YE DIGITAL aiming for sales of 20 billion yen, expanding IoT business in agriculture and logistics fields

YE DIGITAL aiming for sales of 20 billion yen, expanding IoT business in agriculture and logistics fields

From Manufacturing Management News
Published at 14:00 on March 31, 2021
[Tsubasa Ikeya, MONOist]
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YE DIGITAL held a presentation on the financial results report for 2020 and the business plan for 2021 on March 30, 2021. He announced the new medium-term management plan from 2022 to 2024, and explained the policy to strengthen the IoT (Internet of Things) solution business in the fields of agriculture, transportation, and logistics.

IoT solution business grows
In FY2020, YE DIGITAL's sales were 14,481 million yen, up 5.0% year-on-year, operating income was 921 million yen, up 57.6% year-on-year, and ordinary income was 817 million yen, up 39.4% year-on-year. Net income attributable to owners of the parent was 461 million yen, 69.6% of the previous year.

Looking at each business, the business solution business, which builds core systems for enterprises, was 9.2 billion yen, down 2.2% from the previous year, while the IoT solution business, which provides AI (artificial intelligence) and IoT services, was 5.3 billion yen. It increased by 20.3% year-on-year. As a result, the ratio of the IoT solution business to the total sales increased by about 5% from the previous year.

Overview of business results * Source: YE DIGITAL [Click to enlarge]
In the business solution business, sales of core system construction for companies increased from the previous year. System construction for health insurers and systems for mobile carriers performed well, but enterprise resource planning (ERP) solutions fell below the previous year's level. On the other hand, in the IoT solution business, sales of AI and IoT solutions in the smart logistics field and Internet security-related products increased due to the increase in demand for ICT equipment in educational settings.

Regarding the full-year earnings forecast for FY2021, sales will be 14.5 billion yen, up 0.1% from FY2020, operating income will be 1 billion yen, up 8.5%, and ordinary income will increase 4.0%.

Strengthen IoT solution business, etc. aiming for "sales of 20 billion yen"
From 2019 to 2021, YE DIGITAL has set up a medium-term management plan aimed at expanding the profitability of its core businesses, and is carrying out efforts to achieve the target results in each fiscal year. However, although it is currently on a recovery trend, the impact of the new coronavirus infection (COVID-19) is unavoidable, so the initial target for FY2021 in the medium-term management plan is expected to be missed.

On the other hand, in 2021, it is said that it will accelerate efforts to solidify its business foundation toward the realization of the new medium-term management plan for 2022-2024, which aims for sales of 20 billion yen. Roughly speaking, it plans to expand the existing businesses of IoT in the fields of logistics, agriculture, and transportation, and DX (digital transformation) support businesses targeting local companies and local governments.

For agriculture, we aim to expand the business of remote monitoring services for fuel tanks in greenhouses that combine the IoT platform "MMCloud" and LPWA (power-saving wide area network). Visual confirmation work is no longer required on the farmer side, and delivery efficiency and cost reduction can be expected on the heavy oil distributor side. In the future, we plan to develop a similar system for monitoring farmers' feed tanks and industrial gas tanks.

Agricultural solution using LPWA * Source: YE DIGITAL [Click to enlarge]
For transportation, accelerate the growth of "smart bus stops" that utilize digital signage and IoT technology. Smart bus stops are currently being introduced by 15 transportation companies nationwide. It is said that the number of companies that have introduced the system is expanding due to the tailwind of subsidies from the Ministry of Land, Infrastructure, Transport and Tourism.

Aiming for full-scale spread of smart bus stops * Source: YE DIGITAL [Click to enlarge]
For logistics, we aim to expand the business in the smart logistics field, which realizes automation of in-warehouse logistics operations such as vanning / devanning, depalletizing, storage, picking, sorting, and palletizing. By introducing AGV (automated guided vehicle), robot picking device, and automatic distribution warehouse system "AutoStore", we will make proposals for labor saving and efficiency improvement.

Super-efficient robot route search, evolution of automated logistics warehouse system from Norway

Logistics solutions using AGVs and robot picking * Source: YE DIGITAL [Click to enlarge]
In the DX support business, we will strengthen cooperation with companies in the Kyushu region such as Kyuden Business Solutions to promote DX support for local companies. In addition, it will also carry out DX support business for small and medium-sized enterprises by utilizing the system based on MMCloud.

Regarding the creation of new businesses, it is planned to include two consulting companies and clarify the policy by the end of FY2021.

Mr. Naoto Endo, President and CEO of YE DIGITAL, said, "In 2021, we will surely carry out YDX (YASKAWA digital transformation) in the business solution business, and in the IoT solution business, IoT solutions and smart logistics that will lead to the solution of social issues. We will work to expand our business. We aim to contribute to society and grow our business by providing easy-to-understand and familiar solutions required for New Normal. "