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

23-Mar.-2023
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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Overview of the FY3/23 1H results. . .............................................................................................................

02

2. FY3/23 results outlook.................................................................................................................................

02

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

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

03

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

05■Result trends------------------------------------------------------------------------------------------------------------------------------------------------------------------ 07
1. FY3/23 1H results overview................... ......................................................................................................

07

2. Financial condition and management indicators. .........................................................................................

12■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 13
1. FY3/23 results outlook.................................................................................................................................

13

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

14

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

18■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 21

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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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/■ Summary
Earnings continue to grow through one-stop support for largeand mid-size companies, from strategy formulation through tomanagement implementation and operations
TANABE CONSULTING GROUP CO., LTD. <9644> (hereafter, also “the Company”) is a management consulting
pioneer in Japan in its 66th year since its establishment with the management mission of “making ourselves and ourclients first-call companies - companies of choice now and 100 years into the future.” It is characterized by building
a management consulting value chain rooted in local regions nationwide that is able to provide one-stop support forcompanies’ management to address the specific and diversifying management issues of its customer companies,
from formulating strategies (upstream) through to management implementation and operations at work sites where
digital technologies are used (midstream and downstream). A feature and a strength is that it is expanding its
customer base and realizing long-term contracts through a top management approach.
On October 1, 2022, the Company transitioned to a pure holding company structure and at the same time, itchanged its corporate name to the TANABE CONSULTING GROUPCO. LTD., while it continues to be listed on
the Tokyo Stock Exchange (TSE) Prime Market. All of the management consulting businesses that were managed
by the Company have been taken over by TANABE CONSULTING GROUP CO., LTD., the Company’s newly
established, wholly owned subsidiary. Also, Leading Solutions Co., Ltd., which provides digital shift support for
B-to-B companies’ sales, joined the Group in in October 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 ERP (Enterprise Resource Planning), joined in January 2021; and JAYTHREE, Inc., aprovider of branding, CX (customer experience) design, and marketing DX services, joined in December 2021, andthe synergies generated by these companies are increasing through expanding the consulting menu and mutuallysending customers to each other. Also, in February 2023, the Company announced a capital and business alliancewith Kartz Media Works, Inc., whose strengths include strategic PR for large companies including foreign-affiliatedcompanies, overseas PR, and support for digital marketing strategy formulation and operations.
The Tanabe Consulting Group’s new structure

Source: The Company’s results briefing materials

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01 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Summary

1. Overview of the FY3/23 1H results
In the FY3/23 1H (April to September 2022) consolidated results, net sales increased 18.7% year-on-year (YoY) to¥5,386mn and operating profit rose 102.9% to ¥601mn to set new record highs. So the results were excellent andexceeded the Company forecasts (net sales of ¥5,015mn and operating profit of ¥300mn). The main factors behindthe higher sales and profits were that for net sales, progress was made in acquiring new customers by becoming
able to respond to various consulting needs through synergies between Group companies, and also as the sales
scale per company grew. All five management consulting domains (Strategy & domain, Digital and DX, HR, Financeand M&A, and Branding and marketing) achieved double-digit sales increases, and in particular, inquiries increased
from large, listed companies, mid-size companies, and local governments.
2. FY3/23 results outlook
For the FY3/23 results outlook, based on the progress made up to the end of 1H, the Company upwardly revised
the initial forecasts (net sales of ¥11,250mn and operating profit of ¥1,015mn) to net sales to increase 10.7% YoY to¥11,700mn and operating profit to rise 24.1% to ¥1,150mn. In the 3Q, the Company will transition to a pure holding
company structure and conduct branding and promotion investment, including in relation to its 65th anniversary,
while it also plans to accelerate investment in human resources, but these investments will be absorbed by theeffects of the higher sales. Despite the growing sense of uncertainty about the future of the economy, the situation
at the current time is that inquiries continue to be active, so it seems likely that the forecasts will be achieved.
3. Medium-term business plan
The Company’s results targets in its medium-term business plan are net sales of ¥15bn and operating profit of¥1.8bn in FY3/26. It intends to utilize its strengths, of a management consulting value chain that provides one-stop
support, from the management consulting upstream (strategy formulation) through to the midstream and downstream(management implementation and operations at work sites that utilize digital technologies), and providing services
rooted in local communities from its business bases in 10 major cities nationwide, in order to expand all five
management consulting domains. In particular, in the DX domain, in which demand is strong, it is considered to beaccelerating growth by further strengthening its M&A strategy, while its policy for human-resources recruitment is
to strengthen recruitment centered on mid-career hires. The number of employees will increase from 519 people
at the end of September 2022 to 800 people in FY3/26. The synergies generated by the M&A are also starting toappear in results, so going forward as well, at FISCO, we think it is highly likely that the Company’s earnings growth
will accelerate and it will achieve its medium-term results targets.
Key Points
Continues to grow based on its strength of a management consulting value chain able to provide one-stopassistance to company management• In the FY3/23 1H results, sales increased by double digits in all the management consulting domains, and sales
and profits rose and exceeded the initial forecasts.
• Has upwardly revised the FY3/23 results forecasts and the outlook is for net sales to achieve a new record high• Is making steady progress toward the achieving the FY3/26 targets of net sales of ¥15bn and operating profitof ¥1.8bn•

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02 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Summary

Performance trends
Net sales (left)(¥mn)

Operating profit (right)
1,150

12,000936

10,000

970

926

1,000

751

800

6,000
8,797

9,046

1,200

987

8,000

4,000

(¥mn)

10,572

9,394

11,700

9,213

600
400

2,000

200

0

0
FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23 E

Note: Consolidated values from FY3/20
Source: Prepared by FISCO from the Company’s financial results■ Business overview
Continues to grow based on its strength of a management
consulting value chain able to provide one-stop assistance tocompany management
1. Company overview
The Company, which was 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 ispromoting a “C&C (consulting & conglomerate) strategy” over a wide range of management consulting domains andassisting its customers’ sustainable growth by providing high quality consulting value to all its customers nationwide.
The main targets customers are the top management (presidents and managers) of large- and mid-size companies,
and features of the Group are that in the domains of “Strategy & domain,” “Digital and DX,” “HR,” “Finance and M&A,”
and “Branding and marketing,” it provides one-stop support, from strategy formulation through to management
implementation and operations, and realizes improvements to customers’ lifetime value (LTV)*. In terms of its
consulting style, it provides “team consulting” in which multiple professional consultants are selected and a team isformed that is tailored to the management issues facing each individual company.
*	LTV (Lifetime value): A business model in which long-term relationships are built with customers.

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03 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business overview

The Company’s management consulting value chain

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
features and strengths of the Company include that it is the only company in this industry that conducts business ina firm format rooted in each region and it is able to provide management consulting services tailored to each region.
Moreover, by establishing the Strategic Comprehensive Institute, which plans and directions 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 and other corporate
functions in both the Osaka and Tokyo head offices, the Company is aiming to enhance its support functions tocompanies nationwide.
The Company has recently been conducting M&A as one of its growth strategies, and three companies withwhich synergies 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 medium-sized 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.

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 listed corporate groups. The background to and objective of it joining
the Group are to strengthen the functions of existing services and to launch new businesses by combining theCompany’s management consulting knowledge with Growin’ Partners’ knowledge and expertise in M&A and DX
amid growing demand for M&A and management DX. For existing customers as well, they are aiming to improve
the added-value of the services provided to the customer companies of both companies through joint consulting
and personnel exchanges.

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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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business overview

JAYTHREE was made a subsidiary in December 2021 (investment ratio, 96.2%). It has professional human resources
including directors, creators, and designers, and its strengths include the creation of new value, such as for branding,
CX design, and marketing DX for customers that range from major companies to medium-sized companies. They
are working to strengthen the functions of existing services and to launch new services by combining the Company’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 it
started in business in 1986. 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
Kartz Media Works, which is scheduled to be made a subsidiary in February 2022 (planned investment ratio,
55.0%) has many employees who previously worked in the media and global human resources who serve as “PRconsultants,” 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 andPR” and “branding” domains, and in this situation, the policy is to combine the Company’s findings and expertisein management 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.
Forming the Group from these four companies strengthens TCG’s management consulting value chain, and thisconstitutes a greater level of strength, and one not possessed by other companies. The Group will be able toaccommodate needs nationwide related to business succession, business model transformation and businessrebuilding, DX and productivity improvement, CX design, and various consulting needs, such as domestic andoverseas PR, which are expected to accelerate going forward, and with its target customer range expanding fromlarge companies to mid-size companies, in FISCO’s view, its growth potential has risen sharply.

Company to sustain growth by building up a customer base forservices on high unit price, long-term contracts, which account for
approx. 80% of net sales
2. Earnings growth model
The Company’s business model is characterized by having long-term contract services as its growth base, whichallows it to achieve sustainable growth by accumulating new customers for these services while adding in spot-type
products and services. Approximately 90% of total net sales are LTV-type (renewal/continuation rate of 70% or
higher) services and 80% are high-unit-price long-term contract services (generally six months or longer), and this areason for the Company’s high level of earnings stability. High-unit-price long-term contract services consist mainlyof team consulting services.
Looking at a breakdown of continuous-contract years, contracts one year or longer account for around 75%,
and contracts of five years or longer, for around 45%, so the Company is characterized by a high percentage ofcustomers with which it has built long-term relationships. It generally directs itself toward top management approachas a “business doctor” (providing team consulting methods that resolve the strategic and management issues facing
presidents and top management), which is likely what is responsible for its high continuation rate.

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05 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business overview

Model of stable earnings and growth

Source: The Company’s results briefing materials

As the customer creation model, in addition to introductions from its existing customers and partner financial
institutions, the Group creates contact points with new customers including providing digital marketing and holding
large-scale free online presentations, and as well as providing team consulting services, it continuously provides
services such as to the participants in human resources development seminars by industry and management
themes and by employee level, which becomes a flow that creates loyal customers. Among the new customers forteam consulting services, it seems that approximately 60% of them are companies that have participated in theseworkshops and various seminars. Moreover, since FY3/22 as the marketing strategy for the Group as a whole, it
has been launching specialist marketing websites to solve customer problems and using them to acquire leads(potential customers). Specifically, it has been launching a variety of specialist websites for DX, long-term vision andmedium-term business plan formulation, HR, business succession and M&A, corporate finance and M&A, SDGs
management, and TCG REVIEW. It is acquiring leads through these websites and cases leading to a management
consulting contract are increasing. Group synergies are also being generated, for example Group company Leading
Solutions is responsible for developing the marketing website, while JAYTHREE is responsible for developing someof its content. In addition, the Group companies are actively holding joint presentations.

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06 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business overview

From customer creation through to LTV realization

Source: The Company’s results briefing materials■ Result trends
The FY3/23 1H results were excellent, with sales increasing by
double digits in all management consulting domains and higher
sales and profits that exceeded the initial forecasts
1. FY3/23 1H results overview
In FY3/23 1H consolidated results, the Company’s net sales totaled ¥5,386mn (+18.7% YoY), operating profit,¥601mn (+102.9%), ordinary profit, ¥606mn (+102.0%), and net profit attributable to owners of parent, ¥386mn(+78.4%). The results were excellent, setting new record highs and every item being higher than the initial Company
forecast.

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07 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Result trends

FY3/23 1H results(¥mn)
FY3/22 1H
Results

FY3/23 1H
The Company
forecasts

Ratio to sales

Results

Ratio to sales

YoY

vs. forecast

Net sales

4,536

-

5,015

5,386

-

18.7%

7.4%

Gross profit

2,141

47.2%

-

2,478

46.0%

15.8%

-

SG&A expenses

1,844

40.7%

-

1,877

34.9%

1.8%

-

Operating profit

296

6.5%

300

601

11.2%

102.9%

100.4%

Ordinary profit

300

6.6%

300

606

11.3%

102.0%

102.1%

Profit attributable tonon-controlling interests

-16

-

-

26

-

-

-

Net profit attributable to ownersof parent

216

4.8%

195

386

7.2%

78.4%

98.3%

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

Due to factors including the sharply rising energy prices and price increases triggered by the increase in geopoliticalrisk in Ukraine and the acceleration of the weak yen, the environment has been one in which the sense of uncertainty
about the future of corporate earnings has increased. However, the Group planned a business strategy to respondto the with- and after-COVID-19 eras and progressed a DX strategy, and net sales increased by double digits in all
the management consulting domains, including M&A support. It seems that the effects appeared of the initiatives
conducted in the last one or two years towards growth, including the joint development of a management consulting
menu and mutually sending customers between the Group companies, and acquisitions of potential customers
through the specialist marketing websites. In particular, the increase in inquiries from large listed companies, mid-size
companies, and local governments was noticeable.
Within the net sales, team consulting contract net sales increased 26.5%YoY to ¥4,048mn, and the average numberof contracting companies during the period rose 15.8% to 909 companies. Both were new records highs and its
percentage of total net sales increased from 70.5% in the same period in the previous fiscal year to 75.2%. Thiswas partially from the effect of the new addition of JAYTHREE, but also from the effects of the growth of net sales
and the numbers of contracting companies in the existing business companies as well, and every KPI was higher
than in the same period in the previous year.

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08 22

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

TANABE CONSULTING GROUP CO., LTD.

23-Mar.-2023

9644 Tokyo Stock Exchange Prime Market

https://www.tanabekeiei.co.jp/en/

Result trends

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

5,000

1,500
4,048

4,000

1,200
3,200

3,000
2,000

2,662

2,722

2,518

909
785

624

648

900
600

595

1,000

300

0

0
FY3/19 1H

FY3/20 1H

FY3/21 1H

FY3/22 1H

FY3/23 1H

Note: team consulting = monthly contract-type consulting (Strategy & domain, Digital and DX, HR, Finance and M&A, andBranding and marketing), while the number of companies is the average number of contracting companies during theperiodLeading Solutions results included in consolidation since FY3/21 1H
Growin’ Partners results included since FY3/22 1H
JAYTHREE results included since FY3/23 1H
Source: Prepared by FISCO from the Company’s financial results briefing materials

The gross profit margin declined from 47.2% in the same period in the previous fiscal year to 46.0%, but this was
mainly because a subsidiary that had previously recorded consultant labor costs (approximately ¥90mn) in SG&A
expenses changed to recoding them as sales costs, and in actual terms it is considered to have risen. SG&A
expenses increased ¥32mn YoY due to the investments in human capital and branding.
Due to the effect of the higher sales, the operating profit margin rose considerably, from 6.5% in the same period in
the previous year to 11.2%. The 1H operating profit margin exceeded 10% for the first time in four periods, since
FY3/19. At that time, the results were standalone values and subsequently the profit margin temporarily declined in
the processing of increasing subsidiaries through M&A, but it appears that the subsidiaries’ profitability has improved
from the effects of the synergies. At both Leading Solutions and Growin’ Partners, sales and profits increased in linewith the Company forecasts, while in JAYTHREE also, which was made a subsidiary in December 2021, it seems
results trended in line with the forecasts. As a result of the growth of earnings in these subsidiaries, profit attributable
to non-controlling interests improved to ¥26mn (a loss of ¥16mn in the same period in the previous year), which was
the main reason why the increase rate of net profit attributable to owners of parent was below that of ordinary profit.

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09 22

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

TANABE CONSULTING GROUP CO., LTD.

23-Mar.-2023

9644 Tokyo Stock Exchange Prime Market

https://www.tanabekeiei.co.jp/en/

Result trends

Consulting sales by domain
FY3/22 1H

FY3/23 1H

(¥mn)
1,500

1,384
1,201

1,200

1,055
854

900

808

986

910
763

925
732

600

300

175 1240Strategy &domainDigital and DXHRFinance and M&A

Branding &marketing

Promotion
products

Source: Prepared by FISCO from the Company’s financial results(1) Strategy & domain
In Strategy & domain, which supports the formulation of business strategies and visions, the innovation necessary
for sustainability management, SDGs, and optimized business model reforms such as for new businesses,
net sales increased 15.2% YoY to ¥1,384mn. In terms of the strongly performing order themes, “Formulating
and progressing a medium- to long-term vision” increased 17.8% and “Implementing SDGs” rose 12.3%, andin particular, the increase in large-scale contracts for large companies, listed companies, and regional local
governments was noticeable. For regional local governments, since FY3/23 the Group has been forming specialist
teams to actively work on initiatives, and as a result, it has obtained consulting projects for regional industrial
promotion projects and public services. The Group’s policy is to utilize its strength, of developing business basesin the major cities nationwide, to further strengthen in the public field in the future as well.
As new consulting services, the Group is developing and promoting “Consulting support for building a CX strategy”
and “Consulting support for formulating an equity story toward an IPO,” and as measures to acquire leads, it
has launched the “SDGs specialist website” and also the “Vision and medium-term business plan formulation
specialist website.”(2) Digital and DX
In the Digital and DX domain, which provides supports from the formulation of a DX strategy and vision to thespecific implementation and execution of four DX domains (business models, marketing, management, andHR), net sales increased 23.5% YoY to ¥1,055mn. As well as the new addition of JAYTHREE’s sales, sales
trended strongly at Growin’ Partners and the other business companies. BPO (support for financial work, suchas financial statements) and ERP replacement projects for large listed companies and government organizations,and projects for the planning of branding strategies for large listed companies, regional listed mid-size companies,
and government administrative corporations, and also for producing branding websites as the output of thisplanning, performed well.

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10 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Result trends

In terms of the strongly performing order themes, “Management DX (DX vision, ERP replacement, etc.)” increased
13.6% YoY and “Marketing DX (digital marketing website production, etc.)” rose 10.2%. Among mid-sized andsmaller companies, there remain many companies that have still not introduced ERP while only a few of suchcompanies have IT human resources, so the potential demand in this area is huge and the busy businessconditions are continuing. As new consulting services, the Group has developed and is progressing “Consulting
for building a DX vision & roadmap” and “Consulting to support concepts to introduce IT.”
Four DX domains

Source: The Company’s results briefing materials(3) HR
In the HR domain, which defines the human resources portfolio (the optimal distribution of human capital, decisions
on organizational development, etc.) based on the HR vision and provides a strategic human resources systemand education and training services derived from recruitment, development, activities, and employee retention,
net sales increased 12.7% YoY to ¥910mn. Leads from large companies and listed companies increased via the“HR strategy specialist website,” while results were strong for the implementation of human capital management,
which includes human capital strategic human resources and succession plans for large companies and mid-size
listed companies, and talent management. The number of team consulting contracts also grew.
As the strongly performing orders, “Building a human resources system” increased 28.8% while “Establishing an
academy (in-house corporate university)” grew significantly, increasing 89.4%. Amid the chronic labor shortage,
the situation is that recruiting, training, and retaining employees has become a major issue for companies’
management and each company is strengthening measures to improve their employee engagement, so demandis strong in the HR domain as well. “Academies (in-house corporate universities)” are a cloud-based service thatmakes it possible to educate and train company employees online, and demand from companies is increasing as
it has appeal points for the recruitment aspect (it has been introduced by more than 150 companies).
Other than the above, approximately 1,800 people participated in the human resources seminars “First Call
Company Forum 2022” through holding on-demand events in the metaverse format. Also, approximately 800
managers and executives participated in the “Next Leader Candidates Training School.”

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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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Result trends(4) Finance and M&A
In this domain, which provides one-stop services relating to business succession, strategic business expansion,
financial advisory (FA) including cross border, and M&A including due diligence and PMI, net sales increased 29.2%
YoY to ¥986mn. The number of leads acquired from large companies and listed companies increased via the“business succession and M&A strategy specialist website,” while the total number of team consulting contracts
also steadily rose. In particular, large-scale contracts increased, including for creating a holding structure andgroup management support for regional, listed, mid-size companies, the strategic reorganization of overseas
businesses for large regional companies, and building a consolidated financial system for large companies andlisted companies, which contributed to the increase in sales. Also, needs for “Overseas business development
strategy (including cross-border M&A)” in collaboration with alliance partners such as financial institutions, andbusiness succession and M&A seminars in collaboration with regional local governments, steadily increased. In
terms of the strongly performing orders, “Creating a holdings structure and group management” increased 4.8%
and “M&A (from strategy formulation through to FA, due diligence, and PMI)” rose 15.5%.
(5) Branding & marketing
In the branding and marketing domain, which provides one-stop services based on the purpose and management
strategy, from planning a communication strategy in order to improve CX at customers through to implementation
support and creative, net sales increased 26.2% YoY to ¥925mn.
Results were strong for creative and design for large companies (the beauty and cosmetics industry, food industry,
educational institutions, etc.), and branding and marketing (online x offline hybrid support, from SNS marketing ofproducts and services through to store promotions) for regional, listed, mid-size companies, and the number ofteam consulting contracts also increased. In terms of the strongly-performing themes, “Creative & design (SNSmarketing, planning of character tie-ups, etc.)” increased 8.5%.
(6) Promotion products
In promotion products, which provides tools to support companies’ promotion activities, net sales decreased
29.2% YoY to ¥124mn. The Group is conducting sales activities that prioritize profits so sales decreased, but
progress was made basically as planned. For promotion products’ net sales, in a typical year, sales of the Blue
Diary (notebook) tend to be concentrated in 3Q, but going forward, the intention is to level-out sales, including
by pushing forward the period of ordering activities.

Healthy financial standing with effectively debt-free management
and an equity ratio in the 80% range
2. Financial condition and management indicators
At the end of FY3/23 1H, total assets had increased ¥274mn on the end of the previous period to ¥14,099mn.
Looking at the main change factors, in current assets, cash, deposits, and securities (including deposit monies)
increased ¥206mn and accounts receivable-trade decreased ¥57mn. In non-current assets, property, plant, andequipment increased ¥15mn and goodwill decreased ¥29mn.
Total liabilities increased ¥145mn on the end of the previous period to ¥2,452mn, Non-current liabilities decreased¥28mn, but advances received increased alongside the rise in consulting contracts. Net assets increased ¥128mn
on the end of the previous period to ¥11,646mn. Although there was a dividend payment of ¥274mn, net profit
attributable to owners of parent of ¥386mn was recorded, so retained earnings increased ¥112mn.

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

12 22

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

TANABE CONSULTING GROUP CO., LTD.

23-Mar.-2023

9644 Tokyo Stock Exchange Prime Market

https://www.tanabekeiei.co.jp/en/

Result trends

Looking at the management indicators, the equity ratio was 80.2% and the Company continues to maintain it ahigh level, while it also has an abundance of cash, deposits and securities of more than ¥7.6bn and is maintaining
effectively debt-free management, so it can be judged to be highly financially sound. In terms of the uses of the
cash on hand, the Company’s policy is to allocate it to investment for growth (including M&A) and to returns toshareholders.
Consolidated balance sheet(¥mn)
Current assets(cash, deposits, and securities)

FY3/20FY3/21

FY3/22

FY3/23 1H

Change

7,732

8,889

9,329

9,594

264

6,936

8,078

8,199

7,605

-593

Non-current assets

5,237

4,516

4,495

4,502

6

Total assets

12,96913,405

13,824

14,099274

Current liabilities

1,642

1,418

1,856

2,030

174

375

556

451

422

-28

2,018

1,975

2,307

2,452

145

Non-current liabilities
Total liabilities

-

120

149

134

-15

10,951

11,43011,517

11,646

128

83.9%

83.1%

81.0%

80.2%

-0.8pt(Interest-bearing debt)
Net assets(management indicators)
Equity ratio

Note: FY3/23 1H cash, deposits and securities includes deposit monies of ¥800mn
Note: Consolidated values from FY3/20
Source: Prepared by FISCO from the Company’s financial results■ Business outlook
Has upwardly revised the FY3/23 results forecasts and net sales is
expected to set a new record high
1. FY3/23 results outlook
For the FY3/23 consolidated results, the outlook has been revised upward from the initial plan, with net sales toincrease to ¥11,700mn (+10.7% YoY), operating profit to grow to ¥1,150mn (+24.1%), ordinary profit to rise to¥1,150mn (+23.4%), and profit attributable to owners of parent to increase to ¥720mn (+19.1%). Net sales are
forecast to once again set a new record high.
FY3/23 results outlook(¥mn)
FY3/23

FY3/22Full-year
results

Initial plan

Revised plan

YoY

Revisedamount1H progress

10,572

11,25011,700

10.7%

450

46.0%

Operating profit

926

1,015

1,150

24.1%

135

52.3%

Ordinary profit

931

1,015

1,150

23.4%

135

52.7%

Net profit attributable to owners of parent

604

640

720

19.1%

80

53.7%

35.06

37.13

41.97

Net sales

Earnings per share (yen)Source: Prepared by FISCO from the Company’s financial results

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13 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business outlook

The sense of uncertainty about the future of the Japanese economy is strengthening, but needs are strong for
management consulting on themes including mid-term vision formulation and DX, human resources development
and personnel system reforms, and M&A. So it forecast that in the 2H as well, that sales will continue to trend
upward as the Group utilizes its strength of being able to provide one-stop support for company management, fromstrategy formulation (upstream) through to management implementation and operations at worksites that utilizes
digital technologies (from midstream to downstream). The rates of progress at the end of 2Q toward achieving
the full fiscal year forecasts were 46.0% for net sales and 52.3% for operating profit, which are above the average
rates of progress for the most recent 3 years (43.4% for net sales and 30.0% for operating profit)*. The Company’s
results peak in the 3Q, which is when sales of the Blue Diary are concentrated, and in a typical year sales tend to beconcentrated in the 2H. But in FY3/23 3Q, it plans to invest a total of ¥70mn to ¥80mn for branding and promotions
for its 65th anniversary and for the transition to a pure holding company structure. It also plans to actively invest in
human resources, and therefore the forecasts on a profits basis have been slightly kept down for the 2H.
*	Average rates of progress = 1H results total ÷ full year results total for the most recent 3 periods

On October 1, 2022, the Company transitioned to a pure holding company structure. The structure is that TANABE
CONSULTING GROUP, which became the pure holding company, is responsible for the corporate headquarters functions and internal audit functions, while the businesses are conducted by four companies of TANABE CONSULTING,
Leading Solutions, Growin’ Partners, and JAYTHREE as the business companies. The objectives of becoming aholding company are to aim for the optimal distribution and efficient utilization of management resources acrossthe Group, to grow earnings by leveraging synergies to the greatest possible extent, and to maximize the Group’s
enterprise value. Toward achieving the targets in the medium-term business plan (2021 to 2025) “TCG Future
Vision 2030,” which is currently being progressed, going forward as well the Company’s policy it to aim to improvethe value of the human resources in the entire Group by progressing a growth strategy including M&A, building a
top-management system required of companies listed on the TSE Prime Market, and developing the next generationof management and leaders in each of the business companies.

Is making steady progress toward achieving the FY3/26 targets ofnet sales of ¥15bn and operating profit of ¥1.8bn
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) —upstreamthat have been a traditional strength—further reinforce onsite management deployment and operation (midstream
to downstream) in the form of professional DX services that utilize digital technologies, continue to build a one &only management consulting value chain capable of all-around integrated support for corporate management, andaccelerate growth.

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

14 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business outlook

The Company’s numerical results targets for FY3/26, the plan’s final fiscal year, are net sales of ¥15bn, operating
profit of ¥1.8bn, ROE of 10%, and ROA of 15%, while with the FY3/22 results as the starting point, the targets forthe four-year CAGR are 9.1% for net sales and 18.1% for operating profit. For profitability, it has raised the targets
for FY3/22 from 8.8% to 12.0% for the operating margin and from 5.4% to 10.0% for ROE. It increases profitability
through growth centered on team consulting services that have high added value. The five-year CAGR from FY3/15,
which was before COVID-19, to FY3/20, were 3.6% for net sales and 5.3% for operating profit, and they continued
to grow steadily. But since FY3/20, the strategy has been to accelerate growth by focusing on fields with high growthpotential, such as DX assistance services, while also promoting an M&A strategy. As a result of the collaborative
efforts by the subsidiaries that joined the Group through M&A, including the joint development of a consulting menu
and mutually sending each other customers, the effects of Group synergies are also appearing in results, including
leading to an increase in the number of team consulting contracts and a rise in net sales per customer. So the Groupcan be highly evaluated for making steady progress up to the current stage.
Results targets(¥mn)
FY3/22
Net sales
Operating profit

FY3/23Plan

Results

Initial plan

Revised plan

FY3/24Plan

FY3/26
Plan

10,200

10,572

11,25011,70012,30015,000

9.1%

900

926

1,015

1,150

1,230

1,800

18.1%

8.8%

8.8%

9.0%

9.8%

10.0%

12.0%

ROE

-

5.4%

-

-

-

10.0%

ROA

-

6.8%

-

-

-

15.0%

480

495

560

560

640

800

Operating margin

Number of employees (people)

CAGR*

12.8%

Note: FY3/22- FY3/26 average annual growth rates
Source: Prepared by FISCO from the Company’s financial results briefing materials

As the breakdown of net sales, since FY3/23 the Company has categorized management consulting into 5 domainsof “Strategy & domain,” “Digital and DX,” “HR,” “Finance and M&A,” and “Branding and marketing,” to which it has
added “Promotion products” to disclose sales for 6 categories. For the FY3/23 net sales, it has upwardly revised
the initial net sales forecast by ¥450mn, upwardly revising the forecasts for all of the categories. Among them, it
increased the sales forecast for the HR field by ¥170mn. It seems that the main reason for this is that amid the risein companies progress sustainability management, consulting needs are increasing on the themes of establishing anenvironment to realize diverse workstyles and personnel system reforms. Also, it increased the promotion products
forecast by ¥100mn, but the main reason for this was that it previously set a conservative forecast.
“Digital and DX” is the domain in which sales are forecast to increase the most by FY3/26, targeting an approximately
double increase from ¥2,460mn in FY3/23 to ¥5,000mn. The other management consulting domains are forecast
to achieve single digit growth as their average annual growth rate. But the potential demand in each domain islarge, so depending on developments in the future, at FISCO we think it is fully possible that results will exceed
the forecasts. Conversely, “Promotion products” is a field that the Company is not focusing on and its forecast isconservative, to decrease from ¥650mn in FY3/23 to ¥500mn, and the outlook is that Blue Diary sales will continue
to trend from unchanged to a slight decrease. The business environments, sales forecasts, and strengthening points
in each domain are described below.

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15 22

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

TANABE CONSULTING GROUP CO., LTD.

23-Mar.-2023

9644 Tokyo Stock Exchange Prime Market

https://www.tanabekeiei.co.jp/en/

Business outlook

Sales target by management consulting domain(¥mn)
FY3/23
Initial plan

Revised plan

RevisedamountFY3/26 target

CAGR*

11,25011,700450

15,000Strategy & domain

2,750

2,760

10

3,000

2.8%

Digital and DX

2,450

2,460

10

5,000

26.7%

HR

1,550

1,720

170

2,200

8.6%

Finance and M&A

1,900

1,970

70

2,100

2.2%

Branding & marketing

2,050

2,140

90

2,200

0.9%

Promotion products

550

650

100

500

-8.4%

Net sales

8.6%

Note: FY3/23- FY3/26 average annual growth rates
Source: Prepared by FISCO from the Company’s financial results briefing materials(1) Strategy & domain
In “Strategy & domain,” steady growth is expected, with net sales to increase from ¥2,760mn in FY3/23 to¥3,000mn in FY3/26 and CAGR of 2.8%. This domain involves management consulting services, including building
medium- to long-term visions and business models, formulating management strategies such as for sustainability
management, and constructing growth strategies for each business. It corresponds to the upstream part of the
management consulting value chain, which is an area that the Company has excelled in since the past.
The sense of uncertainty about the future of the economy is strengthening, and in this situation, consulting needs
for strategic themes, including building a medium- to long-term vision and new business development, businessmodel reforms, a global strategy, and SDGs, have become deep rooted in large and medium-sized companies.
To meet these needs, the Company’s policy is to accumulate team consulting contracts by a top management
approach that is rooted in local communities.
(2) Digital and DX
In the “Digital and DX” domain, the forecast is for high growth, with net sales to increase from ¥2,460mn in FY3/23
to ¥5,000mn in FY3/26 for an average annual growth rate of 26.7%. In this domain, consulting needs are strongon themes including hybrid marketing through the real and digital in the with-COVID-19 era, the introduction andmanagement of ERP systems according to industry, productivity reforms through DX, UX/CX design, branding
DX, recruitment marketing, and supply chain management, and the Group is working to capture these needs.
In the last few years, an increasing number of companies have been working on management DX, but in regional
companies and mid-size and smaller companies, the situation is that there is a shortage of DX human resources
and that their DX initiatives are lagging behind compared to those of large companies in the Tokyo metro area. For
the Company, this is an area in which it can utilize its strength, of developing 10 business bases nationwide, and at
the same time, it is an area in which Group synergies can be leveraged, such as introducing customer companies
in these regions to business companies like Leading Solutions, Growin’ Partners, and JAYTHREE, which will leadto orders. So at FISCO, we think that going forward there remains plenty of room for growth.

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16 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business outlook

DX initiatives by size and region
Initiatives from before 2020

No initiatives

100%

90.7%

60%

78.3%

77.1%

80%
52.2%
47.8%

40%
22.9%

21.7%

20%

9.3%

0%
Tokyo metro area

Outside Tokyo metroarea

Large companies

Tokyo metro area

Outside Tokyo metro
area

Small/mid-sized companies

Source: Prepared by FISCO from “Information and Communications in Japan White Paper 2021,” Ministry of Internal Affairs
and Communications, Japan and the Company’s financial results briefing materials(3) HR
In the “HR” domain, the forecasts are for net sales to increase from ¥1,720mn in FY3/23 to ¥2,200mn in FY3/26
and an average annual growth rate of 8.6%. In this domain, the policy is to capture demand and increase sales,
including for a strategic personnel system that directly connects to a management strategy, an employee engagement system, the introduction and management of a HRDX system, human capital management, establishingacademies (in-house corporate universities), and academy cloud services.
Developing human resources who will be the source of growth is an important management issue for companies,
while in listed companies as well, in the future they will be required to disclose information on “human capital.”
Therefore, management needs are increasing even more for initiatives like human resources development programs and to achieve a work-life balance, and this was one of the factors behind the upward revisions to the
FY3/23 forecasts. The Group itself is developing and providing engagement survey tools to quantitively survey anddiagnose employee engagement, and these tools are useful to improve engagement. Potential growth is huge inthe HR domain, so M&A is also considered to be one strategy option.
(4) Finance and M&A
In the “Finance and M&A” domain, the forecast is for steady growth, with net sales to increase from ¥1,970mn in
FY3/23 to ¥2,100mn in FY3/26 for an average annual growth rate of 2.2%. In terms of the business environment,
managers are becoming older and, in this situation, business succession needs are increasing among mid- andsmall-size companies. In large companies as well, trends such as business reorganization and integration andbuilding a new global strategy for the after-COVID-19 era are becoming more active, which can be seen to be
major business opportunities. But aspects such as concluding a contract for a proposal have strongly fluid
elements in this domain, so the forecasts are conservative. Therefore, it can be said to be a domain in which thereis plenty of room for results to be higher than forecast.

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17 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business outlook

In this domain, the strategy is to increase synergies while mutually utilizing the resources of Growin’ Partners,
which targets large companies as its main customers, and TANABE CONSULTING, which targets companies
ranging from small businesses through to medium-sized companies. They are poised to focus on projects forwhich demand is forecast to increase, including for business succession-type holdings management models,building group management models, business-reorganization-type M&A, and cross border M&A projects.
(5) Branding & marketing
In the “branding and marketing” domain, the forecast is for steady growth, with net sales to increase from
¥2,140mn in FY3/23 to ¥2,200mn in FY3/26 for an average annual growth rate of 0.9%. The FY3/23 forecast
has been upwardly revised by ¥90mn from the initial forecast, so the average annual growth rate is less than
1%, but at the initial stage growth of around 2% was expected. In terms of the business environment, improving
brand power that will lead to maintaining and increasing the transaction prices of products and services has
been positioned as one important management strategy, and in this context, consulting needs in this domain are
expected to steadily increase in the future as well.
In this situation, the Company is aiming for stable growth from strengthening purpose branding (inner & outer)and corporate branding (PR and IR), reforms to customer communication models that improve CX (customer-experience value) and strengthening DX support services in the creative field, such as SNS marketing and design
promotions, while also aiming to improve added value. Among these initiatives, within the Group there is a shortageof resources for PR, branding, and global marketing, so it is proactively investigating M&A targets in these areas.

Accelerating growth by progressing five growth models andstrengthening employee recruitment
3. Growth strategy
To achieve its goal of “One & Only- Creation of TCG, the New Globally Unrivaled Consulting Group,” the Company
intends to promote deployment of five growth models and M&A strategy and pursue corporate strategy that realizes
sustainable growth.
(1) Implementing five TCG growth modelsa) Professional DX service model
The Company is aiming to grow sales by deepening its “management strategy formulation function,” which isits core value, and also by expanding the menu of “professional DX services” that utilize digital technologies
for support at work sites, while also initiating collaborations between Group companies. The services being
implemented in FY3/23 include DX Cloud (ERP system) for the construction industry, and also engagement surveys
and a personality and abilities judgment service.
For “professional DX services,” going forward as well, domains such as HR, PR, and global marketing will be
the priority areas, and it is considered that by having around 2 companies join the Group, the foundation will befurther strengthened and an unrivalled management consulting value chain will be constructed. It was announced
in February 2023 that Kartz Media Works, whose strengths include strategic PR for large companies including
foreign-affiliated companies, overseas PR, and support for formulating and managing a digital marketing strategy,
will join the Group. Within the FY3/26 sales target of ¥15bn, approximately ¥2bn is forecast to be from the effectsof M&A, but in fact, at FISCO we think that the M&A sales-increase effect will be even higher through realizing
Group synergies.

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18 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business outlookb) C&C development model
The Company is progressing a C&C (consulting & conglomerate) strategy. It involves explaining in simple terms
the flow of development for the management consulting domains, creating themes such as management needs
and issues newly created through changes to the societal environment or other causes, creating products fromthem as the team consulting menu, forming team consulting organizations (consulting segmentation) throughworkshops seminars, creating a consulting business as the next step, and widening the consulting domains,
including by conducting M&A. Going forward also, its policy is to expand the consulting domains by utilizing M&A.
The services being implemented in FY3/23 include “Support for succession plan formulation and management,”“Consulting to support concepts to introduce IT,” and the “DX Leader School.”c) Marketing model
For the roughly 80,000 large to mid-size companies (which include listed companies) that are the Company’s
target, the Company will work to acquire customers through its locally rooted regional strategy and uniquemarketing model (acquiring potential customers via specialist websites according to management consulting
domain, various seminars, workshops, etc.) It intends to achieve at least a 70% continuation rate for management
consulting contracts and add new customers for 35% of its sales goal. As the specialist websites according tomanagement consulting domain, it is managing a variety of specialist websites according to strategy relating
to “Long-term vision and medium-term business plan formulation,” “DX,” “HR,” “Corporate finance and M&A,”“Business succession and M&A,” and “SDGs,” and it is acquiring many potential customers through thesewebsites, which in turn is leading to an increase in the number of team consulting contracts. For the future, its
policy is to work to expand content.
In addition to the above, the Group is working to discover new consulting demand by strengthening follow-ups toexisting customers in the CRM consulting department. In FY3/23 1H, this led to an increase in average net sales
per company with a team consulting contract (up 9.2% YoY). For average net sales per customer, the Company
is targeting an annual increase rate of 10%.
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 in-house corporate university, etc.) to find new leaders in existing organizations andteams and cultivate these leaders into partners and thereby increase the number of partner personnel from 50
people to 100 people. Partner personnel refers to people who are capable of running a consulting team (5-10people). Cultivation of 100 partner human resources means that the Company is capable of having 100 consulting
teams. In particular, going forward its policy is to work to expand teams in local areas in order to contribute to therevitalization of local economies. Also, since April 2022, it has transitioned to an organizational structure that canaccelerate the creation of new teams and new leadership, and in the future, the development of partner humanresources is expected.
e) Academy model
In order to quickly develop professional human resources* (target of 2 years), the Group is expanding “TCG
Academies,” which is an education and training system that combines the online and the real. It is already starting
to produce results, including that after introducing an academy, the speed of training to become a chief consultant
is reduced from the previous approximately 5 years to 2 to 3 years. The areas include “Leadership academies,”“HR consultant academies” “Financial consultant academies,” and “CRM consultant academies.” Academies
are also created for each employee level, and the outlook is that the efficiency of human resources development
will further improve.
*	Professional human resources are human resources who have served as a chief consultant for at least 5 companies andwho are project leaders in a specific field.

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19 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

Business outlook(2) Human capital management
The Company is targeting 800 full-time consolidated employees by FY3/26, and going forward, it plans tostrengthen 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 businessoffices. Compared to previously, it is also widening the management consulting domains, so it seems likely that the
number of mid-career recruits will increase. Also, while it has not yet introduced Group recruitment, it is building
a route to introduce human resources to each Group company via the Company.
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. In addition to strengthening recruitment, the Company is aiming to achieve the target of 800 employees
by working to improve the retention rate of excellent employees through efficient human resources developmentusing TCG Academy Cloud and introducing a personnel system in which diverse human resources can be active,
and also preparing a work environment through investing in “Smart DX.” It is currently achieving an employee
retention rate of 89.0% (three-year average), which is a high level for its industry.

Trend in the number of consolidated employees and targets in themedium-term business plan(people)
900
800
700
600
500
400

300
200

390

495

519

560

458

FY3/21

FY3/22

FY3/23 1H

FY3/23

640

720

800

100
0
FY3/20FY3/24

FY3/25

FY3/26

Note: Consolidated values from FY3/20
Source: Prepared by FISCO from the Company’s financial results briefing materials(3) SDGs initiatives
Inquiries related to SDGs are increasing from many companies, and the Company is responding by developing
products such as SDGs deployment consulting, SDGs workshops, and SDGs education to support its client companies’ SDGs initiatives. The Company itself is working on environmental initiatives, such as reducing electricity
consumption in business offices and going paperless, and in addition, it intends to progress health management
and to strengthen the corporate governance system. It is currently at the stage of specifying the materialities andsetting the KPI, and going forward, it plans to engage in the SDGs as an important task of management.

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20 22

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

TANABE CONSULTING GROUP CO., LTD.

23-Mar.-2023

9644 Tokyo Stock Exchange Prime Market

https://www.tanabekeiei.co.jp/en/■ Shareholder return policy
For the FY3/23 dividend per share, plans to increase the dividend
for the second consecutive period and is also progressing initiatives
toward clearing the Prime Market’s listing standards
Since FY3/22, the Company’s shareholder returns policy is to target a total payout ratio of 50% and while implementing growth investment, to conduct diverse shareholder returns including not only by dividends, but also by
buybacks of treasury shares and other methods. At the initial stage, it planned to increase the FY3/23 dividend pershare by ¥1.0 YoY to ¥24.0, but based on the results and financial conditions, in September 2022 it announced that
it would increase the dividend by a further ¥2.0 to ¥26.0 (dividend payout ratio, 61.9%). The dividend yield basedon the closing price on December 7 (¥646) is 4.0%. The Company is aiming to continue to increase the dividend in
the future as well by steadily achieving its results targets.

Dividend per share and dividend payout ratio
Dividend per share (left)

Dividend payout ratio (right)

(¥)
74.3%

40.0

80.0%

65.6%
30.0

61.9%

53.2%

60.0%

52.2%

20.0

10.0

40.0%

21.0

21.5

21.5

23.0

FY3/19FY3/20FY3/21

FY3/22

26.0
20.0%

0.0

0.0%
FY3/23 E

Note: Consolidated values from FY3/20. Past dividend values have been retroactively revised because of a 1:2 share split
conducted in October 2021
Source: Prepared by FISCO from the Company’s financial results

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

21 22

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

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

23-Mar.-2023
https://www.tanabekeiei.co.jp/en/

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), among the standards tomaintain a listing on this market, the Company did not meet the standards for the tradable shares market capitalization amount and the average daily trading value*, so it is currently progressing measures to clear these standards
in the future. It intends to clear the standard for the tradable shares market capitalization amount through achieving
the targets in the medium-term management plan and also by working to raise the trading turnover rate, while its
policy is to increase the daily average trading value by working on improving the trading turnover rate and nameawareness. Toward improving the trading turnover rate, in FY3/22 the Company abolished the shareholder benefits
program and alongside this, it increased the dividend (shareholder returns according to the number of shares held),
introduced an interim dividend (enhancing opportunities for shareholder returns), conducted a share split (1:2), andconducted liquidity negotiations with holders of non-tradable shares, while in addition, in FY3/23 it plans measures
including effectively utilizing treasury shares, introducing a transfer-limit share remuneration system for directors
and employees. (At the end of September 2022, its treasury shares holding rate was 2.0% from holding 353,000
shares). Toward improving name awareness, the Company is utilizing SNS to actively disseminate IR information andworking on strategic PR activities (PR, advertising, etc.) In addition, it intends to enhance IR in FY3/23, including by
the timely disclosure of new materials and creating English language versions of financial-statement materials, andquickly creating transcripts (Japanese and English language versions) of financial results briefings.
*	The standard for the tradable shares market capitalization amount is ¥10bn and the Company’s amount is ¥8.11bn, while
the standard for the daily average trading value is ¥20mn and the Company’s value is ¥6mn.

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

22 22

Disclaimer
FISCO Ltd. (“FISCO”) offer stock price and index information for use under the approval of theTokyo Stock Exchange, the Osaka Stock Exchange and Nikkei Inc.
This report is provided solely for the purpose of offering information, and is not a solicitationof investment nor any other act or action.
FISCO prepared and published this report based on information which it considered reliable;
however, FISCO does not warrant the accuracy, completeness, fitness nor reliability of thecontents of this report or the said information.
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mentioned in this report may increase or decrease in value or lose their value due to influence
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This report has been prepared at the request of the company subject hereto based on theprovision of information by such company through telephone interviews and the like. However,
the hypotheses, conclusions and all other contents contained herein are based on analysis
by FISCO. The contents of this report are as of the time of the preparation hereof, and are
subject to change without notice. FISCO is not obligated to update this report.
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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