Expanding Solutions for the Manufacturing Sector

「The 3D simulation software FlexSim could not make up for the year-on-year decline in revenue in the first quarter over the full fiscal year, and revenue was ¥767 million, down 4.6% year on year. However, demand for FlexSim remains solid, and we will actively expand sales to upper-mid-sized and mid-sized companies. Mastercam-related revenue was ¥1,433 million, up 6.4% year on year, reflecting increased sales of technical services, including customised and add-on software and engineering services that draw on our technical expertise and are a key focus for the second half, as well as the success of a maintenance campaign. PLM/ERP-related revenue was ¥860 million, up 19.6% year on year, due to continued development of existing projects, an increase in projects through stronger cooperation with major systems integrators, and the consolidation effect of Flash Systems, which was newly consolidated from July 2024.」

「For the 3D simulation software FlexSim, revenue was ¥322 million, down 12.4% year on year, as major manufacturing and logistics customers, its primary customer base, took a cautious approach to capital investment amid uncertainty over the outlook resulting partly from US tariff policy during the current interim consolidated accounting period. For Mastercam-related products, we continued to focus on licence sales and maintenance support, as well as customised and add-on software and engineering services that draw on our technical expertise, resulting in revenue of ¥660 million, up 2.3% year on year.」

「For the 3D simulation software FlexSim, we continued to receive orders for expansions and new installations from major customers in the automobile, electrical and electronic-components industries and others, contributing substantially to profit. For the 3D CAD/CAM software Mastercam, revenue increased year on year as a result of the campaign conducted in the first quarter and efforts to win customisation projects. However, profit did not increase as much as revenue because of the impact of procurement price revisions during the current interim consolidated accounting period.」

「Licence sales for the 3D simulation software FlexSim, including the subscription model, continued to expand steadily, while commissioned development of simulation models also remained solid, resulting in substantial year-on-year revenue growth. In the PLM business, which we expect to become our next pillar of growth, we are working to further strengthen cooperation with PTC Japan. As a result, revenue for the cumulative third-quarter consolidated period was ¥1,413 million, up 41.2% year on year, and segment profit was ¥192 million, up 31.6%.」

「In particular, in the engineering solutions business, we released and began selling the Japanese version of the latest version of the 3D simulation software FlexSim, FlexSim 2023, in June. FlexSim 2023 has enhanced modelling functions to eliminate congestion in warehouses and factories spanning multiple floors and optimise the overall system. Its enhanced GIS (geographic information system) tools are also expected to make it an effective tool for addressing the "2024 logistics problem." In September, we entered into a reseller agreement with Visual Components (Finland), which provides 3D production simulation software worldwide, including robotics and offline teaching.」

「For the core product, the 3D CAD/CAM software Mastercam, maintenance and support revenue, which is recurring revenue, increased steadily. For the 3D simulation software FlexSim, licence sales, including the subscription model, continued to expand steadily from the previous consolidated fiscal year, while commissioned development of simulation models also remained solid, resulting in substantial revenue growth. In the PLM business, TOPWELL, which became a wholly owned subsidiary in December 2022, contributed to earnings. As a result, revenue for the cumulative first-quarter consolidated period was ¥403 million, up 38.9% year on year, and segment profit was ¥62 million, up 150.1%.」

「For the 3D simulation software FlexSim, we diversified sales formats to meet customer needs, resulting in an increase in implementation projects among major automobile manufacturers and in the electrical and electronic-components industries. We also expanded awareness through advertising and promotional activities, including active participation in trade shows, to further expand sales in the current consolidated fiscal year and the next fiscal year.」

「For the core product, the 3D CAD/CAM software Mastercam, business sentiment among the small and medium-sized manufacturers that make up its main customer base is recovering. However, deliveries of machine tools, which are often delivered at the same time, have been delayed due to semiconductor shortages and other factors, resulting in longer delivery lead times. In addition, the weaker yen has driven up the cost of dollar-denominated licence fees, affecting procurement costs. For the 3D simulation software FlexSim, which delivers substantial productivity gains at manufacturing lines and logistics warehouses, sales increased as we responded to customer needs through fixed-term contracts before full-scale implementation and renewals of fixed-term contracts to improve asset efficiency. We are also expanding awareness through advertising and promotional activities, including active participation in trade shows, to further expand sales in the current and next fiscal years.」

「For the core product, the 3D CAD/CAM software Mastercam, business sentiment among the small and medium-sized manufacturers that make up its main customer base is recovering. However, deliveries of machine tools have been delayed due to semiconductor shortages and other factors, resulting in delays for Mastercam, which is often delivered at the same time. In addition, the weaker yen has driven up the cost of dollar-denominated licence fees, affecting procurement costs. For the 3D simulation software FlexSim, which delivers substantial productivity gains at manufacturing lines and logistics warehouses, licence sales have increased as awareness has spread. To accelerate sales expansion in the second half, we are actively hiring sales personnel and strengthening efforts to identify prospective customers through exhibitions and propose flexible sales methods tailored to customer needs.」

「For the core product, the 3D CAD/CAM software Mastercam, business sentiment among the small and medium-sized manufacturers that make up its main customer base is recovering. However, shortages of components have delayed machine-tool deliveries, and Mastercam orders scheduled for delivery together with machine tools have also been delayed. We will strengthen cooperation with sales distributors and consider and implement flexible measures, including developing sales initiatives that take regional business conditions into account and rolling out various promotional campaigns. For the 3D simulation software FlexSim, attendance at trade shows has increased following the easing of restrictions on activities, and inquiries following webinars have also remained solid. We will seek to further expand orders by steadily following up with prospective customers.」

「Mastercam's new license sales performed well as business conditions in the small and medium-sized manufacturing sector, where its main customers operate, recovered from the second half of the current consolidated fiscal year. In addition, the company received many business opportunities for FlexSim and is advancing proposals.」

「To establish a structure for expanding sales of the 3D simulation software "FlexSim," the company established the DX Business Division in October 2021. It also actively worked to stimulate demand by deepening collaboration with sales partners and pursued sales activities in cooperation with the Digital Solutions Business Division. In addition, the company began offering a subscription service for FlexSim that enables customers to limit their initial investment and try the software before purchasing a license, and the service has been well received by customers.」

「For the 3D simulation software "FlexSim," the company actively pursued digital marketing through exhibitions and web seminars and proactively advanced solution development to strengthen the product. As a result, the number of licenses sold performed well.」

「Although sales of the 3D simulation system "FlexSim" for sites where people and goods move, including factories, logistics operations and material handling, were below the initial plan, the company actively exhibited at logistics-related trade shows and launched the latest version, "FlexSim 2021," with AI features and related campaigns. As a result, it acquired many prospective customers expected to contribute from the second quarter onward.」

「In November, the company pursued sales activities in new formats, including exhibiting at JIMTOF Online, one of the world's largest online machine tool exhibitions. In addition, demand has grown for layouts that take COVID-19 countermeasures into account at manufacturing plants, corporate offices and other sites, generating inquiries for the factory, logistics and material-handling 3D simulation tool "FlexSim." In October 2020, the company concluded a mutual distributorship agreement with Broadleaf Co.,Ltd., added the work analysis and operational improvement software "OTRS" to its product lineup, and established a structure to further promote digital transformation at logistics and production sites.」

「Investment restraint has continued because production activity in the small and medium-sized manufacturing sector, where most Mastercam customers operate, has not fully recovered, resulting in some postponement of plans to introduce new licenses. However, since launching a dedicated product website for the factory, logistics and material-handling 3D simulation system "FlexSim" in July, the company has received many inquiries and expressions of interest. In late August, it released a new "Agent" feature in FlexSim that simulates social distancing as a measure against COVID-19, and the company is strengthening its business initiatives with a post-pandemic operating environment in mind.」

「The company aims to achieve substantial growth through efficient sales using its distributor network for all manufacturing solutions, including "Mastercam" as its core product and "Robotmaster" and "FlexSim."」