Message from the CEO

Creating value added and delivering innovation
with the best and brightest team.

Simplex Group's history of challenges

Simplex Group’s origins

The Simplex Group, with Simplex as a tech firm working in tandem with Xspear as a consulting firm, guides our clients throughout their entire digital transformation (DX) journey. Our core competencies are technology, consulting, and finance, these are skills that I first developed while working as a company employee. I joined Arthur Andersen (now Accenture) after graduating from college. Later, I moved to a Silicon Valley startup that developed trading tools, which sparked my interest in finance. I then moved on to Solomon Brothers Asia Securities (now Citigroup Securities), then regarded as the world's most powerful investment bank. There is no doubt that my experiences at these three companies are at the core of the Simplex Group.

One thing I felt strongly while working for these international companies was the high potential of a team of Japanese professionals. Through my experiences at the U.S. headquarters of these firms, I became confident that a team based out of Japan could compete on an equal footing with finance and IT professionals working in New York, London, and even Silicon Valley. However, in the eyes of the world, Japan as a country was often looked down as being second-rate in both finance and IT. The key factor for this ultimately comes down to corporate management and the industry structure peculiar to Japan. I was determined to build the best possible team capable of making an impact on the Japanese financial and IT industries by launching a company of my own, and ultimately, taking innovation from Japan to the rest of the world. It was with these resolutions and aspirations that I founded Simplex in September 1997.

First founding phase and IPO

After our founding in 1997, Simplex achieved consistent growth with a business model that defied the conventional wisdom of the industry and an “edgy” strategy that differed from other IT companies. One of the reasons for this steady growth was the lack of Japanese companies capable of proposing and building trading systems based on an understanding of financial engineering. Simplex successfully took the lead in this niche field and acquired most of the major financial institutions as clients without the need for organizing a sales force. Instead, project managers worked closely with the end users and provided solutions that truly impressed them. As a result of these business activities, Simplex achieved strong growth, listing on the JASDAQ market in February 2002, then moved to the First Section of the Tokyo Stock Exchange in September 2005.

Earnings stagnation and MBO

However, after FY3/2010, Simplex's growth reached a plateau. This was due, in part, to the fact that we had run our course in terms of building systems for major financial institutions in niche fields. But more fundamentally, it was because the scope of our business activities had become limited by the strong brand image of Simplex as a firm that could only deal with complex projects in niche fields that other companies could not. I was acutely aware that we needed to focus on making our capabilities more widely known to our major financial institution clients. In addition, the business environment at that time was such that there was a need to provide major financial institutions with a one-stop platform for trading and risk management, in response to a trend toward enhancing risk management functionality that began after the collapse of Lehman Brothers in 2008. We therefore took the best people in the field off projects and set up a sales force, implementing a proactive consultative sales approach. This was a major shift in strategy as we decided to approach clients not only as a niche player but also as a player handling the entire platform. To that end, we began by targeting capital markets departments in major financial institutions and helping them create an IT roadmap for the next five years free of charge. Based on that roadmap, we intended to take on the construction of an entire platform that would go live in a few years. This measure naturally entailed the risk of stagnation in business performance during this period, since the top professionals on the frontline had to be taken off the client site. At the time, the Nikkei Stock Average was trading around multi-year lows, below 10,000 yen, due to the Great East Japan Earthquake and other factors. Simplex's share price was also on a downward trend. I determined that I could not allow shareholders to bear the risk of a decline in the share price due to stagnating earnings. Finally, in October 2013, we decided we would carry out an MBO.

Second founding phase and re-listing

The key factor for the MBO was to achieve breakthroughs in existing businesses and to launch new ones. As a result, immediately after the MBO, we did indeed make breakthroughs in existing businesses and put several new ones on track, aided by factors such as the trend toward more robust risk management. With the confidence that we had proven the reproducibility of the Simplex business model in new businesses, we achieved a re-listing in September 2021. In June 2024, we held a longThe key factor for the MBO was to achieve breakthroughs in existing businesses and to launch new ones. As a result, immediately after the MBO, we did indeed make breakthroughs in existing businesses and put several new ones on track, aided by factors such as the trend toward more robust risk management. With the confidence that we had proven the reproducibility of the Simplex business model in new businesses, we achieved a re-listing in September 2021. In June 2024, we held a long awaitedvshareholders' reception after the annual shareholders' meeting, which had previously been postponed due to the pandemic. Although it had been over 11 years since the MBO, some of the shareholders at that time were in attendance, which was quite an emotional experience.awaitedvshareholders' reception after the annual shareholders' meeting, which had previously been postponed due to the pandemic. Although it had been over 11 years since the MBO, some of the shareholders at that time were in attendance, which was quite an emotional experience.

Innovation we are trying to achieve

Simplex was founded with the strong conviction that we wanted to create innovation that had never existed before and take this from Japan to the rest of the world. However, the kind of innovation we are referring to is fundamentally different from the kind that Steve Jobs brought about when he transformed the world with his smartphone. The innovation achieved by a visionary manager like Steve Jobs requires an ability to see a future that ordinary people cannot imagine. So, what kind of innovation Simplex Group is trying to achieve? There are certain problems in the world that have an ideal solution that everyone can envisage, but too many barriers exist to make it happen. The kind of innovation we are referring to is achieved by solving these kinds of problems in a hands-on and tenacious manner, and before other companies.

5DNAs as a code of conduct

To realize such innovation, we established the 5DNAs as our code of conduct in 2010. Of these, “No. 1” is the one we emphasize most, namely that we will steadily deal with difficult problems one at a time to reach ideal solutions envisioned by everyone in the fastest possible time. The ability to create the kind of innovation we have in mind should only be possible for a company with the No. 1 competency in its business area. That is why the 5DNAs start with “No. 1.” And for the 27 years since our founding, we have made it our mission to become the No.1 company in the domains we serve. The 5 DNAs, starting with “No. 1,” are central to everything we do within the Group on a daily basis. This is also an important guideline for recruiting talent. The Simplex Group values diversity among our employees, as we require a wide variety of talents to innovate. At the same time, we need a strong culture that we all share in order to continue creating added value. The core of this culture is our 5DNAs.

In terms of employee diversity, with the establishment of Xspear in 2021, we have been strengthening our recruitment of mid-career talent on top of hiring new graduates. Our policy of recruiting and training the top 10% of talent in the market, regardless of whether they are new graduates or mid-career hires, remains unchanged. People are the cornerstone of the Simplex Group's entire strategy, and they support us in achieving sustainable growth and high profitability. The Simplex Group is a place where outstanding professionals with different talents can achieve self fulfillment. I hope that the Simplex Group will continue to play a meaningful role in the life journeys of our employees.

Vision1000 as a long-term growth strategy

Trend and challenge of DX in Japan

The DX of Japanese companies now lags that of Europe and US companies. One of the reasons for this situation is the “third generation banking online system,” an interbank remittance system that was considered the most advanced in the world in the 1980s. Prior to the bubble era, the third generation banking online system was a symbol of Japan leading the world in technology. However, its convenience meant no change was required through DX, and as a result, Japan fell behind Western economies. Looking at this in another way, there is still solid DX demand in Japan. We believe that by capturing this demand, we can expect sustained growth and high profitability. However, many Japanese companies also face an important challenge when it comes to DX, which is the limitations of in house system development.

While Japanese companies are increasingly willing to utilize in-house system development, this brings high barriers for non-tech companies. One example would be the lack of IT personnel. There is a need for staff who can assess and make a judgment on how a company's business model should change with the evolution of IT, especially at the management level. However, it takes a long time to develop such personnel.

There are also structural issues that get in the way of in-house system development. Especially in non-tech companies, talented staff tend to be assigned to core businesses and rarely to the systems department function. In addition, the larger the company, the larger and heavier legacy existing systems there are that cannot be easily untangled. These compounding factors make bringing the in-house system development a challenging task for many Japanese companies.

Simplex Group's vision

In order for us to have a certain social impact in the midst of this DX trend, we believe it is important to first aim for 100 billion yen in revenue. Based on this belief, we have formulated Vision1000, which defines the Simplex Group's vision and also serves as a long-term growth strategy for sustainable enhancement of corporate value.

There are three goals that we aim to achieve with Vision1000. The first is to be the one and only strategic partner for our clients. SBI SECURITIES, the leading comprehensive online securities company in Japan in terms of number of accounts and market share, has selected us to be its one and only strategic partner. We aim to be similarly chosen by leading firms in various industries. Second, for our employees, the Simplex Group will continue to be the dominant Biz x Tech innovator. Innovation in the DX field is at the forefront of the times, and the exciting appeal of this challenge is attracting many talented people. In order to continue to draw in such talent, Simplex Group will continue to aspire to be a dominant innovator in the field of Biz x Tech. The third is to be the game changer in the age of DX for society. While more and more Japanese companies are facing challenges in DX, we are of the view that in-house production is not the only answer, and we aim to be the game changer who can have an impact on society.

Our Commitment to MTBP 2030 - Vision1000

Simplex Group has steadily expanded its business foundation under MTBP 2027, our medium-term business plan covering the three-year period from the fiscal year ended March 31, 2025 to the fiscal year ending March 31, 2027, which is positioned as a halfway point on our journey toward Vision1000. At present, demand for DX remains high, and we recognize the importance of steadily capturing this demand while enhancing the value we provide and strengthening our competitiveness through the use of AI.

In light of the progress of these initiatives and the current business environment, the Company has clarified that the target period for achieving the annual revenue of 100 billion yen set forth in Vision1000 will be the fiscal year ending March 31, 2030. Accordingly, the Company progressively reviewed the MTBP 2027 to define the growth strategies and numerical targets for achieving this target and formulated a medium-term business plan, MTBP 2030 - Vision1000, covering the four-year period from the fiscal year ending March 31, 2027 to the fiscal year ending March 31, 2030.

Achieving MTBP 2030 -Vision1000 is not merely about expanding our business performance. It is also a challenge that will test our true worth as a bearer of innovation originating in Japan and delivering it to the world. We will continue to deliver value sincerely to society and our client companies, and pursue sustainable growth together with our employees. By remaining steadfast in this approach, we will advance to the next stage of our growth.