Information Meeting Materials for the First Quarter of the Fiscal Year Ending March 31, 2019 August 1, 2018

Transcription

1 Information Meeting Materials for the of the Fiscal Year Ending March 31, August 1, Copyright TIS Inc. All rights reserved.

2 Fiscal : Financial Highlights Fiscal Performance Forecast Reference Materials Copyright TIS Inc. All rights reserved. 2

3 Fiscal : Financial Highlights Against a favorable business backdrop, sales and income were up over the corresponding period a year ago, thanks to higher business volume and efforts to improve profitability. Net Income Attributable to Owners of the Parent Company YOY change + 4,689 million [+5.1%] YOY change million [+15.2%] YOY change million [+17.3%] 91,778 96,467 5,822 4,331 5,053 3, % 6.0% 4.0% Net income to net sales ratio 4.5% In sectors where IT investment is showing renewed growth, we emphasized accurate identification of client needs and were rewarded with higher sales, year-on-year. Higher gross profit, reflecting rise in net sales and profitability, more than enough to absorb increase in selling, general and administrative expenses, particularly costs associated with stronger response to restructuring. income thus rose year-onyear. Net income attributable to owners of parent company was up year-on-year, buoyed mainly by higher operating income. Copyright TIS Inc. All rights reserved. 3

4 Fiscal : Sales and Income for Key Segments-1 Service IT BPO YOY change + 4,262 million [+19.0%] YOY change million [+1.9%] 22,405 26,668 8,981 9,153 YOY change million [+22.4%] YOY change million [+42.7%] 1,206 1, % 5.5% Prior investment to reinforce business was basically covered by expanding payment settlement-related business and wider demand for ERP upgrades, leading to higher sales and income year-on-year. 3.1% 4.4% Amid a favorable shift in the business environment, concerted efforts, including a review of business profitability, led to higher segment sales and income. Copyright TIS Inc. All rights reserved. *Segment sales include intersegment sales. 4

5 Fiscal : Sales and Income for Key Segments-2 Financial IT Industrial IT YOY change + 2,256 million [+9.4%] YOY change million [+2.1%] 23,955 26,211 40,113 40,959 YOY change million [+11.7%] YOY change million [+18.2%] 2,053 2,294 1,357 1, % 8.8% Segment sales and income were up year-on-year, fueled by contribution from large credit card-related development projects and trend toward greater IT investment among core clients. Copyright TIS Inc. All rights reserved. *Segment sales include intersegment sales % 3.9% Trend toward greater IT investment among wide range of client groups, including energy-related companies, led to year-on-year increase in sales and income.

6 Fiscal : and Analysis [Billions of yen] Service IT [ ] BPO [ ] Financial IT [ ] Industrial IT [ ] Other [ ] Inter-segment [ ] [+5.1%] 5.05 Service IT [ ] BPO [ ] Financial IT [ ] Industrial IT [ ] Other [ ] Inter-segment [ ] [+15.2%] Copyright TIS Inc. All rights reserved. 6

7 Fiscal : Analysis, Increase/Decrease Reasons [Billions of yen] YOY Change 5.05 Increased sales Improved profitability Increased SGA expenses [+15.2%] Increased gross profit Copyright TIS Inc. All rights reserved. 7

8 Fiscal : Sales by Client Sector 19,033 21,230 22,905 16,300 [+16.8 %] 6,479 5,653 5,012 [ %] 5,697 6,412 [+13.4 %] 4,427 [ %] 10,051 10,494 Credit card Banking Insurance Other finance Assembly-based manufacturing 8,735 [+4.4 %] [- 3.8 %] Processing-based manufacturing 8,404 7,512 6,710 [+12.0 %] [+7.9 %] 7,911 [- 4.8 %] 7,533 3,692 [+9.6 %] Distribution Service Public institutions Others 4,046 < > 23.1% 8.6% 4.0% 7.3% Net Sales Breakdown by Client Sector 9.5% 17.8% 11.0% 7.1% 6.2% 5.5% Credit card Banking Insurance Other finance Assembly-based manufacturing Processing-based manufacturing Distribution Service Public institutions Others Financial sector: 36.4% Industrial sector: 50.9% Public sector: 8.6% Other: 4.0% < > 23.7% 4.2% 7.8% 7.8% Net Sales Breakdown by Client Sector 8.7% 19.7% 10.9% 5.9% 6.7% 4.6% Financial sector: 36.9% Industrial sector: 51.1% Public sector: 7.8% Other: 4.2% Copyright TIS Inc. All rights reserved. 8

9 Fiscal : Order Status (Software Development) Order volume in the first quarter was down slightly from the balance at the end of fiscal and year-on-year, but this is likely due to a reactionary drop in large financial IT projects and a change of order time. On a market basis, order volume was brisk. Order received during first quarter YOY change - 1,268 million [-2.4%] Order backlog at end of first quarter YOY change million [-0.8%] 52,047 50,779 68,922 68,365 10, Service IT 13, ,623 13,981 [+8.7%] [+ 4.0%] -3,457 14,228 [-24.3%] 10,771 Financial IT -2,864 20,300 17,436 [-14.1%] Service IT Financial IT 1,256 27,128 28,384 [+4.6%] Industrial IT +1,764 35,184 36,948 [+5.0%] Industrial IT Copyright TIS Inc. All rights reserved. 9

10 Changes in Orders Received (Software Development) 98,648 [+10.4 %] 108,697 [- 1.6 %] 104,569 [+ 6.0 %] 103,737 [- 4.6 %] 106,996 [+2.3 %] 112,229 [+8.2 %] 53,369 [+11.8 %] 61,621 [+6.1 %] 53,437 [+0.1 %] 57,419 [- 6.8 %] 54,949 [+2.8 %] 63,427 [+10.5 %] 45,279 [+8.7 %] 47,076 [ %] 51,133 [+12.9 %] 46,318 [- 1.6 %] 52,047 [+1.8 %] 48,802 [+5.4 %] 50,779 [- 2.4 %] 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half Fiscal 2016 Fiscal 2017 Fiscal Fiscal Second quarter of first half First quarter of first half Fourth quarter of second half Third quarter of second half Copyright TIS Inc. All rights reserved. * Percentage figures in columns indicate increase or decrease from the previous term. 10

11 Changes in Orders Received (Software Development, by Segment) Service IT 21,389 10,699 10,690 21,368 11,914 9,454 11,623 [+8.7%] Financial IT 31,373 17,145 14,228 39,590 24,013 15,577 10,771 [- 24.3%] 54,233 51,272 Industrial IT 27,105 27,128 27,500 23,772 28,384 [+4.6%] 1st Half 2nd Half 1st Half 2nd Half Fiscal Fiscal Second quarter of first half First quarter of first half Fourth quarter of second half Third quarter of second half Copyright TIS Inc. All rights reserved. * Percentage figures in columns indicate increase or decrease from the previous term. 11

12 Fiscal : Financial Highlights Fiscal Performance Forecast Reference Materials Copyright TIS Inc. All rights reserved. 12

13 Fiscal : Performance Forecasts-1 Amid brisk business conditions, absorb reactionary drop in large projects and work toward higher sales and higher income. Vigorously invest into growth domains and forte fields to facilitate structural transformation described in new medium-term management plan. No change to initial targets Net Income Attributable to Owners of the Parent Company YOY change + 8,352 million [+2.1%] YOY change + 2,257 million [+6.9%] YOY change + 2,680 million [+13.0%] 405, ,000 32,743 35,000 23,300 20, % 8.5% 5.1% Net income to net sales ratio 5.6% Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Focusing on service IT and industrial IT Higher sales effect and ongoing effort to Increase in operating income and higher demand, strive to expand business through boost productivity. Expect to absorb higher extraordinary income should deliver year-onyear accurate responses to IT investment needs of cost burden associated with structural improvement in income attributable to clients. Expect year-on-year increase in sales. transformation, including embrace of prior owners of parent. investment approach. Should lead to year-onyear Copyright TIS Inc. All rights reserved. increase in operating income. 13

14 Fiscal : Performance Forecasts-2 [Yen] Seeking to exceed initial 10% ROE target. Net Income per Share ROE YOY change: [+13.9%] YOY change: % % 10.2% [Current calculations] Fiscal Fiscal Fiscal Fiscal Anticipating year-on-year improvement, paralleling higher net income attributable to owners of parent. (Raised from initial estimate, paralleling treasury stock purchase) Anticipating further growth, mainly due to higher profitability. Copyright TIS Inc. All rights reserved. 14

15 Fiscal : Key Segment Performances [Forecast] -1 Service IT BPO YOY Change: + 2,397 million [+2.4%] YOY Change: + 743million [+ 1.9%] 100, ,000 38,257 39,000 Fiscal Fiscal Fiscal Fiscal YOY Change: million [+2.0%] YOY Change: million [+ 22.1%] 8,139 8,300 1,638 2, % 8.1% Fiscal Fiscal IT investment activities in growth fields, such as the cloud and networks, as well as definite efforts to expand payment settlement business and ERP demand will absorb cost burden of prior investments and should lead to higher sales and income. 4.3% 5.1% Fiscal Fiscal Promote enhanced profitability through restructuring, by integrating BPO business locations and ensuring thorough profitability management, and through a shift to high-level, combined BPO services. Sales and income should increase year on year. Copyright TIS Inc. All rights reserved. *Segment sales include intersegment sales. 15

16 Fiscal : Key Segment Performances [Forecast] -2 Financial IT Industrial IT YOY Change: million [+0.8%] YOY Change: + 3,515million [+ 2.0%] 106, , , ,000 Fiscal Fiscal Fiscal Fiscal YOY Change: million [+4.1%] YOY Change: million [+ 8.6%] 11,331 11,800 11,509 12, % 11.0% Fiscal Fiscal Steady execution of big projects, business expansion through stronger connections to primary clients, including those in credit card, banking and insurance sectors, and proposals anticipating client needs, and higher productivity should lead to higher sales and income year on year. 6.5% 6.9% Fiscal Fiscal Will absorb reactionary drop in big projects, mainly by promoting high-value-added services underpinned by consultations and enhanced upstream operations and by improving productivity. Should lead to higher sales and income year on year. Copyright TIS Inc. All rights reserved. *Segment sales include intersegment sales. 16

17 Fiscal : Financial Highlights Fiscal Performance Forecast Reference Materials Copyright TIS Inc. All rights reserved. 17

18 Fiscal First Half: Sales and Income for Key Segments [Forecast] Net Income Attributable to Owners of the Parent Company 13,591 14, , ,000 9,300 8,603 +6, [+3.2 %] [+3.0 %] +697 [+8.1 %] 7.0% 7.0% 4.4% 4.6% First Half First Half First Half First Half First Half First Half Services IT BPO Financial IT Industrial IT 47,790 48,800 +1,009 [+2.1 %] 18,313 18, [+2.7 %] 50,625 54,200 +3,574 [+7.1 %] 85,976 87,600 61,930 63,000 ( 計画 ) +1,623 [+1.9 %] 3,053 3, % 6.4% +47 [+1.5 %] % +252 [+42.1 %] 4.5% 4,845 5, [+3.2 %] 9.6% 9.2% 営業利益 Income 4,790 4,850 5,179 4, ( 計画 ) 5.6% 営業利益率 [+1.2 %] 5.5% Copyright TIS Inc. All rights reserved. *Segment sales include intersegment sales. 18

19 Fiscal Second Half: Sales and Income for Key Segments [Forecast] 210, ,000 +2,165 [+1.0 %] 19,152 +1,848 [+9.6 %] 9.1% 9.9% 21,000 12,018 Net Income Attributable to Owners of the Parent Company 14,000 +1,982 [+16.5 %] 5.7% 6.6% Second Half Second Half Second Half Second Half Second Half Second Half Services IT BPO Financial IT Industrial IT 52,812 54,200 +1,387 [+2.6 %] 19,944 20, [+1.3 %] 56,029 53,300-2,730 [- 4.9 %] 90,508 92,400 61,930 63,000 ( 計画 ) +1,891 [+2.1 %] 5,086 5, % [+2.2 %] 9.6% 1,041 1, [+10.5 %] 5.2% 5.7% 6,486 6, % [+4.8 %] 12.8% 営業利益 Income 7,650 5,179 4,800 6, ( 計画 ) [+13.9 %] 7.4% 営業利益率 8.3% *Estimated amounts for the second half are calculated by subtracting the first half results from Copyright TIS Inc. All rights reserved. the annual estimates. *Segment sales include intersegment sales. 19

20 TIS INTEC Group Logo Underlying Concepts The logo portrays the TIS INTEC Group as a tightly knit team, powered forward by the different sets of expertise that each member brings to the table. It features our two main corporate colors: ocean blue for the new challenges that we are constantly tackling, and intelligent gray for the solid technological foundations that underpin our business. Brand Message Go Beyond The brand tagline, Go Beyond, embodies our constant quest into the beyond in search of new challenges. It represents our firm commitment as a group to delivering solutions that are always one step ahead, not only solving clients problems but anticipating and meeting their own customers needs too. Cautionary Statements All statements described in these materials are based on information available to management regarding the TIS INTEC Group that is, TIS and the subsidiaries under its umbrella as of the presentation date and certain assumptions deemed reasonable at this time. No intent is implied of promise by the Company to achieve such forward-looking statements. Indeed, various factors may cause future results to be substantially different from the assumptions presented in these materials. Amounts for each three-month quarter are calculated by subtracting data for the respective period from the cumulative total. From the fiscal year ending March 31,, segments were reclassified at TIS, paralleling changes in the management structure designed to promote the shift to a new business structure. For comparison purposes, figures for fiscal have been recalculated and are presented according to the new segment breakdown