Smaregi, Inc. · TSE:4431
Smaregi — Q3 FY4/2021 Earnings Presentation
50 slides from Smaregi's earnings presentation, March 2021
Slide 1: Results of Operations for the First Nine Months of FY Ending April 2021
Results of Operations for the First Nine Months of the Fiscal Year Ending April 30, 2021 (16th Period) May 1, 2020 – January 31, 2021 Smaregi, Inc. Securities code: 4431
Slide 2: Contents
Contents 2 P3 Impact of COVID-19 P7 1Q-3Q FY4/21 Financial Summary P20 Business Summary P31 Business Plan for FY4/21 P39 Medium-term Plan P44 Appendix
Slide 3: Impact of COVID-19
3 Impact of COVID-19 Second declaration of a state of emergency in Japan (Started on January 8, 2021)
Slide 4: Effect on Number of Transactions and Monthly Fees
Effect on Number of Transactions and Monthly Fees Impact of COVID-19 4 The second state of emergency imposes fewer restrictions on economic activity than the first one did. The number of retail transactions has decreased but monthly cloud service fees did not decline and, in fact, increased. Busines
Slide 5: Effect on Number of Meetings with Prospective Customers
Effect on Number of Meetings with Prospective Customers Impact of COVID-19 5 The number of online meetings for sales activities has remained steady. Unlike during the first state of emergency in 2020, this time the number of sales meetings is slowly increasing with online meetings accounting for mos
Slide 6: Smaregi's Responses to the COVID-19 Crisis
Smaregi’s Responses to the COVID-19 Crisis Impact of COVID-19 6 Activities for employees Shorter core time Use of teleworking A shorter core working time allows people to avoid peak A teleworking framework was established on a trial basis commuting times when going to and leaving work. for safety du
Slide 7: 1Q-3Q FY4/21 Financial Summary
7 1Q-3Q FY4/21 Financial Summary May 1, 2020 – January 31, 2021
Slide 8: 1Q-3Q FY4/21 Financial Highlights
1Q-3Q FY4/21 Financial Highlights 1Q-3Q FY4/21 Financial Summary 8 • Steady growth of subscription sales (monthly fees for cloud services), the key strength of the SaaS business, during the first nine months. Up 18.7% from one year earlier. • Despite the negative effects of COVID-19, sales were ¥2,3
Slide 9: Financial Highlights
Financial Highlights 1Q-3Q FY4/21 Financial Summary 9 Results of operations are in line with the fiscal year forecast despite the prolonged COVID-19 crisis. Sales in the first nine months were 71.2% of the fiscal year plan and operating profit was 87.1%. 1Q-3Q FY4/21 1Q-3Q FY4/20 YoY FY4/21 1Q-3Q FY
Slide 10: Balance Sheet
Balance Sheet 1Q-3Q FY4/21 Financial Summary 10 Current liabilities increased because of more advances received due to strong sales of products for cloud services (increase in advances for maintenance of automatic change machines). The equity ratio remains high at 83.1% after a small decrease caused
Slide 11: Statement of Income
Statement of Income 1Q-3Q FY4/21 Financial Summary 11 The gross profit margin increased because subscription sales (monthly fees for cloud services) are higher than the initial sales (sales of cloud service products). SG&A expenses increased 17.7% from one year earlier because of the Tokyo office re
Slide 12: Changes in Net Sales, Operating Profit and Operating Margin
Changes in Net Sales, Operating Profit 1Q-3Q FY4/21 Financial Summary and Operating Margin 12 Despite the negative effects of COVID-19, subscription sales increased steadily. Although SG&A expenses increased due to the Tokyo office relocation and other reasons, the operating margin improved by 2.1 p
Slide 13: Quarterly Statement of Income
Quarterly Statement of Income 1Q-3Q FY4/21 Financial Summary 13 Third quarter sales and operating profit were higher than one year earlier. Compared with the second quarter, sales increased 9.2% and operating profit increased 18.4%. FY4/20 FY4/21 (Millions of yen) (May 2019 - Apr. 2020) (May 2020 -
Slide 14: Quarterly Changes in Net Sales, Operating Profit and Operating Margin
Quarterly Changes in Net Sales, 1Q-3Q FY4/21 Financial Summary Operating Profit and Operating Margin 14 The 4Q FY4/20 operating margin fell to 5.8% because of business investments but has subsequently recovered rapidly. The third quarter margin was 29.4%, 2.3 pct. points higher than in the second qu
Slide 15: Changes in Sales Composition
Changes in Sales Composition 1Q-3Q FY4/21 Financial Summary 15 Despite the negative effects of COVID-19, subscription sales (monthly fees for cloud services) increased steadily. (Millions of yen) Monthly fees for cloud services Products for cloud services Others 1,250 2 1,000 0 7 3 750 4 0 2 669 4 3
Slide 16: Annual Recurring Revenue (Subscription Sales)
Annual Recurring Revenue (Subscription Sales) 1Q-3Q FY4/21 Financial Summary 16 The number of fee-paying stores is increasing even during the COVID-19 crisis. ARR increased 4.0% from the previous quarter and 12.6% from one year earlier. ARR at end of quarter*2 (Millions of yen) YoY +12.6% ARR 2,000
Slide 17: Analysis of Changes in Operating Profit (YoY)
Analysis of Changes in Operating Profit (YoY) 1Q-3Q FY4/21 Financial Summary 17 (28) 4 0 One-time increase in demand in 1Q-3Q (Millions of yen) Personnel (68) expenses Logistics Advertising cost expenses Rent FY4/20 due to a tax reduction (45) 5 • Increase in fee-based contracts because of POS syste
Slide 18: Quarterly Changes in SG&A Expenses
Quarterly Changes in SG&A Expenses 1Q-3Q FY4/21 Financial Summary 18 Business investments (Smaregi 4, TV commercials, Tokyo office relocation) peaked in 4Q FY4/20 and SG&A expenses have returned to the usual level with a ratio of 34.4%. SG&A expense Others Depreciation Rent Advertising Logistics cos
Slide 19: Growth in Number of Employees
Growth in Number of Employees 1Q-3Q FY4/21 Financial Summary 19 The number of employees decreased slightly from the previous quarter in part because recruiting activities were temporarily suspended in the first half. Plan to resume recruiting activities as the economy starts to recover. The average
Slide 20: Business Summary
20 Business Summary
Slide 21: 3Q FY4/21 Topics
3Q FY4/21 Topics Business Summary 21 Jan. 2021 • Smaregi Ventures (corporate venture capital) starts operations • Updated the restaurant table order function Dec. 2020 • Smaregi App Contest with ¥10 million of prize money • Opened the Smaregi Shinagawa Showroom • A new format for the IR newsletter •
Slide 22: Smaregi 4 Progress
Smaregi 4 Progress Business Summary 22 Sales are starting for many apps in the Smaregi app market. App contest and other events are increasing the number of software development partners. The Smaregi app market makes it easy for developers to produce and sell apps for Smaregi. Many convenient apps f
Slide 23: Smaregi Cumulative Transaction Volume
Smaregi Cumulative Transaction Volume Business Summary 23 Transaction volume is down at many stores because of COVID-19. But the increasing need for avoiding contact with others has reduced cash purchases and raised the percentage of purchases using credit cards and mobile phones. (Billions of yen)
Slide 24: Composition of Plan Categories with Fees
Composition of Plan Categories with Fees Business Summary 24 The number of fee-paying registered stores decreased in 4Q FY4/20 because of COVID-19 but Smaregi continued to sign up new stores even during the prolonged COVID-19 crisis. As a result, the share of these stores increased 0.4 pct. points t
Slide 25: Share of Active Stores (Including Stores Paying No Fee)
Share of Active Stores (Including Stores Paying No Fee) Business Summary 25 Smaregi is using many activities to increase the pct. of active stores with the goal of providing a service stores use every day. The active store ratio increased 0.1 pct. point from the second quarter to 24.9%. 39.5% 31.3%
Slide 26: Composition of Plan Categories with Fees
Composition of Plan Categories with Fees Business Summary 26 Economic activity has restarted even during the state of emergency, with reduced operating hours and other COVID-19 precautions. As more stores reopen, there is growth in fee-paying plans, chiefly Premium and Premium Plus. (No. of stores)
Slide 27: Attrition Rate
Attrition Rate Business Summary 27 The 3Q FY4/21 attrition rate fell to a new all-time low of 0.53%. Measures to improve the customer experience (improved services, better customer success, etc.) has increased the user retention rate. 5% Attrition Attrition Attrition Attrition rate* rate* rate* rate
Slide 28: ARPU/ARPPU
ARPU/ARPPU Business Summary 28 COVID-19 caused a small temporary decline in ARPU/ARPPU, but this figure has recovered and remained steady. The goal is to raise ARPU/ARPPU in conjunction with actual benefits by leveraging a large app market for customer success. ARPU ARPPU ¥8,000 ¥7,410 ¥6,000 ¥4,000
Slide 29: Monthly Fees by Quarter of Start of Services
Monthly Fees by Quarter of Start of Services Business Summary 29 The MRR downturn caused by COVID-19 was small and MRR has returned to the previous growth curve with net increases in the past three quarters. (Millions of yen) In 4Q FY4/20, store closings and plan downgrades due to COVID-19 caused 12
Slide 30: Business Systems for Small and Midsize Companies
Business Systems for Small and Midsize Companies Business Summary 30 Sales of Smaregi TimeCard remained strong despite COVID-19 because of the growth of teleworking, working style reforms and other social trends. Higher sales per customer and the acquisition of new customers are both contributing to
Slide 31: Business Plan for FY4/21
31 Business Plan for FY4/21
Slide 32: Highlights of the FY4/21 Plan
Highlights of the FY4/21 Plan Business Plan for FY4/21 32 • Although caution is still needed about the effects of COVID-19, Japan is slowly moving toward a broad-based resumption of economic activity • Demand for Smaregi products and services remains strong; expect a return to sustained growth • Pla
Slide 33: Highlights of the FY4/21 Plan
Highlights of the FY4/21 Plan Business Plan for FY4/21 33 COVID-19 and social changes have created a business climate completely the opposite of the FY4/20 environment, when a tax reduction fueled a temporary increase in demand for Smaregi products and services. But sales are climbing steadily even
Slide 34: Changes in Net Sales, Operating Profit and Operating Margin (Plan)
Changes in Net Sales, Operating Profit Business Plan for FY4/21 and Operating Margin (Plan) 34 No significant changes in sales and operating profit, but effectively a continuation of growth as in prior years after deducting the contribution of the one-time upturn in FY4/20 due to the tax reduction m
Slide 35: Plan for Quarterly Sales and Sales Composition
Plan for Quarterly Sales and Sales Composition Business Plan for FY4/21 35 The temporary interruption in sales growth caused by COVID-19 has ended. Third quarter sales were already higher than in the fourth quarter of FY4/20 as the slow recovery in sales continues as planned. (Millions of yen) Month
Slide 36: Impact of COVID-19 and Smaregi Responses
Impact of COVID-19 and Smaregi Responses Business Plan for FY4/21 36 COVID-19 has created an opportunity to rethink retail and restaurant operations from the ground up For the retail sector For the restaurant sector Stronger ties with e-commerce Omnichannel services centered on raising efficiency by
Slide 37: Sales Strategy
Sales Strategy Business Plan for FY4/21 37 1 Strengthen the showroom strategy 2 More online sales meetings Increase the online sales share of KPI Increase to 10 locations by 2023 KPI new contracts Open low-cost showrooms mainly in large Upgrade capabilities for online meetings cities by using data a
Slide 38: Launch of Smaregi Ventures
Launch of Smaregi Ventures Business Plan for FY4/21 38 Aiming for business growth by combining M&A deals with start-up investments A stronger Smaregi platform to solve stores’ Investment issues and improve productivity Venture capital investment The Smaregi Ventures, a corporate venture capital firm
Slide 39: Medium-term Plan
39 Medium-term Plan
Slide 40: The Steadily Increasing Use of the Cloud
The Steadily Increasing Use of the Cloud Medium-term Plan 40 The public cloud market, including SaaS, continues to grow. Due to the higher name recognition and reputation for trust following the February 2019 stock listing, there are more large orders and steady growth in orders that are not related
Slide 41: Smaregi 4 Launched in the Summer of 2020
Smaregi 4 - Smaregi 4 Launched in the Summer of 2020 Medium-term Plan 41 Building a platform centered on POS data will enable Smaregi to achieve the full potential of POS data utilization. Expansion/utilization The first platform service that Establish ties with developers to create many utilizes PO
Slide 42: Focusing on Data Utilization and the Digital Transformation
Focusing on Data Utilization and the Digital Transformation Medium-term Plan 42 Our goal is to become Japan’s largest holder of sales (POS) data and use big data analytical research to grow worldwide in the data utilization field. Ticket vending Artificial machines intelligence Use sales data to e-c
Slide 43: Medium-term Management Plan
Medium-term Management Plan Medium-term Plan 43 Celebrating our 10th anniversary. Looking ahead to more growth in the next 10 years! The Smaregi Long-term Vision and Medium-term Management Plan https://corp.smaregi.jp/ir/management/vision2031.php
Slide 44: Appendix
45 Appendix About Smaregi
Slide 45: Business Profile
Business Profile Appendix 46 High-performance cloud-based POS systems Smaregi is a supplier of innovative cloud-based POS systems with capabilities that go far beyond those of conventional POS systems. Smaregi products analyze sales, perform sophisticated inventory management tasks and have many oth
Slide 46: The Smaregi Marketing Strategy
The Smaregi Marketing Strategy Appendix 47 Our goal is a 30% to 40% share of the targeted 770,000 stores Big businesses The POS system market will remain competitive rather than dominated (at least 40 stores) by a single company because a company that monopolizes this market 100,000 stores would hav
Slide 47: Smaregi Services and Support
Smaregi Services and Support Appendix 48 Smaregi provides a complete lineup of services and support for companies in the retail, restaurant and service sectors. Our goal is to help create more pleasant and productive workplaces by using the capabilities of Smaregi to make a broad range of business p
Slide 48: IR Newsletter Smaregi IR LINE
Use these links for the latest IR news and other Smaregi Appendix 49 announcements! IR Newsletter Smaregi IR LINE Your fastest source of IR news! Add friends here!
Slide 49: Business plans, forecasts and other forward-looking statements in this presentation are based on the
Business plans, forecasts and other forward-looking statements in this presentation are based on the reasonable judgments of Smaregi based on information that was currently available. Actual results of operations may be different because these statements include uncertainties involving market condit
Slide 50: Results of Operations for the First Nine Months of the Fiscal Year Ending April 30, 2021
Results of Operations for the First Nine Months of the Fiscal Year Ending April 30, 2021 May 1, 2020 – January 31, 2021 Smaregi, Inc.