Litalico Inc. · TSE:7366

Litalico — Q1 FY2022 Earnings Presentation

42 slides from Litalico's earnings presentation, Aug 8, 2022

1. Slide 1: FY2022 Q1 Earnings Presentation

   Aug 8, 2022 FY2022 Q1 Earnings Presentation LITALICO Inc. [ TSE Code: 7366 ]

2. Slide 2: Disclaimer

   DISCLAIMER 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 risks

3. Slide 3: Growth Strategy

   Growth Strategy LITALICO AK AKAKA A KA KA AAA ©2022 LITALICO Inc. YRC

4. Slide 4: LITALICO Philosophy & Vision

   LITALICO Philosophy & Vision 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 within a society,

5. Slide 5: Comprehensive Solutions within the Disability Welfare Industry

   STRATEGY Comprehensive Solutions within the Disability Welfare Industry 5 • 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 thr

6. Slide 6: Structure: Parent and Group Companies

   STRUCTURE Parent and Group Companies • Platform and general education businesses are held within the parent company, while publicly funded businesses are held within group companies LITALICO Inc. Parent LITALICO LITALICO Career LITALICO Work Navi LITALICO Junior (Private) LITALICO Wonder Company Dev

7. Slide 7: Consolidated Financial Results

   Consolidated Financial Results

8. Slide 8: FY2022 Q1 Consolidated and Segment Overview

   RESULTS FY2022 Q1 Consolidated and Segment Overview CONSOLIDATED • 5.6 bln yen in sales (+22% YoY), 700 mln yen in operating profit (+76% YoY) • Tracking healthy progress versus company annual forecast LITALICO • Launch of three new sites, for an increase to a total of 109 sites Works • Healthy cust

9. Slide 9: Consolidated P&L

   RESULTS Consolidated P&L • Profit increase in spite of aggressive investments • Reduction in effective tax rate due to profit improvement in parent company (see next slide for details) (million yen) FY2022 Q1 % of Sales YoY FY2021 Q1 % of Sales Sales Operating Profit Ordinary Profit Net Profit

10. Slide 10: Effective Tax Rate Improvement

    RESULTS Effective Tax Rate Improvement (million yen) Consolidated Parent Company Group Companies (HQ and PF businesses) (Works, Junior, etc.) Pre-tax profit: ¥ 319 mln Taxes: ¥ 204 mln Taxable Income: - Taxable Income: + Tax Rate: Taxes: roughly 0 Taxes: statutory rate Consolidated Parent Company Gr

11. Slide 11: Profit Improvement Outlook for Parent Company

    RESULTS Profit Improvement Outlook for Parent Company Expanding HQ functions for Headquarter Office long-term growth. Profit Trend Advancement in executive hiring Parent Company expected to Profit Trend alleviated cost requirements for a certain period. Profitability attained, now Platform Business

12. Slide 12: Segment P&L

    RESULTS Segment P&L • Profit increased across all segments % (million yen) Change Change LITALICO Works Sales Business Profit LITALICO Junior Sales Business Profit LITALICO Platform Sales Business Profit 4.1 x Sales Other Businesses Profit (16) (64)

13. Slide 13: Platform Business Profit Contribution Versus Previous FY

    RESULTS Platform Business Profit Contribution Versus Previous FY • Significant profit increase despite aggressive investments (million yen) Investment in areas such as Pricing increase staffing and Plus One approx. Solutions profit contribution X SaaS adoption expansion

14. Slide 14: Financial Forecasts

    Financial Forecasts E¥20 22 LITALICO AA AAAKA OA AA AK Yr AKA ©2022 LITALICO Inc.

15. Slide 15: Consolidated Annual Forecast

    FORECAST Consolidated Annual Forecast • Profitability to increase along with continued aggressive investments in platform business • Acceleration of site expansion with 15 new sites each planned for LITALICO Works and Junior • LITALICO Wonder launched site expansion in response to healthy increase i

16. Slide 16: Financial Summary

    FORECAST Financial Summary • Planning for ten consecutive years of sales and profit increase SALES OPERATING PROFIT (million yen) (million yen) Others LITALICO Platform New LITALICO Junior Former LITALICO Junior LITALICO Works FCT FCT

17. Slide 17: Business Results

    Business Results LITALICO AA AAAKA A AK AA YRC AAA ©2022 LITALICO Inc.

18. Slide 18: Segments: LITALICO Works Segment

    RESULTS Segments LITALICO Works Segment LITALICO Works LITALICO Junior Segment LITALICO Junior (Welfare) LITALICO Platform Segment LITALICO LITALICO LITALICO Career fukushi-soft inc. Development Navi Work Navi Others Segment LITALICO Junior LITALICO Wonder LITALICO Life (Private)

19. Slide 19: LITALICO Works Segment

    RESULTS LITALICO Works Segment LITALICO Works Segment LITALICO LITALICOWorks Works LITALICO Junior Segment LITALICO Junior (Welfare) LITALICO Platform Segment LITALICO LITALICO LITALICO Career fukushi-soft inc. Development Navi Work Navi Others Segment LITALICO Junior LITALICO Wonder LITALICO Life (

20. Slide 20: LITALICO Works Segment: 109 sites nationally

    RESULTS LITALICO Works Segment • 109 sites nationally (+3 sites vs previous FY end) • 15 additional sites planned for FY2022 • Internal structural fortification planned to support expansion pace LITALICO Works Employment support for individuals with disabilities LITALICO Works SALES (million yen) FY

21. Slide 21: LITALICO Works Segment: 12,409 cumulative placements

    RESULTS LITALICO Works Segment • 12,409 cumulative placements, achieved 91.3% 6 months retention rate • Annual placements largely increased to 529 (+18.6% YoY) • Continued technology utility such as VR and automated support systems LITALICO Works Employment support for individuals with disabilities

22. Slide 22: LITALICO Junior Segment

    RESULTS LITALICO Junior Segment LITALICO Works Segment LITALICO Works LITALICO Junior Segment LITALICO Junior (Welfare) LITALICO Platform Segment LITALICO LITALICO LITALICO Career fukushi-soft inc. Development Navi Work Navi Others Segment LITALICO Junior LITALICO Wonder LITALICO Life (Private)

23. Slide 23: LITALICO Junior Segment: 117 sites nationally

    RESULTS LITALICO Junior Segment • 117 sites nationally (+4 sites vs previous FY end) • Sales increased due to steady new site launches • 15 additional sites planned for FY2022 LITALICO Junior (Welfare) Children’s social skills development and education classes LITALICO Junior Sales Trend FY22 LITALI

24. Slide 24: LITALICO Platform Segment

    RESULTS LITALICO Platform Segment LITALIO Works Segment LITALICO Works LITALIO Junior Segment LITALICO Junior (Welfare) LITALIO Platform Segment LITALICO LITALICO LITALICO Career fukushi-soft inc. Development Navi Work Navi Others Segment LITALICO Junior LITALICO Wonder LITALICO Life (Private)

25. Slide 25: LITALICO Platform Segment: Sales +88% YoY

    RESULTS LITALICO Platform Segment • Sales +88% YoY SALES • Sales and profit increased while hiring sales and engineer staff; entering growth phase • Launched a matching media platform for service users and social workers, and a SaaS DX support business for institutions FCT Information Service User P

26. Slide 26: LITALICO Platform Segment: Steady increase in service contracts

    RESULTS LITALICO Platform Segment • Steady increase in service contracts • LITALICO Career topped 18,000 job offerings LITALICO LITALICO Development Navi Work Navi LITALICO Career • Fortification of SaaS business within the Community portal site Employment information Media and career nursing care i

27. Slide 27: Current Product Line-up and Strategy Going Forward

    RESULTS Current Product Line-up and Strategy Going Forward • Current line-up services disability welfare offices, schools & nurseries, and nursing care fields • Service pricing increased in Apr 2022 in line with functional product upgrades • Sequential expansion of product offerings with higher valu

28. Slide 28: Internal Fortification for Platform Business Growth

    RESULTS Internal Fortification for Platform Business Growth • Large scale development capacity fortification through hiring of engineers, PdMs, and designers, in bolstering accelerated growth of the Platform business • Creating an organizational structure that maximize LITALICO’s strength in talent

29. Slide 29: Others Segment

    RESULTS Others LITALICO Works Segment LITALICO Works LITALICO Junior Segment LITALICO Junior (Welfare) LITALICO Platform Segment LITALICO LITALICO LITALICO Career fukushi-soft inc. Development Navi Work Navi Others Segment LITALICO Junior LITALICO Wonder LITALICO Life (Private)

30. Slide 30: Others: Junior (Private), Wonder, Life

    RESULTS Others LITALICO Junior (Private), LITALICO Wonder, LITALICO Life • Sales +20.0% YoY • Services in Others segment offers a line-up of 100% self-paid services that are unhindered by welfare structures LITALICO Junior (Private) Sales Trend Development classes designed for children (million yen)

31. Slide 31: LITALICO Junior (Private)

    RESULTS LITALICO Junior (Private) • A short-term intensive service model (self-paid) • Current focus on hiring, staff education, and structural fortification for further site expansion LITALICO Junior (Private) Children’s social skills development and education classes Course Overview LITALICO Junio

32. Slide 32: LITALICO Wonder: Total 18 sites with 4,656 students

    RESULTS LITALICO Wonder • Total 18 sites with 4,656 students • Increased capacity from new site launches • Prices raised for new clients joining post Apr 2022 LITALICO Wonder Children’s creativity enhancement classes through IT and crafting Online Course Launch Number of Students Launch of online co

33. Slide 33: LITALICO Life

    RESULTS LITALICO Life • Healthy increase in cumulative number of households utilizing services • Launched nationwide study groups with specific LITALICO Life Insurance and individual themes life planning consulting Service Area Expansion Cumulative Number of Households Utilizing Service • Expert led

34. Slide 34: Appendix

    Appendix LITALICO AA AAAKA A KA AK AKA ©2022 LITALICO Inc. Yreyc

35. Slide 35: Number of Service Provision Sites

    REFERENCE Number of Service Provision Sites • Total 294 sites planned for FY2022 294 LITALICO Wonder LITALICO Junior (Private) LITALICO Junior (Welfare) 128 LITALICO Works FCT

36. Slide 36: LITALICO Business Environment (1)

    REFERENCE LITALICO Business Environment (1) • Number of individuals with disabilities continue to increase, with more children attending special needs classes in addition to normal school Children with Developmental Disorders (Grades 1~9 ) Number of All Individuals with Disabilities Attending Additi

37. Slide 37: LITALICO Business Environment (2)

    REFERENCE LITALICO Business Environment (2) • Rising employment of individuals with disabilities; legally mandated employment rate is 2.3% Number of All Individuals with Disabilities Legally Mandated Employment Rate Psychological Psychological disorders: Developmental Up 6.8x over past 10 years Phys

38. Slide 38: LITALICO Business Environment

    REFERENCE LITALICO Business Environment • Welfare services and peripheral industry (medical, nursing care, etc.) markets continues to rise Disability Welfare Service Budget Disability Welfare Service Users and Offices (million yen) Welfare service budget continues to rise, recently topped 1.5 trilli

39. Slide 39: Publicly Funded Businesses

    REFERENCE Publicly Funded Businesses • Publicly funded service pricing is determined by the Reimbursement Points Table (next page) LITALICO Works Pricing Employment Per person; up to 20 persons Transition Support 1st Yr: \8,100 /session National Health Insurance Up to 6 mths into 2nd Yr: \8,100~9,40

40. Slide 40: Reimbursement Points Table

    REFERENCE Reimbursement Points Table • Points are revised every three years; most recent update occurred in Apr 2022 Annual Employment Transition Support Annual Employment Retention Support Reimbursement Points Reimbursement Points Based on 6 month retention of employment across Based on employment

41. Slide 41: LITALICO Fact Sheet

    REFERENCE LITALICO Fact Sheet LITALICO Works Assisted LITALICO Number of LITALICO Ratio of Female Employment Placements Employees by Segment Employees • As of Jun 2022 end: 529 • LITALICO Works: 1,006 • Firm-wide: 65.8% • Cumulative: 12,409 • LITALICO Junior: 1,273 • Middle and Upper • 6 month reten

42. Slide 42: LITALICO

    LITALICO Yee LITALICO AA KAAKA A AK AA AAA ©2022 LITALICO Inc. Yruc

LITALICO — Q1 FY2022 Earnings Presentation on 6ix