Risk of reduced systems investment due to economic fluctuations

「The system solution services provided by our Group tend to be susceptible to economic conditions. The market for our Group's services may contract as a result of customers reducing system investment, delaying product development, downsizing their businesses, or bringing system development in-house due to domestic and international economic conditions, business trends and other factors.」

「In the information services industry to which our Group belongs, corporate appetite for IT investment remained resilient, while initiatives such as the use of AI, promotion of digital transformation and cloud adoption accelerated further. System investment to upgrade and improve the efficiency of operations continued, and the industry as a whole maintained solid growth.」

「In the information services industry to which our Group belongs, market growth is expected to continue and remained resilient, as appetite for capital investment related to digital transformation and cloud adoption remains strong, driven by the evolution of digital technologies, responses to increasingly diverse customer needs and the renewal of ageing core systems, while the importance of information security measures, including defences against cyberattacks such as targeted attacks, is increasing further.」

「The system solution services provided by our Group tend to be susceptible to economic conditions. The market for our Group's services may contract as a result of customers reducing system investment, delaying product development, downsizing their businesses, or bringing system development in-house due to domestic and international economic conditions, business trends and other factors.」

「In the information services industry to which our Group belongs, appetite for IT investment aimed at decarbonisation, including carbon neutrality, and digitalisation in preparation for the post-COVID era is strong. Demand for IT investment, including initiatives to promote digital transformation through business model changes and IT renewal, preparations for the invoice system, and security measures, remains on an upward trend and solid conditions continue.」

「In addition to rising prices affected by the sharp depreciation of the yen and higher raw-material costs, a prolonged Russia-Ukraine situation and stagnation in the global economy caused by global monetary tightening pose downside risks to Japan's economy. Although revenge spending and inbound demand are expected, the outlook remains uncertain. Corporate appetite for capital investment in digitalisation is strong, and demand for IT investment, including digital transformation and preparations for the invoice system, is on an upward trend and remained solid.」

「In the information services industry to which our Group belongs, appetite for capital investment in digitalisation with a view to the post-COVID era remained strong, initiatives to promote digital transformation continued to be active, and demand for IT investment remained solid. In addition, with the invoice system scheduled to begin in October 2023, demand for IT investment to digitalise the operations of companies adopting the system is expected to increase, and the favourable tailwinds for the information services industry are expected to continue.」

「The impact of the spread of COVID-19 on our Group's performance was limited in the fiscal year ended March 2022, although growth slowed at some customers due to restrained IT investment. While concerns about restrained IT investment remain for the fiscal year ending March 2023, we believe the impact will be minor.」

「In the information services industry to which our Group belongs, the number of companies developing new work environments, including the introduction of telework and the establishment of cloud environments, as part of work-style reforms and measures to prevent the spread of COVID-19 while seeking a new normal increased, the momentum behind digital transformation accelerated further, and demand for IT investment remained solid.」

「During the six-month period ended [current quarter], Japan's economy remained in a severe condition, with economic activity and personal consumption significantly affected by the spread of COVID-19, including the issuance of states of emergency in many regions. Demand for IT investment remained solid.」

「The impact of the spread of COVID-19 has continued for an extended period, and economic activity has been constrained while the timing of an end to the spread remains unforeseeable, leaving the outlook uncertain. In the information services industry to which our Group belongs, demand for IT investment is expected to remain solid, as more companies are developing new work environments, including the introduction of telework and the establishment of cloud environments, as part of work-style reforms and measures against COVID-19, while new initiatives that change business models and industry structures, such as digital transformation, are accelerating.」

「In the information services industry to which our Group belongs, the impact of the spread of COVID-19 on corporate earnings continued, and some IT investments were reduced in scale or postponed, resulting in an increasing tendency for investment to be selected based on its content.」

「As corporate earnings deteriorated due to the spread of COVID-19, some IT investments were reduced in scale or postponed, and investment was increasingly selected based on its content.」

「In the information services industry to which our Group belongs, corporate appetite for IT investment in areas such as cloud computing, IoT, fintech, big data, AI and RPA had been expected to remain strong, but the spread of COVID-19 has made it necessary to assess IT investment trends carefully.」

「The market for the services provided by our Group may contract as a result of customers reducing system investment, delaying product development, downsizing their businesses, or bringing system development in-house due to domestic and international economic conditions, business trends and other factors.」