Recruit Holdings Co Ltd Business Outlook Briefing Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Haruka Mori - JPMorgan Chase & Co, Research Division - Analyst : Yes. I have one question about your profitability, JPY 1 trillion and 20% margin target. Maybe I missed, but what is the time line that you want to achieve these targets? In your presentation, you said it's not necessarily transaction-based or monthly payment. Not one single answer is right, you want to be flexible. So as an image, media it comes from the sales promotion expense in many cases, I think. But once you reach JPY 1 trillion, this transaction base or the pay for the solution, will this continue coming -- be coming from customer sales promotion expense? What is your image into the future? Yoshihiro Kitamura - Recruit Holdings Co., Ltd. - Managing Corporate Executive Officer and Head of Media & Solution SBU Thank you for the question. So in image, we say medium term, this is 3 to 5 years. So we have a range because, as I said earlier, the expansion of matching volume at what speed is the determining factor. So recently due to COVID-19 the restriction on action was applied. And so the revenue, 90% was lost, all of a sudden, for example. And so without such events, we say 3 to 5 years' time line. And at present, it comes from sales promotion types of expenses, you said. But given the size of the business clients, advertisement or sales promotion, the companies that look at such expenses in such detail -- if the company is large, maybe yes, but it may not be broken down that precisely, that is my impression. So our ideal is if it came from sales promotion, for example, that expense is like same as paying for infrastructure, like utilities, electricity and water. If they think of those 2 as similar, then this JPY 1 trillion becomes more realistic. And adding SaaS to action platform, it becomes directly related to sales revenue. And it will be linked to revenue, and it will also improve the operational efficiency. So this will encourage the clients to continue using it. So then it no longer becomes sales promotion fee, it will more become like -- more like an infrastructure. And I think we're starting to see that. So how much increase we can see there is the key. And maybe the fee structure can be easier to use in the future. We want to come up with something that's easier to use. Next, transaction data. There's nothing I can disclose at this point. But once we reach JPY 1 trillion, our transaction fee volume will depend on the fee structure that we choose at that point in time. So it's not something that we can disclose at this point, nothing to offer at this point. Unidentified Company Representative So we have addressed all the questions we've received. And we still have a few more minutes, but maybe we can take one more question from the audience. Does anyone have any question? No? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 12, 2022 / 7:00AM, 6098.T - Recruit Holdings Co Ltd Business Outlook Briefing