■ Medium-term Management Plan 1. The goal of the medium-term management plan The outline of the "Medium-term Management Plan 2025" (fiscal year from February 2024 to February 2026) that Veru, Inc. is currently working on is as follows. The company believes that the market environment will change after the end of the corona pandemic. Regarding the changing societal situation, the company assumes various management challenges arising from the normalization of economic activities and the consequent labor market shortages, uncertain future risks, the rise of marketing needs due to the evolution of technology and the increasing complexity of customer touchpoints. As for the company's market, it predicts the importance of securing highly skilled personnel through marketing technology utilization and the increase in effective BPO demands in both the defensive and offensive areas amid various management challenges, as well as rising labor costs due to a shortage of human resources and the automation of customer correspondence. In April 2023, the company established a new corporate brand slogan, "How will you respond to that voice?". Although it has been listening to the needs of society, companies, and consumers by listening to the people's voices and solving problems with meticulous communication, the problems that can be solved by interpreting the "voice" are becoming more multifaceted and complex due to technological innovations. Meanwhile, the new epoch of "NEW BPO," which the company group aims to achieve as a slogan, is to model the process of turning many of the voices gathering at the CX site (customer response department) into values related to management decisions and to lead to the optimal action by utilizing data. NEW stands for Next, Engage, and Widen, aiming to delve into all the voices (maximizing the performance of 40,000 people, enhancing the utilization of data), connect stakeholders (collaboration with partners), and broaden the sphere of influence (growth strategy for expanding into new business domains). In other words, it is considered that the company aims to utilize a wide range of collaborations with companies more than in the past, not only in contact centers but also in marketing and other areas. In the "Medium-term Management Plan 2025," the company has set three key policies and plans to make additional investments of a total of over 15 billion yen for three years from fiscal year 2024 to achieve them. As a result, it has set quantitative targets to achieve sales revenue of 180 billion yen (an average year-on-year increase of 7.1%), operating profit of 16.5 billion yen (an operating margin of 9.2%), net income after tax of 11 billion yen (an average year-on-year increase of 11.8%), ROE of 14.4%, and a dividend payout ratio of 50% for the final fiscal year ending in February 2026. It is a goal-setting that exceeds the sales revenue average annual increase of 5.3% and the tax-exempted income average annual increase of 8.7% in the previous medium-term management plan, based on the assumption regarding the changing social and economic environment. Although the first year of the plan, the fiscal year ending in February 2024, started off tough due to the unexpected decrease in high-profit corona-related businesses, the company aims to achieve its target for the final year by investing in organic growth (growth by internal resources) and reform through generated AI after the fiscal year ending in February 2025.

1. The mid-term management plan "MISSION2025".

TDSE <7046> aims to achieve sales of more than 1 billion yen in the 2029 fiscal year as a second pillar by establishing a product business in addition to stable growth through consulting business in the medium to long term targets (March 2029). "MISSION2025 (fiscal year 2024 to 2026)" has been formulated as the first phase to achieve this. In "MISSION2025," in the consulting business, we will focus on companies with sales of over 100 billion yen according to the conventional policy of "large-scale x long-termization," and expand human capital to achieve sustainable growth. In the product business, we aim to expand the business area by approaching companies with sales of less than 100 billion yen by establishing human capital and sales methods and extracting themes that can be developed for various companies based on the achievements in the consulting business, and lineup products that match such themes regardless of our own and other companies.

Based on this policy, the company aims for sales of 33-37 billion yen and an operating margin of 10% or more in the fiscal year 2026. The reason why there is a wide range of sales targets is that organic growth with 9.9% growth in the consulting business and 20.3% growth in the product business aims for sales of 3.3 billion yen, and the idea of aiming for sales of 3.7 billion yen by adding efforts in non-continuous fields in the background. As for the operating margin, it is expected to be slightly lower than the predicted 11.0% in the fiscal year 2023, as cost precedes such as expanding human capital and lineup of product services are expected for the growth acceleration in the second phase of the medium-term management plan (fiscal year 2027 to 2029) .

At the earnings conference held in June 2024, the company revealed that it will execute capital partnerships and M & A for non-continuous growth in addition to organic growth, and it will accelerate corporate growth when the direction is established and the strategy and plans are revealed. is expected to be a movement to be noticed.

(Author: FISCO guest analyst Nobumitsu Miyata)