Message to Shareholders and Investors

JBS has been providing technical support to resolve customer issues utilizing its extensive experience and knowledge in providing Microsoft solutions. Recently, we have gone beyond our role as a simple vendor and have been increasingly involved from the planning stages in projects that are at the core of corporate transformation. We believe that these changes are the result of our transition to an integrated manufacturing and sales organization.
Up until now, we have grown by steadily responding to the requests we have received, but going forward, we will propose even more innovative systems and methods utilizing cloud utilization to help customers greatly improve the efficiency of their operations and dramatically grow their businesses. We also aim to ensure that the benefits accruing from implementing these methods are provided broadly to industry and businesses as a whole. In fact, there have been many cases in which the introduction of systems that utilize the latest cloud technologies has resolved customer issues and resulted in significant improvements. These success stories help to foster employee confidence and pride, and we believe that expanding these efforts further is the direction in which JBS should aim.

JBS is unique in that it is an independent system integrator, and we believe that this rare independent position gives us an advantage in expanding our business. Currently, many of the large companies with which JBS mainly does business have their own proprietary systems in place. However, as a result of creating unique systems, there is a shortage of engineering resources capable of handling them, and maintenance costs are also on the rise. We have heard that in some cases the maintenance of these legacy systems is what is hindering corporate transformation and new challenges.
In contrast, JBS’s strength is its ability to rapidly introduce technologies that bring innovative effects to customers’ businesses, such as significantly improving operational efficiency or launching new businesses through cloud usage. We apply global standard products using methods with proven effectiveness, so you can quickly and reliably implement these products and realize significant benefits. We believe that this unique position and method is what differentiates us from our competitors and will bring great value to our customers.
In addition, many of JBS’s major clients are Japanese companies that operate overseas, and we have established a system that allows us to provide licenses and related services globally. In Japan, there are only a limited number of system integrators capable of providing services that include customers’ overseas bases, so JBS has built a system that meets customer needs. We plan to further strengthen collaboration between our business partner Crayon, which operates in 46 countries around the world, and its US and Singapore bases, to accelerate support for our customers’ growth in global markets.
From the perspective of group management, it has been two years since Nextscape became a member of the JBS Group. In the fiscal year ending September 2024, performance was sluggish due to the impact of unprofitable projects, which resulted in the impairment of goodwill. We recognize that this was due to inadequate project progress management and governance and have already reviewed and strengthened management systems by linking them to the know-how of JBS headquarters. Going forward, we will steadily move to create the synergies that we envisioned at the time of the acquisition. In particular, Nextscape has overwhelming knowledge in areas such as mixed reality devices, video distribution, and app development. We believe that this knowledge will be a key advantage in solving the problems our customers face, and we believe that collaboration that leverages Nextscape’s characteristics will lead to growth for the entire group.
At present, we feel that JBS lacks human resources capable of providing consultation services with a deep understanding of the upstream businesses of our customers, and human resources adept at project management that drives customer businesses forward. It is necessary to improve our consulting capabilities and leadership by recruiting experienced personnel and having current members gain on-site experience together with these experienced personnel. In this way, we plan to implement reforms so that JBS can become a true partner trusted by its customers.

The JBS Group aims to achieve both “sustainability of society” and “sustainable growth of JBS,” and has identified six material issues to achieve this. With the spread of cloud solutions as a starting point, we will contribute to the realization of a sustainable society through (1) driving innovation, (2) improving security, (3) realizing diverse work styles in society, and (4) reducing environmental impact, while also working to (5) develop cloud professional talent and (6) foster a corporate culture that can make the most of diverse talent, leading to the sustainable growth of JBS.
From the perspective of human capital management, the company’s move to Toranomon Hills Station Tower in May 2024 is also a hot topic. In addition to promoting open communication between employees and creating a comfortable working environment, the new headquarters also provides a place where customers can come face-to-face with cutting-edge cloud solutions, leading to new ideas and business creation. In terms of governance, the Board of Directors holds wide-ranging discussions, including on the need for speed amid a rapidly changing cloud market environment, future strategies, and management that is conscious of capital costs. Starting in December 2024, we welcomed Yoshimi Shu as the first female Outside Director on our Board of Directors.
The proportion of female employees at JBS is increasing, to about 30%, and they are active in various fields. We hope to promote diversity in our Board of Directors as well and foster richer discussions. We look forward to hearing from Ms. Shu, not only for her comments and advice based on her experience in the financial industry and globally but also for her insights and opinions based on her unique perspective. We intend to continue to proactively communicate information, engage in dialogue with our many stakeholders, and utilize this information in our management. We sincerely ask for your continued support.

Mar. 31, 2025
President & CEO
Yukihiro Makita

Presentation Materials

Through continued business growth, we aim to achieve record highs in sales and profits in the fiscal year ending September 2025. Profits are expected to increase as the effects of increased sales in each business segment and improved profitability, including Nextscape turning a profit, will absorb the increased costs associated with expanding our workforce. To achieve this, we believe it is important to steadily advance a strategy to use the License & Products business, which accounts for 70% of JBS’s sales, as a stepping stone to develop the more profitable cloud integration and cloud service businesses, even though the profit margins tend to be low due to the nature of the resale business.
Although there are no changes to the basic strategies outlined in this medium-term management plan, in May 2024 we temporarily withdrew our profit targets for the fiscal year ending September 2025, the final year of the plan, due to a lack of precision in forecasting changes in market demand. We have reflected this point in our forecast for this fiscal year to make it a more realistic and reliable plan, and we are also working to improve the accuracy of our budget control.

Starting from this fiscal year, we have been calculating the cost of raising funds from shareholders (cost of shareholders’ equity) using the capital asset pricing model (CAPM) and estimate the cost to be in the range of 7.5% to 8.5%. In addition, as an indicator of capital return, we emphasize ROE, as many assets are shared between business segments. This fiscal year, due to the impact of extraordinary losses, ROE was 6.7%, below the cost of shareholders’ equity, and the stock price indicators were 2.6 times average PBR and 17.5 times average PER, which the Board of Directors assessed as remaining at low levels compared to other companies in the information and communications industry to which JBS belongs. However, given that our ROE for the fiscal years ending September 2022 and September 2023 was 16.0%, we recognize that although our operating profit margin appears low due to the characteristics of our business, our capital efficiency is by no means low.