RareJob : (Delayed)Financial Results for the Three Months Ended June 30, 2020

August 17, 2020 at 03:03 am EDT

RareJob, Inc.

Financial Results for the Three Months Ended June 30, 2020

August 13, 2020

Agenda

FY2021/3 1Q Result
FY2021/3 Plan
FY2021/3 1Q Topics
Management Strategy Appendix

1. FY2021/3 1Q Result

FY2021/3 1Q Results Summary

Net sales rose 29.9% year on year.

B2C sales increased 31.0% YoY due in part to temporary demand created by the spread of COVID-19.
B2B & B2School sales rose 27.2% YoY. This reflects B2B sales growth based on sales activity from the previous fiscal year. Some impact of school closures was seen on B2School sales, but this was minor as a percentage of total sales. At present, the impact of COVID-19 is not yet evident.

Operating income increased 86.5% year on year.

Growth in operating income was achieved by raising productivity and business efficiency, which offset a rise in cost of sales due to an increase in the number of lessons per user as a result of COVID-19.

Both net sales and operating income hit post-IPO highs for the first

quarter.

(In JPY MM)

Financial Results for the Three Months Ended June 30, 2020

Net sales rose +29.9% and operating income increased 86.5% year on year. Achieved both net sales growth and profitability improvement under COVID-19.

	FY 2020/3 1Q	FY 2021/3 1Q	YOY
	cumulative	cumulative


Net sales	985	1,280	+29.9%

Gross profit	601	714	+18.8%

Operating income	56	106	+86.5%

Ordinary income	51	107	+110.3%

Net income	25	66	+157.8%
attributable to owners of parent



Operating margin	5.8%	8.3%	+2.5pt

ROE*	7.7%	19.1%	+11.4pt

*Annual basis

Post-IPO Consolidated 1Q Result

Both net sales and operating income in FY2021/3 1Q hit a record

high since listing. YoY of net sales significantly increased.

Net Sales

(In JPY MM)

1,500

1,280

985

1,000

781

720

620

570

480

500

FY	FY	FY	FY	FY	FY	FY
2015/3	2016/3	2017/3	2018/3	2019/3	2020/3	2021/3
1Q	1Q	1Q	1Q	1Q	1Q	1Q

Operating income

(In JPY MM)

110									106

90


70							56


50				37

31


30					18


10						0


-10		FY	FY	FY	FY	FY		FY	FY
2015/3	2016/3	2017/3	2018/3	2019/3	2020/3	2021/3

-30		1Q	1Q	1Q	1Q	1Q		1Q	1Q
		-17

Net Sales Breakdown for the Three Months Ended June 30, 2020

B2C sales increased 31.0% YoY due in part to temporary demand created by COVID-19. B2B & B2School sales rose 27.2% YoY. This reflects B2B sales growth based on sales activity from the previous fiscal year.

				(In JPY MM)

		FY 2020/3 1Q	FY 2021/3 1Q	YOY
		cumulative	cumulative


Net Sales	985	1,280	+29.9%

	B2C Sales	710	931	+31.0%
	(constituent ratio)	（72.1%）	（72.7%）


	B2B & B2School Sales	274	349	+27.2%
	(constituent ratio)	（27.9％）	（27.3％）

Expenses (Cost of Sales and SG&A) Breakdown for the Three Months Ended June 30, 2020

Tutor fees increased 8pt due to increase of lessons caused by COVID-

19. SG&A to net sales ratio decreased due to increased productivity and efficiency.

(In JPY MM, expenses sales ratio in parentheses)		Expenses	YoY	Factors
	(ratio)


		267	Other SG&A	+30	Minimized cost increase by productivity
		(21%)	(+13%)	improvement.

		68
		Advertising	+11 (+18%)	Minimized cost increase by more efficient
	237	(5%)	acquisition of users.
	(24%)
	272	Labor cost (SG&A)	+24	Employees increased due to active recruiting
	57
SG&A	(21%)	(+9%)	last year, but cost kept in control due to
(6%)			increased productivity and efficiency.

	248	112
	Other cost of sales	-6
	(25%)	(9%)	(-5%)

	118					Cost of sales increased due to tutor fees led by

	(12%)	454			+189	user increase and increase of lessons per user
		Tutor fee(Cost of	caused by COVID-19.
Cost of Sales		(35%)
265	Sales)	(+71%)

	(27%)

	FY 2020/3 1Q	FY 2021/3 1Q

Effect of COVID-19 on Tutor fees

The ratio of tutor fees to net sales ranged from 23% to 28%. Effect of COVID-19 on tutor fees ratio is about 7-8pt increase due to increase of lessons per student.

Tutor

fees

(%)

40%

35%

30%

25%

20%

35%

15%

26%	28%	27%	27%	27%	27%	28%

					23%

10%

1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q
	FY 2019/3			FY 2020/3		FY 2021/3

The increase

from the range of

recent 2 years is

about 7-8pt.

Changes in the Number of RareJob Eikaiwa Lessons per User

The number of lessons per user peaked in April and May due to the impact of COVID-19.

Indexed by

making monthly

average number

of lessons per

user in January

100

Changes in the Monthly Average Number of Lessons per

User

160

140

120

100

Jan

Feb

Mar

Apr

May

Jun

2020

2. FY2021/3 Plan

FY2021/3 Plan and Progress

Progress is within the range of expectations despite the impact of COVID-19.

		FY 2020/3	Guidance for	Change		FY2021/3	Progress
		Results	FY2021/3	YoY		1Q cumulative


Net sales	4,512	5,300	+17.5%		1,280	24.2%

	B2C Sales	3,077	3,761	+22.2%		931	24.8%

	B2B & B2School	1,435	1,538	+7.2%		349	22.7%
	Sales


Gross margin	2,829	2,996	+5.9%		714	23.8%

Operating income	446	500	+12.0%		106	21.2%

Ordinary income	415	450	+8.2%		107	23.9%

Net income Attributable	205	270	+31.5%		66	24.7%
to owners of parent



Operating margin	9.9%	9.4%	-0.4pt		8.3%	-

ROE	15.2%	At least 10.0%	-		*19.1%	-

*Annual basis

Post-IPO consolidated results

We expect net sales to increase for 13 consecutive fiscal years, operating income to increase for 5 consecutive fiscal years and the highest profit in our history.

Net sales

Operating income

(In JPY MM)

6,000

5,300

5,000		4,512

4,0003,639

2,968

3,0002,587

2,363

2,112

2,000

1,000

FY2015/3 FY2016/3 FY2017/3 FY2018/3 FY2019/3 FY2020/3 FY2021/3

(Forecast)

(In JPY MM)

500

500		446

400

300

200

200178

130

100

FY2015/3 FY2016/3 FY2017/3 FY2018/3 FY2019/3 FY2020/3 FY2021/3

(Forecast)

FY2021/3 Initiatives

Carry out business operations focusing on improvements in profitability, expansion

of net sales, system development, and R&D eyeing the use of technology.

Improvement of profitability

There is enough human resource to operate the business, and the growth rate of employees, excluding Filipino tutors, has been kept in check.
Continue to enhance productivity and business efficiency.

Expansion of net sales

As for B2C sales, aim for growth in net sales by meeting growing demand from adults and students for training programs due to impact of COVID-19 (increase in time spent at home and school c;osures).
As for B2B sales, aim for net sales growth by capturing demand for replacements for offline training and studying

abroad.

System development

Implement a major system replacement for sales expansion and service enhancement going forward.

R&D eyeing the use of technology, including data and AI

Expand sales of an automated scoring system for speaking tests by combining AI and speech recognition technology.
Continue to analyze massive amounts of lesson data and research methods to improve learning efficiency and increase the learning retention rate.

3. FY2021/3 1Q Topics

Developed Automated English Speaking Scoring System "PROGOS"

Aim for the appropriate assessment of English speaking skill, and visualization, objectification, and promotion of common understanding as a business skill.

JR Kyushu introduced "Omotenashi Eigo Otai" [Railway Edition]

JR Kyusyu introduced the program for improving English conversation capabilities of train station attendants and crew members. We will try to expand the program by fulfilling the demand from railway industry.

4. Management Strategy

The "With Corona, After Corona" Business Environment

Individual

Some adherence to working in remote environments
More side jobs and side businesses due to a poorer hiring environment
No commuting frees up time for learning

Corporate

Not just business, but also hiring and training is going online
More remote work is stimulating freelancing, etc.
Overseas businesses are managed remotely when you can't travel abroad

Educational

institutions

More ICT and online learning due to school closures
Lack of school teaching could be compensated with private online services at home

We are seeing accelerated online learning, which has been a goal of RareJob, and

new opportunities due to a shift to skill-basedwork styles.

Future business development

With the advancement of online and skill-based work style, we are building on our English-related business. Developing global leader business and carrier-related business in Japan and overseas.

Carrier-related

business

Individual

learning and

employment

data

Japan

English-related

business

Global Leader

development business

English-related business

Aiming for a Breakthrough Improvement of Learning Effect Using Technology

Develop products offering a strong learning effect using technology, work in cooperation with other companies, provide a platform for acquiring English conversation skills, and aim to dramatically improve the learning effect.

Learning efficiency

Assessment

Accurately evaluating

individual conditions

Automate the speaking

test by combining AI

technologies such as

voice recognition and natural language processing

			Amount of learning
	Provision of
Recommendation		Continuous learning
learning
		Implementing system for

Recommending suitable	Providing wide range of		keeping motivation toward
plan/content for individuals	learning plan /content		continuous
			learning

Accumulate learning	Expand services and	Accumulate and
data and recommend	collaborate with other
	analyze lesson audio
learning plan content	companies' services to
	data to visualize hard-
that is best suited to	provide a wide range of
	to feel results.
individuals.	learning plan content.

Aim to provide an English learning platform that unifies the above.

Direction of Business Development

As work styles change, we aim to provide services that

accommodate the needs of those new work styles.

Global leader development business		Career-related business

• English is a tool, and the aim is	•	Matching individuals with
to acquire skills for working on		English fluency and global skills
the global level.		with companies in need of global
		talent.
• Creating new business with low
cost by leveraging Filipino tutors	•	Dramatically improving human-
and learning platforms in online		resource matching precision by
English conversation business.		using speaking-test results and
		global-skills assessment results.

Progress towards medium-term performance targets from FY2020/3 through FY2022/3

Net sales and operating income went over the targets for FY2020/3, and we expect

that we will hit the performance targets for the medium-term, despite being affected

by COVID-19 for FY2021/3.

Net sales	Operating income
(In JPY 100MM)	(In JPY 100MM)

	70					8
Targets					62.3			7
					7
	60

Results/			52.2	53
					6
Forecasts	50
45.1
	44					5	5
						5
	40					4.4

						4
	30					3
						3
	20					2

	10					1

	0					0
	FY2020/3	FY2021/3	FY2022/3	FY2020/3	FY2021/3	FY2022/3

(Reference) Three-Year Performance Targets and Progress

						(In JPY 100MM)

		FY 2020/3	FY 2020/3	FY 2021/3	FY 2021/3	FY2022/3
		Initial target	Actual	Initial target	Forecast	Target

Net sales	44.0	45.1	52.2	53.0	62.3

	B2C Sales	29.3	30.7	33.1	37.6	37.4

	B2B & B2School Sales	14.7	14.3	19.1	15.4	24.8

Operating income	3.0	4.4	5.0	5.0	7.0

Amount of Profit*	2.5	4.2	3.0	4.5	5.0


ROE	9.9% or more	15.2%	10% or more	10% or more	10% or more

Consolidated ordinary income after adjustment for minority interests in subsidiaries, which is one of the requirements for listing on the First Section of the Tokyo Stock Exchange.
The above performance targets do not include the Global Leader development business and the Career-related business.

Appendix

RareJob, Inc.

Group Vision

Chances for everyone, everywhere.

Company outline

Established: October 18, 2007

Capital: 573,412 thousand Yen (As of June 30, 2020)

Location: Tokyo Head Office, Kansai Branch, Chubu Branch,

Tokyo Stock Exchange Mothers (Securities Code: 6096)

Consolidated subsidiaries

RareJob Philippines, Inc.

RareJob English Assessment, Inc.*

Geos Language Centre Pte Ltd.

ENVISION INC.

ENVIZION PHILIPPINES, INC.

RIPPLE KIDS EDUCATIONAL SERVICES, INC. * Preparing for registration

Director

Gaku Nakamura, Co-founder and CEO

Toshiyuki Fujita, Executive Vice President

Seishi Yasunaga, COO

Takao Mihara, Outside Director*

Jun Narimatsu, Outside Director *

Miki Igarashi, Outside Director*

(* Audit and Supervisory Committee Member)

Service Lineup

B2C

B2B

B2School

RareJob English conversation

・General English course ・Business English course

・Young Learner course

Speaking test

Learning counseling


	Students and children		Smart Method® Course		Online English


Ripple Kids Park		Online Performance-Guaranteed Program	Speaking in
Children's online English conversation			Classroom
					For four skills
					Abundant educational

					materials exclusively for
			RareJob Eikaiwa Abroad		schools

					For study abroad programs

			Offline session
				Individual use


			Option for training personnel		Taking extracurricular lessons

PROGOS

Automated English Speaking Scoring System "PROGOS"

RareJob English conversation

You can speak English one-on-one everyday, regardless of location or time. Online English conversation service with more than 800 thousand cumulative free subscribers.

6000 Philippine tutors registered with about 1% hiring rate.
The Lesson Room, a proprietary system, can be used from the website and apps.
Lesson hours are from 6 o'clock in the early morning to 1 o'clock in the middle of the night. Reservations can be made up to 5 minutes before the lesson.
The 25-minute plan for daily English conversation is 5800 yen per month for everyday English conversation.

Cumulative number of free members for RareJob English conversation

Cumulative free membership increased steadily.

(Thousands)

900														844


800													738



700												645



600										459	557


500

400									342


300								232


200						111	163


100			9	25	58
1


0

2008/3	2009/3	2010/3	2011/3	2012/3	2013/3	2014/3	2015/3	2016/3	2017/3	2018/3	2019/3	2020/3

Breakdown of Quarterly Net Sales and Expenses (Cost of Sales and Selling, General and Administrative Expenses)

Net sales

Expenses

(In JPY MM)	2021/3期	1Q	(In JPY MM)	Tutor fee(Cost of sales)	Other cost of sales

				Labor cost(SG&A)	Advertising

				Other SG&A

								349	1,200
1,000						428	406											267
					325				1,000
															298

			330	274												233
		347									243		215		68
	247								800				237
204										217		58	83
										217			59
									201	69				272
											50	57
									600						282
										63				334
500									73				272
							931			225	263	248		112
										217
						787	806
			671	710	771		400	215				127		122
	612	648									126
577							106	113	119	118
										88							454
									200
																339
														297	284
										201	237	265	270	265

0									0
1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q		1Q	2Q	3Q	4Q	1Q*	2Q	3Q* **	4Q	1Q
	FY2019/3			FY2020/3	FY2021/3			FY2019/3			FY2020/3		FY2021/3

Tutor fees (cost of sales) and SG&A expenses increased in FY2020/3 1Q and decreased in FY2020/3 3Q compared with the previous quarter due to transfer pricing taxation for overseas subsidiaries.

** Personnel expenses (SG&A expenses) increased significantly due to the booking of performance-linked bonuses as	29

expenses in a lump sum.

English-related Business Market Size

E-learning market is still small compared to the classroom type, and

there is plenty of room for expansion.

English conversation school in Japan market size1)

(In JPY 100MM)

4,000	3,490	3,505	3,530	3,460

3,440
				3,100
3,000

2,000

1,000

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020

(Forecast)

Online language learning in Japan market size1)

(In JPY 100MM) 250

205

200
160

150		125

	110
100		90
80

50

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020

(forecast)

1) Yano Research Institute Ltd.

HR Business Market Size

HR business* market size1)	Corporate training market size2)
*Including staffing service, staff agency, support for re-employment

(In JPY 100MM)

61,831 64,624

57,729

60,000 54,380

42,709

40,000

20,000

FY2015 FY2016 FY2017 FY2018 FY2019 (Forecast)

Source :

(In JPY 100MM)

6,000

4,970 5,080 5,170 5,230 5,270 5,200

4,000

2,000

FY2015 FY2016 FY2017 FY2018 FY2019 FY2020

(Forecast)

Yano Research Institute conducted a survey on the human resources business market in 2019.
Yano Research Institute, "Business Training Service Market and Outlook 2020"

Disclaimer

This material has been prepared by the Company for the purpose of informing investors of the current status of RareJob, Inc. (hereinafter referred to as "RareJob").
The materials and information provided in this document include so-called"forward-looking statements". These forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and are subject to uncertainties that could cause actual results to differ materially from those discussed in the forward-looking statements.
These risks and uncertainties include general domestic and international economic conditions, such as general industry and market conditions, interest rate and currency exchange rate fluctuations.
We assume no obligation to update or revise the forward-looking statements contained in this announcement, even in the event of new information or future events.

Contact Information

RareJob Investor Relations

MAIL:ir@rarejob.co.jp

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RareJob Inc. published this content on 17 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 August 2020 07:02:18 UTC

Market Closed - Japan Exchange Other stock markets 02:00:00 2024-05-22 am EDT			5-day change	1st Jan Change
442 ^JPY	-4.33%		-35.47%	-48.54%

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	1st Jan change	Capi.
RAREJOB INC.	-48.54%	28.08M
IDP EDUCATION LIMITED	-13.33%	3.2B
OFFCN EDUCATION TECHNOLOGY CO., LTD.	-36.76%	2.2B
NATIONAL COMPANY FOR LEARNING AND EDUCATION	+27.92%	1.75B
AFYA LIMITED	-11.31%	1.71B
SHANGHAI ACTION EDUCATION TECHNOLOGY CO.,LTD.	+37.80%	867M
PORTER HOLDING INTERNATIONAL, INC.	-.--%	813M
NIIT LEARNING SYSTEMS LIMITED	+3.42%	737M
CHINA EAST EDUCATION HOLDINGS LIMITED	-2.24%	712M
ATAA EDUCATIONAL COMPANY	-11.70%	719M

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RareJob : (Delayed)Financial Results for the Three Months Ended June 30, 2020

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