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1 Copyright© Cross Marketing Group Inc. All rights Reserved.
FY2019
3rd Quarter
Financial Results
[November 14th 2019]
2 Copyright© Cross Marketing Group Inc. All rights Reserved.
Contents
FY2019 Q3 Financial Results ・・・ 3
FY2019 Q3 Financial Results by Business Segment ・・・9
Revision of Financial Results Forecast for FY2019 ・・・14
Shareholder Return and Dividend Amount ・・・16
Reference Materials ・・・18
01.
02.
03.
04.
05.
3 Copyright© Cross Marketing Group Inc. All rights Reserved.
FY2019 Q3
Financial Results 01
4 Copyright© Cross Marketing Group Inc. All rights Reserved.
Calculation delay of large-scale project
in overseas research business
Calculation expected to be after 4Q
No revision for the FY2019
performance forecast due to the steady increase of each domestic
business
Delayed in calculating large-scale project of Kadence group
which was ordered in this term. Expected to be calculated
after 4Q.
Since the business performance of each domestic
business steadily increased, FY2019 performance forecast
was not revised.
The business performance of each domestic business
(Domestic research business, IT solution business and other
business) has grown steadily since 1st half, which resulted
revenue as 10,078 million JPY (YoY: 113.6 %).
Especially, Medilead, which is engaged in medical research,
IT solution business, and other businesses contributed to
the increase in revenue and profit of consolidated results.
Domestic business shows the steady growth ( Domestic Research Business, IT Solution Business,
and Other Business )
Q3: YoY 113.6%
FY 2019 Q3 Financial Results Executive Summary 01 FY2019 Q3
Financial Results
5 Copyright© Cross Marketing Group Inc. All rights Reserved.
Because each domestic business has grown steadily,
consolidated revenue resulted in 102.0% and operating profit resulted in 123.2% compared to the same period of the previous year.
01 FY2019 Q3
Financial Results
(Unit: JPY Million)
FY18.3Q
Actual FY19.3Q
Actual Change(YoY)
FY19 3Q Forecast(Achievement Ratio)
Amount Amount % Amount %
Revenue 12,577 12,797 101.8% 20,000 64.0%
Operating Profit
429 529 123.2% 1,250 42.3%
Ordinary Profit 382 430 112.7% 1,109 38.8%
Net Income 249 △926 - △490 -
FY 2019 Q3 Financial Results
6 Copyright© Cross Marketing Group Inc. All rights Reserved.
-200
0
200
400
600
800
1,000
1,200
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
15.1Q 15.2Q 15.3Q 15.4Q 16.1Q 16.2Q 16.3Q 16.4Q 17.1Q 17.2Q 17.3Q 17.4Q 18.1Q 18.2Q 18.3Q 18.4Q 19.1Q 19.2Q 19.3Q
(JPY Million)
【Operating Profit(Line:Right)】
(JPY Million)
IT Solution
Research business (Overseas)
Research business (Domestic)
Other Business 【Revenue (Bar : Left)】
FY2015 FY2016 FY2017 FY2018
Mainstay domestic research business steadily increased, and the revenue resulted in 108.3% compared to the same period of the previous year. IT solution(YoY 130.2%) and
promotion business(YoY 123.6%) also showed great performance.
Revenue by Business Segment
And Consolidated Operating Profit
01
FY2019
Consolidated Kadance Inc. and R&D
Listed 1st Section
of TSE
FY2019 Q3
Financial Results
7 Copyright© Cross Marketing Group Inc. All rights Reserved.
FY2019 Q3 Consolidated Profit and Loss Statement (Overview) 01 FY18.3Q
(Actual) FY19.3Q
(Actual) Change(YoY)
Revenue 12,577 12,797 101.8%
Costs of Goods sold 8,017 7,855 98.0%
Gross Profit 4,559 4,942 109.1%
Gross Profit Margin 36.3% 38.6% +2.4pt
SG&A 4,130 4,413 106.9%
Employee and Recruiting Fee 2,454 2,681 109.2%
Depreciation and Amortization 114 107 94.2%
Goodwill Amortization 139 129 92.8%
Other 1,422 1,496 107.4%
Operating Profit 429 529 123.2%
Operating Income Rate 3.4% 4.1% +0.7 pt
Ordinary Profit 382 430 112.7%
Extraordinary Profit 168 - -
Extraordinary Loss - △1,049 -
Corporate Tax and others 288 303 105.1%
Profit(Loss) attributable to non-
controlling interests (△:Loss) 13 4 31.3%
Net Income 249 △926 -
Calculation of Impairment Loss
on Goodwill and Decrease of
Goodwill Amortization
Regarding overseas research
business, although the revenue
remained almost unchanged
compared to the previous year,
outsourcing cost decreased and
gross profit margin increased since
the calculation of the large-scale
project delays to after 4Q.
Increase in Gross Profit Margin
Impairment loss on goodwill
oversea offices have summed
up in 2Q.
(Unit:JPY Million)
FY2019 Q3
Financial Results
8 Copyright© Cross Marketing Group Inc. All rights Reserved.
FY2019 Q2 Consolidated Balance Sheet (Overview)
01
Decrease in Goodwill Balance Due to the impairment loss of goodwill, net asset
decreased by JPY 959 million and equity ratio
decreased by 2.1 points compared to those in the
end of Dec. 2018.
Decrease in net asset and in equity ratio
Unit:JPY Million FY2018.
End of 4Q
FY2019.
End of 3Q Change
Current Asset 7,130 6,036 84.7%
Cash & Deposit 2,606 1,780 68.3%
Notes and
accounts
receivable-trade
3,311 2,693 81.3%
Others 1,213 1,563 128.9%
Non-current Asset 3,300 2,236 67.8%
Goodwill 1,481 307 20.7%
Stocks of
subsidiaries and
affiliates
184 89 48.0%
Others 1,634 1,840 112.6%
Total Assets 10,429 8,272 79.3%
Unit:JPY Million FY2018.
End of 4Q FY2019.
End of 3Q
Current Liability 4,298 3,477 80.9%
Note payable 1,573 1,406 89.4%
Short-term Debt 272 349 128.6%
Others 2,453 1,722 70.2%
Non-current
Liability 2,231 1,854 83.1%
Long-term Debt 1,983 1,594 80.3%
Others 248 261 105.0%
Net Asset 3,900 2,941 75.4%
Capital Stock/Legal
retained earnings etc. 1,144 1,297 113.4%
Others 2,756 1,643 59.6%
Equity Ratio 36.3% 34.2% △2.1pt
FY2019 Q3
Financial Results
Regarding overseas research business, the impairment loss of
goodwill was added up, and goodwill balance decreased, since
the estimated revenue of Kadence group companies, UK, US,
Indonesia, and Singapore were no longer expected.
9 Copyright© Cross Marketing Group Inc. All rights Reserved.
02 FY2019 Q3 Financial Results
by Business Segment
10 Copyright© Cross Marketing Group Inc. All rights Reserved.
Research (Domestic・Overseas)
IT Solution Others
Focus on digital marketing area
Domestic research contributes to the
revenue
Revenue and profit continue to grow by the
favorable progress of each subsidiary
New consolidation with SPT contributes to the performance
Success in obtaining projects and gross profit
management
Resulted in 212% increase in profit compared to the previous year
02
FY2018
3Q FY2019.
3Q Changes(YoY)%
Revenue
(Domestic) 6,616 7,167 +8.3%
Revenue (Overseas) 3,703 2,719 △26.6%
Segment Profit 1,245 1,250 +0.4%
(JPY Million)
FY2018
3Q FY2019.
3Q Changes(YoY)%
Revenue 1,817 2,366 +30.2%
Segment Profit 180 236 +31.2%
FY2018
3Q FY2019.
3Q Changes(YoY)%
Revenue 441 545 +23.6%
Segment Profit 25 78 +212.5%
6,616 7,167
3,703 2,719
1,245 1,250
0
200
400
600
800
1,000
1,200
1,400
0
2,000
4,000
6,000
8,000
10,000
12,000
FY2018
Q3
FY2019
Q3
1,817 2,366
180
236
0
50
100
150
200
250
0
500
1,000
1,500
2,000
2,500
FY2018Q3
FY2019Q3
441
545
25
78
0
20
40
60
80
100
0
100
200
300
400
500
600
FY2018
Q3
FY2019
Q3
※Revenue by business segment is external revenue and does not include internal revenue.
Revenue (Left :Bar) Segment(Right : Line Graph)
Comparison of Revenue and Profit
by Business Segment
FY2019 Q3
Financial Results
by Business Segment
(JPY Million) (JPY Million) (JPY Million) (JPY Million) (JPY Million)
11 Copyright© Cross Marketing Group Inc. All rights Reserved.
5,940 6,480 6,538 6,616 7,167
2,957 2,563 3,710 3,703 2,719
1,374 1,454
1,325 1,245 1,250
0
200
400
600
800
1,000
1,200
1,400
1,600
0
2,000
4,000
6,000
8,000
10,000
12,000
FY15 Q3 FY16 Q3 FY17 Q3 FY18 Q3 FY19 Q3
Domestic research business resulted in 108.3%
increase compared to the previous year. The
active development of new business in
mainstay Cross Marketing contributes to both the revenue and the profit.
(Unit:JPY Million)
Revenue (Left)
Segment Profit (Right)
Research Business 【Domestic / Overseas】
Domestic Research Business: Revenue JPY 7.17billion, YoY 108.3%
Overseas Research Business: Revenue and profit decreased due to the
large-scale project delay
Concerning overseas research business,
although the revenue decreased since the
calculation of large-scale projects delays to
after 4Q, they are on the track to recovery. This
is because the revenue from existing offices
overseas, except for the large-scale project,
increased compared to the previous year.
Medilead, which is engaged in Medical Research,
showed favorable progress due to active sales
worldwide and new service development.
Showed 41.7% increase in revenue and 109.3% increase in operating profit.
02 Business Status by Segment 【Research Business】
FY2018
3Q FY2019.
3Q Changes(YoY)%
Revenue (Domestic) 6,616 7,167 +8.3%
Revenue (Overseas) 3,703 2,719 △26.6%
Segment Profit 1,245 1,250 +0.4%
FY2019 Q3
Financial Results
by Business Segment
12 Copyright© Cross Marketing Group Inc. All rights Reserved.
1,133 1,348 1,365
1,817
2,366 112
100 97
180
236
0
50
100
150
200
250
0
500
1,000
1,500
2,000
2,500
FY15 Q3 FY16 Q3 FY17 Q3 FY18 Q3 FY19 Q3
Each company, led by mainstay Cross Communication,
keeps increasing revenue and profit
Revenue rises up to JPY 2.36 billion, YoY 130.2%
The revenue and profit on IT Solution
business has been increasing, due to the
consolidation with Supotant in 4Q, 2018,
and favorable progress of the existing
offices.
The revenue except for the impact by the
new consolidated company also keeps
double-digit growth, YoY 13%.
All four company in this segment are in
the black and contributes the whole
group’s profit to increase.
Business Status by Segment 【IT Solutions Business】
02
IT Solution Business
Revenue(Left)
Segment Profit(Right)
Unit:JPY Million
FY2018
3Q
FY2019.
3Q Change (YoY)%
Revenue 1,817 2,366 +30.2%
Segment Profit 180 236 +31.2%
FY2019 Q3
Financial Results
by Business Segment
13 Copyright© Cross Marketing Group Inc. All rights Reserved.
170
447 414 441 545
-50
19 32
25 78
-100
-50
0
50
100
150
200
250
300
-200
-100
0
100
200
300
400
500
600
FY15 Q3 FY16 Q3 FY17 Q3 FY18 Q3 FY19 Q3
Other Businesses
Thanks to the restructured operating system
and the aggressive sales for the
programmatic advertisement projects, which
were conducted in the 1st half, the revenue
showed 23.6% increase from the previous
year. In addition to the enhancement of
recruitment and education, trying to
accelerate the company growth by business
alliance and new service development.
The sales activity focused on profitability
helps to continuously improve the gross
profit margin. The segment profit rose up
about 53 million yen from the previous year.
Business Status by Segment 【Other Businesses】
02
Revenue rose up 23.6% from the previous year due to aggressive acquisition
of projects Gross profit margin showed great improvement
by strengthen sales structure and gross profit management
Revenue(Left)
Segment Profit(Right)
(Unit:JPY Million)
FY2018
3Q FY2019.
3Q
Changes (YoY)%)
Revenue 441 545 +23.6%
Segment Profit 25 78 +212.5%
FY2019 Q3
Financial Results
by Business Segment
14 Copyright© Cross Marketing Group Inc. All rights Reserved.
Revision of Financial Results
Forecast for FY2019 03
15 Copyright© Cross Marketing Group Inc. All rights Reserved.
Decided to keep the Forecast revised in Q2,
since the domestic business are progressing steadily
though the large-scale project delay occurred in the overseas business
FY19
Forecast Announcement in
Feb. 14th 2019
FY19
Forecast Revision in
Aug. 14th 2019
Comparison with
FY2019 forecast in
Feb. 14th 2019
FY18 Actual
Change % Amount %
Revenue 20,000 20,000 - - 17,492 114.3
Research Business
(Domestic) 10,220 10,220 - - 9,551 107.0
Research Business
(Overseas) 5,456 5,456 - - 4,742 115.0
IT Solution
Business 3,308 3,308 - - 2,542 130.1
Other Businesses 1,017 1,017 - - 656 155.1
Operating
Profit 1,250 1,250 - - 955 130.9
Ordinary
Profit 1,109 1,109 - - 840 132.0
Net Income 570 △490 △1,060 - 507 112.5
(Unit:JPY Million)
Revision of Financial Results
Forecast for FY2019 03 Financial Results Forecast for FY2019
※Revenue by business segment is external revenue which doesn’t include internal revenue.
16 Copyright© Cross Marketing Group Inc. All rights Reserved.
Shareholder Return
and Dividend Amount 04
17 Copyright© Cross Marketing Group Inc. All rights Reserved.
Shareholder Return
and Dividend Amount
04
Dividend Policy
Dividend forecast for FY2019:6.0 yen per share (Interim : 3.00 yen, Year-end : 3.00 yen )
0
20
40
60
80
0
2
4
6
8
2013 2014 2015 2016 2017 2018 2019
(Forcast)
13.5%
(%) (JPY)
Dividend per share(Left)
Consolidated dividend payout ratio (Right)
JPY 4.5
JPY 3.3
JPY 5.5
33.1%
19.5%
12.8%
JPY 6.0 JPY 5.5
21.2%
JPY 6.0 JPY 5.5
As the impairment loss of overseas business was one-time and special factor, the dividend amount shall be kept as planned.
"Determine a dividend amount with the aim of a consolidated dividend payout ratio of approximately 15%"
*The company split the shares into two parts on February 18, 2013, and into three parts on June 1, 2014, and a retroactive amount has been stated for the dividend amount per share. *With regard to past dividend amounts per share, these have been stated retroactively, upon rounding off to one decimal place.
18 Copyright© Cross Marketing Group Inc. All rights Reserved.
References 05
19 Copyright© Cross Marketing Group Inc. All rights Reserved.
FY2019 Q3 Topics
Start providing data which enables analyzing patient’s insights by building
Japan’s largest disease information panel for about 350,000 people
・Largest questionnaire data on disease (1)
・ Follow-up research on major
diseases that hospitalize (2) ・Includes information that medical
records or receipt data does not include (health, height, etc.)
05 Reference Materials
Characteristic of the panel (1) Large scaled survey for the general public
(2) Follow-up survey on
major disease
About 350,000
About 80,000
<Optional service>
Further survey
/Ad hoc survey
20 Copyright© Cross Marketing Group Inc. All rights Reserved.
Start business development and investiment to IT human resource field and launched a new brand
FY2019 Q3 Topics 05 Reference Materials
Fittio made a website which approches widely to the job applicants who have experiences in IT or Web industries. Three specialized web sites were also made, depending on the type of employment system as below:
◆Fittio Staff: Dispatching/Employment placement dispatiching ◆Fittio Career: Recruitment ◆Fittio Freelance: SES/Outsourcing
21 Copyright© Cross Marketing Group Inc. All rights Reserved.
05 FY2019 Q3 Topics
Start new service “Virtual Ad Value”
New system for grasping evaluation of
advertisements by using VR
Digital Promoting Service linked with
consumer data
Start to provide new system which has
high precision for evaluating
advertisements by showing real living
environment by VR(Virtual Reality)
By aligning with the image purchasing
application “ONE”, advertising
campaigns for targeted users are now
being available.
360Channel Co., Ltd.
https://corp.360ch.tv/
HOLIDAY STUDIO Co., Ltd
https://holiday-studio.co.jp/
<Partner Company> <Partner Company>
One Financial Co., Ltd https://corp.wow.one/
CEO:Soto Yamauchi
Establishment:May, 2016
Upload Images
and
earn Money
Reference Materials
22 Copyright© Cross Marketing Group Inc. All rights Reserved.
05
Cross Marketing Group
Cross Marketing Group Inc. Company
Name
Miki Igarashi President & CEO
June 3, 2013
Established due to the shift to a holding company,
Cross Marketing Inc. established on April 1, 2003
Established
JPY 646,709,000 Capital
2,092 (Including 546 temporary staff) No. of Employees
[Consolidated]
Research Business, IT solutions Business and others Business
Reference Materials
23 Copyright© Cross Marketing Group Inc. All rights Reserved.
History of Cross Marketing Group
Cross Marketing was established in Shibuya, Tokyo Apr
Main office transferred to Chuo-ku, Tokyo Jan
Cross Marketing enter into capital and business alliance with
EC Navi (Currently Voyage Group) and its subsidiary May
Received part of Index Inc.'s mobile solutions business
Cross Communication Inc. begins sales operations
Aug
Cross Marketing China Inc. established as a Chinese
subsidiary
May
Cross Marketing Group Inc. established and transferred
to holding company system
Jun
Acquired shares in Markelytics Solutions Private Limited
and MedePanel Online Inc.
Aug
Established Cross Marketing Asia Pte. Ltd. in Singapore Sep
Relocated the headquarters in Shinjuku-ku (Tokyo
Opera City Tower)
May
Acquired shares in KADENCE International Business
Research Pte. Ltd
Nov
Acquired Research & Development, Inc. as a
consolidated subsidiary
Feb
Cross Communication established a subsidiary,
Cross Propworks in Hakodate, Hokkaido
Apr
Medilead, Inc. established, D&M, Inc. established Jul
Listed on the Mothers Section of the Tokyo Stock Exchange Oct
2003
2004
2006
2008
2011
2012
2013
Cross Marketing ( Thailand ) Co., Ltd established
(Kadence International (Thailand) Co., Ltd.)
Cross Markeitng Thailand acquires share of Jupiter MR
Solution(Thailand)
Aug
Cross Communication acquired whole share of JIN
SOFTWARE Inc. (Currently, Cross J Tech)
Sep
Received Marketing business transferred by Japan
Publicity
Nov
Acquired whole share of Mixi Research Inc. and started
the business as “Shopper’s Eye, Inc.”
Apr
Listed to the first section of Tokyo Stock Exchange Mar
2014
2015
2016
2018
Cross Ventures Inc. established Apr
Cross Communication acquired whole share of
Supotant Co.Ltd,.
Oct
05 Reference Materials
24 Copyright© Cross Marketing Group Inc. All rights Reserved.
Marketing Research
Cross Marketing is the pioneer in online research
with full service marketing research capabilities.
R&D offers value added information (insights)
through market research planning, design,
implementation and consultation services.
Medilead is full service MR agency focused on
delivering insights derived from key stakeholders
in the healthcare industry.
Envirosell Japan offers analyses of shopper
behavior and business consulting services.
Service standards are evaluated from the
perspective of the consumer through the use of
mystery shoppers
Kadence International is a global insight agency
engaged in marketing research with offices in the
UK, the USA, and Asia.
Markelytics is a leading market research agency
providing end-to-end research solutions to clients
around the world.
Medical World Panel manages and operates
proprietary healthcare panels, and provides
insights from key stakeholders in the healthcare
industry.
Headquartered in Bangkok with marketing offices in
Singapore and India, Jupiter is the research hub to
the Asian markets-
IT Solutions
Cross Communication are IT specialists
engaged in the planning, development and
operation of mobile and smartphone oriented
websites and systems.
Cross Propworks offers development and
design of multi-device oriented websites and
systems, as well as a variety of data processing
services.
Specialists in systems development and
engineering services
Supotant is a engineer placement agency
oriented Web/EC
Others
D&M utilizes consumer data to offer cutting
edge marketing services.
Management support and Investment toward
start-up which has unique technology and
know-how in Internet industry.
05
Group Companies Reference Materials
25 Copyright© Cross Marketing Group Inc. All rights Reserved.
(Unit:JPY Million)
05
FY2014 FY2015 FY2016 FY2017 FY2018
Revenue 8,141 14,859 15,969 16,758 17,492
Research Business 6,663 12,902 13,373 14,058 14,293
IT Solutions Business 1,372 1,704 1,907 2,147 2,542
Other Business 106 253 690 553 656
Operating Income 536 1,233 1,342 727 955
Ordinary Income 521 1,185 1,267 597 840
Net Income 245 559 837 △703 507
Net Assets 2,897 3,945 4,474 3,598 3,900
Total Assets 7,872 9,970 9,932 9,564 10,429
Dividend per share (JPY) 4.5 6.0 5.5 5.5 5.5
EPS(JPY) 13.61 30.81 42.85 △36.00 25.92
BPS(JPY) 150.54 193.17 221.49 177.75 193.79
ROE(%) 9.5 17.2 20.7 △18.0 14.0
ROA(%) 8.8 13.3 12.7 6.1 8.4
Trends in Consolidated Results and Main Indicators
(FY2014-FY2018) Reference Materials
26 Copyright© Cross Marketing Group Inc. All rights Reserved.
Cross Marketing Group Inc.
https://www.cm-group.co.jp
Cautionary Statement regarding the Material
Cross Marketing Group does not guarantee the accuracy of the information contained
in this presentation, which reflects judgments made by Cross Marketing Group
management based on currently available information.
Given that the business environment may vary significantly in the future due to a
number of factors, please be aware that the performance and results in this
presentation may differ from Cross Marketing Group ’s actual performance and results.
For inquiries regarding one information contained in this presentation:
Cross Marketing Group Corporate Planning Unit
E-mail:[email protected]