Infomart aims to establish itself as a platform by offering apps designed to enhance operational efficiency through B2B Platform Ordering for the food industry and B2B Platform Invoicing for general corporations.
Infomart Corporation is a provider of online platforms for commercial transactions mainly to the food industry. It receives a monthly system usage fee from customers based on a fixed price or pay-per-use plan as well as a system set-up fee from new customers. The company has a stable earnings base, because monthly system usage fees account for around 95% of sales and churn rates are low. Whereas some upfront spending such as system development expenses arise before services are launched, the business model ensures high marginal profit rates after the service goes live. In FY12/21, sales were JPY9.8bn (+12.1% YoY), operating profit was JPY1.0bn (-30.0% YoY), and operating profit margin was 10.5% (16.8% in FY12/20). The company operates in two segments: B2B Platform Food and B2B Platform ES.
B2B Platform Food: Sales of JPY7.0bn (71.2% of total sales), operating profit of JPY2.2bn, and operating profit margin of 30.9%. In this segment, Infomart provides online platforms that connect restaurant operators (both restaurant chains and independent restaurants) with wholesalers. Key platforms include B2B Platform Ordering (an online platform that links restaurant companies with wholesalers, and wholesalers with food manufacturers) and B2B Platform Standards Database (a platform of manufacturers’ food standards for processed foods converted to a database for use by wholesalers and restaurant companies). B2B Platform Ordering must be adopted by buyers and sellers of food ingredients to function, and its convenience increases in tandem with growth in the user base (network effect). Excluding special circumstances such as discontinued operations, cancellations are rare because platform users risk losing suppliers or sales channels when they cancel their contract.
B2B Platform ES: Sales of JPY2.8bn (28.8% of total sales) and an operating loss of JPY1.1bn. In this segment, Infomart operates platforms to digitize invoices, contracts, and other documents for companies across all business industries. Key platforms include B2B Platform Invoicing (a platform for easy issue, receipt, and management of electronic invoices), B2B Platform Matching (a one-stop service for finding buyers and sellers, negotiating prices, price estimates, ordering, and payments), and B2B Platform Contract (a platform for conclusion, management, workflow, and internal authorization of contracts between companies in electronic form and controlled centrally online).
Growing user base: As of end-December 2021, B2B Platform users totaled 679,684 companies (+30.1% YoY) and 1,309,477 offices (+26.8% YoY). In FY12/21, the total transaction value for the company’s platforms reached JPY18.5tn (+45.3% YoY). As of end-December 2021, the core B2B Platform Ordering service facilitated orders between 3,439 buyer companies (restaurants, hotel chains, and other parties procuring food ingredients) (+8.0% YoY, penetration rate of roughly 45%), and 40,120 seller companies (manufacturers and wholesalers) (+5.8% YoY, penetration rate of roughly 55%). However,
a survey sent by the company to food wholesalers in 2021 revealed that roughly
80% of orders are still
conducted via telephone or fax. As of end-December 2021, B2B Platform Invoicing users totaled 670,528 companies (+30.7% YoY), and the service is also attracting users outside of the food industry. At the same time, B2B Platform Contract, a relatively new service launched in 2018, had signed up 27,296 users (number of companies logging in; +103.3% YoY).
Trends and outlook
In FY12/21, Infomart reported sales of JPY9.8bn (+12.1% YoY), operating profit of JPY1.0bn (-30.0% YoY), and net income attributable to owners of the parent of JPY539mn (-46.9% YoY). Sales in the B2B Platform Food segment were up 4.7% YoY, as new starts by buyer companies seeking to use cloud-based management systems for B2B Platform Ordering and B2B Platform Standards Database services increased, resulting in higher system usage fees from buyer companies. Sales in the B2B Platform ES segment were up 36.0% YoY, driven by an increase in the number of companies under paid contract for the company's B2B Platform Invoicing service. Operating profit declined due to an increase in personnel expenses and higher data center expenses stemming from an expansion of the company's server infrastructure and the implementation of disaster recovery measures.
The company's FY12/22 forecast calls for sales of JPY11.0bn (+11.7% YoY), operating profit of JPY100mn (-90.3% YoY), and net income attributable to owners of the parent of JPY43mn (-92.0% YoY). Infomart forecasts sales in the B2B Platform Food segment to rise 8.8% YoY. The company looks for an increase in system usage fees due to an expansion in the number of companies using the B2B Platform Ordering service, as more companies are adopting digital technology in the food industry. In the B2B Platform ES segment, the company expects sales to grow 18.8% YoY, aided by revisions to the Electronic Books Maintenance Act and the launch of a new invoice system. The company anticipates operating profit to drop 90.3% YoY on an increase in personnel expenses and higher data center expenses stemming from the expansion of the company's server infrastructure and the implementation of disaster recovery measures.
In February 2022, Infomart unveiled a medium-term business plan calling for FY12/26 sales of JPY20.0bn and operating profit of JPY5.0bn. The two pillars of the plan are "aggressive investment to fuel growth" and "accelerated diversification of earnings sources." The plan looks for overall sales to expand at a CAGR of 16% in the five years through FY12/26, breaking down into CAGRs of 8% for the B2B Platform Food segment (B2B Platform Ordering 5%, B2B Platform Ordering Light 10%) and 30% for the B2B Platform ES segment (B2B Platform Invoicing 35%).
Strengths and weaknesses
Shared Research sees the company’s strengths as market dominance, a robust earnings structure supported by monthly usage fees, and solid financials. We think its weaknesses are small size, cost of launching new services, and yet to become an industry standard. (See the Strengths and weaknesses section for details.)
Key financial data
Income statement
FY12/13
FY12/14
FY12/15
FY12/16
FY12/17
FY12/18
FY12/19
FY12/20
FY12/21
FY12/22
(JPYmn)
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Est.
Sales
4,339
4,980
5,633
6,155
6,709
7,640
8,541
8,777
9,836
10,986
YoY
14.7%
14.8%
13.1%
9.3%
9.0%
13.9%
11.8%
2.8%
12.1%
11.7%
Gross profit
2,849
3,835
4,104
4,340
4,311
5,233
6,252
6,083
6,208
5,954
YoY
15.0%
34.6%
7.0%
5.8%
-0.7%
21.4%
19.5%
-2.7%
2.1%
-4.1%
Gross profit margin
65.7%
77.0%
72.9%
70.5%
64.2%
68.5%
73.2%
69.3%
63.1%
54.2%
SG&A expenses
1,754
1,890
2,009
2,383
2,545
2,880
3,782
4,611
5,177
5,854
YoY
5.5%
7.7%
6.3%
18.6%
6.8%
13.2%
31.3%
21.9%
12.3%
13.1%
SG&A ratio
40.4%
37.9%
35.7%
38.7%
37.9%
37.7%
44.3%
52.5%
52.6%
53.3%
Operating profit
1,095
1,945
2,095
1,957
1,766
2,354
2,470
1,472
1,031
100
YoY
34.3%
77.7%
7.7%
-6.6%
-9.8%
33.3%
4.9%
-40.4%
-30.0%
-90.3%
Operating profit margin
25.2%
39.1%
37.2%
31.8%
26.3%
30.8%
28.9%
16.8%
10.5%
0.9%
Recurring profit
1,107
1,962
2,041
1,947
1,752
2,336
2,460
1,458
1,022
41
YoY
35.8%
77.2%
4.0%
-4.6%
-10.0%
33.4%
5.3%
-40.7%
-29.9%
-96.0%
Recurring profit margin
25.5%
39.4%
36.2%
31.6%
26.1%
30.6%
28.8%
16.6%
10.4%
0.4%
Net income
631
1,178
1,309
1,205
384
1,553
1,695
1,014
539
43
YoY
27.1%
86.6%
11.1%
-7.9%
-68.1%
304.3%
9.2%
-40.2%
-46.9%
-92.0%
Net margin
14.5%
23.7%
23.2%
19.6%
5.7%
20.3%
19.8%
11.6%
5.5%
0.4%
Per-share data (split-adjusted; JPY)
Shares outstanding (year-end; mn)
236.3
241.4
259.4
259.4
228.6
228.6
228.6
228.6
228.6
EPS (JPY)
2.72
4.97
5.35
4.65
1.59
6.80
7.41
4.44
2.36
0.19
EPS (fully diluted; JPY)
2.62
4.97
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Dividend per share (JPY)
1.33
2.42
2.94
2.95
3.27
3.67
3.71
3.71
1.43
0.18
Payout ratio
48.9%
48.8%
55.0%
63.5%
206.3%
54.0%
50.0%
83.6%
60.6%
94.0%
Book value per share (JPY)
13.8
16.7
36.3
38.0
41.5
44.9
48.6
49.4
49.6
Balance sheet (JPYmn)
Total current assets
1,786
2,233
7,205
6,490
6,652
7,995
9,054
8,811
9,144
Cash and deposits
620
801
5,601
4,863
5,116
6,338
7,268
7,056
6,915
Accounts receivable
1,036
1,277
1,441
1,494
1,413
1,538
1,671
1,657
1,846
Other
130
154
163
133
123
119
116
99
383
Total fixed assets
3,202
3,457
3,841
4,936
4,527
4,136
3,889
4,205
4,600
Tangible fixed assets
45
37
77
232
223
184
161
201
161
Intangible assets
2,849
3,221
3,451
3,874
3,095
2,769
2,410
2,473
2,682
Software
2,725
2,768
2,970
3,408
2,915
2,650
2,364
2,256
2,463
Software in progress
109
438
466
453
168
103
32
205
205
Other
15
15
14
12
12
16
14
13
14
Investments and other assets
307
200
313
830
1,208
1,183
1,318
1,530
1,757
Total assets
4,988
5,690
11,046
11,426
11,179
12,130
12,943
13,016
13,744
Total current liabilities
1,689
1,647
1,627
1,537
1,655
1,841
1,797
1,691
2,276
Accounts payable
160
157
151
139
114
104
88
88
100
Short-term debt
688
520
520
520
820
770
770
770
770
Other
841
970
956
878
721
967
940
833
1,406
Total fixed liabilities
13
13
4
28
28
28
28
31
42
Long-term debt
-
-
-
-
-
-
-
-
-
Other
13
13
4
28
28
28
28
31
42
Total liabilities
1,702
1,661
1,631
1,565
1,683
1,870
1,826
1,722
2,318
Shareholders' equity
3,326
4,117
9,503
9,945
9,572
10,332
11,186
11,351
11,373
Total valuation and translation adjustments
-68
-88
-89
-84
-77
-71
-69
-58
-37
Non-controlling interests
28
-
-
-
-
-
-
-
89
Total net assets
3,286
4,029
9,414
9,861
9,495
10,261
11,118
11,294
11,425
Cash flow statement (JPYmn)
Cash flows from operating activities
1,710
1,878
2,078
2,394
2,529
3,113
2,678
1,982
1,678
Pre-tax profit
1,077
1,929
2,038
1,789
570
2,216
2,240
1,409
808
Depreciation
1,113
749
981
1,214
1,378
1,249
1,002
997
1,045
Impairment loss
-
32
-
158
1,181
119
210
-
188
Cash flows from investing activities
-1,186
-1,145
-1,369
-2,398
-1,818
-1,047
-907
-1,343
-1,804
Purchase of investment securities
8
4
3
4
-
-
-3
-50
-628
Purchase of tangible fixed assets
-
-
26
-
-30
-28
-14
-67
-75
Purchase of intangible assets
-
0
3
-
-1,788
-1,011
-787
-988
-1,181
Other
-1,193
-1,149
-1,401
-2,402
-0
-8
-104
-238
79
Cash flows from financing activities
-491
-555
4,091
-733
-457
-843
-841
-849
-533
Change in short-term borrowings
-
120
-
-
300
-50
-
-
-
Change in long-term borrowings
-288
-288
-
-
-
-
-
-
-
Dividends paid
-258
-443
-608
-733
-757
-793
-840
-849
-533
Proceeds from issuance of shares
56
56
4,285
-
-
-
-
-
-
Financial ratios
Shareholders' equity
3,258
4,029
9,414
9,861
9,495
10,261
11,118
11,294
11,336
Total interest-bearing debt
688
520
520
520
820
770
770
770
770
Net cash
-68
281
5,081
4,343
4,296
5,568
6,498
6,286
6,145
ROE
20.6%
32.3%
19.5%
12.5%
4.0%
15.7%
15.9%
9.1%
4.8%
ROA (RP-based)
23.0%
36.8%
24.4%
17.3%
15.5%
20.0%
19.6%
11.2%
7.6%
Equity ratio
65.3%
70.8%
85.2%
86.3%
84.9%
84.6%
85.9%
86.8%
82.5%
Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.
Note: The company carried out 2-for-1 stock splits on January 1, 2014 (effective date), on January 1, 2015 (effective date), on January 1, 2017 (effective date), and on January 1, 2020 (effective date). Per share data above is adjusted for the stock splits.
Trends and outlook
Quarterly trends and results
Cumulative
FY12/20
FY12/21
FY12/22
FY12/22
(JPYmn)
Q1
Q1–Q2
Q1–Q3
Q1–Q4
Q1
Q1–Q2
Q1–Q3
Q1–Q4
Q1
Q1–Q2
Q1–Q3
Q1–Q4
% of Est.
1H Est.
Sales
2,180
4,207
6,411
8,777
2,300
4,693
7,154
9,836
2,561
49.0%
5,227
YoY
9.0%
2.7%
2.2%
2.8%
5.5%
11.6%
11.6%
12.1%
11.4%
11.4%
Gross profit
1,563
2,951
4,468
6,083
1,535
3,126
4,576
6,208
1,457
50.7%
2,874
YoY
5.4%
-3.5%
-4.7%
-2.7%
-1.8%
5.9%
2.4%
2.1%
-5.1%
-8.1%
Gross profit margin
71.7%
70.2%
69.7%
69.3%
66.7%
66.6%
64.0%
63.1%
56.9%
55.0%
SG&A expenses
1,078
2,202
3,415
4,611
1,151
2,419
3,667
5,177
1,273
44.9%
2,839
YoY
30.5%
27.6%
29.5%
21.9%
6.8%
9.9%
7.4%
12.3%
10.6%
17.4%
SG&A ratio
49.4%
52.3%
53.3%
52.5%
50.1%
51.5%
51.3%
52.6%
49.7%
54.3%
Operating profit
485
749
1,053
1,472
384
707
909
1,031
184
524.9%
35
YoY
-26.1%
-43.7%
-48.7%
-40.4%
-20.8%
-5.7%
-13.7%
-30.0%
-52.1%
-95.0%
Operating profit margin
22.2%
17.8%
16.4%
16.8%
16.7%
15.1%
12.7%
10.5%
7.2%
0.7%
Recurring profit
484
747
1,046
1,458
402
728
922
1,022
170
3,395.4%
5
YoY
-26.1%
-43.4%
-48.7%
-40.7%
-16.9%
-2.6%
-11.9%
-29.9%
-57.8%
-99.3%
Recurring profit margin
22.2%
17.8%
16.3%
16.6%
17.5%
15.5%
12.9%
10.4%
6.6%
0.1%
Net income
333
514
717
1,014
285
462
586
539
110
344.8%
32
YoY
-44.6%
-51.4%
-53.8%
-40.2%
-14.4%
-10.2%
-18.3%
-46.9%
-61.3%
-93.1%
Net margin
15.3%
12.2%
11.2%
11.6%
12.4%
9.8%
8.2%
5.5%
4.3%
0.6%
Quarterly
FY12/20
FY12/21
FY12/22
FY12/22
(JPYmn)
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
% of Est.
FY Est.
Sales
2,180
2,027
2,204
2,366
2,300
2,393
2,461
2,682
2,561
23.3%
10,986
YoY
9.0%
-3.3%
1.3%
4.4%
5.5%
18.1%
11.7%
13.3%
11.4%
377.7%
Gross profit
1,563
1,389
1,517
1,614
1,535
1,591
1,450
1,632
1,457
24.5%
5,954
YoY
5.4%
-11.8%
-7.0%
3.3%
-1.8%
14.6%
-4.4%
1.1%
-5.1%
287.9%
Gross profit margin
71.7%
68.5%
68.8%
68.2%
66.7%
66.5%
58.9%
60.9%
56.9%
54.2%
SG&A expenses
1,078
1,124
1,214
1,196
1,151
1,268
1,248
1,510
1,273
21.8%
5,854
YoY
30.5%
24.8%
33.2%
4.5%
6.8%
12.8%
2.8%
26.3%
10.6%
408.6%
SG&A ratio
49.4%
55.4%
55.1%
50.5%
50.1%
53.0%
50.7%
56.3%
49.7%
53.3%
Operating profit
485
265
303
419
384
323
202
122
184
183.7%
100
YoY
-26.1%
-60.8%
-57.9%
0.0%
-20.8%
22.1%
-33.3%
-70.9%
-52.1%
-73.9%
Operating profit margin
22.2%
13.1%
13.8%
17.7%
16.7%
13.5%
8.2%
4.5%
7.2%
0.9%
Recurring profit
484
264
298
412
402
326
194
100
170
414.1%
41
YoY
-26.1%
-60.4%
-58.4%
-2.3%
-16.9%
23.7%
-35.1%
-75.7%
-57.8%
-89.8%
Recurring profit margin
22.2%
13.0%
13.5%
17.4%
17.5%
13.6%
7.9%
3.7%
6.6%
0.4%
Net income
333
181
203
297
285
177
124
-47
110
256.6%
43
YoY
-44.6%
-60.4%
-59.0%
109.9%
-14.4%
-2.4%
-38.9%
-
-61.3%
-84.9%
Net margin
15.3%
8.9%
9.2%
12.6%
12.4%
7.4%
5.0%
-
4.3%
0.4%
Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.
Results by segment
By segment
FY12/20
FY12/21
FY12/22
FY12/22
Cumulative (JPYmn)
Q1
Q1–Q2
Q1–Q3
Q1–Q4
Q1
Q1–Q2
Q1–Q3
Q1–Q4
Q1
Q1–Q2
Q1–Q3
Q1–Q4
% of Est.
1H Est.
Sales
2,180
4,207
6,411
8,777
2,300
4,693
7,154
9,836
2,561
49.0%
5,227
YoY
9.0%
2.7%
2.2%
2.8%
5.5%
11.6%
11.6%
12.1%
11.4%
11.4%
B2B Platform Food
1,713
3,253
4,935
6,688
1,657
3,360
5,108
7,000
1,807
48.7%
3,711
YoY
5.6%
-1.7%
-2.1%
-2.0%
-3.3%
3.3%
3.5%
4.7%
9.0%
10.4%
% of total
78.6%
77.3%
77.0%
76.2%
72.1%
71.6%
71.4%
71.2%
70.6%
71.0%
B2B Platform ES
466
952
1,472
2,085
643
1,333
2,046
2,835
754
49.8%
1,515
YoY
23.3%
21.2%
19.7%
22.0%
37.9%
40.0%
39.0%
36.0%
17.3%
13.7%
% of total
21.4%
22.6%
23.0%
23.8%
27.9%
28.4%
28.6%
28.8%
29.4%
29.0%
Other
11
22
34
45
3
4
4
4
-
YoY
-0.1%
-0.1%
2.4%
0.9%
-69.1%
-84.0%
-89.4%
-91.9%
-
% of total
0.5%
0.5%
0.5%
0.5%
0.2%
0.1%
0.0%
0.0%
0.0%
Adjustments
-10
-20
-30
-41
-3
-4
-4
-4
-
Operating profit
485
749
1,053
1,472
384
707
909
1,031
184
524.9%
35
YoY
-26.1%
-43.7%
-48.7%
-40.4%
-20.8%
-5.7%
-13.7%
-30.0%
-52.1%
-95.0%
Operating profit margin
22.2%
17.8%
16.4%
16.8%
16.7%
15.1%
12.7%
10.5%
7.2%
0.7%
B2B Platform Food
763
1,308
1,993
2,687
605
1,189
1,666
2,164
490
51.9%
944
YoY
-6.3%
-21.8%
-22.1%
-20.3%
-20.7%
-9.1%
-16.4%
-19.5%
-19.1%
-20.6%
Operating profit margin
44.5%
40.2%
40.4%
40.2%
36.5%
35.4%
32.6%
30.9%
27.1%
25.4%
% of total
158.1%
175.6%
190.3%
183.6%
159.1%
169.6%
184.9%
212.2%
271.3%
2,551.4%
B2B Platform ES
-280
-562
-945
-1,219
-221
-484
-760
-1,138
-310
-
-907
YoY
-
-
-
-
-
-
-
-
-
-
Operating profit margin
-60.0%
-59.0%
-64.2%
-58.4%
-34.5%
-36.3%
-37.1%
-40.1%
-41.1%
-59.9%
% of total
-58.0%
-75.4%
-90.2%
-83.2%
-58.2%
-69.0%
-84.3%
-111.6%
-171.6%
-2,451.4%
Other
-1
-1
-1
-5
-4
-5
-5
-6
1
YoY
-
-
-
-
-
-
-
-
-
Operating profit margin
-6.0%
-5.0%
-4.2%
-10.4%
-101.7%
-127.7%
-152.6%
-174.2%
-
% of total
-0.1%
-0.1%
-0.1%
-0.3%
-0.9%
-0.6%
-0.6%
-0.6%
0.3%
Adjustments
2
5
5
8
3
6
8
11
3
By segment
FY12/20
FY12/21
FY12/22
FY12/22
Quarterly (JPYmn)
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
% of Est.
FY Est.
Sales
2,180
2,027
2,204
2,366
2,300
2,393
2,461
2,682
2,561
23.3%
10,986
YoY
9.0%
-3.3%
1.3%
4.4%
5.5%
18.1%
11.7%
13.3%
11.4%
377.7%
B2B Platform Food
1,713
1,540
1,683
1,753
1,657
1,703
1,748
1,893
1,807
23.7%
7,619
YoY
5.6%
-8.8%
-2.8%
-1.9%
-3.3%
10.6%
3.9%
8.0%
9.0%
359.8%
% of total
78.6%
76.0%
76.4%
74.1%
72.1%
71.2%
71.0%
70.6%
70.6%
69.4%
B2B Platform ES
466
486
520
613
643
690
713
789
754
22.4%
3,367
YoY
23.3%
19.3%
17.2%
27.8%
37.9%
41.9%
37.2%
28.7%
17.3%
423.9%
% of total
21.4%
24.0%
23.6%
25.9%
27.9%
28.8%
29.0%
29.4%
29.4%
30.6%
Other
11
11
12
11
3
0
0
0
-
YoY
-0.1%
-0.1%
7.6%
-3.3%
-69.1%
-99.4%
-99.8%
-99.5%
-
% of total
0.5%
0.5%
0.5%
0.5%
0.2%
0.0%
0.0%
0.0%
0.0%
Adjustments
-10
-10
-10
-10
-3
-0
-0
-0
-
Operating profit
485
265
303
419
384
323
202
122
184
183.7%
100
YoY
-26.1%
-60.8%
-57.9%
0.0%
-20.8%
22.1%
-33.3%
-70.9%
-52.1%
-73.9%
Operating profit margin
22.2%
13.1%
13.8%
17.7%
16.7%
13.5%
8.2%
4.5%
7.2%
0.9%
B2B Platform Food
763
545
686
694
605
584
477
498
490
25.7%
1,903
YoY
-6.3%
-36.5%
-22.7%
-14.6%
-20.7%
7.1%
-30.4%
-28.3%
-19.1%
214.4%
Operating profit margin
44.5%
35.4%
40.7%
39.6%
36.5%
34.3%
27.3%
26.3%
27.1%
25.0%
% of total
158.1%
207.8%
226.5%
166.6%
159.1%
182.1%
238.7%
418.6%
271.3%
B2B Platform ES
-280
-282
-383
-274
-221
-262
-276
-378
-310
-
-1,796
YoY
-
-
-
-
-
-
-
-
-
-
Operating profit margin
-60.0%
-58.0%
-73.6%
-44.7%
-34.5%
-38.0%
-38.7%
-47.9%
-41.1%
-53.3%
% of total
-58.0%
-107.6%
-126.4%
-65.8%
-58.2%
-81.7%
-138.2%
-317.9%
-171.6%
Other
-1
-0
-0
-3
-4
-1
-1
-1
1
YoY
-
-
-
-
-
-
-
-
-
Operating profit margin
-
-
-
-
-
-
-
-
-
% of total
-0.1%
-0.2%
-0.1%
-0.8%
-0.9%
-0.3%
-0.5%
-0.7%
0.3%
Adjustments
2
2
1
2
3
2
2
3
3
Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.
Main management indicators
Overall B2B Platform
FY12/20
FY12/21
FY12/22
Cumulative (No. of companies)
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
No. of user companies
412,391
437,615
475,619
522,576
566,446
604,568
641,129
679,684
716,260
YoY
37.0%
33.3%
34.2%
34.8%
37.4%
38.2%
34.8%
30.1%
26.4%
No. of user locations
866,854
903,929
958,713
1,032,672
1,101,158
1,175,773
1,241,830
1,309,477
1,381,740
YoY
27.2%
24.0%
24.3%
25.2%
27.0%
30.1%
29.5%
26.8%
25.5%
B2B Platform Food
FY12/20
FY12/21
FY12/22
Cumulative (No. of companies)
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Ordering
Total number of user companies
39,858
40,210
40,591
41,117
41,593
42,396
43,048
43,559
44,082
YoY
6.3%
5.4%
4.7%
4.7%
4.4%
5.4%
6.1%
5.9%
6.0%
Buyers
3,132
3,101
3,123
3,185
3,230
3,298
3,360
3,439
3,509
YoY
12.7%
7.6%
4.4%
3.9%
3.1%
6.4%
7.6%
8.0%
8.6%
Sellers
36,726
37,109
37,468
37,932
38,363
39,098
39,688
40,120
40,573
YoY
5.8%
5.2%
4.7%
4.8%
4.5%
5.4%
5.9%
5.8%
5.8%
Store count (buyers)
60,288
59,614
59,700
60,543
61,511
63,087
64,258
66,010
67,203
YoY
10.9%
7.6%
5.0%
4.0%
2.0%
5.8%
7.6%
9.0%
9.3%
Standards Database
Total number of user companies
9,474
9,883
10,075
10,312
10,425
10,576
10,787
10,909
10,973
YoY
10.1%
13.1%
12.7%
11.9%
10.0%
7.0%
7.1%
5.8%
5.3%
Buyers
761
771
792
806
815
840
865
892
910
YoY
14.3%
11.3%
10.6%
9.8%
7.1%
8.9%
9.2%
10.7%
11.7%
Wholesalers
674
678
687
697
698
698
707
709
710
YoY
8.4%
7.4%
5.5%
4.5%
3.6%
2.9%
2.9%
1.7%
1.7%
Manufacturers
7,365
7,756
7,909
8,112
8,214
8,340
8,508
8,599
8,643
YoY
10%
14%
14%
13%
12%
8%
8%
6%
5%
B2B Platform ES
FY12/20
FY12/21
FY12/22
Cumulative (No. of companies)
Q1
Q1–Q2
Q1–Q3
Q1–Q4
Q1
Q1–Q2
Q1–Q3
Q1–Q4
Q1
Q1–Q2
Q1–Q3
Q1–Q4
Invoicing
Total number of paid contracts
4,654
4,790
5,032
5,336
5,551
5,874
6,198
6,528
6,971
YoY
20.2%
18.2%
18.4%
20.0%
19.3%
22.6%
23.2%
22.3%
25.6%
Receiver model
3,197
3,253
3,361
3,514
3,640
3,834
4,026
4,192
4,435
YoY
17.1%
14.4%
13.6%
13.9%
13.9%
17.9%
19.8%
19.3%
21.8%
Issuer model
1,457
1,537
1,671
1,822
1,911
2,040
2,172
2,336
2,536
YoY
27.5%
27.2%
29.3%
33.8%
31.2%
32.7%
30.0%
28.2%
32.7%
No. of user companies (logins)
402,534
427,835
465,971
513,040
557,008
595,240
631,921
670,528
707,168
YoY
38.5%
34.4%
35.4%
35.8%
38.4%
39.1%
35.6%
30.7%
27.0%
Contract
No. of user companies (logins)
5,424
8,241
10,697
13,426
16,751
20,289
23,496
27,296
31,344
YoY
-
-
-
-
208.8%
146.2%
119.7%
103.3%
87.1%
Matching
No. of user companies
8,964
8,869
8,849
8,901
8,921
8,954
8,982
9,043
9,118
YoY
1.1%
-0.6%
-1.5%
-0.7%
-0.5%
1.0%
1.5%
1.6%
2.2%
Buyers
7,489
7,433
7,429
7,477
7,494
7,541
7,573
7,615
7,665
YoY
3.6%
1.8%
0.4%
0.5%
0.1%
1.5%
1.9%
1.8%
2.3%
Sellers
1,475
1,436
1,420
1,424
1,427
1,413
1,409
1,428
1,453
YoY
-10.2%
-11.3%
-10.4%
-6.8%
-3.3%
-1.6%
-0.8%
0.3%
1.8%
Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.
Q1 FY12/22 results (out April 28, 2022)
Overview
Sales: JPY2.6bn (+11.4% YoY)
Operating profit: JPY184mn (-52.1% YoY)
Recurring profit: JPY170mn (-57.8% YoY)
Net income attributable to owners of the parent: JPY110mn (-61.3% YoY)
Results summary
Progress rate
Q1 progress versus the 1H FY12/22 company forecast was 49.0% for sales (49.0% of 1H FY12/21 results in Q1 FY12/21), 524.9% for operating profit (54.3%), 3,395.4% for recurring profit (55.2%), and 344.8% for net income attributable to owners of the parent (61.8%).
Against the full-year forecast, Q1 progress was 23.3% for sales (23.4% of FY12/21 results in Q1 FY12/21), 183.7% for operating profit (37.2%), 414.4% for recurring profit (39.3%), and 256.6% for net income attributable to owners of the parent (53.0%).
Sales
Sales were up 11.4% YoY to JPY2.6bn. In the B2B Platform Food segment, sales rose 9.0% YoY. Among users of the B2B Platform Ordering and B2B Platform Standards Database services, new starts by buyer companies seeking to use cloud-based management systems increased. As a result, system usage fees from buyer companies grew.
In the B2B Platform ES segment, sales grew 17.3% YoY. System usage fees rose, driven by the spread of teleworking and heightened interest in operational efficiency and adoption of digital technology among users of the B2B Platform Invoicing service.
As of end-Q1 FY12/22, B2B Platform users totaled 716,260 companies (+26.4% YoY) and 1,381,740 offices (+25.5% YoY).
Costs and profits
Operating profit fell 52.1% YoY to JPY184mn. Sales growth of JPY149mn in B2B Platform Food and JPY111mn in B2B Platform ES was absorbed by higher expenditures. Expense increases included data center costs (+JPY323mn) stemming from the expansion of the company’s server infrastructure to accommodate increased usage and the implementation of disaster recovery measures. Higher promotion expenses (+JPY40mn) and personnel expenses owing to the hiring of more sales and sales support staff (+JPY13mn) also weighed down the operating profit.
Segment results
B2B Platform Food segment
Sales: JPY1.8bn (+9.0% YoY)
Operating profit: JPY490mn (-19.1% YoY)
Sales rose 9.0% YoY to JPY1.8bn. In the B2B Platform Ordering service, system usage fees from buyer companies rose in line with an increase in new customer count among operators seeking to introduce cloud-based management systems. These included operators of izakaya (Japanese-style pubs), restaurants, hotels, meal services, and new services such as takeout and delivery. Seller companies benefited from the easing of restrictions associated with the COVID-19 pandemic. Transaction volumes of food materials and other goods rose, and system usage fees from seller companies (charged on a pay-per-use basis) improved YoY. Users of the B2B Platform Standards Database service grew, and system usage fees were up YoY.
The combined number of buyer and seller companies using the platform’s two services increased, with users of the B2B Platform Ordering service up 6.0% YoY to 44,082 companies and users of the B2B Platform Standards Database service rising 5.3% YoY to 10,973 companies.
Operating profit fell 19.1% YoY to JPY490mn.
B2B Platform ES segment
Sales: JPY754mn (+17.3% YoY)
Operating loss: JPY310mn (operating loss of JPY221mn in Q1 FY12/21)
Sales expanded 17.3% YoY to JPY754mn. In the B2B Platform Invoicing service, operational efficiencies, progress in digital transformation, and spread of teleworking led to an increase in new companies under paid contract, both on the receiving and issuing end of invoicing. New customers were not limited to the food industry but covered a wide range of industries. In addition, system usage fees rose as utilization (shift to electronic invoicing) steadily progressed.
The number of companies using the B2B Platform Invoicing service (those that log into the system) increased 27.0% YoY to 707,168 companies. Of this number, 4,435 (+21.8% YoY) were companies that have signed a paid contract on the receiving end, and 2,536 (+32.7% YoY) were those that have signed a paid contract on the issuing end.
The operating loss came to JPY310mn. This primarily reflected an increase in personnel expenses owing to the hiring of sales staff needed to expand the B2B Platform Invoicing service. Promotion expenses rose as well, as the company stepped up marketing initiatives.
Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.
Overview
Sales: JPY11.0bn (+11.7% YoY)
Operating profit: JPY100mn (-90.3% YoY)
Recurring profit: JPY41mn (-96.0% YoY)
Net income attributable to owners of the parent: JPY43mn (-92.0% YoY)
Initiatives: Infomart expects sales to decline in FY12/22, but it has positioned the
year as a period of investment to accelerate sales growth over the medium
term. Specifically, it plans to strengthen its server infrastructure in line
with user growth to ensure reliable services. It also looks to invest in development
and sales promotion to launch new services and refocus on existing fields.
Sales: The company forecasts sales in the B2B Platform Food segment to rise 8.8% YoY. The COVID-19 pandemic spurred the need for increasingly sophisticated management in the food industry through the adoption of digital technology. The company aims to properly respond to this demand and increase revenue from system usage fees by growing the number of companies using the B2B Platform Ordering service. The company also expects an increase in sales from seller companies using the B2B Platform Ordering service that are charged on a pay-per-use basis (charges are based on food transaction volume). In the B2B Platform ES segment, Infomart expects sales to grow 18.8% YoY. The company looks for sustained strong growth in the B2B Platform Invoicing service as companies are increasingly adopting digital technology in their operations, driven by greater use of teleworking, revisions to the Electronic Books Maintenance Act, and the upcoming launch of a new qualified invoice system in 2023.
Operating profit: The company forecasts a 53.2% YoY increase in data center costs as it will incur expenses related to the disaster recovery measures launched in July 2021 over the full year. It sees the increase in data center costs easing from FY12/23. The company also projects a 22.2% YoY increase in software amortization as a result of ongoing investment in software development. It looks for a 7.9% YoY increase in personnel expenses driven mainly by growth in sales staff. As a result of these expenditures, the company forecasts operating profit to drop 90.3% YoY to JPY100mn.
Cost projections
FY12/18
FY12/19
FY12/20
FY12/21
FY12/22
(JPYmn)
Cons.
Cons.
Cons.
Cons.
Est.
Sales
7,640
8,541
8,777
9,836
10,986
YoY
13.9%
11.8%
2.8%
12.1%
11.7%
Costs (cost of sales + SG&A expenses)
5,286
6,071
7,306
8,805
10,886
YoY
6.9%
14.8%
20.3%
20.5%
23.6%
Data center expenses
539
661
1,027
1,736
2,659
YoY
-
22.6%
55.4%
69.0%
53.2%
Software amortization
1,418
1,284
1,277
1,354
1,654
YoY
-
-9.4%
-0.5%
6.0%
22.2%
Commissions
448
343
389
536
717
YoY
-
-23.4%
13.4%
37.8%
33.8%
Personnel expenses
1,545
2,116
2,545
2,815
3,036
YoY
-
37.0%
20.3%
10.6%
7.9%
Promotion expenses
128
251
590
662
738
YoY
-
96.1%
135.1%
12.2%
11.5%
Other
1,208
1,416
1,478
1,702
2,082
YoY
-
17.2%
4.4%
15.2%
22.3%
Operating profit
2,354
2,470
1,472
1,031
100
YoY
33.3%
4.9%
-40.4%
-30.0%
-90.3%
Source: Shared Research based on company data
By segment
B2B Platform Food segment
Sales: JPY7.6bn (+8.8% YoY)
Operating profit: JPY1.9bn (-12.0% YoY)
The company
forecasts sales of JPY7.6bn (+8.8% YoY). It plans to promote the digitization
of transactions between restaurant operators and wholesalers in an effort to
meet the needs of restaurant chains, outlets, and wholesalers. Specifically, it
looks to increase the number of companies using the B2B Platform Ordering service, and
expand related system usage fees. In addition, it forecasts an increase in sales
from seller companies using the B2B Platform Ordering service that are charged
on a pay-per-use basis (charges are based on food transaction volume).
B2B Platform ES segment
Sales: JPY3.4bn (+18.8% YoY)
Operating loss: JPY1.8bn (operating loss of JPY1.1bn in FY12/21)
The company
forecasts sales of JPY3.4bn (+18.8% YoY). It looks for sustained strong growth
in the B2B Platform Invoicing service driven by digital transformation (DX) amid
growing adoption of telework, revisions to the Electronic Books Maintenance Act,
and the launch of a new invoice system in 2023.
In February 2022, Infomart unveiled
a new medium-term business plan calling for FY12/26 sales of JPY20.0bn and operating profit of JPY5.0bn. The two pillars of the plan are "aggressive
investment to fuel growth" and "accelerated diversification of earnings sources."
Aggressive investment to fuel growth
The company
will pursue collaborations with other companies and business acquisitions, and
work to expand and solidify the value of
its B2B platforms in the B2B Platform Food and B2B Platform ES
segments. In the B2B Platform Invoicing service of the B2B Platform ES segment,
the company intends to capture digital transformation (DX) needs driven by the new invoice system
slated to be rolled out in October 2023. It will also aim to secure a favorable competitive position through aggressive investment in sales
promotion to increase the number of companies that use its services, as well as in system development and personnel expansion.
Under the new invoice system,
taxable business operators will be required to issue qualified invoices. Sellers
in a transaction will need to provide such invoices if so requested by
buyers, and buyers will in principle need to preserve the invoices received
from sellers. Companies that still use an accounting system that does not support
the new invoice system will need to either upgrade their existing system or adopt a
new system.
Accelerated diversification of earnings sources
To diversify its earnings sources, the company
will accelerate existing and new initiatives, jointly create new business models underpinned by a massive corporate
member base with partners, and aim to make its services de-facto standard
in various fields.
Numerical targets
As numerical targets, the plan calls for FY12/26 sales
of JPY20.0bn and operating profit of JPY5.0bn. It looks
for overall sales to grow at a CAGR of 16% in the five years through
FY12/26, breaking down into CAGRs of 8% for the B2B Platform Food business (B2B
Platform Ordering 5%, B2B Platform Ordering Light 10%) and 30% for the B2B
Platform ES business (B2B Platform Invoicing 35%).
Business
Company overview
Infomart provides platforms for commercial transactions mainly to the food industry, receiving a monthly system usage fee from customers based on a fixed price or pay-per-use plan as well as a system set-up fee from new customers. The company has a stable earnings base, because monthly system usage fees account for around 95% of sales and churn rates are low.
In
FY12/21, sales were JPY9.8bn and operating profit was JPY1.0bn. The company operates in two segments: B2B Platform Food (71.2% of sales in FY12/21) and B2B Platform ES (28.8%). The B2B platforms offered in each segment are as follows.
Main B2B platforms
Segment
Services
Overview
B2B Platform Food
B2B Platform Ordering
Platform that digitizes ordering operations between restaurants, wholesalers, and food manufacturers, contributing to significant efficiency gains over traditional ordering via telephone or fax. Also reduces cross-checking processes needed to share daily transaction data, and substantially reduces work to determine monthly settlement amounts.
B2B Platform Standards Database
Management tool for allergens and food origin data that promotes safe and secure food. Improves efficiency by digitally managing product standards of different formats using a unified format.
B2B Platform ES
B2B Platform Invoicing
System that digitizes the issuance and receipt of invoices regardless of industry, and streamlines accounting operations.
B2B Platform Contract
Platform that uses blockchain technology to digitize contracts between companies, and provides internal workflow functions, further improving the convenience of business dealings between companies and contributing to a reduction in paper usage.
B2B Platform Matching
A matching website that facilitates online negotiations between nationwide food ingredient sellers and buyers, providing a one-stop service for finding buyers and sellers, negotiating prices, price estimates, ordering, and payments.
Source: Shared Research based on company data
Infomart
was founded in 1998, listed on TSE Mothers in 2006, and had a listing change to
TSE1 in 2015. The company had 613 employees (506 full-time and 107 part-time) at
end-December 2021.
Business model
Provider of B2B platforms
Infomart provides platforms that digitize ordering and invoicing operations via the cloud. Its revenue model centers on monthly fees received for providing companies with services to improve the efficiency of B2B transactions. While the business requires substantial upfront software development costs, booked as intangible fixed assets on the balance sheet and then amortized, it offers a high marginal profit rate, because cost of sales is unlikely to increase once the service is launched. Infomart offers seven platforms, including Ordering, Standards Database, Invoicing, Matching, and Contract. Penetration rates are high in the food industry for B2B Ordering and Standards Database platforms, which are targeted at food industry*, and these platforms are becoming industry standards.
*The “food industry” refers to the food and retail industries, as well as some service businesses. Specifically, it refers to businesses involved in food manufacturing, sellers of local specialty products, agricultural and fishing cooperatives, wholesalers, producers, restaurants, hotels, ryokan (Japanese-style inns), supermarkets, retailers, department stores, and companies that handle side dishes and provide prepared meals and boxed lunches.
Cloud service, recurring revenue model
The B2B e-commerce platform’s features: 1) Cloud service offering online solutions
for daily business transactions—since the system is intended to be general
purpose, there is no need to customize it for individual customers who pay
monthly fees to use the services online without having to build their own
systems 2) A monthly fee-generating structure that provides
a steady source of revenue for the company
Infomart’s business has
additional features: 1) Provision of a “one-stop” service lets users use the four systems described above to develop new accounts, engage in business negotiations and transactions, place and receive orders, and settle accounts
2) Leverage of groupware to share information between the company and existing customer accounts to increase business efficiency
Segments and major system offerings (as of December 2021)
Source: Shared Research based on company data
B2B Platform Food business
In the B2B Platform Food business, Infomart operates platforms that include B2B Platform Ordering and B2B Platform Standards Database for customers in the restaurant industry. The company also offers Ordering and Standards Database as a package called Safe & Secure Food and Ordering.
B2B Platform Ordering
The B2B Platform Ordering business offers an ordering management system for the restaurant industry that processes orders and invoices between sellers and buyers via the cloud. The company has been increasing its market share, partly thanks to the addition of new clients introduced by alliance partners and existing customers. It wants to create a platform that grows on its own accord without requiring sales expenses.
BtoB-PF Ordering
FY12/12
FY12/13
FY12/14
FY12/15
FY12/16
FY12/17
FY12/18
FY12/19
FY12/20
FY12/21
(JPYmn)
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Sales
2,353
2,631
2,945
3,358
3,730
4,127
4,573
-
-
-
YoY
13.6%
11.8%
11.9%
14.0%
11.1%
10.6%
10.8%
-
-
-
Gross profit
1,844
1,979
2,269
2,553
2,853
3,024
3,457
-
-
-
YoY
17.1%
7.3%
14.7%
12.5%
11.8%
6.0%
14.3%
-
-
-
Gross profit margin
78.4%
75.2%
77.1%
76.0%
76.5%
73.3%
75.6%
-
-
-
SG&A expenses
651
768
794
818
870
1,111
1,325
-
-
-
YoY
22.6%
18.0%
3.4%
3.0%
6.4%
27.7%
19.3%
-
-
-
SG&A ratio
27.7%
29.2%
27.0%
24.4%
23.3%
26.9%
29.0%
-
-
-
Operating profit
1,194
1,210
1,475
1,735
1,983
1,913
2,131
-
-
-
YoY
14.3%
1.4%
21.8%
17.6%
14.3%
-3.5%
11.4%
-
-
-
Operating profit margin
50.7%
46.0%
50.1%
51.7%
53.2%
46.4%
46.6%
-
-
-
Buyers (No. of companies)
1,082
1,265
1,458
1,706
2,026
2,356
2,690
3,064
3,185
3,439
Sellers (No. of companies)
21,842
24,046
26,356
28,240
29,895
31,939
34,095
36,196
37,932
40,120
Store count (buyers)
23,053
27,013
30,304
35,314
41,068
46,441
52,648
58,236
60,543
66,010
Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.
Note: The company has not disclosed FY12/19 sales and operating profit data due to a change in segmentation.
Ordering system: benefits to clients
The system cuts costs by improving the efficiency of, and digitizing, ordering procedures between buyers placing orders (such as head offices and stores), and those product sellers receiving orders. The system can systemize and organize information on the status of sales and product stock, plus handle store management and accounts payable/receivable in real time.
Seeks to expand outside the restaurant industry
The Ordering System was launched in 2003 and experienced rapid growth with the segment becoming Infomart’s core business. The majority of buyers are restaurant chains and izakaya (Japanese-style pubs), but meal catering services, ready-made meal companies, hotels, wedding halls, golf courses, and other similar establishments are using the system too. Initially, the platform’s focus was on catering to chain operators with at least 15 restaurants. Thereafter, Infomart extended service coverage to small restaurant chains with as few as five establishments, as many such chains aim to digitize and streamline their operations. From 2020, it has extended service to companies operating even just one restaurant and is seeking to expand sales to hotels, meal-catering companies, and commercial facilities. Business expansion in these areas is steadily progressing.
System becoming de-facto standard for food wholesalers
Sellers on the system are general and specialized commercial food wholesalers. The system is becoming a de-facto industry standard as user numbers increase. Of the estimated 7,600 restaurant chains with five or more stores in Japan, 3,439 companies were using Infomart’s B2B Platform Ordering as of end-December 2021 for a penetration rate of roughly 45%. Of approximately 73,000 restaurant-related wholesalers, 40,120 companies were using the B2B Platform Ordering service as of end-December 2021 for a penetration rate of about 55%. However, a survey sent by the company to food wholesalers in 2021 revealed that roughly 80% of orders are still being conducted via telephone or fax.
Examples of companies using B2B Platform Ordering (chains with over 101 outlets, as of May 2021)
Executive summary
Business
Infomart Corporation is a provider of online platforms for commercial transactions mainly to the food industry. It receives a monthly system usage fee from customers based on a fixed price or pay-per-use plan as well as a system set-up fee from new customers. The company has a stable earnings base, because monthly system usage fees account for around 95% of sales and churn rates are low. Whereas some upfront spending such as system development expenses arise before services are launched, the business model ensures high marginal profit rates after the service goes live. In FY12/21, sales were JPY9.8bn (+12.1% YoY), operating profit was JPY1.0bn (-30.0% YoY), and operating profit margin was 10.5% (16.8% in FY12/20). The company operates in two segments: B2B Platform Food and B2B Platform ES.
B2B Platform Food: Sales of JPY7.0bn (71.2% of total sales), operating profit of JPY2.2bn, and operating profit margin of 30.9%. In this segment, Infomart provides online platforms that connect restaurant operators (both restaurant chains and independent restaurants) with wholesalers. Key platforms include B2B Platform Ordering (an online platform that links restaurant companies with wholesalers, and wholesalers with food manufacturers) and B2B Platform Standards Database (a platform of manufacturers’ food standards for processed foods converted to a database for use by wholesalers and restaurant companies). B2B Platform Ordering must be adopted by buyers and sellers of food ingredients to function, and its convenience increases in tandem with growth in the user base (network effect). Excluding special circumstances such as discontinued operations, cancellations are rare because platform users risk losing suppliers or sales channels when they cancel their contract.
B2B Platform ES: Sales of JPY2.8bn (28.8% of total sales) and an operating loss of JPY1.1bn. In this segment, Infomart operates platforms to digitize invoices, contracts, and other documents for companies across all business industries. Key platforms include B2B Platform Invoicing (a platform for easy issue, receipt, and management of electronic invoices), B2B Platform Matching (a one-stop service for finding buyers and sellers, negotiating prices, price estimates, ordering, and payments), and B2B Platform Contract (a platform for conclusion, management, workflow, and internal authorization of contracts between companies in electronic form and controlled centrally online).
Growing user base: As of end-December 2021, B2B Platform users totaled 679,684 companies (+30.1% YoY) and 1,309,477 offices (+26.8% YoY). In FY12/21, the total transaction value for the company’s platforms reached JPY18.5tn (+45.3% YoY). As of end-December 2021, the core B2B Platform Ordering service facilitated orders between 3,439 buyer companies (restaurants, hotel chains, and other parties procuring food ingredients) (+8.0% YoY, penetration rate of roughly 45%), and 40,120 seller companies (manufacturers and wholesalers) (+5.8% YoY, penetration rate of roughly 55%). However, a survey sent by the company to food wholesalers in 2021 revealed that roughly 80% of orders are still conducted via telephone or fax. As of end-December 2021, B2B Platform Invoicing users totaled 670,528 companies (+30.7% YoY), and the service is also attracting users outside of the food industry. At the same time, B2B Platform Contract, a relatively new service launched in 2018, had signed up 27,296 users (number of companies logging in; +103.3% YoY).
Trends and outlook
In FY12/21, Infomart reported sales of JPY9.8bn (+12.1% YoY), operating profit of JPY1.0bn (-30.0% YoY), and net income attributable to owners of the parent of JPY539mn (-46.9% YoY). Sales in the B2B Platform Food segment were up 4.7% YoY, as new starts by buyer companies seeking to use cloud-based management systems for B2B Platform Ordering and B2B Platform Standards Database services increased, resulting in higher system usage fees from buyer companies. Sales in the B2B Platform ES segment were up 36.0% YoY, driven by an increase in the number of companies under paid contract for the company's B2B Platform Invoicing service. Operating profit declined due to an increase in personnel expenses and higher data center expenses stemming from an expansion of the company's server infrastructure and the implementation of disaster recovery measures.
The company's FY12/22 forecast calls for sales of JPY11.0bn (+11.7% YoY), operating profit of JPY100mn (-90.3% YoY), and net income attributable to owners of the parent of JPY43mn (-92.0% YoY). Infomart forecasts sales in the B2B Platform Food segment to rise 8.8% YoY. The company looks for an increase in system usage fees due to an expansion in the number of companies using the B2B Platform Ordering service, as more companies are adopting digital technology in the food industry. In the B2B Platform ES segment, the company expects sales to grow 18.8% YoY, aided by revisions to the Electronic Books Maintenance Act and the launch of a new invoice system. The company anticipates operating profit to drop 90.3% YoY on an increase in personnel expenses and higher data center expenses stemming from the expansion of the company's server infrastructure and the implementation of disaster recovery measures.
In February 2022, Infomart unveiled a medium-term business plan calling for FY12/26 sales of JPY20.0bn and operating profit of JPY5.0bn. The two pillars of the plan are "aggressive investment to fuel growth" and "accelerated diversification of earnings sources." The plan looks for overall sales to expand at a CAGR of 16% in the five years through FY12/26, breaking down into CAGRs of 8% for the B2B Platform Food segment (B2B Platform Ordering 5%, B2B Platform Ordering Light 10%) and 30% for the B2B Platform ES segment (B2B Platform Invoicing 35%).
Strengths and weaknesses
Shared Research sees the company’s strengths as market dominance, a robust earnings structure supported by monthly usage fees, and solid financials. We think its weaknesses are small size, cost of launching new services, and yet to become an industry standard. (See the Strengths and weaknesses section for details.)
Key financial data
Note: Figures may differ from company data due to differences in rounding methods.
Note: The company carried out 2-for-1 stock splits on January 1, 2014 (effective date), on January 1, 2015 (effective date), on January 1, 2017 (effective date), and on January 1, 2020 (effective date). Per share data above is adjusted for the stock splits.
Trends and outlook
Quarterly trends and results
Note: Figures may differ from company data due to differences in rounding methods.
Note: Figures may differ from company data due to differences in rounding methods.
Note: Figures may differ from company data due to differences in rounding methods.
Q1 FY12/22 results (out April 28, 2022)
Overview
Results summary
Progress rate
Q1 progress versus the 1H FY12/22 company forecast was 49.0% for sales (49.0% of 1H FY12/21 results in Q1 FY12/21), 524.9% for operating profit (54.3%), 3,395.4% for recurring profit (55.2%), and 344.8% for net income attributable to owners of the parent (61.8%).
Against the full-year forecast, Q1 progress was 23.3% for sales (23.4% of FY12/21 results in Q1 FY12/21), 183.7% for operating profit (37.2%), 414.4% for recurring profit (39.3%), and 256.6% for net income attributable to owners of the parent (53.0%).
Sales
Sales were up 11.4% YoY to JPY2.6bn. In the B2B Platform Food segment, sales rose 9.0% YoY. Among users of the B2B Platform Ordering and B2B Platform Standards Database services, new starts by buyer companies seeking to use cloud-based management systems increased. As a result, system usage fees from buyer companies grew.
In the B2B Platform ES segment, sales grew 17.3% YoY. System usage fees rose, driven by the spread of teleworking and heightened interest in operational efficiency and adoption of digital technology among users of the B2B Platform Invoicing service.
As of end-Q1 FY12/22, B2B Platform users totaled 716,260 companies (+26.4% YoY) and 1,381,740 offices (+25.5% YoY).
Costs and profits
Operating profit fell 52.1% YoY to JPY184mn. Sales growth of JPY149mn in B2B Platform Food and JPY111mn in B2B Platform ES was absorbed by higher expenditures. Expense increases included data center costs (+JPY323mn) stemming from the expansion of the company’s server infrastructure to accommodate increased usage and the implementation of disaster recovery measures. Higher promotion expenses (+JPY40mn) and personnel expenses owing to the hiring of more sales and sales support staff (+JPY13mn) also weighed down the operating profit.
Segment results
B2B Platform Food segment
Sales: JPY1.8bn (+9.0% YoY)
Operating profit: JPY490mn (-19.1% YoY)
Sales rose 9.0% YoY to JPY1.8bn. In the B2B Platform Ordering service, system usage fees from buyer companies rose in line with an increase in new customer count among operators seeking to introduce cloud-based management systems. These included operators of izakaya (Japanese-style pubs), restaurants, hotels, meal services, and new services such as takeout and delivery. Seller companies benefited from the easing of restrictions associated with the COVID-19 pandemic. Transaction volumes of food materials and other goods rose, and system usage fees from seller companies (charged on a pay-per-use basis) improved YoY. Users of the B2B Platform Standards Database service grew, and system usage fees were up YoY.
The combined number of buyer and seller companies using the platform’s two services increased, with users of the B2B Platform Ordering service up 6.0% YoY to 44,082 companies and users of the B2B Platform Standards Database service rising 5.3% YoY to 10,973 companies.
Operating profit fell 19.1% YoY to JPY490mn.
B2B Platform ES segment
Sales: JPY754mn (+17.3% YoY)
Operating loss: JPY310mn (operating loss of JPY221mn in Q1 FY12/21)
Sales expanded 17.3% YoY to JPY754mn. In the B2B Platform Invoicing service, operational efficiencies, progress in digital transformation, and spread of teleworking led to an increase in new companies under paid contract, both on the receiving and issuing end of invoicing. New customers were not limited to the food industry but covered a wide range of industries. In addition, system usage fees rose as utilization (shift to electronic invoicing) steadily progressed.
The number of companies using the B2B Platform Invoicing service (those that log into the system) increased 27.0% YoY to 707,168 companies. Of this number, 4,435 (+21.8% YoY) were companies that have signed a paid contract on the receiving end, and 2,536 (+32.7% YoY) were those that have signed a paid contract on the issuing end.
The operating loss came to JPY310mn. This primarily reflected an increase in personnel expenses owing to the hiring of sales staff needed to expand the B2B Platform Invoicing service. Promotion expenses rose as well, as the company stepped up marketing initiatives.
FY12/22 company forecast
Note: Figures may differ from company data due to differences in rounding methods.
Overview
Initiatives: Infomart expects sales to decline in FY12/22, but it has positioned the year as a period of investment to accelerate sales growth over the medium term. Specifically, it plans to strengthen its server infrastructure in line with user growth to ensure reliable services. It also looks to invest in development and sales promotion to launch new services and refocus on existing fields.
Sales: The company forecasts sales in the B2B Platform Food segment to rise 8.8% YoY. The COVID-19 pandemic spurred the need for increasingly sophisticated management in the food industry through the adoption of digital technology. The company aims to properly respond to this demand and increase revenue from system usage fees by growing the number of companies using the B2B Platform Ordering service. The company also expects an increase in sales from seller companies using the B2B Platform Ordering service that are charged on a pay-per-use basis (charges are based on food transaction volume). In the B2B Platform ES segment, Infomart expects sales to grow 18.8% YoY. The company looks for sustained strong growth in the B2B Platform Invoicing service as companies are increasingly adopting digital technology in their operations, driven by greater use of teleworking, revisions to the Electronic Books Maintenance Act, and the upcoming launch of a new qualified invoice system in 2023.
Operating profit: The company forecasts a 53.2% YoY increase in data center costs as it will incur expenses related to the disaster recovery measures launched in July 2021 over the full year. It sees the increase in data center costs easing from FY12/23. The company also projects a 22.2% YoY increase in software amortization as a result of ongoing investment in software development. It looks for a 7.9% YoY increase in personnel expenses driven mainly by growth in sales staff. As a result of these expenditures, the company forecasts operating profit to drop 90.3% YoY to JPY100mn.
By segment
B2B Platform Food segment
The company forecasts sales of JPY7.6bn (+8.8% YoY). It plans to promote the digitization of transactions between restaurant operators and wholesalers in an effort to meet the needs of restaurant chains, outlets, and wholesalers. Specifically, it looks to increase the number of companies using the B2B Platform Ordering service, and expand related system usage fees. In addition, it forecasts an increase in sales from seller companies using the B2B Platform Ordering service that are charged on a pay-per-use basis (charges are based on food transaction volume).
B2B Platform ES segment
The company forecasts sales of JPY3.4bn (+18.8% YoY). It looks for sustained strong growth in the B2B Platform Invoicing service driven by digital transformation (DX) amid growing adoption of telework, revisions to the Electronic Books Maintenance Act, and the launch of a new invoice system in 2023.
Outlook
Medium-term business plan
In February 2022, Infomart unveiled a new medium-term business plan calling for FY12/26 sales of JPY20.0bn and operating profit of JPY5.0bn. The two pillars of the plan are "aggressive investment to fuel growth" and "accelerated diversification of earnings sources."
Aggressive investment to fuel growth
The company will pursue collaborations with other companies and business acquisitions, and work to expand and solidify the value of its B2B platforms in the B2B Platform Food and B2B Platform ES segments. In the B2B Platform Invoicing service of the B2B Platform ES segment, the company intends to capture digital transformation (DX) needs driven by the new invoice system slated to be rolled out in October 2023. It will also aim to secure a favorable competitive position through aggressive investment in sales promotion to increase the number of companies that use its services, as well as in system development and personnel expansion.
Under the new invoice system, taxable business operators will be required to issue qualified invoices. Sellers in a transaction will need to provide such invoices if so requested by buyers, and buyers will in principle need to preserve the invoices received from sellers. Companies that still use an accounting system that does not support the new invoice system will need to either upgrade their existing system or adopt a new system.
Accelerated diversification of earnings sources
To diversify its earnings sources, the company will accelerate existing and new initiatives, jointly create new business models underpinned by a massive corporate member base with partners, and aim to make its services de-facto standard in various fields.
Numerical targets
As numerical targets, the plan calls for FY12/26 sales of JPY20.0bn and operating profit of JPY5.0bn. It looks for overall sales to grow at a CAGR of 16% in the five years through FY12/26, breaking down into CAGRs of 8% for the B2B Platform Food business (B2B Platform Ordering 5%, B2B Platform Ordering Light 10%) and 30% for the B2B Platform ES business (B2B Platform Invoicing 35%).
Business
Company overview
Infomart provides platforms for commercial transactions mainly to the food industry, receiving a monthly system usage fee from customers based on a fixed price or pay-per-use plan as well as a system set-up fee from new customers. The company has a stable earnings base, because monthly system usage fees account for around 95% of sales and churn rates are low.
In FY12/21, sales were JPY9.8bn and operating profit was JPY1.0bn. The company operates in two segments: B2B Platform Food (71.2% of sales in FY12/21) and B2B Platform ES (28.8%). The B2B platforms offered in each segment are as follows.
Infomart was founded in 1998, listed on TSE Mothers in 2006, and had a listing change to TSE1 in 2015. The company had 613 employees (506 full-time and 107 part-time) at end-December 2021.
Business model
Provider of B2B platforms
Infomart provides platforms that digitize ordering and invoicing operations via the cloud. Its revenue model centers on monthly fees received for providing companies with services to improve the efficiency of B2B transactions. While the business requires substantial upfront software development costs, booked as intangible fixed assets on the balance sheet and then amortized, it offers a high marginal profit rate, because cost of sales is unlikely to increase once the service is launched. Infomart offers seven platforms, including Ordering, Standards Database, Invoicing, Matching, and Contract. Penetration rates are high in the food industry for B2B Ordering and Standards Database platforms, which are targeted at food industry*, and these platforms are becoming industry standards.
Cloud service, recurring revenue model
The B2B e-commerce platform’s features:
1) Cloud service offering online solutions for daily business transactions—since the system is intended to be general purpose, there is no need to customize it for individual customers who pay monthly fees to use the services online without having to build their own systems
2) A monthly fee-generating structure that provides a steady source of revenue for the company
Infomart’s business has additional features:
1) Provision of a “one-stop” service lets users use the four systems described above to develop new accounts, engage in business negotiations and transactions, place and receive orders, and settle accounts
2) Leverage of groupware to share information between the company and existing customer accounts to increase business efficiency
B2B Platform Food business
In the B2B Platform Food business, Infomart operates platforms that include B2B Platform Ordering and B2B Platform Standards Database for customers in the restaurant industry. The company also offers Ordering and Standards Database as a package called Safe & Secure Food and Ordering.
B2B Platform Ordering
The B2B Platform Ordering business offers an ordering management system for the restaurant industry that processes orders and invoices between sellers and buyers via the cloud. The company has been increasing its market share, partly thanks to the addition of new clients introduced by alliance partners and existing customers. It wants to create a platform that grows on its own accord without requiring sales expenses.
Note: Figures may differ from company data due to differences in rounding methods.
Note: The company has not disclosed FY12/19 sales and operating profit data due to a change in segmentation.
Ordering system: benefits to clients
The system cuts costs by improving the efficiency of, and digitizing, ordering procedures between buyers placing orders (such as head offices and stores), and those product sellers receiving orders. The system can systemize and organize information on the status of sales and product stock, plus handle store management and accounts payable/receivable in real time.
Seeks to expand outside the restaurant industry
The Ordering System was launched in 2003 and experienced rapid growth with the segment becoming Infomart’s core business. The majority of buyers are restaurant chains and izakaya (Japanese-style pubs), but meal catering services, ready-made meal companies, hotels, wedding halls, golf courses, and other similar establishments are using the system too. Initially, the platform’s focus was on catering to chain operators with at least 15 restaurants. Thereafter, Infomart extended service coverage to small restaurant chains with as few as five establishments, as many such chains aim to digitize and streamline their operations. From 2020, it has extended service to companies operating even just one restaurant and is seeking to expand sales to hotels, meal-catering companies, and commercial facilities. Business expansion in these areas is steadily progressing.
System becoming de-facto standard for food wholesalers
Sellers on the system are general and specialized commercial food wholesalers. The system is becoming a de-facto industry standard as user numbers increase. Of the estimated 7,600 restaurant chains with five or more stores in Japan, 3,439 companies were using Infomart’s B2B Platform Ordering as of end-December 2021 for a penetration rate of roughly 45%. Of approximately 73,000 restaurant-related wholesalers, 40,120 companies were using the B2B Platform Ordering service as of end-December 2021 for a penetration rate of about 55%. However, a survey sent by the company to food wholesalers in 2021 revealed that roughly 80% of orders are still being conducted via telephone or fax.