DIGITAL HEARTS : Presentation Material for the Nine Months Ended December 31, 2021

Presentation Material

for the Nine Months Ended December 31, 2021

February 8, 2022

Tokyo Stock Exchange First Section：Code 3676

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

Copyright© 2022 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

Q3 FY2021 Financial Results

(The nine months ended December 31, 2021)

Copyright© 2022 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

1

Highlights for the Q3 FY2021

Both Businesses Achieved

Significant Increases in Sales

New Record High Profits

Net sales

• 21,246mn

(YoY 130.2％)

Operating income

• 2,123mn

(YoY 179.5％)

• Enterprise Business, a focus business, continues to achieve high growth with the acceleration of DX as a tailwind.
• Entertainment Business achieved double-

digit sales growth on the back of

expanding domestic and global demands.

• Organic growth YoY 117%, excluding the effects of M&A.
• Operating income in Q3 already exceeding

the annual record high of ¥1.96 bn.

• Significant profit growth in both

Enterprise Biz and Entertainment Biz.

• High operating income margin of 10.0%.

Full-year Earnings Forecast

Revised Upward

Revised full-year forecast

Net sales

• 29,000mn

(Vs. initial forecast 102.0％)

Revised full-year forecast

Operating income

• 2,700mn

(Vs. initial forecast 128.6％)

• Full-yearsales and operating profit are
  estimated to exceed the initial forecasts
  in both Enterprise Biz and Entertainment Biz.
• Aiming for YoY 1.4 times growth of
  operating income, while keep investing in Q4 for future growth to achieve the medium- term target of net sales of ¥50.0 bn.

Copyright© 2022 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

2

Progress Rate Against Full-year Forecast

Full-year earnings forecast is revised upward with strong Q3 performance in both Enterprise Business and Entertainment Business.

Consolidated Q3 nine months operating income is already exceeded the initial full-year forecast.

Net sales		Q3 FY2021 Result
	¥ 21,246mn
Revised forecast	Progress rate	Revised forecast
73.3%			¥ 29,000mn
Initial forecast	Progress rate	Initial forecast
74.8%			¥ 28,420mn
		Q3 FY2021 Result
Operating income	¥ 2,123mn
Revised forecast	Progress rate			Revised forecast
78.6%			¥ 2,700mn
				Initial forecast
Initial forecast	Progress rate
101.1%			¥ 2,100mn

Copyright© 2022 DIGITAL HEARTS HOLDINGS Co., Ltd. All Rights Reserved.

■Enterprise Business

• • Rapid increase in security service projects with expansion of new styles such as remote work.
• Entertainment Business
• • Domestic debugging service for console games performed well.
• Enterprise Business
• • Acquired projects with high gross margin ratio in such as security service.
• Entertainment Business
• • Gross margin ratio of domestic debugging has been improved.
  • Restrained SG&A expenses of global and others service.

3

Topics

Decided the group reorganization for

1.

M&As for future growth

2.

further growth of Enterprise Business

Enterprise Business

Step.1

On April 1, 2022, spin-out of Enterprise

Jun. 2021 M&A

Business as an independent company as

identity Inc.

AGEST, Inc. from just as an internal business div.

Developing SES business utilizing a pool of

(→Detailed P23-P25)

highly-skilled freelance engineers.

Step.2

Jan. 2022 M&A

For further strengthening the entire service of

DEVELOPING WORLD SYSTEMS LIMITED

Enterprise Business, two of subsidiaries will

be reorganized to be a part of AGEST, Inc.

A gold partner of Oracle. Support for the

introduction, maintenance, and operation of

AGEST, Inc.

Oracle system in the U.K. and the U.S.

System

System

Maintenance

Entertainment Business

Security

Testing

Development

and operation

Feb. 2022 Absorption-type Company Split

Quality Control division of Drecom Co.,

LOGIGEAR JAPAN CORPORATION

Red Team Technologies Co., Ltd.

Ltd.

The division in charge of quality assurance

operations for game apps developed by

Drecom.

System Testing

Security

4

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