Hennge K.k. · TSE:4475
Hennge K.k — Q1 FY09/2023 Earnings Presentation
66 slides from Hennge K.k's earnings presentation, Feb 10, 2023
Slide 1: Q1 FY09/2023 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 FY09/2023 Consolidated Financial Results HENNGE K.K. (
Slide 2: Table of Contents
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Table of Contents 1. Q1 FY09/2023 Consolidated Financial Results 2. Progress of FY09/2023 Full-year Forecasts 3. Growth Strategy 4. Appendix Corporate Overview Total Addressable Market Others 5. Past Materials 2
Slide 3: Q1 FY09/2023 Consolidated Financial Results (Financial Results)
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Q1 FY09/2023 Consolidated Financial Results (Financial Results) 3
Slide 4: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 3 months accumulated comparison) (unit: JPY million) 1. The net sales rose by 17.8% YoY to JPY 1.55B. The sales of HENNGE One rose by 18.8% YoY to JPY 1.43B. 2. The total SG&A increase
Slide 5: Quarterly Trend of Net Sales
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Quarterly Trend of Net Sales ■ Professional service and others ■ HENNGE One (unit: JPY million) FY20 FY21 FY22 FY23 5
Slide 6: Net Sales
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Net Sales (YoY, 3 months accumulated comparison) Sales for HENNGE One business, our growth driver, shows a steady progress year-on-year. (YoY, 3 mons accum. comparison) 1,547 Total 116 ■ Professional service and others ■ HENNGE One 1
Slide 7: Quarterly Trend of Gross Profit
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Quarterly Trend of Gross Profit ● Gross profit margin ■ Gross profit (unit: JPY million) FY20 FY21 FY22 FY23 7
Slide 8: Gross Profit
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Gross Profit (YoY, 3 months accumulated comparison) While the gross profit margin decreased slightly mainly due to an increase in R&D members and an increase in infrastructure costs for HENNGE One from exchange rate fluctuations, it sti
Slide 9: SG&A
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Structure of Operating Expenses (YoY, 3 months accumulated comparison) (unit: JPY million) SG&A to sales ratio 76.3% SG&A to sales ratio Other SG&A increased YoY mainly due to SG&A to sales (YoY) enhanced recruitment activities, addi
Slide 10: SG&A
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Structure of Operating Expenses (QoQ comparison of Q4 FY09/2022 & Q1 FY09/2023) (unit: JPY million) QoQ (unit: JPY million) Other SG&A decreased QoQ mainly due to a temporary decrease in recruitment Other SG&A -34 expenses through a
Slide 11: Quarterly Trend of Net Sales and Operating Expenses
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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: JPY million) FY20 FY21 FY22 FY2
Slide 12: Breakdown of Employees by Function
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Breakdown of Employees by Function 254 (Excluding part-time employees, as of 2022-12-31) 12
Slide 13: Number of Employees
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Number of Employees A net increase of 11 employees compared to the end of the previous fiscal year. We will build a more solid organization by enhancing our talent acquisition capability. ■ Others ■ Professional service ■ Business Dev
Slide 14: Business Activities
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Q1 FY09/2023 Consolidated Financial Results (Business Activities) 14
Slide 15: Business Highlights
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Business Highlights ● Advertisements and events ○ Hosting an interactive on-site conference, “HENNGE NOW!” (October 2022) ○ Hosting, sponsoring and participating in various events (October to December 2022) ● Others ○ Sponsoring “PyC
Slide 16: Holding event “HENNGE NOW!”
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Holding event “HENNGE NOW!” In October 2022, "HENNGE NOW!" was held on-site in Tokyo for the first time in three years. Through sessions and workshops, we were able to create opportunities to deepen communications within the IT admini
Slide 17: Marketing Activities for HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 advertising expenses c
Slide 18: New Service “tadrill”
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results New Service “tadrill” In November 2022, we launched “tadrill”, a self-implementing targeted email attack training service. It enables companies to improve their employees’ security awareness by continuous and practical email training
Slide 19: KPI Results
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Q1 FY09/2023 Consolidated Financial Results (KPI Results) 19
Slide 20: HENNGE One KPI Highlights
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One KPI Highlights (Progress in 3 months, compared to the end of FY09/2022) # of user companies (N) # of contracted users ARR 2,310 companies 2.34M users JPY 5.78B increased by 97 companies increased by 17K users increased by
Slide 21: HENNGE One KPI
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of Q4 FY09/2022) # of contracted companies # of contracted users ARR YoY +15.5% YoY +7.9% YoY +19.0% (unit: companies) (unit: users) (unit: JPY million) +310 +0.17M + JPY companies users 0.92B
Slide 22: HENNGE One Gross Revenue Churn Rate
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Gross Revenue Churn Rate Besides the reasons for cancellations so far, there were some cancellations triggered by the migration of existing customers to new license lineups. Still, we maintain a stable and sustainable grow
Slide 23: HENNGE One Contracted Companies & Users
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Contracted Companies & Users Relatively small contracts can be acquired stably, resulting in a steady increase in the number of contracted companies. However, the number of users only increased slightly due to the impact o
Slide 24: HENNGE One ARR & ARPU
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One ARR & ARPU ARPU has risen steadily due to acquiring new customers with the new license lineups and transition of existing customers to the new license lineups. ARR increased steadily despite some cancellations. QoQ + JPY 6
Slide 25: Progress of FY09/2023 Full-year Forecasts
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Progress of FY09/2023 Full-year Forecasts 25
Slide 26: Our Policy of FY2023
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Our Policy of FY2023 To accelerate mid-term growth in HENNGE One ARR, continuously carrying out active marketing activities and building a more solid organization by enhancing our talent acquisition capability. HENNGE One Business Ac
Slide 27: Overview of FY2023 Forecasts
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Overview of FY2023 Forecasts (unit: JPY million) 1. The sales of HENNGE One, our key driver of growth, is expected to grow by 20.7% YoY. The sales of Professional service and others is expected to grow by 2.4% YoY. 2. The net sales i
Slide 28: FY2023 Forecasts of Sales by Business
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results FY2023 Forecasts of Sales by Business The progress rate of HENNGE One’s sales was at 23.0% against the full-year forecast. HENNGE One Professional service and others (unit: JPY million) ■ Actual (unit: JPY million) ■ Forecast 28
Slide 29: FY2023 Forecasts of Operating Expenses
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results FY2023 Forecasts of Operating Expenses The progress rate of advertising expenses was at 28.1% against the full-year forecast. The progress rate of operating expenses excl. advertising expenses was at 23.0% against the full-year forec
Slide 30: Growth Strategy
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Growth Strategy 30
Slide 31: Liberation of Technology
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 31
Slide 32: Maximize LTV
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 33: Maximize ARR
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Maximize ARR ARR ＝ N × n × ARPU maximize N N = # of contracted companies maximize n ● Increase our sales force n = Average # of contracted ● Extend our presence in a wider region Maximize ● Strengthen the partnership with our reselle
Slide 34: Progress of Our Growth Strategy (HENNGE One)
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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. 34
Slide 35: Growth Strategy on and After FY2023
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Growth Strategy on and After FY2023 By FY25, having HENNGE One ARR growth at mid-20% in CAGR, we aim to exceed JPY 10B for HENNGE One ARR. Focus on increasing the number of contracted companies (N) and raising ARPU (unit : JPY millio
Slide 36: HENNGE One Family, Supporting Customers’ Change
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Family, Supporting Customers’ Change Supporting customers’ SaaS utilization and continuously liberate technology. HENNGE Access Control HENNGE HENNGE Cloud Protection Messaging Security HENNGE Secure Transfer - SSO Secure
Slide 37: HENNGE One as a SaaS Platform
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One as a SaaS Platform HENNGE One will grow as the global SaaS market expands. and and more more Currently integrates with Over 240 Cloud services 37
Slide 38: HENNGE
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Slide 39: Appendix (Corporate Overview)
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Appendix (Corporate Overview) 39
Slide 40: Corporate Profile
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Corporate Profile Company name : HENNGE K.K. Executives : Kazuhiro Ogura Representative Director, President and CEO Kazuaki Miyamoto Representative Director, Executive Senior Vice President Yoshiki Nagatome Director, Executive Senior
Slide 41: Locations
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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: Liberation of Technology
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 42
Slide 43: History
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 44: Sales Structure by Business
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Sales Structure by Business 92.5% of the net sales comes from HENNGE One business. (as of Q1 FY2023) 44
Slide 45: HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Identity as a Services (IDaaS) Provide centralized authentication to various SaaS-es, with Single Sign On (SSO) technology Access Control ID Federation Customizable policy Administrator Various cloud services SSO Microsoft
Slide 46: HENNGE One
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 47: HENNGE One Solid Customer Base
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Solid Customer Base HENNGE One is used by 2,310 customers in various industries, and has 2.34 million users. Average number of contracted users per contracted company is approximately 1,014. (as of 2022-12-31) Breakdown by
Slide 48: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Appendix (Total Addressable Market) 48
Slide 49: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Cloud Adoption Rate in Japan Cloud Adoption Rate in Japan has increased by 4.0pt to 22% from 2021. (Reference: Press release ‘Average Cloud Computing Adoption Rate in Japan’ in June 2021 by Gartner, Inc. URL of the original release i
Slide 50: Number of Companies by Employee Size in Japan
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 51: Regional Split in the number of companies
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 52: Appendix (Others)
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Appendix (Others) 52
Slide 53: Eat unripe fruits, and make mistakes early
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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, and widely d
Slide 54: THE HENNGE WAY
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results THE HENNGE WAY HENNGE WAY is our code of conduct in order to keep changing with challenges and failures.
Slide 55: Diversity and Inclusion
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 56: Diversity
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Diversity 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 value challenges. Diversity Respe
Slide 57: Business Investments and New Business Development
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 58: Past Materials
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Past Materials 58
Slide 59: HENNGE One Business
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Business Three New Features for HENNGE One (Since October 2021) HENNGE One’s new features providing more secure file transfer, smartphone access security, and E-Mail protection from targeted attacks were launched in October
Slide 60: HENNGE One Business
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Business HENNGE Connect (Since April 2022) “HENNGE Connect” has been launched as a feature of HENNGE IdP Pro and HENNGE One Pro in April 2022. Enables seamless access management in a hybrid environment of on-premise and cl
Slide 61: HENNGE One Business
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Business Renewal of Service Lineup for HENNGE One (Since October 2021) Service lineups were renewed from October 2021. Approaching varieties of customers with high value-added suite plans, as well as setting up single-func
Slide 62: HENNGE One Business
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results HENNGE One Business License lineup for HENNGE One announced in June 2019 (From June 2019 to September 2021) ※ New contracts taken into place after October 2021 will apply new licence lineup which was announced in August 2021. 62
Slide 63: Professional Service and Others Business
HENNGE K.K. (4475:TYO) Q1 FY09/2023 Consolidated Financial Results Professional Service and Others Business SumaMachi (Since August 2020) SumaMachi is a communication service that enables smooth two-way communication with community residents to municipalities nationwide. (Previously named as “CHROMO
Slide 64: Glossary
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 65: Disclaimer
HENNGE K.K. (4475:TYO) Q1 FY09/2023 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 66: HENNGE
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