Hennge K.k. · TSE:4475
Hennge K.k — Q2 2021 Earnings Presentation
67 slides from Hennge K.k's earnings presentation, May 12, 2021
Slide 1: 2Q FY09/2021 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. 2Q FY09/2021 Consolidated Financial Results May 12, 2021
Slide 2: Table of Contents
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Table of Contents 1. 2Q FY09/2021 Consolidated Financial Results 2. Progress of FY09/2021 Full-year Forecasts 3. Appendix Growth Strategy Corporate Overview Total Addressable Market Others 4. Past Materials 2
Slide 3: 2Q FY09/2021 Consolidated Financial Results (Financial Results)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results 2Q FY09/2021 Consolidated Financial Results (Financial Results) 3
Slide 4: Net Sales
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Net Sales (YoY, 6 months accumulated comparison, compared to 2Q FY09/2020 accumulated) The net sales increased by 17.9% YoY to 2.30 billion yen. The sales of HENNGE One, our key driver of growth, grew by 20.4% YoY. HENNGE One Profess
Slide 5: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 6 months accumulated comparison, compared to 2Q FY09/2020 accumulated) (unit: million yen) 1. The net sales rose by 17.9% YoY to 2.30 billion yen. The sales of HENNGE One rose by 20.4%
Slide 6: Gross Profit
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Gross Profit (YoY, 6 months accumulated comparison, compared to 2Q FY09/2020 accumulated) The gross profit increased by 0.32 billion yen YoY to 1.91 billion yen. The gross profit margin increased by 1.3pt YoY to 83.1%, and remains high.
Slide 7: Profit Attributable to Owners of Parent
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Profit Attributable to Owners of Parent (YoY, 6 months accumulated comparison, compared to 2Q FY09/2020 accumulated) The SG&A to sales ratio increased by 8.8pt YoY to 84.0% due to focusing on advertising expenses in this Q. The profit
Slide 8: SG&A: Structure of Operating Expenses (YoY)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Structure of Operating Expenses (YoY, 6 months accumulated comparison, compared to 2Q FY09/2020 accumulated) SG&A to sales ratio 84.0% (SG&A to sales ratio) (unit: million yen) YoY Of the other SG&A fees, although the (18.5%) SG&A to
Slide 9: SG&A: Structure of Operating Expenses (QoQ)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Structure of Operating Expenses (QoQ compared to 1Q FY09/2021) QoQ (unit: million yen) (unit: million yen) Other SG&A +11 The other SG&A fees increased QoQ due to the increase in recruiting expenses. Advertising expenses increased si
Slide 10: Net Sales and Operating Expenses
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Net Sales and Operating Expenses (unit: million yen) 10
Slide 11: Breakdown of Employees
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Breakdown of Employees 193 employees (Excluding part-time employees, as of 2021-3-31) 11
Slide 12: Number of Employees
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Number of Employees (unit: employee, Excluding part-time employees) 12
Slide 13: Cash Flow Statement
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Cash Flow Statement (YoY, 6 months accumulated comparison, compared to 2Q FY09/2020 accumulated) (unit: million yen) (unit: million yen) CF from operating activities decreased approximately by 473 million yen due to IaaS-related upfr
Slide 14: 2Q FY09/2021 Consolidated Financial Results (Business Activities)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results 2Q FY09/2021 Consolidated Financial Results (Business Activities) 14
Slide 15: Business Highlights
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Business Highlights ● Advertising and events ○ Hosting, sponsoring and participating in online events (Jan to Mar 2021) digital FIT, and so on. ○ Holding the large-scale digital event HENNGE NOW! (Feb 2021) Starting on February 15, m
Slide 16: HENNGE NOW! and its Marketing Campaigns
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE NOW! and its Marketing Campaigns We held the large-scale digital event HENNGE NOW! this quarter. We spent approximately 490 million yen on advertising expenses and aggressively carried out the advertising activities such as TV
Slide 17: Participant Attributes of HENNGE NOW!
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Participant Attributes of HENNGE NOW! As a results of the aggressive advertising activities, we were able to approach to a wide range of companies and partners nationwide who are considering a cloud adoption. We would like to promote
Slide 18: 2Q FY09/2021 Consolidated Financial Results (KPI Results)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results 2Q FY09/2021 Consolidated Financial Results (KPI Results) 18
Slide 19: HENNGE One KPI
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of 2Q FY09/2020) HENNGE One # of HENNGE One HENNGE One ARR contracted companies contracted users YoY +17.1% YoY +9.9% YoY +20.9% (as of 2021-3-31) (as of 2021-3-31) (as of 2021-3-31) (unit: co
Slide 20: HENNGE One KPI Highlights
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One KPI Highlights (compared to the end of the previous fiscal year) 1. Average monthly churn rate over the past 12 months rose by 0.01pts to 0.18% compared to the end of FY2020 and remains low. 2. The number of user companies
Slide 21: HENNGE One Gross Revenue Churn Rate
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One Gross Revenue Churn Rate Average monthly churn rate over the past 12 months for HENNGE One decreased by 0.04pt QoQ to 0.18% and remains low. * Gross Revenue Churn Rate is calculated based on the decrease in contract value
Slide 22: HENNGE One Contracted Companies & Users
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One Contracted Companies & Users +66 K user +61 companies 22
Slide 23: HENNGE One ARR & ARPU
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One ARR & ARPU +41 yen per user +0.22 B yen 23
Slide 24: Progress of FY09/2021 Full-year Forecasts
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Progress of FY09/2021 Full-year Forecasts 24
Slide 25: Our Policy of FY09/2021
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Our Policy of FY09/2021 The main elements of our policy regarding the consolidated financial outlook are as follows; Accelerate medium-term growth in HENNGE One ARR by aggressively investing in marketing and capture growth opportuniti
Slide 26: Overview of FY09/2021 Forecasts
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Overview of FY09/2021 Forecasts Accelerate medium-term growth in ARR from HENNGE One by investing aggressively in marketing and capture growth opportunities in the new normal. (unit: million yen) 1. The sales of HENNGE One, which is
Slide 27: FY09/2021 Forecasts of Sales by Business
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results FY09/2021 Forecasts of Sales by Business The progress rate of HENNGE One’s sales of this Q was at 47.1% towards the full-year forecast. Professional service (unit: million yen) HENNGE One (unit: million yen) and others 27
Slide 28: FY09/2021 Forecasts of Operating Expenses
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results FY09/2021 Forecasts of Operating Expenses The progress rate of the advertising expenses was at 88.1% towards the full-year forecast. Operating expenses (unit: million yen) Advertising expenses (unit: million yen) excl. advertising ex
Slide 29: Appendix (Growth Strategy)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Appendix (Growth Strategy) 29
Slide 30: Maximize LTV
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Maximize LTV LTV = ARR × Y × r Y = [Average contract duration in years] r = [Gross profit rate] ARR = N × n × ARPU N = [# of contracted companies] n = [Average # of contracted users per contracted company] ARPU = [Average Revenue Per
Slide 31: Maximize ARR
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Maximize ARR ARR = N × n × ARPU maximize N maximize n N = # of contracted n = Average # of contracted companies users per contracted company maximize ● Increase our sales force ● Target large companies ● Expand our business within th
Slide 32: Progress of Our Growth Strategy
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Progress of Our Growth Strategy (HENNGE One) With FY2021 as an inflection point, aim to accelerate ARR growth from FY2022 by focusing on increasing # of contracted companies (N) in the short term while increasing ARPU in the mid to lo
Slide 33: Growth Strategy on and After FY09/2021
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Growth Strategy on and After FY09/2021 Create an inflection point in ARR growth by increasing the number of contracted companies (N) and ARPU. ARR Focus on raising ARPU and increasing the number of contracted companies (N) Mainly focu
Slide 34: Growth Strategy on and After FY09/2021
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Growth Strategy on and After FY09/2021 With IDaaS platform HENNGE One as our core business, we grows as SaaS adoption expands. Currently integrates with over 170 Cloud services and more Establish SaaS platform 34
Slide 35: Appendix (Corporate Overview)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Appendix (Corporate Overview) 35
Slide 36: Corporate Profile
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Corporate Profile Company name：HENNGE K.K. Executives: Kazuhiro Ogura Representative Director & Chief Executive Officer Kazuaki Miyamoto Representative Director & Executive Vice President Yoshiki Nagatome Director & Executive Vice Presi
Slide 37: Locations
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Locations Japan Taiwan Nagoya branch office 2016/8 Tokyo Head office Osaka branch office 2015/6 Fukuoka branch office 2018/8 37
Slide 38: Vision
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Vision We want to deliver the power of technology to as many people as we can. Liberation of Technology テクノロジーの解放 38
Slide 39: History
HENNGE K.K. (4475:TYO) 2Q FY09/2021 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 40: Sales Structure by Business
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Sales Structure by Business About 90% of the net sales comes from HENNGE One business. (as of 2Q FY2021) 40
Slide 41: HENNGE One
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One Identity as a Service (IDaaS) Provides centralized authentication to various SaaS-es, with Single-Sign-On (SSO) technology ID federation Access control Customizable policy Administrator Various cloud services Microsoft 365
Slide 42: HENNGE One
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One Provides a balanced work environment of both convenience and security through five key features 1. HENNGE Access Control Unknown device Deny 3. HENNGE Email DLP Local device Delayed sending Content filtering Local IP Allow M
Slide 43: HENNGE One Solid Customer Base
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One Solid Customer Base HENNGE One is used by 1,813 customers in various industries, and has 2.00 million users. (as of 2021-3-31) Breakdown by Contracted Users Size (ARR Basis, FY2020) and more 43
Slide 44: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Appendix (Total Addressable Market) 44
Slide 45: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Cloud Adoption Rate in Japan Cloud adoption rate in Japan is 18%. There is enough market capacity to expand in Japan. (Reference: Press release ‘Latest Survey Finds Average Cloud Computing Adoption Rate of 18% in Japan’ in May 2020 b
Slide 46: HENNGE One Domestic Market Share
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results HENNGE One Domestic Market Share Cloud-type Single Sign-on Service Approx. 13 % of listed Japanese companies are Based on shipments quantity using HENNGE One (in-company investigation, as of 2021-3-31) Top Share Approx. 1,106 average
Slide 47: Growth in # of Contracted Companies (N)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Growth in # of Contracted Companies (N) Lots of potential markets still exist within Japan, so we will first reach out to companies with 300+ employees for acquisition cost-effectiveness. (References: 'Economic Census -Activity Survey
Slide 48: Growth in # of Contracted Companies (N)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Growth in # of Contracted Companies (N) We will focus on increasing our customers not only in Tokyo, but also in Tokai, Kansai, Kyushu area for first-mover advantage. Tokyo Osaka Fukuoka Nagoya 48
Slide 49: Changes in the Market Environment
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Changes in the Market Environment The number of companies using cloud services in Japan is expected to rapidly increase due to the impact of COVID-19. Domestic companies HENNGE Great East Japan Temporary cloud usage Approach early CY
Slide 50: Appendix (Other)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Appendix (Other) 50
Slide 51: Diversity & Inclusion
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Diversity & Inclusion We are 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 organ
Slide 52: Recurring Revenue Ratio
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Recurring Revenue Ratio The recurring revenue ratio increased 0.0pt YoY to 97.4%. We will continue to achieve a strong and stable recurring revenue model. (unit: million yen) 52
Slide 53: Past Materials (New Services, etc.)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Past Materials (New Services, etc.) 53
Slide 54: New Service: HENNGE Workstyle
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results New Service Release of HENNGE Workstyle (Feb 2019) Improve your workstyle through IoT and the Cloud (The service will be discontinued on March 2022.) 54
Slide 55: New Service: Chromo Education
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results New Service Release of Chromo Education (April 2019) Provide fast and reliable communication between local governments and their residents to protect our children. 55
Slide 56: New Plan
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results New Plan New plan of HENNGE One (June 2019) 56
Slide 57: New Plan: HENNGE One for Education
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results New Plan Announcement of HENNGE One for Education (Jun 2020) In response to GIGA School Program advocated by the Japanese Ministry of Education, Culture, Sports, Science and Technology (MEXT), HENNGE One for Education has become avai
Slide 58: New Service: CHROMO
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results New Service Release of CHROMO (Aug 2020) Released CHROMO, a communication service that enables smooth two-way communication with community residents to municipalities nationwide. Municipalities Municipalities (Issues that municipalit
Slide 59: Achieving a Passwordless World
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Achieving a Passwordless World Single-Sign-On (SSO) is a solution that eliminates the burden of managing multiple passwords. However, we will be introducing a next-generation technology that supports a secure, passwordless environmen
Slide 60: Business Investments & New Business Development
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Business Investments & New Business Development Aiming to expand into new business fields adjacent to its existing businesses, our focus is on business investment and new business development, along with R&D activities. One of the com
Slide 61: Past Materials (Our Surveys, etc.)
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Past Materials (Our Surveys, etc.) 61
Slide 62: Our Survey: SaaS usage survey
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Our Survey SaaS usage survey to our clients (Dec 2019) On average, our clients are using 7 cloud services per company, and 24% of them are using 10 cloud services. (# of companies) (# of cloud services) Survey overview: SaaS usage su
Slide 63: Our Survey: SaaS usage and remote work
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Our Survey Correlation between SaaS usage and remote work (Mar 2020) 17.2% of companies are using more than one SaaS, 65% of companies that are already using SaaS have adopted remote work, while only 12.7% of companies that are not u
Slide 64: Our Survey: Remote work and VPN usage
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results Our Survey Correlation between remote work and VPN usage (June 2020) Q. Has your company used VPN in adopting remote Q. Has your company faced any problems with work during and after the state of emergency? VPN during and after the s
Slide 65: VPN Usage
HENNGE K.K. (4475:TYO) 2Q FY09/2021 Consolidated Financial Results VPN Usage VPN is a technology that grants secure access to company data from outside company premises in exceptional cases, to a configuration that was originally designed to only be used within company premises. We believe that the i
Slide 66: Disclaimer
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 of an offer to buy or acquire securities of the Company in Japan, th
Slide 67: HENNGE
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