Sansan, Inc.

It is now time for the SANSAN Co., Ltd. to hold a Q&A session in May 2024. I would like to introduce today's speaker. He is Terada, CEO and CPO of SANSAN Co., Ltd. He is Hashimoto, CFO of SANSAN Co., Ltd. Next, I would like to introduce today's materials. We will share the data on the screen on Zoom, but if you participate by phone, please see the materials on our IR site. Next, I would like to talk about today's time schedule. From Hashimoto Terada, I would like to talk about the balance sheet and growth strategy. After a presentation of about 20 minutes, we will have a hearing until 11 o'clock. I'd like to start with Mr. Terada. Thank you for joining us today. I'm Terada, the CEO.

First, I'd like to talk about the long-term performance and growth strategy for the May fiscal year of 2024, and the long-term profit-seeking strategy for the May fiscal year of 2025. After that, I'd like to talk about the medium-term financial policy from Hashimoto of CFO. Please look at page 4. This is the highlight of the long-term performance in May of 2024. The first point. The sales volume has improved along with the operating profit after adjustment, and the sales volume has increased the upper limit of the operating range of business expectations announced by the agency, and the operating profit after adjustment has become a performance that exceeds the demand value. The second point. DxService 33 increased the number of contracts due to the strengthening of the business system, and the sales volume increased significantly. And the third point, Invoice Management Service Bill 1's sales volume continued to grow rapidly due to the strengthening of the business system, and the ARR in May of 2024 exceeded its goal by increasing the number of 7.6 billion yen. The company's management results are as shown on the 5th page. The sales volume increased by 32.8% in the previous year, and the organic growth rate, excluding the new links by M&A, was 30.2%. The decline in sales net profit is due to the increased cost of Bill 1, which is still relatively low in profit, but the profit rate of Bill 1 has continued to improve every month since the start of the invoice system in November and November of last year. The profit after adjustment has increased by 81.5% in the previous year due to the rise in sales. In addition to the increase in profit after adjustment, the profit after adjustment has increased by 81.5% in the previous year due to the rise in sales. In addition to the increase in profit after adjustment, the profit after adjustment has increased by 81.5% in the previous year due to the rise in sales. In addition to the increase in profit after adjustment, the profit after adjustment has increased by 81.5% in the previous year due to the rise in sales. In addition to the increase in profit after adjustment, the profit after adjustment has increased by 81.5% in the previous year due to the rise in sales. In addition to the increase in profit after adjustment, the profit after adjustment has increased by 81.5% in the previous year due to the rise in sales. In addition to the increase in profit after adjustment, the profit after adjustment has increased by 81.5% in the previous year due to the rise in sales. In addition to the increase in profit after adjustment, As a result of the growth strategy, the human capital cost increased by 3.1 billion yen in the previous year's same period, and the sales growth rate increased by more than the previous year's same period. However, the increase in advertising advertising cost increased by 6.2 billion yen, and the increase rate remained at 19.0%. After adjustment, the operating profit increased by 7.6 billion yen in the previous year's same period, and the profit rate improved by 1.3 points. Please take a look at page 7 for each segment. We have increased and increased with 33, Bill 1, and Bill 8. In particular, Bill 8 achieved a black market in the second quarter for the first time since the start of the service. In addition, the other segments are linked to the first quarter by the Group Co., Ltd. Language Understanding Research Institute, which became a group company in June 2023. In terms of operating profits, the minuses of the adjustment are increasing, but in the process of advancing the growth strategy, the cost increase, which is associated with the growth of personnel, branding, and corporate departments, is the main factor. The details of the adjustment are posted on page 42 of this document. In addition, this adjustment is scheduled to be distributed to each segment from the first quarter of May 2025. As you can see from the reference data, the segment profits after distribution are also listed on page 43 of this document. Next, I will explain the achievements of each segment from page 8. First, I will explain the achievements of the 33ビールワン business. As a result of strengthening the operating system by hiring employees, the sales volume increased by 33.0% in the previous year, and the operating profit after adjustment increased by 23.8% in the previous year. In terms of services, the sales volume of 33 increased by 16.9% in the previous year in the fourth quarter, accelerating the growth rate. In addition, the sales value of Bill 1 has been maintained through the fund and has increased by 155.5% over the previous year. In addition, the growth rate of other sales values in the fourth quarter has decreased due to the influence of the loss of the new connection effect of Creative Survey. In addition, the number of contracts in the contract database Contract 1, which includes other sales values, has increased by 222 in the previous year. I will explain the KPI of 33. Please see the Q page. The graph on the left shows the stock price of 33, and the fourth quarter's record was 15.4% higher than the previous year. The graph on the right shows the contract number and the monthly stock price per contract. The contract number is 8.1% higher than the previous year, and the monthly stock price per contract is 7.1% higher. As of February, 2024, we started operating in a new price range, but this effect mainly occurs from May of 2025, and it is believed that the effect of this period's performance is limited. The graph on the right shows the average monthly contractual rate of 33 in the last 12 months, but the contractual rate at the end of this period was 0.42% and maintained a low level. I will talk about the current situation of the fourth quarter until reference. The amount of new orders is already reflected in the sales volume of the 4th quarter and the number of orders started from the 1st quarter, but the amount increased by 23% in the previous year and 28% in the 3rd quarter, making it the highest number of orders in the quarter. Next, I will explain the KPI of Bill 1. Please see page 10. The graph on the left is the MRR of Bill 1. In May 2024, ARR exceeded 7.6 billion yen and achieved more than 7.5 billion yen. Next, let's look at the graph in the center. As a result of the smooth progress of the new contract throughout the year, the number of paid contracts increased by 78.1% in the previous year, and the number of paid contracts increased by 13.5% per month per month. We are also working to optimize the price experience in the building market, and we believe that we are contributing to the improvement of the monthly income per contract in the fourth quarter. The number of new contracts in the fourth quarter has decreased compared to the past, but this is because we are focusing on distributing sales resources to medium-sized and large-sized companies in the process of optimizing the scientific experience. The graph on the right shows the monthly contract rate of Bill 1 in the last 12 months, but the contract rate at the end of the year was 0.33%, maintaining a very low rate. Next, I would like to explain the 8th business. Please see page 11. The B2B and B2C services have grown and increased their sales by 23.8% over the previous year. The B2B services, especially the event business and the aid team, have improved. The aid team has successfully increased the number of contracts, and they have improved their sales as well. As a result, after adjustment, the operating profit has shifted to business operations that focus on profitability, and since the start of the service, we have realized the black market in the second period. Page 12 is the performance data for each trial period. In the same way as in the previous period, we held a large-scale business event in the fourth trial period, which resulted in high sales and improved operating profits. Next, I would like to talk about the growth strategy of the main service. First of all, let's take a look at page 14 of Section 33. Section 33 has improved sales productivity by about 13% over the past two years due to various effects such as product enhancement and demand recovery after COVID-19. In recent years, this productivity-improving background has been used to strengthen sales systems and increased the number of field sales by about 29%. We are looking forward to the future growth of Inc. Inc. We are looking forward to the future growth of Inc. We are looking forward to the future growth of Inc. We will continue to improve Net Revenue Retention by incorporating negative churn, which is a state in which the increase in income due to existing contracts is higher than the decrease in income due to service contracts. Please look at page 16. Regarding TAM, the number of users of Sansan is only about 5% for all London people. Therefore, we think that there is a margin of expansion of more than 10%. Next, I would like to explain the growth strategy of Bill 1. Bill 1 continues to strengthen the business policy, but not only that, but also expands the area of expansion. Please see page 17. Since the service delivery in May 2020, we have grown mainly in terms of demand functions, but in February 2022, we installed the delivery function. Also, in June 2023, we expanded our business in the fintech field by providing credit cards for law-abiding people as issuers. And in May 2024, we announced the fee production function using the Bill & Business Card since June 2024. Also, from the second half of 2024, we will provide the entry and exit function, which can be completed in one go from issuing a request and until the entry and exit. I will explain the details of the new feature, Bill One Cash, which is a cash production feature. Please take a look at page 18. Bill One Cash is a feature that allows you to use Bill One Business Card as a prerequisite to reduce the amount of money paid by employees and reduce the financial burden of employees and achieve efficient and cost-effective cash production operations. We have already started our business activities, but we have gained so much appreciation that we can say that we are in a market fit, and we expect that we will contribute to the growth of BIL1 in the medium term. Please see page 19. It is about TAM of BIL1. Currently, BIL1 has acquired more than 2,800 paid contracts, and about 18.2 million companies are involved in BIL1, so-called invoice network participants. However, if you look at about 2 million companies in Japan, it is still a small scale, and we think that there is a big growth potential left in the future. I will explain about the long-term profit and loss forecast. Please see page 21 of the long-term profit and loss forecast for May 2025. The sales volume is expected to increase from 27.0% to 30.0% in the same period last year. Based on the growth strategy I explained earlier, the growth rate of 33 is 16.0% to 17.0%, and the bill is expected to be 60.0% to 70.0%. The eight business events and eight teams are expected to grow by 32.0% to 38.0%. In addition, after adjustment, the operating profit is increased by 76.2% to 157.6%, and after adjustment, the operating profit is increased by 2.2 to 5.0 points. Please see page 22 for the main cost of the investment. First of all, the main cost is the increase of the previous year's share price by 29% and the increase of the previous year's share price by 16%. In addition, from the 1st to the 2nd quarter, the cost of moving from the main office to the main office is estimated to be about 1.2 billion yen in total, including land rent and relocation-related expenses, which is estimated to be about 1.2 billion yen in total. Land rent is expected to rise significantly in the short term due to double rent and double payment of rent, but it is expected to drop slightly from the 3rd quarter, when it ends. In addition, the transfer-related expenses include the current contract termination of the company, the acceleration and decarbonization expenses, repair expenses, and moving expenses, and are expected to not occur since May of 2026. This concludes my explanation. Next, I would like to hear from Hashimoto.

I'm Hashimoto from CFO. I will explain the medium-term financial policy from May 2025 to May 2027. Please see page 24. From May 2022 to May 2025, we announced a medium-term financial policy that aims to improve the operating profit rate in the first half of every quarter and to continue the high growth rate of joint sales for more than 20% in the middle of the second half of the third year. This time, we will announce a new policy because the angle of the medium-term business has increased. First of all, we aim to reach 22% to 27% as CAGR for the next three years. As a result, the joint sales value in May of 2027 is expected to be 6.15 billion yen to 6.93 billion yen. In addition, we aim to achieve a profit rate of 18% to 23% in May of 2027, while investing in joint sales growth and growing at a faster pace than ever before. We will continue to run business operations that emphasize the most important rate of sales growth, but we think that we have established a foundation to expand the profit rate sufficiently because the business scale has increased and the degree of profit loss has increased. In the future, we expect the sales rate to drop in the medium to long term due to the improvement in profitability of Bill 1. We expect the sales rate to drop in the medium to long term due to the improvement in profitability of Bill 1. We expect the sales rate to drop in the medium to long term due to the improvement in profitability of Bill 1. We expect the sales rate to drop in the medium to long term due to the improvement in profitability of Bill 1. We expect the sales rate to drop in the medium to long term due to the improvement in profitability of Bill 1. We expect the sales rate to drop in the medium to long term due to the improvement in profitability of Bill 1. We expect the sales rate to drop in the medium to long term due to the improvement in profitability of Bill 1. Page 26 shows the situation of the sales profit after adjustment before distributing the main service. As before, 33 will maintain stable sales growth and achieve high profit rates. We are planning to invest in a new business that will be considered to be promising in the future, mainly in a building that has a high sales growth rate and in a new business that will be considered to be promising in the future. By building such business portfolios, we believe that we will be able to meet the medium-term financial policy that we have just explained by implementing various investments, including new businesses. Please see page 26. We have been actively investing in the growth of main services, but we have already lost stable business cash flow and free cash flow, and the cash flow in May of 2024 was about 5.4 billion yen, and the free cash flow was about 230 million yen. However, in May of 2024, there will be a temporary deficit of the capital transfer, and the free cash flow will be about 4.2 billion yen. In the future, we will aim to expand the cash flow margin as we proceed with the medium-term financial policy. Based on these, we have decided to acquire self-subsidized companies as part of the stock market, so I will explain. Please see page 27. Since our business was in the growth phase, we have not made any payments or acquired self-subsidized stocks. From now on, our business will continue to be in the growth phase, but we have decided to acquire these stocks as a result of our current financial situation, medium-term financial policy, stock price movement at the foot of the stock market, and the price of stocks by stock options. Based on the current situation, we will consider the implementation of a mobile compensation plan, and in the medium term, we plan to implement a low-cost company compensation policy. Thank you very much.