Hennge K.k. · TSE:4475
Hennge K.k — FY2023 Earnings Presentation
70 slides from Hennge K.k's earnings presentation, Nov 10, 2023
Slide 1: FY09/2023 Full-year 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. FY09/2023 Full-year Consolidated Financial Results HENNGE
Slide 2: Table of Contents
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Table of Contents 1. FY09/2023 Full-year Consolidated Financial Results 2. FY09/2024 Full-year Forecasts 3. Growth Strategy 4. Appendix Corporate Overview Total Addressable Market Others 5. Past Materials 2
Slide 3: Financial Results
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results FY09/2023 Full-year Consolidated Financial Results (Financial Results) 3
Slide 4: Overview of Consolidated Financial Results
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Overview of Consolidated Financial Results (YoY, 12 months accumulated comparison) (unit: JPY million) 1. The net sales rose by 20.0% YoY to JPY 6.78B. The sales of HENNGE One rose by 21.0% YoY to JPY 6.25B. 2. The total SG&A
Slide 5: Quarterly Trend of Net Sales
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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) FY09/2023 Full-year Consolidated Financial Results Net Sales (YoY, 12 months accumulated comparison) The net sales increased by 20.0% YoY to 6.78B yen. The sales of HENNGE One, our key driver of the growth, grew by 21.0%. Total ■ Professional service and others ■ HENNGE One Yo
Slide 7: Quarterly Trend of Gross Profit
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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) FY09/2023 Full-year Consolidated Financial Results Gross Profit (YoY, 12 months accumulated comparison) The gross profit increased by 0.91B yen YoY to 5.68B yen. The gross profit margin decreased by 0.7pt YoY to 83.8%, but remains high. ● Gross profit margin ■ Gross profit Gross pr
Slide 9: SG&A: Structure of Operating Expenses
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Structure of Operating Expenses (YoY, 12 months accumulated comparison) SG&A to sales ratio 73.3% SG&A to sales SG&A to sales ratio ratio 76.3% (YoY) Other SG&A increased YoY mainly due to energetic recruitment activities and
Slide 10: SG&A: QoQ Structure of Operating Expenses
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Structure of Operating Expenses (QoQ comparison of Q3 FY09/2023 & Q4 FY09/2023) (unit: JPY million) QoQ Other SG&A increased QoQ due to the energetic recruitment activities, and an Other SG&A +90M JPY increase in transportatio
Slide 11: Quarterly Trend of Net Sales and Operating Expenses
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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 F
Slide 12: Breakdown of Employees by Function
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Breakdown of Employees by Function 283 (Excluding part-time employees, as of 2023-09-30) 12
Slide 13: Number of Employees
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Number of Employees A net increase of 40 employees compared to the end of the previous fiscal year. Steady progress in recruiting experienced IT sales members, which was the top priority. ■ Others ■ Professional service ■ Busin
Slide 14: Cash Flow Statement
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Cash Flow Statement (YoY, 12 months accumulated comparison) (unit: million yen) (unit: million yen) CF from operating activities Increased by JPY 0.45B YoY, mainly due to most of the income consists of upfront payments for ann
Slide 15: Business Activities
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results FY09/2023 Full-year Consolidated Financial Results (Business Activities) 15
Slide 16: Business Highlights
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Business Highlights ● Advertisements and events ○ Exhibiting and participating in events in Osaka, Nagoya, and Fukuoka, such as “Japan IT Week Nagoya” (July to September 2023) ○ Hosting “IT Leaders Roundtable” in Osaka (August
Slide 17: Advertising Activities in Q4 FY2023
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Advertising Activities in Q4 FY2023 In Q4, we carried out the multi-layered advertising activities in accordance with the initial plan for FY23, such as exhibitions and advertisements at Haneda Airport. Exhibition at “Japan IT
Slide 18: Renewal of Service Lineup for HENNGE One
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Renewal of Service Lineup for HENNGE One The several license lineups for HENNGE One will be revised from April 2024. HENNGE One Basic A set plan that offers the best value when implementing all the @JPY600/mon @JPY800/mon featu
Slide 19: KPI Results
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results FY09/2023 Full-year Consolidated Financial Results (KPI Results) 19
Slide 20: HENNGE One KPI Highlights
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One KPI Highlights (Progress in 12 months, compared to the end of FY09/2022) # of user companies (N) # of contracted users ARR 2,610 companies 2.38M users JPY 6.93B increased by 397 companies increased by 56K users incr
Slide 21: HENNGE One KPI
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One KPI (YoY, compared to the end of Q4 FY09/2022) # of contracted companies # of contracted users ARR YoY +17.9% YoY +2.4% YoY +23.7% (unit: companies) (unit: users) (unit: JPY million) +397 +56K + JPY companies users
Slide 22: HENNGE One Gross Revenue Churn Rate
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One Gross Revenue Churn Rate From Q1 FY23, besides the conventional reasons for our cancellations, there were some cancellations triggered by the migration to new license lineups. Still, we maintain a stable and sustain
Slide 23: HENNGE One Contracted Companies & Users
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One Contracted Companies & Users Relatively small contracts were acquired stably, resulting in a steady increase in the number of contracted companies. QoQ -40K users ● HENNGE One Contracted Users (K users) ■ HENNGE One
Slide 24: HENNGE One ARR & ARPU
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One ARR & ARPU ARPU increased significantly due to providing new license lineups to new/existing customers and special factor(P.25). ARR increased significantly. QoQ + JPY 205 per user ● HENNGE One ARPU (JPY per user) ■ H
Slide 25: The Decrease in the Number of Contracted Users for HENNGE One
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results The Decrease in the Number of Contracted Users for HENNGE One Associated with plan change, # of users for one educational institution decreased from 90K to 3K due to changes in the users to be charged. This is a very special c
Slide 26: FY09/2024 Full-year Forecasts
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results FY09/2024 Full-year Forecasts 26
Slide 27: Our Policy of FY2024
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Our Policy of FY2024 To accelerate mid-term growth in HENNGE One ARR, continuously developing new features and services, providing them to customers, and building a more solid organization by enhancing our talent acquisition c
Slide 28: Overview of FY2024 Forecasts
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Overview of FY2024 Forecasts (unit: JPY million) 1. The sales of HENNGE One, our key driver of growth, is expected to grow by 24.2% YoY. The sales of Professional service and others is expected to grow by 5.8% YoY. 2. The net
Slide 29: FY2024 Forecasts of Sales by Business
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results FY2024 Forecasts of Sales by Business Sales of HENNGE One business is expected to grow by 24.2% YoY to 7.76B yen. Professional service HENNGE One and others (unit: JPY million) (unit: JPY million) ■ Actual ■ Forecast 29
Slide 30: FY2024 Forecasts of Operating Expenses
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results FY2024 Forecasts of Operating Expenses Advertising expenses is expected to increase by 4.4% YoY to 0.67B yen. Operating expenses excluding advertising expenses is expected to increase by 23.5% to 6.69B yen. Operating expenses
Slide 31: Growth Strategy
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Growth Strategy 31
Slide 32: Liberation of Technology
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Corporate Philosophy 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 32
Slide 33: Maximize LTV
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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] AR
Slide 34: Maximize ARR
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Maximize ARR ARR ＝ N × n × ARPU maximize N maximize n N = # of contracted companies n = Average # of contracted ● Increase our sales force users per contracted company ● Extend our presence in a wider region Maximize ● Approac
Slide 35: Progress of Our Growth Strategy (HENNGE One)
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Progress of Our Growth Strategy (HENNGE One) Aim to accelerate ARR growth by focusing on increasing N and ARPU. 35
Slide 36: HENNGE One Family, Supporting Customers' Change
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One Family, Supporting Customers’ Change Supporting customers’ SaaS utilization and continuously liberate technology. HENNGE Cloud Protection HENNGE Coming HENNGE Secure Download Soon! Messaging Security Secure Transfer
Slide 37: Growth Strategy
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Growth Strategy 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 and raising ARPU (unit : JPY million) 37
Slide 38: HENNGE
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Slide 39: Appendix (Corporate Overview)
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Appendix (Corporate Overview) 39
Slide 40: Corporate Profile
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Corporate Profile Company name : HENNGE K.K. Executives : Kazuhiro Ogura Representative Director, President and CEO/CTO Kazuaki Miyamoto Representative Director, Executive Senior Vice President Yoshiki Nagatome Director, Execut
Slide 41: Locations
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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) FY09/2023 Full-year Consolidated Financial Results Corporate Philosophy 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) FY09/2023 Full-year Consolidated Financial Results History Our business domain is ever-changing, but our will remains steadfast. Linux server management eCRM software HENNGE One IoT as a Service Establishment software HDE Customers Care (f.k.a. HDE mail service) HENNGE Worksty
Slide 44: Sales Structure by Business
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Sales Structure by Business 92.2% of the net sales comes from HENNGE One business. JPY 6.78 B ● HENNGE One ● Professional service and others (FY2023) 44
Slide 45: HENNGE One
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One Provide services that remove obstacles for companies trying to improve productivity by adopting cloud in one-stop. Enhance security and usability of cloud to all the employees by having company-wide implementation.
Slide 46: HENNGE One - IdP Features
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One - IdP Features IDaaS provides cross-sectional secure access and SSO for various cloud services used by companies. Access Control ID Federation Customizable policy Administrator Various cloud services SSO Microsoft 3
Slide 47: HENNGE One Solid Customer Base
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE One Solid Customer Base HENNGE One is used by 2,610 customers in various industries, and has 2.38 million users. Average number of contracted users per contracted company is approximately 912. (as of 2023-09-30) Breakdo
Slide 48: Appendix (Total Addressable Market)
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Appendix (Total Addressable Market) 48
Slide 49: Cloud Adoption Rate in Japan
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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 ʻAverage Cloud Computing Adoption Rate in Japan’ in June 2021 by Gartner, Inc. URL of the original re
Slide 50: Number of Companies by Employee Size in Japan
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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 653 ■ # of companies by each employee scale 5000 - ID managem
Slide 51: Regional Split in the number of companies
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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. T
Slide 52: Appendix (Others)
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Appendix (Others) 52
Slide 53: Eat unripe fruits, and make mistakes early
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Our 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, a
Slide 54: HENNGE WAY
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results HENNGE WAY HENNGE WAY is our code of conduct in order to keep changing with challenges and failures. 54
Slide 55: Diversity and Inclusion
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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 org
Slide 56: Diversity
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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. Encourag
Slide 57: Business Investments and New Business Development
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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.
Slide 58: Past Materials
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Past Materials 58
Slide 59: Three New Features for HENNGE One
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Three New Features for HENNGE One HENNGE One’s new features providing more secure file transfer, smartphone access security, and E-Mail protection from targeted attacks were launched in October 2021. HENNGE Secure Download Reci
Slide 60: New Feature HENNGE Connect
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results New Feature “HENNGE Connect” “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 cloud. Cloud Service
Slide 61: New Feature HENNGE Secure Download for Box
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results New Feature “HENNGE Secure Download for Box” We launched “HENNGE Secure Download for Box”, a PPAP-free solution in June 2023. With the e-mail misdirection prevention feature of HENNGE One, it enables secure file-sharing process
Slide 62: New Feature HENNGE Access Control API
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results New Feature “HENNGE Access Control API” We released APIs for “HENNGE Access Control”, as HENNGE One’s new feature in June 2023. Enables seamless integration with external systems, automating ID-related tasks and retrieving log
Slide 63: New Service tadrill
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results New Service “tadrill” In November 2022, we launched “tadrill”, a self-implementing targeted e-mail attack training service. It enables companies to improve their employees’ security awareness by continuous and practical e-mail
Slide 64: Customers Mail Cloud
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Customers Mail Cloud Cloud e-mail delivery service that enables companies to send e-mails reliably and easily. Send notifications with high delivery rate for immediate notifications of purchases/reservations, bulk notifications,
Slide 65: Marketing Activities for HENNGE One
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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 exp
Slide 66: License lineup for HENNGE One (June 2019 - September 2021)
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results License lineup for HENNGE One (June 2019 - September 2021) ※ New contracts taken into place after October 2021 will apply new license lineup which was announced in August 2021. 66
Slide 67: Renewal of Service Lineup for HENNGE One (October 2021 - March 2024)
HENNGE K.K. (4475:TYO) FY09/2023 Full-year Consolidated Financial Results Renewal of Service Lineup for HENNGE One (October 2021 - March 2024) Service lineups were renewed from October 2021. Approaching varieties of customers with high value-added suite plans, as well as setting up single-function p
Slide 68: Glossary
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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 (Ave
Slide 69: Disclaimer
HENNGE K.K. (4475:TYO) FY09/2023 Full-year 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 solici
Slide 70: HENNGE
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