SMS (2175) investor relations material

Executive summary

• Net sales for FY03/26 reached ¥64,735 million (+6.2% YoY), driven by growth in Career and Elderly/Disability Care businesses, but results fell short of initial plans due to underperformance in Career and Overseas segments.

• Operating income was ¥6,787 million (+7.1% YoY), EBITDA ¥11,406 million (+11% YoY), and ordinary profit ¥8,721 million (+4.4% YoY).

• A ¥22,957 million impairment loss in the Overseas Business led to a net loss of ¥14,317 million for the year.

• Dividend per share increased to ¥29.5 for FY03/26, with a further rise to ¥30.5 forecast for FY03/27.

• Governance enhancements include establishing the Corporate Value Improvement Committee (CVIC) and a revamped Board structure.

Financial highlights

• Gross profit reached ¥57,132 million, up from ¥53,854 million YoY.

• Cash and cash equivalents at year-end were ¥12,547 million, down ¥2,705 million from the previous year.

• Net assets fell to ¥26,724 million from ¥47,319 million, reflecting share repurchases and impairment losses.

• Equity-to-asset ratio declined to 50.2% from 61.5%.

• Net loss: ¥14,317 million due to impairment loss.

Outlook and guidance

• FY03/27 is positioned as a foundational year with net sales guidance of ¥71,834 million (+11% YoY), EBITDA of ¥10,400 million (−9% YoY), and operating income of ¥6,801 million (+0.2% YoY).

• Strategic investments of ¥2.0 billion planned for CP recruitment, DR sales/customer success, and Kabenashi Cloud sales.

• Dividend per share projected to rise to ¥30.5 for FY03/27.