The Solutions Business to Return to Profit from the Second Quarter Onward

「During the consolidated fiscal year under review, all business areas generally performed well, particularly the network systems and platform business units, amid demand from companies and other organizations to promote digital transformation. In addition, the acquisition of large-scale public-sector equipment renewal projects and some projects being brought forward resulted in net sales reaching a record high of ¥22,148 million, up 22.6% year on year. Although SG&A expenses increased, the effect of higher sales, together with an improvement in gross profit margin resulting from the expansion of the customer base through increased sales of AI products, lifted segment profit to a record ¥3,384 million, up 56.6% year on year.」

「Although SG&A expenses increased, the effect of higher sales, together with an improvement in gross profit margin resulting from the expansion of the customer base through increased sales of AI products, lifted segment profit to a record ¥3,384 million, up 56.6% year on year.」

「During the 6-month interim consolidated period, the business generally remained firm, particularly the information and communications network business for corporate customers. As a result, revenue was ¥7,231 million, up 9.2% year on year, and segment profit was ¥598 million, up 6.9% year on year.」

「As a result, sales were ¥15,291 million, up 13.0% from the previous fiscal year, and segment profit was ¥1,806 million, up 32.2%.」

「During the 9-month period ended 31 December, the business generally remained on a recovery trend, particularly the information and communications network business for corporate customers, helped by the rebound from the same period of the previous year, when the business faced severe procurement difficulties for servers, communications equipment, and other products due to tight semiconductor and other supply and demand, as well as strong corporate demand for digital transformation. As a result, revenue was ¥10,038 million, up 27.7% year on year, and segment profit was ¥780 million, up 150.6% year on year.」

「During the 6-month period ended 30 September, the business generally remained on a recovery trend, particularly the information and communications network business for corporate customers, compared with the same period of the previous year, when the business faced severe procurement difficulties for servers, communications equipment, and other products due to tight semiconductor and other supply and demand. As a result, revenue was ¥6,619 million, up 26.3% year on year, and segment profit was ¥559 million, up 103.2% year on year.」

「During the cumulative first-quarter period, business generally recovered, particularly in information and communications networks for corporate customers, compared with the same period of the previous year, when severe procurement difficulties affected servers, telecommunications equipment and other products due to tight supply and demand for semiconductors and other components. As a result, sales were ¥2,727 million, up 29.2% year on year, and segment profit was ¥16 million, compared with a segment loss of ¥39 million in the same period of the previous year. Sales in the Solutions Business tend to be concentrated in the second and fourth quarters.」

「During the 9-month period ended 31 December, sales in the public sector declined following the recording of a large fire and disaster prevention project in the same period of the previous year. Other sectors also remained generally sluggish due to supply constraints affecting products as a result of tight supply and demand for semiconductors and other products. As a result, revenue was ¥7,861 million, down 0.02% year on year. In terms of earnings, higher selling, general and administrative expenses resulted in segment profit of ¥311 million, down 22.6% year on year.」

「During the 6-month period ended 30 September, the embedded systems and video systems sectors performed well, while sales in other sectors generally remained sluggish due to delivery delays and other issues caused by tight supply and demand for semiconductors and other products, which had continued from the previous consolidated fiscal year. As a result, revenue was ¥5,242 million, up 0.9% year on year. In terms of earnings, higher selling, general and administrative expenses resulted in segment profit of ¥275 million, down 10.2% year on year.」

「During the cumulative first-quarter period, sales generally declined due to the impact of delivery delays caused by tight semiconductor supply and demand conditions that had continued from the previous consolidated fiscal year. As a result, sales were ¥2,110 million, down 2.8% year on year. Segment loss was ¥39 million, compared with a segment loss of ¥36 million in the same period of the previous year, as selling, general and administrative expenses increased year on year due to staff expansion. As sales in the Solutions Business tend to be concentrated in the second and fourth quarters, segment profit is expected from the second quarter onward.」

「During the 9-month period ended 31 December, sales generally remained sluggish, as procurement of some products stalled against the backdrop of tight semiconductor supply and demand. As a result, revenue was ¥7,863 million, down 8.1% year on year. In terms of earnings, higher selling, general and administrative expenses from increased staffing also weighed on results, leaving segment profit down 40.3% year on year at ¥402 million.」

「During the 6-month period ended 30 September, sales generally remained sluggish, as procurement of some products stalled against the backdrop of tight semiconductor supply and demand from the second quarter onward. As a result, revenue was ¥5,196 million, down 11.9% year on year. In terms of earnings, although the gross profit margin improved, this was insufficient to offset the decline in revenue, while higher selling, general and administrative expenses from increased staffing also weighed on results, leaving segment profit down 43.6% year on year at ¥306 million.」

「Segment loss was ¥36 million, compared with segment profit of ¥82 million in the same period of the previous year, due to lower gross profit resulting from lower sales and changes in the sales mix, as well as higher selling, general and administrative expenses from staff expansion. As sales in the Solutions Business tend to be concentrated in the second and fourth quarters, segment profit is expected from the second quarter onward.」

「During the 9-month period ended 31 December, although the impact of the COVID-19 outbreak was limited compared with the Device Business, sales declined year on year in nearly all sectors except application software. As a result, revenue was ¥8,554 million, down 9.9% year on year. In terms of earnings, although the gross profit margin improved, this was insufficient to offset the decline in revenue, and segment profit fell 3.6% year on year to ¥674 million.」

「During the cumulative second-quarter period, the impact of the spread of COVID-19 was limited compared with the Device Business, but sales declined year on year across most fields other than application software. As a result, sales were ¥5,900 million, down 15.3% year on year. Although the gross margin improved, it was insufficient to offset the decline in sales, and segment profit was ¥544 million, down 13.4%.」

「Although the gross margin improved, it was insufficient to offset the decline in sales, and segment profit was ¥82 million, down 48.0% year on year.」

「In terms of earnings, the improvement in the gross profit margin resulted in segment profit of ¥1,443 million, up 13.5% from the previous fiscal year.」

「During the 9-month period ended 31 December, sales in the public sector, which had included large projects in the same period of the previous year, turned downward. However, sales in other sectors generally remained strong, resulting in revenue of ¥9,495 million, down 0.2% year on year. In terms of earnings, the improvement in the gross profit margin lifted segment profit 44.3% year on year to ¥699 million.」

「During the 6-month period ended 30 September, sales in the public sector, which had included large projects in the same period of the previous year, turned downward. However, sales in other sectors generally remained strong, resulting in revenue of ¥6,961 million, up 3.8% year on year. In terms of earnings, the increase in revenue and improvement in the gross profit margin lifted segment profit 124.3% year on year to ¥629 million.」

「During the 3-month period ended 30 June, although the embedded business declined from the same period of the previous year, other businesses generally remained firm. As a result, revenue was ¥3,130 million, up 35.2% year on year, and segment profit was ¥158 million, compared with a segment loss of ¥84 million in the same period of the previous year.」

「During the current consolidated fiscal year, sales to the public-sector and video-related fields performed strongly compared with the previous consolidated fiscal year. As a result, sales were ¥14,604 million, up 7.7%, and segment profit was ¥1,272 million, up 19.7%.」

「As a result, sales were ¥6,709 million, up 24.0% year on year. In terms of earnings, however, segment profit was ¥280 million, down 9.4%, due to a decline in the gross margin resulting from changes in the sales mix, the postponement of deliveries of high-margin large projects to the second half, and higher selling, general and administrative expenses associated with staff expansion.」

「As sales in the Solutions Business tend to be concentrated in the second and fourth quarters, segment profit is expected from the second quarter onward.」

「As a result, sales in the Solutions Business were ¥13,555 million, up 11.4% from the previous fiscal year. However, as the gross margin declined, segment profit was ¥1,062 million, down 1.3% and remaining broadly at the previous fiscal year’s level.」

「The segment recorded a loss of ¥26 million in the third-quarter consolidated accounting period, but segment profit is expected to improve in the fourth-quarter consolidated accounting period because sales are planned to expand.」

「During the cumulative second-quarter period, sales of embedded systems remained weak, while most other areas performed solidly. As a result, sales were ¥5,410 million, up 1.7% year on year, and segment profit was ¥309 million, down 3.0%.」

「As sales in the Solutions Business are planned to be weighted toward the second and fourth quarters, segment profit is expected from the second quarter onward.」