Nihon M&a Center Holdings Inc. · TSE:2127
Nihon M&a Center — Q3 FY2022 Earnings Presentation
73 slides from Nihon M&a Center's earnings presentation, Jan 27, 2023
Slide 1: IR Report: Financial Results Report for Q3 FY2022
Celebration of our 30th anniversary - April 25, 2021 IR Report Financial Results Report for Q3 FY2022 Year to March 2023 TSE code ２１２７ The information included in this presentation, such as industry trends and analysis, future plans and forecasts, is based on data available at the time of release. A
Slide 2: Table of Contents
Table of Contents Nihon M&A Center Holdings Purpose P1 Company Overview P45～P65 Review of preventative measures P2～P5 Our Vision P46 Q3 FY2022 Results Review ・ Dividends P6～P17 Nihon M&A Center 30 years P47 Q3 Results Review P7 To Become the Top Global Integrated M&A Company P48 Review of Q3, Prepar
Slide 3: Nihon M&A Center Holdings Purpose
Nihon M&A Center Holdings Purpose To connect hopes and dreams for the best M&A experience in Japan and then the world Best M&A ＝ Top level compliance, client satisfaction, quality Copyright©2023 Nihon M&A Center Holdings Inc. All rights reserved. 1
Slide 4: Review of preventative measures
Review of preventative measures
Slide 5: Measures to strengthen compliance in Q3
Measures to strengthen compliance in Q3 1 Compliance training sessions Handling of information （October） All employees Prevention of harassment （November） Department heads Meet the CCO （monthly） New employees 2 Level of discussions and reports handled by the compliance department Trend in numb
Slide 6: Measures to reform the organisation structure to fit the new purpose
Measures to reform the organisation structure to fit the new purpose Establishment of philosophy for expected employee conduct and decision making ４ standards In June 2022 we created a purpose statement based on a survey of all employees. We then created a philosophy statement to foster a corporate
Slide 7: Philosophy statement with 8 tenets
Corporate credo and employee behavioural standards Philosophy statement with 8 tenets Nihon M&A Center Holdings Philosophy 1. Utmost respect for our clients 5. Best decisions with free and open discussion 2. High viewpoint, broad field 6. Keep going until the result is of view achieved 3. Strive wit
Slide 8: Q3 FY2022 Results Review ・ Dividends
Q3 FY2022 Results Review ・ Dividends
Slide 9: Q3 Results Review
Q3 Results Review Acceleration of sales and recruitment activity ahead of renewed growth FY2022 FY2021 9 months result 9 months result Change (YoY) Sales (¥mn) 29,876 34,273 87.2％ Ordinary profit (¥mn) 11,045 15,643 70.6％ FY2022 FY2021 Q3 actual Q3 actual Change (YoY) Sales (¥mn) 9,777 10,853 90.1％
Slide 10: Review of Q3, Preparing for Q4
Review of Q3, Preparing for Q4 Ｑ3 results Whilst there was a growth in transactions completed price pressure caused a 9.9% decline in sales FY2022 FY2021 Q3 actual Q3 actual Change (YoY) Sales (¥mn) 9,777 10,853 90.1％ Ordinary profit (¥mn) 3,072 4,102 74.9％ Key factors 1. Fewer large mandates • Paus
Slide 11: Review of Q3, Preparing for Q4
Review of Q3, Preparing for Q4 Motivation and unity of our employees Whole firm reunited as a competitive force New record level of transactions completed in Q3 FY2022 FY2021 Q3 actual Q3 actual Change (YoY) Transactions closed (Counting sell-side and buy-side mandates separately) 258 243 106.2％ Key
Slide 12: Review of Q3, Preparing for Q4
Review of Q3, Preparing for Q4 Preparing for Q4 Recruitment actively recommenced and there was a strong increase in human resources In first 9 months 883 mandates received and plentiful new business discussions ※ Details on page 15 As of 31 Dec 2022 As of 31 Dec 2021 Change (YoY) Number of consultan
Slide 13: Review of Q3, Preparing for Q4: Shift to new team management structure
Review of Q3, Preparing for Q4 Preparing for Q4 Shift to new team management structure Concept FY2022 FY2023 FY2024 Growth * GL Growth @ d ¥mn ✕ ● people @ d ¥mn ✕ ● people Introduction of Year 3 @ c ¥mn ✕ 50 people @ c ¥mn ✕ ● people @ c ¥mn ✕ ● people system for selling in pairs Year 2 @b ¥mn ✕ 70
Slide 14: Income Statement Key Data
Income Statement Key Data Aiming to meet original target due to activation of strong pipeline FY2022 FY2021 full-year Q3 ＦＹ２０２2 YoY Q3 FY2021 full-year forecasts results (restated) (¥mn, ％) Total % % Total % Total % Total % Sales 29,876 100.0 -12.8 34,273 100.0 42,000 100.0 40,401 100.0 (o/w M&A sal
Slide 15: Quarterly Development of Ordinary Profit
Quarterly Development of Ordinary Profit Achievement rate in the year to date 87.7％ progress towards ¥12.6bn (H1:40%, H2:60%) Quarterly ordinary profit Results relative to full-year forecast （¥mn） 4Q 18,000 3Q 2Q 16,000 1,220 （¥mn） 1Q 1,813 14,000 1,463 4,102 Q3 FY2022 result 12,000 1,703 3,757 4,23
Slide 16: Record of transactions closed
Record of transactions closed Recovery following Q1 decline Increase to 92% of 820 level of April-December 2021 FY2019 FY2020 FY2021 +6.2％ FY2022 Full Full Full 3Q 1Q 2Q 3Q 4Q １Q 2Q ３Q 4Q １Q 2Q 3Q （Units: no. of transactions） Year Year Year Total number of transactions closed *1 1-1 （by no. of compa
Slide 17: Record of M&A sales and number of new sell-side mandates
Record of M&A sales and number of new sell-side mandates Targeting new mandates Large conferences throughout Japan in Nov - Dec National ＴV commercials to commence in February FY2019 FY2020 FY2021 FY2022 （Units: no. of transactions, Full Full Full 3Q １Q 2Q 3Q 4Q １Q 2Q ３Q 4Q １Q ２Q 3Q million yen） Yea
Slide 18: Balance Sheet Key Data
Balance Sheet Key Data Maintaining a healthy balance sheet End-Dec FY2021 Assets 2022 % Change (restated) （¥mn、％） Ⅰ Current assets 49,302 81.4 -673 49,975 Cash and deposits 43,990 72.7 -3,312 47,303 Accounts receivable 1,316 2.2 -143 1,460 Others 3,995 6.6 2,783 1,212 Ⅱ Fixed assets 11,235 18.6 2,29
Slide 19: Number of Employees
Number of Employees In Q3 there was an increase of 33 employees following the restart of active recruitment As of 10 January there was a further increase of 48 employees including new hires yet to start Number of employees (consolidated) End of End of End of End of End-Dec FY2018 FY2019 FY2020 FY202
Slide 20: Related Activities
Related Activities IIIANihon MaA Center HD
Slide 21: Financial Performance of M&A sales and Other sales
Financial Performance of M&A sales and Other sales BＡＴＯＮＺ and ＴＰＭ IPO support drive other sales QoQ comparison YoY comparison Q3 FY2022 Q3 FY2021 FY2021 FY2020 FY2019 (¥mn) Total % YoY Total % Total YoY Total YoY Total YoY M&A sales *1 28,784 100.0% 86.9% 33,130 100.0% 38,807 115.0% 33,743 108.2% 31
Slide 22: Update on related activities (1)-1: Online M&A matching by BATONZ
Update on related activities (1)-1 Online M&A matching by BＡＴＯＮＺ Over 3,000 transactions completed ※ Source for ranking No.1 in cumulative number of members and No. 1 in cumulative transactions completed: Nihon Marketing Research Organization, Inc. regional market research 25 January 2022-11 March 2
Slide 23: Update on related activities (1)-2
Update on related activities (1)-2 Online M&A support platform BATONZ Successful introduction of B MASS M&A support system for financial institutions B MASS usage case studies 24 Nov 2022 - 1 Dec 2022 - Locally embedded financial services company able Enhanced support for SME clients in Tama region
Slide 24: Update on related activities (2)-1: TOKYO PRO Market IPO support
Update on related activities (2)-1 TOKYO PRO Market （TPM） IPO support activities High birth rate of listed companies Record ever level of IPOs 2 companies newly listed on TPM TPM IPOs 21 IPO date 4 Nov 21 companies already listed in 2022 （As of End-Dec 2022) ＡＩＲ－Ｕ LTD.＜5135＞ 13 10 TPM 9 Planning, de
Slide 25: Update on related activities (2)-2
Update on related activities (2)-2 TOKYO PRO Market（TPM） IPO support service Creation of BELLS – an association for leaders of TPM listed companies （Since 8 Nov 2022） BELLS 4 functions Reception to celebrate the start of BELLS, its first networking event （7 Nov 2022） Creation of innovation Knowledge
Slide 26: Features
Features IIIANihon MaA Center HD
Slide 27: Features (1): 7 large-scale conferences organised around Japan
Features （１) 7 large-scale conferences once again organised around Japan 11/30│Sapporo At 7 locations in Japan Over 3,000 registrations （online included） 11/24│Fukuoka 12/6 │Sendai 12/1 │Hiroshima 1２/１５│Tokyo ▲Yasuyuki Suzuki, Head of Sales HQ, presented at all the conferences. The scene of one is d
Slide 28: Features (2): Restart of symposiums for owners of mid-cap companies
Features （２) Restart of symposiums for owners of mid-cap companies Think Owner’s is a service for owners of mid-cap companies Event example Think Owner’s Target is mid-cap companies (sales over ¥1bn or profit over ¥50m) Creating regular contact from gaining new mandates through to the closing of
Slide 29: Features (3): Accountancy and tax firms gathered in Okinawa
Features （3) Accountancy and tax firms actively engaged in M&A gathered in Okinawa “Excellence for accountancy firms SYMPOSIUM IN OKINAWA 2022” Our company’s network of accountancy and tax firms From the start we have built a network of accountancy and tax firms throughout Japan, formed into the “
Slide 30: Features (4): Publication of group's first Integrated Report
Features （4) Publication of group’s first Integrated Report ▲ Integrated Report cover ▲ Sample pages 統合報告書 表紙 一部ページ Integrated Report to be published on 31 Jan 2023 ▶ Strengthening communication of our growth strategy and foundations for value creation Copyright©2023 Nihon M&A Center Holdings Inc. A
Slide 31: Features (5): Specification of 18 material matters
Features （5) To resolve and address social issues Specification of 18 material matters requiring attention Materiality matrix 18 material matters specified Extremely ① Measures for information security and ⑩ Response to climate change important cybersecurity ⑪ Promotion of businesses that contribute
Slide 32: Dividend policy / Shareholder breakdown
Dividend policy Shareholder breakdown
Slide 33: Dividend per Share
Dividend per Share Raising dividend continuous pay-out ratio to 60% during mid-term management plan period (up to FY2026) Dividend forecast at start of year (¥) Dividend paid (¥) Pay-out (¥) ratio 26.00 Actual interim dividends 中間配当実績 Dividend Breakdown Dividend Breakdown (%) Actual annual dividends
Slide 34: (Reference) Dividend Payments and Market Capitalization
(Reference) Dividend Payments and Market Capitalization Aiming for sustained long-term growth Dividends and the pay-out ratio Market capitalization （From Apr 2017) (¥100mn) (¥mn) （百万円） （％） Dividends 5,949 14,000 6,000 60 60 Pay-out Ratio 12,000 5,500 55 5,000 4,626 10,000 52.0 4,500 4,239 50 8,000 3
Slide 35: Share Ownership
Share Ownership Foreign share ownership 48.0% March 31, 2022 September 30, 2022 Treasury stock Treasury stock Other Corporations 1.8％ Other Corporations 1.8％ 4.5％ 3.8％ Individuals Individuals 17.4％ 18.5％ Foreign Financial Foreign 50.1％ institutions 48.0％ Financial institutions 26.2％ 28.0％ （of which
Slide 36: Mid-term Management Plan
Mid-term Management Plan IIIANihon MaA Center HD
Slide 37: Mid-term Management Plan: Start of new growth phase
Mid-term Management Plan Start of new growth phase Entering mid-term management plan (¥35bn ordinary profit in FY2026) (¥mn) 78,000 80,000 68,000 70,000 Consolidated Sales 59,000 +15％ 60,000 Consolidated ordinary profit 51,100 +15％ 50,000 40,401 42,000 +15％ 40,000 35,000 +21.7％ +4.0％ 30,000 30,500 +
Slide 38: To achieve our targets higher productivity is essential
Mid-term Management Plan To achieve our targets higher productivity is essential Recruitment Training of excellent Digitalisation people Work to increase productivity and reduce lead times through digital transformation Copyright©2023 Nihon M&A Center Holdings Inc. All rights reserved. 36
Slide 39: Human Resource Development Plan
Human Resource Development Plan A layered approach for thoroughness We aim to achieve fast results from the training For Senior executive officers and above. Core to strengthened training plan Senior Goal Creating and implementing growth strategies executives for our company. Executive offsites/Mana
Slide 40: What we do for digital transformation
What we do for digital transformation Marketing M&A process Awareness Lead creation Newspapers, Introductions magazines Completion ceremony Definitive agreement Radio Collaborations Letter of intent Management Consultation Preparation Negotiation agreement Valuation Matching Advisory of teaser analy
Slide 41: What we do for digital transformation: raising awareness
What we do for digital transformation Raising awareness to discover new potential customers New TV commercial to be broadcast nationwide from February The TV commercial is for raising awareness We hope for an improvement of the M&A image in line with our corporate purpose Provoke thought about
Slide 42: What we do for digital transformation: digital marketing
What we do for digital transformation Increase opportunities to gain mandates with digital marketing Increase in website articles Information on over 300 projects on our website New feature - registration for chats on unpublished mandates and acquisition needs ▲Owned media, “THE OWNER” Media pla
Slide 43: Digitalisation brings greater efficiency to every component of the M&A process
What we do for digital transformation Digitalisation brings greater efficiency to every component of the M&A process Development of precision M&A systems utilising our enormous unrivalled database of historic transactions and the expertise of our highly experienced M&A specialists 【Examples】 V-Compa
Slide 44: Additional examples of digital initiatives
What we do for digital transformation Additional examples of digital initiatives BATONZ MOON-X Utilising Salesforce Online M&A matching Alliance with MOON-X Uniformity in M&A transactions by BＡＴＯＮＺ whose business includes M&A and client information No. 1 in cumulative transactions and consulting for
Slide 45: (Reference) 13-year Results Record
(Reference) 13-year Results Record 12th consecutive period of higher sales and profit (¥mn) 45,000 Sales Ordinary profit 40,401 40,000 34,795 35,000 32,009 30,000 Compound annual growth rate of ordinary profit 28,463 in the last 13 years ＝ 23.2％ 24,625 25,000 19,069 16,86４ 20,000 15,468 14,467 14,77
Slide 46: Last Three Mid-term Management Targets and Ordinary Profit Trend
(Reference) Last Three Mid-term Management Targets and The Trend in Ordinary Profit All three of the last mid-term management targets have been reached early As the industry leader in SME Ｍ＆Ａ we have displayed steady growth and established a unique position Period 3 mid-term target (¥mn) Consolidate
Slide 47: Company Overview
Company Overview IIIANihon Ma.A Center HD
Slide 48: Our Vision
Our Vision 「 Aiming to become the top global integrated M&A company 」 Became Japan’s top M&A intermediary company 1991 2001 2011 2021 (year) Aiming to become the Start-up phase Becoming Japan’s top M&A intermediary company top global integrated M&A company TSE 1st Section listing in 2007 Transition
Slide 49: Nihon M&A Center 30 years
Nihon M&A Center 30 years Becoming a Rapid growth global leading Establishment IPO period M&A company period (run up) (hop) (skip) (jump) 10ｔｈ 20ｔｈ 30ｔｈ 40,000 Sales (￥mn) ＦＴＳＥ4Good Index Series October 2021 FTSE Blossom Japan Index June 2021 Transition to a holding 35,000 company structure Entry to
Slide 50: To Become the Top Global Integrated M&A Company
To Become the Top Global Integrated M&A Company Number of transactions closed Number of mandated projects, number of transactions closed Customer satisfaction ◆Nihon M&A center recognized Optimal matching and post-merger integration by GUINNESS WORLD RECORDS TM as the best-selling mergers and Broad
Slide 51: Corporate Profile (End-Dec 2022)
Corporate Profile (End-Dec 2022) Leading company in M&A intermediary services with a track record of over 7,500 completed transactions Company name Nihon M&A Center Holdings Inc. Established April 1991 *Transition to a holding company structure taken place in October 2021 Business outline Group mana
Slide 52: Corporate History
Corporate History ★We have been profitable since the second year of our history and have continuously paid a dividend Chairman Yasuhiro Wakebayashi and President Suguru Miyake worked at Olivetti Japan. They Prior to had responsibility for sales of computers nationally to accounting firms and regio
Slide 53: Business Model: A Platform for The M&A Market
Business Model A Platform for The M&A Market Top M&A information network Collaboration agreement figures as of end-Dec 2022 Network Information Accounting firms …1,039 Regional M&A centers Regional banks Information …Collaboration agreements with 95 (out of a total of 99) Information Shinkin banks …
Slide 54: The Strengths of Nihon M&A Center
The Strengths of Nihon M&A Center Never let any competitor catch up Differentiation through service, superiority without competing on price 1. Strong systems for developing Very strong network for M&A information valuable information Regional financial institutions, accountants, large financial in
Slide 55: Our Workflow as An M&A Intermediary
Our Workflow as An M&A Intermediary Seller Buyer Consultation Retainer Signing of fee advisory agreement Arrangement of support team Provision of materials Strategic planning and Valuation search for target Production of blind teaser and Discussion on non-name basis specialist review Matching Signin
Slide 56: Becoming An Integrated M&A Company
Becoming An Integrated M&A Company Nihon M&A Center becoming a hub for specialized high quality group companies Business succession, growth strategy consulting Introductions PMI Information Start of Company Negotiation /dialogue services project valuation with principals /closing Market research Pri
Slide 57: Nihon M&A Center Inc. Organization Structure
55 Administration General Affairs Dept. Document Mgmt. Dept. Copyright©2023 Nihon M&A Center Holdings Inc. All rights reserved. HQ Human Resources Dept. Accounting Dept. Audit and Supervisory Committee Quality Control Corporate Advisory Office Nihon M&A Center Inc. Organization Structure CPAs/tax ac
Slide 58: Sales Headquarters divisional structure
Sales Headquarters divisional structure Sales Headquarters Corporate Growth Alliance Large Financial Industry Focus International Management Institutions Strategy Institutions Division Division Division Division Division Division Collaboration with Collaboration with Direct contact Mid-cap Industry
Slide 59: Human Resources Training
Human Resources Training Subsidy system for training of new recruits and further development of key employees Internal training External training Step up training Training for new recruits Regular training for each level Understanding of our company Analysis of case studies for Monthly training
Slide 60: Sustainability Initiatives (1)
Sustainability Initiatives （１） Environmental Social and Governance (ESG) practice Key activities in the year to March 2020 Establishment of voluntary Nomination Advisory Addition of ESG factors in screening new mandates Committee and Remuneration Advisory Committee Voluntary university lecturi
Slide 61: Sustainability Initiatives (2)
Sustainability Initiatives （2） Enabling the continual growth of society through friendly M&A support, strengthening of the foundations for corporate management and sustaining and increasing employment Our M&A intermediary activities provide economic benefits Resolving social problems 1 Number of com
Slide 62: (Reference) Transactions closed in the year to March 2022: seller size
(Reference) Transactions closed in the year to March 2022 What size sellers does Nihon M&A Center support ？ Calculated from deals closed in FY2021 Sales in a seller (¥mn) Number of employees in a seller 100 or less More than 100 employees, 4.2％ More than 2,000 7.0％ 8.2％ 5 employees or less, More tha
Slide 63: (Reference) Optimal matching from broad geographical and sector reach
(Reference) Transactions closed in the year to March 2022 What is Unique about Nihon M&A Center Matching Service? We achieve optimal matching from our broad geographical and sector reach Industries of companies sold Nihon M&A Center matching results Same Different Total sector sector Other Construct
Slide 64: Number of Transactions Closed in Q3 (1/4)
Number of Transactions Closed in Q3 (1/4) 135 transactions closed, 258 by number of companies Selling company Acquiring company Industry classification Region Industry classification Region 1 Electrical and telecoms contractor Kansai Pavement work Kansai 2 Electrical and telecoms contractor Tokai, H
Slide 65: Number of Transactions Closed in Q3 (2/4)
Number of Transactions Closed in Q3 (2/4) Selling company Acquiring company Industry classification Region Industry classification Region 30 Scrap processing and wholesaling Kanto Scrap processing and wholesaling Tokai, Hokuriku 31 Property business Kansai Property development / sales Kanto 32 Build
Slide 66: Number of Transactions Closed in Q3 (3/4)
Number of Transactions Closed in Q3 (3/4) Selling company Acquiring company Industry classification Region Industry classification Region 66 Industrial machinery manufacture Hokkaido, Tohoku Electrical and telecoms contractor Kanto 67 Civil engineering contractor Kanto Pipe contractor Kansai 68 Elec
Slide 67: Number of Transactions Closed in Q3 (4/4)
Number of Transactions Closed in Q3 (4/4) Selling company Acquiring company Industry classification Region Industry classification Region 102 Industrial machinery manufacture Tokai, Hokuriku Industrial machinery manufacture Tokai, Hokuriku 103 Construction materials wholesale Kyushu, Okinawa Industr
Slide 68: Business Environment
Business Environment IIIANihon MaA Center HD
Slide 69: Strong Increase in Succession Outside Family
（Reference） Strong Increase in Succession Outside Family Succession outside family has increased to over 65% Shift in background of company presidents viewed by length of term of office 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 35 - 40 years 83.5 9.2 3.7 3.7 30 - 35 years 82.5 7.4 6.5 3.7 25 – 30
Slide 70: Distribution of the Age of Owners & Average Retirement Age
（Reference） Distribution of the Age of Owners & Changes in the Average Age of Retirement Increase in per centage of SME owners aged over 70 Divide between companies with and without succession plan Age distribution of SME owners (in 5-year categories) Changes in owners average retirement age In 1995
Slide 71: SME Owner Age in 2025
（Reference） SME Owner Age in 2025 There could be circa 600,000 companies to go out of business by 2025, Even though they are profitable. SME owner ages in 2025 (number of people) of which half have not yet got a successor Circa 1.27mn Companies And half these are profitable Under 70 Over 70 Circa 60
Slide 72: M&A Market Potential
M&A Market Potential There is a potential market in excess of ¥20 trillion Business succession potential market estimate Ratio of Number of M&A Number of companies Sales per M&A Employees companies with market Our position/initiative companies with no transaction no successor size successor New mark
Slide 73: Lastly
Lastly Ⅰ. Corporate ethos Corporate ethos Corporate Purpose To connect hopes and dreams for the best Assisting companies to continue and prosper through M&A M&A experience in Japan and then the world Ⅱ. To investors Increase market value Return profits to shareholders We aim to increase market value
Nihon M&A Center Holdings — Q3 FY2022 Earnings Presentation on 6ix