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FY2018 Results Briefing Materials
May 16, 2019
Geniee Inc.(TSE-M: 6562)
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1. FY2018 Financial Results Overview
2. Future Growth Strategy
3. FY2019 Business Outlook
4. Reference Materials
Agenda
1. FY2018 Financial Results Overview
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• Net sales increased YoY across all businesses • Continued M&A investments while maintaining
positive EBITDA Net Sales: ¥14,954 million (YoY +4.0%)Gross Margin: ¥1,946 million (YoY -20.8%)EBITDA: ¥19 million (YoY -97.6%)
Ad Platform Business
• Although impacted by clients reevaluating streaming policy, we maintained recovery trend to record increased revenues Net Sales: ¥12,770 million (YoY +1.1%)
Marketing Automation Business
Overseas Business
Overview
• Engaged in the rapidly growing Indian market to promote business scope growthNet Sales: ¥1,239 million (YoY +19.3%)
1-1. Cumulative FY2018 Highlights
• Took over the CRM/SFA "Chikyu" service, enabling broad coverage of the marketing field Net Sales: ¥1,170 million (YoY +8.7%)
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• Net sales increased YoY • Income decreased YoY but we outperformed revised forecasts thanks to
cost management efforts. Continued M&A investments while maintaining positive EBITDA.
1-2. Results for FY2018 highlights
(unit: JPY million)
Cumulative FY2017
Cumulative FY2018 YoY
Net Sales 14,380 14,954 +4.0%
Gross Margin 2,457 1,946 -20.8%
SG&A Expenses 1,929 2,257 +17.0%
Operating Income/Losses 527 -310 -%
Ordinary Income/Losses 467 -330 -%
EBITDA 783 19 -97.6%
FY2018Reference:
Revised forecast
15,026
2,006
-400
-418
-49
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Cumulative FY2017 Cumulative FY2018 Cumulative FY2017 Cumulative FY2018Cumulative FY2017 Cumulative FY2018
1-3. FY2018 business-specific earnings highlights
Although impacted by clients reevaluating streaming policy, we maintained recovery trend to record increased revenues
Officially launched our newly developed ad distribution platform for taxi dispatch services in February.
Ad Platform Business
12,634 12,770
YoY
+1.1%
* Sales by business are figures before adjustment for cross-business transactions.
1,0761,170
YoY+8.7%
1,0391,239
Took over CRM/SFA "Chikyu" service
Total accounts for MAJIN and Chikyu increased to over 1,800 companies
Marketing Automation Business
Acquired stock in Adskom India Private Limited to engage in the Indian market and expand business scope
Overseas Business
YoY+19.3%
(unit: JPY million)
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1-4. Quarterly Consolidated Net Sales, Gross Margin, and Transitions in EBITDA
4,023 3,818
3,479 3,633
576 505
410 454
84
18
-66 -16
■Net Sales■Gross Margin●EBITDA
Recovery trend
3Q19 4Q192Q191Q19(Unit: JPY million)
• Priced bottomed out during 3Q and shifted towards recovery
Clients reevaluating ad distribution policy resulted in distribution cancellation
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366 341 334 328
58 62 61 58
38 50 46 5614 9 9 14
23 27 12 125 11
9 17
68 80 74 63
19/1Q 19/2Q 19/3Q 19/4Q
Others
Goodwill
Depreciation & amortization
Ad. & Promotion
Office Equipment etc.
System Development etc.
Personnel etc.
1-5. Trends in Quarterly SG&A Expenses
• Reinforcing cost management enabled us to maintain certain levels for SG&A expenses
548 551
(Unit: JPY million)
582574
15.8%15.2%15.3%14.3%
1Q19 2Q19 3Q19 4Q19
2. Future Growth Strategy
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2-1. Our Mission | Business overview
MissionUse technology to create new value and work together with clients to build success
―― Ad Platform Business ―― ― Marketing Automation Business ―
―― Overseas Business ――
Marketing Automation Platform
CRM/SFA Chat-based customer service tools
GenieeSSPSupply Side Platform
GenieeDSPDemand Side Platform
DOOHDigital Out Of Home
Trading DeskMarketing/Ad management
GenieeDMPData Management
Platform
IndonesiaSingapore Vietnam Thailand India
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2-2. Strategy overview
10
• We will achieve sustainable growth by using our founding mainstay product GenieeSSP as a platform for developing new businesses and engaging in new regions.
Region
Business area
GenieeSSP GenieeDSP Chikyu(CRM/SFA)
GenieeDMP MAJIN(Marketing Automation)
Indonesia
Singapore
Vietnam
Thailand
M&A
New Business
India
chamo (chat-based customer
service tool)
Sustainablegrowth
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2-3. Business Area
Medium- to long-term expansion of service domains
GenieeSSPSupply Side Platform
GenieeDSPDemand Side Platform
Marketing Automation Platform
CRM/SFA
Chat-based customer service tools
Marketing Automation
Ad Platform
New Business
Trading DeskMarketing/Ad management
DOOHDigital Out Of Home
Business scope
Time Axle
• We will expand share and engage in sustainable investments in new domains by promoting business management focused on net sales, gross profit, and EBITDA.
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2-4. Regions
• Expand offices, particularly in rapidly growing Asian region • Promote localization by hiring local site managers and staff to establish
partnerships with major local companies and drive sales
Geniee International Pte.,Ltd. (Singapore)
Geniee Vietnam Co., Ltd(Vietnam)
PT. Geniee Technology Indonesia(Indonesia)
PT.Adstars Media Pariwara(Indonesia)
Geniee Adtechnology (Thailand) Co., Ltd. (Thailand)
Adskom India Private Limited (India)
Indian Ad Technology company added Adskom India to Group
Partnered with TelkomSel, the largest communications carrier in Indonesia
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2-5. Operating environment - Analysis and key points
Ad Platform Business
Marketing Automation Business
Overseas Business
From rapid growth phase to next growth phase
Expand to OOH (Real)
Strengthen approach to major media
Engage in digital OOH domain
Growth market with growing client needs
Focus on product functions
Rapid growth market larger than domestic market
Strong inbound demand
Operating environment analysis Key points
Concentrate development resources to strengthen product functions and links
Promote solutions provision tailored to each location
Strengthen and expand crossborder ad distribution services
*OOH: Short for Out of Home, which refers to ad media consumers encounter outside the home such as transportation ads and outdoor billboard ads.
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2-6. Key Points: Ad Platform Business
• Aggressive development of the rapidly growing digital OOH domain Use official launch of newly developed ad distribution platform for taxi dispatch services in February to promote business development.
143.7165.8
196.3
229.7252.2
277.1
318.6
2017Actual
2018Prospect
2019Estimation
2020Estimation
2021Estimation
2022Estimation
2025Estimation
Scope of domestic digital signage market Trend forecast (JPY billion)
• Market scope growth to JPY 300 billion by 2025
(Source: Fuji Chimera Research Institute, Inc.) *OOH: Short for Out of Home, which refers to ad media consumers encounter outside the home such as transportation ads and outdoor billboard ads.
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2-7. Key Points: Marketing Automation Business
Enhance functions Strengthen links
Market automation tool providing uniform management & implementation,
from marketing to sales promotion
Centralized CRM/SFA, from customer/negotiation management to analysis
No. 1 chat tool in Japan adopted by 4,500 companies
• In November of last year, we acquired stock in Chamo, Inc. which operates the chat-based customer service tool "chamo", enabling us to offer various services to marketing technology domains.
• Concentrate development resources to strengthen product functions and links
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2-8. Key Points: Overseas Business
• Promote solutions provision tailored to each location • Strengthen and expand crossborder ad distribution services provided in
collaboration with Softbank to target inbound traffic (foreign visitors to Japan) and crossborder EC customers.
Distribute ads for major supermarkets, drug stores, and consumer goods manufacturers
Ad
3. FY2019 Business Outlook
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3-1. FY2019 Forecast
FY2018(Actual Results)
FY2019(Forecast) YoY
Net Sales 14,954 15,572 +4.1%
Gross Margin 1,946 2,590 +33.1%
Operating Income/Losses -310 23 -%
Ordinary Income/Losses -330 7 -%
EBITDA 19 359 +1789.9%
• Focus on net sales, gross margin, EBITDA while aiming for full-year profitability operating income
• Due to the characteristics of our business, we forecast greater weight during the second half
(Unit: JPY million)
4. Reference Materials
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Advertiser
Advertising agency
DSP
Ad network
OEM destination
Other
Internet media
Cost
(1) Ad listing fees received from advertisers based on number of ad impressions when ads are distributed via GenieeSSP and GenieeDSP.
(2) Monthly fees and service fees received from companies using MAJIN and Chikyu.
Inventory sales (1)Service delivery (2)System development and provision (1)(2)
Inventory sales (1)
Ad listing fee (1)
Ad serving (1)Service delivery (2)
SalesService fee (2)
Sales Ad listing fee (1)Service fee (2)
Sales
• Revenues mainly comprised of two elements: ad listing fees and system usage fees• GenieeSSP, MAJIN, Chikyu, and OEM provision are business models that can
expect continued customer use
4-1. Business Model
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Internet Advertising Market 2019
¥1,700 billion2019年 MA/CRM & Chat market
¥130 billion
1,378.2 1,536.9
1,717.6 1,927.2
0
500
1,000
1,500
2,000
2017(Actual)
2018(Estimation)
2019(Estimation)
2020(Estimation)
2021(Estimation)
• Japanese market continues to show annual growth of 10-20%.• As of 2019, the online ad market was approximately 1,700 billion yen. MA/CRM
market was approximately 120 billion yen, and chat market was 10 billion yen.
4-2. Japanese Market Environment
0
40
80
120
160
2017(Actual)
2018(Estimation)
2019(Estimation)
2020(Estimation)
2021(Estimation)
(Created by Geniee based on IDC Japan "Japan CRM application market forecast", and “ITR Market View: Business chat market 2018”)
110.2120.8
132.8 144.6156.0
MA/CRM
Chat
(Yano Research Institute "Online Advertisement Market in Japan: Key Research Findings 2018“)
(JPY billion)(JPY billion)
2,138.3
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0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2017 2018 2019 2020 2021 2022
4-3. Overseas Market Environment
• Significant growth in the Southeast Asian/Indian market, particularly Indonesia and India.
• This was approx. 470 billion yen as of 2019 and is expected to grow to 670 billion yen by 2022.
(JPY billion)
Created based on "eMarketer" data(Estimation)
Asian Internet advertising market
2019
¥470 billion2022
¥670 billion
324.5
674.4VIETNAM
INDIA
INDONESIA
MALAYSIA
SINGAPORE
THAILAND
392.7
469.6
546.2
611.1
(Estimation) (Estimation) (Estimation)(Estimation)
700
600
500
400
300
200
100
0
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* Temporary staff and outsourced workers are not included in the number of employees.
Company Name Geniee, Inc.
Business Marketing Technology Business
HeadquarterSumitomo Realty & DevelopmentShinjuku Oak Tower 6th Floor,6-8-1 Nishi Shinjuku, Shinjuku-ku, Tokyo, Japan
Establishment April 14, 2010
Representative President and CEO Tomoaki Kudo
Executive Officers
Director Hiroshi HiroseKatsumasa Niki (Outside)Daisuke Fujihira (Outside)Michimasa Naka (Outside)
Director and Audit &Supervisory Committee Member
Katsuyuki Toritani (Full-time, Outside)Sachio Todoroki (Outside)Fumiaki Goto (Outside)
Employees*258Geniee Japan: 163Overseas subsidiaries: 95
Capital ¥1,539 million
End of Fiscal Year March 31
Group company
Geniee International Pte., Ltd. (Singapore)Geniee Vietnam Co., Ltd. (Vietnam)PT. Geniee Technology Indonesia (Indonesia)Geniee Adtechnology (Thailand) Co., Ltd. (Thailand)PT. Adstars Media Pariwara (Indonesia)Adskom India Private Limited (India)Chamo,Inc. (Japan)
4-4. Company Profile(As of the end of March 2019)
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4-5. Stock Situation (As of the End of March 2019)
Name Shares Owned %
Tomoaki Kudo (Representative Director and President) 6,540,300 36.60
SoftBank Corp. 5,625,000 31.48
Takuya Yoshimura 662,500 3.70
Hiroshi Hirose (Director) 655,900 3.67
Trans Cosmos Co., Ltd. 495,000 2.77
NICE SATISFY LIMITED 402,000 2.24
AT-Ⅰ Investment Limited Partnership 378,200 2.11
Fenox Venture Company Ⅸ, L.P. 258,000 1.44
Anchor Advisors TMT3 Investment Limited Partnership 204,900 1.14
PT Metra Digital Investama 93,000 0.52
The officers of Geniee40.3%
Individuals and others18.3%
Financial institutions
0.2%
Financial instruments brokers1.4%
Other corporations34.7%
Foreign corporations, etc.
5.1%
Major Shareholders Shareholder Composition by Owner
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Founding Spirit
To create a global technology company founded in Japan.
Mission
Use technology to create new value andwork together with clients to build successWe believe in the possibilities of technology.
We bring new value to corporate marketing activities to create products that promote innovation.
As a Japanese technology company, we have a deep understanding of business in Asia. We reflect this understanding in our products and services to achieve new success for Asian companies.
4-6. Our Vision
Note concerning forward-looking statements
The materials and information provided in this release include forward-looking statements. These forward-looking statements are based on assumptions that reflect present forecasts, predictions, and risks, and include uncertainties that could lead to results that differ from these statements.These risks and uncertainties include industry and market conditions, fluctuations in interest rates and currency markets, and other economic conditions in Japan and internationally.Even in the event of new information or future circumstances, our Company bears no liability to update or revise the forward-looking statements contained in this release.
Thank you for your attention.
<Inquiries>
Management Planning Department, IR Group TEL:03-5909-8177FAX:03-5909-8182
URL:https://geniee.co.jp/inquiry/