Slide 1: Presentation Materials for the Earnings Briefing
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 May 7, 2025 MKSystem Corporation (stock code: 3910)
Slide 2: Table of contents
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 Table of contents 1 Group Overview and Business Activities・・・・ 2P 5 Business Topics for 2H FY3/25・・・・・・・・・・・・27P 2 Consolidated Financial Results for FY3/25・・・・8P 6 Consolidated Earnings Forecast for FY3/26・・
Slide 3: Company profile
Group Overview and Business Activities Company profile ●Company name: MKSystem Corporation ●Representative: Noboru Miyake ●Location: Osaka Head office 30F, Umeda Center Bldg., 2-4-12, Nakazaki-nishi, Kita-ku, Osaka, Japan ●Bases: Tokyo; Fukuoka; Ninohe, Iwate Prefecture; and Matsuyama ●Subsidiary:
Slide 4: Mission and vision
Group Overview and Business Activities Mission and vision MISSION VISION Management Philosophy Management Policies We provide cloud solutions that benefit you Provide comprehensive services in the field of the personnel and labor management Streamlines operations and supports the creation of added
Slide 5: Segment structure
■Group Overview and Business Activities Segment structure Divided our business into two segments: Shalom Business and CuBe Business Shalom Business ● ASP service ● System construction service Monthly system service fee and initial setup fee, etc. ● System product sale Sales of working time recording
Slide 6: Business model: Steady-revenue businesses
■Group Overview and Business Activities Business model: Steady-revenue businesses Steady revenue business that builds a solid profit base 1Q A business model based on the monthly fee-based service Additional sales Shalom generates stable income. (Set-up charges) 4Q 4Q Additional Continuing sales sal
Slide 7: Business model: Target
■Group Overview and Business Activities Business model: Target Our target extends to all companies that outsource/not outsource to labor and social security attorneys. The goal is cross-selling by increasing the use of products associated with the Shalom series. Small payrolls Medium-size payrolls L
Slide 8: Table of contents
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 Table of contents 1 Group Overview and Business Activities・・・・ 2P 5 Business Topics for 2H FY3/25・・・・・・・・・・・・27P 2 Consolidated Financial Results for FY3/25・・8P 6 Consolidated Earnings Forecast for FY3/26・・32
Slide 9: Results highlight (consolidated)
■Consolidated Financial Results for FY3/25 Results highlight (consolidated) ● Sales up 24.6% YoY to 3,290 million yen due to the release of new product Shalom FOREVER. (The fiscal year sales reached a record high) ● Shalom Business sales increased 17.1% YoY to 2,382 million yen due to the release of
Slide 10: Financial summary (consolidated)
■Consolidated Financial Results for FY3/25 Financial summary (consolidated) Sales were up 24.6% YoY to 3,290 million yen due to the release of the new product Shalom FOREVER. There was an operating loss of 23 million yen because of operating cost for the cloud services and expenses of customer suppo
Slide 11: Balance sheet (consolidated)
■Consolidated Financial Results for FY3/25 Balance sheet (consolidated) Non-current assets decreased due to the start of amortizing expenses for the development of Shalom FOREVER. Dividend payments and the loss attributable to owners of parent reduced net assets. The goal is to restore financial sou
Slide 12: Cash flows (consolidated)
■Consolidated Financial Results for FY3/25 Cash flows (consolidated) Cash flows from operating activities increased by 592 million yen to 276 million yen. Negative investing cash flow of 234 million yen mainly because of software development expenditures, resulting in free cash flow of 42 million ye
Slide 13: Net sales (consolidated)
■Consolidated Financial Results for FY3/25 Net sales (consolidated) Consolidated sales increased 24.6% YoY to 3,290 million yen. 4Q sales were also up 21.6% YoY to 1,036 million yen. 1,100 +21.6% 1,036 1,000 900 851 827 785 800 746 747 710 700 671 679 625 608 600 509 500 400 300 200 100 0 1Q 2Q 3Q 4
Slide 14: Gross profit (consolidated)
■Consolidated Financial Results for FY3/25 Gross profit (consolidated) Gross profit up 47.1% YoY Gross margin up 5.9pt YoY 450 Gross profit Gross margin 427 100.0 396 90.0 400 369 340 345 80.0 350 293 295 70.0 300 284 256 60.0 250 230 50.0 200 40.0 150 114 118 30.0 100 20.0 50 10.0 0 0.0 1Q 2Q 3Q 4Q
Slide 15: Operating profit (consolidated)
■Consolidated Financial Results for FY3/25 Operating profit (consolidated) Operating loss of 23 million yen is attributable to the need to push back measures to hold down cloud service operating expenses and other expenses due to new product release postponement. In the fourth quarter, there was a 1
Slide 16: Number of employees (consolidated)
■Consolidated Financial Results for FY3/25 Number of employees (consolidated) The recruitment of new college graduates and people with previous work experience is continuing to strengthen development and support systems. Number of employees Composition of employees 140 135 135 118 BNC Development Ma
Slide 17: Personnel and promotion expenses (consolidated)
■Consolidated Financial Results for FY3/25 Personnel and promotion expenses (consolidated) The number of employees decreased due to the ransomware incident in FY3/24. Since then, the hiring of new graduates and people with previous work experience has strengthened development and user support capabi
Slide 18: IDC and software amortization expenses (consolidated)
■Consolidated Financial Results for FY3/25 IDC and software amortization expenses (consolidated) IDC expenses remained high because of delays in new product releases and the yen’s weakness. These expenses are expected to decrease even more in FY3/26. Increase in software amortization expenses due to
Slide 19: Table of contents
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 Table of contents 1 Group Overview and Business Activities・・・・・ 2P 5 Business Topics for 2H FY3/25・・・・・・・・・・・・27P 2 Consolidated Financial Results for FY3/25・・・・8P 6 Consolidated Earnings Forecast for FY3/26・
Slide 20: Use of the Shalom series
Shalom Business Use of the Shalom series ● Introductions*1 ● IDs issued*1 ● Registered companies*1 and *2 3,216 13,769 800,000 companies IDs companies ● ARPU*3 ● ARPA*4 63,200 14,600 yen yen *1: Number of introductions, IDs issued, and companies registered in the Shalom series as of the end of Mar
Slide 21: Target markets and strategies: labor and social security attorney market
Shalom Business Target markets and strategies 1 Labor and social security attorney market End-Mar 2025 Offices using our systems*2 2,381 offices Corporate Offices Our market share 8.7% Number of clients registered in 2,913 offices Private Offices our systems 0.8 million offices 24,549 offices ●Num
Slide 22: MKSystem market share at large attorney offices
Shalom Business Target markets and strategies 2 MKSystem market share at large labor and social security attorney offices (Top 51 based on number of employees) End-Mar 2025 Using MKSystem products 25 offices Using MKSystem products 25 offices Not using MKSystem products 26 offices Not using MKSyst
Slide 23: Shalom Business: Net sales
Shalom Business Net sales Sales are recovering following the FY3/24 ransomware incident. Steady revenue (APS service) increased 21.8% and remained steady as a pct. of net sales. 700 Steady revenue Other sales*1 Steady revenue as pct. of net sales 100.0 90.0 600 90 45 43 44 81 88 29 80.0 78 63 500
Slide 24: Shalom Business: Operating profit
Shalom Business Operating profit Operating loss in the first three quarters caused by the postponement of releases of new products and delay in actions to cut cloud services expenses Operating profit in the fourth quarter because of cost reduction measures and other actions 100 73 73 51 50 21 8 15
Slide 25: Table of contents
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 Table of contents 1 Group Overview and Business Activities・・・・・ 2P 5 Business Topics for 2H FY3/25・・・・・・・・・・・・27P 2 Consolidated Financial Results for FY3/25・・・・8P 6 Consolidated Earnings Forecast for FY3/26・
Slide 26: CuBe Business: Net sales and operating profit
CuBe Business Net sales and operating profit Many orders for individually customized front-end systems, mainly for large companies and the public sector Controlling outsourcing expenses by rigorously managing the designs of systems for profitability Net sales Operating profit *After deducting amor
Slide 27: Table of contents
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 Table of contents 1 Group Overview and Business Activities・・・・・ 2P 5 Business Topics for 2H FY3/25 ・・・・・・・・・・・27P 2 Consolidated Financial Results for FY3/25・・・・8P 6 Consolidated Earnings Forecast for FY3/26・
Slide 28: Shalom House branding strategy
■ Business Topics for 2H FY3/25 Shalom House branding strategy Started Shalom House rebranding Higher customer satisfaction at client Engagement companies New brand strategy for the Shalom House network with employees of client Client company engagement companies Seamless data linkage between Shalom
Slide 29: The CLARINET web system service for client companies
■ Business Topics for 2H FY3/25 The CLARINET web system service for client companies The CLARINET web system service for client companies of labor and social security attorney offices enables Shalom House offices to provide clients with new value * CLARINET is in production and will be partially rel
Slide 30: Promotion activities 1: Labor Consultant Summit 2025
■ Business Topics for 2H FY3/25 Promotion activities 1 MKSystem Holds Labor Consultant Summit 2025 on March 11, 2025 In 2025, MKSystem held a Labor Consultant Seminar for the third consecutive year. The event, which took place in Tokyo in March, was attended by six labor and social security attorney
Slide 31: Promotion activities 2: Shalom House seminars
■ Business Topics for 2H FY3/25 Promotion activities 2/Shalom House seminars Branding strategy for Shalom House As part of the Shalom House branding strategy, labor and social security attorneys who use Shalom House are invited to give presentations at seminars to explain how their clients are curre
Slide 32: Table of contents
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 Table of contents 1 Group Overview and Business Activities・・・・・ 2P 5 Business Topics for 2H FY3/25・・・・・・・・・・・・・27P 2 Consolidated Financial Results for FY3/25・・・・8P 6 Consolidated Earnings Forecast for FY3/26
Slide 33: Financial summary (consolidated) FY3/26 forecast
Consolidated Earnings Forecast for FY3/26 Financial summary (consolidated) Forecast basically no change in sales, the result of expected steady growth of Shalom sales and an expected decline in CuBe sales following the end of a temporary increase in demand. Aiming for stable profitability by holdi
Slide 34: Dividend forecast for FY3/26
Consolidated Earnings Forecast for FY3/26 Dividend forecast for FY3/26 Our basic policy is to pay dividends while placing emphasis on the consistent distribution of earnings to shareholders. Although there was a loss in FY3/25, a dividend was paid in accordance with this earnings distribution poli
Slide 35: Table of contents
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 Table of contents 1 Group Overview and Business Activities・・・・・ 2P 5 Business Topics for 2H FY3/25 ・・・・・・・・・・・・27P 2 Consolidated Financial Results for FY3/25・・・・8P 6 Consolidated Earnings Forecast for FY3/26
Slide 36: Basic policy for upgrading security
■Measures to Upgrade Security Basic policy for upgrading security Main security initiatives of MKSystem Many activities will continue for more quality and performance improvements and upgrades No Action Description Full utilization of AWS security functions + 1 Upgrade network security Addition of m
Slide 37: Table of contents
Presentation Materials for the Earnings Briefing for the Fiscal Year Ended March 31, 2025 Table of contents 1 Group Overview and Business Activities・・・・・ 2P 5 Business Topics for 2H FY3/25・・・・・・・・・・・・27P 2 Consolidated Financial Results for FY3/25・・・・8P 6 Consolidated Earnings Forecast for FY3/26・
Slide 38: Our mainstay service (Shalom)
Service Overview Our mainstay service (Shalom) A system for labor and social security attorney offices For number one and two tasks performed solely by social security attorney offices Tasks performed by labor and social security attorneys No. 1 tasks No. 2 tasks No. 3 tasks Preparation of reports
Slide 39: Our mainstay service (Shalom Company Edition)
Service Overview Our mainstay service (Shalom Company Edition) A version of Shalom for companies that is fully compatible with making e-applications mandatory at large companies Allows performing internally all application procedures for unemployment and social security insurance Shalom Personnel
Slide 40: Our mainstay service (MYNABOX)
Service Overview Our mainstay service (MYNABOX) A personal ID number management system that can be used with Shalom Links with a variety of procedures and a use history and other capabilities MYNABOX CL Flowchart Tax office MYNABOX Flowchart (MYNABOX for Clients) Labor and social Business operator
Slide 41: Our mainstay service (Net de Komon)
Service Overview Our mainstay service (Net de Komon) A web application for use with Shalom Use with master data recorded in Shalom Net de Komon One step payroll calculation by Can be accessed anywhere linking with work attendance and anytime (Smartphone Concerned about erroneous Can process with c
Slide 42: Our mainstay service (DirectHR)
Service Overview Our mainstay service (DirectHR) Centralized management using the cloud for all applications submitted by employees during their entire time at the company, including for events like childbirth. Smartphones and PCs can be used for applications. Handles everything from data input to
Slide 43: Our mainstay service (eNEN)
Service Overview Our mainstay service (eNEN) Fully supporting year-end tax adjustment operations by reducing tax filling input and implementing progress management function 1. It makes the operation easy to understand! Enhanced control with authority settings The screen guides you “what to do,” “w
Slide 44: Our mainstay service (Cloud Pocket)
Service Overview Our mainstay service (Cloud Pocket) For the safe and easy distribution and receipt of official documents. Greatly simplifies the distribution of job separation forms, benefit receipt qualification confirmation notices, workplace accident forms and other official forms as well as i
Slide 45: Our mainstay service (CuBe Business semi-customized services)
Service Overview Our mainstay service (Contracted development type semi-customized services / CuBe Business) Business process design + semi-customized system development Accurate and flexible like the one for custom-built houses Used by half a million major company employees. Your IT partner for t
Slide 46: Our mainstay service (GooooN / CuBe Business)
Service Overview Our mainstay service (GooooN / CuBe Business) A cloud service for personal job performance evaluation system that supports job performance management of half million employees at major companies GooooN coordinates three business operations, deepens communication with employees, an
Slide 47: Forward-looking statements notice
The plans, estimates and other forward-looking statements contained in this material are forecast based on information available at the time this material was prepared, and these statements include risk and uncertainty. Actual performance may differ from these statements due to changes in business e