notice regarding development of medium-term business...
TRANSCRIPT
February 13, 2017
Press Release
Company Name: WirelessGate, Inc.
(Code 9419: TSE First Section)
Location: 5F Tennozu Yusen Bldg., 2-2-20
Higashi Shinagawa, Shinagawa-ku, Tokyo
Representative: Takehiro Ikeda
Founder and CEO
Inquiries: Naoki Sunaga
CIRO and Member of the Board
Corporate Officer
Head of Investor Relations Department
(Phone: 03-6433-2045)
Notice Regarding Development of
Medium-term Business Plan — Medium-term Business Plan: WirelessGate 2020 Vision—
WirelessGate, Inc. (Head Office: Shinagawa-ku, Tokyo; Founder and CEO: Takehiro Ikeda; hereinafter
“WirelessGate”), a wireless broadband service provider, is pleased to announce the development of its Medium-
term Business Plan through the fiscal year ending December 31, 2020.
1. Background for development of Medium-term Business Plan
WirelessGate changed its stock listing to the First Section of the Tokyo Stock Exchange in 2016 and was
selected as one of the 50 candidates for the 5th Corporate Value Improvement Award announced by Tokyo
Stock Exchange, Inc. The award is designed to recognize companies employing management practices
aimed at improving corporate value with a strong awareness of investor perspectives. In addition,
WirelessGate has been selected as part of the “JPX-Nikkei Mid and Small Cap Index.”
Against this backdrop, WirelessGate has been considering the need to develop the Medium-term
Business Plan. In order to present its growth strategies to all stakeholders, WirelessGate has developed the
“Medium-term Business Plan: WirelessGate 2020 Vision”.
2. Overview of Medium-term Business Plan
Period: From January 1, 2017 to December 31, 2020 (four years)
Management goals: Fiscal year ending December 31, 2020 (final fiscal year)
Sales: JPY 15.0 billion (MIN)–JPY 20.0 billion (MAX)
Operating profit: JPY 2.0 billion (MIN)–JPY 3.0 billion (MAX)
Operating profit margin: 13–15%
* For more details about the Medium-term Business Plan, please refer to the following pages.
Based on our management policy of “aiming to realize a more creative society through the provision of
wireless broadband service,” we are committed to increasing corporate value from the medium- and long-term
perspective. We aim to make a broad social contribution by carrying out business focused on creating value
through the construction of a highly independent and transparent governance structure and appropriate
collaborations with various stakeholders. We will continue to endeavor to meet your expectations, and we also
hope that you will continue to support us.
COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
Medium-term Business Plan:
WirelessGate 2020 Vision(2017–2020)
February 13, 2017
WirelessGate, Inc.(Code 9419: TSE First Section)
COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
Basic Policy for Medium-term Business Plan
Basic policy
Concentrating management resources into the growing BtoB business (wireless
business domain services) while facilitating the BtoC business, producing stable
revenue
Financial targets
Business strategy
“Aiming to realize a more creative society through the provision of wireless
broadband service”
Sales: JPY 15.0–20.0 billion (up 23–63% vs. 2016 results)
Operating profit: JPY 2.0–3.0 billion (up 60–140% vs. 2016 results)
Operating profit margin: 13–15% (2016 results: 10.2%)
Accelerating transformation of our business portfolio by positioning 2020 as the initial
stage
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Aiming to improve corporate value in the mid- to long-term while making stable
dividend payments
COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
BtoC Business Strategy (Stable Revenue Business)
External environment
Initiatives
Business strategy
• Securing cost-efficient communications bandwidth
• Ensuring diversification of communications services and peripherals
• Solid establishment of cost-efficient marketing methods
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• Expansion of Wi-Fi infrastructure
• Restructuring of communications services
• Collaboration with peripheral vendors with high affinity for communications services
• Diversification of sales channels mainly through wholesale of communications
services
• Expansion of communications bandwidth demand in line with enrichment of content
• Diversification of communications demand in line with diversification of devices
and lifestyles
• Intensification of competition due mainly to changes in sales practices of
communications services
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• Expansion of Wi-Fi infrastructure
– Expansion of wholesale agreements with Wi-Fi service providers
• Restructuring of communications services
– Restructuring of SIM business
– Review of product lines and further reinforcement of Wi-Fi networks
• Collaboration with peripheral vendors with high affinity for
communications services
– Tie-in sale such as “MAMORIO”
• Diversification of sales channels mainly through wholesale of
communications services
– Wholesale to communications operators and service providers
Details of BtoC Business Initiatives
3
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Sale of “MAMORIO”, the world’s smallest loss
prevention IoT device
Collaboration with Peripheral Vendors with High
Affinity for Communications Services
4
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BtoB Business Strategy (Growth Business)
• Development of communications environment for foreign tourists
• Provision of diverse communications services necessary for IoT solutions
• Establishment of partnership to provide various IoT solutions in one stop
External environment
Initiatives
Business strategy
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• Increase in foreign visitors to Japan including the Tokyo 2020 Olympic and
Paralympic Games
• Emergence of IoT solutions to complement a decline in labor force caused by
population decline and super-aging of the population
• Development of sustainable and free Wi-Fi environment
• Development of secure, high-speed, and large-capacity communications
infrastructure
• Promotion of business alliances including investment
COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
• Development of sustainable and free Wi-Fi
environment
– Introduction of monetization model
• Development of secure, high-speed, and large-
capacity communications infrastructure
– Application of “LTE over Wi-Fi” technology
• Promotion of business alliances including investment
– Strategic investment in companies with potential business
synergies
Details of BtoB Business Initiatives
6
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Monetization Model in Wi-Fi Infrastructure Business
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Location data-linked ad distribution
Delivering information tailored to each user based on local information by using location
information obtained through Wi-Fi connection and DSP*1/RTB*2 technologies
Example)
Connect with free Wi-Fi Data obtained through
Wi-Fi connection is analyzed Ads are delivered based
on information from Wi-Fi
(*1) DSP (Demand Side Platform)
A system for advertisers developed to facilitate the unified management of efforts such as optimizing the delivery of multiple ads and
verifying their effects
(*2) RTB (Real Time Bidding)
Each time an ad is displayed, the system analyzes information such as the users browsing the ad, the page showing the ad, and the
frequency of its display per user. As a result, bidding and delivery can be made available in an auction form only if it is deemed to be
optimal.
Ad distribution
system
COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
Secure, High-speed, and Large-capacity
Communications Infrastructure Using LTE over Wi-Fi
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Deploy LTE over various communications infrastructure by installing
agent software to node and network sides
LTE
LTE
LTE Network
Services
Agent
software
IoT devicesVarious access technologies
(e.g. Wi-Fi, Ethernet)
Secure communications
environment
Wi-Fi AP
eNodeB
softwareEnabling the development of cost-efficient
communications infrastructure
COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
Strategic Investment in Companies with Business
Synergies
Wi-Fi infrastructure business
IoT business
Cumulative investment:
Approx. JPY 2.0 billion
IoT business
• nCore
• LTE-X
• MAMORIO
• AzurePower
• Liquid
Wi-Fi infrastructure
business
• Fon Japan
• Andeco
• Tangerine
• DIGISURF
• Kansai Broadband
Main investment partners
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Illustration of Business Growth (Sales)
2016 2020
BtoCBtoC(Wireless
broadband services)
BtoB(Wireless business
domain services)
BtoB
Aiming to achieve
consolidated sales of
JPY 15.0 billion (MIN)–
JPY 20.0 billion (MAX)
10
Business growth driven by the rise of wireless business
domain services
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Illustration of Business Growth (Operating Profit)
2016 2020
BtoCBtoC
(Wireless broadband
services )
BtoB(Wireless business
domain services)
BtoB
Aiming to achieve
consolidated operating
profit of JPY 2.0 billion
(MIN)–JPY 3.0 billion
(MAX)
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Growth in profit driven by the rise of wireless business
domain services
COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
WirelessGate KPI
Wireless broadband
services
Wireless
business
domain services
No. of IDs Unit price
No. of offices Unit price
SG&A
expenses Revenue
12
No. of devices Unit price
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WirelessGate as Investment Target
Stable revenue
base
Many growth
opportunities
Improvement of
corporate value
Capital gain
Mid- to long-term
Income gain
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Mid-term Shareholder Return Policy
Flexible share buyback
+
Focus on DOE
ROE
Expansion of revenue
opportunities using
capital/business alliance
and M&AStable dividend payment
Dividend payout
ratio
Total return ratio
14
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ROE Dividend payout ratio
Shareholder Return during Cultivation and
Investment Phases
15
24.6%
40.0%
11.3%
85.7%
FY2016
DOE: 9.8%
FY2017
DOE: 9.7% (investment phase)(cultivation phase)
COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
• Shifted to a company with the audit and supervisory committee (March 2016)
- Of the three members of the Audit & Supervisory Committee, two are outside directors.
• Established the Corporate Governance Basic Policy (May 2016) in line with the application of
Corporate Governance Codes
URL:http://www.wirelessgate.co.jp/en/governance.html
Out of 73 Corporate Governance Code items
“Comply” items: 67 “Explain” items: 6
“Explain” items
• Early disclosure of convocation notice
• English translation of convocation notice
• Listing of reasons for selection of each director in convocation notice
• Development of medium-term business plan
• Disclosure of medium-term business plan
• Board of Directors evaluation
Achieving sustainable growth and improving corporate value
over the medium term
Corporate Governance
16
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Management Philosophy
“Aiming to realize a more creative society through
the provision of wireless broadband service”
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COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.
Cautionary Note Regarding Forward-Looking
Statements
The materials and information provided in this briefing contain
“forward-looking statements.” These are based on assumptions
involving current expectations, forecasts, and risks, and involve
uncertainties that may produce results that substantially differ from
statements.
These risks and uncertainties include general domestic and
international economic circumstances, such as general industrial
and market conditions and fluctuations in interest rates and foreign
exchange rates.
WirelessGate, Inc. is under no obligation to update or revise any of
the forward-looking statements included in this briefing upon the
emergence of any new information or future event.
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