Mksystem Corp. · TSE:3910
Mksystem — 1H FY3/21 Earnings Presentation
45 slides from Mksystem's earnings presentation, Nov 25, 2020
Slide 1: Presentation Materials for the Earnings Briefing
Presentation Materials for the Earnings Briefing for the First Half of the Fiscal Year Ending March 31, 2021 November 25, 2020
Slide 2: Table of contents
2 1 Overview of Consolidated Financial Results for First-half of FY3/21 2 Business Topics for First-half of FY3/21 Table of 3 Growth Strategies: First-half Review and Future Development contents 4 Consolidated Earnings Forecast for FY3/21 and Other Information 5 Group Overview and Business Activitie
Slide 3: Overview of Consolidated Financial Results for First-half of FY3/21
3 Overview of Consolidated Financial Results for First-half of FY3/21
Slide 4: Summary of consolidated financial results
4 Summary of consolidated financial results Sales: Firm ASP service (monthly fees) sales, but total sales below plan due to decline in new customers Shalom Business Profit: Above plan as expenses decreased because of teleworking, cancelation of events, business travel restrictions and other reasons
Slide 5: Consolidated balance sheet
5 Consolidated balance sheet Property, plant and equipment increased because of the relocation of the Tokyo office Current liabilities decreased because of tax payments and other reasons (Thousands of yen, %) 1H FY3/21 FY3/20 (Sep. 30, 2020) (Mar. 31, 2020) Change % Change Notes Cash and deposits (1
Slide 6: Consolidated statement of cash flows
6 Consolidated statement of cash flows Cash flows were affected by increases in payments for taxes and the Tokyo office relocation (Thousands of yen, %) 1H FY3/21 1H FY3/20 YoY Change Notes Cash flows from operating activities 77,411 345,758 (268,347) Profit before income taxes 82,591 159,429 (76,83
Slide 7: Operating results of the Shalom Business
7 Operating results of the Shalom Business (Thousands of yen, %) YoY YoY 1H FY3/21 1H FY3/20 Notes Change % Change Net sales 917,304 874,318 +42,985 +4.9% (ASP service) ・Basic Plan 217 million yen (+3.5%) Cloud service 871,070 817,346 +53,723 +6.6% ・House Plan 237 million yen (+13.2%) ・Shalom CE (in
Slide 8: Operating results of the CuBe Business
8 Operating results of the CuBe Business (Thousands of yen, %) YoY YoY 1H FY3/21 1H FY3/20 Notes Change % Change Net sales 210,725 309,322 (98,596) (31.9)% Breakdown of contracted developments: Contracted Develop-and-deliver projects 193,753 289,636 (95,883) (33.1)% 90 million yen (-47.9%) developme
Slide 9: Business Topics for First-half of FY3/21
9 Business Topics for First-half of FY3/21
Slide 10: Sales promotion activities for labor and social security attorney offices
10 Sales promotion activities for labor and social security attorney offices Online seminars for labor and social security attorneys (17 times), and Shalom user meetings (Online + On-site) (4 times) April and May 2020 June 2020 July 2020 Seminar for labor and social security attorneys Seminar for la
Slide 11: Online seminars (since April 2020)
11 Online seminars (since April 2020) More than 1,000 people have attended nationwide online seminars since April Teleworking Seminar for Starting a Labor and Social Security Attorney Office The seminars are very popular as a way for people anywhere in Japan to participate in these events with ease.
Slide 12: Sales promotion activities for general corporations
12 Sales promotion activities for general corporations Participated in the online event of the Revival Management Forum Secretariat and co-hosted online seminars Total of 211 professionals from the personnel and general affairs divisions of major companies attended the co-hosted online seminars. MKS
Slide 13: Cross Functional Project
13 Cross Functional Project (CFP) Cross Functional Project The Tokyo office relocation created an excellent opportunity to launch this project in September 2020 Labor insurance administration association Shalom National Organization
Slide 14: Goals of the Cross Functional Project
14 Cross Functional Project (CFP) Goals of the Cross Functional Project ・ The mission is to bring together companies and organizations with a broad spectrum of knowledge and experience to study a variety of management issues from many perspectives and create proposals for solutions. ・ The new Tokyo
Slide 15: How the Project Operates
15 Cross Functional Project (CFP) How the Project Operates Structure Cross Functional Project Overall Project Personnel, labor relations, Sales Promotion Project Technology Project A single corporate culture administration ・Unification of ・Use of comprehensive ・Marketing strategies ・Seamless links f
Slide 16: Target markets and market shares (1)
16 Target markets and market shares (1) Labor and Social Security Attorney Office Market End-Sep 2020 Large-scale offices Offices with our systems introduced*2 2,535 offices (10 or more workers) 2,963 offices YoY change Up 41 offices Other Our market share 9.6% 14,761 offices Small- to medium-scale
Slide 17: Target markets and market shares (2)
17 Target markets and market shares (2) General Corporate Market 62,820 companies with 100 or more 5,000 or more employees employees 636 companies 2,000 to less than 5,000 employees 1,375 companies End-Sep 2020 1,000 to less than 2,000 employees Introductions in 2,454 companies 300 to less than 1,00
Slide 18: Trends in services for labor and social security attorneys
18 Trends in services for labor and social security attorneys Users of the mainstay products are increasing steadily. Basic Plan House Plan Lite Plan 1,600 1,390 1,420 1,400 1,341 1,407 1,291 1,200 1,000 800 653 669 591 600 549 467 371 385 400 288 255 200 186 0 FY3/17 FY3/18 FY3/19 FY3/20 1H FY3/21
Slide 19: Trends in services for labor and social security attorneys
19 Trends in services for labor and social security attorneys Users of accessories are increasing steadily. MYNABOX eNEN 1,800 1,657 1,660 1,601 1,600 1,429 1,400 1,347 1,200 1,000 800 600 400 200 118 0 FY3/17 FY3/18 FY3/19 FY3/20 1H FY3/21
Slide 20: Trends in services for general corporations
20 Trends in services for general corporations As the government is promoting online one-stop social security and tax procedures, the number of systems introduced by general corporations is showing an increasing trend. Number of corporate customers 144 137 140 120 109 100 87 80 66 60 40 20 0 FY3/17
Slide 21: IR news
21 IR news May 1, 2020 Redesign of the Shalom Company Edition Logo May 8, 2020 Notice of Establishment of the Shalom National Organization and Website May 21, 2020 Notice of Change in Format of the FY3/20 Financial Results Meeting Jun. 1, 2020 Notice Concerning the “#Remote Work for Business Partner
Slide 22: Growth Strategies: First-half Review and Future Development
22 Growth Strategies: First-half Review and Future Development
Slide 23: 1H FY3/21 business segment strategy review
23 1H FY3/21 business segment strategy review Shalom Business: CuBe Business: Market-specific strategies Service-specific strategies Maintained a Demand remains Labor and social security stable revenue Contracted development very strong attorney market stream type semi-customized Improved profit ser
Slide 24: Shalom Business: Market overview
24 Shalom Business: Market overview Overview of the current market In terms of the number of labor and social Given that our market share is 9.6%, there is a 650,000 security attorney offices: large market waiting to be tapped. 3,850,000×30% In terms of the number of companies involved by The number
Slide 25: Shalom Business: Market-specific strategies (general corporations)
25 Shalom Business: Market-specific strategies (general corporations) Promote market-specific strategies (General corporations) corporate Expand the customer base Approx. Expand the range of service 1,160,000 offerings Strengthen the tuning support companies service Enrich service offerings Strength
Slide 26: CuBe Business: Service-specific strategies
26 CuBe Business: Service-specific strategies Service-specific strategies Contracted development type semi-customized services → Continue stable operation as a key revenue driver by: Steadily improving and maintaining existing systems for existing customers Efficiently developing services with the c
Slide 27: Consolidated Earnings Forecast for FY3/21 and Other Information
27 Consolidated Earnings Forecast for FY3/21 and Other Information
Slide 28: Consolidated earnings forecast
28 Consolidated earnings forecast Sales: Demand of systems to support diverse work styles is expected to grow in line with the “digital government initiatives” and “work style reform.” Shalom Business Costs: Lower profit margin due to higher expenses caused by increase in labor cost for strengthenin
Slide 29: Earnings forecast by segment: Shalom Business
29 Earnings forecast by segment: Shalom Business (Millions of yen, %) FY3/21 FY3/20 YoY YoY Forecast Actual Change % Change Net sales 2,144 1,771 +372 +21.0% Forecast consistent growth in sales of services for labor and social security attorneys as in Cloud services 2,032 1,658 +374 +22.6% prior yea
Slide 30: Earnings forecast by segment: CuBe Business
30 Earnings forecast by segment: CuBe Business (Millions of yen, %) FY3/21 FY3/20 YoY YoY Forecast Actual Change % Change Forecast no change in contracted development Net sales 605 608 (3) (0.6)% sales, with many system improvement and maintenance projects, Contracted development 565 564 +0 +0.1% an
Slide 31: Trends in business performance and forecast
31 Trends in business performance and forecast Sales: We will achieve a consecutive year-on-year increase by enhancing a new market for general corporations. Profit: The operating margin will be lower due to an increase in depreciation attributable to improvement of products and higher expenses caus
Slide 32: Dividend forecast for FY3/21
32 Dividend forecast for FY3/21 Our profit distribution policy is “to implement a stable dividend payment with the baseline payout ratio of 20%.” Dividends for FY3/21 will be paid out based on the basic policy. (Yen) 20.0 Annual dividend per share after adjustment 60.0% Payout ratio 38.7% 40.0% 27.4
Slide 33: Group Overview and Business Activities
33 Group Overview and Business Activities
Slide 34: Company profile
34 Company profile ◆Company name MKSystem Corporation ◆Business ・ The Shalom Business The business of providing software to support business processes associated with social insurance and labor insurance as a cloud service provider. ・ The CuBe Business The business of developing and providing front-
Slide 35: Summary of the Group's lines of business
35 Summary of the Group’s lines of business • Provision of cloud services including software to support business processes associated with social insurance, labor insurance, and payroll • Provision of cloud services with applications aimed at clients of labor and social security ASP service attorney
Slide 36: Our mainstay service (Shalom)
36 Our mainstay service (Shalom) Database for IDC Clients of Labor (Internet Data Center) Employee Client and Social Security Database Database Attorney Office Client Company Labor and Social Security Attorney Office Administrative Agencies (Shalom) ⃝ Social insurance procedure Public Employment ⃝ A
Slide 37: Our mainstay service (MYNABOX)
37 Our mainstay service (MYNABOX) Operation Login Labor and authentication API Linkage Social Security Decryption key Print Shalom Attorney Various legal forms Electronic application Outsource Register/Cross-check/ View history Shalom Login Database authentication API Reference • Referring app • Ope
Slide 38: Our mainstay service (Shalom Company Edition)
38 Our mainstay service (Shalom Company Edition) Intra-company personnel management system Company Administrative Database Agency Automatic generation of necessary procedures Electronic Employee application Database CSV DATA Application Application processing on forms Procedure Employment Shalom Sta
Slide 39: Our mainstay service (DirectHR)
39 Our mainstay service (DirectHR) Centralized management using the cloud for all applications submitted by employees during their entire time at the company, including for events like childbirth. Smartphones and PCs can be used for applications. Handles everything from data input to e- applications
Slide 40: Our mainstay service (eNEN) (1)
40 Our mainstay service (eNEN, renamed from Nenmatsu-chosei CuBe Cloud) (1) Fully supporting year-end tax adjustment operations by reducing tax filling input and implementing progress management function Division in charge Tax filer of operation Simple & easy! Accurate & efficient! The system tell
Slide 41: Our mainstay service (eNEN) (2)
41 Our mainstay service (eNEN, renamed from Nenmatsu-chosei CuBe Cloud) (2) Fully supporting year-end tax adjustment operations by reducing tax filling input and implementing progress management function 1. It makes the operation easy to understand! Enhanced control with authority settings The scree
Slide 42: A new mainstay service (Cloud Pocket)
42 A new mainstay service (Cloud Pocket) NEW! For the safe and easy distribution and receipt of official documents. Greatly simplifies the distribution of job separation forms, benefit receipt qualification confirmation notices, workplace accident forms and other official forms as well as important
Slide 43: Our mainstay services (Contracted development type semi-customized services)
Our mainstay services 43 (Contracted development type semi-customized services) Jinzai CuBe Shugyo CuBe Human resource profile Attendance management Target and performance management Self-assessment CuBe Employee profile inquiry Business process event guidance Salary / bonus detail inquiry Private B
Slide 44: Our mainstay service (GooooN)
44 Our mainstay service (GooooN) evaluation and training tool that you can use on-site on a day-to-day basis, The latest crystalizing know-how that has been used by large companies for over 20 years. GooooN coordinates the above three business operations, deepens communication with employees, and su
Slide 45: We provide cloud solutions that benefit you
45 “We provide cloud solutions that benefit you” The plans, estimates and other forward-looking statements contained in this material are forecast based on information available at the time this material was prepared, and these statements include risk and uncertainty. Actual performance may differ f