zz株式会社アウトソーシング
100-0005
東京都
千代田区
丸の内1-8-3

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Greeting

Message from the CEOTo Our Shareholders and Investors

Haruhiko Doi
Representative Executive Officer, Chairman and CEO
OUTSOURCING Inc.

Allow me first to extend my heartfelt gratitude to our shareholders and investors for the continued support and understanding. Here, I would like to explain regarding the business report for the 26th fiscal year, the business forecast for the 27th fiscal year, and the newly formulated medium-term management plan.


■ Business Report for the 26th Fiscal Year Ended December 31, 2022

In the domestic and overseas manufacturing segments, production adjustments in the automotive industry continued. This was mainly due to restrictions on semiconductor supplies. In the domestic service operations segment's U.S. military facilities business, the progress of construction work was delayed, due to a delay in the procurement of materials. However, both domestic and overseas sales increased significantly in the engineering segment, due to the strong demand for engineers. In addition, the diversification of the previously conducted business portfolio and regional portfolio was successful. As a result, consolidated revenue for the 26th fiscal year increased 21.2% YoY, to a record high of ¥689.777 billion for the 13th consecutive year. Sales in all domestic and overseas business segments increased compared with the previous fiscal year.

In terms of profit, operating income fell 8.1% YoY to ¥21.987 billion due to the absence of subsidies for employment adjustments and the recording of impairment losses. However, profit before tax increased by 45.0% to ¥17.03 billion, and profit attributable to owners of the Company, and net income, increased significantly from ¥664 million in the previous fiscal year to ¥10.29 billion. Profit before tax and profit attributable to owners of the Company recorded all-time highs. The year-end dividend for shareholders was 25.00 yen per share, and the related consolidated dividend payout ratio was 30.6%. For the 6th consecutive year, the dividend payout ratio was more than 30%.

■ Forecast for the 27th Fiscal Year Ending December 31, 2023

Regarding the business environment for the 27th fiscal year, we expect the number of foreign trainees who maintain their leader position to increase. This is assuming that disruptions such as COVID-19 and supply chain stagnation including shortage of semiconductors will not expand further, and automobile production resumes, against the backdrop of deferred demand, and demand continues for electronic components and semiconductors. Regarding overseas economies, restrictions due to COVID-19 have been mostly lifted. However, the monetary tightening policy against inflation, which progressed more than in Japan, is expected to slow growth after the resumption of economic activity. Even so, we expect the economy to follow a considerable recovery trend.

In this business environment, we forecast a 11.6% YoY increase in revenue to ¥770 billion, a 38.7% increase in operating income to ¥30.5 billion, a 61.5% increase in profit before tax to ¥27.5 billion, and a 74.9% increase in profit attributable to owners of parent to ¥18 billion for the 27th fiscal year. We are confident in achieving double-digit growth in revenue and even greater profit growth. The year-end dividend forecast for shareholders is ¥43.00 per share, an increase of ¥18.00 per share.

■ New Medium-Term Management Plan “VISION 2025: Building a New Stage”

Until now, we have been developing our business under the medium-term management plan until FY2024, titled “VISION 2024: Change the GAME,” which we announced in February 2020. Since then, the business climate has changed rapidly. COVID-19 expanded, inflation progressed, due to soaring resource prices, and global monetary tightening measures were implemented in response. Therefore, we determined that the Group should focus on strengthening its management foundation. We will work on shifting away from the zero-interest rate financial strategy that we have adopted thus far, promoting improved profit margins by reinforcing global internal controls, and improving efficiency through group restructuring. In addition, we will work on the consolidation of consolidated subsidiaries and achieve organic growth through existing businesses by flexibly grasping changes in needs, post-COVID-19. Finally, we will improve SG&A efficiency by shifting to a business model that incorporates digital technologies.

Accordingly, we have rolled out our previous medium-term management plan and formulated a new one titled “VISION 2025: Building a New Stage,” with FY2025 as the final period. We aim to maximize corporate value with the current medium-term management plan. We are incorporating measures to build a new stage with our own hands, by making use of our experience, including past failures. Please click here for details.

I would like to kindly ask our shareholders and investors for the continued support as we take on this challenge. The new medium-term management plan will seek to increase corporate value, based on a robust financial position that balances offense and defense, and an internal control and governance system that enables our employees to work with peace of mind.