Visional, Inc. · TSE:4194
Visional — Investor Presentation (October 2023)
48 slides from Visional's investor presentation, October 2023
Slide 1: Our Business Model and Strategy
Our Business Model and Strategy October 2023 Visional, Inc.
Slide 2: Table of Contents
Table of Contents 1. Introduction to Visional Group 2. Creation of HCM(1) Ecosystem: Accelerating Japan’s Workstyle Reform 2-1：BizReach 2-2：HRMOS 3. Investments for Long Term Growth 4. Message to Shareholders and Investors Appendix Note: (1) HCM=Human Capital Management 2
Slide 3: Introduction to Visional Group
1 Introduction to Visional Group 3
Slide 4: Group Mission
Group Mission Persistent Creation of New Possibilities. Our vision is to tap into the power of the internet to support the innovative progress of our world Manpower by persistently transforming social obstacles into new possibilities. Our mission is to achieve “continuous contribution to impact the
Slide 5: Our Framework for Building Businesses
Our Framework for Building Businesses Building on the proven set of principles and approaches that enabled our prior successes, we will continue to evaluate all potential areas of growth that will emerge from seismic shifts and technological innovation in Japan Guidelines for deciding on a market MV
Slide 6: Growth Trajectory of Visional Group
Growth Trajectory of Visional Group (1) In addition to a solid track record of sustained growth in HR Tech, (Expense Management Visional is committed to incubating new businesses, accelerating Cloud) the digital transformation (DX) of various industry verticals (Security Evaluation (Vulnerability Ma
Slide 7: Visional Group Consolidated Financial Results
Visional Group Consolidated Financial Results Visional Group’s consolidated net sales for 12 months ended July grew 28.0% YoY. As a result of making selective investments based on priorities, operating profit grew 59.7% YoY, with operating profit margin of 23.5% YoY Growth Rate Consolidated Net Sale
Slide 8: Creation of HCM Ecosystem: Accelerating Japan's Workstyle Reform
2 Creation of HCM Ecosystem: Accelerating Japan’s Workstyle Reform 8
Slide 9: BizReach
>> VISIONAL 2-1 BizReach
Slide 10: BizReach: Disruption of the Professional Recruitment Market
BizReach: Disruption of the Professional Recruitment Market Similar to the structural transformation of the retail market caused by e-commerce(1), BizReach pioneered the concept of “Direct Recruiting” by creating an online career networking platform, which raised the transparency and efficiency of t
Slide 11: Unique "Multi-Revenue Stream" Business Model
Unique “Multi-Revenue Stream” Business Model The financially attractive and unique business model targeting for professional job seekers(1) is the foundation behind the scalability of BizReach Access database Post job listing Send direct message to job seeker Direct Employer (HR/Recruiter) Post resu
Slide 12: Customer Expansion Potential for BizReach
Customer Expansion Potential for BizReach Customer base has expanded from Japan branch of global enterprises and startups to large Japanese enterprises, but still massive untapped wallet exists for company-wide introduction and new customers Illustration of Customer Base Expansion Trajectory Phase1
Slide 13: Competitive Strategy of BizReach
Competitive Strategy of BizReach Unique value proposition in professional Increase of Job Seekers recruiting as an online career platform working # of Scoutable with headhunters Job Seekers(1) MM Job Seekers 2.14+ Steady acquisition of Recruitment scoutable job seekers Agency 0.87+ through effective
Slide 14: BizReach Full Year Net Sales Results
BizReach Full Year Net Sales Results Capturing the momentum created by the rebound of hiring demand from COVID-19, strong growth in net sales achieved whilst realizing a maintained expansion of operating profit BizReach Business’ Net Sales(1)(2) YoY Growth BizReach Business’ Adjusted Operating Profi
Slide 15: FY2023/7 BizReach Net Sales Breakdown
FY2023/7 BizReach Net Sales Breakdown Unique mix of recurring revenue(1) and performance revenue(2). Increase in the direct employer ratio from 66% in FY2022/7 to 69% in FY2023/7 indicates the expansion of direct recruiting in Japan FY23/7 BizReach Business Revenue Breakdown by FY23/7 BizReach Busin
Slide 16: Main KPIs - BizReach
Main KPIs - BizReach KPIs are growing steadily, building a strong customer base driven by penetration of direct recruiting and increasing job seekers # of Registered Direct Employers(1) # of Scoutable Job Seekers(3) 26,200+ 2.14+ 21,100+ 1.70+ 17,100+ 1.38+ 13,800+ 1.11+ 11,200+ 0.87+ FY19/7 FY20/7
Slide 17: Data x Technology: Resume / CV Creation to Maximize Matching Opportunities
Data x Technology: Resume / CV Creation to Maximize Matching Opportunities 40% increase in the number of scout messages received. Our proprietary logic using our accumulated know-how and data enables high quality resume / CV creation Automatic Resume / CV Creation(1) • Although changing jobs has bec
Slide 18: HRMOS
>> VISIONAL 2-2 HRMOS 18
Slide 19: Our Vision of Creating an HCM Ecosystem
Our Vision of Creating an HCM (1) Ecosystem Seamless integration of BizReach and HRMOS to create a unified, data-driven HCM Ecosystem that enables investment and management of human capital to drive business competitiveness Note: (1) HCM=Human Capital Management 19
Slide 20: Data x Technology: Develop Functions to Support HCM
Data x Technology: Leveraging the Know-how from BizReach, Develop Functions to Support HCM As the war for talent intensifies due to labor shortage, there is a growing need for companies to actively hire professionals, and to create an organization where hired personnel can stay and continue to play
Slide 21: HRMOS Full Year Net Sales Results
HRMOS Full Year Net Sales Results Number of HRMOS customers grew whilst we continue with product development. Net sales for 12 months ended July grew 49.8% YoY. Significant reduction in losses for FY2023/7 YoY through robust cost control whilst continuing to selectively invest in marketing and sales
Slide 22: Main KPIs – HRMOS
Main KPIs – HRMOS (HRMOS ATS and HRMOS Talent Management) ARR reached JPY 2.13Bn in 4Q (31.5% YoY growth) driven by solid growth of customers. KPIs below represent HRMOS ATS and HRMOS Talent Management total (same as previous disclosure) ARR(1)(2) ¥2.13Bn (+31.5% YoY) # of Unique Paying 1,546 (+29.6
Slide 23: Investments for Long Term Growth
3 Investments for Long Term Growth 23
Slide 24: Global Comparison of Labor Market Liquidity and Japan's Issues
Global Comparison of Labor Market Liquidity and Japan’s Issues Japan has a high portion of employees with long tenure. Liquidity in the labor market is required to shift labor force to segments of higher labor demand Global Comparison of Employment Ratio By length Why Increased Labor Liquidity is Re
Slide 25: Further Opportunities Driven by Workstyle Reform
Further Opportunities Driven by Workstyle Reform Japanese recruitment market is undergoing a structural stage of expansion due to the ongoing changes in workstyle, which will increase liquidity in the Japanese labor market going forward Significant Room for Job Mobility in Japan Acceleration of Work
Slide 26: BizReach is Under-penetrated and Significant Growth Opportunities Exist
BizReach is Under-penetrated and Significant Growth Opportunities Exist While penetrating further into the professionals’ population, accelerate new client acquisitions and increase wallet share of existing clients to drive further top-line growth Growing # of “Scoutable” Job Seekers on Potential Ma
Slide 27: Japan's Growth Potential: Investment in People
Japan’s Growth Potential : Investment in People Compared to other countries, Japanese companies have not invested in people International Comparison of Corporate Investments in HR (excluding OJT) (% of GDP)(1) Unit: % 2.08 1.78 1.20 1.09 1.06 0.10 US France Germany Italy UK Japan 2000-2004 2005-2009
Slide 28: Japan's Growth Potential: Investment in Growth Areas
Japan’s Growth Potential : Investment in Growth Areas Also as seen in the world competitiveness rankings, Japan’s position is on a decreasing trend Japan’s International Competitiveness Ranking(1) Japan’s Digital Competitiveness Ranking(2) Rank Rank 20 17 17 22 19 23 23 23 23 24 26 27 27 31 28 34 35
Slide 29: Japan's Growth Potential: Labor Productivity
Japan’s Growth Potential : Labor Productivity Priority investments mentioned in the “New Form of Capitalism” include investments in people, acceleration of DX for SMEs, strengthening cyber security, etc. Increasing labor productivity and digital competitiveness to solve social issues and achieve mar
Slide 30: Japan's Growth Potential: Wage and Employee Engagement
Japan’s Growth Potential: Wage and Employee Engagement Real wages in Japan have not increased for almost 20 years, but a movement has begun to improve productivity. Positive trends observed in higher wages and focus on human capital management to improve employee engagement Trend in Real Wages in G7
Slide 31: Reposted: Investing in the Development of an HCM Ecosystem
Reposted: Investing in the Development of an HCM (1) Ecosystem Continuation of development to realize seamless integration of BizReach and HRMOS to create a unified, data-driven HCM Ecosystem that enables investment and management of human capital to drive business competitiveness Note: (1) HCM=Huma
Slide 32: Building Businesses for Long Term Growth
Building Businesses for Long Term Growth Building businesses in potential areas of growth emerging from seismic shifts and technological innovation. Driving mid to long term growth whilst contributing to improving Japan’s productivity Issue１ Issue２ Issue３ Lack of capital liquidity Delay in security
Slide 33: Using M&A for Sustainable Growth
Using M&A for Sustainable Growth Proactively consider the use of M&A as a means of accelerating the realization of sustainable long- term growth(1). Allocate appropriate resources whilst reviewing Visional Group’s business portfolio (4) (6) (7) Acquisition of Reclog (3) (IEAYSU business) (eKeihi bus
Slide 34: Message to Shareholders and Investors
4 Message to Shareholders and Investors 34
Slide 35: Message to Shareholders and Investors
Message to Shareholders and Investors Persistent Creation of New Possibilities. We will tap into the power of the internet to support the digital transformation of the Japanese economy. We will continue to maximize mid-to-long term enterprise value by persistently transforming social obstacles into
Slide 36: Appendix
>> VISIONAL Appendix 36
Slide 37: Corporate Overview
Corporate Overview Company Name Visional, Inc. Address 2-15-1, Shibuya, Shibuya-ku, Tokyo CEO Representative Director and CEO Soichiro Minami # of Employees 1,550 people (As of July end, 2023) Share Capital JPY 6,356 MM (As of July end, 2023) Business Management support of group companies Overview S
Slide 38: Introduction to our Management Team (1)
Introduction to our Management Team (1) Soichiro Minami - Representative Director and CEO Shin Takeuchi - Director and CTO After graduating from Tufts University in the U.S. in 1999, he joined After graduating from the Department of Computer Science the Investment Banking Division of Morgan Stanley
Slide 39: Introduction to our Management Team (2)
Introduction to our Management Team (2) Naoko Harima – Outside Director (Audit & Maiko Chihara – Outside Director (Audit & Supervisory Committee Member) Supervisory Committee Member) After graduating from the Faculty of Economics at Keio She graduated from the Faculty of Law at University of Univers
Slide 40: Visional Group Structure
Visional Group Structure Current Group Structure (As of October 26, 2023) HR Tech Segment Incubation Segment ezSoft Co., IEYASU, Ltd. Inc. 100%(2) 80.1%(2) BizReach, M&A Succeed, Trabox, BizHint, Assured, Stanby, Inc. Inc. Inc. Inc. Inc. Inc. 100%(1) 100%(1) 100%(1) 100%(1) 100%(1) 40%(1)(3) Visiona
Slide 41: Risks Related to Our Business (1)
Risks Related to Our Business (1) Below are some of the risks associated with our business model and strategy. Please refer to the risk section in our disclosure for details. Risks Related to Our business Probability of manifestation and Actions to Mitigate Risks Our results of operations could be a
Slide 42: Risks Related to Our Business (2)
Risks Related to Our Business (2) Probability of manifestation and Risks Related to Our business Actions to Mitigate Risks Security breaches or unauthorized access or use of our or our customers’ data could adversely affect our reputation and expose us to claims from customers and penalties from aut
Slide 43: Use of Proceeds from IPO
Use of Proceeds from IPO We have conducted active advertising and investment in talent for BizReach that continues to be in the expansion phase, active investment in product development for HRMOS to complete the HCM ecosystem, and investment in other new businesses. In addition, we have utilized the
Slide 44: Key Financials: Profit and Loss Statement
Key Financials: Profit and Loss Statement (1) FY19/7 FY20/7 FY21/7 FY22/7 FY23/7 FY24/7 JPY MM (Forecast) Net Sales 21,492 25,879 28,698 43,954 56,273 66,400 YoY Growth (%) 36.9% 20.4% 10.9% 53.2% 28.0% 18.0% HR Tech Segment 21,175 24,914 27,052 41,791 53,685 63,340 YoY Growth (%) 36.2% 17.7% 8.6% 5
Slide 45: Reconciliation: Adjusted Operating Profit before Corporate Expense Allocation
Reconciliation: Adjusted Operating Profit before Corporate Expense Allocation Reconciliation of Adjusted Operating Profit before Adjusted Headcount Corporate Expense Allocation to Operating Profit(1) by Function and Business (FY23/7 4Q)(6) JPY MM FY23/7 FY22/7 FY21/7 FY20/7 Adjusted % of subtotal fo
Slide 46: Key Financials: Balance Sheet
Key Financials: Balance Sheet (1) JPY MM JPY MM Liabilities and Assets FY19/7 FY20/7 FY21/7 FY22/7 FY23/7 FY19/7 FY20/7 FY21/7 FY22/7 FY23/7 Equity Current Assets 7,515 12,137 29,532 36,743 48,902 Current Liabilities 5,190 5,290 9,046 13,988 16,328 Cash and Cash 4,761 9,114 25,630 31,362 41,170 Acco
Slide 47: Key Financials: Cash Flow Statement
Key Financials: Cash Flow Statement (1) JPY MM FY19/7 FY20/7 FY21/7 FY22/7 FY23/7 Cash Flows from Operating Activities Pre-tax Profit(1) 393 7,023 2,290 8,717 14,377 Depreciation and Amortization of Goodwill(1) 231 547 670 846 1,230 Gain on Transfer of Business - (4,799) - - - Income Taxes Paid (332
Slide 48: Disclaimer
Disclaimer This document was prepared by Visional, Inc. (referred to as the “Company”, “Visional” or “we” herein) solely for informational purposes. This document does not constitute an offer to sell or a solicitation of an offer to buy any security of the Company in the United States, Japan or any