Sios Corp · TSE:3744
Sios — SIOS Technology — H1 2016 Earnings Presentation
38 slides from Sios's earnings presentation, Jul 29, 2016
Slide 1: Financial Results for the Six Months Ended June 30, 2016
Financial Results for the Six Months Ended June 30, 2016 July 29, 2016 SIOS Technology, Inc. (Stock Code: 3744 on the Second Section of Tokyo Stock Exchange) © SIOS Technology, Inc. All rights Reserved. 1
Slide 2: Table of Contents
Table of Contents Ⅰ Major Accomplishments in the Six Months Ended June 30, 2016 Ⅱ Summary of Business Results for the Six Months Ended June 30, 2016 Ⅲ Key Medium-Term Strategic Initiatives and Progress Achieved in the April-June Quarter of 2016 Ⅳ Medium-Term Sales and Profit Plan and Financial Forec
Slide 3: Major Accomplishments in the Six Months Ended June 30, 2016
Ⅰ Major Accomplishments in the Six Months Ended June 30, 2016 © SIOS Technology, Inc. All rights Reserved. 3
Slide 4: Revised Sales Forecast for FY 2016
Revised Sales Forecast for FY 2016 on track to become a 10 billion yen company In millions of yen 12,000 10,500 11,500 10,000 9,362 Revised upward 8,000 6,000 Net sales Net sales 4,000 results for results for first half first half 2,000 6,238 6,238 0 FY 2015 Net Sales Results Previous Forecast 前回発表予
Slide 5: Major Accomplishments in the Six Months Ended June 30, 2016
Major Accomplishments in the Six Months Ended June 30, 2016 Leveraged the acquisition of Keyport Solutions and 1 Profit Cube in 2015 to enter the emerging FinTech* sector Released an upgraded version of the SIOS iQ* 2 software, born out of a stepped-up investment in artificial intelligence technolog
Slide 6: A New SIOS
A New SIOS Accelerating growth to the next Leveraging proprietary FinTech level, passing the 10 billion yen and AI technologies to become mark in net sales a leading player in the IT SIOS is solutions industry entering a new era of growth and innovation. Maintaining a robust financial foundation wit
Slide 7: Summary of Business Results for the Six Months Ended June 30, 2016
Ⅱ Summary of Business Results for the Six Months Ended June 30, 2016 © SIOS Technology, Inc. All rights Reserved. 7
Slide 8: Consolidated Financial Results for the Six Months Ended June 30, 2016
Consolidated Financial Results for the Six Months Ended June 30, 2016 In millions of yen Results for six Results for six months ended months ended Change % Change June 30, 2015 June 30, 2016 Net sales 4,392 6,238 +1,845 +42.0% Gross margin 1,580 2,268 +688 +43.6% Operating income △55 330 +386 － Ordi
Slide 9: Consolidated Net Sales in First Halves of the Past 5 Years
Consolidated Net Sales in First Halves of the Past 5 Years In millions of yen Net sales in the first half of FY 2016 soared 7,000 by 42% from the same period of FY 2015 6,238 6,000 5,000 4,392 4,000 3,626 2,980 3,225 3,000 2,000 1,000 0 2012/2Q 1H FY 2012 2013/2Q 1H FY 2013 2014/2Q 1H FY 2014 2015/2
Slide 10: Aggressive Acquisitions Completed in FY 2015
Aggressive Acquisitions Completed in FY 2015 The SIOS Group achieved a substantial increase in net sales in the first half of FY 2016 as a result of having acquired these two fast- growing companies in the previous year. Keyport Solutions, Inc. Profit Cube Inc. (KPS) (PCI) © SIOS Technology, Inc. Al
Slide 11: Consolidated Operating Income and R&D Spending in First Halves of the Past 5 Years
Consolidated Operating Income and R&D Spending in First Halves of the Past 5 Years Operating income in the first half of FY 2016 up by 385 million yen from the same period of the year before In millions of yen R&D spending has been following an upward trend. 400 営業利益 Operating 研究開発費 R&D spending
Slide 12: Consolidated EBITDA in First Halves of the Past 5 Years
Consolidated EBITDA in First Halves of the Past 5 Years In millions of yen EBITDA in the first half of FY 2016 up by 450 438 million yen from the same period 417 400 of the year before 350 300 250 200 146 161 150 100 76 50 0 -50 -21 2012/2Q 1H FY 2012 2013/2Q 1H FY 2013 2014/2Q 1H FY 2014 2015/2Q 1H
Slide 13: Analysis of Operating Income
Analysis of Operating Income An increased gross margin resulting from the acquisitions of KPS and PCI and from robust sales in existing businesses more than offset an increase in personnel costs and amortization of goodwill, resulting in a substantial increase in operating income for the six months
Slide 14: Consolidated Balance Sheet
Consolidated Balance Sheet In millions of yen Current assets 3,901 Total liabilities Current assets Total 4,228 3,927 liabilities 4,204 Tangible fixed assets 164 Tangible fixed assets 158 Intangible fixed Intangible fixed assets assets Total net assets Total net 1,087 1,028 1,414 assets Investment a
Slide 15: Analysis of Consolidated Cash Flow
Analysis of Consolidated Cash Flow In millions of yen 636 △55 2,118 2,045 △376 △131 Balance of cash Cash flow Cash flow Cash flow Effect of Balance of and cash from from from exchange-rate cash and cash equivalents as of operating investing financing changes on equivalents as December 31, 2015 activ
Slide 16: Open System Infrastructure Business
Open System Infrastructure Business Sales and Profit for the 6 Months Ended June 30, 2016 Net sales 3,203 million yen, up 18.1% from the year before 81 million yen, as compared with an operating loss of Segment income 88 million yen the year before Net sales (in millions of yen) 3,203 Net sales 2,71
Slide 17: Application Business
Application Business Sales and Profit for the 6 Months Ended June 30, 2016 Net sales 3,034 million yen, up 80.7% from the year before Segment income 249 million yen, up 658.7% from the year before 3,034 Net sales Up 80.7% Net sales Acquisitions of KPS and PCI resulted in a substantial (in millions
Slide 18: Key Medium-Term Strategic Initiatives and Progress Achieved in the April-June Quarter of 2016
Ⅲ Key Medium-Term Strategic Initiatives and Progress Achieved in the April-June Quarter of 2016 © SIOS Technology, Inc. All rights Reserved. 18
Slide 19: 3 Key Medium-Term Strategic Initiatives
3 Key Medium-Term Strategic Initiatives 1 Expand into new business segments including FinTech Continue to invest in research and 2 development Become more competitive in core 3 businesses © SIOS Technology, Inc. All rights Reserved. 19
Slide 20: Expand into new business segments including FinTech
① Expand into new business segments including FinTech Acquired a patent for technology that supports a profit management system developed for financial institutions Developed an automated loan-screening system for financial institutions, and filed a patent for the technology that supports the system
Slide 21: Expand into new business segments including FinTech
① Expand into new business segments including FinTech OK! In March 2016, SIOS acquired a In April 2016, SIOS developed an patent for technology that supports automated loan-screening system a profit management system for financial institutions, and filed a developed for financial institutions. paten
Slide 22: Released an upgraded version of SIOS iQ
② Continue to invest in research and development Released an upgraded version of SIOS iQ, machine learning- based IT analytics software © SIOS Technology, Inc. All rights Reserved. 22
Slide 23: Continue to invest in research and development: SIOS iQ v3.5
② Continue to invest in research and development In March 2016, SIOS released SIOS iQ v3.5, an upgraded version of machine learning-based IT analytics software. Added feature: the ability to understand a system’s pattern of utilizing its data-storage capacity and predict how many days remain before
Slide 24: Become more competitive in core businesses
③ Become more competitive in core businesses i ）Released an upgraded version of LifeKeeper ii ）Added more functions to software applications for MFPs iii ）Launched new OSS services for cloud* © SIOS Technology, Inc. All rights Reserved. 24
Slide 25: Released LifeKeeper for Linux v9.1
③ Become more competitive in core businesses i ）Released LifeKeeper for Linux v9.1 in July 2016 External system LifeKeeper Quick Service Protection LifeKeeper APIs Reduces labor-hours by eliminating the Allows the monitoring of LifeKeeper from an need for scripting that requires external system
Slide 26: Released Quick Scan V4.1
③ Become more competitive in core businesses ii ）Released Quick Scan V4.1 in April 2016, which offers enhancements to software applications for MFPs Receipts ❸ Store e-documents Bills in applications on the Kintone platform Templates for receipts and bills ❷ Add ability to Approve e-documents Docume
Slide 27: Launched OSS on Cloud Integration Service
③ Become more competitive in core businesses iii ）Launched “OSS on Cloud Integration Service” for enterprises on Microsoft Azure in May 2016 Launched an implementation service for Red Hat Enterprise Linux on Azure The combination of cloud and OSS enables the OSS implementation of a variety of late
Slide 28: Medium-Term Sales and Profit Plan and Financial Forecast for FY 2016
Ⅳ Medium-Term Sales and Profit Plan and Financial Forecast for FY 2016 © SIOS Technology, Inc. All rights Reserved. 28
Slide 29: Medium-Term Sales and Profit Plan
Medium-Term Sales and Profit Plan Revised forecast for FY 2016 places net sales and EBITDA for the year on a par with their respective targets for FY 2017 established in the medium-term plan. 14.0 11.5 12.0 Net sales 10.5 9.3 (in billions of yen) 7.3 6.5 700 540 500 290 300 115 EBITDA (in millions △
Slide 30: Financial Forecast for FY 2016 Ending December 31, 2016
Financial Forecast for FY 2016 Ending December 31, 2016 Forecast for FY 2016 Results for six months Ending December 31, Percentage of ended June 30, 2016 2016 achievement (in millions of yen) (in millions of yen) Net sales 6,238 11,500 54.2% Operating income 330 370 89.2% Ordinary income 292 310 94.
Slide 31: Ensuring Regulatory Compliance across the SIOS Group
Ⅴ Ensuring Regulatory Compliance across the SIOS Group © SIOS Technology, Inc. All rights Reserved. 31
Slide 32: Inappropriate Accounting Practices Conducted by a Consolidated Subsidiary
Inappropriate Accounting Practices Conducted by a Consolidated Subsidiary Revised Consolidated Financial Results for Past Fiscal Years (in millions of yen) Four- FY 2012 FY 2013 FY 2014 FY 2015 year total Previously Previously Previously Previously Differen announce Revised Diff. announce Revised Di
Slide 33: Why Misconduct Occurred and How We Can Prevent it in the Future
Why Misconduct Occurred and How We Can Prevent it in the Future Why misconduct How we can prevent occurred misconduct in the future SIOS did not perform thorough Perform thorough due due diligence prior to diligence when considering investing in SIIIS. acquiring other companies SIIIS did not have an
Slide 34: Ensuring compliance to regain stakeholder trust
By implementing the three measures outlined on the previous page, we ensure that every company in the SIOS Group vigorously enforces compliance policies and practices so as to regain the trust of our stakeholders. © SIOS Technology, Inc. All rights Reserved. 34
Slide 35: About SIOS
About SIOS SIOS is Innovative Open Solutions SIOS Technology, which is focused on commercializing open-source software such as Linux, is a leading provider of software products and services that support operating systems, servers, web applications, cloud computing, and Big Data for enterprises. To b
Slide 36: Glossary
Glossary Page Term Description An emerging technology for facilitating innovations in the financial 5 FinTech sector. A software platform that comprehensively monitors, analyzes, and optimizes operations of applications in virtual and cloud environments 5 SIOS iQ to improve performance and efficienc
Slide 37: Cautionary Statement
Cautionary Statement Forward-looking statements about our future performance contained in this document are based on management’s assumptions and judgment made in light of the information currently available to us, and may include risks and uncertainties. We caution that significant risks and uncert
Slide 38: STOS
STOS