fy2007 half-year business results briefingirvision2next.blob.core.windows.net/4326/ir/oddg.pdf ·...

http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jpCopyright© 2007 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/

November 8, 2007

INTAGE Inc.

FY2007 Half-Year Business Results Briefing

2http://www.intage.co.jpCopyright© 2001-2006 INTAGE Inc. All Rights Reserved. http://www.intage.co.jp/Copyright© 2007 INTAGE Inc. All Rights Reserved. 2

Contents

Plans, expectations, and strategies included in this document that are not historical facts are forward-looking statements related to INTAGE Inc. or the INTAGE Group decided by management based on currently available information. Accordingly, the reader should avoid placing undue reliance on these forward-looking statements. INTAGE cautions that a number of factors affecting the business could cause actual results to differ materially from these forward-looking statements. These include, but are not limited to, general economic conditions and changes or reforms in the industries in which our clients operate.

■ FY2007 Half-Year Business Results■ Mid-term Topics■ Future Growth Strategy

*Note: FY 2007 represents the fiscal year ended March 31, 2008.In this document, FY stands for INTAGE’s fiscal year, which begins April 1 and ends March 31.


■ FY2007 Half-Year Business Results

■ Mid-term Topics■ Future Growth Strategy


Operating Income

Ordinary Income

Financial Highlights (Consolidated)Both sales and operating income developed favorably.

(100 millions of yen)

(100 millions of yen)Sales(100 millions of yen)

Net Income(100 millions of yen)

133.2 141.1 151.1 13.0 13.913.5

12.7 13.3 13.8

7.3 8.0 7.2

200

150

100

50

0

20

15

10

5

0

20 20

1515

1010

55

00

Sep. 2005Sep. 2005 Sep. 2006Sep. 2006 Sep. 2007Sep. 2007

Sep. 2005Sep. 2005

Sep. 2005Sep. 2005

Sep. 2005Sep. 2005Sep. 2006Sep. 2006

Sep. 2006Sep. 2006

Sep. 2006Sep. 2006Sep. 2007Sep. 2007

Sep. 2007Sep. 2007

Sep. 2007Sep. 2007


FY2007 Half-Year Profit and Loss SummaryOperating income increased but fell short of the initial forecast.

(Millions of yen)

Sep. 2006 actual

Sep. 2007 forecast

Sep. 2007 actual

Year-on-year change

Sales 14,112 15,081 15,113 +7.1%

Operating income

Ordinary income

Net income

EPS

Sales

Operating income

Ordinary income

Net income

EPS

1,356 1,460 1,392 +2.7%

1,332 1,446 1,385 +3.9%

800 750 727 -9.2%

938 1,103 1,096 +16.8%

604 667 689 +13.9%

¥58.58 ¥64.70 ¥66.43 —

¥77.56 ¥72.68 ¥70.10 —

11,656 11,842 12,062 +3.5%

904 998 982 +8.7%

Consolidated

Non-consolidated


FY2007 Half-Year Balance Sheet and Cash Flow Summary

Consolidated balance sheet summary

Sep. 2006 Sep. 2007 Variance Remarks

1,257 Principally increases in cash and time deposits and inventories

Principally an increase in goodwill due to the subsidiarizationof TM Marketing

—

Principally increases in short-term bank loans and bonds due within one year

Primarily a decrease attendant on the reclassification of bonds due within one year

—

Principally an increase in retained earnings due to the recording of a net profit —

Principally an increase in the net assets of INTAGE Interactive

—

820

2,078

2,015

(1,473)

541

1,454

0

83

1,536

Current assets 10,171 11,429

Total liabilities 9,618 10,159

Shareholders’ equity

Valuation and translation adjustments

Minority interest

7,921

37

189

9,375

36

272

Total net assets 8,147 9,684

Fixed assets 7,594 8,415

Total assets 17,766 19,844

Current liabilities 5,936 7,952

Fixed liabilities 3,681 2,207

Consolidated cash flow summary Sep. 2006 Sep. 2007 Variance RemarksCash flows from operating activities 996 757 (238) Principally increases in income taxes paid and inventories

432 Principally a decrease in payments for business transfer

Principally an increase in proceeds from short-term bank loans

—

—

—

—

57

3

255

151

407

Cash flows from investing activities (705) (272)

Cash flows from financing activities (557) (499)

Effect of exchange rate changes on cash and cash equivalents

(0) 3

Net decrease in cash and cash equivalents (267) (11)

Cash and cash equivalents at beginning of period 2,569 2,721

Cash and cash equivalents at end of period 2,302 2,709

(Millions of yen)

(Millions of yen)


Contribution by Segment

Sales

Sep.2006 Sep.2007

64% → 66%

20%23%

14%13%→

→

■ Marketing Research and Consulting

■ System Solutions

■ Medical Solutions

Operating Income

85%

4%11%

66%20%

14%

11%

4%

85%

Sep.2007

→

→

→

15%

6%

79%

Sep.2006





Sales by SegmentSales from the Marketing Research and Consulting and Medical Solutions segments increased.

Sep. 2006 Sep. 2007

・Sales of custom research rose sharply.・Sales of panel research also increased.

・Structural transformation to implement a shift to integrated solutions progressed.




(Hundred millions of yen)

(+13.8%)

(-8.1%)

(+11.1%)

(Variance)

Total: 151.1Total: 141.1

40

80

120

160

90.4 100.4

32.2

29.6

18.421.0 ・Sales of data management and statistical

analysis services developed favorably.

・Sales of monitoring services increased but fell short of the planned level due to the discontinuation of a planned project.

(+7.1%)


Total: 100.4

Breakdown of Marketing Research and Consulting Sales


■ Custom ResearchConventional research (mail surveys, interview surveys, etc.)Internet research

■ Panel ResearchSRI (nationwide retail panel)SDI (nationwide pharmacy and drugstore panel)SCI (nationwide consumer household panel)SLI (nationwide female consumer panel)personal eye (individual consumer panel)Other panel surveysSep. 2006 Sep. 2007

Total: 90.4

(Variance)

(+26.1%)

(+2.8%)

100

50

58.2 59.8

32.240.6

Custom Research・Orders for major conventional research projects were obtained.・Sales of Internet research increased by 25.7%.・Sales of TM Marketing Inc. developed favorably.

Panel Research・Sales of personal eye doubled (+105.8%).・Sales of mainstay panel research were nearly unchanged.

(+11.1%)


Operating Income by SegmentAn increase in business premises costs and goodwill amortization due to M&A activities were absorbed and an increase in operating income achieved.

Sep. 2006 Sep. 2007

・Profit from custom research increased due to sales expansion.

・Profit from panel research decreased slightly.

・Profit from data management and analysis services increased on strong sales.

・Profit from monitoring services decreased due to the impact of project discontinuation.

・Amid ongoing structural transformation, profit was nearly at the planned level.





(-26.3%)

(-36.4%)

(+11.2%)

(Variance)

Total: 13.9Total: 13.5

15

10

5

0

11.9

0.5

0.7

2.01.5

10.7

(+2.7%)


Significant Change in the Business Environment

The competitor’s clients are switching to INTAGE’s SRI retail panel data.

INTAGE will secure stable infrastructure to sustain growth and profitability in fiscal 2007 and beyond.

INTAGE to guarantee investment capacity and social responsibility to construct a platform for manufacturer-retailer collaboration.

Toward the Next Stage

A shocking development for the research industry on a global scale having a great impact in Asia

Result will have a major impact on INTAGE’s business performance and future strategy

In the retail panel research sector, withdrawal of a major competitor from the Japanese market


INTAGE Forum 2007 (September 21, 2007)

Keynote Speech

Shopper Insight and Supply Chain DevelopmentManufacturer-Retailer Collaboration by Means of Information Sharing Promoted by Wal-Mart

A Next-Generation Retail Solution


Growth in the Custom Research Sector

Continuation of the Internet Shift

TM Marketing Inc. Becomes a Consolidated SubsidiaryHalf-year: Sales of ¥ 568 million and favorable profits

Sustained growth trend through implementation of the Internet shift25.7% growth in sales of Internet research

Start of adoption by major clients of market tracking by means of Internet research synchronized with panel data

Maintenance of the cooperative relationship with Yahoo JapanSharing of Yahoo! Research Monitor with Yahoo Japan Value Insight Corporation

Start of Internet research in China


Plan(Hypothesis)

Do(Verification through research)

Action(Marketing implementation)

Online, Discussion

Focus Group/In-Depth Interviews

Check(Analysis)

Online, Quantitative

CLT, In-home Interviews, HUT

Beijing

Shanghai

Guangzhou Blog interaction

Yes/No questionnaires

Access panel activation plan

Chinese and Japanese people may seem similar but are very different.That’s why… It is necessary to elicit true feelings and motivations and deepen understanding of the Chinese people.To that end… Information value creation through online resourcesFurthermore… Provision of comprehensive services by means of a hybrid research structure

Understanding of China through new information value by INTAGE online resources

Hybrid Chinese-Style Research Structure

Online Research in China

Development of the accesspanel into a source of

honest consumer opinions INTAGE Marketing

Consulting (Shanghai)


INTAGE Enters the Consumer Generated Media (CGM) Data Analysis BusinessTransfer of the Sanzi.com business (http://www.3zai.com) to INTAGE

Consumer data gathering and analysis in the Web 2.0 eraSecuring a beachhead to the Internet business

Sanzai.com Activities Flow and Business ModelWeb-based household bookkeeping for organizing expenditure information and

sharing useful information with others

DictionaryDB

ProductDB

StoreDB

GeographicalDB

Personal InformationDB

Create valuable database sets

Affiliation / Advertising

Marketing data / Promotion

Reward points, etc.

PC Mobile phone

Sanzai.com/ Sanzai.com applications

Update

Household account books

Site users can enjoy realSite users can enjoy real--time information sharing about time information sharing about products, stores, and other topics of interest products, stores, and other topics of interest

generated by other site usersgenerated by other site users

User A User B User C User…

Shopping

http://www.3zai.com/


Formulation of the Ninth Medium-Term Business Plan and 50th Anniversary Vision

Formulation of the Ninth Medium-Term Business Plan and 50th Anniversary Vision

Initiatives to Advance to the Next Stage

50th Anniversary Vision (2010 and beyond)

Eight Medium-Term Business Plan(2005 to 2007)

Ninth MediumNinth Medium--Term Term Business PlanBusiness Plan(2008 to 2010)


Positioning the INTAGE Group

Research firmsResearch firms

Internet businesses

Internet businesses

Information services companies

Information services companies

Consulting firmsConsulting firms

Business intelligence Internet research, consumer generated media

Web marketingIT and strategy consultingBusiness model convergence

Platform providers

Solutions providers

The Intelligence Provider


Key Concepts for the Next Stage

The Internet (Consumer Generated Media)

Global (China, Asia and beyond)

Healthcare

Toward Construction of Industry-Specific Platforms


What Are Platforms?

In computer terminology, “platform” means “A technical foundation that can be used across different applications or equipment or shared among manufacturers and the hardware and software that embodies it.”In recent years, in business terminology the term has come to be used in the sense of a broader foundation for various industrial activities.

“In industries or products that can be hierarchically treated, the substructure (foundation) that regulates the superstructure” (Prof. Yoko Takeda and Prof. Jiro Kokuryo)

Whereas “infrastructure” is regarded as hardware-centered and assumed to be provided for economies of scale and the public good, with “platforms” importance is placed on intangible value that can be achieved using a network or other means.


Business Models for the Next Stage

ClientClient

Business levelBusiness level

Integrated solutions levelIntegrated

solutions level

Technological level

(products)

Technological level

(products)

Company A

Company A

Business modelsfor FMCG

Business modelsfor FMCG

Business categoryor industry level

Business categoryor industry level

Company B

Company B

Company C

Company C

Business modelsfor non-FMCG

Business modelsfor non-FMCG

Company D

Company D

Company E

Company E

Business modelsfor healthcare

Business modelsfor healthcare

Company F

Company F

Incubation(business model)

Incubation(business model)

GG HH

FMCGFMCG Non-FMCGNon-FMCG HealthcareHealthcare

Integrated solutions(Sales force automation, customer relationship

management, brand management, business process solutions …)

Integrated solutions(Sales force automation, customer relationship

management, brand management, business process solutions …)

Marketing information technologies(Research techniques, data handling, systems development, data cleaning, warehousing, maintenance and operation …)

Marketing information technologies(Research techniques, data handling, systems development, data cleaning, warehousing, maintenance and operation …)

R&D(elemental

technologies)

R&D(elemental

technologies)

OthersOthers

Strategy building units

Realization of an integrated solutions through a combination of elemental technologies

Platform construction for each business model


A New Platform for Manufacturer-Retailer Collaboration in the FMCG Industry

Data Infrastructure Expansion

Systematization of Solutions

Formation of Public Consensus

Third-Generation Retail Information System


From Consumer Insights to Shopper Insights

Consumer Panel Integration and Expansion

Shared PlatformShared Platform

Shift to Census Data

Provision of Market Insights

Collaboration Support

Retailers

Manufacturers

Revelation of Store Use Behavior and In-Store Purchasing Behavior


Outlook for the Custom Research Sector

Continue to drive growth by means of Internet research.Anticipated second-half growth of 20%Sustainment of growth exceeding the industry average amid a market shakeout and realignment

Boost competitive strength in preparation for the next stage.

Proposal of a new research structure to clientsEstablishment of specialized expertise through Web technologies

Accelerate global development.Internet research-driven share expansion in ChinaEstablishment of a second business base in Asia in addition to China


Outlook for the Medical Solutions Business

Contract Research Organization (CRO) operation: ASKLEP Inc.Construction of a full-support structure for services ranging from development strategysupport to regulatory affairs and application consultingStrengthening of the anticancer agent clinical trial outsourcingBusiness expansion by means of the active utilization of electronic data capturing (EDC) and a response to clinical trial globalization

Site Management Organization (SMO) operation split-off and reestablished as a new company

Rigorous adherence to a stand-alone business structure through a corporate separationCreation of a specialty SMO that meets unmet medical needs

Growth of 15% or Higher in the Pharmaceuticals Development Support Sector

New SMO company

ASKLEP

INTAGE

SMO

SMO sub-subsidiary(subsidiary of ASKLEP)

New company name: ASKLEP MEDIO Inc. (provisional)

INTAGE


Establishment of a Shared Service Center (April 2008)

1. Change the business activities of INTAGE Links.

2. Consolidate the Group’s back-office functions.

3. Achieve cost reductions and efficiency through business process standardization and systematization.

4. Assure business process quality through business process standardization and the pursuit of specialization.

Seek Greater Efficiency in Group-Level Management

New company name: INTAGE Associates Inc. (provisional)

INTAGE Associates(provisional)

INTAGE Links

INTAGE Group Companies

ASKLEP INTAGE Research

INTAGE Nagano

INTAGE Interactive

TM Marketing

INTAGE


Forecast for Fiscal 2007

FY2006Actual

FY2007 Forecast

Year-on-Year

ChangeSales 30,800 33,227

3,2793,2691,727

+7.9+11.9+12.5+6.2

Operating income 2,930Ordinary income 2,905Net income 1,626

Consolidated

(Millions of yen)

The forecast of business results has been prepared based on information currently available to the Company and includes a number of uncertainties. Actual results may differ from the projected figures.

Sales and profit from SRI in the second half are expected to increase due to a competitor’s withdrawal from the retail panel research business.

INTAGE anticipates fully achieving the initial forecast for the full year.


Intelligence Inspiring Marketing Innovation,

Empowering Business Solutions

Significant Change in the Business EnvironmentINTAGE Forum 2007 (September 21, 2007)Growth in the Custom Research SectorHybrid Chinese-Style Research Structure�Online Research in ChinaInitiatives to Advance to the Next StageKey Concepts for the Next StageWhat Are Platforms?A New Platform for Manufacturer-Retailer Collaboration in the FMCG IndustryOutlook for the Custom Research SectorOutlook for the Medical Solutions BusinessEstablishment of a Shared Service Center �(April 2008)

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