IR BOOK 2021 - Business Strategy

IR BOOK 2021
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IR BOOK 2021 - Business Strategy

Organizational Development Division
Support for the Creation of Motivation Companies

We raise employee motivation to create fulfillment in work. We support the creation of organizations (Motivation Companies) that stakeholders continue to choose.

IR BOOK 2021
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Organizational Development
Division

Business Content

The Consulting & Cloud Business and the IR Support Business Work to Create
Motivation Companies That Individuals Choose
Consulting & Cloud Business

IR Support BusinessSupport for Helping Companies Improve
Employee Engagement

Support for Helping Companies
Improve Investor Engagement

Consulting

Cloud

Offering one-stop
solutions

Offering cloud-based
services to improve
employee engagement

Recruiting

Systems

Support for disclosure of financial information as well asof human capital and other non-financial information

Communicate Engagement
Ratings as part of human capital
initiatives

Training

Corporate
ClimateSupport for Disclosure

Share of Sales in Japan

No. 1*

Integrated
reports

for four consecutive years

Streaming video

IR websites

Overseas
communication* ITR, “ITR Market View: Human Resources Management Market 2021” Employee engagement market: Consecutive number one in sales by vendor and market share (FY2017-FY2020 forecast)
Note: Some business names have changed from the fiscal year ending December 31, 2022.

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IR BOOK 2021 - Business Strategy

A “Motivation Company” is an organizationthat maximizes both organizational
performance and individual motivation. It
can be expressed in the phrase “One forAll, All for One.”To support the creation of Motivation
Companies, we currently operate a
Consulting & Cloud Business to help
companies improve employee engagement
and an Investor Relations (IR) Support
Business to help companies improve
investor engagement. Based on the resultsof our cloud-based organizational
diagnostics, we provide one-stop consulting
services for organizations and humanresources. We also provide support forcorporate disclosure in IR with a focus onhuman capital disclosure. Through thesebusinesses, we offer one-of-a-kind value.

Organizational Development
Division

Market Environment

Amid Rapidly Changing Conditions for Organizations and Individuals, Improving
Employee Engagement Has Become an Urgent Issue for Companies
Working Population Decrease

Diversifying Motivation for Work

Changing Management Issues

Japan’s Working AgePopulation Ratio1

Change in the “Purpose of Work” for New
Employees: Percentage of Respondents
Who “Want to Enjoy Life”2Management’s Perception of Issues:
Growing Importance of Human
Capital3

68.2% 50.7%

26.1% 39.6%

2000

2050

2000

2019

8th

2nd

Personnel system/
employee treatment

Strengthening
human resources

2003

2021

1. Created by the Company from Databook of International Labour Statistics 2019 by the Japan Institute for Labour Policy and Training
2. Created by the Company based on the results of the “Work Attitudes" survey for new employees conducted by the Japan Productivity Center in 2000 and 2019.
3. Created by the Company based on “Survey on Current Management Issues for Japanese Companies 2003: Identification of Issues and Direction of Response for Future Management
Innovation” and “Management Issues for Japanese Companies 2021,” both from the Japan Management Association.
For more detailed data, see pages 51-52 of the IR Book.

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IR BOOK 2021 - Business Strategy

Conditions for organizations and individuals
have been changing rapidly in recent years.
Japan’s working population is shrinking at
the fastest rate in the world due to its
declining birthrate and aging population.
As the sources of people's motivation forworking become more diverse and their
purpose for working shifts to a sense offulfillment and worthwhile work, they arealso changing jobs more often. In addition,with the accelerating shift in products andservices toward intangibles with shorter
lifecycles, we have entered an era in which
companies will not be able to grow unlessthey transform their organizational strategies,
including for developing human resources
and improving employee engagement, as
well as their business strategies.

Organizational Development
Division

Competitive Advantage

Assets Cultivated as a Pioneer in the Field of Organizations and Human Resources,
Based on Motivation Engineering

Where

Ability to compare quantitative
data by division and level

Training

Engagement factors
Company: 8 areas

What

Boss: 4 areas

Diagnosis

Motivation
Engineeringhttps://www.lmi.ne.jp/english/

Systems

Recruiting

Corporate
ClimateEventsInternet

Transformation

Workplace: 4 areas

How

Print

Video

Extensive Accumulated Data

Accumulated Customer Base and Expertise

Database on organizations

Customers

2.37 million employees at
8,740 companies
IR BOOK 2021

IR BOOK 2021 - Business Strategy

Based on Motivation Engineering, which is ourcore technology and the source of ourcompetitive advantage, we conduct a diagnosis
to identify what issues exist in an organization
and where, then use the results to provide themost appropriate solutions for transformation.
In the over 20 years since its founding, Link andMotivation has diagnosed organizations in avariety of growth stages and industries, building
up a dominant database covering 2.37 million
employees at 8,740 companies. Moreover, by
providing one-stop solutions for all areas fromrecruiting to training, systems and corporate
climate, we have accumulated a solid customer
base centered on major companies as well as
acquired unique expertise.

Approx.

Management Strategy

Business Strategy

Organizational Strategy

1,800 companies

Corporate GovernanceCorporate Data

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Organizational Development
Division

Research Results

Improving Employee Engagement Positively Impacts Operating Margin andLabor Productivity
Correlation between Engagement Score (ES)and Operating Margin

Correlation between Engagement Score (ES) andLabor Productivity

Operating Margin

Labor Productivity (Index)

40%

4

20%

2

0%

0
Score
Line of best ﬁt

-20%
30

40

50

60

70

80 ES

For every one-point increase in ES, the operating margin
for the period increased by 0.35%

IR BOOK 2021 - Business Strategy

The value we provide is not simply raising the
motivation of individuals, but simultaneously
maximizing both employee motivation andorganizational results. Since its founding, theLink and Motivation Group has helped some
10,000 companies resolve their organizational
problems, and its joint research with Keio
University has shown that improving employee
engagement has a positive impact on acompany’s operating margin and laborproductivity. Now that the focus on employee
engagement is increasing, especially amongmajor companies, we will further hone ourcompetitive advantage to take the lead as thedriver of the employee engagement market.

Score
Line of best ﬁt

-2
30

40

50

60

70

80 ES

For every one-point increase in ES, the labor productivity
index increased by 0.035 points

Notes:
1. Research results on “Engagement and Corporate Performance” announced in September 2018
2. The analysis covers 66 listed companies with publicly available securities reports from among respondents to Link and Motivation’s Employee Engagement Survey.
The study period was from May to July 2018.
3. Labor productivity is defined as “EBITDA per yen of salary paid to employees.”

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Organizational Development
Division

Medium-Term Strategy

Creating Reliable Growth, Driven by Cloud-Base Product Subscription Sales,
While Simultaneously Strengthening Linkage with Our Consulting Business
Cloud

Consulting

Further Increase Monthly Fee Revenue from
the Motivation Cloud Series

Strengthen Linkage to
Motivation Cloud

New Customer Acquisition

One-Stop Solutions According to Diagnostic Results romote adoption by more majorP
companies

Diagnostic Solutions

Localization for global rollout
New Cloud Service Rollout
Reliable growth from migrating our provenservices to the cloud, as with Motivation Cloud
2000 onward
Training and related humanresource development services
Accumulated answer database

Transformation Solutions

Second half of2022 onward

https://www.lmi.ne.jp/english/

Recruiting

Training

Systems

Corporate
ClimateMigration to the cloud638,100 people

IR BOOK 2021

IR BOOK 2021 - Business Strategy

Over the medium term, we will focus oncontinuing to grow the cloud business’s
stable subscription revenues. This willentail localization of our diagnostic surveys
for a global rollout, in addition to continuing
to promote adoption of the service by major
companies. In 2022 we will fully migrate
our proven human resource development
services to the cloud. We expect this willcontribute significant additional new
growth to our subscriber base as we enter
2023 and beyond. In addition, bystrengthening linkage with our cloudservices to expand our one-stop consulting
solutions based on diagnostic results, wewill ramp up our ability to provide valuethat is only available from the Link andMotivation Group.

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Organizational Development
Division

Medium-Term Strategy
Organizational Development Division Gross Profit* Motivation Cloud Series* Monthly Fee Revenue
Operating Margin(¥ thousand)(¥ million)

400,000

9,000

8,700

8,250

320,000
300,000+15.5%
year-on-year

7,500

IR BOOK 2021 - Business Strategy

In 2022, we plan to achieve a 15.5%
year-on-year increase in gross profit andunprecedented 33.0% growth in monthly
fee revenue from Motivation Cloud. Further
enhancing the cycle of diagnosis andtransformation that we have beencultivating since our founding will drive thegrowth of the entire Group.

+33.0%

240,545

7,534

year-on-year

197,101 200,927

200,000

136,483
100,000

6,750

66,866

0

6,000

2021

* Includes sales within the GroupIR BOOK 2021
https://www.lmi.ne.jp/english/

2017

2022

Dec. 31, 2017

(Forecast)2018

Dec. 31, 20182019

Dec. 31, 20192020

Dec. 31, 2020

2021

Dec. 31, 2021

2022

Dec. 31, 2022
(Forecast)* Motivation Company Club membership service for managers

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IR BOOK 2021 - Business Strategy

Individual Development Division
Creating i-Companies

We develop individuals who find fulfillment in life by independently and autonomously developing their own careers. We support the creation of individuals (i-Companies) thatorganizations choose.

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Individual Development Division

Business Content

A Career School Business and a Cram School Business That Both Create
i-Companies That Organizations Choose

IR BOOK 2021
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Career School Business

Cram School BusinessSupport for Working People in
Developing Their Careers

Support for Students in Passing
Examinations

AVV ブランドマーク

基本パターン（CMYK）

For elementary
school students

DKI ブランドマーク 基本パターン（CMYK）

B to C icrosoft OfficeM rogrammingPA ccounting
National
qualifications
Civil service
examinations

B to BA Total Career School

SS-1 individualized instruction
cram schoolE nglishlanguage

Exclusive one-on-one instruction to
improve the grades of students who
attend large prep schoolsC oaching, etc.

Number of schools: 8(Kanto and Kansai areas)

Support for Improving Employee
DX Skills

IT knowledge

Support for acquiring the national “IT Passport”
qualification, etc.

IT operation

Tools for more effective use of Microsoft Office,
Google, etc.

Management Strategy

IR BOOK 2021 - Business Strategy

We define an “i-Company” as an individual
who continues to be chosen in the market asa result of independently and autonomously
taking control of the path of his or her own
career and life.
To support the creation of i-Companies,
we operate a Career School Business, which
supports working people in developing theirown careers, and a Cram School Business,
which helps elementary, junior high andhigh school students pass entrance
examinations for their next stage ofeducation. These businesses provide
ongoing one-stop support to customers
from elementary school students to adults
who are proactively seeking to take exams
or to acquire qualifications and improvetheir skills, so that they can continuelearning without becoming discouraged.
This support ranges from helping
customers to set goals (i-Company vision)and understand their own issues to learning
online and in real-world settings andformulating and revising plans.

For junior andMotivation Academia
senior high school cram school
students
Cultivates academic abilities not justfor passing exams but for acquiring theskills to play an active role in society
Number of schools: 7(Kanto and Kansai areas)

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Individual Development Division

Competitive Advantage

Reliably Generating Results from Motivation Engineering

B to CB to C
Identify Individual Issues
Attributediagnosis

Provide Wide-Ranging Learning Opportunities
Career School

Skill
diagnosis

Qualifications

IT

Portable skills

SkillsMotivation

Technical skills

Diagnosis

B to B

Motivation
Engineering

Transformation

B to B
Provide DX Training by Level

Identify Current Skill Level

Professional

Excel
PowerPointMaterial preparation
knowledge
IT skills

https://www.lmi.ne.jp/english/

Languages

Motivation typeDX Survey Basic

IR BOOK 2021

Cram School

Knowledge

Advanced
BasicManagement Strategy

Business Strategy

Organizational Strategy

Operation

Corporate Governance upport forS
acquiring skills
qualifications
 ore efficientM
organizational
operations
More efficientindividual work

Corporate Data

20

IR BOOK 2021 - Business Strategy

We can ensure results through the ongoing
implementation of a cycle of diagnosis andtransformation based on Motivation
Engineering, our core technology and thesource of our competitive advantage. In the
diagnosis phase, we can design the optimal planby assessing motivation types and skills as wellas progress in studies. In the transformation
phase, we can provide total support for growth,
ranging from examinations to acquisition of
language and IT skills and qualifications, as wellas support for classes and the formation of daily
study habits through an approach that combines
technology with personalized support.

Individual Development Division

Medium-Term Strategy

Generate Synergies with the Organizational Development Division andEnhance DX Support Services for Individuals at Corporations
AVV ブランドマーク

Revenue from DX Support for
Individuals at Companies

IT Skill Support Built Up by the Aviva Brand ominant track record in instruction
Dsince its establishment in 1995

IR BOOK 2021 - Business Strategy

To adapt to the rapidly changing businessenvironment, many companies arepromoting Digital Transformation (DX), anddeveloping employee IT skills is a common
issue. Over the medium to long term, we
will enhance our DX support services forindividuals at corporations by fully utilizing
the know-how we have cultivated under the
Aviva brand and the customer base of theOrganization Development Division. This
will establish our presence in the IT skills
training market, which is expected to grow.
In addition to improving employee
engagement, our support for improving
operational efficiency through thedevelopment of DX skills will accelerate thecreation of organizations that achieve atrue state of “One for All, All for One.”基本パターン（CMYK）(¥ million)

500

Complete lineup of classes

404
Utilization of Customer Assets from the Organizational
Development Division and the Matching Division+ 69.3%250

Organizational
Development
Division238

year-on-year

Number of corporate customers
Approx.

1,800

companies

Number of school district customers
Matching
Division

Approx.

450

0school districts

2020

2021
(¥million)

9,000

IR BOOK 2021
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Individual Development Division

Medium-Term Strategy

Enhancing Technology Services to Optimize Individual Learning

Integrating Technology into Our ProductsTechnology

Enhanced Online Teaching

Personalized
Support

Efficient learning
5 minutes per
sectionUse of an app
to improve
retention rate

IR BOOK 2021 - Business Strategy

To optimize our services that combine
technology with personalized support, we
will enhance both our technology and ourservice over the medium to long term byexpanding SkiP online learning content thatlets students access their learning input
and output whenever and wherever theywant. We will use this service to gradually
increase the number of courses available,
as well as to improve the efficiency ofcontent delivery and consolidate physicallocations. In addition to the learning support
know-how that we have cultivated inbrick-and-mortar locations, we will increasevalue for our customers by promoting
product technologies and online teaching.

Improved
motivation

Improveddeliveryefficiency

Consolidationof physicallocations

Increase thenumber of
students perteacher

Migration online to
optimize bases

Further increase customer base by improving learning efficiency

IR BOOK 2021
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IR BOOK 2021 - Business Strategy

Matching Division

Maximizing the Value of Motivation Companies and i-Companies
We generate synergy by connecting organizations offering fulfilling work with individuals leading fulfilling lives to create engagement.

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Matching Division

Business Content

A Personnel Placement Business and an ALT Placement Business forEngagement Matching* Assistant language teacher

Personnel Placement Business

ALT Placement BusinessSupport for Job Seekers with a High Level ofEngagement

Employment Support for Individuals from
Overseas Seeking to Work in Japan

Operation of OpenWork,an employee online review platform
Individuals

Companies

Membership
fee
Client referralmodel
Subscription
model

Number of ALTs dispatched
Approx. 3,300 per year

Directrecruiting
model

Recruiting companies

Overseas recruiting bases

3 locations

Number of school
districts served

Approx.

 nited StatesUUnited Kingdom
Australia

Personalized employee placement services (newuniversity graduates and mid-career hires)

450

Note: Some business names have changed from the fiscal year ending December 31, 2022.

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IR BOOK 2021 - Business Strategy

Engagement matching, or fitting, helps
companies achieve a high retention rate
based on mutual understanding, empathy
and commitment between an organization
and an individual. We conduct matching by
motivation type as well as by skills tomaximize the value of both organizations
and individuals through engagement
matching. To this end, we currently conduct
a Personnel Placement Business to help
job seekers achieve a high level ofengagement and an ALT* Placement
Business to support individuals fromoverseas seeking to work in Japan.

Matching Division

Competitive Advantage: Personnel Placement Business

Motivation Engineering-Based Engagement Matching Using Both a Platform andan Agency Function

High-Retention Matching Basedon Multifaceted Understanding ofa Company

Company Job Satisfaction Scores
Based on Employee Reviews

Open, direct recruiting using
online reviews
Employee online
review platform
Diagnosis

Motivation
Engineering

Transformation

Diagnosis of Applicant Skills andMotivation Type

Matching Based on Degree ofCompatibility with the Corporate
Climate Rather than Just Skills

Portable skills
Task-directedcapabilities

Self-directedcapabilities

Interpersonal
skillsAppropriate
guidance throughdata-based careerinterviews

Motivation type
Organization
type

IR BOOK 2021
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Behavior type

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IR BOOK 2021 - Business Strategy

We conduct engagement matching
between companies and individuals using
both a platform and an agency function
based on Motivation Engineering, which is
our core technology and the source of ourcompetitive advantage. The OpenWork
website has accumulated more than 10
million employee reviews, which are used
to create job satisfaction scores forcompanies. Direct recruiting through thisplatform results in fewer mismatches.
Then, based on the results of ourdiagnosis of an applicant’s skills andmotivation type, our agency function
enables matching based on compatibility
with the corporate climate as well as
relevant skills for the perfect fit.

Matching Division

Medium-Term Strategy: Personnel Placement Business

Enhancing OpenWork’s Direct Recruiting Model to Realize Synergy with theOrganizational Development Division
Expand the Direct Recruiting Model
Companies seeking
capable talent

OpenWork Recruiting Revenues

Job seekers

Direct matching throughDirect communication
with users who arehighly motivated tochange jobs

High-quality
reviews enable job
seekers to find asuitable job

https://www.lmi.ne.jp/english/+80.0%
year-on-year

Increase in job
openings

110%

Increase in resumes fromjob seekers

Improved matching rate

+

70 %

+

year-on-yearyear-on-year

Stronger coordination with theOrganizational Development Division

Stronger attraction throughimproved user interface* According to an April 2018 survey by
OpenWork Inc., 74.3% of job changers
have used an employee review website.

IR BOOK 2021

IR BOOK 2021 - Business Strategy

The growth of Openwork has createdgreater visibility into the actual working
conditions at organizations and job seekers
now come to check employee review sites
as a matter of course.* Under theseevolving circumstances, we are enhancing
our popular direct recruiting modelaccordingly. This will entail a two-pronged
strategy of increasing the number ofresumes from job seekers as we step up
coordination with the Organizational
Development Division to increase thenumber of job openings. In addition, we aim
to continually improve the matching rates.
We will further stimulate the employee
engagement market by achieving a highlevel of satisfaction among job seekers
through OpenWork and supporting
companies in their efforts to improve
employee engagement through our
Consulting & Cloud Business.

2019

2020

2021

Note: Detailed numbers are not disclosed.

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Matching Division

Competitive Advantage: ALT Placement Business

Achieving a High Level of Engagement between ALTs and Schools Using
Motivation Engineering

IR BOOK 2021
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Utilize Our Consulting KnowHow for Human Resource
Training and Lifestyle Support

Identify the Career
Orientations and Skills of
Foreign Nationals
Aptitudediagnostics

Portable skills

Skilldiagnostics

Human resource
training
Improvement ofengagement

Technical skills

Motivation type
Diagnosis

Motivation
Engineering

A support system thatleverages ournationwide network

Transformation

Rollout of a Cloud-Based Service
for Schoolteachers

Check ALT Engagement
after Placement

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IR BOOK 2021 - Business Strategy

We have achieved a high level of engagement
matching between individuals from overseas
and the schools where they are placed byrepeating the cycle of diagnosis andtransformation based on Motivation
Engineering, which is our core technology andthe source of our competitive advantage. In
addition to identifying the career goals andskills of individuals from overseas, we survey
their engagement after placement toimplement initiatives for developing humanresources and improving engagement using
our consulting know-how. We are also further
improving engagement with schools throughsupport that leverages the nationwide networkthat Interac Co., Ltd., which was established in1972 and is the predecessor of the ALT
Placement Business, built and the rollout of a
new cloud service for school teachers.

Matching Division

Medium-Term Strategy: ALT Placement Business

Aiming to Further Enhance Our Brand Power and Increase Our Share of the ALT
Market through the Introduction of Teachers Cloud, Our New Cloud-Based Service
Expansion of Teachers Cloud

Number of Schools Where Teachers Cloud Has
Been Introduced

About 45% of public
elementary, junior high andhigh schools in Japan

A cloud-based service for teachers
to improve lesson preparation
efficiency and English teaching skills

14,000Contents Include over 15,000 Items
9,300

About 15% of public
Teaching
plans

elementary, junior highand high schools
in Japan
5,600

Educational
Performancematerials andtests
lectures by experts

4,300

Ongoing Introductions to School Districts with ALT
Contracts Are Contributing Significantly to an
Increase in Repeat Business

IR BOOK 2021
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IR BOOK 2021 - Business Strategy

Teachers Cloud is a cloud-based service
launched in June 2021 that leverages theGroup’s track record and consulting
know-how to improve the efficiency ofEnglish class preparation and enhanceteachers’ English language and teachingskills. The rapid promotion of digitalizationin the field of education is raising
expectations for improvements in teacher
productivity and instruction. In the six
months since the launch of Teachers
Cloud, 4,300 elementary, junior high andsenior high schools, or about 15% of all
public schools in Japan, have started using
the service. We will continue introducing
Teachers Cloud in school districts where
we have contracts to place ALTs to increase
the repeat rate and enhance our branding
to further expand our market share.

Management Strategy

Dec. 2021

Business Strategy

2022(Plan)

Organizational Strategy

2023(Plan)

2024(Plan)

Corporate GovernanceCorporate Data

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