Slide 1: Financial Results Briefing Material for the Fiscal Year Ended February 2024
Financial Results Briefing Material for the Fiscal Year Ended February 2024 (Matters concerning business plan and growth potential) April 2024
Slide 2: Agenda
Notice:This document has been translated from the Japanese original for reference purposes. In the event of any discrepancy between this translated document and the Japanese original, the latter shall prevail. 1. Business Overview P3 2. Highlights of Consolidated Financial Results P8 3. Medium-term
Slide 3: Business Overview
Business Overview
Slide 4: What Are IT Infrastructure Services?
What Are IT Infrastructure Services? IT infrastructure services refer to designing and constructing complex IT infrastructure, including servers that operate systems, networks that connect devices to systems, and security solutions that protect secure communications and information, as well as condu
Slide 5: Business Domain / Paradigm Shift in IT Infrastructure
Business Domain / Paradigm Shift in IT Infrastructure Conventional IT infrastructure employs a simple system where IT systems are centrally managed from a data center. As IT technologies evolve, advanced technologies have been adopted in IT infrastructure, making systems more complex. Shifting to an
Slide 6: What Differentiates Us from System Developers and Facilities Contractors
What Differentiates Us from System Developers and Facilities Contractors Due to diversifying social needs, IT systems command advanced knowledge and technologies in broader and deeper areas. As the era evolves in this way, attention is being paid to IT system companies with distinctive features, not
Slide 7: Business Domains
Business Domains We are a professional operator specializing in IT infrastructure services, especially in advanced technology areas. Technology domains that are growing prominently Where the IT infrastructure services market is positioned in the IT infrastructure area In 2021, the entire Japanese IT
Slide 8: Highlights of Consolidated Financial Results
Highlights of Consolidated Financial Results
Slide 9: Executive Summary
Executive Summary FY2024 Full-year Results FY2025 Full-year Forecast(IFRS) Net sales Operating profit Net sales Operating profit 7.33 billion yen 1.57 billion yen 9.90 billion yen 2.13 billion yen (up39.8％ YoY) (up60.7％ YoY) (up35.1％ YoY) (up35.9％ YoY) ✓Since there was a margin of progress against t
Slide 10: Summary of Consolidated Financial Results
Summary of Consolidated Financial Results ✓Exceeded full-year forecasts of +30% for net sales and +30% for operating income ✓Maintain the high growth rate of this fiscal year while making upfront investments to increase the probability of growth rates in FY2025 and beyond. FY2023 full-year FY2024 fu
Slide 11: Trends in Quarterly Consolidated Net Sales
Trends in Quarterly Consolidated Net Sales (Thousands of yen) 2,000,000 1,936,957 ✓ As before, an increasingly larger proportion of sales is projected in the remaining quarters 1,903,448 1,800,000 of FY2024 for the following reasons: 1,813,779 ・The number of acceptance inspections will 1,600,000 1,6
Slide 12: Trends in Quarterly Consolidated Gross Profit
Trends in Quarterly Consolidated Gross Profit (Thousands of yen) 800,000 752,301 759451 ✓ Gross profit for Q4 FY2024 amounted to 38.8% 39.2% 38.8% 38.6% 39.3% 760 million yen. 700,000 37.2% 36.1% 35.8% 659,274 34.8% 39.5% 39.2% 34.1% 34.2% 33.0% 36.3% 600,000 31.1% 585,053 573,460 515,598 500,000 43
Slide 13: Trends in Quarterly Consolidated Operating Profit
Trends in Quarterly Consolidated Operating Profit (Thousands of yen) 500,000 25.2% 22.6% 22.3% 21.7% 21.5% 19.8% 20.3% 20.2% 480,348 450,000 19.2% 17.9% 431,290 ✓Operating profit for Q4 FY2024 amounted to 18.7% 400,000 389,667 430 million yen. 14.1% 13.3% 15.9% 350,000 335,664 10.1% 300,579 300,000
Slide 14: Status of Progress Against the Full-Year Consolidated Earnings Forecast
Status of Progress Against the Full-Year Consolidated Earnings Forecast Net sales Full-year forecast：6,820,000 thousand yen 24.6% 51.2% 79.1% 107.5% ▼ ▼ ▼ ▼ FY2024 Full-year results: (ended Feb 2024) 1Q 2Q 3Q 4Q 7,330,186 thousand yen 20.9% 45.2% 71.6% 100% ▼ ▼ ▼ ▼ FY2023 Full-year results: (ended F
Slide 15: FY2025 Full-year Earnings Forecast
FY2024 Full-year Earnings Forecast ✓ Forecasts with GAAP differences added due to the transition to IFRS. FY2024 full-year FY2025 full-year Operating profit YoY results forecast GAAP differences(approximation) (Thousands of yen) (Thousands of yen) Net sales 7,330,186 9,900,000 +35.1% FY2024 full-yea
Slide 16: Medium-Term Management Plan (Update)
Medium-Term Management Plan (Update)
Slide 17: Medium-Term Business Plan: Net Sales
Medium-Term Business Plan: Net Sales ✓ Progressing ahead of initial plan, plan to be updated by FY2027 (Millions of yen) Update 18,000 16,731 16,000 Update 14,000 12,870 Achieved better results than Earnings 12,000 the medium-term plan figure Forecast 10,000 9,900 11,200 results Before 8,000 7,330 U
Slide 18: Medium-Term Business Plan: Operating Profit
Medium-Term Business Plan: Operating Profit ✓ Progress made one year ahead of initial plan, with new plan through FY2027. ✓ Although M&A will make a limited contribution to business performance during the period of the medium-term management plan, we will continue to conduct M&A in order to achieve
Slide 19: Highlights of Non-Consolidated Financial Results
Highlights of Non-Consolidated Financial Results
Slide 20: Sales to Enterprise Clients
Sales to Enterprise Clients ✓ Both combined sales and average sales grew strongly, as selective order receptions to prioritize projects for more promising enterprise clients were smoothly conducted. ✓ Focus on increasing average sales per company and total sales percentage. Average sales per company
Slide 21: Sales in Advanced Technology Areas
Sales in Advanced Technology Areas ✓ Sales in the advanced technology areas have remained strong, and we will increase the sales ratio in these areas over the medium to long term. Sales trends Advanced technology areas in the advanced technology areas expected to have high growth potential CAGR Our
Slide 22: Development of Specialized and Highly Specialized Talent
Development of Specialized and Highly Specialized Talent ✓ Develop highly specialized talents based on our education and training systems dedicated to IT infrastructure. Specialized talent Highly specialized talent FY2021 (ended Feb 2021) 122 97 FY2022 174 109 (ended Feb 2022) FY2023 247 135 (ended
Slide 23: Illustrative Drawing of our Strategy
Illustrative Drawing of our Strategy Prepare for high growth to be achieved in FY2027 and onward. Transform sales composition Raise the sales ratio of advanced technology areas and enterprise clients Highly specialized talent Expand the talent base that will Specialized Transform talent structure ev
Slide 24: Past M&A Results and Future M&As Utilizing Treasury Shares
Past M&A Results and Future M&As Utilizing Treasury Shares Trends in net sales and operating profit of subsidiaries (total of the two companies) At the time of acquisition (full-year) FY2024 results (full-year) Net sales 613,703 thousand yen 1,339,199 thousand yen Operating profit -2,136 thousand ye
Slide 25: Our Stance for Implementing Future M&As
Our Stance for Implementing Future M&As As an acquisition scheme to deepen collaboration among the Group, we will pay part of the consideration for the acquisition of a subsidiary’s shares by using our treasury shares. By doing so, we intend to let the president of the acquired company retain part o
Slide 26: Effective Utilization of Shares
Effective Utilization of Shares Maximize the benefits of direct financing to increase corporate value ✓Acquisition of treasury stock ✓Share-based compensation Regularly grant share-based compensation to employees October 2023～January 2024, acquired treasury shares Number of treasury shares acquired
Slide 27: Matters concerning business plan and growth potential
Matters concerning business plan and growth potential
Slide 28: Company Overview
Company Overview
Slide 29: Company Overview
Company Overview Company name baudroie inc. Line of business IT infrastructure business Directors President and Chief Executive Officer Major clients SoftBank Corp. NTT Communications Corporation Shigehiro Tominaga Nippon Telegraph and Telephone East Corporation Representative Director KDDI CORPORAT
Slide 30: Management Philosophy, Mission, Origin of the Company Name
Management Philosophy As a front-runner in network infrastructure technology, we are committed to continuous technological innovation and contribute to the development of the rapidly evolving information society. Mission We support the birth and growth of new IT services from the network infrastruct
Slide 31: Management Team Profile
Management Team Profile Shigehiro Tominaga Kazuya Fujii Yoshiaki Hodoshima President and Chief Executive Officer Representative Director Director Founded the Company in 2007 while still a Joined the Company in 2007 as a founding Joined the Company in 2007 as a founding member student at Keio Univers
Slide 32: Trends in Financial Results
Trends in Financial Results ✓Achieved year-on-year growth in sales and profit for twelve consecutive fiscal years since FY2013 ended February 2013. Trends in net sales and net sales growth rate Trends in operating profit and operating profit margin Net sales growth rate Operating profit margin 1,567
Slide 33: Strengths and Features
Strengths and Features
Slide 34: Strengths and Features
Strengths and Features Specialization in the IT infrastructure area enables us to provide highly competitive services, efficiently develop talents, and establish a highly stable and recurring revenue structure. 1 Highly competitive Services 3 2 High Efficient continuity and Talent profitability deve
Slide 35: Highly Competitive Services
1 Highly Competitive Services Provide highly competitive services with advanced skills in the IT infrastructure area Develop projects laterally based on quality and past achievements Sources of added value Extend into other departments of existing clients A B Knowledge Early learning Supply capabili
Slide 36: Efficient Talent Development
2 Efficient Talent Development Established Scheme for Development Flow of Inexperienced Personnel from Early Stages into Highly Specialized Talents Inexperienced Specialized talents Highly specialized talents 3rd year of 6th to 7th year of employment employment No hiring of experienced personnel Hir
Slide 37: Achieving High Profit Margins and Growth Rates
3 Achieving High Profit Margins and Growth Rates Achieved higher profit margins and persistent growth through continuous management efforts. Operating profit margin and net sales growth rate Net sales growth rate baudroie 30% Company D Company F Company B Company H Company E Company G Company C Oper
Slide 38: Market Trends
Market Trends
Slide 39: Trends in Related Markets
Trends in Related Markets The spread of 5G and IoT technologies is expected to further drive growth in the markets for network virtualization, cloud, security, wireless connectivity, and load balancers. Innovation in communication control Increased devices and communication traffic 5G IoT SDN / NFV
Slide 40: Trends in the Domestic Network Virtualization / Cloud Market
Trends in the Domestic Network Virtualization / Cloud Market SDN and cloud markets are expected to grow strongly. Trends and forecast of the domestic market size Trends and forecast of the domestic market size for network virtualization and automation for public cloud services (billion yen) (billion
Slide 41: Market Trends for Security, Wireless, and Load Balancers
Market Trends for Security, Wireless, and Load Balancers Trends and forecast of the market size for Global market for load balancers information security products Global market for wireless connectivity CAGR: 4％ CAGR: 15％ CAGR: 13％ (billion yen) (US$ billion) (US$ billion) 600 160 10 140 500 8 120 4
Slide 42: Growth Strategy
Growth Strategy
Slide 43: Growth Strategy
Growth Strategy Capitalize on market growth in advanced technology areas as an opportunity to achieve further growth through talent development and deepening relationships with enterprise clients. Focus on advanced technology areas Growth Strengthen competitiveness Expand and deepen relationships th
Slide 44: Major KPIs
Major KPIs Focus on major KPIs to achieve profit growth Focus on advanced Expand talent development Deepen relationships 1 technology areas 2 and establish competitiveness 3 with enterprise clients Sales to enterprise clients Specialized and Sales in advanced technology areas Total amount highly spe
Slide 45: M&As
M&As Actively pursue M&As for business expansion. 1. Has made two companies 2. Conduct M&As with 3. Conduct M&As in the areas as subsidiaries. companies in the business with high affinity. domains that are near us. • Conduct M&As in the business areas • Formulate teams for technological and operatio
Slide 46: Summary of Highlights
Summary of Highlights Expand business in preparation for the planned transfer to the TSE Prime market. ✓ Raise the ratio of specialized and highly specialized talents. 01 ✓ Expand and deepen projects in advanced technology areas and for enterprise clients. ✓ Conduct M&As. 02 ✓ Maintain high growth r
Slide 47: Measures to Address Major Risks
Measures to Address Major Risks The following is a partial list of matters related to the Group's business and accounting conditions that may have a significant impact on investors' decisions. Risks Measures In order for the Group to expand its business going forward, it is essential to secure and t
Slide 48: Human Capital Management
Human Capital Management
Slide 49: Human Capital Strategy for Contributing to the Evolution of the Information Society
Human Capital Strategy for Contributing to the Evolution of the Information Society Contribute to the continuous evolution of the IT society. Business model Develop talents with the baudroie DNA Conduct a boutique business specializing in the IT systems are becoming more higher layers of the IT infr
Slide 50: Values We Provide to the Society
Values We Provide to the Society ・The information society has developed since the Web 1.0 era in the 1990s, along with the evolution of the IT infrastructure, and a variety of IT services have emerged. ・We contribute to the development of the information society by growing our business as a front-ru
Slide 51: Long-Term Outlook for Business Domains
Long-Term Outlook for Business Domains ・New services such as self-driving cars and drones have led to a surge in Internet traffic. ・In the future, the data to be handled is expected to increase explosively as it will be generated by machines rather than by humans. ・Demand will grow for IT infrastruc
Slide 52: Creation of baudroie DNA
Creation of baudroie DNA (Individual strengths + teamwork) x cultural empathy = the baudroie DNA Develop human resources with the baudroie DNA. Individual strengths Professionalism as an engineer and ambition for technical skills. Creation of specialized talents and highly Development of specialized
Slide 53: Initiatives to Develop Human Resources: Hiring
Initiatives to Develop Human Resources: Hiring Orange Recruitment Hire only new graduates and inexperienced people for the sake of shaping the corporate culture. Hire people who not only have the ability and experience but also a high affinity for the baudroie DNA. 01 Hiring criteria 03 One-week tra
Slide 54: Initiatives to Develop Human Resources: After Joining the Company
Initiatives to Develop Human Resources: After Joining the Company Orange Management Develop talents with the baudroie DNA through individually customized development plans to promote talent growth that allow them to experience their development across all aspects of the Company, and optimize resourc
Slide 55: Various Indicators Related to Human Capital
Various Indicators Related to Human Capital FY2022 FY2023 FY2023 In-house certification examinations have been newly Training hours per new employee that established starting FY2024.In addition to the college, needs up-front investment(*1) 114.5 hours 110 hours 125.7 hours encourage self-directed le
Slide 56: Appendix
Appendix
Slide 57: Trends in Financial Results
業績推移 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 10th period 11th period 12th period 13th period 14th period 15th period 16th period 17th period (Thousands of yen) Net sales 1,626,968 2,087,013 2,261,561 2,648,008 3,084,973 3,922,944 5,244,343 7,330,186 Operating profit 131,471 230,012 2
Slide 58: Achieve the Medium-Term Business Plan through Growth in Human Capital
Achieve the Medium-Term Business Plan through Growth in Human Capital Increase competitive advantage by expanding and improving team capabilities Expand projects for enterprise clients ✓ Training and other educational systems and in advanced technology areas. • Unique initiatives create ✓ Creation o
Slide 59: Steps to Human Capital Creation
Steps to Human Capital Creation Create a chain of support and acknowledgement, starting with the top management, and foster a culture that resonates with our DNA. Value generated and initiatives 2 Employees are essentially assigned to projects as a team, and organizational management skills Value ge
Slide 60: Initiatives to Develop Human Resources
Initiatives to Develop Human Resources Employees spontaneously generate various initiatives, and their value perception resonates and permeates. Regular meeting In-house cloud funding lecture by project Family Day Company Ekiden (road relay) Gorogoro Room Committe Halloween event ALOHA BBQ (for lyin
Slide 61: Seven Elements that Generate Human Capital
Seven Elements that Generate Human Capital Develop teams that can provide high value from various perspectives based on the baudroie DNA. Teamwork Strengthening teamwork through team-building training A scheme in which employees work and actively perform in teams Team Diversity work Many new graduat
Slide 62: Key Issues and Positioning of Human Capital
Key Issues and Positioning of Human Capital Identify key human capital issues from the perspective of employees, internal and external stakeholders, and ESG. Employees Internal and external stakeholders Long-term performance growth, Contribute to the development Environmental, social and governance
Slide 63: Employee Voices (1)
Employee Voices (1) Acquire the ability to take the initiative through rich experiences. Personal growth contributes to the growth of juniors, the team, and the Company, and joy resonates through continuous recognition. What was the most impressive or pleasant thing that happened to you after joinin
Slide 64: Employee Voices (2)
Employee Voices (2) What was the most impressive or pleasant thing that happened to you after joining baudroie? I was impressed by the fact that they had me involved in the planning and management of the general meeting of employees. I was engaged in the management of the "General Meeting of Employe
Slide 65: Employee Voices (3)
Employee Voices (3) Expectations of the assigned departments, presence of junior staff, step-up experience, and proactive communication A positive chain of events is created, given many factors such as the way of working that suits individual employees. In what aspects have you grown and become able
Slide 66: Employee Voices (4)
Employee Voices (4) What was the most impressive or pleasant thing that happened to you after joining baudroie? Just as I was entering my second year, a new graduate employee joined the same project. Although a year had passed since I joined the Company, I was still very inexperienced as an engineer
Slide 67: Business Diagram
Business Diagram Client Project manager (PM) Systems engineer (SE) Network Network PM Network leader Consideration Sub-leader SE member Our sales contact and Server/cloud Server/cloud Server/cloud Person bridge SE PM leader sub-leader in charge Contracting Services unit by project Network/server /cl
Slide 68: Client Structure
Client Structure Many of the clients are large businesses, and the industry composition is less biased. Percentage of sales to enterprise clients Sales composition by client’s industry *FY2024 full-year results *FY2024 full-year results 31% 45% Enterprise clients 68.8% 2% 6% 16% IT & telecommunicati
Slide 69: High Continuity and Profitability
High Continuity and Profitability Expansion into businesses that lead to highly sustainable, recurring revenue Receive orders for upstream and downstream processes by service content x time and by project, leading to businesses with recurring revenue. O peration and m aintenanc e c ontrac ts on Depl
Slide 70: Recurring Sales through Continuous Services with Retained Clients
Recurring Sales through Continuous Services with Retained Clients ✓Due to an increase in upstream projects as the ratio of specialized and highly specialized talents rose, higher growth was achieved in single-project sales than in recurring sales that earn revenue through continuous services with re
Slide 71: Definitions of Specialized and Highly Specialized Talents
Definitions of Specialized and Highly Specialized Talents Specialized talents Employees at sub-leader or higher levels in comprehensive capabilities, which are rated by class, or associate or higher levels in technical capabilities, which are rated by grade, in our personnel assessment and who are c
Slide 72: Education and Training, and Knowledge Sharing
Education and Training, and Knowledge Sharing List of training curriculum Common basis Network Server Security CCNA baudroie College .com Master CCNA College IT infrastructure basics 01. Work of infrastructure engineers 04. Network 02. Server 08. Solutions and security Knowledge sharing site 09. Inf
Slide 73: Corporate Social Responsibility
Corporate Social Responsibility We believe that developing young people who are capable of creating new IT industry areas and down-to-earth young people with advanced IT skills should lead to the development of a sustainable society. The Company not only conducts education and training for its emplo
Slide 74: Disclaimer
Disclaimer This material contains forward-looking statements.These statements are based only on information available to the Company at the time they were prepared. Moreover, such statements do not guarantee the future outcomes, and involve risks and uncertainties. Please note that actual results ma
Slide 75: baudroie inc.
baudroie inc.