Marketenterprise Co.ltd · TSE:3135
Marketenterprise Co.ltd — FY2020 2Q Earnings Presentation
63 slides from Marketenterprise Co.ltd's earnings presentation, 2020
Slide 1: FY2020 2Q Financial Results Briefing
MarketEnterprise Co., Ltd. FY2020 2Q Financial Results Briefing Ending June 30, 2020 Security code TSE:3135
Slide 2: Agenda
Company Overview and Business Contents FY2020 2Q Financial Results for Fiscal Period Ending June 30 Agenda (1) First half financial results (2) Overview by segment Consolidated Forecast Status of IR Activities 1
Slide 3: Agenda
Company Overview and Business contents FY2020 2Q Financial Results for Fiscal Period Ending June 30 Agenda (1) First half financial results (2) Overview by segment Consolidated Forecast Status of IR Activities 2
Slide 4: Company Overview
Company Overview Company Name MarketEnterprise Co.,Ltd. Established July 7, 2006 (Business started on November 1, 2004) Stock listing date Listed on TSE Mothers on June 27, 2015 (Securities Code:3135) Capital stock 306,699,000 yen (as of the end of December 2019) Representative President & CEO Yasus
Slide 5: What is MarketEnterprise? What is Optimized trading company?
What is MarketEnterprise? MARKET + ENTERPRISE (adventurous creation) We are a company engaged in various businesses to aim to be an “Optimized trading company”based on second-hand. What is "Optimized trading company"? A company that can offer various options to the consumers seek to be smart. Smart
Slide 6: Company History / Changes in Net Sales
Company History / Changes in Net Sales We have developed second-hand business since our establishment in 2006. Through our experiences such as organizing flea markets, we began specializing in the second-hand online business in 2013. After being listed on TSE Mothers in June 2015, we have successful
Slide 7: Business portfolio
Business portfolio We have built the needed portfolio to provide our service for smart consumers. Mobile & Second-hand Online Media Telecommunications Mobile For individuals For corporate Second-hand Mobile communication telecommu nications Consumption Platform Platform related *Business acquired in
Slide 8: Agenda
Company Overview and Business contents FY2020 2Q Financial Results for Fiscal Period Ending June 30 Agenda (1) First half financial results (2) Overview by segment Consolidated Forecast Status of IR Activities 7
Slide 9: Financial Highlights of FY2020 2Q
Financial Highlights of FY2020 2Q Our net sales increased by 35.1% YoY to 5.17 billion yen, reaching the record-high net sales for the first half! Operating profit increased by 2.1 times to 309 million yen, reaching the record-high operating profit for the first half! Our operating profit ratio incr
Slide 10: Net sales by Segment: First half of the fiscal period ending June 30, 2020
Net sales by Segment: First half of the fiscal period ending June 30, 2020 As a result of two new businesses generating steady revenues, we started to divide our businesses into 3 business segments in this fiscal period. The net sales of our main business, second-hand online business steadily increa
Slide 11: Changes in Net sales (by quarter)
Changes in Net sales (in the last 3 years by quarter) For media business and mobile & telecommunications business, special demands due to the launch of new iPhone models in September 2019 resulted in the record-high net sales in Q1, 2020. In our main business, second-hand online business, net sales
Slide 12: Changes in Net sales (by half period)
Changes in Net sales (in the last 3 years by half period) For our main business, Second-hand Online Business, significant commodity purchases occur in March to May (moving season in Japan), so our net sales period is concentrated on Q4. Our net sales tend to be concentrated on the second half of eac
Slide 13: Changes in Operating Profit and Operating Profit Ratio (by quarter)
Changes in Operating Profit and Operating Profit Ratio (in the last 3 years by quarter) After a strategic investment period of the past two years (in the fiscal period from FY2017 ended June 30, 2017 to FY2018 ended June 30, 2018), operating profit ratio increased significantly YoY. As well as net s
Slide 14: Changes in Operating Profit and Operating Profit Ratio (by half period)
Changes in Operating Profit and Operating Profit Ratio (in the last 3 years by half period) Operating profit tends to increase in the second half of the year! For our main business, Second-hand Online Business, significant commodity purchases occur in March to May (moving season in Japan), so our sa
Slide 15: SG&A Expenses and Changes in the Number of Employees
SG&A Expenses and Changes in the Number of Employees While personnel expense was on the rise overall because of the enforced hiring, we promoted operational standardization and introduction of IT, so as a result SG&A ratio steadily decreased. Personnel Advertising Rents Others SG&A ratio expense exp
Slide 16: Changes in Consolidated Balance Sheet
Changes in Consolidated Balance Sheet Due to goodwill accrued by “SIMCHANGE” business acquisition, non-current assets increased by 26.9% year-on-year. The total borrowings increased by 48.4% due to fulfill business transfer funds and working capital. Unit: million yen End of Jun. 2019 End of Dec. 20
Slide 17: Agenda
Company Overview and Business contents FY2020 2Q Financial Results for Fiscal Period Ending June 2020 Agenda (1) First half financial results (2) Overview by segment Consolidated Forecast Status of IR Activities 16
Slide 18: Second-hand Online business
Second-hand 0nline business 17
Slide 19: Second-hand Online business: Overview(1)
Second-hand Online business: Overview(1) We have been focusing on large-scale commercial materials such as agricultural equipment, construction machinery, and medical equipment, as well as for individuals. In February 2019, we acquired Oikura, a second-hand goods matching platform that connects sell
Slide 20: Second-hand Online business: Overview(2)
Second-hand Online business: Overview(2) Both purchase and sales are available at multiple-channel. We can respond to customers’ various needs. We have strengthened our support for the large corporate projects based on “C to B to C*”. Business flow Contact center Purchasing Base 3 Purchase methods a
Slide 21: Second-hand Online business: Purchasing Vertical Websites
Second-hand Online business: Purchasing Vertical Websites We have received around 40,000 purchasing requests per month. And we have catch up 30 categories centered on niche commodities. 20
Slide 22: Second-hand Online Business: Strengths of the Business
Second-hand Online Business: Strengths of the Business Through the pursuit of customer satisfaction by utilizing our advantages, we became the No. 1 company in the auction sales through internet for the past 2 years consecutively. Primary assessment at our own Contact Center Purchase through three c
Slide 23: Second-hand Online Business: Changes in Net sales
Second-hand Online Business: Changes in Net sales (in the last 3 years by half period) Net sales increased by 14.1% YoY to 3.45 billion yen, resulting in record-high net sales for a half period! Many purchasing requests occur from March to May (moving season in Japan). Therefore, our sales are conce
Slide 24: Second-hand Online Business: Net Sales and Segment Profit (Quarterly)
Second-hand Online Business: Net Sales and Segment Profit (Quarterly Comparison) In Q2, our purchase temporarily decreased due to large typhoons in October. However, this was compensated, resulting in increased net sales and segment profit compared to the previous quarter, Q1. (Unit: million yen) (U
Slide 25: Second-hand Online Business: Net Sales Ratio by product
Second-hand Online Business: Net Sales Ratio by product High-end products (including agricultural equipment, construction machinery and medical equipment) for corporations increased significantly by 85.8% year-on-year! Among the five major categories, PC increased by 40.0% year-on-year. On the other
Slide 26: Second-hand Online Business: Inventory/Inventory Turnover
Second-hand Online Business: Inventory/Inventory Turnover • Inventory at the end of the first half increased by 1.7% to 370 million yen from the end of the previous fiscal year end. The increase in the high-quality product we held was a positive factor. • Though we handled high-end products, invento
Slide 27: Second-hand Online Business: Number of Purchasing Requests
Second-hand Online Business: Number of Purchasing Requests The number of monthly purchasing requests for second-hand items is approx. at 40,000, and we acquired 239 thousand requests, up by 8.7% year-on-year for the first half. The requests tend to be concentrated on the second half of each fiscal y
Slide 28: Second-hand Online Business: Average unit sales price
Second-hand Online Business: Average unit sales price The unit sales price kept a high level of 30,000 yen or more. （Unit：yen） Unit sales price in the 1st half Unit sales price in the 2nd half 35,000 28,000 21,000 33,000 31,000 30,000 30,000 31,000 14,000 29,000 29,000 7,000 0 FY2017 2nd half FY2018
Slide 29: Second-hand Online Business: Topics in the First half of FY2020
Second-hand Online Business: Topics in the First half of FY2020 We established a new distribution channels for second-hand products, through extensive collaboration with companies and local governments. The Business Alliance of Second-hand Product Purchase “Hometown Tax Program through donating Musi
Slide 30: Potential Market size of the Second-hand
Potential Market size of the Second-hand Our target is 4.5 trillion-yen market: Consisting of 3.2 trillion-yen market, not compatible with CtoC (Consumer to Consumer) trades and 1.3 trillion-yen market for corporations CtoC Market Our target market Corporate Markets 4.4 trillion yen 3.2 trillion yen
Slide 31: Strengthening Second-hand goods Purchase: Expanding Alliance with Manufacturers
Strengthening Second-hand goods Purchase: Expanding Alliance with Manufacturers Second-hand purchasing demands expanded due to manufacturers D2C (*) acceleration strategy. In addition to the primary distribution (new products purchase), manufacturers need to pay attention to secondary distribution (
Slide 32: Revenue Structure of Takakuureru.com
Revenue Structure of "Takakuureru.com" In all our purchases, the percentage of merchandise of 30,000 yen or more accounts for 21%. The products of 30,000 yen or more accounts for 86% of the segment profit. 100% 30,000 yen or more 21% 86% 50% 79% 30,000 yen or below 14% 0% Purchases Segment profit 31
Slide 33: About second-hand matching platform Oikura
About second-hand matching platform "Oikura" (Acquired in February 2019) A nationwide matching platform for buyers and sellers of second-hand products Sellers (General Consumers) Purchasers (nationwide member stores of Oikura) Purchase request through Website Find a store Recycle shops Pawn shops th
Slide 34: Connecting Takakuureru.com and Oikura
Connecting "Takakuureru.com" and "Oikura": Structure reform for second-hand item purchase [So far] Out of approx. 40,000 purchase requests per month, we were not able to respond to about half of the purchase requests, due to regional and price restrictions. [Going forward] We will be able to refer c
Slide 35: Mechanism how we refer our customers to Oikura
Mechanism how we refer our customers from "Takakuureru.com" to "Oikura" During the price pre-assessment stage at our Contact Center, we can refer purchase requests that we cannot handle, to 1,431 member stores(964 paying member stores*) in Japan via "Oikura“. ＊As of January 2020 Our Current Business
Slide 36: Number of customers sent to member stores via Oikura
Number of customers sent to member stores via "Oikura" After the cooperation with "Takakuureru.com" started at the end of June 2019, the number of customer referrals increased significantly from July 2019. However we temporarily stopped sending customers in Q2 (October to December) due to poor match
Slide 37: Media business
ME MARKET ENTERPRISE Media business 36
Slide 38: Media business: Media Ownership
Media business: Media Ownership We have five medias in the keenly interested field to supply information for smart consumers. Second-hand online Telecommunication Consumption related Information media of iPhone, Wi-Fi, WiMAX Media you can find your hobbies Second-hand media that understand how to bu
Slide 39: Media Business: Business Model
Media Business: Business Model We have supported the users for matching by providing some contents about the highly interesting field. Users Active web searches Provides information Our own medias Sending Sending Advertising revenue customers customers Advertisers (Corporations) Customization throug
Slide 40: Media business: Acquisition of SIMCHANGE business
Media business: Acquisition of “SIMCHANGE” business (Q1: Acquired in August 2019) Support for increased demands for second-hand mobile devices accompanying the SIM unlock (Sep. 2019) - Promotion of multi-domain strategies Capturing SIM unlocking demand Multi-domain strategies Second-hand mobile mark
Slide 41: Media Business: Changes in Net Sales
Media Business: Changes in Net Sales (in the last 2 Years by half period) Net sales increased by 6.1 times year-on-year to 263 million yen, resulting in the record-high net sales for a half period! As our media increased in numbers, the media business continuously saw a rapid growth from the previou
Slide 42: Media Business: Net Sales and Segment Profit (Quarterly)
Media Business: Net Sales and Segment Profit (Quarterly Comparison) Special demand was created due to the launch of the new iPhone in September 2019. As a result, we achieved the record-high net sales on a quarterly basis in Q1. Though net sales decreased from in Q2, we had a steady growth excluding
Slide 43: Media Business: Changes in the Number of Monthly PV
Media Business: Changes in the Number of Monthly PV (Page View) In September 2019, after the release of the new iPhone, the number of PV (Page Views) exceeded 10 million per month for the first time! In January 2020, the number of PV exceeded 10 million per month again! By operating a wide variety o
Slide 44: Media Business: Topics in the First Half of FY2020
Media Business: Topics in the First Half of FY2020 We published research reports by our second-hand mobile market analysts, second-hand evangelists, and provided the latest information based on our company’s large amount of transaction data, etc. Published research reports, Research results by "Taka
Slide 45: Media business: Acquired Saiyasu-Syuuri.com
Media business: Acquired "Saiyasu-Syuuri.com" (Q3: Acquired in February 2020) We provided repair service information, utilizing our network of repairers throughout Japan. Number of stores paying listing fees Approx. 300 stores (Total listing of 19,000 stores) Number of users per month 570,000 users
Slide 46: Mobile & Telecommunications Business
Mobile & Telecommunications Business 45
Slide 47: Mobile & Telecommunications Business: Business Contents
Mobile & Telecommunications Business: Business Contents We develop budget SIM service and WiMAX, high-speed telecommunication service, as an option to realize smart consumption in telecommunication service. 46
Slide 48: Ratio of Telecommunication Costs in Household Expenses
Mobile & Telecommunications Business: The Ratio of Telecommunication Costs in Household Expenses The ratio of telecommunication costs in household expenses are rising. Telecommunication costs and the ratio of telecommunication costs in household expenses Unit: 10 thousand yen) Telecommunications cos
Slide 49: Mobile & Telecommunications Business: Changes in Net Sales
Mobile & Telecommunications Business: Changes in Net Sales (in the last 3 years by half period) Net sales increased by two times year-on-year to 1.6 billion yen, resulting in record-high net sales for a half period! Sending customers from our media business has been favorable. (Unit: million yen) 2,
Slide 50: Mobile & Telecommunications Business: Net Sales and Segment Profit (Quarterly)
Mobile & Telecommunications Business: Net Sales and Segment Profit (Quarterly Comparison） As well as the media business, mobile & telecommunications business resulted in record-high net sales in Q1 due to the special demands from the media business! In Q2, net sales decreased from the previous quart
Slide 51: Mobile & Telecommunications Business: Total Number of subscriptions
Mobile & Telecommunications Business: Total Number of subscriptions Number of contracts increased steadily since the launch of the services in September 2016. The cumulative number of subscriptions has increased to 45,000. (Currently, ME Mobile Co., Ltd. is not working for acquiring new customers fo
Slide 52: Mobile & Telecommunications Business: Strengthening Optional Services
Mobile & Telecommunications Business: Strengthening Optional Services By enhancing various optional services in addition to mobile telecommunication devices, we aim to improve our customer satisfaction and acquire new customers. One of the lowest in the industry Now Apply right Free of now ! charge
Slide 53: We will make our customers' consumption activities better
[Through our 3 businesses] We will make our customers’ consumption activities better As consumption activities are diversified, We will establish an "optimized trading company (focused on second-hand business)" to provide optimal options for smart consumer. Information Buying any goods demand Want t
Slide 54: Agenda
Company Overview and Business contents FY2020 2Q Financial Results for fiscal period Ending June 30 Agenda (1) First half financial results (2) Overview by segment Consolidated Forecast Status of IR Activities 53
Slide 55: Forecast for the Full Fiscal Year Ending June 2020
Forecast for the Full Fiscal Year Ending June 2020 Net sales of all three businesses segments are expected to increase. As for profits, we will implement prior investments that lead to further growth in the next fiscal year onward, having record-high profits. FY2020 ending FY2019 ended Unit: million
Slide 56: Full-year Forecast and Progress rate comparison
Full-year Forecast and Progress rate comparison Our net sales tend to be concentrated on the second half of each year. So, the progress rate for the first half tends to be less than 50%. However, the progress rate in this 1st half all exceeded 50% of the full-year forecasts. Progress rate was signif
Slide 57: Changes in Consolidated Net Sales
Changes in Consolidated Net Sales Net sales are expected to increase in 14 consecutive fiscal periods since our establishment, reaching 10 billion yen. (Unit: 100 million yen) 120 100 100 100 84 80 63 60 56 48 40 39 29 20 19 11 2 5 0 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2
Slide 58: Changes in Consolidated Operating Profit
Changes in Consolidated Operating Profit Operating profit is expected to exceed 600 million yen, reaching the record-high continuously. (Unit: 100 Billion yen) 6.0 6.0 6 Strategic investment period 5 4.5 4 3 2.3 2 10.8 0.9 0.9 0.0 0 -1 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 57
Slide 59: Agenda
Company Overview and Business contents FY2020 2Q Financial Results for Fiscal Period Ending June 30 Agenda (1) First half financial results (2) Overview by segment Consolidated Forecast Status of IR Activities 58
Slide 60: Status of Our IR Activities
Status of Our IR Activities IR Website Awards Changes in the number of interviews with institutional investors Renewed our IR website in June 2019 to improve We will enhance communication with our investors to facilitate our information dissemination for investors better understanding of our busines
Slide 61: Message regarding Our IR Activities
Message regarding Our IR Activities For any questions concerning today's briefing or whenever you wish, please contact us at below email address. We will be happy to answer any questions. ir@marketenterprise.co.jp We look forward to your continued support for our IR activities. 60
Slide 62: Statements include prospects, assumptions and forecasts
Please note that: statements in this material include prospects, various assumptions and forecasts for the future. Actual performance may vary significantly, depending on various factors. 61
Slide 63: Becoming Optimized trading company based on second-hand
Becoming “Optimized trading company” based on second-hand 62