Nihon Enterprise Co., Ltd. Earnings Summary …4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY 2013 FY2014...

Nihon Enterprise Co., Ltd. All rights reserved1

Nihon Enterprise Co., Ltd.

Earnings Summary FY2016 (ended May)

（From 1st

June 2015 to 31st

May 2016）

13th

July 2016


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2 Contents Service Segment （Strategy for FY2017）

3 Solution Segment （Strategy for FY2017）

4 Forecast and Strategy

Highlights

PL

Quarterly Growth

Sales

Sales（Contents Service Segment)

Sales（Solution Segment）

COGS

SG&A expenses

Business Strategy

Lifestyle

Entertainment

Traffic Information

Forecast

Business Strategy

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Table of Contents

Business Strategy

Solution（consigned development and others）

Advertising Agent Service (storefront affiliate) / Overseas / R&D

inaseri Co., Ltd.

1 Overview of Earnings Summary (FY2016)


Overview of Earnings Summary

(FY2016)


Solution

・Sales hit record with good performance in consigned

development

・Business and capital tie-up with Smartvalue Co., Ltd. to

strengthen regional revitalization business

・Allianed with Metropolitan Fish Market Cooperative

Association to start the first EC service, “Inaseri”

Advertising

(Advertising Agent Service)

・Sales hit record

・In addition to mobile shops, aggressively developed sales

channels which suitable for each contents value

Overseas・Strong performance with YoY 190% up in number of mobile

phone sold

1 Overview of Earnings Summary

Highlights

Contents

Service

Segment

Solution

Segment

Consolidated

Summary

S a l e s ： 5,530MNyen YoY： 8.1%up

O r d i n a r y

I n c o m e： 252MNyen YoY： 23.4%up

Traffic Info.

・Aggressive business expansion to solution segment such as

bus-location-system and data-broadcasting based on expertise

in contents service business

Entertainment

・Good performance in “Chokotto game”

・”BOOKSMART”, focused on strengthening partnership with

“Tokyo-shoten commercial union” and service expansion.

Lifestyle

・Allianced with Excite Japan Co., Ltd. for “Women‘s Diary”

・Promoted to form the “life support platform” centering around

three major contents or “Women’s Diary”, “Fivetlak” and

“Dealing”


Consolidated PL


FY2015 FY2016

YoY

Difference Growth rate

Sales 5,116 5,530 413 8.1%

COGS 2,704 3,208 504 18.6%

Gross profit 2,411 2,321 ▲ 90 ▲3.7%

SG&A 2,222 2,102 ▲ 120 ▲5.4%

Operating profit 189 219 29 15.7%

Non-operating profit 24 34 9 41.3%

Non-operating expense 9 1 ▲ 8 ▲85.9%

Ordinary profit 204 252 47 23.4%

Extraordinary profit 341 290 ▲ 50 ▲14.7%

Extraordinary loss 29 28 ▲ 1 ▲4.0%

Pre-tax profit 516 515 ▲ 1 ▲0.2%

Total amount of

corporation tax and others307 163 ▲ 143 ▲46.7%

Net profit 208 351 142 68.2%

Net profit attributable

to non-controlling interest31 24 ▲ 7 ▲22.8%


to the parent company 177 327 149 84.2%

（MN Yen）


経常利益率

592 579 613 638 638 647 643 621 595 601 546 545 500

537 559421

464593

669555 604

780 718680

928 1,007

1,129 1,139

1,0351,103

1,2311,316

1,198 1,225

1,3751,319

1,227

1,474 1,508

105 60 108 90 81 57 13 55 78 60▲ 7

114 84

▲ 200

0

200

400

600

800

1,000

1,200

1,400

1,600

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY2013 ＦＹ2014 ＦＹ2015 ＦＹ2016

コンテンツサービス事業ソリューション事業経常利益

9.4%

5.3%

10.5%

8.2%

6.6%

4.3%

1.1%

4.5%

5.7%

4.6%

-0.6%

7.8%

5.6%

▲2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Q/Q growth


（MN Yen）

■Contents Service Segment ■Solution Segment ■Ordinary profit ■Ordinary profit ratio

Sales and ordinary profit increased QoQ,

driven by solution segment with highest

sales


2015年5月期 2016年5月期YoY


Contents Service Segment 2,506 2,194 ▲ 311 ▲12.4%

Solution Segment 2,609 3,335 725 27.8%

Total 5,116 5,530 413 8.1%

Sales

（MN Yen）

■ Y/Y Growth


Sales rose by 8.1% on a whole,

driven by Solution Segment with 27.8% up

while content segment decreased


FY2015 FY2016

YoY


Traffic Info. 924 876 ▲ 48 ▲5.2%

Entertainment 1,168 1,024 ▲ 144 ▲12.3%

Lifestyle 413 294 ▲ 119 ▲28.8%

Contents Service Segment 2,506 2,194 ▲ 311 ▲12.4%

Sales (Contents Service Segment)

（MN Yen）

■ Y/Y Growth

※ “Entertainment” includes “Games”, “Mail”, “Music”, “E-book” and “Overseas”

Sales decrease by 12.4% on a whole

due to lower advertising efficiency

in contents on carrier platforms




Sales (Contents Service Segment)

■ Q/Q Growth

（MN Yen）

■Traffic Info. ■Entertainment ■Lifestyle

※ “Entertainment” includes “Games”, “Mail”, “Music”, “E-book” and “Overseas”

Sales decreased YoY and QoQ in Traffic info.,

Entertainment and Lifestyle

173 186224 217 222 244 235 224 220 215 218 224 217

316 287279 293 298

285 298 294 289 309253 247

214

101 105109

128 116 116 109102

85 76

74 74

68

592 579613

638 638 647 643621

595 601

546 545

500

0

100

200

300

400

500

600

700

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY2013 ＦＹ2014 ＦＹ2015 ＦＹ2016


2015年5月期 2016年5月期前期比

金額増減率

Solution 1,192 1,637 444 37.3%

Advertising Agent Service 1,168 1,304 136 11.7%

Overseas 249 393 144 58.0%

Solution Segment 2,609 3,335 725 27.8%

Sales (Solution Segment)

■ Y/Y Growth

（MN Yen）

Strong performance in all categories

contributed to 27.8% sales increase totally.

11.7% up in Solution(consigned development and others)

12.4% up in Advertising Agent Service

and 58% up in Overseas



227 249 264 255316

219 263 264

444 404339 380

511

197207

98 147

225 404247 257

259

216238

453

396

112101

5861

51

46

4482

76

97102

94

98

537 559

421464

593

669

555604

780

718680

928

1,007

▲ 100

100

300

500

700

900

1,100

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

FY2013 ＦＹ2014 ＦＹ2015 ＦＹ2016

ソリューション広告(広告代理サービス) 海外

Sales (Solution Segment)

■ Q/Q Growth

■Solution ■Advertising Agent Service ■Overseas

Solution (consigned development and others) sales hit

record. Slight growth in Overseas keeping good

performance. Advertising (Advertising Agent Service)

increased by 53.0% YoY

（MN Yen）



FY2015 FY2016

YoY


COGS 2,704 3,208 504 18.6%

COGS ratio 52.9% 58.0% - -

（MN Yen）

COGS

■ Y/Y Growth

With increase of Solution Segment

sales ratio, COGS rose by 5.1%



612 617 517 550 629 687 615 642 758 728 655 866 958

54.2% 54.2%

50.0% 49.9%51.1%

52.2%51.3%

52.4%

55.2% 55.2%

53.4%

58.7%

63.5%

44.0%

49.0%

54.0%

59.0%

64.0%

0

200

400

600

800

1,000

1,200

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

ＦＹ2013

ＦＹ2014 ＦＹ2015 ＦＹ2016

売上原価売上原価率

COGS

■ Q/Q Growth

（MN Yen）

■COGS ■COGS ratio

Due to sales growth in Solution Segment, COGS rose



FY2015 FY2016

YoY

difference Growth rate

(Advertising expenses) 711 541 ▲ 170 ▲24.0%

(Others) 1,510 1,560 50 3.4%

SG&A 2,222 2,102 ▲ 120 ▲5.4%

SG&A ratio 43.4% 38.0% - -

SG&A

■ Y/Y Growth

（MN Yen）

Advertising expense down by 24.0% due to

advertising strategy shift from aggressive

investment in previous FY.

Therefore SG&A ratio improved by 5.4%



67113 96

127178

212 215153 129 138

204

12870

350

348

320

329

343

364 356

376 412 395

380

371413

418

461

417

457

521

576 572

530 542 533

584

500483

37.0%40.5% 40.3% 41.4% 42.4% 43.8%

47.8%43.3%

39.4% 40.4%

47.7%

33.9% 32.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0

100

200

300

400

500

600

4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

ＦＹ2013

ＦＹ2014 ＦＹ2015 ＦＹ2016

（広告宣伝費）（その他）販管費率

SG&A

■ Q/Q Growth

（MN Yen）

With shift in advertising strategy adverting expense

decreased, and consequently SG&A improved


Advertising expense Others SG&A ratio


Strategy for FY2017


Strategy for FY2017

Contents Service Segment


2 コンテンツサービス事業

Aggressively forming contents platform

and creating hit contents

through contents & service development

and strengthen alliance

Service provision centering major five contents

E-Book

『BOOKSMART』Traffic Info.

『Traffic Info. Service』Healthcare

『Woman's Diary』Flea-market

『Dealing』Messenger App

『Fivetalk』

ライフスタイル

Segment Strategy


■ Aggressively forming life support platform through “strengthen alliance” and

“service genre expansion”

■ With expertise in healthcare and child education App. development, expanding

coverage genre to MH and child care.

■ Developing “Fivetalk” to be a conversation interface on IoT

Women’s Diary

・App. to devise connection (a body composition and fat scale) in corporation with TANITA CORP. (21st Jan.2016)

・Started Joint operation of “Women’sDiary” with Excite Japan Co., Ltd. (4th April 2016)

Fivetalk

・Released “Fivetalk” for drive on TOYOTA’s “T-Connect”(※1) （25th June 2015）

Dealing

・Purchased assets of service（1st Dec. 2015)

・Built appropriate environment for person-to-person trades

(※1) TOYOTA’s next generation telematics service

Lifestyle

"Love memo"

"Mainichi inu

neko diary"

"Dealing"

"Couple note"

nursing

job

healthmoney

marriage

shopping

householdchores

marrigehunting

childbirth

TTC

pet

weightcontrol

diet

childcare

entertainment

"Women’s Diary" “Fivetalk"

"Beauty Rhyme

for women"

drive

Major achievements in FY2016

2 Contents Service Segment


Entertainment

・ Authorized as “RoBoHoN” partner (10th

May 2016)

・”BOOKSMART”, released PC service in addition to smartphone and tablet

■ Chokkot game

Carrying out advertising strategy and releasing new

games to augment popularity on platforms such as

“Sugotoku Contents”

■ BOOKSMART

・Tightening alliance with Tokyo-Shoten commercial union

- Started regular joint event “Tokyo Book Award”

exploring & cultivating authors (10th

June 2016）

・ Enhancing services to increase users

- Released browser viewer plus App viewer (10th

June 2016）

- Started ”rental service” and “all you can read service”

(10th

June 2016）

■ Distributing contents on new platform such as “Pepper”

（SoftBank）




Traffic Information

■ Billing to app.200 thousand subscribers

■ Releasing functions to enhance customer engagement

■ Expanding distribution platform in addition to carrier platforms

■ Aggressive service provision to BtoBtoC

BtoC (Contents Service Segment) BtoBtoC (Solution Segment)

Taffic Information Service

・Promoted BtoBtoC data distribution aggressively

- Bus location system for Keihin Kyuko Bus Co., Ltd.（March 2016）

- Data broadcasting for Television KANAGAWA, Inc. （4th April 2016）

expanding

Traffic Information Service




Strategy for FY2017

Solution Segment


3 ソリューション事業

Expanding Solution business

through offering total solution from App

development, system integration, voice to

new technologies at one stop shop

Group Strategy

ライフスタイル

Segment Strategy


Consigned development

■ Total Solution Service

- Carrying out a customer development on the

back of growing IT investment by enterprises

■ Regional revitalization business

- With initiatives by local government, carrying

out projects such as “lower birthrate” and

“tourism” aggressively

- Expanding business opportunities

with Smartvalue Co., Ltd.

- Strengthening group synergy

Packaged service

■ Releasing education cloud ”e-Managi”

■ “BizTalk, “AplosOne”

- Increasing users through function and usability

enhancement

■ “Profair”

- Focusing on customer development through

seminars and other sales activities

■ “Concerto”

- Introducing partner system to expand

distribution channel in addition to direct sales

【Consigned development】・Business and capital alliance with Smartvalue Co., Ltd.

(18th Feb. 2015)

・Released “integrated operation and audit service, Premier Cloud” with IDC Frontier Inc. (18th June 2015)

【Regional revitalization business】・”Chiba My Style Diary”, an App for countermeasures against lower

birthrate, Chiba prefecture (20th August 2015)

・”Shimoda Kodomo Diary”, an App to support parenting, Shimoda city, Shizuoka prefecture. (29th Feb. 2016)

・Released a tourism cloud “Tourism Yubisashi Navi”. (10th Aug. 2015)

・Released a history explore AR navigation App, “Shiroishi ShiroShiro Navi” (1st April 2016)

・Opening ceremony of “Higasi kison solar power plant”, Yamaguchi prefecture. (15th May 2016)

Solution (Consigned development

and others)


closed network

eavesdrop data leakage

Messenger App for business use

Reverse auction service

Purchase at reasonable

priceBuyer

Buyer

Az10 mins

Current price

TimeSupplier Supplier

SupplierSupplier

SettingsDivision A

Extension telephone networkLandline phone + Smartphone (for free)

Branch Client B

IP Phone software

Call with OABJ

in-coming call

HQClient A

in-coming call

Outing Outing

Transfervia ext. tel netowork

Kitting support tool for smartphone

Division B

automatic bulk kitting

Data entry

3 Solution Segment


Advertising Agent Service Overseas

■ Developing distribution channels

which suitable for each contents

value

■ Provision of superior contents

■ Carrying out tie-up projects

■ Focusing on sales to enterprise

customers to increase sales

■ Opened “Yu Qiao Store” in

addition to existing two stores

（21st April 2016※1）

R&D in state-of-the-art technology

is aggressively proceeding

H E M SCarrying out product development

visualizing energy efficiency

Smar t

Agricul

t u r e

“Next generation food production

trial business” in Aizu-Wakamatsu

city, Fukushima prefecture (29th May 2015)

D r o n eWired multi drones controlling

technology “Doronet” (28th March 2016)

・Sales hit record through “adapting flexibly to market environment” and “achieving sales measurements firmly”

・ Provided superior contents including “All you can enjoy, from movies, dramas to cartoons” and “travel guide”.

・ YoY 190% up in number of mobile phone sold

(※1) FY2017 in China : From 1st April 2016 to 31st March 2017.


Major achievements in FY2016Contents provisioning

Payment

CP NE Store

Sales consignment

Distribution to multiple stores

Sales

Customer

Try this!

Seems nice!

3 Solution Segment


inaseri Co.,Ltd.

・ C o m p a n yn a m e

： inaseri Co.,Ltd.

・ President &C E O

： Yoshikatsu Hagiwara

・ A d d r e s s ： 1-17-8 Shibuya, Shibuya-ku, Tokyo 150-0002 Japan

・ Established ： 3rd June 2016

・ C a p i t a l ： 75 Hundred Million Yen（Capital reserve: another 75 hundred million yen）

・ B u s i n e s s ： Planning, development and operation of Metropolitan Central Wholesale Market,Tsukiji Market, Cooperative Association, Official EC service, “Inaseri”

・ Shareholder ： Nihon Enterprise Co., Ltd. (100%)

The first EC business by cooperative association (app. 600 companies)

Wholesaler

Wholesaler

Wholesaler

Restaurant

and food shop

Restaurant

and food shop

Restaurant

and food shop

①put-up fish and sea food

based on the next day’s arrival info. ②order by 2:00 AM

③NIPPON EXPRESS works as a

forwarder, and transport

companies deliver each items to

food shops on the same day of

order closing

④ Payment

(Credit or Bank debit)

Kaimawari

Statio

In Toyosu

market

announce “Inaseri” service at joint press conference

(3rd

June 2016)

3 Solution Segment


Forecast and Strategy


While sales will be driven by Solution Segment,

4.2% down due to influences by government regulations and

change in contents market situation.

With improving GOGS and shift in advertising strategy,

operating profit will rise by 50.2% and

38.6% for ordinary profit.

Net profit attributable to the parent company will down

58.7% YoY, as in previous FY extraordinary gains and losses

(gain on sale of investment securities) was added

FY2016FY2017

(forecast)

YoY


Sales 5,530 5,300 ▲ 230 ▲4.2%

Operating profit 219 330 110 50.2%

Ordinary profit 252 350 97 38.6%


to the parent company 327 135 ▲ 192 ▲58.7%

Forecast


（MN Yen）

Annual dividend per stock（Forecast for FY2016）：3.00Yen


Music

Call Center

IoT

Sharing

Economy

Robot

Drone

SmartAgriculture

Fin

Tech

M2M

RingingTone

(song)

Automaticcar driving

Wearable

Expansion of Business Fields in smart

devise era


Strategy

IP phone

Messenger

TrafficInfo.

RingingTone

(melody)

Game

Decorationmail

E-book

IVR

Regionalrevitalization

Big data

My number

ＧＰＳ

Security

3DVR

HEMS

AI


http://www.nihon-e.co.jp/ir/

※View and forecast contained in this document are based on our assessment at the time of document issuance, and accuracy of the information is not guranteed.Please note that actual outcomes and results may differ materially from the information due to any changes caused by various factors.※In this document there are some rounding variances in calculations.

Nihon Enterprise

Earnings results, IR presentation materials, press release,

and company information are available at www.nihon-e.co.jp/ir/

also delivered via "timely disclosure alert mail" service.

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Nihon Enterprise Co., Ltd. Earnings Summary …4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY 2013 FY2014...

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