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Financial results presentation7374Interworks Confidence Inc.Information and Communications, Services and Others

Earnings Presentation Materials for the First Quarter of the Fiscal Year Ending March 2027

Revenue increased 18.1% year on year, mainly due to the consolidation of subsidiaries, while operating profit declined 36.0% due to lower gross profit in the core businesses and costs related to the head office consolidation. Going forward, the Company will work to restore the earning power of its core businesses and reallocate management resources to growth areas.

Worth reading
71In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
-36
Year-on-year change in operating profit (%)
Wording
Conditional
How definitive the wording is.

Contents of this document

Financial results presentationFirst quarter of the fiscal year ending March 202711 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥2,532 million+18.1%
Operating profit¥201 million-36.0%
Ordinary income¥205 million-30.4%
Net income¥91 million-49.7%
Gross Profit Margin42.7 %
Operating profit margin7.9 %
Results for the three months of the current quarterRevenue of ¥2,532 million, gross profit of ¥1,080 million, operating profit of ¥201 million, ordinary profit of ¥205 million, and net income attributable to owners of the parent of ¥91 million. All figures are for Q1 on a standalone basis.
Full-year earnings forecast
Net Sales
¥11,500 million
Gross profit
¥5,159 million
Operating profit
¥1,460 million
Ordinary income
¥1,460 million
Net income
¥935 million
Progress against full-year forecast　通期の予想に対して、いまどこまで進んだかの割合です。
Net Sales22.0% (consolidated)
Operating profit13.8% (consolidated)
Revenue_Staffing & Outsourcing23.4%
Revenue_Recruitment18.5%
Revenue_Media & Solutions20.0%
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Revenue is tracking as expected, while operating profit is under pressure. Expansion of the business portfolio is proceeding as planned.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Gross profit from the staffing business-¥38 million
  • Gross profit from the recruitment and hiring-support business-¥51 million
  • Gross profit from the MS business-¥21 million
  • Other SG&A expenses (existing businesses)-¥8 million
  • Rent-¥26 million
  • Gross profit from newly consolidated subsidiaries+¥132 million
  • Personnel expenses of newly consolidated subsidiaries-¥60 million
  • Goodwill amortization-¥8 million
  • Other SG&A expenses (subsidiaries)-¥33 million
New initiatives
  • Launch of specialized websites leveraging AI
  • Solution sales combining recruitment media, RPO and recruitment services
  • Improving operational efficiency in the core businesses through the use of AI and external talent
  • Preparing to transition to a group management structure through a company split from October 2026
  • Launch of specialized-area media based on the 17 strategic fields of the Japan Growth Strategy
Key KPIsA metric the company considers important as a management benchmark.
  • Number of active personnel1,098 people
    Year on year against the same period last year+205 people
  • Utilization rate99.2 %
  • Consultant bookings value index per consultant104 Q1 FY2024 = 100
    Year on year against the same period last year+10.4% (versus the previous-year average)
  • Number of job listings19,463 jobs quarterly average
  • Number of customers960 companies cumulative quarterly total
  • Customer unit price index91 Q1 FY2024 = 100
Unit price and quantity metricsThese figures show sales broken down by price and volume.
The Company discloses the number of active staff, number and unit value of placements, bookings value per consultant, number of job postings, and number of business customers and customer unit prices.
Segment results
  • HR Solutions business: staffing and outsourcing
    Net Sales¥1,881 million (+35.4% year on year)
    Segment profit¥275 million (-6.5% year on year)
  • HR Solutions Business: Recruitment
    Net Sales¥369 million (-16.9% year on year)
    Segment profit¥99 million (-31.6% year on year)
  • Media and solutions business
    Net Sales¥289 million (-7.0% year on year)
    Segment profit¥87 million (-24.3% year on year)
Medium-term management plan targets
Targets for FY2030 are revenue of ¥20.0 billion and operating profit of ¥3.0 billion. Business-specific targets are ¥8.0 billion for games and entertainment, ¥3.0 billion for IT and Web, ¥3.0 billion for media and advertising, ¥3.0 billion for the recruitment business, and ¥3.0 billion for the M&S business.
Financial targets
The Company lists a payout ratio of over 30% and DOE of over 10% as future targets. Actual results were ROE of 15.1%, an equity ratio of 82.4%, and DOE of 8.5%.
Capital expenditures
¥28 millions purchases of property, plant and equipment
Annual Dividend
Annual dividend of ¥85 per share (¥40 interim and ¥45 year-end planned)
Payout ratio
56.8% (58.4% in the previous fiscal year, down 1.6 percentage points from the previous fiscal year, not year on year). Future targets are a payout ratio of over 30% and DOE of over 10%.
Contents of this document
ItemDetails
Document typeFinancial results presentation
Fiscal Period CoveredFirst quarter of the fiscal year ending March 2027
Net Sales¥2,532 million (YoY +18.1%)
Operating profit¥201 million (YoY -36.0%)
Ordinary income¥205 million (YoY -30.4%)
Net income¥91 million (YoY -49.7%)
Gross Profit Margin42.7 %
Operating profit margin7.9 %
Results for the three months of the current quarterRevenue of ¥2,532 million, gross profit of ¥1,080 million, operating profit of ¥201 million, ordinary profit of ¥205 million, and net income attributable to owners of the parent of ¥91 million. All figures are for Q1 on a standalone basis.
Full-year earnings forecastNet Sales ¥11,500 million / Gross profit ¥5,159 million / Operating profit ¥1,460 million / Ordinary income ¥1,460 million / Net income ¥935 million
Progress against full-year forecastNet Sales 22.0% (consolidated) / Operating profit 13.8% (consolidated) / Revenue_Staffing & Outsourcing 23.4% / Revenue_Recruitment 18.5% / Revenue_Media & Solutions 20.0%
Self-assessment against the planRevenue is tracking as expected, while operating profit is under pressure. Expansion of the business portfolio is proceeding as planned.
Segment resultsSegment HR Solutions business: staffing and outsourcing / Net Sales ¥1,881 million (+35.4% year on year) / Segment profit ¥275 million (-6.5% year on year), Segment HR Solutions Business: Recruitment / Net Sales ¥369 million (-16.9% year on year) / Segment profit ¥99 million (-31.6% year on year), Segment Media and solutions business / Net Sales ¥289 million (-7.0% year on year) / Segment profit ¥87 million (-24.3% year on year)
Breakdown of Factors Affecting the ChangeFactors Gross profit from the staffing business / Amount -¥38 million, Factors Gross profit from the recruitment and hiring-support business / Amount -¥51 million, Factors Gross profit from the MS business / Amount -¥21 million, Factors Other SG&A expenses (existing businesses) / Amount -¥8 million, Factors Rent / Amount -¥26 million, Factors Gross profit from newly consolidated subsidiaries / Amount +¥132 million, Factors Personnel expenses of newly consolidated subsidiaries / Amount -¥60 million, Factors Goodwill amortization / Amount -¥8 million, Factors Other SG&A expenses (subsidiaries) / Amount -¥33 million
Key KPIsIndicator name Number of active personnel / Value 1,098 people / Year on year against the same period last year +205 people, Indicator name Utilization rate / Value 99.2 % / Year on year against the same period last year Not disclosed, Indicator name Consultant bookings value index per consultant / Value 104 Q1 FY2024 = 100 / Year on year against the same period last year +10.4% (versus the previous-year average), Indicator name Number of job listings / Value 19,463 jobs (quarterly average) / Year on year against the same period last year Not disclosed, Indicator name Number of customers / Value 960 companies (cumulative quarterly total) / Year on year against the same period last year Not disclosed, Indicator name Customer unit price index / Value 91 Q1 FY2024 = 100 / Year on year against the same period last year Not disclosed
Unit price and quantity metricsThe Company discloses the number of active staff, number and unit value of placements, bookings value per consultant, number of job postings, and number of business customers and customer unit prices.
Medium-term management plan targetsTargets for FY2030 are revenue of ¥20.0 billion and operating profit of ¥3.0 billion. Business-specific targets are ¥8.0 billion for games and entertainment, ¥3.0 billion for IT and Web, ¥3.0 billion for media and advertising, ¥3.0 billion for the recruitment business, and ¥3.0 billion for the M&S business.
Financial targetsThe Company lists a payout ratio of over 30% and DOE of over 10% as future targets. Actual results were ROE of 15.1%, an equity ratio of 82.4%, and DOE of 8.5%.
Annual DividendAnnual dividend of ¥85 per share (¥40 interim and ¥45 year-end planned)
Payout ratio56.8% (58.4% in the previous fiscal year, down 1.6 percentage points from the previous fiscal year, not year on year). Future targets are a payout ratio of over 30% and DOE of over 10%.
Capital expenditures¥28 millions (purchases of property, plant and equipment)
New initiativesLaunch of specialized websites leveraging AI, Solution sales combining recruitment media, RPO and recruitment services, Improving operational efficiency in the core businesses through the use of AI and external talent, Preparing to transition to a group management structure through a company split from October 2026, Launch of specialized-area media based on the 17 strategic fields of the Japan Growth Strategy
Items this document does not state (9)
Selling, general and administrative expensesNumber of stores and locationsNumber of employeesAssumptions Underlying the Business OutlookRisk amount incorporated into the outlookAcquisition of treasury sharesOrders received and order backlogMarket Size / ShareKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

Revenue increased as BRAISE and ジーズ・コーポレーション were consolidated from the start of the fiscal year. However, profit from the core businesses declined due to a decrease in the number of active temporary staff and a lower gross profit margin in the staffing business, lower orders in the second half of the previous fiscal year in the recruitment and hiring-support business, and reduced advertising budgets among major customers in the MS business. Rent, advertising expenses, personnel expenses and goodwill amortization related to the consolidation of the Shinjuku head office also weighed on profit.

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Earnings Presentation Materials for the First Quarter of the Fiscal Year Ending March 2027 | Interworks Confidence Inc. (7374) timely disclosure | Komori