プロトコーポレーション（4298） – Financial Results for the Year Ended March 2022

Financial Results for the Year Ended March 2022DX promotion in the mobility fieldExpanding earnings through data x AI technologyPROTO CORPORATIONMay 13, 2022(Investor Meeting May 23, 2022)Table of ContentsTop pagePerformance Summary andChange in Segment ClassificationPage.３ … CHANGING COMPANYPage.４ … Features of PROTO CORPORATION Page.５ … Aiming for a market capitalization of 100 billion yen（March 31, 2022：43.3 billion yen）Page.７ … Year ended March 31, 2022 Executive SummaryPage.８ … Forecast for Fiscal Year Ending March 31, 2023Page.９ … Change in Segment ClassificationOverview of Platform Business and Market SharePage.１１〜２０… About Used Cars, Maintenance, and New Car fieldsFuture Growth StrategiesPage.２６ … Key Points of the New Medium-term Management PlanPage.２７〜３４ … Point① DX promotion in the mobility fieldPage.３５〜３７ … Point② Expansion of business fieldPage.３８〜４２ … Point③ Numerical management targets and shareholder returnsESG InitiativesPage.４４…Car condition information disclosure serviceOur future IR activitiesPage.４６… IR Policy and IR Activity GoalsAppendixPage.４７〜５６ …Number of unique users and various resultPage.５９ … New Segment Details2-A company that continues to change for the future-CHANGING COMPANYGaining “customer satisfaction (useful information and services),” “employee pride (company and work),” and “shareholder trust (future and achievements)” by creating a new society through change and innovationCorporate ProfileEstablishedJune 1, 1979Business DescriptionProviding mobility-related informationDX promotion in the mobility fieldHead Offices 23-14, Aoi 1-chome, Naka-ku, Nagoya 460-0006, Japan 6-18-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-0023, JapanStock Exchange ListingTokyo Stock Exchange Prime MarketNagoya Stock Exchange Premier Market(Securities Code：4298)Business Results and Indicators for the Fiscal Year Ended March 31, 2022Net salesOperating incomeROE57.4 billion yen6.4 billion yen15.4%market capitalization※43.3 billionPERPBR7.07 times1.03 timesAs of March 31, 2022PresidentK e n j i K a m i y aTo convert the data of today into the wisdom of tomorrow, and contribute to society with dreams, inspirations, and joy.Since joining the company as a new graduate in 1990, I have always taken on challenges with the mindset and determination to work to become the president.We have taken on many endeavors and evolved from the company that launched the first used car information magazine in Japan to a company centered on DX in the mobility field. This term marks our 45th anniversary.We will do our best to continue to be a company loved by shareholders and investors through our corporate philosophy “to convert the data of today into the wisdom of tomorrow, and contribute to society with dreams, inspirations, and joy.”3Features of PROTO CORPORATION ① A leading company in used car information media-Operates the famous car information media, Goo-net-Holds a market share of about 60% of used car dealers, making the company one of the best in the industry② Provides comprehensive support for DX in the mobility area-Promotion of DX in the areas of used cars, maintenance, and new cars-Expanding profit opportunities using data and AI technology③ Aiming for high growth with the new medium-term management planTarget for FY March 2025Sales of 125 billion yen, an operating income of 10 billion yen, and an ROE of 12% or higherResults for FY March 2022Sales of 57.4 billion yen, an operating income of 6.4 billion yen,and an ROE of 15.4%445YEAR OF EXPERIENCEShare Price TrendsAim to outperform both vs. the Nikkei 225 and TOPIX（April 2012 – End of March 2022）4298.TTOPIXNikkei225Our Volume（Monthly）6,000,0005,000,0004,000,0003,000,0002,000,0001,000,00002012/4 2013/4 2014/4 2015/4 2016/4 2017/4 2018/4 2019/4 2020/4 2021/4 2022/3Three-Year Targets in the New Medium-Term Management PlanAiming for a market capitalization of 100 billion yen(March 31, 2022：43.3 billion yen)5Performance Summary andChange in Segment ClassificationActual results for the fiscal year ended March 31, 2022 &forecast for the fiscal year ending March 31, 20236Year ended March 31, 2022 Executive SummaryInitial forecast for the fiscal year endedMarch 31, 2022Full-year results for the fiscal year ended March 31, 2022■ Net sales fell short of the plan due to the failure to close M&A deals that had been anticipated at the beginning of the fiscal year. [unit: million yen]N e ts a l e sOperating IncomeOrdinary IncomeN e tI n c o m eDividend per share60,000(+7.6%)6,100(+2.7%)6,080(-0.6%)5,615(+15.7%)25yen(+0.0%)57,446(+3.0%)6,422(+8.1%)6,622(+8.2%)5,880(+21.2%)35yen(+40.0%)Figures in parentheses indicate percentage change from the previous period（FY March 2021）: compared to the new revenue recognition standard.■ Operating income exceeded the initial forecast due to improved operational efficiency and productivity.■ Effect of the exclusion of PROTO MEDICAL CARE from consolidation on financial results(relative change from last year)Net sales(3,035)million yenOperating Income(232)million yen■ Increased dividend by 10 yen7Forecast for Fiscal Year Ending March 31, 2023[unit: million yen]YoYTOPICSFY March 2022（results）FY March 2023（forecast）N e ts a l e s57,44685,681+49.1%O p e r a t i n g I n c o m eO r d i n a r yI n c o m eN e tI n c o m eC a p i t a li n v e s t m e n tD e p r e c i a t i o n6,4226,6225,8801,2348776,5006,6504,4501,5901,059In addition to the growth of existing businesses, sales are expected to increase significantly due to the consolidation of COSMIC Group* (as of April 1).+1.2% Implement upfront investment while promoting sales expansion of highly profitable DX products+0.4% AUTOWAY Co., Ltd. had a foreign exchange gain of 240 million yen for the year ended March 31, 2022(24.3%) 2.14 billion yen gain on sale of shares in PROTO MEDICAL CARE for the year ended March 31, 2022+28.8% Promoting data platform construction+20.7% Due to increase in capital expendituresEPS146.34yen110.71yen(24.3%) See「Net Income」D i v i d e n d p e r s h a r e35yen35yenーDividend increased from 25 yen to 35 yen from the fiscal year ended March 31, 2022*COSMIC Group：COSMIC RYUTSUU SANGYO LTD., INC. and COSMIC GC SYSTEM LTD., INC.8Change in Segment ClassificationPrevious segmentSegmentAutomobile-relatedInformation and servicesSub-segmentAd-relatedSales of goods—Lifestyle-relatedReal EstateOther BusinessNew segmentSegmentSub-segmentPlatformCommerceMediaServicesSales of goodsTicket salesOther Business-※Group breakdown is shown on page 59By separating the mainstay automobile-related information into platform (media and services) and commerce (sales of goods), and sub-segmenting the newly added ticket sales into commerce, the current organizational structure is accurately reflected and the segment classification is changed to be clearer and easier to understand.9Segment PL FY Mar 2023 ForecastMore than 90% of operating income is generated from platform businesses[unit: million yen]FY March 2021(a)FY March 2022(ｂ)FY March 2023 plan(c)YoY(c)-(b)TOPICSP l a tf o r mNet sales26,89628,775Promote sales expansion of DX products, which are profitableOperating Income6,7607,835Operating income ratio 27.7%M ediaNet sales21,57323,032Promote sales expansion of DX products in the Mobility Business (used car field and maintenance field)Operating income ratio 27.9%S e r v i c e sNet salesStrengthen data service business in mobility business (new car field)+748+354+678+347+69+7C o m m e r c eNet sales22,34724,49251,674+27,181Operating income ratio 27.3%Services primarily intended to provide total support to business partners(90)Improvement by strengthening export alliance and internet sales, etc.S a l e s o f g o o d sNet sales22,34724,492+541 Mainly tire and wheel sales and used car exportT i c k e ts a l e sNet sales26,640+26,640Services of COSMIC Group, whose shares were acquired on April 1.6(60) Improvement through strengthening export alliances, etc.Operating IncomeOperating IncomeOperating IncomeOperating IncomeOperating IncomeOperating Income5,3605,3231,400257257ーー6,5445656,2585,7421,5766666ーー4,17843729,5238,19023,7116,6055,8121,584(24)25,034(30)4,483387(30) We plan to improve by strengthening online sales with our expertise.(50) We will strive for business and profit growth in each of our businesses.O t h e r B u s i n e s sNet sales＋304BPO business, investment business by CVC, etc.Management Division-(1,641)(1,917)(2,053)(135)Promote DX within the company and strive to improve productivityTotalNet sales55,78757,44685,681+28,234 −Operating Income5,9416,4226,500+77 −10Overview of the Platform Business11Overview of the Platform BusinessSub-segment [ Media ]Sub-segment [ Media ]Sub-segment [ Services ]U s e d c a r f i e l dM a i n t e n a n c e f i e l dN e w c a r f i e l dRepresentativeProductsRepresentativeProductsGoo-netGoo-net PitUsed Car Search(Smartphones, apps, PCs, information magazines)Maintenance Shop Search(Smartphones, apps, PCs）Sales support tools for new car dealersDatabase of used car informationDatabase ofcar maintenance-related informationDatabase of used car residual value information, etc.Building an integrated data platformAiming for business synergies by integrating business fields12Main business models in the used car fieldSeller（ Used car dealers ）Goo-net Background SystemMainly monthly charge・ Management of sales・ Management of inventory ・BtoB EC(MG Shopping) etc.・ Management of customerUsed carsinformation inputGoo-nethttps://www.goo-net.com/Used Car SearchSmartphones, apps, PCs, information magazinesFreebuyer（ Users ）13Goo-net30,00025,000Number of dealers (unit: Dealers)20,00015,000ARPA/Month10,000(unit：thousand yen）5,0000Number of dealers and ARPA/Month in the used car fieldStable growth in the number of transaction dealers due to the contribution of DX product launches14020,606 21,148 21,451 20,992 21,000 21,381 22,296 22,240 22,290 22,555 22,722 22,584 53.7 54.0 53.2 55.2 54.6 53.9 52.5 54.1 54.8 54.8 54.5 55.3Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4FY20.03FY21.03 FY22.03120100YoY+1.5%806040YoY+2.2%200Number of dealers*1ARPA/Month22,584（58.4% industry share）JPY 55.3KChurn rateMRR *22.0%(12-month average)JPY 1.24Bn(March,2022) *1:Target markets 38,651 dealers*2: Abbreviation for Monthly Recurring Revenue. This is the total amount of monthly fees for recurring clients as of the end of the applicable month.14Main business models in the maintenance fieldGoo-net Pit Background SystemMaintenance Shop （Provides car maintenance services）Mainly monthly charge・ Management of sales・ Management of inventory ・BtoB EC(MG Shopping) etc.・ Management of customerMaintenance Shopinformation inputGoo-net PitUsers （People looking for a place to maintenance their car）https://www.goo-net.com/pit/Maintenance Shop SearchSmartphones , apps and PCsFree15Goo-net PitNumber of dealers and ARPA/Month in the maintenance fieldTotal management support through DX promotion of maintenance shops4,836 4,854 4,894 4,903 4,635 5,186 5,263 5,441 3,397 3,388 3,444 3,480 3,00014.2 14.3 14.2 14.3 14.1 14.2 14.0 13.9 13.8 13.9 14.0 14.3 7,0006,0005,000Number of shops (unit: shops)4,0002,000ARPA/Month(unit：thousand yen）1,00004035201530YoY25+11.2％YoY 10+2.5％50*1Number of shops取引店舗数5,441（5.9％ industry share）ARPA/MonthJPY14.3KChurn rate1.3%(12-month average)MRR *2JPY0.07Bn(March,2022) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4FY20.03 FY21.03 FY22.03*1 :Target markets 91,530 shops*1:月額単価については、10円以下を四捨五入した数値を表示しております。*2: Abbreviation for Monthly Recurring Revenue. This is the total amount of monthly fees for recurring clients as of the end of the applicable month.16Main business models in the New car fieldA new car dealership management support tool that uses various functions to propose a reasonable time for customers who are considering changing to a new car (customers visiting a new car dealership) to change cars.Mainly monthly chargeBy tablet, etc. Business negotiations in storesNew car dealer（New Car Seller）Our unique service, which calculates the future price of a carby utilizing big data on used car prices, is our strength.New car dealer visitors（ New Car Buyers ）17Number of dealers and ARPA/Month in the New car fieldSince its release in October 2015, the number of installed dealers has steadily increased.10,000Also seek to upsell through optional services that promote DX in the industry.508,0002,0000Number of dealers (Unit: Dealers)6,0005,462 5,512 5,588 5,697 5,635 5,746 5,792 5,869 6,040 6,106 6,155 6,136 Number of dealers*1ARPA/Month18.2 18.2 19.216.6 16.66,136（42.9％industry share ）JPY 19.2K4,000ARPA/Month(unit：thousand yen）10.3 11.4 11.6 12.3 12.9 13.3 14.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4(12-month average)FY20.03 FY21.03 FY22.03Churn rate0.4%MRR *2JPY 0.11Bn(March,2022) 30YoY +4.5％20YoY+15.2％40100*1 :Target markets 14,300 dealers*2: Abbreviation for Monthly Recurring Revenue. This is the total amount of monthly fees for recurring clients as of the end of the applicable month.18Market Size and Our Share19Our market share in the used car, maintenance, and new car fieldSteadily increasing industry share by promoting DX in each fieldInternet advertising market forautomobiles and related productsMarket for data services to supportnew car dealer salesOur target field: Used cars and maintenanceOur target area: New carsMarket-wide estimate113.6 billion yenCAGR over the pastfive years: +8.2%Our Group ShareFY March 202220％（ 22.6 billion yen ）Market-wide estimate17.2 billion yenCAGR for thepast five years:-0.7%Our Group ShareFY March 202216％（ 2.8 billion yen ）(Note) Estimated by PROTO based on Dentsu’s “Advertising Expenses in Japan in 2021“(Note) Estimated by PROTO based on the number of new car dealer stores and average spending per customer20Reflecting on the Previous Medium-term Management PlanFiscal year ended March 31, 2020-March 31, 202221Reflecting on the Previous Medium-term Management Plan（target value）ROE, EPS, and operating income achieved the plan,although the average growth rate of gross profit was not achievedROE (%)EPS (yen)Gross profit(Billion yen)Operating income(Billion yen)initial plan 12.0%initial plan 100yeninitial plan CAGR +6.4%initial plan CAGR +9.4%Accomplished.Accomplished.Did not accomplish.Accomplished.15.4%11.7%78.75 yenCAGR +1.1%CAGR +12.0%146.34yen23.8 238 billion yen24.6 billion yen6.42 billion yen4.56 billion yen45.6 FY March 2019 FY March 2022FY March 2019 FY March 2022FY March 2019 FY March 2022FY March 2019 FY March 2022*The initial plan (planned figures for the fiscal year ended March 31, 2022) is the figure announced on May 14, 2019.*A 2-for-1 stock split of common stock was conducted on July 1, 2019.22Reflecting on the Previous Medium-term Management Plan・ In the new car field, the unit price per customer has increased significantly due to the release of optional services that contribute tothe management support of new car dealers.・ We have released many services in the AI field and succeeded in securing high-level AI human resources. We are also promoting in-houseeducation.・Although there were some M&A transactions conducted after the fiscal year ended March 2010 that resulted in impairment losses due to a lack of PMI and an accurate understanding of the corporate value of the target companies, the Company was able to improve profitability by exiting unprofitable businesses and changing its business model. itemresultsEvaluationRemaining issues1New car field：To make it a pillar of profit generationWe made progress in improving average spending per customer by developing and offering optional products.Further growth in the number of bases using our services and average spending per customer through allocating management resources.2 Used car field：To improve profitabilityWe have achieved some results in reorganizing sales bases and reducing paper media costs.Re-growth by promoting product and service development.3Maintenance field：① To expand the business foundation of the advertising business② To develop a reservation service4 To invest in the AI field5 To invest in new businessesAlthough the number of paid contracts for maintenance shops in the advertising business has expanded, the usage of reservation services was limited.Promotion of product and service development.Realization of group synergies for maintenance shops.Started providing AI products such as MOTOR GATE AIPromotion of the development of AI products.Promotion of investment and alliance via CVC.Creation of new businesses, including M&A.23◯◯◯◯△Reflecting on the Previous Medium-term Management Plan （ Business Portfolio ）Improved profitability by withdrawing from unprofitable businesses and changing business modelsFY March 2019ROICField examiningthe regrowthField forinvestmentFY March 2022ROIC70%PROTO MEDICAL CAREPROTOAUTOWAYCAR CREDO70%50%30%10%-10%-10%-30%-70%PROTO RIOSGOONET EXCHANGEPROTO TAIWANPROTO MALAYSIABIKE BROS-50%PROTOCAR CREDOPROTOSOLUSIONGOONET EXCHANGEAUTOWAYPROTO RIOS50%30%10%-10%-10%-30%-50%-70%-70%-50%-30%10%30%50%70%-70%-50%-30%10%30%50%70%Sales GrowthRateTIRE WORLD KAN BESTPROTO VENTURESTIRE WORLD KAN BESTPROTOSOLUSIONField for earningstructure reformPromising fieldROIC︓NOPAT (After-tax operating income)/Invested capital (net assets + interest-bearing liabilities）The size of a circle represents operating income/loss (blue: operating income, red: operating loss)24Future Growth StrategiesNew Medium-Term Three-Year Plan（ Fiscal year ending March 31, 2023-March 31, 2025 ）25Key Points of the New Medium-term Management PlanKey point ① of the medium-term management planサブセグメント[ メディア ]① Construction of a data platformin the mobility field, including M&Aサブセグメント[ サービス ]D X p r o m o t i o ni n t h e m o b i l i t y f i e l d② Development of new products and services that make full use of data and AI technologyAiming to hold the largest market share for C and B③ Increase of our market share in used cars, maintenance, and new carsKey point ② of the medium-term management planE x p a n s i o n o fb u s i n e s s f i e l dKey point ③of the medium-term management planN u m e r i c a l m a n a g e m e n t 中期経営計画のポイント②t a r g e t s a n d s h a r e h o l d e r r e t u r n s① Future M&A strategy② Expansion into new business fields by utilizing M&A① To envision the growth of sales and operating income② Financial strategy and cash flow allocation26Key point ① of the medium-term management planDX promotion in the mobility field27DX promotion in the mobility field① Construction of a data platform in the mobility field, including M&ACCustomerUsers (buyers)Collect data on users’ purchasing behavior and desired information through all Internet routesGoo-netGoo BikeGoo-net PitGoo-net New CarNew ServiceNew services and mediaNBBusinessBusiness partners (sellers)Collect information of business partners in the used car, maintenance, and new car fields through all Internet routesUsed car field related big data（MOTOR GATE PIT IN）Maintenance field related big dataNew car field related big dataNNew businessesCreating a data platform for new businessesIntegrated data platformPROTODATAPLATFORMHuge amounts of data arethe source of our business.Integrate data acquired from users and business partners into a “data platform”28DX promotion in the mobility field②Development of new products and services that make full use of data and AI technologyD a t aA I t e c h n o l o g yStrengths of AI developmentApproximately 70 AI developments per yearIn-house AI developmentNew functionsand servicesPromotion of DX for customers such as used car dealersImprovement of contract rateDX promotion of our sales staffHigh-level AI human resourcesProductivity improvementTo develop products and services with our original data and AI that are challenging for other companies to realize.Improved usability of Goo-netIncreased number of UUsExample of data owned by our companyUsed car price market dataActual data of retail and AA distributionUsed car purchase user dataGender, age, search history, browsing history, etc.Car master dataSince 1989, the construction coverage rate of the domestic and imported cars has been 87% (182 brands, 2,986 models, about 270,000 codes)Since the condition of each used car is different, past data are very important.The huge amount of big data we have cultivated since our founding are our great strength.We will continue to promote service development that contributes to DX in the mobility field29DX promotion in the mobility field② Development of new products and services that make full use of data and AI technologyAiming to achieve the new medium-term three-year plan by utilizingdata and AI technology, which are our absolute strengthsExamples of services released so farUsed car fieldMaintenance fieldNew car fieldData × Image recognition technology Data × language processing technology Data × Statistical analysis technologyMOTOR GATE AIAI ChatbotDataLine AI AssessmentBased on the used car photos, AI automatically generates used car information posted on Goo-net and the car model description that contribute to the improvement of access.It reduces the data registration time for used car dealers by about 50%.(Compared to the conventional method)The AI staff LinKa inquires about the user’s desired service via chat and guide them to the store visit date and time reservation.It provides optimal information on maintenance work that is technical and difficult for users to understand and contributes to improving the work efficiency of maintenance shops by using AI for reception work.A service that can instantly and automatically calculate the assessed price of the relevant car by combining big data and AI that have been built through the operation of automobile-related services over many years.We will continue to promote service development that contributes to DX in the mobility field.30DX promotion in the mobility field② Development of new products and services that make full use of data and AI technologyUUs on Goo-net (12-month average)30 million UUStrengthen development of content and services by utilizing the vast amount of data and AI technology accumulated since the company’s founding35,000,00030,000,00025,000,00020,000,00015,000,00010,000,0005,000,0000FY20.03FY21.03FY22.03FY25.03（plan）Increased number of dealerstransacting business（See page 33.）Achieve a significant increase inthe number of unique users31DX promotion in the mobility field③ Increase of our market share in used cars, maintenance, and new carsUsed car fieldMaintenance fieldNew car fieldAI Recommendation SpaceMOTOR GATE PIT INA service that displays multiple imagesrecommended by AI in the search result of Goo-net.A service that allows maintenance shopsto manage reservations from multiplewebsites in a unified manner.*Published in the Nikkei Sangyo Shimbun on April 12, 2022DLSG car replacement Proposal MovieA service that predicts the value of the car currently owned by the user in the coming three years as a reference price, automatically simulates its replacement with another car, and makes proposals comparing costs via a video.Reference videoPromote DX in the used car field by supporting comparisons and conversionsfor users considering purchasing used cars.In the future, we will strengthen cooperation with the services provided by the PROTO Group(quotations, assessment, purchase, sales, parts ordering, etc.) to promote DX in the maintenance field.Promote DX in the new car field by replacing the guidance that was previously done with DMs and postcards with videos.32DX promotion in the mobility field③ Increase of our market share in used cars, maintenance, and new carsU s e d c a r f i e l dM a i n t e n a n c e f i e l dN e w c a r f i e l d・MOTOR GATE Used car ・Goo-net・MOTOR GATE Maintenance・Goo-net Pit・DataLine SalesGuide・New Car Negotiation Tools FY March 202222,584dealersFY March 20225,441shopsFY March 20226,136dealersFY March 2025plan24,000dealersFY March 2025plan8,000shopsFY March 2025plan8,000dealersUP 6％UP 47％UP 30％Build a mobility-related information platform by “increasing market share in each field “33DX promotion in the mobility fieldOur share in the used car, maintenance, and new car fieldsfor the fiscal year ending March 31, 2025Promote DX in the mobility area to increase our market share in the industry Internet advertising market forautomobiles and related productsRetail market of software for supportingthe marketing of new car dealersOur target field: Used cars and maintenanceOur target fields: New carsMarket-wide estimate113.6 billion yenCAGR over the pastfive years: +8.2%FY March 202533％（37.4billion yen）Our group’s shareFY March 202220％（22.6 billion yen）Market-wide estimate17.2billion yenCAGR for thepast five years:-0.7%FY March 202537％（6.3billion yen ）Our Group ShareFY March 202216％（2.8 billion yen ）(Note) Estimated by PROTO based on Dentsu’s “Advertising Expenses in Japan in 2021″(Note) Estimated by PROTO based on the number of new car dealer stores and average spending per customer34Key point ② of the medium-term management planExpansion of business field35Expansion of business fields① Future M&A StrategyM&A target fields① Business fields to enhance the foundation of existing businesses② New business fields utilizing the assets of existing businesses③ Business fields utilizing our cutting-edge technology and know-howPromoting M&A targeting the leading companies in the industryWe conducted M&A targeting “②New business fields utilizing the assets of existing businesses” on April 1, 2022.From a mid/long-term perspective, we will continue to consider projects that can achieve high performance in terms of management to achieve growth as a group.36Expansion of business fields② Expansion into new business fields by utilizing M&AWe acquired shares ofCOSMIC RYUTSUU SANGYO LTD., INC. and COSMIC GC SYSTEM LTD., INC.which are the leading companies in the cash ticket shop industryFuture development ① Evolution of COSMIC’s business modelHandles shops specializing in sales of gift certificates and product certificatesCurrently, ticket sales at stores are the norm.We aim to improve profit margin and expand sales channelsby strengthening online sales by utilizing our digitalization know-how.Future development ② Creating synergies with mobility-related business fieldsWe will expand the services of COSMIC to our usersand business partners and offer new value.37Key point ③of the medium-termmanagement planNumerical management targets and shareholder returns38Growth image of net sales and operating incomeNet sales Operating incomePlatform CommerceOther BusinessPlatformCommerceOther Business（unit：million yen ）125billion yen5,794 93.5billion yen5,19885.6billion yen4,48362,484 6.4billion yen43766 物 品 販 売6.5billion yen387 6.9billion yen395 374 10billion yen491 495 11,022 57.4billion yen4,17824,49251,67455,60228,77529,52332,70756,721 FY March 2022FY March 2023FY March 2024FY March 2025（Result ）(Plan)(Plan)(Plan)7,8358,190 8,227 メ デ ィ ア▲ 24FY March 2022FY March 2023FY March 2024FY March 2025（Result ）(Management Division(Plan)(Management Division(Plan)（Management Division(Plan)（ Management Division-1,917)-2,053)-2,014）- 2,009）・Construction of a data platform in the mobility field, including M&A・Development of new products and ・Increase of our market share in used cars, maintenance, and new carsservices that make full use of data and AI technology39Financial StrategyThe Group promotes management that is conscious of the cost of capital, and aims tocontinuously Generate returns that exceed the cost of capital.To achieve this goal, we will strive for business growth based on a balance between promoting investment in growth, ensuring financial soundness, and strengthening returns to our stakeholders.Financial PolicySustainable enhancement ofcorporate valueRealization of ROE of 12% or more (excluding extraordinary gains and losses)Promoting investment in growth Promote ROIC-conscious growth and business investmentEnsuring financial soundnessCash and deposits of approximately 3 months of monthly salesCapital adequacy ratio of 50% or moreStrengthening returns to our stakeholdersStrengthen returns to customers, employees, and shareholders40Policy for profit sharing with shareholdersWe will make efforts to return profits to shareholders while comprehensively considering continuous, stable dividends, the enrichment of internal reserve for the future growth, etc.We will use the internal reserve effectively by investing in existing and new businesses, for further fortifying the management foundation and expanding the business scale. Cash Dividends per ShareFY March 2021ResultsFY March 2022ResultsFY March 2023Forecast2nd QuarterYear-EndAnnualConsolidated dividendpayout ratio12.5 yen12.5 yen25 yen20.7%17.5 yen17.5 yen35 yen23.9%17.5 yen17.5 yen35 yen31.6%41Cash flow allocation for the period ending March 31, 2023 – March 31, 2025 (3 years)Promote M&A and growth investments for business growthINOUTOperating Cash FlowApprox. 20 billion yenAppropriation of cash and cash equivalents carried forward(Net cash)Approx. 23 billion yenAs of March 31, 2022Shareholder returnApprox. 4 billion yenM&A InvestmentCVC InvestmentCapital InvestmentBusiness InvestmentPersonnel investmentApprox. 14 billion yenCash and deposits (working capital)Approx. 25 billion yen42ESG Initiatives43ESG ActivitiesEnvironmentGovernance・Formulation of the Basic Sustainability Policy (December 2021)・Invested in a venture company engaged in renewable energy business through PROTO Ventures 2 Investment Limited Partnership.・A voluntary Nominating and Compensation Committee was established.（The majority of the members are outside directors. The committee is also chaired by an outside director. ）・Summary of the results of the evaluation of the effectivenessof the Board of Directors disclosed on the corporate website.Social■ Car condition information disclosure serviceIn order to pursue the high transparency and reliability of the quality of information, we conduct the “ID cars (Goo-inspection + Used Cars Certified by Makers)” service for the disclosure of car condition information and provide inspection information.This information allows users to purchase used cars with peace of mind, as theycan check the condition of the exterior, interior, engine, restoration history, etc. through the online “Vehicle Condition Appraisal Report,” which in turn contributes to the high purchase rate in Goo-net.With car condition rating（Goo-inspection+Manufacturer Certified Pre-Owned cars）202,449 unitsGoo-netNumber of used cars listed508,640 units※reference Number of car condition disclosures in competitive media 63,047units (As of May 7, 2022)44Our future IR activities45IR Policy and IR Activity GoalsOur company was listed on the JASDAQ market in 2001, and after the listing on the First Section of the Tokyo Stock Exchange in 2019, it moved to the Prime Market of TSE on April 4, 2022. We would like to express our sincere gratitude to all our shareholders, customers, business partners, and many others for their support.However, we cannot say that we are fully recognized in the stock market, and we acknowledge that we have not been able to convey our situation and strengths to everyone widely. Therefore, to improve corporate value, we have set the IR Policy and IR Activity Goals to carry out more proactive and earnest IR activities.IR Policy IR Activity Goals○ As a public company listed on the Prime Market, we willalways send clear corporate messages to stay accountable.Based on our IR Policy, our company will build long-term trusting relationships with shareholders and investors to maximize corporate value.1. Financial results briefings for analysts and institutional investors will be held ○ We will strive to promote understanding of our companyfour times a year.by disclosing our business content and corporate story in an easy-to-understand manner as much as possible.○ We will work on building unwavering trust with the market and shareholders and investors by emphasizing dialogue.○ We will always develop IR with new ideas.2. We will respond to all requests for individual interviews with analysts and institutional investors. During the interviews, Kenji Kamiya, President orTaketo Suzuki, the executive officer in charge of IR, will respond.3. We will endeavor to increase the understanding of the corporate value and business strategy of PROTO CORPORATION, aim to provide clear IR tools, and work to improve the IR materials used at the briefing sessions and the website. In particular, we will focus on expanding our website for ESG information disclosure.46Appendix（Results・KPI）種KPI）47Number of unique usersUUs on Goo-net and Goo-net Pit remain steadyGoo-net UU/3-month averageGoo-net Pit UU/3-month average16,000,00014,000,00012,000,00010,000,0008,000,0006,000,0004,000,0002,000,00008,000,0007,000,0006,000,0005,000,0004,000,0003,000,0002,000,0001,000,000048New Car field Optional Service Number of Installed dealersEstablish an absolute position in the new car field by promoting the development ofDX products and expanding the number of dealers where they are introduced.FY March 2021(Results)Increase/DecreaseFY March 2022(Results)DLSG car replacementProposal Movie87 AI Chatbot712 DLSG car replacementproposal1,410 DataLine Finder280 818 DataLine AI AssessmentDataLine SalesGuide(220)+362+149+325DLSG car replacement Proposal MovieAI Chatbot412492 DLSG carreplacementproposal1,772 DataLine Finder429 +806DataLine AI Assessment1,624 5,869 14,300+267DataLine SalesGuide6,13614,30004,0008,000 12,000 16,000Number of dealersNumber of Markets04,0008,00012,00016,000Number of dealersNumber of Markets49FY March 2022 Consolidated Balance Sheet[unit: million yen]As of March 31, 2021As of March 31, 2022increase and decreaseResults(a)RatioResults(b)Ratio(b)-(a)%Current AssetsNon-Current AssetsCurrent LiabilitiesNet AssetsTotal Assets31,623 64.0%37,63569.0％17,764 36.0%16,89031.0％12,126 24.6%13,03523.9％35,934 72.8%40,39774.1％49,388 100.0%54,525100.0％6,011119.0％(874)95.1％909107.5％(234)82.3％4,462112.4％5,137110.4％Non-Current Liabilities1,327 2.7%1,0932.0％[unit: million yen]As of March 31, 2021As of March 31, 2022increase and decreaseResults(a)RatioResults(b)Ratio(b)-(a)%Cash and cash equivalents21,70543.9％26,15948.0％Interest-bearing debt3,3606.8％3,2576.0％Net cash18,34537.1％22,90242.0％4,454120.5％(103)96.9％4,557124.8％50FY March 2022 Consolidated Statements of Cash Flows[unit: million yen]FY March 2021FY March 2022Results(a)Results(b)increase and decrease(b)-(a)Cash Flows from Operating ActivitiesCash Flows from Investing ActivitiesCash Flows from Financing ActivitiesCash and Cash Equivalents at End of Term [unit: million yen]Investment Amount(Tangible/intangible fixed assets*)Depreciation(Tangible/intangible fixed assets)Amortization of Goodwill6,574(898)(1,530)21,4857608984224,5331,458(1,547)25,9391,234877360FY March 2021FY March 2022Results(a)Results(b)increase and decrease(b)-(a)(2,041)2,356(17)4,454474(21)(61)51Consolidated Earnings (quarterly transition)[unit: million yen]FY2020March,Q1FY2020March,Q2FY2020March,Q3FY2020March,Q4FY2021March,Q1FY2021March,Q2FY2021March,Q3FY2021March,Q4FY2022March,Q1 *1FY2022March,Q2*1FY2022March,Q3*1FY2022March,Q4*114,69815,14715,13414,14713,51813,93717,31515,32513,66112,64616,38414,753[unit: million yen]FY2020March,Q1FY2020March,Q2FY2020March,Q3FY2020March,Q4FY2021March,Q1FY2021March,Q2FY2021March,Q3FY2021March,Q4FY2022March,Q1 *1FY2022March,Q2*1FY2022March,Q3*1FY2022March,Q4*1Net SalesGross ProfitEBITDA Operating IncomeOrdinary IncomeNet Income5,9511,7601,4481,4361,0356,1721,6021,2711,3412,1426,2821,9621,6221,8061,3906,0001,1307947694215,9621,8291,5021,5541,0175,9781,6671,3351,273774SG&A ExpensesEmployment CostAdvertising CostOther Expenses4,5021,9179451,6384,9011,9221,2051,7734,6601,9389891,7325,2051,9421,4621,8004,4591,9029641,5934,6421,8721,1391,630*1 New Revenue Recognition Standard6,8592,4182,0882,0451,4374,7711,8671,1841,7196,3911,3471,0141,2451,6245,3761,8831,7821,7106,2332,0961,7801,8652,2814,4521,7979891,6655,7521,6061,3041,3651,3414,4481,6471,4211,3796,6032,3662,0572,0641,4264,5451,6821,2061,6566,0371,5911,2801,3278304,7571,7221,5351,50052Consolidated Earnings by Former Segment (quarterly transition)FY2020March,Q1FY2020March,Q2FY2020March,Q3FY2020March,Q4FY2021March,Q1FY2021March,Q2FY2021March,Q3FY2021March,Q4FY2022March,Q1 *1FY2022March,Q2*1FY2022March,Q3*1FY2022March,Q4*113,21913,67013,49512,48311,93512,34415,73613,66312,35111,93215,32813,5465,1611,2596,7981,044463885,3871,4156,8671,057433755,3661,4526,6761,022355815,5691,4285,4851,044355835,1631,2535,518981375645,3611,3225,660978395755,4861,3468,903954405845,7941,3716,4971,001406205,5431,3935,413667366065,6951,4624,77460366165,6861,4628,17963385,7491,5726,22565369541,10414,69815,14715,13414,14713,51813,93717,31515,32513,66112,64616,38414,753FY2020March,Q1FY2020March,Q2FY2020March,Q3FY2020March,Q4FY2021March,Q1FY2021March,Q2FY2021March,Q3FY2021March,Q4FY2022March,Q1*1FY2022March,Q2*1FY2022March,Q3*1FY2022March,Q4*11,7931,6421,9811,1641,7861,6052,3401,3042,2101,6262,4071,658514714434217323528429(1)8133228031376038505137195536593353953374(457)(474)(456)(420)(420)(418)(402)(399)(581)(401)(463)(403)1,4481,2711,6227941,5021,3352,0881,0141,7801,3042,0571,280(4)35(5)53*1 New Revenue Recognition StandardNet Sales[unit: million yen]Automobile-relatedAd-relatedInformation and servicesSales of goodsLifestyle-relatedReal EstateOther BusinessTotalOperating Income[unit: million yen]Automobile-relatedLifestyle-relatedReal EstateOther BusinessManagement DivisionTotalOperating Results 10-year Summary[unit: million yen]FY2013MarchFY2014MarchFY2015MarchFY2016MarchFY2017MarchFY2018MarchFY2019MarchFY2020MarchFY2021MarchFY2022March*1Net SalesOperating IncomeNet IncomeEBITDA*1Adjusted Net Income*2DepreciationAmortization of Goodwill38,28754,76148,60254,29756,717 62,111 62,251 59,127 60,09757,4464,2092,2905,1612,8364045464,7352,6276,4833,5558199284,2332,3816,0393,3088799264,071(390)6,1496411,0461,0322,795 1,506 4,5472,145 3,674 519 5,396 1,151 1,113 1,089 638 632 4,565 3,159 5,920 3,596 916 437 5,136 4,991 6,455 5,420 890429 5,9414,8537,2625,2758984226,4225,8807,6606,240877360*1 New Revenue Recognition Standard*2 EBITDA was calculated with the equation: operating income + depreciation + amortization of goodwill*3 Adjusted Net Income was calculated with the equation: net income + amortization of goodwill54Operating Results 10-year Summary by Former SegmentSales[unit: million yen]FY2013MarchFY2014MarchFY2015MarchFY2016MarchFY2017MarchFY2018MarchFY2019MarchFY2020MarchFY2021MarchFY2022March*1Automobile-related33,68750,13844,05649,48651,02556,10056,16752,87053,67953,159Ad-related21,16321,41221,59321,00621,23121,61821,27821,48521,80622,675Information and services4,4644,5465,0874,8935,0535,0415,5575,2925,890Sales of goodsLifestyle-relatedReal EstateOther BusinessTotal24,26217,91523,39224,89929,42929,84725,82726,57924,5933,5413,3934,236 4,370 4,335 4,168 167913164988187 213 195 160 1,268 1,426 1,553 1,928 3,4661621,1823,9141572,3458561473,28238,28754,76148,60254,29756,717 62,111 62,251 59,127 60,09757,4463,7498,7743,837163597Operating Income[unit: million yen]FY2013MarchFY2014MarchFY2015MarchFY2016MarchFY2017MarchFY2018MarchFY2019MarchFY2020MarchFY2021MarchFY2022March*1Automobile-related5,9166,2175,6245,277 3,939 4,933 5,7586,5827,0367,903Lifestyle-relatedReal EstateOther Business1318524869(323)(140)33896(94)307 109 (66) 478 147 (136) 370 170 (71) 249 193 57 169 135 58 27314013060140168Management Division(1,599)(1,659)(1,732)(1,554) (1,633) (1,728) (1,693) (1,809) (1,639)(1,850)Total4,2094,7354,2334,071 2,795 3,674 4,565 5,136 5,9416,422*1 New Revenue Recognition Standard55Transition of Net Sales and Operating IncomeNationwide expansion of GooSeries development of GooIT shift in servicesAggressive M&Aの積極展開development of M&As事業ポートフォリオのSelection and concentration of business portfolio選択・集中Promote data platform constructionNet Sales (billion yen)140120100806040Net 売上高Sales Operating 営業利益IncomeOctober 2015Started offering DataLine SalesGuideDecember 2013Opened Goo-net Pit.June 2007Started offering Goo-inspection in the Tokyo metropolitan area.October 1996Goo-net was startedAugust 2001First issue of Goo BikeMarch 2002First issue of Goo partsOctober 1995The first issue of the metropolitan edition of Goo20December 1992The first issue of the Kansai edition of Goo13OperatingIncome(billion yen)11975310Mar.1980Mar.1990Mar.2000Mar.2010-1Mar.2022 Mar.2025（Plan）*1 New Revenue Recognition Standard56Appendix（Other）種KPI）57Company ProfileCorporate Name PROTO CORPORATION Founded Established October 1, 1977 June 1, 1979Common Stock 1,849 million yen (As of March 31, 2022) Shares Outstanding 41,925,300 shares (As of March 31, 2022)Head Offices 1-23-14 Aoi, Naka-ku, Nagoya-shi, Aichi 460-0006 Japan6-18-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-0023 JapanKumamoto(35 Sales Outlets Nationwide)Fiscal Year-endMarch 31Number of EmployeesConsolidated: 1,302 (As of March 31, 2022)Parent: 534 (As of March 31, 2022) Stock ExchangeTokyo Stock Exchange Prime Market, Nagoya Stock Exchange Premier MarketListing Subsidiary1. AUTOWAY Co., Ltd. 2. TIRE WORLD KAN BEST CO., LTD. Branch Offices Sapporo, Sendai, Takaskaisaaki, Nagano, Hamamatsu, Nagoya, Kanazawa, Osaka, Hiroshima, Matsuyama, Fukuoka,3. GOONET EXCHANGE 4. PROTO-RIOS INC. 5. CAR CREDO Co., Ltd. 6. CAR BRICKS Co., Ltd. 7. PROTO SOLUTION Co., Ltd. 8. OKINAWA CALL STAFF SERVICE Co., LTD 9. Associe Co., Ltd 10. Onion Inc. 11. PROTO Ventures 12. PROTO Ventures 2 Investment Limited Partnership13. COSMIC RYUTSUU SANGYO LTD., INC. 14. COSMIC GC SYSTEM LTD., INC.15. CAR CREDO (Thailand) Co., Ltd. 16. UB Datatech, Inc. （Affiliates accounted for by the equity method）（As of May 13, 2022）58Change in Segment ClassificationSegmentSub-segmentMediaPlatformBreakdown by Major Group CompaniesDetailsPROTO CORPORATION（Media：Used cars, Maintenance,Bike）PROTO SOLUTION （Media）CAR CREDO（Appraisal Business）GOONET EXCHANGE（Alliance）ServicesPROTO CORPORATION（New car）PROTO-RIOS（Software sales）CommerceOther Business–AUTOWAY （Tire and wheel sales）TIRE WORLD KAN BEST（Tire and wheel sales）GOONET EXCHANGE（Used car export）PROTO CORPORATION（Sale of goods）PROTO SOLUTION（Sale of goods）COSMIC RYUTSUU SANGYO LTD., INC. ・ COSMIC GC SYSTEM LTD., INC. （Ticket sales）PROTO CORPORATION（Agriculture, Real Estate, Others）PROTO SOLUTION （BPO）PROTO Ventures・PROTO Ventures 2 Investment Limited Partnership（Investment）AUTOWAY （Solar power generation）59Commerce Business Model (Tire Sales)Handles imported tire salesDealers and maintenance shopsTire purchaseHandles sales of domestic tiresTire salesGeneral car usersOverseas tire manufacturersDomestic tire manufacturersTIRE WORLD KAN BEST The Group’s main reasons for engaging in tire sales・ Tires are important products of used car dealers and maintenance shops that mainly useGoo-net and Goo-net Pit, and by providing them, we contribute to comprehensivemanagement support.・ Creation of contact points with consumers (general car users) that are indispensable forachieving our goal of constructing the No. 1 platform in the mobility industry.60Commerce Business Model (Used Car Exports)Domestic used car dealersUsed car exportersHandles used car export salesCar purchaseUsed car auction venuesCar salesOverseas car usersThe Group’s main reasons for exporting used cars・ Plays a role in comprehensive management support by contributing to the improvement of theinventory turnover rate of domestic used car dealers using Goo-net.・ Contributes to the promotion of diversification of sales destinations domestically andoverseas to achieve our goal of constructing the No. 1 platform in the mobility industry.61Future OutlookThe IR information in this document includes a future outlook. Such information other than the past events may be influenced by the risk and uncertainty due to the competition, market, and systems in the field of our company’s business. As a result, the outlook based on the assumption and estimation with available information may be different from actual results and performance in the future. We would appreciate your understanding. For InquiriesPROTO CORPORATIONIR staff: Mori,Tel ：+81-52-934-1514Mail: 4298ir@proto-g.co.jp