Slide 1: Financial Results Briefing Material Q3 FY2023
3rd Quarter of Fiscal Year Ending March 2023 (FY2023) Financial Results Briefing Material Confidence Inc. Securities code: 7374
Slide 2: Table of Contents
Table of Contents 01 02 03 P.3 P. 6 P. 9 Executive Summary Company Consolidated Overview Financial Results and Segment Results 04 P.19 05 P. 23 Appendix. P. 25 Progress in Growth Shareholder Business Plan and Growth Potential Announced on June 23, 2022 Strategies/ Returns Business Topics Copyright©
Slide 3: Executive Summary
01 Executive Summary Copyright© Confidence Inc. All Rights Reserved. | 3
Slide 4: Financial Highlights of Q3 FY2023 (Cumulative)
Financial Highlights of Q3 FY2023 (Cumulative) Revenue grew 19.0% year on year, with the number of creator staffing assignments increasing by 76 people from the end of the previous fiscal year Operating profit increased by 31.3% year on year due to enhanced productivity, etc. ➡ Made upward revis
Slide 5: Q3 FY2023 Performance Trends (Cumulative)
Q3 FY2023 Performance Trends (Cumulative) Strong progress made in Q3 (cumulative) as well ➡ [Progress rate] Revenue: 74.3% (74.0% a year earlier) / operating profit: 87.3% (78.5% a year earlier) In light of the progress achieved through Q3, made upward revision to full-year forecast of operating
Slide 6: Company Overview
02 Company Overview Copyright© Confidence Inc. All Rights Reserved. | 6
Slide 7: Company Profile
Company Profile Vision Company name Confidence Inc. Nobuyuki Takushi, President Joined Staff Service Co., Ltd. in 1996, and worked as a sales manager and a person in charge of Representative recruiting in the Human Resources Department. Joined Staff Service Sales Marketing Co., Ltd. (currently Link
Slide 8: Business Overview
Business Overview 1. HR Solution business 2. Media business Staffing business/recruitment business Media site operations Accommodate the needs of each phase/department Lovely Plush GAMEMO Planning Development Quality Support Back office management Media for women Fortune-telling media Interview medi
Slide 9: Consolidated Financial Results and Segment Results
03 Consolidated Financial Results and Segment Results Copyright© Confidence Inc. All Rights Reserved. | 9
Slide 10: [Consolidated] Financial Highlights of Q3 FY2023 (Cumulative)
[Consolidated] Financial Highlights of Q3 FY2023 (Cumulative) Revenue and respective profits kept growing steadily from the year-earlier period With steady progress shown toward the earnings forecast for FY2023 (full year), made upward revisions to the full-year forecast for operating profit and
Slide 11: [Consolidated] Quarterly Results Trends by Business
[Consolidated] Quarterly Results Trends by Business The HR Solution business, our mainstay operations, grew steadily and renewed the record-high revenue in Q3 FY2023 Operating profit increased 14.1% year on year, in line with the growth in revenue ▍Revenue (quarterly trends) ▍Operating profit (q
Slide 12: [HR Solution Business] Financial Highlights of Q3 FY2023 (Cumulative)
[HR Solution Business] Financial Highlights of Q3 FY2023 (Cumulative) Achieved strong growth while keeping profit margin at a high level ▍Q3 results (cumulative) FY2022 FY2023 Full year forecast FY2022 (Million yen) YoY Progress rate (Q3) (Q3) - Revised - (Full year) Revenue 3,188 3,816 +19.7% 5,1
Slide 13: [Human Resources Business] Trends in Major KPIs
[Human Resources Business] Trends in Major KPIs Creator staffing assignments, which serve as the foundation of the Company’s recurring income model, steadily increased to end up at 816 (an increase of 101 from the year-earlier period) The utilization rate has been kept at a high level since last
Slide 14: [Media Business] Financial Highlights of Q3 FY2023 (Cumulative)
[Media Business] Financial Highlights of Q3 FY2023 (Cumulative) Although the Media business accounts for a small portion of the entire revenue and the impact on consolidated results is limited, the Q3 results were behind what was achieved a year ago The business, which posted segment loss in Q1,
Slide 15: [Media Business] Trends in Major KPIs and Targeted Revenue Structure
[Media Business] Trends in Major KPIs and Targeted Revenue Structure Page views (PVs) were at a low level throughout Q3 The ratio of outsourced promotional services in revenue sources rose due to a temporal project in Q2, but the transformation of revenue structure remains to be an issue to addr
Slide 16: [Consolidated] Quarterly SG&A Expenses Trends
[Consolidated] Quarterly SG&A Expenses Trends In line with solid growth of net sales, conducted investments to prepare for future growth by promoting recruitment of head office employees (personnel expenses increasing compared with Q2 of the current fiscal year) Intend to make investments for fu
Slide 17: [Consolidated] Factor Analysis of Increase/Decrease in Operating Income (YoY)
[Consolidated] Factor Analysis of Increase/Decrease in Operating Income (YoY) Gross profit increased steadily along with business expansion, contributing to larger operating profit (Million yen) Gross profit SG&A expenses Copyright© Confidence Inc. All Rights Reserved. | 17
Slide 18: [Consolidated] Balance Sheets/Statements of Cash Flows
[Consolidated] Balance Sheets/Statements of Cash Flows There is no concern about financial stability (net cash: 1.86 billion yen / equity ratio: 70.7%) ▍Balance sheets at end of Q3 FY2023 ▍Cash flows for Q3 FY2023 (Cumulative) （Million yen） (Million yen) Balance of cash and deposits as of March 31
Slide 19: Progress in Growth Strategies/Business Topics
04 Progress in Growth Strategies/Business Topics Copyright© Confidence Inc. All Rights Reserved. | 19
Slide 20: Growth Strategy (Overall Picture)
Growth Strategy (Overall Picture) Will continue to expand business scale in line with the six initiatives of the medium- to long-term growth strategy announced upon listing in June 2021 Six initiatives of the medium- to long-term growth strategy Deepen client relationships and establish an ecosyst
Slide 21: Growth Strategy: Expand Business of HR Solution Services
Growth Strategy: Expand Business of HR Solution Services Press releases dated January 17 and 20, 2023 Expand business of HR Solution services Industry│Area│Contract type • Aim to develop into gaming companies located in the Kyushu Entertainment Regional Freelance region, in addition to deepening rel
Slide 22: Growth Strategy: Expand Matching Solutions
Growth Strategy: Expand Matching Solutions Press release dated January 19, 2023 Expand matching solutions Expand into new business areas Web 3.0 Metaverse Other areas • Make equity investment in Protagonist Inc., which works on Web 3.0 × HR Tech • Look to expand HR solution services in the Web 3.0 a
Slide 23: Shareholder Returns
05 Shareholder Returns Copyright© Confidence Inc. All Rights Reserved. | 23
Slide 24: Policy and Status of Shareholder Returns for Q3 FY2023
Policy and Status of Shareholder Returns for Q3 FY2023 Decided to increase fiscal year-end dividends from 25.0 yen per share, the forecast figure announced in “ Consolidated Financial Results for the Fiscal Year Ended March 2022” dated May 12, 2022, to 28.0 yen per share, increasing the total divi
Slide 25: Appendix: Business Plan and Growth Potential
Appendix Business Plan and Growth Potential Announced on June 23, 2022 Copyright© Confidence Inc. All Rights Reserved. | 25
Slide 26: Business Model, Source of Competitiveness and Market Environment
Business Model, Source of Competitiveness and Market Environment Copyright© Confidence Inc. All Rights Reserved. | 26
Slide 27: Our Competitive Advantages and Strengths
Our Competitive Advantages and Strengths Business strategy Efficient organizational operations Maximize the total amount of matching by Conduct organizational design based on division of maximizing the number of job seekers and labor and standardization, and simplify operations job openings as much
Slide 28: Business Diagram
Business Diagram Recruit and hire creators to deliver staffing, recruitment and outsourcing services for the gaming industry Provide media operation assistance services on top of earning advertising income through the operation of our own media Clients HR Solution Request for creator staffing an
Slide 29: Our Major Revenue Structure and KPIs: HR Solution Business (1/2)
Our Major Revenue Structure and KPIs: HR Solution Business (1/2) The revenue structure and KPIs of the HR Solution business - staffing business, which accounts for the majority of our sales, are as follows With a particular focus on creator staffing assignments among the breakdown items, aim to
Slide 30: Our Major Revenue Structure and KPIs: HR Solution Business (2/2)
Our Major Revenue Structure and KPIs: HR Solution Business (2/2) The revenue structure and KPIs for the HR Solution business - outsourcing business and recruitment business, which are related to the staffing business, our core business, are as follows HR Solution Media : Business KPIs business bus
Slide 31: Our Major Revenue Structure and KPIs: Media Business
Our Major Revenue Structure and KPIs: Media Business The revenue structure and KPIs of the Media business are as follows Aim to shift from the existing media site operations business to the revenue structure centering on web promotion business HR Solution Media : Business KPIs business business
Slide 32: [Existing Areas] Trends in the Content / Gaming Markets
[Existing Areas] Trends in the Content / Gaming Markets Of the content market, the gaming market is projected to remain on an expansion trend both in Japan and overseas Consequently, demand for human resources from gaming companies is assumed to keep growing ▍Trends in the gaming market Japan Si
Slide 33: [Existing Areas] Supply and Demand Situation for IT Personnel
[Existing Areas] Supply and Demand Situation for IT Personnel According to a survey conducted by the Ministry of Economy, Trade and Industry, the shortage of IT personnel tends to expand year by year in response to the expansion of IT needs A similar trend is assumed to continue in the gaming in
Slide 34: [New Areas] Changes in Recent industry Trends
[New Areas] Changes in Recent industry Trends ▍Changes in the industry trends from the previous ▍Status of companies in the gaming industry and other announcement to the latest industries (examples) As of previous Overseas Facebook “Metaverse” announcement • Changed the company name to Meta / announ
Slide 35: [New Areas] Gaming Industry and Future Target Markets
[New Areas] Gaming Industry and Future Target Markets ▍Changes in content creation, distribution and usage brought about by digitization Overseas Metaverse market Transformation of “GLOBAL METAVERSE MARKET 2018-2028” by Emergen Research, industrial structure released in November 2021 ($ billion) • T
Slide 36: Growth Strategy/M&A Strategy
Growth Strategy/M&A Strategy Copyright© Confidence Inc. All Rights Reserved. | 36
Slide 37: Image of Future Growth
Image of Future Growth Securely grow the “game x human resources” area, our existing domain, while entering the peripheral areas and outsourcing service area Also, look to expansion into new markets in new areas (such as Web 3.0 and metaverse) in response to changes in the external environment D
Slide 38: Basic Strategy and Investment Concept for the Image of Future Growth
Basic Strategy and Investment Concept for the Image of Future Growth As the basic strategy and investment concept for our future growth, maximize revenue per client and the client base, and proactively invest the collected profit in new business areas with high growth potential Increase revenue pe
Slide 39: Growth Strategy (Overall)
Growth Strategy (Overall) Medium-term: Expand business by deepening client relationships and establishing a virtuous cycle (ecosystem) of business collaborations Long-term: Expand target markets and develop into new markets in new areas (such as Web 3.0 and metaverse) with matching solutions Med
Slide 40: Expand Staffing Business by Deepening Client Relationships
[Medium-Term Growth Strategy (1)]: Expand Staffing Business by Deepening Client Relationships Aim to gain the overwhelmingly No.1 position as staffing business operator in the gaming industry by further deepening client relationships Before deepening client After deepening client relationships rel
Slide 41: Conduct Cross-Selling to Existing Clients
[Medium-Term Growth Strategy (2)]: Conduct Cross-Selling to Existing Clients Expand revenue through cross-selling of recruitment and outsourcing services by leveraging the network built in staffing business Before cross-selling After cross-selling Recruitment department and outsourcing service dep
Slide 42: Establish and Expand Ecosystem
[Medium-Term Growth Strategy (3)]: Establish and Expand Ecosystem Establish and expand an ecosystem of staffing, recruitment, outsourcing and media businesses, improve management efficiency, and increase opportunities to provide services to the gaming industry Establish an ecosystem Establish and
Slide 43: Diversify and Expand HR Solution Areas
[Long-Term Growth Strategy (1)]: Diversify and Expand HR Solution Areas (Industry, Geographical Area and Work Type) Work to diversify and broaden the client industries, geographical areas and formats (freelancers), and advance into web and entertainment areas instead of specializing in gaming indu
Slide 44: Expand Outsourcing Service Area
[Long-Term Growth Strategy (2)]: Expand Outsourcing Service Area Expand media-related outsourcing services and, by further enlarging and diversifying the human resource pool, provide a variety of HR Solution services Expand the scale and further diversify Media-related outsourcing services the hum
Slide 45: Expansion into New Areas (Web 3.0 and Metaverse, Etc.)
[Long-Term Growth Strategy (3)]: Expansion into New Areas (Web 3.0 and Metaverse, Etc.) Match the technology of the gaming industry with companies in various industries by utilizing our network with gaming companies and, after matching, provide support to the companies by our talents utilizing the
Slide 46: M&A Strategy: Approach to Business Development
[M&A Strategy]: Approach to Business Development Based on Growth Strategy ▍Approach to business development: break down the focus areas around the core business (staffing), and newly establish, deepen and expand each part on our own or through external forces (M&A) Core business processes - by value
Slide 47: M&A Strategy: M&A Policy / Financial Discipline / Governance
[M&A Strategy]: M&A Policy / Financial Discipline / Governance Proactively utilize M&A for the portions indispensable for future growth while considering the timeline Set up disciplines for executing the M&A Focus on consistency with the target businesses and areas set out in the Organic growt
Slide 48: Risk Information
Risk Information Copyright© Confidence Inc. All Rights Reserved. | 48
Slide 49: Major Risks Related Business Environment
Major Risks Related Business Environment Of the risks described in the annual securities report (filed on June 30, 2022), the major risks are as follows Probability Degree of Business risk Risk overview of Our policy to address the risk impact occurrence Shortage of human resources due We have tak
Slide 50: Inquiries and Handling of this Material
Envisioning the future together at the frontline of the creative industry Inquiries about this material: Administration Division (ir@confidence-inc.jp) Handling of this material This material includes forward-looking statements. These are nothing but the statements prepared on the basis of the infor