Hennge K.k. · TSE:4475
Hennge K.k — Q1 FY09/2020 Earnings Presentation
52 slides from Hennge K.k's earnings presentation, February 2020
Slide 1: 1Q FY09/2020 Consolidated Financial Results
Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. 1Q FY09/2020 Consolidated Financial Results Febru
Slide 2: Table of contents
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Table of contents 1. 1Q FY09/2020 Consolidated Financial Results 2. FY2020 Full-year Forecasts 3. Growth Strategy 4. Corporate Overview 5. Appendix 2
Slide 3: 1Q FY09/2020 Consolidated Financial Results (Financial results)
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results 1Q FY09/2020 Consolidated Financial Results (Financial results) 3
Slide 4: Net sales
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Net sales Net sales increased by +20.5% YoY to 0.94 Billion yen. Net sales of HENNGE One, which is our key driver of growth, grew by +26.4% YoY. HENNGE One Professional service and others Total 26.4 (unit: Million yen) (unit: Million
Slide 5: Overview of consolidated financial results
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Overview of consolidated financial results (unit: Million yen) 1. Net sales rose by 20.5% YoY to 0.94 Billion yen . Net sales of HENNGE One rose by 26.4% YoY to 0.836 Billion yen. 2. Total selling, general and administrative expenses
Slide 6: Gross profit
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Gross profit Gross profit increased by 0.13 Billion yen YoY to 0.76 Billion yen. Gross profit margin improved by 0.1pt YoY to 81.2%. It remains at a high level. (unit: Million yen) +20.7% (＋0.13 Billion yen) (Reference) # of verified
Slide 7: Profit attributable to owners of parent
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Profit attributable to owners of parent From proactively investing into future growth, the SG&A to sales ratio increased by 9.5pt YoY to 81.5%. Profit attributable to owners of parent decreased by 47 Million yen YoY. (unit: Million y
Slide 8: SG&A (YoY)
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Structure of operating expenses (YoY, vs 1Q FY09/2019) SG&A to sales ratio 81.5 % (SG&A to sales ratio) (unit: Million yen) YoY The other SG&A fee increased by about 0.4 SG&A to sales Million yen YoY due to temporary expenses ratio (
Slide 9: SG&A (QoQ)
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Structure of operating expenses (QoQ, vs 4Q FY09/2019) QoQ (unit: Million yen) (unit: Million yen) (単位:百万円) The other SG&A fee increased due to investing in customer acquisition and Other SG&A +7 recruiting. Advertising +46 Advertisi
Slide 10: Breakdown of employees
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Breakdown of employees 158 employees (Excluding part-time employees, as of 2019-12-31) 10
Slide 11: (Business results)
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results 1Q FY09/2020 Consolidated Financial Results (Business results) 11
Slide 12: Business highlights
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Business highlights ● Advertising and Events ○ Event 'HENNGE NOW!' (Nov 2019) Held our largest-ever event 'HENNGE NOW!' to promote the adoption of SaaS within business to increase our future customer bases. ○ Events with our partner
Slide 13: Advertising and Events
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Advertising and Events Event 'HENNGE NOW!' (Nov 2019) Held to promote the adoption of SaaS within business to increase our future customer bases. Many visitors joined, including SaaS companies, our sales partners, and current custome
Slide 14: Office renewal
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Office renewal Renewal of our Tokyo Shibuya HQ Office (Nov 2019) We aimed not only for preparation for the increase of # of employees with our future growth in business but also for our employees to be able to activate their ideas an
Slide 15: Our survey
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Our survay SaaS usage survey to our clients (Dec 2019) According to our survey results, our clients are using 7 cloud services per company on average, and 24％ of our clients are using more than 10 cloud services. Survey overview: Saa
Slide 16: (KPI results)
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results 1Q FY09/2020 Consolidated Financial Results (KPI results) 16
Slide 17: HENNGE One KPIs
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results HENNGE One KPIs # of HENNGE One # of HENNGE One contracted HENNGE One ARR contracted companies users YoY +20.9% YoY +23.2% YoY +26.5% (as of 2019-12-31) (as of 2019-12-31) (as of 2019-12-31) (unit: companies) (unit: users) (unit: Mil
Slide 18: KPI Highlights
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results KPI Highlights 1. Average monthly churn rate over the past 12 months for HENNGE One rose by 0.01pt QoQ to 0.13%. It remains at a low level. 2. 59 companies QoQ The number of user companies of HENNGE One increased by to1,487 companies
Slide 19: HENNGE One Churn rate
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results HENNGE One Churn rate Average monthly churn rate over the past 12 months for HENNGE One rose by 0.01pt QoQ to 0.13%. It remains at a low level. We continue to achieve a stable and sustainable growth model. Average monthly churn rate
Slide 20: HENNGE One contracted companies & users
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results HENNGE One contracted companies & users + 0.104 Million users + 59 companies 20
Slide 21: HENNGE One ARR & ARPU
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results HENNGE One ARR & ARPU -17yen per user +0.172 Billion yen 21
Slide 22: FY09/2020 Full-year Forecasts
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results FY09/2020 Full-year Forecasts 22
Slide 23: Overview of FY09/2020 full-year forecasts
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Overview of FY09/2020 full-year forecasts (unit: Million yen) 1. There is no change to our full-year forecast from the announcement at the beginning of the fiscal year. 2. Net sales is expected to grow by 19.9% on a YoY basis. Operat
Slide 24: FY09/2020 forecasts of net sales by business
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results FY09/2020 forecasts of net sales by business The progress rate of this quarter’s net sales of HENNGE One towards the full-year forecast was 23.1%. HENNGE One Professional service and others (unit: Million yen) (unit: Million yen) 24
Slide 25: FY09/2020 forecasts of operating expenses
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results FY09/2020 forecasts of operating expenses As we invested proactively in IPO related fees, recruiting, office expansion, holding the event “HENNGE NOW!” in this quarter, the progress rate of this quarter’s operating expenses towards t
Slide 26: FY09/2020 forecasts of operating income
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results FY09/2020 forecasts of operating income As most of our net sales are recurring revenue, net sales was expected to keep increasing quarterly. It is expected to realize the profit level as announced at the beginning of the fiscal year.
Slide 27: Growth Strategy
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Growth Strategy 27
Slide 28: Maximize LTV
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results maximize LTV LTV = ARR × Y × r Y = [Average contract duration in years] r = [Gross profit rate] ARR = N × n × ARPU N = [# of contracted companies] n = [Average # of contracted users per contracted company] ARPU = [Average Revenue Per
Slide 29: Maximize ARR
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results maximize ARR ARR ＝ N × n × ARPU maximize N maximize n N = # of Contracted n = Average # of contracted companies users per contracted company - Increase our sales force maximize - Increase our customer success power ARR - Expand our b
Slide 30: Formula to our growth strategy
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Formula to our growth strategy Focus on increasing # of contracted companies in the short term, while aiming to increase ARPU in the medium to long term. 30
Slide 31: Our growth strategy on and after FY09/2021
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Our growth strategy on and after FY09/2021 Because HENNGE One is an IDaaS, we will grow together with the SaaS adoption in business. Communication SaaS SaaS for File Exchange Sales/Marketing SaaS SaaS for SaaS for HR Accounting Estab
Slide 32: Corporate Overview
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Corporate Overview 32
Slide 33: Corporate profile
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Corporate profile Company name：HENNGE K.K. Executives： Kazuhiro Ogura Representative Director & Chief Executive Officer Kazuaki Miyamoto Representative Director & Executive Vice President Yoshiki Nagatome Director & Executive Vice Pr
Slide 34: Locations
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Locations Japan Taiwan Nagoya branch office 2016/8 Tokyo Head office Osaka branch office 2015/6 Fukuoka branch office 2018/8 34
Slide 35: Liberation of Technology
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results VISION 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 35
Slide 36: History
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results History Our business domain is ever-changing, but our will remains steadfast. Linux server management software Establishment HENNGE One HDE Controller eCRM software IoT as a Service HDE Customers Care (f.k.a. HDE mail service) HENNGE
Slide 37: Sales structure by business
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Sales structure by business 88.9% of net sales is that of HENNGE One business in this quarter. (as of 1Q FY09/2020) 37
Slide 38: HENNGE One
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results HENNGE One Identity as a Service (IDaaS) Provides centralized authentication to various SaaS-es, with Single-Sign-On (SSO) technology. ID Federation Access Control Customizable policy Administrator Various cloud services LAN User Man
Slide 39: HENNGE One features
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results HENNGE One Also provides useful features that help companies to move their workload onto the cloud. 1. HENNGE Access Control Unknown Device Deny 3. HENNGE Email DLP Local Device Content Filtering Delayed Sending Encryption File Attac
Slide 40: HENNGE One Solid customer base
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results HENNGE One Solid customer base HENNGE One is used by 1,428 customers in various industries, and used by 1.776 Million users. (as of 2019-12-31) 40
Slide 41: Appendix
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Appendix 41
Slide 42: Recurring revenue ratio
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Recurring revenue ratio Recurring revenue ratio grew 1.9pt YoY to 98.7%. We continue to achieve a strong and stable recurring revenue model. (unit: Million yen) 42
Slide 43: Appendix: HENNGE One Solid customer base
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Appendix : HENNGE One Solid customer base Cloud-type Single Sign-on Service About 10 % of Japanese listed companies are using HENNGE One. Based on (An in-company investigation) shipment quantity Average of contracted users per contra
Slide 44: Growth in # of Contracted companies (N)
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Growth in # of Contracted companies(N) As for the domestic market, there are still a lot of potential markets. First, we will focus on getting the reach of the companies with 200 or more employees due to acquisition cost-effectivenes
Slide 45: Growth in # of Contracted companies (N)
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Growth in # of Contracted companies(N) We will focus on increasing our customers not only in Tokyo but also in Tokai, Kansai, Kyushu area to get the first-mover advantage. Tokyo Osaka Fukuoka Nagoya 45
Slide 46: Past materials
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Past materials 46
Slide 47: Diversity within our organization
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results Diversity within our organization We are putting effort into our Global Internship Program. We promote diversity to make our company more resilient to changes. (unit: employees) Application (Accum.) 140 countries & regions (approx.)
Slide 48: New service: HENNGE Workstyle
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results New service Release of HENNGE Workstyle (Feb, 2019) Improve your workstyle through IoT and the Cloud 48
Slide 49: New service: Chromo Education
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results New service Release of Chromo Education (April, 2019) Improve communication and engagement between Local Governments and their residents, especially for kids. 49
Slide 50: New plan of HENNGE One
HENNGE K.K. (TSE:4475) Q1 FY09/2020 Consolidated Financial Results New plan of HENNGE One (from June 2019) 50
Slide 51: Disclaimer
HENNGE K.K. (TSE:4475) Q1 FY09/2020 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 52: HENNGE
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