Message from the President

A Year Focused on Dialogue

In fiscal 2024, my first year as the President, I placed strong emphasis on dialogue with shareholders and other investors, as well as customers and employees. It was a year of deep consideration on how to best meet the expectations placed upon me and increase corporate value. Before becoming the President, I served as a Director and was primarily involved in driving the growth of our overseas business. Therefore, I did not have the opportunity to directly hear the views of investors and analysts.

Since becoming the President, however, I have actively engaged in dialogue with stakeholders. This has given me firsthand insight into the expectations and perspectives of the capital markets toward our Group, which has deepened my overall understanding. Drawing on the many insights, advice, and suggestions gained through these dialogues, I have shaped the direction for management improvements, formulated concrete actions, and enhanced our initiatives to increase corporate value. At the time of our fiscal 2024 results announcement in March 2025—one year into my presidency—we disclosed the outcomes of these initiatives. We also outlined future efforts, including specific measures to achieve the goals of 2026 Medium-Term Management Plan and advance human capital management. We also made strengthening shareholder returns a key management policy by introducing a new target of achieving a total return ratio of 100% or more in each of the next two years. To this end, we committed to increasing dividends and decided to acquire and cancel own shares in a sincere effort to enhance capital efficiency. Furthermore, because the Group's overseas sales ratio has increased significantly, we decided to voluntarily adopt the International Financial Reporting Standards (IFRS) to provide information in line with global standards.

On the other hand, having spent many years overseeing our overseas business, I had little opportunity to engage directly with customers in the domestic market. To address this, I made a point of traveling across Japan to meet with customers and better understand their expectations. One particularly memorable moment was in July 2024, when Japan's new banknotes were issued. Customers highly praised us, saying “That's exactly what we'd expect from Glory,” in recognition of how smoothly we handled the product replacements and system modifications. During customer visits and trade shows, I also received numerous inquiries about our customers' own operational challenges. These interactions reaffirmed the strong trust placed in our Group's sincere responses, as well as our significant presence in the domestic market.

Over the past year, I also focused on communication with Group employees. I called these visits my “surprise drop-ins,” during which I showed up unannounced—not only at our branches and sales offices but also at Group companies both in Japan and overseas. While employees were understandably surprised by the unexpected visits from the President, these face-to-face conversations allowed me to see and hear firsthand the unfiltered, day-to-day realities of our frontlines. Seeing employees in person also gave me a better sense of their workplace atmosphere and the challenges they face, which was a valuable learning experience for me. There are still many sites and locations around the world I have yet to visit, so I hope to continue these surprise drop-ins going forward. To share my thoughts and vision directly with employees, I've also been publishing a weekly presidentn's column on our corporate intranet. I always look forward to the feedback and comments I receive from our employees in response.

Changing external environment

Fiscal 2024 was marked by significant changes around the world. In Japan, the issuance of new banknotes for the first time in 20 years had a major impact on our business activities and performance. The domestic financial, retail and transportation, and amusement markets also faces rising labor costs, workforce shortages, and increasing demand for operational efficiency. Against this backdrop, we expect continued adoption of solutions that streamline operations, as well as further development of next-generation stores that can be run with minimal staffing. Looking globally, inflation is driving up labor costs and prices. However, these changes also present a valuable opportunity for the Group to offer products, services, and solutions that help retail stores, financial institutions, and restaurants improve operational efficiency.

On the other hand, there are concerns about the potential impact of U.S. trade policy on our business performance. The U.S. government tariff measures continue to fluctuate, making it difficult at this time to accurately estimate their financial impact on the Group. Accordingly, we have not factored the potential impact into our fiscal 2025 forecasts. Should any details become clearer and warrant disclosure, we will report them promptly.

First-year progress of 2026 Medium-Term Management Plan

Our 2026 Medium-Term Management Plan, launched in April 2024 under the concept “Glory Transformation 2026—Shape the future with Glory,” is built around four basic policies. In its first year, fiscal 2024, we significantly exceeded targets across all key performance indicators—including efficiency metrics (ROE, ROIC, and ROA) and P&L indicators (operating income, net sales, and sales from the new business domain).

In Japan, we completed the adaptation to the new banknotes in the retail and transportation market, following our success in financial market in fiscal 2023, thus fulfilling our social mission as a provider of cash-handling infrastructure. Also in the retail and transportation market, we expanded the rollout of self-service coin and banknote recyclers for cashiers to convenience stores, apparel retailers, and other outlets.

Outside of Japan, sales from cash management solutions and maintenance services in the retail market increased, bringing total overseas sales to a record-high ¥210 billion. Over the past four years, sales from our international business have doubled, driven by the securement of major clients, including the world’s top retailers. As the weight of our overseas business grows, we cannot avoid exposure to foreign exchange rate fluctuations. To minimize this risk, we are implementing various measures, such as currency hedging and forward exchange contracts. In the F&B market, one of our key growth engines, we accelerated the deployment of solutions that automate ordering, payment, and pickup by leveraging software platforms in collaboration with Japan's Showcase Gig and France's Acrelec. We also attracted clients among some of the world's leading brands, and we anticipate continued strong growth in this area.

Management challenges

To improve corporate value and achieve a PBR of 1.0 times or higher as soon as possible, we are addressing three management challenges.

The first challenge is to restore the operating margin of our overseas business. While this segment has achieved significant growth in recent years, its operating margin temporarily declined between fiscal 2020 and 2022 due to a combination of factors, including the spread of COVID-19, semiconductor shortages, and rising component costs. These impacts have now subsided, and our operating margin is showing signs of recovery. Therefore, we anticipate further improvement in fiscal 2025, driven by our execution of various initiatives, revenue growth through synergies with acquired companies, and enhanced profitability in the Americas region, one of our key growth engines.

Our second challenge is securing profits through appropriate pricing. With this in mind, we will reflect cost increases—resulting from inflation and U.S. trade policies—in our product and maintenance pricing. While inflation is advancing across many countries, we as a private company cannot control the rise in inflation rates. Inflation leads to higher fixed costs, such as labor and operating expenses, while rising material costs also drive up manufacturing costs. We are working continuously to reduce manufacturing costs through improvement and procurement activities. If cost increases overwhelm these efforts, however, a decline in profit becomes unavoidable. To address this, we will reflect such increases in our pricing to ensure we maintain appropriate profitability.

Lastly, we aim to clearly articulate our perspective and vision regarding the rise of cashless transactions. The average cashless payment ratio in major global economies has surpassed 50%, and Japan's ratio has also risen to 36%. Although we do not foresee cash disappearing entirely in the future, we do expect the volume of cash usage to gradually decline over time. To drive growth of the Group, we are committed to not only maintaining and strengthening our core cash handling business but also expanding our non-cash business, particularly in new strategic areas. By advancing both the cash and non-cash segments as dual pillars, we aim to achieve sustainable growth. Non-cash business sales already account for approximately 25% of our total revenue. Looking ahead, we aim to further expand this segment—through DX solutions in the F&B and retail markets and by growing recurring revenue from cloud-based POS systems. Our goal is to achieve a 50:50 balance between our core cash handling business and the non-cash business. To realize this, we will continue focusing on developing DX specialists in line with our digital transformation strategy.

To our stakeholders

In fiscal 2024, we also introduced “Our Values” as part of a revision of our Corporate Philosophy Structure. As we promote these values across the Glory Group, I've come to feel that one of the key behaviors we expect—“Exceed the expectations of all our stakeholders and build trust”—is already deeply rooted and actively practiced throughout the organization. Wherever I go, I see employees sincerely dedicating themselves to their work with the customer always in mind. It's clear that this mindset was already deeply embedded in our corporate culture before we formally introduced Our Values. Beginning in fiscal 2025, we have incorporated the expected behaviors based on Our Values into individual performance evaluations. Rising to new challenges with passion and speed, improving our skills, and working with mutual respect—when each employee adopts this mindset, I am confident it will generate momentum and help us address our management challenges.

As I mentioned at the beginning, it's clear that dialogue with our stakeholders is vital to the future growth of the Group. Therefore, I remain committed to bringing your feedback and suggestions to the Board of Directors for discussion and ensuring they are reflected in our management decisions. With a long-term vision in mind, we will continue striving to achieve the goals of 2026 Medium-Term Management Plan and realize sustainable growth.

Akihiro Harada
President