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Due to growing concerns over monetary policy in Japan and the United States, as well as leadership transitions in major countries, sharp fluctuations were seen in exchange rates and financial markets, which has led to instability in corporate performance. Furthermore, rising prices and declining real wages continue to be significant issues, making productivity improvement an urgent challenge for companies in Japan. Incidents such as cyberattacks involving ransomware and system failures have occurred in quick succession, which have drawn increased attention to the impact of IT on corporate operations in Japan.
Under this business environment, the Group has launched the “Medium-Term Management Plan 2026” starting from the fiscal year under review. With consolidated net sales of 70 billion yen, a consolidated operating profit ratio of 11.5%, and a consolidated ROE of 15% set as financial KPIs for fiscal 2026, the Group aims to achieve these KPIs and its mission of “continuously growing and moving society forward together with our customers” through the implementation of seven growth strategies: (1) Establish a co-creation model, (2) Exercise quality leadership, (3) Promote human capital management, (4) Expand technological and digital solutions, (5) Promote coordination among businesses, (6) Realize digital transformation, and (7) Integrated Group management.
The Company reorganized the Solution & Service Innovation-Unit into the Regional Innovation-Unit for the purpose of promoting nearshore development at regional offices and strengthening our product development and technological capabilities. Furthermore, we reorganized the Business Enablement Service-Unit into the Digital Modernization-Unit to promote the Digital solutions business and establish an organization capable of responding to cutting-edge technologies. In addition, we established the Quality Management Office and the Project Management Office under the Quality & Process Management-Unit to strengthen quality control, while aiming to consolidate and streamline internal administrative operations by establishing the Business Support Center. Moreover, we established the Global Business & Management Office under the Strategic Business Management-Unit for the purpose of expanding into the global market.
The Company has assigned executive officers who take charge of each of the seven growth strategies, aiming to realize the strategies.
In terms of the CRESCO Group companies, effective April 1, 2024, we acquired all outstanding shares of Jet Technologies Co., Ltd., making it a subsidiary, and the company has been included in the scope of consolidation for the fiscal year under review. The company possesses specialization in the IT infrastructure field and a broad customer base, which we believe will generate significant synergy effects. Moreover, during the fiscal year under review, we reorganized our consolidated subsidiary, Japan Software Design Co., LTD., and took over operations of its Nagoya branch. The company was dissolved through an absorption-type merger with our consolidated subsidiary, Mexess Co., Ltd., effective July 1, 2024.
In June 2024, we transferred all of our shares of CRESCO Wireless, Inc. to its Representative Director. As a result, the company has been excluded from the scope of consolidation for the fiscal year under review.
Based on a resolution of the Board of Directors meeting held on May 10, 2024, the Company conducted a 2-for-1 share split of its common shares, effective July 1, 2024, to lower the unit investment amount, thereby broadening the shareholder base and increasing the market liquidity of its share.
Furthermore, based on a resolution of the Board of Directors meeting held on July 18, 2024, the Company disposed of 18,047 treasury shares as restricted shares remuneration granted to its Directors (excluding Outside Directors and Directors serving on the Audit and Supervisory Committee), employees of the Company serving as Executive Officers, and some Directors of our subsidiaries (the total disposal amount was 25,680,881 yen).
In addition, based on a resolution of the Board of Directors meeting held on November 11, 2024, the Company disposed of 24,215 treasury shares as restricted shares remuneration granted to employees of the Company (the total disposal amount was 28,985,355 yen).
In February 2025, based on a resolution of the Board of Directors, the Company cancelled 2,000,000 treasury shares it held.
In March 2025, the Company announced an upward revision of its year-end dividend forecast for the fiscal year ended March 31, 2025. In May 2025, the Company announced another upward revision, setting the year-end dividend forecast at 23 yen per share and the annual dividend forecast at 42 yen per share.
In the Digital solutions business, the Company launched new services of Creage, the comprehensive cloud computing support service, in June 2024: “Application Modernization Service,” “Creage DevOps Introduction Support Service,” which establishes a framework that enhances productivity and quality during cloud system implementation and upgrades, and “Control Tower Option,” a service designed to solve security and governance issues in AWS environments.
We also released the new version of “RooMagic,” a tool designed to optimize room assignment operations at hotels, and its implementation at Yokohama Bay Sheraton Hotel & Towers, operated by SOTETSU HOTEL Co., Ltd., has been decided.
Furthermore, in July, we established the “Generative AI Business Transformation Lab” as a virtual organization within the Group, which serves as a foundation for the appropriate use of AI technologies and for executing strategic initiatives with a view to future developments. We aim to improve both productivity and quality by continuously tracking the latest trends in AI technology and applying them to our development processes.
In October, we launched the “Generative AI Environment Setup Service,” which helps companies easily and quickly implement and utilize generative AI by building GPT environments within their cloud environments. In addition, in December, we began conducting a demonstration experiment on the “Multilingual Digital Menu,” using the “Capi Order” system from CAPICHI PTE. LTD. as part of the “Yatai DX” project, which aims to integrate yatai (food stalls) with digital technology, with the cooperation of Fukuoka-shi. In February 2025, we started offering the “AI Trend Briefing Seminar” to provide support for our customers to utilize AI. In March, we launched the “Internal DX Promotion Support Services,” which utilize generative AI.
In security-related fields, starting in November 2024, we began offering the “Compliance Support Service for Automobile Industry Cybersecurity Guidelines.”
In relation to the IT services business, we recorded a loss of 85 million yen as compensation for damages (in extraordinary losses) during the fiscal year under review.
In April 2024, CRESCO J Cube Co., Ltd. concluded a comprehensive cooperative partnership “Project Techno-Cube” with iS Technoport to revitalize market for the IBM OS “IBMi.” Furthermore, based on a resolution of the Board of Directors Meeting on September 10, 2024, the company acquired all outstanding shares of TAKAGI SYSTEM CO., LTD. (excluding treasury shares) as of October 1, making it a subsidiary.
In July 2024, CRESCO Digital Technologies Ltd. announced the launch of an implementation support service for “Prisma® Access,” a cloud-based next-generation firewall. The company also launched implementation support services for Microsoft’s virtual desktop “Azure Virtual Desktop” in November 2024 and for Fortinet’s “FortiSASE” in December 2024, and started implement support services through Cisco Systems’ “Cisco Secure Connect” in February 2025.
In October 2024, CRESCO VIETNAM CO., LTD. began offering “C-Rescue,” a new solution available on Cybozu’s “kintone,” a business management platform.
Aside from the above, in funds management, the Company recorded a gain on sale of investment securities (in extraordinary income) of 173 million yen, a gain on redemption of investment securities (in extraordinary income) of 57 million yen, and a loss on valuation of investment securities (in extraordinary losses) of 23 million yen.
With regard to the outlook for the fiscal 2025, due to shifts in the US administration’s response to the Russia-Ukraine conflict and fluctuating reciprocal tariff policies, uncertainty has increased mainly among large global companies. In particular, in Japan, there are growing concerns about negative impacts on the automotive industry, to which the Company’s major customers belong.
As a result, both the financial and foreign exchange markets have lost their sense of direction, and the ongoing labor shortage and rising cost trends, which have persisted in Japan for several years, are not expected to be resolved in the short term.
Thus, there is growing uncertainty as to whether strong capital expenditures that have driven the Japanese economy will continue. Nonetheless, we believe that DX investments to enhance productivity will continue, and expect that the Group will see steady growth in orders.
Based on the above preconditions, we will steadily execute our established growth strategies for achieving the financial targets in Medium-Term Management Plan 2026: consolidated net sales of 70.0 billion yen, consolidated operating profit ratio of 11.5%, consolidated ROE of 15% or higher, aiming to increase net sales and profitability.
If any event that should be disclosed occurs due to any revision to these prerequisites, etc., the Company will promptly announce it.
May, 2025
Hiroyuki Nemoto, Chairman & CEO
Hiroshi Tominaga, President
