Hennge K.k. · TSE:4475
Hennge K.k — Q3 FY09/2021 Earnings Presentation
72 slides from Hennge K.k's earnings presentation, Aug 12, 2021
Slide 1: 3Q 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. 3Q FY09/2021 Consolidated Financial Results August 12, 20
Slide 2: Table of Contents
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Table of Contents 1. 3Q FY09/2021 Consolidated Financial Results 2. Progress of FY09/2021 Full-year Forecasts 3. Growth Strategy 4. Appendix Corporate Overview Total Addressable Market Others 5. Past Materials 2
Slide 3: 3Q FY09/2021 Consolidated Financial Results (Financial Results)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results 3Q FY09/2021 Consolidated Financial Results (Financial Results) 3
Slide 4: Net Sales
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Net Sales (YoY, 9 months accumulated comparison, compared to 3Q FY09/2020 accumulated) The net sales increased by 17.5% YoY to 3.53 billion yen. The sales of HENNGE One, our key driver of the growth, grew by 20.1%. HENNGE One Profess
Slide 5: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 9 months accumulated comparison, compared to 3Q FY09/2020 accumulated) (unit: million yen) 1. The net sales rose by 17.5% YoY to 3.53 billion yen. The sales of HENNGE One rose by 20.1%
Slide 6: Gross Profit
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Gross Profit (YoY, 9 months accumulated comparison, compared to 3Q FY09/2020 accumulated) The gross profit increased by 0.47 billion yen YoY to 2.94 billion yen. The gross profit margin increased by 1.1pt YoY to 83.2%, and remains high.
Slide 7: Profit Attributable to Owners of Parent
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Profit Attributable to Owners of Parent (YoY, 9 months accumulated comparison, compared to 3Q FY09/2020 accumulated) The SG&A to sales ratio increased by 5.2pt YoY to 76.8% due to focusing on advertising expenses in 2Q. The profit attr
Slide 8: SG&A Structure of Operating Expenses
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Structure of Operating Expenses (YoY, 9 months accumulated comparison, compared to 3Q FY09/2020 accumulated) SG&A to sales (unit: million yen) ratio 76.8% (SG&A to sales ratio) YoY Of the other SG&A fees, although the SG&A to sales (
Slide 9: SG&A Structure of Operating Expenses (QoQ)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Structure of Operating Expenses (QoQ compared to 2Q FY09/2021) (unit: million yen) QoQ (unit: million yen) Other SG&A +12 Advertising expenses decreased significantly compared to the previous Advertising quarter due to the large-scale
Slide 10: Net Sales and Operating Expenses
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Net Sales and Operating Expenses (unit: million yen) 10
Slide 11: Breakdown of Employees
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Breakdown of Employees 206 employees (Excluding part-time employees, as of 2021-06-30) 11
Slide 12: Number of Employees
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Number of Employees (unit: employee, Excluding part-time employees) 12
Slide 13: 3Q FY09/2021 Consolidated Financial Results (Business Activities)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results 3Q FY09/2021 Consolidated Financial Results (Business Activities) 13
Slide 14: Business Highlights
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Business Highlights ● Advertisements and events ○ Holding the event HENNGE MEET UP! (Apr. to June 2021) ○ Hosting, sponsoring and participating in online events (Apr. to June 2021) ● Others ○ Release of consultation service as a new
Slide 15: Advertising and Events
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Advertising and Events Held a number of online events as a follow-up for HENNGE NOW!, a large-scale digital event held in the previous quarter 2Q 3Q and so on... 15
Slide 16: 3Q FY09/2021 Consolidated Financial Results (KPI Results)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results 3Q FY09/2021 Consolidated Financial Results (KPI Results) 16
Slide 17: HENNGE One KPI
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of 3Q FY09/2020) HENNGE One # of HENNGE One HENNGE One ARR contracted companies contracted users YoY +18.0% YoY +8.4% YoY +20.0% (as of 2021-06-30) (as of 2021-06-30) (as of 2021-06-30) (unit:
Slide 18: HENNGE One KPI Highlights
HENNGE K.K. (4475:TYO) 3Q 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 0.07pts to 0.24% compared to the end of FY2020 and remains low. 2. The number of user companies
Slide 19: HENNGE One Gross Revenue Churn Rate
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE One Gross Revenue Churn Rate Average monthly churn rate over the past 12 months for HENNGE One rose by 0.06pt QoQ to 0.24% and remains low. * Gross Revenue Churn Rate is calculated based on the decrease in contract value due t
Slide 20: HENNGE One Contracted Companies & Users
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE One Contracted Companies & Users +66 K user +87 companies 20
Slide 21: HENNGE One ARR & ARPU
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE One ARR & ARPU +41 yen per user +0.23 B yen 21
Slide 22: Progress of FY09/2021 Full-year Forecasts
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Progress of FY09/2021 Full-year Forecasts 22
Slide 23: Our Policy of FY09/2021
HENNGE K.K. (4475:TYO) 3Q 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 24: Overview of FY09/2021 Forecasts
HENNGE K.K. (4475:TYO) 3Q 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 25: FY09/2021 Forecasts of Sales by Business
HENNGE K.K. (4475:TYO) 3Q 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 72.5% towards the full-year forecast. Professional service (unit: million yen) HENNGE One (unit: million yen) and others ■Actual ■Forec
Slide 26: FY09/2021 Forecasts of Operating Expenses
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results FY09/2021 Forecasts of Operating Expenses The progress rate of the advertising expenses was at 93.0% towards the full-year forecast. Operating expenses (unit: million yen) Advertising expenses (unit: million yen) excl. advertising ex
Slide 27: Growth Strategy
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Growth Strategy 27
Slide 28: Vision
HENNGE K.K. (4475:TYO) 3Q 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 28
Slide 29: Maximize LTV
HENNGE K.K. (4475:TYO) 3Q 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 30: Maximize ARR
HENNGE K.K. (4475:TYO) 3Q 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 31: Progress of Our Growth Strategy
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Progress of Our Growth Strategy (HENNGE One) Having FY2021 as an inflection point, aiming to accelerate ARR growth from FY2022 by focusing on increasing # of contracted companies (N) in the short term while increasing ARPU in the mid
Slide 32: Growth Strategy on and After FY09/2021
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Growth Strategy on and After FY09/2021 Creating 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 fo
Slide 33: Marketing Activities for HENNGE One
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Marketing Activities for HENNGE One Conducting various activities to acquire customers (N) and improve ARPU in the mid term meeting Unreached potential customers event event Customer Large-scale event Marketing campaign engagement Co
Slide 34: Sales Activities for HENNGE One
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results [N] Sales Activities for HENNGE One The number of sales events targeting to approach the potential customers is expected to increase more than 4 times in LH of FY2021 compared to LH of FY2020. (# of events) ■Offline event ■Online event
Slide 35: [ARPU] New Features for HENNGE One
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results [ARPU] New Features for HENNGE One New features providing more secure file transfer, smartphone access security, and E-mail protection from targeted attacks will be added on HENNGE One (to be launched in Oct 2021). HENNGE Secure Downl
Slide 36: [ARPU] Renewal of Service Lineup for HENNGE One
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results [ARPU] Renewal of Service Lineup for HENNGE One Service lineups will be renewed from Oct 2021. Approaching varieties of customers with high value-added suite plans, as well as setting up single-function plans for light users. Set pla
Slide 37: HENNGE One, supporting customers' change
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE One, supporting customers change Supporting customers’ SaaS utilization and continuously liberating technology Analytics SSO Messaging Security Device control Sending large files Free-PPAP Behavior detection Receiving large file
Slide 38: HENNGE One as a SaaS platform
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE One as a SaaS platform HENNGE One, an IDaaS, growing as the global SaaS market expands Currently integrates with over175 Cloud services and more 38
Slide 39: Appendix (Corporate Overview)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Appendix (Corporate Overview) 39
Slide 40: Corporate Profile
HENNGE K.K. (4475:TYO) 3Q 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 41: Locations
HENNGE K.K. (4475:TYO) 3Q 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 41
Slide 42: Vision
HENNGE K.K. (4475:TYO) 3Q 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 42
Slide 43: History
HENNGE K.K. (4475:TYO) 3Q 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 44: Sales Structure by Business
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Sales Structure by Business About 90% of the net sales comes from HENNGE One business. (as of 3Q FY2021) 44
Slide 45: HENNGE One
HENNGE K.K. (4475:TYO) 3Q 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 46: HENNGE One
HENNGE K.K. (4475:TYO) 3Q 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 47: HENNGE One Solid Customer Base
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE One Solid Customer Base HENNGE One is used by 1,900 customers in various industries, and has 2.07 million users. (as of 2021-06-30) Breakdown by Contracted Users Size (ARR Basis, FY2020) and more 47
Slide 48: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Appendix (Total Addressable Market) 48
Slide 49: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Cloud Adoption Rate in Japan Cloud adoption rate in Japan has increased by 4.0pt to 22% (Reference: Press release ‘Average Cloud Computing Adoption Rate in Japan’ in June 2021 by Gartner, Inc. URL of the original release is https://w
Slide 50: HENNGE One Domestic Market Share
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE One Domestic Market Share Cloud-type Single Sign-on Service Approx.14.5 % of listed Japanese companies are Based on shipments quantity using HENNGE One (in-company investigation, as of 2021-06-30) Top Share Approx.1,090 averag
Slide 51: Growth in # of Contracted Companies (N)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Growth in # of Contracted Companies (N) Number of potential customers/markets are still existing within Japan. Firstly, our aim is to reach out to the companies with 300+ employees considering the benefit and effectiveness. (References
Slide 52: Growth in # of Contracted Companies (N)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Growth in # of Contracted Companies (N) Focusing to increase our customers not only in Tokyo, but also in Tokai, Kansai, Kyushu area for first-mover advantage. Tokyo Osaka Fukuoka Nagoya 52
Slide 53: Changes in the Market Environment
HENNGE K.K. (4475:TYO) 3Q 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 54: Appendix (Others)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Appendix (Others) 54
Slide 55: Diversity & Inclusion
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Diversity & 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 organization
Slide 56: Recurring Revenue Ratio
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Recurring Revenue Ratio The recurring revenue ratio increased 0.4pt YoY to 97.6%. Continuously achieving a strong and stable recurring revenue model. (unit: million yen) 56
Slide 57: Past Materials (New Services, etc.)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Past Materials (New Services, etc.) 57
Slide 58: New Service
HENNGE K.K. (4475:TYO) 3Q 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.) 58
Slide 59: New Plan
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results New Plan New plan of HENNGE One (June 2019) (This is scheduled to be revised after October 2021.) 59
Slide 60: New Plan
HENNGE K.K. (4475:TYO) 3Q 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 61: Release of CHROMO
HENNGE K.K. (4475:TYO) 3Q 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 62: Achieving a Passwordless World
HENNGE K.K. (4475:TYO) 3Q 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 63: Business Investments & New Business Development
HENNGE K.K. (4475:TYO) 3Q 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 64: Past Materials (Our Surveys, etc.)
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Past Materials (Our Surveys, etc.) 64
Slide 65: Our Survey
HENNGE K.K. (4475:TYO) 3Q 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 66: Our Survey
HENNGE K.K. (4475:TYO) 3Q 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 67: Our Survey
HENNGE K.K. (4475:TYO) 3Q 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 68: VPN Usage
HENNGE K.K. (4475:TYO) 3Q 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 69: HENNGE NOW! and its Marketing Campaigns
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results HENNGE NOW! and its Marketing Campaigns Held the large-scale digital event HENNGE NOW! in 2Q FY2021. Spent approximately 490 million yen on advertising expenses and aggressively carried out the advertising activities such as TV comme
Slide 70: Participant Attributes of HENNGE NOW!
HENNGE K.K. (4475:TYO) 3Q FY09/2021 Consolidated Financial Results Participant Attributes of HENNGE NOW! As a results of the aggressive advertising activities in 2Q FY2021, approached a wide range of companies and partners nationwide who are considering a cloud adoption. Aiming to promote the cloud
Slide 71: 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 72: HENNGE
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