Dentsu Soken Inc. · TSE:4812
Dentsu Soken — Q2 FY2024 Earnings Presentation
28 slides from Dentsu Soken's earnings presentation, Jul 31, 2024
Slide 1: Presentation Material of Financial Results for the Second Quarter of FY2024
Presentation Material of Financial Results for the Second Quarter of FY2024 (from January 1, 2024 to June 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 the m
Slide 2: Index
INDEX 01 Outline of financial results for the 2Q of FY2024 02 Forecasts for FY2024 03 Progress of Medium-Term Management Plan 2
Slide 3: Outline of financial results for the 2Q of FY2024
INDEX 01 Outline of financial results for the 2Q of FY2024 02 Forecasts for FY2024 03 Progress of Medium-Term Management Plan 3
Slide 4: Financial Highlights for the Second Quarter of FY2024
Financial Highlights for the Second Quarter of FY2024 74.2 billion yen, almost in line with plan Net sales +6.3% YoY, mainly in the Financial and Manufacturing Solutions Segments. 10.3 billion yen, short of initial forecast (-5.8% vs. initial forecast, -2.7% YoY, ) Operating profit In addition to a
Slide 5: Consolidated Results for the Second Quarter of FY2024
Consolidated Results for the Second Quarter of FY2024 (Unit: millions of yen) Vs. initial forecast YoY (Announced on February 14, 2024) 2Q of FY2024 (cumulative) 2Q of FY2023 Variance % change Forecasts Variance % change (cumulative) Net sales 74,235 69,849 +4,386 +6.3 74,000 +235 +0.3 Gross profit
Slide 6: Factors for Increase/Decrease in Operating Profit (vs. initial forecast)
Factors for Increase/Decrease in Operating Profit (vs. initial forecast) Gross profit margin declined from the plan due to two unprofitable projects in the second quarter. SG&A expenses increased more than expected due to an increase in man-hours spent on proposal activities by engineers to win
Slide 7: Factors for Increase/Decrease in Operating Profit (YoY)
Factors for Increase/Decrease in Operating Profit (YoY) Net sales +6.3% YoY, and gross profit margin remained almost unchanged from the same period of the previous year Operating profit declined due to a significant increase in SG&A expenses resulting from an increase in the number of personnel,
Slide 8: Non-operating Income/Expenses and Extraordinary Income/Losses
Non-operating Income/Expenses and Extraordinary Income/Losses Non-operating income/expenses deteriorated due to the posting of foreign exchange losses, etc. Extraordinary income/losses improved due to the recording of gain on sale of investment securities and a decrease in loss on valuation of i
Slide 9: Net Sales and Operating Profit by Reportable Segment
Net Sales and Operating Profit by Reportable Segment (Unit: millions of yen) 2Q of FY2024 YoY Vs. initial forecast Reportable Segment (cumulative) Variance % change Overview Variance % change Net sales 16,109 +1,388 +9.4 Net sales and operating profit increased due to expanded +109 +0.7 Financial Op
Slide 10: Ref. Consolidated Financial Results for the 2Q of 2024 (April-June)
Ref. Consolidated Financial Results for the 2Q of 2024(April-June) Consolidated Financial Results (Unit: millions of yen) Reportable Segment (Unit: millions of yen) YoY YoY 2Q of FY2024 2Q of FY2024 Reportable Segment (April-June) 2Q of FY2023 Variance % change (April-June) Variance % change (April-
Slide 11: Net Sales by Service Category and Dentsu Group
Net Sales by Service Category and Dentsu Group (Unit: millions of yen) YoY Vs. initial forecast 2Q of FY2024 Service category (cumulative) Variance % change Variance % change Consulting Services 4,763 +764 +19.1 +163 +3.5 Custom System Development 15,027 -711 -4.5 -973 -6.1 In-house Software 15,136
Slide 12: Net Sales by Industry
Net Sales by Industry (Unit: millions of yen) 2Q of FY2024 (cumulative) YoY Industry Net sales Composition ratio (%) Variance % change Banks 11,272 15.2 +398 +3.7 Other financial institutions 4,314 5.8 +1,024 +31.1 Financial 15,586 21.0 +1,422 +10.0 Transportation equipment 12,734 17.2 +1,703 +15.4
Slide 13: Orders Received and Order Backlog
Orders Received and Order Backlog (Unit: millions of yen) Orders received Order backlog 2Q of FY2024 YoY 2Q of FY2024 YoY End of YoY (April-June) % change (cumulative) % change 2Q of FY2024 % change Total 41,206 +15.9 87,048 +8.3 67,413 +8.5 Financial Solutions 8,093 -3.5 16,916 +10.9 8,581 +3.2 Rep
Slide 14: Trends in Orders Received and Order Backlog
Trends in Orders Received and Order Backlog (Unit : 100 million yen) Net Sales Orders Received Order Backlog Orders received 870 +8.3% YoY 803 800 720 645 Order backlog 684 674 638 646 621 +8.5% YoY 565 562 533 600 538 455 473 507 516 418 454 413 409 375 384 400 350 314 325 727 742 675 698 614 577 5
Slide 15: Consolidated Balance Sheets
Consolidated Balance Sheets (Unit: millions of yen) As of As of June 30, December 31, Variance Main Factors for Increase/Decrease 2024 2023 Increase in advance payments to suppliers (+5,555) Increase in deposits paid (+1,899) Total current assets 116,050 114,813 +1,237 Increase in cash and deposits
Slide 16: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows (Unit: millions of yen) YoY 2Q of FY2024 Main Factors 2Q of FY2023 (cumulative) Variance (cumulative) Quarterly profit before income taxes (10,557) Decrease in trade receivables and contract assets (7,790) Cash flows from operating activities 16,207 Increase in
Slide 17: Forecasts for FY2024
INDEX 01 Outline of financial results for the 2Q of FY2024 02 Forecasts for FY2024 03 Progress of 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 curre
Slide 18: Forecasts for FY2024
Forecasts for FY2024 The full-year forecast announced on February 14 was revised on July 24 as follows, taking into account the effect of making Mitsue-Links Co., Ltd. a subsidiary, although there is no change to the initial forecast for net sales. As for profits, the forecast for all profit ite
Slide 19: Ref. Forecasts for the Second half of FY2024
Ref. Forecasts for the Second half of FY2024 (Unit: millions of yen) Revised 2H YoY Ratio of 2H Forecasts forecasts to revised (Announced on FY2023 Variance % change full-year forecast(%) July 24, 2024) Net sales 80,764 72,758 +8,006 +11.0 52.1 Operating profit 12,139 10,375 +1,764 +17.0 54.0 Operat
Slide 20: Reference: Net Sales Forecasts for FY2024
Reference: Net Sales Forecasts for FY2024 (Unit: millions of yen) (Unit: millions of yen) YoY YoY Revised Forecasts Revised Forecasts Reportable segment (Announced on Service category (Announced on FY2023 FY2023 July 24, 2024) % change July 24, 2024) % change (cumulative) (cumulative) Financial Cons
Slide 21: Progress of Medium-Term Management Plan
INDEX 01 Outline of financial results for the 2Q of FY2024 02 Forecasts for FY2024 03 Progress of Medium-Term Management Plan 21
Slide 22: Medium-Term Management Plan (2022-2024)
Medium-Term Management Plan (2022-2024) Medium-Term Management Plan (2022–2024) —Strategic Framework— DENTSU SOKEN X(Cross) Innovation 2024 While accelerating growth through deepening X Innovation, we will build a new foundation for the DENTSU SOKEN Group focused on our long-term goal for 2030 Prior
Slide 23: Progress of Medium-Term Management Plan
Progress of Medium-Term Management Plan FY2024 FY2024 Medium-Term Management Plan Progress Forecast Targets Sales have steadily progressed toward targets, Net sales ¥150 billion ¥155 billion driven in part by M&A synergies. Operating From ¥18.0 to ¥22.5 billion Although orders received stalled in th
Slide 24: Status of Implementation of Priority Measures: Strengthen human resources
Status of Implementation of Priority Measures: Strengthen human resources The risk of personnel shortages after 2022 is currently being resolved by strengthening the recruitment system and rebranding measures. Human resources are the source of growth. Continue to strengthen recruitment in the se
Slide 25: Status of Implementation of Priority Measures: Strengthen consulting
Status of Implementation of Priority Measures: Strengthen consulting Integrated consulting functions of two subsidiaries and the Company. Net sales of Consulting services in the first half of the year increased by 19.1% year-on-year. Expanded our capabilities with a focus on our strengths in the
Slide 26: Status of Implementation of Priority Measures: Enhance in-house and third-party software
Status of Implementation of Priority Measures: Enhance in-house and third-party software The ratio of Third-party Software and In-house Software to net sales increased. (from 50% for FY2021 to 56% for FY2024) Expanded software provision capabilities through new product development, increased num
Slide 27: Status of Implementation of Priority Measures: Promote sustainability management
Status of Implementation of Priority Measures: Promote sustainability management The following two reports were issued. Integrated Report 2024 (published July 31) Human Capital Report 2024 (published July 16) ＜URL＞ ＜URL＞ https://www.dentsusoken.com/ir/library/integratedreport.html https://www.dent
Slide 28: Bi RST
Bi RST DENTSU SOKEN INC.