Q2 2024 Recruit Holdings Co Ltd Earnings Call
Unknown Executive: 2024 Earnings Conference Call.
Yeah.
Unknown Executive: This call is a simultaneous translation of the original call in Japanese and translation is provided for the convenience of investors only.
Speaker Change: This call is the simultaneous translation of the original call in Japanese and translation is provided for the convenience of investors only.
Mizuho Shen: I'm Mizuho from IRNPR 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.
Miserable from IR and PR and joining me today is doing chart eight senior Vice President corporate strategy and Investor Relations of recruit Holdings Q2 financial results presentation video and transcripts were uploaded to the IR website at 330 P. M. Today today, we will start with opening remarks, followed by Q&A session now I would have called in.
Unknown Executive: Today we will start with Jun's opening remarks followed by Q&A session.
Junichi Arai: Now I pass the call to Jun. Please go ahead.
Jim: Jim. Please go ahead.
Jim: Yeah.
Junichi Arai: Hello everyone. I have a cold. I am sorry if my voice is a bit inaudible to you.
Jim: Hello, everyone.
I have a cold I am sorry, if my voice is a bit inaudible to you.
Junichi Arai: 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. In 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.
Jim: Before I take your questions.
Jim: As I do every quarter.
Jim: I would like to make a few additions to the presentation, we disclosed at 330.
Jim: Yeah.
Jim: In the presentation with regards to the result for the second quarter and the first half of FY 2024.
Jim: I explained in HR technology.
U S revenue exceeded.
Jim: Our initial expectations.
Jim: Yeah.
Jim: Which was due to the fact that despite the continuing trend of a decrease in the number of job postings.
Jim: The rate of increase in revenue per paid job bad exceeded.
Jim: The rate of decrease in the number of paid job ads.
Jim: Thanks to a combination of small scale tests and innovations.
Junichi Arai: Any Japan The transition to Indeed Plus is progressing, although it is slightly slower than our initial expectations.
Jim: And in Japan.
Jim: The transition to indeed plus is progressing.
Though it is slightly slower than our initial expectations.
Junichi Arai: 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.
Jim: Regarding.
Jim: The outlook for the second half of FY 2024.
Jim: We are not changing our view that the number of job openings in the U S will hit the bottom.
Jim: After decreasing for another 18 or 24 months.
Jim: That said in May.
Jim: And we assume that the number of paid job postings will continue to decline until the end of the current fiscal year.
Junichi Arai: Regarding HR solutions in Japan... It has been decided. to discontinue. The PPP paper post advertising model by the end of FY 2024, with the exception of the new graduate recruitment platform, and it has been confirmed that HR Solutions will integrate it into Indeed Plus.
Jim: Regarding HR solutions in Japan.
Jim: It has been decided.
Jim: To discontinue.
Jim: The P P P.
Paper post advertising model by the end of FY 2024, with the exception of the new graduate recruitment.
Jim: Platform and it has been confirmed the HR solutions are integrated into India plus.
Junichi Arai: The outlook for marketing solutions and soft 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.
Jim: The outlook for marketing solutions and saw solutions has not changed significantly.
Jim: And regarding staffing.
Jim: It is assumed that the growth in revenue in Japan.
Jim: Will be offset by is that in Europe U S and Australia.
Jim: There is no improvement in the business environment.
Junichi Arai: 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 FY 2024 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.
Jim: We have prepared the outlook for each segment.
Jim: Assuming exchange rate of 142 yen per U S dollar.
Jim: And 157 yen per euro.
And based on this.
Jim: We have prepared our outlook for the second half of FY 2024 on a consolidated basis and we have disclosed today the revised full year guidance, which is the sum of the results for the first half and the outlook for the second half.
Jim: For those of you who already have looked at this information.
Jim: You will notice that the lower limits of the ranges have been significantly raised compared to the guidance ranges we disclosed in may.
Junichi Arai: 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 through 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.
Jim: Thirdly.
Jim: So share buybacks currently underway.
Jim: Yeah.
Jim: [noise] as informed previously.
Jim: Has been progressing much faster than our initial expectations with the two tough net three transactions executed so far.
Jim: Approximately.
Jim: 80% of the maximum total purchase price of 600 billion yen has been utilized over four months through the end of October.
Jim: 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.
Junichi Arai: Now, as of September 30th, 2024, net cash and deposits were 756.6 billion yen. which is a decrease of approximately 378.7 billion yen from 1,135,400,000,000 yen as of March 31st, 2024.
Jim: Now as of September 30th between 24, net cash and deposits were $756 6 billion yen.
Jim: Which is a decrease of approximately 378.7 billion yen from one Chilean $135 4 billion as of March 31 2024.
Junichi Arai: 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.
Jim: And fourthly regarding the transfer of businesses between disclosed segments.
Jim: This will be the first chain.
Jim: Change since the significant change made to the disclosed segments into 2017.
Jim: From next fiscal years, the HR solutions business and matching and solutions will be transferred to HR technology and as a result matching solutions will consist of the current marketing solutions and <unk> solutions.
Jim: We understand this may cause a significant inconvenience to capital market participants.
Jim: But we would greatly appreciate it if you could consider revising your financial model and valuation model.
Jim: According to this change.
Jim: Okay.
Jim: With this in your mind.
Junichi Arai: I would like to open up the floor now for questions. Thank you for your attention.
Jim: I would like to open up the floor now for questions. Thank you for your attention.
Unknown Executive: 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.
Speaker Change: Thank you.
We will now take your questions. If you have a question please click on whom raise and button. Please on mute before asking your question.
Speaker Change: We will accept up to two questions at a time.
Eiji Maeda: First Nomura Securities, Ono-san. Thank you very much. This is Mono from Nomura. I also have some cold. I have two questions.
Speaker Change: Thanks, Chris.
Speaker Change: <unk> Nomura Securities.
Speaker Change: Okay.
Speaker Change: Thank you very much.
Oh from Nomura.
Speaker Change: I also have some cold I have two questions.
Eiji Maeda: First... So Indeed US business, the impact from the increase. So the job posting, how is the immigration important? Do you have any past data to see how much impact it will have on Indeed? Job Posting, and others.
Speaker Change: First.
Speaker Change: So indeed.
Speaker Change: U S business the impact from the increase.
Speaker Change: So the.
Speaker Change: The job posting.
How is the integration.
Speaker Change: Important do you have any past data to see how and how much impact it will have on indeed.
Speaker Change:
Speaker Change: Job posting and others.
Speaker Change: Yeah.
Eiji Maeda: Please ask the second question, too. Also on Indeed U.S. so you've the establishment of new plans or the bring back jobs the increase in the production sites has been pursued to increase the employment in the U.S. so subsidy and the tax reduction and customs. Have 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 an indeed business?
Speaker Change: Please ask the second question too.
Speaker Change: So while in the U S.
Speaker Change: So you've.
Speaker Change: Establishment of new plans or the bring bad jobs the increase in the production sites.
Has been pursued to increase the employment in the U S. So subsidy and the tax reduction and customs.
Speaker Change: These past factors than an inch.
Speaker Change: Kris has been pushed up the revenue are indeed, so the increase in immigration and bring back job sector.
Speaker Change: How much.
Speaker Change: Impact.
Speaker Change: Do these two factors have on indeed.
Speaker Change: Business.
Junichi Arai: Thank you very much. So, I think the question is based on the result of the U.S. presidential election. As you know... Our business. We have a two-sided business model. So first is the job seeker side of the story. Supplier side and the demand side. How We Match Efficiently is the key in our Indeed and U.S. 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 want to hire people. will be a factor. And in some cases, there is a mismatch or a balance.
Speaker Change: Thank you very much.
Speaker Change: Yeah.
Speaker Change: So I think the question is based on the result of the U S presidential election.
Speaker Change: As you know.
Speaker Change: Our business.
Speaker Change: Yeah.
Speaker Change: We have a two sided business model.
Speaker Change: So first is the job seeker side of the story.
Speaker Change: Supplier side and the demand side.
Speaker Change: How we match.
Speaker Change: Efficiently.
Speaker Change: Is the key in our India and U S business.
Yeah.
Speaker Change: The key to increasing the revenue in our business.
So.
Speaker Change: When large number of people look for jobs.
Speaker Change: Or an employee unemployment.
Employment promotion.
Speaker Change: Increase of the employers who wants to hire people.
Speaker Change: It will be a factor and in some cases, there isn't that it mismatch.
Speaker Change: Or a balance.
Junichi Arai: 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, to not 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, 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.
Speaker Change: And that impacts our pricing.
Speaker Change: From the business structure of India, plus its pay for performance.
Speaker Change: And for pricing.
Speaker Change: Hum.
Speaker Change: It goes down depending on supply and demand. So that is the type of business model we have.
Speaker Change: So of course that has an impact.
But.
Speaker Change: It's hard to quantify cannot say what percentage and we do not disclose that.
Speaker Change: Of course, if supply goes down and demand goes up the mismatch increases like post COVID-19.
Speaker Change: Then pricing goes up volume goes up.
Speaker Change: So pricing volume.
Chris: Chris is.
Chris: Revenue.
And vice versa.
Chris: Okay.
Chris: So I think youre asking about higher demand.
And.
Chris: Our supply will differ depending on that and the speed is another factor.
Junichi Arai: So if, 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 the 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 that 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.
Chris: So if one qualified employers want to hire how quickly can they take action.
Chris: It is important.
Chris: So job.
Chris: Opening will decline, but will hate about them and we will rise up again at one point in the future.
Chris: Yeah.
Chris: And the curve of the increase cannot be predicted easily it will not be a surge like post COVID-19.
Chris: Unless.
Chris: It's an extraordinary circumstances, it will be a mild increase.
Chris: So it's not that it that will be the only factor that impacts our revenue.
Chris: But.
Chris: Employers, who want good talents will give us assignment for advertisement to us early on so supply and demand side both sides fluctuate.
Junichi Arai: So the number of job seekers will be one factor, and the demand. So it's 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.
Chris: So the number of job seekers will be one factor and the demand.
Chris: It was also a factor.
Chris: But when that will be what percentage will that be.
Chris:
Chris: How much this will activate the company's activity, we have parameters, we look at but it's difficult to say what percentage.
Chris: And explained very clearly at this point, but as I mentioned earlier.
Chris: Yes.
Chris: The market volume will decline so.
Chris: We are preparing for the next peak out and so our stance remains unchanged.
Junichi Arai: So thank you. I hope this answers your question.
Chris: So thank you I hope this answers your question. Thank you very much at icon.
Eiji Maeda: Thank you very much, Arai-san. Thank you.
Speaker Change: Thank you.
Akitomo Kishimoto: Next is SMBC Niko Security's Maeda-san. Please go ahead. This is Maeda of Nikko. I have two questions also. First of all... In the presentation earlier... You refer to the situation of indeed revenue in the U.S. on the second page of FAQ, you introduced some examples but what kind of functions are they, what kind of factors are there? If there were any significant factors that affected the situation, I would like to know.
Speaker Change: Next is SMB Nikko Securities microphone. Please go ahead.
Speaker Change: This is made up of nickel.
Speaker Change: I have two questions also.
Speaker Change: First of all.
Speaker Change: In the presentation earlier.
Speaker Change: Hugh.
Hugh: Refer to the situation of indeed revenue in the U S.
The growth of revenue per opportunity and growth of a job posting or alluded to so can you. Please.
Hugh: <unk> mentioned how.
Hugh: How much they increased or decreased.
Hugh: And you also alluded to Ah trials on the second page of <unk>, Inc.
Hugh: Traduce some.
Hugh: Examples.
But what kind of functions are they what kind of factors are there.
Hugh: If there were any significant factors.
Hugh: That affected the situation I would like to know and secondly, this is a more straightforward question about the decrease of.
Akitomo Kishimoto: And secondly, this is a more straightforward question about the decrease of HR costs. Employee Benefits Decrease and Housing Allowance. Can you quantify the impact? Especially in HR tech, can you please explain what was the specific impact? Thank you. Percentage. of Union Price Growth and Decrease. I apologize, at least today. We decided not to disclose that information. I hope you will understand.
Hugh: <unk> cost.
Speaker Change: Employee benefits decrease.
Speaker Change: And a housing allowance.
Speaker Change: Can you quantify the impact, especially in HR Tech.
Speaker Change: Can you. Please explain what was the specific impact thank you.
Thank you.
Speaker Change: Percentage.
Speaker Change: Of our unit price growth are in decrease.
Speaker Change: I apologize.
Speaker Change: <unk> today.
Yeah.
Speaker Change: We decided not to disclose that information.
Speaker Change: I Hope you will understand.
Junichi Arai: And regarding functions, I talked about three functions, Urgent Hiring, Label, Candidate Targeting, Matched Candidates. So this is a, for example, a label to show that this is an urgent hiring or Employers who are doing paid job ads. We can pre-screen conditions and available candidates. and we will utilize the employer's budget only when there is a good match. Also, on Indeed platform, job seekers sign up with their CVs and profiles, and based on such personal information, for Employers. We use our machine learning to identify suitable candidates. So without having to wait for applications, employers can directly reach out to job seekers who would satisfy their needs.
Speaker Change: And recording functions on you talked about three functions urgent hiring label.
Speaker Change: Candidate targeting matched candidate.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: So this is a for example, a label to show that this is an urgent hiring.
Speaker Change: Or.
Speaker Change: Employers, who are doing paid job ads.
Speaker Change: Oh, we can pre screen conditions and available candidates.
Speaker Change: And we will utilize the employers budget only when there is a good match.
Speaker Change: Also on indeed platform Jobseekers signed up with their C V's and profiles.
Speaker Change: And based on such personal information.
Speaker Change: For employers.
Speaker Change: We use our machine learning to identify suitable candidates.
Speaker Change: So without having to wait for applications employers can directly reach out to job seekers, who would satisfy their needs.
Junichi Arai: And if they really... meet the demand of the employer. Compared to when we don't use that function, we will be able to improve the benefit for clients and we will be able to charge a higher price, which will result in a higher unit price. And we aim to develop a better environment so that... We can introduce better job postings to job seekers so that they can find better jobs. We have been making these efforts. a little by little to develop a better environment and I think that is going to lead to higher unit price. Of course, we try and clients may not be satisfied or it may create some disadvantage that could happen but even if we fail or even if we didn't perform as expected, we can also learn from such experience and we can repeat that process so hopefully, we would like to continue to increase the unit price.
Speaker Change: And if they really.
Speaker Change: Meet the demand of the employer.
Speaker Change: Compared to when we don't use that function, we will be able to improve the the benefit for our clients and that we would be able to charge a higher price of which will result in higher unit price.
Speaker Change: And we aim to develop a better environment.
Speaker Change: So that.
We can introduce better job.
Speaker Change: Postings to job seekers, so that they can find better jobs.
We have been making these efforts.
Speaker Change: A little by little to develop a better environment and I think that it's going to lead to higher unit price of course, we try and.
Clients may not be satisfied or it may create some disadvantage that could happen.
But even if we fail or even if we didn't perform as expected. We can also learn from such experience and we can repeat that process. So hopefully.
Speaker Change: We would like to continue to increase the unit price.
Junichi Arai: as well as the volume. When that is achieved, we can make better contribution to the revenue growth. That is our idea. in evolving our business day by day.
Speaker Change: As well as the volume.
Speaker Change: When that is achieved we can make better contribution to the revenue growth that is our idea.
Speaker Change: In evolving our business a day by day.
Junichi Arai: I apologize, I cannot quantify the impact, but that is the idea, as we explained previously.
I apologize I cannot quantify the impact but that is the idea as we explained previously.
Junichi Arai: And in terms of the labor cost decrease, in the Q1 announcement, I think I explained that Due to the reduction of head count Their payroll has been discontinued as of the end of May. So in Q1, there is a one month worth of impact. In the second quarter, there is a full impact. That is the impact we are experiencing. So on a quarterly basis... We are not giving cost reduction for each segment. For the first half, we are providing such information, but we don't provide that information on a quarterly basis. So I hope you can refer to the number for the first half.
Speaker Change: And in terms of the labor costs decrease.
Speaker Change: In the Q1 announcement I think.
Speaker Change: I explained that.
Speaker Change: Due to the reduction of head count.
Speaker Change: Payroll their payroll has.
Speaker Change: It has been discontinued as of the end of May.
Speaker Change: So in Q1, there is a one month's worth of impact in the second quarter. There is a full impact.
Speaker Change: Yeah.
That is the impacts we are experiencing so on a quarterly basis.
Speaker Change: We are not given cost production for each segment.
Speaker Change: For.
Speaker Change: The first half hour, we are providing such information, but we don't provide that information on a quarterly basis.
Speaker Change: So I hope you can refer to the number for the first half that's it. Thank you.
Unknown Executive: That's it. Thank you.
Speaker Change: Thank you.
Yoshitaka Nagao: Next, B of A, Security, Nagao-san, please.
Speaker Change: Thank you next Bofa Securities Nagao San please.
Yoshitaka Nagao: Yes, thank you very much.
nagle: Yes. Thank you very much nagle of Bofa Securities speaking two questions first.
Yoshitaka Nagao: Nagao of VOA Security speaking. Two questions. First... is indeed second half Marjin, the way you think of Marjin. So in the FAQ, it's written... that in the second half The U.S., so the biggest volume for the U.S. dollar base, 4.5% plus minus revenue is expected, but the HLCD beta in the first half, second half is down from the first half. So, revenue and profitability, or the profit balance between first and second half, how should I look at that? Thank you very much. That's my first question. Second question is, I have many, but I think one key question is around 600 billion yen share repurchase and 80% around 500 billion has already been used.
nagle: Is indeed second half margin the way you think of margin.
Speaker Change: So in the F.
Speaker Change: Thank you.
Speaker Change: Britain.
Speaker Change: That in the second half.
Speaker Change: In U S. So the biggest volume of course.
Speaker Change: They are U S dollar basis, four 5% plus minus.
Speaker Change: Revenue is expected but.
Speaker Change: The adjusted EBITDA in the first half.
Speaker Change: Second half is down from the first half.
Speaker Change: So revenue and profitability or the profit balance between first and second half how should I look at that thank you very much. That's my first question.
Speaker Change: Second question is I have many but I think one key question is.
Around 600 billion yen share repurchase.
And 80%.
Speaker Change: <unk> 500 billion has already been used.
Junichi Arai: This is much faster than your original schedule. So do you plan on additional share repurchase, and not just that, in your balance with your growth investment? Once again, if you could share with us your capital allocation policy. Thank you. Thank you very much. So which one should I go first? Let me start with the second question. So, toss the ditch. Three. So, we started as a one-year program. But we were not. There was a supply that we did not... anticipate in the beginning and therefore the usage was faster than we thought. As I mentioned earlier...
Speaker Change: This is much faster than you originally original schedule.
Speaker Change: So do you plan on additional.
Speaker Change: Share repurchase and not just that.
In your balance.
With your growth investment.
Speaker Change: Once again, if you could share with us your capital allocation policy. Thank you.
Speaker Change: Thank you very much.
Speaker Change: So, which one should I go first let.
Speaker Change: Let me start with the second question.
Speaker Change: So tough niche three.
Speaker Change: So we started as a one year program.
Speaker Change: But we were not.
Speaker Change: There was.
Speaker Change: Supply that we did not.
Speaker Change: Dissipate.
Speaker Change: In the beginning and therefore, the usage was faster than we thought.
Speaker Change: As I mentioned earlier.
Junichi Arai: This two years... Cash Inequivalent. We want to use the two years to adjust our cash inequivalence. And the way to do that is share repurchase. and or acquire good business if we have some options outside. and use the cash for our future business and for our shareholders and reduce the cash and cash equivalents to a certain level. And we will continue that effort. So this time, the program may end earlier than we thought, but we will think of what we will do, at which size, we will decide, discuss and decide going forward. But for the two years, two years is the period to adjust our cash and cash equivalents.
Speaker Change: This two years.
Speaker Change: Cash and equivalents we.
Speaker Change: We want to use the two years to adjust our cash and equivalents.
Speaker Change: And the way to do that is share repurchase.
Speaker Change: And or acquire good business, if we have some options outside.
Speaker Change: And use the cash for our future business and for our shareholders and reduce our cash and cash equivalents to a certain level.
Speaker Change: And we will continue that effort.
Speaker Change: Yeah.
So this time the program may and earlier than we thought.
Speaker Change: But we will think of.
Speaker Change: What we will do at what size, we will decide I discussed and decided going forward.
Speaker Change: But for the two years two years is superior to adjust our cash and cash equivalents. So next fiscal year, we will continue.
Junichi Arai: So next fiscal year, we will continue studying this plan.
Speaker Change: Studying.
Speaker Change: This plan.
Speaker Change: Yeah.
Junichi Arai: and the margin in the second half. As we mentioned earlier. Indeed, HR technology. The cost is not entirely necessary for our revenue at this moment. We are conducting various tests and various developments. and launch them in the market. to improve the promising ones and make them bigger. So we are doing out this cycle. And the other large cost spending is... Our advertisement and promotion, if we have good opportunities. if it leads to higher revenue. We may use cost expense in upfront fashion. and Headcount. We do not plan to increase the headcount radically at this moment, so this will be flat.
Speaker Change: And the margin in the second half.
Speaker Change: As we mentioned earlier.
Speaker Change: Indeed.
Speaker Change: HR technology.
Speaker Change: The cost is not entirely necessary for our revenue at this moment, we are conducting various tests and various developments.
Speaker Change: And launch them in the market.
Speaker Change: To improve the promising ones and make them bigger. So we are doing all of this cycle.
Speaker Change: And the other large cost spending is.
Speaker Change: Our advertisement and promotion if we have good opportunities.
Speaker Change: If it leads to higher revenue.
Speaker Change: We may use cost expense in the upfront fashion.
Speaker Change: Okay.
Speaker Change: Yeah.
And head count, we do not plan to increase head count to radically at this moment. So this will be flat.
Junichi Arai: So, if revenue remains flat and margin drops by 1%, it means we are using... Marketing Costs for Our Customers and Users That's what I would like you to think like, as we said. If there is a demand, if there is need... We will try to invest as efficiently as possible. So if there is a light for recovery, we will be willing to invest, but we are not there yet. So this time, we revised the full-year forecast, and the Martian... was not a significant revision from May, that is where we stand. Thank you very much.
Speaker Change: So.
Speaker Change: If remain revenue remains flat and margin.
Drops by 1%.
Speaker Change: It means we are using.
Speaker Change: Marketing costs for our customers and users.
Speaker Change: That's what I would like you to think like as we said.
Speaker Change: Is it demand if their needs.
Speaker Change: We will try to invest as efficiently as possible.
Speaker Change: So if there is a like for recovery we will be.
Speaker Change: Be willing to invest but we are not there yet.
Speaker Change: So this time.
Speaker Change: We revised our full year forecast and the margin.
Speaker Change: Okay.
Oh, it was not a significant revision from may.
Speaker Change: That is where we stand.
Speaker Change: Thank you very much and just one follow up question.
Unknown Executive: Just one follow-up question.
Junichi Arai: HR tech, marketing cost, second half, SBU is now being realigned and Japan, Japan domestic business is in the scope. This year, the segment is still different this year. So that is that, this is this.
Speaker Change: HR Tech marketing cost.
Speaker Change: Second half SBU.
Speaker Change: <unk> is now being realigned.
Speaker Change: And in Japan, Japan domestic business is in the scope.
Speaker Change: This year the segment is still different this year.
Speaker Change: So that is that this is this <unk>.
Junichi Arai: Next year onward, it will be unified, integrated. So from Efficiency Purpose, we may revisit, we may. But for this fiscal year... It will be separate. The cost will be incurred separately.
Speaker Change: Next year onward, it will be unified integrated.
So from efficiency purpose, we may revisit we may.
Speaker Change: But for this fiscal year.
Speaker Change: It will be separate.
The cost will be incurred separately.
Unknown Executive: Thank you very much.
Speaker Change: You very much.
Speaker Change: Yeah.
Unknown Executive: Thank you.
Speaker Change: Thank you.
Eiji Maeda: Nomura Security, Sonosan, please go ahead. Thank you.
Speaker Change: Nomura Securities <unk> San Please go ahead.
Speaker Change: Thank you.
Eiji Maeda: about Indeed Apply. in 2024.
Speaker Change: About indeed apply.
Speaker Change: In 2024.
Eiji Maeda: The Big Four ETF. You talked about wanting to integrate with it, so if there is any progress... that you can share with us, I would appreciate it.
Speaker Change: The big four E T S.
Speaker Change: You talked about wanting to integrate with it. So if there is any progress.
Speaker Change: That you can share with us I would appreciate it.
Eiji Maeda: The other thing is about Indeed Plus. There is more outside media.
Speaker Change: The other thing.
Is about indeed plus.
Speaker Change: There is more outside media.
Eiji Maeda: going forward, what kind of growth is anticipated? What is the roadmap?
Speaker Change: Going forward well.
Speaker Change: What kind of.
Speaker Change: Growth is anticipated what is the roadmap is there anything that you've learned from the current.
Eiji Maeda: Is there anything that you've learned from the current experience? Thank you.
Experience.
Speaker Change: <unk>.
Speaker Change: Thank you.
Junichi Arai: about ATF. on a large scale. With them, we want to increase the volume of business, we want them to use us more efficiently, and we want to offer higher added value. by linking and synchronizing.
Speaker Change: About a T S.
Speaker Change: A large scale.
Speaker Change: Business clients.
Speaker Change: With them, we want to increase the volume of business.
Speaker Change: We want them to users more efficiently and we want to offer higher added value.
Speaker Change: By linking and synchronizing.
Junichi Arai: That is essential. It's not only the Big Four, but also with other... Clients, we have been implementing various measures.
Speaker Change: That is essential.
It's not only the big four.
Speaker Change: But also with other clients.
Speaker Change: Clients are we have been implementing various measures.
Junichi Arai: It may be possible technologically, however. We still have to gain agreement from clients, so we have to make it technologically possible and we have to gain support from the clients. The number of clients connected through ATS is not disclosed, but that number is continuing to grow steadily. And that needs to come with higher volume for us to grow further, so this is what we have been working on.
Speaker Change: It may be possible technologically however.
Speaker Change: We eat.
Speaker Change: We.
Speaker Change: Still have to gain agreement from clients. So we have to make it technologically possible and we have to gain support from the client.
Speaker Change: The number of clients connect it through a T. S has not disclosed but that number is continuing to grow steadily.
Speaker Change: And that needs to occur.
Speaker Change: <unk> higher volume for us to grow further so this is what we have been working on.
Junichi Arai: about Indeed Plus. I believe you are referring to... Non-recruit media job boards, when you say outside media.
Speaker Change: About indeed plus.
I believe you're referring to.
Non recurred media jumped bors when you say outside media.
Speaker Change: Yeah.
Junichi Arai: I think it was in January when we launched the service. I think we explained that this is what we welcome. and we would want to encourage those media to join. But of course, there is a revenue split and other terms and conditions that we need them to agree on. So, it is not something we are pushing for, but... If they are interested, they can join us.
I think it was in January when we launched the service I think we explained that this is what we welcome.
Speaker Change: And we would want to encourage those media to join.
But of course, there is a revenue split and other terms and conditions.
Speaker Change: We need them to agree on.
Speaker Change: Okay.
Speaker Change: So it is not something we are pushing for it but.
Speaker Change: Is.
Speaker Change: They are interested they can join us.
Junichi Arai: But this is not what we were assuming for when we started the service.
Speaker Change: But this is not what we were assuming four when we started the service within recruit group, we have Japan media jumped board.
Junichi Arai: Within Recruit Group, we have Japan, media, job board, business that we want to... integrate, and this will make it even stronger. We use Recruit Job Board. to shift from PPP to PPC.
Speaker Change: Business that we want to.
Speaker Change: Integrate.
Speaker Change: And this will make it.
Speaker Change: Even stronger we use recruit job board.
Speaker Change: To shift from PPP to PPC.
Junichi Arai: That is the strategy for Indeed. We are not requiring a certain number of outside media to join us to achieve our goal. We are not depending on such outside factors, but rather we are focusing on designing better operation internally. Again. If outside media is interested, we welcome them. and we want them to join us, but that is not the only factor. We want to make ourselves stronger and more powerful.
Speaker Change: That is the strategy for Ah Indeed.
Speaker Change: Plus so.
Speaker Change: We are not re.
Speaker Change: Firing.
Speaker Change: A certain number of outside media to join us to achieve our goal we are not depending on such outside factors, but rather we are focusing on.
Speaker Change: Designing better operation internally.
Speaker Change: Again.
If outside media is interested we welcome them.
Speaker Change: And we want them to join us, but that is not the only factor.
Speaker Change: We want to make ourselves stronger and more powerful that is what we are determined to.
Junichi Arai: That is what we are determined to focus on so that we can evolve the service even further. That was very clear. Thank you.
Speaker Change: Focus on some of that weekend.
Speaker Change: Evolves the service even further.
Speaker Change: That was very clear thank you.
Unknown Executive: Thank you very much.
Speaker Change: Thank you very much next as the.
Speaker Change: Security is whole system. Please.
Speaker Change: Yeah.
Yoshitaka Nagao: Hosui from FBI Security. Thank you very much. I have one question. So it's about Indie Japan. Last time, Existing Indeed and Indeed Plus, you said it is difficult to divide, but... of the overall revenue. of the UniPrize Which one is contributing to revenue, and how far along are you in transferring from PPP to PPC? That's my first question.
Speaker Change: Hopefully from SDI Securities. Thank you very much I have one question.
Speaker Change: So it's about India, Japan.
Speaker Change: Last time existing indeed, and indeed, plus you said it is difficult to Dubai, but.
Speaker Change: Of the overall revenue.
Speaker Change: The unit price.
Speaker Change: Which one is right.
Contributing to revenue and.
Speaker Change: How far along are you in transferring from PPP to PTC.
Speaker Change: That's my first question.
Yoshitaka Nagao: Next, Indeed Plus Transfer Speed. You said the seed is rather mild. What are the factors? And what are the hurdles? Thank you very much. Thank you.
Speaker Change: Next.
Speaker Change: Indeed, plus transfer speed.
Speaker Change: He said the feed is rather mild.
What are the factors.
Speaker Change: And what are the hurdles.
Speaker Change: Thank you very much.
Speaker Change: Thank you. So your two questions were on indeed was in Japan.
Junichi Arai: So your two questions were on Indy Plus in Japan. So last time or the one before last. We said that it's difficult to say which of the two factors are the bigger factor. And this has become deeper because... job board that we originally did. as Recruit is now being switched or transferred to Indeed Plus. and in Recruits. We count on a growth basis, but indeed plus... will be a net accounting. So, one hundred will not be a hundred. It's difficult to numerically explain. So it cannot be explained in a clear-cut fashion. And this is to your second question, too, but...
Yeah.
Speaker Change: Yes.
Speaker Change: So last time or the.
Speaker Change: One before last.
Speaker Change: Oh, he said that it's difficult to say, which of those two factors are the bigger factor.
Speaker Change: And this is become deeper because.
Speaker Change: Job Board that we originally did.
Speaker Change: As we recruit.
Speaker Change: Is now being switched were transferred to indeed plus.
Speaker Change: And in recruit.
Speaker Change: Yeah.
Speaker Change: We count on a gross basis, but indeed plus.
Speaker Change: We'll be a net.
Speaker Change: Accounting.
So.
Speaker Change: One 100 will not be 100.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: It's difficult to numerically explain.
So it cannot be explained in a clear cut fashion.
Yeah.
Speaker Change: Yes.
Speaker Change: And this is to your second question too but.
Junichi Arai: The original job board business was PVP. and clients like it. And we received revenue from that, but now it will be from BBC. We need to explain the benefits. Directly. And if it's through agency... The agencies will explain to the clients. to win their understanding. So we will use various routes, channels. to realize this shift in this 100, 20, 40, 60, 80, and eventually 100. So what we mean by miles is the agency part. They're promoting, indeed, Fluff. Agencies need to get used to it or be convincing to the clients. or when their clients like PBB, they need to convince and persuade the clients.
Speaker Change: The original job board business was PDP.
Speaker Change: Okay.
Speaker Change: And the clients like it.
Speaker Change: And we.
Speaker Change: We received revenue from that but now will be from BBC.
Speaker Change: So we need to explain the benefits.
Speaker Change: Directly.
Speaker Change: And if it's through agency.
Speaker Change: The agencies will explain to the clients.
Speaker Change: To win their understanding.
Speaker Change: So we will use various routes channels.
Speaker Change: To realize this shift and this 102.
Speaker Change: <unk> 2040, 60, 80, and eventually 100.
Speaker Change: So.
Speaker Change: We mean by mild is the agency part.
Speaker Change: They're promoting indeed plus.
Speaker Change: Agencies need to get used to it or be convincing to the clients.
Speaker Change: Or when their clients like P. B b, they need to convince and persuade clients.
Junichi Arai: It's not just about the logic or efficiency or just pure theory.
Speaker Change: Just about logic or efficiency or just pure theory.
Junichi Arai: Client's Mindset Change Though, we thought this transition will be rather quick, but... And by the end of March... PPP business will be discontinued, but... the transition speed is mild, and there are other factors too. So the progress is slightly delayed. So the HR tech revenue... Indeed Plus Related Revenue The second quarter, third quarter revenue is slightly lower than what we thought in May. And so, matching in solutions, HR solutions, revenue is not declining as much as we thought. We will come to the same level, the originally planned level by the end of March, but as of second and third quarter, the speed is still mild.
Speaker Change: Clients mindset change.
Speaker Change: So we thought this transition will be rather quick but.
Speaker Change: And by the end of March.
Speaker Change: DVD business will be discontinued.
Speaker Change: But.
Speaker Change: The transition speed.
Speaker Change: Is mild and there are other factors too.
Speaker Change: So the progress is slightly delayed.
Speaker Change: Yeah.
So the HR Tech revenue.
Speaker Change: Indeed related revenue.
Speaker Change: Yeah.
Speaker Change: The second quarter third quarter revenue is slightly lower than what you saw in may and so matching and solutions HR solutions.
Speaker Change: Revenue is not declining as.
Speaker Change: As much as we thought.
Speaker Change: We will come to the same level.
Speaker Change: Well regionally planned level by the end of March but as of second and third quarter. The feed is still mild.
Junichi Arai: And so this side revenue is lower, and that side revenue is not declining as much. At the end of third quarter...
Speaker Change: And so this slide revenue is lower and that side revenue is not declining as much.
At the end of third quarter.
Junichi Arai: Q3, we will update you, but this is where we stand. Thank you.
Speaker Change: Q3, we will update you.
But this is where we stand.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Thank you.
Akitomo Kishimoto: Mizuho Security's Kishimoto-san, please go ahead. This is Kishimoto of Mizuho. Thank you for this opportunity. I have two questions. Firstly, about Indeed US. about the current headcount situation. Well, you have revisited headcount this year and top line improvement is expected, so in accordance with the top line growth, are you planning to increase the number of headcounts once again? Or is that not necessary if there is a certain level of revenue growth and as a result, do you anticipate margin to grow? So what is the expectation for the personnel expenses?
Speaker Change: Mizuho Securities Kitchen Motor found please go ahead.
Speaker Change: This is kitchen motto of Mizuho. Thank you for this opportunity I have two questions.
Speaker Change: Firstly about indeed, the U S a.
Speaker Change: About the current head count situation that will you have revisit the head count this year and the top line.
Speaker Change: Improvement is expected so.
Speaker Change: In accordance with the topline growth are you planning to increase the number of head counts once again.
Speaker Change: Or is that not necessary. If there is a certain level of revenue growth and as a result, do you anticipate margin to grow.
Speaker Change: So what is the expectation for the personnel expenses that is my first question and my second question is about the spot work. Tom works came up you announced that you are planning to release. This unfold this fall.
Akitomo Kishimoto: That is my first question.
Akitomo Kishimoto: And my second question is about the spot work, town work schema. You announced that you are planning to release this in fall, this fall. Well, it is still in fall, so I think we should wait for further announcement. But I was expecting some news to come out by now. Recently... I have seen some difficulties related to spot work. So, are you kind of waiting for the right timing, or is it going to be released sometime after without any issue? Is there anything that you can share with us at the moment?
Speaker Change: It is still in fall so.
We should wait for further announcements, but I was expecting some needs to come out by now.
Speaker Change: Recently.
Speaker Change: Oh I have seen some difficulties related to spot work.
So are you kind of waiting for the right timing or is it going to be released sometime after without any issue is there anything that you can share with us at the moment. Thank you.
Junichi Arai: Thank you. Top line is growing. That's what you said, but it is not a rapid significant growth. And in this presentation, I didn't use the word recovery or improvement, so we are not thinking of this as recovery. Of course, we need to have volume recovery. In order to be able to regard the situation as recovering, so once again. As Idekoba-san said in May. In 18 to 24 months, volume will decline, and we are right in the middle of that decline, or we're at the beginning or in the middle of this decline. That is... Our view of our business and recording headcounts.
Speaker Change: Thank you.
Speaker Change: Top line is growing.
Speaker Change: That's what you said, but it is not a rapid significant growth.
Speaker Change: And in this presentation I didn't use the word recovery or.
Speaker Change: Improvements.
Speaker Change: Improvements so we are not thinking of.
Speaker Change: This is a recovery of course, we need to have volume recovery.
Speaker Change: In order to be able to regard the situation is recovering so once again.
Speaker Change: As our EDA cobblestone Sallie Mae.
Speaker Change: In 18 to 24 months of volume will decline and we're right in the middle of that decline or where are the.
Speaker Change: Beginning more in the middle of this decline.
Speaker Change: That is.
Speaker Change: Our view.
Speaker Change: <unk> of our business and recording head counts.
Junichi Arai: In May, we made that decision or in March, April and May, we made that decision and executed for the time being in this environment. with the reduced head count, we will continue to operate and that is as planned. and there is no necessity or meaning to increase the head count immediately. So as I responded to Nagao-san earlier.
Speaker Change: In May we made.
Speaker Change: That decision or in March April and May we made sound decision and executed for the time being in this environment.
Speaker Change: With the reduced head count we will continue to.
Speaker Change: To operate and that is as planned.
Speaker Change: And there is no necessity or meaning to increase the head count immediately.
Speaker Change: So as I responded to knock on the phone earlier.
Junichi Arai: Regarding personal expenses... In the simple model, it will remain flat. in such markets. How efficiently are we going to spend personnel or marketing expenses? I think that is the question. So there was a headcount reduction recently, and it's not that we are in need of more headcount immediately.
Speaker Change: Regarding personnel expenses.
Speaker Change: Yeah.
Speaker Change: In the simple model it will remain flat.
Speaker Change: In such market.
Speaker Change: How efficiently are we going to spend personnel or marketing expenses I think that is the question.
Speaker Change: So there was a head count reduction recently and it is not that we are in need of more head count immediately.
Junichi Arai: And the second question was regarding the spot work business in Japan. As Kishimoto-san said... I did mention that Given the recent social circumstances, we have been carefully discussing our plan, and as I mentioned today... There's a transfer of business between segments. So we have to be mindful. about that as well. So there are two factors. Segment Transfer and Social Circumstances. It is not that we are in a hurry, but rather, we want to take care of ourselves. Time to prepare.
Speaker Change: And the second question was regarding the spot work business in Japan and came up with them.
Speaker Change: Said.
Speaker Change: I did mention that.
Speaker Change: Given leave the recent social circumstances, we have been carefully discussing our plan and as I mentioned today.
There is a transfer of business between segments.
Speaker Change: So we have to.
Speaker Change: Be mindful.
Speaker Change: About that as well so there are two factors.
Speaker Change: Segment transfer and social circumstances.
Speaker Change: It is not that we are in a hurry, but rather we want to take.
Speaker Change: Time.
Speaker Change: To prepare we initially announced this will be released in fold, but.
Junichi Arai: We initially announced this will be released in fall, but at least for now, it is not going to be released in this fall. That is the current status. Did I answer your question?
Speaker Change: At least for now it is not going to be released this fall that is the current status.
Speaker Change: Did I answer your questions. Thank you.
Akitomo Kishimoto: Thank you.
Yoshitaka Nagao: Thank you very much. B of A Securities, Nagao-san, please. This is Nagao from B of A Securities.
Speaker Change: Thank you very much Bofa Securities Nagao San please.
Speaker Change: This is not all from Bofa securities. Thank you very much. Thank you for giving me the second round, so one strategic side.
Yoshitaka Nagao: Thank you very much. Thank you for giving me the second round. So, one strategic side... So in MS, matching and solutions, there's the traditional job board type, which is now shifting to HR. So, in the traditional business, there's the recruit agent, middle, the placement, or recruit executive agent, the high class, headhunting business. These businesses will also shift to HR tech.
Speaker Change: So in M S matching and solutions there is the traditional job board type, which is now shifting to HR.
Speaker Change: H R.
Speaker Change: Yes.
Speaker Change: So in the traditional business there as you recruit agent middle.
Speaker Change: The placement or recruit executive Asia, and the high class Hedgehog.
Speaker Change: <unk> business.
Speaker Change: These businesses will also shift to HR tech.
Yoshitaka Nagao: Could you elaborate on the progress there? And my second question is the peer of the marketing and solutions growth strategy. So in each segment, performance, guidance, lower side, the floor is now risen.
Speaker Change: Could you elaborate on the progress there.
Speaker Change: And my second question.
Speaker Change: Is the peer.
Speaker Change: Net.
Speaker Change: Marketing and solutions growth strategy.
So in each segment performance guidance lower side the floor is now risen.
Junichi Arai: So, but marketing solution is not improving that much, so the original forecast has not changed much, so my question is, the growth strategy of marketing solutions, once again, it's becoming invisible, their business tools and new initiatives exist, but they are not clearly reflected in the financial performance, so how are you sorting this out? Thank you very much. Thank you very much for the question. So, to your first question... So the Japanese... HR business, will become under HR technology in April. So the placement This will come under HR tech. This is... is run only in Japan.
Speaker Change: So, but marketing solution is not improving that much. So the original forecast has not changed much so.
My question is the growth strategy of marketing solutions once again, it's becoming invisible air business tools.
Speaker Change: And new initiatives exist, but they are not clearly reflected in the financial performance. So how are you sorting. This out thank you very much.
Speaker Change: Thank you very much for the question.
Speaker Change: So to your first question.
Speaker Change: So the.
Speaker Change: Japan's.
Speaker Change: Yeah.
H R.
Speaker Change: Business will become under HR technology in April.
Speaker Change: So the placement.
Speaker Change: This will come under HR Tech.
Speaker Change: Okay.
Speaker Change: This business.
Speaker Change: Is run only in Japan.
Junichi Arai: So this will come under Japan's revenue. So in the presentation, it says that on April 1st next year. This leads into your second question, but matching and solutions. will be marketing solutions and saws. Business Segment from April next year. from next fiscal year. Yes, this is... will be a stand-alone segment. So, the current status... and the future growth strategy. and the strategy to improve the business efficiency can hopefully be explained more clearly. We are preparing this internally. So HR business. And also, which consists of HR technology and staffing, simplified hiring block of business and business work smarter, help businesses work smarter.
Speaker Change: So this will come under Japan's revenue.
Yeah.
So in the presentation. It says that on April 1st next year.
Speaker Change: Yeah.
Speaker Change: This leads into your second question, but matching and solutions.
Speaker Change: We'll be marketing solutions in Sars.
Speaker Change: Okay.
Speaker Change: Business segment from April next year.
Speaker Change: From next fiscal year.
Speaker Change: This business.
Speaker Change: We'll be a standalone segment.
Speaker Change: Okay.
Speaker Change: So the current status.
And the future growth strategy.
Speaker Change: And the strategy to improve the business efficiency can hopefully be explained more clearly we are in turn.
Speaker Change: Preparing this internally.
Speaker Change: So HR business.
Speaker Change: And also which consists of HR technology and staffing simplified hiring block of business and business work smarter health businesses work smarter.
Junichi Arai: This is Marketing Solutions and SaaS. making matching and solutions business. So, we showed you a pie chart in the past. Right half will do this, and left half will do housing and real estate.
Speaker Change: This is marketing solutions and sauce.
Speaker Change: Making matching and solutions business.
And so what we showed you a pie chart in the past right half.
Speaker Change: We'll do this and left half will do housing and real estate.
Junichi Arai: In May, we hope to be able to explain more clearly, and we're discussing that internally. I hope you'd give us a little more time. Nagao-san, I understand your preference, so, please. Look forward to it. Thank you very much.
Speaker Change: In May we hope to be able to.
Speaker Change: Explain more clearly and we're discussing that internally I hope you could give us a little more time.
Speaker Change: So I understand your preference so please.
Speaker Change: Look forward to it.
Speaker Change: Thank you very much so SBU realignment my first question a follow up on that.
Junichi Arai: So, FDU realignment, my first question, a follow up on that. So, agent... Referral, this will be HR Tech. Business. But recruit agent, recruit executive agent, these are labor-intensive, traditional type of referral business. So if you can multiply tech to that, what can be leveraged?
Speaker Change: So agent.
Speaker Change: Referral this will be a short term.
Speaker Change: Business, but recruit agent so crude executive agent. These are labor intensive traditional type of referral business.
Speaker Change: So if you can multiple I check to that what can be leveraged is this a big realignment or are you trying to give me a change the business model as well if you could elaborate on the strategy. Please.
Junichi Arai: Is this a big realignment or are you trying to change the business model as well? If you could elaborate on the strategy, please. A while ago... I think I said this. in Japan. by Ringing Indeed Engine. The matching efficiency can be enhanced. And we're seeing improvement. I think we've been saying this for two years now. And of course, the candidates. We have our salespeople in charge, and our business clients have our salespeople taken care of. and the back office. So we've been doing this for two, three years. So the front end is handled by our people, but the back end, there is a machine used already.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: A while ago.
Speaker Change: I think I said this.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Some of the placement.
Speaker Change: In Japan.
But bringing indeed engine.
Speaker Change: The matching.
Speaker Change: Efficiency can be enhanced.
Speaker Change: And we're seeing improvement I think we've been saying this for two years now.
Speaker Change: Of course the candidates.
Speaker Change: We have our salespeople in charge and our business clients.
Have our salespeople taken care of.
Speaker Change: Yeah.
And the back office. So we've been doing this for two or three years.
So the front end is handled by our people, but the back end.
Speaker Change: Machine used already.
Speaker Change: Hi.
Junichi Arai: How we move this forward. is the challenge we need to address. And furthermore... Practice HR Tech's Simplify Hiring Strategy. How can we... shift from agency, ad model to transaction model, from ad to transaction. This business in Japan can be used as a basis. to do more business globally. We're thinking of that possibility. So displacement. is now working well. how we can develop this further in Japan and globalize this. Going forward. is something we are still thinking.
Speaker Change: How we moved.
Move this forward.
Is the challenge we need to address.
Speaker Change: And Furthermore.
Speaker Change: Yes.
HR text simplify hiring strategy.
Speaker Change: How can we <unk>.
Speaker Change: Shifting from agency.
Speaker Change: AD model to transaction model from AD transaction.
Speaker Change: This business in Japan can be used as a basis.
Speaker Change: To do more business globally.
Speaker Change: We're thinking of that possibility.
Speaker Change: This placement.
Speaker Change: Is now working well.
How we can develop this further in Japan.
Speaker Change: And.
Speaker Change: Globalize this.
Going forward.
Speaker Change: Is something we are still thinking.
Junichi Arai: So, we don't have any concrete plans, we are just starting now. but this Japan's placement business that we've been cultivating over the years. can leverage, harness the power of technology and may become global, so we're discussing that internally.
Speaker Change: So we don't have any concrete plans we are just starting now.
Speaker Change: But this Japan's placement business that we've been cultivating over the years.
Speaker Change: Can leverage harness the power of technology and May become global so we are discussing that internally.
Junichi Arai: Thank you very much for your insightful comment.
Speaker Change: Thank you very much for your insightful comment.
Unknown Executive: Thank you.
Speaker Change: Thank you.
Eiji Maeda: Nomura Security, the owner's home, please. About the two new subsidiaries, I would like to ask a question. First is about the name. Both have, indeed, Both starts with Indeed. So what is the aim and about the the chain of command? Using Indy technology and integrating the placement business as you explained earlier. I understand that, but... Will you continue to have the same person as the head of business in the new subsidiary or are you going to reshuffle the structure as well? What is going to be the reporting line? Is there anything that you can share with us about what you are discussing internally?
Speaker Change: Some of our Securities <unk> San please.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: About the two new subsidiaries.
Speaker Change: To ask a question.
Speaker Change: First is about the name.
Speaker Change: Both.
Speaker Change: Have indeed.
Speaker Change: Both starts was indeed, so what is the aim and about the the chain of command.
Speaker Change: Using the technology and integrating the placement business as he explained earlier.
Speaker Change: I understand that but.
Speaker Change: Will you continue to have the same person up ahead of business and the new subsidiary or are you going to reshuffle, the the structure as well.
Speaker Change: What is going to be the reporting line is there anything that you can share with us about what you are discussing internally. Thank you.
Junichi Arai: Thank you. Well, that is what I also would like to know, but it is not decided yet. When we have a big reshuffling or reorganization in our company, In most cases, when we make announcements in February for the third quarter, We make a disclosure for the TSC about the change. So... At this point in time, I believe that is going to be the timing to share the details. Well, it's not really about which is which, but we just want to make something better. So if we already have something good, we will... Use it to full extent.
Speaker Change: Well that is what I also would like to know, but it is not decided yet.
Speaker Change: When we have a big a reshuffling or reorganization in our company.
Speaker Change: In most cases, when we make announcement in February for the third quarter.
Speaker Change: We make a disclosure for the TFC them about the change so.
Speaker Change: At this point in time, I believe that is going to be the timing to share the details.
Speaker Change: Well, it's not really about which is which but we just wanted to make something better. So if we already have something good we will.
Speaker Change: Use it to full extent.
Speaker Change: Yeah.
Junichi Arai: It's not really about using something from Recruit and something else from Indeed. It's not. really about which organization is going to take the initiative. That will be very... Narrow Viewed We are trying to be united. And I think we now have a foundation to develop something better by integrating our capabilities. So we will just focus on who is capable of doing what, rather than paying attention to the current structure.
Speaker Change: It's not really about using something from Rickard and something else for me indeed.
Speaker Change: It's not.
Speaker Change: Really about which.
The organization is going to take the initiative.
That will be very.
Speaker Change: Narrow viewed.
Speaker Change: We are.
Trying to be a United.
Speaker Change: And I think we now have a foundation to develop something better by integrating our capabilities. So we will just focus on who is capable of doing what.
Speaker Change: Rather than paying.
Speaker Change: Paying attention to the current structure.
Junichi Arai: Thank you. And also about the naming of these two subsidiaries. Well, we thought about including Indeed and Recruit, both. The name starts with R, and when we try to make an acronym, it doesn't look good. That's just one example of our thought process, do you get me? No, not really. If the name starts with an R, well, if it is Recruit Indeed Partners, it is R.I.P., it is not really good. As an acronym, we have discussed with native English speakers. So it was a hard work, actually, to come up with a good name. So there is no...
Speaker Change: And also about the naming of Liza two subsidiaries.
Speaker Change: Well, we thought about including indeed and recruit both.
Speaker Change: If.
Speaker Change: The name starts with our it and when we try to make.
Megan: Megan acronym it doesn't look good.
Megan: Just one example of our thought process do you get me.
Speaker Change: No not really.
Speaker Change: It is the name starts with an R. R.
Speaker Change: Well if it is recur indeed partners.
Speaker Change: It is our IP.
Speaker Change: It is not really good of an acronym we have discussed with native English speakers.
Speaker Change: So it was a hard work actually to come up with a good name. So there is no no.
Junichi Arai: Hidden Meaning We also thought about integrating into HR tech. So, we could give it a brand new name, but rather than creating a new logo for the brand new name, we thought it is better to build on what we already have. That is the background of why we decided on these names. So, there aren't really, um... Well, we wouldn't give specific meanings or thoughts, but rather we paid attention to if the acronym is good, and we excluded the bad acronyms. Understood.
Budd: Hidden meaning Budd.
Budd: But.
We also thought about integrating into HR tech.
Budd: So we.
Budd: We could give it.
Budd: Our brand new name, but rather than creating a new logo for the brand new name. We thought it is better to build on what we already have.
Budd: That is the background of why we decided on these names.
Budd: So there aren't really.
Budd: Specific meaningful thoughts, but rather we paid attention to is the.
Budd: Acronym is good and we excluded about acronyms.
Junichi Arai: Thank you.
Speaker Change: Understood. Thank you.
Junichi Arai: I have a specific follow-up question.
Speaker Change: Have a specific follow up question.
Junichi Arai: MNDEV about advertising and promotion expenses. In the second quarter, how much did you use? If it is difficult to quantify the amount, can you please share with us the year-on-year change? I believe I responded to Maeda-san's question that we do disclose that number for the first half, but we don't disclose this on a quarterly basis. So I hope you can refer to that information understood. Thank you. Thank you very much.
Speaker Change: And us.
Speaker Change: About advertising and promotion expenses in the second quarter, how much did you use.
Speaker Change: If it is difficult to quantify the amount of I E. Can you please share with us the year on year change.
Speaker Change: I believe.
Speaker Change: I responded to.
Speaker Change: Madison's question that.
Speaker Change: That we do disclose that number for the first half, but we don't disclose this on a quarterly basis.
Speaker Change: So I hope you can refer to that information understood. Thank you.
Speaker Change: Okay.
Speaker Change: Thank you very much.
Junichi Arai: We answered all the questions we received. And we were able to share with you some back of the scene story too. As Arai-san said, once we decide on something, we will disclose and continue close communications with you.
Speaker Change: We answered all the questions we received.
Speaker Change: And we were able to share with us.
Speaker Change: The same story too.
Speaker Change: And said once we decide on something we will disclose and continue close communications with you. Thank you very much. So we will bring this session to a close today. Thank you very much for joining us today.
Unknown Executive: Thank you very much, so we will bring this session to a close today. Thank you very much for joining us today. Thank you, as always, and I ask you for your continuous support.
Speaker Change: Thank you as always and I ask you for your continuous support.