©2012 INFORMATION DEVELOPMENT CO., LTD. All Rights Reserved.
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Investor PresentationFor the six months ended September 30, 2012
November 2012
INFORMATION DEVELOPMENT CO., LTD.
JASDAQ Standardcode:4709
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Today’s presentation
2. 2Q performance overview(difference between 2Q results and the original forecast)
1. What’s ID Group ?
<Reference>
・Performance overview for the year ended March 31, 2012
・Directions of the mid-term management plan
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1. What’s ID Group ?
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Paid in capital:¥592.34million
Established:October,1969
No. of employees:1,734(nonconsolidated)2,223(consolidated)
Paid-in capital: ¥90MEstablished: 1977No. of employees: 235
Paid-in capital: ¥100MEstablished: 1982No. of employees: 102
Paid-in capital: ¥40MEstablished: 1988No. of employees: 21
Paid-in capital: $1.1MEstablished: 2004No. of employees: 129
Paid-in capital: S$1.5MEstablished: 2012
No. of employees: 2
Capital: $2.5MEstablished: 2012
54.4%
100%
100%
80%
100%
100%
NIHON CULTURESOFT SERVICE
SOFTWARE DEVELOPMENT
PURAIDO
ID Wuhan
Became a subsidiary in Dec. 2006
Became a subsidiary in Apr. 2002
* SI division was absorbed by ID in Apr. 2011
ID’s ownership
ID SingaporeEstablished in May 2012
ID AmericaEstablished in Aug. 2012
*ID’s ownership ratios are calculated by number of shares excluding treasury stocks.
About ID Group (as of September 30, 2012)
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ID WuhanWuhan head officeWuxi branchShanghai branch
Operation Center (Suzhou)Tokyo branch(Japan)
IDCSSDPURAIDOID Wuhan Tokyo branch
Business alliance with
ID AmericaEstablished in Aug. 2012
BostonLondon
Business alliance with
ID Singapore
Business alliance with
ID London branchEstablished in Nov. 2012
Singapore
TokyoWuxiWuhanShanghaiSuzhou
Global network of ID Group
New York
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INFORMATION DEVELOPMENT Group
Consulting Software Development
System Operation Management
Cloud, Security
BPO Sales & ResearchOffice
Consumer Citizen
(ID’s Business Operations-Outsourcing Service 24)
Service menu of ID Group
PURAIDO
Group Coordination
ID Wuhan
SOFTWARE DEVELOPMENT
(SD)
NIHON CULTURESOFTSERVICE
(CS)
Society, Community
Bank Insurance IT,Communication
Service
Energy Public Office Transportation Manufacture
IDSingapore
ID America
INFORMATION DEVELOPMENT(ID)
Londonbranch
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7.7%8.4%
13.4%
26.8%
43.7%
7.7%
44.0%
8.3%
13.2%
26.8%
Individual Japanese
Corporation
Non-Japanese Financial
Institution
Others
Mar. 2012 Sep. 2012
-0.2p
Major shareholders% of total
shares
1 A. K. Corporation 8.7%
2 ID Employee Ownership Account 8.7%
3 Mizuho Trust Systems Co., Ltd. 8.5%
4 INFORMATION DEVELOPMENT CO., LTD 7.5%
5 Taiyo Pearl Fund, L.P. 7.4%
6 State Street Bank and Trust Company 505104 4.4%
7 Mizuho Trust & Banking Co., Ltd 3.5%
8 K.C.S Co., Ltd. 3.5%
9 The Master Trust Bank of Japan, Ltd. (Trust Account ) 2.8%
10 Wahei Takeda 2.6%
0.0p
+0.3p
0.0p
-0.1p
Stock data (as of September 30, 2012)
◆
Shareholding by investor type ◆
Major shareholdersNo. of shareholders: 1,799(25 decreased from Mar. 31, 2012)
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2. 2Q performance overview (difference between 2Q results and the original forecast)
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Industry trend (monthly results of IT industry)
-15
-10
-5
0
5
10
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9
Yearly growth
average*
Yearly growth
average* Trend of IT industry’s monthly sales changes
(Compared with same month of previous year)Trend of IT industry’s monthly sales changes
(Compared with same month of previous year)
*The average is calculated from the total amount added simply together.-15
-10
-5
0
5
10
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9
+2.6% -5.1% -3.7% -2.9% +1.4%
20122011201020092008Source: Above graph data was compiled by ID based on
“Trends in specific Service Sector (METI)”
(%)
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Causes of the difference between 2Q results and the original forecast
・Lower margin projects (booked for future growth)
・Increase in the headcount in the cloud services sales unit
・Underperforming projects
・Refund of corporate tax
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(¥ million) Sep. 2011 (% of revenue)
Sep. 2012Revisedforecast (Sep.11)
(% of revenue) Sep. 2012 (% of
revenue)
YOY %changes
% against revisedforecast (Sep.11)
Revenue 7,733 100.0 7,820 100.0 7,861 100.0 +1.7% +0.5%
Cost of Sales 6,281 81.2 6,478 82.8 6,557 83.4 +4.4% +1.2%
Gross Profit 1,452 18.8 1,341 17.2 1,303 16.6 -10.2% -3.0%
SG&A Expenses 1,123 14.5 1,201 15.4 1,174 14.9 +4.5% -2.1%
Operating Profit 328 4.3 140 1.8 129 1.6 -60.6% -7.5%
Recurring Profit 338 4.4 150 1.9 134 1.7 -60.3% -10.4%
Net Profit 174 2.3 40 0.5 62 0.8 -64.3% +55.6%
2Q Revenue and profits (consolidated)
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(¥ million) Sep. 2011 (% of revenue) Sep. 2012 (% of
revenue)
YOY %changes
Revenue 6,221 100.0 6,413 100.0 +3.1%
Cost of Sales 5,135 82.5 5,430 84.7 +5.8%
Gross Profit 1,085 17.5 982 15.3 -9.5%
SG&A Expenses 882 14.2 980 15.3 +11.0%
Operating Profit 202 3.3 1 0.03 -99.0%
Recurring Profit 261 4.2 315 4.9 +20.5%
Net Profit 145 2.3 301 4.7 +107.2%
2Q Revenue and profits (nonconsolidated)
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7,8617,733
+335
+69
-277
2Q Factors contributing to revenue(consolidated)
(¥ million) Software Development / Maintenance-Increase of order
System Operation Management-Slight increase
BPO, Security, Consulting, etc.- Withdrawal from contracted data input in Japan- Exclusion of one subsidiary from consolidation
Sep. 2011 Sep. 2012
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◆ Gross Profit -148Revenue +127Cost of Sales +276
<Factors contributing to Cost of Sales>・
Labor costs +65・
Production costs +20・
Outsourcing costs +278・
Carrying work in process +1・
Final work in process -1・
Purchasing -68
129(Operating Margin 1.6%)
-37◆ SG&A Expenses +51
<Factors contributing to SG&A Expenses >・
Labor costs -3・
Others +54
328(Operating Margin 4.3%)
-148
-51
2Q Factors contributing to operating profit(consolidated)
Gross Profit decreased
SG&A Expenses increased
Sep. 2011 Sep. 2012(¥ million) (¥ million)
(¥ million)
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(¥ million) Mar. 2012 Sep. 2012 % changes
Current Assets 5,740 5,450 -5.0%
Cash and Deposits 2,583 2,461 -4.7%
Fixed Assets 4,105 3,696 -10.0%Total Assets 9,845 9,147 -7.1%Liabilities 3,457 2,851 -17.5%
Interest-Bearing Debt 1,186 631 -46.8%
Earned Surplus 5,564 5,470 -1.7%
Total Shareholders’ Equity 6,272 6,178 -1.5%
Sep. 2011 Sep. 2012Cash Flows from Operating Activities 340 315Cash Flows from Investing Activities -58 219Cash Flows from Financing Activities -536 -712
2Q Financial position (consolidated)
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4,870(60.5%)
4,884(63.2%)
4,954(63.0%)
2,602(32.4%)
2,314(29.9%)
2,650(33.7%)
534(6.9%)
571(7.1%)
256(3.3%)
Sep. 2010
Sep. 2011
Sep. 2012
+69+1.4%
+69+1.4%
+335+14.5%
+335+14.5%
-277-52.0%
-277-52.0%
7,861
7,733
8,044
+127+1.7%+127
+1.7%
2Q Feature of ID Group 1
Revenue by businessRevenue by business
*Figures in brackets indicate % of revenue.(¥ million)
System Operation Management
Software Development / Maintenance
BPO, Security, Consulting, etc.
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4,433(55.1%)
4,101(53.0%)
4,222(53.7%)
2,306(28.7%)
2,374(30.7%)
2,519(32.1%)
1,305(16.2%)
1,257(16.3%)
1,118(14.2%)
Sep. 2010
Sep. 2011
Sep. 2012
+120+2.9%+120
+2.9%+145
+6.1%+145
+6.1%-138
-11.0%-138
-11.0%+127
+1.7%+127
+1.7%
7,861
7,733
8,044
2Q Feature of ID Group 2
Financial institutions IT, Telecom & Service Others
Revenue by customer
*Figures in brackets indicate % of revenue.(¥ million)
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6,465(80.4%)
6,086(78.7%)
5,949(75.7%)
1,578(19.6%)
1,646(21.3%)
1,912(24.3%)
Sep. 2010
Sep. 2011
Sep. 2012
-137-2.3%-137
-2.3%+265
+16.1%+265
+16.1%+127
+1.7%+127
+1.7%
7,861
7,733
8,044
Revenue by contract
2Q Feature of ID Group 3
Prime contracts Strategic partners
*Figures in brackets indicate % of revenue.(¥ million)
Prime contracts
Strategic partners
< Major customers >
Major IT Vendors
・Financial Institutions・IT, Telecom & Service・Others(Manufacture, Transportation, Public, Energy etc.)
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Reason of downward revision (full year forecast)
・Cancellation of expected projects
・Increase in personnel and outsourcing costs due to theunderperforming projects in the 1Q
・Increase in the headcount in the cloud services sales unit
・Handover periods
・Increase in training costs
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(¥ million) Mar. 2012(% of
revenue)
Mar. 2013Originalforecast
(% of revenue)
Mar. 2013Revisedforecast
(% of revenue)
YOY %changes
% against Originalforecast
Revenue 16,137 100.0 16,500 100.0 16,270 100.0 +0.8% -1.4%
OperatingProfit 629 3.9 825 5.0 370 2.3 -41.2% -55.2%
Recurring Profit 659 4.1 825 5.0 380 2.3 -42.4% -53.9%
Net Profit 365 2.3 460 2.8 170 1.0 -53.4% -63.0%
EPS (yen) 49.15 - 61.93 - 22.89 - -26.26 -39.04
Dividend per Share (yen)
21.00 - 21.00 - 21.00 - - -
Performance forecast(full year, consolidated)
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Tighter control over risks and investmentsTighter control over risks and investments
Countermeasures towards Mar. 2014
(Control over risks)1. Prevention and early detection of underperforming projects with
enhanced QMS2. Optimal management of overtime and outsourcing through revised
business processes
(Control over investments)
1. Enhancement of the cloud services sales unit was completed. The investment phase was over. Revenues and profits should increase.
2. Booking of low-margin projects for future growth will be focused on those with shorter payout time.
3. Training investment will be focused on high value-added strategic areas.
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<Reference>
・Performance overview for the year ended March 31, 2012
・Directions of the mid-term management plan
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(¥ million) Mar. 2011 (% of revenue) Mar. 2012 (% of
revenue)
YOY %changes
% againstforecast
Revenue 16,450 100.0 16,137 100.0 -1.9% +0.2%
Cost of Sales 13,209 80.3 13,207 81.8 0.0% +0.7%
Gross Profit 3,241 19.7 2,929 18.2 -9.6% -1.7%
SG&A Expenses 2,402 14.6 2,299 14.3 -4.3% -2.1%
Amortization of goodwill 78 0.5 78 0.5 0.0% -
Operating Profit 839 5.1 629 3.9 -25.0% -0.1%
Recurring Profit 892 5.4 659 4.1 -26.1% +1.4%
Net Profit 447 2.7 365 2.3 -18.4% -22.3%
EPS (yen) 60.21 - 49.15 - -11.06 -14.13
Revenue and profits (consolidated)
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Business Operations Outsourcing
Global development
Promotion ofM&A,
Business alliance(M&A of IN-IN type)Growing out of excessive competition in the domestic market
(M&A of IN-OUT type)Penetrate to overseas growth market
Enhancement of ID Group brand power
The mid-term management plan“Breakthrough 200 !”
Group management upgrading
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Targets for the term
ending in March 2015
Expansion of
global business
Reinforcement of
core competence
Consolidated revenue ⇒ 20.0 billion yenOperating margin ⇒ 6.0%
Overseas subsidiary and branch⇒ to 5 countries
Business alliance ⇒ to 6 companies
Data center management(including Cloud and IT platform services)
⇒ Revenue 12.0 billion yen
<In 3 years> Revenue : 20.0 billion yen, Operating margin : 6.0%The mid-term management plan “Breakthrough 200 !”
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3.9%
6.0%
Mar. 2012 Mar. 2015
Revenue Operating Margin
16.1 bn. yen
20.0 bn. yenin 3 years
+3.9 bn. yen
The mid-term management plan
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12,000(60.0%)
9,969(61.8%)
7,000(35.0%)
5,239(32.5%)
928(5.7%)
1,000(5.0%)
Mar. 2012
Mar. 2015
Plan of revenue by business
+2,030+20.4%+2,030+20.4%
+1,760+33.6%+1,760+33.6%
+71+7.7%
+71+7.7%
16,137
20,000
+3,862+23.9%+3,862+23.9%
(plan)
*Figures in brackets indicate % of revenue.(¥ million)
System Operation Management
Software Development / Maintenance
BPO, Security, Consulting, etc.
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Disclaimer
This presentation material contains statements and information about future forecasts, including financial projections, strategies and business plans of INFORMATION DEVELOPMENT CO., LTD.
Such forward-looking statements and information are based on data available when this presentation was prepared, and not based on historical facts.
These forward-looking statements and information also incorporate potential risk and uncertainties caused by changing economic trends, the competitive environment, and other factors. The Company’s actual results, business development progress, and financial situation may differ significantly from forward-looking statements and information contained herein, due to competition in the industry, market demand, exchange rates, and other socioeconomic and political factors.