Visional, Inc. · TSE:4194
Visional — Investor Presentation (October 2024)
55 slides from Visional's investor presentation, October 2024
Slide 1: Our Business Model and Strategy
Our Business Model and Strategy October 2024 Visional, Inc.
Slide 2: Table of Contents
Table of Contents 1. Introduction to Visional Group 2. About BizReach 3. About HRMOS 4. Strategy for Long term Growth Appendix 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: Growth Trajectory of Visional Group
Growth Trajectory of Visional Group(1) In addition to a solid track record of sustained growth in HR Tech, (Payroll Cloud) Visional is committed to incubating new businesses, accelerating the digital transformation (DX) of various industry verticals (Talent Acquisition) (Expense Management Cloud) (C
Slide 6: Visional Group Consolidated Financial Results
Visional Group Consolidated Financial Results FY consolidated net sales grew 17.5% YoY with operating profit margin of 27.0% balancing growth investments and cost discipline. FY2025/7 consolidated net sales forecast is JPY 76.40Bn in light of uncertain market sentiment despite solid demand for profe
Slide 7: Visional Group at a Glance
Visional Group at a Glance We have accelerated business incubation in new industry verticals, supported by BizReach as a profit engine Service Overview (as of September 12, 2024) FY2024/7 Net Sales Breakdown by Segment and Business(2) HR matching platform for professionals Human capital management p
Slide 8: Message to Shareholders and Investors
Message to Shareholders and Investors (Committed since IPO) Persistent Creation of New Possibilities. We will tap into the power of the internet to support the digital transformation of our society. We will continue to maximize mid-to-long term enterprise value by persistently transforming social ob
Slide 9: About BizReach
>> VISIONAL About BizReach
Slide 10: BizReach Full Year Net Sales Results
BizReach Full Year Net Sales Results Capturing the momentum created by the rebound of hiring demand from COVID-19, strong growth in net sales achieved whilst realizing a maintained expansion of operating profit. FY2025/7 and normalized mid-term net sales growth rate target of 15% YoY, profit margin
Slide 11: 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(1), BizReach pioneered the concept of “Direct Recruiting” by creating an online career networking platform, which raised the transparency and efficiency of t
Slide 12: 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 13: Pricing Plan for BizReach
Pricing Plan for BizReach BizReach net sales consists of Recuring Revenue (access fee to BizReach platform) and Performance Revenue (fee received once placement is made). This allows financial stability during economic downturn Recurring Revenue(1)(2) Performance Revenue 15% of the candidate’s expec
Slide 14: FY2024/7 BizReach Net Sales Breakdown
FY2024/7 BizReach Net Sales Breakdown Unique mix of recurring revenue(1) and performance revenue(2) FY24/7 BizReach Business Revenue Breakdown by FY24/7 BizReach Business Revenue Breakdown Fee Type(3) by Direct Employers / Headhunters(3)(4) Performance Revenue Headhunters Recurring Revenue Direct Em
Slide 15: Stable BizReach Customer Base
Stable BizReach Customer Base Our net sales has grown supported by a stable customer base built over the years By Customer Acquisition Timing (Sales Order Amount)(1) Total sales amount from direct employers and headhunters • The left chart indicates sales order amount of each fiscal year from direct
Slide 16: Main KPIs - BizReach
Main KPIs - BizReach KPIs are growing steadily, building a strong customer base driven by penetration of direct recruiting and increasing job seekers # of Registered Direct Employers(1) # of Scoutable Job Seekers(3) 31,700+ 2.58+ 26,200+ 2.14+ 21,100+ 1.70+ 17,100+ 1.38+ 13,800+ 1.11+ 11,200+ 0.87+
Slide 17: BizReach AI: GPT Model Resume / CV Creation
BizReach AI: Announced in July 2023 “GPT Model Resume / CV Creation” for Job Seekers 40% increase in the number of scout messages received. Our proprietary logic using our accumulated know-how and data enables high quality resume / CV creation Automatic Resume / CV Creation(1) • Although changing jo
Slide 18: BizReach AI: GPT Model Job Opening / Posting Creation
BizReach AI: Announced in November 2023 “GPT Model Job Opening / Posting Creation” for Direct Employers Job opening / posting automatically proposed in as short as 30 seconds. Leveraging proprietary data and technology to maximize high quality matching opportunities Automatic Job Opening / Posting C
Slide 19: BizReach is Under-penetrated and Significant Growth Opportunities Exist
BizReach is Under-penetrated and Significant Growth Opportunities Exist Increased job mobility is the biggest growth driver. We will therefore increase our penetration within the professional population, and accelerate new client acquisitions and increase wallet share of existing clients Growing # o
Slide 20: 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 21: Current State of Workstyles in Japan and Further Growth Opportunities
Current State of Workstyles in Japan and Further Growth Opportunities 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
Slide 22: "Workstyle" of Japan vs Other Countries
“Workstyle” of Japan vs Other Countries Japan has a high portion of employees with long tenure. Other countries are shifting its labor force to segments of higher labor demand Global Comparison of Employment Ratio by Length Why Increased Labor Liquidity is Required of Service(1) Unit: % Mid-career h
Slide 23: Mobility of Professionals
Mobility of Professionals Although no significant changes observed in total full-time job changes pre/post COVID-19, labor liquidity within professionals has increased. We expect further expansion of mid-career recruiting as demand for professionals increases Job Change Ratio based on Income(1) FY20
Slide 24: Increasing Number of Prospective Job Changers That May Increase Mobility
Increasing Number of Prospective Job Changers That May Increase Mobility % of prospective job changers has been on the rise since COVID-19, and % of prospective job changers has been particularly rising among individuals earning an annual salary of JPY 7MM or more. Mobility may accelerate further in
Slide 25: About HRMOS
>> VISIONAL About HRMOS 25
Slide 26: Vision of Creating an HCM Ecosystem
Vision of Creating an HCM Ecosystem Seamless integration of BizReach and HRMOS to expand a unified, data driven HCM Ecosystem that enables investment and management of human capital to drive business competitiveness Survey Organization 1on1 Simulation Goal Setting / Applicant Performance 360° Feedba
Slide 27: HRMOS Full Year Net Sales Results
HRMOS Full Year Net Sales Results Net sales of each HRMOS services grew strongly whilst we continue with product development. FY2024/7 YoY growth appears particularly high due to the impact of M&A. FY2025/7 net sales forecast growth rate is 30.1% YoY. FY2025/7 losses expected to be at a similar leve
Slide 28: Main KPIs – HRMOS
Main KPIs – HRMOS (HRMOS ATS and HRMOS Talent Management) ARR reached JPY 2.77Bn (29.8% YoY growth) at the end of FY2024/7 driven by solid growth of customers. KPIs below represent HRMOS ATS and HRMOS Talent Management total ARR(1)(2) ¥2.77Bn (+29.8% YoY) # of Unique Paying 1,947 (+25.9% YoY) JPY Bn
Slide 29: Leveraging the Know-how from BizReach to Develop Our HCM Functions
Leveraging the Know-how from BizReach to Develop Our HCM Functions As the war for talent intensifies due to labor shortage, there is a growing need for companies to actively hire professionals, and to create an organization where hired personnel can stay and continue to play an active role. We will
Slide 30: BizReach AI: Generative AI Position Specs and Internal Resumes Creation
BizReach AI: Announced in January 2024 Generative AI “Position Specs Creation” and “Internal Resumes Creation” Generative AI technology and know-how acquired through BizReach also applied to HRMOS. The goal is to make internal job openings visible and develop standard language for various skills. Pi
Slide 31: Strategy for Long Term Growth
4 Strategy for Long Term Growth 31
Slide 32: "Strengthening Human Capital" is a Top Management Concern
“Strengthening Human Capital” is a Top Management Concern Strengthening and applying human capital are top management issues by Japanese companies Management Concerns(1) Now (2023) In 3 years Strengthening human capital (hiring, training, and responding 48.9 46.4 to diversity) Increasing revenue 44.
Slide 33: Challenges for Human Capital Management
Challenges for Human Capital Management Strengthening and applying human capital is crucial in delivering company strategies. However, complexity is increasing as job mobility increases Market Trends HR Issues and Needs Number of required talents are increasing each year and Increasing number of can
Slide 34: The Future of Japan's "Workstyles"
The Future of Japan’s “Workstyles” Moving to an era where “each individual chooses their own career,” and “individual chooses the company to work.” Increased importance of human capital Companies to clarify skills required for each job description, clarify evaluation standards, and develop compensat
Slide 35: Our Vision of the Future of Human Capital Management (1)
Our Vision of the Future of Human Capital Management (1) Visional Group’s HCM data platform supports the execution of management strategy by utilizing HR data objectively analyzed from a statistical perspective and used for managing talent both internally and externally. The new HR strategy harnesse
Slide 36: Our Vision of the Future of Human Capital Management (2)
Our Vision of the Future of Human Capital Management (2) Human capital management should collect and analyze both real time data in the external recruitment market and employee data to be used in building internal HR strategies and recruiting Leveraging internal HR data for hiring Shift from disconn
Slide 37: Difficulty of Implementing a Robust Talent Management
Difficulty of Implementing a Robust Talent Management Either hire externally or hire talents through internal moves, the first step is to visualize position and candidate specifications. Yet, resource is limited and execution is not easy Company Individual (HR) (Employee) Real-time information of sk
Slide 38: Hiring Professionals Internally using "Internal BizReach" Concept
Reference: Hiring Professionals Internally using “Internal BizReach” Concept Develop internal resumes and position specifications using internal HR data to visualize talent and positions. Optimal matching from skillsets and experience. Activate the internal labor market using generative AI that sign
Slide 39: BizReach AI: Investment in Generative AI Technology
BizReach AI: Investment in Generative AI Technology We view technology investment as a source of competitive advantage. We rank as #1 in Japan in terms of the number of generative AI patent applications published in the past year Generative AI-Related Patents (Applications Published Examples of Gene
Slide 40: Capital Allocation to Increase Enterprise Value
Capital Allocation to Increase Enterprise Value To increase our enterprise value in the long term, whilst we commit to growth and profit expansion of BizReach, we will invest in other businesses and M&A. If opportunities that we believe will increase our enterprise value arises, we will prioritize i
Slide 41: Track Record of M&A for Sustainable Growth
Track Record of M&A for Sustainable Growth Proactively consider the use of M&A as means of accelerating the realization of sustainable long- term growth. Allocate appropriate resources whilst reviewing Visional Group’s business portfolio (3) (5) (6) (9) Acquisition of Reclog(2) (Logistics (IEAYSU bu
Slide 42: Our Framework for Building Businesses
Our Framework for Building 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 market MV
Slide 43: Other Business Investments: About Incubation Segment
Other Business Investments: About Incubation Segment 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 Issue 1 Issue 2 Issue 3 Lack of capital liquidity Del
Slide 44: Appendix
>> VISIONAL Appendix 44
Slide 45: Corporate Overview
Corporate Overview Company Name Visional, Inc. Address 2-15-1, Shibuya, Shibuya-ku, Tokyo CEO Representative Director and CEO Soichiro Minami Market Segment Tokyo Stock Exchange Prime Market # of Employees 1,705 people (As of July end, 2024) Share Capital JPY 6,503 MM (As of July end, 2024) Business
Slide 46: Introduction to our Management Team (1)
Introduction to our Management Team (1) Soichiro Minami - Representative Director and CEO Satoshi Murata - Director After graduating from Tufts University in the U.S. in 1999, he joined After graduating from the Faculty of Law at Aoyama Gakuin the Investment Banking Division of Morgan Stanley Japan
Slide 47: Introduction to our Management Team (2)
Introduction to our Management Team (2) Naoko Harima - Outside Director (Audit & Maiko Chihara - Outside Director (Audit & Supervisory Committee Member) Supervisory Committee Member) After graduating from the Faculty of Economics at Keio She graduated from the Faculty of Law at University of Univers
Slide 48: Visional Group Structure
Visional Group Structure Current Group Structure (As of July end, 2024) HR Tech Segment Incubation Segment ezSoft Co., IEYASU, Ltd. Inc. 100%(2) 80.1%(2) BizReach, M&A Succeed, Trabox, Assured, Stanby, Inc. Inc. Inc. Inc. Inc. 100%(1) 100%(1) 100%(1) 100%(1) 40%(1)(3) Visional, Inc. (Holding Company
Slide 49: 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 50: 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 51: Key Financials: Profit and Loss Statement (1)
Key Financials: Profit and Loss Statement (1) FY19/7 FY20/7 FY21/7 FY22/7 FY23/7 FY24/7 FY25/7 JPY MM (Forecast) Net Sales 21,492 25,879 28,698 43,954 56,273 66,146 76,400 YoY Growth (%) 36.9% 20.4% 10.9% 53.2% 28.0% 17.5% 15.5% HR Tech Segment 21,175 24,914 27,052 41,791 53,685 63,791 73,880 YoY Gr
Slide 52: Reconciliation: Adjusted Operating Profit before Corporate Expense Allocation
Reconciliation: Adjusted Operating Profit before Corporate Expense Allocation Reconciliation of Adjusted Operating Profit before Adjusted Headcount Corporate Expense Allocation to Operating Profit by Function and Business (FY24/7 4Q)(5) JPY MM FY24/7 FY23/7 FY22/7 FY21/7 Adjusted % of subtotal for H
Slide 53: Key Financials: Balance Sheet (1)
Key Financials: Balance Sheet (1) JPY MM JPY MM Liabilities and Assets FY19/7 FY20/7 FY21/7 FY22/7 FY23/7 FY24/7 FY19/7 FY20/7 FY21/7 FY22/7 FY23/7 FY24/7 Equity Current Assets 7,515 12,137 29,532 36,743 48,902 65,652 Current 5,190 5,290 9,046 13,988 16,328 21,869 Liabilities Cash and Cash 4,761 9,1
Slide 54: Key Financials: Cash Flow Statement (1)
Key Financials: Cash Flow Statement (1) JPY MM FY19/7 FY20/7 FY21/7 FY22/7 FY23/7 FY24/7 Cash Flows from Operating Activities Pre-tax Profit(1) 393 7,023 2,290 8,717 14,377 18,928 Depreciation and Amortization of Goodwill(1) 231 547 670 846 1,230 1,224 Gain on Transfer of Business - (4,799) - - - -
Slide 55: 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