TechnoPro : FY2022 Q2 Financial Results Slide Presentation

TechnoPro Group Financial Results for the 2nd Quarter of FYE June 2022

TechnoPro Holdings, Inc. (code: 6028, TSE)

February 1, 2022

Copyright © TechnoPro Holdings, Inc. All rights reserved.

Contents

		Page
I	: FY2022 Q2 Financial Overview	2
II	: KPI Analysis [Japan]	9
	i ： Number of Engineers & Utilization Ratio	9
ii ： Unit Sales Price	13
III	： Overseas Subsidiaries Update	14
IV	： FY2022 Guidance	16
V	： Shareholder Return	18
VI	： Appendix	19
VII	： Data References	22

1. Accounting figures are rounded down to the nearest unit unless otherwise stated; KPI figures exclude "Other Businesses in Japan" and "Overseas" segments
2. "Net profit" refers to net profit attributable to owners of the parent company after deducting non-controlling interests
3. "Core operating profit" is calculated by subtracting SG&A expenses from gross profit, excluding extraordinary items (ex. government subsidy, impairment loss) recognized in other income or other expenses
4. "Operating profit before PPA asset amortization" is calculated by adding back following items to operating profit: 1) amortization of client related asset incurred by Purchase Price Allocation (PPA) at M&A transactions, 2) impairment loss, 3) changes in fair value amount and early exercise of Put Option (PO) liabilities, and 4) changes in fair value amount of Earn-Out (EO) liabilities
5. Per share amounts were calculated by using the number of shares AFTER the three-for-one stock split which was in effect on July 1, 2021

Copyright © TechnoPro Holdings, Inc. All rights reserved.	1

FY2022 Q2 Financial Overview

• FY22.6 H1 revenue was 86.35 billion yen, up 8.7% year-on-year; gross profit was 21.88 billion yen, up 18.1% year-on- year; core operating profit was 9.03 billion yen, up 8.9% year-on-year; operating profit was 11.07 billion yen, up 14.4% year-on-year; net income was 7.79 billion yen, up 17.7% year-on-year
• FY22.6 H1 gross profit was up 18.1% year-on-yearmainly due to 1) the mix of increased allocation and decreased standby of domestic engineers (+5.5%), 2) expansion of project-type services (+3.5%), and 3) new consolidation of Robosoft's earnings (+3.4%), while gross profit margin improved 2.0 pts and core operating profit increased year-on-year
• Condition for exercising Helius's Put Option could not be satisfied, therefore PO liability reversal gain of 1.86 billion yenwas recorded as other income, which increased operating profit and net profit significantly

(yen in millions, except per share amounts)

		Q2					First-Half			Full-Year
	FY21.6	FY22.6					FY21.6	FY22.6				FY21.6	FY22.6
	(Results)	(Results)		YOY		(Results)	(Results)	YOY		(Results)	(Revised	YOY
				Guidance)
Revenue	40,256	44,723		+4,467		+11.1%	79,451	86,358	+6,906		+8.7%	161,316	174,000	+12,683		+7.9%
Gross profit (GP)	9,631	12,009		+2,378		+24.7%	18,523	21,880	+3,357		+18.1%	39,727	―	―		―
GP margin
23.9%	26.9%		+2.9pt			23.3%	25.3%	+2.0 pts			24.6%
SG&A expenses	5,191	6,745		+1,554		+29.9%	10,231	12,848	+2,617		+25.6%	22,087	―	―		―
Ratio on revenue	12.9%	15.1%		+2.2pt			12.9%	14.9%	+2.0 pts			13.7%
Core operating profit	4,439	5,263		+823		+18.6%	8,291	9,032	+740		+8.9%	17,639	17,300	(339)		(1.9%)
Core operating profit	11.0%	11.8%		+0.7 pts			10.4%	10.5%	+0.0 pts			10.9%	9.9%	(1.0 pts)
margin
Other income	935	1,975		+1,039		―	1,515	2,153	+637		―	2,162	―	―		―
Other expenses	51	103		+51		―	126	107	(19)		―	340	―	―		―
Operating profit (OP)	5,323	7,135		+1,811		+34.0%	9,680	11,078	+1,397		+14.4%	19,461	19,300	(161)		(0.8%)
OP margin	13.2%	16.0%		+2.7 pts			12.2%	12.8%	+0.6 pts			12.1%	11.1%	(1.0 pts)
Profit before income taxes	5,333	7,259		+1,925		+36.1%	9,645	11,229	+1,584		+16.4%	19,472	19,300	(172)		(0.9%)
Net profit	3,651	5,086		+1,434		+39.3%	6,623	7,794	+1,170		+17.7%	13,245	13,300	+54		+0.4%
Net profit margin
9.1%	11.4%		+2.3 pts			8.3%	9.0%	+0.7 pts			8.2%	7.6%	(0.6 pts)
Earnings per share	33.90	47.22		+13.32		+39.3%	61.48	72.35	+10.87		+17.7%	122.96	123.46	+0.50		＋0.4%
Dividend per share	―	―		―		―	16.67	20.00	+3.33		+20.0%	61.67	62.00	+0.33		＋0.5%

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Operating Profit Bridge

• Increase in recruitment and other costs spent for normalization of the business was sufficiently offset by the improvement of gross profit driven by the increased number of assigned engineers and the unit sale price hike; mitigated the negative impact caused by the dissipation of the government subsidy for continuous employment from Q1 period (however, expects such negative impact to slightly increase in H2, since much a larger number of new graduates will join in April year-on-year)
• Expenses recorded to date to implement Medium-Term plan remains at 32% against annual budget, but the revised guidance is based on assumption that all budgeted expenses will be spent in H2 as more active investment is planned in the period

GuidanceFullYear- Results Half-First

(yen in millions, ratio on revenue)

(166), (0.2%)

(545), (0.6%)

11,078

9,680

9,514

12.8%

12.2%

11.0%

(1,100)

(560)

(123)

(62)

(282)

(77)

+246

+1,863

Core OP

(1,236)

+2,729

(1.3％)

(0.6％)

(0.1％)

(0.1％)

(0.3％)

(0.1％)

＋0.3％

＋2.2％

8,291

(1.4％)

＋3.2％

FY21.6

FY22.6

FY22.6

ProForma

(972), (0.6%)

19,461

18,489

(1,720), (1.0%)

19,300

12.1%

11.1%

(1,287)

10.6%

(1,678)

+2,954

(0.7％)

(962)

(313)

(332)

Core OP

(0.6％)

+1,863

(0.2％)

(859)

(1.0％)

＋1.7％

(0.2％)

(216)

+667

17,639

＋1.1％

(0.5％)

(0.1％)

＋0.4％

FY21.6

Dissipation

GP increase

Recruiting

Other cost

FY22.6

Solution

Solution

Strategic

Stock-based

Robosoft

PO liability

FY22.6

OP

of gov.

（excluding

cost

increase

Pro

talent

talent

investment compensation

reversal

OP

Results

subsidy

Robosoft）

increase

Forma

recruiting

training

gain

Guidance

Returning to Normality	Expenses to Implement	Others
Medium-Term Plan

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Reference: Quarterly Performance

Revenue	60.0																		161.3			200.0		(yen in billions)
			39.1		41.6		40.2		44.7		40.7			41.1
	40.0																	100.0		FY21.6: Results
	20.0
																							0.0		FY22.6: Results
	0.0
			FY21.6	FY22.6	FY21.6	FY22.6	FY21.6		FY22.6	FY21.6		FY22.6	FY21.6		FY22.6
					Q1	Q1	Q2	Q2	Q3		Q3	Q4		Q4	Full-Year		Full-Year
YOY				+6.2%		+11.1%			―		―				―
Progress on full-year %	24.3%		―	25.0%		―	25.2%		―	25.5%		―	100.0％		―
Ave. no. of engineers	20,795		20,439	20,287		20,673	19,986		[20,900]	20,229		[21,750]	20,324			[20,930]
Ave. utilization ratio	92.7%		95.5%	94.8%		95.7%	96.2%		[95.7%]	94.7%		[93.0%]	94.6%			[95.0%]
Ave. monthly unit sales	620		639	637		660	640		[662]	639		[648]	634			[652]
price (thousand yen)*
Working days*	56.2		55.7	58.6		58.2	56.5		[56.1]	57.7		[57.2]	229.0			[227.2]	† Figures in brackets indicate
																								forecast at the time of
Working hours per day*	8.44		8.49	8.47		8.49	8.51		[8.54]	8.47		[8.48]	8.47			[8.50]
						publication
Operating								5.3		7.1								19.4				20.0
Profit	6.0											5.1
		4.3		3.9							4.5
	4.0
																							10.0		FY21.6: Results
	2.0
																							0.0		FY22.6: Results
	0.0
				FY21.6	FY22.6	FY21.6	FY22.6	FY21.6		FY22.6	FY21.6		FY22.6	FY21.6		FY22.6
					Q1	Q1	Q2	Q2	Q3		Q3	Q4		Q4	Full-Year		Full-Year
YOY				(9.5%)		+34.0％		―		―				―
Progress on full-year %	22.4%		―	27.4%		―	26.7%		―	23.5%		―	100.0％		―
OP margin	11.1%		9.5％	13.2%		16.0％	12.8%		―	11.1%		―	12.1%			―

• Figures of two major subsidiaries in Japan (TechnoPro, Inc. & TechnoPro Construction, Inc.); Ave. monthly unit sales price includes all subsidiaries in Japan for FY22.6 (the same applies hereinafter)

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