Marketenterprise Co.ltd · TSE:3135
Marketenterprise Co.ltd — Q2 FY6/22 Earnings Presentation
56 slides from Marketenterprise Co.ltd's earnings presentation, Feb 14, 2022
Slide 1: Results of Operations for the Second Quarter of the Fiscal Year Ending June 30, 2022
Results of Operations for the Second Quarter of the Fiscal Year Ending June 30, 2022 February 14, 2022 MarketEnterprise Co., Ltd. Securities code: 3135
Slide 2: Agenda
1) 1H FY6/22 Results of Operations 2) Progress of Medium-term Management Plan by Business Segment 3) FY6/22 Forecasts Appendix: Company Overview 1
Slide 3: Agenda
1) 1H FY6/22 Results of Operations 2) Progress of Medium-term Management Plan by Business Segment 3) FY6/22 Forecasts Appendix: Company Overview 2
Slide 4: Executive Summary
Executive Summary Net sales and operating profit on the recovery track in the first half 1 Business performance bottomed out and the Medium-term Management Plan is moving ahead as planned ●Second-hand Online: Purchases were steady but profit declined due to inventory buildup 2 Second-hand Services f
Slide 5: Consolidated Income Statement Summary (1H)
Consolidated Income Statement Summary (1H) First half sales and earnings were consistent with the plan YoY change (Million yen) 1H FY6/21 1H FY6/22 Amount % Net sales 5,628 5,492 -135 -2.4% Operating profit 206 (204) -411 - Ordinary profit 195 (221) -416 - Profit attributable to owners of 93 (177) -
Slide 6: Consolidated Income Statement Components
Consolidated Income Statement Components Gross profit declined as inventories rose due to stepped up purchases (See below on purchases and inventory) Operating profit declined due to stepped up spending on advertising and sales promotion as well as on HR development. 1H FY6/21 results 1H FY6/22 resu
Slide 7: Quarterly Sales and Operating Profit
Quarterly Sales and Operating Profit Business performance bottomed out as the 2Q sales and profit recovered from the previous quarter. (Million yen) (Million yen) Net sales Operating profit 3,500 200 3,000 2,870 2,885 2,758 2,756 163 2,607 150 2,490 2,500 100 2,000 50 42 0 1,500 (50) (44) (39) 1,000
Slide 8: Progress of Medium-term Management Plan by Business Segment
1) 1H FY6/22 Results of Operations 2) Progress of Medium-term Management Plan by Business Segment 3) FY6/22 Forecasts Appendix: Company Overview 7
Slide 9: Second-hand Online Business
Second-hand Online Business 8
Slide 10: Second-hand Online Business Quarterly Performance
Second-hand Online Business Quarterly Performance 2Q net sales and segment profit were higher than 1Q Net sales Segment profit (loss) (Million yen) (Million yen) 2,000 1,747 1,665 1,690 1,636 37 47 41 1,476 1,472 31 39 325 32 250 228 257 249 294 245 237 200 1,000 150 123 121 1,360 1,399 1,384 1,311
Slide 11: Second-hand Online Business
Second-hand Online Business 1) Second-hand Services for Individuals 2) Machinery (Agricultural Equipment) 3) Oikura 10
Slide 12: Purchase Request Trends
Progress in Second-hand Services for Individuals: Purchase Request Trends More purchase requests The number of purchase requests remained high. (Number of requests) 90,000 89,000 89,000 80,000 82,000 82,000 81,000 77,000 70,000 0 1Q FY6/21 2Q FY6/21 3Q FY6/21 4Q FY6/21 1Q FY6/22 2Q FY6/22 11
Slide 13: Purchase Amount Trends
Progress in Second-hand Services for Individuals: Increase in Purchase Amount Trends purchasing Purchase amount continued to be high accompanied by increase in purchase requests. capabilities (Million yen) 750 734 727 700 691 686 650 644 646 600 0 1Q FY6/21 2Q FY6/21 3Q FY6/21 4Q FY6/21 1Q FY6/22 2Q
Slide 14: Second-hand Services for Individuals Quarterly Sales and Inventory Levels
Second-hand Services for Individuals Quarterly Sales and Inventory Levels Business performance bottomed out as sales were up from the previous quarter. Purchases continued to be steady; built-up inventory in preparation for the demand period. Net sales Inventory (Million yen) (Million yen) 1,600 300
Slide 15: Started Purchases from Seniors
Progress in Second-hand Services for Individuals: Started Purchases from Seniors More purchase requests Opened a dedicated web page in September 2021: Stepped up purchases from seniors. 14
Slide 16: Number of Purchase Requests from Seniors
Progress in Second-hand Services for Individuals: Number of Purchase Requests from Seniors 買取能力 More purchase 増強 requests Smooth launch of service in September Sep. 2021 Oct. 2021 Nov. 2021 Dec. 2021 15
Slide 17: Second-hand Online Business
Second-hand Online Business 1) Second-hand Services for Individuals 2) Machinery (Agricultural Equipment) 3) Oikura 16
Slide 18: Establishment of Kita-Kanto Purchasing Base
Progress in Machinery (Agricultural Equipment): Establishment of Kita-Kanto Purchasing Base 買取 Located in Yuki City, Ibaraki. Aim to increase the capacity for buying agricultural equipment in eastern Japan and shipping equipment for cross-border e-commerce. Opening ceremony (October 1, 2021) Inside
Slide 19: Machinery Purchase Amount Trends
Progress in Machinery (Agricultural Equipment): Purchase Amount Trends 買取 Purchases recovered to the level in 2Q FY6/21 (Million yen) 250 225 223 200 180 171 154 150 135 100 50 0 1Q FY6/21 2Q FY6/21 3Q FY6/21 4Q FY6/21 1Q FY6/22 2Q FY6/22 18
Slide 20: Machinery Quarterly Sales and Inventory Levels
Machinery (Agricultural Equipment) Quarterly Sales and Inventory Levels 2Q cross-border e-commerce and domestic sales were higher Increased inventory for the demand period (February-March) before the busy farming season. Net sales Inventory (Million yen) (Million yen) 350 250 325 300 294 200 257 249
Slide 21: Second-hand Online Business
Second-hand Online Business 1) Second-hand Services for Individuals 2) Machinery (Agricultural Equipment) 3) Oikura 20
Slide 22: Oikura: Collaboration with Local Public Bodies
Progress of the Oikura Platform: Collaboration with Local Public Bodies In January 2022, we started a demonstration experiment in cooperation with Sumida-ku, Tokyo to reduce the volume of oversized garbage. 21
Slide 23: Oikura: Number of Incentive-based Partner Stores
Progress of the Oikura Platform: Number of Incentive-based Partner Stores 顧客基盤の 強化 Number of incentive-based stores started to increase after touching bottom in August. Expect to see the number of stores to reach the 1,000 store level in 3Q. (Number of stores) FY6/21 FY6/22 1,100 1,050 1,000 950 900
Slide 24: Media Business
Media Business 23
Slide 25: Quarterly Monthly Average Media Page Views
Media Business: Quarterly Monthly Average Media Page Views 2Q monthly average media page views increased to a record high due to contribution of communication media. (10,000 page views) 1,600 1,382 1,400 1,284 1,237 1,188 1,200 1,081 1,021 963 1,000 856 874 900 800 600 400 200 0 1Q FY6/20 2Q FY6/20
Slide 26: Media Business Results
Media Business Results Net sales recovered to the previous 2Q level. Segment profit was up year-on-year and on a recovery track. (Million yen) Net sales (Million yen) Segment profit (loss) 180 169 160 100 95 140 134 135 90 126 78 115 80 120 99 70 67 100 61 60 80 50 44 60 40 30 29 40 20 20 10 0 0 1Q
Slide 27: Media Business: Sales Composition
Media Business: Sales Composition Sales from directing customers to internal services and external sources are on a recovery trend. (Million yen) Sales from directing Sales from directing customers customers to internal to external sources 200 services +8.1% vs. 2H FY6/21 +13.9% 100 vs. 2H FY6/21 2.
Slide 28: Mobile & Telecommunications Business
Mobile & Telecommunications Business 27
Slide 29: Mobile & Telecommunications Strategies: Revise the Profit Structure
Mobile & Telecommunications Business Strategies: Revise the Profit Structure (Excerpt from the Medium-term Management Plan Presentation Material) Shift from one-time sales to recurring revenue to build a steadily larger base for future earnings* WiMAX2+ WiMAX 5G Sales incentive (one time): Small Sal
Slide 30: New Service Subscriptions
Progress in Mobile & Telecommunications Business: New Service Subscriptions New service subscriptions centered on WiMAX 5G increasing steadily. (Number of subscriptions) 8,000 7,000 6,000 5,000 2,600 4,000 7,200 500 3,000 5,800 2,000 3,900 3,500 3,400 3,400 1,000 0 0 1Q FY6/21 2Q FY6/21 3Q FY6/21 4Q
Slide 31: Mobile & Telecommunications Business Results
Mobile & Telecommunications Business Results Both net sales and segment profit clearly bottomed out and increased YoY Net sales Segment profit (loss) (Million yen) (Million yen) 1,135 1,086 1,025 1000 953 909 917 325 325 233 120 186 138 149 100 80 75 500 57 60 761 767 771 767 792 809 40 38 22 20 0 0
Slide 32: Progress in Future Earnings
Progress in Mobile & Telecommunications Business: Future Earnings Future earnings are expected to increase steadily as planned on the back of increasing recurring-revenue 5G subscriptions. (Million yen) 600 558 500 400 318 300 200 100 0 4Q FY6/21 2Q FY6/22 31
Slide 33: FY6/22 Forecasts
1) 1H FY6/22 Results of Operations 2) Progress of Medium-term Management Plan by Business Segment 3) FY6/22 Forecasts Appendix: Company Overview 32
Slide 34: FY6/22 Forecasts
FY6/22 Forecasts No revisions to the consolidated forecast (Million yen) FY6/21 results FY6/22 forecasts YoY change Net sales 10,875 12,000 +10.3% Operating profit 54 (400) - Ordinary profit 32 (405) - Profit attributable to owners of parent (40) (440) - 33
Slide 35: FY6/22 Business Strategies by Segment
FY6/22 Business Strategies by Segment Promote the strategies targeted in the Medium-term Management Plan Segment Strategies Second-hand services for Individuals: ・More customers by using more methods to attract purchase requests and covering more product categories ・Increase purchasing capabilities
Slide 36: Medium-term Performance Target
Medium-term Performance Target (Excerpt from the Medium-term Management Plan Presentation Material) Aim to accomplish the earnings plan through sales growth supported primarily by the second-hand online business. Also plan to build a stable profit structure by increasing the volume of future earning
Slide 37: Appendix: Company Overview
1) 1H FY6/22 Results of Operations 2) Progress of Medium-term Management Plan by Business Segment 3) FY6/22 Forecasts Appendix: Company Overview 36
Slide 38: Business Summary: Second-hand Online Business
Business Summary Second-hand Online Business 1) Second-hand Services for Individuals 2) Machinery (Agricultural Equipment) 3) Oikura 37
Slide 39: Second-hand Market for Individuals (1)
Second-hand Market for Individuals (1) Japan’s second-hand market continues to grow (Billion yen) 3,500.0 3,500 3,000.0 3,000 2,416.9 2,500 2,358.5 2,188.0 1,993.2 2,000 1,774.3 1,596.6 1,651.7 1,491.6 1,500 1,359.4 1,259.0 1,127.4 1,144.3 1,000 500 0 Source: Recycle Tsushin 38
Slide 40: Second-hand Market for Individuals (2)
Second-hand Market for Individuals (2) Potential second-hand market: The value of household hidden assets is estimated at roughly 44 trillion yen, of which 65% is owned by seniors (Age 50+). Breakdown of household Value of household hidden assets by age group hidden assets in Japan*3 About ¥44 trill
Slide 41: Second-hand Market for Individuals (3)
Second-hand Market for Individuals (3) The share of financial assets owned by individuals in the 60+ age group have almost doubled in the past 30 years. In 2020, individuals in this age group accounted for 68.5% of the total personal financial assets. The figure for individuals in the 50+ age group
Slide 42: Business Summary: Second-hand Online Business
Business Summary Second-hand Online Business 1) Second-hand Services for Individuals 2) Machinery (Agricultural Equipment) 3) Oikura 41
Slide 43: Agricultural Equipment Market (1)
Agricultural Equipment Market (1) The actual size of the used agricultural equipment market in Japan is estimated to be about ¥10 billion, indicating that there is still much potential for more growth. Automobiles Agricultural Equipment Annual sales in Japan Annual sales in Japan ¥320 billion *1 ¥10
Slide 44: Agricultural Equipment Market (2)
Agricultural Equipment Market (2) Farmers are aging as their average age has reached 67.8 years. As a result, the social issue concerning the disposal of farming equipment will persist as farmers abandon farms. Agricultural Workers in Japan and Average Age (Age) 68.0 67.8 67.5 67.1 67.0 66.5 66.2 66
Slide 45: Machinery (Agricultural Equipment) Business Flow
Machinery (Agricultural Equipment) Business Flow Utilizing the know-how cultivated through second-hand services for individuals, we have established an integrated business flow from the purchase of used machinery (agricultural equipment) to domestic sales and exports. Web media for purchase Contact
Slide 46: Machinery (Agricultural Equipment) Performance
Machinery (Agricultural Equipment) Performance Steady growth (Million yen) 1,200 1,061 1,000 800 697 600 415 400 234 200 37 0 FY6/17 FY6/18 FY6/19 FY6/20 FY6/21 Cross-border e-commerce Domestic sales 45
Slide 47: Made in Japan Used Machinery (Agricultural Equipment)
Made in Japan Used Machinery (Agricultural Equipment) As Japanese tractors used in Japan are in good condition and rarely break down even after 20 to 30 years use, they have strong demand in Europe, the Middle East and Asia. 46
Slide 48: Machinery (Agricultural Equipment) Exports
Machinery (Agricultural Equipment) Exports We directly export used machinery (agricultural equipment) to over 80 countries. Even now we are expanding export channels. ・Netherlands ・Romania ・India ・Albania ・Spain ・Malaysia ・Armenia ・Egypt ・Philippines ・Belgium ・Saudi Arabia ・Vietnam ・France ・Yemen ・T
Slide 49: Social Significance of Machinery (Agricultural Equipment)
Social Significance of Machinery (Agricultural Equipment) There are countries where no agricultural machinery is available. These countries have to rely on manual labor. Therefore, strengthening exports of Japanese machinery (agricultural equipment) will help increase the world’s agricultural output
Slide 50: Second-hand Online Business
Second-hand Online Business 1) Second-hand Services for Individuals 2) Machinery (Agricultural Equipment) 3) Oikura 49
Slide 51: Oikura Business Flow and Award History
Oikura Business Flow and Award History A platform has a bulk quote feature that allows a seller to receive quotes from second-hand brick-and-mortar shops A seller can request estimates from multiple reuse shops just by registering the information of the reuse item for sale. Use of internet to submit
Slide 52: CSR Activities
CSR Activities 51
Slide 53: Musical Instrument Donation for Hometown Tax Payment (1)
Musical Instrument Donation for Hometown Tax Payment (1) • The Hometown Tax Payment System is a new method for paying taxes. This system can be used for donations of musical instruments that are no longer needed to schools, bands and other organizations, via a local government. The appraised value o
Slide 54: Musical Instrument Donation for Hometown Tax Payment (2)
Musical Instrument Donation for Hometown Tax Payment (2) 19 local governments have been participated in this program as of February 2022. 53
Slide 55: Forward-looking Statements and IR Contact
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 ab
Slide 56: To be an Optimized Trading Company for the creation of Sustainable Society
To be an Optimized Trading Company for the creation of Sustainable Society