FY 11/3 First Half Results PresentationDIGITAL TECHNOLOGIES Corporation Consolidated for one month...
Transcript of FY 11/3 First Half Results PresentationDIGITAL TECHNOLOGIES Corporation Consolidated for one month...
FY 11/3 First HalfResults Presentation
http://www.dts.co.jp/
November 9, 2010
DTS Corporation
Contents
1. FY 11/3 First Half Results2. FY 11/3 Full Year Forecast
Sales and income forecasts included in this document are based on assumptions made on the basis of information currently available, including business trends, economic circumstances, clients’ trends, etc., and can be affected by various uncertainties. Actual sales and income may differ materially from the forecasts.
Caution
1. FY 11/3 First Half Results
Non-Consolidated Results
AmountRatio to sales (%)
YoY vs. initial plan
Net sales 17,614 - 109.6 % +1,548 103.6% +614
Gross profit 2,301 13.1% 143.2 % +694 97.9% -48
Operating income 750 4.3 % 768.7 % +652 100.0% 0
Recurring income 887 5.0 % 339.5 % +625 104.4% +37
Net income 512 2.9 % 272.3 % +324 146.5% +162
(Units: Million yen, %)
4
10,419
5,358
288
5,016
170
12,428
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
システム オペレーション プロダクト他
H22.3上
H23.3上(当期)
Sales by Service (non-consolidated)
5
Sales rose, driven by a sharp increase in the systems segment.
System (119.3% YoY)- Sales were strong, reflecting
orders for large projects in the financial sector and new customers.
Operation (93.6% YoY)- Sales were weak, as customers
reduced maintenance and operating costs by promoting in-house production.
Million yen
Operation28%
Products and other1%
System71%
System Operation Products and other
First half of year ended March 2010First half of year ending March 2011 (current fiscal year)
5,365
4,537
3,389
2,485
2,747
4,412
3,270
7,015
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
金融 運輸通信 サービス その他
H22.3上
H23.3上(当期)
3,649 3,405
2,554 2,854
8,757 8,160
10,4799,785
14,54713,136
H20.3 H21.3
金融
運輸通信
サービス
その他
(単位 : 百万円)上段 : 金 額
下段 : 構成比
26.2%
製造
36.4%
21.9%6.4%
9.1%
26.2%
35.2%
21.9%7.6%
9.1%
Sales by End Users (non-consolidated: System + Operation)
Finance sales rose sharply. Public sector sales were strong. Sales in Communications and Services declined slightly.
6
Finance (130.7% YoY)- The number of large-scale finance
projects increased sharply.- Electric bill projects expanded steadily.
Communications (97.2% YoY)- Frontline sales projects were solid.- Projects for certain carriers declined.
Services (96.5% YoY)- Demand did not recover, and sales
declined slightly.
Other (110.5% YoY)- Public sector (pensions and nursing
care) sales were strong.- Sales in the manufacturing industry
remained unchanged.
Million yen H22.3上H23.3上(当期)
Other16%
Communications25%
Services19%
Finance40%
OtherServicesFinance Communications
First half of year ended March 2010First half of year ending March 2011 (current fiscal year)
Gross Profit (non-consolidated)
7
Gross profit ¥2,301million (143.2% YoY; 13.1% of sales (+3.1 pts YoY))
The gross margin improved for the following reasons: (1) less unprofitable projects, (2) a rise in the labor utilization ratio,
and (3) a reduction in expenses.
H22.3上
H23.3上
13.1%
10.0%
2.5%
+3.1pts0.3%
0.9%-0.5%
4)Project orders with
less favorable terms
3)Reduction in
expenses
2)Rise in labor
utilization ratio1)Less unprofitable projects
First half of year ended March 2010
First half of year endingMarch 2011
SG&A expenses: ¥1,551 million(102.8% YoY; 96.9% vs. initial plan; 8.8% of sales (-0.6 pts YoY))
Operating Income, Recurring Income(non-consolidated)
8
Operating income: ¥750 million (768.7% YoY; 4.3% of sales (+3.7 pts YoY))
Recurring income: ¥887 million (339.5% YoY; 5.0% of sales (+3.4 pts YoY))
Rise in strategic investment (strengthening the sales force and new businesses)
+¥137 millionReduction as a result of cost-cutting efforts -¥95 million
Strategic investment outlays were conducted in line with the medium-term plan.SG&A expense was below the plan as a result of continued cost-cutting initiatives.
Consolidated Results
(Units: Million yen) AmountRatio to
sales (%)
YoY vs. initial plan
Net sales 29,151 - 115.4% +3,882 103.0% +851
Gross profit 3,888 13.3% 137.7% +1,064 97.2% -111
Operating income 933 3.2% - +859 103.8% +33
Recurring income 1,087 3.7% 612.9% +909 114.5% +137
Net income 453 1.6% - +717 151.1% +153
SG&A expenses: ¥2,954 million (107.5% YoY; 10.1% of sales (-0.7% YoY))
9
Group Company Results(Units: Million yen, %) Sales Operating income
Company name Amount YoY (%) vs. initial plan Amount
Ratio to sales (%)
YoY (%) vs. initial plan
DATALINKS Corporation 4,129 90.3% 107.2% 94 2.3% 55.6% 212.5%DIGITAL TECHNOLOGIES Corporation 3,329 - 105.5% 16 0.5% - [+50]
FAITEC Corporation 2,337 101.1% 101.2% 240 10.3% 142.8% 140.3%JAPAN SYSTEMS ENGINEERING Corporation
2,252 95.8% 96.0% 81 3.6% [+355] [-9]
SOUGOU SYSTEM SERVICE Corporation 501 98.9% 91.6% -99 - [-118] [-107]
KYUSHU DTS Corporation 389 79.3% 77.4% 5 1.5% 41.4% 31.1%
MIRUCA Corporation 212 103.1% 109.9% 13 6.6% 35.9% [+9]
ASTERISK INC. 67 107.6% 93.6% -3 - [-3] [-1]
Notes: Figures for each company are on a non-consolidated basis, so the total does not equal consolidated figures. Figures in brackets represent FY 11/3 amount minus FY 10/3 amount. 10
-0.8%
1.3%1.5%
4.8%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
1Q 2Q 1Q 2Q
H22.3 H23.3
営業利益率
13.0%
26.5%
8.2%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
H21.3 H22.3 H23.3
売上高・前年同期比
受注高・前年同期比
受注残高・前年同期比
Net sales and the operating margin have been increasing since the fourth quarter of the previous fiscal year.
11
Trends in Quarterly Results (consolidated)
Sales
Orders
Backlog
Operating margin
FY 09/3 FY 10/3 FY 11/3FY 10/3 FY 11/3
Q3 Q4 Q1Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q1 Q2
Progress of Initiatives (1): Strengthening the Sales ForceStrengthening the Sales Force
Integration of production and sales
divisions- Integrating the sales, planning, and development
divisions
- Sharing each customer’s problems and developing a medium- to long-term business plan for improvement for each customer
Development of account plans
- The order value (non-consolidated) rose 9.2% year on year.
- The rise in orders was driven by increases in orders from the existing customers. New customers were also developed.
Situation of orders
12
Started sales activities in accordance with the business environment
Made proposals to meet the needs of customers Aiming to enhance service quality and customer satisfaction
Eliminating unprofitable
projects
Standardization
- Unprofitable projects declined sharply (from ¥520 million to ¥100 million)
- Receiving additional orders for development in this fiscal year in association with unprofitable projects in the previous year Eliminating unprofitable projects
- Promoting standardization in compliance with international standards(development: CMMI; operation: ITSMS)
Project governance - Making projects visible
Promoting productivity improvement, standardization, and enhancement of project governance to eliminate unprofitable projects
Productivity improvementCost control
- Continuously improving the labor utilization ratio and operating efficiency
The number of unprofitable projects declined sharply.
13
Progress of Initiatives (2): Enhancement of SI CapabilitiesEnhancement of SI Capabilities
Developing new
businesses
Proposing new business
plans
- DaTaStudio (BI tool)- EAGISCORP (SaaS PC security)- WIH (total housing solution)
Housing history managementWIH PLAZAWon the Special Jury Prize of the 2010 Green IT Awards
Promoting cloud computing and alliances
- Cultivating engineers for Android- Promoting solution planning in the core businesses
Developing new businesses, promoting cloud computing and alliances
Planning and creating new businesses
14
Progress of Initiatives (3): Creation of New BusinessesCreation of New Businesses
Supporting global development of
Japanese companies
Offshore development
Expanding orders from local
corporations
- In China, helping corporate customers expand business internationally
- IT outsourcing by overseas affiliates of Japanese companies
- Promoting offshore development (in China and Vietnam) to enhance cost competitiveness
- Promoting the localization of products and solutions
Securing an offshoring system Seeking global development
15
Progress of Initiatives (4): Global DevelopmentGlobal Development
- Internal transactions rose sharply year on year, from ¥1.3 billion to ¥1.68 billion.
- Promoting in-house production within the Group to generate a profit and accumulate expertise in a challenging order environment
- Jointly receiving orders- Mutual-aid projects (Industrial & Public Systems
Business Headquarters, DL, FAITEC)- Integration projects (Financial Systems Business
Headquarters and FAITEC)- Cross-selling
-Merchandizing and the building of IT infrastructure (IT Integration Business Headquarters, DTC)
Rising internaltransactions
Synergy
Promoting synergiesSecuring a profit and accumulating expertise by boosting in-house production
16
Progress of Initiatives (5): Collective Strength of the GroupCollective Strength of the Group
2. FY 11/3 Full Year Forecast
Outlook for Business Environment in Second Half (comparison with initial plan)
18
Topic Change from initial plan
FinanceFinance
- LargeLarge--scale finance projects scale finance projects will progress as planned.
- The Company will start to offer integration integration projectsprojects in earnest.
- Inquiries about overseas projects and overseas projects and settlement projectssettlement projects will rise.
CommunicationsCommunications
- Frontline sales projects Frontline sales projects will be solid.- Certain carriersCertain carriers are curbing investment.- Demand for virtualizationDemand for virtualization will increase. (IDC
businesses)
ServicesServicesOtherOther
- Public sector business (medical care, nursing medical care, nursing carecare) will be strong.
- MutualMutual--aid aid projects and ERP are recovering.
Full Year Forecast (consolidated/non-consolidated)(Units: Million yen, %)
Non-consolidated Consolidated
AmountRatio to
sales (%)
YoY AmountRatio to
sales (%)
YoY
Net sales 36,000 - 106.1% +2,060 60,500 - 115.2% +7,996
Gross profit 5,500 15.3% 138.5% +1,530 9,500 15.7% 141.0% +2,764
Operating income 2,300 6.4% 247.5% +1,370 3,300 5.5% 282.0% +2,129
Recurring income 2,450 6.8% 207.0% +1,266 3,400 5.6% 249.1% +2,035
Net income 1,400 3.9% 204.7% +716 2,200 3.6% 790.6% +1,921
19Consolidated SG&A expenses: ¥6,200 million (111.4% YoY; 10.2% of sales (-0.4% YoY))
Full Year Forecast for Group Companies
20
(Units: Million yen, %) Sales Operating income
Company name Amount YoY (%) AmountRatio to
sales (%)
YoY (%)
DATALINKS Corporation 8,000 91.4% 201 2.5% 62.4%
DIGITAL TECHNOLOGIES CorporationConsolidated for one month only in the previous fiscal year
6,809 - 133 2.0% -
FAITEC Corporation 4,900 105.7% 476 9.7% 121.9%
JAPAN SYSTEMS ENGINEERING Corporation 4,624 91.3% 322 7.0% [+566]
SOUGOU SYSTEM SERVICE Corporation 1,200 116.1% 5 0.4% [+13]
KYUSHU DTS Corporation 1,100 107.2% 42 3.9% 117.4%
MIRUCA Corporation 415 104.1% 9 2.4% 32.0%
ASTERISK INC. 150 153.2% 3 2.0% [+24]
Notes: Figures for each company are on a non-consolidated basis, so the total does not equal consolidated figures. Figures in brackets represent FY 11/3 amount minus FY 10/3 amount.
0円
10円
20円
30円
40円
H19.3 H20.3 H21.3 H22.3 H23.3(予)
Dividend ForecastForecast dividend payment of ¥35 per share
(unchanged from previous year)
Note: DTS implemented a stock split (1:2) in October 2007. Previous dividend amounts have been adjusted retroactively.
21
Interim ¥15
Year-end ¥20 (F)Annual dividend Annual dividend of of ¥¥35 (forecast)35 (forecast)
FY 07/3 FY 08/3 FY 09/3 FY 10/3 FY 11/3 (F)
40
30
20
10
0
(Yen)