First Quarter of the Fiscal Year Ending June 30, 2021 (FY2021)

Results of Operations
Explanatory Material

November 9, 2020
HOPE, INC.
[6195]

Corporate Philosophy

Providing new value to citizens
through local governments,

and promoting growth of the company
and its people

Copyright (C) 2020 HOPE, INC.

02

Company Overview
Company name

HOPE, INC.

EstablishedFeb. 2005 (fiscal year-end: Jun.)

Representative

Takayasu Tokitsu, CEO

Securities code

6195 (listed on the TSE-Mothers/FSE Q-Board on Jun. 15, 2016)

Employees

167 (as of the end of Sep. 2020, including temporary employees)

Business

Services created specifically for local governments

Head office

MG Yakuin Building 1-14-5, Yakuin, Chuo-ku, Fukuoka, Japan

History

Feb. 2005 Founded(Advertising Business, Energy Business, Media Business)

Jun. 2006 Launched SMART RESOURCE SERVICE
Sep. 2013 Launched SMART CREATION SERVICE“Machilet”
Jul. 2014

Launched “Machiiro,” an app that connects
local governments and local residents

Aug. 2014 Started B-to-G marketing business
Jun. 2016 Listed on TSE-Mothers and FSE Q-Board

Copyright (C) 2020 HOPE, INC.

Dec. 2017 Issued the first edition of“Jichitai Works”
Mar. 2018 Registered as an electricity retailer
and launched “GENEWAT”
May 2020 Started Jichitai Works HAxSH
Aug. 2020 Announced the medium-term
management plan [HOPE NEXT 3]
Oct. 2020 Established a subsidiary
HOPE ENERGY, INC.

03

Contents

I.

1Q FY2021 Financial Highlights

II. Topics
III. FY2021 Outlook
IV. Growth Strategies
V. 2020 VISION
VI. Appendices
Copyright (C) 2020 HOPE, INC.

04

I. 1Q FY2021 Financial Highlights

Application of the netting method in the energy business•Unless specified otherwise, all figures in this presentation use the netting method* that is expected to be used due to the application of the Accounting Standard for Revenue Recognition (AccountingStandards Board of Japan Statement No. 29).
•The use of this standard is required beginning with the fiscal year ending in June 2022. However, because the performance of the energy business, which is a major component of consolidated results ofoperations, has a significant effect on investment decisions, figures in this presentation use the netting method to facilitate easy comparisons with performance in prior years.
•The application of the netting method will have no effect on earnings at all levels.
•More information is in the November 9, 2020 news release titled “Notice of Revisions to First Half Forecasts” (Japanese version only).
*With the netting method, in accordance with the renewable energy feed-in tariff system in Japan, fees received from customers (sales) and payments to the cost adjustment organization (cost of sales),which are equal to fees received, offset each other, resulting in the recognition of net revenue. Figures that do not use netting are designated in this presentation as using the gross recognition method.

Copyright (C) 2020 HOPE, INC.

05

Impact of COVID-19• The impact of COVID-19 is negligible and there are no significant problems concerning thecontinuation of business operations.

Responses to COVID-19
Started a COVID-19 ResponseTeam

Established a teleworking
infrastructure

Online activities and nooutings for business

Monitors health of employees and makes
preparations for responses to outbreaks.

Created an environment that facilitates
teleworking for a broad range of tasks.

As a rule, the internet is used for all
meetings with people outside thecompany.

Effect on business operations
Advertising/Media BusinessNo significant effect at this time, but some companies may start to reduce their advertising activities. There is also a risk that
financial difficulties at advertisers may delay payments for some receivables or make it impossible to collect some receivables.

Energy BusinessThis business sells electricity to facilities operated by local governments. There may be declines in sales and the cost of sales,
although not substantial, resulting from a smaller amount of electricity purchased for elementary schools and other schools thatare closed because of the COVID-19 crisis.

Copyright (C) 2020 HOPE, INC.

06

1Q FY2021 Financial Summary (July – September 2020)

1Q FY2021
Results

Sales were up 263.4% from one year earlier to an all-timequarterly high. Record-high first quarter earnings■Net sales ¥ 6,052 million (up 263.4% YoY)
〈Gross recognition method: ¥7,167million〉■Operating profit ¥ 686 million (¥(56)million in 1Q FY2020)

Advertising Business

Energy Business

Sales down due to measures toachieve the proper size of thisbusiness but segment profit
improved

Strong performance because
procurement expenses wereless than expected■Net sales■Net sales

Media Business
Sales and earnings growth dueto the new Jichitai Works format
and increase in B-to-G marketingorders¥ 298 million (down 22.8% YoY)

¥5,721■ Net sales〈Gross recognition method: ¥6,837 million〉¥ 32 million (up 122.9% YoY)

■Segment profit■Segment profit■ Segment profit¥(2) million (¥(4)million in 1Q FY2020)

million (up 352.7% YoY)¥762 million (¥19million in 1Q FY2020)¥5 million (¥(2)million in 1Q FY2020)*Numbers are rounded down and percentages are rounded up or down to the first decimal place.

Copyright (C) 2020 HOPE, INC.

07

1Q FY2021 Income Statement Highlights
1Q FY2020(Millions of yen)

Results

1Q FY2021
Comp.

Results

Comp.

Net sales

1,665

Gross profit

167

10.0％

921

15.2％

+451.5%

SG&A
expenses

223

13.4%

234

3.9％

+4.9%

Operatingprofit(56)(3.4)%

686

11.3%

Ordinary
profit(55)(3.3)%

676

11.2%

Profit(61)(3.7)%

483

8.0%

Net income
per share

6,052

YoY change〈1,897〉(10.96) yen* Adjusted to reflect the
1-to-4 stock split effective
on January 1, 2020

+263.4%〈7,167〉〈+277.7%〉

80.87yen* 〈 〉 is figures using the gross recognition method. *1Q FY2020 figures are the revised figures announced on May 13, 2020.

Copyright (C) 2020 HOPE, INC.

08

Quarterly Sales• Due to the growth of the energy business,quarterly sales increased 263.4% YoY to an all-time quarterly high.

Up
263.4%
YoY

6,052

Others6,000〈7,167〉

5,445Media Business〈6,325〉

Energy Business(Millions of yen)

5,000

32

80

Advertising Business

4,000

2,019

〈2,208〉

420

〈420〉

6
17〈17〉
396

1Q

556

658

〈560〉

〈672〉

11
39〈44〉

1,665

15

23

4,622

〈5,503〉

5,721〈6,837〉〈1,897〉

54

2,000

0

〈3,249〉〈2,934〉

3,000

1,000

2,808

2,551

1,055

〈1,244〉

14

2,352

2,100

〈2,793〉

386

426

431

1Q

2Q

3Q

1,263

〈2,483〉〈1,496〉505

30
91〈106〉
535

909

2Q

3Q

4Q

FY2019FY2020

742

4Q

298

1Q

FY2021* 〈 〉 is figures using the gross recognition method.

Copyright (C) 2020 HOPE, INC.

09

Quarterly Operating Profit• Record-high quarterly earnings in the first quarter because of energy business growth.
• Corporate expenses were about the same as in 1Q FY2020.
1,200

Adjustments (corporate expenses)
1,000

OthersMedia Business

800(Millions of yen)

42

5Energy Business

808

Advertising Business

600

400

(200)

762

105

200

0

937

23

2
(43)
(7)
(5)
(68)

1Q

(124)

(11)

0

(7)
(7)

43

(100)

(66)

295

(19)

3Q

19

(87)

4Q

(4)

149

2

(2)

(74)

2Q

332

(56)

79
13

16

51

(3)

(66)

(76)

(74)

1Q

2Q

3Q

FY2019FY2020

122

686

245

(151)

4Q

(2)
(68)

1Q

FY2021*Standards for the allocation of corporate expenses were revised to more accurately show segment earnings. As a result, segment earnings and corporate expenses have changed beginningwith 1Q FY2020. The changes were not applied to FY2019 because the effect is negligible. The new standards have no effect on total earnings.

Copyright (C) 2020 HOPE, INC.

10

Advertising Business

Sales by Segment• Sales continued to decline due to measures to achieve the proper size of this businessin order to become more profitable.
909

Others900

SMART CREATION SERVICE

800

82

742

SMART RESOURCE SERVICE(Millions of yen)

700

94

600
500
400

535

505

396
33

38

60

89

52

386

12

73

300
200

17

350

407

391

Down
22.8%
YoY

482

431

426

394

42

95

298

82

37

66
3

345

295

293

305

1Q

2Q

3Q

100

254

228

4Q

1Q

0

1Q

2Q

3Q

4Q

FY2019FY2020

Copyright (C) 2020 HOPE, INC.

FY202111

Energy Business

Sales by Segment• There were 177 winning bids in the first quarter.
Services for most of these contracts started in October.

Up
352.7%
YoY

6,000(Millions of yen)

5,000

4,000

5,721

3,000

4,622
〈5,503〉

2,000

2,352

2,100

1,000

17
0

〈6,837〉

91

39

1,055

1,263

〈17〉

〈44〉

〈106〉

〈1,244〉〈1,496〉

1Q

2Q

3Q

4Q

1Q

FY2019〈2,483〉〈2,793〉

2Q

3Q

FY20204Q

1Q

FY2021* 〈 〉 is figures using the gross recognition method.

Copyright (C) 2020 HOPE, INC.

12

Media Business

Sales by Segment• The new Jichitai Works format is continuing to produce benefits; plan to strengthenbranding activities.
• Received orders from companies that conduct marketing activities when local governments
are determining their new budgets.
80
70(Millions of yen)60

Up
122.9%
YoY

50
40

80

30

54

20
10
0

32

30
6
1Q

14

11
2Q

3Q

4Q

1Q

FY2019

23

15

2Q

3Q

4Q

FY20201Q

FY2021*The first issue of Jichitai Works magazine was December 22, 2017 and the magazine’s new design and format started in June 2020.

Copyright (C) 2020 HOPE, INC.

13

1Q FY2021 Balance Sheet Highlights
1Q FY2020

Results

Comp.

Results

Cash and deposits

402

15.1%

2,154

30.2%

+1,752

Accounts
receivable - trade

880

33.1%

3,663

51.3%

+2,782Inventories

468

17.6%

363

5.1%

(104)

1,874

70.4%

6,385

89.4%

+4,510

786

29.6%

753

10.6%

(33)

2,660

100.0%

7,138

100.0%+4,477

Accounts payable - trade

1,235

46.4%

3,400

47.6%

+2,165

Short-term borrowings

483

18.2%

433

6.1%

(50)

Current portion of
long-term borrowings

79

3.0%

386

5.4%

+306

1,977

74.3%

4,768

66.8%

+2,791

ー

ー

100

1.4%

+100

Long-term borrowings

216

8.1%

607

8.5%

+391

Non-current liabilities

216

8.1%

707

9.9%

+491

Total liabilities

2,193

82.5%

5,476

76.7%

+3,282

Total net assets

466

17.5%

1,661

23.3%

+1,194

Total liabilities
and net assets

2,660

100.0%

7,138

100.0%+4,477(Millions of yen)
Increase due tomore local govt.
receivables,
which haveminimal credit
risk

Current assets
Non-current assets
Total assets

Funds procured
for the growthof working
capital andother reasons

1Q FY2021

Current liabilities
Bonds payable

Copyright (C) 2020 HOPE, INC.

Comp.

Change14

Financial Highlights• The improvement from last year’s loss to a first quarter profit increased operating cash flows.
• There was also a big improvement in first quarter EPS.
1

Improvement in operating cash flows
1Q FY2020

1Q FY2021

ChangeOperating cash flows

(347)

1,005

＋1,352

Investing cash flows

(1)

(2)

(0)

Financing cash flows

256

(149)

(405)

(Millions of yen)

The profitability ofbusiness operations
has made a larger than
expected contribution
to operating cash flows,which has improved
liquidity*These cash flow figures have not been audited because there is no requirement to prepare a first quarter statement of cash flows.

2

Improvement in earnings per share
1Q FY2020(10.96) yen

1Q FY2021* Adjusted to reflect the 1-to-4 stock split effective on January 1, 2020

Copyright (C) 2020 HOPE, INC.

80.87 yen15

II. Topics

Copyright (C) 2020 HOPE, INC.

16

Topics 1. Establishment of HOPE ENERGY, INC.

• Established subsidiary HOPE ENERGY.

1

More speed and flexibility

Useful for creating new energy-related services
and other activities

2

Clean energy activities
Plan to stimulate clean energy demandat local governments nationwide

3《Helping achieve the SDGs》

Increase the use of technologies

Use AI for market price and demand forecasts/analysis and for R&D activities

The first step toward accomplishing the goals of the HOPE NEXT 3 medium-term management plan
Aiming for the medium to long-term creation of added value
See next page▶
(Reference) More information is in the September 14, 2020 news release titled “Notice of Establishment of Subsidiary”(Japanese version only).
https://ssl4.eir-parts.net/doc/6195/tdnet/1882983/00.pdf

Copyright (C) 2020 HOPE, INC.

17

Topics 2. TATERU alliance for joint development of AI electricity price forecasting• Joint development of AI for greater accuracy of electricity cost and market price forecasts.
Industry-university
partnership(The University of Tokyo)•Price data and expertise of the energy businessJointdevelopment
Forecasting purchasing andselling prices of electricity•Expertise for AI and using the IoT for real estate
management•Management•Operations■ Forecasting allows offering suitable electricity rates to local governments■ More accurate cost and market price forecasts raise the accuracy of earnings forecasts too(Reference) More information is in the November 5, 2020 news release titled “HOPE, INC. and TATERU to jointly develop an electricity market priceforecasting AI” (Japanese version only).https://ssl4.eir-parts.net/doc/6195/tdnet/1898274/00.pdf

Copyright (C) 2020 HOPE, INC.

18

III. FY2021 Outlook

Copyright (C) 2020 HOPE, INC.

19

FY2021 Plan (Income Statement)
FY2019FY2020Results

Results

Plan

YoY change

Net sales

3,654

12,47025,300+102.9％Gross profit

1,039

2,261

SG&A
expenses

952

1,240

Operatingprofit87

Ordinary
profitProfit(Millions of yen)

Net income
per share〈3,862〉

FY2021〈14,407〉〈29,900〉〈+107.5%〉

1,020

1,250〜1,750+22.5％〜71.5％

95

1,012

1,230〜1,730+21.5％〜70.9％

75

665

830〜1,170+24.8％ 〜75.9％

13.55 yen*

117.97 yen*

138.85〜195.72 yen* HOPE, INC. has revised the first half sales forecast. More information is in the November 9, 2020 news release titled “Notice of Revisions to First Half Forecasts”(Japanese version only). *〈 〉is figures using the gross recognition method. *Net income per share is adjusted to reflect the 1-to-4 stock split effective on January 1, 2020.

Copyright (C) 2020 HOPE, INC.

20

Consistent Sales Growth(Millions of yen)

30,00025,300〈29,900〉
25,00020,00012,47015,000〈14,407〉

10,0003,654〈3,862〉

512

8

9
FY
20
0

FY
20
10

FY
20
11

FY
20
12

87

695

635

FY
20
14

331

FY
20
13

142

198

FY
20
0

5,000

1,592

1,142

1,774

2,269

*FY2014 was an irregular nine-month period because of a change in fiscal year-end.

F（ Y2
Pl 0 2
an 1
）

FY
20
20

FY
20
19

FY
20
18

FY
20
17

FY
20
15

FY
20
16

0

*〈 〉is figures using the gross recognition method

Copyright (C) 2020 HOPE, INC.

21

FY2021 Business Segment Sales Plan
(Billions of yen)

30

Media Business
Energy BusinessApprox. ¥ 25.3 billion

Advertising Business〈29.9〉

Approx. ¥0.18 billion

25

20

15

Approx. ¥ 12.5 billion〈14.4〉

Approx. ¥0.13 billion

Approx. ¥23.45 billion〈28.05〉

10
Approx. ¥10.34 billion〈12.27〉

50*〈

Approx. ¥1.99 billion

Approx. ¥1.66 billion

FY2020

FY2021〉is figures using the gross recognition method.

Copyright (C) 2020 HOPE, INC.

22

IV. Growth Strategies

Copyright (C) 2020 HOPE, INC.

23

Business Development and Growth Phases

Business creation
0-1 creation

LaunchGrowth1-10 trial and error

Maturity

10-100 expansion

100-110 profit creation

Decline110- seek new innovations

Advertising
Business

Energy Business▲Media Business

Earnings

Time▶

Copyright (C) 2020 HOPE, INC.

24

Advertising Business

Market Summary• HOPE, INC created a new market with its advertising business, the company’s originalactivity, and has provided advertising services to local governments for about 15 years.
• HOPE, INC’s share of this market is about 12.8%.
The advertising market in Japan

Approx. ¥5.9 trillion *1
The local government advertising market

Approx. ¥14.0 billion *2
Approx. ¥1.8 billion *3

Target market
About 12.8% of thetarget market*1 Source: Survey of Selected Service Industries (July 2020), Ministry of Economy, Trade and Industry*2 Estimate of target market size assuming that all local governments used advertising services*3 FY2020 advertising business sales (excluding contract production of public info publications

Copyright (C) 2020 HOPE, INC.

25

Advertising Business

FY2021 Policy• Continuing to achieve the proper size of this business to make advertising a profit-generating
business.
• Gross profit per medium is decreasing, but the goal is to use SG&A expenses more efficiently.
■ Gross profit
per medium(Millions of yen)
2,500

2,000

(Millions of yen)

Approx.
¥0.55 million●

Approx.
¥0.43 million

Approx.
¥0.51 million

●

●

0.6

●
Approx.
¥0.53 million

0.4

●

1,500

Approx.
¥0.37 million
1,000

0.5

●

0.3

Approx.
¥0.3 million

0.2

500

0.1

Net sales*
Gross profit per medium

00FY2016FY2017FY2018FY2019FY2020

FY2021*Advertising business sales (excluding contract production of public information publications)

Copyright (C) 2020 HOPE, INC.

26

Business Strategy [HOPE NEXT 3]Advertising Business• Achieve
the proper size人員)による収益性改善を継続
of this business (sales, people) ➡
to continue
improving profitability ➡
規模適正化(売上高、利益創出事業へ
Make advertising a profit-generating business
さらに、業績が4Qに偏重する傾向を中期的に緩和し、�
• Over a medium term, reduce the tendency for the 4Q to account for most sales and earnings,
事業全体におけるコスト効率化と受注単価の向上を図る
use expenses more efficiently, and increase the unit price of individual orders in this business●●(Millions of yen)

2,500(Millions of yen)

Net sales
Segment profit

2,215

2,347
1,987

2,000

1,581

1,727

450

Temporaryslowdown due tomeasures to evenout sales/earnings
throughout the FY

Approx. 1,900

1,661

1,500

350

319 *
1,000

400

20.2%

Segment profit margin

314
284

283*
16.4%

500

247

15.8%

12.1%

300

282
17.0%

11.2%

Further raise profitability
through cost efficiency
and higher unit price oforders

250

200

0

FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

FY2023*FY2016 and FY2017 segment profit are provisional figures using the same basis as for the current segment profit because no segment profit was announced in these two fiscal years.

Copyright (C) 2020 HOPE, INC.

27

Energy Business

Market Summary• Energy business is the driver of growth – The goals are more business volume growth andconsistent profitability＋

Leverage current businesswith local governments

Submit bids for many new contracts by taking advantage of existingvendor registrations with the local governments and other measures
Japan’s electricity market

Approx. ¥15 trillion *1
Electricity sales to local governments

Approx. ¥1trillion *2

Target market
HOPE, INC serves lessthan 3.3% of theApprox. ¥33.8 billion *3 target market*1 Source: Electricity and Gas Market Surveillance Commission*2 The target market as defined by HOPE, INC*3 Expected total sales of energy supplied for contracts received in FY2020

Copyright (C) 2020 HOPE, INC.

28

Energy Business

FY2021 Policy• In FY2020, the number of energy contracts open for bidding was much higher than expected.
• In FY2021, we expect only a small increase in the number of energy contracts open for bidding
but plan to increase both bids submitted and successful bids.
■ Number of bids submitted (only contracts where HOPE, INC. was eligible)
FY2020 plan/actual (contracts)
Plan

FY2021 plan (contracts)

ActualApprox. 3,000

580

Approx.
1,000

Approx. 3,500

Approx. 3,000

Approx. 2,500
Approx. 2,400

Approx. 3,800

Total : Approx. 4,500
Successful bids
Bids submitted
Did not submit bids

Total : Approx. 6,000

Copyright (C) 2020 HOPE, INC.

Total : Approx. 6,300(estimate)29

Business Strategy [HOPE NEXT 3]

Energy Business(Millions of yen)

45,000(Millions of yen)

Net sales

4,500

Segment profit

Approx.40,000

40,00035,00030,000Medium andlong-term strategy

Short and mediumterm strategy

More progress with thecurrent growth strategy toachieve rapid growth

Create new forms ofadded value by
providing clean
energy, using AI for
accurate market priceforecasts and taking
other actions

23,450〈28,050〉

25,00020,000

3,500

3,000

2,500

2,000

Approx.1,350〜1,850

15,000

4,000

1,500

10,340〈12,277〉
1,000

10,000

1,203

5,000

〈1,411〉

1,068

500

94

0

0

FY2019FY2020

FY2021

FY2022

FY2023*〈 〉is figures using the gross recognition method.

Copyright (C) 2020 HOPE, INC.

30

Media Business

Market Summary• Substantial public-sector demand and still considerable growth potential
The market for promotions targeting local governments

still has much more potential, including public-private sector
matching and measures to become more competitive
Market for promotions
targeting local governments

15.2 billion

Local govt.

Approx. ¥Public-sector demand(except national govt., construction)

Companies

Approx. ¥ 8.68 trillion * 1
Approx. ¥1.52 trillion * 2

Approx.

¥0.13 billion*3

1%

Potential market

Portion for companies operating nationwide
Assumes about 1% is used for promotional activities(market for promotions targeting local governments)

Approx. ¥ 15.2 billion*1 Calculated by HOPE, INC. using Summary of Guide to Contracts in the Public Sector – FY2018, The Smalland Medium Enterprise Agency*2 HOPE, INC. estimates based on FY2018 Administrative Project Review, Ministry of Internal Affairs andCommunications*3 FY2020 media business sales

Copyright (C) 2020 HOPE, INC.

31

Media Business

Goals for FY2021

Position this business at the very top of upstream information
flows to serve as a link for public-private sector collaboration andfor ties between local governments

Local govt.

Monitor/collect info

Contribute tomarket growth

MonitorCompanies･ Social issues

Need for ways
to contact local
governments･ Need for the useof private sector
partners

Provide many types of services• Broad range of activities using the Jichitai Works brand• More matching by using the internet, telemarketing and other methods

Copyright (C) 2020 HOPE, INC.

32

Media BusinessBusiness Strategy [HOPE NEXT 3]

The preeminent upstream sourceof local government information

Business strengthening, support and creation
made possible by the local government database

Use the Jichitai Works brand to distribute information

Local govt.

Jichitai Works

Jichitai Works Web

Companies

Jichitai Works

Collect and store data
Organizations■Budgets■Issues, needs

Individuals

Establish and enlarge local
governments databases

Copyright (C) 2020 HOPE, INC.

■ Information about

local governments andnational government employees

33

FY2021 Investor Relations Activities• Plan to continue increasing the number of meetings with institutional investors by using online
meetings and expanding English-language disclosure activities.
■ Number of institutional investor meetings

Goal:(Meetings)

120meetings

120

More 1Q meetings thanthe FY2020 total

100

28

80

60

92
82

40

20

0

15
9

FY2017FY20186FY2019FY2020

FY2021 (Plan)*Includes online meetings and telephone calls

Copyright (C) 2020 HOPE, INC.

34

V. 2020 VISION

Copyright (C) 2020 HOPE, INC.

35

2020 VISION

Expansion of Core Competence• Enlarge local government relations, HOPE, INC.’s core competence, to encompass the entire
government employee sector.

Current core competence

Local govt.

•••

Local govt.

Local govt.

Govt. employees•••

The government employee platform concept

Core competence enlargement
Copyright (C) 2020 HOPE, INC.

36

2020 VISION

Expansion of Core Competence

Business domain
expansion

Govt. employees

Local govt.

Use the enlargement of the corecompetence for the diversificationof business activities in a domain
expanded to include thegovernment employee sector

Business domain
expansion

Become the leader in businesses
and services for local governments
Copyright (C) 2020 HOPE, INC.

37

Positioning of Business Units• Enlarge every business domain and increase actions for the expansion of HOPE, INC.’s corecompetence.
Measures for providing value
Additional local
government revenue

Enlargement of targeted domains

Local
govt.

Public-private sector
collaboration

Ads in public info
publications, banner ads, etc

Jichitai Works

Local government DX…

Machiiro

B-to-G
Marketing
Jichitai Works

Govt.
employees

Jichitai Works Web

The government employee platform concept

Copyright (C) 2020 HOPE, INC.

38

2020 VISIONF Y2030
Net sales
Operating profit
Services

100 billion¥10 billion
10 services¥

Copyright (C) 2020 HOPE, INC.

39

2020 VISION Progress• Start and implement initiatives for accomplishing the FY2030 goals of the 2020 VISION:
Sales of ¥100 billion and operating profit of ¥10 billion

The three years of the HOPE NEXT 3
medium-term management plan

Advertising Energy

100billionEnergy¥25.3
billionNew
business¥

Advertising¥42 .0billion

Media

Media
New
businessNewbusinessNewbusinessNewbusiness

FY2021

FY2023

FY20303 services

3 or more services

More than 10 services

Actions● Improve profitability of existing businesses● Develop new businesses● Use all existing businesses as a base for new businesses

Copyright (C) 2020 HOPE, INC.

● M&A

● Financial and investment strategies

40VI. Appendices

Copyright (C) 2020 HOPE, INC.

41

Business Segments and Servicest

Advertising Business
SMARE RESOURCE SERVICESMART CREATION SERVICE

Ads in public info publications,banner ads, etc.

Energy Business

Machilet

Media Business
Jichitai Works

Jichitai Works Web

B-to-G Marketing
Jichitai Works

Machiiro*Beginning with FY2020, Machiiro has been moved from the media segment to others.

Copyright (C) 2020 HOPE, INC.

42

Advertising BusinessCorporate Philosophy

Localgovernment
assetsProviding new value to citizens
through local governments

Utilization•Public info publications,
local govt. websites

Additional local
government
revenue•Use of media space•Information distributed to residents■ Value provided
Local gov t.

•Free joint local government/
HOPE, INC. publications

A source ofrevenue

Copyright (C) 2020 HOPE, INC.

Opportunities
for PR

Companies

43Advertising Business 1 SMART RESOURCE SERVICE■ Business model

Payment forad space

Payment forad space日︵水︶︑グランドハイ回定時株主総会らの言葉で株主の皆さんに語らが執り行われました︒

上 地 さ ん 司 会 の も と︑社 長 のがらもしっかりと話してくれ

座 右 の 銘 を︑緊 張 の 面 持 ち な

1年目の皆さんが自己紹介と報告の後︑サービスの現況を伝える事業

山 監 査 役 か ら の 監 査 報 告︑各挨 拶 で 始 ま っ た 株 主 総 会︒松挨 拶 で 始 ま っ た 株 主 総 会︒松
今回の議題である取締役5名

回定時株主総会

ア ッ ト 福 岡 に お い て︑株 式 会

山 監 査 役 か ら の 監 査 報 告︑各︵社内取締役4名•社外取締役

で︑ホ ー プ の﹁今﹂を 株 主 のわ れ︑賛 成 多 数 で 可 決 さ れ ま
した︒
ま た︑株 主 総 会 と し て の 必 要事項である各報告や議決の後報告の後︑サービスの現況を伝える事業

山 監 査 役 か ら の 監 査 報 告︑各挨 拶 で 始 ま っ た 株 主 総 会︒松

O•部 長 陣 の 紹 介︒そ れ ぞ れCT

ま ず は︑各 部 署 の 長 で あ るた︒

ためのパートも用意されまし

プへの理解を深めていただくには︑第二部として︑よりホー

ま た︑株 主 総 会 と し て の 必 要

今回の議題である取締役5名

上 地 さ ん 司 会 の も と︑社 長 の皆さんへ率直に伝える場とな

1 名︶の 選 任 継 続 の 採 決 が 行

ました︒

りました︒

ドリブで答えていくという形

1 名︶の 選 任 継 続 の 採 決 が 行報告の後︑わ れ︑賛 成 多 数 で 可 決 さ れ ま

事項である各報告や議決の後1 名︶の 選 任 継 続 の 採 決 が 行︵社 内 取 締 役 4 名•社 外 取 締 役

した︒

X

X

X

X

られました︒

自らの言葉で株主の皆さんに語の 部 署 の 今 期 目 標 が︑ト ッ プ

プへの理解を深めていただく

わ れ︑賛 成 多 数 で 可 決 さ れ ま

ためのパートも用意されました︒

O•部 長 陣 の 紹 介︒そ れ ぞ れCT

ま ず は︑各 部 署 の 長 で あ るには︑第二部として︑よりホーした︒︵社内取締役4名•社外取締役

今回の議題である取締役5名

社長と森さんが台本なしのア

新 卒 の 挨 拶 で は︑

上 地 さ ん 司 会 の も と︑社 長 の

社ホープ第ア ッ ト 福 岡 に お い て︑株 式 会

9月

各サービスの現況を伝える事業報告の後、れました︒の部署の今期目標が︑トップ自た株主総会。松山監査役からの監査報告、

社ホープ第

日︵水︶
︑グランドハイ上地さん司会のもと、社長の挨拶で始まっ

続いての

9月

27

が執り行われました︒

27

サービスの現況を伝える事業

17

続いての

上地さん司会のもと、社長の挨拶で始まっ

今回の議題である取締役 5 名（社内取締役

新 卒 の 挨 拶 で は︑

4 名•社外取締役 1 名た︒

ためのパートも用意されまし

プへの理解を深めていただくには︑第二部として︑よりホー事項である各報告や議決の後

ま た︑株 主 総 会 と し て の 必 要

した︒

わ れ︑賛 成 多 数 で 可 決 さ れ ま

1 名︶の 選 任 継 続 の 採 決 が 行︵社 内 取 締 役 4 名•社 外 取 締 役

今回の議題である取締役5名

報告の後︑サービスの現況を伝える事業

山 監 査 役 か ら の 監 査 報 告︑各挨 拶 で 始 ま っ た 株 主 総 会︒松上 地 さ ん 司 会 の も と︑社 長 の率直に伝える場となりました︒

プ の﹁今﹂を 株 主 の 皆 さ ん へ

答 え て い く と い う 形 で︑ホ ーさんが台本なしのアドリブでの テ ー マ に つ い て︑社 長 と 森

変化や現在の課題等いくつか

ん に よ る 対 談︒前 期 と 今 期 のそ し て 最 後 に は︑社 長 と 森 さした︒

た株主総会。松山監査役からの監査報告、

17

今回の議題である取締役 5 名（社内取締役
4 名•社外取締役 1 名

株式会社◯◯◯

広報■■■■■■■■■■■■■■■■■■

××××××44
Copyright (C) 2020 HOPE, INC.

24

Ad

Others2017

24☎000-000-0000

Ad

11■ Ad in a public info publication■ Examples of media

Companies

Sale ofad space
Local gov t.

Purchase ofad space

各サービスの現況を伝える事業報告の後、Payslips forgovernment employees
WebsitebannerPublic info
publications

A new source of revenue for local governments
Local governments sell ad spacein their publications

Advertising Business 2

SMART CREATION SERVICE (Machilet)

Production and supply of local government
pamphlets for various fields with space for ads

Local gov t.

Free joint production of pamphlets
with even more useful info

Agreement

Sale of ad space

Production
and supplyof pamphlets

Payment forad space

Companies■ Business model■ Examples of pamphlets■ Ad in a pamphlet (child care information)
Content(child careinformation)

Child care

Empty houses

Senior care

Advertisement(monetize space)

My ending
OthersCopyright (C) 2020 HOPE, INC.

45

Energy BusinessCorporate Philosophy

Local govt.
electricity use

Providing new value to citizens
through local governments

New electricity
service

Lower cost ofelectricity■ Value provided
Local gov t.

Cost reduction

Copyright (C) 2020 HOPE, INC.

46

Energy BusinessStart of the electricity
sales business

GENEWAT uses the new perception of “electricity as a
generic product” for supplying electricity at a lower price inorder to help local governments reduce costs.

Electricity• Sale of electricity*Business does not include

generation and distribution

Local govt.

■ Business model
Payments■ GENEWAT users(mainly local governments)

Hospitals• HOPE, INC. posts sales/cost of sales
based on monthly utilization

SewageplantsCopyright (C) 2020 HOPE, INC.

Schools

City halls

•••

47

Media BusinessCorporate Philosophy

Local govt.
information■ Value provided
Local gov t.

Providing new value to citizens
through local governments

AccesspointsPublic-private
sectorcollaboration

Use the private

Opportunity tosector tocollaborate withsolve issues

public sector

Copyright (C) 2020 HOPE, INC.

Companies

48

Media Business 1

Jichitai Works

A government magazine with new info and ideas
A HOPE, INC. publication
with useful info and ideas

Local gov t.

Jichitai Works

Collect
information

Interaction
with local govt.

Provideinformation

Payment
for ad space

Companies

for the jobs of local
government employees■ Issued four times every year (Standard editions)■ Issued as needed■ Jichitai Works Web

1 One of the largest circulations in Japan

Each special edition has asingle advertiser and allcontent involves the advertiser’s products and services

Articles in the printed edition of Jichitai
Works magazine are also posted on theinternet.

A comprehensive info magazine for local
government employees; circulation of up to
70,000, one of the largest in Japan in this(Special editions)

2 Extensive coverage

Distributed at no charge to 1,788 municipalities
and all 47 prefectural governments

3 Upgrading sharing of knowledge
Magazines include examples of innovative ideas, avariety of know-how and other content for improving
government services throughout Japan

Copyright (C) 2020 HOPE, INC.

49

Media Business 2

B-to-G Marketing

Market need survey, holding seminars
and sales services for local governments

Support for companies
with products andservices for
local governments.

Leveraging our relationships
with local governments
Reports,other info

Local gov t.

Seminars,sales agent,
research, otherservices

Companies

Requests forassistance■ 1Q contracted services• Seminars for local government employees
Employee seminar
Seminar on attracting people

x 1 time 262 people
x 1 time 18 people• Senior citizens watch service market survey
250 municipalities x 1 time
412 municipalities x 1 time

Copyright (C) 2020 HOPE, INC.

• Direct marketing telemarketing
100 municipalities
200, 71, 50 municipalities

x 5 times
x 1 time• Distribution of marketing materials
1,788 municipalities x 1 time
300 municipalities
x 1 time

50

Media Business 2

B-to-G Marketing

Seminars for local government employees

Support for companies

Government-company collaboration
Reports, other info

Local gov t.

with products and services
for local governments

Seminars(Held jointly)

Companies

Requests forseminars■ Outline of the seminars (including planned subjects)• Only for local government employees – Jichitai Works Web Seminar

Using the LINE official account for communications with residents that are required during the COVID-19 crisis• Held with Locoguide Inc. – Free online seminar

Ideas for local government digital innovation during the COVID-19 crisis, learning lessons from examples ofprivate-sector cooperation for avoiding the three C’s• Online seminar for local government employees

Regional revitalization by using “private sector x e-commerce site digital innovation” – Reform local industries by using simple e-commerce platforms

Seminars are held online for safety during the COVID-19 crisis. Seminars covering
themes that reflect current events have been very successful.
More seminars will take place at a regular basis.
Copyright (C) 2020 HOPE, INC.

51

Media Business 3

Jichitai Works HAxSH

A joint assistance platform for
local governments and companies

Jichitai Works

Jichitai Works

Jichitai Works

Register their own
services

Service searches andexaminations

Sharing of informationof person who
downloaded their
documents

Download
documents about
services of interest

Payment of fees

Register contact
and other
information

Collaboration with local
governments creates newopportunities

Solve problems byusing private-sector
services

Companies
providingservices

Copyright (C) 2020 HOPE, INC.

Local
governments
personnel

52Media Business 4

Machiiro

An app linking local governments and residents

Machiiro•Nationwide local governments public info publications•Sends the latest info from the registered local governments •Content for local governments and regions

Local govt.

UploadResidents

Distribution of
governments
information
using an app

Agreement

612,136

cumulative downloads

905 cumulative

local government contracts

Local
governments
share of about

51％*Machiiro screen sample

Copyright (C) 2020 HOPE, INC.

53

Apx.1 Advertising Business Contracts with Local Governments

SMART RESOURCE SERVICESMART CREATION SERVICE (Machilet)(Contracts)
500(Pamphlets)

458

1,000

462

839
800

400

309
300

280

694

685

Plan
573

600

200

400

100

200

344

22

3

(Issued in 1Q)

0

21
FY
20

1Q

FY
20
20

FY
20
19

FY
20
18

FY
20
17

21
FY
20

1Q

FY
20
20

FY
20
19

FY
20
18

FY
20
17

0

*For two or more different contracts with the same local government, each contract is counted separately.

*The number of Machilet pamphlets is the number issued during each fiscal year. A different definition is now used to count the number of pamphlets
in each fiscal year and the numbers have changes as a result.

Copyright (C) 2020 HOPE, INC.

54

Apx.2 Advertising Business

Main Business Characteristics

SMART RESOURCE SERVICESMART CREATION SERVICE (Machilet)

1 Bids used to purchase products

1 Most production and sales at the sametime of the year

•Big swings in bids (cost of purchases)•Risk of inability to purchase a sufficient volume due to

The production and sales period starts after signing contracts

bids of other companies, etc.

2 Seasonal nature of purchases andinventory risk

with local governments

2 Large pct. of sales in the fourth quarter
About 80% of pamphlets are issued between April and June

▶Most sales and cost of sales are recorded in the fourth quarter•Most SMART RESOURCE purchases are single
transactions for an entire year (April to March),
resulting in risk for holding large inventories

300
250

(Pamphlets)

3 Effect on the next fiscal year
•Most purchases using bids submitted during thepeak season for governments contract bids will havean effect on the next fiscal year all the way to March

Pamphlets issued in FY2020

Production and sales period

200
150
100
50
0

6月
Jul. Aug. Sep. Oct.
2019

Copyright (C) 2020 HOPE, INC.

Nov. Dec. Jan. Feb.

Mar. Apr. May. Jun.
2020

55

Apx.3 Energy Business Main Business Characteristics

1

Contracts are received by submitting bids
• Business may be lost to competing bids of other companies when new bidding takes
place every year

2

Vulnerability to the economy and weather• Electricity sales may vary depending on the health of the economy, unseasonable
summer or winter weather, and other weather events• Wholesale prices of electricity may vary depending on the cost of buying electricity, thecost of fuel, and the balance between the supply and demand of electricity

3

A low-cost business• When determining bids, the energy business utilizes bidding expertise acquired overmany years in the advertising business

Copyright (C) 2020 HOPE, INC.

56

Apx.4 Media Business Jichitai Works Magazine Issues(Issue)12Special editions
Topic-specific editions
Standard editions

11

issued( of which)
in 1Q : 0issued( of which)
in 1Q : 2

2

10

• Tourism/Foreign Tourist Edition

8

11

4

• Tourism/Foreign Tourist Edition Vol. 2• Disaster Readiness/Crisis Management Edition Vol. 2• Disaster Readiness/Crisis• Education and ICT Edition

Management Edition• Tourism/Foreign Tourist Edition Vol. 3• Home Town Taxes Edition

5

6• Disaster Readiness/Crisis Management Edition Vol. 3

3
4

2

4

4
1

0

FY2019FY2020

Copyright (C) 2020 HOPE, INC.

1Q FY2021

57

Apx.5 Additional Local Government Revenue

Since HOPE, INC’s inception, the advertising business has
generated revenue of about¥8.04 billion for clients•SMART RESOURCE SERVICE has paid local governments
about ¥7.29 billion•Machilet has reduced local government costs byabout ¥0.75 billion(From HOPE, INC.’s inception through 1Q FY2021)¥16.1

Cost reduction of aboutbillionsince the start of the energy business(Estimated cost reduction during the entire length of all current contracts)

Copyright (C) 2020 HOPE, INC.

58

Apx.6 Main Shareholders■ Number of shares and shareholders
Total number of authorized shares

18,848,000 shares

Number of shares issued

6,002,800 shares

Number of shareholders(with voting rights)

2,746■ Shareholder distribution by category
The overseas entities percentage has almost
doubled since the end of June.

Other Japaneseentities

0.9%

Financial
institutions/securities
companies

9.8%

Overseas
entities

13.3%

Company
executives*

46.4%
Individuals,
others

29.6%* Includes their private asset managers■ Top 10 shareholdersNo.

(As of September 30, 2020)

Name of shareholders

Number ofshares held

1

E.T. Co., Ltd.

1,340,000 shares

2

Takayasu Tokitsu

1,293,000 shares

3

Masaki Kuge

240,000 shares

4

BNY GCM CLIENT ACCOUNTJPRD AC ISG (FE-AC)

197,077 shares

5

Custody Bank of Japan, Ltd.
(Trust Account)

179,300 shares

6

NOMURA PB NOMINEES LIMITEDOMNIBUS-MARGIN (CASHPB)

136,200 shares

7

Shimpei Mori

119,000 shares

8

Custody Bank of Japan, Ltd.
(Securities Investment Trust Account)

111,000 shares

9

Individual shareholder

94,500 shares

10

SBI Securities Co., Ltd.

81,650 shares

Copyright (C) 2020 HOPE, INC.

59

Apx.7 Stock Information
Period June 15, 2016 to September 30, 2020
IPO price¥350

Initial price¥805 (June 15, 2016)

ROE

FY2015FY2016FY2017FY2018FY2019FY2020

23.7％

23.9％

3.2％

(25.4)％

15.7％

75.4％

FY2016FY2017FY2018FY2019FY202027.9x116.3x

32.3x

30.5x

Highest price since IPO* ¥6,770 (September 30, 2020)

PER*

Lowest price since IPO* ¥220 (December 25, 2018)* Calculated based on the stock price on the settlement date.

* Including stock prices during trading hours.
* Stock prices are adjusted to reflect a 1-to-4 stock split.

■ Stock price (July 1, 2018 to September 30, 2020)
7,000

May 26
Announcement of Jichitai Works HAxSH

6,000
May 17
Announcement of
the 3rd shareholder
benefits

5,000
4,000
3,000
2,000

Aug. 9Earnings announcement
Sep. 3
Changed names ofbusiness segments and services

May 27
Announcement of
upward earnings
forecast

Dec. 10
Announcement of 1-to-4
stock split

May 21
Announcement of purchaseof treasury shares
May 13
Announcement of upwardearnings forecast

Aug. 8
Earnings announcement

Feb. 10
Business alliancewith Eltes

Sep. 26
Renewal of
corporate logo

1,000Feb. 6
Commemorative dividend

0

Jun. 29
Renewal of
Jichitai Works

Jul. 27
Announcement of
upward earnings
forecast

Aug. 11
Earnings and medium-term management planannouncement
Sep. 14
Announcement of establishment of a subsidiary

FY2019Jun. 30, 2019

Copyright (C) 2020 HOPE, INC.

FY2020Jun. 30, 2020

FY202160

Apx.8 HOPE, INC. Major Media Exposure
Date

Summary

Date

Summary

Jun. 7, 2016

Investment Information – New IPO Stocks,
Nihon Keizai Shimbun

Aug. 7, 2017

Information about HOPE, INC. in Japan Digest,
Nihon Keizai Shimbun

Sep. 1, 2016

Included in an article in the October issueof Project Design magazine

Jan. 18, 2018

Information about HOPE, INC’s electricity sales businessin the economy section of the Yomiuri Shimbun

Sep. 25, 2016

Information about HOPE, INC. on the TBS TV
program Gacchiri Monday!

Feb. 15, 2018

Information about the Machiiro app forchecking how much money is coming,
Nonstop TV program of Fuji TelevisionNov. 7, 2016

Interview with the HOPE, INC. president inMichishirube, Nihon Keizai Shimbun

Apr. 23, 2018

Information about HOPE, INC. on the TV Asahi
Bakumon Fund! Money Success Graph

Jan. 10, 2017

Interview with the HOPE, INC. president in
Dash Venture, Nihon Sangyo Shimbun

May 21, 2018

HOPE, INC. president featured in a daily column on
business executives in the Nihon Keizai Shimbun

Jan. 16, 2017

Interview with the HOPE, INC. president inFuji Sankei Business i.

Oct. 31, 2018

Information about a HOPE, INC. Halloween event on
NHK TV programs Rokuichi! Fukuoka, NHK News 7,
News Watch 9, and News 11

Feb. 23, 2017

Interview with the HOPE, INC. president in
God of Happiness Diary, Kabushiki Shimbun

Dec. 1, 2019

Information about HOPE, INC. in an article
about innovative companies in Nikkei Veritas

Mar. 24, 2017

Included in The First Companies 2017,an article about newly listed companies

Dec. 31, 2019

Included in an article about companies
with the biggest market cap increases of 2019,
Nihon Keizai Shimbun

May 12, 2017

Included in Gatchiri Monday! The Secret of
Making Money on 40 Little Known Companies

Jan. 31, 2020

Information about the condolence guidebookof HOPE, INC’s Machilet, Chunichi Shimbun

Aug. 3, 2017

Interview with the HOPE, INC. president in CEOs Explain
Management Strategies, Nikkei Sangyo Shimbun

Sep. 4, 2020

Interview with the HOPE president on the Nikkei CNBC
program Hiru Express

Copyright (C) 2020 HOPE, INC.

61

Disclaimer
Information in this presentation includes forward-looking statements that are based on thecurrent outlook, forecasts and assumptions vulnerable to risk factors. As a result, thisinformation incorporates uncertainties that may cause actual performance to differ from thesestatements.

Risk factors and uncertainties include economic trends in Japan and other countries, such aschanges in industries and markets, interest rates, and foreign exchange rates.

HOPE, INC. has no obligation to update or revise for ward-looking statements in thispresentation even in the event of new information or events.

− IR contact −HOPE, INC.

E-Mail: ir@zaigenkakuho.com
URL: https://www.zaigenkakuho.com

Copyright (C) 2020 HOPE, INC.

62