Financial Results For Q1 FY2020...2020/07/02 · 104.3％ 98.0％ 130.1％ 112.8％ Year on Year Q1 FY2020 Result （Unit：JPY Million） 01 Q1 FY2020 Q1 FY2020 Financial Results

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

1

2

3

4

5

6

------ 3

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CONTENTS 1


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


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


Q1 FY2020 Financial Results by

Business Segment

CONTENTS 2


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


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


New Client Development

and Human Resource

Business Affected by

COVID-19

8


by Business Segment


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


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


by Business Segment


Topics of Q1 FY2020

CONTENTS 3


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


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


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


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


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


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


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


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


Shareholder Return

and Dividend Amount for FY2020

※Disclosed revision of year-end dividend

forecast for FY2020 (June 30. 2020)

CONTENTS 5


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.


Reference Materials

CONTENTS 6


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


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


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


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


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


-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


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


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]

Financial Results For Q1 FY2020...2020/07/02 · 104.3％ 98.0％ 130.1％ 112.8％ Year on Year Q1 FY2020 Result （Unit：JPY Million） 01 Q1 FY2020 Q1 FY2020 Financial Results

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