Datasection, Inc. · TSE:3905
Datasection — FY2024 Earnings Presentation
48 slides from Datasection's earnings presentation, May 20, 2024
Slide 1: Financial Results for the Fiscal Year Ended March 31, 2024
Financial Results for the Fiscal Year Ended March 31, 2024 Datasection Inc. May 20, 2024 Ticker Symbol: 3905
Slide 2: Table of Contents
Table of Contents 1. Results for the Fiscal Year Ended March 31, 2024 2. Plan for the Fiscal Year Ending March 31, 2025 3. Appendix 4. Reference Materials [Company Profile] 1 © 2024 Datasection Inc.
Slide 3: 1. Results for the Fiscal Year Ended March 31, 2024
1.Results for the Fiscal Year Ended March 31, 2024 2 © 2024 Datasection Inc.
Slide 4: Consolidated Financial Highlights
1. Results for the Fiscal Year Consolidated Financial Highlights Ended March 31, 2024 • Consecutive record net sales (+15.9% YoY) • Significant losses were recorded mainly due to the parent company’s operating loss resulting from delays in business restructuring and one-time and valuation-related ex
Slide 5: Comparison of Year-on-Year Sales
Comparison of Year-on-Year Sales 1. Results for the Fiscal Year Ended March 31, 2024 (Simple aggregated basis of each company) • Continued growth both in Japan and overseas based on a simple aggregated basis of each company • Overseas sales generally maintained high growth, up 40% (Unit: Thousands o
Slide 6: Comparison of Operating Profit Year-on-Year
Comparison of Operating Profit Year-on-Year 1. Results for the Fiscal Year Ended March 31, 2024 (Simple aggregated basis of each company) • In particular, the earnings structure of the parent company has been a challenge. Unable to absorb the cost of structural reform factors, etc., significant defi
Slide 7: Breakdown by Profit Item
1. Results for the Fiscal Year Breakdown by Profit Item Ended March 31, 2024 • Business was affected by the deficit in Japan • In addition, one-time extraordinary losses to address financial issues resulted in a large final deficit (Unit: Thousands of yen) Operating Non-operating Ordinary loss Impai
Slide 8: Adjusted EBITDA
1. Results for the Fiscal Year Adjusted EBITDA Ended March 31, 2024 • Adjusted EBITDA, a measure of real CF generation, exceeded the revised plan * Adjusted EBITDA = Operating profit + Depreciation + Amortization of intangible assets + Share-based payment expenses + M&A expenses < Revised plan for t
Slide 9: Consolidated Net Sales and Operating Profit Trends (Quarterly)
Consolidated Net Sales and Operating Profit Trends 1. Results for the Fiscal Year (Quarterly) Ended March 31, 2024 Unit: Millions of yen Net sales (left axis) Operating profit (right axis) 2020/3 2021/3 2022/3 2023/3 2024/3 Fiscal term 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Net
Slide 10: Consolidated Financial Position (Balance Sheet)
1. Results for the Fiscal Year Consolidated Financial Position (Balance Sheet) Ended March 31, 2024 • The loss for the period almost directly contributed to the decrease in assets and capital items • Maintain capital adequacy ratio of over 50% through (Unit: Millions of yen) third-party allotment of
Slide 11: Key Actions and Issues
1. Results for the Fiscal Year Key Actions and Issues Ended March 31, 2024 • Putting the past behind us and making progress with business restructuring • Achieve high profit growth under new structure from this fiscal year onward • Preferred shares of Chilean subsidiary 1. Address financial issues c
Slide 12: Basic Policy (announced on May 15, 2023)
1. Results for the Fiscal Year Basic Policy (announced on May 15, 2023) Ended March 31, 2024 1. Business Portfolio 2. Strengthen Global Structure 3. Improve Customer Value • Continue overseas growth while • Review business segments on a • Launch new products that have balancing the investment of glo
Slide 13: Progress of KPI (Retail Marketing FollowUP)
1. Results for the Fiscal Year (1) Progress of KPI (Retail Marketing “FollowUP”) Ended March 31, 2024 Net sales leading indicators increased steadily year-on-year • The number of stores adopting and cameras installed, a medium-term KPI for net sales, increased by about 30% year-on-year, driven by or
Slide 14: Strengthen Global Infrastructure
1. Results for the Fiscal Year (2) Strengthen Global Infrastructure Ended March 31, 2024 New consolidation of two (2) companies, Alianza FollowUP Panamá S.A. (Panama) and FollowUP Customer Experience S.I (Spain). Consolidated % of Primary Business Activity FY votes held Driving real-world change (im
Slide 15: Introduction of New Services: FollowUP Shelf Analytics
1. Results for the Fiscal Year (3) Introduction of New Services Ended March 31, 2024 • Launch of FollowUP Shelf Analytics, a product shelf analysis solution for supermarkets (Wednesday, June 28, 2023) • AI-based real-time detection of missing items, misplaced items, wrong number of faces, and wrong
Slide 16: Business Acquired from The ROOM4D Group
1. Results for the Fiscal Year (4) Business Acquired from The ROOM4D Group Ended March 31, 2024 • Acquisitions in growth domains such as data science and generative AI, etc. • In the area of data analysis and AI solutions, a core business in which our Group has strengths, we intend to further enhanc
Slide 17: Change in Reporting Segment
1. Results for the Fiscal Year (5) Change in Reporting Segment Ended March 31, 2024 Reporting segments are reorganized into two, “Japan” and “Overseas” • Review and upgrade business and performance management systems from a management approach perspective • Facilitate understanding by investors and
Slide 18: Strengthen Investor Relations
(6) Strengthen Investor Relations 1. Results for the Fiscal Year Ended March 31, 2024 (Start distribution of corporate research reports) Start of analyst coverage (first session on Monday, October 30, 2023) We will strive to further improve information disclosure, including this business. (From our
Slide 19: Sustainability Policy
1. Results for the Fiscal Year (7) Development of Sustainability Policy Ended March 31, 2024 Sustainability Policy Contributing to the world and people’s lives 100 years from now. 18 © 2024 Datasection Inc.
Slide 20: Sustainability Policy: Message from the CEO and Vision
Sustainability Policy Message from the CEO Sustainability Vision We are striving for sustainable Contributing to the world and people’s growth and business breakthroughs lives 100 years from now. with a strong will to continue improving people’s lives around the world. The mission “Change the Frame”
Slide 21: Sustainability Policy: Partnerships and Diversity
Sustainability Policy Creating innovation through Promoting diversity and global partnerships inclusion on a global basis By supporting stable management, especially in our South We partnered with companies in Southeast Asia to promote American subsidiaries, we help developing countries create diver
Slide 22: Comprehensive Business Alliance with VLC Holdings Co., Ltd.
(8) Comprehensive Business Alliance with 1. Results for the Fiscal Year Ended March 31, 2024 VLC Holdings Co., Ltd. The two companies have decided to form a comprehensive business alliance with the aim of strengthening the business bases of both groups and further increasing their corporate value <
Slide 23: 2. Plan for the Fiscal Year Ending March 31, 2025
2.Plan for the Fiscal Year Ending March 31, 2025 22 © 2024 Datasection Inc.
Slide 24: Earnings Forecast
2. Plan for the Fiscal Year Earnings Forecast Ending March 31, 2025 • Plan to achieve top-line growth over the previous year and return to consolidated profitability • Focus on organic profit growth in profitable businesses and improving profitability of domestic businesses through restructuring, in
Slide 25: Financial Trends Highlights
2. Plan for the Fiscal Year Financial Trends Highlights Ending March 31, 2025 • For the top line, plan to achieve the highest net sales through growth in both Japan and overseas • To return the domestic business to profitability, redefine business domains, clarify the good and the bad, and implement
Slide 26: Adjusted EBITDA
2. Plan for the Fiscal Year Adjusted EBITDA Ending March 31, 2025 • Adjusted EBITDA is also expected to increase significantly (up 377 million year-on-year ), mainly driven by a return to operating profitability (significant year-on-year profit improvement) Adjusted M&A EBITDA expenses 425M Share-ba
Slide 27: Basic Policy I: Business Strategy
2. Plan for the Fiscal Year Basic Policy I Ending March 31, 2025 < Business Strategy > • In existing businesses, clarify “good” and “bad,” promote organic profit growth and restructuring, and aim to return to profitability • For new businesses, allocate resources for timely investment and commercial
Slide 28: Basic Policy II: Corporate Strategy
2. Plan for the Fiscal Year Basic Policy II Ending March 31, 2025 < Corporate Strategy > • Strengthen the holding company function and governance of the parent company, taking into account the characteristics of the Group with a relatively large number of consolidated subsidiaries on a global basis
Slide 29: Redefining Business Domains
2. Plan for the Fiscal Year Redefining Business Domains Ending March 31, 2025 By returning to its strengths in “data and AI,” the company has redefined its three (3) business domains: DS Data Science DS, SI, DS, DSS Overseas Marketing System Solution Integration *DS: Datasection Inc., DSS: DSS Inc.,
Slide 30: Advanced AI Data Innovation Institute (AIDI) Established
Advanced AI Data Innovation Institute (AIDI) 2. Plan for the Fiscal Year Established (on April 9) Ending March 31, 2025 Established the Advanced AI Data Innovation Institute (also known as AIDI) on April 9 to further develop the AI and data fields, which are our strengths. AIDI aims to quickly retur
Slide 31: Business Alliance Basic Agreement with Super Micro Computer, Inc.
Business Alliance Basic Agreement Signed 2. Plan for the Fiscal Year with Super Micro Computer, Inc. (on April 12) Ending March 31, 2025 < Reasons for the Alliance > • The two companies have agreed in principle to form a business alliance, leveraging their respective technologies, products, resource
Slide 32: 3. Appendix
3.Appendix 31 © 2024 Datasection Inc.
Slide 33: Consolidated Net Sales Trends
Consolidated Net Sales Trends 3. Appendix Fiscal term 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3 2024/3 Net sales (Millions of yen) 32 © 2024 Datasection Inc.
Slide 34: Consolidated Operating Profit Trends
Consolidated Operating Profit Trends 3. Appendix Fiscal term 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3 2024/3 Operating profit (55) (216) (Millions of yen) 33 © 2024 Datasection Inc.
Slide 35: Consolidated Ordinary Profit Trends
Consolidated Ordinary Profit Trends 3. Appendix Fiscal term 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3 2024/3 Ordinary profit (235) (Millions of yen) 34 © 2024 Datasection Inc.
Slide 36: Trends in Consolidated Profit Attributable to Owners of Parent
Trends in Consolidated Profit Attributable to Owners of Parent 3. Appendix Fiscal term 2014/3 2015/3 2016/3 2017/3 2018/3 2019/3 2020/3 2021/3 2022/3 2023/3 2024/3 Profit attributable to owners of (17) (41) (530) (1,261) parent (Millions of yen) 35 © 2024 Datasection Inc.
Slide 37: 4. Reference Materials
4.Reference Materials 36 © 2024 Datasection Inc.
Slide 38: Company Profile
Company Profile 37 © 2024 Datasection Inc.
Slide 39: We ARE ... What we will be ... What we should do ...
We ARE ... What we will be ... What we should do ... Change the Frame As a “section” of the World Data Division, we continue to improve the lives of people around the world, revolutionizing the real world with technology and creating new ways of living © Datasection Inc 38
Slide 40: Company Profile Datasection Inc.
Company Profile Company Profile Datasection Inc. Head Office 8F Gotanda PLACE Bldg., 1-3-8, Nishigotanda, Business Data Science Shinagawa-ku, Tokyo, 141-0031, Japan Domain Marketing Solution System Integration Foundation July 11, 2000 Date Capital 1,868,479,000 yen (as of March 31, 2024) Ticker 3905
Slide 41: Company History
Company Profile: Our History Company History Acquisition of The ROOM4D Alliance with Nippontect Systems Jach Technology SpA becomes a subsidiary Capital and business alliance with KDDI Capital and business alliance with Arum in the medical field Acquisition of FollowUP’s store analytics tool busines
Slide 42: Our Leadership
Company Profile: Our Leadership Our Leadership Shinichi Iwata Christian Cafatti Norihiko Ishihara Daisuke Katano President and Director Director Director Representative Director CEO and CFO © Datasection Inc 41
Slide 43: Our Leadership
Company Profile: Our Leadership Our Leadership Yuki Uchiyama Jun Nakajima Kohki Sakata Director (External) Director (External) Director (External) © Datasection Inc 42
Slide 44: Our Leadership
Company Profile: Our Leadership Our Leadership Akira Tashiro Shun Ishizaki Daisuke Yokoyama Full-time Audit & Audit & Supervisory Audit & Supervisory Supervisory Board Board Member Board Member Member (External) (External) (External) / CPA © Datasection Inc 43
Slide 45: Our Founder
Company Profile: Our Founder Leading expert on data science workforce development Founder of Datasection Inc. (currently an advisor to our company) / Professor at Digital Hollywood University Director of Media Library, Visiting Professor, Tama University Graduate School Director, Wit Institute, Inc.
Slide 46: Introducing the Datasection Group
Company Profile: Company Datasection Profile: Group Group Datasection DATASECTION GROUP The Datasection Group supports DX and business rationalization for a wide range of companies in retail and other industries on a global basis Introducing the with its strengths in large-scale data analysis, high-
Slide 47: Datasection Inc.
Datasection Inc. ir@datasection.co.jp 03-6427-2565 8F Gotanda PLACE Bldg., 1-3-8, Nishigotanda, Shinagawa-ku, Tokyo, 141-0031, Japan https://www.datasection.co.jp
Slide 48: Forward-Looking Statements Disclaimer
Forward-Looking Statements Disclaimer • This document has been prepared by the Company for the purpose of providing investors with an understanding of the current status of the Company for their reference. • The information contained herein is based on generally accepted economic, social, and other