Company Outline - Enigmo

Company Outline

02(C)2014 ENIGMO,INC. All rights reserved.

Company Name Enigmo Inc.

Established February 10, 2004

Business Description Operating “BUYMA.com” The Largest Social e-Commerce Website in Japan

Number of Employees 44

Major Shareholders Executive Officers So-net Corporation (Affiliate company of SONY Corporation)

Audit Firm Ernst & Young ShinNihon LLC

HIGHLIGHTS in FY2014

BUYMAAchieved increase in Revenue and ProfitTrading Volume　 ¥16,100 MillionRevenue 　　 ¥1,800 MillionOperating Profit ¥850 Million

Steady Growth in MembershipMembership 1.69 Million Buyer 55 Thousand in more than 100 countries

BUYMA - GlobalEnglish Version of “BUYMA” - AVENUE・K Launched Beta Version in Jul. Launched to the public in Dec.


STULIO - Resale Market

Resale Application - Pivot Launch in Oct. ’13

Korean Version of “BUYMA” ‒ BUYMA KoreaLaunched Bata Version in Dec.

　 FY2014 FY2013 %YoY FY2014Forecast

　Transaction　Volume 16,057 12,843 125.0% 17,063

　Revenue 1,823 1,439 126.7% 1,900

　Operating profit 852 597 142.5% 827

　Ordinary profit 855 592 144.5% 827

　Net profit 523 377 138.8% 509

Corporate Earnings


Almost achieved the forecast(Unit：¥MM)

Revenue

(Unit：¥MM)

0

250

500

750

1,000

1,250

1,500

1,750

2,000

656

920851

1,439

Jan.2010

Jan.2011

Jan.2012

Jan.2013

1,823

BUYMAAdvertisingBusiness

336

304

281

636804

47

Oct.2013


YoY126.7%Steadily Increasing

Selling General & Administrative Expenses

YoY 114.8% Efficiently Managed

　 FY2014 FY2013 %YoY

Personal Expenses 319 332 104.0%

　Advertisement 87 117 133.2%

　Depreciation cost 11 9 83.7%

　Other 112 151 134.2%

　Total 532 610 114.8%


(Unit：¥MM)

Operating Profit, OPM

(Unit：¥MM)

△131

85

205

597

50%

40%

30%

20%

10%

0%

-20%

1,000

800

600

400

200

0

-200

△20.0%

9.3%

24.1%

41.5%

Jan.2010

Jan,2011

Jan.2012

Jan,2013

OPM

46.7%

852

Jan.2014


Operating Profit : YoY 142.5% Profit Margin: 46.7% : keeping steady increase

Business OverView of BUYMA



What’s BUYMA.com

C2C fashion e-commerce platform

Registered Membership 1,693,994人

Newly Exhibited Items

More than 7,000items/day

Registered Buyers 55,000

CountriesBuyers reside over

107countries

Registered Members

(Unit：Person)

0

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

463,866

614,834

819,886

Jan.2010

Jan.2011

Jan.2012

Jan.2013

1,190,574

Jan.2014

1,693,994

Increased in the Pace of Membership Acquisition


※1 Cumulative Membership as of Oct 31,2012※2 Cumulative Membership as of Oct 31,2013

(Unit：Person)

0

100,000

200,000

300,000

400,000

500,000

105,114125,568

174,797

281,104

304,816

Jan.2010

Jan.2011

Jan.2012

Jan.2013

449,620

Active Member : Members who bought items at BUYMA within 1 year

Jan.2014


Active Members

(Unit：¥MM)

0

3,000

6,000

9,000

12,000

15,000

18,000

3,722

4,952

7,555

Jan.2010

Jan.2011

Jan.2012

Jan.2013

12,843

16,057

Jan.2014


YoY 125%

Transaction Volume


(Unit ：Case)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

240,613292,283

402,758

Jan.2010

Jan.2011

Jan.2012

Jan.2013

693,099

1,004,528

Jan.2014

Exceeded 1 Million (YoY 145%)

Number of Transactions

(Unit：Yen)

0

10,000

20,000

30,000

40,000

50,000

35,409

39,439

43,22442,136

Jan.2010

Jan.2011

Jan.2012

Jan.2013

35,713

Jan.2014


ARPU

ARPU-> Annual Amount of Purchase per Active Member(annual trade volume)/(Active Membership)


Factor Analysis

External environment

Rapiddepreciation

of JPY

Price IncreaseBuyers priced

in furtherprogress of“weak JPY”

Average Price Increase

× ・Release of Smartphone Application・Expansion of items for younger generation・Increase attractive items not influenced by exchange rate・Increase efficiency of bulk purchase・Enforce “BUYER POST” for closer communication

Improvement of ARPURisk diversification by globalization

(currently, recovering due to theprice increase in Japan)

Events occurred in FY2014 Result

Sense of expensive especially

luxury items*

Steady sales oflow-price items

decline of ARPU

Countermeasures

Raise Frequency・Enforcement of compensation program・Expansion of Hot/Rare items・Revitalization of premium buyers・Expansion of luxury items competitive in price

Countermeasures for depreciation of JPY and ARPU

For Accomplishment of Medium Term Business Plan



Social Commerce No.1・e-Commerce is the market for an extraordinary growth

prospect

・Establish a unique position in the e-commerce market by providing our own values in regard to social networking

CORPORATE VISION


New

Aiming to achieve ¥100 billion of transaction in Japan and ¥x0 billion in overseas in 5 years

Existing

Existing New

Category Expansion

Services

Customers

Resale

KoreaAVENUE・KGlobal Expansion

Medium Term Target


Boost Convenience

INNOVATOR2.5％

EARLY ADOPTER13.5％

EARLY MAJORITY34.0％

LATE MAJORITY34.0％

CORE PRODUCT WHOLE PRODUCT

BUYMA is required to be a “WHOLE PRODUCT” and raise awareness for acquiring wider range of CUSTOMERS

Whole Product：

A whole product is a generic product augmented by everything that is needed for the customer to have a compelling reason to buy.(With regard to BUYMA, the reason to use the service.) The core product is the tangible product that the customer experiences. The whole product typically augments the core product with additional elements required for the product to have compelling value to a customer.

KoreaAVENUE・K

RaiseAwareness

Medium Term Target

Current Customers


Proceed multifaceted expansion for higher awareness

・Proceed active SEM operation with an awareness of ROI・Strengthen alliance・Utilize iPhone application for further awareness・Increase targeting advertisement / sales promotion

Alliance iPhone App.

TV

Radio

publication

Targeting Ad./SP

KoreaAVENUE・K

budget is doubled in FY2015

Raise Awareness

Launched in 27th Feb.hovers ¥100 MM/month level

Sony Mobile Communication

http://ejje.weblio.jp/content/publication

http://ejje.weblio.jp/content/publication


Buyers

Market Trend

Market TrendResearch

+

KoreaAVENUE・K

For the web site with large selections users really want to buy

・34,000 brand names / 3 million items as of now・Enforce market research function for deeper trend information・Enforce Buyer finding/communication function・Expand selections by enhancement of “BUYER POST”

BUYMADate

Individual NeedsBUYER POST

Purchasers

Product Line Enforcement


AuthenticityGuarantee

ANSHIN (relief) Compensation Program

KoreaAVENUE・KFor the most reliable place to buy

・Added “Initial Failure Compensation” to “ANSHIN (relief) 　　Compensation Program” ・Eliminated Upper Limit for “Lost Package Compensation”・Modified optional fee structure (1.05%→1.4%)・Effective in acquiring new customers・Proceed further improvement for user-safety

SEARCHHESITATE PURCHASE DELIVER REVISIT

Lost PackageCompensation

Initial FailureCompensation

Enforcement of Compensation System


KoreaAVENUE・KResale × SNS Application

“STULIO” launched in Oct. ‘13

Resale × SNS Application “STULIO”, targeting teenager and F1 (20 to 35 female) users.Participation of numbers of celebrities (e.g. fashion models, artists, entertainers) results in the increase of awareness and successful enclosure of hi-end users.

STULIO


KoreaAVENUE・KDeveloped US and Korean

version of BUYMA

US version “AVENUE・K”Jul., ‘13 Launched Beta VersionOct., ’13 Opened to the public

Korean version “BUYMA Korea”Dec., ‘13 Launched Beta VersionMar., ‘14 Set to open to the public

Global BUYMA : “AVENUE・K” and “BUYMA Korea”

Name of Service BUYMA

※1　　 37.2%

United States (Los Angels)

Image Network,Inc.

24 / 12 / 2012

Avenue K

% of share

Nation (City)

Company Name

Date of Investment

Name of Service

※1US$1,200,000 in Preferred StockUS$201,574 in Senior Stock


Shareholding Structure

※2 14.53% (88.24%)

Republic of Korea (Seoul)

Enigmo Korea

13 / 6 / 2013

BUYMA Korea

% of share

Nation (City)

Company Name

Date of Investment

Name of Service

※2KRW 1,200,000 in Common StockKRW 733,000,000 in Convertible Bond(convertible into Common Stock)

※3 14.00% (98.84%)

Japan (Tokyo)

STULIO, Inc.

19 / 7 / 2013

STULIO

% of share

Nation (City)

Company Name

Date of Investment

Name of Service

※314% in Common Stock¥50,000,000 in Preferred Stock(convertible into Common Stock)

e-Book global distribution platform utilizing Crowd Sourcing to translate the world-wide books

①Data Registration

⑧Royalty Payment

②Registration③Translator Selection

④Translated Data⑤Translation Check

⑦Purchase&Review

⑥Distribution

⑧Royalty Payment

・English・Japanese・Other languages




KoreaAVENUE・K

New Business : BUYMA Books

“BUYMA Books” to be launchedin April 2014

Forecast of FY2015



Global OperationsNew Business

FY2014 FY2015

Orientation of FY2015

・Fulfillment of　Operating Staff

・Increase　Organizational　Power

・Entrenchment of the　operation

・Capture the Achievements・Take Actions for Further　growth

・Strategic Investment to　achieve medium term　term business plan

・Identify Business 　　Field to penetrate・Commercialization　of each business

・Monetization

・Strategy Assessment

　 FY2015Forecast

FY2014 %YoY

Transaction Volume 20,518 16,057 127.8%

　Revenue 2,379 1,823 130.5%

　Operating profit 1,000 852 117.4%

　Ordinary profit 1,000 855 116.9%

　Net profit 616 523 117.8%

Earnings per share 150.90 129.71 -

Dividend Per Share - - -


Earnings ForecastTrading Volume: ¥20.5 BillionAdvertisement Costs: strategically increased aiming to raise awareness for the achievement of Medium Term Business Plan

(Unit：¥MM)


Operating Profit (Unit : ¥ MM)

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

¥5,000 MM

336

281

CAGR 43.32%

Jan.2010 Jan.2011 Jan.2012 Jan.2013 Jan.2014 Jan.2015 Jan.2016 Jan.2017 Jan.2018 Jan.2019

Medium Term Profit Plan

¥3,000 MM

¥827 MM ¥1,000 MM

This material is prepared to gain the understanding of the investors by Enigmo Inc. 　This material is based on the generally accepted social and economic conditions ,and on the presupposition that we consider its rational as of February 19,2014. But it is subject to change without notice for the change of the situation.　

Please read through our prospectus and make investment based on investors` own judgements.

The forward-looking statements are included in these materials and information we announced.These are based on forecast involving risks , and contain the uncertainty of the outcome.The general conditions of industry and market ,interest rate and change in foreign exchange rates are included in these risks or uncertainty.

We will not assume an obligation to update of the forward-looking statements , even if there are events or new information in the future.



Company Outline - Enigmo

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