Business Brain Showaota Inc. · TSE:9658
Business Brain Showaota — H1 FY2024 Earnings Presentation
45 slides from Business Brain Showaota's earnings presentation, Nov 21, 2024
Slide 1: 1st Half Financial Results Briefing for the Fiscal Year Ended March 2025
1st Half Financial Results Briefing for the Fiscal Year Ended March 2025 Securities code: 9658 November 21, 2024 Business Brain Showa-Ota Inc. © Business Brain Showa-Ota Inc.
Slide 2: New Medium-term Management Plan (BBS2026) Progress Report
BBS Group New Medium-term Management Plan (BBS2026) Business Brain Showa-Ota Inc. Progress Report on the Medium-Term Management Plan 2024 - 2026 © Business Brain Showa-Ota Inc.
Slide 3: Table of Contents
Table of Contents 1. Highlights for the First Six Months (Interim) of FY2024 2. Medium-term Management Plan BBS2026 Reprint 3. BBS2026 KPI Plan Reprint 4. Performance and KPI Progress 5. Status of Primary Measures under the BBS2026 Growth Strategy © Business Brain Showa-Ota Inc. 3
Slide 4: Highlights for the First Six Months (Interim) of FY2024
Highlights for the First Six Months (Interim) of FY2024 Revenue, business profit and profit Profit attributable to Revenue Business profit owners of parent 18,064 million yen 1,175 million yen 992 million yen Year-on-year Year-on-year Year-on-year 6.3% ↑ 13.9% ↓ 92.5% ↓ Progression rate Progression
Slide 5: Business Model: Management accounting
[Business Model] Management accounting © Business Brain Showa-Ota Inc. 5
Slide 6: Basic Policy for Achieving Goal 2030
Reprint Basic Policy for Achieving Goal 2030 Growth Story to Achieve the Goal Back Office Comprehensive Supporter Total support for corporate back office operations by expanding our business domains around accounting Provide solutions for all phases from Business Design and Development to Operations
Slide 7: BBS2026 Sales Target
Reprint BBS2026 Sales Target Redesigning the growth scenario under GSX deconsolidation Goal 2030 (100 million yen) 1,200 M&A/New business sales Organic sales 100 billion yen 1,000 Combining M&A/new business for dramatic growth 800 580 600 GSX deconsolidation 487 413 400 342 200 0 FY2023 FY2024 FY202
Slide 8: BBS2026 KPI
Reprint BBS2026 KPI KPI have been set in the three areas of growth, capital efficiency, and investment, to implement strategic performance management. [Growth] [Capital efficiency] [Investment] Sales growth rate (including M&A) ROE M&A Investment 3 Year CAGR 20％ (including organic sales growth rate
Slide 9: Business Progress
Business Progress Revenue 100,000 Business profit (millions of yen) (millions of yen) 10,000 58,000 5,000 48,700 3,700 39,070 34,218 2,543 2,400 21,006 17,230 1,178 1,225 16,988 18,064 1,365 1,175 1,531 FY2023 FY2024 (now) FY2025 FY2026 FY2030 FY2023 FY2024 (now) FY2025 FY2026 FY2030 BBS2026 BBS2026
Slide 10: KPI Progress under BBS2026
KPI Progress under BBS2026 [Growth] [Investment] Sales growth rate (including M&A) M&A Investment 6.3% (-3.6% YoY) (organic sales growth rate of -0.3%) No significant progress Business profit margin on sales 6.5% (8.0% YoY) R&D investment BPO sales ratio 70 million yen 29.5% (23.2% YoY) (Investment
Slide 11: Primary Measures under the BBS2026 Growth Strategy
Primary Measures under the BBS2026 Growth Strategy Develop new Deepen existing business business /markets Consulting, SI BPO New solutions BBS Managed Services, Co., Ltd. ACT-iAP procurement and Sapporo BPOC Promotion purchasing BMS established established of value- template released creation Capita
Slide 12: Capital/Business Alliance Between BMS and NTT DATA INTRAMART
Capital/Business Alliance Between BMS and NTT DATA INTRAMART Corporation - Aim to expand business through total support from business process transformation to maintenance and operations - [Managed services provided by BMS] Aim to further expand business Users through capital and business alliance P
Slide 13: Establishment of New Sapporo BPO Center (July 2024)
Establishment of New Sapporo BPO Center (July 2024) A new BPO Center, the tenth domestic location for BBS Group, was established in Sapporo. It provides BPO services, focusing finance and accounting operations for major companies and aims to expand to a scale of 100 staff in the future. Building ext
Slide 14: BBS - New Product Release for the ACT Series
BBS - New Product Release for the ACT Series - Procurement/purchasing DX solution leading to increased corporate value purchasing procurement - Builds on A DX solution that combines the BBS Digital Process Automation Platform solution brand ACT with the intra-mart to increase corporate value Accel P
Slide 15: GHG Emissions Targets Base Year Change and New Scope 3 Reduction Target
GHG Emissions Targets Base Year Change and New Scope 3 Reductions Target Applied to initiative to obtain SBT certification (November) Changed base year for consistency with business performance Established Scope 3 reduction target to clarify reduction targets Main items Previous New standard Notes C
Slide 16: Topics
Topics © Business Brain Showa-Ota Inc.
Slide 17: Various Awards and Social Contributions
Various Awards and Social Contributions Primary Awards Primary Social Contributions “mcframe Award 2024” Project of the Year <Supported JAPAN Para-Ski Federation> ・Recognized for consulting and project execution capabilities for manufacturing business Supported operations and activities of the Para
Slide 18: Financial Highlights
Financial Highlights Hitoshi Uehara Senior Executive Officer, General Manager, Administration Division © Business Brain Showa-Ota Inc.
Slide 19: Highlights for the First Six Months (Interim) of FY2024
Highlights for the First Six Months (Interim) of FY2024 Revenue, business profit and profit Profit attributable to Revenue Business profit owners of parent 18,064 million yen 1,175 million yen 992 million yen Year-on-year Year-on-year Year-on-year 6.3% ↑ 13.9% ↓ 92.5% ↓ Progression rate Progression
Slide 20: Orders Received and Backlog of Orders
Orders Received and Backlog of Orders Orders received: +2.76 billion yen, +17.2% over previous first half, Backlog of Orders: +1.14 billion yen, +10.3% over previous first half Contributions included recovery in consulting and system development business and new BPO subsidiary Unit: million yen 39,7
Slide 21: Orders Received and Backlog of Orders By Segment
Orders Received and Backlog of Orders By Segment Consulting and system development (unit: million yen) Management services (BPO) (unit: million yen) 15,735 14,838 14,423 13,444 Orders 12,660 12,796 received 11,820 7,683 7,409 Backlog 6,174 6,501 Backlog 6,529 6,536 5,819 5,684 5,631 5,727 of orders
Slide 22: Orders Received and Backlog: Consulting and System Development
Orders Received and Backlog of Orders Consulting and System Development Orders received: +980 million yen, +7.3% over previous first half Consulting and system development (unit: million yen) • Overall strong start to current period despite challenges during previous period. 15,735 • Recovery of ord
Slide 23: Orders Received and Backlog: Management Services (BPO)
Orders Received and Backlog of Orders Management Services (BPO) Orders received: +1.78 billion yen, +67.1% over previous first half Management services (BPO) (unit: million yen) • Approx. 1.2 billion yen orders for newly added Twinkle • Contribution included major 400 million yen order for seven-yea
Slide 24: Orders Received and Backlog of Orders: Quarterly Change
Orders Received and Backlog of Orders Quarterly Change Pronounced due to increased orders in second quarter Consulting and system development (unit: million yen) Management services (BPO) (unit: million yen) 7,607 Orders 6,804 6,816 received 6,639 6,501 6,537 6,309 6,001 5,684 5,821 5,567 Backlog 5,
Slide 25: Revenue and Business Profit
Revenue and Business Profit Revenue: +1.08 billion yen, +6.3% over previous first half, Business profit: -190 million yen, -14.0% over previous first half Revenue (unit: million yen) Business profit (unit: million yen) / Profit margin 37,063 34,218 32,346 29,159 19,437 Second 17,230 half 17,309 15,0
Slide 26: Revenue and Business Profit: Quarterly Change
Revenue and Business Profit Quarterly Change (Accounting Period) Steady recovery in second quarter Revenue (unit: million yen) Business profit (unit: million yen) / Profit margin 9,326 9,146 8,738 8,531 8,457 8,084 9.7% 9.1% 8.0% 6.4% 5.6% 3.7% 823 848 728 542 450 327 2403/1Q 2Q 3Q 4Q 2503/1Q 2Q 240
Slide 27: Business Profit: Comparison with First Half of Previous Fiscal Year
Business Profit Comparison with the First Half of the Previous Fiscal Year Overall decline in profits due to inability of factors increasing profits to cover for rise in personnel costs, such as increased sales and decreased outsourcing costs 121 Unit: million yen 1,365 235 15 66 1,175 -37 -10 -67 -
Slide 28: Segment Net Sales and Profit
Segment Net Sales and Profit Segment net sales (unit: million yen) Segment profit (unit: million yen) Consulting and system development business Management services (BPO) business 15,235 13,967 13,279 9.5% 8.8% 13,193 7.9% 8.6% 8.0% 9.0% 12,683 12,848 11,402 8.5% 7.1% 6.9% 7.2% 7.6% 7.8% 6.0% 4.
Slide 29: Consulting and System Development Business: Changes by Sub-segment
Consulting and System Development Business Changes by sub-segment Segment net sales (unit: million yen) Segment profit (unit: million yen) Accounting system consulting and system development 9,450 9,330 System development for the financial industry 9,190 9,155 PLM support solutions 8,463 8,123
Slide 30: Consulting and System Development Business: Fluctuation Analysis
Consulting and System Development Business Fluctuation Analysis Accounting system consulting and system development Segment net sales (unit: million yen) • Challenging first quarter particularly in western Japan region due to 9,450 9,155 9,330 shortage of orders during previous first half. Sales r
Slide 31: Consulting and System Development Business: Quarterly Change
Consulting and System Development Business Quarterly Change Our core accounting system consulting and system development have recovered to the same level as the previous fiscal year. The PLM support solution has turned profitable Segment net sales (unit: million yen) Segment profit (unit: million ye
Slide 32: Management Services (BPO) Business: Changes by Sub-segment
Management Services (BPO) Business Changes by sub-segment Segment net sales (unit: million yen) Segment profit (unit: million yen) HR and payroll related outsourcing Outsourcing for global companies Outsourcing for foreign companies 2,164 Onsite BPO 1,799 1,797 1,820 1,572 1,605 1,444 1,479
Slide 33: Management Services (BPO) Business: Fluctuation Analysis
Management Services (BPO) Business Fluctuation Analysis Segment net sales (unit: million yen) HR and payroll related outsourcing • Sales and profits exceeded previous year due to new projects and price increases. • With regard to factors that reduced profits, the impact of the approx. 100 million
Slide 34: Management Services (BPO) Business: Quarterly Change
Management Services (BPO) Business Quarterly Change While sales for HR and payroll related outsourcing have increased, profits have recovered from the first quarter but have not yet reached the levels of the previous fiscal year Onsite BPO sales and profits increased due to the acquisition of Twinkl
Slide 35: (Reference) Revenue and Business Profit by Sub-segment
(Reference) Revenue and Business Profit by Sub-segment Cumulative total for Three months Three months the six months (Unit: million yen) ended June 30, 2024 ended September 30, 2024 ended September 30, 2024 Revenue Business profit Revenue Business profit Revenue Business profit Consulting and system
Slide 36: Consolidated B/S [Assets] (IFRS)
[Financial Highlights] Consolidated B/S [Assets] (IFRS) Assets (millions of yen) 〔22,785〕 〔28,296〕 〔30,393〕 〔44,804〕 〔44,404〕 Deferred tax assets Investments accounted for using the equity method 16,736 16,864 1,951 Goodwill 1,773 1,754 2,064 2,064 Trade and other receivables 6,408 5,239 4,349 Cash
Slide 37: Consolidated B/S [Liabilities and Equity] (IFRS)
[Financial Highlights] Consolidated B/S [Liabilities and Equity] (IFRS) Liabilities and Equity (millions of yen) 〔22,786〕 〔28,296〕 〔30,393〕 〔44,804〕 〔44,404〕 Lease liability (floating) 2,621 1,766 4,371 3,990 Trade and other payables 4,133 4,214 Lease liability (fixed) 2,379 2,328 Deferred tax liabi
Slide 38: Earnings Forecast
Earnings Forecast © Business Brain Showa-Ota Inc.
Slide 39: [Earnings Forecast] Consolidated Operating Results
[Earnings Forecast] Consolidated Operating Results Orders are steady and the full-year forecast remains unchanged. (millions of yen) Year ending Year ending Year ended March 31, 2025 March 31, 2025 Progress of March 31, 2024 Year-on-year full-year outlook comparison 1st half results Full-year outloo
Slide 40: [Earnings Forecast] Dividend
[Earnings Forecast] Dividend Interim dividend of 37 yen Annual forecast of 78 yen based on the basic policy of a dividend payout ratio of 40% 43.0% 40.0% 37.9% Dividend 30.0% 30.9% payout 27.0% ratio 27.3% 23.4% 23.3% 23.3% 18.0% Dividend 11 14 15 17.5 20 27.5 30 45 48 75 78 (Yen) FY2014 FY2015 FY20
Slide 41: Thank you for joining us today.
Thank you for joining us today. NOTE The earnings forecasts in this document are based on management’s assumptions and beliefs in light of the information available to it at the time of writing. Actual results may differ from these forecasts due to various factors and risks, and no assurances or gua
Slide 42: APPENDIX
APPENDIX © Business Brain Showa-Ota Inc.
Slide 43: [Company Profile]
[Company Profile] Name Name in English Business Brain Showa-Ota Inc. Headquarters 15F Hibiya Fort Tower, 1-1-1 Nishishimbashi, Minato-ku, Tokyo Business locations Tokyo, Osaka, Nagoya, Hamamatsu, Fukuoka, Sapporo, Niigata, Kumamoto, Kagoshima, Naha, Nago, Bangkok, Thailand; Ho Chi Minh City, Vietnam
Slide 44: BBS Group
BBS Group Let t he c om b i ne d st ren g t h s of ou r g rou p sol ve your m anag e m e nt ne e d s We combine the forces of our entire group to propose solutions to meet your management needs, thereby answering the needs of diverse clients. We will constantly evolve our group operations moving for
Slide 45: END
END © Business Brain Showa-Ota Inc.
Business Brain Showa-Ota — H1 FY2024 Earnings Presentation on 6ix