Financial Results for the 1st Quarter of Fiscal Year Ending November 30, 2019 Money Forward, Inc. April 15, 2019
Contents 1 Highlights P.2 FY11/19 Q1 Financial Highlights and Topics P.5 Overview P.6 Money Forward Business P.12 Money Forward Home P.16 Money Forward X P.22 Money Forward Finance P.25 Realignment of Business Portfolio P.29 Other Strategic Initiatives P.33 Appendix P.38
Highlights
3 Financial Highlights in FY11/19 Q1 • Consolidated net sales grew by 54 54 ％ YoY oY to ¥ 1.40 billion. Business domain drove the growth with net sales of ¥ 853 million(+60% YoY). • Stock Sale ales from from Busi siness dom domain in ac achie ieved rec record gro growth. . New pricing plan will be adopted to promote the use of multiple services of Money Forward Cloud Series , pursuing customer’s operational efficiency. • Increased investment for accelerated growth. EBITDA was negative ¥ 941 million mainly due to the TV advertising campaign for Money Forward ME. As planned, EBITDA loss is expected to be largest in Q1. • Business portfolio realignment. Decided to discontinue the application process for cryptocurrency exchange license as well as closing the mirai talk outlet. ¥ 74 million extraordinary losses were recorded.
Key Topics in and after FY11/19 Q1 4 • Money Fo Forward Clo loud Attendance was la launched. . The service accelerates expansion of our customer base to large and high-growth companies through cross-selling, particularly with the payroll service. ggregated in Q1 * due to • Money Fo Forward ME saw a re record rd number of of accounts agg the TV advertising campaign. Annual membership plan was introduced to improve the retention rate of paying users. • X domain started providing new services to 8 fin financia ial l institutions, including Money Fo Forward fo for r JA Bank . • MF KESSAI scaled rapidly. The service provides solutions which meets high- growth company’s needs for operational efficiency and cash flow optimization. • Money Forward Lab was established to accelerate visualization of coming future of household/asset/accounting by leveraging technology and data accumulated by Money Forward. ※ Total number of accounts that users aggregated into Money Forward ME , per quarter. Examples of accounts and services include bank accounts, securities accounts, credit card, pension plan, mileage and reward points.
FY11/19 Q1 Financial Highlights and Topics
Our Services 6 Ser Services for Cor Corpo porates Ser Services for Indi dividuals Dev eveloping services wi with Innovative Fi Financial Sol Solutions Financial Institutions Fi Cloud Se Serie ies for or ○○ SaaS Platform for Automated PFM Service BPO and Factoring Service Customized Money Forward ME for Back Office Operations Financial Institutions and its Clients. Cloud Accou ccountin ing Cloud Ta Tax Return Pa Pass ssbook ook Ap Apps Platform for Comparing and Blockchain / Crypto currency-related Passbook Apps for Financial Cloud Expense se Applying for Financial Services Services Institutions and its Clients Cloud Payroll ll MF MF Unit it Cloud Invoic ice Practical Economic Media Offering PFM Tools within Developing AI-based loan screening model Financial Institutions Apps Cloud My My Nu Number Cloud Finance Cloud for or ○○ Automated Savings App Cloud Attendance Cloud-based Services for Financial Institutions and its Clients Personal Finance Consulting Outlet Cloud-based Bookkeeping Service Coupon App Cloud-based Business Analysis Tool
Consolidated Net Sales (Quarterly Trend) 7 Consolidated Net Sales grew significantly by 54% YoY. +54% （¥ mn ） ■ Business ■ Home ■ X □ Finance ■ Other 1,469 1,398 (YoY) 36 + ¥ 44 mn 1,400 48 197 + 23 % 125 1,130 1,200 1,091 17 7 97 965 + 39 % 370 397 1,000 906 178 2 3 173 299 102 732 800 693 304 117 265 311 126 510 600 212 + 60 % 65 211 853 833 400 172 715 599 533 477 401 200 354 272 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 FY11/17 FY11/18 FY11/19 (Consolidated) (Consolidated) (Consolidated) ※ Exclude labelling for Oher net sales from above graph.
Gross Profit / EBITDA 8 Gross profit expanded steadily along with net sales. Gross profit margin excluding Money Forward Financial (“MFF”) was 62% * . EBITDA loss was ¥ 941 million, and EBITDA loss excluding advertising expenses and MFF was ¥ 200 million. ( ¥ mn) □ EBITDA □ EBITDA (excl. advertising expenses) ( ¥ mn) □ Gross profit ■ Gross profit margin FY11/18 FY11/19 FY11/18 FY11/19 Q1 Q1 Q1 Q1 53 1 0 746 700 0.8 △ 94 600 △ 200 610 500 67% 0.6 △ 400 △ 374* 400 53%* 0.4 △ 600 300 200 △ 800 0.2 100 △ 941* △ 1,000 0 0 ※ When excluding MFF, gross profit margin was 62%, EBITDA loss was ¥ 766 million, and EBITDA excluding advertising expenses was ¥ 200 million for FY11/19 Q1. MFF saw operating loss of ¥ 175 million in FY11/19 Q1 (cost of sales : ¥ 116 million, Selling, general and administrative expenses : ¥ 59 million). ※ EBITDA = Operating profit/loss + depreciation + amortization
Breakdown of Expenses (Cost of Sales & SGA) 9 Total expenses increased by ¥ 624 million QoQ, mainly due to advertising expenses which jumped by ¥ 483 million. Personnel Expenses Subcontract Expenses Commisiion Fee （¥ mn ） Rents Other Advertising Expenses 2,382 Key driver of advertising expenses 2,400 was TV advertising campaign for Money Forward ME *1 . 567 Business domain also accelerated 2,000 1,757 marketing efforts. 84 425 1,600 1,416 Subcontract expenses mainly 371 consisted of sales-related 106 1,188 113 113 expenses for Business domain as 125 1,029 1,200 344 114 153 well as temporary development 308 147 235 expenses for MFF 115 313 64 103 800 196 98 34 160 Considerable progress on hiring 75 143 109 both engineering and business 844 400 723 talents. 588 534 468 0 FY11/18 FY11/18 FY11/18 FY11/18 FY11/19 Q1 Q2 Q3 Q4 Q1 ※ Other Expenses include communication expenses ( ¥ 101mn), recruiting/training expenses ( ¥ 75mn), traveling and transportation expenses ( ¥ 38mn), etc. ※ 1 TV advertisement for Money Forward ME placed from December 22. 2018 to January 31, 2019.
Full-time Employee 10 10 Number of full-time employees reached 449 (+55 QoQ). Considerable progress was made in recruiting, particularly for Business domain. MFF had 33 full-time employees as of February 2019. Business Home X Finance Other Engineer/Designer Corporate （ # of people ） 500 449 450 394 57 400 55 51 350 43 64 300 241 52 26 250 23 35 55 200 44 29 10 15 150 32 100 196 177 120 50 0 11/17 End 11/18 End 2/19 End (Consolidated) (Consolidated) (Consolidated) ※ Other Engineer/Designer includes CISO Dept., CTO Dept., Account Aggregation Dept., MONEY FORWARD VIETNAM etc. Corporate includes CEO’s Office, Corporate Planning Dept., Finance Dept., Administrative Dept., Human Resource Dept., Fintech Research Office, etc.
Maintain Balance Sheet for Further Investments 11 11 Raised ¥ 6.6 billion in equity offering in December 2018. Strengthened balance sheet for future M&As and investments in our current business. Cas Cash Net et Cas Cash * To Tota tal Net et As Assets ts （¥ mn ） 12,000 10,000 8,000 6,000 10,460 8,942 4,000 6,817 4,952 2,000 3,383 1,462 0 FY11/18 FY11/19 FY11/18 FY11/19 FY11/18 FY11/19 Q4 End Q1 End Q4 End Q1 End Q4 End Q1 End * ※ Deducted amount of debt from cash amount.
Money Forward Business
Net Sales from Money Forward Business 13 13 Sto tock Sale les achie ieved re record gro growth QoQ oQ * . Flow Sales declined due to a fall in sales from events and contribution by a government subsidy program for IT implementation. Held MF Cloud Expo/ （¥ mn ）■ Stock Sales □ Flow Sales Sales expanded driven 853 833 by subsidy program for IT implementation 71 800 Klavis, a company providing 715 140 STREAMED, joined the group 74 599 15 533 600 16 477 401 60 354 400 782 30 693 272 40 641 17 584 518 416 200 371 314 255 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 FY11/17 FY11/18 FY11/19 (Consolidated) (Consolidated) (Consolidated) ※ Growth in Stock Sales in FY11/18 Q1 was partly driven by consolidation of Klavis Inc. Thus organic growth in FY11/19 Q1 is record-high. ※ Flow sales include 1) fees for implementation of services, 2) development fees from Money Forward Cloud Series for corporates, 3) seminar ticket sales (e.g. MF Cloud Expo), 4) consulting fees from Knowledge Labo, Inc. , 5) net sales of Wakufuri, Inc., and etc. ※ In past disclosure, development and maintenance charges from Money Forward Cloud Series for financial institutions were categorized in “Alliance Businesses” of “Money Forward Cloud Services”. From FY11/19 and onwards, the sales are excluded from Money Forward Business, but included in Money Forward X.
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