IR Japan Holdings Ltd. · TSE:6035
IR Japan — FY2020 Earnings Presentation
31 slides from IR Japan's earnings presentation, May 23, 2020
Slide 1: Financial Results for the Fiscal Year Ending March 31, 2020
Financial Results For the Fiscal Year Ending March 31, 2020 （April 1, 2019～March 31, 2020） May 23, 2020 IR Japan Holdings, Ltd. (6035)
Slide 2: Disclaimer
This presentation is made by IR Japan Holdings, Ltd. (hereinafter, “the Company”) solely for the disclosure of the financial statements, and not published for the purpose of soliciting sales or purchases of securities in Japan, United States, and any other regions. In addition, the Company makes no
Slide 3: Financial Results for the Fiscal Year Ending March 2020
１．Financial Results for the Fiscal Year Ending March 2020 3
Slide 4: Financial Highlights for the Fiscal Year Ending March 2020
Financial Highlights for the Fiscal Year Ending March 2020 We achieved record high consolidated sales as well as record highs for all measures of profit during the year. Fiscal Year 2020 Previous (April 2019―March 2020) (April 2018―March 2019) Change from Amount Change Amount Previous Period (Millio
Slide 5: Trend of Quarterly Sales
Trend of Quarterly Sales 1Q 2Q 3Q 4Q (Millions of Yen) 7,682 7,000 2,584 6,000 4,827 5,000 ＋133％ 4,134 3,837 1,107 1,699 4,000 3,470 ＋2％ 923 ＋20％ 3,210 ＋2％ 909 +47% ＋31％ 3,000 887 ＋22％ 1,160 676 ＋13％ 949 1,230 ＋1％ ＋5％ 843 ＋5％ 791 801 2,000 ＋6％ 1,173 862 ＋29％ 1,111 ▲12％ ＋13％ 869 766 1,000 2,169 ＋20％
Slide 6: Trend of Quarterly Operating Profit
Trend of Quarterly Operating Profit （Millions of Yen） 4,000 1Q 2Q 3Q 4Q 3,626 3,500 3,000 1,308 2,500 ＋341％ 2,000 844 1,434 ＋207% 1,500 1,157 232 ＋87％ 296 1,010 ▲22％ 1,000 ▲25％ 158 781 ＋39％ 275 203 ＋85％ 198 550 ＋34％ 107 +161％ 303 ▲23％ 269 120 315 ▲4％ 1,242 500 125 ＋31％ 164 +353％ 152 ▲83％ 27 579 486
Slide 7: Cost Breakdown as of March 2020
Cost Breakdown as of March 2020 Investments in new offices, database systems and AI are complete. The addition of outstanding staff is progressing steadily. (Millions of Yen) Breakdown Item Current Previous Change (April 2019―March 2020) (April 2018―March 2019) Variable Costs Outsourcing 592 427 164
Slide 8: March 2020 Operating Profit Margin
March 2020 Operating Profit Margin The operating profit margin increased significantly recording an all time high. Investment in updating computer systems and AI is complete so the increase in sales led to higher profitability. Operating Profit Margin 4,000 47.2 50.0 Operating Profit（¥mln） Operating
Slide 9: March 2020 Sales by Segment
March 2020 Sales by Segment Current Previous (April 2019-March 2020) (April 2018―March 2019) Amount % of Total Change Amount (Millions of Yen) (％) (％) (Millions of Yen) IR・SR Consulting 6,974 90.8 72.1 4,052 Disclosure Consulting 522 6.8 ▲8.7 571 Database/Other 185 2.4 ▲8.7 202 9
Slide 10: Financial Highlights of Fiscal Year 2020
Financial Highlights of Fiscal Year 2020 The needs of our clients with whom we have created close ties from our SR advisory services have evolved. Demand for Investment Banking related Proxy Advisory (PA) and Financial Advisory (FA) services from these clients has shown rapid growth. While our SR Ad
Slide 11: Trend in the Number of Large-Scale Projects
Trend in the Number of Large-Scale Projects Number of Large-Scale Projects* and Trend in Sales *Projects over 50 million yen (¥mln) First Half Second Half Total Number Sales Number Sales Number Sales March 2019 5 457 2 133 7 589 March 2020 7 702 16 2,537 23 3,239 Change 2 245 14 2,405 16 2,651 Large
Slide 12: Strongly Placed for Securing Control of Firms (Proxies)
Strongly Placed for Securing Control of Firms (Proxies） Our Strengths We Boast an Overwhelming Share of Involvement in the Securing of Control of Firms (Proxies) Over 20 Years AI Track Record Winning proxy Cross-border investment contests and TOBs by & proxy analysis creating cutting-edge based on f
Slide 13: Securing Proxies During an Activist Response
Securing Proxies During an Activist Response Shareholder Composition of Company A (Based on the Shareholder Composition of Corporate Japan) 6,000 Domestic and Overseas We contact global proxy officers daily to update information Other Financial 5% US Pension IR IRJapan Japan Investors Corporations
Slide 14: Heightened Capital Risk from the Corona Pandemic
Heightened Capital Risk from the Corona Pandemic Activists are moving aggressively during the Corona pandemic The pandemic has led to a great investment opportunity for activists, damage to shareholder value has led to the increased power of collective engagement. Proposals with improved white p
Slide 15: Activist's Activity in the Japanese Market
Activist’s Activity in the Japanese Market The Trend in the Number of Activist Funds Active in Japan Western Activists 36 37 Asian Activists Domestic Activists 24 21 21 17 13 12 10 9 7 7 7 7 5 5 3 3 2 2 8 9 1 6 5 3 3 3 2014 2015 2016 2017 2018 2019 April 2020 【Definition of the Number of Funds】 Sour
Slide 16: Activists are Acting Aggressively
Activists are Acting Aggressively The number of activist funds submitting shareholder proposals in 2020 is already at record levels. Trend in the Number of Activist Funds Submitting Proposals 20 16 13 9 5 3 2 2014 2015 2016 2017 2018 2019 2020 ※as of May 25, 2020 16
Slide 17: Potential Japanese Firms with High Risk from Activists
Potential Japanese Firms with High Risk from Activists There are over 600 Japanese firms that have a high risk of being targeted by activists. ※ The number of such firms has soared over the second half. ※Firms with a Risk Quotient of over 60 as judged by IR Japan’s proprietary AI model. Firms with a
Slide 18: Western Style M&A is Still Accelerating
Western Style M&A is Still Accelerating (Hostile Bids by a Strategic Buyer) Hostile TOBs, buyouts via proxy contests by listed firms (strategic buyers) and the use of M&A to wrest control over management are now part of the investment culture. Contest for Control Kokuyo bidding for Pentel’s Shares T
Slide 19: Supporting Management Buyouts (MBO)
Supporting Management Buyouts (MBO) Based on their extensive experience in the execution of high level schemes for the creation of control structures, our specialist FA teams are gaining a reputation for their ability to aid firms de-listing by MBO. Trend in the Number of MBOs 2020: Firms De-Listing
Slide 20: Publication of the Draft Guidelines for Business Restructuring
Publication of the Draft Guidelines for Business Restructuring The Ministry of Trade, Economy and Industry released the draft Guidelines for Business Restructuring on April 20, 2020. This guideline aims to substantially reinforce the governance reforms undertaken by Japanese companies, following t
Slide 21: The Foreign Exchange and Foreign Trade Act (FEFTA)
The Foreign Exchange and Foreign Trade Act (FEFTA) In May 2020, the Ministry of Finance published the “Factors to be considered in authorities’ screening of foreign direct investment” and released the list of classifications of listed companies at the same time. It is expected that clarifying the
Slide 22: Pipeline of Large-Scale Projects In-Progress
Pipeline of Large-Scale Projects In-Progress* Type of Deal Contracted Firm Type of Contract Content TOB Listed Firm (Mkt. Cap.>¥100b) FA Hostile TOB TOB Listed Firm (Mkt. Cap.>¥100b) FA Hostile TOB Activist Response Listed Firm (Mkt. Cap.>Y500b) FA・PA SR, Shareholder Return Activist Response Listed
Slide 23: Transfer Agency Business
Transfer Agency Business The number of client companies contracted is 75, and the number of shareholders we administrate is 359,285 (as of March 31, 2020). Contrary to traditional agency’s strategy, we will continue to promote strategic business development by focusing on defending companies against
Slide 24: Forecast of Financial Results & Shareholder Return
２．Forecast of Financial Results & Shareholder Return 24
Slide 25: Forecast of Financial Results (as of May 15, 2020)
Forecast of Financial Results (as of May 15, 2020) We expect net sales to grow mainly in the core SR Advisory business and Investment Advisory businesses related to the Proxy Advisory and Financial Advisory areas. As of May 15, 2015, it is difficult to predict the extent of the impact and convergenc
Slide 26: Shareholder Return
Shareholder Return We increased the year-end dividend for FY2020 by 15 yen from the previous forecast to 45 yen per share. Including the interim dividend of 25 yen, the total annual dividend is 70 yen. For FY2021, the annual dividend is expected to be 70 yen, with an interim dividend of 25 yen per s
Slide 27: Response to Covid-19
Response to Covid-19 We are committed to preventing the spread of infection and give the highest priority to continuing business activities while ensuring the safety of all stakeholders including employees and their families, customers, and business partners. Web・ We Ensure How We Conference Safety
Slide 28: Field Power of Equity and Market Size
Field Power of Equity and Market Size SR （Shareholders Relations） M&A IR （Mergers and Acquisitions） （Investor Relations） Shareholder Support Corporate Acquisition Investor Support SR Market in the wide sense: 100 billion yen M&A Market: 600 billion yen IR Market in the wide ◆Transfer Agency ◆M&A Com
Slide 29: The Company's Long-Term Goals
The Company’s Long-Term Goals The Current SR (“Shareholder Relations”) Market (the broad market measure which includes TA (“Transfer Agency”) SR Market The Group’s current market share: 3 Billion Yen TA Market (share breakdown: 60% of SR Market narrow measure + TA Market) ＊ narrow measure (95 billio
Slide 30: Total Shareholder Return (TSR)
Total Shareholder Return (TSR) Period 9/30/2019 4/30/2020 1 Year 304.09% 524.59% 3 Years 673.90％ 1162.54％ For the Fiscal Year Ending March 2020 5 Years 1222.39％ 2108.74％ From Listing 2820.25％ 4865.20％ (3/11/2011) ※TSR: calculated as capital gain + income gain assuming the income gain is re-invested
Slide 31: Power of Equity is a registered trademark of IR Japan
We, IR Japan, are a consulting firm that provides services with high additional value based on voting power, for the development of the capital market. 「Power of Equity」 is a registered trademark of IR Japan