Intage Holdings Inc. TSE:4326
INTAGE : Explanation Materials for Consolidated Financial Results for the Year Ended June 30, 20242187KB
Source: MarketScreener
Financial results presentation for institutional investors and analysts
Financial Results for the Year Ended June 30, 2024
INTAGE HOLDINGS Inc.
Securities code: 4326
August 9, 2024
Summary of Consolidated Statements of Income | 2 |
Sales increased due to sales growth at INTAGE Research, Inc., KYOWA KIKAKU, Ltd, INTAGE, Inc. and INTAGE TECHNOSPHERE Inc. However, profit decreased on higher personnel and overhead costs associated with strengthening the organization in anticipation of sales growth, increased investments aimed at business domain expansion, and expenses related to the capital and business alliance with NTT DOCOMO, Inc.
Consolidated Statements of Income
(Millions of yen)
Year ended | Year ended | Change from | Y/Y (%) | Forecasts as of | Difference from |
June 30, 2023 | June 30, 2024 | previous year | Aug. 2023 | forecasts | |
Net sales | 61,387 | 63,279 | +1,892 | +3.1% | 64,500 | -1,221 | |
Operating expenses | 57,601 | 59,989 | +2,387 | +4.1% | － | － | |
Operating profit | 3,785 | 3,289 | -495 | -13.1% | 4,000 | -711 | |
Ordinary profit | 4,073 | 3,543 | -530 | -13.0% | 4,300 | -757 | |
Profit attributable to | 3,505 | 2,456 | -1,048 | -29.9% | 3,000 | -544 | |
owners of parent | |||||||
EPS (yen) | 91.21 | 64.47 | -26.74 | － | 78.80 | -14.33 | |
ROE (%) | 11.4 | 7.8 | -3.6 | － | － | － | |
©INTAGE GROUP
Factors Contributing to Changes in Operating Profit
Although sales increased (1,892 million yen), this fell short of the forecast level. Operating profit decreased because the increase in personnel expenses investments (472 million yen) could not be fully covered.
3
(816 million yen) and
3,289
(Millions of yen) | Operating profit | Increase of | Personnel | ||||
Variable costs | Costs | Investments | Operating profit | ||||
In the previous year | net sales | expenses | |||||
Net sales
Costs and personnel expenses
Investment
- Despite INTAGE Research, Inc. and KYOWA KIKAKU, Ltd. securing major projects and INTAGE, Inc. and INTAGE TECNOSPHERE, Inc. achieving increased sales, group’s performance fell short of forecast levels.
- Personnel expenses due to an ahead-of-schedule increase in the size of the workforce in anticipation of higher sales, and outsourcing costs, including system usage fees increased.
- Expenses related to the capital and business alliance with NTT Docomo, Inc. rose.
- Investments in the revamp of SCI and the CX Marketing Platform increased.
©INTAGE GROUP
Quarterly Figures and the Business Environment | 4 | |
Sales increased YoY but fell short of the forecast due to difficult market conditions in consumer goods and healthcare
Panel research performed well throughout the year, but custom research struggled more than expected. It struggled to generate projects throughout the year and fell significantly short of projected figures. This was due to the tightening of budgets at some clients, in-house production by clients, a shift of budget authority overseas.
In the healthcare sector, although the CRO business struggled, the strengthening of the sales structure implemented two years ago has gradually been successful and is expected to recover.
Although the business environment continues to be mixed, we aim to achieve growth by playing to our comprehensive strengths with an emphasis on profit and a shift to growth businesses.
In the marketing research (consumer goods and services) business, we will continue to strengthen our integrated production and sales system focused on clients‘ priority strategies, and will aim for growth mainly through price increases, synergy projects with DOCOMO, and overseas businesses. We focus on profit-oriented management.
Research needs addressing business strategies such as price hikes and inquiries about overseas expansion remain strong.
Research projects to respond to changes such as price increases, price analysis and addressing changes in consumer behavior are on the rise. Consultation for global expansion also increased steadily.
©INTAGE GROUP
Performance by Segment: Marketing Support (Consumer Goods & Services) | 5 |
Net sales breakdown by product
Other | 3,956 | +21% | 4,792 |
Overseas | 5,355 | +0% | 5,374 |
Co | 2,685 | -9% | 2,435 |
CR other than Web | 4,406 | -5% | 4,197 |
CR-Ｗeb | 8,274 | +1% | 8,356 |
Sales increased, but profit decreased (Millions of yen)
23/6 | 24/6 | Y/Y | Operating | |
profit margin | ||||
Net sales | 40,153 | 41,176 | +2.5% | |
Operating | 1,643 | 1,160 | -29.4% | 2.8% |
profit | ||||
Panel surveys | 15,473 | +4% | 16,019 |
(Millions of yen)
23/624/6
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.)
Non-CR-Web:Custom research using methods other than Web research (qualitative research, offline research, outbound, etc.)
CR-Web:Internet surveys of custom research areas
Panel surveys: SRI+, SCI, etc.
- Panel surveys, which are a mainstay business, performed strongly.
- Custom research results were mostly unchanged year on year; however, progress is less than forecast, reflecting the fact that specific customers have tightened their marketing budgets.
- The field of communication was at a level lower than the previous year.
- In overseas business, sales were strong in Thailand and Singapore.
- Profit decreased, chiefly due to increased expenses reflecting an increase in investment expenses and in the size of the workforce in anticipation of higher sales. The cost increase was not offset by the increase in net sales, which was lower than forecast.
©INTAGE GROUP
Performance by Segment: Marketing Support (Healthcare) | 6 |
Net sales breakdown by product
Other | 654 | 674 | |
Promotion | 2,276 | +22% | 2,780 |
CRO | 3,180 | -17% | 2,628 |
CR | 4,422 | +3% | 4,540 |
Sales increased, but profit decreased (Millions of yen)
23/6 | 24/6 | Y/Y | Operating | |
profit margin | ||||
Net sales | 14,153 | 14,336 | +1.3% | |
Operating | 1,791 | 1,698 | -5.2% | 11.8% |
profit | ||||
Panel surveys | 3,620 | +3% | 3,712 |
(Millions of yen) | |||
23/6 | 24/6 |
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.
- Research sales reflected the lack of significant projects in the same period of the previous year, but custom research in the medical field has been trending toward a recovery. Overall sales were up from the levels seen in the previous year.
- The results of the CRO business are below the level a year earlier.
- In terms of profit, although there was a recovery in the research business and an increase in revenue for KYOWA KIKAKU, profits decreased due to the impact of reduced sales in the CRO business.
©INTAGE GROUP
Performance by Segment: Business Intelligence | 7 | |
Net sales breakdown by product | Increase in sales and profit | |
(Millions of yen) |
DX
1,915 +30%
2,492
23/6 | 24/6 | Y/Y | Operating | |
profit margin | ||||
Net sales | 7,080 | 7,766 | +9.7% | |
Operating | 350 | 431 | +23.3% | 5.6% |
profit |
BPO
2,125 -2%2,087
• | INTAGE TECHNOSPHERE, Inc. secured new large-scale projects in the SI, | ||||
SI | 3,040 | +5% | 3,187 | resulting in a higher level of sales than the previous year. | |
• | Sales were bullish in the DX support area and in the health information area. | ||||
• Profit rose due to sales growth.
(Millions of yen)
23/624/6
DX: Support for promotion of DX-related areas in companies
BPO and maintenance operations: BPO services such as business process efficiency improvement, system maintenance and management, etc.
SI: System development, etc.
INTAGE TECHNOSPHERE Inc. business lineup
INTAGE TECHNOSPHERE aims to provide IT solutions to INTAGE Group clients. 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
Summary of Consolidated Balance Sheets and Consolidated Statements of Cash Flows
8
(Millions of yen)
Summary of Consolidated Balance Sheets | Year ended | Year ended | Increase/ | Remarks |
June 30, 2023 | June 30, 2024 | Decrease | ||
Current assets | 26,412 | 28,005 | +1,593 | Increase due to increase in accounts receivable, etc., despite decrease |
in cash and deposits | ||||
Non-current assets | 17,978 | 17,313 | -665 | Decrease due to progress in depreciation of fixed assets |
Total assets | 44,391 | 45,331 | +940 | |
Current liabilities | 11,801 | 11,890 | +89 | |
Non-current liabilities | 1,584 | 988 | -596 | Decrease due to impact of lower liabilities for retirement benefits |
Total liabilities | 13,386 | 12,878 | -508 | |
Total net assets | 31,004 | 32,439 | +1,434 | Increase due to increase in retained earnings from net income |
Total assets | 44,391 | 45,318 | +927 |
Summary of Consolidated Statements of | Year ended | Year ended | |
Cash Flows | June 30, 2023 | June 30, 2024 | |
Cash flows from operating activities | 2,687 | 1,972 | |
Cash flows from investing activities | -618 | -705 | |
Cash flows from financing activities | -3,954 | -2,159 | |
Effect of exchange rate change on cash and | 145 | 296 | |
cash equivalents | |||
Net increase (decrease) in cash and cash | -1,740 | -596 | |
equivalents | |||
Cash and cash equivalents at beginning of | 14,277 | 12,536 | |
period | |||
Cash and cash equivalents at end of period | 12,536 | 11,940 |
Net cash provided by (used in) operating activities
Despite lower tax payments compared to the same period of the previous year, operating CF decreased due to lower profit levels and an increase in the number of items for which payment is not collected until the following month.
Net cash provided by (used in) investment activities
Net cash used in investing activities increased over the period, with year-on-year decline in proceeds from sales of investment securities offset by year-on-year decline in purchase of non-current assets.
Net cash provided by (used in) financing activities
CF from financing activities decreased mainly due to a decrease in expenditures for the acquisition of treasury stock
©INTAGE GROUP
Synergies with NTT DOCOMO
©INTAGE GROUP
Increasingly Complex Marketing Challenges | 10 |
As marketing issues become more complex due to changes in the social environment and technology, marketing partners that can provide advanced and integrated support are in demand.
Marketing Challenges | |||||
Building long-term customer relationships | Data-driven marketing optimization | ||||
in a declining population | in a digital society |
Responding to diversifying consumer
values, behaviors and needs
Marketing with continuity from | Responding to evolving technologies, |
strategy development to advertising, | including digital advertising and |
sales promotion, and CRM | generative AI |
A marketing partner that can provide advanced and integrated support for a wide range of issues from strategy development to advertising, sales promotion, and CRM is needed
©INTAGE GROUP