WingArc1st (4432) investor relations material

Financial performance and guidance

• Full-year sales and profits are expected to exceed the previous year, with earnings weighted toward the second half due to order timing shifts.

• Organic profit margins are improving, and recurring revenue, especially from cloud and subscriptions, is growing at double-digit rates.

• EBITDA margin is forecast to remain flat overall, but organic margin (excluding M&A) is set to improve.

• Both sales revenue and EBITDA are projected to surpass medium-term targets, driven by robust IT investment from large corporations.

• Dividend payout ratio remains above 50%, with dividends progressing ahead of plan.

Strategic initiatives and capital allocation

• Capital allocation focuses on M&A, shareholder returns, and strategic investments, with over ¥10 billion allocated to each of M&A and dividends during the medium-term period.

• Portfolio review and early synergy creation are prioritized to enhance profitability.

• Active market dialogue and transparent disclosure are emphasized, with over 190 investor meetings held in FY2025.

• Investment targets include companies with strengths in cloud, AI, public sector, and peripheral enterprise systems.

• Capital efficiency improvements are pursued through disciplined capital allocation and productivity gains from generative AI.

Business transformation and ESG

• Digital management platform is being reconstructed, leveraging AI to accelerate business and digitalize customer touchpoints.

• Portfolio management is strengthened to support growth and profitability across business units.

• Human capital management is a strategic focus, with investments in professional development and diversity.

• High external ESG recognition achieved, including AA MSCI rating and selection as a Health Management Stock.