DIP : Q&A Summary of Financial Results for FY'22/2 Q1（465KB）

Q&A Summary of Financial Results for the First Quarter

of the Fiscal Year Ending February 28, 2022

This question-and-answer booklet is a compilation of the main questions asked by the attendees at the financial results briefing. Some of the content has been added or revised to facilitate understanding.

• Regarding the Personnel Recruiting Service Business

Q1. What industries are driving the recovery of sales in the personnel recruiting services business, and which industries are experiencing a slower recovery?

A1.As a result of the COVID-19 pandemic, as a ratio of contribution to sales, the food/restaurant and service sectors declined by approximately 10 pts, while the contribution ratio of the medical/nursing care and light work/logistics domains increased. Sales over the first quarter were bolstered due to continued growth in the medical/nursing care and light work/logistics domains, as well as a recovery in the food/restaurant and service domains, which had been impacted significantly by the pandemic.

Q2. Baitoru has demonstrated a steady recovery in the number of contracts in comparison with your competitors. Taking into account the situation of those competitors, can you tell us what the factors behind this recovery have been? (P20)

A2. Although we do not have detailed information on our competitors, we have heard that the impact of the COVID-19 pandemic has prompted them to concentrate their sales forces, advertising investments, and other management resources on higher-unit-price businesses, such as placement and recruiting and permanent staffing. With this situation as a tailwind, we believe that we have been able to strengthen our competitive advantage, including our sales force, in the mainstay part-time and temporary staffing fields.

Q3. While the number of subscriber companies with Baitoru is recovering, the unit price per contract per company has not recovered much. Do you expect the unit price per contract per company to increase rapidly as demand for jobs recover in the near future?

A3. During the COVID-19 pandemic, the number of client companies hiring has been low and it is therefore easy to gather the necessary number of applications in a short period of time. When there is a sudden recovery in demand for jobs, there will be a rush of requests to post job ads, making it impossible to hire the necessary number of people without spending money, and the unit price per contract per company is expected to recover rapidly. In addition, we will continue to work to increase the unit price per contract per company by up-selling multiple products, including DX products.

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Q4. Please tell us about the amount of investment in advertising and publicity for Baitoru PRO in the first quarter and the sales forecast for this fiscal year.

A4. In the first quarter of the current fiscal year, advertising investment for Baitoru PRO has been minimal; full-scale promotion will begin in the second quarter, including the start of TV commercials on July 8, 2021.

As the service was launched on May 19, 2021, it will contribute little to sales in the first quarter. In the medium term, we aim to grow faster than existing specialized job sites by leveraging our direct sales force and broad customer base, which are unmatched by our competitors, and by conducting large-scale mass promotions.

• Regarding the DX Business

Q5. What are the factors that pushed the DX business into the black? (P3)

A5. As a result of the lifting of the state of emergency declaration in March 2021 and the corresponding recovery in demand for recruiting, sales of the Interview KOBOT, which is sold in combination with job advertisement services, expanded. Additionally, the transfer of the Recruiting Page KOBOT (formerly 'Baitoru RHP') from the personnel recruiting services business to the DX business, pushed sales in the DX business higher than expected over the first quarter. In the future, if sales are higher than expected, the business may again become profitable over the span of a single month, but it also depends on sales promotions, the release of new products and investment in hiring. We expect to deliver a consistently profitable earnings structure from December 2021 onward.

Q6. The number of companies subject to monthly payment in the DX businessas of May 2021 was approximately 4,800. What is your assessment of the progress toward the target KPI (13,000 companies as of February 2022)? (P13)

A6. In April and May 2021, the declaration of a state of emergency affected the placement of job advertisements, and the number of companies subject to monthly payment in the DX business, particularly for Interview KOBOT, was also affected. Despite these circumstances, the number of companies subject to monthly payment in June 2021 increased sharply as a result of strengthening ties with the personnel recruiting services business and promoting set sales with the personnel recruiting services. From the second quarter onward, we believe that we will be able to achieve our target KPI by increasing the number of companies subject to monthly payment in line with the rapid recovery in job demand through the launch of new services and further strengthening of collaboration with the personnel recruiting services business.

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• Regarding Expenses Related to the Company as a Whole

Q7. What are your prospects for improving the efficiency of advertising expenses through the use of social networking services and apps to engage users?

A7. While continuing to work on improving the efficiency of advertising expenses, by taking measures to improve the conversion rate and expand the application rate via the app, from the second quarter onward, we will strategically invest in advertising, taking into account cost-effectiveness and the advertising expenses-to-sales ratio, and viewing the period of rapid recovery in demand for jobs as a good opportunity to expand market share. The ratio of advertising expenses to net sales for the full year ending February 28, 2022 is expected to be around the same level as it was prior to COVID-19 (fiscal year ending February 29, 2020).

Q8.What are the costs involved in participating in the professional dance league "D.LEAGUE" (P33)?

A8. The operating costs associated with the professional dance league "D.LEAGUE" are low compared to other professional sports leagues such as soccer and baseball. On the other hand, its contribution to user recognition and corporate branding is high, and we believe it is an efficient investment. In addition, the cost of participating in the "D.LEAGUE" has been factored into the operating forecast and will not have a significant impact on operating income.

(Note) English documents are prepared as a courtesy to our stakeholders. In the event of any inconsistency between English-language documents and the Japanese-language documents, the Japanese-language documents will prevail.

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