Promoted growth measures, resulting in higher sales and profit

Although social and economic activities began to normalize following the reclassification of COVID-19 to a Class 5 disease in Japan, the social and economic situation remained uncertain due to soaring resource and energy prices stemming from the weak yen and other factors, as well as concerns over the tense situation in the Middle East.

Against this backdrop, LAC Co., Ltd. (hereinafter, "LAC") worked to improve the profitability of the SI Business along with growth measures for the Security Business. In the Security Business, LAC conducted initiatives to contribute to future earnings. They included: strengthening the system for rapid response services, enabling rapid and efficient response to large-scale cases; and introducing a large-scale analysis platform that achieves high performance at low cost in operational monitoring services. In the SI Business, LAC worked on expanding system development projects to support the introduction and utilization of cloud-based services and the reskilling of highly specialized advanced IT personnel.

For the full year, sales and profits increased due to stronger product sales and diagnostic services in the Security Business, and growth in development services and other services in the SI Business. In addition, both sales and profits have met the initial forecasts. The annual dividend was determined to be 26 yen per share as planned.

New mid-term management plan (FY2024-FY2026) was established

In response to the wider and deeper penetration of digital applications and the accompanying cyber threats that are becoming more serious, in May 2024, we established a new mid-term management plan (FY2024-FY2026) with the aim of further increasing added value in the Security Business and SI Business and promoting new value creation from a medium- to long-term perspective.

Our business targets are net sales of 60 billion yen, operating income and ordinary income of 4 billion yen, and ROE of 15.0%. Regarding shareholder return, our policy is to maintain the stable dividend level with a DOE (dividend on equity ratio) of 5% as a basic index for the purpose of long-term and stable shareholding.

For the fiscal year ending March 31, 2025, the first year of the mid-term management plan, both businesses are expected to increase sales and profits due to the expansion of service-related businesses. However, operating income is expected to increase slightly due to the recording of one-time expenses associated with contract renewal, etc., at the Hirakawacho Office. The Hirakawacho Office is expected to achieve significant cost reductions in the fiscal year ending March 31, 2026, and beyond, thanks to the effect of the floor space reduction.

The annual dividend is expected to be 27 yen per share, an increase of 1 yen per share.

Going forward, we at LAC will continue heading towards sustainable growth based on our purpose, which is "building trust with reliable technologies." We would thus like to ask our shareholders and investors for their support as we pursue medium- and long-term growth.

June 2024

Itsuro Nishimoto
Representative Director, President