Heroz, Inc. · TSE:4382
Heroz — Q3 FY04/2019 Earnings Presentation
21 slides from Heroz's earnings presentation, Mar 8, 2019
Slide 1: Presentation Material for FY04/2019 Q3 Financial Results
Notice This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail. Presentation Material for FY04/2019 Q3 Financial Results
Slide 2: 1. Business Overview
1. Business Overview 2. FY04/2019 Q3 Performance 3. Growth Strategy 4. Reference Materials
Slide 3: Our Vision
Our Vision Creating the future through artificial intelligence (AI) revolutions 3
Slide 4: Global Leader in Mind Game AI
Global Leader in Mind Game AI Chess AI Shogi AI Go AI Deep Blue (’97) AI developed by our Google acquired Deep Mind defeated a human engineers defeated a (’14) being champion professional shogi AlphaGo, developed by (Japanese Chess) Deep Mind, defeated a player (’13) professional Go player (’16) IBM
Slide 5: B-to-B Services: Profit Model and High Switching Costs
B-to-B Services: Profit Model and High Switching Costs Research/develop Shogi AI Standardize AI technology accumulated through shogi AI Establish “HEROZ Kishin”=MLaaS （Machine Learning as a Service） Establish an infrastructure which allows HEROZ to provide AI services efficiently Output after machin
Slide 6: B-to-B Services: Provide Services by Replacing Shogi Game Records with Corporate Data
B-to-B Services: Provide Services by Replacing Shogi Game Records with Corporate Data Structural design data, Shogi game records financial data, etc. HEROZ Kishin Deep learning and other machine learning: MLaaS (Machine Learning as a Service) Shogi AI Construction AI, Finance AI, etc. MLaaS： What is
Slide 7: B-to-B Services: Engines included in HEROZ Kishin and Examples of Applications
B-to-B Services: Engines included in HEROZ Kishin and Examples of Applications Create AI products by combining engines and achieve an efficient operating structure Know-how on AI-related technology development and and R&D capabilities service operations (deep learning, etc.) (massive servers, etc.
Slide 8: B-to-B Services: Areas of Focus and Examples of Services Provided
B-to-B Services: Areas of Focus and Examples of Services Provided Focusing on construction, finance, and entertainment for the foreseeable future Earning structure is initial setup fee and ongoing fees *Examples of clients served Construc Fin- Enter- -tion nance tainment Creation of high-quality
Slide 9: B-to-C Services: Fees from Application Users
B-to-C Services: Fees from Application Users Charging fees for B-to-C content which user AI Leveraging AI-related technology to provide mind games such as shogi, chess, and backgammon worldwide Shogi Wars has remained cash cow backed by increasing # of paid users in Q3 Shogi Wars Animal Igo Wars
Slide 10: 2. FY04/2019 Q3 Performance
1. Business Overview 2. FY04/2019 Q3 Performance 3. Growth Strategy 4. Reference Materials
Slide 11: Our Key Performance Indicator
Our Key Performance Indicator We believe that EBITDA, as calculated below, is our key performance indicator EBITDA = Operating Profit + Depreciation/Amortization Expenses In AI-related businesses, server investments, etc. are required to engage in advanced machine learning, leading to various de
Slide 12: Performance Overview (May 2018–January 2019)
Performance Overview (May 2018–January 2019) We made steady progress towards achievement of fiscal year forecasts However, in Q4, we plan to engage in proactive efforts to standardize development tools and to step up our advertising and publicity efforts, leading to a one-time cost increase. As
Slide 13: Performance Trends
Performance Trends We forecast that revenues from AI (B-to-B) services, which is the core pillar of our growth strategy, will more than double on a year-on-year basis in FY04/2019 On the other hand, we expect revenues from AI (B-to-C) services to decrease on a year- on-year basis as full year re
Slide 14: Service Overview and Marginal Profit
Service Overview and Marginal Profit Characteristics of AI (B-to-B) and AI (B-to-C) services are summarized below Service AI（B-to-B) Services AI（B-to-C） Services B-to-B machine learning service Summary Shogi Wars, etc. HEROZ Kishin Structural Design data, financial data, Input Data Shogi game reco
Slide 15: Balance Sheet (as of January 31, 2019)
Balance Sheet (as of January 31, 2019) We expect to continue to invest cash and deposits in efforts to achieve the medium-to- long-term growth strategy (computing servers, R&D, etc.) Tangible fixed assets increased due to the purchase of computing servers for about 200 million yen totally during
Slide 16: 3. Growth Strategy
1. Business Overview 2. FY04/2019 Q3 Performance 3. Growth Strategy 4. Reference Materials
Slide 17: Medium-to-long-term Growth Strategy
Medium-to-long-term Growth Strategy B-to-B ・Net Sales ・EBITDA Provide AI services to businesses AI B-to-B (Growth Growth area market) →core operation for the medium-to-long term ￥ • Focus on partnership strategy, IP B-to-C strategy, and recruiting • Enhance competitiveness through Shogi AI, IPO inve
Slide 18: Initiatives Aimed at Achieving the Growth Strategy
Initiatives Aimed at Achieving the Growth Strategy Completed investment of about 200 million yen in proprietary computing server for machine learning by the third quarter Established the largest DGX-1 cluster environment among domestic AI start-ups Allows for R&D efforts using larger, more com
Slide 19: 4. Reference Materials
1. Business Overview 2. FY04/2019 Q3 Performance 3. Growth Strategy 4. Reference Materials
Slide 20: Company Overview
Company Overview 2018 Name HEROZ, Inc. Listed on Tokyo Stock Exchange (TSE) Mothers Capital and business alliance with Netmarble Games Corporation Location PMO Tamachi 2F, 5-31-17 Shiba, Minato-ku, Tokyo 2017 Capital and business alliances with Takenaka Corporation, Hearts Established April 2009 Uni
Slide 21: Disclaimer
Disclaimer The contents set out in this material are prepared based on generally acknowledged economic, social and other conditions, and on certain assumptions deemed rational by HEROZ, Inc. and may therefore be subject to change without prior notice due to changes in the managerial environment or f