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I would like to extend my heartfelt gratitude to our shareholders for their continued support and understanding for our business. In presenting the shareholders newsletter for FY2019 of the Company, I would like to offer a few words.

As we strive to solve various issues and challenges that face society and to achieve sustainable growth as an entity, our founding spirit--"Create a future society full of wisdom, together with our stakeholders, by utilizing our technologies based on engineering knowledge and by disseminating them throughout society"--is at the heart of our Thought (philosophy),"Innovating for a Wise Future."



Since the days of its incorporation, the Company has worked on advanced technologies and business challenges, making the best of its engineering knowledge which integrates academic and empirical knowledge. While maintaining a solid foundation of expertise in the structural design of buildings, in 1961 we adopted computers which were still rare in Japan, and continue to expand our businesses into diversified areas such as ground analysis and environmental analysis of the surroundings, support for utilizing IT in architectural and manufacturing industries, providing solutions in the information and communications area, simulation and decision making support for the development of social systems, as well as IoT/IoE services for home applications provided in recent years. In each business domain, we focus on leveraging the experience curve effects and have thus far accumulated engineering expertise and steadily enhanced the value we add to our solutions.

Since the days of its incorporation, the Company has worked on advanced technologies and business challenges, making the best of its engineering knowledge which integrates academic and empirical knowledge. While maintaining a solid foundation of expertise in the structural design of buildings, in 1961 we adopted computers which were still rare in Japan, and continue to expand our businesses into diversified areas such as ground analysis and environmental analysis of the surroundings, support for utilizing IT in architectural and manufacturing industries, simulation and decision making support for the development of social systems, as well as IoT/IoE services for home applications provided in recent years. In each business domain, we focus on leveraging the experience curve effects and have thus far accumulated engineering expertise and steadily enhanced the value we add to our solutions.


These efforts have contributed to the robust financial results for FY2019 of the Company, with its operating income of ¥1,855 million, an increase of ¥613 million or growth of 49.5% over the previous fiscal year. The Engineering Consulting business recorded increases in both revenue and profit, driven by repeated orders from blue-chip enterprises in the residential/construction industries with their strong motivation for investment to introduce advanced information technologies and enhance competitiveness, orders for structural design services that contribute to building a safe and secure society, as well as by reducing the occurrence of unprofitable projects through systematic initiatives to ensure quality and provide high added value.


In the Product Service business, sales expanded steadily for cloud-based email delivery services and cloud services for room entry and exit management that were launched in recent years. Sales were also robust for CAE software for designers which realizes period shortening and cost reduction in product development, as well as particle-based fluid simulation software, contributing to revenue increase for the business.


Enhancing value by investing in start-ups


While maintaining steady growth of our core business as mentioned above, we have made continued investments with a view to future growth. As for overseas, RemoteLOCK, a cloud service for room entry and exit management by U.S.-based LockState, Inc., which we launched in 2016, has shown steady growth in the sales as a business adding new values to buildings and homes in the IoT era. In May 2020, we began the sales of a new product, which became the first product in the series to be manufactured domestically in Japan. Also, we are working to promote NavVis, a digitalizing solution for large scale facilities by NavVis GmbH, a German company with which we have a business alliance since 2015. We are engaged in establishing a business foundation to offer services to support the development of digital twin, smart factories and remote maintenance and management of facilities through such efforts as marketing of a new wearable product of NavVis.


Commitment to academia-industry cooperation


Furthermore, we are engaged in developing businesses aiming to achieve social implementation of advanced technologies through joint research and cooperative activities with universities and other research institutions, such as Tohoku University, the University of Tokyo, and the National Institute of Information and Communications Technology. We are currently promoting RiverCast, a realtime flood prediction solution developed jointly with the University of Tokyo, as a service to support early decisionmaking of evacuation. The research and development results of the core technology used in this solution have been published in Scientific Reports (online), a general scientific journal published by Nature Publishing Group. In addition, we promote the development of solutions to solve various social issues, including Relay-by-Smartphone® to provide a means of communication in the situation of a disaster, and "artisoc Cloud" to provide insight through social simulation on a cloud platform.


Participation of diverse "collaborative professional"


To drive these activities, it is of utmost importance to recruit and develop collaborative professional. On the recruitment front, both new-graduate and mid-career hires are supported by proactive recruitment activities continued in Japan and overseas. Through overseas recruitment activities that started in Singapore in 2014, we have 49 foreign nationals working with us, accounting for about 8% of all colleagues as of the end of FY2019. The participation of such collaborative professional with various cultural and economic experiences allows us to combine the diverse values within the Company, leading to the vitalization of organization and development of new businesses. In addition to internal transfers and external training programs, we provide our colleagues with diverse growth opportunities by offering various scenes within or outside the Company to demonstrate their full potentials, including dispatching to Stanford University in the U.S., governmental agencies, and other external research institutions.


Creating opportunities


We are also focusing on creating opportunities for our talented collaborative professional to work actively in a more attractive environment through such initiatives as abolition of the mandatory retirement age, introduction of special-term work system (for colleagues with location- or time-related restrictions), establishment and reorganization of divisions, and improvements in the benefit packages. Starting in August 2020, we rented two floors in the Sumitomo Nakanosakaue Building and newly opened the Nakanosakaue Annex where about 170 staff members are now based. As a result, our total office floor area in the Nakano district in Tokyo increased by approximately 1,000 square meters, allowing us to further expand our business and increase manpower going forward. Although the outcome of these measures is not directly reflected in the financial statements, it is our belief that it is an important organizational strategy to achieve sustainable growth in the changing times.


Looking ahead, we are committed to enhancing our corporate value by providing customers with solutions that benefit the society. Therefore, we ask our shareholders for their continued support going forward.

September 2020

President, Shota Hattori