Performance trends of Neomarketing <4196>.
1. Performance summary of Q2 FY2024. In Japan during the cumulative period of Q2 FY2024, there has been a moderate recovery in economic activity as tourist demand increased and the employment and income environment improved, but the economic outlook both domestically and internationally remains uncertain due to global financial tightening, rising raw material prices, progress in yen depreciation and consumer price increases. Japanese companies are faced with themes such as DX promotion, innovation, productivity improvement, and customer creation in the midst of population decline, and must re-examine the way they approach marketing amidst rapidly changing market environments. Against the background of these challenges, demand for the marketing support business offered by the company group in the medium to long term is expected to be generated.
In this situation, the consolidated performance for Q2 FY2024 of the Company totaled sales of JPY 1,208 million (a year-on-year decrease of 0.5%), operating profit of JPY 138 million (a year-on-year decrease of 36.7%), ordinary profit of JPY 138 million (a year-on-year decrease of 37.0%), and a net profit attributable to parent company shareholders for the quarter of JPY 86 million (a year-on-year decrease of 37.9%). Although there was a significant decline in profit, it was positioned as an active investment period for the quarter and overall progress is generally proceeding in line with the full-year forecast. The full-year earnings forecast was revised upward due to the expected recognition of special income accompanied by the transfer of shares in consolidated subsidiary Sales Support. The progress rate for the revised full-year earnings forecast was approximately 48.3% for sales, 69.4% for operating income, and 69.4% for ordinary income, and profits were generally in line with the planned settlement. However, the progress rate for the net profit attributable to parent company shareholders was 31.1%, because special profits are expected to be recognized as a result of the sale of shares in Sales Support in Q3.
By service revenue, although overall sales decreased from the previous year's Q2 due to the impact of the expiration of large-scale Customer Success contracts, Insight-Driven continued to perform well with growth in the double digits. As the number of communication initiatives such as business negotiations and digital marketing/PR consultations increased, we plan to focus even more on sales activities for the latter half of the year. Specifically, Insight-Driven sales were significantly up at JPY 286 million (a year-on-year increase of 12.4%). By proactively proposing solutions to high-level customer issues that cannot be solved by online research, prices went up. Customer-Driven sales were JPY 507 million (a year-on-year increase of 2.9%). Enhanced proposal capabilities and improved order prices through the hiring of more researchers and the release of new services led to an increase in the number of inquiries. Sales of Digital Marketing/PR were JPY 211 million (a year-on-year increase of 2.5%). We are focusing on building a structure, placing an emphasis on hiring and education for digital marketing and PR, and expect to proactively strengthen sales after the latter half of the year. On the other hand, sales of Customer Success and others were JPY 202 million (a year-on-year decrease of 21.9%). It decreased due to the impact of the expiration of large-scale contracts at the end of FY2023.
As an effort example for Q2 FY2024, it tackled quality improvement and expansion of the service menu as a strategy for expanding the number of customers and increasing the unit price. Specifically, we started an initiative to improve the accuracy of responses by incorporating visual data, in this case - gaze data - when answering questionnaires. By measuring the respondent's attitude from gaze data and studying the relationship with the response content, we aim to provide high-quality survey services. In addition, we have started the Inclusive Marketing business. This is a service that supports companies in carrying out inclusive marketing with the aim of understanding diversity and solving social issues, such as gender, age, disabilities, and nationality. Through these initiatives, the Company aims to improve service quality and increase repeat rates, order rates, and customer unit prices, leading to improved performance.
Performance trends of Neomarketing <4196>. 1. Performance summary of Q2 FY2024. In Japan during the cumulative period of Q2 FY2024, there has been a moderate recovery in economic activity as tourist demand increased and the employment and income environment improved, but the economic outlook both domestically and internationally remains uncertain due to global financial tightening, rising raw material prices, progress in yen depreciation and consumer price increases. Japanese companies are faced with themes such as DX promotion, innovation, productivity improvement, and customer creation in the midst of population decline, and must re-examine the way they approach marketing amidst rapidly changing market environments. Against the background of these challenges, demand for the marketing support business offered by the company group in the medium to long term is expected to be generated. In this situation, the consolidated performance for Q2 FY2024 of the Company totaled sales of JPY 1,208 million (a year-on-year decrease of 0.5%), operating profit of JPY 138 million (a year-on-year decrease of 36.7%), ordinary profit of JPY 138 million (a year-on-year decrease of 37.0%), and a net profit attributable to parent company shareholders for the quarter of JPY 86 million (a year-on-year decrease of 37.9%). Although there was a significant decline in profit, it was positioned as an active investment period for the quarter and overall progress is generally proceeding in line with the full-year forecast. The full-year earnings forecast was revised upward due to the expected recognition of special income accompanied by the transfer of shares in consolidated subsidiary Sales Support. The progress rate for the revised full-year earnings forecast was approximately 48.3% for sales, 69.4% for operating income, and 69.4% for ordinary income, and profits were generally in line with the planned settlement. However, the progress rate for the net profit attributable to parent company shareholders was 31.1%, because special profits are expected to be recognized as a result of the sale of shares in Sales Support in Q3. By service revenue, although overall sales decreased from the previous year's Q2 due to the impact of the expiration of large-scale Customer Success contracts, Insight-Driven continued to perform well with growth in the double digits. As the number of communication initiatives such as business negotiations and digital marketing/PR consultations increased, we plan to focus even more on sales activities for the latter half of the year. Specifically, Insight-Driven sales were significantly up at JPY 286 million (a year-on-year increase of 12.4%). By proactively proposing solutions to high-level customer issues that cannot be solved by online research, prices went up. Customer-Driven sales were JPY 507 million (a year-on-year increase of 2.9%). Enhanced proposal capabilities and improved order prices through the hiring of more researchers and the release of new services led to an increase in the number of inquiries. Sales of Digital Marketing/PR were JPY 211 million (a year-on-year increase of 2.5%). We are focusing on building a structure, placing an emphasis on hiring and education for digital marketing and PR, and expect to proactively strengthen sales after the latter half of the year. On the other hand, sales of Customer Success and others were JPY 202 million (a year-on-year decrease of 21.9%). It decreased due to the impact of the expiration of large-scale contracts at the end of FY2023. As an effort example for Q2 FY2024, it tackled quality improvement and expansion of the service menu as a strategy for expanding the number of customers and increasing the unit price. Specifically, we started an initiative to improve the accuracy of responses by incorporating visual data, in this case - gaze data - when answering questionnaires. By measuring the respondent's attitude from gaze data and studying the relationship with the response content, we aim to provide high-quality survey services. In addition, we have started the Inclusive Marketing business. This is a service that supports companies in carrying out inclusive marketing with the aim of understanding diversity and solving social issues, such as gender, age, disabilities, and nationality. Through these initiatives, the Company aims to improve service quality and increase repeat rates, order rates, and customer unit prices, leading to improved performance.
(Written by FISCO guest analyst Nozomi Kokushige).