Financial Results for 2Q FY2023
Members Co., Ltd. (TSE 2130)
October 31, 2022

Company Profile

Representative Director and President Tadashi Kenmochi

Members is the internet business partner that aims to create a spiritually rich society through “MEMBERSHIP” by
supporting digital business with digital creators.

Corporate nameMembers Co., Ltd.

Date of establishment June 26, 1995
MissionCreate a spiritually rich society through “MEMBERSHIP”

Locations

Headquarters (Tokyo), Web Garden Sendai, Web Garden Kitakyushu, Web Garden Kobe, Sapporo Office(VISION2030)

CapitalSales revenue

Securities code

No. of employees(consolidated)

1,016 million yen (as of September 30, 2022)

14,938 million yen (fiscal year ended March 31, 2022)〔IFRS〕

2130; Prime Section of Tokyo Stock Exchange
2,290 (as of September 30, 2022)

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Management Policy and Service Features
Members is a platform on which digital creators (DCs), who play aleading role in value creation in the rapidly expanding digital
economy, can grow and play an active role.
We develop and provide optimal digital business operation services
that meet social needs in order to realize a prosperous society.

Supporting thedevelopment of digitalproducts and services

Pursuing happiness of digital creators

Technology-specific DC
human resources provision

PGT business(PGT: Product Growth Team)A group of creators who embody the corevalues of "contribution, challenge,sincerity, and teamwork" and continue toimprove their skills to maximize theresults of client companies.

Dedicated team for digital business
operation support(EMC: Engagement Marketing Center)

EMCbusiness

An initiative to achieve
10,000 digital creators

Support tocreate social
problem-solving
business

Tech venture companies

Promoting CSV (*)
management and corporate
value marketing

Major
companies

Marketingtransformation

DC human resources
provision
comprehensive
service

Data
Scientists

UX DesignDX

Digital business support for mid-sized local companies

Digital business / Product development support
Engineering

Creating social value

SaaS

DevOpsAdvanced
technology
domainOptimizing the services provided* CSV (Creating Shared Value: A management method that simultaneously realizes economic and social value)3

2Q FY 2023 Overview
Consolidated sales revenue grew 20.9% year on year, indicating healthy performance compared with the average
growth rate of 19% in the past 3 terms. The PGT business has secured operations thanks to the success of theoperating structure that separates production and sales. In addition, the shift to a team-based operation improved
the unit price and maintained a high growth rate. Overall recruitment is going well. We have secured a sufficientnumber of DCs, including over 480 new graduates, who were assigned to projects in 2Q. On the other hand, in theEMC business, the number of clients was unchanged affecting operating rates, and consolidated operating profit
decreased year on year.

Consolidated results
Sales revenue

8,213

millionyen+20.9%
y/yOperating profit

288

millionyen

Added-value sales+48.7%-21.2%y/yy/yBusiness situation
EMC business
Sales revenue

5,392

Operation rateduring 23/2Q

78.2 ％

millionyen+12.9%y/y

Down 2.8 pointsy/y

PGT business
Sales revenue

3,245

millionyen

Ratio of sales ofservices other thanwebsite operation
during 23/2Q

33.6 ％+38.3%y/y

Up 5.0 points
compared to theend of theprevious FY

7,842

millionyen+22.9
28.0%
%
y/y

No. of companies
we offer the EMC
model

54

Same asthe end of
the previous
FY

No. of companies
we offer the PGT
model

46

+25 from
the end of
the previous
FY

2,063

+440, +27.1%
from the endof theprevious FY

No. ofconsolidated
digital creators

4

Income Statement Summary
Operating profit in the 1st half fell below the forecast, due to the decline in operation ratecaused by the shortage of new projects, the delay in assignment of new graduates, and some
unprofitable projects (completed in 2Q). There are some issues with the sales strategy andskill development of the EMC business, and we will strongly promote the integration of sales
functions of each internal company into one department and skill training in specialized fields
for employees belonging to the EMC business.
Result in the 1st half year in:[Unit：million yen]

FY3/2022

FY3/2023

1st half year in FY3/2023
y/yProgress rate
toward theforecast

Forecast

Full year in FY3/2023
Progress rate
toward theforecast

Forecast

Sales revenue

6,795

8,213

+20.9%

8,280

99.2%

18,20045.1%

Added value sales

6,381

7,842

+22.9%――――

Gross profit

1,890

2,265

+19.9%――――(Gross profit margin)

27.8%

27.6%

―

―

―

―

―

SGA

1,539

1,981

+28.7%――――

Operating profit

366

288

-21.2%

450

64.1%

2,200

13.1%

(Operating profitmargin)

5.4%

3.5%

―

―

―

―

―

Pretax profit

364

237

-34.9%

445

53.3%

2,185

10.9%

Net profit

259

157

-39.5%

320

49.1%

1,573

10.0%

* Added value sales = Sales revenue ー Outsourcing and procurement costs ＝ Sales from in-house resources

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Execution of strategy for 25% growth
Consolidated Sales Revenue[unit: million yen]

20,00014,93815,00010,00010,6071) Expansion of digital product growth support
areas

12,087

EMC business that provides a dedicated digitalmarketing team

5,000
0

The target sales CAGR* is 25% while the CAGR inthe past 3 years was 19%. In order to fill the gap of6%, we will continue to secure the number of DCs
and expand the PGT business this term.

(Average sales growth rate of 12% over the past 5years, exceeding the market growth rate.)
20/03

21/03
EMC

22/03

PGT business that dispatches personnel for
supporting the development of digital products

PGT(Average sales growth rate of 49% over the past 5years.)

New graduates[unit: employees]

484

500
364

400
300

Hire a large number of new graduates toincrease the number of DCs by over 25%.

236

200

Enhance working environment
to keep low turnover rate.

10002) Secure the number of DCs necessary forachieving the 25% growth of sales

20/04

21/04

* CAGR: Compound Annual Growth Rate

22/04

6

Policies/measures for achieving the annual plan for FY 3/2023
Growth points in the cumulative 2nd quarter
Successful sales of thePGT business

Achieved the target operation rateof DCs, including new graduates.

Unit price increased by ateam-based operation in
PGT businessTransition from single personnel
to a teamGrowth of specializedinternal companies

Expansion into new technicalfieldsStrong hiring of newgraduates

Securing the number of DCs

・Production and sales separation
・High operation rate due toeffective sales by dispatching ateam of DCs

・Average monthly unit price: up
about 110,000 yen by team type・Average monthly unit price: up
6% year on year

Specialized companies*・Accounting for 20% of sales
・Growth rate: 80.2%・Added value sales per DC:+40,000 yen compared withmajor companies*
・484 new graduates joined inApril 2022.
・628 new graduates to be joinedin April 2023.

Measures for achieving the full-year plan
Drastic reform of the sales system
・Clients: Leading companies that aredeveloping digital organizations in house・Concentrate on the digital product growth
support domain, which has growth potential in
the large market
・Integrate the EMC and PGT businesses,
separate the production and sales divisions,and form a company-wide sales organization

Enhance the development of technicalskills and expand specializedcompanies
・Further brush up the technical skills of 2nd4th-year employees fresh out of college in 3
major companies
・Promote the establishment of companies
specializing in next-generation technologies
・Enhance the recruitment of mid-career DCs
with advanced skills*Specialized companies: Internal companies mainly in the PGT business, specializing in data, UX, EC, SaaS, DX, AI, XR, DevOps, etc. There are a total of 12 specialized companies as of September 30,2022.
Major companies: 3 internal companies that are EMC company (EMC business), Members Career company and Members Edge Company (PGT business)

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Consolidated Earnings and Dividend Forecasts for the Term Ending March 2023

We implement the active measures for completing the full-year plan and aim toachieve the full-year forecast without revising it.
Full-year results for
FY 2022 (IFRS)Forecast for
FY2023(IFRS)

y/y increase/decrease rate

Full yeary/y increase/decrease rate

Full year

Sales revenue (million yen)

14,93823.6%

18,20021.8%

Operating profit (million yen)

1,87648.7%

2,200

17.3%

Pretax profit (million yen)

1,896

52.0%

2,185

15.2%

Net profit (million yen)

1,404

56.7%

1,573

12.0%

Profit attributable to owners of parent

1,404

56.7%

1,573

12.0%

(million yen)

Dividend
配当

Payout Ratio

Dividends and DOE(*)[unit: yen]
（単位：円）

Commemorative dividend
記念配当
DOE (Japanese Standard)
DOE(日本基準)

7.0%

6.2%

DOE (IFRS)DOE（IFRS)

6.0%
5.0%

4.0%

4.0%
3.9%

3.0%
2.0%
1.0%

1.7%

0.0%

2.0

1.9%
2.5

2.2%
3.0

1.54.3%

4.6% 4.8%

30.0
25.0

4.2%

7.5

5.2%

6.7%

11.5

2515

14.0

1054.5

13/03 14/03 15/03 16/03 17/03 18/03 19/03 20/03 21/03 22/03 23/03※= DOE＝連結親会社所有者帰属持分配当率*DOE
Dividend on equity ratio

30

20

17.5

9.5

35

予想
Forecast

0

30.0%
25.0%
20.0%

24.5%

23.6%
19.9%

25.1%

23.5%
26.4%

19.1%

23.2%

24.9%

20.8%

20.1%

15.0%
10.0%
5.0%
0.0%

Payout Ratio(Japanese Standard)

配当性向（日本基準）

Payout Ratio(IFRS)

配当性向（IFRS）

13/03 14/03 15/03 16/03 17/03 18/03 19/03 20/03 21/03 22/03 23/03
予想Forecast

8Members group integration strategy launched
In April 2023, we will integrate the three major internal companies: EMC, Members Career, and Members
Edge, and optimize and strengthen the investment in sales and human resources development, which hasbeen conducted in respective companies.
By upgrading the models for recruiting and training new graduates, we will realize a management modelwith high added value, a high operation rate, and mid/long-term growth.
•Sales strategy “Sales & Marketing Dept.” for the entire group was established in Oct. 2022.
We will concentrate on sales with a structure in which the production and sales divisions are separated
and enhance our activities for increasing new customers and expanding existing projects.

•HR development strategy We will invest for improving the skills of young creators and enhance theshift to skills in the field with high added value other than website operation. We will recruit more midcareer DCs throughout our corporate group.
EMCCompany

Members
CareerCompany

Members
EdgeCompany

Sales

Sales

Sales

Sales

ServiceServiceServiceServiceHR
development

HRdevelopmentHRdevelopment

HR development

Members
Since
October,
2022

Since
April, 2023
(Planned)

9Balance Sheet Summary[unit: thousand yen]Previous consolidated
accounting year
（Mar. 31, 2022）

2nd quarter of the current
consolidated accounting year
（Sep. 30, 2022）

AssetsCurrent assets
Cash and cash equivalents
Trade receivables and other receivables
Inventory assets
Other current assets
Total current assets
Non-current assets
Tangible fixed assets
Rights to use as assets
Goodwill
Intangible assets
Other financial assets
Deferred tax assets
Total non-current assets
Total assets

5,226,706

3,922,129

3,075,859

2,633,368

48,63251,514

224,303

238,1128,575,502

6,845,124

237,803351,916

713,578

687,766

116,115

116,115

12,425

11,214

373,657

1,304,293

375,346

380,870

1,828,927

2,852,177

10,404,429

9,697,302

10

Balance Sheet Summary[unit: thousand yen]
Liabilities and shareholders’ equity
Liabilities
Current liabilities
Lease liabilities
Trade payables and other payables
Income taxes payable
Contract liabilities
Other current liabilities
Total current liabilities

Previous consolidated
accounting year
（Mar. 31, 2022）

2nd quarter of the current
consolidated accounting year
（Sep. 30, 2022）

400,434
1,068,471
370,219
30,2002,326,547
4,195,872

334,628
707,877
145,156
10,754
2,328,543
3,526,960

Non-current liabilities
Lease liabilities
Allowance
Total non-current liabilities
Total liabilities

197,817
115,362
313,180
4,509,052

155,569
194,455
350,024
3,876,985

Shareholders’ equity
Capital stock
Capital surplus
Treasury shares
Other components of equity
Retained earnings
Total equity attributable to owners of the parent
Total shareholders’ equity
Total liabilities and equity

963,358
281,704(8,477)52,1904,606,602
5,895,377
5,895,377
10,404,429

1,016,065
335,567(7,628)40,656
4,435,656
5,820,316
5,820,316
9,697,302

11

Sales by Segment-EMC Business• Sales revenue in EMC business (*1) : 5,392 million yen [+12.9% year on year]•The number of client companies for the EMC model: 54 [Same as the end of the previous term]• Added-value sales per client: 41,942 thousand yen [-3.0% year on year]No. of clients for the EMC model(*2)・

Sales revenue of the EMC business

Added-value sales per client company(*3)[unit: million yen][unit: No. of clients]

12,000

8,000
6,000
4,000
2,000
0

125

10,51410,000

8,524
7,549
2,366
1,842
1,847

2,565
1,976
2,196

9,206

100

3,085
2,814
5,392

2,651

50

1,493

1,785

1,850

2,129

19/03

20/03

21/03

22/03

1Q

2Q

3Q

43,464 44,004

44,039

44

44

4654

53

40,00075

36,65935,92647

45,00041,942

23/03
4Q

30,00020,00015,00010,00025

2,486

35,00025,000

54

2,905

2,648

2,270

50,00046,30775

2,270[unit: thousand yen]

5,000
0

4Q

1Q

2Q

3Q

4Q

1Q

2Q

4Q

0Goal
目標

21/03

22/03
No. of clientsfor the EMC
EMC社数
model

23/03
顧客一社あたり付加価値売上高
Added-value sales per client company*1 Sales revenue was roughly estimated with reference to the IFRS standard (the transactions between the parent company and subsidiaries were not offset).
*2 The number of clients for the service provided by a team composed of 3 or more DCs is defined and counted as the number of clients for the EMC and PGT models.
*3 Added-value sales per client company [thousand yen] = Quarterly added-value sales ÷ Quarterly average number of clients

12

Sales by Segment-PGT Business(*1)• Sales revenue in PGT business (*2) : 3,245 million yen [+38.3% year on year]•The number of client companies for the EMC model: 46 [+25 from the end of the previous term]• Added-value sales per client: 17,736 thousand yen [Recording started this term]

Sales revenue of the PGT business[unit: million yen]

6,000Added-value sales per client company(*4)

5,157[unit: No. of clients]

5,000

3,469
2,617

3,000

1,000
0

[unit: thousand yen]

20,000

100

4,000

2,000

No. of clients for the PGT model(*3)・

1,701

791

489

714

461
387

599

1,013
878

75

17,633

17,736

1,685

50

43

46

1,332

25

782

1,132

364

512

19/03

20/03

21/03

2Q

3,245

1,215

795

1Q

1,476

3Q

22/03
4Q

62

15,00010,000

21

5,000

1,559
0

23/03

4Q

1Q

2Q

4Q

0Goal
目標

22/03

23/03
No. of clientsfor the PGT
PGT社数model

Added-value sales per client company
顧客一社あたり付加価値売上高*1 In April 2021, “Digital Personnel business” was renamed “Product Growth Team (PGT) business.”*2 Sales revenue was roughly estimated with reference to the IFRS standard (the transactions between the parent company and subsidiaries were not offset).
*3 The number of clients for the service provided by a team composed of 3 or more DCs is defined and counted as the number of clients for the EMC and PGT models.
*4 Added-value sales per client company [thousand yen] = Quarterly added-value sales ÷ Quarterly average number of clients13

No. of DC and Added Value Sales per Person by Segment• The number of DCs in EMC business : 1,127 [+227 or +25.2% from the end of the PY]
Added value sales per person: 780,170 yen [-1,623 yen, down 0.2% y/y]
• The number of DCs in PGT business: 936 [+213 or +29.5% from the end of the PY]
Added value sales per person: 629,470 yen [+42,505 yen, up 7.2% y/y]No. of digital creators(*1) and monthly added value
sales per person(*2) in the EMC business[unit: person][unit: yen]

1,200

1,127

1,000826
800933921

900

900,000

876

795

678

863,679

748,083

834,324
822,731
797,423
781,793
780,170

747,524800,000
750,000

650,000
600,000200

550,000
500,000

0
2Q

1,200

1,000,000
936

1,000

3Q

21/03
DC数DC

4Q

1Q

800

2Q

3Q

22/03

4Q

1Q

2Q

23/03

月額一人あたり付加価値売上高
Monthly added value sales per person

697

600

700,000

400

1Q[unit: yen]

850,000

808,339
792,146600

950,000

950

775

1,000,000[unit: person]

No. of digital creators(*1) and monthly added
value sales per person(*2) in the PGT business

437

511

516

698707723

800,000
750,000

529

700,000
650,000

689,4310

629,479 600,000

616,695
614,740
598,801
588,902586,974
572,906
551,902551,002

1Q

900,000
850,000

733

400
200

950,000

2Q

3Q

21/03
DC数DC

4Q

1Q

2Q

3Q

22/03

4Q

550,000
1Q

2Q

500,000

23/03

月額一人あたり付加価値売上高
Monthly added value sales per person*1 No. of digital creators is the figure as of the end of Q. New graduates were assigned to tasks in Aug. in FY 3/21 and Jun. in FY 3/22, and will be assigned in Jul. in FY 3/23.
*2 Monthly added value sales per person ＝ Cumulative quarterly added value sales÷ Average number of digital creators during the term

14

Cautionary Statement

This document has been translated from a part of the Japanese original forreference purposes only. In the event of any discrepancy between this translated
document and the Japanese original, the original shall prevail.

For IR inquiries
Members Co., Ltd.
Corporate Planning Office IR Team
ir@members.co.jp

15