During the fiscal year ended March 31, 2020, the Japanese economy gradually expanded with steady improvements in corporate revenues and employment conditions, but there is increasing uncertainty about the future due to concerns about the impact of COVID-19 on the Japanese and overseas economies as it spreads worldwide.
In the FY2019, the Group established a new mid-term management plan (FY2019-FY2021) aiming to expand operational scale and improve corporate value. We are constantly considering management with emphasis on the balance between “defense” strengthening connections with customers and “offense” exploiting new market areas and services, and aim to achieve performance targets by starting the business strategic plan, the investment strategic plan and the ESG action plan to continue to practice efficient strategies and tactics according to changes in conditions.
During the consolidated fiscal year under review, which is the first year of the mid-term management plan, while expanding business through deeper development of existing customers and engaging in initiatives to develop new customers, we have met system development demand by accurately responding to diversifying customer needs. Our focus on enhancing the product appeal of our data center services and cloud services forming the data infrastructure essential for companies’ digital transformation (DX) has paid off, producing results exceeding the performance targets for the year and leading to significant progress in the mid-term management plan.
As a result, management performance for the fiscal year ended March 31, 2020 exceeded all of the indicators in the revised figures announced on October 29, 2019, with net sales of 31,097 million yen (up 12.7% year-on-year), operating profit of 2,501 million yen (up 6.6% year-on-year), ordinary profit of 2,531 million yen (up 7.8% year-on-year) and profit attributable to owners of parent of 1,672 million yen (up 9.9% year-on-year).
(From Summary of Consolidated Financial Results for the Year Ended March 31, 2020)
Although conditions in the Japanese economy continue to be difficult due to the impact of COVID-19, there was a moderate trend of recovery supported by the recovery of external demand, the accommodative monetary environment and the effects of economic stimulus measures by the government. However, the future remains uncertain due to factors such as the second declaration of a state of emergency to address COVID-19 spreading again early in the New Year.
In the information services industry in which the Group operates, there have been movements to increase investment aimed at the rapid spread of work reform tools, improvement of operational efficiency and information security measures in areas such as telework providing flexible working environments during the COVID-19 pandemic. Furthermore, it is believed that initiatives aimed at digital transformation (DX) such as the spread of cloud computing, the promotion of IoT and the expansion of the utilization of big data and AI (artificial intelligence) will continue.
Meanwhile, although there has been caution in overall capital investment plans due to the slowdown of economic activity amid the COVID-19 pandemic, there has been an increase in investments aimed at areas such as telework, measures to prevent infection and the shift to online sales in system investment plans.
The results forecast for the fiscal year ending March 31, 2021 is as stated in the “Notice on Revision of Full-year Forecast” announced on January 29, 2021. The previous forecast was calculated with the outlook that the COVID-19 outbreak would subside and economic activity would gradually recover. However, the outbreak is taking a long time to subside and although economic activity is recovering, uncertainty remains at present due to another declaration of a state of emergency. The results forecast has been revised because it is expected to fall short of the previous full-year forecast due to the business environment surrounding the Group and the results for the nine months ended December 31, 2020.
(From Summary of Consolidated Financial Results for the Nine Months Ended December 31, 2020)