business results fy2012 - 大塚商会consulting business 163 1,822 net world corporation sales and...

Copyright©2013 OTSUKA CORPORATION All Rights Reserved.

Business Resultsfor the fiscal year ended December 31, 2012

Yuji Otsuka, President

February 1, 2013

OTSUKA CORPORATION

Copyright©2013 OTSUKA CORPORATION All Rights Reserved. 1

(Millions of yen)

Consolidated Non-Consolidated

Amount Ratio to Plan *

Change toLast Year Amount Ratio to

Plan *Change to Last Year

Net sales 515,771 102.6% +7.9% 474,259 101.8% +6.7%

Operating income 28,251 106.2% +22.3% 25,300 105.0% +20.9%

Ordinary income 29,079 106.5% +24.7% 26,053 105.0% +20.5%

Net income 16,277 106.6% +27.7% 14,500 104.8% +15.8%

Summary of Business Results,January – December, 2012

* Plan amended on August 1, 2012


Segment Company name Business domain Number of

employeesFY 2012 Net sales

(Millions of yen)

S I

OSK Co., LTD. Development and sale of packaged software 233 5,806

Net plan Co., LTD Electronic communications construction and interior construction 93 10,357

Alpha System Co., LTD. Consigned software development and ERP consulting business 163 1,822

Net World Corporation Sales and technology support for network-related equipment 325 53,071

S & S

Alpha Techno Co., Ltd Emergency repair of PC and peripheral equipment and data recovery service 318 4,503

Alpha Net Co., Ltd Comprehensive service and support for network systems 310 4,793

Others Otsuka Auto Service Co., Ltd Maintenance and body work for automobiles, and

commissioned sales of insurance 23 510

Consolidated subsidiaries


The environment was characterized by a slowdown in the global economy and mild recession in Europe. The economy in emerging countries showed signs of picking up while the U.S. economy remained on a gradual recovery path. Exports declined and production showed signs of bottoming out. Strong yen is being corrected, stock prices rose and power supply constraints continued. Reconstruction-related demand continued and the number of corporate bankruptcies remained at the same level. Investment in facilities and equipment was sluggish.

The domestic economy is weak, but has showed signsof bottoming out in some areas.

External Environment

IT investments achieved steady growth.3


• System proposals that lead to cost reductions, improvement of productivity and strengthening of competitiveness

• Strengthening of customer contact and frontline

• Activities “participated in by all employees”

• Strengthening of accumulated business: “tanomail” and “tayoreru”

• BCP measures and proposals for reducing power consumption

OTSUKA Group’s Activities

4


463,493 478,215515,771

19,01323,095

28,25119,508

23,315

29,079

12,74416,277

10,631

0

200,000

400,000

600,000

FY 2010 FY 2011 FY 20120

15,000

30,000

45,000

Net sales Operating incomeOrdinary income Net income

Net sales and ProfitsConsolidated

(Millions of yen)

Net salesOperating incomeOrdinary incomeNet income


104.6 114.5119.5

124.7118.3110.7

125.1123.9

131.5135.4 130.9 117.7

0

20

40

60

80

100

120

140

160

1Q 2Q 3Q 4Q

FY 2010 FY 2011 FY 2012

6

Consolidated Quarterly change of Net sales

(Billions of yen)


5,079

7,449

2,101

4,877

9,011

5,293

3,629

5,381

7,318

4,367

10,169

7,224

0

2,000

4,000

6,000

8,000

10,000

12,000

1Q 2Q 3Q 4Q

FY 2010 FY 2011 FY 2012

7

Quarterly change of Ordinary income

Consolidated

(Millions of yen)


6321,1301,942

225,298214,576208,008

289,840262,508253,541

0

200,000

400,000

600,000

FY 2010 FY 2011 FY 2012

463,493515,771

478,215

Net sales by segmentsConsolidated

(Millions of yen)SI business S&S business Other business


106,663 110,944106,981

111,408104,12698,048

32,15329,66528,072

200,135 203,852 219,753

0

200,000

400,000

600,000

FY 2010 FY 2011 FY 2012

432,919474,259

444,625

Net sales by 4 segmentsNon-Consolidated

(Millions of yen)SI related products Custom-made software, etc.

Supplies

Maintenance, etc.


-5.4

7.69.6

5.5

23.7

6.6

-5.9

2.8

9.1

3.3

7.0

12.3

16.1

7.5

2.5

1.7

11.1

-7.7

-16.0

7.9

5.0

8.85.6

7.8 11.8

-4.2

7.1 7.18.5

7.18.5

2.6

6.67.1

7.7

6.2

6.8 7.27.3

-0.8

2.3

-0.9

-1.1

2.01.2

4.0

5.1

2.5 3.1-2.1

0.1 0.0

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

SI related products Custom-made software etc.Supplies Maintenance, etc.

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY 2009 FY 2010 FY 2011 FY 2012

10

( % )

Non-Consolidated

Quarterly Net Sales by 4 segments( % change year-on-year )

SI related products 12.3Custom-made software etc. 11.8 Supplies 7.2Maintenance, etc. 3.1


25.8

17.8

23.1

-4.8-7.5

-4.6 -5.1-5.2 -4.2-10

-5

0

5

10

15

20

25

30C/F from operating C/F from investing C/F from financing

Cash flowsConsolidated

(Billions of yen)

FY 2010 FY 2011 FY 2012


128,471116,633

108,255

7,802 8,415 9,367

50.750.850.7

3.73.73.70

40,000

80,000

120,000

As of Dec. 31, 2010 As of Dec. 31, 2011 As of Dec. 31, 20120

20

40

60

Equity Interest-bearing debtEquity ratio Interest-bearing debt ratio

Equity and Interest-bearing debtConsolidated

(Millions of yen) ( % )


27.94% 28.31% 43.75%

27.58% 28.83% 43.59%

26.50% 29.18% 44.32%

0% 20% 40% 60% 80% 100%

FY 2010

FY 2011

FY 2012

Less than 1 billion of yen 1 to less than 10 billions of yen 10 billions of yen and above

Net sales structure on customers’ total annual business scale

Non-Consolidated

* “Less than 1 billion yen” includes public offices.


Manufacturingindustries

23.93%

Wholesaleindustries

20.98%

Buildingindustries

8.14%

Retailingindustries

4.57%

Education,Public offices

4.75%Service

industries29.27%

Lease, Creditfirms, etc.

8.36%

FY 2012

Sales breakdown by customers’ type of industryNon-

Consolidated


2,641

3,418

1,850

194

8,103

（32.6%）

（42.2%）

（22.8%）

（2.4%）

Personnel organization(regular employees)

Consolidated

As of Dec. 31, 2012

Technical personnel

Sales personnel

Corporate staff

Others


195.5 212.8202.4

187.9184.0

170.8151.7

134.0

116.6102.0

89.783.681.585.280.088.8

70.463.557.852.950.0

44.945.545.246.842.1

39.037.7

35.234.0

32.230.127.525.9

28.927.424.2

22.124.125.126.125.0

0

50

100

150

200

250

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

10

20

30

40

50Net sales of Supplies and Maintenance agreement

Accumulated business sales share

Accumulated business sales share (%)

Non-Consolidated Growth of accumulated business

Net sales of Supplies and Maintenance agreementAccumulated business sales share

As reference (1992-1999)

Net sales of Supplies and Maintenance agreement(Billions of yen)


0

100,000

200,000

300,000

400,000

500,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201260

70

80

90

100

110Net salesBreak-even point ratio

81.0%

Change of Net salesand Break-even point ratio

Non-Consolidated

(Millions of yen) ( % )


45,000

47,500

50,000

52,500

55,000

57,500

60,000

62,500

65,000

67,500

70,000

72,500

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500Net sales per employeeOperating income per employee

Number of employees 6,621 6,316 6,272 6,251 6,236 6,222 6,294 6,297 6,379 6,585 6,736 6,778 6,760 6,684 6,638

Non-Consolidated

Change of Net sales per employee and Operating income per employee

Operating income per employee (Thousands of yen)

Net sales per employee (Thousands of yen)

Relative to 1998Net sales per employee increased 51.7%Operating income per employee grew 11.9 times

(Difference to last year, -46)

Operationof “SPR”

Full operation of“DAISENRYAKU”

Full-fledgedoperation of

“SPR”


Support Innovation through “S-SPR”Support Innovation through “S-SPR”

• “SPR” for Support Engineer.

• Realize one-stop support to enhance customersatisfaction and increase productivity.

• Develop multi-skilled engineers and promoteautomatic assignment of suitable engineers.


Overview of “S-SPR”Overview of “S-SPR”

One-stop support

Reform of support operation processes (promote automatic assignment, etc.)

Realize expansion of support business and sufficient support without increasing manpower

Develop multi-skilled engineers and promote centralization

Behavior management of engineers and management reform

Efforts toward resolving issues

Aims of “S-SPR”Enhance

technological capability

Increase productivity

Enhancecustomer

satisfaction


95

100

105

110

115

2008 2009 2010 2011 2012

Maintenance of the number of copiers conducted per engineer(index number)

113.0

Results of “S-SPR” (1)Results of “S-SPR” (1)

Maintenance of the number of copiersconducted per engineerincreased 13.0% vs. 2009


66%

68%

70%

72%

74%

2008 2009 2010 2011 2012 2013

Direct man-hours ratio

72.6%

67.0%

(73.7%)

Results of “S-SPR” (2)Results of “S-SPR” (2)

Direct man-hours ratioIncreased 5.6 percentage pointsvs. 2009


<Amount of Sales> (Millions of yen)

FY 2010 FY 2011 FY 2012

Amount AmountChange to Last year

AmountDifference to

Last yearChange to Last year

“tanomail” 100,980 107,934 +6.9% 117,381 +9,447 +8.8%SMILE 6,708 7,774 +15.9% 9,006 +1,231 +15.8%ODS21 38,778 40,680 +4.9% 42,226 +1,546 +3.8%OSM 43,887 47,113 +7.4% 48,069 +955 +2.0%

<As reference: Number of Sales> (Units)

Copier 27,003 29,153 +8.0% 32,104 +2,951 +10.1%(of whichColor copier) 21,703 24,296 +11.9% 27,332 +3,036 +12.5%

Server 36,405 37,582 +3.2% 39,205 +1,623 +4.3%PC 666,332 697,057 +4.6% 714,616 +17,559 +2.5%

(ODS: Otsuka Document Solutions OSM: Otsuka Security Management)

Key strategic businessNon-Consolidated


100,980107,934

117,381

22,234

7,152

6,004

4,555

4,218

3,776

2,465

2,313

1,128

92,99089,192

82,493

71,088

59,062

46,369

33,036

19,885

9,6193,302545

2,5523,245

11,335

16,76625,212

0

20,000

40,000

60,000

80,000

100,000

120,000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Accounts of “tanomail” 506 133,105 153,609 169,148 322,720 385,895 448,812 506,263 564,489 626,932 698,999 773,882 849,567 932,547

Annual sales transition of “tanomail”Non-Consolidated

(Millions of yen)

Non-“tanomail” MRO“tanomail”

Started “tanomail”

“MA tanomail”

“personal tanomail”

“tanomail plus”

TANOSEE

Procurement service for large company

Procurement ASP service

Private brandMail-orderservice forindividual “tanomail” achieved

sales of over100 billion yen

Alliance withLION OFFICE PRODUCTS CORP.


Support Services for Procurementand Purchase Operations

Clients in which services were

introduced (Buyers)

Suppliers

OTSUKA CORPORATION

(“tanomail”)

Supplier A

Supplier B

Supplier C

Supplier D

OTSUKA CORPORATIONASP service

“tanomail plus”

Services commenced in 2005Number companies in operation: 136 companiesPass-through amount: 65.4 billion yen (38.4% increase)

Applicant (factory)

Applicant (worksite)

Applicant (office)Approver (headquarters)

“tanomail plus”

The Internet

Orderapplication

Orderapproval

Inspectionprocess

Request for estimate

Approval of receipt and inspection

Inspectionconfirmation

Orderconfirmation

Response toestimate

Shipment process


<customer>

OTSUKA CORPORATION supports customers’ procurement duties across the board

Total support by OTSUKA CORPORATION

Information System Office

Server Room

Accounting Dept.

HR Dept.President's Office

General Affairs Dept.

Sales Dept.Office supply mail-order service

“tanomail”932,547 accounts

Procurement ASP service“tanomail plus”

136 companies

Office supply mail-order service for large company

“MA tanomail” 20,790 accounts

Mail-order service for individual“personal tanomail”

256,632 membersMerchandisefor individual

Indirectmaterial

Corporate employees, general individuals

OfficeDirect material

(As of Dec. 31, 2012)

26


81208

304384

509 560638

722822

9031,039

1,2601,162

40

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

1.26 million peopleused services in 2012

Number of Users of Main Web Services (ASP)Number of Users of Main Web Services (ASP)

(Thousand people)


Future Plans


The Basic Principle and Mid-Term Plans

< Basic principle >• Grow with customers by realizing the Mission Statement< Mid-term plans >• Workforce basically remains flat• Strive to expand business by increasing revenues and

profitsAim to achieve 7% in operating income to net sales ratioand ordinary income to net sales ratio

• Cultivate new demand by utilizing customer information• Effective use of people/materials/money to improve per

head productivity

29


• Strong demand by companies for IT utilization

• Replacement by purchase and upgrade demand

• Expansion of mobile and tablet device market

• Power supply constraints, price increases andenergy-saving needs

30

IT Market Forecast in 2013IT Market Forecast in 2013


Overview of Green University of Tokyo Project

(As of January 28, 2013)

Industry-academia cooperative consortium

Specification design WG Protocol standardization WGCommercialization WG

Concept WG Control verification WG Visualization WG

[Sectional meetings and working groups (WG)]

66 members (45 companies, 21 NPOs)

A shift toward practical business application phase based on the verification experimentsconducted at the Building No. 2 of Faculty of Engineering since 2008.

Interview about the Green Universityof Tokyo’s verification experimentsthat realize university’s smart grid

Hiroshi Esaki (Ph.D. Professor,Graduate School, University of Tokyo)

“Mini-Green University of Tokyo”Verification Experiment

- Introduction Test at the OTSUKA’s Head Office Building -

Visualization by light, air conditioning and socket

BEMS verification test conducted at The University of Tokyo using IEEE1888-supported Smart Plug

Verified interconnect technology in a multi-vendor environment

Smart Plug

Receivingdevice


Smart Plug (Measuring power consumption)

Sting

Stealth

Sting+(base unit)

StickStingSend to

base unit

Send to base unit

View data using PC with Stick

inserted

Power visualization starter pack The pack comprises 1 Stick, 1 Sting+ and3 Stings. Possible to measure 4 devices.Set price: 120,000 yen (excl. tax) Sales commenced in June 2012


LED Lights Proposed byOTSUKA CORPORATION

【Straight-tube LED lamps for office-use】LumiDas-FL series

Type-40, type-20 and type-110 LED lights are available according to customer needs.

LumiDas-C series

LED 55W (equivalent to 200~300W mercury lamp)

LED 80W (equivalent to 300~400W mercury lamp)

【Flood light-type and Mercury lamp-type LEDs for warehouses and plants】

LED 22W(General fluorescent responding to type-40)

Length: 1,198mm

LED 12.3W (General fluorescent responding to type-20)

Length: 580mm

LED 53W (General fluorescent responding to type-110)

Length: 2,367mm

LumiDas-SL series(Fixed type)

LED 80W/120W/150W

LED 200W (equivalent to 700W mercury lamps)

New productsSales commenced

in January 2013

Actively proposing to customers (Introduced at 14,000 business sites)

Newly developed top model

(Pendant type)

33


Power Reduction through PC Replacements

Laptop + LCD monitorWindows7

Approx. 60%reduction

34

Approx.111W

In the case of OTSUKA CORPORATION

Approx. 45W(Approx. 25W for

Laptop only)


OTSUKA’s Electricity-SavingCountermeasure Domains

35

Demand alarm (alarm, e-mail notification)

Demand monitoring device Eco.WebIII

Reduce basic fees

Demand monitoring device

Reduce electricity chargesLighting OA equipment Air conditioning

LAN

Lighting system

Air-conditioning system Outlet

CT sensor

G-Pilot

Router

Distribution board

PLC power supply control

Multi-circuit monitor

Visualization of power

Power line

LED lightsReplacement

with the latest laptops

Utilization of energy-saving multifunction

machines

Counterm

easure products

Visualization of individual equipm

ent

Plugwise (stealth)

Most advanced OA equipment

Plugwise 15A (Smart Plug)

Overall visualization

(BE

MS

)

Latest air conditioning unit


Policies and Measures in 2013Policies and Measures in 2013

< Slogan >“Live up to customers’ trust from a customer viewpointand vitalize office with IT”

• Strengthen customer contact by placing greater emphasison one-stop solutions and one-stop support

• Identify IT needs and needs for saving energy

• Deepen ties with existing customers while cultivating newcustomers

• Promote comprehensive proposals and combined systemproposals

• Strengthen accumulated business


536,000515,771478,215

30,50028,251

23,095

31,00029,079

23,315

12,74418,09016,277

0

200,000

400,000

600,000

FY 2011 FY 2012 FY 20130

15,000

30,000

45,000

Net sales Operating incomeOrdinary income Net income

Plans of Net sales and profitConsolidated

(Plan)

(Millions of yen)

Net salesOperating incomeOrdinary incomeNet income


6406321,130

234,400225,298214,576

300,960289,840262,508

0

200,000

400,000

600,000

FY 2011 FY 2012 FY 2013

536,000515,771478,215

Plans of Net sales by segmentsConsolidated

SI Business S&S Business Other Business (Millions of yen)

(Plan)


Review costs with ITand vitalize office

Jissen (Practical) Solution Fair 2013

Dates : February 6 (Wed) – February 8 (Fri)Venue: The Prince Park Tower Tokyo


Community

Employees

Customers

ShareholdersBusiness Partners

We live up to ourStakeholders’ confidence


1. This material is intended to provide information about the business performance of fiscal year2012 and strategy of the OTSUKA CORPORATION and Group companies. It is not intended and should not be construed as an inducement to purchase or sell stocks ofOTSUKA CORPORATION.

2. Forward-looking statements in this material with respect to OTSUKA CORPORATION’s strategies,plans, beliefs, and other statements related to future trends and performance are not historicalfacts, and as such involve risks and uncertainties. Such statements are not guarantees of futureperformance. Actual results may differ considerably from projections due to unpredictable changes to the economic situation, and a number of factors. Key factors that could affect actual results aregeneral economic conditions, social trends, change of relative competitiveness in demand actionfor products and services provided by OTSUKA CORPORATION. Key factors that may affectbusiness performance are not limited to these items described here.

3. Statements in this document are based on the current beliefs, estimates and expectations ofmanagement. OTSUKA CORPORATION undertakes no obligation to update any forward-lookingstatements.

4. OTSUKA CORPORATION shall in no event be liable for any damages arising out of the use orinterpretation of this material.

Cautionary statement

41

business results fy2012 - 大塚商会consulting business 163 1,822 net world corporation sales and...

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