kaizen platform inc. security code 4170
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© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Aug 13, 2021
FY 2021 Q2 Financial Results
Kaizen Platform Inc. Security Code 4170
Second Quarter of the Fiscal Year ending December 31, 2021
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Table of Contents
1
2
3 Mid and Long-Term Management Policies
FY 2021 Q2 Business Results
Company and Service Overview
2
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Company Overview
Previous company KAIZEN platform Inc. was the absorbed company and Kaizen Platform USA, Inc. became the stock company surviving an absorption-the merger. At that time, the investors of KAIZEN platform Inc. was given stock of our current company (Kaizen Platform Inc.) as part of a triangular merger. The Japanese business was transferred from Kaizen USA, Inc. to our current company Kaizen Platform Inc in July 2017.
*
KAIZEN Platform Inc.
April 2017(US Entity KAIZEN platform Inc. <prior company> created on March 2013 *)
Minato-ku, Tokyo
62(As of June 2021)
1,721,726 thousand JPY(As of June 2021)
Kenji Sudo CEO, Representative Director
Keita Umimoto COO Director
Hajime Takasaki CFO, Director
Takuya Watabe CTO, Director
Masanori Sugiyama Outside Director
Tomohide Matsuyama Outside Director(NTT Advertising Inc., Director)
Kaoru Oda Audit & Supervisory
Shigeo Goho Audit & Supervisory
Eriko Hayashi Audit & Supervisory
Kaizen Platform USA, Inc.
DX Catalyst K.K.
Company:
Incorporation Date :
Address :
Employees :
Capital:
Board of Directors:
Subsidiaries :
3
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Gathering talent from around the world through cloud to enableDX for customers
and increasing productivity with our SaaS platform
The Aim in Founding the Company
Market Environment
● The retirement rate at large Corporations in Japan is 2.4%※
- Difficult to change the human resource portfolio and to train experts
● A huge outsourcing market already exists for IT services such as contract development
DX creates hugeoutsourcing market
The Past Situation
● Full Time Employment with regulation regarding job termination makes it difficult to dismiss employees. The trend was to hire contract employees to maintain elasticity
● Office Facetime was required along with unproductive meetings decreased employee productivity
Outsourcing was not productive
in the past
The Reason Behind Founding the Company
● Provide remote work by outsourcing through our SaaS platform to create work for our digital professionals
● Avoid one-off project matching, and contract professionals across multiple complex projects simultaneously
Provide DX BPO service with SaaS combining highly
talented digital professionals
※ Source Nikkei 「Smartwork Management」Research 2018
4
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Potential loss of
JPY 12 trillion
“UX leads to DX” is a new competitive strategy in the digital age, but large companies are lagging in DX investments due to the maintenance of existing
systems and this GAP is our business opportunity
Business Opportunity in DX
UX that leads to DXis the strategy of the next era
80% of IT investments are made for existing systems
Business Opportunity = The gap between Business and IT
Department Needs
With €1 of investment in design,increase sales profit by €4, sales by €20, and export value by €5
※Source:British Design Council “Design Delivers for Business Report 2012”
€1Design
investment
+€4Operating Income
+€20Sales
+€5Export Value
Due to the shortage of engineers, about 80% of IT resource is devoted to maintenance of the current IT systems.
The biggest problem with DX in large companies is the friction between business and IT departments.
Run the Business(Maintenance/Operation)
78.8%
Increase in Value(New)
21.2%
80% of IT Budget
Value ・Up :IT investment to create new added value Run・The・BUsiness:Conservative costs for maintenance/ operation of exsisting system
DX conversion doesn’t progress after 2025, there is a possibility that Japan as a whole will lose JPY 12 trillion every year. ※Source:Ministry of Economy, Trade and Industry「DX Report」
Time
Demand from the Business
IT Resource
GAP
4x Return
5
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Changes in the environment after COVID-19 will accelerate DX needs, especially among large companies. Target markets include sales, marketing,
and customer service DX markets, and then expanding into the broader DX market.
Unit: million JPYTotal Market
IT Services Market
5.8 trillion yen
Target MarketDigital transformation market
791.2 billion yen
2030Sales・Marketing・Customer Service DX Market forecast
378 billion yen
Core Target marketSales・Marketing・
Customer service DX Market
157.9 billion yen
Sales・Marketing・Customer Service DX Market
2019 Results
2019 Results
2019 Results
※IT Services Market Size Source: IDC “Domestic IT Service Market Vendor Sales Ranking'' 2019※Digital transformation market size Source: Fuji Chimera Research Institute "2020 Digital Transformation Market Future Prospects"
Rapidly Expanding DX Market
2020(Forecast)
2021(Forecast)
2022(Forecast)
2019 2023(Forecast)
2030(Forecast)
6
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Our Key Features
Platform To Improve Client Experience by DX
1
2
3
4
5
Targeting the large outsourcing market related to DX
Enterprise-centric high-end SaaS + professional services
Avoid legacy systems, reduce lead time and costs, and promote DX
Leveraging SaaS and its data to achieve both high productivity andhigh take rate
Higher ARPU due to our adaptability during covid-19 and acceleratedDX needs associated with 5G
7
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Providing a Platform and Service to help companies promote DX
Business Summary
Full Support of the Digital
Transformation
Journey of a Corporation
Video production platform
for the 5G era
Easy to navigate
Easy to use
Assists in achieving KPIs
By improving the website UX Increase Revenue
By making videos of sales materialsIncreased
Successful negotiations
By digitizing promotional materials Increase Customer Deals
8
DX SolutionVideo SolutionUX Solution
× ×
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Transaction Structure
Service Cash Flow
Company and U.S. subsidiaries(※)
Payment of Contractor Fee
(
)
Provide Service
Payment of Service
Payment of Contractor Fee
● Site design proposal● Analysis / Consulting / Direction
UX SolutionDX Solution
Video Solution
Grow
th hacker ( Corporation ・Individual )
Client
● Creative Post ● Analytics / Consulting / Direction
※ The U.S. subsidiary provides only video solutions.※ From this fiscal year, the business segment will be changed from Site Solutions to UX/DX Solutions and from Kaizen Video to Video Solutions.
※ At KAIZEN PLATFORM, we refer to the digital specialists, such as producers and developers, as growth hackers (who are responsible for the growth of our clients' businesses ) 9
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Strengths of Our Platform
Execution Speed and Knowledge Collected SaaS, Resources, and Data are all on the platform
+ +
New UI/UX development by SaaS & provide
production environment
A vast pool of digital professionals
Improve productivity and quality using data collected
Bypass legacy systems UX optimization tool
SaaSProfessional services with over 10,000 digital professionals
ResourcesCollected performance data of over 800 companies and ample consulting experience
DATA
KaizenVideoFree SaaS solution enabling seamless video ordering, Production management, and utilization in Advertising/Website/Sales.
KaizenAdVideo advertising platform in cooperation with creative management to support SaaS
KaizenEngineJust attach one tag to your site and you can improve the UI without affecting legacy systems
KaizenSalessupport sales activities with videos tool
● More than 10,000 registered digital professionals who can work fully remotely
● Possible to animate existing materials such as catalogs, DMs, and leaflets
● Not only in Japanese and English, also Asia to Latin America multilingual support
● Production Company/Temp Agency/Consulting Services provided on our platform in partnership with more than 50 corporations
● Utilize performance data collected to assist in consulting/producing client work. Utilize data in all work flows
● Link data using API with official partner certification of major platforms such as Facebook / Instagram / Google / YouTube / Amazon. Produce High Quality Products
● Provide training courses for new grads registered as digital professionals
10
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
New System Development
Existing Foundation
improvement
New featureDevelopment
CloudUsage fee
personalize development
Log infrastructuredevelopment
personalize development
UX improvement and PoCexecution with no impact on
existing systems
Benefits from a Client Perspective
“No impact on existing websites or IT systems,”“Projects are budgeted and driven by business departments,” and
“Quick turnaround time and lower cost,” enabling DX and UX improvements.
Override Existing Systems Lead Time / CostBusiness Department Driven
Quick decision makingby the business department
Budget fromrevenue generating business
Quick turnaround time onprojects and
lower cost than market
Customer Business
Information system department
Business department
Lead time Cost
6~12months
2-3 months
Unnecessary Existing
refurbishment
In-house development
KaizenCloud
In-house development
KaizenCloud
※In-house calculation ※In-house calculation
Customer BusinessKaizen Kaizen
11
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Permanent× Full Time employee
Production/SI/Consulting
Non-permanent × Variable cost
Kaizen Platform
Permanent× Full Time employee
Production/SI/Consulting
Non-permanent × Variable cost
Kaizen Platform
Competitive Business Structure
Productivity per Person Client Price Incentive Price
Non-permanent employees are able to focus on streamlined operations and able to reduce
unproductive meetings and internal adjustments.
Able to handle 4x projects per person
By leveraging high productivity and high variable
cost ratio, price is reduced to 1/3for the same hours worked
Comparing the labor cost ratio of 28.3% by industry and our cost ratio, the difference in
compensation is about x2increases recruitment competitiveness
*TKC Management Index(BAST) from 2019 Ad Production 29.1%、Other internet services 24.4%
※ Numbers based on interviews conducted with customers and growth hackers, calculated internally
100
400
Permanent× Full Time employee
Production/SI/Consulting
Non-permanent × Variable cost
Kaizen Platform
120 120
100 100
30
56
28
1 project is 30,4 projects, 1 person can
produce 120 of Sales Revenue×4
1/3 ×2
Personnel Expense Ratio to Sales*
28%
47%**
**FY 2019 Results※ Numbers based on interviews conducted with customers and growth hackers, calculated internally
12
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
KAIZEN PLATFORM value creation mechanism
A high-profit, high-value-added business model that yields a 50% take rate by providing a one-stop shop for DX, improving BPO services through the cloud
Kaizen Platformvalue provided
Platform to connect projects and
teams
Add value to the project(4X productivity, ⅓ cost, 2X reward)
BusinessModel Saas Professional
Service
DX BPO business(Highly established and highly profitable
business structure)
RevenueModel
Gross Revenue (Gross Deal Amount) Take rate 50%**
Platform Profit
(Source of growth)
Business KPINumber of
trading accounts
ARPU
+
×
× =
* Productivity / Expense Amount / Fee Amount calculation is from P12** Take Rate =(Total Account Volume – Cost related to the Account Volume***)÷ Total Account Volume
*** Cost related to the Account Volume = Sales margin less the fixed cost related to platform development cost not related to the Account Volume 13
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Our Valued Clients
Extensive experience and proprietary data collected by working with industry leaders to improve their customer experience
14
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Our Senior Management
Kenji Sudo Representative Director
Chief Executive Officer
Joined Recruit Holdings Inc. in 2003,
Marketing Division in the
New Business Development Group.
Became the youngest Corporate
Executive Officer (at the time) in Recruit
Marketing Partners .
Founded Kaizen Platform Inc in 2013 in the US.
Author of 「Hack Thinking」「How to DX in
90 days」
Keita Umimoto Director
Chief Operating Officer
Joined Kokusai Denshin Denwa Co., Ltd.
(currently KDDI) In 2014 become the
CEO of Mediba K.K. a subsidiarity of KDDI.
Then joined JapanTaxi K.K. as Director
and CEO of IRIS K.K. Joined Kaizen Platform
in September 2018
In current position from April 2020
Hajime Takasaki Executive Director
Chief Financial Officer
Joined Recruit Holdings after graduating
university.
Joined Macromill as Senior Executive
Officer to lead strategy and finance
department.
Then became a Director and CFO at Glider
Associates before joining Kaizen Platform
in 2019.
Takuya Watabe Director
Chief Technology Officer
Joined NTT Communications in 2004.
Then joined GREE in 2010 in the Native
Game Business Department to develop
and lead the business. Then in 2014, joined
Smart News to lead and manage the
advertising product division.
Joined Kaizen Platform in 2016
Current position from April 2018
15
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Toru Sakai Executive Officer Chief Growth Officer
Joined Netage in 2006 from Softbank
Corp.Created several businesses around
digital advertising and also still serving
as the president of a group company.
Joined Kaizen Platform from the start
in 2013.
Created the Video business in 2016 and
in the current position from June 2020.
Toshimasa IshibashiExecutive Officer
Chief Culture Officer
1999 Joined Recruit Communications Co.
Engaged in web system development.
In 2007, he was a founding member of the
Media Technology Lab at Recruit Holdings.
In 2013, co-founded Kaizen Platform and
became the CTO.He has been leading
product development and building out the
engineering organization
He has been in his current position since
January 2021.
Our Senior Management
16
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Our Missions
17
We believe in the creativity of all people.
But in reality, there is constant friction that prevents it.
That is why we want to be the platform to
change the world to be frictionless and smooth.
Create a place to connect everyone with data,
unleashing their personal passions and talents in
the way of the digital age.
We will contribute to the realization of a frictionless
society where individuals and companies can
grow together by bringing together their strengths
in a virtuous cycle.
Of course, there is no end to KAIZEN.
Make the world better than yesterday
We are challengers and improvers who are not
satisfied with the status quo.
KAIZEN PLATFORM wants to be a company that
continues to improve the world by connecting workers,
services, and society.
KAIZEN the WorldA smooth way of working in the 21st century, improving the world
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Table of Contents
1
2
3 Mid and Long-Term Management Policies
FY 2021 Q2 Business Results
Company and Service Overview
18
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
FY 2021 Q2 Performance Highlight
19
Cumulative sales for the second quarter were 1.049 billion yen, up 40.8% from the same period last year.Progress was solid at 47.7%.
Operating income: 30 million yen, Ordinary income: -30 million yen, Net income: -47 million yenImpact of seasonality in sales and increased cost in system investments for business expansion. Ordinary income and net income still affected by the foreign exchange fluctuation in the first quarter. Hedging of foreign exchange risks for the third quarter and beyond has been completed
Listed on TSE Mothers on December 22, 2020. Raised 2.048 billion yen* to strengthen financial base and accelerate business development.
1
2
3
*Includes 399 million yen from the third-party over-allotment
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
FY 2021 Q2 Consolidated Results
Sales increased by 40.8% year-on-year and operating income forecast
progress rate is 19.3%,
New demand is strong, maintaining the trend of expanding business performance.
FY 2021 Q2(2021/1ー2021/6)
Full-year earnings forecast(Announced on February 12, 2021)
ActualYear-on-year
Forecast YoY changeActual YoY change
Sales 1,049 745 +40.8% 2,200 47.7%
Operating Profit 30 -62 -% 160 19.3%
Ordinary Profit -30 -50 -% 160 -%
Net Profit -47 -58 -% 160 -%
(million JPY)
20
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
FY 2021 Q2 Business Topics
Market growth is stronger than expected, and new customer acquisition remains strong Significantly enhanced recruiting in preparation for increased demand after vaccination
Easy to navigateEasy to useAssists in hitting KPIs
UX Solution
Video production platform for the 5G era
Video solution
Total Support for Corporate Digital Transformation
DX Solution
21
● Large-scale client deals ended in the retail and service sectors due to the declaration of a state of emergency, etc. The negative factors are coming to an end, and the system has been strengthened for the future recovery of demand.
● Focusing on financial services/B2B customers/High unit price B2C. Strengthening non-face-to-face channels is a key theme, and continuing to seeing strong demand
● The shift to video in EC is in full swing from the US, led by Amazon
● Video advertising continues to recover
● Released Kaizen Consulting to strengthen consulting needs that accompany the upstream process of DX
● Kaizen Sales, which supports non-face-to-face, non-contact sales approved and eligible for IT government subsidy. Full-scale start to capture the needs of small and medium-sized enterprises in collaboration with partner companies
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Performance Trends(By solution)
22
UX solution revenue
Video solution revenue
Operation Profit(loss)
DX solution revenue
Unit:JPY
31 million yen operating loss
※ 2017 results will be from July to December after inversion
Video/DX
UX
Growing beyond the normal seasonal trend.
Downselling of large customers in the retail and service sectors due to the declaration of a state of emergency, etc.
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
18,530
11,392
1,659
Expand our Services/Clients/Users
* Total Number of Clients and Users using the Platform** Total Number of Growth Hackers using the Platform
*** Number of Growth Hackers with performance data on past projects at Kaizen 23
Expanding customer base with a focus on large companies, growing both in terms of number of companies and users
Total Client Companies
Over 900Number of Users
Over 18K
Active Growth Hackers ***
Total Growth Hackers **
Total Users *
Cumulative number of clients
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Number of Trading Accounts by Business and ARPU
24
Number of trading accounts * ARPU (2Q Cumulative)Unit:Thousand JPY
Revenue (2Q Cumulative)Unit:Thousand JPY
UX/DXSolution
VideoSolution
In UX/DX, strong growth in new transaction accounts is driving business growth, and ARPU is returning. In video, ARPU grew significantly from last year, accelerating the growth rate.
58
77 8,474 8,359491,531
643,659
233 247
1,0371,419 241,696
350,585
+33% -1% +31%
+6% +37% +45%
* Number of customers recording sales within the target period (domestic business)
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Financial and Stock status
25
Increase in cash, deposits, and net assets due to the listing on TSE Mothers, strengthening the financial base. Institutional investors own 37.0%,
individual shareholders accounted for 18.6%, both up from the end of the previous fiscal year.
million JPY 2020/12 2021/6 Increase / Decrease
Cash and Deposits 2,660 3,014 353
Current Assets 2,908 3,250 341
Tangible fixed assets 4 4 0
Intangible fixed assets 323 371 48
Investment and other assets 152 129 -22
Assets 3,388 3,756 367
Short-term debt - - -
Long-term debt 250 250 -
Liabilities 534 480 -53
Net worth 2,854 3,275 420
Liability Net assets 3,388 3,756 367
Balance Sheet(Consolidated) Stock distribution(As of June 30, 2021)
21.7%
15.3%
18.6%
31.8%
12.5%
*Breakdown of individual shareholders is approximate.
Overseas institutional investors
Others(Other Corporates and Venture Capital)
Individual shareholders*(General)
Domestic institutional investors
Individual Shareholders*(Senior Mgmt & Employees)
21.7%
15.3%
18.6%
31.8%
12.5%
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Table of Contents
1
2
3 Mid and Long-Term Management Policies
FY 2021 Q2 Business Results
Company and Service Overview
26
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
DX Market Potential
A huge market with room to expand even at the current market size. The business opportunities we can capture remain large
ARPU(Annual)
Number of accounts
(Number of trading
companies)8,000
100 million JPY or more
379
20x more ARPU potential
20x or more account potential
More than 3 times market growth in next 10 years
Estimated from "2020 Digital Transformation Market Future Outlook" in 2020
Large companies - listed and unlisted companies
4.34 million JPY
27
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
As the DX market for sales, marketing, and customer service is growing rapidly due to COVID-19, it is desirable for the company to quickly realize a full-service solution
for this market for its mid to long-term growth.
Unit: million JPYTotal Market
IT Services Market
5.8 trillion yen
Target MarketDigital transformation market
791.2 billion yen
2030Sales・Marketing・Customer Service DX Market forecast
378 billion yen
Core target marketSales・Marketing・
Customer service DX Market
157.9 billion yen
Sales・Marketing・Customer Service DX Market
2019 Results
2019 Results
2019 results
※IT Services Market Size Source: IDC “Domestic IT Service Market Vendor Sales Ranking'' 2019※Digital transformation market size Source: Fuji Chimera Research Institute "2020 Digital Transformation Market Future Prospects"
Rapidly Expanding DX Market
2020(Forecast)
2021(Forecast)
2022(Forecast)
2019 2023(Forecast)
2030(Forecast)
28
© 2021 KAIZEN PLATFORM INC. All Rights Reserved. 29
Sales & Marketing Strategy in the DX Market
We consider the future growth of the DX market in the sales and marketing domain as an opportunity with our large corporate customers, the combination of
"solutions" and "business model” will enable further growth and development
Consulting
Workshop
Planning
Release
SaaS
StrategySupport
Organization Development
Management
Sales &Marketing
Attracting customers
Production Development
Contents
UI Improvement
CRM/Sales
Solution Sales
Revenue Share / JV
Turnaround / PE
© 2021 KAIZEN PLATFORM INC. All Rights Reserved. 30
Strategy Steps
STEP1
Upstream ConsultingStrengthening of functions
STEP2
Expanding the provided Capabilities of Sales & Marketing DX
STEP3
Expand our business model for increased revenue leverage
STEP 2 will be completed in three years, and STEP 3 will begin in earnest once services arein place to fully support DX.
Consulting
Workshop
Solution Sales
Revenue Share / JV
Turnaround / PE
DXUX
Video
1
2
3
Advantage Advisors Growth SupportInvestment in LLP
Support for IT introduction subsidies and Strengthen sales to business partners
Major investment inD-ZERO, Inc.
Kaizen Consultingstarts of full-scale provision
StrategySupport
Organization Development
Management
Sales &Marketing
Attracting customers
Production Development
Contents
UI Improvement
CRM/Sales
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Summary of making D-ZERO Inc. a subsidiary
31
Date of Contract July, 21, 2021
Stock Acquisition Date August, 11, 2021
Stock Acquisition Price 421million yen
Interest Acquired 70.2%
Method to Raise Funds borrow from financial institutions
Remaining shares(29.8%)
The remaining shares are subject to a call option by the Company and a put option by the holders of the remaining shares exercisable on or after July 21, 2023. In the event that the call option or put option is exercised, the Company plans to acquire the remaining 146 shares to make the company a wholly-owned subsidiary.The acquisition of shares through the exercise of the above options may be implemented through a share exchange under the Companies Act.
Impact on business results for FY,2021
The impact on the current fiscal year's business performance is currently under review. The Company plans to promptly disclose any matters that should be made public.
Kaizen Platform acquired 70.2% of the shares of "D-ZERO Inc." and became a subsidiary. They have been in business for 21 years,
and one of the largest creative team specializing in web production in the Fukuoka Prefecture
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
D-ZERO Inc
32
Company D・ZERO
Address Fukuoka-shi, Fukuoka
CEO Shusaku Yano
Incorporation date August 1, 2000
Capital 45 million yen
Net Sales 537 million yen(As of July, 2020)
Employees 54(As of April 2021)
Business Description
- Web site planning and production- Smartphone site/ Application planning and production- Mobile (feature phone) site planning and production- Campaign site/landing page planning and production- Site design, interface design and production- Facebook page and application planning and production- Planning and production of social promotions for Facebook, Twitter, etc.- Digital signage content planning and production/other digital content production- Web site operation support and education / Web site consulting- Web promotion planning and production / Web sales promotion planning and production
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Objective①:Strengthen services for UX solutions
33
The biggest reason for churn in UX solutions is the renewal of the website, which takes place every three to four years.
Strengthen our services for integrated UX solutions by making D-ZERO a subsidiary
UX SolutionKaizen Team + Kaizen Engine
Before
CancellationObtaining
Re-contracts
After
Provide consistent services from renewal to UX improvement
UX SolutionKaizen Team + Kaizen Engine
D-ZEROWebSite renewal
→ Utilize the abundant UX improvement knowledge of Kaizen Platform for renewal
Website renewal
Acquire Website renewal and continue UX solutions
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Objective②:Strengthen services for DX solutions
In order to solve upstream problems, it is important to develop services to implement 0 to 1. Strengthen our service from upstream to downstream
by utilizing D-ZERO DX's planning, production, and development capabilities
34
Before
After
Objective Method
Objective Method
Strategy Development
Strategy Development Use Video
Use Video
Kaizen VideoKaizen Sales
Kaizen VideoKaizen SalesD-ZERODX consulting
DX workshop
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Value enhancement for both companiesBoth companies will pursue synergies and strengthen their revenue structures
by providing long-term UX/DX servicesThere is almost no overlap in the customer base and huge opportunities to fill between the two companies.
35
Kaizen Platform Existing and new customers
D-ZERO Existing and new customers
RevenueStructure
Cost Structure
In the UX/DX solution includewebsite creation
to improve LTV and ARPU.
Education of growth hackers usingD-ZERO's knowledge
and strengthenrecruiting in local areas
Strengthen recurring revenue by providing UX
improvement serviceafter delivery of the website
Reduction of outsourcing costratio and improvement of variable
cost ratio in existingprojects utilizing Growth Hackers
X Solution
Site Creative
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Aim to provide full service DX solutions in the sales and marketing domain
36
Full service from upstream to downstream are required to solve customer problems
AfterBefore
Website renewalis the biggest reason for
cancellation
Correct design of upstreamprocess is
essential for DX success
From site renewal to UXimprovement to integrated
services
A comprehensive servicefrom upstream
to downstream for DX
UX Solution
DX Solution
Make the most of our uniqueness and build a profit / cost structurethat is different from existing business models
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Improving Profitability through the PlatformStrengthen profitability by creating a recurring model, provide SaaS solutions that are improved
in a data-driven manner while maintaining elasticity by changing fixed cost required for the business model of a conventional production company to variable cost
37
Overall strategy Individual strategy
Operational resources
Production Resources Distribution Experiences
AE/Consulting PM/Planner Dir Growth Hacker UI Users
SaaSDashboardSaaS Workflow
UX:Kaizen EngineAd:API integrationDX:Kaizen Sales
Matching Improving accuracy with data
① Creative PDCA
② Planning PDCA
③ Marketing PDCA
Monitoring Management Cycle by providing data
DataUser reaction data
SupportInspiration by Providing Evidence
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Structural transformation of labor-intensive businesses
Strategy to expand services that can provide business models of players such as production companies, development companies, SIers, and consultants that are capturing the growth of the DX market
Aim for 10 billion in sales within 5 years
38
Labor-intensive model business structure Our mission
You need more people in proportion to
your sales.
In Japan, people = fixed costs as the business
grows and the fixed cost increases.
Reform revenue / cost structure by building
SaaS sales that are not linked to the number of people
and improving the variable
cost ratio by further utilizing our growth hackers
Hours
Fixed fee
Number of people
Revenue
Hours
Number of people
Revenue
Fixed fee
SaaS RevenueNon-labor intensive sales
Variable costGrowth Hacker Utilization
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
FY2021 Full-year earnings forecast
For the current fiscal year, we are forecasting a 30.5% yoy increase in net sales to 2,200 million yenOperating income is expected to increase 6.8 times year on year to 160 million yen.
Full year FY 2020(ending December 2020)
Full year FY 2021(ending December 2021)
Actual Forcast YoY change
Sales 1,686 2,200 +30.5%
Operating Profit 23 160 +584.6%
Ordinary Profit 36 160 +339.1%
Net Profit 107 160 +49.0%
EBITDA 119 320 168.4%
(million JPY)
39
※We will examine the impact of M&A transactions that occurred during the period, and if disclosure is necessary, we plan to promptly disclose a revised earnings forecast.
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Future Growth Strategy
40※ A service for contract manufacturing of electronic devices such as Hon Hai
Meaning of aiming for DX version of Electronics Manufacturing Service
We will invest to strengthen our position as a platform in the rapidly growing DX market, aiming to become a DX EMS*.
Channel Strategy The Next StepsProduct/ Service Strategy
Develop DX products and increase market share while utilizing
sales resources of other companies
Expanding accounts through video production, while using that video
on websites and in sales, and increasing transaction costs through SaaS and BPO services
Responding to the evolution of customer contact DX, both digital and real evolution
of customer contact Expanding the areas where transactions are possible
ARPU ImprovementAccount Numbers Improvement ×
×
M&A
×
A rapidly expanding future market
Direct sales
Business partners
(Product Development and Supply)
New account acquisition
Up-sells
Video solution
Create videos from various materials
PDCA Video production
UX solution
Website use Responding to new trends
DX solution
Online / Offline use Support for future DX
Cross-sells
Live commerce
Renewal website production
VR/AR/MR
Call Center OMO/IoT EventsNew service
Development
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Appendix
© 2021 KAIZEN PLATFORM INC. All Rights Reserved. 41
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Website Improvement BPO=KaizenTeam
Advertising Improvement BPO=KaizenAd Premier
Sales Improvement BPO=KaizenDX Consulting
Support Sales Improvement SaaS=KaizenSales
Support Website Improvement SaaS=KaizenEngine
Support Advertising Improvement SaaS=KaizenAd
Start Client Relationship with Video SolutionThen cross-sell UX and DX solutions
Marketplace of video production and
analytics =KaizenVideo/Market
Website Improvement BPO=KaizenTeam
Advertising Improvement BPO=KaizenAd Premier
Sales Improvement BPO=KaizenDX Consulting
Support Sales Improvement SaaS=KaizenSales
Support Website Improvement SaaS=KaizenEngine
Support Advertising Improvement SaaS=KaizenAd
Marketplace of video production and
analytics =KaizenVideo/Market
Website Field UX Solutions
Sales Field Customer Acquisition Field
DX SolutionsVideo Solutions
Customer Unit Price Improvement Scenario
42
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Strategy to Capture Market Share
Efficient market development by partnering with leading companies in each industry to develop and supply products and services that meet
the DX needs of the huge sales promotion/advertising market
Kaizen Platform DX Platform
Video ad created simultaneously with flyers
DNP newspaperflyer Video ad service
Produce TV Commercial
KAIZEN TVDX strategy Joint Venture-
DX Catalyst K.K.
43
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Service OverviewDX Platform for Sales and Marketing which improves KPI for BPO
with our SaaS platform and digital professional services via a subscription model
Marketing Sales
Video solution UX solution DX solution
KaizenVideo / KaizenMarket
Marketing Marketing Inside Sales Field Sales Customer Success
KaizenSalesKaizenEngineKaizenAd
KaizenDX ConsultingKaizenTeamKaizenAd Premier
KPI for Sales &Marketing
Improvement of BPO
Impression Visits Leads Number of negotiation
Number of orders
CTR CVR Customer Acquisition Rate Order Rate Retention Rate
Visits Leads Number of negotiation
Number of orders
Number of retention
× × × × ×
=====
From 1 million JPY per Month
From 2 million JPY per Month From 2 million JPY per Month
From 80 thousand JPY 〜 2 million JPY
SaaS and Professional Service Recurring Sales
Video, Analytics and Manufacture Single Release
SaaS
Subscription
Shot
※ Pricing is the average spend per account 44
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Customer Journey One-Stop SaaS Platform
Assist in the DX journey of the client’s Sales & Marketing Strategy by outsourcing various services
I want to create Video Catalog
Advertising Department /Sales Promotion Department
I want to increase # of applications
through my Website
Marketing Professional in Business Department
I want to create a Video Catalog for my
sales pitches
Sales Planning Manager
Consulting Sales
Consulting Sales
Consulting Sales
Account Opening
KaizenVideo KaizenAd
KaizenEngine
KaizenSales
Customer Success
Director Creator
Consultant PM Director Creator
PM Dir GH Analyst CSE QA
Analytics A/B Testing Personalise
Mail Chat Remote Tablet
Want to use it for Advertising!
Use the videos for Advertising!
Use the video for Sales Marketing activities
Improve Advertising effectiveness!
Improve Website effectiveness!
Improve Sales effectiveness
45
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Our Value Proposition
We value continuous feedback on products produced by growth hackers to achieve continuous improvement on ROI with a rewarding incentive structure.
This process has received positive feedback for its effectiveness from our certified partners at Google/ Facebook/ Amazon official partners
Build, Deliver,Done
Past production/operation(Production Company/SI/Consulting)
After you make it, it’s
game on
KAIZEN PLATFORMProcess
producer Requester Consumer
①Request
②Deliver
③Utilization
④Reaction
⑥Improvement of product produced
⑤Collected Data
Growth Hacker
Requester
Consumer
①Request
②Deliver
③Utilization
④Reaction
⑧Increased Fee ⑦Result
※ We call the digital professionals, such as creators and developers, who are responsible for business growth Growth hackers at KAIZEN PLATFORM
46
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Why We are Competitive
Creatives produced are collected in their online portfolios
Visualize the strengths of each industry/ problem - based on actual data
PlanPlan
DoExecution
CheckValuation
Actimprove
ment
PDCACycle
Feedback cycle generated from collected dataCollect performance data of DX professionals through the cloud
Actual data is used for matching and training of the next case to provide positive feedback cycle to all users
Team SharingFull Remote professionals provide high productivity
and COVID19 proof through timely assignment of highly specialized personnel
Quality Improvement Collected data from past projects
across industries, problems, strengths and weaknesses develops knowledge horizontally.
×
47
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Video market in the 5G era
With the spread of 5G, content will become richer.
Changes in user behavior in the 5G era 5G handset sales forecast
① You don’t have to worry about the communication environment & capacity due to reduced costs.
② Get used to enriched content
● Reduced load from rich content● No need to worry about packet throughput
● Video utilization progresses not only online but also in real life
Significant increase to 19.82 million lines in 2025
(10,000 lines)
3825
15571930
25043000
34773707
0 74 257682
1122
1656
1982
(Year)
*All years refer to April to March
※ Nomura Research Institute, outlook on the scale and trends of the ICT / media market up to 2025
others 5G
48
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Number of trading accounts and ARPU
Accelerating the expansion of trading accounts with video as a hookFrom there we accelerated sales of UX and DX solutions through up-selling and
cross-selling.
ARPU(Annual) Unit:Thousand JPY
Number of Active Client Accounts*
* Number of customers recording sales within the target period (domestic business) 49
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Accumulation of profit by recurring model
The conversion of single-sale trading accounts to recurring sales is proceeding smoothly
One-Off sales
Recurring sales
Unit:Thousand JPY
* Total sales by revenue type within the target period(consolidated) 50
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
FY 2020 Trading Portfolio
Possible to increase ARPU by cross-selling UX, Video, and DX solutions in line with the evolution of customer DX
ARPU(Annual)
819
Number of accounts
(Number of companies
with contracts)
69.80 million JPY
ARPU for 3 solutions
15.07 million JPY
ARPU for 2 solutions
1.93 million JPY
1ARPU for 1 solution
4.34 million JPY
Increase the number of accounts by acquiring new
customers
Total # of companies with
contracts3# of Companies that use 3 solutions
54# of Companies that use 2 solutions
322# of companies that use 1
solution 379 Active companies with
contracts in 2020
Improved ARPU by cross-selling
FY 2020 ARPU
51
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Performance Trends
Unit:JPY
※ FY2017 Results are based on the period from July to December
30.908 million JPYOperating Profit
52
Sales Revenue Operating Income
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Profit and Loss(Consolidated)
Thousand JPY 2019/12 2020/12 2021/6
Sales revenue 1,354,946 1,686,361 1,049,596
Gross Profit 582,145 822,194 444,322
Selling, General and Administrative Expenses 744,430 798,824 413,413
Salary and Allowance 184,450 199,235 113,106
Outsourcing Cost 176,372 177,151 85,000
Operating Profit(Loss) (162,284) 23,369 30,908
Ordinary Profit(Loss) (150,475) 36,435 (30,628)
Profit(loss)attributable to Parent (162,646) 107,382 (47,598)
53
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Income statement(by business segment)
Thousand JPY 2019/12 2020/12 2021/6
Sales Revenue 969,579 1,112,984 643,659
Operating Profit(loss) (28,583) 111,380 2,972
Thousand JPY 2019/12 2020/12 2021/6
Sales revenue 385,367 573,376 405,937
Operating Profit(loss) (133,700) (88,010) 27,935
UX/DX Solution *
Video Solution *
From the first quarter of the current consolidated fiscal year, the name of "Site Solution Business" has been changed to "UX / DX Solution" and "Kaizen Video Business" has been changed to "Video Solution". This change is only a name change and does not affect the segment information.
*
54
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Balance Sheet(Consolidated)
Thousand JPY 2019/12 2020/12 2021/6
Cash and Cash Equivalents 930,148 2,660,345 3,014,234
Current Assets 1,145,488 2,908,598 3,250,195
Tangible Fixed Assets 7,604 4,643 4,120
Intangible Fixed Assets 211,561 323,591 371,756
Investment and other Assets 20,550 152,122 129,958
Assets 1,385,204 3,388,956 3,756,030
Short-Term Debt ― ― ―
Long-Term Debt ― 250,000 250,000
Liability 232,980 534,154 480,998
Net Worth 1,152,224 2,854,801 3,275,032
Liability Net Assets 1,385,204 3,388,956 3,756,030
55
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
Disclaimer
The information contained in this presentation is based on current economic, regulatory, market and other conditions, but the Company makes no representation or warranty as to its truthfulness, accuracy or completeness.
The information contained in this presentation is subject to change without prior notice.The statements made in this document regarding future performance are forward-looking statements.
Forward-looking statements include, but are not limited to, statements such as "believe," "plan," "strategy," "expect," "anticipate," "predict," or "may" and other similar expressions that describe future business activities, performance, events or conditions.and other similar expressions describing future business activities, performance, events or conditions.
Forward-looking statements are based on management's assumptions and beliefs in light of the information currently available to it.As such, these forward-looking statements are subject to various risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements.These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements.
Therefore, you are cautioned not to place undue reliance on forward-looking statements.Except as required by the disclosure principles, we undertake no obligation to change or revise any forward-looking statements in light of new information, future events or other findings.The Company undertakes no obligation to change or revise any forward-looking statements in light of new information, future events or other findings, except as required by the Disclosure Principles.
The information in this presentation material concerning companies other than the Company and information prepared by third parties.This presentation material contains information about companies other than the Company and information prepared by third parties, which is quoted from public information, etc. The Company has not independently verified the accuracy and appropriateness of the data, indicators, etc., and assumes no responsibility for them.
The Company has not independently verified the accuracy and appropriateness of the data and indices, etc., and assumes no responsibility whatsoever for them.
56
© 2021 KAIZEN PLATFORM INC. All Rights Reserved.
End
© 2021 KAIZEN PLATFORM INC. All Rights Reserved. 57
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