COMPANY RESEARCH AND ANALYSIS REPORT

Mitsubishi Research Institute, Inc.
3636
Tokyo Stock Exchange Prime Market

5-Jan.-2023
FISCO Ltd. Analyst

Yoichiro Shimizu

FISCO Ltd.
https://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Outline of results for FY9/22 .......................................................................................................................

01

2. Consolidated outlook for FY9/23........... ......................................................................................................

01

3. Overview of Medium-Term Management Plan. ............................................................................................

02■Company profile---------------------------------------------------------------------------------------------------------------------------------------------------------- 03
1. Company profile.. ................................... ......................................................................................................

03

2. The features and strengthens of the Mitsubishi Research Institute Group. ..................................................

05■Business overview---------------------------------------------------------------------------------------------------------------------------------------------------- 08
1. The units providing Think Tank & Consulting Services. ................................................................................

09

2. The units providing IT Services.............. ......................................................................................................

10■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 12
1. Results for FY 9/22................................ ......................................................................................................

12

2. Financial condition and business indicators.................................................................................................

14■Outlook-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 15■Medium- to long-term growth strategy------------------------------------------------------------------------------------------------ 16
1. Summary of the Medium-Term Management Plan. ......................................................................................

16

2. The paths taken for the five transformations. ...............................................................................................

18■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 22

We encourage readers to review our complete legal statement on “Disclaimer” page.

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html■ Summary
Record-highs for net sales and all profit items in FY9/22. Targets net
sales and profit growth in FY9/23 while investing for growth
Mitsubishi Research Institute, Inc. <3636> (hereafter, also “the Company”) is a full-range think tank group conducting
the Think Tank & Consulting Services business, which involves surveys, research, policy support, and management
strategy support, and the IT Services business, which provides ICT solutions services to its customers, which
are government ministries and agencies and private-sector companies. Since its establishment in 1970, it has
participated in important projects both in Japan and overseas and has continued to present its vision to society ofalways being a compass for the times. More than 30% of its consolidated net sales are government ministries andagencies-related (FY9/22), which forms a stable earnings foundation. In 2020, on the occasion of the 50th anniversary of its establishment, it formulated the Medium-Term Management Plan 2023 (hereafter, the “Medium-Term
Management Plan”). The Company made good progress with the Medium-Term Management Plan and achieved its
targets for ordinary profit and return on equity (ROE) one year ahead of schedule in FY9/22. In FY9/23, the final yearof the plan, it is further transforming into a think tank group that resolves societal issues to achieve both sustainablegrowth and improved enterprise value by continuing to record solid results.
1. Outline of results for FY9/22
In the FY9/22 consolidated results, net sales increased 13.2%* compared to the same period in the previous fiscal
year (year on year (YoY)) to ¥116,620mn, operating profit rose 33.7%* to ¥9,165mn, ordinary profit grew 38.6%
to ¥10,493mn, and profit attributable to owners of parent increased 53.9% to ¥7,707mn. The Company attained
record-high net sales and profit in all items. The main factor contributing to net sales and profit growth was thesteady implementation of the various measures in the Medium-Term Management Plan. DX projects for government
ministries and agencies were brisk in the Think Tank & Consulting Services business. In the IT Services business,finance and credit cards projects performed strongly and building a solid track record in DX-related projects andthose for new customers contributed to robust results. Profits grew as a result of the net sales growth effect andsteady progress in improving the quality and productivity of its core business. This is the outcome of handling larger
projects and optimal deployment of human resources, which raised productivity and profit margins.
*	The Company adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) from
FY9/22, so the comparison of results with those of the previous period are included as reference values.

2. Consolidated outlook for FY9/23
For the FY9/23 consolidated results, the Company forecasts a 1.2% YoY increase in net sales to ¥118,000mn,
1.5% growth in operating profit to ¥9,300mn, 1.0% rise in ordinary profit to ¥10,600mn, and 15.7% decrease inprofit attributable to owners of the parent to ¥6,500mn. Although the Company projects a YoY decline in profit
attributable to owners of the parent due to the dropout of extraordinary profit including profit from the sale ofinvestment securities recorded in FY9/22, it forecasts record-high net sales for the second year in a row. In FY9/23,
the Company plans to conduct upfront investment aimed at addressing issues that emerged when implementing
the Medium-Term Management Plan and further growth. For this reason, the Company forecasts a 5.6% YoYfall in ordinary profit of the Think Tank & Consulting Services business to ¥4,900mn. Nonetheless, the Company
forecasts YoY growth in ordinary profit on a consolidated basis due to higher net sales driven by business growth andproductivity improvements as a result of office consolidation and other measures. At FISCO, we think the Company
can expect accelerated growth in FY2024 onward by investing upfront for future growth.

We encourage readers to review our complete legal statement on “Disclaimer” page.

01 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Summary

3. Overview of Medium-Term Management Plan
In November 2020, the Mitsubishi Research Institute Group announced the Medium-Term Management Plan (FY9/21
to FY9/23), in which it set out its three basic strategies of “VCP management,” “consolidated management,”
and “management under the new normal.” It aims to build a foundation as a company that achieves sustainablegrowth by strengthening two of its four types of functions (A: Research and Recommendations and D: Societal
Implementation) and creating and growing new businesses such as the DX business. Based on this, the specificfinancial targets for FY9/23 include ordinary profit of ¥10bn (CAGR of 12%) and Return on Equity (ROE) of 10%.
*	“ VCP (Value Creation Process) management” aims to resolve societal issues and to grow business opportunities
through business activities with an awareness of connecting to the provision of four types of value (A: Research &Recommendations, B: Analysis & Conceptualization, C: Design & Testing, and D: Societal Implementation) as a full-range
research institute group.

Based on the above basic policy, the Group is conducting three business-related transformations of “GrowthBusinesses Transformation,” “Core Businesses Transformation,” and “Think Tank Function Transformation,” andtwo infrastructure-related transformations of “Human Resources and Organizational Culture Transformation” and“Management Systems Transformation.” Through these transformations, its policy is to grow the total sum of “social
value” realized by resolving societal issues, “non-financial value” realized by the sustainable growth of individuals
and organizations, and “financial value” brought about by business growth to achieve both sustainable growth andimproved shareholder value. The Company has so far made steady progress in building up a track record in a growthbusiness (DX), improvement in the quality and productivity of core businesses, and strengthening collaboration
between Mitsubishi Research Institute, Inc. and Mitsubishi Research Institute DCS (DCS). As a result, the Company
attained its financial targets of ¥10bn in ordinary profit and ROE of 10% one year ahead of schedule in FY9/22. The
Company intends to set a higher target for ordinary profit in FY9/23.
Key Points
A think tank group that “resolves societal issues” as a business entity in addition to Research & Recommendations
and other functions• In FY9/22, every sales and profit item achieved record-high results• Businesses are growing through the measures in the Medium-Term Management Plan, so achieved the plan’sordinary profit and ROE target ahead of schedule• Investing upfront to accelerate growth further in FY9/23•

We encourage readers to review our complete legal statement on “Disclaimer” page.

02 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Summary

Results trends
Net sales (left)

Operating profit (right)
(¥mn)

(¥mn)
9,165

120,000

90,0009,300

10,000

7,500

6,853
6,231
5,130

60,000116,62090,02992,020118,000

5,000

103,030

30,000

2,500

0

0

FY9/19FY9/20FY9/21

FY9/22

FY9/23 E

Note: Due to the adoption of the Accounting Standard for Revenue Recognition, etc., from FY9/22, the method of recording
net sales has changed
Source: Prepared by FISCO from the Company’s financial results■ Company profile
A think tank group focused on resolving societal issues that covers
the full process from Research & Recommendations to Societal
Implementation. Since its establishment, it has been contributing toa prosperous future society through resolving societal issues
1. Company profile
The Company was established in 1970 through investment by 27 companies in the Mitsubishi Group as a business tocommemorate the centenary of the Mitsubishi Group, and it can be said to be a pioneering private sector think tank.
It provides think tank and consulting services and IT services to a wide range of customers, from government ministries and agencies and finance and credit cards-related companies, through to general private-sector companies.
In the 1980s, the Company established businesses in four think tank fields (economics and management, society
and the public sector, science and technology, and systems and information), and then in the 1990s, it forged asolid presence supporting policy development for government ministries and agencies. On entering the 2000s, itmade a consolidated subsidiary of DCS and launched a fully-fledged ICT solutions business. In recent years, it
has been progressing “VCP management,” in which it undertakes the Value Creation Process, from Research &Recommendations through to Societal Implementation.

We encourage readers to review our complete legal statement on “Disclaimer” page.

03 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Company profile

2020 was the 50th anniversary of the Company’s establishment. On considering society and the role that theCompany has played within it up to the present time and furthermore the role that each employee is expected
to play in the future, it formulated its New Guiding Principles, that “We, the Mitsubishi Research Institute, willcontinually envision a desirable future, resolve societal issues, and lead change in society to co-create a sustainable
and abundant future.” Toward the next 50 years, it is ready to conduct daily work with greater awareness of its
responsibility as a company that resolves societal issues.
History
Date

Summary

May 1970

Mitsubishi Research Institute, Inc. was established with capital of ¥500mn in Yurakucho, Chiyoda-ku, Tokyo, in order to conductbusinesses including survey and analysis work, outsourced survey and consulting work, and information processing services

October 1970

Technology & Economy Information Center, Inc. (currently MRI Business, Inc.) was established and started information processing
services and printing-related work

May 1979

The head office was relocated to Otemachi, Chiyoda-ku, Tokyo

May 1984

System 21 Inc. (currently MRI Research Associates Inc.) was established and expanded software development work and asurveys and analysis business related to it

August 1987

MRI Career Staff Inc. (currently MD Business Partner Inc.) was established and started a human resources dispatch business
related to survey support work, etc.

October 2000

Newly established the Business Solutions Division and started a fully-fledged solutions business

December 2004

Acquired the shares of Diamond Computer Service Co., Ltd. (currently Mitsubishi Research Institute DCS Co., Ltd.)March 2005

Acquired additional shares of Diamond Computer Service Co., Ltd. (currently Mitsubishi Research Institute DCS Co., Ltd.) andmade it a subsidiary

April 2005

Alongside the new establishment of the Consulting Business Division, strengthened the business structure and sales structure forprivate-sector companies through a business collaboration with Bank of Tokyo-Mitsubishi, Ltd. (currently MUFG Bank, Ltd.)

April 2007

Changed the trade name of Diamond Computer Service Co., Ltd. to Mitsubishi Research Institute DCS Co., Ltd.

December 2008

Acquired additional shares of Mitsubishi Research Institute DCS Co., Ltd. (ratio of voting rights held of this company, 80%)

June 2009

In order to strengthen the ERP (companies’ core work systems) business, established MRI Value Consulting Co., Ltd. through a
joint venture with Mitsubishi Electric Information Systems Corporation

June 2010

Conducted a company split of consolidated subsidiary Diamond Fuji Soft Co., Ltd. and made Mitsubishi Research Institute DCS
Co., Ltd. a wholly-owned subsidiary. Changed trade name to MRV Solutions Co., Ltd.

September 2010

Designated as an issue listed on the Tokyo Stock Exchange (TSE) 1st section

October 2010

Consolidated subsidiary MRV Solutions Co., Ltd. conducted an absorption merger of MRI Value Consulting Inc. and the tradename was changed to MRI Value Consulting & Solutions Co., Ltd.

December 2011

Mitsubishi Research Institute DCS Co., Ltd. conducted an absorption merger of consolidated subsidiary DCS Business Partner
Co., Ltd.
Changed the trade name of consolidated subsidiary DC Operations Co., Ltd. to MD Business Partner Co., Ltd.

April 2014

For an alliance for a collaborative platform business, acquired the shares of JBS, Inc. (currently Japan Business Systems, Inc.) andmade it an equity-method affiliate

May 2018

Entered-into a business and capital alliance with INES Corporation in order to expand cutting-edge technological services andsystems solutions, focused on the public sector and financial fields

October 2019

Made INES Corporation an equity-method affiliate in order to further strengthen the alliance and to accelerate joint initiatives innew business fields

December 2020

Opened a base in Vietnam (Hanoi) toward developing a business to solve societal issues overseas

February 2021

Opened a base in the UAE (Dubai)

April 2022

Listing was transferred to the TSE Prime market

Source: Prepared by FISCO from the companies’ securities reports

We encourage readers to review our complete legal statement on “Disclaimer” page.

04 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Company profile

2. The features and strengthens of the Mitsubishi Research Institute Group(1) Work for government ministries and agencies is its solid business foundation
The Company, which forged a solid presence in the 1990s supporting policy development for government ministries and agencies, subsequently also actively supported government’s policy development, systems design, andproject promotion and built strong relationships with the main government ministries. In fact, in FY9/22, 30.8%
of its total consolidated net sales were provided by government ministries and agencies and they are one of the
Mitsubishi Research Institute Group’s main customers. The track record and the trust that it has accumulated
over many years from the policy development stage and its integrated strengths that enable it to respond across
many fields for various issues are strengths that competitor companies cannot imitate overnight.
The work outsourced to the Group in FY2020 by government ministries and agencies included the “COVID-19
AI and Simulation Project” (Cabinet Secretariat), “Development Demonstrations for Realizing Local 5G to Solve
Local Issues,” (Ministry of Internal Affairs and Communications), and “Project to acquire, disseminate, and promoteinternational standards relating to energy saving, etc.” (Ministry of Economy, Trade and Industry). In FY2021, it
was outsourced projects in a wide range of fields from various government ministries and agencies, including“Survey research relating to the revitalization of the data distribution market” (Cabinet Secretariat) and “Project
for a ‘dialogue with the child-raising generation in regions’ relating to JECS surveys” (Ministry of the Environment,
Minister’s Secretariat). From this, it can be seen that the Group is playing its part in policy development in Japan.

Percentages of total consolidated net sales by customers (FY9/22)

General Private
Sector
23.5%

Public Sector
30.8%

Finance and credit card
45.7%

Source: Prepared by FISCO from the Company’s results briefing materials

We encourage readers to review our complete legal statement on “Disclaimer” page.

05 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Company profile

Examples of the main projects outsourced from government ministries and agencies (FY2021)
Customer Name

Project nameCabinet Secretariat

Survey research relating to the revitalization of the data distribution market

Cabinet Secretariat

Survey research work for the demonstration and introduction of the main technologies torealize the with-COVID-19 era

Cabinet Office, Director-General for Policy Planning(responsible for economic and financial analyses)

Analysis of economic trends utilizing real time data (household accounts app datautilization)

Digital Agency, Minister’s Secretariat

Procurement support and process management support work to update the government’s
procurement-related systems

Reconstruction Agency, Director-General

Project to strengthen the outside of prefecture independent evacuee support system

Reconstruction Agency, Director-General

Survey and analysis work relating to reputation in Japan and overseas

Ministry of Internal Affairs and Communications,
Minister’s Secretariat

Technological support to update stationary satellite monitoring equipment, etc.

Ministry of Internal Affairs and Communications,
Minister’s Secretariat

Survey research toward the societal implementation of smartphones equipped with the My
Number function

Ministry of Justice, Minister’s Secretariat

Work to support process management, etc., for the family register information coordination
system, etc.

Ministry of Foreign Affairs, Minister’s Secretariat

Local survey work on abandoned chemical weapons in China

Ministry of Finance, Minister’s Secretariat

Support for project management, etc., for the accounting work electronic decision-making
infrastructure and the evidence document management system

Ministry of Education, Culture, Sports, Science andTechnology, Education Policy Bureau

Demonstration research for the utilization of advanced technologies in vocational schools

Ministry of Education, Culture, Sports, Science andTechnology, Education Policy Bureau

Project to promote vocational schools’ recurrent education

Ministry of Health, Labour and Welfare, Minister’s
Secretariat

Survey project on securing the reliability of online clinical trials

Ministry of Health, Labour and Welfare, Health Policy
BureauComprehensive support and survey work for a medical venture total support project

Ministry of Agriculture, Forestry and Fisheries,
Minister’s Secretariat

Outsourced survey project relating to the promotion of food-tech

Ministry of Economy, Trade and Industry, Minister’s
Secretariat

Project for healthcare services’ societal implementation (project for innovation promotion
support, etc.)

Ministry of Economy, Trade and Industry, Minister’s
Secretariat

Survey on actual conditions of manufacturing infrastructure technologies, etc.
(Survey on the technological development and system establishment toward the realizationof a flying car)

Ministry of Land, Infrastructure and Transport,
Minister’s Secretariat

Survey and PR work relating to various issues to improve productivity at construction sites

Ministry of Land, Infrastructure and Transport,
Minister’s Secretariat

Survey on the possibility of technological cooperation in the railway field between Japanand the EU

Ministry of the Environment, Minister’s Secretariat

Project to evaluate the impact of the increasing severity of disasters due to climate change

Ministry of the Environment, Minister’s Secretariat

Project for “dialogue with the child-raising generation in regions” relating to Ecochil surveys

Source: Prepared by FISCO from the Company’s website(2) A diverse pool of human resources with high levels of expertise
One of the factors that has enabled the Company to acquire a track record of many outsourced projects fromgovernment ministries and agencies is that it has researchers with high levels of specialism covering a wide
range of fields. In particular, more than 70% of the Company’s researchers specialize in the natural sciences.
The government’s policy development also requires knowledge relating to the natural sciences, showing highcompatibility with and needs for the Company’s services. Based on the Medium-Term Management Plan and as
one investment in growth, the Mitsubishi Research Institute Group is conducting joint research and personnel
exchanges with research institutes and universities in Japan and overseas. Going forward also, the quality of thehuman resources pool in the Mitsubishi Research Institute Group is expected to improve even more, and as wellas contributing to VCP management, it seems likely to continue to be the source of its competitive advantages.

We encourage readers to review our complete legal statement on “Disclaimer” page.

06 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Company profile

The academic specialties of the Company’s researchers (as of September 30, 2021)

Source: Reprinted from the Company’s website(3) A solid business foundation in the finance and credit cards fields
DCS, one of the main Group companies, was established by separating and making independent the computer
outsourcing computing division of Mitsubishi Bank (currently MUFG Bank). From this formation, DCS conducts aninfrastructure business mainly for the Mitsubishi Group, including development, maintenance, and management
work for core systems in the finance and credit cards fields. The finance and credit cards business provided 45.7%of the FY9/22 consolidated net sales, so it is one of the Mitsubishi Research Institute Groupe’s main businessfields in the same way as those provided by government ministries and agencies.
In the Medium-Term Management Plan, the Mitsubishi Research Institute Group set the DX business, the subscription-based business, and the overseas business as its growth businesses. Through actively investing in growthfields using the cash generated by the businesses for the government ministries and agencies and the financeand credit cards fields, which are its base customers, at FISCO we estimate that in the medium to long term, it
will accelerate the growth of sales from general industry (private sector) customers as well.
(4) High quality discussions on the Board of Directors
Many of the members of the Company’s Board of Directors have experience of top management in Mitsubishi
Corporation <8058>, MUFG Bank, and Mitsubishi Heavy Industries <7011>. It is said that there are active
discussions on the Board through these directors that possess this abundance of experience. In the future the
VUCA* era will begin in earnest, and in this situation, the Board of Directors is expected to act as the Mitsubishi
Research Institute Group’s compass and to guide it.
*	VUCA standards for Volatility, Uncertainty, Complexity, Ambiguity. It is used as a word to express the current management
environment that is highly uncertain and fluid.

We encourage readers to review our complete legal statement on “Disclaimer” page.

07 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Company profileOn the other hand, from the trends of prioritizing ESG and strengthening corporate governance, going forward
it would seem that the Company will be required to increase directors from outside the Mitsubishi Group andspecifically, to add to the Board of Directors experts who have acquired deep knowledge on DX-related. In addition
to securing diversity, at FISCO we think that holding discussions on the Board in which expertise has also been
secured will serve to increasingly strengthen its role as the Group’s compass.

■ Business overview
The Company is responsible for services ranging from Research &Recommendations to Societal Implementation in VCP management,
while DCS is responsible for Societal Implementation focused on IT
Services
In the Mitsubishi Research Institute Group, the Company is mainly responsible for Think Tank & Consulting Services
and DCS for IT Services.
Think Tank & Consulting Services involves providing survey research and consulting services based on the findingson policy and systems that the Company has accumulated since its establishment as a full-range research institute,the findings on and analytical capabilities for societal issues, and the quantitative analysis evaluation techniques andprediction techniques of its researchers who have a wide range of knowledge relating to next-generation advanced
technologies and who specialize in scientific and technological fields. For government ministries and agencies, it
conducts surveys and analyses, policy planning and formulation, and consulting and business support in the socialand public sector fields, including national land maintenance, transportation, information communication, regional
management, medical care and welfare, and education, and also in the science and technology policy fields, such as
the environment, resources and energy, science and technology, and safety policies. For private-sector companies,
it provides consulting on areas including management and business strategies, marketing strategies, personnel
system and organizational reforms, sustainability and ESG management, work innovations, and also ICT consultingthat realizes strengthened business competitiveness.
For IT Services, DCS is the core company and it utilizes the findings and advanced ICT accumulated through theThink Tank & Consulting Services to provide software development, management, maintenance, and information
processing and outsourcing services to various customers, including in the finance, manufacturing, distribution,
services, and education fields. Also, in fields like management system innovations that utilize ICT and businessmodel innovations that utilize the Internet, it provides total support for implementing ICT for management from the
upstream through to the downstream. These various services are provided to customers while collaborating withJapan Business Systems, Inc. <5036> (hereafter “JBS”) *, INES Corporation <9742> (hereafter “INES”), and otherGroup companies.
*	Listed on the Tokyo Stock Exchange (TSE) Standard Market on August 2, 2022

We encourage readers to review our complete legal statement on “Disclaimer” page.

08 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Business overview

1. The units providing Think Tank & Consulting Services
The following are the business units that constitute the Company and that are responsible for the functions of A:
Research & Recommendations, B: Analysis & Conceptualization, C: Design & Testing, and D: Societal Implementation
in VCP management.
(1) The Think Tank Unit
This unit is responsible for A: Research & Recommendations in VCP management. In recent years, it has analyzed elements such as the post-COVID-19 international situation, economic trends, and trends in advanced
technologies, and at the same time, it has depicted an image of what the society of the future should be from a
medium- to long-term perspective and proposed solutions to realize it. Also, in order to create trends in society, it
has been active in areas such as participating in government councils and industry committees and disseminating
information through the media (it conducts these activities as an independent business). In particular, in theMedium-Term Management Plan, this unit is actively progressing Research & Recommendations activities with
an awareness of the connections between the VCP priority fields (“healthcare,” “human resources,” “cities andmobility,” “energy,” “information communication,” “food and agriculture,” “recycling,” and “resilience”).
(2) The Policy and Consulting Unit
It is responsible for the functions of B: Analysis & Conceptualization and C: Design & Testing, which are the coreof VCP management, and it conducts the research and consulting business, a core business. Its customers
include government ministries and agencies and it supports policy development, system design, and project
promotion through cooperating with experts and business partners. It focuses on growth fields that have a highpublic aspect and which are closely related to policy trends, such as healthcare and energy, and it participatesin projects including surveys and research, technical evaluations, analyses and predictions of the future using
proprietary models, project management, and social demonstrations.
The business areas and the main customers of the Policy and Consulting Unit
Headquarters

Business areas

Main customers

Smart Region Division

Smart cities, infrastructure DX, mobility, andEBPM (Evidence Based Policy Making)Ministry of Land, Infrastructure and Transport, Ministry ofInternal Affairs and Communications, railway operators

Healthcare & Wellness Division

Medical care and nursing care, healthmanagement

Ministry of Health, Labour and Welfare, Japan Agency
for Medical Research and Development

Sustainability Division

The environment, renewable energy,
decarbonized society

Ministry of the Environment, Ministry of Economy, Tradeand Industry, electric power companies

Frontier Technologies Division

Advanced technologies, space and oceans,defense and intelligence

Ministry of Internal Affairs and Communications, Cabinet
Secretariat, Ministry of Economy, Trade and Industry,
telecom carriers

Safety & Industry Division

Disaster prevention and risks, nuclear safety,
industrial innovation

Ministry of Economy, Trade and Industry, Cabinet Office

Source: Prepared by FISCO based on the Mitsubishi Research Institute Group Report 2021

(3) The Business and Consulting Unit
With private-sector companies as the main customers, this unit provides a one-stop service, from proposal
formulation through to implementation, by ascertaining the essential issues facing society and customers. It
covers VCP management from B: Analysis & Conceptualization and C: Design & Testing through to D: Societal
Implementation. In the Medium-Term Management Plan, it is actively progressing collaborations with Group
companies and external partners in order to grow the “subscription-based business,” which is one of the growthbusinesses. Also, by feeding back to the A: Research & Recommendations function the data and expertise
acquired through the Societal Implementation function, it contributes to creating solution policies that are realistic
and to improving the value of the research and consulting business as a whole. It is one of the units that are
expected to become even more active in the future.

We encourage readers to review our complete legal statement on “Disclaimer” page.

09 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Business overview

The Business Consulting Unit’s business areas and examples of a subscription-based businessBusiness

Business area

Research and consulting business
All industries

Administrative strategy, business strategy, product and service strategy, management strategy, operation strategy

Industry Strategies

Energy, healthcare, mobility, ICT, human resources, food & agriculture etc.

Implementation business
EnergyMPX (wholesale electric power transaction information), mega-solar power generation business (development andasset management)

Urban life and mobility

Region Ring (regional digital currency)

Healthcare

Email health notifications (checkup reminders)

Human resources

PRaiO (Matches new college graduates with companies based on information in job application forms), crexta(Human resource management system), JOBMINEs (Job matching system)

Food and agriculture

HACCP navi (food hygiene management)

Source: Prepared by FISCO based on Mitsubishi Research Institute Group Report 2021

(4) The Digital Transformation Unit
To strengthen the response to the rapidly growing DX market, this unit was newly established in October 2020 toaccelerate business in the D: Societal Implementation area of VCP management. Targeting government ministries
and agencies, private-sector companies such as in the manufacturing industry, financial institutions, and others,
it is responsible for developing DX-related solutions and services through co-creation with a variety of partners,
centered on three Group companies, DCS, JBS, and INES. In particular, it is establishing and progressing “DXjourney*1,” “new normal*2,” “data-driven management*3,” and “local government DX” as the important DX themes.
It is working to strengthen the D: Societal Implementation function while also being aware of actively collaboratingwith partners.
*1	Accompanying support to realize DX.
*2	work style reforms through digital.
*3	Utilizing data and AI to increase the sophistication of management.

2. The units providing IT Services
The below units belong to DCS and are mainly responsible for D: Societal Implementation in VCP management.
(1) The Industry IT Unit
It is developing two business pillars, the Solution Business and the Service Business. In the Solution Business, it
provides support to implement to DX that is tailored to customers’ needs and situations. In the Service Business,
it is developing a HR (human resources) business and an education business and is focusing on introductions andspreading the use of PROSRV, a HR salary outsourcing service, and miraicompass, an Internet applications service
for elementary, junior high and high schools. Approximately 2,000 business offices have introduced PROSRV andaround 1,200 schools have introduced miraicompass, so it seems that needs for these services are high. Since
demand for miraicompass continues to be strong, it is enhancing development for public junior high and highschools in addition to private junior high and high schools, as well as universities.
(2) The Financial IT Unit
It provides ICT solutions to financial institutions such as the Mitsubishi UFJ Financial Group <8306> (MUFG). It
is responsible for many large-scale projects and important projects, including for banks’ core systems. In recent
years, based on the Medium-Term Management Plan, it has been gradually progressing various operations,
including deepening transactions with existing companies through DX and opening-up new business areas.

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10 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Business overview(3) The Digital Transformation Unit
Centered on systems infrastructure, it is responsible for the research and development of solutions and services
that contribute to customers’ promotion of DX. For systems infrastructure, it is developing cloud services andstorage services that utilize the data centers of DCS. It also has a long history of ICT operations and work-operations outsourcing, and in addition to traditionally outsourced operations, it is also contributing to the digitaltransformation of ICT operations through platform implementation support, and contributing to work style reforms
through comprehensive paperless support service.
The positions of each unit in VCP management

Source: Mitsubishi Research Institute Group Report 2021

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11 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html■ Results trends
Record-high net sales two years running in FY9/22; achieved
ordinary profit target of the Medium-Term Business Plan ahead ofschedule. Profit margins improve on progress of the Medium-TermBusiness Plan
1. Results for FY 9/22
In the FY9/22 consolidated results, net sales increased 13.2% YoY to ¥116,620mn, operating profit rose 33.7%
to ¥9,165mn, ordinary profit grew 38.6% to ¥10,493mn, and profit attributable to owners of parent increased
53.9% to ¥7,707mn. A factor causing sales and profits to increase was the steady progress of the Medium-Term
Management Plan.
The Company posted record-high net sales for the second year running. Factors contributing to net sales growth
was building up a solid track record in the DX-related business as well as progress in cultivating new customers
in the IT Services segment. Ordinary profit also exceeded ¥10,000mn for the first time. As well as the net sales
growth effect, progress with improvement in the quality and productivity of core businesses (one of the initiativesof the Medium-Term Management Plan) contributed. The Company also made solid progress in the shift to larger
and higher value-added projects and optimal deployment of human resources, as well as communicating well withcustomers to ensure optimal deployment of human resources, focusing on projects with higher profit margins andproductivity. Consequently, the consolidated operating profit margin rose 1.2pp YoY to 7.9%. In particular, theimprovement of quality and productivity was significant in IT services, whose profit margin had room for improvement.
The segment’s operating profit grew a sharp 58.2% YoY and its operating profit margin went up 2.3pp to 7.4%. As
a result of these qualitative transformations, the Company attained the ordinary profit target of the Medium-Term
Management Plan one year ahead of schedule, as well as the ROE target. ROE was 12.8% (up 3.7pp YoY) in FY9/22
due to steady progress with the Medium-Term Plan and growth in net sales and profit.
The Company adopted the Accounting Standard for Revenue (ASBJ Statement No. 29, March 31, 2020) from thestart of FY9/22. The comparison of results with those of the previous period are included as reference values. As aresult of the change in accounting standards, net sales increased ¥2,582mn, operating profit, ordinary profit, andprofit before income taxes each increased ¥1,030mn, and profit attributable to owners of parent increased ¥567mn.
The results when excluding the effects of this change of accounting standard were that net sales increased 10.7%
YoY to ¥114,038mn, operating profit rose 18.7% to ¥8,135mn, ordinary profit rose 25.0% to ¥9,463mn, and profit
attributable to owners of parent increased 42.5% to ¥7,139mn.
As described in the Company’s securities report, in relation to the fiscal years of its main customers of government
ministries and agencies and private-sector companies, in a typical year many projects are completed in the period
from March to April, so there is a tendency for the operating rate to particularly increase in the 2Q. Following thechange to the accounting standard, the tendency for results to be concentrated in the 1H has further strengthened
and it is necessary to be aware of the seasonal factors that cause results to fluctuate.

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12 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Results trends

In the results by segment, in Think Tank & Consulting Services, net sales increased 20.2% YoY to ¥48,548mn,
operating profit rose 12.7% to ¥4,115mn, and ordinary profit grew 23.7% to ¥5,190mn. Large-scale projects forgovernment ministries and agencies, such as AI simulation and local 5G, the latest ICT and energy-saving projects,
raised the top line as the Company aggressively promoted its DX-related business. As a result, the Company posted
record segment profit. DX-related topics in the Think Tank & Consulting Services segment include the launch ofRegion Ring (a regional problem solutions-orientated digital regional currency) in April 2022, the start of providing
a scientific long-term care prevention package for municipalities that utilizes the information platform developed
by Atlas Information Service Co., Ltd., in August 2022, and the business split and launch of an online information
service for wholesale electric power transactions called MPX (MRI Power Price Index) business in October 2022.**	On August 4, 2022, the Company announced it had performed a business split of the MPX business and made it a separate
company.

In IT Services, net sales were up 8.6% YoY to ¥68,072mn, operating profit rose 58.2% to ¥5,048mn, and ordinary
profit grew 57.7% to ¥5,301mn. The growth of sales in the field of finance and credit cards, a core business, contributed to net sales growth, as well as an increase in projects for government agencies and ministries, and building
up a track record in the DX-related business in fields other than finance and credit cards. Profit margins increased
substantially as a result of quality and productivity improvements in core businesses and optimal deployment of
human resources. These factors contributed to record net sales and profit. DX-related topics in the IT Services
segment include the “Ransomware Protection Solution” that integrates security and data protection features and“Link & Robo for Growing,” which provides a communication robot service for special support classes and schoolclasses (launched in September 2022). Mitsubishi Research Institute also began providing a greenhouse gas
management tool for marine transport companies, which utilizes the big data analysis tool of ForePaaS*, a French
company in which the Company has a stake, based on merchandising collaboration. These examples illustrate how
the Company is building a track record outside the finance and credit card businesses.
*	ForePaaS was acquired by OVH cloud SA, Europe’s leading cloud services company. OVH cloud and the Group aim togrow their businesses further through a business alliance.

Results for FY 9/22(¥mn)
FY9/21

FY9/22

Results

vs. net sales

Results

vs. net sales

103,030-

116,620-

13.2%

Think Tank & Consulting Services

40,37639.2%

48,548

41.6%

20.2%

IT Services

62,65360.8%

68,072

58.4%

8.6%

Cost of sales

79,58277.2%

90,039

77.2%

13.1%

SG&A expenses

16,593

16.1%

17,415

14.9%

5.0%

Operating profit

6,853

6.7%

9,165

7.9%

33.7%

Ordinary profit

Net sales

YoY

7,568

7.3%

10,493

9.0%

38.6%

Think Tank & Consulting Services

4,197

10.4%

5,190

10.7%

23.7%

IT Services

3,361

5.4%

5,301

7.8%

57.7%

Adjustment

9

-

1

-

-

5,009

4.9%

7,707

6.6%

53.9%

Profit attributable to owners of parent
Source: Prepared by FISCO from the Company’s financial results

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13 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Results trends

Has deep shareholders’ equity due to the accumulation of retained
earnings. Both the current ratio and non-current ratio are excellent
and long-term and short-term liquidity are sound
2. Financial condition and business indicators
Looking at the financial condition in FY9/22, total assets increased ¥14,947mn from the end of the previous period to¥114,652mn. The main change factors were that in current assets, accounts receivable – trade increased ¥5,779mn
and contract assets increased ¥14,561mn because of a rise in sales and orders and adoption of the AccountingStandard for Revenue Recognition. Short-term investment securities increased ¥5,000mn, but inventory decreased¥9,517mn.
Total liabilities increased ¥7,632mn from the end of the previous period to ¥43,500mn. The main contributing factors
were increases of ¥4,793mn in accrued expenses and ¥2,928mn in income taxes payable in current liabilities. Total
net assets increased ¥7,315mn on the end of the previous period to ¥71,151mn. Retained earnings rose ¥6,971mn,
mainly due to the recording of profit attributable to owners of parent.
Looking at the financial indicators, the equity ratio is higher than 50% while the current ratio is 244.5% and thenon-current ratio is 64.6%, so it seems there are no problems with liquidity on hand in either the short or long term.
From this, it can be said that the Company’s financial condition is excellent.
Consolidated balance sheet and key financial indicators(¥mn)
FY9/21

FY9/22

ChangeCurrent assets

59,14273,921

14,779Cash and deposits

29,39728,157-1,240Non-current assets

40,56140,730169

Total liabilities

35,86743,500

7,632

Current liabilities

20,61830,2399,621

Non-current liabilities

15,24913,261-1,988

Total net assets

63,836

71,151

7,315

Retained earnings

43,74950,721

6,971

Total assets

99,704

114,652

14,947<Key financial indicators>
Equity ratio

56.4%

55.0%

-1.4ptCurrent ratio

286.8%

244.5%-42.3pt

Non-current ratio

72.1%

64.6%

-7.5ptSource: Prepared by FISCO from the Company’s financial results

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14 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html■ Outlook
Forecasts net sales and profit growth again in FY9/23. Will invest for
growth to prepare for further earnings expansion
The Company announced its forecasts for the FY9/23 consolidated results, with net sales to increase 1.2% YoY
to ¥118,000mn, operating profit to rise 1.5% to ¥9,300mn, ordinary profit to grow 1.0% to ¥10,600mn, and profit
attributable to owners of parent to fall 15.7% to ¥6,500mn. The Company assumes a weaker growth rate for net
sales, because it forecasts a decline in net sales of the Think Tank & Consulting Services segment due to large
projects continuing from FY9/22 being scaled back. The Company forecasts lower segment profit as well because
it plans to invest for growth in accordance with the Medium-Term Management Plan. An investment of ¥1,200mn isplanned for Human Resources Transformation, work style reforms, and R&D, but the Company still forecasts a YoY
increase in ordinary profit based on the effects of increased profit through business growth and cost reductions suchas office consolidation to improve productivity. This also indicates that the effects of the Medium-Term Management
Plan are being reflected in earnings results. The Company projects a YoY decline in profit attributable to owners of
the parent due to the dropout of extraordinary profit including profit from the sale of investment securities recorded
in FY9/22.
By segment, for Think Tank & Consulting Services, the forecasts are for net sales to decrease 5.3% YoY to¥46,000mn and ordinary profit to fall 5.6% to ¥4,900mn. Although the Company expects brisk demand for projects
for government ministries and agencies in key policy areas, work and business innovation consulting and ICT
consulting that entails the use of packaged solutions for private-sector companies, it forecasts lower profit due toinvesting for growth. Investment for growth will be allocated to hiring personnel, resource redeployment, work stylereforms, and R&D.
For IT Services, the Company expects net sales to increase 5.8% YoY to ¥72,000mn and ordinary profit to rise 7.5%
to ¥5,700mn. It assumes continued brisk net sales in the finance and credit card fields. The Company also plans togrow new services which have been performing strongly, including systems that harness big data platforms suchas a greenhouse gas emissions management and reduction tool for marine transport companies, the miraicompass
internet applications service for junior and senior high schools and universities, and personnel salary BPO service
PROSRV. It will also progress collaboration with DCS to strengthen further its track record in DX projects forprivate-sector companies. The Company plans to improve profit margins by curtailing expenses while investing for
future growth, as well as shifting human resources to fields that offer greater added value, including more upstream
stages of projects such as concept design and requirements definition.
FY9/23 is likely to be a year in which the Company will focus on upfront investment to grow future earnings andenterprise value. At FISCO, we expect the seeds sown as upfront investment to contribute to earnings in the next
medium-term plan period.
Consolidated outlook for FY9/23
(¥mn)
YoY

FY9/22
Results

FY9/23
Forecast

ChangeRate (%)

116,620

118,000

1,379

1.2%

Operating profit

9,165

9,300

134

1.5%

Ordinary profit

10,493

10,600106

1.0%Profit attributable to owners of parent

7,707

6,500

-1,207-15.7%

Earnings per share (¥)

474.67399.99-74.68-Net sales

Source: Prepared by FISCO from the Company’s financial results

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15 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Outlook

The Company’s approach to growth investment

Source: The Company’s results briefing material■ Medium- to long-term growth strategy
Focused on strengthening societal implementation functions under
VCP Management and Consolidated Management. Attained ordinary
profit and ROE targets ahead of schedule on steady progress ofquality and productivity of core businesses
1. Summary of the Medium-Term Management Plan
In the Medium-Term Management Plan announced in November 2020, the Mitsubishi Research Institute Group
has set “VCP management,” “consolidated management,” and “management under the new normal,” as its threebasic strategies, and it is aiming to build the foundation on which to become sustainable growth companies bystrengthening the A: Research & Recommendations and D: Societal Implementation functions and creating andgrowing new businesses, including the DX business. Based on this, the specific financial targets for FY9/23 include
ordinary profit of ¥10bn (CAGR of 12%) and Return on Equity (ROE) of 10%. As previously explained, it achieved
the ordinary profit and ROE target in FY9/22 ahead of schedule. With regard to ordinary profit, it will aim for an evenhigher target.

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16 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Medium- to long-term growth strategy

For “VCP management,” which is one of the basic strategies, the Mitsubishi Research Institute Group’s value chain isdefined as A: Research & Recommendations, B: Analysis & Conceptualization, C: Design & Testing, and D: Societal
Implementation. With the starting point being the societal issues that exist within the world, in addition to enhancing
the functions of “B: Analysis & Conceptualization” and “C: Design & Testing” which it had originally developed into its
strengths, it aims to resolve these issues and increase business opportunities by developing business activities with
an awareness of the connections between each of the functions, such as conducting highly realistic A: Research& Recommendations with an awareness up to D: Societal Implementation. It also aims to have reforms take root insociety by being actively involved up to D: Societal Implementation. It has set healthcare, human resources, cities andmobility, energy, information communication, food and agriculture, and resilience as the priority fields. For example,
in the energy field, it is involved from Research & Recommendations for the energy policies that should be taken in
the future through to the management of a mega-solar business, and it is implementing VCP management provided
as one-stop, integrated management from A through to D. By progressing VCP management that is focused onthese priority fields, the Company intends to maximizing the three values of social value (resolving societal issues),
non-financial value (the sustainable growth of individuals and organizations), and financial value (business growth).
With regard to Consolidated Management, strengthening D: Societal Implementation function is important to enhancethe effectiveness of VCP Management. The Company will further promote collaboration with core Group companies
DCS, JBS, and INES to enhance the effectiveness of VCP Management and utilize the Group’s assets effectively.
In creating new businesses such as DX, the Company will also actively explore collaborations with companies andorganizations outside the Group, including startups, overseas companies, and major corporations.
“Management under the new normal” expresses various reforms conducted by the Group as a pioneer in the
post-COVID-19 society, and the acceleration of workstyle reforms internally. Through these reforms, it is realizing an
optimized work-life balance for employees and a maximized business performance. In addition, it is aiming to connect
the findings it obtains through pioneering these reforms to VCP management’s A: Research & Recommendations
and D: Societal Implementation, and thereby to create new business opportunities.
Based on these three basic strategies, the Mitsubishi Research Institute Group has also formulated Five
Transformations of “Growth Businesses Transformation,” “Core Businesses Transformation,” “Think Tank Function
Transformation,” “Human Resources and Organizational Culture Transformation,” and “Management Systems
Transformation,” and it is incorporating them into specific activities.

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17 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Medium- to long-term growth strategy

2. The paths taken for the five transformations(1) Growth Business Transformation
Toward the sustainable growth of the Mitsubishi Research Institute Group, the Company has set the “DX business,” “Subscription-based business,” and the “Global business” as the growth businesses. Focused on thesebusinesses, it intends to build a new earnings foundation and to convert its business model and business portfolio.
In the DX business, it has set “DX journey,” “new normal,” “data-driven management,” and “local government DX”
as the priority themes. Centered on the Digital Transformation Unit that was newly established within the Company
in October 2020, it is accelerating collaborations with DCS, JBS, and INES, and working to strengthen the DX
business. In FY9/22, the Company launched new services such as Region Ring, which is a regional problem
solutions-orientated digital regional currency, MPX, which is an online information service for wholesale electric
power transactions, and a greenhouse gas emissions management and reduction tool for marine transportcompanies based on merchandising collaboration to build up a solid track record in the DX business. According
to the Company’s results briefing materials, net sales of the DX business (about ¥32bn) had grown to account for
about 30% of total net sales in FY9/22 due to steady expansion in the business. This is an expansion by about
1.2 times compared to net sales of the DX-related business in FY9/20 (about ¥27bn). The Mitsubishi ResearchInstitute Group is aiming to increase the DX business’ share of consolidated net sales to more than 50% in themedium to long term, including from non-organic business expansion through M&A.
For the subscription-based business, the intention is to utilize the Mitsubishi Research Institute Group’s expertiseand intellectual assets to efficiently and continuously increase stable earnings. Specifically, it is working on two
types of subscription-based business, implementing solutions to societal issues through providing ICT solutions,and provides services to solve societal issues. It has already market launched many services, including MPX, which
is an online information service for wholesale electric power transactions; Region Ring, which is a regional problem
solutions-orientated digital regional currency; PRaiO, which is an entry sheets priority-level diagnosis service;
the crexta talent management service; the AI staff general guidance service in which an AI chatbot addresses
inquiries from residents; the JOBMINEs job matching system; the PROSRV personnel salary BPO service; andthe miraicompass Internet applications service. In the future, it plans to expand the scale of the services it has
already launched and to continuously launch new services.
For the Global business, the Company is utilizing the expertise cultivated in Japan as a leading country in resolving
societal issues to conduct business development focused on countries in Asia and the Middle East. In Hanoi,
alongside the aging population, it is currently cultivating problem awareness and promoting an understandingof the usefulness of Japanese-style systems, such as by holding symposiums. In Dubai in the Middle East, it isutilizing its track record and expertise in the environment and energy fields to establish a position of being thegovernment’s problem-solving partner. There remains plenty of room to apply Japan’s experiences to the societal
issues of other countries, and at FISCO, we anticipate that the percentage of total net sales provided by theoverseas business will increase in the future.

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18 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Medium- to long-term growth strategy(2) Core Business Transformation
For the research and consulting business, which is the earnings foundation for continuously investing in thegrowth businesses, the Company is aiming to improve quality and productivity in the financial solutions business.
While being aware of the connections up to D: Societal implementation in VCP management, in the researchand consulting business it is conducting proactive business development and project formation for government
ministries and agencies, local governments, and private-sector companies in the priority fields, which include
healthcare, energy, cities and mobility, human resources, information communication, and food and agriculture.
In the financial solutions business, while deepening collaborations with Group companies and partner companies,
the plan is to grow results through the multifaceted utilization of the data held by financial institutions to create
new businesses, including the DX business. The results of core business transformation were also reflected in
FY9/22 results. The number of projects worth over ¥100mn more than quadrupled, whereas small projects worth
less than ¥5mn decreased by 70%, respectively versus FY9/11. The shift to large projects meant the numberof projects decreased, but net sales and profit increased by 1.7 and 4.1 times, respectively versus FY9/11. The
profit margin of IT Services rose to almost 8%, illustrating how strengthening the management foundation andreviewing resource allocation improved productivity. As mentioned previously, the Company plans to redeploy
personnel to upstream stages of projects likely to produce higher added value. This move, combined with theshift to larger projects, is expected to raise profit margins.
Trends in the number of projects, net sales, and profit

Source: The Company’s results briefing material(3) Think Tank Function transformation
The starting point of VCP management is strengthening the A: Research & Recommendations function, which isthe foundation of the Mitsubishi Research Institute Group’s value creation process, through reforming the think tankbusiness. For example, on the Company website, it has created a page entitled “Novel coronavirus (COVID-19)
crisis countermeasures: analysis and recommendations,” and it is continuously disseminating information froma medium- to long-term perspective in a wide range of fields, from economics through to carbon neutrality. It
is also aiming to strengthen its Research & Recommendations capabilities, including by developing the humanresources who will undertake the Research & Recommendations function and coordinating with its network of
non-Group companies.
Furthermore, based on the awareness that AI will bring about destructive creation in the think tank business in the
future, the Company is progressing think tank DX internally with an eye to future business development, and it isactively promoting the utilization of ICT and AI in its think tank business processes. It is independently guiding thiscreation and destruction in the think tank business and starting to provide to external customers the experienceand expertise it has acquired from this*.
*	On June 30, 2021, the Company announced that it had started a service for the total support of “Implementing DX forplanning work.”

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19 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Medium- to long-term growth strategy(4) Human Resources and Organizational Culture Transformation
In order to secure and to develop the human resources who are the foundation of the value the Mitsubishi
Research Institute Group provides, the Company is progressing Human Resources and Organizational Culture
Transformation, including work style reforms. In its human resources strategy, it is strengthening the recruitmentof both new graduates and mid-career hires to build a human resources portfolio suitable for VCP management
and consolidated management. It is also aiming to attract and to retain excellent human resources by formulatinga human resources system and human resources develop plan with an awareness of diversity and specialisms.
For work style reforms, the Company is preparing an optimized working environment that combines the real andthe remote. For its organizational culture, it is working to permeate throughout the Group companies its new
Guiding Principles and Code of Conduct to form a culture in which employees take on the challenge of reforms.
(5) Management Systems Transformation
This transformation is aimed at realizing the Mitsubishi Research Institute Group’s sustainable growth and improved
enterprise value in the medium to long term. Specifically, in management meetings, the Company is further
enhancing the review and management system, including the various in-house committees that consult on
important matters. For consolidated management as well, it is strengthening the comprehensive risk management
structure and building a mechanism that can quickly and responsively deal with risks, such as those associatedwith new businesses. Moreover, for the infrastructure system that support business activities, it is preparing
infrastructure that is highly robust and implementing both offensive and defensive measures.
As previously stated, the results of the Medium-Term Management Plan are expressed specifically in numericalresults, and some financial targets have been achieved ahead of schedule. The growth investment in the fourpriority fields that are being strengthened through progressing the Medium-Term Management Plan (“humanresources,” “Research & Recommendations,” “R&D investment,” and “business infrastructure”) is expected tofurther contribute to the results growth and improvement of corporate value.

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20 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html

Medium- to long-term growth strategy

Conceptual diagram of the Medium-Term Management Plan 2023

Source: Mitsubishi Research Institute Group Report 2021

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21 22

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

Mitsubishi Research Institute, Inc.

5-Jan.-2023

3636 Tokyo Stock Exchange Prime Market

https://ir.mri.co.jp/en/index.html■ Shareholder return policy
Dividend policy prioritizes stable dividends. Alongside theexpansion of business scale, achieved a higher dividend for the 10thconsecutive period
The Company’s basic policy for shareholder returns is to stably pay dividends. It does not announce specific targets,
such as for the dividend payout ratio, but it has formulated a dividend policy, that “Based on continuously paying
stably dividends, we will work to raise-up the dividend level while comprehensively considering results and future
capital demand, maintaining a balance with financial soundness, and other factors.”
For the FY9/22 dividend, the Company decided in November 2022 to pay a period-end dividend of ¥80 in addition
to the interim dividend of ¥60 for a full fiscal year dividend of ¥140, up ¥25 from FY9/21. The period-end dividend
was up ¥15 from the April 2022 forecast, reflecting robust earnings performance.
In the current and next medium-term management plans, the Company seeks to enhance shareholder returns whilefurther improving capital efficiency. It plans to do this by increasing profit through non-organic growth (includingM&A) and the growth of existing businesses to lift ROE. The company added the phrase “future capital demand”
to its dividend policy to clarify its intention to seek profit growth by executing M&A as part of growth investment.
For the FY9/23 dividend, the Company forecasts a ¥10 increase to ¥150 comprising a ¥75 interim dividend and¥75 period-end dividend—an increase for the 11th consecutive fiscal year.

Dividend per share and dividend payout ratio
Commemorative dividend (left)
Dividend per share (left)
Consolidated dividend payout ratio (right)

(¥)
150
42.9%

50.0%

135
30

120

37.5%

(50th
anniversary)

37.3%

40.0%

29.5%

90

30.0%
30.9%
140

60
95

105

150
20.0%

115

30

10.0%

0

0.0%
FY9/19FY9/20FY9/21

FY9/22

FY9/23 E

Source: Prepared by FISCO from the Company’s news releases and financial results

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