Smaregi, Inc. · TSE:4431
Smaregi — Q3 FY4/22 Earnings Presentation
39 slides from Smaregi's earnings presentation, March 2022
Slide 1: Results of Operations for the First Nine Months of FY Ending April 2022
Results of Operations for the First Nine Months of the Fiscal Year Ending April 30, 2022 (17th Period) May 1, 2021 ‐ January 31, 2022 Smaregi, Inc. Securities code: 4431
Slide 2: Contents
Contents 2 P3 Impact of COVID-19 P4 1Q-3Q FY4/22 Financial Summary P17 Business Summary P25 Progress of Medium-term Management Plan P30 Medium term Management Plan P34 Appendix
Slide 3: Impact of COVID-19
Impact of COVID-19 3 Steady increase in the number of business transactions due to the latest needs and marketing Effect on Number of Transactions Effect on Number of Meetings with Prospective Customers Although the number of transactions increased sharply in reaction to the Online business meetings
Slide 4: May 1, 2021 - Jan 31, 2022
4 May 1, 2021 - Jan 31, 2022 May 1, 2021 - Jan 31, 2022 Consolidated financial results effective from the 3Q of FY4/22
Slide 5: Notice: Scope of consolidation of Royal Gate, Inc.
5 NOTICE The scope of consolidation of Royal Gate, Inc. as a subsidiary. • Consolidated balance sheet only. • The income statement through 3Q of FY4/22 does not include Royal Gate's results. The deemed acquisition date of Royal Gate, Inc. is December 31, 2021 which makes the difference with the quar
Slide 6: Correction of Consolidated Earnings Forecasts
Correction of Consolidated Earnings Forecasts 1Q-3Q FY4/22 Financial Summary 6 Gain on negative goodwill is confirmed due to Royal Gate becoming a subsidiary. Non-Consolidated Financial Results Forecast for the Year Ending April 2022 (May 1, 2021 - April 30, 2022) (Millions of yen) Net Sales Operati
Slide 7: 1Q-3Q FY4/22 Financial Highlights
Consolidated 1Q-3Q FY4/22 Financial Highlights 1Q-3Q FY4/22 Financial Summary 7 • Net sales increased 26.2% YoY to 2,910 million yen due to a steady increase in the number of fee-paying stores operating even during the COVID-19 pandemic. • Operating profit increased 5.3% YoY to 620 million yen and o
Slide 8: Financial Highlights
Consolidated Financial Highlights 1Q-3Q FY4/22 Financial Summary 8 Net sales increased 26.2% YoY despite the negative effects of the COVID-19 pandemic. Operating profit increased 5.3% YoY, partly due to S&M investments. Operating profit ratio reached 118.8%, while S&M investments based on the medium
Slide 9: Balance Sheet
Consolidated Balance Sheet 1Q-3Q FY4/22 Financial Summary 9 Cash and deposits and merchandise (current assets) and accounts payable (current liabilities) increased due to business expansion and the consolidation of the company. 1Q-3Q FY4/22 1Q-3Q FY4/21 YoY 1H FY4/22 QoQ (Millions of yen) results re
Slide 10: Statement of Income
Consolidated Statement of Income 1Q-3Q FY4/22 Financial Summary 10 Despite seasonal factors and the prolonged shortage of semiconductors, net sales remained almost flat QoQ, SG&A expenses increased by 5.8% QoQ and operating profit decreased by 5.3% QoQ due to increased investment in S&M and recruitm
Slide 11: Changes in Net Sales, Operating Profit and Operating Margin
Consolidated Changes in Net Sales, 1Q-3Q FY4/22 Financial Summary 11 Operating Profit and Operating Margin The performance in third quarter was generally as planned. The sales progress rate in 3Q YTD FY4/22 was 70.6% of the fiscal year forecast. The operating margin declined 4.1% YoY to 21.3% due to
Slide 12: Quarterly Changes in Net Sales, Operating Profit and Operating Margin
Consolidated Quarterly Changes in Net Sales, 1Q-3Q FY4/22 Financial Summary 12 Operating Profit and Operating Margin Net sales declined slightly from 2Q due to the prolonged shortage of semiconductors but increased by 19.6% YoY. Aggressive investment in S&M and recruitment to achieve the medium-term
Slide 13: Changes in Sales Composition
Consolidated Changes in Sales Composition 1Q-3Q FY4/22 Financial Summary 13 Subscription sales (monthly fees for cloud services, etc.) increased sharply by 27.7% YoY. Equipment sales (products for cloud services, etc.) declined due to a shortage of leading printers and other products. 1Q-3Q FY4/22 1
Slide 14: Annual Recurring Revenue (Subscription Sales)
Non-consolidated Annual Recurring Revenue (Subscription Sales) 1Q-3Q FY4/22 Financial Summary 14 The number of fee-paying stores is increasing even during the COVID-19 pandemic. ARR increased 28.8% from one year earlier. ARR at end of quarter ARR 2,500 YoY +28.8% ¥ 2.47billion * (Millions of yen) Qo
Slide 15: Analysis of Changes in Operating Profit (YoY)
Consolidated Analysis of Changes in Operating Profit (YoY) 1Q-3Q FY4/22 Financial Summary 15 (Millions of yen) Higher sales (217) • Number of fee based contracts increased Higher cost of sales • Growth of consistent sales (monthly fees) due to low (126) churn rate Personnel 605 expenses (5) (233) Ef
Slide 16: Quarterly Changes in SG&A Expenses
Consolidated Quarterly Changes in SG&A Expenses 1Q-3Q FY4/22 Financial Summary 16 The SG&A ratio increased to 46.0% due to investments in marketing, advertising, and recruiting in accordance with the medium term management plan. (Millions of yen) SG&A expense ratio Personnel expenses Advertising exp
Slide 17: Quarterly Changes in Advertising Expenses
Consolidated Quarterly Changes in Advertising expenses 1Q-3Q FY4/22 Financial Summary 17 In addition to measures to expand awareness through mass marketing, such as TV commercials, we are also strengthening lead acquisition measures to convert awareness into potential sales leads. 114 (Millions of y
Slide 18: Growth in Number of Employees
Consolidated Growth in Number of Employees 1Q-3Q FY4/22 Financial Summary 18 Strengthened recruitment in a wide range of positions. Aggressive recruitment activities to break out of the hiring stagnation during the COVID-19 pandemic. Increased by 58.0% YoY. Average age: 35.6 years old. 200 196 36 Ro
Slide 19: Business Summary
19 Business Summary
Slide 20: Q3 FY4/22 Topics
Q3 FY4/22 Topics Business Summary 20 Jan. 2022 • New features and plans released for Smaregi TimeCard • Major renewal of recruitment page Dec. 2021 • Announced acquisition of Royal Gate, Inc. as a subsidiary through share purchase. • Announced selection of new market segment "Growth Market" Nov. 202
Slide 21: Composition of Plan Categories with Fees
Composition of plan Categories with Fees Business Summary 21 Despite the prolonged COVID-19 pandemic, customer base continued to expand thanks to strengthened touchpoints such as introductory support, etc. Fee-paying store ratio increased by 1.6 points YoY to 21.4% 106,961 103,476 100,192 96,313 92,
Slide 22: Share of Active Stores (Including Stores Paying No Fee)
Share of Active Stores (Including Stores Paying No Fee) Business Summary 22 Focus on continuous improvement of customer value through onboarding, etc. by the Customer Success Team. Active Stores ratio is steadily increasing YoY +1.6 points to 26.5%. Number of Active Stores 28,348 39.5% 31.3% 25.3% 2
Slide 23: Composition of Plan Categories with Fees
Composition of Plan Categories with Fees Business Summary 23 The "Premium Plus" plan drove stable growth. The number of fee-paying stores grew 24.8% YoY to 22,931. (No. of stores) % 25,000 Premium Premium Plus Food Business Retail Business Food Retail ¥4,400 monthly / store ¥7,700 monthly / store ¥1
Slide 24: Churn Rate
Churn Rate Business Summary 24 The 3Q FY4/22 average churn rate is 0.63%. It remains stable at the low level of 0.59% during 3Q YTD FY4/22. The low rate even during the COVID-19 pandemic is the result of continuous measures to improve the customer experience (better customer services, etc.). 5% Chur
Slide 25: Average Revenue per Account and User (ARPA/ARPU)
Average Revenue per Account and user (ARPA/ARPU) Business Summary 25 Slow but steady growth and stable ARPA and ARPU Average Revenue Per Account (ARPA) Average Revenue Per User (ARPU) = Average of revenue for each contract ID (only for plans with fees) = Average of revenue for each store (only for p
Slide 26: Monthly Fees by Quarter of Start of Services
Monthly Fees by Quarter of Start of Services Business Summary 26 Achieving Sustainable Growth in the SaaS sector even during the COVID-19 pandemic because of a net increase in MRR due to new contracts and the continuous use of services by customers due to a low churn rate. (Millions of yen) 150 Impa
Slide 27: Progress of Medium-term Management Plan
27 Progress of Medium-term Management Plan
Slide 28: The goal of the medium-term plan is an ARR of ¥5 billion
Medium-term Management Plan progress Progress of Medium-term Management Plan 28 Aggressively strengthen business investment for three years starting from FY4/22, to realize a continuous high-growth cycle, while being prepared for a decrease in profits. Aggressive advertising and other business inves
Slide 29: Activities to Accomplish Goals of the Medium-term Management Plan
Activities to Accomplish Goals of Progress of Medium-term Management Plan 29 the Medium-term Management Plan In FY4/22, marketing, advertising, recruiting and other expenditures will increase with the goal of rapidly increasing subscription sales in order to accomplish the goals of the medium-term m
Slide 30: The Smaregi App Market Progress
The Smaregi App Market Progress Progress of Medium-term Management Plan 30 Publicly released apps increased 11.3% QoQ. Extension and collaboration apps specialized for unexplored industries are also emerging, aimed at expanding the user base. Smaregi App Market is gaining momentum as a platform wher
Slide 31: ARR Growth
ARR Growth Progress of Medium-term Management Plan 31 ARR in the third quarter was in line with the FY4/22 plan of ¥2.7 billion as the first step toward the goal of doubling ARR. Plan (Millions of yen) 5,000 5,000 Plan 3,670 4,000 Plan 3,000 2,700 2,000 2,471 1,000 2,077 0 FY4/21 FY4/22 FY4/23 FY4/2
Slide 32: Medium-term Management Plan
32 Medium-term Management Plan
Slide 33: Long-term Vision and Medium-term Management Plan
Medium-term Management Plan Medium-term Management Plan 33 Celebrating our 10th anniversary. Looking ahead to more growth in the next 10 years! The Smaregi Long-term Vision and Medium-term Management Plan https://corp.smaregi.jp/en/ir/management/vision2031.php
Slide 34: Appendix
34 Appendix
Slide 35: Business Activities
Business Activities Appendix 35 High-performance Faster, cheaper, and more convenient cloud-based POS systems Smaregi has achieved faster installation times and cheaper prices by providing POS systems through a SaaS model, which also offers Smaregi provides platform for performing many significant b
Slide 36: Business Activities
Business Activities Appendix 36 Software development Other Platform service EC Online store for store peripherals POS Payment Sales data SES IT resource development Attendance data HR CVC Venture capital investment Expansion of the Smaregi economic zone
Slide 37: The Smaregi Marketing Strategy
The Smaregi Marketing Strategy Appendix 37 Our goal is a 38% share of the targeted 770,000 stores 14% of the market Big businesses in Japan The POS system market will remain competitive rather than dominated by a single (at least 40 stores) company because a company that monopolizes this market woul
Slide 38: Forward-looking statements disclaimer
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 39: Results of Operations for the First Nine Months of FY Ending April 2022
Results of Operations for the First Nine Months of the Fiscal Ending April 30, 2022 May 1, 2021 – January 31, 2022 Smaregi, Inc.