Persol Holdings Co Ltd

TSE:2181

Q1-2026 Earnings Call

[和田 孝雄, executive]

Hello, I am Wada, CEO of Persol Holdings. Thank you very much for joining us today. I have two points I would like to convey to you today. The first is the summary of fiscal 2025 Q1 financial results. The second is Persol Group's topics. Let me start with the financial results. Revenue was JPY 373.6 billion. Adjusted EBITDA was JPY 21.7 billion. Operating profit was JPY 15.4 billion. Compared to the full year forecast, adjusted EBITDA progress rate was 25.2%. We are progressing in line with the plan. The second is Topics. We held an IR Day, which I will explain about later. Also, we were selected for 2 FTSE indices, which I will also communicate to you more about later.

I would also like to report that we joined the Valuable 500, an international initiative driving the inclusion of people with disabilities in society. I will now ask CFO, Tokunaga, to brief you on the summary of the consolidated financial results.

[Junji Tokunaga, executive]

Hello. I am Tokunaga, CFO. I will first present the summary of the consolidated financial results, results of each SBUs and the progress of the current KPIs. First is the summary of consolidated financial results. As was explained by CEO Wada earlier, we disclosed our IFRS-based full year operating profit forecast of JPY 66 billion and adjusted EBITDA forecast of JPY 86.5 billion at the beginning of this fiscal year in May and made a good progress towards achieving them in Q1.

Revenue increased 3.6% year-on-year to JPY 373.6 billion. Operating profit declined 9.2% year-on-year to JPY 15.4 billion. Adjusted EBITDA also declined 5.1% to JPY 21.7 billion. All were roughly in line with our forecast we announced at the beginning of the fiscal year. Australia's Programmed received JPY 1.3 billion of tax returns in Q1 of last fiscal year, which caused a decline in profit year-on-year this quarter by 17.7% to JPY 10.6 billion. However, the progress rate was 26% and is in line with our plan. This is a slide on fiscal 2025 Q1 analysis of year-on-year change in adjusted EBITDA.

Gross profit increased JPY 2.3 billion, partly due to the impact of exchange rate. SG&A expenses increased JPY 3.5 billion, partly due to the impact of exchange rate. As a result, adjusted EBITDA decreased JPY 1.2 billion year-on-year to JPY 21.7 billion. SG&A expenses increased because of increase in personnel expenses by JPY 1.3 billion as described, partially as a result of increase in wages. As for system investments, it was not that a specific SBU had an extraordinary spending, but because each SBU and holdings are making system investments, it increased by JPY 1.2 billion.

Next is a slide on adjusted EBITDA versus operating profit. There are no major differences in the trend versus the last year. Major factors of change year-on-year are depreciation cost, increase or decrease in accrued paid leave and share-based payment expenses, and each of them increased slightly. This slide shows the progress towards full year revenue forecast of JPY 1,540 billion and full year adjusted EBITDA forecast of JPY 86.5 billion. Progress rate of revenue in Q1 was 24.3%, which is as usual. For the progress of adjusted EBITDA compared to the last year's 29.3% or that of 2 years ago at 26.3%.

It looks a bit slower, but it is roughly as planned at 25.2%. We believe we will be able to achieve full year adjusted EBITDA forecast of JPY 86.5 billion and operating profit forecast of JPY 66 billion sufficiently. Pages 8 to 10 show changes in revenue, adjusted EBITDA and operating profit. I will explain about each of the SBUs later. This slide shows the progress rate of revenue, adjusted EBITDA and operating profit by SBU for Q1. As you can see, Staffing and Career SBUs progress rate exceeded 30% in Q1 since they tend to be skewed towards Q1.

On the other hand, for BPO and technology SBUs, progress rates look slow at 12% and 8%, respectively. However, they tend to have profits skewed towards the latter part of the fiscal year. We thus believe full year EBITDA forecast of JPY 10 billion, respectively, are achievable. Next is financial results by SBU and the latest KPIs. Let me start with our core staffing SBU. Revenue increased 3.7%, which may be a bit weak compared to the forecast at the beginning of the fiscal year, but as the table on the right shows, number of active staffs increased 2.2%, charge price increased 2.1%, growing stably.

As for placement business, which is a part of Staffing SBU, revenue increased 9.3% year-on-year, having continued its strength from the previous fiscal year. We are expecting circa 10% growth for placement business in Staffing SBU from Q2 onwards as well. Next slide shows the KPIs for Staffing SBU. But since I explained about them already, I would like to skip this slide. Next is BPO SBU. As a result of acquisition of CSL in February this year, revenue increased 24.7%. To be specific, CSL contributed to increase in revenue by JPY 5.8 billion year-on-year.

For adjusted EBITDA, CSL contributed JPY 0.4 billion. This year, we no longer have the impact of COVID-19-related project, which was JPY 0.16 billion contribution in Q1 of last fiscal year. Organic revenue is defined as revenue, excluding CSL and COVID-19-related projects, and it increased 5.2% year-on-year. Last fiscal year, we transferred some of the businesses that were a part of BPO to Technology SBU, therefore if we compare apple-to-apple, meaning before the transfer of the businesses, revenue grew circa 8%.

Next is the third SBU, Technology SBU. Revenue grew circa 12%, performing favorably. I will touch on the KPIs later, but the number of engineers increased and average sales per unit also increased steadily. On the other hand, as is described on the right, adjusted EBITDA decreased due to increase in new graduate hires of 97 or almost 100 persons, pushing up cost of sales. Although it does not have much impact on the consolidated results since it is an intra-group transaction, there are some delays in system developments, which pushed down adjusted EBITDA from JPY 1.1 billion last fiscal year to JPY 0.8 billion this fiscal year.

Now I will explain the KPIs of Technology SBU. Number of engineers were 6,591 in Q1 last fiscal year, and it increased 7.4% to 7,078 people. We have been able to steadily grow the number of engineers. Please take a look at the graph at the bottom. Average sales per unit increased 1.6% from JPY 984,000 to JPY 1 million. Please keep in mind that this number represents regular employee engineers, excluding registered engineers. This is a slide on Career SBU. Revenue increased 6.4%. We have the breakdown shown on the right.

Placement increased 4.2% year-on-year and job recruitment media increased 7.6%. At the beginning of the fiscal year, we expected high-income group to continue its high growth rate. And on the other hand, for majority group, we assessed both companies and individuals to continue to remain cautious. We recognize that the market environment has not changed from our assessment. As for KPIs, the number of consultants decreased 4.4% year-on-year to around 2,800 persons. Our strategy regarding consultants is to maintain the current level of 2,800 to 3,000. We do not intend to increase them significantly. As the line graph above shows, we would like to constantly enhance productivity of consultants by promoting DX and in the future, by utilizing AI more.

We improved productivity by 9.1%, making good progress. The last SBU is Asia Pacific SBU. Despite revenue increase of circa 5% on a local currency basis, Australian dollar is currently weakening and year-on-year, revenue decreased 4% in Japanese yen. Looking at each of the business, facility management business in Australia continued to perform well. We expect growth rate exceeding 10% to continue from Q2 onwards as well. On the other hand, we recognize that placement business in Asia continues to remain sluggish. As was explained at the earnings call in May, for mid- to long-term growth of facility management business, we are renewing the systems.

In Q1, we spent around JPY 0.5 billion as planned and are making good progress. As a one-off factor, employment-related subsidy we are receiving in Singapore was JPY 0.7 billion last fiscal year, but fell to JPY 0.1 billion this fiscal year. Although this is one-off, this is another reason for the decline. Last of all is Others, Adjusted. For Others, as we are strengthening corporate sales of Shareful, and there was a small loss. For adjusted, system investments were made at Holdings, including increase in number of engineers, and there was a slight increase in loss.

Last of all, Slides 22 and 23 show a list of SBU KPIs. Please refer to them later by yourself. It will be a repetition, but Q1 IFRS-based operating profit made good progress towards full year forecast of JPY 66 billion and adjusted EBITDA of JPY 86.5 billion. This concludes my presentation.

[和田 孝雄, executive]

Thank you. Now I, Wada, would like to share the group topics. First, on July 22, we held IR Day 2025 and explained about our technology initiatives. Our business model has good affinity with AI agent, so we talked about how we will advance with such initiatives and also touched on future AI strategy unique to Persol. There were many viewers. If you have not yet watched the video, please do so when you have time to better understand our initiatives.

Next topic is that we were selected as a constituent of global investment indices. We were selected as a constituent of 2 indices of FTSE Blossom Japan Index and FTSE4Good Index Series. With this, we have been selected for all 6 indices used by GPIF. We feel very honored about this. We are also very much proactive about employment of people with disabilities. In order to drive the inclusion of people with disabilities in society more, we joined the Valuable 500, an international initiative. Persol's vision is Work and Smile. We are promoting initiatives aimed at maximizing the possibilities of all people, including those with disabilities to work.

As a part of this initiative, we joined the Valuable 500. We would like to have everybody, including those with disabilities, be able to maximize their work opportunities. We recognize promoting diversity is important also at our company, and we will press ahead with this initiative. On this slide, we have topics described by SBU. I would like to pick up some of the main points. For Staffing, we have the intention to enable an environment where staffs will be able to work fully remote and thus developed Remote Tasker, which we are promoting. Number of companies using this online outsourcing service topped 100 and believe the usage will continue to increase going forward.

The second SBU is Career SBU. We have high-class career change service, doda X. It ranked #1 in the 2025 Oricon Customer Satisfaction Survey for career change scouting service. We are very happy and feel very honored to be evaluated highly and would like to express our appreciation. Next is APAC. We are rebranding the name. Kelly used to have a stake in the beginning, and therefore, the brand name was PERSOLKELLY. But now that we have 100% ownership, and we are rebranding it to Persol, taking this opportunity. In Asia Pacific as well, we would like to institutionalize our vision of Work and Smile and have it penetrate the market so that we can be better recognized.

The last topic is about the Group. Within the Group, we created AI basic policy as the Persol Group's highest applicable standards on the use of AI. We recognize usage of AI is very important. To be able to utilize AI safely with a sense of security, we established AI Basic Policy so that the users will be able to use our services safely. As such, we are promoting this initiative. This concludes my presentation. Thank you.