February 8, 2023
For Immediate Release

Funai Soken Holdings, Inc. (TSE Prime, stock code 9757)
Takayuki Nakatani, President & CEO
Contact: Tatsuro Ono
Director, executive vice president, and head ofCorporate Management Divisional Headquarters+81-(0)6-6232-0130

Notice of New Mid-Range Business Plan (2023-2025)
Funai Soken Holdings Inc., has announced the establishment of its latest three-year plan, Mid-Range Business Plan
(2023-2025): Sustainable Growth 2025, which will cover the three-year period up ending December 2025.
1.

Plan Period
FY12/23 through FY12/25

2.

Overview
The Funai Soken Consulting Group has recently established a new group purpose—“Sustainable growth formore companies”—as an expression of its commitment to delivering strong, sustainable growth for clients anditself in an age of tumultuous change and uncertainty. To achieve that purpose, the group will endeavor to expand
its business so as to provide a full spectrum of solutions for SMEs and mid-scale companies seamlessly, andwill seek to realize the Group Vision of becoming the foremost provider of digital and comprehensive consulting
solutions for mid-scale and SME clients.

3.

Numerical Targets
FY12/22(actual)FY12/25(target)Net sales25.6 bil. yen

36.0 bil. yen

Operating income

7.1 bil. yen

10.0 bil. yen

19.2%

20+%

Return-to-shareholders ratio 62.5%

Return-to-shareholders ratio 60+%

Dividend payout ratio: 54.5%

Dividend payout ratio 55+%

Consolidated targets

ROE
Shareholder returns

See appendix for details.
- End -

2023-2025 Mid-Range Business Plan

Sustainable Growth 2025
Funai Soken Holdings Inc.
(TSE Prime: 9757)
Compiled by: Investor Relations

February 8, 2023

1

Review of Mid-Range Business Plan 2020–2022

2

Mid-Range Business Plan 2023–2025

1

Review of Mid-Range Business Plan 2020–2022(1) Performance Outcomes: Numerical Targets and Financial Strategy
Sales and income were down in 2020, but returned to double-figure growth in 2021 and 2022. Core financial strategy targets relating toconsolidated ROE and return-to-shareholders ratio were met in all three years.
Sales

Consolidated
連結ROE ROE

Operating income

Targetachieved+12.4%+11.7%+15.1%+27.4%

20%

18.2%

19.2%

15.3%

15%

Target: 15+%
10%
5%
0%

-2.8%
Targetachieved

Targetachieved

New ASBJ
standards

Old ASBJ
standards

2020

-

-

2021

22,816 25,635

25,752 25,027 28,813(Million yen)

© 2023 Funai Soken Holdings Inc.

2019

2020

2021

2022

New ASBJ
standards

-

-

6,358

7,100

Old ASBJ
standards

5,705

2022

-

Target: 25,300(Million yen)

2022

6,349

-

Target: 7,100

Targetachieved

85.0%
80%

60.1%

62.5%

60%

Target: 60+%

40%

4,982

2021

Return-to-shareholders ratio-12.7%
2019

2020

20%
0%

2020

2021

2022

2

Review of Mid-Range Business Plan 2020–2022(2) Performance Outcomes: Business Strategy
We achieved solid performance in comprehensive management consulting services for SMEs, and robust growth in digitaltransformation consulting services for SMEs and comprehensive management consulting services for mid-scale companies.

Mid-Range Business Plan (2020-2022)
Industry-specific, solutioncategory-specific support

DX support

Outcomes
Strategies

1 Comprehensive management consulting services

Major

for SMEs (SMEs × consulting services)

Strategy-oriented

Mid-scale

2 Comprehensive management consulting services
for mid-scale companies

Find and focus on unoccupied
niches in untapped markets

1

Comprehensive
management consulting
services for SMEs

2 Digital transformation
consulting for SMEs

SME

Growth support

Digitalization support

Talent development support

Improved productivity

Support for improved
corporate value
Post-Covid“new normal” support*

Solid

Solid performance in core industries: housing and real estate;
healthcare, nursing care, and welfare; and certified professional
services
Major growth in the manufacturing industry
Among support services for improved corporate value, M&A support
services saw solid growth

Comprehensive consulting firms
IT consulting firms consulting firms

2 Digital transformation consulting for SMEs
(SMEs × digital transformation support)
Large growth in DX-solution-based consulting sales
Zoho-based consulting services began in earnest

Growing

Comprehensive management consulting services

3 for mid-scale companies

Support for DX in sales

Growing(mid-scale × consulting services & digital transformation support)
Acquiring certification as an approved Tokyo Pro Market “JAdviser” provides solid footing to ramp up support for IPOs,
rebranding, restructuring to a holding company set-up
Established a team-based consulting framework for mid-scaleclients via our Account Partner Offices (expanded alliances with
regional banks)* Aimed at helping clients shape the “new normal” of the post-Covid era from a business management standpoint.
© 2023 Funai Soken Holdings Inc.

3

Review of Mid-Range Business Plan 2020–2022(3) Performance Outcomes: Financial Strategy
We implemented various initiatives to generate sustained growth through maintenance of a working environment that empowers ourdiverse workforce to make full use of their skills. We did not achieve the group workforce number target, but all other targets were met
or expanded.
1
HiringGroupwide workforce of 1,500 by 2022
(increase by approx. 300)
(1) Ongoing aggressive hiring of consultants (200–250 per year)(2) Expand hiring of digital transformation staff(3) Step up hiring of non-Japanese (esp. in Shanghai)(4) Hire more qualified professionals

2
Development

Rebuild accelerated development programs
for an expanding workforce(1) Establish a Talent Development Center: Swift development of digitaltransformation staff, maximize consultants’ employee lifetime value(2) Continued accelerated development of team leaders (target: promotion
to team leader within 5 years).

3
Empowerment

Positive cycle

Outcomes

Mid-Range Business Plan (2020-2022)

A rewarding environment for a diverse workforce(1) Establish and embed a new assessment system based on four major
career paths
1. Consultant development course; 2. Business development course;
3. Corporate professional course; 4. Management course(2) Flexible working arrangements for improved efficiency: Expand remotesupport services to reduce the need for consultants to travel© 2023 Funai Soken Holdings Inc.

Target notachieved

Expanding

Targetachieved

Targetachieved
Targetachieved
Targetachieved

Employees: 1,382 (groupwide; up 173 from 2019)

DX staff (total digital marketing consultants, DX
consultants, DX engineers as per our own
definition): 260 at end of 2022
Talent Development Center opened; consultant
training programs expanding
Instilling skills conducive to improving thebottom line
Development of DX staff through digitaltraining
In 2022: 4 years 1 month
New assessment system built and implemented
at Funai Consulting; currently at the bedding-in
stage
Remote support environment built. Hybrid style ofdelivering support services on-site and remotely
is becoming normalized4

1 Review of Mid-Range Business Plan 2020–2022
2 Mid-Range Business Plan 2023–2025

5

Our Vision for the Future
For more than 50 years, we have pushed back the boundaries of what’s possible in the consulting industry. In the
2020s, we aim to build on that history and establish the Funai Soken Consulting Group as the foremost provider ofdigital and comprehensive consulting solutions for mid-scale and SME clients.

The foremost provider ofdigital and comprehensive
consulting solutions for midscale and SME clients

Research & marketing
consulting for
distribution industry
clients

Marketing consulting forJapanese SMEs in allindustries

Focus on the
distribution industry

Further expand rangeof client industries

Focus on expanding
digital consulting solutions

1980s

2000s

2020s

1970s

1990s

2010s

Inauguration

Expand focus to include
the service industry

Expand range ofsolution categories

One-man consulting
operation by founder
Yukio Funai

Marketing consulting for
distribution and service
industry clients

Comprehensive
management consulting
services for SMEs andmid-scale businesses© 2023 Funai Soken Holdings Inc.

6

The Funai Soken Consulting Group Purpose
Companies that can achieve sustainable growth are those that can thrive and grow amid tumultuous change anduncertainty. We strive to deliver strong, sustainable growth for our clients and ourselves.

Sustainable growth for more companies
We lead the way to a better future and a more productive society
in which more companies can achieve growth in any conditions
and people can reach their full potential

This image shows our operating companies as trees growing bigger and stronger in the
sunlight of the Funai Soken Consulting Group Purpose. The Funai Way is the roots thatkeep our footing firm, and the Founder’s Spirit is the life-giving water that feeds them.
© 2023 Funai Soken Holdings Inc.

7

Mid-Range Business Plan 2023–2025: Policies
Under the new plan, our basic policy is to establish our group as the foremost provider of digital and comprehensive consulting
solutions for mid-scale and SME clients, with aggressive investment in HR and ingraining the Group Purpose identified as priorities.

Basic Policy© 2023 Funai Soken Holdings Inc.

＋ Priorities

2020-2022
Mid-Range
Business Plan

Basic Policy

2023-2025
Mid-Range
Business Plan

Digital and comprehensive
consulting solutions for mid-scale
and SME clientsIndustry-specific management
consulting

DX consulting

Solution-category-specificmanagement consulting
Comprehensive management
consulting services for mid-scalecompanies

Digital solution services

Aggressive investment in HR

Hiring, training DX staff

Improved productivity, sustained
improvements in compensation

Ingraining the Group Purpose

Better engagement

Group synergies

Comprehensive management
consulting services for SMEs andmid-scale companies

Comprehensive management
consulting services for SMEs
DX consulting for SMEs
Comprehensive management
consulting services for mid-scalecompanies
8

Business Strategy
Direct contact with a large pool of proprietors gives us a unique strength: the ability to approach immediately with upstream services. In
this way, we can maintain high profitability while expanding our business so as to provide a full spectrum of solutions for SMEs and midscale companies seamlessly.
Seamless delivery of digital and comprehensive management solutions leverage our long-standing strengths to serve mid-scale and SME clients.
||

Value generated through direct interaction
with business proprietors

Management
workshops

Monthlysupport1

Further expand
upstream consulting
services

New industries

2

Expand into mid-scaleand high-profit
business domains

Logistics

3

Expand digitalsolution services

Network of approx. 9,000
business proprietors(as of Dec. 31, 2022)

Management
seminars

Solutions

Business model based onbuilding up a“stock” of clients

High profitability

Quick development ofconsultants

Business model
development strengths© 2023 Funai Soken Holdings Inc.

New solution
categories
10-billion-yen
turnover

DX consulting

M&A

Direct recruiting

IPO
CX consulting

Cloud-based Digital × HR
solutionsconsulting

SPX※CX: Customer Experience
SPX: Sales Process Transformation

92023-2025 Targets
The target for 2025 is 36.0 billion yen in sales and 10.0 billion yen in operating income. We will endeavor to sustain high profitability
while expanding our presence in the high-growth digital solutions field.

■Net Sales and Operating Income: Performance & Targets

2025 Targets by Segment (%)
Sales CAGR

36,000

12.0％

Net sales

32,000(Million yen)

Net sales

24.7

11.4

28,50025,635

Operating income CAGR

Operatingincome

63.9

7,100

7,900

8,900

2023

2024

2025

8.5

Operatingincome
84.0

27.8%

27.7%

2022

12.1％

Operatingmargin:Operatingmargin:(Actual)10,0007.5

Consulting

Logistics

Digital solutions*Percentages exclude intra-group & whole-group transactions© 2023 Funai Soken Holdings Inc.

10

Changes in Segments
We have adjusted our segments to better suit our business strategy. We now have three segments: 1. Consulting, 2. Logistics, and 3.
Digital solutions.
New segmentation

Previous segmentation

Management consulting

Consulting

Consulting*

Contact center consulting

Logistics

Others

Logistics

Digital solutions

Logistics solutions

Digital solutions
HR solutions*Seicho Senryaku, Inc. joined the Funai Soken Consulting Group in January 2023.
© 2023 Funai Soken Holdings Inc.

11

Strategies by Segment (1)We are aiming to boost sustained growth without compromising the high profitability of our core consulting segment. We will also
invest aggressively in the high-growth digital consulting market.

Digital solutions
Avg. annual growth in sales

Aggressive investment,high growth rate

30％

Consulting
Sustained growth,high earnings ratio

20％

Logistics
10％

Improve profit margin

10％

20％
Operating margin (2025)© 2023 Funai Soken Holdings Inc.

30％
*Bubble size indicates operating income amount in 202512

15,000

Strategies by Segment (2)Consulting
Sustained growth,high earnings ratio

Operating income
CAGR

Operating margin

10.4％

36.5％

■ Further deepen industry-specific consulting for
SMEs■ Manufacturing: priority industry. Boost offerings
to clients in that sector.
■ DX consulting: Develop industry-specific cloud20,000
modules (Growth Cloud); thereby expand to
18,277
incorporate HR in addition to MA, SFA, andCRM■ Consulting for mid-scale companies
Expand consulting services designed to 15,000
propel client companies to the 10-billion-yen
turnover mark
Expand M&A consulting services
Expand IPO support services
10,000Bolster hiring, training of project
management staff■ Develop and invest effort into new growthindustries: e.g., CX consulting, rural community
6,238
revitalization, new business planning
5,000
support0

Sales Operating
income2022© 2023 Funai Soken Holdings Inc.

(Actual)Logistics
Improve profit margin

23,000 (Million yen)

20,000Operatingincome10,000
CAGR

Operating margin

18.7％

18.3％: ＋6.4％■ Boost profitability by increasing consulting as
5,000
proportion of sales
3,778■ Expand scope and reach of services: e.g.,logistics real estate, global supply chain
consulting, platforms (build data center for
448
20,000logistics information)0■ Logistics ESG consulting services with a
Sales Operating
incomefocus on the environment

4,100 (Million yen)
750
Sales Operating
income2022

15,000Digital solutions
10,000

5,000

2025

Aggressive investment,high growth rate

15,000

Sales CAGR

Operating income
CAGR

35.7％

69.0％

10,0008,400

Sales Operating
income2025(Actual)0■ Roll out sales process transformation (SPX)
services* with a focus on digital marketing■ Cloud-based solutions development■ Back-office consulting and BPO centeredon IT consulting■ Expand HR Tech business domain: e.g.,
HR solutions, recruitment process
outsourcing (RPO), SaaS education

5,000

8,900 (Million yen)

3,562
176

0

Sales Operating
income2022(Actual)

850
Sales Operating
income2025

13

Numerical Targets for 2025

Financial

GrowthProfitability

Efficiency

Sales

Operating incomeROE

36 bil. yen

10 bil. yen

20+%

25.6 bil. yen

7.1bil. yen

2022

2022

Sustainability

Growth-driving
workforce
Total headcountConsultants

1,800

1,150

1,382

862

2022

2022

Women in management
positions

25.0%
23.8%
2022

Shareholder returns
Return-toshareholders

Dividend
payout ratio

60+%

55+%

19.2%

62.5%

54.5%

2022

2022

2022

Tackling
climate change

Strongeroversight

GHG emissions*

Outside directors
continue to comprise
more than half

Cut by50%(vs. 2019)653.2 t-co2019

2

Outside directors
comprise more than half2022*Per Scope 1 and 2.

© 2023 Funai Soken Holdings Inc.

14

Investment Strategy & Cash Allocation
We will allocate cash earned in operations between activities aimed at generating future growth and appropriate shareholder returns,
thus improving shareholder value. We will also use the 2023-2025 plan period for aggressive investment in HR with a view to 2030.

Sustained business growth
Sales CAGR 12.0%

Operating cash flow
(18+ bil. yen)

Shareholder returns(10+ bil. yen)

Growth investment(4+ bil. yen)
Stable financial
foundation

Revenue© 2023 Funai Soken Holdings Inc.

Return-to-shareholders ratio 60+%
Dividend payout ratio 55+%

Aggressive investment in HR with aview to 2030
Invest in human capital
Invest in new business development
Invest in M&A
Invest in DX
Invest in offices

Expenditure

15

Financial Strategy: (1) Capital Policy
Through ongoing growth investment, increased capital efficiency ratio, and high shareholder returns, we aim to achieve sustained
improvements in corporate value. Our target is an ROE of at least 20% by 2025.
2023-2025

2014-20162017-20192020-2022

Sustain consolidated ROE at 10+%

Sustain consolidated ROE at 10+%

Sustain consolidated ROE at 15+%(%)

2025 ROE

ROE
Cost of capital

18.2

20.0

15.9
14.0

15.0

16.4

17.4

19.2

15.3

20+

%

Avg. ROE for listedcompanies in Japan(all industries)

13.8

10.9

9.4%

10.0

7.7
5.0

5.1

Capital efficiency
targets

4.3

4.4

2015

2016

8.2

8.0

2020

2021

6.8

7.0

Source: Tokyo Stock Exchange,
Summary of Earnings Digests by
Listed Companies (fiscal year
ending Mar. 2022)

5.5

0.0

2014

© 2023 Funai Soken Holdings Inc.

2017

2018

2019

2022

16

Financial Strategy: (2) Shareholder Returns Policy
We will continue to strive for a high rate of shareholder returns, such as through ongoing dividend increases and share buybacks.
2017-20192020-2022

Return-to-shareholders ratio

Return-to-shareholders ratio

Return-to-shareholders ratio

approx. 50%

50+%

60+％

8,000

6,000

Shareholder
Returns Policy
95.0

85.0

Total dividends (mil. yen)
7,000

2023-2025

2014-2016

Treasury share buy-back (mil. yen)

85.0

Return-to-shareholders ratio (%)

80.0

Dividend payout ratio (%)

75.0

64.0

60.1

62.5

5,000

54.5

50.0
45.0

3,000

739

260

399

35.0

2,000
25.0

2,233

2,370

2,717

20.0
15.0
10.0

0

5.0

2014

2015

© 2023 Funai Soken Holdings Inc.

2016

2017

2018

2019

2020

2021

60%
55%

Dividend payout ratio

55+%
+

40.0

30.0

1,000

+

65.0

55.0

54.2

60+%

70.0

60.0

4,000

Return-toshareholders ratio

90.0

Dynamic share buybacks+
Ongoing dividend
increases(Current dividend increase
streak unbroken since FY2011)

2022

17

Human Resource Strategy
We will strive to increase the number of consultants and business staff—i.e., employees with a direct bearing on sales—by an averageof 10% per year.

Key Initiatives in HR Strategy

Growth Targets by HR Category

Consultants

2025

1,150

Increase +288

(862 in 2022)

CAGR

10.1%

Increase upstream service consultants, expand profitability
Bolster mid-career recruiting in high-growth domains like DX andM&A consulting
Boost productivity by strengthening recruiting and training of project
management staff able to work with mid-scale clientsBusiness staff

2025

400

Increase+95(305 in 2022)

CAGR

9.5%

Expand system development and BPO, accelerate growth
Boost engineer numbers; bolster DX solution development*”Business staff” are those that work in consulting departments with a direct bearing on sales but
who are not consultants; roles include development engineering, product sales, new business,management workshop operations staff, etc.

© 2023 Funai Soken Holdings Inc.

HiringRamp up hiring: 1,800 headcount by end of 2025
Restrengthen hiring of recent graduates for consulting positions
Strengthen mid-career hiring in new and specialist fields
Hire people from more diverse backgrounds for management roles

Training & career development
Training & career development for consultants and business staff
Expand training programs to accelerate development of new and younger
employees
Improve productivity through acquisition of digital skills by consultants
Expand investment in professional development to boost staff skills and develop
the pool of management candidates

Retention
Improve employee value proposition to boost retention of talent
Boost retention through sustained improvements in compensation
Boost communication by relocating Tokyo office and consolidating into asingle floor
Increase employee engagement by sharing the Group Purpose

18

ESG Initiatives for a Priority Objective: Ingraining the Group Purpose
With the importance of ESG in mind, we will further ramp up our ESG initiatives.
Major Challenges and Corresponding SDGs

E

Tackling climatechangeAscertain the whole group’s environmental footprint, disclose information
about initiatives aimed at ongoing improvements
Environmental education, compliance with conservation laws and regulations

Effective use of finite
resources

Offer environmentally considerate solutions, advice, and support as part ofindustry-specific services in the consulting and logistics segments

PeopleAddressing social
responsibility,
education

Provide career opportunities for a diverse range of people
Maintain a rewarding workplace that motivates employees
Maintain a workplace that welcomes diversity, where people can pursue
careers regardless of gender, ability/disability, etc.
Offer flexible, diverse working styles that enable people to pursue work in a
way that suits their life plans
Proactive development of women for management roles

Communities

Invigorating regional
communities

Consulting services as a vehicle for community development
Great Company Awards identify and spread the word about companies
showing sustainable growth nationwide

Governance

Promoting fairness
and justiceEnhance corporate governanceImprove the effectiveness of the Board of Directors
A stronger information security framework

Environment

S

G

Major Initiatives© 2023 Funai Soken Holdings Inc.

19

The Funai Soken Consulting Group Purpose

Sustainable growth
for more companies
We lead the way to a better future and a more productive society
in which more companies can achieve growth in any conditions
and people can reach their full potential

Statement Regarding Use of These Materials
Plans, outlooks, strategies and other information contained herein are based onreasonable judgments made in accordance with information currently available.
Actual results may differ greatly from these forecasts for a number of factors.
All possible care has been exercised in preparing these materials, but the Funai
Soken Consulting Group assumes no responsibility for losses or other damages
resulting from errors concerning any information.
These materials are not intended to encourage any kind of investment.
Investment decisions are the sole responsibility of the individual investor.

Please direct enquiries regarding IR to:
Funai Soken Holdings Inc. Corporate Communication Office
TEL: +81-(0)6-6232-2010
Mail: ir@funaisoken.co.jp URL: https://hd.funaisoken.co.jp