We would like to express our appreciation to all of our shareholders for your continued understanding and support.
During the year under review, overall the Japanese economy sustained a modest recovery. Although a shrinking labor force prompted labor shortages, the employment and labor situation continued to improve, causing personal consumption and exports to rebound and capital investment to rise gradually. The global economy was likewise characterized by a gentle rebound even though a sense of future uncertainty remains due to such factors as geopolitical risk, trade issues, and growing volatility in financial and capital markets.
With regard to public safety in Japan, the number of reported crimes fell below 1 million in 2016 for the first time since World War II. This number decreased further in 2017, declining to approximately 910,000. That being said, people’s everyday lives continue to be affected by crimes, including malicious crimes and special-case scams targeting senior citizens and differently abled individuals, stalking, and crimes aimed at women and children.
At the same time, society faces increasingly diverse risks, such as natural disasters, international terrorism, cryptocurrency outflows and other forms of cybercrime, and information leaks. As a company responsible for an important piece of the social infrastructure supporting the safety and security of society, ALSOK thus realizes the need to provide a wide range of services that respond to social needs.
Summary of Consolidated Financial Results
In this environment, based on its policy of “responding accurately to customers’ various risks and outsourcing needs,” the ALSOK Group continued working to strengthen and expand its Security Services business. We also endeavored to grow businesses in peripheral fields that are highly compatible with Security Services, such as Long-Term Care Services and Facility Management Services, which are included in the General Property Management and Fire Protection Services segment. We also strove to curtail costs by encouraging personnel to multitask and consolidating Guard Centers, and undertook business reforms throughout the Group in the aim of bolstering efficiency. To achieve further growth, we took on the challenge of developing new services employing state-of-the-art technologies, such as artificial intelligence (AI), the internet of things (IoT) and 5G.
As a result, consolidated net sales rose 5.5% year on year, to ¥435,982 million; operating income grew 5.9%, to ¥30,111 million; ordinary income rose 5.3%, to ¥31,913 million; and profit attributable to owners of parent expanded 5.5%, to ¥19,344 million. We acheived revenue growth both in net sales for eight consecutive years and in profit attributable to owners of parent for six consecutive years.
As for the security services, labor shortages have highlighted the issue of long working hours. Given this situation and the backdrop of work style reforms, the need for appropriate facility management and attendance management have increased. Accordingly, we have promoted ALSOK-GV (read “ALSOK G-five”), a service that combines image monitoring with ALSOK Information Service. This service allows for information regarding when employees arrive at or leave premises to be viewed online, while also providing Internet-based remote control functionality for equipment. Security camera systems, such as ALSOK Image Cloud Service, as well as access management systems have also been promoted.
Additionally, we promoted HOME ALSOK MIMAMORI SUPPORT, a service that contributes to a society characterized by falling childbirths and an aging population, and MIMAMORI Tags, which support the construction of regional watch networks.
As for the General Property Management and Fire Protection Services segment, in line with growing demand for disaster prevention and mitigation, disaster preparedness items and residential fire alarms and other fire extinguishing equipment have been promoted. In the Long-Term Care Services segment, we approached to the efficiency and improvement in occupancy ratio for long-term care facilities.
In regard to M&A, we made an effort to the enhancement of the business domain, by acquiring “ALSOK KANTO DELIVERY CO., LTD.” which operates transportation security services, and “Keihanshin Security Services Co., Ltd.” to affiliated company accounted for by the equity method which operates stationed security services, transportation security services, and building management.
Forecast for the Fiscal Year Ending March 31, 2019
In the fiscal year ending March 31, 2019, the ALSOK Group forecasts net sales of ¥450,000 million, up 3.2% year on year, operating income to grow 9.9%, to ¥33,100 million, ordinary income to rise 9.7%, to ¥35,000 million, and profit attributable to owners of parent to expand 13.7%, to ¥22,000 million.