決算説明会資料

Shigeaki Betsuno, CFO, Business Engineering Corporation : Thank you for joining us. I would like to walk you through our consolidated financial results for the first quarter of the fiscal year ending March 2026.

First, an overall summary. Corporate earnings in Japan continue to recover, and business sentiment remains at a favorable level. Demand for digital transformation (DX) among manufacturers remains strong, and strategic digital investments are progressing steadily. Against this backdrop, our consolidated results for the first quarter were solid.

Net sales were ¥6,039 million, up 19.8% year on year (YoY). Operating profit was ¥1,728 million, up 48.0% YoY. Net profit was ¥1,371 million, up 70.8% YoY. Revenue reached a record high for the third consecutive quarter, and profits reached a record high for the fourth consecutive quarter.

In the Solutions Business, revenue, profit, and orders all recorded significant growth in the first quarter. In the Products Business, license sales also reached an all-time high.

In addition, we completed in the first quarter the sale of a portion of the strategic shareholdings that had been planned for the first half. As a result, we recognized gains from sale of strategic shareholdings, which contributed to the substantial increase in net profit.

Reflecting this strong first-quarter performance, we revised our first half earnings forecast as follows:
• Net sales: ¥11.8 billion, an upward revision of ¥0.8 billion from the previous forecast.
• Operating profit: ¥3.0 billion, up ¥0.4 billion from the previous forecast.
• Net profit: ¥2.2 billion, up ¥0.3 billion from the previous forecast.
The primary driver was the stronger-than-planned performance of the Solutions Business, which significantly exceeded our initial first-quarter plan.

Given ongoing uncertainty around international trade policies, we are maintaining our full-year earnings forecast unchanged for now. If a revision becomes necessary, we will disclose it promptly.

As noted above, net sales, operating profit, and net profit all increased year on year. Orders received were ¥6,164 million, a 31.9% YoY increase.

Looking at progress against our revised first half earnings forecast on the slide, the achievement ratios are:
• Net sales: 51.2%
• Operating profit: 57.6%
• Orders received: 52.2%
indicating steady progress across the board.

Against our full-year sales forecast of ¥22.0 billion, first-quarter net sales were ¥6.0 billion, representing 27.5% progress.

Against our full-year operating profit forecast of ¥5.2 billion, first-quarter operating profit was ¥1.7 billion, representing 33.2% progress. Both revenue and profit are tracking well.

Operating profit increased 48.0% from ¥1,167 million in the prior-year first quarter. By driver:
• Top-line growth contributed +¥439 million, led by strong expansion in the Solutions Business and double-digit growth in the Products Business.
• Gross margin improved from 44.1% to 47.0%, adding +¥180 million, mainly due to profitability improvements in the Solutions Business. SG&A increased ¥59 million, reflecting higher compensation levels and increased R&D expense.

Taken together, these factors produced the 48.0% increase in operating profit.

Net sales by segment were as follows:
• Solutions Business: ¥3,991 million (+25.9% YoY)
• Products Business: ¥1,953 million (+12.9% YoY)
• Within this, mcframe license sales were ¥1,421 million (+7.7% YoY).

For the first half earnings forecast, we revised the Solutions Business net sales upward by ¥0.8 billion to ¥7.8 billion. As a result, the achievement ratios are:
• Solutions Business: 51.2%
• Products Business: 51.4%
• mcframe license sales: 49.9%
all broadly in line with plan.

Operating profit by segment:
• Solutions Business: ¥1,294 million (+62.5% YoY)
• Products Business: ¥757 million (+3.9% YoY)
with especially strong profit growth in the Solutions Business.

In the first quarter, the Solutions Business delivered robust growth, with net sales up 25.9% YoY to ¥3,991 million, driven by additional projects from existing customers and timing shifts across fiscal periods (carryover from the prior year). Compared with the fourth quarter of the previous fiscal year, revenue increased by more than ¥500 million.

As project profitability continued to improve, the operating profit margin reached a high level of 32.4%.

License sales are growing thanks to the expansion and strengthening of our sales partner base. In addition, revenue related to technical support provided to partners is also increasing.

As a result, net sales rose 12.9% YoY to ¥1,953 million. As shown on the bar chart at left on the slide, revenue was on par with the fourth quarter of the previous fiscal year.

Typically, fourth-quarter revenue increases due to seasonality. Yet in this first quarter we achieved a comparable level. Specifically, revenue in the fourth quarter of FY2023 and in the first quarter of FY2024 were at similar levels, and since then we have maintained that level.

The operating profit margin came in at a very high 38.8%.

mcframe license sales for the first quarter were ¥1,421 million, up 7.7% YoY.

While the growth rate is in the single digits this quarter, note that the prior-year first quarter posted very high growth of +22.0% YoY. Without any subsequent payback, we have continued to grow steadily, and we view the current situation as healthy.

We are pursuing both growth investments and capital efficiency. Investments in SaaS business expansion and product enhancement have been increasing year by year.

In the first quarter, we optimized capital efficiency by selling a portion of strategic shareholdings. Fixed assets were ¥3.8 billion, down 7.6% from ¥4.1 billion at the end of the previous fiscal year.

Breaking this down, software assets increased by ¥80 million versus the previous fiscal year-end, while the sale of strategic shareholdings reduced investment securities. Overall fixed assets declined, but there are no issues of concern.

This concludes our first-quarter results and the revisions to the first half earnings forecast.

We have not changed our full-year earnings forecast since the May 13, 2025 announcement. Briefly:
• Net sales: ¥22.0 billion
• Operating profit: ¥5.2 billion
• Net profit: ¥3.7 billion

We are targeting orders received of ¥22.5 billion for the fiscal year.

By segment, our full-year targets are:
• Solutions Business: ¥14.0 billion (+6.5% YoY)
• Products Business: ¥7.6 billion (+7.3% YoY)
• mcframe license sales: ¥5.7 billion (+11.3% YoY)

As noted earlier, please refer to the earlier commentary for details.

Likewise, please refer to the earlier commentary for details.

Our net sales have trended upward over the past several years.

Over the past several years, both operating profit growth and the operating profit margin have continued to improve steadily.

Over the past several years, mcframe license sales have achieved double-digit growth.

Please refer to the slide for details.

From this fiscal year, we have raised our dividend payout ratio to over 50%, and therefore plan a substantial increase in dividends.

For your reference, we have attached a data book containing the information shown in the slides.

As reference IR materials, although the integrated report introduced here is from the previous fiscal year, the 2025 edition will be published shortly. In advance of that, we have published the FY2024 ESG data collection. Please take a look.

Our Investors' Guide is updated on an ongoing basis. We hope you will find it useful.

Thank you for your attention. That concludes our presentation of the results for the first quarter of FY2025.

Q: What factors contributed to the strong sales performance in the Solutions Business in Q1?

A: The strong Q1 sales performance was driven by the following factors:

• One-off additional sales from existing customers: There were two factors - first, we successfully captured additional sales by responding promptly to urgent additional support requests from existing customers. Second, there were multiple additional projects that normally arose within ongoing relatively large-scale projects. In the case of such relatively large-scale projects, there tends to be a higher likelihood of additional projects emerging.

• Recognition of delayed projects: There were unexpected project delays in Q4 of last fiscal year that shifted into Q1 of this fiscal year.

The sales composition remains largely unchanged, with SAP/ERP-related services accounting for 40-50%, and other offerings such as manufacturing management and SCM planning systems making up the remainder, showing no significant change from previous patterns.

Q: Regarding the improvement in profit margins in the Solutions Business.

A: The Solutions Business operating profit margin achieved 32.4%, exceeding our target of around 30%. This was primarily due to improved project profitability and a favorable order environment. Also, the profitability of additional projects is generally good, which also contributed to this result.

Q: What is the human resource situation in response to increased orders in the Solutions Business?

A: While we have abundant projects, our resources are approaching their limits. We have been actively recruiting both new graduates and mid-career hires for some time, and as a result, the number of employees in the Solutions Business increased last fiscal year.

Q: What is the outlook for Q2 relative to the revised first-half forecast?

A: The current business environment remains favorable, and we expect to maintain our growth trajectory in Q2 following Q1. Regarding operating profit, we have planned for additional expenses in Q2. While not anticipated at the beginning of the period, these are forward-looking investments.

Q: mcframe license sales growth appears to be slowing. What is the situation?

A: The growth rate appears lower because Q1 of the previous year was particularly strong with growth exceeding 20%. In reality, performance is progressing steadily according to plan.

Q: What is the underlying trend in the Product Business?

A: The current underlying trend is strong. There are no changes to our business strategy.

Q: What is the latest status of business expansion in the ASEAN region?

A: We are on a growth trajectory and generally progressing well. We are also continuously strengthening our personnel.

Q: Are clients taking a cautious stance on DX investments due to the impact of Trump(US) tariffs?

A: At present, we have not observed any cases where clients are becoming cautious about DX investments specifically due to Trump tariffs.