Neural Group Inc. · TSE:4056
Neural — FY2024 Earnings Presentation
39 slides from Neural's earnings presentation, Feb 14, 2025
Slide 1: Financial Results Briefing Material, FY2024
Update the world for a better tomorrow Financial Results Briefing Material, FY2024 December 31, 2024 Neural Group Inc. February 14, 2025 Copyright © Neural Group Inc. All Rights Reserved.
Slide 2: FY2024 full year financial results and strategic highlights
FY2024 ending Dec. (7th term) full year financial results and strategic highlights Achievements and key results • In FY2024, we achieved revenue of 3,564 million JPY (up 12.2%, YoY) and operating profit of 35 million JPY (an improvement of 694 million JPY, YoY). With the completion of our proprietar
Slide 3: Company profile and strength; FY2024 highlights; FY2025 growth themes
• Company profile and strength • FY2024 highlights • FY2025 growth themes Copyright © Neural Group Inc. All Rights Reserved. 2
Slide 4: Introduction to Neural Group Inc.
Introduction to Neural Group Inc. Company Profile Our Mission Update the world for a better tomorrow Company Name : Neural Group Inc. We named our company "Neural Group" to express our desire to Established : January 22, 2018 provide inspiring services that transcend boundaries across a wide range o
Slide 5: AI industry is expected to grow to an overwhelming market size
AI industry is expected to grow to an overwhelming market size. 2024 +235 trillion JPY 2030 281 trillion JPY 45 trillion JPY Global AI market *1 *1 Statista Japan, 2021 Global Artificial Intelligence (AI) Market Size and Forecast to 2030 (May 2024 issue) The market size is estimated at an exchange r
Slide 6: We develop proprietary AI libraries and edge AI technologies
We develop proprietary AI libraries and edge AI technologies. People attribute analysis Edge AI Gender/ age Facial expression, Voice/ emotion Ad delivery Edge AI Edge security estimation emotion analysis analysis optimization Vehicle analysis Generative AI License plate Traffic Analysis Parking occu
Slide 7: AI technology is evolving along with the industry's growth
AI technology is evolving along with the industry’s growth Cloud AI edge AI • High costs and energy • Low cost and energy- consumption efficient • Requires attention to • Enhances privacy privacy protection Copyright © Neural Group Inc. All Rights Reserved. 6
Slide 8: We have the capability to generate illustrations and animations in-house
We have the capability to generate illustrations and animations in-house, enhancing the quality of our services. Photo Generation Manga generation AI-powered web page Illustration generation for advertising Copyright © Neural Group Inc. All Rights Reserved. 7
Slide 9: We provide a variety of our proprietary AI services
We provide a variety of our proprietary AI services. Large-scale LED screen for Edge AI Camera broadcasting advertisements 9.6m 7.2m 約70m2 SaaS-based AI solution for Connected and AI-enabled supporting 1-on-1 meetings signage system for apartments 1-on-1 support services to strengthen bonds Leading
Slide 10: Providing services for smart city development using AI cameras (parking)
Providing services for smart city development using AI cameras. For outdoor flat parking lots, a single camera can capture over 100 parking spaces. Congestion analysis based on line counting at parking lot entrances and exits is also available. 1 Real-time availability management 2 3 Guiding drivers
Slide 11: Providing services for smart city development using AI cameras (license plates)
Providing services for smart city development using AI cameras. AI reads license plates as vehicles pass the detection line. AI recognition to acquire the following info. registry office Device Camera ID class number vehicle passing time Hiragana Vehicle passing direction four-digit nu
Slide 12: DigiPark recognized as an essential service for commercial facilities
DigiPark is Recognized as an essential service for enhancing customer experience in commercial facilities. As the leader in charge of open innovation, I am responsible for identifying on-site needs and introducing appropriate startups to meet those needs. Tokyo Tatemono Co., Ltd. New Business Develo
Slide 13: Outdoor digital signage services powered by AI content generation
Offering outdoor digital signage services across the country, powered by AI content generation and animation technology. Example: BiVi Vision Sendai, a large LED vision system at BiVi Sendai Station East Exit, an urban commercial facility adjacent to JR Sendai Station. Our media reps partners LEDビジョ
Slide 14: Neural Vision recognized by Miyagi Prefectural Police
Neural Vision has received recognition and a letter of appreciation from the Miyagi Prefectural Police for its contributions to the community through large outdoor advertising displays. Copyright © Neural Group Inc. All Rights Reserved. 13
Slide 15: Focus Channel condominium signage media network
We are operating "Focus Channel," a condominium signage media network that connects with over 200,000 affluent individuals. Leading media provider for apartments AI MEDIA PROVIDER Extensive daily impressions from residents. Strategically located in essential daily routes, delivering repeated exp
Slide 16: Proven track record in advertising
Proven Track Record in Advertising – Showcasing a wide range of commercial products, from major corporations to local businesses. AI MEDIA PROVIDER Copyright © Neural Group Inc. All Rights Reserved. 15
Slide 17: Focus Channel highly regarded for precise information delivery
Focus Channel is highly regarded for its precise delivery of information directly to consumers. AI MEDIA PROVIDER Furusato Honpo Co. We recognized the impact of targeting the affluent demographic. Compared to other advertisements, the cost per donation increased significantly. Hankyu Hanshin Departm
Slide 18: 1-on-1 support services in collaboration with Sony
Providing 1-on-1 support services in collaboration with Sony to enhance employee well-being and accelerate their growth. 1-on-1 support services Examples of Customers KizunaNavi uses state-of-the-art AI analysis technology to improve the quality of 1-on-1 meetings. By facilitating effective 1-on-1s,
Slide 19: Challenges in improving communication and work-life balance
As new ways of working become more widespread across society, improving engagement through 1-on-1s is becoming increasingly important. Employee dissatisfaction Changes in employee work ethic. with the workplace. young employees Workplace Dissatisfaction Ranking 1. Greater motivation for personal gro
Slide 20: Recognized as an essential service for strengthening organizational capabilities
Recognized as an essential service for driving the continued strengthening of organizational capabilities Kokuyo Corporation Corporate Planning Division Innovation Center OPEN LAB. group leader Mr. Kohei Shimakura Q: Please tell us about the background of your company's efforts to implement 1-on-1 m
Slide 21: Expanding AI-driven web businesses with ChatGPT
Expanding AI-driven web businesses with ChatGPT. Generative Web powered by ChatGPT Feature 1 Automatic Blog Feature 2 Multilingual Generation Conversion Function 3: Word-of-mouth Feature 4 SEO auto-reply Automation Copyright © Neural Group Inc. All Rights Reserved. 20
Slide 22: AI and services deployed across more than 12,000 locations
Our AI and services have been deployed across more than 12,000 private, public, and government locations. Examples of Installation Locations private Commercial Facilities Logistics Facilities Retail Stores Residentials Office Buildings Parking Lots Soccer Stadiums Sports Facilities Expressways Airpo
Slide 23: Membership in public/private organizations related to AI and smart cities
Membership in public/private organizations related to AI and smart cities Smart City related Ministry of Land, Infrastructure, Transport and Tourism Smart City Public-Private Partnership Platform Kamakura City Smart City Public Private Sector Research Association MaaS Social Implementation Promotion
Slide 24: Collaboration with local governments and private companies
Contributing to the spread and advancement of AI technology through collaboration with local governments and private companies AI Technology G7 Gunma-Takasaki Ministerial Meeting on Digital and Technology Corporate Exhibition for Ministers Appearance at public-private partnership conference for
Slide 25: Capital alliances with major operating companies
Capital alliances with major operating companies have been formed to create business synergies. Sony Corporation Kyodo News Cross Plus Inc. Tie-up April December December Announcement 2023 2023 2023 Details of • Exchange of • Subsidiary Kyodo • Collaboration in the Cooperation personnel, News Digita
Slide 26: Capital and business alliances while expanding floating shareholders
Promoting capital and business alliances with operating companies while ensuring share liquidity by expanding floating shareholders Note: Based on shareholders' register as of December 31, 2024 General shareholders General shareholders floating shares*1 General shareholders floating shares floating
Slide 27: Company profile and strength; FY2024 highlights; FY2025 growth themes
• Company profile and strength • FY2024 highlights • FY2025 growth themes Copyright © Neural Group Inc. All Rights Reserved. 26
Slide 28: Expansion of our service revenue
In FY2024, we successfully established a sustainable and resilient profit- generating business structure. Expansion of our service revenue Established a sustainable and resilient profit- Our mature AI technology meets generating business the needs of a wider range of structure. customers, resulting
Slide 29: Historical revenue performance
Historical revenue performance (JPY Millions) +63% 3,564 3,178 2,878 1,010 762 311 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 (2nd period) (3rd period) (4th period) (5th period) (6th period) (7th period) Copyright © Neural Group Inc. All Rights Reserved. 28
Slide 30: Quarterly revenue
Quarterly revenue (JPY Millions) FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 (2nd period) (3rd period) (4th period) (5th period) (6th period) (7th period) Highest quarterly revenue since establishment. 991 984 995 880 908 819 772 781 734 640 603 514 288 294 251 226 202 163 164 184 126 91 33 62 Q1 Q2 Q
Slide 31: Evolution of business models and quarterly operating profit
Evolution of our business models and quarterly operating profit track record. (JPY Millions) We started our business by We have shifted our business model We achieved profitability developing AI algorithms and to focus on providing our proprietary AI services. in our AI services. licensing them to c
Slide 32: Consolidated financial results for the FY ended December 31, 2024
Consolidated financial results for the FY ended December 31, 2024 FY2023 FY2024 Increase/ Change in (JPY Millions) Actual Actual Decrease Percentage Revenue 3,178 3,564 +386 +12.2% EBITDA -490 187 +677 - Percentage of revenue - 5.2% Operating -658 35 +694 - profit Percentage of revenue - 1.0% Ordina
Slide 33: Achieved all business targets for FY2024
We achieved all of our business targets for the fiscal year ending December 31, 2024. Quote from the “FY23 Financial Results Briefing Materials” FY2024 Key Performance Targets A B C D Return to Quarterly profitability in Net income for Operating operating operating the second profit for the margin o
Slide 34: FY2024 actual results versus forecast
Consolidated financial results for the FY ended December 31, 2024 FY2024 FY2024 Increase/ Change in (JPY Millions) Forecast Actual Decrease Percentage Revenue 3,700 3,564 -135 -3.7 EBITDA 180 187 +7 +4.1% Percentage of revenue 4.9% 5.2% Operating profit 30 35 +5 +18.5% Percentage of revenue 0.8% 1.0
Slide 35: Company profile and strength; FY2024 highlights; FY2025 growth themes
• Company profile and strength • FY2024 highlights • FY2025 growth themes Copyright © Neural Group Inc. All Rights Reserved. 34
Slide 36: Business Plan for FY2025
Business Plan for FY2025 – We aim to increase revenue while achieving full-year net income. (JPY Millions) Revenue Operating profit Net income Key Performance Targets +3.8 +350% Return to profitability 3,700 160 40 3,564 35 2024 2025 2024 2025 -60 2024 2025 Management Enhance our capability Targetin
Slide 37: Consolidated Full-Year Earnings Forecast for the Year Ending December 31, 2025
Consolidated Full-Year Earnings Forecast for the Year Ending December 31, 2025 FY2024 FY2025 Increase/ Change in (JPY Millions) Actual forecast Decrease Percentage Revenue 3,564 3,700 +135 +3.8 EBITDA 187 300 +112 +60.1% Percentage of revenue 5.2% 8.1% Operating profit 35 160 +124 +350.0% Percentage
Slide 38: Update the world for a better tomorrow
Update the world for a better tomorrow Neural Group Inc. We named our company "Neural Group" to express our desire to provide inspiring services that transcend boundaries across a wide range of fields through the development of cutting-edge technologies, including AI. We aim to leverage edge AI tech
Slide 39: Disclaimer
Disclaimer Handling of the material This document contains forward-looking statements. These statements are based solely on the information available at the time the statements were made. Furthermore, such statements are not guarantees of future results and are subject to risks and uncertainties. Ac