Slide 1: ROXX, Inc.
November 13, 2024 ROXX, Inc.
Slide 2: Disclaimer
Disclaimer • This material includes forward-looking statements. Forward-looking statements are predictions about the future that re ect management’s judgment based on currently available information as of the draft date of this material. As such, these forward- looking statements are subject to vari
Slide 3: Table of Contents
Table of Contents 1 Business Overview 2 Financial Highlights 3 FY2024 Q4 Results 4 FY2024 Full-year Results 5 Mid-term Target 6 FY2025 Full-year Forecast 7 APPENDIX 3
Slide 4: Today's Presenter
Today’s Presenter Representative Director and Chief Executive Officer Vice President and Chief Financial Officer Taro Nakajima George Yoshimoto, CPA Prior to Founding : Inspired by hard rock from the 70s & 80s 2013 : Joined MUFG Bank’s LBO Finance Team such as TheRollingStones, Led Zeppelin, Aerosmi
Slide 5: Business Overview
ROXx Business Overview
Slide 6: Business Overview
Business Overview ROXX aims to enhance the earning power of Japan’s bottom of the pyramid through full-time employment of the non- desk workers Trying to become Trying to hire full-time full-time Temporary Construction Worker Manufacturing Spot/Part-time Middle/High Restaurant School Graduates Nursi
Slide 7: Social Problem: Labor shortage
Social Problem Labor shortage is becoming a social problem as the workforce in Japan decreases, by 2040 non-desk workers segment is forecasted to suffer from a chronic labor shortage (1) (1) Labor Demand & Supply Simulation Potential Labor Shortage by Industry Approx. 8.5 7.3 1.1M Approx. 4.4 3.3 1.
Slide 8: Social Problem: Income earners below JPY 4.0M
Social Problem Majority of the income earners (25.9M) are below the income grade of JPY 4.0M/Year and remain non-core placements by the traditional recruitment agencies due to lack of work experience Income Earners by Income Grade Workforce by Education Workforce by Experience 5% 17% 21% 34% Income
Slide 9: Recruiting Platform for Non-desk Workers
Recruiting Platform for Non-desk Workers ※ Product Image for Illustration Purposes Only 9
Slide 10: Business Model Overview - Z Career
Business Model Overview - Z Career Z Career provides non-desk workers with a recruitment platform and unique in opening up the platform to partner recruitment agencies Registration Placement Job Seeker Hiring Company • Acquisition of Job Seeker by Recruitment Platform • Job Listing Free and Full ROX
Slide 11: Job Seeker
Job Seeker Job seekers are mainly in their teens with income grade of JPY2.0M/Year and has no degree or experience, seeking to land a stable full-time employment with better pay and schedules Other Contractual Worker Engineer 2% Temporary Worker Reason for Job Change Sales Assistant 4% B2B Sales 4%
Slide 12: Job Seeker - Key Characteristics
Job Seeker - Key Characteristics Job Seekers struggle to decide on the industry and job to pursue on their own and find the hurdle of submitting a CV/ Resume and successfully passing a job interview to be high Not Sure How to Unsuccessful at No Luxury in Choose a Job Screening/Interview Time and Cas
Slide 13: Hiring Company
Hiring Company Diverse placement portfolio with “Construction Management”, “Sales & Service” and “Clerical” being top three and occupation with a clear path for continuous progression though skill acquisition tend to be popular Top 5 Occupation Annual Hiring Volume Placement Share by Occupation by H
Slide 14: Partner Recruitment Agency
Partner Recruitment Agency More than 30 thousand Recruitment Agencies have a government permit. However, most of them are SMEs and struggle to gather both Job Seekers and Job Listings of Large Enterprises Number of Recruitment Agency Office Mostly Newly Established 31,986 SMEs (1~5 Employees) 32,000
Slide 15: Track Record of Z Career
Track Record of Z Career Solid track record of enhancing the earning power of the non-desk workers through full-time employment. The dollar amount may not be as big but the change it brings to the non-desk workers life is significant Average Wage Improvement User Case Study of Z Career Users Age 23
Slide 16: Financial Highlights
ROXx Financial Highlights
Slide 17: Financial Results Highlights
Financial Results Highlights High sales growth maintained and “Profitable” as forecasted FY2024 • Sales: JPY 1,053 Million (YoY:+73.8%) Q4 Results • Operating Profit: JPY 41Million • Net Profit: JPY 16 Million “In-line” with revised upward forecast as of FY2024 Q3 FY2024 • Sales: JPY 3,476 Million F
Slide 18: FY2024 Q4 Results
ROXx FY2024 Q4 Results
Slide 19: Summary of FY2024 Q4 Results
Summary of FY2024 Q4 Results FY2023 FY2024 YoY 4Q 4Q Sales 606 1,053 +73.8% Sales Growth Rate 69.3% 73.8% +4.5pt Cost of Sales 91 163 +79.1% Cost of Sales Margin 15.0% 15.6% +0.6pt Gross Pro t 515 889 +72.6% Gross Pro t Margin 85.0% 84.4% 0.6pt Selling, General and Administration 776 847 +9.1% Selli
Slide 20: Financials - Quarterly
Financials - Quarterly FY2024 Q4 sales has maintained a high growth rate of +73.8% YoY and operating profit has turned “Positive”, in line with our revised upward forecast. However, plan on continuing “Strategic Investments” for future sales growth Quarterly Sales 3,476 Quarterly Operating Profit &
Slide 21: Sales - Quarterly
Sales - Quarterly As a key driver for sales growth, performance revenue has leaped approximately 2.4x YoY and in the same period recurring revenue has steadily grown approximately 1.3x YoY Quarterly Sales 1,053 (JPY in Million) 918 Performance Revenue - Hiring Company Recurring Revenue - Partner Rec
Slide 22: Performance Revenue - Quarterly
Performance Revenue - Quarterly FY2024 Q4 has been a strong quarter despite the seasonality adverse. Take rate has risen +14.4% YoY and GMV has more than doubled in the past two fiscal year, with the expansion of sales from the in-house agent 0.5 Quarterly Performance Revenue 42.5% (JPY in Million)
Slide 23: Gross Profit - Quarterly
Gross Profit - Quarterly Stable high gross profit margin of roughly 85% as a result of a recruitment platform, unlike traditional recruitment agencies Quarterly Gross Profit and Gross Profit Margin (JPY in Million) 889 +72.6% 786 686 618 528 515 107.5% 107.5% 384 381 314 87.4% 85.0% 86.5% 86.9% 85.6
Slide 24: Selling, General and Administration - Quarterly
Selling, General and Administration - Quarterly Sales ratio of selling, general and administration has steadily improved, shifting towards profit-making phase Quarterly Selling, General and Administration (Sales Ratio) 158.0% 134.3% 129.2% 140.0% 126.5% 127.6% 128.0% 76.8% 114.7% 117.1% 52.7% 26.7%
Slide 25: FY2024 Full-year Results
ROXx FY2024 Full-year Results
Slide 26: Summary of FY2024 Full-year Results
Summary of FY2024 Full-year Results FY2023 FY2024 Forecast Forecast YoY Progress Full-year Full-year (As of Sept. 2024) Sales 2,075 3,476 +67.5% 3,525 98.6% Sales Growth Rate 71.0% 67.5% 3.5pt Cost of Sales 335 496 +48.1% 450 110.2% Cost of Sales Margin 16.1% 14.3% 1.8pt Gross Pro t 1,740 2,980 +71.
Slide 27: Financials - Annual
Financials - Annual Sales has grown YoY +67.5% with a progress rate of 98.6%, in-line with our revised upward forecast. In the same period operating loss margin has improved 22.4pt Annual Sales 3,476 Annual Operating Loss and Operating Loss Margin (JPY in Million) YoY (JPY in Million) Performance Re
Slide 28: Sales - Annual
Sales - Annual Accelerated sales growth from performance revenue with sales growth rate spiking up to +106.6% YoY and at the same time recurring revenue rising +37.8% YoY maintaining the steady growth. Annual Sales Main Factors for Change in Annual Sales (JPY in Million) 3,476 Segment FY23/9 FY24/9
Slide 29: Performance Revenue - Key Profit Indicators
Performance Revenue - Key Profit Indicators The number of registered job seeker continues to develop and as the market suffers from a chronic shortage of labor, we see gradual growth in the average commission & fee per placement Number of Registered Job Seekers Average Commission & Fee Per Placement
Slide 30: Selling, General and Administration - Annual
Selling, General and Administration - Annual Enhanced labor cost, advertisement cost and rent with business expansion. However, reduced sales ratio as a result of enhanced productivity. Annual SG&A Main Factors for Change in Annual SG&A (Sales Ratio) 119.8% Segment FY23/9 FY24/9 YoY Main Factors for
Slide 31: Number of Employees - Key Profit Indicators
Number of Employees - Key Profit Indicators Number of employee has drastically enhanced as a result of expansion in business operation. Corporate and product development team has also been reinforced to support scalability. Number of Employees Breakdown of Employees by Segment People 350 300 YoY 285
Slide 32: Mid-term Target
ROXx Mid-term Target
Slide 33: Positioning of Z Career
Positioning of Z Career Due to the difference in target hiring companies, job requirements and commissions, the emerging non-desk worker market segment is currently not served by the traditional recruitment agencies Percent within the Income Earners Traditional Hiring Company Job Commission Platform
Slide 34: Market Size of the Non-desk Worker Segment
Market Size of the Non-desk Worker Segment Non-desk worker segment of the recruitment market has more than four-times the market size of other segments and is currently under-penetrated with significant potential upside (2) Job Turnover Rate & Potential Upside by Market Segment Potential Up-side App
Slide 35: Growth - Job Seeker Acquisition
Growth - Job Seeker Acquisition Sufficient demand for placement is evident and job seeker acquisition is the key driver for growth. “Mass- advertisement” to as the core strategic investment to enhance awareness Strategic Market Investment Result Environment of Approx. JPY 0.5 Billion Service for non
Slide 36: Profitability - AI Scout
Profitability - AI (Artificial Intelligence) Scout From November 2024, AI Scout has been launched as an addition to the traditional process and aim to enhance employee productivity along with profitability Overview of AI Scout Pro t Structure Recruitment Agent AI Scout Traditional Hearing Job Hearin
Slide 37: Reference: Nature of Strategic Investment
Reference: Nature of Strategic Investment Strategic Investment to be carried out to raise awareness of Z Career under our discipline and positioned as a temporary measure Illustrative Image of Operating Profit Difference between COS and SG&A With Strategic Without Item Nature of Cost Cost of Sales I
Slide 38: Mid-term Target
Mid-term Target Non-desk worker segment of the recruitment market is a huge opportunity and mid-term target within range excluding sales contribution from mass-advertisement Illustrative Image of Future Revenue Growth of ROXX Revenue through Mid-term Target FY27/9 Direct Scout FY24/9 Sales (AI Scout
Slide 39: FY2025 Full-year Forecast
FY2024 Full-year Forecast 39
Slide 40: Summary of FY2025 Full-year Forecast
Summary of FY2025 Full-year Forecast FY2024 FY2025 YoY Full-year Full-year Forecast Sales 3,476 5,235 +50.6% Sales Growth Rate 67.5% 51.4% 16.1pt Cost of Sales 496 1,002 +102.0% Cost of Sales Margin 14.3% 19.1% +4.8pt Gross Pro t 2,980 4,232 +42.0% Gross Pro t Margin 85.7% 80.9% 4.8pt Selling, Gener
Slide 41: Assumptions for FY2025 Full-year Forecast
Assumptions for FY2025 Full-year Forecast Item Forecast Assumptions Sales • Does not include sales contribution from mass-advertisement Cost of Sales • Mainly personnel and outsourcing cost, research outsourcing cost • Mainly personnel and outsourcing cost, advertising and promotion cost and other c
Slide 42: Profitability - Relocation and Team Expansion
Profitability - Relocation and Team Expansion As a side effect of the relocation and team expansion to increase capacity for the mass-advertisement, temporary drop in employee productivity to be anticipated in the first half of FY2025 but anticipated to recover promptly Overview of Relocation & Team
Slide 43: Reference: Seasonality of Performance
Reference Seasonality of Performance In addition to HR industry seasonality, impact of “Strategic Investment” is anticipated to result in a comparatively larger loss in the first half (first and second quarters) of the fiscal year ending September 2025 Seasonality of Performance Q1 Q2 Q3 Q4 Impact o
Slide 44: Repost of Oct. 15th, 2024: Business Plan FAQs (Part One)
Repost of Oct. 15th, 2024: Business Plan FAQs from the Road Show (Part One) Business Plan FAQs from the Road Show Do you expect to turn into profitability for the fiscal year ending September 2025? For the fiscal year ending September 2025, ROXX, inc. (the “Company”) plans to launch mass advertiseme
Slide 45: Repost of Oct. 15th, 2024: Business Plan FAQs (Part Two)
Repost of Oct. 15th, 2024: Business Plan FAQs from the Road Show (Part Two) Business Plan FAQs from the Road Show When do you expect the effect of the investment in mass advertisements to arise? We expect the impact of our investment in mass advertisements to begin contributing to our business perfo
Slide 46: Repost of Nov. 5th, 2024: FAQs (October, 2024)
Repost of Nov. 5th, 2024: FAQs (October, 2024) FAQs (October, 2024) Please provide the context behind “Change Report (Transfers of a Large Number of Share Certificates, etc. in a Short Period).” filed by Mizuho Securities Co., Ltd. on October 29? Mizuho Securities Co., Ltd. (“Mizuho Securities”), th
Slide 47: Investment Highlights
ROXx Investment Highlights
Slide 48: Repost: Market Size of the Non-desk Worker Segment
Repost: Market Size of the Non-desk Worker Segment Non-desk worker segment of the recruitment market has more than four-times the market size of other segments and is currently under-penetrated with significant potential upside (2) Job Turnover Rate & Potential Upside by Market Segment Potential Up-
Slide 49: Reference: Recruitment Market Transition
Reference: Recruitment Market Transition Macro environment of shrinking workforce has shifted the recruitment budget from job boards to full commission based Z Career Full-time Job Listing on Job Boards Transition from Job Boards to Z Career 14,000 Due to shrinking workforce, marketing 12,000 13,038
Slide 50: Entry Barrier to Non-desk Worker Segment
Entry Barrier to Non-desk Worker Segment Leading recruitment platform for non-desk workers, tapping into the emerging market segment currently not served by the traditional recruitment agencies A Barrier to entry from Part-time Segment Recruitment Agent Direct Recruitment • Recruitment needs of full
Slide 51: Reference: Difference between High-class Segment
Reference: Difference between High-class Segment Job seeker behavior is completely different between the high-class segment and the non-desk worker segment making it difficult for a single service to rolled out cross segment High-class Segment Non-desk Worker Segment To Build upon the Current Indust
Slide 52: Reference: Difference between Part-time Segment
Reference: Difference between Part-time Segment Every industry has jobs with skill/legal requirements of a full-time worker and the workforce shortage outweighs that of a part-time worker Number of Entry-level Full-time Job Listings Workforce Shortage by Industry 2018 as 1.0x People in Million 3.5 5
Slide 53: Entry Barrier through AI-based Product Development
Entry Barrier through AI-based Product Development Generative AI-based products to streamline the recruitment process, improving profitability and building new revenue source Application Phase Selection Phase Traditional Preparing Paperwork Interview Final Process Targeting Scout Distribution Applic
Slide 54: Reference: Job Seeker/Placement Data
Reference: Job Seeker/Placement Data Platform data and generative AI utilized to streamline the recruitment process, for the job seeker, recruitment agent and hiring company Placement Rate Data Accumulation 1 High quality data of Job Seeker Improve Lead-time and and Placement Data Acceptance Rate Jo
Slide 55: Maintaining High Sales Growth
Maintaining High Sales Growth Disciplined investment through “Strategic Investment” to maintain high sales growth for the future Annual Sales 3,476 (JPY in Million) CAGR 65 2,075 (FY19/9-FY24/9) 1,214 886 580 280 FY19/9 FY20/9 FY21/9 FY22/9 FY23/9 FY24/9 (2) Financial gures are rounded down and KPIs
Slide 56: Social Impact
Social Impact Raising the standard of living of the non-desk worker has a direct social impact on the number of marriages and birth rates Environmental, Social, and Governance Social Impact • Climate Actions • Structural mismatch from declining birthrate, aging Environment • Greenhouse Gas Emissions