Slide 1: Financial Results for the First Two Quarters of FY Ending December 31, 2023
Financial Results for the First Two Quarters of the Fiscal Year Ending December 31, 2023 ProjectCompany, Inc. [TSE Growth: 9246] August 14, 2023
Slide 2: Executive Summary
Executive Summary Q2 FY2023 Financial Results Net Sales Operating Profit EBITDA *1 EBITDA Margin ¥1,634 million ¥193 million ¥245 million 15.0% (+77.8% YoY) (+5.0% YoY) (+28.5% YoY) Net sales and operating profit increased on a year-on-year basis, and EBITDA excluding the impact of non-cash expens
Slide 3: Contents
Contents 1. Group Overview p. 4 2. Q2 FY2023 Financial Results p. 11 3. Revisions to Earnings Forecast p. 21 Appendix (i) Outline of Digital Transformation Business p. 27 Appendix (ii) Future Growth Strategies p. 35 Appendix (iii) Other Reference Information p. 41 3
Slide 4: 1. Group Overview
1. Group Overview coProjectCompany 4
Slide 5: 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 6: Company History
Company History Period of multi-faceted growth through July 2023: Merged ProjectPartners Co., Inc. into ProjectCompany, Inc. integrated group management in an absorption-type merger April 2023: Consolidated Dr.KENKO KEIEI Inc. and artwize inc. Into the Group October 2022: Consolidated cuatro technol
Slide 7: 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. Going forward, aim for multi-faceted growth through an integrated group management system, with an eye on expanding business domains
Slide 8: 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 Service support Corporate planning and Cooperati
Slide 9: 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 transactions through Supporting more than 600 DX projects a year, transcos
Slide 10: Situation of Employees
Situation of Employees The number of employees was 247 as of July 3, 2023, remaining flat from the previous quarter. Focus is placed on training new graduate employees to make them ready for work. Trends in the Number of Employees Composition of Employees 250 *Starting with Q1 FY2023, the number o
Slide 11: 2. Q2 FY2023 Financial Results
2. Q2 FY2023 Financial Results 11
Slide 12: Quarterly Consolidated Financial Results - Net Sales
Quarterly Consolidated Financial Results - Net Sales Achieved net sales of ¥1,634 million in Q2 FY2023, up 9.4% QoQ and up 77.8% YoY. Net sales of the Digital transformation business alone totaled ¥1,138 million, down 4.8% QoQ and up 23.8% YoY. Net sales (million yen) YoY +77.8% 1,634 1,494 142
Slide 13: Quarterly Consolidated Financial Results - Operating Profit & EBITDA
Quarterly Consolidated Financial Results - Operating Profit & EBITDA Operating profit resulted in a QoQ decrease. EBITDA excluding the impact of non-cash expenses amounted to ¥245 million. Operating profit (million yen) EBITDA* (million yen) Operatin profit EBITDA Operating profit margin EBITDA ma
Slide 14: 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 *The business was consolidated in Q4 FY2022. *The business was consolidated in Q3 FY2022. c
Slide 15: Results by Segment - Cost of Sales & Gross Profit
Results by Segment - Cost of Sales & Gross Profit Cost of sales and gross profit by segment are as follows. In the Digital transformation business and DX x Technology business, gross profit margin rose in line with the increase in the number of regular employees, etc. Digital transformation busine
Slide 16: Breakdown of SG&A Expenses
Breakdown of SG&A Expenses The breakdown of selling, general and administrative expenses (SG&A expenses) is as follows. On a quarter-on- quarter basis, hiring expenses and rent expenses increased significantly.. SG&A expenses to Results (million yen) net sales QoQ Description Personnel expenses /
Slide 17: Digital Transformation Business: Number of Clients & Net Sales per Client
Digital Transformation Business｜Number of Clients & Net Sales per Client The number of clients and net sales per client grew compared to Q1 FY2022. Number of clients (by period of continued orders) Net sales per client (million yen) *Figures indicate the number of clients with which the Company ha
Slide 18: Digital Transformation Business: Number of Employees & Net Sales per Employee
Digital Transformation Business｜Number of Employees & Net Sales per Employee The number of employees increased in line with new graduate employees joining the Company in April, while net sales per employee and the partner ratio dropped significantly. Average number of employees during period (peop
Slide 19: 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 20: DX x HR Business: Overview of Operations
DX x HR Business｜Overview of Operations Steady growth in business performance was 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 acquired sha
Slide 21: 3. Revisions to Earnings Forecast
3. Revisions to Earnings Forecast 21
Slide 22: Overview of Revisions to Earnings Forecasts
Overview of Revisions to Earnings Forecasts Made downward revisions to forecasts of net sales and profits mainly in the Digital transformation business. Forecast at Latest Major backgrounds FY2022 beginning of Unit: million yen period revisions of the revisions (actual) Net sales 4,352 7,470 6,420
Slide 23: Background (1): Tightening Requirements for Managers
Background (1) | Tightening Requirements for Managers With many new employees joining the Company in April, differences in the ability to foster members have become apparent among managers. Added the organization building aspects to the requirements for managers, and reviewed the hiring plan by
Slide 24: Background (2): Focus on Training New Graduate Employees
Background (2) | Focus on Training New Graduate Employees to Make Them Ready for Work In light of the background on the previous page, managers have spent more man-hours than initially anticipated for training 2023 graduate employees to make them ready for work. Plan to curb the winning of proje
Slide 25: Initiatives for the Years Ahead
Initiatives for the Years Ahead In the short term, plan to partly entrust fostering of members to those who used to be managers by the end of 2023 as a target, and continuously monitor the situation based on the ratio of 2023 new graduate employees by charge rank (see p.24). As a medium- to long
Slide 26: Investment Plan for Securing Human Resources
Investment Plan for Securing Human Resources Assume the following hiring and rent expenses to be recorded in the medium to long term as investments to secure human resources. Revise the budget plan for hiring expenses for the current fiscal year in line with the revision to the personnel plan. <
Slide 27: Appendix (i) Overview of Digital Transformation Business
Appendix (i) Overview of Digital Transformation Business 27
Slide 28: Feature (1): One-stop Digital Transformation 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 pla
Slide 29: 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 account
Slide 30: 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 industr
Slide 31: Feature (4): Accumulation of Long-term Customers through Stock-type Model
Feature (4) ｜ Accumulation of Long-term Customers through Stock-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 stock-type business model that is predicated on continued
Slide 32: Case Introduction: Consulting Services
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 c
Slide 33: 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 34: Case Introduction: UI/UX Services
Case Introduction ｜ UI/UX Services (UI research) In UI research, we collect unfiltered opinions 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 i
Slide 35: Appendix (ii) Future Growth Strategies
Appendix (ii) Future Growth Strategies 35
Slide 36: 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 37: 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
Slide 38: 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 enha
Slide 39: 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 40: 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 a
Slide 41: Appendix (iii) Other Reference Information
Appendix (iii) Other Reference Information 41
Slide 42: Company Overview
Company Overview Company ProjectCompany, Inc. Name Head Office Izumi Garden Tower 39F, 1-6-1 Roppongi, Minato-ku Location Establishment January 2016 Share Capital 10,001,691 yen (as of June 30, 2023) Representative Director and President, Group CEO Yunosuke Doi Full-time Corporate Auditor Aiko Yuki
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
Slide 44: Financial Data
Financial Data Fiscal period 11st period 2nd period 3rd period 4th period 5th period 6th period 7th period 8th period December December December December December December December Q2 FY2023 Fiscal year end 2016 2017 2018 2019 2020 2021 2022 (cumulative) Net sales (thousand yen) 40,533 132,676 391,4
Slide 45: 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 46: 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