Welcome to today's Financial Results Presentation for the Fiscal Year Ended March 2025. In today's presentation, we will be going over the realized results for the fiscal year, the forecasts for the fiscal year ending March 2026, and the details for the new medium-term management plan. Allow me to start with the results for the fiscal year ended March 2025. Here is the results overview. I will be going over each item in some detail. The COMSYS Holdings Group has now exceeded JPY 600 billion in net sales. More specifically, we recorded JPY 614.6 billion in net sales, which is a new record performance for us. We also reached a new record of JPY 45.9 billion in operating profit. The line graph shows the value for ROE over time, which stood at 8.2% for fiscal year 2025.
The all-time high is 9.4%, resulting from a number of very lucrative construction projects in the field of mobile communications, which is our foremost area of expertise. While we fell slightly short of this all-time high, our ROE metric has recovered over the past number of years. Next are the net sales and orders received results. We reached a new record of JPY 638.8 billion in orders received overall, and also new records in orders received in the fields of social systems and IT. We also reached a new record of JPY 614.6 billion in net sales overall, and within this, new records in net sales in the fields of social systems and IT. Next is a breakdown of the various business segments as a percentage of total sales. The Carrier-Related business accounted for 45.3% of total sales, IT Solutions for 20.3%, and the Social Systems-Related business for 34.4%.
The smaller pie chart on the right shows the percentage breakdown for the fiscal year ended March 2015. Back then, the Carrier-Related business accounted for 2/3 of total sales, but we have since then not just grown the overall pie, but also diversified into IT Solutions and to the Social System-Related business, putting in place a business structure resting on these three core pillars. Next are the operating profit and net profit results. We reached new records in operating profit of JPY 45.9 billion and JPY 30 billion in net profit. The contract backlog has also reached a new record of JPY 264.9 billion. As is the case with orders received, Social System-Related and IT businesses posted new records. We will continue our efforts to go through the order backlog in the fiscal year ending March 2026 as well.
Allow me to use this opportunity to discuss some of the key orders and projects we were involved in during the second half. First, we carried out emergency repairs of carrier-related infrastructure in the aftermath of severe flooding in the Ishikawa area. Hokuriku Denwa Kouji, which is a COMSYS Group company, is the sole company handling telecom infrastructure in this area, so the company worked to carry out repairs. Naturally, this was not a solo effort by Hokuriku Denwa Kouji, as the COMSYS Group worked as a cohesive unit to repair damaged infrastructure in the Hokuriku region, which is where Ishikawa Prefecture is located. Moving on to the right-hand side of the page, we were also involved in emergency repairs of telecom infrastructure after a large sinkhole opened up in the middle of the road in Yashio, Saitama Prefecture.
I believe most of you saw news coverage of this tragic accident. Nippon COMSYS handles repairs and maintenance in this area, so the COMSYS Group did emergency repair work in order to bring telecom infrastructure back online in the aftermath of the incident. On the bottom left-hand corner, we have a factory operator for which COMSYS already carried out infrastructure work. In addition to this existing physical infrastructure project, this operator has also now entrusted us with setting up and maintaining its fair management system. In other words, we are starting to see loyal customers who trust us and request services at both the physical infrastructure, what one might term hardware, and software levels. Last, we are seeing very strong interest for electrical equipment infrastructure for things like data centers, and we have been able to capture this demand and execute on these projects through intragroup collaboration between Nippon COMSYS and SANCOM.
I would now like to go over the business plan for the fiscal year ending March 2026. Page 12 contains a bird's eye overview of the business plan. In the fiscal year ending March 2026, we expect results in line with and above fiscal year ended March 2025 levels, which represented record highs. Specifically, we are guiding for JPY 650 billion in orders received, JPY 620 billion in net sales, JPY 45 billion in operating profit, JPY 31 billion in profit attributable to owners of parent, and an ROE of 8.2%. Unfortunately, we expect a slight decrease in operating profit of JPY 900 million. It should, however, be noted that we had a number of highly profitable projects and one-off extra demand related to a revision of accounting standards, so this skewed results for the fiscal year ended March 2025.
Additionally, we also made considerable progress in going through the order backlog in the second half, meaning this backlog is not now much higher than it was in the first half. Additionally, we also have plans to carry out upfront investment in IT systems. These are one-time expenses, which we believe will lead to significant cost savings further down the line when it is time to revamp and update our overall setup. In summary, while we do expect a slight decrease in operating profit, we are committed to doing our utmost to start the new medium-term management plan by matching or exceeding the previous fiscal year's performance. Page 13 shows the orders received and net sales forecasts. We expect an increase in orders and sales in the Carrier-Related business against the backdrop of a very bullish outlook on the part of telecom operators.
Additionally, we expect the Social System-Related and IT Solutions businesses to continue growing as well. That said, and circling back to what I said earlier, we often have large-scale projects in the Social System-Related business, and this introduces a little bit of volatility when comparing one fiscal year to the next. In other words, we see an increase in some years followed by a slight decline the following year. But I would like stakeholders to bear in mind that this is merely a results artifact stemming from the factors I just outlined. Next is the topic of shareholder returns. In addition to our preexisting commitment to a total return ratio of around 70%, we raised the annual dividend by JPY 5 to JPY 115 per share for the fiscal year ended March 2025, corresponding to a year-on-year increase of JPY 10 per share.
For the fiscal year ending March 2026, we are guiding for an annual dividend increase of JPY 5 to JPY 120 per share. We also carried out JPY 6 billion in share buybacks over the course of the fiscal year ended March 2025, up JPY 1 billion from the previous fiscal year. Over the course of the ongoing fiscal year, we are guiding for JPY 8 billion in share buybacks, up JPY 2 billion from the previous fiscal year. This concludes my overview of the business plan for the fiscal year ending March 2026. I would now like to go over the COMSYS Group's 2030 Vision. First is the COMSYS Group's long-term vision. Leading company is a central keyword within this scope. Specifically, we want to become a leading company combining the three businesses that make up our competitive advantage.
We will continue building telecommunications infrastructure, IT systems, and social systems, as we believe that valuing each of these individual businesses while combining them synergistically will allow us to unlock endless possibilities. The COMSYS Group wants to unlock these possibilities so that we can become a leading company delivering new value to our customers and contributing to social development. First is a retrospective of the previous medium-term management plan, COMSYS Vision: Next Stage 2023+1. Expanding the duration of Next Stage 2023+1 by one year allowed us to achieve a top-line result of JPY 600 billion. Additionally, we worked to grow two additional business pillars in order to reduce our dependence on the Carrier-Related business. We were successful in these efforts with the Carrier-Related business now accounting for under 50% of total sales, and the IT Solutions and Social System-Related businesses combined for the majority of sales.
As you can see from the table on the right, in addition to the execution of a variety of large projects, we also enhanced governance and made steady advances in terms of ESG initiatives. Building upon Next Stage 2023+1, we have now formulated the COMSYS Group's 2030 Vision. I apologize for the sheer amount of text, but this slide outlines the COMSYS Group's business strategy. The core of the concentric circles at the bottom is the building and operation of telecom infrastructure. COMSYS originally started out in the domain of telecom infrastructure, which remains the core domain within our business strategy. This diagram illustrates how we have gradually branched out into peripheral areas and how there are future areas as well.
Let us start with item number one, shown here at the center, and which reads, "Continue building and operating Japan's telecom infrastructure." This remains the COMSYS Group's enduring mission statement, and thus something we are committed to continue doing no matter what. That said, promising developments we expected would come out over the course of the previous medium-term management plan, such as the EHF implementation of 5G, for example, are yet to materialize. The full-scale rollout of things like the IOWN concept proposed by NTT is also still some ways off. That said, whether it's EHF or IOWN, once it's time, deployment of these technologies will take place all at once nationwide, so we need to maintain the right framework in preparation for these developments. Having this framework and structure in place is our mission as players building and maintaining Japan's telecom infrastructure.
In short, it is vital that we keep this framework and structure in anticipation of developments in EHF, IOWN, et cetera, while taking on a variety of other projects. Additionally, the number of companies that want to offer telecommunication services isn't restricted to NTT, as we have other big operators like KDDI, SoftBank, Rakuten, and indeed, a variety of new market entrants. For example, data centers rely very heavily on telecommunications technologies and infrastructure, and cell phone carriers no longer build cell towers on their own, but rather make use of infrastructure sharing arrangements with other players. We therefore want to address these various forms of demand so that we can earn our clients' business. We believe there is still quite a lot of room for growth in these areas. Additionally, engineering challenges remain even in existing telecommunications domains.
For example, many apartment buildings haven't yet upgraded to fiber optic. The migration from analog systems to digital ones is still ongoing, and there is a need to enhance response capacity to natural disasters, which are becoming increasingly more destructive as time goes on. Addressing these challenges therefore requires us to maintain and further refine our engineering capabilities. We view this as our mission and our core priority going forward as well. The second section of the concentric circle diagram pertains to the IT Solutions and Social System-Related businesses. Regarding these, I am certain you'd agree with me when I say I expect to see growth in these domains. Over time, we have gradually grown our presence in these domains and going forward, we will continue working to earn more and more of these projects, thus contributing to society. I will be going over the details in a moment.
The third strategy, shown here as the outer layer of the concentric circles diagram, pertains to keywords like autonomous driving, sensors, robotics, et cetera, as social infrastructure integrates more and more ICT elements and undergoes digital transformation. Telecom carriers, developers, and municipalities face numerous social issues and increasingly, these players turn to solutions leveraging IT and DX. Implementing these strategies requires the services of companies like ours with our capabilities and track record when it comes to the real-world use of these technologies. For example, companies like ours can put together a team of subcontractors and work together with prominent general contractors to build both physical infrastructure as well as software and systems incorporating IT and DX, which are domains these large companies have trouble incorporating.
We believe these types of domains will continue seeing growth going forward, which is why we want to further enhance our capabilities, allowing us to address demand for solutions in these domains. Rather than building a fourth business pillar, the idea is to further grow our three pillars by approaching them from a different vantage point. We believe many domains offer opportunities for this, so this is something we want to make sure to convey to stakeholders. This concludes my overview of the three business strategies. Underpinning these strategies is item number four, shown here at the bottom. Specifically, this refers to efforts to enhance the management structure as it pertains to capabilities in terms of employees and partner companies, financial resources, et cetera. I will now go over topics covering each of these three business strategies. First is the Carrier-Related business.
People often express concern about a possible slowdown in terms of work projects in this business. However, based on what I have seen, I do not think this concern is at all justified. Allow me to show you some data I believe will dispel some of these concerns. The vertical bar graph shows the value of completed telecom construction in JPY as per official Ministry of Land, Infrastructure, Transport and Tourism statistics. This data was probably compiled from public works management assessments by the Japanese government. This amount stood at JPY 1.3 trillion in 2015 and had grown to around JPY 2 trillion in 2020, where it remained in 2024.
In terms of the outlook going forward, we believe there is still room for growth in telecommunications projects in light of the use of telecommunications in addressing the social issues we went over earlier, and as forms of telecom infrastructure increase in sophistication. The graph also shows completed construction projects by the COMSYS Group. As of 2015, this figure stood at around JPY 321 billion. This amount includes not just construction projects by telecom carriers, but also construction projects related to LAN, WAN. This number had grown to JPY 360 billion by 2020 and stood at JPY 354 billion in 2024. As you can see, this market has shown significant growth over the years and what is more, this is our core competency domain. We believe there is still significant room for growth and that this business has great potential going forward.
That said, further growing this business requires us to do a number of things. Circling back to what I said earlier, different players now have new needs in the telecommunications space. We would like to hear their needs in order to be able to address this demand source. As we wrote here in the second bullet point on the left, we have revamped our sales structure, creating the new business development office within our team specializing in infrastructure projects for telecom carriers. This team has already reached JPY 15 billion in orders outside the scope of projects by telecom carrier clients, and we believe we will be able to continue growing this number. This business is also prone to fluctuations in demand. Recently, we have seen large amounts in projects from mobile carriers, resulting from lump sum investment in infrastructure to deliver quality improvements to users.
However, during lulls in projects, field personnel work on various projects for various companies, so this makes it difficult to get everyone on the same page when we need the manpower for when a large number of large projects comes down the pipeline. In recent years, a number of workplace issues and incidents are also in the spotlight. In light of this, we are rethinking the role our partner companies play and putting in place a structure making sure our subcontractors have stable access to work. We are currently in the process of executing these strategies. Lastly, as we wrote here in bullet point number four, last year, we opened a new regional office in Kyoto dedicated to construction operations. We are also in the process of building a large base of operations in Yokohama as well.
This office in Yokohama is particularly important, not just because it helps us enhance our operations in the Tokyo metropolitan area, but also from a BCP point of view, as we can use Yokohama as a base of operations in disaster situations. Through the steady and sure execution of these initiatives, we want to prepare for the arrival of large trends by the 2030s. Trends such as EHF, IOWN, et cetera, catalyzing the role of telecommunications in solving social issues. Next are the topics pertaining to the IT Solutions business. Allow me to direct your attention to the diagram with the concentric circles. We position IT infrastructure in the innermost circle, since this is where we have a tremendous competitive advantage in.
Over time, we have been able to grow our presence in this domain, as our services have allowed us to build strong relationships with municipalities, educational institutions, and private sector clients who trust us with their IT infrastructure needs. The yellow arrow points to our goal of expanding into more business domains. That is, we want clients to come to us with projects and requirements in more and more different domains. In particular, clients are now migrating from on-premise IT execution environments into cloud setups or hybrid environments combining cloud and on-premise solutions, and I think it is a sure bet to say this trend will continue into the future. Additionally, solving social issues will require leveraging AI, robotics, and IoT technologies. Consequently, we want to grow the business domains we operate in so that we can better address the ever-growing and ever-evolving needs of our customers.
We also seek to secure engineers with advanced technical skills and expertise, coordinating our efforts at the group level to further improve our ability to execute projects on a nationwide basis. A key topic within this business is the insourcing of cloud-based DX infrastructure and real-world implementation, shown here on the fourth item on the checklist. Specifically, we want to create in-house a cloud-based DX infrastructure for the approximately 18,000 employees who work at the COMSYS Holdings Group. We then want to leverage our learnings in the execution of this project to offer this service to companies in need of a similar service and facing similar challenges. Additionally, as we wrote here on the second bullet point on the left, the COMSYS Group boasts two elite IT teams. The first is TOSYS, a COMSYS Group company that is a FastT rack Ready Partner with Microsoft.
In fact, TOSYS is one of only 10 companies in Japan that have been certified by Microsoft to help cloud solution license holders install and use Microsoft cloud services. The second elite team is COMSYS JOHO SYSTEM, a company with expertise in system development leveraging cloud and AI technologies. The idea is to take technical expertise siloed into each group company and use it in other parts of our organization. What is more, using our group as a training ground, if you will, for the implementation of these technologies allows us to elevate this to the role of an important pillar allowing us to address our clients' needs and requirements.
Examples of this are clients at the regional as well as national level looking to migrate their in-house systems to new systems, but who do not know how to best approach any possible redundancies this might create in terms of the old and new systems. Additionally, another use is clients who are having difficulty in securing highly qualified engineering talent, and who therefore outsource this process to us. Microsoft Japan endorses the various initiatives put forth by the COMSYS Group and, going forward, we want to partner up where possible with Microsoft. Next is topic number two as it pertains to the Social System-Related business. Allow me to direct your attention to the vertical bar graph with the green bars. I think most of you mainly associate our Social Systems business with projects related to photovoltaic panels within the context of the FIT program.
At its peak, this business produced close to JPY 50 billion in net sales, which then saw a marked decline following the end of the FIT program. Since then, however, we have been able to grow our business considerably once again by serving demand for data centers and electrical infrastructure. Specifically, we have grown this business to the point where this demand has been able to more or less make up for the business we lost after the end of the FIT program. What is more, we expect demand to continue growing in the field of renewable energy, so this is an area we want to deliver growth in going forward. Next are the two line graphs on the right. Over the years, a number of companies operating in the field of social systems have joined the COMSYS Group through the M&A process.
The graphs show post-M&A growth for companies in areas related to the two core infrastructure services of gas and steel. These graphs show the post-acquisition trend in net sales and operating profit. Specifically, these two companies saw a post-M&A combined increase of JPY 15 billion for net sales and JPY 2.5 billion for operating profit. Additionally, it is worth noting that these graphs do not include the very extensive synergy effects with existing businesses. In other words, the purpose of our M&A efforts is not simply to acquire companies, but rather to have these companies contribute to the whole as an integrated part of the COMSYS Group. Allow me to give you a little bit more color as it pertains to our data center-related business in particular. Large-scale projects continue delivering strong results, and we expect growth in orders for urban and multi-site data center projects.
Urban data centers allow companies to concentrate all the necessary functions within smaller buildings as opposed to larger structures, as is the case with large-scale projects. This structure is actually quite similar to the in-building infrastructure systems used by telecom carriers. Furthermore, the outlook is for telecom carriers to increasingly deploy these types of urban data centers. This is therefore an opportunity for us to shine since we possess vast expertise and an extensive track record when it comes to projects related to in-building infrastructure. Multi-site projects are also expected to increase going forward. We want companies in local areas to enter these data center projects, allowing us to capture at the group level growing demand for these multi-site projects in local areas. We are also seeing an influx of projects related to DCI infrastructure, that is network infrastructure linking up multiple data centers.
Furthermore, once IOWN achieves mass deployment, DCI will allow these data centers to operate more or less as a unified whole through what is called disaggregated computing. Consequently, this is a domain we want to establish our expertise and competitive advantage in. We believe that combining telecommunications infrastructure, IT systems, and social systems unlocks endless possibilities. This diagram comes from the Ministry of Land, Infrastructure, Transport and Tourism's documents for its i-Construction 2.0 plan. As you can see, the Ministry of Land, Infrastructure, Transport and Tourism foresees the need to use robots, AI, IT, and other technologies on site at civil engineering projects. Additionally, building and maintaining structures is no longer just a civil engineering problem, but rather a multidisciplinary effort involving integration with IT and ICT technologies. This trend is undeniable and one which will continue becoming more pronounced as time goes on.
Within this scope, in the execution of large-scale construction projects, COMSYS takes on the role of comprehensive subcontractor, and we work together with general contractors to implement IT and DX initiatives at the construction site level. Consequently, an operating group such as ours with the ability to address important social needs is very well-positioned to benefit going forward. This slide goes over another example of efforts to integrate telecom, IT, and social. Up until now, in the overwhelming majority of the cases, we had only been able to secure the construction portion of projects. That said, over time, our track record when it comes to these construction projects has allowed us to deepen our relationship with clients. Based on this trust, we now often get requests for projects pertaining to design and management, as well as for delivery at the nationwide level.
Against this backdrop, we want to leverage COMSYS capabilities as an operating group with a nationwide presence throughout Japan so that we can address client needs. Additionally, we want to be able to better meet our clients' needs as their business operations expand and evolve. To this end, we are carrying out initiatives like the two initiatives shown here. For example, the NDS Group is a wholly owned COMSYS subsidiary with a stellar reputation built over the years through its operations in Japan. They were entrusted by clients with the task of building the entire infrastructure at a factory in Texas, and this led to the creation of a local subsidiary in the state of Texas. Additionally, Nippon COMSYS is currently in the process of opening a branch in Jakarta so that we can secure business from telecom carriers expanding into the Jakarta market and other players in this market.
The picture on the left shows the COMSYS team participating in the welcome movie for NTT Docomo's OREX Open RAN Implementation PoC. Our team also participated in the MWC Barcelona event held earlier this year, showcasing the technologies we can help deploy. We are targeting at least JPY 800 billion in net sales and at least JPY 60 billion by the end of the fiscal year ending March 2031. That said, we view this as a stepping stone as we seek to become a trillion-yen company by the early 2030s. Addressing key engineering needs for the 2030s to solve numerous social issues, like the implementation of IOWN, EHF, 6G, compact cities, et cetera, on a nationwide scale, will allow us to grow to become a trillion-yen company. Within this scope, we are fully committed to meeting the expectations of our clients and of local communities.
It is therefore vital for us to have in place an organizational structure allowing us to generate JPY 800 billion in sales by the fiscal year ending March 2031, lest we fail to adapt to the requirements of the next generation. Additionally, the ability to execute, which is one of the COMSYS Group's competitive advantages, is key to achieving this technological roadmap. Ideas and technologies are implemented nationwide, giving birth to innovation. Nationwide expansion therefore poses a bottleneck, and the COMSYS Group has the ability to help our clients on this front, thereby contributing to solving these challenges faster. Going forward, we will continue considering the cost of capital and the share price in our management decisions and operations.
Within the COMSYS Group 2030 Vision Policy, we are guiding for an ROE target of 10% and will continue targeting total returns of 70%, while also delivering dividend growth of at least JPY 5 per share every year. Lastly, as we wrote here at the bottom, as a company supporting vital social infrastructure, we will maintain a capital structure ensuring the stable continuity of business operations, no matter what. Concurrently, we will carry out management considering the cost of capital and the company's share price. Page 30 shows the trend in dividends over time. We have delivered 12 consecutive years of dividend growth since the fiscal year ending March 2014, and 21 years of progressive dividends since the company's founding. Next is the cash allocation plan.
Over the six-year period between fiscal years 2026 and 2031, we are aiming for cash inflows of JPY 370 billion, of which at least JPY 150 billion will be earmarked for shareholder returns. Additionally, at least JPY 200 billion will be earmarked for growth investment, which leaves several tens of billions of JPY for M&A. M&A has the potential to open up collaborative efforts with new players and unlock a number of synergies. As such, should any such opportunities present themselves, we might potentially consider raising additional capital for the execution of such deals. Next are the non-financial goals. The very nature of our work lends itself well to the ideal of contributing to the creation of a society capable of growing in a sustainable manner. In other words, the COMSYS Group seeks to leverage our engineering capability in innovation to make a social contribution.
Additionally, we will be continuing our global environment conservation efforts, strengthening human resources, ensuring safety, security, and quality, and enhancing governance. Next are our efforts to enhance the management structure, in particular, as it pertains to human resources. COMSYS positions improvements in corporate value, the development of an affluent society, and improvements in employee engagement as fundamental interconnected themes of a vital nature. The COMSYS Group comprises just under 70 companies and over 17,000 employees, and we are carrying out efforts to improve employee engagement in a way that fits each individual company. We will be upholding this strategy and, should the need arise, execute certain initiatives common to our entire workforce across the whole organization. So far in 2025, we have hired just under 450 new graduate hires and over 350 mid-career hires last year as well.
Of this number, hiring at our consolidated subsidiaries accounted for around 240 mid-career hires. Consolidated subsidiaries are really the backbone of on-site operations, so we want to create a sense of unity also extending to consolidated subsidiary hires and offer a fulfilling workplace environment to everyone. We believe these improvements will help us achieve the numerical targets I outlined earlier and solve social issues. We believe our employees working on-site are our biggest strength, as are the partner companies we work with. Consequently, we will continue focusing our efforts in these areas going forward with an eye toward the targets we have set for ourselves. Last are our efforts to enhance the management structure on the environmental front. Our various businesses all have a very strong social responsibility element. Within this scope, we have a commitment to decarbonization, resource circulation, and coexisting with nature.
We consider these to be the baseline of our environmental commitment and will continue efforts on this front. This concludes today's financial results presentation. Let us now move on to the Q&A session.
Mr. Hamakawa with Nomura Securities will be posing the first question.
My name is Hamakawa, and I am with Nomura Securities. I have two questions about the medium-term management plan. First, allow me to ask about some of the differences compared to the previous MTMP. The previous MTMP focused on growing the other two business pillars outside the carrier-related business. The new MTMP's focus is on achieving a well-balanced and well-integrated division between the three pillars. You outlined specific net sales and operating profit targets on page 28, but could you give us some color in terms of what areas you will be focusing on to deliver profit growth?
As you pointed out, we believe the COMSYS Group has superior expertise and a competitive advantage in the domains that make up our three business pillars. These are also important domains from a social point of view, so we want to further grow our presence here. To give you a rough estimate, we are guiding for net sales of JPY 300 billion from the Carrier-Related and Social System-Related businesses, respectively, and JPY 200 billion from IT Solutions. Additionally, rather than pursuing operating profit on a per-segment basis, we focus on raising overall profitability at the group level. I did not go over this in detail during my presentation earlier, but by having our telecom carrier team take on more contracting projects related to on-site Social Systems and IT, we want to grow their track record and expertise, and this applies to our partner companies.
As such, even when we have fewer projects from telecom carriers, the idea is to offset this through the execution of IT and Social System-Related projects, achieving growth for both ourselves and for our partner companies. This is the model we employ, so our management style does not really call for us to, say, focus on profit margins for any specific business. In summary, we focus on the whole rather than on specific individual elements of our business. To reiterate, in broad terms, we are guiding for JPY 300 billion in sales from the Carrier-Related and Social System-Related businesses, respectively, and JPY 200 billion from IT Solutions, bringing the grand total to JPY 800 billion.
In terms of operating profit, teams that expand our acquisition channels bring in projects offering a great value add. Furthermore, taking on a variety of projects allows us to reduce volatility in the Carrier-Related business, thus raising profit margins.
My second question pertains to page 21 of the presentation materials. Page 21 contains a vertical bar graph comparing the overall market completed construction volume for telecoms and volumes from completed construction projects by COMSYS Holdings. I would like to hear your thoughts on the delta between the overall growth in this market through to fiscal year ended March 2025 and COMSYS Holdings' project volume and the company's timetable for bridging this gap. System integrators with a focus on networks are seeing tremendous growth, while telecom infrastructure companies are lagging behind, so I would like to hear your thoughts on this gap as well.
Telecom carriers are our largest clients, so because of the sheer size, it was relatively easy to deliver profits. To be frank with you, I think we ended up focusing way too much on this particular segment of what is actually a JPY 2 trillion market. I think the main result for this gap in performance was simply the fact we weren't able to expand our horizons to other segments within this market. That said, this JPY 2 trillion market is also made up of countless small-scale projects, meaning that we need to tweak our approach if we are to capture volume from these smaller market segments. The way to do this is to use lulls in projects from telecom carriers to enter new areas so that we can ensure a steady stream of volume throughout the year, both for us and for our partners.
As we develop this model, this allows us to tackle even small-scale projects and thus drive profits for the COMSYS Group as a whole. I don't think the main general contractor firms offer this kind of scale flexibility. For example, the COMSYS Group offers optic fiber cable laying services ranging from a few tens of thousands of yen in costs up to several tens of billions of yen in installation costs. We offer this service nationwide, and this flexibility and geographical reach set us apart from the competition. In summary, large projects make up the peaks, while we continue generating sales and profits during the trough phases by taking on various small projects. Additionally, we often provide maintenance and delivery services for clients who initially request our construction services, underscoring how these additional services allow us to build a stable demand foundation.
This approach now allows us to look at this JPY 2 trillion market as a whole and expand in an efficient manner to segments we think we can tackle.
Thank you for the detailed answer.
Mr. Nakagawa with Mizuho Securities will be posing the next question.
My name is Nakagawa, and I'm with Mizuho Securities. I have two questions, the first of which pertains to the company's initiatives in the data center-related business, as detailed on page 25. I believe there is an upper limit to the construction execution capabilities of the companies that make up the COMSYS Group. Against this backdrop, is my understanding therefore correct when I say the company seeks to utilize these urban and multi-site projects to grow net sales from data center projects and the number of projects itself?
We project more and more demand for these urban data centers going forward. As it stands, large projects are still mostly large data center installations, but our strategy is to have Nippon COMSYS, which has been the main player in the execution of these large-scale projects, redirect manpower from local areas toward the Tokyo metropolitan area. Doing so helps in the execution of existing large-scale projects and also has the benefit of equipping core personnel with key skills and expertise they will need for when we start seeing more and more of these urban and multi-site data center projects spring up nationwide. Deployment of urban-based data centers is only now starting to ramp- up, so the number of projects is still small compared to large-scale ventures.
That said, as I mentioned earlier, new technologies make these types of data centers possible, and we are increasingly seeing a shortage of usable land and electricity supply for data centers in the Tokyo metropolitan area and data center parks nearby, like Inzai City in Chiba Prefecture. Consequently, I think it is more than safe to say the trend is toward building these data centers across different areas.
The vertical bar graph on page 24 shows the trends in net sales from DCI-related projects over time, which currently stand at around JPY 30 billion. What is your outlook in terms of the growth rate for net sales?
I cannot give you the figures right now, but you can reverse engineer our growth estimates by looking at the bar graph.
My second question pertains to the business targets outlined on page 28. You listed a number of new technologies you believe will make up a significant portion of engineering needs in the 2030s. As it stands, what are some technologies you believe the Group already has a competitive edge in and others you think will require more work on your part?
I think the COMSYS Group is best positioned in the categories of IOWN, EHF, and 6G, since these pertain directly to telecom carriers who trust our company when it comes to telecommunications infrastructure work. The COMSYS Group has been able to deliver great work efficiencies when it comes to the area of mobile communications, so I believe the mass deployment of EHF and 6G will really boost sales and profits for us. Earlier, I mentioned how we would be integrating into a unified whole our various on-site capabilities and thus delivering growth.
Nippon COMSYS, in particular, has teams handling infrastructure for both landline service networks as well as mobile networks. About a year ago, we integrated these teams at the headquarters level, thereby securing operational capabilities between the two. Furthermore, we are also working to put in place a system allowing us to share technologies, also with select partner companies. Mass deployment of EHF will really allow our teams handling landline service infrastructures to greatly expand the domains they operate in. In fact, we expect a boom reminiscent of the deployment of PHS infrastructure more than 20 years ago, involving the mass installation of utility poles, payphones, and base towers. The fact that we are already preparing for the mass deployment of EHF represents a tremendous advantage for our company. Another important engineering need will be the inspection and maintenance of aging social infrastructure.
We have a track record in the repair of telecommunications infrastructure. For example, we were involved in infrastructure repair after a sinkhole opened up in Yashio, Saitama Prefecture earlier this year. For example, we started using sensors more than 30 years ago in order to monitor and operate telecommunications infrastructure passing through large tunnels. We have accumulated a great deal of expertise over the years through our operations in the domain of telecommunications infrastructure, so I believe we are very well-positioned to transfer this expertise into the domain of social infrastructure. Furthermore, telecom carriers place great trust in our services, and this trust puts us in a great position to benefit from future trends as these come into fruition. Examples include compact cities and the need to solve social issues, thanks to our extensive on-site application track record.
In other words, companies can entrust us with overseeing construction on-site and also with maintenance and operations after construction is finished, so we are looking forward to these developments. To this end, we want to secure not just construction projects from telecom carriers, but also have them entrust us with a variety of peripheral projects and services. We are working toward this end and want to further solidify our position in these domains.
Thank you for your answer.
Mr. Yagi with Morgan Stanley MUFG Securities will be posing the next question.
My name is Yagi, and I am with Morgan Stanley MUFG Securities. I have two questions for you, the first of which pertains to the MTMP. Specifically, what specific factors do you think will allow the company to improve margins in its three segments of Carrier-Related, IT Solutions, and Social Systems-Related over the course of the new MTMP? Earlier, you mentioned a strategy of smoothing out the peaks and troughs when it comes to infrastructure project volumes. But do you have plans for other elements leading to higher margins, such as, for example, improvements in the project mix? Please share your thoughts with us for each segment. My second question pertains to the topic of M&A. You mentioned a promising outlook from M&A in the Social Systems-Related business.
But could you discuss the kind of M&A targets the company is pursuing and the timeframe for these benefits and synergies to be unlocked? I believe you expect to unlock these two or three years after the acquisition, but since I believe you have taken the right steps over time, maybe these efforts should start materializing before that. In short, I would like to hear your thoughts on the topic of M&A.
Circling back to my earlier response, we look to increase profitability over our entire business landscape, and therefore not exactly on a per segment basis. In addition to this core policy, in the Carrier-Related business, we have many companies in local areas, each responsible for the telecommunications infrastructure in each of these areas. So one of our strategies is to take best practices for these companies and replicate them on a nationwide level. We believe there are still domains left for us to execute this strategy in, so we will do so to improve profitability. Additionally, we will now be integrating projects we would previously carry out through individual companies in these local areas. For example, we can integrate quality control inspection and the handling of any issues that might arise on-site through joint teams for these specific functions, as opposed to each company having its own dedicated team.
In fact, under a common technical base, we only really require a single location. In short, we seek to improve efficiency through these integration efforts. Another important aspect is management at our corporate partners. This is especially important when it comes to telecommunications infrastructure because this business requires us to mobilize teams for repairs as quickly as possible the moment something stops working. As such, our everyday relationship with these partners and the division of roles and responsibilities becomes imperative. This could involve, for example, prime contractors delegating some work responsibility to partner companies and to on-site teams from joint venture subsidiaries. This allows us to unlock efficiencies, and we are working to further enhance these efforts. In the IT solutions segment, we are working to adopt a standardized system for the over 17,000 employees and over 60 consolidated subsidiaries that comprise the COMSYS Group.
This is a cloud-based system developed in-house, and we will be leveraging our learnings from this initiative to offer a similar system to other companies we believe will be facing challenges in the future, thus growing our business. Additionally, we want the Carrier-Related business to handle as much of the on-site work as possible, allowing IT Solutions employees to move to monetization layers with higher profit margins. Lastly, many of the projects in the Social System-Related business are bidding projects. Here, we want to work together with a multitude of companies to further build our track record and carry out environmental initiatives and initiatives to offer employees better working conditions. This all counts toward our technical merit, as do initiatives to integrate DX into on-site operations. We will therefore work to improve our competitiveness while showing favorable terms in the bidding process.
In summary, we will be executing these various measures in order to improve profitability. Next, allow me to answer your question on the topic of M&A. As you mentioned, we have carried out a number of M&A deals. We have plotted the combined results of post-M&A growth in the sectors of gas and steel, which constitute vital social infrastructure. That said, we have carried out many other M&A deals as well. In broad terms, we have three key approaches to M&A. In particular, the COMSYS Group handles projects with tremendous social value and has a very close relationship with local communities. We are therefore looking for companies that share this corporate culture so that we can work together, and we still have a long list of potential partners to choose from. Second, there is tremendous competition for talent in the domain of IT.
Compared to the Social System-Related business, it takes longer for companies acquired through M&A in the domain of IT to make a sales and profit contribution. Against this backdrop, it makes sense for us to partner up with companies, also as a way for us to secure talent, which is necessary for us to grow our IT business. Third, many of the companies and partner companies offering support to on-site operations by telecom carriers are actually rather small, which makes their continued operations over the long- term rather difficult. Joining the COMSYS Group is therefore a viable option for these types of companies. In short, we have three key approaches to M&A, but fundamentally, the selection criteria is the target company's ability to further grow and/or support the business or to unlock synergies with us.
As such, the purpose here isn't to fill some specific amount quota in investment terms, but rather to focus on whether we believe a particular acquisition will be accretive to our group or not.
When will development end for the in-house cloud-based system, and what is your timeline for offering this product to clients?
We will start in-group deployment of this system on a limited basis in the fiscal year ending March 2026 and are hoping to execute a full-scale group migration over a three to four-year period. As we wrote here, we will be offering this system to clients through TOSYS, which is a business dedicated to helping clients install and use services and products. Additionally, we're always open to the idea of integrating into the solutions we offer specific needs and requests. Although we believe it will take a little bit longer before we can offer nationwide deployment of this system, codifying the insights and expertise we obtained through trial and error and much effort on our own.
Thank you for your answer.
Mr. Kawashima with SMBC Nikko Securities will be posing the next question.
My name is Kawashima, and I'm with SMBC Nikko Securities. I have two brief questions for you. The gross profit margin forecast for the fiscal year ending March 2026 is flat on a year-on-year basis. However, looking at the targets for each operating company on page 42, it would appear that you expect lower gross profits for construction subsidiaries and higher gross profits for subsidiaries in the IT business. What is the reason for this? I'm referring to companies like Nippon COMSYS and SANCOM.
The reason we expect Nippon COMSYS to experience some difficulties is listed on page 12. Nippon COMSYS saw tremendous growth from Social System-Related projects in the fiscal year ended March 2025, to such an extent that these results vastly exceed anything seen in previous years. This makes for a tough year-on-year comparison in the fiscal year ending March 2026, which is why we are guiding for a year-on-year decrease in profits. During the NTT Group's earnings presentation last week, the company revealed its plan to continue ramping- up investment. That said, SANWA COMSYS Engineering has delivered sales growth over the years, primarily thanks to projects from SoftBank, KDDI, and Rakuten, and as it stands, these telecom carriers don't have plans to ramp- up investment by all that much. We therefore expect this dynamic to weigh down on results for SANWA COMSYS Engineering.
My second question pertains to the COMSYS Group 2030 Vision. Within this scope, could you share with us the areas where the company hopes to differentiate itself from the competition and some areas you consider to be the company's competitive advantages? Amidst growing volume for mobile communication infrastructure projects, the COMSYS Group really achieved prominence as a leading company in this space. However, volume from these infrastructure projects has decreased, and the relative weighting of projects from clients outside the telecom carrier industry has gone up. Additionally, a gap has also emerged in terms of M&A strategy. The EXEO Group is guiding for a higher operating profit, while MIRAIT ONE has executed some high-profile M&A deals and is now catching up and finding its unique market edge. Against this backdrop, what would you say is the COMSYS Group's competitive advantage, and what makes the company attractive to investors?
That is a very good question. Naturally, I believe this comes down to a matter of perspective and perception. While this is the kind of intangible element that is hard to convey to investors, I believe our greatest strength lies in the sheer trustworthiness of our members who oversee on-site operations and their steady and diligent work ethic. We believe this trust to be a foundational aspect of our group, and indeed, one that extends beyond the on-site level. I view this as our greatest strength, but I am aware of the fact investors probably do not consider this enough to outshine the two competitors you mentioned in your question. We want to leverage this great strength to drive growth and become a leading company capable of addressing our clients' needs, whether it is for, say, urgent repair needs or the execution of new projects.
We want our clients to count on our services and our ability to offer these services on a nationwide basis. The COMSYS Group has many talented and highly qualified personnel. Furthermore, we seek to continue training employees to the highest standards, so we want to convey this reality to society at large, creating a positive feedback loop, allowing us to continue boosting our brand value. In summary, it is hard to give you a concrete answer, but I think the general idea is as I just described.
Mr. Teraoka with Daiwa Securities will be posing the last question.
My name is Teraoka, and I am with Daiwa Securities. I have one question. The new MTMP covers a six-year period, starting with a slight operating profit decline for the fiscal year ending March 2026. Could you share with us your thoughts in terms of the slope of the trajectory toward the company's operating profit target of at least JPY 60 billion by the fiscal year ending March 2031? Specifically, should we expect growth to accelerate all at once toward the latter half of the MTMP, or will this be a more gradual and constant process, starting with an operating profit recovery next fiscal year? Additionally, within the various emerging technologies listed on page 28, like IOWN, EHF, 6G, et cetera, which ones do you think will see mass deployment during the period corresponding to the new MTMP?
In terms of the projected growth trajectory over this six-year period, it should be noted that we are considering acquisitions through M&A and already have several potential targets. Naturally, whether these will come to fruition or not within the next one or two years is still unknown. All the more since this is not a unilateral decision and is therefore also dependent on the parties to be acquired. We put the expected benefits from M&A at approximately JPY 50 billion, and we expect these to materialize around 2029 or 2030. In summary, we expect the other parts of the business to continue at cruising speed, with the benefits from efficiency improvements and strong sales efforts added on top.
We then expect to be able to deliver non-organic growth over the last two years of the MTMP through the execution of M&A, although naturally, we will work to speed up the M&A portion of the plan in whatever ways we can. There have been a number of IOWN and EHF implementations, but in terms of the mass deployment of infrastructure for these technologies, as it pertains to IOWN, for example, the plan is to create a nationwide network over the next number of years going forward. I believe this network really becomes valuable once a backbone is in place and multi-conductor cables are laid out across Japan, connecting end users with IOWN and also using this technological concept for other purposes, like extracting information from a variety of basic social infrastructures.
I believe it will take a while before we see deployment at this scale. In summary, I expect these efforts to come to the forefront in the 2030s. Regarding EHF, we are currently helping mobile carriers expand their sub-6 GHz infrastructure efforts. Looking at trade shows like MWC and CES dedicated to the mobile communications industry, I believe it will probably take a little longer before we see end devices and services made possible by EHF. That said, the rollout of 4G happened all at once with the widespread adoption of smartphones and new breakthroughs, services, apps, and end devices could come out any day now.
In summary, while we do not currently expect any specific services made possible by EHF to come out over the next number of years, we are certain these products will come into the market at some point in the future, probably the 2030s at the latest.
The graph on page 28 shows an upward slope starting around the middle point of the first half of the MTMP period for the carrier-related business and running through to the fiscal year ending March 2031. What do you expect will happen around this timeframe?
When we formulated COMSYS Vision: Next Stage 2023+1, we assumed there would be explosive growth from 5G EHF. As I went over just now, this has not really been the case. This has weighed down on results in the Carrier-Related business and hampered our ability to grow net sales and operating profit. That said, circling back to what I said earlier, there are plenty of opportunities in the area of telecommunications. We want to capture new demand here and also in areas like maintenance and delivery. In summary, we believe doing this will allow us to grow the volume of projects for telecom carriers. This is a strategy we will continue to pursue going forward. NTT DOCOMO has announced investment in infrastructure to deliver quality improvements to users.
Additionally, NTT East and West continue efforts to generate further demand for fiber optic, including through its real estate development arm. As such, while we do expect more and more demand on this front, it will take some time for these efforts to reach critical mass. We expect these developments to play out gradually over a period of time.
Thank you for your answer.
It would appear there are no further questions, so allow us to close today's financial results presentation for COMSYS Holdings for the Fiscal Year Ended March 2025. Thank you for taking the time off your busy schedules to view today's presentation.