Slides
Page 1
Financial Results Presentation for Q4 and Fiscal Year Ended March 31, 2025 Net Protections Holdings, Inc. (TSE Prime Market: 7383)
Page 2
2 | Highlights of Financial Results 3 | Earnings Forecasts for FY3/26 15 | Management Topics 21 | Medium-Term Management Policy 24 | Appendix 33
Page 3
Highlights of Financial Results 3
Page 4
Group Financial Results: Highlights Group total JPY641.9bn (BtoC +4.0%, BtoB +32.5%) Significantly outperformed initial plan; achieved targets after three upward revisions. BtoC atone BtoB NP Kakebarai +13.4% YoY JPY39.9bn +47.8% YoY JPY248.2bn +32.5% YoY GMV*1 Group total Full-year GMV Full-year GMV BtoC Gross profit increased driven by cost containment efforts and the administration fees for late payments. NP Atobarai and other JPY7.62bn +35.7% YoY Full-year gross profit JPY11.3bn (+51.0%)Q4 alone JPY1.87bn (+32.4%)Q4 alone JPY68.1bn (+35.7%)Q4 alone 4 operating profit +JPY2.73bn YoY JPY2.10bn Group GMV expanded driven by the launch of new large-scale merchants in Q2 and the effectiveness of promotional initiatives. Strong GMV growth continued, fueled by increased transactions at existing merchants and the launch of the new large store in Q3. *1 GMV: Gross merchandise value for the Group’s payment services
Page 5
(JPY in millions) FY3/25 (12 months) Full-year earnings forecast*5 Results YoY percentage change Amount Progress rate GMV (non-GAAP)*1 641,950 +13.4% 635,294 101.0% Total operating revenue 23,032 +10.5% 23,281 98.9% Gross profit (non-GAAP)*2 10,483 +34.5% 10,300 101.8% SG&A expenses (non-GAAP)*3 8,907 +0.6% 8,850 100.7% Operating profit 2,103 Turned into profitability 2,000 105.2% Profit before income taxes 2,139 Turned into profitability 1,900 112.6% Profit attributable to owners of parent 1,350 Turned into profitability 1,100 122.7% Basic earnings per share 13.86 yen Turned into profitability 11.31 yen 122.5% EBITDA (non-GAAP)*4 3,747 +261.3% 3,600 104.1% Operating profit surpassed upward revision, reaching at JPY2.1bn; EBITDA Soared by 261.3%. Revenue reached 99% of target, due to growth of major merchants and increased e-invoice usage rate. Group Financial Results: Summary 5 | Full-year summary *1 GMV: Gross merchandise value for the Group’s payment services *2 Gross profit: Total operating revenue - (Invoicing related expenses + Bad debt related expenses + Other operating revenue + Other payment related expenses) *3 SG&A expenses: Operating expenses - (Invoicing related expenses + Bad debt related expenses + Other operating expenses + Other payment-related expenses) *4 EBITDA: Operating profit + (Depreciation and amortization + Share-based payment expenses + Loss on disposal of property, plant and equipment + Impairment losses - Gain from reversal of impairment losses) *5 Consistent with Consolidated Financial Results for the Nine Months Ended December 31, 2024 and Financial Results Presentation dated February 14, 2025
Page 6
Group total GMV increased 13.4% YoY driven by 47.8% increase in atone and 32.5% increase in NP Kakebarai. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY3/24 Q1 Q2 Q3 Q4 FY3/22 FY3/23 Q1 Quarterly Changes in GMV 6 FY3/25 Q3Q2 Q4 Full-year result YoY atone +47.8% NP Atobarai and other +0.6% NP Kakebarai +32.5% ＋13.4% YoY JPY565.9bn (FY3/24) JPY641.9bn (FY3/25) ● BtoC atone*1 ● BtoC NP Atobarai and other*2 ● BtoB NP Kakebarai*3 (JPY in billion) *1 Total amount of payments (including consumption tax) made through atone provided by the Group *2 Total amount of payments (including consumption tax) made through NP Atobarai, NP Atobarai air, and AFTEE provided by the Group *3 Total amount of payments (including consumption tax) made through NP Kakebarai provided by the Group 150 120 90 60 30
Page 7
The Group total GMV was JPY641.9bn, up 13.4% YoY driven by year-on-year increase of JPY15.0bn in BtoC and JPY60.8bn in BtoB. GMV for Fiscal Year Ended March 31, 2025 (JPY in billions) JPY565.9bn FY3/24 (Full year) FY3/25 (Full year) JPY641.9bn +JPY12.9bn +JPY2.1bn +47.8% YoY growth driven by the launch of new large-scale merchants in Q2 and the effectiveness of promotional initiatives. 7 ＋13.4% YoY BtoC: +JPY15.0bn BtoB: +JPY60.8bn broadly in line with the plan, up 0.6% YoY. Growth was driven by the growth of existing merchants and the new large store that launched in Q3, resulting in a 32.5% YoY. 400 600 500 0
Page 8
FY3/23 FY3/24 5,317 5,620 392 368 1,722 1,805 FY3/25 7,624 485 2,373 Gross profit increased by 34.5% YoY driven by cost containment and administration fees for late payments in NP Atobarai. Total Operating Revenue and Gross Profit (Group Total) FY3/23 FY3/24 15,202 15,763 1,198 1,416 2,929 3,664 FY3/25 16,576 1,864 4,591 19,330 20,844 23,032 7,433 7,795 10,483 8 ＋34.5% YoY ＋10.5% YoY ● BtoC atone ● BtoB NP Kakebarai ● BtoC NP Atobarai and other ● BtoC atone ● BtoB NP Kakebarai ● BtoC NP Atobarai and other | Total operating revenue (JPY in millions) | Gross profit (JPY in millions)
Page 9
375 779 436 400 Financial Results by Service: atone GMV increased 51.0% YoY driven by successful measures to expand GMV, such as new user acquisition promotions. | GMV (JPY in billions) | Total operating revenue (JPY in millions) | Gross profit (JPY in millions) 4.7 6.0 11.3 5.2 5.6 5.5 6.2 7.1 7.5 271 327 482 314 307 304 343 363 381 110 74 85 99 108 73 100 91 103 JPY27.0bnJPY21.1bn JPY1,416mnJPY1,198mn JPY368mnJPY392mn 9 ＋51.0% YoY ＋43.5% YoY 8.0 411 1199.1 FY3/24FY3/23 FY3/25 Q4Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 FY3/24FY3/23 FY3/25 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 458 545 Total operating revenue after adjustment*1 132 *2 183 *1 Total operating revenue after adjustment: the amount by which the reduction in operating revenue due to promotions was added back to operating revenue. *2 Gross profit after adjustment: the amount by which the reduction in gross profit due to promotions was added back to gross profit. -16.9% YoY Q4 11.3 JPY39.9bn 512 *1 549 JPY1,864mn Q4 FY3/24FY3/23 FY3/25 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 Q4 147 148 Gross profit after adjustment*2 JPY485mn
Page 10
Financial Results by Service: NP Atobarai and other Gross profit increased 32.4% YoY driven by administration fees for late payments and cost containment efforts, including credit risk control. 84.1 87.2 84.1 83.5 90.1 83.1 86.4 93.4 84.3 3,644 3,992 4,052 3,630 4,116 3,809 3,919 4,120 3,730 1,293 1,270 1,870 1,337 1,472 1,214 1,304 1,632 1,412 JPY351.5bnJPY340.9bn JPY15,763mnJPY15,202mn JPY5,620mnJPY5,317mn 10 | GMV (JPY in billions) | Total operating revenue (JPY in millions) | Gross profit (JPY in millions) ＋32.4% YoY 3,790 1,602 85.8 4,212 1,994 FY3/24FY3/23 FY3/25 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 Q4 FY3/24FY3/23 FY3/25 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 Q4 FY3/24FY3/23 FY3/25 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 Q4 88.2 95.5 JPY353.7bn 4,520 JPY16,576mn 2,155 JPY7,624mn
Page 11
Financial Results by Service: NP Kakebarai GMV continued over 30% growth driven by increased transactions at existing merchants and the launch of new large stores in Q3. 29.8 37.5 68.1 36.8 45.1 42.6 49.4 50.2 55.5 669 853 1,220 702 778 779 894 957 958 429 462 687 400 456 436 471 471 400 JPY187.3bnJPY136.9bn JPY3,664mnJPY2,929mn JPY1,805mnJPY1,722mn 11 | GMV (JPY in billions) | Total operating revenue (JPY in millions) | Gross profit (JPY in millions) ＋35.7% YoY 57.9 1,052 534 32.7 1,095 519 ＋71.5% YoY FY3/24FY3/23 FY3/25 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 Q4 FY3/24FY3/23 FY3/25 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 Q4 FY3/24FY3/23 FY3/25 Q3Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q3Q1 Q2 Q4 66.6 JPY248.2bn 1,223 JPY4,591mn 632 JPY2,373mn
Page 12
The SG&A-to-GMV ratio came to 1.48%, reflecting the planned additional marketing investments made in H2. SG&A Expenses: Quarterly Trend 12 ■ SG&A expenses ■ SG&A-to-GMV ratio (JPY in millions) FY3/23 FY3/24 FY3/25 Down 0.04pts. YoY Q1 1.62% 1,918 Q2 1.62% 1,973 Q3 1.63% 2,163 Q4 1.73% 2,177 Q1 1.68% 2,278 Q2 1.63% 2,243 Q3 1.45% 2,170 1.37% Q2 2,121 Q4 1.52% 2,159 Q1 1.43% 2,137 1.48% Q4 2,423 1.28% Q3 2,224
Page 13
SG&A Expenses: Quarterly Changes by Function Temporary increase in S&M expenses, due to the planned additional marketing investments made in H2. 13 FY3/22 FY3/24 Q1 589 820 160 2,278 868 Q4 566 759 190 2,177 850 Q3 514 721 281 2,163 927 Q2 504 712 181 1,973 755 Q1 525 695 160 1,918 697 Q4 496 625 247 1,925 803 Q3 476 595 114 1,654 582 Q2 460 589 62 1,559 508 Q1 477 595 55 1,548 475 FY3/23 Q3 547 862 136 2,170 760 Q2 573 826 176 2,243 842 Q1 541 883 116 2,137 712 Q4 542 851 161 2,159 766 FY3/25 Q3 577 929 124 2,224 717 Q2 537 877 120 2,121 706 Q4 580 910 294 2,423 932 *1 Sales & Marketing: Personnel, outsourcing, operations related, marketing, and other expenses related to sales and marketing *2 Tech & Development: Personnel, outsourcing, operations related, and other expenses related to system development, credit related operations, and other operations *3 Others: SG&A expenses other than *1 and *2 (personnel and outsourcing expenses related to back-office operations, outsourcing expenses of help desk for services, etc.) ■ Sales & Marketing (Of which, ■ marketing expenses)*1 ■ Tech & Development*2 ■ Others*3 (JPY in millions)
Page 14
Reference: Changes in Ratio of SG&A Expenses to GMV Temporary increase in S&M-to-GMV ratio, due to the planned additional marketing investments made in H2. We plan to return S&M ratio to its usual annual level while maintaining operating leverage. Q1 Q2 Q3 Q4 FY3/23 Q1 Q2 Q3 Q4 Q1 FY3/25FY3/24 Q3Q2 Q4 14 Q1 Q2 Q3 Q4 FY3/23 Q1 Q2 Q3 Q4 Q1 FY3/25FY3/24 Q3Q2 Q4 Q1 Q2 Q3 Q4 FY3/23 Q1 Q2 Q3 Q4 Q1 FY3/25FY3/24 Q3Q2 Q4 *1 Sales & Marketing: Personnel, outsourcing, operations related, marketing, and other expenses related to sales and marketing *2 Tech & Development: Personnel, outsourcing, operations related, and other expenses related to system development, credit related operations, and other operations *3 Others: SG&A expenses other than *1 and *2 (personnel and outsourcing expenses related to back-office operations, outsourcing expenses of help desk for services, etc.) | Sales & Marketing*1 (%) | Tech & Development*2 (%) | Others*3 (%)
Page 15
Earnings Forecasts for FY3/26 15
Page 16
Earnings Forecasts: Summary for FY3/26 Earnings Forecasts We project GMV of JPY742.0bn, up 15.6 YoY, and operating profit of JPY2.6bn, up 23.6%. We will continue to drive solid GMV growth while steadily increasing profits. 16 (JPY in millions) FY3/26 forecasts Reference: FY3/25 resultsH1 H2 Full-year vs. FY3/25 GMV (non-GAAP)*1 353,000 389,000 742,000 +15.6％ 641,950 Total operating revenue 12,270 13,140 25,410 +10.3％ 23,032 Gross profit (non-GAAP)*2 5,470 5,920 11,390 +8.6％ 10,483 Operating profit 1,080 1,520 2,600 +23.6% 2,103 Profit before income taxes 1,020 1,420 2,440 +14.1% 2,139 Profit attributable to owners of parent 600 840 1,440 +6.7% 1,350 Basic earnings per share 6.04 yen 8.46 yen 14.50 yen +4.6％ 13.86 yen EBITDA (non-GAAP)*3 1,910 2,390 4,300 +14.7% 3,747 | Earnings forecasts *1 GMV: The total amount of payments (including consumption tax) made through services provided by the Group, such as NP Atobarai, atone, NP Kakebarai, and AFTEE *2 Gross profit: Total operating revenue - (Invoicing related expenses + Bad debt related expenses + Other operating revenue + Other payment related expenses) *3 EBITDA: Operating profit or loss + Depreciation and amortization + Share-based payment expenses + Loss on disposal of fixed assets + Impairment losses - Gain on reversal of impairment losses
Page 17
Earnings Forecasts: GMV by Service Group total GMV is expected to achieve double-digit growth, up 15.6% year on year. atone: over 40% growth expected; NP Kakebarai: sustained high growth over 30%. 17 (JPY in billions) ● BtoC atone*1 ● BtoC NP Atobarai and other*2 ● BtoB NP Kakebarai*3 H1 H2 H1 H2 FY3/25 (results) FY3/26 (forecasts) JPY641.9bn JPY742.0bn 174.1 113.5 17.1 304.7 179.6 134.7 22.7 337.1 175.0 153.0 25.0 353.0 186.0 171.0 32.0 389.0 ＋15.6% YoY400 300 200 100 *1 Total amount of payments (including consumption tax) made through atone provided by the Group *2 Total amount of payments (including consumption tax) made through NP Atobarai, NP Atobarai air, and AFTEE provided by the Group *3 Total amount of payments (including consumption tax) made through NP Kakebarai provided by the Group
Page 18
We project SG&A expenses of JPY9.38bn, up 5.3%, representing moderate growth compared to GMV. We will continue to control the growth rate of SG&A expenses and maximize profitability. Earnings Forecasts: Breakdown of SG&A expenses 18 | Breakdown of SG&A expenses Sales & Marketing Up JPY 172 mn (+5.6%) ・Increase in line with business growth Breakdown FY3/25 2,278 3,583 3,045 8,907 FY3/26 (forecasts) 2,208 (-3.1%) 3,955 (+10.4%) 3,217 (+5.6%) 9,380 (+5.3%) Tech & Development Up JPY 372 mn (+10.4%) ・Increase in operating expenses (servers, etc.) in line with business growth ・Increase in amortization of software assets due to provision of new features Others Down JPY 70 mn (-3.1%) ・Optimization of operations (JPY in millions) ■ Sales & Marketing (S&M)*1 ■ Tech & Development (T&D)*2 ■ Others*3 *1 Sales & Marketing: Personnel, outsourcing, operations related, marketing, and other expenses related to sales and marketing *2 Tech & Development: Personnel, outsourcing, operations related, and other expenses related to system development, credit related operations, and other operations. *3 Others: SG&A expenses other than *1 and *2 (personnel and outsourcing expenses related to back-office operations, outsourcing expenses of help desk for services, etc.)
Page 19
Shareholder Return Policy 19 We will continue to review our approach to shareholder returns, taking into account the accumulation of profits in the future. Share buybacks Dividends After establishing a stable financial base for sustainable growth, we will implement shareholder returns such as share buybacks or dividends. Shareholder returns Development investment Marketing investment To achieve continued mid- to long- term growth, we will make investments in expanding our capabilities and marketing strategies. Growth investment Having established strong cash flow generation, we will consider shareholder returns at an appropriate time, while balancing these with growth investments. Profit growth Cash generation from business expansion
Page 20
Since we provide payment services for domestic transactions, we are not directly affected by tariffs. Risks Related to US Tariffs 20 Customer / BtoB customer Merchant Order Shipping / service provision Payment services for domestic transactions Domestic consumers and businesses e.g. groceries, cosmetics, fashion items, and services ※Our businesses in Taiwan and Vietnam are also conducted within their respective domestic markets.
Page 21
Management Topics 21
Page 22
New system integration with e-commerce platforms Both atone and NP Atobarai air are steadily expanding into their respective target markets. atone is integrating with e-commerce platforms with the aim of wider adoption by e-commerce businesses. BtoC：New Merchants & System Integration with New Platforms 22 New merchants NP Atobarai and other (NP Atobarai air) Full-service facilities management company that supports everyday life atone Comprehensive platform for digital content distribution and sales E-commerce site building platform with the top market share in Japan E-commerce platform tailored for subscription and recurring order models Comprehensive OMO/omnichannel-enabled e-commerce platform E-commerce development packaged software Platform for D2C, subscriptions, and repeat single-item mail orders E-commerce site development system Since atone is already integrated with these platforms, e-commerce businesses using them can adopt atone quickly and without additional cost or effort. The low implementation barriers are driving broader adoption among e-commerce businesses, supporting further GMV growth. atone
Page 23
BtoB：New Merchants & Outlook 23 Due to structural issues such as the declining workforce and trends like work style reforms, tasks that companies have traditionally handled in-house such as invoice issuance, collection, payment reminder, and accounts receivable management are becoming an increasing burden. Challenges for the future work environment Growth in Our B2B Business Our solution offers outstanding cost- effectiveness for large enterprises with a high volume of small-value invoices. We plan to horizontally expand our BtoB service to other companies with similar operational needs. Indeed Recruit Partners Introduces NP Kakebarai. Press release issued on May 14.
Page 24
Medium-Term Management Policy 24
Page 25
Three-Year Business Plan (FY3/26 – FY3/28) 25
Page 26
For FY3/28, we target GMV over JPY1tn and operating profit of JPY4bn. The three-year operating profit CAGR is projected to be 25%. Three-Year Financial Policy (GMV & Operating Profit) GMV JPY1,050bn - 1,080bn (three-year CAGR: 16% - 19%) Medium-term plan (3 years from now: FY3/28) FY3/28 (E) FY3/27 (E) FY3/26 (E) FY3/25 4.0bn 3.2bn 2.6bn 2.1bn 1,050~ 1,080 870.0~ 890.0 742.0 641.9 Approx. 2,000 10bn Medium-to long-term target ■■ GMV Operating profit Operating profit 4.0bn (CAGR25%) 26 Operating profit CAGR 25% (JPY in billions) 1,200 800 400 Medium- to Long-term Target Operating profit: JPY10bn GMV: Approx. JPY2tn
Page 27
For BtoC, we aim for a CAGR of 50 - 55% for atone while maintaining NP Atobarai as a stable profitable business. For BtoB, we aim to achieve a CAGR of 25–30%, establishing a dominant No.1 position in the market. Portfolio (GMV Growth Rate and GMV Composition by Service) | GMV growth rate by business segment | Composition in FY3/28 (vs. to FY3/25) FY3/25 FY3/28 (E) FY3/27 (E) FY3/26 (E) 353.7 248.2 39.9 ● BtoC atone*1 ● BtoB NP Kakebarai*2 ● BtoC NP Atobarai and other*3 CAGR 50 - 55% CAGR 25 - 30% ● BtoC atone*1 ● BtoB NP Kakebarai*2 ● BtoC NP Atobarai and other*3 FY3/25 FY3/28 (E) 55.1% 38.7% 6.2% 50 - 55% 13 - 15% 641.9 1,050 - 1,080 361.0 324.0 57.0 742.0 870 - 890 35 - 40% 27 (JPY in billions) *1 Total amount of payments (including consumption tax) made through atone provided by the Group *2 Total amount of payments (including consumption tax) made through NP Kakebarai provided by the Group *3 Total amount of payments (including consumption tax) made through NP Atobarai, NP Atobarai air, and AFTEE provided by the Group
Page 28
We will continue to maintain a cost structure with strong operating leverage. As GMV increases, we plan to keep SG&A expenses to a minimal increase, thereby driving further profit growth. SG&A Expense Policy | Trend of SG&A ratio (vs. GMV) (illustrative) Total Expense Control We plan to limit the annual increase in total SG&A expenses to approx. JPY500mn, with adjustments made as necessary based on progress toward profit targets. Sales & Marketing While personnel and outsourcing costs are expected to rise as transaction volumes expand, these increases will remain moderate relative to GMV growth. Marketing investments will be made in a disciplined manner, focusing on initiatives that drive growth. Tech & Development We do not anticipate any significant increases in development costs. Maintenance and operational expenses are also expected to increase moderately in line with GMV growth. Major SG&A Expense Policy FY3/25 FY3/28 (E) FY3/27 (E) FY3/26 (E) 1.4% 1.0% ■ GMV ■ SG&A expenses SG&A ratio 28
Page 29
Growth Strategy 29
Page 30
NP Atobarai will maintain and continue its established profit-generating structure. NP Kakebarai is focused on the acquisition of large merchants, and atone is entering a phase of full-scale expansion. Growth Strategy Overview 30 FY3/28 (forecast)FY3/26 (forecast) FY3/27 (forecast)FY3/25 Credit screening improvement Administrative fees for late payments Increasing brand awareness and generating sales pipeline Initiatives for acquiring new merchants and members We will pursue contracts with major enterprise clients to drive continued GMV growth. In addition, we will further strengthen our financial services for our network of over 700,000 buyer companies. Maintain and continue its established profit-generating structure Pursue the acquisition of large merchantsMarketing measures Expansion of user baseEnhancement of functions Expansion of merchant network We will continue to target the transition of e-commerce companies from in-house BNPL to our service. New initiatives are currently being prepared (see page 32 for details). The impact of these new initiatives is not included in the current three-year plan.
Page 31
Growth Strategy for BtoB Services: NP Kakebarai 31 Number of billingsSmall Very large No market exists No market exists (Business operators will continue to collect receivables themselves) Receivables guarantee Billing support service Medium to high Minimal Low Very low Collection risk An area where we can leverage our strengths as a one-stop service provider for billing-related operations with low but existing collection risk. With a strong track record, we are establishing our position as the market leader. We will step up efforts to win orders from large companies. Market size*1 JPY180tn Large *1 Total amount of notes and accounts payable of SMEs: 50 trillion yen (Small and Medium Enterprise Agency: Basic Survey of SMEs in 2019 (actual results at the end of FY 2018)) x Annual turnover: 3.6 times (365 days / average payment site for promissory notes of SMEs: 101.1 days (Small and Medium Enterprise Agency: Report by Study Group to Improve Payment Terms including Promissory Notes)) Although the collection risk is low, the large volumes of small-value billing tasks is substantial. Many companies still handle these processes in-house, so we aim to capture this demand by offering comprehensive outsourcing solutions.
Page 32
Growth Strategy for BtoC Services: atone (not factored into the current three-year plan) 32 We plan to officially launch atone Plus in the middle of this fiscal year. Following the launch, we will focus on expanding the number of merchants where atone is accepted and growing our user base. Expansion of user baseEnhancement of functions Expansion of merchant network Accelerating customer transfer on atone shops and promoting atone Plus usage Unlocking atone for all NP Atobarai merchants Official launch of atone Plus ・Encourage NP Atobarai users and existing atone members to use atone Plus ・Utilize atone shops as a strong marketing tool make atone available at a majority of NP Atobarai merchant stores ・No monthly fees ・1.5% reward points for online purchases ・Installment payment options available Mid FY3/26 Mid FY3/27 Overview of atone Plus specification expand the number of merchants where atone is accepted FY3/28 (forecast)FY3/26 (forecast) FY3/27 (forecast) Plan to proceed gradually while closely monitoring profitability
Page 33
Appendix ● Financial Statements, etc. ● Company Profile ● BtoC Services (atone, NP Atobarai and other) ● BtoB Service (NP Kakebarai) ● IR Newsletter 33
Page 34
Appendix 34 Financial Statements, etc.
Page 35
Key Performance Indicators Three months ended March 31, 2024 Three months ended March 31, 2025 Percentage change Fiscal year ended March 31, 2024 Fiscal year ended March 31, 2025 Percentage change (JPY in millions) (JPY in millions) ％ (JPY in millions) (JPY in millions) ％ GMV (non-GAAP)*1 142,107 163,658 15.2 565,987 641,950 13.4 BtoC Services: NP Atobarai and other 84,345 84,113 (0.3) 351,547 353,716 0.6 BtoC Services: atone 7,549 11,397 51.0 27,040 39,966 47.8 BtoB Service 50,212 68,147 35.7 187,399 248,267 32.5 Total operating revenue 5,071 5,755 13.5 20,844 23,032 10.5 BtoC Services: NP Atobarai and other 3,730 4,052 8.6 15,763 16,576 5.2 BtoC Services: atone 381 482 26.3 1,416 1,864 31.6 BtoB Service 958 1,220 27.3 3,664 4,591 25.3 －Other operating revenue 152 163 6.8 531 593 11.8 Revenue 4,918 5,592 13.7 20,313 22,438 10.5 －Invoicing related expenses (non-GAAP)*2 1,978 1,989 0.6 8,326 8,036 (3.5) －Bad debt related expenses (non-GAAP)*3 925 829 (10.4) 3,781 3,478 (8.0) －Other payment related expenses (non-GAAP)*4 98 129 32.3 410 440 7.3 Gross profit (non-GAAP)*5 1,916 2,643 37.9 7,795 10,483 34.5 BtoC Services: NP Atobarai and other 1,412 1,870 32.4 5,620 7,624 35.7 BtoC Services: atone 103 85 (16.9) 368 485 31.6 BtoB Service 400 687 71.5 1,805 2,373 31.4 －SG&A and other operating expenses (non-GAAP)*6 2,237 2,478 10.7 8,954 8,973 0.2 Operating profit (loss) (168) 328 – (627) 2,103 － ＋Depreciation and amortization 422 419 4.4 1,577 1,629 3.3 ＋Share-based payment expenses 3 1 (38.6) 9 5 (44.0) ＋Loss on disposal of property, plant and equipment 15 2 (3.38) 28 8 (70.8) ＋Impairment losses 48 － － 48 － (100.0) －Gain from reversal of impairment losses － － － － － － EBITDA (non-GAAP)*7 322 752 10.4 1,037 3,747 261.3 35 *1 GMV: Gross merchandise value for the Group’s payment services *2 Invoicing related expenses: Collection expense + Invoicing expense, primarily the amount of expenses incurred per invoice *3 Bad debt related expenses: Allowance for doubtful accounts (addition) + Bad debt expense + Loss on sale of trade receivables, primarily the expenses incurred in proportion to the amount of invoice *4 Other payment related expenses: Other expenses required for providing payment services, including credit screening costs and NP point expenses *5 Gross profit: Total operating revenue - (Invoicing related expenses + Bad debt related expenses + Other operating revenue + Other payment related expenses) *6 SG&A and other operating expenses: Operating expenses –(invoicing related expenses + bad debt related expenses + other payment-related expenses) *7 EBITDA: Operating profit + (Depreciation and amortization + Share-based payment expenses + Loss on disposal of property, plant and equipment + Impairment loss –Gain from reversal of impairment losses)
Page 36
Consolidated Statement of Financial Position As of March 31, 2024 As of March 31, 2025 As of March 31, 2024 As of March 31, 2025 Assets Liabilities and equity Cash and cash equivalents 10,810 17,039 Trade and other payables 32,226 38,940 Trade and other receivables 29,238 32,810 Short-term loans 3,431 4,766 Operating loans ー 180 Lease liabilities 101 262 Inventories 11 28 Other current financial liabilities 6 9 Other current receivables 637 481 Income taxes payable 298 780 Total current assets 40,698 50,540 Provisions 57 33 Property, plant and equipment 354 686 Liabilities for employee benefits 564 556 Goodwill 11,608 11,608 Other current liabilities 688 899 Intangible assets 4,671 4,886 Total current liabilities 37,374 46,249 Other financial assets 898 958 Long-term loans 4,974 4,984 Deferred tax assets 1,784 1,884 Lease liabilities 35 270 Other non-current assets 262 282 Provisions 113 112 Total non-current assets 19,580 20,307 Total non-current liabilities 5,123 5,368 Total assets 60,279 70,848 Total liabilities 42,498 51,618 Share capital 4,134 4,213 Capital surplus 14,196 14,275 Retained earnings (805) 544 Other components of equity 178 136 Total equity attributable to owners of parent 17,704 19,169 Non-controlling interests 76 60 Total equity 17,780 19,229 Total liabilities and equity 60,279 70,848 36 (JPY in millions) (JPY in millions)
Page 37
Consolidated Statement of Profit or Loss For the fiscal year ended March 31, 2024 For the fiscal year ended March 31, 2025 Revenue 20,313 22,438 Other operating revenue 531 593 Total operating revenue 20,844 23,032 Operating expenses (21,472) (20,929) Operating profit (loss) (627) 2,103 Financial income 1 129 Financial costs (194) (93) Profit (loss) before income taxes (820) 2,139 Income tax expense (30) (801) Profit (loss) (851) 1,337 Profit (loss) attributable to: Owners of parent (828) 1,350 Non-controlling interests (22) (12) Profit (loss) (851) 1,337 Earnings (loss) per share: Basic earnings (loss) per share (yen) (8.55) 13.86 Diluted earnings (loss) per share (yen) (8.55) 13.73 37 (JPY in millions)
Page 38
Consolidated Statement of Cash Flows For the fiscal year ended March 31, 2024 For the fiscal year ended March 31, 2025 Cash flows from operating activities Profit (loss) before income tax (820) 2,139 Depreciation, amortization and impairment losses 1,626 1,629 Share-based payment expenses 9 5 Finance income and finance costs 192 (35) Increase (decrease) in provisions 57 (23) Loss on retirement of non -current assets 28 8 Decrease (increase) in inventories 9 (16) Decrease (increase) in trade and other receivables (4,698) (3,572) Decrease (increase) in operating loans ー (180) Increase in trade and other payables 4,992 6,714 Other 187 356 Subtotal 1,585 7,025 Interest received 1 11 Interest paid (35) (64) Income taxes refund (paid) 380 (406) Net cash provided by (used in) operating activities 1,931 6,567 Cash flows from investing activities Payments into time deposits (0) ー Purchase of property, plant and equipment (14) (63) Purchase of intangible assets (1,726) (1,484) Long-term prepaid expenses ー (17) Payments of guarantee deposits (4) (50) Proceeds from collection of guarantee deposits 0 108 Purchase of other financial assets (15) － Net cash provided by (used in) investing activities (1,760) (1,506) Cash flows from financing activities Net increase (decrease) in short -term loans 431 1,351 Repayments of lease liabilities (391) (294) Proceeds from issuance of shares 34 152 Net cash provided by (used in) financing activities 75 1,209 Effects of exchange rate changes on cash and cash equivalents (0) (40) Net increase in cash and cash equivalents 246 6,229 Cash and cash equivalents at the beginning of the period 10,564 10,810 Cash and cash equivalents at the end of the period 10,810 17,039 38 (JPY in millions)
Page 39
■ Q4 ■ Q3 ■ Q2 ■ Q1 *1 Gross profit: Total operating revenue - (Invoicing related expenses + Bad debt related expenses + Other operating revenue + Other payment related expenses) FY3/22 FY3/23 FY3/24 18,665 19,330 7,469 7,433 20,844 7,795 Financial Results: Quarterly Trends of Total Operating Revenue and Gross Profit FY3/25 FY3/22 FY3/23 FY3/24 FY3/25 39 4,604 4,586 5,173 5,254 4,609 4,647 5,156 5,767 4,978 5,202 5,442 4,473 4,893 5,071 1,888 1,833 1,806 2,257 1,909 1,837 1,876 2,647 2,028 2,037 2,195 1,641 1,724 1,916 6,255 2,935 5,755 23,032 2,643 10,483 | Total Operating Revenue (JPY in millions) | Gross Profit (non-GAAP)*1 (JPY in millions)
Page 40
Balance Sheet with Low Working Capital 40 Our trade receivables and payables are well-balanced over the short term. We therefore have limited financial risk even in the current phase of rising interest rates. Total assets: JPY70,848mn Total liabilities: JPY51,618mn Total equity: JPY19,229mn Trade payables JPY38,940mn Quarterly changes in trade receivables & payables Trade and other receivables*2 JPY39,424mn (JPY in millions) Balance Sheet (as of March 31, 2025) Due in 14 days from the date an invoice is issued Collection Cycle*1 Two payment options are available to merchants: monthly or semimonthly payment Payment Cycle*1 ● Trade payables ● Trade and other receivables (before deduction of allowance for doubtful accounts) Difference *1 In case of NP Atobarai *2 Trade and other receivables represent the figures before deduction of allowance for doubtful accounts Hovering within a certain range FY 3/20 Q1 FY 3/20 Q2 FY 3/20 Q3 FY 3/20 Q4 FY 3/21 Q1 FY 3/21 Q2 FY 3/21 Q3 FY 3/21 Q4 FY 3/22 Q1 FY 3/22 Q2 FY 3/22 Q3 FY 3/22 Q4 FY 3/25 Q4 FY 3/23 Q1 FY 3/23 Q2 FY 3/23 Q3 FY 3/23 Q4 FY 3/24 Q1 FY 3/24 Q2 FY 3/24 Q3 FY 3/24 Q4 FY 3/25 Q1 FY 3/25 Q2 FY 3/25 Q3
Page 41
Appendix Company Profile 41
Page 42
With our mission “Create New Standards,” we aim to create an innovative structure for both our business and organization. Management Philosophy 42 Create New Standards We will promote a seamless structure to create new standards. Expand Our Possibilities We will provide new opportunities through both our business and organization to open up the possibilities of each and every person. Capture the Essence of Things in Order To Keep Changing We will capture the essence from every aspect so that both our business and organization can keep changing and trying new things.
Page 43
We are boasting top market share as the leading BNPL company in Japan. We have expanded our business in other countries such as Taiwan and Vietnam. Growth Trajectory 43 E-commerce merchandise BtoB Wide range of services beyond merchandise *1 Population of 110.6 million people aged 15 and over (as of March 1, 2022, based on statistics from the Ministry of Internal Affairs and Communications' Statistics Bureau) ÷ the annual unique users of 15 million in FY3/22 *2 Approximately 3.67 million companies in Japan (Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry “2021 Economic Census - Activity Survey Results”) ÷ the annual 740,000 unique BtoB clients in FY3/25 *3 The number of unique members as of March 31, 2025 FY3/032000 FY3/11 FY3/18 FY3/25FY3/16 FY3/22 Listing Listed on TSE Foundation BNPL service for e-commerce merchandise BNPL service optimized for on-site services BPNL service for the entire e- commerce and physical stores BNPL service for overseas BtoB BNPL service NP Atobarai users*1 1 in 7 people NP Kakebarai users*2 1 in 5 companies AFTEE users*3 1.6 million FY3/25 GMV JPY641.9bn
Page 44
EC merchandise EC non-merchandise Physical stores On-site services Overseas BtoC Market size JPY 14.0 tn BNPL service for e-commerce merchandise with top market share Available not only for e-commerce merchandise and e-commerce non- merchandise, but also for physical stores by downloading the app BNPL service optimized for on-site services such as house renovation, housekeeping, moving, and cram schools Localized BNPL service for overseas BtoB BNPL service with the No. 1 track record*1 in BtoB PSP service market Domestic BtoB Market size JPY 180 tn 44 A comprehensive BNPL provider expanding services to BtoC, BtoB, and overseas. Business Overview: Service Lineup and Target Markets *1 Based on our annual GMV for FY2023 from Deloitte Tohmatsu MIC Research Institute “MIC IT Report November 2024 – Survey on BtoB Payment Service Provider Market (https://mic-r.co.jp/micit/2023/)” Source: Those figures are calculated using our analysis based on certain assumptions with reference to the following various data: “Cashless Vision” (P. 70), “Cashless Payment Ratio in Japan, Payment Providers, and the State‘s Disclosure Policy” (P. 21), and “Current Survey of Commerce (2020)” by the Ministry of Economy, Trade and Industry, ”Taiwan Cards and Payments - Opportunities and Risks to 2024” (P. 26 and 30) by GlobalData, and “e-Conomy SEA 2022” etc. Market size JPY 8.7 tn Market size JPY 293 tn Market size JPY 18.6 tn Market size JPY 9.8 tn
Page 45
Customers can make a payment immediately without a credit card. Customers and BtoB customers can purchase products/services in a safe, convenient and affordable manner while merchants can expand sales opportunities and reduce their workload. Value proposition 45 45 | Service scheme | Benefits Customers Merchants Receive products first No credit card required Earn points Increase sales Acquire new customers Risk-free guaranteed Customer BtoB customer Merchants Order Product/service Payment Credit screening, invoice issuance and collection Order information linkage Advance payment*1 takes care of all BNPL-related operations *1 The guarantee only covers transactions approved by our credit screening system. In the event that a dispute between a merchant and a customer over a transaction arises and it cannot be immediately resolved, or Net Protections deems there is a risk of such a dispute, or the transaction otherwise falls under any of the grounds set forth in the merchant agreement, such a transaction will not be guaranteed, even though it has been approved
Page 46
Transaction Support Fee (flat fee) Revenue COS*2 / GP (non-GAAP) System Usage Fee + Receivables Purchase Fee (GMV × Processing fee rate) (GMV x Delinquency rate) Gross Profit*3 (non-GAAP) Delinquency cost Invoicing related expenses Bad debt related expenses Profit Structure as a Source of Corporate Value 46 Revenue mainly consists of the service fees paid by merchants based on GMV (non-GAAP)*1. The gross profit margin varies depending on delinquency cost as part of cost of sales (COS)*2. Invoicing cost Administrative fee for late payment (flat fee) Dunning cost etc. *1 GMV: The total amount of payments (including consumption tax) made through services provided by the Group, such as NP Atobarai, atone, NP Kakebarai, and AFTEE *2 COS：Doubtful accounts related cost, Invoicing fee, postal fee, and operational cost *3 Gross profit: Total operating revenue - (Invoicing related expenses + Bad debt related expenses + Other operating revenue + Other payment related expenses) Sales increase in line with a growth in GMV. Profit increases as the delinquency rate declines.
Page 47
3/04 3/08 3/12 3/16 3/24 BtoC BtoB 0.50% 0.46% 3/20 We have achieved low delinquency rate by utilizing our proprietary data accumulated over 20 years to decisively screen transactions with difficult risk assessment. Strength & Uniqueness 47 | Credit approval rate | Delinquency rate*3*4 Low risk transactions Transactions with difficult risk assessment Rejected transactions Approval rate*1 95% proprietary transaction data*2 530mn *1 The ratio of approved transactions to transactions denied by our credit screening system for NP Atobarai and NP Atobarai air during FY3/25 (limited to unique users) *2 As of March 31, 2025 *3 Ratio of outstanding unpaid transactions for NP Atobarai and NP Atobarai air in excess of 18 months to total transactions recorded during such fiscal period on a GMV basis. The ratio for FY3/24 is based on unpaid transactions as of the end of March 2025 (including transactions prior to writing off of delinquent debt) *4 Ratio of outstanding unpaid transactions for NP Kakebarai in excess of 14 months to total transactions recorded during such fiscal period on a GMV basis. The ratio for FY3/24 is based on unpaid transactions as of the end of March 2025 (including transactions prior to sale of receivables and writing off of delinquent debt)
Page 48
The retention rate is high, and the accumulated GMV directly translates into profits. 48 Accumulated GMV by Fiscal Year GMV in FY3/18 GMV in FY3/20 GMV in FY3/21 GMV in FY3/22 GMV in FY3/23 GMV in FY3/24 GMV in FY3/19 GMV for 3/26 (forecast) JPY742.0bn GMV in FY3/26 FY3/17 or before FY3/18 FY3/19 FY3/20 FY3/21 FY3/25 FY3/22 FY3/23Break-even point GMV in FY3/25 FY3/24 (JPY in billions) 700 600 500 400 300 200 100 Started operations in
Page 49
Earnings Forecasts: Sales Pipeline 49 | Under consideration + Order backlog (JPY in billions) FY3/24 Q2 FY3/24 Q3 FY3/24 Q4 FY3/25 Q2FY3/25 Q1FY3/24 Q1 25.9 bn/month FY3/25 Q3 13.8 bn/month 20.3 bn/month 19.1 bn/month 20.1 bn/month 27.1 bn/month 30.7 bn/month 31.1 bn/month FY3/25 Q4 35 30 25 20 15 10 5 0 Sales pipeline has reached a record high. Sales opportunities under negotiation and order backlogs have been successfully finalized and launched, contributing to GMV growth.
Page 50
We have valued the growth opportunities and job satisfaction of our team members, creating a high-performing organization. Evaluation of the Organization (OpenWork score) 50 | Company evaluation by employees | Comprehensive rating ranking in the Internet industry (n=5,710 companies) | Comprehensive rating ranking (n=182,212 companies) No. 6 No. 1 Achieved high scores in all 8 categories Boston Consulting Group, LLC Recruit Management Solutions Co., Ltd. Bain & Company Japan Incorporated McKinsey & Company Japan IBM Japan Systems Engineering Co., Ltd. Net Protections, Inc. BOX JAPAN, Inc. ONE CAREER Inc. Google LLC Skylight Consulting Inc. No. 6 Net Protections, Inc. Google LLC Feedforce, Inc. Nyle Inc. Facebook Japan LLC (formerly Facebook Japan, Inc.) *Source: “OpenWork,” a one-stop job and recruitment information platform (As of October 3, 2024) Comprehensive rating: Ranked Top 1%Compensation Fairness of personnel evaluation Awareness of legal compliance Long-term perspective for HR development Growth environment for those in their 20s Mutual respect among employees Openness of corporate culture Employee morale 1st 2nd 3rd 4th 5ht 6th 7th 8th 9th 10th 1st 2nd 3rd 4th 5th 4.3 4.1 4.5 3.9 4.8 4.7 4.9 4.5
Page 51
We are featured as one of 15 “growth-oriented companies” that are committed to investing in their employees. The book highlights our unique corporate culture and showcases our advanced initiatives as a leading example. A company committed to investing in human capital 51 Scheduled to be published at the end of May
Page 52
Nikkei Business Feb. 17 issue Nikkei Business, an economics and business informational magazine with a large readership among business leaders, features a dialogue between our CEO Shin Shibata and owner of FC Imabari Takeshi Okada. Dialogue Article on the State of Organization 52 The magazine features a discussion on the ideal organizational structure, including the vital role played by younger generations in continuously enhancing corporate value. A Nikkei Business Online Edition article is also published alongside the print edition. https://special.nikkeibp.co.jp/atclh/ONB/25/netpro tections0213/ (Japanese only)
Page 53
Featured as a Case Study by Harvard Business School (HBS) 53 Available for purchase as case study material on the Harvard Business Publishing website The article describes our growth into Japan’s largest BNPL service provider through the development of multiple BNPL services tailored to various needs. Our business was featured as a case study in a class taught by Professor Ramon Casadesus-Masanell of Harvard Business School (HBS).
Page 54
Appendix BtoC Services (atone, NP Atobarai and other) 54
Page 55
Introduction: atone 55 Next-generation BNPL service for both online and in-store purchases. One-click for online shopping and with-app for in-store purchases Pay in 10 Days or Pay Next Month Earn points every time you use it! 1 point = JPY 1 yen Easy Flexible Beneficial 7,600,000 members Available for both online and in-store shopping Adaptable with White Label and OEM (Digital optimized) Web portal with 13 million PV / month
Page 56
atone is available at approx. 1.1M stores. In addition to our direct merchants, members can enjoy atone at physical stores accepting Smart Code payment and in-app stores with atone app-exclusive card. Stores where atone is available *1 Some stores are not available *2 Amazon, Amazon.co.jp and their logos are trademarks of Amazon.com, Inc. or its affiliates 56 Online stores Physical stores*1 Stores where atone is available (non-exhaustive list) Marketplace Convenience stores, supermarkets Drugstores Restaurants Daily necessity stores Entertainment Apparel, cosmetics Others *2
Page 57
atone shops is Japan's first web portal for BNPL that consolidates information on stores, hot deals, and coupons. atone users can enjoy new stores and hot deals. Strategy for atone: atone shops 57 Fashion Beauty (cosmetic) Personal care Shopping mall Contact lens Digital content Monthly PV: 13 million Monthly UU: approx. 450,000 Hot deals Coupons
Page 58
atone: System Integration with E-Commerce Platforms 58 E-commerce businesses using the atone integrated platform can introduce atone quickly and easily. We expect atone to rapidly expand to a large number of e-commerce businesses and drive further GMV growth. E-commerce platforms No system development is required, allowing merchants to start using atone immediately. lower the barriers to adoption
Page 59
BtoC e-commerce BNPL service with top market share, used by 1 in 7 people. No sign-up or credit card is required to use. Introduction: NP Atobarai 59 Number of annual unique users Over 15 million*1 No credit card required, no worry about information leakage or unauthorized use One-click payment without complicated procedures Pay easily by preferred payment method after confirming the goods No credit card required No sign-up required Payment after receiving goods *1 The number of NP Atobarai users from April 1, 2021 to March 31, 2022, for whom both name and phone number match Accumulated transactions exceeded 440 million Merchants 203,000
Page 60
NP Atobarai air is a risk-free guaranteed payment collection service that provides on-site service providers with an environment where they can concentrate on their main business. Introduction: NP Atobarai air 60 Renovation / Construction work Repair / Maintenance Housekeeping service Moving Rental Electricity / Gas Examples of industries to use No need to have cash in advance Those who are uncomfortable with direct cash transactions can be reassured that they can pay later with an invoice Pay easily anytime, anywhere No need to pay cash on the day Safe and secure with no cash handling Pay wherever you want Significant reduction of the burden on cash and receivables management No collection operations required and 100% guarantee of the invoiced amount assured No portable device required and immediately available for use on-site Introduction support available for smooth operations
Page 61
Comparison table: BtoC Services 61 NP Atobarai atone Pay in 10 Days Pay Next Month Payment term Pay for each purchase within 14 days Pay for each purchase within 10 days Consolidated Pay the following month Billing method Paper invoice (E-billing available) E-billing (email / SMS) E-billing (App / email / SMS) Payment method Convenience store, Bank, Post office Convenience store, Bank Convenience store, Bank, Direct debit Membership Not required Not required Required Point reward O (0.5%) O (sign-up required) O (0.5%) Target market E-commerce merchandise E-commerce merchandise, non- merchandise E-commerce merchandise, non- merchandise, physical stores
Page 62
Why Customers Prefer BNPL 62 Pay cash each time to prevent overspending No risk of credit card info leakage or unauthorized uses ✔ Credit card info is not required ✔ No risk of fraudulent payments, since customers must actively make the payment Easy to cancel and return ✔ No automatic payments without notice ✔ By paying for each transaction, customers feel in control of their expenditures ✔ Easy to control the budget because customers only need to monitor cash movements Pay when you want within the due date ✔ No cash preparation is necessary, unlike in case of Cash on Delivery ✔ Customers do not have to wait until payday for shopping Budget Control Security ✔ No need to use credit cards ✔ Mobile-friendly Payment made after the arrival of goods ✔ No worry about whether goods will arrive, unlike in case of advance payments ✔ Easy to return, easy to exchange, easy to cancel No credit card / No sign-up is required ✔ One click payment ✔ Can purchase with confidence even with the first-visiting online store Convenience 1 within 14 days 2 3 4 5 6
Page 63
Growth has been driven by the need for fund management, security, and convenience, especially among women in their 20s to 50s. Major User Base and Market Size Forecast of BNPL Service 63 BNPL market size forecastE-commerce payment services market size forecast Source: Yano Research Institute "E-commerce Payment Service Market in Japan 2025" (published March 27, 2025) * Based on transaction volume of providers that operate payment services on EC sites, etc. * For code payment, only transaction volume of EC payment service providers is covered * Figures are based on presumption for 2024 and prospect after 2025 Source Yano Research Institute "E-commerce Payment Service Market in Japan 2025" (published March 27, 2025) * Based on transaction volume of BNPL payment service providers * Figures are based on presumption for 2024 and prospect after 2025 * BNPL payment service market is contained in the EC payment service market * 1 Breakdown of NP Point Club members as of March 31, 2025 * 2 Survey on our members conducted from December 28 to 30, 2018, targeting 1,738 men and women of in their twenties or older In e-commerce, core users of BNPL service are women in their 20s to 50s Main user groups and reasons for use Demand in fund management, security, and convenience*2 Help avoid over-spending Can choose timing of the payments Concerns about credit card data breaches and frauds Easy to cancel mail order subscriptions Easy to return, exchange items or cancel purchases Want to save the trouble of entering credit card information Fund Management Security Convenience High value with points awarded for payments CAGR 12.6％CAGR 14.0％ FY2024 (Estimate) (JPY in 100 million) FY2025 (Forecast) FY2026 (Forecast) FY2027 (Forecast) FY2028 (Forecast) FY2024 (Estimate) FY2025 (Forecast) FY2026 (Forecast) FY2027 (Forecast) FY2028 (Forecast) (JPY in 100 million) Gender*1 Age Group*1 Female 72% Male 28% 20s 24.7% 30s 17.3%40s 18.6% 50s 20.2% 60s 10.9% 70s or older 4.1% Younger than 10 0.2% 10s 3.8%
Page 64
Service Introduction List in Target Market (BtoC Market) 64 Physical stores E-commerce merchandise Online supermarketTV shopping Housing Equipment FashionShopping mall E-commerce non-merchandise / on-site services Live streaming Housing management Repair & inspectionTickets Restaurant Cafe DrugstoresSupermarket Convenience store E-comic *1 *1 Some stores are not available *1
Page 65
Appendix BtoB Service (NP Kakebarai) 65
Page 66
BNPL service for BtoB transactions used by 1 in 5 companies. It manages all the settlement operations between merchants and their clients. Introduction: NP Kakebarai 66 Delayed or unpaid payment, etc. Payment management Payment collection Invoice issuance Credit screening Payment reminder 1 On behalf of clients, handles all settlement operations Seller Buyer 2 Risk-free assurance Inquiry support Sell Order Approx. 740,000 companies are using NP Kakebarai No.1*1 BtoB payment service Contributes to sales increase and workload reduction for merchants Sole proprietors are also available Immediate credit screening *1 Based on our annual GMV for FY2023 from Deloitte Tohmatsu MIC Research Institute “MIC IT Report November 2024 – Survey on BtoB Payment Service Provider Market (https://mic-r.co.jp/micit/2024/)”
Page 67
NP Kakebarai, our BtoB service, is a Business Process Outsourcing (BPO) service for BtoB transactions that allows merchants to outsource the entire billing process. Business Overview: Reasons Why Our BtoB Service Is Chosen 67 Billing process Credit screening Invoice issuance Payment management Payment reminder Risk assurance Credit research service Payment management software Factoring Billing support service Accounting software
Page 68
Business Overview: Reasons Why Our BtoB Service Is Chosen 68 Implementa- tion benefits Merchants' concerns Payment processing takes too much time, and each department can't concentrate on its core business. The burden of payment processing is expected to increase as the business grows. There is concern about extending credit to small and medium-sized companies. There are demands to offer more settlement options to increase customer satisfaction instantly. You can outsource entire payment operations to improve efficiency. You can focus on your core business. You can expand transactions and increase sales.
Page 69
FY3/22 FY3/23 FY3/24 259,441 97,982 The BtoB payments service market is growing and is expected to continue to expand. The share of NP Kakebarai exceeds 70%, making us the No.1 player*1 in the market. Potential of the BtoB Market 69 | B2B Payments Service Market Size Transition and Forecast*1 | Our share in the BtoB payments service market*2 FY2023 (Estimate) FY2024 (Forecast) FY2025 (Forecast) FY2026 (Forecast) FY2027 (Forecast)FY2022FY2021 740,990 148,631 *1 Source: Yano Research Institute "B2B Payments Service Market in Japan: Key Research Findings 2024, " (published July 1, 2024) Note 1: Based on transaction volume of service providers Note 2: Figures are based on estimate for FY2023 and forecast for FY2024 *2 Our estimate based on BtoB payment service market size data (JPY in millions)(JPY in millions) 148,631 136,965 187,399 199,354 Share 72% Share 66% ● BtoB NP Kakebarai ● Other companies
Page 70
Payment delays and collection issues in billing/payment operations. BtoB Billing Operations are Burdensome and Time-consuming 70 67.6% About half of respondents feel challenged in credit screening, bad loans, and late payments issues. 21.6% of the "late payments" were eventually not collected. Sales representatives also have trouble in contacting and negotiating. 31 2 Source: American Express “B2B payment among small and mid-cap businesses for the Fiscal Year 2022” Credit screening for new customers (n=122) Bankruptcy of business partners (n=93) Accounts receivable defaults and delayed payments (n=149) Credit management for existing business partners (n=109) Payment site of business partners (n=192) 54.1% 48.4% 45.0% 45.0% 43.2% ■ Very much so + somewhat so ■ Not much so + not at all so Collection rate of late payment that the respondents have experienced (n=113). Not collected 21.6% Collected 78.4% Contacted by sales representative for negotiation Contacted by accounting personnel for negotiation Written notice provided Contacted by other department for negotiation Outsourced to experts Collected through third parties, i.e., assignment of receivables Underlying factors of late payment that the respondents have experienced (n=108). 38.0% 22.2% 13.9% 5.6% 3.7%
Page 71
Invoice payment is essential for major companies to develop new business and prevent customer abandonment. Wire-transfer is the mainstream for BtoB transactions. The most common reason is “because it has been the custom up to now.” Strong Demand for Invoice Payment 71 Source: American Express “Research on B2B payment among small and mid-cap businesses during the Fiscal Year 2022” Payment method to receive payment (n=547) *multiple answers accepted Payment method to make payment (n=556) * multiple answers accepted Wire-transfer Bill and cheque Cash Direct-debit Credit card payment Other cashless payment 89.4% 30.3% 23.6% 17.6% 6.2% 3.3% Wire-transfer Cash Direct-debit Bill and cheque Credit card payment Other cashless payment 94.1% 41.7% 41.0% 38.8% 19.6% 2.7% Being accustomed to existing method Unwilling to renew due to its tangled procedures For security reason Most efficient Possibly preventing errors Designated by the business partners Lower cost and fees Wire-transfer 57.4 13.9 21.0 22.5 6.1 17.2 5.3 Direct-debit 52.3 11.9 15.3 20.4 6.8 14.0 7.2 Cash 66.5 10.5 8.5 4.8 2.0 14.5 8.9 Bill and cheque 62.2 13.0 7.7 4.9 3.3 22.0 1.0 Credit card payment 42.9 12.6 14.3 22.7 8.4 8.4 1.7 Other cashless payment 52.0 8.0 28.0 20.0 8.0 8.0 8.0 Reasons for choosing a payment method ■Wire-transfer (n=524) ■Account transfer (n=235) ■Cash (n=248) ■Bill and cheque (N=246) ■Credit card payment (n=119) ■Other cashless payments (n=25)
Page 72
Service Introduction List in Target Market (BtoB Market) 72 Wholesale Food & BeverageLiquor Beauty PackagingConstruction Material Start-ups Back Office Human Resource Marketing MarketplaceSharing Economy Major Companies
Page 73
Appendix IR Newsletter 73
Page 74
74 The following information is delivered via email: ● Announcement of financial results presentation and IR seminars ● Notice of financial statements uploads ● News releases Subscribe to our IR Newsletter If you would like to receive our newsletter, please register using the form below or the QR code on the right. https://www.magicalir.net/7383/mail/index_en.php
Page 75
Disclaimer 75 ● This document was prepared by Net Protections Holdings, Inc. (referred to as the “Company” or “we” herein) solely for informational purposes. This document does not constitute an offer to sell or a solicitation of an offer to buy any security of the Companyin the United States, Japan or any other jurisdiction. ● This document contains forward-looking statements, which reflect the Company's assumptions and outlook for the future and estimates based on information available to the Company and the Company's plans and expectations as of the date of this document or other date indicated. ● Please note that significant differences between the forecasts and other forward-looking statements and actual results may arisedue to various factors. ● Accordingly, readers are cautioned against placing undue reliance on any such forward-looking statements. ● The Company has no obligation to update or revise any information contained in this document based on any subsequent developments except as required by applicable law or stock exchange rules and regulations.