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Strategic Acquisition of Yayoi
November 2014ORIX Corporation
Copyright © 2014 ORIX Corporation All rights reserved. 1
Overview of Yayoi
Company Name
Address
Business Activities
No. of Employees
Representative
Capital
Yayoi Co., Ltd.
SIA Kanda Square, 17 Kanda Konya-cho, Chiyoda-ku, Tokyo
Development, marketing, and support of business management software “Yayoi Series” and related services for small businesses
Established 1978
50 million yen
Koichiro Okamoto, Chief Executive Officer
541
History
1978 Established Nihon All Systems KK
1980 Established Milkyway KK
1987 Released the first version of “Yayoi Series”
1997 Established Intuit KK as a result of merger
Opened Osaka Customer Center
2003 Changed company name to Yayoi Co., Ltd.
2007 Opened Sapporo Customer Center
2009 Launched business help desk service
2012 Achieved 10 billion yen in revenues
Reached 1 million in registered users
Launched cloud-based software
2014 BCN AWARD 2014: Ranked No.1 in business
management software category for 15
consecutive years
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Four Characteristics
No. 1 Share in the Business Management Software Market
Business Platformthat Generates Strong, Stable,
Recurring Income
High Growth Potential
Robust Customer Base Centered on Small Businesses
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Business Model Lead customers who purchased the products to join annual fee-based YSS
membership program Recurring income (service income such as annual membership fee) comprise
about 80% of revenues
Business Model Trend in Revenues
Note: YSS is an abbreviation for Yayoi Support Service. Customers are able to receive product support and business support services by joining YSS and paying annual membership fees
Purchase product
User registration
Purchase of associated
supplies
UpgradesYSS member registration
Updates for regulatory changes/free updates Software help desk Data backup service using cloud system Business Helpdesk on accounting, tax filing, etc.
Unit: JPY Bn
Recurring income (Annual membership fee, etc.)
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Rational for the Acquisition
Acquisition of new business platform-Stable, long-term revenue base-
Acquisition of new customer base-Access to small businesses-
Expansion of service lineup-Growth support services for small businesses-
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Acquisition of New Business Platform Market share of around 60%. Lead new customers to join YSS with retention
rate of about 90% ORIX acquires new service business platform that generates recurring income
Market Share Trend in Number of YSS Members
Note: The market share is Yayoi’s share among business management software (units sales) sold at electronics retailers and leading online retailers (value packs are counted separately as individual products)
Source: Calculated by Yayoi based on the data from GfK and BCN during FY10.9 to FY12.9, and data from Gfk during FY13.9 and FY14.9
9 out of 10 companiesretain the contractNew customers join YSS
Unit: Thousands of members
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Acquisition of New Customer Base
Yayoi has robust customer base of over 1,250,000 companies centered on small businesses
Creates access to small businesses which ORIX was unable to approach
Note: Small businesses refer to companies with less than 20 employees (Less than 5 employees for wholesalers, retailers, and service providers). Registered users refer to customers who purchased Yayoi products that became registered as users.
Source: White Paper on Small and Medium Enterprises (FY2014)
Small BusinessesApprox. 3,340,000 (87%)
No. of employees: 11,920,000
Large/Medium-Sized CompaniesApprox. 520,000 companies (13%)
No. of employees:46,140,000
More than 200,000 companieslaunch their business every year
Registered usersMore than 1,250,000
companies
YSS members410,000
companies
Creates access to the customer base that comprises 87% of the
domestic businesses
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Expansion of Service Lineup
Enhance services that are tailored to the needs of small businesses by combining the capabilities and knowhow of the two companies
Support small businesses’ growth and improvement of business efficiency
×
Leasing/finance Rental/sharing Insurance Benefit program Cost reduction Risk management
Existing services
Business managementsoftware
Business support
Existing services
New service lineup
Registered usersmore than 1,250,000
YSS Members410,000
Support the growth of small businesses
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About Yayoi
November 2014Yayoi Co., Ltd.
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About Yayoi
Aims to be the infrastructure for start-up and growth of small businesses in Japan
Customers include small corporations, individual business owners, and entrepreneurs
Support customers by providing both products and services
Aims to be the infrastructure that is accessible and affordable to everyone
Dominant market leader
Double award winner in the BCN AWARD 2014*
• No.1 in business management software category for
15 consecutive years
• No.1 in tax filing software category for 10 consecutive years
Award winner in the 9th GfK BEST1**
• No.1 in business management (accounting) software for
9 consecutive years* Based on the POS data of PC and electronic retailers nationwide (2,431 stores) during 2013.1 to 2013.12** Based on the sales data of leading electronic retailers nationwide (approx. 4,000 stores) during 2013.1 to 2013.12
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Develops, Sells, and Supports the “Yayoi Series”
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Yayoi - Dominant Market Leader
Market share in units (FY14) : 57.8%
Note: The market share among electronic retailers and leading online retailers (value packs are counted separately as individual products) FY14: 2013.10-2014.9Source: Calculated by Yayoi based on GfK data
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Share in Value Exceeds 80% for Accounting Software
Market Share in Value (Accounting Software)
Market Share in Units (Accounting Software)
Note: The market share among electronic retailers and leading online retailers (value packs are counted separately as individual products) FY14: 2013.10-2014.9Source: Calculated by Yayoi based on GfK data
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Expanding Cloud Application Lineup
“Yayoi WhiteTax Filing Online”* Released January 2014
“Yayoi Blue Tax Filing Online”* Released October 2014
*The products above serve to support tax filing for small businesses. Users can select between the products depending on the format in which they submit their tax filing.
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Yayoi’s Growth Strategy: Five Pillars
Evolve into “Business Concierge”
From software infrastructure to business infrastructure
Product Enhancement and Response to Regulatory Changes
Aptly respond to large-scale regulatory changes
Strengthen Relationships with Existing Customers
Build sustainable relationships with more customers
Develop New Customer Base
Continue to focus on small corporations and individual business owners
Use of Cloud-Based Services
Provide customers with improved usability through cloud-based solutions
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Four-Stage Boosters to Realize Growth Strategy
Capture special demand stemming from consumption tax raise
Lead customers into YSS by offering first-year for free
Cultivate the untapped market with cloud applications
¥10bn
Time Line Revenues
Provide new value-added services
2
1
3
4
¥16bnFY14
FY13
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3 Values by 2 Companies Combined: ORIX and Yayoi
Finance Service IT× ×
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Becoming the “Only One”
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