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Earnings presentation materials3962CHANGE Holdings,Inc.Information and Communications, Services and Others

Financial Results Presentation for the Second Quarter of the Fiscal Year Ending March 2027

Revenue and EBITDA increased in the first half, but the Company posted an operating loss due to a ¥5.9 billion impairment loss on EG goodwill. The full-year earnings forecast was revised downward to reflect the impact of unauthorized access to Furusato Choice, and the dividend forecast was left undecided.

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¥100 million
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Contents of this document

Earnings presentation materialsSecond quarter of the fiscal year ending March 202712 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥24,892 million+11.8%
Operating profit¥-2,864 million
Net income¥-4,321 million
Operating profit margin-11.5 %
Results for the three months of the current quarterQ2 revenue by segment was presented: Private-sector DX and M&A advisory, ¥2,775 million; cybersecurity, ¥716 million; regional revitalization, ¥11,706 million; and public-sector DX, ¥1,389 million.
Full-year earnings forecast
Revenue
Lower limit¥47,000 million
Limit¥53,000 million
EBITDA
Lower limit¥8,500 million
Limit¥14,000 million
Operating profit
Lower limit¥0 million
Limit¥6,000 million
Profit attributable to owners of the parent
Lower limit¥-2,200 million
Limit¥1,600 million
EPS
Lower limit¥-32.66
Limit¥23.75
Dividend per shareUndecided
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Furusato tax donations are progressing ahead of plan. Field X is also progressing steadily against plan.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • fundbook¥-496 million
  • EG¥254 million
  • CHANGE¥-290 million
  • IDR¥254 million
  • Travel Zip
  • Furusato tax donations¥1,003 million
  • Central government consulting¥1,653 million
  • TCS
  • EG impairment loss¥-5,968 million
  • Operating profit drivers for furusato tax donations¥1,560 million
  • Logistics-related business¥-210 million
  • Shareholder Benefits¥-270 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • Assumed downside and upper limit for Furusato Choice GMV20 %
  • Assumed downside and lower limit for Furusato Choice GMV60 %
New initiatives
  • Making AI development company アウターク a consolidated subsidiary
  • Agreement to make ペンティオ社 a wholly owned subsidiary; acquisition price of ¥2.0 billion
  • Launch of the Cyberattack Response Navi service
  • Transition of EG to AI-enabled BPO and rollout of AI-based monitoring solutions
  • Strengthening Furusato Choice's security measures, monitoring framework and information management framework
Key KPIsA metric the company considers important as a management benchmark.
  • EBITDA¥4,624 million
    Year on year against the same period last year+19.8%
  • Number of newly contracted sales mandates211 cases
    Year on year against the same period last yearHigher than both the year-earlier period and the immediately preceding quarter
  • Municipalities using LoGo Chat1,601 municipalities
    Year on year against the same period last year+9.9%
  • Municipalities using LoGo Form918 municipalities
    Year on year against the same period last year+9.2%
  • Furusato Choice Q2 GMV
    Year on year against the same period last year-3.0%
  • IDR Q2 revenue
    Year on year against the same period last year+28.1%
Segment results
  • NEW-IT Transformation
    Revenue11,648
    Operating profit-5,945
    unit_profit¥ million
  • PublicTech
    Revenue13,363
    Operating profit4,490
    unit_profit¥ million
    profit_yoy_pct48.7
  • Private-sector DX and M&A advisory
    Revenue9,810
  • Cybersecurity
    Revenue1,837
  • Regional revitalization
    Revenue9,236
  • Public-sector DX
    Revenue4,127
Medium-term management plan targets
PlanRevised DJ3 financial targets
Target fiscal yearFiscal year ending March 2030
Revenue¥70,000 million, %, ¥
Operating profit¥18,000 million, %, ¥
Profit for the period attributable to owners of the parent¥11,000 million, %, ¥
ROE¥16.5 million, %, ¥
EPS¥168 million, %, ¥
Dividend per share¥36.7 million, %, ¥
Financial targets
ROE
Actual results15.8 %
Target16.5 %
Market Size / Share
  • Domestic DX market¥92,666 100 million, fiscal 2030 outlook
  • Cybersecurity investment¥9,599 100 million
  • Q2 decline in the furusato tax donation market-40 %
  • Q2 decline in Furusato Choice GMV-3 %
Orders received and order backlog
Order backlog¥13.8 100 million
Number of employees
Front-line sales headcount was 153 at the end of September. The Company is moderating its hiring pace this fiscal year.
Annual Dividend
The full-year dividend forecast is undecided. The medium-term management plan target for the fiscal year ending March 2030 is ¥36.7 per share.
Contents of this document
ItemDetails
Document typeEarnings presentation materials
Fiscal Period CoveredSecond quarter of the fiscal year ending March 2027
Net Sales¥24,892 million (YoY +11.8%)
Operating profit¥-2,864 million
Net income¥-4,321 million
Operating profit margin-11.5 %
Results for the three months of the current quarterQ2 revenue by segment was presented: Private-sector DX and M&A advisory, ¥2,775 million; cybersecurity, ¥716 million; regional revitalization, ¥11,706 million; and public-sector DX, ¥1,389 million.
Full-year earnings forecastRevenue Lower limit ¥47,000 million / Limit ¥53,000 million / EBITDA Lower limit ¥8,500 million / Limit ¥14,000 million / Operating profit Lower limit ¥0 million / Limit ¥6,000 million / Profit attributable to owners of the parent Lower limit ¥-2,200 million / Limit ¥1,600 million / EPS Lower limit ¥-32.66 / Limit ¥23.75 / Dividend per share Undecided
Self-assessment against the planFurusato tax donations are progressing ahead of plan. Field X is also progressing steadily against plan.
Segment resultsSegment NEW-IT Transformation / Revenue ¥11,648 million / yoy_pct ¥-2 million / Operating profit ¥-5,945 million / unit_profit ¥ million, Segment PublicTech / Revenue ¥13,363 million / yoy_pct ¥24.8 million / Operating profit ¥4,490 million / unit_profit ¥ million / profit_yoy_pct ¥48.7 million, Segment Private-sector DX and M&A advisory / Revenue ¥9,810 million / yoy_pct ¥-4.8 million, Segment Cybersecurity / Revenue ¥1,837 million / yoy_pct ¥16.1 million, Segment Regional revitalization / Revenue ¥9,236 million / yoy_pct ¥12.2 million, Segment Public-sector DX / Revenue ¥4,127 million / yoy_pct ¥66.8 million
Breakdown of Factors Affecting the ChangeItem fundbook / Amount ¥-496 million, Item EG / Amount ¥254 million, Item CHANGE / Amount ¥-290 million, Item IDR / Amount ¥254 million, Item Travel Zip / Amount Not disclosed, Item Furusato tax donations / Amount ¥1,003 million, Item Central government consulting / Amount ¥1,653 million, Item TCS / Amount Not disclosed, Item EG impairment loss / Amount ¥-5,968 million, Item Operating profit drivers for furusato tax donations / Amount ¥1,560 million, Item Logistics-related business / Amount ¥-210 million, Item Shareholder Benefits / Amount ¥-270 million
Key KPIsIndicator name EBITDA / Value ¥4,624 million / Year on year against the same period last year ¥19.8 million, Indicator name Number of newly contracted sales mandates / Value 211 cases / Year on year against the same period last year Higher than both the year-earlier period and the immediately preceding quarter, Indicator name Municipalities using LoGo Chat / Value 1,601 municipalities / Year on year against the same period last year 9.9 municipalities, Indicator name Municipalities using LoGo Form / Value 918 municipalities / Year on year against the same period last year 9.2 municipalities, Indicator name Furusato Choice Q2 GMV / Value Not disclosed / Year on year against the same period last year -3 Year-on-year: -3.0%, Indicator name IDR Q2 revenue / Value Not disclosed / Year on year against the same period last year 28.1 Year-on-year: +28.1%
Number of employeesFront-line sales headcount was 153 at the end of September. The Company is moderating its hiring pace this fiscal year.
Assumptions Underlying the Business OutlookItem Assumed downside and upper limit for Furusato Choice GMV / Value 20 %, Item Assumed downside and lower limit for Furusato Choice GMV / Value 60 %
Medium-term management plan targetsPlan Revised DJ3 financial targets / Target fiscal year Fiscal year ending March 2030 / Revenue ¥70,000 million, %, ¥ / Operating profit ¥18,000 million, %, ¥ / Profit for the period attributable to owners of the parent ¥11,000 million, %, ¥ / ROE ¥16.5 million, %, ¥ / EPS ¥168 million, %, ¥ / Dividend per share ¥36.7 million, %, ¥
Financial targetsROE Actual results 15.8 % / Target 16.5 %
Annual DividendThe full-year dividend forecast is undecided. The medium-term management plan target for the fiscal year ending March 2030 is ¥36.7 per share.
Orders received and order backlogOrder backlog ¥13.8 100 million
Market Size / ShareMarket Domestic DX market / Value ¥92,666 100 million, fiscal 2030 outlook, Market Cybersecurity investment / Value ¥9,599 100 million, Market Q2 decline in the furusato tax donation market / Value -40 %, Market Q2 decline in Furusato Choice GMV / Value -3 %
New initiativesMaking AI development company アウターク a consolidated subsidiary, Agreement to make ペンティオ社 a wholly owned subsidiary; acquisition price of ¥2.0 billion, Launch of the Cyberattack Response Navi service, Transition of EG to AI-enabled BPO and rollout of AI-based monitoring solutions, Strengthening Furusato Choice's security measures, monitoring framework and information management framework
Items this document does not state (11)
Ordinary incomeGross Profit MarginSelling, general and administrative expensesProgress against full-year forecastUnit price and quantity metricsNumber of stores and locationsRisk amount incorporated into the outlookPayout ratioAcquisition of treasury sharesCapital expendituresKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

At EG, customers progressed further than expected with AI-driven automation of their operations, while BPO revenue declined due to lower revenue from major customers and other factors. The full-year earnings forecast was revised because the unauthorized access incident is expected to affect operations after services were suspended and subsequently restored.

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Financial Results Presentation for the Second Quarter of the Fiscal Year Ending March 2027 | CHANGE Holdings,Inc. (3962) timely disclosure | Komori