M&a Capital Partners Co. Ltd. · TSE:6080
M&a Capital Partners — FY2022 Earnings Presentation
71 slides from M&a Capital Partners's earnings presentation, Oct 28, 2022
Slide 1: 2022 Financial Results
2022 Financial Results October 28th, 2022
Slide 2: Agenda
Agenda 1 Results P3 2 Growth Strategy P14 3 Company Overview P26 4 Characteristics and Strengths of M&A Capital Partners P33 5 Social Significance of M&A Capital Partners P49 6 M&A Capital Partners’ Sustainability Initiatives P60 7 Business Environment P65 1 Presentation Materials for the Earnings B
Slide 3: Executive Summary (Consolidated)
Executive Summary (Consolidated) Achieved record results and record number of deals closed Continued strong performance due to increase in the large deals that are a strength of the MACP Group Results even exceeded upward revision to full-year earnings forecasts announced in September 2022 Despite s
Slide 4: Agenda
1 Results P3 2 Company Overview P14 3 Growth Strategy P27 4 Characteristics and Strengths of M&A Capital Partners P36 5 Social Significance of M&A Capital Partners P48 6 M&A Capital Partners’ Sustainability Initiatives P61 7 Business Environment P65 3 Presentation Materials for the Earnings Briefing
Slide 5: Non-consolidated Financial Highlights for FY Ended September 30, 2022
Non-consolidated Financial Highlights for the Fiscal Year Ended September 30, 2022 M&A Capital Partners Co., Ltd. RECOF Corporation Result Year-on-year Change Result Year-on-year Change Net sales 17,810 million yen +28.7% 2,518 million yen +133.4% Ordinary 9,076 million yen +31.7% 953 million yen －
Slide 6: Changes in Earnings
Changes in Earnings In 9 years since listing (year ended September 2013), sales have increased rapidly by more than 18x. Forecast for full year Progress for full year Units: Millions of yen Result for the year (post-revision) ( post-revision) Net sales and ordinary Net sales 20,706 19,165 108.0% inc
Slide 7: Overview of FY09/22 Statements of Income (Consolidated)
Overview of FY09/22 Statements of Income (Consolidated) Achieved record net sales, operating income and ordinary income (Units: millions of yen, second line is composition ratio) FY09/22 (Consolidated) FY09/21 (Consolidated) Main Factors Causing Year-on-year Change Change Net sales 15,161 20,706 +36
Slide 8: Overview of FY09/22 Balance Sheet (Consolidated)
Overview of FY09/22 Balance Sheet (Consolidated) Solid financial condition backed by stable shareholders equity (Units: millions of yen, second line is composition ratio) September 30, 2021 September 30, 2022 (Consolidated) (Consolidated) Change Main Factors Causing Change Current assets 27,720 36,7
Slide 9: Number of Deals Made
Number of Deals Made The number of deals made exceeded forecasts and reached the highest level on record at 199 (up 15.7% year on year) Large deals* were also at the highest level on record at 48 (+33.3% year-on-year) Number of Deals Made Number of deals (consolidated) (Revised) (deals) Forecast for
Slide 10: Number of Active Deals (Non-consolidated)
Number of Active Deals (Non-consolidated) 317 active deals (-11.9% year on year) Although there was a slight decrease in normal deals, highly profitable large deals are increasing Number of Active Deals (Non-consolidated) (Number of deals) 400 379 347 350 360 357 352 341 350 328 328 354 338 300 274
Slide 11: Number of Consultants
Number of Consultants Despite non-consolidated setting record high, consolidated -6 YoY to 162 With recruitment for FY9/23 going well, we forecast 25% increase in personnel for full year (155 non-consolidated), compared to progress of 45.4% Number of Consultants Forecast 250 204 200 168 162 151 150
Slide 12: Market Capitalization
Market Capitalization Highest rate of growth among M&A intermediary companies listed on TSE Prime Market capitalization has increased about 9 times over the 9 years since listing. Market Capitalization Units: 100 million yen 2,500 2,033 1,966 2,000 1,966 1,654 1,532 1,589 1,500 1,383 1,176 1,072 1,0
Slide 13: Consolidated Earnings Forecasts for FY Ending September 30, 2023
Consolidated Earnings Forecasts for the Fiscal Year Ending September 30, 2023 Increase in large deals led to continuation of robust performance, Earnings and recruitment also strong Forecasts Aiming for further growth through active investment in priority initiatives (DX, advertising, head office re
Slide 14: Non-consolidated Earnings Forecasts for FY Ending September 30, 2023
Non-consolidated Earnings Forecasts for the Fiscal Year Ending September 30, 2023 Earnings Forecasts M&A Capital Partners Co., Ltd. RECOF Corporation Year-on-year Change Year-on-year Change Net sales 19,476 million yen +9.4% 2,616 million yen +3.9% Ordinary income 8,585 million yen -5.4% 869 million
Slide 15: Agenda
1 Results P3 2 Growth Strategy P14 3 Company Overview P26 4 Characteristics and Strengths of M&A Capital Partners P33 5 Social Significance of M&A Capital Partners P49 6 M&A Capital Partners’ Sustainability Initiatives P60 7 Business Environment P65 14
Slide 16: MACP Group Growth Strategy Going Forward
MACP Group Growth Strategy Going Forward To be the world’s leading To be the world’s leading investment bank investment bank One of the world’s leading M&A groups Flagship group that supports the Japanese economy Now Listed on Listed on Tokyo Stock Tokyo Stock Exchange Established Exchange First Sec
Slide 17: The MACP Group's Business Areas
The MACP Group’s Business Areas Providing the optimal M&A for every client Japan’s most professional M&A group Clients Large corporations Industry restructuring/Cross- border/Business succession Business continuity Medium-sized Financial advisory Growth strategy support enterprises Small companies C
Slide 18: Target Area for the MACP Group
Target Area for the MACP Group We support every client from small to large corporations with group synergy Main organizations capable of operating in each area Areas in which M&A Capital excels Major financial institutions Large Sales >= ¥10.0bn corporations M&A intermediary Medium-sized Sales >= ¥1
Slide 19: The MACP Group's Three-year Medium-term Vision
The MACP Group’s Three-year Medium-term Vision Three-year plan for the number of deals closed and the number of consultants required to achieve further growth FY9/2023 - FY9/2025 Number of Deals Number of Consultants M&A Capital Partners RECOF M&A Capital Partners RECOF 66 41 57 35 Average Average 3
Slide 20: Head office integration strategy
TOPICS 1. Head office integration strategy to further strengthen Group collaboration Solidly reinforcing infrastructure as a first step towards becoming Japan’s leading M&A group Group companies scheduled to relocate head offices, centered on Tokyo Station March 2023 Gran Tokyo North Tower December
Slide 21: DX strategy aimed at further growth
TOPICS 2. DX strategy aimed at further growth Promoting DX strategy to achieve further growth Building the most advanced M&A infrastructure in the industry by focusing on three priority items Improve matching Strengthen Enhance productivity ratio information security Alliance partner matching platfo
Slide 22: Selection as constituent of stock index
TOPICS 3. Selection as constituent of stock index M&A Capital Partners was selected as a constituent of the JPX-Nikkei Mid and Small Cap Index for FY2022 JPX-Nikkei Mid and Small Cap Index M&A Capital Partners was selected as a new constituent of the JPX-Nikkei Mid and Small Cap Index, which is join
Slide 23: Sole-sponsorship program on terrestrial television
TOPICS 4. Industry’s first sole-sponsorship program broadcast on terrestrial television Activities aimed at raising awareness of “business succession” as a leading company in the M&A intermediary industry Broadcast television program discussing case studies of M&A deals in which M&A Capital Partners
Slide 24: TV Commercial Advertising Activities
TV Commercial Advertising Activities Our role in raising awareness of “M&A” as a leading company in the M&A intermediary industry Popular “lion president” commercials have won unparalleled brand awareness Television commercial lineup - History of commercial slots since April 2022 - ■ TV Asahi Networ
Slide 25: Advertising Activities to Raise Awareness of M&A
Advertising Activities to Raise Awareness of “M&A” Interviews with business owners who have actually experienced M&A: “owner’s choices” Web content that depicts the feelings of business owners as they come to a decision about M&A Examples of most recent deals Pharmacy + Transfer of business Pharmacy
Slide 26: Advertising Activities to Raise Awareness of Fair M&A
Advertising Activities to Raise Awareness of “Fair M&A” Held seminars providing information on “Fair M&A” Strengthen seminars to advocate for “Fair M&A” and drive a sound M&A industry Industry + M&A seminar Geographic region + M&A seminar 25 Presentation Materials for the Earnings Briefing for the Y
Slide 27: Agenda
1 Results P3 2 Growth Strategy P14 3 Company Overview P26 4 Characteristics and Strengths of M&A Capital Partners P33 5 Social Significance of M&A Capital Partners P49 6 M&A Capital Partners’ Sustainability Initiatives P60 7 Business Environment P65 26
Slide 28: The M&A Capital Partners Philosophy
The M&A Capital Partners Philosophy - Management Philosophy - Aiming to be the world’s leading investment bank seeking maximum contributions to clients and the happiness of all employees Action Guidelines 1 2 3 We will continually pursue higher Our employees will achieve personal We are not a small-
Slide 29: Company Overview
Company Overview Trade Name M&A Capital Partners Co., Ltd. Listed Market Tokyo Stock Exchange Prime Market (Securities Code: 6080) Head Office Location 38F, Gran Tokyo North Tower,1-9-1 Marunouchi, Chiyoda-ku, Tokyo Business Content M&A-related services Representative Satoru Nakamura, President and
Slide 30: History
History Company ■ Company founded in Shinjuku-ku, Tokyo, for the purpose of carrying out M&A October 2005 established intermediary business February 2007 Relocation due to ■ Head office relocated to Kojimachi 3-chome, Chiyoda-ku, Tokyo growth of company November 2013 Listed on Tokyo ■ Listed on the
Slide 31: Business Content
Business Content Business Content M&A-related services Characteristics We provide advisory services for the realization of We propose M&A-focused solutions and support M&A standing between the transferor (seller) and them to implementation for company owners who the transferee (buyer) from an indepe
Slide 32: Brand
Brand Established the No.1 brand in Japan among M&A intermediary companies against a backdrop of unparalleled awareness • Research conducted by TOKYO SHOKO RESEARCH, LTD. Survey overview: As of March 31, 2022 Competitive survey for specified area of listed and major unlisted M&A intermediary compani
Slide 33: Deals
Deals Pharmacy Wholesaling Manufacturing IT/ information Real estate Retail and Other Pharmacy Building materials industry services Real estate brokerage distribution Lease/rental wholesaling Multi-unit apartment Metal products Data mining Supermarkets Temporary staffing Construction/ Wooden buildin
Slide 34: Agenda
1 Results P3 2 Growth Strategy P14 3 Company Overview P26 4 Characteristics and Strengths of M&A Capital Partners P33 5 Social Significance of M&A Capital Partners P49 6 M&A Capital Partners’ Sustainability Initiatives P60 7 Business Environment P65 33
Slide 35: M&A Capital Partners Corporate Identity
M&A CAPITAL PARTNERS CORPORATE IDENTITY Aiming to be the world’s leading investment bank seeking maximum contributions to clients and the happiness of all employees What has never changed since the founding of the company is our approach of always prioritizing the needs of the customer. Even within
Slide 36: Fee Structure
Fee Structure Since the founding of the company we have maintained a clear “no commencement fee” structure, which has become the de facto standard in the M&A intermediary industry, and which gives customers peace of mind when consulting with M&A Capital Partners Initial Calculation of Conclusion of
Slide 37: Compensation Calculated Using the Lehman Formula Based on Share Value
Compensation Calculated Using the “Lehman Formula Based on Share Value” Since the founding of the company we have used the Lehman Formula based on share value as the method for calculating fees, an approach that convinces customers and leads to dramatically lower fees What is the Lehman Formula? A g
Slide 38: Intermediary Commission Rate
Intermediary Commission Rate Since the founding of the company we have prioritized the needs of the customer, and charged the lowest intermediary commission rates in the M&A intermediary industry How it differs from other fixed-fee systems (difference between usual Lehman Formula based on total asse
Slide 39: Large Deals Where M&A Capital Partners Excels
Large Deals Where M&A Capital Partners Excels Achieving an extraordinary average value of share transfer in the M&A intermediary industry by working on many difficult large deals Handling difficult large deals Up by 10 deals year on year 25.7% Total number of 44 large M&A deals 1 in 4 deals are larg
Slide 40: M&A Capital Partners Business Model
M&A Capital Partners Business Model A “true M&A intermediary” that does not rely on just referrals A unique business model in the industry made possible by overwhelming ability to make direct proposals [Other companies] Business model based on “referrals” [MACP] Business model based on “ability to m
Slide 41: Corporate Identity: Happiness of All Employees
M&A CAPITAL PARTNERS CORPORATE IDENTITY Aiming to be the world’s leading investment bank seeking maximum contributions to clients and the happiness of all employees As well as being the driver of corporate growth, human resources are also the source of our unique brand. Since the founding of the com
Slide 42: Compensation Structure Attracting the Best Talent in Japan
Compensation Structure Attracting the Best Talent in Japan Average wages have been the highest in the industry for eight consecutive years, since the listing of the Company A structure offering the highest level of compensation in Japan has enabled us to assemble the country’s leading human resource
Slide 43: Reasons the Best Talent in Japan Is Required
Reasons the Best Talent in Japan Is Required Highly specialized and diverse M&A operations Importance of a sense of responsibility and mission to support growth of the Japanese economy Content of highly specialized and diverse M&A operations (1) Consideration/preparation (2) Approach/negotiation pha
Slide 44: Program for Developing the World's Best Talent
Program for Developing the World’s Best Talent We have created a training program for further developing the best talent in Japan into the best talent in the world 1. Specialist knowledge OJT roadmap Workshops Knowledge test Company valuation training 1 New hire role- Role-playing Sharing of case OJ
Slide 45: Corporate Culture That Has Achieved Unparalleled Growth
Corporate Culture That Has Achieved Unparalleled Growth in the M&A Intermediary Industry Individual growth is a source of growth of the organization as a whole Corporate culture that has emphasized teamwork, rooted in the management philosophy, since the founding of the company Point 1 We value not
Slide 46: Per-Person Productivity Unparalleled in the M&A Intermediary Industry
Per-Person Productivity Unparalleled in the M&A Intermediary Industry Unparalleled productivity per person in the M&A intermediary industry, proving that we have the best consultants in Japan Net sales per consultant Ordinary income per consultant 144.79 73.79 million yen million yen (+6.8% year-on-
Slide 47: DNA Passed On from the Founders of M&A in Japan
DNA Passed On from the Founders of M&A in Japan MACP Group Principles for Consultants to Abide by Wholeheartedly responding to customers’ resolutions. M&A Capital Partners’ passion for customers since the company was founded Satoru Nakamura M&A with heart Passion for customers that has continued sin
Slide 48: Aiming to be the world's leading investment bank
M&A CAPITAL PARTNERS CORPORATE IDENTITY Aiming to be the world’s leading investment bank seeking maximum contributions to clients and the happiness of all employees 47
Slide 49: Our Contribution to Sustainability of Japanese Economy through M&A
Our Contribution to Sustainability of Japanese Economy through M&A Our contribution to the sustainability of the Japanese economy since the Company was founded is over 1.6551 trillion yen In FY9/22, our contribution was 446.2 billion yen and 24,002 jobs in terms of sustainability of the Japanese eco
Slide 50: Agenda
1 Results P3 2 Growth Strategy P14 3 Company Overview P26 4 Characteristics and Strengths of M&A Capital Partners P33 5 Social Significance of M&A Capital Partners P49 6 M&A Capital Partners’ Sustainability Initiatives P60 7 Business Environment P65 49
Slide 51: Social Significance (Purpose) of M&A Capital Partners
Social Significance (Purpose) of M&A Capital Partners Drive “fair M&A” to realize a sound future for the Japanese economy 50 Presentation Materials for the Earnings Briefing for the Year Ended September 2022 Copyright © 2022 M&A Capital Partners Co., Ltd. All rights reserved
Slide 52: What is the Fair M&A concept?
What is the “Fair M&A” concept advocated by M&A Capital Partners? Ever since the founding of the Company, our concept of “Fair M&A” has been that of a “client-first M&A” that prioritizes the interests of the Social significance (purpose) customer. Our role is to guide clients to the best option thro
Slide 53: The Social Mission of M&A Capital Partners
The Social Mission of M&A Capital Partners Save as many SMEs as possible from closure, and contribute to growth of the Japanese economy through M&A Approx. 60,000 companies require A social issue in the headlines Absence of approximately 1.27 million successors support each year Approx. 1.27 million
Slide 54: Role as a Leading Company in the M&A Industry
Role as a Leading Company in the M&A Industry Toward the creation of a sound M&A intermediary industry to save approximately 60,000 business operators per year from “black-ink bankruptcy” Number of suspensions, closures and dissolutions Number of bankruptcies related to COVID-19 Approximately 60,000
Slide 55: SMEs Choosing to Close Business and Economic Loss
SMEs Choosing to Close Business and Economic Loss Increase in SMEs choosing to close business Further accelerated by uncertainty caused by COVID-19 Trend of suspensions, closures and dissolutions of SMEs Economic loss caused by suspensions and closures in 2021 Incidents per year Total net sales Empl
Slide 56: Three Choices of Company Owners
Three Choices of Company Owners Company owners are faced with three options when determining business succession Company value M&A 2 Public offering 3 (succession to third party) Generation change Succession to 1 successor Closure (liquidation) Second founding Founding Maturation period Time Growth
Slide 57: The Choice of M&A Saves SMEs from Closure
The Choice of M&A Saves SMEs from Closure M&A maintains employees’ jobs and relationships with business partners The personal suretyship is also lifted, making it the optimal means of maximizing founder’s profit Option ●Advantages ▲Disadvantages Termination of business (inconveniencing business 1 pa
Slide 58: Continually Growing M&A Market
Continually Growing M&A Market In Jan-Sep 2022, M&A deals involving Japanese companies reached 3,272, a record high for the period By market, both IN-IN and OUT-IN achieved new records Source: RCOF M&A Database M&A market expected to remain lively even after COVID-19 ■ OUT-IN Most recent: Jan-Sep 20
Slide 59: Continually Increasing M&A Advisory Firms
Continually Increasing M&A Advisory Firms The number of M&A advisory firms has increased sharply in recent years M&A advisory firms established since 2020 account for approximately half the total Number of M&A advisory firms registered with the Small and Cumulative total registrations by decade of M
Slide 60: Coordinated Initiatives by Government and the Private Sector
Coordinated Initiatives by Government and the Private Sector to Address Social Issues We have begun working with the Small and Medium Enterprise Agency to provide managers of SMEs with understanding of M&A and enable M&A advisory firms to conduct appropriate M&A in order to resolve the business succ
Slide 61: Agenda
1 Results P3 2 Growth Strategy P14 3 Company Overview P26 4 Characteristics and Strengths of M&A Capital Partners P33 5 Social Significance of M&A Capital Partners P49 6 M&A Capital Partners’ Sustainability Initiatives P60 7 Business Environment P65 60
Slide 62: Our Approach to Sustainability
Our Approach to Sustainability We will contribute to a sustainable future by encouraging the development of the Japanese economy and working to solve social problems. SDGs SDGs (Sustainable Development Goals): shared goals for international society to At a meeting held in November 2021, the Company’
Slide 63: Important Sustainability Issues (Materiality)
Important Sustainability Issues (Materiality) Build a base for infrastructure and End poverty everywhere, technological innovation, and ensure healthy lives for all develop sustainable human Work together in Decent work and settlements partnership to achieve economic growth Implementing business suc
Slide 64: ESG Initiatives
ESG Initiatives Implement ESG initiatives through M&A-related services Our approach to ESG Environment The sharp rise in suspensions and closures of SMEs in Japan is widely recognized to be an important issue. According to calculations made by the Small and Medium Enterprise Agency, if it is left to
Slide 65: Evaluation of Initiatives for SDGs/ESG
Evaluation of Initiatives for SDGs/ESG February 2022 Forbes JAPAN Selected in the potential ranking for “Growth stocks expected to improve performance due to promotion of SDGs/ESG” COMPANIES WITH POTENTIAL RANKING “Growth stocks expected to improve performance due to promotion of SDGs/ESG” published
Slide 66: Agenda
1 Results P3 2 Growth Strategy P14 3 Company Overview P26 4 Characteristics and Strengths of M&A Capital Partners P33 5 Social Significance of M&A Capital Partners P49 6 M&A Capital Partners’ Sustainability Initiatives P60 7 Business Environment P65 65
Slide 67: Current Business Environment
Current Business Environment Ages of company presidents are higher than ever The number of companies without successors also remains high Average age of company presidents 61.5% of companies do not have a successor 6 1 .0 60.3 Two in three companies do not have a successor 6 0 .0 5 9 .0 5 8 .0 5 7 .
Slide 68: High Latent Needs for Business Succession
High Latent Needs for Business Succession 70% of company owners are conscious of business succession but have not reached the point of planning It is necessary to dig up latent needs for M&A Gap between business succession awareness and planning Issues in implementation of business succession Past d
Slide 69: Scale of the Business Succession M&A Market
Scale of the Business Succession M&A Market There is still a large business succession M&A market, and approaches will continue to be made to companies with business succession needs Targets of Business Succession M&A It is estimated that the targets for business succession M&A number around 240,000
Slide 70: Business Succession M&A and Business Growth M&A
Business Succession M&A and Business Growth M&A “Business succession M&A” resolving the absence of successor, which continues to be in demand “Business growth M&A” leading to growth with an eye to the future that has been increasing in recent years Management’s reasons for transferring the business
Slide 71: Handling of These Materials
Handling of These Materials The plans, forecasts and strategies, etc. contained in these materials are forecasts on future performance based on information available at the time the materials were prepared, and these include inherent risk and uncertainty. Actual performance may differ from forecasts