Improving profitability and strengthening the management foundation through in-house production

「Operating profit for the interim accounting period was ¥263 million, substantially exceeding the plan as profitability improvement efforts undertaken since the previous fiscal year progressed smoothly, compared with an operating loss of ¥479 million in the same period of the previous year. By restraining new graduate recruitment and mid-career recruitment aimed at improving utilization, the gross profit margin rose to 22.7%, up 6.1 percentage points year on year, while the ratio of selling, general and administrative expenses to revenue fell to 20.4%, down 0.8 percentage points year on year.」

「We believe that the rigorous focus on profit-oriented management in the fiscal year ended March 2025 has established a path to profitability recovery, which is progressing steadily toward operating margin targets of 5% in the fiscal year ending March 2026 and 10% in the fiscal year ending March 2027.」

「Strict cost control, including restraint of mid-career recruitment and more efficient training investment, improved the ratio of selling, general and administrative expenses to revenue year on year. As a result, the consolidated accounting period for the second quarter returned to operating profitability, while the operating loss for the interim consolidated accounting period improved by ¥71 million year on year to ¥479 million.」

「Through these initiatives, we will improve the gross profit margin and restore profitability, gradually raising the operating margin to 5% and then 10% over the medium term.」

「In the next fiscal year, as in the current fiscal year, we expect utilization and profitability to decline as we make upfront investments in new graduate and mid-career recruitment to expand our human capital with a view to the medium and long term. However, by implementing 3 improvement policies, namely, strengthening the sales structure through the separation of production and sales, further expanding a specialized company focused on non-Web-site operations, and improving the talent portfolio and fundamentally strengthening training through increased investment in mid-career recruitment, we will establish a high-growth model achieving a 25% increase in value-added sales and an operating margin of 10% in the fourth quarter of the fiscal year ending March 2024, in line with the target growth rate, and transition to a high-growth, high-profitability model achieving a 25% increase in value-added sales and an operating margin of 10% for the full fiscal year ending March 2025.」

「In this environment, our group will expand the number of digital creators, the source of profit, by strengthening the development of new customers and focusing on mid-career recruitment. At the same time, we will increase investment in specialist training and work to improve value-added sales per employee by reallocating creators to companies focused on high-unit-price fields.」

「This fiscal year, we will actively launch in-house companies specializing in high-value-added engineering fields and seek to strengthen profitability by achieving high unit prices and high utilization rates.」

「Operating profit improved by ¥67 million from the same quarter of the previous year, resulting in a profit for the first time in 6 quarters. The main factors were higher value-added sales per employee, improved utilization and lower fixed costs resulting from remote work.」

「This was mainly due to higher value-added sales per employee, lower expenses resulting from the widespread adoption of a work structure centered on remote work, and expense restraint resulting from delays in mid-career recruitment compared with the initial plan.」

「Effective 1 April 2020, our group carried out a merger in which the 7 consolidated subsidiaries, 株式会社エンゲージメント・ファースト, 株式会社メンバーズキャリア, 株式会社メンバーズエッジ, 株式会社メンバーズシフト, 株式会社メンバーズデータアドベンチャー, 株式会社メンバーズユーエックスワン and 株式会社メンバーズメディカルマーケティング, were absorbed and dissolved, with 株式会社メンバーズ as the surviving company. We reorganized each company’s business as an in-house company and strengthened our management foundation.」

「We decided to integrate sales and marketing, office strategy, recruitment, personnel allocation, training and administrative functions more comprehensively across the group, absorb and merge the 7 consolidated subsidiaries into our company, reorganize their businesses as in-house companies and strengthen our management foundation from the next fiscal year onward.」

「In addition, to achieve VISION2020, the management targets set for March 2020—1,000 employees, 50 EMC companies, ¥12 billion in revenue, and an operating margin of 12.5%—we made proactive investments during the six months ended 30 September, including further increasing new graduate hiring, increasing hiring at メンバーズキャリア, which provides permanent placements for digital creators, launching engineering placements, preparing for regional expansion including the opening of new locations by メンバーズエッジ, which operates a systems development services business, and establishing the aforementioned メンバーズシフト.」

「Our group aims to achieve further business expansion and strengthen its management foundation and earnings structure in order to sustainably improve service levels, invest in human resources and return profits to stakeholders.」

「This was due to the establishment of new subsidiaries, an increase of 2 consolidated subsidiaries through M&A, and business expansion, as well as reductions in overtime pay and other costs through in-house production and productivity improvement initiatives, in addition to delays in some areas of the planned proactive mid-career recruitment program.」

「Our group is also making proactive investments to sustain high profitability and high growth. As part of these efforts, we are developing services that enhance the satisfaction of customers using the EMC model and developing new businesses, including by improving UX (user experience) design capabilities through the acquisition of 株式会社ポップインサイト as a subsidiary, strengthening the data-driven marketing business, and providing marketing services for inbound travelers to Japan.」

「To sustain growth, our group will actively strengthen its EMC services, implement measures to improve productivity and invest in developing new businesses, thereby improving the sustainable service levels we provide.」

「With a view to the continued expansion of the digital marketing market, we will continue to invest actively in recruitment and training while working to establish a stronger management foundation.」

「In addition, we have continued since the previous fiscal year to strengthen profitability and our management foundation through measures to bring operations in-house, including expanding the number of new graduates hired and regional offices.」