COMPANY RESEARCH AND ANALYSIS REPORTTANABE CONSULTING GROUP CO., LTD.
9644
Tokyo Stock Exchange Prime Market

29-Mar.-2024
FISCO Ltd. Analyst

Yuzuru SatoFISCO Ltd.
https://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Overview of the FY3/24 1H results ..............................................................................................................

02

2. FY3/24 results outlook.................................................................................................................................

02

3. Medium-term business plan.. .......................................................................................................................

02■Business overview---------------------------------------------------------------------------------------------------------------------------------------------------- 03
1. Company overview......................................................................................................................................

03

2. Earnings growth model.......................... ......................................................................................................

07■Result trends------------------------------------------------------------------------------------------------------------------------------------------------------------------ 08
1. FY3/24 1H results overview................... ......................................................................................................

08

2. Net sales breakdown by management consulting domain. ..........................................................................

11

3. Financial condition and management indicators. .........................................................................................

13■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 14
1. FY3/24 results outlook.................................................................................................................................

14

2. Overview of the medium-term business plan. ..............................................................................................

16

3. Growth strategy...........................................................................................................................................

17■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 20

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir■ SummaryPursuing further growth with a comprehensive support
management consulting model from strategy formulation through toimplementation and execution of management operations at worksites, including DX
TANABE CONSULTING GROUP CO., LTD. <9644> (hereafter, also “the Company”) and its principal operating company, TANABE CONSULTING, is a management consulting pioneer in Japan in its 67th year since its establishment.
It provides one-stop support for a broad range of customers, from major corporations to mid-size companies, toaddress diverse management challenges, from formulating strategies (upstream) through to implementation andexecution of management operations (midstream to downstream) at work sites, including DX. Its key feature is that
it approaches top management to expand its customer base and realize long-term contracts, which also serves
as its strength.
Since 2019, the Company has pursued an aggressive M&A strategy to expand its consulting menu and strengthen
professional DX services (i.e., a menu of services that harness digital technologies to provide implementation support
at work sites). The following companies have joined the TANABE CONSULTING GROUP: Leading Solutions Co.,
Ltd., which provides digital shift support for B-to-B companies’ sales (in 2019); Growin’ Partners Inc., which provides
overall M&A assistance including for cross-border deals and DX assistance to back-office departments, such as
BPR (business process re-engineering), and JAYTHREE, Inc., a provider of branding, CX (customer experience)design, and marketing DX support services (in 2021); and more recently, Kartz Media Works, Inc., which handles
strategic PR, PR consulting, and support for social media and owned media for domestic and foreign companies(in February 2023). Since they joined the Group, synergies generated by these companies have increased throughmutual customer transfer, which has boosted all of their earnings.
The TANABE CONSULTING GROUP’s outline
Pure holding company

COPYRIGHT（（ c）） 2023 TANABE CONSULTING GROUP CO., LTD. ALL RIGHT RESERVED.

1

TANABE CONSULTING GROUP CO., LTD.
Consolidated employees: 592 (as of September 30, 2023)
Operating companies

TANABE CONSULTING GROUP CO., LTD.

Leading Solutions Co., Ltd.
⚫ Digital shift support

f o r s a l es
⚫ B to B

Digital marketing consulting⚫ B to B

Digital marketing outsourcing support⚫ Strategy & domain⚫ D i g it a l a n d D X⚫ Finance and M&A⚫ Branding and PR

Growin’ Partners Inc.

JAYTHREE Inc.

⚫ M & A , e q u i ty p o l i c y ,⚫ Research and consulting

overseas business strategy⚫ Creatives⚫ BPR/DX assistance⚫ Marketing and growthfor back-office departments⚫ Human resources system construction,⚫ HR

Kartz Media Works, Inc.
⚫ Strategic PR & PR consulting⚫ Overseas PR⚫ Domestic and overseas

digital marketingorganizational strategy support

Source: The Company’s results briefing materials

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Summary

1. Overview of the FY3/24 1H results
In the Company’s FY3/24 1H (April to September 2023) consolidated results, net sales increased 11.4% year on
year (YoY) to ¥6,000mn and operating profit fell 3.0% to ¥583mn. Net sales reached a record high, rising for all
management consulting domains—Strategy & domain (formulation and promotion of growth strategies), Digital andDX (formulation and implementation of DX strategies), HR (implementation of human capital management), Financeand M&A (improvement of corporate value), and Branding & PR (raising the intrinsic value of brands). This is theresult of progress with cross-selling and up-selling to existing customers with an expanded consulting menu as well
as attracting new customers. Although profit declined YoY due to increased upfront expenses, mainly in humancapital, such as hiring consultants in anticipation of future growth, we think the Company is making steady progress
toward its full-year forecast in real terms.
2. FY3/24 results outlook
For the FY3/24 results outlook, the Company forecasts a 6.3% YoY increase in net sales to ¥12,500mn and a 6.8%
rise in operating profit to ¥1,230mn, unchanged from its initial forecast. Despite the uncertain economic outlook,consulting demand remains robust for themes such as formulating a medium- to long-term vision and global strategy,
DX, human capital management, and M&A. The Company seeks to capture these needs through collaboration
within the Group. In 2H, the Company began providing “DX cloud for the service industry – management platform
consulting” that supports the introduction and stabilization of NetSuite, Oracle Corporation Japan’s <4716> cloud
ERP. TANABE CONSULTING and Growin’ Partners also collaborated to develop and launch MIRAI Succession.
This service designs an overall management structure for business succession and post-succession to provide
the optimal solution that takes management into the future. This service signals the intention of moving into M&A
intermediary services in earnest. The Company has also formed a specialist cross-group team to strengthen activities
to win orders in the area of global strategy, where needs are growing in the post-pandemic period, with the
expectation of contributing to earnings expansion in 2H onward.
3. Medium-term business plan
The Company’s results targets in its medium-term business plan are net sales of ¥15.0bn and operating profit of¥1.8bn in FY3/26. Progress has been strong through FY3/23, with results surpassing plan targets for two years
running. The Company intends to upgrade services that assist customers with management strategies (upstream)
and further reinforce onsite management deployment and operation (midstream to downstream) in the form ofprofessional DX services that harness digital technologies, continuing to grow as a one & only management consulting firm capable of all-around comprehensive support for corporate management. It will continue to explore
M&A to strengthen its five management consulting domains. The Company plans to increase its workforce (mainly
consultants) from 592 at the end of September 2023 to 800 in FY3/26. It has announced a change to its policies
for shareholder returns and investing for growth to ensure it achieves its medium-term business plan target of
10% ROE. Its ambitious new shareholder return policy targets a consolidated total return ratio of around 100%by FY3/26. Based on this policy, which calls for paying stable dividends with a DOE of over 6% and timely sharebuybacks, it forecasts a dividend per share of ¥44.0 (up ¥2.0 YoY) in FY3/24. Combined with the ¥399mn sharebuyback completed in October 2023, the total return ratio will reach 147.6% in FY3/24. In addition, the Company
plans to continue aggressive growth investment in M&A with its abundant cash on hand of over ¥1.0bn to improve
growth and profitability.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Summary

Key Points
Record-high net sales in FY3/24 1H, with all management consulting domains and Group companies postingsales growth• Targeting record-high net sales and operating profit in FY3/24 by strengthening professional DX services
through M&A to enhance Group synergies• Strong progress toward FY3/26 targets of ¥15.0bn in net sales and ¥1.8bn in operating profit; considering more
M&A
• Aiming to fulfill criteria to maintain listing on TSE Prime Market with a total return ratio target of around 100%,
stable dividends with DOE over 6%, and timely share buybacks through FY3/26 to ensure it achieves ROE of
10%•

Performance trends(¥mn)

Net sales (left)(¥mn)

Operating profit (right)

15,000

1,500
1,152

12,000

970

987

9,000

1,230
1,200

926
900

751

6,000
9,046

9,394

9,213

10,572

11,75912,500

3,000

600
300

0

0

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24 E

Source: Prepared by FISCO from the Company’s financial results■ Business overview
Team consulting approach whereby a specialist team with extensive
knowledge of the industry and regional characteristics provides
comprehensive support for strategic issues unique to management
teams
1. Company overview
The Company, founded in 1957, is a pioneer and one of the major players in the management consulting industry
in Japan. In order to meet the specialized and diversifying management needs of its customers, it is promoting adiversification strategy for the management consulting business and assisting its customers’ sustainable growth byproviding high-quality consulting value to all its customers nationwide.

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03 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business overview(1) The three methods
Team consulting approach whereby a specialist team with extensive knowledge of the industry and regional
characteristics provides comprehensive support for strategic issues unique to companies’ management teams(top management)(a) Method 1: Top management approach
The main target customers are top management of large and mid-size companies, as well as government andpublic sector organizations. The Company provides support for solving the diverse strategic issues of thesecustomers.
Top management approach

Management consulting model 【Top management approach】
O f f e r s m an ag e m e n t c o n s u l t i n g d o m ai n s t o s o l ve s t r at e g i c i s s u e s s p e c i f i c t o t o p m an ag e m e n t f r o m al l an g l e s

Solving top management’s strategic challenges from all angles
COPYRIGHT（（ c）） 2023 TANABE CONSULTING GROUP CO., LTD. ALL RIGHT RESERVED.

2

Branding & PR

S t r a t e gy & d o m a inConsulting

Consulting

Provides comprehensive support from formulating brandstrategy through to implementing marketing measures

Support for creating a vision to make business modelr e f o r m h a p p en

Finance and M&A

D i g i t al a n d D XConsulting

Consulting

Support from formulation through to implementation of
corporate finance and M&A strategies

Provides support from building a DX vision through to DX
implementation from all angles

HR (human support)
Consulting
Support for HR structures, HR systems, employee
education, and work style reforms

Source: The Company’s results briefing materials(b) Method 2: Team consulting
The Company has five management consulting domains. Strategy & domain supports the formulation of a
medium- to long-term vision, management strategies, and business strategies for each industry. The Digital and
DX domain provides support for the formulation of a DX vision through the deployment and implementation of
specific DX initiatives and system introduction. The HR domain supports human capital-related business areas,from the formulation of an HR vision to HR structures, HR recruitment and education, and work style reforms. The
Finance and M&A domain provides integrated M&A support, from business succession and corporate finance, toimprove corporate value through growth strategies, due diligence, and PMI. The Branding & PR domain offers an
integrated service from formulating brand strategies for Japan and overseas and supporting their implementation,
creatives, and PR/corporate communications. Specialist consultants who are experts in strategic issues in eachmanagement consulting domain form a team with extensive knowledge of the customer’s industry and thosefamiliar with regional characteristics to provide all-around support to solve each customer’s strategic issues.
(c) Method 3: Comprehensive support model
A team of consultants supports top management, providing comprehensive support from the management
upstream that formulates purpose and strategies for the implementation and execution of management operations
related to DX (midstream to downstream), resulting in a high contract continuation rate.

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04 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business overview

Comprehensive support modelM a n a ge m e n t c o n su l ti n g m o d e l ( c o m p r e h e n si v e su p p o r t m o d e l )Realizing high contract continuation rate (LTV*) by providing integrated support from strategy formulation through tomanagement implementation and operations (such as DX)

COPYRIGHT（（ c）） 2023 TANABE CONSULTING GROUP CO., LTD. ALL RIGHT RESERVED.

3

Top management
approach

Formulating strategies (upstream)

M an ag e m e n t c o n s u l t i n g
c o m p r e h e n s i ve s u p p o r t m o d e l⚫ Implementation of⚫ Philosophy and purpose

Strategy & domain

formulation⚫ Business model strategy

Digital and DX

HR (Human Resource)⚫ DX vision formulation⚫ Digitalization concept⚫ Human capital management strategy⚫ Strategies for improving

Finance and M&A

corporate value⚫ M&A strategy formulation

Branding & PR

Implementation andexecution support (downstream)⚫ Medium-term businessplan formulation⚫ Design of systems such

a s E R P s y s t em s
⚫ HR system restructure⚫ HR system construction⚫

medium-term business plan
Vision management⚫ Deployment of ERP system⚫ Management system reform⚫ Implementation of HR system⚫ Personnel training/academy⚫ Holdings⚫ Business succession/capital policy⚫ Earnings structure reform⚫ Integration support (PMI)⚫ Branding strategy⚫ Brand building⚫ Creative policy⚫ Formulating strategic PR⚫ Marketing⚫ In-store promotions* Lifetime value (LTV): The Company defines LTV as building a long-term relationship with customers

Source: The Company’s results briefing materials

It conducts its business long-term from its offices in 10 major cities nationwide, from Hokkaido to Okinawa. The
Company is the only company in this industry that develops its business nationwide in the form of locally-based
firms with stationed management consultants, and its ability to provide community-based management consulting
services is one of its features and strengths. Moreover, by establishing the Strategic Comprehensive Institute,which plans and directs various consulting services, analyzes management information collected from consulting
sites and elsewhere, and disseminates information, and also from the IR, SR, PR, human resources recruitment,
M&A, and alliance, sustainability, and other corporate functions in both the Osaka and Tokyo head offices, theCompany is aiming to enhance its support functions to companies nationwide.
(2) Group strategy
Since 2019, the Company has been conducting M&A as one of its growth strategies, and four companies withsynergies are expected have joined the Group. In October 2019, Leading Solutions was made a subsidiary(investment ratio, 60.0%). It carries out KPO (Knowledge Process Outsourcing) work* for digital marketing in the
B-to-B area and website construction, and since it was founded in 2004, it has provided assistance to more than
300 companies, mainly listed and mid-size companies. The importance of digital marketing is increasing in the
B-to-B business area as well, and in this situation, the Group will develop and provide new services with highadded value by combining Leading Solutions’ knowledge and expertise in B-to-B digital marketing assistance with
the Company’s management consulting services. For existing customers as well, they are working on improving
the value of the services provided to the customers of both companies through joint consulting and personnel
exchanges.
*	A one-stop service for digital marketing, from formulating strategy through to planning and implementing measures, andPDCA.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business overview

Growin’ Partners was made a subsidiary in January 2021 (investment ratio, 50.1%). It has many accountants
and financial advisors, and its main businesses are providing overall M&A assistance, including for cross-borderdeals, and providing BPR/DX assistance (assistance to introduce ERP, RPA, etc.) into the back offices (such as
the accounting and finance departments) of large companies and listed corporate groups. Amid growing demandfor M&A and management DX, the Company is strengthening existing services and developing new ones bycombining its management consulting knowledge with Growin’ Partners’ expertise and know-how in M&A andDX. As a result, it aims to add value to services delivered to customers of both companies through joint consulting
and personnel exchange.
JAYTHREE was made a subsidiary in December 2021 (investment ratio, 96.2%). It has professional humanresources, including directors, creators, and designers, and its strengths include the creation of new value, suchas branding, CX design, and marketing DX for customers that range from enterprises to mid-size companies.
They are working to strengthen the functions of existing services and to develop new services by combining theCompany’s management consulting knowledge and expertise it has cultivated over many years with JAYTHREE’s
knowledge and expertise on branding, CX design, and marketing DX that it has provided to more than 500
companies since its founding. Moreover, they are conducting a strategy of opening-up the markets for brand &design consulting and marketing DX nationwide by strengthening the business foundations of both companies.
Many companies, especially regional ones, view the enhancement of branding as a management issue, and there
appears to be significant room for development.
Kartz Media Works, which was made a subsidiary in February 2023 (an investment ratio of 55.0%), has many
employees who previously worked in the media and global human resources who serve as “PR consultants,”
and its strengths include strategic PR for large companies including foreign-affiliated companies, overseas PR,
and support for digital marketing strategy formulation and operations. As strategic issues for top management,
needs are increasing more and more for strategy formulation and implementation in the “publicity and PR” and“branding” domains, and in this situation, the policy is to combine the Company’s findings and expertise inmanagement consulting with Kartz Media Works’ findings and expertise in domestic and overseas PR consulting
and domestic and overseas digital marketing, and to work to strengthen the functions of existing services and tolaunch new services. Many global companies use Global PR Wire, a press release distribution service provided by
Kartz Media Works for overseas media. We think this service will serve as a “foot in the door” to provide consulting
services on the theme of global strategy for Japanese companies seeking to expand overseas or strengthen theiroverseas business.
Forming the Group from these four companies strengthens the Company’s comprehensive management consulting support model, providing a level of strength that is unparalleled by other companies. The Group will be able
to accommodate nationwide needs related to business succession, business model transformation and businessrebuilding, DX and productivity improvement, CX design, and various consulting needs of large and mid-size
companies, such as domestic and overseas PR, which are expected to accelerate going forward. The Company
has announced a policy of focusing on the government and public sectors by taking advantage of its nationwide
network of business bases. We therefore believe its growth potential has increased substantially.

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06 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business overview

Approximately 75% of customers continue their contracts for one
year or longer. Utilizes diverse channels to attract new customers,
leading to team consulting contracts
2. Earnings growth model
The main feature of the Company’s business model is that services based on long-term contracts are the foundationof its growth, and that it achieves sustained growth by increasing the number of new customers for these services
while also adding spot-type products and services. Approximately 45% of customers are long-term customers
continuing their contracts for five years or longer, and 75% of customers continue their contracts for one year
or longer. We think the reason for the high contract continuation rate lies in its top management approach as a“business doctor,” using the team consulting method to solve strategy and management challenges for management
teams. Team consulting services accounted for 74% of net sales in FY3/24 1H.
Years of contract continuation rate
Customer breakdown by years of contract continuation
COPYRIGHT（（ c）） 2023 TANABE CONSULTING GROUP CO., LTD. ALL RIGHT RESERVED.

4

Le s s th a n
1 y e a r, s p o t

A p p r o x i m at e l y 7 5 %o f c u st o m e rs
c o n t in u e t h e ir
c o n t r ac t s f o r 1 ye aro r l o n ge r

25%

1 0 y e ar s
or longer15%
5 – 1 0 y e ar s

1–5 years

30%

A p p r o x i m at e l y 4 5 %o f c u st o m e rs
c o n t in u e t h e ir
c o n t r ac t s f o r 5
ye ar s o r l o n g e r

30%

Source: The Company’s results briefing materials

As the customer creation model, in addition to introductions from its existing customers and over 350 partner
financial institutions, the Group creates contact points with new customers, such as digital marketing and holding
large-scale free online presentations. In addition to team consulting services, it continuously provides services suchas management workshops by industry and management theme, and human resources development seminars by
employee level, which is a trend that increases customers’ lifetime value (LTV). An estimated 60% of new customers
for team consulting services are companies that have participated in these workshops and various seminars.
Moreover, as the marketing strategy for the Group as a whole since FY3/22, it has been launching specialist
marketing websites for each management consulting domain to solve customer problems. It acquires leads (potential
customers) through these websites, and cases leading to team consulting contracts are also increasing. Groupsynergies are also being generated; for example, Group company Leading Solutions is responsible for developing thesites for each management consulting domain, while JAYTHREE is responsible for developing some of the content.
In addition, the Group companies are actively holding joint seminars with the Company.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business overview

Overview of marketing model
Created unique marketing model from customer creation through realizing lifetime value (LTV) *Customer creation

Fostering customers

H o k k ai d oSpecialist site for eachmanagement consulting domain

Strategic Comprehensive
Institute

TohokuNumber of domestic companies
3,850,000 companies

NiigataT o k yoLarge-scale free
online presentations

M o r e t h an 2 , 0 0 0
participants/year

Mail delivery

Fee-baseds e m i n ars

M o r e t h an 9 , 9 0 0
participants/year

M A to o l

Building lifetime value (LTV)Top management approach

Digital and DX
Human resources (HR)Inside sales

Large companies
About 10,000 companies

C h u bu
Hokuriku

M o r e t h an 3 3 0
Introductions bypartner companies
financial institutions

M o r e t h an 4 0 / ye ar

Combining customer
contact points rooted inlocal communities
with digital marketing

VisionTV commercials and signage ads

Integrated support model

Organizationd e v elo p ment

Customer relationshipmanagement (CRM)

O n l i n e a d s a n d s o c i al m e d i a

Okinawa

Branding & PR

Planning andproposals

Vi s ion i m plementa tionP r e s s r e l eas es

Field sales

Strategy

KyusyuFinance and M&A
Comprehensive ERP
d a t a b a se

M a n a gement r e sources

Chushikoku

Customer
introductions

M a n a gement s y st em ( D X
de pl oy ment)

Mid-size companies
About 1,550,000 companies

O sa ka

Team consulting

Strategy & domain

Sh aring ide als

COPYRIGHT（（ c）） 2023 TANABE CONSULTING GROUP CO., LTD. ALL RIGHT RESERVED.

5

Region*Lifetime value (LTV): The Company defines LTV as building a long-term relationship with customers

Source: The Company’s results briefing materials■ Result trends
Record-high net sales in FY3/24 1H, with all management consulting
domains and Group companies posting sales growth
1. FY3/24 1H results overview
In the FY3/24 1H consolidated results, profit declined on higher sales. The Company’s net sales totaled ¥6,000mn(up 11.4% YoY), operating profit ¥583mn (down 3.0%), ordinary profit ¥585mn (down 3.5%), and net profit attributable to owners of parent ¥349mn (down 9.5%). The Company posted record-high net sales, with increases inall management consulting domains (including Group companies). Despite an 11.6% increase in gross profit due
to the sales growth effect, profit turned down because the Company increased spending on recruitment for future
growth and strengthening employee education and training for early development, including a 13.8% YoY rise in
human capital investment, whose ratio to net sales went up 1.0pp, and a ¥61mn increase in digital/DX and branding/marketing investment to increase competitiveness. Given that net sales growth is robust, we think the Company ismaking steady progress toward its full-year forecast in real terms. We note that Kartz Media Works, which recently
became a consolidated subsidiary, also contributed to FY3/24 1H earnings.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.

29-Mar.-2024

9644 Tokyo Stock Exchange Prime Market

https://www.tanabeconsulting-group.com/en/ir

Result trends

FY3/24 1H results(¥mn)
FY3/23 1H
Results

FY3/24 1H

Ratio to sales

Company
forecast

Results

Ratio to sales

YoY

vs. forecast

Net sales

5,386

-

5,645

6,000

-

11.4%

6.3%

Gross profit

2,478

46.0%

2,655

2,766

46.1%

11.6%

4.2%

SG&A expenses

1,877

34.9%

2,045

2,183

36.4%

16.3%

6.8%

Operating profit

601

11.2%

610

583

9.7%

-3.0%

-4.4%

Ordinary profit

606

11.3%

610

585

9.8%

-3.5%

-4.1%

Net profit attributable toowners of parent

386

7.2%

360

349

5.8%

-9.5%

-2.8%

Source: Prepared by FISCO from the Company’s results briefing materials and financial results

Net sales were 6.3% higher than the Company forecast as a result of capturing robust consulting demand in each of
the management consulting domains by strengthening collaboration between Group companies. However, operating
profit fell short by 4.4% due to hiring consultants in anticipation of business expansion and investing upfront in digital/
branding services. The consolidated workforce was 592 at the end of FY3/24 1H, up 73 from the end of FY3/23
and 12 more than the Company forecast.

Operating profit and expenses (results and forecast)(¥mn)

Cost of sales of products and services
Digital/DX investment
Other general administrative expenses

Human capital investment
Branding/marketing investment
Operating profit

6,000
5,000

601
602

109

628

700

137

144
159

4,000

147

132
3,000

583

610

2,812

2,471

2,702

1,468

1,420

1,600

FY3/23 1H results

FY3/24 1H forecast

FY3/24 1H results

2,000
1,000
0

Source: Prepared by FISCO from the Company’s financial results briefing materials

The Company uses the number of team consulting contracts, companies, and net sales as KPIs. All three increased
YoY to record highs in FY3/24 1H. The number of team consulting contracts increased 3.1% YoY to 1,257, theaverage number of companies in FY3/24 1H rose 1.3% to 921, and net sales rose 9.2% to ¥4,420mn. Up-sellingand cross-selling to existing customers progressed, and the number of large companies among new customers
trended up, resulting in a 5.9% YoY rise in the average sales price per project to ¥352mn and 7.8% rise in the
average sales price per company to ¥480mn. These results indicate that the Company’s business strategy is making
solid progress. Furthermore, base sales, which are sales of long-term contracted services of six months or morethat provide a stable base for growth, also grew 18.7% YoY to a record-high ¥3,936mn. We can thus see that solid
growth of long-term contract projects was a feature in FY3/24 1H.

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09 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.

29-Mar.-2024

9644 Tokyo Stock Exchange Prime Market

https://www.tanabeconsulting-group.com/en/ir

Result trends

Trends in the number of team consulting contracts,
companies and net sales
Team consulting net sales (left)
No. of team consulting companies (right)

No. of team consulting contracts (right)(Contracts/companies)

(¥mn)
5,000
1,219

1,257

909

921

1,109

4,000
912

3,000

648

853

1,200

785

900

595
4,048

2,000
2,772
1,000

2,518

1,500

4,420

600

3,200
300

0

0
FY3/21 1H

FY3/21 1H

FY3/22 1H

FY3/23 1H

FY3/24 1H*1 Team consulting = monthly contract-type consulting (Strategy & domain, Digital and DX, HR, Finance and M&A, Branding &PR), while the number of companies is the average number of contracting companies during the period*2 Leading Solutions results included in consolidation since FY3/21 1H*3 Growin’ Partners results included in consolidation since FY3/22 1H*4 JAYTHREE results included in consolidation since FY3/23 1H*5 Kartz Media Works’ results included in consolidation since FY3/24 1H
Source: Prepared by FISCO from the Company’s financial results briefing material

Trends in average net sales and average priceper team consulting project(¥ten thousand)
600
500

400

Average price per project (¥ten thousand)Average price per company (¥ten thousand)

428

423

408

304

295

289

FY3/21 1H

FY3/21 1H

FY3/22 1H

445

480

332

352

FY3/23 1H

FY3/24 1H

300
200
100
0

*1 Team consulting = monthly contract-type consulting (Strategy & domain, Digital and DX, HR, Finance and M&A, Branding &PR), while the number of companies is the average number of contracting companies during the period*2 Leading Solutions results included in consolidation since FY3/21 1H*3 Growin’ Partners results included in consolidation since FY3/22 1H*4 JAYTHREE results included in consolidation since FY3/23 1H*5 Kartz Media Works’ results included in consolidation since FY3/24 1H
Source: Prepared by FISCO from the Company’s results briefing materials

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10 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Result trends

Regarding the earnings performance of operating companies, TANABE CONSULTING and four acquired Group
companies all recorded net sales growth, likely reflecting strengthened Group synergies. The four Group companies
also likely posted profit growth, because net profit attributable to non-controlling interests expanded from ¥26mn
in FY3/23 1H to ¥55mn in FY3/24 1H.

Brisk performance of Strategy & domain, Digital and DX, HR, andBranding & PR management consulting domains
2. Net sales breakdown by management consulting domain
Breaking down net sales by management consulting domain, Strategy & domain, Digital and DX, and HR performed
strongly, recording around 10% net sales growth, while Branding & PR posted a sharp 25.8% increase in net sales(including the contribution of newly consolidated Kartz Media Works) because services for large and mid-size
companies and promotions for government and public sector organizations were brisk.

Net sales breakdown by management consulting domain

(¥mn)
1,600

FY3/23 1H
1,354

1,400
1,200

FY3/24 1H

1,220
1,007

1,104

1,221

1,163

1,112
995

1,000

998

925

800
600
400
124

200

157

0

Source: Prepared by FISCO from the Company’s results briefing materials(1) Strategy & domain
Net sales of Strategy & domain increased 9.6% YoY to ¥1,104mn. Management consulting needs increased
among companies seeking medium- to long-term growth amid significant changes in the market environment,such as continued yen depreciation, increasing prices, and adapting to living with COVID-19. Demand for projects
with themes such as formulating and progressing medium- to long-term vision and medium-term business plan(business model), formulating and promoting global strategy, training for management teams, regional revitalization,and implementation of SDGs was particularly strong, while the number of consulting contracts with government
and public sector organizations, which the Company has been focusing on since FY3/23, showed a steadyincrease. The Company also made progress with obtaining leads through the specialist site for the formulation of
the long-term vision and medium-term business plan, which contributed to net sales growth.

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11 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Result trends(2) Digital and DX
In the Digital and DX domain, net sales grew 11.0% YoY to ¥1,354mn. Demand for DX consulting remainedrobust among companies, with projects on themes such as DX vision, management DX (implementation of ERP,
digitalization concept formulation, work process improvements, and more), digital marketing, and branding DX(websites and social media) for large and listed companies and training of DX personnel for government andpublic sector organizations performing strongly. The Company also made progress with obtaining leads throughthe specialist site for digital/DX strategy formulation and implementation, which contributed to net sales growth.
(3) HR
In the HR domain, net sales grew 9.8% YoY to ¥1,221mn. Amid heightened interest in human capital management,
consulting projects for large and mid-size companies on themes such as organization and HR strategy formulation,
HR system restructure, Academy (the Company’s internal university) establishment, talent management (including
HR tech), and fostering management candidates. In particular, inquiries increased regarding Academy, a cloudbased solution that combines in-person classes with online employee education (e-learning) to train personnel
quickly. The number of companies signing up increased from around 150 at the end of FY3/23 to around 170 at
the end of FY3/24 1H. The Company also made progress in obtaining leads through the specialist HR site, which
contributed toward net sales.
(4) Finance and M&A
In the Finance and M&A domain, net sales increased 0.2% YoY to ¥998mn. It was the only domain whose net sales
increased marginally because themes such as earnings management for regional companies were weak. However,consulting needs among large and mid-size companies for projects on themes such as corporate value vision,
compliance with the Corporate Governance Code, creating a holding structure and group management support,
and M&A (from strategy formulation through to financial advisory service, due diligence, and PMI) remained robust.
The Company also made progress in obtaining leads through the specialist site for business succession and
M&A, as well as joint seminars with partner financial institutions, which helped to generate consulting projects.
(5) Branding & PR
In the Branding & PR domain, net sales grew 25.8% YoY to ¥1,163mn. Communication needs through bothin-person trade shows and events and digital media (websites and social media) increased in all industries in the
post-pandemic period. Demand for promotions targeting the recovery of inbound demand also picked up. These
factors, combined with the addition of Kartz Media Works to the Group, contributed toward net sales growth.
Results were strong for projects for large and mid-size companies (including listed companies) on themes suchas brand building, media PR (Global PR Wire and TV programs), overseas PR, content marketing, creatives, andhybrid promotions (online x offline), as well as promotions for government and public sector organizations. The
Company also launched a specialist website on branding and strategic PR information to obtain leads.
(6) Other
Sales of Blue Diary notebooks and other promotion products increased 26.9% YoY to ¥157mn. Net sales
increased because orders for promotional products increased amid various events resuming after the COVID-19
pandemic, while the Company revised its prices to absorb the increase in raw material prices. Typically, net sales
in this business spike in 3Q, when sales of Blue Diary notebook sales are concentrated, but the intention is tolevel them out by taking steps such as pushing forward the period of ordering activities.

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12 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.

29-Mar.-2024

9644 Tokyo Stock Exchange Prime Market

https://www.tanabeconsulting-group.com/en/ir

Result trends

Highly financially sound, with maintaining equity ratio at a high levelof 77.0% and an abundance of cash on hand
3. Financial condition and management indicators
At the end of FY3/24 1H, total assets decreased ¥367mn from the end of the previous period to ¥14,043mn. Looking
at the main change factors in current assets, notes and accounts receivable - trade, and contract assets increased¥198mn, while cash and deposits, and securities decreased ¥695mn. In non-current assets, there were increasesof ¥40mn in property, plant and equipment and ¥39mn in investments and other assets.
Total liabilities increased ¥113mn from the end of the previous period to ¥2,813mn. Income taxes payable decreased¥63mn, while accounts payable - trade increased ¥112mn. Net assets decreased ¥481mn from the end of theprevious period to ¥11,229mn. Non-controlling interests increased ¥54mn, while shareholders’ equity decreased¥535mn due to the payment of dividends and share buyback.
Looking at management indicators, the equity ratio was 77.0%, slightly lower than at the end of the previous period,
but the Company continues to maintain it at a high level, while it also has an abundance of cash, deposits andsecurities of more than ¥7.0bn and maintains effectively debt-free management, so it can be judged to be highly
financially sound. The Company has announced a policy of paying stable dividends with a target total return ratio of
100% during the medium-term business plan period through FY3/26, seeking to expand earnings without increasing
shareholders’ equity to achieve ROE of around 10% (versus ROE of 6.4% in FY3/23).
Consolidated balance sheet(¥mn)
End of FY3/21

End of FY3/22

End of FY3/23

End of FY3/24
1H

Change

8,889

9,329

9,674

9,241

-432

8,078

8,199

8,373

7,678

-695

Non-current assets

4,516

4,495

4,734

4,800

65

Total assets

13,405

13,824

14,41014,043-367

Current liabilities

1,418

1,856

2,154

2,303

149

556

451

545

510

-35

1,975

2,307

2,700

2,813

113

Current assets(Cash, deposits, and securities)

Non-current liabilities
Total liabilities(Interest-bearing debt)
Net assets

120

149

190

175

-14

11,43011,517

11,710

11,229

-481

83.1%

81.0%

78.8%

77.0%

-1.8pt(Management indicators)
Equity ratio

Source: Prepared by FISCO from the Company’s financial results

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13 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir■ Business outlook
Targeting record-high net sales and operating profit in FY3/24 bystrengthening professional DX services to enhance Group synergies
1. FY3/24 results outlook
For the FY3/24 consolidated results, the Company has left its initial forecast unchanged. It forecasts increased sales
and profit for the third consecutive period, with net sales to increase to ¥12,500mn (up 6.3% YoY), operating profit togrow to ¥1,230mn (up 6.8%), ordinary profit to rise to ¥1,230mn (up 5.7%), and net profit attributable to owners ofparent to increase to ¥760mn (up 4.9%). It will continue human capital investment, branding investment, and digital
investment while aiming for record highs in net sales and operating profit. Progress versus the full-year forecast
in 1H is 48.0% for net sales and 47.4% for operating profit, but we assume performance is on track, because theCompany’s profit tends to be higher in 2H, due in part to sales of Blue Diary notebooks being concentrated in 3Q.
Recent orders suggest that earnings trends are strong and unchanged. We at FISCO therefore think the Company’s
forecast is achievable.
FY3/24 results outlook(¥mn)
FY3/23full-year results

FY3/24Full-year
forecast

YoY

Progress rate
in 1H

Net sales

11,75912,500

6.3%

48.0%

Gross profit

5,202

5,565

7.0%

49.7%

SG&A expenses

4,050

4,335

7.0%

50.4%

Operating profit

1,152

1,230

6.8%

47.4%

Ordinary profit

1,163

1,230

5.7%

47.6%

Net profit attributable toowners of parent

724

760

4.9%

46.1%

Earnings per share (yen)

42.25

44.56

Source: Prepared by FISCO from the Company’s financial results

The Company plans to continue strengthening its management consulting domains in 2H. It will focus particularly
on professional DX services (ERP implementation and implementation support), finance, and M&A to meet businesssuccession needs, and the formulation of global strategies, which has been revitalized in the post-pandemic period.
In professional DX services, TANABE CONSULTING and Growin’ Partners began providing “DX cloud for the service
industry – management platform consulting” in October 2023. A DX support service for the service industry, it
supports the introduction and stabilization of NetSuite*, Oracle Corporation Japan’s <4716> cloud ERP. It helps
customer firms grow by combining TANABE CONSULTING’s medium-term business plan/business strategy formulation consulting services with the accounting, HR, and IT (ERP) consulting services provided by Growin’ Partners
to maximize the effect of adopting NetSuite. The Company adopted NetSuite a few years ago and has verified theeffects of uptake, such as approximately 30% reduction in system operation costs and around 30% increase in thenumber of leads obtained after transferring freed-up operation support staff to the CRM division. It plans to use its
own example of adopting NetSuite to communicate its advantages to customers.
*	NetSuite is a business management software product that provides all major business applications such as ERP/financial
accounting, customer relationship management (CRM), and e-commerce in a single system. It is the world’s top cloud
ERP with more than 37,000 user companies worldwide.

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14 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business outlook

TANABE CONSULTING and Growin’ Partners also collaborated in November 2023 to renew their group management
system construction consulting service. It delivers digital implementation of customers’ group management accounting and group CMS, earnings management using Money Forward Cloud Consolidated Accounting, a consolidated
accounting system supplied by Money Forward Inc. <3994> and supports the whole process of installation ofsystems required for group management to stabilizing the operation and management structure.
In the Finance and M&A domain, TANABE CONSULTING in collaboration with Growin’ Partners began providing
the MIRAI Succession service that fulfills business succession needs in October 2023. As well as a businesssuccession-related consulting menu such as formulation of a medium- to long-term vision, support for businessrestructuring, business succession assessment, training successors, M&A (financial advisory and intermediaryservices), and post-merger integration (PMI) support, the service designs the overall management structure (including
business/organization, HR, and management systems) to provide the optimal solution that takes management into
the future by enhancing corporate value. The Company announced its intention of moving into M&A intermediaryservices in earnest when launching the service. It had previously provided a financial advisory service, but plans toengage in M&A intermediary services as well to expand the scope of M&A support under the MIRAI Succession
brand.
For global strategy, the Company plans to strengthen further its support for global business expansion by its main
customer group (large and mid-size companies) by enhancing its cross-Group global consulting functions. Thisentails providing diverse Group services that match customer needs to capture growing demand, including TANABE
CONSULTING’s support for starting and expanding overseas business, global marketing strategy, and support forforeign companies starting a business in Japan, Growin’ Partners’ cross-border M&A, and Kartz Media Works’overseas PR (press release delivery service targeting overseas media using Global PR Wire).
Looking at the sales forecast and priority initiatives for each management consulting domain, the Company forecasts
net sales of ¥2,300mn for Strategy & domain. The Company aims to increase the number of large contracts withlarge and listed companies centered on formulating and progressing a medium- to long-term vision, and strengthen
the consulting functions for global strategy, business model reform, and ESG/SDGs to achieve its target. Progressin 1H was a solid 48.0% of the full-year forecast.
The Company forecasts net sales of ¥2,780mn for the Digital and DX domain. It plans to progress consulting in thearea of DX vision and digitalization concept formulation, as well as expand and strengthen professional DX services
as mentioned above to attain its target. Progress in 1H was a solid 48.7% of the full-year forecast.
The net sales forecast for the HR domain is ¥2,250mn. The Company plans to expand and enhance its total HR
system consulting service, which improves the value of customer companies’ human capital, as well as progress
programs to foster management candidates such as its top management program and Academy (the Company’s
internal university). Progress in 1H was faster than expected at 54.3% of the full-year forecast. We at FISCO thinkthat the Company may surpass its full-year forecast for this domain amid the increasing number of companies
investing more in human capital management initiatives.
The Company forecasts net sales of ¥2,100mn for the Finance and M&A domain. It plans to focus on holding
company/group management, growth M&A, business succession M&A, and cross-border M&A, as well as attracting
demand for corporate value vision consulting to make sustainability management happen. Although progress in 1H
was somewhat slow at 47.5% of the full-year forecast, we think the Company can regain lost ground by stepping
up initiatives for MIRAI Succession and M&A intermediary services.

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15 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.

29-Mar.-2024

9644 Tokyo Stock Exchange Prime Market

https://www.tanabeconsulting-group.com/en/ir

Business outlook

The net sales forecast for the Branding and PR domain is ¥2,400mn. As well as strengthening support functions forformulating brand strategies through to on site promotion of products and services, it plans to progress strategic
PR consulting in Japan and overseas. Progress in 1H was 48.5% of the full-year forecast. We expect the businessto continue steady expansion through 2H as well.

Strong progress toward FY3/26 targets of ¥15.0bn in net sales and¥1.8bn in operating profit; still considering more M&A
2. Overview of the medium-term business plan
The Company in FY3/22 has started a five-year medium-term business plan (2021-2025), “TCG Future Vision
2030.” The Company intends to upgrade services that assist customers with management strategies (upstream)that have been a traditional strength, further reinforce onsite management deployment and operation (midstream todownstream) in the form of professional DX services, continue to build a one & only management consulting supportmodel capable of all-around integrated support for corporate management, and accelerate growth.
The Company’s numerical results targets for FY3/26, the plan’s final fiscal year, are net sales of ¥15.0bn, operating
profit of ¥1.8bn, ROE of 10%, and ROA of 15%, while with the FY3/23 results as the starting point, the targets forthe three-year CAGR are 8.5% for net sales and 16.0% for operating profit. The plan calls for accelerating profit
growth in FY3/25 onward. The Company’s strategy is to become more profitable by strengthening Group synergies
mainly in team consulting services (which have high added value) while growing its business. Progress has beenahead of target in FY3/22 and FY3/23. We at FISCO believe this is due to capturing demand from the growing
number of companies investing more in DX and human capital management, engaging in M&A, and working on
SDGs by harnessing Group synergies. Synergies with acquired Group companies (subsidiaries), which strengthened
professional DX services, helped to attract new customers and increase cross-selling and up-selling to existingcustomers.
We think the Company can expand net sales further by attracting consulting needs among customer companies in
DX, human capital management, M&A, and global strategy, as well as expanding into services for the government
and public sector. In M&A, the Company has established a foundation in the diversification strategy for its management consulting domains. In particular, it continues to seek out companies with the potential for strengthening
professional DX services. Of the FY3/26 target net sales of ¥15.0bn, the Company assumes ¥13.0bn will be fromexisting businesses and ¥2.0bn will be the result of its M&A strategy. We at FISCO believe the Company’s FY3/26
results targets look achievable if it can further enhance Group synergies through mutual customer transfer by Group
companies (subsidiaries), resulting in an increase in team consulting contracts and winning larger orders.
Results targets(¥mn)
FY3/23

FY3/24

Initial plan

Results

Initial plan

Revised plan

FY3/25Plan

FY3/26Plan

Net sales

11,25011,75912,30012,50013,50015,0008.5%

Operating profit

1,015

1,152

1,230

1,230

1,485

1,800

16.0%

9.0%

9.8%

10.0%

9.8%

11.0%

12.0%

ROE

-

6.4%

-

-

-

10.0%

ROA

-

8.2%

-

-

-

15.0%

560

566

640

640

720

800

Operating margin

Number of employees* CAGR from FY3/24 to FY3/26
Source: Prepared by FISCO from the Company’s financial results briefing materials

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16 21

CAGR*

12.2%

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business outlook

Target net sales by management consulting domain and focus domains
FY3/21Results

FY3/26
Plan

CAGR*

9,213

15,0008.5%• FY3/26 target net sales break down into ¥13.0bn from existing businesses and¥2.0bn from M&A strategy• Aim to achieve target by expanding management consulting domains (especially
Digital and DX)

Strategy & domain

2,482

3,000

3.9%

Formulate vision, new business/business model reform, global, crossover between
strategic themes such as SDGs with community-focused strategy, and so on

Digital and DX

1,274

5,000

31.4%

Hybrid marketing, ERP system installation and operation, DX productivity reforms, UX/
CX design, branding DX, recruitment marketing, supply chain management, and so on

HR

1,142

2,200

14.0%

Strategic personnel system linked directly to management strategy, employee
engagement system, installation and operation of HR DX system, human capitalmanagement, Academy (the Company’s internal university) establishment, Academy
Cloud, and so on

Finance and M&A

1,386

2,100

8.7%

Development of business succession type holding company management model andgroup management model, business restructuring type M&A and cross-border M&A,
and so on

Branding & PR

1,567

2,200

7.0%

Purpose branding, customer communication model reforms from strengthening
corporate branding (PR and IR) to CX improvement, creative support such as social
media marketing

Other

1,360

500

-18.1%• Blue Diary notebooks and promotion products• Forecast (stated to the left) to achieve improvement in added value (profit margin)

Net sales

Focus domains* FY3/24-FY3/26 average annual growth rates
Source: Prepared by FISCO from the Company’s financial results briefing materials

Promote five growth models and strengthen human capital to build
earnings base for sustainable growth
3. Growth strategy
To achieve its goal of “One & Only- Creation of TCG, the Globally Unrivaled Consulting Group,” the Company intends
to promote the deployment of five growth models and human capital management and pursue a corporate strategy
that realizes sustainable growth.
(1) Implementing five TCG growth modelsa) Professional DX service model
The Company aims to grow sales by deepening its management strategy formulation function, which is its corevalue, and also by expanding the menu of professional DX services in collaboration with Group companies andothers. In FY3/24, it launched “DX cloud for the service industry – management platform consulting” and renewed
the group management system construction consulting service.
b) C&C development model
The Company is progressing a C&C (consulting & conglomerate) strategy to diversify the management consulting
business. It will develop and commodify a team consulting menu related to managerial needs and issues newly
arisen as a result of changes in the social environment, and more, form a team consulting organization to providethat menu, and then gradually develop that organization into a consulting business. The Company has expanded
its consulting business in the past few years while progressing an M&A strategy. Its intention is to establish a
one-of-a-kind management consulting support model as it pursues specialization and all-round capabilities.

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17 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business outlookc) Marketing model
Targeting large and mid-size companies (including listed companies), local governments, and other organizations,the Company will work to acquire customers through its locally rooted regional strategy and unique marketingmodel (acquiring potential customers via specialist websites according to management consulting domain, various
seminars, workshops, and more) It intends to achieve at least a 70% continuation rate for management consulting
contracts. The Company runs specialized management consulting websites for long-term vision/medium-termbusiness plan formulation, digital/DX strategy formulation and implementation, HR, corporate finance and M&A,
business succession and M&A, branding and strategic PR information, and government, public sector, andservice consulting. The Company has attracted many potential customers via these websites, which has led to anincrease in team consulting contracts. It is therefore planning to continue expanding and enhancing its content.
In addition to the above, the Group is working to discover new consulting demand and connect it to cross-sellingand up-selling by strengthening follow-ups to existing customers in the CRM department.
d) Team-up and 100 partners modelThrough collaboration with the C&C development model, the Company intends to build a management system(training program via the Company’s internal university, and more) to find new leaders in existing organizations
and teams and cultivate these leaders into partners and thereby increase the number of partner personnel from50 people to 100 people (71 people as of end of FY3/23). Partner personnel refers to people who are capable ofrunning a consulting team (5-10 people). Cultivation of 100 partner human resources means that the Company canhave 100 consulting teams. In particular, it is working to enhance its workforce at each of its business locations
so it can work on expanding teams in local areas to contribute to the revitalization of regional economies.
e) Academy model
In order to quickly develop professional human resources* (target of two years), the Group is expanding “TCG
Academies,” which is an education and training system that combines the online and the real. It is alreadystarting to produce results, including that after introducing an academy, the speed of training to become a chief
consultant has been reduced from the previous approximately five years to two to three years. In FY3/23, theCompany established academies for specific subjects and domains such as the TCG Leadership School, Strategy& Domain School, HR School, Corporate Finance School, M&A School, Marketing School, CRM Consultant
School, Coordinator School, and Consulting Assistant School, which it has made available to Group companies.
In this way, the Group is strengthening its whole personnel training program efficiently by utilizing the system.
*	Professional human resources are human resources who have served as a chief consultant for at least five companies andwho are project leaders in a specific field.

(2) Human capital management
The Company is targeting 800 full-time consolidated employees by FY3/26, and it plans to strengthen its recruitment system and to increase the number of new graduate and mid-career recruits. For mid-career recruitment, its
policy is to focus on recruiting people with practical experience who are well versed in the industry and to recruit
career I-turn and U-turn hires in order to strengthen the structure of regional business offices. With a broader
range of management consulting domains than previously, it can now recruit with more specific job descriptions,which has resulted in an increasing number of applicants with experience. After becoming a holding company,
it formed a Group Management Team and has strengthened Group hiring. The Group will hire around 60 to 70
mid-career employees and 17 new graduates in FY3/24. It plans to hire around 20 new graduates in FY3/25 andincrease the number of mid-career hires. It also plans to increase the rate of hiring mid-career employees by morethan 10% per year. In addition, the implementation of M&As is expected to increase the number of employees
due to the increase in the number of operating companies.

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18 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Business outlook

In the consulting business, sales are based on human resources, so it is no exaggeration to say that the key toachieving the mid-term results targets will be whether or not the increase in employees is progressed according
to plan. Therefore, the fact that the number of employees hired in FY3/24 1H exceeded the forecast is viewed
positively. The Company aims to achieve the target of 800 employees in FY3/26 by strengthening recruitment,
working to improve the retention rate of excellent employees through efficient human resources developmentusing TCG Academy, and creating a work environment where diverse professionals can succeed. This entails theintroduction of a job-based course-specific HR system and DX investment to provide a positive work environment
and improve productivity. The Company’s current employee retention rate of 89.0% (three-year average) is highin the consulting business.

(people)Trend in the number of consolidated employees and targets in themedium-term business plan

900

800
700
600
500
400
300
200

389

457

495

FY3/21

FY3/22

566

640

720

800

100
0
FY3/20FY3/23

FY3/24(plan)

FY3/25(plan)

FY3/26(plan)

Source: Prepared by FISCO from the Company’s financial results briefing materials(3) Sustainability
The Company developed products to support customers’ SDGs initiatives such as “SDGs implementation consulting,” “SDGs seminars,” and “SDGs education” in response to the growing number of SDG-related inquiries
from companies. It has established its own sustainability committee, specified materialities and priority issues, andis progressing with SDGs initiatives. The Company has selected four materiality themes. They are “develop sustainable consulting methods that solve social issues through our business,” “achieve client success by expanding
partnerships,” “build a framework for human capital management to enable TCG human resources to excel,” and“enhance the value to social contribution by creating new contact points with society.”

We encourage readers to review our complete legal statement on “Disclaimer” page.

19 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.

29-Mar.-2024

9644 Tokyo Stock Exchange Prime Market

https://www.tanabeconsulting-group.com/en/ir

Business outlook

The Company also identified responding to climate change, human capital management, and strengthening
corporate governance as its three priority issues. With regard to responding to climate change, the Company
discloses information in compliance with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. Specifically, it implements initiatives to reduce greenhouse gas emissions with the goal of a 100%
reduction in Scope 1 and 2 emissions by 2030. Along with continuing with measures such as replacing officelighting with LED and going paperless by smart DX investment, the Company will increase the share of renewableenergy in its total power use. For emissions it cannot reduce, the Company is considering offset options such aspurchasing non-fossil fuel certificates and renewable energy J-Credits. For Scope 3 emissions, the Company isworking with suppliers to reduce emissions to achieve carbon neutrality. Concerning human capital management,
it is strengthening recruitment and personnel training to enhance its human capital, as well as setting goals
and progressing programs to diversify work styles and help women advance their careers, improve employee
engagement, and practice health management.

■ Shareholder return policy
Improving ROE by more than cost of capital is a management
priority. Planning aggressive shareholder returns to ensure it
achieves FY3/26 ROE target of 10%
In February 2023, the Company announced a change in its shareholder return policy. Its ambitious new shareholder
returns policy targets a consolidated total return ratio of around 100% by FY3/26, and based on this policy, whichcalls for paying stable dividends with a DOE of over 6% and timely share buybacks, it forecasts dividend per shareof ¥44.0 (dividend payout ratio of 98.7%) in FY3/24 (up ¥2.0 YoY). The Company also repurchased 395,000 sharesof treasury stock for ¥399mn from May to October 2023. The total return ratio forecast is 147.69% in FY3/24. The
Company aims to continue increasing the dividend going forward by solidly achieving its results targets.

Dividend per share and dividend payout ratio
Dividend per share (left)
Total payout ratio (right)(¥)

Dividend payout ratio (right)
147.6%

80.0

111.3%

60.0

98.7%
74.3%

40.0
53.2%

75.8%

160.0%

120.0%

99.4%

80.0%
65.6%

20.0
21.5

21.5

23.0

FY3/20FY3/21

FY3/2242.0

44.0

FY3/23

FY3/24 E

0.0

40.0%

0.0%

Note: Past dividend values have been retroactively revised because of a 1:2 share split conducted at the end of September
2021
Source: Prepared by FISCO from the Company’s financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

20 21

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
https://www.fisco.co.jp

TANABE CONSULTING GROUP CO., LTD.
9644 Tokyo Stock Exchange Prime Market

29-Mar.-2024
https://www.tanabeconsulting-group.com/en/ir

Shareholder return policy

Also, following the TSE’s reorganization of its market categories in April 2022, the Company’s listing was transferredto the Prime Market. However, on the transfer-standards reference date (June 30, 2021), the Company did not meetthe standards for the tradable shares market capitalization amount (¥10.0bn) and the average daily trading value*(¥20mn). As of March 31, 2023, its tradable shares market capitalization amount cleared the standard at ¥10.46bn,
while the average daily trading value also cleared the standard as of December 31, 2023, the base date for the
calculation, and all items met the criteria for maintaining the listing. It intends to continue clearing these standards
through earnings expansion by implementing its medium-term business plan and raising its profile by aggressive
IR, SR, and PR activities.
*	Tradable shares market capitalization was ¥8.11bn and average daily trading value was ¥6mn.

We encourage readers to review our complete legal statement on “Disclaimer” page.

21 21

Disclaimer
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◾ For inquiry, please contact: ◾

FISCO Ltd.
5-13-3 Minami Aoyama, Minato-ku, Tokyo, Japan 107-0062
Phone: 03-5774-2443 (IR Consulting Business Division)
Email: support@fisco.co.jp