An active market environment contributed to sales and profit growth in Q2. We will aim for the 11th consecutive period of growth in both sales and profit by meeting the ever-growing demand for engineers from our clients, including manufacturers in industries related to automobiles and semiconductor manufacturing equipment.
Automobile-related manufacturers sped up development. Engineers were in great demand from semiconductor manufacturing equipment manufacturers. Large investments in software development continued.
During the year, automobile manufacturers further sped up their development process, as they have less than 10 years to reach the target of CO2 reduction set for 2030. Their move had a considerable effect on Artner as well. Our engineers were in greater demand than ever from our main clients, that is, automobile-related manufacturers and semiconductor manufacturing equipment manufacturers.
It is no exaggeration to say that software determines the fate of the development of electric vehicles (EVs) and hybrid vehicles (HVs), and thus the manufacturers have continued to make large investments in software development.
Unit prices of engineers and the number of operative personnel rose, and the contracting business made progress that surpassed the targets, which led to growth in both sales and profit for the 11th consecutive period.
Our financial results for Reporting Period 63 are characterized by considerably higher profitability than before. The driving force behind that was a rise in unit prices of engineers. The booming market pushed up not only the unit prices of our existing engineers, but also the unit prices of our new engineers fresh out of university or mid-career engineers on their first assignment. Furthermore, the number of operative personnel surpassed the planned figure owing to progress in assignment ahead of schedule. During Reporting Period 63, we reinforced our contracting business, with the target percentage of net sales set at 10%. The sales from the business surpassed the target to reach 11.6%. This result gave us confidence in our efforts. We believe that this success will lead to strategic goals for the new Medium-Term Business Plan.
Based on the above, for Reporting Period 63, the Company achieved net sales of ¥11,125 million (up 10.0% year on year), operating profit of ¥1,810 million (up 18.9% year on year), ordinary profit of ¥1,821 million (up 18.9% year on year), and profit of ¥1,260 million (up 19.8% year on year), which led to growth in both sales and profit for the 11th consecutive period.
It is predicted that automobile-related manufacturers will further speed up their development, and that our engineers will be in greater demand than the previous fiscal year. We will move ahead with our business to achieve growth in sales and profit for the 12th consecutive period.
In regard to the market environment for Reporting Period 64, although international situations seem to remain volatile, we expect that automobile-related manufacturers will further speed up their development and that there will be greater demand for our engineers than in the previous fiscal year. We will do the best we can for our recruitment activities in order to live up to our clients’ expectations, so that we will meet the challenge of achieving higher sales and profit for the 12th consecutive period.
Based on the above, Artner expects to achieve sales and profit growth for the full fiscal year of Reporting Period 64, with net sales of ¥11,492 million, operating profit of ¥1,838 million, ordinary profit of ¥1,838 million, and profit of ¥1,274 million.
We will continue to increase the number of engineers to raise the proportion of staff assigned to “high-end fields” and expand the ratio of contracting personnel, thereby building “a foundation for sustainable and next-generation growth” that will enable us to keep up with a changing market.
During the three years for our previous Medium-Term Business Plan, we followed the policy of “playing defense while playing offense,” with the focus on the tradable share market capitalization, which is a criterion we must meet to keep listed on the TSE Prime Market. Our new Medium-Term Business Plan that begins in 2025 has set high targets that require us to “play offense” over five years to achieve them.
To “promote strategies by segment” as a basic measure, the Plan has set the target of establishing a group of engineers that provide even higher added value. To achieve this target, we intend to raise the ratio of engineers assigned to jobs that range from the highest processes in the Wide Value Group to the High Value Group (“high-end fields” by our definition) to as high as 50%, thereby further cementing our brand value. To train our engineers to work in high-end fields, we plan to assign them to contracting projects so that they will acquire experience and improve their skills. The contracting business serves also as a place for high-end engineer training.
Next, to “promote diversity and inclusion in talent management,” the Plan has set the target of raising the ratio of contracting personnel to 30%, actively hiring workers of retirement age, women who seek to be in employment again after childbirth and childrearing, and foreign nationals, thereby boosting the number of operative personnel. Currently, the only foreign nationals we hire are international students in Japan. Yet we believe that a more solid contracting framework we plan to establish going forward will open up a greater possibility of directly hiring foreign nationals in overseas locations. In addition, as a breakdown of the 30% ratio of contracting personnel, we also aim to hire more external engineers from our partner companies and others, so that the ratio of these engineers to Artner personnel will be 1 to 1. By drawing on external talent, we will boost company-wide net sales and ensure gains in profit. Extraordinary speed is essential to find partner companies and forge strong collaborative relationships with them in order to ensure we have a talent pool. Establishing a more solid contracting framework is the key to the door to the next age that will enable us to launch new business strategies. We believe that we can reach these aggressive targets only by acting aggressively (i.e., “playing offence”).
We will achieve growth in sales and profit for the 12th consecutive period and continue to grow our net profit to distribute dividends that steadily increase year over year without any decline.
We would like to thank our shareholders and investors for their continued support. We are pleased to announce that Reporting Period 63 saw us achieve growth in sales and profit for the 11th consecutive period. We will continue to commit ourselves to implementing our Medium-Term Business Plan for the next year and thereafter as we pursue our business, aiming to achieve growth in sales and profit for the 12th consecutive period.
It is our management priority that we steadily pay dividends to our shareholders and investors. Hence, we work to decide on the payout ratio of 50% as the base. In addition, our basic approach is to continue to grow our profit, ensuring that the dividend remains at least at the same amount as the previous year and continues to increase. For Reporting Period 63, our total dividends per share will amount to ¥82.0 (payout ratio: 69.1%), consisting of an interim dividend of ¥40.0 and a year-end dividend of ¥42.0 (up ¥2.0 from the previous projection of ¥40.0). In Reporting Period 64, we plan to distribute dividends totaling ¥84.0 (payout ratio: 70.0%), consisting of an interim dividend of ¥42.0 and a year-end dividend of ¥42.0. We at Artner are grateful for your continued understanding support, and cooperation.
April 25, 2025
SEKIGUCHI Sozo
President and CEO
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