Fibergate, Inc. · TSE:9450
Fibergate — FY2020 Earnings Presentation
35 slides from Fibergate's earnings presentation, Aug 12, 2020
Slide 1: Financial Results Briefing for FY2020
August 12, 2020 Fibergate Inc. Financial Results Briefing for FY2020 Listing exchange: First Section of the Tokyo Stock Exchange, Sapporo Securities Exchange Securities code: 9450 ©Fibergate Inc. All rights reserved.
Slide 2: Table of Contents
2 Table of Contents Operating Results for the Fiscal Year Ended June 2020 Earnings Forecast for the Fiscal Year Ending June 2021 Strategies for the New Normal After/With COVID-19 Topics Appendix ©Fibergate Inc. All rights reserved.
Slide 3: Impact of COVID-19 on Our Business Results
3 Impact of COVID-19 on Our Business Results Operating Results for the Fiscal Year Ended June 2020: ü The impact of stay-at-home requests and the 3Cs (closed spaces, crowded places, close-contact settings) approach appeared in the Free Wi-Fi Business in mid-March and persisted throughout the rest of
Slide 4: Briefing Points
4 Briefing Points Operating Results for the Fiscal Year Ended June 2020: 1 Year-on-year increase in sales of 36% and year-on-year increase in ordinary profit of 37% ü The Residential Wi-Fi Business grew significantly with an increase in the number of contracted units. This was also driven by the shi
Slide 5: Operating Results for the Fiscal Year Ended June 2020
Operating Results for the Fiscal Year Ended June 2020 ©Fibergate Inc. All rights reserved.
Slide 6: Overview of Consolidated Financial Results
6 Overview of Consolidated Financial Results l Net sales and ordinary profit increased year on year by 36% and 37%, respectively. Their growth rates remained high despite the COVID-19 pandemic. l The Residential Wi-Fi Business enjoyed a steady increase in the number of customers. Meanwhile, the Free
Slide 7: Factor Analysis for Year-on-Year Increase/Decrease in Ordinary Profit
7 Factor Analysis for Year-on-Year Increase/Decrease in Ordinary Profit Outlook l Significant profit growth was attributed to higher sales, underpinned by changes in some product compositions. l In terms of costs, fixed costs continued to increase due to customer growth and infrastructure developmen
Slide 8: Quarterly Change in Consolidated Financial Results
8 Quarterly Change in Consolidated Financial Results l Sales and profit increased significantly year on year in Q4, driven by the growth of the Residential Wi-Fi Business. l On the other hand, compared with Q3, sales and profit for Q4 decreased due to seasonal factors. Still, the Free Wi-Fi Business
Slide 9: Change in Revenue by Business Type
9 Change in Revenue by Business Type l Subscription revenue has increased for nine consecutive quarters since listing. Revenue increased by 2.1 times from FY2018 Q3 in FY2020 Q4. Accordingly, the subscription-based business model pursued since founding is coming to fruition. l Meanwhile, one-time re
Slide 10: Change in Key Indicators
10 Change in Key Indicators l The cumulative number of contracted units for Residential Wi-Fi services was 280,000 at the end of Q4. Nationwide market share is estimated to have exceeded 10%. l The number of access points for Free Wi-Fi services reached 75,000. The growth rate slowed down due to the
Slide 11: Overview of Consolidated Operating Results (Balance Sheet)
11 Overview of Consolidated Operating Results (Balance Sheet) l The equity-to-asset ratio was 38.8%. The fragile financial standing improved steadily. l Still, the financial structure exhibits a tendency that receivables and tangible fixed assets increase with customer growth due to our business mod
Slide 12: Overview of Consolidated Financial Results (Cash Flow Statement)
12 Overview of Consolidated Financial Results (Cash Flow Statement) l Working capital costs increased with customer growth. We also continued to make upfront investments in facilities, equipment, etc. l This fiscal year again saw large cash outflows and negative FCFs, which, given the characteristic
Slide 13: Change in Cash Flows
13 Change in Cash Flows l In the fiscal year ended June 2020, the FCF deficit grew briefly due to the strong increase in customer numbers. Given that our business model requires upfront investment, we should accept an increase in cash outflows. l The FCF deficit was reduced to almost zero in H2, wit
Slide 14: Earnings Forecast for the Fiscal Year Ending June 2021
Earnings Forecast for the Fiscal Year Ending June 2021 ©Fibergate Inc. All rights reserved.
Slide 15: Consolidated Earnings Forecast for FY Ending June 2021 (1) Summary
15 Consolidated Earnings Forecast for the Fiscal Year Ending June 2021 (1) Summary l In the fiscal year ending June 2021, sales and ordinary profit are expected to increase by 21% and 16%, respectively. Despite the COVID-19 pandemic, we will aim to exceed the targets set for the fiscal year ending J
Slide 16: Earnings Forecast (2) Analysis of Key Preconditions
16 Consolidated Earnings Forecast for the Fiscal Year Ending June 2021 (2) Analysis of Key Preconditions l The cumulative number of contracted units for Home Use Wi-Fi services is expected to increase at a slightly faster rate, in part due to the shift to remote work. l Meanwhile, the number of acce
Slide 17: Earnings Forecast (3) Factor Analysis for Year-on-Year Change
17 Consolidated Earnings Forecast for the Fiscal Year Ending June 2021 (3) Factor Analysis for Year-on-Year Increase/Decrease June 2020 (FY 2020) Actual June 2021 (FY 2021) Outlook Net sales 7.42 billion yen Net sales 9.05 billion yen Ordinary profit 1.22 billion yen Ordinary profit 1.41 billion yen
Slide 18: Consolidated Earnings Forecast (4)
18 Consolidated Earnings Forecast for the Fiscal Year Ending June 2021 (4) l The quarterly forecast predicts that profit will remain weak in Q1. Compared with last year, the Business Use Wi- Fi Business is likely to struggle this year due to the COVID-19 pandemic, in addition to the absence of the l
Slide 19: Performance Trend
19 Performance Trend l Apart from the unforeseen obstacles caused by the COVID-19 pandemic, we are accelerating our efforts to reform our company. In the fiscal year ending June 2021, when these efforts will be put to the test, we will focus our efforts on achieving the interim targets set in the Me
Slide 20: Strategies for the New Normal After/With COVID-19
Strategies for the New Normal After/With COVID-19 (Business Use Wi-Fi Deployment/Home IoT) ©Fibergate Inc. All rights reserved.
Slide 21: The World After/With COVID-19
21 The World After/With COVID-19 l The COVID-19 pandemic will inevitably change lifestyles and social attitudes. It is highly likely that the 3Cs approach and the shift to remote work will evolve Wi-Fi communications into essential life infrastructure. World after/with COVID-19 World before COVID-19
Slide 22: Impact of COVID-19 on Our Alternative Carrier Strategy
22 Impact of COVID-19 on Our Alternative Carrier Strategy l The COVID-19 pandemic increased interest in communications infrastructure in a broad sense. The trend towards more user-friendly and more economical carriers may become mainstream. l It is also highly likely that the demand for Alternative
Slide 23: Developmental Reorganization by Adding Remote Services to the Free Wi-Fi Business
23 Developmental Reorganization by Adding Remote Services to the Free Wi-Fi Business Business Use Wi-Fi Business Corporate Remote Services Business To meet the changing Wi-Fi needs of retail facilities and businesses under the COVID-19 pandemic Support services for corporate customers shifting to re
Slide 24: Remote Work Pilot Program Started at the Finance and Accounting Division
24 Remote Work Pilot Program Started at the Finance and Accounting Division Growing trend Paperwork- towards based remote work workflow Some teams, such as finance and accounting teams, may find it difficult to shift to remote work Smart payment platform In order to promote the Business Use Wi-Fi Bu
Slide 25: Home Use Wi-Fi Business Accelerating the Promotion of Home IoT
25 Home Use Wi-Fi Business Accelerating the Promotion of Home IoT EG-Lab, a development subsidiary Serves as a hub for product development to establish an exclusive communications service in order to achieve the Alternative Carrier Strategy (Founded in January 2020) Launched integrated Home IoT Serv
Slide 26: Topics
Topics ©Fibergate Inc. All rights reserved.
Slide 27: New Services for Online Events
27 New Services for Online Events June 2020~ The Event Wi-Fi Premium Plan was launched Providing a plug-in solution to establish safer and more reliable communications for live streaming during the COVID-19 pandemic without the need for large-scale construction or feeder installation Large-scale con
Slide 28: Appendix
Appendix ©Fibergate Inc. All rights reserved.
Slide 29: Company Profile
29 Company Profile An independent (not belonging to any telecommunication carriers) Wi-Fi solution company* that provides end-to-end services from the development and production of networking devices to telecommunications services * Independent public wireless LAN operators In the public wireless LA
Slide 30: Overview of Main Businesses
30 Overview of Main Businesses l The Company conducts two main businesses, of which the Residential Wi-Fi Business is the mainstay business accounting for 76.9% of all sales (for the fiscal year ended June 2020). l Focus is placed on “provision of private brand services to customers” (the Company ma
Slide 31: Communications Business Flow
31 Business Flow l Monetary compensation is received from the parties with which service agreements have been concluded. Users of internet connection bear no monetary burden l The mainstay operation is “provision of private brand services to clients.” Service agreement companies, etc. management (pr
Slide 32: Business Model
32 Business Model l Built on the two pillars of one-time sale business and subscription business aimed at the niche market. l Differentiated from others by the three aspects of “product development capabilities,” “price competitiveness,” and “authentication technology.” Target Niche market: owners o
Slide 33: Company History
33 Company History Year Description Ø Established in Wakabayashi Ward, Sendai City, to arrange subscriptions to domestic and international 2000 telephone services Ø Relocated the head office to Chuo Ward, Sapporo City 2003 Ø Conducted network rebuilding for companies based on multiple locations and
Slide 34: Financial Highlights
34 Financial Highlights Fiscal Year (*6-month operating results) June 2016 June 2017 June 2018 June 2019 June 2020 (FY 2016)* (FY 2017) (FY 2018) (FY 2019) (FY 2020) Net sales (thousand yen) 1,023,483 2,787,387 3,977,485 5,446,396 7,424,440 Ordinary profit (thousand yen) 55,270 334,836 510,171 886,9
Slide 35: Thank you for your attention.
35 Thank you for your attention. <Notes on Outlook> The contents of this document are based on certain assumptions and should not be construed as a promise or guarantee of achieving the planned figures and measures for the future. Contact IR staff, Business Management Division fgir@fibergate.co.jp ©