Litalico Inc. · TSE:7366
Litalico — Q3 2022 Earnings Presentation
39 slides from Litalico's earnings presentation, Jan 30, 2023
Slide 1: FY 2022 Q3 Earnings Presentation
1 Jan 30, 2023 FY 2022 Q3 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: Agenda
AGENDA 3 Growth Strategy ………….………………….……….….…… 4 Consolidated Financial Results ……….…..…………...…. 11 Financial Forecasts ……………………….………………… 16 Business Results ….………………………………………… 20 References ….………………………………………………… 33 ©2023 LITALICO Inc.
Slide 4: Growth Strategy
4 Growth Strategy ©2023 LITALICO Inc.
Slide 5: LITALICO Philosophy and Vision
STRATEGY LITALICO Philosophy and Vision 5 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 withi
Slide 6: Business Environment: Welfare Service Users and Provider Facilities
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: Disability Welfare Sector Spend
WELFARE Disability Welfare Sector Spend 7 Avg. Annual Sales per Office +8% per year 23 million yen 3.5 trillion yen Number of Offices 150,000 Facilities Government and municipalities’ spend on the disability welfare service sector continues to increase. ©2023 LITALICO Inc. 7
Slide 8: Rise in Mandated Employment Rate of Disabled Individuals
STRATEGY Rise in Mandated Employment Rate of Disabled Individuals 8 • 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 9: LITALICO's Total Solution in the Disability Arena
STRATEGY LITALICO’s Total Solution in the Disability Arena 9 • BtoC: Provision and expansion of proprietary high quality services • BtoB: Commercialization and dissemination of proprietary services across entire industry • Competitive advantage within the disability welfare industry through support
Slide 10: LITALICO's Bigger Picture
STRATEGY LITALICO’s Bigger Picture 10 • Business expansion into adjacent industries that benefit from synergies with the disability industry Living Essentials Healthcare Disability Education Nursing Care ©2023 LITALICO Inc.
Slide 11: Parent and Group Companies
STRATEGY Parent and Group Companies 11 • Platform and general education businesses are held within the parent company, while publicly funded businesses are held within group companies LITALICO Inc. Parent Company LITALICO Partners Inc. LITALICO Life Inc. Other Group Companies Group Companies ©2023 L
Slide 12: Consolidated Financial Results
12 Consolidated Financial Results ©2023 LITALICO Inc.
Slide 13: FY2022 Q1-Q3 Consolidated and Segment Overview
RESULTS FY2022 Q1-Q3 Consolidated and Segment Overview 13 CONSOLIDATED • 17.5 bln yen in sales (+20% YoY), 2.2 bln yen in operating profit (+32% YoY) • Consolidation of nursing care day service company, nCS, marks full entry into nursing care • Forward looking investments continued despite COVID set
Slide 14: Consolidated P&L
RESULTS Consolidated P&L 14 • Profit increase even with aggressive investments • COVID induced decrease of approx. 30 million yen in sales and profits for Q3, totaling 120 million yen combined with impact from Q2. (million yen) FY2022 FY2021 % YoY Q1-Q3 Q1-Q3 Sales 17,472 14,567 + 19.9% Operating Pr
Slide 15: Segment Income Statement
RESULTS Segment Income Statement 15 • Sales and profit increased across all segments • Platform business profits increased approximately 6x YoY (million yen) FY2022 FY2021 % YoY Q1-Q3 Q1-Q3 Sales 7,091 6,372 + 11.3% LITALICO Works Profit 2,614 2,531 + 3.3% Sales 5,823 4,979 + 16.9% LITALICO Junior P
Slide 16: M&A Consolidation of Nursing Care Day Service Company nCS
M&A Consolidation of Nursing Care Day Service Company nCS 16 Disability Disability Prevention Independence Support Terminal Care Light Disability & Severity Prevention Elderly Home Care Nursing Facilities: 100 Light ~ Moderate/Severe Disability Facilities: 1 Care Facilities: 12 COMPANY • Sales：appro
Slide 17: Financial Forecasts
17 Financial Forecasts ©2023 LITALICO Inc.
Slide 18: Consolidated Annual Forecast
FORECAST Consolidated Annual Forecast 18 • Profitability to increase along with continued aggressive investments in platform business • 800 ml yen sales increase from Fukushi-soft pricing changes and PlusOne Solutions M&A • 14 LITALICO Works and 15 LITALICO Junior planned new facility launches • LIT
Slide 19: Financial Summary
FORECAST Financial Summary 19 • Planning for ten consecutive years of sales and profit increase Sales Operating Profit (million yen) (million yen) 3,500 25,000 24,000 LITALICO Works 3,100 LITALICO Junior 3,000 LITALICO Platform 19,737 20,000 Others 2,500 2,444 15,907 15,000 13,866 2,000 1,678 12,127
Slide 20: Number of LITALICO Service Provision Facilities
FORECAST Number of LITALICO Service Provision Facilities 20 • Total 293 sites planned for FY2022 300 LITALICO Works 293 19 LITALICO Junior (Welfare) 261 LITALICO Junior (Private) 26 250 17 LITALICO Wonder 231 26 17 210 200 186 17 22 173 12 18 128 9 14 112 14 150 140 100 5 116 16 93 4 86 16 84 100 92
Slide 21: Business Results
21 Business Results ©2023 LITALICO Inc.
Slide 22: LITALICO Segments
RESULTS LITALICO Segments 22 LITALICO Works LITALICO Junior LITALICO Platform Others ©2023 LITALICO Inc.
Slide 23: LITALICO Works
RESULTS LITALICO Works 23 LITALICO Works LITALICO Junior LITALICO Platform Others ©2023 LITALICO Inc.
Slide 24: LITALICO Works (Vocational Rehabilitation Welfare)
RESULTS LITALICO Works (Vocational Rehabilitation Welfare) 24 • 116 facilities (+10 vs PFYend) • 14 total launches planned for FY22 • Internal structural fortification planned to support expansion pace Vocational rehabilitation for individuals with disabilities LITALICO Works Sales LITALICO Works Fa
Slide 25: LITALICO Works: Placements and Automated Planning System
RESULTS LITALICO Works (Vocational Rehabilitation Welfare) 25 • 13,288 cumulative placements, 91.3% 6 months retention rate • Job placements largely increased to 1,408 service users (+11.9% YoY) • Continued technology utility such as VR and automated support systems Employment Placement Track Record
Slide 26: LITALICO Junior
RESULTS LITALICO Junior 26 LITALICO Works LITALICO Junior LITALICO Platform Others ©2023 LITALICO Inc.
Slide 27: LITALICO Junior (Welfare)
RESULTS LITALICO Junior (Welfare) 27 • 128 facilities (+15 vs PFYend) • Sales and profits increase due to healthy pace of facility launches • 15 total launches planned for FY2022, Children’s social skills development with expected increase in pace and education classes LITALICO Junior Sales LITALICO
Slide 28: LITALICO Platform
RESULTS LITALICO Platform 28 LITALICO Works LITALICO Junior LITALICO Platform Others ©2023 LITALICO Inc.
Slide 29: LITALICO Platform: Sales +78% YoY
RESULTS LITALICO Platform 29 • Sales +78% YoY SALES • Sales and profit increased while hiring sales 3,300 (million yen) and engineer staff; entering growth phase 3,000 • Launched a matching platform for service users and social workers, and a SaaS DX 2,000 2325 support business for institutions 1839
Slide 30: LITALICO Platform: Steady increase in service contracts
RESULTS LITALICO Platform 30 • Steady increase in service contracts • Fukushi-soft user drop-off remains low since pricing changes • Further fortification of nursing care SaaS business through consolidation of PlusOne Solutions LITALICO Platform Business Subscription Contracts Service Provision Expa
Slide 31: Current Product Line-up and Forward Strategy
RESULTS Current Product Line-up and Forward Strategy 31 • Current line-up services disability welfare facilities, schools & nurseries, and nursing care fields • Service pricing increased in Apr 2022 in line with functional product upgrades • Sequential expansion of product offerings with increasing
Slide 32: Others
RESULTS Others 32 LITALICO Works LITALICO Junior LITALICO Platform Others ©2023 LITALICO Inc.
Slide 33: Others: Sales +17% YoY
RESULTS Others 33 • Sales +17% YoY • Services in Others segment offers support that is unhindered by current welfare structures Development classes designed for Sales Trend children under 18 with special 3,500 needs, open to all irrespective of 3,300 disability certification. 3,000 2,500 2611 On-sit
Slide 34: Reference
34 Reference ©2023 LITALICO Inc.
Slide 35: LITALICO Business Environment (1)
REFERENCE LITALICO Business Environment (1) 35 • 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 36: LITALICO Business Environment (2)
REFERENCE LITALICO Business Environment (2) 36 • 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 37: Publicly Funded Business Structure
REFERENCE Publicly Funded Business Structure 37 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 38: Reimbursement Points Table
REFERENCE Reimbursement Points Table 38 • Points are revised every three years; most recent update occurred in Apr 2021 • 1 unit = approx. 10 yen Employment Transition Support Employment Retention Support Reimbursement Points per Session Reimbursement Points per Session Based on 6 month retention of
Slide 39: LITALICO Annual Fact Sheet
REFERENCE LITALICO Annual Fact Sheet 39 LITALICO Works Assisted LITALICO Number of LITALICO Ratio of Employment Placements Employees by Segment Female Employees • As of Dec 2022 : 1,408 • LITALICO Works: 1,037 • Firm-wide: 65.1% • Historical cumulative: 13,288 • LITALICO Junior: 1,336 • Middle and U