UCHIDA YOKO (8057) FY2026 Q2 Earnings Report

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Executive Summary

The Company achieved higher revenue and earnings, with operating leverage taking effect, driven by substantial revenue growth centered on the Public Sector Business. Revenue was ¥174.08B (+42.9% year on year), Operating Income was ¥5.48B (+51.5%), Ordinary Income was ¥6.05B (+48.9%), and Net Income was ¥4.90B (+78.4%). The primary reason for Net Income growth exceeding Operating Income growth was the one-time recognition of a ¥1.06B gain on the sale of investment securities. Recurring earnings power should therefore be assessed based on the growth in Operating Income and Ordinary Income.

Factors Affecting Performance

【Revenue】Revenue of ¥174.08B (+42.9% year on year) was driven by the rapid expansion of the Public Sector Business. The Public Sector Business grew to ¥75.71B (+111.0%, 43.5% of total revenue), becoming the largest segment, followed by the Information Systems Business at ¥71.62B (+22.6%, 41.1% of total revenue). Meanwhile, the Office Solutions Business was the only segment to report a decline in revenue, at ¥26.61B (▲3.1%, 15.3% of total revenue).

【Profit and Loss】Operating Income was ¥5.48B (+51.5%), growing faster than revenue and improving the Operating Margin to 3.1% (3.0% in the previous year). The primary drivers of the improvement were higher profitability in the Public Sector Business (3.9%→4.4%) and its increased revenue mix. Profitability deteriorated in the Office Solutions Business (Operating Margin 1.7%→1.2%) and the Information Systems Business (Operating Margin 2.8%→2.6%). Ordinary Income was ¥6.05B (+48.9%), while the ¥7.11B in Profit Before Tax benefited from a ¥1.06B gain on the sale of investment securities, resulting in Net Income of ¥4.90B (+78.4%). In conclusion, the Company achieved higher revenue and earnings, but the underlying improvement in profit margins was largely attributable to a shift in the revenue mix toward the Public Sector Business.

Segment Analysis

The Public Sector Business became the core business, generating revenue of ¥75.71B (+111.0%) and Operating Income of ¥3.30B (+138.3%), accounting for approximately 60% of the Company-wide Operating Income of ¥5.48B. The Information Systems Business generated revenue of ¥71.62B (+22.6%) but Operating Income of only ¥1.83B (+13.3%), indicating sluggish profit growth relative to revenue growth. The Office Solutions Business reported lower revenue and earnings, with revenue of ¥26.61B (▲3.1%) and Operating Income of ¥0.32B (▲33.5%), representing the only negative growth among the Company’s businesses. The gap in growth and profitability between segments is widening, and the increasing reliance on the Public Sector Business should be monitored as a potential source of future volatility.

Key Financial Indicators

【Profitability】The Operating Margin of 3.1% (3.0% in the previous year) and Net Profit Margin of 2.8% (2.3% in the previous year) improved year on year, but the low Gross Margin of 15.1% remains a constraint on profitability improvement. ROE was 6.6%, comprising a Net Profit Margin of 2.8%, Total Asset Turnover of 0.83x, and Financial Leverage of 2.83x.【Cash Flow Quality】Operating Cash Flow (OCF) was ¥13.19B, or 2.69 times Net Income of ¥4.90B, indicating strong cash backing for earnings. However, the ¥33.85B increase in accounts payable and other liabilities contributed to this increase, and sustainability will depend on the reversal of working capital trends.【Investment Efficiency】Capital expenditures of ¥0.50B were only approximately 0.48 times depreciation and amortization of ¥1.04B, indicating that the investment level was below the depreciation burden.【Financial Soundness】The Equity Ratio was 35.3%. Cash and deposits of ¥37.57B substantially exceeded interest-bearing debt of ¥3.39B, indicating a conservative financial base.

Cash Flow Analysis

Operating Cash Flow (OCF) was ¥13.19B, a substantial increase from the previous year’s ▲¥0.46B, and represented a high cash conversion ratio of 2.69 times Net Income. The increase was primarily attributable to a ¥33.85B increase in trade payables, which more than offset the working capital funding requirements associated with increases in inventories of ¥15.10B and accounts receivable of ¥4.64B. Investing Cash Flow was positive at ¥0.17B, as proceeds from the sale of investment securities and other items exceeded capital expenditures of ¥0.50B. Financing Cash Flow was negative at ¥1.77B due to dividend payments and other items. Free Cash Flow was substantial at ¥13.36B, securing funding capacity for near-term shareholder returns and investment. However, the increase in OCF led by trade payables contains a risk of reversal at the fiscal year-end, which warrants attention.

Earnings Quality

Profit Before Tax of ¥7.11B included a ¥1.06B gain on the sale of investment securities, meaning that approximately 14.9% of Profit Before Tax was attributable to a one-time factor. Non-operating income was ¥0.65B, primarily comprising dividend income of ¥0.33B, and substantially exceeded non-operating expenses of ¥0.08B, including interest expenses of ¥0.04B, indicating a stable non-operating income structure. Net Income of ¥4.90B was strongly supported by cash generation in light of OCF of ¥13.19B, indicating a small accrual—the divergence between accrual-based and cash-based accounting. However, the high year-on-year Net Income growth rate of +78.4% exceeded recurring earnings growth reflected in Operating Income of +51.5% and Ordinary Income of +48.9%, due to the inclusion of the one-time gain. It is therefore appropriate to assess underlying earnings growth based on Operating Income and Ordinary Income.

Earnings Forecast and Guidance

The full-year Company forecast calls for Revenue of ¥418.00B (+24.0% year on year), Operating Income of ¥15.40B (+26.5%), and Ordinary Income of ¥16.30B (+24.2%). Based on first-half results, progress rates were 41.6% for Revenue, 35.6% for Operating Income, and 37.1% for Ordinary Income, all below the standard first-half progress rate of 50% when seasonality is taken into account. In particular, progress for Operating Income and Ordinary Income lagged by more than 10pt, requiring the Company to build Operating Income of ¥9.92B in the second half, approximately 1.8 times the first-half result. No revisions to the earnings forecast had been made as of this quarter, although the dividend forecast had been revised to reflect the stock split. In the second half, the timing of Public Sector Business project bookings and the reproducibility of profitability will be key to achieving the plan.

Shareholder Returns

The full-year dividend forecast per share is ¥66.00 after taking the stock split into account (¥330.00 at fiscal year-end before taking the stock split into account), and the dividend forecast was revised during the quarter. Based on the average number of shares outstanding during the period of 49.30 million shares, total annual dividends are estimated at approximately ¥3.25B, implying a Payout Ratio of approximately 30.1% against the full-year Net Income forecast of ¥10.80B. First-half Free Cash Flow of ¥13.36B was approximately 4.1 times estimated total annual dividends, indicating that dividends are supported by ample funding capacity from both earnings and cash flow. A stock split at a ratio of 1 share for 5 shares was implemented, effective January 21, 2026.

Risk Factors

1. Concentrated reliance on the Public Sector Business: The Public Sector Business accounts for approximately 60% of Company-wide Operating Income, generating Operating Income of ¥3.30B compared with total Company-wide Operating Income of ¥5.48B. Its revenue and profit growth rates (+111.0% and +138.3%, respectively) are extremely high, creating a structure in which fluctuations in project booking timing and budget execution could have a significant impact on Company-wide performance.

2. Low gross margin and low Operating Margin structure: The Gross Margin of 15.1% and Operating Margin of 3.1% both remain low. The Office Solutions Business reported lower revenue and earnings (Revenue ▲3.1%, Income ▲33.5%), while the Information Systems Business also experienced a decline in profitability despite revenue growth (2.8%→2.6%). Improving profitability outside the Public Sector Business remains a challenge.

3. High reliance on the second half for full-year plan achievement: First-half progress rates were 35.6% for Operating Income and 37.1% for Ordinary Income, below the standard 50% progress rate. The required Operating Income build in the second half amounts to approximately 1.8 times the first-half result, making second-half project bookings and maintenance of profitability prerequisites for achieving the plan.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (trading)

Profitability and Returns

The Net Profit Margin is 4.2pt below the industry median, indicating that the low-gross-margin structure results in relatively low profitability within the industry.

Growth and Capital Efficiency

The Revenue Growth Rate significantly exceeds the industry median, with the rapid expansion of the Public Sector Business representing an exceptional growth driver within the industry.

※Source: Compiled by the Company

Key Takeaways from the Results

1. The higher revenue and earnings were largely attributable to a shift in the revenue mix toward the Public Sector Business. Its improved profitability (3.9%→4.4%) and increased revenue mix drove the improvement in the Company-wide Operating Margin (3.0%→3.1%).

2. Net Income growth of +78.4% exceeded Operating Income growth of +51.5%, because it included the one-time gain of ¥1.06B on the sale of investment securities. Operating Income and Ordinary Income progress should therefore be emphasized when evaluating recurring earnings power.

3. First-half Operating Income progress of 35.6% was below the standard 50%, making the booking status of Public Sector Business projects in the second half and profitability trends in the other segments key to achieving the full-year plan.

Theoretical Share Price (Reference Value)

Sensitivity: ¥1,692–¥1,792 for a ±1% change in the Cost of Equity, and ¥1,735–¥1,750 for a ±0.1 change in ω.

Notes:

• Net assets as of the quarter-end are used (there is a timing difference relative to the full-year forecast).
• As net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Calculation model: Residual Income Model (Ohlson-type, explicit five-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated using only publicly disclosed data; this is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting a professional as necessary.

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AI Financial Analysis

Executive Summary

FY2026 Q2 was a strong top-line and operating-performance period, led by a substantial acceleration in the Public-related and Information-related businesses. Revenue increased 42.9% year on year to ¥174.1bn. Operating income rose 51.5% to ¥5.5bn, outpacing sales growth and demonstrating positive operating leverage. Ordinary income increased 48.9% to ¥6.1bn. Profit attributable to owners increased 78.4% to ¥4.9bn. The earnings increase was also supported by a ¥1.1bn extraordinary gain on the sale of investment securities. Gross profit expanded 15.9% to ¥26.3bn, while the gross margin declined 350bp to 15.1% from 18.6% in the prior-year period. SG&A expenses rose 9.1% to ¥20.9bn, materially below revenue growth, which lifted the operating margin by 20bp to 3.1%. The operating-margin improvement is positive, but the 3.1% level remains low and leaves earnings sensitive to project mix, procurement costs, and execution variances. Net margin increased 50bp to 2.8%, although the gain on security sales means net-income growth exceeded the improvement in recurring operating earnings. Operating cash flow was very strong at ¥13.2bn, equal to 2.69x net income, indicating that reported earnings were more than cash-backed in the half year. Free cash flow was ¥13.4bn, supported principally by a ¥33.9bn increase in trade payables, partly offset by a ¥15.1bn inventory increase and a ¥4.6bn increase in receivables. Liquidity remains adequate, with a 133.6% current ratio, 118.4% quick ratio, and cash of ¥37.6bn against short-term loans of ¥3.4bn. The full-year forecast implies Q2 progress of 41.6% for sales, 35.6% for operating income, and 45.3% for owner-attributable net income, versus a 50% first-half reference point. This indicates that the company expects a heavier second-half weighting, especially in operating income, despite the strong first-half sales growth. The forecast calls for full-year sales growth of 24.0% and operating-income growth of 26.5%, so continued conversion of the Public-related order flow and preservation of project margins are central to delivery. The key balance for investors is whether the substantial sales expansion can translate into a structurally higher operating margin while working-capital usage, low reinvestment, and project execution risks remain controlled.

Profitability Analysis

Annualized DuPont ROE is 13.2%, composed of a 2.8% net profit margin, 1.660x asset turnover, and 2.83x financial leverage. Asset turnover is the principal positive driver of the current return profile, reflecting the very high revenue growth relative to the asset base. Financial leverage also meaningfully amplifies shareholder returns, as total liabilities represent 64.7% of total assets, although interest-bearing debt itself is limited. The 2.8% net margin is still modest and shows that ROE depends more on volume and balance-sheet leverage than on high unit profitability. Gross margin compressed by 350bp to 15.1%, which is a material adverse mix or cost signal despite higher gross profit in absolute terms. Conversely, SG&A increased only 9.1%, versus 42.9% revenue growth, enabling a 20bp operating-margin improvement to 3.1%. This favorable operating leverage appears linked to the large revenue increase in Public-related business, but the low operating margin means its durability depends on sustaining utilization, pricing discipline, and delivery execution. EBITDA was ¥6.5bn and the EBITDA margin was 3.7%, also indicating a low-margin business model. The reported EBIT margin of 3.1% and gross margin of 15.1% explicitly trigger the low-operating-efficiency and low-gross-margin alerts: a relatively small shortfall in gross profit can have an outsized effect on operating income. The five-factor analysis shows a 68.8% tax burden, while the interest burden of 1.298x exceeds 1.0x because non-operating income, including ¥3.3bn of dividends received, exceeds interest expense. Interest expense was only ¥0.4bn and interest coverage was 127.47x, so financing cost is not currently constraining profitability. Profit before tax of ¥7.1bn exceeded ordinary income by ¥1.1bn because of the security-sale gain; therefore, the 78.4% net-income increase should not be treated as fully recurring operating growth. Segment analysis shows that Public-related business is the core business by segment profit contribution, generating ¥3.3bn of segment profit, or about 60% of consolidated operating income. Public-related revenue rose 111.1% to ¥75.7bn and segment profit rose 138.3% to ¥3.3bn, lifting its segment margin by about 50bp to 4.4%. Information-related revenue increased 22.7% to ¥71.5bn and segment profit increased 13.3% to ¥1.8bn, with margin declining about 20bp to 2.6%. Office-related revenue declined 3.0% to ¥26.5bn and segment profit declined 33.5% to ¥0.3bn, with margin falling about 50bp to 1.2%. Other businesses contributed ¥0.4bn of revenue and were broadly break-even at a slight loss, versus ¥0.1bn of profit in the prior-year period.

Growth Assessment

Growth was concentrated in the Public-related business, where revenue more than doubled, while Information-related business also delivered a solid 22.7% increase. This concentration means the consolidated 42.9% revenue expansion should not automatically be extrapolated as a normalized group growth rate. The Public-related segment's profit growth exceeded sales growth, supporting the view that scale and project mix aided margins in the half year. Information-related business expanded revenue but experienced modest margin dilution, making mix and project profitability key variables for the second half. Office-related business contracted in both revenue and profit and remains a drag on the consolidated portfolio. Full-year guidance calls for ¥418.0bn in sales and ¥15.4bn in operating income. First-half progress is 41.6% for revenue, 35.6% for operating income, and 37.1% for ordinary income, each below the standard 50% first-half progress rate by more than 10 percentage points for operating and ordinary income. Owner-attributable net income progress is 45.3%, closer to the 50% benchmark because the first-half result includes the ¥1.1bn securities-sale gain. The implied second half requires ¥243.9bn in sales, ¥9.9bn in operating income, and ¥5.9bn in owner-attributable profit. Management's forecast therefore relies on a pronounced second-half earnings concentration and a substantial increase in operating-profit conversion from the first-half level. Revenue sustainability will depend on continued public-sector demand, IT-related project delivery, and stabilization in office-related demand. The low 15.1% gross margin is a key constraint on translating sales growth into durable profit growth. Work in process of ¥26.1bn is 57.2% of inventory under the reported alert, above the 40% threshold, increasing the importance of timely completion, acceptance, and cost control for projects in progress.

Financial Health

Liquidity is sound on reported ratios, with current assets of ¥165.1bn exceeding current liabilities of ¥123.5bn and producing working capital of ¥41.5bn. The current ratio is 133.6% and the quick ratio is 118.4%, so there is no current-ratio warning and near-term obligations are covered without reliance on inventory liquidation. Cash and deposits increased 45.2% year on year to ¥37.6bn. Cash covers short-term loans by 11.08x, providing substantial immediate refinancing capacity. Interest-bearing debt is ¥3.4bn, debt to EBITDA is only 0.52x, debt to capital is 4.4%, and EBITDA interest coverage is 151.63x; these measures indicate low debt-service risk. The reported debt-to-equity ratio is 1.83x, below the 2.0x explicit warning threshold but elevated versus a conservative benchmark; this ratio should be interpreted alongside the low interest-bearing-debt metrics because the liability structure is dominated by operating liabilities rather than borrowings. The refinancing-risk alert is nevertheless relevant because 100% of interest-bearing debt is short term. In context, the refinancing impact is currently low because short-term loans are only ¥3.4bn and cash is ¥37.6bn, but reliance on short-term facilities should remain monitored if seasonal working-capital needs rise. Accounts payable increased 65.1% to ¥83.8bn, considerably faster than the 42.9% sales increase, and was a major source of first-half operating cash flow. This increase may be a normal consequence of expanded project procurement and revenue volume, but it also raises the risk of a cash-flow reversal if payables normalize. Inventories increased 31.5% to ¥18.8bn, while work in process reached ¥26.1bn, making execution and inventory conversion more important. Receivables were ¥74.3bn, or 35.4% of assets, and the 78-day DSO alert is above the 60-day threshold. The high receivable days are a financial-health concern because delayed collection could absorb liquidity during the second-half revenue ramp, although the current cash buffer is substantial. Contract liabilities were ¥12.2bn, which provides some customer-funded working-capital support. The net defined benefit liability was ¥5.9bn and should be monitored as a long-term obligation, though it is modest relative to equity of ¥74.1bn.

Notable B/S Changes

Short-term loans: +¥1.4bn (+72.1%) to ¥3.4bn - all interest-bearing debt is short term, but cash of ¥37.6bn provides 11.08x coverage and substantially mitigates immediate refinancing risk. Accounts payable: +¥33.1bn (+65.1%) to ¥83.8bn - a major source of first-half operating cash flow; monitor for normalization and associated cash-flow reversal. Cash and deposits: +¥11.7bn (+45.2%) to ¥37.6bn - improved liquidity, supported by strong operating cash flow and working-capital funding. Inventories: +¥4.5bn (+31.5%) to ¥18.8bn - increased capital tied up in inventory alongside a high work-in-process balance; project conversion and cost control are key. Work in process: +¥10.6bn (+67.7%) to ¥26.1bn - elevated project exposure and the reported 57.2% work-in-process ratio heighten execution, completion, and acceptance risk. Receivables: +¥4.7bn (+6.7%) to ¥74.3bn - the absolute balance is significant at 35.4% of assets and should be monitored with the 78-day DSO. Investment securities: +¥11.5bn (+5.9%) to ¥206.2bn - securities remain a meaningful 9.8% of assets, while first-half asset-sale proceeds and gains show that portfolio activity affected earnings and cash flow.

Cash Flow Quality

Cash-flow quality was strong in FY2026 Q2, with operating cash flow of ¥13.2bn versus net income of ¥4.9bn and an OCF-to-net-income ratio of 2.69x. This is well above the 0.8x concern threshold and does not indicate an accrual-led earnings-quality problem. The negative 4.0% accruals ratio also supports favorable cash conversion in the period. OCF-to-EBITDA was 2.02x, reflecting cash generation well above EBITDA rather than weak earnings conversion. Free cash flow was ¥13.4bn, calculated from operating cash flow and modest ¥0.5bn capital expenditure. However, the cash result was strongly supported by a ¥33.9bn increase in trade payables. It was partly offset by a ¥15.1bn inventory increase and a ¥4.6bn increase in receivables, both of which consumed cash. This pattern is not evidence of receivables manipulation because receivables increased alongside sharply higher sales, but the 78-day DSO requires monitoring for collection discipline. The sharp payable build is the principal working-capital item that may reverse in later periods, so the first-half free-cash-flow level should not be assumed to be fully recurring. Capital expenditure was ¥5.0bn against depreciation and amortization of ¥10.4bn, producing a 0.48x CapEx-to-depreciation ratio. This explicitly triggers both the underinvestment and capex-underinvestment alerts. The root cause is that reinvestment is running below asset consumption; while this supports near-term free cash flow, sustained underinvestment can constrain software, systems, and operating-capacity renewal. This is particularly relevant for a business with substantial information-related delivery and work-in-progress requirements. Investing cash flow was slightly positive at ¥1.7bn, aided by ¥13.9bn of proceeds from sales of investment securities, including the ¥10.6bn extraordinary gain recognized in earnings. As a result, both earnings and investing cash flow benefited from asset disposals, reinforcing the need to distinguish recurring operating cash generation from portfolio-related gains.

Dividend Sustainability

The forecast dividend per share is ¥66, stated on a post-split basis following the five-for-one stock split effective January 21, 2026. Against forecast EPS of ¥219.02, the implied dividend payout ratio is approximately 30.1%. This is well below the 60% sustainability benchmark and indicates ample earnings coverage. First-half operating cash flow of ¥13.2bn and free cash flow of ¥13.4bn also provide strong cash coverage for shareholder distributions. Cash dividends paid in the half year were ¥3.0bn, substantially below operating cash flow. The payout profile is therefore financially sustainable under the current forecast. However, free cash flow was aided by a substantial increase in trade payables and capex is below depreciation, so the high first-half cash surplus should not be considered a permanent distribution capacity measure. The low CapEx-to-depreciation ratio also suggests that preserving room for future reinvestment is important even though the current payout ratio is conservative. No share repurchase amount is identified, so the assessment is limited to the dividend payout ratio rather than a total return ratio. Dividend outlook will primarily depend on delivery of the second-half operating-income ramp and management's capital-allocation priorities following the stock split.

Risk Assessment

Business risks include Public-related business drove the majority of first-half profit growth, with revenue up 111.1%; a slowdown in public-sector project timing, procurement, or acceptance could materially affect second-half delivery., Information-related business revenue grew 22.7% but its segment margin declined to about 2.6%, creating risk that growth is achieved at lower project profitability., Office-related business revenue fell 3.0% and segment profit fell 33.5%, indicating continued demand and margin pressure in this portfolio., The 57.2% work-in-process ratio is above the 40% alert threshold; project delays, cost overruns, or customer acceptance delays could pressure margins and working capital., Gross margin of 15.1% and EBIT margin of 3.1% leave limited buffer against procurement inflation, subcontractor costs, competitive pricing, and unfavorable project mix..

Financial risks include DSO of 78 days exceeds the 60-day alert threshold; with receivables at ¥74.3bn, slower collections could reduce liquidity during the second-half sales ramp., Operating cash flow was materially supported by a ¥33.9bn increase in trade payables; a reversal in supplier-credit timing would lower future cash generation., All ¥3.4bn of interest-bearing debt is short term, triggering the refinancing-risk alert; liquidity mitigates the immediate risk because cash is ¥37.6bn and cash-to-short-term-debt is 11.08x., The reported D/E ratio of 1.83x indicates a liability-heavy capital structure even though interest-bearing leverage is low., CapEx-to-depreciation of 0.48x is below the 0.7x alert threshold, creating a risk that near-term free cash flow is being supported at the expense of future operating capacity and systems renewal..

Key concerns include Highest priority: sustaining second-half execution, as first-half operating-income progress is only 35.6% of full-year guidance and requires a sizable second-half profit concentration., High priority: converting work in progress and receivables into cash without further extension of collection periods., High priority: maintaining gross margin while Public-related revenue scales, because a 350bp gross-margin decline indicates limited pricing and cost cushion., Moderate priority: separating recurring earnings momentum from the ¥1.1bn gain on sale of investment securities that lifted first-half net income., Moderate priority: monitoring whether low capital expenditure is temporary timing or a sustained underinvestment pattern..

Investment Implications

Key takeaways include Revenue and operating income growth were strong at 42.9% and 51.5%, respectively, led by Public-related business., Operating leverage was favorable because SG&A grew only 9.1%, but the 3.1% EBIT margin and 15.1% gross margin remain structurally low., Annualized ROE of 13.2% is solid, but it is driven more by asset turnover and leverage than by net-margin strength., First-half cash generation was strong, but the ¥33.9bn payable increase means free cash flow should be assessed over a full working-capital cycle., Full-year guidance requires a materially stronger second half, particularly for operating income., The balance sheet has ample cash and very low interest-bearing leverage, while short-term funding concentration and collection efficiency merit monitoring..

Metrics to watch include Public-related segment revenue, segment margin, project completion, and acceptance timing, Information-related segment margin recovery and Office-related demand stabilization, Gross margin and operating margin versus the first-half 15.1% and 3.1% levels, Receivable days, receivables balance, inventory and work-in-process conversion, Trade payable normalization and resulting operating-cash-flow conversion, Second-half operating-income delivery against the ¥15.4bn full-year forecast, Capital expenditure relative to depreciation and any increase in systems or software investment, Recurring profit excluding investment-security disposal gains.

Regarding relative positioning, The company combines strong turnover-driven growth, solid annualized ROE, high cash coverage, and low interest-bearing leverage with a low-margin operating profile. Relative performance is currently strongest in Public-related business, while Information-related margin dilution, Office-related weakness, high work in progress, and elevated receivable days temper the quality of the growth profile.