Under the mission encapsulated in its corporate philosophy of turning encounters into innovation, the Sansan Group adopted the vision to Become business infrastructure. Toward the realization of this mission and vision, we are developing services that promote DX by changing the working styles of companies and businesspeople with various business issues and believe that promoting these business activities will lead to the maximization of shareholder value and corporate value.
Our medium-term goal for the period from the fiscal year ending May 2023 to the fiscal year ending May 2025 is to achieve sales and profit growth. For the most critical management indicator, consolidated net sales, we aim to first maintain solid growth of 20%+ range or higher. Second, we have adopted adjusted operating profit*1, which excludes share-based payment expenses and expenses arising from business combination, as a key profit indicator. We aim to improve our adjusted operating profit margins each consolidated fiscal year while making the necessary investments for sales growth in each business segment. To improve profitability, we are aiming at adjusted operating profit of 10 billion yen or more combined for Sansan and Bill One*2 in the fiscal year ending May 31, 2025, and a stable adjusted operating profit for the full period for Eight.
*1 Operating Profit + Share-based Payment Expenses + Expenses Arising from Business Combinations (amortization of goodwill and amortization of intangible assets)
*2 Excluding “Others” such as new services in Sansan/Bill One Business segment
The Group’s businesses and business areas have the following characteristics, and we formulate medium- to long-term management strategies based on them.
The market for our services continues to expand, owing to changing work styles resulting from increased remote work, greater awareness of DX, and growing interest in SaaS businesses. The DX market is expected to reach 3,042.5 billion yen in 2030 (an increase of 2,251.3 billion yen from 2019)*3, and the domestic SaaS market is expected to be 1,117.8 billion yen in 2024 (up 516.2 billion yen from 2019)*4.
Additionally, analog/paper documents such as business cards, invoices, and contracts are still used daily, leaving significant room for greater operational efficiency and more effective utilization. Each of our services has substantial market potential. For example, Sansan has an 81.6%*5 share of the market for corporate cloud business card management services, but our users account for only about 3%*6 of the total working population in Japan. This punctuates the vast room for expansion. Meanwhile, Bill One has established an invoice network consisting of subscribing companies, including free subscribers and companies that send invoices to these subscribers. As of May 31, 2022, only 41,000 companies were participating in this network, which is about 2%*6 of the total number of companies in Japan. There is ample room for expansion in this market, too.
Sansan and Bill One’s billing models are subscription-based (monthly billing) and are expected to generate ongoing revenue with stable and continuous business growth. The monthly churn rate for the each service has continued to average below 1.0% over the last 12 months. Our model is attractive because we can easily maximize customer lifetime value by striving to increase sales per contract.
*3 Based on Market Edition and Vendor Strategy Edition of 2022 Outlook of the Digital Transformation Market by Fuji Chimera Research Institute
*4 Based on 2020 New Software Business Markets by Fuji Chimera Research Institute
*5 Based on Latest Trends in Business Card Management Services in Sales Support DX 2023 (December 2022, survey by Seed Planning, in Japanese)
*6 The denominator, the total number of employees in Japan, is calculated based on n Economic Census for Business Activity in 2016 issued by the Statistics Bureau.
The accuracy of analog information data conversion in each services contributes to the essential quality and competitiveness of the service. We have the mechanism and technology to achieve 99.9% accuracy, and thus accuracy represents a strength common to all our businesses. The Sansan Group’s services convert analog information into data by combining technology that is evolving on a daily basis by means of, for example, machine learning with human efforts. Since its establishment, the Group has converted a huge number of analog information into data, centering on the manual input of business infomation data. At present, it has become possible to develop and operate a unique system that accurately and efficiently converts a large number of business cards into data. These technological capabilities and unique systems are the source of our competitiveness, and we are pursuing the development of new technologies and the improvement of operations to continuously improve the quality and competitiveness of our services. These systems and technologies also possess the characteristic that they can be utilized in a variety of fields.
The Group’s Sansan and Bill One billing models are mainly subscription models (monthly billing) that can be expected to generate continuous income, so these are profit models that can be expected to achieve stable and continuous business progress. Also, the monthly churn rate of each service has remained below 1.0% on average for the last 12 months, and by striving to increase sales per subscription we see this as an attractive model that facilitates the maximization of customer lifetime value (LTV).
The specific management strategies of the Group are as follows.
i. Further growth of Sansan/Bill One business
Having established a series of business processes extending from marketing activities to the receiving of new orders, Sansan continues to generate robust growth, although the COVID-19 pandemic did cause a certain level of impact. Sansan is a service for all companies within Japan, and there is plenty of room for development in Japan. Towards further growth in the future, we will promote the improved value of the Sansan business database through the spreading and expansion of the functions that contribute to the resolution of business issues in sales and marketing activities. In addition, we will work to increase our number of subscriptions largely by strengthening our sales structure. We will also work to gain new customers premised on the notion of all staff members in a user company accessing the services (company-wide use) and promoting greater service use among existing customers. Through these ongoing initiatives, we will take steps to further increase net sales per subscription.
In addition, in regard to Bill One as well, because the service is available to all companies in Japan, regardless of industry or size, there is a great deal of room for coverage expansion, and we will actively implement a variety of measures to further expand its use. Specifically, in order to achieve maximization of sales, we shall work on efforts to strengthen sales activities as well as advertising and marketing activities, etc., with a focus on television commercials, and to expand the invoice issuance function in anticipation of the introduction of an invoicing system, among other functions.
ii. Eight Business monetization
We will work on business growth through the use of the network of over three million Eight users, and the strengthening of the monetization of the various B2B services. Mainly, we are aiming to achieve a full-year adjusted operating profit in the overall business through the enhancement of Eight Career Design, which is a recruitment-related professional recruiting service.
iii. Creation of new businesses
A variety of efficiency issues are accumulating in the various business workflows of companies, and the Group is focusing on creating new services that promote corporate DX by leveraging the strengths and knowledge it has cultivated through its existing services. Specifically, the Group has begun providing services in the business areas of contracts as well as business cards, etc., production, and will continue to establish these business processes and ensure their stable provision, as well as promote efforts to create new services.
The main issues that the Group should address are as follows.
Handling large amounts of important information assets, such as personal information, the Group considers it important to continuously enhance its information management systems. Even now, after having formulated a personal information protection policy and an information security policy, we pay close attention to measures related to personal information protection, such as the strict management of information assets, and will continue to strengthen and improve our internal systems and management methods.
For the Group to achieve sustainable growth, it is crucial that we hire many talented professionals with diverse career backgrounds, and then improve our sales, development and managerial structures.
In addition to promoting the creation of environments and the building of systems in which talented human resources who empathize with the Group’s corporate philosophy and business content can work with high levels of motivation, we will work to ensure the diversity of our human resources.
As the technology to accurately digitize analog information is the source of the Group’s competitiveness and the common foundation that supports the growth of the variety of services that the Group handles, we consider their ongoing improvement and strengthening to be important. By hiring talented engineers and investing in and monitoring advanced technologies, we will work to improve our technological capabilities to become a group of engineers that is representative of Japan.