Slide 1: Q2 FY2023 Financial Results Briefing Material
2nd 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 P.3 P. 7 P. 10 Executive Summary Company Consolidated Overview Financial Results and Segment Results 04 P.20 05 P. 24 Appendix. P. 26 Progress in Growth Shareholder Business Plan and Growth Potential Announced on June 23, 2022 Strategies Returns /Business Topics Copyright©
Slide 3: Executive Summary
01 Executive Summary Copyright© Confidence Inc. All Rights Reserved. | 3
Slide 4: Financial Highlights of Q2 FY2023 (Cumulative)
Financial Highlights of Q2 FY2023 (Cumulative) Revenue grew 21.5% year on year, with the number of creator staffing assignments increasing by 35 people from the end of the previous fiscal year Due to enhanced productivity, operating profit increased by 41.5% year on year. Operating profit margin
Slide 5: Q2 FY2023 Performance Trends (Cumulative)
Q2 FY2023 Performance Trends (Cumulative) 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 Consolidated Financial Results for the Fiscal Year Ended March 2022 Strong progress made in Q2 (cumulative)
Slide 6: Shareholder Returns for Q2 FY2023 (Interim): Summary
Shareholder Returns for Q2 FY2023 (Interim): Summary Interim dividend for FY2023 has been finalized at 20.0 yen per share, as announced on May 12, 2022 in the Consolidated Financial Results for the Fiscal Year Ended March 2022 Full-year forecast: no revision is made to total dividend of 45.0 yen
Slide 7: Company Overview
02 Company Overview Copyright© Confidence Inc. All Rights Reserved. | 7
Slide 8: Company Profile
Company Profile Vision Company name Confidence Inc. Nobuyuki Takushi, President Joined Staff Service Co., Ltd. (currently Staff Service Holdings Co., Ltd.) in 1996, and worked as a sales manager and a person in charge of recruiting in the Human Resources Department. Joined Representative Staff Servi
Slide 9: 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 Interview medi
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 Q2 FY2023 (Cumulative)
[Consolidated] Financial Highlights of Q2 FY2023 (Cumulative) Revenue and respective profits kept growing steadily from the year-earlier period In terms of progress toward the earnings forecast for FY2023 (full year), operating profit and other profits at lower stages made progress larger than a
Slide 12: [Consolidated] Quarterly Results Trends by Business
[Consolidated] Quarterly Results Trends by Business The HR Solution business, our mainstay operations, grew steadily and recorded the highest revenue in Q2 FY2023 Operating profit showed an upward trend, reflecting the impact of head office relocation completed in Q1, among other factors ▍Revenu
Slide 13: [HR Solution Business] Financial Highlights of Q2 FY2023
[HR Solution Business] Financial Highlights of Q2 FY2023 (Cumulative) Achieved strong growth while keeping profit margin at a high level ▍Q2 results (cumulative) FY2022 FY2023 Full year forecast FY2022 YoY (announced on Progress rate (Million yen) （Q2） （Q2） (Full year) May 12, 2022) Revenue * 2,05
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 775 (an increase of 102 from the year-earlier period) The utilization rate has been kept at a high level since last
Slide 15: [Media Business] Financial Highlights of Q2 FY2023
[Media Business] Financial Highlights of Q2 FY2023 (Cumulative) Although the Media business accounts for a small portion of the entire revenue and the impact on consolidated results is limited, the progress rate as of the end of Q2 fell below the forecast at 34.2% The business, which posted segm
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) somewhat improved in Q2, standing at the similar level as the year-earlier quarter The ratio of outsourced promotional services in revenue sources rose in Q2 due to a temporal project, but the transformation of
Slide 17: [Consolidated] Quarterly SG&A Expenses Trends
[Consolidated] Quarterly SG&A Expenses Trends In Q2, SG&A expenses showed a downward trend from Q1 without the impact of increased depreciation associated with head office relocation ➡ costs were controlled appropriately In the second half of FY2023, meanwhile, will proactively invest for future
Slide 18: [Consolidated] Factor Analysis of Increase/Decrease in Operating Income
[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: 1.77 billion yen / equity ratio: 70.7%) ▍Balance sheets at end of Q2 FY2023 ▍Cash flows for Q2 FY2023 (Cumulative) (Million yen) (Million yen) Balance of cash and deposits as of March 31
Slide 20: Progress in Growth Strategies/Business Topics
04 Progress in Growth Strategies/Business Topics Copyright© Confidence Inc. All Rights Reserved. | 20
Slide 21: Growth Strategy (Overall)
Growth Strategy (Overall) Medium-term growth strategy Long-term growth strategy Deepen client relationships and establish Utilize knowledge obtained from expanding an ecosystem target markets and outsourcing service business, and develop into new markets Acquire an overwhelming Expand business of HR
Slide 22: Growth Strategy: Expand Business of HR Solution Services
Growth Strategy: Expand Business of HR Solution Services Press release dated September 15, 2022 Expand business of HR Solution services Industry│Area│Contract type Entertainment industry Regional operation base Freelance • Expand business scale and • Aim to develop into gaming companies located in t
Slide 23: Growth Strategy: Enhance Business Management Efficiency by Establishing an Ecosystem
Growth Strategy: Enhance Business Management Efficiency by Establishing an Ecosystem Press release dated September 5, 2022 HR Enhance business Media management efficiency by establishing an ecosystem Outsourcing HR Solution × Media • Make “GAMEMO,” the gaming media operated by the Company, • Knowled
Slide 24: Shareholder Returns
05 Shareholder Returns Copyright© Confidence Inc. All Rights Reserved. | 24
Slide 25: Policy and Status of Shareholder Returns for Q2 FY2023 (Interim)
Policy and Status of Shareholder Returns for Q2 FY2023 (Interim) For FY2023, plan to increase dividends from 40.0 per share in the previous fiscal year to 45.0 yen per share for the full year Of the amount, interim dividend has been finalized at 20.0 yen per share ▍Policy on Shareholder Returns
Slide 26: Appendix
Appendix Business Plan and Growth Potential Announced on June 23, 2022 Copyright© Confidence Inc. All Rights Reserved. | 26
Slide 27: Business Model, Source of Competitiveness and Market Environment
Business Model, Source of Competitiveness and Market Environment Copyright© Confidence Inc. All Rights Reserved. | 27
Slide 28: 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 29: 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 HR Solution Request for creator staffing an
Slide 30: 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 31: 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 32: 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 33: [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 34: [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 35: [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 36: [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 37: Growth Strategy/M&A Strategy
Growth Strategy/M&A Strategy Copyright© Confidence Inc. All Rights Reserved. | 37
Slide 38: 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 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 45: 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 46: 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 47: [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 48: [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 49: Risk Information
Risk Information Copyright© Confidence Inc. All Rights Reserved. | 49
Slide 50: 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 51: Envisioning the future together at the frontline of the creative industry
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