Nihon M&a Center Holdings Inc. · TSE:2127
Nihon M&a Center — Q2 FY2022 Earnings Presentation
73 slides from Nihon M&a Center's earnings presentation, Oct 28, 2022
Slide 1: IR Report: Financial Results Report for Q2 FY2022
Celebration of our 30th anniversary - April 25, 2021 IR Report Financial Results Report for Q2 FY2022 Year to March 2023 TSE code ２１２７ The information included in this presentation, such as industry trends and analysis, future plans and forecasts, is based on data available at the time of release. A
Slide 2: Review of preventative measures taken in H1
Review of preventative measures taken in H1
Slide 3: Compliance activity engagement
Review of preventative measures taken in first half Compliance activity engagement Creation of Compliance Division １ CCO（Chief Compliance Officer） Yasuhiro Takeda, Senior Corporate Officer - Assumption of post 2 Head of Internal Audit Office - Also an external appointment Arranged various training c
Slide 4: Other measures and the impacts
Review of preventative measures taken in first half Other measures and the impacts Accounts receivable declined due to strict new receivables accounting criteria 6 End-Jun 2021 ¥4.6bn → End-Jun 2022 End-Sep 2021 ¥5.0bn → End-Sep 2022 ¥1.5bn ¥2.3bn Introduction of management meetings (end to senior m
Slide 5: Management strategy for corporate purpose
Management strategy for corporate purpose
Slide 6: To bring optimal M&A ever closer
Nihon M&A Center Holdings Purpose To bring optimal M＆A ever closer We connect thoughts Helping create a society in which M&A can be conducted at ease In Japan, then globally Optimal M&A ＝ Top level compliance, client satisfaction, quality Copyright©2022 Nihon M&A Center Holdings Inc. All rights rese
Slide 7: Introduction of corporate HQ groups
Management strategy for corporate purpose Introduction of 4 corporate HQ groups from 1 October 2022 Platform for higher execution quality Nihon M&A Center Inc. Quality Control Administration Strategy HQ Sales HQ HQ HQ Aim of organisation change New independent dedicated corporate Quality Control HQ
Slide 8: Quality Control HQ
Management strategy for corporate purpose Quality Control HQ ＝ Quality assurance of transactions from start to finish Quality Ensuring top level quality Control HQ Corporate advisor Optimal M&A Valuation and teaser Advisory agreement Information review Company analysis Kick-off meeting Letter of int
Slide 9: Q2 FY2022 Results Review・Dividends
Q2 FY2022 Results Review ・ Dividends
Slide 10: Q2 Results Review
Q2 Results Review Achievement rate against H1 results forecast Sales: １18.2% Ordinary profit: １10.7% FY2022 FY2022 H1 original % of H1 forecasts H1 results forecasts achieved Sales (¥mn) 20,099 17,000 118.2％ Profitability Ordinary profit (¥mn) 7,972 7,200 110.7％ Copyright©2022 Nihon M&A Center Holdi
Slide 11: Income Statement Key Data
Income Statement Key Data Recovering with acceleration of growth in sales and profit Sales １Q ¥9.07bn → ２Q ¥11.03bn （+21.6％） Ordinary profit １Q ¥3.58bn → ２Q ¥4.39bn （+22.7％） ＦＹ２０２2 FY2021 H1 results FY2022 FY2021 full-year H1 results YoY (restated) full-year forecasts results (restated) (¥mn、％) Tota
Slide 12: Quarterly Development of Ordinary Profit
Quarterly Development of Ordinary Profit Ordinary profit Exceeded H1 results forecast by 11% Quarterly ordinary profit Results relative to H1 forecast （¥mn） 4Q 18,000 3Q 2Q 1,220 （¥mn） 10.7％ above H1 forecast 16,000 1Q 1,813 14,000 1,463 4,102 FY2022 H1 result 12,000 1,703 3,757 4,232 7,972 10,000 3
Slide 13: Record of transactions closed
Record of transactions closed In Q2 there was a focus on closing more transactions +19.5％ QoQ （226→270） FY2019 FY2020 FY2021 FY2022 Full Full Full +19.5％ 2Q 1Q 2Q 3Q 4Q １Q 2Q ３Q 4Q １Q 2Q （Units: no. of transactions） Year Year Year Total number of transactions closed *1 1-1 （by no. of companies） 285
Slide 14: Record of M&A sales and number of new sell-side mandates
Record of M&A sales and number of new sell-side mandates Increase YoY in number of new sell-side mandates in the first half We are holding seminars throughout Japan on the occasion of the appointment of the new Head of Sales in the second half, helping to gain future sell-side mandates FY2019 FY2020
Slide 15: Balance Sheet Key Data
Balance Sheet Key Data Maintaining a healthy balance sheet Accounts receivable end-Sep 2021 ¥5.0bn➡ ¥2.25bn end-Sep 2022 End-Sep FY2021 Assets 2022 % Change (restated) （¥mn、％） Ⅰ Current assets 51,642 83.8% 1,666 49,975 Cash and deposits 47,381 76.9% 78 47,303 Accounts receivable 2,250 3.7% 790 1,460
Slide 16: Number of Employees
Number of Employees From June 2022 proactive recruitment including referrals Number of employees (consolidated) End of End of End of End of End-Sep FY2018 FY2019 FY2020 FY2021 2022 Number of people as of 4 Oct including newly hired and yet to start M&A 328 390 473 568 589 1,200 1,053 consultants, +2
Slide 17: Related Activities
Related Activities IIIANihon MaA Center HD
Slide 18: BATONZ and TPM IPO support drive other sales
Financial Performance of M&A sales and Other sales BＡＴＯＮＺ and ＴＰＭ IPO support drive other sales HoH comparison YoY comparison H1 FY2021 H1 FY2022 (restated) FY2021 FY2020 FY2019 (¥mn) Total % YoY Total % Total YoY Total YoY Total YoY M&A sales *1 19,372 100.0% 85.5% 22,656 100.0% 38,807 115.0% 33,74
Slide 19: TOKYO PRO Market IPO support activities
Update on related activities (1)-1 TOKYO PRO Market （TPM） IPO support activities High birth rate of listed companies Record ever level of IPOs TPM listing TPM IPOs （ IPO date ） 16 26 Aug Fitworks Co.,Ltd. ＜5037＞ 16 companies （As of 14 Oct 2022) 13 IT infrastructure design, construction, already list
Slide 20: Launch of new service for pre-IPO assessment called GO PUBLIC
Update on related activities (1)-2 TOKYO PRO Market （TPM） IPO support activities Launch of new service for pre-IPO assessment called GO PUBLIC （Since 31 May 2022） GO PUBLIC mandates At end-Sep 2022 31 GO PUBLIC mandates secured Positioning of GO PUBLIC IPO support J-Adviser IPO preparation GO PUBLIC
Slide 21: Online M&A matching by BATONZ
Update on related activities (2) Online M&A matching by BＡＴＯＮＺ Over 2,500 transactions completed ※ Source for ranking No.1 in cumulative number of members and No. 1 in cumulative transactions completed: Nihon Marketing Research Organization, Inc. regional market research 25 January 2022-11 March 202
Slide 22: Launch of M&A support system B MASS
Update on related activities (2)-2 Online M&A matching by BＡＴＯＮＺ Launch of M&A support system B MASS for financial institutions B MASS special features Total support for M&A activities of financial institutions closely engaged in regional business succession M&A Bespoke systems for financial Smooth
Slide 23: Overseas activities status
Overseas activities status Fast progress as pioneer in SME cross-border M&A Participation in international meeting of 2 completed mandates in Europe alliance members Emerging alliance founded in 2014 Centred in Europe, present in 23 locations Seller Buyer in 13 countries UK / Alliance members
Slide 24: Dividend per Share
Dividend per Share Raising dividend continuous pay-out ratio to 60% during mid-term management plan period (up to FY2026) Dividend forecast (¥) at start of year (¥) Dividend paid (¥) Pay-out ratio 26.00 Actual interim dividends 中間配当実績 Dividend Breakdown Dividend Breakdown (%) Actual annual dividends
Slide 25: Share Ownership
Share Ownership Foreign share ownership 48.0% March 31, 2022 September 30, 2022 Treasury stock Treasury stock Other Corporations 1.8％ Other Corporations 1.8％ 4.5％ 3.8％ Individuals Individuals 17.4％ 18.5％ Foreign Financial Foreign 50.1％ institutions 48.0％ Financial institutions 26.2％ 28.0％ （of which
Slide 26: Mid-term Management Plan
Mid-term Management Plan IIIANihon MaA Center HD
Slide 27: Start of new growth phase
Mid-term Management Plan Start of new growth phase Entering mid-term management plan (¥35bn ordinary profit in FY2026) (¥mn) 78,000 80,000 68,000 70,000 Consolidated Sales 59,000 +15％ 60,000 Consolidated ordinary profit 51,100 +15％ 50,000 40,401 42,000 +15％ 40,000 35,000 +21.7％ +4.0％ 30,000 30,500 +
Slide 28: To achieve our targets higher productivity is essential
Mid-term Management Plan To achieve our targets higher productivity is essential Recruitment Training of excellent Digitalisation people Work to increase productivity and reduce lead times through digital transformation Copyright©2022 Nihon M&A Center Holdings Inc. All rights reserved. 27
Slide 29: Human Resource Development Plan
Human Resource Development Plan A layered approach for thoroughness We aim to achieve fast results from the training layer For Senior executive officers and above. Senior Core to strengthened training plan 5 Goal Creating and implementing growth strategies executives for our company. Executive offsi
Slide 30: What we do for digital transformation
What we do for digital transformation Marketing M&A process Awareness Lead creation Newspapers, Introductions magazines Completion ceremony Definitive agreement Radio Collaborations Letter of intent Management Consultation Preparation Negotiation agreement Valuation Matching Advisory of teaser analy
Slide 31: What we do for digital transformation
What we do for digital transformation Raising awareness to discover Increase opportunities to new potential customers gain mandates with digital marketing ▼ Increase in mandates reported ▼TV Commercials Information on over 270 projects on our home page Making use of email circulars, online advertisi
Slide 32: What we do for digital transformation
What we do for digital transformation Digitalisation brings greater efficiency to every component of the M&A process Development of precision M&A systems utilising our enormous unrivalled database of historic transactions and the expertise of our highly experienced M&A specialists 【Examples】 V-Compa
Slide 33: What we do for digital transformation
What we do for digital transformation Additional examples of digital initiatives BATONZ MOON-X Utilising Salesforce Online M&A matching Alliance with MOON-X Uniformity in M&A transactions by BＡＴＯＮＺ whose business includes M&A and client information No. 1 in cumulative transactions and consulting for
Slide 34: Last three mid-term management targets reached early
(Reference) Last Three Mid-term Management Targets and The Trend in Ordinary Profit All three of the last mid-term management targets have been reached early As the industry leader in SME Ｍ＆Ａ we have displayed steady growth and established a unique position Period 3 mid-term target (¥mn) Consolidate
Slide 35: (Reference) 13-year Results Record
(Reference) 13-year Results Record 12th consecutive period of higher sales and profit (¥mn) 45,000 Sales Ordinary profit 40,401 40,000 34,795 35,000 32,009 30,000 Compound annual growth rate of ordinary profit 28,463 in the last 13 years ＝ 23.2％ 24,625 25,000 19,069 16,86４ 20,000 15,468 14,467 14,77
Slide 36: Dividend Payments and Market Capitalization
(Reference) Dividend Payments and Market Capitalization Aiming for sustained long-term growth Dividends and the pay-out ratio Market capitalization （From Apr 2017) (¥100mn) (¥mn) （百万円） （％） Dividends 5,949 14,000 6,000 60 60 Pay-out Ratio 12,000 5,500 55 5,000 4,626 10,000 52.0 4,500 4,239 50 8,000 3
Slide 37: Features
Features IIIANihon MaA Center HD
Slide 38: Collaboration agreement with Kobe University
Features （1） Collaboration agreement with Kobe University Corporate and academic institutions joint M&A initiative Broad collaboration agreement on SME M&A bridging corporate and academic worlds A first for Japan! Agreement for promotion of SME M&A fundamental research Establishment of SME M&A study
Slide 39: SME M&A Research and Education Centre (MAREC)
Features （1）-2 SME M&A Research and Education Centre （MAREC) Commemoration opening symposium ・Business succession guidance （2016） Held on 27 September 2022 ・SME M&A guidelines （2020） ・SME M&A promotion plan （2021） ・Registrations for institutional M&A support system （2021） Ministry of Economy, Trade
Slide 40: Alliance with Japan Post Group
Features （2） Alliance with Japan Post Group Use of post offices for business succession consulting Inauguration of business succession consulting service Business succession consulting initiated at a post office counter can then be referred to Batonz and Nihon M&A Center as partner firms with the ag
Slide 41: Recognition for internal digital transformation through Salesforce
Features （３） Recognition for internal digital transformation through use of Salesforce Winner in national championship Salesforce introduction to the present day 10th Salesforce user national championship Remarkable prize winner in large company category Jan 2014 Introduced to Nihon M&A Center Imple
Slide 42: Recognized by Guinness World Records as best-selling M&A advisory company
Features （4） Recognized by Guinness World Records as the best-selling M&A advisory company for 2 consecutive years Following on from last year, we again gained TM the GUINNESS WORLD RECORDS title ＜Details of GUNNESS WORLD RECORDS title＞ Official title Best-selling mergers and acquisitions advisory o
Slide 43: Number of Transactions Closed in Q2 (1/4)
Number of Transactions Closed in Q2 (1/4) 137 transactions closed, 270 by number of companies Selling company Acquiring company Industry classification Region Industry classification Region 1 Pipe contractor Kanto Pipe contractor Kanto 2 Electrical and telecoms contractor Hokkaido, Tohoku Pipe contr
Slide 44: Number of Transactions Closed in Q2 (2/4)
Number of Transactions Closed in Q2 (2/4) Selling company Acquiring company Industry classification Region Industry classification Region 30 Building construction Kyushu, Okinawa Construction materials wholesale Kyushu, Okinawa 31 Mold manufacturing Tokai, Hokuriku Electric components manufacture To
Slide 45: Number of Transactions Closed in Q2 (3/4)
Number of Transactions Closed in Q2 (3/4) Selling company Acquiring company Industry classification Region Industry classification Region 66 Metal parts wholesale Tokai, Hokuriku Construction materials wholesale Tokai, Hokuriku 67 Industrial waste management Kanto Industrial waste management Kanto 6
Slide 46: Number of Transactions Closed in Q2 (4/4)
Number of Transactions Closed in Q2 (4/4) Selling company Acquiring company Industry classification Region Industry classification Region 102 Chemicals wholesale Tokai, Hokuriku Chemicals wholesale Tokai, Hokuriku 103 Pharmacy / drugstore Chugoku, Shikoku Pharmacy / drugstore Chugoku, Shikoku 104 Ph
Slide 47: Company Overview
Company Overview IIIANihon Ma.A Center HD
Slide 48: 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 Becoming Japan’s top M&A intermediary company top global integrated M&A company TSE 1st Section listing in 2007 Transition
Slide 49: Nihon M&A Center 30 years
Nihon M&A Center 30 years Becoming a Rapid growth global leading Establishment IPO period M&A company period (run up) (hop) (skip) (jump) 10ｔｈ 20ｔｈ 30ｔｈ 40,000 Sales (￥mn) ＦＴＳＥ4Good Index Series October 2021 FTSE Blossom Japan Index June 2021 Transition to a holding 35,000 company structure Entry to
Slide 50: To Become the Top Global Integrated M&A Company
To Become the Top Global Integrated M&A Company Number of transactions closed Number of mandated projects, number of transactions closed Customer satisfaction ◆Nihon M&A center recognized Optimal matching and post-merger integration by GUINNESS WORLD RECORDS TM as the best-selling mergers and Broad
Slide 51: Corporate Profile (End-Sep 2022)
Corporate Profile (End-Sep 2022) Leading company in M&A intermediary services with a track record of over 7,000 completed transactions Company name Nihon M&A Center Holdings Inc. Established April 1991 *Transition to a holding company structure taken place in October 2021 Business outline Group mana
Slide 52: Corporate History
Corporate History ★We have been profitable since the second year of our history and have continuously paid a dividend Chairman Yasuhiro Wakebayashi and President Suguru Miyake worked at Olivetti Japan. They Prior to had responsibility for sales of computers nationally to accounting firms and regio
Slide 53: Business Model: A Platform for The M&A Market
Business Model A Platform for The M&A Market Top M&A information network Collaboration agreement figures as of end-Sep 2022 Network Information Accounting firms …1,050 Regional M&A centers Regional banks Information …Collaboration agreements with 95 (out of a total of 99) Information Shinkin banks …
Slide 54: 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 PMI Information Start of Company Negotiation /dialogue services project valuation with principals /closing Market research Pri
Slide 55: The Strengths of Nihon M&A Center
The Strengths of Nihon M&A Center Never let any competitor catch up Differentiation through service, superiority without competing on price 1. Strong systems for developing Very strong network for M&A information valuable information Regional financial institutions, accountants, large financial in
Slide 56: Our Workflow as An M&A Intermediary
Our Workflow as An M&A Intermediary Retainer fee Consultation Signing of advisory agreement Buyer Provision of materials Valuation Company analysis, sector research, selection of potential buyers Preparation of teaser (anonymous) Explanation of teaser (anonymous) Preparation of investment memorandum
Slide 57: Nihon M&A Center Inc. Organization Structure
56 Administration General Affairs Dept. Document Mgmt. Dept. Copyright©2022 Nihon M&A Center Holdings Inc. All rights reserved. HQ Human Resources Dept. Accounting Dept. Audit and Supervisory Committee Quality Control Corporate Advisory Office Nihon M&A Center Inc. Organization Structure CPAs/tax ac
Slide 58: Sales Headquarters divisional structure
Sales Headquarters divisional structure Sales Headquarters Corporate Growth Alliance Large Financial Industry Focus International Management Institutions Strategy Institutions Division Division Division Division Division Division Collaboration with Collaboration with Direct contact Mid-cap Industry
Slide 59: Human Resources Training
Human Resources Training Subsidy system for training of new recruits and further development of key employees Internal training External training Step up training Training for new recruits Regular training for each level Understanding of our company Analysis of case studies for Monthly training
Slide 60: Sustainability Initiatives (1)
Sustainability Initiatives （１） Environmental Social and Governance (ESG) practice Human rights Environmental policy Compliance Labor practices and Response to climate Risk management diversity change Governance Anti-corruption Social Health and safety Environment Consideration for
Slide 61: Skill matrix (Directors and Senior Corporate Officer)
Skill matrix 1 (Directors and Senior Corporate Officer at Nihon M&A Center Holdings Inc.) *As of 28 Oct 2022 Fund management HR development transformation Brand strategy Administration Sustainability Division head International Management HR practice Compliance Investment Accounting IOT, Digital exp
Slide 62: Skill matrix (Senior Corporate Officers)
Skill matrix 2 (Senior Corporate Officers at Nihon M&A Center Inc.) *As of 28 Oct 2022 International business Management strategy Investment banking Finance, Financing, Fund management HR development transformation Brand strategy Administration Sustainability Division head Compliance HR practice Acc
Slide 63: Sustainability Initiatives (2)
Sustainability Initiatives （2） Enabling the continual growth of society through friendly M&A support, strengthening of the foundations for corporate management and sustaining and increasing employment Our M&A intermediary activities provide economic benefits Resolving social problems 1 Number of com
Slide 64: What size sellers does Nihon M&A Center support?
(Reference) Transactions closed in the year to March 2022 What size sellers does Nihon M&A Center support ？ Calculated from deals closed in FY2021 Sales in a seller (¥mn) Number of employees in a seller More than 100 employees, 4.2％ More than 2,000 7.0％ 100 or less 8.2％ 5 employees or less, More tha
Slide 65: What is Unique about Nihon M&A Center Matching Service?
(Reference) Transactions closed in the year to March 2022 What is Unique about Nihon M&A Center Matching Service? We achieve optimal matching from our broad geographical and sector reach Industries of companies sold Nihon M&A Center matching results Same Different Total sector sector Other Construct
Slide 66: Business Environment
Business Environment IIIANihon MaA Center HD
Slide 67: Succession outside family has increased to over 65%
（Reference） 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
Slide 68: Distribution of the Age of Owners & Changes in Average Retirement Age
（Reference） Distribution of the Age of Owners & Changes in the Average Age of Retirement Increase in per centage of SME owners aged over 70 Divide between companies with and without succession plan (chart 1） Age distribution of SME owners (in 5-year categories) Changes in owners average retirement a
Slide 69: SME Owner Age in 2025
（Reference） SME Owner Age in 2025 There could be circa 600,000 companies to go out of business by 2025, Even though they are profitable. SME owner ages in 2025 (number of people) of which half have not yet got a successor Circa 1.27mn Companies And half these are profitable Under 70 Over 70 Circa 60
Slide 70: 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 M&A Number of companies Sales per M&A Employees companies with market Our position/initiative companies with no transaction no successor size successor New mark
Slide 71: Lastly
Lastly Ⅰ. Corporate ethos Corporate ethos Corporate aim Management priority on adherence to compliance and Assisting companies to continue and prosper through M&A corporate social responsibility Ⅱ. To investors Increase market value Return profits to shareholders We aim to increase market value thro
Slide 72: Table of Contents
Table of Contents Review of preventative measures taken in H1 P1～P3 Company Overview P46～P64 Management strategy for corporate purpose P4～P7 Our Vision P47 Q2 FY2022 Results Review・Dividends P8～P15 Nihon M&A Center 30 years P48 Q2 Results Review P9 To Become the Top Global Integrated M&A Company P49
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Nihon M&A Center Holdings — Q2 FY2022 Earnings Presentation on 6ix