Hennge K.k. · TSE:4475
Hennge K.k — Q3 FY09/2023 Earnings Presentation
66 slides from Hennge K.k's earnings presentation, Aug 10, 2023
Slide 1: Q3 FY09/2023 Consolidated Financial Results
Note: This is a translation of part of the original Japanese version and is provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. Q3 FY09/2023 Consolidated Financial Results HENNGE K.K. (
Slide 2: Table of Contents
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Table of Contents 1. Q3 FY09/2023 Consolidated Financial Results 2. Progress of FY09/2023 Full-year Forecasts 3. Growth Strategy 4. Appendix Corporate Overview Total Addressable Market Others 5. Past Materials 2
Slide 3: Q3 FY09/2023 Consolidated Financial Results (Financial Results)
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Q3 FY09/2023 Consolidated Financial Results (Financial Results) 3
Slide 4: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 9 months accumulated comparison) (unit: JPY million) 1. The net sales rose by 19.1% YoY to JPY 4.94B. The sales of HENNGE One rose by 20.0% YoY to JPY 4.54B. 2. The total SG&A increase
Slide 5: Quarterly Trend of Net Sales
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Quarterly Trend of Net Sales ■ Professional service and others ■ HENNGE One (unit: JPY million) FY20 FY21 FY22 FY23 5
Slide 6: Net Sales
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Net Sales (YoY, 9 months accumulated comparison) Sales for HENNGE One business, our growth driver, shows a steady progress YoY. Total ■ Professional service and others ■ HENNGE One YoY +19.1% (+ JPY 0.79B) (unit: JPY million) Profess
Slide 7: Quarterly Trend of Gross Profit
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Quarterly Trend of Gross Profit ● Gross profit margin ■ Gross profit (unit: JPY million) FY20 FY21 FY22 FY23 7
Slide 8: Gross Profit
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Gross Profit (YoY, 9 months accumulated comparison) While the gross profit margin decreased slightly mainly due to an increase in R&D members and an increase in infrastructure costs for HENNGE One from exchange rate fluctuations, it sti
Slide 9: SG&A Structure of Operating Expenses
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Structure of Operating Expenses (YoY, 9 months accumulated comparison) SG&A to sales ratio 72.1% SG&A to sales ratio SG&A to sales (YoY) ratio 73.2% Other SG&A increased YoY mainly due to enhanced recruitment activities and Other SG&
Slide 10: SG&A Structure of Operating Expenses (QoQ)
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Structure of Operating Expenses (QoQ comparison of Q2 FY09/2023 & Q3 FY09/2023) (unit: JPY million) QoQ Advertising expenses decreased QoQ due to differences in the contents and Other SG&A +21M JPY approaches that have been applied fr
Slide 11: Quarterly Trend of Net Sales and Operating Expenses
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Quarterly Trend of Net Sales and Operating Expenses ● Net Sales ■ Other SG&A ■ Advertising expenses ■ Business consignment and staffing expenses ■ Personnel expenses ■ R&D expenses ■ Cost of Sales (unit: JPY million) FY20 FY21 FY22 FY2
Slide 12: Breakdown of Employees by Function
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Breakdown of Employees by Function 270 (Excluding part-time employees, as of 2023-06-30) 12
Slide 13: Number of Employees
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Number of Employees A net increase of 27 employees compared to the end of the previous fiscal year. We will build a more solid organization by enhancing our talent acquisition capability. ■ Others ■ Professional service ■ Business Dev
Slide 14: Q3 FY09/2023 Consolidated Financial Results (Business Activities)
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Q3 FY09/2023 Consolidated Financial Results (Business Activities) 14
Slide 15: Business Highlights
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Business Highlights ● Advertisements and events ○ Exhibiting and participating in events in Nagoya, Osaka, Okayama and Fukuoka, such as “Nikkei XTECH next 2023” (May and June 2023) ○ Hosting “HENNGE One Partner Meeting 2023” in Tokyo
Slide 16: New Feature HENNGE Secure Download for Box
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results New Feature “HENNGE Secure Download for Box” We launched “HENNGE Secure Download for Box”, a PPAP-free solution in June 2023. With the e-mail misdirection prevention feature of HENNGE One, it enables secure file-sharing process. On Bo
Slide 17: New Feature HENNGE Access Control API
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results New Feature “HENNGE Access Control API” We released APIs for “HENNGE Access Control”, as HENNGE One’s new feature in June 2023. Enables seamless integration with external systems, automating ID-related tasks and retrieving log data.
Slide 18: Q3 FY09/2023 Consolidated Financial Results (KPI Results)
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Q3 FY09/2023 Consolidated Financial Results (KPI Results) 18
Slide 19: HENNGE One KPI Highlights
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One KPI Highlights (Progress in 9 months, compared to the end of FY09/2022) # of user companies (N) # of contracted users ARR 2,492 companies 2.42M users JPY 6.55B increased by 279 companies increased by 96K users increased by
Slide 20: HENNGE One KPI
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of Q3 FY09/2022) # of contracted companies # of contracted users ARR YoY +16.5% YoY +6.0% YoY +21.9% (unit: companies) (unit: users) (unit: JPY million) +353 +0.14M + JPY companies users 1.18B
Slide 21: HENNGE One Gross Revenue Churn Rate
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Gross Revenue Churn Rate From Q1 FY23, besides the conventional reasons for our cancellations, there were some cancellations triggered by the migration to new license lineups. Still, we maintain a stable and sustainable gr
Slide 22: HENNGE One Contracted Companies & Users
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Contracted Companies & Users Relatively small contracts were acquired stably, resulting in a steady increase in the number of contracted companies. QoQ +29K ● HENNGE One Contracted Users (K users) users ■ HENNGE One Contra
Slide 23: HENNGE One ARR & ARPU
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One ARR & ARPU ARPU has risen steadily due to acquiring new customers with the new license lineups and transition of existing customers to the new license lineups. ARR increased significantly. QoQ + JPY 129 per user ● HENNGE On
Slide 24: Progress of FY09/2023 Full-year Forecasts
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Progress of FY09/2023 Full-year Forecasts 24
Slide 25: Our Policy of FY2023
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Our Policy of FY2023 To accelerate mid-term growth in HENNGE One ARR, continuously carrying out active marketing activities and building a more solid organization by enhancing our talent acquisition capability. HENNGE One Business Ac
Slide 26: FY2023 Forecasts of Sales by Business
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results FY2023 Forecasts of Sales by Business The progress rate of HENNGE One’s sales was at 72.9% against the full-year forecast. HENNGE One Professional service and others (unit: JPY million) ■ Actual (unit: JPY million) ■ Forecast 26
Slide 27: FY2023 Forecasts of Operating Expenses
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results FY2023 Forecasts of Operating Expenses The progress rate of advertising expenses was at 67.3% against the full-year forecast. The progress rate of operating expenses excl. advertising expenses was at 71.5% against the full-year forec
Slide 28: Overview of FY2023 Forecasts
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Overview of FY2023 Forecasts (unit: JPY million) As of the Q3 FY23 financial results disclosure date, there is a possibility that each profit may exceed the full-year forecast. Exploration of investment opportunities, which will contri
Slide 29: Growth Strategy
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Growth Strategy 29
Slide 30: Vision
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Vision We want to deliver the power of technology as many people as we can. Liberation of Technology テクノロジーの解放 30
Slide 31: Maximize LTV
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Maximize LTV Our growth strategy is to maximize LTV. Currently, Y and r are already in a high number, therefore our focus is to maximize ARR. LTV = ARR × Y × r Y = [Average contract duration in years] r = [Gross profit rate] ARR = N ×
Slide 32: Maximize ARR
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Maximize ARR ARR ＝ N × n × ARPU maximize N maximize n N = # of contracted companies n = Average # of contracted ● Increase our sales force users per contracted company ● Extend our presence in a wider region Maximize ● Approaching la
Slide 33: Progress of Our Growth Strategy (HENNGE One)
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Progress of Our Growth Strategy (HENNGE One) Aim to accelerate ARR growth by focusing on increasing N in the short term while increasing ARPU in the mid/long term. 33
Slide 34: HENNGE One Family, Supporting Customers' Change
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Family, Supporting Customers’ Change Supporting customers’ SaaS utilization and continuously liberate technology. HENNGE Cloud Protection HENNGE Coming HENNGE Secure Download Soon! Messaging Security Secure Transfer - Beha
Slide 35: Growth Strategy on and After FY2023
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Growth Strategy on and After FY2023 By FY25, having HENNGE One ARR growth at mid-20% in CAGR, we aim to exceed JPY 10B for HENNGE One ARR. Focus on increasing the number of contracted companies (N) and raising ARPU (unit : JPY millio
Slide 36: HENNGE
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Slide 37: Appendix (Corporate Overview)
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Appendix (Corporate Overview) 37
Slide 38: Corporate Profile
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Corporate Profile Company name : HENNGE K.K. Executives : Kazuhiro Ogura Representative Director, President and CEO/CTO Kazuaki Miyamoto Representative Director, Executive Senior Vice President Yoshiki Nagatome Director, Executive Sen
Slide 39: Locations
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Locations Japan Taiwan Nagoya branch office 2016/8 Tokyo Head office Osaka branch office 2015/6 Fukuoka branch office 2018/8 39
Slide 40: Vision
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Vision We want to deliver the power of technology as many people as we can. Liberation of Technology テクノロジーの解放 40
Slide 41: History
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results History Our business domain is ever-changing, but our will remains steadfast. Linux server management eCRM software HENNGE One IoT as a Service Establishment software HDE Customers Care (f.k.a. HDE mail service) HENNGE Workstyle HDE
Slide 42: Sales Structure by Business
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Sales Structure by Business 92.0% of the net sales comes from HENNGE One business. ● HENNGE One ● Professional service and others (as of Q3 FY2023) 42
Slide 43: HENNGE One
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Identity as a Services (IDaaS) Provide centralized authentication to various SaaS-es, with Single Sign On (SSO) technology Access Control ID Federation Customizable policy Administrator Various cloud services SSO Microsoft
Slide 44: HENNGE One
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Support cloud usage with a balanced convenience and security through IdP features, which provide IP restrictions, device certificate, secure browser, and multi-factor authentication, and E-Mail security features, which prov
Slide 45: HENNGE One Solid Customer Base
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Solid Customer Base HENNGE One is used by 2,492 customers in various industries, and has 2.42 million users. Average number of contracted users per contracted company is approximately 971. (as of 2023-06-30) Breakdown by c
Slide 46: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Appendix (Total Addressable Market) 46
Slide 47: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Cloud Adoption Rate in Japan Cloud Adoption Rate in Japan has increased by 4.0pt to 22% from 2021. (Reference: Press release ʻAverage Cloud Computing Adoption Rate in Japan’ in June 2021 by Gartner, Inc. URL of the original release i
Slide 48: Number of Companies by Employee Size in Japan
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Number of Companies by Employee Size in Japan There is a huge potential market because cloud adoption will continue to accelerate. Customers’ demands # of employees 621 ■ # of companies by each employee scale 5000 - ID managemnet for
Slide 49: Regional Split in the number of companies
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Regional Split in the number of companies Japan has number of metro areas other than Tokyo. Our focus is to expand the business not only in Tokyo but also within other metro areas, such as Nagoya, Osaka, Fukuoka, and others. Tokyo Os
Slide 50: Appendix (Others)
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Appendix (Others) 50
Slide 51: Eat unripe fruits, and make mistakes early
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Value Continuously eat unripe fruits and remain as early adopters in order to make “liberation of technology” happen. Through a number of trial and error, we will identify new technology that is useful for our customers, and widely d
Slide 52: HENNGE WAY
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE WAY HENNGE WAY is our code of conduct in order to keep changing with challenges and failures. 52
Slide 53: Diversity and Inclusion
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Diversity and Inclusion Focusing our efforts on the Global Internship Program (GIP) to not only provide career development opportunities for the most talented candidates from all over the world, but also to be the precedent organizati
Slide 54: Diversity
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Diversity Diversity is the key driver to keep challenging and changing. We recognize the differences and respect the differences, which then we can create a basis for an ever-changing organization that value challenges. Encourage diver
Slide 55: Business Investments and New Business Development
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Business Investments and New Business Development We are approaching business fields adjacent to current businesses through both business investment and new business development, along with R&D activities in current businesses. Busine
Slide 56: Past Materials
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Past Materials 56
Slide 57: Three New Features for HENNGE One
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Business Three New Features for HENNGE One (Since October 2021) HENNGE One’s new features providing more secure file transfer, smartphone access security, and E-Mail protection from targeted attacks were launched in October
Slide 58: HENNGE Connect
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Business HENNGE Connect (Since April 2022) “HENNGE Connect” has been launched as a feature of HENNGE IdP Pro and HENNGE One Pro in April 2022. Enables seamless access management in a hybrid environment of on-premise and cl
Slide 59: Renewal of Service Lineup for HENNGE One
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Business Renewal of Service Lineup for HENNGE One (Since October 2021) Service lineups were renewed from October 2021. Approaching varieties of customers with high value-added suite plans, as well as setting up single-func
Slide 60: License lineup for HENNGE One announced in June 2019
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results HENNGE One Business License lineup for HENNGE One announced in June 2019 (From June 2019 to September 2021) ※ New contracts taken into place after October 2021 will apply new license lineup which was announced in August 2021. 60
Slide 61: Marketing Activities for HENNGE One
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Marketing Activities for HENNGE One It requires some time from marketing campaigns to the contribution in expansion of ARR as HENNGE One’s lead time is relatively long. However, the results of the investment in advertising expenses c
Slide 62: New Service tadrill
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results New Service “tadrill” In November 2022, we launched “tadrill”, a self-implementing targeted e-mail attack training service. It enables companies to improve their employees’ security awareness by continuous and practical e-mail traini
Slide 63: SumaMachi
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Professional Service and Others Business SumaMachi (Since August 2020) SumaMachi is a communication service that enables smooth two-way communication with community residents to municipalities nationwide. (Previously named as “CHROMO
Slide 64: Glossary
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Glossary ARR (Annual Recurring Revenue) refers to revenue, normalized on an annual basis, that a company expects to receive from its customers for providing them with products or services of subscription-based model. ARPU (Average Re
Slide 65: Disclaimer
HENNGE K.K. (4475:TYO) Q3 FY09/2023 Consolidated Financial Results Disclaimer This document has been prepared by HENNGE K.K. (the “Company”) solely for information purpose. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation
Slide 66: HENNGE
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