- Investor Relations
- Management Policy
- Medium-term Management Plan
（Note: The following is a reprint of the part of the mid-term management plan presentation by Yasushi Kobayashi, President and Representative Director, from the "Notice of Release of Transcript of Rolling Presentation of Financial Results for the Fiscal Year Ended June 30, 2023 and Mid-term Management Plan" released on August 15, 2023.）
Kobayashi: I will now explain our three-year plan for the fiscal year ending June 2024 and beyond.
First, business activities of the Company. Under the vision of an optimizing trading company that realizes a sustainable society, the Company will continue to engage in diverse business, mainly second-hand online business.
The next page shows our market perception.
The second-hand market is expanding every year. The market was said to be worth JPY3 trillion in 2022, but the market is expanding at a rate approaching JPY4 trillion by 2030.
It is also estimated that there is roughly a JPY7.6 trillion need for the sale of unwanted goods within a year. As for hidden assets, assets lying at home, it is said that there is a huge market of JPY44 trillion. It is also estimated that 65% of hidden assets are held by seniors in their 50s and older.
Here is a breakdown of personal financial assets by generation.
In 2020, 68.5% of total personal financial assets is held by the population aged 60 and over, and 83.8% of that is held by the population aged 50 and over. The composition ratio has changed dramatically. As a demographic trend, we believe that Japan's population is declining and the second-hand market is growing year by year, while at the same time, asset holdings is facing a turning point.
The next page shows the data on the decline in the agricultural population.
The domestic agricultural working population has been declining year by year, and the key agricultural workers has decreased from 1.75 million in 2015 to 1.16 million in the most recent data.
In addition, with the decline in the farming population, the number of people leaving farming and quitting farming is increasing greatly.
The average age of farmers is now 67.9 years old, and in such an environment, the need to dispose of used farm equipment will continue to arise.
The next page shows the strategy of our entire group.
Once again, it is said that the population will go from 120 million to less than 90 million by 2060 in Japan. In this context, a very large number of second-hand products are expected to come out of their homes as hidden assets. In addition, the JPY44 trillion mentioned earlier is the hidden assets lying at home and does not include data such as cars, books, and agricultural equipment. Therefore, more and more things are coming out to the world in the future.
Against this background, we would like to propose sustainable and optimal consumption behavior.
In addition, we have been engaged in the second-hand online business through the Internet since our establishment, and we would like to expand a diversified business based on digital technology in order to realize a sustainable society. In the domain of optimization business x DX, we hope to realize an optimization trading company that realizes a sustainable society.
The next page shows the sales plan by segment for the fiscal year ending June 2024.
We will continue to maintain our plan to increase revenues in all segments, but we have made some revisions to the sales figures for each of these segments. Sales of overall second-hand online business is expected to grow 45.4% YoY, with the growth of second-hand service for individuals 46.4%, machinery 42.6%, and Oikura business 41.2%.
The sales of the mobile business was revised as you can see based on the strong performance. We expect to maintain the plan for total consolidated sales of JPY20 billion, a 31.1% increase over the previous year.
The next page shows consolidated earnings forecast.
Sales are at the same level of JPY20 billion, but we have revised operating income plan to JPY800 million. This is because upfront cost will incur in Q1 to open two new locations, in Minami Osaka and Hiroshima, and to expand the contact center in Q1 to the first half of Q2.
The ordinary income and profits below it are forecasted based on the assumption that the share price level is equivalent to that of the fiscal year ending June 2023.
As a result, we expect sales to increase by 31.1%, gross profit by 46%, and operating income by 745.3%.
The next page shows a summary of the strategies in the previously announced medium-term management plan and current status we recognize.
The overall policy is to re-expand the second-hand service for individuals and expand and monetize the machinery business in second-hand online business. In the media business, we will maintain a highly profitable structure and achieve growth in excess of market levels. In the mobile and telecommunications business, we will build the recurring-revenue type earnings base by expanding existing subscription.
As our initial strategy, in second-hand service for individuals, we have been aiming to strengthen on-site purchasing to reach out to potential customers. In machinery business, we have been aiming to expand overseas exports and domestic corporate trading functions that were acquired through M&A and to improve profitability by PMI. As for the current situation, in the second-hand service for individuals, the biggest issues are delays in progress caused by shortfall of the number of active buyers against the plan, and the expansion of the number of active buyers. In the machinery business, although PMI was delayed, the scale of the business expanded as expected, and in Q4, the business successfully improved its structure to achieve profitability and is expected to be profitable in the future.
In the media business, as initial strategy, we have been expanding new fields to diversify and stabilize our revenue base, which had been dependent on the telecommunications field. As for current situation, media in fields other than telecommunications have also successfully been launched, diversifying our revenue base, and resulting in steady growth in both sales and profits.
In the mobile and telecommunications business, initial strategy was to increase the number of existing subscriptions to build a recurring-revenue type earnings base. As for current situation, with easy-to-understand, simple, and low-cost as differentiating factors, the number of existing subscriptions grew steadily. Also, sales, profits, and future earnings have exceeded expectations.
The next page shows the reason for the difference between the initial medium-term management plan and the plan for the fiscal year ending June 2024 we announced this time.
In the second-hand service for individuals in the second-hand online business, the impact on operating income is a decline of JPY200 million due to a shortfall in the number of active buyers against the plan at the beginning of the period. In addition, additional investment of JPY150 million is to be made in Minami Osaka location, Hiroshima location, as well as in expansion of contact center in the second-hand service for individuals. In mobile and telecommunications business, an outperformance of the number of existing subscriptions and the number of new subscriptions acquired against the plan had a positive impact on operating income of JPY100 million. On company-wide basis, the relocation of the head office due to the reconstruction of the building where current head office is in will occur in the latter half of Q3 to Q4, which will have negative impact on operating income of JPY100 million. As a result, a decline of total of JPY350 million is expected.
The next page shows a three-year plan that begins with the fiscal year ending June 2024.
Following the strategy in the previously announced medium-term plan, we aim to achieve sales of JPY30 billion and operating income of JPY2 billion in the fiscal year ending June 2026 by making up for the delay in the fiscal year ending June 2023 and by continuing to invest.
The next page shows the transition of results since listing and the plan for the next three years.
Starting with net sales of JPY15.2 billion and operating income of JPY94 million in the fiscal year ending June 2023, our plan for next three years is as follows: net sales of JPY20 billion and operating income of JPY800 million in the fiscal year ending June 2024(*); net sales of JPY25 billion and operating income of JPY1.3 billion in the fiscal year ending June 2025; and net sales of JPY30 billion and operating income of JPY2 billion in the fiscal year ending June 2026. We would like to proceed with the plan with further growth and improvement in operating income margin.
*On February 14, 2024, we announced a revision to our full-year forecast for the fiscal year ending June 2024, revising our forecast to JPY18 billion in net sales and JPY100 million in operating income.
Kobayashi: I will now explain our three-year plan for the fiscal year ending June 2024 and beyond.
First, business activities of the Company. Under the vision of an optimizing trading company that realizes a sustainable society, the Company will continue to engage in diverse business, mainly second-hand online business.
The second-hand market is expanding every year. The market was said to be worth JPY3 trillion in 2022, but the market is expanding at a rate approaching JPY4 trillion by 2030.
It is also estimated that there is roughly a JPY7.6 trillion need for the sale of unwanted goods within a year. As for hidden assets, assets lying at home, it is said that there is a huge market of JPY44 trillion. It is also estimated that 65% of hidden assets are held by seniors in their 50s and older.
Here is a breakdown of personal financial assets by generation.
In 2020, 68.5% of total personal financial assets is held by the population aged 60 and over, and 83.8% of that is held by the population aged 50 and over. The composition ratio has changed dramatically. As a demographic trend, we believe that Japan's population is declining and the second-hand market is growing year by year, while at the same time, asset holdings is facing a turning point.
The next page shows the data on the decline in the agricultural population.
The domestic agricultural working population has been declining year by year, and the key agricultural workers has decreased from 1.75 million in 2015 to 1.16 million in the most recent data.
In addition, with the decline in the farming population, the number of people leaving farming and quitting farming is increasing greatly.
The average age of farmers is now 67.9 years old, and in such an environment, the need to dispose of used farm equipment will continue to arise.
The next page shows the strategy of our entire group.
Once again, it is said that the population will go from 120 million to less than 90 million by 2060 in Japan. In this context, a very large number of second-hand products are expected to come out of their homes as hidden assets. In addition, the JPY44 trillion mentioned earlier is the hidden assets lying at home and does not include data such as cars, books, and agricultural equipment. Therefore, more and more things are coming out to the world in the future.
Against this background, we would like to propose sustainable and optimal consumption behavior.
In addition, we have been engaged in the second-hand online business through the Internet since our establishment, and we would like to expand a diversified business based on digital technology in order to realize a sustainable society. In the domain of optimization business x DX, we hope to realize an optimization trading company that realizes a sustainable society.
The next page shows the sales plan by segment for the fiscal year ending June 2024.
We will continue to maintain our plan to increase revenues in all segments, but we have made some revisions to the sales figures for each of these segments. Sales of overall second-hand online business is expected to grow 45.4% YoY, with the growth of second-hand service for individuals 46.4%, machinery 42.6%, and Oikura business 41.2%.
The sales of the mobile business was revised as you can see based on the strong performance. We expect to maintain the plan for total consolidated sales of JPY20 billion, a 31.1% increase over the previous year.
The next page shows consolidated earnings forecast.
Sales are at the same level of JPY20 billion, but we have revised operating income plan to JPY800 million. This is because upfront cost will incur in Q1 to open two new locations, in Minami Osaka and Hiroshima, and to expand the contact center in Q1 to the first half of Q2.
The ordinary income and profits below it are forecasted based on the assumption that the share price level is equivalent to that of the fiscal year ending June 2023.
As a result, we expect sales to increase by 31.1%, gross profit by 46%, and operating income by 745.3%.
The next page shows a summary of the strategies in the previously announced medium-term management plan and current status we recognize.
The overall policy is to re-expand the second-hand service for individuals and expand and monetize the machinery business in second-hand online business. In the media business, we will maintain a highly profitable structure and achieve growth in excess of market levels. In the mobile and telecommunications business, we will build the recurring-revenue type earnings base by expanding existing subscription.
As our initial strategy, in second-hand service for individuals, we have been aiming to strengthen on-site purchasing to reach out to potential customers. In machinery business, we have been aiming to expand overseas exports and domestic corporate trading functions that were acquired through M&A and to improve profitability by PMI. As for the current situation, in the second-hand service for individuals, the biggest issues are delays in progress caused by shortfall of the number of active buyers against the plan, and the expansion of the number of active buyers. In the machinery business, although PMI was delayed, the scale of the business expanded as expected, and in Q4, the business successfully improved its structure to achieve profitability and is expected to be profitable in the future.
In the media business, as initial strategy, we have been expanding new fields to diversify and stabilize our revenue base, which had been dependent on the telecommunications field. As for current situation, media in fields other than telecommunications have also successfully been launched, diversifying our revenue base, and resulting in steady growth in both sales and profits.
In the mobile and telecommunications business, initial strategy was to increase the number of existing subscriptions to build a recurring-revenue type earnings base. As for current situation, with easy-to-understand, simple, and low-cost as differentiating factors, the number of existing subscriptions grew steadily. Also, sales, profits, and future earnings have exceeded expectations.
The next page shows the reason for the difference between the initial medium-term management plan and the plan for the fiscal year ending June 2024 we announced this time.
In the second-hand service for individuals in the second-hand online business, the impact on operating income is a decline of JPY200 million due to a shortfall in the number of active buyers against the plan at the beginning of the period. In addition, additional investment of JPY150 million is to be made in Minami Osaka location, Hiroshima location, as well as in expansion of contact center in the second-hand service for individuals. In mobile and telecommunications business, an outperformance of the number of existing subscriptions and the number of new subscriptions acquired against the plan had a positive impact on operating income of JPY100 million. On company-wide basis, the relocation of the head office due to the reconstruction of the building where current head office is in will occur in the latter half of Q3 to Q4, which will have negative impact on operating income of JPY100 million. As a result, a decline of total of JPY350 million is expected.
The next page shows a three-year plan that begins with the fiscal year ending June 2024.
Following the strategy in the previously announced medium-term plan, we aim to achieve sales of JPY30 billion and operating income of JPY2 billion in the fiscal year ending June 2026 by making up for the delay in the fiscal year ending June 2023 and by continuing to invest.
The next page shows the transition of results since listing and the plan for the next three years.
Starting with net sales of JPY15.2 billion and operating income of JPY94 million in the fiscal year ending June 2023, our plan for next three years is as follows: net sales of JPY20 billion and operating income of JPY800 million in the fiscal year ending June 2024(*); net sales of JPY25 billion and operating income of JPY1.3 billion in the fiscal year ending June 2025; and net sales of JPY30 billion and operating income of JPY2 billion in the fiscal year ending June 2026. We would like to proceed with the plan with further growth and improvement in operating income margin.
*On February 14, 2024, we announced a revision to our full-year forecast for the fiscal year ending June 2024, revising our forecast to JPY18 billion in net sales and JPY100 million in operating income.
