Overall, FY2024 was a strong year. Net sales increased 27.5% year on year, adjusted operating profit increased 108.0% year on year, achieving a substantial profit increase, and the adjusted operating profit margin also reached a record high of 8.2%. Free cash flow was 6.9 billion yen, the free cash flow margin remained healthy at 16.1%, and cash on hand reached approximately 30 billion yen.
By business, Sansan achieved strong performance with net sales up 16.9% year on year, as the growth rate of recurring sales accelerated due to the effect of a strengthened sales structure and other factors. The last 12 months average of monthly churn rate was 0.49%, continuing to stay at a low level below 1%. Although Bill One fell slightly short of guidance, it continued high growth with sales up 58.7% year on year, and maintained an extremely low churn rate of 0.33%. The Eight business, helped by multiple factors including price revisions, achieved growth above guidance with net sales up 42.4% year on year and realized both high growth and improved profitability, as the business became profitable for the full year.
In 2024, we announced a medium-term financial policy, which targets a three-year compound annual growth rate (CAGR) of 22%–27% in net sales and an adjusted operating profit margin of 18%–23% through FY2026, and also indicated a long-term aim of an adjusted operating profit margin of 30% or higher. In FY2024, the first year of the medium-term financial policy, we achieved favorable results in light of this policy. For FY2025, we also expect net sales to increase 22%–25% year on year and the adjusted operating profit margin to be 13%–16%, levels that pose no problems in light of our medium-term financial policy.
In addition, in the full-year results for FY2024, we organized and disclosed our current approach and initiatives in line with the TSE’s guidance on management conscious of cost of capital and stock price. Although we have not yet reached the stage of providing quantitative indicators, we have clarified our stance of improving corporate value by emphasizing the building of constructive relationships with the capital market.
We recognize that our cost of capital is at a relatively low level given our current business structure and financial position. Moreover, we believe it is important to minimize the gap between performance guidance and actual results to achieve further reductions. Looking back over the past five years, there was only one case where internal sales plans and actual results deviated by 1% or more, and we are proud that our ability to formulate precise plans and steadily execute them has taken root.
In terms of capital efficiency, we have maintained a healthy equity-to-asset ratio of 31.2% and have continued to grow using internal funds without conducting equity financing since listing. Free cash flow margin has also exceeded adjusted operating profit margin over the long term, supporting the soundness of the company in terms of both profitability and efficiency. Regarding capital allocation, while emphasizing the balance between investment in growth and shareholder returns, we are currently in the business expansion phase and are giving priority to investment in growth.
On top of that, we are continuing to examine the details of shareholder returns, which we began in FY2024, and have positioned share buybacks first, followed by dividends, as the order of priority for the measures. It remains our policy to flexibly implement share buybacks as needed. As for dividends, because our distributable amount under the Companies Act is not large at present, it is difficult to present a quantitative policy. However, we aim to clarify our policy over the medium term based on the assumption that free cash flow will increase.
The number of dialogues with investors has been increasing every year, and the quality of these dialogues has further improved since the announcement of our medium-term financial policy. We place importance on carefully explaining and broadening understanding of our unique strengths of a low churn rate and stable cash-flow generation. Going forward, while maintaining a balance among growth, profitability, and soundness, we will sustainably enhance corporate value and further strengthen our relationship of trust with the capital markets.
September 2025
Muneyuki Hashimoto
Director, Executive Officer, CFO
