Dentsu Soken Inc. · TSE:4812
Dentsu Soken — Q3 2024 Earnings Presentation
26 slides from Dentsu Soken's earnings presentation, Oct 31, 2024
Slide 1: Presentation Material of Financial Results for the Third Quarter of FY2024
Presentation Material of Financial Results for the Third Quarter of FY2024 (from January 1, 2024 to September 30, 2024) 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 t
Slide 2: INDEX
INDEX 01 Outline of financial results for the 3Q of FY2024 02 Forecasts for FY2024 03 Next Medium-Term Management Plan 2
Slide 3: INDEX: Outline of financial results for the 3Q of FY2024
INDEX 01 Outline of financial results for the 3Q of FY2024 02 Forecasts for FY2024 03 Next Medium-Term Management Plan 3
Slide 4: Summary of the Third Quarter of FY2024
Summary of the Third Quarter of FY2024 Despite +6.6% YoY due to the expansion of Financial and Manufacturing Net sales Solutions, the progress rate against the full-year plan is 72.4%, -1.4p YoY. -7.0% YoY due to the significant increase in SG&A expenses mainly due to Operating profit personnel expe
Slide 5: Consolidated Results for the Third Quarter of FY2024
Consolidated Results for the Third Quarter of FY2024 (Unit: millions of yen) YoY percentage of progress%** 3Q of FY2024 (cumulative) 3Q of FY2023 3Q of FY2024 3Q of FY2023 Variance % change (cumulative) (cumulative) (cumulative) Net sales 112,231 105,267 +6,964 +6.6 72.4 73.8 Gross profit 40,424 37,
Slide 6: Factors for Increase/Decrease in Operating Profit (YoY)
Factors for Increase/Decrease in Operating Profit (YoY) Despite the effect of increased net sales and improved gross profit margin, operating profit declined as the expansion of SG&A expenses exceeded these effects. The gross profit margin remained almost the same as FY2023 due to the conclusion
Slide 7: Non-operating Income/Expenses and Extraordinary Income/Losses
Non-operating Income/Expenses and Extraordinary Income/Losses In addition to the recording of equity method investment losses, non-operating income/expenses deteriorated due to the posting of foreign exchange losses, etc. In addition to the recording of gains on the sale of investment securities
Slide 8: Net Sales and Operating Profit by Reportable Segment
Net Sales and Operating Profit by Reportable Segment (Unit: millions of yen) 3Q of FY2024 YoY Reportable Segment (cumulative) Variance % change Overview Net sales 24,021 +1,439 +6.4 Net sales and operating profit increased due to expanded sales and implementation of third-party software in the Opera
Slide 9: Ref. Consolidated Financial Results for the 3Q of 2024 (July-September)
Ref. Consolidated Financial Results for the 3Q of 2024(July-September) Consolidated Financial Results (Unit: millions of yen) by Reportable Segment (Unit: millions of yen) YoY YoY 3Q of FY2024 3Q of FY2024 3Q of FY2023 Reportable Segment (Jul.-Sep.) Variance % change (Jul.-Sep.) Variance % change (J
Slide 10: Net Sales by Service Category and Dentsu Group companies
Net Sales by Service Category and Dentsu Group companies (Unit: millions of yen) YoY 3Q of FY2024 Service category (cumulative) Variance % change Consulting Services 7,472 +1,448 +24.0 Custom System Development 22,616 -643 -2.8 In-house Software 22,094 -499 -2.2 Third-party Software 40,566 +5,215 +1
Slide 11: Net Sales by Industry
Net Sales by Industry (Unit: millions of yen) 3Q of FY2024 (cumulative) YoY Industry Net sales Composition ratio (%) Variance % change Banks 17,017 15.2 +525 +3.2 Other financial institutions 6,569 5.8 +1,384 +26.7 Financial 23,586 21.0 +1,909 +8.8 Transportation equipment 20,028 17.8 +3,629 +22.1 E
Slide 12: Orders Received and Order Backlog
Orders Received and Order Backlog (Unit: millions of yen) Orders received Order backlog 3Q of FY2024 YoY 3Q of FY2024 YoY End of YoY (Jul.-Sep.) % change (cumulative) % change 3Q of FY2024 % change Total 35,139 +9.4 122,188 +8.7 63,856 +8.5 Financial Solutions 6,880 -13.5 23,796 +2.6 7,550 -10.2 Rep
Slide 13: INDEX: Forecasts for FY2024
INDEX 01 Outline of financial results for the 3Q of FY2024 02 Forecasts for FY2024 03 Next Medium-Term Management Plan Note: Forecasts of business results in this document are based on judgments and assumptions made in light of industry trends, customer conditions, and other information currently av
Slide 14: Forecasts for FY2024
Forecasts for FY2024 Based on recent performance trends, we have revised downward our full-year consolidated financial forecast, while maintaining our dividend forecast. Net Sales: In addition to weak progress in the third quarter, the level of orders received was also below expectations. Profit:
Slide 15: Net Sales Forecasts for FY2024 by Reportable segment
Net Sales Forecasts for FY2024 by Reportable segment (Unit: millions of yen) Previous Forecast Revised Forecast Vs. Previous forecast YoY Reportable segment (Announced on (Announced on July 24, 2024) October 31, 2024) Variance % change FY2023 Variance % change Financial Solutions 33,000 32,000 -1,00
Slide 16: Net Sales Forecasts for FY2024 by service category
Net Sales Forecasts for FY2024 by service category (Unit: millions of yen) Previous Forecast Revised Forecast Vs. Previous forecast YoY Service category (Announced on (Announced on July 24, 2024) October 31, 2024) Variance % change FY2023 Variance % change Consulting Services 9,500 10,500 +1,000 +10
Slide 17: Ref. Forecasts for the Fourth Quarter of FY2024
Ref. Forecasts for the Fourth Quarter of FY2024 (Unit: millions of yen) Revised Forecasts YoY 4Q of FY2024 (Announced on 4Q of FY2023 Variance % change October 31, 2024) (Oct.-Dec.) Net sales 39,769 37,340 +2,429 +6.5 Operating profit 5,537 5,477 +60 +1.1 Operating margin (%) 13.9 14.7 -0.8p - Ordin
Slide 18: Ref. Net Sales Forecasts for the Fourth Quarter of FY2024
Ref. Net Sales Forecasts for the Fourth Quarter of FY2024 by Reportable segment / by Service category by Reportable segment (Unit: millions of yen) by Service category (Unit: millions of yen) Revised Forecasts YoY Revised Forecasts YoY 4Q of FY2024 4Q of FY2024 Reportable segment Service category (A
Slide 19: INDEX: Next Medium-Term Management Plan
INDEX 01 Outline of financial results for the 3Q of FY2024 02 Forecasts for FY2024 03 Next Medium-Term Management Plan 19
Slide 20: Current Medium-Term Management Plan Progress (as of October 2024)
Current Medium-Term Management Plan Progress (as of October 2024) Net sales, operating profit, operating margin, ROE, and the number of employees are all expected to meet the initially set targets. However, the new target, which was revised upward to 2023 in response to strong performance, is no
Slide 21: Current Medium-Term Management Plan Progress (as of October 2024)
Current Medium-Term Management Plan Progress (as of October 2024) Implementation of company name change, improvement of treatment, and various HR policies - Achieving a significant personnel growth and the development of a human resource base for high growth by improving recruiting capabilities. Sta
Slide 22: Next Medium-Term Management Plan (2025-2027) Outline
Next Medium-Term Management Plan (2025-2027) Outline Mid-term Management Plan Slogan Contributing to progress in society by strengthening and utilizing our capabilities to support the activities of businesses Quantitative Targets (FY2027) Net sales 210 billion yen Operating margin 15.0% *Both target
Slide 23: Next Medium-Term Management Plan (2025-2027) Priority Measures
Next Medium-Term Management Plan (2025-2027) 7 Priority Measures Integration of Sales Organizations Integration of Technical Organizations • Strengthen account sales to address complicated corporate issues • Strengthen our capability to handle high-difficulty, large-scale projects through • Strength
Slide 24: Next Medium-Term Management Plan (2025-2027) Strengthening Direction
Next Medium-Term Management Plan (2025-2027) Strengthening Direction Our unique features include think tank, consulting, and system integration functions. In addition, at least 50% of systems integration is software-based business. Enhancing each function and promoting mutual collaboration to ex
Slide 25: Positioning of the Next Medium-Term (2025-2027) Management Plan
Positioning of the Next Medium-Term (2025-2027) Management Plan The goal of the next mid-term management plan is to become a company with net sales exceeding 300 billion yen by 2030. Aiming for a qualitative transformation, starting with the 50th anniversary in 2025. (Unit: billions of yen) Dece
Slide 26: Dentsu Soken Inc.
Bi RST DENTSU SOKEN INC.