FY2/11 Results · PDF file9. Cost of Sales, Gross Profit (FY2/11 4Q) Media purchasing...

1

April 27, 2011

Code: 2178URL http://www.tri-stage.jp/

FY2/11

Results

Presentation

2

Introductory Message

We would like to offer heartfelt prayers for those who lost their lives in the Great East Japan Earthquake that occurred in March 2011.We also would like to express our deepest sympathies to all those affected by the disaster.Tri-Stage, in an effort for aid disaster victims and support recovery efforts in affected areas, made a total of ¥30 million in charitable donations.All our employees are praying for a quickly recovery for the disaster areas.

3

Highlight

Pａｒｔ

1 : ＦＹ2/11

4Q

Ｒeｓｕｌｔs

Part 2 : Progress vs

FY2/12 Forecast and

Dividend Forecast

FY2/12 Forecast: ¥20

FY2/11 Payment: ¥20

Medium-term business plan targets revised upwardNo change in management policies or medium-term business strategies

Rising revenues but earnings decline in FY2/11 as performance fell short of targets.Forecast for FY2/12 is for increased revenue with earnings decline, due in part to the impact from the East Japan earthquake.We will continue to implement medium-term business strategies in FY2/12, the final year for the plan.

FY2/11 Results （Variance from

Forecast）

Net

Sales 37,572million

（

96.2％）

Operating Income 3,224million （

97.2％）

FY2/11 4Q （YoY

Change）

Net

Sales 9,829million

（up

6.7％）

Operating Income 1,131million （up

21.1％）

FY2/12 forecast（YoY

Change）

Net

Sales 40,102million

（up6.7％）

Operating Income 3,018million （down6.4％）

Part 3: Revision of Medium-Term Business Plan Targets and Current Status

Part 1: FY2/11

4Q and Full-Year ResultsPart 1: FY2/11

4Q and Full-Year Results

Part 2: Status of FY2/12

ForecastPart 2: Status of FY2/12

Forecast

Part 3: Revision of Medium-Term Business Plan Targets and Current StatusPart 3: Revision of Medium-Term Business Plan Targets and Current Status

Reference MaterialsReference Materials

4

5

(¥

mn)(¥

mn)(¥

mn)

FY2/094Q

FY2/104Q

FY2/114Q

12,000

10,000

8,000

6,000

4,000

2,000

0

1,750

1,500

1,250

1,000

750

500

250

0

6,924

9,829

856

1,284934

1,3871,131

up6.7%up8.1％

up21.1％

551

Net

Sales Gross Profit Operating

Income

1,500

1,250

1,000

750

500

250

0

9,208

YoY

growth in FY2/11 4Q

Results Highlights (FY2/11

4Q) ①

FY2/094Q

FY2/104Q

FY2/114Q

FY2/094Q

FY2/104Q

FY2/114Q

FY2/104Q

（Actual）

FY2/114Q

（Actual）

Increase/Decrease

YoY Change

Net Sales 9,208 9,829 +620 +6.7%Cost of Sales 7,924 8,441

（％） (86.1%) (85.9%)

Gross Profit 1,284 1,387 （％） (13.9%) (14.1%)

SG&A Expenses 349 256 （％） (3.8%) (2.6%)

Operating Income 934 1,131 （％） (10.1%) (11.5%)

Ordinary Income 936 1,137 （％） (10.2%) (11.6%)

Net Income 525 671 （％） (5.7%) (6.8%)

+145

+200

+197

△ 93

+21.5%

+27.8%

△26.8%

+21.1%

+6.5%

+8.1%+103

+516

6

Results Highlights (FY2/11

4Q) ②

(¥

mn)

Significant year-on-year growth in 4Q

7

Results by Quarter

10,000

8,000

6,000

4,000

2,000

0

(¥

mn)(¥

mn)

1,500

1,250

1,000

750

500

250

01 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1Q

2Q

３

Q4 Q

09/2 10/2 11/2

1,500

1,250

1,000

750

500

250

0

Net sales and gross profit reach record highs, up 6.7% and 8.1% YoY, respectivelyOperating income up 21.1% YoY

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1Q

2Q

３

Q4 Q

09/2 10/2 11/2

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1Q

2Q

３

Q4 Q

09/2 10/2 11/2

9,208

856

551

1,284

934

up8.1％

up21.1％

6,924

9,8291,387

1,131

up6.7％

Net

Sales Gross Profit Operating Income

(¥

mn)

(¥

mn)

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Net Sales 5,968 5,915 6,413 6,924 8,000 8,258 8,785 9,208 9,137 9,375 9,230 9,829 Gross Profit 738 705 748 856 1,240 1,168 1,163 1,284 1,119 1,006 1,012 1,387 Operating Income 540 441 504 551 964 866 853 934 798 650 639 1,131

Gross Profit Margin 12.4% 11.9% 11.7% 12.4% 15.5% 14.1% 13.2% 13.9% 12.3% 10.7% 11.0% 14.1%Operating Margin 9.1% 7.5% 7.9% 8.0% 12.1% 10.5% 9.7% 10.1% 8.7% 6.9% 6.9% 11.5%

FY2/09 FY2/10 FY2/11

FY2/10４Q

（Actual）

FY2/11４Q

（Actual）

Increase/Decrease

YoY Change

Net Sales 9,208 9,829 +620 +6.7%Solution Sales 9,110 9,752

（％） (98.9%) (99.2%)

Product Sales 98 76 （％） (1.1%) (0.8%)

+7.1%

△ 22.6%

+642

△ 22

8

NetSales

(FY2/11

4Q)

Solution sales rose on growth in the TV shopping business of client companies

（¥ｍｎ）

Increase in volume of media space

sales,program production

and call centeroperations

9

Cost of Sales, Gross Profit (FY2/11 4Q)

Media purchasing environment remained robust, with particular increase in TV commercials

Outsourcing costs up on increase in call center operations

Increase in volume of TV commercials in

particular

（¥ｍｎ）

FY2/10４Q

（Actual）

Costcomposition ratio

FY2/11４Q

（Actual）


Cost of Sales 7,924 8,441 （％） (86.1%) (85.9%)

6,915 7,304 （％） (75.1%) (74.3%)

TV (programs) 4,728 4,900 （％） (51.3%) (49.9%)

TV (commercials) 1,841 2,086 （％） (20.0%) (21.2%)

Other 345 317 （％） (3.8%) (3.2%)

Outsourcing Costs 922 1,069 （％） (10.0%) (10.9%)

Cost of Goods Sold 86 67 （％） (0.9%) (0.7%)

Gross Profit 1,284 1,387 （％） (13.9%) (14.1%)

Media Acquisition Costs（Media Buying）

100.0%

1.1%

86.5%

58.1%

24.7%

87.3%

59.7%

100.0%

23.2%

4.4%

11.6%

3.8%

12.7%

0.8%

Increase/Decrease

YoYChange

△ 27

+146

△ 19 △22.1%

+15.9%

△8.0%

+13.3%

+3.6%

+5.6%

+6.5%+516

+389

+172

+245

+8.1%+103

Increase in volume of call center operations

FY2/104Q

（Actual）

FY2/114Q

（Actual）

Increase/Decrease

YoY Change

SG&A Expenses 349 256 （％） (3.8%) (2.6%)

Personnel Costs 122 89 （％） (1.3%) (0.9%)

Depreciation 9 11 （％） (0.1%) (0.1%)

Other 217 155 （％） (2.4%) (1.6%)

Operating Income 934 1,131 （％） (10.1%) (11.5%)

No. of Employees 62 93 31 +50.0%

+1

△ 61

+197

△ 93

△ 33

+18.6%

△28.3%

+21.1%

△26.8%

△27.6%

10

SG&A Expenses, Operating Income(FY2/11 4Q)

Personnel numbers rose but SG&A expenses fell, for decline in the SG&A ratio

Quarterly operating income up 21.1% YoY

The number of employees increased, but SG&A expenses declined due to decrease in lump-sum payments and other factors

（¥mn）

FY2/11（Actual）

FY2/11（Forecast）Announced

Sep.27, 2010

PercentageVariance from

Forecast

Net Sales 37,572 39,057 96.2%Operating Income 3,224 3,317

（％） (8.6%) (8.5%)

Ordinary Income 3,237 3,322 （％） (8.6%) (8.5%)

Net Income 1,908 1,927 （％） (5.1%) (4.9%)

97.4%

97.2%

99.0%

11

Results vs. Forecasts (Full Year)

Final results versus forecasts announced on September 27, 2010Achievement Rate: Net Sales 96.2%, Operating Income 97.2%

（¥mn）

12

Results Highlights(Full

Year) ①

FY2/09 FY2/10 FY2/11

（¥mn）（¥mn）（¥mn）

25,221

34,253

3,047

4,857

2,037

3,618

up9.7％

△6.8％

△10.9％

40,000

30,000

20,000

10,000

0

5,000

4,000

3,000

2,000

1,000

0

5,000

4,000

3,000

2,000

1,000

0

37,572

4,526

3,224

Sales to existing and new client companies increased, but earnings declined as a result of our inability to purchase media as planned.

Net


FY2/09 FY2/10 FY2/11 FY2/09 FY2/10 FY2/11

13

Results Highlights(Full

Year) ②

（¥mn）

Sales to existing and new client companies increased, but earnings declined as a result of our inability to purchase media as planned.

FY2/10（Actual）

FY2/11（Actual）

Increase/Decrease

YoY Change

Net Sales 34,253 37,572 +3,318 +9.7%Cost of Sales 29,396 33,045

（％） (85.8%) (88.0%)

Gross Profit 4,857 4,526 （％） (14.2%) (12.0%)

SG&A Expenses 1,238 1,302 （％） (3.6%) (3.5%)

Operating Income 3,618 3,224 （％） (10.6%) (8.6%)

Ordinary Income 3,622 3,237 （％） (10.6%) (8.6%)

Net Income 2,110 1,908 （％） (6.2%) (5.1%)

△ 385

△ 201

+3,649

△ 330

+63

△ 394

△ 10.6%

△ 9.5%

+12.4%

△ 6.8%

+5.2%

△ 10.9%

FY2/10（Actual）

FY2/11（Actual）

Increase/Decrease

YoY Change

Net Sales 34,253 37,572 +3,318 +9.7%Solution Sales 33,841 37,265

（％） (98.8%) (99.2%)

Product Sales 411 306 （％） (1.2%) (0.8%)

+3,423 +10.1%

△105 △25.5%

14

Net

Sales (Full Year)

Solution sales rose on growth in the TV shopping business of client companies

（¥mn）

Increase in volume of media space

sales,program

productionand call center

operations

FY2/10（Actual）


FY2/11（Actual）


Increase/Decrease

YoYChange

Cost of Sales 29,396 33,045 （％） (85.8%) (88.0%)

25,665 28,542 （％） (74.9%) (76.0%)

TV (programs) 18,344 19,760 （％） (53.6%) (52.6%)

TV (commercials) 6,337 7,675 （％） (18.5%) (20.4%)

Other 983 1,106 （％） (2.9%) (2.9%)

Outsourcing Costs 3,363 4,233 （％） (9.8%) (11.3%)

Cost of Goods Sold 366 270 （％） (1.1%) (0.7%)

Gross Profit 4,857 4,526 （％） (14.2%) (12.0%)

100.0% 100.0% +3,649 +12.4%

Media Acquisition Costs（Media Buying） 87.3% 86.4% +2,876 +11.2%

62.4% 59.8% +1,415 +7.7%

21.6% 23.2% +1,338 +21.1%

3.3% 3.3% +122 +12.5%

11.4% 12.8% +869 +25.9%

1.2% 0.8% △ 96 △26.4%

△ 330 △6.8%

15

Cost of Sales, Gross Profit(Full

Year)

Increase in volume of TV commercials

in particular

（¥mn）

Media purchasing environment remained robust, with particular increase in TV commercials

Outsourcing costs up on increase in call center operations

Increase in volume of radio and

newspaper flyer inserts

Increase in volume of call center

operations

FY2/10（Actual）

FY2/11（Actual）

Increase/Decrease

YoY Change

SG&A Expenses 1,238 1,302 （％） (3.6%) (3.5%)

Personnel Costs 584 651 （％） (1.7%) (1.7%)

Depreciation 29 41 （％） (0.1%) (0.1%)

Other 624 609 （％） (1.8%) (1.6%)

Operating Income 3,618 3,224 （％） (10.6%) (8.6%)

No. of Employees 62 93 31 +50.0%

+63 +5.2%

+66 +11.4%

△394 △10.9%

+12 +41.2%

△ 15 △2.4%

16

SG&A Expenses, Operating Income(Full

Year)

Expenses increased for the full fiscal year due the workforce expansion, but the SG&A ratio remained on a par with that of the previous fiscal year. However, the decline in gross profit

resulted in a 10.9% year-on-year decrease in operating income.

（¥mn）

Total employees increased by 31

（

new graduates 5/18

mid-career hires, and 8 temporary workers hired as

regular

employees）

FY2/10（Actual）

FY2/11（Actual）

Operating C/F 2,499 1,295Investing C/F △2,106 △3,481Financing C/F 6 5

3,290 1,111Cash and cash equivalents

17

Financial Position

10/2末 11/2末

Income before income taxes

up 3,236million

Increase in accounts payable—trade

up 305million

Increase in accounts receivable—trade

down 231millon

Income taxes paid

down 1,873million

（¥mn）

Increase in accountsPayable trade

up 305million

Income taxes paidDown 580million

current liabilities net assets

Increase in retainedearnings

up 1,908millon

（¥ｍｎ）

9,616

9,352

263

10,750

7,396

3,563

5,482

4,115

noncurrent liabilities

9,616

237

27

18

（¥mn）

End ofFY2/10

End ofFY2/11

12,000

10,000

8,000

6,000

4,000

2,000

0

10,988

Payments into time deposits down 3,400million

10,988 12,000

10,000

8,000

6,000

4,000

2,000

0

Strengthened financial base

Balance Sheets

Assets

Cash Flows

current assets noncurrent assets

Increase in accountsreceivable—trade

up

¥231million

Increase in cash anddeposits

up

¥1,220million

Liabilities and Net Assets

Part 1: FY2/11



Part 2: Status of FY2/12 ForecastPart 2: Status of FY2/12 Forecast



18

19

FY2/12 Forecast

Highlights

Business expansion centered on the TV sector of existing businessIncreased revenue with earnings decline expected in FY2/12, due the impact from the East Japan

earthquake and other factorsForecast for net sales ¥40,102 million, with operating income of ¥3,018 million

（¥mn）

FY2/11（Actual）

FY2/12（Forecast）

Increase/Decrease

YoY Change

Net Sales 37,572 40,102 +2,530 +6.7%Operating Income 3,224 3,018

（％） (8.6%) (7.5%)

Ordinary Income 3,237 3,018 （％） (8.6%) (7.5%)

Net Income 1,908 1,726 （％） (5.1%) (4.3%)

△ 218

△ 182

△ 205

△6.8%

△9.6%

△6.4%

20

FY2/12

Sales

Forecast

37,572

25,221 34,253

40,102

11,883

13,33716,259

18,51219,059

17,994

18,760 21,341

Sales are forecast to increase ¥2,530

million YoY

to ¥40,102million.

FY2/09 FY2/10 FY2/11 FY2/12

（¥mn）

（¥mn）

・Growth in sales from existing client companies is expected.

・Growth in sales from new client companies is expected.・2H sales forecast to rise 12% YoY

・

Disaster impact will adversely affect revenue, but we anticipate sales to be on a par with that of the previous fiscal year

・

Business with existing client companies is expected to continue to grow steadily・

Full-year revenue increase expected despite quake-related impact・

Continued expansion in existing business expected, centered on TV

50,000

40,000

30,000

20,000

10,000

0

25,000

20,000

15,000

10,000

5,000

0

Full-Year ¥40,102million

（YoY

up6.7％、up¥2,530million）

1H

¥18,760million

（YoY

up1.3％、up247million）

2H

¥21,341million

（YoY

up12.0％、up¥2,282million）

Full-Year

Forecasts

Half-year forecasts

Actual Forecast

1H Actual 1H Forecast

2H Actual 2H Forecast

１H ２H １H ２H １H ２H １H ２H

FY2/09 FY2/10 FY2/11 FY2/12

21

FY2/12

Operating Income

Forecast

・

Gross profit and operating income will rise on greater sales, with a forecast increase in operating income of ¥24 million year on year

・

Operating income to decline ¥228 million YoY

due to quake-related impact

3,224

2,037

3,618

3,018

8.68.1

10.6

7.5

（¥mn）

（¥mn）

982 1,055

1,830

351

1,451

1,787

1,222

1,795

7.99.3

6.58.3

11.39.9

8.4

Operating Income

are forecast to decrease ¥205million YoY

to ¥3,018 million.

・

Gross profit forecast to decline due to

quake-related impact

・

SG&A expenses forecast to rise as a result of personnel increases necessary to implement FY2/12 measures

・Planned personnel increase of 19 employees

(of which, seven new graduates)・

Earnings will recover in second half, but this will be insufficient to cover 1H losses, and full-year operating income will decline ¥205 million year on year

1H Forecast

2H Forecast2H Actual

5,000

4,000

3,000

2,000

1,000

0

2,500

2,000

1,500

1,000

500

0

20%

16%

12%

8%

4%

0%

Full-year

3,018million

（YoY

down6.4％、down205million）

１H

1,222million

（YoY

down15.8％、down228million）

2H

1,795million

（YoY

down1.4％、up24million）

20%

16%

12%

8%

4%

0%

7.8

1,771

Full-Year

Forecasts

Actual Forecast Operating Income Margin

FY2/09 FY2/10 FY2/11 FY2/12

Half-year forecasts

1H Actual Operating Income Margin

１H ２H １H ２H １H ２H １H ２H

FY2/09 FY2/10 FY2/11 FY2/12

22

Current Status and Outlook – Client Companies

Business with large-scale client companies expected to remain steady. Since sales will increase from 2H,we will target new customers and expand scope of business with existing clients.

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1Q

2Q

３

Q4Q

FY2/09 FY2/10 FY2/11

・Many companies are interested in conducting direct marketing.We will continue to actively cultivate new client companies.

12,000

10,000

8,000

6,000

4,000

2,000

0

100%

80%

60%

40%

20%

0%

Net sales Top-5

Clients’

Share of Net Sales

¥125 million to ¥250 million

other

（¥mn）

(Number of clients

）

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1Q

2Q

３

Q4Q

FY2/09 FY2/10 FY2/11

75

60

45

30

15

0

6250

44

New client companies

8 9 12

55.4％57.6％

66.2％

Existing client companies

・Demand from existing client companies, mainly for television, will

remain strong.

・A steady increase from large-scale and long-term client companies

and long-term clients is

expected to provide more stable and continued growth.

Over ¥250 million

￥50 million to ¥125 million

Analysis of Client Base by Sales Level

Net Sales and Top-Five Clients' Ratio of Net Sales

23

Current Status and Outlook – Media Buying

Client demand for media, particularly television, is expected to

remain strong.We expect a continued, stable potential for media buying tailored to client needs.

4,728

3,933

テレビ番組・テレビCM仕入推移（実績）

TV(commercials)

Despite instability in procuring certain TV program slots, we expect market conditions for buying to remain favorable overall. We will continue efforts to ensure stable procurement and actively expand our market share.

Market conditions for TV commercial buying are difficult overall. However, we will seek to buy at current levels or beyond, in line with conditions in the advertising market.

We will actively develop other media.We will expand our business in media other than television, focusing on radio and newspapers, and enhance our presence in smartphones

and various other types of internet media.

Other media buying

1,261

1,841

4,900

2,086

（¥mn）

1 Q

2 Q

3 Q

4 Q

1 Q

2 Q

3 Q

4 Q

1Q

2Q

３

Q4Q

FY2/09 FY2/10 FY2/11

Other media buying

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

82 345 317

TV (programs)

TV(commercials)

TV (programs)

TV (commercials)

TV (programs)

24

30.8％29.9％

August 2010 December 2010

Tri-Stage has an approximately 30% share of the market for terrestrial TV shopping programs.There are still many TV program slots available to us, and we expect an expansion in market share.

Current Status and Outlook-

TV Shopping Market Trends and Future Measures

Source: Tri-Stage, random three-week average in January, May and August 2010 Source: Tri-Stage, random three-week average in January, May ,August and December 2010

Tri-Stage Other companies Tri-Stage Other companies

The share of the market for terrestrial TV shopping programs

TV shopping programs of 3minutes,4minutes,14minutes,29minutes and 54minutes

25

14,718

19,987

25,221

40,07646,889

34,253

37,572 40,102

6851,045

2,037

3,8064,279

3,6183,224 3,018

4.75.2

8.1

8.6 7.5

10.6 9.5 9.1

（¥mn）（¥mn）：％）

The Medium-Term Business plan targets revised downward

Sales target revised downward in consideration of FY2/11 results and

impact from earthquake

Operating income and operating income ratio targets revised downward in consideration of FY2/11 results and impact from earthquake

50,000

40,000

30,000

20,000

10,000

0

5,000

4,000

3,000

2,000

1,000

0

12.5

10

7.5

5

2.5

0

Progress of Achieving the Medium-Term Business Plan (Final Year)

Net


Margin

Actual Revised Medium-Term Business Plan

Previous Medium-Term Business Plan(Announced

on April 7, 2009)



on April 7, 2009)



on April 7, 2009)

FY2 /07

FY2 /08

FY2 /09

FY2 /10

FY2 /11

FY2 /12

FY2 /07

FY2 /08

FY2 /09

FY2 /10

FY2 /11

FY2 /12

FY2 /07

FY2 /08

FY2 /09

FY2 /10

FY2 /11

FY2 /12

26

Shareholder Returns Plan

Announcement of Planned Dividend Payment （

record date of April 14, 2011）

• There is no change in our policy of prioritizing expansion of retained earnings

in order to strengthen our financial position and management foundations, and to make investments in priority areas, including business tie-ups.

• We plan to make a dividend payment of ¥20 per share again in FY2/12.

Interim Year-End Total

¥0.00 ¥20.00 ¥20.00

¥0.00 ¥20.00 ¥20.00

¥0.00 ¥0.00 ¥0.00

FY2/12 Forecast

FY2/11 Payment

FY2/10 Payment

Annual Dividend（\）

Part 1: FY2/11





Forecast



27

＜Management policies＞

Attain the position of leading company in the direct marketing support businessEnter the overall direct marketing market

＜Medium-term business strategies＞

The first phase●

Establish business model (total solutions)●

Enhance credibility and public profile

The second phase●

Measures to expand existing business●

Strengthening of solution services●

Development of cross-media business

The third phase ●

Commence development of B-to-C business●

Consider development of overseas direct marketing support services

Management Policies and Medium-Term Business Strategies

No change in management policies or medium-term business strategies.

We continue to consider FY2/10 the Second Phase of our strategy,

and are seeking business expansion.

28

Overview of Second Phase Strategies

Expand existing business focused on support for TV shopping, expand business fields for support of direct marketing,

and secure an overwhelming leading position in direct marketing support.

Radio,Newspapers,Magazines,Internet,

Mobile

devices,Out of home

TV(Programs),TV(commercials)

Business

Planning, Creative Planning, Media Planning,

Order Management, Performance Analysis

ProductDevelopment

Data

Processing, Distribution andPayment, CRM

media

Direct marketing support

business field

HouseholdMiscellaneous,

Beauty,

Health food

Conceptual Diagram of Second Phase Strategies

Category

１

Measures to expand existing business

３

Development of cross-media business

２ Strengthening of solution services

service

etc

29

30

＜

Medium-term business strategies

＞

Focal points during FY2/12:

The second phase

●

Measures to expand existing business

•Expand scale of business with existing clients, and develop business with new clients for further business growth•Provide new types of industries with support for direct marketing•Expand scope of TV commercial slots

●

Strengthening of Solution Services

•Improve quality of call center operations and increase sales•Conduct test runs for customer relationship management (CRM) services

●

Development of Cross-Media Business

•Further expansion in media other than TV programs and commercials (such as radio and newspapers)•Develop various types of internet-related media using PCs, mobile terminals, smartphones

and other devices

Continue execution of Second Phase

We will continue in FY2/12 to focus on second phase strategies and develop business to secure our market position.

31

1 Measures to expand existing business

79.1 71.5 69.2

26.920.0 24.70.9 3.8 3.9

Measures for FY2/12

Continue efforts to expand business with existing clients and cultivate new clients

Develop business fields other than health foods, cosmetics and household items (such as apparel, foods, video software, telecommunications equipment,

insurance/finance, and membership recruitment)

Continue expansion in TV commercials

Expansion of business from existing clients and development

of new clients

Direct marketing support programs for new client

categories

Expansion of TV commercials

62

5044

Other

（¥mn）

FY2/09 FY2/10 FY2/11FY2/09

4QFY2/10

4QFY2/11

4Q

8 9 12

（：%）

75

60

45

30

15

0

100

75

50

25

0

We will continue to seek further expansion of existing business,

focusing on our mainstay field of television.

Measures to expand existing


Share of Media Buying

Over ¥250 million

￥50 million to ¥125 million

¥125 million to ¥250 million TV(programs)TV (commercials)

Other media buying

Expansion of business from existing clients and development of new clients

Direct marketing support programs for new client categories

Expansion of TV commercials

32

2


Measures for Order Management services

Measures for CRM services

4,233

2,472

3,363

Further strengthen Order Management services, and work toward providing Distribution and Payment services.

Conduct test runs for customer relationship management (CRM) services

5,000

4,000

3,000

2,000

1,000

0

（¥mn）

FY2/09 FY2/10 FY2/11

Strengthening of solution services, such as Order Management, Distribution and

PaymentsExpand solutions business with CRM services

Secure a lineup responsive to the needs of client companies, and further

expand business volume

Conduct test runs for customer relationship management (CRM) services

Measures for FY2/12


CRMDistribution

andPayment

Data Processing

PerformanceAnalysis

OrderManagement

MediaPlanning

Creative Planning

BusinessPlanning

Product Development

Current main service areas

Service areas that we aim to reinforce

Outsourcing Expenses

33

3 Development of Cross-Media Business

Measures for

expansion in other media buying

181

9831,1061,200

1,000

800

600

400

200

0

（¥mn）

• Further expansion in media other than TV programs and commercials (such as radio and newspapers)

• Develop various types of internet-related media using PCs, mobile terminals, smartphones

and other devices

Measures for FY2/12

FY2/09 FY2/10 FY2/11

Develop cross-media marketing over the medium to long term, focusing on TV programs and commercials

Development of Cross-Media Business

Other Media Buying Expenses

News-

papers

Maga-

zines

Out of home Radio

TV commer-

cials

Internet

Mobile devices

Develop cross-media business via delivery of TV programs and commercialssynergized with other media

We plan to deploy TV program content across other media, thereby increasing exposure

and leading to consumer purchases

By developing complementary communication channels for information to flow across several media, we aim to

bolster consumer purchases.

Part 1: FY2/11





Forecast



34

Company Profile

Established March 2006

Head Office 2-4-1, Shiba-koen, Minato-ku, Tokyo, Japan

Representatives Isao Senoo (CEO); Akio Maruta(COO)

Business Content Support services for direct marketing, centered on television shopping sales

Capital ¥633million (As of February 28, 2011)

Shares Issued 7,525,500shares (As of February 28, 2011)

No. of Employees 93 (As of February 28, 2011)

Providing a phone number, URL or other contact information through TV, Internet or

other media outlets, and selling products and services through direct, interactive

communication with consumers via telephone or email.

Definition of “Direct Marketing”

35

We will contribute to society as a company that striveswholeheartedly to resolve issues in order to properly establishbonds between our clients’

products and services and consumers.

Philosophy, Creed and Management Principles

CorporatePhilosophy

The consumer’s satisfaction is the client’s satisfaction, and ours.Company

Creed

ManagementPrinciples

Speedy Going Concern Innovation

36

Business Domain

The direct marketing value chain

CRMDistribution

andPayment

Data

ProcessingPerformance

Analysis

Order

Management

Media

Planning

Creative

PlanningBusinessPlanning

Product Development

Pro

duct se

lection a

nd p

ricin

g

Concept se

lection a

nd

pro

gra

m p

roduction

Media

schedule

and

obta

inin

g s

pace

Ord

er

meth

od s

ele

ction a

nd

managem

ent

Com

pili

ng o

rder

and

ship

pin

g d

ata

Dete

rmin

ing the s

hip

pin

g a

nd

settle

ment m

eth

od

Form

ula

ting

strate

gie

s fo

rim

pro

ved c

ust

om

er

satisf

action

and c

ontinued s

ale

s

Busi

ness

pla

n a

nd

stra

tegy

form

ation

Effic

iency

eva

luation a

nd

anticip

ation o

f fu

ture

resu

lts

Comprehensive Suite of Services for Direct Marketing

Exam

ple

of Tri

Exam

ple

of Tri--Sta

ge

Sta

ge’’ s

s

Solu

tions

Lin

eup

Solu

tions

Lin

eup

37

Tri-Stage acquires the various services necessary for TV shopping from suppliers and outsourcers.We then add our unique expertise to provide client companies with comprehensive support for

direct marketing.

Suppliers/

Outsourcers

Client Companies Tri-Stage

Provide SolutionsVarious services

Purchas SolutionsPurchase payments

Consumers

Products

Payment

Advertising agency

Program/creative producer

Call centers

Logistics companies

etc

Tri-Stage’s Business Model

38

Source of Competitiveness (Strengths)

Many premium TV time slotsMany premium TV time slots Order management expertise Order management expertise Data analysis capabilitiesData analysis capabilities

Pre-purchasesLarge volume purchasesFixed period purchases

Comprehensive order managementat call centers

In-house developed quantitativeassessment system

Maximize cost-effectivenessby lowering media costs

Maximize the lifetime valueof customers and products

Effective media typeand creative planning

Total solutions based on data analysis

Help expand business for companies using direct marketing

1. Media: Media ratio (sales to ad costs)1. Efficient call center management

2. Content: Monitoring system2. Response scripts (talk manuals)

3. Order Management: Various data evaluation systems

39

40

(Number of clients)


1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Over \250 million 6 6 7 8 7 9 10 9 9 11 11 12

\125 million to \250 million 6 7 3 3 4 2 3 3 6 4 5 6

￥50 million to \125 million 4 6 10 8 8 11 9 5 8 8 7 5

Other 26 16 18 25 26 26 31 33 31 32 40 39

Total 42 35 38 44 45 48 53 50 54 55 63 62

FY2/09 FY2/10 FY2/11

FAQ

・

We do not recognize any other company as a true competitor at this point.

・

While there is always the potential for a competitor to arise in

the future, we believe that our

expertise founded on many years of experience, along with continual refinements that will

enable us to retain the highest skill levels, will allow us to remain solidly competitive (in terms

of market share, skill, expertise and personnel).

There are three methods: (1) a fluctuating rate based on client company sales and other

results on top of costs from services provided; (2) a fixed fee on top of total costs from

services provided; and (3) a fixed percentage of client company sales.

What is the potential for the rise of competitors?

How does Tri-Stage charge client companies?

・

The benefits of cross media are (1) greater earnings from new markets and an increase in

customers; (2) an increase in sales synergies from cross-selling; and (3) reduced risk of

earnings fluctuation. We feel that cross-media marketing will allow us to both increase

earnings and reduce risk.

・

We are aggressively hiring new graduates each year, equalizing our age groups.

・

We will invest to expand business, including investing in internal IT systems, paying deposits to

suppliers, and promoting the development of cross-media marketing.

How will earnings change with the increase in cross-media marketing?

What are your plans for increasing personnel (consultants), and your investment plans (financing needs)?

・

We expect the market for direct marketing to continue to grow, though the rate

of growth is slowing as the market scale expands overall.Will the market for direct marketing continue to grow?

41

Contact

Head Office 2-4-1, Shiba-koen, Minato-ku, Tokyo 105-0011, Japan

Contact Tri-Stage inc.

Management Adiministration

Dept.

TEL 81-3-5402-4111

E-mail [email protected]

URL http://www.tri-stage.jp

42

Disclaimer

Forecasts regarding future earnings presented in this presentation are estimated by the Company based on information available at the time of release, and include risks and other uncertainties. Accordingly, there is no guarantee that the Company will achieve these forecast figures.

Changes in the internal circumstances of the Company or external

business environment may have an impact, whether direct or indirect, on the Company’s earnings. Please be aware of the possibility that the

forecasts presented in this presentation may change.

43

FY2/11 Results · PDF file9. Cost of Sales, Gross Profit (FY2/11 4Q) Media purchasing...

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