Nihon M&a Center Holdings Inc. · TSE:2127
Nihon M&a Center — FY2019 Earnings Presentation
46 slides from Nihon M&a Center's earnings presentation, May 15, 2020
Slide 1: Financial Results Report for FY2019
Assisting companies to continue and prosper through M&A IR Report Nihon M&A Center Financial Results Report for FY2019 Year to March 2020 TSE 1st Section ２１２７ The information included in this presentation, such as industry trends and analysis, future plans and forecasts, is based on data available a
Slide 2: Table of contents
Table of contents Our Vision P02 Introduction P27 To Become the Top Global Integrated M&A Company P03 Corporate Profile (End-March 2020) P28 Overview of FY2019 Results P04 Corporate History P29 Original Forecasts Versus Actual Results P05 Business Model A Platform for the M&A Market P30 Income State
Slide 3: Our Vision
Our Vision 「 Aiming to become the top global integrated M&A company 」 Became Japan’s top M&A intermediary company 1991 2001 2011 2021 (year) Aiming to become the Start-up phase Became Japan’s top M&A intermediary company top global integrated M&A company TSE 1st Section listing in 2007 1991 TSE Moth
Slide 4: To Become the Top Global Integrated M&A Company
To Become the Top Global Integrated M&A Company Number of projects Customer satisfaction Number of mandated projects, Optimal matching and post-merger integration number of transactrions closed Quality control Broad coverage Expanding operations from very small Valuation, execution customers to larg
Slide 5: Overview of FY2019 Results
Overview of FY2019 Results Full-year sales and ordinary profit at record highs FY2019 FY2018 Change (yoy) Profitability Sales (¥mn) 32,009 28,463 + 12.5％ Ordinary profit (¥mn) 14,467 12,533 + 15.4％ Total number of employees ５８２ 451 + 29.0％ Growth Transactions closed ８８５ 770 + 14.9％ * Counting sell-s
Slide 6: Original Forecasts Versus Actual Results
Original Forecasts Versus Actual Results Full-year ordinary profit : +15.4% yoy (For 10 consecutive years we exceeded original forecasts) Sales Ordinary profit (¥mn) (¥mn) 14,467 Original forecast 当初予想 Original forecast 当初予想 35,000 32,009 14,000 Actual result 実績 実績 Actual result 12,533 32,400 30,000
Slide 7: Income Statement Key Data
Income Statement Key Data Both sales and profits at record highs Full-year ordinary profit : +15.4% yoy FY2019 FY2019 FY2018 （Full-year Results） YoY （Full-year Forecast） （Full-year Results） (¥mn, %) Total % % Total % Total % Sales 32,009 100.0 +12.5％ 32,400 100.0 28,463 100.0 (of which M&A sales) (3
Slide 8: Sales and Profit by Business Segment
Sales and Profit by Business Segment Breakdown of consolidated sales and gross profit by M&A and other FY 2016 FY 2017 FY 2018 FY 2019 (¥mn) Total % Total % YoY Total % YoY Total % YoY Sales ① 19,069 100.0% 24,625 100.0% 129.1% 28,463 100.0% 115.6% 32,009 100.0% 112.5% Direct costs*1 ② 2,745 14.4% 3
Slide 9: Balance Sheet Key Data
Balance Sheet Key Data Maintaining a healthy balance sheet Assets (¥mn, %) End-March 2020 % Change End-March 2019 I Current assets 25,737 58.1 8,249 17,488 Cash and deposits 21,279 48.0 7,783 13,495 Other current assets 4,458 10.1 465 3,992 II Fixed assets *18,558 41.9 408 *18,149 *of which long-ter
Slide 10: Transaction Volumes
Transaction Volumes Both full-year transactions closed and sell-side mandates pending completion at record highs Full-year transactions closed : +14.9% yoy (770 ⇒ 885) (Units:number FY2016 FY2017 FY2018 FY2019 of deals, Full Full Full Full million yen) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q １Q 2Q 3Q 4Q year year y
Slide 11: Number of Transactions Closed
Number of Transactions Closed The number of transactions closed has been increasing steadily, recording a historical high Number of transactions closed (Unit: transaction volume) 885 900 800 770 700 649 600 524 500 420 400 338 300 200 100 0 2015/3期 FY20142016/3期 FY2015 2017/3期 FY20162018/3期 FY2017 2
Slide 12: Number of Employees
Number of Employees Strong increase in headcount, reaching 634 on May 1 +29.0％ yoy （451→582）at Mar 31 ➡ Fulfilling medium-term growth plan with buoyant M&A End- Number of employees Including number of people newly hired and yet to start Mar End-Mar End-Mar End-Mar 1 May at May 1 2017 2018 2019 2020
Slide 13: Paid-in Stock Options and Performance Targets
Paid-in Stock Options and Performance Targets Achieved FY2020 ordinary profit target (￥13.5 billion) in FY2019 ➡ Aiming for early achievement of ￥15 billion target Conditions on Ratio of exercisable paid- Period ordinary profit Notes on ordinary income (annual) in stock options Over FY2018 result 1.
Slide 14: 10-year Results Record
10-year Results Record 10th consecutive period of higher sales and profit (¥mn) 35,000 売上高 Sales 32,009 30,000 Ordinary profit 経常利益 28,463 24,625 25,000 20,000 19,069 Reach ¥10 bn Reach ¥5 bn 14,467 14,778 15,000 12,227 10,547 12,533 10,000 11,670 7,214 9,070 6,005 5,008 7,116 5,000 3,655 6,310 5,49
Slide 15: Number of Transactions Closed in Q4 (1/3)
Number of Transactions Closed in Q4 (1/3) 73 transactions closed, 142 by number of companies Selling company Acquiring company Transaction type Industry classification Region Industry classification Region 1 Metal parts wholesale Kansai Metal parts wholesale Kanto Stock transfer 2 Manpower dispatchi
Slide 16: Number of Transactions Closed in Q4 (2/3)
Number of Transactions Closed in Q4 (2/3) Selling company Acquiring company Transaction type Industry classification Region Industry classification Region 26 Construction materials wholesale Kyushu, Okinawa Construction materials wholesale Kyushu, Okinawa Stock transfer 27 Plant engineering Kansai C
Slide 17: Number of Transactions Closed in Q4 (3/3)
Number of Transactions Closed in Q4 (3/3) Selling company Acquiring company Transaction type Industry classification Region Industry classification Region 51 Hospital Tokai, Hokuriku Hospital Kanto Equity scheme 52 Building construction Chugoku, Shikoku Building construction Kyushu, Okinawa Stock tr
Slide 18: FEATURE (1)-1 Helping to revitalize regional economies
FEATURE（１）-1 Helping to revitalize regional economies To revitalize regional economies it is important to ensure: Continuity of local SMEs and maintenance of employment through succession planning Establishment of great companies to attract the younger working population Revitalizing regional econom
Slide 19: FEATURE (1)-2 TOKYO PRO Market listing sponsorship
FEATURE （１）-2 TOKYO PRO Market listing sponsorship Complete first IPO as J-Adviser Our actual results of listing support J-Adviser contracts progress 23 December 2019 One of our sponsored companies promoted to TSE Mothers In 7 months since our launch Company Name global bridge HOLDINGS Co., Ltd.<6
Slide 20: FEATURE (2)
FEATURE （2） Strong increase in the cumulative number of registered users and transactions completed. The total number of companies for sale has exceeded 2,000 for the first time. User registrations Transactions completed Transactions People 45,000 42,834 400 352 40,000 350 35,000 300 30,000 250 24,4
Slide 21: FEATURE (3) Opening of Shin-Nihonbashi office
FEATURE （3） Opening of Shin-Nihonbashi office New head office for our subsidiary Corporate Value Laboratory Inc. and office for ISR （internal sales division） Enabling us to increase staff and diversify working practices as we expand our fields of business Example of Improving Employment Practices (C
Slide 22: FEATURE (4) What size sellers does Nihon M&A Center support?
FEATURE （4） What size sellers does Nihon M&A Center support ？ Sales in a seller Number of employees in a seller More than 100 employees, More than 7.6％ More than 1 bn 2 bn yen, 100 m yen or less, More than 50 to 5 employees or less, 11.5％ to 2 bn yen, 8.3％ 7.5％ 100 employees, 9.6％ More than 100 m to
Slide 23: Dividend Payments and Market Capitalization
Dividend Payments and Market Capitalization Aiming for sustained long-term growth Dividends and the pay-out ratio Market capitalization（From end-Apr 2015) (¥mn) ※ （％） (¥bn) 4,500 4,239 50 7,000 配当総額 Dividends 4,000 Pay-out 3,699 48 配当性向 Ratio 6,000 3,295 46 3,500 44 3,000 2,481 5,000 42 2,500 41.7 1
Slide 24: Dividend Per Share
Dividend Per Share An increased dividend than original forecast for FY2019 has been announced Consolidated payout-ratio : 41% Actual interim dividends Actual FYE dividends ※2 Original forecasts for annual dividends Year-end dividend （forecast） Unit:¥ Dividend forecast at start of Original forecasts
Slide 25: Share Ownership
Share Ownership Foreign share ownership has now risen to 51.6% 30 September 2019 31 March 2020 Treasury stock Treasury stock Other Corporations 1.8％ Other Corporations 1.8％ 2.7％ 2.3％ Individuals Individuals 22.3％ 19.5％ Foreign Foreign 51.6％ Financial 46.8％ Financial institutions institutions 24.8％ 2
Slide 26: Forecasts for FY2020 and response to coronavirus
Forecasts for FY 2020, our response to the spread of the coronavirus and its impact 1 Forecast for year to March 2021 Meaningful calculations about the impact of the coronavirus are currently difficult. We shall announce full year forecasts as soon as there is sufficient certainty for doing so. 2 Pr
Slide 27: Company Overview
Company Overview IA HAMS ACT S—
Slide 28: Introduction
Introduction External environment Business succession Rising pace of Wider understanding of planning becomes a industries restructuring growth strategies chronic concern Rising concerns about M&A needs will intensify employment Rising of social needs. in the future. and socio-economic impacts* Nihon
Slide 29: Corporate Profile (End-March 2020)
Corporate Profile (End-March 2020) Leading company in M&A intermediary services with a track record of over 5,000 completed transactions Company name Nihon M&A Center Inc. Established April 1991 Business outline M&A support for small and medium-sized enterprises (SMEs) Representatives Chairman and f
Slide 30: Corporate History
Corporate History Prior to our Chairman Yasuhiro Wakebayashi and President Suguru Miyake worked at Olivetti Japan. They had responsibility for sales of computers nationally to accounting firms and regional financial founding institutions. The current M&A network has evolved from their network at t
Slide 31: Business Model: A Platform for the M&A Market
Business Model A Platform for the M&A Market Top M&A information network Large financial institutions, Large financial institutions, venture capital, venture capital, private equity and private equity and consultancies consultancies Information Information Regional financial Regional financial insti
Slide 32: Initiatives to Optimise our Information Network
Initiatives to Optimise our Information Network Merger and Acquisition Association of Japan membership benefits Support for future members • Regular meetings (international, management level, regional) Mutual secondment programme • Variety of workshops (future leadership; sales; corporate succ
Slide 33: Our Workflow as an M&A Intermediary
Our Workflow as an M&A Intermediary Consultation Retainer Signing of advisory agreement fee Provision of materials Nihon M&A Center Valuation Company analysis, sector research, selection of potential buyers Preparation of teaser (anonymous) Explanation of teaser (anonymous) Preparation of investment
Slide 34: Becoming an Integrated M&A Company
Becoming an Integrated M&A Company Nihon M&A Center becoming a hub for specialized high quality group companies Business succession, growth strategy consulting Introductions, Information Start of Negotiation, Company valuation dialogue with PMI services project closing market research principals Nih
Slide 35: Our Organization Structure (from April 2020)
34 Related Group International Companies ASEAN promotion H.Q. Div. Outbound M&A promotion Copyright©2020 Nihon M&A Center Inc. All rights reserved. Our Organization Structure （from April 2020） Corporate Planning Office Administration General Affairs Dept. H.Q. Human Resources Dept. Accounting De
Slide 36: New Organization Structure (1)
New Organization Structure (１） Team for large financial institutions becomes one of 4 sales divisions Strengthening of origination, the core growth driver Sales Headquarters Independent sales division from FY 2020 Alliance Management Large Financial Strategy Management Industry Focus Division Divisi
Slide 37: New organisation structure (2)
New organisation structure（２） Human Resources First Human resource Transaction Impeccable execution Management Division optimization Management Division Strategic recruitment Evaluation of support Reduction of lead times in our mandates through greater accuracy of preparation phase Improved
Slide 38: Human Resources Training
Human Resources Training Subsidy system for training of new recruits and further development of key employees Internal training External training Training for new recruits Improvement for every level Regular training Understanding of our company Success and failure analysis Monthly training Da
Slide 39: Human Resource Development Plan
Human Resource Development Plan A layered approach for thoroughness. We aim to achieve fast results from the training For Senior executive officers and above. Core to strengthened training plan layer Senior Creating and implementing growth Executive offsites executives Goal 4 strategies for our comp
Slide 40: Sustainability
Sustainability Environmental Social and Governance (ESG) practice Important topics Our main policies Society orientated Env Decreasing the environmental burden Use of public transport, promoting use of IT, reduction of unnecessary printing towards recycling Employee reviews（twice per year), “sec
Slide 41: CSR Initiatives
CSR Initiatives Our commitment to support amicable M&A contributes to the sustainable growth of society by reinforcing mangement foundations and growth in employment FY2018 contribution to avoidance of economic loss ※1 Overview of our group CSR policaies Sell-side advisor for 339 transactions in whi
Slide 42: Distribution of the Age of Owners & Average Retirement Age
Distribution of the Age of Owners & Changes in the Average Age of Retirement Highest average age category of SME owners has risen to 69 (Figure1) Rising average retirement age (Figure 2) Age distribution of SME owners (in 5-year categories) Changes in owners average retirement age 1995年 2000年 2005年
Slide 43: Strong Increase in Succession Outside Family
Strong Increase in Succession Outside Family Succession outside family has increased to over 65% Shift in background of company presidents viewed by length of term of office 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 35 - 40 years 83.5 9.2 3.7 3.7 30 - 35 years 82.5 7.4 6.5 3.7 25 – 30 years 75.5 9
Slide 44: Future Projections for the Numbers of Companies and Workers
Future Projections for the Numbers of Companies and Workers Number of companies to decrease by 830,000 within the next 10 years 4.03 million *Basis for calculation: end-2015 = 100% companies End- End- End- End- End- 企業数 Working population in 2015 End-2015 2020 2025 2030 2035 2040 100% 就業人口数 Working
Slide 45: M&A Market Potential
M&A Market Potential There is a potential market in excess of ¥20 trillion Business succession potential market estimate Ratio of Number of Sales per M&A Number of companies companies Employees M&A market Our position/initiative companies with no with no transaction size successor successor New mark
Slide 46: Lastly
Lastly Ⅰ. Management principles Management principles Company goal Management priority on adherence to compliance and Assisting companies to continue and prosper through M&A corporate social responsibility Building up higher level governance structure Ⅱ. To investors Increase market value Return pro
Nihon M&A Center Holdings — FY2019 Earnings Presentation on 6ix