Investor Day 2025

Dec 19, 2025

Slides

Summary

Cybersecurity sales exceeded JPY 150bn last year, with further growth supported by market expansion and a JPY 50bn–80bn FY2025–FY2027 investment plan. Strategy emphasizes proprietary services, global reach and recurring revenue, alongside investment in talent and culture.

Good afternoon. Thank you very much for taking time out of your busy schedule today to attend Macnica Holdings' very first Investor Day event. My name is Nonaka, and I will serve as the moderator today. The purpose of this event is to provide investors with a better understanding of Macnica's cybersecurity business, a topic of their great interest, as well as our unique human capital base and corporate culture. We hope that this event will give you a sense of Macnica's future potential. This is how we will proceed today. At the end of the session, we will have time for Q&A. If you have any questions, please feel free to submit them using the question form at the bottom of the screen. Without further ado, let's get started on part one, the opening remark. The speaker for part one will be Kazumasa Hara, Representative Director and President of Macnica Holdings Incorporated. Please welcome Mr. Hara. Good afternoon, everyone. Thank you all very much for taking time out of your busy schedule today to join our Investor Day. This is the first time we are holding this event, and we would like to introduce our cybersecurity business, which is of particular interest to our investors, and the human capital that supports our growth. We hope that the content of today's presentation will help you deepen your understanding of our company. Before the business owners present on our cybersecurity business, I would like to start by explaining the positioning of this business. As pillars of the revenue, Macnica is currently operating with two business segments as a technology trading company, the semiconductor business and the cybersecurity business. While there are some differences between the two businesses in terms of customer sales channels, both feature the value-added distribution model that has been in place since our founding. We call this value-added distribution, or VAD for short. VAD is a business model in which our professional engineers, accounting for about 30% of the total workforce, provide technical support in design, development, and implementation of cutting-edge technology product from our suppliers, thereby offering value-added services to our customers. Both businesses have grown substantially under the high value-added distribution model. The semiconductor business has contributed significantly to the group's earnings growth to date based on its overwhelming share of the domestic market and stable profitability. Furthermore, recognition and social importance of semiconductor itself have grown. I believe that investors have a pretty good understanding of our semiconductor business. Today, our presentation will be focused on the cybersecurity business, which is enjoying faster sales growth and better margin profile. How do we achieve better profitability with a cybersecurity business? As exemplified by the smartphones in your hands and the cloud service usage, information and communication technology continues to evolve, and the way technologies are being used also goes through changes. In a world where the IT environment for corporates is dynamically changing, the necessity and importance of cybersecurity is increasing rapidly. Not only that, but new cybersecurity-related startups with cutting-edge technologies are emerging one after another in order to respond to these changes. The technologies offered by these companies are not yet widely known, and their marketing power in Japan and the countries in which we operate is limited. This means that Macnica has a lot of room to add technological value and propose and provide new value to its customers, resulting in high profitability. The chart on the left shows the trends in operating profit for both businesses. In recent years, the share of operating profit generated by our cybersecurity business has been steadily increasing. Compared to the semiconductor business, which is susceptible to market fluctuations, the cybersecurity business operates in a highly promising market and remains in a growth phase, enabling relatively stable and sustainable growth. This difference is also reflected in valuations, as shown in the chart on the right. Semiconductor distributors tend to have lower multiples due to their exposure to market cycles. Whereas IT solution providers are valued more highly because they are expected to deliver stable profit growth. Although our valuation is somewhat higher than that of other semiconductor distributors, it has not yet reached the level of IT companies. Therefore, by further strengthening our cybersecurity business, we aim to establish a business structure capable of stable profit growth, ultimately leading to higher valuations. For this reason, we intend to continue making proactive investments in the cybersecurity business. We plan to invest as a whole between JPY 50 billion-JPY 80 billion in growth initiatives over the three years of our current midterm plan from FY 2025 to FY 2027, funded by profit generated from our core semiconductor and cybersecurity businesses, as well as by borrowings. Approximately half of this amount will be allocated to developing and acquiring proprietary services and solutions in the cybersecurity business and in the newly launched CPS solutions business. Until now, our growth has come from adding technical value to things, namely in the semiconductor and hardware and cybersecurity software. Going forward, we aim to transform our business model to one that creates and delivers value itself. In other words, by providing services and solutions rather than just products, we seek to further enhance our profitability. In today's seminar, we will begin with an overview of cybersecurity business, followed by a discussion of Macnica's unique human capital, which underpins its growth. Macnica owns very few IP assets or physical facilities. Our business growth to date has been driven almost entirely by our people. Put simply, we are a company equipped with strong dynamic capabilities, the ability to adapt flexibly to changing environments. Today, we will explore what makes Macnica truly unique compared to other companies and how investors can recognize those differences through a conversation with OpenWork, who has extensive data based on reviews and feedback from our employees and alumni. Since today's seminar focuses on our cybersecurity business and human capital, some parts may be somewhat difficult to follow for those who are learning about Macnica for the first time. We have on-demand videos and transcripts from the past briefing sessions available, so please make the best use of them as well. We particularly recommend the briefing for individual investors, which provides an easy-to-understand overview of Macnica's business and investor information, as well as the seminar featuring the Chairperson of the Board of CrowdStrike Holdings, our largest supplier in the cybersecurity business. Now, let us move on to the main contents of today's seminar, presented by the respective business leaders. We do hope that today's session is going to help you to gain an even deeper understanding of Macnica. Thank you very much, Mr. Hara. We will now move on to the second part, Macnica's sustainable growth story, trusted by the cybersecurity market. For part 2, we have two speakers. First speaker is Yusuke Kobayashi, President of Macnica Networks Company. Mr. Kobayashi has been in his current position since 2021, and this will be his first time to speak at an investor event. The second speaker is Yutaka Sejiyama, Chief Engineering Specialist of Macnica Security Research Center. Mr. Sejiyama works at Macnica Security Research Center, where he investigates the reality of cyberattacks against Japanese companies and provides information on countermeasures. He has also made more than 100 appearances and comments on security incidents in domestic and international media. In this part, Mr. Kobayashi will first explain the current status and growth strategy of Macnica's cybersecurity business, as well as the recent cybersecurity market trend. Next, Mr. Sejiyama will explain the reality of cyberattacks. Lastly, Mr. Kobayashi will speak again on Macnica's position and value in the security market. Now, I'll hand over to you, Mr. Kobayashi. Thank you for the introduction. My name is Kobayashi from Macnica. We have steadily expanded our cybersecurity business driven by the overwhelming growth potential, and last year we achieved global sales of JPY 150 billion, making us one of the leading specialized distributors in Japan. I will now explain the current status and future growth strategy of our cybersecurity business. For more than 20 years, we have been expanding our business as a high value-added distributor, discovering cutting-edge technologies from around the world and delivering them together with our technical services. As the number 1 distributor in the Japanese market, we have led the introduction of many products. We support a wide range of customers, from private companies to government agencies and municipalities, by offering the best solutions for their challenges from our extensive product lineup. Our engineers, who account for about half of our workforce, not only provide product, but also offer our proprietary services from upstream services such as consulting to implementation and operation, as well as contingency incident response support. In addition, Macnica Security Research Center, established in 2013, has been analyzing the threats targeting Japanese companies on a daily basis and accumulated a wealth of threat information and technical knowledge. The latest information gathered from Japan and overseas is reflected in our own services and tools, which continue to evolve. Furthermore, we actively contribute to society by speaking at expert conferences in Japan and abroad and acting as a security advisor for government agencies. In recent years, we have also focused on the development of proprietary services that leverage these technological capabilities. One of these services, Macnica ASM, or Attack Surface Management, is a service for early detection of risks by identifying vulnerabilities in servers and cloud computing that corporate IT departments are unaware of, determining the degree of risk, and visualizing the points that need to be fixed. The service boasts the number 1 market share in Japan for 3 consecutive years. The development and operation of this service also draws on the knowledge gained through daily analysis of threat trends by the Security Research Center, leading to improved detection and analysis quality based on the latest tactics used by attackers. At the same time, Macnica operates in 24 countries and regions overseas and is still expanding faster than the market growth rate, owing to stronger demand and expanded coverage. In APAC, Macnica operates the value-added distribution business in 11 countries, including India. Netpoleon, which became part of the Macnica Group through M&A in FY 2017, serves as a core entity and provides cutting-edge security solutions to local companies in each market. The business is expected to grow in the future, fueled by solid market growth. Furthermore, we have built the structure to cover 12 countries in the Middle East and Africa by reaching an agreement to acquire UAE-headquartered CyberKnight in FY 2022. This has enabled us to strengthen our competitiveness as a global cybersecurity distributor covering Japan, Asia, the Middle East, and Africa. Let's quickly reflect on the numbers. Under the previous mid-term management plan from FY 2021 to 2024, the cybersecurity business achieved a CAGR of 22.8% in terms of net sales. As I mentioned at the beginning, it has grown to a scale exceeding JPY 150 billion last year. In Japan, we are steadily expanding our business in collaboration with many sales partners from large corporates and government agencies to medium-sized companies. At the same time, the overseas sales are also growing, mainly in Southeast Asia, accounting for 34% of our total sales. The company has enjoyed further growth in the first half of FY 2025, with operating income up 22% year on year. Both net sales and profits remain strong in Japan and overseas. Now, I'd like to take a few moments from here to talk about the recent trend and development in the cybersecurity market. First, this is the growth outlook for the cybersecurity market based on Gartner's research. The Japanese market is expected to grow from $4.6 billion in 2024 to about $7.8 billion, or about JPY 1.2 trillion in 2029, with a high CAGR of 11%. Gartner also expects the market to continue to grow steadily. The Asia-Pacific market is also expected to expand to approximately $13 billion by 2029, also growing at a CAGR of 11.2%, growing faster than Japan. Thus, we can see that the demand for cybersecurity will increase further, not only in Japan but also in Asia as a whole. There are various reasons behind the rapid market growth, and one of them is the tighter laws and regulations, which I would like to share with you. For example, the Cyber Resilience Act enacted in the EU requires companies that provide products and software to implement security measures from the design stage. This still has a significant impact on the Japanese manufacturing industry. In response, the introduction of countermeasure solutions is progressing. In Japan, the Active Cyber Defense Law has been enacted, which requires the government and critical infrastructure providers to take more proactive measures against cyberattacks and to have a reporting system for damage information. The companies in the supply chain are also required to improve their security level. In addition, the acceleration of DX due to the rapid adoption of AI and other factors is also creating new risks. The range of threats that companies need to anticipate is expanding more than ever, and the number of points that need to be protected is dramatically increasing, not only in offices but also in factories, cloud environments, among others. We are entering an era in which how to ensure security will determine the company's growth and competitiveness. Another reason why the demand for security will continue to rise is that a major change is occurring on the attacker's side. For more details, I will hand over to Mr. Sejiyama from the Security Research Center, who conducts daily security research and has appeared in many media. The floor is yours, Mr. Sejiyama. Yes, in addition to the legal regulations and the market forecast explained by Mr. Kobayashi as the reasons for the ever-increasing demand for security, there is a more obvious reason on the dark side. Recently, the cyberattack groups are rapidly becoming more organized and structured, and the attacks are now being conducted like a business by sophisticated organizations. In just the past few years, thousands of companies have sprung up around the world that specialize in cyberattacks, and they are now actively attacking companies. Take ransomware, for example. This is when the attacker goes after a company, encrypts its data, and demands a ransom in return for the data decryption and threatens to release the stolen data to the public if payment is not made. Ransomware is also becoming very commercialized. This slide illustrates how they would operate. First, the criminal organization finds a way into the target company and sells the information to others for a price that corresponds with the size of the company. The attack execution group that buys the information uses tools and know-how provided from another organization to carry out the attack and encrypt the company's systems. The relationship is similar to that of a food delivery system provider and the delivery person who actually delivers the food to each home. When the victim company pays the ransom, the tool developer gets 10%-30% of the profit, and the attacker gets the remaining 70%-90%. Each group is organized like a corporation with a CEO, tool developer, staff to support the victim company's ransom payment, financial staff, recruiters to hire the perpetrators, legal staff, and so on. In addition, there is a well-developed manual for carrying out the attacks and threats, and attacks on large influential companies are only possible with the approval of the CEO. They also have a recruiting website that describes the necessary skills. As such, they operate just like a corporation. Since the beginning of this year, there have been announcements of mergers and acquisitions of groups like this and business alliances to share know-how and infrastructure, with the aim of further expanding the scale of operations. Given this backdrop, the number of the ransom incidents unfortunately shows no sign of declining. This chart shows the number of externally observable ransom victims as of October. This many incidents have already been recorded, and although data for the full year is still being compiled, it is almost certain that we will surpass last year's record high. Moreover, there is an enormous volume of cases that do not appear in public data. We estimate that the actual number could be several to more than 10 times, probably over 100,000 incidents globally. Not every case results in the severe damage seen in the major incidents reported in Japan, but the fact that cyber attacks with such destructive potential are occurring at this scale is, quite simply, an abnormal situation. You may wonder why, despite the sheer number of attacks, the damage is not decreasing. What are the companies doing? The reality is that difficulty of defending one's organization is increasing year by year. The reason is that the areas companies must defend and the number of the vulnerable points within them have grown explosively. To put it very simply, up until around 2018, companies merely needed to pay attention to three points, suspicious USB drives, emails, and websites. Attackers have expanded the range of their methods through constant innovation. The number of points to manage has also expanded. In your daily lives, the number of digital devices, smartphones, PCs, and tablets, and the SaaS or the websites you use has multiplied in recent years. In corporate environments, this increase is even more dramatic. With so many more points to cover, it is inevitable that gaps in defense emerge. As NHK and Asahi Shimbun reported last month, our independent research identified at least 50,000 vulnerable points within Japan alone that could serve as ransomware entry paths. On top of this, with the rise of AI, attacks will only become more intense, as many of you may expect. Attackers are currently experimenting aggressively, and we are already seeing actual attacks that incorporate AI. Media coverage tends to focus on AI eliminating Japanese language barriers, enabling more sophisticated polished phishing emails, or helping generate malware. I do not personally believe that this is going to be the case. What is far more concerning is that AI now supports human attackers. A single attacker who previously could target only one organization at a time can now attack five or 10 organizations simultaneously using the same resources. AI is also actually being used once inside a company, helping attackers quickly determine which systems would cause the most damage or identify valuable information by sifting efficiently through the massive volumes of Japanese documents. This is already happening and is a significant threat. While it hasn't happened yet, I believe it won't be long before AI discovers entirely new hacking methods beyond human imagination. Furthermore, individuals on the attacking side are highly skilled in IT and security. Backed by abundant funding and resources, they continuously launch sophisticated attacks one after another. Meanwhile, on the defensive side, particularly in Japan and Southeast Asia, very few organizations have dedicated security experts. Security roles are often assigned together with other responsibilities, and frequent job rotations make it rather difficult to accumulate skills and know-how. This is a structure-related problem. The reality is that the difference between attackers and defenders is just like a major league baseball team versus a neighborhood amateur team in terms of capability and resources. To summarize the discussion so far, professional threat actors are launching an increasing number of sophisticated attacks powered by commercialization and the use of AI. In this environment, organizations must address not only the attacks themselves but also the growing skill gaps. As a result, the need for a wide range of security services and professional support to prevent such attacks continues to rise. This concludes my section. Thank you, Sejiyama-san. I believe this has given you at least a glimpse into the reality of the threat actors today. At Macnica, our mission is to help close the skill gap between attackers and enterprises and support our customers in addressing these challenges. At this point, I would like to once again highlight Macnica's position and the value we can offer to you. Our biggest strength is our capability to identify cutting-edge technologies. Led by our sourcing team based in the U.S., we research over 1,200 startups and technology companies each year and conduct direct discussions and evaluations with more than 150 of them. By leveraging our network of key figures and investors in cybersecurity, both at home and abroad, we are able to connect early with the promising startups that are still relatively unknown in Japan. For example, in the case of CrowdStrike, which has grown into a global industry leader, we leveraged the personal network we had built through our prior partnership in SafeBoot. In 2013, just two years after CrowdStrike was founded, we secured the world's first distributor agreement. This became the foundation for achieving our dominant market share in Japan. Now we are actually continuously offering high-value solutions out of these networks. Through these longstanding efforts, we have developed a strong ability to accurately understand the customer needs and the market changes. One of Macnica's major competitive advantages. First, we have a deep understanding of the unique challenges and initiatives across each customer. Insights gained not only merely from the end products, but also through years of working closely alongside end users. Furthermore, through numerous projects, we have established best practices in deployment operations and talent development, which we are able to offer as practical knowledge. We have also built a strong ecosystem with many partner companies, enabling us to propose optimal solutions tailored to each customer's characteristics. We are going to meet with the two needs of the Japanese customers. We also now place great emphasis on analyzing threat trends, offering the practical insights into the risks and the rationale behind each product. Perhaps most importantly, our relationships with the exclusive and global leaders at the world's top security vendors are our major asset. One vendor even told us, "Partnering with Macnica is our strategy." There is a positive cycle where our customers choose Macnica because of our deep understanding of security and our unmatched technical expertise. It is something we like to intend to accelerate even further. Lastly, I would like to briefly revisit the key strategies for our cybersecurity business under the current mid-term management plan. The first strategy is expanding our core high value-added distribution model. In addition to driving the further growth of our flagship products, we will continue identifying new vendors that will become future revenue pillars and accelerate its market entry. The second strategy is to strengthen our global expansion by continuing to onboard new security vendors, consolidate the supplier relationship globally, and deploying the technical expertise we have developed in Japan. We aim to enhance our competitiveness as a global distributor with world-class strength. The third strategy is enhancing our managed and operational support services. As Mr. Sejiyama mentioned earlier, many companies today face severe shortage of security talent, making it rather difficult to maintain adequate protection simply by implementing products. In order to address this, Macnica is expanding monitoring and operational support services in order to reduce customer burden, to ensure continuous product usage and build a stable and recurring revenue foundation. Finally, in addition to our traditional distribution model, we are now strengthening our in-house services and solution offerings in order to improve profitability and drive sustainable business growth. Among those, our Macnica ASM service, which is already highly appreciated in the Japanese market, will be the core of high-value, high-profit business that delivers a genuine value-add to Japan Origin security service. Lastly, as widely covered in the recent media reports, cybersecurity risk has become a critical management issue that directly impacts corporate growth and continuity. With the threats increasing exponentially and becoming more sophisticated through AI, organizations are required to take a multilayered and continuing operational approach. Macnica aims to transform cybersecurity from a cost of protection into a driver of business acceleration. By doing so, we like to support corporate growth, contribute to the safety of our customers and society, and position ourselves as the most trusted partner of choice in the cybersecurity field. We like to remain committed to strengthening our competitiveness in expanding market and contributing to both business growth and corporate value. This concludes my remarks. Thank you indeed for your kind attention. Thank you, Mr. Kobayashi and Mr. Sejiyama. Before moving on to part three, our session on people and corporate culture, I would like to show you our company introduction video. What kind of image do you have about Macnica? Through this video, we hope you will get a sense of our corporate culture and the passion of the people who work here. With that, please enjoy the video. 最先端の技術とか、いつも新しいことなどにチャレンジして、常に進化している会社だと思います。負けず嫌いの人の塊みたいな。かといって、気を落とすんじゃなくて、それぞれが高め合うっていうか。「明るく、楽しく、元気よく」っていう、本当に小学生が言っているような、「これを大事にしよう」って謳っているところが、本当に浸透しているなと。やっぱり仕事しやすいのかなって思いますね。呼び方も「何々さん」っていう呼び方なので、思ったことは部長だから言えないとか、そういうのはあまりないですね。やっぱりよく言われるのは権限委譲というか、若手時代からどんどん仕事を任せてもらって、それでどんどん成長していく会社かなと。「あれをやっちゃダメ、これやっちゃダメ」みたいなところって多いと思うんですよね。それがあまりない。海外で働きたい、海外の仕事がしたいというのがあったので、それができる会社だと思って入社しました。自分のモチベーションを自然と上げてくれるというか、周りから受ける刺激が多いっていうんですかね。大変です。先々の戦略とかを作らないといけないし、いろんな方面の情報を入手して完成させるっていうのが、ちょっと苦労しますね。苦しい分、すごい楽しかったりするし。「これ採用します」っていう一言が嬉しいですね。「ありがとうございます！」という感じでやります。未来の農業に間違いなく貢献できるところが一番のやりがいですね。やっぱり重要だと思うのは、まずチャレンジすること。必ずやらないよりかはやった方がいい。失敗した時というのはやり直せるんですね。リカバリーができると。Macnicaはそういうことができる。入ってできることも多いし、成長することも多いし、大変なことも多いと思うんですけど、1人じゃないので後悔しないと思います。ぜひ今からでも。ぜひ。今の子供たちが大きくなった未来の時に、何か役立てる仕事がしたいなと思って、それに向かって今から種をまきたいです。 What did you think about the video? Now let's move on to the third part. In collaboration with OpenWork, ranked 5th among the Best Companies to Work For 2025, Macnica continues to grow with its people. First, let me introduce the two speakers. First, Ichiro Hotta, General Manager of Human Resources Group at Macnica. He joined Macnica in 2023 as General Manager of Human Resources Division after working for a general electronics manufacturer, and then as the Head of HR for a semiconductor manufacturer and a healthcare company. Throughout his career, he served in many positions in the field of HR, both in Japan and overseas, including Germany and the U.S. Next is Ren Kurimoto, Executive Officer and CSO of OpenWork. After working at Dentsu and Boston Consulting, he joined OpenWork in 2023 and was appointed as the Executive Officer in April 2024. Currently, he is in charge of formulating mid- to long-term management plans and strategies, as well as overseeing new businesses. In this part, Mr. Hotta will first give a brief explanation of Macnica's approach to human capital. Next, Mr. Kurimoto from OpenWork will give an overview of OpenWork's corporate profile and the Best Companies to Work For ranking, which is also the title of this section. After that, Mr. Hotta and Mr. Kurimoto will talk about the Best Companies to Work For ranking and Macnica's corporate culture in depth. First, Mr. Hotta, the floor is yours. Thank you for the introduction. My name is Hotta from Macnica. First, our philosophy on people is repeatedly referred to in our management policy document that has been handed down from generation to generation, and in the book Essence of Management, written by our founder, Mr. Kamiyama. One phrase that clearly illustrates this is, "Everything begins and ends with people." Macnica has embraced the founder's concept and has been maximizing its human capital, regarding people as its most important asset and management capital. Based on that philosophy are the core values that we call TEAMS, the unique values that we cherish. There's also the Purpose, which redefines who we are and why Macnica exists. They serve as the foundations of Macnica for our human capital and organizational strategies. Maximizing human capital is essential not only for the realization of Vision 2030, but also for the sustainable growth of the company and the enhancement of corporate value. In order to achieve this, we are focusing on the following themes. Recruiting new talent, wellbeing, health management, DE&I. Further upgrading the HR system and work style reform. Thank you very much, Mr. Hotta. Next, Mr. Kurimoto from OpenWork will give us an overview of OpenWork and its Best Companies to Work For ranking, in which Macnica was ranked fifth last year. Also, I will hand over to you, Mr. Kurimoto. Thank you for your kind introduction. My name's Kurimoto, and I am the Executive Officer and CSO of OpenWork. Thank you for inviting me to speak today. First, let me briefly introduce our company. OpenWork was founded in 2007 and was listed on the Growth Market in 2022. We operate one of Japan's largest data platforms for employee reviews and corporate assessment scores called OpenWork. Let me also briefly touch upon the platform OpenWork. We have a total of 7.58 million registered users and 20.1 million employee reviews, widely used by many people. Once becoming a member, you will be able to view company evaluation scores on a five-point scale, as well as reviews with real opinions from the existing and former employees. In particular, the employee reviews are a true projection of the actual voices of employees, both current and retired. Please take a look at your convenient time. From here, I would like to talk about the Best Companies to Work For ranking that was mentioned earlier. Macnica achieved good result. This is an initiative to compile the comments from the current and former employees posted on OpenWork and to announce the best workplace ranking as rated by these employees. This initiative has been ongoing for about 10 years. As mentioned earlier, the ranking is based solely on the company's reviews of current and former employees, and neither the company nor we could alter the results. Our goal is to award companies that receive high evaluations from their employees during the year in a way that reflects the true voices of the workforce. Thank you, Mr. Kurimoto. We will now move on to the fireside chat between Mr. Hotta, General Manager of Macnica's Human Resources Division, and Mr. Kurimoto from OpenWork. Here, we will continue on the topic of the Best Companies to Work For ranking in Macnica's corporate culture. First, we would like to ask about the Best Companies to Work For 2025 ranking, in which Macnica was ranked fifth. Macnica was ranked fifth this time. What is your opinion about this result from OpenWork's perspective? Well, although the total number of the companies ranked is not disclosed, Macnica's fifth place is an extremely high ranking. In 2023, Macnica was ranked as number 40, and this is already impressive. Yet, improving the ranking further to as high as fifth is truly amazing. I see. Mr. Hotta, you actually checked Macnica's evaluation score, which is shared on OpenWork website. Is that correct? Yes. I checked Macnica's company review score, and I got the impression that the overall score was good and that probably led to this high ranking. Also, Mr. Kurimoto, was there anything that was unique to Macnica with this current ranking? Yes. The overall evaluation score is 4.18, which is within the top 1% of all companies, an extremely high level. The score has eight components, and observing each item, the two items of openness and chance to grow for young employees are those in the 20s have extremely high scores. The score of more than 4.5 points is a level that is not often seen on our website, and I commend this as a very high evaluation. I am very happy to hear that. Thank you very much. If I may take this opportunity to ask one more question, do you have any data that compares your score with the average score of industries that are comparable to the cybersecurity business, which was explained earlier in the previous part? Sure. For the comparison, I chose the SIer industry as a business with close proximity to cybersecurity business. Here, you can see the difference in the scores. Macnica's overall score is high, but overtime hours and paid leave utilization rate tend to be a little lower compared to the average of SI industry. Employee motivation and organizational openness, which we deem as indicators for corporate culture, are quite high compared to the SIers industry as a whole. Thank you very much. In addition to being ranked fifth in the Best Companies to Work For ranking, we have learned that Macnica is also highly rated based on employees' company reviews. By the way, Mr. Hotta, how did you frankly feel about being ranked fifth in the Best Companies to Work For? I think it is a great honor to be ranked fifth out of so many companies, but I must admit that I do feel a little bit disappointed. Given the products, services, and solutions we offer, as well as being active in many parts of the economy for our Vision 2030, I believe that employees would be motivated to work for Macnica. In addition, we have always been particularly focused on employee satisfaction and sense of fulfillment. So I very much have liked to see Macnica in the number one position, but I guess that will be our homework for the future. I see. You feel that there is still room for improvement, even with a high ranking of number 5. Mr. Hotta, do you feel any positive impact from the high employee motivation you are observing in the company? Yes. A motivating work environment means a sense of growth, appropriate compensation, and a vibrant workplace. I believe that a rewarding work environment is a place where employees can feel their own value through these 3 factors. When employees feel motivated, the strength of the organization increases, and the company provides opportunities for new challenges and a better environment to promote further happiness and growth, creating a virtuous cycle. To underpin this cycle, Macnica has the institutional and cultural support for the growth of human capital. I believe that the results of these efforts have been the driving force behind Macnica's growth trajectory to date. I see. The human capital development and employee motivation are also linked to the growth of the company. At the same time, however, recently, there is a growing awareness of the importance of work environment. I think this is a topic that the audience is also interested in. What are your thoughts on this topic, Mr. Hotta? I think that a good working environment means an environment where each individual can develop their skills and take on new challenges. In terms of the intangibles, as we discussed, I would say that a culture of openness or psychological security and acceptance of failure would contribute to a good working environment. On the tangible side, whether the company has a system that allows employees to work according to their individual circumstances, such as childcare, nursing care, or whether the office environment is designed from the perspective of employees would be the key. By the way, Mr. Kurimoto, what should we check when we look for indicators of employee motivation and work environment on OpenWork's company review page? Yes, thank you for the question. First of all, as you can see on the screen, you cannot do a search by those exact phrases like employee motivation or work environment, but we have a similar function to check the ranking by evaluation score available on the OpenWork page. The contents projected on the screen are what you would see on the actual website. For example, the items that would be similar to employee motivation are motivation, chance to grow for young people in their 20s, and employee evaluation system. While the items that would be similar to working environment are compliance, average overtime hours, and paid leave utilization rate. The evaluation scores can be sorted by each item, and we hope that you will find it useful. Thank you very much. Moving on, I would like to now take a closer look at what Macnica's corporate culture is really like. To begin, based on OpenWork's reviews and evaluation data, are there any notable characteristics or trends you see in Macnica's organizational culture? Thank you. Before I introduce Macnica's characteristics, let me briefly explain the contents I would like to be referring to. Our company now provides a service called an employee review report, which analyzes data to identify characteristics and trends visible in employees' reviews. For this report, each review is analyzed by AI, and the results are provided to companies as insights into employees' honest opinions. Today, we have extracted a portion of that analysis specifically for Macnica based on employee review comments. Here are the results shown in this word cloud. As you can see, it aggregates comments related to organizational culture at Macnica, and the most frequently appearing phrases are displayed in large text. As you can see, open and transparent communication appears at the center in the largest size and is highlighted in red. You can also observe many surrounding phrases related to growth opportunities, autonomy, and empowerment. Mr. Hotta, the data shows trends such as a strong growth environment, autonomy, and delegation of authority. Does this align with what you have observed in HR? Yes, I would say at Macnica, based on the concept of trust and empowerment, we delegate authority to employees and encourage proactive action. The cycle of growth that emerges from this is something we call the Response Cycle. A story I recently heard illustrates this well. At a follow-up training session, networking for the third-year employees, if I remember it correctly, this person shared his own experience. He was in his first year as a new graduate, assigned to a sales role in the semiconductor business. Although he was originally supposed to still be in his OJT period, an internal reorganization led to him being given actual responsibilities earlier than planned. At that time, his manager chose to trust him and let him take the lead, and the senior colleagues around him also placed high expectations on him. As a result, his motivation outweighed any anxiety he had, and he approached his work with a strong sense of motivation. The product he was responsible of back then, I had lots of competitors, and it was rather difficult. He proactively carried out his initiatives, such as creating web articles and running on-demand seminars during COVID using his own ideas. As a result, the product gained visibility in the market. The vendor awarded him, and he was recognized internally as well. He said that this gave him a strong sense of confidence and growth. He further moved on to communicate with his boss, expressing his desire to further deepen his expertise and take on overseas projects. His manager recognized his passion and assigned him even greater responsibilities, including overseas business trips. Stories like that truly are illustrating, you have a really excellent culture of delegation. I think that has become a source for the business growth. That was a great example showing the strong growth environment we have at Macnica. Mr. Hotta, that said, giving young employees autonomy isn't easy, I believe. If done improperly, it can feel like simply passing off work. What are you doing in order to maintain this culture without falling into that trap, and what challenges do you face? The difference between delegation and simply throwing work over the fence ultimately comes down to who is going to take responsibility, especially when things don't go well. Who is going to be responsible? I think that is going to be the most important matter. Even when delegating, managers must always monitor progress so they can step in at any time in order to support or course-correct when necessary. Even if the task ends in failure, the manager must think together with the employee about what to do next. Such involvement is going to be quite important. This is what I believe, personally. I believe this kind of one-on-one basis engagement is going to be the most important element. In that sense, Mr. Kurimoto, what are your thoughts on the difference between throwing a task on someone and giving them autonomy? How do you feel about it? Thank you. Listening to this, I also felt how challenging this is going to have been. In my personal view, throwing work at someone means handing off a task without sharing the Purpose or the criteria for judgment. It's essentially leaving the person on their own, a situation that only increases his or her own burden and often does not lead to better performance. On the other hand, giving autonomy means clarifying the Purpose, expectations, and decision-making boundaries, and then allowing the employee in question to choose their approach. I call this intentional delegation. The level of freedom and expectations varies depending upon the person's abilities and the career they would like to go for. From the talent development perspective, understanding this distinction is going to be quite important, which is going to be able to encourage our members to further grow. Thank you, indeed. Next, I would like to explore the relationship between business growth and human capital. First, Mr. Hotta, in terms of talent strategy that directly drives business growth, what is your top priority right now? Among all things, securing talent is our biggest priority. We see it as the critical starting point that determines a company's future growth. At Macnica, we place a great importance on hiring people who resonate with our culture of initiative and the willingness to take on challenges, as well as with our unique core values, what we call the TEAMS. We look for highly capable individuals who share these values. Among these qualities, the most important is what we call dynamic capabilities, the ability to adapt to change. Recruiting talent with this capability is a major focus for us. In recent years, we've strengthened our recruiting and branding through radio and TV commercials and have renewed the recruitment website. Through these activities, we aim to broaden our reach to diverse candidates and secure people who will grow roots within the organization and thrive over the long term. Another key priority is developing each employee's skills and supporting their career progression. We believe that individual growth enhances organizational competitiveness and ultimately increases corporate value. I strongly believe in this kind of mindset. With this in mind, in FY 2024, we revamped our talent development framework, which we call MACNICA University. Macnica University provides a structured set of learning opportunities aligned with each employee's career stage, helping them grow autonomously while feeling a sense of achievement in their work. The framework is built around three stages: onboarding, leadership development, and management development. We've designed the programs tailored to every level from a new graduate to managers, so employees can acquire the skills they need to fully leverage the roles and the authority entrusted to them. With that in mind, I'd like to ask, how does Macnica analyze the ways in which talent strategy contributes to business growth? Thank you for the question. Since there are many investors attending today, I have actually prepared an interesting research finding, which is shown on this slide. In our previously mentioned employee review report, we generate a metric called the work style score based on review text. Our data shows that increase in this score can serve as a leading indicator of revenue, profit, and even share price. Due to time constraints, I'm not going to go through details, but in short, the more positive the original review texts are, the higher the work style score becomes. In other words, the more positively employees perceive and describe their experiences within the company, the more the score improves. Improvements in this score can predict the future performance of revenue, profit, and the stock price. This suggests that talent strategy, which shapes the employee experience at a very fundamental level, is not only important from an HR perspective, but that this is also going to be quite connected to the business growth in a significant way. That was extremely compelling data. For the final question today, I'd like to ask Mr. Kurimoto what you hope to see from Macnica going forward, and then hear from Mr. Hotta about the next stage beyond ranking the fifth in the Best Companies to Work For 2025. Mr. Kurimoto first, please. Thank you. Our company's mid- to long-term mission is to create a job market where every individual can shine. In our view, when the number of companies highly rated by their employees increases, that directly leads to a world where more individuals can truly shine at work. We hope to see the company, Macnica, continues to grow into a leading organization representing not just the industry, but Japan as a whole, earning a strong recognition from customers and in the market. Thank you indeed. Mr. Hotta, please. Thank you. While continuing to cherish the culture and the excellent systems we have built over the years, I want us to create even more mechanisms that allow every individual working at Macnica to feel an even greater sense of employee motivation to grow further. Of course, we hope such talent will succeed within the Macnica Group, but we also want to be a company with the passion and the commitment to develop people who can go beyond the boundaries of Macnica and contribute even more broadly to the society as a whole. Thank you indeed, Hotta-san and Kurimoto-san. This concludes part three of today's program. Now, we will move on to the Q&A session. Please enter your questions in the question form at the bottom of the screen. We will take as many questions as time permits, but please understand that we may not be able to answer all questions due to time constraints. We are in the process of setting up, so please bear with us for a moment. Thank you for your patience. First, I will read out the question we received in advance. The first question is for Mr. Kobayashi. Recently, Asahi Group and Askul were hit with cyberattacks. What is the impact of these cyberattacks on Macnica's business performance? Would you like to respond? Yes, thank you for the question. These incidents were widely reported, and there is no doubt that the number of companies that consider cybersecurity measures as a management issue that require attention is increasing. As was the case with the client I visited this morning, we formulate countermeasures according to each company's system configuration and risks. In that sense, the contracts will not be closed on a short notice like customers suddenly coming to us and asking for the installment in the next day. Having said that, I feel the demand is definitely increasing. I imagine that this was also the case with the recent major incidents, but I expect to see a medium to long-term tailwind with inquiries coming from subsidiaries and mid-size companies other than the head office. This is because those organizations lag behind in their cybersecurity countermeasures. We would be focusing on those markets as well. Thank you. Next question is also for Mr. Kobayashi. What are your thoughts around the preferential treatment of homegrown security capabilities by the Takaichi administration? Will the government policy impact Macnica's business performance? Yes. Thank you for the question. To be honest, I think the areas that can be covered by the domestic security capabilities alone would be very limited. We would like to propose countermeasures that incorporate overseas products with higher level of security that are used in our mainstay businesses, including areas like critical infrastructures. On the other hand, for our own service, Macnica ASM, which I explained earlier in the first part of this presentation, I think that the government stance will definitely be a tailwind for us as the domestically produced security service. Thanks to the support of the Japanese government, we are also receiving inquiries and discussing about projects, not only in Japan but also abroad. In general, domestic security services alone cannot cover everything. But on the other hand, for Macnica ASM, which is our own developed product, the opportunity would not be limited to the domestic market. Especially fueled by the government's supportive policy, we expect more inquiries and opportunities for technological business expansion in the overseas market. Thank you. Now, we will take questions received during the presentation as time permits. I would like to ask Mr. Sejiyama to answer the first question. So here's the question. "I believe that engineers are key to your business. How do you train your engineers who join as new graduates? Also, how many years does it take usually for those new engineers to become full-fledged security engineers?" Mr. Sejiyama? Yes, our training program for new graduate engineers is primarily OJT, on-the-job training. I'm very impressed by how the entire team, including senior members of the team close to the young engineers, are working closely to support them. I don't know if it is because of that reason, but I would say that the speed at which Macnica employees become full-fledged professionals is very fast. Macnica is a third company that I work for, so I can draw that comparison, and I think this is due in part to the OJT culture based on the delegation of authority. Normally, employees would be assigned clients or give lectures after 5 or 10 years into their career. At Macnica, such work is assigned in a matter of months. I think this in part supports the growth of our company. Thank you. Let's move on to the next question. "The growth of the cybersecurity business has been remarkable. Can this growth be sustainable?" The investor would like the President to share his thought. Mr. Hara, can you please take this question? Yes, thank you. My answer to the question is yes. I believe that we can continue to grow further. Clearly, the market is still expanding, and I think there is still room for growth when we consider the maturity level of the security market. We expect more growth to come in Japan. Furthermore, we are also looking into Asia, ASEAN, India, the Middle East, and Africa, where we are already working to develop our business. These regions are still a little less mature compared to Japan, but I think these markets will gradually develop over time. Considering the expansion potential in these areas, I think it is safe to say that there is still a lot of room for growth in our business and in the market. You can uphold your expectations. Thank you, Mr. Hara. Now, let's take the next question. "I think the market for recruiting IT engineers is a seller's market. Have you been able to hire engineers as planned?" Since this is a question on recruitment, could you please respond, Mr. Hotta? Yes, thank you. First and foremost, we consider engineers to be a very valuable resource, accounting for one-third of our total workforce. Thanks to our efforts, we have been able to recruit talents who meet the requirements for IT engineers to a certain degree. However, as we continue to expand our business, we would like more engineers to come on board. We would like to do this not just by recruiting engineers from the market, but also, as mentioned earlier, by educating and training our employees within the company. That is how we would like to develop talent. Thank you. Next question. "The data from OpenWork was very interesting." I would like to ask Mr. Kurimoto of OpenWork, if you dare to name an issue for Macnica, what would it be? Mr. Kurimoto, this may be a little difficult to answer, but please go ahead. Yes, this is a very tough question to respond, but thank you very much for asking. I'll do my best to give investor my answer. As explained, Macnica's valuation score itself has no particular shortcomings, and I think it is extremely high, exceeding 4.1. However, considering that labor market is very tight, the key point to recognize is that a high score alone would not guarantee Macnica any easy access to a talent pool if efforts are not made. This is not so much a challenge, but more like an expectation. Achieving a high score is a must, but furthermore, I would urge the company to take the initiatives to actively communicate Macnica's corporate culture and organizational feel. Taking such an approach would enable Macnica to maintain a high valuation score as a company while reaching out to talent who would fit in the company very well with good chemistry. I believe such effort would be increasingly necessary in order for Macnica to take a step forward and be ahead of the curve in the talent market. Thank you, Mr. Kurimoto. Next question is: as you develop your security business in Japan, Asia, and the Middle East, can you provide us the specifics on how you are creating synergy through collaboration? Mr. Kobayashi, could you take this question? Yes. Thank you for the question. As I explained using the slide, I think the most obvious synergy is to do joint procurement. For example, one of the major suppliers is CrowdStrike, from which both CyberKnight in the Middle East and Macnica in Japan engage in sourcing. We also share some other suppliers with Netpoleon in Southeast Asia. We can pay a visit at major conferences to these suppliers as Macnica's global team to exchange market information in each country, the region, and latest trending laws and regulations, while also discussing technology and strategy and how to grow the business. We are not just representing Japan, but we present ourselves as a global team, a global team of cybersecurity experts, visiting the world's most advanced suppliers and discussing shared goals with their management members on an equal footing. I think that this is something you do not hear about very often from other companies. Those are more on the sales, business, and commercial side. In addition, there is the power of our technological strength, which is one of the strong appeal points for a company. The companies with which we have had M&A and business tie-ups, not only in Japan but also in many other countries, all have great technological capabilities. Like our own setup, there is one engineer for one salesperson in most of these companies. At this point, we currently leverage technical capabilities country by country. However, by continuing to accumulate knowledge, Macnica will be able to provide technical support to each region as a whole, and in some cases, offer cross-border support. As these efforts are made, Macnica will be able to build up knowledge from all over the world, even though our base is Japan. As a result, it will lead to efficiency gains in business operations, and this is how we aspire to expand our overall business while engaging in these kinds of activities to become a truly global company. Does this suffice your question? Yes. Thank you very much. Next, question number 6. You talk about management underpinned by human capital, but how do you visualize engagement with employees, and how do you link it to management actions? Could you please answer this question, Mr. Hotta? Yes, thank you for your question. Recently, there has been a lot of talk about engagement in various areas, but in fact, we have been conducting an organizational assessment for the past 12 or 13 years. How we do this assessment is that we ask our employees 60 or 70 questions and analyze their answers. Some of those questions already included what we now call questions that measure engagement. We have been conducting such activities for 12 or 13 years already. We try to listen to the voices of our employees, and division heads will take those feedbacks earnestly. Then we think about what measures to be taken and how we can rejuvenate the whole organization. We communicate very closely with the President to formulate the plans and execute these measures with a concrete approach. This PDCA cycle has already been in place for 13 years. In this sense, I would like to continue these efforts so that we can continue to improve employee engagement further. Thank you indeed. Moving on to the next question. We received a comment saying that it is quite rare for a trading company to have an R&D organization such as a Security Research Center. What does your day-to-day activity actually look like, and how does this contribute to your security business? I'd like to have Mr. Sejiyama to respond to this question. Yes. We operate an organization called the Security Research Center, which currently consists of about 8 members. As for what we do on a daily basis, our primary focus is conducting in-depth research on what types of cyberattacks are being actually inflicted vis-à-vis the Japanese organizations. When it comes to security information, the reality is that most of it tends to come from overseas. Until recently, when you try to investigate a threat, you often found that only foreign data was available. The truth is, attacks seen overseas do not necessarily match those occurring in Japan. There are threats that are unique only to Japanese organizations. Understanding these Japan-specific threats is going to be quite important. That is why we decided to set up the Security Research Center. Once we analyze these threats, the next step is going to determine what countermeasures our customers should take. However, implementing security measures, that is going to be often quite challenging. That is why a wide range of products and services will be required. Therefore, we research what types of attacks are actually hitting Japan today, analyze how organizations should defend themselves, and then identify relevant solutions and products, mainly from overseas, and introduce them to our customers. Because we truly understand what is happening on the ground, we can recommend the most appropriate solutions and products to our customers. As a result, I believe this actually has been highly appreciated by many customers. Thank you. Now on to the next question. In the human capital session earlier, we heard about your excellent corporate culture. To maintain and further evolve this culture, what initiatives are you undertaking? Here, I'd like to have Mr. Hara to respond to this question. Thank you. Thank you, indeed. Yes, as Ichiro Hotta-san mentioned earlier, we have our core values, called TEAMS. At the heart of this is empowerment, completely built upon trust. To sustain this culture, it is essential that younger employees are able to truly experience these values firsthand through their daily work. Ultimately, it all comes down to how much we can create opportunities for them to feel empowered and take on meaningful challenges. This kind of environment is going to be quite important. In this sense, providing environment, businesses, and new opportunities where young employees can truly challenge themselves, this is going to be extremely important. For example, as introduced today, we are expanding our cybersecurity business and evolving from a traditional technology and trading company model into a service and solution-driven company. Although we are not able to introduce all of it today, we are also now launching new businesses such as CPS solutions. By continuously creating and expanding such new areas, we like to aim to build an environment where the younger generation, who have high growth potential and strong upward momentum, can truly thrive. By creating such environment and enabling them to excel, we believe we can achieve both sustainable business growth and maximize our human capital. We do actually believe in this kind of mechanism. Thank you, indeed. We still have a little time remaining, so please feel free to continue submitting your questions by clicking the Q&A button. Let us move on to the next question. In the cybersecurity business, I understand that you partner with startups and grow together with them. On average, how long does it take for these startups to fully ramp up in the market? I'd like Mr. Kobayashi to respond to this question, please. It's a bit difficult to give a precise average, but broadly speaking, it may take us, say, 3 to 5 years. To give a well-known example, we signed with CrowdStrike back in 2012, but it wasn't until concepts like Zero Trust became widely understood. It was around 2018 or 2019 when the business really took off. Similarly, for products we currently provide, such as Splunk, now integrated with Cisco, it also took 3 to 5 years before they reached full momentum. On average, I would say that kind of timeframe is going to be necessary. However, this is precisely where Macnica's differentiation lies. Even when a business takes time to materialize, we thoroughly assess that technology in question. We earlier made a reference to our Response Cycle, and when we see early market signals, even if they do not yet translate into demand, we stay committed together with our suppliers. We focus on market creation or demand creation by raising awareness of emerging threats and developing the market from the ground up. In cybersecurity, the fewer threats would be better. That's for sure. But in reality, it is going to be quite important for us to be engaged, truly united. Collectively, we can create the market. As Sejiyama-san mentioned this point, companies and governments must now protect not only on-premise servers and PCs, traditional attacks, but also notice the cloud and the data inside the cloud. It's very important for all the stakeholders to be able to protect them. The areas requiring protection have increased so dramatically. That is why we believe in patience, working together with the startups. I think we are rather unique in this regard, so it may take 3 to 5 years, but again, we're going to be patient enough so that we can actually further expand on our value-added distribution business. That's all. Thank you. If I may, I'd like to add some comments briefly. This timeline is not actually unique to cybersecurity. In our semiconductor business as well, when cutting-edge technologies were involved, it typically took a similar number of years for the market to materialize. In other words, it is not that things take time, but rather that we identify promising technologies at a very early stage, long before the market being formed. After signing those early agreements, we can use the time to build our own technical expertise. The time we spent there is going to be essential for us. When the market eventually arrives, we are able to lead with overwhelming technical capability and intelligence. By that stage, it is going to be extremely difficult for other distributors who notice the opportunity later to enter the market. This is one of our core sources of competitive advantages. Thank you. We are running out of time, so next one is going to be the last question. Does the cybersecurity business software now account for a large share of revenue? Within that, what portion is recurring revenue, and do you expect the ratio to continue to go up? I would like Yusuke Kobayashi to respond to this question. I do not actually have the exact recurring revenue ratio with me right now, but it is already quite high. Software now will definitely continue to grow. At stake is what we call ARR. The metric we use for recurring revenue is something both our vendors and the customers do expect us to increase its ratio. When the product is really good, customers are highly motivated to continue using it. So we anticipate steady growth in recurring software revenue, as well as its overall ratio. What is increasingly important here is going to be our customers should be able to correctly use the security products. So that kind of right usage at the end-user side is going to become a lot more critical. This is what we call the retention rate. Actually, in order for us to actually increase the retention rate, the customer satisfaction is going to be quite important. So we need to actually offer all the technology and support and other services so that we can actually expand the recurring business opportunities that is going to result in better numbers for renewal. So we already have this kind of tendency, and this tendency is going to be further expanded as time goes on. Thank you. This concludes the Q&A session. Thank you very much to everybody who submitted questions. Now, I would like to invite President Hara to deliver a closing message. Thank you indeed for joining us today for Macnica's first Investor Day. We received a remarkable number of participants and questions regarding our cybersecurity business and our initiatives in human capital, and we truly felt the high level of interest from all of you. Thank you indeed. I am so grateful. We value this kind of dialogue, and we remain committed to openness and transparency as we continue to create opportunities for ongoing communication. We will keep on striving toward sustainable growth and value creation, and we kindly ask for your continued support. Thank you again for being with us today. This concludes Macnica Investor Day. Before we close, we would like to actually ask for your support. We would like to actually ask you to respond to the survey questions. The video recordings and transcripts of this briefing will be made available on the Macnica Holdings' IR website in the coming days. So please take a look at when convenient.