Consolidated Financial Results for the Fiscal Year Ended December 31, 2020
(January 1, 2020 - December 31, 2020)
Company name: Stock code:
President & Group CEO:Funai Soken Holdings, Inc. 9757
Contact:
General meeting of shareholders:
Sakae Takashima
Takahisa Okumura, director and senior vice president,
Head of Management Administration Divisional Headquarters Telephone: +81-(0)6-6232-0130
Scheduled date of commencing dividend payments: Scheduled date of filing Annual Securities Report:March 27, 2021
March 29, 2021
March 29, 2021
Supplementary materials compiled to explain financial statements? Briefing to be held to explain financial results?
Stock Exchange listing: Tokyo Stock Exchange URL:https://hd.funaisoken.co.jp
Yes / No
Yes / No (For institutional investors and analysts) (Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for FY2020 (January 1, 2020 - December 31, 2020)
(1) Consolidated Results of Operations
February 5, 2021
(Percentages represent year-on-year change)Net sales Million yen
Operating incomeOrdinary incomeNet income attributable to owners of the parent
% | Million yen | % | ||||||
Year ended Dec. 31, 2020 | 25,027 | (2.8) | 4,982 | (12.7) | 5,091 | (11.5) | 3,498 | (9.6) |
Year ended Dec. 31, 2019 | 25,752 | 18.7 | 5,705 | 15.4 | 5,755 | 14.9 | 3,868 | 9.0 |
Notes:
% Million yen
% Million yen
Comprehensive income:
3,351 million yen (down 15.2 %) in the year ended Dec. 31, 2020; 3,952 million yen (up 19.2%) in the year ended Dec. 31, 2019
Earnings per share (basic) | Net income per share (diluted) | Return on equity | Ratio of ordinary income to total assets | Ratio of operating income to net sales | |
Year ended Dec. 31, 2020 Year ended Dec. 31, 2019 | Yen 70.32 76.67 | Yen 69.52 75.89 | % 15.3 17.4 | % 18.1 20.9 | % 19.9 22.2 |
Reference: Equity method investment income (Million yen)
(2) Consolidated Financial Position
Dec. 31, 2020: -
Dec. 31, 2019: -
Total assets | Net assets | Equity ratio | Net assets per share | |
Year ended Dec. 31, 2020 Year ended Dec. 31, 2019 | Million yen 27,951 28,419 | Million yen 23,688 23,165 | % 82.4 79.4 | Yen 465.60 453.48 |
Reference:
Shareholders' equity:
23,041 million yen in the year ended Dec. 31, 2020; 22,573 million yen in the year ended Dec. 31, 2019
(3) Consolidated Cash Flow Position
Net cash provided by (used in) operations | Net cash provided by (used in) investments | Net cash provided by (used in) financing | Cash and cash equivalents at end of fiscal year | |
Year ended Dec. 31, 2020 Year ended Dec. 31, 2019 | Million yen 3,515 4,522 | Million yen 263 (500) | Million yen (3,194) (3,411) | Million yen 12,216 11,630 |
2. Dividends
Dividend per share | Total dividends | Dividend payout ratio (consolidated) | Dividend on equity (consolidated) | |||||
1Q-end | 2Q-end | 3Q-end | Year end | Total | ||||
Year ended Dec. 31, 2019 Year ended Dec. 31, 2020 | Yen - - | Yen 17.00 20.00 | Yen - - | Yen 23.00 25.00 | Yen 40.00 45.00 | Million yen 2,003 2,232 | % 52.2 64.0 | % 9.0 9.8 |
Forecast for year ending Dec. 31, 2021 | - | 21.00 | - | 25.00 | 46.00 | 56.9 |
* FY2019 dividend per share comprised an ordinary dividend of 20.00 yen and commemorative bonus dividend of 3.00 yen. The bonus dividend was to commemorate the group's 50th anniversary.
3. Forecast for Consolidated Financial Results for FY2021 (January 1, 2021 - December 31, 2021)
(Percentages represent year-on-year change, full-year figures represent change compared with previous year;
first-half figures represent change compared with same period in previous fiscal year.)Net salesOperating incomeOrdinary incomeNet income attributable to owners of the parentEarnings per shareFirst half Full year
Million yen 13,500 28,000
% Million yen
% Million yen
% Million yen
10.3 11.9
2,800 5,700
8.4 14.4
2,800 5,750
6.0 12.9
2,000 4,000
% 14.6 14.3
Yen 40.41 80.83
Remarks
(1) Changes in material subsidiaries during the fiscal year (changes in scope of consolidation):None
(2) Changes in accounting policies; changes in estimates; re-statement of amendments
1) Changes in accounting policies caused by revision of accounting standards:
None
2) Other changes in accounting policies:
None
3) Changes in accounting estimates:
None
4) Re-statement of amendments:
None
(3) Number of issued shares (common stock)
1) Number of shares issued at end of the period (including treasury stock)
2) Number of treasury shares at end of the period
3) Average number of shares during the period
As of Dec. 31, 2020 | 52,500,000 | As of Dec. 31, 2019 | 53,000,000 |
As of Dec. 31, 2020 | 3,011,772 | As of Dec. 31, 2019 | 3,220,991 |
Fiscal year ended Dec. 31, 2020 | 49,756,975 | Fiscal year ended Dec. 31, 2019 | 50,453,812 |
Notes: This financial summary is excluded from audit by a CPA or auditing company.
Statement Regarding the Use of Forward-Looking Statements
Forecasts in these materials regarding future performance are based on reasonable judgments made in accordance with information currently available. Actual results may differ greatly from these forecasts for a number of factors. Please refer to "Results of Operations" on page 6 of the appendix for further information concerning the conditions on which these forecasts are based and further cautions with respect to the use of forward-looking statements.
Appendix Contents
1. Results of Operations ............................................................................................................................................................. 2
(1) This Fiscal Year's Results ................................................................................................................................................. 2
(2) This Fiscal Year's Financial Position ................................................................................................................................ 4
(3) This Fiscal Year's Cashflow Position ............................................................................................................................... 5
(4) Outlook ............................................................................................................................................................................. 6
(5) Basic Policy Regarding Distribution of Earnings, Dividends for the Current and Next Fiscal Years ............................... 6
2. The Funai Consulting Group .................................................................................................................................................. 7
3. Basic Approach to Selection of Financial Accounting Standards ........................................................................................... 7
4. Consolidated Financial Statements and Notes ....................................................................................................................... 8
(1) Consolidated Balance Sheet ............................................................................................................................................. 8
(2) Consolidated Statements of Income and Comprehensive Income .................................................................................... 10
(3) Consolidated Statement of Changes in Net Assets ........................................................................................................... 12
(4) Consolidated Cash Flow Statement .................................................................................................................................. 14
(5) Notes on Consolidated Financial Statements .................................................................................................................... 16
Notes on Going Concern Assumptions .............................................................................................................................. 16
Segment Information .......................................................................................................................................................... 16
Per-share Information ........................................................................................................................................................ 19
Subsequent Events ............................................................................................................................................................. 19
5. Other Information .................................................................................................................................................................. 20
(1) Orders and Sales ............................................................................................................................................................... 20
(2) Changes in Directors and Officers .................................................................................................................................... 21
1. Results of Operations
(1) This Fiscal Year's Results
The current fiscal year was severe for the Japanese economy, as the spread of COVID-19 caused corporate revenues to significantly decline, and the ratio of job openings to job applicants to decline, with its effects on social economic activities driving economies downward both in Japan and overseas. Despite expectations for the effects and improvement of various policies amid preventive measures being implemented against the infection, severe economic conditions will continue, and the situation remains unpredictable.
We at the Funai Soken Consulting Group made progress as targeted for the first quarter (January through March). Since the second quarter (April through June), however, COVID-19 has largely impacted the financial results of the SMEs who make up the bulk of Funai Soken Consulting Group's clientele, forcing the group to revise its financial forecasts downward. Amid the spread of infections, while thorough measures were taken to prevent infections inside and outside the company, we continued business activities by holding online seminars, web-based consulting, and telecommuting, and have steadily established a system toward the new normal. Financial result forecasts for FY2020 were revised taking such situations into consideration, and released on October 30, 2020. We were able to mostly attain the financial target, exceeding the profit target in particular.
The group's consolidated sales for FY2020 were 25,027 million yen (down 2.8% year-on-year), operating income was 4,982 million yen (down 12.7%), ordinary income was 5,091 million yen (down 11.5%), and net income attributable to owners of the parent was 3,498 million yen (down 9.6%). In addition, ROE stood at 15.3%, achieving the target (15% or higher).
Sales of online advertisement agency services (part of our consulting business) largely grew from the preceding year, although new orders were sluggish due to heavy restrictions on sales activities caused by the outbreak of COVID-19. Sales began to pick up as orders recovered from the third quarter (July through September), but not enough to soak up the decreases in orders and revenue in the second quarter (April through June) caused by COVID-19. Consequently, net sales decreased 2.8% from the previous year to 25,027 million yen.
Cost of sales was 17,027 million yen, compared with 16,972 million yen in the preceding year, and SG&A expenses were 3,018 million yen, compared with 3,075 million yen. This was due to an increase in staff, and an increase in online advertising costs as a result of strong sales of online advertisement agency services and increased activities to attract visitors, despite significant cost savings in travel expenses, external venue expenses and supplies expenses thanks to telecommuting. Consequently, operating income decreased 12.7% from the preceding year to 4,982 million yen.
Non-operating income was 147 million yen, compared with 134 million yen in the preceding year, due to factors such as gains on sales of investment securities acquired by investing surplus funds, while non-operating expenses were 38 million yen, compared with 84 million yen in the preceding year. Consequently, ordinary income decreased 11.5% from the previous year to 5,091 million yen.
Income taxes totaled 1,677 million yen this year, down from 1,880 million yen in the preceding year, resulting in a decrease in net income attributable to owners of the parent of 9.6% year-on-year to 3,498 million yen.
Segment-Specific Performance
Consolidated performance for each business segment is outlined below.
I. Consulting
In terms of individual solution categories, consulting sales of online ad agency services largely grew. However, monthly support services, which make up at least 60 percent of our operations, saw new orders sluggish because we were not able to secure sufficient sales activities as seminars and management workshops were suspended or moved online. In terms of the specific industries, we still managed to increase revenues in consulting for our core segment, the housing and real estate industry. Sales of consulting for production goods manufacturers and the IT industry have also grown. However, other sectors faced a severe situation. In terms of the different categories of solutions we provide, FY2020 saw significant growth in consulting services covering topics such as online marketing, digital transformation and finance, although growth in consulting services covering human resource development such as hiring and education were sluggish.
Profit ratio decreased, as significant cost savings in travel expenses (realized through restrictions on commuting and business trips) and external venue expenses were exceeded by an increase in personnel costs and a change in sales distribution ratio. In sum, business conditions were difficult in the second quarter (April through June) and begun an upward trend in the third quarter (July through September), but that uptick has not yet been enough to cover the second-quarter lag. Therefore, sales and income were down from the preceding year.
Consequently, net sales decreased 2.7% from the preceding year to 19,058 million yen, and operating income decreased 11.0% from the preceding year to 4,801 million yen.
II. Logistics
Deeper mining of existing clients and smooth continuation of transactions which we received orders from new clients in the previous year resulted in an about 20 percent increase in sales for our logistics operations compared to the preceding year. Meanwhile, although logistics consulting services posted sales as targeted in the first quarter (January through March), COVID-19 caused both workshop membership and sales to slightly decline from the second quarter (April through June) compared to the previous year. Logistics trading sales were down from the preceding year due to a downturn in the movement among businesses and individuals led to a decline in fuel sales. Profit ratio declined due to a lower proportion of high-profit logistics consulting sales among total sales, and an increase in personnel costs due to an increase in workforce numbers ensured profits were down in this period.
Consequently, net sales rose 8.0% over the preceding year to 2,638 million yen, and operating income decreased 9.6% from the preceding year to 311 million yen.
III. Direct Recruiting
The direct recruiting business posted sales as targeted in the first quarter (January through March). Sales were down, however, from the second quarter (April through June) as new order-taking activities were largely restricted due to the cancellation of seminars and a decrease in clients publishing help-wanted ads in line with decreased job postings, caused by COVID-19. The direct recruiting business ran an operating loss due to increases mainly in personnel costs and systems development costs.
Consequently, net sales decreased 9.1% over the preceding year to 2,331 million yen, and operating income ended on a net loss of 174 million yen, compared with a net operating loss of 80 million yen in the preceding year.
IV.
Other Businesses
In other businesses, sales and income of IT consulting business were temporarily down due to the cancellation or postponement of training services, affected by COVID-19 in the second quarter (April through June). Sales, however, began to pick up as we swiftly went online from the third quarter (July through September), leading to an increase in sales. Profit of systems development services declined due to increases in internal development costs and outsourcing costs, although sales slightly declined.
Consequently, sales decreased 13.7% from the preceding year to 975 million yen, and operating income ended on a net loss of 88 million yen, compared with operating income of 23 million yen in the preceding year.
(2) This Fiscal Year's Financial Position
Assets
Total assets decreased 467 million yen year-on-year to 27,951 million yen at the end of FY2020.
Current assets decreased 390 million yen year-on-year to 16,304 million yen. This was mainly due to increases in cash and deposits, and decreases in trade notes, accounts receivable, and securities.
Noncurrent assets decreased 77 million yen year-on-year to 11,647 million yen. This was mainly due to an increase in investment securities and decreases in property, plant, and equipment, and intangible assets.
Liabilities
Total liabilities decreased 990 million year-on-year to 4,263 million yen at the end of FY2020.
Current liabilities decreased 934 million yen year-on-year to 3,997 million yen. This was mainly due to a decrease in current portion of bonds and income taxes payable.
Noncurrent liabilities decreased 56 million yen year-on-year to 265 million yen. This was mainly due to a decrease in deferred tax liabilities.
Net Assets
Total net assets increased 523 million year-on-year to 23,688 million yen at the end of FY2020. This was mainly due to an increase in net income attributable to owners of the parent, and decreases in purchase of treasury shares and retained earnings as these were appropriated.
As a result, the shareholders' equity ratio increased 3% to 82.4%.
(3) This Fiscal Year's Cashflow Position
Cash and cash equivalents increased 585 million year-on-year to 12,216 million yen at the end of FY2020.
Trends in cash flow by activity are described below.
Cash Flows from Operating Activities
Cash flows from operating activities ended on a net gain of 3,515 million yen this year compared to a net gain of 4,522 million yen in the preceding year. This was mainly due to income before income taxes and other adjustments of 5,176 million yen; income taxes paid of 1,958 million yen; and income tax refunds of 454 million yen.
Cash Flows from Investing Activities
Cash flows from investing activities totaled 263 million yen this year compared to a net loss of 500 million yen in the preceding year. This was mainly due to a net proceed of 486 million yen from the purchase and sale of short-term investment securities and investment securities; and expenditure of 223 million yen on purchases of property, plant, and equipment, and intangible assets.
Cash Flows from Financing Activities
Cash flows from financing activities ended on a net loss of 3,194 million yen this year compared to a net loss of 3,411 million yen in the preceding year. This was mainly due to expenditure of 500 million yen on the redemption of debts; a net expenditure of 749 million yen on the sale and purchase of treasury stock, and 2,135 million yen distributed as dividends.
The following table presents the historical movements of certain cash flow indices.
FY12/16 | FY12/17 | FY12/18 | FY12/19 | FY12/20 | |
Shareholders' equity ratio (%) | 83.5 | 83.3 | 82.2 | 79.4 | 82.4 |
Shareholders' equity ratio based on market price (%) | 270.2 | 498.8 | 309.8 | 434.6 | 446.3 |
Interest-bearing debt to cash flow ratio (years) | 0.2 | 0.2 | 0.2 | 0.1 | 0.1 |
Interest coverage ratio (x) | 355.8 | 717.7 | 645.9 | 863.6 | 761.7 |
Notes:
1. Indices are calculated on a consolidated basis as follows: Shareholders' equity ratio: Shareholders' equity divided by total assets
Shareholders' equity ratio based on market price: Market capitalization divided by total assets Interest-bearing debt to cash flow ratio: Interest-bearing debt divided by operating cash flow Interest coverage ratio: Operating cash flow divided by interest payments
2. Market capitalization: Closing stock price at FY-end multiplied by the number of outstanding shares at period-end (after deducting treasury stock).
3. Interest-bearing debt: All interest-bearing liabilities listed under liabilities on the consolidated balance sheet.
4. Operating cash flow and interest payments are taken from cash flows from operating activities and interest paid, respectively, as listed in consolidated cash flow statements.
(4) Outlook
Under the "Mid-Range Business Plan for 2020 to 2022" for the three-year period starting in FY2020, with management consulting solutions for SMEs as its core, the group endeavored to generate more momentum for "DX" consulting services for SMEs, and management consulting solutions for mid-sized companies. However, the spread of COVID-19 caused the group to revise its Mid-Range Business Plan. Main revisions include the revision of performance targets stated below and the review of business strategies. The spread of COVID-19 has a large impact on the SMEs who make up the bulk of Funai Soken Consulting Group's clientele. Going forward, considering establishing a system for the New Normal Era at SMEs to become an essential business challenge, the group will actively work on "support toward the New Normal" for SMEs anew. Specifically, we will work on the followings by industry: to propose a non-face-to-face business model change adapting to the New Normal Era; to propose approaches to industry-specific and solution-specific trend projections and business challenges; and to propose a business model capable of improving productivity and performance even by non-face-to-face operations mainly with DX.
As explained in the "Notice of Revised Mid-Range Business Plan" released today on February 5, 2021, we have revised performance targets for FY2021 initially planned to net sales of 28,000 million yen, operating income of 5,700 million yen, ordinary income of 5,750 million yen, and net income attributable to owners of the parent of 4,000 million yen.
Mid-Range Business Plan (from the fiscal year ended Dec. 31, 2020 to the fiscal year ending Dec. 31, 2022)
(Million yen)
FY12/20 | FY12/21 | FY12/22 | ||||
Initial target | Actual results | Initial target | Revised target | Initial target | Revised target | |
Net sales | 29,000 | 25,027 | 33,000 | 28,000 | 37,000 | 31,000 |
Operating income | 6,300 | 4,982 | 7,000 | 5,700 | 7,700 | 6,300 |
(5) Basic Policy Regarding Distribution of Earnings, Dividends for the Current and Next Fiscal Years
Returning adequate earnings to shareholders is as important to us as strengthening our financial condition and management fundamentals. As such, we are determined to give back to shareholders through distribution of earnings and by buying treasury stock to an appropriate level in light of business performance. Our basic policy is to distribute surpluses in accordance with business performance, and as such, we will, with due consideration of factors such as market climate and capital efficiency, endeavor to maintain a return-to-shareholders ratio of at least 60% by using tools such as dynamic buy-backs of treasury shares.
Retained earnings will be used to enhance capital through a balance of investments for the long-term growth of corporate value, and in strengthening the company's financial condition to facilitate flexible capital policies.
Based on these policies, we plan to distribute a year-end dividend for FY2020 of 25 yen per share, making a total annual dividend of 45 yen per share.
In FY2021, we plan to pay an interim dividend of 21 yen per share and a year-end dividend of 25 yen per share, making a total annual dividend of 46 yen per share.
Dividends per Share
Interim | Year end | Annual total | |
FY2020 | 20 yen | 25 yen | 45 yen |
FY2021 (forecast) | 21 yen | 25 yen | 46 yen |
2. The Funai Consulting Group
The group is comprised of Funai Soken Holdings and eight subsidiaries. Our core business is management consulting, and we also offer logistics, direct recruiting, and other services relating to those operations.
The roles of the various Group companies in each segment are outlined below.
Consulting
The group is fully equipped to offer a comprehensive range of consulting services, and we focus mainly on management consulting. In addition to core management consulting solutions, we also provide industry-specific and solution-specific workshops and seminars.
Group companies involved in this segment: Funai Consulting, Inc., Funai Soken Corporate Relations, Inc.,
Funai Consulting Shanghai, Inc.
Logistics
Our logistics services cover three main areas: consulting, designed to help clients reduce their logistics costs; operations, in which we design, build, and operate clients' logistics frameworks; and trading, which helps clients reduce their purchasing costs through initiatives like joint purchasing.
Group companies involved in this segment: Funai Soken Logistics, Inc.
Direct Recruiting
In this segment, we use IT to help clients solve the increasingly widespread problem of labor shortages, principally through recruiting advertising agency operations.
Group companies involved in this segment: HR Force, Inc.
Other Businesses
Elsewhere, Funai Soken IT Solutions offers IT consulting services, Proseed offers contact center consulting services, and Shinwa Computer Service offers system development services.
Group companies involved in this segment: Funai Soken IT Solutions, Inc., Proseed Corporation,
Shinwa Computer Service Co., Ltd.
3. Basic Approach to Selection of Financial Accounting Standards
The Funai Soken Consulting Group's consolidated financial statements are prepared in accordance with Japanese financial reporting standards to provide for easier comparison of performance from year to year and company to company.
Regarding whether or not to apply international financial reporting standards, we will continue to monitor the situation and act in accordance with Japanese trends regarding such accounting standards.
4. Consolidated Financial Statements and Notes (1) Consolidated Balance Sheet
(Thousand yen)FY12/19
(As of Dec. 31, 2019)FY12/20
(As of Dec. 31, 2020)
Assets | ||
Current assets | ||
Cash and deposits | 11,630,554 | 12,216,419 |
Trade notes and accounts receivable | 2,870,051 | 2,741,126 |
Short-term investment securities | 1,001,132 | 304,771 |
Work in process | 155,685 | 130,721 |
Raw materials and supplies | 5,759 | 9,908 |
Other current assets | 1,071,147 | 951,571 |
Allowance for doubtful accounts | (39,543) | (49,817) |
Total current assets | 16,694,787 | 16,304,701 |
Noncurrent assets | ||
Property, plant, and equipment | ||
Buildings and structures, net | 1,311,009 | 1,234,799 |
Land | 4,602,643 | 4,602,643 |
Other property, plant, and equipment, net | 196,280 | 149,994 |
Total property, plant, and equipment | 6,109,933 | 5,987,438 |
Intangible assets | ||
Leasehold rights | 322,400 | 322,400 |
Software | 274,379 | 256,251 |
Other intangible assets | 177,210 | 96,735 |
Total intangible assets | 773,990 | 675,386 |
Investments and other assets | ||
Investment securities | 3,907,279 | 4,053,809 |
Assets related to retirement benefits | 473,196 | 463,062 |
Other investments and other assets | 468,046 | 475,851 |
Allowance for doubtful accounts | (8,006) | (8,258) |
Total investments and other assets | 4,840,516 | 4,984,465 |
Total noncurrent assets | 11,724,440 | 11,647,290 |
Total assets | 28,419,227 | 27,951,991 |
(Thousand yen)FY12/19
(As of Dec. 31, 2019)FY12/20
(As of Dec. 31, 2020)
Liabilities | ||
Current liabilities | ||
Trade notes and accounts payable | 347,821 | 406,535 |
Short-term loans payable | - | 200,000 |
Current portion of bonds | 500,000 | - |
Income taxes payable | 1,159,020 | 841,931 |
Other current liabilities | 2,925,055 | 2,549,217 |
Total current liabilities | 4,931,897 | 3,997,683 |
Noncurrent liabilities | ||
Long-term loans payable | 100,000 | 100,000 |
Retirement benefit liabilities | 60,876 | 68,088 |
Deferred tax liabilities | 109,949 | 56,128 |
Other noncurrent liabilities | 51,377 | 41,673 |
Total noncurrent liabilities | 322,203 | 265,891 |
Total liabilities | 5,254,101 | 4,263,574 |
Net assets | ||
Shareholders' equity | ||
Capital stock | 3,125,231 | 3,125,231 |
Capital surplus | 2,947,675 | 2,946,634 |
Retained earnings | 19,731,165 | 20,565,065 |
Treasury stock | (3,342,957) | (3,560,378) |
Total shareholders' equity | 22,461,115 | 23,076,553 |
Accumulated other comprehensive income | ||
Valuation difference on available-for-sale securities | 211,575 | 75,241 |
Foreign currency translation adjustments | 16,146 | 17,074 |
Accumulated adjustments for retirement benefits | (114,954) | (127,122) |
Total accumulated other comprehensive income | 112,766 | (34,806) |
Subscription rights for shares | 591,243 | 646,669 |
Total net assets | 23,165,126 | 23,688,416 |
Total liabilities and net assets | 28,419,227 | 27,951,991 |
(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
Net sales | 25,752,886 | 25,027,840 |
Cost of sales | 16,972,135 | 17,027,136 |
Gross profit | 8,780,751 | 8,000,704 |
SG&A expenses | 3,075,273 | 3,018,249 |
Operating income | 5,705,477 | 4,982,455 |
Non-operating income | ||
Interest income | 17,105 | 18,577 |
Dividend income | 9,135 | 8,816 |
Gain on sales of investment securities | 23,468 | 55,245 |
Gain on valuation of investment securities | 1,865 | 3,122 |
Insurance bonus income | 30,434 | 33,455 |
Refunded consumption taxes | 37,674 | - |
Other non-operating income | 14,609 | 28,002 |
Total non-operating income | 134,292 | 147,219 |
Non-operating expenses | ||
Interest expenses | 5,231 | 4,740 |
Loss on valuation of investment securities | 2,516 | 7,438 |
Investment partnership management expenses | 3,847 | 3,272 |
Commission for purchase of treasury shares | 23,358 | - |
Foreign exchange losses | 927 | 8,047 |
Contributions | 42,000 | 12,000 |
Other non-operating expenses | 6,860 | 2,586 |
Total non-operating expenses | 84,742 | 38,084 |
Ordinary income | 5,755,027 | 5,091,590 |
Extraordinary income | ||
Gain on sales of noncurrent assets | 624 | 176 |
Gain on sales of investment securities | 665 | 159,912 |
Total extraordinary income | 1,289 | 160,089 |
Extraordinary losses | ||
Impairment loss | - | 70,000 |
Loss on retirement of noncurrent assets | 582 | 5,135 |
Loss on sales of investment securities | 6,807 | - |
Total extraordinary losses | 7,390 | 75,135 |
Net income before income taxes and other adjustments | 5,748,927 | 5,176,543 |
Current income taxes | 1,927,567 | 1,640,018 |
Deferred income taxes | (47,121) | 37,850 |
Total income taxes | 1,880,446 | 1,677,868 |
Net income | 3,868,481 | 3,498,675 |
Net income attributable to owners of the parent | 3,868,481 | 3,498,675 |
(Thousand yen) | |
FY12/19 | FY12/20 |
(Jan. 1 - Dec. 31, 2019) | (Jan. 1 - Dec. 31, 2020) |
- 10 - |
Consolidated Statement of Comprehensive Income
Net income | 3,868,481 | 3,498,675 |
Other comprehensive income | ||
Valuation difference on available-for-sale securities | 89,788 | (136,333) |
Foreign currency translation adjustments | (138) | 928 |
Adjustments for retirement benefits | (5,729) | (12,167) |
Total other comprehensive income | 83,920 | (147,573) |
Comprehensive income: | 3,952,401 | 3,351,101 |
Details | ||
Comprehensive income attributable to owners of the parent | 3,952,401 | 3,351,101 |
(Thousand yen) | |
FY12/19 | FY12/20 |
(Jan. 1 - Dec. 31, 2019) | (Jan. 1 - Dec. 31, 2020) |
- 11 - |
(3) Consolidated Statement of Changes in Net Assets
FY12/19 (Jan. 1 - Dec. 31, 2019)
(Thousand yen)
Shareholders' equity | |||||
Capital stock | Capital surplus | Retained earnings | Treasury stock | Total shareholders' equity | |
Balance at start of fiscal year | 3,125,231 | 2,946,634 | 17,729,542 | (1,861,703) | 21,939,705 |
Change | |||||
Dividends from surplus | (1,866,857) | (1,866,857) | |||
Net income attributable to owners of the parent | 3,868,481 | 3,868,481 | |||
Purchase of treasury stock | (1,512,084) | (1,512,084) | |||
Disposal of treasury stock | 1,040 | 30,830 | 31,870 | ||
Retirement of treasury stock | - | ||||
Net changes of items other than shareholders' equity | |||||
Total changes of items during the fiscal year | - | 1,040 | 2,001,623 | (1,481,253) | 521,410 |
Balance at end of current fiscal year | 3,125,231 | 2,947,675 | 19,731,165 | (3,342,957) | 22,461,115 |
Accumulated other comprehensive income | Subscription rights for shares | Total net assets | ||||
Valuation difference on available-for-sale securities | Foreign currency translation adjustments | Accumulated adjustments for retirement benefits | Total accumulated other comprehensive income | |||
Balance at start of fiscal year | 121,786 | 16,284 | (109,225) | 28,845 | 402,278 | 22,370,829 |
Change | ||||||
Dividends from surplus | (1,866,857) | |||||
Net income attributable to owners of the parent | 3,868,481 | |||||
Purchase of treasury stock | (1,512,084) | |||||
Disposal of treasury stock | 31,870 | |||||
Retirement of treasury stock | - | |||||
Net changes of items other than shareholders' equity | 89,788 | (138) | (5,729) | 83,920 | 188,965 | 272,886 |
Total changes of items during the fiscal year | 89,788 | (138) | (5,729) | 83,920 | 188,965 | 794,296 |
Balance at end of current fiscal year | 211,575 | 16,146 | (114,954) | 112,766 | 591,243 | 23,165,126 |
FY12/20 (Jan. 1 - Dec. 31, 2020)
(Thousand yen)
Shareholders' equity | |||||
Capital stock | Capital surplus | Retained earnings | Treasury stock | Total shareholders' equity | |
Balance at start of fiscal year | 3,125,231 | 2,947,675 | 19,731,165 | (3,342,957) | 22,461,115 |
Change | |||||
Dividends from surplus | (2,140,514) | (2,140,514) | |||
Net income attributable to owners of the parent | 3,498,675 | 3,498,675 | |||
Purchase of treasury stock | (749,582) | (749,582) | |||
Disposal of treasury stock | (1,040) | 4,793 | 3,105 | 6,859 | |
Retirement of treasury stock | (529,055) | 529,055 | - | ||
Net changes of items other than shareholders' equity | |||||
Total changes of items during the fiscal year | - | (1,040) | 833,899 | (217,421) | 615,437 |
Balance at end of current fiscal year | 3,125,231 | 2,946,634 | 20,565,065 | (3,560,378) | 23,076,553 |
Accumulated other comprehensive income | Subscription rights for shares | Total net assets | ||||
Valuation difference on available-for-sale securities | Foreign currency translation adjustments | Accumulated adjustments for retirement benefits | Total accumulated other comprehensive income | |||
Balance at start of fiscal year | 211,575 | 16,146 | (114,954) | 112,766 | 591,243 | 23,165,126 |
Change | ||||||
Dividends from surplus | (2,140,514) | |||||
Net income attributable to owners of the parent | 3,498,675 | |||||
Purchase of treasury stock | (749,582) | |||||
Disposal of treasury stock | 6,859 | |||||
Retirement of treasury stock | - | |||||
Net changes of items other than shareholders' equity | (136,333) | 928 | (12,167) | (147,573) | 55,425 | (92,147) |
Total changes of items during the fiscal year | (136,333) | 928 | (12,167) | (147,573) | 55,425 | 523,290 |
Balance at end of current fiscal year | 75,241 | 17,074 | (127,122) | (34,806) | 646,669 | 23,688,416 |
(4) Consolidated Cash Flow Statement
(Thousand yen)FY12/19
(Jan. 1 - Dec. 31, 2019)FY12/20
(Jan. 1 - Dec. 31, 2020)
Net cash provided by (used in) operations | ||
Net income before income taxes and other adjustments | 5,748,927 | 5,176,543 |
Depreciation | 278,992 | 280,839 |
Impairment loss | - | 70,000 |
Amortization of goodwill | 66,835 | 34,290 |
Share-based compensation expenses | 220,581 | 62,026 |
Increase (decrease) in allowance for doubtful accounts | 3,696 | 10,526 |
Decrease (increase) in assets related to retirement benefits | 1,204 | (2,033) |
Increase (decrease) in liabilities related to retirement benefits | 6,216 | 7,212 |
Loss (gain) on valuation of investment securities | 650 | 4,315 |
Loss (gain) on sales of investment securities | (17,326) | (215,158) |
Interest and dividends received | (26,240) | (27,393) |
Interest expenses | 5,231 | 4,740 |
Commission for purchase of treasury shares | 23,358 | - |
Loss (gain) on exchange | 63 | 511 |
Contributions | 42,000 | 12,000 |
Loss (gain) on sales of property, plant, and equipment | (624) | (176) |
Loss on retirement of property, plant, and equipment | 582 | 2,427 |
Loss on retirement of intangible assets | - | 2,708 |
Decrease (increase) in trade notes and accounts receivable | (476,417) | 128,977 |
Decrease (increase) in other assets | (634,473) | (270,965) |
Increase (decrease) in other liabilities | 728,424 | (296,173) |
Other cash provided by (used in) operations | 9,311 | 10,072 |
Subtotal | 5,980,997 | 4,995,293 |
Interest and dividends received | 47,015 | 41,475 |
Interest paid | (5,236) | (4,615) |
Income taxes paid | (1,801,859) | (1,958,765 |
Income taxes refunds | 343,175 | 454,299 |
Contributions paid | (42,000) | (12,000) |
Net cash provided by (used in) operations | 4,522,092 | 3,515,687 |
(Thousand yen)FY12/19
(Jan. 1 - Dec. 31, 2019)FY12/20
(Jan. 1 - Dec. 31, 2020)
Net cash provided by (used in) investments | ||
Purchase of short-term investment securities | (100,067) | - |
Proceeds from sale and redemption of short-term investment securities | 400,000 | 1,000,000 |
Purchase of investment securities | (416,596) | (705,550) |
Proceeds from sale and redemption of investment securities | 20,596 | 192,231 |
Purchase of property, plant, and equipment | (249,063) | (48,277) |
Purchase of Intangible assets | (164,891) | (175,138) |
Proceeds from cancellation of insurance funds | 8,938 | - |
Other cash provided by (used in) investments | 644 | 176 |
Net cash provided by (used in) investments | (500,438) | 263,441 |
Net cash provided by (used in) financing | ||
Proceeds from short-term loans payable | - | 200,000 |
Redemption of bonds | - | (500,000) |
Repayment of lease obligations | (13,691) | (9,653) |
Purchase of treasury shares | (1,535,442) | (749,988) |
Proceeds from sale of treasury shares | 254 | 258 |
Dividends paid | (1,862,890) | (2,135,581) |
Net cash provided by (used in) financing | (3,411,770) | (3,194,965) |
Effect of exchange rate changes on cash and cash equivalents | (1,914) | 1,702 |
Net increase (decrease) in cash and cash equivalents | 607,969 | 585,864 |
Cash and cash equivalents at start of fiscal year | 11,022,585 | 11,630,554 |
Cash and cash equivalents at end of fiscal year | 11,630,554 | 12,216,419 |
(5) Notes on Consolidated Financial Statements
Notes on Going Concern Assumptions
None to report.
Segment Information
1. Overview of Segments Included in Reports
The segments for which reports are compiled are those components of the group for which financial information can be obtained separate from other component units. Segments are reviewed periodically by the board of directors in order to make more informed decisions on how management resources can best be allocated, and in order to evaluate performance.
We employ three main segments in for these reports. They are, in keeping with the categories of work performed by the companies within the group: consulting, logistics, and direct recruiting. Their activities can be defined as follows.
Consulting: Consulting services such as guidance, research, and diagnosis pertaining to company management; members-only workshops and seminars.
Logistics:
Logistics services cover two main areas: consulting, designed to help clients reduce their logistics costs; and operations, in which we design, build, and operate clients' logistics frameworks.
Direct recruiting: Using IT to help clients solve the increasingly widespread problem of labor shortages, principally through recruiting advertising agency operations.
2. Calculation of Net Sales, Income/Losses, Assets, and Other Accounts for Each Segment
Accounting methods for the reported segments are largely the same as those used in the consolidated financial statements.
Segment-specific income or losses are calculated based on operating income figures. Inter-segment sales and transfers are calculated based on current market prices.
3. Other Information About Net Sales, Income/Losses, Assets, and Other Accounts for Each Segment
FY12/19 (Jan. 1 - Dec. 31, 2019)
(Thousand yen)
Consulting | Logistics | Direct recruiting | Others(1) | Total | Adjustment(2) | Amount listed in consolidated financial statements(3) | |
Net sales Sales to external customers Inter-segment sales and transfers | 19,592,131 192,588 | 2,441,697 462,275 | 2,564,549 14,139 | 1,130,844 20,195 | 25,729,223 689,198 | 23,662 (689,198) | 25,752,886 - |
Total | 19,784,720 | 2,903,972 | 2,578,688 | 1,151,040 | 26,418,422 | (665,535) | 25,752,886 |
Segment income | 5,395,607 | 344,581 | (80,755) | 23,280 | 5,682,713 | 22,764 | 5,705,477 |
Segment assets | 15,625,450 | 1,047,627 | 682,489 | 716,435 | 18,072,002 | 10,347,225 | 28,419,227 |
Others Depreciation Amortization of goodwill | 58,195 - | 2,977 - | 18,011 - | 3,614 66,835 | 82,798 66,835 | 196,194 - | 278,992 66,835 |
Change in property, plant, equipment, and intangible assets | 94,922 | 2,964 | 99,376 | 3,036 | 200,301 | 227,647 | 427,948 |
Notes:
1. The "others" category includes income from IT consulting, contact center consulting, and systems development.
2. Details of adjustments are as follows.
(1) Adjustments of segment income or losses include elimination of inter-segment transactions and whole-group revenues and expenses that are not attributable to any segment. Whole-group revenues are comprised of outsourcing and consulting fees from group companies, property rental income and whole-group expenses are comprised of those incurred in group operations.
(2) Adjustments of segment assets include elimination of inter-segment transactions and assets held throughout the group that are not attributable to any segment. Whole-group assets are comprised of assets relating to the operation of the group.
(3) Adjustments of depreciation include elimination of inter-segment transactions and depreciation of assets held throughout the group that are not attributable to any segment.
(4) Change in property, plant, equipment, and intangible assets includes elimination of inter-segment transactions and assets held throughout the group that are not attributable to any segment.
3. Segment income or losses are adjusted against operating income in the consolidated financial statements.
FY12/20 (Jan. 1 - Dec. 31, 2020)
(Thousand yen)
Consulting | Logistics | Direct recruiting | Others(1) | Total | Adjustment(2) | Amount listed in consolidated financial statements(3) | |
Net sales Sales to external customers Inter-segment sales and transfers | 19,058,420 123,014 | 2,638,029 236,656 | 2,331,930 4,450 | 975,837 8,246 | 25,004,218 372,366 | 23,622 (372,366) | 25,027,840 - |
Total | 19,181,435 | 2,874,685 | 2,336,380 | 984,083 | 25,376,584 | (348,744) | 25,027,840 |
Segment income | 4,801,998 | 311,619 | (174,176) | (88,501) | 4,850,940 | 131,514 | 4,982,455 |
Segment assets | 15,699,274 | 1,242,944 | 397,821 | 657,711 | 17,997,751 | 9,954,239 | 27,951,991 |
Others Depreciation Amortization of goodwill Impairment loss | 61,660 - - | 3,288 - - | 33,340 - 70,000 | 1,974 34,290 - | 100,263 34,290 70,000 | 180,575 - - | 280,839 34,290 70,000 |
Change in property, plant, equipment, and intangible assets | 56,278 | 1,600 | 83,114 | 864 | 141,857 | 39,814 | 181,671 |
Notes:
1. The "others" category includes income from IT consulting, contact center consulting, and systems development.
2. Details of adjustments are as follows.
(1) Adjustments of segment income or losses include elimination of inter-segment transactions and whole-group revenues and expenses that are not attributable to any segment. Whole-group revenues are comprised of outsourcing and consulting fees from group companies, property rental income and whole-group expenses are comprised of those incurred in group operations.
(2) Adjustments of segment assets include elimination of inter-segment transactions and assets held throughout the group that are not attributable to any segment. Whole-group assets are comprised of assets relating to the operation of the group.
(3) Adjustments of depreciation include elimination of inter-segment transactions and depreciation of assets held throughout the group that are not attributable to any segment.
(4) Change in property, plant, equipment, and intangible assets includes elimination of inter-segment transactions and assets held throughout the group that are not attributable to any segment.
3. Segment income or losses are adjusted against operating income in the consolidated financial statements.
Per-share Information
FY12/19 (Jan. 1 - Dec. 31, 2019) | FY12/20 (Jan. 1 - Dec. 31, 2020) | |
Net assets per share | 453.48 | 465.60 |
Earnings per share (basic) | 76.67 | 70.32 |
Earnings per share (diluted) | 75.89 | 69.52 |
Notes:
1. The basis for calculation of basic and diluted net income per share is as follows.
FY12/19 (Jan. 1 - Dec. 31, 2019) | FY12/20 (Jan. 1 - Dec. 31, 2020) | |
Earnings per share (basic) | ||
Net income attributable to owners of the parent | 3,868,481 yen | 3,498,675 yen |
Amount not attributable to common shareholders | - | - |
Net income attributable to common-stock owners of the parent | 3,868,481 yen | 3,498,675 yen |
Average number of common shares outstanding during the fiscal year | 50,453,812 | 49,756,975 |
Earnings per share (diluted) | ||
Adjusted net income attributable to owners of the parent | - | - |
Increase in common shares | 523,683 | 567,074 |
(Portion of increase made up of subscription rights) | (523,683) | (567,074) |
Summary of non-dilutive stock equivalents not used in calculation of earnings per share (diluted) | - |
2. Basis for calculation of net assets per share is as follows.
FY12/19 (As of Dec. 31, 2019) | FY12/20 (As of Dec. 31, 2020) | |
Total net assets on consolidated balance sheets | 23,165,126 yen | 23,688,416 yen |
Deductions from total net assets | 591,243 yen | 646,669 yen |
(Portion of deductions made up of subscription rights) | (591,243 yen) | (646,669 yen) |
Net assets attributable to common shareholders | 22,573,882 yen | 23,041,747 yen |
Number of common shares used in calculation of net assets per share at end of year | 49,779,009 | 49,488,228 |
Subsequent Events
None to report.
5. Other Information (1) Orders and Sales
I. Orders
Orders won by each operating segment in this consolidated fiscal year are as follows.
(Thousand yen)
Segment | FY12/19 (Jan. 1 - Dec. 31, 2019) | FY12/20 (Jan. 1 - Dec. 31, 2020) | ||
Orders received | Orders outstanding | Orders received | Orders outstanding | |
Consulting | 14,185,944 | 6,585,001 | 12,669,210 | 6,320,999 |
Logistics | 709,179 | 325,530 | 400,524 | 185,498 |
Other businesses | 605,552 | 148,315 | 318,818 | 77,945 |
Notes:
1. Consulting orders above include only consulting revenues; membership fees and seminar fees are excluded as they are recurring revenues.
2. Logistics revenues include only that earned from logistics consulting activities.
3. Direct recruiting entails no consulting revenues and is therefore not included in the above table.
4. Other income includes only that earned from IT and contact center consulting.
5. The above amounts are based on sale prices.
6. The above amounts do not include consumption tax.
II. Sales
Sales made by each operating segment in the current fiscal year are as follows.
(Thousand yen)
Segment | FY12/19 (Jan. 1 - Dec. 31, 2019) | FY12/20 (Jan. 1 - Dec. 31, 2020) | ||
Amount | % of total | Amount | % of total | |
Consulting | 19,592,131 | 76.1% | 19,058,420 | 76.2% |
Logistics | 2,441,697 | 9.5% | 2,638,029 | 10.6% |
Direct recruiting | 2,564,549 | 10.0% | 2,331,930 | 9.3% |
Others | 1,130,844 | 4.4% | 975,837 | 3.9% |
Total | 25,729,223 | 100.0% | 25,004,218 | 100.0% |
Notes:
1. Sales amounts indicate sales to external customers.
2. The above amounts do not include consumption tax.
3. No single customer accounted for 10% or more of aggregate net sales.
(2) Changes in Directors and Officers
(Scheduled to take effect on March 27, 2021)
1) Legal representatives
Name | New title | Previous title |
Sakae Takashima | Chairman and Group CEO | President and Group CEO |
Takayuki Nakatani | President and CEO, and head of Business Management Divisional Headquarters | Director and executive vice president, and head of Business Management Divisional Headquarters |
2) Other directors and officers
None to report.
3) Executive officers
Scheduled appointments
Name | New title | Previous title |
Satoshi Oka | Executive officer and head of Business Development Office | Executive officer, Second deputy head of Consulting Operations Divisional Headquarters, Funai Consulting Inc. |
List of Directors, Auditors, and Executive Officers
Funai Soken Holdings, Inc. (scheduled to take effect on March 27, 2021)
Name | Title | Position |
Sakae Takashima | Chairman | Group CEO |
Takayuki Nakatani | President & CEO | Head of Business Management Divisional Headquarters |
Tatsuro Ono | Director and executive vice president | Head of HR Divisional Headquarters |
Takahisa Okumura | Director and senior vice president | Head of Management Administration Divisional Headquarters |
Nobuyuki Isagawa | Independent director | |
Miki Mitsunari | Independent director | |
Masahiro Hyakumura | Director and standing member of the Audit and Supervisory Committee | |
Atsushi Nakao | Independent director and member of the Audit and Supervisory Committee | |
Akihiro Kobayashi | Independent director and member of the Audit and Supervisory Committee | |
Akira Hamaguchi | Executive officer | Head of General Affairs Department |
Masaru Sumitomo | Executive officer | Head of Human Resources Development Department |
Tomoaki Mizoue | Executive officer | Head of Information Systems Department |
Eijiro Saito | Executive officer | Head of Corporate Administration Office |
Motoki Haruta | Executive officer | Head of Finance Department |
Satoshi Oka | Executive officer | Head of Business Development Office |
Funai Consulting, Inc. (scheduled to take effect on March 26, 2021)
Name | Title | Position |
Daisuke Shingai | President & CEO | |
Kyohei Deguchi | Director and executive vice president | Head of Consulting Operations Divisional Headquarters & head of Improved Corporate Value Consulting Divisional Headquarters |
Yoshihito Sugahara | Director and senior vice president | Head of Administration Divisional Headquarters |
Tomoyuki Murata | Independent director | |
Masahiro Hyakumura | Auditor | |
Isao Kikuchi | Executive officer | Head of DX Consulting Divisional Headquarters |
Akira Hamaguchi | Executive officer | Head of Administration Department |
Noboru Sugiura | Executive officer | Deputy head of Consulting Operations Divisional Headquarters & head of Consulting Divisional Headquarters I |
Katsuya Kohira | Executive officer | Deputy head of Improved Corporate Value Consulting Divisional Headquarters |
Akiyo Koike | Executive officer | Head of Talent Development Center |
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Funai Soken Holdings Co. Ltd. published this content on 11 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 March 2021 06:33:05 UTC.