Slide 1: Results of Operations for the Fiscal Year Ended April 30, 2022
Results of Operations for the Fiscal Year Ended April 30, 2022 (17th Period) + Business Plan and Growth Potential May 1, 2021 ‐ April 30, 2022 Smaregi, Inc. Securities code: 4431
Slide 2: Contents
Contents 2 P3 FY4/22 Financial Summary P18 Business Summary P32 Business Plan for FY4/23 P34 Progress of Medium-term Management Plan P43 Business Outline P50 Appendix
Slide 3: FY4/22 Financial Summary
3 FY4/22 Financial Summary May 1, 2021 - Apr. 30, 2022 Consolidated financial results effective from the 3Q of FY4/22 Consolidated balance sheet only in 3Q, consolidated including statement of income from 4Q
Slide 4: FY4/22 Financial Highlights
FY4/22 Financial Highlights FY4/22 Financial Summary 4 • Even amid the COVID-19 pandemic, the number of fee-paying stores increased solidly, and thanks also to beginning consolidated reporting, sales rose by 29.2% YoY to ¥4.29 billion. • Despite the significant S&M investment implemented in line wit
Slide 5: Financial Highlights
Financial Highlights FY4/22 Financial Summary 5 Sales grew by 29.2% YoY. S&M investment was implemented in line with the growth policy under the Medium-term Management Plan. FY4/22 FY4/22 FY4/22 results FY4/21 results YoY (million yen) Plan*1 % achieved (May2021 - Apr.2022) (May2020 - Apr.2021) chan
Slide 6: Balance Sheet
Balance Sheet FY4/22 Financial Summary 6 Net assets grew by 17.2% YoY as a result of the expansion in the scale of operations arising from M&A and business growth. (million yen) FY4/22 results FY4/21 results YoY 1Q-3Q FY4/22 QoQ (May2021 - Apr.2022) (May2020 - Apr.2021) change (May 2021 - Jan.2022)
Slide 7: Statement of Income
Statement of Income FY4/22 Financial Summary 7 Although sales, general, and administrative (SG&A) expenses increased by 64.9% YoY due to proactive S&M investment, sales growth of 38.0% QoQ and 29.2% YoY was achieved for the full business year. FY4/22 (million yen) (May 2021-Apr. 2022) FY4/21 results
Slide 8: Cash Flows
Cash Flows FY4/22 Financial Summary 8 As a result of increases in trade receivables and merchandise inventory arising from securing inventory, cash flow from operating activities decreased by 71.1% YoY. FY4/22 FY4/21 YoY change (million yen) results results (May 2021 - Apr. 2022) (May 2020 - Apr. 20
Slide 9: Changes in Net Sales, Operating Profit and Operating Margin
Changes x in Net Sales, FY4/22 Financial Summary 9 Operating Profit and Operating Margin Sales grew by 29.2% YoY in FY4/22. A high CAGR of 32.5% was achieved over the past five-year period. The operating profit rate fell by 10.6 percentage points YoY to 14.8% as a result of S&M investment and other
Slide 10: Quarterly Changes in Net Sales, Operating Profit and Operating Margin
Quarterly Changes in Net Sales, FY4/22 Financial Summary 10 Operating Profit and Operating Margin The 4Q operating profit rate fell by 17.8 percentage points QoQ, to 1.1%. This was due more to S&M investment and bonuses etc. based on the Medium-term Management Plan than it was to increases in SG&A e
Slide 11: Changes in Sales Composition
Changes in Sales Composition FY4/22 Financial Summary 11 As a result of seasonal factors and accepting orders for large deals, up-front costs (sales of cloud service products and others) increased. Due to the impact of consolidation, the gross profit ratio for SaaS (monthly fees for cloud services)
Slide 12: Analysis of Changes in Operating Profit (YoY change)
Analysis of Changes in Operating Profit (YoY change) FY4/22 Financial Summary 12 (million yen) Higher sales • Number of fee based contracts increased. (391) • Growth of consistent sales (monthly fees) due to low Higher cost churn rate. of sales 972 Effects of COVID-19 Higher (214) sales Personnel ex
Slide 13: Quarterly Changes in SG&A Expenses
Quarterly Changes in SG&A Expenses FY4/22 Financial Summary 13 Q4 SG&A expenses increased as a result of subsidiary consolidation and S&M investment etc., and the SG&A expense ratio for the full business year rose by 10.1 percentage points YoY, to 46.7%. As planned, proactive investment was implemen
Slide 14: Quarterly Changes in Advertising Expenses
Quarterly Changes in Advertising expenses FY4/22 Financial Summary 14 In addition to measures to expand awareness through mass marketing, such as TV commercials, we are also continuing to strengthen lead acquisition measures to convert awareness into potential sales leads. (million yen) 300 Lead Acq
Slide 15: Growth in Number of Employees
Growth in Number of Employees FY4/22 Financial Summary 15 The Company bolstered its organizational strength by taking on 56 staff of its own, across the course of the year. Up 69.4% compared to the previous year. Average age 33. 210 200 30 Royal Gate, Inc. 25 Corporate 150 129 124 48 Customer servic
Slide 16: Shareholder Composition
Growth in Number of Employees FY4/22 Financial Summary 16 The ratio held by trust banks declined substantially, while holdings by individuals and foreign entities increased. Smaregi, Inc. 0.8% 0.7% Venture Capital 3.3% 3.3% 0.8% Trust banks 8.4% Institutional Foreign companies, etc. investors 18.0%
Slide 17: Dividend Policy
Dividend Policy FY4/22 Financial Summary 17 The basic policy of Smaregi is to pay a dividend that reflects results of operations and the current financial condition. As Smaregi is still in the growth phase of its operations, there has been no dividend since the company s inception in order to retain
Slide 18: Business Summary
18 Business Summary
Slide 19: Annual Recurring Revenue (Subscription Sales)
Annual Recurring Revenue (Subscription Sales) Business Summary 19 Even amid the COVID-19 pandemic, the number of fee-paying stores increased solidly. As a result of reinforcing the payment service (PAYGATE), ARR grew by 40.6% YoY. ARR * ARR at end of quarter ¥ 2.92billion * (million yen) YoY +40.6%
Slide 20: Smaregi POS KPI (May 2021 - April 2022)
POS Smaregi KPI (May 2021 - April 2022) Business Summary 20 ARPA ARPU Avg. stores per contract ¥ 17,725 ¥ 7,476 2.37stores YoY +1.4% YoY +1.2% YoY + - 0% CAC LTV Unit economics MRR churn LTV / CAC ¥ 228,655 ¥ 696,855 3.05 0.60% YoY +137.4% YoY -8.49% YoY -61.5% YoY -0.06% Number of Number of registe
Slide 21: Smaregi TimeCard KPI (May 2021 - April 2022)
TimeCard Smaregi TimeCard KPI (May 2021 - April 2022) Business Summary 21 ARR ARPA ¥ 3.09 billion ¥ 5,676 YoY +25.0% YoY +4.0% Registered businesses Registered employees 115,790 2,143,629 YoY +15.5% YoY +21.7% ARR (Annual recurring revenue from monthly Smaregi Time Card utilization fees) is April 20
Slide 22: FY4/22 Topics
FY4/22 Topics Business Summary 22 Apr. 2022 • First food festival held • Notification of Fukuoka Tenjin showroom relocation • Sustainability page launched on website • Winning entries for 2nd Smaregi App Contest decided • Announcement of merger by absorption of consolidated subsidiary • Shift to Tok
Slide 23: Winners of the Smaregi App Contest
Winners of the Smaregi App Contest Business Summary 23 Second App Market contest with a grand prize of ¥10 million, an exceptional prize for a domestic programming contest. 21 entries received in total. Industry-specific apps also submitted, helped to promote dynamic app market! Grand “Agreeean” Pri
Slide 24: New Product Development Activities in FY2022
New Product Development Activities in FY2022 Business Summary 24 Total of 204 updates carried out, including adding user requests and new functions, and enhancing the platform API. Smaregi* 100 • Stronger payment link • Compatibility with two-row barcodes at bookstores • Compatibility with greater v
Slide 25: GMV (Gross Merchandise Value) Progress
POS GMV (Gross Merchandise Value) Progress Business Summary 25 Consumption that had been constrained by the COVID-19 pandemic increased, and economic activity gradually took on a recovery undertone. Cashless payments grew accompanying the increase in non-contact needs. 1,137.2 (billion yen) Cashless
Slide 26: Composition of Plan Categories with Fees
POS Composition of plan Categories with Fees Business Summary 26 Despite the long-running COVID-19 pandemic, as a result of strengthening touch points such as introduction support, the customer base expanded continuously. The fee-paying store ratio also increased by 1.8 percentage points YoY, to 22.
Slide 27: Active Stores (Including No-fee Stores)
POS Active Stores (Including No-fee Stores) Business Summary 27 Aiming for POS systems that are utilized, and promoting continuous usage as a result of onboarding via customer success etc. Number of active stores rose by 22.6% YoY, to 30,355 stores, and is steadily increasing. 30,355 30,000 28,348 A
Slide 28: Composition of Plan Categories with Fees
POS Composition of Plan Categories with Fees Business Summary 28 The “Premium Plus” plan is driving stable growth. Fee-paying plans increased by 24.9% YoY, to 24,448 stores. (No. of stores) % 25,000 Premium Premium Plus Food Business Retail Business Food Retail ¥4,400 monthly / store ¥7,700 monthly
Slide 29: Churn Rate
POS Churn Rate Business Summary 29 As a result of working to strengthen onboarding and enhance the quality of services, in FY4/22 an average attrition rate of 0.60% was achieved, the lowest level ever! 5% Churn rate Churn rate Churn rate Churn rate 4% FY4/19 FY4/20 FY4/21 FY4/22 0.81% 0.73% 0.66% 0.
Slide 30: Average Revenue per Account and User (ARPA/ARPU)
POS Average Revenue per Account and user (ARPA/ARPU) Business Summary 30 Slow but steady growth and stable ARPA and ARPU. Average Revenue Per Account (ARPA) Average Revenue Per User (ARPU) = Average of revenue for each contract ID (only for plans with fees) = Average of revenue for each store (only
Slide 31: Monthly Fees by Quarter of Start of Services
POS Monthly Fees by Quarter of Start of Services Business Summary 31 Achieving Sustainable Growth in the SaaS sector even during the COVID-19 pandemic because of a net increase in MRR due to new contracts and the continuous use of services by customers due to a low churn rate. (million yen) 200 Impa
Slide 32: Business Plan for FY4/23
32 Business Plan for FY4/23
Slide 33: Highlights of the FY4/23 Plan
Highlights of the FY4/23 Plan Business Plan for FY2023 33 Plan to increase earnings through a combination of adding more new customers by investing in advertising expenses, and improving ARPU/ARPA as a result of cross-selling products (TimeCards, payments). Based on the Medium-term Management Plan,
Slide 34: Progress of Medium-term Management Plan
34 Progress of Medium-term Management Plan
Slide 35: The goal of the medium-term plan is an ARR of ¥5 billion
Medium-term Management Plan - XXX Progress of Medium-term Management Plan 35 Advancing Smaregi to a Fast-growth Cycle 300,000 active stores First step toward the long-term goal The goal of the medium-term plan is an ARR of ¥5 billion We set ARR as the KPI for the Medium-term Management Plan for ARR
Slide 36: Medium-term Management Plan – Four Key Activities
Medium-term Management Plan – Four Key Activities Progress of Medium-term Management Plan 36 Increase Improve number of customer sales per customer App Market Strategy Improve the customer experience and sales per customer Stimulate Smaregi App Market and build an ecosystem. Increase sales per custo
Slide 37: Four Key Activities - 1. Emphasis on Advertising/Marketing
Four Key Activities - Progress of Medium-term Management Plan 37 1. Emphasis on Advertising/Marketing In FY4/23 also, continue S&M investment and aim for high growth in subscription sales, toward achieving the Medium-term Management Plan. S&M expense TV commercial investment outcomes *2 million yen
Slide 38: Four Key Activities - 2. App Market Strategy
Four Key Activities - 2. App Market Strategy Progress of Medium-term Management Plan 38 Number of published apps grew by around three times compared to the previous year, to 79. New value-creation was promoted, with the aim of expanding the user base with industry-specific apps. DEV for apps Smaregi
Slide 39: Four Key Activities - 3. Enhancement of Payment Service
Four Key Activities - Progress of Medium-term Management Plan 39 3. Enhancement of Payment Service Optimize supply chain and strengthen revenue base by owning own payment system. On May 23, 2022, the linkage between ROYAL Merged with the "PAYGATE" brand Completed negotiations to improve GATE’s payme
Slide 40: Enhancement of Payment Service - PAYGATE
Enhancement of Payment Service - PAYGATE Progress of Medium-term Management Plan 40 PAYGATE is a next-generation payment service that enables a variety of cashless payments, such as credit card/e-money/QR payments, etc., all from a single device. PAYGATE Can be used for a variety of payment brands S
Slide 41: Enhancement of Payment Service - Sales Strategy and Plan
Enhancement of Payment Service - Progress of Medium-term Management Plan 41 Sales Strategy and Plan Completely revised the price system and shift the profit structure from terminal sales to stock sales, such as monthly usage fees, contributing to an increase in ARR. Propose payment set plan for new
Slide 42: Four Key Activities - 4. Smaregi TimeCard
Four Key Activities - 4. Smaregi TimeCard Progress of Medium-term Management Plan 42 Currently implementing measures for cross-selling to Smaregi users through marketing activities, and measures to improve CVR by onboarding via customer success. Core Activities As of the end of April, 2022 • Launche
Slide 43: Business Outline
43 Business Outline
Slide 44: Corporate Overview
Corporate Overview Business Outline 44 Making the future even better Smaregi, Inc. Growth market Securities code: 4431 Established May 24, 2005 Representative Hiroshi Yamamoto Director Capital ¥1,150 million (as of the end of April 30, 2022) Head office 3F 4-2-12 Hommachi, Chuo-ku, Osaka 541-0053 Lo
Slide 45: Business Activities
Business Activities Business Outline 45 Software development Other Platform service EC Online store for store peripherals POS Payment Sales data SES IT resource development Attendance data HR HR CVC Venture capital investment Expansion of the Smaregi economic zone
Slide 46: Software Development Business - About Smaregi (POS)
Software Development Business - About Smaregi (POS) Business Outline 46 High-performance Taking Store Management to the Next Level cloud-based POS systems Science store management with POS data POS systems are means of utilizing data. S m a r e g i p r o v i d e s p l a t fo r m fo r Based on Smareg
Slide 47: Exceptional High Performance
Exceptional High Performance Competitive Businessadvantage Outline 47 Smaregiʼs high-performance cloud-based POS systems go beyond the conventional Open API User-centered Outstanding inventory Retail stores Restaurants design management Able to Customer Strength management handle the Orders/ Operati
Slide 48: Japanese Market Environment
Japanese Market Market Business Environment Outline 48 Product distribution by store size and industry. Smaregi shows its strengths among retail and midsize businesses. Retail Restaurants Cash Conventional Cloud-Based Big POS Systems POS Systems Many Registers Dedicated Device PC or Tablet Conventio
Slide 49: The Smaregi Marketing Strategy
The Smaregi Marketing Strategy Market Business Environment Outline 49 Our goal is a 38% share of the targeted 770,000 stores 14% of the market Big businesses in Japan The POS system market will remain competitive rather than dominated by a single (at least 40 stores) company because a company that m
Slide 50: Appendix
50 Appendix
Slide 51: Medium-term Management Plan
Medium-term Management Plan Business Outline 51 Celebrating our 10th anniversary. Looking ahead to more growth in the next 10 years! 3UPDATE 2022/6/1 KPI Aiming for 300,000 active stores and a 14% market share in Japan Smaregi does not set the number of accounts or registered stores as target indica
Slide 52: Business Risks and Measures Policy
Business Risks and Measures Policy BusinessBusiness Outline Risk Information 52 Major risks affecting the realization of growth and the execution of the business plan. Likelihood of Potential Item Key risks Risk management measures ccurrence impact Operates "Smaregi Tech farm" for the purpose Securi
Slide 53: Business Risks and Measures Policy
Business Risks and Measures Policy BusinessBusiness Outline Risk Information 53 Likelihood of Potential Item Key risks Risk management measures ccurrence impact In the payment agency business, there is a risk the Group’s business In order to eliminate the potential for business performance could be
Slide 54: Disclaimer
Disclaimer 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 ma
Slide 55: Results of Operations for the Fiscal Year Ended April 30, 2022
Results of Operations for the Fiscal Year Ended April 30, 2022 + Business Plan and Growth Potential May 1, 2021 – April 30, 2022 Smaregi, Inc.