Hennge K.k. · TSE:4475
Hennge K.k — Q1 FY09/2024 Earnings Presentation
64 slides from Hennge K.k's earnings presentation, Feb 9, 2024
Slide 1: Q1 FY09/2024 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. Q1 FY09/2024 Consolidated Financial Results HENNGE K.K. (
Slide 2: Table of Contents
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Table of Contents 1. Q1 FY09/2024 Consolidated Financial Results 2. Progress of Q1 FY09/2024 Forecasts 3. Growth Strategy 4. Appendix Corporate Overview Total Addressable Market Others 5. Past Materials 2
Slide 3: Q1 FY09/2024 Consolidated Financial Results (Financial Results)
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Q1 FY09/2024 Consolidated Financial Results (Financial Results) 3
Slide 4: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 3 months accumulated comparison) (unit: JPY million) 1. The net sales rose by 23.8% YoY to JPY 1.92B. The sales of HENNGE One rose by 24.1% YoY to JPY 1.78B. 2. The total SG&A increase
Slide 5: Quarterly Trend of Net Sales
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Quarterly Trend of Net Sales ■ Professional service and others ■ HENNGE One (unit: JPY million) FY21 FY22 FY23 FY24 5
Slide 6: Net Sales
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Net Sales (YoY, 3 months accumulated comparison) The net sales increased by 23.8% YoY to JPY 1.92B. The sales of HENNGE One, our key driver of the growth, grew by 24.1%. Total ■ Professional service and others ■ HENNGE One YoY +23.8%
Slide 7: Quarterly Trend of Gross Profit
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Quarterly Trend of Gross Profit ● Gross profit margin ■ Gross profit (unit: JPY million) FY21 FY22 FY23 FY24 7
Slide 8: Gross Profit
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Gross Profit (YoY, 3 months accumulated comparison) The gross profit increased by JPY 0.33B YoY to JPY 1.61B. The gross profit margin increased by 1.6pt YoY to 84.0%, and remains high. ● Gross profit margin ■ Gross profit Gross profit (uni
Slide 9: SG&A
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Structure of Operating Expenses (YoY, 3 months accumulated comparison) SG&A to sales SG&A to sales ratio 63.9% ratio 76.3% SG&A to sales ratio (YoY) Other SG&A increased due to additional (unit: JPY million) Other SG&A 18.6% (-1.0pt)
Slide 10: SG&A
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results 営業費⽤の構造 Structure of Operating (対前四半期⽐) Expenses (QoQ comparison of Q4 FY09/2023 & Q1 FY09/2024) (unit: JPY million) QoQ Other SG&A decreased mainly in recruitment Other SG&A - JPY 71M related expenses. Although the volume of activit
Slide 11: Quarterly Trend of Net Sales and Operating Expenses
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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) FY21 FY22 FY23 FY2
Slide 12: Breakdown of Employees by Function
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Breakdown of Employees by Function 287 (Excluding part-time employees, as of 2023-12-31) 12
Slide 13: Number of Employees
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Number of Employees A net increase of 4 employees compared to the end of the previous fiscal year. In order to achieve the initial plan, we will enhance our talent acquisition capability and build a more solid structure. ■ Others ■ Pr
Slide 14: Q1 FY09/2024 Consolidated Financial Results (Business Activities)
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Q1 FY09/2024 Consolidated Financial Results (Business Activities) 14
Slide 15: Business Highlights
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Business Highlights ● Advertisements and events ○ Hosting “HENNGE One Partner Meeting 2023” in Nagoya and Fukuoka (November and December 2023) ○ Hosting, exhibiting, sponsoring and participating in various events such as joint events
Slide 16: Advertising Activities in Q1 FY2024
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Advertising Activities in Q1 FY2024 In Q1, a number of events were held, such as to strengthen relationships with resellers, joint events with resellers for customer acquisition, and for raising awareness of HENNGE. We feel that the
Slide 17: Q1 FY09/2024 Consolidated Financial Results (KPI Results)
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Q1 FY09/2024 Consolidated Financial Results (KPI Results) 17
Slide 18: One KPI Highlights
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE One KPI Highlights (Progress in 3 months, compared to the end of FY09/2023) # of contracted companies (N) # of contracted users ARR 2,678 companies 2.40M users JPY 7.11B increased by 68 companies increased by 18K users increas
Slide 19: One KPI
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of Q1 FY09/2023) # of contracted companies # of contracted users ARR YoY +15.9% YoY +2.5% YoY +23.0% (unit: companies) (unit: users) (unit: JPY million) +368 +58K + JPY companies users 1.33B 1
Slide 20: One Gross Revenue Churn Rate
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE One Gross Revenue Churn Rate No major change in the trend of the reason for cancellations, such as, reconsideration of IT system or cloud migration plan due to corporate mergers, etc. Stable and sustainable growth model with a
Slide 21: One Contracted Companies & Users
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE One Contracted Companies & Users Mid to small contracts were acquired stably, resulting in a steady increase in the number of contracted companies. QoQ +18K users ● HENNGE One Contracted Users (K users) ■ HENNGE One Contracted
Slide 22: One ARR & ARPU
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE One ARR & ARPU ARPU increased due to steady progress in new customer acquisition. ARR increased steadily. QoQ + JPY 53 per user ● HENNGE One ARPU (JPY per user) ■ HENNGE One ARR (JPY million) QoQ + JPY 0.18B FY21 FY22 FY23 FY2
Slide 23: Progress of FY09/2024 Full-year Forecasts
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Progress of FY09/2024 Full-year Forecasts 23
Slide 24: Our Policy of FY2024
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Our Policy of FY2024 To accelerate mid-term growth in HENNGE One ARR, continuously developing new features and services, providing them to customers, and building a more solid organization by enhancing our talent acquisition capabili
Slide 25: Overview of FY2024 Forecasts
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Overview of FY2024 Forecasts (unit: JPY million) 1. The sales of HENNGE One, our key driver of growth, is expected to grow by 24.2% YoY. The sales of Professional service and others is expected to grow by 5.8% YoY. 2. The net sales i
Slide 26: FY2024 Forecasts of Sales by Business
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results FY2024 Forecasts of Sales by Business The progress rate of HENNGE One’s sales was at 22.9% against the full-year forecast. Professional service HENNGE One and others (unit: JPY million) (unit: JPY million) ■ Actual ■ Forecast 26
Slide 27: FY2024 Forecasts of Operating Expenses
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results FY2024 Forecasts of Operating Expenses The progress rate of advertising expenses was at 13.9% against the full-year forecast. The progress rate of operating expenses excl. advertising expenses was at 21.5% against the full-year forec
Slide 28: Growth Strategy
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Growth Strategy 28
Slide 29: Corporate Philosophy
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Corporate Philosophy 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 29
Slide 30: Maximize LTV
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 31: Maximize ARR
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 32: Progress of Our Growth Strategy (HENNGE One)
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Progress of Our Growth Strategy (HENNGE One) Aim to accelerate ARR growth by focusing on increasing N and ARPU. 32
Slide 33: HENNGE One Family, Supporting Customers' Change
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 34: Growth Strategy on and After FY2024
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Growth Strategy on and After FY2024 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 and raising ARPU (unit: JPY million) 34
Slide 35: HENNGE
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Slide 36: Appendix (Corporate Overview)
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Appendix (Corporate Overview) 36
Slide 37: Corporate Profile
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 38: Locations
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Locations Japan Taiwan Nagoya branch office 2016/8 Tokyo Head office Osaka branch office 2015/6 Fukuoka branch office 2018/8 38
Slide 39: Corporate Philosophy
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Corporate Philosophy 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 39
Slide 40: History
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 41: Sales Structure by Business
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Sales Structure by Business 92.8% of the net sales comes from HENNGE One business. JPY 1.92B ● HENNGE One ● Professional service and others (as of Q1 FY2024) 41
Slide 42: HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE One Provide services that remove obstacles for companies trying to improve productivity by adopting cloud in one-stop. Enhance security and usability of cloud to all the employees by having company-wide implementation. IdP Fea
Slide 43: HENNGE One - IdP Features
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE One - IdP Features IDaaS provides cross-sectional secure access and SSO for various cloud services used by companies. Access Control ID Federation Customizable policy Administrator Various cloud services SSO Microsoft User man
Slide 44: HENNGE One Solid Customer Base
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE One Solid Customer Base HENNGE One is used by 2,678 customers in various industries, and has 2.40 million users. Average number of contracted users per contracted company is approximately 896. (as of 2023-12-31) Breakdown by c
Slide 45: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Appendix (Total Addressable Market) 45
Slide 46: Number of Companies by Employee Size in Japan
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 ID managemnet for 653 ■ # of companies by each employee scale 5000 -
Slide 47: Regional Split in the Number of Companies
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 48: Appendix (Others)
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Appendix (Others) 48
Slide 49: Eat unripe fruits, and make mistakes early
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 50: HENNGE WAY
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results HENNGE WAY HENNGE WAY is our code of conduct in order to keep changing with challenges and failures. 01 02 03 Love technology Eat unripe fruits Be a leanaholic テクノロジーを愛し、 挑戦しよう。 好奇⼼あふれる 使おう。 失敗から学ぶために。 学びの中毒者であろう。 04 05 06 Lead yours
Slide 51: Diversity and Inclusion
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 52: Diversity
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 53: Business Investments and New Business Development
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 54: Past Materials
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Past Materials 54
Slide 55: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 56: tadrill
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results 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 training, and establ
Slide 57: Customers Mail Cloud
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Customers Mail Cloud Cloud e-mail delivery service that enables companies to send e-mails reliably and easily. Send notifications with high delivery rate for immediate notifications of purchases/reservations, bulk notifications, etc. Sy
Slide 58: Marketing Activities for HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 59: License Lineup for HENNGE One Announced in 2019/5
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results License Lineup for HENNGE One Announced in 2019/5 (June 2019 - September 2021) * New contracts taken into place after October 2021 will apply new license lineup which was announced in August 2021. 59
Slide 60: Service Lineup for HENNGE One Announced in 2021/8
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Service Lineup for HENNGE One Announced in 2021/8 (October 2021 - March 2024) Service lineups were renewed from October 2021. Approaching varieties of customers with high value-added suite plans, as well as setting up single-function
Slide 61: Renewal of License Lineup for HENNGE One Announced in 2023/8
HENNGE K.K. (4475:TYO) Q1 FY09/2024 Consolidated Financial Results Renewal of License Lineup for HENNGE One Announced in 2023/8 (April 2024 -) The several license lineups for HENNGE One will be revised from April 2024. HENNGE One Basic A set plan that offers the best value when implementing all the @
Slide 62: Glossary
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 63: Disclaimer
HENNGE K.K. (4475:TYO) Q1 FY09/2024 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 64: HENNGE
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