*The share price is the closing price on March 7.
*The number of shares issued, ROE and BPS were taken from the brief financial report of FY 12/18.

 

*The forecasted values were provided by the company. Consolidated results from the term ended December 2016.

This report presents IBJ Inc.'s earning results for the Fiscal Year ended December 2018 and more.

 

 

IBJ is a leading company in the marriage-hunting industry, whose mission is to solve the problem of the declining birthrate. The number of members registered in the Japan Marriage Consulting Federation (IBJ Arranged Marriage System), which is Japan's largest network developed and operated by the company, is about 60,000. Its characteristics or strengths are the robust position supported by the business model of "Systems × Human Resources," the outstanding member base for enhancing the rate of successful business, the careful follow-up system for affiliated marriage agencies, and so on. With the aim of "producing 3% of the marriages in Japan" and "achieving sales of 30 billion yen and an operating income of 5 billion yen" in 2022, the company will strengthen its existing business, and create new markets for seniors, international marriage, etc. 【1-1 Corporate history】 Shigeru Ishizaka (the current president and representative director of IBJ Inc.), who had been concerned about the combination of the obvious trend of declining birthrate and the lack of measures to counter this trend, believed that in Japan there would be no real point offering the platforms for simple meeting up unless the couples ended up marrying, and developed and managed the marriage-hunting websites early and with a great success. Intrigued by his success, Yahoo Japan Corporation bought the Bridal Net stocks in 2003 but Ishizaka, who was also convinced that offering real-life opportunities helped by real humans was indispensable to generate married couples as opposed to the online-only services, carried out MBO with the current management team in 2006 to become independent from the Yahoo Japan Corporation Group and established IBJ Inc. to expand the Marriage-Hunting Business more dynamically. The company already had a base and the know-how for attracting customers online. At the same time as expanding its Marriage-Hunting Business online, the company opened the directly-run lounges in Ginza and Shinjuku in 2007, where the counselors were available to offer support, as the starting point of its Marriage Consulting Agencies Business. As Ishizaka anticipated, the company managed to generate more married couples than its competitors due to the human support offered at the point of matching. This encouraged the company to further build up the network of marriage agencies. Back then, there were more than 3,000 marriage agencies throughout Japan, but they were still mostly using telephones, mails and fax for communication with the members and setting up appointments for marriage meeting. Ishizaka saw this as a significant obstacle as it was costing an unnecessary amount of time and effort as well as causing mistakes to the operation of the agencies. So he built a system to hugely improve the agencies' administration capacities by adopting IT and proposed this system to the key matchmakers throughout the country. At first there was no understanding for this system and the company had a difficult time, so it offered this system as a platform to attract new members. This worked out and the marriage agencies were able to attract new customers every month constantly, making this platform an essential tool for them. The company then offered the use of the system to them again: this time, its advantage of significantly improving the administration capacities was appreciated and the number of member agencies started to grow nationally. Alongside the growing number of member agencies as well as the members, its marriage-hunting website "Bridal Net" became the largest social marriage-hunting media in Japan and the company experienced a rapid expansion, enabling it to be listed on JASDAQ (standard) of the Osaka Securities Exchange in 2012. In 2014, it changed the markets to the 2nd Section of Tokyo Stock Exchange and then moved onto the 1st Section of Tokyo Stock Exchange in 2015. 【1-2 Management philosophy】 The company's management philosophy is "to treasure a connection with all stakeholders" and its credo (code of conduct) reflects its desire as a company "to provide services that garner top customer satisfaction." Additionally, the company's brand statement is "an interpersonal encounter is arranged only by a human," which it tries to use in tandem with its management philosophy. 【1-3 Market environment】 <Situation Surrounding Unmarried People> * Rising percentage of unmarried people. The percentage of those unmarried people who do not have a partner is on the rise too. According to the research carried out by the Ministry of Internal Affairs and Communications, the percentage of unmarried people (aged 25-34) continues to rise. According to the "15th Basic Survey on Childbirth Trend (National Survey on Marriage and Childbirth) in 2015", among the unmarried people aged 18-34, the percentage of those without a partner is also rising year after year. *Marrying intentions of the unmarried: "intention to get married" still at a high level On the other hand, of the unmarried people aged 18-34, 85.7% of males and 89.3% of females say they want to get married, meaning the percentage of the unmarried who want to eventually get married is still high. While the percentage of those unmarried people who said they did "not intend to get married ever" has risen in both the males and females, the percentage of those who also said they may change their mind towards "intending to get married eventually" in the future was males and females at 44.1% and 49.8% respectively, meaning half of the demographic currently not intending to get married can also potentially shift towards marrying in the future. *Reasons for remaining single: "can't find an appropriate partner after 25" When asked why they would remain single, those young unmarried aged 18-24 listed many reasons for not having positive motives such as being "too young" and "not yet feeling necessity." However, among those aged 25-34, the percentage of those who say they "can't meet an appropriate partner" has risen, meaning the needs for meeting and chances to meet someone are significant. From the above data, it becomes clear that, although the percentage of the unmarried people as well as the unmarried people without a partner are on the rise, it does not mean that they are not interested in marriage, but rather they do not have the chances to meet the potential match. However, while there are clear market needs, it has also become clear from the user surveys that simply offering such opportunities (matching) is not enough to generate actual marriages, and it is essential that they be supported by the matchmaking support of the marriage agencies. In such a market environment, the company is leading the marriage-hunting market with its strengths such as the largest members' network in Japan and dedicated support from its full-time counselors. 【1-4 Business description】 There are four reported segments: "Affiliate and Media Service Business," "Community Business," "Marriage Consulting Agencies Business" and "Life Design Business." (1) Affiliate and Media Service Business This segment consists of the Affiliate and Media Service Business, the Marriage Consulting Federation Business, and the Franchise Business. ①Affiliate and Media Service Business As well as supplying its systems to roughly 1,700 marriage agencies (individual & corporate) affiliated with the Japan Marriage Consulting Federation (IBJ Marriage Arranging System), the largest network of its kind in Japan as mentioned above, the company also offers support in setting up new businesses and recruits for new affiliate members. In its Mid-term Management Plan, IBJ is aiming to produce 3% of all marriage formation in Japan from its own services. To achieve this, gaining new affiliated marriage agencies and training the existing affiliate agencies are indispensable, and the company is increasing the sales personnel as well as supplying the business methods to help the agencies to succeed. Its earning model is (affiliate fee 1,500,000 yen for newly affiliated marriage agency + system usage fee 20,000 yen x the number of affiliated marriage agencies) (in case of corporate affiliates, an affiliate fee starting from 3,000,000 yen is payable). ②Marriage Consulting Federation Business The company offers "IBJ System," a nationwide ASP-type network of marriage agencies, and services for managing meetings with prospective marriage partners efficiently on a nationwide scale, including the retrieval of candidate partners, the application for a meeting, the arrangement of dates and places for meeting with candidate partners, and the management of courtship. In addition, the company developed and is offering an app that enables the members of marriage agencies to search for candidate partners. ③Franchise Business The company has developed a franchise system for fortifying the infrastructure for matchmaking. (2) Community Business The company has been operating "Bridal Net," a website for supporting marriage hunting online, for 17 years. The average monthly fee is about 3,000 yen for both men and women. Compared with general matchmaking apps and services, serious male and female users tend to use this website, so a lot of sincere relationships are being fostered. The number of messages exchanged per month has exceeded 58,000, and about 20,000 people find a partner every month. From the term ending December 2018, the company started a new marriage-hunting support service with the dedicated staff members called "marriage concierge." The marriage concierges provide fine-tuned supports to the members that can only be given by humans even though the services are provided online - another of the company's strengths - such as how to write the profiles, and how to arrange the first date. Its earnings model is (monthly chargeable members x monthly fees: 3,000 yen). ・1-month plan: 3,980 yen ・3-month plan: 8,640 yen (2,880 yen per month) ・6-month plan: 12,960 yen (2,160 yen per month) ・12-month plan: 19,800 yen (1,650 yen per month) (3) Marriage Consulting Agencies Business This is composed of the Event Business and Marriage Consulting Agencies Businesses. ①Event Business The company organizes numerous events to which the members can attend with marriage-hunting in mind. The website "PARTY☆PARTY" is used to attract customers and the events are held at the company's 44 (as of the end of March 2018) own lounges both directly-owned and franchisees nationwide, and the events held outdoors are planned from time to time. Every month, about 4,000 parties are organized and about 60,000 members attend. Additionally, the fact that these parties are run by a company listed on the First Section of Tokyo Stock Exchange makes the attendees feel more secure. Its earnings model is (event attendance fee 4,000 yen [average] x the number of attendees). ②Marriage Consulting Agencies Business The company offers marriage-hunting support to its members at the "Marriage-Hunting Lounges IBJ Members," the 13 marriage counseling lounges located around the country. The number of their members is approximately 60,000, making the company the industry leader. This number includes the registrants of the roughly 1,700 marriage agencies affiliated with the Japan Marriage Consulting Federation (IBJ Marriage Arranging System), run by the company and also the largest of its kind in Japan. The largest member base in the industry as well as the strict joining assessment policy enable the company to offer higher quality meeting experiences to its members and the matching is carried out using its cutting-edge search system. Additionally, the service is characterized by the hands-on support given by the dedicated professional counselors to make marriage a reality. The counselors are also there to discover the members' charms such as personality and character that the members themselves may not be aware of, and they recommend potential matches to the members utilizing their experiences. By creating the encounters with a human touch and not just relying on the systems, the company is able to enhance the possibility of generating more marriages. An IBJ members' marriage formation is defined as the "engagement = the members decide to marry each other." Many major marriage agencies define the point at which the members start a relationship with marriage in mind as `marriage formation.' But the reason why the members use marriage agencies is because they are looking to get married, and the company is also keen to contribute to solving the problem of lowering birthrate in Japan as its social responsibility: this is why the company defines the point of engagement as marriage formation. For these reasons, the counselors offer themselves tirelessly to assist the members even to the initial meeting with each other's parents so that the marriage formation is reached securely. As a result, the number of members who reached marriage formation in the term ended December 2017 was 1,269, up 18.4% year on year, and the percentage of marriage formation was 51.5% (actual results from the main courses within the half year period between July and December 2017) achieving an extremely high success rate amongst the competitors, even though the company's definition of marriage formation is set more narrowly. It is quite normal that the members and counselors become fairly close given such a personal support relationship. This helps the councilors introduce the members to the post-wedding services offered as part of the company's Life Design Business such as honeymoon and insurances. Its earning model is the annual fee (approximately 180,000 - 240,000 yen per year) x the number of members. At the point of marriage formation, a marriage formation fee 200,000 yen is chargeable separately. (4) Life Design Business The company offers diverse services that arise from marriage-hunting, to the member base built up through its Marriage-Hunting Business, and this business is composed of the Wedding business and Travel Businesses. ①Wedding Business Wind & Sun Inc., a subsidiary since 2016, publishes "WIND AND SUN," the wedding information magazine with 25 years of history and also operates a website, both of which offer advertisement services to the wedding-related corporations. Using its website "Wedding Navi" and through the wedding salons, the company funnels the customers to its tie-up wedding parlors. ②Travel Business KAMOME CORPORATION, a subsidiary since 2016, designs honeymoons and overseas package holidays, and also sells the tours to major tour agencies and arranging custom made holidays. Additionally, in 2017, IBJ Life Design Support Corporation was set up together with Sony Life Insurance Co., Ltd to offer support at various stages of ones' life, from marriage-hunting, newly wed to child raising. The major revenue models are as follows. *Fee for transporting customers to ceremonial halls 10% of drink costs for wedding receptions, etc. (50,000 to 100,000 yen on average) × No. of guests transported *Honeymoon cost 500,000 to 700,000 yen on average × No. of contracts signed *Commissions for taking out insurance 30,000 to 200,000 yen × No. of contracts signed 【1-5 Characteristics and strengths】 (1) Solid position supported by the "Systems × Human Resources" business model The Japan Marriage Consulting Federation (IBJ Marriage Arranging System) operated by the company boasts over 1,700 affiliate marriage agencies and about 60,000 members, making it the largest of its kind in Japan. On top of this, the customer attraction capability and the service level of the company's marriage-hunting websites and matchmaking parties make the company the undisputed industry leader and it occupies an extremely firm position in the marriage-hunting industry. What brought about this position is the company's business model that combines the strengths of the systems and human resources. The highly skilled team of in-house engineers develops and operates the company's unique systems. Because of this, the company is able to make rapid improvements to its UI (user interface) such as the screen visibility and operability, reacting to the customer needs accurately, and UX (user experiences) such as improved matching accuracy by the effective utilization of customer database. This helps boost the satisfaction rates among the members as well as the affiliate agencies. As the company's brand statement says, the company believes that "an interpersonal encounter is arranged only by a human" when it comes to its marriage formation policies. This is why the company uses its own training program to train its own counselors who eventually will become indispensable in assisting each member personally and lead them to marriage formation. The support by counselors, who considers that success equals engagement, is a strength of the company that cannot be imitated by competitors. The company's overwhelming position built around this "Systems × Human Resources" business model is acting as a very high entry barrier to a potential new comer. (2) Overwhelming member base that helps businesses succeed = customer asset With the 60,000 IBJ Marriage Arranging System members, 60,000 monthly marriage-hunting party attendees and 28,000 monthly matchmaking meeting attendees, the company's customer base is always hovering above 100,000 members. The company is poised to take advantage of this "living member base" to expand numerous new businesses including the Life Design Business. Because it is operational nonstop, the company believes that the key is to raise the success rate to set itself apart significantly from the competitors. This nonstop-operation member base and its volume will never be shown on the balance sheets, but nevertheless form part of the company's significant customer asset. (3) Follow-up System for the Member Agencies The company prides itself in being able to offer fine-tuned marriage-hunting support to its members via its counselors. Likewise, the company gives a strong support to its affiliate marriage agencies to help them succeed with their business operations. Since 2007, the company has been trying and testing the numerous methods at its own directly-run lounges at various phases of matchmaking to marriage formation, such as customer attraction, person-to-person sales operations (member recruiting) and orientations for the new members. The most effective of these methods were put together and are being offered to the affiliated marriage agencies. Because this is not a manual but a collection of successful methods, the agencies are able to take the direct shortcuts towards succeeding in their marriage agencies businesses. 【1-6 ROE analysis】 Although ROE decreased in the Dec. 2018 term due to drop in margins, the company consistently achieves a high ROE. 【1-7 Shareholder return】 The dividend amount has been raised for 5 consecutive terms till the term ended Dec. 2017, and payout ratio is over 30%. In addition, the company set the following shareholder benefit program, to present complimentary cards and tickets according the number of shares held and the shareholding period.

 

 

IBJ announced a 5-year Mid-term Management Plan, whose initial year is the term ended December 2018. Based on the previous Mid-term Management Plan, the company plans to take ambitious measures for achieving new goals. (1) Regarding the new Mid-term Management Plan (2018-2022) ①Outline The company set the following objectives. IBJ will produce 3% of the marriages in Japan. Sales of 30 billion yen and an operating income of 5 billion yen In order to achieve the above goals, the company will expand the existing life design business and create the following three markets. ① Market using AI ② Senior market ③ International marriage market For attaining the objectives, the company has the following three policies: "To conduct strategic M&A of marriage hunting and ancillary businesses for accelerated growth" "Commitment to successful match making (marriage) and actively invest in people and systems for accounting for 3% of the total marriages in Japan" "To build a solid network continuing to expand all over Japan" ②Market environment As mentioned in the section "1-3 Market environment," the percentage of unmarried people and the percentage of those unmarried people who do not have a partner are increasing, but most of them have a willingness to get married, but lack the opportunities to encounter a future spouse. The marriage-hunting industry has met such needs, and the ratio of marriages actualized by marriage-hunting services has increased 2.4 times in three years. In addition, large companies entered this market one after another, reeling in potential customers mainly in their 20s, and it is expected that marriage-hunting services will be more commonly used. The current market scale is only about 66 billion yen, but it is expected that it will increase to about 1 trillion yen, as matchmaking services will be popularized. In addition to such growth potential, an increasing number of institutional investors and financial funds invest in matchmaking businesses as ESG investment from the viewpoint of solving the social problem of declining birthrate, and the market environment surrounding matchmaking businesses is expected to be healthy in the medium to long term. ③Measures from now on In the above-mentioned environment, the company will support customers for "marriage" and aim to increase customer satisfaction level. Leading marriage agencies, etc. define "success" as a sincere relationship in many cases, but in actual marriage hunting, people get engaged only after proposing to a prospective partner and obtaining the consent of parents. Namely, it is necessary to overcome various hurdles. The company supports couples appropriately by staff at each of stages from a meeting, courtship, proposal, to engagement, and defines "success" as the engagement after overcoming all of such hurdles. In addition to supporting customers while putting importance on marriage, the company will concentrate on the following measures and pursue further growth. ≪① To brush up its strengths≫ As mentioned above, the position of IBJ in the marriage-hunting industry has been made solid by the support services based on "Systems" and "Human Resources." The company will brush up respective strengths and enhance competitive advantage further. (Strengths of systems) Japan's largest arranged marriage network, which is composed of about 1,700 affiliated marriage agencies and about 60,000 members, is unrivaled. The system for search, bookmarking, application for a meeting with a prospective marriage partner, and communication with a matchmaker in charge is very helpful to both members and affiliated marriage agencies. This term, the company released the PARTY☆PARTY app, making it easier for people to start marriage-hunting activities. In addition, the company will upgrade the user interfaces (UI) of systems and user experience (UX), to increase user satisfaction level. (Strengths of human resources) The method for realizing marriage developed in 17 years of marriage-hunting support is the company's know-how for success, and considerably helps affiliated marriage agencies solve problems. In addition, the matchmaking network composed of about 1,700 agencies and about 3,000 matchmakers is a strong base that supports the company. In order to cement the relationships with affiliated marriage agencies and matchmakers, the company will operate IBJ Method Schools for diffusing the method for realizing marriage from directly managed shops to affiliated marriage agencies, pursue the fee structure that emphasizes support for marriage rather than just increasing members, and brush up the skills of human resources by establishing a personnel development division aimed at recruiting and training sales staff, dedicated counselors, and marriage concierges. ≪② To expand its business domain≫ In addition to the business domains of marriage-hunting and marriage, the company will offer multifaceted services at marital life stages in various scenes (including insurance, housing, childbirth, child rearing, travel, and second life). In the current Life Design Business, the company has started producing some results in transporting customers to wedding centers, promoting insurance, offering honeymoon plans, etc. based on its resources, that is, 6,000 married couples per year and about 60,000 members registered in IBJ Arranged Marriage System. It will produce further results. ≪③ Application of artificial intelligence (AI) to marriage-hunting services≫ The company actively utilizes artificial intelligence (AI). Firstly, the company will incorporate AI into the "IBJ method," a proven method for personnel development, and aim to increase the number of married couples per counselor. It rose from 1 per month in 2016 to 2.1 per month in 2018, and is expected to grow further. The expected effects of the incorporation of AI include the streamlining of the matchmaking process, the improvement of matchmaking accuracy, and AI robots dealing with the routine tasks, such as reception for marriage hunting parties, guidance, and explanation of parties. In the future, AI is expected to conduct a broad range of tasks, including the arrangement of meetings and the explanation of contracts, at the marriage agency "IBJ Members." On the other hand, human resources will be allocated to the care for members, which requires manpower, to increase customer satisfaction level. ≪④ Provision of services to seniors' communities≫ The company has engaged in business activities while recognizing that its social mission is to solve the declining birthrate, but it also considers that Japan needs to solve the problem of the isolation of elderly people. Then, the company will launch "Third Place Community Service" for helping seniors encounter partners such as travel, which is a popular hobby among seniors. Under the membership system limited to men and women aged 40 years or older, the company arranges sessions featuring common hobbies, such as travel, wine, and golf, plans and holds events, including parties and travel, while arranging one-on-one dinner. Rather than serving as a mere marriage agency, the company offer a new community so that customers will lead a pleasurable, fulfilling life. ≪⑤ Promotion of international marriage≫ The ratio of international marriages to all marriages in Japan has been in the order of 5%, and so a certain level of needs can be expected. In international marriages, South Korean grooms are dominant and account for 25.4% of marriages with Japanese women, and South Korean brides account for the third largest percentage of marriages with Japanese men. This is considered because of the popularity of K-POP and Korean stars in addition to the geographical conditions. The company thinks that it is meaningful to offer opportunities to encounter partners of different races and nationalities and increase marriages in Japan, as described below, K Village Tokyo Co., Ltd., which operates one of the largest Korean language schools in Japan, was reorganized into a subsidiary in order to provide international marriage services for Japanese-Korean couples.

 

 

Sales grew, but profit dropped due to active investment for growth. Sales were 11,818 million yen, up 24.9% year on year. Sales increased in all business segments. In the community business, the acquired company Diverse performed well, contributing to the increase in sales. Gross profit margin rose 3.6 points, exceeding the rate of sales growth. Operating income was 1,476 million yen, down 1.1% year on year. SG&A expenses augmented 44.0% year on year due to active investment for growth, which included human resources, opening new stores, and advertising. Profit was lower than initial forecasts, but surpassed the revised forecasts announced in Aug. 2018. The company played a part in 6,132 (about 1%) out of roughly 600,000 marriages in Japan. ①Affiliate and Media Service Business Sales and profit increased. Profitability improved by steadily increasing the number of marriage servicers in federation and registered member. This is because the company strengthened the support for the business operator to Affiliate and Media Service Business, increased the number of marriage meetings due to the enhancement of the capabilities of both the IBJ system (marriage meeting coordination system) app for members of the Japan Marriage Consulting Federation and head office administrative functions in the Marriage Consulting Federation Business. The number of affiliated agencies in the FC business grew as well. The number of affiliated consulting agencies continues to grow steadily, increasing by 269 year on year to 1,898. There are more than 60,000 members, with over 29,000 matched each month. The number of couples married in a single month was 1006 in December, breaking 1000 for the first time. ②Community Business Sales increased, but profit declined. The number of members increased significantly and profitability improved, thanks to the reorganization of Diverse into a subsidiary and by gaining new members by enhancing the functions through a redesigned website that offers more functions the renewal of the marriage-hunting website to focus even more on marriage-hunting. Costs rose due to spending for improving the quality of services provided and amortization of goodwill for newly consolidated companies. ③Marriage Consulting Agencies Business Sales increased, but profit declined. IBJ endeavored to improve profitability by increasing attendance turnout through quality improvements, such as promoting app downloads for the event business, increasing the number of events planned and held by the company in own halls, and planning externally-held events. In the Marriage Consulting Agencies Business, new stores were opened in Ueno Marui, the Dai Nagoya Building, Namba, and Kyoto. The company worked persistently towards increasing the number of members and successful marriages by improving the quality of their lounges (which have a fixed capacity). This included plans to increase marriage-hunting advisory and counseling staff, and implementing training to improve their skills (teaching them techniques to foster marriage). Expenses increased due to costs associated with opening new stores and increased staffing. The number of event attendances held and the number of lounge marriages both hit record highs. There were more than 100,000 downloads of the "PARTY☆PARTY" app. The average monthly number of marriages per counselor increased from 1.7 in the previous term to 2.1. ④Life Design Business Sales and profit increased. In the wedding business, IBJ increased the number of tie-up wedding parlors and the number of customers attending them. In the travel business, they planed package tours to destinations such as Latin America, North America, Northern Europe, the Philippines, and Papua New Guinea, and provided tours and arranged order-made tours to major travel agencies. With the increase in the number of couples married, orders have been steadily increasing. There were more than 200 honeymoon trips, and nearly 1000 weddings (982). Current assets grew 688 million yen from the end of the previous term, due to increases in cash and trade receivables. Noncurrent assets rose 653 million yen from the end of the previous term due to increases in goodwill and investment securities. Total assets were 7,562 million yen, an increase of 1,342 million yen from the end of the previous term. Meanwhile, total liabilities augmented 957 million yen from the end of the previous term to 4,006 million yen, due to increases in advance payments and long-term borrowings. Treasury stock increased, and net assets grew 385 million yen from the end of the previous term to 3,556 million yen, due to the exercise of share options and a rise in retained earnings. As a result, equity ratio fell 4.3 points from the end of the previous year to 46.6%. Purchase of property, plant, and equipment increased, and the deficit of investing CF grew. As a result of exercising stock options, proceeds from issuance of common shares decreased, and financing CF turned negative. The cash position improved. (4) Topics ◎K Village Tokyo Co. Ltd, which manages one of the largest Korean language schools in Japan, reorganized into a subsidiary In January 2019, the company accepted third-party allotment of shares from K Village Tokyo Co., Ltd., and reorganized them into a subsidiary. K Village Tokyo Co., Ltd. manages one of the largest Korean language schools in Japan, and also handles study abroad procedures for learners of Korean. IBJ now holds 55.1% of voting rights. (Background of subsidiary acquisition) Under the current mid-term business plan (2018-2022), the company aims to achieve sales of 30 billion yen and an operating income of 5 billion yen in 2022. As one of their growth strategies, the company is promoting the creation of the international marriage market. Among international marriages, Korean men account for the largest percentage (25.4%) of foreigners married to Japanese women, and Korean women are the third-largest percentage of foreigners married to Japanese men. IBJ will begin by providing opportunities for international marriage between Japanese and Koreans. Taking advantage of K Village Tokyo's reorganization into a subsidiary, the company will develop a comprehensive partnership in order to expand the life design business and strengthen its foothold in the international marriage market. The company expects K Village Tokyo Co., Ltd. to contribute to earnings from the following term, encouraging growth for the company group.

 

 

Double-digit increases in sales and profit Sales and profit are both expected to experience double-digit increases, with sales rising 27.4% year on year to 15,055 million yen and operating income rising 21.9% year on year to 1,800 million yen. The monthly average number of affiliated agency openings is projected to increase from 38.4 in 2018 to 50. The number of couples married is also expected to grow significantly, increasing from 6,132 in 2018 to 8,000. Total sales from group companies, such as Diverse, Sunmarie, and IBJ Wedding are estimated to rise to 4.5 billion yen, contributing to earnings. (2) Efforts in each segment ①Affiliate and Media Service Business By fully utilizing advanced AI technology to improve the matching rate, the company anticipates that the increased number of matches will result in a higher number of successful marriages. ②Community business The company aims to differentiate themselves through additions to "Bridal Net," including a function to introduce potential partners, and a system for affiliated agencies. ③Marriage Consulting Agencies Business Along with improving the UI for "PARTY☆PARTY," IBJ aims to raise their event turnout by strengthening their media presence. At their lounges, IBJ will work to cultivate new members and strengthen their position as a service brand. ④Life design business For honeymoons, in addition to branding their own original character, IBJ will strive to create new channels for developing customers. For weddings, the company aims to improve synergy with the marriage-hunting business in order to obtain even more customers. ⑤Subsidiaries Wind and Sun Co., Ltd. changed its name to IBJ Wedding Co., Ltd. in Jan. 2019. This will further strengthen ties between IBJ marriage-hunting and IBJ Wedding with the aim of linking the marriage-hunting and wedding industries. Kamome Co., Ltd. aims to acquire more customers by integrating management with IBJ Wedding. Diverse Co., Ltd. moved their headquarters to Tameike-Sanno in order to change the office environment and raise profits. Hapiraise Co., Ltd. changed its name to Sunmarie, Inc. in Jan. 2019, becoming part of a service brand that has been around for 37 years. The company expects the number of members to increase due to the strengthening of brand power. In addition to the Korean language school, K Village Tokyo Co., Ltd. will launch a K-Pop Fan Site business and a foreign human resources business (which carries out activities such as providing support for Korean men working in Japan).

 

 

In the previous report, we stated "As the 2018 term is positioned as a period of investment for the company, we would like to pay attention to how much sales will grow in the fourth quarter." In regards to this, both sales and profit surpassed the revised estimates announced in Aug. 2018. KPIs steadily improved, including the number of couples married, affiliated marriage agencies, and event attendances. As such, we look forward to once again seeing double-digit growth in both sales and profit this term. In the mid-to long-term, we would like to continue monitoring the company's progress as they create new markets for seniors and international marriages, aiming to "produce 3% of all marriages," "reach 30 billion yen in sales," and "achieve an operating income of 5 billion yen."

 

 

◎ Corporate Governance Report Last update date: December 27, 2018 <Basic Policy> Our company believes effective business management requires building quality, stable relationships with our stakeholders that continue for the long term, something achievable by employing a management style that is dynamic and flexible, continually improving our business management monitoring, and ensuring sound business practices and transparency. To this end, our basic philosophy concerning corporate governance involves making a concerted effort to continually improve compliance awareness alongside efforts to enhance our organizational framework, with a strong focus on risk management.