Smaregi, Inc. · TSE:4431
Smaregi — 1H FY4/20 Earnings Presentation
36 slides from Smaregi's earnings presentation, December 2019
Slide 1: Results of Operations for the First Half of the Fiscal Year Ending April 30, 2020
Results of Operations for the First Half of the Fiscal Year Ending April 30, 2020 (15th Period) May 1 – October 31, 2019 Smaregi, Inc. Securities code: 4431
Slide 2: Contents
Contents 2 P3 About Smaregi P6 1H FY4/20 Financial Summary P18 Business Summary P28 Business Plan for FY4/20 P32 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: Smaregi Services and Support
Smaregi Services and Support About Smaregi 5 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 6: 1H FY4/20 Financial Summary
6 1H FY4/20 Financial Summary May 1 – October 31, 2019
Slide 7: 1H FY4/20 Financial Highlights
1H FY4/20 Financial Highlights 1H FY4/20 Financial Summary 7 • Increase in new contracts due to a rush by businesses to purchase POS systems capable of handling the tax reduction measures that accompanied the October 2019 consumption tax hike • First half sales of ¥1,825 million were 108.6% higher t
Slide 8: Financial Highlights
Financial Highlights 1H FY4/20 Financial Summary 8 1H FY4/20 sales of ¥1,825 million were 9.3% higher than the ¥1,669 million plan. Operating profit of ¥527 million were 26.1% above the ¥418 million plan. 1H FY4/19 1H FY4/20 1H FY4/20 1H FY4/20 YoY (Millions of yen) Results Results Plan % achieved (
Slide 9: Balance Sheet
Balance Sheet 1H FY4/20 Financial Summary 9 2Q FY4/20 2Q FY4/19 YoY 1Q FY4/20 QoQ (Millions of yen) (May - Oct. 2019) (May - Oct. 2018) change (May – Jul. 2019) change Current assets 3,332 746 446.5% 3,061 108.9% Cash and deposits 2,983 605 492.4% 2,747 108.6% Non-current assets 354 322 110.0% 328 1
Slide 10: Statement of Income (1H)
Statement of Income (1H) 1H FY4/20 Financial Summary 10 1H FY4/20 1H FY4/19 YoY (Millions of yen) % to sales (May - Oct. 2019) (May - Oct. 2018) change Net sales 1,825 100.0% 875 208.6% Cost of sales 827 45.3% 366 226.0% Gross profit 998 54.7% 509 196.1% SG&A expenses 470 25.8% 332 141.4% Operating
Slide 11: Changes in Net Sales, Operating Profit and Operating Margin
Changes in Net Sales, Operating Profit 1H FY4/20 Financial Summary 11 and Operating Margin In the first half, sales were 59.2% of the FY4/20 plan and operating profit was 82.1% of the plan. Expenditures are planned in the second half for the development of Smaregi 4.0 and for advertising activities.
Slide 12: Quarterly Statement of Income
Quarterly Statement of Income 1H FY4/20 Financial Summary 12 FY4/19 FY4/20 (Millions of yen) (May 2018 – Apr. 2019) (May – Oct. 2019) QoQ change 1Q 2Q 3Q 4Q 1Q 2Q Net sales 401 474 479 621 772 1,053 136.4% Cost of sales 164 201 190 269 343 483 140.6% Gross profit 236 272 289 351 428 569 133.1% SG&A
Slide 13: Quarterly Changes in Net Sales, Operating Profit and Operating Margin
Quarterly Changes in Net Sales, 1H FY4/20 Financial Summary 13 Operating Profit and Operating Margin Record-high operating margin of 30.2% due to higher sales backed by one-time demand associated with the reduced tax rate measures. (Millions of yen) Operating margin Net sales Operating profit 1,250
Slide 14: Sales Composition
Sales Composition 1H FY4/20 Financial Summary 14 The rush to purchase POS systems capable of handling the reduced tax rates pushed up sales of cloud service products as well as monthly fees for cloud services, a source of steady income. (Millions of yen) Monthly fees for cloud services Products for
Slide 15: YoY Changes in Operating Profit
YoY Changes in Operating Profit 1H FY4/20 Financial Summary 15 Higher sales (Millions of yen) • Growth in sales of fee-based contracts (higher pct. of stores under these contracts) • Growth of consistent sales (monthly fees) due to low attrition rate (461) SG&A expenses • Increase in POS system repl
Slide 16: Quarterly Changes in SG&A Expenses
Quarterly Changes in SG&A Expenses 1H FY4/20 Financial Summary 16 SG&A expenses were higher but the expense ratio decreased because of sales growth. (Millions of yen) SG&A expense Others Depreciation Rent Advertising Logistics cost Personnel ratio expenses expenses 300 50% 42.1% 251 219 219 57 40% 3
Slide 17: Growth in Number of Employees
Growth in Number of Employees 1H FY4/20 Financial Summary 17 Recruiting people of all ages →Current workforce average age: 32.6 Plan to continue hiring people at the current pace (No. of employees) →Average number of years employed: 2 years and 5 months 100 86 66 54 36 21 18 FY4/14 FY4/15 FY4/16 FY4
Slide 18: Business Summary
18 Business Summary
Slide 19: 1H FY4/20 Topics
1H FY4/20 Topics Business Summary 19 Oct. 2019 • Consumption tax hike along with reduced tax rates • Expansion of payment processing channels (addition of the following payment services) • Held the Smaregi Tech Talk conference for engineers Sep. 2019 • Seminar about the tax reduction measures for th
Slide 20: Topics - Summary of Reduced Tax Rate Measures (1)
Topics - Summary of Reduced Tax Rate Measures (1) Business Summary 20 Japan enacted transitional measures to reduce the negative impact of the October 2019 consumption tax hike. There was an enormous increase in August and September in applications to receive subsidies to cover part of the cost of P
Slide 21: Topics - Summary of Reduced Tax Rate Measures (2)
Topics - Summary of Reduced Tax Rate Measures (2) Business Summary 21 Sales of Cloud Service Products Cloud Service Monthly Fees Although a downturn is normally expected after a one-time Higher sales of products during the temporary surge in demand is increase in demand, the upward trend in sales of
Slide 22: Smaregi Cumulative Transaction Volume
Smaregi Cumulative Transaction Volume Business Summary 22 1H FY4/20 transactions processed by Smaregi products were 57.4% higher than one year earlier and fiscal year transactions are expected to be almost ¥1 trillion. (Billions of yen) Credit Cash Others 800 698.4 7.9% 600 501.5 22.4% 6.9% 410.6 40
Slide 23: Quarterly Growth of Stores and Fee-paying Stores
Quarterly Growth of Stores and Fee-paying Stores Business Summary 23 Pct. of fee-paying registered stores increased to 19.6% because of growth generated by the reduced tax rate measure one-time demand. Pct. of fee-paying 有料店舗率 Fee-paying 有料店舗 No-fee stores 無料店舗 stores stores 78,179 71,557 36.6% 66,8
Slide 24: Share of Active Stores
Share of Active Stores Business Summary 24 The share of active registered stores increased to 25.3% because of the larger number of fee-paying stores 39.5% 31.3% 28.6% 25.1% 25.3% 26.5% 22.1% 20.2% 20.8% 19.9% 19.8% 19.7% 19.9% 22.7% 22.6% 20.9% 19.1% 19.9% 19.4% 19.6% 19.8% Start of no-fee standard
Slide 25: Composition of Plan Categories with Fees
Composition of Plan Categories with Fees Business Summary 25 Net growth in all categories with the retail business plan consistently ranking first (No. of stores) (%) 15,000 Premium Premium Plus Food Business Retail Business Food Retail ¥4,000 monthly/store ¥7,000 monthly/store ¥10,000 monthly/store
Slide 26: Attrition Rate
Attrition Rate Business Summary 26 A low attrition rate is proof of the quality of our services. The attrition rate fell to a record-low 0.63% in 1H FY4/20. 5% Attrition rate* Attrition rate* Attrition rate* 4% FY4/18 FY4/19 1H FY4/20 0.90% 0.82% 0.63% 3% 2% 1.24% 1.15% 1.16% 1.07% 1.02% 0.99% 0.92%
Slide 27: Business Systems for Small and Midsize Companies
Business Systems for Small and Midsize Companies Business Summary 27 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 28: Business Plan for FY4/20
28 Business Plan for FY4/20
Slide 29: Highlights of the FY4/20 Business Plan
Highlights of the FY4/20 Business Plan Business Plan for FY4/20 29 • In September, the first half and fiscal year forecasts were raised because of the larger than expected increase in demand for products and services to comply with the reduced tax rate measures associated with the October 2019 consu
Slide 30: Highlights of the FY4/20 Business Plan
Highlights of the FY4/20 Business Plan Business Plan for FY4/20 30 Second half product sales are expected to be less than in the first half due to the end of the subsidy for expenses associated with complying with the reduced tax rate measures. But sales are expected to increase again with the suppo
Slide 31: Changes in Net Sales, Operating Profit and Operating Margin (Plan)
Changes in Net Sales, Operating Profit Business Plan for FY4/20 31 and Operating Margin (Plan) IPO proceeds are being used effectively for advertising expenses, workforce growth, a Smaregi upgrade, and other activities. Forecast a temporary decline in the operating margin because of higher SG&A expe
Slide 32: Medium-term Plan
32 Medium-term Plan
Slide 33: The Steadily Increasing Use of the Cloud
The Steadily Increasing Use of the Cloud Medium-term Plan 33 The public cloud market, including SaaS, is expected to continue 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 a
Slide 34: The Next Smaregi Version Is Under Development
The Next Smaregi Version Is Under Development Medium-term Plan 34 Smaregi is updated by launching new versions periodically in order to increase customer satisfaction and incorporate the most advanced technologies. The version under development will make Smaregi a platform centered on sales (POS) da
Slide 35: Forward-looking statements notice
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 36: Results of Operations for the First Half of the Fiscal Year Ending April 30, 2020
Results of Operations for the First Half of the Fiscal Year Ending April 30, 2020 May 1 – October 31, 2019 Smaregi, Inc.