Focus on the Cloud Solutions Business and Expansion of Corporate Value

「The business portfolio transformation begun in 2020 will move from the investment phase to the stable recovery and growth phase with the full-scale opening of the Smart Venue business, and we intend to accelerate it further.」

「During the six-month interim consolidated accounting period, we steadily pursued revenue generation, including the acquisition of venue rental and partnership agreements at GLION ARENA KOBE (Note 1), which opened in April, resulting in a substantial increase in revenue. In the Mobility Services segment, higher MRR from an increase in the number of contracts and improved operational efficiency also proved effective. As a result, revenue was ¥2,830.939 million, up 56.7% year on year, and operating loss was ¥49.144 million, compared with a loss of ¥152.792 million in the same period of the previous year.」

「With a view to an era based on the new concept of the public, in which private companies play a greater role in social systems, we have begun transitioning further from being a SaaS provider that merely supplies tools to becoming a leading operator responsible for community development.」

「During the six-month interim consolidated accounting period, we used the sustainable growth model as the earnings base, including the acquisition of MRR in the Cloud Solutions business and further development of administrative digitalization. At Smart Venue, we also pursued the creation of new revenue models by acquiring venue rental bookings and partnership agreements for GLION ARENA KOBE (Note 1). As a result, revenue was ¥1,806.975 million, up 5.4% year on year, and operating loss was ¥152.792 million, compared with a loss of ¥303.888 million in the same period of the previous year. Performance improved substantially year on year, and with Smart Venue, which had remained in the investment phase, finally beginning to take off, we are advancing the business toward achieving the budget target of full-year profitability.」

「Over the medium to long term, we have established “Moonshot Vision 2028” as our policy through the 100th anniversary of our founding in 2028. While expanding our existing cloud services, we will pursue the creation of future social systems, or smart cities, by combining the power of real-world communities with digital technology.」

「Going forward, we will continue to pursue stable MRR growth in the SaaS market, which is expected to expand steadily, and reduce costs through ongoing operational efficiency improvements in the Cloud Solutions business. We will also focus on creating services that contribute to digital community development through initiatives such as the smart-city project centered on GLION ARENA KOBE, scheduled to open in 2025, under Smart Venue, the “third pillar” following digital government and mobility services, with the aim of creating a revenue model that will support further growth.」

「Going forward, we will continue to pursue stable MRR growth in the SaaS market, which is expected to expand steadily, and reduce costs through ongoing operational efficiency improvements in the Cloud Solutions business. We will also focus on creating services that contribute to digital community development through initiatives such as the smart-city project centered on Kobe Arena, scheduled to open in 2025, under Smart Venue, the “third pillar” following digital government and mobility services, with the aim of creating a revenue model that will support further growth.」

「Going forward, we will continue to pursue stable MRR growth in the SaaS market, which is expected to expand steadily, and reduce costs through ongoing operational efficiency improvements in the Cloud Solutions business. We will also focus on creating services that contribute to digital community development through initiatives such as the smart-city project centered on Kobe Arena, scheduled to open in 2025, under Smart Venue, the “third pillar” following digital government and mobility services, with the aim of creating a revenue model that will support further growth.」

「Going forward, we will continue to pursue stable MRR growth in the SaaS market, which is expected to expand steadily, and reduce costs through ongoing operational efficiency improvements in the Cloud Solutions business. We will also focus on creating services that contribute to digital community development through initiatives such as the smart-city project centered on Kobe Arena, scheduled to open in 2025, under Smart Venue, the “third pillar” following digital government and mobility services, with the aim of creating a revenue model that will support further growth.」

「During the nine-month period ended 31 December, we implemented measures including thorough operational efficiency improvements and cost reductions initiated in the previous consolidated fiscal year, while strengthening the acquisition of MRR in the Cloud Solutions business. We worked to transition to a sustainable growth model and create a new medium- to long-term revenue model.」

「During the six-month period ended 30 September, although the business was affected by unstable social conditions, we implemented measures including thorough operational efficiency improvements and cost reductions initiated in the previous consolidated fiscal year, while strengthening the acquisition of MRR (monthly recurring revenue) in the Cloud Solutions business. We worked to transition to a sustainable growth model and create a new medium- to long-term revenue model. As a result, revenue was ¥1,750.161 million, up 4.3% year on year, operating loss was ¥158.509 million, compared with a loss of ¥199.620 million in the same period of the previous year, and ordinary loss was ¥160.771 million, compared with a loss of ¥196.619 million.」

「During the three-month period ended 30 June, although the business continued to be affected by COVID-19, we implemented measures including thorough operational efficiency improvements and cost reductions initiated in the previous consolidated fiscal year, while strengthening the acquisition of MRR (monthly recurring revenue) in the Cloud Solutions business. We worked to transition to a sustainable growth model and create a new medium- to long-term revenue model. As a result, revenue was ¥789.694 million, up 0.2% year on year, operating loss was ¥124.757 million, compared with a loss of ¥136.117 million in the same period of the previous year, and ordinary loss was ¥126.131 million, compared with a loss of ¥132.938 million.」

「During the nine-month period ended 31 December, measures implemented since the previous fiscal year proved effective as the business as a whole transitioned to a sustainable growth model, resulting in a substantial improvement from the same period of the previous year.」

「During the six-month period ended 30 September, revenue was ¥1,677.256 million, up 19.9% year on year, operating loss was ¥199.620 million, compared with a loss of ¥381.527 million in the same period of the previous year, and ordinary loss was ¥196.619 million, compared with a loss of ¥378.041 million.」

「We will continue to minimize the impact of COVID-19, restore performance by increasing monthly fixed revenue in the Cloud Solutions business, and build an optimal structure for the group as a whole based on company-wide organizational restructuring, streamlining and efficiency improvements, thereby strengthening our earnings base.」

「As a result, both segment revenue and profit reached record highs. Segment revenue was ¥1,732.547 million, up 14.5% year on year, and segment profit was ¥163.864 million, up 135.9%.」

「Recognizing business restructuring as our top priority and believing that further selective concentration of management resources is essential to improving corporate value, we transferred the sales agency business for mobile telecommunications equipment on 31 March 2020, shifted our focus to the Cloud Solutions business and worked to expand that business.」

「Although this is temporarily causing performance to fall below the previous fiscal year's results, we are working to shift to a sustainable growth model that leverages the foundations we have built by securing stable revenue, strengthening business areas expected to grow, creating new businesses that could become a new core, and creating highly profitable businesses.」

「The transfer of the sales agency business for mobile telecommunications equipment on 31 March 2020 will temporarily cause performance to fall below the previous fiscal year's results. We will pursue selective concentration, establish an optimal production structure for the group as a whole, strengthen business areas expected to grow, and create new businesses that could become a new core.」

「As a result, as of 30 June 2020, the businesses of the company and the group consisted of a single segment, the Cloud Solutions business.」

「During the nine-month period ended 31 December 2019, the group determined that further concentration of management resources on the strategically prioritized Cloud Solutions business would contribute to improving the group's corporate value over the medium to long term. Accordingly, on 31 March 2020, it transferred its sales agency business for mobile telecommunications equipment to イリオスネット株式会社, a business facing an uncertain outlook in a mature market.」

「In the Cloud Solutions business, which we are strengthening as a growth area, digital government and mobility IoT services performed steadily. Mobile business, however, recorded a substantial decline in revenue, reflecting difficult market conditions.」

「To shift to a sustainable growth model that leverages the foundations we have built, we are investing actively in creating new fields in addition to securing stable revenue, and are working to create highly profitable businesses.」

「Under the basic policy described above, as the shift toward cloud-first (Note 1) becomes increasingly pronounced, the group will continue to concentrate on and invest resources in cloud services for local governments, public institutions and corporations.」

「Amid these conditions, on 1 March 2019, the group acquired all shares of 株式会社ノースディテール, making it a wholly owned subsidiary. The company operates a software development business and worked to strengthen its development capabilities in growth fields, including regional information cloud services and mobility services, while pursuing new business opportunities.」

「Regional information cloud services and mobility services continued to drive overall business performance. Although some unprofitable projects arose as the number of new projects increased, we continued to concentrate management resources in line with our sustainable growth strategy and invested for growth to expand services. As a result, revenue in the Cloud Solutions business was ¥1,860.627 million, up 36.0% year on year, while segment profit was ¥84.494 million, down 32.5%.」

「In the Cloud Solutions business, we promoted regional information cloud services for local governments and public institutions, provided as industry-specific SaaS with a view to open government (Note 2); mobility services (Note 3), which provide services by collecting and utilizing automotive-related data, based on sales of driver-safety support equipment; a cloud platform (Note 4), which supports the infrastructure for cloud services using virtualization technology; and healthcare support, which helps companies and local residents extend healthy life expectancy and maintain and improve their health. As a result, revenue in the Cloud Solutions business was ¥949.996 million, up 39.2% year on year, and segment profit was ¥40.482 million, up 49.8%.」

「Under the basic policy described above, as the shift toward cloud-first (Note 1) becomes increasingly pronounced, we will continue to concentrate on and invest resources in cloud services (Note 2) for local governments, public institutions and corporations.」

「In the Cloud Solutions business, the number of new projects acquired grew particularly strongly in regional information cloud services and mobility services. In regional information cloud services, profitability improved as service levels were strengthened through upfront investment in software for service delivery. In mobility services, high-margin projects drove performance, resulting in revenue of ¥2,484.280 million, up 28.2% year on year, and segment profit of ¥391.126 million, up 103.9%.」

「As a result, revenue in the Cloud Solutions business was ¥1,368.511 million, up 16.6% year on year, and segment profit was ¥125.116 million, up 50.6%. The Cloud Solutions business also recorded a marked improvement in profit margins as its service infrastructure was converted into a platform.」

「As a result, revenue in the Cloud Solutions business was ¥682.374 million, up 30.0% year on year. In the previous fiscal year, cost reductions were achieved through architectural improvements and higher service levels, and segment profit for the cumulative first quarter was ¥27.023 million, up 445.1% year on year.」

「Our stated aim is to “Create social systems that will go down in history through smart technology!” Based on the current composition of segment profit, we continued to concentrate resources on the rapidly growing Cloud Solutions business.」

「In the Cloud Solutions business, we promoted regional information cloud services for local governments and public institutions provided as industry-specific SaaS, a cloud platform (Note 4) based on urban data centers, and mobility services (Note 5) for automotive applications.」

「As a result, revenue in the Cloud Solutions business was ¥1,173.778 million, up 3.8% year on year, and segment profit was ¥83.103 million, down 7.7%.」

「In the Cloud Solutions business, we promoted a cloud platform (Note 5) based on urban data centers, regional information cloud services for local governments and public institutions provided as industry-specific SaaS, and mobility services (Note 6) for automotive applications.」

「We aim to be “a company that solves social issues through cloud services” and will further focus on the rapidly growing cloud solutions business, based on its current share of segment profit.」