Hennge K.k. · TSE:4475
Hennge K.k — FY2019 Earnings Presentation
41 slides from Hennge K.k's earnings presentation, November 2019
Slide 1: FY2019 Full Year 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. FY2019 Full Year Consolidated Financial Results N
Slide 2: Table of contents
Table of contents 1. FY09/2019 Consolidated Financial Results 2. Growth Strategy 3. FY09/2020 Full-year Forecasts 4. Corporate Overview 5. Appendix 2
Slide 3: FY09/2019 Consolidated Financial Results
FY09/2019 (from Oct 2018 to Sept 2019) Consolidated Financial Results 3
Slide 4: Overview of consolidated financial results
Overview of consolidated financial results (unit: Million yen) 1. Net sales rose by +20.9% YoY to 3.43 Billion yen. Net sales of HENNGE One rose by +27.4% YoY to 2.92 Billion yen. 2. Gross profit margin improved by 4.6pt YoY to 82.3%. 3. Profit attributable to owners of parent decreased by 15 Millio
Slide 5: Net Sales
Net Sales Net sales increased by +20.9% YoY to 3.43 Billion yen. Net sales of HENNGE One, which is our key driver of growth, grew by +27.4% YoY. (unit: Million yen) 120.9% Net sales YoY +20.9% 127.4% Net sales of HENNGE One business YoY +27.4% 5
Slide 6: Gross profit and gross profit margin rate
Gross profit and gross profit margin rate Gross profit margin improved by 4.6pt YoY to 82.3% due to improvement in the HENNGE One foundation system. (unit: Million yen) Gross profit margin 82.3% (as of FY2019) Gross profit YoY +28.0% Service availability Over 99.9% (as of FY2019) 6
Slide 7: Profit attributable to owners of parent
Profit attributable to owners of parent From proactively investing into future growth, the SG&A to sales ratio increased by 6.2pt YoY to 76.9%. Profit attributable to owners of parent decreased by 15 Million yen to 0.11 Billion yen. (unit: Million yen) (unit: Million yen) FY2018 FY2019 SG&A to sales
Slide 8: Structure of Operating expenses
Structure of Operating expenses(Cost of sales＋SG&A) (unit: Million yen) The other SG&A fee(especially Rent, supplies expenses, and depreciation) increased compared to the previous year due to Office expansion and IPO. We changed our corporate name and hold branding and marketing activities. SG&A As
Slide 9: Cash flow statement
Cash flow statement (unit: Million yen) Temporary payments, for example, office expansion fees (security deposit, fixtures and equipment, and so on), IPO related fees, and the shift in salary payment dates. 0.42 Billion yen The amount of increase compared to the previous year, for example, tax payme
Slide 10: Breakdown of employees
Breakdown of employees 154 employees (Excluding part-time employees, as of 2019-09-30) 10
Slide 11: Business highlights
Business highlights ● Advertising and Events ○ Advertisements due to change of company name Tokyo, Osaka, Nagoya ○ Event “HENNGE One Meetup!” Held across 6 Japanese cities (Yokohama, Omiya, Shizuoka, Nagoya, Hiroshima, Fukuoka) and Taiwan. ○ Events with our partner in order to strengthen the relatio
Slide 12: New service: HENNGE Workstyle
New service Release of HENNGE Workstyle (Feb, 2019) Improve your workstyle through IoT and the Cloud 12
Slide 13: New service: Chromo Education
New service Release of Chromo Education (April, 2019) Improve communication and engagement between Local Governments and their residents, especially for kids. 13
Slide 14: New plan
New plan Change the plan of HENNGE One (June, 2019) 14
Slide 15: KPI Highlights
KPI Highlights 1. Recurring revenue ratio grew 2.4pt YoY to 96.1%. We continue to achieve a strong and stable recurring revenue model. 2. Average monthly churn rate over the past 12 months for HENNGE One improved by 0.03pt YoY to 0.12%. This means that the theoretical average lifetime is over 69 yea
Slide 16: Recurring revenue ratio
Recurring revenue ratio Recurring revenue ratio grew 2.4pt YoY to 96.1%. We continue to achieve a strong and stable recurring revenue model. (unit: Million yen) Recurring revenue ratio 96.1% (as of 2019-09-30) 16
Slide 17: HENNGE One: Churn rate
HENNGE One: Churn rate Average monthly churn rate over the past 12 months for HENNGE One improved by 0.03pt compared to the previous year and remains at a low level. We continue to achieve a stable and sustainable growth model. Average monthly churn rate over the past 12 months Theoretical average l
Slide 18: HENNGE One: other KPIs
HENNGE One: other KPIs # of HENNGE One # of HENNGE One HENNGE One ARR contracted companies contracted users YoY +27.0% YoY +21.4% YoY +22.0% (as of 2019-09-30) (as of 2019-09-30) (as of 2019-09-30) (unit: companies) (unit: users) (unit: Million yen) 18
Slide 19: Solid customer base
Solid customer base HENNGE One is used by 1,428 customers in various industries. (as of 2019-09-30) 19
Slide 20: Growth Strategy
Growth Strategy 20
Slide 21: Maximize LTV
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 User] 21
Slide 22: Maximize ARR
maximize ARR ARR ＝ N × n × ARPU maximize N maximize n N = # of Contracted n = Average # of contracted companies users per contracted company maximize - Increase our sales force - Increase our customer success power - Expand our business within the Tokai/Kansai/Kyushu area as well as ARR - Target lar
Slide 23: FY09/2020 Full-year Forecasts
FY09/2020 (from Oct, 2019 to Sept, 2020) Full-year Forecasts 23
Slide 24: Overview of FY2020 full-year forecasts
Overview of FY2020 full-year forecasts (unit: Million yen) 1. Net sales is expected to grow by 19.9% on a YoY basis. 2. Operating income is expected to increase by 38.3% on a YoY basis. Additionally, Ordinary income and Profit attributable to owners of parent are expected to increase compared to the
Slide 25: FY2020 forecasts of net sales by business
FY2020 forecasts of net sales by business HENNGE One Professional service and others expected to decrease by expected to increase by 23.9 (unit: Million yen) ％ YoY (unit: Million yen) 2.7％ YoY 25
Slide 26: FY2020 forecasts of Operating expenses
FY2020 forecasts of Operating expenses In FH (especially during the 1Q) of FY2020, we plan to invest proactively in IPO related fees (we listed on Oct), recruiting, office expansion, holding the event “HENNGE Now!” and so on. (unit: Million yen) 26
Slide 27: Our growth strategy on and after FY2021
Our growth strategy on and after FY2021 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 for Establish SaaS Platform 27
Slide 28: FY2020 Activities for PR and Advertisement
FY2020 Activities for PR and Advertisement We will promote the adoption of SaaS within business to increase our future customer bases. 28
Slide 29: Formula to our growth strategy
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. 29
Slide 30: Corporate Overview
Corporate Overview 30
Slide 31: Corporate profile
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 President Fumiaki Goto Kazuhiro Kazuaki Director Ogura Miyamoto Koich
Slide 32: Locations
Locations Japan Taiwan Nagoya branch office 2016/8 Tokyo Head office Osaka branch office 2015/6 Fukuoka branch office 2018/8 32
Slide 33: Liberation of Technology
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 33
Slide 34: History
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 Workstyle SaaS (Software as a Service) : a model for the distribut
Slide 35: HENNGE One
HENNGE One Identity as a Service (IDaaS) Provides centralized authentication to various SaaS-es, with Single-Sign-On (SSO) technology. IDID統合 Federation アクセスコントロール Access Control Customizable policy Administrator Various cloud services LAN User Management Policy Management Local PC Access log Remote
Slide 36: HENNGE One features
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 Attachment Local IP Allow Cloud Mail Archive Certificate Allow Cloud Smar
Slide 37: HENNGE One
HENNGE One # of our customers # of verified cloud services 1,428 companies 102 services 1.672 Million users (as of 2019-09-30) (as of 2019-09-30) (unit: companies) (unit: users) (unit: services) 102 37
Slide 38: Appendix
Appendix 38
Slide 39: Diversity within our organization
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.) 11,663 people Joined as an Intern (Accum.) 24 countries & regions 8
Slide 40: Disclaimer
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 of an offer to buy or acquire securities of the Company in Japan,
Slide 41: HENNGE
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