Next Group Consolidated Corporate Vision to FY3/2011
FY3/2009
連 結Investment phase to make HOME’S “Dominantly No. 1”
売 上高 ⇒ 2011年3月期目標＝170億円

FY3/2011

Targeting consolidated sales 2.3 times higher and consolidated
operating profit 3.2 times higher than those in FY3/2008

FY3/2008
Actual

FY3/2009
Estimated&Sales

Target for
FY3/2011

i me st2.
3s andemit¥17.0bny 2.3bgnisirOP¥9.41bn¥7.43bn¥1.6bn¥1.25bn¥4.0bn¥920mn【¥680mn additional investment for FY3/2009】
Consolidated sales

Additional ¥250mn personnel costs for more sales people, additional¥430mn advertising costs to enhance branding etc.

Consolidated OP

If expenses were allocated according to precedent, operating profit of ¥1.6bn would
be anticipated.

NEXT CO.,Lｔｄ.

Copyright 2008 NEXT Co.,Ltd. All rights reserved

Business Performance Forecast

Next Co., Ltd.
《TSE Mothers: 2120》

Mid-term Corporate Vision for the period toMarch 2011 and Business Performance
Forecast for the year to March 2009

The views and forecasts contained in this presentation are based on our opinions or judgments when the document
was produced, and no representation is made as to the accuracy of the information contained herein. Please notethat actual results and performance may differ substantially from our forecasts due to changes in various factors.

NEXT CO.,Lｔｄ.

（May 14, 2008）
2008 Spring Version

Copyright 2008 NEXT Co.,Ltd. All rights reserved

Table of Contents
NEXT Group Mid-term Corporate Vision to FY3/2011 ・・・P3-P8
Consolidated Sales Target for FY3/2011

・・・P4

Consolidated Operating Profit for FY3/2011

・・・P5

Number of HOME’S Member Outlet & Unit Fee Targets for FY3/2011

・・・P6External Environment for Social Networking Services (SNSs) and Lococom

・・・P7

World Vision as targeted by Lococom

・・・P8

Business Performance Forecast for FY3/2009

・・・P9-P17

Earnings forecast for FY3/2009

・・・P10Full-year Sales Forecast by Business/Service Segment

・・・P11

Consolidated Sales and Operating Profit Trend (FY3/2005-FY3/2009)・・・P12

Priority Themes for the Year to March 2009 ①

・・・P13

Priority Themes for the Year to March 2009 ②

・・・P14

Member Outlets Distribution Map（as at the end of March 2008）

・・・P15HOME’S Positioning in Real Estate Rental & Sales Market

・・・P16Priority Themes for the Year to March 2009 ③

・・・P17NEXT CO.,Lｔｄ.

2

Copyright 2008 NEXT Co.,Ltd. All rights reservedNEXT Group
Mid-term Corporate Vision
for the period to March2011

NEXT CO.,Lｔｄ.

3

Copyright 2008 NEXT Co.,Ltd. All rights reservedConsolidated Sales Target for FY3/2011
Consolidated sales ⇒ Target for FY3/2011＝¥17.0bn
FY3/2008
ActualTargetfor FY3/2011

FY3/2009
Estimatedesmit
3.
s2elasginIncreas¥7.43bn

サテライト（含：地域HOME’S）
151,904反響

サテライト（含：地域HOME’S）
151,904反響¥17.0bn¥15.4bn

サテライト（含：地域HOME’S）
151,904反響¥11.4bn¥5.09bn¥6.19bn¥11.4bn¥6.91bn¥8.57bn¥15.4bn¥7.43bn¥9.41bn¥17.0bnChart legend

NEXT CO.,Lｔｄ.

Real estate portal

Real estate rental/sales

4Total group sales

Copyright 2008 NEXT Co.,Ltd. All rights reservedConsolidated Operating Profit Target for FY3/2011
Consolidated operating profit ⇒Target for FY3/2011＝¥4.0bn
FY3/2008
ActualTargetfor FY3/2011

FY3/2009
Estimated

mesit
2.
g3
ni
si
rt
rofi
Pgnit
Opera

¥1.25bn¥1.25bn¥4.0bn¥920mn¥4.0bn¥1.6bnChart legend

NEXT CO.,Lｔｄ.

OP forecast if “NO. 1” Strategy
were not to be adopted

Consolidated OP

5Copyright 2008 NEXT Co.,Ltd. All rights reservedNumber of HOME’S Member Outlet & Unit Fee Targets for FY3/2011
No. of member outlets & unit fees ⇒Targeting 17,000 outlets by March 2011
FY3/2008
Actual

8,761 outlets

Target forFY3/2011

FY3/2009
Estimatedx2≈
gni
s risteltuorebmeM
17,000 outlets

8,761 outlets

10,812 outlets

17,000 outlets¥55,610¥58,346¥58,000

Chart legend

NEXT CO.,Lｔｄ.

HOME’S member outlets

Outlet unit fee

6Copyright 2008 NEXT Co.,Ltd. All rights reservedExternal Environment for SNSs & Lococom
Monthly users
Despite a lower
number ofregisteredmembers, as
unregisteredpeople canbrowse the site,
the number ofvisitors is
relatively higher

Mixi
Mixi

SNS
SNS sitesite namename（SNS operator name）① No. of registered members② No. of monthly visitors（NEXT）① 0.27mn② 1.04mn① 2.50mn
CururuCururuWomen’s
Women’s ParkPark（NHN）① 0.80mn② 1.10mn（Benesse）① 1.00mn② 1.10mn

Targeted registered members by
end of March 2011 2.50mn

Myspace
Myspace

Gree
Gree（Softbank）① 0.50mn② 0.46mn（Gree）① 3.00mn② 0.30mn

No. of registeredmembers

Note: Registered members figures were released by the companies. Monthly visitors were surveyed
by NetRatings. (As at December 2007 ）Breakdown
Breakdown by
by ageage

Breakdown
Breakdown by
by sexsex

User Profile

50's 5%

Female
52％

Male
48％

Other 4%

Breakdown
Breakdown byby occupation
occupation

10's
4% Out of work

Other 10%

3%

40's
15%
30’s～40’s
50％

20's
37%
30's35%

NEXT CO.,Lｔｄ.

（Mixi )
①12.00mn② 5.72mn（NEXT）End of Mar 2011（target）

7

Students
22%

Of f iceworkers
30%

Stay-at-homehousewives
26％

Othersalaryearners
9%

Copyright 2008 NEXT Co.,Ltd. All rights reservedWorld Vision as targeted by Lococom

Traditional
Traditional SNSs
SNSs
A space for communication
where people are linked
through various content
covering hobbies andinterests etc.

Adding the ‘regional' axis to the traditional SNS,People, Region and Content have been linked in three
dimensions.
The regional community Lococom offers a space forcommunication where real live people, regions andcontent have been organically linked through websites(including mobile websites)
RegionPeopleVarious content

People3-dimensional expansion of
the community spaceStudyHouse

WorkPlay

Money

HealthContent（hobbies, thoughts, interests)

Infrastructure
Content（hobbies, thoughts, interests)
NEXT CO.,Lｔｄ.

8Copyright 2008 NEXT Co.,Ltd. All rights reservedNEXT Group
Business Performance Forecast &Strategies for the Year to March 2009This will serve as a basis for achieving
the mid-term corporate vision to March 2011

NEXT CO.,Lｔｄ.

9Copyright 2008 NEXT Co.,Ltd. All rights reserved

Earnings Forecast for the Year to March 2009
Earnings forecast for the year to March 2009

Unit：¥mn

Full-year forecast vs actual
Consolidated

Unit：¥mn

Full-year forecast vs actual
ParentFY3/2008
Actual

FY3/2009
Estimated

YoY
ChangeNet sales

7,433

9,416＋ 26.7 ％Net sales

6,770

8,434＋ 24.6 ％COGS384292▲ 24.0 ％COGS300

231▲ 23.0 ％

SG&A

5,797

8,201＋ 41.5 ％

SG&A

4,927

7,075

＋ 43.6 ％Personnel

2,242

3,084＋ 37.6 ％Personnel

1,925

2,615＋ 35.8 ％Advertising

1,405

2,303＋ 63.9 ％Advertising

1,344

2,212＋ 73.2 ％Operating profit

1,250922▲ 26.3 ％Operating profit

1,542

1,128

▲ 26.9 ％Net profit

406389▲4.3 ％Net profit

683676

▲

1.0 ％

EPS

¥2,203.00¥2,100.99

▲

4.6 ％

EPS

¥3,701.58¥3,652.63

▲

1.3 ％

Operatingmargin16.8 ％

9.8 ％Operatingmargin22.8 ％

13.4％

FY3/2008
Actual―FY3/2009
Estimated

YoY
Change―（Note） As we made a 1-for-2 stock split as of April 1 2008, the EPS’s have been adjusted for the stock split.

NEXT CO.,Lｔｄ.

10Copyright 2008 NEXT Co.,Ltd. All rights reservedFull-year Sales Forecast by Business/Service Segment
FullFull-year sales - actual vs forecast （consolidated）
consolidated）
Unit：¥mn

Real Estate
Portal Business

Regional CommunityBusiness
Real Estate Rental
Guarantee Business
Advertising AgencyBusinessBusiness/Service Segment Name

YoYchangeFY3/2008
ActualHOME'S real estate rental & sales

3,140

5,090

6,193＋ 1,103＋

21.7%

HOME'S newly-built condominiums

799

1,050

1,194＋

144＋

13.7%

HOME'S newly-built detachedhouses

134

318

479＋

161＋

50.6%

Other real estate portal business

※1177

148

261＋113＋76.4%Willnic Co., Ltd※2ー308452＋144＋46.8%

Sub-total

4,250

6,914

8,579＋ 1,665＋24.1%

Lococom

04174＋170＋ 4,250%

Next Financial Service (NFS) Co., Ltd.

※3ー54222＋168＋ 311.1%

Advertising agency business※5163

14393▲

50▲

35.0%※ 4, 5ー

264271＋7＋2.7%

465477＋23＋

42.6%

4,459

7,433

9,416＋ 2,914＋26.7%

Renter’s Co., Ltd.
Other Businesses

FY3/2009
Estimated

Amount ofchange

FY3/2007
Actual（only including Renter’s network sales andRenter’s development business sales）

Others（other businesses）
TOTAL※1 Other real estate portal business includes HOME’S real estate investment, HOME’S auction and so forth.
※2 Willnic was established in February 2007 and became a consolidated subsidiary. It started operation in April 2007.
※3 NFS, established in July 2007as a consolidated sub., started operation in Sep. 2007 with business transferred from JAPAN SYNTHESIS GUARANTEE CO.,LTD.
※4 Renter’s became a consolidated subsidiary in April 2007 through exchange of shares.
※5 Renter’s sales include sales from advertising agency business, but this portion (¥36mn each for the year to March 2008 and the year to March 2009) isreported as advertising agency business sales.

NEXT CO.,Lｔｄ.

11Copyright 2008 NEXT Co.,Ltd. All rights reservedConsolidated Sales and Operating Profit Trend
Consolidated sales and operating profit trend (by fiscal year）
Unit：¥mn

9,416

9,000

Sales

8,000

Operatingprofit

7,433

7,000
6,000

4,459

5,000
4,000

2,722

3,000
2,000
1,000

922

1,612

1,250
251

447

FY3/2005

FY3/2006※1746

0FY3/2007

FY3/2008

FY3/2009e※1 Our traditional cost allocation policy has been to limit personnel costs and advertising costs to 30% and 20% each of total sales, and these indicate the excess overthe limits (Personnel costs = +¥250mn and advertising costs = +¥430mn

NEXT CO.,Lｔｄ.

12Copyright 2008 NEXT Co.,Ltd. All rights reservedPriority Themes for the Year to March 2009 ①
Back to basics

Priority themes(See details on p14-16)①① “Dominantly“Dominantly NO.1”
NO.1” Policy
PolicyHOME’S
HOME’S Real
Real Estate
Estate Rentals
Rentals && Sales
Sales
leapingforward
leaping forward⇒⇒ HOME’S
HOME’S brandbrand earnings
earnings pillar
pillar■ Branding■ Faster customer base expansion■ Offering new HOME’S services

Cultivate

Priority themes(See details on p17)

■ Lococom （¥210mn operating loss in FY3/2008）②
Building aa growth
growth base
base forfor FY3/2010
FY3/2010 onwards”
onwards”② ““BuildingReaping
Reaping profits
profits fromfrom newnew services
services at
at early
early stages
stages■ NFS （¥290mn operating loss + ¥120mn impairment
loss in FY3/2008）⇒⇒Laying
Laying thethe groundwork
groundwork forfor NEXT’s
NEXT’scorporate
corporate visionsvisions

NEXT CO.,Lｔｄ.

■ Optimizing group synergies
13

Copyright 2008 NEXT Co.,Ltd. All rights reservedPriority Themes for the Year to March 2009②
Back to basics

Priority themes■ Branding①① “Dominantly“Dominantly NO.1”
NO.1” Policy
PolicyHOME’S
HOME’S Real
Real Estate
Estate Rentals
Rentals && Sales
Sales
leapingforward
leaping forward⇒⇒ HOME’SHOME’S brand
brand earnings
earnings pillar
pillar■ Faster customer base expansion■ Offering new HOME’S services■ Branding ：Looking for a home＝『HOME’S』⇒To become the service of choice・Strengthening advertising activities⇒Plan to spend more on advertising expenses, about 4.5% (¥430mn) higher than the ceiling amount (20% of total sales)originally set as company policy. Increasing the public exposure of HOME’S, e.g. by increased advertising through TV
commercials.
Consolidated advertising expenses : from c.¥1.4bn (18.9% of total sales) in FY3/2008 to c.¥2.3bn (24.5% of total sales)■ For HOME’S real estate rentals and sales, pace of obtaining new customers should be raised:
the net increase in the number of customers to be 2,051 per annum（+1,028 in FY3/2008）
・Building up and strengthening the sales system based on the organizational structure by region and type of customer.
⇒By region: 4 group segments (Tokyo Met, Greater Tokyo other than Tokyo Met., Eastern Japan, Western Japan)
The number of sales people in the Rental Housing Distribution Div: 45 at the end of Mar 08⇒79 at the end of Mar 09 (67 as at Apr1, 2008）―Increasing staff headcount by raising personnel costs 2.8% (¥250mn) higher than the ceiling originally set at 30% of sales.
・Expanding the budget for advertising costs (but this should be exceptional to FY3/2009)⇒Advertising costs spent for the service: about ¥500mn in FY3/2008 ⇒ about ¥1.4bn in FY3/2009■ Offering new HOME’S services
・ New services are being developed (to be announced shortly) for the HOME’S housing-related integrated portal site.

NEXT CO.,Lｔｄ.

14Copyright 2008 NEXT Co.,Ltd. All rights reservedMember Outlets Distribution Map（as at the end of Mar 2008）
Sales activities through 4 group segments
Tokyo Met.

Eastern Japan

Hokkaido &Greater Tokyo
excluding Tokyo Met.

Western Japan

Tohoku108236
Kyushu &Okinawa

Chugoku【Branchoffice】

223

1,343

60

【Branchoffice】

Hokuriku &Koshinetsu

Kinki

52
Shikoku

HOME’
HOME’S member outlets（End of Mar 2008）
2008）

8,761 outlets
NEXT CO.,Lｔｄ.

221【Sales office】
office】(planned)

Tokai

137
NorthernKanto

6.381
Greater Tokyo
Tokyo【Head office】

HOME’S member outlets（End of Mar 2009)+2,051outlets

10,812 outlets
15

Market size for real estate outlets（NEXT’s estimate）

About 260,000 realestate outlets
nationwide in Japan
Copyright 2008 NEXT Co.,Ltd. All rights reserved

HOME’S Positioning in Real Estate Rental & Sales Market
The market size for real estate rental and sales & real estate advertisement= approx ¥95.0bn per year (NEXT’s estimate)
Of the total market, the size of the Internet market should bearound ¥35.0bn per year （NEXT’s estimate）－Assuming that the market remains constant,NEXT’s market share trend is estimated as follows:

An increasing shift
from paper media
to website media driving
the market expansion¥11.4bn sales
in FY3/2011【32.6％】¥6.47bn sales
in FY3/2009【18.5％】¥5.19bn sales
in FY3/2008【14.9％】

NEXT CO.,Lｔｄ.

16

Copyright 2008 NEXT Co.,Ltd. All rights reservedPriority Themes for the Year to March 2009③
Cultivate

Priority themes■ Lococom （¥210mn operating loss in FY3/2008）②② ““Building
Building aa growth
growth base
base forfor FY3/2010
FY3/2010 onwards”
onwards”
Reaping
Reaping profits
profits fromfrom newnew services
services atat early
early stages
stages⇒⇒Laying
Laying thethe groundwork
groundwork forfor NEXT’s
NEXT’scorporate
corporate visions
visions■ NFS （¥290mn operating loss +¥120mn impairment lossin FY3/2008）■ Optimizing group synergies■ Lococom: enhancing media value as a regional community website【Problems】 Smaller number of members & word of mouth⇒lower page views ⇒ Less attractive as an advertisement vehicle for its lower media value.
【Measures in FY3/2009】
・Complete renewal of the website ⇒ Improving usability, upgrading/expanding content while acquiring more members through promotional efforts
・Upgrading the functions of the mobile website ⇒ Linking in GPS functions, offering new content etc.
・Altering the organization ⇒ Making an independent sales group with more hires. Securing profit through sales force covering lower media value.
⇒In April 2008, we started offering a new sales promotion tool - a customized version of “Machicom” - at 125 sales offices of HIS in Eastern Japan;
this tool offers outlet information, blogs, and coupon issuance at no charge. This will function as a strong sales tool, given the past case study.

■ NFS: strengthening management control by reviewing business planning.
【Problems】 Collecting advance money taking longer than expected; new product PASS has not been selling well
【Measures in FY3/2009】
・Securing recovery by ensuring achievement of the revised earnings plan made after incurring impairment loss ⇒ For the details of this plan, pleaserefer to our Annual Financial Results Explanation Materials for FY3/2008 Page 27.
・Tightening the assessment standard and strengthening the collection flow process to improve the advance money collection rate・Concentrating sales resources into medium-to-large management companies to raise the advance money collection rate through expansion of new
products and good-quality customers.

■ Optimizing group synergies
・Enhancing the media value of Lococom ⇒ HOME’S（looking for a home）× Lococom（regional information）＝Best tool for looking for housing
・Penetration of NFS (rent guarantee business) into society ⇒ lower damage deposits and key money paid to landlords and making it easier to movehouse ＝Increased users of HOME’S sites

NEXT CO.,Lｔｄ.

17

Copyright 2008 NEXT Co.,Ltd. All rights reserved