The Company's Medium- to long-term Management Strategy

(i) Sustainable Earnings Growth and Business Expansion

The Group's medium-term management plan was formulated with the fiscal year ended June 30, 2019 as the first year, and was announced in September 2018. We achieved our target of net income of 1 billion yen in the previous medium-term management plan announced in August 2017, 2 years ahead of schedule in the fiscal year ending June 30, 2018, and have therefore formulated a new five-year plan.

A growing demand for stronger governance and management capabilities at client companies is turning into a tailwind for us. We continue to focus on providing sustainable value to clients through our consolidated accounting related business, business intelligence business, and outsourcing business. At the same time, we are aiming for earnings growth by improving quality and productivity and promoting automation.

On the other hand, in order for the Group to achieve medium-to long-term growth, it is extremely important to strengthen the system for product development that accurately reflects the needs of client companies and changes in the surrounding environment. Therefore, we will continue to invest in product development that are necessary from a medium-to long-term perspective, rather than limiting ourselves to short-term improvement in profitability.

 

(ii) Changing Business Model

In order to increase corporate value, the Group focuses on the stable and continuous generation of earnings. In the medium-term management plan, the Group has set the goal of continuously increasing the ratio of recurring revenues. To achieve this, we will accelerate the expansion of the outsourcing business and promote the shift of other businesses to cloud and transformation of our business models.

 

(iii) Grow through Mergers and Acquisitions

In addition to the growth of our existing businesses, if there is an opportunity to conduct mergers and acquisition with a company that meets the Group's strategy, we will carefully judge whether or not it will contribute to the enhancement of the Group's corporate value, and will actively promote M&A while taking care not to make the M&A an objective.