Third Quarter of the Fiscal Year Ending June 30, 2020 (FY2020)

Results of Operations
Explanatory Material

May 13, 2020
HOPE, INC.
[6195]

Local Governments in Japan (1)Governments need to secure funds on their own as more extraordinary ﬁnancial measuresloans(deﬁcit-covering local government loans) are issued.
Outstanding local government bonds (purposes) and loans (sources)
160
140
120
100
60
40
20
0
(¥trillion)

137,398.5

139,786.7

15.7%

18.2%

(115,824.0)(114,383.1)

13.6%

13.1%

4.1%
4.4%

4.7%
4.0%

142,125.5

22.1%(110,714.6)

12.4%
4.5%
3.6%

143,231.9

25.2%(107,181.7)

11.7%
4.2%
3.2%

10.9%

10.5%

10.4%

8.2%

8.2%

3.0%
5.9%

2.9%
5.6%

7.8%

7.8%

33.8%

32.4%

31.0%

145,918.9

145,999.6

145,526.4

144,908.1

144,289.1¥143,654.9 billion

Extraordinary ﬁnancial
measures loan
Revenue deﬁcit
covering loan

11.3%

2.7%
5.4%

144,705.2

2.5%
5.2%

29.8%

28.1%

(104,100.8)

11.0%

30.8%

(100,955.4)

10.3%

33.2%

34.8%

35.8%

(94,864.7)(93,011.5)

9.1%

3.5%
2.1%

8.5%

3.3%
1.9%

3.2%
1.7%

(97,496.6)

9.8%

36.8%

(911,980.0)

37.6%(¥89,675.7billion)

4.1%
2.8%

3.8%
2.4%

10.3%

10.1%

9.8%

9.9%

9.7%

9.5%

10.5%

7.9%

8.2%

8.4%

8.6%

9.1%

2.2%
4.6%

9.4%

2.1%
4.6%

8.8%

2.1%
4.6%

2.0%
4.8%

2.0%
4.9%

2.4%
4.9%

28.5%

2.3%
4.7%

27.4%

26.4%

25.7%

25.3%

8.0%
3.2%
1.5%

7.6%
2.9%
1.3%

Revenue decrease
compensation loanTax cut
compensation loan
Others
Subsidized generalpublic works loan

(public works loan since FY2011)

24.8%

24.4%

Public housing loan
Education and social
welfare facilities
improvement loan
Unsubsidized generalpublic works loan

End of
FY2008End of
FY2009End of
FY2010End of
FY2011

End of
FY2012End of
FY2013End of
FY2014End of
FY2015End of
FY2016End of
FY2017

End of
FY2018Notes: 1. Outstanding local government bonds do not include special fund public investment loans.
2. Government funds during FY2008-FY2018 are ﬁnancial loan funds.
3. Revenue deﬁcit covering loans are the sum of these bonds associated with subsidized general public works and public works loans and these bonds associated with corporate bonds.
4. Outstanding local government bonds do not include payments to a sinking fund for the lump-sum repayment of the principal upon maturity.
5. Numbers in parentheses are outstanding local government bonds minus outstanding loans for extraordinary ﬁnancial measures.
*Prepared by HOPE,INC. based on the March 2020 White Paper on Local Public Finance, Ministry of Internal Aﬀairs and Communications

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

02

Local Governments in Japan (2)Local governments need to become stronger in order to adapt to Japan s declining
population, resulting in an older population and fewer children. The national governmentis urging local governments to merge. Many municipalities with weak ﬁnances have mergedwith other municipalities.
Number of local governments in Japan
4,000

Period of many mergers note1

3,500
3,000
2,500
2,000
1,500
1,000
500
0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Note 1: Mergers started in 1995 with enactment of a law to permit local government mergers and the number of mergers peaked in 2005 and 2006.
The ﬁrst period of many mergers was in Meiji era following the establishment of the local government system in 1888. There was a four-ﬁfth decline from about 70,000 municipalities.
The second period of many mergers was 1955-1959 as the establishment of a postwar political system sparked a two-thirds decline from about 10,000 municipalities.
The most recent merger peak was the result of reforms for giving more authority to local governments.
* Prepared by HOPE,INC. using data on the National Statistics Center website (except counties and small islands)

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

03

The Local Government Financial Cycle

New ﬁscal years start in April 1 because local governments use a ﬁscal year ending in March 31.

Jul.

Aug.

Sep.

Preparationofestimatedbudgets

Oct.

Nov.

Dec.

Jan.

Feb.

Assessment
by Finance
Department
Assessmentby managers

Requestforbudgets

Mar.

Apr.

May.

Jun.

Start ofthe newﬁscal year
budgetApprovals

Start of the new ﬁscal year▼

SummerAutumnSpring

WinterSummer

HOPE, INC. FY
Jul.

Aug.

1Q

Sep.

Oct.

Nov.

2Q

Dec.

Jan.

Feb.

3Q

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

Mar.

Apr.

May.

Jun.

4Q

04

Contracts with Local Governments (FY2019)
This is an approximate map of Japan. In FY2019,
there were contracts with a variety of local governments in Japan s
47 prefectures.

1,116
1,969

note1

note2

Approx.

57％

Notes: 1. Number of contracts for all HOPE,INC. services with local governments in FY2019
2. Source: Population, Demography and Number of Households Based on the Basic Resident Registers; 2019 Resident Register Population,
Households; 2018 Population Trends (for cities, towns and villages), Ministry of Internal Aﬀairs and Communications website Local governments
are cities, towns and villages in all prefectures, special wards in Tokyo, and wards in ordinance-designated cities (excludes counties and small islands)

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

05

Amendments to Laws Aﬀecting Local Governments

Government in Japan has reached a turning point due to amendments tolaws and regulations and social change. The result is many opportunities for HOPE,INC.

2005

Plan for More Eﬃcient Government/National government｜Feb. 2005 Started the Smart Resource service
2007

Start of the Hello Baby Project (home visits)/Ministry of Health, Labour and Welfare｜Sep. 2013 Issued Child Raising Pamphlet
Feb. 2015

Special Measures for Empty House Countermeasures/
Ministry of Land, Infrastructure, Transport and Tourism｜Oct. 2015 Issued Empty House Pamphlet
Apr. 2016

Full Liberalization of Retail Electricity Sales/Ministry of Economy, Trade and Industry｜Mar. 2018 Started GENEWAT
Copyright (C) 2020 HOPE, INC. All Rights Reserved.

06

Contents

Ⅰ．3Q FY2020 Financial Highlight
Ⅱ．FY2020 Outlook and Growth Strategies
Ⅲ．Company overview

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

07

Ⅰ．3Q FY2020 Financial Highlight

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

08

3Q FY2020 Financial Summary (July 2019 ‒ March 2020)

1Q-3Q
FY2020Results

The energy business remains the primary source of growth with a big YoY
increase in sales. Although ﬁnancial information was corrected, there was an
operating proﬁt for the ﬁrst three quarters.
Net sales¥8,082million（up 388.6% YoY）

Advertising Business
Sales down due to measures toachieve the proper size of thisbusiness but earnings are
improving from one year earlier

Operating proﬁt¥82million（(¥(245) million in 1Q-3Q FY2019）

Media Business

Energy BusinessTemporary decline in earnings
growth due to a substantial sales
recognition shift to the fourth quarter

New orders include electricity services thatstarted in the third quarter; rapid sales growth(+12.5% over previous quarter) and consistent
proﬁtability; contributed to third quarter earnings

Net sales

Net sales

Net sales

Segment proﬁt

Segment proﬁt

Segment proﬁt¥1,244million（down 13.4% YoY）
¥64million（¥(11) million in 1Q-3Q FY2019）¥53million（up 10.5% YoY）¥(2)million（¥(12) million in 1Q-3Q FY2019）¥6,774million（¥167 million in 1Q-3Q FY2019）¥250million（¥(11) million in 1Q-3Q FY2019）*Numbers are rounded down and percentages are rounded up or down to the ﬁrst decimal place.

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

09

3Q FY2020 Income Statement Highlight

1Q-3Q FY2019（Millions of yen）

Results

Comp.

1Q-3Q FY2020
Results

Comp.

8,082

YoY change

Net sales

1,654

Gross proﬁt

422

25.6％

782

9.7％

+85.0％

SG&A expenses

667

40.4%

699

8.7％

+4.7％

Operating proﬁt(245)(14.8)%

82

1.0%

Ordinary proﬁt(230)(14.0)%

75

0.9%

Proﬁt

(237)

(14.3)%

50

0.6%

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

+388.6％

10

Quarterly Sales

Sales increased 383% YoY due to the growth in the energy business.

Up
383.0%YoY

Others

3,500

3,249

Energy Business

2,934Media Business

3,000（Millions of yen）

Advertising Business
2,500

2,208
1,897

2,000

1,244

1,500

943
1,000

500

378

447

500

12

20

375

435

480

1Q

2Q

3Q

3
0

2,483

FY2018

6
11
924

1,496

420
17
6
396

4Q

2,793

1Q

560

672

44
11

106

505

535

2Q

3Q

30

FY2019Copyright (C) 2020 HOPE, INC. All Rights Reserved.

54

909

4Q

14

23

15

386

426

431

1Q

2Q

3Q

FY202011

Quarterly Operating Proﬁt

Record-high quarterly earnings in the third quarter because of energy business growth and steady
improvement of advertising business proﬁtability. Corporate expense level remains unchanged.

500

Adjustments (corporate expenses)
Others（Millions of yen）

400

Energy Business

105

Media Business

300

23

Advertising Business

200

295

266
100

0

(100)

164
(20)
(14)
(72)

1Q
(200)

(5)
(14)

6

(107) (74) (93)
2Q

(16)
(75)

3Q

FY2018

(85)

(17)

(43)

(8)

(5)
(7)

(77)

4Q

(68)

1Q

(11)

2

(7)

43
0

(124)

(7)
(74)

(100)

2Q

(66)

3Q

FY2019Copyright (C) 2020 HOPE, INC. All Rights Reserved.

332
150

122

80
19

(19)
(87)

(3)
(2)
(68)

4Q

1Q

(56)

2
14

16

53
(2)

(78)

(78)

2Q

3Q

FY202012Advertising Business

Sales by Segment

Sales continue to decline due to measures to achieve the proper size of this business in order
to become more proﬁtable.

1,000
900

（Millions of yen）

800

Others924

Smart Creation Service

37

909
82

Smart Resource Service

Down
19.5%
YoY

700

505

600
500
400
300
200

375
38
5

331

435

505

480

50
29

39

396

60

58

33

52

535

482

38

386

89

73

12

355

382

2Q

3Q

381

350

4Q

1Q

391

407

345

426
95

431
42
82

17

37

295

293

305

1Q

2Q

3Q

100
0

1Q

FY20182Q

3Q

FY2019Copyright (C) 2020 HOPE, INC. All Rights Reserved.

4Q

FY202013

Media Business

Sales by Segment

Sales increased 10.5% YoY in the ﬁrst three quarters but were down 49.0% YoY in
the third quarter. The fourth quarter is expected to be a large percentage of ﬁscal year sales.

60（Millions of yen）

50

40

30

Down
49.0%
YoY

54

20

30

12
0

23

20

10

11

3

1Q

2Q

FY2018

3Q

4Q

6

1Q

15

14

11

2Q

3Q

4Q

FY20191Q

2Q

3Q

FY2020*The ﬁrst issue of Jichitai Works, magazine for local governments employees was on Dec. 22, 2017.

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

14

Sales by Segment

Energy Business

Third quarter sales were 12.5% higher than in the second quarter, in part because of orders withthe start of electricity services in the third quarter.The number of winning bids was 70, 83 and329 in the ﬁrst, second and third quarters, respectively.
Up
12.5%
QoQ

3,000

（Millions of yen）

2,500

2,000

1,500

2,483

2,793

1,000

1,244

500

0

6

17

44

4Q

1Q

2Q

FY2018

1,496

106

3Q

4Q

FY2019Copyright (C) 2020 HOPE, INC. All Rights Reserved.

1Q

2Q

3Q

FY202015

3Q FY2020 Balance Sheet Highlight
3Q FY2019

Results

Comp.

Results

Cash and deposits

245

18.9%

526

13.8%

+280

Accounts
receivable - trade

258

19.8%

1,497

39.4%

+1,239Inventories

476

36.6%

438

11.5%

(37)

1,047

80.5%

2,772

72.9%

+1,724

253

19.5%

1,029

27.1%

+776

1,300

100.0%

3,802

100.0%+2,501

583

44.9%

1,412

37.2%

+828

Short-term borrowings

−

−

356

9.4%

+356

Current portion of
long-term borrowings

86

6.7%

386

10.2%

+300

830

63.9%

2,383

62.7%

+1,553

−

−

100

2.6％

+100

Long-term borrowings

256

19.7%

741

19.5%

+484

Non-current liabilities

256

19.7%

841

22.1%

+584

Total liabilities

1,087

83.6%

3,225

84.8%

+2,137

Total net assets

213

16.4%

576

15.2%

+363

Total liabilities
and net assets

1,300

100.0%

3,802

100.0%+2,501（Millions of yen）

Current assets
Increase inenergy business
transaction
security
deposits

Non-current assets
Total assets
Accounts payable - trade

Funds procured
for the growthof working
capital andother reasons

3Q FY2020

Current liabilities
Bonds payable

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

Comp.

Change16

Ⅱ．FY2020 Outlook and Growth Strategies

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

17

FY2020 Plan (Income Statement)
The sales plan has been raised again and an earnings forecast has been announced.
A very big increase in earnings is expected.
FY2018FY2019FY2020Results

Results

YoY change

Plan

YoY change

Net sales

2,269

3,862

+70.2％

14,300+270.2％Gross proﬁt

759

1,039

+36.9％

SG&A expenses

881

952

+8.1％

Operating proﬁt

(121)

87

850 - 950+876.7％ 991.6％

Ordinary proﬁt

(114)

95

840 - 940

+781.1％ 886.0％

Proﬁt

(128)

75

600 - 675

+693.9％ 793.1％（Millions of yen）

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

18

Trend in Sales

16,00014,30014,000（Millions of yen）

12,00010,000

8,000

6,000
3,862

4,000

2,000

0

87

142

198

331

512

695

635*

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014

1,142

FY2015

1,592

FY20161,774

FY20172,269

FY2018FY2019FY2020（Plan）*FY2014 was an irregular nine-month period because of a change in ﬁscal year-end.

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

19

FY2020 Sales Plan By Segment
Approx.

16,000¥ 14.3 billion
14,000（Millions of yen）

12,00010,000

6,000

4,000

Approx.

¥ 3.8 billion
Approx. ¥1.4billion

Energy BusinessMedia BusinessApprox. ¥12.2billion

8,000

2,000

Approx. ¥0.1billion
Approx. ¥2.3billion

Advertising Business
0

FY2019Copyright (C) 2020 HOPE, INC. All Rights Reserved.

Approx. ¥0.13billion
Approx. ¥2.0billion

FY202020

Growth Strategy (Summary)

1

2

Redeﬁne the positioning of each business
Advertising Business

Achieve the proper size to make this a
proﬁt-generating businessMedia Business

Position this business at the very top of upstream
information ﬂows

Energy BusinessContinue growth and aim for consistent proﬁtability,
making this business the primary source of growth

Optimization of human resources
Reallocation of people, HOPE, INC s largest and most valuable resource

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

21

Business Development and Growth Phases

Business creation

LaunchGrowthMaturity

DeclineEarnings

Advertising Business

Energy BusinessMedia BusinessTime

0 - 1 creation

1 - 10 search

10 - 100
expansion

100 - 110
proﬁt creation

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

110 seek new
innovations

22

Trend in Operating Proﬁt

1,050

850 - 950

（Millions of yen）

850

650

Make investments

Generate earnings

450

250

145

50

3

87

56

23

(32)

0

(121)
(150)

FY2013

FY2014FY2015FY2016FY2017

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

FY2018FY2019FY202023

Advertising Business

Market Summary

HOPE, INC. created a new market with its advertising business, the company s original activity,and has provided advertising services to local governments for about 15 years.
HOPE, INC s share of this market is about 16%.
The advertising market in Japan

5.9 trillion

Approx. ¥note1

The local government advertising market

14.0 billion

Approx. ¥2.2 billion

Approx. ¥

note2

note3

Target market

About

16% of the target market

Note 1: Source: Survey of Selected Service Industries (May. 2019), Ministry of Economy, Trade and Industry
Note 2: Estimate of target market size assuming that all local governments used advertising services
Note 3: FY2019 advertising business sales (excluding contract production of public info publications)

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

24Advertising Business

Growth Strategies

Achieving the proper size of this business by accepting orders for a smaller number of media
while raising the gross proﬁt of each medium with the goal of making advertising a
proﬁt-generating business.
■ Gross proﬁt
per medium

Net sales（Millions of yen） Gross proﬁt per medium

2,500

0.6

Approx. ¥0.55 million

Approx. ¥0.51 million（Millions of yen）

2,000

0.5

Approx. ¥0.43 million
Approx. ¥0.37 million

0.4

1,500
0.3

Approx. ¥0.30 million

1,000

0.2

500

0.1

Net sales note
Gross proﬁt per medium

00FY2016FY2017FY2018FY2019FY2020Note: Advertising business sales (excluding contract production of public information publications)

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

25

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)

Company

note 1

Approx. ¥ 8.68 trillion
Approx. ¥1.52 trillion
note 2

Approx.

¥0.1 billion

note 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

Note 1:
Note 2:
Note 3:Calculated by HOPE, INC. using Summary of Guide to Contracts in the Public Sector ‒FY2018, The Small and Medium Enterprise Agency
HOPE, INC. estimates based on FY2018 Administrative Project Review, Ministry of Internal
Aﬀairs and Communications
FY2019 media business sales

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

26

Media Business

Growth Strategies

Position this business at the very top of
upstream information ﬂows to serve asa link for public-private sector collaborationand for ties between local governments

L o cal g o vt .

Contribute to market growth

Monitor/collect info

Monitor･ Social issues･ Need for the useof private sector
partners

Co mpani es

Need for ways
to contact local
governments

Actively provide various 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. All Rights Reserved.

27

Energy Business

Market Summary

Energy is the driver of growth ‒ The goals are more business volume growthand consistent proﬁtability＋ Leverage current

business with local
governments

Submit bids for many new contracts by using company
registrations and other measures
Japan s electricity market

15 trillion

Approx. ¥note 1

Electricity sales to local governments

1 trillion

Approx. ¥note 2

7.3 billion

Approx. ¥note 3

Target market

HOPE, INC. serves less than 1%of the target market

Note 1: Source: Electricity and Gas Market Surveillance Commission
Note 2: The target market as deﬁned by HOPE, INC.
Note 3: Expected total sales of energy supplied for contracts received in FY2019

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

28

Energy Business

Growth Strategies

HOPE, INC. made a full-scale start of the energy business in FY2019 but was unable to bid
for many contracts because of the inability to meet past experience and other requirements.
The number of bids increased in FY2020 due to the ability to meet the requirements for
submitting bids for more contracts.
■ Number of bids submitted (only contracts where HOPE, INC. was eligible)
FY2019 actual (contracts)

FY2020 plan (contracts)

1,266
142

Approx. 1,000

3,230

Approx. 3,500

Successful bids
Bids submitted
Did not submit bids

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

29

TotalGrowth Strategies

Optimization of human resources
Reallocation of people, HOPE, INC s largest and most valuable resource■ Number of employees (regular employees)

3

0
02
FY
2

0

0
02
FY
2

9
01

8

9

0

0

FY
2

02
FY
2

01
FY
2

01
FY
2

3

2

1

01

0

0

0

9

20

8

20

4

2

5

6

01

40

40

4

02

60

5

8

FY
2

60

6

8

80

10

6

01

100

7

FY
2

80

7

12

9

100

8

(Employees)(Employees)(Employees)

120

119

12

FY
2

120

9

01

140

128

14

(Employees)

140

Energy Business

9

FY
2

160

10

144

8

160

162

01

162

FY
2

169

FY
2

180

Media Business

Advertising Business

Total*Number of regular employees at the end of FY2018 and FY2019 and at the beginning of FY2020

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

30

Operating an advertising business specializing in local governments gives HOPE, INC. valuable
experience and knowledge for developing and providing new services that precisely
match the needs and issues of local governments.

Local government
IssuesAdvertising BusinessMedia Business

Energy Business……

A source of revenue

Public-private sector
collaboration

Cost reduction……

A source of value for society
Copyright (C) 2020 HOPE, INC. All Rights Reserved.

31

FY2020 Investor Relations Activities
Overseas IR activities have been canceled because of COVID-19, but the FY2020
goal for meetings with institutional investors has been achieved.

■ Number of institutional investor visits
70

Achieved the goal of 50 visits
60（Visits）

50

40

60

30

20

10

15

9

0

FY2017FY20186FY2019Copyright (C) 2020 HOPE, INC. All Rights Reserved.

FY2020（plan）

32

Ⅲ．Company overview

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

33

Corporate Philosophy

Providing new forms of value to citizens
through local governments andaim for more growth of our businessand our people

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

34

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

170 (as of the end of March 2020, including temporary employees)

Business

Providing services specializing in local governments(Advertising Business, Media Business, Energy Business)

Head oﬃce

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

History

Feb. 2005

FoundedAug. 2014

Started BtoG marketing business

Jun. 2006

Launched Smart Resource Service

Jun. 2016

Listed on TSE-Mothers and FSE Q-Board

Sep. 2013

Launched Smart Creation Service

Dec. 2017

Issued the ﬁrst edition of Jichitai Works

MachiletMar. 2018

Registered as an electricity retailer andJul. 2014

Launched Machiiro, an app thatlaunched GENEWAT

connects local governments and local
residents

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

35

Business Segments and Services
Advertising Business
Smart Resource Service

Smart Creation Service

Ads in public info publications,banner ads, etc.

Media BusinessmamaroMachiletEnergy Business

B to G Marketing
Jichitai Works

Jichitai Clip

*Beginning with FY2020, Machiiro has been moved from the media segment to others.
*The mamaro baby care cubicle service is provided by Trim Inc., which developed and manufactures this cubicle. HOPE, INC. has an alliancewith Trim that allows submitting proposals to local governments for the use of mamaro. Trim owns the intellectual property rights for mamaro.

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

36

Advertising BusinessCorporate Philosophy

Localgovernment
assets・Public info publications,
local govt. websites

Providing new forms of value to citizens
through local governments

Utilization

Additional local
government
revenue

・Use of media space

・Information distributed to residents■ Value provided
Local govt.

・Free joint local govt/
HOPE, INC. publications

A source ofrevenue

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

Opportunities
for PR

Companies

37

in their publications

A new source of revenue for local governments
Local governments sell ad space■ 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︒松挨 拶 で 始 ま っ た 株 主 総 会︒松

︵社内取締役4名・社外取締役

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︑各ました︒

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

社長と森さんが台本なしのアりました︒

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 プには︑第二部として︑よりホー

わ れ︑賛 成 多 数 で 可 決 さ れ ま

プへの理解を深めていただくた︒

O・部 長 陣 の 紹 介︒そ れ ぞ れCT

ま ず は︑各 部 署 の 長 で あ る

ためのパートも用意されましした︒︵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

サービスの現況を伝える事業

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

27

続いての

27

が執り行われました︒

9月

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17

4 名・社外取締役 1 名

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︑た株主総会。松山監査役からの監査報告、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︒

続いての

上地さん司会のもと、社長の挨拶で始まった︒

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38
Copyright (C) 2020 HOPE, INC. All Rights Reserved.

24

17

上地さん司会のもと、社長の挨拶で始まっ

24☎000-000-0000

2017

Ad

Others■■■■■■■■■■■■■■■■■■

××××××Ad

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

Companies

Sale ofad space
Local govt.

Purchase ofad space

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

Smart Resource Service
Advertising Business 1

Advertising Business 2

Smart Creation Service(Machilet)

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

Local govt.

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. All Rights Reserved.

39

Advertising BusinessContracts with Local Governments

Smart Resource Service

500

1,000

462

458

449

Smart Creation Service (Machilet)

839
693

800

400

Approx.
730

300

240

200

(Pamphlets)(Contracts)

309
600

325

400

544

an

20
20

pl

9
FY

20
1
FY

8
20
1
FY

17
20
FY

16
20
FY

20
20
FY

111

3Q

FY

FY

FY

FY

20
19

0

20
18

0

20
17

200

20
16

100

(1Q-3Q orders)*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, including pamphlets planned to be issued.

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

40

Advertising Business

Major Business Characteristics

Smart Resource Service
1

Smart Creation Service (Machilet)

Bids used to purchase products

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

The production and sales period starts

due to bids of other companies, etc.

2

Most production and sales
at the same time of the year
after signing contracts with local governments

2

Seasonal nature of purchases
and inventory risk

Large pct. of sales in the fourth quarter
About 80% of pamphlets are issued between Apr. and Jun.
▶Most sales and cost of sales are recorded in the fourth quarter・Most Smart Resource purchases are single
transactions for an entire year (Apr. to Mar.),resulting in risk for holding large inventories

Production and sales period

Eﬀect on the next ﬁscal year

300

・Most purchases using bids submitted during
the peak season for governments. contract bids will havean eﬀect on the next ﬁscal year all the way to Mar.

(Pamphlets)

200

100

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

9
20
1
n.
Ju

20
19
ay

pr
A

M

.2
01
9

01
9
ar

.2

9
M

20
1
b.
Fe

20
19
n.

8
01
.2
ec
D

Ja

8
ov

.2

01

8
.2
ct
O

2018

N

01

18
20
p.
Se

01
8
.2
ug
A

l.

20
18

0
Ju

3

Pamphlets issued in FY2019
400

2019

41

Media BusinessCorporate Philosophy

Local govt.
information

Providing new forms of value to citizens
through local governments

AccesspointsUse the private■ Value provided
Local govt.

sector tosolve issues

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

Public-private
sectorcollaboration

Opportunity tocollaborate withpublic sector

Companies

42

Media Business 1

Jichitai Works

A govt. magazine with new info and ideas

A HOPE, INC. publication

with useful info and ideas

Local govt.

Collect
information

Interaction
withlocal govt.

Provideinformation

Payment
for ad space

Companies

relating for jobs

for local govt. employees■ Issued four times
every year1

One of the largest circulations in Japan■ Issued as needed

A comprehensive info magazine for local govt.
employees; circulation of up to 70,000,
one of the largest in Japan

2(Topic-speciﬁc editions)
Highly specialized
content for a speciﬁc
subject

Extensive coverage

Examples・Tourism/

Foreign Tourist Edition

・Disaster Readiness/

Crisis Management Edition

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

3

Upgrading sharing of knowledge

Magazines include examples of innovative ideas, aStandard format

variety of know-how and other content for improving
govt. services throughout Japan

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

(Special editions)
Each special edition has
a single advertiser andall content involves theadvertiser s products
and services

Examples・Disaster Readinessx ICT Special Edition

・Cabinet secretariat promoted
Evidence-Based Policy Making
Special Edition

43

Media Business 2

BtoG Marketing

Market need survey and sales
services for local governments

Support forcompanies withproducts and services
for local govt.

Leveraging our relationships with local governments
Reports,other info

Local govt.

Sales agent,
research, otherservices

Companies

Requests forassistance■ Contracted Services (Examples)● Sales agent for translation tool………………… 100 municipalities● Disaster response product market survey ……… 154 municipalities● Sales agent for oﬃce eﬃciency tool ………… 100 municipalities● Smart city market survey ………………………………………… 500 municipalities● Production and distribution……………………… 1,788 municipalities
of marketing materials● Emergency response service…………………………………… 31 municipalities
market survey● Emergency preparedness item…… 11,000 departments in charge
packaging● Direct marketing telemarketing● Medical services market survey…………………100 municipalities● Sales agent for welfare services …………………… 60 municipalities

100 municipalities x 4 times…………
600 municipalities x 1 time

● Employee communication tool…………………………… 500 municipalities
sales agent● Production of marketing ﬂyers for local governments

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

44

Media Business 3

Machiiro Jichitai Clip

An app linking local governments and residents● Sends the latest info from the registered local govt.
● Nationwide local govt. public info publications● Content for local governments and regions

Machiiro■

541,849

cumulative downloads■

897cumulative

local govt. contracts

Local govt.
share of about 50％* Machiiro screen sample

Owned media● Roundup posts
involving local govt.
● Unique activities
and public info publication proﬁlesJichitai Clip

● Articles about HOPE, INC. businessactivities*The Machikago app, which distributes local information about raising children, will stop operating on Jun. 30, 2020.

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

45

Media Business

12

Jichitai Works Magazine Issues

Special editions
Topic-speciﬁc editions

11

Standard editions

・Tourism/Foreign Tourist Edition

10

4(Issue)8・Disaster Readiness/
Crisis Management Edition
・Home Town Taxes Edition
・Tourism/Foreign Tourist Edition Vol. 2

7・Disaster Readiness/
Crisis Management Edition Vol. 2
・Education and ICT Edition
・Tourism/Foreign Tourist Edition Vol. 3

6・Disaster Readiness/
Crisis Management Edition Vol. 3

3
5

4

4

2

2

2

0

FY2018FY20191Q-3Q FY2020

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

46

Energy BusinessCorporate Philosophy

Local govt.
electricity use

Providing new forms of value to citizens
through local governments

New electricity
service

Lower cost ofelectricity■ Value provided
Local govt.

Cost reduction

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

47

Energy Business

GENEWAT uses the new perception ofStart of the electricity
sales businesselectricity as a

generic product for supplying electricity at a lower pricein order 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. All Rights Reserved.

Schools

City halls

・
・
・

48

Energy Business

1

Main Business Characteristics

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 dependingon the cost of buying electricity, the cost 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 over many years in the advertising business

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

49

Additional Local Govt. Revenue

Since HOPE, INC s inception, the advertising business has
generated revenue of about¥7.66 billion for clients・ Smart Resource Service has paid local governments

about ¥7.03 billion

・ Machilet has reduced local govt. costs by about ¥0.63 billion(From HOPE, INC s inception through 3Q FY2020)

Cost reduction of about¥11.5 billion

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

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

50

Main Shareholders(As of the end of 2Q FY2020)■ Top 10 shareholders■ Number of shares and shareholders
Total number of authorized shares

4,712,000 shares

Number of shares issued

1,394,200 shares

Number of shareholders(with voting rights)

1,126■ Shareholder distribution by type of shareholders
Other Japanese entities 1.1%

Overseas entities 7.9%

Financial institutions/securities companies

7.2%

Company
executives*
Individuals,
others40.8%* Includes their private asset managers

43.1%

No.

Name of shareholders

Number of shares held

1

E.T. Co., Ltd.

321,100shares

2

Takayasu Tokitsu

267,500shares

3

Masaki Kuge

72,000shares

4

Japan Trustee Services Bank,
Ltd. (Trust Account)

51,100shares

5

BNYM SA/NV FOR BNYM
FOR BNYM GCM CLIENT
ACCTS M ILM FE

41,058shares

6

Individual shareholder

28,700shares

7

Individual shareholder

25,100shares

8

GOLDMAN SACHSINTERNATIONAL

20,965shares

9

Individual shareholder

20,600shares

10

Individual shareholder

15,700shares

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

51

Stock Information
PeriodJun. 15, 2016 to Mar. 31, 2020

IPO price¥350

Initial price¥805（Jun. 15, 2016）

Highest price since IPO *¥3,585（Dec. 30, 2019）

Lowest price since IPO *¥220（Dec. 25, 2018）

FY2015FY2016FY2017FY2018FY2019

ROE

23.7％

23.9％

3.2％

（25.4）％

15.7％

PER*

―

27.9x

116.3x―

32.3x*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 (from the listing date to Mar. 31, 2020)
(¥)

3,500

Dec. 10
Announcementof 1-to-4 stock split

3,000
2,500
2,000
1,500

May 29May 7

Business alliancewith en-japan

Announcementof the 2nd shareholder beneﬁts
Aug. 8Aug. 9Earnings
announcement

Nov. 24
Alliance with
PR Times

Apr. 14

Jul. 20

Mar. 22

Announcementof the 1st
shareholder
beneﬁts

Sales partner
agreementwith COLOPL, Inc.

Launched
GENEWAT,an electricity
retailer business

Earnings
announcement

Sep. 3
Changed namesof business segments
and services

May 17
Announcement of the 3rd
shareholder beneﬁts

1,000
Feb. 6500

Commemorative
dividend

0Mar. 23
Comprehensive businessalliance with Trim

Jun. 19
Announcementof downward
earnings forecast

FY2017
Jun. 15, 2016

Aug. 9Mar. 29

Aug. 9

May 27

Sep. 26

Feb. 10

Earnings
announcement

Joint investment in Yame
Satoyamachintai Co., Ltd.

Earnings
announcement

Announcementof upward earnings forecast

Renewal of
corporate logo

Business alliancewith Eltes

FY2018Jun. 30, 2017

FY2019Jun. 30, 2018

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

FY2020Jun. 30, 201952

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 Oct. 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

Jan. 5, 2019

Information about the mamoro baby carecubicle on Kyodo TsushinMar. 24, 2017

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

Dec. 1, 2019

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

May 12, 2017

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

Dec. 31, 2019

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

Aug. 3, 2017

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

Jan. 31, 2020

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

Copyright (C) 2020 HOPE, INC. All Rights Reserved.

53

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 forward-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. All Rights Reserved.

54