Marketenterprise Co.ltd · TSE:3135
Marketenterprise Co.ltd — FY2020 Earnings Presentation
64 slides from Marketenterprise Co.ltd's earnings presentation, Aug 18, 2020
Slide 1: FY2020 Financial Results Briefing
MarketEnterprise Co., Ltd. FY2020 Financial Results Briefing August 18, 2020 TSE Code:3135
Slide 2: Results and Management Strategy agenda
1. Results for Fiscal Year Ended June 30, 2020 Kenichi Imamura, Director and CFO 2. Management Strategy for Fiscal Year Ending June 30, 2021 Yasushi Kobayashi, President and CEO 1
Slide 3: Results for Fiscal Year Ended June 30, 2020
1. Results for Fiscal Year Ended June 30, 2020 Kenichi Imamura, Director and CFO ・Consolidated Financial Results ・Results by Segment 2
Slide 4: Impact of COVID-19 on Performance
Impact of Novel Coronavirus (“COVID-19” below) on Performance +: positive impact on performance; -: negative impact on performance Segment Impact Details Although purchase requests decreased temporarily in response to Second-Hand online business +- 0 the State of Emergency, demand recovered after it
Slide 5: Consolidated Statement of Income
Consolidated Statement of Income Achieved record highs in net sales and all profit categories. In addition to increase in revenue, operating profit increased significantly on the back of improved SG&A ratio, improving operating profit ratio to 6.0% (Ref) Year-on-Year FY ended FY ended Earnings Forec
Slide 6: Factors for Changes in Consolidated Operating Profit
Factors for Changes in Consolidated Operating Profit Despite temporary expenses (M&A and incorporation costs) as aggressive upfront investments, operating profit increased 45.0% year on year due to effects of increased revenue provided by business growth (unit: millions of yen) Increased revenue Lab
Slide 7: Consolidated Balance Sheet
Consolidated Balance Sheet Financial health remains strong despite fluctuations due to M&A and payment timing FY ended FY ended (unit: millions of yen) Amt. change Factors in increase or decrease Jun 2019 Jun 2020 Current assets 2,117 3,068 +951 Cash and deposits 1,166 1,255 +88 Accounts receivable-
Slide 8: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows Operating cash flow exceeded expenditures due to increase in accounts receivable-trade resulting from higher sales towards the year end FY ended FY ended (unit: millions of yen) Jun 2019 Jun 2020 Amount Amount Amt. change Cash flows from operating activities 224
Slide 9: Results by Segment
~ MARKET ENTERPRISE Results by Segment
Slide 10: Second-Hand Online Business - Performance Overview
Second-Hand Online Business - Performance Overview Although performance remained steady up to 3Q, in 4Q, the state of emergency declaration resulted in shorter business hours, and purchase requests decreased amidst advertising restraints. Lower sales volumes due to delays in sales timing caused by i
Slide 11: Second-Hand Online Business - Net Sales Ratio By Product
Second-Hand Online Business - Net Sales Ratio By Product Sales increased for musical instruments and PCs. Sales of Agricultural equipment, etc.*1 grew significantly, up 67.8% year on year. In other categories, sales of model trains and other hobby- Net Sales Trends related products increased. by Pro
Slide 12: Number of Purchase Requests and Inventory Transitions by Quarter
Second-Hand Online Business - Number of Purchase Requests and Inventory Transitions by Quarter The number of purchase requests for FY2020 was 479,000 (+3% year-on-year), and the number of monthly purchase requests stayed around 40,000. 4Q sales declined amidst advertising restraint due to shorter bu
Slide 13: Inventory Turnover and Average Unit Sales Price
Second-Hand Online Business - Inventory Turnover and Average Unit Sales Price In 4Q, inventory turnover was 10.3 turnovers/year due to a decline in sales volume caused by delays in sales resulting from inventory adjustments. Average unit sales price hit a high level of ¥32,000 thanks to the Handling
Slide 14: Media Business - Performance Overview
Media Business - Performance Overview Sales from outside customers increased significantly due to demand for information accompanying the launch of new iPhones, as well as special demand arising from “Stay-home” lifestyle due to COVID-19 in 4Q. FY2020 Result Net sales 696 million (3.5x year-on-year*
Slide 15: Media Business – Average Monthly Page-View by Quarter
Media Business – Average Monthly Page-View by Quarter Three years after launching, the media group has grown to an average of 12.5 million page-views per month. In addition to March and April being the peak demand period, page views stayed high amidst special demand produced by telecommuting/stay-ho
Slide 16: Mobile & Telecommunications Business - Performance Overview
Mobile & Telecommunications Business - Performance Overview Despite weakness up to 3Q due to strong competition, 4Q saw a shift to telecommuting due to the effects of COVID-19. New acquisitions have been strong due to this special demand. FY2020 Net sales 3.873 million (1.9x year-on-year*) Result Se
Slide 17: Transitions in Number of Retained Lines
Mobile & Telecommunications Business - Transitions in Number of Retained Lines Number of retained lines as of end of June 2020 doubled from the previous year. (unit: 10 thousands) Number of retained 8.0 lines as of end of June 2020 63,000 6.0 Year-on-year: Number of approx. 2x retained lines as 4.0
Slide 18: Management Strategy for Fiscal Year Ending June 30, 2021
2. Management Strategy for Fiscal Year Ending June 30, 2021 Yasushi Kobayashi, President and CEO ・ Management Strategy ・ Current Status of Businesses and Growth Businesses ・ Agricultural Equipment ・ Oikura ・ Earnings Forecast for FY Ending June 2021 17
Slide 19: Management Strategy
Management Strategy DE MARKET ENTERPRISE 18
Slide 20: Market Enterprise Co., Ltd. - Origin of Name
Market Enterprise Co., Ltd. - Origin of Name What is Market Enterprise? MARKET + ENTERPRISE(adventurous creation) We are a company engaged in various businesses to aim to be an “Optimized trading company” based on second-Hand. 19
Slide 21: Expanding Target Customers and Business Model
Expanding Target Customers and Business Model From current FY2021 ● Target Customers Individuals residing in Japan (smart consumers) Up to previous FY2020 Domestic and Overseas A company that can offer various options Corporate Partners to the consumers seek to be smart. ● Business Model ● Target Cu
Slide 22: An Optimized Trading Company for the creation of Sustainable Society
Market Enterprise Group - Goals An Optimized Trading Company for the creation of Sustainable Society Establishing A company that can a secondHand offer various options circulation business to the consumers with Domestic and seek to be smart Overseas Corporate Partners Japan is a developed country wh
Slide 23: MarketEnterprise Group - Policy
MarketEnterprise Group - Policy The Sustainable Development Goals (SDGs) serve as principles for our management. 22
Slide 24: Connections between SDGs and Businesses
Connections between SDGs and Businesses Creation of Sustainable Society Promoting a second-hand Circulate used equipment lying Utilizing our knowledge and resources circulation culture dormant in Japan to domestically and to support the growth of small- and internationally. medium-sized businesses S
Slide 25: Market Enterprise Group - How We View DX
Market Enterprise Group - How We View DX DX (Digital Transformation) Enabling companies to respond to rapid changes in the business environment by using data and digital technologies to transform products, services, and business models based on customer and societal needs, as well as transforming th
Slide 26: Our Foundation for Supporting DX Promotion
Our Foundation for Supporting DX Promotion Our company was established on the foundation of web-based marketing. We are developing support for DX promotion based on the following three strengths: Web-based customer attraction Strong ability to attract visitors to website since establishment in 2006.
Slide 27: Market Enterprise Group - DX Promotion Support
Market Enterprise Group - DX Promotion Support Capable of comprehensive support, including trading markets, customer attraction support, and infrastructure development Provide Internet Platform Online marketing support infrastructure Providing a fair and safe place to trade Raising awareness and sup
Slide 28: Current Status of Businesses and Growth Businesses
Current Status of Businesses and Growth Businesses 27
Slide 29: Growth Stages by Business, previous year
Growth Stages by Business, previous year ・ Last year’s performance was driven by media, mobile & telecommunications (blue boxes) ・ Acquisition of necessary business resources through M&A (red boxes) Training/infrastructure Expansion of business Sales/profit growth period Stable growth period develop
Slide 30: Growth Stages by Business, Current
Growth Stages by Business, Current ・ This fiscal year, Second-Hand online business will drive performance ・ Among Second-Hand online businesses, Oikura and Agricultural equipment are expected to drive performance (blue boxes) Training/infrastructure Expansion of business Sales/profit growth period S
Slide 31: Agricultural Equipment
Agricultural Equipment DE MARKET ENTERPRISE 30
Slide 32: Transitions in agricultural equipment sales
Transitions in agricultural equipment sales Purchases and sales of agricultural equipment have been expanding steady Seasonality: 3Q (Jan.-Mar.) showed downward trend due to being the off-season (unit: millions of yen) 200 Transitions in agricultural equipment sales 188 159 149 Year-on-year 129 109
Slide 33: About ME Trading Co., Ltd.
About ME Trading Co., Ltd. Newly-established subsidiary ME Trading Co., Ltd. acquired agricultural equipment business from OHO TRADING CORP., an overseas exporter of used agricultural equipment (announced April 28, 2020) Track Record New Subsidiary ME Trading Co., Ltd. Domestic sales Overseas export
Slide 34: About UMM
About UMM Newly-established subsidiary UMM acquired JUM, one of Japan’s largest marketplace in used agricultural equipment (announced May 15, 2020) New Subsidiary UMM Co., Ltd. Location Chuo-ku, Tokyo Business Planning and management of marketplace for used Description items, focusing on agricultura
Slide 35: Agricultural Equipment: Effects of Acquiring (1)
Agricultural Equipment: Effects of Acquiring (1) For purchasing : direct purchasing from agricultural equipment dealers; For sales : exports through our own channels and our own marketplace Purchasing Sales On-site purchasing Sales through other companies’ EC (agriculturalers) sites Yahoo! Auction D
Slide 36: Agricultural Equipment: Effects of Acquiring (2)
Agricultural Equipment: Effects of Acquiring (2) Establishing one of the largest agricultural equipment purchase networks in Japan After acquisition Before acquisition Partner companies Partner companies 12 companies 12 companies agricultural equipment store members ME Trading Co., Ltd. ME Trading C
Slide 37: Agricultural Equipment: Future Strategies
Agricultural Equipment : Future Strategies Focus on expanding purchasing channels. Purchasing In addition to focusing on increasing purchasing through agricultural equipment dealers, we will work to build relationships with agricultural equipment manufacturers and JA (Japan Agricultural Co-operative
Slide 38: Oikura
Oikura ME MARKET ENTERPRISE 37
Slide 39: Oikura - Overview
Oikura - Overview A nationwide matching platform for buyers and sellers of second-hand products Sellers (general consumers) Find a store Purchase request Buyers (Oikura partners across Japan) through Website they want to sell Purchase request Second-Hand shops Pawn shops by phone Brand-name shops Je
Slide 40: Oikura - Previous Year's Measures (FY2020)
Oikura - Previous Year’s Measures (FY2020) In the previous fiscal year, we focused on solving the following issues: Customers sent to Partner store don’t understand partner stores unmotivated to buy how to use the system Improved matching logic through Partner store support team created system renew
Slide 41: Oikura - Transitions in Numbers of Purchase Requests
Oikura - Transitions in Numbers of Purchase Requests The number of purchase requests via Oikura has been rising since the business was acquired in February 2019. Transitions in numbers of purchase 30 requests (unit: thousands of cases) 26 Rising again after revamping 24 matching engine 21 20 15 13 1
Slide 42: Issues and Measures for Oikura this Fiscal Year (FY2021)
Issues and Measures for Oikura this Fiscal Year (FY2021) This fiscal year, we will begin working to resolve the following issues with an eye toward full-scale expansion. Number of purchase requests and offers Small number of varies depending on the location of partner purchase requests via Oikura st
Slide 43: Oikura - The measure to increase Purchase Requests
Oikura - The measure to increase Purchase Requests (1) Began full-scale cooperation with 22 purchasing sites From July 7, 2020 Increasing customers sent (2) Started partner collaboration programs Collaboration started June Full-scale cooperation with 22 Transport/moving companies Distribution/retail
Slide 44: Oikura - Region-Independent Matching System
Oikura - Region-Independent Matching System Number of purchase requests and offers varies depending on the location of partner store We plan to modify the system so that customers’ purchase requests receive offers from Second-Hand shops across the country. 43
Slide 45: Image of Oikura's Growth
Image of Oikura’s Growth Once this fiscal year’s measures are complete, start looking toward full-scale expansion through TV commercials and other forms of mass marketing Aim for 1 million purchase requests per year at the earliest possible date Aim for 1 million per year Number of purchase requests
Slide 46: FY Ending June 30, 2021 - Strategies by Segment
FY Ending June 30, 2021 - Strategies by Segment Segment Strategy Second-Hand for individuals: ・ improve ability to attract customers by further improving precision of online marketing ・ promote operational efficiency through digitization and standardization of business processes Second-Hand online S
Slide 47: Earnings Forecast for FY Ending June 2021
Earnings Forecast for FY Ending June 2021 46
Slide 48: Earnings Forecast for this Fiscal Year
Earnings Forecast for this Fiscal Year In FY ending June 30, 2021, we expect double-digit revenue and profit growth, and are forecasting record high earnings FY ended Jun 2020 FY ending Jun 2021 Unit: millions of yen Year-on-Year results forecast Net sales 10,904 13,500 to 14,500 +23.8% to +33.0% Op
Slide 49: Reference Materials
v4 DE Bites Reference Materials
Slide 50: Company Profile
Company Profile Name MarketEnterprise Co., Ltd. Established July 7, 2006 (business commenced November 1, 2004) Corp. Philosophy Developing businesses which build win-win relationships and remaining a group of individuals who enjoy business from the bottom of their hearts Capital 306,797,000 yen (as
Slide 51: Business Performance
Business Performance 14 consecutive years of sales growth since being established. Jul 2006 Aug 2016 Feb 2019 Launched kakuyasudenchi.com Launched “Private Buyers” Acquired “Oikura” (unit: hundred million yen) Launched “Rakuichi-Rakuza” flea Sep 2016 market Launched mobile & Aug 2019 Nov 2007 teleco
Slide 52: Business Portfolio
Business Portfolio Expanding areas of business from Second-Hand distribution business for individuals Second-Hand Online Business Media Business Mobile & Telecommunications For individuals Platform Telecom Business Platform (Acquired in May 2020) For corporate (Acquired in Aug 2019) (Acquired in Feb
Slide 53: List of Subsidiaries
Market Enterprise: List of Subsidiaries Second-Hand online business/Media business Second-Hand online business Investment Purchasing used agricultural equipment, domestic ME Trading Co., Ltd. Ratio and 100％ overseas sales and export Media business Investment Operating “Used machine market UMM”, one
Slide 54: Market Enterprise Group - Business Locations
Market Enterprise Group - Business Locations 16 locations in Japan, 1 location overseas MarketEnterprise Head Office and Kyobashi Branch ME Mobile Chuo-ku, Tokyo Sumida-ku, Tokyo Contact Centers and Customer Support Centers (2 locations) ME Trading Co., Ltd. (2 locations) Sumida-ku, Tokyo; Tokushima
Slide 55: Second-Hand Online Business: Purchasing Vertical Sites
Second-Hand Online Business: Purchasing Vertical Sites Securing approx. 40,000 purchase requests/month by Handling 30 categories of mainly niche products. 54
Slide 56: Second-Hand Online Business: Business Flow
Second-Hand Online Business: Business Flow ・ Both purchase and sales are available at multiple-channel. We can respond to customers’ various needs. ・ We have strengthened our support for the large corporate projects based on “C2B2C*”. Contact Center Purchasing Base Three channels based on product Ef
Slide 57: Second-Hand Online Business: Strengths
Second-Hand Online Business: Strengths Primary assessment at contact center Purchasing through 3 channels Proposing of purchase price/method Home delivery- In-store Door to door based purchasing purchasing purchasing Purchasing bases across the country Standardized operations Reduces psychological a
Slide 58: Media Business: Business Model and List of Operated Media
Media Business : Business Model and List of Operated Media From June 2017 ● Business Model Information media for iPhones, Wi-Fi and WiMAX From August 2019 Comparison media for discount SIM services Internet users From March 2018 Second-Hand- focused media to help understand the purchase, sale, Activ
Slide 59: Mobile & Telecommunications Business - Business Model
Mobile & Telecommunications Business - Business Model MNO* Business MVNO** Business General Customers Offering the following: Provide service UQ Communications ・ Communication Co., Ltd. bandwidth (SIM card) ・ Mobile routers Service Brand ・ Incidental services *”MNO” refers to a mobile communications
Slide 60: Examples of Activities Contributing to Society
Examples of Activities Contributing to Society Creating Quality Educational Regional Revitalization Opportunities Bringing Peace and Justice to All The Tokushima Contact Center was established in June The first such project of its kind in Japan, we are Working in partnership with investigative and p
Slide 61: Consolidated Statement of Income
Consolidated Statement of Income (unit: millions of yen) Jun 2016 Jun 2017 Jun 2018 Jun 2019 Jun 2020 Net sales 4,863 5,630 6,333 8,472 10,904 Cost of Sales 2,646 3,190 3,679 5,039 6,662 Gross profit 2,216 2,440 2,653 3,432 4,242 Selling, general, and administrative expenses 2,119 2,448 2,557 2,980
Slide 62: Consolidated Balance Sheet
Consolidated Balance Sheet (unit: millions of yen) Jun 2016 Jun 2017 Jun 2018 Jun 2019 Jun 2020 Jun 2016 Jun 2017 Jun 2018 Jun 2019 Jun 2020 Cash and deposits 744 825 938 1,166 1,255 Accounts payable-trade 0 1 57 176 370 Accounts receivable-trade 114 107 223 504 1,283 Loans payable 125 144 158 221 4
Slide 63: Forward-looking statements
Forward-looking statements in this document, such as forecasts of business performance, include forward-looking statements, assumptions and projections that are the basis of our plans. Actual business results may differ substantially due to various factors. For IR-Related Inquiries and Inquiries abo
Slide 64: An Optimized Trading Company for the creation of Sustainable Society
An Optimized Trading Company for the creation of Sustainable Society 63