Slide 1: Briefing on Results for Fiscal Year 2019
Briefing on Results for Fiscal Year 2019 —January to December 2019-— February 14, 2020 CAC Holdings Corporation
Slide 2: Agenda
Agenda I . Overview of Financial Results for FY2019 I. Revision of Medium-Term Strategy for FY2021 Il. Forecasts for FY2020 © 2020 CAC Holdings Corporation T
Slide 3: I. Overview of Financial Results for FY2019
I. Overview of Financial Results for FY2019
Slide 4: Net sales were ¥50,683 million, rising by ¥776 million
Net sales were ¥50,683 million, rising by ¥776 million. Increases in domestic IT and overseas IT businesses were partially offset by sharp decline in revenue from CRO business, resulting in slight growth overall. Although gross profit increased, operating income stood at ¥1,314 million yen and ordin
Slide 5: Domestic IT and Overseas IT results
[Domestic IT] Net sales increased by ¥2,000 million and operating income also rose by around ¥600 million. Net sales of CAC, the core subsidiary, grew ¥1,600 million and operating income climbed ¥550 million. A breakdown by industry shows no change for financial services (excluding trust banks) and
Slide 6: Results by industry: financial services, trust banks, pharmaceuticals
[Financial services] Net sales decreased by some ¥480 million. This was due to a decline in sales to domestic financial institutions. Domestic sales account for ¥3,100 million of the total sales for financial services of ¥5,600 million, while overseas sales account for ¥2,500 million. [Trust banks]
Slide 7: Orders received and order backlog
[Orders received] ・In domestic IT business, orders received increased by ¥2,700 million. CAC saw an increase of ¥2,500 million in orders received, mainly from trust banks (pension project). ・In overseas IT business, orders received were down around ¥1,100 million but the order backlog grew. In FY201
Slide 8: Orders received by industry
[Financial services] Orders received fell, with sharp decline in domestic orders received. [Trust banks] Orders received rose substantially thanks to a large-scale pension-related project. [Pharmaceuticals] Orders received were mostly unchanged, falling ¥100 million. Decline of ¥1,000 million in CRO
Slide 9: Quarterly operating income trends in FY2019
During the first quarter of FY2019, the Company generated a high level of operating income but this was due to the recording of income that was supposed to be recorded in previous and following quarters (income that should have been recorded in 4Q of FY2018 was posted in 1Q and income that should ha
Slide 10: II. Revision of Medium-Term Strategy for FY2021
I. Revision of Medium-Term Strategy for FY2021
Slide 11: Status at the end of FY2019: subsidiaries and overseas sales
Status at the end of FY2019 22 subsidiaries in 9 countries run businesses. Overseas sales account for ¥10,000 million or around 20% of overall net sales of ¥50,000 million, and we plan to increase this to 25% (around one quarter) in FY2020.
Slide 12: Summary of the Medium-term Strategy
This slide summarizes the Medium-term Strategy announced in 2018 and some basic policies added from 2019. We have aimed to develop into a corporate Group that is able to respond to the age of digital transformation. We added the basic policies at the beginning of 2019 to steer us towards stronger go
Slide 13: Progress of the Medium-term Strategy
This slide shows the progress of the Medium-term Strategy. [Improvement of profitability of existing businesses] Domestic IT business is performing solidly, with improvement in earning capacity and higher income. In overseas IT business, losses are narrowing but progress is slower than planned. The
Slide 14: Three focus areas for the remaining two years
Based on the review in the previous slide, we intend to focus on the three areas shown below over the remaining two years. [Establish high profit models] We recognize that our profit margins are very low compared with other companies in the same industry, and we intend to work to increase profit mar
Slide 15: Promote Digital Transformation
[Promote Digital Transformation] According to various articles and reports, Japanese companies have been slow to meet digital transformation needs. We will promote digital transformation, focusing on agile development. In the digital era, the collaboration creation model will serve as the basic mode
Slide 16: Revised results forecasts
We have revised our results forecasts. Our ROE forecast has not changed and we will endeavor to achieve it. These net sales and operating income forecasts are based on organic growth (growth under the existing group structure) and we plan to formulate and implement investment and financial strategie
Slide 17: FY2020 forecasts by segment
[FY2020 forecasts (by segment)] Domestic IT: The reasons for the decline in operating income are the impact of a change in the timing of bonuses due to an overhaul of personnel systems mainly at CAC and greater investment in human resources Overseas IT: Both net sales and income are expected to rise
Slide 18: Dividend plan and shareholder returns
・ As announced in today’s release, we plan to pay a dividend of 60 yen this fiscal year, increasing both the interim dividend and the year-end dividend by 5 yen, making a total increase in the full-year dividend of 10 yen. We will make sure this is not a “bogus” dividend. We have confirmed that this
Slide 19: III. Forecasts for FY2020
Il. Forecasts for FY2020
Slide 20: FY2020 consolidated forecasts
The forecasts for net sales, operating income, ordinary income and net income are not much better than usual but we will aim for operating income of ¥2,000 million based on the kind of scenario explained in connection with our forecasts by segment.
Slide 21: Consolidated targets for FY2020 and FY2021 by segment
Our consolidated targets for FY2020 and FY2021 (by segment) are as explained in the slide.
Slide 22: Reference: Major News in the Second Half of the Fiscal Year (1/3)
Reference: Major News in the Second Half of the Fiscal Year (1/3) Aug. 20 2019 CAC commences collaboration with Dotmatics in drug development informatics. CAC signs a sales agent agreement with Dotmatics Limited (hereinafter “Dotmatics”), which engages in drug development informatics, to embark on a
Slide 23: Reference: Major News in the Second Half of the Fiscal Year (2/3)
Reference: Major News in the Second Half of the Fiscal Year (2/3) Sep. 12, CAC signs sales agent agreement with Brains Technology for Neuron enterprise search engine. 2019 |- Supporting the improvement of knowledge workers’ productivity - CAC signs a sales agent agreement with Brains Technology, Inc
Slide 24: Reference: Major News in the Second Half of the Fiscal Year (3/3)
Reference: Major News in the Second Half of the Fiscal Year (3/3) Oct. 28,/CAC jointly develops smile training app based on emotion 2019 |recognition AI with Recruit Staffing. - Smile training service for temporary staff launched by Recruit Staffing on Mon., Oct. 28 - CAC and Recruit Staffing Co., L
Slide 25: CAC Holdings Corporation
CAC Holdings Corporation Enterprise Value Up Group, Corporate Planning Division Tel: 03-6667-8010 E-mail: prir@cac.co.jp https://www.cac-holdings.com/ CAC Group helps disseminate and develop Boccia, a sport for the disabled. © 2020 CAC Holdings Corporation 24
Slide 26: Q&A
Q&A Q: Whilst sales are still sluggish, you appear to be getting a positive response overseas. When jt comes to Investments and M&A, will you also consider completely new propositions that go beyond the current format of your business operations or neighboring business domains as one might expect? P