Link and Motivation Inc. · 2019-08-09 · First Nine Months of 2015: Presentation Agenda . 1....

Copyright © 2015 by Link and Motivation Group All rights reserved.

Link and Motivation Inc. Consolidated Financial Information for the Nine Months Ended September 30, 2015


Progress of Measures to Prevent a Recurrence of Improper Accounting

Based on the findings of the Special Investigation and Verification Committee, we are steadily implementing measures to prevent a recurrence

Improve approval and purchasing processes, strengthen

checks and balances

⇒ Began application using new restructured processes

Raise awareness of compliance

⇒ Conducted training for all Group employees in early October

⇒ Start of training with enhanced content from mid-November

Strengthen and expand internal auditing

⇒ Expand the effective scope of evaluation of internal controls


First Nine Months of 2015: Presentation Agenda

1. Announcement of Results for the Nine Months Ended

September 30, 2015

2. Topics

① Steady Expansion of Incubation Business

② Start of Wellness Management Council in December 2015

③ Promoting Women’s Empowerment at LMG: Current Status and

Policies


1 Announcement of Results for the Nine Months Ended September 30, 2015

Copyright © 2015 by Link and Motivation Group All rights reserved. 1-1

Link and Motivation Group Operating Structure

① Organizational & Personnel Consulting Business

② Event & Media Business

③ Recruiting & Temp Agency Business

④ ALT Placement Business

Business Division Consumer Division

⑤ Schools Business

⑥ Entertainment Business


Overview of Business Structure

1-2


⑤ Schools Business

② Event & Media Business


④ ALT Placement Business

⑥ Entertainment Business

Business Division

Consumer Division

Organizational/personnel consulting focused on employee motivation ⇒ Offers organizational diagnostics, education and training, HR system building, recruiting consulting, etc.

Event planning and management/media production focused on organizational communication ⇒ Offers anniversary events, recruiting events, PR/IR tools, webcasting, etc.

Recruiting/temp staffing to meet corporate HR needs ⇒ Offers recruitment of new graduates/mid-career hires, temp staffing for sales and clerical workers, etc.

Dispatch of ALTs to meet needs for teachers at educational institutions ⇒ Offers ALT dispatch/contracts for elementary/secondary schools throughout Japan

School management with the concept of “developing i-companies” ⇒ Management of career schools such as Aviva PC schools and Daiei

qualification schools; management of Motivation Academia preparatory schools

Providing entertainment with the concept of “creating quality of life” for individuals ⇒ Management of Link Tochigi Brex basketball team, Link Dining restaurant

LM Group


(¥ million) 2014 Results 2015 Results YoY Change 2015 Plan vs. Plan

Net Sales 20,594 23,539 +14.3% 24,500 -960

Gross Profit 7,388 7,715 +4.4% 8,200 -484 SG&A Expenses 6,511 7,492 +15.1% 7,200 +292

Operating Income 877 223 -74.6% 1,000 -776

Ordinary Income 843 177 -78.9% - -

Net Income 283 -14 - - -

Due to the addition of Interac to the scope of consolidation, net sales increased substantially YoY, but fell short of the plan.

Due to an increase in the cost ratio in the Business Division, gross profit also fell short of the plan. Due to increases from dealing with improper accounting, establishing integrated offices, renewing

core systems and other factors, SG&A expenses exceeded the plan and operating income and all line items below it decreased substantially YoY.

1-3

Consolidated Statements of Operations (Results/YoY Change/vs. Plan)

Copyright © 2015 by Link and Motivation Group All rights reserved. 1-4

Consolidated Statements of Operations Net Sales/Gross Profit: Factors in Difference from Plan

(¥ million)

8,000

7,000

6,000

5,000

4,000

2,000

3,000

1,000

0 2014 2015

Net Sales

Costs

Net Sales

Costs

Event & Media Business


Organizational & Personnel Consulting Business Organizational

& Personnel Consulting Business

Organizational & Personnel Consulting Business Organizational

& Personnel Consulting Business



The Organizational & Personnel Consulting Business and the Event & Media Business in the Business Division had planned on a substantial increase in sales from the opportunity presented by the change in timing of corporate recruiting activities, but because they were unable to take full advantage of the opportunity, sales fell short of the plan.

In addition, because they secured outsourcing and made advance investments in personnel based on the planned sales, costs increased substantially YoY and gross profit fell short of the plan.


(¥ million) 2014 Results

2015 Results YoY Change

Personnel Expenses 2,791 3,135 +12.3% Recruiting, Training and Welfare Expenses 307 381 +24.1% Rent 448 508 +13.4% Office and System Expenses 575 781 +35.8% Sales-related Expenses 1,361 1,405 +3.2% Transportation and Other Expenses 534 573 +7.3% Amortization of Goodwill 492 550 +11.8% Expenses for Dealing with Improper Accounting - 161 - Total SG&A Expenses 6,511 7,492 +15.1%

Consolidated Statements of Operations SG&A Expenses: Factors in Difference from Plan

Assumed an overall YoY increase due to addition of Interac Co., Ltd. (amount of impact: ¥629 million) Due to establishment of integrated offices and renewal of core systems to promote business synergy within the

Group, office and system expenses temporarily increased. (amount of impact: ¥163 million) As a result of dealing with improper accounting, recorded one-time expenses for auditor compensation, etc.

(amount of impact: ¥161 million)

1-5


(¥ million) [Gross profit in brackets]

2014 Results 2015

Results YoY Change

Business Division

Sales 15,061 18,437 +22.4%

Gross Profit [5,630] [5,681] +0.9%

Consumer Division

Sales 6,334 5,901 -6.8%

Gross Profit [2,156] [2,297] +6.5%

1-6

In the Business Division, with the contribution of the addition of Interac Co., Ltd. to the scope of consolidation, sales increased substantially YoY. However, with the impact of increased outsourcing costs in the field of recruiting, gross profit increased slightly YoY.

In the Consumer Division, due to the impact of closure or consolidation of unprofitable locations in the Schools Business, sales decreased YoY. However, by improving the profit structure, gross profit increased YoY.

Sales and Gross Profit by Segment (Results/YoY Change)



2014 Results

2015 Results

YoY Change


4,377 4,858 +11.0% [2,662] [2,332] -12.4%

② Event & Media Business 2,236 2,435 +8.9% [801] [598] -25.3%


5,460 5,636 +3.2% [1,340] [1,339] -0.0%

④ ALT Placement Business* 4,499 7,090 +57.6% [1,120] [1,836] +63.9%

1-7

(Results/YoY Change)

① The Organizational & Personnel Consulting Business captured needs for manager training and sales increased substantially, but due to an increase in outsourcing costs in the recruiting field, gross profit decreased substantially.

② The Event & Media Business captured needs for video and print media and sales increased, but due to an increase in outsourcing costs in the recruiting field, gross profit decreased substantially.

③ The Recruiting & Temp Agency Business captured corporate needs to increase personnel and sales increased, but due to high personnel procurement costs, gross profit was basically unchanged.

④ In the ALT Placement Business, sales and gross profit both grew steadily as the number of instructors increased smoothly.

* 2014 results are for April-September 2014. * ALT (Assistant Language Teacher): Foreign language teaching assistant in elementary and middle schools

Business Division: Sales and Gross Profit by Business


(¥ million) 2014 Results

2015 Results YoY Change (¥ million) 2014

Results 2015

Results YoY Change

① Organizational & Personnel Consulting Business 4,377 4,858 +11.0% ③ Recruiting & Temp

Agency Business 5,460 5,636 +3.2%

Package 1,611 1,785 +10.8% Store temp staff 4,416 4,394 -0.5%

Consulting 2,167 2,002 -7.6% Sales temp staff 145 107 -26.3%

Outsourcing* 224 660 +194.5% Office temp staff 52 440 +754.6%

Database 270 290 +7.7% Contract sales* 446 228 -48.9%

Member services 106 121 +13.7% New graduates 360 407 +13.3%

② Event & Media Business 2,236 2,435 +8.9% Mid-career 42 60 +42.7%

Event production 1,600 1,643 +2.7% ④ ALT Placement Business 4,499 7,090 +57.6%

Media production 637 793 +24.4%


① In the Organizational & Personnel Consulting Business, due to stronger promotion of manager training, package sales increased substantially. Due to capturing needs for corporate contract sales, outsourcing increased substantially YoY.

② In the Event & Media Business, despite the impact of fewer recruiting events, event production increased YoY. Due to capturing video and print media needs in the PR and IR fields, media production increased substantially YoY.

③ In the Recruiting & Temp Agency Business, new graduate and mid-career hiring, which have been areas of focus, increased substantially YoY. Office temp staff increased substantially YoY due to success in strengthening links with the Schools Business in the Consumer Division.

1-8

* Contract sales in ③ are recorded under Outsourcing in ① from the second quarter of 2015.

Business Division: Product Sales by Business



2014 Results

2015 Results

YoY Change

⑤ Schools Business 5,875 5,388 -8.3%

[1,975] [2,095] +6.1%

⑥ Entertainment Business 483 533 +10.3%

[189] [208] +9.9%

Consumer Division: Sales and Gross Profit by Business

In the Schools Business, due to the closure or consolidation of unprofitable locations (128 schools → 108 schools), sales decreased YoY. On the other hand, by improving the profit structure, gross profit increased YoY.

In the Entertainment Business, due to the increased number of games as the Link Tochigi BREX advanced to the playoffs, and increases in ticket and sponsorship income, sales increased substantially YoY and gross profit increased.

1-9



(¥ million) 2014 2015 YoY

Change Results % of total Results % of total

⑤ Schools Business 5,875 - 5,388 - -8.3% [1,975] [2,095] +6.1% PC courses 3,067 52% 2,678 50% -12.7% Civil servant courses 654 11% 694 13% +6.1% Accounting courses 522 9% 423 8% -19.0% National exam courses 370 6% 388 7% +4.9% Corporate training, etc. 668 11% 786 15% +17.7% Sales of educational

materials, etc. 317 5% 246 5% -22.4% Sales of tests, etc. 101 2% 63 1% -37.6% Preparatory schools 177 3% 111 2% -37.6%

⑥ Entertainment Business 483 - 533 - +10.3% [189] [208] +9.9%

Consumer Division: Product Sales by Business

Amid an overall decrease in sales due to closure or consolidation of locations, sales of civil servant courses and national exam courses remained firm and increased YoY.

PC courses for new employees, offered in coordination with the Business Division, performed well and corporate training, etc. increased substantially YoY.

Preparatory schools decreased substantially YoY with the impact of the strategic withdrawal from the Kashiwa School. However, with solid performance by the Jiyugaoka School, existing schools (Shibuya School, Jiyugaoka School) increased substantially YoY.

1-10



(¥ million) Dec. 31, 2014 Sept. 30, 2015 Change

Current Assets 6,198 6,479 +281

Property and Equipment 11,687 12,207 +520

Assets Carried Over 10 7 -3

Total Assets 17,896 18,694 +798 Current Liabilities 7,785 9,494 +1,709

Long-term Liabilities 3,276 2,756 -520

Net Assets 6,834 6,443 -391

Total Liabilities and Net Assets 17,896 18,694 +798

Consolidated Balance Sheets (Results/Change)

Property and equipment increased substantially due to the establishment of integrated offices and renewal of core systems.

Current liabilities increased substantially due to short-term borrowings for funds to pay taxes. Long-term liabilities decreased steadily due to the regular repayment of long-term debt. Net assets decreased due to payment of dividends.

1-11


Scheduled Third-Quarter Dividend for 2015 ・ A dividend of 110 yen is scheduled to be paid on Friday, December 25, as originally planned.

First Quarter (Actual)

Second Quarter (Actual)

Third Quarter (Scheduled)

Fourth Quarter (Scheduled)

Dividend per unit 110 yen 110 yen 110 yen 110 yen

Dividend Policy for 2015 ・Dividends paid quarterly

1-12

Third Quarter of 2015 Dividends


(¥ million) 2014 Results Before Revision After Revision

2015 Forecast YoY Change 2015

Forecast YoY Change

Net Sales 28,873 33,000 +14.3% 31,800 +10.1%

Operating Income 1,751 1,930 +10.2% 1,050 -40.0%

Ordinary Income 1,665 1,860 +11.7% 1,000 -39.9%

Net Income 950 1,060 +11.6% 680 -28.4%

1-13

Revision of Forecast

Although results for the fourth quarter are expected to be basically in line with the plan, each level of the forecast has been revised downward to reflect the results of the first nine months.


Topics 2 ① Steady Expansion of Incubation Business

② Start of Wellness Management Council in December 2015

③ Promoting Women’s Empowerment at LMG: Current

Status and Policies


Completed investment in Blue Wall Japan Inc. We will continue to invest in growing venture companies, with a targeted investment rate of 3% to 10%,

and provide support in the areas of organization and personnel.

① RichMedia Co., Ltd.

⑥ FiNC inc.

③ AgentGate, Inc. ④ FROM SCRATCH Co., Ltd.

② Uchinavi, Ltd.

⑤ Akatsuki Inc.

⑦ Neo Career Co., Ltd.

⑨ schoo Inc.

⑩ raksul, Inc.

⑪ renoveru co., ltd.

⑬ PLAN-B co., Ltd.

⑭ Innovation Inc.

New Investment November 4

⑧ Leading Mark, Inc.

⑫ LiB, Inc.

⑮ Blue Wall Japan Inc.

Business: Peer-to-peer lending for corporations

Topic 1: Steady Expansion of Incubation Business

2-1

http://www.neo-career.co.jp/


Broadening wellness management, which promotes the physical and mental health of employees, throughout society

with the following 20 inaugural members, including Link and Motivation

2-2

Topic 2: Start of Wellness Management Council in December 2015

All companies will share their measures and data on wellness management. In addition to being used within the companies, data collected will also be disseminated in

Japan and overseas to broaden the circle of activities.

Observers: Kanagawa Prefecture and Yokosuka City


Based on the act to promote women’s role in the workplace passed in August 2015, Link and Motivation’s policies on promoting the empowerment of women and their

current status are as follows.

① Ratio of females among

new hires

② Gender difference in

length of service

③ Ratio of female managers

５４.１％ 40 women

34 men

-2.3 years Women: 6.5 years

Men: 8.9 years

15.1% Female managers: 25

All managers: 166

Current Status

Maintain 50% level

2 years or less

20-30%

Policy

Topic 3: Promoting Women’s Empowerment at LMG:

2-3

Current Status and Policies


Motivation Factors Company foundation

Principles/ Strategies

Business content

Job content

Organizational climate

Personal appeal

Facility environment

System/ Compensation

Direct supervisor

Workplace conditions

Image of Analysis Results

Magellan Motivation Survey Note: LMG product

Expectation level (toward company) Satisfaction level (toward company)

Viewed on 2 axes


2-4

High Expectation

High

Satisfaction

Low

Low



Motivation Index (MI) ○ Motivation index for an organization decided based

on the results of the motivation survey ○ Comprehensively calculated from factors including

expectations toward the company, satisfaction with the company and their degree of consistency

④ Gender difference in MI

values

-1.2 Women: 79.6 (A Rank)

Men: 80.8 (A Rank)

Current Status

Maintain the same level

Policy

In addition to the indicators required by society, we add our original indicator to further promote the empowerment of women.


2-5



Link and Motivation Inc. Consolidated Financial Information for the Nine Months Ended September 30, 2015

Link and Motivation Inc. · 2019-08-09 · First Nine Months of 2015: Presentation Agenda . 1....

Documents

Transcript of Link and Motivation Inc. · 2019-08-09 · First Nine Months of 2015: Presentation Agenda . 1....