en Japan 4849

エン・ジャパン

Recent Updates

2022-05-13

New medium-term business plan and dividend payment

2022-05-13

Q1 FY12/22 flash update

2022-03-28

Change in representative director

Get in touch

Shinjuku I-land Tower 6-5-1 Nishi-Shinjuku Shinjuku-ku Tokyo, Japan 163-1335

https://corp.en-japan.com/index.html

03-3342-3386

Summary

Pioneer of online recruitment information websites, with a particular focus on mid-career and experienced worker hiring. Now looking to expand into Asia and bilingual staff recruiting.

Professional Services

Key dates

2011-10-18

Coverage initiation

Full Report

2022-05-13

Q1 FY12/22 flash update

2022-05-13

Q3 FY03/22 flash update

2022-02-14

1H FY03/22 flash update

2021-11-12

Q1 FY03/22 flash update

2021-08-16

Download

Key financial data

Income statement			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.	Est.
Sales			19,624	26,135	31,719	40,710	48,733	56,848	42,725	54,544	62,000
		YoY	17.1%	33.2%	21.4%	28.3%	19.7%	16.7%	-24.8%	27.7%	13.7%
Gross profit			17,693	23,739	28,533	36,875	44,051	46,397	34,159	43,043	46,850
		YoY	19.3%	34.2%	20.2%	29.2%	19.5%	5.3%	-26.4%	26.0%	8.8%
		Gross profit margin	90.2%	90.8%	90.0%	90.6%	90.4%	81.6%	80.0%	78.9%	75.6%
	SG&A expenses		13,750	18,621	21,677	27,243	32,389	35,392	26,387	33,409	43,765
		YoY	20.7%	35.4%	16.4%	25.7%	18.9%	9.3%	-25.4%	26.6%	31.0%
		SG&A ratio	70.1%	71.2%	68.3%	66.9%	66.5%	62.3%	61.8%	61.3%	70.6%
Operating profit			3,943	5,118	6,856	9,631	11,661	11,005	7,771	9,633	3,085
		YoY	14.6%	29.8%	34.0%	40.5%	21.1%	-5.6%	-29.4%	24.0%	-68.0%
		Operating profit margin	20.1%	19.6%	21.6%	23.7%	23.9%	19.4%	18.2%	17.7%	5.0%
Recurring profit			4,259	5,047	6,848	9,736	11,834	11,057	7,939	10,138	3,087
		YoY	13.7%	18.5%	35.7%	42.2%	21.5%	-6.6%	-28.2%	27.7%	-69.6%
		Recurring profit margin	21.7%	19.3%	21.6%	23.9%	24.3%	19.5%	18.6%	18.6%	5.0%
Net income			2,531	2,756	4,005	6,368	8,144	7,125	3,502	6,628	2,118
		YoY	-9.2%	8.9%	45.3%	59.0%	27.9%	-12.5%	-50.8%	89.3%	-68.0%
		Net margin	12.9%	10.5%	12.6%	15.6%	16.7%	12.5%	8.2%	12.2%	3.4%
Per-share data
Shares issues (year-end)('000 shares)			24,858	24,858	49,716	49,716	49,716	49,716	49,716	49,716
EPS			112.7	121.6	88.0	140.0	179.0	156.2	78.2	147.7	47.2
EPS (fully diluted)			-	121.4	87.8	139.5	178.5	155.8	78.0	147.4
Dividend per share			32.0	34.5	27.6	46.5	62.8	74.8	37.1	70.1	70.1
Book value per share			874.3	921.1	516.9	625.6	762.5	834.7	810.7	903.9
Balance sheet (JPYmn)
		Cash and cash equivalents	11,138	14,153	20,228	25,505	30,409	30,128	28,405	35,849
		Accounts receivable	5,465	3,269	5,567	6,662	5,614	5,736	4,347	5,466
		Inventories	13	13	17	10	22	42	16	19
	Total current assets		14,344	19,880	24,826	31,405	37,255	37,065	33,724	42,301
	Tangible fixed assets		744	699	640	580	719	1,021	621	634
	Investments and other assets		3,457	1,942	2,187	2,830	5,018	6,096	5,299	6,392
	Intangible assets		6,697	6,037	5,246	5,677	6,858	7,712	6,999	6,888
Total assets			25,241	28,559	32,900	40,492	49,852	51,896	46,644	56,215
		Accounts payable	46	59	72	111	126	475	434	1,063
		Short-term debt	-	-	-	-	-	-	-	-
	Total current liabilities		4,860	6,774	8,533	10,982	13,274	11,762	8,260	13,501
		Long-term debt	18	-	-	-	-	-	-	-
	Total fixed liabilities		605	672	724	990	1,111	1,485	1,527	1,553
Total liabilities			5,465	7,446	9,258	11,864	14,385	13,247	9,788	15,054
Total net assets			19,776	21,113	23,642	28,628	35,466	38,648	36,856	41,160
Cash flow statement((JPYmn))
Cash flows from operating activities			2,534	5,792	7,597	9,458	10,680	8,044	5,652	11,453
Cash flows from investing activities			-6,149	1,783	-1,927	-2,724	-4,556	-4,127	-2,150	-3,086
Cash flows from financing activities			-609	-812	-1,387	-1,339	-2,237	-5,036	-4,983	-1,813
Financial ratios
Interest-bearing debt			18	-	-	-	-	-	-	-
Net cash			11,120	14,153	20,228	25,505	30,409	30,128	28,405	35,849
ROA (RP-based)			17.8%	18.8%	22.3%	26.5%	26.2%	21.7%	16.1%	19.7%
ROE			13.8%	13.6%	18.0%	24.5%	25.8%	19.6%	9.5%	17.2%
Equity ratio			77.9%	73.4%	71.5%	70.3%	69.8%	72.8%	77.8%	72.2%

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: FY03/12 is an irregular 15-month period (January 1, 2011 to March 31, 2012).
Note: The company conducted a 100-for-1 stock split on October 1, 2013 and a 2-for-1 stock split on April 1, 2016.
Note: Earnings per share (EPS ; used to calculate the dividend payout ratio) is net income divided by total number of outstanding shares excluding treasury stock. Treasury stock includes stock held in an employee stock ownership plan (2,397,000 shares held in J-ESOP trust). The dividend payout ratio that reflects dividends paid on these shares was 35.0% in FY03/18, 37.0% in FY03/19, and will be 50.0% in FY03/20.

Recent updates

New medium-term business plan and dividend payment

2022-05-13

On May 13, 2022, en Japan Inc. made an announcement concerning the outline of its new medium-term business plan.

The company announced its new five-year medium-term business plan covering FY03/23–FY03/27 at its full-year FY03/22 financial results briefing.

		FY03/22	FY03/23	FY03/24	FY03/25	FY03/26	FY03/27
(JPYmn)		Act.	Est.	MTP	MTP	MTP	MTP
Sales		54,544	62,000	70,000	85,000	100,000	120,000
	YoY	27.7%	13.7%	12.9%	21.4%	17.6%	20.0%
Operating profit		9,633	3,085	4,100	9,900	17,500	24,000
	YoY	24.0%	-68.0%	32.9%	141.5%	76.8%	37.1%
	Operating profit margin	17.7%	5.0%	5.9%	11.6%	17.5%	20.0%
Dividend per share		70.1	70.1	70.1	70.1	128.0	176.0

Basic policy

Grow the investment business to the same size as existing businesses in five years
Operate the investment business centered on engage and AMBI. Implement upfront spending
Invest a certain amount in existing businesses to continue generating high profits

Basic financial policy

The company will consider share buybacks and other forms of shareholder returns based on the circumstances while prioritizing investments for growth (M&A). During the three years of aggressive upfront spending under the new medium-term plan, the company plans to maintain the dividend at the level of FY03/22 (JPY70.1 per share), after which it plans to return to a dividend payout ratio of 50%.

On the same day, the company announced a dividend payment.

Net income in FY03/22 was lower than the company's forecast. The company accordingly revised its planned dividend downward by JPY2.4 from the previous forecast, to JPY70.1 per share.

Change in representative director

2022-03-28

On March 25, 2022, en Japan Inc. announced a change in representative directors.

Details of change

Change in representative directors

Name	New title	Current title
Michikatsu Ochi	Chairman and Executive Officer (in Japanese: Chairman and Executive Officer; English title unchanged)	Chairman and Executive Officer (in Japanese: Representative Director, Chairman and Executive Officer)

Effective date of change

March 31, 2022

Trends and outlook

Quarterly trends and results

Quarterly earnings

Cumulative		FY03/21				FY03/22				FY03/22
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	FY Est.
Sales		10,442	20,650	31,116	42,725	12,060	25,044	38,904	54,544	106.9%	51,000
	YoY	-24.1%	-26.8%	-25.7%	-24.8%	15.5%	21.3%	25.0%	27.7%		19.4%
Gross profit		8,094	16,264	24,714	34,159	9,681	19,968	30,870	43,043	104.4%	41,223
	YoY	-27.9%	-29.4%	-27.6%	-26.4%	19.6%	22.8%	24.9%	26.0%		20.7%
	Gross profit margin	77.5%	78.8%	79.4%	80.0%	80.3%	79.7%	79.3%	78.9%		80.8%
SG&A expenses		6,846	13,347	19,669	26,387	7,371	15,228	23,618	33,409	107.0%	31,223
	YoY	-17.7%	-20.7%	-24.1%	-25.4%	7.7%	14.1%	20.1%	26.6%		18.3%
	SG&A ratio	65.6%	64.6%	63.2%	61.8%	61.1%	60.8%	60.7%	61.3%		61.2%
Operating profit		1,248	2,917	5,044	7,771	2,310	4,740	7,252	9,633	96.3%	10,000
	YoY	-57.0%	-53.0%	-38.5%	-29.4%	85.1%	62.5%	43.8%	24.0%		28.7%
	Operating profit margin	12.0%	14.1%	16.2%	18.2%	19.2%	18.9%	18.6%	17.7%		19.6%
Recurring profit		1,236	2,995	5,150	7,939	2,314	4,810	7,485	10,138	101.4%	9,999
	YoY	-57.3%	-51.7%	-37.0%	-28.2%	87.2%	60.6%	45.3%	27.7%		25.9%
	Recurring profit margin	11.8%	14.5%	16.6%	18.6%	19.2%	19.2%	19.2%	18.6%		19.6%
Net income		618	1,549	2,948	3,502	1,515	3,240	5,037	6,628	96.9%	6,842
	YoY	-67.8%	-62.3%	-46.2%	-50.8%	145.1%	109.2%	70.9%	89.3%		95.4%
	Net margin	5.9%	7.5%	9.5%	8.2%	12.6%	12.9%	12.9%	12.2%		13.4%
Advertising and promotion expenses		1,070	2,303	3,748	5,575	1,944	4,289	7,017	10,924	128.0%	8,532
	% of sales	10.2%	11.2%	12.0%	13.0%	16.1%	17.1%	18.0%	20.0%		16.7%
Quarterly		FY03/21				FY03/22
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales		10,442	10,208	10,466	11,609	12,060	12,984	13,860	15,640
	YoY	-24.1%	-29.3%	-23.6%	-22.3%	15.5%	27.2%	32.4%	34.7%
Gross profit		8,094	8,170	8,450	9,445	9,681	10,287	10,902	12,173
	YoY	-27.9%	-30.8%	-23.9%	-23.0%	19.6%	25.9%	29.0%	28.9%
	Gross profit margin	77.5%	80.0%	80.7%	81.4%	80.3%	79.2%	78.7%	77.8%
SG&A expenses		6,846	6,501	6,322	6,718	7,371	7,857	8,390	9,791
	YoY	-17.7%	-23.6%	-30.5%	-29.0%	7.7%	20.9%	32.7%	45.7%
	SG&A ratio	65.6%	63.7%	60.4%	57.9%	61.1%	60.5%	60.5%	62.6%
Operating profit		1,248	1,669	2,127	2,727	2,310	2,430	2,512	2,381
	YoY	-57.0%	-49.4%	6.5%	-2.9%	85.1%	45.6%	18.1%	-12.7%
	Operating profit margin	12.0%	16.3%	20.3%	23.5%	19.2%	18.7%	18.1%	15.2%
Recurring profit		1,236	1,759	2,155	2,789	2,314	2,496	2,675	2,653
	YoY	-57.3%	-46.8%	8.9%	-3.2%	87.2%	41.9%	24.1%	-4.9%
	Recurring profit margin	11.8%	17.2%	20.6%	24.0%	19.2%	19.2%	19.3%	17.0%
Net income		618	931	1,399	554	1,515	1,725	1,797	1,591
	YoY	-67.8%	-57.5%	1.7%	-66.3%	145.1%	85.3%	28.4%	187.2%
	Net margin	5.9%	9.1%	13.4%	4.8%	12.6%	13.3%	13.0%	10.2%
Advertising and promotion expenses		1,070	1,233	1,445	1,827	1,944	2,345	2,728	3,907
	% of sales	10.2%	12.1%	13.8%	15.7%	16.1%	18.1%	19.7%	25.0%

Source: Shared Research based on company data

Earnings by segment

Segments (cumulative)			FY03/21				FY03/22				FY03/22
(JPYmn)			Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	FY Est.
Sales			10,442	20,650	31,116	42,725	12,060	25,044	38,904	54,544	106.9%	51,000
	YoY		-24.1%	-26.8%	-25.7%	-24.8%	15.5%	21.3%	25.0%	27.7%		19.4%
	Domestic Job Board		4,642	9,839	15,452	21,774	6,435	13,248	20,879	29,460	105.4%	27,940
		YoY	-38.5%	-37.4%	-34.2%	-32.2%	38.6%	34.6%	35.1%	35.3%		28.3%
	Domestic Permanent Recruitment		2,812	5,018	7,107	9,385	2,451	4,936	7,239	9,649	96.5%	10,000
		YoY	-7.8%	-16.9%	-19.3%	-21.0%	-12.8%	-1.6%	1.9%	2.8%		6.6%
	Overseas		2,208	4,162	6,013	8,011	2,138	4,805	7,594	10,975	125.1%	8,770
		YoY	-19.1%	-24.7%	-26.5%	-25.4%	-3.2%	15.4%	26.3%	37.0%		9.5%
	HR-Tech		246	515	839	1,215	857	1,747	2,756	3,920	113.0%	3,470
		YoY	472.1%	315.3%	257.0%	155.8%	248.4%	239.2%	228.5%	222.6%		185.6%
	Other Domestic Businesses and Subsidiaries		657	1,319	1,984	2,694	263	498	756	976	93.8%	1,040
		YoY	27.8%	27.1%	27.8%	27.5%	-60.0%	-62.2%	-61.9%	-63.8%		-61.4%
Operating profit			1,248	2,917	5,044	7,771	2,310	4,740	7,252	9,633	96.3%	10,000
	YoY		-57.0%	-53.0%	-38.5%	-29.4%	85.1%	62.5%	43.8%	24.0%		28.7%
	Operating profit margin		12.0%	14.1%	16.2%	18.2%	19.2%	18.9%	18.6%	17.7%		19.6%
	Domestic Job Board		1,218	3,384	5,819	8,345	1,920	3,690	5,844	8,180	96.8%	8,450
		YoY	-57.2%	-44.0%	-31.5%	-28.9%	57.6%	9.0%	0.4%	-2.0%		1.3%
		Segment profit margin	26.2%	34.4%	37.7%	38.3%	29.8%	27.9%	28.0%	27.8%		30.2%
	Domestic Permanent Recruitment		448	408	332	517	332	752	952	1,347	137.4%	980
		YoY	21.1%	-45.7%	-63.2%	-63.7%	-25.9%	84.3%	186.7%	160.5%		89.6%
		Segment profit margin	15.9%	8.1%	4.7%	5.5%	13.5%	15.2%	13.2%	14.0%		9.8%
	Overseas		128	185	355	551	187	491	667	934	133.4%	700
		YoY	-55.1%	-68.9%	-54.3%	-39.5%	46.1%	165.4%	87.9%	69.5%		27.0%
		Segment profit margin	5.8%	4.4%	5.9%	6.9%	8.7%	10.2%	8.8%	8.5%		8.0%
	HR-Tech		-295	-612	-849	-937	103	258	476	149	21.3%	700
		YoY	-	-	-	-	-	-	-	-		-
		Segment profit margin	-	-	-	-	12.0%	14.8%	17.3%	3.8%		20.2%
	Other Domestic Businesses and Subsidiaries		-41	-29	-5	67	-49	-102	-140	-229	-	-280
		YoY	-	-	-	-	-	-	-	-		-
		Segment profit margin	-	-	-	2.5%	-	-	-	-		-
Quarterly			FY03/21				FY03/22
(JPYmn)			Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales			10,442	10,208	10,466	11,609	12,060	12,984	13,860	15,640
	YoY		-24.1%	-29.3%	-23.6%	-22.3%	15.5%	27.2%	32.4%	34.7%
	Domestic Job Board		4,642	5,197	5,613	6,322	6,435	6,813	7,631	8,581
		YoY	-38.5%	-36.4%	-27.7%	-26.8%	38.6%	31.1%	36.0%	35.7%
	Domestic Permanent Recruitment		2,812	2,206	2,089	2,278	2,451	2,485	2,303	2,410
		YoY	-7.8%	-26.2%	-24.5%	-25.8%	-12.8%	12.6%	10.2%	5.8%
	Overseas		2,208	1,954	1,851	1,998	2,138	2,667	2,789	3,381
		YoY	-19.1%	-30.1%	-30.3%	-22.1%	-3.2%	36.5%	50.7%	69.2%
	HR-Tech		246	269	324	376	857	890	1,009	1,164
		YoY	472.1%	232.1%	191.9%	56.7%	248.4%	230.9%	211.4%	209.6%
	Other Domestic Businesses and Subsidiaries		657	662	665	710	263	235	258	220
		YoY	27.8%	26.3%	29.4%	26.6%	-60.0%	-64.5%	-61.2%	-69.0%
Operating profit			1,248	1,669	2,127	2,727	2,310	2,430	2,512	2,381
	YoY		-57.0%	-49.4%	6.5%	-2.9%	85.1%	45.6%	18.1%	-12.7%
	Operating profit margin		12.0%	16.3%	20.3%	23.5%	19.2%	18.7%	18.1%	15.2%
	Domestic Job Board		1,218	2,166	2,435	2,526	1,920	1,770	2,154	2,336
		YoY	-57.2%	-32.3%	-0.9%	-21.8%	57.6%	-18.3%	-11.5%	-7.5%
		Segment profit margin	26.2%	41.7%	43.4%	40.0%	29.8%	26.0%	28.2%	27.2%
	Domestic Permanent Recruitment		448	-40	-76	185	332	420	200	395
		YoY	21.1%	-	-	-64.7%	-25.9%	-	-	113.5%
		Segment profit margin	15.9%	-	-	8.1%	13.5%	16.9%	8.7%	16.4%
	Overseas		128	57	170	196	187	304	176	267
		YoY	-55.1%	-81.6%	-6.6%	45.2%	46.1%	433.3%	3.5%	36.2%
		Segment profit margin	5.8%	2.9%	9.2%	9.8%	8.7%	11.4%	6.3%	7.9%
	HR-Tech		-295	-317	-237	-88	103	155	218	-327
		YoY	-	-	-	-	-	-	-	-
		Segment profit margin	-	-	-	-	12.0%	17.4%	21.6%	-
	Other Domestic Businesses and Subsidiaries		-41	12	24	72	-49	-53	-38	-89
		YoY	-	-40.0%	-	-	-	-	-	-
		Segment profit margin	-	1.8%	3.6%	10.1%	-	-	-	-

Source: Shared Research based on company data
Note: In FY03/22, some services belonging to the Other domestic businesses and subsidiaries segment were reclassified to other segments, mostly the HR-Tech segment. The YoY comparisons show the percentage change compared with results prior to the reclassification.

engage performance

engage performance (cumulative)		FY03/21				FY03/22
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales		246	515	839	1,215	386	811	1,299	1,945
	YoY	472.1%	315.3%	257.0%	155.8%	56.9%	57.5%	54.8%	60.1%
Operating profit		-295	-612	-849	-937	-30	-12	28	-444
	YoY	-	-	-	-	-	-	-	-
engage users(thousand companies)		287	301	317	337	353	373	395	417
	YoY change	77	71	67	67	66	72	78	80
	YoY	36.7%	30.9%	26.8%	24.8%	23.0%	23.9%	24.6%	23.7%
	QoQ change	17	14	16	20	16	20	22	22
	QoQ	6.3%	4.9%	5.3%	6.3%	4.7%	5.7%	5.9%	5.6%
engage performance (quarterly)		FY03/21				FY03/22
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales		246	269	324	376	386	425	488	646
	YoY	472.1%	232.1%	191.9%	56.7%	56.9%	58.0%	50.6%	71.8%
Operating profit		-295	-317	-237	-88	-30	18	40	-472
	YoY	-	-	-	-	-	-	-	-

Source: Shared Research based on company data

Reference: Trends in number of recruitment ads

			2020	2020	2020	2021	2021	2021	2021	2022
('000)			Jun	Sep	Dec	Mar	Jun	Sep	Dec	Mar
Average weekly number of recruitment ads			647	689	811	887	833	945	1,030
	YoY		-58.2%	-55.5%	-43.4%	-40.3%	28.7%	37.0%	27.0%
	Of which, ads for permanent positions		109	110	147	163	161	180	187
		YoY	-62.6%	-60.2%	-45.8%	-27.5%	48.0%	63.9%	27.3%

Source: Shared Research, based on "Permanent, part-time, and temporary positions advertised by job category," Association of Job Information of Japan

Full-year FY03/22 results (out May 12, 2022)

Sales: JPY54.5bn (+27.7% YoY)
Operating profit: JPY9.6bn (+24.0% YoY)
Recurring profit: JPY10.1bn (+27.7% YoY)
Net income attributable to owners of the parent: JPY6.6bn (+89.3% YoY)

The company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29) from the beginning of Q1 FY03/22. As a result, FY03/22 sales were JPY2.0bn higher than they would have been had the previous accounting standard been applied, and SG&A expenses were JPY2.5bn higher, while profit items from the operating level and below were JPY496mn lower. The YoY comparisons show the percentage change compared with results prior to the reclassification.

Sales grew YoY, driven by steady recovery in the Domestic Job Board and Overseas businesses.

Profit items from the operating level and below rose on higher sales, despite a rise in expenses. Expenses grew stemming from an increase in the cost of sales as a result of higher sales in the IT staffing business in India, increased advertising in the Domestic Job Board business in response to a recovery in demand for recruitment, and upfront spending on advertising for focus services such as engage and AMBI.

In Q1 FY03/22, some services belonging to the Other Domestic Businesses and Subsidiaries segment were reclassified to other segments, mostly the HR-Tech segment. The YoY comparisons below show the percentage change compared with results prior to the reclassification.

ATS and test businesses (including ZEKU's hiring and application management system and en Japan's online aptitude test), and services to provide post-hiring follow-up or to activate organizations (such as online training services and retention tools) were reclassified to the HR-Tech segment.

Brocante (sites for freelancers) and i Tank Japan (internship sites) were shifted to the Domestic Job Board segment.

Services for fresh graduates, OWLS (UI, UX), and new business development were not reclassified and remain part of the Other domestic businesses and subsidiaries segment.

Discussion of key businesses follows.

Domestic Job Board

Sales: JPY29.5bn (+35.3% YoY)
Operating profit: JPY8.2bn (-2.0% YoY)

Demand for recruitment, which had declined during the COVID-19 pandemic, recovered moderately. Amid a gradual tightening of the overall recruitment market, the company strengthened its efforts to attract job seekers by investing in advertising and promotional activities, resulting in an increase in sales.

The unit price per job listing for full-time positions increased, mainly due to clients with large hiring budgets. The number of job openings also grew on an increase in the number of clients resuming hiring.

Demand for recruitment of top-tier positions, such as professional and managerial positions, rose to a level exceeding that of the pre-pandemic period.

Domestic Permanent Recruitment

Sales: JPY9.6bn (+2.8% YoY)
Operating profit: JPY1.3bn (+160.5% YoY)

Sales grew steadily on the back of firm demand for recruitment of high-level professionals. In the category of young personnel with high potential, the company saw a recovery in hiring needs for inexperienced workers, regardless of industry or job type, on the back of rising demand for recruitment. Sales grew YoY as the company increased sales productivity despite having fewer employees than before the pandemic.

Overseas

Sales: JPY11.0bn (+37.0% YoY)
Operating profit: JPY934mn (+69.5% YoY)

There is a time lag of three months for results in the Overseas business to be reflected in the consolidated books. In FY03/22, earnings in the focus countries of Vietnam and India were as follows. Both Vietnam and India felt the full force of the COVID-19 pandemic from Q2 FY03/21 onward (locally, April–June 2020).

In India, the company focuses primarily on its IT staffing business. Sales rose to exceed pre-pandemic levels thanks to increased worldwide demand for IT and the minimal impact of the COVID-19 pandemic.

In Vietnam, the company mainly operates job board and permanent recruitment services. Demand for hiring in the country recovered moderately and sales grew. There was a temporary drop in sales in Q3 (locally, July–September 2021) due to lockdowns, but sales have since recovered.

HR-Tech

Sales: JPY3.9bn (+222.6% YoY)
Operating profit: JPY149mn (operating loss of JPY937mn in FY03/21)

In the HR-Tech segment, in addition to the recruitment and hiring business (engage), the company is engaged in the ATS and test businesses (including ZEKU's hiring and application management system and en Japan's online aptitude test), and services to provide post-hiring follow-up or to activate organizations (such as online training services and retention tools).

Recruitment and hiring (engage): Sales were JPY1.9bn (+60.1% YoY), and the company posted an operating loss of JPY444mn (operating loss of JPY937mn in FY03/21). The engage service had 417,000 corporate clients as of March 2022 (up from 337,000 clients in March 2021). The total number of job listings (both paid and free) published at engage grew, and client companies increased their utilization of the service. In response, the company spent upfront on advertising in Q4 (January–March 2022) to attract job seekers and accelerate sales growth.

ATS and test businesses: In FY03/22, sales reached JPY1.6bn. Usage increased as companies hired more people, resulting in higher sales.

Services to provide post-hiring follow-up or to activate organizations: In FY03/22, sales were JPY394mn.

Company forecast

			FY03/21			FY03/22			FY03/23
(JPYmn)			1H Act.	2H Act.	FY Act.	1H Act.	2H Act.	FY Act.	FY Est.
Sales			20,650	22,075	42,725	25,044	29,500	54,544	62,000
	YoY		-26.8%	-22.9%	-24.8%	21.3%	33.6%	27.7%	13.7%
Cost of sales			4,385	4,181	8,566	5,075	6,426	11,501	15,150
	Personnel expenses		2,629	2,555	5,184	2,874	3,002	5,876	5,974
		YoY	-18.2%	-24.9%	-21.6%	9.3%	17.5%	13.3%	1.7%
		% of sales	12.7%	11.6%	12.1%	11.5%	10.2%	10.8%	9.6%
	Other		1,756	1,625	3,381	2,201	3,424	5,625	9,176
		YoY	-10.6%	-13.1%	-11.8%	25.3%	110.7%	66.4%	63.1%
		% of sales	8.5%	7.4%	7.9%	8.8%	11.6%	10.3%	14.8%
Gross profit			16,264	17,895	34,159	19,968	23,075	43,043	46,850
	YoY		-29.4%	-23.4%	-26.4%	22.8%	28.9%	26.0%	8.8%
	Gross profit margin		78.8%	81.1%	80.0%	79.7%	78.2%	78.9%	75.6%
SG&A expenses			13,347	13,040	26,387	15,228	18,181	33,409	43,765
	SG&A ratio		64.6%	59.1%	61.8%	60.8%	61.6%	61.3%	70.6%
	Personnel expenses		6,754	6,218	12,972	6,385	6,486	12,871	14,980
		YoY	-4.8%	-12.5%	-8.6%	-5.5%	4.3%	-0.8%	16.4%
		% of sales	32.7%	28.2%	30.4%	25.5%	22.0%	23.6%	24.2%
	Advertising and promotion expenses		2,303	3,271	5,574	4,289	6,635	10,924	17,454
		YoY	-53.2%	-47.4%	-50.0%	86.2%	102.8%	96.0%	59.8%
		% of sales	11.2%	14.8%	13.0%	17.1%	22.5%	20.0%	28.2%
	Other		4,289	3,551	7,840	4,554	5,061	9,615	11,331
		YoY	-10.8%	-32.4%	-22.0%	6.2%	42.5%	22.6%	17.8%
		% of sales	20.8%	16.1%	18.3%	18.2%	17.2%	17.6%	18.3%
Operating profit			2,917	4,854	7,771	4,740	4,893	9,633	3,085
	YoY		-53.0%	1.0%	-29.4%	62.5%	0.8%	24.0%	-68.0%
	Operating profit margin		14.1%	22.0%	18.2%	18.9%	16.6%	17.7%	5.0%
Recurring profit			2,995	4,944	7,939	4,810	5,328	10,138	3,087
	YoY		-51.7%	1.7%	-28.2%	60.6%	7.8%	27.7%	-69.6%
	Recurring profit margin		14.5%	22.4%	18.6%	19.2%	18.1%	18.6%	5.0%
Net income			1,549	1,953	3,502	3,240	3,388	6,628	2,118
	YoY		-62.3%	-35.3%	-50.8%	109.2%	73.5%	89.3%	-68.0%
	Net margin		7.5%	8.8%	8.2%	12.9%	11.5%	12.2%	3.4%

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

Company forecasts by segment

					FY03/22	FY03/23
(JPYmn)					FY Act.	FY Est.
Sales					54,544	62,000
	YoY				27.7%	13.7%
	Investment
		HR- Tech engage			1,950	3,170
			YoY		-	62.6%
		Human resources platforms			4,410	5,420
			YoY		-	22.9%
	Existing businesses
		Domestic			37,840	40,330
			YoY		-	6.6%
			Job Board		25,840	27,440
				YoY	-	6.2%
			Permanent Recruitment		9,660	9,940
				YoY	-	2.9%
			Other		2,340	2,950
				YoY	-	26.1%
		Overseas			10,980	13,530
			YoY		-	23.2%
Operating profit					9,633	3,085
	YoY				24.0%	-68.0%
	Operating profit margin				17.7%	5.0%
	Investment
		HR- Tech engage			-440	-3,660
			YoY		-	-
			Operating profit margin		-	-
		Human resources platforms			810	-1,300
			YoY		-	-
			Operating profit margin		18.4%	-
	Existing businesses
		Domestic			9,250	7,890
			YoY		-	-14.7%
			Operating profit margin		24.4%	19.6%
		Overseas			930	950
			YoY		-	2.2%
			Operating profit margin		8.5%	7.0%

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

The company's forecast for FY03/23 calls for sales of JPY62.0bn (+13.7% YoY), operating profit of JPY3.1bn (-68.0% YoY), recurring profit of JPY3.1bn (-69.6% YoY), and net income attributable to owners of the parent of JPY2.1bn (-68.0% YoY).

In the medium-term business plan announced in May 2022, en Japan positions FY03/23 as a period of upfront spending. The company expects a decrease in profit due to an increase in advertising expenses for engage and its human resources platforms (AMBI and others), its focus businesses.

Dividend outlook

The company forecasts an annual dividend of JPY70.1 per share for FY03/23.

Medium-term business plan

en Japan announced its new five-year medium-term business plan covering FY03/23–FY03/27 at its full-year FY03/22 financial results briefing.

		FY03/22	FY03/23	FY03/24	FY03/25	FY03/26	FY03/27
(JPYmn)		Act.	Est.	MTP	MTP	MTP	MTP
Sales		54,544	62,000	70,000	85,000	100,000	120,000
	YoY	27.7%	13.7%	12.9%	21.4%	17.6%	20.0%
Operating profit		9,633	3,085	4,100	9,900	17,500	24,000
	YoY	24.0%	-68.0%	32.9%	141.5%	76.8%	37.1%
	Operating profit margin	17.7%	5.0%	5.9%	11.6%	17.5%	20.0%
Dividend per share		70.1	70.1	70.1	70.1	128.0	176.0

Basic policy

Grow the investment business to the same size as existing businesses in five yeas
Operate the investment business centered on engage and AMBI. Implement upfront spending
Invest a certain amount in existing businesses to continue generating high profits

Basic financial policy

The following is based on the company's previous plan. Shared Research plans to revise this section following interviews with the company.

The company in May 2020 retracted the FY03/20–FY03/22 medium-term business plan released in May 2019.

The company expects the slowdown in hiring, as well as the economic recession, the deterioration in customer earnings, and the suspension of some business activities as a result of the COVID-19 outbreak to have a sharp impact on the company’s earnings in the near term. While expecting a gradual recovery in staffing demand after the outbreak subsides thanks to the structural shortage of labor, the company believes uncertainty over when the outbreak will be brought under control makes it too difficult at this time to reasonably calculate medium-term business plan targets.

Given these conditions, the company has retracted its medium-term business plan, for which FY03/22 was to be the final year. It is making no major changes to its basic strategies and cites only the difficulties in calculating reasonable targets. The company aims to re-release its plan during FY03/22, once it again becomes possible to calculate reasonable figures.

In the medium-term business plan covering FY03/20 through FY03/22 announced in May 2019, the company targeted earnings growth supported by stable profits in the Domestic Job Board business, an increase in the number consultants in the Domestic Permanent Recruitment business, and spending on advertisements in the HR-Tech business.

The following commentary refers to the company’s segment strategy outlined in the medium-term plan it announced in May 2019.

Domestic Job Board

The company had previously focused on sales growth and increasing share of the job board market. However, in the medium-term plan it looks to focus on profit growth, except at AMBI (job aggregator site for recruitment agencies targeting people in their 20s for jobs with an annual salary of JPY5.0mn or above).

In the core [en] Career Change Info business, assuming that the market for online career change information services will grow at an annual rate of 7–8%, the company looks to focus on sales efforts to companies who hire a relatively large number of employees each year, mainly in Tokyo, Nagoya, Osaka, and other metropolitan areas. It aims to increase its share of each company’s hiring budget, outpace market growth, and raise profit margins. In FY03/19, the company adopted a new sales approach. Under the previous approach, it assigned a regional representative and a separate representative for each large customer. But under the new approach, it categorizes large customers by annual ad placement volume, and conducts sales only by phone to customers who place a relatively small number of job ads, thereby improving efficiency of sales activities.

AMBI has grown at a rate exceeding the company’s expectations ever since it was launched in FY03/18. In FY03/20, the company increased spending on advertisements and personnel. Expenses increased in FY03/20, but the company expects margins to rise in the medium term.

Domestic Permanent Recruitment

The Domestic Permanent Recruitment business includes consultation to job seekers and consultation to companies. In the medium-term plan, the company aims to increase the number of consultants for companies to boost the number of job ads. It also looks to raise the number of job applicants more efficiently by using its database of more than 8mn job seekers for full-time positions.

The company targeted. sales growth, driven by an increase in the number of consultants in FY03/20 and their contribution to sales. It does not assume a change in commission rates or other factors. It received commissions of roughly 30–35% of annual salaries in FY03/20. The company estimates that new consultants take around six months until they begin to contribute to sales, and for two years thereafter their productivity continues to improve. en Japan anticipates improved productivity of consultants will continue to push up profit margins in the medium term.

Overseas

The company focuses on earnings growth in Vietnam and India, where it expects the population and economy to expand.

The company looks for double-digit sales growth in the medium term, driven by growth in Vietnam and India. It expects sales growth to also drive profit growth.

Vietnam

en Japan has a roughly 80% share of the job board market in Vietnam and boasts the industry’s top sales. It aims to expand earnings further by leveraging its brand recognition, job seeker database, and customer base; opening business sites in new areas; and offering new services in the learning business, such as English and technology classes for business professionals.

Vietnam’s labor environment

Population	92.7mn in 2016, 103mn in 2030 (estimate)
Average age	32.6 years old (2020 estimate)
GDP YoY	7.1% (real GDP, 2018)

Source: Company data

India

en Japan acquired FFI in March 2019. FFI has 20 years of experience in IT staffing, its clientele includes leading IT companies in India, and it employs around 3,200 engineers. The company looks to train the engineers at FFI in advance technology so that they can be dispatched to companies at higher prices and increase profit margins. In addition, through collaboration with its India-based recruitment agency subsidiary New Era, en Japan looks to implement contract-to-hire staffing, in which temporary staff become eligible for a full-time position after the contract period.

India’s labor environment

Population	1.34bn in 2017, 1.51bn in 2030 (estimate)
Average age	26.7 years old (2020 estimate)
GDP YoY	7.2% (real GDP, 2018)

Source: Company data

HR-Tech

The HR-Tech business includes engage and other related services. engage offers a template for corporate recruitment pages and comes with a function to automatically post job ads on Indeed, Google for Jobs, and other job ad search engine sites that use web crawlers (programs that crawl the Internet by following links to collect information on websites). It also allows customers to track an applicant’s selection process for free. Other tools packaged with the service include HR OnBoard, a follow-up tool designed to prevent early employee turnover, and Talent Analytics, an online aptitude test. en Japan plans to add peripheral services, such as employment and labor management and employee training, centered on the core recruitment agency service at engage.

engage mainly caters to regional SMEs who hire a relatively small number of employees each year. Most sales activities are carried out through newspaper ads rather than in person. By doing so, it is able to cut personnel expenses and reach a user base that other job boards conducting in-person sales do not target, because sales expenses would make it difficult to generate profit. As of end-FY03/20, engage had 270,000 customers (up 80,000 vs. end-FY03/19).

From April 2019, the company introduced a premium paid plan that is expected to raise the number of applicants through posts on PR sections of job information websites such as [en] Career Change Info and en BAITO, thus contributing to profit. Under the new paid model, customers are charged for each job applicant (prices vary depending on profession, and average about JPY10,000).

In the medium term, en Japan aims to increase sales driven by premium plans. Sales at engage depend on the number of paying client companies, the number of applications per company, and price per application. In FY03/20, the company focused on advertising to increase the overall number of clients using engage, which are prospective paying clients. This brought the number of corporate clients to 270,000 as of end-March 2020 (+80,000 YoY). From FY03/21 onward, the company plans to grow sales of its paid services in light of hiring trends among corporate clients obtained via engage, and marketing paid services to companies that use the free option.

The company expects expenses to be comprised mainly of advertising expenses, along with call center operation fees. It anticipates continued outlays for advertising and call center operations, as well as the addition of services in peripheral businesses such as employment and labor management and employee training.

FY03/21 initiatives relating to engage included a major overhaul of services, sales structure reforms, and launch of the recruitment website, engage job board, promotion of engage services, and their functional enhancement.

Major overhaul of services

In September 2020, there was a major overhaul of engage services. The paid version offers greater exposure on other companies’ websites and has changed its charging methods. The company aims to increase the pace of growth in paying customers and boost the number of applicants per company, in the hope that an increase in applications from job seekers will drive earnings growth.

Paid version offers greater exposure on other websites: Customers using the paid version of engage can post job openings on the company’s job board, and these are also posted in the paid sections of other companies’ job boards, such as LINE Career and aggregator websites including Indeed, boosting their reach. As a result, page views on the paid version are roughly 23× those on the free version.

Adjustment to charging methods: Under previous charging methods, clients were not charged when they applied for the paid service. The client paid the company for months during which job applications were received. Under the new arrangements, clients must make an upfront deposit of JPY50,000 before they use the paid services, and the company’s fee is deducted from this deposit when a candidate applies for a job. The company said that customers can manage their recruitment budgets more easily under the new method as it does not involve monthly payments. It hopes to boost the number of applicants per company under the new charging method.

Sales structure reforms

In Q4 FY03/21, the company undertook sales structure reforms aimed at promoting use of paid services, switching from an approach built around cold calls to SMEs to one of following up on inquiries made by SMEs. As a means of generating more inquiries, the company is now focusing its marketing efforts on online seminars and mailouts. According to management, the new sales structure has enabled a reduction in personnel while also delivering an increase in paying users.

Launch of recruitment website, engage job board

In March 2021, the company opened engage job board, which pulls together job listings created on the engage platform. The engage job board launched as one of the largest recruitment websites in Japan, with full-time, part-time, and internship listings from about 100,000 companies.

Other: M&A and investment policy

In the medium-term plan withdrawn in May 2020 en Japan had allocated roughly JPY20.0bn for M&A and investments. In Japan, it looks to accelerate growth mainly in the HR-Tech business through M&A and investments in technology-related companies. Overseas, it aims to conduct M&A to strengthen its businesses in Vietnam and India as well as to bolster its technological capabilities.

Between April 2019 and March 2021, the company outlaid roughly JPY3.2bn for M&A and investments: JPY1.2bn on M&A and JPY2.0bn on investments.

Business

Description

A pioneer of online job-vacancy advertising in Japan, the company operates a variety of job advertisement websites and provides recruitment agency services.

en Japan’s segments are: Domestic Job Board, Domestic Permanent Recruitment, Overseas, and HR-Tech. The company aims to grow earnings in the Domestic Permanent Recruitment, Overseas, and HR-Tech segments, with a stable source of earnings in the Domestic Job Board segment.

Business model

The company’s clients can be divided into two main groups: companies looking to hire staff, and HR-related firms, such as recruitment and temporary staffing agencies. The company’s services are divided into two main groups: job boards and recruitment agency services.

Job boards

The company’s [en] Career Change Info website meets the needs of companies looking to recruit staff by connecting them directly to job hunters. The company plans and offers job vacancy ads to companies through interviews, and places these ads on its websites to receive ad posting fees. Job hunters can access the ads free of charge.

HR-related companies can use the company’s [en] Career Change Consultant, AMBI, [en] Temporary Placement Info, en BAITO (part-time work), and [en] Temp to Perm Info. The company sells advertising on their sites to HR-related companies, and job vacancy and HR-related information is available for free to registered users.

The company creates job vacancy ads for companies advertising on its sites while recruitment firms using en Japan’s websites post the information themselves. On the mainstay [en] Career Change Info site, the ads are placed for a fixed period of four weeks, and the fee is charged per each four-week course. Prices vary according to the plan chosen, although for all of the plans it is the company that creates the advert rather than the client. The average price per client per site varies according to the overall mix of sales plans chosen by clients.

Recruitment agency services

In August 2010, the company made en world Japan K.K. a subsidiary. EWJ provides job placement services in Japan and primarily serves global companies by introducing bilingual job hunters. In April 2013, en Japan also began full-scale operations of a recruitment agency service, en Agent, which the company is now promoting.

Business model for employment website and permanent recruitment

Source: Company data

Domestic Job Board