Slide 1: Presentation for New Investors
ZIGExN Co., Ltd. Presentation for New Investors
Slide 2: Contents
Contents 1. Company & Business Overview 2. Competitive Advantage 3. Growth Strategy 4. Recent Financial Results 5. Financial Policy 6. Reference Materials 2 Copyright(C) ZIGExN Co., Ltd. All Rights Reserved.
Slide 3: Company & Business Overview
1 Company & Business Overview
Slide 4: Company Overview
1. Company & Business Overview Company Overview Overview Basic Principle ZIGExN aims at “maximizing opportunities in life” and Company name ZIGExN.Co.,Ltd seeks harmony and sustainable development with Location of 3-4-8 Toranomon, Minato-ku, Tokyo, Japan society by providing a platform to connect to
Slide 5: CEO Profile
1. Company & Business Overview CEO Profile Representative Director, President and CEO Publication of the Book Joe Hirao Brief record Entrepreneurial Thinking Born in 1982. Graduated from the Faculty of Established the forerunner to ZIGExN in 2006, Environment and Information Studies, Keio becoming a
Slide 6: History of ZIGExN
1. Company & Business Overview History of ZIGExN Changed from the 1st section of 15th anniversary of establishment. TSE market to the Prime Market. Released 2nd medium-term management plan “Z CORE”. 2023 Moved headquarters to Toranomon, Minato-ku, Tokyo. 2022 Changed company name to ZIGExN Co., Ltd.
Slide 7: Performance Summary
1. Company & Business Overview Performance Summary ⚫ Achieved increased revenue for 13 straight terms from founding to FY3/2020. ⚫ Despite being heavily impacted by COVID-19 in the travel and Human Resource segment, revenue and profits returned to a YoY growth trend starting from Q4 of FY3/2021 than
Slide 8: Overview of main services by segment
1. Company & Business Overview Overview of main services by segment Job offering media specializing in the ⚫ Hair salon REJOB beauty industry https://relax-job.com/ Vertical HR ⚫ Manufacturing Ties Manufacturing industry-specific recruiting https://www.ee-ties.com/ Consists of mainstay Recruiting an
Slide 9: Vertical HR segment: Business model
1. Company & Business Overview Vertical HR segment: Business model ⚫ The Vertical HR segment consists of domain-specific HR businessess (job-matching platform and employment placement / temporary staffing). Corporate Clients Vertical HR Users Search and Application Recruitment support Job-matching p
Slide 10: Living Tech segment: Business model
1. Company & Business Overview Living Tech segment: Business model ⚫ The Living Tech consists of (1) "Aggregation platform“, which allows users to search and apply for information from multiple websites at once, "Specialized platform" and "Business Support Tools“, which have their own direct clients
Slide 11: Living Tech segment: Business model (2)
1. Company & Business Overview Living Tech segment: Business model (2) ⚫ The Living Tech consists of (1) "Aggregation platform“, which allows users to search and apply for information from multiple websites at once, "Specialized platform" and "Business Support Tools“, which have their own direct cli
Slide 12: Life Service segment: Business model (1)
1. Company & Business Overview Life Service segment: Business model (1) ⚫ The Life Service segment has a vast databse similar to a core business and is recognized as the foundation of our management resources. We have three types of business model: aggregated media, specialized media, and system dev
Slide 13: Life Service segment: Business model (2) (Travel)
1. Company & Business Overview Life Service segment: Business model (2) (Travel) Hotel/ Hotel/Airline Travel Agencies Users Airline ticket wholesalers APPLE WORLD Provide Posting hotels/ information Air tickets on hotels/ Hotel/Air tickets Travel Air tickets reservations Reservations BtoB Business H
Slide 14: Life Service segment: Business model (2) (Travel)
1. Company & Business Overview Life Service segment: Business model (2) (Travel) Hotels/ Hotel/Airline TSD Travel Agencies Users Airline ticket wholesalers Airline Airline ticket Airline Ticket ticketing issuance Arrangement BtoB Business Airline ticket Paying price fees Provide hotels Information p
Slide 15: Competitive Advantage
2 Competitive Advantage
Slide 16: Sources of strength (1) -Matching Technology-
2. Competitive Advantage Sources of strength (1) -Matching Technology- ⚫ We quickly build clients and users contact points and have collected and analyzed information on both for over ten years. ⚫ We then collect and compile more detailed information by also focusing on alliances with individual com
Slide 17: Sources of strength (1) -Overview of Matching Technology-
2. Competitive Advantage Sources of strength (1) -Overview of Matching Technology- ⚫ Matching technology is the ability to provide users who seek information with the most appropriate information to encourage them to take actions. ⚫ Accumulation of data through the operation of more than 30 platform
Slide 18: Sources of strength (1) -Examples of Improvements with Matching Technology-
2. Competitive Advantage Sources of strength (1) -Examples of Improvements with Matching Technology- ⚫ With respect to the ability to attract users, which is the starting point of the positive spiral of improving the ability to attract users → improving the value of the platforms → increasing the nu
Slide 19: Sources of strength (2) -ZIGExN Value Integration(ZVI)-
2. Competitive Advantage Sources of strength (2) -ZIGExN Value Integration(ZVI)- ⚫ Achieved rapid improvements to results (such as REJOB and IACC) by identifying room for CVR improvements in services/businesses and utilizing matching technology based on ability to discover and identify, funding capa
Slide 20: M&A performance - Payback period -
2. Competitive Advantage M&A performance - Payback period - ⚫ Regarding the payback period, the majority of investments, including those with payback schedules, have achieved payback at an early date, generally in the range of 3-5 years because of the successful PMI. ⚫ In terms of return on investme
Slide 21: Results of M&A Investment
2. Competitive Advantage Results of M&A Investment ⚫ Regarding 19 deals out of the 25 cumulative M&As conducted in the past years until FY3/2023 (excludes 6 businesses sold or acquired within a year), EBITDA was 3.3 billion yen, against EV of 11.7 billion yen. ⚫ Annual return of 28.6%; cumulative re
Slide 22: Sources of strength (3) - Business officer creation cycle -
2. Competitive Advantage Sources of strength (3) - Business officer creation cycle - ⚫ Creating opportunities for officer positions and taking measures to strengthen business officers through diverse routes. ⚫ Autonomous business management by business officers and business alliances driving the ZIG
Slide 23: Growth Strategy
3 Growth Strategy
Slide 24: 2nd Medium-term Management Plan “Z CORE”
3. Growth Strategy 2nd Medium-term Management Plan “Z CORE” In FY3/2026 Management ⚫ Revenue of more than 35bn yen Plan EBITDA of more than 10bn yen ⚫ Create Z CORE (revenue of 10bn yen) To create Z CORE, based on the selection and concentration (market selection and allocation of Management managem
Slide 25: Progress of the 2nd Medium-term Management Plan and Projection
3. Growth Strategy Progress of the 2nd Medium-term Management Plan and Projection ⚫ (1) The initially assumed unit price per client increases due to the group-in of high unit price businesses through M&As, price hikes in some businesses, and other factors. ⚫ (2) We plan to focus on the development o
Slide 26: Progress of the 2nd Medium-term Management Plan and Projection - Vertical HR -
3. Growth Strategy Progress of the 2nd Medium-term Management Plan and Projection - Vertical HR - ⚫ In Vertical HR, the progress in FY3/23 was 72% towards the target of 10 billion yen in revenue for FY3/26. ⚫ We aim to achieve revenue of 9,300 million yen (progress rate: 93%) in FY3/24 and 10 billio
Slide 27: Progress of the 2nd Medium-Term Management Plan and Projection- Living Tech -
3. Growth Strategy Progress of the 2nd Medium-Term Management Plan and Projection- Living Tech - ⚫ In Living Tech, the progress in FY3/23 was 48% towards the target of 10 billion yen in revenue for FY3/26. ⚫ We aim to achieve revenue of 5,800 million yen (progress rate: 58%) in FY3/24 and 10 billion
Slide 28: Highlights of Strategy in Each Segment
3. Growth Strategy Highlights of Strategy in Each Segment ⚫ Further refine medium-term strategies in each segment. ⚫ Implemented both organic and alliance/M&A strategies to achieve the goals set forth in Z CORE. Details of strategies for each segment ⚫ Selecting our own target areas based on Increas
Slide 29: Market Size and Strategy in Vertical HR
3. Growth Strategy Market Size and Strategy in Vertical HR ⚫ Based on internal criteria, we select targets for Vertical HR. ⚫ Extend to areas where optimal unit economics can be achieved, and expand and reproduce laterally. Room for Market Expansion Growth Strategies Optimize the business model Busi
Slide 30: Growth strategy in Vertical HR
3. Growth Strategy Growth strategy in Vertical HR ⚫ The HR market is a fragmented market, and commonality is not always optimal, so the value of domain-specific intervention is significant. ⚫ Within the HR market, we select the areas considering the size of the supply-demand gap, the competitive env
Slide 31: Existing domains in Vertical HR
3. Growth Strategy Existing domains in Vertical HR ⚫ Accelerate the speed of growth of each business by consolidating know-how in sales, marketing, systems, etc., while comprehensively strengthening business models based on the analyze of each business's strengths and success factors. ⚫ At the same
Slide 32: Growth strategy in Living Tech
3. Growth Strategy Growth strategy in Living Tech ⚫ Aim for growth through the website-based domain expansion, the business model expansion, and enhancement of the value provided through cross-selling. ⚫ Explore opportunities for expansion into higher value-added business models while maintaining hi
Slide 33: M&A Strategy -Overview-
3. Growth Strategy M&A Strategy -Overview- ⚫ (1) Expand TAM through MA&s with the main focus on user-attracting website, aiming for horizontal expansion into adjacent/new areas. ⚫ (2) Expand SAM through M&As based on cross-sell and up-sell synergies generated by the contact points with users and cor
Slide 34: M&A Strategy -an entry to new business domains-
3. Growth Strategy M&A Strategy -an entry to new business domains- ⚫ In order to further promote the discontinuous growth, we will maintain our strategic investment policy, using accumulated cash flow as funding for future M&As. ⚫ We recognize that there are plenty of domains where there is a demand
Slide 35: Recent Financial Results
4 Recent Financial Results
Slide 36: Rate of achievement against the financial forecast for FY3/2023
4. Recent Financial Results Rate of achievement against the financial forecast for FY3/2023 ⚫ Achieved consolidated financial forecasts in all items, including revenue, EBITDA, and operating income Revenue EBITDA Operating income Vertical HR 18,709M 5,334M 4,180M New M&A activities such as Ties and
Slide 37: Yearly financial results - Revenue -
4. Recent Financial Results Yearly financial results - Revenue - ⚫ The growth of recurring revenue was driven by contributions Consolidated revenue Recurring revenue Non-recurring revenue from SEKAI PROPERTY, which joined the Group through M&A 18,709M 10,981M 7,728M ⚫ in the FY3/2023, and a recovery
Slide 38: Recurring revenue vs. Non-recurring revenue
4. Recent Financial Results Recurring revenue vs. Non-recurring revenue ⚫ Recurring revenue, which is highly scalable, controllable and sustainable, Recurring revenue Non-recurring revenue flattened off in FY3/21 due to the effects of the COVID-19 pandemic, but 10,981M 7,728M returned to an upward t
Slide 39: Organic Growth and Inorganic (M&A) Growth
4. Recent Financial Results Organic Growth and Inorganic (M&A) Growth ⚫ Aggressive M&A activities to achieve discontinuous growth ⚫ Growth in organic growth was +37.5% YoY Organic/Inorganic Revenue (yen in millions) 25,000 FY3/23 Inorganic Growth (M&A) FY3/22 Organic Growth FY3/21 23,300 20,000 FY3/
Slide 40: Yearly financial results - Profits -
4. Recent Financial Results Yearly financial results - Profits - EBITDA Operating income ⚫ Consolidated EBITDA exceeded 5.0 billion yen, reaching a record high due to the recovery of the travel business and the contributions from new M&As mainly 5,334M 4,180M Ties. ⚫ Consolidated operating income re
Slide 41: Quarterly financial results
4. Recent Financial Results Quarterly financial results Revenue EBITDA Operating income ⚫ The Q4 marked record highs in revenue, EBITDA and operating income. 5,590M 1,738M 1,313M ⚫ EBITDA margin for the Q4 landed at 31.1%, the highest level in nearly two years and the highest since the Covid- (YoY +
Slide 42: Yearly financial results – Cash Flow -
4. Recent Financial Results Yearly financial results – Cash Flow - ⚫ CF from operations: Record high due to steady growth in existing CF from Operations CF from Investing CF from Financing businesses and M&As that are expected to contribute to earnings at an early stage. 5,706M -4,601M 267M ⚫ CF fro
Slide 43: Number of corporate clients and Recurring revenue
4. Recent Financial Results Number of corporate clients and Recurring revenue ⚫ The number of corporate clients reached a record high due to the steady growth of Number of Recurring existing businesses, mainly REJOB, and contributions from new group companies corporate clients revenue such as TSD. 2
Slide 44: Number of clients posting ads on the platform of the mainstay businesses
4. Recent Financial Results Number of clients posting ads on the platform of the mainstay businesses Vertical HR Living Tech ⚫ In Vertical HR, the number of clients posting ads on its platform grew steadily due to Number of clients posting Number of clients posting the stable expansion of existing b
Slide 45: Revenue by business segment
4. Recent Financial Results Revenue by business segment ⚫ In Vertical HR, stable growth in REJOB and contributions from newly Vertical HR Living Tech Life Service acquired businesses such as Ties resulted in a significant increase in revenue. ⚫ Living Tech achieved steady growth mainly due to growth
Slide 46: Current business environment
4. Recent Financial Results Current business environment ⚫ The external environment for Vertical HR is generally favorable, and a full-fledged recovery in travel is progressing in Life Service. Situ- Situ- Businesses Client Side User Side ation ation ⚫ Recruitment needs among business offices ⚫ Job
Slide 47: Business situation in mainstay businesses - Vertical HR -
4. Recent Financial Results Business situation in mainstay businesses - Vertical HR - 15,000 12,752 12,835 ⚫ Monthly fee model achieved a record high due to an increase in Number of clients hiring needs. 10,000 (companies) ⚫ The pay-for-performance (=Hire) model has greatly increased due to M&As. 5,
Slide 48: Business situation in mainstay businesses -Living Tech-
4. Recent Financial Results Business situation in mainstay businesses -Living Tech- 4,000 3,632 3,802 ⚫ The number of members remained steady, and the number of corporate clients grew steadily year-over-year. 3,000 Number of clients ⚫ Unit price per client rose due to the contribution of a new group
Slide 49: Other business situation -Life Service: Travel domain-
4. Recent Financial Results Other business situation -Life Service: Travel domain- ⚫ In the overseas domain, revenue was at the same level as before Covid-19 pandemic and operating income has steadily increased due to the recovery of APW’s performance and the contribution of TSD, a newly acquired co
Slide 50: Financial forecast for FY3/2024
4. Recent Financial Results Financial forecast for FY3/2024 ⚫ We aim for more than 20% growth in all items, including revenue, EBITDA, and operating income. Vertical HR Revenue EBITDA Operating income Expect high growth due to 23,300M 6,500M 5,300M stable growth of existing (YoY: 125%) (YoY: 122%) (
Slide 51: Financial Policy
5 Financial Policy
Slide 52: Financial policy
5. Financial Policy Financial policy ⚫ In principle, we continue the financial policy that the maximum amount of share buyback limit for the following year shall be the amount of net income for the year less the amount of strategic investments and the total amount of dividends. ⚫ The acquired treasu
Slide 53: Financial strategy and strategic investments (M&A)
5. Financial Policy Financial strategy and strategic investments (M&A) ⚫ In accordance with the Company's financial policy, the Company will not conduct a share Strategic Dividend investment forecast buyback in FY2024/3, as the total amount of strategic investments and dividends exceeded the net inc
Slide 54: Balance sheet condition
5. Financial Policy Balance sheet condition Goodwill-to-capital Total amount of ⚫ Financial health remained solid with the goodwill-to-capital ratio of ratio goodwill 0.6x and the ratio of equity attributable to owners of the parent to total assets at 52.9%, which are within the Company's financial
Slide 55: Goodwill impairment testing
5. Financial Policy Goodwill impairment testing ⚫ A total of 16 CGUs comprising goodwill were tested for impairment by comparing the carrying amount with the recoverable amount in accordance with IFRS. ⚫ In FY3/23, the recoverable amount of each CGU significantly exceeded its carrying amount, and no
Slide 56: Reference Materials
6 Reference Materials
Slide 57: Executive Structure -Officers and Corporate-
6. Reference materials Executive Structure -Officers and Corporate- ⚫ Promote sophistication of business execution functions from the perspectives of both business growth and expansion of corporate functions. ⚫ A rich executive structure with diverse skills through a variety of routes, including pro
Slide 58: Executive Structure -Business Officers and Specialists-
6. Reference materials Executive Structure -Business Officers and Specialists- ⚫ Abundant business officers and specialists with diverse backgrounds and skills lead the business and execute PMI for M&A. Businesses and Areas of Name Responsibility Career Ippei Suzuki REJOB Joined the Company in 2011
Slide 59: Members of the Board of Directors and Board of Statutory Auditors
6. Reference materials Members of the Board of Directors and Board of Statutory Auditors ⚫ Subject to approval by the General Meeting of Shareholders, the committee consists of members (candidates) with extensive experience and expertise. ⚫ The Board of Directors is positioned as a supervisory body
Slide 60: Board of Directors
6. Reference materials Board of Directors ⚫ The Company aims to grow its core business and manage its expanding business through a management team that is both offensive and defensive, by injecting the experience in business operations and strategy execution at other companies that the candidate for
Slide 61: SDGs materiality set by ZIGExN
6. Reference materials SDGs materiality set by ZIGExN ⚫ Create value for all stakeholders, making efforts from those through business, such as updating society/industry by DX/cultivating SDGs engagement by media to those related to the increased satisfaction of employees. Relevant ZIGExN's materiali
Slide 62: Major SDG/ESG initiatives (1)
6. Reference materials Major SDG/ESG initiatives (1) Update society and industry with DX/ Fostering SDGs engagement through the media Equality of employment opportunity Special lecture by Representative Hirao Dates Service Contents “Entrepreneurship" class by Representative Hirao was held at June 14
Slide 63: Major SDG/ESG initiatives (2)
6. Reference materials Major SDG/ESG initiatives (2) Creation of local communities Initiatives in Kyoto Prefecture ① Initiatives in Oita Prefecture ① As an initiative utilizing the business model, the Oita The first organized game "3x3 WEST" by ZIGExN UPDATERS.EXE was Prefecture Migration Project wa
Slide 64: KPIs of Internet Media business
6. Reference materials KPIs of Internet Media business ⚫ Revenue and earnings from the mainstay Internet media business are broken down into the number of UUs, CVRs, and unit cost per conversion from the perspective of the ability to send customers (user side), and the number of customers and unit c
Slide 65: Trend in the number of employees at end of quarter
6. Reference materials Trend in the number of employees at end of quarter ⚫ The number of employees stood at 802 at the end of March 2023. While carefully selecting hiring positions, we will continue to strengthen our organization as our business expands. ⚫ Going forward, we plan to invest in human
Slide 66: Quarterly trend of expenses
6. Reference materials Quarterly trend of expenses ⚫ Advertising + sales promotion expenses remained stable as they were implemented while properly assessing the ROI. ⚫ Although personnel-related expenses are trending slightly upward due to an increase in personnel as a result of M&As, they have rem
Slide 67: Trend of balance sheets as at the end of quarters
6. Reference materials Trend of balance sheets as at the end of quarters Equity attributable to owners Goodwill-to-capital ratio ⚫ The percentage of equity attributable to the owners of the parent to total assets of the parent (the equity ratio in the JGAAP) stood at 52.9% 0.6x 52.9% and the goodwil
Slide 68: Financial Strategy: Shareholder Structure
6. Reference materials Financial Strategy: Shareholder Structure Individuals and others Foreign institutions and individuals Domestic institutions and individuals Other companies Management Treasury stock 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 0.5% 0.5% 3.0% 3.2% 3.2% 3.2% 6.6% 6.9% 50.9% 50.9% 51.0% 50
Slide 69: EPS & PER
6. Reference materials EPS & PER ⚫ EPS reached a record high due to share buybacks totaling approximately 1.4 billion yen, the solid growth of the performance of existing businesses and the contributions of new M&As . ⚫ Regarding FY3/24, the continued growth of EPS will be sought through the full-ye
Slide 70: Disclaimer
Disclaimer This briefing and briefing materials are based on information available as of the date of the announcement and the judgment of the company. We will assume no obligation for updating or changing the information if future events changed the details. In addition, please understand that actua