Slide 1: Q1 FY2023 Financial Results Briefing Material
1st Quarter of Fiscal Year Ending March 2023 (FY2023) Financial Results Briefing Material Confidence Inc. Securities code: 7374
Slide 2: Table of Contents
Table of Contents 01 02 03 P3 P6 P10 Executive Company Consolidated Summary Overview Financial Results and Segment Results Appendix 1 Appendix 2 Appendix 3 P20 P30 P42 Business Model, Growth Risk Information Source of Strategy/M&A Competitiveness and Strategy Market Environment Copyright© Confidence
Slide 3: Executive Summary
01 Executive Summary Copyright© Confidence Inc. All Rights Reserved. | 3
Slide 4: Financial Highlights of Q1 FY2023
Financial Highlights of Q1 FY2023 Revenue grew 20.0% year on year, with the number of creator staffing assignments increased by 28 people from the end of the previous fiscal year Operating profit margin surpassed the target of “more than 15%” as costs were controlled appropriately ▍Q1 results +2
Slide 5: Q1 FY2023 Performance Trends
Q1 FY2023 Performance Trends FY2023 (ending March 2023) : Revenue of 5,200 million yen and operating profit of 850 million yen set as targets, announced on May 12, 2022 in the Summary of Consolidated Financial Results for the Fiscal Year Ended March 2022 Progress rate achieved as planned for Q1➡
Slide 6: Company Overview
02 Company Overview Copyright© Confidence Inc. All Rights Reserved. | 6
Slide 7: Company Profile
Company Profile Company name Confidence Inc. Nobuyuki Takushi, President Joined Staff Service Co., Ltd. (currently Staff Service Holdings Co., Ltd.) in 1996, and worked as a Vision Representative sales manager and a person in charge of recruiting in the Human Resources Department. Joined Staff Servi
Slide 8: Business Overview
Business Overview 1. HR Solution business 2. Media business Staffing business/recruitment business Media site operations Accommodate the needs of each phase/department Lovely Plush GAMEMO Planning Development Quality Support Back office management Media for women Fortune-telling media Gaming media P
Slide 9: Policy and Status of Shareholder Returns
Policy and Status of Shareholder Returns As our policy on shareholder returns, we aim to surpass (1) payout ratio of over 30% and (2) DOE of over 10% Dividend forecast for FY2023 is projected to be 45.0 yen per share, unchanged from the forecast announced on May 12, 2022 in the Summary of Consol
Slide 10: Consolidated Financial Results and Segment Results
03 Consolidated Financial Results and Segment Results Copyright© Confidence Inc. All Rights Reserved. | 10
Slide 11: [Consolidated] Financial Highlights of Q1 FY2023
[Consolidated] Financial Highlights of Q1 FY2023 Revenue and respective profits grew steadily from the year-earlier period For FY2023 (full year), progress was made at a planned rate toward the forecast ▍Q1 results FY2022 FY2023 Full year forecast FY2022 (Million yen) YoY (announced on Progress
Slide 12: [Consolidated] Quarterly Results Trends by Business
[Consolidated] Quarterly Results Trends by Business Creator staffing assignments have increased steadily, mainly in the HR Solution business, with revenue in the first quarter growing in good shape Operating profit increased 30.1% year on year, after factoring in the impact of the head office re
Slide 13: [HR Solution Business] Financial Highlights of Q1 FY2023
[HR Solution Business] Financial Highlights of Q1 FY2023 Achieved strong growth while keeping profit margin at a high level ▍Q1 results FY2022 FY2023 Full year forecast FY2022 (Million yen) YoY (announced on May Progress rate (Q1) (Q1) (Full year) 12, 2022) Revenue * 1,024 1,240 +21.1% 5,078 24.4%
Slide 14: [Human Resources Business] Trends in Major KPIs
[Human Resources Business] Trends in Major KPIs Creator staffing assignments, which serve as the foundation of the Company’s recurring income model, steadily increased to end up at 768, an increase of 138 from the year-earlier period The utilization rate has been kept at a high level since last
Slide 15: [Media Business] Financial Highlights of Q1 FY2023
[Media Business] Financial Highlights of Q1 FY2023 In the Media business, revenue remained at the same level as the year-earlier period, but the gross profit margin decreased due to an increase in costs from upfront investments This resulted in segment loss, although the impact on the entire res
Slide 16: [Media Business] Trends in Major KPIs and Targeted Revenue Structure
[Media Business] Trends in Major KPIs and Targeted Revenue Structure Page views (PVs) has remained at the same level as the immediately preceding quarter Urgently needed to make the business profitable, along with the transformation of its revenue structure ▍Trends in PVs ▍Improvements in curren
Slide 17: [Consolidated] Quarterly SG&A Expenses Trends
[Consolidated] Quarterly SG&A Expenses Trends Selling, general and administrative (SG&A) expenses increased 13.1% year-on-year due to increases in personnel expenses, etc. from business expansion and depreciation associated with head office relocation The ratio of increase in SG&A expenses was l
Slide 18: [Consolidated] Factor Analysis of Increase/Decrease in Operating Income (YoY)
[Consolidated] Factor Analysis of Increase/Decrease in Operating Income (YoY) Gross profit increased steadily along with business expansion, contributing to larger operating profit (Million yen) Gross profit SG&A expenses Copyright© Confidence Inc. All Rights Reserved. | 18
Slide 19: [Consolidated] Balance Sheets/Statements of Cash Flows
[Consolidated] Balance Sheets/Statements of Cash Flows There is no concern about financial stability (net cash: 1.53 billion yen / equity ratio: 67.2%) In terms of cash flows, the balance of cash and deposits decreased 96 million yen from the end of the previous fiscal year due to payment of div
Slide 20: Appendix 1 Business Model, Source of Competitiveness and Market Environment
Appendix 1 Business Model, Source of Competitiveness and Market Environment Copyright© Confidence Inc. All Rights Reserved. | 20
Slide 21: Our Competitive Advantages and Strengths
Our Competitive Advantages and Strengths Business strategy Efficient organizational operations Maximize the total amount of matching by Conduct organizational design based on division of maximizing the number of job seekers and labor and standardization, and simplify operations job openings as much
Slide 22: Business Diagram
Business Diagram Recruit and hire creators to deliver staffing, recruitment and outsourcing services for the gaming industry Provide media operation assistance services on top of earning advertising income through the operation of our own media Clients Creators (job seekers) Job posting HR Solut
Slide 23: Our Major Revenue Structure and KPIs: HR Solution Business (1/2)
Our Major Revenue Structure and KPIs: HR Solution Business (1/2) The revenue structure and KPIs of the HR Solution business - staffing business, which accounts for the majority of our sales, are as follows With a particular focus on creator staffing assignments among the breakdown items, aim to
Slide 24: Our Major Revenue Structure and KPIs: HR Solution Business (2/2)
Our Major Revenue Structure and KPIs: HR Solution Business (2/2) The revenue structure and KPIs for the HR Solution business - outsourcing business and recruitment business, which are related to the staffing business, our core business, are as follows HR Solution Media : Business KPIs business bus
Slide 25: Our Major Revenue Structure and KPIs: Media Business
Our Major Revenue Structure and KPIs: Media Business The revenue structure and KPIs of the Media business are as follows Aim to shift from the existing media site operations business to the revenue structure centering on web promotion business HR Solution Media : Business KPIs business business
Slide 26: [Existing Areas] Trends in the Content / Gaming Markets
[Existing Areas] Trends in the Content / Gaming Markets Of the content market, the gaming market is projected to remain on an expansion trend both in Japan and overseas Consequently, demand for human resources from gaming companies is assumed to keep growing ▍Trends in the gaming market Japan Si
Slide 27: [Existing Areas] Supply and Demand Situation for IT Personnel
[Existing Areas] Supply and Demand Situation for IT Personnel According to a survey conducted by the Ministry of Economy, Trade and Industry, the shortage of IT personnel tends to expand year by year in response to the expansion of IT needs A similar trend is assumed to continue in the gaming in
Slide 28: [New Areas] Changes in Recent Industry Trends
[New Areas] Changes in Recent industry Trends ▍Changes in the industry trends from the previous ▍Status of companies in the gaming industry and other announcement to the latest industries (examples) As of previous Overseas Facebook “Metaverse” announcement • Changed the company name to Meta / announ
Slide 29: [New Areas] Gaming Industry and Future Target Markets
[New Areas] Gaming Industry and Future Target Markets ▍Changes in content creation, distribution and usage brought about by digitization Overseas Metaverse market Transformation of “GLOBAL METAVERSE MARKET 2018-2028” by Emergen Research, industrial structure released in November 2021 ($ billion) • T
Slide 30: Appendix 2 Growth Strategy/M&A Strategy
Appendix 2 Growth Strategy/M&A Strategy Copyright© Confidence Inc. All Rights Reserved. | 30
Slide 31: Image of Future Growth
Image of Future Growth Securely grow the “game x human resources” area, our existing domain, while entering the peripheral areas and outsourcing service area Also, look to expansion into new markets in new areas (such as Web 3.0 and metaverse) in response to changes in the external environment D
Slide 32: Basic Strategy and Investment Concept for the Image of Future Growth
Basic Strategy and Investment Concept for the Image of Future Growth As the basic strategy and investment concept for our future growth, maximize revenue per client and the client base, and proactively invest the collected profit in new areas with high growth potential Increase revenue per client
Slide 33: Growth Strategy (Overall)
Growth Strategy (Overall) Medium-term: Expand business by deepening client relationships and establishing a virtuous cycle (ecosystem) of business collaborations Long-term: Expand target markets and develop into new markets in new areas (such as Web 3.0 and metaverse) with matching solutions Med
Slide 34: Expand Staffing Business by Deepening Client Relationships
[Medium-Term Growth Strategy (1)]: Expand Staffing Business by Deepening Client Relationships Aim to gain the overwhelmingly No.1 position as staffing business operator in the gaming industry by further deepening client relationships Before deepening client After deepening client relationships rel
Slide 35: Conduct Cross-Selling to Existing Clients
[Medium-Term Growth Strategy (2)]: Conduct Cross-Selling to Existing Clients Expand revenue through cross-selling of recruitment and outsourcing services by leveraging the network built in staffing business Before cross-selling After cross-selling Recruitment department and outsourcing service dep
Slide 36: Establish and Expand Ecosystem
[Medium-Term Growth Strategy (3)]: Establish and Expand Ecosystem Establish and expand an ecosystem of staffing, recruitment, outsourcing and media businesses, improve management efficiency, and increase opportunities to provide services to the gaming industry Establish an ecosystem Establish and
Slide 37: Diversify and Expand HR Solution Areas
[Long-Term Growth Strategy (1)]: Diversify and Expand HR Solution Areas (Industry, Geographical Area and Work Type) Work to diversify and broaden the client industries, geographical areas and formats (freelancers), and advance into web and entertainment areas instead of specializing in gaming indu
Slide 38: Expand Outsourcing Service Area
[Long-Term Growth Strategy (2)]: Expand Outsourcing Service Area Expand media-related outsourcing services and, by further enlarging and diversifying the human resource pool, provide a variety of HR Solution services Expand the scale and further diversify Media-related outsourcing services the hum
Slide 39: Expansion into New Areas (Web 3.0 and Metaverse, Etc.)
[Long-Term Growth Strategy (3)]: Expansion into New Areas (Web 3.0 and Metaverse, Etc.) Match the technology of the gaming industry with companies in various industries by utilizing our network with gaming companies and, after matching, provide support to the companies by our talents utilizing the
Slide 40: [M&A Strategy]: Approach to Business Development Based on Growth Strategy
[M&A Strategy]: Approach to Business Development Based on Growth Strategy ▍Approach to business development: break down the focus areas around the core business (staffing), and newly establish, deepen and expand each part on our own or through external forces (M&A) Core business processes - by value
Slide 41: [M&A Strategy]: M&A Policy / Financial Discipline / Governance
[M&A Strategy]: M&A Policy / Financial Discipline / Governance Proactively utilize M&A for the portions indispensable for future growth while considering the timeline Set up disciplines for executing the M&A Focus on consistency with the target businesses and areas set out in the Organic growt
Slide 42: Appendix 3 Risk Information
Appendix 3 Risk Information Copyright© Confidence Inc. All Rights Reserved. | 42
Slide 43: Major Risks Related Business Environment
Major Risks Related Business Environment Of the risks described in the annual securities report (filed on June 30, 2022), the major risks are as follows Probability Degree of Business risk Risk overview of Our policy to address the risk impact occurrence Shortage of human resources due We have tak
Slide 44: Inquiries and Handling of this Material
Envisioning the future together at the frontline of the creative industry Inquiries about this material: Administration Division (ir@confidence-inc.jp) Handling of this material This material includes forward-looking statements. These are nothing but the statements prepared on the basis of the infor