スパイダープラス（4192） – FY2022.Q1 Financial Results Presentation Materials

Spider Plus & Co. (Securities code: 4192)FY2022.Q1 Results briefing materialsMay 13, 2022© 2022 SpiderPlus & Co.1DX in construction industryDX (Digital Transformation) is the adoption of digital technology to transform services or businesses, through replacing non-digital or manual processes with digital processes or replacing older digital technology with newer digital technology. ConstructionTechnology© 2022 SpiderPlus & Co.2Developing and selling construction management SaaS “SPIDERPLUS”DrawingPhotoInspection recordsReportConstruction companiesGeneral contructorsSubcontructorsSpeciality contructorsConstruction siteSubscription© 2022 SpiderPlus & Co.3Our identity&Co = togetherIn the 20 years since its foundation as a thermal insulation company, I have been in the construction industry and have been facing the issues facing the industry.We will work together, become colleagues, and change the industry with technology through products that take the same perspective as our customers, come together, respect aspirations, and mix mutual opinions.© 2022 SpiderPlus & Co.4DX partners in the construction industryIntroduction rate of major companiesin the industry of Japan*1SPIDERPLUS expansion modelPotential of existing customersFoundation for effective networkingSPIDERPLUS penetration is still in its infancyExamples of Increase in the Number of IDs of the 3 Major Customer CompaniesGeneral contractorOver 77%Air-conditioning sanitary workOver 80%Electrical workOver 87%3,000 IDs2,000 IDs1,000 IDsFor 62% of the adopting companiesWithin 2 yearsof introduction*1: Calculated by counting billing customers as of the end of Mar. 2022 from TOP 30 of sales in the general contracting, electrical construction, and air-conditioning and hygiene construction industries extracted from SPEEDA.© 2022 SpiderPlus & Co.5First month of introduction12 months24 months36 months48 months60 monthsBusiness Highlights1.Business Highlights2.Financial Information3.Reference: Growth Strategy4.Reference: About SPIDERPLUS© 2022 SpiderPlus & Co.6Net sales568 millions of yenYoY Growth +30%KPI＊1ARR2,255 millions of yenYoY Growth +29%Company1,258 companiesYoY Growth +42%IDARPUChurn rate49,843 IDsYoY Growth +23%3,771 yenYoY Growth +4%0.5%QoQ 0.2pt improvementNet salesGoodARRGoodCompanyGoodIDNeutralARPUGoodChurn rateVery Good*1: “Very Good” , “Good” and ”Neutral”represent our view of performance. Each words denotes the results compared to the forecast and the growth rate as follows“Very Good”:A word for representing greater-than-expected results. “Good”:A word for an item that has been improved or not anticipated. “Neutral”:A word for lower-than-expected results. “Bad”：A word for representing a significant decline in value or a net decrease in value© 2022 SpiderPlus & Co.7Thank you.(excerpt from new FY2022.Q1 contracts and expanded introduction customers)© 2022 SpiderPlus & Co.8Net Sales and ARRARRs increased YoY29%Net sales■: ICT Business ■: ENG Business*1 (Business transferred in Jan. 2022)Millions of yenMillions of yenARR*2YoY Growth+29%1127722584374625015355681,7531,8812,0162,1802,255Q1Q2Q3Q4Q1Q2Q3Q4FY2021FY2021Q1FY2022*1:Abbreviation of engineering business. Provides thermal insulation work to install thermal insulation on equipment and pipes to increase energy efficiency in buildings and factories that use heat*2: ARR is calculated by multiplying the monthly MRR (sum of monthly usage fees that do not include temporary revenues at the end of the month of the target month) by 12 (on an annual basis) at the end of each quarterly month.Q1FY20229© 2022 SpiderPlus & Co.Number of contracted companies and ARPAThe number of contracted companies increased further while maintaining ARPA*1Number of contracted companiesARPAUnit: CompaniesUnit: In millions of yenYoY Growth+42%+90+54165157150150149+112+118+918849961,1141,2041,258Q1Q2Q3Q4Q1Q2Q3Q4FY2021FY2021Q1FY2022*1:Represents the average unit price of a contracted company unit and is calculated based on “MRR ÷ the number of contracted companies” as of the end of each quarter.© 2022 SpiderPlus & Co.Q1FY202210ID and ARPUFocus on large-scale negotiations expected to close by the end of the year*1, and IDs increased by only YoY23%Expanded sales of options. ARPU*2 grew steadily by YoY4%Unit :IDUnit: yenIDYoY Growth+23%ARPUYoY Growth+4%+1,847+2,231+2,843+3,286+1,0763,7713,7263,6773,69540,40742,63845,48148,76749,8433,615Q1Q2Q3Q4Q1Q2Q3Q4FY2021FY2021Q1FY2022*1: Refers to certain large transactions, such as the introduction of SPIDERPLUS for several 100 people (ex, company-wide introduction).*2: Represents the contract unit price for the ID unit and is calculated by “MRR ÷ number of IDs” for the month of the end of each quarter.© 2022 SpiderPlus & Co.Q1FY202211Churn rateContinuity is further improved by strengthening the use of customer dataChurn rate *1Customer support structure1%0.6%0.8%0.8%0.7%Q1Q2Q3Q4FY20210.5%Q1FY2022Free provision of installation and operation follow-up, etc.Building a Structure to Support High ContinuityCustomerImprove customer satisfactionSalesListen to the customer needsReliabilityBuildingSupportFollow up on introduction & operationProductReflect customer needs*1:The churn rate is the churn rate for the number of companies. The monthly churn rate is the average of the most recent 12 months. The churn rate for each month is calculated based on the number of cancellations in the current month divided by the number of contracted companies as of the end of the previous month.© 2022 SpiderPlus & Co.12Q1 Topicsreleased.Penetration of the construction DX market● Accelerated introduction by major construction industry companies.● Strengthen sales network by opening sales offices in Sapporo and Fukuoka.● Smart meter collaboration through an alliance with Osaki Electric Industry Co., Ltd. progressed smoothly and soon ● Deliberation of service collaboration with Optim Co., Ltd. began. Use of SPIDERPLUS for remote monitoring, etc.● Received SaaS Trend Award Vertical SaaS Trend 2022 at BOXIL SaaS AWARD 2022.Expansion of a new marketOthers● Started use in local governments.● Newly introduced by building materials ● Completed transfer of engineering business.● The academic plan was formally adopted by 2 manufacturers and interior finishing companies.vocational training universities, and the Steady progress is made in the development of curriculum was also started.new industries.© 2022 SpiderPlus & Co.13Q1 TopicsAccelerated introduction by major construction industry companiesSPIDERPLUS selected as DX-partnersExample*1,2Background to DX Progress*3With the introduction of industry-wide TOP 30 companiesGrowing network effects in each industry● Curtailment of long working hours and improvement of operational efficiency in preparation for labor shortages and overtime regulations● Labor savings by limiting visits to sites associated with COVID-19Taikisha Ltd.Hibiya Engineering, Ltd.YAMATO Inc.Net sales 202.5 billion yenNet sales 73.1 billion yenNet sales 43.7 billion yenNumber of Employees 5042944 staff members926 staff membersListed on the TSE Prime MarketListed on the TSE Prime MarketListed on the TSE Standard Market*1: The results and number of employees of each company were extracted from the company’s financial statements for the year ended Mar. 31, 2021. Listed market segments are as of May. 2022.*2: “Industry TOP 30” refers to the sales top 30 companies in industry in “Air-Conditioning and Sanitary Construction” selected by SPEEDA.*3: Summarized the content of our interviews with the companies that introduced the above.© 2022 SpiderPlus & Co.14Q1 TopicsExamples of Utilization in Local GovernmentsToshima-ku, TOKYO introduces SPIDERPLUSExamplesExpected effect● We are the first to introduce municipalities● The owner and the constructor share information by SPIDERPLUS● Used for facility management and repair work in Toshima Ward● Promoting the Digital Shift of Highly Documented Administrative Services● Expected to be used not only for facility management but also for infrastructure construction● Accumulate knowledge to expand SPIDERPLUS possibilitiesCustomer(Toshima-ku, Tokyo)Grasping progress and sharing informationConstruction prime contractorEquipment workConstruction recordGrasping progress and sharing information© 2022 SpiderPlus & Co.15Financial Information1.Business Highlights2.Financial Information3.Reference: Growth Strategy4.Reference: About SPIDERPLUS© 2022 SpiderPlus & Co.16Income StatementExtraordinary income of 131 million was recorded due to the transfer of the engineering business, which is a founding business.Millions of yenNet salesCost of salesGross profitSGA costOperating lossOrdinary lossExtraordinary incomeExtraordinary lossesQuarterly loss before income taxesQuarterly net loss© 2022 SpiderPlus & Co.FY2022.Q1Accounting periodFY2021.Q4Accounting periodQoQFY2021.Q1Accounting periodYoY-4.2%-17.3%+6.5%549+3.5%221-1.0%327+6.5%462+21.1%466+20.2%568219349560-211-2151310-84-86593265327-134-15100-151-155––––––––-138-182-182-184––––––About FY2022.Q1 accounting period (YoY)Net sales● Although sales in the ICT business increased (YoY+30.1%), company-wide sales increased by 19 million (YoY+3.5%) due to the transfer of the ENG business.Gross profit margin● Gross profit margin rose to 61.4% (YoY+1.7pp) as the ICT business became a single business from the fiscal year under review.SG&A expences● SG&A expenses increased to 560 million (YoY+20.2%) due to upfront investment in the ICT business centered on human investmentExtraordinary gain/loss● Extraordinary income of 131 million was recorded mainly due to extraordinary income from gain on transfer of ENG business.17Millions of yenFY2019FY2020FY2021FY2022.Q1Balance SheetCash and depositsOthersCurrent assetsOthersFixed assetsTotal assetsBorrowingsOthersTotal liabilitiesTotal net assetsSoftware in progress––● Increased due to ongoing renovation and development Cash and deposits● While funds are appropriated for upfront investments, the Company received 200 million yen as consideration for the transfer of the engineering business in Jan. 2022.Software in progressof SPIDERPLUSOther fixed assets5,4265,368relocated in May. 2022● Mainly due to an increase in construction in progress related to the occupancy construction of the new office 408378786797986626925051934646935182084849052662304964084,1965124,7083812457171786268044,62285.2%4,0703974,4675333689011576558124,55584.8%Equity ratio39.9%45.1%© 2022 SpiderPlus & Co.18ICT businessIncome StatementImplemented upfront investment with an emphasis on sales growth rate as plannedMillions of yenNet salesCost of salesGross profitGross profit marginSGA costOperating loss568219349560-211FY2022.Q1Accounting periodFY2021.Q4Accounting period*FY2021.Q1Cumulative period*QoQ+6.2%+2.1%+9.0%535215320YoY+30.1%+68.3%+13.8%43713030661.4%59.8%+1.5pt70.1%-8.8ptCumulative FY2022 OOB PeriodNet sales● Due to an increase in the number of IDs and ARPU, sales in the ICT business increased to 568 million (YoY+30.1%)Gross profit margin● Gross margin in the ICT segment rose from 59.8% in FY2021OOB to 61.4%461+21.3%465+20.3%-141–-158–SG&A expenses● SG&A expenses increased to 560 million (YoY+20.3%) due to planned upfront investment*Performance excluding profit and loss related to ENG business from company-wide profit and loss is presented as comparative information.© 2022 SpiderPlus & Co.19ICT businessCost of salesMarginal profit ratio*1 remained stable at around 85%Marginal Profit Ratio and Gross Profit MarginBreakdown of Fixed Costs●：Marginal profit ratio ●：Gross profit marginUnit：％■：Development personnel expenses*2 ■： Other fixed costsUnit：Millions of yen84.9%85.1%84.6%84.6%85.1%77670.1%64.5%60.1%59.8%61.4%787361115125128Q1Q2Q3Q4Q1Q2Q3Q4FY2021FY2021Q1FY2022*1:Marginal profit is “Net sales-Communication expenses (Cost of sales)-Commissions paid (Cost of sales),” and marginal profit ratio is calculated as “Marginal profit ÷ Net sales.”*2:Includes expenses related to outsourcing (including SES) and temporary staffing, in addition to permanent employee human rights expenses. Other fixed costs are based on our accounting classifications used for administrative purposes.© 2022 SpiderPlus & Co.Q1FY202220ICT businessSG&A expensesImplementation of upfront investment based on planned cost controlSG&A expenses composition*1SG&A ratio■：S&M*2 ■：R&D*3 ■：G&A*4Unit：Miilions of yen■：S&M*2 ■：R&D*3 ■：G&A*4Unit：%4653429725Q138238324424611422Q210828Q3FY202146130711340Q456032416669Q1FY202278.4%22.3%5.8%Q152.8%24.8%4.9%Q249.2%21.6%5.6%Q3FY202157.5%57.0%21.2%29.2%7.6%Q412.2%Q1FY2022*1:Each structure is a management accounting structure. Common costs are allocated proportionately according to the amount of each direct cost. In this Q1, we partially revised the classifications for managerial accounting. Comparative information for FY2021 is also recalculated to the extent possible according to the classifications in this Q1.*2: Abbreviation of Sales and Marketing. “Total of personnel expenses, advertising expenses, sales commissions, etc. and related common expenses related to the sales department including marketing” for each *3: Abbreviation of Research and Development. “Total amount of personnel expenses, etc. related to the development division and related common expenses” for each quarterly accounting period.*4: Abbreviation of General and Administrative. “Total Corporate Division Expenses and Related Common Expenses” for each quarterly period.quarterly accounting period.© 2022 SpiderPlus & Co.21ICT businessStatus of forward-looking investmentFocus on human investment and enablement in the S&M division in preparation for further expansion of the customer baseNumber of Employees*1S&M staffing■:Products (Development and R&D) ■: S&M ■: G&A ■: ENG BusinessUnit: People■:Field Sales Consulting Sales■:Customer Success Support■:Marketing Inside Sales and OthersUnit: People1323653367Q11545955337Q21737062347Q31948069387Q4202828040Q1362211Q4462311Q1FY2021FY2022FY2021FY2022*1:Includes the number of sales and corporate temporary staff and the number of development-related SES staff (excluding outside directors, etc.)© 2022 SpiderPlus & Co.22FY2022.Q1 SummaryCustomer basePrior investmentPerformance ProgressLooking ahead to the turning points in 2024,Several major companies in the industry are introducing it throughout the companyWe have begun building an organization suitable for the rapidly growing construction DX market,Focus on human investment and enablementIn line with our earnings forecasts, Continue advanced investment with an emphasis on growth potential toward the end of the fiscal year ARR of 3 billion© 2022 SpiderPlus & Co.23Reference: Growth Strategy1.Business Highlights2.Financial Information3.Reference: Growth Strategy4.Reference: About SPIDERPLUS© 2022 SpiderPlus & Co.24Medium-term VisionOur MissionCreating “Enjoyment” for Working in the Construction Industry2025Medium-term VisionOn the existence that must be in the construction “field”2024Milestone YearStarted applying the Work Style Reform Law to the construction industry2021Pioneer of construction “on-site” DX2011© 2022 SpiderPlus & Co.25Medium-term growth strategyPenetration of the construction DX marketExpansion of a new marketUnderstanding needsOrganizational strengthSalesValue ProvidedTo maximizeConstructionASEANDevelopmentProductServiceSupportPower generationMaintenancePlantManufacturingRailway© 2022 SpiderPlus & Co.26Key Strategies: Strengthen Organizational CapabilitiesAn urgent task is to create an organization that can respond to rapidly expanding market needs and quickly maximize the efficiency of invested capitalRapid expansion in both the number of companies and personnelCreating an Organization Suitable for Rapid ExpansionTo a highly scalable organizationNumber of contracted companiesApprox.2.5 timesNumber of sales personnelApprox.2 times2019.122022.3© 2022 SpiderPlus & Co.Construction DX Professional GroupARRARR expansionConstruction industryKnowledgeDigitalKnowledge ofConstruction DXProfessionalSalesSkillsConstruction siteUnderstandingImprove Revenue effectivenessInvested capital27Key Strategies: Strengthen ProductsExpanding Value Added and DX Scope by Strengthening Products and ServicesRenovation of SPIDERPLUSStrengthening the product lineGreatly improved customer convenience through more than 1500 functional improvements Increase the productivity of various operations surrounding field supervisionand additional features.Promote “on-site” DX by progressively developing and strengthening products and Development foundation is also renewed, and development speed is also increased.servicesNewUI・UXIn hundredsFunctional improvementDevelopment foundationRenovate*The screen is under development and may change.Various specialized construction companiesBPOSite supervisionConstructionSet-upInspectionReporting© 2022 SpiderPlus & Co.28Reference: About SPIDERPLUS1.Business Highlights2.Financial Information3.Reference: Growth Strategy4.Reference: About SPIDERPLUS© 2022 SpiderPlus & Co.29Construction management SaaS© 2022 SpiderPlus & Co.© SpiderPlus & Co All rights reserved.30SPIDERPLUS Functions*1Standard functionsMonthly 3,000 yen/IDDrawing managementElectronic plateletLarge amounts of paper on tablets, such as drawing and materials. Meetings and instructions can be held.You do not need to carry a smart board, and you can take a recording picture with a smart board by 1 person. Compatible with electronic delivery from the Ministry of Land, Infrastructure and Transport.Photo managementGenerate reportsIt is unnecessary to organize data that had been done by digital cameras. You can output the report immediately.No need to attach photographs or post memos. You can immediately output the required report. The format can also be customized.Option featuresIndustry-specific packageMonthly fee 2,500 yen/IDBuildingsElectrical equipmentAir-conditioning equipmentPile Construction Record/Reinforcement Inspection/Finishing inspection/construction progress managementChecking watt-hour meters/Trunk and load facilities/Connection of outlet test/illuminance measuring machineCoordinated with air flow meter/Pressure gaugeThermo-hygrometer linkage/Noise meter linkage*1:Standard functions and option user fees by industry do not include consumption tax, etc.© 2022 SpiderPlus & Co.31Benefits from the introduction of SPIDERPLUSAfter the introduction of SPIDERPLUS,business was improved by 2.5 hours/day on average.Daily operational improvementsChecking items pointed out1hPhoto sorting2hSite tours5hTime savings2.5h*10.5hPhoto sorting1hSite tours4hPer capitaEffects of monthly introduction*2Approx. 150,000 yenMonthly savings in time and costs−Monthly running costsMonthly savings in time and costs156,250 yen/month1 day reduction time: 2.5 hours × monthly operation: 20 days × (daily salary 25 thousand yen/8 hours) = 156,250 yenMonthly running costs3,000 yen/monthBefore introductionAfter introductionCharges for using SPIDERPLUS standards*1:Reduced times are prepared by us based on internal survey materials of companies that have introduced tablets and SPIDERPLUS.*2:Labor costs are 25 thousand yen/day, working hours per day are 480 minutes/day, and the number of working days per month is estimated at 20 days. Excludes SPIDERPLUS up-front costs, server costs, tablet usage fees, correspondence and educational costs, and consumption taxes.© 2022 SpiderPlus & Co.32Examples of SPIDERPLUS IntroductionExamples of YAMATO Inc. Introduction● Complete inspection to form output with a single application.● Experience that the time required for work was about 1/3-1/2.log.● Can conduct inspections by 1 person, which previously required 2 people.● Improve inspection accuracy by continually retaining the ● Convenience by enhancing manuals and web study sessions.Expectations for DX in the futureBy developing human resources and becoming an attractive company, we want to acquire and retain new human resources.YAMATO Inc.© 2022 SpiderPlus & Co.33Consolidated net sales: 43.7 billion /Number of employees: 926/Listed on the TSE Standard MarketBusiness related to design, construction and management related to architecture and civil engineering, air conditioning and sanitation, refrigeration and refrigeration, water supply and sewerage, water treatment, and hot bathExample of using SPIDERPLUSBusinesses share information via SPIDERPLUS and streamline construction management for the entire siteKajima Corporation’s DX model siteConstructionInterior finishing workOBIC Midosuji BuildingElectrical Equipment WorkAir-conditioning sanitary work© 2022 SpiderPlus & Co.34Use of SPIDERPLUSProducts used in large-scale construction sites, such as buildings and condominiumsCompleted on a SPIDERPLUS basis, from in-house construction management to information-sharing between businessesPlanningConstructionManagementMaintenance and repairsDesign officeFoundation constructionMain frame constructionExterior work Interior finishing workEquipment workOff-premise constructionCustomer / developerGeneral construction companiesManagement companyRepair companyElectrical equipmentConstruction companiesAir-conditioning equipmentConstruction companiesSanitary facilitiesConstruction companies・・・CooperationCompanyCooperationCompanyCooperationCompanyCooperationCompanyCooperationCompanyCooperationCompanyCooperationCompanyCooperationCompany・・・© 2022 SpiderPlus & Co.35DX Trends in the Construction Industry of JapanConstruction industry, where DX is a must, near the time of the adoption of the system approaching 2024Application of the Work Style Reform Law*1Increasingly sophisticatedand diverse needsExpanding market*2Applicable to the construction industry in 2024There is an upper limit on overtime.Not only in construction management but in all aspects of operationsRapid technological innovation and the utilization of various technologies are advancingCloud-based construction management services are rapidly spreadingExpecting expansion with high growth potential in the medium termLong timeLaborImprovementProductivityImprovementWageImprovementAIAudioDroneUnit: CompaniesDissemination Results and Outlook of Construction Management Services+3,68012,243FY2021-FY2026CAGR 40%+2,6058,563+2,1885,9583,770*1: Abbreviation of the Act on Improvement of Related Laws to Promote Work Style Reforms (promulgated on Jul. 6, 2018) issued by the Ministry of Health, Labour and Welfare.*2: Excerpt from “Market Trends and Vendor Share of Cloud-Based Construction Management Services” by MIC KEIKENKYUSHO CO., LTD.© 2022 SpiderPlus & Co.36Robot3DFY2017FY2018FY2019FY2020SPIDERPLUS’s competitive advantageWith a wealth of functions in construction management, utilized by major companies in the general contractor and subcontractor industriesProducts that enable cooperation between vendors not only within the company, but also within the workplacePositioningCustomer baseNetwork effectIn many scenes of the construction life cycleMulti-functional products that can be usedIn general construction and general facilities,Introduced by major companies that have established a major position in the industryBy sharing information not only with our own company but also with other companiesDX for Construction Management throughout the SiteEquipmentConstructionBuildingsConstructionMulti-functional typeIn competitivenessHigh segmentCompanyACompanyBCompanyCDrawing managementVarious inspectionsGenerate reportsPhoto managementProgress managementStorageFunction-specific typeElectrical Equipment WorkAir-conditioning WorkConstructionSanitary facility Work© 2022 SpiderPlus & Co.37Handling of this materialThis material contains forward-looking statements. These forward-looking statements are based on information as of the date hereof. These statements are not guarantees of future results or performance. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results and financial condition to differ materially from any future results and results expressed or implied by the forward-looking statements.Factors that could cause results to differ materially from those discussed in these statements include, but are not limited to, changes in domestic and international economic conditions and trends in the industries in which we operate.In addition, information regarding matters and organizations other than ours is based on publicly available information, and we have not verified the accuracy or appropriateness of such publicly available information and there can be no assurance.This document has been prepared solely for the purpose of providing information. This material is not intended to solicit thesale or purchase of securities in Japan, the United States or other territories.© 2022 SpiderPlus & Co.38