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http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jpCopyright© 2007 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/
November 8, 2007
INTAGE Inc.
FY2007 Half-Year Business Results Briefing
2http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 2
Contents
Plans, expectations, and strategies included in this document that are not historical facts are forward-looking statements related to INTAGE Inc. or the INTAGE Group decided by management based on currently available information. Accordingly, the reader should avoid placing undue reliance on these forward-looking statements. INTAGE cautions that a number of factors affecting the business could cause actual results to differ materially from these forward-looking statements. These include, but are not limited to, general economic conditions and changes or reforms in the industries in which our clients operate.
■ FY2007 Half-Year Business Results■ Mid-term Topics■ Future Growth Strategy
*Note: FY 2007 represents the fiscal year ended March 31, 2008.In this document, FY stands for INTAGE’s fiscal year, which begins April 1 and ends March 31.
http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jpCopyright© 2007 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/
■ FY2007 Half-Year Business Results
■ Mid-term Topics■ Future Growth Strategy
4http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 4
Operating Income
Ordinary Income
Financial Highlights (Consolidated)Both sales and operating income developed favorably.
(100 millions of yen)
(100 millions of yen)Sales(100 millions of yen)
Net Income(100 millions of yen)
133.2 141.1 151.1 13.0 13.913.5
12.7 13.3 13.8
7.3 8.0 7.2
200
150
100
50
0
20
15
10
5
0
20 20
1515
1010
55
00
Sep. 2005Sep. 2005 Sep. 2006Sep. 2006 Sep. 2007Sep. 2007
Sep. 2005Sep. 2005
Sep. 2005Sep. 2005
Sep. 2005Sep. 2005Sep. 2006Sep. 2006
Sep. 2006Sep. 2006
Sep. 2006Sep. 2006Sep. 2007Sep. 2007
Sep. 2007Sep. 2007
Sep. 2007Sep. 2007
5http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 5
FY2007 Half-Year Profit and Loss SummaryOperating income increased but fell short of the initial forecast.
(Millions of yen)
Sep. 2006 actual
Sep. 2007 forecast
Sep. 2007 actual
Year-on-year change
Sales 14,112 15,081 15,113 +7.1%
Operating income
Ordinary income
Net income
EPS
Sales
Operating income
Ordinary income
Net income
EPS
1,356 1,460 1,392 +2.7%
1,332 1,446 1,385 +3.9%
800 750 727 -9.2%
938 1,103 1,096 +16.8%
604 667 689 +13.9%
¥58.58 ¥64.70 ¥66.43 —
¥77.56 ¥72.68 ¥70.10 —
11,656 11,842 12,062 +3.5%
904 998 982 +8.7%
Consolidated
Non-consolidated
6http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 6
FY2007 Half-Year Balance Sheet and Cash Flow Summary
Consolidated balance sheet summary
Sep. 2006 Sep. 2007 Variance Remarks
1,257 Principally increases in cash and time deposits and inventories
Principally an increase in goodwill due to the subsidiarizationof TM Marketing
—
Principally increases in short-term bank loans and bonds due within one year
Primarily a decrease attendant on the reclassification of bonds due within one year
—
Principally an increase in retained earnings due to the recording of a net profit —
Principally an increase in the net assets of INTAGE Interactive
—
820
2,078
2,015
(1,473)
541
1,454
0
83
1,536
Current assets 10,171 11,429
Total liabilities 9,618 10,159
Shareholders’ equity
Valuation and translation adjustments
Minority interest
7,921
37
189
9,375
36
272
Total net assets 8,147 9,684
Fixed assets 7,594 8,415
Total assets 17,766 19,844
Current liabilities 5,936 7,952
Fixed liabilities 3,681 2,207
Consolidated cash flow summary Sep. 2006 Sep. 2007 Variance RemarksCash flows from operating activities 996 757 (238) Principally increases in income taxes paid and inventories
432 Principally a decrease in payments for business transfer
Principally an increase in proceeds from short-term bank loans
—
—
—
—
57
3
255
151
407
Cash flows from investing activities (705) (272)
Cash flows from financing activities (557) (499)
Effect of exchange rate changes on cash and cash equivalents
(0) 3
Net decrease in cash and cash equivalents (267) (11)
Cash and cash equivalents at beginning of period 2,569 2,721
Cash and cash equivalents at end of period 2,302 2,709
(Millions of yen)
(Millions of yen)
7http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 7
Contribution by Segment
Sales
Sep.2006 Sep.2007
64% → 66%
20%23%
14%13%→
→
■ Marketing Research and Consulting
■ System Solutions
■ Medical Solutions
Operating Income
85%
4%11%
66%20%
14%
11%
4%
85%
Sep.2007
→
→
→
15%
6%
79%
Sep.2006
■ Medical Solutions
■ System Solutions
■ Marketing Research and Consulting
8http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 8
Sales by SegmentSales from the Marketing Research and Consulting and Medical Solutions segments increased.
Sep. 2006 Sep. 2007
・Sales of custom research rose sharply.・Sales of panel research also increased.
・Structural transformation to implement a shift to integrated solutions progressed.
■ Medical Solutions
■ System Solutions
■ Marketing Research and Consulting
(Hundred millions of yen)
(+13.8%)
(-8.1%)
(+11.1%)
(Variance)
Total: 151.1Total: 141.1
40
80
120
160
90.4 100.4
32.2
29.6
18.421.0 ・Sales of data management and statistical
analysis services developed favorably.
・Sales of monitoring services increased but fell short of the planned level due to the discontinuation of a planned project.
(+7.1%)
9http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 9
Total: 100.4
Breakdown of Marketing Research and Consulting Sales
(Hundred millions of yen)
■ Custom ResearchConventional research (mail surveys, interview surveys, etc.)Internet research
■ Panel ResearchSRI (nationwide retail panel)SDI (nationwide pharmacy and drugstore panel)SCI (nationwide consumer household panel)SLI (nationwide female consumer panel)personal eye (individual consumer panel)Other panel surveysSep. 2006 Sep. 2007
Total: 90.4
(Variance)
(+26.1%)
(+2.8%)
100
50
58.2 59.8
32.240.6
Custom Research・Orders for major conventional research projects were obtained.・Sales of Internet research increased by 25.7%.・Sales of TM Marketing Inc. developed favorably.
Panel Research・Sales of personal eye doubled (+105.8%).・Sales of mainstay panel research were nearly unchanged.
(+11.1%)
10http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 10
Operating Income by SegmentAn increase in business premises costs and goodwill amortization due to M&A activities were absorbed and an increase in operating income achieved.
Sep. 2006 Sep. 2007
・Profit from custom research increased due to sales expansion.
・Profit from panel research decreased slightly.
・Profit from data management and analysis services increased on strong sales.
・Profit from monitoring services decreased due to the impact of project discontinuation.
・Amid ongoing structural transformation, profit was nearly at the planned level.
■ Medical Solutions
■ System Solutions
■ Marketing Research and Consulting
(Hundred millions of yen)
(-26.3%)
(-36.4%)
(+11.2%)
(Variance)
Total: 13.9Total: 13.5
15
10
5
0
11.9
0.5
0.7
2.01.5
10.7
(+2.7%)
http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jpCopyright© 2007 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/
■ FY2007 Half-Year Business Results■ Mid-term Topics■ Future Growth Strategy
12http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 12
Significant Change in the Business Environment
The competitor’s clients are switching to INTAGE’s SRI retail panel data.
INTAGE will secure stable infrastructure to sustain growth and profitability in fiscal 2007 and beyond.
INTAGE to guarantee investment capacity and social responsibility to construct a platform for manufacturer-retailer collaboration.
Toward the Next Stage
A shocking development for the research industry on a global scale having a great impact in Asia
Result will have a major impact on INTAGE’s business performance and future strategy
In the retail panel research sector, withdrawal of a major competitor from the Japanese market
13http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 13
INTAGE Forum 2007 (September 21, 2007)
Keynote Speech
Shopper Insight and Supply Chain DevelopmentManufacturer-Retailer Collaboration by Means of Information Sharing Promoted by Wal-Mart
A Next-Generation Retail Solution
14http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 14
Growth in the Custom Research Sector
Continuation of the Internet Shift
TM Marketing Inc. Becomes a Consolidated SubsidiaryHalf-year: Sales of ¥ 568 million and favorable profits
Sustained growth trend through implementation of the Internet shift25.7% growth in sales of Internet research
Start of adoption by major clients of market tracking by means of Internet research synchronized with panel data
Maintenance of the cooperative relationship with Yahoo JapanSharing of Yahoo! Research Monitor with Yahoo Japan Value Insight Corporation
Start of Internet research in China
15http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 15
Plan(Hypothesis)
Do(Verification through research)
Action(Marketing implementation)
Online, Discussion
Focus Group/In-Depth Interviews
Check(Analysis)
Online, Quantitative
CLT, In-home Interviews, HUT
Beijing
Shanghai
Guangzhou Blog interaction
Yes/No questionnaires
Access panel activation plan
Chinese and Japanese people may seem similar but are very different.That’s why… It is necessary to elicit true feelings and motivations and deepen understanding of the Chinese people.To that end… Information value creation through online resourcesFurthermore… Provision of comprehensive services by means of a hybrid research structure
Understanding of China through new information value by INTAGE online resources
Hybrid Chinese-Style Research Structure
Online Research in China
Development of the accesspanel into a source of
honest consumer opinions INTAGE Marketing
Consulting (Shanghai)
16http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 16
INTAGE Enters the Consumer Generated Media (CGM) Data Analysis BusinessTransfer of the Sanzi.com business (http://www.3zai.com) to INTAGE
Consumer data gathering and analysis in the Web 2.0 eraSecuring a beachhead to the Internet business
Sanzai.com Activities Flow and Business ModelWeb-based household bookkeeping for organizing expenditure information and
sharing useful information with others
DictionaryDB
ProductDB
StoreDB
GeographicalDB
Personal InformationDB
Create valuable database sets
Affiliation / Advertising
Marketing data / Promotion
Reward points, etc.
PC Mobile phone
Sanzai.com/ Sanzai.com applications
Update
Household account books
Site users can enjoy realSite users can enjoy real--time information sharing about time information sharing about products, stores, and other topics of interest products, stores, and other topics of interest
generated by other site usersgenerated by other site users
User A User B User C User…
Shopping
http://www.3zai.com/
http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jpCopyright© 2007 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/
■ FY2007 Half-Year Business Results■ Mid-term Topics■ Future Growth Strategy
18http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 18
Formulation of the Ninth Medium-Term Business Plan and 50th Anniversary Vision
Formulation of the Ninth Medium-Term Business Plan and 50th Anniversary Vision
Initiatives to Advance to the Next Stage
50th Anniversary Vision (2010 and beyond)
Eight Medium-Term Business Plan(2005 to 2007)
Ninth MediumNinth Medium--Term Term Business PlanBusiness Plan(2008 to 2010)
19http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 19
Positioning the INTAGE Group
Research firmsResearch firms
Internet businesses
Internet businesses
Information services companies
Information services companies
Consulting firmsConsulting firms
Business intelligence Internet research, consumer generated media
Web marketingIT and strategy consultingBusiness model convergence
Platform providers
Solutions providers
The Intelligence Provider
20http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 20
Key Concepts for the Next Stage
The Internet (Consumer Generated Media)
Global (China, Asia and beyond)
Healthcare
Toward Construction of Industry-Specific Platforms
21http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 21
What Are Platforms?
In computer terminology, “platform” means “A technical foundation that can be used across different applications or equipment or shared among manufacturers and the hardware and software that embodies it.”In recent years, in business terminology the term has come to be used in the sense of a broader foundation for various industrial activities.
“In industries or products that can be hierarchically treated, the substructure (foundation) that regulates the superstructure” (Prof. Yoko Takeda and Prof. Jiro Kokuryo)
Whereas “infrastructure” is regarded as hardware-centered and assumed to be provided for economies of scale and the public good, with “platforms” importance is placed on intangible value that can be achieved using a network or other means.
22http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 22
Business Models for the Next Stage
ClientClient
Business levelBusiness level
Integrated solutions levelIntegrated
solutions level
Technological level
(products)
Technological level
(products)
Company A
Company A
Business modelsfor FMCG
Business modelsfor FMCG
Business categoryor industry level
Business categoryor industry level
Company B
Company B
Company C
Company C
Business modelsfor non-FMCG
Business modelsfor non-FMCG
Company D
Company D
Company E
Company E
Business modelsfor healthcare
Business modelsfor healthcare
Company F
Company F
Incubation(business model)
Incubation(business model)
GG HH
FMCGFMCG Non-FMCGNon-FMCG HealthcareHealthcare
Integrated solutions(Sales force automation, customer relationship
management, brand management, business process solutions …)
Integrated solutions(Sales force automation, customer relationship
management, brand management, business process solutions …)
Marketing information technologies(Research techniques, data handling, systems development, data cleaning, warehousing, maintenance and operation …)
Marketing information technologies(Research techniques, data handling, systems development, data cleaning, warehousing, maintenance and operation …)
R&D(elemental
technologies)
R&D(elemental
technologies)
OthersOthers
Strategy building units
Realization of an integrated solutions through a combination of elemental technologies
Platform construction for each business model
23http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 23
A New Platform for Manufacturer-Retailer Collaboration in the FMCG Industry
Data Infrastructure Expansion
Systematization of Solutions
Formation of Public Consensus
Third-Generation Retail Information System
24http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 24
From Consumer Insights to Shopper Insights
Consumer Panel Integration and Expansion
Shared PlatformShared Platform
Shift to Census Data
Provision of Market Insights
Collaboration Support
Retailers
Manufacturers
Revelation of Store Use Behavior and In-Store Purchasing Behavior
25http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 25
Outlook for the Custom Research Sector
Continue to drive growth by means of Internet research.Anticipated second-half growth of 20%Sustainment of growth exceeding the industry average amid a market shakeout and realignment
Boost competitive strength in preparation for the next stage.
Proposal of a new research structure to clientsEstablishment of specialized expertise through Web technologies
Accelerate global development.Internet research-driven share expansion in ChinaEstablishment of a second business base in Asia in addition to China
26http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 26
Outlook for the Medical Solutions Business
Contract Research Organization (CRO) operation: ASKLEP Inc.Construction of a full-support structure for services ranging from development strategysupport to regulatory affairs and application consultingStrengthening of the anticancer agent clinical trial outsourcingBusiness expansion by means of the active utilization of electronic data capturing (EDC) and a response to clinical trial globalization
Site Management Organization (SMO) operation split-off and reestablished as a new company
Rigorous adherence to a stand-alone business structure through a corporate separationCreation of a specialty SMO that meets unmet medical needs
Growth of 15% or Higher in the Pharmaceuticals Development Support Sector
New SMO company
ASKLEP
INTAGE
SMO
SMO sub-subsidiary(subsidiary of ASKLEP)
New company name: ASKLEP MEDIO Inc. (provisional)
INTAGE
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Establishment of a Shared Service Center (April 2008)
1. Change the business activities of INTAGE Links.
2. Consolidate the Group’s back-office functions.
3. Achieve cost reductions and efficiency through business process standardization and systematization.
4. Assure business process quality through business process standardization and the pursuit of specialization.
Seek Greater Efficiency in Group-Level Management
New company name: INTAGE Associates Inc. (provisional)
INTAGE Associates(provisional)
INTAGE Links
INTAGE Group Companies
ASKLEP INTAGE Research
INTAGE Nagano
INTAGE Interactive
TM Marketing
INTAGE
28http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 28
Forecast for Fiscal 2007
FY2006Actual
FY2007 Forecast
Year-on-Year
ChangeSales 30,800 33,227
3,2793,2691,727
+7.9+11.9+12.5+6.2
Operating income 2,930Ordinary income 2,905Net income 1,626
Consolidated
(Millions of yen)
The forecast of business results has been prepared based on information currently available to the Company and includes a number of uncertainties. Actual results may differ from the projected figures.
Sales and profit from SRI in the second half are expected to increase due to a competitor’s withdrawal from the retail panel research business.
INTAGE anticipates fully achieving the initial forecast for the full year.
29http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 29
Intelligence Inspiring Marketing Innovation,
Empowering Business Solutions
Significant Change in the Business EnvironmentINTAGE Forum 2007 (September 21, 2007)Growth in the Custom Research SectorHybrid Chinese-Style Research Structure�Online Research in ChinaInitiatives to Advance to the Next StageKey Concepts for the Next StageWhat Are Platforms?A New Platform for Manufacturer-Retailer Collaboration in the FMCG IndustryOutlook for the Custom Research SectorOutlook for the Medical Solutions BusinessEstablishment of a Shared Service Center �(April 2008)
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