Mid-long term Management Strategy

Management Policy

Under the mission of “making the impossible possible for the people of the world,” the SIOS Group pursues innovative solutions to resolve issues affecting people and to contribute to the betterment of society.

Medium-Term Management Strategy

The Group operates under a medium- and long-term management strategy to generate sufficient cash flow to enable the achievement of its mission and sustainable growth. We intend to increase our ongoing free cash flow by increasing the operating cash flow from an enhanced earnings capacity as well as by ensuring the soundness of an investing cash flow from efficient investments made to gain stable returns. To enhance the Group’s earnings capacity, we will bolster sales and gross profit as well as manage SG&A expenses more effectively. To bolster sales and gross profit, we will improve customer satisfaction, enhance the value propositions of our existing lines of products and services, and develop and offer new products and services.
To ensure the soundness of our investing cash flow, we will constantly assess the performance of acquired companies as well as strategic capital and business partnerships with other companies and identify and resolve issues before they become serious.

Management Priorities

To achieve its mission, the Group focuses its efforts on the following three key areas

  1. hiring and developing talented people
  2. investing in research and development
  3. creating a corporate culture that fosters innovation.

More specifically, we will take action for each area as outlined below:

1Hiring and Developing Talented People

As the working-age population is declining in Japan, Japanese companies are competing to hire and retain talented workers. Under this circumstance, the Group is looking at the global labor market as an additional source of talent. We will also increase the number of people with disabilities on our payroll to make our workplace more diverse and inclusive.
In addition, we will create a workplace environment in which every employee has a chance to achieve their full potential. We will value the view and personality of each employee and encourage them to work as a team in order to achieve better performance as well as achieve professional growth both individually and as a team. We also recognize the need to step up investing over the medium and long term in assisting employees to acquire new skills.

2Investing in Research and Development

It is essential to continue to invest in research and development in order to stay ahead of the curve in a changing IT industry and to bring out competitive products and services. The Group will focus its R&D efforts on cloud and AI technologies as well as Fintech solutions so as to enhance the value propositions of our existing lines of products and services and develop and offer new products and services.

3Creating a Corporate Culture That Fosters Innovation

The Group believes that a culture that encourages employees to be independent-minded and demonstrate the pioneering spirit of an entrepreneur who creates trends—not simply follows them, has been driving innovation in the Group since its founding.
True to this conviction, we offer employees more flexible working arrangements as well as encourage them to use internal social media for open and frequent communication with each other, to exchange information and ideas with software engineers outside the Group, and to put the SIOS Values into practice.
In addition, we have been active in undertaking social engagement programs to play our role in helping achieve a sustainable society as well as to create a corporate culture that fosters innovation among employees.

Key Management Metrics

In addition to EBITDA, the Group has established ROIC as another key management metric to continue to generate positive cash flow necessary to achieve its mission.
Positive cash flow enables the Group to invest in the three driving forces for its growth—people, research and development, and a corporate culture that fosters innovation—and to return profit to our shareholders and stakeholders. Through these efforts, the Group works toward carrying out its management policy stated at the top.

Medium-Term Business Plan for FY 2019-2021

We will make our business foundations more solid from FY 2019 through 2021 and work toward achieving EBITDA of 550 million yen and ROIC* of 15% in FY 2021.

Medium-Term Business Plan for FY 2019-2021

* ROIC = Operating income x (1 – Effective tax rate**) / (Interest-bearing debts + Shareholders’ equity)z
** 35% used for calculation

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