Marketenterprise Co.ltd · TSE:3135
Marketenterprise Co.ltd — Q2 FY6/2021 Earnings Presentation
58 slides from Marketenterprise Co.ltd's earnings presentation, Feb 12, 2021
Slide 1: February 12, 2021 MarketEnterprise Co., Ltd.
February 12, 2021 MarketEnterprise Co., Ltd. Securi'es code: 3135
Slide 2: Agenda
Agenda (1) FY2021 Financial Result (2) FY2021 Forecast (3) Business Climate and Strategic Goals 1
Slide 3: Agenda
Agenda (1) FY2021 Financial Result (2) FY2021 Forecast (3) Business Climate and Strategic Goals 2
Slide 4: Result by segment
The second-hand online business remained strong, while profitability in the media and mobile & telecommunica'ons businesses declined due to the impact of the Google Core Update Result by segment Second-hand online Focusing on improving profitability; steady growth of agricultural equipment and Oikura
Slide 5: Sales up but operating profit down
Sales up but opera'ng profit down YoY change (Million yen) 1H FY6/20 1H FY6/21 Amount % Net sales 5,179 5,628 +449 +8.7% Gross profit 1,981 2,058 +77 +3.9% SG&A expenses 1,672 1,851 +180 +10.7% SG&A expense ratio 32.3% 32.9% - +0.6pt Operating profit 309 206 -103 -33.2% Operating profit to net sales
Slide 6: Operating profit change factors, 1H FY6/20 to 1H FY6/21
The smaller number of new subscriptions in the mobile & telecommunications business reduced the gross profit margin. Investments for new subsidiaries (offshore IT system development, cross-border agricultural equipment e-commerce) decrease in profits. 500 400 -95 +172 300 -180 200 Increase in SG&A e
Slide 7: No change in financial soundness
No change in financial soundness (Million yen) As of June 30, 2020 As of December 31, 2020 Change Main factors Current assets 3,068 2,995 -73 Cash and deposits 1,255 1,816 +561 Due to the increase in collection of receivables posted in the 4Q FY6/20 Accounts receivable-trade 1,283 655 -628 Mainly bec
Slide 8: Market Enterprise
MARKET ENTERPRISE
Slide 9: Business segments overview
For individuals Pla^orm Telecom Pla^orm For companies Service Brand Second-hand Hobbies 8
Slide 10: Profitability improved in second-hand online; profit down in other two segments
Profitability improved in the second-hand online business; profit was down in the other two segments (Million yen) 1H FY6/20 1H FY6/21 Change (amount) Change (%) Net sales 5,179 5,628 +449 +8.7% Second-hand Online 3,454 3,356 -97 -2.8% Media 263 304 +41 +15.6% Mobile & Telecommunications 1,600 2,039 +
Slide 11: For individuals / Platform / For companies
For individuals Pla^orm For companies 10
Slide 12: Advertising expenses down about 32% year on year
Adver'sing expenses were down about 32% from one year earlier but sales were almost the same level due to the shiY to higher priced merchandise, resul'ng in a decrease in these expenses as a percentage of sales. 8.0% 7.0% 6.6% 6.0% 5.0% 4.7% 4.0% 3.0% 2.0% 1.0% 0.0% 1H FY6/20 1H FY6/21 11
Slide 13: Sales to individuals decreased but agricultural equipment sales increased
Sales to individuals decreased but agricultural equipment sales increased; profitability improved due to the efficient use of adver'sing expenses. 4,000 400 3,454 3,356 339 351 350 217 187 3,000 347 300 524 +51.2% YoY 250 2,000 200 2,890 -8.4% YoY 150 2,646 1,000 100 50 0 0 1H FY6/20 1H FY6/21 1H FY6/2
Slide 14: Steady sales and consistently high inventory
Steady sales and consistently high inventory. 3,500 500 3,237 3,170 -2.1% YoY 450 3,000 347 524 +51.2% YoY 400 351 355 2,500 350 300 2,000 250 1,500 2,890 200 2,646 -8.4% YoY 1,000 150 100 500 50 0 0 1H FY6/20 1H FY6/21 1H FY6/20 1H FY6/21 13
Slide 15: Oikura internet platform matching sellers with stores
Oikura is an internet pla[orm that matches customers who want to sell items with the about 1,000 second-hand brick-and-mortar stores throughout Japan that are registered with this pla[orm. Oikura is focusing on increasing the number of second-hand goods purchase requests received via the internet. S
Slide 16: Collaboration with takakuureru.com and partner companies
Using collabora'on with takakuureru.com and partner companies in order to increase the number of customers directed to Oikura. Logis`cs/moving Media companies Real estate companies Manufacturers (rentals and sales) Retail companies Started system More customers linkage in June 2019 directed to Oikur
Slide 17: Oikura internet purchase requests up 86.9% year on year
Requests received via the internet by Oikura for purchasing second hand items in 1H of FY2021 were 86.9% higher than one year earlier. 80,000 70,000 68,000 60,000 50,000 +86.9% 50,000 YoY 40,000 36,000 30,000 20,000 10,000 0 1H FY6/20 2H FY6/20 1H FY6/21 16
Slide 18: Steady growth of internet purchase requests received by Oikura
Steady growth of internet purchase requests received by Oikura because of improvements to the logic used by the matching system following the February 2019 acquisi'on of Oikura and the full-scale launch of the alliance with Takakuureru.com in July 2020. 160.0% Average: +36.3% Average: +91.0% 130.0%
Slide 19: Fees from passing on purchase requests contributed to segment profit
Big increase in fees from passing on second hand item purchase requests via the internet to partner companies contributed to growth of the segment profit. 100 50 90 46 90 85 45 80 40 70 35 -22.2%YoY 35 33 45 60 30 50 -7.7% YoY 25 +39.7% 40 24 YoY 20 30 15 26 20 +106.6% 10 31 10 YoY 5 15 0 0 1H FY6/20
Slide 20: Telecom / Platform / Second-hand / Hobbies
Telecom Pla^orm Second-hand Hobbies 19
Slide 21: Media: sales from directing customers decreased due to Google Core Update
Sales from directing customers to MarketEnterprise services (internal) decreased because of a decline in telecommunications media page views caused by the Google Core Update. Sales from directing customers to services of other companies (external) continued to grow, but the segment profit decreased
Slide 22: Average monthly page views up 21.4%
Page views were higher than one year earlier as the growth of hobby and other media more than offset the decline in telecommunica'ons media page views caused by the Google Core Update. Average monthly page views 1,600 1,400 1,200 1,051 1,000 865 800 600 +21.4% 400 YoY 200 0 1H FY6/20 1H FY6/21 21
Slide 23: WE MOBILE
WE MOBILE MARKET ENTERPRISE 22
Slide 24: Mobile & telecom: sales increased, segment profit decreased
Sales increased because of higher fee income for telecom services. Segment profit decreased because of a decline in new WiMAX subscriptions, the result of a downturn in MarketEnterprise telecommunications media page views. Net sales Segment profit 2,500 300 2,039 250 2,000 1,600 511 -28.4% YoY 200 1,
Slide 25: Agenda
Agenda (1) FY2021 Financial Result (2) FY2021 Forecast (3) Business Climate and Strategic Goals 24
Slide 26: FY6/21 forecasts
(Million yen) FY6/20 results FY6/21 forecasts YoY change Net sales 10,904 13,500 to 14,500 +23.8% to +33.0% Opera`ng profit 655 730 to 900 +11.3% to +37.2% Ordinary profit 664 733 to 903 +10.4% to +36.0% Profit agributable to owners of parent 291 360 to 450 +23.4% to +54.3% 25
Slide 27: Agenda
Agenda (1) FY2021 Financial Result (2) FY2021 Forecast (3) Business Climate and Strategic Goals 26
Slide 28: Business climate and strategic goals outline
I. Strategies for accomplishing the FY2021 sales and profit plan II. Key businesses for the medium-term growth III. Reason of applying for change in listing to the TSE first section 27
Slide 29: Overall strategy for FY2021 sales and profit plan
Overall strategy Signs of a recovery are started to appear in all businesses. There are no changes in the initial forecast and we are determined to achieve the targets in this forecast. Second-hand Online Business • Focus on business volume between March and May, the busiest period of every year for
Slide 30: Business structure for individuals, platform and telecom
For individuals Pla^orm Telecom Pla^orm For companies Second-hand Hobbies 29
Slide 31: Business structure for individuals, platform and telecom
For individuals Pla^orm Telecom Pla^orm For companies Second-hand Hobbies 30
Slide 32: Market Enterprise
MARKET ENTERPRISE 31
Slide 33: Using Oikura to help create a sustainable society
Our goal is to use Oikura to play a role in crea'ng a sustainable society. Environment – Prevent pollu`on caused by waste materials Achieve the circular economy by reducing the volume of waste materials and distributing as second hand goods Solve many issues to help create a sustainable society Peop
Slide 34: Market Enterprise
MARKET ENTERPRISE 33
Slide 35: Market Enterprise
MARKET ENTERPRISE 34
Slide 36: Market Enterprise
MARKET ENTERPRISE 35
Slide 37: Unneeded items and hidden assets in Japan
Every year, about ¥5.5 trillion (¥7.6 minus ¥2.1 trillion) of unneeded items are stored, represen'ng hidden assets of approximately ¥37 trillion. Estimated value of merchandise that became unneeded Estimated value of household hidden assets during the past year in Japan (Excluding automobiles, motor
Slide 38: Distributing used products is a higher priority than recycling
Distributing used products is a higher priority than recycling Distributing used products is positioned as a higher priority than recycling in Article 7 (basic principle) of the Basic Act onEstablishing a Sound Material-Cycle Society. Distributing used products extends the useful life of products an
Slide 39: Distributing used products cuts the cost of processing waste
Distribu'ng used products cuts the cost of processing waste materials About ¥1,900 billion About ¥190 to (100 million yen) (Yen/Person) ¥380 billion The annual public-sector cost (paid by tax revenue) of processing waste is about ¥1,900 billion. Between about 10% and 20% of products no longer needed
Slide 40: Market Enterprise
MARKET ENTERPRISE 39
Slide 41: Oikura platform assists about 1,000 second-hand stores
Oikura is an internet pla[orm that assists about 1,000 second-hand brick-and-mortar stores throughout Japan to akract customers. Stores buying second-hand goods Seller (Consumers) Use of internet (Okura partner stores) to submit Register items purchase requests to Second-Hand shops Pawn shops to sel
Slide 42: Expansive and convenient
Expansive Convenient High probability of an acceptable value Rate of at-home price offers (vs. use of a delivery service or visi'ng a store) 41
Slide 43: Partner store selection and oversight
Up to 20 companies are selected Trans Customers can based on product categories/ parency choose from among purchasing method, distance, up to 20 stores appraisal response rate and rather than receiving other factors. + extra a recommenda'on We will con'nue to improve ra'ngs fairness for only one sto
Slide 44: Investing to establish a position in the second-hand market
Oikura is making large investments to establish a prominent posi'on in the Second hand Market, which has enormous poten'al for more growth. Value of household hidden assets in Japan About ¥ 37 trillion Size of the unneeded product market About ¥7.6 trillion Size of the Second hand Market About ¥2.2
Slide 45: Market Enterprise
MARKET ENTERPRISE 44
Slide 46: Constantly taking actions to upgrade services
Constantly taking ac'ons to upgrade services. STEP 3 Build pla^orms for crea`ng the circular economy STEP 2 Higher awareness/More customer contact points Strengthen alliances STEP 1 A stronger foundation Collaboration among internal services 45
Slide 47: A stronger foundation
• Update the database, establish server redundancy • Improve user interfaces A stronger • Remodel stores and customers’ personal internet pages founda`on • Improve the all-inclusive appraisal form • Improve the logic used for store matching • Nationwide assessment service started 46
Slide 48: Collaboration among internal services
July 2019: Started collaboration with Takakuureru.com (Suspended in October 2019) Collabora`on among January 2020: Resumed collaboration with internal services Takakuureru.com July 2020: Started collaboration with the 22 MarketEnterprise websites for specific product categories 47
Slide 49: TV commercials / Development of app
TV commercials Development of app 48
Slide 50: TV commercial trials started in Nagoya and Shizuoka
Started trials of TV commercials in mid-February 2021 in the Nagoya and Shizuoka regions and plan to start na'onwide TV commercials in the next fiscal year. 49
Slide 51: Expand TV commercials nationwide when Oikura app launches
Plan to expand TV commercials in stages to na'onwide coverage when the Oikura app is launched. 50
Slide 52: New alliances mainly in the real estate sector
Form new alliances faster, mainly in the real estate sector. Relo Club, Ltd. DAITOKENTAKU PARTNERS CO., LTD. Miyoshi Real Estate Co., Ltd. Alliance started at the end of January Alliance started on February 5 Leopalace 21 Corpora'on LIFULL Co., Ltd. Alliance started on February 2 Alliance plans to b
Slide 53: Joint seminar with YAHUOKU!
A joint seminar with YAHUOKU! is scheduled for February 25. 52
Slide 54: Team for alliances with public-sector partners
We have formed a team devoted solely to forming alliances with public-sector partners. Local governments 53
Slide 55: Market Enterprise
MARKET ENTERPRISE 54
Slide 56: Application for Tokyo Stock Exchange first section listing
We have applied for a Tokyo Stock Exchange first section listing for the purpose of achieving more growth in corporate value by raising public awareness of our services along with our reputation for reliability. Consequently, this application represents our strong commitment to achieving sustained g
Slide 57: IR contact and forward-looking statements
Forward-looking statements in this document, such as forecasts of business performance, include forward-looking statements, assump'ons and projec'ons that are the basis of our plans. Actual business results may differ substan'ally due to various factors. For IR-Related Inquiries and Inquiries about t
Slide 58: Market Enterprise
“MARKET ENTERPRISE