We would like to express our deepest gratitude to our shareholders and investors for your constant support and patronage.
The CRESCO Group started to work on the ten-year long-term Group vision “CRESCO Group Ambition 2030” on April 1, 2021. As medium-term management plans for realizing the said vision, the Group established the three-step plans: Medium-Term Management Plan 2023 (2021-2023), Medium-Term Management Plan 2026 (2024-2026) and Medium-Term Management Plan 2030 (2027-2030). The Medium-Term Management Plan 2023, step 1 plan, targets “50 billion yen consolidated net sales,” “5 billion yen consolidated operating profit” and “15% or greater ROE.”
While there has been progress in normalization from restrictions under the scourge of COVID-19 in the current fiscal year, price hikes arising from the Russian-Ukrainian conflict and monetary and fiscal policies of various countries in response have increased uncertainty in the financial markets. As a result, an extremely significant impact has been made on household consumption and corporate investment.
Although actions such as scrutinizing, postponing, or downscaling IT investment are observed with some of the CRESCO Group’s client companies, demand remains robust for IT investment for the renovation of existing systems and productivity improvement through DX promotion, allowing the Group to achieve steady order increase.
Under this business environment, the Group has implemented the following initiatives during the current fiscal year.
As of April 1, 2022, CRESCO made a shift to a two-representative system with Chairman & CEO and President and Executive Officer, as well as implemented a design change in our corporate logo for the first time since our founding, along with the formulation of “CRESCO Group Ambition 2030.”
In addition, we have established the Promotion of Management Strategy-Unit to realize “CRESCO Group Ambition 2030,” and we have set up the Group Supervisory-Unit and promoted the sharing of business projects among group companies to further demonstrate group synergy.
Moreover, in order to speed up management decision making and implementation of measures through appropriate delegation of authority, we have carried out an organizational reform to appoint executive officers as general managers.
The CRESCO Group has increased the frequency of the meetings of officers of the Group companies to enhance collaboration among the Group’s officers for the purpose of strengthening agile management and improving group governance.
In addition, as of July 1, 2022, three consolidated subsidiaries (ARS Corporation Ltd., N-System Corporation, and Nexus Corporation) were merged and reorganized as CRESCO J CUBE CO., LTD., for the purpose of producing further synergistic effects through the effective utilization of the Group’s human and management resources.
In February 2023, we acquired all issued shares of Japan Software Design Co., Ltd., a software development company with offices in the three major metropolitan areas (Osaka, Tokyo, and Nagoya), and made it our consolidated subsidiary (the deemed acquisition date: the end of March 2023).
CRESCO was certified as a UiPath’s Gold Partner, an accredited reseller of UiPath, in April 2022, and, in May 2022, began to offer e-learning for companies that have purchased UiPath licenses. In March 2023, CRESCO was certified as UiPath’s Diamond Partner.
In October 2022, CRESCO was certified under the AWS Public Sector Partner Program and recognized as an AWS Public Sector Solution Provider by Amazon Web Services (AWS). We also launched our DX Training Service to develop DX human resources among corporates and released an iOS app for Intelligent Folder, a large-capacity file-sharing service we offer.
We will continue to strengthen the digital solutions business by expanding the business lineup in the areas of RPA, the cloud, and DX.
As enhancement of countermeasures against cyberattacks has become a priority issue among companies in recent years, in August 2022, we started selling Managed Security Services for SIEM, a service to detect and analyze signs of a cyberattack as well as provide expert countermeasure support on the basis of obtained information, which have already received a lot of positive feedback.
Furthermore, in March 2023, we began offering Managed Security Service for EDR, a solution that monitors devices to minimize damage from cyberattacks.
In the fields of image recognition AI and machine learning, which are our specialties, we obtained a patent in September 2022 for an information processing device, method, and program to visualize the basis of image classification results using image recognition AI.
In December, we announced a collaboration project with Japan Airlines Co., Ltd. to develop an Aircraft Engine Internal Inspection Tool utilizing image recognition technology empowered by medical AI.
In February 2023, in collaboration with JR KYUSHU HOTELS Inc., we conducted a demonstration experiment on the optimization of hotel room allocation using a mathematical optimization method, and developed a prototype for a room allocation optimization tool.
We will continue to work on DX promotion for our customers based on the knowledge and technology we have acquired, contributing to the development of society.
In the field of capital and business alliances, in November 2022, we entered into a basic agreement on capital investment in an Indian subsidiary of Forum Engineering Inc. for the purpose of the global expansion of Cognavi, a human resource service specializing in engineers.
With the aim of further raising the performance level of the aforementioned business and creating business opportunities, we have been encouraging our employees to do self-study about technology, quality, and business transformation starting the current fiscal year.
We have also continued to engage in evangelist activities, being blessed with opportunities for several of our employees to teach at universities.
In May 2022, CRESCO Digital Technologies, Ltd., one of our consolidated subsidiaries, started selling Social Toilet System empowered by the company’s IoT functions that had been developed jointly with Hikari Gokin Co., LTD.
In July, CRESCO e-Solution Co., Ltd. renewed the content of MOA, a service for transitioning to SAP S/4HANA.
In October, CRESCO VIETNAM CO., LTD. began selling the latest POS system for the Vietnamese food delivery market.
In the wake of the COVID-19 crisis, the CRESCO Group has been reviewing office space, including the relocation of offices and development sites for further improvement of business efficiency.
Due to the recent rapid progress in information technology, our business environment is undergoing an increasingly significant change, as investment strategies of our customers, no matter how large or small, are geared toward digital transformation (DX), aiming at creating new business value, strengthening competitiveness, and realizing innovation. We expect that our industry will be in a new era of DX competition, in which companies will aim at establishing sustainable digital businesses.
We want to create a richer, more exciting future of “beyond” that exceeds the imagination of people around the world.
The CRESCO Group will join forces to promote its IT services and digital solutions business based on the wealth of experience and knowledge it has accumulated over many years of system development, thereby contributing to the sustainable growth of customers and society and striving to become a true leading company in the industry.
We look forward to your continued support in the future.
May, 2023
Hiroyuki Nemoto, Chairman & CEO
Hiroshi Tominaga, President
