Financial Results
For Q1 FY2020
2020.6.30
Copyright© Cross Marketing Group Inc. All rights Reserved. 2
CONTENTS
Q1 FY2020 Financial Results
Q1 FY2020 Financial Results by Business Segment
Topics of Q1 FY2020
Revision of Financial Result Forecast for FY 2020
Shareholder Return and Dividend Amount
Reference Materials
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5
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Copyright© Cross Marketing Group Inc. All rights Reserved. 3
Q1 FY2020 Financial Results
CONTENTS 1
Copyright© Cross Marketing Group Inc. All rights Reserved. 4
Domestic Research Revenue Almost Unchanged Year on Year
while Affected Somewhat by COVID-19
Announcement of Financial Results for Q1 FY2020 Delayed and
Financial Results and Year-end Dividend Forecasts for FY2020
Revised to Uncertain due to COVID-19
Q1 FY2020 Executive Summary FY2020 1Q
Financial Results 01
Copyright© Cross Marketing Group Inc. All rights Reserved. 5
COVID-19 Impact not Sever during This Quarter(1st Jan. to 31 Mar.)
Profits Up Year on Year
Revenue
409
4,711
Operating Profit
Ordinary Profit
Net Income 192
366
Q1 FY2019
Result
427
4,618
250
412
Amount
104.3%
98.0%
130.1%
112.8%
Year on Year
Q1 FY2020 Result
(Unit:JPY Million)
Q1 FY2020 Financial Results 01 Q1 FY2020
Financial Results
Copyright© Cross Marketing Group Inc. All rights Reserved. 6
Q1 FY2020 Financial Results by
Business Segment
CONTENTS 2
Copyright© Cross Marketing Group Inc. All rights Reserved. 7
02
903
1,238 1,385 946
897 582
871
739
586
758
200
400
600
800
1,000
1,000
2,000
3,000
4,000
5,000
Q1 FY16 Q1 FY17 Q1 FY18 Q1 FY19 Q1 FY20
Q1 FY2020 Financial Results
by Business Segment
Research Business
(Domestic・Overseas)
Unit
JPY Million
Revenue (left)
Segment Profit (right)
COVID-19 Impact not Sever, Domestic Research Revenue Up Year on Year
Operating Profit Up Due to Increase of Ratio of On-line Research Projects
Research Business 【Domestic・Overseas】 Trend
Overseas Subsidiaries Affected
Significantly by Lockdown on
or after Q2
Revenue & Profit of CM, Net-
research Company, Up Year on
Year
Revenue(Domestic)
Revenue(Overseas)
Segment Profit
101.9%
94.9%
129.2%
Year on Year
Off-line Research Projects
Delayed or Cancelled
→Ratio of On-line Increased
Copyright© Cross Marketing Group Inc. All rights Reserved.
02 IT Solution Business
It Solution Business Trend Unit
JPY Million
Revenue(left)
Segment Profit(right)
In System Development, Revenue & Profit less than Expectation
due to Concentration of Resource on Big Projects
The Number of Acquired Projects as Almost Expected, Steady For Q2
FITTIO & CPW steady
The Number of Projects as
Expected while Dealing with
Big Projects
Revenue
Segment Profit
90.0%
1.2%
Year on Year
444 442
604
799 719 29 28
49
88
1.05
20
40
60
80
100
200
400
600
800
1,000
Q1 FY16 Q1 FY17 Q1 FY18 Q1 FY19 Q1 FY20
New Client Development
and Human Resource
Business Affected by
COVID-19
8
Q1 FY2020 Financial Results
by Business Segment
Copyright© Cross Marketing Group Inc. All rights Reserved.
Other Businesses
Unit
Million
The Number of projects from
Major Advertising Agencies
Down Year on Year
Digital Promotion Projects
Steady
91.9%
118.1%
Year on Year
Revenue Segment Profit
136 155
136
200 184
24 31
-10
33 39
-10
10
20
30
40
50
-50
50
100
150
200
250
Q1 FY16 Q1 FY17 Q1 FY18 Q1 FY19 Q1 FY20
Finding New Clients starts to
Affected by COVID-19
02
Starts to affected by COVID-19, Projects Delayed and the Number of Acquired
Projects Less than Expectation
While Results Almost Unchanged Year on Year
Other Businesses Trend
Revenue(left)
Segment Profit(right)
9
Q1 FY2020 Financial Results
by Business Segment
Copyright© Cross Marketing Group Inc. All rights Reserved. 10
Topics of Q1 FY2020
CONTENTS 3
Copyright© Cross Marketing Group Inc. All rights Reserved.
03
CRM Analysis Service “Customer Journey Type Data Analysis” Starts to Provided to
Meet Companies Needs for Practical BIG Data Use
Provide Full Custom Service to Companies with difficulties in Use of Big Data
Domestic Research Business
【Cross Marketing】
(1)Change Data to Customer Journey Type
(2)Embody Clients Problems by Asking
(3)Deep Test Marketing with Integrated Data
11
Topics
of Q1 FY2020
・・ ・・ ・・
Integrated Data
Customer
Management
Sales
Purchase WEB Log
Attendance Location
Information Textual
Data
Behavioral Data Awareness Data
Customer
Attributes
Promotion of
Understanding
Improvement of
Relations
Improvement of Relations
・When? ・How much? ・Who? ・How? ・What?
・For What? ・How was it before? ・What kind of feeling? ・How did it change?
Behavioral&Awareness Data
Unravel Customer Insight
Copyright© Cross Marketing Group Inc. All rights Reserved.
03 Domestic Research Business
【Establish New Firm】
CMG Establishes “withwork Inc.”
as Base for Operating Marketing Research in Fukuoka
Some Parts of Development and Operation
related to Marketing Research Transferred to
“withwork” in Fukuoka from Tokyo Head
Office
【Purpose】
・Maintain Business Continuity when Natural
Disasters Occur
・Hiring New Human Resources Aiming for Improvement of Operating
Capacity and Quality by Hiring Human
Resources for High Quality Direction Work
12
Topics
of Q1 FY2020
Copyright© Cross Marketing Group Inc. All rights Reserved.
03 Domestic Research Business
【Merger in Group, Announced on 11. June】
CM, Expert of Net Research,
Merges with R&D, Expert of Off-line Research for More Group Synergy
Background:The Ways of Client’s Marketing Have Changed Rapidly
due to Progress of ICT
Main Business:Off-line Research
Abundant Experiences and Knowledge
for 50 Years since Establishment
Purpose :Keep up with Market Changes
Main Business:Internet Research
Growth Speed Based on High Mobility
Effective date:October 1. 2020
13
Topics
of Q1 FY2020
Copyright© Cross Marketing Group Inc. All rights Reserved.
03 IT Solution Business
【Investment・New Service】
Cross Ventures Invests in “NEWROPE”
Cross Communication and NEWLOPE to Develop a New Service for D2C Bland
Provide New Targeting Service with Abundant
Experiences of Data Marketing
Analysis Data on SNS, Compile Database
and Extract Potential Fans with Fashion AI Technology
Support ※ D2C Bland Growth
to Acquire Fans Efficiently and Communicate Continuously with Fans
※D2C Bland :Model of
Setting a Bland Concept and
Target Cleary and Fostering
Relationship with Fans, not a
Simple Direct Sales
14
Topics
of Q1 FY2020
Copyright© Cross Marketing Group Inc. All rights Reserved.
03 Digital Marketing Business(Other Businesses)
【D&M】
D&M Concludes Partnership with “TEMONA. inc.”
in Digital Marketing sector
D&M Supports Companies Using Subscription System Provided by
Temona with Marketing Service with Customer Network Panel
Provides Subscription System
Provides Digital Marketing Service
Marketing to Member Efficiently
Companies
Attribute Analysis
Research to Targets
Ad Support
15
Topics
of Q1 FY2020
Copyright© Cross Marketing Group Inc. All rights Reserved. 16
Measures to Deal with COVID-19 Affection
Revision of Financial Result Forecast for FY 2020
※Disclosed revision of Financial Result Forecast
for FY2020 (June 30. 2020)
CONTENTS 4
Copyright© Cross Marketing Group Inc. All rights Reserved. 17
04 Financial Result
Forecast for FY 2020
ALL Segments, Especially Overseas Research, Affected Significantly
Consolidated Financial Results For Q2(April to June) Should Down Year on Year
Around 80%
Year on Year
※The Revenue forecasts are estimated judging from the current financial status. The actual may differ from this forecasts due to a number of factors
Off-line Research stopped until the state of emergency was lifted. Despite restrictions were eased, the number of projects was less than expectation because clients business activities have got slow down. →to strengthen sales activities like on-line workshop, redo sales activities
Domestic Research
Although HR Business and developing client activities are affected somewhat, the impact has been small. The revenue will be almost unchanged year on year since Acquiring projects is going well as expected. →to focus on contracted matter, review the marketing channels
IT Solution
Projects related to Olympic were cancelled and the number of promoting projects for physical stores has been decreased. Although finding new client are affected, Digital Marketing projects have been going well. →to strengthen sales activities like on-line workshop, review recruitment plans
Digital Marketing
(Other Businesses)
COVD-19 Affection to Segments / Measures Revenue Forecast
For 2Q (Apr to Jun)
Around 80%
Year on Year
Around 90-100%
Year on Year
Around 90-100%
Year on Year
Since all cities foreign subsidiaries located were on lockdown, business activities virtually unable to be done. Although some restrictions were eased later in May, the Impact has been huge. →to suggest transition to on-line services, cut down non-essential expenses
Overseas Research
Consolidated
Financial Results
Consolidated Financial Results Forecast for FY2020 Revised to Uncertain
Because Reasonable Assumptions Currently Difficult due to COVID-19
Measures to Deal with COVID-19 Affection ・
Affection to Financial Results Forecast
Copyright© Cross Marketing Group Inc. All rights Reserved. 18
04 Measures After COVID-19
to Carry on “ Innovation for Maintaining and Growing Business”
to Become a Group with Ability to Keep up Changes of Society and Values
Short or Middle Term Risk Measures
Change of Working Style and Management to Arrange Secure Environments for Office and Remote Working to Improve Personnel Evaluation Systems and Management
Continuous Stagnant of Off-line research to Shift Service Providing System to Internet-digital Marketing
Change of the Way of Sales Activities and
Finding New Clients(Change of the Way of
Contact and Relationship with Clients)
to Build New Relationship with Clients by Strengthening Digital Marketing CRM System
Change of Consuming Actions, Values and
Business Environments to Invest in Businesses Including existing Businesses for Providing New Values
Slowdown of Growth Speed due to
Deterioration of Business Activities to Borrow JPY 2 Billion (Disclosed on June 11) for Investment to Maintain Businesses and Grow
Revision of Financial Result
Forecast for FY 2020
Copyright© Cross Marketing Group Inc. All rights Reserved. 19
Shareholder Return
and Dividend Amount for FY2020
※Disclosed revision of year-end dividend
forecast for FY2020 (June 30. 2020)
CONTENTS 5
Copyright© Cross Marketing Group Inc. All rights Reserved.
05 Shareholder Return and
Dividend Amount Dividend in FY2020
Year End Dividend in FY2020 Uncertain (the last forecast : JPY 3.10 )
due to the Revision of Financial Results Forecast for FY2020
No Change with Interim Dividend (JPY 3.1)
Dividend Forecast for FY2020:Uncertain (Interim:JPY 3.10, Year-end:Uncertain)
“Determine a dividend amount with the aim of a consolidated dividend
payout ratio of approximately 15%” Dividend Policy
0
20
40
60
80
0
2
4
6
8
2013 2014 2015 2016 2017 2018 2019 2020年
(last forecast)
2020年
(new forecast)
13.5%
(%) (JPY) Dividend per share(left)
Consolidated dividend payout ratio(right)
JPY4.5
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
15.1%
JPY 6.0
JPY 3.1 +
Uncertain
20
*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.
Copyright© Cross Marketing Group Inc. All rights Reserved. 21
Reference Materials
CONTENTS 6
Copyright© Cross Marketing Group Inc. All rights Reserved. 22
06
Unit:JPY Million Q1 FY2019 Q1 FY2020 Year on Year
Revenue 4,711 4,618 98.0 %
Costs of Goods Sold 2,836 2,751 97.0 %
Gross Profit 1,875 1,867 99.6 %
Gross Profit Margin 39.8 % 40.4 % +0.6 pt
SG&A 1,466 1,440 98.3 %
Operating Profit 409 427 104.3 %
Operating Profit Margin 8.7 % 9.2 % +0.5 pt
Ordinary Profit 366 412 112.8 %
Extraordinary Profit - - -
Extraordinary Loss - - -
Net Income 192 250 130.1 %
Gross Profit Margin Improves →Subcontract expense decreased due to
decrease of the number of off-line
research projects
→Improvement of gross profit margin
due to increase of the ratio of on-line
research projects
Q1 FY2020
Consolidated Profit and loss Statement (Overview)
SG&A decreases →Some branches were closed last year
→Adverting costs decreased and sales
promotion events were cancelled due to
COVID-19
Reference
Materials
Copyright© Cross Marketing Group Inc. All rights Reserved.
06 Q1 FY2020
Consolidated Balance Sheet (Overview)
Long-term Debt increases → Raised 700 JPY million
by borrowing in Mar. 2020
Unit:JPY Million End of Q4
FY2019
End of Q1
FY2020 Year on Year
Current Asset 7,780 7,155 92.0 %
Cash & Deposit 2,714 2,393 88.2 %
Notes & accounts
receivable-trade 3,617 3,358 92.9 %
Others 1,449 1,405 96.9 %
Non-current Assets 2,147 2,270 105.7 %
Goodwill 287 267 93.0 %
Others 1,860 2,004 107.7 %
Total Assets 9,927 9,426 94.9 %
Unit:JPY Million End of Q4
FY2019
End of Q1
FY2020 Year on Year
Current Liability 4,773 3,707 77.6 %
Note payable 1,562 1,436 91.9 %
Short-term Debt 838 372 44.4 %
Others 2,373 1,898 80.0 %
Non-current Liability 1,734 2,256 130.1 %
Long-term Debt 1,488 2,011 135.1 %
Others 245 245 99.8 %
Net Assets 3,420 3,463 101.3 %
Equity Ratio 33.4 % 35.8 % 2.4 pt
23
Reference
Materials
Copyright© Cross Marketing Group Inc. All rights Reserved.
Cross Marketing Group 06
24
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 646,709,000 Capital
1,866 (Including 542 temporary staff) Number of
Employees
[Consolidated]
Research Business, IT solutions Business and
others
Business
Reference
Materials
Copyright© Cross Marketing Group Inc. All rights Reserved.
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 is engineer placement agency oriented IT/Web
Group Companies 06
25
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.
Markelytics is a leading market research agency providing
end-to-end research solutions to clients around the world.
Medical World Panel manages and operates proprietary
healthcare panels, and provides insights from key
stakeholders in the healthcare industry.
Support client to deal with marketing problems with web
research and BPR/BPO service
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.
Reference
Materials
Copyright© Cross Marketing Group Inc. All rights Reserved.
Revenue
(Unit:JPY Million)
Domestic Research
Overseas Research
IT Solution
Other
Operating Profit
Ordinary Profit
Net Income
Net Assets
Total Assets
Dividend per share(JPY)
EPS(JPY)
BPS(JPY)
ROE(%)
ROA(%)
FY2015
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
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
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
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
06
26
Trends in Consolidated Results
and Main Indicators (FY2015-FY2019)
FY2017 FY2018 FY2016 FY2019
Reference
Materials
Copyright© Cross Marketing Group Inc. All rights Reserved.
-400
-200
0
200
400
600
800
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Revenue by Business Segment
and Consolidated Operating Profit
(JPY Million )
【Operating Profit (line graph:right)】
(JPY Million)
IT Solution Business
Research business (Overseas
Research Business (Domestic)
Other Business 【Revenue (bar graph:left)】
FY2019 FY2020 FY2016 FY2017 FY2018
06
27
Listed to 1st section of TSE Consolidated Kadence and R&D
Reference
Materials
Copyright© Cross Marketing Group Inc. All rights Reserved.
History of Cross Marketing Group 06
28
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
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
2014
2019 Supotant and Cross J Tech merged and change its trade
name to Fittio Inc.
Nov
Reference
Materials
Copyright© Cross Marketing Group Inc. All rights Reserved.
Cautionary Statement regarding the Material
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.
Cross Marketing Group Inc.
https://www.cm-group.co.jp
29
For inquiries regarding one information contained in this presentation:
Cross Marketing Group Corporate Planning Unit
E-mail:[email protected]