.4%

+46.3%

Dividends

4.6 yen

-

5.6 yen

-

+21.7%

24

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Activities in 2H FY8/21

  • While earning profits in FY8/21, we are again concentrating on recruiting activities in order to advance quickly to the next phase of growth
  • We are raising the speed of growth initiatives, such as work with partners, business alliances and the DX shift, for sales growth accompanied by higher profitability

Plan for Medium-term

Growth

Sales growth

Ordinary profit margin growth

  1. Volume growth phase (to FY8/20)
    • Big investments for recruiting and training IT professionals; growth of the engineer workforce and sales were the key performance indicators.
  3. Profit creation phase (to 2Q FY8/21)

6-7%

  1. Volume growth phase

Fast sales growth

Based on changes in markets due to COVID-19, shifting to a profit creation structure with an ordinary profit

with a high ordinary

margin of more than 10% as the goal.

profit margin

Reducing recruiting activity will slow down sales growth, but investments for future value creation are continuing

while closely monitoring upcoming changes in the business climate.

More

3) Renewed growth phase (starting now)

than 10%

  • Resume recruiting and training activities as it has become possible to restart investments in education-based IT

professional creation.

2) Profit creation 3) Renewed growth phase

Add new sources of growth by using business partners, alliances and M&A.

phase

Feb. 2021

Maintain high profitability along with strong sales growth.

IT professional

creation

Current

businesses

New

businesses

Infrastructure

25

  • Hire experienced people in growing industries, focus on education-based IT professional creation (hiring/training for inexperienced people), mainly for the DX domain.
  • Depending on market conditions, we may decide to hire people for FY8/22 earlier than initially planned.
  • Further enlarge and upgrade practical education programs due to the success of this training system.
  • Become a prime vendor and strengthen business partners in order to aim for sales of more than 50 billion yen.
  • Faster pace of shifting current IT experts to the DX domain by using cooperation with Microsoft and Salesforce.com.
  • Use activities involving major alliances with NTT Data and other partners in all business fields.
  • Agricultural IT: Become the primary industry DX leader by expanding the range of agriculture/fisheries solutions for successful companies and the public sector.
  • Continue creating new services and reinforcing alliances in the digital healthcare domain.
  • Continue strengthening the framework for business activities and building an IT system infrastructure

Initial Key Performance Indicators

Number of

Engineer

engineers

utilization rate

2,250 97.9%

Plan to increase the number of engineers and maintain a high utilization rate by resuming recruiting activity while monitoring market conditions

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Medium-term Vision

The medium-term plan has the goal of raising sales to 50 billion yen in FY8/25

  • Self-fulfillmentof engineers and constant business growth by providing many types of job opportunities involving SERAKU business operations, all originating from education-based IT professional creation
  • Establish a business to raise both profit margins and the speed of growth by shifting engineers to the DX domain while achieving stable growth in the System Integration business, where demand is expected to remain firm.
  • Utilize alliances with major cloud platform companies in order to use operational and utilization support for more growth
  • M&A in market sectors with the potential for synergy with existing businesses and provision of SERAKU's recruiting, education and sales expertise to newly acquired companies and businesses for growth
  • Launch businesses based on IT that target social issues with growth potential in order to add more sources of growth

(Billions of yen)

After 5

60

years

50

40

30

First

20

year

10

0

FY8/21

FY8/22

FY8/23

FY8/24

FY8/25

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Features and Superiority of the Education-based IT Professional Creation Model

  • Starting to create professionals to be prepared for upcoming market growth
  • Use horizontal expansion of recruiting, education and sales skills to add more technology domains
  • Business growth by taking service formats to a higher level to reflect the growth of markets

Beginning in 2021, we forecast a shift in markets that adds demand for the installation and utilization of cloud systems to the existing demand for the development of IT systems and the provision of maintenance and operation services. As a result, we expect new markets and the need for next- generation engineers.

We will cooperate with major platform companies to create IT engineers with outstanding business insight and skills in order to grow while supporting the ongoing digital transformation in all aspects of society.

2020-

Looking ahead to growth of the Microsoft platform, started training programs for the Microsoft certifications of at least 200 people every year

2018-

Looking ahead to growth of the DX market, started training programs for robotic process automation, security, data science, verification and other activities

2013-

Looking ahead to the growth of the cloud systems market, started training activities for Salesforce engineers

The goal is enlarging the customer success solutions business to a workforce of about 500 within three years

2008-

Looking ahead to the widespread use of smartphones and the IoT, started training programs for smart technology engineers

2002-

Anticipating growth in demand for IT utilization services at companies, started training programs for IT infrastructure and network engineers

1997-

Anticipating growth of the web systems domain, started a system development business and training programs for system development engineers

Currently expanding the Midori Cloud business and other activities in the data science domain

Currently expanding the System Integration business

Currently expanding the System Integration business

1995-

Started an internet business before the internet became widely used and started

Currently expanding business operations in the digital marketing domain

training programs for web engineers

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DX: Cloud & Solutions Business Growth Scenario

High profit margins backed by continuously cumulative managed services and Microsoft platforms

  • Use the Microsoft alliance for the certification of at least 200 people every year to assist companies with installation and operation of Microsoft products
  • Operate a highly profitable platform resale and license resale business
  • Consistent growth of managed services (subcontracted centralized 24-hour/365-day operation of cloud infrastructures for companies)
  • Start and expand a security surveillance and operations center business, which is a growing market sector

Net sales

(Millions of yen) 4,000

Goal is growth of more than 150% during the next three years

3,000

2,000

1,000

0

FY8/21

FY8/22

FY8/23

FY8/24

28

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DX: Customer Success Solutions Business Growth Scenario

Create 500 Salesforce engineers by FY8/24 and become the leader in Japan in the new and growing Salesforce use and operation services market

  • In the cloud IT systems field, the market is expanding with the keywords of utilization and operation and digital transformation. SERAKU is a first mover in this field and aims to achieve greater business growth.
  • Training programs for no-code/low-code platform engineers with business expertise who will be the main source of utilization, operation and DX services
  • Receive more Salesforce utilization and support orders from large and growing companies in Japan by strengthening alliances with NTT Data and other partners

Net sales

(Millions of yen)

4,000

Goal is growth of more than 200% during the next three years

3,000

2,000

1,000

0

FY8/21

FY8/22

FY8/23

FY8/24

29

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DX: Midori Cloud Business Growth Scenario

Become the primary industry DX leader, a sector with much growth potential, by combining production support platforms and SERAKU system integration expertise

  • Continuously increase production support experience and agricultural IT expertise in order to steadily expand the use of production support platforms
  • Receive orders for large agriculture/fisheries solutions during the phase of implementing the primary industry DX at companies and in the public sector
  • Become the primary industry DX leader by leveraging synergies between the platform business and agriculture/fisheries solutions business

Net sales

(Millions of yen)

3,000

Goal is growth of more than 500% during the next three years

2,000

1,000

0

FY8/21

FY8/22

FY8/23

FY8/24

30

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System Integration Business Growth Scenario

Receive more orders for continuously cumulative IT operation services and projects in industries with steady IT needs while continuing to grow by using recruiting, education and sales skills

  • Use education-based IT professional creation for more growth (recruiting may be reduced to maintain profitability depending on market conditions)
  • Speed up growth by using sales skills along with more partner companies and more powerful alliances
  • For IT needs for various industries, create large projects and subcontracting projects by giving engineers practical training and developing engineers with business process knowledge.

Net sales

(Millions of yen)

24,000

Goal is growth of more than 100% during the next three years

16,000

8,000

0

FY8/21

FY8/22

FY8/23

FY8/24

31

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Forward-looking Statements

Documents and information provided at today's presentation include forward-looking statements.

These statements are based on assumptions that include current expectations, forecasts and risk factors. As a result, forward- looking statements include many uncertainties that may cause actual performance to differ from these statements.

Risk factors and uncertainties include the condition of industries and markets where SERAKU operates, changes in interest rates and foreign exchange rates, and other items involving the Japanese and global economies.

SERAKU has no obligation to update or correct these forward-looking statements even if there is subsequently new information or an event that affects these statements.

An announcement will be made promptly if there are revisions to the FY8/21 forecasts or differences between results of operations and these forecasts that require disclosure.

32

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Seraku Co. Ltd. published this content on 06 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2021 19:14:11 UTC.