Latest financial results

In the fiscal year under review, which is the first year of the medium-term management plan "RISE TO GROWTH 2026," the Group is promoting various measures based on the seven flagship strategies. In order to increase sustainable growth potential, during the fiscal year under review, the Group has sought to expand sales and profits by proposing added value for new work styles and office spaces that implement those work styles, and by implementing sales activities with a focus on increasing value.

In line with the new medium-term management plan, we have reorganized the "IT & Sharing Business" which was previously a reportable segment, and have changed the reportable segments to two: "Workplace Business" and "Equipment & Public Works-Related Business."

Sales increased by 5,475 million yen (4.1%) from the previous fiscal year to 138,460 million yen, marking the third consecutive fiscal year of sales growth and a new record high.

• Workplace Business performed well, centered on renewal projects and office relocations to accommodate new hybrid work styles.
• In Equipment & Public Works-Related Business, demand for equipment for research facilities was favorable, but sales decreased due to a delay in the timing of sales due to high material prices for equipment for logistics facilities, as well as an expected drop in demand for equipment for public facilities, such as display cases for museums and art galleries, which had been strong in the previous period.

Compared to the previous fiscal year, profit increased by 2,960 million yen (5.7%) to 55,200 million yen.

• In Workplace Business, while anticipating the impact of rising raw material prices, profits increased due to improved profit margins resulting from increased sales and improved value provided.
• In Equipment & Public Works-Related Business, although there was an increase in revenue due to expanding demand for equipment for research facilities and strengthened sales, profits decreased due to a delay in the timing of sales of equipment for logistics facilities and an expected decrease in sales of equipment for public facilities, such as display cases for museums and art galleries.

In addition to wage increases and hiring of specialized personnel as part of human capital investment, strategic expenditures for future leaps forward, such as the strategic reopening of our showroom and head office (ITOKI DESIGN HOUSE) and strengthening our IT infrastructure to promote digital transformation, were carried out as planned, resulting in an increase of 1,405 million yen (3.2%) from the previous fiscal year to 45,123 million yen.

As a result of the above, operating income increased by 1,554 million yen (18.2%) from the previous fiscal year to 10,077 million yen, marking the fifth consecutive period of profit growth and the second consecutive period of record high profits.

• In Workplace Business, despite increased strategic expenditures such as wage increases, hiring of specialized personnel, and strengthening of IT infrastructure to promote digital transformation, profits increased due to improved profit margins resulting from increased revenue and improved value provided.
• In Equipment & Public Works-Related Business, although there was an increase in sales of equipment for research facilities and the effect of curbing selling, general and administrative expenses, profits decreased due to a delay in sales of equipment for logistics facilities and an expected decrease in sales of equipment for public facilities, such as display cases for museums and art galleries.

Due to an increase in insurance income, etc., net income increased by 143 million yen (29.7%) from the previous fiscal year to 624 million yen.

Due to an increase in interest and commission payments accompanying an increase in borrowings, net interest increased by 249 million yen (55.6%) from the previous fiscal year to 698 million yen.

As a result of the above, ordinary income increased by 1,448 million yen (16.9%) from the previous fiscal year to 10,004 million yen, marking the fifth consecutive period of profit growth and the second consecutive period of record high profits.

Due to an increase in gains on sales of fixed assets, etc., net sales increased by 992 million yen (532.3%) from the previous fiscal year to 1,178 million yen.

Due to the recording of provisions for losses related to competition laws, etc., net sales increased by 748 million yen (205.8%) from the previous fiscal year to 1,111 million yen.

As a result of the above, net income attributable to owners of parent increased by 1,277 million yen (21.6%) from the previous fiscal year to 7,183 million yen, marking the fourth consecutive fiscal year of profit growth and the third consecutive fiscal year of record high profits.

The performance by segment is as follows:

(Unit: million yen)

The business environment surrounding our company continues to be unpredictable, with rising raw materials, supplies, and parts prices, as well as logistics costs due to the 2024 logistics problem, and the continuing depreciation of the yen. On the other hand, from the perspective of securing human resources in anticipation of a decline in the working population, the state of the office has come to be seen as one of the management issues, and interest in this topic is spreading nationwide.

In this business environment, the Company has launched its medium-term management plan "RISE TO GROWTH 2026," with the first year being 2024. The theme of this medium-term management plan is "enhancing sustainable growth potential," and it sets out the key strategies "7 Flags" and ESG strategies. Various measures based on these strategies are progressing generally as planned, including their contribution to business performance.

In the outlook for the next fiscal year, in Workplace Business, we aim to further expand sales and profits by proposing new ways of working and office spaces that can implement those ways of working, and by conducting sales activities with an emphasis on increasing value. In Equipment & Public Works-Related Business, we aim to expand sales and profits by expanding products and services in research facilities, logistics facilities, etc., and by increasing the value we provide to customers. Profits gained from business growth will be used as growth strategy investments based on our medium-term management plan, and will be systematically returned to stakeholders.

Taking these factors into consideration, the consolidated financial forecast for the fiscal year ending December 2025 is as follows:

Consolidated earnings forecast for fiscal year ending December 2025

The balance of cash and cash equivalents (hereinafter referred to as "funds") at the end of this consolidated fiscal year was 21,494 million yen, a decrease of 2,170 million yen from the end of the previous consolidated fiscal year.

The status of each cash flow and its factors for the current consolidated fiscal year are as follows:

Trends in the Group's cash flow indicators are as follows:

*The ratio of cash flow to interest-bearing debt and interest coverage ratio for the fiscal year ending December 2024 are not stated because cash flow from operating activities is negative.