consolidated financial results · along with market share expansion at mobile shops, focused on...

0

2Q FY2017 ending May

（From June 2016 to Nov. 2016）

Released 16th January 2017

（TSE code: 4829）

Consolidated Financial Results

Nihon Enterprise Co.,Ltd.

11 Nihon Enterprise Co., Ltd. All rights reserved

3 Solution Segment

1Q＆2Q major achievements

Contents platform

VR horror game "Revised･horror! Escape from ruined hospital: Mueito"

Forecast and progress

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.3

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.4

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.5

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.6

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.7

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.9

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.11

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.13

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.28

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.21

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.22

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.24

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.25

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.26

Table of Contents

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.17

･･････････････････････・・・・・・・・・・・・・・・・・・・・・・・ P.18

･････････････・・・・・・・・・・・・・・・ P.20

（app.）About company- Business domain

“Growth strategy” & “Q1&Q2 major achievements”････････・・・・・・・・・・・・・・・・・・・・・・・ P.15

1 Overview of Earnings Summary (Q2 FY2017 ending May)

Highlights

PL

Quarterly growth

Sales

Sales（Contents Service Segment)

Sales（Solution Segment）

COGS

SG&A expenses

2 Contents Service Segment

1Q & 2Q major achievement

Solution（consigned development and others）

Advertising agent service / Overseas

New business “Inaseri”

Initiative in new technologies

4 Forecast and Strategy


1. Overview of Earnings Summary

(First half FY2017)


Lifestyle

Traffic Info.

Good progress in forming a platform centering “Women’s Diary” and “Dealing.Through strengthen alliance, aiming to build profitable advertising & commission model

With stable sales revenue from carrier platforms, accelerated solution business, such as transport and logistics system development, based on expertise in traffic info. distribution.

Solution(consigned development and others)

Advertising agent service

Overseas

Good results in new customer development. Upward trends in sales, as ITinvestment in smartphone & tablet and Cloud by enterprises is expanding

Along with market share expansion at mobile shops, focused on sales channel development. In addition to entertainment and information types of contents, started sales of industry’s NO.1 security software

Stable results in mobile phone sales to enterprises via tighten cooperation with China

Telecom and other factors.

EntertainmentFocused on long run hit contents such as “Chokotto Game” and E-book ”BOOKSMART”.

Aiming for hit contents in new fields!

First half FY2017 YoY

S a l e s 2,494 ▲2.1%

Operating profit 166 279.7%

Or d inar y pr o f i t 185 250.1%

1 Overview of Earnings Summary

Highlights（MN Yen）

Contents Service Segment

Solution Segment


FY2017 FY2016 YoY

First half First half Difference Growth rate

Sales 2,494 2,547 ▲ 52 ▲2.1%

COGS 1,473 1,384 88 6.4%

Gross profit 1,021 1,162 ▲ 141 ▲12.2%

SG&A 854 1,118 ▲ 264 ▲23.6%

Operating profit 166 43 122 279.7%

Non-operating profit 20 9 11 118.8%

Non-operating expense 2 0 1 454.6%

Ordinary profit 185 52 132 250.1%

Extraordinary profit 19 35 ▲ 15 ▲44.9%

Extraordinary loss 64 14 49 335.0%

Pre-tax profit 140 73 66 90.7%

Total amount of

corporation tax and others48 0 - -

Net profit 92 74 17 24.3%

Net profit attributable

to non-controlling interest21 4 16 365.2%


to the parent company 70 69 1 2.0%

▲


Consolidated PL

（MN Yen）


Q/Q growth

YoY and QoQ sales slightly up

YoY and QoQ ordinary profit ratio improved

613 638 638 647 643 621 595 601 546 545 500 484 460

421464

593669

555 604780 718

680

928 1,007

761 788

1,0351,103

1,2311,316

1,198 1,225

1,3751,319

1,227

1,474 1,508

1,245 1,249

108 90 81 57 13 55 78 60▲ 7

114 84 80 104

▲ 200

0

200

400

600

800

1,000

1,200

1,400

1,600

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

ＦＹ2014 ＦＹ2015 ＦＹ2016 ＦＹ2017

コンテンツサービス事業ソリューション事業経常利益経常利益率

10.5%

8.2%

6.6%

4.3%

1.1%

4.5%

5.7%

4.6%

-0.6%

7.8%

5.6%

6.5%

8.4%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

▲▲


■Contents Service Segment ■Solution Segment ■Ordinary profit ■Ordinary profit ratio

（MN Yen）


Contents service segment,

due to lower growth in contents on carrier platforms,

17.7% sales down

Solution segment,

10.8% sales up, driven by Solution (consigned development and others) and

Advertising (advertising agent service)

FY2017 FY2016 YoY


Contents Service Segment 944 1,148 ▲ 203 ▲17.7%

Solution Segment 1,549 1,399 150 10.8%

Total 2,494 2,547 ▲ 52 ▲2.1%


Sales

（MN Yen）

■ Y/Y Growth


FY2017 FY2016 YoY


Traffic Info. 405 434 ▲ 29 ▲6.7%

Entertainment 413 563 ▲ 149 ▲26.6%

Lifestyle 126 150 ▲ 24 ▲16.2%

Contents Service Segment 944 1,148 ▲ 203 ▲17.7%

As a whole 17.7% sales down, due to carrier’s policy change

in “fixed rate service”, company’s strategy change

in “monthly charged service” and others

(※1)

In all genre, focusing on business fields expansion for profitable

model through alliances!


Sales (Solution Segment)

■ Y/Y Growth

（MN Yen）

(※１) Incl. Sales by Beijing YZH Wireless Net technology Co., Ltd.


Downward trends in sales as a whole, despite good

performance in “Chokotto Game” and “BOOKSMART”

224 217 222 244 235 224 220 215 218 224 217 213 191

279 293 298 285 298 294 289 309253 247

214 205207

109 128 116 116 109 10285 76

74 7468 64

61

613638 638 647 643

621595 601

546 545500 484

460

0

100

200

300

400

500

600

700

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

FY2014 FY2015 FY2016 FY2017

交通情報エンターテインメントライフスタイル



■ Q/Q Growth

■Traffic Info. ■Entertainment ■Lifestyle

（MN Yen）

While keeping stable sales from existing hit contents ,

aiming to create new hit!


Strong performance with 10.8% up, largely driven by Solution

(consigned development and others) and Advertising (advertising agent service)

FY2017 FY2016 YoY


Solution

(consigned development and others) 823 744 78 10.6%

Advertising

(advertising agent service) 525 454 71 15.6%

Overseas 201 200 1 0.5%

Solution Segment 1,549 1,399 150 10.8%

Overseas, despite lower market growth pace, remained at the

same level



■ Y/Y Growth

（MN Yen）


264 255 316219 263 264

444 404 339 380511

384 438

98 147

225 404 247 257

259216

238

453

396

263261

5861

5146

44 82

7697

102

9498

11387

421464

593669

555604

780718

680

9281,007

761 788

▲ 100

100

300

500

700

900

1,100

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

FY2014 FY2015 FY2016 FY2017

ソリューション（受託開発ほか）広告(広告代理サービス) 海外

Overseas, despite increasing sales volume, 14.8% down

in revenue due to sales price decline

■Overseas■Solution (consigned development) ■Advertising (advertising agent service)

（MN Yen）


■ Q/Q Growth


Solution (consigned development and others), hit YoY record

Advertising (advertising agent service), hit YoY record with 10.0% up,

QoQ stably remained at the same level


FY2017 FY2016 YoY


COGS 1,473 1,384 88 6.4%

COGS ratio 59.1% 54.4% - -

Due to 7.2% increase of Solution segment ratio,

COGS rose 4.7%

COGS


■ Y/Y Growth

（MN Yen）


517 550 629 687 615 642 758 728 655 866 958 728 744

50.0% 49.9%51.1%

52.2%51.3%

52.4%

55.2% 55.2%

53.4%

58.7%

63.5%

58.5%59.6%

44.0%

49.0%

54.0%

59.0%

64.0%

0

200

400

600

800

1,000

1,200

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

FY2014 FY2015 FY2016 FY2017

売上原価売上原価率


COGS

■ Y/Y Growths

COGS COGS ratio

（MN Yen）

■COGS ■COGS ratio

COGS ration rose 1.1% due to Solution (consigned development and others)

sales increased 14.2% QoQ


SG&A dramatically decreased with 60% down in Advertising

expenses. As a result SG&A ratio improved 9.7%

FY2017 FY2016 YoY


(Advertising expenses) 134 342 ▲ 208 ▲60.7%

(Others) 719 775 ▲ 55 ▲7.2%

SG&A 854 1,118 ▲ 264 ▲23.6%

SG&A ratio 34.2% 43.9% - -

SG&A


■ Y/Y Growth

（MN Yen）


SG&A ration improved 3.7% by cost reduction such as

strategy change in advertising investment

96127

178212 215

153 129 138204

12870 72 62

320

329

343

364 356

376 412 395

380

371413

376

342

417

457

521

576 572

530 542 533

584

500483

449

405

40.3% 41.4% 42.4% 43.8%47.8%

43.3%39.4% 40.4%

47.7%

33.9% 32.0%36.1%

32.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0

100

200

300

400

500

600

2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q

FY2014 FY2015 FY2016 FY2017

（広告宣伝費）（その他）販管費率

SG&A


■ Q/Q Growth

■(Advertising expense) ■(Others) ■SG&A ratio

（MN Yen）


”Growth strategy“ &

”First half achievements”


3 Solution Segment


App

game

Casual

game

HEMS

M2M

Auto

drive

AI

Wareable

Robot

Health

careLocal

revitalization

Tourist

Info. Traffic

Info.

Migrant &

settled

Smart

agriculture

Tourism

promotion

Measurements

to prevent birth

rate decline

Big

Data

Sharing

economy

Solution segment

Drone

Renewable

energy

Stamps

IP電話IVR

Call

center

Music

distribution

Ringing tone

melody

Ringing tone

song

Pepper RoBoHoN

E-Book

IoT

App Market

(Advertising/Add-on model)

Carrier (Billing model)

Expanding content service business along with device evolution.

With expertise in contents operation, developing solution business

3D

VR

“Growth strategy” and “First half achievements”


1Downward trends in Carriers’ platform （fixed

rate/monthly billing）.

Focused on long hit contents, or “Chokotto Game”

and “ATIS Traffic Info.”

Organized “service development dept.”, to focus on

creating hit contents.

Released VR game as the first step, taking variety

of approch

2

3


2. Contents Service Segment

First half achievements

Good progress in forming a “Platform” centering

major contents such as “Women’s Diary”


Contents platform

・Proceeded mutual link and service expansion through

alliances

Support healthy lifestyle in every life

stage

Healthcare App

“Women’s Diary”

Flea market App

“Dealing”

Messenger

”Fivetalk"

Coupon App

“Shake&Coupon”

Traffic Info.

“Traffic Info Service”

childbirth

marriageTTC

health

shopping

housechores

pet

diet

vehicle

childcare

job

money

weightcontrol

entertainment

nursingE-Book

“BOOKSMART”

Linked with ”Oshiete goo" （operated by NTT Resonant Inc.）. Released community service where members can talk each other about health, love, child birth and child care.

(340 hounded thousand DL) (120 hundred thousand member)

Women’s Diary×


Oshiete goo


Messenger

“Fivetalk”

Coupon App

“Shake and

Coupon

Flea market App

”Dealing”

■In addition to “Android”, “iOS, and

“App for car”, started distribution on

“au smart pass” (Nov.2016)

Contents platform

■Added payment methods to

strengthen user engagement

■Improved security and profitability

by security function implementing

■Strengthen alliance

■Good start in ”rental” “as much as

you want” service (June.2016)

■Started distribution of popular

titles via direct license agreement

with HAKUSENSHA (Nov.2016) ,

followed by SHUEISYA

■Strengthen alliance

■In addition to carrier platforms,

started distribution on “iOS”

(Aug.2016) and “Pepper robot” (Sep.2016)

■Enrich menus by integration to

"Leisure & Parking lot Info.”

Traffic Info.

“Traffic Info.

service”

E-book service

"BOOKSMART”

Advertising As much asRenalPoint

Add-onAdvertising Advertising

■ Renewal version to be released

(Coming in this spring)

■Started community service

through link with “Oshiete goo”

(Dec. 2016)

■Sated monthly billing (Oct. 2016)

■Good performance in

advertising through synergy with

Excite Japan Co., Ltd.

Health care App

Women’s dairy

Carrier-monthly Carrier-fixed Carrier-fixed


App/monthly billing

App/monthly billing

Commission


『改・恐怖！廃病院からの脱出：無影灯』

Nov. 2016


Revised・horror! "Mueito" - Escape from the ruined hospital -


1With expertise in contents service business,

accelerated application and system consignment

development and operation (for enterprise and local government)

2

3

3 ソリューション事業

3. Solution Segment

First half achievements

Advertising (advertising agent service),

Aiming for expanding sales channel!

Developed new business in the fields of EC, IoT and others


・Preferable achievements in customer development/order

entries. As a result good performance in consigned development

– operation (total solution)

・Package solution, accelerated implementation to enterprises

IP phoneMessenger App

for business useEducation support Reverse auction service Kitting and test

operational efficiency & cost reduction

・Release of ”eManabi (July 2016)

Solution (Consigned development

and others) 1/2

3 Solution Segment


Traffic Info.

・Expansion from Contents service to solution business

■System development

・Developing Transportation & Logistics system・Bus location system （Keihin Kyuko Bus Co., Ltd.）

■Data distribution

CATV, Broadcast, Government sector, Newspaper, Shopping mole and others

“Fivetalk”

・【Local revitalization】 Good results in application and system

development – operation for local government including new

order entries and continues ones.

Migrant and settleSmart agricultureRenewable

energyDisaster

preventiondeclining child birth

preventionTourism

promotion

(eg.)

(Nov.2016) (Oct.2016)

■IoT/Connected Car

・Good progress in joint development in interface between “cars to human” and “things to human” in addition to “human to human”

3 Solution Segment

Solution (Consigned development

and others) 2/2


・In addition to entertainment and information types of contents,

started sales of industry’s NO.1 security software

・Market share expansions

・In addition to mobile shops, promoted sales channel development

Advertising

・Shanghai, sales volume of mobile device 15%up

・India, closing business due to unprofitable

operation(Nov.2016)

Contents providers （advertiser）

Face to face sales to the customers at shop

Sales of digital contents

Mobile store Other mediaNew channel

Nihon Enterprise Co., Ltd.

3 Solution Segment

(advertising agent

service)

Overseas


“Gaia no yoake”broadcasted (20th Dec.

TV Tokyo)“Close up! Tsukiji.

87 months～relocation problem…and new

challenge～』

【Service flow】

Started pre registrationBy food business operators

Established “Inaseri Co., Ltd.”.Announced business alliance

With Metropolitan Central Wholesale Market Cooperative

Association

Started at Tsukiji

Expansion area

and items to sell

(June 2016) (Oct. 2016) (Dec. 2016)

・Revolution in fresh seafood distribution with IT!

Released Metropolitan Central Wholesale Market Cooperative

Association’s First EC service, “Inaseri”

【inaseri Co.,Ltd.】

3 Solution Segment

New biz “Inaseri”

Wholesaler

Wholesaler

Wholesaler

Restaurantand food shop



①Entry items based on the next day’s arrival info.

②Order by 2:00 AM

③After collection and sorting, transport companies deliver each items to food shops on the same day of order closing

④ Payment(Credit or Bank debit)

Kaimaw

ari

Station

・ President ： Yoshikatsu Hagiwara

・ Address ： 1-8-2 Shintomi, Chuoku, Toyo, 104-0041

・ Established ： 3rd June 2016

・ Capital ： 75 Hundred Million Yen（Capital reserve: another 75 hundred million yen）

・ Business ： Planning, development and operation of Metropolitan Central Wholesale Market Cooperative Association, official EC service, “Inaseri”

・ Shareholder ： Nihon Enterprise Co., Ltd. (100%)

・ URL ： https://inaseri.net/


Initiatives

IoT Smart agriculture Energy(July 2016)

Authorized as IoT

platform ”SORACOM”s

“SPS autholized solution partner”.

Primus®

series,

compatible to SORACOM, INC.’s

data communication SIM”

SORACOM

（2016年10月）

App and system

development for Aizu-

Wakamatsu’s “next

generation food production

trial business”.

Expanded scale of

demonstrative test

Started joint development

of IoT brand “GEMS®”

with leading garden exterior

company,

TAKASHO CORPORATION

Operating “Higashikiwa

solar power plants.

Promoting local

revitalization by solar power

generation and IT

Wired drone

Developed “Dronet”, or wired drones controlling

technology, which enables long flight time and

additional payload, with University of Aizu.

Proceeding joint tests

with manufactures

and facility operating

companies to examine

commercial viability.

3 Solution Segment

Cloud controlling image Image of “Dronet”, how it looks like?

Control by device

Battery


4. Forecast and Strategy


Good progress with 47.1% for sales, 50.6% for operational profit,

52.9％ for ordinary profit, 52.5% for Net profit attribute to the

parent company

FY2017

(Forecast)

FY2016

(Result)

YoY

Progress

Difference Growth rate

Sales 5,300 5,530 ▲ 230 ▲4.2% 47.1%

Operating profit 330 219 110 50.2% 50.6%

Ordinary profit 350 252 97 38.6% 52.9%


to the parent company 135 327 ▲ 192 ▲58.7% 52.5%

Forecast and progress

4 Forecast and Strategy

（MN Yen）


因特瑞思（北京）信息科技有限公司瑞思創智（北京）信息科技有限公司

瑞思放送（北京）数字信息科技有限公司

Contents Service

Distributing information and entertainment

contents on platform including App Store,

Google Play, carries’ fixed rate service

With the expertise obtained through

contents operation,

offering IT solution service and Advertising

Agent service and others

locally and globally

Lifestyle

Traffic Info.

Solution(consigned development and others)

Advertising Agent Service

Overseas

Entertainment

Solution

10 consolidated subsidiaries 4 non consolidated

subsidiaries

（Appendix） Business Domain


http://www.nihon-e.co.jp/

日本エンタ検索

Earnings results, IR info., news release, and company profile are available on our web.

IR info. and news release are mailedby “Timely disclosure alert mail service” upon request.

※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 happen less than hundred thousand.

consolidated financial results · along with market share expansion at mobile shops, focused on...

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