Litalico Inc. · TSE:7366
Litalico — Q1 FY2023 Earnings Presentation
35 slides from Litalico's earnings presentation, Aug 7, 2023
Slide 1: FY 2023 Q1 Earnings Presentation
1 Aug 7, 2023 FY 2023 Q1 Earnings Presentation LITALICO Inc. [ TSE Code: 7366 ] ©2023 LITALICO Inc.
Slide 2: Disclaimer
DISCLAIMER 2 The information, future strategies, forecasts, management targets, and other forward- looking projections relating to LITALICO Inc. (“the Company”) is based on information available to the Company as of the date hereof, and is based on reasonable assumptions that may include various ris
Slide 3: Growth Strategy
3 Growth Strategy ©2023 LITALICO Inc.
Slide 4: Creating an Obstacle-free Society
STRATEGY LITALICO Philosophy and Vision 4 The name “LITALICO” is a combination of two Japanese words: ”利他 / Lita” (altruism) and “利己 / Lico” (individualism). We aim to create an inclusive world where both are achieved interdependently. Creating an Obstacle-free Society Obstacles are created by and w
Slide 5: Rise in Mandated Employment Rate of Disabled Individuals
STRATEGY Rise in Mandated Employment Rate of Disabled Individuals 5 • Legally mandated employment rate for disabled individuals is 2.3% • Rate is scheduled for step-wise increase to 2.7% over the next few years Employment of Individuals with Disabilities Legally Mandated Employment Rate (%) (thousan
Slide 6: Business Environment
STRATEGY Business Environment 6 Number of Welfare Service Users and Provider Facilities (thousand) (thousand) 200 Welfare Service Facilities (left) 1,200 Welfare Service Users 1,000 150 800 100 600 400 50 200 0 0 2012 2013 2014 2015 2016 2017 2018 2019 Ref: MHLW ▶ Disability welfare service users an
Slide 7: Services Across All Life Stages of Persons with Disabilities
STRATEGY Services Across All Life Stages of Persons with Disabilities 7 • Services across all life stages provided through integration of BtoC facilities and the BtoB platform Education Vocation Lifestyle Retirement BtoC • Early detection and diagnosis • Social participation • Dwelling, medical care
Slide 8: LITALICO's Bigger Picture
STRATEGY LITALICO’s Bigger Picture 8 • Business expansion into adjacent industries that benefit from synergies with the disability industry Living Essentials Healthcare Disability Education Nursing Care ©2023 LITALICO Inc.
Slide 9: Consolidated Financial Results
9 Consolidated Financial Results ©2023 LITALICO Inc.
Slide 10: FY2023 Q1 Overview
RESULTS FY2023 Q1 Overview 10 • 7.1 bln yen in sales (+25% YoY), 600 mln yen in operating profit (-16% YoY); upfront fees CONSOLIDATED concentrated in Q1 compared to PY, but in line with expectations • 1 bln yen in gains appropriated from sale of equity method affiliate Olive Union, bringing net inc
Slide 11: Adoption of IFRS
RESULTS Adoption of IFRS 11 • Adopted IFRS reporting as of FY ending March 2024 to better accommodate an international stakeholder base. Impact of IFRS Adoption on Net Income for FY Ending Mar 2023 246 -91 13 1,812 Provision of Others 1,645 Accrued Paid Leave Goodwill JGAAP IFRS ©2023 LITALICO Inc.
Slide 12: Segment Income Statement
RESULTS Segment Income Statement 12 • New site launch preparations concentrated upfront fees in Q1, bringing Junior profits to -46% YoY, however, positive growth expected for full FY • Platform business profits increased approximately 52% YoY on back of marketing fortification IFRS (million yen) FY2
Slide 13: Consolidated P&L
RESULTS Consolidated P&L 13 • 1 bln yen in gains appropriated from sale of equity method affiliate Olive Union • Adoption of IFRS as of FY ending March 2024 IFRS (million yen) FY2022 Q1 FY2023 Q1 % YoY Sales 5,666 7,059 + 24.6% Operating Profit 705 593 - 16.0% Profit Attributable to 433 1,444 over 3
Slide 14: Financial Forecasts
14 Financial Forecasts ©2023 LITALICO Inc.
Slide 15: Consolidated Annual Forecast (IFRS)
FORECAST Consolidated Annual Forecast (IFRS) 15 [ Forecast Assumptions ] • Planned site launches: 16 LITALICO Works, 18 LITALICO Junior, 3 LITALICO Wonder • Majority of LITALICO Junior launches planned for H1, with cost concentration expected in Q1 • Marketing fortification for the Platform business
Slide 16: Financial Summary
FORECAST Financial Summary 16 • Planning for 11 consecutive years of sales and profit increase SALES OPERATING PROFIT (million yen) (million yen) 3,850 30,000 30,000 3,500 3,000 2,928 25,000 24,170 2,444 2,500 19,737 20,000 15,907 2,000 1,678 15,000 13,866 12,127 1,500 10,384 10,000 8,728 982 1,000
Slide 17: Number of LITALICO Service Provision Facilities
FORECAST Number of LITALICO Service Provision Facilities 17 • Total 389 sites planned for FY2023 450 389 400 338 350 87 300 83 262 250 231 210 43 159 186 39 200 173 35 128 140 26 23 113 150 116 100 21 93 92 86 20 84 100 73 57 18 60 43 143 39 13 30 127 50 5 22 106 15 15 82 92 4 66 74 53 59 34 37 38 4
Slide 18: Business Results
18 Business Results ©2023 LITALICO Inc.
Slide 19: LITALICO Segments
RESULTS LITALICO Segments 19 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others LITALICO Education Software ©2023 LITALICO Inc.
Slide 20: Vocational Welfare
RESULTS Vocational Welfare 20 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others LITALICO Education Software ©2023 LITALICO Inc.
Slide 21: Vocational Welfare
RESULTS Vocational Welfare 21 • One new site launch completed in Q1 • 128 facilities (LW: 121, HG: 7) • 616 job placements in Q1 (LW: 601, HG:15 ), HumanGrow seeing continued increases • 16 total launches planned for FY23, with Vocational rehabilitation for individuals with disabilities expected inc
Slide 22: Child Welfare
RESULTS Child Welfare 22 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others LITALICO Education Software ©2023 LITALICO Inc.
Slide 23: Child Welfare
RESULTS Child Welfare 23 • Two new sites launched in Q1 • 143 facilities (LJ: 130, U: 13) • Upward revision to 18 planned site launches from 17 for this FY due to smooth Children’s social skills development progress in hiring and training, with and education classes expected increase in pace going f
Slide 24: Platform
RESULTS Platform 24 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others LITALICO Education Software ©2023 LITALICO Inc.
Slide 25: Platform
RESULTS Platform 25 • Sales +24% YoY • Launched a matching platform for service users and social workers, and a SaaS DX support business for facility operators • Sales team fortification expected to accelerate contract acquisition in FY23 Platform Business Sales (million yen) 5,000 Information 4,100
Slide 26: Platform subscription contracts
RESULTS Platform 26 • Steady increase and pace acceleration in new contract acquisitions • Churn rate remains low (Billing Software) (Nursing Care Software) Platform Business Subscription Contracts Service Provision Expansion 30,000 Consolidation of 25,000 PlusOne Solutions Disability Welfare School
Slide 27: Current Product Line-up and Forward Strategy
RESULTS Current Product Line-up and Forward Strategy 27 • Current line-up services disability welfare facilities, schools & nurseries, and nursing care fields • Sequential expansion of product offerings with increasing added value • Contribution to industry-wide quality enhancement through various d
Slide 28: Others
RESULTS Others 28 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others LITALICO Education Software ©2023 LITALICO Inc.
Slide 29: Others
RESULTS Others 29 • Sales +91% YoY • Active M&A execution Sales Trend Development classes designed for children under 18 with special needs, open to all irrespective of disability 6,000 certification. 5,300 5,000 On-site and remote programming classes for children designed to develop creativity thro
Slide 30: Reference
30 Reference ©2023 LITALICO Inc.
Slide 31: LITALICO Business Environment (1)
REFERENCE LITALICO Business Environment (1) 31 • Number of individuals with disabilities continue to increase, with more children attending special needs classes in addition to normal school Children with Developmental Disorders Number of All Individuals with Disabilities Receiving Special Needs Sch
Slide 32: LITALICO Business Environment (2)
REFERENCE LITALICO Business Environment (2) 32 • Welfare services and peripheral industry (medical, nursing care, etc.) markets continues to rise Disability Welfare Service Budget Disability Welfare Service Users and Facilities Government spending on disability welfare services, excluded fees paid b
Slide 33: Publicly Funded Business Structure
REFERENCE Publicly Funded Business Structure 33 LITALICO Works Pricing Employment Per person; 20 person limit Transition Support 1st Yr: ¥8,100 /session Government 2nd Yr: ¥8,100~9,400 /session Up to 6 mths into Reimbursement: employment 3rd Yr: ¥11,000 /session 90% (Claimed by LITALICO on Per perso
Slide 34: Reimbursement Calculation Method
REFERENCE Reimbursement Calculation Method 34 Reimbursement Unit Price Evaluation Method Vocational Training Business Example Results Based Reimbursement Vocational Training Basic Reimbursement Scale C. Job Retention Rate D. Basic Reimbursement Units Specific KPIs (such as job retention rates) defin
Slide 35: LITALICO Annual Fact Sheet
REFERENCE LITALICO Annual Fact Sheet 35 Vocational Training Job Placements Child Welfare Service Users LITALICO Wonder Users • As of Jun 2023 : 616 • As of Jun 2023 : 8,879 • As of Jun 2023 : 4,762 Number of Employees by Segment Employee Benefits • LITALICO Works: 1,171 • Discontinuation of mandator