Presentation Material for the First Half of the Fiscal Year Ending March 31, 2022

Presentation Material

for the First Half of the Fiscal Year Ending March 31, 2022

2021/11/9

Tokyo Stock Exchange First Section：Code 3676

https://www.digitalhearts-hd.com/

Copyright© 2021 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

Business Results for the First Half of FY2021

(The six months ended September 30, 2021)

Copyright© 2021 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

1

Business Highlight

for the First Half of FY2021

	Net sales
Both Businesses Achieved
13,498Mln yen
Significant
Increases in Sales	(YoY 128.2％)

• Enterprise Business, a focus business, continues to achieve high growth with the acceleration of DX as a tailwind.
• Entertainment Business also achieved double- digit sales growth thanks to strong performance in services for console games.
• The four newly consolidated subsidiaries through M&A has contributed from this Q2.

New Record High Profits

in the First Half

Strong progress toward

Achieving the

Full-year

Forecasts

Operating income

1,370Mln yen

(YoY 259.7％)

Progress rate to the full-year target

Net sales

47.5%

Operating income

65.2%

• In the Enterprise Business, stable profits were generated by net sales growing to a scale that covers continuing investment.
• Entertainment Business also achieved over 1.5 times profit growth than precious year with sales increasing and efficient business operations.
• Sales and operating profit exceeded company forecasts in both the Enterprise and Entertainment Business.
• Aiming to build a foundation for growth and achieve the full-year plan to achieve the medium-term target of ¥50 billion in net sales.

Copyright© 2021 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

2

Topics

01

Achieved YoY 128% high sales growth

including M&A contribution

02

Steady increase in IT human resources and Qualitist(*) to achieve FY23 target of 20,000

IT human resources and Qualitist

Four subsidiaries through

Consolidated net salesM&A began consolidation from this Q2

（Mln yen）			Effects of M&A
15,000				Existing business	13,498
10,000		10,531
5,000						Achieved YoY 118% as
							organic growth excl. M&A
0
			1H FY2020	1H FY2021
Newly consolidated subsidiaries
		DIGITAL HEARTS CROSS Group
	Entertainment Business
			MK Partners, Inc.
	Enterprise business
			TPP SOFT, JSC
	Enterprise business
			identity Inc.
	Enterprise business

Copyright© 2021 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

4,517 people	9,171 people
(As of March 31, 2021)	(As of September 30, 2021)

*Qualitist…Our original term for specialist contributing to the quality incl. engineers

03

Decided the group reorganization to accelerate the growth in Enterprise Business

Spin out Enterprise Business to form

"Next-Generation QA company"(*)

→ Detailed P20-P28

*QA…Abbreviation of "Quality Assurance" 3

Summary of Business Results for

the Six Months Ended September 30, 2021

• Record-highnet sales and operating income in the first half.
• Progress at a pace significantly compared to the company's full-year forecast.

(Mln Yen) 1H FY2020 1H FY2021 YoY Change

Net sales	10,531	13,498	2,967	128.2%
Cost of sales	7,820	9,562	1,741	122.3%
Cost of sales (%)
74.3%	70.8%		-3.4points
Gross profit
2,710	3,936	1,226	145.3%
SG&A
2,182	2,566	384	117.6%
Operating income	527	1,370	842	259.7%
Operating income
5.0%	10.2%		+5.1points
margin
Ordinary income	570	1,431	860	251.0％
Profit attributable to	355	917	561	257.9%
owners of parent
EBITDA	712	1,632	919	229.1%

Copyright© 2021 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

4