Improving Profitability

「Reflecting steady business growth, the targets for the new medium-term management plan for the fiscal year ending March 2027 were revised upward for net sales, operating margin and ROE.」

「The Group has reached the midpoint of its medium-term management plan, CHALLENGE 2026 (fiscal years ending March 2025 to March 2027), and performance is progressing steadily in line with the plan. In particular, the 3 priority businesses of cloud, security and ultra-fast development are growing steadily and driving performance strongly.」

「Fiscal year ending March 2027 targets: Net sales: ¥74,500 million or more; Operating margin: 11.0% or more; Return on equity (ROE): 20.0% or more」

「Revenue and profit increased year on year as substantial growth in the priority cloud and security businesses was complemented by hardware upgrades associated with customers’ system renewals. The full-year earnings forecast and year-end dividend forecast were revised upward due to progress ahead of plan. The revised full-year forecast is operating profit of ¥5,800 million, up 13.7%; ordinary profit of ¥5,900 million, up 13.5%; and net profit attributable to owners of the parent of ¥4,100 million, up 14.2%. The revenue forecast remains unchanged from the initial forecast.」

「In April 2024, we launched the new medium-term management plan CHALLENGE 2026. To achieve sustained growth and high profitability, we have refined and consolidated our priority businesses into three areas, cloud, security and ultra-fast development, and will accelerate transformation of the business structure by further advancing and deepening each business.」

「Revenue was ¥49,280 million, up 14.8% year on year; operating profit was ¥3,461 million, up 16.9%; ordinary profit was ¥3,576 million, up 16.2%; and quarterly net profit attributable to owners of the parent was ¥2,496 million, up 17.9%. Cloud, security and ultra-fast development, the priority businesses, drove revenue and profit growth, resulting in double-digit growth in both.」

「Revenue was ¥32,971 million, up 14.1% year on year; operating profit was ¥2,282 million, up 11.4%; ordinary profit was ¥2,386 million, up 9.9%; and quarterly net profit attributable to owners of the parent was ¥1,693 million, up 12.5%. In addition to steady growth in priority businesses, large-scale modernisation projects arising from major manufacturers’ withdrawal from general-purpose mainframes provided support, resulting in double-digit year-on-year growth in both revenue and operating profit. Profit is expected to set a new record in the consolidated fiscal year, following the previous fiscal year.」

「Revenue was ¥16,359 million, up 17.9% year on year; operating profit was ¥1,139 million, up 13.3%; ordinary profit was ¥1,231 million, up 16.7% from the previous fiscal year; and quarterly net profit attributable to owners of the parent was ¥850 million, up 17.3% from the previous fiscal year. Orders for the stock business and the order backlog for ultra-fast development both reached record highs, and the consolidated fiscal year is expected to set a new record for profit. The year began smoothly as the final year of the medium-term management plan.」

「ROE for the consolidated fiscal year was 14.1%, up 1.5 percentage points from the previous fiscal year. The target for the final year of the medium-term management plan, the fiscal year ending March 2024, is ROE of 14.0%.」

「During the cumulative third quarter, we advanced specific and optimal proposals through HARMONIZE in response to customers’ IT investment and DX demand, with the aim of firmly establishing a growth trajectory.」

「Transformation of the business structure, pursued to achieve the “continuous growth” target of the medium-term management plan HARMONIZE 2023, which began in the previous fiscal year, began to bear fruit. Revenue returned to positive growth in the cumulative second quarter, while profit continued to achieve double-digit growth from the first quarter.」

「During the cumulative first quarter, the priority areas grew steadily and transformation of the business structure progressed further, resulting in a return to revenue growth year on year. Profit also increased substantially as the shift toward value-added businesses and the accumulation of stock businesses paid off. Orders for ultra-fast development and new stock secured in cloud and security during the cumulative first quarter were both at record highs.」

「Revenue declined year on year because the shares of 株式会社アイ・ラーニング, which operated a human resources development services business, were transferred on 31 March 2021 and excluded from consolidation, and because the nature of the business changed as the shift to cloud services progressed. Profit increased year on year as the shift toward high-value-added priority businesses and optimisation of selling, general and administrative expenses contributed. Revenue was ¥41,281 million, down 8.1% year on year; operating profit was ¥2,396 million, up 16.0%; ordinary profit was ¥2,526 million, up 17.2%; and quarterly net profit attributable to owners of the parent was ¥1,753 million, up 24.4%.」

「Revenue was ¥27,571 million, down 8.6% year on year; operating profit was ¥1,668 million, up 16.1%; ordinary profit was ¥1,778 million, up 19.9%; and quarterly net profit attributable to owners of the parent was ¥1,256 million, up 28.4%. Revenue declined year on year partly because the shares of 株式会社アイ・ラーニング, which operated a human resources development services business, were transferred on 31 March 2021 and the company was excluded from consolidation, and because hardware sales declined as the shift to cloud services progressed. Profit, however, increased by double digits year on year as the shift toward high-value-added priority businesses and optimisation of selling, general and administrative expenses contributed.」

「In addition to steady progress in transforming the business structure by concentrating on high-value-added, high-margin businesses such as ultra-fast development, cloud and security, the acquisition of new customers in these priority areas contributed to a substantial increase in profit. Revenue was ¥13,687 million, down 9.8% year on year; operating profit was ¥807 million, up 16.9%; ordinary profit was ¥855 million, up 16.0%; and quarterly net profit attributable to owners of the parent was ¥583 million, up 0.7%.」

「Going forward, we will accelerate the transformation to a business structure centred on these high-value-added businesses, promote the expansion of our stock businesses and establish a stable earnings base. Target for the fiscal year ending March 2024: revenue ¥60,000 million, operating profit ¥3,300 million, operating margin 5.5%, net profit attributable to owners of the parent ¥2,200 million.」

「Although revenue and profit both declined year on year, operating profit increased excluding the effects of the special upgrade demand in the prior-year period, also reflecting lower selling, general and administrative expenses such as advertising and promotion, travel and transportation costs.」

「Although revenue and profit both declined year on year, excluding the effects of the special upgrade demand included in the prior-year figures, operating profit increased.」

「Although revenue and profit both declined year on year, excluding the effects of the temporary hardware upgrade demand that continued through the previous fiscal year, the company remains on a growth trajectory for both revenue and profit.」

「During the cumulative third quarter, strategic priority areas including cloud services, security services and New SI (system development using new methods) grew steadily. In addition, orders for SI and ITS (IT services) remained at an extremely high level, and special demand for Windows 10 upgrades also contributed, resulting in very strong Group performance. Revenue was ¥50,947 million, up 19.0% year on year; operating profit was ¥3,032 million, up 51.2%; ordinary profit was ¥3,195 million, up 50.1%; and quarterly net profit attributable to owners of the parent was ¥2,106 million, up 44.3%. Profit reached a record high for a second consecutive cumulative quarter.」

「The cumulative second-quarter consolidated results were extremely strong. In addition to the effects of these initiatives, strategic priority areas such as cloud services, security services and New SI (system development using new methods) drove the business. Orders for systems development and IT construction services reached a record high, and demand for upgrades to Windows 10 also contributed. Revenue was ¥34,613 million, up 22.3% year on year; operating profit was ¥2,037 million, up 50.3%; ordinary profit was ¥2,127 million, up 47.6%; and quarterly net profit attributable to owners of the parent was ¥1,377 million, up 37.7%. This was the highest profit ever recorded for a cumulative second quarter.」

「As a result, cumulative first-quarter revenue was ¥16,279 million, up 16.6% year on year; operating profit was ¥929 million, up 39.1%; ordinary profit was ¥984 million, up 33.3%; and quarterly net profit attributable to owners of the parent was ¥643 million, up 20.8%.」

「For the cumulative third quarter, profit increased following the second quarter, partly due to the effects of the initiatives described above. Revenue was ¥42,829 million, down 11.5% year on year; operating profit was ¥2,005 million, up 27.8%; ordinary profit was ¥2,129 million, up 34.1%; and quarterly net profit attributable to owners of the parent was ¥1,459 million, up 44.2%.」

「For the cumulative second quarter, revenue was ¥28,303 million, down 17.7% year on year; operating profit was ¥1,355 million, up 29.0%; ordinary profit was ¥1,441 million, up 33.1%; and quarterly net profit attributable to owners of the parent was ¥1,000 million, up 51.5%.」

「For the cumulative first quarter, revenue was ¥13,961 million, down 31.1% year on year; operating profit was ¥668 million, up 37.9%; ordinary profit was ¥738 million, up 38.9%; and quarterly net profit attributable to owners of the parent was ¥532 million, up 75.6%.」

「The Group achieved its targets for revenue and operating profit in the consolidated fiscal year through initiatives including converting businesses into services through digital transformation, concentrating management resources, optimising Group management and continuously improving earnings. Achievement against the targets was 100.2% for revenue and 108.5% for operating profit.」

「As a result, cumulative third-quarter revenue was ¥48,387 million, down 21.8% year on year; operating profit was ¥1,568 million, up 4.3%; ordinary profit was ¥1,588 million, up 3.0%; and quarterly net profit attributable to owners of the parent was ¥1,011 million, up 2.2%.」

「Results for the cumulative second quarter declined year on year, partly because all shares of 株式会社イグアス, which had been a consolidated subsidiary at the end of the first quarter, were sold. However, profit increased as a result of initiatives to improve earnings. Revenue was ¥34,386 million, down 16.3% year on year; operating profit was ¥1,051 million, up 9.5%; ordinary profit was ¥1,082 million, up 11.6%; and quarterly net profit attributable to owners of the parent was ¥660 million, up 4.4%.」

「Although revenue declined year on year, operating profit, ordinary profit and net profit attributable to owners of the parent increased through initiatives to improve profitability, enabling a solid start to the first year of the medium-term management plan. For the cumulative first quarter, revenue was ¥20,249 million, down 1.9% year on year; operating profit was ¥484 million, up 43.0%; ordinary profit was ¥531 million, up 44.4%; and quarterly net profit attributable to owners of the parent was ¥303 million, up 36.2%.」

「Under Transform2020, the basic management policies are “changing the business structure,” “clarifying priority areas” and “new initiatives.” We will promote the conversion of businesses into services through digital transformation and achieve our targets. FY2017 actual: revenue ¥8,327.2 million, operating profit ¥185.5 million, operating margin 2.2%, ROE 9.6%. FY2021 target: revenue ¥6,000 million, operating profit ¥270 million, operating margin 4.5%, ROE 12.2%.」

「Compared with the forecast for cumulative consolidated results for the current fiscal year, progress in the cumulative third quarter was above 75% for all items: revenue was 75.5%, operating profit 83.5%, ordinary profit 83.3% and quarterly net profit attributable to owners of the parent 94.3%.」

「Compared with the forecast for the cumulative second-quarter results for the current fiscal year, revenue increased 0.3%, operating profit increased 12.9%, ordinary profit increased 10.2% and quarterly net profit attributable to owners of the parent increased 26.5%, driven by initiatives to improve earnings.」

「This fiscal year is the final year of the medium-term management plan, and we are continuing to promote further earnings improvement through structural reform, as we did in the previous fiscal year.」

「Engaging in highly profitable businesses is an essential challenge in enhancing the Group’s corporate value.」