TRANSCOSMOS INC. Q2 FY2024/3 Earnings Conference
(July 1, 2023 - October 31, 2023)
October 31, 2023
transcosmos inc.
Table of Contents
1. Q2 FY2024/3 Performance | 1-4. | BS/CF/Other |
1-1. Summary | • Consolidated Balance Sheet Summary | |
• Consolidated Cash Flow Statement Summary | ||
• Executive Summary | • CAPEX, Amortization/Depreciation, Employees, Service Bases | |
• Consolidated Income Statement Summary | ||
1-2. Highlights | 2. Medium-Term Business Plan 2024/3-2026/3 | |
• Consolidated Quarterly Performance Trend | 2-1. | Outline & 5 Strategic Initiatives |
• Consolidated Sales Trend by Service | ||
2-2. | H1 Progress Update | |
• Parent Company Sales Trends | ||
COVID-19 related business/Existing business | 2-3. | Cash Allocation & Numeric Targets |
- Parent Company Six-Year Sales/Operating Income Trend
1-3. H1 Performance Overview
- Consolidated Sales Analysis
- Consolidated Sales Analysis (by Geographic Market)
- Consolidated Operating Income Analysis
- Parent Company Operating Income Analysis
- transcosmos inc. Net Income Analysis
2
1
Q2 FY2024/3 Performance
1-1
Summary
1-2
Highlights
1-3
H1 Performance Overview
1-4
BS/CF/Other
Executive Summary
1 |
Sales returned to positive growth in Q2 (July-September period)
- Parent Company segment returned to positive growth offsetting reduced COVID-19 projects
- Overseas Affiliates segment maintained growth trend
2 |
3 |
4 |
Both CX & BPO Services continued to grow sales excluding COVID-19 deals
- Actively pushed our unique, differentiated CX services built on patented TCI-DX model
- Accurately grasping social changes such as a move towards workstyle reform, aggressively delivered BPO services combining our expertise and digital technology
Profitability showed an upward trend in Q2 (July-September period)
- Operating margin recovered to a 4% range as Parent Company segment increased profitability
- Overseas Affiliates segment's operating margin on an upward trend underpinned by strong performance achieved by ASEAN subsidiaries
Medium-term business plan initiatives achieved progress
- Platform models evolved
- Generative AI initiatives made progress
- Carried forward ESG initiatives
4
Consolidated Income Statement Summary
*For each segment income row, figures in the Mix columns are profit margins.
In ¥100M (rounded to the nearest 100M) | H1 FY2023/3 | H1 FY2024/3 | Change | ||||||||
Amount | Mix | Amount | Mix | Amount | %Change | ||||||
Sales | 1,834 | 100.0% | 1,800 | 100.0% | -33 | -1.8% | |||||
Parent Company | 1,230 | 67.1% | 1,176 | 65.3% | -54 | -4.4% | |||||
Domestic Affiliates | 208 | 11.4% | 211 | 11.7% | 2 | 1.1% | |||||
Overseas Affiliates | 455 | 24.8% | 473 | 26.3% | 18 | 4.1% | |||||
Elimination of intra segment transaction | -60 | -3.3% | -60 | -3.3% | 0 | 0.5% | |||||
Gross Profit | 389 | 21.2% | 332 | 18.5% | -57 | -14.6% | |||||
SG&A Expenses | 262 | 14.3% | 274 | 15.2% | 12 | 4.5% | |||||
Operating Income | 127 | 6.9% | 58 | 3.2% | -69 | -54.0% | |||||
Parent Company | 92 | 7.5% | 37 | 3.2% | -55 | -59.6% | |||||
Domestic Affiliates | 22 | 10.3% | 12 | 5.7% | -10 | -44.7% | |||||
Overseas Affiliates | 13 | 2.9% | 9 | 2.0% | -4 | -29.6% | |||||
Elimination of intra segment transaction | -0 | - | -0 | - | -0 | -47.3% | |||||
Non-Operating Income (Loss) | 2 | 0.1% | 14 | 0.8% | 12 | 489.8% | |||||
Ordinary Income | 129 | 7.1% | 73 | 4.0% | -57 | -43.7% | |||||
Extraordinary Income (Loss) | 3 | 0.1% | -0 | -0.0% | -3 | - | |||||
Net Income Attributable to | 79 | 4.3% | 44 | 2.4% | -35 | -44.7% | |||||
Shareholders of transcosmos inc. | |||||||||||
5 | |||||||||||
1
Q2 FY2024/3 Performance
1-1
Summary
1-2
Highlights
1-3
H1 Performance Overview
1-4
BS/CF/Other
Consolidated Quarterly Performance Trend
Sales | 【QoQ】Up ¥2.2B due to sales growth in the Parent Company and Overseas Affiliates segments. |
【YoY】 Up ¥1B as the Parent Company and Overseas Affiliates segments achieved positive growth. |
- Operating Income 【QoQ】Up ¥1.4B due to growth in the Parent Company and Overseas Affiliates segments led by increased orders. 【YoY】 Down ¥1.2B due to upfront investments made for medium-term growth amid declining COVID-19 projects
and lower profits generated by both Domestic and Overseas Affiliates segments.
Consolidated Sales
In ¥100M (rounded to the nearest 100M)
+10
%Sales Growth | +22 | ||||
+13.7% | |||||
+4.7% | +2.8% | +2.0% | +1.1% | ||
-4.6% | |||||
221 | 234 | 243 | 285 | 231 | 243 |
106 | 103 | 112 | 112 | 108 | 103 |
636 | 595 | 603 | 612 | 581 | 595 |
-30 | -30 | -31 | -31 | -30 | -30 |
23/3 1Q | 23/3 2Q | 23/3 3Q | 23/3 4Q | 24/3 1Q | 24/3 2Q |
933 | 901 | 926 | 978 | 889 | 911 |
Consolidated Operating Income
In ¥100M (rounded to the nearest 100M)
ｰ12
%Operating Income | +14 | ||||
8.5% | 5.3% | 6.2% | |||
4.9% | 4.0% | ||||
2.5% | |||||
0 | |||||
6 | |||||
11 | |||||
0 | |||||
18 | |||||
8 | 5 | 7 | |||
10 | 9 | ||||
62 | 5 | ||||
5 | |||||
0 | |||||
30 | 31 | 36 | 4 | ||
7 | 26 | ||||
11 | |||||
- 0 | - 0 | -0 | |||
23/3 1Q | 23/3 2Q | 23/3 3Q | 23/3 4Q | 24/3 1Q | 24/3 2Q |
79 | 48 | 45 | 61 | 22 | 36 |
■ Parent Company ■ Domestic Affiliates | ■ Overseas Affiliates | ■ Elimination of intra-segment transaction | 7 |
Consolidated Sales Trend by Service
- CX Services 【QoQ】Up ¥1.8B. Actively promoted unique, differentiated services built on our patented TCI-DX model. 【YoY】 Up ¥800M. Returned to growth, offsetting the negative impact of COVID-19 related projects.
- BPO Services【QoQ】Up ¥400M. Actively delivered services that combine our expertise and digital technology.
【YoY】 Despite a slight decline, recovered to the same range as the same period last year, almost offsetting the impact of reduced COVID-19 projects.
CX Services
In ¥100M (rounded to the nearest 100M) | COVID-19 projects | ||
+8 | Existing business exc. COVID-19 projects | ||
+18 |
BPO Services
In ¥100M (rounded to the nearest 100M) | COVID-19 projects | |
-0 | Existing business exc. COVID-19 projects | |
+4 |
60
553
40
574
36
591
35
636
18
587
12
610
9 | 5 | ||||||||
42 | 11 | 5 | |||||||
11 | |||||||||
265 | 274 | 287 | 294 | 276 | 280 |
23/3 1Q | 23/3 2Q | 23/3 3Q | 23/3 4Q | 24/3 1Q | 24/3 2Q |
613 | 614 | 627 | 671 | 604 | 622 |
23/3 1Q | 23/3 2Q | 23/3 3Q | 23/3 4Q | 24/3 1Q | 24/3 2Q |
307 | 285 | 296 | 305 | 281 | 285 |
*Sales for each service are calculated based on the sales mix used for management accounting, and are not adjusted for intra-segment transactions. | 8 |
Parent Company Sales Trends: COVID-19 related business/Existing business
- COVID-19related business was on a downward trend as social needs subsided, while order growth for existing business excluding COVID-19 related projects accelerated.
- Parent Company sales returned to positive growth from this Q2, offsetting the negative impact of COVID-19 projects.
Parent Company Sales | ||||||||||
In ¥100M (rounded to the nearest 100M) | COVID-19 projects | |||||||||
In ¥100M (rounded to the nearest 100M) | +13.7% | |||||||||
+12.2% | +11.7% | Existing business exc. COVID-19 projects | ||||||||
+9.1% | Parent Company YoY Sales | |||||||||
+3.7% | Existing business YoY sales exc. COVID-19 projects | |||||||||
+1.8% | +0.1% | |||||||||
-2.1% | ||||||||||
-2.8% | ||||||||||
-8.7% | ||||||||||
61 | 56 | 85 | 85 | 102 | 50 | 45 | 45 | 22 | 16 | |
+4.9% | +5.0% | +5.3% | +4.8% | +4.7% | ||||||
+3.9% | +4.4% | |||||||||
+6.3% | ||||||||||
+2.9% | ||||||||||
+0.8% | ||||||||||
507 | 517 | 534 | 539 | 533 | 544 | 558 | 565 | 558 | 578 | |
Existing | ||||||||||
FY22/3 Existing business average growth | FY23/3 Existing business average growth | business | ||||||||
+3.1% | +4.9% | growth | ||||||||
+5.5% | ||||||||||
Q1 FY22/3 | Q2 FY22/3 | Q3 FY22/3 | Q4 FY22/3 | Q1 FY23/3 | Q2 FY23/3 | Q3 FY23/3 | Q4 FY23/3 | Q1 FY24/3 | Q2 FY24/3 | |
569 | 574 | 620 | 625 | 636 | 595 | 603 | 612 | 581 | 595 | 9 |
Parent Company Six-Year Sales/Operating Income Trend
- Compared to pre-COVID-19 years, sales grew steadily. Although in a weak tone, operating income also increased.
Parent Company Sales
In ¥100M (rounded to the nearest 100M) | ■ Q1 ■ Q2 ■ Q3 ■ Q4 |
Parent Company Operating Income
In ¥100M (rounded to the nearest 100M) | ■ Q1 ■ Q2 ■ Q3 ■ Q4 |
Pre-COVID-19 | COVID-19 | Pre-COVID-19 | COVID-19 |
625 | 612 | ||||||||||||
581 | |||||||||||||
557 | 42 | ||||||||||||
546 | |||||||||||||
36 | |||||||||||||
620 | 603 | ||||||||||||
582 | 546 | ||||||||||||
538 | 31 | ||||||||||||
65 | |||||||||||||
25 | |||||||||||||
581 | 574 | 595 | 595 | 20 | 31 | 30 | |||||||
519 | 564 | ||||||||||||
32 | |||||||||||||
26 | |||||||||||||
33 | |||||||||||||
19 | 62 | ||||||||||||
636 | |||||||||||||
533 | 522 | 569 | 581 | 24 | 26 | ||||||||
500 | 12 | 39 | |||||||||||
24 | |||||||||||||
13 | 10 | 11 | |||||||||||
FY19/3 | FY20/3 | FY21/3 | FY22/3 | FY23/3 | -1 | ||||||||
FY24/3 | FY19/3 | FY20/3 | FY21/3 | FY22/3 | FY23/3 | FY24/3 | |||||||
2,102 | 2,276 | 2,188 | 2,388 | 2,445 | 1,176 | 44 | 79 | 112 | 178 | 159 | 37 | ||
(H1) | (H1) | ||||||||||||
*Effective from the start of FY2022/3, the Company has adopted the "Accounting Standard for Revenue Recognition." | |||||||||||||
• In FY21/3 sales, revenue from agent transactions has been restated using the net amount recognition method. | 10 | ||||||||||||
• In sales of FY20/3 and earlier years, revenues have not been restated with such a method. |
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Disclaimer
transcosmos Inc. published this content on 31 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2023 07:39:42 UTC.
