NSD : Interim Review on Medium-Term Management Plan 824KB

May 9, 2023

Interim Review on

Medium-Term Management Plan

(from FY2021 to FY2025)

Created on May 10, 2021

Revised on May 9, 2022

Revised on May 9, 2023

Copyright 2023 NSD CO., LTD.

Introduction

Thank you for reading this material, which presents an interim review of our five-year-long Medium- term Management Plan, which began in the fiscal year ended March 31, 2022, together with a partial revision to its targets.

In the past two years under the Medium-term Management Plan, our existing businesses grew steadily and we expanded the business foundations of the NSD Group by means of M&A. As a result, we are developing a solid footing for evolving into a corporate group generating more than 100 billion yen in net sales. Going forward, we will accelerate efforts to adapt to a digital society in the fields of new technology, digital transformation, and solutions, thereby continuously working to transform into a more value-added company.

In parallel, we will work on management that will help realize a sustainable society. We will thus aim to be a company that proposes the future of people and IT. We hope to continue receiving your unwavering support.

May 9, 2023

NSD Co., Ltd.

President & CEO Yoshikazu Imajo

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Progress of Individual Strategies under the Medium-Term Management Plan (Interim Review)

System development

• We focused IT investment demand of financial, manufacturing and other customers to receive more orders.
• In the areas of new technology and DX, system development projects doubled, led by projects related to digitalization.
• To secure the human resources needed to drive our growth, we stepped up recruitment, increased base pay, promoted work style reform, expanded regional locations (See page 4), built closer relationships with business partners and bolstered our deployment capacity.

New technology and DX

• We launched the Advanced Technology Strategic Business Unit. Under this unit, the Advanced Solution Planning Department and the DX Consulting Department were created.
• We upgraded the personnel development incentive program. The number of personnel holding qualifications for artificial intelligence (AI) and cloud doubled.
• We stepped up AI and Internet of Things (IoT) product development (for positional information solutions, image analysis, voice recognition and others) and expanded sales foundations to speed up the growth of our business.

Solution business

• We continued our efforts to promote healthcare-related products, including CAReNA and Gluketto, and human resources-related products, such as ORDIA and JobSuite.
• We invested in M&A, which we expect to expand the solution business in the areas of medical treatment and healthcare.
  (See page 5.)
• We will continue working to expand and accelerate our business through investment in M&A and other means, seeking to create a second pillar of the business.

SDGs / ESG (environment, society and governance)

• We launched the Sustainability Management Committee chaired by the President and CEO.
• This committee played a central role in developing an action policy, a sustainability declaration, material issues, measures and key performance indicators (KPIs).
• We created and published an integrated report. We will work intensively to improve outsiders' evaluation.
  (See page 6.)

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Consolidated Targets in Medium-Term Management Plan (Upward Revision)

• In view of results for the first two years of the plan, we revised the targets for the third and later years and added EBITDA as a new indicator.
• We will strive to meet the initial target of 100 billion yen in net sales for the final fiscal year as well as other targets.

(million yen)

Net sales

New core business net sales

(Note 1)

Operating income

Operating income margin (%)

EBITDA

EBITDA margin (%)

Ordinary income

Net income

ROE (%)

(First fiscal year)	(2nd year)
2022/3	2023/3
Results	Results
71,188	77,982
23,537	28,411
11,414	12,524

16.0 16.1

12,156 13,351

17.1 17.1

11,654 12,662

7,823 (Note 2) 10,219

15.7 19.3

(3rd year)	(4th year)	(Final fiscal year)
2024/3	2025/3	2026/3
Revised plan	Plan	Plan
97,000	103,000	110,000
37,500	43,000	50,000
14,000	15,000	16,500
14.4	14.6	15.0
16,600	17,700	19,200
17.1	17.2	17.5
14,000	15,000	16,500
8,700	9,500	10,500
15.4	15.9	16.6

(For reference)

2026/3

Previous plan

100,000

45,000

15,000

15.0

--

--

15,000

10,200

16.5

(Note 1) System Development Business related to New Technologies and DX, and Solution Business.

(Note 2) A gain on the sale of shares of 2,150 million yen was posted as extraordinary income.

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[Reference] Launch of Regional Business Sites

• Considering that it is essential for our growth to secure the human resources, NSD works to increase employees' job satisfaction and enhance personnel development.
• As one of measures for this, we launched regional business sites. We will actively employ competent IT engineers who wish to stay in their regions, to enhance the composition of individual business sites.

FY2023/3

August 2022: Our first regional business site is set up in the city of Sendai.

Name:	Sendai Business Site
Location:	Floor 22, AER, 1-3-1 Chuo, Aoba-ku,Sendai-shi, Miyagi, Japan
Business:	System development

* An external view of the building in which the Sendai Business Site is located

December 2022:Our second regional business site is launched in the city of Hiroshima.

Name:	Hiroshima Business Site
Location:	Floor 10, Hiroshima Train Vert Building, 1-2-22 Kamiyacho, Naka-ku,
	Hiroshima-shi, Hiroshima, Japan

Business: System development

* An external view of the building in which the Hiroshima Business Site is located

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