Research Coverage Report by Shared Research Inc.

Transcription

1 esearch eport by Shared esearch Inc. This PDF document is an updated note on the company. A comprehensive version of the report on the company, including this latest update, is available on our website and various professional platforms. On September 28, 2018, Tri-Stage Inc. announced earnings results for 1H FY02/19. Cumulative FY02/17 FY02/18 FY02/19 FY02/19 FY02/19 % of 1H 1H Est. % of FY FY Est. Sales 10,558 22,704 35,199 47,302 13,209 27,808 42,284 55,776 13,874 27, % 26, % 53,601 YoY 19.6% 22.8% 26.6% 27.4% 25.1% 22.5% 20.1% 17.9% 5.0% -1.0% -4.8% -3.9% Gross profit 1,155 2,489 3,877 5,152 1,415 2,789 4,243 5,613 1,470 2,891 GPM 10.9% 11.0% 11.0% 10.9% 10.7% 10.0% 10.0% 10.1% 10.6% 10.5% SG&A expenses 777 1,629 2,606 3,757 1,135 2,235 3,378 4,581 1,244 2,502 YoY 6.9% 16.5% 26.9% 40.3% 46.0% 37.2% 29.6% 21.9% 9.7% 11.9% SG&A ratio 7.4% 7.2% 7.4% 7.9% 8.6% 8.0% 8.0% 8.2% 9.0% 9.1% Operating profit ,271 1, , % % 537 YoY 70.6% 52.7% 64.7% 55.3% -25.8% -35.6% -31.9% -26.0% -19.6% -29.7% -46.2% -48.0% OPM 3.6% 3.8% 3.6% 2.9% 2.1% 2.0% 2.0% 1.9% 1.6% 1.4% 1.1% 1.0% ecurring profit ,252 1, YoY 65.5% 49.1% 63.0% 53.5% -30.7% % -33.5% PM 3.5% 3.7% 3.6% 2.9% 1.9% -0.3% 0.4% 1.6% % - - Net income attributable to parent company shareholders , ,292 YoY 88.3% 58.8% 75.8% 60.3% -46.6% % Net margin 2.0% 2.2% 2.1% 1.6% 0.9% -0.7% -0.3% 0.7% % - - Quarterly FY02/17 FY02/18 FY02/19 Sales 10,558 12,146 12,495 12,103 13,209 14,598 14,477 13,491 13,874 13,665 YoY 19.6% 25.7% 34.0% 29.9% 25.1% 20.2% 15.9% 11.5% 5.0% -6.4% Gross profit 1,155 1,334 1,388 1,275 1,415 1,374 1,454 1,370 1,470 1,421 GPM 10.9% 11.0% 11.1% 10.5% 10.7% 9.4% 10.0% 10.2% 10.6% 10.4% SG&A expenses ,151 1,135 1,101 1,143 1,203 1,244 1,257 YoY 6.9% 26.9% 49.2% 84.1% 46.0% 29.3% 17.0% 4.5% 9.7% 14.2% SG&A ratio 7.4% 7.0% 7.8% 9.5% 8.6% 7.5% 7.9% 8.9% 9.0% 9.2% Operating profit YoY 70.6% 41.1% 97.2% -2.1% -25.8% -43.3% -24.2% 34.9% -19.6% -40.1% OPM 3.6% 4.0% 3.3% 1.0% 2.1% 1.9% 2.2% 1.2% 1.6% 1.2% ecurring profit YoY 65.5% 38.5% 101.4% -6.2% -30.7% % -42.7% 547.8% - - PM 3.5% 3.9% 3.3% 1.0% 1.9% -2.2% 1.6% 5.5% - 0.9% Net income attributable to parent company shareholders YoY 88.3% 42.2% 126.8% -71.1% -46.6% % 3,466.2% - - Net margin 2.0% 2.4% 1.9% 0.1% 0.9% -2.1% 0.4% 3.8% % Segments (cumulative) FY02/17 FY02/18 FY02/19 Sales 10,558 22,704 35,199 47,302 13,209 27,808 42,284 55,776 13,874 27,538 Direct Marketing Support 7,541 16,510 25,428 33,875 8,778 18,197 27,302 35,420 8,100 16,337 Direct Mailing 2,747 5,622 8,659 11,536 3,677 8,139 12,722 17,144 4,843 9,319 Overseas ,218 1, Mail Order Others , ,014 1, YoY 19.6% 22.8% 26.6% 27.4% 25.1% 22.5% 20.1% 17.9% 5.0% -1.0% Direct Marketing Support 8.4% 14.2% 19.2% 19.9% 16.4% 10.2% 7.4% 4.6% -7.7% -10.2% Direct Mailing 46.9% 39.2% 34.1% 30.6% 33.8% 44.8% 46.9% 48.6% 31.7% 14.5% Overseas % % 355.8% 162.6% 26.3% 30.9% Others % 34.2% 20.0% 13.7% 2.2% 3.6% Operating profit ,271 1, , Direct Marketing Support ,406 1, ,039 1, Direct Mailing Overseas Mail Order Others Adjustments OPM 3.6% 3.8% 3.6% 2.9% 2.1% 2.0% 2.1% 1.9% 1.6% 1.4% Direct Marketing Support 5.3% 5.5% 5.5% 4.8% 3.8% 3.7% 3.8% 3.6% 3.5% 3.8% Direct Mailing 0.9% 0.9% 0.8% 0.5% 1.6% 1.7% 1.8% 1.6% 1.8% 2.1% Overseas % -22.3% -19.2% -17.9% -10.8% -24.3% Others 1.0% 2.5% -0.1% 0.4% 4.1% 2.1% 0.8% 1.7% 3.0% 1.3% Segments (quarterly) FY02/17 FY02/18 FY02/19 Sales 10,558 12,146 12,495 12,103 13,209 14,598 14,477 13,491 13,874 13,665 Direct Marketing Support 7,541 8,968 8,918 8,448 8,778 9,419 9,105 8,117 8,100 8,237 Direct Mailing 2,747 2,875 3,037 2,877 3,677 4,462 4,584 4,422 4,843 4,475 Overseas Mail Order Other YoY 19.6% 25.7% 34.0% 29.9% 25.1% 20.2% 15.9% 11.5% 5.0% -6.4% Direct Marketing Support 8.4% 19.7% 29.6% 21.9% 16.4% 5.0% 2.1% -3.9% -7.7% -12.6% Direct Mailing 46.9% 32.6% 25.6% 21.2% 33.8% 55.2% 50.9% 53.7% 31.7% 0.3% Overseas % % 107.1% 34.0% 26.3% 35.7% Other % 24.2% -3.5% -0.4% 2.2% 5.1% Operating profit Direct Marketing Support Direct Mailing Overseas Mail Order na Other Adjustments OPM 3.6% 4.0% 3.3% 1.0% 2.1% 1.9% 2.2% 1.2% 1.6% 1.2% Direct Marketing Support 5.3% 5.6% 5.6% 2.7% 3.8% 3.6% 4.0% 3.1% 3.5% 4.0% Direct Mailing 0.9% 0.9% 0.6% -0.2% 1.6% 1.8% 1.9% 1.1% 1.8% 2.4% Overseas % -24.0% -14.5% -14.9% -10.8% -37.8% Other 1.0% 3.9% -4.6% 1.5% 4.1% 0.0% -2.3% 4.0% 3.0% -0.6% Source: Shared esearch based on company data Note: From Q3 FY02/17, the Overseas segment is displayed separately from the Direct Marketing Support segment as an independent segment. From Q1 FY02/18, the Mail Order business, which had been included in the Other segment, is displayed separately as an independent segment. YoY comparisons have been rearranged based on the categories after these changes. From consolidated Q1 FY02/19, the company reviewed its distribution standards for shared expenses and changed the calculation method for segment profit or loss in order to improve the assessment of results for each reported segment. YoY comparisons are made using the calculation method after this change. 1/7

2 esearch eport by Shared esearch Inc. SG&A by segment (cumulative) FY02/17 FY02/18 FY02/19 SG&A expenses 777 1,629 2,606 3,757 1,135 2,235 3,378 4,581 1,244 2,502 Personnel expenses ,260 1, ,013 1,578 2, ent Advertising expenses Depreciation Goodwill amortization Other , , SG&A ratio 7.4% 7.2% 7.4% 7.9% 8.6% 8.0% 8.0% 8.2% 9.0% 9.1% Personnel expenses 3.7% 3.7% 3.6% 3.8% 3.8% 3.6% 3.7% 3.8% 4.0% ent 0.8% 0.8% 0.8% 0.8% 0.9% 0.9% 0.9% 0.9% 0.9% Advertising expenses 0.0% 0.0% 0.2% 0.3% 0.4% 0.4% 0.4% 0.5% 0.4% Depreciation 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.3% Goodwill amortization 0.3% 0.3% 0.3% 0.3% 0.4% 0.4% 0.4% 0.4% 0.3% Other 2.3% 2.2% 2.3% 2.4% 2.8% 2.4% 2.2% 2.4% 3.0% SG&A by segment (quarterly) FY02/17 FY02/18 FY02/19 SG&A expenses ,151 1,135 1,101 1,143 1,203 1,244 1,257 Personnel expenses ent Advertising expenses Depreciation Goodwill amortization Other SG&A ratio 7.4% 7.0% 7.8% 9.5% 8.6% 7.5% 7.9% 8.9% 9.0% 9.2% Personnel expenses 3.7% 3.6% 3.4% 4.6% 3.8% 3.5% 3.9% 3.9% 4.0% ent 0.8% 0.7% 0.8% 1.0% 0.9% 0.9% 0.9% 0.9% 0.9% Advertising expenses 0.0% 0.0% 0.6% 0.6% 0.4% 0.4% 0.5% 0.5% 0.4% Depreciation 0.2% 0.2% 0.2% 0.3% 0.2% 0.2% 0.2% 0.2% 0.3% Goodwill amortization 0.3% 0.3% 0.2% 0.5% 0.4% 0.4% 0.4% 0.4% 0.3% Other 2.3% 2.1% 2.5% 2.6% 2.8% 2.0% 1.9% 3.0% 3.0% Source: Shared esearch based on company data Parent earnings (cumulative) FY02/17 FY02/18 FY02/19 Sales 7,560 16,554 25,486 33,952 8,807 17,609 25,676 33,215 7,551 Cost of sales 6,620 14,515 22,405 30,006 7,853 15,844 23,088 29,896 6,672 Media costs (TV programs) 4,220 8,915 13,837 18,668 4,928 9,660 14,080 18,174 3,812 Media costs (TV commercials) 1,223 3,097 4,790 6,481 1,715 3,678 5,250 6,721 1,688 Media costs (other) Outsourcing expenses 973 2,063 3,133 4, ,054 3,040 4, Cost of merchandise Gross profit 940 2,038 3,080 3, ,764 2,588 3, GPM 12.4% 12.3% 12.1% 11.6% 10.8% 10.0% 10.1% 10.0% 11.6% Parent earnings (quarterly) FY02/17 FY02/18 FY02/19 Sales 7,560 8,993 8,932 8,465 8,807 8,801 8,067 7,539 7,551 Cost of sales 6,620 7,895 7,890 7,601 7,853 7,991 7,243 6,808 6,672 Media costs (TV programs) 4,220 4,695 4,922 4,831 4,928 4,732 4,420 4,094 3,812 Media costs (TV commercials) 1,223 1,874 1,693 1,691 1,715 1,963 1,572 1,471 1,688 Media costs (other) Outsourcing expenses 973 1,090 1, , Cost of merchandise Gross profit 940 1,098 1, GPM 12.4% 12.2% 11.7% 10.2% 10.8% 9.2% 10.2% 9.7% 11.6% Parent sales (cumulative) FY02/17 FY02/18 FY02/19 Sales 7,560 16,554 25,486 33,952 8,807 17,609 25,676 33,215 7,551 New clients 1,015 2,303 4,130 5,602 1,316 2,059 2,828 3, Mid-tier clients 2,836 6,228 9,190 12,072 3,237 7,197 10,666 13,837 3,100 Top-tier clients 3,711 8,023 12,167 16,278 4,251 8,334 12,121 15,698 3,500 % of sales New clients 13.4% 25.6% 46.2% 66.2% 14.9% 11.7% 11.0% 10.7% 9.3% Mid-tier clients 37.5% 69.3% 103.0% 142.7% 36.7% 40.9% 41.5% 41.7% 41.1% Top-tier clients 49.1% 89.2% 136.2% 192.3% 48.3% 47.3% 47.2% 47.3% 46.4% Parent sales (quarterly) FY02/17 FY02/18 FY02/19 Sales 7,560 8,993 8,932 8,465 8,807 8,801 8,067 7,539 7,551 New clients 1,015 1,288 1,827 1,472 1, Mid-tier clients 2,836 3,393 2,962 2,882 3,237 3,960 3,470 3,171 3,100 Top-tier clients 3,711 4,312 4,144 4,111 4,251 4,083 3,787 3,577 3,500 % of sales New clients 13.4% 14.3% 20.5% 17.4% 14.9% 8.4% 9.5% 9.7% 9.3% Mid-tier clients 37.5% 37.7% 33.3% 34.1% 36.7% 45.0% 43.0% 42.1% 41.1% Top-tier clients 49.1% 48.0% 46.4% 48.6% 48.3% 46.4% 46.9% 47.4% 46.4% Source: Shared esearch based on company data 2/7

3 esearch eport by Shared esearch Inc. 1H FY02/19 results (out September 28, 2018) Sales JPY27.5bn (-1.0% YoY) Operating profit JPY389mn (-29.7% YoY) ecurring loss JPY165mn (JPY72mn recurring loss in 1H FY02/18) Net loss* JPY1.3bn (JPY194mn net loss in 1H FY02/18) *Net loss attributable to parent company shareholders Q2 FY02/19 sales reached 104.0% of 1H FY02/19 company forecasts, while operating profit reached 130.7%. The company revised full-year FY02/19 earnings forecasts because of an expected decrease in sales in 2H and a booking of extraordinary losses related to an affiliate. evisions to FY02/19 earnings forecasts evisions to FY02/19 earnings forecasts Sales: JPY53.6bn (JPY54.8bn in previous forecasts) Operating profit: JPY537mn (JPY830mn in previous forecasts) ecurring loss: JPY59mn (recurring profit of JPY797mn in previous forecasts) Net loss*: JPY1.3bn (net income of JPY394mn in previous forecasts) *Net income attributable to parent company shareholders easons for the revision <Sales and each profit category> Although sales in the web and TV shopping businesses missed forecasts, 1H sales were 4.0% above plan as sales exceeded forecasts at the Direct Mailing segment and sales of the TV business were strong. However for 2H, the company revised the sales forecasts down 2.2% compared to initial forecasts because it expects sales in the TV business to decline and for the TV shopping business and Overseas segment to be weak. SG&A expenses in 1H were 11.0% below forecasts due to personnel expenses in the TV business missing forecasts. In 2H, while the company expects advertising and promotional expenses in the TV shopping business to fall below the initial budget, it expects investments in various AI-related tools in the web business and personnel expenses from hiring employees to rise. For the full year, the company expects SG&A expenses to be 6.7% lower than initial forecasts. In non-operating expenses, the company booked JPY544mn in equity-method investment losses reflecting its holdings in equity-method affiliate TV Direct Public Company Limited (TVD), whose market value continued to decline, resulting in a one-time amortization of goodwill. Further, the company booked JPY962mn as extraordinary losses resulting from the impact of impairment losses. <Booking inventory valuation losses> After investigating the future sales capability of inventory in its overseas subsidiaries, the company booked JPY129mn in inventory valuation losses in 1H. They were largely comprised of inventory at PT. Merdis International (Merdis; JPY36mn) and JML Singapore Pte. Ltd. (JML; JPY85mn). <Dividends and shareholder benefits> Since the main causes of the forecast revision, extraordinary losses, were non-cash expenses, the company decided to maintain the year-end dividend forecast for FY02/19 at JPY7 a share. The company made no changes to shareholder benefits. 3/7

4 esearch eport by Shared esearch Inc. egarding losses in the Overseas segment Impairment losses (consolidated) After considering progress towards business forecasts and future outlook at consolidated subsidiaries Merdis and JML, the company decided to book impairment losses of JPY103mn in fixed assets related to the segment and a total of JPY859mn (Merdis: JPY585mn, JML: JPY273mn) from unamortized goodwill booked at the time of the acquisition of shares in these companies as extraordinary losses. Valuation losses from affiliates (non-consolidated) Accompanied by the booking of impairment losses as described above, the company booked JPY1.4bn in valuation losses from affiliates (Merdis: JPY889mn, JML: JPY488mn) as extraordinary losses in the non-consolidated earnings statement for 1H FY02/19. Background of booking losses Under the previous medium-term management plan, the company invested a total of approximately JPY5.3bn in three years. Of this amount, the company invested JPY1.3bn in Merdis (74% stake), JPY520mn in JML (75% stake), and JPY1.0bn in TVD (15% stake) in order to quickly secure sales hubs in ASEAN countries, which were showing strong growth. However, current business results in these companies have missed targets due to changes in the business environment, obsolescence of handled products, and delays in product wholesale from Japan. As a result, the company determined that it is difficult to reach initial forecasts. Accordingly, the company decided to book unamortized goodwill and fixed assets at consolidated subsidiaries Merdis and JML as impairment losses in 1H FY02/19. The company understands that it must promptly reexamine its growth strategy. It plans to reconsider its group growth strategy and revise the medium-term management plan, including its policy for the Overseas business, by the end of FY02/19. eduction of executive remuneration The company decided to reduce the monthly base remuneration of the four full-time directors by 10% for the period between June 2018 and May 2019 due to lower sales and profit forecasts at the parent for two consecutive fiscal years as well as the missing of targets in the medium-term management plan. In addition, the company decided to reduce remuneration for executives as it is seriously concerned about the impairment losses and forecast revisions, and seeks to clarify managerial responsibility. Overview of executive remuneration reduction epresentative Director and CEO (one person): Director and CVO (one person): Senior executive director (one person): 40% reduction in base monthly pay 50% reduction in base monthly pay 10% reduction in base monthly pay From consolidated Q1 FY02/19, the company reviewed its distribution standards for shared expenses and changed the calculation method for segment profit or loss in order to improve the assessment of results for each reported segment. YoY comparisons are made using the calculation method after this change. Quarterly sales (JPYmn) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Direct Marketing Support Direct Mailing Overseas Other YoY (right axis) 14,598 12,495 13,209 14,477 13,874 12,146 12,103 13,491 13, % 10,558 4, % 3,677 4,584 4, % 4, % 2,875 3,037 2, % 15.9% 4,475 2, % 11.5% 5.0% -6.4% 7,541 8,968 8,918 8,448 8,778 9,419 9,105 8,117 8,100 8,237 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY02/17 FY02/18 FY02/19 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% Source: Shared esearch based on company data 4/7

5 esearch eport by Shared esearch Inc. Quarterly operating profit (JPYmn) Direct Marketing Support Direct Mailing Overseas Other OPM (right axis) (100) (200) (300) % 3.3% % % 2.2% 1.6% 1.0% 1.9% 1.2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY02/17 FY02/18 FY02/ % 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Source: Shared esearch based on company data Performance by segment Direct Marketing Support segment Segment sales were JPY16.3bn (-10.2% YoY). Operating profit was JPY616mn (-8.8% YoY). In the TV business, the company made efforts to maximize TV shopping sales of customer companies through provision of optimal media based on data analysis, hit video production, and efficient order management, which are the company s strengths. Sales fell as the company adjusted its procurement volume of media slots. However, gross profit margin, an area of focus, improved. In FY02/18, low margin, performance-based compensation agreements were one of the causes of lower gross profit, so the company reviewed the agreement conditions and sought to mitigate its risks. As a result, gross profit margin improved YoY. In the website business, the company proactively increased hires in order to expand its business in the future. It also strove to both increase transactions with existing customers and secure new customers by making proposals which utilized both TV and web, utilizing adflex communications inc., which became a subsidiary in March In September 2018, the company started providing a prioritized service in Japan for the listing ad automatic optimization service AdScale as a service development partner of SOPHOLA Inc. AdScale is an AI tool that helps improve campaign performance of listing advertisements through a bidding/budget optimization algorithm uniquely developed by AdScaleBV of the Netherlands. The tool is already used by thousands of companies overseas. Direct Mailing segment In the Direct Mailing segment, sales were JPY9.3bn (+14.5% YoY). Operating profit was JPY195mn (+39.6% YoY). With Mail Customer Center Co., Ltd. (MCC) as the main player, the segment is involved in the direct mail agency business for Yu-Mail and Kuroneko DM Bin. Transaction volume fell slightly due to changes in the market environment, but efforts to tap into new company clients and revise sales prices for existing clients made steady progress. Overseas segment In the Overseas segment, sales were JPY990mn (+30.9% YoY). The operating loss was JPY241mn (loss of JPY169mn in 1H FY02/18). In ASEAN countries the company conducts product sales and wholesaling through retail, e-commerce, and televised home shopping primarily through its overseas subsidiary that was converted in FY02/17. As the company secured sales routes and sales locations to ASEAN countries under the previous medium-term management plan, sales exceeded forecasts and rose YoY. However, operating profit finished below forecasts due to delays in product wholesale from Japan, obsolescence in handled products, and currency fluctuations stemming from international trade issues. As a result, subsidiaries belonging to this segment missed forecasts made at the time of acquisition and led to a booking of impairment losses. The company still thinks direct marketing in the ASEAN region has strong growth potential. As such, it will revise its business strategy, including selection and concentration of businesses, and aim for a quick recovery of earnings. 5/7

6 esearch eport by Shared esearch Inc. Mail Order business Sales were JPY158mn (JPY700,000 in 1H FY02/18) and the operating loss was JPY190mn (loss of JPY107mn in 1H FY02/18). In the Mail Order business, the company sells general-use herbal medicine by mail while providing careful health counselling by a pharmacist, primarily in Nippon Health Care Advisors, Inc., a subsidiary it established in March In July 2018, the company began selling a new product for improving weariness and lack of appetite called My Chinese Herbal Medicine: Extract of Hochuekkito This business is positioned as a business requiring investment in order to expand the company s business area in the future. In this business, the company is taking efforts to expand the number of customers and use product development and sales promotions to reach profitability. Other business In the Other business segment, sales were JPY734mn (+3.6% YoY), and the operating profit was JPY9mn (around -37.7% YoY). Nippon Department Store Inc. retails local specialties from various regions of Japan under the Nippon Department Store brand name. It is striving to strengthen the wholesale business and increase profits from each of its stores. In May 2018, it opened Nippon Department Store Sakaba in Tokyo Marunouchi, the first restaurant for Nippon Department Store, as part of an area business alliance with Marugame City, Kagawa Prefecture and Nishiizu City, Shizuoka Prefecture. The company will continue to select candidate areas to open new stores. Company forecasts for FY02/19 (as of March 30, 2018) Earnings FY02/13 FY02/14 FY02/15 FY02/16 (JPYmn) FY Act. FY Act. FY Act. FY Act. 1H Act. 2H Act. FY Act. 1H Act. 2H Act. FY Act. 1H Act. 2H Est. FY Est. Sales 33,826 36,024 32,185 37,132 22,704 24,598 47,302 27,808 27,968 55,776 27,538 26,063 53,601 YoY -2.8% 6.5% -10.7% 15.4% 22.8% 32.0% 27.4% 22.5% 13.7% 17.9% -1.0% -6.8% -3.9% Operating profit , , YoY -74.9% 56.1% 18.6% -2.3% 52.7% 59.7% 55.3% -35.6% -10.5% -26.0% -29.7% -69.1% -48.0% OPM 1.5% 2.2% 2.9% 2.4% 3.8% 2.2% 2.9% 2.0% 1.7% 1.9% 1.4% 0.6% 1.0% ecurring profit , YoY -74.7% 54.4% 19.8% -4.4% 49.1% 61.1% 53.5% % -33.5% % - PM 1.5% 2.2% 2.9% 2.4% 3.7% 2.1% 2.9% -0.3% 3.5% 1.6% - 0.4% - Net income attrib. to parent company shareholders , ,292 YoY -78.4% 51.1% 42.3% -11.0% 58.8% 63.4% 60.3% % -49.3% % - Net margin 0.7% 1.0% 1.7% 1.3% 2.2% 1.0% 1.6% -0.7% 2.1% 0.7% - 0.2% - Source: Shared esearch based on company data Note: Overseas segment is included in the Direct Marketing Support segment. FY02/17 FY02/18 FY02/19 This note is the most recent addition to the full report. 6/7

7 About Shared esearch Inc. esearch eport by Shared esearch Inc. We offer corporate clients comprehensive report coverage, a service that allows them to better inform investors and other stakeholders by presenting a continuously updated third-party view of business fundamentals, independent of investment biases. Shared esearch can be found on the web at Disclaimer This document is provided for informational purposes only. No investment opinion or advice is provided, intended, or solicited. Shared esearch Inc. offers no warranty, either expressed or implied, regarding the veracity of data or interpretations of data included in this report. We shall not be held responsible for any damage caused by the use of this report. The copyright of this report and the rights regarding the creation and exploitation of the derivative work of this and other Shared esearch eports belong to Shared esearch. This report may be reproduced or modified for personal use; distribution, transfer, or other uses of this report are strictly prohibited and a violation of the copyright of this report. Our officers and employees may currently, or in the future, have a position in securities of the companies mentioned in this report, which may affect this report s objectivity. Japanese Financial Instruments and Exchange Law (FIEL) Disclaimer The report has been prepared by Shared esearch under a contract with the company described in this report ( the company ). Opinions and views presented are ours where so stated. Such opinions and views attributed to the company are interpretations made by Shared esearch. We represent that if this report is deemed to include an opinion by us that could influence investment decisions in the company, such opinion may be in exchange for consideration or promise of consideration from the company to Shared esearch. Contact Details Shared esearch Inc Sendagi Bunkyo-ku Tokyo, Japan Phone: +81 (0) info@sharedresearch.jp 7/7