To our shareholders and investors, I would like to express my sincere gratitude for your continued support of HIMACS.

Through our initiatives up to the fiscal year ended March 31, 2026, we have maintained a stable business foundation while preparing for our next stage of growth. Today, under our new Medium-Term Management Plan, “Re: Growth 2028,” we have entered the execution phase toward renewed growth.

Under this plan, we are not pursuing expansion in scale alone. Instead, we are focused on achieving balanced growth in scale, quality, and business structure. Specifically, we are working to expand direct business with end users, enhance productivity and value creation through generative AI, and redesign our talent and organizational foundations to ensure the steady execution of these initiatives.

For generative AI, one of our key priorities is to move beyond the research and validation stage and incorporate it into our development processes and business operations, thereby strengthening our competitiveness across the organization. Through these efforts, we aim to improve profit margins over the long term and enhance corporate value on a sustainable basis.

We, the management team, are responsible for steadily executing these strategies and communicating our progress and results with transparency. We hope that you will continue to assess HIMACS’s growth from a medium- to long-term perspective.

Business performance for the fiscal year

During the fiscal year under review, the Japanese economy continued to recover gradually, supported by improvements in employment and income conditions as well as a recovery in capital investment, particularly in digitalization and labor-saving initiatives. At the same time, uncertainty remained elevated due to factors such as the impact of rising prices on consumer sentiment, volatility in financial and capital markets, and growing concerns over the outlook for overseas economies. We will continue to closely monitor the potential impact of developments in the Middle East.

In the information services industry, demand for IT investment remained strong, driven by digital transformation (DX), modernization of existing systems,¹ and the digitalization of government services.

Against this backdrop, the HIMACS Group focused on expanding our core business and actively pursuing DX-related projects, the key strategies of our medium-term management plan, NEXT C4. To this end, we concentrated on expanding new end-user relationships and launching new projects with existing customers. We also began implementing AI-powered software development processes, leveraging AI to improve efficiency across activities ranging from system design and implementation to documentation.

As a result, consolidated net sales increased 0.8% year on year to ¥18,216 million.

Although we worked to improve profitability through initiatives such as pricing improvements, operating income declined 13.5% year on year to ¥1,562 million, ordinary income decreased 13.1% to ¥1,583 million, and profit attributable to owners of parent fell 11.7% to ¥1,141 million. These results primarily reflect our continued investment in human capital, including higher compensation levels, proactive recruitment activities, and higher rates paid to business partners, as well as an increase in one-time expenses associated with a business acquisition.

Net sales by service category for the fiscal year under review were as follows.

Net sales from System Solution Services, which are provided during the planning, design, and development phases of system implementation, decreased 3.3% year on year to ¥6,610 million. This was primarily due to the completion of certain projects for public-sector and distribution-sector customers, despite continued growth in projects for customers in other industries, particularly end users in the specialty trading sector.

Net sales from System Maintenance Services, which are provided after systems enter operation, increased 3.3% year on year to ¥11,606 million. Although certain projects for insurance-sector customers were completed, this was more than offset by expanded business with banking-sector customers and customers in other industries, including end users in the food manufacturing and IT services sectors.

Net sales by industry for the fiscal year under review were as follows.

Net sales by industry for the fiscal year under review were ¥2,680 million in the banking sector (down 0.3% year on year), ¥1,005 million in the securities sector (up 12.9%), ¥5,582 million in the insurance sector (down 4.3%), ¥2,646 million in the credit sector (down 1.6%), ¥1,288 million in the public sector (down 13.5%), ¥974 million in the distribution sector (down 12.4%), and ¥4,041 million in other industries (up 20.0%).

Under our dividend policy, our basic approach is to provide stable and appropriate returns to shareholders on a continuing basis. We target a consolidated dividend payout ratio of 40%.

Based on this policy, we paid an interim dividend of ¥23 per share and have resolved to submit a proposal to the 50th Annual General Meeting of Shareholders for a year-end dividend of the same amount. As a result, the annual dividend will be ¥46 per share, up ¥1 from the previous fiscal year, representing a consolidated dividend payout ratio of 45.3%.

Note 1: The replacement of existing software and hardware with modern systems and architectures.

Addressing key challenges

The business environment surrounding the HIMACS Group is undergoing a significant transformation, driven not only by growing demand for DX and advances in AI, but also by changes in cost structures and the increasing sophistication and shorter duration of projects.

Under our previous medium-term management plan, NEXT C4, we secured a solid level of business scale and profitability by leveraging our ability to provide seamless support across the entire system development process, from upstream to downstream phases, as well as our strong relationships with key customers. At the same time, we have recognized the need to transform our business structure by expanding into higher-value-added upstream and advanced technology domains.

To achieve this transformation, we have positioned our medium-term management plan, “Re: Growth 2028”, as an investment phase to drive future earnings growth. Through the twin pillars of expanding a stable earnings base and pursuing and creating new growth opportunities, we will strengthen our management foundation, transform our business structure, and establish a platform for renewed growth.

Accordingly, the HIMACS Group has identified the following as its key management priorities.

1. Expanding business scale through a stronger project pipeline and business transformation

The HIMACS Group recognizes the continued acquisition of high-value-added projects as an important priority for strengthening its customer and order base and expanding its business scale.

In addition to contract development centered on the traditional person-month model, we will continue transforming our business structure into one that generates earnings by providing added value in upstream processes and advanced domains, based on our strengths in business understanding and system development capabilities. We will also work to increase the proportion of direct transactions with end users.

In addition to strengthening our proposal development and business acquisition capabilities using AI, we will diversify our earnings structure by expanding our solutions business, combining AI and other technologies with our expertise and know-how.
Through these initiatives, we aim to shift to a higher-quality order portfolio in terms of project content, unit prices, and continuity.

As part of our growth strategy, we will leverage M&A to further expand our business domains and scale of operations.

2. Strengthening competitiveness and enhancing value creation through AI

The use of AI is no longer limited to automating routine tasks and labor-saving initiatives. In system development, the ability to understand business operations as a whole and deliver value through system design and integration is becoming increasingly important.

To date, the HIMACS Group has resolved challenges and delivered value by connecting users and system integrators, services and systems, and business operations and IT.

In the AI era, we will build on our core strengths—our ability to connect and our end-to-end capabilities—to accelerate the transition to AI-driven development.² Through this transformation, we aim to enhance our competitiveness and remain the systems integrator of choice by delivering outcomes that combine higher productivity with greater value creation for our customers.

To support this transformation, we will make planned investments to develop and expand a workforce of engineers capable of leveraging AI effectively.

3. Establishing a foundation for growth through human capital strategy

We recognize that strengthening the human capital foundation that supports our business strategy and AI utilization, and enables the effective execution of both, is essential to achieving the Group’s sustainable growth.
In addition to systematically securing talent by recruiting new graduates and experienced professionals, we regard enhancing employee engagement as a key management priority. Based on issues identified through employee satisfaction surveys, we will continuously review and refine our human resources systems and ways of working.

At the same time, we will enhance our talent portfolio in line with our business strategy and ongoing business transformation, while fostering a workplace where diverse talent can thrive on an equal footing. Through these efforts, we aim to build a human capital foundation that supports sustainable growth.

4. Strengthening Group governance and management foundations

As the composition of the Group evolves through the expansion of our business domains and M&A activity, we recognize that further strengthening Group-wide governance and management foundations is essential to ensuring the effective execution of our strategies and achieving sustainable growth.

Accordingly, we will clearly define the roles and responsibilities of each Group company and maintain an appropriate balance between delegated authority and oversight. Through these efforts, we will accelerate decision-making and enhance management effectiveness across the Group.

We will enhance our framework for continuously monitoring the execution of business strategies and investment decisions, enabling us to make timely adjustments and implement corrective measures when necessary.

We will deepen collaboration with companies that have joined the Group through M&A and improve the stability and efficiency of Group-wide operations across project management, quality management, risk management, and information security.

Note 2: A development approach that leverages AI across one or more stages of the software development process, including design, implementation, and testing.

May 2026