1H FY2014 Business Results - IR Pocketpdf.irpocket.com/C4326/GpH7/rvAE/xN28.pdf · osteoporosis, dementia, thrombosis and hypertension therapeutic medicine fields, and improve quality

Copyright© 2013 INTAGE HOLDINGS Inc. All Rights Reserved.

1H FY2014 Business Results

November 19, 2013

Six months ended September 30, 2013

FY2014: Fiscal year ending March 31, 2014

(TSE 4326)

INTAGE HOLDINGS Inc.

Copyright© 2013 INTAGE HOLDINGS Inc. All Rights Reserved. 2

Contents

1H FY2014 Results

1H FY2014 Progress and Future Issue

FY2014 Earnings Forecast




1H FY2014 Results


Consolidated Financial Highlights

(Billions of yen)

Net sales posted a record high, but were below targetOperating income, recurring profit and net income all declined year-on-year from deceleration in the drug development solutions business


Summary of Income Statements

1H FY2013Actual

1H FY2014Forecasts

1H FY2014Actual

Change YoY

Consolidated:

Net Sales 18,148 19,765 18,505 +2.0%

Operating Income 1,056 1,125 880 -16.7%

Recurring Profit 996 1,003 811 -18.5%

Net Income 499 485 363 -27.1%

EPS (Yen)* 24.81 24.14 18.09 ―

Non-Consolidated:

Net Sales 12,889 13,712 13,144 +2.0%

Operating Income 767 932 1,030 +34.2%

Recurring Profit 877 1,069 1,251 +42.7%

Net Income 533 709 873 +63.7%*On October 1, 2013 the Company implemented a stock split at a ratio of two shares for each share of common stock. The net

income per share is calculated assuming this stock split took place at the beginning of the previous consolidated fiscal year.

(Millions of yen)


Summary of BS and CFConsolidated Balance Sheets Mar. 2013 Sept. 2013 Change DetailsCurrent assets 18,269 17,844 -425 Decrease in notes and accounts receivable-trade

Noncurrent assets 11,128 10,990 -138 Decrease in lease assets, net

Total assets 29,398 28,834 -563 ―

Current liabilities 7,729 7,101 -628 Decrease in income taxes payable

Noncurrent liabilities 6,174 6,131 -43 Decrease in lease obligationTotal liabilities 13,904 13,232 -671 ―

Shareholders’ equity 15,358 15,219 -138 Decreases in retained earningsValuation and translation adjustments 74 267 +192 Deference of foreign translation adjustments

Minority interests 61 115 +54 Increase in new consolidated subsidiaries

Total net assets 15,493 15,602 +108 ―

Consolidated Cash Flows 1H FY2013 1H FY2014 Change DetailsCash flow from operating activities 1,458 990 -467 Year-on-year difference in social insurance premiumsCash flow from investing activities -811 -471 +340 Decrease in purchase of property and equipment

and intangible assetsCash flow from financing activities -275 -544 -268 Increase in repayment of short-term loans payable

Effect of exchange rate changes on cash and cash equivalents -9 87 +96 ―

Net increase/(decrease) in cash and cash equivalents 361 61 -299 ―

Cash and cash equivalents at beginning of year 4,599 5,906 +1,306 ―

Increase in cash and cash equivalents resulting from merger 109 ― -109 ―

Cash and cash equivalents at end of year 5,070 5,967 +896 ―

(Millions of yen)

(Millions of yen)


Net Sales by Segment

16.60

18.14 18.50

[16%]

[13%]

[71%]

[18%]

[12%]

[70%]

[16%]

[13%]

[71%]

(+19.9％)

(-2.0％)

(+9.0％)

(-8.9％)

(+7.9％)

(+3.7％)

<Syndicated Panel Data Services> Sales of SCI-personal (nationwide individual

consumer panel data) and i-SSP (INTAGE Single Source Panel) rose

New consolidated subsidiary JMIRI contributed to increased revenues

<Custom Research> Sales in global research in the ASEAN region

increased. INTAGE CHINA posted decreased sales as orders

remained slack again following the previous term.

Orders declined in both monitoring and data management and analysis services under intensified competition

Sales from new and existing orders increased favorably with the recovery in Japanese corporate investment in IT systems.

Drug Development Solutions

System Solutions

Marketing Research and Consulting

(Billions of yen)( ): Change YoY; [ ] Composition

1H FY2012 1H FY20131H FY2011


Breakdown of Sales of the Marketing Research and Consulting Segment

Custom ResearchTraditional Research Models (Mail surveys, Interview surveys, etc.), Internet Research

Syndicated Panel Services・ SCI-personal (nationwide Individual

consumer panel data)・ i-SSP (single source panel)・ SRI (FMCG retail panel data)・ SDI (syndicated OTC drugs panel data)・ SPI (In-store promotions effectiveness measurement)・ SLI (syndicated female consumer panel data)・JMIRI prescription information analysis service

[37%]

[63%]

[39%]

[61%]

[40%]

[60%]

(+16.5%)

(+4.7%)

(+6.0%)

(+2.2%)

11.69

12.7513.22 Marketing Research and

Consulting

(Billions of yen) ( ): Change YoY; [ ] Composition

1H FY2012 1H FY20131H FY2011


Operating Income by Segment

0.87

1.050.88

<Syndicated Panel Data Services> Profits rose on increased sales of SCI-

personal and i-SSP.<Custom Research> Profits increased from increase in sales for

global research. INTAGE CHINA posted decreased profits

on worsened order conditions and increased operating costs for restructuring.

Profits decreased from a decline in new orders and increased leading investment in international business.

Profits increased from higher sales with improved order circumstances.

Drug Development Solutions

System Solutions

Marketing Research and Consulting

11/9期 12/9期 13/9期

(Billions of yen)

1H FY2012 1H FY20131H FY2011


1H FY2014 Results




Basic Group Policy for FY2014

Establish overwhelming competitive advantages in priority fields

Ultimate customer relations and weapons to compete

Keywords toward Growth

Mobile

Global

Healthcare

Create markets and capture share together with DOCOMO InsightMarketing, Inc.

Group synergy strategy and rebuilding the story

Accelerate global development by creating new weapons to compete


Business Segments and Group Companies

12

Segments Group companies

Marketing research and consulting1. Syndicated Panel Services

• Consumer panel data• Retail panel data• Other panel data

2. Customized research• Internet research• Traditional Research Model (Interviews, qualitative research, MROC, CLT, etc.)

INTAGE Inc.INTAGE RESEARCH Inc.INTAGE NAGANO Inc.ANTERIO Inc.Japan Medical Information Research Institute Inc.PLAMED Inc.DOCOMO InsightMarketing, INC. (an equity method affiliate)

INTAGE CHINA Inc.INTAGE (Thailand) Co., Ltd.FTA Research and Consultant, LLCINTAGE INDIA Private LimitedINTAGE SINGAPORE PTE. LTD.Consumer Search Hong Kong Limited *PT. INTAGE INDONESIA *

System solutionsSoftware development and sales System administration, maintenance and management Data center administration

INTAGE Inc.INTAGE NAGANO Inc.

Drug Development SolutionsCRO・Clinical monitoring・Data management and analysis

ASKLEP Inc.RPS Asklep Inc.*ASKLEP CHINA Inc.ASKLEP TAIWAN Inc.ASKLEP KOREA Inc.

(21 companies, incl. INTAGE HLD and INTAGE ASSOCIATES)

(14 companies)

(Two companies)

(Five companies)

*Consolidated from this period


1H FY2014 Progress

[INTAGE Inc.]Cross media (i-SSP) succeeded in expanding windows in agencies and mass media, and sales increasedIn the consulting field, new business development overseas related orders were received, securing sales above the target Received large systems orders in the financial, travel and health information fields Competitive advantages in publication POS service by expanding data, and value improvement made users beyond 120 companies [ASKLEP Inc.]Large decline in new orders from intensified competition Joint venture with RPS delayed because of RPS acquisition and merger [DOCOMO Insight Marketing Inc.]Consumer panel trial adopted by multiple companies [INTAGE RESEARCH Inc.].Received large public orders from government organs which will contribute to sales from the second half [ANTERIO Inc.]While the market scale for Impact Track contracted from price competition, the simplified custom research TenQuick greatly contributed to revenues

Marketing research and consulting System solutions Drug development solutions

Overseas

Domestic

[INTAGE CHINA Inc.]Advancing restructuring of both business and human resources[INTAGE (Thailand) Co., Ltd.; FTA Research and Consultant, LLC]Somewhat sluggish conditions, but large orders are concentrated in Q4 for a recovery in the second half


• Begin joint business with Culture Convenience Club Co., Ltd. (CCC), which has the top sales in the bookstore industry.Begin providing daily data on 700 stores that are members of CCC’s TSUTAYA BOOK NETWORK to about 120 publishing companies that are members of the “HI-NET” INTAGE Publishing POS Service from October 1 (INTAGE is the first to transmit daily data from CCC)

POINTAddition of the number of books shipped and the number returned along with the actual sales

⇒ Data provision frequency increased from monthly to daily⇒ Makes it possible to grasp sales ratios and inventory ratios⇒ Data more directly tied to marketing

Actions for Q3 and Q4: Marketing Research and Consulting, System Solutions

14

Lifestyle Support

Publishing

Government Sector

Strengthen publishing POS service

Maintain strong orders and a large contribution to sales• Consignment of all business structure prior conditions confirmation works for the FY2014

Economic Census – Basic Survey and the FY2014 Census of Commerce (Ministry of Internal Affairs and Communications) (contract price: ¥499 million)

• FY2013 Basic Survey on the Communications Industry (Ministry of Economy, Trade and Industry) (contract price: ¥60 million)

• First half of the FY2013 Census of Manufactures (Ministry of Economy, Trade and Industry) (contract price: ¥60 million)

Expand sales with the smart phone research service “Smart” being released from this period

• With the release of the smart phone research service “Smart” the variation of research to match customer issues will increase. This will expand derivative research in a way that is positive for both basic research and ongoing research


Actions for Q3 and Q4: Global

Conduct organizational restructuring aimed at a V-shaped recovery next period• Prepare systems for response to healthcare-

related works• Expand sales in automobile-related research• Launch sales of POS data• Review Human Resources• Reorganize and downsize offices• Strengthen the governance structure

[R.S. Market Research Solutions]Established in India in 2002Independent market research company with a researcher network across all of IndiaHas bases at 10 locations in India

Conclude a business alliance contract with RSMRS Joint use of offices from next January - Strengthen collaboration structure

India

China Korea

Business Cooperation with Hankook Research

[Hankook Research]Independent market research company with four bases in South KoreaNumber four firm in South Korea, number one in domestic investment market researchSales of 56.5 billion won (about ¥5.1 billion)

Aim at the development of a strategic business partner relationship

Indonesia

Combine the diverse solutions of the INTAGE Group with DEKA’s knowledge of Indonesian consumer’s habits, lifestyles and values

Internationally develop the same types of solutions that INTAGE provides in Japan

Establish PT. INTAGE INDONESIA JV with DEKA Marketing Research


Actions for Q3 and Q4: Healthcare

16

ASKLEP ASKLEP ANTERIO ANTERIO JMIRIJMIRI

Certain execution of measures to break through the current conditions•Review suitable personnel and systems •Optimize work processes and man-hours•Revise the range of works•Expand the service line•Propose new service models•Full-scale launch of JV with RPS

Release of “Adherence” analytical tool for pharmaceutical companies•Enables analyses of patient drug use conditions (prescription continuation rate, number of days of administration) based on anonymous large-scale prescription data

Take over business from PharmaForesight (from Nov.)• Overseas research by domestic

companies and domestic research by foreign companies, and strengthening research in Asia

• Build up an infrastructure in Asia

Further grow custom research and achieve the long-term goal “from a Japanese leader to an Asian leader”

Adjust direction toward achieving the term-end targets and aim at differentiation versus competitors

Expand services into the osteoporosis, dementia, thrombosis and hypertension therapeutic medicine fields, and improve quality

[Example data uses by pharmaceutical companies]• Development of orally disintegrating tablets for people

with difficulty swallowing• Development of compound medicines with multiple

ingredients in one preparation• Development of programs to prevent people from

forgetting to take their medicines


Electronic Commerce

In-store promotions

Brand reviews

On-line communities

Social networks

Advertising

Campaigns

Referred customers

Homepage

New product development

Behavior after purchasing

• Consumer satisfaction

• Loyalty • Information

transmission

Behavior at the purchasing location

• Changes or strengthening of attitude

• Unplanned buying

Behavior leading to purchasing

• Media exposure • Information search• Collection for consideration

■

INTAGE Group Proposal “Cyclical Marketing”

“Cyclical” means・・・A comprehensive model of consumer purchasing and information behaviorComplete coverage of both consumer originated and information originated data, assuming marketing actions for every step of the cycle


What can be done using single source data?

18

Know the target

Know the media

TrackingResults measurement

Media planning

Advertising agencies

Lifestyle support

Mass communicationsPublishing

Automobiles


Launch of joint research to grasp the relationship between purchasing behavior and tweeting

19

m

y

Launch of joint research to grasp the relationship between consumers’ transmissionand receipt of information on Twitter and purchasing behavior～Single sourcing and analysis of Twitter tweet data and purchasing behavior data～

INTAGE Inc. (head office: Chiyoda-ku, Tokyo; President and Representative Director: NoriakiIshizuka), DOCOMO InsightMarketing, INC. (head office: Minato-ku, Tokyo, President andRepresentative Director Yoshiyuki Murakami) and NTT DATA Corporation (head office: Koto-ku, Tokyo; President and Representative Director Toshio Iwamoto) have initiated jointresearch to grasp the relationship between consumer’s Twitter information receipt andtransmission and their products and services purchasing behavior.The three companies will link and analyze multiple data regarding consumer purchasingbehavior, and aim at providing information and services to make corporate marketing moreeffective through research grasping the relationships among these data.

For Immediate Release: News releaseOctober 22, 2013

INTAGE Inc.DOCOMO InsightMarketing, INC.

NTT DATA CORPORATION


Integration of Monitors to Support Research for the Cyclical Era

Integration of two types of monitors from January 2014

Birth of the industry’s largest monitor force to support the

research of the future

Accelerating Response to Multiple Devices all at Once

Fresh collaborators with wide-ranging characteristics who are

not registered as existing questionnaire monitors

Full-time monitors who are deeply involved with the researchSolid response to every type of research

About one million INTAGE

Cue monitors

About 3.14 million

docomo Premier club

docomo premier club is a registered trademark of NTT DOCOMO.

Mighty monitorsExcluding duplications with Cue monitors

For clarification, Monitors means Panelists


1H FY2014 Results




FY2014 Earnings Forecasts

As of May 21 As of Nov. 19

FY2013 Actual

FY2014Forecasts

Change YoY

FY2014Forecasts

Change YoY

Marketing research and consulting

Net sales 28,327 31,103 +9.8% 31,523 +11.3%<Syndicated panel data services>

15,980 16,763 +4.9% 16,986 +6.3%

<Custom research> 12,347 14,340 +16.1% 14,537 +17.7%Operating income 2,860 3,100 +8.4% 3,255 +13.8%

System solutionsNet sales 4,964 5,148 +3.7% 5,328 +7.3%Operating income 151 180 +19.0% 250 +65.6%

Drug development solutions

Net sales 6,638 6,800 +2.4% 6,200 -6.6%Operating income 296 325 +9.7% 100 -66.2%

Consolidated

Net sales 39,930 43,052 +7.8% 43,052 +7.8%Operating income 3,309 3,606 +9.0% 3,606 +9.0%Recurring profit 3,213 3,383 +5.3% 3,383 +5.3%Net income 1,249 1,861 +48.9% 1,861 +48.9%

22

(Millions of yen)

The above performance forecasts were based on information available at the time they were prepared and incorporate variousuncertainties, so actual performance may differ materially from these projected figures.


Consolidated Numerical Targets (FY2014-FY2016)

FY2014 (Forecast)

FY2015 (Forecast)

FY2016 (Forecast)

Net sales 43.05 46.05 49.47

Change YoY +7.8% +7.0% +7.4%Operating income 3.60 4.00 4.50

Change YoY +9.0% +10.9% +12.5%

23

The above performance forecasts were based on information available at the time they were prepared and incorporate various uncertainties, so actual performance may differ materially from these projected figures.

(Billions of yen)


Basic Policy on Earnings Distribution

Year-endDividends

Payout Ratio(Consolidated)

DOE(Consolidated)

Yen % %

FY2012 50.00 37.9 3.6FY2013 50.00 40.2 3.4FY2014 (Forecast) 27.50 29.7 ─

24

(Note) On October 1, 2013 the Company implemented a stock split at a ratio of two shares for each share of common stock. The (projected) year-end dividend for the year ending March 2014 is stated considering the impact from this stock split.

INTAGE HOLDINGS’ basic policy is to distribute earnings in consideration of the balance between dividends and retained earnings, based on the consolidated results.

INTAGE HOLDINGS considers the return of earnings to shareholders to be one of its highest management priorities.

Copyright© 2013 INTAGE HOLDINGS Inc. All Rights Reserved. 25INTAGE HOLDINGS Inc.

Documents

1H FY2014 Business Results - IR Pocketpdf.irpocket.com/C4326/GpH7/rvAE/xN28.pdf · osteoporosis, dementia, thrombosis and hypertension therapeutic medicine fields, and improve quality