Presentation Materials for the 2Q FY2019 Results Briefing Densan System Co., Ltd. Tokyo Stock Exchange, First Section Nagoya Stock Exchange, First Section Securities Code: 3630 Forward-looking statements contained in this document are based on current estimates and projections and include potential risks and uncertainties. Future results are therefore not guaranteed. Please note that actual results may differ from projections due to changes in the business environment and other factors. Amounts are displayed rounded down to units of one million yen. Aggregate totals stated in charts may not tally with a result. Percentages are displayed rounded to the second decimal point.
2Q FY2019 Business Results Highlights Y-o-y change in parentheses Net income attributable to Sales Operating income shareholders of the parent company 19,874 1,231 856 million yen million yen million yen (Up 10.2%) (Up 65.4%) (Up 64.6%) Business results ✔ Sales and earnings up y-o-y ✔ Operating income showed high growth, up 65.4% y-o-y
2Q FY2019 Business Results Highlights (Unit: Million yen) ✔ Sales according to plan, income up substantially, well ahead of plan ✔ Income ratio up Full-year plan Progress Y-o-y FY 12/2018 FY 12/2019 1H forecast Attainment ratio Ratio 2Q cumulativ e total 2Q cumulativ e total 18,039 19,874 10.2% 19,731 100.7% 40,000 49.7% Sales 744 1,231 65.4% 803 153.3% 1,810 68.0% Operating income 4.1% 6.2% Up 2.1% 4.1% 4.5% Income ratio 785 1,277 62.7% 834 153.1% 1,850 69.1% Ordinary income 4.4% 6.4% Up 2.1% 4.2% 4.6% Income ratio 520 856 64.6% 548 156.4% 1,228 69.7% Net income
Transition in Quarterly Business Results (Unit: Million yen) ✔ 1Q income stands out among results by quarter Sales Operating income 782 800 10,076 9,798 9,626 10,000 700 9,057 8,982 8,910 600 8,000 506 500 449 417 395 6,000 400 348 300 4,000 200 2,000 100 0 0 0 0 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY 12/2018 FY 12/2019 FY 12/2018 FY 12/2019
2Q FY2019 By Segment (Unit: Million yen) ✔ Sales and income both up significantly y-o-y in information services segment ✔ Sales up y-o-y in payment agency service segment, but income flat Sales Operating income Payment 1,200 agency 20,000 Payment service agency 1,100 319 service 17,500 1,000 8,774 900 15,000 8,563 800 12,500 Information 700 service 600 318 10,000 Information 500 service 893 7,500 400 11,100 300 5,000 9,476 374 200 Segment 2,500 income 100 adjustment 51 18 0 amount 0 FY 12/2018 FY 12/2019 FY 12/2018 FY 12/2019
2Q FY2019 Information Services Summary (Unit: Million yen) ✔ Sales as planned in SI and software development, but income up with improved operating ratio ✔ Income up significantly in BPO business included in information processing ✔ Merchandise sales ahead of plan despite decrease associated with reactionary drop from previous year Full-year plan Progress Y-o-y 1H forecast FY 12/2018 FY 12/2019 Attainment ratio Amount Ratio 2Q cumulativ e total 2Q cumulativ e total Sales 9,476 11,100 1,623 17.1% 10,542 105.3% 21,607 51.4% SI and software 5,541 7,194 1,652 29.8% 7,137 100.8% 14,491 49.6% development Information 2,597 2,966 369 14.2% 2,649 112.0% 5,783 51.3% processing Merchandise 1,336 938 -398 -29.8 754 124.4% 1,332 70.5% sales Operating income 374 893 518 138.3% 518 172.3% 1,170 76.4% Operating income Up 4.1% 4.0% 8.0% 4.9% 5.4% ratio
2Q FY2019 Information Services in Detail (Unit: Million yen) SI and software development ✔ Improved operating ratio in contracted Number of Google (G Suite) adopter companies development contributed to income 1,399 1,632 1,246 1,499 ✔ Auto auctions performed well 943 Sales of cloud related services 3,551 Number of Google (G Suite) adopter companies Google Other clouds 199 : Exceeded 1,600 projects 2,935 439 2,363 2,190 Sales of cloud related services 212 275 1,797 : Up 31.4% 163 3,352 2,495 2,150 1,915 1,634 2016.12 2017.12 2018.6 2018.12 2019.6 *Does not include GOGA packages or MAP
2Q FY2019 Information Services in Detail (Unit: Million yen) BPO business Number of items processed (in thousand items) 81,493 ✔ Income up with return to black by 51,053 56,042 projects for large customers 36,403 35,564 ✔ Several projects launching in 2H 3,145 3,011 Sales 3,000 2,863 ✔ New projects increasing with 2,000 stronger collaboration with 1,583 payment agency service 1,307 division 1,000 0 2016.12 2017.12 2018.6 2018.12 2019.6
2Q FY2019 Payment Agency Services Summary (Unit: Million yen) ✔ Sales and income both short of 1H forecast ✔ Income ratio expected to improve in 2H Y-o-y Full-year plan Progress FY 12/2018 FY 12/2019 1H forecast Attainment ratio Amount Ratio 2Q cumulativ e total 2Q cumulativ e total Sales 8,563 8,774 211 2.5% 9,188 95.5% 18,393 47.7% Payment service 8,273 8,466 193 2.3% 8,873 95.4% 17,670 47.9% Payment slip settlement 7,279 7,468 188 2.6% 7,798 95.8% 15,577 47.9% service Paperless payment service 674 673 -1 -0.2% 746 90.2% 1,433 47.0% Account transfer service 318 324 5 1.8% 327 99.0% 659 49.2% Payment innovation 290 308 18 6.3% 315 97.8% 719 42.9% － － － － Remittance service 141 140 0 -0.6% Counter payment － － － － 148 167 19 12.8% collection services 318 319 1 0.5% 354 90.2% 720 44.4% Operating income － － Down 0.07% Operating income ratio 3.7% 3.6% 3.9% 3.9%
2Q FY2019 Payment Agency Services in Detail (Unit: Million yen) Payment service 210,165 198,235 Number of items processed (in thousand items) 181,157 ✔ Differentiation from competitors Cashless/paperless support Account transfer Sales Paperless payment Payment slip settlement 16,554 17,500 15,766 109,510 641 14,499 105,760 ✔ Improve income from low of 1H 628 1,335 15,000 607 1,177 1,173 12,500 8,466 10,000 8,273 324 318 673 674 7,500 14,577 13,959 12,718 5,000 7,468 7,279 2,500 0 2016.12 2017.12 2018.6 2018.12 2019.6
2Q FY2019 Payment Agency Services in Detail Status of payment innovation ✔ Counter payment service - 3,654 adopter stores ✔ International remittances - Number of registrants dropped sharply as interim measures for My Number expired, but number of remittances from January to June exceeded that of previous year Average number of remittances (day) International remittances Number of registered users (10,000) Remittance amount, average number of remittances, and 6.8 6.9 Remittance amount (million yen) number of registered users 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6.0 6.1 6.2 6.3 6.4 6.5 6.6 1,200 1,400 1,000 1,200 5.1 5.0 4.9 4.8 1,000 800 4.6 4.4 4.1 800 3.9 3.6 3.73.8 600 3.6 3.3 600 3.0 400 2.7 2.5 400 200 200 0 0 2015 2016 2017 2014 2018 2018
Topics (Information Services) Auto auctions ✔ JU GIFU Hashima Auto Auction - Complete overhaul of bidding and search systems ✔ Arai Shoji - Auto auction operations system introduced at all four venues ↑ JU GIFU Hashima Auto Auction venue Arai Auto Auction Oyama inventory yard →
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