Recruit Holdings Co Adr

Welcome to the Recruit Holdings Q2 FY 2024 Earnings Conference Call. This call is the simultaneous translation of the original call in Japanese, and translation is provided for the convenience of investors only. I'm Mizuho from IR and PR, and joining me today is Junichi Arai, Senior Vice President, Corporate Strategy and Investor Relations of Recruit Holdings. The Q2 financial results presentation video and transcript were uploaded to the IR website at 3.30 p.m. today. Today we will start with Jun's opening remarks, followed by a Q&A session. Now I pass the call to Jun. Please go ahead. Hello, everyone. I have a cold. I am sorry if my voice is a bit inaudible to you. Before I take your questions, as I do every quarter, I would like to make a few additions to the presentation we disclosed at 3.30. the presentation with regards to the result for the second quarter and the first half of fy 2024 i explained in hr technology u.s revenue exceeded our initial expectations which was due to the fact that despite the continuing trend of a decrease in the number of joke postings the rate of increase in revenue per paid job ad exceeded the rate of decrease in the number of paid job ads, thanks to a combination of small-scale tests and innovations. And in Japan, the transition to Indeed Plus is progressing, although it is slightly slower than our initial expectations. Regarding the outlook for the second half of FY 2024, we are not changing our view that the number of job openings in the U.S. will hit the bottom after decreasing for another 18 or 24 months, that Deco said in May. and we assume that the number of paid job postings will continue to decline until the end of the current fiscal year. Regarding HR solutions in Japan, it has been decided to discontinue the PPP advertising model by the end of FY2024, with the exception of the new graduate recruitment platform, and it has been confirmed that HR Solutions will integrate it into Indeed+.

The outlook for marketing solutions and SaaS solutions has not changed significantly. And regarding staffing, it is assumed that the growth in revenue in Japan will be offset by that in Europe, US and Australia as there is no improvement in the business environment. We have prepared the outlook for each segment, assuming exchange rates of 142 yen per US dollar and 157 yen per euro. And based on this, We have prepared our outlook for the second half of FY2024 on a consolidated basis, and we have disclosed today the revised foliar guidance, which is the sum of the results for the first half and the outlook for the second half. For those of you who already have looked at this information, you will notice that the lower limits of the ranges have been significantly raised compared to the guidance ranges we disclosed in May. Thirdly, the share buybacks currently underway. As informed previously, have been progressing much faster than our initial expectations with the two TOSNET3 transactions executed so far. Approximately 80% of the maximum total purchase price of 600 billion yen has been utilized over four months since the end of October. If the remaining 20% is also utilized similarly, even though it depends on the share price, we expect that the buybacks may be completed earlier than the originally anticipated end date. Now, as of September 30, 2024, net cash and deposits were 756.6 billion yen, which is a decrease of approximately 378.7 billion yen from 1,135.4 billion yen as of March 31, 2024. And fourthly, regarding the transfer of businesses between disclosed segments, This will be the first change since the significant change made to the disclosed segments in 2017. From next fiscal year, the HR solutions business in matching solutions will be transferred to HR technology, and as a result, matching solutions will consist of the current marketing solutions and SaaS solutions. we understand this may cause a significant inconvenience to capital market participants but we would greatly appreciate it if you could consider revising your financial model and valuation model according to this change with this in your mind I would like to open up the floor now for questions. Thank you for your attention.

Thank you. We will now take your questions. If you have a question, please click on the Zoom raise hand button. Please unmute before asking your question. We will accept up to two questions at a time. First, Nomura Securities, Ono-san. Thank you very much. This is Ono from Nomura. I also have some cold. I have two questions. First, so indeed U.S. business, the impact from the increase, so the the job posting, how is the immigration important? Do you have any past data to see how much impact it will have on Indeed, on job posting and others? Please ask the second question too. Also on Indeed US. So the establishment of new plants or the bring back jobs, the increase in the production sites has been pursued to increase the employment in the US, so subsidy and the tax reduction and customs. Has these past factors been an increase that has been pushed up the revenue of Indeed? So the increase in immigration and bring back job factor, how much impact do these two factors have on Indeed business? Thank you very much. So I think the question is based on the result of the US presidential election. As you know, our business, we have a two-sided business model. So first is the job seekers side of the story. Supplier side and the demand side. How we match efficiently is the key in our Indeed and US business. The key to increasing the revenue in our business. So when large number of people look for jobs or unemployment, employment promotion, increase of the employers who wants to hire people will be a factor. And in some cases there is a mismatch or a balance and that impacts our pricing. from the business structure of Indeed Plus. It's paid for performance and for pricing. It goes down depending on supply and demand. So that is the type of business model we have. So of course that is an impact, but it's hard to quantify, cannot say what percentage, and we do not disclose that. Of course, if supply goes down and demand goes up, the mismatch increases like post-COVID. Then pricing goes up, volume goes up. So pricing volume pushes the revenue and vice versa. So I think you're asking about higher demand and our supply will differ depending on that. And the speed is another factor. So when qualified employers want to hire, how quickly can they take action is important. So job opening will decline, but we'll hit a bottom and we'll rise up again at one point in the future. And the curve of increase cannot be predicted easily. It will not be a surge like post-COVID. Unless it's an extraordinary circumstances, it will be a mild increase. So it's not that it will be the only factor that impacts our revenue. but employers who want good talents will give us assignment for advertisement to us early on so supply and demand side both sides fluctuate so the number of job seekers will be one factor and the demand is also a factor but when that will be what percentage will that be how much this will activate the company's activity. We have parameters we look at, but it's difficult to say what percentage and explain very clearly at this point. But as I mentioned earlier, the market volume will decline. So we are preparing for the next peak out. And so our stance remains unchanged. So thank you. I hope this answers your question. Thank you very much, Arai-san.