Intage Holdings Inc. TSE:4326

INTAGE : Explanation Materials for Consolidated Financial Results for the Six Months Ended December 31, 20243072KB

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Financial results presentation for institutional investors and analysts

Explanation Materials for

Consolidated Financial Results for the Six Months Ended December 31, 2024

INTAGE HOLDINGS Inc.

Securities code: 4326

February 12, 2025

Summary of Consolidated Statements of Income

2

In the first six months, sales increased year on year, in part as a result of DOCOMO InsightMarketing, INC. (hereinafter, DIM) joining the Intage Group. Operating profit also improved, benefitting from business streamlining and measures to optimize costs including fixed cost reductions, in addition to the effects from the increase in sales. Profit attributable to owners of parent saw a significant jump due to a gain from the transfer of the CRO business.

Consolidated Statement of Income

(Millions of yen)

6 months ended

6 months ended

6 months ended

Change from

YoY

Dec. 31, 2022

Dec. 31, 2023

Dec. 31, 2024

previous year

Net sales

29,960

30,739

32,027

+1,288

+4.2%

30,245

Operating expenses

27,983

29,209

+1,036

+3.5%

1,781

Operating profit

1,976

1,530

+251

+16.4%

1,744

Ordinary profit

2,213

1,640

+103

+6.3%

Profit attributable to

1,651

1,015

2,017

+1,002

+98.8%

owners of parent

52.88

EPS (yen)

42.56

26.65

+26.23

-

©INTAGE GROUP

Factors Contributing to Changes in Operating Profit (First Six Months)

3

In addition to effects from the increase in sales, growth of costs was suppressed, reflecting a focus on profits. Investments were implemented as planned.

(Millions of yen)

Net sales

Costs and personnel expenses

Investment

The recent consolidation of DIM, coupled with growth in existing businesses, contributed to the increase in profit.

The rate of increase was held to a level below the growth rate of net sales.

Investments in the revamped SCI and other areas proceeded according to plan, around the same level as the previous year.

©INTAGE GROUP

Summary of Consolidated Balance Sheets and Consolidated Statements of Cash Flows

4

(Millions of yen)

Summary of Consolidated Balance Sheets

24/6

24/12

Increase/

Remarks

Decrease

Current assets

28,005

29,087

+1,082

Increased, reflecting increases in accounts receivable - trade and work in

progress, offsetting the decrease in cash and deposits

Non-current assets

17,313

16,636

-676

Declined following a decrease in investment securities

Total assets

45,318

45,724

+405

Current liabilities

11,890

12,355

+464

Increased, in part due to higher income taxes payable, and the switching of

long-term borrowings to short-term

Non-current liabilities

988

846

-141

Decreased, chiefly due to switching of long-term borrowings to short-term,

and the repayment of lease liabilities

Total liabilities

12,878

13,201

+323

Total net assets

32,439

32,522

+82

Increased due to an increase in retained earnings, despite a decline in

accumulated other comprehensive income

Total assets

45,318

45,724

+405

Summary of Consolidated Statements of

23/12

24/12

Cash Flows

Cash flows from operating activities

-1,626

482

Cash flows from investing activities

-300

1,400

Cash flows from financing activities

139

-1,776

Effect of exchange rate change on cash and cash

253

-20

equivalents

Net increase (decrease) in cash and cash

-1,534

86

equivalents

Cash and cash equivalents at beginning of period

12,536

11,940

Cash and cash equivalents at end of period

11,002

12,026

Cash flows from operating activities

Cash provided by operating activities increased, mainly reflecting a year-on-year increase in profit levels, in addition to increased collections from accounts receivable from the previous fourth quarter, and tax refunds for tax payments made in the previous fiscal year.

Cash flows from investing activities

Cash provided by investing activities increased reflecting proceeds from the sale of CRO businesses, despite cash used in consolidating of DIM.

Cash flows from financing activities

Cash used in financing activities increased, mainly due to dividend payments.

©INTAGE GROUP

Performance by Segment: Marketing Support (Consumer Goods & Services)

5

Net sales breakdown by product

(Millions of yen)

23/12

24/12

Y/Y

Operating

Other

1,421

Overseas

2,630

Co

1,177

CR (Other than Web)

1,982

CR-Web

4,205

Panel surveys

7,824

(Millions of yen)

23/12

+54%

+4%

+52%

+27%

+11%

-0%

2,184

2,741

1,795

2,509

4,671

7,788

24/12

profit margin

Net sales

19,242

21,691

+12.7%

Operating profit

75

227

+199.6%

1.0%

Financial Results Highlights

Mainly due to DIM newly joining the Group, sales in the CR-Web, Co and Other segments increased significantly.

CR (Other than Web) also performed strongly. Panel surveys remained around the same level as the previous year.

Overseas, Singapore and the United States posted results exceeding the previous year.

Other: Public-sector projects, RnI's CODE, etc.

Overseas: Sales from overseas subsidiaries (excluding healthcare)

Co: Communications area (i-SSP, Media Gauge, di-PiNK, etc.)

CR (Other than Web): Custom research through methods other than Internet surveys (such as qualitative research, offline survey, and outbound)

CR-Web: Internet surveys of custom research areas

Panel surveys: SRI+, SCI, etc.

Operating profit surpassed the previous year, absorbing investment costs, increased personnel expenses and upfront expenses form the launch of a synergy product with DOCOMO.

  • Sales from DIM, which was newly consolidated from this fiscal year, have been recorded across multiple products (CR-Web, Co, Other) shown under "Sales by Product" on in the figure on the left.

©INTAGE GROUP

Performance by Segment: Marketing Support (Healthcare)

6

Other Promotion

Net sales breakdown by product

277

1,470 312

-6%

1,382

(Millions of yen)

23/12

24/12

Y/Y

Operating

profit margin

Net sales

7,482

6,609

-11.7%

CRO

1,396

324

Operating profit

1,098

1,186

+8.0%

18.0%

CR

Panel surveys

(Millions of yen)

2,496 +9% 2,715

1,841 +2% 1,874

23/1224/12

Financial Results Highlights

CR successfully stepped up sales activities and drove overall results in the segment. Panel surveys also achieved steady results.

Promotion underperformed compared with the previous year due to delays in project creation for the education business at KYOWA KIKAKU, Ltd.

The strong performance of CR propelled operating profit beyond the previous year.

Other: Healthcare sales of overseas subsidiaries, etc.

Promotion: Sales from promotion-related business conducted by KYOWA KIKAKU Ltd.

CRO (Contract Research Organization): Post-marketingsurveillance, etc.

CR: Custom research mainly for pharmaceutical companies and medical device manufacturers

Panel surveys: SRI+, Impact Track, prescription DB, etc.

  • As noted in the disclosure dated June 17, 2024("Notice of Company Split(Incorporation-TypeCompany Split) and Transferring Shares of aNewly-IncorporatedCompany by a Consolidated Subsidiary Company, and Recording of Extraordinary Profit"), effective September 2, 2024 the CRO Business was transferred to Alfresa Holdings Corporation.

©INTAGE GROUP

Performance by Segment: Business Intelligence

7

Net sales breakdown by area

DX 1,143

+20% 1,376

BPO 1,056

-0%

1,055

SI 1,816 -29% 1,296

(Millions of yen)

23/1224/12

DX: Support for promotion of DX-related areas in companies

BPO: BPO services such as business process efficiency improvement, system maintenance and management, etc.

SI: System development, etc.

(Millions of yen)

23/12

24/12

Y/Y

Operating

profit margin

Net sales

4,014

3,726

-7.2%

Operating profit

355

367

+3.3%

9.9%

Financial Results Highlights

DX achieve a significant improvement over the previous year, driven by strong performance in the data integration and utilization business, which is positioned as key investment area, in addition to solid results with low-code development projects.

SI fell short of the previous year's results due to the absence of major projects that were underway during the same period of the previous year.

Operating profit exceeded the level of the previous year, benefitting from revised pricing and business streamlining to overcome the impact from declining sales.

INTAGE TECHNOSPHERE Inc. business lineup

INTAGE TECHNOSPHERE provides IT solutions. The company's business includes building and operating systems, and managing data centers.

Examples of solutions

Payment systems for travel agencies, health management support services, pharmaceutical

companies' sales information systems, publishing POS systems, trade area analyses, AI solutions.

©INTAGE GROUP

14th Medium-Term Management Plan Progress in Synergies with DOCOMO

©INTAGE GROUP

14th Medium-Term Management Plan: Basic Policy and Priority Issues

9

Basic Policy

Towards New Portfolio

as a Data + Technology Company

- Creation of new value -

Priority Issues

Group Strategy

Expanding business value with a goal of 2030 vision

Technology

Continue to take on the challenge of data utilization and DX

Strategy

support and cross industry boundaries

Data Strategy

Promote a data strategy that increases the value of the

company's data even as the market changes

Co-creation

Promote group co-creation to support the creation of new

strategy

value

Key message

We will take the declining and aging population and the development of the digital society as

opportunities to eliminate social losses and realize a convenient and affluent society.

We will create new value as a Data+Technology company that provides services that integrate MI and

BI, rather than providing stand-alone MI and BI functions.

©INTAGE GROUP

Management Policy - Synergy & Optimization -

10

Existing Businesses

Growth Businesses

Traditional marketing research such as panel

surveys and custom research

Future possibilities

Sales continue to increase slightly, but it is difficult to expect large growth.

Develop new services and solutions and

create synergies with DOCOMO

Future possibilities

Large investments will allow for growth in new areas.

Key points

Leading the

Key points

way to growth

Emphasis on

Offered value

while

Sales

Emphasis on

maintaining

profit

Improved value to

balance

expansion

results

Practice management

clients, price increases,

Generate projects in

Quick launch of new

focused on profit over

etc.

areas with growth

services.

sales

potential

Organizational Management Policy

Business Management Policy

Financial Policy

Eliminating individual optimization

Adoption of Base Profit*

Strengthening of capital strategy

• Aggressive elimination and consolidation of

• Adopted as an internal management

• Promotion of strategic investments

duplicated functions within the Group

indicator

• Financial management based on an

Promotion of Overall Optimization

• Managing investments separately and

awareness of the cost of capital

• Consolidation of common group themes such as

visualizing them as figures

DX promotion

* Base profit: Profit excluding one-time operating profit impact like investments, TOB costs, M&A costs, etc., and synergy business profit impact.

©INTAGE GROUP