business results fy2011 - sp.otsuka-shokai.co.jpchange of interest-bearing debt consolidated non-...

Copyright©2012 OTSUKA CORPORATION All Rights Reserved.

Business Resultsfor the fiscal year ended December 31, 2011

Yuji Otsuka, President

February 1, 2012

OTSUKA CORPORATION

Copyright©2012 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 478,215 98.4% +3.2% 444,625 97.3% +2.7%

Operating income 23,095 110.0% +21.5% 20,925 107.3% +18.9%

Ordinary income 23,315 108.4% +19.5% 21,628 107.6% +18.3%

Net income 12,744 118.9% +19.9% 12,519 121.0% +25.0%

Summary of Business Results,January – December, 2011


Others

867

483

4,654

4,836

46,456

1,518

7,761

5,160

FY 2011 Net sales(Millions of yen)

45

25

313

312

313

165

93

235

Number of employees

Sales and technology support for network-related equipmentNet World Corporation

Maintenance and body work for automobiles, and commissioned sales of insuranceOtsuka Auto Service Co., Ltd

Creation and commissioned shipment of direct mail materials, data management and processing as well as commissioned creation of Websites

Otsuka Business Service Co., Ltd

Comprehensive service and support for network systemsAlpha Net Co., Ltd

Emergency repair of PC and peripheral equipment and data recovery serviceAlpha Techno Co., LtdS &

S

Consigned software development, packaged software development and ERP consulting businessAlpha System Co., LTD.

Electronic communications construction and interior constructionNet plan Co., LTD

Development and sale of packaged softwareOSK Co., LTD.

S I

Business domainCompany nameSegment

Consolidated subsidiaries


The environment was characterized by a mild recovery in the globaleconomy, the European debt crisis and financial uncertainties.

Exports weakened, the yen remained strong, share prices were lower and interest rates remained at the same level.

Production showed signs of a slow recovery and there were concerns over power supply.

The number of corporate bankruptcies remained at the same level.

Investment in facilities and equipment showed signs of recovery.

3

The domestic economy is slowly beginning to pick up.

External Environment

IT investments are starting to pick up.


• 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 - 1


• Visit customers to confirm conditions, make utmost effortsto provide support.

• Free-of-charge repairs and maintenance of damaged equipment,free-of-charge provision of groupware service.

• Donations of surgical masks, disinfectant hand gel,and LED light bulbs.

• Relief money (“tanomail” “personal tanomail”,employees and OTSUKA CORPORATION)

5

The Great East Japan Earthquake — OTSUKA’s Responses

• Donation of LED lighting and tree-planting activities• Global warming countermeasures

(Provide carbon offset products, support tree-planting activities overseas) • OTSUKA environmental measures

Strengthen 3R (Reduce, Reuse, Recycle) activities,promote reduction of CO2 at the head office building

50th Anniversary of Foundation

OTSUKA Group’s Activities - 2


429,927463,493 478,215

16,09419,013

23,09516,42719,508

23,315

10,63112,744

8,782

0

100,000

200,000

300,000

400,000

500,000

FY 2009 FY 2010 FY 20110

8,000

16,000

24,000

32,000

40,000

Net sales Operating incomeOrdinary income Net income

Net sales and ProfitsConsolidated

(Millions of yen)

Net salesOperating incomeOrdinary incomeNet income


93.7108.0113.2114.9 114.5104.6

119.5124.7 118.3123.9

125.1110.7

0

20

40

60

80

100

120

140

1Q 2Q 3Q 4Q

FY 2009 FY 2010 FY 2011

7

Consolidated Quarterly change of Net sales

(Billions of yen)


4,569

6,676

1,221

3,959

7,449

5,079

2,101

4,8775,381

3,629

9,011

5,293

0

2,000

4,000

6,000

8,000

10,000

12,000

1Q 2Q 3Q 4Q

FY 2009 FY 2010 FY 2011

8

Quarterly change of Ordinary income

Consolidated

(Millions of yen)


1,1301,9422,300

214,576208,008200,938

262,508253,541226,688

0

100,000

200,000

300,000

400,000

500,000

FY 2009 FY 2010 FY 2011

463,493429,927

478,215

Net sales by segmentsConsolidated

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


106,257 106,981106,663

104,12698,04891,230

29,66528,07228,332

176,117200,135 203,852

0

100,000

200,000

300,000

400,000

500,000

FY 2009 FY 2010 FY 2011

432,919401,937

444,625

Net sales by 4 segmentsNon-Consolidated

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

Supplies

Maintenance, etc.


-14.8-19.6

-5.4

23.7

-19.7

7.6

16.1

9.6

-5.9

6.65.5 2.8

-16.9

-4.2-7.7

-16.0-18.8

-10.4-9.1

11.1

1.7

2.5

7.5 7.9

5.0

-20.5

3.4

3.2

7.17.1

-0.7

7.3 8.5 7.1

8.5

2.6

6.67.1

3.20.1

-2.10.4 0.0

-0.9

2.3-0.8

-1.12.0 1.2

4.7

1.6 1.9

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0SI related productsCustom-made software etc.SuppliesMaintenance, etc.

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4QFY 2008 FY 2009 FY 2010 FY 2011

11

( % )

Non-Consolidated

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


23.1

15.917.8

-4.6-4.9-7.5

-4.2-5.4 -5.2-10

-5

0

5

10

15

20

25C/F from operating C/F from investing C/F from financing

FY 2009 FY 2010 FY 2011

Cash flowsConsolidated

(Billions of yen)


116,633108,255101,740

8,684 7,802 8,415

50.850.751.4

3.73.74.40

30,000

60,000

90,000

120,000

As of Dec. 31, 2009 As of Dec. 31, 2010 As of Dec. 31, 20110

15

30

45

60

Equity Interest-bearing debtEquity ratio Interest-bearing debt ratio

Equity andInterest-bearing debtConsolidated

(Millions of yen) ( % )


9.2 8.5 8.1 7.8 6.8 5.9 6.4

26.018.6

33.733.3

77.077.775.6

42.3

63.4

89.2

0.00.10.20.10.10.10.10.30.50.50.71.01.12.12.83.64.3 3.0%2.9%3.7%4.1%4.2%4.8%5.7%11.9%

21.9%

18.6%23.9%

26.6%

39.0%

45.3%46.0%45.4%

54.6%

0

20

40

60

80

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110%

20%

40%

60%

80%Interest-bearing debt Non-operating expensesInterest-bearing debt ratio

2011年末の現預金残高434億円

Change of Interest-bearing debt and Non-operating expenses

Non-Consolidated

Cash at the end of FY 201143.4 billion yen

(Billions of yen)

IntroducedPC-LAN

Full Operation“DAISENRYAKU”(Centralization)

Started NewAccounting

System

Listed onTokyo Stock

Exchange

Operationof “SPR”

New HQBuilding

Full-fledgedoperation of

“SPR”


27.11% 28.58% 44.31%

27.94% 28.31% 43.75%

27.58% 28.83% 43.59%

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

FY 2009

FY 2010

FY 2011

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

23.89%

Wholesaleindustries

21.32%

Buildingindustries

8.02%

Retailingindustries

4.41%

Education,Public offices

4.22%Service

industries29.87%

Lease, Creditfirms, etc.

8.27%

FY 2011

Sales breakdown by customers’ type of industry

Non-Consolidated


2,660

3,493

1,845

187

8,185

（32.5%）

（42.7%）

（22.5%）

（2.3%）

Personnel organization(regular employees)

Consolidated

As of Dec. 31, 2011

Technical personnel

Sales personnel

Corporate staff

Others


195.5202.4

187.9184.0

170.8151.7

134.0116.6

102.089.783.681.585.280.0

88.870.4

63.557.852.950.0

45.545.246.842.1

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 20110

10

20

30

40

50

Net 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 201160

70

80

90

100

110Net salesBreak-even point ratio

83.5%

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

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500Net 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

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 41.3%Operating income per employee grew 9.8 times

Operationof “SPR”

Full operation of“DAISENRYAKU”

Full-fledgedoperation of

“SPR”

(Difference to last year, -76)


<Amount of Sales> (Millions of yen)

FY 2009 FY 2010 FY 2011

Amount AmountChange to Last year

AmountDifference to

Last yearChange to Last year

“tanomail” 92,990 100,980 +8.6% 107,934 +6,953 +6.9%SMILE 6,327 6,708 +6.0% 7,774 +1,066 +15.9%ODS21 33,073 38,778 +17.2% 40,680 +1,901 +4.9%OSM 40,826 43,887 +7.5% 47,113 +3,226 +7.4%

<As reference: Number of Sales> (Units)

Copier 24,240 27,003 +11.4% 29,153 +2,150 +8.0%(of whichColor copier) 18,144 21,703 +19.6% 24,296 +2,593 +11.9%

Server 32,389 36,405 +12.4% 37,582 +1,177 +3.2%PC 500,276 666,332 +33.2% 697,057 +30,725 +4.6%

Key strategic businessNon-Consolidated


100,980107,934

22,234

7,152

6,004

4,555

4,218

3,776

2,465

2,313

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 2011Accounts 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

“tanomail” achievedsales of over

100 billion yen

Started “tanomail”

“MA tanomail”

“personal tanomail”

Procurement service for large company

“tanomail plus”

TANOSEE

Procurement ASP service

Private brand

Alliance withLION OFFICE PRODUCTS CORP.

Mail-orderservice forindividual

Non-“tanomail” MRO“tanomail”

Annual sales transition of “tanomail”Non-Consolidated

(Millions of yen)


81208

304384

509 560638

722822

9031,039

1,162

40

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

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

1.16 million peopleused services in 2011

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

(Thousand people)


<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”849,567 accounts

Procurement ASP service“tanomail plus”

115 companies

Office supply mail-order service for large company

“MA tanomail”19,261 accounts

Mail-order service for individual“personal tanomail”

217,872 membersMerchandisefor individual

Indirectmaterial

Corporate employees, general individuals

OfficeDirect material

(As of Dec. 31, 2011)


Support Services for Procurement and Purchase Operations

Clients in which services were

introduced (Buyers)

Suppliers

OTSUKA CORPORATION

(“tanomail”)

Supplier A

Supplier B

Supplier C

Supplier D

OTSUKA CORPORATIONcloud computing service

“tanomail plus”

Services commenced in 2005Number companies in operation: 115 companiesPass-through amount: 47.1 billion yen (64.5% 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


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


• The domestic economy may get back on a recovery trackfrom autumn onwards.

• Companies’ capital investment is starting to pick upgradually.

• Company needs for IT utilization, replacement andupgrades are brisk.

• Concerns over power supply and energy saving responseis even more crucial.

28

IT Market Forecast in 2012IT Market Forecast in 2012


Policies and Measures in 2012Policies and Measures in 2012< Slogan >“Live up to customers’ trust from a customer viewpointand vitalize office”

• 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


Overview of Green University of Tokyo Project

(As of January 27, 2012)

Industry-academia cooperative consortium

Specification design WG Protocol standardization WGCommercialization WG

Concept WG Control verification WG Visualization WG

[Sectional meetings and working groups (WG)]

63 members (44 companies, 19 NPOs)

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

“Mini-Green University of Tokyo” Verification Experiment- Introduction Test at the OTSUKA’s Head Office Building -

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

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

Visualization by floor Visualization by light, air conditioning and socket

Total lights

Total airconditioning

Totalsockets

30


Informing about Corporate Activities

31


General light bulbsFloodlights Halogen lights

Incandescent bulb 60W → LED 5.8W90% reduction

Fluorescent light 40W → LED 22W45% reduction

Mercury lamp 400W → LED 80W80% reduction

Strip lights

32

Wide Range of LED Lighting

Explosion-proof Lamp

IEC: International Electrotechnical CommissionTIIS: Technology Institution of Industrial Safety

Certified by IEC and TIISTunnel light

Acquired PSE certification (for the stabilizer)PSE: Product Safety of Electrical appliance and material

Street light


Power Reduction through PC Replacements

Laptop + LCD monitorWindows7

Approx. 60%reduction

33

Approx.111W

In the case of OTSUKA CORPORATION

Approx. 45W(Approx. 25W for

Laptop only)


493,000478,215463,493

24,00023,09519,013

24,50023,31519,508

10,63113,55012,744

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

Plans of Net sales and profitConsolidated

(Plan)

(Millions of yen)

Net salesOperating incomeOrdinary incomeNet income


1,942 1,130 900

208,008 214,576 222,990

253,541 262,508 269,110

0

200,000

400,000

600,000

FY 2010 FY 2011 FY 2012

463,493493,000478,215

Plans of Net sales by segmentsConsolidated

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

(Plan)


Start new stage of IT utilization !

Jissen (Practical) Solution Fair 2012


Start new stage of IT utilization !

Jissen (Practical) Solution Fair 2012

Dates:Tokyo

February 8 (Wed) – February 10 (Fri)Osaka

February 15 (Wed) – February 16 (Thu)Nagoya

February 23 (Thu) – February 24 (Fri)


CommunityCommunity

EmployeesEmployees

Customers

ShareholdersShareholdersBusiness PartnersBusiness Partners

We live up to ourStakeholders’ confidence


1. This material is intended to provide information about the business performance of fiscal year2011 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

business results fy2011 - sp.otsuka-shokai.co.jpchange of interest-bearing debt consolidated non-...

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