Slide 1: Results of Operations for the Fiscal Year Ended April 30, 2020
Results of Operations for the Fiscal Year Ended April 30, 2020 (15th Period) May 1, 2019 – April 30, 2020 Smaregi, Inc. Securities code: 4431
Slide 2: Contents
Contents 2 P3 About Smaregi P7 FY4/20 Financial Summary P22 Business Summary P37 Business Plan for FY4/21 P45 Medium-term Plan
Slide 3: About Smaregi
3 About Smaregi
Slide 4: Business Profile
Business Profile About Smaregi 4 High-performance cloud-based POS systems Smaregi is a supplier of innovative cloud-based POS systems with capabilities that go far beyond those of conventional POS systems. Smaregi products analyze sales, perform sophisticated inventory management tasks and have many
Slide 5: The Smaregi Marketing Strategy
The Smaregi Marketing Strategy About Smaregi 5 Our goal is a 30% to 40% share of the targeted 770,000 stores Big businesses The POS system market will remain competitive rather than dominated (at least 40 stores) by a single company because a company that monopolizes this market 100,000 stores would
Slide 6: Smaregi Services and Support
Smaregi Services and Support About Smaregi 6 Smaregi provides a complete lineup of services and support for companies in the retail, restaurant and service sectors. Our goal is to help create more pleasant and productive workplaces by using the capabilities of Smaregi to make a broad range of busine
Slide 7: FY4/20 Financial Summary
7 FY4/20 Financial Summary May 1, 2019 – April 30, 2020
Slide 8: FY4/20 Financial Highlights
FY4/20 Financial Highlights FY4/20 Financial Summary 8 • Sales increased 64.4% to ¥3,249 million, 5.5% higher than the fiscal year forecast following the upward revision of this forecast. • Operating profit increased 74.0% to ¥751 million because of one-time demand associated with the start of tax r
Slide 9: Financial Highlights
Financial Highlights FY4/20 Financial Summary 9 Sales of ¥3,249 million were 5.5% higher than the fiscal year forecast following the upward revision. Operating profit was ¥751 million, 16.9% higher than the upwardly revised forecast despite expenses for relocating the Tokyo office and expenditures f
Slide 10: Balance Sheet
Balance Sheet FY4/20 Financial Summary 10 The equity ratio remained high at 81.9% even though there were expenses for relocating the Tokyo office and inventories were increased as a response to COVID-19. (Millions of yen) FY4/20 FY4/19 YoY 1Q-3Q FY4/20 QoQ (May 2019 - Apr. 2020) (May 2018 - Apr. 201
Slide 11: Statement of Income
Statement of Income FY4/20 Financial Summary 11 FY4/20 FY4/19 YoY (Millions of yen) % to sales (May 2019 - Apr. 2020) (May 2018 - Apr. 2019) change Net sales 3,249 100.0% 1,976 164.4% Cost of sales 1,329 40.9% 825 161.0% Gross profit 1,920 59.1% 1,150 166.9% SG&A expenses 1,168 36.0% 718 162.6% Oper
Slide 12: Cash Flows
Cash Flows FY4/20 Financial Summary 12 Operating cash flows increased because of higher earnings and cash used in investing activities increased because of the relocation of the Tokyo office. FY4/19 YoY change (Millions of yen) FY4/20 (May 2018 - Apr. 2019) (May 2019 - Apr. 2020) IPO proceeds Amount
Slide 13: Changes in Net Sales, Operating Profit and Operating Margin
Changes in Net Sales, Operating Profit FY4/20 Financial Summary 13 and Operating Margin Sales increased 64.4% primarily because of strong sales of products associated with one-time demand due to the tax reduction measures. Operating profit increased 74.0% despite expenses for the Tokyo office reloca
Slide 14: Quarterly Statement of Income
Quarterly Statement of Income FY4/20 Financial Summary 14 Fourth quarter sales were 2.7% higher than in the third quarter despite the negative impact of COVID-19 in the fourth quarter. Fourth quarter SG&A expenses were high as planned because of Smaregi 4, TV commercials and the Tokyo office relocat
Slide 15: Quarterly Changes in Net Sales, Operating Profit and Operating Margin
Quarterly Changes in Net Sales, FY4/20 Financial Summary 15 Operating Profit and Operating Margin First and second quarter sales and earnings benefited from one-time demand due to the tax reduction measures. In the fourth quarter, the operating margin temporarily fell to 5.8% because of expenditures
Slide 16: Changes in Sales Composition
Changes in Sales Composition FY4/20 Financial Summary 16 In the first and second quarters, cloud product sales and monthly fees increased because of one-time demand due to the tax reduction measures. In the fourth quarter, monthly fees were down 0.2% from the third quarter as stores temporarily clos
Slide 17: Analysis of Changes in Operating Profit (YoY)
Analysis of Changes in Operating Profit (YoY) FY4/20 Financial Summary 17 Higher sales (Millions of yen) • More new contracts because of one-time demand due to the tax reduction measures • Higher sales of products because of one-time SG&A expenses demand due to the tax reduction measures (503) • Gro
Slide 18: Changes in SG&A Expenses
Changes in SG&A Expenses FY4/20 Financial Summary 18 Personnel expenses, advertising expenses and rent were high because there were expenditures in fourth quarter as planned for Smaregi 4, TV commercials and the Tokyo office relocation. The SG&A expense ratio increased to 35.9% as this ratio rose to
Slide 19: Growth in Number of Employees
Growth in Number of Employees FY4/20 Financial Summary 19 Recruiting people of all ages →Current workforce average age: 32.3 Recruiting is progressing as planned; plan to continue hiring people while monitoring changes in the economic environment →Average number of years employed: 2 years and 3 mont
Slide 20: Main Shareholders
Main Shareholders FY4/20 Financial Summary 20 Ownership by Japanese and overseas institutional investors increased. 2.9% 5.3% 2.1% Institutional Trust banks 5.7% investors 9.3% Foreign companies, etc. 5.5% 14.6% 1.6% Financial instruments firms 5.5% General corporations Individuals, others 83.9% 78.
Slide 21: Dividend Policy
Dividend Policy FY4/20 Financial Summary 21 The basic policy of Smaregi is to pay a dividend that reflects results of operations and the current financial condition. As Smaregi is still in the growth phase of its operations, there has been no dividend since the company’s inception in order to retain
Slide 22: Business Summary
22 Business Summary
Slide 23: FY4/20 Topics
FY4/20 Topics Business Summary 23 Apr. 2020 • Started airing TV commercials • Relocated the Tokyo showroom/office, closed the Yokohama and Ikebukuro showrooms • Temporarily closed showrooms due to the state of emergency (April 7 to May 8) Feb. 2020 • Reduced or suspended monthly fees due to the impa
Slide 24: New Product Development Activities in FY4/20
New Product Development Activities in FY4/20 Business Summary 24 There were 111 updates during FY4/20 in order to respond to requests for users, add functions, and for other improvements and progress. 55Updates 20 36 Updates Updates Smaregi Smaregi Waiter Smaregi Time Card • Electronic duty-free pro
Slide 25: Smaregi 4 Progress
Smaregi 4 Progress Business Summary 25 Activities are proceeding as planned for both development activities and locating partners. Plan to start selling Smaregi 4 on schedule in the summer of 2020!0年夏頃 リリース Progress with the Development of Smaregi 4 Partners for the Development of Smaregi 4 Sales to
Slide 26: Smaregi's Responses to the COVID-19 Crisis
Smaregi’s Responses to the COVID-19 Crisis Business Summary 26 Activities for employees Will continue after the During state of During state of crisis Shorter core time emergency Teleworking emergency Personal holidays A shorter core working time allows people to Initially, only some people switched
Slide 27: Effects of COVID-19
Effects of COVID-19 Business Summary 27 Monthly fee for cloud and other services Some stores have temporarily shut down because of sharp declines in business volume and sales as the COVID-19 crisis caused economic activity to plummet. (Based on Smaregi POS data) Business Volume Pct. of Stores Tempor
Slide 28: Effects of COVID-19
Effects of COVID-19 Business Summary 28 Sales of Cloud Service Products (Initial Cost) Showrooms were closed for about 30 days in April and May. Showroom meetings were replaced with Number of Customer Sales Contracts and YoY Change online customer meetings and other steps were taken to continue sale
Slide 29: Smaregi Cumulative Transaction Volume
Smaregi Cumulative Transaction Volume Business Summary 29 FY4/20 transaction volume increased 20% despite the negative impact of COVID-19 on store sales. Credit and other transactions increased and cash transactions decreased as a share of total volume. (Billions of yen) Credit Cash Others 1,000 841
Slide 30: Composition of Plan Categories with Fees
Composition of Plan Categories with Fees Business Summary 30 The number of temporary store closings increased because of COVID-19. The number of fee-paying stores has briefly declined but is expected to start recovering as economic activity resumes. Based on preliminary data (announced June 3, 2020)
Slide 31: Share of Active Stores (Including Stores Paying No Fee)
Share of Active Stores (Including Stores Paying No Fee) Business Summary 31 The active store ratio decreased by 1.7 pct. points because of the rapid increase in the number of stores that closed temporarily because of COVID-19. 39.5% 31.3% 25.1% 25.3% 28.6% 23.4% 26.5% 22.1% 25.1% 20.2% 20.8% 19.9% 1
Slide 32: Composition of Plan Categories with Fees
Composition of Plan Categories with Fees Business Summary 32 There was a rapid increase in the number of stores that temporarily closed or downgraded to a lower plan category because of COVID-19. Fees in the food business and retail business decreased. (No. of stores) （%） 15,000 Premium Premium Plus
Slide 33: Attrition Rate
Attrition Rate Business Summary 33 The big increases in temporarily closed stores and plan downgrades caused by COVID-19 raised the monthly recurring revenue attrition rate to 1.7%. The average attrition rate in FY4/20 remained low at 0.73%. 5% Attrition Attrition Attrition rate* rate* rate* 4% FY4/
Slide 34: ARPU/ARPPU
ARPU/ARPPU Business Summary 34 The ARPPU decreased because of the rapid increase in the number of fee-paying stores caused by higher demand associated with the tax reduction measures. But the ARPPU is now slowly recovering. ARPU ARPPU ¥7,877 ¥1,502 May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Ma
Slide 35: Monthly Fees by Month of Start of Services
Monthly Fees by Month of Start of Services Business Summary 35 Negative churn is continuing even though the negative effects of COVID-19 are beginning to appear. (Millions of yen) 125 The effects of temporary store closings and plan downgrades due to COVID-19 are beginning to appear. 100 75 50 25 0
Slide 36: Business Systems for Small and Midsize Companies
Business Systems for Small and Midsize Companies Business Summary 36 Sales of the Smaregi Time Card are strong in part because of social trends in Japan that include the increasing diversity of how people are employed and do their jobs. Smaregi Time Card is raising sales per customer and contributin
Slide 37: Business Plan for FY4/21
37 Business Plan for FY4/21
Slide 38: Highlights of the FY4/21 Plan
Highlights of the FY4/21 Plan Business Plan for FY4/21 38 •The business climate remains extremely uncertain because of the impact of COVID-19 on the Japanese and global economy • Demand for Smaregi products and services remains strong; expect a return to sustained growth starting in the first quarte
Slide 39: Highlights of the FY4/21 Plan
Highlights of the FY4/21 Plan Business Plan for FY4/21 39 Planning on no significant changes in sales and operating profit. However, after deducting the contribution of the one-time upturn in FY4/20 due to the tax reduction measures, the FY4/21 plan is effectively a continuation of growth as in prio
Slide 40: Changes in Net Sales, Operating Profit and Operating Margin (Plan)
Changes in Net Sales, Operating Profit Business Plan for FY4/21 40 and Operating Margin (Plan) No significant changes in sales and operating profit, but effectively a continuation of growth as in prior years after deducting the contribution of the one-time upturn in FY4/20 due to the tax reduction m
Slide 41: Plan for Quarterly Sales and Sales Composition
Plan for Quarterly Sales and Sales Composition Business Plan for FY4/21 41 Forecast a temporary sales slowdown following the one-time upturn in sales in FY4/20 due to the tax reduction measures and because of the severe impact of COVID-19. But sales are expected to stop decreasing in the first quart
Slide 42: Impact of COVID-19 and Smaregi Responses
Impact of COVID-19 and Smaregi Responses Business Plan for FY4/21 42 The COVID-19 crisis has severely impacted the real economy. For the time being, the number of stores that close or shut down temporarily is likely to continue increasing and the number of new stores is expected to decrease. Transac
Slide 43: Impact of COVID-19 and Smaregi Responses
Impact of COVID-19 and Smaregi Responses Business Plan for FY4/21 43 Activities during and after the crisis As COVID-19 exerts an increasing amount of pressure on the retail sector, businesses are quickly shifting emphasis to new formats such as takeout, delivery and e-commerce sales. For Smaregi, s
Slide 44: Impact of COVID-19 and Smaregi Responses
Impact of COVID-19 and Smaregi Responses Business Plan for FY4/21 44 Strategic goals Strengthen the showroom strategy Open showrooms Negative factors 1 Open low-cost showrooms mainly in large cities by using data analysis and area marketing KPI in 10 cities over the next two years • Decreasing numbe
Slide 45: Medium-term Plan
45 Medium-term Plan
Slide 46: The Steadily Increasing Use of the Cloud
The Steadily Increasing Use of the Cloud Medium-term Plan 46 The public cloud market, including SaaS, continues to grow. Due to the higher name recognition and reputation for trust following the February 2019 stock listing, there are more large orders and steady growth in orders that are not related
Slide 47: Smaregi 4 Sales to Begin in the Summer of 2020
Smaregi 4 - Smaregi 4 Sales to Begin in the Summer of 2020 Medium-term Plan 47 A platform centered on sales (POS) data Smaregi will achieve the full potential of POS data utilization Expansion/utilization The first platform service that Establish ties with developers to create many utilizes POS data
Slide 48: Focusing on Data Utilization and the Digital Transformation
Focusing on Data Utilization and the Digital Transformation Medium-term Plan 48 Our goal is to become Japan’s largest holder of sales (POS) data and use big data analytical research to grow worldwide in the data utilization field. Ticket vending Artificial machines intelligence Use sales data to e-c
Slide 49: Business plans, forecasts and other forward-looking statements in this presentation are based on the
Business plans, forecasts and other forward-looking statements in this presentation are based on the reasonable judgments of Smaregi based on information that was currently available. Actual results of operations may be different because these statements include uncertainties involving market condit
Slide 50: Results of Operations for the Fiscal Year Ended April 30, 2020
Results of Operations for the Fiscal Year Ended April 30, 2020 May 1, 2019 – April 30, 2020 Smaregi, Inc.