Expanding direct transactions with end users

「Increase in direct users」

「The systems operations services business, comprising ICT systems operations and maintenance, posted lower revenue but higher profit year on year. This was despite the end of some ICT systems operations contracts, as growth in the cloud operations service Kyrios, provided through direct transactions with end users, and in help desk operations more than offset the decline.」

「The systems implementation services business, comprising the design and implementation of ICT systems, posted higher revenue and profit year on year, as it won many cloud-related projects through direct transactions with end users and engineer utilization remained high.」

「Amid continued strong customer demand for DX-related IT investment, centered on AI, cloud, and security, direct transactions with major customer companies expanded in the systems implementation business.」

「To further accelerate the shift to the direct-user business, we continued to strengthen investment in engineer training and sales and marketing activities to generate projects, resulting in steady expansion of the direct-user business.」

「From the second quarter to the end of the previous fiscal year, we withdrew from part of the secondary subcontracting business in order to reallocate engineer resources to the higher-margin direct-user business. As a result, revenue for the nine-month period ended 31 December declined year on year. In addition, to accelerate the shift to the direct-user business, we continued to strengthen investment in engineer training and sales and marketing activities to generate projects, resulting in lower profit year on year. However, these measures have enabled the direct-user business to expand steadily.」

「From the second quarter to the end of the previous fiscal year, we withdrew from part of the business serving hardware manufacturers in order to reallocate engineer resources to the higher-margin direct-user business. As a result, revenue for the three-month period ended 30 June declined year on year. In addition, to accelerate the shift to the direct-user business, we increased investment in engineer training and strengthened sales and marketing activities to generate projects, resulting in lower profit year on year.」

「During the fiscal year, direct-user business expanded as the company withdrew from its business serving hardware manufacturers, leaving revenue broadly unchanged from the previous fiscal year.」

「“Expand”: In addition to our business with overseas manufacturers built up to date, we will expand direct transactions with IT end-user companies in Japan. As an example of 1., on 19 May 2021 we released “Introduction of an AI chatbot at Mandom’s customer consultation center.”」

「During the nine-month period ended 31 December, revenue was ¥2,498.398 million, up 15.1% year on year, and segment profit was ¥475.362 million, up 30.0%, owing to the acquisition of new operations projects from distributors and user companies and orders for large one-off projects.」

「As contracted work from overseas manufacturers shifted from flat to a declining trend, we strengthened sales activities to win work from domestic user companies. As a result, contracted work for domestic companies increased, and revenue in the ICT Solutions Business for the fiscal year was ¥2,905.051 million, up 10.8% year on year.」

「Until now, the ICT Solutions Business has been predominantly engaged in contracted design, implementation, operations, and maintenance services for ICT manufacturers. As the range of cloud services has expanded, end users have gained the freedom to choose services, and we have been expanding direct transactions with end users. Going forward, to further expand our end-user business, we will focus on improving engineers' skills and strengthening proactive sales activities.」