Quarterly trends and results

Earnings (cumulative)		FY03/21				FY03/22				FY03/23				FY03/23
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	(% of forecast)	FY Est.
Revenue		21,079	42,006	63,574	85,811	21,537	42,645	64,338	86,293	22,586	44,942	67,945	91,575	100.1%	91,454
	YoY	-0.7%	-1.4%	-1.1%	-0.2%	2.2%	1.5%	1.2%	0.6%	4.9%	5.4%	5.6%	6.1%		6.0%
Gross profit		5,845	11,277	16,984	22,861	5,641	10,974	16,325	21,802	5,634	11,104	16,722	22,779
	YoY	-2.7%	-3.9%	-3.4%	-2.6%	-3.5%	-2.7%	-3.9%	-4.6%	-0.1%	1.2%	2.4%	4.5%
	Gross profit margin	27.7%	26.8%	26.7%	26.6%	26.2%	25.7%	25.4%	25.3%	24.9%	24.7%	24.6%	24.9%
SG&A expenses		5,049	10,039	14,944	20,158	4,880	9,739	14,537	19,327	5,098	10,360	15,363	20,525
	YoY	-7.4%	-6.8%	-7.3%	-6.1%	-3.3%	-3.0%	-2.7%	-4.1%	4.5%	6.4%	5.7%	6.2%
	SG&A ratio	23.9%	23.9%	23.5%	23.5%	22.7%	22.8%	22.6%	22.4%	22.6%	23.1%	22.6%	22.4%
Operating profit		796	1,238	2,040	2,703	761	1,235	1,788	2,474	536	744	1,359	2,254	77.7%	2,900
	YoY	44.5%	28.5%	39.9%	35.0%	-4.4%	-0.3%	-12.3%	-8.4%	-29.6%	-39.7%	-24.0%	-8.9%		17.2%
	Operating profit margin	3.8%	2.9%	3.2%	3.1%	3.5%	2.9%	2.8%	2.9%	2.4%	1.7%	2.0%	2.5%		3.2%
Recurring profit		828	1,439	2,423	3,254	845	1,357	1,958	2,711	610	892	1,548	2,517	85.7%	2,936
	YoY	51.8%	45.0%	60.2%	52.9%	2.0%	-5.7%	-19.2%	-16.7%	-27.8%	-34.3%	-20.9%	-7.2%		8.3%
	Recurring profit margin	3.9%	3.4%	3.8%	3.8%	3.9%	3.2%	3.0%	3.1%	2.7%	2.0%	2.3%	2.7%		3.2%
Net income		450	751	1,350	1,440	476	809	1,142	1,647	380	561	854	1,452	83.4%	1,742
	YoY	120.8%	74.6%	99.2%	69.7%	5.6%	7.7%	-15.5%	14.4%	-20.2%	-30.7%	-25.2%	-11.8%		5.8%
	Net margin	2.1%	1.8%	2.1%	1.7%	2.2%	1.9%	1.8%	1.9%	1.7%	1.2%	1.3%	1.6%		1.9%
Earnings (quarterly)		FY03/21				FY03/22				FY03/23
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Revenue		21,079	20,926	21,569	22,237	21,537	21,108	21,694	21,955	22,586	22,356	23,003	23,630
	YoY	-0.7%	-2.0%	-0.5%	2.3%	2.2%	0.9%	0.6%	-1.3%	4.9%	5.9%	6.0%	7.6%
Gross profit		5,845	5,433	5,707	5,877	5,641	5,333	5,352	5,477	5,634	5,470	5,618	6,056
	YoY	-2.7%	-5.3%	-2.4%	0.1%	-3.5%	-1.8%	-6.2%	-6.8%	-0.1%	2.6%	5.0%	10.6%
	Gross profit margin	27.7%	26.0%	26.5%	26.4%	26.2%	25.3%	24.7%	24.9%	24.9%	24.5%	24.4%	25.6%
SG&A expenses		5,049	4,991	4,904	5,215	4,880	4,859	4,798	4,791	5,098	5,262	5,002	5,162
	YoY	-7.4%	-6.2%	-8.4%	-2.2%	-3.3%	-2.6%	-2.2%	-8.1%	4.5%	8.3%	4.3%	7.8%
	SG&A ratio	23.9%	23.8%	22.7%	23.5%	22.7%	23.0%	22.1%	21.8%	22.6%	23.5%	21.7%	21.8%
Operating profit		796	442	802	662	761	474	554	686	536	208	615	895
	YoY	44.5%	7.1%	62.2%	21.7%	-4.4%	7.2%	-31.0%	3.6%	-29.6%	-56.1%	11.1%	30.4%
	Operating profit margin	3.8%	2.1%	3.7%	3.0%	3.5%	2.2%	2.6%	3.1%	2.4%	0.9%	2.7%	3.8%
Recurring profit		828	610	984	830	845	512	601	754	610	282	656	969
	YoY	51.8%	36.7%	89.4%	35.0%	2.0%	-16.2%	-38.9%	-9.2%	-27.8%	-44.9%	9.2%	28.5%
	Recurring profit margin	3.9%	2.9%	4.6%	3.7%	3.9%	2.4%	2.8%	3.4%	2.7%	1.3%	2.9%	4.1%
Net income		450	301	599	90	476	333	333	505	380	181	294	598
	YoY	120.8%	33.0%	141.9%	-47.5%	5.6%	10.7%	-44.5%	464.6%	-20.2%	-45.7%	-11.7%	18.3%
	Net margin	2.1%	1.4%	2.8%	0.4%	2.2%	1.6%	1.5%	2.3%	1.7%	0.8%	1.3%	2.5%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

By segment (cumulative)				FY03/21				FY03/22				FY03/23				FY03/23
(JPYmn)				Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	(% of forecast)	FY Est.
Revenue				21,079	42,006	63,574	85,811	21,537	42,645	64,338	86,293	22,586	44,942	67,945	91,575	100.1%	91,454
	YoY			-0.7%	-1.4%	-1.1%	-0.2%	2.2%	1.5%	1.2%	0.6%	4.9%	5.4%	5.6%	6.1%		6.0%
	Human Resources			12,348	24,361	36,697	49,495	12,527	24,812	37,560	50,401	12,997	25,941	39,340	53,368
		YoY		3.9%	1.7%	1.0%	1.6%	1.4%	1.9%	2.3%	1.8%	3.8%	4.6%	4.7%	5.9%
	Education			5,714	11,535	17,507	23,723	5,810	11,330	16,850	22,666	6,147	12,153	18,251	24,506
		YoY		-9.0%	-7.1%	-5.4%	-4.3%	1.7%	-1.8%	-3.7%	-4.5%	5.8%	7.3%	8.3%	8.1%
	Senior Care			2,502	5,129	7,801	10,438	2,726	5,525	8,364	11,080	2,833	5,654	8,539	11,319
		YoY		-0.8%	0.5%	1.1%	1.8%	8.9%	7.7%	7.2%	6.1%	3.9%	2.3%	2.1%	2.2%
	Other			777	1,540	2,410	3,309	649	1,341	2,200	3,101	917	1,775	2,673	3,504
		YoY		-8.6%	-14.1%	-11.0%	-5.9%	-16.4%	-13.0%	-8.7%	-6.3%	41.3%	32.4%	21.5%	13.0%
	Intersegment elimination, companywide revenue			-262	-560	-841	-1,155	-174	-363	-635	-956	-308	-582	-858	-1,122
External revenue				21,075	41,997	63,561	85,800	21,533	42,637	64,327	86,279	22,582	44,934	67,933	91,575
	YoY			0.0%	-1.4%	-1.1%	-0.2%	2.2%	1.5%	1.2%	0.6%	4.9%	5.4%	5.6%	6.1%
	Human Resources			12,291	24,255	36,552	49,310	12,488	24,739	37,447	50,244	12,955	25,853	39,203	53,178	101.9%	52,200
		YoY		3.9%	1.7%	1.0%	1.7%	1.6%	2.0%	2.5%	1.9%	3.7%	4.5%	4.7%	5.8%		3.9%
		Temporary staffing		10,771	21,379	32,468	43,800	11,333	22,575	34,332	46,075	11,877	23,749	35,969	48,337
			YoY	3.4%	1.9%	1.7%	2.6%	5.2%	5.6%	5.7%	5.2%	4.8%	5.2%	4.8%	4.9%
		Outsourcing services		708	1,434	2,009	2,649	555	1,107	1,628	2,203	556	1,149	1,823	2,732
			YoY	7.3%	7.1%	1.1%	-1.5%	-21.6%	-22.8%	-19.0%	-16.8%	0.2%	3.7%	12.0%	24.0%
		Job placement services		567	921	1,262	1,701	444	737	990	1,247	336	582	852	1,162
			YoY	15.2%	-5.9%	-12.2%	-12.9%	-21.7%	-20.0%	-21.6%	-26.7%	-24.3%	-21.1%	-14.0%	-6.8%
		Other ancillary businesses		243	519	811	1,157	154	319	497	717	184	374	560	945
			YoY	-5.4%	-3.4%	-1.5%	0.1%	-36.6%	-38.4%	-38.7%	-38.0%	19.5%	17.0%	12.6%	31.8%
	Education			5,699	11,498	17,441	23,630	5,790	11,291	16,797	22,600	6,130	12,120	18,204	24,447	99.2%	24,652
		YoY		-8.4%	-6.3%	-4.6%	-3.6%	1.6%	-1.8%	-3.7%	-4.4%	5.9%	7.3%	8.4%	8.2%		9.1%
		Adult education		2,099	4,582	7,023	9,536	2,010	3,974	5,949	8,104	1,933	3,968	6,026	8,128
			YoY	-13.1%	-8.9%	-7.2%	-6.6%	-4.2%	-13.3%	-15.3%	-15.0%	-3.8%	-0.2%	1.3%	0.3%
		Full-time education		1,943	3,414	4,938	6,456	1,935	3,633	5,350	7,092	2,032	3,796	5,606	7,414
			YoY	5.1%	8.2%	9.5%	9.7%	-0.4%	6.4%	8.3%	9.9%	5.0%	4.5%	4.8%	4.5%
		International education		494	998	1,636	2,351	361	739	1,075	1,439	524	1,083	1,657	2,305
			YoY	-32.4%	-36.5%	-33.2%	-29.7%	-26.9%	-25.9%	-34.3%	-38.8%	45.2%	46.6%	54.2%	60.2%
		Childcare		899	1,814	2,739	3,720	1,016	2,046	3,089	4,161	1,152	2,320	3,489	4,670
			YoY	11.5%	12.0%	11.8%	11.4%	13.0%	12.8%	12.8%	11.9%	13.4%	13.4%	13.0%	12.2%
		Children’s education		261	687	1,103	1,564	465	898	1,335	1,802	486	953	1,425	1,927
			YoY	-37.4%	-22.9%	-15.7%	-9.5%	78.2%	30.7%	21.0%	15.2%	4.5%	6.1%	6.8%	6.9%
	Senior Care			2,501	5,125	7,795	10,431	2,725	5,522	8,360	11,075	2,833	5,653	8,537	11,317	96.2%	11,764
		YoY		-0.8%	0.5%	1.1%	1.8%	9.0%	7.7%	7.2%	6.2%	4.0%	2.4%	2.1%	2.2%		6.2%
	Other			584	1,119	1,773	2,430	530	1,084	1,722	2,359	664	1,308	1,989	2,624	92.4%	2,838
		YoY		-11.0%	-18.0%	-14.4%	-10.3%	-9.2%	-3.2%	-2.9%	-2.9%	25.3%	20.7%	15.5%	11.2%		20.3%
		Sports business		341	530	837	1,101	204	428	738	1,061	315	586	902	1,176
			YoY	47.6%	8.4%	13.7%	15.0%	-40.2%	-19.2%	-11.8%	-3.6%	54.4%	36.9%	22.2%	10.8%
		Nail salon business		89	275	464	632	157	323	485	641	174	360	536	695
			YoY	-59.0%	-40.5%	-40.2%	-37.6%	76.4%	17.5%	4.5%	1.4%	10.8%	11.5%	10.5%	8.4%
		IT-related business		149	302	448	670	168	331	498	657	174	361	549	752
			YoY	-25.5%	-24.7%	-16.6%	-5.9%	12.8%	9.6%	11.2%	-1.9%	3.6%	9.1%	10.2%	14.5%
		Other		3	11	22	25	0	0	0	0	0	0	0	0
			YoY	-50.0%	0.0%	10.0%	-3.8%	-	-	-	-	-	-	-
Operating profit				796	1,238	2,040	2,703	761	1,235	1,788	2,474	536	744	1,359	2,254	77.7%	2,900
	YoY			44.5%	28.5%	39.9%	35.0%	-4.4%	-0.3%	-12.3%	-8.4%	-29.6%	-39.7%	-24.0%	-8.9%		17.2%
	Operating profit margin			3.8%	2.9%	3.2%	3.1%	3.5%	2.9%	2.8%	2.9%	2.4%	1.7%	2.0%	9.5%
	Human Resources			526	803	1,181	1,740	617	882	1,253	1,646	417	542	823	1,312	77.1%	1,701
		YoY		746.1%	843.6%	350.7%	196.3%	17.4%	9.8%	6.1%	-5.4%	-32.5%	-38.5%	-34.3%	-20.3%		3.3%
		Operating profit margin		4.3%	3.3%	3.2%	3.5%	4.9%	3.6%	3.3%	3.3%	3.2%	2.1%	2.1%	2.5%
	Education			225	281	654	721	11	134	217	468	47	162	398	816	90.5%	902
		YoY		-35.2%	-52.6%	-21.0%	-38.4%	-94.9%	-52.2%	-66.8%	-35.1%	312.0%	20.9%	83.2%	74.4%		92.8%
		Operating profit margin		3.9%	2.4%	3.8%	3.1%	0.2%	1.2%	1.3%	2.1%	0.8%	1.3%	2.2%	3.5%
	Senior Care			13	118	162	185	73	191	277	243	39	26	73	21	11.0%	186
		YoY		-88.7%	-46.8%	-43.1%	-38.4%	451.7%	61.6%	71.2%	31.7%	-47.3%	-86.4%	-73.7%	-91.6%		-23.5%
		Operating profit margin		0.5%	2.3%	2.1%	1.8%	2.7%	3.5%	3.3%	2.2%	1.4%	0.5%	0.9%	0.1%
	Other			-41	-118	-104	-108	-50	-151	-177	-165	17	-6	-22	-107	-	41
		YoY		-	-	-	-	-	-	-	-	-	-	-	-		-
		Operating profit margin		-	-	-	-	-	-	-	-	2.6%	-	-	-
		Sports business		64	47	97	104	-32	-126	-168	-175	30	10	9	6
			YoY	-	213.3%	546.7%	5,100.0%	-	-	-	-	-	-	-	-
			Operating profit margin	18.8%	8.9%	11.6%	9.4%	-	-	-	-	9.5%	1.7%	1.0%	0.5%
		Nail salon business		-82	-104	-124	-146	2	7	8	4	3	28	39	36
			YoY	-	-	-	-	-	-	-	-	50.0%	300.0%	387.5%	800.0%
			Operating profit margin	-	-	-	-	1.3%	2.2%	1.6%	0.6%	1.7%	7.8%	7.3%	5.2%
		IT-related business		-5	-27	-29	-10	-18	-30	-14	7	-17	-44	-70	-170
			YoY	-	-	-	-	-	-	-	-	-	-	-	-
			Operating profit margin	-	-	-	-	-	-	-	1.1%	-	-	-	-
		Other		-17	-33	-47	-55	-1	-1	-1	-1	0	0	0	0
			YoY	-	-	-	-	-	-	-	-	-	-	-	-
			Operating profit margin	-	-	-	-	-	-	-	-	-	-	-	-
	Company-wide, eliminations			73	153	148	165	109	178	218	283	16	19	86	213	313.5%	68

By segment (quarterly)				FY03/21				FY03/22				FY03/23
(JPYmn)				Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Revenue				21,079	20,926	21,569	22,237	21,537	21,108	21,694	21,955	22,586	22,356	23,003	23,630
	YoY			-0.7%	-2.0%	-0.5%	2.3%	2.2%	0.9%	0.6%	-1.3%	4.9%	5.9%	6.0%	7.6%
	Human Resources			12,348	12,013	12,336	12,798	12,527	12,286	12,748	12,842	12,997	12,944	13,399	14,028
		YoY		3.9%	-0.4%	-0.4%	3.2%	1.4%	2.3%	3.3%	0.3%	3.8%	5.4%	5.1%	9.2%
	Education			5,714	5,821	5,972	6,216	5,810	5,520	5,521	5,816	6,147	6,007	6,098	6,255
		YoY		-9.0%	-5.0%	-1.9%	-1.2%	1.7%	-5.2%	-7.6%	-6.4%	5.8%	8.8%	10.5%	7.6%
	Senior Care			2,502	2,627	2,672	2,637	2,726	2,799	2,839	2,716	2,833	2,821	2,885	2,780
		YoY		-0.8%	1.7%	2.4%	4.0%	8.9%	6.6%	6.2%	3.0%	3.9%	0.8%	1.6%	2.4%
	Other			777	764	870	899	649	692	859	902	917	859	898	830
		YoY		-8.6%	-19.0%	-4.9%	10.9%	-16.4%	-9.4%	-1.3%	0.3%	41.3%	24.1%	4.5%	-7.9%
	Intersegment elimination, companywide revenue			-262	-298	-281	-314	-174	-188	-273	-320	-308	-274	-276	-264
External revenue				21,075	20,922	21,564	22,239	21,533	21,104	21,690	21,953	22,582	22,352	22,999	23,642
	YoY			0.0%	-2.7%	-0.5%	2.4%	2.2%	0.9%	0.6%	-1.3%	4.9%	5.9%	6.0%	7.7%
	Human Resources			12,291	11,964	12,297	12,758	12,488	12,251	12,708	12,797	12,955	12,899	13,349	13,975
		YoY		3.9%	-0.4%	-0.3%	3.4%	1.6%	2.4%	3.3%	0.3%	3.7%	5.3%	5.0%	9.2%
		Temporary staffing		10,771	10,608	11,089	11,332	11,333	11,242	11,757	11,743	11,877	11,872	12,220	12,368
			YoY	-	-	-	-	5.2%	6.0%	6.0%	3.6%	4.8%	5.6%	3.9%	5.3%
		Outsourcing services		708	726	575	640	555	552	521	575	556	593	674	909
			YoY	-	-	-	-	-21.6%	-23.9%	-9.4%	-10.2%	0.2%	7.3%	29.4%	58.2%
		Job placement services		567	354	341	439	444	293	253	257	336	246	270	310
			YoY	-	-	-	-	-21.7%	-17.2%	-25.9%	-41.4%	-24.3%	-16.2%	6.9%	20.7%
		Other ancillary businesses		243	276	292	346	154	165	177	220	184	190	186	385
			YoY	-	-	-	-	-36.6%	-40.0%	-39.3%	-36.4%	19.5%	14.7%	4.7%	75.1%
	Education			5,699	5,798	5,944	6,188	5,790	5,502	5,506	5,803	6,130	5,989	6,084	6,243
		YoY		-8.4%	-4.1%	-1.3%	-0.6%	1.6%	-5.1%	-7.4%	-6.2%	5.9%	8.9%	10.5%	7.6%
		Adult education		2,099	2,483	2,441	2,513	2,010	1,964	1,975	2,155	1,933	2,035	2,058	2,102
			YoY	-	-	-	-	-4.2%	-20.9%	-19.1%	-14.3%	-3.8%	3.6%	4.2%	-2.5%
		Full-time education		1,943	1,471	1,524	1,518	1,935	1,698	1,717	1,742	2,032	1,764	1,811	1,808
			YoY	-	-	-	-	-0.4%	15.4%	12.6%	14.8%	5.0%	3.9%	5.5%	3.8%
		International education		494	504	638	715	361	378	336	364	524	559	574	648
			YoY	-	-	-	-	-26.9%	-24.9%	-47.4%	-49.1%	45.2%	47.9%	70.9%	78.0%
		Childcare		899	915	925	981	1,016	1,030	1,043	1,072	1,152	1,168	1,170	1,181
			YoY	-	-	-	-	13.0%	12.6%	12.7%	9.3%	13.4%	13.4%	12.2%	10.1%
		Children’s education		261	426	416	461	465	433	437	467	486	467	472	502
			YoY	-	-	-	-	78.2%	1.6%	4.9%	1.4%	4.5%	7.9%	8.1%	7.4%
	Senior Care			2,501	2,624	2,670	2,635	2,725	2,798	2,838	2,715	2,833	2,820	2,884	2,780
		YoY		-0.8%	1.7%	2.3%	4.1%	9.0%	6.6%	6.3%	3.0%	4.0%	0.8%	1.6%	2.4%
	Other			584	535	654	657	530	553	638	638	664	644	681	634
		YoY		-11.0%	-24.5%	-7.3%	2.9%	-9.2%	3.4%	-2.4%	-2.9%	25.3%	16.3%	6.8%	-0.5%
		Sports business		341	189	307	264	204	224	310	323	315	271	316	274
			YoY	-	-	-	-	-40.2%	18.5%	1.0%	22.3%	54.4%	21.0%	1.9%	-15.2%
		Nail salon business		89	186	189	168	157	166	162	156	174	186	176	159
			YoY	-	-	-	-	76.4%	-10.8%	-14.3%	-7.1%	10.8%	12.0%	8.6%	1.9%
		IT-related business		149	153	146	222	168	163	167	159	174	187	188	203
			YoY	-	-	-	-	12.8%	6.5%	14.4%	-28.4%	3.6%	14.7%	12.6%	27.7%
		Other		3	8	11	3	0	-	-	-	0	-	-	-
			YoY	-	-	-	-	-	-	-	-	-	-	-	-
Operating profit				796	442	802	662	761	474	554	686	536	208	615	895
	YoY			44.5%	7.1%	62.2%	21.7%	-4.4%	7.2%	-31.0%	3.6%	-29.6%	-56.1%	11.1%	30.4%
	Operating profit margin			3.8%	2.1%	3.7%	3.0%	3.5%	2.2%	2.6%	3.1%	2.4%	0.9%	2.7%	3.8%
	Human Resources			526	277	377	559	617	265	371	393	417	125	281	488
		YoY		746.1%	1,107.4%	113.4%	72.0%	17.4%	-4.6%	-1.7%	-29.7%	-32.5%	-52.6%	-24.3%	24.2%
		Operating profit margin		4.3%	2.3%	3.1%	4.4%	4.9%	2.2%	2.9%	3.1%	3.2%	1.0%	2.1%	3.5%
	Education			225	56	374	67	11	123	83	250	47	115	236	418
		YoY		-35.2%	-77.2%	57.7%	-80.4%	-94.9%	120.9%	-77.7%	273.7%	312.0%	-6.4%	183.6%	66.9%
		Operating profit margin		3.9%	1.0%	6.3%	1.1%	0.2%	2.2%	1.5%	4.3%	0.8%	1.9%	3.9%	6.7%
	Senior Care			13	105	43	23	73	118	85	-34	39	-12	47	-52
		YoY		-88.7%	0.4%	-29.7%	48.8%	451.7%	12.4%	97.5%	-	-47.3%	-	-45.2%	-
		Operating profit margin		0.5%	4.0%	1.6%	0.9%	2.7%	4.2%	3.0%	-	1.4%	-	1.6%	-
	Other			-41	-76	14	-4	-50	-101	-25	11	17	-23	-16	-86
		YoY		-	-	-	-	-	-	-	-	-	-	-	-
		Operating profit margin		-	-	2.1%	-	-	-	-	1.8%	2.6%	-	-	-
		Sports business		64	-17	50	7	-32	-94	-42	-7	30	-20	-1	-3
			YoY	-	-	-	-	-	-	-	-	-	-	-	-
			Operating profit margin	18.8%	-	16.3%	2.7%	-	-	-	-	9.5%	-	-	-
		Nail salon business		-82	-22	-20	-22	2	5	1	-4	3	25	11	-3
			YoY	-	-	-	-	-	-	-	-	50.0%	400.0%	1,000.0%	-
			Operating profit margin	-	-	-	-	1.3%	3.0%	0.6%	-	1.7%	13.4%	6.3%	-
		IT-related business		-5	-22	-2	19	-18	-12	16	21	-17	-27	-26	-100
			YoY	-	-	-	-	-	-	-	10.5%	-	-	-	-
			Operating profit margin	-	-	-	8.6%	-	-	9.6%	13.2%	-	-	-	-
		Other		-17	-16	-14	-8	-1	-	-	-	0	-	-	-
			YoY	-	-	-	-	-	-	-	-	-	-	-	-
			Operating profit margin	-	-	-	-	-	-	-	-	-	-	-	-
	Company-wide, eliminations			73	80	-5	17	109	69	39	65	16	3	68	127

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Full-year FY03/23 results

Summary

Revenue: JPY91.6bn (+6.1% YoY)
Operating profit: JPY2.3bn (-8.9% YoY)
Recurring profit: JPY2.5bn (-7.2% YoY)
Net income attributable to owners of the parent: JPY1.5bn (-11.8% YoY)

In the human resources industry, demand for workers is growing as Japan’s population continues to decline. With greater diversity in the utilization of human resources and the value assigned to working, it is required to provide workers with optimal work styles by making full use of digital technologies. Demand for IT workers in Japan remains robust, and even greater use of overseas human resources is expected as a response to the shortage of domestic workers. In addition, there is growing momentum for investment in human resources and calls for added value in human resources services, such as temporary staffing positions that include training.

In regard to the Education segment, the education market in Japan is shrinking due to the declining birthrate. However, in addition to online classes becoming more common during the COVID-19 pandemic, there are calls for the promotion of digital transformation in education, including the use of learning logs based on the Ministry of Education, Culture, Sports, Science and Technology’s GIGA School Concept to enable provision of individually optimized study. In addition, against a backdrop of investment in human resources, there is growing demand for skill enhancement via recurrent education and reskilling.

The ratio of the elderly in Japan is at an all-time high and is projected to exceed 30% by 2025. While demand for long-term care services looks set to grow, the worsening shortage of human resources remains a serious issue to be addressed in the Senior Care segment.

Dividends from surplus

The company's Board of Directors, at a meeting held on May 15, 2023, lowered the year-end dividend for FY03/23 to JPY27 from the previous forecast of JPY32.5.

By segment

Human Resources

Revenue from external customers: JPY53.2bn (+5.8% YoY)
Operating profit: JPY1.3bn (-20.3% YoY)

In the temporary staffing business, revenue was solid due to an increase in the number of newly hired staff following investment in recruiting to meet growing staffing demand. However, the personnel expense ratio rose due to an increase in paid holidays taken because of the normalization of economic and social activities during the major holiday period in Japan from late April to early May and the impact of the seventh wave of the COVID-19 pandemic. The number of overseas engineers increased as the company strengthened hiring after immigration restrictions were eased. Meanwhile, the RPA implementation support service contracts performed well. In the outsourcing business, the company saw favorable results stemming from a focus on acquiring new projects such as RPA-related projects in addition to government-related projects.

As a result, Human Resources segment revenue rose 5.8% YoY to JPY53.2bn, while operating profit declined 20.3% YoY to JPY1.3bn, due mainly to increases in the personnel expense ratio and recruiting costs.

Education

Revenue from external customers: JPY24.4bn (+8.2% YoY)
Operating profit: JPY816mn (+74.4% YoY)

Based on the Human Academy GIGA School Concept (promoted by Ministry of Education, Culture, Sports, Science and Technology) which aims to digitalize education, the company launched Human Academy-assist, a unique learning management platform that provides services based on the company’s motto “SELFing” to eliminate learners’ anxiety and frustration.

In the adult education business, the company continued to promote the shift of classes to online and VOD formats. The number of contracts for Japanese language teacher training courses increased owing to the easing of pandemic-related restrictions on entering the country. It also worked to enhance proposals of services targeting the government, such as employment support programs.

In the full-time education business, enrollment at Sogo Gakuen Human Academy increased mainly at the mainstay performing arts college and manga college, and also at the newly established eSports and video creator colleges.

In the children’s education business, enrollment was steady for the company’s Robot School, while enrollment increased for the Science Gates science classes and for arithmetic and mathematics classes due to rising demand for STEAM education.

The international education business comprises mainly the Japanese language school business targeting overseas students. Enrollment in Japanese language schools sharply increased as the government eased restrictions on entering Japan following the pandemic. In the childcare business, the company opened four licensed nurseries in Kanagawa Prefecture, including Noborito Nursery, which resulted in an increase in the number of children under its care.

As a result, Education segment revenue rose 8.2% YoY to JPY24.4bn, and operating profit grew 74.4% YoY to JPY816mn.

Senior Care

Revenue from external customers: JPY11.3bn (+2.2% YoY)
Operating profit: JPY21mn (-91.6% YoY)

At facilities operated by the company, care workers took thorough measures to prevent COVID-19 infections, for example by wearing masks and disinfecting and ventilating spaces, to ensure that users could use the services with peace of mind.

In the small-scale multifunctional home care and group home businesses, there was growth in the number of users at facilities opened in FY03/22. Moreover, the company opened Mitsuhashi Group Home (Saitama Prefecture) and Fukakusa Group Home (Kyoto Prefecture).

In the adult daycare service, the company focused on reallocation of personnel at each facility after the utilization rate declined due to the impact of the pandemic.

In facility operations, the company promoted the introduction of tablet devices and utilization of systems to reduce the workload of care workers. The company also improved compensation to hire and retain care workers.

As a result, Senior Care segment revenue increased 2.2% YoY to JPY11.3bn, due mainly to steady growth in the number of users at facilities opened in FY03/22. However, operating profit declined 91.6% YoY to JPY21mn due to an increase in operating expenses. For example, the personnel expense ratio rose because the company improved compensation while utilities costs soared.

Other

Revenue from external customers: JPY2.6bn (+11.2% YoY)
Operating loss: JPY107mn (loss of JPY165mn in FY03/22)

In the sports business, despite admission restrictions in FY03/22 due to the pandemic, ticket and merchandise sales recovered in Q1 FY03/23 as home games of the Osaka Evessa pro basketball team returned to a regular schedule. In addition, the company focused on attracting and fostering enthusiastic supporters by expanding the number of gold memberships in the team’s fan club.

In nail salon operation business, the company focused on acquiring new customers and getting existing customers to return as the majority of salons returned to normal business hours. It also worked to enhance its sales structure to expand sales of products under its own brand.

In the IT business, the company strengthened cooperation with the Education segment to promote digital transformation projects within the company.

As a result, revenue in the Other segment grew 11.2% YoY to JPY2.6bn, with an operating loss of JPY107mn (loss of JPY165mn in FY03/22).

Full-year company forecast

		FY03/22			FY03/23			FY03/24	YoY
(JPYmn)		1H Act.	2H Act.	FY Act.	1H Act.	2H Act.	FY Act.	FY Est.	FY Est.
Revenue		42,645	43,648	86,293	44,942	46,633	91,575	97,053	6.0%
Cost of revenue		31,671	32,820	64,491	33,838	34,958	68,796
Gross profit		10,974	10,828	21,802	11,104	11,674	22,779
	Gross profit margin	25.7%	24.8%	25.3%	24.7%	25.0%	24.9%
SG&A expenses		9,739	9,588	19,327	10,360	10,164	20,525
	SG&A ratio	22.8%	22.0%	22.4%	23.1%	21.8%	22.4%
Operating profit		1,235	1,240	2,474	744	1,510	2,254	2,697	19.7%
	Operating profit margin	2.9%	2.8%	2.9%	1.7%	3.2%	2.5%	2.8%
Recurring profit		1,357	1,355	2,711	892	1,625	2,517	2,632	4.6%
	Recurring profit margin	3.2%	3.1%	3.1%	2.0%	3.5%	2.7%	2.7%
Net income		809	838	1,647	561	892	1,452	1,537	5.8%
	Net margin	1.9%	1.9%	1.9%	1.2%	1.9%	1.6%	1.6%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

FY03/24 company forecast

Revenue: JPY97.1bn (+6.0% YoY)
Operating profit: JPY2.7bn (+19.7% YoY)
Recurring profit: JPY2.6bn (+4.6% YoY)
Net income attributable to owners of the parent: JPY1.5bn (+5.8% YoY)

The company expects revenue to increase, mainly in the Human Resources and Education segments. It also forecasts an increase in operating profit, mainly in the Human Resources, Education, and Senior Care segments. It will increase base salaries and starting salaries by an average of 7% across the board. The company aims to enhance profitability by improving productivity. It also expects recurring profit and net income to increase on higher operating profit, but expects the rate of increase to be under 10% YoY due to an anticipated fall-off in non-operating income such as subsidies.

Change in shareholder return policy

The company changed its shareholder return policy at a Board of Directors meeting held on May 15, 2023. The company had targeted a consolidated dividend payout ratio of 20%, with the aim of paying dividends in line with business performance while securing internal reserves for future business development and strengthening the company's financial position. However, to enhance shareholder returns, it raised the target consolidated dividend payout ratio to 30%.

By segment

The following information represents projections by the company unless otherwise noted.

Human Resources: Revenue of JPY56.1bn (+5.5% YoY), operating profit of JPY1.5bn (+15.0% YoY)

Education: Revenue of JPY25.7bn (+5.0% YoY), operating profit of JPY965mn (+18.3% YoY)

Senior Care: Revenue of JPY12.0bn (+6.2% YoY), operating profit of JPY158mn (+670.7% YoY)

Other: Revenue of JPY3.2bn (+23.4% YoY), operating profit of JPY1mn (loss of JPY107mn in FY03/22)

Historical initial forecasts versus results

Results vs. Initial Est.		FY03/14	FY03/15	FY03/16	FY03/17	FY03/18	FY03/19	FY03/20	FY03/21	FY03/22	FY03/23
(JPYmn)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
	Revenue (Initial Est.)	57,483	61,656	69,167	76,371	81,593	85,978	89,909	-	88,167	91,454
	Revenue (Results)	56,660	62,594	69,079	74,417	78,763	84,313	85,990	85,811	86,293	91,575
Results vs. Initial Est.		-1.4%	1.5%	-0.1%	-2.6%	-3.5%	-1.9%	-4.4%	-	-2.1%	0.1%
	Operating profit (Initial Est.)	1,391	1,615	1,972	2,287	2,290	1,878	2,283	-	2,265	2,900
	Operating profit (Results)	1,143	2,062	1,884	1,848	1,896	2,111	2,003	2,703	2,474	2,254
Results vs. Initial Est.		-17.8%	27.7%	-4.5%	-19.2%	-17.2%	12.4%	-12.3%	-	9.2%	-22.3%
	Recurring profit (Initial Est.)	1,382	1,623	2,048	2,335	2,327	1,939	2,273	-	2,324	2,936
	Recurring profit (Results)	1,351	2,230	2,109	1,972	1,999	2,172	2,127	3,254	2,711	2,517
Results vs. Initial Est.		-2.2%	37.4%	3.0%	-15.5%	-14.1%	12.0%	-6.4%	-	16.7%	-14.3%
	Net income (Initial Est.)	1,005	939	1,242	1,442	1,433	1,021	1,291	-	1,286	1,742
	Net income (Results)	1,243	1,142	1,063	1,002	1,131	1,218	848	1,440	1,647	1,452
Results vs. Initial Est.		23.7%	21.7%	-14.4%	-30.5%	-21.1%	19.3%	-34.3%	-	28.1%	-16.6%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

Human Holdings 2415