Projectholdings.inc. · TSE:9246
Projectholdings.inc — ProjectCompany — Q3 2023 Earnings Presentation
45 slides from Projectholdings.inc's earnings presentation, Nov 14, 2023
Slide 1: Financial Results for the First Three Quarters of FY2023
Financial Results for the First Three Quarters of the Fiscal Year Ending December 31, 2023 ProjectCompany, Inc. [TSE Growth: 9246] November 14, 2023
Slide 2: Executive Summary
Executive Summary Q3 FY2023 Financial Results Net Sales Operating Profit EBITDA*1 EBITDA Margin ¥1,616 million ¥246 million ¥295 million 18.3% (+44.3% YoY) (-12.8% YoY) (-2.6% YoY) On a year-on-year basis, despite an increase in net sales, operating profit decreased due to the impact of the larger
Slide 3: Special Remarks
Special Remarks (i) How the Former Executive Vice President Resigned the Company Handling of the matter by the Company As announced in the "Report on the Change (Resignation) of Representative Director and Director” (Japanese) dated September 13, 2023, we are investigating the facts and examining
Slide 4: Contents
Contents 1. Group Overview p. 5 2. Q3 FY2023 Financial Results p. 12 3. Recognized Issues and Countermeasures for the Digital Transformation Business p. 22 Appendix (i) Outline of Digital Transformation Business p. 26 Appendix (ii) Future Growth Strategies p. 34 Appendix (iii) Other Reference Inform
Slide 5: 1. Group Overview
1. Group Overview ProjectCompany 5
Slide 6: Group Management Philosophy
Group Management Philosophy Group Management Philosophy Creating a Project-based Society The Japanese economy remains stagnant and is feared to keep declining going forward if no change is made to the situation. We believe that the only way for the Japanese economy and, by extension, the Japanese so
Slide 7: Company History
Company History January 2024: Transition to a pure holding company structure and office relocation (planned) Period of multi-faceted growth through integrated group management July 2023: Merged ProjectPartners Co., Inc. into ProjectCompany, Inc. in an absorption-type merger April 2023: Consolidated
Slide 8: Business Domains of the Group
Business Domains of the Group In FY2022, attempted an integrated group management system through M&As and spin-offs, resulting in a generally favorable assessment. Over the medium to long term, aim for multi-faceted growth through an integrated group management system, with an eye on expanding b
Slide 9: Business Structure Diagram
Business Structure Diagram 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 Corporate planning and Service support Cooperatin
Slide 10: 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 Supporting more than 600 DX projects a year, transcosmos provides transact
Slide 11: Situation of Employees
Situation of Employees The number of employees was 241 as of October 2, 2023, decreasing slightly from Q2. In the current fiscal year, a focus is being made on fostering employees who have most recently joined the Company. Trends in the number of employees (people) Composition of employees *Starti
Slide 12: 2. Q3 FY2023 Financial Results
2. Q3 FY2023 Financial Results 12
Slide 13: Quarterly Consolidated Financial Results - Net Sales
Quarterly Consolidated Financial Results - Net Sales Achieved net sales of 1,616 million in Q3 FY2023, down 1.1% QoQ and up 44.3% YoY. Net sales of the Digital transformation business totaled 1,167 million, up 2.5% QoQ and up 10.0% YoY. Net sales (million yen) YoY +44.3% 1,616 Portion equivalent
Slide 14: Quarterly Consolidated Financial Results - Operating Profit & EBITDA
Quarterly Consolidated Financial Results - Operating Profit & EBITDA Operating profit and EBITDA resulted in a QoQ increase mainly due to the temporary completion of investments in human resources, centered on hiring expenses. Operating profit (million yen) EBITDA*(million yen) Operating profit EB
Slide 15: Results by Segment - Net Sales
Results by Segment - Net Sales Net sales by segment are as follows. Digital transformation business DX x Technology business DX x HR business *The aggregation standards for marketing services were partially changed *The business was consolidated in Q4 FY2022. *The business was consolidated in Q3 F
Slide 16: Results by Segment - Cost of Sales & Gross Profit
Results by Segment - Cost of Sales & Gross Profit In the Digital transformation business, gross profit margin decreased slightly QoQ, mainly due to an increase in personnel expenses and outsourcing expenses. In the DX x Technology business, gross profit decreased due to lower sales resulting fro
Slide 17: Breakdown of SG&A Expenses
Breakdown of SG&A Expenses While hiring expenses significantly decreased QoQ as 2024 graduates’ acceptance of job offers peaked out for the moment, rent expenses increased in line with the use of the temporary office in preparation for the head office relocation. Other SG&A expenses also decreas
Slide 18: Digital Transformation Business｜Number of Clients & Net Sales per Client
Digital Transformation Business｜Number of Clients & Net Sales per Client Expansion in the number of clients was slowed as priority was placed on reinforcing the organization, but net sales per client grew steadily. Number of clients (by period of continued orders) Net sales per client (million yen
Slide 19: Digital Transformation Business｜Number of Employees & Net Sales per Employee
Digital Transformation Business Business｜Number of Employees & Net Sales per Employee While the average number of employees during the period decreased due to reduced hiring in line with the focus on fostering existing employees, net sales per employee increased. Average number of employees during
Slide 20: DX x Technology Business｜Overview of Operations
DX x Technology Business｜Overview of Operations Gross profit margin of cuatro technologies, Inc. (currently ProjectTechnologies, Inc.), which joined the Group in October 2022, improved against the backdrop of a shift to a direct commerce format in practice due to winning of clients via ProjectComp
Slide 21: DX x HR Business｜Overview of Operations
DX x HR Business｜Overview of Operations Steady growth in business performance has been seen at uloqo Co., Ltd. (currently ProjectHRsolutions, Inc.), which joined the Group in April 2022, as it utilized the Group’s know-how with a focus on organization building. In April 2023, the Company acquire
Slide 22: 3. Recognized Challenges and Countermeasures for the Digital Transformation Business
3. Recognized Challenges and Countermeasures for the Digital Transformation Business 22
Slide 23: Recognized Challenges (1): Delay in Training and Fostering New Graduate Employees
Recognized Challenges (1): Delay in Training and Fostering New Graduate Employees and Other Members Since Q2, managers have spent more man-hours than initially anticipated for training and fostering 2023 graduate employees to make them ready for work. Focus has been placed on their fostering to
Slide 24: Recognized Challenges (2): Shortage of Managers
Recognized Challenges (2): Shortage of Managers and Candidates for Managers Who Can Foster Members After reviewing requirements for managers in Q2 from the viewpoint of fostering members, efforts were made in Q3 to build an organization structure based on the new requirements for managers and verb
Slide 25: Recognized Challenges (3): Upward Trend of Employee Attrition Rate
Recognized Challenges (3): Upward Trend of Employee Attrition Rate Mainly due to the heavier workload from the man-hours spent fostering members in line with the organizational expansion in Q1 and Q2, performance growth has slowed down while the attrition rate is on the rise. While close attenti
Slide 26: Appendix (i) Outline of Digital Transformation Business
Appendix (i) Outline of Digital Transformation Business 26
Slide 27: Feature (1) ｜One-stop Digital Transformation (DX) Advisory System
Feature (1) ｜One-stop Digital Transformation (DX) Advisory System Provide a comprehensive one-stop service that includes user interface web improvement support, marketing support and business support including new business development. Convenient access to all services customers need in one plac
Slide 28: 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. UIscope is highly recognized in the UI/UX field, with inbound* orders accounti
Slide 29: 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 accounting for about 80% of our total net sales. We do business with a wide range of major companies in IT, communications, finance and other industrie
Slide 30: Feature (4)｜Accumulation of Long-term Customers through Recurring-type Business Model
Feature (4)｜Accumulation of Long-term Customers through Recurring-type Business Model We recognize that consulting companies generally have a sales structure that emphasizes spot and flow projects. We have bolstered net sales by building a recurring-type business model that is predicated on cont
Slide 31: Case Introduction ｜ Consulting Services (New Business Development)
Case Introduction ｜ Consulting Services (New Business Development) Business Strategy Planning provides support for new business development projects, such as considering business models and formulating business plans. We develop and manage the overall schedule until the service release and take
Slide 32: Case Introduction ｜ Marketing Services
Case Introduction ｜ Marketing Services (Marketing Strategy Planning to Implementation Support) In planning a marketing strategy, it is important to clarify the purpose of marketing by defining specific targets. Furthermore, the value of our marketing support is not only in strategy planning but
Slide 33: Case Introduction｜UI/UX Services (UI research)
Case Introduction｜UI/UX Services (UI research) In UI research, we collect unfiltered feedback from target users regarding the usability of applications and websites. By identifying bottlenecks that cannot be fully understood through quantitative data alone, we develop effective proposals for imp
Slide 34: Appendix (ii) Future Growth Strategies
Appendix (ii) Future Growth Strategies 34
Slide 35: Progress Towards the Medium-term Target "TARGET100"
Progress Towards the Medium-term Target "TARGET100" With regard to the medium-term goal "TARGET100," announced in February 2022, which is to achieve 10 billion yen in net sales and 2 billion yen in operating profit in FY2025, we have worked to achieve net sales of 10 billion yen even one year ahea
Slide 36: Policies to Achieve Performance Targets
Policies to Achieve Performance Targets Aiming to achieve “TARGET 100” with net sales of 10 billion yen for FY2025, strive to achieve both (1) growth in existing businesses and (2) non-sequential growth through M&A. Aiming to achieve “TARGET 100”with net sales of 10 billion yen for FY2025 Policy A
Slide 37: (1) Organic Growth Strategies ｜Manager Development
(1) Organic Growth Strategies ｜Manager Development Develop managers in line with sales targets and drive growth. In order to maximize the use of human resources within the organization, we need to expand the number of employees in the member class through increased recruitment of staff and enhan
Slide 38: (1) Organic Growth Strategies ｜ Expansion of Joint Participation Partners
(1) Organic Growth Strategies ｜ Expansion of Joint Participation Partners By collaborating on projects with partners and providing project management know-how and other benefits to such partners, we will expand the number of partners and establish a system capable of flexibly receiving orders. T
Slide 39: (2) M&A Strategies ｜Investment Policy and PMI
(2) M&A Strategies ｜Investment Policy and PMI For M&A, actively consider projects with potential synergies with an EV/EBITDA ratio of around 5 times, while continuously sourcing projects. After executing M&A, achieve PMI results that exceed amortization of goodwill through knowledge injection an
Slide 40: Appendix (iii) Other Reference Information
Appendix (iii) Other Reference Information 40
Slide 41: Company Overview
Company Overview Company ProjectCompany, Inc. Name Head Office Izumi Garden Tower 39F, 1-6-1 Roppongi, Minato-ku, Tokyo Location Establishment January 2016 Share Capital 1,016,366 thousand yen (as of September 30, 2023) Representative Director and President, Yunosuke Doi Full-time Corporate Auditor
Slide 42: Financial Data
Financial Data Fiscal period 1st period 2nd period 3rd period 4th period 5th period 6th period 7th period 8th period December December December December December December December Q3 FY2023 Fiscal year end 2016 2017 2018 2017 2020 2021 2020 (cumulative) Net sales (thousand yen) 40,533 132,676 391,44
Slide 43: Financial Strategy
Financial Strategy Aim for "Profitable Hypergrowth" through sustainable EBITDA growth leveraging on existing businesses and financing capacity backed by a strong financial base, and by actively investing in businesses and pursuing M&As for growth. Current situation recognition Financial strategy b
Slide 44: Initiatives Related to Environmental, Social and Governance Issues
Initiatives Related to Environmental, Social and Governance Issues Actively addressing ESG issues and aiming for medium- to long-term increases in our corporate value Relocation to a new environmentally-friendly office E nvironment ✓ Office relocation to Azabudai Hills, which boasts about 2.4ha of
Slide 45: Points to Note
Points to Note Information in this document other than information on the Company is derived from publicly available information, and the Company makes no representations or warranties regarding its authenticity, accuracy or completeness. This document also refers to the future prospects of the Comp