Dentsu Soken Inc. · TSE:4812

Dentsu Soken — Q2 FY2025 Earnings Presentation

26 slides from Dentsu Soken's earnings presentation, Jul 30, 2025

  1. Slide 1: Dentsu Soken Inc. Financial Results July 30, 2025

    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. DENTSU SOKEN INC. July

  2. Slide 2: Index

    INDEX • The business classifications under the reportable segments have been changed from the fiscal year ending December 31, 2025. As a result, the results for the previous fiscal year are compared and analyzed with the figures reclassified into the new classification. 2

  3. Slide 3: Outline of Financial Results for Q2 FY2025

    | O01 Outline of Financial Results for Q2 FY2025

  4. Slide 4: Summary of Q2 FY2025 results

    Net sales +8.1%, Operating profit +2.9%; Both net sales and operating profit increased, Year-on-year absorbing an increase in amortization of goodwill and personnel expenses. Record high for change the first half. Change Net sales -3.3%, Operating profit -7.3%; Business Solutions and Communication IT we

  5. Slide 5: Consolidated results Q2 FY2025 cumulative

    (Unit: Millions of yen) Vs. Initial Forecast YoY Q2 FY2025 (Announced on February 12, 2025) (cumulative) Q2 FY2024 Variance % change forecast Variance % change (cumulative) Net sales 80,239 74,235 +6,004 +8.1 83,000 -2,761 -3.3 Gross profit 28,785 27,076 +1,709 +6.3 30,800 -2,015 -6.5 Gross profit mar

  6. Slide 6: Operating profit year-on-year change

     Despite the impact of a decline in gross profit margin and an increase in selling, general and administrative expenses, operating profit increased due to the effect of higher sales.  The decline in gross profit margin was mainly attributable to increased costs resulting from the retirement of intangi

  7. Slide 7: Operating profit versus initial forecast

     Operating profit decreased due to the impact of lower sales and a decline in gross profit margin.  The decline in gross profit margin was mainly due to the impact of lower-than-planned net sales from in-house software licenses and third-party software add-on development, as well as an increased cost

  8. Slide 8: Non-operating and extraordinary income/expenses

     Non-operating income/expenses: Non-operating income improved, mainly due to an increase in interest income associated with a rise in interest rates.  Extraordinary income/losses: Absence of the impact of the recording of gain on sales of investment securities as extraordinary income in the same p

  9. Slide 9: Results by reportable segment

    (Unit: Millions of yen) Q2 FY2025 YoY Vs. initial forecast (cumulative) Variance % change Overview Variance % change Net sales 16,355 -822 -4.8 Net sales and operating profit decreased due to a -1,645 -9.1 decrease in implementation projects of third-party Financial Operating software in the accounti

  10. Slide 10: Q2 (April-June) consolidated and segment results

    Consolidated Results Reportable Segment (Unit: Millions of yen) (Unit: Millions of yen) YoY YoY Q2 FY2025 Q2 FY2025 (April-June) Q2 FY2024 (April-June) Variance % change Variance % change (Apr-Jun) Net sales 8,050 -716 -8.2 Net sales 39,994 37,135 +2,859 +7.7 Financial Operating Solutions profit 799

  11. Slide 11: Net sales by service category

    (Unit: Millions of yen) Q2 FY2025 YoY Vs. Initial Forecast Service category (cumulative) Variance % change Variance % change Consulting Services 5,611 +848 +17.8 -189 -3.3 Custom System Development 16,469 +1,442 +9.6 -31 -0.2 In-house Software 16,078 +942 +6.2 -422 -2.6 Third-party Software 26,855 -

  12. Slide 12: Net sales by client industry

    (Unit: Millions of yen) Q2 FY2025 (cumulative) YoY Industry Composition ratio Net sales Variance % change (%) Banks 11,688 14.6 +416 +3.7 Other financial institutions 4,488 5.6 +174 +4.0 Financial 16,176 20.2 +590 +3.8 Transportation equipment 15,404 19.2 +2,585 +20.2 Electric appliances, Precision i

  13. Slide 13: Orders received and order backlog

     Financial Solutions and Business Solutions received multiple large orders. The reactionary decline that continued since last year has run its course, and orders backlog increased significantly.  The decrease in Manufacturing Solutions was mainly due to the reactionary decline in large SAP orders a

  14. Slide 14: Balance sheet

    (Unit: Millions of yen) As of As of Variance Main factors for increase/decrease June 30, 2025 Dec. 31, 2024 Increase in deposits paid (+6,707) Total current assets 122,828 119,058 +3,770 Decrease in accounts receivable - trade, and contract assets (-3,285) Total non-current assets 27,611 28,273 -662

  15. Slide 15: Cash flows

    (Unit: Millions of yen) YoY Q2 FY2025 Main factors Q2 FY2024 (cumulative) Variance (cumulative) Profit before income taxes (11,109) Decrease in accounts receivable - trade, and contract assets (3,178) Cash flows from operating activities 11,890 Increase in contract liabilities (2,801) 16,207 -4,317 In

  16. Slide 16: Forecasts for FY2025

    | O02 Forecasts for FY2025 16

  17. Slide 17: Full-year forecast revision

     The pipeline in the second half is expected to exceed initial forecasts. Revised net sales forecast downward, incorporating part of the shortfall in H1 vs. forecast.  Operating profit forecast remains unchanged, with sales for H2 increased from the initial forecast and productivity improved. (Unit

  18. Slide 18: Full-year forecast by reportable segment

     Revised Financial Solutions, Manufacturing Solutions, and Communication IT in light of H1 progress. (Unit: Millions of yen) Initial Revised Vs. Initial Forecast YoY Forecast Forecast (Announced on (Announced on FY2024 February 12, 2025) July 30, 2025) Variance % change Variance % change (cumulativ

  19. Slide 19: Full-year forecast by service category

     Revised downward third-party software in light of H1 progress. (Unit: Millions of yen) Initial Revised Vs. Initial Forecast YoY Forecast Forecast (Announced on (Announced on FY2024 February 12, 2025) July 30, 2025) Variance % change Variance % change (cumulative) Consulting Services 12,000 12,000

  20. Slide 20: Outlook and Focus Areas for the Second Half of FY2025

    | 03 Outlook and Focus Areas for the Second Half of FY2025 20

  21. Slide 21: Second-half forecast

     Strong pipeline mainly on Financial Solutions and Business Solutions.  Aiming to return to a high-growth path through steady orders and improved productivity, despite the risk of tariff impact. (Unit: Millions of yen) Initial Revised Vs. Initial H2 Forecast YoY H2 Forecast H2 Forecast (Announced o

  22. Slide 22: Second-half forecast by segment and service category

    (Unit: Millions of yen) (Unit: Millions of yen) YoY YoY Revised Revised Reportable Segment Service category H2 Forecast H2 FY2024 H2 Forecast H2 FY2024 Variance % change Variance % change (cumulative) (cumulative) Financial Consulting Solutions 19,644 16,873 +2,771 +16.4 Services 6,388 5,716 +672 +1

  23. Slide 23: Financial Solutions and Business Solutions outlook

    (Unit: Millions of yen) YoY Revised Reportable Segment H2 FY2024 H2 Forecast Variance % change (cumulative) Financial Solutions 19,644 16,873 +2,771 +16.4  The impact of the interruption of two large-scale projects in the second half of last year has been passed.  Against the backdrop of aggressiv

  24. Slide 24: Manufacturing Solutions and Communication IT outlook

    (Unit: Millions of yen) YoY Revised Reportable Segment H2 FY2024 H2 Forecast Variance % change (cumulative) Manufacturing Solutions 33,997 31,240 +2,757 +8.8  Investment appetite in the manufacturing industry remains strong, mainly in areas such as software-based function control and software devel

  25. Slide 25: Three types of leadership for the next 50 years

     Our company will celebrate its 50th anniversary in 2025. To drive growth for the next 50 years, we will demonstrate three types of leadership. Enhancing Global Competitiveness for Manufacturing Companies I. ～Transforming Manufacturing through the Implementation of AI and Advanced Technologies～ Adv

  26. Slide 26: Investor Relations contact

    For further information, please contact: DENTSU SOKEN INC. https://www.dentsusoken.com/english/ir Executive Office g-ir@group.dentsusoken.com Investor Relations +81-3-6713-6160

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