Financial Results of the 3rd Quarter of Fiscal Year Ending September 2020
CHANGE Inc.
Security Code: 3962
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence.
Our mission
Change People, Change Business, Change Japan.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 1 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Our Issue
Change People, Change Business, Change Japan.
Now, here
Less than and equal 14 | 15 - 64 years | Higher than and equal 65 Aging ratio |
Source:"Table 1-1-1-1 Japan's population transition" White Paper Information and Communication in 2016 MIC http://www.soumu.go.jp/johotsusintokei/whitepaper/ja/h28/html/nc111110.html※based on data from the "Census" (MIC) until 2015 and the "forecasted population in Japan " (National Social Security and Population Problem Research Institute (2013 forecast)(median estimate for birth and death)
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 2 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Our Vision
Changing Productivity
Human | x Tech |
(Education & Training) | (NEW-IT) |
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 3 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Efforts for ESG
Our mission of "Productivity Innovation" is to change Japan sustainable. In considering long-term sustainability, the ESG perspective is essential.
Labor | Improving | Local | Maintaining |
resource | aging | ||
productivity | communities | ||
inefficiency | infrastructure | ||
Human resource | DX | Access to the | Region | Resilience to and | |
Traceability | recovery from | ||||
development | market | Creation | |||
natural disasters | |||||
Governance | Governance |
Optimizing | Eliminating | Stability and |
evaluation | ||
maturity of | ||
information-gap | ||
and reward | ||
local companies | ||
Sustainable
Local finance
ESG is the very center of the business theme we pursue.
We will change how to do business so that the business will be sustainable.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 4 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Efforts for ESG
~ [E] Local Production and Local Consumption of Electric Power and Donation of FIT Electric Power ~
We provide a system in which people can donate and consume electricity generated and not used in individual houses, such as photovoltaic power.
Usual
purchase for
surplus
electricity
House, etc. | Giant power companies | Nationwide users | ||
Power sales (e.g. ¥7.0 /kWh) | Supply |
Payment
House, etc. | ENECHO | Regional new power | Local users | |||
companies | ||||||
Donation
through
"Enecho"
(energy choice)
Donation (¥0/kWh)
Gift Brokerage
• Contributing to the | • Zero cost procurement |
community | • No need for individual |
• Gift items (not cash) | payment operation |
Supply
- Lowering electricity cost
- Enhancing environmental value
- Contributing to regional economy
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 5 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Efforts for ESG
~ [E][S] Crowd-funding through Donations to Solve Community Issues ~
We provide frameworks to find solutions for issues in local communities through the power of people's empathy and donations.
Local governments become the main body for crowd- funding
Creating "projects" for approaching to the issues in local communities
More specify the "usage" of donations collected through hometown tax payment
system to "projects"
A system to collect donations from people who feel empathy to the project
Total donations (cumulative) Exceed 7.9 billion yen
Hokkaido
Furusato
Donation
"It's a yell to Northern Healthcare!"
北海道ふるさと寄附金 「今こそエールを北の医療へ!」
Reborn! Takashi Nagai Memorial, author of "The Bell of Hiroshima"
Okinawa's symbol "Shuri Castle" reconstruction support project
Protect Teuri Island, the world's largest seabird breeding site!
Set a world record in Tendo, the town of Shogi! 4000 people play at the same time! 2000 Games Project
Tawaramoto-cho (Nara) Mutual cooperation Japan Toilets that make everyone happy
Revive the bowls that collapsed in the Kumamoto earthquake by "patching with gold"!
Protect the nature of the damaged miracle island Shunkunitai and pass it on to future generations
Project to prepare for a power outage Protect the safety with solar power!
Support people who lost their homes. Ease the severe evacuation lives, like "sleep outdoors" "sleep in a car"…
Do not abandon children in any situation! "Place to stay" for children suffering from relationship poverty!
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 6 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Efforts for ESG
~ [S] Smoothly Assisting Handicapped Passengers Getting On and Off the Train with the "Barrier-free app" ~
We created the app which streamlines station staff's assistance for handicapped passengers, enabling their smooth guidance without errors, which had been carried out by phone call in the past.
I want to go | Certainly |
xx station | |
Boarding
station
Select destination
Let me lead the way
Read QR on the door
(Track the Door Position)
Exit
station
Arrival notice
Alarm
Automatic linkage
Stand ready at the specified time and the position
Welcome! I'm already
prepared.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 7 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Efforts for ESG
~ [S] Human resource development and comprehensive regional care in the Super-aging society ~
In the future, it will be difficult for many elderly people to be on their deathbed in the hospital. So, we will accumulate "nursing" knowledge and human resources doing the service to meet their needs for terminal-care in their homes and nursing care facilities.
What can you do for a person who is on one's deathbed?
Let's change from feeling awkward to having confidence for end-of-life
May everyone can feel, "I'm glad I've been alive."
May everyone can meet the end of their life with proud.
When there is someone who understands one's suffering, a person can be peaceful even on one's deathbed.
Everyone from children to the elderly may live calmly despite suffering.
Support each other.
Learn from each other through the community.
Create a sustainable co-exist society. | 656 | 6,560+ | |||||
persons | |||||||
252 | 2,376+ | 40+ | |||||
persons | 3503 | ||||||
105 | 20+ | persons | |||||
291+ | 2334 | ||||||
persons | 159 | ||||||
5 | persons | ||||||
1358 | 89 | ||||||
568 persons | persons | 10 | 656 | ||||
436 | |||||||
80 | 223 | ||||||
2015 | 2016 | 2017 | 2018 |
Training of helpers | ||
Basic course | ||
Workshop | (in-house) | |
Participant | 2500 persons | |
12,894+ people | ||
2074 | ||
persons | ELC | |
Community | ||
50+ points | Training of helpers | |
4433 | ||
Basic course | ||
persons | ELC | (Open course) |
6500 persons | ||
Facilitator | ||
257 persons
ELC
Assistant
927 persons
20192020
(Estimate)
treatment.
Japan is facing the super-aging society, in which many elderly people are supported by a small number of working-age population. As social resources become ubiquitous and people's bondages in local areas become scarce, more and more people will suffer in obscurity . Consequently, there are limits regarding what traditional social security systems can solve.
In particular, in the face of the suffering of people and their families who have reached the final stage of their lives, various measures have been taken so far, but the current situation is that no drastic solution has been reached. In the future, it will be difficult to to be in the hospital until the end, and it will be necessary to be at home or in nursing care facilities. In fact, the number of people who want to stay at home or in nursing care facilities is increasing, but not all hope will come true for the reasons of limited environment and resources. It is expected that there will be an increasing number of working generations who suffer for balancing work and home nursing care, as well as people who are less connected to the local community and have isolation and fears in their individual lives.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 8 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Efforts for ESG
~ [G] Full compliance to the Corporate Governance Code ~
In this FY, we will fully satisfy the four pending issues regarding the compliance matter in FY 2019.
English
Disclosure
Planning
Successor
Performance-
based
compensation
Valuation on
the board
effectiveness
Explain
Explain
Explain
Explain
FY2019
Although we already disclosed some of our financial statements in English, we did not disclose securities reports, convocation notices, or other disclosure documents in English.
We did not prepare a successor plan regarding CEO.
We have not adopted performance-based remuneration.
We did not regularly analyze and evaluate the board of directors.
FY2020
We will satisfy the requirements for English disclosure. We will translate and disclose the summary regarding
Comply the financial report,securities reports and the convocation notices in English as soon as possible after the release of the Japanese original.
We first describe our
Comply requirements (personality, quality, skills, etc.) for the successor before preparing it
We will introduce performance-
Comply based compensation since FY 2021.
We will implement evaluation
Comply on effectiveness of the board of directors.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 9 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
3rd Quarter Overview
Future prospects
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 10 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
The 3rd Quarter Results (Consolidated)
Although we revised the forecasts upward in the first half period of this fiscal year, performances of the Group are further growing mainly in the Publi-tech business.
5.12 Revised full-year | 1-3Q performance |
target (Consolidated) | (Consolidated) |
Breakdown for business segment
(unit:million yen) | amount | % | amount | % |
Net sales | 10,500 | 100.0% | 8,762 | 100.0% | ||||
Cost of goods sold | 3,674 | 35.0% | 2,604 | 29.7% | ||||
Gtoss profit | 6,825 | 65.0% | 6,157 | 70.3% | ||||
SG&A expenses | 4,205 | 40.1% | 2,870 | 32.8% | ||||
└goodwill among them | 374 | 3.6% | 277 | 3.2% |
(Reference)
1st Half Cumulative
(unit:million yen) Net sales
- Sales to customers
- Between segments
Segment profit
NEW-IT | Investment | Publi-tech | Adjusted |
Transformation | |||
1,412 | ― | 4,772 | ― |
1,412 | ― | 4,772 | ― |
― | ― | ― | ― |
263 | △10 | 2,861 | △505 |
Operating income | 2,619 | 24.9% | 3,286 | 37.5% | ||||
Non-operating income | 22 | 0.2% | 24 | 0.3% | ||||
Non-operating expenses | 18 | 0.2% | 14 | 0.2% | ||||
Ordinary income | 2,623 | 25.0% | 3,296 | 37.6% | ||||
Pre tax income | 2,623 | 25.0% | 3,296 | 37.6% |
1-3Q Cumulative
(unit:million yen) Net sales
- Sales to customers
- Between segments
Segment profit
NEW-IT | Investment | Publi-tech | Adjusted |
Transformation | |||
2,143 | 0 | 6,623 | △4 |
2,138 | 0 | 6,623 | ― |
4 | ― | ― | △4 |
449 | △15 | 3,648 | △796 |
Coreporate taxes | 1,062 | 10.1% | 1,239 | 14.1% | ||||
Net income | 1,561 | 14.9% | 2,057 | 23.5% | ||||
Profit attributable to | 1,022 | 1,412 | ||||||
parent shareholders | ||||||||
Profit attributable to | 539 | 644 | ||||||
uncontrolling shareholders | ||||||||
(reference) EBITDA | 3,283 | 31.3% | 3,816 | 43.6% |
- Due to the rounding, the sum value may not match.
- Adjustments to segment income are primarily general and administrative expenses related the whom group.
Regarding NEW-IT, we are rapidly reviewing and upgrading services and customer portfolio(supplemented on the next page).
Regarding, investment, no EXIT in this quarter.
Regarding Publi-tech, we are further support local governments for their countermeasures against the Covid-19
next page).
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 11 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Supplement to Summary of Activities
~ NEW-IT Transformation Business ~
We quickly revised the "winning strategy" prepared before the Covid-19, and the positive results have already begun to arise.
Review the
service
systems
Before the Covid-19 spread
Human resource | Creation of PJ | |
development | Startup support | |
organized by DX | ||
Hands-on type | organized by DX | |
Workshop | organizations | |
A positive cycle in which trainees of training services become new "buyers" in the customer's organization
Traditional thick training services of a classroom type with an "entry" function
became unavailable.
After the Covid-19 spread
Focus on complete online form by digitizing the entire services
"Introduction" is replaced and enhanced through E-learning and open-type webinars.
Not starting from DX promotion but we reached customers who are working as an urgent issue to promote remote setting and transformation under the Covid-19.
Before the Covid-19 spread | |||||
Transportation | ■ Railway ■ Aircraft | ||||
Replace | industry | ||||
Customer | Retail trade | ■ Department store ■ Fashion | |||
Portfolio | |||||
Commercial | ■ General trading company | ||||
■ Wholesaling | |||||
Manufacturing | ■ Automotive |
■ Heavy machine industries | |
industry | |
■ Office equipment ■ Chemicals | |
After the Covid-19 spread
■ Central Government | |||
Public offices | ■ Education ■Local government | ||
■ Public entities | |||
Finance | ■ Life and non-life insurance | ||
securities ■ Securities | |||
Information and | ■ SI ■ Telecom carriers | ||
communications | ■ Cloud services |
Focus on industries that maintain comparatively strong investment under the Covid-19, and projects are progressing.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 12 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Supplement to Summary of Activities
~ Publi-tech Business ~
We support local governments who are committed to responding to the Covid-19 disaster in all directions, including financial, industrial, and business operations.
Crowd-funding that has been
projected more concretely for the | |
"usage" of donations using our | |
"Furusato" (hometown) tax system | |
A number of Covid-19-related | |
projects launched nationwide and | |
collected a number of donations. | |
Furusato (hometown) tax payment donating | |
clothes or bags that users no longer wear or | |
carry | |
Commonly known as the "Dan Chari Project" | |
(Decluttering (Danshari) + Charity) | |
New Furusato tax payment that leads to | |
Furusato Choice | support local governments through donating |
disused articles |
Support producers of reginal staples
which have no way to go because the | |
food-service industry has dropped due | |
to Covid-19. | |
More "return gifts" can be received for | |
now by making good use of the subsidy | |
system supported by the Ministry of | |
Yell gift items | Agriculture,Foresty and Fisheries. |
- Enterprise applications series that can be used through LGWAN, an integrated administrative network for dedicated administrative lines.
- Promoting the prompt transmission, sharing and collecting of information required to respond the Covid-19 and support decision making.
- Platform services for local governments to manage local currency
- Nishi-Izucity government (Shizuoka) announced that it distributes 10,000 yen of the local currency, "Sunset Coin", to all citizens.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 13 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Major Topics in the 3rd Quarter
~ Support Customer's DX which Help Promote their Telework Environments to Prepare for the 2nd Wave of the Covid-19 ~
Taking advantage of the lessons learned when responding to the Covid-19 First Wave, we have packaged a telework environment that meets the requirements of "Secure", "Simple", and "BYOD"
Cloud collaboration
Easy Telework
environment
Measures against
cyber-attacks
Data leakage prevention
Non-touching PC
deployment
Basic consulting
Stay productive with teamwork, even remotely
Use office PCs and virtual desktops securely, even remote from home
Protect home PC usage that is vulnerable to attacks
Reduce the risk of "absent-minded" leakage in confidential documents
Complete kitting without touching (zero touch)
Support of environment equipment, security, rules, usage, etc. entirely
※ The logo is a trademark or registered trademark of each company.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 14 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Major Topics in the 3rd Quarter
~ Analyzing Data regarding Telework Productivity ~
We originally developed this service for the retail industry, and we renovated and provided them even for telework.
Adoption rate
Analysis of measurement data regarding productivity
Rapid | ||
diffusion of | All companies | Large enterprise |
Telework | ||
18,002 companies | 2,907 companies | |
Approx. 56.4 % | Approx. 83.0 % | |
※Source: Shoko Research 2020.6.16 5th Survey on the Covid- 19, "Did you perform telecommuting and remote work?"
Difficulty in managing employee | |
Personnel | work status... |
Unable to assess job performance |
and labor | properly... |
issues | → Difficulties due to "not be able to |
see" each other's work are obvious |
For Retail
trade
(conventional
service)
For
Telework
(newly
established)
Compound analysis of POS data and attendance data
Visualization of individual contribution of gloss profit including backyard employees
Proper recruitment and evaluation of human resources
Analysis of log data of PCs and internal systems
Visualization of the content based on the "atmosphere" in the traditional workplace by means of data
Bringing the problem encountered by employees in unfamiliar telework environment into the open
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 15 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Major Topics in the 3rd Quarter
~ Investing in beBit, Inc.~
We invested in beBit, Inc, which provides DX/UX support for large companies. (Announcement on July 27)
Name
Businesses
CEO
Address
Foundation
Investors (this time)
(Unordered)
beBit, Inc
UX Intelligence business
UX design consulting
UX Growth Hack support service
Naoki Endo
10th floor of the Shin-Otemachi Building 2-1,Otemachi2-chome,Chiyoda-ku, Tokyo
March 2000
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence.
- The logo is a trademark or registered trademark of each company.
‐ 16 ‐
Major Topics in the 3rd Quarter
~ Aid for Torrential Rain Disasters in July ~
Even after the torrential rain disaster that hit various places in July, many donations and cheers gathered at the earliest opportunity.
Furusato Choice's support for disasters
The "Application Form for Emergency Donation for Disaster" was established in July 4, 2020 to support disaster-stricken areas.
Reached to 100 million yen in four days after the start of the application.
Total donations exceeded 560 million yen *as of August 11.
230 million yen or more was donated by proxy donation *as of August 11.
Accepting donations to 62 provinces and cities of Kumamoto, Kagoshima, Miyazaki, Nagasaki, Fukuoka, Oita,
Saga, Gifu, Shimane, Nagano and Yamagata * as of July 30.
Proxy
Donation
Proxy donation is the system that greatly reduces the workload of local governments affected by the disaster, and promptly delivers the support of public to the disaster area, by accepting donations on behalf of local governments that are not affected by the disaster.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 17 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Major Topics in the 3rd Quarter
~ LoGo Series Supporting the Covid-19 Measures ~
While local governments are busily working on the Covid-19 measures, digitization is rapidly progressing due to necessity.
Number of "LoGo Chat" introduced | "LoGo Form" used for the Covid-19 Measures | |
Business chat for both LGWAN and the Internet
Quick and leak-free coverage of extensive information within governmental offices
Increase response speeds with the shift to teleworking for governmental staff
It also serves as a platform for sharing knowledge across multiple local governments.
Work volume reduction equivalent to 98 hours per employee per year. (due to reducing coordination for a series of reports and meetings, and reducing e-mail responses, etc.)
Form tools used for both LGWAN and the Internet
No knowledge or skills are needed, and staffs can create them quickly and easily
Forms (= Knowledge) can be shared between multiple local governments
71 local governments introduced this Form from the start of our service on March 2 to August 7.
Many local governments utilize the Form for operations regarding the Covid-19 related 100,000yen subsidy.
Speed of payment improved through the check functions, etc.
Number of | |
accounts | |
250,000 | |
200,000 | |
150,000 | 157,667 |
100,000 | 261 |
50,000 | |
0 | April |
※ Figures are at the end of the month
※ Include the number of relevant organizations
Number of
local governments
243,139 | 500 |
446 | 400 |
300 | |
200 | |
100 | |
July | 0 |
Hamamatsu City (Shizuoka) Staff
- LoGo Form's agile style has enabled us to release production environments in just four days from the start of construction. LoGo Form enables multiple-entries, so simultaneous inputs of account information from several ward offices have been carried smoothly.
In addition, we were able to reject the input regarding "No one-byte character and lowercase" in the JBA format, which dramatically improved the granularity and accuracy of the transfer data. In addition, the risk of double payments can be reduced by the multiple input check function, and we can enter data safely.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 18 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Major Topics in the 3rd Quarter
~ Effects of Cost Saving due to LoGo Chat ~
We conducted a survey on approximately 1,300 local government employees. Amid they are extremely with the Covid-19 measures, we can see that they select LoGo Chat as a truly effective NEW-IT solution.
Before | After | Work reduction (cost saving) equal to 24.6 | |||||||||
Calling, receiving, transferring | minutes a day = 98 hours a year | ||||||||||
67.6 minutes per day | |||||||||||
Sending, receiving | 58.4 minutes | ||||||||||
△ 9.2 minutes, 14% reduction | |||||||||||
40.3 minutes per day | Telephone | Calculated from reduced travel time | |||||||||
Filing paper, etc. | 33.1 minutes | Fuel charges for official vehicles | |||||||||
17.2 minutes per day | Telephone | △ 7.2 minutes, 18% reduction | ¥3,380 reduction | ||||||||
per person per year | |||||||||||
15.9 minutes | Reduction of time for driving is converted to | ||||||||||
Scheduling of meetings, etc. | △ 1.3 minutes, 8% reduction | gasoline cost: 1.3 minutes x 240 days = 5.2 hours | |||||||||
per year, | |||||||||||
17.8 minutes per week | 50 km/h travel distance = 260 km when λ (130 | ||||||||||
Yen) driving 10km with 1 of energy-saving | |||||||||||
(3.9 minutes per day) | 13.8 minutes | gasoline | |||||||||
Reporting, meeting, discussing | △ 4.0 minutes, 23% reduction | ||||||||||
(3.0 minutes/△ 0.9 minutes per day) | |||||||||||
82.3 minutes per week | |||||||||||
(17.8 minutes per day) | Data | 64.4-minute | |||||||||
collection | △ 17.9-minute, 22% reduction | Items other than time | |||||||||
Data | |||||||||||
Inside or outside conferences | (14..0 minutes/△ 3.8 minutes per day) | Cost of printing and copying paper | |||||||||
Scheduling | collection | ||||||||||
Reduce 478 sheets | |||||||||||
126.7 minutes per month | Reporting, | Scheduling | 107.1 minutes | per person per year | |||||||
(6.3 minutes per day) | etc. | Reporting, | △ 19.6 minutes, 15% reduction | ¥3,887 reduction | |||||||
etc. | (5.4 minutes/△ 0.9 minutes per day) | ||||||||||
Movements on cars, etc. | Conference | Printing and copying of paper materials | |||||||||
Conference | |||||||||||
276.9 minutes per month | 249.3 minutes | Reduced by 9.2 sheets per week | |||||||||
Movement | 9.2 sheets × 52 weeks = 478 sheets per year | ||||||||||
Movement | △ 27.6 minutes,10% reduction | ||||||||||
(13.8 minutes per day) | |||||||||||
(△ of 1.3 minutes per day per 12.5 minutes) | Calculation method: | ||||||||||
Printing, coping paper | Graph is displayed per day | printing cost + paper purchase cost | |||||||||
410.0 sheets pf paper | Assuming that black & white 70% (2 yen) and | ||||||||||
419.2 sheets per week | △ 9.2 sheets, 2% reducion | color 30% (20 yen), and one copy paper unit: ¥350 | |||||||||
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 19 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Major Topics in the 3rd Quarter
~ Progress in Preparation for Transition to IFRS ~
We made further progress in transition to IFRS which we started preparation since we adopted the consolidation in December 2018.
We will prepare securities reports for financial results of the fiscal year ending September 2020 in accordance with IFRS at the earliest.
Profit/sales ratio
Operating | Cost of sales | |
income | ||
33.6% | ||
30.9% | ||
Net sales | ||
11,000 | ||
Millions of yen | ||
Amortization | ||
of goodwill | SGA cost | |
3.4 % (Excluding goodwill) | ||
32.1% |
※ Calculated based on the revised target later to be explained
Initial purpose for adopting IFRS
To mitigate the impact of goodwill amortization
In order to make it easier to select M&A as an effective management tool in the future
As part of our efforts to enhance IR for overseas investors
- In the current environment where we more advanced our operations, the shift to IFRS is more important.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 20 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Other Topics in the 3rd Quarter ~ CHANGE ~
We quickly reviewd our services in order to respond to the urgent challenges of customers.
April to Jun. 2020 (3Q)
04.06 We developed and provided the application dedicated for Tokyo Metro Co., Ltd. for sharing information during an emergency.
04.08 Reacting to the COVID-19 emergency declaration by the government, we started to provide the "telework start-up integrated package" for companies who are at an early stage for adopting telework systems.
04.16 We started providing solutions of full online shift for training sessions by companies.
04.22 We officially started selling the "StrcutionSite", or the 360 degrees image solution to promote DX for construction companies, which is titled ~ Special free trial of this product as a measure for preventing infection by the COVID-19 ~.
04.28 We started providing online training for companies that continue closure after May due to the COVID-19.
05.11 We recommend the "Zero Touch Kitting", a non-contact type PC deployment method, to promote telework and protect employees.
05.14 We were designated by the IPAS to make research of the "diffusion of DX use case and improvement of DX promotion model" and released the results.
05.27 We allied with TrustBank to promote the digitization of administration by using Blockhive and knowhow of Estonia (the electronic nation). 05.28 We reported the progress of the Group's business development toward the realization of the Super City.
06.01 We announced the extension of the available period for shareholder benefits.
06.02 We began to provide the E-learning named "basics of learning 5G for the first time" that can be learned in a short-term intensive manner. ~ Expansion of E-learning content to promote understanding of digital utilization in businesses ~
06.04 We launched the "DX human resource development system consulting package" to build a DX human resources in a short period of time.
06.19 Key points of DX-based telework environments that support the way we work after/with Covid-19 in preparation for the second wave ~ We provide a secure telework environment in one-stop manner from now to after-sales. You are not late ~.
06.24 We start data analysis service for productivity-measurement in telework.
From July 2020
07.14 We announced share splits and a partial amendment to the Articles of Incorporation and the Shareholder Benefit System. 07.27 We invested in beBit, Inc. which has an overwhelming strength in the UX design consulting market.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 21 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Other Topics in the 3rd Quarter ~ TRUSTBANK ~
As the effects of the Covid-19 infection spread, we keep on providing supports for local governments and local industries.
April to Jun 2020 (3Q)
04.13 200 local governments (amounting to 100,000 accounts) have adopted the "LoGo Chat", our chat system using the LGWAN dedicated for them.
04.21 The Fukaya city government in Saitama Prefecture announced the cost saving effect is about 44 hours a year per an employee by adopting the "LoGo Chat".
04.27 Regarding the Hokkaido government's fund-raising for regional medical care related to the COVID-19 through our hometown tax (donation) payment system (hereinafter, the "Furusato Choice System"), they succeeded in raising ¥50 million (the goal) only in a day.
04.28 We started a campaign in which we would give JTB travel tickets equivalent to yen10,000 to 100 persons who would be chosen by drawing when they "stay home" during the Golden Week.
04.29 We urgently held a free online hometown tax seminar for the first time since we started the Furusato Choice.
04.30 We launched the "wide area allied local governments cloud funding" using the Furusato Choice System.
04.30 We broadcasted live programs through the "Furusato Choice Cannel", our official Youtube channel from May 1 for 5 consecutive days.
05.01 We started the new initiative to support major industries that are affected of the COVI-19 through the Furusato Choice System.
05.01 We started the "Kizuna (bonds of people)PJ connected by Matsuzaka Beef" to protect livestock farmers and brands affected by the COVID-19 in Taki-cho in Mie Prefecture through the Furusato Choice System.
05.01 We started services for supporting local restaurant measures and other economic measures taken by the Fukaya city government in Saitama Prefecture to prevent expansion of the COVID-19.
05.01 The Kamakura city government in Kanagawa Prefecture started fund-raising of ¥10 million to support regional industries affected by the COVID-19 through the Furusato Choice. 05.01 The Takashima city government in Shiga Prefecture started the project for sharing rice in accordance with their win (buyer)-win(seller)-win (local community) culture.
05.01 We completed registration for starting electricity retailor business with the Ministry of Economy, Trade and Industry.
05.07 The Sakaimachi town government in Ibaraki Prefecture and Gigi are developing a nationwide project to "convert local restaurants" into restaurants for children by utilizing the Furusato Choice System.
05.08 We, the Committee to realize donating the COVID-19-related subsidy of ¥100,000, public resources, and Yahoo Japan opened special websites to search the place to which people donate their money.
05.15 The Kanagawa prefecture government started to accept donation through the Furusato Choice System for support for workers engaged in healthcare, elderlycare, and well-being and volunteer groups working on the forefront against the Covid-19.
05.18 The Nishi-Izu cho government in Shizuoka Prefecture started to distribute regional currencies to all citizens and local businesses affected by Covid-19 as financial support measures. 05.21 The Shizuoka prefecture government started to accept donation for support for workers engaged in healthcare, elderlycare and welfare.
05.26 The Hamamatsu city government in Shizuoka Prefecture succeeded in efficient transfer of subsidy(¥100,000) to all citizens by using our LoGo Form, a tool for creating document form.
05.26 Nationwide local government officials participated in the "TrustBank Academia".
05.27 We allied with Blockhive which is promoting GovTech and Estonia (E-Nation) to promote the digitization of administration using their know-how.
05.29 We launched the "Niihama Akagane Point", digital money that can be used in local member stores in Niihama City in Ehime Prefecture.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 22 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Other Topics in the 3rd Quarter ~ TRUSTBANK ~
(continued)
April to Jun 2020 (3Q)
06.01 300 local governments have adopted the "LoGo Chat", our chat system using the LGWAN dedicated for them.
06.02 We and JA Group expanded the primary industry support project affected by the Covid-19 and launched the second campaign.
06.04 The total of donations of the the Covid-19 related subsidy and other donations related to countermeasures against the Covid-19 reached ¥100 million.
06.04 We began the fashion charity project and services in which people can donate in-kind (other than money) to local government working for Covid-19 prevention.
06.09 The Maibara city government in Shiga Prefecture started fund-raising to support the Covid-19 countermeasure project by utilizing our Furusato Choice System
06.12 We started receiving an application for a new gift from Higashikawa -cho government in Hokkaido named the "Luxurious gourmet gift consisting of Higashikawa rice and grilled eels ", an irregular collaboration between the North and South.
06.15 The Kamakura city government in Kanagawa Prefecture attained ¥10 million funding through the Furusato Choice for support for Covid-19 affected businesses.
06.15 The Hanman city government in Osaka released a special page about the "return list thanks to collaboration" to support businesses affected by Covid-19.
06.23 We announced questionnaires whether interested in living in local areas. 56% of 1000 males and females in their 20's or higher in Tokyo area surveyed :"interested."
06.24 The Nishi Izu cho government in Shizuoka Prefecture announced support by using the digital regional currency "Sunset Coin" for economic revitalization in collaboration with the "My Number Point" business
06.25 Regarding the Covid-19 related subsidy donation project, we decided individuals, companies, and organizations who helped collecting ¥100 million.
06.30 Awa City and Yoshinogawa city governments in Tokushima Prefecture began accepting hometown tax payment for returning the "Shine Muscats" raised by high school students as the "common gift" for the first time.
From July 2020
07.01 Regarding the Covid-19 related subsidy donation project, we began the second public invitation for support in four areas, including the medical care, small and medium-sized businesses, etc.
07.03 The Hokkaido government begins raising ¥100 million to protect Hokkaido's cultural, arts, and entertainment activities by using the Furusato Choice System.
07.04 Through the Furusato Choice Disaster Support, we began accepting donations for the Kumamoto and Kagoshima Prefectures' heavy rain disasters in 2020. 07.07 The Furusato Choice Disaster Support reached ¥100 million related to the above Kumamoto and Kagoshima heavy rain disasters.
07.07 400 local governments have adopted the "LoGo Chat", our chat system using the LGWAN dedicated for them.
07.07 Natural Lawson launched the "Travel Aid" project to support local agricultural producers affected by the Covid-19.
07.14 Our Furusato Choice Disaster Support through Furusato Choice System exceeded ¥300 for the heavy rain disasters which occurred in Kyushu in July.
07.22 We launchd the "Niconico (smiling) yale products" project to support agricultural producers in areas affected by the Covid-19.
07.29 The LoGo Chat calculated the effect of cost saving equal to 98 hours per employee per year [Survey from approximately 1300 local government employees]. 07.30 Our Furusato Choice Disaster Support through Furusato Choice System exceeded ¥500 for the heavy rain disasters which occurred in Kyushu in July
07.31 The Fukaya city government in Saitama Prefecture adopted "Chiica", digital currency for local areas, to support families having small children.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 23 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
[Reference] Status of the IPO Acceleration Program
We announced on July 27 that we invested in beBit, Inc.
Investment portfolio | Time | Main Businesses and Services | Main purpose | Trend after investment | ||||||
Headwaters | 2018.4 | Providing applications for humanoids, | Providing new services | We continue to hold. | ||||||
robots, and providing solutions coordinated | knowhows) and doing joint | |||||||||
building AI platforms for communication | (integrating this and our | |||||||||
with smartphones and IoT devices | marketing activities | |||||||||
Voistart | Developing and providing services based on | Proving and developing services | 2019.9 we recognized the | |||||||
2018.7 | AI (smart) speakers especially for senior | and businesses (integrating this | ||||||||
people (supporting their daily lives and | and our knowhows) and creating a | valuation loss in Sept.2019. | ||||||||
※ Joint ownership with Mitsui & Co., Ltd. | communications with their family and | synergy in public and regional | We continue to support | |||||||
Creation of a new company | community) | revitalization | ||||||||
AI CROSS | Providing B2B mobile communication | Providing and developing services | 2019.10 Listed on TSE | |||||||
2018.7 | services, such as "In Circle" or AI based | and businesses based on AI and | ||||||||
(formerly AOS Mobile) | business chat and "AOSSMS" or two-way | supporting a public sector's | Mothers (We cntinue to hold) | |||||||
SMS for entities | efficient operations | |||||||||
Providing general purpose AI engines based | Developing use cases of various | |||||||||
GAUSS | fields, including forecasting, | |||||||||
2019.7 | on its own algorisms and developing | We continue to hold. | ||||||||
image recognition, natural | ||||||||||
comprehensive platforms necessary for | ||||||||||
continuous integration of AI | language processing, and | |||||||||
analyzing voices | ||||||||||
Promoting advanced research on drone | Promoting full-fledged social | |||||||||
Aeronext | implementation of industrial drone | |||||||||
2019.8 | of its unique gravity-center control | We continue to hold. | ||||||||
through their DaaS* development | ||||||||||
Architecture and developing license business | ||||||||||
technology globally | and drone ecosystem construction | |||||||||
* Drone as a service | ||||||||||
Its motto is "the essence of the digital age is | Providing new services | |||||||||
beBit | the UX," and supports DX/UX of large | |||||||||
2020.6 | (integrating this and our | We continue to hold. | ||||||||
corporations. Providing UX-Team Cloud | ||||||||||
knowhows) and doing joint | ||||||||||
product, "USERGRAM", in addition to | marketing activities |
domestic and overseas consulting services. | |
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 24 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
3rd Quarter Overview
Prospects
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 25 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Basic Thought for Revising Forecasts
for the Fiscal Year Ending September 2020
We are confident that we will achieve the mid-term business plan* ahead of schedule due to significant improvements in the monthly figures in July. (*Operating income base)
Regarding this 3rd time revision this year, we conservatively revised it to be achievable within the remaining period in this fiscal year.
Net sales
※ Millions of yen
Operating
income
※ Millions of yen
10,500 | 11,000 | July Monthly*Preliminary Report | ||||
9,352 | 9,463 | |||||
8,762 | 701 | |||||
About | ||||||
86.0% | 352 | |||||
progress | ||||||
Approx. 99.1 % | ||||||
5.12 | 1-3Q | 1-3Q | 2019.7 | 2020.7 | ||
results | This time | |||||
Beginning | revised | Cumulative | ||||
+July | re-revision | |||||
target | results | |||||
preliminary | ||||||
3,286 | 3,360 | 3,400 | July Monthly*Preliminary Report | |||
2,619 | About | 73 | ||||
98.8% | ||||||
1,300 | progress | Dramatically | ||||
Improvement | ||||||
△22 | ||||||
5.12 | 1-3Q | 1-3Q | 2019.7 | 2020.7 | ||
results | This time | |||||
Beginning | revised | Cumulative | ||||
+July | re-revision | |||||
target | results | |||||
preliminary | ||||||
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 26 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
After-revised Target
for the Fiscal Year Ending September 2020
We revised the target as follows:
FY09/2020 | 5.12 revised target | This time revised target | This time increase | Change in % | ||||||||
Initial target (consolidation) | (Consolidated) | (Consolidated) | (decrease) from 5.12 | |||||||||
(unit:million yen) | amount | % | amount | % | amount | % | amount | % |
Net sales | 9,352 | 100.0% | 10,500 | 100.0% | 11,000 | 100.0% | 500 | 4.8% | ||||||||
Cost of goods sold | 3,640 | 38.9% | 3,674 | 35.0% | 3,694 | 33.6% | 20 | 0.5% | ||||||||
Gross profit | 5,711 | 61.1% | 6,825 | 65.0% | 7,305 | 66.4% | 479 | 7.0% | ||||||||
SG&A expenses | 4,411 | 47.2% | 4,205 | 40.1% | 3,905 | 35.5% | △300 | △7.1% | ||||||||
└goodwill among them | 362 | 3.9% | 374 | 3.6% | 374 | 3.4% | 0 | 0.0% | ||||||||
Operating income | 1,300 | 13.9% | 2,619 | 24.9% | 3,400 | 30.9% | 780 | 29.8% | ||||||||
Non-operating income | 0 | 0.0% | 22 | 0.2% | 24 | 0.2% | 1 | 7.7% | ||||||||
Non-operating expenses | 18 | 0.2% | 18 | 0.2% | 19 | 0.2% | 0 | 4.3% | ||||||||
Ordinary income | 1,281 | 13.7% | 2,623 | 25.0% | 3,405 | 31.0% | 781 | 29.8% | ||||||||
Pre tax income | 1,281 | 13.7% | 2,623 | 25.0% | 3,405 | 31.0% | 781 | 29.8% | ||||||||
Corporate taxes | 558 | 6.0% | 1,062 | 10.1% | 1,322 | 12.0% | 259 | 24.5% | ||||||||
Net income | 723 | 7.7% | 1,561 | 14.9% | 2,082 | 18.9% | 521 | 33.4% | ||||||||
Profit attributable to | 520 | 1,022 | 1,421 | 399 | 39.1% | |||||||||||
parent shareholders | ||||||||||||||||
Profit attributable to | 203 | 539 | 661 | 122 | 22.7% | |||||||||||
uncontrolling shareholders | ||||||||||||||||
(reference) EBITDA | 1,942 | 20.8% | 3,283 | 31.3% | 4,076 | 37.1% | 792 | 24.1% |
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 27 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Progress of the Medium-Term Business Plan
We will achieve the target one year ahead of schedule on operating income level.
We will consider revising the medium-term business plan at the time for preparing the fiscal year ending September 2020.
Net sales | Operating income |
(Millions of yen) | (millions of yen) |
20,000 | 18,986 | 7,000 | |||||
18,000 | 6,000 | ||||||
16,000 | |||||||
14,000 | 5,000 | ||||||
12,000 | 4,700 | 4,000 | |||||
(old: 10,500) | |||||||
10,000 | |||||||
3,400 | 3,400 | 3,000 | |||||
8,000 | 7,054 | ||||||
(old: 2619) | |||||||
6,000 | 2,000 | ||||||
4,000 | 2,604 | 1,000 | |||||
2,000 | 1,400 | 1,550 | 1,980 | ||||
1,081 | |||||||
0 | 134 | 186 | 331 | 513 | 0 | ||
2015 2016 2017 2018 2019 2020 2021 2022 |
(Target) (Target) (Target)
N.B.: TrustBanks made a full contribution from the 2020.9 period
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 28 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
TRUSTBANK Became Our Wholly-owned Subsidiary
The Board of Directors decided to organize TrustBank as the wholly-owned subsidiary through a share exchange in order to accelerate the growth of Publi-tech business (*subject to the approval of extraordinary
shareholders meetings of both companies).
DX
Decrease of EPS due to | Increase of EPS due to | ||||||
the increase in profit | |||||||
new issue of shares | |||||||
attributable to owners of parent | |||||||
New | |||||||
992,365 shares | Approx. | About 68.2% | Approx. | ||||
Region | |||||||
5.93 % | 46.51 % | ||||||
Existing | | 100 % | |||||
Creation | |||||||
15,749,178 shares |
Current ownership of voting rights is 70.23%.
Steady progress in business expansion through collaboration of two companies
By making TrustBank a wholly-owned subsidiary, we will further improve the agility and flexibility of the Group's management structure and realize sustainable business growth and enhancement of corporate value.
We eliminated the deduction of non-controlling interests in our consolidated results and will contribute to the improvement of consolidated net income from the next fiscal year.
We requested SBI SECURITIES CO., LTD., an independent third-party calculation institution, to calculate the share exchange ratio.
Total impact on EPS
124.40 | ||
90.26 | ||
64.89 | Approx. | |
37.83 % | ||
Based on | Based on | After becoming |
5.12 revised | 8.12 revised | the wholly-owned |
target | target | subsidiary |
- EPS = Profit attributable to owners of parent / number of shares
- Profit is estimated by applying the revised forecasts for FY2020 announced on May 12 and this time.
- The number of shares is calculated by applying the weighted-average number of shares (after deducting treasury shares) for FY2020 estimated on the above days when we revised financial forecasts.
- The current percentage of profit attributable to owners of the parent does not match the simple percentage of shareholding due to the attribution of costs related to the acquisition of shares of TrustBank.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 29 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
Disclaimer
Any forecasts, estimates, etc. in the future appearing on this material were decided by us based on available information when we prepared this material, so they may be uncertain.
Actual performances in the future may depend on various factors, so they may largely differ from any forecasts, etc. herein.
[Notes of caution] This document is an English translation of the Japanese original. In the event of any differences | ‐ 30 ‐ |
or inconsistencies between the Japanese and English versions, the Japanese language version shall take precedence. | |
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Change Inc. published this content on 12 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2020 06:02:25 UTC