Next Generation Technology Group, Inc. · TSE:319A
Next Generation Technology — Q1 FY2025 Earnings Presentation
55 slides from Next Generation Technology's earnings presentation, May 15, 2025
Slide 1: FY2025 Q1 Financial Results
Next Generation Technology Group FY2025 Q1 Financial Results May15, 2025 1
Slide 2: FY2025 Q1 Financial Results
FY2025 Q1 Financial Results FY2025 New Acquisitions Appendix: Company Overview - Market Environment - Acquisition Targets and Track Record - Value Creation of Acquired Companies - Equity Story - Overview of the Group Companies 2
Slide 3: FY2025 Q1 Financial Highlights
FY2025 Q1 Financial Highlights The progress rate of Adjusted EBITDA in Q1 was 18.4%. This was mainly impacted by the delay of high- margin orders expected to be received in Q1 at Aero Craft Japan. These orders are expected to be received within this fiscal year, and there is no change to the forec
Slide 4: Key Management Indicators/KPIs
Key Management Indicators/KPIs We use Adjusted EBITDA and Adjusted Profit as management indicators Adjusted EBITDA Adjusted Profit • EBITDA with acquisition related costs added back. • The figure excluding the effects of amortization of goodwill, • Acquisition related costs are the fees paid to M&
Slide 5: Calculation of Adjusted EBITDA and Adjusted quarterly Profit
Calculation of Adjusted EBITDA and Adjusted quarterly Profit （millions of yen） 2024/12 Q1 2025/12 Q1 Operating profit 397 290 (+) Amortization of goodwill 18 15 (+) Depreciation and amortization 124 136 EBITDA 539 441 (+) Acquisition related costs 26 - Adjusted EBITDA 565 441 Quarterly Profit attrib
Slide 6: Consolidated Balance Sheets
Consolidated Balance Sheets 1.8 billion yen was raised through the IPO. The funds will be used for M&A standby capital, and are planned to be allocated for new acquisitions As of the end of March 2025, cash and deposits have increased by 1.5 billion yen compared to the end of December, 2024 （mil
Slide 7: Stock Performance and Valuation
Stock Performance and Valuation Since the IPO, the stock price has been rising, and it has been performing steadily even compared to the TOPIX ・EV/EBITDA：18.5x （As of May 14, 2025） ・P/E：34.6x （As of May 14, 2025 ） 7
Slide 8: FY2025 New Acquisitions
FY2025 Q1 Financial Results FY2025 New Acquisitions Appendix: Company Overview - Market Environment - Acquisition Targets and Track Record - Value Creation of Acquired Companies - Equity Story - Overview of the Group Companies 8
Slide 9: Acquisition of Miyasaka Industries and Suntec Industry
Acquisition of Miyasaka Industries and Suntec Industry ■ In April, two companies with stable EBITDA joined our group ■ Adjusted EBITDA for the FY2026, which will fully reflect the new acquisitions, is expected to reach 2.9 billion yen ■ We plan to continue acquiring new companies consecutively ■ Sin
Slide 10: Appendix: Company Overview
FY2025 Q1 Financial Results FY2025 New Acquisitions Appendix: Company Overview - Market Environment - Acquisition Targets and Track Record - Value Creation of Acquired Companies - Equity Story - Overview of the Group Companies 10
Slide 11: Bridging Technology to the Next Generation
Mission Bridging Technology to the Next Generation 11
Slide 12: Business Model - Serial Acquirer
Business Model - Serial Acquirer We are a “Serial Acquirer” that grows through a series of acquisitions at appropriate valuations We will continue to grow by conducting both new acquisitions and value creation efforts, i.e., driving organic growth and using the cash flow generated to further acc
Slide 13: Basic Company Information
Basic Company Information Company Name Next Generation Technology Group Inc. Year of Establishment July 2018 Serial acquisitions of manufacturing companies Business Resale of an acquired company is not expected Number of deals under consideration Cumulative Total: 1,867 (Establishment - March 2025)
Slide 14: A Team Composed of Members with Diverse Backgrounds
A Team Composed of Members with Diverse Backgrounds M&A Value Creation Administration Eiichi Arai CEO Yuichiro Tokuda Koyo Ejiri Head of Administration • B.S., Department of Systems Innovation, Faculty • B.A. in Law, Chuo University and MBA, • B.A. in Economics, The University of Tokyo of Engineerin
Slide 15: Market Environment
FY2025 Q1 Financial Results FY2025 New Acquisitions Appendix: Company Overview - Market Environment - Acquisition Targets and Track Record - Value Creation of Acquired Companies - Equity Story - Overview of the Group Companies 15
Slide 16: Market Environment Surrounding NGTG in Japan
Market Environment Surrounding NGTG in Japan 1 Aging and lack of successors in Japanese manufactures Increasing Needs for Of the 3.36 million SMEs(1) in Japan, 120,000 are profitable manufacturing Business Succession companies(2) Negative perceptions of private equity funds remain 2 Japan's
Slide 17: Increasing Needs for Business Succession - Population Decline in Japan
1) Increasing Needs for Business Succession - Population Decline in Japan Japan's total population is projected to decrease from 127 million in 2000 to under 100 million by 2070 The working-age population (15-64) is expected to decline from 86 million in 2000 to 45 million by 2070 2000 2070 （For
Slide 18: Increasing Needs for Business Succession - Decrease in number of companies
1) Increasing Needs for Business Succession - Decrease in number of companies The number of Japanese companies is expected to decline from over 4 million in 2015 to less than 3 million by 2040 4.03m 2.96m 2015 2040 （Forecast） Source: “Public Policy Review – Future Projections for Number of Busines
Slide 19: Increasing Needs for Business Succession - Closure of profitable companies
1) Increasing Needs for Business Succession - Closure of profitable companies Over half of the medium-sized enterprises(1) that went out of business in 2023 were profitable(2) 56% M&A of Japanese SMEs holds great opportunities and social impact Note： (1) Medium-sized enterprises refers to "small a
Slide 20: Increasing Needs for Business Succession - Market size in Japan
1) Increasing Needs for Business Succession - Market size in Japan SMEs in Japan (1) 3.36 million companies Manufacturing SMEs in Japan 340,000 companies Total Sales 138 trillion yen Our Potential Target Profitable manufacturing SMEs(2) 120,000 companies Note: (1) The number of SMEs is as of 2021, a
Slide 21: Borrower-Favorable Lending Environment
2) Borrower-Favorable Lending Environment While interest rates in the U.S. move up and down significantly in certain cycles, in Japan they have remained at extremely low levels for many years, with limited fluctuations Comparison of 10-Year Treasury Bill Rates in Japan and the U.S. - Over the Past
Slide 22: Acquisition Targets and Track Record
FY2025 Q1 Financial Results FY2025 New Acquisitions Appendix: Company Overview - Market Environment - Acquisition Targets and Track Record - Value Creation of Acquired Companies - Equity Story - Overview of the Group Companies 22
Slide 23: Reasons for Focusing on the Manufacturing Industry
Reasons for Focusing on the Manufacturing Industry – High Margin, Potential for Global Expansion, and Less Competition Existence of High-Margin Potential for Less Competition Businesses Global Expansion A sufficient number of high- Japan’s manufacturing excellence As buyers should understand t
Slide 24: Current Investment Criteria
Current Investment Criteria • Manufacturing industry - Interested in companies with core technologies that support industries, rather than those with cutting-edge innovations - Do not typically consider operational synergies Industry - Fabless companies are also within our target scope • Manufacturi
Slide 25: Completed 12 Acquisitions Since Inception
Completed 12 Acquisitions Since Inception 2018 2019 2020 2021 2022 2023 2024 2025 25
Slide 26: List of Portfolio Companies
List of Portfolio Companies Our portfolio companies are diversified across a wide range of sectors within the manufacturing industry, making our group structure less vulnerable to fluctuations in specific end markets Company Name Business Customer Industry MS Division of Toshima Superconductivity,
Slide 27: Strengths at Each Step of the M&A Process
Strengths at Each Step of the M&A Process Strong network of more than 350 M&A advisors Sourcing Extensive pipeline of 1,867（1） deals since inception, with ~500 deals under review in a year Screening only high-profitability companies Due to our commitment to long-term ownership, the autonomy an
Slide 28: Strong relationships with over 350 advisors
Strong relationships with over 350 advisors Through our network of over 350 advisors, in addition to referrals from our own group network, we continuously develop our M&A pipeline Major sourcing channels (in no particular order) • Japan M&A Center, M&A Capital Partners, Strike, M&A Research Instit
Slide 29: Strengths as a Preferred Buyer
Strengths as a Preferred Buyer By leveraging our strengths, we can structure proprietary deals. Even in competitive situations, sellers often choose us for reasons beyond price The number of serial acquirers in the manufacturing industry is relatively small compared to the market size, primarily
Slide 30: Addressing Diverse Business Succession Needs
Addressing Diverse Business Succession Needs We provide tailored solutions to meet the diverse succession needs of current owners, which is one of the reasons sellers often choose us When to Retire Next CEO Our Plans Track Record • Support the former An employee succeeded to the Former owner/CEO t
Slide 31: Our Strengths in Fundraising
Our Strengths in Fundraising We have leveraged our unique strengths to secure financing from financial institutions on favorable terms Maintain consolidated leverage level and continue new acquisitions with a highly capital-efficient structure Our Strengths appealed to financial institutions Typ
Slide 32: Value Creation of Acquired Companies
FY2025 Q1 Financial Results FY2025 New Acquisitions Appendix: Company Overview - Market Environment - Acquisition Targets and Track Record - Value Creation of Acquired Companies - Equity Story - Overview of the Group Companies 32
Slide 33: NGP: NGTG Growth Program
NGP: NGTG Growth Program The NGP, a structured value creation playbook, is applied to newly acquired company to provide efficient and effective growth support • Our proprietary value-creation playbook that is modeled after Danaher's NGP: NGTG(1) Growth Program Danaher Business System (DBS) • Weekl
Slide 34: Collaboration within Group
Collaboration within Group Many companies experience similar management challenges despite differences in their products and markets. Growth support through group collaboration has proven effective By actively encouraging interaction within the group, we share best practices and provide support
Slide 35: Post-Acquisition Initiatives at Toshima Manufacturing (Implementation of NGP)
Post-Acquisition Initiatives at Toshima Manufacturing (Implementation of NGP) Post-Acquisition Initiatives • NGTG members lived near the company, dedicating their full efforts • Individual interviews with all employees, including those in Thailand Step 1 • Customer visits • Market and competitive re
Slide 36: Examples of NGP execution (1): Website and Production System
Examples of NGP execution (1): Website and Production System Website revamp In-house production system • Toshima's website doesn’t rank high in Google search results for relevant products and technologies • Toshima Manufacturing’s parts division faced • Website visits do not translate into inquiries
Slide 37: Examples of NGP execution (2): IoT-Driven On-site Management System
Examples of NGP execution (2): IoT-Driven On-site Management System Development and installation of IoT systems Data Transfer • They wanted a system that enables automated collection of manufacturing data, including machine operation status, production state, and real-time factory visuals Issues • G
Slide 38: Equity Story
FY2025 Q1 Financial Results FY2025 New Acquisitions Appendix: Company Overview - Market Environment - Acquisition Targets and Track Record - Value Creation of Acquired Companies - Equity Story - Overview of the Group Companies 38
Slide 39: Investment Highlight
Investment Highlight Given the aging population, M&A activity in the manufacturing sector is 1 expected to increase, creating opportunities to acquire high-profitability companies at attractive valuations. Leveraging Japan's low interest rates and excess funds in financial 2 institutions, we secure
Slide 40: NGTG's Positioning among Peers Driving Growth Through M&As
NGTG’s Positioning among Peers Driving Growth Through M&As Pure investment Serial Acquirer Integration Next Generation Technology Group Berkshire SoftBank General GENDA Danaher Nidec Hathaway Group Electric • Investment • Investment • Independence of each • Growth • Introduce firm led by company tha
Slide 41: Serial Acquirer Case Study
Serial Acquirer Case Study North America Europe Japan Japan Yoshimura Food Name Danaher Halma Indutrade Lifco Elevator GENDA HD Service HD HQ US UK Sweden Sweden Japan (Tokyo) Japan (Tokyo) Japan (Tokyo) Establish- 1984 1894 1978 1946 2008 1994 2018 ment # of Group Companies Not disclosed 55 225 257
Slide 42: Illustrative Diagram of Our Future Growth
Illustrative Diagram of Our Future Growth We aim for medium-to long-term growth through both organic value creation of acquired companies and continuous M&A Profit growth through serial Business acquisitions Scale Organic growth of the acquired company 1 Contributions from new acquisitions 2 Organ
Slide 43: Overview of the Group Companies
FY2025 Q1 Financial Results FY2025 New Acquisitions Appendix: Company Overview - Market Environment - Acquisition Targets and Track Record - Value Creation of Acquired Companies - Equity Story - Overview of the Group Companies 43
Slide 44: Portfolio (1): Toshima Manufacturing
Portfolio (1) : Toshima Manufacturing On November 29th, 2019, NGTG acquired shares from Kentaro Kimoto Location 1414 Shimo-nomoto, Higashimatsuyama City, Saitama, Japan 2 business units + 1 Thai subsidiary • Material Systems Business (Chemical materials, mainly sputtering targets) Business • Parts
Slide 45: Portfolio (2): Toyo Mark
Portfolio (2) : Toyo Mark On December 10th, 2020, NGTG acquired shares from Kazuhiko Sasaoka and others Location 5465 Oaza-Nakasu, Suwa City, Nagano, Japan Business Resin printing, resin processing Description Prior to the acquisition: Kazuhiko Sasaoka (former major shareholder, age:65. Post-trans
Slide 46: Portfolio (3): FA Shinka Technology
Portfolio (3) : FA Shinka Technology On February 10th, 2021, NGTG acquired shares from Kaoru Yamaguchi and others Headquarters: 102-7, Iwasaki-cho, Watari, Fukushima City, Fukushima, Japan Location Fukushima Office: 9-11 Houkidamaebakke, Fukushima City, Fukushima , Japan R&D Center: 78-1122 Higuch
Slide 47: Portfolio (4): MSC Manufacturing
Portfolio (4) : MSC Manufacturing On July 30th, 2021, NGTG acquired shares from Kenji Tokukatsu and others Location 2-1076 Yashio City, Saitama, Japan Business Manufacture and sale of sheet and coil material cutting machines (scrap Description cutters, fixed length cutters) -2021/12: Kenji Tokukat
Slide 48: Portfolio (5): Shinohara Manufacturing
Portfolio (5) : Shinohara Manufacturing On September 6th, 2021, NGTG acquired shares from Hiroomi Shinohara and others Location 325-2 Matsuoka, Fuji City, Shizuoka, Japan Business Design and manufacture of processing and winding machines for high- Description performance film, metal foil, paper, e
Slide 49: Portfolio (6): Kyowa Seiko
Portfolio (6) : Kyowa Seiko On July 5th, 2022, NGTG acquired shares from Sadatsugu Kishida and others Location 1-11-12 Himuro-cho, Takatsuki City, Osaka, Japan Business Machining and cutting of parts for various industrial equipment Description -2023/2: Sadatsugu Kishida (Former shareholder, age:7
Slide 50: Portfolio (7): Kimpou Meltech
Portfolio (7) : Kimpou Meltech On April 13th, 2023, NGTG acquired shares from Toshihiro Nozawa and Asako Nozawa Location 2111, 1435-1 Mikkaichiba, Iida City, Nagano, Japan Business Precision sheet metal fabrication, Metal foil processing Description ~2025/4:Toshihiro Nozawa (Former major sharehold
Slide 51: Portfolio (8): Aero Craft Japan
Portfolio (8) : Aero Craft Japan On June 29th, 2023, NGTG acquired shares from Takuma Fukatsu Location 922-16 Kawamukou-cho, Tsuzuki-ku, Yokohama City, Kanagawa, Japan • Designing and manufacturing CFRP (Carbon Fiber Reinforced Business Plastics) product Description • Manufacturing non-ferrous met
Slide 52: Portfolio (9): Amatori
Portfolio (9) : Amatori On August 1st, 2023, NGTG acquired shares from Makoto Shimura 1022-1 Shimojo Nishiwari, Okusa-machi, Nirasaki City, Yamanashi, Location Japan Business Manufacturing components for semiconductor manufacturing equipment Description (machining and cutting) Yu Shimura CEO (Son
Slide 53: Portfolio (10): Tiock
Portfolio (10) : Tiock On January 31st, 2024, NGTG acquired shares from Masaaki Kanazawa and others Location 850-1 Aokijimaotsu, Aokijimamachi, Nagano City, Nagano, Japan Business Manufacturing LED information boards for road/construction work Description Masaaki Kanazawa (Former shareholder/found
Slide 54: Portfolio (11): Miyasaka Industries
Portfolio (11) : Miyasaka Industries On April 1st, 2025, NGTG acquired shares from Yoshimasa Miyasaka and others Location 5568-2 Kanazawa, Chino-shi, Nagano, Japan Business Metal Grinding and Proprietary Products Description Masaru Kamijo CEO （Age 55 / Promoted from Executive Vice President upon a
Slide 55: Portfolio (12): Suntec Industry
Portfolio (12) : Suntec Industry On April 25th, 2025, NGTG acquired shares from Kouichi Inoue Location 2-48 Juichiya, Minato-ku, Nagoya-shi, Aichi, Japan Business Annealing, shot blasting, and metal surface lubrication treatment Description Kouichi Inoue CEO （Founder, age 69 / Continues to serve a
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