Hennge K.k. · TSE:4475
Hennge K.k — Q1 FY09/2022 Earnings Presentation
65 slides from Hennge K.k's earnings presentation, Feb 10, 2022
Slide 1: Q1 FY09/2022 Consolidated Financial Results
Note: This is a translation of part of the original Japanese version and is provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. Q1 FY09/2022 Consolidated Financial Results HENNGE K.K. (
Slide 2: Table of Contents
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Table of Contents 1. Q1 FY09/2022 Consolidated Financial Results 2. Progress of FY09/2022 Full-year Forecasts 3. Growth Strategy 4. Appendix Corporate Overview Total Addressable Market Others 5. Past Materials 2
Slide 3: Q1 FY09/2022 Consolidated Financial Results (Financial Results)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Q1 FY09/2022 Consolidated Financial Results (Financial Results) 3
Slide 4: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 3 months accumulated comparison) (unit: million yen) 1. The net sales rose by 15.8% YoY to 1.31B yen. The sales of HENNGE One rose by 19.5% YoY to 1.20B yen. 2. The total SG&A increase
Slide 5: Quarterly Trend of Net Sales
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Quarterly Trend of Net Sales ■ Professional service and others ■ HENNGE One (unit: million yen) 5
Slide 6: Net Sales
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Net Sales (YoY, 3 months accumulated comparison) The net sales increased by 15.8% YoY to 1.31B yen. The sales of HENNGE One, our key driver of the growth, grew by 19.5%. (YoY, 3 mons accum. comparison) ■ Professional service and othe
Slide 7: Quarterly Trend of Gross Profit
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Quarterly Trend of Gross Profit ● Gross profit margin ■ Gross profit (unit: million yen) 7
Slide 8: Gross Profit
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Gross Profit (YoY, 3 months accumulated comparison) The gross profit increased by 0.17B yen YoY to 1.11B yen. The gross profit margin increased by 1.3pt YoY to 84.1%, and remains high. (YoY, 3 mons accum. comparison) ● Gross profit margi
Slide 9: SG&A: Structure of Operating Expenses
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Structure of Operating Expenses (YoY, 3 months accumulated comparison) SG&A to sales ratio 69.4% (unit: million yen) (SG&A to sales ratio) YoY SG&A to sales ratio 65.1% Other SG&A increased mainly due to Other SG&A 18.3% (+0.0pt) enh
Slide 10: SG&A: Structure of Operating Expenses (QoQ)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Structure of Operating Expenses (QoQ comparison of Q4 FY09/2021 & Q1 FY09/2022) (unit: million yen) QoQ (unit: million yen) Other SG&A decreased mainly due to lower recruitment costs incurred. Recruitment activities were actively mov
Slide 11: Quarterly Trend of Net Sales and Operating Expenses
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Quarterly Trend of Net Sales and Operating Expenses ● Net Sales ■ Other SG&A ■ Advertising expenses ■ Business consignment and staffing expenses ■ Personnel expenses ■ R&D expenses ■ Cost of Sales (unit: million yen) 11
Slide 12: Number of Employees
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Number of Employees While recruitment is progressing well, the number of employees did not increase. COVID-19 restrictions still prevents our prospective HENNGE One’s R&D employees from overseas to join the company. ■ Others ■ Profes
Slide 13: Q1 FY09/2022 Consolidated Financial Results (Business Activities)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Q1 FY09/2022 Consolidated Financial Results (Business Activities) 13
Slide 14: Business Highlights
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Business Highlights ● Advertisements and events ○ Hosting an entirely new online event HENNGE Rocket Pitch (Nov. to Dec. 2021) ○ Hosting, sponsoring and participating in various events (Oct. to Dec. 2021) ● Others ○ Launching new ser
Slide 15: Advertisements and Events
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Advertisements and Events “HENNGE Rocket Pitch”, an entirely new online event was hosted during Q1. Over 50 sessions, within 3 minutes each, introducing HENNGE One, our new business and others, such as solutions to the pain points fo
Slide 16: New Features for HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results New Features for HENNGE One HENNGE One’s new features providing more secure file transfer, smartphone access security, and e-mail protection from targeted attacks were launched in Oct 2021. HENNGE Secure Download Recipient Sender Emai
Slide 17: Renewal of Service Lineup for HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Renewal of Service Lineup for HENNGE One Service lineups were renewed from Oct 2021. Approaching varieties of customers with high value-added suite plans, as well as setting up single-function plans for light users. Set plan Descript
Slide 18: Q1 FY09/2022 Consolidated Financial Results (KPI Results)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Q1 FY09/2022 Consolidated Financial Results (KPI Results) 18
Slide 19: HENNGE One KPI Highlights
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One KPI Highlights (Progress in 3 months, compared to the end of FY09/2021) # of user companies (N) # of contracted users ARR 2,000 companies 2.17M users 4.86B yen increased by 48 companies increased by 32K users increased by
Slide 20: HENNGE One KPI
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of FY09/2021) # of contracted companies # of contracted users ARR YoY +14.2% YoY +11.9% YoY +18.4% (as of 2021-12-31) (as of 2021-12-31) (as of 2021-12-31) (unit: companies) (unit: users) (uni
Slide 21: HENNGE One Gross Revenue Churn Rate
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One Gross Revenue Churn Rate Continuously maintained a stable and sustainable growth model with a low churn rate. Average monthly churn rate over the past 12 months: 0.24% Theoretical average lifetime: over 35 years (as of 202
Slide 22: HENNGE One Contracted Companies & Users
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One Contracted Companies & Users QoQ +32K users ● HENNGE One Contracted Users (K users) ■ HENNGE One Contracted Users (companies) QoQ +48 companies FY19 FY20 FY21 FY22 22
Slide 23: HENNGE One ARR & ARPU
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One ARR & ARPU QoQ +22 yen per user ● HENNGE One ARPU (yen per user) ■ HENNGE One ARR (millions of yen) QoQ +0.12B yen FY19 FY20 FY21 FY22 23
Slide 24: Progress of FY09/2022 Full-year Forecasts
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Progress of FY09/2022 Full-year Forecasts 24
Slide 25: Our Policy of FY2022
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Our Policy of FY2022 Accelerate mid-term growth in HENNGE One ARR by aggressively investing in marketing and capture growth opportunities in the new normal. HENNGE One Business Achieve the sustained annual growth of more than 20% for
Slide 26: Overview of FY2022 Forecasts
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Overview of FY2022 Forecasts (unit: million yen) 1. The sales of HENNGE One, our key driver of growth, is expected to grow by 21.8% YoY. The sales of Professional service and others is expected to decrease by 2.7% YoY. 2. The net sal
Slide 27: FY2022 Forecasts of Sales by Business
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results FY2022 Forecasts of Sales by Business The progress rate of HENNGE One’s sales was at 22.7% against the full-year forecast. HENNGE One Professional service and others (unit: million yen) (unit: million yen) ■ Actual ■ Forecast 27
Slide 28: FY2022 Forecasts of Operating Expenses
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results FY2022 Forecasts of Operating Expenses The progress rate of advertising expenses was at 13.3% against the full-year forecast. The progress rate of operating expenses excl. advertising expenses was at 22.0% against the full-year forec
Slide 29: Growth Strategy
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Growth Strategy 29
Slide 30: Vision
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Vision We want to deliver the power of technology as many people as we can. Liberation of Technology テクノロジーの解放 30
Slide 31: Maximize LTV
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Maximize LTV Our growth strategy is to maximize LTV. Currently, Y and r are already in a high number, therefore our focus is to maximize ARR. LTV = ARR × Y × r Y = [Average contract duration in years] r = [Gross profit rate] ARR = N ×
Slide 32: Maximize ARR
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Maximize ARR ARR ＝ N × n × ARPU maximize N maximize n N = # of contracted n = Average # of contracted companies users per contracted company Maximize ● Increase our sales force ● Extend our presence in a wider ARR ● ● Target large co
Slide 33: Progress of Our Growth Strategy
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Progress of Our Growth Strategy (HENNGE One) Aim to accelerate ARR growth by focusing on increasing N in the short term while increasing ARPU in the mid/long term. 33
Slide 34: Growth Strategy on and After FY2022
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Growth Strategy on and After FY2022 By FY2025, having HENNGE One ARR growth at mid-20% in CAGR, we aim to exceed 10B yen for HENNGE One ARR. Focus on increasing the number of contracted companies (N) and raising ARPU (unit : million
Slide 35: HENNGE One, Supporting Customers' Change
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One, Supporting Customers’ Change Supporting customers’ SaaS utilization and continuously liberate technology. Messaging Security - SSO - Device control - Sending large files - Receiving large files - Behavior Protection - Sandb
Slide 36: HENNGE One as a SaaS Platform
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One as a SaaS Platform HENNGE One will grow as the global SaaS market expands. Currently integrates with and more Over 200 Cloud services 36
Slide 37: Appendix (Corporate Overview)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Appendix (Corporate Overview) 37
Slide 38: Corporate Profile
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Corporate Profile Company name : HENNGE K.K. Executives : Kazuhiro Ogura Representative Director & Chief Executive Officer Kazuaki Miyamoto Representative Director & Executive Vice President Yoshiki Nagatome Director & Executive Vice Pr
Slide 39: Locations
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Locations Japan Taiwan Nagoya branch office 2016/8 Tokyo Head office Osaka branch office 2015/6 Fukuoka branch office 2018/8 39
Slide 40: Vision: Liberation of Technology
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Vision We want to deliver the power of technology as many people as we can. Liberation of Technology テクノロジーの解放 40
Slide 41: History
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results History Our business domain is ever-changing, but our will remains steadfast. Linux server eCRM software HENNGE One IoT as a Service Establishment management software HDE Customers Care (f.k.a. HDE mail service) HENNGE Workstyle HDE
Slide 42: Sales Structure by Business
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Sales Structure by Business 91.7% of the net sales comes from HENNGE One business. (as of Q1 FY2022) 42
Slide 43: HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One Identity as a Services (IDaaS) Provide centralized authentication to various SaaS-es, with Single Sign On (SSO) technology ID Federation Access Control Customizable policy Administrator Various cloud services Microsoft 365
Slide 44: HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One Support cloud usage with a balanced convenience and security through IdP features, which provide IP restrictions, device certificate, secure browser, and multi-factor authentication, and E-Mail security features, which prov
Slide 45: HENNGE One Solid Customer Base
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One Solid Customer Base HENNGE One is used by 2,000 customers in various industries, and has 2.17 million users. Average number of contracted users per contracted company is approximately 1,085. (as of 2021-12-31) Breakdown by
Slide 46: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Appendix (Total Addressable Market) 46
Slide 47: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Cloud Adoption Rate in Japan Cloud Adoption Rate in Japan has increased by 4.0pt to 22% from 2020. (Reference: Press release ‘Average Cloud Computing Adoption Rate in Japan’ in June 2021 by Gartner, Inc. URL of the original release i
Slide 48: Change in the Market Environment
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Change in the Market Environment The number of companies using cloud services in Japan is expected to rapidly increase due to the impact of COVID-19. Domestic Companies HENNGE Great East Japan Temporary cloud usage Approach early ado
Slide 49: Number of Companies by Employee Size in Japan
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Number of Companies by Employee Size in Japan There is a huge potential market because cloud adoption will continue to accelerate. Customers’ demands # of employees 日本国内における従業員数規模別企業数 # of companies by each employee scale 5000 - 621
Slide 50: Regional Split in the number of companies
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Regional Split in the number of companies Japan has number of metro areas other than Tokyo. Our focus is to expand the business not only in Tokyo but also within other metro areas, such as Nagoya, Osaka, Fukuoka, and others. Tokyo Os
Slide 51: Appendix (Others)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Appendix (Others) 51
Slide 52: Diversity and Inclusion
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Diversity and Inclusion Focusing our efforts on the Global Internship Program (GIP) to not only provide career development opportunities for the most talented candidates from all over the world, but also to be the precedent organizati
Slide 53: Business Investments and New Business Development
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Business Investments and New Business Development We are approaching business fields adjacent to current businesses through both business investment and new business development, along with R&D activities in current businesses. Busine
Slide 54: Past Materials (New Services, etc.)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Past Materials (New Services, etc.) 54
Slide 55: HENNGE One Business
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One Business License lineup for HENNGE One announced in June 2019 (From June 2019 to Sep 2021) ※ New contracts taken into place after Oct 2021 will apply new licence lineup which was announced in Aug 2021. 55
Slide 56: HENNGE One Business
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE One Business HENNGE One for Education (Since July 2020) In response to GIGA School Program advocated by the Japanese Ministry of Education, Culture, Sports, Science and Technology (MEXT), HENNGE One for Education has become av
Slide 57: Professional Service and Others Business
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Professional Service and Others Business SumaMachi (Since Aug 2020) SumaMachi is a communication service that enables smooth two-way communication with community residents to municipalities nationwide. (Previously named as “CHROMO”,
Slide 58: Past Materials (Marketing)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Past Materials (Marketing) 58
Slide 59: Marketing Activities for HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Marketing Activities for HENNGE One Conducting various activities to acquire customers (N) and improve ARPU in the mid-term. meeting Unreached potential customers event event Customer engagement Large-scale event Marketing campaign (
Slide 60: HENNGE NOW! and its Marketing Campaigns
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results HENNGE NOW! and its Marketing Campaigns Held the large-scale digital event HENNGE NOW! in Q2 FY2021. Spent approximately 490 million yen on advertising expenses and aggressively carried out the advertising activities such as TV comme
Slide 61: Past Materials (Our Surveys, etc.)
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Past Materials (Our Surveys, etc.) 61
Slide 62: SaaS usage survey to our customers
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results SaaS usage survey to our customers (on Nov 2019) On average, our customers are using 7 cloud services per company, and 24% of them are using 10 cloud services. (# of companies) (# of cloud services) Survey overview: SaaS usage survey
Slide 63: Glossary
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Glossary ARR (Annual Recurring Revenue) refers to revenue, normalized on an annual basis, that a company expects to receive from its customers for providing them with products or services of subscription-based model. ARPU (Average Re
Slide 64: Disclaimer
HENNGE K.K. (4475:TYO) Q1 FY09/2022 Consolidated Financial Results Disclaimer This document has been prepared by HENNGE K.K. (the “Company”) solely for information purpose. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation
Slide 65: HENNGE
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