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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Information Services International-Dentsu, Ltd.    4812   JP3551530003

INFORMATION SERVICES INTERNATIONAL-DENTSU, LTD.

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Information Services International Dentsu : Presentation Material of Financial Results for the Second Quarter of FY2020 (ending December 31, 2020)

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07/30/2020 | 03:05am EDT

PRESENTATION MATERIAL OF FINANCIAL RESULTS

FOR THE SECOND QUARTER OF FY2020 (FROM JANUARY 1, 2020 TO JUNE 30, 2020)

July 30, 2020

Information Services International-Dentsu, Ltd.

Note: This English translation is solely for reference purposes and not a legally definitive translation of the original Japanese text.

In the event a difference arises regarding the meaning herein, the original Japanese version will prevail as the official authoritative version.

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

Financial results

for the second quarter of FY2020

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

1

1. Consolidated Results for the 2Q of FY2020

Year on year

Vs. initial forecast

Interim dividends

Net sales and all profits items achieved record highs for the second consecutive fiscal year for the first half.

Mainly sales in Business Solutions segment and Communication IT segment exceeded than forecasts. (Revisions to forecasts were announced on July 16, 2020.)

Implemented ¥43 per share in line with initial forecast (year on year ¥8 increase)Unit : Million yen

YoY

Vs. initial forecast

2Q of FY2020

(announced on February 10, 2020)

(cumulative)

2Q of FY2019

Variance

% change

Forecast

Variance

% change

(cumulative)

Net sales

55,020

49,185

+5,835

+11.9

52,300

+2,720

+5.2

Gross profit

19,163

16,232

+2,931

+18.1

17,749

+1,414

+8.0

Profit margin

34.8%

33.0%

+1.8p

-

33.9%

+0.9p

-

Selling, general and

12,192

11,027

+1,165

+10.6

12,449

-257

-2.1

administrative expenses

Operating income

6,971

5,204

+1,767

+33.9

5,300

+1,671

+31.5

Operating margin

12.7%

10.6%

+2.1p

-

10.1%

+2.6p

-

Ordinary income

6,862

5,152

+1,710

+33.2

5,164

+1,698

+32.9

Profit attributable to

4,512

3,412

+1,100

+32.2

3,450

+1,062

+30.8

owners of parent

Average number of

2,959

2,849

+110

+3.9

3,002

-43

-1.4

employees during the period

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

2

2-1. Factors for Increase/Decrease in Operating Income (YoY)

(Unit : 100 million yen)

Impact of increase in gross

Increase in SG&A

profit margin

+10.1

expenses -11.6

Effect of Increase

in sales

Operating

Elimination of unprofitable

YoY

+19.2

income

+17.7

projects

aprx.6.0

Increase in gross profit

69.7

margin mainly from software

Operating

products

aprx.4.0

income

52.0

Increases mainly in R&D and

personnel expenses

2Q of FY2019

2Q of FY2020

(cumulative)

(cumulative)

result

result

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

3

2-2. Factors for Increase/Decrease in Operating Income (vs. initial forecast)

(Unit : 100 million yen)

Decrease in SG&A

expenses

+2.5

Vs. initial

Impact of increase in gross

forecast

profit margin

+5.0

Effect of

Increase

+16.7

in sales

+9.2

Increase in gross profit margin

Operating

mainly from software products

aprx.3.0

income

Reversal of provision for loss

53.0

on orders received

aprx.2.0

Decrease mainly in outsourcing

and travel expenses

2Q of FY2020

(cumulative)

initial forecast

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

Operating

income

69.7

2Q of FY2020

(cumulative)

result

4

3. Net Sales and Operating Income by Reportable Segment

Unit : Million yen

Reportable segment

2Q of

YoY

Vs. initial forecast

FY2020

Variance

% change

Overview

Variance

% change

(cumulative)

Net sale

12,224

-16

-0.1

Net sales were at the same level as in 1H of

-33

-0.3

Operating

-

-

Financial

866

+159

+22.5

FY19 due to a steady increase for

income

Solutions

government-affiliated financial institutions

%

7.1

+1.3p

-

and business companies. Profits increased

due to the elimination of unprofitable projects.

-

-

employees

719

+27

+3.9

Net sale

10,885

+1,313

+13.7

Net sales increased due to an expansion of

+1,001

+10.1

Operating

licensing sales and installation of SAP

-

-

Business

1,720

+501

+41.1

solutions in addition to software developed in-

income

Solutions

house such as POSITIVE, Ci*X and STRAVIS.

%

15.8

+3.1p

-

Despite an increase in R&D investment, profits

564

+29

+5.4

increased due to the effects of higher sales

-

-

employees

and improved profitability.

Net sale

15,531

+391

+2.6

Despite delays in consulting services due to

-326

-2.1

Operating

the impact of the COVID-19, net sales

-

-

Manufacturing

1,257

-94

-7.0

increased due to a steady increase of

income

Solutions

licensing sales and installation of PLM and

%

8.1

-0.8p

-

CAE, particularly for the automotive industry.

647

+18

+2.9

Profits decreased mainly due to a decrease in

-

-

employees

sales of highly profitable consulting services.

Net sale

16,378

+4,147

+33.9

In addition to steady growth in large-scale

+2,078

+14.5

Communication

Operating

3,126

+1,200

+62.3

system upgrade project in Dentsu Group's

-

-

income

core system field, the expansion of

IT

%

19.1

+3.4p

-

businesses supporting digital transformation

through collaboration with Dentsu Group

employees

453

+31

+7.2

resulted in higher net sales and profits.

-

-

* POSITIVE : human capital management

solution STRAVIS

: consolidated accounting solution

Ci*X : financial solution system PLM: product lifecycle management

CAE : computer aided engineering

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

* Employees : average umber of employees during the period

5

4. Consolidated Net Sales by Service Category

Unit : Million yen

YoY

Vs. initial forecast

Service category

2Q of

FY2020

Variance

% change

Overview

Variance

% change

(cumulative)

Consulting Services

3,019

-578

-16.1

Decrease in Manufacturing Solutions and

-327

-9.8

Communication IT segments

Custom System

14,995

+1,083

+7.8

Expansion of Communication IT and

+143

+1.0

Development

Business Solutions segments

In-house Software

10,124

+1,741

+20.8

Expansion of POSITIVE, Ci*X, STRAVIS and

+1,043

+11.5

iPLAss

Third-party Software

16,699

+1,986

+13.5

Expansion of Salesforce Solutions, PLM,

+1,077

+6.9

CAE and SAP solution

Outsourcing, Operation

6,090

+1,477

+32.0

Expansion of Communication IT segment

+1,302

+27.2

and Maintenance Services

IT Equipment Sales

4,090

+125

+3.2

Almost same level as in 1H of FY19

-517

-11.2

and Others

* iPLAss : marketing platform

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

6

5. Consolidated Net Sales by Industry

Unit : Million yen

Industry

2Q of FY2020 (cumulative)

YoY

Net Sales

Composition Ratio (%)

Variance

% change

Banks

9,813

17.8

+257

+2.7

Other financial

2,128

3.9

-761

-26.3

institutions

Financial

11,942

21.7

-504

-4.1

Transportation

8,368

15.2

+903

+12.1

equipment

Electric appliances

4,607

8.4

-69

-1.5

Precision instruments

Machinery

3,389

6.2

-69

-2.0

Others products

4,078

7.4

+114

+2.9

Manufacturing

20,443

37.2

+879

+4.5

Services and public offices

18,555

33.7

+4,863

+35.5

Distributions and others

4,082

7.4

+597

+17.1

Sales to the Dentsu Group

Dentsu Group Inc. and

14,464

26.3

+4,057

+39.0

it's subsidiaries

* As reviewed some of our customers' industries, we used reclassified figures for comparison in the same period of the previous fiscal year.

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

7

6. Orders received and Order backlog

  • Large orders for IT equipment in Communication IT

Unit : Million yen

Orders received

Order backlog

2Q of FY2020

YoY (%)

2Q of FY2020

YoY (%)

(cumulative)

(cumulative)

Total

63,894

+13.7

41,376

+7.6

Financial Solutions

12,130

+1.4

8,444

-25.2

Reportable

Business Solutions

10,921

-3.2

7,403

+1.4

Segments

Manufacturing Solutions

17,553

-2.1

12,748

-2.0

Communication IT

23,289

+54.8

12,780

+86.3

Consulting Services

2,882

-17.5

708

-11.3

Custom System

14,965

+4.9

8,448

-17.4

Development

Service

In-house Software

10,449

+6.2

7,020

+15.9

Categories

Third-party Software

21,055

+16.4

15,839

+9.4

Outsourcing, Operation

7,967

+18.0

3,384

-6.6

and Maintenance Services

IT Equipment Sales

6,573

+74.1

5,974

+82.6

and Others

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

8

7. Consolidated Balance Sheets

Unit : Million yen

As of

As of

Variance

Main Factors for Increase/Decrease

June 30,

December 31,

2020

2019

Total current Assets

78,078

69,728

+8,350

Increase in advance payments - trade (+4,902)

Increase in notes and accounts receivable (+2,526)

Increase in deposits paid (+1,964)

Total non-Current Assets

18,916

17,576

+1,340

Increase in intangible leased assets (+869)

In investment securities (+391)

Increase in software (+161)

Total assets

96,994

87,305

+9,689

Total current liabilities

35,465

29,456

+6,009

Increase in advances received (+5,046)

Increase in notes and accounts payable - trade (+925)

Total non-current liabilities

3,555

2,966

+589

Increase in long-term lease obligations (+421)

Total liabilities

39,020

32,423

+6,597

Total net assets

57,973

54,882

+3,090

Increases in Retained earnings+3,144

Total liabilities and net

96,994

87,305

+9,689

assets

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

9

6. Consolidated Statements of Cash Flows

Unit : Million yen

YoY

2Q of FY2020

(cumulative)

Main Factors

2Q of FY2019

Variance

(cumulative)

Net Income before income taxes (6,743)

Cash flows from operating activities

5,154

Increase in advances received (5,072)

5,797

-643

Increase in advance payments (-4,910)

Increase in notes and accounts payable - trade (-2,566)

Cash flows from investing activities

-1,850

Purchase of shares of subsidiaries and associates (-813)

-2,731

+881

Purchase of intangible assets (-813)

Purchase of property, plant and equipment (-138)

Cash flows from financing activities

-1,961

Cash dividends paid (-1,368)

-1,587

-374

Repayments of lease obligations (-587

Effect of exchange rate change on

-73

-93

+20

cash and cash equivalents

Net increase (decrease) in cash and

1,270

1,385

-115

cash equivalents

Cash and cash equivalents at the

36,981

33,620

+3,361

beginning of period

Cash and cash equivalents at the end

38,251

35,006

+3,245

of period

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

10

Forecast

Explanation regarding the appropriate use of forecasts of business results

Forecast figures are projections based on information available at the

time of release, and are not intended as a guarantee that the Company will achieve these targets. Actual results may differ significantly from the forecasts as a result of changes in the business environment and other factors.

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

11

Forecast for FY2020

Despite favorable performance in the first half, we have left our forecast unchanged from the forecast announced on February 10, 2020, due to the uncertainty of future performance resulting from factors such as the impact of the spread of the COVID-19.

Unit : Million yen

(Reference)

YoY

Progress in

FY2020

2Q of FY2020

FY2019

Variance

% change

(cumulative)

forecast

Net sales

105,000

100,679

+4,321

+4.3

52.4%

Operating income

10,500

10,075

+425

+4.2

66.4%

Profit margin

10.0%

10.0%

Ordinary income

10,217

9,648

+569

+5.9

67.2%

Profit attributable to owners

6,911

6,226

+685

+11.0

65.3%

of parent

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

12

Net Sales Forecast by Business Segment

Unit : Million yen (Reference)

YoY

Progress in

FY2020

2Q of FY2020

FY2019

Variance

% change

(cumulative)

forecast

Financial Solutions

25,611

24,622

+989

+4.0

47.7%

Business Solutions

20,057

19,289

+768

+4.0

54.3%

Manufacturing Solutions

31,410

30,027

+1,383

+4.6

49.4%

Communication IT

27,920

26,739

+1,181

+4.4

58.7%

Total

105,000

100,679

+4,321

+4.3

52.4%

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

13

Net Sales Forecast by Service Category

Unit : Million yen

YoY

FY2020

FY2019

Variance

% change

Consulting Services

6,589

6,819

-230

-3.4

Custom System Development

29,798

29,153

+645

+2.2

In-house Software

18,824

17,126

+1,698

+9.9

Third-party Software

31,694

29,945

+1,749

+5.8

Outsourcing, Operation

9,701

9,524

+177

+1.9

and Maintenance Services

IT Equipment Sales

8,390

8,110

+280

+3.5

and Others

Total

105,000

100,679

+4,321

+4.3

COPYRIGHT INFORMATION SERVICES INTERNATIONAL-DENTSU,LTD.

(Reference)

Progress in

2Q of FY2020

(cumulative)

forecast

45.8%

50.3%

53.8%

52.7%

62.8%

48.7%

52.4%

14

Disclaimer

ISID - Information Services International - Dentsu Ltd. published this content on 30 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2020 06:05:10 UTC


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Financials
Sales 2020 109 B 1 040 M 1 040 M
Net income 2020 8 157 M 78,1 M 78,1 M
Net Debt 2020 - - -
P/E ratio 2020 26,5x
Yield 2020 1,48%
Capitalization 218 B 2 086 M 2 085 M
Capi. / Sales 2020 2,00x
Capi. / Sales 2021 1,91x
Nbr of Employees 2 879
Free-Float 35,9%
Chart INFORMATION SERVICES INTERNATIONAL-DENTSU, LTD.
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Information Services International-Dentsu, Ltd. Technical Analysis Chart | MarketScreener
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Technical analysis trends INFORMATION SERVICES INTERNATIONAL-DENTSU, LTD.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 4
Average target price 6 770,00 JPY
Last Close Price 6 710,00 JPY
Spread / Highest target 11,8%
Spread / Average Target 0,89%
Spread / Lowest Target -10,6%
EPS Revisions
Managers
NameTitle
Ryoichi Nawa President, CEO, COO & Representative Director
Tsuyoshi Hirashima Manager-Finance Solutions
Shigehiro Kotani Manager-Enterprise IT Business
Shinichi Ogane Manager-Communication IT Segment
Hirohisa Iwamoto Senior General Manager-Manufacturing Technology
Sector and Competitors