9163.T

• Company Overview & Core Competitiveness

  • Narelu Group is a construction industry-focused human resources service provider listed on the Tokyo Stock Exchange Growth Market in July 2023, with approximately 4,000 consolidated employees. It started with construction management technician dispatching and has expanded into IT personnel dispatching, craftsman introduction, and construction DX.
  • Its consolidated subsidiary Zenkoku Kensetsu Jinzai Kyokai holds one of only 3 national permits for paid construction occupation introduction services, and maintains a database of 4,000 to 5,000 independent craftsman members via insurance management agency services, enabling cross-connection of all construction industry players from general contractors to independent craftsmen.
  • The company has built a large talent pool centered on construction management personnel via an inexperienced hire cultivation model, paired with a steadily growing customer base centered on major general contractors, and holds top-tier industry growth and profitability levels.

• Mid-term Growth Strategy (Change and Growth 2030)

  • The 5-year mid-term plan sets 4 priority areas: 1) strengthen competitiveness of core construction management dispatching, 2) promote construction DX business, 3) expand craftsman introduction business, 4) improve productivity. The core strategic focus is integrating people and technology to evolve from a pure dispatching company to a value-added construction solutions enterprise, with a long-term goal of becoming a specialized construction human resources platform.
  • The company targets 50 billion yen in consolidated sales and 5 billion yen in operating profit by 2030, with over 20% of total sales coming from new business areas (construction DX, BPO, craftsman introduction) and 80% from the existing core business.
  • To address the industry-wide issue of low penetration of construction DX tools (most tools fail to achieve sustained on-site adoption and lead to customer churn), the company has launched a unique "on-site talent + construction DX tools" implementation model that supports not just introduction, but also on-site operation and sustained adoption.
  • The company is expanding its value-added revenue model starting from its existing dispatching base, moving into DX talent placement, DX implementation support, and contracted BPO services, to gradually increase the share of higher-margin BPO revenue and improve the quality of its revenue structure. BPO services already have initial customer orders, and are expected to deliver clearly higher profit margins than traditional dispatching.

• Strategic Partnerships for Implementation-focused Construction DX

  • In September 2025, the company entered a strategic business partnership with Skymatics to support implementation of Skymatics' spatial data integration platform "Kumiki", which has been used in over 50,000 construction sites. Leveraging its existing customer and talent base, the company has launched dedicated sales for the platform this term, and dispatches dedicated construction DX talent to provide end-to-end support from implementation to operation and adoption.
  • In March 2026, the company entered a strategic partnership with Arent to support implementation of Arent's AI-powered process management system "PROCOLLA". The company dispatches accompanying construction DX talent to provide on-site introduction and adoption support, feeds back on-site insights to Arent's product development team to drive product improvement, and builds a closed-loop implementation-focused DX model.

• Talent Retention & Engagement Initiatives

  • The company identifies utilization rate and turnover rate as the most critical KPIs for its dispatching business. This term, it has increased focus on strengthening talent retention and engagement, including introducing the giftee Benefit welfare program, holding themed exchange meetings, launching company-wide club activities (e-sports, baseball, board games, etc.) to promote cross-organizational employee interaction, and launching internal communication channels like "World Communication" where management directly communicates business strategy, direction, and career path support to technical employees.

• By 2030, the company targets 50 billion yen in consolidated sales revenue and 5 billion yen in operating profit, with over 20% of total sales coming from new business areas (construction DX, BPO, craftsman introduction).
• The company expects construction solution business utilization rate to recover to the 92% range in the second half of the current 2026 October Term.
• The company maintains a stable dividend basic policy, expects an annual dividend of 115 yen per share for the 2026 October Term, and has committed to no dividend cuts during the mid-term plan period as it executes growth-focused investment.
• Chronic industry-wide human resource shortage maintains strong demand for construction management talent, and the company sees sufficient room for unit price growth via higher value-added DX-related services.
• Monthly utilization rate is expected to see moderate volatility in the near term due to the timing of project starts and assignment adjustments amid ongoing sales strengthening initiatives.

For the 2026 October Term 1st Quarter:

1. Construction Solution Business: This is the core business, accounting for approximately 90% of total revenue. It dispatches construction management technicians to construction sites, and provides CAD operators and drafters for construction drawings. Key KPIs: 3,650 registered employees, 3,334 active employees, 91.3% utilization rate, 429 new hires, 428 departures, 32.8% turnover rate. Contract unit prices have stayed between 510,000 yen and 520,000 yen from 2024 through Q1 2026.
2. IT Solution Business: The smaller non-core segment focused on IT personnel solutions for the construction industry. Key KPIs: 426 registered employees, 376 active employees, 90% utilization rate, 21 new hires, 28 departures, 22.2% turnover rate.

Overall consolidated Q1 results: Sales revenue is 6.276 billion yen, operating profit is 0.724 billion yen. The quarter saw year-over-year revenue growth but profit decline due to upfront growth investment spending, while coming in below plan on revenue but above plan on profit.

• The construction industry faces structural human resource shortages: by 2030, the industry is projected to have a shortage of 80,000 to 100,000 craftsmen (far larger than the 80,000 to 100,000 shortage of construction managers), driven by an aging craftsman workforce (current average age 47 to 48). Unaddressed craftsman shortage could lead to project delays, cost increases, and ultimately suppressed project orders that constrain industry-wide growth and the company's growth.
• Construction DX tools face structural adoption barriers: even high-quality tools often fail to penetrate construction sites because on-site managers are overloaded with work, and young workers lack the skills to apply the tools, leading to low adoption, high churn, and slower than expected growth of the company's DX business.
• Near-term utilization rate has declined from previous levels and saw monthly volatility in early 2026, driven by supply-demand adjustments amid the company's sales organization strengthening, and temporary adjustment periods for some technicians before assignment.
• Turnover rate has temporarily increased amid supply-demand adjustments: Q1 2026 saw 428 departures in the construction solution segment, matching the 429 new hires in the quarter, and the company faces ongoing pressure to reduce turnover and improve retention particularly among inexperienced new hires.

Q: What is Narelu Group's differentiation and competitive advantage compared to peer companies?

A: Narelu is not just a pure dispatching company: it has built a large talent base via its inexperienced hire cultivation model, a solid customer base of major contractors, and holds one of only 3 national permits for construction paid occupation introduction that allows it to connect all industry players from general contractors to independent craftsmen across the entire value chain, which is its core point of differentiation.

Q: What is the significance, profit structure and growth potential of the craftsman introduction business?

A: The construction industry currently faces a far more serious structural shortage of craftsmen than construction managers, with a projected shortage of 800,000 to 1,000,000 craftsmen by 2030, driven by an aging workforce. Without solving craftsman shortage, the entire industry cannot operate normally even with enough construction managers. Narelu already has a customer base of general contractors and a construction manager talent pool, and via its national construction talent association, it can connect general contractors, specialty contractors and craftsmen to create strong synergies, bring new craftsmen into the industry, and build a unique market position combining construction managers, craftsmen, and DX talent, with the long-term goal of becoming a platform for connecting construction industry talent.

Q: What specific industry problems does Narelu solve via construction DX?

A: The biggest structural problem is low new worker entry and low productivity caused by persistent analog operations at construction sites. Narelu's unique advantage is that its dispatched construction talent already participate in on-site operations, so they can support DX adoption and operation directly on site. By controlling both on-site supervisors and craftsmen, Narelu can build a position where major general contractors cannot secure work without choosing Narelu, which creates large long-term growth potential.

Q: What is the profit margin outlook for BPO services? Is this business similar to consulting?

A: BPO requires not just tool introduction, but full business process review, and Narelu already has initial orders for this business starting this term. While margins vary by project, BPO is clearly expected to deliver higher profit margins than traditional dispatching. Narelu targets 20%+ of 2030 total sales to come from DX and BPO related business, and will steadily advance commercialization while flexibly adjusting strategy via PDCA cycles.

Q: Does implementation-focused construction DX deliver higher margins and unit prices than traditional dispatching?

A: While parts of the model are still in proof of concept, it is clearly easier to achieve higher unit prices than traditional construction dispatching. The model combines Narelu's existing inexperienced cultivation capabilities with new digital tool skills, includes consulting-like elements, and is being built to earn clear value recognition from customers that supports higher pricing.

Q: February 2026 utilization rate was 91.8%, down from 92.4% in January 2026. What caused this deterioration amid your sales strengthening efforts?

A: The decline is driven by ongoing supply-demand adjustment during the sales organization strengthening process: as Narelu strengthens project acquisition capabilities, some technicians experience temporary adjustment periods before assignment, which impacts near-term utilization. Monthly utilization volatility is expected amid adjustments to assignment timing and project start dates, and the company is pushing multiple initiatives to improve utilization, with a target of 92%+ utilization in the second half of the year.

Q: Narelu is doing aggressive hiring for growth investment, but turnover is nearly equal to new hiring, so it appears retention initiatives are not working. What are the causes and countermeasures?

A: The higher turnover is a temporary situation amid ongoing supply-demand adjustment, and the company treats this as a critical priority. Most new hires are inexperienced, so the company is focusing on two core initiatives: 1) strengthen career development support, including promoting the Zero Pro growth cycle, expanding qualification acquisition support, and expanding the mentor system; 2) strengthen connection between the company and technicians, including introducing giftee Benefit and activating internal communities.

Q: Why are Persol Career and Mynavi listed as suppliers in the company filing, and what is your relationship with these peer companies?

A: Persol Career and Mynabi are suppliers for Narelu's recruitment activities, as providers of talent introduction services and job listing media. Narelu uses multiple recruitment channels to secure technical talent, and these companies are recruitment partners, not direct competitors. While they are general human resources services companies that overlap in the broader human resources industry, their business models are very different from Narelu's construction-focused technical dispatching and cultivation model, so the relationship is limited to recruitment-related transactions, and Narelu will continue to use multiple channels to secure talent stably.

Q: How much contribution from non-core businesses is included in the 2030 mid-term targets?

A: Core construction dispatching will remain the center of Narelu's profit for the foreseeable future. Narelu aims to grow new business areas (construction DX, BPO, craftsman introduction) to over 20% of total 2030 sales, with the remaining 80% coming from steady growth of the existing core business. New businesses are still in the early growth stage, so Narelu will closely monitor progress and flexibly update the business model to ensure successful execution.