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Earnings presentation7374Interworks Confidence Inc.Information and Communications, Services and Others

FY2027 Second-Quarter Results Briefing Materials (Transcript)

First-half revenue increased due to the consolidation of M&A subsidiaries, reaching a record high for a first half. However, gross profit in the core businesses declined, resulting in a substantial decrease in operating profit. The full-year forecast was left unchanged, but first-half operating profit came in below the interim forecast.

Worth reading
74In focus
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Direction
Mixed performance
Direction inferred from the company’s description.
Scale
-245
¥ million (year-on-year decrease in operating profit)
Wording
Conditional
How definitive the wording is.

Contents of this document

Briefing transcriptSecond quarter of the fiscal year ending March 20279 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥5,126 million+8.7%
Operating profit¥431 million-36.3%
Ordinary income¥440 million -32.9%ordinary profit, as the company does not report under IFRS
Net income¥210 million -49.5%interim net income attributable to owners of the parent
Gross Profit Margin42.2 %-5.2%
Operating profit margin8.4 %-6.0%
Selling, general and administrative expensesSecond-quarter actual: 855
Results for the three months of the current quarter
Net Sales
¥2,593 million+0.8%
Operating profit
¥230 million-36.5%
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 net income attributable to owners of the parent
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 Sales44.6%
Operating profit29.6%
Ordinary income30.2%
Net income22.5%
HR Solutions Business: Staffing and Contract Services Revenue46.8%
HR Solutions Business: Recruitment Placement Revenue40.7%
Media & Solutions Business Revenue38.9%
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Both revenue and operating profit finished below the planned first-half progress rates. Operating profit finished below the interim forecast of ¥545 million.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Gross profit from core businesses, staffing and other businesses¥-73 million
  • Gross profit from recruitment placement and recruitment support businesses¥-102 million
  • Gross profit from the Media & Solutions Business¥-53 million
  • SG&A expenses of existing businesses¥-43 million
  • Increase in subsidiaries' gross profit¥158 million
  • Subsidiaries' personnel expenses¥-82 million
  • Other SG&A expenses of subsidiaries¥-8 million
  • Goodwill amortization¥-40 million
New initiatives
  • Made flaggs a consolidated subsidiary effective 1 October 2026
  • Bundled proposals covering game development and operations, including flaggs, contract services, team staffing, RPO and video production
  • Launch of specialized websites leveraging AI
  • Entry into media businesses in the semiconductor-related and construction management fields
  • Control of SG&A expenses through optimization of the organizational structure and personnel allocation
Key KPIsA metric the company considers important as a management benchmark.
  • Headcount in operation1,112 people
    Year on year against the same period last year+103.0%
  • Operating rate99.4 %
  • Placement value per consultant3.2 % versus the previous-year average
  • Number of consultants (average)61 people
  • Dividend yield5.8 %
Unit price and quantity metricsThese figures show sales broken down by price and volume.
  • Number of placementsIndex-based
    Year on year against the same period last yearDownward trend
  • Placement fee per transactionIndex-based
    Year on year against the same period last yearRemained at a high level
  • Placement value per consultant3.2 % versus the previous-year average
    Year on year against the same period last yearImproved
Segment results
  • HR Solutions Business: Staffing and Contract Services
    Net Sales3,768
    Revenue Unit¥ million
    Year-on-year revenue19.3
    Segment profit541
    Profit Unit¥ million
    Year-on-Year Change in Profit-7.9
  • HR Solutions Business: Recruitment Placement
    Net Sales809
    Revenue Unit¥ million
    Year-on-year revenue-14.1
    Segment profit237
    Profit Unit¥ million
    Year-on-Year Change in Profit-29.6
  • Media & Solutions Business
    Net Sales565
    Revenue Unit¥ million
    Year-on-year revenue-9
    Segment profit167
    Profit Unit¥ million
    Year-on-Year Change in Profit-26.9
Medium-term management plan targets
Target fiscal yearFiscal year ending March 2030
Net Sales¥20 billion
Operating profit¥3 billion
Financial targets
Equity ratio
Actual results83.5 %
ROIC
  • インターワークス
    Actual results17.2
  • BRAISE and ジーズ・コーポレーション
    Actual results38
Payout ratio
56.8 %
Year-on-Year Change (Points)-1.6
Contents of this document
ItemDetails
Document typeBriefing transcript
Fiscal Period CoveredSecond quarter of the fiscal year ending March 2027
Net Sales¥5,126 million (YoY +8.7%)
Operating profit¥431 million (YoY -36.3%)
Ordinary income¥440 million (ordinary profit, as the company does not report under IFRS) (YoY -32.9%)
Net income¥210 million (interim net income attributable to owners of the parent) (YoY -49.5%)
Gross Profit Margin42.2 % (YoY -5.2%)
Operating profit margin8.4 % (YoY -6.0%)
Selling, general and administrative expensesSecond-quarter actual: 855
Results for the three months of the current quarterNet Sales ¥2,593 million (YoY +0.8%) / Operating profit ¥230 million (YoY -36.5%)
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 (net income attributable to owners of the parent)
Progress against full-year forecastNet Sales 44.6% / Operating profit 29.6% / Ordinary income 30.2% / Net income 22.5% / HR Solutions Business: Staffing and Contract Services Revenue 46.8% / HR Solutions Business: Recruitment Placement Revenue 40.7% / Media & Solutions Business Revenue 38.9%
Self-assessment against the planBoth revenue and operating profit finished below the planned first-half progress rates. Operating profit finished below the interim forecast of ¥545 million.
Segment resultsSegment HR Solutions Business: Staffing and Contract Services / Net Sales 3,768 / Revenue Unit ¥ million / Year-on-year revenue 19.3 / Segment profit 541 / Profit Unit ¥ million / Year-on-Year Change in Profit -7.9, Segment HR Solutions Business: Recruitment Placement / Net Sales 809 / Revenue Unit ¥ million / Year-on-year revenue -14.1 / Segment profit 237 / Profit Unit ¥ million / Year-on-Year Change in Profit -29.6, Segment Media & Solutions Business / Net Sales 565 / Revenue Unit ¥ million / Year-on-year revenue -9 / Segment profit 167 / Profit Unit ¥ million / Year-on-Year Change in Profit -26.9
Breakdown of Factors Affecting the ChangeFactors Gross profit from core businesses, staffing and other businesses / Amount ¥-73 million, Factors Gross profit from recruitment placement and recruitment support businesses / Amount ¥-102 million, Factors Gross profit from the Media & Solutions Business / Amount ¥-53 million, Factors SG&A expenses of existing businesses / Amount ¥-43 million, Factors Increase in subsidiaries' gross profit / Amount ¥158 million, Factors Subsidiaries' personnel expenses / Amount ¥-82 million, Factors Other SG&A expenses of subsidiaries / Amount ¥-8 million, Factors Goodwill amortization / Amount ¥-40 million
Key KPIsIndicator name Headcount in operation / Value 1,112 people / Year on year against the same period last year 103 people, Indicator name Operating rate / Value 99.4 % / Year on year against the same period last year Not disclosed, Indicator name Placement value per consultant / Value 3.2 % (versus the previous-year average) / Year on year against the same period last year Not disclosed, Indicator name Number of consultants (average) / Value 61 people / Year on year against the same period last year Not disclosed, Indicator name Dividend yield / Value 5.8 % / Year on year against the same period last year Not disclosed
Unit price and quantity metricsIndicator name Number of placements / Value Index-based / Year on year against the same period last year Downward trend, Indicator name Placement fee per transaction / Value Index-based / Year on year against the same period last year Remained at a high level, Indicator name Placement value per consultant / Value 3.2 % (versus the previous-year average) / Year on year against the same period last year Improved
Medium-term management plan targetsTarget fiscal year Fiscal year ending March 2030 / Net Sales ¥20 billion / Operating profit ¥3 billion
Financial targetsEquity ratio Actual results 83.5 % / ROIC Subject インターワークス / Actual results 17.2 %, Subject BRAISE and ジーズ・コーポレーション / Actual results 38 % / ROE Not disclosed / Debt-to-equity ratio Not disclosed
Payout ratio56.8 %
New initiativesMade flaggs a consolidated subsidiary effective 1 October 2026, Bundled proposals covering game development and operations, including flaggs, contract services, team staffing, RPO and video production, Launch of specialized websites leveraging AI, Entry into media businesses in the semiconductor-related and construction management fields, Control of SG&A expenses through optimization of the organizational structure and personnel allocation
Items this document does not state (10)
Number of stores and locationsNumber of employeesAssumptions Underlying the Business OutlookRisk amount incorporated into the outlookAnnual DividendAcquisition of treasury sharesCapital expendituresOrders 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 the results of subsidiaries including BRAISE and ジーズ・コーポレーション were consolidated. The main factor behind the decline in operating profit was lower gross profit in the core businesses. In staffing and contract services, the decrease in average headcount in operation and the lower gross profit margin had an impact; in recruitment placement and recruitment support, the decline in orders in the second half of the previous fiscal year had an impact; and in media & solutions, the reduction in advertising budgets by major customers against the backdrop of the situation in the Middle East had an impact.

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FY2027 Second-Quarter Results Briefing Materials (Transcript) | Interworks Confidence Inc. (7374) timely disclosure | Komori