Litalico Inc. · TSE:7366
Litalico — FY2023 Q4 Earnings Presentation
40 slides from Litalico's earnings presentation, May 7, 2024
Slide 1: FY 2023 Q4 Earnings Presentation
1 May 7, 2024 FY 2023 Q4 Earnings Presentation LITALICO Inc. [ TSE Code: 7366 ] ©2024 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: Growth Strategy
3 Growth Strategy ©2024 LITALICO Inc.
Slide 4: Creating an Obstacle-free Society
STRATEGY LITALICO Philosophy and Vision 4 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 w
Slide 5: Rise in Mandated Employment Rate of Disabled Individuals
STRATEGY Rise in Mandated Employment Rate of Disabled Individuals 5 • 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 10x increase
Slide 6: Business Environment
STRATEGY Business Environment 6 Number of Welfare Service Users and Provider Facilities (thousand) (thousand) 200 Welfare Service Facilities (left) 1,400 Welfare Service Users 1,200 150 1,000 800 100 600 50 400 200 0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Ref: MHLW ▶ Disability wel
Slide 7: Services Across All Life Stages of Persons with Disabilities
STRATEGY Services Across All Life Stages of Persons with Disabilities 7 Services across all life stages provided through integration of B-C facilities and the B-B platform Education Vocation Lifestyle Retirement BtoC • Early detection and diagnosis • Social participation • Dwelling, medical care, as
Slide 8: Consolidated Financial Results
8 Consolidated Financial Results ©2024 LITALICO Inc.
Slide 9: Consolidated P&L
RESULTS Consolidated P&L 9 IFRS (million yen) FY2022 FY2023 % YoY Sales 24,170 29,792 + 23.3% Operating Profit 2,928 3,715 + 26.9% Profit Attributable to 1,812 3,545 + 95.6% Owners of Parent ©2024 LITALICO Inc.
Slide 10: Segment Income Statement
RESULTS Segment Income Statement 10 IFRS (million yen) FY2022 FY2023 % YoY Sales 9,510 10,585 + 11.3% Vocational Welfare Profit 3,433 3,531 + 2.8% Sales 7,928 9,553 + 20.5% Child Welfare Profit 1,517 1,710 + 12.8% Sales 3,197 3,817 + 19.4% Platform Profit 1,229 1,416 + 15.3% Sales 3,535 5,838 + 65.1
Slide 11: FY2023 Segment Overview
RESULTS FY2023 Segment Overview 11 • 29.8 bln yen in sales (+23% YoY), 3.7 bln yen in operating profit (+27% YoY) CONSOLIDATED • 1 bln yen in gains appropriated from sale of equity method affiliate Olive Union brought net income to 3.5 bln yen (+96% YoY) • Dividend for the fiscal year ending March 2
Slide 12: Financial Forecasts
12 Financial Forecasts ©2024 LITALICO Inc.
Slide 13: Consolidated Annual Forecast (IFRS)
FORECAST Consolidated Annual Forecast (IFRS) 13 [ Forecast Assumptions ] • Planned site launches: 20 LITALICO Works (vs 16 PY), 21 LITALICO Junior (vs 18 PY) • Reimbursement revisions impacting positively for LITALICO Works, negatively for LITALICO Junior • LITALICO Junior expected to post negative
Slide 14: Consolidated Operating Profit Breakdown (FY2023 vs FY2024)
FORECAST Consolidated Operating Profit Breakdown (FY2023 vs FY2024) 14 (billion yen) 1.06 -0.74 5.07 -0.18 -0.20 1.03 -0.19 Reimburs. Platform 4.5 Reimburs. Revision New Marketing Others Revision 3.72 (Works) (Junior) Businesses M&A, etc. Business Growth Profit Growth Upfront Investment +1.35 bn - 0
Slide 15: Financial Summary
FORECAST Financial Summary 15 • Planning for 12 consecutive years of sales and profit increase SALES OPERATING PROFIT (million yen) (million yen) 35,000 4,500 4,500 35,000 4,000 3,715 29,792 30,000 3,500 25,000 24,170 2,928 3,000 2,444 19,737 20,000 2,500 15,907 13,866 2,000 15,000 1,678 12,127 10,3
Slide 16: Welfare Reimbursement Revision
16 Welfare Reimbursement Revision ©2024 LITALICO Inc.
Slide 17: Welfare Reimbursement Revision Impact
REVISION Welfare Reimbursement Revision Impact 17 Vocational Welfare Child Welfare • Service reimbursement fee scale overhaul for • Incorporation of service session duration- Key overall increase based fee scale Revisions • Greater increase rate for providers with higher • Stricter requirements for
Slide 18: Midterm Outlook
18 Midterm Outlook ©2024 LITALICO Inc.
Slide 19: Midterm Facilities Launch Outlook for Vocational Welfare
OUTLOOK Midterm Facilities Launch Outlook for Vocational Welfare 19 • Number of new launches doubled to 16, from 8 four years ago • Planning to maintain this pace of increase, with a launch of 32 new sites four years from now, in order to meet societal demand 247 250 215 32 NEW LAUNCHES 200 187 28 1
Slide 20: Midterm Facilities Launch Outlook for Child Welfare
OUTLOOK Midterm Facilities Launch Outlook for Child Welfare 20 • Number of new launches increased 2.6x to 18, from 7 four years ago • Planning to continue the increase in annual launches, with a launch of 36 new sites four 350 years from now, in order to meet societal demand 300 271 NEW 250 235 36 L
Slide 21: LITALICO Works and Junior Competitive Advantages
OUTLOOK LITALICO Works and Junior Competitive Advantages 21 Powerful Hiring and Training Program • Over 1,000 annual new hires (out of roughly 30,000 applicants) • Continuous educational and skill acquisition structure • High retention rate with many seasoned staff (9.4% turn over as of Mar 2023) Am
Slide 22: Business Results
22 Business Results ©2024 LITALICO Inc.
Slide 23: LITALICO Segments
RESULTS LITALICO Segments 23 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others ©2024 LITALICO Inc.
Slide 24: LITALICO Segments
RESULTS LITALICO Segments 24 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others ©2024 LITALICO Inc.
Slide 25: Vocational Welfare
RESULTS Vocational Welfare 25 • 16 new site launch completed FY2023 • 143 facilities (LW: 136, HG: 7) • 2,109 job placements in FY23, pace remains elevated HumanGrow • 20 total launches planned for FY24, with expected increase in pace Vocational rehabilitation for • Sales expected to grow 25% with c
Slide 26: LITALICO Segments
RESULTS LITALICO Segments 26 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others ©2024 LITALICO Inc.
Slide 27: Child Welfare
RESULTS Child Welfare 27 • 18 new sites launched in FY2023 • 159 facilities (LJ: 146, U: 13)* • 21 total launches planned for FY24, with expected increase in pace Children’s social skills development • Costs related to reimbursement revisions and education classes expected produce negative profit gr
Slide 28: LITALICO Segments
RESULTS LITALICO Segments 28 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others ©2024 LITALICO Inc.
Slide 29: Current Product Line-up and Forward Strategy
RESULTS Current Product Line-up and Forward Strategy 29 • Matching media for service users and providers, DX support SaaS services for facilities • Current line-up services disability welfare facilities, schools & nurseries, and nursing care fields • Sequential expansion of product offerings with in
Slide 30: Platform
RESULTS Platform 30 • 26,500 facilities contracted as of FY23 end • Over 1,000 new contracts gained in Q4 and 3,200 for the full year, a 1.5x increase from the previous year • Contribution from previous investment in sales team expected to accelerate sales growth to +26% for FY2024 (Billing Software
Slide 31: LITALICO Segments
RESULTS LITALICO Segments 31 Vocational Welfare HumanGrow Child Welfare Platform (Billing Software) (Nursing Care Software) Others ©2024 LITALICO Inc.
Slide 32: Others
RESULTS Others 32 • Sales +65% YoY • Active M&A execution Others Sales Development classes designed for children under 18 with special needs, (million) open to all irrespective of disability 7,000 certification. 6,500 6,000 On-site and remote programming 5838 classes for children designed to 5,000 d
Slide 33: New Launch: LITALICO Development Attribute Assessment
RESULTS New Launch: LITALICO “Development Attribute Assessment” 33 An online assessment service for children with potential development disabilities ・ Developed under specialist supervision to meet international standards ・ Assess the child’s attributes and underlying factors from multiple angles LI
Slide 34: Reference
34 Reference ©2024 LITALICO Inc.
Slide 35: Number of LITALICO Service Provision Facilities
REFERENCE Number of LITALICO Service Provision Facilities 35 • Total of over 400 sites planned for FY2024 500 450 434 390 400 91 338 350 88 300 83 262 250 231 180 210 43 159 200 186 39 173 35 128 26 140 23 113 150 116 100 21 93 92 20 84 86 100 73 60 57 18 43 143 163 39 13 30 127 50 5 22 106 15 15 82
Slide 36: LITALICO Business Environment (1)
REFERENCE LITALICO Business Environment (1) 36 • 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 37: LITALICO Business Environment (2)
REFERENCE LITALICO Business Environment (2) 37 • Welfare service spending, service providers, and service users all continue to rise Disability Welfare Service Budget Disability Welfare Service Users and Facilities Government spending on disability welfare services, excluded fees paid by municipalit
Slide 38: Publicly Funded Business Structure
REFERENCE Publicly Funded Business Structure 38 LITALICO Works Pricing Employment Per person; 20 person limit Transition Support 1st Yr: ¥8,800 /session Government 2nd Yr: ¥8,800~10,000 /session Up to 6 mths into Reimbursement: employment 3rd Yr: ¥12,000 /session 90% (Claimed by LITALICO on Per pers
Slide 39: Reimbursement Calculation Method
REFERENCE Reimbursement Calculation Method 39 Reimbursement Unit Price Evaluation Method Vocational Training Business Example Results Based Reimbursement Vocational Training Basic Reimbursement Scale C. Job Retention Rate D. Basic Reimbursement Units Specific KPIs (such as job retention rates) defin
Slide 40: LITALICO Annual Fact Sheet as of Mar 2024
REFERENCE LITALICO Annual Fact Sheet as of Mar 2024 40 Vocational Training Child Welfare LITALICO Wonder • Job Placements: 2,109 • Service Users: 10,884 • Service Users : 4,775 Number of Employee Employee Benefits • Vocational Welfare Segment: 1,232 • Discontinuation of mandatory fixed age retiremen