Investor Presentation For the year ended on March 31, 2010

Transcription

1 Investor Presentation For the year ended on March 31, 2010 June 2010 INFORMATION DEVELOPMENT CO., LTD. 1

2 Today s Presentation 1. Consolidated Performance Overview 2. Industry Trend and Comparison with Peers 3. Forecast for the Year Ending March 31, 2011 and Strategic Direction 2

3 1. Consolidated Performance Overview Overview of ID Group Revenue and Profits / Financial Position & Cash Flows Revenue Analysis by and Customers Performance of Domestic Subsidiaries Stock Data 3

4 Overview of ID Group (As of March 31, 2010) NIHON CULTURESOFT SERVICE ID s Ownership 100% Paid-in Capital: 90M Established: 1977 No. of Employees: 419 Paid in Capital: million Established: October,1969 No. of Employees: 1,689 SOFTWARE DEVELOPMENT PURAIDO 80% 54.4% 59.5% Paid-in Capital: 100M Established: 1982 No. of Employees: 111 Paid-in Capital: 40M Established: 1988 No. of Employees:20 Paid-in Capital: 90M Established: 1992 No. of Employees:31 Paid-in Capital: $1.1M 100% Established: 2004 *ID s ownership ratios are calculated by number of shares excluding treasury stocks. ID Wuhan No. of Employees: 43 4

5 Revenue and Profits (Consolidated) ( million) Revenue Cost of Sales Gross Profit SG&A Expenses amortization of goodwill Operating Profit Recurring Profit Net Profit EPS (Yen) Mar ,458 15,018 3,439 Mar ,382 2, , , (% of Revenue) ,263 13,943 3, (% of Revenue) YOY % Changes (6.5)% (7.2)% (3.5)% +3.6% +50.6% (19.5)% (22.1)% (72.5)% % Changes to Forecast (7.4)% (7.0)% (9.2)% (2.2)% - (24.9)% (22.1)% (72.5)% (54.99) (55.86) Posting 251 million yen for the impairment of goodwill due to poor performance of C.A.T as extraordinary loss (full amount of unamortized balance for acquisition of C.A.T's stock) 5

6 Trends of Quarterly Revenue and Profits ( million) ( million) 6,000 Revenue Operating Profit 600 5,000 4,000 3,000 2,000 4,115 4,491 4, , ,237 5,129 4,650 4, ,201 4,432 4, , ,

7 Revenue and Profits (Nonconsolidated) ( million) Mar.-09 (% of Revenue) Mar.-10 (% of Revenue) YOY % Changes % Changes to Forecast Revenue 13,994 13,039 (6.8)% (6.0)% Cost of Sales Gross Profit SG&A Expenses Operating Profit Recurring Profit Net Profit 11,380 2,614 1, ,522 2,516 1, (7.5)% (3.7)% (0.7)% (9.7)% (14.3)% (83.8)% (6.1)% (5.4)% (1.5)% (12.9)% (10.5)% (83.0)% EPS (Yen) (63.59) - Posting 382 million yen loss on revaluation of C.A.T as extraordinary loss 7

8 Financial Position and Cash Flows ( million) Mar.-09 Mar.-10 YOY % Changes Current Assets Cash and Deposits Fixed Assets Total Assets Liabilities Interest-Bearing Debt Earned Surplus Total Shareholders Equity 5,187 1,894 4,867 10,055 4, ,020 5,728 4,919 1,773 4,564 9,483 3, ,034 5,743 (5.2)% (6.4)% (6.2)% (5.7)% (13.7)% (22.9)% +0.3% +0.2% Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities 913 (442) (122) 488 (255) (354) 8

9 ID s Total IT Outsourcing Services i Bos ID s Operations-Outsourcing Service Our IT Outsourcing Services Contribute to the Social Progress by Supporting IT Infrastructures. E n d U s e r s Clients Data Center & Back Office BPO Service Operating Service Network Management Data Management IT Service ID CS CAT Outsourcing Consulting System Operation Management Service Monitoring Operation Operation Management MSP Help Desk) System Operation Operation Development Maintenance of Mission-Critical System Customization Tuning Customized Development ID CS SD Application Software Development Application Software Maintenance Security Service IT Platform Development Service Consulting PURAIDO Offshore Bases in China (ID Wuhan) 9

10 Revenue Analysis 1 (By ) <YOY % Changes> ITO SI BPO Others +0.6% (10.8)% (36.1)% +0.5% Revenue by BPO 5.5% SI 34.5% (-1.7%) Others 3.7% *Figures in brackets indicate % of revenue. 10,000 5,000 9,202 (51.0%) 6,889 (38.2%) 9,650 (52.3%) 6,674 (36.2%) 9,712 (56.3%) ( million) 5,953 (34.5%) ITO 56.3% (+4.0%) *Figures in brackets indicate YOY change of % of revenue 0 1,263 1, ITO SI BPO Others 10

11 Revenue Analysis 2 (By Customer) <YOY % Changes> Financial Institutions IT, Telecom and Service Others (10.9)% (9.9)% +16.2% Revenue by Customer IT, Telecom & Service Insurance Related 6.4% (-1.7%) 28.5% -1.1%) Bank 46.2% (-0.9%) *Figures in brackets indicate YOY change of % of revenue Others 18.9% +3.7%) *Figures in brackets indicate % of revenue. 9,309 (51.7%) 6,042 (33.5%) 2,681 (14.8%) 10,189 (55.2%) 5,454 (29.6%) 2,813 (15.2%) ( million) 9,081 (52.6%) 4,912 (28.5%) 3,269 (18.9%) Mar.08 Mar.09 Mar.10 11

12 ID Group Strength 1 Robust data center operational management services for financial institutions Revenue for Financial Institutions SI 24.0% BPO (-2.1%) ITO 69.0% (+7.0%) 4.2% (-4.9%) Others ITO SI IT, Telecom & Service 28.1% (-3.1%) Financial Institutions 64.5% IT, Telecom & Service 31.3% (-2.9%) (-1.0%) Others Financial Institutions 36.6% (-3.2%) Others 32.1% (+6.1%) 12

13 ID Group Strength 2 Prime Contracts: over 80% Major Customers Prime Contracts Revenue by Contract Strategic Partners 17.2% Financial Institutions IT, Telecom & Service Others Manufacture, Transportation, Public, Energy etc. Prime Contracts 82.8% (-0.7%) Strategic Partners Major IT Vendors 13

14 Factors for Revenue Decrease ( million) 20,000 ITO slightly increased - Repeat orders remained stable BPO decreased - Termination of a large contract 15,000 18, SI decreased - Drop in orders received (721) (538) +3 17,263 Security and consulting remained unchanged from the previous year 10,000 Mar.-09 Mar

15 Performance of Domestic Subsidiaries ( million) 5, (8.2%) *Figures in brackets indicate operating margin CS 187 (5.5%) 200 (6.3%) ( million) (3.8%) SD ,500 0 ( million) 400 3,510 Revenue Operating Profit 3,415 3,176 Mar.-08 Mar.-09 Mar.-10 PURAIDO 16 (5.2%) Mar.-09 ( million) 20 C.A.T Mar (1.2%) Mar Mar *Figures of undertakings for May. 08 ~ Mar. 09 Mar.-09 * -43 Mar

16 Factors for Operating Profit Decrease ( million) 1,200 Revenue decrease 800 1, (59) Cost of sales ratio (% of revenue) down - improved productivity (257) 850 SG&A expenses ratio (% of revenue) Up 400 Mar.-09 Mar

17 Stock Data (As of March 31, 2010) Shareholding by Investor Type +0.3% Mar.-09 Mar % 43.2% 0.0% 25.7% 25.7% (0.1)% 14.6% 14.5% (0.1)% (0.1)% 8.8% 8.7% 8.0% 7.9% No. of Shareholders: 1,928 Major Shareholders % of Total Shares 1 A. K. Corporation 8.7% 2 Mizuho Trust Systems Co., Ltd. 8.5% 3 Taiyo Pearl Fund, L.P. 8.1% 4 INFORMATION DEVELOPMENT CO., LTD 7.5% 5 ID Employee Ownership Account 7.2% 6 ( 14 increased from September 30, 2009 ) State Street Bank and Trust Company % 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 ) 2.9% 10 Wahei Takeda 2.6% 17

18 2. Industry Trend and Comparison with Peers Industry Trend Performance Comparison with Peers 18

19 Industry Trend (Monthly Results of IT Industry) Yearly Growth Average* +5.0% Trend of IT Industry s Monthly Sales Changes (Compared with same month of previous year) +3.5% +3.0% Decrease for 9 consecutive months from Jun.-09 (4.0)% *The average is calculated from the total amount added simply together. Source: Above graph data was compiled by ID based on Trends in specific Service Sector (METI) 19

20 Performance Comparisons with Peers (Mar vs. Mar. 2010) Revenue growth ratio 12% 10% -80% E -30% F C ID ID -10% G J H I K 8% 6% 4% 2% 0% -2% -4% -6% D B A Operating profit growth ratio 10% 30% 80% -8% -10% -12% March 31, 2009 March 31, 2010 Source: Results announcements for the year ended on March 31, 2010 by each company (compiled by ID). 20

21 3. Forecast for the Year Ending March 31, 2011 and Strategic Direction Forecast for the Year Ending March 31, 2011 Strategic Direction: Medium-and Long-term Vision and Strategy & Global Strategy 21

22 Industry Trend Conditions Diffusion Index (DI) of IT Industry Downward trend from 2008, but has begun to show signs of recovery Source: Prepared by ID based on the Short-term Economic Survey of Principal Enterprise in Japan by the Bank of Japan

23 Performance Forecast (For the Year Ending March 31, 2011) ( million) Revenue Cost of Sales SG&A Expenses amortization of goodwill Gross Profit Recurring Profit Net Profit EPS (Yen) Dividend per Share (Yen) Mar ,263 17, % 3, , % 2, ,420 (2.0)% (48.0)% , % , % % (% of Revenue) Mar (% of Revenue) YOY % Changes

24 Medium-and Long-term Vision and Strategy Provision of services that delight customers Entering emerging IT market Priorities for achieving growth threat Become full partner to customers Enhancement of strength Integration of Services Shake off habitual subcontract Response to new trend Cloud computing know-how of systems operation IT industrialization and management dissemination of private cloud on-site development and maintenance Reinforce the foundations Fostering of human resources Reduction, deferment and freeze in IT investment Taking advantage of new market Cooperation with Chinese Bases take advantage of an emerging market provide high-quality solutions form ties with the local corporation Commoditization Downward pricing Decline in popularity of IT pressure from offshore industry as career choice production threat threat threat 24

25 Response to Cloud computing Integration of services with the rise of cloud ID s existing Services BPO Service Operating Service IT Service Monitoring Operation Operation Management Help Desk) Outsourcing Consulting Network Management Data Management System Operation Management Service System Operation Operation Development Maintenance of Mission-Critical System Customization Tuning virtualization technology Customized Development Application Software Development Application Software Maintenance New services SaaS development Industry service Operations service Security IT Platform Service Development Service Service increased by automation integration Service decreased by automation integration Important service and technology with the rise of cloud Consulting M&A 25

26 Global Strategy Fully utilizing offshore development for core business and exploitation of the Chinese market Wuhan Wuxi The Chinese Market Yangtze delta the middle part of China Fostering of IT technical experts Sharing know-how Wuxi Branch opened in Dec Offshore development launched in Apr BPO offshore center launched in Jan Tokyo Tokyo Branch opened in Apr Increased for Offshore 26

27 Expanding Services for Customers Promote BOO* strategy to expand services for existing customers of ID Group *BOO strategy: An acronym for business operations outsourcing, BOO is the strategy of providing integrated upstream to downstream services. Customers: ITO ID CS ID Wuhan SI ID SD CS ID Wuhan A Focus Focus B Target Focus C Target Target D E F G Focus Focus Target Focus Target Focus Focus Target H Target New Focus BPO ID C.A.T ID Wuhan Focus Target Target Focus Target New Target Target Target PURAIDO (Consulting) ID Wuhan (Offshore) 27

28 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. 28