assisting companies to continue and prosper …...assisting companies to continue and prosper...
Post on 20-May-2020
0 Views
Preview:
TRANSCRIPT
Assisting companies to continue and prosper through M&A
15.5.2020
IR ReportFinancial Results Report for FY2019
Year to March 2020 TSE 1st Section 2127
The information included in this presentation, such as industry trends and analysis, future plans and forecasts, is based on data available at the time of release. As the operating environment is subject to risks of large changes and uncertainties we make no guarantees regarding future plans or forecasts.
Nihon M&A Center
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 1
Table of contents
Our Vision P02
To Become the Top Global Integrated M&A Company P03
Overview of FY2019 Results P04
Original Forecasts Versus Actual Results P05
Income Statement Key Data P06
Sales and Profit by Business Segment P07
Balance Sheet Key Data P08
Transaction Volumes P09
Number of Transactions Closed P10
Number of Employees P11
Paid-in Stock Options and Performance Targets P12
10-year Results Record P13
Number of Transactions Closed in Q4 1/3-3/3 P14
FEATURE(1)-1 P17
FEATURE(1)-2 P18
FEATURE(2) P19
FEATURE(3) P20
FEATURE(4) P21
Dividend Payments and Market Capitalization P22
Dividend Per Share P23
Share Ownership P24
Forecasts for FY 2020, our response tothe spread of the coronavirus and its impact P25
Company Overview P26
Introduction P27
Corporate Profile (End-March 2020) P28
Corporate History P29
Business Model A Platform for the M&A Market P30
Initiatives to Optimize our Information Network P31
Our Workflow as an M&A Intermediary P32
Becoming an Integrated M&A Company P33
Our Organization Structure (from April 2020) P34
New Organization Structure (1) P35
New Organization Structure(2) P36
Human Resources Training P37
Human Resource Development Plan P38
Sustainability P39
CSR Initiatives P40
Distribution of the Age of Owners & Changes
in the Average Age of Retirement P41
Strong Increase in Succession Outside Family P42
Future Projections for the Numbers of
Companies and Workers P43
M&A Market Potential P44
Lastly P45
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 2
Our Vision
Aiming to become the top global integrated M&A companyBecame Japan’s top M&A intermediary companyStart-up phase
1991 2001 2011 2021 (year)
Became Japan’s topM&A intermediary company
TSE Mothers listing in 2006
TSE 1st Section listing in 20071991
founding
「 Aiming to become the
top global integrated
M&A company 」
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 3
To Become the Top Global Integrated M&A Company
Top market capitalisation in the M&A sector
Market capitalisationMotivation, personal development, remuneration
Employee satisfaction
Integrated solutionsProviding a full range of services, including PMI, strategic, financial and HR planning, as well as every kind of related activity
Expanding operations from very small customers to large ones (in different space
from investment banks) increasing our global presence
Broad coverage
Eight leading qualities related to M&A that our group
is aiming to achieve
*Our aim is not to gain top rankings in league tables or among investment banks – it is to become the top global integrated company by achieving the eight qualities described above.
Number of mandated projects, number of transactrions closed
Number of projects
Valuation, execution
Quality control
Creating new industry standardsfor M&A
Innovation
Optimal matching and post-merger integration
Customer satisfaction
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 4
Overview of FY2019 Results
Full-year
sales and ordinary profit at record highs
FY2019 FY2018 Change (yoy)
Pro
fita
bility
Sales (¥mn) 32,009 28,463 + 12.5%
Ordinary profit (¥mn) 14,467 12,533 + 15.4%
Gro
wth
Total number of employees 582 451 + 29.0%
Transactions closed
* Counting sell-side and buy-side mandates separately.
885 770 + 14.9%
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 5
Original Forecasts Versus Actual Results
Full-year ordinary profit : +15.4% yoy(For 10 consecutive years we exceeded original forecasts)
13,300
16,880
21,390
26,700
32,400
14,778
19,069
24,625
28,463
32,009
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2016/3期 2017/3期 2018/3期 2019/3期 2020/3期
当初予想
実績
Sales Ordinary profit
6,710
8,000
10,000
12,50013,500
7,116
9,070
11,670
12,533
14,467
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2016/3期 2017/3期 2018/3期 2019/3期 2020/3期
当初予想
実績
(¥mn)
Original forecast
Actual result
(¥mn)
Original forecast
Actual result
FY2015 FY2016 FY2017 FY2018 FY2019FY2015 FY2016 FY2017 FY2018 FY2019
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 6
Income Statement Key Data
(¥mn, %)
FY2019(Full-year Results) YoY
FY2019(Full-year Forecast)
FY2018(Full-year Results)
Total % % Total % Total %
Sales 32,009 100.0 +12.5% 32,400 100.0 28,463 100.0
(of which M&A sales) (31,191) (97.4) (27,965) (98.3)
Cost of sales 12,557 39.2 11,351 39.9(of which referral fees and outsourcing expenses) (4,748) (14.8) (4,328) (15.2)
(of which personnel and transportation costs) (7,714) (24.1) (6,857) (24.1)
Gross profit 19,452 60.8 17,111 60.1
SGA expenses 5,204 16.3 4,578 16.1
Operating profit 14,247 44.5 +13.7% 13,500 41.7 12,533 44.0
Non-operating income 228 0.7 21 0.1
Non-operating expenses 7 0.0 21 0.1
Ordinary profit 14,467 45.2 +15.4% 13,500 41.7 12,533 44.0
Extraordinary gain 214 0.7 - -
Extraordinary loss 0 0.0 17 0.1
Pretax profit 14,681 45.9 12,515 44.0Tax (corporation tax & other) 4,442 13.9 3,648 12.8
Net profit 10,239 32.0 +15.5% 9,120 28.1 8,867 31.2
Both sales and profits at record highsFull-year ordinary profit : +15.4% yoy
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 7
FY 2016 FY 2017 FY 2018 FY 2019
Total % Total % Y o Y Total % Y o Y Total % Y o Y
Sales ① 19,069 100.0% 24,625 100.0% 129.1% 28,463 100.0% 115.6% 32,009 100.0% 112.5%
Direct costs*1 ② 2,745 14.4% 3,716 15.1% 135.4% 4,493 15.8% 120.9% 4,842 15.1% 107.8%
Gross profit (before unallocated cost of sales}
16,324 85.6% 20,909 84.9% 128.1% 23,969 84.2% 114.6% 27,167 84.9% 113.3%
M&A sales 18,800 100.0% 24,321 100.0% 129.4% 27,965 100.0% 115.0% 31,191 100.0% 111.5%
M&A cost of sales*2 2,604 13.9% 3,578 14.7% 137.4% 4,328 15.5% 121.0% 4,748 15.2% 109.7%
M&A gross profit 16,195 86.1% 20,742 85.3% 128.1% 23,636 84.5% 114.0% 26,442 84.8% 111.9%
Other sales 269 100.0% 304 100.0% 113.1% 497 100.0% 163.5% 818 100.0% 164.5%
Other cost of sales 140 52.1% 137 45.1% 97.9% 164 33.1% 120.0% 94 11.5% 57.1%
Other gross profit 128 47.9% 167 54.9% 129.6% 332 66.9% 199.2% 724 88.5% 217.6%
Unallocated cost of sales*3 ③
4,233 22.2% 5,413 22.0% 127.9% 6,857 24.1% 126.7% 7,714 24.1% 112.5%
Gross profit(①-②-③) 12,090 63.4% 15,495 62.9% 128.2% 17,111 60.1% 110.4% 19,452 60.8% 113.7%
Sales and Profit by Business Segment
Breakdown of consolidated
sales and gross profit by M&A and other
*1 Direct costs include M&A cost of sales (referral fees, outsourcing expenses) and other cost of sales
*2 M&A cost of sales consists of referral fees and outsourcing expenses
*3 Unallocated cost of sales includes personnel costs, transportation costs, other
(¥mn)
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 8
Balance Sheet Key Data
(¥mn, %) End-March 2020 % Change End-March 2019
I Current assets 25,737 58.1 8,249 17,488
Cash and deposits 21,279 48.0 7,783 13,495
Other current assets 4,458 10.1 465 3,992
II Fixed assets *18,558 41.9 408 *18,149
Total assets 44,296 100.0 8,657 35,638
【資産】
(¥mn, %) End-March 2020 % Change End-March 2019
I Current liabilities 7,487 16.9 987 6,499
II Long-term liabilities 865 2.0 -1,008 1,874
Total liabilities 8,353 18.9 -20 8,373
Interest bearing liabilities 1,500 3.4 -1,000 2,500
Net assets 35,943 81.1 8,678 27,264
Retained earnings 35,753 80.7 6,550 29,203
Total liabilities and net assets 44,296 100.0 8,657 35,638
Maintaining a healthy balance sheet
Assets
Liabilities and net assets
*of which
long-term
deposits
14,000
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 9
Transaction Volumes
FY2016 FY2017 FY2018 FY2019
Full year
1Q 2Q 3Q 4QFull year
1Q 2Q 3Q 4QFull year
1Q 2Q 3Q 4QFull year
1
Total number of
transactions closed (by
number of companies) *1524 173 207 151 118 649 173 212 220 165 770 234 285 224 142 885
1-1Cumulative total for the
financial year- 173 380 531 649 - 173 385 605 770 - 234 519 743 885 -
2-1Number of sell-side
transactions closed262 83 104 76 60 323 89 106 106 81 382 118 145 114 72 449
2-2Number of buy-side
transactions closed262 90 103 75 58 326 84 106 114 84 388 116 140 110 70 436
2-3
Other transactions
closed
(eg restructuring)
- - - - - - - - - - - - - - - -
3-1 M&A sales (¥mn) 18,800 6,422 6,985 6,343 4,570 24,321 5,867 8,268 8,228 5,601 27,965 7,520 9,814 8,249 5,606 31,191
3-2M&A sales/transaction
(¥mn) *235.9 37.1 33.7 42.0 38.7 37.5 33.9 39.0 37.4 33.9 36.3 32.1 34.4 36.8 39.4 35.2
4-1Total number of transactions
closed *1267 91 105 76 60 332 89 110 115 88 402 119 145 114 73 451
4-2Cumulative total for the
financial year- 91 196 272 332 - 89 199 314 402 - 119 264 378 451 -
5
Number of sell-side
mandates pending
completion700 710 750 810 880 880 950 1,030 1,070 1,100 1,100 1,300 1,370 1,410 1,450 1,450
6Number of new sell-side
mandates624 760 986 915
(Units:numberof deals,
million yen)
Both full-year transactions closed and sell-side mandates pending completion at record highs
Full-year transactions closed : +14.9% yoy (770 ⇒ 885)
*1 The total number of transactions closed by number of companies represents the sum of the number of completed sell-side and buy-side mandated transactions;the total number of transactions closed represents the number of transactions in which we were involved.
*2 This number represents M&A sales (including retainers and other fees) divided by the number of transactions closed (number of companies)
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 10
Number of Transactions Closed
The number of transactions closed has been increasing steadily,
recording a historical high
338
420
524
649
770
885
0
100
200
300
400
500
600
700
800
900
2015/3期 2016/3期 2017/3期 2018/3期 2019/3期 2020/3期
Number of transactions closed
(Unit: transaction volume)
FY2015 FY2016 FY2017 FY2018 FY2019FY2014
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 11
End-Mar
2017End-Mar
2018End-Mar
2019End-Mar
20201 May2020
M&A consultants, specialists※1
217 264 328 390 415
Supportstaff ※1
45 55 88 138 178
⚫ Administrationheadquarters,Internal auditoffice
21 18 35 54 41
Total 283 337 451 582 634
283
337
451
582634
0
100
200
300
400
500
600
700
2017/3
期末
2018/3
期末
2019/3
期末
2020/3期
期末
2020年
5月1日
Number of Employees
Number of employees
646
Including number of people
newly hired and yet to start
at May 1
※2
※2
Strong increase in headcount, reaching 634 on May 1+29.0% yoy (451→582)at Mar 31
➡ Fulfilling medium-term growth plan with buoyant M&A
※1 The definitions of M&A consultants/specialists and Support staff included in the total number of employees is as follows.
M&A consultants, specialists: sales personnel (including at subsidiaries); Mid-cap Support Office members; legal and accounting professionals specialized in M&A transaction support
Support staff: employees in corporate planning department, training department, internal sales, sales support in subsidiaries, IT support, Office of the President
※2 From Q1 FY2020 the cost of staff in IT support and the Office of the President (15 in total as at 1 April) has been included under Cost of Sales rather than SGA and so the headcount now comes under Support staff.
* Seconded employees are not included in the number of employees shown above
Graduate recruitment scheme impact from FY2018.
End ofFY2016
1 May2020
End ofFY2017
End ofFY2018
End ofFY2019
(Unit: Number of people)
+12
SGA expenses
Cost of sales
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 12
PeriodConditions on ordinary profit
(annual)
Ratio of exercisable paid-in stock options
Notes on ordinary income
1. FY2018Over
11.5 billion yen
¥12.53 bn With (1) and (2)
30% of all paid-in stock
options allotted2. FY2019
Over
12.5 billion yen ¥14.46 bn
3. FY2020Over
13.5 billion yen
30% of all paid-in stock options allotted
4. FY2021Over
15 billion yen
40% of all paid-in stock options allotted
Paid-in Stock Options and Performance Targets
Achieved FY2020 ordinary profit target (¥13.5 billion) in FY2019
➡ Aiming for early achievement of ¥15 billion target
FY2018 result
FY2019 result
* The maximum share issuance from paid-in stock options is equivalent to 2.7% of outstanding shares, exercisable on or after 1 July 2022
* In the event that ordinary income dips below 9 billion yen at any time between FY2018 and FY2021 the paid-in stock options cannot be exercised (regardless of other conditions)
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 13
3,655 5,008
6,005 7,214
10,547
12,227
14,778
19,069
24,625
28,463
32,009
1,376 2,171 2,834 3,437
5,496 6,310
7,116
9,070
11,670 12,533
14,467
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2010/3期 2011/3期 2012/3期 2013/3期 2014/3期 2015/3期 2016/3期 2017/3期 2018/3期 2019/3期 2020/3期
売上高
経常利益
10-year Results Record
10th consecutive period of higher sales and profit
Reach ¥5 bn
(¥mn)
Sales
Ordinary profit
Reach ¥10 bn
FY2018FY2016FY2015FY2014FY2013FY2012FY2011 FY2017FY2009 FY2010 FY2019
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 14
Number of Transactions Closed in Q4 (1/3)
Selling company Acquiring companyTransaction type
Industry classification Region Industry classification Region
1 Metal parts wholesale Kansai Metal parts wholesale Kanto Stock transfer
2 Manpower dispatching Kansai Manpower dispatching Kanto Stock transfer
3 Truck transportation Chugoku, Shikoku Truck transportation Kyushu, Okinawa Stock transfer
4 Electric components manufacturing Kanto Electric components manufacturing Kanto Business transfer
5 Hospital Hokkaido, Tohoku Hospital Hokkaido, Tohoku Equity scheme
6 Packaging materials wholesale Kanto Packaging materials wholesale Kanto Stock transfer
7 Printing Kanto Printing Kanto Stock transfer
8 Clinic Kansai Clinic Kansai Business transfer
9 Customised software development Tokai, Hokuriku Customised software development Kanto Stock transfer
10 Civil engineering contractor Kansai Other construction work Chugoku, Shikoku Stock transfer
11 Property related services Hokkaido, Tohoku Property development / sales Kanto Stock transfer
12 Restaurants Kanto Restaurants Kanto Stock transfer
13 Nursing and welfare Kanto Manpower dispatching Kanto Stock transfer
14 Web marketing Kanto Warehousing Kanto Other
15 Manpower dispatching Kansai Manpower dispatching Kansai Stock transfer
16 Restaurants Kansai Restaurants Kansai Stock transfer
17 Corporate services Chugoku, Shikoku Truck transportation Hokkaido, Tohoku Stock transfer
18 Metals product wholesale Kanto Metals product processing Kansai Stock transfer
19 Mold manufacturing Kanto Printing Kanto Stock transfer
20 Plant engineering Kanto Pipe contractor Kanto Stock transfer
21 Pharmaceutical related Kanto Food manufacture Kansai Stock transfer
22 Pharmacy / drugstore Hokkaido, Tohoku Pharmacy / drugstore Kanto Stock transfer
23 Education Kyushu, Okinawa Education Kanto Stock transfer
24 Pharmacy / drugstore Chugoku, Shikoku Pharmacy / drugstore Kansai Business transfer
25 Hospital Hokkaido, Tohoku Hospital Kanto Equity scheme
73 transactions closed, 142 by number of companies
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 15
Selling company Acquiring companyTransaction type
Industry classification Region Industry classification Region
26 Construction materials wholesale Kyushu, Okinawa Construction materials wholesale Kyushu, Okinawa Stock transfer
27 Plant engineering Kansai Civil engineering contractor Kanto Stock transfer
28 Truck transportation Kansai Truck transportation Tokai, Hokuriku Stock transfer
29 Sales promotion KantoDaily goods manufacturing /
wholesaleKoshinetsu Stock transfer
30 Printing Tokai, Hokuriku Printing Tokai, Hokuriku Stock transfer
31 Civil engineering contractor Chugoku, Shikoku Property management / sale Chugoku, Shikoku Stock transfer
32Daily goods manufacturing /
wholesaleTokai, Hokuriku Furniture wholesale Tokai, Hokuriku Stock transfer
33 Construction rental / leasing Tokai, Hokuriku Construction rental / leasing Kanto Stock transfer
34 Civil engineering contractor Koshinetsu Civil engineering contractor Hokkaido, Tohoku Stock transfer
35 Education Kyushu, Okinawa Education Kyushu, Okinawa Stock transfer
36 Building construction Kanto Property development / sales Kanto Stock transfer
37 Daily goods manufacturing Kanto Metals product processing Kanto Stock transfer
38 Food wholesale Tokai, Hokuriku Food wholesale Kanto Stock transfer
39 Restaurants Kanto Food retail Kansai Stock transfer
40 Pharmacy / drugstore Tokai, Hokuriku Pharmacy / drugstore Kanto Stock transfer
41 Customised software development Kanto Customised software development Kansai Stock transfer
42 Pharmacy / drugstore Chugoku, Shikoku Pharmacy / drugstore Kansai Stock transfer
43 Daily goods wholesale Kanto Chemical manufacturing Hokkaido, Tohoku Stock transfer
44 Can sheet metal Kyushu, Okinawa Slaes promotion Kyushu, Okinawa Stock transfer
45 Pharmacy / drugstore Kyushu, Okinawa Pharmacy / drugstore Kyushu, Okinawa Stock transfer
46 Exterior finish work Kanto Building construction Tokai, Hokuriku Stock transfer
47 Electrical and telecoms contractor Kansai Electrical and telecoms contractor Kansai Stock transfer
48 Truck transportation Tokai, Hokuriku Truck transportation Kanto Stock transfer
49 Warehousing Kansai Warehousing Kansai Stock transfer
50 Cosmetics manufacturing Kanto Cosmetics manufacturing Kanto Stock transfer
Number of Transactions Closed in Q4 (2/3)
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 16
Selling company Acquiring companyTransaction type
Industry classification Region Industry classification Region
51 Hospital Tokai, Hokuriku Hospital Kanto Equity scheme
52 Building construction Chugoku, Shikoku Building construction Kyushu, Okinawa Stock transfer
53 Recycling business Tokai, Hokuriku Other retails Kansai Stock transfer
54 Interior finish work Koshinetsu Interior finish work Koshinetsu Stock transfer
55 Automotive retail Kanto Automotive retail Tokai, Hokuriku Stock transfer
56 Construction related services Koshinetsu Construction related services Kanto Stock transfer
57 Plant engineering Tokai, Hokuriku Pipe contractor Kanto Stock transfer
58 Agricultural product manufacturing Kyushu, Okinawa Other wholesale Kyushu, Okinawa Stock transfer
59 Pipe contractor Hokkaido, Tohoku Pipe contractor Hokkaido, Tohoku Stock transfer
60 Beauty salon Kansai Beauty salon Kansai Stock transfer
61 Resin parts processing Kansai Resin parts processing Kansai Stock transfer
62 Proprietary software development Tokai, Hokuriku Customised software development Koshinetsu Stock transfer
63Daily goods manufacturing /
wholesaleKansai
Daily goods manufacturing / wholesale
Kansai Stock transfer
64 Civil engineering contractor Hokkaido, Tohoku Civil engineering contractor Kanto Stock transfer
65 Civil engineering contractor Hokkaido, Tohoku Civil engineering contractor Hokkaido, Tohoku Stock transfer
66 Electric components manufacturing Kanto Electric components manufacturing Kansai Stock transfer
67 Printing Kanto Printing Kanto Stock transfer
68Daily miscellaneous goods
manufacturingChugoku, Shikoku Furniture wholesale Kansai Stock transfer
69 Electrical and telecoms contractor Tokai, Hokuriku Electrical and telecoms contractor Tokai, Hokuriku Stock transfer
70 Civil engineering contractor Koshinetsu Civil engineering contractor Koshinetsu Stock transfer
71 Pharmacy / drugstore Kanto Pharmacy / drugstore Hokkaido, Tohoku Business transfer
72 Property management / sale Hokkaido, Tohoku Property management / sale Hokkaido, Tohoku Stock transfer
73 Architect Kanto Architect Kanto Stock transfer
Number of Transactions Closed in Q4 (3/3)
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 17
To revitalize regional economies it is important to ensure:Continuity of local SMEs and maintenance of employment through succession planning
Establishment of great companies to attract the younger working population
FEATURE(1)-1
Helping to revitalize regional economies
Revitalizing regional economies
Japan Investment Fund
Supporting growth
TOKYO PRO MarketSponsoring listing
Enhance trust through IPO
Creatingwinners
Attractingworkers
Businesssuccession
Maintainingemployment
Strategy
1
Strategy
2
Tw
o s
trate
gie
s
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 18
FEATURE (1)-2
TOKYO PRO Market listing sponsorship
Complete first IPO as J-Adviser
Company Name Agent Inc.<7098>
Industry Staffing services
Increasing opportunities for new M&A projects through creatingsustainable relationships with mid-cap companies
Our actual results of listing support J-Adviser contracts progress
◼ 23 December 2019
One of our sponsored companies promoted to TSE Mothers
◼ 28 April 2020 First company IPO
In 7 months since our launch
23J-Adviser mandates secured
➡ Preparing for IPOs
We wish to help invigorate TOKYO PRO Market, supporting companies to aspire to growth as they progress to other stock markets, expand overseas and launch new businesses
J-Adviser target “To reach 100 mandates” (by March 2023)
Company Nameglobal bridge HOLDINGS Co., Ltd.<6557>
Industry Childcare, Nursing care, ICTTPM: Launched in 2009.
34 companies are now on the TPM section as of May 15, 2020.
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 19
5070
110
192
352
0
50
100
150
200
250
300
350
400
16/3期末 17/3期末 18/3期末 19/3期末 20/3期末
2,538 2,709
7,039
24,436
42,834
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
16/3期末 17/3期末 18/3期末 19/3期末 20/3期末
FEATURE (2)
Promoting training for M&A support specialists and greater knowledge of M&A → Target large increase in transactions completed
User registrations Transactions completed
Strong increase in the cumulative number of registered users and
transactions completed. The total number of companies for sale has
exceeded 2,000 for the first time.
TransactionsPeople
End-Mar2016
End-Mar2017
End-Mar2018
End-Mar2019
End-Mar2020
End-Mar2016
End-Mar2017
End-Mar2018
End-Mar2019
End-Mar2020
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 20
FEATURE (3)
Opening of Shin-Nihonbashi office
New head office for our subsidiary Corporate Value Laboratory Inc. and office for ISR (internal sales division)
⚫ Support for family time(childcare, nursing)
System for working at home, paid leave for nursing children, extension of period for part-time work
⚫ Work-life balance supportSystem for flexible work times
⚫ Female employee ratio 91.7% (end-March 2020)
Example of Improving Employment Practices(Corporate Value Laboratory Inc.)
Enabling us to increase staff and diversify working practices as we expand our fields of business
▲ CEO Kyoko Yonezawa
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 21
What size sellers does Nihon M&A Center support ?
90% is composed of companies with sales of 2 billion yen or less.
We offer different services according to a company’s size.
➡ The focus is on M&A support for small- and medium-sized companies.
There are numerous potential clients.
Sales in a seller Number of employees in a seller
More than 5 to 10
employees, 20.2%
5 employees or less, 11.5%
More than 20 to 30
employees, 10.8%
More than 30 to
50 employees,
15.0%
100 m yen or less,
7.5%
More than 100 m to
200 m yen,
18.1%
More than 200 m to
300 m yen,
16.0%
More than 300 m to 400 m yen,
9.9%
Calculated from deals closed in FY 2019
More than 500 m to 700 m yen,
14.4%
More than 50 to
100 employees,
8.1%
Average : 785 million yen, Median : 392 million yen
FEATURE (4)
More than 1 bn
to 2 bn yen,
9.6%
More than 400 m to 500 m yen,
8.5%
More than 700 m to
1 bn yen,
7.7%
More than 2 bn yen,
8.3%
Average : 30 employees, Median : 16 employees
More than 10 to 20
employees, 29.7%
More than 100 employees,
7.6%
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 22
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1,959
2,481
3,295
3,699
4,239
40.5 40.2 40.3
41.741.1
30
32
34
36
38
40
42
44
46
48
50
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2016/3期 2017/3期 2018/3期 2019/3期 2020/3期
(%)
配当総額
配当性向
Dividend Payments and Market Capitalization
Aiming for sustained long-term growth
Dividends and the pay-out ratio Market capitalization(From end-Apr 2015)
※To be determined at the general meeting of stockholders.
※ (¥bn)(¥mn)
DividendsPay-out Ratio
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 23
9.75
13.5
17.00
22.00
23.00
4.75
6.75
8.50
11.00 11.00
0.00
5.00
10.00
15.00
20.00
25.00
2016/3期 2017/3期 2018/3期 2019/3期 2020/3期
(予想)
Unit:¥
中間配当実績
期末配当実績
当初年間配当予想
当初中間配当予想
Year-end dividend (forecast)
26.00
Dividend Per Share
Dividend forecast at start of year
Dividend paidPay-out
ratio
(%)Dividend Breakdown Dividend Breakdown
FY 2019
(forecast)23.00 yen
Interim 11.00 yen
Year-end 12.00 yen
Interim 11.00 yen
Year-end 15.00 yen41.1%
FY 2018 22.00 yen11.00 yen
11.00 yen23.00 yen
11.00 yen
12.00 yen41.7%
FY 2017 17.00 yen8.50 yen
8.50 yen20.50 yen
8.50 yen
12.00 yen40.3%
FY 2016
13.50 yen6.75 yen
6.75 yen15.50 yen
6.75 yen
8.75 yen40.2%
FY 2015
9.75 yen4.75 yen
5.00 yen12.25 yen
4.75 yen
7.50 yen40.5%
Year-end dividend
12.25
Year-end dividend
15.50
Year-end dividend
20.50
Year-end dividend
23.00
An increased dividend than original forecast for FY2019 has been announcedConsolidated payout-ratio : 41%
※1 Adjusted for two-for-one share splits on 1 Oct 2016 and 1 Apr 2018
26.00 yen
※2 To be determined at the general meeting of stockholders
※2 ※2
※2
Actual FYE dividends
Actual interim dividends
Original forecasts for annual dividends
Original forecasts for interim dividends
FY2015 FY2016 FY2017 FY2018 FY2019(forecast)
※2
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 24
Share Ownership
Foreign share ownership has now risen to 51.6%
Number of shareholders : 17,823
number of shares issued : 166,022,800
Foreign
51.6% Financial institutions
24.8%
Individuals19.5%
Other Corporations2.3%
Treasury stock1.8%Other Corporations
2.7%
Treasury stock1.8%
Foreign
46.8% Financial institutions
26.4%
Individuals22.3%
31 March 202030 September 2019
(of which trust banks and
life insurance companies circa 26%)
Number of shareholders : 16,229
number of shares issued : 166,065,200
(of which trust banks and
life insurance companies circa 24%)
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 25
Forecasts for FY 2020, our response tothe spread of the coronavirus and its impact
Forecast for year to March 20211
Principal responses to problems arising from the coronavirus 2
Impact of the coronavirus3
Meaningful calculations about the impact of the coronavirus are currently difficult. We shall announce full year forecasts as soon as there is sufficient certainty for doing so.
The priority is to ensure the wellbeing of our stakeholders. We are conducting our business in a way to minimise any risk of infection for our clients, partners and employees.
(We remain flexible to consider new measures depending on changing circumstances)
⚫ Postponement or cancellation of M&A seminars ⇒ Preparing webinars
⚫ Implementation of remote working
We encourage discussions with clients and contact with partner firms through methods such as video meetings and telephone conference calls.
We encourage use of cloud storage and virtual data rooms to exchange confidential documents and conduct due diligence.
⚫ Commencing preparations for increase in corporate restructuring projects
⚫ In April there was a growth yoy in the number of new mandates from buyers and sellers
⚫ With uncertainty over reduction in the coronavirus infection rate, however, from May onwards it is unclear how many transactions will be completed and new mandates gained
Company Overview
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 27
Introduction
Nihon M&A Center established as the leading M&A intermediary
firm between small and mid-cap companies
Enable long-term growthAchieve high
profitability
Help revitalize
regional economies
External environment
Business succession planning becomes a
chronic concern
Rising pace of industries restructuring
Wider understanding of growth strategies
M&A needs will intensifyin the future.
Rising concerns about employment
and socio-economic impacts*
The use of a unique M&A information network
Over 400 professional M&A consultants
A database with many years of accumulated information
Efficient collection of information for transactions
Strong ability to find appropriate partners
Strong ability to find appropriate partners
* According to Ministry of Economy, Trade and Industry (METI), ignoring business succession issues will lead to corporate failures such that in the space of a decade there could be the loss of 6.5 million jobs and a ¥22 trillion reduction in GDP
Rising of social needs.
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 28
Company name Nihon M&A Center Inc.
Established April 1991
Business outline M&A support for small and medium-sized enterprises (SMEs)
RepresentativesChairman and founder Yasuhiro WakebayashiPresident Suguru Miyake
Offices
Domestic 7:Tokyo headquarters, Osaka branch, Nagoya branch, Fukuoka branch, Sapporo sales office, Hiroshima sales office, Okinawa sales office
Overseas 3:Singapore office, Indonesia representative office, Nihon M&A Center Vietnam co., LTD
Paid-in capital ¥2.5 billionNumber of
shares issued 166,065,200
Market listingTokyo Stock Exchange
1st sectionStock code 2127
No. of employees(consolidated)
582(excluding 6 full-time directors)
Breakdown ofemployees by type
Consultants 390Other 192
Corporate Profile (End-March 2020)
Leading company in M&A intermediary services with a track record of over 5,000 completed transactions
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 29
Corporate History
2016年 4月
TPM(TOKYO PRO Market)
sponsor license
Createoverseasoffices
TSE 1st section
listing
TSE Motherslisting
Network of
regional financial
institutions
⚫ Chairman Yasuhiro Wakebayashi and President Suguru Miyake worked at Olivetti Japan. They had responsibility for sales of computers nationally to accounting firms and regional financial institutions. The current M&A network has evolved from their network at that time.
⚫ We established a nationwide M&A study group to expand our network with regional banks
⚫ formed a business alliance with Shinkin Central Bank, followed by a roll out of similar alliances with its subsidiary Shinkin Capital and shinkin banks throughout Japan
⚫ Nihon M&A Center Inc. was founded with eminent certified public accountants and tax accountants nationwide at the core. Accounting offices throughout the country were organized into a network of regional M&A centers.
⚫ Shares were listed on the TSE Mothers Stock Exchange on 10 October 2006.
⚫ The company's stock was transferred from TSE Mothers to 1st Section on 10 December 2007 (a year and two months from listing on TSE Mothers, the fourth fastest such transfer) We were
May 2000
October 2006
April 1991
899 regional M&A centers as at end-March 2020
Alliances with 98 regional banks and 215 shinkin banks as at end-March 2020.
This was the first listing of a company in Japan specializing
in M&A intermediary services for SMEs.
⚫ Start first overseas office in Singapore
⚫ Open Indonesia representative office (October 2019)
⚫ Form company in Vietnam (February 2020)
⚫ Commence IPO support service
December 2007
2019年 7月
★We have been profitable since the second year ofour history and have continuously paid a dividend
Company
founded
Prior to our
founding
1st inJapan
1st inJapan We were the first M&A intermediary services firm to list on the
TSE 1st Section.
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 30
Business Model A Platform for the M&A Market
Se
lle
rs
Info
rmatio
n
Bu
ye
rs
Regional financial institutions
Accounting firms
Seminars, websites, direct mail
Large financial institutions,venture capital,
private equity and consultancies
Regional financial institutions
313 nationwide
⚫ 90% of regional banks and 80% of shinkin banks
899 regional
M&A centers nationwide
Dire
ct in
fo
rmatio
n
Info
rmatio
nD
irect in
fo
rmatio
n
Nihon M&A Center
Top M&A information network
Large financial institutions,venture capital,
private equity and consultancies
Regional financial institutions
Regional financial institutions
313 nationwide
⚫ 90% of regional banks and 80% of shinkin banks
Accounting firms
899 regional
M&A centers nationwide
Seminars, websites, direct mail
Collaboration agreement figures as of end-March 2020
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 31
Initiatives to Optimise our Information Network
Collaboration agreements
with 98 (out of a total of 102)
899 Regional M&A centers
Large financial institutions
⚫ Nationwide M&A workshops for top tier regional banks
⚫ Bank of the Year award system
⚫ Branch manager training
⚫ Seminars for customers
⚫ M&A senior specialists training school
⚫ Monthly emails on projects
⚫ Secondment to us (circa 300 up to now)and vice versa
⚫ M&A newsletter
Accounting firms
Regional banks Shinkin banks
Lawyers,
accountants,
experts
Management consultants
Venture capitalPrivate equity funds
⚫ Business alliance with Shinkin Central Bank (Shinkin Capital)
⚫ Developing joint projects with Shinkin Capital
⚫ Events for information exchange branded “Shinkinbank family”
⚫ Award system
⚫ Seminars for customers
⚫ M&A senior specialists training school
⚫ Receiving seconded employees
⚫ M&A newsletter
Collaboration agreements
with 215 (out of a total of 255)
⚫ Secondment programme⚫ Head office senior management motivational discussions⚫ Training for branch managers
⚫ Merger and Acquisition Association of Japan membership benefits⚫ Support for future members
⚫ Mutual secondment programme
⚫ M&A senior expert training school
Collaboration agreement figures as of end-March 2020
⚫ Promotional materials for branch employees⚫ Seminars for customers⚫ Regular events to exchange information
⚫ Award system⚫ M&A senior specialists training school ⚫ M&A newsletter
• Regular meetings (international, management level, regional)
• Variety of workshops (future leadership; sales; corporate succession strategy)
• Publication of M&A news and journals
• Support for holding seminars
• Distribution of posters and pamphlets
Nihon M&A Center
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 32
Our Workflow as an M&A Intermediary
BuyerSeller
Presenting investment memorandum
Signing of confidentiality agreement
Explanation of teaser (anonymous)
Signing of advisory agreement
Provision of detailed information
Due diligence
Signing of letter of intent
Negotiation of price & terms
Management meeting, site visits
Negotiation of final terms
Signing of definitive agreement
Completion, settlement, announcement
Preparation of investment memorandum
Preparation of teaser (anonymous)
Company analysis, sector research, selection of potential buyers
Valuation
Provision of materials
Signing of advisory agreement
Consultation
Retainer
fee
Interim
fee
Retainer
fee
Success
fee
Success
fee
Nihon M&A Center
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 33
Becoming an Integrated M&A Company
Nihon M&A Center becoming a hub for specialized high quality group companies
M&A support services
Internet
matching
Private equityfunds
Nihon M&A Center
Batonz Co., Ltd.
Yano Research Institute Ltd.
Corporate Value Laboratory Inc.
Japan PMI consulting Inc.
Japan Private
Equity Co., Ltd.
Japan Investment
Fund Inc.
Full M&A support services
PMI consulting services
Internet matching service for micro enterprises
Private equity fund supporting business
succession
Private equity fund to support growth strategy
PMINegotiation,
closing
Introductions, dialogue with
principalsCompany valuation
Start ofproject
Market researchSuccession and asset consulting
ZUUM-A
Media
platform
operator
Information services
Corporate valuation
Launched July 2019
Business succession,
growth strategy consulting
market research
(Joint venture
with ZUU)
(Joint venture with
Kyodo News Group)(Joint venture with
Aoyama Zaisan Networks)
(joint venture with Development Bank of Japan)
(joint venture with Development Bank of Japan)
Business Succession Navigator Inc.
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 34
AdministrationH.Q.
Board of Executive Officers
ITS
olu
tion
sD
ep
t.
Co
rpo
rate
Ad
vis
ory
Offic
e
Me
dic
al
&N
urs
ing
Care
De
pt.
Ind
ustria
lR
estru
ctu
ring
De
pt.
Le
gal
Ad
vis
ory
Offic
e
Dire
ct
Mark
etin
gD
ep
t.
Co
rpo
ratio
ns
De
pt.
Chairman
Board of Directors
IRO
ffice
AccountingCh.
StrategyMgmt. Div.
TPMDiv.
Co
rpo
rate
Pla
nn
ing
Offic
e
Tra
nsactio
nM
gm
t.S
ec.
Mid
-Cap
Su
pp
ort
Se
c.
Law
ye
r / Ju
dic
ial s
criv
en
er
Stre
ng
the
nin
g o
f m
atc
hin
g a
ctiv
ities
CP
As /
Tax a
cco
un
tan
ts
Fo
cu
sin
g in
ind
ustrie
s
facin
g w
ith re
org
an
izatio
n
Me
dic
al a
nd
nu
rsin
g c
are
Dire
ct s
earc
h fo
r p
ote
ntia
l bu
ye
rs
Dire
ct m
ark
etin
g
Ne
two
rk s
earc
h fo
r p
ote
ntia
l bu
ye
rs
Priv
ate
eq
uity
M&
A
Pro
mo
tion
of M
&A
g
row
th s
trate
gy
Co
ord
inatio
n w
ith la
rge
fin
an
cia
l institu
tion
s
Co
ord
inatio
n w
ith
acco
un
ting
offic
es
Co
ord
inatio
n w
ith re
gio
nal
finan
cia
l institu
tion
s
Cu
sto
me
r satis
factio
n,
sale
s p
rom
otio
n, P
R
Info
rmatio
n s
yste
ms,
IT d
eve
lop
me
nt, d
ata
mark
etin
g
⚫IP
O s
po
nso
rsh
ip⚫
IPO
pro
mo
tion
⚫B
us. d
eve
lop
me
nts
⚫A
SE
AN
pro
mo
tion
⚫O
utb
ou
nd
M&
A p
rom
otio
n
StrategyPromotion
Mgmt.Div.
HR FirstMgmt.Div.
AllianceMgmt. Div.
RegionalFinancial
InstitutionsCh.
LargeFinancial
InstitutionsDiv.
General Planning H.Q.
Acco
un
tan
tsD
ep
t.
Re
gio
nal
Fin
an
cia
lIn
stitu
tion
sD
ep
t.
Larg
eFin
an
cia
lIn
stitu
tion
sD
ep
t.
Acco
un
tan
tsIn
form
atio
nD
eve
lop
me
nt
De
pt.
Co
rpo
rate
Stra
teg
yD
ep
t.
Priv
ate
Eq
uity
De
pt.
Gro
wth
Stra
teg
yD
ep
t.
Allia
nce
sD
ep
t.
ISR
Offic
e
Pro
ject
Activ
atio
nS
ec.
Sales H.Q.
IndustryFocusDiv.
CorporateAdvisory
Mgmt. Div.
Hu
man
Re
so
urc
es
De
pt.
Ge
ne
ral
Affa
irsD
ep
t.
Acco
un
ting
De
pt.
Related GroupCompanies
H.Q.
InternationalDiv.
IR
、ESG
Pro
mo
tion
for
ne
w m
an
date
s
Insid
e s
ale
s
Exam
inatio
n a
nd
pro
ce
ss
co
ntro
l of m
an
date
s
Activ
atio
n o
f slo
w-m
ovin
g p
roje
cts
Su
pp
ort b
y m
id-c
ap
sp
ecia
lize
d C
PA
s
Se
rvic
e fo
r liste
d
co
mp
an
ies
Our Organization Structure (from April 2020)
⚫S
trate
gy P
rom
otio
n⚫
Co
rpo
rate
Bra
nd
ing
⚫H
R s
trate
gy
⚫D
eve
lop
me
nt S
up
po
rt
Shareholders Annual General Meeting
Audit and other committees
President
Internal Audit Office
President Mgmt. H.Q.
Transaction Mgmt. Div.
Matc
hin
gM
gm
t.S
ec.
Sale
sP
lan
nin
gD
ep
t.
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 35
Improvedmatching
Industry segment specialisation
Direct contact with corporates
Collaboration with securities firms/ large banks/other financial
institutions
Collaboration with accountants/regional financial institutions
Sales Headquarters
Alliance Management Division
Strategy Management Division
Industry Focus Division
Added valuecreation
Generation of many first classmandates from our network
New Organization Structure (1)
Large FinancialInstitutions Division
Team for large financial institutions becomesone of 4 sales divisions
Strengthening of origination, the core growth driver
Independent sales division from FY 2020
⚫ Accountants
⚫ Accountants Information Development
⚫ Regional Financial Institutions
⚫ Large Financial Institutions
⚫ Corporations
⚫ Alliances
⚫ GrowthStrategy
⚫ Private
Equity
⚫ Industry Strategy
⚫ Direct Marketing
⚫ Industrial Restructuring
⚫ Medical and Nursing Care
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 36
New organisation structure(2)
⚫ Reduction of lead times in our mandates through greater accuracy of preparation phase and matching efficiency
⚫ Review of slow-moving projects
⚫ Strengthening of operational structure
⚫ Promoting mid-cap marketing
⚫ Increasing pipeline of opportunities
⚫ Building more local contact
New sales methodsOutbound M&A
promotion
Human resourceoptimization
Impeccable execution
TPM Division International Division
Human Resources FirstManagement Division
TransactionManagement Division
⚫ Strategic recruitment
⚫ Improved mentoring
⚫ Nurturing corporate
culture and identity
⚫ Evaluation of support
staff
⚫ Female work practices
⚫ Promotion of diversity
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 37
Human Resources Training
It takes 6-12 months to get an overall understanding of M&A, but we always have several M&A transactions on the go, enabling employees to gain a lot of practical experience in a short space of time
Subsidy system for training of new recruits and further development of key employees
Internal training External training
Training for new recruits Improvement for every level Regular training
⚫ Understanding of our company and management principals of our chairman
⚫ M&A project flow
⚫ Creating company profiles
⚫ Company valuation
⚫ Matching of companies
⚫ Use of databases for projects
⚫ Role playing
⚫ Success and failure analysis
⚫ M&A special structures
⚫ M&A by industry type (when required)
⚫ M&A related tax/legal regulation change
⚫ Sales technique
⚫ Off-sites with senior management
⚫ Future generation leadership
⚫ Leaders training
⚫ Presentations and public speaking.
Monthly training⚫ Compliance
⚫ Information security systems
Annual training⚫ Overseas visits(high performers)
⚫ Management principals explanation meeting・Training for all employees
⚫ Dale Carnegie course
⚫ Management training
⚫ Coaching
⚫ Ritsumeikan University Saionji leadership course
⚫ Lee Kuan Yew School of Public Policy short graduate programme
Education
subsidies
Training inexperienced employees to develop quickly into M&A specialists
Training M&A specialists to reach a more senior level
⚫ Bookkeeping Level 2⚫ Business succession,
M&A expert qualifications
⚫ Public accountant, tax accountant,social security officer,SME advisor and equivalents
⚫ Contribution to cost of purchase of specialist textbooks
⚫ English conversation
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 38
Human Resource Development Plan
A layered approach for thoroughness. We aim to achieve fast results from the training
layer
0
layer
1
layer
2
layer
3
layer
4Creating and implementing growth strategies for our company.
General managers and above.
Voluntary applicants and selected employees from fourth year of entry to assistant general manager level.
Reiwa trainingGaining knowledge through collaboration
between colleagues throughout the firm
Gaining practical knowledge and developing a
high-level perspective by vision sharing with
senior executives and management
Senior executives
Management
Future leaders
Selected new recruits
All new recruits
For
Goal
Senior executive officers and above.
Deepening awareness of future leadership responsibilities.
For
Goal
For
Goal
Developing a high-level perspective and receiving the education necessary to carryout one's role as a top-class businessperson.
Gaining management skills.
For
Goal
30 selected front office consultants with up to three years of experience at the company
To understand fully and put into practice our corporate knowledge culture, maximizing the performance of each individual
Core to strengthened training plan
Evaluation
Management interviews
Senior level offsites
Future leader offsites
(次世代管理職研修)We now provide training for newly appointed
administrative staff members internally rather than outsourcing – enabling to be tailored
to the company needs.
Selection of group leadersGaining management skills as group leader.
training for future administrators
Executive offsites
Management meetings
Gaining knowledge through collaboration between colleagues throughout the firm
“Challenge-Reiwa” training(Encourage refreshment of skills outside office hours)
For
Goal
Front office consultants with up to three years of experience at the company
Gaining ability to get advisory mandates from potential clients
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 39
Sustainability
Environmental Social and Governance (ESG) practice
Important topics Our main policiesEn
v
Society orientatedtowards recycling
Decreasing the environmental burden ⚫ Use of public transport, promoting use of IT, reduction of unnecessary printing
So
cia
l
Employment practices
Employee satisfaction
⚫ Employee reviews(twice per year), “secret letter” to CEO system、ranked fourth in the category of employee satisfaction in the 2018 Fisco institutional investor and analyst industrial research award(published on 18 February 2019)
Respect for human rights and promotion of diversity
Discrimination prohibited; promotion of activities by females; medium-term target of 30% for female employees across the group
System for increasing motivation ⚫ Stock option plan
Promotion of communication ⚫ Subsidies for events including tennis, basketball, 5-a-side football and running
Health and safetyCreation of a safe and healthy workplace
⚫ Health and stress checks, subsidies for spouse health checks, vaccinations to prevent influenza, health advice from occupational health and safety specialist
Human development Education system ⚫ (See pages 37-38 of this document)
Go
ve
rnan
ce
Corporate governance
Corporate governance systemRatio of 1:3 of non-executive directors, corporate governance system( https://www.nihon-ma.co.jp/corporate/businessbase.html ), establishment of committees for audit and other
Internal control systemEstablishment of internal regulatory system ( https://www.nihon-ma.co.jp/ir/pdf/report_governance1906.pdf ), strict scrutiny of M&A projects
10 guiding principals for compliance behaviour
⚫ Periodic training for all employees in the 10 selected guiding principals for compliant behaviour
Internal communication system ⚫ Employee communication protocols codified
Risk managementRisk management committee ⚫ Creation of risk management committee
Response to incidents⚫ Objectives (1)No highly serious incidents to occur (2)Strive to prevent
occurrence of incidents
Information securityInformation security maintained andISO27001accredition
⚫ Implementation of information security systems and oversight policies
⚫ Information security policy created (https://www.nihon-ma.co.jp/corporate/security_policy.html)
⚫ ISO27001international standard obtained ※All domestic branches, foreign offices excluded
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 40
CSR Initiatives
Our commitment to support amicable M&A contributes to the sustainable growth ofsociety by reinforcing mangement foundations and growth in employment
Other activities contributing to society
・Donations following natural catastrophes・Education support (scholarships) in areas impacted by natural
catastrophes・Cultural sponsorship(support for young artists in film production,
Noh, opera,photography and other)・Protection of designated Cultural Properties
Overview of our group CSR policaies
"Continuously improving our corporate value"
Enhancing the social contributions of our business operations through activities that involve corporate citizens
Clients
Partners
Global environmentEmployees
Shareholders
Business activities
Social issues
Activities with corporate citizens
Creating value
Providing solutions to
social issues
through business activities
Regional communities
¥
After 3 years¥945.5bn
Avoidance of
economic loss
¥338bnEmployment creation
25,310 people
In FY2018 we acted as an
M&A intermediary for 339 companies
After 5 years¥1,522.7bn
In 10 years¥2,801.1bn
FY2018 contribution to avoidance of economic loss ※1
Sell-side advisor for 339 transactions in which combined turnover of companies sold was ¥293.3bn
※1 Source: Yano Research Institute Ltd
“Contributing to sustainable social development"
Developing business operations to solve social
issues
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 41
Source: White Paper on Small and Medium Enterprises in Japan (26 April 2019)
Distribution of the Age of Owners & Changes in the Average Age of Retirement
Highest average age category of SME owners has risen to 69 (Figure1)Rising average retirement age (Figure 2)
0
5
10
15
20
25
15~19 20~24 25~29 30~34 35~39 40~44 45~49 50~54 55~59 60~64 65~69 70~74 75~79 80~
(%)
2015年2010年2005年2000年1995年2018年
61.3
66.1
67.5 67.8 67.762.6
68.1
69.870.7 70.5
56
58
60
62
64
66
68
70
72
30年以上前 20~29年前 10~19年前 5~9年前 0~4年前
(事業承継時間)
小規模事業者
中規模企業
The peak in owners average age has risen from 47 to 69 in 23 years
Age distribution of SME owners (in 5-year categories) Changes in owners average retirement age
Source: Small and Medium Enterprise Agency, Discussion forum for corporate revitalization, focus on succession (1st in series)
Data source: Corporate Profile Database (COSMOS 2) by Teikoku Databank, Ltd
Note: Since ages are in 5-year categories the peak on the chart is the same in 2015 and 2018, but underlying data shows the peak to have increased by three years in this period.
(Age)
(Age)
Small companies
Medium-size companies
5-910-1920-29Over30 0-4
Time of succession (number or years ago)
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 42
親族内承継
Strong Increase in Succession Outside Family
Succession outside family has increased to over 65%
Source: Small and Medium Enterprise Agency, Discussion forum for corporate revitalization, focus on succession (1st in series)
Relatives Children Relatives who are not children
OtherDirectors/employees who are not relatives
Outsiders
Shift in background of company presidents viewed by length of term of office
9.2
7.4
9.6
12.4
9.3
14.5
9.5
7.6
3.7
6.5
11.7
9.1
12.1
17.6
24.4
26.4
3.7
3.7
3.2
5.5
11.7
10.9
20.6
39.3
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Relatives
35 - 40 years
30 - 35 years
25 – 30 years
20 – 25 years
15 – 20 years
10 – 15 years
5 – 10 years
0 – 5 years
Other 65.7%
83.5
82.5
75.5
73
66.9
57
45.5
26.7
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 43
Future Projections for the Numbers of Companies and Workers
Number of companies to decrease by 830,000
within the next 10 years
*Basis for calculation: end-2015 = 100%
End-2015End-2020
End-2025
End-2030
End-2035
End-2040
Number of companies
(,000)
4,025 3,607 3,195 3,103 3,014 2,956
100% 90% 79% 77% 75% 73%
Working population
(,000)
58,457 55,054 51,460 49,553 47,693 45,981
100% 96% 89% 86% 83% 80%
Working age
population(,000)
77,282 74,058 71,701 68,754 64,942 59,777
100% 96% 93% 89% 84% 77%50%
60%
70%
80%
90%
100%
2015年 2020年 2025年 2030年 2035年 2040年
企業数
就業人口数
生産年齢人口数
4.03 million companies
in 2015
*Includes individual business proprietors
3.2 million companies
in 2025
Sources : Numbers of companies and workers - Estimates of Future Numbers of Companies and Employees by Region, Yoshiaki Murakami, Naomi Kodama and Yoshio Higuchi, from Financial Review published June 2017 by the Policy Research Institute, Ministry of Finance, JapanWorking age population - Regional Population Projections for Japan“ (statistics from 2018)Estimates of Future Numbers of Companies and Employees by Region - Population Decline and Local Economies, by the Policy Research Institute, Ministry of Finance, Japan
Number of companies
Working age population
Working population
2015 2020 2025 2030 2035 2040
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 44
EmployeesNumber ofcompanies
Ratio of companies
with no successor
Number of companies
with no successor
Sales per M&A
transaction
M&A market
sizeOur position/initiative
100~300 48,673 × 48.40% = ¥23,558 ¥50 mn
¥23
trillion
New market to developTaking measures to
increase our presence
20~99 535,783 × 63.00% = ¥350,151 ¥30 mn
Established with dominant network
Expanding presence as top brand
1~19 3,003,013 × 75.00% = ¥2,252,260 ¥5 mnMostly domain of
our subsidiary BatonzHigh growth segment
M&A Market Potential
Note: These estimates are based on data from sources including Small and Medium Enterprise Agency, Ministry of Internal Affairs and Communications,
METI、Teikoku Data Bank, as well as Nihon M&A Center completed transactions in April 2016 – September 2019
There is a potential market in excess of ¥20 trillion
Business succession potential market estimate
In addition, M&A arising from restructuring of industries and growth strategies, unrelated to business succession(20% of our sell-side transactions completed in FY2018 were for companies with a CEO under 50 years old)
Copyright©2020 Nihon M&A Center Inc. All rights reserved. 45
⚫ Contact : https://www.nihon-ma.co.jp/action/contact/⚫ IR page URL: https://www.nihon-ma.co.jp/ir/⚫ English website URL : https://www.nihon-ma.co.jp/en/about/investors/
Lastly
Management principles Company goal
Increase in market value together with stability and growth in dividends
Return profits to shareholdersIncrease market value
Assisting companies to continue and prosper through M&A
We aim to increase market value through high profitability
and growth
Management priority on adherence to compliance and corporate social responsibilityBuilding up higher level governance structure
Ⅰ. Management principles
Ⅱ. To investors
top related