4345.T

• Core Business Context & Company Strengths
  • The company focuses on supporting construction companies and construction sites across Japan, addressing industry challenges including labor shortages from aging demographics, overtime work regulations (the 2024 Problem), and difficulty building productive work environments across variable short-term project sites. Core strengths include construction industry specialized ICT support, rental-based service delivery, and a nationwide 31-location network with centralized equipment management that enables consistent on-site support.
  • The company achieved 16 consecutive years of revenue growth and 14 consecutive years of profit growth, with all-time record full-year results. Full-year 2025 March fiscal year revenue was 11.821 billion yen (98.5% of plan), operating profit was 3.077 billion yen (102.6% of plan, first time exceeding 3 billion yen), recurring profit was 3.162 billion yen (107.2% of plan), and net income attributable to parent shareholders was 2.19 billion yen (110.6% of plan), with all profit metrics meeting or exceeding plan.
• Core Product Developments
  • The サイトアシストパッケージ (Site Assist Package) is the company's flagship integrated offering for construction sites, combining three core elements: a customizable, shareable Site Assist Dashboard that unifies all on-site data, construction-specialized on-site content services (including Fileforce for Construction cloud storage, CAMSTREAMER Cloud video, PictureMaker time-lapse recording, and D.E.IoT SmartHub IoT connectivity), and supporting multi-functional hardware. It enables efficient remote on-site support, streamlined information sharing, and improved productivity aligned with the industry's i-Construction 2.0 initiative.
  • The company has expanded cloud-based surveillance camera services for the public sector (government agencies): cumulative deliveries exceed 1,000 units with over 500 subscription licenses, with use cases expanding from river monitoring to road management, tourism, and disaster response, and growing adoption of rental models for temporary use.
• Strategic Transformation & Mid-term Plan
  • The company is executing a major business transformation: shifting from a "hardware-focused IT infrastructure rental company" to a "specialized construction ICT company that provides integrated data and information services to support on-site construction operations." Growth is focused on expanding the Site Assist Package to 2,600 regional general contractors nationwide (1,200 of which are existing clients), with tiered sales: senior sales leadership targets C-level contacts, branch sales targets on-site managers, and marketing/inside sales/customer success functions are strengthened, with outsourcing used for small client outreach to improve efficiency. Customer success efforts have resulted in zero terminations for B2B cloud service contracts to date.
  • The go-to-market strategy prioritizes building a customer base through DDS first, then cross-selling SMS and other services, with SMS differentiated through top-tier equipment management and after-sales support that sets it apart from undifferentiated hardware competitors.
• Corporate Governance Update
  • The company plans to transition from a corporate with a board of auditors to a company with an audit and supervisory committee, pending shareholder approval in June 2025. The change is designed to strengthen governance and speed up decision making: the new board will have 1 internal executive director and 5 external directors (all audit and supervisory committee members), with expanded authority delegated to internal management for faster execution while strengthening independent governance oversight.

• For the 2026 March fiscal year, the company guides full-year revenue of 12.8 billion yen (up 8.3% year-over-year), operating profit of 3.3 billion yen (up 7.2% year-over-year), with an operating margin of 25.8% (down 0.2 percentage points year-over-year). It targets 17th consecutive revenue growth and 15th consecutive profit growth.
• The company maintains a progressive dividend policy, guiding a full-year dividend of 28 yen per share, a 3 yen increase year-over-year, marking 14 consecutive years of dividend increases.
• The mid-term management target was revised to: revenue of 12.8 billion yen, operating profit of 3.3 billion yen, operating margin above 25%, ROE above 20%, and repeat rate above 90%.
• The company's top 2026 priority is to successfully launch the Site Assist Package business (described as getting the front wheel of the business off the runway), to position the company for long-term sustained growth in the expanding construction DX market, shifting the company's positioning from a rental supplier to an information infrastructure partner.
• The company expects to actively invest in organizational capacity (salary reform starting June 2025 to reduce turnover and support hiring, improved workplace benefits, and content development for the Site Assist Package, including active capital alliances and co-development with partners.)

1. Digital Data Service (DDS) Segment: Revenue reached 6.896 billion yen, up 8.6% year-over-year. Operating profit hit 2.144 billion yen, up 9.7% year-over-year. Operating margin was 31.1%, an increase of 0.3 percentage points year-over-year. This is the 16th consecutive year of revenue growth and 11th consecutive year of profit growth, both hitting record highs. It contributes approximately 58% of total company revenue. 2. Survey and Measurement System (SMS) Segment: Revenue was 3.506 billion yen, up 7.4% year-over-year. Operating profit was 0.655 billion yen, up 11.8% year-over-year. Operating margin was 18.7%, an increase of 0.7 percentage points year-over-year. It contributes approximately 30% of total company revenue. 3. Other Segments: Revenue is roughly half the size of SMS, contributing approximately 12% of total company revenue, with performance remaining broadly flat year-over-year.

• The 2025 March fiscal year repeat rate fell 0.6 percentage points to 70.1%, driven by slower public construction project activity that reduced repeat usage.
• The company's strategic business transformation requires upfront investment in people, systems, and content development, which temporarily pressures operating margin in the near term as the business scales the new service model.
• Full penetration of the integrated Site Assist Package is at an early stage, with only a small share of current clients using the full integrated offering, requiring targeted sales expansion to hit long-term targets.

Q: What are the current revenue shares of Site Assist Package and public sector government services within DDS, and how will these shares change going forward? / A: Site Assist Package is not a single standalone product, but an integrated offering that combines multiple cloud and hardware services to unify on-site data and workflows. Currently, only a small share of clients use the full integrated offering, so a discrete revenue share cannot be reported. Cloud storage services that are part of the package already have over 45,000 registered users, but the company's long-term goal is to increase adoption of fully integrated usage across entire construction firms, which is why it targets 2,600 regional general contractors. Public sector government services currently account for only a low single-digit percentage of total revenue.

Q: [Mid-term objective priority question, extracted from agenda] / A: [Answer not fully captured in available transcript; core priority is scaling integrated adoption of Site Assist Package to complete the company's business transformation.]

Q: [Dividend policy question, extracted from agenda] / A: [Company maintains progressive dividend policy, confirmed in guidance with 14th consecutive increase planned for next fiscal year.]

Q: What factors are keeping operating profit margin relatively flat, and what is the outlook for improvement? / A: [Margin is temporarily pressured by upfront investment in sales, content development, and organizational restructuring to support the business transformation; margin expansion is expected once the new service model scales.]