FY2019 Financial Results€¦ · rounding “XICA magellan”, No1 MMM tool in Japan Initiatives in “Digital Marketing” Make it visible how much the results is improved with recognition

1 Copyright© Cross Marketing Group Inc. All rights Reserved.

FY2019

Financial Results

［February 17th 2020］


Contents

FY2020 Financial Results ・・・３

FY2019 Financial Results by Business Segment ・・・８

Revision of FY2019 and Focus Points in FY2020 ・・・13

Forecast for FY2020 ・・・21

Shareholder Returns and Dividend Amount ・・・23

Reference Materials ・・・25

01.

02.

03.

04.

05.

06.


FY2019

Financial Results 01


Revenue of Domestic Businesses YoY results in 111% Steady Expansion of Each Business Contributes to

Growth of Whole Group

FY2018 FY2019

Revenue YoY

111％

IT Solution Domestic Research Others(Digital Marketing)

Digital Marketing 113.1％

IT Solution 129.2％

Domestic Research 106.1％

<Changes by segment >

01 The FY2019 Ending Executive Summary① FY2020

Financial Results


01

Reach Goal of Forecast for FY2019 on Operating and Ordinary Profit

Up more than 30% YoY

Part of Sales for the Big Project of Overseas Research Counted

580 million(JPY) counted in 4Q

Revenue Increases for 16 Straight Years since Its Foundation

Revenue 18.5 billion(JPY), Up 6.2％ YoY

The FY2019 Ending Executive Summary② FY2020

Financial Results


FY18 result

FY19 result Forecast

(announced at August 14th 2018)

Amount ％(YoY) Amount ％(to forecast)

Revenue 17,492 18,580 106.2% 20,000 92.9%

Operating Profit

955 1,267 132.9% 1,250 101.5%

Ordinary Profit

840 1,150 136.7% 1,109 103.7%

Net Income 507 △477 － △490 －

（Unit：JPY million）

Revenue Increases for 16 Straight Years since Its Foundation

Much Higher Profits than Last Year

due to Steady Growth of Domestic Businesses

01 FY2019 Full Year Consolidated Financial Results FY2020

Financial Results


FY2019（result）

FY2018（result）

Operating Profit

955 （Profit margin 5.5％）

Operating Profit +312

Operating

Profit

1,267 （Profit margin 6.8％）

（Domestic・Overseas）

Gain of gross profit

by gain of sales

FY2019 Change on Operating Profit（YoY）

＋491

【Research】 Gain of gross profit by

gain of sales and the new

consolidated company

+205

【IT solution】

Gain of gross

Profit by

gain of sales

+41

【Others】

Gain of labor cost by gain

of personnel and the new

consolidated company

+264

【Expense】

Gain of other expenses

+187

【Expense】

01 FY2020

Financial Results

(Unit: JPY million)


02 FY2019

Financial Results

by Business Segment


8,336 9,212 9,074 9,551 10,132

4,565 4,159

4,982 4,742

4,421

2,374 2,256

1,880 1,943

2,249

0

500

1,000

1,500

2,000

2,500

0

2,500

5,000

7,500

10,000

12,500

15,000

FY15 FY16 FY17 FY18 FY19

Research【 Domestic・Overseas 】 Business Trend

（Unit） JPY million

Revenue（left）

Profit by segment（right）

Revenue and Profit Increase due to Steady Trend of Domestic Research in 4Q and Sales of the Big Project of Overseas Research

Business Status by Segment【 Research】 Financial Results

by Business Segment 02

MDL Up 33% in Revenue

Big Project Counted in 4Q

Main Company CM Firm in ４Q

Revenue (Domestic) Revenue (Overseas) Profit by segment

106.1％ 93.2％ 115.7％

Change(YoY)


IT solution Business Trend (Unit） JPY million

Revenue（left）


Up 29% in Revenue YoY by Closing Deals Continuously Revenue Increases for 8 Consecutive Years since It Started

02

SPT, New Consolidated Contributes to Revenue ※Amortization of Goodwill

Starts from 2019

HR Integrated into Fittio

The Number of Deals from both Existing and

New Favorable

1,704 1,906 2,147

2,542

3,284

192 175

254

292 274

0

50

100

150

200

250

300

350

0

500

1,000

1,500

2,000

2,500

3,000

3,500


Revenue(Domestic)

Pro f i t b y se g me n t

129.2％ 93.8％

Change ( YoY)

Financial Results

by Business Segment Business Status by Segment【 IT solution】


253

689

553 656

742

△ 56

74

30

59

106

△ 100

△ 50

0

50

100

150

△ 500

△ 250

0

250

500

750


Others Business Trend (Unit） JPY million

Revenue（left）


Up 13% in Revenue by Acquiring New Clients Favorably Profit by Segment Increase due to Gain of Revenue

02

Width of Deals Expand by Acquiring New

Clients

Added Value Increase by Tie-up and Developing

New Services

Aggressively Acquiring New Clients, Mainly Advertising Agency

211

UT revenue ※out of consolidated from FY17

113.1％ 180.3％

Change ( YoY)

Revenue (Domestic) Profit by Segment

Financial Results

by Business Segment Business Status by Segment【 Others】


55% 75%

Change of Rate on Revenue by Segment (2014→2019) 02

【Rate by segment (pie chart)】 ※refer to external revenue

Rate of Total Revenue except for Domestic Research Reaches to 45% from 25% due to Growth of Overseas Research since 2014,

IT solution and New businesses

IT solution

Overseas Research

Domestic Research

Others

Total except for Domestic Research

【2014】【2019】

25％

45％

6.1

2.1

10.1 8.4

Financial Results

by Business Segment

Unit: JPY billion


03 Revision of FY2019

and

Focus Points in FY2020


Open Overseas Offices in Thailand and the Philippines

Strengthen Digital Marketing and Link Big Date

Strengthen Value Chain in IT solution

(HR・BPO・BPR)

Provide Solutions like Consultant and Data

Science

Revision of FY2019

and

Focus Points in FY2020 03 Focus Areas from 2015 to

Expand Business Area and Invest in Growth Businesses like Digital and Medical during Existing Business Growing


0

1,000

2,000

3,000

4,000

5,000

2015 2016 2017 2018 2019 2020

(予想)

03

HR【 IT solution 】

Area Expansion, New Offices 【 Overseas Research】

Health care, New area 【 Domestic Research 】

Digital Marketing 【 Others 】

Average of Increase in Revenue from 2015 to 2019 is 85％

by New Businesses and Area Expansion since 2015

Contribution of Initiatives to Revenue since 2015

323

5,014

※The numbers in the chart is based on simple summation of subsidiaries revenue which lunched or had M&A after 2015

Revenue JPY million

3,748

Average of increase 85％

(2015～2019)

Revision of FY2019

and


(forecast)


FY2020

Keyword


Digital transformation(DX)


to Strengthen Profitability and Competitiveness of Existing Business and to Utilize Technology for Business Development

Market ing

Solut ion

Digital

transformation AI

Big Data

Digital

Marketing

RPA

Consultancy

Medical

03 Focused Initiatives in FY2020 and Growth Image

Increase Added Value for Digital Marketing

by Utilizing External Tools

Construct Internet Research Platform

by Investing in System

Data×AI ×Medical

Investing in HR/BPO/BPR

Revision of FY2019

and



03 Initiatives and Results of Each Segment

CMG Tie-up with XICA Co., Ltd. CM and D&M Start Service with It

rounding “XICA magellan”, No1 MMM tool in Japan

Initiatives in “Digital Marketing”

Make it visible how much the results is

improved with recognition and favorableness

going up 1% by surveying or acquiring

consumer insight daily or weekly

Provide committing internet advertisements

service decreasing 10% in acquiring cost

Revision of FY2019

and



Fittio provides job applicants having experiences of working at IT or Web industry with a wide range of opportunity through special web sites separated by form of employment not only an integrated service web site. ◆Staff : temporary／temporary dispatch of possible permanent workers ◆Career : recruitment ◆Free-lance : SES／outsorucing

03

Start to Invest Aggressively in IT personnel through New Brand “Fittio”

Initiatives in “IT solution”

Revision of FY2019

and


Initiatives and Results of Each Segment Initiatives and Results of Each Segment


Forecast for FY2020 04


Aim to Increase Revenue by Expanding Each Business Steadily and Achieve the Highest Profit since its Foundation by Reconstructing

High Added Value and High Profitability System

Forecast for FY2020 04 Forecast for FY2020 executive summary

FY20

Forecast

Compared to FY19 FY19 results

Up or Down Rate Amount

Revenue 19,570 ＋990 105.3% 18,580

Domestic Research 10,738 ＋606 106.0％ 10,132

Overseas Research 4,276 △146 96.7％ 4,421

IT solution 3,554 +270 108.2％ 3,284

Others 1,002 +260 135.1％ 742

Operating Profit 1,360 +91 107.3% 1,267

Ordinary Profit 1,330 +180 115.7% 1,150

Net Income 820 +1,297 － △477


05 Shareholder Return

and Dividend Amount


05

Dividend Policy

Dividend forecast for FY2020：6.2 yen per share (Interim：3.10 yen, Year-end：3.10 yen)

0

20

40

60

80

0

2

4

6

8

2013 2014 2015 2016 2017 2018 2019 2020

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 6.2 JPY 5.5

Year-end dividend in FY2019 are 3.0 yen as planned (Full-year: 6.0 yen)

For FY2020, aim to increase dividends by

0.2 yen to maintain stable profit distribution,

considering dividend policy and recent performance trend

15.1％

JPY 6.0

Shareholder Return

and Dividend Amount

"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. *For 2017 and 2019, dividend payout ratios are not described since net losses were recorded.


References 06


Unit：JPY Million FY2018 FY2019 YoY

Revenue 17,492 18,580 106.2%

Cost of Goods Sold 11,062 11,415 103.2%

Gross Profit 6,430 7,164 111.4%

Gross Profit Margin 36.8% 38.6% ＋1.8pt

SG&A 5,475 5,897 107.7%

Operating Profit 955 1,267 132.9%

Operating Income Rate 5.5％ 6.9％ +1.4pt

Ordinary Profit 840 1,150 136.9%

Extraordinary Profit 168 6 3.4％

Extraordinary Loss 5 1,107 －

Profit attributable

to owners of parent 507 △477 －

FY2019 Q4 Consolidated Profit and Loss Statement

(Overview)

Increase in Gross Profit Margin

Labor Cost increased due to New Consolidation

Recorded Impairment Loss of Goodwill

06 Reference Materials


Decrease in Goodwill Decrease in Long-term Debt

Unit: JPY Million FY2018.

End of 4Q

FY2019.

End of 4Q YoY

Current Assets 7,274 7,780 107.0%

Cash and Deposits 2,606 2,714 104.2%

Notes and

Accounts

Receivable - Trade 3,311 3,617 109.2%

Others 1,357 1,449 106.8%

Non-current

Assets 3,156 2,147 68.0%

Goodwill 1,481 287 19.4%

Others 1,675 1,860 111.1%

Total Assets 10,429 9,927 95.2%

Unit: JPY Million FY2018.

End of 4Q

FY2019.

End of 4Q YoY

Current Liability 4,298 4,773 111.1%

Notes Payable 1,573 1,562 99.3%

Short-term Debt 272 838 307.9%

Others 2,453 2,373 96.8%

Non-current

Liability 2,231 1,734 77.7%

Long-term Debt 1,983 1,488 75.1%

Others 248 245 98.9%

Net Assets 3,900 3,420 87.7%

Equity Ratio 37.4％ 34.5% △2.9 pt

FY2019 Q4 Consolidated Balance Sheet (Overview) 06 Reference Materials


Unit：JPY Million FY2018 FY2019 YoY

Net Cash Provided by

Operating Activities 1,035 637 61.5%

Net Income before Taxes 1,003 48 4.8%

Depreciation and Amortization/

Amortization of Goodwill 357 309 89.9%

Impairment Loss － 1,086 －

Income Taxes Paid ▲389 ▲604 155.3％

Others 63 ▲202 318.6%


Investment Activities ▲351 ▲302 86.2%


Financing Activities ▲99 ▲222 225.5%

Cash Dividends Paid ▲93 ▲118 127.4%

Others ▲6 ▲104 ー

Effect of Exchange Rate Change on

Cash Equivalents ▲27 ▲3 11.4%

Cash and Cash Equivalents 2,605 2,714 104.2%

Repayment of

Long-Term Debt

Stable Operating CF

Continues

FY 2019 Q4 Consolidated Statements of

Cash Flows (Overview) 06 Reference Materials


06 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 646,700,000 Capital

1,854 (Including 546 temporary staff) Number of Employees

[Consolidated]

Research Business, IT solutions

Business and others Business

Reference Materials


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.

Headquarter of the holding company is in

Singapore.

Markelytics is a leading market research

agency providing end-to-end research

solutions to clients around the world.

Headquarter is in Bangalore.

Medical World Panel manages and operates

proprietary healthcare panels, and provides

insights from key stakeholders in the

healthcare industry.

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.

Fittio offers and supports human

resources specialized in IT/ Web business

industries.

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.

06 Group Companies Reference Materials


Revenue

（Unit：JPY Million）

Research Business (Domestic)

Research Business (Overseas)

IT Solution Business

Other Business

Operating Profit

Ordinary Profit

Net Income

Net Assets

Total Assets

Dividend Per Share (JPY)

EPS (JPY)

BPS (JPY)

ROE (％)

ROA (％)

FY2015 4Q

14,859

1,233

1,185

559

3,945

9,970

8,336

4,565

1,704

253

6.0

30.81

193.17

17.2

13.3

FY2016 4Q

15,969

1,342

1,267

837

4,474

9,932

9,212

4,159

1,907

690

5.5

42.85

221.49

20.7

12.7

FY2017 4Q

16,758

727

597

△703

3,598

9,564

9,074

4,982

2,147

553

5.5

△36.00

177.75

－

6.1

17,492

955

840

507

3,900

10,429

9,551

4,742

2,542

656

5.5

25.92

193.79

14.0

8.4

FY2018 4Q

06 Consolidated Results and Major Indicators

(FY 2015-FY 2019)

18,580

1,267

1,150

△477

3,420

9,927

10,132

4,421

3,284

742

6.0

△24.12

166.19

－

11.3

FY2019 4Q

Reference Materials


（JPY Million）

【Operating Profit (Line：Right)】

（JPY Million）

IT Solution

Research Business (Overseas)

Research Business (Domestic)

Other Business 【Revenue(Line：Left)】

FY2019 FY2015 FY2016 FY2017 FY2018

Revenue by Segment and

Consolidated Operating Profit

-400

-200

0

200

400

600

800

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Consolidated Kadance Inc. and R&D

Listed 1st Section of

TSE

06 Reference Materials


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

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 Marketing 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

06

2014

2019 Supotant and Cross J Tech merged and change its trade

name to Fittio Inc.

Nov

Reference Materials


Cross Marketing Group Inc.

https://www.cm-group.co.jp

Cautionary Statement regarding the Material

For inquiries regarding one information contained in this presentation:

Cross Marketing Group Corporate Planning Unit

E-mail：[email protected]

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.

Documents

FY2019 Financial Results€¦ · rounding “XICA magellan”, No1 MMM tool in Japan Initiatives in “Digital Marketing” Make it visible how much the results is improved with recognition