Smaregi, Inc. · TSE:4431
Smaregi — Q3 FY4/20 Earnings Presentation
37 slides from Smaregi's earnings presentation, Apr 30, 2020
Slide 1: Results of Operations for the First Nine Months of FY Ending April 30, 2020
Results of Operations for the First Nine Months of the Fiscal Year Ending April 30, 2020 (15th Period) May 1, 2019 – January 31, 2020 Smaregi, Inc. Securities code: 4431
Slide 2: Contents
Contents 2 P3 About Smaregi P6 1Q-3Q FY4/20 Financial Summary P18 Business Summary P27 Business Plan for FY4/20 P33 Medium-term Plan
Slide 3: About Smaregi
3 About Smaregi
Slide 4: Business Profile
Business Profile About Smaregi 4 High-performance cloud-based POS systems Smaregi is a supplier of innovative cloud-based POS systems with capabilities that go far beyond those of conventional POS systems. Smaregi products analyze sales, perform sophisticated inventory management tasks and have many
Slide 5: Smaregi Services and Support
Smaregi Services and Support About Smaregi 5 Smaregi provides a complete lineup of services and support for companies in the retail, restaurant and service sectors. Our goal is to help create more pleasant and productive workplaces by using the capabilities of Smaregi to make a broad range of busine
Slide 6: 1Q-3Q FY4/20 Financial Summary
6 1Q-3Q FY4/20 Financial Summary May 1, 2019 – January 31, 2020
Slide 7: 1Q-3Q FY4/20 Financial Highlights
1Q-3Q FY4/20 Financial Highlights 1Q-3Q FY4/20 Financial Summary 7 • Sales increased 86.6% from one year earlier to ¥2,528 million, which is 82.1% of our fiscal year forecast • Operating profit increased 136.5% to ¥708 million, which is 110.3% of our fiscal year forecast • Although the third quarter
Slide 8: Financial Highlights
Financial Highlights 1Q-3Q FY4/20 Financial Summary 8 First nine months sales of ¥2,528 million were 82.1% of the FY4/20 plan of ¥3,080 million. Operating profit was ¥708 million, 110.3% of the ¥642 million plan. There is no change in the fiscal year plan because of planned business investments in 4
Slide 9: Balance Sheet
Balance Sheet 1Q-3Q FY4/20 Financial Summary 9 The equity ratio remains high at 85.7%. 1Q-3Q FY4/20 1Q-3Q FY4/19 YoY QoQ 2Q FY4/20 (Millions of yen) Results Results change (May - Oct. 2020) change (May 2019 - Jan. 2020) (May 2018 - Jan. 2019) Current assets 3,324 836 397.5% 3,332 99.7% Cash and depo
Slide 10: Statement of Income (Nine months)
Statement of Income (Nine months) 1Q-3Q FY4/20 Financial Summary 10 1Q-3Q FY4/20 1Q-3Q FY4/19 YoY (Millions of yen) % to sales (May 2019 - Jan. 2020) (May 2018 - Jan. 2019) change Net sales 2,528 100.0% 1,354 186.6% Cost of sales 1,063 42.1% 556 191.2% Gross profit 1,464 57.9% 798 183.4% SG&A expens
Slide 11: Changes in Net Sales, Operating Profit and Operating Margin
Changes in Net Sales, Operating Profit 1Q-3Q FY4/20 Financial Summary 11 and Operating Margin In the first nine months, sales were 82.1% of the FY4/20 plan and operating profit was 110.3% of the plan. Expenditures are planned in 4Q for the development of Smaregi 4 and for advertising activities. (Mi
Slide 12: Quarterly Statement of Income
Quarterly Statement of Income 1Q-3Q FY4/20 Financial Summary 12 Sales and earnings were comparatively low in the third quarter as usual in every fiscal year. FY4/20 third quarter sales were also impacted by the end of one-time demand due to reduced tax rate measures. Third quarter sales were down fr
Slide 13: Quarterly Changes in Net Sales, Operating Profit and Operating Margin
Quarterly Changes in Net Sales, 1Q-3Q FY4/20 Financial Summary 13 Operating Profit and Operating Margin Progress toward the FY4/20 plan is as expected despite the end of one-time demand due to reduced tax rate measures and the usual comparatively low third quarter sales and earnings. (Millions of ye
Slide 14: Changes in Sales Composition
Changes in Sales Composition 1Q-3Q FY4/20 Financial Summary 14 The end of one-time demand for POS systems that handle the reduced tax rates returned sales of cloud service products to the customary level, but monthly fees for cloud services, a source of steady income, continue to climb. (Millions of
Slide 15: Analysis of Changes in Operating Profit (YoY)
Analysis of Changes in Operating Profit (YoY) 1Q-3Q FY4/20 Financial Summary 15 Higher sales (Millions of yen) • Growth in sales of fee-based contracts (higher pct. of (507) stores under these contracts) Higher SG&A expenses cost of • Growth of consistent sales (monthly fees) due to low sales (145)
Slide 16: Quarterly Changes in SG&A Expenses
Quarterly Changes in SG&A Expenses 1Q-3Q FY4/20 Financial Summary 16 Third quarter SG&A expenses increased to 40.6% of sales mainly due to higher personnel expenses as the number of employees increased. (Millions of yen) SG&A expense Others Depreciation Rent Advertising Logistics cost Personnel rati
Slide 17: Growth in Number of Employees
Growth in Number of Employees 1Q-3Q FY4/20 Financial Summary 17 Recruiting people of all ages →Current workforce average age: 32.4 Recruiting is progressing as planned; plan to continue hiring people while monitoring changes in the economic environment →Average number of years employed: 2 years and
Slide 18: Business Summary
18 Business Summary
Slide 19: 3Q FY4/20 Topics
3Q FY4/20 Topics Business Summary 19 Jan. 2020 • New management philosophy: Open Data, Open Science! Dec. 2019 • First issue of the Smaregi Inside shareholder report Nov. 2019 • Started accepting applications for partners for development of the Smaregi 4 app • Opened the Sapporo Support Center • Sma
Slide 20: Smaregi Cumulative Transaction Volume
Smaregi Cumulative Transaction Volume Business Summary 20 Cumulative volume in the first nine months of FY4/20 was almost equal to the volume in the previous fiscal year. At this pace, cumulative volume will reach ¥1 trillion. (Billions of yen) Credit Cash Others 800 698.4 674.7 7.9% 10.2% 600 501.5
Slide 21: Quarterly Growth of Stores and Fee-paying Stores
Quarterly Growth of Stores and Fee-paying Stores Business Summary 21 The percentage of fee-paying registered stores increased 0.2 pct. points to 19.8% because of the rapid growth in these stores due to one-time demand associated with the reduced tax rate measures. Pct. of fee-paying Fee-paying No-fe
Slide 22: Share of Active Stores (Including Stores Paying No Fee)
Share of Active Stores (Including Stores Paying No Fee) Business Summary 22 The share of active stores decreased only 0.2 pct. points to 25.1% because of the end of one-time demand associated with the reduced tax rate measures. 39.5% 31.3% 28.6% 25.1% 25.1% 26.5% 22.1% 20.2% 20.8% 25.3% 19.9% 19.8%
Slide 23: Composition of Plan Categories with Fees
Composition of Plan Categories with Fees Business Summary 23 Net growth for all plans, with the retail plan being the most popular. (No. of stores) (%) 15,000 Premium Premium Plus Food Business Retail Business Food Retail ¥4,000 monthly/store ¥7,000 monthly/store ¥10,000 monthly/store ¥12,000 monthl
Slide 24: Attrition Rate
Attrition Rate Business Summary 24 A low attrition rate is proof of the quality of our services. The attrition rate fell to a record-low 0.62% in the first nine months of FY4/20. 5% Attrition Attrition rate* rate* Attrition rate* 4% FY4/18 FY4/19 1Q-3Q FY4/20 0.90% 0.82% 0.62% 3% 2% 1.24% 1.15% 1.16
Slide 25: Monthly Fees by Month of Start of Services
Monthly Fees by Month of Start of Services Business Summary 25 A constant monthly negative churn* (Millions of yen) 125 100 75 50 25 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 *Negative churn is when additional monthly fees from new users are more than the decrease in these fees due to cancelati
Slide 26: Business Systems for Small and Midsize Companies
Business Systems for Small and Midsize Companies Business Summary 26 Sales of the Smaregi Time Card are strong in part because of social trends in Japan that include the increasing diversity of how people are employed and do their jobs. Smaregi Time Card is raising sales per customer and contributin
Slide 27: Business Plan for FY4/20
27 Business Plan for FY4/20
Slide 28: Highlights of FY4/20 (Projected)
Highlights of FY4/20 (Projected) Business Plan for FY4/20 28 • The business climate remains extremely uncertain because of the impact of COVID-19 on the Japanese and global economy • In September, the first half and fiscal year forecasts were raised because of the larger than expected increase in de
Slide 29: Highlights of FY4/20
Highlights of FY4/20 Business Plan for FY4/20 29 Second half product sales are expected to be less than in the first half due to the end of the subsidy for expenses associated with complying with the reduced tax rate measures. Sales are expected to increase again with the support of higher monthly f
Slide 30: Changes in Net Sales, Operating Profit and Operating Margin (Projected)
Changes in Net Sales, Operating Profit Business Plan for FY4/20 30 and Operating Margin (Projected) IPO proceeds are being used effectively for advertising expenses, workforce growth, a Smaregi upgrade, and other activities. Forecast a temporary decline in the operating margin because of higher SG&A
Slide 31: How Smaregi is Responding to the COVID-19 Outbreak
How Smaregi is Responding to the COVID-19 Outbreak Business Plan for FY4/20 31 Smaregi conducted a survey of stores using its products and services to determine the impact of COVID-19 on their operations. Small Other 2.8% More than 90% of the stores that responded to the survey Others 6.9% reported
Slide 32: How Smaregi is Responding to the COVID-19 Outbreak
How Smaregi is Responding to the COVID-19 Outbreak Business Plan for FY4/20 32 Outlook for the impact of COVID-19 Positive factors Negative factors • Increase in demand to switch from expensive conventional POS systems to inexpensive Smaregi • Decrease in the number of Smaregi showroom systems reser
Slide 33: Medium-term Plan
33 Medium-term Plan
Slide 34: The Steadily Increasing Use of the Cloud
The Steadily Increasing Use of the Cloud Medium-term Plan 34 The public cloud market, including SaaS, continues to grow. Due to the higher name recognition and reputation for trust following the February 2019 stock listing, there are more large orders and steady growth in orders that are not related
Slide 35: The Next Smaregi Version Is Under Development
The Next Smaregi Version Is Under Development Medium-term Plan 35 Smaregi is updated by launching new versions periodically in order to increase customer satisfaction and incorporate the most advanced technologies. The version under development will make Smaregi a platform centered on sales (POS) da
Slide 36: Forward-looking statements notice
Business plans, forecasts and other forward-looking statements in this presentation are based on the reasonable judgments of Smaregi based on information that was currently available. Actual results of operations may be different because these statements include uncertainties involving market condit
Slide 37: Results of Operations for the First Nine Months of FY Ending April 30, 2020
Results of Operations for the First Nine Months of the Fiscal Year Ending April 30, 2020 May 1, 2019 – January 31, 2020 Smaregi, Inc.