ＦフォースＧ（7068） – ［Delayed］Presentation Material for FY2022 Q2

2021年5月期決算説明資料Financial Presentationfor the Fiscal Year ended May 31, 2021Financial results for the 2nd Quarter2021年6月30日Of Fiscal Year Ending May 31,2022(Our Business plan and Growth Potential)January 7, 2022Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.目次01 Financial Highlights02 Matters related to business plan and growth potentialBusiness ModelMarket EnvironmentThe Source of CompetitivenessBusiness planRisk information2141528333661101決算ハイライトFinancial Result HighlightChart of major Group companiesFeedforce Group Inc.September 1, 2021100%100%100%82%Consolidated subsidiariesAnagram Co., Ltd.Consolidated subsidiariesFeedforce Inc.Consolidated subsidiariesSocial PLUS Inc.Consolidated subsidiariesRewire Inc.Feedforce Group Inc.Transition to a holding company structure from September 2021Shippinno and Fracta have joined the Group, and with the establishment of a local subsidiary in VietnamNovember 7, 2021100%100%100%82%51%80%Consolidated subsidiariesAnagram Co., Ltd.Consolidated subsidiariesFeedforce Inc.Consolidated subsidiariesSocial PLUS Inc.Consolidated subsidiariesRewire Inc. Consolidated subsidiariesShippinno Inc.Consolidated subsidiariesFEEDFORCE VIETNAMCOMPANY LIMITEDFeedforce Group Inc.7 operating companiesDecember 28, 2021100%100%100%82%51%80%51%Consolidated subsidiariesAnagram Co., Ltd.Consolidated subsidiariesFeedforce Inc.Consolidated subsidiariesSocial PLUS Inc.Consolidated subsidiariesRewire Inc.Consolidated subsidiariesShippinno Inc.Consolidated subsidiariesFEEDFORCE VIETNAMCOMPANY LIMITEDConsolidated subsidiariesFracta Inc.3FY2022 Q2 Summary of Results(Millions of yen)2021/52QConsolidated cumulative2022/52QConsolidated cumulativeYoY2021/52QConsolidated3QConsolidated4QConsolidated2QConsolidated QoQ2022/51QConsolidated4,5505,806+27.6%2,3613,1073,3632,8682,938+2.5%Consolidated ResultsNet sales and profits significant increase in YoY QoQ also steadily increase Net sales and profits1,0921,372+25.7%568680727672700+4.1%TransactionAmountNet Sales(After retroactive Accounting Standard for Revenue Recognition in FY2021/5)Profit before income taxesProfit attributable to owners of parentEBITDA※399591+48.3%229325334293298+2.0%Operating income315507+60.7%187282291250256+2.3%305498+63.1%185279289242256+5.9%138311 +124.6%110173160154156+1.6%※ EBITDA = Operating Income + Depreciation + Amortization4FY2022 Q2 Summary of Segment Results2021/52QConsolidated cumulative2022/52QConsolidated cumulativeYoY2021/52QConsolidated3QConsolidated4QConsolidated2QConsolidated QoQ2022/51QConsolidated（Millions of yen）Net Sales(After retroactive Accounting Standard for Revenue Recognition in FY2021/5)8081,023+26.6%424523562503519+3.2%Operating income268461+71.8%160250272227233+2.6%DXBoth YoY and QoQ both increased sales and profitsPSSaaSBoth YoY and QoQ both increased sales and profitsIncreased sales through Shopify apps, etc.Increase in operating lossNet Sales283342+20.6%144157160166175+5.3%Operating income63130 +105.9%3750416267+8.8%PSSaaSDXNet Sales－7－0425 +107.5%－－Operating income△15 △84△10 △17 △22 △39 △44－※ PS stands for Professional Services Business5Quarterly Net Sales Trends（ After retroactive Accounting Standard for Revenue Recognition ）（Millions of yen）PSSaaSDXContinued sales growth trend in SaaS business727680700672580568524462562519 5235034241341411491381451033795692092171801642271101162018/51Q2019/51Q2020/51Q2021/51Q2Q3Q4Q2Q3Q4Q2Q3Q4Q2Q3Q4Q22022/51Q52Q1441571601661756FY2022 Q2 Increase/Decrease in Operating Income(YoY)（Millions of yen）SaaSIncreaseDXIncreasePSIncrease（ After retroactive Accounting Standardfor Revenue Recognition ）Increase in labor costs Other expensesincreaseYoY’s increased sales in each business segment contributed to the increase in profits.FY2021 2Q cumulativeOperating IncomeFY2022 2Q cumulativeOperating Income7FY2022 Q2 Increase/Decrease in Operating Income(QoQ)（Millions of yen）SaaSIncreaseDXIncreasePSIncreaseIncrease in labor costsOther expensesincreaseIn QoQ, sales and profits in each business segment contributed to the increase in profits.FY2022 1QOperating IncomeFY2022 2QOperating Income8Sales by Service2021/52QConsolidated cumulative2022/52QConsolidated cumulativeYoY2021/52QConsolidated3QConsolidated4QConsolidated2QConsolidated QoQ2022/51QConsolidatedPS（Millions of yen）PS (After retroactive Accounting Standardfor Revenue Recognition FY2021)8081,023+26.6%424523562503519+3.2%Anagrams592774+30.7%311389431372401+7.8%SaaS283342+20.6%144157160166175+5.3%Feedmatic128160+25.1%DF PLUSOtherEC Boosterdfplus.io7512327985+13.3%4 △63.5%27 △13.9%105+33.5%Social PLUS172209+21.3%DX－7－67386134189－86443154695081462134898484432135041 △4.2%1 △20.0%14+3.7%54+8.1%102106+4.5%25 +107.5%In QoQ, Anagrams sales increased, but Feedmatic sales decreased76 △9.8%SaaSQoQ increased sales of each service92021/52QConsolidated cumulative2022/52QConsolidated cumulativeYoY2021/52QConsolidated3QConsolidated4QConsolidated2QConsolidated QoQ2022/51QConsolidatedLabor costs remained flat in QoQ（Millions of yen）791864+9.2%388404444421443+5.2%Operating expensesOperating Expenses(After retroactive Accounting Standardfor Revenue Recognition FY2021))Cost of SalesLabor CostsExpensesSG&A expensesPersonnel CostsExpensesR&DRecruitment trainingAdvertisingDepreciationAmortization goodwillOther+7.3%468+11.0%369291784222142081311659239339632274248220611106023108+6.0%+4.5%18514639203104987512911422131503721711310410543011421821484325312812414115301151192163292291221075353011512041594423912611317530115610Financial positionFY2017Non-ConsolidatedFY2018Non-ConsolidatedFY2019Non-ConsolidatedFY2020ConsolidatedFY2021ConsoliDated（Millions of yen）FY2022Q1ConsoliDatedFY2022Q2ConsoliDatedYoYQoQCurrent assets3943204263,5284,9154,5974,824△90+227Non-current assets2825441,6901,5521,6061,965+413+359Total assets4223454705,2196,4676,2036,790+322+587Due to the recording of goodwill due to the acquisition of Goodwill as a subsidiary of Shippinno, Non-current assets increasedCurrent liabilities2051923221,3702,2551,9022,200△54+298Non-current liabilities13499502,0181,8101,7311,853+42+122Total liabilities3392913733,3894,0653,6344,054△11+420Shareholders’ equity9572,3662,5232,680+313+157Share acquisition rightsNon-controlling interestsー87232244152+202+0+8+183ーー8354ーー5497ーーTotal net assets971,8292,4012,5682,735+334+16711Consolidated Balance Sheet Breakdown As of November 30, 2021（Millions of yen）現金及び預金は 3,209百万円無形固定資産は 1,637百万円有利子負債は 1,770百万円株主資本は 2,680百万円Cash and deposits 3,209Other liabilities 2,003Borrowings 1,770Other assets 1,944Deferred tax liabilities 283Amortization in the next 8-10 yearsGoodwill 752Shippinno 371Anagram 381Shareholders’ equity 2,680Customer-related assets 884AnagramShare acquisition rights 52Non-controlling interests 212Outlook for the Ratio of Shares In CirculationPresent（Our estimates）By Around May 2024We aim to achieve circulating share ratio of 35% or more by around May 2024Ratio of Shares In Circulation※About25%Ratio of Shares In CirculationOver35%※ Shares In Circulation：Number of shares listed, excluding “number of shares owned by shareholders who own 10% or more of listed shares”, “number of shares held by officers”, “number of treasury shares”, “number of shares owned by special stakeholders other than officers”, “number of shares held by special stakeholders other than officers”, “number of shares deemed to be fixed” and “number of other shares deemed fixed”1302事業計画及び成長可能性に関する事項Our Business Plan and Growth PotentialビジネスモデルBusiness Model(1) Business Description List of key services and pricingFee structurePSSaaSDXRate of charge on customer promotional expenses (advertising expenses)Rate of charge on customer sales (shipment value)Operation-based advertising agency for listings, SNS, etc.Automation of e-commerce shipments and ordersConsists of a revenue model of rate, fixed monthly, and per-month unit price on transaction volumeConstant rate of advertising volumeFixed monthlyUnit price per person per monthData Feed advertising operationsGoogle Shopping Ads AutoSubscription Feature Shopify AppData Feed Operations OutsourcingData Feed Management ToolEC-specific no-code toolDF PLUSSocial Login & Message DeliveryShopify apps related to store paymentsLINE-based CRM infrastructure Shopify appShopify app related to point grant featureSupport for brand strategy design and EC construction16What we want to achieve is to unearth the hidden charms of a company that even the clients themselves are not aware of and make their business successful. We want to be a partner that supports our clients in every way possible to help them succeed in their business, not just in the operation of managed advertising.Anagram Features and StrengthsMarketers are overwhelmingly strong in operational advertising.Able to consult with the entire business and the entire market.An integrated system that does not separate sales and operations.Utilizing Feedforce’s expertise in Data Feed, we are フィードフォースが有するデータフィードのノウハウを活かし、特にEコマース、フィードフォースが有するデータフィードのノウハウを活かし、特にEコマース、particularly good at digital marketing utilizing digital assets in リテール、人材、不動産における、デジタルアセット（商品データ）を活用したリテール、人材、不動産における、デジタルアセット（商品データ）を活用したEC, retail, human resources, and real estate.デジタルマーケティングを得意としています。デジタルマーケティングを得意としています。Potential CustomersInductionRecognition, attentionInterestsNew and similar audience distributionFeed & Tag OptimizationCampaign OptimizationCompare and reviewVisit SiteSearchSearch-Linked AdsCV PromotionRetargeting AdsBuyingCustomersFeedmatic proposes the optimal media, distribution design, and overall Feedmaticでは、データフィード広告を中心に、リスティング広告やスタティックFeedmaticでは、データフィード広告を中心に、リスティング広告やスタティックfunnel strategy to match your KPIs by combining a wide range of 広告、最新の広告メニューなど幅広い広告を組み合わせることで、お客様のKPIに広告、最新の広告メニューなど幅広い広告を組み合わせることで、お客様のKPIにadvertising, including listing advertising, static advertising, and the latest 合わせて、最適な媒体・配信設計・ファネル全体の戦略をご提案いたします。合わせて、最適な媒体・配信設計・ファネル全体の戦略をご提案いたします。advertising menus, with a focus on Data Feed advertising.• Feed Building• Tag building• Using APIs• Etc.DF PLUSWhat is a Data Feed?A system for periodically sending and receiving updated data such as product data from the sender ( Advertiser, etc.) to the receiver ( Advertising media, etc.) on the Internet.Outsourced services for Data Feed operationsProduct data, etc.Data FeedData sourceData destinationThe company provides a dedicated feed distribution system and feed creation services and support, which are costly to develop in-house.Example of Data Feed AdvertisingGoogle Shopping AdsFacebook Dynamic AdsCriteo Dynamic Retargeting AdsOwn siteSocial MediaSearch enginesNews MediaComparison sitesAffiliateGet your products listed on Google in as little as five minutes, completely free of charge.What is EC Booster?E-commerce StoreSupported EC Cart SystemsLinking EC stores to GoogleShopping AdsFree Listings”EC Booster” is a service that automates the process of attracting customers, targeting small and medium-sized E-Commerce businesses.Currently, we are automating the posting and operation of “Google Free Listings” and “Google Shopping Ads”.EC businesses can easily post their special products in the prime Google search locations.Easy submission and automatic operation functionsEasy submission and automatic operation functionsSubmission status notificationImprovement card function *New featureSubmission status notificationImprovement card function With as little as five minutes of initial setup, you can automatically submit advertisements from your E-commerce site. There is no need for operational effort.Fully automated handling of difficult screening and other tasks.Daily operations are also fully automated, so you can rest assured.It will automatically notify you if there are any products that are not listed on Google.If your ad is disapproved by Google, we’ll show you how to deal with it, so you can make improvements in the system right away and minimize lost opportunities!This function provides “advice on improving product data” based on EC Booster’s vast experience in ad serving and product placement.We provide successful Know-how on how to improve product information that can improve usability, as successful e-commerce sites always do.Make product data top-selling with Data Feed.”dfplus.io”, a Data Feed Management Tool with a 98.0%Usage Retention Rate”dfplus.io” is a Data Feed Management Tool for utilizing EC product data, human resource job posting data, real estate property data, etc. for marketing.In addition to data feed ads such as Google Shopping Ads, Criteo, Facebook, Indeed, etc., we also provide recommendations, data linkage with partner sites, and social commerce, realizing an operational environment where even a small number of people can easily achieve results.You can complete the process at hand.The creation and management of Data Feeds can be completed at hand, greatly reducing communication costs.Rapid implementation of measures is possible.Powerful featuresBeginners are welcomeWe have improved its functions more than 100 times in a year, including automatic optimization, automatic creation of feeds, and avoidance of human errors.Standard support for all major media.With a user interface that is easy to understand, even for beginners in data feeds, it realizes an operation system that does not depend on a single person.Support is also available.Make it easier to implement Social Login.Deliver messages based on customer information and purchase history.Promote the use of LINE Login to add friends and link IDsSupporting the improvement of the user experience, starting from LINE login.Link your member ID to your LINE account.Customer InformationPurchase historyEasily register and add friends with LINE login from the EC website.You will be notified after purchase or shipment.Repeat purchases and campaign product purchasesOne tap from the talk screen to log in.Optimizing message delivery with a focus on user experienceOptimization of member registration and purchase flowCRM using the official LINE accountLinking Shopify and LINEIt makes membership registration very easy because it automatically fills in the membership registration form with personal information obtained through Social Login.By linking the member ID to the SNS account, users can easily log in with their familiar SNS account.It is possible to promote the linkage of friend additions and IDs through LINE login, as well as optimize message delivery.We will support you in improving user experience and sales based on our technical capabilities and know-how as a certified LINE Corporation Technology Partner and SMB Sales Partner.Easily implement social login and CRM policies that integrate Shopify and LINE.We also support segmented delivery based on Shopify customer information and purchase history, as well as automatic delivery of LINE notification messages after purchase completion and shipping completion.Member information linkage会員連携Display member ECサイト上にbarcodes on the EC site!会員バーコードを表示！Launch of Omni-Channel Member information linkage AppYou can add your Shopify Shopifyの会員情報をスマレジのmembership information as your 会員情報として追加できるSUMAREJImembership information.会員No. 1234会員No. 1234Sales information linkage売上連携Unify online and offline purchase status.オンライン/オフラインの購入状況を一元化Realize cross-channel analysis and CRM!チャネルを横断した分析やCRMを実現！Purchasing 購買履歴historyスマレジPOS“SUMAREJI” POSsales data売上データShopifyShopifyCentralized sales data一元化された売上データPurchasing 購買履歴historyShopifyView purchase history会員マイページ上でon Shopify member’sMy Page購買履歴を確認Shopifyの機能やUse Shopify’s features アプリを利用しand apps to analyze 顧客分析やポイント提供customers andprovide points.実店舗での購入Purchase at a physical storePurchaseECでの購入through ECTēPsCreate the toolsyou need yourself.No-Code tools specialized for ECConnect tovarious servicesFlexibility of combinationsRuns every 15 minutes.With TēPs, you can connect various systems and services via APIs and freely use them by combining their countless functions and data like a puzzle, according to what you want to achieve.be covered by existing services alone.The flexibility of this combination allows us to create tools that fill areas that cannot Repeat for each lineA wide variety of templates based on actual business operationsTēPs has been providing some functions as “Tetra” since March 2021, mainly to users of the cloud (SaaS) EC platform “Next Engine”.Currently, the system has been installed in over 100 businesses and executes over 20,000 flows daily.24SHIPPINNOSHIPPINNO processes orders automatically 24 hours a day, from order receipt to shipping requests, inventory synchronization, and sending emails to buyers.It is a service that automates data linkage related to shipping and dispatch between any mall and logistics warehouse.MallLogistics ServiceNon-stop, fully automated processing from order to shipment Reflecting incoming data Confirmation of order information Check inventory Request shipment to warehouseSending Thank You EmailPacking and shipping at warehouseSend shipment completion email Register shipping informationSynchronize inventoryMall, SystemsAmazonRakuten IchibaYahoo! ShoppingYahoo! ShoppingPayPay MallPayPay MallNext EngineShopifyLogistics ServiceFBA Multichannel ServiceLogizzard ZERO Support WarehouseLogiMoProSB LogisticsSagawa Global LogisticsOther domestic warehouses(All warehouses that provide shipping instructions via CSV)25(2) Business Revenue Structure Revenue Structure and Revenue Accounting Method for Advertising Management ServicesManagement fee20Net Sales（Net price）Anagrams , Feedmatic andEC Booster reports net sales.Accounts receivableConsideration received from advertisers100Cost to pay for advertising media80Accounts payableCompanies and対象会社・サービスservices that apply26(2) Business Revenue Structure Fee Plan of Main ServicesPSSaaSServiceDF PLUSFee structureCertain percentage of advertising valueMonthly FixedMonthly FixedMonthly FixedCertain percentage of advertising value（1,000yen/day～）Service feeThere are no initial or monthly fees.There is a 30% fee for each ad.Public Notice Delivery FeeA separate fee will be charged for data feed operation.Pricing DetailsMinimum manuscript amountMore than 1 million yen per monthThe minimum amount to be submitted is per media.1st deliveryFrom 50,000 yen/month.Initial cost starts at 100,000 yen.After the second deliveryFrom 30,000 yen/month.Initial cost starts at 40,000 yen.Social PLUSFrom 50,000 yen/month.Social PLUS + LINE login optionFrom 80,000 yen/month.27市場環境Market Environment(1) Market sizeInternet Ads MarketJapanese E-Commerce MarketNon-Internet advertising expensesEC market size19.3trillion yenEC ratio3.9 trillion yenInternet advertising expenses200,000150,000100,00050,00002.2trillion yen7.7trillion yen6.8%8.00%20.00%18.00%16.00%14.00%12.00%10.00%6.00%4.00%2.00%0.00%2010201520202010201320162019Source：DENTSU INC.「2020 Advertising Expenditures in Japan」Source：METI「Market research on E-commerce.」（February 2021）（July 2020）Internet advertising expenditures will continue to grow positively in 2020.The EC transaction market will see a large drop in 2020 in the service sector (travel, restaurants, tickets, etc.), but will expand in the product sales sector.29(2) Market EnvironmentComparison with major domestic advertising agencies and SaaS companiesGrowth rate and profit margin of domestic advertising agency business※1Growth rate and profit margin of domestic SaaS companies※2Ratio of ordinary profit to total assets※3Operating Income to Revenues Ratio● is the size of the total assets.● is the scale of revenue.In comparison with major domestic advertising agencies and SaaS companies, the company is inferior in terms of asset size and sales scale, but it has maintained high growth and high profitability.FeedforcePS※6FeedforceSaaS20%15%10%5%0%-5%-10%50%40%30%20%10%0%-10%-20%-30%-40%-30% -20% -10% 0%10% 20% 30% 40%0%10%20%30%40%50%High growth rate※4High growth rate※51 Calculated based on the most recent financial results of major companies listed in Japan that are mainly engaged in the advertising agency business.2 Calculated based on the most recent financial results of major companies listed in Japan that are mainly engaged in the SaaS business.3 IFRS results are calculated based on the ratio of pre-tax income to total assets.4 Calculated based on actual net sales.5 Calculated based on company forecast sales.6 The sales growth rate of the Feedforce PS business is calculated including the sales before the business combination in the anagram for the fiscal year ending May 2020.Translated with www.DeepL.com/Translator (free version)30(2) Market Environment Major companies that provide Data Feed servicesThere are several major companies overseas, but none of them are listed.Metric Theory(America)Shoppingfeed(America)Datafeed Watch(America)GoDataFeed(America)Productsup(Germany)31(2) Market Environment Major companies that provide social login servicesIn overseas, Auth0, a subsidiary of Okta (listed on NASDAQ), is developing a service similar to Social PLUS.Auth0(America)32競争力の源泉Source of competitiveness(1) Management resources and Competitive advantage Business segment synergiesPSWeb MarketingAds ManagementSaaSData FeedSocial LoginIntegratedgrowth supportSales Promotions（PS）Tool Provision（SaaS）Branding，Site construction and linkage（DX）Through these, we will support the growth of E-commerce and Web service providers.DXBrandingSite BuildingApps34(1) Management resources and Competitive advantage Management MembersPresident & CEOKoji TsukadaDirector,Chief Business Management OfficerKosuke KitaDirector,Chief Business Administrative OfficerShingo NishiyamaGraduated from the Faculty of Engineering, Kyoto University in 1992. After working at Yasuda Trust and Banking, he established Root Communications Inc. in 1996. In March 2006, he founded Feedforce Inc.Director,AnagramsPresident & CEOKeji AbeGraduated from Bunka Fashion College in March 2001.After graduating, she worked as a freelancer for the apparel and e-commerce businesses. Established Anagrams in April 2010 and became president (current position)Outside Director（Standing Auditor）Tameaki SatoGraduated from the Faculty of Commerce, Chuo University in 1978.After working at Deloitte Touche Tohmatsu LLC and other companies, he was appointed as an auditor in August 2017 and as a member of the audit committee in August 2018. CPA.Graduated from Tokai University in 2002.Japan System Development Co.(now NSD Corporation) and Daiwa Securities, before joining the company in September 2006.Director,New Business ManagerYoshihiro OkadaGraduated from the Faculty of Arts and Letters, Seijo University in 2001.He has worked at M.K. Soft Services, Aun Consulting, Google, and Atala LLC before being appointed to the Audit Committee in August 2018.Outside Director（Audit Committee）Katsunori UraGraduated from Hitotsubashi University, Faculty of Law in 2002.Joined Blakemore Law Office.He was appointed as an auditor in August 2017 and as a member of the Audit Committee in August 2018.Lawyer.Graduated from the Faculty of Engineering, Kyoto University in 2000.The Ministry of Construction(now MLIT) and Nikko Citigroup Securities Co.(now SMBC Nikko Securities Inc.),before joining the company in January 2017.Outside Director（Standing Auditor）Yasuo SatoAfter graduating from university, he worked for ADK Holdings Inc. , Digital Garage, Inc. , Infoseek , Google , ATARA, LLC Chairman(current position).He was appointed as a member of the Audit Committee in August 2020.35事業計画Our Business Plan(1) Growth Strategies Medium-term business development strategy for growthAccelerate the development of the DX and SaaS with a view to long-term growth.Shopify App Development ,Strengthening cooperation with other services, Branding and site constructionSocial PLUS will develop services through a business alliance with LINE CorporationDXSaaSPSAim to increase the number of cases by increasing the number of staff, mainly in Anagram.DXSaaSPSFY2021FY2022Fall from FY202337(1) Growth Strategies Direction of approach to growthGaining a solid share of the domestic Shopify marketDriving enterprise DX verticallyBusiness alliancewith LINE, etc.×Horizontal deployment to EC and retail platformsDXSaaSUtilizing the platforms of Shopify and LINE, the company aims to grow by pursuing synergies between its DX and SaaS businesses.38(1) Growth StrategiesFeedforce Group×Shopify Aiming to be the No. 1 in Japan’s Shopify MarketFRACTA’s acquisition enables full support for site building, apps, and marketingFeedforce Group has top-class playersMarketingSystemIntegration・Professionals in operational advertising・Strengths in advertising operations for E-Commerce・ Many achievements in supporting major brands e-commercePSDX・Domestic Shopify Evangelist・Many Shopify Plus site constructionApp/SaaSDX/SaaS・Domestic Shopify App installations top class・Top class of domestic Shopify Plus app installations・Many domestic Shopify category top class apps39(1) Growth Strategies Feedforce Group’s lineup of commerce servicesWe provide a number of retail and Shopify services that conform to Japanese business practices, and there is strong cooperation between them.CRM PLUS on LINEMessage CRM using LINETēPsdfplus ioEC BoosterOmni-hubEC Business Automation No Code ToolConstruction of sales channels for SNS collaborationOMO tool to link EC and storesTEIKI-KOUBAISubscription Assistance AppDOKO POILoyalty Program Support AppSHIPPINNOAutomatic shipmentFRACTAAnagrams/FeedmaticE-commerce construction, branding strategy planning and executionPlanning and execution of marketing strategies40(1) Growth Strategies We update our domestic commerce system with the Shopify ecosystem• Build a vertical value chain with Feedforce Group•Function provided by Shopify app. PDCA with excellent customer experience and measures can be turned at high speed• Supporting many local production companies as shop building channels•Create a commerce ecosystem by involving peripheral solution partnersShopify41(1) Growth Strategies Build a value chain that is customer-sizedBuild and provide a value chain that fits enterprise and SMBEnterpriseMarketingSystemIntegrationShopify Plus DealsSMBApp/SaaSconstructionpartnerDirectleadShopify Deals42(1) Growth Strategies Value Chain for Enterprise Customer EnterpriseOne-stop support from building, branding, apps to advertising operations, and sales improvement based on Shopify PlusBRANDING/PERFORMANCECertified Partner for Japan’s Leading Advertising Platform×43(1) Growth Strategies Value Chain for SMB CustomersSMBSupported by App Unity apps and the commerce ecosystem from production companies across the countryWhat is App Unity?practices• A network of Shopify apps specialized in domestic business • Network app companies and e-commerce construction support companies throughout Japan• Community hub and active information provision44(1) Growth Strategies SaaS business: Service development through business alliance with LINEFor e-commerce operatorsLINE Login PackageFor store operatorsMembership Card PackageBusiness alliance with LINE in May 2021In December 2021, the service name was “CRM PLUS on LINE” and business development started.45(1) Growth Strategies DX Business: Capital and Business Alliance and Establishment of a New CompanyMonth/YearAugust 2021Capital alliance(Business alliance in May 2021)Company nameObjectiveHuckleberry Inc.Shopify in App UnityStrengthen application development and collaborationOctober 2021 Acquired Shippinno Inc.Shippinno Inc.Expansion of SaaS for E-Commerce OperatorsNovember 2021Established a local subsidiary in Vietnam.FEEDFORCE VIETNAM COMPANY LIMITEDOffshore development, etc.December 2021Acquired Fracta Inc.Business BrandingE-commerce site construction supportFracta Inc.Capital alliance with Huckleberry Inc. in August 2021 with the aim of further strengthening cooperation with App UnityIn October 2021, Shippinno Inc. which provides an automatic shipping system for e-commerce operators “SHIPPINNO” and “TēPs”, a no-code tool specialized in e-commerce, became a consolidated subsidiaryEstablished a corporation in Vietnam for the purpose of offshore development in November 2021 and started businessIn December 2021, Fracta Inc. which has strengths in branding and construction consulting at Shopify Plus, became a consolidated subsidiary46(2) Management Index Financial IndexFY2017Non-ConsolidatedFY2018Non-ConsolidatedFY2019Non-ConsolidatedFY2020ConsolidatedFY2021ConsolidatedGrowth in Net Sales+46.2%+15.6%+24.5%+118.0%+69.5%+25.7%FY2022Q2Consolidated cumulativeSaaS growth in Net Sales rate is 20%, operating margin on net sales is 38%+1.8%△0.3%+162.6%+88.7%+26.6%+74.4%+86.3%+58.6%+26.4%+20.6%Operating margin on net sales△5.9%△4.6%6.6%27.2%34.4%36.9%PSSaaSPSSaaSROAROE－－－－32.0%34.6%28.0%35.5%40.0%45.1%△157.2%△94.6%△19.5%8.6%24.4%38.0%－－11.2%14.6%15.2%57.2%31.0%28.5%n.a.n.a.Share holders’Equity ratioD/E ratio19.7%15.7%20.7%18.3%36.6%39.5%2.1×2.6×1.6×1.1×0.7×0.6×47(2) Management Index Sales-related data: Number of use projects by serviceFY2017 FY2018 FY2019 FY2020 FY2021YoYQoQFY2022Q1FY2022Q2（Number of accounts）PS123112136225242242252+10+10Continued increase in SaaS business as a whole, although the number of use decreased in EC BoosterShopify app active account number in DX business increases significantly－458569648765115116124457934677350753+9+5+8+4△4△2－－140293648755787801833+46+32313344303294298△5+498139175185204+29+19－248811－7－238275748Social PLUS133188237272309322331+22+9－－－－3166273+270+1072634057849801,0321,2091,358+326+149※1 EC Booster free plan account not included※2 Total number of site construction projects and active accounts of DX business provision apps48AnagramsFeedmaticDF PLUSOtherSaaSEC Booster※1dfplus.ioDX※2Total(2) Management Index Sales Related Data SaaS Performance IndicatorsNumber of paid advertisingactive accounts298Annualized transaction volume※1244Millions of yen（Millions of yen）（Thousand of yen）821Thousand of yen/YearAverage transaction volume per accountMonthly Transaction volume cohort graph（Millions of yen）2017/62018/62019/62020/62021/62016/62017/62018/62019/62020/62021/62016/62017/62018/62019/62020/62021/6（accounts）100080060040020002016/6（accounts）2500200015001000500Number of free plan active accounts 1,9813002001001000800600400200Take Rate※223.6%Monthly Transaction volume20Millions of yenMonthly Net sales４Millions of yenFY2022FY2021FY2020FY2019FY2018353025201510502016/62017/62018/62019/62020/62021/62016/62018/62020/6※1 Calculated by multiplying each monthly transaction volume by 12※2 Ratio of net sales to transaction volume. Sales are calculated by deducting media advertising expenses, referral fees to partners, etc. from the transaction volume.49(2) Management Index Sales Related Data SaaS Performance IndicatorsNumber of accounts204ARR※2224Millions of yenARPA※31,098Thousand of yen/year（Thousand of yen）（Millions of yen）（ accounts ）（Millions of yen）Monthly Sales Cohort Chart250200150100502502001501005002016/6（Feeds）40003000200010002017/62018/62019/62020/62021/62016/62017/62018/62019/62020/62021/62016/62017/62018/62019/62020/62021/6（ECBooster Excluding free plan）Number of data feeds※11,589No of data feeds（EC BoosterFree Plan）No of data feedsRecurring Revenue ratio100.0%Churn rate※40.86%MRR18百万円Monthly Revenue18百万円150010005003.0%2.0%1.0%0.0%FY2022FY2021FY2020FY2019FY2018FY2017353025201510502016/62017/62018/62019/62020/62021/62016/62017/62018/62019/62020/62021/62016/62018/62020/6※1 Sum of the number of media to which data is sent to each account※2 Calculated by multiplying each monthly recurring revenue (continuous fixed revenue) by 12※3 Average ARR per account※4 The weighted average of monthly cancellation amounts for monthly recursing revenue for the last 12 months is described.50(2) Management Index Sales Related Data SaaS Performance IndicatorsNumber of accounts331ARR※2405Millions of yen（Millions of yen）ARPA※31,223Thousands of yen/year（thousands of yen）（Millions of yen）Monthly Sales Cohort Chart500400300200100（件）40030020010002016/650403020102017/62018/62019/62020/62021/62016/62017/62018/62019/62020/62021/62016/62017/62018/62019/62020/62021/6Number of registered user IDs※141millions of ID（millions of ID）Recurring revenue ratio93.6%Churn rate※40.88%MRR33Millions of yenMonthly Revenue36Millions of yenn.a.2016/62017/62018/62019/62020/62021/62016/62017/62018/62019/62020/62021/62016/62018/62020/6※1Total number of user IDs registered through the Social PLUS service※2 Calculated by multiplying each monthly recurring revenue (continuous fixed revenue) by 12※3 Average ARR per account※4 The weighted average of monthly cancellation amounts for monthly recursing revenue for the last 12 months is described.FY2022FY2021FY2020FY2019FY2018FY2017FY2016Before FY2015403530252015105150010005003.0%2.0%1.0%0.0%51(2) Management Index Sales Related Data DX Performance IndicatorsTotal（Including alliance）Total actives account※51,729（account）1,729 （account）（millions of yen）11Active account※1270件270 DXARR※211Millions of yen2021/62021/92021/122022/32021/62021/92021/122022/3Number of app installs ※31,383件（Installation）1,383 ARPA※442Thousands of yen/year（thousands of yen）806040200※1 Only the number of paid plan actives is included※2 Calculated by multiplying each monthly recurring revenue (continuous fixed revenue) by 12. In the joint venture development app, only the company’s revenue is recorded※3 Accrual after deducting uninstalls from the total number of installations※4 Average ARR per account※5 Includes free plan actives2021/62021/92021/122022/32021/62021/92021/122022/32021/62021/92021/122022/352(2) Management Index Sales Related Data DX Performance Indicators(The most recent monthly is September 2021)(The most recent monthly is September 2021)Number of accounts534Annualized transaction volume※1142Millions of yen/year（Millions of yen）Monthly volume cohort graphNumber of accounts64ARR※114Millions of yen（account）（millions of yen）2018/62020/62018/62020/602016/62021/62021/122021/62021/12（account）80060040020002016/62502001501005030025020015010050Average transaction volume per account178Thousands of yen/year（Thousands of yen）Take Rate※288.9%Monthly Transaction volume11百万円Monthly sales10百万円（Millions of yen）FY2021FY2020FY2019FY2018FY2017FY2016FY201525201510580604020015105250200150100500Recurring revenue ratio100.0%ARPA※2210thousands of yen/year（thousand of yen）Monthly Revenue1Million of yen53※1 Calculated by multiplying each monthly transaction volume by 12※2Ratio of net sales to transaction volume. Sales are calculated by deducting the payment fee to the partner from the transaction volume.※1 Calculated by multiplying each monthly recurring revenue (continuous fixed revenue) by 12※2 Average ARR per account02016/62018/62020/62016/62018/62020/62021/62021/12(2) Management Index [Cost-related data] Number of group employees (full-time employees only)FY2017 FY2018 FY2019 FY2020 FY2021YoYQoQFY2022Q1FY2022Q2（Number of employees ）64n.a.－n.a.n.a.－－－6423－2329－－－7324－2433－－－122138138158+20+2066412535－－－765224374－4805525389－982562637301911+6+4+2－+2+1+1△1+26+21+19+19+7+2n.a.12162121119△12△2Number of employeesPSAnagramFeedforceSaaSDXShippinnootherCorporate（common）※The number of group employees (full-time employees only)158※ Changed from the conventional number of executives and employees (officers and full-time employees only) to the disclosure of the number of employees (full-time employees only) (including the end of the previous fiscal year)54(3) Profit plans and assumptionsMedium-term targets for FY2026SalesMedium-term targetsOperating incomeMedium-term targets（Millions of yen）（Millions of yen）DX SaaS PS5,000By FY2026▫ sales 5 billion yen▫ operating income 2 billion yenFy2026’s SaaS and DX businesses are expected to account for about 40% of salesSpecific Growth DriversSaaS: Social PLUS(Including joint services with LINE Corporation)2,000DX:System construction and app development using Shopify889FY2026FY2021FY202655（After applying the revenue accounting standard）2,50146011,980FY2021(3) Profit plans and assumptions Revision of earnings forecasts for FY2022FY2021Actual（A）FY2022Pre-revision forecasts（B）FY2022Revised forecasts（C）Compared to the previous fiscal year(C) / (A) –100%Compared to pre-revised forecasts(C) / (B) – 100%Net Sales(FY2021 Revenue Recognition Accounting Standard Retroactively)2,5013,0472,966+18.6%△2.7%EBITDA1,0581,2661,093+3.3%△13.7%Revised earnings forecasts based on downward revisions in sales in the PS business, an increase in amortization of goodwill, etc., and the outlook for operating loss at Shippinno, which became a consolidated subsidiary.Operating income8891,092859△3.4%△21.4%Ordinary income8741,083853△2.5%△21.3%Profit attributable to owners of parentBasic earnings per share472675517+9.5%△23.3%18.88円25.98円19.95円+5.5%△23.2%56(3) Profit plans and assumptions FY2022 Factors For Changes before or After Revision of Earnings Forecast（Millions of yen）Sales forecast revision△81（Decrease in sales）Revision of operating expense forecast△151（Cost increase）DXFracta（only 4Q）DXShippinno（3Q&4Q）PSForecasts revisedSaaSForecasts revisedDXOrganicForecasts revisedotherCost reduction（From 3Q）Increase in amortizationof goodwillDXShippinnoOperating expenses（ 3Q&4Q ）FractaOperating expenses（only 4Q）Although the two consolidated subsidiaries are expected to contribute to sales, sales of -81 million yen and operating expenses (-151 million yen) were revised compared to the initial forecast.FY2022Pre-revised operating profit forecastFY2022Revised operating profit forecast57(3) Profit plans and assumptions FY2022 Revised Earnings Forecasts by SegmentFY2022 Sales forecasts Breakdown by Segment（Millions of yen）（収益認識基準遡及適用後）1,894PS2,178△9.5%1,971SaaS△5.5%782739601+198.8%2544FY2021DX85DXFY2021FY2022FY2021Pre-revisionforecastsFY2022Revised forecastsFY2022Pre-revisionforecastsFY2022Revised forecastsFY2022Pre-revisionforecastsFY2022Revised forecastsFY2022年Operating Profit forecastsProfit plans and assumptions（Millions of yen）791PS902△6.2%846SaaS+13.9%251286△56△61154FY2021FY2022Pre-revisionforecastsFY2022RevisedforecastsFY2021FY2022FY2021FY2022Pre-revisionforecastsFY2022Revised forecasts△273FY2022RevisedforecastsPre-revisionforecastsRevised down the second half outlook for the PS businessThe DX business is expected to increase sales by the two consolidated subsidiaries, but also the loss will increase due to an increase in labor costs and other development costs in the DX business.58(4) Progress Monthly progress of FY2022 earnings forecast (before revision)2Q progress to planNet sales 97.0%2Q progress to planOperating Profit 105.9%（Millions of yen）Sales forecastsSales Actual400300200100Operating profit focastsOperating profit actual（百万円）400300200100Sales remain at 97% compared to the plan, but operating income exceeds 100%.We plan to update “Our Business Plan and Growth Potential ” on a quarterly basis and disclose progress.(The next meeting is scheduled for March 2022)2021/62021/92021/122022/32021/62021/92021/122022/359(4) Progress Monthly progress by segment of FY2022 earnings forecast (before revision)PS2Q Progress to planSales97.6%SaaS2Q Progress to planSales98.1%DX2Q Progress to planSales41.8%（Millions of yen）（Millions of yen）（Millions of yen）Sales ForecastSales ActualSales ForecastSales ActualSales ForecastSales ActualWell below DX results have not reached pre-revision plan2502001501005025020015010050250200150100502021/62021/92021/122022/32021/62021/92021/122022/32021/62021/92021/122022/360リスク情報Risk Information(1) Perceived RisksBusiness Risks and external environmentBusiness Risks and internal environmentFinancial RisksRiskContentsRiskContentsConcentration on a specific mediumLong-termConcentration on specific customersShort～Long-termInformation SecurityShort～Long-termDependence on the services of a particular digital platformer.If this becomes apparent, policy changes may prevent the service from being provided as planned.In the advertising management service, the percentage of sales to specific customers is large.If this becomes apparent, the performance of the PS could be sluggish.Possibility of information leakage due to unauthorized access from outside.If this were to become apparent, the SaaS could suffer a downturn in performance due to the suspension of operations.COVID-19Short-termInternet Ads MarketShort～Long-termTechnology InnovationLong-termRegulation of LawLong-termThe domestic economy is stagnant due to the long-lasting effects of the new coronavirus infection.If it becomes apparent, the growth of existing businesses in particular may stagnate.The impact of economic fluctuations and changes in corporate advertising strategies will have a significant impact.If it becomes apparent, the performance of the PS could be sluggish.Delays in responding to new technologies will cause the services and technologies provided to become obsolete.If this becomes apparent, there will be an increase in cancellations and existing services, mainly in the SaaS business, may not be able to continue.Possibility of regulation of sales promotion methods using personal purchasing and browsing history on the Internet.If this becomes apparent, the performance of the PS could be sluggish.RiskContentsRecovery of investment in new businessesLong-termImpairment of goodwill, etc.Long-termInability to generate earnings as initially expected.If this becomes apparent, we may not be able to invest flexibly.Large amount of goodwill and customer-related assets recorded due to M&A.If it becomes apparent, the company may not be able to invest flexibly due to deteriorating financial conditions.The “major risks” that will have a significant impact on the realization of growth and execution of the business plan are shown on the left.If any of these risks were to materialize, it would have a significant impact on the realization of growth and the execution of the business plan.※ For “Major Risks” other than the above, please refer to the Annual Securities Report.62(2) Risk ManagementBusiness Risks and external environmentBusiness Risks and internal environmentFinancial RisksRiskCountermeasuresRiskCountermeasuresRiskCountermeasuresTake action even before the risk becomes apparent.COVID-19Concentration on a specific mediumStrengthen ties with Shopify, LINE, and other non-GAFA partnersRecovery of investment in new businessesInitial cost reduction by lean start-up methodInternet Ads MarketConcentration on specific customersImpairment of goodwill, etc.Straight-line depreciation over 10 years or lessContinued online interviews and remote workFocus onE-commerceDiversification of risk through increase in number of projects and diversification of client industriesDiversification of the number of projects and industriesStrengthen ability to propose to new customersLimited access rightsPeriodic vulnerability checks, etc.Technology InnovationContinuous service improvement and engineering recruitmentInformation SecurityRegulation of LawApproaches to ID marketing63Group MissionFeed a force for good and change