Eole : Financial Results for the First Quarter of the Fiscal Year Ending March 31 2021

Excerpted version

Financial Results

for the First Quarter of the Fiscal Year Ending March 31, 2021

eole Inc.

(TSE Mothers, Securities Code: 2334)

August 14, 2020

Unless otherwise specified, this English-language version of the financial results of eole Inc. has been prepared solely for the convenience of non-Japanese speakers. Should there be any inconsistencies between the English and the Japanese versions, please note that the Japanese version will always prevail.

Table of Contents

1. Business Results for 1Q FY03/21 and Forecast for FY03/21

1. Business Review for FY03/21

1. Other

1

I

Business Results for 1Q FY03/21 and Forecast for FY03/21

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1. Business Results for 1Q FY03/21 and Forecast for FY03/21

The translation of Chapter I is omitted.

Regarding our business results for 1Q FY03/21 and forecast for FY03/21, refer to the "Company Report" prepared by Walden Research Japan Incorporated posted on our website as of August 19, 2020.

URL:Company Report by Walden Research Japan

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3

Business Review for Ⅱ FY03/21

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Business Review for FY03/21

1. Launch of HR Ads Platform
   Expansion of "pinpoint and Other
2. Programmatic Ads" Expansion of New Graduate
3. Recruitment Sales Development Status of
4. Proprietary Media

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5

Selection and Concentration of Our Business

• We advocate the selection and concentration of our business in the era of coexisting with COVID-19 and prioritize profitability to construct infrastructure for redrawing the growth curve.

Business focus

HR Ads Platform

pinpoint and Other Programmatic Ads

New Graduate Recruitment Sales

Customer Advertising

Business to reinforce after

economic recovery

Gakuba Arbeit, Rakuraku Arbeit

• By incorporating the concepts of bidding and automatic ad delivery into recruitment media advertising, we lead the change in the recruitment advertising industry from face-to-face sales to sales by ad technology, corresponding to the era of coexisting with COVID-19.
• Focus on the business that has potential for player change while coexisting with COVID-19.
• Renew sales initiatives with a strategic sales partner.
• Support our sales by focusing customer advertising, for which sales are thought to recover relatively soon.
• Because of the dramatic decrease in the number of job listings, Gakuba Arbeit and Rakuraku Arbeit will be reinforced after the economic recovery.
• Proprietary media are in the maintenance phase.

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6

1. Launch of HR Ads Platform ― Overview

• Employers can automatically post job advertisements from abundant job posting manuscripts on ATSs, including JOBOLE, to job advertisement spaces on each medium.
• For posting, bidding such as cost per click (CPC) or cost per acquisition (CPA) is adopted. Every click or acquisition generated revenue, and we pay a commission to the media.

Demand side			Supply side
Employer				Medium
A				A
		CPC
Employer	ATS* A	Bidding	Posting	Medium
B		CPA		B
			Job
				seekers
Employer	ATS B			Medium
C				C

* Refer to "Glossary" at the end of this material.

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7

1. Launch of HR Ads Platform ― Strategic Concept

• We have various channels for job seekers through SNS, recruitment media, aggregation sites and recruitment pages of clients.

• We aim to become a market leader in the new job advertising market by providing appropriate recruitment channel to advertisers through our operation.

			Trading desk	Social media
			Facebook/ Twitter /
		DM P	LINE / Instagram ……
d A				Job search media
re v		HR Ads Platform
	Provide digital ad space
i t				for placing programmatic
			ads via SSP
e s			Bid
s r
		Link	Aggregation portal
			site /engines
		Building websites/Advertisement/	Indeed / Kyujinbox/
		Purchasing digital ad space	Google for Jobs/Stanby ……

s r e k e e s b o J

Recruitment pages of clients

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8

1. Launch of HR Ads Platform ― Roadmap for FY03/21

Phase 1		Phase 2	Phase 3
	Service launch	Link with four	Link with other
	kinds of media	media/ATSs

2020

2021

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Backbone

Backbone system development

Additional backbone system development

system

Early

Mid

(platform)

Launch

Launch

Demand side

Link with JOBOLE

Early

Link with other ATSs

Late

(ATS to

Launch

Launch

advertisers)

★ Release the platform to

link with other ATSs

1) Link with a portal medium

Early

Launch

Generalization of linking

Supply side

2) Link with a temp agency's medium

with other media

Late

(media to job

Late

Launch

Launch

seekers)

3) Link with recruitment ASP

Early

	Launch
	4) Link of job ad medium
	Late ★ Start to link with other
	Launch	media
			9
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1. Launch of HR Ads Platform ― Growth Strategy

Growth Concept of HR Ads Platform

Enhancing first- mover advantage

FY03/21	FY03/22～ FY03/24	FY03/25
• Link with four kinds of	• Promotion to link with other media based on	• Link with major media
media	linkages with four kinds of media	• Development of
• Backbone system	• Increase in purchasing ad spaces on HR Ads	additional peripheral
development	platform	functions
• Development	• Building of efficient development system
generalization for
linkage with media

	• Launch	• Accumulation of operational know-how and	• Completion of opening
Increasing	• Open HR Ads Platform	analysis of advertisers	HR Ads Platform to
to other ATSs	• Enhancement of the administrator's screen	other ATSs
advertisers		• Expansion of JOBOLE	• Automated operation
			including AI
	• Launch the first	• Ensuring the same amount as major job ad	• Become a market
Remarks	programmatic job	media regarding the number of job posting	leader in the new job
advertising platform	manuscripts	ad market
	in Japan

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10

2. Expansion of "pinpoint and Other Programmatic Ads"

What is	Content	Strengths	Future development
necessary to
succeed
		Hold high-quality	Holding high quality data	In addition to the measures
		audience data	through the "Rakuraku	to increase membership for
1.	Competitive	including	Contact Network." This data	Rakuraku Contact Network,
attribute data,	is very important in the job	we advocate alliances with
	data (DMP)	which is most	ad market.	other data suppliers and
		important, in		finding new partner
		volume.		companies, thus expanding
				our data.
		Accumulate	On "Indeed," which is a	We will demonstrate our
		know-how of	programmatic job ad,	presence in the process
		programmatic	JOBOLE has the unique	transferred from the sales
2.	Operation	ads in the job ad	operational method and	power game to the
market (including	know-how to achieve a high	operational power game
know-how
linkage with large	conversion rate. Also, it has	(effect) such as the era of
		social media and	considerable experience for	search advertising
		job search	linkage with large social	expansion in the 2000s.
		engines).	media.
	Number of	Market share by	By utilizing JOBOLE as a	We will expand JOBOLE and
3.	handling the	pump-priming tool, we can	the HR Ads Platform.
Job Listing	number of	acquire job seekers through
	Manuscripts	manuscripts	"pinpoint and other
			programmatic ads."

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11

2. Expansion of "pinpoint and Other Programmatic Ads"

(Continued)

• Continue to expand "pinpoint and other programmatic ads" while carefully observing the industry, business and employment pattern.

(Millions of yen)	Sales
450
400
350	(45.9%)
300

1Q FY03/21

Sales Ratio

Other

8.6%

Proprietary

250

media

pinpoint and

200	397
150
100		215
50
0
1Q FY03/20	1Q FY03/21

18.3% other programmatic ads

73.1%

1Q FY03/20

(YoY)72.1％

FY03/2068.6％

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12

2. Expansion of "pinpoint and Other Programmatic Ads"

― Progress of JOBOLE

(原稿) 30,000

20,000

10,000

0

Linkage

Released functions

Number of Job Listing Manuscripts*			YoY
	+58.1%

FY03/19 4 Q	FY03/20 1 Q		2 Q		3 Q		4 Q	FY03/21 1 Q
Mar	JOBOLE	Apr	Linkage with	Aug	Linkage with	Oct	Linkage with
released	Indeed	Kyujinbox	Stanby
		Jun	Corresponding				(Yahoo!
		with Google				Shigoto
			for Jobs				Kensaku)
		May	Optimization of	Jul	• Improvement	Oct	Improvement	Jan	• Prevention of	Apr	Addition of
		displayed	of usability on	of import	duplicate job	message
			recruitment		JOBOLE		function		manuscripts		function and
			page on		management		through		and		dashboard
			smartphones		screen		JOBOLE		optimization		function
					• Improvement		management		of job posting	Jun	Release of new
					of import		screen		• Promotion of	price plan
					function on				sort function
					JOBOLE				on job
					management				management
					screen				screen
					• Improvement			Mar	Development
					of feed job			of visualization
					information				feature for
					from JOBOLE				companies'
					to linked job				recruitment
					search				progress
					engines

• The number of job manuscripts is the figure listing on JOBOLE at the end of each quarter.	13
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3. Expansion of New Graduate Recruitment Sales

• We focus on new graduate recruitment sales with a strategic sales partner, and increase the number of contracts steadily after starting nationwide development in July.

Review of recruitment approach

due to the impact of COVID-19

• Cancellation of internship
• Cancellation of large-scale events such as joint corporate information sessions for job hunting

Discontinue hiring guideline for new graduates in 2021 due

to the decision by Keidanren

• Diversification of recruitment schedules (all-year recruiting activities for new graduates)
• Global recruitment

A big change in hiring new graduates

• Trend of earlier recruitment activities
• Diversification of recruitment activities and approaches

We will aggressively expand our share of new graduate recruitment, such as gathering job seekers through websites using pinpoint DMP, which has abundant data on university students.

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14

4. Development Status of Proprietary Media

― Transition to maintenance/operation phase of proprietary media

• Development of Gakuba Arbeit was finished in January 2020, and development of Rakuraku Arbeit was finished except for linkage in April 2020. Both are in the maintenance phase.
• A new app for Rakuraku Contact Network will be released in August to reduce operating costs. Through these developments, future maintenance and operation costs can be reduced.

Gakuba Arbeit

Rakuraku Arbeit

	FY03/20	FY03/21	2 Q	・・・
	4 Q	1 Q

• Development finished in Jan.

Invest

-mentOperation phase

phase

To simplify membership registration

• Development finished except for linkages in Apr.

RakurakuContactNetwork

Investment

phase

To improve functions

Operation phase

• A new app will be released on late August

Investment phase	Operation
phase
To reduce operation cost

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15

Our Response and Business Impact to the Spread of COVID-19

• We are investigating and implementing countermeasures according to the infection situation, while prioritizing the safety of our employees and clients.
• Telework has also accelerated.

Wo r k s y s t e m

• Late February: Implemented staggered working hours by expanding flexible working hours
• Late March: Implemented a work system based on teleworking
• Early April: Implemented temporary leave in some departments
• June 1: Implemented work system combining teleworking and office working
• August 1: Standardized teleworking and advocated for a more flexible work style

Wo r k s t y l e

• Implement teleconference and internet conference, prohibit non-urgent business trips and maintain a hygienic environment, such as by wearing masks.
• We have been promoting the acquisition of potential clients through websites since last year and using new sales methods such as online sales negotiation.

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16

Our Response and Business Impact to the Spread of

COVID-19 (Continued)

• Develop proactive initiatives and respond to a changing society.

Re s p o n s e t o s o c i a l c h a n g e s

• Changed our organization as of June 1. Established a new organization corresponding to the era of coexisting with COVID-19.
• Preparing for advertisers that will resume recruitment activities after the end of COVID-19 and recontacting dormant clients.
• Building a system to efficiently acquire leads (potential clients) for accepting orders.

• Inside sales from lead nurturing For example, we published white papers dedicated to university student marketing on July 1.

https://daigaku-koukoku.com/download/

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( "Daigakusei-Koukoku Navi" by eole Inc. )

17

Glossary

Term	Definition
ATS (Applicant Tracking	A unified management system for supporting the recruitment process of companies, from job
System)	application to hiring.
CPC (Cost Per Click)	CPC (Cost per click) has two different meanings. One is the cost per click of a user through
advertisement, while the other is the unit price of a pay-per-click advertising transaction.
CPM (Cost Per Mille)	Cost of 1,000 ad reach or exposure.
DMP (Data Management	A platform for managing data such as website access logs, purchase data and advertising data
Platform)	and optimizing a company's marketing activities by utilizing said data.
DSP (Demand Side	A demand-side platform (DSP) is an ad delivery system that conducts RTB (real-time bidding)
Platform)	to many ad spots on websites based on user action history and their attribution.
pinpoint DMP	DMP developed by eole. pinpoint DMP has abundant user data being encrypted and not
identifying any personal information which enables ad distribution and marketing surveys
	utilizing user information taken from Rakuraku Contact Network and affiliated companies.
	An auction system for digital advertisement space. Every time a user visits a website
RTB (Real-Time Bidding)	(impression), user information from cookie and advertisement space information such as
minimum bid price are instantly sent to DSPs. Advertisements with the highest bids are
	displayed.
SSP (Supply-Side	A supply-side platform is a platform that maximizes media revenue, including websites, apps,
Platform)	etc. An advertisement offering the highest price for the ad space is displayed through SSP.
Ad exchange	A platform coordinating advertisement space stock and demand among DSPs, SSPs and ad
networks, in addition to advertising agencies.
Ad network	An advertising network for ad distributable media such as websites, social media, and blogs. It
can deliver ads all at once.
Programmatic ad	An advertising method that automatically or instantly assists with the optimization of an
advertisement with a platform processing huge volumes of data. This includes search ads and
	some ad networks. Typical examples are DSPs, ad exchanges, and SSPs.
Trading desk	An agency service which manages digital advertisements using DSP and the other platforms,
etc.

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18

Disclaimer

In preparing all of this material, eole Inc. relied upon and assumed the accuracy and completeness of all available information. However, we make no representations or warranties of any kind, express or implied, about the completeness and accuracy.

This presentation also contains forward-looking statements. Actual results, performance and achievements are subject to various risks and uncertainties. Accordingly, actual results may differ significantly from those expressed or implied by forward-looking statements. Readers are cautioned against placing undue reliance on forward-looking statements.

Third parties are not permitted to use and/or disclose this material and the contents herein for any other purpose without the prior written consent of eole Inc.

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