BELLSYSTEM24 Holdings, Inc. (6183)
President Ichiro Tsuge
Ichiro Tsuge
Corporate Profile
BELLSYSTEM24 Holdings, Inc.
Code No.
TSE 1st Section
Service business
Ichiro Tsuge
HQ Address
8-11 Harumi 1-chome, Chuo-ku, Tokyo
Stock Information
Share Price Number of shares issued
(excluding treasury shares)
Total market cap ROE (Actual) Trading Unit
¥1,549 73,515,620 shares ¥113,875million 13.4% 100 shares
DPS (Est.) Dividend yield (Est.) EPS (Est.) PER (Est.) BPS (Actual) PBR (Actual)
¥36.00 2.3% ¥84.08 18.4 times ¥590.61 2.6 times
*The share price is the closing price on April 27. The number of shares issued was obtained by subtracting the number of treasury shares from the number of outstanding shares as of the end of the latest quarter. ROE and BPS were the values for the previous term.
Consolidated Earnings Trends (Units:  Million Yen/Yen)
Fiscal Year Sales Revenue Operating Income Income before
Income Taxes
Net Income* EPS DPS
Feb. 2015 (Actual) 112,071 18,833 16,387 9,875 51.42 0.00
Feb. 2016 (Actual) 102,540 8,884 7,875 5,031 71.00 18.00
Feb. 2017 (Actual) 108,916 8,172 7,196 4,304 58.86 36.00
Feb. 2018 (Actual) 115,618 9,319 8,502 5,604 76.39 36.00
Feb. 2019 (Forecast) 124,700 10,300 9,660 6,190 84.08 36.00
*The forecasted values were provided by the company. Net income is profit attributable to owners of the parent. Hereinafter the same apply.
This Bridge Report overviews the business performance for the First Half of term ended February 2019 and describes the earnings forecast for the term ending February 2019, for BELLSYSTEM24 Holdings, Inc.
Key Points
Company Overview
The company, which is the holding company, and its 7 subsidiaries form a corporate group. The main businesses include the Customer Relationship Management (CRM) business in which a focus is given to the outsourcing of contact center operations, technology services, and consulting services. The company's subsidiaries are the following 7 companies: (1) BELLSYSTEM24, Inc., which engages in operation of contact centers and auxiliary tasks, (2) CTC First Contact Corporation (capital contribution ratio: 51%) specializing in IT service desks and Business Process Outsourcing (BPO), (3) BI Medical, Inc., which conducts business of Contract Sales Organization (CSO) and Medical Information Service (MIS), (4) BELL24-Cell Product, Inc. offering the Site Management Organization (SMO) business, (5) POCKE INC., which sells contents, (6) BELL SOLEIL INC., a special subsidiary aimed at raising employment of people with disabilities, and (7) BELLSYSTEM24 - HOASAO (capital contribution ratio: 49%), which engages in the contact center business in Vietnam. ITOCHU Corporation holds 41.01% of the company's voting rights and deems the company as a company accounted for using the equity method (the company has accepted 8 temporarily loaned workers). In ITOCHU Corporation, which is focusing on business in non-resource sectors, especially the Consumer related Sector, the company, which engages in the call center business, plays a role as "the contact point between companies and consumers." Since the capital alliance entered into in October 2014, the company has built a broad range of alliances and successfully expanded the volume of transactions with ITOCHU Corporation (the company makes transactions with ITOCHU Group under the same transaction conditions as other client companies, and will continue to follow the policy). 【Business Description】 The company's business consists of the Customer Relationship Management (CRM) business, which is the segment to be reported, and other businesses, with the CRM business accounting for over 90% of consolidated sales. Other businesses include the Contract Sales Organization (CSO) business and the Medical Information Service (MIS) business of BI Medical, Inc., the Site Management Organization (SMO) business of BELL24-Cell Product, Inc., and sale of contents of POCKE INC. CRM Business The CRM Business is the business field mainly of BELLSYSTEM24, Inc. and CTC First Contact Corporation. In addition to the conventional task of dealing with inbound and outbound calls, which use telephones as a major communication tool, in this business, a multitude of services that take advantage of Information Technology (IT), such as the Internet and social media, are offered to client companies. This is a stock business in which continuing operations make up slightly over 90% of sales, and spot operations, such as election-related tasks, constitute the remaining portion. Furthermore, sales from Softbank Corp. (operations of BB Call, Inc.) account for slightly over 10% of the total sales (continuing operations). The business is composed of the following 4 operations: ① Customer support for client companies (mainly by dealing with inquiries about products and services of client companies) ② Sales support for client companies (mainly by assisting client companies in promoting sales of their products and services) ③ Technical support for client companies (mainly by handling inquiries as to how to operate IT-based products of client companies) ④ BPO tasks (mainly by undertaking creation of websites, and data entry for client companies) Other businesses Other businesses are divided into the CSO business, the MIS business, the SMO business, and other businesses. CSO Business The CSO business is the business domain chiefly of BI Medical, Inc. This business includes multifarious tasks that are required in the stage of sale and marketing of pharmaceuticals, such as promotional activities of drugs. MIS Business This business field is primarily for BI Medical, Inc. The MIS business includes BPO tasks that offer contact center services associated with medicine and health 24 hours a day, 7days a week, through qualified personnel. SMO Business The SMO business is the business domain mainly of BELL24-Cell Product, Inc. This business provides medical service support that, through contracts entered into with medical institutions which are site management organizations, supports fair and smooth clinical trials based on Good Clinical Practice (GCP; the standards that, on the basis of the practice criteria for clinical tests agreed upon internationally, have been specified in the ministerial ordinances and the like by the Ministry of Health, Labour and Welfare (MHLW) so that clinical trials are carried out in a proper manner in Japan with the environments in Japan taken into account). Other businesses Sales and profit of POCKE INC. and BELL SOLEIL INC. are recorded. POCKE INC. sells digital contents for general consumers through mobile phones and computers (for monthly fees) and weather forecast contents for business operators. Meanwhile, the major tasks of BELL SOLEIL INC., as the special subsidiary that aims at promotion of employment of people with disabilities, include general affairs-related operations and consignment business of outsourced clerical work for the corporate group. 【Corporate History】 Exploiting the potential of a secretarial agency business using telephones, the company started a business of 24-hour call center services using call diverters, and night-time and holiday call center services for credit card application in October 1982. Then, it expanded the business by starting to offer call center services for receiving orders through mail order and call center services for receiving reports about car accidents. The company was registered as an over-the-counter registered stock by Japan Securities Dealers Association (JSDA) in December 1994, listed on the Second Section of Tokyo Stock Exchange (TSE) in February 1997, and was assigned to the First Section of TSE in November 1999. In order to develop group strategies based on more agile business judgment, the company was delisted from the First Section of TSE in January 2005. After the delisting, the company carried out corporate restructuring several times, through which the present form of the corporate group was developed. In October 2014, ITOCHU Corporation took a stake in the company (acquired 49.9% of the number of issued stocks). The company changed its name to BELLSYSTEM24 Holdings, Inc. in September 2015, and got listed on the First Section of TSE in November of the same year.
First Half of Fiscal Year February 2019 Earnings Results
Sales and operating income increased 5.1% and 21.8%, respectively, year on year Sales were 60,068 million yen, up 5.1% year on year. Sales from the "former BB Call operations," which are the service for Softbank Corp., were below the estimates and sales from other businesses including the Contract Sales Organization (CSO) business and contents sales declined due to the reaction to strong sales in the previous term. However, the "Existing operations and New operations" of the CRM business, which is the company's core business, grew 8.3% year on year. In the "Existing operations and New operations," the factors for sales increase include synergy with ITOCHU Corporation through strengthening collaboration (sales to ITOCHU Corporation, its group companies and close business partners increased 18% year on year to 5.42 billion yen), contribution from existing continuous projects which started in the previous term, and consolidation effect of CTC First Contact Corporation. Operating income rose 21.8% year on year to 5,345 million yen. Increase in costs due to personnel expenses (factors for declining profit of 350 million yen), investments in human resources and new areas and upfront investments (factors for declining profit of 0.9 billion yen), and others (factors for declining profit of 140 million yen) was offset by sales increase (a factor for increasing profit of 530 million yen) and profitability improvement (a factor for increasing profit of 1,060 million yen). Factors for Improving Profitability Factors for improving profitability include strengthening partnerships with clients, optimizing prices, improving service quality, accumulating detailed improvements and eliminating waste on site, and improving personnel efficiency through efforts to prevent employees from leaving the company. All of these are the result of efforts led by President Tsuge since he took office as President two years ago. The company's business is characterized by long-term stable transactions with excellent major companies. Sales to the top five business partners account for about 30% of the total sales, and sales to the top 20 companies account for about 50% of the total sales. By continuously making efforts to improve customer satisfaction, the company is working on the improvement of an environment that makes it easier for people to accept fair prices that reflect rising labor costs and others. Furthermore, the company is strengthening its human resources while supplementing 8,000 to 9,000 employees who leave the company every term. Reduction in the number of resigning people will lead to reduction in recruitment expenses and training expenses. It will also lead to improvement of service quality and improvement of the site due to developed skills. By business industry, sales from "Transport/communications" (sales composition rate 15%) grew 30.7% year on year. Also, "Broadcasting/publishing/information services," which is the largest sales composition rate (sales composition rate 29%), grew 5.1% year on year and "Finance" (sales composition rate 21%) grew 6.5% year on year. Meanwhile, "Distribution (retail/wholesale)" (sales composition rate 22%) decreased 2.2% year on year. Total assets at the end of the first half were 140,863 million yen, down 1,574 million yen from the end of the previous term. The company made use of abundant cash flow to repay debt and strengthened its financial constitution. The capital-to-asset ratio stood at 32.1% (it was 30.5% at the end of the previous term) and NET DER was 1.49-fold (1.63-fold at the end of the previous term). As a result of the increase in profits and collection of trade receivables, Operating Cash Flow, which was 4,400 million yen in the same period of the previous year, increased to 6,723 million yen, while Investing Cash Flow improved from negative 2,819 million yen to negative 1,464 million yen due to decreases in intangible asset investment as well as M&A related expenses. Free Cash Flow expanded 3.3 times year on year to 5,259 million yen, and the company advanced the repayment of borrowing money.
Progress in Mid-term Management Plan (FY2/18 - FY2/20) and Efforts in the First Half
The Mid-term Management Plan, which will be ending in the term ending February 2020, is underway. It is composed of three growth strategies: "Expand Existing Business," "Expand into New Areas," and "More Advanced Management of Human Resources." The company plans to invest a total of over 10 billion yen in all areas within five years up to the term ending February 2022, which is beyond the term of the Mid-term Management Plan. 【Progress in Mid-term Management Plan (FY2/18 - FY2/20)】 Expand of exiting business In the efforts to expand existing businesses, the company not only tries to strengthen relationships with customers and expand the scale of synergy with ITOCHU, but also pursues a competitive advantage in service quality. In the current first half, sales to ITOCHU Corporation, its group companies and business partners successfully increased to 2,550 million yen (up 17% year on year) in the first quarter, 2,870 million yen (up 19.5% year on year) in the second quarter, and 5,420 million yen in the entire first half (up 18% year on year). Expand in new areas To expand into new areas, the company is working on business structure reform (Advanced CRM Platform), service (Advanced BPO), market (overseas business strengthening), and actualization and expansion of synergy with Toppan Printing Co., Ltd. is the second largest shareholder of the company, following ITOCHU Corporation, and is also a business partner of the company. Its business domains include a business using paper as a medium as well as B2B such as web solution and technology, and data management. Collaboration with the company that has points of contact with consumers and has B2B2C as its business domain enables businesses that seamlessly connect companies and consumers. Since December last year, the company's "Promotion Office" has been working on the construction of internal organization, development of business scheme, and establishment of business foundation such as sales collaboration system with Toppan Printing Co., Ltd. After its completion, the company established the "Toppan Alliance Promotion Office" within the CRM Business Head Office to pursue business synergies in June this year. The alliance business called "Digital customer service" utilizing new technologies such as AI will be launched in the second half. Enhancement of personnel management The company is working on retention of the employees, strengthening recruitment capabilities, and refining on-site personnel management. In the first half of this fiscal year, a feasibility study on the "new personnel system" that would be the base of these efforts was completed. New Personnel System The "new personnel system" will start in the second half, but the company already launched a new system to shift the employment status of about 22,000 workers who have worked continuously for 6 months or longer from fixed term employment to non-fixed term employment last autumn, and it is gradually making a progress. Also, the use of AI-Chat called "AI-Chat for Staff" for the company's employees is expanding. ("AI-Chat for Staff" can respond to inquiries concerning shifts, holidays and working hours, and greet, chat and collect opinions and requests. It boasts 98% correct answer rate.) Establishment of "SUDAchi" and Financing based on the "DBJ Employees' Health Management Rated Loan Program" In order to expand employment, the company established "SUDAchi" through which unskilled personnel is employed and supported. Furthermore, the company received loans based on the "DBJ Employees' Health Management Rated Loan Program" from Development Bank of Japan, with the appreciation of its efforts for health consideration for employees. "SUDAchi" is an education facility for recruiting and educating job seekers who are short in skills such as computer skills and foreign job seekers who wish to work at the company's multilingual call center. It is an effort that focuses on applicants who have not been recruited before because their skills did not satisfy the recruitment criteria. By closely communicating with trainers in charge of education, the participants will gain deep understanding of business contents and corporate culture of the company before they start working (and wages are paid to the employment preparation staff even during the preparation period). In the case of the company that employs 8,000 to 9,000 people every term, about 50% of the people who apply for the company's jobs are interviewed, and about 50% of the applicants who are interviewed are employed. This means that, every term, 8,000 to 9,000 people, namely, the same number of people who are employed, are not able to work at the company, while wishing for employment. By operating "SUDAchi," it becomes possible to broaden the opening of employment on the premise of skill improvement after employment. Approximately 60 people have already started practical work, and the company said that they show a higher retention rate than regular recruits. Furthermore, what is more important than recruitment is retention of employees, which leads to an improvement in personnel efficiency. For this reason, along with the recruitment activities, the company plans to work on "creating a workplace where people can work happily and with peace of mind" for resignation prevention. Incidentally, the high effectiveness of "AI" has been confirmed through detection of the signs of resignation. AI will be used initially for the internal use, and the full utilization of AI in terms of service provision will take place after its technology is further developed. Meanwhile, the "DBJ Employees' Health Management Rated Loan Program" offered by Development Bank of Japan is the world's first financing menu incorporating employee "health management ratings" in screening and selecting companies with good health consideration for employees and setting the terms of financing. The company's various measures concerning "advanced human resource management" in the Mid-Term Management Plan were recognized and the company received the loan. CSR activity As part of CSR, the company concluded a "Collaboration Agreement on Promotion of SDGs and Sustainable Regional Development" with the town of Shimokawa (Shimokawa, Kamikawa sub-prefecture, Hokkaido) and Quon Chocolate (Operated by: La Barca Group, Head office: Toyohashi, Aichi). It will work on the promotion of SDGs via public-private partnership and creation of model examples of sustainable community development with the chocolate manufacturing business by handicapped people using an abolished school in Shimokawa. Specifically, the town of Shimokawa makes use of an abolished school to create a chocolate factory, and the La Barca Group provides the business contents of Quon Chocolate as well as skills and knowledge on employment of persons with disabilities. And the employees of Bell System 24 (people who are employed through the system to employ disabled people) work at the chocolate factory. 【Growth direction】 The company will be expanding business operations using business expansion and sophistication of operations as two wheels on a cart. The company's strengths are its large size, its excellent customers that are positioned as reformers in respective industry, and the on-site capabilities that can meet the needs of these excellent customers (skills and knowledge including recruitment, training, and resignation prevention, and analytical capabilities and past results in the service aspect). By using these strengths, it will expand its existing businesses and expand the sites in Japan and overseas (regarding overseas expansion, the company will develop a strategy while refraining from hasty actions). Furthermore, ITOCHU Corporation, the largest shareholder, and Toppan Printing Co., Ltd., the second largest shareholder, are shareholders and business partners, and have excellent customers. Together with both companies, the company intends to advance the business by utilizing new technologies such as AI and RPA for the contact center operations.
Fiscal Year February 2019 Earnings Estimates
There is no change in the full-year forecast. Sales and operating income are estimated to increase 7.9% and 10.5%, respectively, year on year. Sales revenue is projected to stand at 124.7 billion yen, up 7.9% year on year. The premise is that the sales of the CRM business will increase 8.0% year on year to 117.6 billion yen and the sales of the Others will increase 5.2% year on year to 7.1 billion yen. Within the CRM business, sales of the Spot operations are expected to decrease 7.1% year on year, while sales of the "Existing operations and New operations" will increase 10.6% year on year. Operating income is projected to grow 10.5% year on year to 10.3 billion yen. Factors of the increase include an increase in revenue of 1,420 million yen, improvement in profitability, etc., of 820 million yen, and decrease in temporary expenses, etc., of 140 million yen, while factors for declining profit include increases in personnel expenses of 680 million yen, investments in human resources/new domains and upfront investments of 630 million yen (increase in personnel expenses due to development of services utilizing new technology and transition to a new personnel system and expenses incurred due to enhancement of recruitment and retention activities) and Others of 9 million yen.
In the first half, it seems that the results were slightly better than the estimates. In order to achieve full-year forecasts, there is a need to increase sales in the second half by 10.5% year on year. In the CRM business, there are several projects of the "Existing operations and New Operations" that will be launched from the second half to the next term, and the former BB Call operations, which were weak in the first half, are also on the recovery trend. Therefore, there is little to worry about. On the profit side, even if the increase in personnel expenses, investments in human resources and new areas, and upfront investments are included, the profit forecast seems to be still conservative given the sales forecast. In the coming term ending February 2020, which is the final year of the Mid-Term Management Plan, the company will aim to achieve the numerical targets, and review the quality of the entire company as a culmination of site reforms that the company has been working on. In the past two years, it reviewed, modified, and polished the company in parts, but it will carry out these actions as a company-wide effort. Furthermore, for the years after the next fiscal year, the company will aim at operating next-generation businesses using new technologies and also put more emphasis on CSR than ever. The company will focus on social contribution and CSR through activities such as elimination of working poor, provision of workplace to persons with disabilities, and women's active participation that accounts for 80% of the company's communicators.
<Reference: Regarding Corporate Governance>
◎ Corporate Governance ReportUpdated on June 26, 2017 Basic Views Our company is striving to enhance management efficiency and manage the company that ensures transparency and soundness based on the recognition that in order to maximize corporate value, it is indispensable to establish a good relationship with all stakeholders surrounding the company and the group companies (collectively referred to as the "Group"), including our shareholders, clients, business partners, and employees and gain their trust, and to achieve it, enhancement of corporate governance is one of the important management tasks. <Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)> 【Principle 3-1 Full Disclosure】 (1) The company's objectives (e.g. business principles), management strategies, and business plans. Our company discloses them on our website as well as at the results briefing sessions, in the shareholders' newsletters, at the general shareholders meetings, etc. (2) Basic views and guidelines on corporate governance based on each of the principles of the Code. Our company discloses them on our website as well as in the report on corporate governance, securities report, etc. (3) Policies and procedures for the Board of Directors to determine the remuneration of the senior executives and directors Our company discloses policies and procedures concerning the determination of remuneration etc. of directors including senior executives (executive directors) in the notice of convocation of the ordinary general meeting of shareholders, reports on corporate governance, and securities reports. (4) Board policies and procedures in the appointment of senior executives and nomination of candidates for directors and corporate auditors. As for candidates for senior executives (executive directors), the nominating committee consisting mostly of multiple independent external directors develops the list of candidates regardless of whether they are from within or outside of the company, without having to distinguish gender, age, nationality, etc., from the persons who have extensive experience, high insight and advanced expertise, in accordance with the appointment criteria approved by the Board of Directors and obtains approval on the list of candidates from the Board of Directors (especially, external directors shall be those who meet the criteria for independence defined by the company based on the "independence standard" set by the Tokyo Stock Exchange and those who can utilize their knowledge and experience in their respective fields and independently express their opinions from a professional point of view). Furthermore, at least one of the candidates for corporate auditors shall be a qualified certified public accountant or have knowledge in the field of tax and accounting. The nomination committee develops a list of candidates in accordance with the criteria for the appointment of the corporate auditors approved by the Board of Directors among those who can secure the appropriateness of the audit in the field of tax and accounting which play an important role of the audit. After obtaining the consent of the Board of Corporate Auditors, the committee obtain approval on the list of candidates from the Board of Directors. (5) Explanation with respect to the individual appointment and nomination at the time when the Board of Directors appoints senior executives and nominates candidates for directors and corporate auditors based on (4). Our company discloses the reasons for appointment of candidates for directors and corporate auditors in the notice of convocation of a general shareholders' meeting. 【Principe 5-1 Policy for constructive dialogue with shareholders】 In an effort to contribute to sustainable growth and medium- to long-term improvement of corporate value, our company will have the constructive dialogue with shareholders, in the scope and to the extent reasonable, in accordance with the following policies: (1) Our company appoints a director who will take charge of IR activities, and the director oversees dialogue with shareholders in general. (2) Our company establishes an IR department under the director in charge of IR activities, and the department plays the central role in proper information exchange with the corporate planning department, the accounting and finance department, and other related departments, and inorganic cooperation with these departments. (3) Our company holds a session for briefing financial results at the time of announcing financial results for the second quarter and the full business year, in order to enrich means of dialogue with shareholders. (4) Our company notifies, at any time, the director in charge of IR activities and related departments of opinions obtained from shareholders through dialogue, and shares such opinions with the board of directors as necessary. (5) Our company engages in dialogue with shareholders in accordance with the regulation for prevention of insider trading that stipulates prohibition of acts of conveying information and encouraging transactions, and measures necessary for restricting re-conveyance of insider information.
This report is intended solely for information purposes, and is not intended as a solicitation for investment. The information and opinions contained within this report are made by our company based on data made publicly available, and the information within this report comes from sources that we judge to be reliable. However, we cannot wholly guarantee the accuracy or completeness of the data. This report is not a guarantee of the accuracy, completeness or validity of said information and opinions, nor do we bear any responsibility for the same. All rights pertaining to this report belong to Investment Bridge Co., Ltd., which may change the contents thereof at any time without prior notice. All investment decisions are the responsibility of the individual and should be made only after proper consideration.

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