Medium-Term Management Plan

Outline

To achieve the FY2033 concept “HIGH FIVE 2033”, we have formulated “FLY ON 2026”, our 4th Medium-Term Management Plan for the three years from FY2024 through FY2026, using a backcasting approach.

Financial Targets

FY2023 FY2026 (Targets)
Net sales (JPY MM) 20,652 28,000 Net sales CAGR 10.7%
Operating income (JPY MM) 3,737 4,800 Operating income CAGR 8.7％
Operating Income Margin (％) 18.1 17.1
ROE (％) 15.4 15.0 Maintain high levels of ROE and ROIC
ROIC (％) 15.0 15.0

Basic Strategies of 4th Medium-Term Management Plan

Expanding of Business Portfolio

Based on the themes of 'Deeper,' 'Bigger,' and 'Newer,' we aim to expand our business portfolio, targeting net sales of 28 billion yen, operating income of 4.8 billion yen, and ROE and ROIC of over 15%. Additionally, we aim to generate net sales of 2.8 billion yen in FY2026 from new businesses.

Enhancing sales force and deepening customer relationships

Aim to develop existing business areas through account-based selling

Current situation
  • Each division covers the whole of Japan
  • Our customer base of regional banks is not being fully utilized
Future Prospects

Increase regional cross-selling rates by division

  • 2-division cross-selling 40/47 (85.1%) ➝ 95%
  • 3-division cross-selling 28/47 (59.6%) ➝ 75%
Advantages of account-based selling
  • Aggregate regional information
  • Serve as a focal point of businesses driving regional economies
  • Propose multiple services
  • Strengthen connections with customers

Strengthening development personnel and reorganizing development methods

Aim to shorten delivery times and improve quality by utilizing the latest technologies and alliances

Current situation
  • Each employee specializes in a specific product
  • Continue conventional development method
Future Prospects

Acquire latest technologies and revamp packages

  • Enhance added value by strengthening alliances
  • Expand cloud packages
Utilizing the latest technologies and strengthening alliances
  • Utilize AI technology effectively
  • Promote SaaS models
  • Combine with agile development
  • Advance Web3.0 initiatives

Growing customer base / Expanding existing products horizontally

Aim to expand existing solutions into new areas, roll out new solutions to existing areas

Expanding existing solutions into new areas

Expand contact center services provided to financial institutions into new areas, and contribute to improved operational efficiency through such as inquiry automation

Spin off BPO services cultivated through public sector projects and expand them into other business areas

Rolling out new solutions in existing areas

Develop unmanned vending machines that enable cashless payments in the retail business areas to further promote cashless payments, alleviate labor shortages, and achieve zero food waste

Provide regional sightseeing promotion services using digital means in order to help revitalize regional economies

Developing new product / Accelerating development

Aim to generate sales of JPY2,800MM in FY2026 from new businesses

Digital Safe using blockchain technology
An electronic end-of-life document apps that combines "Safe Deposit Box" and "End-of-Life Documents" by using blockchain technology
Securing important information in a safe place

BtoB payment services
Digital payment agency services
Providing optimal solutions for ever-growing digital payment

Internal venture organization

Aim to create businesses in the following new areas

ESG Activities in Our Business Operations

Aim to solve social and environmental issues

Example) Acquiring certificates

  • Travel to the place of issuance or apply by post

    • CO₂ emissions
    • Use of paper

  • Filling out of the application form and certificate issuance

    • Use of paper
    • Personnel allocation

  • Payment (mainly cash)

    • Personnel allocation
    • Cash management
    • Transportation insurance

  • Post-acquisition travel and submission to end organization

    • CO₂ emissions
    • Use of paper
    • Personnel allocation
    • Transportation insurance
  • Application by smartphone
  • Digital acquisition (paperless)
  • Cashless payment
    • CO₂ emissions
    • Use of paper
    • Personnel allocation
    • Cash management
    • Transportation insurance

Not only environmentally friendly, equally serviceable in the even to contingency. Creating opportunities for personnel to play an active role in advanced work. Furthermore greatly reducing back-office work and costs

Aim to secure and develop human resources, and related investments

Recruitment

  • Recruitment of a diverse range of new graduates
    Raising from 30 people (FY2023) to 60 people annually (FY2026)
  • Recruitment of experienced professionals
  • Recruitment of human resources with an eye to new business development

Training

  • Enhancement of internal training
  • Encouragement of reskilling

Improving engagement score (ES)

  • Continuous wage rise
  • Enhanced office environment
  • Introduction of a stock-based compensation program
  • Further improvement of efficiency via DX promotion

Aim to increase recognition and maintain high levels of shareholder returns

Continue to communicate our growth story

  • Financial results briefings *Twice a year
  • ITFOR Newsletter (information to shareholders) *Twice a year
  • Meetings for individual investors

Increase the number of institutional investors

  • Targeting to be included in the investment scope of wider spectrum of institutional investors (FY2026)

Reflect dialogue with institutional investors into management as appropriate

  • Increasing investor meetings
    annual target of 60 meetings in FY2026 from 40 in FY2023
  • Sharing and discussing information about investor meetings with management

Shareholder return policy

  • Targeting dividend payout ratio of 50%
  • Maintaining a total return ratio of over 70%
  • Planning to pay dividends twice a year (interim and year-end)

ROIC management

  • Setting ROIC target that exceeds the cost of capital
  • Reflecting ROIC target in investment decisions
  • Withdrawing from businesses that do not meet ROIC target

Plan to make shareholder returns and investments more than cash flow

3-year total

M&A, CVC, etc.
New business investments 2,000
  • Investment in VVP business
  • Investment in Syddy business
  • Investment in ITFOR BeX systems
Existing business investments 1,500
  • Upgrade development
  • New system development
Internal investments 1,200
  • Core systems
  • Investment in information security
Human resource investments 1,000
  • Investment in human resources (recruitment, training)
  • Stock compensation plan
Shareholder returns 6,160
  • Target dividend payout ratio of 50%
  • Maintain a total return ratio of at least 70%
  • Plan to pay dividends twice a year (interim and year-end)

Review of 3rd Medium-Term Management Plan