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Financial results presentation4345CTS Co.,Ltd.Information and Communications, Services and Others

Financial Results Presentation for the First Quarter of the Fiscal Year Ending March 2027

In the first quarter of FY2027/3, revenue and operating profit both exceeded the year-earlier period and reached record highs, driven by growth in SAP proposal-based sales and high-value-added services. However, the operating margin edged down due to higher personnel expenses and site relocation costs.

Worth reading
63In focus
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Direction
Mixed performance
Direction inferred from the company’s description.
Scale
32
¥ million (year-on-year increase in revenue)
Wording
Conditional
How definitive the wording is.

Contents of this document

Financial results presentationFirst quarter of the fiscal year ending March 202710 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥2,962 million+1.1%
Operating profit¥682 million+1.0%
Ordinary income¥853 million+2.5%
Net income¥599 million +1.8%profit attributable to owners of the parent
Gross Profit Margin51.1%
Operating profit margin23.0%
Selling, general and administrative expenses¥829 million
Results for the three months of the current quarter
Net Sales
¥2,962 million
Operating profit
¥682 million
Ordinary income
¥853 million
Profit attributable to owners of parent for the quarter
¥599 million
Full-year earnings forecast
Net Sales
¥13,500 million
Operating profit
¥3,530 million
Ordinary income
¥3,890 million
Profit attributable to owners of the parent
¥2,720 million
Operating profit margin
26.1%
Progress against full-year forecast　通期の予想に対して、いまどこまで進んだかの割合です。
DDS business net sales21.2%
SAP revenue20.2%
Other DDS business revenue21.9%
SMS business net sales22.8%
Other net sales24.2%
Consolidated revenue21.9%
Operating profit19.3%
Ordinary income21.9%
Profit attributable to owners of the parent22.0%
What the company explained in this material
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Consolidated operating profit
Revenue increase25
Gross margin improvement19
Increase in SG&A expenses (personnel costs)-26
Increase in SG&A expenses (other)-11
DDS business operating profit
Revenue increase46
Decline in gross margin-4
Increase in SG&A expenses-36
SMS business operating profit
Decline in Revenue-22
Gross margin improvement34
Increase in SG&A expenses-5
Operating profit by segment
DDS5
SMS6
Other-5
New initiatives
  • Promoting SAP adoption and expanding into the construction market
  • Implementing AI in FFC (SAP + AI)
  • Expanding cloud video services into the government agency market
  • Strategic investment to accelerate the evolution of SAP content
  • Joint proof of concept (PoC) toward collaboration with DSR Asia
Key KPIsA metric the company considers important as a management benchmark.
  • Number of transaction sites162%
  • SAP revenue growth rate19.3%
    Year on year against the same period last yearUp 19.3% year on year
  • SAP revenue mix39.6%
    Year on year against the same period last yearUp 4.8 ppt year on year
  • Cumulative units delivered to government agencies and local authoritiesMore than 1,100 units
  • Number of subscription service contractsMore than 600 licenses
  • Number of branches nationwide32 Branch
Segment results
DDS
Net Sales
¥1,774 million+4.9%
Operating profit
¥482 million+1.2%
SMS
Net Sales
¥854 million-6.1%
Operating profit
¥150 million+4.8%
Other
Net Sales
¥333 million+1.4%
Operating profit
¥50 million-10.5%
Medium-term management plan targets
Target fiscal yearFiscal year ending March 2029
Company-wide revenue¥16 billion
Operating profit¥4.4 billion
Operating profit marginMore than 25% (27.5% in the company-wide revenue target table)
ROEMore than 20%
DDS business net sales¥10.6 billion
SAP revenue¥5.5 billion
Financial targets
ROEMore than 20% (FY2029/3 target)
Equity ratio
Actual results77.8%
Market Size / Share
Local general contractorsApproximately 2,600 local general contractors
Regional general contractorsApproximately 100 major general contractors operating nationwide
Number of stores and locations
Number of locations at period end32 branches nationwide at period-end
Annual Dividend
Forecast for the fiscal year ending March 2027
Interim¥15 per share
End of period¥15 per share
Total¥30 per share
Actual results for the fiscal year ending March 2026
Interim¥14 per share
End of period¥15 per share
Total¥29 per share
Acquisition of treasury shares
A release regarding the status of share repurchases is referenced, but the repurchase amount, number of shares and period are Not disclosed
Contents of this document
ItemDetails
Document typeFinancial results presentation
Fiscal Period CoveredFirst quarter of the fiscal year ending March 2027
Net Sales¥2,962 million (YoY +1.1%)
Operating profit¥682 million (YoY +1.0%)
Ordinary income¥853 million (YoY +2.5%)
Net income¥599 million (profit attributable to owners of the parent) (YoY +1.8%)
Gross Profit Margin51.1%
Operating profit margin23.0%
Selling, general and administrative expenses¥829 million
Results for the three months of the current quarterNet Sales ¥2,962 million / Operating profit ¥682 million / Ordinary income ¥853 million / Profit attributable to owners of parent for the quarter ¥599 million
Full-year earnings forecastNet Sales ¥13,500 million / Operating profit ¥3,530 million / Ordinary income ¥3,890 million / Profit attributable to owners of the parent ¥2,720 million / Operating profit margin 26.1%
Progress against full-year forecastDDS business net sales 21.2% / SAP revenue 20.2% / Other DDS business revenue 21.9% / SMS business net sales 22.8% / Other net sales 24.2% / Consolidated revenue 21.9% / Operating profit 19.3% / Ordinary income 21.9% / Profit attributable to owners of the parent 22.0%
Segment resultsDDS Net Sales ¥1,774 million (YoY +4.9%) / Operating profit ¥482 million (YoY +1.2%) / SMS Net Sales ¥854 million (YoY -6.1%) / Operating profit ¥150 million (YoY +4.8%) / Other Net Sales ¥333 million (YoY +1.4%) / Operating profit ¥50 million (YoY -10.5%)
Breakdown of Factors Affecting the ChangeConsolidated operating profit Revenue increase 25 / Gross margin improvement 19 / Increase in SG&A expenses (personnel costs) -26 / Increase in SG&A expenses (other) -11 / DDS business operating profit Revenue increase 46 / Decline in gross margin -4 / Increase in SG&A expenses -36 / SMS business operating profit Decline in Revenue -22 / Gross margin improvement 34 / Increase in SG&A expenses -5 / Operating profit by segment DDS 5 / SMS 6 / Other -5
Key KPIsIndicator name Number of transaction sites / Value 162% / Year on year against the same period last year Not disclosed, Indicator name SAP revenue growth rate / Value 19.3% / Year on year against the same period last year Up 19.3% year on year, Indicator name SAP revenue mix / Value 39.6% / Year on year against the same period last year Up 4.8 ppt year on year, Indicator name Cumulative units delivered to government agencies and local authorities / Value More than 1,100 units / Year on year against the same period last year Not disclosed, Indicator name Number of subscription service contracts / Value More than 600 licenses / Year on year against the same period last year Not disclosed, Indicator name Number of branches nationwide / Value 32 Branch / Year on year against the same period last year Not disclosed
Number of stores and locationsNumber of locations at period end 32 branches nationwide at period-end / Number of store openings and closures during the period Not disclosed
Medium-term management plan targetsTarget fiscal year Fiscal year ending March 2029 / Company-wide revenue ¥16 billion / Operating profit ¥4.4 billion / Operating profit margin More than 25% (27.5% in the company-wide revenue target table) / ROE More than 20% / DDS business net sales ¥10.6 billion / SAP revenue ¥5.5 billion
Financial targetsROE More than 20% (FY2029/3 target) / Equity ratio Actual results 77.8% / ROIC Not disclosed / Debt-to-equity ratio Not disclosed
Annual DividendForecast for the fiscal year ending March 2027 Interim ¥15 per share / End of period ¥15 per share / Total ¥30 per share / Actual results for the fiscal year ending March 2026 Interim ¥14 per share / End of period ¥15 per share / Total ¥29 per share
Acquisition of treasury sharesA release regarding the status of share repurchases is referenced, but the repurchase amount, number of shares and period are Not disclosed
Market Size / ShareLocal general contractors Approximately 2,600 local general contractors / Regional general contractors Approximately 100 major general contractors operating nationwide
New initiativesPromoting SAP adoption and expanding into the construction market, Implementing AI in FFC (SAP + AI), Expanding cloud video services into the government agency market, Strategic investment to accelerate the evolution of SAP content, Joint proof of concept (PoC) toward collaboration with DSR Asia
Items this document does not state (9)
Self-assessment against the planUnit price and quantity metricsNumber of employeesAssumptions Underlying the Business OutlookRisk amount incorporated into the outlookPayout ratioCapital expendituresOrders received and order backlogKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

Revenue and profit increased as orders grew, primarily from existing customers, following a focus on SAP proposal-based sales, and as revenue from high-value-added rental and subscription services centered on SAP increased. Higher SG&A expenses, including personnel expenses and the relocation costs of existing sites, limited profit growth.

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Financial Results Presentation for the First Quarter of the Fiscal Year Ending March 2027 | CTS Co.,Ltd. (4345) timely disclosure | Komori