Tis Inc. · TSE:3626
Tis — H1 FY2025 Earnings Presentation
40 slides from Tis's earnings presentation, Oct 31, 2024
Slide 1: Financial Results for the First Two Quarters of Fiscal Year Ending March 31, 2025
Financial Results for the First Two Quarters (Interim Period) of Fiscal Year Ending March 31, 2025 October 31, 2024 © 2024 TIS Inc.
Slide 2: Highlights
Highlights Fiscal 2025 First Two Quarters: Financial Highlights ・Achieved better profit position, exceeding estimates for higher sales and lower income year on year. ・Operating margin slipped year on year, mainly because number of large projects fell from peak in corresponding period a year ago, but
Slide 3: Contents
Contents Fiscal 2025 First Two Quarters: Financial Highlights Fiscal 2025: Performance Forecast Return to Shareholders Progress on Medium-Term Management Plan (2024–2026) Reference Materials ˗ All statements described in these materials are based on information available to management regarding the
Slide 4: First Two Quarters: Financial Highlights
Fiscal 2025 First Two Quarters: Financial Highlights Fiscal 2025: Performance Forecast Return to Shareholders Progress on Medium-Term Management Plan (2024–2026) Reference Materials © 2024 TIS Inc. 4
Slide 5: First Two Quarters: Performance Highlights (YOY change)
Fiscal 2025 First Two Quarters: Performance Highlights (YOY change) • Higher sales and higher income, thanks to business expansion through accurate responses to clients’ IT investment needs, including demand for digital transformation. • Operating margin slipped, mainly due to decline in number of l
Slide 6: Performance Highlights (Compared with estimate)
Fiscal 2025 First Two Quarters: Performance Highlights (Compared with estimate) • Achieved estimates against backdrop of heightened IT investment activity across broad range of clients First two quarters First two quarters [Millions of yen] of fiscal 2025 of fiscal 2025 Compared with estimate estima
Slide 7: Operating Income Analysis, Increase/Decrease Reasons (YOY change)
Fiscal 2025 First Two Quarters: Operating Income Analysis, Increase/Decrease Reasons (YOY change) • Maintained steady increase in operating income even though number of large projects fell from peak in corresponding period a year ago Operating Income [Billions of yen] [Operating Margin] +0.24 +2.26
Slide 8: Sales by Client Sector
Fiscal 2025 First Two Quarters: Sales by Client Sector • Overall, demand trends remained positive. However, key negative factors included lower sales to clients in credit card and public service sectors along with income from large-scale projects falling from peak. [Millions of yen] 81,833 First two
Slide 9: Sales and Income by Key Business Segments (YOY change)
Fiscal 2025 First Two Quarters: Sales and Income by Key Business Segments (YOY change) First two quarters First two quarters [Millions of yen] of fiscal 2024 of fiscal 2025 YOY change Net Sales 60,148 70,405 +10,256 [+17.1%] Offering Service Operating Income 2,659 4,468 +1,809 [+68.0%] Business Oper
Slide 10: Sales and Income by Key Business Segment (Compared with estimate)
Fiscal 2025 First Two Quarters: Sales and Income by Key Business Segment (Compared with estimate) First two quarters First two quarters [Millions of yen] of fiscal 2025 of fiscal 2025 Compared with estimate estimate actual Net Sales 68,600 70,405 +1,805 [+2.6%] Offering Service Operating Income 3,30
Slide 11: Reference: Second Quarter Sales and Income by Key Business Segments
Reference: Fiscal 2025 Second Quarter (July-September): Sales and Income by Key Business Segments Second quarter Second quarter [Millions of yen] YOY change of fiscal 2024 of fiscal 2025 Net Sales 138,059 141,503 +3,443 [+2.5%] Operating Income 16,076 16,447 +370 [+2.3%] Operating Margin 11.6% 11.6%
Slide 12: Reference: Second Quarter Operating Income Analysis
Reference: Fiscal 2025 Second Quarter (July-September): Operating Income Analysis, Increase/Decrease Reasons (YOY change) [Billions of yen] Operating Income [Operating Margin] +0.98 +0.36 16.44 +0.37 16.07 Of which, effect of [11.6%] [+2.3%] [11.6%] unprofitable projects was +¥0.35 billion -0.98 Of
Slide 13: Order Status (Orders received during first two quarters)
Fiscal 2025 First Two Quarters: Order Status (Orders received during first two quarters) • Orders received were up year on year, driven by successful order activity by Industrial IT Business and Offering Service Business. • Drop recorded by Financial IT Business reflects decrease in number of large
Slide 14: Order Status (Order backlog at end of second quarter)
Fiscal 2025 First Two Quarters: Order Status (Order backlog at end of second quarter) • Order backlog hit all-time high, fueled by demand for Offering Service Business and Regional IT Solutions services. • Decrease recorded by Industrial IT Business reflects reactionary drop on certain sales opportu
Slide 15: Reference: Second Quarter Order Status
Reference: Fiscal 2025 Second Quarter (July-September): Order Status Second quarter Second quarter [Millions of yen] YOY change of fiscal 2024 of fiscal 2025 Orders received during second quarter 182,835 189,849 +7,013 [+3.8%] Software development 74,106 75,834 +1,728 [+2.3%] Key Business Segments O
Slide 16: Fiscal 2025: Performance Forecast
Fiscal 2025 First Two Quarters: Financial Highlights Fiscal 2025: Performance Forecast Return to Shareholders Progress on Medium-Term Management Plan (2024–2026) Reference Materials © 2024 TIS Inc. 16
Slide 17: Fiscal 2025: Understanding the Business Environment
Fiscal 2025: Understanding the Business Environment • View that IT investment is in expansion mode for long term persists. Changes in environment require careful monitoring. Offering Service Business To date From now ✓ Cashless market continues to grow. Tailwind factors, such as political policies,
Slide 18: Fiscal 2025: Performance Forecasts
Fiscal 2025: Performance Forecasts No change from estimates announced on May 8, 2024 • Despite impact of reactionary drop in large projects, anticipating business expansion that will support higher sales and higher operating income. • Decrease in net income attributable to owners of the parent compa
Slide 19: Operating Income Analysis, Increase/Decrease Reasons [Forecast]
Fiscal 2025: Operating Income Analysis, Increase/Decrease Reasons [Forecast] No change from estimates announced on May 8, 2024 • Will maintain robust growth investment, including investment into human resources. Anticipate higher operating income, buoyed by an increase in profit achieved by providin
Slide 20: Sales and Income by Key Business Segment [Forecast]
Fiscal 2025: Sales and Income by Key Business Segment [Forecast] No change from estimates announced on May 8, 2024 Fiscal 2024 Fiscal 2025 [Millions of yen] YOY change actual estimate Net Sales 130,759 140,800 +10,040 [+7.7%] Offering Service Business Operating Income 7,659 8,600 +940 [+12.3%] Opera
Slide 21: Return to Shareholders
Fiscal 2025 First Two Quarters: Financial Highlights Fiscal 2025: Performance Forecast Return to Shareholders Progress on Medium-Term Management Plan (2024–2026) Reference Materials © 2024 TIS Inc. 21
Slide 22: Fiscal 2025: Return to Shareholders
Fiscal 2025: Return to Shareholders ・Implemented return to shareholders in line with total return ratio yardstick of 50%. ・No change to dividend plan for fiscal 2025. Interim dividend will be ¥34 per share, up ¥17 year on year. Basic Policy on Return to Shareholders under Medium-Term Management Plan
Slide 23: Progress on Medium-Term Management Plan (2024-2026)
Fiscal 2025 First Two Quarters: Financial Highlights Fiscal 2025: Performance Forecast Return to Shareholders Progress on Medium-Term Management Plan (2024–2026) Reference Materials © 2024 TIS Inc. 23
Slide 24: Medium-Term Management Plan (2024-2026) Overview
Medium-Term Management Plan (2024-2026) Overview Frontiers 2026 Basic policy • We will set frontier development as a fundamental strategy and strive for sustainable growth paralleling higher added value. We will strive to achieve changes in society and for corporate clients by enhancing quality acro
Slide 25: Service Strategies — Payment Business
Activities under Medium-Term Management Plan (Topics): Service Strategies — Payment Business ⚫ Expand target segment through development of light version of CreditSaaS. Currently promoting marketing activities. ⚫ Reinforce marketing activities for B2B model. Currently in progress. Contribution of pa
Slide 26: Market Strategies — Modernization
Activities under Medium-Term Management Plan (Topics): Market Strategies — Modernization ⚫ Anticipate booming demand for modernization of IT environments that support DX — the cornerstone of efforts to transform business. ⚫ Position modernization as growth driver in Industrial IT Business and Financ
Slide 27: Market Strategies — Transforming Business Process Management Segment
Activities under Medium-Term Management Plan (Topics): Market Strategies —Transforming Business Process Management Segment ⚫ Seek solid achievement of medium-term management plan targets through structural reforms designed to create leaner corporate structure. Promote strategy of concentrating on ke
Slide 28: Technology Strategies — Using Generative AI
Activities under Medium-Term Management Plan (Topics): Technology Strategies — Using Generative AI ⚫ Promote use of generative AI broadly on two fronts: client-directed business activities and internal operations. ⚫ Reveal of real results from adding high value to business activities is yet to come.
Slide 29: Enhanced Management Practices
Activities under Medium-Term Management Plan (Topics): Enhanced Management Practices ⚫ Constantly strive to improve value exchange with stakeholders, in line with materiality themes. Materiality themes Perspective/Policy on Measuring Progress and Key Results for First Half of Fiscal 2025 Create a so
Slide 30: Human Resources Strategies
Activities under Medium-Term Management Plan (Topics): Human Resources Strategies ⚫ Prepare human capital scenario to raise effectiveness of cycle for increasing added value through investment in human resources. ⚫ Constantly build stronger corporate talent, including project managers, who are criti
Slide 31: Efforts to Improve Quality and Productivity
Activities under Medium-Term Management Plan (Topics): Efforts to Improve Quality and Productivity ⚫ Given the appearance of unprofitable projects, the Group as a whole is working to strengthen quality control at the head office. From the second half of fiscal 2025, TIS will be sending more experts
Slide 32: Brand Strategies
Activities under Medium-Term Management Plan (Topics): Brand Strategies ⚫ Seek to be corporate group of choice to all stakeholders and will constantly strive to improve grand value. Epitome of the ideal to ”Make society’s wishes Empathy Chosen come true through IT.” Raise brand value so that it cont
Slide 33: Seeking Further Improvement in Corporate Value
Seeking Further Improvement in Corporate Value April 2008 July 2016 March 2023 Transition to TIS INTEC Group, with Turned Nihon ICS Co., Ltd., into IT Holdings Corporation (ITHD) established consolidated subsidiary through management integration an operating holding company April 2024 December 2009
Slide 34: Reference Materials
Fiscal 2025 First Two Quarters: Financial Highlights Fiscal 2025: Performance Forecast Return to Shareholders Progress on Medium-Term Management Plan (2024–2026) Reference Materials © 2024 TIS Inc. 34
Slide 35: Reference: Sales by Key Business Segment (External Clients)
Reference: Fiscal 2025 First Two Quarters: Sales by Key Business Segment *For external clients Second quarter Second quarter [Millions of yen] YOY change of fiscal 2024 of fiscal 2025 Offering Service Business 53,821 64,192 +10,371 [+19.3%] Software development 21,527 24,825 +3,298 [+15.3%] Operatin
Slide 36: Reference: Second Quarter Sales by Key Business Segment
Reference: Fiscal 2025 Second Quarter (July-September): Sales by Key Business Segment *For external clients First two quarters First two quarters [Millions of yen] of fiscal 2024 of fiscal 2024 Compared with estimate estimate actual Offering Service Business 28,893 33,241 +4,347 [+15.0] Software dev
Slide 37: Fiscal 2025 Second Half: Sales and Income for Key Business Segments [Forecast]
Fiscal 2025 Second Half: Sales and Income for Key Business Segments [Forecast] Fiscal 2024 Fiscal 2025 [Millions of yen] YOY change second half second half Net Sales 281,515 279,441 -2,074 [-0.7%] Operating Income 34,181 35,990 +1,809 [+5.3%] Operating Margin 12.1% 12.9% +0.8P - Net Income Attributa
Slide 38: Business Model by Segment
Business Model by Segment Offering Service Business [Supplement] Business composition of Offering Service Businesses Definition Others Payment services Configures services through own investment based on best practices accumulated groupwide Global* services and provides knowledge-intensive IT servic
Slide 39: New Strategic Domains, Desired Status
New Strategic Domains, New Strategic Domains, Desired Status ⚫ We will partially revise strategic domains, based on long-term business direction, with aim of developing business pursuits hinging on social issue resolution and co-creation and commercializing services that go beyond IT alone. Redefine
Slide 40: Handling these materials
Handling these materials These materials are protected by Japan’s Copyright Law and the Unfair Competition Prevention Law. Unless TIS has expressly given permission, these materials shall not be copied, duplicated, transcribed, reprinted or modified in part or in whole, inherent know-how shall not b