Projectholdings.inc. · TSE:9246
Projectholdings.inc — ProjectCompany — Q1 2023 Earnings Presentation
51 slides from Projectholdings.inc's earnings presentation, May 15, 2023
Slide 1: Financial Results for the First Quarter of the Fiscal Year Ending December 31, 2023
Financial Results for the First Quarter of the Fiscal Year Ending December 31, 2023 ProjectCompany, Inc. [TSE Growth: 9246] May 15, 2023
Slide 2: Executive Summary
Executive Summary FY2023 Q1 Financial Results Net Sales Operating Income EBITDA *1 EBITDA Margin ¥1,494 million ¥228 million ¥271 million 18.2% (+59.6% YoY) (+1.8% YoY) (+17.3% YoY) Net sales and operating income increased year on year, EBITDA excluding the impact of non-cash expenses also increas
Slide 3: Contents
Contents 1. Group Overview p. 4 2. FY2023 Q1 Financial Results p. 11 3. Progress and Forecasts for Major Numerical Information, etc. p. 17 4. Topics p. 24 Appendix 1 Outline of Digital Transformation Business p. 30 Appendix 2 Future Growth Strategies p. 38 Appendix 3 Other Reference Information p. 4
Slide 4: 1. Group Overview
1. Group Overview coProjectCompany 4
Slide 5: Group Management Philosophy
Group Management Philosophy Group Management Philosophy Creating a Project-based Society The Japanese economy has continued to stagnate. If the situation remains unchanged, it is feared that it will continue to decline in the future. We believe that the only way for the Japanese economy and society
Slide 6: Company History
Company History Period of diversified growth through group management April 2023: Dr.KENKO KEIEI Inc. and artwize inc. became a group company. October 2022: cuatro technologies Inc. (currently ProjectTechnologies Inc.) became a group company. July 2022: Established ProjectDigitalMarketing Inc. (curr
Slide 7: Our Group's Business Domains
Our Group’s Business Domains In FY2022, we tested our group management system through M&As and spin-offs, and the results were generally favorable. In the future, we will further accelerate the expansion of business domains with DX as our core competence and aim for diversified growth through a
Slide 8: Diagram of the Business Structure
Diagram of the Business Structure The Group's business structure is shown below. Service support Consulting services Digital transformation business Partner *1 Consulting support Payment of support fees Payment of consignment fees Client Marketing services Service support Corporate planning and Co
Slide 9: Case Studies
Case Studies SBI NEOMOBILE transcosmos SECURITIES Support for launching a stock purchase service using T-points Joint DX support by combining know-how of both companies Supported a project to launch a new service that enables transactions through Tanscosmos supports more than 600 DX projects per yea
Slide 10: Status of Employees
Status of Employees As of April 3, 2023, the number of employees increased steadily to 247, driving growth in net sales. Number of Employees Composition of Employees 250 *FY2023 Q1 employee data as of April 3 247 Corporate DX x HR business division 200 DX x Technology business DX x HR business 30
Slide 11: 2. FY2023 Q1 Financial Results
2. FY2023 Q1 Financial Results 11
Slide 12: Quarterly Consolidated Financial Results - Net Sales
Quarterly Consolidated Financial Results - Net Sales Net sales in FY2023 Q1 achieved ¥1,494 million, +8.6% QoQ and +59.6% YoY. Net sales in the digital transformation business alone were ¥1,196 million, +8.9% QoQ, +27.8% YoY. Net sales (million yen) +59.6% YoY 1,494 DX x HR business 1,376 77 64
Slide 13: Quarterly Consolidated Financial Results - Operating Income & EBITDA
Quarterly Consolidated Financial Results - Operating Income & EBITDA Operating income fell QoQ. EBITDA excluding the impact of non-cash expenses was ¥271 million. Operating income (million yen) EBITDA* (million yen) Operating income EBITDA EBITDA margin Operating income margin 29.2% 28.1% 27.1% 24
Slide 14: Results by Segment - Net Sales
Results by Segment - Net Sales Net sales by segment are as follows. Net sales in each business grew QoQ. Digital transformation business DX x Technology business DX x HR business *From FY2023 Q1, the aggregation standards for marketing services were *Consolidated from FY2022 Q4. Previous *Consolid
Slide 15: Results by Segment - Cost of Sales & Gross Profit
Results by Segment - Cost of Sales & Gross Profit Cost of sales and gross profit by segment were as follows. In the Digital transformation business and DX x Technology business, the growth rate of subcontracting expenses was higher than that of net sales, lowering the gross profit margin. Digital
Slide 16: SG&A Expenses
SG&A Expenses Selling, general and administrative expenses (SG&A expenses) were as follows. Recruiting expenses increased significantly QoQ. Results (million yen) SGA vs. net sales QoQ Description Personnel expenses / subcontracting expenses Executive compensation, back-office employee (SG&A expen
Slide 17: 3. Progress and Forecasts for Major Numerical Information, etc.
3. Progress and Forecasts for Major Numerical Information, etc. 17
Slide 18: Digital Transformation Business | Number of Clients & Per-client Sales
Digital Transformation Business｜Number of Clients & Per-client Sales Number of clients and net sales per client grew compared to FY2022 Q1. Number of clients (by order retention period) Net sales per client (million yen) *Figures based on clients the Company had transactions with that FY as * Figu
Slide 19: Digital Transformation Business | Number of Employees & Net Sales per Employee
Digital Transformation Business｜Number of Employees & Net Sales per Employee Number of employees increased steadily. Net sales per employee is expected to decline in the medium- to long-term due to a reduction in the ratio of partners in line with progress in hiring. Average number of employees du
Slide 20: Digital Transformation Business | Ratio of Partners
Digital Transformation Business｜Ratio of Partners Currently, we will focus on securing strong demand for projects by utilizing our partners. In the medium- to long-term, we will reduce our partner ratio and improve our profit margin. However, in consideration of the hiring situation and acquisit
Slide 21: Digital Transformation Business | Future Investment Plans Based on Personnel Plans
Digital Transformation Business｜Future Investment Plans Based on Personnel Plans As investments to secure human resources, we expect to record medium- to long-term expenses for recruiting expenses and (people) office rents as shown below. 300 Personnel plan *The total number of employees in the di
Slide 22: DX x Technology Business | Operations
DX x Technology Business｜Operations Expanded the Group's support domain to include technology areas such as system development and software testing using engineer dispatch services acquired in October 2022. Aim to improve profitability by expanding the ratio of transactions with top companies in
Slide 23: DX x HR Business | Operations
DX x HR Business｜Operations uloqo Co., Ltd. (currently ProjectHRsolutions, Inc.), which joined the Group in April 2022, steadily expanded its business performance using the Group’s know-how with a focus on organization building. In April 2023, the company acquired shares in Dr.KENKO KEIEI Inc.,
Slide 24: 4. Topics
4. Topics co ProjectCompany 24
Slide 25: M&A | Dr. KENKO KEIEI & artwize join the Group
M&A｜Dr. KENKO KEIEI & artwize join the Group Two new M&As were completed in April 2023. Dr.KENKO KEIEI Inc. artwize inc. Dr.KENKO KEIEI is developing businesses related to employee As with ProjectTechnologies, Inc., artwize mainly develops SES health and mental health care for corporate customers,
Slide 26: M&A | PMI of ProjectTechnologies
M&A｜PMI of ProjectTechnologies Cuatro technologies, Inc. (currently ProjectTechnologies, Inc.), which has been a group company since October 2022, has made a generally favorable start. PMI focuses on organization building, hiring and back-office operations. Status of cuatro technologies, Inc. (c
Slide 27: Organizational Development | Recruitment Situation
Organizational Development ｜ Recruitment Situation Changes in the total number of applications and the number of new employees are as follows. It is recognized that a certain level of quality can be used as collateral. Mid-career recruitment 〈Number of entries*〉 *Candidates who had at least one in
Slide 28: Organizational Development | Development of Managers
Organizational Development ｜ Development of Managers Steady progress in developing human resources for managers, which are key points in the Project Company-style organization building. Using the accumulated know-how as a guideline to formalize human resources development. Breakdown of Employees
Slide 29: Management Structure | Merger of ProjectPartners
Management Structure ｜ Merger of ProjectPartners In preparation for the establishment of a pure holding company structure in January 2024, ProjectCompany will absorb ProjectPartners and transfer it to ProjectCompany Co., Ltd. in July 2023 to strengthen cooperation among consulting businesses withi
Slide 30: 5. Appendix (i) Overview of Digital Transformation Business
5. Appendix (i) Overview of Digital Transformation Business 30
Slide 31: Feature (1) | DX's One-stop Advisory System
Feature (1) ｜ DX’s One-stop Advisory System Provide a one-stop service ranging from web improvement support for user interfaces, to marketing support and business support such as new business development. Efficient and effective digital transformation (DX) is possible because customers can recei
Slide 32: Feature (2) | UIscope as a Starting Point of One-stop Support
Feature (2) ｜ UIscope as a Starting Point of One-stop Support The usability testing and improvement of UIScope supports objective and comprehensive app/web improvements through UI/UX surveys using registered monitors. Boasts high recognition in the UI/UX domain, with inbound* orders accounting f
Slide 33: Feature (3) | Strong Customer Base Centered on Major Companies
Feature (3) ｜ Strong Customer Base Centered on Major Companies About 60% of all clients are large companies with sales of 100 billion yen or more. These companies account for about 80% of our total net sales. We do business with a wide range of major companies in IT, communications, finance, and
Slide 34: Feature (4) | Accumulation of Long-term Customers through Stock-type Business Model
Feature (4) ｜ Accumulation of Long-term Customers through Stock-type Business Model We recognize that consulting companies generally have a sales structure with emphasis on spot and flow projects. We have built up net sales by building a stock-type business model that is premised on continued su
Slide 35: Case Introduction | Consulting Services (New Business Development)
Case Introduction ｜ Consulting Services (New Business Development) Many new business development projects are supported by business strategy planning, such as business model consideration and business plan formulation. As business development professionals, we develop and manage the overall sche
Slide 36: Case Introduction | Marketing Services
Case introduction ｜ Marketing Services (Marketing Strategy Planning to Implementation Support) In planning a marketing strategy, it is important to clarify "What is marketing for?" by defining targets. In addition, the value of our marketing support is not only in strategy planning, but also in
Slide 37: Case Introduction | UI/UX Services (UI research)
Case Introduction ｜ UI/UX Services (UI research) In UI research, we collect raw opinions from target users regarding the convenience of applications and websites. We implement effective proposals for improvement by discovering bottlenecks that cannot be clarified by quantitative data alone. N-30
Slide 38: 6. Appendix (ii) Future Growth Strategies
6. Appendix (ii) Future Growth Strategies 38
Slide 39: Progress Towards the Medium-term Target TARGET100
Progress Towards the Medium-term Target "TARGET100" The medium-term target "TARGET100" (announced in February 2022) aims to achieve 10 billion yen in net sales and 2 billion yen in operating income in FY2025. Both net sales and operating income are progressing smoothly. We will continue to focus
Slide 40: Policies to Achieve Performance Targets
Policies to Achieve Performance Targets Aiming to achieve net sales of 10 billion yen one year ahead of schedule, we will strive to achieve both (1) growth in existing businesses and (2) discontinuous growth through M&A. Aiming to achieve net sales of 10 billion yen one year ahead of schedule Poli
Slide 41: (1) Organic Growth Strategies | Development of Managers
(1) Organic Growth Strategies ｜ Development of Managers Develop managers in line with sales targets and drive growth. In addition to expanding the number of employees in the member class through increased recruitment of human resources, develop a system to maximize the use of human resources wit
Slide 42: (1) Organic Growth Strategies | Expansion of Joint Participation Partners
(1) Organic Growth Strategies ｜ Expansion of Joint Participation Partners By jointly participating in projects with partners and providing benefits such as project management know-how, we will expand the number of partners and establish a system to realize a flexible order receiving system. The
Slide 43: (2) M&A Strategies | Investment Policy / PMI
(2) M&A Strategies ｜ Investment Policy / PMI For M&A, while continuously sourcing projects, we will actively consider projects with potential synergies with an EV/EBITDA ratio of around 5 times. After executing M&A, PMI results that exceed goodwill amortization are achieved through knowledge inj
Slide 44: (2) M&A Strategies | Becoming a Holding Company
(2) M&A Strategies ｜ Becoming a Holding Company to Accelerate Group Management System Expansion Based on the generally smooth progress of the group management system that was implemented on a trial basis in fiscal 2022, in order to further accelerate diversified growth through M&As and spin-offs,
Slide 45: 7. Appendix (iii) Other Reference Information
7. Appendix (iii) Other Reference Information 45
Slide 46: Company Overview
Company Overview Company ProjectCompany, Inc. Name Head Office Izumi Garden Tower 39F, 1-6-1 Roppongi, Minato-ku Location Establishment January 2016 Share Capital 977,559,000 yen (as of March 31, 2023) Representative Director and President, Group CEO Yunosuke Doi Full-time Corporate Auditor Aiko Yuk
Slide 47: Financial strategy
Financial strategy Aim for "Profitable Hypergrowth" by securing sustainable EBITDA growth centering on existing businesses and financing capacity based on a sound financial base and actively investing in businesses and M&A for growth. Current Situation Recognition Financial Strategy Basic Policy E
Slide 48: Financial Data
Financial Data First quarter of the Rotation 1st period 2nd period 3rd period 4th period 5th period 6th period 7th period 8th period December December December December December December December Fiscal year end March 2023 2016 2017 2018 2019 2020 2021 2022 Net sales (thousand yen) 40,533 132,676 39
Slide 49: Initiatives Related to Environmental and Social Issues
Initiatives Related to Environmental and Social Issues Actively addressing environmental and social issues and aiming for mid - to long-term increasing our corporate value Relocation to New Environmentally-friendly Office E nvironment ✓ Office to be relocated to Azabudai Hills, which boasts about
Slide 50: To Our Investors
To Our Investors I would like to express my sincere gratitude to all our shareholders and potential investors for your warmest support. I would like to take this opportunity to share with you what I value as a manager. As a company manager, I place the highest priority on doing the things that are t
Slide 51: Points to Note
Points to Note Information contained in this document other than information on the Company is derived from publicly available information, and the Company makes no representations or warranties as to its authenticity, accuracy or completeness. This document also refers to the future prospects of th