Company Research and Analysis Report
FISCO Ltd.
http://www.fisco.co.jp

Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

11-May-15

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato伪伪A major player in SFA/CRM software with record highin FY 2014 (the year ending December 31, 2014)
Softbrain <4779> (hereafter, “the company”) is a major player in SFA (Sales Force Automation)/ CRM (Customer Relationship Management) software, which support resolving corporate sales
issues, and holds 20-30% of the domestic market share in the SFA field. The field marketingbusiness operated by its subsidiary company is developing into a second core revenue stream.
The company’s consolidated financial results for FY 2014, the year ending December 31,
2014 (hereafter, “FY 2014”), recorded high for the first time in seven years with 11.7% sales
growth year-on-year (hereafter, “y/y”) to ¥4,934mn while operating profit increased by
15.4% to ¥568mn, its first profit increase in two years. Field marketing business sustaining its
high growth through expansion in the number of customers and share of trade, and earnings
recovery in systems development and other businesses contributed to the profit increase.
e-Sales Manager related business, however, reported profit fall due to the accumulation of
upfront investment including costs for development and sales-promotion, though sales revenue
increased steadily.
The increase both in sales and profit is projected to continue in FY 2015, with sales increasing by
9.4% y/y to ¥5,400mn and operating profit by 14.3% y/y to ¥650mn. In addition to field marketingbusiness in good condition, the company also aims to enlarge the number of customers in its
e-Sales Manager related business by advancing the product development which will enhance
the convenience. The company focuses on sales growth in e-Sales Manager related business,
and aims for double-digit sales growth in this term while strengthening its partnerships withenterprises which have strong sales channel for small- and medium-sized companies.
The company does not plan to pay a dividend this term. The company is currently considered
to be in an investment phase in order to expand its businesses, therefore its retained earnings
will preferentially be allocated to such areas as development investment and sales-promotion
costs. The company will consider reviewing its shareholder return policy in accordance with
its financial condition.

伪伪Check Point
・ Increase in proportion of stock-type (recurring) revenue from cloud and on-premises
contracts
・ Profitability indicators such as operating profit margin, ROE, and ROA exceed 10%
・ New large-scale deals and growth of “rounder” (field merchandiser) human resourcesbusiness are expected

We encourage readers to review our complete legal statement on “Disclaimer” page.
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Softbrain Co., Ltd.

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4779 Tokyo Stock ExchangeFirst Section

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FISCO Ltd. Analyst
Yuzuru Sato

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伪伪Business Outline
Cumulative total of installation of the company’s productexceeds 3,000 companies, from large companies to small- andmedium-sized companies
The company’s operations are classified in 4 categories; e-Sales Manager related business,
field marketing business, system development business, and other businesses. The majority ofboth sales and profit are coming from e-Sales Manager related and field marketing business,
which are the two main revenue streams. There are 5 consolidated subsidiaries as of the endof December 2014, each of which business outlines are as described in the table below.
List of Consolidated Subsidiaries and Business Outlines
Name of company
e-Sales Manager related business
Softbrain Co., Ltd.

Ownership-

Softbrain Service Co., Ltd.
Field marketing business
Softbrain Field Co., Ltd.
System development business
Softbrain Offshore Co., Ltd.
Other businesses
Softbrain Integration Co., Ltd.
Diamond Business Planning Inc.

Primary business
Sales of SFA licenses, cloud services, customized
development, sales consulting, and sales skills training

98.7%
58.1% Field activities operations, market research
100.0% Customized development of software
Consulting & education in business operations using
smartphone
70.0% Planning, editing, & publishing of business publications

100.0%○e-Sales Manager related businessThis includes sales of licenses for SFA software named “e-Sales Manager”, cloud services,
customized development, as well as sales consulting and skills training.
“e-Sales Manager” is a software tool which helps identify areas for improvement and enhancesales efficiency by enabling users to grasp the situation quantitatively and to visualize eachprocess in sales activities, which are described as process management of sales activities.

We encourage readers to review our complete legal statement on “Disclaimer” page.
2

■Outline■of Businesses

Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

11-May-15

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

Sales for e-Sales Manager can be divided into two types; on-premises type which yields
revenue from sales of software licenses, and cloud type with which usage fees are collected.
In recent years, the majority of contracts have been cloud-type services that do not requirea capital expenditure burden and that can keep down the initial installation costs. As for the
cloud type, the company provides e-Sales Manager Remix Cloud (¥6,000/month per user) as
well as e-Sales Manager nano (¥500/month per user), which is simplified with functions usable
for small- and medium-sized companies with 10 employees or less.
The domestic market scale of SFA (Sales Force Automation) is approx. ¥5 to 8 billion, out of
which the company is thought to hold a share of 20-30%. Competitors include NI Consulting
CO., LTD. (unlisted), and Salesforce.com Inc. (cloud type only). Salesforce.com holds the top
share with more than 40% in the market of cloud-type SFA.
The cumulative total of e-Sales Manager installation exceeds 3,000 companies, which consistsof a broad range of companies from manufacturers to service providers, from large companies tosmall- and medium-sized companies. The unique selling propositions of the company’s productinclude, on top of its usability such as user-friendliness and processing speed, compatibility
to both on-premises and cloud sales types, and that it is well-supported by services such as
consulting and educational services to help improve the outcome of installation.
Example of companies with e-Sales Manager installed

Source: Company data

○Field marketing business
Field marketing business, which has been developed by a subsidiary company named Softbrain
Field Co., Ltd., mainly carries out field activities at stores and market research using “casts”(registered staff members) which consist mostly of housewives. It also provides services suchas temporary staffing of and referrals to “rounders” (field merchandiser) who carry out field
activities as well as shoppers’ databases collected by the company.

We encourage readers to review our complete legal statement on “Disclaimer” page.
3

■Outline■of Businesses

Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

Field activities mainly represent business negotiation, layout of sales floors, and creation ofpoint-of-purchase ads at retail stores when consumable manufacturers launch new products
such as food items and daily commodities. Although these activities used to be accomplishedby employees of the manufacturer, outsourcing of the activities has become more popular
for the purpose of improving cost efficiency in sales promotion. There are more than 200
corporate customers including customers in the past with a broad range of manufacturers
for food and beverage and for healthcare-related products. The number of “casts” exceeded
50,000 people as of the end of December 2014, and the stores covered include various typesof businesses such as drug stores and convenience stores, with which nationwide coverage is
one of the company’s strengths.
Number of stores covered - by type of business

11-May-15

Type of business

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

Drug stores
GMS & SM
Convenience storesBook stores
Hardware stores
Discount storesElectronic retail stores
Specialty stores
Other stores
Total

Number of chain stores
186
321
18
12
45
16
12

610

Number of stores
19,831
19,651
16,658
9,153
4,164
2,216
2,863
24,124
16,484
115,144

Note: as of January 2015

Further, a new marketing support service named “POB – Point of Buy” (which provides dataon reasons for purchase) was commenced in 2013 jointly with Credit Saison (8253), a leading
company in the credit-card industry. It provides more reliable customer behavior analysis byenabling users to collect data such as reasons for purchase of products in retail stores and/or menu items ordered at restaurants with receipts attached. It is structured in a way where
customers, on the other hand, are eligible to acquire the points on Eikyufumetsu.com (points
that never expire) by Credit Saison. The number of registered members (consumers) exceeds
120,000 people and it is building the nation’s largest platform.
○Systems development businessContracted software development is undertaken by Softbrain Offshore Co., Ltd., a subsidiarycompany. Divestiture of the subsidiary company in China was conducted in September 2013as a part of its business structural reforms though it keeps a business relationship as a
subcontractor, and the company continues to utilize its Vietnamese and domestic near-shoringbases.
○Other businesses
This includes business consulting, sales and support in installation of smart devices, andeducational services by Softbrain Integration Co., Ltd., and planning, editing and publishing ofsales promotion-related publications by Diamond Business Planning Inc.

We encourage readers to review our complete legal statement on “Disclaimer” page.
4伪伪Business Trends
Increase in proportion of stock-type (recurring) revenue fromcloud and on-premises contracts

Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

11-May-15

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

(1) Overview of the results for FY 2014
The consolidated results for FY 2014 that were announced on January 30 showed growthin each category such as sales by 11.7% y/y to ¥4,934mn, operating profit by 15.4% y/y to¥568mn, and current profit by 17.5% to ¥578mn, also showed a decline in net profit by 35.4%
y/y to ¥252mn, which means all the results surpassed those in the previous term except net
profit. In addition, all the results, including net profit, exceeded the beginning-of-year forecast.
The company recorded its highest sales in seven terms (FY 2007: ¥4,546mn) with field
marketing business as the driving force. Although SG&A costs including sales-promotion costs
and labor costs rose, operating profit increased for the first time in two terms as a result of theincreased sales and the structural reforms to the systems development business. Net profit
declined, which is affected by the normalization of the tax burden and the increased minority
interest in conjunction with the increased income at subsidiaries including Softbrain Field. An
overview of conditions in each business segment is shown below.
FY 2014 consolidated results(unit: ¥mn)
FY 2013

FY 2014

ResultRatio(–to-sales)

Plan at
BOY

ResultRatio(–to-sales)

y/y

4,416
2,658
1,260
492
492
510
75
43
391

60.2%
28.5%
11.2%
11.2%
11.5%
8.9%

4,800
530
530
250

4,934
2,906
1,442
568
578
577
242
82
252

58.9%
29.2%
11.5%
11.7%
5.1%

11.7%
9.4%
14.4%
15.4%
17.5%
13.2%
222.0%
88.9%-35.4%Sales
COGsSG&A costs
Operating profit
Current profit
Pretax profitCorporate income tax
Minority interest
Net profit

Achievement
rate(-to-plan)
2.8%
7.3%
9.2%
1.1%

○e-Sales Manager related businessIn e-Sales Manager related business, sales (for external customers, the same shall apply
hereafter) grew by 5.9% y/y to ¥2,386mn, while segment profit declined by 17.2% to ¥229mn.
e-Sales Manager Remix Cloud, which constitutes approx. 40% of this business, achieved double
digit growth y/y in sales due to the steady development of new customers through incremental
enhancement of functionality. Moreover, there was an increase in cases of orders for thevarious consulting services such as sales education & training and Process Management
College, which accounts for approx. 20 to 30% of the business, in parallel with installation of
e-Sales Manager which resulted in a y/y double digit increase in profit. On-premises type,conversely, recorded large-scale deals in 2013, therefore its results remained unchanged.
Segment profit were down for the second consecutive period, for which the main reasons are
the increased prior investment in such areas as development to enhance the functionality of
e-Sales Manager, and sales promotion to acquire customers. The sales ratio for stock-typeservices, which includes cloud services and maintenance services for on-premises contracts,
rose to around 50% of this business and the stability of revenue base is steadily improving.

We encourage readers to review our complete legal statement on “Disclaimer” page.
5

■Business■
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Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

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Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato㻜㻜㻲㼅㻌㻞㻜㻝㻞

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○Field marketing business
Field marketing business maintained high growth, with sales increasing by 26.4% y/y to¥1,652mn, and segment profit by 18.0% y/y to ¥300mn. It receives high evaluation marks fromtheir customers on their service quality and the cost-efficiency. Accumulated continuous
projects with its primarily-targeted consumables manufacturers including pharmaceuticals,
foodstuffs, and commodities and acquisition of periodic large-scale deals contributed to theincrease in profit.
Although revenue contribution from POB business which commenced in February 2013 is yet
small, the number of registered members exceeds 120,000 people and it is steadily building aplatform with a high usage value for corporate marketing analysis. A website named RECEIPO
was established in October 2014 which introduces products in the form of a ranking withreviews by real customers who have bought the product, and it aims to further expand thisbusiness by acquiring more members.
Similarly, the rounder human resources business that was launched in March 2013 (temporary
staffing of and referrals to field support staff) is also achieving a certain result as in deals
made with more than 50 companies, and it is expected to contribute to revenues in the future.
Despite the increase in segment profit, the profit margin fell slightly from 19.5% to 18.2%,
which is thought to be affected by intensified competition and higher costs in conjunction
with the launch of new businesses. However, the company persists maintaining profitability incomparison to peers in the field marketing industry.

We encourage readers to review our complete legal statement on “Disclaimer” page.
6

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Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

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Important disclosuresand disclaimers appear
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Yuzuru Sato㻿㼛㼒㼠㼎㼞㼍㼕㼚㻭㻶㻵㻿㻹㼑㼐㼕㼍㼒㼘㼍㼓

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○Systems development business
The results of the system development business showed sales increased by 2.3% y/y to¥430mn and segment profit at ¥0.04mn (¥56mn loss in the previous year) which means itturned into the black slightly.
Against the backdrop of the recovery in IT investment and the chronic shortage of humanresources required for development, the temporary staffing business, in which development
personnels are dispatched to corporate customers, performed favorably which resulted inincreased profit. In terms of profit and loss, moreover, the reduction in fixed costs by thedivestiture of the subsidiary development company in China in addition to the fact that the
impact of the unprofitable project, which was generated in the previous term, took a round,
contributed to the improved profit.

We encourage readers to review our complete legal statement on “Disclaimer” page.
7

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Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

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Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato㻜㻙㻝㻜㻜㻲㼅㻌㻞㻜㻝㻠

○Other businesses
Results in other businesses showed sales increased by 7.0% y/y to ¥465mn and segment profit
increased by around 6 times to ¥36mn.
Softbrain Integration performed strongly, benefiting from the cross-selling effects between
e-Sales Manager and operational consulting & educational services utilizing smart devices
such as iPad . Softbrain Integration was certified in Apple Consultants Network in July 2014
for its achievement in introducing iPad to organizations. It continues to develop professional
services with leading-edge information and technologies as an Apple certified IT consultant.
Publishing business at Diamond Business Planning also recorded an increase in both sales andprofit due to the increased demand for corporate publications.

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We encourage readers to review our complete legal statement on “Disclaimer” page.
8

■Business■
TrendsProfitability indicators, such as operating profit margin, ROE, and
ROA, exceed 10%(2) Financial position and management indices

Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

11-May-15

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

Examining the financial position at the end of December 2014, total assets increased by¥478mn y/y to ¥4,145mn. Items that mainly impacted the rise and fall are; cash and deposits
increased by ¥619mn, sales receivables and deferred tax assets decreased by ¥40mn and¥71mn respectively.
On the other hand, liabilities at the end of the term rose to ¥1,134mn with a ¥189mn increase.
Interest bearing liabilities increased by ¥30mn and each of arrears, advances received, andnotes and accounts payable slightly increased in conjunction with business expansion. Net
assets have grown to ¥3,011mn with a ¥288mn increase including ¥248mn in retained earningsand ¥35mn in minority interest.
Looking at the main management indices, all the indices including the current ratio, shareholders’equity ratio and debt/equity ratio which indicate stability slightly worsened compared to theend of the previous term, however, it can still be said that the company has maintained financial
strength. Each indicator of profitability, such as ROA, ROE, and the operating profit margin, aremore than 10%. However, there has been a noticeable decline in ROE due to the enhancementof shareholders’ equity in conjunction with the increase in profit, therefore it seems that thecompany will be required to be committed to maintaining and improving its capital efficiency.
Consolidated Balance Sheet

Current assets(Cash and deposit )Fixed assets
Total assets
Current liabilities(Interest bearing liabilities)
Fixed liabilities
Net assets(Shareholders’ equity)(Minority interest)
Main management indices(Stability) %Quick ratio
Shareholders’ equity ratio
D / E ratio(profitability) %ROA
ROE
Sales operating profit margin

FY 2011
2,085
1,267
369
2,454
694
150
1,759
1,504
260

FY 2012
2,706
1,751
500
3,206
924
150
2,281
1,963
318

FY 2013
3,061
2,058
606
3,667
944
150
2,722
2,361
361

FY 2014
3,589
2,677
555
4,145
1,124
180
9
3,011
2,613
397

300.1%
61.1%
10.1%

292.7%
61.2%
7.7%

324.0%
64.4%
6.4%

319.1%
63.0%
6.9%

19.7%
26.1%
13.1%

22.0%
26.5%
14.3%

14.3%
18.1%
11.2%

14.8%
10.2%
11.5%

(unit: ¥mn)
Variation
528
619
-50
478
179
30
9
288
252
35

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9

伪伪Future Outlook
An increase in sales and profit is expected from the high growthin the field marketing business

Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

11-May-15

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

(1) FY 2015 Outlook
Consolidated result in FY 2015 (the year ending December 31, 2015) projects that sales willrise by 9.4% y/y to ¥5,400mn, operating profit by 14.3% to ¥650mn, current profit by 12.3% to¥650mn, and net profit by 18.7% to ¥300mn. In addition to field marketing business continuing
high growth, the company also aims to enlarge the number of customers in its e-Sales Manager
related business by strengthening functionality on a continuous basis. System development
business and other businesses are forecasted to remain unchanged y/y. This year’s efforts
for the two core businesses are as described below.

Aims to increase the number of customers both for cloud andon-premises type while enhancing functionality(2) e-Sales Manager related business
The company aims for a more than 10% sales increase (y/y) for e-Sales Manager related
business this year. Their strategy is to proactively invest in product development pursuing“SFA with No.1 usability” and to increase the number of customers both for cloud and onpremises type while enhancing functionality.
Function enhancement was implemented four times in the previous year all of which werehighly evaluated by customers. The design of its smart phone version was renewed in
January this year to improve user-friendliness. The company plans to strengthen its productcompetitiveness by continuous function enhancement as shown below.
FY2015 Development Plan

Source: company data

We encourage readers to review our complete legal statement on “Disclaimer” page.
10

■Future■
OutlookUpgrades implemented in FY 2014
Date implemented

Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

11-May-15

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

Function added and improved points

Design improvements to the PC version
Upgraded to a simple and easy-to-navigate design, reducing wasted space on the screen
February 28, 2014 by 35.8%.
The number of clicks required when entering data was reduced by an average of 47%,
achieving improved usability.
Newly installed timeline function
Information input in sales activity reports gets automatically posted on the timeline, whichfacilitates information sharing within the company in the shortest time possible, and it
June 9, 2014
allows supervisors and/or parties concerned to issue instructions on the timeline.
It not only reduces wasteful reporting in meetings, but also contributes to the accelerationof responses to customers.
Excel linkage function
Linked excel to data input in e-Sales Manager, with which time required to prepare forJune 16, 2014
meetings is greatly reduced
Contact management function
Unified the management of customer/ prospective customer contacts, which enables
June 30, 2014users to establish coordinated and efficient strategies on visits.

The company’s strategic direction for new business development is to focus particularly on
developing its main market segment such as small- and middle-sized companies, for which
the company aims to further strengthen partnership with other companies, which has been
intensified since the previous term, and also to actively invest in sales-promotion including
Web advertisement.
Initiatives in e-Sales Manager partnerships
October 2013 Launches sales of e-Sales Manager Remix Cloud via Otsuka Corporation
Partners with ITX, a major player in mobile phone sales, and launches sales of e-SalesManager Remix Cloud and nano via corporate sales department of the company
Partners with Kodak Japan Ltd. and launches sales of e-Sales Manager Rmix CloudMay 2014
optimized for the printing industry at both companies
Forms a business alliance with Benefit One Inc. and commences to provide a new service
July 2014
that simultaneously enables “visualization” and “evaluation” of sales processes.
Forms a business alliance with NeoJapan Inc. and Gexeed Co., Ltd., with which
August 2014
interconnection of groupware and SFA is materialized, and commences cooperative business
Partners with Ring & Link Corporation, which provides Internet support services for real
December 2014 estate companies, aligns e-Sales Manager nano with SFA designed for real-estate, andcommences cooperative business
Partners with Hitachi INS Software Ltd., aligns e-Sales Manager Remix Cloud with their BI
January 2015
tool, and commences cooperative businessFebruary 2014

Although its profit may stagnate as a result of the increased development costs and salespromotion costs, the company gives customer acquisition the greatest priority in this business.
This is because it is projected that installation of SFA software as a tool for sales productivity
improvement will be accelerated hereafter along with the popularization of smart devices inbusiness corporations. The number of domestic companies that have installed SFA is said tobe approximately 20,000. Since there are approx. 3-4 million corporate entities domesticallyout of which 1 million entities are estimated to have a sales division, SFA penetration rate yetremains at a small percentage therefore there is a significant growth potential.

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11

■Future■
Outlook

New large-scale deals and growth in the rounder humanresources business are expectedSoftbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

11-May-15(3) Field marketing businessThis term’s sales figures in field marketing business are expected to greatly increase by 20%
y/y. In addition to expected new large-scale deals for field support, growth in the “rounder”(field merchandiser) human resources business is projected.
The driving forces behind its growth in field support operations are its competitive advantages
such as customers’ cost-effectiveness due to the high quality of the company’s services andits service charges on a per-visit basis*, and its extensive and rapid job performance as a resultof deploying 50,000 casts throughout the nation. It is projected to continue the high growth
for the time being aided by the growing trend toward outsourcing of field support operationsin the market.

Important disclosures*	
Charge on a per-visit basis: Asanddisclaimersfees
appearthe outsourcing
are set on
per-visit,
per-service,
and perat the end of this document.
reporting basis, customers do
not get charged for the time acast spends travelling. In the
FISCOLtd. charging
Analyst model on
conventional
the otherhand, hourly rate is
YuzuruSatoapplied which means that whena cast member is responsible formultiple stores, the customer ischarged for the time required fortravelling between stores.

In addition, there is an increasing demand for competent in-house field support staff withhigh value experience in the context of the growing shortfall in human resources in a numberof industries. Sales figures in the rounder human resources business, which was launched in
March 2013 in order to meet those needs, is expected to account for approx. 15% of the entire
business. Although the profitability is projected to become less than in the past because its
temp services take up the majority between temp services and referral services, it is expected
to contribute to the company’s business expansion.
Moreover, the POB business is smoothly expanding services not only for consumables
manufacturers but also for restaurant chain companies. It launched a service where customers
can browse shoppers’ insight information in comparison with similar products of othercompanies (purchased products, reasons for purchase, stores where purchased, comparative
products, etc.) collected from approx. 120,000 membership base at low cost, and can alsobrowse information on each category - in May 2014 for consumables manufacturers and inJune 2014 for the restaurant industry respectively.
Since the information such as buying motivations and product evaluations can be collected ina short time from actual product buyers, the value of this service as a corporate marketing
tool is expected to grow in the future. It is thought that it will take a few more years before
the business expands to the extent that it has an impact on revenues, though it is expected to
grow into one of the stable revenue streams as it is a stock-type business.

We encourage readers to review our complete legal statement on “Disclaimer” page.
12

伪伪Plan of Shareholder Return
Flexible dividends based on operating results

Softbrain Co., Ltd.
4779 Tokyo Stock ExchangeFirst Section

11-May-15

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

The company sets their basic shareholder return policy as “flexible dividends depending on its
stage of growth and operating results while focusing mainly on enriching retained earnings ratio
in order to strengthen its corporate financial position and to promote business developmentin the future”. The company did not pay divideds in FY 2014 (the year ending December 31,2014) as it judged that neither of its reserves nor profit are yet at the level where dividends
can be paid. Currently no dividend is planned for FY 2015 (the year ending December 31, 2015)
neither, which is because, as was noted above, the company is currently in the investment
phase in such businesses as e-Sales Manager and new businesses, therefore its policy is toactively invest retained earnings in development of these businesses and in sales promotion.
In the future, however, the company will consider reviewing its shareholder return policy inaccordance with the changes in economic environment and its financial condition.
Consolidated Income Statement, FY2011-2015
FY 2011

FY 2012FY 2013

Sales
(y/y)
COGs
(COGs ratio)
SG&A costs(SG&A ratio)
Operating profit(y/y)(Operating profit margin)
Current profit(y/y)(Current profit margin)
Pretax profit(y/y)(Pretax profit margin)
Corporate income tax(Effective tax rate)
Minority interest
Net profit(y/y)(Net profit margin)

3,397
-1.2
1,710
50.4
1,234
36.4
444
7.3
13.1
454
9.5
13.4
447
10.3
13.2
21
4.7
80
346
4.5
10.2

4,237
24.7
2,163
51.0
1,460
34.5
606
36.3
14.3
622
37.0
14.7
614
37.2
14.5
103
16.9
52
458
32.4
10.8

4,416
4.2
2,658
60.2
1,260
28.5
492
-18.7
11.2
492
-20.9
11.2
510
-16.9
11.5
75
14.7
43
391
-14.6
8.9

Average number of shares outstanding (thds)
EPS (¥)DPS (¥)BPS (¥)

29,255
11.83
0.00
51.23

29,255
15.67
0.00
67.11

29,255
13.37
0.00
80.70

(Unit:¥mn, %)FY 2015
FY 2014
forecast
4,934
5,400
11.7
9.4
2,906
58.9
1,442
29.2
568
650
15.4
14.3
11.5
12.0
578
650
17.5
12.3
11.7
12.0
577
650
13.2
12.7
11.7
12.0
242
41.9
82
252
300
-35.4
18.7
5.1
5.6
29,255
8.64
0.00
89.34

29,25510.25
0.0-

Note: T he company conducted a 100-for-1 share split in 2013. Per-share figures for previous fiscal years havebeen revised accordingly.

We encourage readers to review our complete legal statement on “Disclaimer” page.
13

Disclaimer
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This report is based on information that we believe to be reliable, but we do not confirm or
guarantee its accuracy, timeliness,or completeness, or the value of the securities issued bycompanies cited in this report. Regardless of purpose,investors should decide how to use thisreport and take full responsibility for such use. We shall not be liable for any result of its use.
We provide this report solely for the purpose of information, not to induce investment or any
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This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of there port, including suppositions andconclusions, is the result of our analysis. The content of this report is based on information thatwas current at the time the report was produced, but this information and the content of thisreport are subject to change without prior notice.
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FISCO Ltd.