3rd medium-term business plan - prestigein.com€¦ · nov established kanto roadside assistance...

25 March 2010

Prestige International Inc.Osaka Securities Exchange Hercules, Growth:4290

（Year ending 31 March 2011 – year ending 31 March, 2013 ）

3rd Medium-Term Business Plan

2Page -Copyright © 2010 Prestige International Inc. All Rights Reserved.

This presentation may provide projections or forward-looking statements

regarding future conditions, events or performance.

The Company wishes to caution you that such statements are just predictions and the actual events or results

may differ materially due to changes in business conditions.


2nd Medium-Term Business Plan 2nd Medium-Term Business Plan: Results 2nd Medium-Term Business Plan: Results

(by Segment)

3rd Medium-Term Business Plan: Background to Development

3rd Medium-Term Business Plan: Vision & Policy 3rd Medium-Term Business Plan: Vision & Policy

(by Segment)


2nd Medium-Term Business Plan

Review

(Year ending 31 March 2008 – year ending 31 March 2010)

PartiallyAchieved

■ The company aimed to establish a new model of growth for the whole Group, implemented to proactively improve operating costs and business efficiency for existing segments in order that they could grow consistently and steadily in a rapidly changing business environment.

■ The company focused on strategic investment to launch a 2nd BPO Center (current: Akita BPO Campus East site) and establish a branch in Thailand. This will enable increased ability to operate new business processes and expand the Health Care Program in the Insurance Business.

■ The company aimed to develop new clients and enhance the sales proposal in order to create new business and develop new revenueopportunities. In addition, the company looked to establish a new business division based on the company’s strengths (Property Assistance Service).

Achieved

PartiallyAchieved



(by Segment)



(by Segment)


Main Activities

Apr Separated the East and West regions into subsidiary companies of Premier Assist, which provides roadside assistance services, in order to expand the roadside assistance service network. (32 offices -Tokyo, Hokkaido, Osaka and 17 prefectures; 144 service vehicles)

Incorporated Hong Kong Branch

May Installed 1,200 vehicles with GPS, including Premier Road Service’s vehicles, in order to ensure a prompt roadside assistance service

Jul Closed Paris, France office.

Oct Refined Roadside Assistance’s main operation system (Premier Net)

Incorporated Australia office

Nov Established Kanto roadside assistance operation center (Minami-Aoyama), Tokyo

Feb Established Kansai roadside assistance operation center (Takarazuka), Osaka

Entrust Inc., a rent guarantee company, became subsidiary company

■ Year starting April 1, 2009 – year ending March 31, 2010

Feb Established Sao Paulo Office in Brazil


Apr Started operation at Akita BPO Campus EAST （550 seats）Oct Thailand Bangkok office was incorporated


2nd Medium-Term Business Plan Results (1)


15,27414,729

13,43812,829

8,000

10,000

12,000

14,000

16,000

FY 2007 FY 2008 FY 2009 FY 2010


■ Sales have risen 19.1% in 3 years■The Automotive Assistance segment has grown steadily after sales experienced a downturn in

2008■ Sales for the Insurance Assistance and Financial Service segments have been affected by the

rising yen since September 2009 and have been flat.

19.1%

7,072 6,9008,127 8,395

2,184 2,304

2,185 2,0871,312 1,442

1,281 1,7011,743 2,143

2,2822,163

516626

743679

21

246109

0

5,000

10,000

15,000

FY 2007 FY 2008 FY 2009 FY 2010

Automotive Assistance Insurance AssistanceCRM Financial ServicesIT & Other Business Property Services

0

(unit: million Yen)Sales


450 663

97100

201184

491

130 106

977824

676807

569532

604530

297

▲ 98▲ 2 ▲ 28

▲ 21

26

-200

300

800

1,300

1,800

2,300

FY 2007 FY 2008 FY 2009 FY 2010

Automative Assistances Insurance AssistancesCRM Financial ServicesIT & Other Business Property Sevices

2,3582,316

1,8061,631

800

1,300

1,800

2,300

FY 2007 FY 2008 FY 2009 FY 2010

■ Operating Income has risen 44.6% in 3 years■ The operating income of the Financial Services segment has increased in

proportion to sales■ IT and Other business have moved into the black since 2009


0

44.6%

Operating Income (unit: million Yen)


■ Sales

■ Cost of Sales

■ SG&A Expense

■ Operating Income

Although the Automotive Services, CRM and Financial Services segments expanded their business, sales activities have been affected by the rising Yen, the global financial crisis and significant drop in demand in export industry, which went on longer than expected. The target hasn’t been achieved.

By centering operations at the Akita BPO Center, the Company was able to consistently manage cost of sales. The gross margin increased from 25.9% in FY 2007, to 26.7% in FY 2009 (The forecast for FY 2010 is 25.8% because of the proactive facility investment)

Although overall SG&A expenses increased slightly, the ratio of expenses to sales fell from 13.2% in FY 2007 to 11.0% in FY 2009. (The forecast is 10.4% in FY 2010)

Operation income rose 44.6% from FY 2007. The ratio of the forecast for FY 2010) The target hasn’t been achieved.


Overall



(by Segment)



(by Segment)


■ Automotive Assistance・ The company needed to implement manner and operational training, as well as expand the service

network, in order to improve customer satisfaction.

・ To make up for the delay of IT investment to increase efficiency, the company will focus on investing in management resources in 2010.

・ In order for horizontal expansion of the existing business, the company needs to proactively strive to support business of after accident support services.

■ Insurance Assistance

■ CRM・ Sales and operating costs saw an improvement because of new operations started overseas, however,

overall projections weren’t met as the company was unable to adapt to the market changes and failed to expand horizontally or provide original BPO solutions.

・ The company needs to focus the sales force on foreign companies that plan to expand their business to Japan and Asia, as well as developing a closer cooperation between overseas branches to bolster strategic sales and take advantage of differentiation.

・ The number of new clients obtained was below our projected target, largely because prospective companies’ needs had changed from being mostly service orientated to more cost orientated due to the economic downturn experienced since Sep, 2008. Thus, the company had to review its proposal.

・ The company needed to expand it’s service menu in order to provide the value (to existing clients?),which is not effected by external environment. And improve productivity for the cost reduction.

2nd Medium-Term Business Plan Results

By Segment


■ Financial Services

■ Property Services

■ IT & Other Business

・ The company focused resources on existing business, thus faced a lack of staff to develop new clients.

・ The company challenges are to create new main business in addition to existing business and to expand its business to the oversea market from domestic Japan market.

・ Since September 2008, the financial and airline industry’s market changed dramatically and due to this, the number of new accounts did not meet the target number set in the business plan, nor did the scale of business size.

・ Expansion of services for existing credit card members effectively resulted in an increase in monthly spending, but it did not work in encouraging members to use the card as their main card. The company needs to develop and provide high added-value services to the customer and enhance the value of its credit card to be more attractive in the year ahead.

・ The number of new clients went as planned, but each business size was small and thus, the sales target was not reached. It’s necessary to rebuild this segments know-how and continue to improve efficiency.

・ It’s necessary to expand our own service network to increase service usage and strengthen the sales force for obtaining new clients. In addition, the company needs to refine the operation structure promptly, for that to provide high quality service constantly.

2nd Medium-Term Business Plan Results

By Segment



(by Segment)



(by Segment)


► Generate profits by being inspired and appreciated by customers

► Employees must be sincere and cordial in order to provide services

► Employees that earn work satisfaction through customers smiles are able to enhance their service quality.

► In order to successfully develop, a corporation must be able to look back on it’s first objectives, regardless of its vested interest, and to be watchful of its pride and ego

► Corporations that learn from mistakes are the only ones that can originate new value

► AS a company, create a new kind of employment that contributes to society

Pursue an new impressive service for our customer

3rd Medium-Term Business Plan (1)

Our Slogan


Increased operating income to 44.6%, but sales only increased 19.1%

In order for operating income to increase steadily in the severeeconomic situation, the company needs to put in place a proactive

strategy to increase sales

2nd Medium –Term Business Plan Goal was - 20% operating income ・ Expansion of existing business→ Increased existing business→ Sales and profits rose steadily

・ Strived for effective administrative management for cost of sales → Improved profitability

Planning for the 3rd Medium-Term Business Plan

The company will strive to provide high-value services that will drive longer-term growth and enable restructuring of the foundation of our

business, the main challenge for the company

3rd Medium-Term Business Plan (2)

Results (based on the 2nd Medium-Term Business Plan



(by Segment)



(by Segment)


3rd Medium-Term Business Plan: Vision & Policy (1)

Sales： 315 Million Yen

Operating Income： 40 Million Yen (Operating profit ratio12.7％)

As a BPO services creation company, PI Group plans to aggressively pursue the development of business segments that are in line with our clients targets and to undertake new value creation; the result being a further strengthening of our differentiation over other BPO companies.

In addition, with the guiding principle of developing new markets, we expect to realize significant new value creation by means of aggressive globalized development and through the use of the knowledge gained from our existing businesses, which will result in additional business expansion and increased profitability for the organization.

Vision

Targets (FY 2012)


Establishing a strong position by implementation of `Focusing on Select Business`, `Creation of New Value`, `Priority Investment`

■ Restructuring of Group Administrative Management: Focusing on select business

Japan - Management of Japan Domestic Business

America - Management of Europe and the United States Business

Singapore - Management of Asia-Oceania Business

■ Business Strategy: Management Resource concentration by changing segment

■ Improving efficiency: Strategic investment as a leading company

• The company will focus its management resources on higher growth business, for which the company aims to improve customer satisfaction

• The company will optimize the investment environment for each segment and present additional services to existing clients by organically linking each segment; the company will also endeavor to develop new business

• As part of establishment of a holding company in each area, the company will make clear management responsibilities for each of the three locations below, to enable them to drive their business through flexible and speedy changes in each market. The company will strengthen business activities and cost control, and expand existing business both horizontally and vertically as determined.

• The company will focus on IT investment to improve efficiency and enhance competitiveness by improving our service quality


Policy


Restructuring ofBusiness Basement

・ Achieve sales goal・ Expansion of business（horizontally, vertically)・ Launch & operation of the second BPO Campus

・Adding high-value to existing

business

・ Focusing on the selected

business

・ Improving efficiency

・ Strategic priority investment

The 3rd Medium-Term Business Plan

The 1st Medium-Term Business Plan

Establishment ofBusiness Basement

The 2nd Medium-Term Business Plan

・ Stabilizing existing business and improving service quality

・ Developing new business

・ Expand business into Asia area

BusinessRe-creation

Restructuring existing business basement, to enable to long-term growth of gross profit


Position


■ Current Segments ■ New Segments

By changing segment, for promoting the 3rd Medium-Term Business Plan

Foreign currency based Credit Card Issue and Call Center Management

Properties Assistance IT related Business

Temporary Worker Services

AutomotiveAssistance

InsuranceAssistance CRM

Real EstateServices

IT・ OtherBusiness

RoadsideAssistance

InsuranceAssistance CRM

PropertyAssistance

Credit Card IT

Temporary Worker/ Other Business

Roadside Assistance（For Auto Manufacturers）

Roadside Assistance（For Casualty Insurance）

Extended Warrantee Services

Brochure Mailing Services

Parking Services

Japanese Overseas Assistance Services

Claim Handling Services

Healthcare Program

Small amount & Short Term Insurance Products

Rent Guarantee Program

At-home Care Insurance Service

Domestic Contact Center Outsourcing

Global Contact Center Outsourcing

Accident Response and Support

FinancialServices

Roadside Assistance（For auto maker）

Roadside Assistance（For casualty insurance）

Japanese Overseas Assistance Services

Claim Handling Services

Healthcare Program

Small amount and short term insurance products

Rent Guarantee Program

At-home care insurance operation service

Extended Warrantee Services

Domestic Contact Center Outsourcing

Global Contact Center Outsourcing

Accident Response and Support

Brochure Mailing Services

Domestic ContactCenter Outsourcing(For Credit Card Companies)

Properties Assistance

Parking Services

IT related Business

Temporary Worker Services

Domestic ContactCenter Outsourcing(For Credit Card Companies)

Foreign currency based Credit Card Issue and Call Center management


Segmentation Change ~ Blue sections indicate services that have moved to a new segment.


Before segmentation change After segmentation change

FY 2010 FY 2010

Roadside Assistance

Insurance Assistance

CRM

Credit Card

Property Assistance

IT

Temporary Worker/ Other Business

Total

Sales Operating Income Sales Operating Income

7,255

2,408

2,623

1,638

669

446

232

15,274

827

456

456

370

142

85

20

2,358

8,395

2,087

1,701

2,163

246

679

15,274

979

531

183

530

26

106

2,358

(unit: million Yen)


Comparison chart for Sales and Operating Income~ reflecting figures before and after the segment changes


Sales

FY 2010 FY 2011 FY 2012 FY 2013（Forecast）（Plan）（Plan）（Plan）

Operating Income

Road Assistance

Insurance Assistance

CRM

Credit Card

Property Assistance

IT

Temporary Work/ Other Business

Total

916

651

478

386

130

13

21

8,603

4,281

3,060

1,492

935

548

178

19,100

1,160

833

559

388

207

25

25

10,319

6,367

3,942

1,600

1,358

700

211

24,500

1,415

1,097

718

392

306

40

28

12,409

9,259

5,173

1,752

1,803

850

252

31,500

7,255

2,408

2,623

1,638

669

446

232

15,274

827

456

456

370

142

85

20

2,358 2,600 3,200 4,000


(unit: million Yen)

Operating Income

Operating Income

Operating Income

Operating Income

Operating Income

Operating Income

Operating Income

Sales

Sales

Sales

Sales

Sales

Sales

Sales


Targets ~ Segment


Sales

%

Gross Profit

%

EPS (Yen)

19,100

2,600

13.6%

1,582

8.3%

24,500

3,200

13.1%

2,035

8.3%

31,500

4,000

12.7%

2,592

8.2%

15,274

2,358

15.4%

1,478

9.7%

14,729

2,316

15.7%

1,410

9.6%

19,198.83 19,977.13 21,379.65 27,496.42 35,021.75

+106.2%

69.6%

-

75.4%

-

+25.0%

+10.3%

-

+7.0%

-

-

+28.3%

+23.0%

-

+28.6%

-

-

+28.6%

+25.0%

-

+27.4%

-

-

(unit: million Yen)


FY 2011 FY 2012 FY 2013 FY10vs.FY13（Plan）（Plan）（Plan）

FY 2010 FY 2010 （Forecast）（Plan）


OperatingIncome

Targets ~ Consolidate


Direction of Strategic Investment: Strategic investment as a leading company

To put the stepping stones in place to establish management practicesthat will create new profit and competitiveness

Enhancement of Competitiveness 1 （Roadside Assistance business - Expansion of

Service Network)

Enhancement of Competitiveness 2（Improvement operational efficiency）

Enhancement of Competitiveness 3（Development of human resources）

Expansion of Cusiness（Creation of new business/ increasing market share）

Investment items

・ The direct service network for the Road Assistance business

・ Service vehicles for the Road and Property Assistance businesses

・ Recruiting and training for human resources

・ Refining the current operation system and developing a new

system for new business

・ Investment in business alliance and M&A




(by Segment)



(by Segment)


Increasing market share by expanding company’s direct service network

Basis of having a subsidiary company– to increase the number of our direct service network bases (Premier Road Service)

to 47 prefectures + α strategy

※ More than 2 branches in some areas. More than one branch = High volume operation area

Operation center in Takarazuka

Operation center In Minami Aoyama

Tokyo：4Chiba：2

Kanagawa:3

Aichi：2

Osaka：4Hyogo：2

Fukuoka：2

（As of Mar 2010, 32 branches in Tokyo, Hokkaido, Osaka, 17 prefectures. 144 total vehicles)

By Segment: Roadside Assistance Business 1

Strategy


527,272 580,000 696,000 814,000

Proactive investment and service network expansion will lead to an expansion in existing business

Service Network

Vehicle

Staff

Dispatch (In-house)

Total Dispatch

FY 2010 FY 2011 FY 2012 FY 2013

144

30

148 200 230 250

180 200 220

50 65 75

90,000 170,000 190,000 200,000


Strategy


527,272580,000

696,000

814,319

373,322310,579295,544

230,451

150,000

250,000

350,000

450,000

550,000

650,000

750,000

850,000

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

■The number of dispatch service (Actual and Plan)

128.2%105.1%

120.2%

141.2%

110.0%

120.0%

117.0%

Expansion our own service network contributes to a continuous increase in dispatch services


Strategy


%

Operating Income

Sales

FY 2010 VS FY 2013Amount %

FY 2013（Target）

FY 2012（Target）

FY 2011（Target）

FY 2010（Forecast）


Will proactively invest in IT and vehicles which will allow us to expand our own service network & pursue efficiency

Will add new value to existing services and expand business horizontally Will strengthen & expand B to C business proactively

■ Business Policy

■ Plan Details

8,603916

10.7

10,3191,160

11.2

12,4091,415

11.4

Will invest proactively in order to make up for the delay in IT investment, in order to achieve highquality & efficient service

Will have advanced customer service training, in order to improve customer satisfaction more Will add new services to existing roadside assistance in order to provide more support after car

accidents Will enhance the support menu that supports back office work for Insurance companies

7,25582712.6

+ 5,154+ 588

+ 71.0%+ 71.1%


Targets


Expansion of our own service network and improvement service quality for increasing market share rapidly

Target Type Market Size

Rented Accommodation Approx17.73million

Condominium Approx4.62million

Sources： High residence management association `condominiums management trend research`

Sources: MIC in 2008 - Research of house and land usage

HokkaidoTohokuKantoShinetsuHokurikuTokaiKinkiChugokuShikokuKyushu/OkinawaTotal

Number of CondominiumTarget Area

155,19991,324

2,530,01820,04417,925

276,8341,050,697

116,71742,162

318,5564,619,476

Tokyo

Osaka

Sapporo

NagoyaFukuoka

（Images）

No. ofcondominiums by area

(Launch in 2011)

By Segment: Property Assistance Business 1

（Launch in 2010）

（Launch in 2010）

(Launch in 2011)

Expansion of Service Network Plan


Aggressive investment for building mainstream business

Expansion of own service network plan for three years

Service Network：

Vehicle：

Staff：

21

1

48 69 111 162

46 63 83

3 5 5

FY 2010 FY 2011 FY 2012 FY 2013


Expansion of Service Network Plan


%

Operating Income

Sales


FY 2013（Target）

FY 2012（Target）

FY 2011（Target）



Will expand our own service network to major city and provide high added-value that competitors do not have

Will aggressively invest in IT infrastructure, to standardize service quality

Will drive strategic sales and marketing for effective business expansion (narrow the sales to condominium management company and tie-up sales)

Will expand our own service network to major cities such as Tokyo, Nagoya, Osaka, Fukuoka and Sapporo

Will implement property assistance related services (first response), and fare-paying repair services (second response) to increasing sales

■Business Policy

■Detail Plans

935130

14.0

1,358207

15.2

1,803306

17.0

669142

21.2

+1,134+164

+69.5%+15.4%


Targets


・ Reorganization of the insurance industry

・ Strong Japanese Yen

・ Existing clients’ consciousness has changed

(from emphasis on services to costs)+

・ Required mandatory medical check for Japanese expatriates

・ Companies dealing with transportation, natural resources are expanding their business overseas

・ The number of the companies operating overseas (, Japanese expatriates) are recovering （potential market）

■Business Policy

■ Plus Factor ■ Minus Factor

Will refine IT and operation process that are enable to meet to change of external environment. Thus company can work on an early realization of operation efficiency, high-value customer services, for that increasing market share

Will bolster sales to the company which is expanding their business overseas

Will offer the total BPO solution proposal to the casualty insurance company in addition to the current claim handling and payment services

By Segment – Insurance Business 1

Business Environment


%

Operating Income

Sales


FY 2013（Target）

FY 2012（Target）

FY 2011（Target）



■ Plan detail

Through entry into a captive insurance market, it’s possible to expand the current medical insurance program (Healthcare Program) in foreign countries

In order to expand existing business, one of the options is for the company to proactively drive strategic alliances with medical assistance companies (M&A), so that the company is able to establish a comprehensive medical related support structure

The company currently provides a warranty extension and maintenance service and will add an audit function to current services in order to increase the value and reinforce value positioning

The company that will meet and preserve the standards of regulations bolster sales for increasing market share by recruiting sales person after rental guarantee system will be legitimized in 2010

4,281651

15.2

6,367833

13.1

9,2591,09711.9

2,408456

18.9

+6,851+641

+284.5%+140.6%

By Segment: Insurance Business 2

Targets


%

Operating Income

Sales


FY 2013（Target）

FY 2012（Target）

FY 2011（Target）



Will bolster sales by encouraging cooperation between the holding company, Asia-Oceania, US and Europe branches, to target foreign company that intend to enter the Japan and Asian markets

■Business Policy

Will standardize existing business customer services and improve business operation efficiency, to increase cost competitiveness and create new value services in order to increase client’s value

3,060478

15.6

3,942559

14.2

5,173718

13.9

+2,550+262

+97.2%+57.5%

2,623456

17.4

By Segment: CRM business

Targets


%

Operating Income

Sales


FY 2013（Target）

FY 2012（Target）

FY 2011（Target）



long-term resident

（Long-Term + Resident）

CardholdersMarket

share

USA 350,000 30,000 8.5％

CHINA 110,000 3,300 3.0％

Hong Kong 25,000 2,700 10.8％

■Business Policy

Will shift the marketing activities from Japanese expatriates to residents in order to double the number of cardholders

Will increase new accounts by formulating a new marketing strategy with an alliance airline company

For expanding current CHINA and Hong Kong card business, company will serve as a stepping stone to other Asian country

1,492386

25.9

1,600388

24.2

1,752392

22.4

1,638370

22.6

+114+22

+7.0%+5.9%

By Segment: Card Business

Targets


%

Operating Income

Sales


FY 2013（Target）

FY 2012（Target）

FY 2011（Target）



Will develop new business to be central of IT business in addition to current supply chain management (SCM) business

Will expand existing business into Asia area not limited to Japan market

Will provide the necessary staff to support system administration for the group in order to improve administrative efficiency

■Business Policy

54813

2.5

70025

3.6

85040

4.8

44685

19.1

+404- 45

+90.6%- 47.1%

By Segment: IT Business

Targets


%

Operating Income

Sales


FY 2013（Target）

FY 2012（Target）

FY 2011（Target）



■Business Policy

Will offer recruiting and training business proactively that it’s accumulated by BPO business

Will concentrate management resource on training business from temporary staffing services

Will develop new clients to expand training business

17821

11.8

21125

11.9

25228

11.4

23220

8.6

+20+8

+8.6%+40.0%

By Segment: Temporary Staffing Services & Other Business

Targets

3rd medium-term business plan - prestigein.com€¦ · nov established kanto roadside assistance...

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