■Summary

1. Company Overview

Unilita (3800) develops, sells, and supports package software and data utilization solutions that perform operation management of IT systems for a wide range of industries, including finance and manufacturing. As the role of IT changes from “protection” (work efficiency improvement, cost reduction, etc.) to “attack” (a means to achieve competitive advantage in business), it has demonstrated its ability to directly solve business issues of companies working on digital transformation (DX) by utilizing strengths in the “system operation” and “data utilization” areas. Recently, under the “service shift” management policy, they have been shifting to a new service model (continuous billing type profit model that provides in-house services by utilizing the cloud) and working on social issue resolution (work style reform, regional revitalization, primary industry revitalization) business, etc. utilizing digital technology, and are proceeding with business model transformation.

A new three-year medium-term management plan was announced as of 2024/5/14. Under the basic policy of “Re.Connect 2026,” we will further evolve the three business strategies of “expansion of service provision type businesses,” “establishment of new value provision models,” and “transformation of business processes” in order to realize “to the Unilita Group that shapes empathy and creates uniqueness,” which is set forth as a vision. Furthermore, the idea is to further strengthen the sustainability foundation for sustainable growth, including the acceleration of human capital investment, and realize both economic value as a business company and social value by solving social issues through business activities utilizing the Group's management resources and IT solution capabilities.

2. Overview of financial results for the fiscal year ending March 31, 2024

As for the financial results for the fiscal year ending 2024/3, sales increased 3.7% from the previous fiscal year to 11,982 million yen, and operating profit increased 11.7% to 1,023 million yen. As for sales, the three businesses of “product services,” “cloud services,” and “professional services,” each grew. As for “product services,” the main automation/form products performed well, driven by the progress of DX and the movement to support digitalization associated with law revisions. As for “cloud services,” the main service group, centered on IT utilization clouds, grew steadily. “Professional Services” saw a significant increase in sales due to an increase in orders for high value-added projects and consolidated contracting projects (system integration) where the group was integrated. In terms of profit and loss, while strengthening investment for management infrastructure development, a significant increase in operating profit was achieved by boosting earnings due to increased sales, improving the efficiency of research and development expenses, and shifting to a high-profit model (system integration).

3. The direction of the new medium-term management plan

In the new medium-term management plan, we aim to establish a new value provision model based on the results accumulated in the previous medium-term management plan and issues clarified, after redefining core competencies into “service management” and “data management,” and based on the results accumulated in the previous medium-term management plan, and a group-integrated value provision model starting from consulting. In particular, we will continue to invest in cloud growth areas, and scale up each cloud category will be realized by promoting value co-creation, including cooperation with collaborative partners. Sales of 14 billion yen (average growth rate of 5.3% for 3 years), operating income of 1.45 billion yen (same 12.4%), and ROE of 8.8% (+1.7 pt compared to the 2024/3 fiscal year) have been set as targets for the final year, and the plan emphasizes profitability while continuing to invest in the cloud. They are also ambitious to increase dividends in line with profit growth. The idea seems to be considering M&A, which will lead to the acquisition of data management human resources and the strengthening of service lines.

4. Earnings forecast for the fiscal year ending 2025/3

As for the earnings forecast for the fiscal year ending 2025/3, which is the first year of the new medium-term management plan, sales are expected to continue to increase sales and profit, with sales up 4.3% from the previous fiscal year to 12,500 million yen, and operating income up 2.6% to 1,050 million yen. As for sales, it is planned that active business development of “cloud services” will contribute to an increase in sales as the mainframe business in “product services” follows a downward trend in sales. Also, the idea is to promote value provision that integrates accumulation of stock sales through “product services,” growth of main cloud services, and system integration and outsourcing, starting from consulting, which is strong in receiving orders. In terms of profit and loss, it is assumed that profit increases will be secured by making “cloud services” profitable and promoting high-profit models while continuing strategic investments.

■Key Points

・All businesses grew in the fiscal year ending 2024/3, achieving an increase in sales and profit (the final fiscal year target of the medium-term management plan was achieved)

・In terms of activities, there is a certain response to a shift to a high-profit model starting from service provision type businesses (forms, etc.), provision of service management platforms (LMIS, etc.), and consulting

・A new three-year medium-term management plan was announced. We aim to expand investment in cloud growth areas and establish a new value provision model that leverages our strengths in service and data management

・Sales and profit will continue to increase in the fiscal year ending 2025/3, and the annual dividend is scheduled to be 70 yen per share (2 yen increase from the previous fiscal year)

(Written by FISCO Visiting Analyst Ikuo Shibata)