Hennge K.k. · TSE:4475
Hennge K.k — FY2024 Earnings Presentation
71 slides from Hennge K.k's earnings presentation, Nov 8, 2024
Slide 1: FY09/2024 Full-year 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. FY09/2024 Full-year Consolidated Financial Results HENNGE
Slide 2: Table of Contents
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Table of Contents 1. FY09/2024 Full-year Consolidated Financial Results 2. FY09/2025 Full-year Forecast 3. Growth Strategy 4. Appendix Corporate Overview Total Addressable Market Others 5. Past Materials 2
Slide 3: FY09/2024 Full-year Consolidated Financial Results
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results FY09/2024 Full-year Consolidated Financial Results (Financial Results) 3
Slide 4: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 12 months accumulated comparison) FY2024 Initial FY2023 FY2024 YoY YoY (%) Progress (%) (unit: JPY million) Forecast Net sales 6,776 8,365 +1,589 +23.5% 8,316 100.6% (HEN
Slide 5: Quarterly Trend of Net Sales
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Quarterly Trend of Net Sales ■ Professional service and others ■ HENNGE One (unit: JPY million) FY2021 FY2022 FY2023 FY2024 5
Slide 6: Net Sales
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Net Sales (YoY, 12 months accumulated comparison) Net sales for HENNGE One business, our growth driver, shows a steady progress YoY. Total YoY +23.5% ■ Professional service and others ■ HENNGE One (+ JPY 1.59B) (unit: J
Slide 7: Quarterly Trend of Gross Profit
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Quarterly Trend of Gross Profit ● Gross profit margin ■ Gross profit (unit: JPY million) FY2021 FY2022 FY2023 FY2024 7
Slide 8: Gross Profit
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Gross Profit (YoY, 12 months accumulated comparison) Gross profit margin increased despite the increases in the infrastructure costs for HENNGE One, mainly from the exchange rate fluctuations and the security enhancements.
Slide 9: Structure of Operating Expenses
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Structure of Operating Expenses (QoQ comparison of Q3 & Q4 FY09/2024) QoQ Other SG&A increased significantly mainly due to the higher recruitment expenses, such as the intensive out-of-home recruitment Other SG&A + JPY 1
Slide 10: Structure of Operating Expenses
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Structure of Operating Expenses (YoY, 12 months accumulated comparison) SG&A to sales ratio 72.0% SG&A to sales ratio SG&A to sales (YoY) ratio 73.3% Other SG&A included expenses for recruitment expenses, such as intens
Slide 11: Quarterly Trend of Net Sales and Operating Expenses
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Quarterly Trend of Net Sales and Operating Expenses ● Net sales ■ Other SG&A ■ Advertising expenses ■ Business consignment & staffing expenses ■ Personnel expenses ■ R&D expenses ■ Cost of Sales (unit: JPY million) FY2021
Slide 12: Number of Employees
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Number of Employees Despite the initial plan for FY2024 to achieve a net increase of more than 50, it resulted in a net increase of 28 throughout this fiscal year due to recruitment difficulties. ■ Others ■ Professional se
Slide 13: Trend in Cash Flow
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Trend in Cash Flow (YoY, 12 months accumulated comparison) ● Cash and cash equivalents ■ CF from operating activities ■ CF from investing activities ■ CF from financing activities (unit: JPY million) CF from operating ac
Slide 14: Business Activities
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results FY09/2024 Full-year Consolidated Financial Results (Business Activities) 14
Slide 15: Business Highlights
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Business Highlights ● Advertisements and events ○ Exhibiting at “Japan DX Week Nagoya,” one of the largest IT/DX events in Chubu region (July 2024) ○ Holding “HENNGE One Partner Meeting 2024” in Tokyo and Nagoya (July a
Slide 16: Advertising Activities in Q4 FY2024
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Advertising Activities in Q4 FY2024 We carried out activities to deliver the new value of rebranded HENNGE One nationwide continuing from Q3. (“Japan DX Week Nagoya” inside the venue) Exhibiting and participating in ove
Slide 17: Conducting Recruitment Advertising
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Conducting Recruitment Advertising In September 2024, we conducted recruitment advertising across major train stations and universities in Japan to raise HENNGE’s awareness among recruitment candidates. (Shibuya Happy B
Slide 18: Three Features of HENNGE One
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Three Features of HENNGE One (July 2024 -) In July 2024, in order to response to the security awareness and demands of companies which transform and expand with the times, three features were added to HENNGE One. HENNGE
Slide 19: KPI Results
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results FY09/2024 Full-year Consolidated Financial Results (KPI Results) 19
Slide 20: HENNGE One KPI Highlights
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One KPI Highlights (Progress in 12 months, compared to the end of FY09/2023) # of contracted companies # of contracted users ARR 2,951 companies 2.495M users JPY 8.75B increased by 341 companies increased by 114K
Slide 21: HENNGE One KPI
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of FY09/2023) # of contracted companies # of contracted users ARR YoY +13.1% YoY +4.8% YoY +26.3% (unit: companies) (unit: K users) (unit: JPY million) +341 +114K + JPY companies
Slide 22: HENNGE One Gross Revenue Churn Rate
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One Gross Revenue Churn Rate Besides the conventional reasons, the price revision caused a few cancellations for relatively large companies. Churn rate rose within our expectation and remains at a low level, main
Slide 23: HENNGE One Contracted Companies & Users
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One Contracted Companies & Users While there are some effects of cancellations triggered by the price revision, # of contracted companies has increased due to the stable acquisitions of small to mid sized contract
Slide 24: HENNGE One ARR & ARPU
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One ARR & ARPU ARR and ARPU increased steadily due to the price revision effective from April 2024. ● HENNGE One ARPU (JPY per user) QoQ + JPY 216 ■ HENNGE One ARR (JPY million) per user QoQ + JPY 0.59B FY2021 FY2
Slide 25: FY09/2025 Full-year Forecast
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results FY09/2025 Full-year Forecast 25
Slide 26: Our Policy of FY2025
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Our Policy of FY2025 By strengthening our corporate branding, aim to accelerate mid to long term ARR growth and improve productivity. HENNGE One Business Aim to exceed JPY 10B for ARR by increasing the number of contrac
Slide 27: Overview of FY2025 Forecast
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Overview of FY2025 Forecast FY2023 FY2024 FY2025 YoY YoY (%) (unit: JPY million) Results Results Forecast Net sales 6,776 8,365 10,441 +2,077 +24.8% (HENNGE One) 6,250 7,737 9,817 +2,080 +26.9% (Professional service and
Slide 28: FY2025 Forecast of Net Sales by Business
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results FY2025 Forecast of Net Sales by Business Net sales of HENNGE One business are expected to grow by 26.9% YoY to JPY 9.82B. Professional service HENNGE One and others (unit: JPY million) (unit: JPY million) ■ Results ■ Fo
Slide 29: FY2025 Forecast of Operating Expenses
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results FY2025 Forecast of Operating Expenses Advertising expenses are expected to increase by 21.8% YoY to JPY 0.86B. Operating expenses, excluding advertising expenses, are expected to increase by 20.5% YoY to JPY 8.01B. Oper
Slide 30: Growth Strategy
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Growth Strategy 30
Slide 31: Liberation of Technology
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Corporate Philosophy We want to deliver the power of technology to as many people as we can. Liberation of Technology テクノロジーの解放 31
Slide 32: Maximize LTV
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Maximize LTV Our growth strategy is to maximize LTV. Currently, “Y” and “r” are already in high numbers, therefore our focus is to maximize ARR. LTV = ARR × Y × r Y = [Average contract duration in years] r = [Gross profi
Slide 33: Progress of Our Growth Strategy (HENNGE One)
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Progress of Our Growth Strategy (HENNGE One) In the recent years, number of small to mid sized contracts were acquired by strengthening relationships with resellers. As a result of providing demanded new services and fe
Slide 34: Mid-term Target
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Mid-term Target Aim to achieve above 20% in CAGR for ARR growth from FY2025 to FY2029, resulting in JPY 20B as a group’s ARR. To build a solid foundation for growth beyond JPY 20B, we set our target operating profit marg
Slide 35: Our Long-term Ambition
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Our Long-term Ambition Aim to establish a business model which enables us to exceed JPY 100B for ARR and a potential operating profit margin (Potential OPM) of 50% within FY2035 to FY2037. ARR JPY 100B In addition to pro
Slide 36: Path to Becoming World Class IT Company
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Path to Becoming World Class IT Company We will aggressively focus on promoting the existing business, cultivating new markets, and expanding our value through M&As and other measures. To accelerate these efforts, streng
Slide 37: For Sustainable Enhancement of Enterprise Value
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results For Sustainable Enhancement of Enterprise Value To improve enterprise value sustainably, we will strengthen corporate governance and improve shareholder returns ● Strengthening Corporate Governance On September 20, 2024
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Slide 39: Appendix (Corporate Overview)
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Appendix (Corporate Overview) 39
Slide 40: Corporate Profile
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Corporate Profile Company name : HENNGE K.K. Executives : Kazuhiro Ogura Representative Director, President and CEO/CTO Kazuaki Miyamoto Representative Director, Executive Senior Vice President Yoshiki Nagatome Director,
Slide 41: Locations
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Locations Japan Taiwan Nagoya branch office 2016/8 Tokyo Head office Osaka branch office 2015/6 Fukuoka branch office 2018/8 41
Slide 42: Breakdown of Employees by Function
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Breakdown of Employees by Function 311 (unit: employees, excluding part-time employees, as of 2024-09-30) 42
Slide 43: Liberation of Technology
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Corporate Philosophy We want to deliver the power of technology to as many people as we can. Liberation of Technology テクノロジーの解放 43
Slide 44: History
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results History Our business domain is ever-changing, but our will remains steadfast. y) rit cu y) se tit er ) en LP yb (Id (D (C l x ai aS aS aS nu Em Sa Sa Sa Li 1996 1997 2000 2011 2012 2021 Linux server eCRM software HENNGE
Slide 45: Net sales Structure by Business
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Net sales Structure by Business 92.5% of net sales come from HENNGE One business. JPY 8.36B ● HENNGE One ● Professional service and others (FY09/2024) 45
Slide 46: HENNGE One
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One Provide services that remove obstacles for companies trying to improve productivity by adopting cloud in one-stop. Enhance security and usability of cloud to all the employees by having company-wide implement
Slide 47: HENNGE One - Identity
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One - Identity Provide cross-sectional secure access and SSO for various cloud services used by companies. Access Control ID Federation Customizable policy Administrator Various cloud services SSO Microsoft 365 U
Slide 48: HENNGE One - DLP
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One - DLP Prevent leaks of important data, such as confidential corporate information, from misdirected email and wrong file sharing misconfiguration. DLP Secure DL Email DLP Email Archive - URL auto-conversion - Fi
Slide 49: HENNGE One - Cybersecurity
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One - Cybersecurity Improve the level of security from technology, people, and process point of view, by addressing measures such as for ransomware and targeted email attacks. HENNGE Cloud Protection HENNGE Tadri
Slide 50: HENNGE One's Solid Customer Base
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE One’s Solid Customer Base HENNGE One is used by 2,951 companies in various industries, and has approximately 2.49 million users. Average number of contracted users per contracted company is approximately 845. (as
Slide 51: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Appendix (Total Addressable Market) 51
Slide 52: Number of Companies by Employee Size in Japan
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Number of Companies by Employee Size in Japan Enormous potential within the market exists as cloud adoption will accelerate going forward. Customers’ demands # of employees ID managemnet for 653 ■ # of companies by each
Slide 53: Strengthening Expansion into Overseas Markets
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Strengthening Expansion into Overseas Markets Our main service is a cloud service, which has the potential for cross-border expansion. While continuing to target the Asian market, we will also challenge the business exp
Slide 54: Appendix (Others)
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Appendix (Others) 54
Slide 55: New Business Developments
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results New Business Developments Search for the market demands and accelerate the release of new features and services that meet the demands. Continue to support our customers in utilizing SaaS and keep continuing the “liberat
Slide 56: Service Overview (HENNGE One)
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Service Overview (HENNGE One) Service Overview Service Overview HENNGE Access Control Access control/SSO, etc. HENNGE Email Archive Email audit/Archive HENNGE Device Certificate Device certificate HENNGE Secure Transfer L
Slide 57: Business Investments
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Business Investments Mainly invested in B2B startups that own proprietary elements and technologies, which have synergy with our business. We will increase the value provided to our customers through business alliances,
Slide 58: Eat unripe fruits, and make mistakes early
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Value Continuously eat unripe fruits and remain as early adopters in order to make “liberation of technology” happen. Through a number of trial and error, we will identify new technology that is useful for our customers
Slide 59: HENNGE WAY
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results HENNGE WAY HENNGE WAY is our code of conduct in order to keep changing with challenges and failures. 01 02 03 Love technology Eat unripe fruits Be a learnaholic テクノロジーを愛し、 挑戦しよう。 好奇⼼あふれる 使おう。 失敗から学ぶために。 学びの中毒者であろう。 04 0
Slide 60: Diversity and Inclusion
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Diversity and Inclusion Focusing our efforts on the Global Internship Program (GIP) not only to provide career development opportunities for the most talented candidates from all over the world, but also to be the preced
Slide 61: Diversity in Organization
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Diversity in Organization Diversity is the key driver to keep challenging and changing. We recognize the differences and respect the differences, which then we can create a basis for an ever-changing organization that val
Slide 62: Past Materials
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Past Materials 62
Slide 63: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Cloud Adoption Rate in Japan Cloud adoption rate in Japan has increased by 4.0pts to 22% from 2021. (Reference: Press release “Average Cloud Computing Adoption Rate in Japan” in June 2021 by Gartner, Inc. URL of the ori
Slide 64: Customers Mail Cloud
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Customers Mail Cloud Cloud email delivery service that enables companies to send emails reliably and easily. Send notifications with high delivery rate for immediate notifications of purchases/reservations, bulk notificati
Slide 65: Marketing Activities for HENNGE One
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Marketing Activities for HENNGE One It requires some time from marketing campaigns to the contribution in expansion of ARR as HENNGE One’s lead time is relatively long. However, the results of the investment in advertis
Slide 66: License Lineups for HENNGE One Announced in 2019/5
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results License Lineups for HENNGE One Announced in 2019/5 (June 2019 - September 2021) * New contracts taken into place after October 2021 will apply new license lineup which was announced in August 2021. 66
Slide 67: Service Lineups for HENNGE One Announced in 2021/8
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Service Lineups for HENNGE One Announced in 2021/8 (October 2021 - March 2024) Service lineups were renewed from October 2021. Approaching varieties of customers with high value-added suite plans, as well as setting up
Slide 68: Renewal of License Lineups for HENNGE One Announced in 2023/8
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year Consolidated Financial Results Renewal of License Lineups for HENNGE One Announced in 2023/8 (April 2024 -) The several license lineups for HENNGE One will be revised from April 2024. (Updated July 2024) 68
Slide 69: Glossary
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year 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. AR
Slide 70: Disclaimer
HENNGE K.K. (4475:TSE Growth) FY09/2024 Full-year 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
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