FY2016 Q1 Financial Results 2016.5...2016/05/16 · Fiscal Year Ending December 31, 2016 Q1...
Transcript of FY2016 Q1 Financial Results 2016.5...2016/05/16 · Fiscal Year Ending December 31, 2016 Q1...
Copyright 2016 Cross Marketing Group Inc. All Rights Reserved. Ver.1.0e
FY2016 Q1 Financial Results 2016.5.16
1 Copyright 2016 Cross Marketing Group Inc. All Rights Reserved.
Content
1. Fiscal Year Ending December 31, 2016 Q1 Financial Results
Fiscal Year Ending December 31, 2016 – Highlights of Q1 Results
Fiscal Year Ending December 31, 2016 - Points of Quarterly Results
Situation by Business Segment ①.②
2. Fiscal Year Ending December 31, 2016
Overview of Q1 Financial Statements
Consolidated Statements of Income (Overview)
Consolidated Balance Sheets (Overview)
・ ・・3
・・・・4
・・・・5, 6
・・・・8
・・・・9
3. Fiscal Year Ending December 31, 2016
Q1 Business Topics
Business Topics ・・・・11
4. Earnings Forecast for Fiscal Year Ending December 31,
2016
Overview of Earnings Forecast for Fiscal Year Ending December 31, 2016
Causes of Increase in Profit in Fiscal Year Ending December 31, 2016
Measures and Policies by Business Segment in Fiscal Year Ending December 31, 2016
・・・・13
・・・・14
・・・・15
5. Progress of the Mid-term Management Plan
Progress of the Mid-term Management Plan ・・・・17
6. Changes to Dividend Policy, Dividend Amount
Changes to Dividend Policy
Dividend Forecast for Fiscal Year Ending
December 31, 2016
・・・・19
・・・・20
Reference Materials
Company Overview
Business Areas
List of Main Group Companies
List of Offices
Sales Trends
History
Trends in Consolidated Results and
Main Indicators
・・・・22
・・・・23
・・・・24-26
・・・・27
・・・・28
・・・・29
・・・・30
2
1. FY2016 Q1 Financial Results
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FY2016– Highlights of Q1 Results
Upfront investment in personnel, etc., absorbed, steady profit levels continuing
Other businesses are performing well, and running an operating profit
Due to strong performance in the IT solutions business and the contribution
of other businesses, etc., sales and profit levels are both remaining strong
→ Sales by segment are shown on page 5
Profit is at around 90% compared to the cumulative earnings forecast for Q2
Revisions to earnings forecasts will be made as necessary, while keeping a
close eye on progress moving forward
The web marketing and promotion businesses are both performing well → In terms of other businesses, operating profit has now been reached (Segment profit and loss for the previous fiscal year showed an operating loss)
4 Copyright 2016 Cross Marketing Group Inc. All Rights Reserved.
FY2016 - Points of Quarterly Results
(Unit:JPY Million)
FY2015 Q1 FY2016 Q1 FY2016
Q2 cumulative forecast
Due to the growth of existing business companies and the
contribution of newly consolidated subsidiaries, consolidated net
sales have increased 5.4%
As recruitment was suppressed in the previous fiscal year, profit
levels are lower than in the previous year.
With regard to quarterly net income, since the gain on negative
goodwill, etc., related to the acquisition in the shares of the R&D
company recorded last period (JPY 166 million) did not occur this
period, net income has declined compared to the previous fiscal year
Compared to Previous Fiscal Year Differences from Business Forecasts
Consolidated net sales have continued as forecast
Due to the contribution of strong performing subsidiaries and
exhaustive cost management in the research business, gross
profit is exceeding initial forecasts
With regard to SG&A expenses, due to the control of various
expenses, these are not proceeding as well as planned
In terms of results, profit levels have shown steady progress
against the earnings forecasts, and are at around 90% against
cumulative profit for Q2
Quarterly Net
Income
Down 59.7% (Compared to previous
fiscal year)
Operating Income at
85.9% (Compared to Q2 cumulative
earnings forecast )
Forecast (Achievement)
Revenue +198 +5.4% 50.0%
Operating Profit -108 -23.1% 85.9%
Ordinary Profit -148 -31.3% 81.3%
Net Profit -259 -59.7% 95.6%
472 324 399
434 175 183
3,677 3,875 7,757
467 359 418
Actual Actual (Amount/% Change)
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Financial Results by Business Segments
・・・Marketing Research Business
・・・Software/Application/Web services planning and development (mainly mobile/smartphones)
Research Business (Japan/Other)
IT Solution Business
・・・Web marketing business, Promotion business Other Businesses
(Unit:JPY Million)
※Each Segment Sales only reflects external sales.
Revenue 3,677 100.0% 3,875 100.0% +198 +5.4%
Research Business(Japan) 2,321 63.1% 2,392 61.7% +71 +3.1%
Research Business(Overseas) 981 26.7% 903 23.3% ▲78 ▲7.9%
IT Solution Business 327 8.9% 444 11.5% +117 +35.8%
Other Businesses 48 1.3% 136 3.5% +88 +181.4%
FY2015 Q1 FY2016 Q1(Amount/% Change)
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Financial Results by Business Segments
Research Business
IT Solution Business
Other Businesses
Domestic sales are roughly at the same level as planned, and are higher than for the previous fiscal year.
With regard to domestic companies, proposals for comprehensive marketing research services are being promoted
for both existing and new clients, and we are providing services, with each service working together.
With regard to the overseas companies, although there is some variance by country, each company is progressing
roughly as planned. In addition to promoting the recruitment of sales personnel at each company, we are promoting
the establishment of comprehensive fieldwork services (offline services) in Asia.
With regard to segment profit, as a result of the active recruitment of personnel, mainly within Japan, after the
suppression of recruitment in the previous fiscal year, profit levels are lower than at the previous year.
Through aggressive business development, we have received orders from new and existing clients in excess
of forecasts
In addition, the contributions of companies that have been newly consolidated with the group during the
previous and current years have resulted in a significant increase in sales compared to the previous fiscal year.
Personal expenses have increased in association with the increase in personnel proactively hired over the
previous year and segment profit in excess of the previous fiscal year has been recorded (difference in
consolidated subsidiaries compared to the previous fiscal year: Cross Propworks, Cross J Tech)
In both the web marketing and promotion businesses, sales have progressed at a higher level than planned
thanks to aggressive business development.
With regard to segment profit, although there was an operating loss during the previous fiscal year, a profit
has now been reached due to the increase in sales.
7
2. FY2016 Overview of Q1 Financial Statements
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Consolidated Statements of Income (Overview)
(Unit:JPY Million)
% %
Revenue 3,677 100.0% 3,875 100.0% +5.4%
Cost of goods sold 2,063 56.1% 2,242 57.9% +8.7%
Gross Profit 1,615 43.9% 1,633 42.1% +1.1%
SG&A 1,148 31.2% 1,274 32.9% +11.0%
Employee Expense 644 17.5% 758 19.6% +17.7%
Depreciation and
amortization32 0.9% 36 0.9% +11.0%
Advertisement 17 0.5% 25 0.6% +42.5%
Recruting expense 22 0.6% 49 1.3% +123.7%
amortization of goodwill 37 1.0% 37 1.0% +1.1%
Maintenance costs 13 0.3% 24 0.6% +92.9%
Others 382 10.4% 344 8.9% ▲9.9%
Operating Profit 467 12.7% 359 9.3% ▲23.1%
Ordinary Profit 472 12.8% 324 8.4% ▲31.3%
Net Profit 434 11.8% 175 4.5% ▲59.7%
FY2015 Q1 FY2016 Q1 % Change
Increase in personal expense ratio(2.1pt↑)
Due to the suppression of recruitment in the previous fiscal
year (Q1 of FY2015), the personal expense ratio has increased
due to the increase in costs for recruited staff since the second
half of FY2015, and the increase in newly consolidated
subsidiaries
Difference in special gains and losses (▲JPY 170 million)
Due to the difference in gain on negative goodwill, etc. (JPY 166
million), caused by obtaining shares in the R&D company
during Q1 of the previous year, in Q1 of this year, there has
been a reduction in quarterly net income
Increase in various costs (+JPY 38 million)
Various costs (Recruting costs, maintenance costs, etc.)
increased due to the increase in personnel costs caused by the
active hiring of personnel since the second half of FY2015,
including Q1 of FY2016
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Current liabilities 4,090 3,426 -664
Notes payable 1,047 973 -74Short-term debt 542 534 -8Bonds payable within one year 578 578 +0Current portion of bonds 30 20 -10Accounts payable - other 716 549 -167Income taxes payable 428 183 -245Other 749 589 -159
Noncurrent liabilities 1,935 1,710 -226
Long-term debt 1,677 1,532 -145asset retirement obligation 107 107 -Net defined benefit liability 63 58 -5Deferred tax liability 68 2 -66others 20 10 -10
Total liabilities 6,025 5,194 -832
Net assets 3,945 3,875 -69
Capital stock / Capital reserve 1,095 1,095 -Legal retained earnings 2,619 2,695 +76Other 59 -62 -121Subscription rights to shares 16 16 -minority interests 156 132 -24
Equity ratio 37.8% 41.1% +3.3p
FY2015 FY2016 March Change
Consolidated Balance Sheets (Overview)
Current assets 6,423 5,655 -767
Cash and deposits 2,384 1,749 -636Notes and accounts
receivable-trade2,993 2,838 -155
Others 1,045 1,069 +24
Noncurrent assets 3,548 3,413 -134
Buildings 285 282 -4
Tools, furniture & fixtures 167 159 -8
Software 283 261 -22
Good will 1,956 1,859 -97
Investment securities 114 117 +3Stocks of subsidiaries
and affiliates209 179 -31
Security deposits 416 422 +6
deferred tax asset 42 38 -4
Other 75 97 +22
Total assets 9,970 9,069 -901
FY2015 FY2016 March Change
Noncurrent Assets (Goodwill)
Goodwill balance has decreased due to the
recording of goodwill amortization and foreign
currency translation during this period
Retained earnings increased due to obtaining a
quarterly net profit
Foreign currency translation amounts have
changed due to fluctuations in exchange rates
Net Assets
(Unit:JPY Million)
10
3. Business Topics
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Business Topics
≪February 18, 2016 Announcement≫
On April 28, we completed the acquisition of shares in Mixi
Research, a company that is strong in mystery shopper and
undercover investigations. With the expansion of services in the
research business, we are constructing a system that can handle
various needs.
We have changed the company’s name to “Shopper’s Eye, Inc.”.
Trade Name: Shopper’s Eye, Inc.
Established: January 4, 2014
Capital: JPY 50 million
Main Business: Planning and operation of mystery shopping services, planning and operation of various forms of marketing research
■ Acquisition of shares in Mixi Research
(Company name changed to Shopper's Eye)
≪January 21, 2016 Announcement≫
We are entering into a business partnership with Sentan, which
has technology and know-how that can be used in neuro
marketing. By adding neuro marketing to our service lineup, we
will construct a system that can consistently provide support all
the way from research to promotion.
[Overview of Partnership Company]
Trade Name: CENTAN Inc.
Established: May 2010
Main Business: Provision of marketing and consulting services based on brain science and cognitive neuroscience knowledge
■Business partnership with Sentan towards the
provision of Neuro Marketing Services
12
4.Earnings Forecast for FY2016
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Revenue 14,859 100.0% 16,535 100.0% +1,676 +11.3%
Research business(Japan) 8,223 55.3% 9,050 54.7% +827 +10.1%
Research business(Overseas) 4,679 31.5% 4,782 28.9% +103 +2.2%
IT solutions business 1,704 11.5% 2,094 12.7% +390 +22.9%
Other businesses 253 1.7% 609 3.7% +356 +140.6%
Operating Profit 1,233 8.3% 1,251 7.6% +18 +1.5%
Ordinary Profit 1,185 8.0% 1,213 7.3% +28 +2.3%
Net Profit 559 3.8% 640 3.9% +81 +14.6%
FY2015
(Results)
FY2016
(Forecast) (Amount/%Change)
Earnings Forecast for FY2016
The plan is to maintain robust growth in each business, and to increase consolidated revenue by 11%
In the overseas research business, in addition to ending temporary income associated with the change in
progression standards at the Kadence Group, plans will be formulated in consideration of the economic
environment and exchange rate, particularly in the Asia region.
With regard to profit levels, these are expected to be in line with the mid-term management plan
※ Only external sales are stated for sales by business.
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Causes of Increase in Profit in FY2016
FY2016 (Forecast )
FY2015 (Actual Results)
Operating Income
JPY 1,251 million
(Profit Margin 7.6%)
Operating Income + JPY 18 million Operating Income
JPY 1,233 million
(Profit Margin 8.3%)
[IT Solutions Business]
Profit increase due
to increased sales
+ JPY 38 million
[Research Business]
Profit increase due
to increased sales
+JPY 231 million
[Other Businesses]
Profit increase due
to increased sales
+ JPY 218 million
[SG&A Expenses]
Increase in PR and
advertising expenses
+JPY 67million
Temporary increase in revenue
due to the amendment of the
Kadence accounting standards
JPY 191 million
[SG&A Expenses]
Increase in hiring
costs
+JPY 66 million [SG&A Expenses]
Other cost increases
+JPY 145 million
(Effective Operating Income)
JPY 1,041 million
If the special factors of the previous fiscal year are excluded,
effective operating income is expected to
increase by 20%
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Measures and Policies by Business Segment in FY2016
Research Business
IT Solutions Business
Other businesses (web marketing business, promotion business)
Improve productivity and added value
Cultivate the North American market, strengthen Asian synergy
Expand service areas → Brand diagnostics, workshops, neuro, etc.
Promote customer cultivation by strengthening proposals
Improve productivity and quality
Develop new services, expand business areas
→ Promote group partnerships, use of research, etc.
Expansion of top line by aggressive hiring practices
Promote service improvements, service differentiation
16
5.Progress of the Mid-term Management Plan
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Progress of the Mid-term Management Plan
With regard to the mid-term management plan, this is proceeding better than expected.
In 2016, we are expecting earnings forecasts to be roughly in line with the mid-term management plan.
(JPY Million)
0
500
1,000
1,500
2,000
0
5,000
10,000
15,000
20,000
2015年 2016年 2017年
(JPY Million)
14,733
16,287
17,985
900
1,200
1,500
2015 2016 2017 (Mid-term Plan) (Actual) (Mid-term Plan) (Forecast) (Mid-term Plan)
1,185
14,859
1,251
16,535
Ordinary income (right axis)
Sales (left axis)
18
6.Changes to Dividend Policy, Dividend Amount
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When consolidated ordinary income of JPY 1 billion is achieved,
gradually increase the consolidated dividend ratio to around 20%
Previous Dividend Policy
Changes to Dividend Policy
Amended Dividend Policy [NEW]
While continuing to stably return profits to shareholders through the payment of dividends,
to take into account the current strong demand for funds and future business investment plans, etc.
"Determine a dividend amount towards a consolidated dividend ratio of
around 15%"
Change in dividend policy in association with consolidated
ordinary income reaching JPY 1 billion
20 Copyright 2016 Cross Marketing Group Inc. All Rights Reserved.
0
5
10
15
20
25
30
35
40
0
2
4
6
8
10
2010 2011 2012 2013 2014 2015 2016
7.9% 9.7%
12.6% 13.5%
(%) (JPY)
Dividend amount per share (left axis)
Dividend ratio (right axis)
4.5
*The company split the shares into two parts on February 18, 2013, and into three parts on June 1, 2014, and a retroactive amount has been stated for the dividend amount per share.
*With regard to past dividend amounts per share, these have been stated retroactively, upon rounding off to one decimal place.
3.3 2.1 1.7
0.9
5.0
The dividend amount for the fiscal year ending December 31,
2016, based on the new dividend forecast, is expected to be JPY 5.0 per share (interim JPY 2.5, year-end JPY 2.5)
Dividend Forecast for FY2016
33.1%
19.5%
15.2%
6.0
21
Reference Materials
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Company Overview
Company Name Cross Marketing Group Inc.
President Miki Igarashi
Established June 3, 2013
Capital JPY 562,2850,000
Number of Employees (consolidated)
1,382 (including 253 temporary staff)
Main Business Research business, IT solutions, etc.
Newly established due to the shift to a holding company structure Cross Marketing Inc. established on April 1, 2003
23 Copyright 2016 Cross Marketing Group Inc. All Rights Reserved.
Business Areas
Online Research
Marketing
Solutions
Marketing Research +
IT Solutions
Online Research +
Offline research
Marketing
Research
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Marketing Research(Japan)
Cross Marketing is the pioneer in online
research with full service marketing
research capabilities spanning both
qualitative and quantitative methodologies.
R&D offers value added information (insights)
through market research planning, design,
implementation and consultation services.
Medilead is full service MR agency focused
on delivering insights derived from from key
stakeholders in the global healthcare industry.
With expertise in consumer behaviors and
insights ,UTIL offers customer behavior
analysis and business consulting services.
Envirosell Japan offers analyses of shopper
behavior and business consulting services.
Our Companies
Consulting and marketing support which
specializes in overseas expansion
25 Copyright 2016 Cross Marketing Group Inc. All Rights Reserved.
Marketing Research(Overseas)
Kadence International is a global insight
agency engaged in marketing research with
offices in the UK, the USA, UAE, and
throughout Asia.
Markelytics is a leading market research
agency providing end-to-end research
solutions to clients around the world.
MedePanel manages and operates
proprietary healthcare panels, and provides
insights from key stakeholders in the
healthcare industry.
Cross Marketing Asia offers a full spectrum
of marketing research related services for
the South East Asian Market.
Headquartered in Bangkok with marketing
offices in Singapore and India, Jupiter is the
research hub to the Asian markets-
Our Companies
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Our Companies
Panels IT Solution etc.
関連会社
Union Panels is a one-stop-shop for
global online research with a
current focus on the Asia region.
Research Panel owns and operates
high quality online survey panels while
offering other B2C and B2B research-
related services.
D&M utilizes consumer data to offer
cutting edge marketing services.
UNCOVER TRUTH are experts in Web and
mobile marketing and UI/UX consulting.
Cross Communication are IT specialists engaged in the
planning, development and operation of mobile and
smartphone oriented websites and systems.
Cross Propworks offers development and
design of multi-device oriented websites
and systems, as well as a variety of data
processing services.
Specialists in systems development
and engineering services
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Our Locations
Tokyo Osaka
Hakodate
Shanghai
Bangalore
Singapore
New York
New Delhi
Mumbai
Hong Kong Dubai
Boston San Francisco
Ho Chi Minh City
Hanoi
London Sofia
Barcelona
Bangkok
Los Angels
Jakarta
Cross Marketing Group has a global presence of
over twenty business locations, in twelve countries worldwide
28 Copyright 2016 Cross Marketing Group Inc. All Rights Reserved.
0
500
1,000
1,500
0
5,000
10,000
15,000
2008 2009 2010 2011 2012 2013 2014 2015
Steady growth while expanding the overseas and IT solutions businesses, as well as business regions and areas,
based on the domestic research business
Sales Trends (By Business Segment)
Sales Trends (By Business Segment)
IT solutions business
Research business(Overseas)
Research business(Japan)
Other business
【Revenue(left)】
(JPY Million) (JPY Million)
【Ordinary profit (right)】
October 2008 Listed on TSE Mothers
Jun 2013 established Cross Marketing Group
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History
2013
2012 Cross Marketing China Inc. established as a Chinese subsidiary
Received a portion of Index Inc.'s mobile solutions business Cross Communication Inc. begins sales operations
2011
2003 Cross Marketing established Formed a research alliance with Axiv.com (now Voyage Group)
2008 Listed on the Mothers section of the Tokyo Stock Exchange
2006 Specialist research panelist management company Research Panel, Inc. established
UNCOVER TRUTH established Holding company Cross Marketing Group Inc. established Transferred to stock holding system Acquired capital stake in Markelytics Solutions India Pte. Ltd. Cross Marketing Asia Pte. Ltd. established in Singapore and began operations as a consolidated subsidiary Acquired UTIL Inc. as a consolidated subsidiary
2014 Established UNION PANELS in Singapore Headquarters relocated to Nishi-Shinjuku in Shinjuku, Tokyo Acquired shares in KADENCE Int’l Business Research Pte. Ltd
2015 Acquired Research & Development, Inc. as a consolidated subsidiary Cross Communication established Cross Propworks as a subsidiary in Hakodate, Hokkaido Medilead, Inc. established D&M, Inc. established
2016 Acquired Mixi Research Inc. as a consolidated subsidiary , changed the company’s name to “Shopper’s Eye, Inc.”.
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Trends in Consolidated Results and Main Indicators
Revenue
FY2011
4,424 5,446 6,293 8,141
436 555 725 536
544 581 751 521
330 313 438 245
1,826 2,017 2,558 2,897
2,831 3,088 4,012 7,872
6,663 1,372
106
5,400 876
17
4,619 827
-
4,114 310
-
Dividend per share(JPY)
EPS(JPY)
BPS(JPY)
ROE(%)
ROA(%)
4.5
13.61
150.54
9.5
3.1
3.3
24.62
136.45
19.7
11.01
2.1
17.18
112.42
16.4
10.14
1.7
17.97
99.55
20.1
11.65
14,859
1,233
1,185
559
3,945
9,970
12,902 1,704
253
6.0
30.81
193.17
17.2
5.6
FY2012 FY2013 FY2014 FY2015
Research business
IT solutions business
Other businesses
Operating profit
Ordinary Profit
Net Profit
Net assets
Total assets
※Consider a stock split that was carried out in Feb 2013 , June 2014
(Unit:JPY Million)
Copyright 2016 Cross Marketing Group Inc. All Rights Reserved.
Cross Marketing Group Inc.
http://www.cm-group.co.jp
Copyright 2015 Cross Marketing Group Inc. All Rights Reserved.
Cross Marketing Group does not guarantee the accuracy of the information contained in this presentation, which reflects judgments made by Cross Marketing Group management based on currently available information.
Given that the business environment may vary significantly in the future due to a number of factors, please be aware that the performance and results in this presentation may differ from Cross Marketing Group ’s actual performance and results.
For inquiries regarding one information contained in this presentation:
Cross Marketing Group Corporate Planning Unit
Tel:03-6859-2259 E-mail:[email protected]