Medley (4480) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 sales increased 45% year-over-year, with strong performance in both HR PF and Medical PF segments, and EBITDA margin improved to 8% from 6% in Q3 FY2023.

• Net sales for the nine months ended September 30, 2024, rose 39.6% year-over-year to ¥21,642 million, driven by growth in both HR PF and Medical PF businesses.

• EBITDA increased 13.9% year-over-year to ¥3,484 million, while operating profit declined 7.2% to ¥2,358 million due to proactive investments for future growth.

• Cumulative Q3 sales and EBITDA are progressing in line with the revised full-year forecast, with 74% of sales and 75% of EBITDA targets achieved.

• The company continues disciplined investment in growth, supported by profitable businesses and a strong financial base.

Financial highlights

• Q3 FY2024 sales: JPY 6,935 million (+45% YoY); gross profit: JPY 4,315 million (+41% YoY); EBITDA: JPY 560 million (+JPY 257 million YoY); operating profit: JPY 96 million (-JPY 24 million YoY due to M&A-related amortization).

• Gross profit for the nine months was ¥13,993 million, up from ¥10,376 million year-over-year.

• Ordinary profit increased 15.6% year-over-year to ¥3,731 million.

• Companywide EBITDA margin improved to 8% (+2pt YoY), with Medical PF margin up 10pt YoY and HR PF margin at 36% (-2pt YoY).

• Operating cash flow remains strong, D/E ratio at 0.64x, and capital ratio at 48%.

Outlook and guidance

• Full-year FY2024 forecast unchanged: sales JPY 29,400 million, EBITDA JPY 4,640 million, operating profit JPY 2,950 million, profit attributable to owners JPY 3,000 million.

• Q4 companywide sales growth expected at 55% YoY, with HR PF sales up 60% YoY and EBITDA margin of 40-45%.

• Price increases of 10-15% planned for 1H FY2025 in response to regulatory changes.

• Basic earnings per share for the full year is forecast at ¥92.72.

• Mid-term targets: FY2029 sales JPY 100 billion, EBITDA JPY 20 billion.