Fiscal Year Ended March 31, 2022
(16th Fiscal Period)

Financial Resultsfor FYE2022
May 13, 2022

COPRO-HOLDINGS Co., Ltd.
Tokyo Stock Exchange Prime, Nagoya Stock
Exchange Premier (Ticker Symbol: 7059)

Table of Contents

1. Summary of the Consolidated Financial Results

2. Sales and KPI Analysis
3. Major Initiatives and Consolidated Earnings Forecast

for FYE2022©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

11. Summary of the Consolidated Financial Results

2. Sales and KPI Analysis
3. Major Initiatives and Consolidated Earnings Forecast

for FYE2022©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

2

Main Topics From the 3Q Financial Results
Taking over the worker dispatching business of Hucoss Co., Ltd. through anabsorption-type company split (announced February 16th)• On April 1st, 2022, we took over the worker dispatching business of Hucoss Co., Ltd., a consolidated subsidiary of
Takasago Thermal Engineering Co., Ltd.
• The 122 engineers and technicians, who are highly skilled and have qualifications that were gained from experience atmajor subcontractors, were transferred to COPRO-ENGINEERD.

Establishing a nomination and compensation committee (announced April 13th)• The compensation advisory committee, which was an advisory body set up by the Board of Directors, was changed withthe establishment of the nomination and compensation committee.
• For the function of the Board of Directors related to the nomination and remuneration of directors, etc., the fairness,transparency and objectivity of the procedures were strengthened by obtaining appropriate involvement and advice fromindependent outside directors.

In April 2022, 135 new graduates joined the company• In April 2022, a total of 135 new employees joined the group, including 55 new graduate technical employees and 80
administrative employees.
• By training young human resources who will lead the next generation of the COPRO Group, we aim to be a corporategroup that supports an industry struggling with a shortage of engineers and technicians.

©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

3

Highlights of the Consolidated Financial Results• Due to the sluggish growth of technical employees from the downturn in hiring, sales were about the same as the previous fiscal
year for the COPRO-ENGINEERD dispatch of construction and plant technicians, which is our core business. Sales increased by
5.1% year-on-year due to the new consolidation of ATMOS and VALUE ARK CONSULTING, which became part of the groupthrough MandA.
• Non-GAAP operating profit increased by 20.4% year-on-year due to an increase in COPRO-ENGINEERD profit mainly from an
improvement in the cost of sales ratio, and the new consolidation of ATMOS and VALUE ARK CONSULTING. Net income
attributable to shareholders of the parent company declined 4.6% YoY due to the absence of extraordinary gains recorded in theprevious period and impairment losses resulting from the closure and consolidation of branches.
• Operating income fell slightly short of the forecast.
(Mln yen)

FYE2021

Sales
Cost of sales
Profit on sales
Selling, general and administrative
expenses
Operating profit
Depreciation cost
Goodwill amortization
Stock award expenses
Non-GAAP operating profit*
Ordinary profit
Net profit attributable to theshareholders of the parent company
Number of consolidated techniciansand engineers*

FYE2022
Full FYRatio

YoY Change
Amount of
Pct Change
Change
+5.1％
+752
+1.9％
+205
+12.7％+547

Difference
from theForecast
ｰ1,353
ｰ1,043ｰ310

Full FY

Ratio

14,836
10,5394,297

100.0％
71.0％
29.0％

15,58910,744
4,844

100.0％
68.9％
31.1％

2,859

19.3％

3,223

20.7％

+12.7％

+363

ｰ276

1,437
92
－
－
1,530
1,439

9.7％
－
－
－
10.3％
9.7％

1,621
118
65
36
1,841
1,619

10.4％
－
－
－
11.8％
10.4％

+12.8％－－－+20.4％+12.5％

+183
+26
+65
+36
+311
+180

ｰ33
－
－
－
－
ｰ37

1,009

6.8％

962

6.2％

ｰ4.6％

ｰ46

ｰ114

2,020

－

2,201

－

+9.0%

+181

－

*As a profit index to measure essential performance, non-GAAP operating profit is calculated by adding depreciation costs, goodwill amortization and stock award
expenses back to operating profit.
*The number of consolidated technicians and engineers is the number of employees at the end of the fiscal year including IT freelancers in the SES business.
©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

4

4Q Consolidated Earnings• Sales and operating profit reached record highs on a quarterly basis during the current fourth quarter.

FYE2020

FYE2021

FYE2022

4,500

3,000
✓ Number of consolidated technical employees:
down 2 people compared to the end of the previous quarter✓ 4Q sales: +2.7% compared to the end of the previous quarter

4,000
2,500
3,500
2,000
3,000

2,500

1,500
1Q

Sales
Operating profit
Non-GAAP operating
profitNo. of consolidated
technicians andengineers

4Q

1Q

3,023
298

2Q
3Q
FYE2020
3,149
3,376
371
464

3,573
458

318

391

485

1,686

1,763

1,879

Sales

4Q

1Q

3,606
198

2Q
3Q
FYE2021
3,664
3,796
333
426

3,555
277

2Q
3Q
FYE2022
3,846
4,038
354
488

3,768
479

482

218

357

450

1,984

2,044

2,002

2,054

4Q
4,148
500

503

311

410

561

558

2,020

1,957

2,086

2,203

2,201

No. of consolidated technicians and engineers*As a profit index to measure essential performance, non-GAAP operating profit is calculated by adding depreciation, amortization of goodwill and share-based remuneration expenses to operating profit.

*The number of consolidated technicians and engineers is the number of employees at the end of the fiscal year including IT freelancers in the SES business.

©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

5Non-GAAP Operating Profit• For the dispatching of construction and plant technicians at COPRO-ENGINEERD, due to charge-up negotiations,profit increased by ¥415 million from the improvement in the cost of sales ratio.
• ATMOS, which was newly consolidated from the current fiscal year, increased profits by ¥10 million due to improved
profitability of the contracting business. Similarly, the newly consolidated VALUE ARK CONSULTING contributed +¥49
million.

COPRO-ENGINEERD+415(Newly Consolidated)
VALUE ARKCONSULTING+49(Newly Consolidated)
ATMOS
+10

Increase in
selling andadministration
costs

1,530
Increase ingross profit
on salesDecrease in
selling andadministrati
on costs

Dispatchingbusiness
Increase ingross profit
on salesContracting
business
Increase in grossprofit on sales-(Mln yen)

Other(Company-wideand elimination)
Increase inoperatingprofit1,841-

Non-GAAP operating profit+¥311 mln (+20.4%)

Full FYE2021

Full FYE2022

Full FYE2022
Non-GAAP
Non-GAAP operating profit
Non-GAAP operating profit
operating profit*As a profit index to measure essential performance, non-GAAP operating profit is calculated by adding depreciation, amortization of goodwill and share-based
remuneration expenses back to operating profit.
©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

6

1. Summary of the Consolidated Financial Results

2. Sales and KPI Analysis
3. Major Initiatives and Consolidated Earnings Forecast

for FYE2022©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

7

Construction and Plant Technician Dispatching:Number of Technical Employees and Utilization Rate
• The number of technical employees at the end of this 4Q was 1,995 (down 25 from the end of the previous 4Q).
• The utilization rate at the end of this 4Q was 96.7% (up 0.9pt from the end of the previous 4Q).

(People)
2,400

100%
98.1%

97.7%

97.8%

97.4%

2,300

97.0%

97.3%
96.7% 98%

95.8%
2,200

94.4%

95%

2,100
Full FY average 2,030 people

93%

Full FY average 1,985 people(Down 2.2% YoY)

2,000

90%
1,900
2,044
1,984

2,002

2,054

2,020

1,800

1,957

1,978

6/21

9/21

2,010

1,995
88%

1,700

85%
3/20

6/20

9/20

12/20

3/21

Technical employees©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

12/21

3/22

Utilization rate

8

Construction and Plant Technician Dispatching:
Hiring and Resigning and Retention Rate
• In 1Q, the resignation of technical employees due to the expiration of contracts increased, mainly at major general contractors affected by
the novel coronavirus, and the annual retention rate improved only slightly at +0.3pts compared to the previous period.
• While the number of projects tends to increase quarterly, mid-career recruitment has been difficult due to the recovery in businesssentiment, the increasing labor shortage due to the normalization of economic activities as companies take measures against the novel
coronavirus, and because of the delay in committing to flexible recruitment costs in response to changes in the external environment.
Number of Hired and Resigning Technical Employees(Unit: No. of people)

FYE2021
1Q
Number Hired
New graduates and recent graduateswith work experience
Mid-career
Number Resigned
Indefinite-term technical employees
Fixed-term technical employees
Net Increase or Decrease
Increase due to M & A, etc.
Number Registered at fiscal period end

Technical Employee
Retention Rate

2Q

3Q

FYE2023(Forecast)
Full FY
Full FY834
1,501

FYE2022

281

181

231

4Q
172

Full FY
865

89

0

0

0

192
221
12
209
ｰ60
0
2,044

181
223
17
206
ｰ42
0
2,002

231
179
21
158
ｰ52
0
2,054

172
206
18
188
ｰ34
0
2,020

1Q

2Q

3Q

4Q

230

208

213

183

89

56

0

0

0

56

84

776
829
68
761
+36
0
2,020

174
293
24
269
ｰ63
0
1,957

208
187
25
162
+21
0
1,978

213
181
21
160
+32
0
2,010

183
198
24
174
ｰ15
0
1,995

778
859
94
765
ｰ25
0
1,995

1,417
885
＋616
+122
2,733

*Retention rate = Among the technical employees who were registered at the end of the quarter one year ago, the percentage who were stillregistered at the end of the same quarter one year later.
*Fiscal year accumulative total retention rate = Among the technical employees who were registered at the end of the previous fourth quarter, thepercentage who were still registered at the end of the relevant quarter.

FYE2021
1Q

Technical Employees (LTM)
Fiscal Year Accumulative Total
Indefinite-term employment within this (LTM)
Fiscal year accumulative total
Fixed-term employment within this (LTM)

Fiscal year accumulative total©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

2Q

FYE2022
3Q

4Q

1Q

2Q

3Q

4Q

73.7%

73.0%

71.0%

69.1%

68.0%

69.5%

69.2%

69.4%

89.7%

80.4%

74.7%

69.1%

84.8%

79.3%

74.6%

69.4%

84.5%

85.8%

85.2%

85.2%

78.9%

77.0%

78.9%

80.7%

95.7%

92.2%

87.9%

85.2%

94.2%

88.9%

85.3%

80.7%

71.5%

70.6%

68.7%

66.7%

65.8%

68.0%

67.5%

66.4%

88.8%

78.6%

72.8%

66.7%

82.4%

76.8%

71.9%

66.4%

9

Mechanical Design and Development Engineer Dispatching and Contracting:Number of Technical Employees and Utilization Rate
• The number of technical employees at the end of this 4Q was 116.
• The utilization rate at the end of this 4Q was 98.3%.

(People)
120

98.2%
96.5%

97.2%

98.1%

99.1%

98.3%

98%

96.4%

96.3%

100%

115

96%
94%

110

92%

90%
116

105
113
109

109

110

111

88%
86%

108

100

106

84%
82%

95

80%
5/20

8/20

11/20

2/21
Technical employees©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

5/21

8/21

11/21

3/22

Utilization rate10

Mechanical Design and Development Engineer Dispatching and Contracting:
Hiring and Resigning and Retention Rate
• As a result of full-scale recruitment activities from 3Q, the recruitment of experienced personnel, mainly expert humanresources from manufacturers, has progressed steadily, and the number of recruits has increased to 15 in 4Q.
Number of Hired and Resigning
Technical Employees
FYE2021
1Q

2Q

3Q

FYE2023(Forecast)
Full FY
Full FY
20
85
0
1
20
84
15
23

FYE2022
4Q

Full FY

1Q

Number Ｈired
New graduates
Mid-career
Number Resigned
Indefinite-term
technical employees
Fixed-term technicalemployees
Net Increase or
Decrease
Number Registered at
Fiscal Period End

2Q

3Q

4Q*

2
0
2
5

3
0
3
5

15
0
15
5

5*

4

3

12

-

0

1

2

3

-

ｰ3

ｰ2

+10

+5

+62

108

106

116

116

178

*Includes three people who changed from technical employees to management employees.
*For the 4Q of FYE2022, due to the change in the month that the fiscal year ends, the results for the four months from December 2021 to March 2022 are included.

Technical Employee
Retention Rate
FYE2021 (reference)
1Q

2Q

3Q

FYE2022
4Q

1Q (reference)

2Q

3Q

4Q

Retention Rate (LTM)

87.7%

90.4%

88.7%

90.1%

92.9%

92.7%

90.8%

88.9%

Fiscal year accumulative
total

97.3%

94.6%

92.8%

90.1%

100.0%

95.4%

91.7%

88.9%

*Retention rate = Among the technical employees who were registered at the end of the quarter one year ago, the percentage who were still registered at the end of the same quarter one year later.
*Fiscal year accumulative total retention rate = Among the technical employees who were registered at the end of the previous fourth quarter, the percentage who were stillregistered at the end of the relevant quarter.
*ATMOS Co., Ltd. has been consolidated since June 2021 due to M&A. Therefore, results for FY2021/3 and 1Q FY2022/3 are provided for reference only.
©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

11

1. Summary of the Consolidated Financial Results

2. Sales and KPI Analysis
3. Major Initiatives and Consolidated Earnings Forecast

for FYE2022©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

12

Major Initiatives in the Core Business (1)• Demand for human resources is booming as the number of projects in the current month has exceeded 2,000. Through digitaltransformation, we are working to strengthen sales abilities to improve productivity and to increase the number of contracts.
• We are working to raise the level of our recruitment activities, including actively investing in hiring costs and increasing the numberof interviews. In addition, in order to prevent the employees from leaving their jobs, we are working to improve the retention rateby further deepening sales to target companies and by changing the system.

⚫

Strengthening Sales Abilities

Expanding the Number Hired

Productivity Improvement with DX

Recruitment Costs⚫

Raising the internal standard for hiringcosts per person, and thoroughly
strengthening the securing of excellent
human resources by investing in hiring
costs

⚫

Expanding recruitment of new graduates

Introducing tools and systems forcentralizing sales activities and project
information

Improving the Retention Rate
Target Company Assignment Rate⚫

Recruitment Activities

Sales Activities⚫

Increasing the number of activities bymanaging sales process KPIs⚫

Increasing the number of activities bymanaging recruitment process KPIs⚫

Boosting sales personnel at branches inTokyo, Nagoya and Osaka whereconstruction demand is high⚫

Appointing staff in charge of setting up
interviews in order to secure humanresources in Tokyo, Nagoya and Osaka
where construction demand is highBy further deepening sales, promoting
new assignments to target companies thathave abundant construction projects andare expected to have high contract
continuation rates, and pushing theshifting of assignments when the contracts
end.

Indefinite-Term Employees⚫

To provide an environment where people
can work for a long time with peace ofmind, for those who meet therequirements, converting fixed-term
employees to indefinite-term employment⚫

Hiring new people on the premise ofchanging to indefinite-term employment

Improve our recruiting and sales abilities and provide human resource services
that are both technician-oriented and client-oriented.
©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

13

Forecast for FYE2023▪ COPRO-ENGINEERD Co., Ltd. (Construction and plant technician dispatching business)
Orders and Hires

Aiming to continuously acquire the number of projects by raising the basic competitiveness of sales activities through KPI
management, and by building relationships with major client companies by continuing deep-cultivation sales. In addition, in order tosupply sufficient human resources for the number of projects procured, we are raising the internal standard for hiring costs perperson and actively investing in hiring costs.

Retention

Promoting deep-cultivation sales, increasing the ratio of assignments to target-companies that have plenty of construction projects,
and improving the retention rate. In addition, implementing activities to gain the trust of technicians and, promoting the conversion of
fixed-term employees to indefinite-term employment based on certain standards.

Charge-up

Given the shortage of human resources, we will continue to strengthen charge-up negotiations centered on the retained companies
that technicians have been dispatched to so that the increased human resource value of experienced technicians can be reflected in
the contract price.

▪ ATMOS Co., Ltd. (Mechanical design and development engineer dispatching business)
OrdersIn the automobile industry, it is expected that orders will continue to increase by expanding new areas through supporting CASE andthe promotion of outsourcing existing operations. While the impact of product manufacturing adjustments due to the global
semiconductor shortage is a cause for concern, the demand for semiconductor parts and equipment is increasing as well as theincreasing needs of dispatching and contracting business. The recovery of the manufacturing industry is slowly progressing.

Recruiting

The company will actively recruit by enhancing training for inexperienced workers through the outsourced contracting business and bystrengthening the hiring of expert human resources from manufacturers.

▪VALUE ARK CONSULTING Co., Ltd. (SES business)
OrdersAiming to get large-scale projects and improve profit margins by promoting the cultivation of upstream clients who are close to thoseordering.

Recruiting

Planning to improve the company-owned recruitment media “Happy Engineer.” Through the improvement of UI, UX and SEO, aiming
to increase applications that naturally come in.

©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

14

FYE2023 Consolidated Earnings Forecast• Sales are expected to increase by 14.5% from the previous fiscal year with the rise in the number of people assigned, mainly in thecore business of construction and plant technician dispatching.
• In order to overcome the current situation where hiring is a bottleneck and opportunity loss is occurring, we plan to increase hiringcosts by approximately +150% from the previous fiscal year, with the aim of securing excellent engineers and technicians who willbe the basis of growth.
• Non-GAAP operating profit is expected to decrease by 27.6% from the previous fiscal year due to an increase in selling andadministration expenses from aggressive investment in recruitment costs.
(Mln yen)
FYE2022
Full FY

FYE2023
Full FY(Forecast)Ratio

YoY Change
Ratio

Pct Change

Amount of
ChangeSales

15,589100.0％

17,854100.0％+14.5％+2,264

Cost of sales

10,74468.9％

12,35469.2％+15.0％+1,609Profit on sales

4,844

31.1％

5,500

30.8％

+13.5％+655

Selling, general and administrative
expenses

3,223

20.7％

4,476

25.1％

+38.9％+1,252

Operating profit

1,621

10.4％

1,024

5.7％

ｰ36.8％

ｰ597

Non-GAAP operating profit

1,841

11.8％

1,334

7.5％

ｰ27.6％

ｰ507

Ordinary profit

1,619

10.4％

1,024

5.7％

ｰ36.8％

ｰ595

962

6.2％

604

3.4％

ｰ37.3％

ｰ358¥102.12－¥65.05－

ｰ36.3％¥ｰ37.07

2,201

－

3,024

－

+37.4％+823

Net profit attributable to theshareholders of the parent company
Net profit per share*
No. of consolidated technicians andengineers**As a profit index to measure essential performance, non-GAAP operating profit is calculated by adding depreciation, amortization of goodwill and share-based remuneration expenses
back to operating profit.
*On April 1, 2021, a stock split was conducted at a ratio of two shares per common stock. Net profit per share for FYE2021 is calculated assuming that the stock split was conducted at
the beginning of the period.
*The number of consolidated engineers and technicians is the number of employees at the end of the fiscal year including IT freelancers in the SES business.
©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

15

Shareholder Returns[Basic Policy]
Dividends are the basis for shareholder returns, which we consider to be one of the important management issues,and our basic policy is to pay stable dividends. Dividends will not be reduced during the period covered by themedium-term management plan "COPRO Group Build the Future 2027" (from FYE2023 to FYE2027), depending on
the profit growth achieved through aggressive investment.

✓80 Based on the dividend policy, we are maintaining the
75 annual dividend at ¥40.0 for FYE2023

61.5%

60.0%

✓70 The dividend payout ratio is expected to be 61.5%
65

50.0%

60

39.2%
35.1%

55
50
45

20.2%

18.5%

30.0%

¥37.5

35

2.5

¥30.0

30
25

¥21.0

20

1.0

10
5

40.0%

26.1%

40

15

70.0%

¥15.0

20.0

¥40.0

¥40.0
20.0%
10.0%

25.0

30.0

30.0

0.0%

-10.0%
20.0

15.0-20.0%
10.0

10.0

10.0

10.0

FYE2020

FYE2021

FYE2022

FYE2023(forecast)0-30.0%
FYE2018

FYE2019

Ordinary dividend (interim)

Ordinary dividend (year-end)

Commemorative dividend (year-end)

Dividend payout ratio (%)*The commemorative dividends were for listing on the stock exchange in FYE2019, and moving to the first sections of the Tokyo Stock Exchange and the
Nagoya Stock Exchange in FYE2021.
*The dividend per share has been retroactively revised to take into account the impact of the one-to-two stock split implemented on April 1, 2021.
©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

16

Disclaimers and Precautions for Forward-Looking Statements◼ This document was prepared by COPRO-HOLDINGS Co., Ltd. (hereinafter referred to as the “Company”) for the
purpose of understanding the current situation and to help as an investment reference.

◼ The content of this document has been prepared based on the generally recognized economic and social conditions
as of the date of publication and certain assumptions that the Company deems reasonable. However, it is subject tochange without notice due to changes in the business environment, etc.
◼ The material and information provided in this presentation includes so-called "forward-looking statements". These
are based on current expectations, forecasts and assumptions that are subject to risks, and they contain
uncertainties that may bring results that are substantially different from these statements.
◼ These risks and uncertainties include general industry and market conditions, as well as general domestic andinternational economic conditions such as interest rate and foreign exchange fluctuations.
◼ In the future, even if there is new information or future events, etc., the Company is not obligated to update orrevise the "forward-looking statements" included in this presentation.

©2022 COPRO-HOLDINGS. Co., Ltd. All rights reserved.

17