Litalico Inc. · TSE:7366
Litalico — Q2 2022 Earnings Presentation
41 slides from Litalico's earnings presentation, October 2022
Slide 1: FY 2022 Q2 Earnings Presentation
October 2022 FY 2022 Q2 Earnings Presentation LITALICO Inc. [ TSE Code: 7366 ] 1
Slide 2: Disclaimer
DISCLAIMER The information, future strategies, forecasts, management targets, and other forward- looking projections relating to LITALICO Inc. (“the Company”) is based on information available to the Company as of the date hereof, and is based on reasonable assumptions that may include various risks
Slide 3: Business Strategy
Business Strategy LITALICO AA AAAKA A KA AK AAA ©2022 LITALICO Ine. YmRuUC
Slide 4: LITALICO Philosophy & Vision
LITALICO Philosophy & Vision The name “LITALICO” is a combination of two Japanese words: ”利他/Lita” (altruism) and “利己/Lico” (individualism). We aim to create an inclusive world where both are achieved interdependently. Creating an Obstacle-free Society Obstacles are created by and within a society,
Slide 5: Business Environment
STRATEGY Business Environment Number of Welfare Service Users and Provider Facilities # of people # of facilities (thousand) Welfare Service Facilities Welfare Service Users Disability welfare service users and providers continue to increase, reflecting a mounting social need 5
Slide 6: LITALICO's Total Solution in the Disability Arena
STRATEGY LITALICO’s Total Solution in the Disability Arena • BtoC: Provision and expansion of proprietary high quality services • BtoB: Commercialization and dissemination of proprietary services across entire industry • Competitive advantage within the disability welfare industry through support an
Slide 7: Parent and Group Companies
STRUCTURE Parent and Group Companies • Platform and general education businesses are held within the parent company, while publicly funded businesses are held within group companies LITALICO Inc. Parent Company LITALICO Partners Inc. LITALICO Life Inc. Other Group Companies Group Companies 7
Slide 8: Consolidated Financial Results
Consolidated Financial Results 8
Slide 9: FY2022 H1 Consolidated and Segment Overview
RESULTS FY2022 H1 Consolidated and Segment Overview CONSOLIDATED • 11.4 bln yen in sales (+21% YoY), 1.35 bln yen in operating profit (+36% YoY) • Tracking healthy progress versus company annual forecast LITALICO • 7 new site launches increased total to 113 sites • Customer attraction remained healt
Slide 10: Consolidated P&L
RESULTS Consolidated P&L • Profit increase even with aggressive investments • Temporary COVID induced decrease of approx. 90 million yen in sales and profits for Q2 (million yen) FY2022 H1 FY2021 H1 % YoY Sales 11,405 9,455 + 20.6% Operating Profit 1,348 990 + 36.2% Ordinary Profit 1,219 865 + 41.0%
Slide 11: FY2022 Q1 vs Q2 Operating Profit Breakdown
RESULTS FY2022 Q1 vs Q2 Operating Profit Breakdown • Investment for future growth continued despite negative COVID impact • Growth remained on track with annual forecast (million yen) - mln yen Business profit COVID impact increase Hiring and business (ex COVID impact) expansion overhead costs (Apr-
Slide 12: Segment Income Statement
RESULTS Segment Income Statement • Sales and profit increased across all segments • Platform business profits increased approximately 9x YoY (million yen) FY2022 H1 FY2021 H1 % YoY Sales 4,683 4,198 + 11.5% LITALICO Works Profit 1,723 1,653 + 4.3% Sales 3,737 3,188 + 17.2% LITALICO Junior Profit 624
Slide 13: Absorption Merger with Fukushi-soft
RESULTS Absorption Merger with Fukushi-soft • Business integration has progressed smoothly since the consolidation of Fukushi-soft in Feb 2021 • Fukushi-soft will be absorbed as of Jan 1, 2023 Up to Dec 31, 2022 From Jan 1, 2023 Increased team integration for further platform business expansion 13
Slide 14: Financial Forecasts
Financial Forecasts LITALICO AA AAAKA A KA KA YmRuUC AAA ©2022 LITALICO Inc. 14
Slide 15: Consolidated Annual Forecast
FORECAST Consolidated Annual Forecast • Profitability to increase along with continued aggressive investments in platform business • Fukushi-soft pricing changes and PlusOne Solutions acquisition impacted 800 million yen in sales increase • Expansion accelerating with 14 LITALICO Works and 15 LITALI
Slide 16: Financial Summary
FORECAST Financial Summary • Planning for ten consecutive years of sales and profit increase Sales Operation Profit (million yen) (million yen) Others LITALICO Platform New LITALICO Junior Former LITALICO Junior LITALICO Works 16
Slide 17: Business Results
Business Results LITALICO AA AAARKA A AKA KA YmRuUC AAA ©2022 LITALICO Inc. 17
Slide 18: LITALICO Segments and Business Units
SEGMENT LITALICO Segments and Business Units 18
Slide 19: LITALICO Works (Welfare)
SEGMENT LITALICO Works (Welfare) 19
Slide 20: LITALICO Works (Vocational Rehabilitation Welfare)
RESULTS LITALICO Works (Vocational Rehabilitation Welfare) • 113 facilities (+7 sites vs PFYend) • 14 total launches planned for FY2022 • Internal structural fortification planned to support expansion pace Vocational rehabilitation for individuals with disabilities LITALICO Works Sales FY22 LITALICO
Slide 21: LITALICO Works
RESULTS LITALICO Works • 12,836 cumulative placements, achieved 91.3% 6 months retention rate • Annual job placements largely increased to 956 service users (+20.1% YoY) • Continued technology utility such as VR and automated support systems Vocational rehabilitation for individuals with disabilitie
Slide 22: LITALICO Junior (Welfare)
SEGMENT LITALICO Junior (Welfare) 22
Slide 23: LITALICO Junior (Welfare)
RESULTS LITALICO Junior (Welfare) • 125 facilities (+12 sites vs PFYend) • Sales and profits increase due to healthy pace of facility launches • 15 total launches planned for FY2022, Children’s social skills development with expected increase in pace and education classes LITALICO Junior Sales FY22
Slide 24: LITALICO Platform
SEGMENT LITALICO Platform 24
Slide 25: LITALICO Platform: Sales +81% YoY
RESULTS LITALICO Platform SALES • Sales +81% YoY • Sales and profit increased while hiring sales and engineer staff; entering growth phase • Launched a matching media platform for service users and social workers, and a SaaS DX support business for institutions FCT Information Service User Provision
Slide 26: LITALICO Platform: Steady increase in service contracts
RESULTS LITALICO Platform • Steady increase in service contracts • Fukushi-soft users remain steady with low drop-off since pricing changes • Further fortification of nursing care SaaS business through consolidation of PlusOne Solutions LITALICO Platform Business Subscription Contracts Service Provi
Slide 27: Current Product Line-up and Forward Strategy
RESULTS Current Product Line-up and Forward Strategy • Current line-up services disability welfare facilities, schools & nurseries, and nursing care fields • Service pricing increased in Apr 2022 in line with functional product upgrades • Sequential expansion of product offerings with higher value-a
Slide 28: Internal Fortification for Platform Business Growth
RESULTS Internal Fortification for Platform Business Growth • Large scale development capacity fortification through hiring of engineers, PdMs, and designers, in bolstering accelerated growth of the Platform business • Creating an organizational structure that maximize LITALICO’s strength in talent
Slide 29: Others
SEGMENT Others LITALICO LITALICO Works Segment =s LITALICO Works Weltare) LITALICO LITALICO Junior Segment =P LITALICO Junior Weltare) LITALICO LITALICO LITALICO u . LITALICO Platform Segment ase ease BH m7» UTALICO UTALICO LITALICO Career fukushi-soft Inc. Development Navi Work Navi io LITALICO LIT
Slide 30: Others: LITALICO Junior (Private), Wonder, Life
RESULTS Others LITALICO Junior (Private), LITALICO Wonder, LITALICO Life • Sales +19.0% YoY • Services in Others segment offers a line-up of 100% self-paid services that are unhindered by welfare structures LITALICO Junior (Private) Sales Trend Development classes designed for children (million yen)
Slide 31: LITALICO Junior (Private)
RESULTS LITALICO Junior (Private) • A short-term intensive service model (out-of-pocket) • Current focus on hiring, staff education, and structural fortification for further Children’s social skills development site expansion and education classes LITALICO Junior Private Course Features Sales Trend
Slide 32: LITALICO Wonder
RESULTS LITALICO Wonder • Total 19 sites with 4,579 students • Increased capacity from new site launches • Prices raised for new clients joining Children’s creativity enhancement post Apr 2022 classes through IT and crafting LITALICO Wonder Online Course Features Number of Students • 2 course types:
Slide 33: LITALICO Life
RESULTS LITALICO Life • Healthy increase in cumulative number of households utilizing services • Launched nationwide study groups with specific themes Insurance and individual life planning consulting Service Area Expansion Number of Household Service Users (Cumulative) • Expert led study groups acr
Slide 34: Reference
Reference LITALICO AA AAAKRA A AKA KA AAA ©2022 LITALICO Ine. YmRuUC
Slide 35: Number of Service Provision Facilities
REFERENCE Number of Service Provision Facilities • Total 293 sites planned for FY2022 LITALICO Wonder LITALICO Junior (Private) LITALICO Junior (Welfare) LITALICO Works FCT 35
Slide 36: LITALICO Business Environment (1)
REFERENCE LITALICO Business Environment (1) • Number of individuals with disabilities continue to increase, with more children attending special needs classes in addition to normal school Children with Developmental Disorders Number of All Individuals with Disabilities Receiving Special Needs School
Slide 37: LITALICO Business Environment (2)
REFERENCE LITALICO Business Environment (2) • Rising employment of individuals with disabilities; legally mandated employment rate is 2.3% Employment of Individuals with Disabilities Legally Mandated Employment Rate 6.8x increase over past 10 yrs Legally mandated employment in employment of psycholo
Slide 38: LITALICO Business Environment (3)
REFERENCE LITALICO Business Environment (3) • Welfare services and peripheral industry (medical, nursing care, etc.) markets continues to rise Disability Welfare Service Budget Disability Welfare Service Users and Offices Welfare service budget continues to rise Welfare facilities also increasing wi
Slide 39: Publicly Funded Businesses
REFERENCE Publicly Funded Businesses LITALICO Works Pricing Employment Per person; 20 person limit Transition Support 1st Yr: ¥8,100 /session Government Up to 6 mths into 2nd Yr: ¥8,100~9,400 /session employment 3rd Yr: ¥11,000 /session Reimbursement: Public Health Administration 90% Employment Per
Slide 40: Reimbursement Points Table
REFERENCE Reimbursement Points Table • Points are revised every three years; most recent update occurred in Apr 2022 Employment Transition Support Employment Retention Support Reimbursement Points per Session Reimbursement Points per Session Based on 6 month retention of employment across the Based
Slide 41: LITALICO Annual Fact Sheet
REFERENCE LITALICO Annual Fact Sheet LITALICO Works Assisted LITALICO Number of LITALICO Ratio of Female Employment Placements Employees by Segment Employees • As of Sep 2022 end: 956 • LITALICO Works: 1,014 • Firm-wide: 65.2% • Historical cumulative: 12,836 • LITALICO Junior: 1,453 • Middle and Upp