Earnings Summary FY2017 1Q(ending May)

Consolidated Financial Results
Nihon Enterprise Co.,Ltd.
1Q FY2017 ending May
（From June 2016 to Aug. 2016）
Released 3rd October 2016
0
（TSE code: 4829）
Table of Contents
1
Overview of Earnings Summary
(Q1 FY2017 ending May)
Highlights
PL
Quarterly growth
Sales
Sales（Contents Service Segment)
Sales（Solutions Segment）
COGS
SG&A expenses
2
Contents Service Segment
･･････････････････････・・・・・・・・・・・・・・・・・・・・
･･････････････････････・・・・・・・・・・・・・・・・・・・・
･････････････････････・・・・・・・・・・・・・・・・・・・・・
･･････････････････････・・・・・・・・・・・・・・・・・・・・
･･････････････････････・・・・・・・・・・・・・・・・・・・・
･･････････････････････・・・・・・・・・・・・・・・・・・・・
･･････････････････････・・・・・・・・・・・・・・・・・・・・
（Q1 achievements）
･･････････････････････・・・・・・・・・・・・・・・・・・・・ P.15
･･････････････････････・・・・・・・・・・・・・・・・・・・・ P.16
･･････････････････････・・・・・・・・・・・・・・・・・・・・ P.17
Business strategy
Lifestyle
Traffic Information and Entertainment
3
Solutions Segment
（Q1 achievements）
Business strategy
Solutions（consigned development and others）
Advertising agent service / Overseas
EC service “Inaseri” / Initiative in new technologies
4
P.3
P.4
P.6
P.7
P.9
P.11
P.13
Forecast and Strategy
･･････････････････････・・・・・・・・・・・・・・・・・・・・
･･････････････････････・・・・・・・・・・・・・・・・・・・・
･･････････････････････・・・・・・・・・・・・・・・・・・・・
･･････････････････････・・・・・・・・・・・・・・・・・・・・
P.18
P.19
P.21
P.22
･･････････････････････・・・・・・・・・・・・・・・・・・・・ P.24
･･････････････････････・・・・・・・・・・・・・・・・・・・・ P.25
Forecast
Roadmap
･･････････････････････・・・・・・・・・・・・・・・・・・・・ P.26
(app.) About company - Business domain -
1
Nihon Enterprise Co., Ltd. All rights reserved
Overview of Earnings Summary
(Q1 FY2017)
2
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
Highlights
（MN Yen）
1Q FY2017
S
a
l
e
s
O p e r at i n g p r o f i t
Ordinar y profit
YoY
1,245
67
80
▲5.6%
18.1%
33.4%
Contents Service Segment
Lifestyle
Traffic Info.
Entertainment
Good progress in forming “contents-platform” centering around “Women’s
Diary” and “Dealing”
With stable sales in contents provision on carrier platforms （B-to-C）, carried out traffic
Info. distribution to enterprises (B-to-B) through strengthening alliances
Innovative challenge in producing hit contents, while focusing on existing
long run hit “Chokotto Game” and E-book service “BOOKSMART”
Solutions Segment
Solutions
(consigned development and others)
Good performance in total solution service including consigned development and
debug. Newly released “e-Manabi”, a package service to support employee education
Advertising agent service
Despite negative impact of administrative regulation, stable sales due to measures
such as new ad plan. At the same time focused on developing sales channel
Overseas
In lower market growth, hit QoQ record owing strong performance in B-to-B sales
of mobile device and broadband
3
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
Consolidated PL
（MN Yen）
FY2017
FY2016
Q1
Q1
YoY
Difference
Growth rate
Sales
1,245
1,319
▲ 74
▲5.6%
COGS
728
728
0
▲0.0%
Gross profit
516
590
▲ 74
▲12.6%
SG&A
449
533
▲ 84
▲15.8%
Operating profit
67
57
10
18.1%
Non-operating profit
14
3
10
323.2%
1
0
0
409.0%
Ordinary profit
80
60
20
33.4%
Extraordinary profit
19
17
1
9.4%
1
-
1
-
Pre-tax profit
98
78
19
25.6%
Total amount of
corporation tax and others
29
46
▲ 17
▲37.3%
Net profit
68
31
37
118.5%
Net profit attributable
to non-controlling interest
Net profit attributable
to the parent company
13
7
5
76.1%
55
24
31
131.8%
Non-operating expense
Extraordinary loss
4
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
Q/Q growth
Good progress towards full year forecast
（MN Yen）
1,600
1,474
1,400
10.5%
1,200 1,139
1,035
1,231
559
421
1,198
1,245
1,227
1,225
464
593
669
604
555
780
7.8%
928
718
1,007
8.0%
680
761
5.7%
5.3%
4.5%
4.3%
6.5%
4.6%
4.0%
613
638
638
647
643
200
0
▲ 200
6.0%
5.6%
400
579
12.0%
10.0%
6.6%
600
1,319
1,103
8.2%
1,000
800
1,375
1,316
1,508
621
595
601
2.0%
546
545
1.1%
500
484
0.0%
114
108
90
84
81
80
78
60
60 ▲-0.6%
57
55
13
▲7
▲-2.0%
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
ＦＹ2014
Contents Service Segment
コンテンツサービス事業
ＦＹ2015
Solutions Segment
ソリューション事業
5
ＦＹ2016
Ordinary profit
経常利益
ＦＹ2017
Ordinary profit ratio
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
Sales
■ Y/Y Growth
Contents Service Segment, sales 19.5% down due to negative
impact of carriers’ policy change in “fixed rate service” and others
Solutions Segment, rose steadily by 6.0%
（MN Yen）
FY2017
FY2016
1Q
1Q
YoY
Difference
Growth rate
Contents Service Segment
484
601
▲ 117
▲19.5%
Solutions Segment
761
718
42
6.0%
1,245
1,319
▲ 74
▲5.6%
Total
6
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
Sales
(Contents Service Segment)
■ Y/Y Growth
Entertainment, decreased 33.4% due to less profitability in carrier
service, despite increase of subscribers
In all genre, focusing on business fields expansion through
alliances!
（MN Yen）
FY2017
FY2016
1Q
1Q
YoY
Difference
Growth rate
Traffic Info.
213
215
▲1
▲0.9%
Entertainment
205
309
▲ 103
▲33.4%
64
76
▲ 11
▲15.5%
484
601
▲ 117
▲19.5%
Lifestyle
Contents Service Segment
(※1)
(※１) Includes sales by Beijing YZH Wireless Net technology Co., Ltd.
7
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
Sales
(Contents Service Segment)
■ Q/Q Growth
Decreasing trend due to lower profitability in carrier service and
others
While obtaining stable sales&profit in existing hit contents,
keep challenge to create new hit contents!
（MN Yen）
700
600
500
579
105
613
109
638
128
400
300
287
279
293
638
116
298
647
116
285
643
109
298
621
102
294
595
601
85
76
289
309
546
545
74
74
253
247
500
484
68
64
214
205
200
100
186
224
217
222
244
235
224
220
215
218
224
217
213
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
0
1Q
FY2014
FY2015
Traffic Info.
交通情報
Entertainment
エンターテインメント
8
FY2016
FY2017
ライフスタイル
Lifestyle
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
Sales
(Solutions Segment)
■ Y/Y Growth
Solutions(consigned development and others) , 5.1% down.
Preferable order entries (acceptance inspection is scheduled 2Q)
Advertising Agent Service, 21.8% up despite negative impact
of administrative regulation
Overseas, strong performance with 16.6% up.
As a whole Solutions Segment increased 6.0%
（MN Yen）
FY2017
FY2016
1Q
1Q
YoY
Deffirence
Growth rate
Solutions
384
404
▲ 20
▲5.1%
Advertising Agent Service
263
216
47
21.8%
Overseas
113
97
16
16.6%
Solutions Segment
761
718
42
6.0%
9
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
Sales
(Solutions Segment)
■ Q/Q Growth
Strong performance in Solutions (consigned development and others) , despite
down in comparison to 4Q (order entries are increased due to many Japanese company's’ year end)
Advertising Agent Service, stable despite down in comparison to
3Q and 4Q FY2016
Overseas, hit the YoY record in lower market growth due to
successful sales measures
1,100
1,007
928
900
780
700
559
500
300
100
▲ 100
101
207
421
58
98
464
61
593
51
225
669
46
404
147
249
264
255
1Q
2Q
3Q
316
4Q
76
555
44
247
82
219
264
1Q
2Q
3Q
Solutions (consigned development)
ソリューション（受託開発ほか）
259
216
680
102
761
396
113
453
263
238
257
263
ＦＹ2014
97
604
98
94
718
（MN Yen）
ＦＹ2015
444
404
4Q
1Q
511
339
380
2Q
3Q
ＦＹ2016
広告(広告代理サービス)
Advertising Agent Service
10
4Q
384
1Q
ＦＹ2017
Overseas
海外
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
COGS
■ Y/Y Growth
COGS rose 3.3% due to increase of Solutions Segment sales ratio
（MN Yen）
COGS
COGS ratio
FY2017
FY2016
1Q
1Q
YoY
Difference
728
728
58.5%
55.2%
11
Growth rate
▲0
-
▲0.0%
-
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
COGS
■ Q/Q Growth
COGS improved due to sales decrease in Advertising Agent
Service and others
（MN Yen）
1,200
63.5%
1,000
64.0%
58.5%
58.7%
59.0%
800
600
55.2% 55.2%
54.2%
53.4%
52.2%
50.0%
400
51.1%
54.0%
52.4%
51.3%
49.9%
49.0%
200
0
617
517
550
629
687
615
642
758
728
655
866
958
728
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
FY2014
FY2015
COGS
売上原価
FY2016
44.0%
FY2017
COGS ratio
売上原価率
12
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
SG&A
■ Y/Y Growth
SG&A dramatically improved as advertising expenses decreased
47.6%
（MN Yen）
FY2017
FY2016
1Q
1Q
YoY
Difference
Growth rate
72
138
▲ 65
▲47.6%
(Others)
376
395
▲ 18
▲4.8%
SG&A
449
533
▲ 84
▲15.8%
36.1%
40.4%
(Advertising expenses)
SG&A ratio
13
-
-
Nihon Enterprise Co., Ltd. All rights reserved
1
Overview of Earnings Summary
SG&A
■ Q/Q Growth
SG&A ratio increased due to sales down
SG&A decreased due to optimized advertising investment
& cost reduction
（MN Yen）
576
600
521
500
461
348
400
457
417
364
584
572
356
343
530
542
376
412
533
100.0%
380
500
395
371
329
90.0%
483
413
449
80.0%
376
70.0%
320
60.0%
300
50.0%
41.4%
200 40.5% 40.3%
100
113
96
127
42.4% 43.8%
178
212
47.8%
43.3%
47.7%
39.4% 40.4%
215
153
40.0%
33.9% 32.0% 36.1% 30.0%
20.0%
204
129
138
128
70
10.0%
72
0
0.0%
1Q
2Q
3Q
FY2014
4Q
1Q
2Q
3Q
4Q
1Q
FY2015
Advertising
expense
（広告宣伝費）
2Q
3Q
FY2016
Others
（その他）
14
4Q
1Q
FY2017
SG&A ratio
販管費率
Nihon Enterprise Co., Ltd. All rights reserved
2. Contents Service Segment
Q1 achievements
Strategy by segment
Promote to create hit contents and
to form a “contents platform”
by strengthen alliance, new contents distribution
and service expansion
Expanding services centering major contents
Healthcare
『Woman's Diary』
Flea-market
『Dealing』
Messenger App
Traffic Info.
『Fivetalk』
『Traffic Info. Service』
15
E-Book
『BOOKSMART』
Casual game
『Chokotto Game』
Nihon Enterprise Co., Ltd. All rights reserved
2
Contents Service Segment
Lifestyle
Proceed to form a “Contents platform” centering around
“Woman's Diary”,” Dealing” and “Fivetalk”
Strengthen alliance to expand business fields
“Woman’s Diary”（healthcare App）
“Dealing”s（flea market App）
“Fivetalk”
･Newly opened ”Tomodachi hiroba”
contributed to good DAU trends
(Since August)
Expansion of service
･Enhanced usability by adapting new
payment methods
･Focused on alliance to increase
transaction number × unit price
Completed Phase1 development to
start new service w/monthly charge
･A stock model to increase sales volume
and stability
New service development based
on escrow system
･Promoted new services including Cto-C EC and sharing economy
ライフスタイル
Started joint operation with Excite
Japan Co., Ltd.
･Completed necessary updates for joint
operation, and started ad space sales
（chat App）
Expansion of service
･Mutual contents link through alliance
weight
control
Contents platform
TTC
marriage
Diet
shopping
child
birth
nursing
health
house chores
16
entertainment
money
vehicle
carrier
Child care
pet
Nihon Enterprise Co., Ltd. All rights reserved
2 Contents Service Segment
Traffic Information
A long ran hit content on carrier platform
Expanded distribution channel
･”App Store” (August 2016)
･ Robot App for ”Pepper” (September 2016)
Focused on B-to-B through alliances
･Cloud service for cargo transportation company
･Distribution for “shopping mole”, “bus location system”, “digital
broadcasting” and “Michino-eki”
Entertainment
Focused on an existing popular game “Chokkot
game”
“BOOKSMART” to increase subscriber
･Service expansion including rental service, web browser and others (June 2016)
･Tighten partnership with Tokyo-Shoten commercial union and
publishers (June 2016)
？
Innovative challenge to produce a new hit
content!
17
Nihon Enterprise Co., Ltd. All rights reserved
3. Solutions Segment
Q1 achievements
Strategy by segment
Expand solution business by offering a total solution,
from App development, system implementation, voice
and new technologies, at one stop shop
Group synergy
18
Nihon Enterprise Co., Ltd. All rights reserved
3
Solutions Segment
development
Solutions (Consigned
and others) 1/2
Good performance in System integration, App development and
debug
・Customer management system + App development for a recycle shop dedicated to apparel
・Proceeded disaster prevention system development
・WEB service development for local air line company, and others
Voice technology “Primus”(※1)
･Delivered to a construction and building company for tunnel constructions
･Dialing restriction & voice recording function contributed to acquire financial securities
companies as new clients
Local revitalization and sharing economy
Local revitalization
（consecutive operation）
marriage, pregnant, delivery
and child care (in Chiba)
）
Info. sharing
（Yokoshiba Hikar ）
Child care support
（Shimoda city）
New service
Smartvalue Co., Ltd.
（business and capital tie-up)
( under planning and developing )
Promote local
revitalization by creating
“environment where
women can
live their lives vigorously”
based on sharing-economy
Proceeded joint projects of
contents provision, such as
marring hunting, marriage,
pregnancy, child birth and
child care, to local
governments
Provided pregnancy and child birth
related contents for
”implementation, operation and maintenance
of child care support application project”
(Nagoya Pref./Aug. 2016)
Cloud for tourism
business operators,
“Yubisashi Navi!”
Consecutively operated
History Explorer AR
Navi ”Shiroishi Shiro-Shiro
Navi” and “Aizu
Wakamatsu city Navi”
and others
Superior environment
for carrier and child care
(※1) “Aplos one” is OEM product developed by a consolidated subsidiary “and One Inc.”
19
Nihon Enterprise Co., Ltd. All rights reserved
3
Solutions Segment
development
Solutions(Consigned
and others) 2/2
Package service
・Released a new service, “e-Manabi” (June 2016)
・Promoted sales activities in market needs w/increase of
employee education cost
・Delivered to a large restaurant chain-store (Aug. 2016)
Contents development (w/gamification) + distribution platform
Survey on education and training cost for employee in FY2015
numb
er of
comp
any
scale and
industry
Trainers
movie contents upload, students
assignment, follow-up on cloud
Students
PC・Tablet・Smarthone
Package
movie contents, distribution server, access control with ID/PW,
communication & test functions
total cost for education
(10thousand yen）
cost per employee (yen)
FY2014
FY2014
FY2015
FY2015
result
result
forecast
result
forecast
/forecast
total
106
4,533
5,651
36,877
47,170
1.28[1.27]
less than 1000
40
9,862
12,214
43,775
53,525
1.22[1.28]
from 300 up to 999
39
1,902
2,379
34,077
41,513
1.22[-]
less than 299
27
437
655
30,704
45,926
1.5[-]
manufacture
41
5,403
6,269
32,415
39,073
1.21[1.20]
non manufacture
65
3,984
5,261
39,692
52,277
1.32[1.31]
（ source : SANRO Research Institute,Inc.） http://www.e-sanro.net/jinji/j_research/j_research05/pr_1510/
in-coming call
Transfer HQ
Client A
via ext. tel
netowork
in-coming
call
Client B
Branch
Outing
Outing
Extension telephone network
Landline phone + Smartphone (for free)
IP Phone software
Purchase at
reasonable
price
Buy
er
data leakage
eavesdrop
closed
network
automatic bulk kitting
Settings
Division A
Buyer
Supplier
Call
with
OABJ
Time
10Az
mins
Current price
Supplier
Data entry
Division B
Supplier
Supplier
Reverse auction service
Messenger App for business use
Continuing sales to government sector
and private enterprises
Reviewed pricing and sales channel to promote sales
20
Kitting support tool for smartphone
Strengthen sales channel measures
Nihon Enterprise Co., Ltd. All rights reserved
3
Solutions Segment
Advertising Agent Service
Contents provisioning
Negative impact of administrative
regulation at the store
・Competitive against carriers’ contents
・Self imposed regulations at many store
Plan lowering the barrier
to place ad
Sales consignment
CP
（for contents provider）
Seems
nice!
Try
this!
Sales
NE
Store
Customer
Distribution
to multiple stores
Introduced
Payment
（for store）
Attractive incentive plan
Focused on developing sales channel
Overseas
Despite decreasing smartphone market
trends in China, sales to enterprises
contributed to 20% up in number of
smartphone sold
Opened Yu Qiao Store (started operation in April 2016)
Shanghai Telecom, Yu Qiao Store
・With location merits(business city and newly developing residential area) taking
convenience style of operation in addition to broadband sales to households
21
Nihon Enterprise Co., Ltd. All rights reserved
3
Solutions Segment
EC service “Inaseri”
Established Inaseri Co.,Ltd. (June 2016) and
研究開発
announced joint operation with WHOLESALES COOPERATIVE OF TOKYO FISH MARKET for its first
official EC service “Inaseri”
Proceed system development on schedule towards
service release
①put-up fish and sea food
based on the next day’s arrival
info.
②order by 2:00 AM
Wholesaler
Restaurant
and food shop
Wholesaler
Restaurant
and food shop
Restaurant
and food shop
Wholesaler
③NIPPON EXPRESS works as a
forwarder, and transport companies
deliver each items to food shops on
the same day of order closing
④ Payment
(Credit or Bank debit)
Kaimawari
Station
Initiatives
IoT
・Started joint development of an
IoT brand “GEMS” with Takasho
TAKASHO CORPORATION
(July 2016)
・”Fivetalk” for IoT
Smart
Agri.
Energy
Developed App and system for
Aizu-Wakamatsu’s “next
generation food production trial
business”
Enlarged empirical survey is on
going
22
Started the operation of
“Higashikiwa solar power
plants” (May 2016).
Promoted local revitalization
based on solar power
generation and IT
Wired drone
・ W/Aizu Univ Jointly developed
drone control tech. which
enables longer flight time and
aggregated payload
・Started a project with a
manufacture for industrialization
Nihon Enterprise Co., Ltd. All rights reserved
Forecast and Strategy
23
Nihon Enterprise Co., Ltd. All rights reserved
4
Forecast and Strategy
Forecast and progress
Good progress, referring to 1Q ratio in YoY trends,
23.5% for sales, 20.5% for operating profit, 23.0% for ordinary profit
（MN Yen）
FY2017
(Forecast)
FY2016
(Result)
YoY
Difference
Growth rate
Progress
5,300
5,530
▲ 230
▲4.2%
23.5%
Operating profit
330
219
110
50.2%
20.5%
Ordinary profit
350
252
97
38.6%
23.0%
Net profit attributable
to the parent company
135
327
▲ 192
▲58.7%
41.2%
Sales
24
Nihon Enterprise Co., Ltd. All rights reserved
4
Forecast and Strategy
Roadmap
Expansion of business fields
in smart devise eras
M2M
Sharing
Economy
IP phone
Robot
Messenger
IoT
Call center
Traffic
Info.
Wearable
Smart
Agri
Security
Music
Fin
Tech
HEMS
Game
Ringing
Tone Decoration
(song)
mail
Ringing
Tone
(melody)
Automatic
car driving
AI
Big data
Regional
revitalization
E-book
IVR
Drone
My
number
25
3D
VR
ＧＰＳ
Nihon Enterprise Co., Ltd. All rights reserved
（Appendix） Business Domain
Lifestyle
Contents Service
Distributing information and entertainment
contents on platform including App Store,
Google Play, carries’ fixed rate service
Traffic Info.
Entertainment
Solutions
Solutions
(consigned development and others)
With the expertise obtained through
contents operation,
offering IT solution service and Advertising
Agent service and others
locally and globally
Advertising Agent Service
Overseas
10 consolidated subsidiaries
因特瑞思（北京）信息科技
有限公司
(※)
4 non consolidated
subsidiaries
瑞思放送（北京）数字
信息科技有限公司
瑞思創智（北京）信息科技有限公司
at the LOUNGE was merged with 4QUALIA Co., Ltd. on 1st Oct 2016.
NE group operates two major businesses with group synergy
26
Nihon Enterprise Co., Ltd. All rights reserved
日本エンタ
検索
http://www.nihon-e.co.jp/ir/
Earnings results, IR presentation materials, press release,
and company information are available at www.nihon-e.co.jp/ir/
also delivered via "timely disclosure alert mail" service.
※View and forecast contained in this document are based on our
assessment at the time of document issuance, and accuracy of
the information is not guranteed.
Please note that actual outcomes and results may differ materially
from the information due to any changes caused by various factors.
※In this document there are some rounding variances in calculations.
27
Nihon Enterprise Co., Ltd. All rights reserved

Download Report