Visional, Inc. · TSE:4194
Visional — Investor Presentation (October 2022)
45 slides from Visional's investor presentation, October 2022
Slide 1: Our Business Model and Strategy
Our Business Model and Strategy October 2022 Visional, Inc.
Slide 2: Table of Contents
Table of Contents 1. Introduction to Visional Group 2. Creation of HCM Ecosystem(1): Accelerating Japan’s Workstyle Reform 2-1：BizReach 2-2：HRMOS 3. Investments for Long Term Growth 4. Message to Investors Appendix Note: (1) HCM=Human Capital Management 2
Slide 3: Introduction to Visional Group
1 Introduction to Visional Group 3
Slide 4: Group Mission
Group Mission Persistent Creation of New Possibilities. Our vision is to tap into the power of the internet to support the innovative progress of our world Manpower by persistently transforming social obstacles into new possibilities. Our mission is to achieve “continuous contribution to impact the
Slide 5: Our Framework for Starting New Businesses
Our Framework for Starting New Businesses Building on the proven set of principles and approaches that enabled our prior successes, we will continue to evaluate all potential areas of growth that will emerge from seismic shifts and technological innovation in Japan Guidelines for deciding on a marke
Slide 6: Growth Trajectory of Visional Group
Growth Trajectory of Visional Group (1) In addition to a solid track record of sustained growth in HR Tech, (Expense Management Visional is committed to incubating new businesses, accelerating Cloud) the digital transformation (DX) of various industry verticals (Risk Evaluation Cloud) (Attendance Ma
Slide 7: Visional Group Consolidated Financial Results
Visional Group Consolidated Financial Results Driven by the rebound hiring demand from COVID-19, and increased momentum by employers to actively hire mid-careers, Visional Group’s net sales for FY2022/7 full year grew 53.2%. Operating profit grew 251.3%, with operating profit margin of 18.9% YoY Gro
Slide 8: Creation of HCM Ecosystem: Accelerating Japan's Workstyle Reform
2 Creation of HCM Ecosystem: Accelerating Japan’s Workstyle Reform 8
Slide 9: BizReach
>> VISIONAL 2-1 BizReach
Slide 10: BizReach: Disruption of the Professional Recruitment Market
BizReach: Disruption of the Professional Recruitment Market Similar to the structural transformation of the retail market caused by e-commerce, BizReach pioneered the concept of “Direct Recruiting” by creating an online career networking platform, which raised the transparency and efficiency of the
Slide 11: Unique "Multi-Revenue Stream" Business Model
Unique “Multi-Revenue Stream” Business Model The financially attractive and unique business model targeting for professional job seekers(1) is the foundation behind the scalability of BizReach Access database Post job listing Send direct message to job seeker Direct Employer (HR/Recruiter) Post resu
Slide 12: Customer Expansion Potential for BizReach
Customer Expansion Potential for BizReach Customer base has expanded from Japan branch of global enterprises and startups to large Japanese enterprises, but still massive untapped wallet exists for company-wide introduction and new customers Illustration of Customer Base Expansion Trajectory Phase1
Slide 13: Competitive Strategy of BizReach
Competitive Strategy of BizReach Unique value proposition in professional Increase of Job Seekers recruiting as an online career platform working # of Scoutable with headhunters Job Seekers(1) MM Job Seekers 1.70+ Steady acquisition of scoutable job seekers Recruitment 0.62+ Agency through effective
Slide 14: BizReach Full Year Financial Results
BizReach Full Year Financial Results Strong revenue growth while scaling profitability YoY Growth BizReach Business’ Revenue(1)(2) Rate BizReach Business’ Adjusted Operating Profit JPY MM 59.6% before Corporate Expense Allocation and Margin(1)(2)(4) CAGR (3) +32.7% Adjusted operating profit margin b
Slide 15: Main KPIs - BizReach
Main KPIs - BizReach Strong customer base driven by hiring needs and increased job seekers. The increased number of Active Direct Employers indicates the strong demand for professionals by Direct Employers # of Registered Direct Employers(1) # of Scoutable Job Seekers(3) 21,100+ 1.70+ 17,100+ 1.38+
Slide 16: FY2022/7 BizReach Sales Breakdown
FY2022/7 BizReach Sales Breakdown Unique mix of recurring revenue(1) and performance revenue(2) as well as well-balanced customer breakdown of direct employers and headhunters have positioned BizReach to deliver solid and strong revenue growth FY22/7 BizReach Business Revenue Breakdown by FY22/7 Biz
Slide 17: HRMOS
>> VISIONAL 2-2 HRMOS 17
Slide 18: Our Vision of Creating an HCM Ecosystem
Our Vision of Creating an HCM Ecosystem Seamless integration of BizReach and HRMOS to create a unified, data-driven HCM Ecosystem where employee productivity is optimized, business operations are streamlined to guide our customers make smarter decisions Human Capital Management (HCM) Ecosystem Devel
Slide 19: HRMOS enables Strategic Talent Management
HRMOS enables Strategic Talent Management Data linkage between modules in the cloud-based HCM SaaS Solution enables optimization of different operational processes Employee Engagement Workflows DB survey ATS Performance Reporting 1 on 1 Recruiting process is visualized and analyzed real time Employe
Slide 20: HRMOS Full Year Financial Results
HRMOS Full Year Financial Results HRMOS performance is on track as we prioritize product development. HRMOS ATS drove net sales growth YoY Growth HRMOS Business’ Net Sales(1)(3) Rate HRMOS Business’ Adjusted Operating Profit JPY MM 26.2% before Corporate Expense Allocation(1)(2)(3) JPY MM 1,458 1,15
Slide 21: Main KPIs - HRMOS
Main KPIs - HRMOS ARR exceeded JPY 1.62Bn in FY22/7 (28.2% YoY growth) driven by solid growth of customer expansion. Churn rate, which was impacted by COVID-19, has continued to sustain pre COVID-19 level of 1.0% ARR(1)(2) ¥1.62Bn (YoY +28.2%) # of Unique Paying 1,193 (YoY +26.8%) JPY Bn 1.62 Custom
Slide 22: Investments for Long Term Growth
3 Investments for Long Term Growth 22
Slide 23: Global Comparison of Labor Market Liquidity and Japan's Issues
Global Comparison of Labor Market Liquidity and Japan’s Issues Japan has a high portion of employees with long tenure. Liquidity in the labor market is required to shift labor force to segments of higher labor demand Global Comparison of Employment Ratio By length Why Increased Labor Liquidity is Re
Slide 24: Further Opportunities Driven by Workstyle Reform
Further Opportunities Driven by Workstyle Reform Japanese recruitment market is undergoing a structural stage of expansion due to the ongoing changes in workstyle, which will increase liquidity in the Japanese labor market going forward Significant Room for Job Mobility in Japan Acceleration of Work
Slide 25: BizReach is Under-penetrated and Significant Growth Opportunities Exist
BizReach is Under-penetrated and Significant Growth Opportunities Exist While penetrating further into the professionals’ population, accelerate new client acquisitions and increase wallet share of existing clients to drive further top-line growth Growing # of “Scoutable” Job Seekers on BizReach Pot
Slide 26: Environment Surrounding Japan: Investments in People
Environment Surrounding Japan: Investments in People Working-age population is shrinking, whilst companies are decreasing investments in people Long Term Trends in Japan’s Working-Age International Comparison of Corporate Investments Population(1) in HR (excluding OJT) (% of GDP)(2) Unit: MM persons
Slide 27: Environment Surrounding Japan: Digital Competitiveness
Environment Surrounding Japan: Digital Competitiveness Also as seen in the world competitiveness rankings, Japan’s position is on a decreasing trend Japan’s International Competitiveness Ranking(1) Japan’s Digital Competitiveness Ranking(2) Rank Rank 20 17 17 22 19 23 23 23 23 24 26 31 27 27 34 th 2
Slide 28: Environment Surrounding Japan: Labor Productivity
Environment Surrounding Japan: Labor Productivity Priority investments mentioned in the “New Form of Capitalism” include investments in people, acceleration of DX for SMEs, strengthening cyber security, etc. Increasing labor productivity and digital competitiveness to solve social issues and achieve
Slide 29: Reposted: Investing in the Development of an HCM Ecosystem
Reposted: Investing in the Development of an HCM Ecosystem Seamless integration of BizReach and HRMOS to create a unified, data-driven HCM Ecosystem where employee productivity is optimized, business operations are streamlined to guide our customers make smarter decisions Human Capital Management (H
Slide 30: Building Businesses for Long Term Growth
Building Businesses for Long Term Growth Building businesses in potential areas of growth emerging from seismic shifts and technological innovation. Driving mid to long term growth whilst contributing to improving Japan’s productivity Issue１ Issue２ Issue３ Lack of capital liquidity Delay in security
Slide 31: Message to Shareholders and Investors
4 Message to Shareholders and Investors 31
Slide 32: Message to Shareholders and Investors
Message to Shareholders and Investors Persistent Creation of New Possibilities. We will tap into the power of the internet to support the digital transformation of the Japanese economy. We will continue to maximize mid-to-long term enterprise value by persistently transforming social obstacles into
Slide 33: Appendix
>> VISIONAL Appendix 33
Slide 34: Corporate Overview
Corporate Overview Company Name Visional, Inc. Address 2-15-1, Shibuya, Shibuya-ku, Tokyo CEO Representative Director and CEO Soichiro Minami # of Employees 1,528 people (As of July end, 2022) Share Capital JPY 6,662 MM (As of July end, 2022) Business Management support of group companies Overview S
Slide 35: Introduction to our Management Team
Introduction to our Management Team Soichiro Minami - Representative Director and CEO Shin Takeuchi - Director and CTO BizReach, Inc. / Chairman After graduating from the Department of Computer Science After graduating from Tufts University in the U.S. in 1999, he joined at University of Electro-Com
Slide 36: Introduction to our Management Team
Introduction to our Management Team Toru Shimada – Outside Director Naoko Harima – Outside Director (Audit & He joined Recruit Co., Ltd. in 1987. In 1989, he founded Supervisory Committee Member) Intelligence, Ltd. (currently Persol Career Co., Ltd.). After After graduating from the Faculty of Econo
Slide 37: Visional Group Structure
Visional Group Structure Current Group Structure (As of October 27, 2022) HR Tech Segment Incubation Segment ezSoft Co., IEYASU, Ltd. Inc. 100%(2) 80.1%(2) BizReach, M&A Succeed, Trabox, BizHint, Assured, Stanby, Inc. Inc. Inc. Inc. Inc. Inc. 100%(1) 100%(1) 100%(1) 100%(1) 100%(1) 40%(1)(3) Visiona
Slide 38: Risks Related to Our Business (1)
Risks Related to Our Business (1) Below are some of the risks associated with our business model and strategy. Please refer to the risk section in our disclosure for details. Risks Related to Our business Probability of manifestation and Actions to Mitigate Risks Our results of operations could be a
Slide 39: Risks Related to Our Business (2)
Risks Related to Our Business (2) Probability of manifestation and Risks Related to Our business Actions to Mitigate Risks Security breaches or unauthorized access or use of our or our customers’ data could adversely affect our reputation and expose us to claims from customers and penalties from aut
Slide 40: Future Investment Policy (including Use of Proceeds from IPO)
Future Investment Policy (including Use of Proceeds from IPO) We will continue to conduct active advertising and investment in talent for BizReach that continues to be in the expansion phase, active investment in product development for HRMOS to complete the HCM ecosystem, and investment in other ne
Slide 41: Key Financials: Profit and Loss Statement (1)
Key Financials: Profit and Loss Statement (1) JPY MM FY23/7 FY18/7 FY19/7 FY20/7 FY21/7 FY22/7 Forecast Revenue 15,700 21,492 25,879 28,698 43,954 56,000 YoY Growth (%) - 36.9% 20.4% 10.9% 53.2% 27.4% HR Tech Segment 15,543 21,175 24,914 27,052 41,791 53,275 YoY Growth (%) - 36.2% 17.7% 8.6% 54.5% 2
Slide 42: Adjusted Operating Profit before Corporate Expense Allocation
Adjusted Operating Profit before Corporate Expense Allocation Reconciliation of Adjusted Operating Profit before Adjusted Headcount Corporate Expense Allocation to Operating Income(1) by Function and Business (FY22/7)(5) JPY MM Adjusted % of subtotal for HR FY20/7 FY21/7 FY22/7 headcount Tech busine
Slide 43: Key Financials: Balance Sheet (1)
Key Financials: Balance Sheet (1) JPY MM JPY MM Liabilities and Assets FY18/7 FY19/7 FY20/7 FY21/7 FY22/7 FY18/7 FY19/7 FY20/7 FY21/7 FY22/7 Equity Current Assets 7,453 7,515 12,137 29,532 36,743 Current Liabilities 4,583 5,190 5,290 9,046 13,988 Cash and Cash 4,953 4,761 9,114 25,630 31,362 Account
Slide 44: Key Financials: Cash Flow Statement (1)
Key Financials: Cash Flow Statement (1) JPY MM FY18/7 FY19/7 FY20/7 FY21/7 FY22/7 Cash Flows from Operating Activities Pre-tax Profit 590 393 7,023 2,290 8,755 Depreciation and Amortization of Goodwill 118 231 547 670 807 Gain on Transfer of Business - - (4,799) - - Income Taxes Paid (0) (332) (2,96
Slide 45: Disclaimer
Disclaimer This document was prepared by Visional, Inc. (referred to as the “Company”, “Visional” or “we” herein) solely for informational purposes. This document does not constitute an offer to sell or a solicitation of an offer to buy any security of the Company in the United States, Japan or any