Digital Arts Inc. · TSE:2326

Digital Arts — H1 FY2020 Earnings Presentation

31 slides from Digital Arts's earnings presentation, Oct 30, 2019

  1. Slide 1: Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020

    Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 (From April 1, 2019 to September 30, 2019) Supplementary Material October 30, 2019 Digital Arts Inc. (Securities Code: 2326) Copyright © 2015 Digital Arts Inc.

  2. Slide 2: Key Points

    Supplementary Material on Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Key Points Copyright © 2019 Digital Arts Inc.

  3. Slide 3: Key Points

    Key Points (1) In the public sector market, sales of i-FILTER and m-FILTER declined year-on-year.  Sales declined in reaction to the winning of multiple large projects in the previous fiscal year. (2) Consolidated operating profit for 1H reached a record high.  Net sales for the public sector mark

  4. Slide 4: Consolidated Results Highlights

    Supplementary Material on Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Consolidated Results Highlights Copyright © 2019 Digital Arts Inc.

  5. Slide 5: Consolidated Financial Highlights

    Consolidated Financial Highlights for the First Half of the Fiscal Year Ending March 31, 2020 Net Sales: 2,764 million yen (+0 million yen / +0.0% YoY) Consolidated Progress was made in winning projects, mainly for renewals of contracts that net sales had remained outstanding in the previous consoli

  6. Slide 6: Summary of Consolidated Results

    Summary of Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Consolidated Results (In millions of yen) FY March 2019 1H FY March 2020 1H Change YoY Full-Year Forecast Net sales 2,764 2,764 +0.0% 6,800 Gross profit 2,237 2,133 -4.6% 5,450 Selling, general and administrativ

  7. Slide 7: Summary of Non-Consolidated Results

    Summary of Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Non-Consolidated Results (In millions of yen) FY March 2019 1H FY March 2020 1H Change YoY Full-Year Forecast Net sales 2,739 2,677 -2.3% 6,600 Gross profit 2,233 2,107 -5.6% 5,400 Selling, general and administr

  8. Slide 8: Trend in Net Sales

    Trend in Net Sales Net sales increased slightly year-on-year. (In millions of yen) 2,764 2,764 （112%） （100%） 2,420 2,468 （102%） （125%） 1,935 （120%） 1,610 1,481 （109%） 1,328 1,351 （110%） （102%） （120%） 1,103 1,010 （109%） 917 （110%） FY Mar. 2009 FY Mar. 2010 FY Mar. 2011 FY Mar. 2012 FY Mar. 2013 FY Ma

  9. Slide 9: Quarterly Trend in Net Sales

    Quarterly Trend in Net Salas Net sales decreased slightly from the same quarter last year. (In millions of yen) 1,674 1,540 1,565 1,546 （107%） 1,514 1,503 （102%） （123%） （118%） （98%） （133%） 1,402 1,309 （130%） 1,249 （87%） 1,217 1,158 （103%） （105%） 1,098 1,083 （126%） （135%） （99%） 916 （114%） 1Q 2Q 3Q 4Q

  10. Slide 10: Cost of Sales and Selling, General and Administrative Expenses

    Cost of Sales and Selling, General and Administrative Expenses  Increase in amortization of software based on a new version release, increase in labor cost due to the growth of domestic subsidiaries  Selling, general and administrative expenses decreased due to the effects of the selection and con

  11. Slide 11: Quarterly Trend in Cost of Sales

    Quarterly Trend in Cost of Sales Increase in depreciation based on the completion of the product version upgrade in the current year Increase in labor cost based on growth of domestic subsidiaries (In millions of yen) Labor 343 Depreciation （145%） Transfer to other accounts and others 306 301 （125%）

  12. Slide 12: Quarterly Trend in Selling, General and Administrative Expenses

    Quarterly Trend in Selling, General and Administrative Expenses Significant reduction in overseas expenses following revision of Group’s overseas strategy in the previous consolidated fiscal year Personnel expenses Advertising expenses (In millions of yen) Other Overseas expenses 632 596 （111%） 576

  13. Slide 13: By Market

    Supplementary Material on Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 By Market Copyright © 2019 Digital Arts Inc.

  14. Slide 14: Summary of Net Sales by Market

    Summary of Net Sales by Market  Total consolidated sales increased slightly.  In the enterprise sector market, net sales achieved an increase of +8.4%, reflecting strong sales of i-FILTER Browser & Cloud.  In the public sector market, net sales decreased 12.5% due to a decline in reaction to winn

  15. Slide 15: Trend in Net Sales by Market

    Trend in Net Sales by Market Net sales in the enterprise sector and consumer sector markets (In millions of yen) remained strong. Net sales in the public sector market decreased due to the decrease in reaction to the winning of large projects in the previous fiscal year. 2,764 2,764 （112%） （100%） En

  16. Slide 16: Quarterly Trend in Net Sales by Market

    Quarterly Trend in Net Sales by Market Net sales for the enterprise sector market remained steady. (In millions of yen) Enterprise Sector Public Sector Consumer Sector 1,674 （107%） 1,565 1,546 1,514 1,540 139 1,503 （123%） （102%） （118%） （98%） （133%） 1,402 105 103 115 84 1,309 （130%） 114 （87%） 1,249 1

  17. Slide 17: Enterprise Sector

    Supplementary Material on Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Enterprise Sector Copyright © 2019 Digital Arts Inc.

  18. Slide 18: Review of Enterprise Sector Market

    Review of Enterprise Sector Market  Sales of our mainstay i-FILTER and FinalCode products remained steady as progress was made in winning projects, mainly for renewals of contracts that had remained outstanding in the previous consolidated fiscal year.  Sales of i-FILTER Browser & Cloud, which ena

  19. Slide 19: Public Sector

    Supplementary Material on Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Public Sector Copyright © 2019 Digital Arts Inc.

  20. Slide 20: Public Sector

    Public Sector  Overall sales of the public sector market decreased due to the decrease of orders for projects with large monetary value that contributed to sales in the same period of the previous fiscal year.  Because of the progress of ICT, changes are taking place in the field of education, and

  21. Slide 21: Consumer Sector

    Supplementary Material on Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Consumer Sector Copyright © 2019 Digital Arts Inc.

  22. Slide 22: Consumer Sector

    Consumer Sector  The number of minors who use smartphones increased and stricter laws on Internet usage by young people were enacted. As a result, filtering use increased.  Sales of multi-year package products and i-FILTER® for Multiple Devices that can be used on more than one device remained str

  23. Slide 23: Initiatives for the Second Half

    Supplementary Material on Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Initiatives for the Second Half Copyright © 2019 Digital Arts Inc.

  24. Slide 24: Challenges for the Second Half (2H)

    Challenges for the Second Half (2H) • Termination of Support for Windows7 (Jan. 2020) • Consumption tax hike (Oct. 2019) • Partners were pressed to cope with the last-minute demand for PC switchovers, and sales of our products stagnated temporarily. • Increased demand for low-price secure cloud oper

  25. Slide 25: Initiatives for the Second Half

    Initiatives for the Second Half (1) ’s price revision/product reinforcement While reinforcing product lines, review prices and increase the number of licenses/groups. (2) Help customers introduce large projects Accurately communicate the product value/brand and actively make approaches to have an ad

  26. Slide 26: Full-Year Financial Forecast for the Fiscal Year Ending March 2020

    Supplementary Material on Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2020 Full-Year Financial Forecast for the Fiscal Year Ending March 2020 Copyright © 2019 Digital Arts Inc.

  27. Slide 27: Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2020

    Full-Year Financial Forecast for the Fiscal Year Ending March 2020 Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2020 Results for FY March 2019 Plan for FY March 2020 % Change Net sales ¥5,841 million ¥6,800 million 16.4 % Gross profit ¥4,781 million ¥5,450 million 14.0 % Sell

  28. Slide 28: Non-Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2020

    Full-Year Financial Forecast for the Fiscal Year Ending March 2020 Non-Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2020 Results for FY March 2019 Plan for FY March 2020 % Change Net sales ¥5,752 million ¥6,600 million 14.7 % Gross profit ¥4,724 million ¥5,400 million 14.3 %

  29. Slide 29: Return to Shareholders for Fiscal Year Ending March 31, 2020

    Return to Shareholders for Fiscal Year Ending March 31, 2020 ■Dividends We are planning to pay dividends as follows to return a portion of our earnings to our shareholders. Target payout ratio for fiscal year ending March 31, 2020: 30.5% (of consolidated net profit) Annual dividends of surplus forec

  30. Slide 30: Notes on Descriptions

    Notes on Descriptions Among the descriptions of plans, strategies and financial forecasts in this presentation material, those that are not historical facts are forward- looking statements. They reflect judgments made by the management of Digital Arts Inc. on the basis of information currently avail

  31. Slide 31: For internet convenience, safety and security

    - For internet convenience, safety and security - Copyright © 2015 Digital Arts Inc.

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