Bridge Report:（6058）VECTOR the fiscal year ended February 2023

Keiji Nishie Representative Director, Chairperson, and President	VECTOR INC. (6058)

Company Information

Stock Information

*The share price is the closing price on Mya 30. Each figure is based on the financial results for the term ended February 2023.

Earnings Trends

*Unit: million yen, yen. The forecasts are from the company. Net income is profit attributable to owners of parent. The same applies below. As the accounting policy was changed due to turning investment into business, the new accounting policy was retroactively applied to the financial figures in and before the term ended February 2022.

This Bridge Report reviews on the outlook of Vector Inc.’s earnings results for the fiscal year ended February 2023.

Table of Contents

Key Points
1. Company Overview
2. Fiscal Year ended February 2023 Earnings Results
3. Fiscal Year ending February 2024 Earnings Forecasts
4. Medium-Term Profit Plan
5. Management Strategies
6. Conclusions
<Reference: Regarding Corporate Governance>

Key Points

• Under the vision: “Making People Happy by Delivering Excellent Products, Services and Solutions to the World,” Vector supports corporate communication strategies in a multifaceted manner mainly in the PR and advertising business. With the competitive advantage of having a broad range of infrastructure for distributing products, the company aims to secure the No. 1 position in the global PR field as a “fast company in the advertisement field” targeting an advertisement market with a scale of 7 trillion yen.

   

• The sales in the term ended February 2023 were 55,200 million yen, up 14.8% year on year. The PR and advertising business, the press release distribution business, the direct marketing business and the investment business achieved double-digit growth in sales (in terms of sales to external clients). Operating income increased 22.4% year on year to 6.2 billion yen. While the PR and advertising business continuously grew, gain on sale higher than loss on valuation was recorded in the investment business. Advertisements were proactively posted in the press release distribution business. While the company invested in advertising such as television commercials in the press release distribution business and upfront investments in development and advertising were made in the new business “JOBTV,” the PR and advertising business drove the performance and both sales and profit considerably exceeded the forecast.

   

• For the term ending February 2024, the company forecasts sales of 63 billion yen, up 14.1% year on year, an adjusted operating income of 7.2 billion yen, up 15.7% year on year, and an operating income of 7.1 billion yen, up 14.1% year on year. Sales and profit are forecast to be higher in the second half of the term as a large budget for advertising will be used in the direct marketing business from the beginning of the term like in the previous term, gain on sale of shares the company owns is expected in the second half, etc. However, is it projected that the main PR and advertising business will certainly and steadily capitalize on the demand from clients and keep up a favorable performance. Regarding the direction of their management, Vector intends to brush up all segments and elevate the synergy between different segments based on the robust business foundations of their main business. The company plans to pay a dividend of 25.00 yen/share, up 6.00 yen/share year on year. The expected payout ratio is 29.8 %.

   

• The PR and advertising business, which is the mainstay, is performing favorably. As there have been doubts regarding how effective it is to merely post an ad, Vector demonstrates the strength of “PR,” which advertising agencies lack, and they have been certainly capturing the budget available on the advertising market until now from the viewpoint of cost performance. They used to expect an average spending per client from 50 million yen up to maximum 100 million yen, but now they anticipate further growth.
• We would also like to pay attention to the increase in the numbers of participating enterprises and registered students in the recruitment matchmaking platform “JOBTV.” While there are other services using videos for employment matchmaking, only Vector’s service allows job seekers to create a video. It is expected that generative AI such as ChatGPT will significantly change all kinds of scenes in everyday life and as it is assumed that CVs and professional resumes will be commonly created by AI in regard to job hunting as well, it is expected that the value and importance of a video which allows for the demonstration of one’s personality instead of a uniform resume created by AI will dramatically elevate for both the job-seeking applicants and the selecting enterprises, and it can be considered that it will constitute a powerful factor that differentiates Vector from other companies.

   

1. Company Overview

Under the vision: “Making People Happy by Delivering Excellent Products, Services and Solutions to the World,” Vector supports corporate communication strategies in a multifaceted manner mainly in the PR and advertising business. With the competitive advantage of having a broad range of infrastructure for distributing products, the company aims to secure the No. 1 position in the global PR field as a “fast company in the advertisement field” targeting an advertisement market with a scale of 7 trillion yen.

1-1 Corporate History

Established in March 1993 by Mr. Keiji Nishie (Founder and Representative Director, Chairperson, and President）for the purpose of operating sales promotion business. To conduct businesses with higher growth potential, the company shifted to a business structure centered on the PR business in April 2000 and began to aggressively operate its business with the goal of becoming the No. 1 company in the PR industry. He has established various companies to support PR from a wide range of aspects. Furthermore, in recent years, the company has been continuously expanding its services and strengthening its structure to provide comprehensive support for corporate communication strategies, beyond the conventional field of PR services.
Listed on the Mothers of Tokyo Stock Exchange in 2012. In 2014, the company stepped up to the First Section of the Tokyo Stock Exchange. In April 2022, the company got listed on the TSE Prime Market.
They ranked first in Asia and seventh globally on a worldwide PR company ranking in 2023.

1-2 Management Philosophy

The company's vision is “Making People Happy by Delivering Excellent Products, Services and Solutions to the World.”
In addition, the company presents Vector's Rock, a list of thoughts and ideas employees should have and actions they should take.

1-3 Business Environment

According to 2022 Advertising Expenditures in Japan (DENTSU INC.), total advertising expenditures in Japan in 2022 (January-December) increased 4.4% year on year to 7,102.1 billion yen, exceeding the amount in the year 2019 before the outbreak of the coronavirus crisis and hitting a record high (7,019.1 billion yen in 2007) ever since the estimation was started in 1947.
The overall advertising market grew especially owing to the expenditures stemming from favorable Internet advertising against the backdrop of the digitalization of the society. Out of Internet advertising, Vector expects that the market of video advertisement will expand dramatically as the commercialization of 5G has made it possible to convey richer content than before by improving communication speed and marketing strategies using video content will increase.

(Produced by Investment Bridge)

1-4 Business Description

The company engages in PR and advertising, press release distribution, video release distribution, and media CMS businesses that provide comprehensive support for corporate clients' communication with consumers using the media. The company also engages in the direct marketing business, which focuses on online sales of goods; the HR business, which provides cloud services for personnel evaluation; and the investment business, which invests in venture companies to support their growth.
The basic principle is having a PR retainer contract（cases in which a monthly fee is charged when the contract period is 3 or more months）. Based on this contract, the company provides a variety of advertising and PR methods owned by the group. The company is currently working on about 2,600 projects a year.

(Produced by Investment Bridge)

The group consists of 46 companies, including Vector Inc. Subsidiaries are responsible for providing services to customers, and Vector Inc. collectively manages various administrative functions for the entire group, including corporate planning, human resources, general affairs, legal affairs, finance, and accounting.
From FY23/2 the fund business was renamed to the "investment business" in conjunction with the commercialization of investments made in the investment venture business, and the media business will be renamed as the "media CMS business" to better reflect the actual business situation.

(1) PR and advertising business
In addition to its conventional public relations services, the company offers consulting services to support PR for clients' products and services through strategic PR, which utilizes PR in the advertising and publicity fields. The company also sells advertising through IoT signage services using tablets installed in taxicabs. Most of the work is provided to clients through group companies, each of which has its own specialties such as existing media, blogs, and social media, and operates in different areas such as Japan, China, and ASEAN countries.

(Taken from the reference material of the company)

(2) Press release distribution business
In response to publicity requests from clients, the company distributes information about client products and services as press releases and is operating a platform business that connects companies and consumers through press releases.
The number of companies using the press release platform PR TIMES is over 79,000 making it the No. 1 platform in Japan, used by 53% of listed companies.

(Taken from the reference material of the company)

(3) Video release distribution business
The company converts news about clients' companies, products, and services into video content and distributes the video to appeal to the target audience via the Internet.
The company has produced and distributed a cumulative total of more than 3,500 videos since the service was launched in 2015.
Capturing the change in communication methods due to the impact of the novel coronavirus, the company has developed a new video-based service, Sales Video Analytics, which it began offering in January 2022. Sales Video Analytics is the first SaaS model product that uses the power of video and data for DX in sales activities.

(Taken from the reference material of the company)

(4) Direct marketing business
The company operates the D2C (Direct to Consumer) business, which develops and sells health and beauty-related products and services via the Internet. The company offers the “Vitabrid C” series, which is one of their core products, and the cumulative sales volume exceeds 13 million items.
The company is also generating synergies by utilizing the knowledge and experience gained from its own D2C business for its PR and advertising business.

(Taken from the reference material of the company)

（５）Media CMS business
They are supporting enterprises in content marketing, focusing on the acquisition of owned media utilizing know-how.
They aim to increase recurring revenues and build even more robust revenue foundations by selling CMS while acquiring owned media.

(Taken from the reference material of the company)

(6) HR business
The company provides consulting services to companies to support the installation and operation of HR evaluation systems and HR evaluation cloud services.
They are proceeding with building stable revenue foundations, increasing the ratio of recurring revenues by raising the retention rate by reinforcing the sale of SaaS solutions and elevating client satisfaction.

(Taken from the reference material of the company)

(7) Investment business
The company invests in venture companies to support their growth. In addition to the investment, the company provides PR and IR support to help increase corporate value. In addition, by transforming invested firms into subsidiaries, the company will back up their capital aspects and accelerate their growth, with the aim of conducting an IPO early and earning profit on sale.
Twenty-nine companies, including PR TIMES and its subsidiaries, have gone public so far.

(Taken from the reference material of the company)

1-5 Characteristics, Strengths, and Competitiveness

Extensive infrastructure for distributing products
There are a wide variety of ways for companies to popularize their new products and services, including the rapidly expanding Internet, mass media (TV, newspapers, magazines, and radio), events such as presentations and press conferences, and in-store sales promotions.
On the other hand, because of the high degree of division of labor in the advertising industry, when companies try to use each method, they have to place orders with different companies, which is time-consuming and expensive in many cases.
The company, on the other hand, has a group of 46 companies that provide a wide range of infrastructures necessary for promoting products and can provide one-stop services, thereby reducing costs. The company receives many orders from major advertising agencies, and rather than competing with them, they are differentiating their areas of expertise.
Another of the company's strong competitive advantages is its ability to propose and provide advertising and PR methods that match the needs of companies and the characteristics of their products and services, based on accurate consulting.

2. Fiscal Year ended February 2023 Earnings Results

2-1 Business Results

*Unit: million yen. Net income is profit attributable to owners of parent. The same applies below.

*This figure is created by Investment Bridge Co., Ltd. based on disclosed materials.
*▲ of expense account indicates that the expense has increased.

Sales and profits increased and exceeded plans, with both sales and operating income reaching record highs.
The sales in the term ended February 2023 were 55,200 million yen, up 14.8% year on year. The PR and advertising business, the press release distribution business, the direct marketing business and the investment business achieved double-digit growth in sales (in terms of sales to external clients). Operating income increased 22.4% year on year to 6.2 billion yen. While the PR and advertising business continuously grew, gain on sale higher than loss on valuation was recorded in the investment business. Advertisements were proactively posted in the press release distribution business. While the company invested in advertising such as television commercials in the press release distribution business and upfront investments in development and advertising were made in the new business “JOBTV,” the PR and advertising business drove the performance and both sales and profit considerably exceeded the forecast.

◎ Highlights of financial results

2-2 Trend by Segments

＊Unit: million yen
＊The following sales increase/decrease refers to sales to external customers.
＊Operating income is composed of the ratio of profit to sales.

（１）PR and advertising business
Sales and Profit grew
As the company implemented marketing measures while grasping the needs of the times, such as services in the digital field, the domestic business contributed to their overall performance, although the overseas business was affected by the novel coronavirus. In the JOBTV business, which provides a recruitment platform utilizing videos, an operating loss of 508 million yen was recorded due to upfront investments, including development costs and advertising expenditures, but it was offset by favorable domestic business, and both sales and operating income hit a record high.

Increase in sales and decrease in income
The press release distribution site “PR TIMES” is utilized by many enterprises as social infrastructure and the number of enterprises that use it exceeded 79,000 in February 2023. The company proactively invested in advertising such as television commercials in order to acquire more new clients.

Sales grew, and loss shrank.
Sales grew as a result of training sales staff and focusing on acquiring prospective clients. Deficit shrank due to curtailment of SG&A expenses.

（４）Direct marketing business

Sales and Profit grew
Since the company has invested in advertisement since the beginning of the term, it was able to have a larger number of customers than planned, so “Terminalia First,” a food product with function claims, sold well, and sales and operating income hit a record high.

（５）Media CMS business
Sales rose, and profit turned positive.
In order to establish a robust revenue base that will not be swayed by the external environment, the company transferred the personnel of the media business to the owned media business, to fortify the system of the owned media business.
As a result, they curtailed the acquisition of new projects based on tie-ups, which contribute to the company’s web media advertisement income, but managed to achieve growth in sales. Operating income moved into the black.

（６）HR business
Decrease in sales and increase in income
Profit hit a record high, although the company invested in advertising to increase new clients and in development to reinforce functions while reviewing the sale strategy and reinforcing the sales staff in order to enhance the sale of SaaS solutions.

（７）Investment business
Sales and Profit grew
A loss from valuation was posted in some invested firms, but the company sold some shares and posted a gain on sale, which contributed to the growth of sales and operating income.

2-3 Financial Standing and Cash Flows

◎Balance Sheet Summary

*Unit: million yen.

Total assets grew 4.7 billion yen from the end of the previous term to 36.3 billion yen, due to the increases in accounts receivable, goodwill, etc.
Liabilities augmented 5,187 million yen to 20.5 billion yea, due to the rise in ST interest bearing liabilities, etc.
Despite an increase in retained earnings, net assets dropped 400 million yen year on year as valuation difference on available-for-sale securities and non-controlling interests decreased.
Capital-to-asset ratio decreased 3.6 points from the end of the previous term to 35.6%.

◎Cash Flows

*Unit: million yen.

The cash inflow from operating and free activities shrank due to an increase in operational investment securities, an increase in deposits, etc. The cash position remained almost unchanged.

*This figure is created by Investment Bridge Co., Ltd. based on disclosed materials.

2-4 Topics

◎Progress of development of the job matching platform “JOBTV”
JOBTV, which completes the entrance to the job-hunting/recruiting process through video, is a service that solves problems faced by both job seekers and companies, utilizing video as the gateway to the recruiting process to achieve speedy matching.

In the job-hunting/recruiting process, job seekers have voiced concerns that “it is difficult to convey one’s true value through documents alone” and “it takes time and money to go to information sessions and interviews,” while companies have voiced concerns that “it is difficult to understand an applicant’s personality until the actual interview” and “it takes time from recruiting to hiring.”
With JOBTV, both job seekers and companies upload videos. Job seekers can easily search for company information videos with a design similar to that of major video streaming sites. The companies can also reduce mismatches by confirming their impressions of applicants based on the self-promotion videos uploaded by job seekers.

Since the service was launched in November 2021, more than 1,000 companies have participated.
The number of registered students exceeded 150,000, thanks to their efforts to popularize it among students and the exposure to the media, such as TV.

“Interview Channel for Successful Applicants,” where prospective employees reenact a job interview, was established in December 2022, expanding the range of video support for job hunting offered by JOBTV from enterprise research to interview preparation.
Utilizing the PR know-how, it has accumulated over the years, the company intends to help revitalize the job hunting market by efficiently and clearly communicating the potential and value of companies and job seekers to better match job seekers with companies.

(Taken from the reference material of the company)

3. Fiscal Year ending February 2024 Earnings Forecasts

3-1 Earnings Forecasts

*Unit: million yen. The forecasted values were provided by the company. Adjusted operating income = Operating income + Expenses for the restricted stock compensation provided by the company

*Unit: million yen. The forecasted values were provided by the company. Adjusted operating income = Operating income + Expenses for the restricted stock compensation provided by the company

Projected increase in sales and profit
For the term ending February 2024, the company forecasts sales of 63 billion yen, up 14.1% year on year, an adjusted operating income of 7.2 billion yen, up 15.7% year on year, and an operating income of 7.1 billion yen, up 14.1% year on year. Sales and profit are forecast to be higher in the second half of the term as a large budget for advertising will be used in the direct marketing business from the beginning of the term like in the previous term, gain on sale of shares the company owns is expected in the second half, etc. However, is it projected that the main PR and advertising business will certainly and steadily capitalize on the demand from clients and keep up a favorable performance. Regarding the direction of their management, Vector intends to brush up all segments and elevate the synergy between different segments based on the robust business foundations of their main business. The company plans to pay a dividend of 25.00 yen/share, up 6.00 yen/share year on year. The expected payout ratio is 29.8 %.

*In step with the adoption of the restricted stock compensation system, the company has disclosed adjusted operating income as an index calculated by adding the expenses for the restricted stock compensation provided by the company to operating income. Expenses for the restricted stock compensation provided by subsidiaries are not added back to adjusted operating income.

Vector’s sales and profit have shown a strong tendency to concentrate in the second half of each term as the demand for advertising increases in step with the enterprises’ autumn and winter sales competition and new graduate employees start to fully contribute in the beginning of autumn. However, profit is projected to grow in the second half of this term even more significantly than in previous years as the company expects to record gain on sale of shares in the investment business in the second half and make investments in the advertising of the press release distribution business throughout the term (in the previous term, they started it in the second half).

3-2 Outlook for each Segment

PR and advertising business
The healthy domestic business continued to drive the performance and considerable growth is projected to continue, even when including investments in the JOBTV business.
The company aims to increase the number of retainer contracts, which is the basis of earnings, and increase average spending per customer through cross-selling.
Targeting 1,140 retainer contracts this term, the company will strengthen customer engagement. For the term ending February 2026, the company aims for 1,500 contracts.
They will strive to make the deficit of the overseas business shrink.
They will forge ahead with the development of business utilizing the know-how concerning the broadcasting of electronic ads via tablets installed in taxicabs and aim for further expansion of sales in the advertising business, in which sales decreased in the fourth quarter (December-February) of the last term impacted by seasonal factors.

Press release distribution business
They have been investing in advertising in order to increase the number of enterprises using “PR TIMES” since the second half of the previous term. As they are planning to continue with investment in advertising throughout the term, and also projected to make investments for overseas expansion, they are expecting a decline in profit year on year in the first half, but forecasting the profit to grow in the whole term.
While increasing the number of enterprises that use “PR TIMES,” they will work toward boosting the number of distributed releases by elevating use frequency.

Video release distribution business
They will work toward increasing the number of received orders while continuing with the training of sales staff, and aim to post a positive annual profit.
The average unit price rose in the fourth quarter of the previous term as the reinforcement of proposal-giving capability achieved through the training of sales staff proved to be effective. In this term, they will work toward increasing the number of distributed video releases by managing to receive orders from prospective clients they have acquired until now.

Direct marketing business
Sales in the fourth quarter of the previous term declined as the company restrained investments in the third quarter of the previous term in order to recover profit.
In this term, they will focus on the development of new products while continuing to make certain investments in the advertising of existing products.

Media CMS business
They will work toward reinforcing the functions of CMS and increasing the number of received orders concerning owned media to build stable revenue foundations.

HR business
While working toward the reinforcement of the sale system of SaaS solutions by revising the marketing strategy, they will further elevate the retention rate of consulting for operation and strive to increase ARR and expand sales.

Investment business
While they recorded gain on sale of shares owned in the first half of the previous term, in this term they are expected to sell shares owned in the second half, while taking into account the trends of the stock market.

（Adjusted Operating Income Plan by Segment）

*Unit: million yen. The forecasted values were provided by the company. Adjusted operating income = Operating income + Expenses for the restricted stock compensation provided by the company

*Unit: million yen. The forecasted values were provided by the company. Adjusted operating income = Operating income + Expenses for the restricted stock compensation provided by the company

4. Medium-term Profit Plan

4-1 Profit Plan

Forecasts for EBITDA and operating income until the term ending February 2026 are as follows.（expenses for the restricted stock compensation provided by the company have been added to both）。
They will be updated, when necessary, based on future market conditions and actual results.
The company aims to make continuous improvements to achieve an ROE of 25%.
The company will return profit to shareholders with a payout ratio of around 30%.

4-2　Capital allocation

The company will allocate the cash gained from operating activities and interest-bearing liabilities to investment for growth to boost their growth.

(Taken from the reference material of the company)

4-3 Vector Group Business Concept Chart

The company aims to support the growth of client companies through the four business areas of PR COMPANY, which aims to help companies promote their products, HR COMPANY, which provides support in the areas of human resources and recruitment, COMPANY FACTORY, which creates new businesses, and INVESTMENT, which grows investment business, with the aim of achieving a continuous expansion of the corporate group.

(Taken from the reference material of the company)

5. Management Strategies

(1) Vision and ideal state
Vector was selected as the No. 1 PR company in Asia 2022, No. 7 PR company in Global, according to a global survey on PR.
It has set a new goal of occupying the No. 1 position in the global PR field.
The scale of the domestic PR market is expected to be 100 billion yen, but the company aims to become a fast company in the advertisement field, targeting the global advertisement market, whose scale is estimated to be 7 trillion yen, to expand its domain further.

A “fast company in the advertisement field” implies that it will trigger the revolution of the advertisement industry like a fast fashion company in the apparel industry, with low cost, middle quality, and speedy business.
In addition, the company aims to become “a disrupter in the advertisement field.”
Namely, it is aimed as a player that destroys the order and business models of the existing industry, by utilizing digital technologies, including cloud computing, big data, IoT, and AI.

As mentioned in Section 1-3 “Business Environment,” while ads via newspapers, magazines, TV, and radio are on a decline, the advertising market in Japan has expanded to over 7,000 billion yen due to the growth of Internet advertising.
Under the vision: “Making People Happy by Delivering Excellent Products, Services and Solutions to the World,” Vector is currently at a stage of utilizing digital advertising originating from PR to efficiently spread products, services and solutions, and the fact that they can post news and content as an advertisement in addition to PR is considered to significantly differentiate the company from advertising agencies. And they are the only company that can provide a one-stop solution for the measures necessary to acquire prospective client companies.

(Taken from the reference material of the company)

(2) What is a “FAST COMPANY” in the advertising industry?
Vector executes a one-stop marketing strategy encompassing both the area of recognition in which they directly deliver “content” to the target while making use of “strategical PR” and “social networks” and the area of acquisition leading to purchase using “digital advertising.”
The capability to offer marketing measures that match the current trends well at less than one tenth of the conventional price is a significant characteristic and strength of Vector, which is a “FAST COMPANY.”

(3) Priority items
The company believe that the key areas of focus for strengthening the foundation of the "fast company" concept are 1．M&A, 2.VC × PR.

1.M&A
In order to support each client’s marketing strategy in a comprehensive manner, the company will accelerate M&A, and to expand the recipients of Internet advertising budgets, expand the digital marketing domain, which will become more important.

(Taken from the reference material of the company)

◎Basic policy concerning M&A
Vector intends to reinforce their FAST COMPANY concept, proactively promote M&A where synergy with their core businesses can be expected, and boost their organic growth based on effective M&A while aiming for discontinuous growth based on the following basic policy.

(Taken from the reference material of the company)

◎Examples of M&A
①Taking over the digital advertisement business from Terminal Inc.
In September 2022, the company acquired the digital advertisement business, which excels at designing strategies, from Terminal Inc. at a price of 1.1 billion yen.
As its forte, Terminal Inc. possesses the experience and know-how for operating its services in the digital advertisement business, and can give proposals for long-term sustainable projects from each client’s viewpoint.
Through the acquisition of this business, Vector became able to not only strengthen digital advertisement, but also provide digital measures for maximizing sales based on strategic PR.

② Turning Keyword Marketing Inc. into a subsidiary
In December 2022, they acquired Keyword Marketing Inc., whose forte is the operation of programmatic advertisements, as a subsidiary at approximately 1.2 billion yen.
They will work toward boosting the average spending per client by reinforcing digital aspects of the marketing strategies of their clients originating from strategical PR.

③ Turning Tryhatch Inc. into a subsidiary
In March 2023, they acquired Tryhatch Inc., whose forte is the support for attracting customers through social networks, as a subsidiary at approximately 400 million yen.
They will provide one-stop support for marketing challenges of clients who own a store, utilizing strategical PR and technology.

◎Expansion of the digital marketing domain
Considering the purchase process of consumers, the company will develop a business portfolio for covering respective marketing funnels*.
They will expand the coverage of each marketing funnel through M&A.
In addition, the company will expand the digital marketing domain, in order to establish a system for designing digital advertisement and promotional measures, utilize M&A, supporting processes from popularization to purchase in a one-stop manner.

(Taken from the reference material of the company)

*Marketing funnel
It means a schematic diagram of customers’ phases from recognition to purchase of products. Customers first recognize the name of a product, become interested in the product, think of purchasing it, and then actually purchase it. The number of customers in these processes can be expressed by a funnel, which is a tool shaped like an inverted triangular mortar. Accordingly, this is used as a marketing term.

2. VC x PR: PR capital that can provide both investment and PR support
Taking into consideration the growing number of start-up companies, Vector will work toward maximizing the effects of investment leverage through assistance with PR and IR, not only conventional financial support in regard to VC.
The company will increase customers, by covering not only leading companies, which are major clients, but also venture firms.

6. Conclusions

The PR and advertising business, which is the mainstay, is performing favorably. As there have been doubts regarding how effective it is to merely post an ad, Vector demonstrates the strength of “PR,” which advertising agencies lack, and they have been certainly capturing the budget available on the advertising market until now from the viewpoint of cost performance. They used to expect an average spending per client from 50 million yen up to maximum 100 million yen, but now they anticipate further growth.
We would also like to pay attention to the increase in the numbers of participating enterprises and registered students in the recruitment matchmaking platform “JOBTV.” While there are other services using videos for employment matchmaking, only Vector’s service allows job seekers to create a video. It is expected that generative AI such as ChatGPT will significantly change all kinds of scenes in everyday life and as it is assumed that CVs and professional resumes will be commonly created by AI in regard to job hunting as well, it is expected that the value and importance of a video which allows for the demonstration of one’s personality instead of a uniform resume created by AI will dramatically elevate for both the job-seeking applicants and the selecting enterprises, and it can be considered that it will constitute a powerful factor that differentiates Vector from other companies.

<Reference: Regarding Corporate Governance>

◎Organization type and the composition of directors and auditors

Updated on May 31, 2023

<Basic Policy>
Our company recognizes being thorough with corporate governance is the most important issue, from the viewpoint that it is indispensable to increase the efficiency and soundness of business administration and develop a fair and highly transparent management system, to achieve stable corporate growth and advance amid the rapidly changing business environment.
In addition, we will upgrade our system for improving the effectiveness of corporate governance, according to changes in the social environment and the enforcement of laws, regulations, etc.

<Reasons for Non-compliance with the Principles of the Corporate Governance Code>
We implement each principle of the Corporate Governance Code.

<Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)>
The information regarding the principles of the corporate governance code revised in June 2021 is described below.