Both core businesses made steady progress in measures, resulting in higher sales and profit

While social and economic activities began to normalize following the reclassification of COVID-19's category to Class 5, the social and economic situation remained uncertain due soaring resource and energy prices stemming from the weak yen and the prolonged conflict in Ukraine.

Against this backdrop, LAC Co., Ltd. (hereinafter, "LAC") steadily advanced initiatives in its business activities, which were announced as areas of focus at the start of the fiscal year. In the Security Business, we launched individual monitoring services with sophisticated countermeasures for the Digital Agency and major retailers, while endpoint security solutions support services expanded steadily. As for diagnostic services, there has been steady progress since the first quarter on a large-scale projects related to penetration testing services being collectively recorded at the fiscal year-end. In rapid response services, we strengthen our business structure through collaboration to enable us to respond to increasingly large-scale and complex cases.

In the SI Business, we provided system development projects to support the introduction of cloud-type services and steadily promoted reskilling of engineers to boost their unit prices.

Based on these factors, in the first half of the fiscal year ending March 2024, both net sales and operating income increased owing to an rise in product sales and operational monitoring services, etc. in the Security Business, while the SI Business saw growth in development services and hardware and software sales. The interim dividend was determined to be 12 yen per share as planned.

Promoting productivity improvement and other Company-wide initiatives

As a Company-wide initiative, LAC is promoting the use of generative AI to improve internal productivity. We established a cross-sectoral organization to strengthen internal rules and develop an interactive generative AI designed specifically for LAC and are now considering its practical implementation.

Additionally, as an office strategy that supports new ways of working, we are proceeding with plans such as the complete renewal of the Hirakawa-cho Office, including the reduction of the floor space. Although there will be short-term expenses associated with contract renewals, we expect to achieve a significant cost reduction from the fiscal year ending March 2026.

While unbudgeted expenses are expected to be borne due to the office strategy, there is no change to the full-year forecast from the initial forecast, as business progress in the first half has been tracking steadily on the whole. We will continue to advance our growth strategies aimed at improving our competitiveness in the Security Business and work to strengthen the earning power of the SI Business.

Going forward, LAC will continue heading towards sustainable growth based on our purpose, which is "building trust with reliable technologies." We would thus like to ask our shareholders and investors for their support as we pursue medium- and long-term growth.

December 2023

Itsuro Nishimoto
Representative Director, President