fy2/12 second quarter results presentation october 4,2011 · 2018. 1. 30. · operating...

1

October 4,2011 Code: 2178

URL http://www.tri-stage.jp/

FY2/12 Second Quarter Results Presentation

2

Highlights

Sales declined due to deterioration in the market environment resulting from the earthquake disaster, deflation and other factors.

Operating Income was down year on year due to increases in SG&A expenses.Net Sales ¥8,966million（ YoY change down 4.4％）

Operating Income ¥593million（YoY change down 8.7％）

FY02/12 2Q results fell slightly short of forecasts, but performance is essentially in line with plan.

FY02/12 2Q sales and operating income fell slightly short of forecasts, but performance is essentially in line with plan.

Net Sales progress rate 97.8％Operating Income progress rate 97.0％

Part 1 : FY2/12 2Q Results

Part 2: Progress vs FY2/12 Forecast and Full-Year

Part3: Our medium-term business strategies and the launch of initiatives to gain new business.

No change in our medium-term business strategies. We are seeking further business growth through expansion of existing business, and the launch of

initiatives to gain new business.We decided to acquire treasury stock in order to provide returns to

shareholders, pursue a flexible capital policy, and enhance corporate value.

3

Contents

Part 1 : FY2/12 2Q ResultsPart 1 : FY2/12 2Q Results

Part 2: Progress vs FY2/12 Forecast and Full-YearPart 2: Progress vs FY2/12 Forecast and Full-Year

Part3: Our medium-term business strategiesand the launch of initiatives to gain new business.


Reference MaterialsReference Materials

4

FY2/12 2Q Results Highlights①

FY2/122Q

FY2/112Q

FY2/102Q

FY2/122Q

FY2/112Q

FY2/102Q

FY2/122Q

FY2/112Q

FY2/102Q

10,000

0

2,000

4,000

6,000

8,000

1,750

1,250

750

0

250

500

1,000

1,500

9,375

977 866

650

- 4.4%

-8.7％

593

1,168

1,750

1,250

750

0

250

500

1,000

1,500

-2.9％

1,006

8,966

Net Sales YoY down 4.4％, Gross Profit YoY down 2.9％, Operating Income YoY down 8.7％

8,258


Net Sales Gross Profit Operating Income

(¥ mn) (¥ mn) (¥ mn)

5

FY2/112Q

（Actual）

FY2/122Q

（Actual）

Increase/Decrease

YoYChange

Net Sales 9,375 8,966 -408 -4.4%Cost of Sales 8,369 7,989

（％） (89.3%) (89.1%)

Gross Profit 1,006 977 （％） (10.7%) (10.9%)

SG&A Expenses 355 383 （％） (3.8%) (4.3%)

Operating Income 650 593 （％） (6.9%) (6.6%)

Ordinary Income 652 596 （％） (7.0%) (6.6%)

Net Income 384 352 （％） (4.1%) (3.9%)

-4.5%

-2.9%-28

-379

-8.7%

-8.2%

+7.7%

-8.7%

-31

-56

-56

+27

FY2/12 2Q Results Highlights②



（￥mn)

6


Results by Quarter

2Q

FY2/12FY2/11FY2/10

1Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q

2Q

FY2/12FY2/11FY2/10

1Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q

10,000

0

2,000

4,000

6,000

8,000 1,250

750

0

250

500

1,000

1,500-4.4％-2.9％

-8.7％8,966

8,258

977

593

1,168

866

9,375

1,006

650

1,250

750

0

250

500

1,000

1,500

2Q

FY2/12FY2/11FY2/10

1Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q


（￥mn）（￥mn）（￥mn）

Net Sales Gross Profit Operating Income

（￥mn）

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

Net Sales 8,000 8,258 8,785 9,208 9,137 9,375 9,230 9,829 9,381 8,966 Gross Profit 1,240 1,168 1,163 1,284 1,119 1,006 1,012 1,387 963 977 Operating Income 964 866 853 934 798 650 639 1,131 591 593

Gross Profit Margin 15.5% 14.1% 13.2% 13.9% 12.3% 10.7% 11.0% 14.1% 10.3% 10.9%Operating Margin 12.1% 10.5% 9.7% 10.1% 8.7% 6.9% 6.9% 11.5% 6.3% 6.6%

FY2/10 FY2/11 FY2/12

7

Net Sales

Sales declined due to deterioration in the market environment resultingfrom the earthquake disaster, deflation and other factors.

However, several new customer companies have become more active,including from new industries.


（￥mn）

FY2/112Q

（Actual）

FY2/122Q

（Actual）

Increase/Decrease

YoYChange

Net Sales 9,375 8,966 - 408 -4.4%Solution Sales 9,294 8,894

（％） (99.1%) (99.2%)

Product Sales 80 71 （％） (0.9%) (0.8%)

-4.3%

-11.2%

- 399

- 9

8

FY2/112Q

（Actual）

Costcomposition ratio

FY2/122Q

（Actual）

Costcomposition ratio

Increase/Decrease

YoYChange

Cost of Sales 8,369 7,989 （％） (89.3%) (89.1%)

7,295 6,775 （％） (77.8%) (75.6%)

TV (programs) 4,943 4,793 （％） (52.7%) (53.5%)

TV (commercials) 2,076 1,794 （％） (22.1%) (20.0%)

Other 276 187 （％） (2.9%) (2.1%)

Outsourcing Costs 1,002 1,149 （％） (10.7%) (12.8%)

Cost of Goods Sold 71 63 （％） (0.8%) (0.7%)

Gross Profit 1,006 977 （％） (10.7%) (10.9%)

Media AcquisitionCosts

100.0%

0.8%

84.8%87.2%

59.1%

24.8%

+146

-7

60.0%

22.5%

-10.0%

+14.7%

-31.9%

-13.6%

-3.0%

-7.1%

-4.5%-379

-519

-149

-281

100.0%

-2.9%

3.3%

12.0%

2.4%

14.4%

0.8%

-28

-88

Cost of sales declined as a result of the

downturn in the media

buying environment,

and our inability to purchase

media to meet customer needs.

Cost of Sales, Gross Profit

Cost of sales declined as a result of the downturn in the media buying environment,

and our inability to purchase media to meet customer needs.Gross profit was on a par with the previous fiscal year

Increase involume of call

center operations


（￥mn）

9

FY2/112Q

（Actual）

FY2/122Q

（Actual）

Increase/Decrease

YoYChange

SG&A Expenses 355 383 （％） (3.8%) (4.3%)

Personnel Costs 190 222 （％） (2.0%) (2.5%)

Depreciation 10 11 （％） (0.1%) (0.1%)

Other 155 150 （％） (1.7%) (1.7%)

Operating Income 650 593 （％） (6.9%) (6.6%)

No. of Employees 84 105 +21 +25.0%

+9.7%

-3.2%

-8.7%

+7.7%

+16.6%

+0

-5

-56

+27

+31

SG&A Expenses, Operating Income

SG&A expenses up 7.7% year on year. The personnel recruitment was positively executed.

– Number of regular employees up 25.0% year on year.

Increase of 21regular

employees (7 new

graduates, 14 mid-career

hires)


（￥mn）

■

10

FY2/112Q

（Actual）

FY2/122Q

（Actual）Operating C/F 294 565Investing C/F -1,473 -496Financing C/F 5 -148

2,116 1,031Cash and cash equivalents

Financial Position

End of FY2/12 2Q

End of FY2/11

Strengthened financial base

Income before income taxes up ¥1,154millionDecrease in accounts payable-trade down ¥102millionDecrease in accounts receivable-trade up ¥7millionIncome taxes paid down ¥529milion

Liabilities and Net Assets

Decrease in accounts

Payable-tradedown ¥102million

Increase in cash anddeposits

up ¥370million

Decrease in accounts receivable-

tradedown ¥7million

current assets noncurrent assetscurrent liabilities

Increase in retainedearnings

up ¥529million

11,467

11,165

302

7,396

3,563

27

End of FY2/12 2Q

End of FY2/11

10,000

0

2,000

4,000

6,000

8,000

10,98810,000

0

2,000

4,000

6,000

8,000

10,988

10,750

237

7,927

3,465

75

Dividend payments down ¥149milion

11,467


Balance Sheets

Assets

Cash Flows

noncurrent liabilities net assets

（￥ｍｎ）（￥ｍｎ）

（￥ｍｎ）

11

Contents






12

Progress vs FY2/12 Forecast and Full-Year

1H results fell slightly short of forecasts,

but performance is essentially in line with plan.


（￥mn）

FY2/12First Half

（Forecast）

FY2/12First Half（Actual）

Increase/Decrease

ProgressRate

FY2/12Full year

（Forecast）

ProgressRate

Net Sales 18,760 18,347 -412 97.8% 40,102 45.8%Operating Income 1,222 1,185 3,018

（％） (6.5%) (6.5%) (7.5%)

Ordinary Income 1,222 1,189 3,018 （％） (6.5%) (6.5%) (7.5%)

Net Income 684 679 1,726 （％） (3.7%) (3.7%) (4.3%)

-36

-32

-4

39.4%

39.3%

39.4%99.3%

97.0%

97.3%

13

Summary of FY2/12 1H Sales (Comparison with Forecasts)

Sales fell short of forecasts by 2.2%.

FY02/121Q

actual

18,512

18,347

9,381

8,966

18,760

FY02/12 1H forecastYoY up 1.3％

FY02/12 1H results¥18,347million down 2.2％ (vs1H forecast)

down 0.9%(YoY)→Performance is essentially in line with plan.

FY02/121H

forecast

Net Sales

FY02/122Q

actual

FY02/111H

actual

FY02/121H

actual

（￥mn）


14

Summary of FY2/12 1H Operating Income (Comparison with Forecasts)

Operating Income was 3.0% short of forecast, due mainly to the decline insales and an increase in SG&A expenses.

1,451

1,222

591

593

FY02/12 1H forecastYoY down 15.8％→Performance is essentially

in line with plan.

FY02/12 1H results ¥1,185mn down 3.0％ (vs1H forecast)

down 18.3%(YoY)→Operating income fell slightly short of

forecasts, but performance is essentially in line with plan.

1,185

FY02/111H

actual

FY02/121H

forecast

FY02/121Q

actual

FY02/122Q

actual

FY02/121H

actual

（￥mn）

Operating Income


15

Current Status and Outlook – Client Companies

1Q

FY2/12FY2/11FY2/10

2Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q

70

60

50

0

10

20

30

40

Client companies continue to express strong willingness to make media placements.Proactive efforts toward new industries have resulted in a steady

increase in the number of new client companies. Share of net sales by top five client companies down year on year.

55

114

8

32

48

26

92

11

67

38

95

15

（¥mn）12,000

10,000

0

2,000

4,000

6,000

8,000

20%

100%

80%

60%

40%

0%

60.8%54.6% 53.9%

1Q

FY2/12FY2/11FY2/10

2Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q


Analysis of Client Base by Sales Level

Over ¥250 million ¥125 million to ¥250 million

￥50 million to ¥125 million

Other

(Number of clients)

Net sales Top-5 Clients’ Share of Net Sales

Net Sales and Top-Five Clients' Ratio of Net Sales

Sales scale

expansion

16

Current Status and Outlook – Media Buying

6,000

4,000

5,000

1,000

0

2,000

3,000

1,841

345

4,4714,434

1,334 1,488

4,7285,050

1,671

267179 188 270

1,674

4,710

Media buying declined as a result of the downturn in the media buying environment,

and our inability to purchase media to meet customer needs.Because client media needs remain strong, mainly for television,

we are considering aggressive media buying plans to meet these needs.

4,9004,879 4,8954,943

2,076 2,1351,828

2,086

276 244 317 224 187

1,794

4,793

1Q

FY2/12FY2/11FY2/10

2Q

4Q

3Q

2Q

1Q

4Q

3Q

2Q

1Q


Purchases of TV Program and TV Commercial Slots

TV(commercials)TV (programs) Other media buying

（￥mn）

17

Contents






18

＜Management policies＞

Attain the position of leading company in the direct marketingsupport business

Enter the overall direct marketing market

＜Medium-term business strategies＞

The first phase ● Establish business model (total solutions)● Enhance credibility and public profile

The second phase● Measures to expand existing business● Strengthening of solution services● Development of cross-media business

The third phase● Commence development of B-to-C business● Consider development of overseas direct marketing

support services

Management Policies and Medium-Term Business Strategies

No change in management policies or medium-term business strategies.We continue to consider FY2/10 the Second Phase of our strategy,

and are seeking business expansion.


19

Overview of Second Phase Strategies

Expand existing business focused on support for TV shopping, expand business fields for support of direct marketing,

and secure an overwhelming leading position in direct marketing support.

Radio,Newspapers,Magazines,

Internet,Mobile devices,

Out of home

TV(Programs),

TV(commercials)

Business Planning, Creative Planning, Media Planning,Order Management, Performance Analysis

ProductDevelopment

Data Processing, Distribution and

Payment, CRM

media

Direct marketing support business field

HouseholdMiscellaneous,

Beauty, Health food

Conceptual Diagram of Second Phase Strategies

１ Measures to expand existing business

３ Development of cross-media business

２ Strengthening of solution services

service

etcCategory


20

The expansion of existing business, and the launch of initiatives to gain new business.

We have launched more proactive measures for new industries (such as services to acquire members)

①Initiatives for our internet landing page and live streaming commerce site “namacoma”

②Strengthen services for radio, newspapers, and flyer inserts

Launch direct marketing support services overseas on a project

basis

①Begin using order and effectiveness analysis tools

②Begin test runs for CRM services

The expansionof existing business

Consider development of overseas direct marketing

support services

Developmentof cross-media business

Strengthening of solution services


21

717

499

0

100

200

300

400

500

600

700

800

04 08 10

2,077

16,030

12,059

8,630

6,1644,425

3,104

32,965

25,322

22,348

28,156

30,781

19,264

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

00 01 02 03 04 05 06 07 08 09 10 11 12

Trends in Internet Shopping and SNS Markets

Internet shopping sales are projected to exceed 3 trillion yenin fiscal 2011.

Sales growth is expected to continue.

Source:2010-2011 Direct Marketing and eCommerce Market: Situation and Outlook, Nov. 2010, Fuji-Keizai Co., Ltd.

（Ｅ）

0.1

Trends in Internet Shopping SNS Markets

The SNS market is expected to continue to grow rapidly.

Source: Estimate Economic Effect of Blogs and SNS Sites, July 2009, Research Division, Institute for Information and Communications Policy, Ministry of Internal Affairs and Communications

499

717717


(¥ 100mn) (¥ 100mn)

(Projection) (Projection)

22

Usage amon

g

young age g

roup

Interactive

communicat

ion

Strength of

Social Medi

a Can be used anytime

Be able to take a close

look at products

Strength of Commerce

Sell products on video image

Total support of direct marketing

Strength of Tri-Stage

Social Commerce Media

Feature of ‘Namacoma’

Easy to createa live program

compared to TV

Strength of Web


23

Structure of ‘Namacoma’Part3: Our medium-term business strategies and the launch of initiatives to gain new business.

Live movie play area

Past live archive

Products(search by genres)

Program search

Live Twitter display

Jump to products’website

Official Twitter display

Official Blog

FAQ Sitemap Operator Information

24

Decision to acquire treasury stock

Decision to acquire treasury stock （ record date of September 30, 2011）

Shareholder returns

We will exercise a flexible capital policy responsive to changes in the business environment, and enhance corporate value.


Type of shares to beacquired

Tri-Stage common stock

150,000 shares (upper limit)

　(Proportion of total issued shares (excludingtreasury stock)　1.99％)

Total acquisitionamount of shares

200,000,000　yen(upper limit)

Acquisition period October 4,2011～December 30,2011

Acquisition method Market purchase

Details of the share acquisition

Total number ofshares to beacquired

25

Contents






26

Analysis of Client Base by Sales Level

(Number of clients)

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2QOver ￥250million 7 9 10 9 9 11 11 12 10 9

￥125 million to ￥250million 4 2 3 3 6 4 5 6 6 5￥50 million to ￥125 million 8 11 9 5 8 8 7 5 8 15

Other 26 26 31 33 31 32 40 39 41 38Total 45 48 53 50 54 55 63 62 65 67

FY2/12FY2/11FY2/10

Reference Materials

27

Company Profile

Established March 2006 Head Office 2-4-1, Shiba-koen, Minato-ku, Tokyo, Japan Representatives Isao Senoo (CEO); Akio Maruta(COO) Business Content Support services for direct marketing,

centered on television shopping sales Capital ¥634million (As of August 31, 2011) Shares Issued 7,530,300shares (As of August 31, 2011) No. of Employees 105 (As of August 31, 2011)

Providing a phone number, URL or other contact information through TV,

Internet or other media outlets, and selling products and services through

direct, interactive communication with consumers via telephone or email.

Definition of “Direct Marketing”

Reference Materials

28

We will contribute to society as a company that striveswholeheartedly to resolve issues in order to properly establishbonds between our clients’ products and services and consumers.

Philosophy, Creed and Management Principles

CorporatePhilosophy

The consumer’s satisfaction is the client’s satisfaction, and ours.Company

Creed

ManagementPrinciples Speedy Going Concern Innovation

Reference Materials

29

Business Domain

The direct marketing value chain

CRMDistribution

andPayment

Data ProcessingPerformanceAnalysis

OrderManagement

MediaPlanning

Creative PlanningBusinessPlanning

Product Development

Pro

duct

sel

ecti

onan

d pr

icin

g

Con

cept

sel

ecti

on a

ndpr

ogra

m p

rodu

ctio

n

Med

ia s

ched

ule

and

obta

inin

g sp

ace

Ord

er m

etho

d se

lect

ion

and

man

agem

ent

Com

pilin

g or

der

and

ship

ping

dat

a

Det

erm

inin

g th

e sh

ippi

ng

and

sett

lem

ent

met

hod

Form

ulat

ing

stra

tegi

es f

orim

prov

ed c

usto

mer

sat

isfa

ctio

n an

d co

ntin

ued

sale

s

Bus

ines

s pl

an a

nd

stra

tegy

for

mat

ion

Eff

icie

ncy

eval

uati

on a

ndan

tici

pati

on o

f fu

ture

res

ults

Comprehensive Suite of Services for Direct Marketing

Exa

mpl

e of

Tri

Exa

mpl

e of

Tri

-- Sta

geS

tage

’’ s s

Sol

utio

ns L

ineu

pS

olut

ions

Lin

eup

Reference Materials

30

Tri-Stage acquires the various services necessary for TV shopping from suppliers and outsourcers.

We then add our unique expertise to provide client companies with comprehensive support for direct marketing.

Suppliers/Outsourcers

Client Companies Tri-Stage

Provide Solutions

Various services

Purchase Solutions

Consumers

Products

Payment

Advertising agency

Program/creative producer

Call centers

Logistics companies

etc

Tri-Stage’s Business ModelReference Materials

Purchase payments

3131

Source of Competitiveness (Strengths)

Many premium TV time slotsMany premium TV time slots Order management expertise Order management expertise Data analysis capabilitiesData analysis capabilities

Pre-purchasesLarge volume purchasesFixed period purchases

Comprehensive order managementat call centers

In-house developed quantitativeassessment system

Maximize cost-effectivenessby lowering media costs

Maximize the lifetime valueof customers and products

Effective media typeand creative planning

Total solutions based on data analysis

Help expand business for companies using direct marketing

1. Media: Media ratio (sales to ad costs)1. Efficient call center management

2. Content: Monitoring system2. Response scripts (talk manuals)

3. Order Management: Various data evaluation systems

Reference Materials

32

Current Status and Outlook- TV Shopping Market Trends and Future Measures

Tri-Stage Other companies

31.6％31.6％

December 2010

Tri-Stage has an approximately 30% or more share of the market for terrestrial TV shopping programs.

There are still many TV program slots available to us, and we expect an expansion in market share.

31.6％

March 2011

The share of the market for terrestrial TV shopping programs

TV shopping programs of 3minutes,4minutes,14minutes,29minutes and 54minutes

June 2011

Source: Tri-Stage, random three-week average in May, August and December 2010

Source: Tri-Stage, random three-week average in August, December 2010 and March 2011

Reference Materials

Source: Tri-Stage, random three-week average in December 2010 and March and June 2011

33

38,648

52,43449,233

42,43146,032

55,39758,029

21,67923,131

24,71026,910

29,837

34,042

20,914

0

10,000

20,000

30,000

40,000

50,000

60,000

99 00 01 02 03 04 05 06 07 08 09 10 11 12

Direct Marketing (Merchandise) Trends

Appearance of full-time TV shopping

channelsNumerous on-line shopping services established

Increase in PC ownership and the Internet

Satellite digital broadcasts begin

（E） (Projection)

Direct marketing (merchandise) — ¥5.5 trillion market in FY2011

Reference Materials


(¥ 100mn)

(Projection)

34

OtherRetail outlets

インターネット

54%カタログ28%

テレビ

8%

Internet

54%

28％

TV8%

3,074

3,5573,747

3,9064,0444,0054,0093,934

1,8901,606 1,564

1,714

2,198

2,595

0

1,000

2,000

3,000

4,000

5,000

99 00 01 02 03 04 05 06 07 08 09 10 11 12

(億円 )

Direct Marketing (TV Shopping) Trends

【 Market Share by Media Type 】

【 TV Shopping Market 】

Satellite digitalbroadcasts begin

Appearance of fulltimeTV shopping channels

(E)

Sales through Internet, TV and mobile devices growing

Level-off or marginal rise tendency and forecast

Catalogs

MobileDevices

8%

20105.2 trillion

up6.5% YoY

１％

１％

Reference Materials

(Projection)


3535

FAQ

・ We do not recognize any other company as a true competitor at this point.・ While there is always the potential for a competitor to arise in the future,

we believe that our expertise founded on many years of experience, along with continual refinements that will enable us to retain the highest skill levels, will allow us to remain solidly competitive (in terms of market share, skill, expertise and personnel).

There are three methods: (1) a fluctuating rate based on client company sales and other results on top of costs from services provided; (2) a fixed fee on top of total costs from services provided; and (3) a fixed percentage of client company sales.

What is the potential for the rise of competitors?

How does Tri-Stage charge client companies?

・ The benefits of cross media are (1) greater earnings from new markets and an increase in customers; (2) an increase in sales synergies from cross-selling; and (3) reduced risk of earnings fluctuation. We feel that cross-media marketing will allow us to both increase earnings and reduce risk.

・ We are aggressively hiring new graduates each year, equalizing our age groups.

・ We will invest to expand business, including investing in internal IT systems, paying deposits to suppliers, and promoting the development of cross-media marketing.

How will earnings change with the increase in cross-media marketing?

What are your plans for increasing personnel (consultants), and your investment plans (financing needs)?

・ We expect the market for direct marketing to continue to grow, though the rate of growth is slowing as the market scale expands overall.

Will the market for direct marketing continue to grow?

Reference Materials

36

Contact

2-4-1, Shiba-koen, Minato-ku, Tokyo 105-0011, Japan

Head Office

Tri-Stage inc.Management Adiministration Dept.

Contact

81-3-5402-4111TEL

[email protected]

http://www.tri-stage.jpURL

Reference Materials

37

Disclaimer

Forecasts regarding future earnings presented in this presentation are estimated by the Company based on information available at the time of release, and include risks and other uncertainties. Accordingly, there is no guarantee that the Company will achieve these forecast figures.

Changes in the internal circumstances of the Company or external business environment may have an impact, whether direct or indirect, on the Company’s earnings. Please be aware of the possibility that the forecasts presented in this presentation may change.

fy2/12 second quarter results presentation october 4,2011 · 2018. 1. 30. · operating...

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