Slide 1: Earnings Presentation [IFRS]
Designing Delightful Encounters NEXT Co., Ltd. (TSE 1st Section 2120) Earnings Presentation [IFRS] Second Quarter of the Fiscal Year Ending March 31, 2017 (April to September 2016) Disclaimer The opinions and projections, etc. contained herein represent the judgment of NEXT Co., Ltd. at the time thi
Slide 2: Index
Index › Segments and Main Services Page 2 › Consolidated Results for FY2016/Q2 Page 3 › FY2016 Forecasts Page 11 › Business Strategies Page 12 › Appendix. Page 56 - Corporate Info Page 57 - Statements of Profit and Loss (quarterly) Page 58 - Market Data Page 59 - Subsidiaries and Services Page 68 ›
Slide 3: Segments and Main Services
Segments and Main Services Segments Main Services (subsidiary providing each service) Domestic Real Estate HOME’S Information Services HOME’S Kaigo (nursing care) (Lifull Senior) Domestic Services for AD MASTER (former Renter’s Net) (Renter’s) Realtors NabiSTAR Lifull Marketing Partners Co., Ltd. Ov
Slide 4: Consolidated Results for FY2016/Q2
Consolidated Results for FY2016/Q2 Copyright(c) NEXT Co., Ltd. All Rights Reserved. 3
Slide 5: Condensed Statements of Profit and Loss
Condensed Statements of Profit and Loss IFRS * Significant growth in revenue by 15.6%, EBITDA by 28.5% and net profit by 35.8% YoY. FY2015/Q2 FY2016/Q2 Unit: JPY mil Change Change Main items (Apr.-Sep.) (Apr.-Sep.) Domestic Real Estate Information Services and Domestic Revenue 11,899 13,757 +1,857 +
Slide 6: Expense-to-Sales Ratio
Expanse-to-Sales Ratio IFRS Cost of sales and other SG&A-to-sales ratio increased due to consolidation of Lifull MP, which was in line with our expectation. 25.4% +1.8p 27.2% +2.5p 29.7% Cost of sales and other SG&A -1.9p -4.7p Advertising expenses 31.5% 29.6% 24.9% +0.1p 24.0% Personnel expenses 25
Slide 7: Sales by Segment
Sales by Segment IFRS Domestic Services and Others made a steady growth. Overseas revenue decreased mainly due to foreign currency exchange rate. FY2015/Q2 FY2016/Q2 Change Unit: JPY mil Change Main items (Apr.-Sep.) (Apr.-Sep.) % Revenue 11,899 13,757 +1,857 +15.6% Domestic Real Estate 8,478 9,701
Slide 8: Segment Profit and Loss
Segment Profit and Loss IFRS Domestic Real Estate Information Services, the core business, achieved a significant growth. FY2015/Q2 FY2016/Q2 Change Unit: JPY mil Change Main items (Apr.-Sep.) (Apr.-Sep.) % Segment profit and loss 1,915 2,551 +636 +33.2% Mainly due to sales effort, cost reduction, a
Slide 9: Condensed Statements of Profit and Loss (quarterly)
(ref.) Condensed Statements of Profit and Loss (quarterly) Significant growth in EBITDA by 51.5% and net profit* by 70.7%. FY2015/Q2 FY2016/Q2 Change FY2015/Q2 FY2016/Q2 Change Unit: JPY mil (Jul.-Sep.) (Jul.-Sep.) Change Unit JPY mil (Jul.-Sep.) (Jul.-Sep.) Change % % Revenue 6,441 6,910 +468 +7.3%
Slide 10: Condensed Statements of Financial Position and Goodwill
Condensed Statements of Financial Position and Goodwill IFRS Decrease in assets due to change in foreign currency exchange rate. As of As of Unit: JPY mil Change Main items Mar 31, 2016 Sep. 30, 2016 Decrease in cash and deposits -311 Repayment of short-term borrowings Assets 25,265 23,924 -1,341 De
Slide 11: Condensed Statements of Cash Flows
Condensed Statements of Cash Flows IFRS Cash and cash equivalents increased by JPY 0.5 billion to JPY 6.3 billion (Apr. to Sep.) Main items FY2015/Q2 FY2016/Q2 Unit: JPY mil Change FY2015/Q2 FY2016/Q2 (Apr.-Sep.) (Apr.-Sep.) Items (Apr.-Sep.) (Apr.-Sep.) Income before income taxes 1,880 2,523 Deprec
Slide 12: FY2016 Forecasts and Progress
FY2016 Forecasts and Progress IFRS Statements of Profit and Loss Sales by Segment [Full-year forecast] [Actual] [Full-year forecast] [Actual] Progress Unit: JPY mil Progress Unit: JPY mil FY2016 FY2016/Q2 FY2016 FY2016/Q2 % % (Apr.-Sep.) (Apr.-Sep.) Revenue 31,653 13,757 43.5% Revenue 31,653 13,757
Slide 13: Business Strategies
Business Strategies Copyright(c) NEXT Co., Ltd. All Rights Reserved. 12
Slide 14: 10 years since IPO
10 years since IPO NEXT was listed on the Mothers section of Tokyo Stock Exchange on Oct. 31, 2006 13
Slide 15: Our goal always remains the same
Our goal always remains the same “Create a system in which all real estate information is open and available” 14
Slide 16: Revenue is approx. 10x
Revenue (JPY bn) JPY 25.7bn 25 20 Revenue is 15 approx. 10x 10 5 JPY 2.7bn 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (FY) J-GAAP IFRS 15
Slide 17: Net Profit is approx. 7x
3.0 Net Profit* (JPY bn) JPY 2.6bn 2.5 2.0 Net Profit is 1.5 approx. 7x 1.0 0.5 JPY 0.4bn 0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (FY) *net profit attributable to owners of the parent since 2015 J-GAAP IFRS 16
Slide 18: Market cap is approx. 7x
(JPY bn) 200 Market cap JPY 181.2bn Market cap is approx. 7x at the peak 100 JPY 104.1bn (as of Oct. 31, 2016) JPY 26.7bn 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (CY) 17
Slide 19: Take another step forward
Take another step forward 18
Slide 20: Growth Area and Potential
Growth Area and Potential World’s real estate Growth Area in market size Domestic Business JPY 1,200t Real estate Renovation Existing investment Growth potential home Rental New condo Custom build housing Japan’s real estate Size market size Strengthen the domestic JPY 50t business first before the
Slide 21: Becoming the absolute No.1 in Japan
First priority Becoming the absolute No.1 in Japan 20
Slide 22: Keep strengthening two powers
Becoming the absolute No.1 Keep strengthening two “powers” Strengthen Strengthen media brand power power 21
Slide 23: Media power
Information Coverage Strengthen media Information Visualization power Improvement of Reliability 22
Slide 24: Information Coverage – Number of Properties Listed
Information Coverage – Number of Properties Listed Rentals and 8.03mil (mil) Real Estate Sales (mil) properties Number of Properties Listed by Peers 8.00 19,000 8.00 (rentals and real estate sales) As of Sep. 2016 Steady 17,000 6.00 growth 15,000 6.00 13,000 4.00 11,000 4.00 New Houses and 9,000 Con
Slide 25: Information Coverage – Network of Affiliated Stores
Information Coverage – Network of Affiliated Store The network of affiliated stores is expanding. Target 40,000 40,000stores Record high 21,066 stores 17,096stores 2011/3 2015/9 2016/9 24
Slide 26: Information Visualization – HOME'S PRICE MAP
Information Visualization – Visualize Reference Prices and Rents Rents and reference prices in the metropolitan and Kinki areas are available. HOME’S PRICE MAP The service also became available in Kinki-area in September 2016 HOME’S PRICE MAP www.homes.co.jp/price-map 25
Slide 27: Improvement of Reliability – HOME'S Certification Icon
Improvement of Reliability - HOME’S Certification Icon HOME’S Hospitality Award Send a mystery shopper to assess the hospitality level. Hospitality Award Rental Segment [Tokai Area] the First Prize Hospitality Award Trade and Distribution Segment [East Japan Area] the First Prize HOME’S Certificatio
Slide 28: HOME'S Omni-channel Strategy
Improvement of Reliability - HOME’S Omni-channel Strategy Provide support from various aspects as a concierge to let people find their best home. Online Ask a concierge Phone about home anytime and anywhere Face-to- face counter 27
Slide 29: First Physical Store, HOME'S Counter in Shinjuku
Improvement of Reliability –First Physical Store, “HOME’S Counter” in Shinjuku Free consultation on custom built homes consultation Introduce the customer Neutral advise Customer Professional on home Home builder Hold a free seminar (Sample seminar themes) “Let’s make the first step to build your ow
Slide 30: Brand power
メディア Promotion Strengthen 価値 ReTech Services for Realtors brand power 29
Slide 31: Promotional Strategy
Promotional Strategy Measure the effects independently on a periodic basis Measure the ROI each time (4) Raise the consumer recall rate Continuous branding. (3) Curb the forgetting rate OOH, lapping bus, etc. Effective advertisement allocation (2) Increase the consumer recall rate R PDCA R PDCA TVCM
Slide 32: New Promotional Campaign
New Promotional Campaign HOME’S new commercial “Kickboard” Started to be aired on Oct. 17 Available for viewing by more than 30mil households Transportation Advertisement Other Campaigns Started to place Homes-kun sticker under ad posters on trains distribution Enjoy cross-media effect by Homes-kun
Slide 33: ReTech (Real-estate Technology)
ReTech (Real-estate Technology) Develop multiple services utilizing advanced technologies and provide support to make home hunting more convenient and exciting. Smart Grid Vrick VR property viewing Virtual 3D furniture layout available You can virtually experience model Make a preview reservation on
Slide 34: Video: Grid Vrick
Video Grid Vrick Please watch the video here: http://www.youtu.be/10hm8qOprMg 33
Slide 35: ReTech - HOME'S LIVE Communication System
ReTech - “HOME’S LIVE” Communication System According to a social experiment result conducted by the Construction and Transport Ministry, more than half of the software used for the experiment was HOME’S.* The social experiment will end in a year. Features of “HOME’S LIVE” (1) Compatible with a broa
Slide 36: Services for Realtors – Cost of Real Estate Service Operations
Services for Realtors – Cost of Real Estate Service Operations (JPY) Approx. JPY1.5t Approx. JPY1.5t Marketing (excl. ad) 308.4bn JPY 448.7bn can be reduced Showings, If the services for appointments, realtors and and travel ReTech help to 817.2bn cut 30% of the total cost 1,093.1bn Contracts 154.2b
Slide 37: Services for Realtors – Service List
Services for Realtors – Service List Becoming the absolute No. 1 by providing a wide range of solutions for both users and companies. Being provided Under development/in planning Not undertaken Services Call Center Service Counter HOME’S App Home inspection Smart Viewing New house/ HOME’S Price Map
Slide 38: To be the realtors' best partner
Services for Realtors Rental and Real Estate Trade New Houses CRM for realtors NabiSTAR DMP for realtors Comprehensive support to realtors’ marketing Mitigate realtors’ burden in placing advertisement and activities including attracting customers, analyzing provide support to make sure realtors can
Slide 39: Existing home and renovation markets
The third growth area in Japan Existing home and renovation markets 38
Slide 40: Existing Home Ratio in Developed Countries
Existing Home Ratio in Developed Countries (mil units) 8.0 100.0% 88% 83% 80.0% Existing home market 68% share in Japan is 6.0 only 40% of the 60.0% Western countries Number of existing home traded 4.0 New constructions40.0% 4,940k Existing home 34% market share 20.0% 2.0 0.0% 510k 980k 1,000k 930k
Slide 41: Room for Existing Home Market to Grow in Japan
A Room for Existing Home Market to Grow in Japan If the market share grows to be equivalent to the Western countries, the number of existing home traded 1.19mil will be doubled units 0.51mil units Number of existing home Present Assumption (Source) Estimated by the Company based on existing home sha
Slide 42: Room for Home Renovation Market to Grow in Japan
A Room for Home Renovation Market to Grow in Japan (JPY t) 12 JPY 12.0t Home renovation 10 market is expected to 8 6.9 7.3 keep growing 6.6 6.6 6.2 6.5 6.2 6 5.9 4 2 0 (Source) Yano Research Institute Ltd 2010 2011 2012 2013 2014 2015 2016 0 2020 1 2025 “Survey on home renovation market (2016)” (gov
Slide 43: Japanese Government's Initiatives
Japanese Government’s Initiatives Real estate distribution system reform - Enrich housing information (house performance, repair history, etc.) - Revise building appraisal method The government has - Develop inspection scheme Expand real estate investment market started to consider - Expand real est
Slide 44: NEXT's Initiatives
NEXT’s Initiatives 43
Slide 45: Visualize the Results of Home Inspection – Fair Value
Visualize the Results of Home Inspection Provide the fair price of properties which determined based on the building values. Aim to establish a market where people can trade properties with true satisfaction. ＋ = Building Land evaluation performance evaluation Fair Value 44
Slide 46: Create a real estate trade system with higher satisfaction
Visualize the Results of Home Inspection - Image of HOME’S initiatives Show presence or absence of Real estate inspection record companies Create a real estate trade system with Inspection Evaluation report request higher satisfaction in price NEXT Inspection request Home inspection report External
Slide 47: Utilizing Vacant Properties – Inbound Tourists
Utilizing Vacant Properties – House Sharing (Minpaku) No. of Inbound Tourists (mil people) 60.00 Inbound tourists are expected 40.00 to be tripled 19.74 13.41 10.36 8.35 8.35 8.61 8.36 7.33 6.79 6.73 6.22 6.14 5.21 Source: Created by the Company based on JTA 2003 2004 2005 2006 2007 2008 2009 2010 2
Slide 48: Utilizing Vacant Properties – Hotel Market Size
Utilizing Vacant Properties – House Sharing (Minpaku) Hotel Market Size JPY 3.8t JPY 3.3t Hotel market will keep expanding with increase JPY 2.7t number of inbound JPY 2.6t tourists Source: Created by the Company based on Japan Productivity Center “White Paper on Leisure”. 2014 2015 2020 2030 (forec
Slide 49: Investment-type Cloud Funding
Investment-type Cloud Funding Establish a platform which enables small investments. Use Idle property development Monetization remodeling renovation interior attract customers Accommodation, Café, etc… Return Cloud Funding Lending Investing Investing Return platform Investor Investor 48
Slide 50: Global expansion
The greatest challenge Global expansion 49
Slide 51: Develop a Real-estate Database Around the World
Develop a Real-estate Database Which Enables Seamless Connection Around the World 50
Slide 52: Acquired International Business Division of MARIMO Co., Ltd.
Acquired International Business Division of MARIMO Co., Ltd. NEXT Overseas investors Domestic Realtors Hold real-estate investment events Sep. 2016 International Business Division Acquisition of MARIMO Attract customers by ad Contract A great strategic move to accelerate the global expansion 51
Slide 53: Trovit – 2 Years Since the Acquisition
Trovit –2 Years Since the Acquisition Enhance both the organization and services for further growth. Operating in 46 countries (increase 7 countries in 2 yrs) Employees 117 people (increase 23 people in 2 yrs) Contributed to early launch of Lifull Australia 52
Slide 54: Lifull Australia
Lifull Australia AU No. of Users Increase significantly in one year since the site launch 3x No. of info listed: approx. 240k (No. 3 in Australia) Jul. Aug. Sep. Oct. 2016 53
Slide 55: International Business Area
Business Area Already covered Uncovered Strengthen by acquiring MARIMO’s International Business Agent in Japan Agent in the world Division Japanese customer HOME’S Outbound portal site business International customer Global Inbound platform business Strengthen by utilizing Trovit 54
Slide 56: Designing Delightful Encounters
Designing Delightful Encounters 55
Slide 57: Appendix.
Appendix. Copyright(c) NEXT Co., Ltd. All Rights Reserved. 56
Slide 58: Corporate Info
Corporate Info Company Name NEXT Co., Ltd. (TSE 1st section: 2120) Representative Takashi Inoue, President and CEO March 12, 1997 Established (Fiscal year ending March 31) History October 31, 2006 Listed in Tokyo Stock Exchange, Mother’s Section March 12, 2010 Listed on TSE 1st Section Capital 3,999
Slide 59: Condensed Statements of Profit and Loss (quarterly)
Condensed Statements of Profit and Loss (quarterly) <J-GAAP> < IFRS > Quarterly consolidated statements of income and loss FY2013 FY2014 FY2015 FY2016 Unit : JPY mil 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Revenue 3,398 3,454 3,556 4,281 3,852 3,897 4,318 6,096 5,457 6,441 6,280 7,527 6,846 6,910
Slide 60: External Market Data (Monthly)
External Market Data (Monthly) Number of Apartments for sales Source : Real Estate Economic Institute Co., Ltd. 2013 2014 2015 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 (Jan-Dec) (Jan-Dec) (Jan-Dec) Capital Region 56
Slide 61: HOME'S real estate and housing information site
Domestic Real Estate Information Services HOME’S, a real estate and housing information listing site http://www.homes.co.jp/ “HOME‘S” is the No.1 real estate and housing information listing site in Japan. Besides the quantity of information, HOME’S established screening team to improve information a
Slide 62: Services for Real Estate Industry
Services for Real Estate Industry CRM services for realtors Website creation service “Annex” A business support service provided by NEXT subsidiary Renters for Annex is a "next-generation homepage service" that allows rental property realtors The service provides CRM, batch conversion of even users
Slide 63: Lifull Marketing Partners (former AXELION)
Lifull Marketing Partners (former AXELION) × Online Integration of the sales divisions Website creation advertising planning Sales Access assistance analysis Marketing tool new condo team preparation HOME’s new condominium team will be temporarily transferred to Lifull MP to strengthen the sales div
Slide 64: Lifull Marketing Partners – Strengthened the New Condominium Business
Lifull Marketing Partners (former AXELION) Strengthened the New Condominium Business Seamlessly assists the process from project launch to property handover as a partner Developers Studying Acquiring Choosing Obtaining building Running advertising sites sites agents confirmation NEXT‘ｓ service Liful
Slide 65: Trovit
Trovit One of the world’s largest aggregator sites, Trovit http://www.trovit.co.uk/ • Offers real estate/housing, used car and job ad information. • Entered three countries this year, and now it offers services in 46 countries. Image of aggregation site Portal site A (HOME'S, etc.) Portal site B Por
Slide 66: Trovit Revenue Source
Trovit Revenue Source Four revenue sources (1) Premium ad spaces Charge clients to be ranked high in the search engine (2) Google AdSense Major revenue sources at markets Trovit is available for free (3) Ad Page Create ad page (free service will just transfer customers to partners’ websites) (4) RTB
Slide 67: Countries of Operation
Countries of Operation Available in 46 countries Trovit Model Arab Emirates France Netherlands Spain Argentina Germany New Zealand Sweden Australia Hong Kong Nigeria Switzerland Austria Hungary Pakistan Taiwan Belgium India Peru Thailand Brazil Indonesia Philippines Turkey Canada Ireland Poland UK C
Slide 68: Other Businesses
Other Businesses Insurance agency search and appointment website Furniture / interior EC website “MONEYMO” “HOME’S Style Market” HOME’S Hikkoshi (move) HOME’S Trunk Room (self-storage) Other “Lifull” services 67
Slide 69: List of NEXT Subsidiaries (1)
List of NEXT Subsidiaries (1) （in chronological order with effective dates of establishment) - Planning and sales of “AD MASTER ”, CRM service for realtors - Consultation service Renter’s - Planning and operation of “Lifull Rumah”, a website providing real estate and housing information in Indonesia
Slide 70: List of NEXT Subsidiaries (2)
List of NEXT Subsidiaries (2) （in chronological order with effective dates of establishment) - Operation of “Lifull LiveMatch”, a website to search for an Lifull LiveMatch accompany to enjoy music live, festival or concert together - Internet and marketing businesses for realtors and property-relate
Slide 71: List of NEXT Subsidiaries (3)
List of NEXT Subsidiaries (3) （in chronological order with effective dates of establishment) Lifull Bizas - Admin and other back office operation outsourcee - Call center operation outsourcee Total 12 subsidiaries 70
Slide 72: IR Information
IR Information IR Official account on Twitter Official Facebook page https://twitter.com/Next_2120_IR http://www.facebook.com/next.group.jp Contact us Guide to IR News NEXT Co., Ltd. IR Support Desk We provide monthly performance data and timely disclosure data Tel: +81-3-5783-3603 (Monday to Friday