Ｍａｃｂｅｅ　Ｐｌａｎｅｔ（7095） – 【Delayed】Materials for Growth Opportunities and Strategies

Materials for Growth Opportunities and StrategiesMacbee Planet,inc（7095-JP）December 20211ContentsAbout the company- Company overview / historyBusiness concept – What we want to achieve- What is LTV marketing ?- Data used in LTV marketing- Positioning- Business characteristics- Business opportunities- Scale of related markets Business description- Source of competitive strength- Analytics Consulting business- Marketing Technology business34567891011121314151617Medium-term management plan- Scope of the medium-term management plan period- Transition to holistic group management181920- Medium-term management strategy- Medium-term management goals- Progress21 – 252627- Business process diagram- Unique features of our service- Results generation phases- Our Strategic Partners- Financial results by segment- Risk information- Safe harbor statement282930 – 3334353637 – 38392Changes in the business environmentOthersAbout the company33Company overview / historyCompany OverviewCompany nameMacbee Planet, Inc. (7095-JP)Establishment dateAugust 25, 2015Capital403 million yen (as of end-October 2021)Business description Provision of data-driven marketing analytics servicesHead office location3-11-11 Shibuya, Shibuya-ku, TokyoNo. of employees54 (as of end-October 2021)Aug. 2015Aug. 2015Nov. 2017Mar. 2020Mar. 2021Aug. 2021HistoryEstablished Macbee Planet, Inc.Released data analytics platform “Honeycomb”Released web customer service tool “Robee”Listed on Mothers section of the Tokyo Stock ExchangeEstablished Smash Co., Ltd.Made α, Inc. a wholly owned subsidiary4Business concept55What we want to achievePredict LTV* andachieve optimal ROI **What is Lifetime Value (LTV)?LTV refers to the profit that a user (consumer) brings to a company throughout their lifetime, and is a measure used in calculating the cost that can be spent to acquire one user.* What is Return On Investment (ROI)?A measure of how much profit can been made on an investment.6What is LTV marketing ?LTV marketing is a data-driven digital marketing strategyfor maximizing the spending and retention period of users.Analytics Consulting businessMarketing Technology businessAcquisition of new high-LTV usersAwarenessUser attractionCustomer serviceApplicationContractTrial useContinuationCancellationLTV marketingAd delivery using proprietary AI and 3D creativesImprove LTV by using Web hospitality toolsReduce cancellation with a chatbot7Data used in LTV marketingWe integrate Zero/1st/3rd party data on the Honeycomb data analysis platform, and build an original LTV prediction model.1st party data obtained onlineData obtained from customer HPSource dataAd response data1st party dataZero party data*Behavioral dataPsychological data1st party data accumulated at customersPurchase dataUser attribute dataCRM dataAudio dataSales activity dataPOS dataApp dataCreative data 3rd Party DataWeather dataGeo dataAudiencedata* Insight data (e.g. tastes and preferences) provided by users8Build LTV prediction modelWe focus on gathering and cultivating ongoing (high LTV) usersin order to secure a unique positioning to achieve high growth. PositioningTechnologyMarTechMarketing optimizationAdTechUsergathering optimizationNonTechGrowth rate-8%*1Mass media adsPure adsE-mail adsGrowth rate*4+40%～CSPlatformBItoolsDMPMarketing automationChatbotsSFAGrowth rate+14%*3Growth rate+7%*2Searchengine advertisingAffiliateadsInfluencers Onlinecustomer serviceNative advertisingDSPAd networksSNSadsVideo adsWith the development of AdTech, mass communication has evolved into communication that targets prospective users.In the future, it will be important to focus on communication designed to increase loyalty from the user gathering stage.Mass mediaProspective usersOngoing usersTarget*1 Traditional market expenditures in “2020 Advertising Expenditures in Japan” (Dentsu)*2 “Advertising and Promotion” in “MarTech Market Status and Outlook 2019”(MIC Research Institute)*3 “Movement in scale of online customer service market and forecasts” (ITR)and “DMP (Data Management Platform) & MA (Marketing Automation) Market 2020”(Yano Research Institute)*4 Macbee Planet Sales CAGR (FY04/18 to FY04/21)9Business characteristicsWe accelerate growth by increasing new customers and raising per-customer spending.Continuous business modelRaise per-customer spendingCustomers acquired in 1st yearCustomers acquired in 2nd yearCustomers secured in 3rd yearCustomers acquired in 4th yearCustomers acquired in 5th yearNo. of customers1st12nd23rd34th45th year5Upside from campaigns and other measuresIncreased results from gathering dataPer-customer spendngiStable base for generating resultsestablished in the first yearTime10Changes in the business environment1111Business opportunitiesAs costs for attracting new users rise rapidly, the emphasis on LTV will accelerate even further in various industries.Consumer lifestylesBusiness modelTechnologyPromotion of digital transformation (DX) by the governmentAct Against Unjustifiable Premiums and Misleading Representations /Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical DevicesAct on the Protection of Personal Information / Cookie RegulationTelecom evolves and smartphones proliferateTime spent online increasesOne-off sales business modelScattered dataOffline business“Fear-based sales” ads are rampantChange in consumer preferences for “using only what is needed, when it is needed”Companies pursue more robust profit structureEmergence of data platformsEvolution of telecom shifts touchpoints onlineAd regulations enhanced to protect consumersE-commerce usage rate and online touchpoints increaseBusiness model shifts to subscription / recurring typeIncreased demand for user understanding through data managementOnline sales activities increaseMore difficult to attract new usersUser understanding /ad distribution based on cookiesStricter use of cookies to protect privacyAdvertising distribution accuracy declinesWeb-based competition increases, rapidly increasing the cost of attracting new usersIncreased demand for LTV marketing12Scale of related markets The target market for LTV marketing is vast and growing.JPY6tnAdvertising expenses*2JPY2tnOnline ads*1Over JPY27tnAdvertising expenses + Sales promotion costs*3 ＋DX solutions services*4*1 Online advertising expenses were JPY2.2tn as per “2020 Advertising Expenditures in Japan” (Dentsu)*2 Total advertising expenses in Japan were JPY6.2tn as per “2020 Advertising Expenditures in Japan” (Dentsu)*3 JPY15tn as per 3Q FY03/19 business results presentation of Yahoo Japan Corporation*4 Scale of DX-related solutions service market was JPY6.3tn in 2020 as per “Survey on the Scale of Solution Services Market” by Japan Electronics and Information Technology Industries Association (JEITA) 13Business description1414Source of competitive strengthLTV marketing is achieved through data, technology, and consulting.LTV marketing componentsTechnologyConsultingAnalysisUse of data technologyData0 party data- Reasons for cancellations- VOC gathering- Loyalty as data- Behavioral data- Psychological data- Purchase data- Attribute data- Machine learning- Audio analysis- Emotion analysis- Cancellation analysis- Withdrawal prediction- LTV prediction- Cancellation prediction- Delivery algorithm0 to 3rd party data linksAIPay-for-performance basisData platformDigital communicationsUse of cancellation data- Integrate data for the same ID- Visualize user touchpoints/psychology- Hospitality- Chatbots- Popup- 3D creative- Data-driven- Use of own products- Leverage promptly using templates – Attract users who would continue to use the services- Expertise in increasing LTV- Lower churn rate by preventing cancellations- Identify issues in marketing15Analytics Consulting businessWe attract users on a pay-for-performance basis using LTV predictions built with data analytics.１LTV data analytics２Use data to attract users on a pay-for-performance basisData obtained from media and in-house tools are analyzed in order to identify the attributes of high-LTV users.Based on the data, our consultants plan and implement ways to attract new users on a fully pay-for-performance basis.Media dataBehavioral dataPurchase dataCancellationdataLTV predictionwhenwhowhatmedia/advertisingwhat toappealattracthigh-LTVusersUnit price of performance compensation ×No. of results generatedCosts: Media publishing costsGross profit margin: Approx. 15%16Marketing Technology businessImprove LTV by raising the LTV of new customers and lowering the cancellation rate of existing customers. Optimize ad delivery by using AI and 3D technology.１Convert attracted usersinto customersRobee provides customer service to attracted users and converts them into high LTV customers.２Prevent existing customersfrom churningA chatbot is used to encourage existing users considering canceling to continue, thereby reducing the churn rate and improving LTV.3AI-powered ad deliveryAd delivery using proprietary AI-powered delivery algorithms and 3D creativesWeb customerserviceChurn prevention chatbot￥Fixed monthly rate or Performance compensation￥Fixed monthly rate or Monthly fee + Performance compensation￥Depends on ad delivery volumeGross profit margin: Over 90%17Medium-term management plan1818Scope of the medium-term management plan periodAs a leading company in LTV marketing, we will establish a business foundation to achieve long-term growth.Pre-IPOInternet advertisingEstablishment of technology infrastructureOrganic growthSingle-business operationLarge earnings volatility(High dependence on specific customers)Dependence on individualsMedium-term management periodTransition to holistic group managementStructure andevolve/deepen LTV marketingAfterwardAll-round advertising + distribution measures/DX*End-to-end solutions for LTV marketingGrowth fueled by M&A and alliances, leveraging our business baseGroup-based management(Comprehensive LTV marketing company)Small earnings volatility(Diversified customer portfolio)Build systems and organizational frameworks*DX: Digital transformation19Transition to holistic group managementShift to an optimal management structure to manage from a groupwide perspective and to simultaneously evolve and cultivate LTV marketing.PastFuture (Holistic group management)Kojima(President & Representative Director)Chiba(Director)Business administrationManagement strategyM&AChiba(President & Representative Director)Kojima(Director)Business administrationManagement strategyM&ASubsidiariesSubsidiaries20Medium-term management strategyBasic policyWe will leverage our products and AI technology and evolve/deepen LTV marketing to optimize LTV and achieve outstanding growth.Product strategySales strategyCombine Macbee Planet’s knowledge with Alpha & Smash’s AI technologyAchieve outstanding growth❶ Raise LTV improvement capability even further❷ Implement AI for data analytics and consulting❸ Accelerate expansion into other industriesACMTStrengthenACStrengthenACStrengthen sales and increase personnel営業強化・人員増強(incl. through M&A)・Hire consultants who can be of immediate value to the business and improve labor productivity even further・Build a technology framework applicable to new industriesCreate a customer portfolio that is less dependent on specific clients, thereby ensuring sustainable growthAC: Analytics Consulting business MT: Marketing Technology business21Medium-term management strategy (1) Raise LTV improvement capability even furtherFurther increase LTV by promoting continued use by users who were attracted to websites and by strengthening communications with those that might cancel after continued use. Enhance links between Robee and Smash, and increase prediction capabilities while building a consistent provision structure and a recurring revenue model tied to LTV. Attract usersApplicationContractTrial useContinuationIdle timeCancellationRecoveryCustomer serviceAttract users through Analytics Consulting (AC) businessCommunications to increase customer conversion rateProvide new measures to promote continued useStrengthen communicationsProvide new communications to capture the reasons for potential cancellationsCommunications to reduce cancellation rateEnhanced links = Consistency￥￥￥￥￥Recurring revenue modelStrengthen communications22Medium-term management strategies (2) Implement AI for data analytics and consultingUse knowledge templates and AI to increase consulting accuracy and improve labor productivity.Build a platform for rapid growth by increasing staff and enabling consultants to be immediately effective.Data analysisLTV data analyticsConsultingTemplates from knowledge of high performersUse of AI to recommend measuresProduct linksGenerated resultsIncreased labor productivity23Medium-term management strategies (3) Accelerate expansion into other industries – 1Promote rollout to other fields and expand LTV marketing to various industries.Strengthen industry contact pointsStrengthen human resourcesExisting industriesVideoEducationElectricity / gasVideo gamesBeauty salonsBanksHealthcareStaffingAppsCosmetics SecuritiesInsuranceFoodE-sportsHealth foodsCryptocurrencyCall centersMedicalTelecomUse alliances with companies that have client contact points to strengthen industry contact pointsM&AHiring Foundation for immediate effectiveness24Medium-term management strategies (3) Accelerate expansion into other industries – 2 (M&A strategy)Set goals for M&As based on status of companies’ growth.Conduct studies as needed to further accelerate growth.Step 11st half of medium-term planStep 22nd half of medium-term planStep 3After Step 2Accelerate rollout to other industriesIncrease consulting team capacityUse data technology to expand new LTV fields and increase market shareProvide consistent LTV marketing* In parallel with hiringMarketing supportASPAttract usersAd techUsersPrevent cancellationsMedaiContinuation・・・Existing members25Medium-term management goalsBusiness goal for FY04/24 is JPY22bn in net sales and JPY2.2bn in operating profit.FY04/21FY04/24Net salesJPY9.8bnJPY22bnOperating profitJPY790mnJPY2.2bnOperating margin8.0%10.0%CAGR31%CAGR41%Sales growthAccelerate rollout to other industriesSecure new customers by enhancing sales and increasing staffFurther develop ability to increase LTVImprove communications with users and increase number of results generated from existing customers by improving LTVStrengthen links between Robee and Smash, and build a new recurring revenue modelIntroduce AI-based data analysis / consultingUse knowledge templates and AI to increase results from existing customersImprove operating profit ratioUse templates and AI to increase labor productivityImprove profitability by enhancing products to increase sales composition of MT business26ProgressIn FY04/22, we are progressing steadily toward achieving goals of the medium-term management plan.（millions of yen）Plan計画H1 ResultsQ2実績22,000 22,000CAGR31%12,280 12,2809,779 9,7797,3497,349 ・・・FY04/21FY04/21（Results）(Plan)FY04/22FY04/22（Plan/H1 Results）（Plan/H1Results）FY04/24FY04/24（Plan）(Plan)27Others2828Business process diagramInternet advertisingAd delivery using proprietary AI/3DUser referralNew users(consumer)User attractionAd deliveryMedaiPay-for-performanceBidInfluencersProprietary media partnersPostExisting usersAdvertising expensesWeb customer serviceHandling of cancellations and promotion of continuationAd deliveryplatformDSP*ADNW*ASP*Programmatic adSearch engineSocial mediaDSP/ADNWPay-for-performanceReferral of recurring usersClientiLandngpage pageCancellation Approval of resultsPerformance compensation (unit price × no. of results generated)Prevent cancellationApproval of resultsMonthly fee + performance compensation(unit price × no. of cancellations prevented)*DSP = Demand Side Platform, ADNW = Advertising Network, ASP = Affiliate Service Provider29Unique features of our service – 1 Understand user psychology through VOC dataOptimize marketing by directly capturing changes in the Voice of Customers (VOC)Traditional advertising technologiesMacbee Planet GroupUser psychology is inferred from cookies,so accuracy is poorThird-party cookie regulations have a significant impact1st party dataData that can be obtained in-house2nd party dataData collected by other companies3rd party dataData collected by third-party entitiesHigh value in usage, because data is accurate rather than inferredAwarenessUser attractionCustomer serviceApplicationContractTrial useContinued useChurn0 party dataInsight data (e.g., tastes, preferences) provided by users themselves・・・1. Use to gather new users (targeting)1. Use to attract new users 2. Use to improve services3. Use in retention measures30Unique features of our service – 2Use cancellation data to optimize marketingReasons for cancellation are a treasure box for ascertaining your marketing flaws.Improve LTV by optimizing marketing based on those reasons.Reasons for cancellations Optimize marketing based on reasons for cancellationI don’t use it anymoreNo benefitDidn’t suit mePoor responseLife eventCouldn’t make good use of itToo expensiveOther services seemed betterVarious reasons for cancellation1. Fell below expectations at time of application2. Dissatisfied with response and services after applicationThese are marketing issues that could be improvedAwarenessAttract usersCustomer serviceApplicationContractTrial useContinued useReasons for churnMacbee Planet GroupCompetitors- Appeal in ads to encourage continued use- Deliver ads to people likely to continue use- Communicate to encourage continued useEx. Manage expected value for benefitsCarefully explain how to useAsk about needs upon applicationProvide information specific to needs- Provide services suited to individual needs and lifestyles- Eliminate reasons for potential cancellation- With chatbots, data can be gathered and analyzed on real-time basis- Personas can be created based on data- Appeal in ads to sell- Communicate to sell- Provide uniform services- Audio data is accumulated at call centers, which makes it difficult to analyze and use them31Unique features of our service – 3 Achieve a positive cycle by using data and improving LTV1Improving LTV further allows you to spend more on user acquisition.Data1Improve LTV2Increase cost per acquisition4Increase customers’ sales/ROI3Increase number of generated resultsMacbee Planet GroupaCompetitors1234Use data to improve LTVIncrease LTV of users (consumers) by raising ability of Robee / Smash toimprove LTVIncrease cost per acquisition (CPA)Improve LTV to increase cost per actionIncrease the number of generated resultsIncrease CPA to strengthen ads, thereby increasing the number of generated resultsIncrease sales while maintaining ROIBecause LTV is high, ROI is also high even if CPA increasesDo not consider LTV after attracting usersPressured by clients to reduce CPALower CPA reduces user visitsIncreasing CPA lowers customers’ ROI32Unique features of our service – 4Hybrid of AI x consultingCombine AI with consulting to generate results that exceeds AI.Achieve higher ROI through performance-based compensation.Macbee Planet GroupSaas companiesType of serviceHybrid of AI x consultingSignificant results can be generatedthrough the expertise of consultants with detailed knowledge of products.Platform provisionResults are dependent on resources and literacy of marketing staff, so platforms are often not used effectively.Chronic shortages of digital talent.Fee structurePerformance-based compensationRange User attraction to cancellationOutstanding ROI as costs arise depending on results.Monthly fixed amountCosts arise regardless of results, so ROI depends on marketing staff.A broad range of troubleshooting measures enables comprehensive improvements.Ex. Changing quality of user attraction to improve CVRSpecified touchpointsImprovement measures are limited.33Results generation phasesThe Macbee productivity curve is the locus of our customers’ success.121210108866442200Construction phaseMake plansDevelopmentRun-up phaseEnhance mediaAcquire dataGrowth phaseAnalyze dataMaximize number of casesStability phaseOptimize LTVLaunchGrowthStability00224466881010*Average trend in sales during the first year, assuming our sales in the first month of support as 1. Estimated based on actual figures for clients whose transactions began during 2017 to 2021.1212(months)34Our Strategic Partners35Financial Results by SegmentNet Sales（millions of yen)2993.1%9,7799,479FY04/21 ResultsGross Profit（millions of yen)18.5%29596.9%Segment profits(millions of yen)10.4%12481.5%89.6%1,5971,3021,1961,072Analytics Consulting businessMarketing Technology business36Risk information-1Following is an outline of the main risks and response policies that could potentially have a serious impact on the execution of the business plan or the realization of growth for the Macbee Planet Group, as of the date on which this report was submitted. For information on other risks, please refer to “Business risks” in the Securities Report.ItemMain risksProbabilityImpactOur response policiesMarket scale and competitorsMarket scale may not grow as much as expected, or companies with abundant capital may enter the market, which intensifies competition.MediumLargeIn addition to abundant expertise, we leverage technologies to differentiate our company from others.Changes in market trends and client needsDependence on specific clientsUnable to capture market trends and client needs; delayed response results in poor profitability.SmallLargeImprove profitability through efficient management, and continued development of new products and improvements to existing products. One segment of clients is responsible for a large percentage of sales; performance of and transaction conditions for specific clients can have a significant impact on business performance.MediumLargeContinue to expand sales by acquiring new clients and differentiating services we provide from those of competitors.Continued partnerships with mediaTransactions with specified influential media account for a large segment of sales; changes in those relationships or in the policies of those media clients can have a significant impact on business results.MediumMediumContinue to build good relationships with influential media companies, while seeking out new media.37Risk information-2ItemMain risksEmergence of new advertising methodsProbabilityImpactOur response policiesNew advertising models are developed with greater impact than LTV marketing; delayed response could have an impact on performance.SmallMediumMaintain a high growth rate by evolving LTV marketing into a more cost-effective model.Protection of personal informationWhen providing Internet-related services, new laws/regulations or demands for self-regulation could limit service provision, which could have an impact on performance.LargeSmallContinue to gather information on the trend of personal information protection worldwide, and ensure strict compliance in business operations.Legal restrictionsMedium-term plansOur business is subject to Act Against Unjustifiable Premiums and Misleading Representations, Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices, medical advertising guideline, and other laws and regulations. Future amendments to these and new rules on self-restriction could have an impact on the rollout of business.We created a medium-term management plan in December 2021, but if the assumptions in this plan differ from actual conditions, or if the intended growth strategies cannot be realized (e.g., because the initially scheduled investments are not executed), then the targets laid out in the plan cannot be achieved, and this could have a significant impact on the Group’s business rollout and performance.LargeSmallReduce potential violations of laws and regulations as well as company rules by establishing a system to review advertisements and providing employees with training in compliance.SmallMediumIf prior conditions differ from actual conditions, or if growth strategies cannot be realized, we will disclose information at the appropriate time. 38Safe harbor StatementThis document contains forward-looking statements based on information available to the Company at the time it was prepared and involves risks and uncertainties. As such, these statements do not guarantee future business results or outcomes. Actual results may differ materially from the forward-looking statements in this document due to changes in the business environment or other factors.The above risks and uncertainties include, but are not limited to, factors such as economic conditions in Japan and overseas, and trends in the industries in which the Company operates.The Company shall assume no obligation to update or revise any forward-looking statements contained in this document, even if new information or events occur in the future. The information contained herein, other than about the Company, is quoted from publicly available information, and the Company does not guarantee the accuracy or appropriateness of such information.39