We would like to express our sincere gratitude to our shareholders and investors for your continued and exceptional support.
The CRESCO Group embarked on its new five-year vision “CRESCO Ambition 2020” in April 2016, in a bid to ensure capturing business opportunities and achieve a further leap, and is striving to achieve the target of business performance, implement focus measures, and enhance the corporate value.
Under the corporate philosophy of “management in accordance with ‘CRESCO Ambition 2020,’” “steady growth based on business quality and rising productivity,” and “expansion of the size of group businesses through M&As,” we pushed forward with business operations in FY2018.
Despite the existence of numerous matters of concern including the uncertainty in the business conditions arising from the overseas situation, trends in the foreign exchange market and the stock market, and natural disasters, the business environment continued to improve on the back of, among others, recovery of personal spending and robust inbound tourism demand, and improvements in corporate earnings. Efforts to address the “fourth industrial revolution,” “work style reform,” and “labor shortage” to strengthen the competitiveness and the growth potential of enterprises are generating further demand for software and systems development that contributes to productivity improvements.
These trends bring opportunities to demonstrate the superiority of the CRESCO Group, which operates in a wide range of business fields encompassing advanced technologies such as artificial intelligence (AI), robotics, and IoT (Internet of Things) in addition to its core technologies of application development technology, IT infrastructure construction technology, and embedded technology. On the other hand, however, the shortage of engineers has been a bottleneck for business expansion in the contracted development business.
During FY2018, the Group tried to review its customer portfolio and business structure in response to changes in markets, including actions toward the winding-up and minimization of unprofitable projects, and, at the same time, devoted its efforts to cultivating new customers and developing new business and service incorporating advanced technology. In addition, the Group worked to recover business performance through active company-wide productivity improvement activities, securing development resources, raising unit order prices and selectively taking orders. The Group also strove to ensure the appropriate amount of orders commensurate with resources and to further improve customer satisfaction by enhancing collaboration among companies of the Group and reinforcing quality control.
Regarding the economic environment, although there are matters of concern, including economic friction between the U.S. and China, the issue of the UK leaving the EU and economic slowdown in China and the EU, capital expenditures, including investment in software, is expected to generally retain their momentum from last year. We predict that this will be supported by digital transformation centered on “aggressive IT management,” the Tokyo Olympic Games to be held in 2020, and inbound tourism, despite variability among our customers’ industries and business categories. On the other hand, as a consequence of the expanding demand, we continue to face a human resource shortage, so constant acquisition and development of human resources, productivity and quality improvement, and strengthening of development systems are top priorities.
“CRESCO Ambition 2020” will be in its fourth year in FY2019. The Group set the following management policies: “management in accordance with ‘CRESCO Ambition 2020,’” “qualitative growth through reinforcement of service quality,” “quantitative growth through reinforcement of resources and technological strategies,” and “increase in growth speed through M&As,” and will continue to address ongoing issues in accordance with this five-year vision.
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Issues to be Addressed |
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In order to lead the “digital transformation” and to offer speedily realistic proposals which enable customers to realize their own growth through the innovation of their business model, the CRESCO Group will reinforce its technology and quality aspects further in the software development and embedded software development businesses, which constitute the pillar of the Group’s business. At the same time, we will contribute to society by actively incorporating advanced technology and enriching services and solutions contributing to customers’ growth.
May, 2019
Toshio Iwasaki, Chairman & CEO
Hiroyuki Nemoto, President
